Wrap Text
Anglogold Ashanti Limited - Report To Shareholders For The Quarter And Six
Months Ended 30 June 2004
ANGLOGOLD ASHANTI LIMITED
(formerly: AngloGold Limited)
Registration No. 1944/017354/06
Incorporated in the Republic of South Africa
ISIN: ZAE000043485
Share codes:
JSE: ANG
LSE: AGD
NYSE: AU
ASX: AGG
GSE: AGA
Euronext Paris: VA
Euronext Brussels: ANG BB
JSE Sponsor: UBS
REPORT TO SHAREHOLDERS FOR THE QUARTER AND SIX MONTHS ENDED 30 JUNE 2004
Solid operational performance constrained by strong local currencies,
particularly the South African rand
Group results for the quarter...
*Merger with Ashanti completed and integration of assets under way
*Production for the quarter increased by 21% to 1.49Moz
*Despite a 2.5% strengthening in the rand, total cash costs were unchanged at
$260/oz, and in South Africa, total cash costs in local currency decreased by
4%
*Average spot gold price declined 4% to $393/oz; received price of gold down
$20/oz
*Agreement reached to acquire a 29.9% stake in Trans-Siberian Gold for GPB17.6m
($32m)
...and for the six months
*Gold production 4% lower at 2.7Moz, as a result of exceptional Morila
performance in the previous corresponding half-year and sale of Jerritt Canyon
in June 2003, though partly offset by additional production from Ashanti assets
*Total cash costs increased by 27% to $260/oz and adjusted headline earnings
down 21% to $111m mainly due to a stronger rand
*Interim dividend of R1.70 ($0.27)/share declared. Reduced dividend arises from
decline in earnings and necessity for prudence in light of uncertainty over gold
price and rand/dollar exchange rate
Quarter Quarter
ended ended
June March
2004 2004
Unaudited Unaudited
SA rand / Metric
Operating review
Gold
Produced - kg / oz (000) 46,330 38,416
Price received 3 - R/kg / $/oz 81,276 87,837
Total cash costs 1 - R/kg / $/oz 55,162 56,297
Total production costs 1 - R/kg / $/oz 68,659 69,068
Financial review
Operating profit - R / $ million 203 716
Adjusted operating profit 2 - R / $ million 702 884
Net (loss) profit - R / $ million (70) 248
Headline (loss) earnings - R / $ million (22) 286
Adjusted headline earnings 4 - R / $ million 322 400
Capital expenditure 1 - R / $ million 992 567
(Loss) earnings per ordinary
share - cents/share
Basic (28) 111
Diluted (28) 111
Headline (9) 128
Adjusted headline 4 127 179
Dividends - cents/share
Six Six
months months
ended ended
June June
2004 2003
Unaudited Unaudited
SA rand / Metric
Operating review
Gold
Produced - kg / oz (000) 84,746 88,218
Price received 3 - R/kg / $/oz 84,285 89,948
Total cash costs 1 - R/kg / $/oz 55,677 52,659
Total production costs 1 - R/kg / $/oz 68,845 64,254
Financial review
Operating profit - R / $ million 919 2,302
Adjusted operating profit 2 - R / $ million 1,586 2,298
Net (loss) profit - R / $ million 178 991
Headline (loss) earnings - R / $ million 264 1,118
Adjusted headline earnings 4 - R / $ million 722 1,130
Capital expenditure 1 - R / $ million 1,559 1,303
(Loss) earnings per ordinary
share - cents/share
Basic 75 445
Diluted 75 445
Headline 111 502
Adjusted headline 4 303 507
Dividends - cents/share 170 375
Quarter Quarter
ended ended
June March
2004 2004
Unaudited Unaudited
US dollar / Imperial
Operating review
Gold
Produced - kg / oz (000) 1,490 1,235
Price received 3 - R/kg / $/oz 385 405
Total cash costs 1 - R/kg / $/oz 260 259
Total production costs 1 - R/kg / $/oz 324 318
Financial review
Operating profit - R / $ million 26 108
Adjusted operating profit 2 - R / $ million 108 132
Net (loss) profit - R / $ million (12) 38
Headline (loss) earnings - R / $ million (5) 44
Adjusted headline earnings 4 - R / $ million 51 60
Capital expenditure 1 - R / $ million 150 84
(Loss) earnings per ordinary
share - cents/share
Basic (5) 17
Diluted (5) 17
Headline (2) 20
Adjusted headline 4 20 27
Dividends - cents/share
Six Six
months months
ended ended
June June
2004 2003
