Financial results for the six months ended 31 December 2004

Transcription

1 Financial results for the six months ended 31 December February 25 Paseka Ncholo, Chairman Mark Wellesley-Wood, Chief Executive Officer 1 Disclaimer Some of the information in this presentation may contain projections or other forward looking statements regarding future events or other financial performance, including forward-looking statements and information relating to us that are based on the beliefs of our management, as well as assumptions made by and information currently available to our management. When used in this presentation, the words "estimate", "project", "believe", anticipate", "intend", "expect" and similar expressions are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to risks, uncertainties and assumptions. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, adverse changes or uncertainties in general economic conditions in the markets we serve, a drop in the gold price, a continuing strengthening of the Rand against the Dollar, regulatory developments adverse to us or difficulties in maintaining necessary licenses or other governmental approvals, changes in our competitive position, changes in business strategy, any major disruption in production at our key facilities or adverse changes in foreign exchange rates and various other factors. These risks include, without limitation, those described in the section entitled "Risk Factors" included in our annual report for the fiscal year ended 3 June 24, which we filed with the United States Securities and Exchange Commission on 29 November 24 on Form 2-F, as amended by the Form 2-F/A filed on December 3, 24, and those detailed from time to time with the United States Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date thereof. We do not undertake any obligation to publicly update or revise these forward-looking statements to reflect events or circumstances after the date of this report or to the occurrence of unanticipated events. 2

2 Key features Outstanding safety performance Attributable offshore production up to 37% of total Porgera Joint Venture achieves 1 million ounces Emperor stake up to 45.33%; rights issue completed ERPM extends life, receives State assistance North West Operations fully impaired US$5 million Investec facility 3 West Rand safety competition rankings LTIFR Per 1 hours Blyvoor Mponeng Tau Tona Savuka Driefontein Doornkop 21.6 Cooke Cooke Kloof Cooke2 Elandsrand DRDGOLD AngloGold Ashanti Gold Fields Harmony 4

3 Operational overview (6 months) Cash Costs (US$/oz) Production ounces (troy) Cash operating profit/(loss) (US$m) Comment Australasia Porgera JV (2%) Tolukuma Emperor(45.33%) # One million ounces achieved Exploration, exploration High oil price impacts South Africa Blyvoor (6.6) Restructured NWO* (6.5) Under review Crown (4%) # Steady state performance ERPM (4%) # Pumping subsidy 5 * NWO include Harties and Buffels operations # Equity accounted Diversification Production (6 months) ( oz) Cash operating profit/loss (6 months) 6% US$ 1% 34% % % 18% NWO Blyvoor Porgera JV TGM CGR/ERPM Emperor SA operations Australasian operations

4 Margin management 12% margin US$/oz 43 Rand strength Margin restored R59m write-off Hedge book close out Dec-99 Mar- Jun- Sep- Dec- Mar-1 Cash operating costs 1 Jun-1 Sep-1 Dec-1 Mar-2 Jun-2 Sep-2 Dec-2 Mar-3 Jun-3 Sep-3 Gold price Dec-3 Mar-4 Jun-4 Sep-4 Dec-4 Two parts to the story SA operations Australasian operations R/kg US$/oz Dec '3 June'4 Dec'4 1 Dec '3 June'4 Dec'4 Cost: R/kg Rand gold price/kg Cost: US$/oz US$ gold price/oz 8

5 Income statement comparison 6 months 31 Dec 24 Reviewed Rm 6 months 3 June 24 Reviewed Rm 6 months 31 Dec 23 Reviewed Rm Gold price received (R/kg) Ounces Cash operating profit Net operating (loss)/profit (2.6) 17.8 (26.3) Exceptional items (211.)#1 (19.)#2.7 Net loss (37.1) (679.1)#3 (37.3) 9 #1: Impairment of NWO #2: Impairment of CGR loan #3: Deferred tax charge (R512.3m) Cash flow breakdown Rm Operating outflow (9.8) Interest paid (21.5) Tax paid (41.3) Net cash outflow from operations (72.6) Investing activities (22.9) Emperor & rights issue (143.) capex (77.9) Financing activities 33. share capital issued 27.3 Investec 4.8 repayments (1.2) Other (net) 1.8 Closing cash and cash equivalents

6 Porgera JV Key features: Main cash generator Production up, costs down Encouraging underground potential Production (oz) Cash operating profit (US$m) 12, 1, 11,339 12, , 2 6, 46, , , 5 Dec '3 June'4 Dec'4 Dec '3 June'4 Dec'4 11 Tolukuma Key features: Grade variance Encouraging exploration results Production (oz) Cash operating profit (US$m) 5, 45, 4, 35, 3, 25, 2, 43,5 42,665 38, , 1, 5, 2 1 Dec '3 June'4 Dec'4 Dec '3 June'4 Dec'4 12