Unaudited Unaudited
US dollar / Imperial
Operating review
Gold
Produced - kg / oz (000) 2,725 2,836
Price received 3 - R/kg / $/oz 394 349
Total cash costs 1 - R/kg / $/oz 260 204
Total production costs 1 - R/kg / $/oz 321 249
Financial review
Operating profit - R / $ million 134 287
Adjusted operating profit 2 - R / $ million 240 286
Net (loss) profit - R / $ million 26 123
Headline (loss) earnings - R / $ million 39 139
Adjusted headline earnings 4 - R / $ million 111 140
Capital expenditure 1 - R / $ million 234 163
(Loss) earnings per ordinary
share - cents/share
Basic 11 55
Diluted 11 55
Headline 16 62
Adjusted headline 4 47 63
Dividends - cents/share 27 51
Note:
1. 2003 restated to reflect the change in accounting treatment of ore
reserve development expenditure.
2. Operating profit excluding unrealised non-hedge derivatives.
3. Price received including realised non-hedge derivatives.
4. Headline (loss) earnings before unrealised non-hedge derivatives and fair
value losses on interest rate swaps.
$ represents US dollar, unless otherwise stated
ASHANTI INTEGRATION UPDATE
During this past quarter, Ashanti"s London office was closed and the management
team in Ghana was restructured, with associated selected retrenchment of
executives and senior managers, together with the relocation of some officers to
the company"s corporate office in Johannesburg. Annual savings of $11m have been
realised through the repayment of Ashanti"s $139m Revolving Credit Facility, the
termination of consulting contracts, the restructuring of insurance contracts
and procurement procedures, and the closure of the London office.
The AngloGold and Ashanti African exploration teams have been merged and
rationalised, and have relocated to Accra, under the leadership of Charl du
Plessis. Exploration presence has been withdrawn from Sierra Leone, Burkina Faso
and Cote d"Ivoire.
Preparations are under way to commence exploration drilling in the Ituri region
of the DRC.
OPERATIONAL ISSUES
The Ashanti mines have recently recorded generally disappointing operating
performances. However, the problems giving rise to these results and the actions
put in place to overcome them are set out here. Where this is possible, the
timing of the action to be taken is also provided.
1. At Obuasi,
a lack of developed and drilled reserves, in addition to equipment availability,
is negatively impacting gold production. The delivery of new equipment is in
progress, principally drill rigs, loaders and trucks.
Lower-than-planned development achievements are being addressed by improving the
mining contractor"s equipment and improving communications between mine planning
and development planning. The cumulative impact of reduced development has
constrained most aspects of Obuasi"s mine plan to date.
In respect of ore definition drilling, areas where ore reserve definition is
required are currently being identified and a process to ensure proper planning
is being designed. Orders for new machines have been placed.
A new mineral resource manager has been appointed and the centralisation of the
MRM office and personnel at Obuasi is under way.
GMSI and Datamine have been tasked to assist with a full system design and data
processing. Once fully operational, the new MRM system should result in greater
flexibility in life of mine planning processes, and detailed reconciliation and
production reporting.
In respect of mine earthmoving equipment, the overall objective is to reduce
equipment from 200 units to 160 units and in the process to remove excess
equipment from the mine. At the same time, the fleet is being upgraded and
refurbished. A fleet size of less than 30 LHDs, including those used by the
contractor, is being targeted. Orders have been placed for 17 pieces of
equipment. Three LHDs and a dump truck arrived by the end of June. The balance
is scheduled to arrive as planned by mid-September.
As a result of holing the decline ramp in May, access between 26 and 32 Levels
in South mine has been completed, enabling entry from the Sansu mine portal at
South mine to 26 Level. Work is ongoing to improve the planning and excavation
of truck loading points, intersections, passing areas and curves, so as to
increase productivity and improve safety.
Priority has been given to work on the 32 Level connection between GCS and KMS
shafts, with completion scheduled for the second quarter of next year. Once
complete, it will be possible to drive from surface at South mine, through
Central mine, to North mine. This will have multiple benefits for fleet
mobility, maintenance and efficiency, as well as for ventilation (for South
mine) and exploration, with 32 Level becoming a drilling platform.
Completion of the BSVS shaft extension is under way. Raise boring of 16 Level to
26 Level should be completed in December 2004. It will take six months to equip
the conveyor drive. Targeted start to development is the third quarter of 2005,
with development to KMS shaft in 2005/2006. This will allow development and
effective mining of the lower blocks in Central mine.
A project team has been set up to review all aspects of ventilation and cooling,
with the immediate priority on short- and medium-term (9- 24 months)
interventions aimed at addressing temperatures in Central mine. An environmental
manager, from the South African region, will be on site by the end of July 2004.
A Deeps Project Team will be established later this year. In respect of
exploration, thus far 45,000m of diamond drilling has been completed in Central
Deeps, while drilling in North Deeps has started (drilling from 42 South and 19
North). The focus to date has been around the KMS central shaft and is now
shifting to the North area. The intention is to get coverage along the whole
strike of the orebody. Consideration is also being given to undertaking at least
one long hole to 3km, so as to confirm structure at depth.
2. At Iduapriem, the key restriction lies with crushing plants. Crushing circuit
optimisation is being analysed. The plant upgrade is being optimised and with
improved recoveries in the CIP plant, gold production will improve.
Heap leach operations at Iduapriem are being stopped for economic reasons.
Performance in the second half of the year is expected to improve.
3. At Bibiani, development and exploration activities continue in parallel with
underground production studies. Exploration and underground studies will be
reviewed during the third and fourth quarters. In respect of the current mine
plan, open-pit mining and ore stockpile processing will be completed in 2005.
Mining of broken ore in the open pit commenced in June, following the wall
failure and contractor problems, which negatively impacted production in the
first two quarters.
These problems notwithstanding, Bibiani should come close to meeting its annual
production target.
4. At Siguiri, project development and production activities during the second
quarter and the beginning of the third quarter have been affected by the impasse
with the government of Guinea. Whilst ore has been placed on the pad, it has not
been irrigated during the second quarter.
FORECAST PERFORMANCE FOR 2004
It is anticipated that the Ashanti assets will produce 310,000oz at a total cash
cost of $269/oz for the third quarter of 2004 and 343,000oz at $29/oz for the
fourth. As has been noted previously, management anticipates that it will take
between four and six quarters for the remedies set out in this report to have a
significant effect on production and efficiencies.
REVIEW OF THE GOLD MARKET
The second quarter of the year saw a major correction in the three-year rise in
the spot price of gold. Until this quarter, the US dollar spot price of gold had
risen every quarter since the beginning of 2001 (except for a slight retracement
in the second quarter of 2003). During the most recent quarter, the average
price of $393/oz was $15, or 4% lower than the previous quarter.
Trading ranges within the quarter saw the spot price fall by $59/oz, from a high
of $430/oz in early April, to $371/oz in mid-May. The gold price at the end of
the quarter was $394/oz, over $30 lower than the opening price for the quarter.
The period under review saw price volatility in a number of markets besides
gold. The rand strengthened from a weak point of R7.15 to the US dollar, to
close the quarter 14% stronger at R6.16. As a result of moves in both the gold
and rand markets, the South African price of gold fell during the quarter from a
high of almost R88,000/kg to a closing price of R78,000/kg.