7 South African operations Finding right mix between surface and underground Surface operations: Blyvoor and Cason retreatment projects both successfully commissioned 53 ounces at average cost of R 7 7/kg Improving efficiencies: g/tec, yields Underground operations at NWO under review Need to redress high cost structures (labour: 58% of total) NWO fully impaired: R 214m 13 North West Operations Key features: Interventions under way Engaging with stakeholders R2m spent over 18 months Production (oz) Cash operating (loss)/profit (Rm) 2, 18, 16, 14, 12, 1, 8, 6, 4, 2, , ,17 152,266 Dec '3 June'4 Dec' Dec '3 June'4 Dec'4

8 Blyvooruitzicht Key features: More cost-effective ounces from underground; better yield Retreatment project now delivering R 26m spent on retrenchment (1 6 employees) No 4 shaft under review Production (oz) 4 Cash operating (loss)/profit (Rm) 14, 12, 1, 8, 6, 4, 125,68 18,26 8, , Dec '3 June'4 Dec' Dec 3 June 4 Dec 4 15 Crown Key features: Consistent cash generator Lone player status presents opportunities Production (attributable) (oz) Cash operating profit (Rm) 3, 25, 26,75 25,232 23, , , 1 1, 5, 5 Dec '3 June'4 Dec'4 Dec '3 June '4 Dec'4 16

9 ERPM Key features: State pumping subsidy renewal submitted Cason retreatment project now delivering Two-week strike in November Production (attributable) (oz) Cash operating profit (Rm) 25, 21,952 22,944 21, , 1 15, 8 1, 5, Dec '3 June'4 Dec'4 Dec '3 June '4 Dec'4 17 Strategy Two different business strategies SA: adjust to Rand environment urgent need to change NWO reduce overheads corporate office relocation/sale direct resources at operational sites continuous improvement focus Offshore: top 2 primary producer $6m annualised EBITDA unlock further value in portfolio 18

10 Offshore business 18 th largest primary gold producer 7, Source: BMO; DRDGOLD 6, 19 5, 4, 3, 2, 1, Newmont Mining Company AngloGold Ashanti Barrick Gold Corporation Gold Fields Limited Placer Dome Inc. Harmony Gold Mining Co. Ltd. Offshore operations annualised Sino Gold Limited Great Basin Gold Ltd. Minas Buenaventura ADR Kinross Gold Corp. Newcrest Mining DRDGOLD Ltd. Centerra Gold Inc. Lihir Gold Limited (ADR) Cambior Inc. Goldcorp Inc. Wheaton River Minerals IAMGOLD Corp. Glamis Gold Ltd. Randgold Resources Bema Gold Corp. Meridian Gold Inc. Hecla Mining Company Agnico-Eagle Mines Ltd. Northgate Minerals Corp. Highland Gold Mining Ltd. Golden Star Resources Yamana Gold Apollo Gold High River Gold Eldorado Gold Corporation River Gold Mines Rio Narcea Gold Mines Richmont Mines Inc. Aurizon Mines Ltd. Offshore business cont d $6m annualised EBITDA $45 Source: BMO; DRDGOLD $4 $35 Offshore operations costs: $26/oz $3 $25 $2 $15 $1 $5 $ Rio Narcea Gold Mines Harmony Gold Mining Co. Ltd. Apollo Gold DRDGOLD Ltd. Gold Fields Limited Bema Gold Corp. Aurizon Mines Ltd. AngloGold Ashanti River Gold Mines IAMGOLD Corp. Lihir Gold Limited (ADR) Cambior Inc. Richmont Mines Inc. Kinross Gold Corp. Placer Dome Inc. Golden Star Resources Newmont Mining Company Highland Gold Mining Ltd. High River Gold Sino Gold Limited Centerra Gold Inc. Northgate Minerals Corp. Hecla Mining Company Eldorado Gold Corporation Yamana Gold Randgold Resources Barrick Gold Corporation Glamis Gold Ltd. Minas Buenaventura ADR Goldcorp Inc. Newcrest Mining Agnico-Eagle Mines Ltd. Meridian Gold Inc. Great Basin Gold Ltd. 2

11 Offshore business cont d Unlock further value in portfolio 9. Source: BMO; DRDGOLD Offshore reserves: AngloGold Ashanti Newmont Mining Company Barrick Gold Corporation Placer Dome Inc. Harmony Gold Mining Co. Ltd. Gold Fields Limited Newcrest Mining Lihir Gold Limited (ADR) DRDGOLD Ltd. Minas Buenaventura ADR Kinross Gold Corp. Agnico-Eagle Mines Ltd. Wheaton River Minerals Highland Gold Mining Ltd. Eldorado Gold Corporation Glamis Gold Ltd. Goldcorp Inc. Meridian Gold Inc. Centerra Gold Inc. Northgate Minerals Corp. Cambior Inc. IAMGOLD Corp. Golden Star Resources Great Basin Gold Ltd. Bema Gold Corp. Randgold Resources Sino Gold Limited Hecla Mining Company Yamana Gold Aurizon Mines Ltd. Apollo Gold River Gold Mines High River Gold Rio Narcea Gold Mines Richmont Mines Inc. 21 Questions 22

12 Financial results for the six months ended 31 December February 25 Paseka Ncholo, Chairman Mark Wellesley-Wood, Chief Executive Officer 23