During July, we have seen some recovery in the dollar spot price of gold, but
the benefits of this recovery have been offset by strengthening gold producer
currencies. Both the rand and the Australian dollar have risen against the US
dollar since the end of the quarter.
GOLD PRICE DRIVERS
During much of the first half of 2004, the spot price of gold traded in a far
looser relationship to the US dollar/euro exchange rate than had prevailed
during the latter half of 2003. The sharp fall in the spot price in April was
brought about in part by surprisingly positive US economic data, and consequent
inflation fears, and in part by a scare in commodity markets in general,
triggered by the announcement of stricter credit controls in China to curb
credit expansion in that economy and slow the pace of growth that China has
enjoyed in the past year.
However, during the latter part of the quarter, and in July, the gold price has
reverted to a much closer relationship to changes in the value of the dollar
against the euro. The resumption of dollar weakness against the euro since mid-
May has triggered new buying in gold as a currency hedge, lifting the price of
the metal to almost $400/oz by the end of the quarter, and to $408/oz during
July.
As has been the case throughout this price rise, investor and speculator
interest in gold has been the direct mover of the gold price, reflected
specifically in changes in the open position in gold contracts on the New York
Commodities Exchange (Comex). On Comex, this quarter saw the largest change in
open positions in several years, as the net long position of Comex fell from
22.6Moz in early April to little more than 7Moz net long in mid-May. This move
reflected net sales of gold by investors and speculators in that market of over
450t of gold in six weeks (see graph below).
This selling pulled the spot price of gold down to touch $371/oz. in early May.
Since May, Comex has traded largely in a neutral zone, with small additions to
the net long position.
The quarter closed with Comex net long 9.7Moz or 301t. We have seen the gold
price sustained by nett buying on Comex since the end of the quarter, but the
market has moved largely sideways during July.
PHYSICAL DEMAND
Whilst latest figures for physical offtake of gold during the first quarter of
2004 show that demand in a number of areas improved by comparison with the poor
offtake in the first quarter of 2003, the overall erosion of demand for gold for
jewellery fabrication remains unchecked.
The global picture of the gold market during the past year is one in which
physical supply has continued to rise modestly (driven by increases in scrap and
official sector sales), whilst global offtake of gold in jewellery continues to
slip (by 5.5% in 2003). The physical supply of over 900t of gold which was
surplus to fabrication offtake in 2003 was squared by net dehedging, and by a
sharp increase in assumed offtake of gold by investors and speculators. 2003 saw
the largest physical surplus of gold in the gold market in thirty years of
supply and demand statistics on this market, and the market in 2004 is certain
to produce at least the same surplus or larger.
For the quarter under review, there was encouraging physical buying during the
lower gold prices in the first half of the quarter. However, this offtake had
softened by the end of the quarter. In India, the end of the favourable season
for marriage (between December and May) saw lower levels of demand in June. In
addition, rupee weakness after Indian parliamentary elections in early May wiped
out rupee gains in March and April which had encouraged gold buying in India at
that time, and the Indian market was further weakened as buyers were discouraged
by price volatility caused by currency movements.
CURRENCIES
The major event in the currency markets this quarter was the end of several
months of dollar strength against the euro, and a return to a weaker US
currency.
The dollar had recovered by mid-May to $1.176 to the euro, an exchange rate last
seen six months ago. Thereafter, renewed concerns with the US economy asserted
themselves. This quarter saw the US trade deficit rise further, and there is
little likelihood of policy change to address the US budget deficit during a
presidential election year in that country. The quarter also saw the Federal
Reserve signal the end of the current cycle of US monetary and interest rate
policy by the first increase in the US discount rate in more than four years.
It is still unclear whether the change in interest rate policy will signal also
the end of the three year cycle of dollar retracement against the euro.
On balance, we believe that structural factors should prevail, and that the US
currency is likely to continue weaker. There are, however, differences of
opinion as to how far it might weaken. As we have seen on two occasions already,
European leaders are uncomfortable and concerned for their economy as the
American currency approaches $1.30 to the euro, and some public resistance
should be expected from Europe if the dollar returns to those levels.
The South African currency has again strengthened disproportionately against the
dollar, gaining ground as a result against other major currencies as well.
Since the end of the quarter, the rand has returned to an exchange rate of R6 to
the dollar, a level at which the currency traded five years ago. Whilst the
Reserve Bank remains focused on an inflation target to guide its interest rate
and monetary policy, it would seem that little relief will come from official
policy in moderating the negative effects of the stronger currency on production
and employment in the South African export industries.
HEDGING
As at 30 June 2004, the net delta hedge position of AngloGold Ashanti was
12.5Moz, or 389t, at a spot price of gold of $393.25/oz. This net delta volume
was made up of an amount of 7Moz (218t) in the original AngloGold Limited hedge,
and 5.5Moz (171t) of hedge taken on with the merger with Ashanti Goldfields at
the end of April 2004.
This delta position reflects a reduction of 1.5Moz or 46t in the net size of the
combined hedges compared with the previous quarter. The marked- to-market value
of this combined position as at 30 June 2004 was negative $927m, reflecting the
increase in the size of the hedge following the merger with Ashanti Goldfields.
The company has continued to manage its hedge positions actively, and to reduce
overall levels of pricing commitments in respect of future production of gold.
HEDGE POSITION
As at 30 June 2004, the group had outstanding the following forward-pricing
commitments against future production. The total net delta tonnage of the hedge
of the merged company on this date was 12.5Moz or 388.9t (at 31 March 2004,
AngloGold"s reported a net delta hedge tonnage was 8.16Moz or 253.9t; Ashanti on
that date had a net delta tonnage of 5.8Moz or 180.3t; these figures includes
each company"s attributable share in Geita).
The marked-to-market value of all hedge transactions making up the hedge
positions was a negative $927.1m (negative R5.71bn) as at 30 June 2004 (as at 31
March 2004: AngloGold Limited reported a valuation of negativ $651.9m, or
R4.1bn; Ashanti"s hedge had a marked-to- market value of negative $562m). This
value at 30 June 2004 was based on a gold price of $393.25/oz, exchange rates of
R/$6.16 and A$/$0.69 and the prevailing market interest rates and volatilities
at that date.
As at 28 July 2004, the marked-to-market value of the hedge book was a negative
$863.5m (negative R5.44bn), based on a gold price of $387.75/oz and exchange
rates of R/$6.2950 and A$/$0.7006 and the prevailing market interest rates and
volatilities at the time.
These marked-to-market valuations are not predictive of the future value of the
hedge position, nor of future impact on the revenue of the company. The
valuation represents the cost of buying all hedge contracts at the time of
valuation, at market prices and rates available at the time.
Year 2004 2005 2006 2007
DOLLAR GOLD
Forward
contracts Amount (kg) 26,749 51,523 40,416 38,519
$ per oz $326 $329 $341 $343
Put options
purchased Amount (kg) 2,351 3,381 5,481 1,455
$ per oz $349 $347 $355 $292
*Delta (kg) 600 808 1,286 85
Put options
sold Amount (kg) 7,900 2,799 4,354
$ per oz $343 $345 $339
*Delta (kg) 987 462 720
Call
options
purchased Amount (kg) 7,706 5,401 1,538 2,003
$ per oz $343 $347 $370 $361
*Delta (kg) 7,170 4,407 1,107 1,553
Call
options
sold Amount (kg) 17,977 34,094 22,208 19,714
$ per oz $368 $345 $351 $342
*Delta (kg) 12,831 27,655 17,459 16,444
RAND GOLD
Forward
contracts Amount (kg)
Rand per kg
Put options
purchased Amount (kg) 3,266 1,875
Rand per kg R79,931 R93,602
*Delta (kg) 2,055 723
Put options
sold Amount (kg) 6,793 1,400
Rand per kg R80,570 R88,414
*Delta (kg) 4,953 516
Call
options
purchased Amount (kg) 9,126
Rand per kg R80,414
*Delta (kg) 2,896
Call
options
sold Amount (kg) 2,340 3,745 5,621 746
Rand per kg R110,375 R148,690 R131,389 R173,119
*Delta (kg) 23 42 1,395 73
Year 2008 2009-2013 Total
DOLLAR GOLD
Forward contracts Amount (kg) 28,256 60,719 246,182
$ per oz $360 $367 $346
Put options purchased Amount (kg) 12,668
$ per oz $345
*Delta (kg) 2,779
Put options sold Amount (kg) 15,053
$ per oz $342
*Delta (kg) 2,169
Call options purchased Amount (kg) 16,648
$ per oz $349
*Delta (kg) 14,237
Call options sold Amount (kg) 20,977 44,026 158,996
$ per oz $353 $368 $356
*Delta (kg) 17,218 36,013 127,620
RAND GOLD
Forward contracts Amount (kg) 933 933
Rand per kg R116,335 R116,335
Put options purchased Amount (kg) 5,141
Rand per kg R84,917
*Delta (kg) 2,778
Put options sold Amount (kg) 8,193
Rand per kg R81,910
*Delta (kg) 5,469
Call options purchased Amount (kg) 9,126
Rand per kg R80,414
*Delta (kg) 2,896
Call options sold Amount (kg) 2,986 8,958 24,396
Rand per kg R187,586 R216,522 R171,444
*Delta (kg) 313 1,570 3,416
Year 2004 2005 2006 2007
A DOLLAR
GOLD
Forward
contracts Amount (kg) 7,434 3,888 9,331 8,398
A$ per oz A$548 A$663 A$664 A$640
Put
options
purchased Amount (kg)
A$ per oz
*Delta (kg)
Put
options
sold Amount (kg) 467
A$ per oz A$572
*Delta (kg) 352
Call
options
purchased Amount (kg) 3,110 6,221 3,732
A$ per oz A$724 A$673 A$668
*Delta (kg) 363 2,689 1,929
Call
options
sold Amount (kg) 1,866
A$ per oz A$566
*Delta (kg) 601
Delta (kg) 33,935 78,684 65,578 60,037
Total
net
gold:
Delta (oz) 1,091,042 2,529,744 2,108,380 1,930,243
Year 2008 2009-2013 Total
A DOLLAR GOLD
Forward contracts Amount (kg) 3,110 8,367 40,528
A$ per oz A$656 A$635 A$631
Put options purchasedAmount (kg)
A$ per oz
*Delta (kg)
Put options sold Amount (kg) 467
A$ per oz A$572
*Delta (kg) 352
Call options
purchased Amount (kg) 3,110 6,221 22,394
A$ per oz A$680 A$712 A$691
*Delta (kg) 1,827 3,921 10,729
Call options sold Amount (kg) 1,866
A$ per oz A$566
*Delta (kg) 601
Delta (kg) 47,070 103,681 388,985
Total net gold:
Delta (oz) 1,513,345 3,333,407 12,506,161
The following table indicates the group"s currency hedge position at 30 June
2004
Year 2004 2005 2006 2007
RAND DOLLAR (000)
Forward contracts Amount ($)
Rand per $
Put options purchased Amount ($)
Rand per $
*Delta ($)
Put options sold Amount ($)
Rand per $
*Delta ($)
Call options purchased Amount ($)
Rand per $
*Delta ($)
Call options sold Amount ($) 75,000
Rand per $ R6.46
*Delta ($) 7,706
The following table indicates the group"s currency hedge position at 30 June
2004
Year 2008 2009-2013 Total
RAND DOLLAR (000)
Forward contracts Amount ($)
Rand per $
Put options purchased Amount ($)
Rand per $
*Delta ($)
Put options sold Amount ($)
Rand per $
*Delta ($)
Call options purchased Amount ($)
Rand per $
*Delta ($)
Call options sold Amount ($) 75,000
Rand per $ R6.46
*Delta ($) 7,706
Year 2004 2005 2006 2007
A DOLLAR (000)
Forward contracts Amount ($) 55,237
$ per A$ $0.59
Put options purchased Amount ($)
$ per A$
*Delta ($)
Put options sold Amount ($)
$ per A$
*Delta ($)
Call options purchased Amount ($)
$ per A$
*Delta ($)
Call options sold Amount ($)
$ per A$
*Delta ($)
BRAZILIAN REAL (000)
Forward contracts Amount ($)
$ per BRL
Put options purchased Amount ($) 6,600 600
$ per BRL BRL3.09 BRL3.38
*Delta ($) 1,892 290
Put options sold Amount ($) 5,100 600
$ per BRL BRL2.79 BRL3.21
*Delta ($) 220 214
Call options purchased Amount ($)
$ per BRL
*Delta ($)
Call options sold Amount ($) 6,600 600
$ per BRL BRL3.19 BRL3.55
*Delta ($) 3,602 233
Year 2008 2009-2013 Total
A DOLLAR (000)
Forward contracts Amount ($) 55,237
$ per A$ $0.59
Put options purchased Amount ($)
$ per A$
*Delta ($)
Put options sold Amount ($)
$ per A$
*Delta ($)
Call options purchased Amount ($)
$ per A$
*Delta ($)
Call options sold Amount ($)
$ per A$
*Delta ($)
BRAZILIAN REAL (000)
Forward contracts Amount ($)
$ per BRL
Put options purchased Amount ($) 7,200
$ per BRL BRL3.11
*Delta ($) 2,182
Put options sold Amount ($) 5,700
$ per BRL BRL2.83
*Delta ($) 434
Call options purchased Amount ($)
$ per BRL
*Delta ($)
Call options sold Amount ($) 7,200
$ per BRL BRL3.22
*Delta ($) 3,835
* The Delta position indicated above reflects the nominal amount of the option
multiplied by the mathematical probability of the option being exercised. This
is calculated using the Black-Scholes option formula with the ruling market
prices, interest rates and volatilities as at 30 June 2004.
GROUP INCOME STATEMENT
Quarter Quarter
ended ended
June March
2004 2004
SA Rand million Notes Unaudited Unaudited
Gold income 3,705 3,298
Cost of sales 2 (3,091) (2,581)
614 717
Non-hedge derivatives (411) (1)
Operating profit 203 716
Corporate administration and other
expenses (105) (76)
Market development costs (22) (26)
Exploration costs (72) (59)
Interest receivable 72 83
Other net expenses (35) (9)
Finance costs (112) (145)
Fair value loss on interest rate swaps (15) (18)
(Loss) profit before exceptional items (86) 466
Amortisation of goodwill (54) (52)
Impairment of mining assets - -
Profit on disposal of assets and
subsidiaries 7 20
(Loss) profit on ordinary activities
before taxation (133) 434
Taxation 3 87 (149)
(Loss) profit on ordinary activities
after taxation (46) 285
Minority interest (24) (37)
Net (loss) profit (70) 248
Adjusted operating profit
The operating profit has been adjusted by
the following
to arrive at adjusted operating profit:
Operating profit 203 716
Unrealised non-hedge derivatives 499 168
Adjusted operating profit 702 884
Headline earnings
The net profit has been adjusted by the
following to
arrive at headline earnings:
Net (loss) profit (70) 248
Amortisation of goodwill 54 52
Impairment of mining assets - -
Profit on disposal of assets and
subsidiaries (7) (20)
Current and deferred taxation on
exceptional items 3 1 6
Headline (loss) earnings (22) 286
Unrealised non-hedge derivatives and fair
value losses
on interest rate swaps 514 186
Deferred tax on unrealised non-hedge
derivatives and
fair value losses on interest rate swaps 3 (170) (72)
Adjusted headline earnings 322 400
(Loss) earnings per ordinary share (cents)
- Basic (28) 111
- Diluted (28) 111
- Headline (9) 128
- Adjusted headline 127 179
Dividends
- Rm
- cents per share
Quarter Six months Six months
ended ended ended
June June June
2003 2004 2003
SA Rand million Unaudited Unaudited Unaudited
Gold income 3,907 7,003 7,845
Cost of sales (2,932) (5,672) (5,817)
975 1,331 2,028
Non-hedge derivatives 119 (412) 274
Operating profit 1,094 919 2,302
Corporate administration and other
expenses (82) (181) (167)
Market development costs (25) (48) (65)
Exploration costs (72) (131) (147)
Interest receivable 63 155 134
Other net expenses (66) (44) (97)
Finance costs (71) (257) (140)
Fair value loss on interest rate
swaps - (33) -
(Loss) profit before exceptional
items 841 380 1,820
Amortisation of goodwill (56) (106) (114)
Impairment of mining assets (95) - (95)
Profit on disposal of assets and
subsidiaries 56 27 56
(Loss) profit on ordinary
activities before taxation 746 301 1,667
Taxation (266) (62) (604)
(Loss) profit on ordinary
activities after taxation 480 239 1,063
Minority interest (36) (61) (72)
Net (loss) profit 444 178 991
Adjusted operating profit
The operating profit has been
adjusted by the following
to arrive at adjusted operating
profit:
Operating profit 1,094 919 2,302
Unrealised non-hedge derivatives (12) 667 (4)
Adjusted operating profit 1,082 1,586 2,298
Headline earnings
The net profit has been adjusted by
the following to
arrive at headline earnings:
Net (loss) profit 444 178 991
Amortisation of goodwill 56 106 114
Impairment of mining assets 95 - 95
Profit on disposal of assets and
subsidiaries (56) (27) (56)
Current and deferred taxation on
exceptional items (26) 7 (26)
Headline (loss) earnings 513 264 1,118
Unrealised non-hedge derivatives
and fair value losses
on interest rate swaps (12) 700 (4)
Deferred tax on unrealised
non-hedge derivatives and
fair value losses on interest rate
swaps 15 (242) 16
Adjusted headline earnings 516 722 1,130
(Loss) earnings per ordinary share
(cents)
- Basic 199 75 445
- Diluted 199 75 445
- Headline 230 111 502
- Adjusted headline 232 303 507
Dividends
- Rm 449 836
- cents per share 170 375
The results have been prepared in accordance with International Financial
Reporting Standards (IFRS).
GROUP INCOME STATEMENT
Quarter Quarter
ended ended
June March
2004 2004
US Dollar million Notes Unaudited Unaudited
Gold income 563 488
Cost of sales 2 (470) (381)
93 107
Non-hedge derivatives (67) 1
Operating profit 26 108
Corporate administration and other
expenses (16) (11)
Market development costs (3) (4)
Exploration costs (11) (9)
Interest receivable 11 12
Other net expenses (5) (2)
Finance costs (17) (21)
Fair value loss on interest rate swaps (2) (3)
(Loss) profit before exceptional items (17) 70
Amortisation of goodwill (8) (8)
Impairment of mining assets - -
Profit on disposal of assets and
subsidiaries - 4
(Loss) profit on ordinary activities
before taxation (25) 66
Taxation 3 15 (22)
(Loss) profit on ordinary activities
after taxation (10) 44
Minority interest (2) (6)
Net (loss) profit (12) 38
Adjusted operating profit
The operating profit has been adjusted by
the following
to arrive at adjusted operating profit:
Operating profit 26 108
Unrealised non-hedge derivatives 82 24
Adjusted operating profit 108 132
Headline earnings
The net profit has been adjusted by the
following to
arrive at headline earnings:
Net (loss) profit (12) 38
Amortisation of goodwill 8 8
Impairment of mining assets - -
Profit on disposal of assets and
subsidiaries - (4)
Current and deferred taxation on
exceptional items 3 (1) 2
Headline (loss) earnings (5) 44
Unrealised non-hedge derivatives and fair
value losses
on interest rate swaps 84 27
Deferred tax on unrealised non-hedge
derivatives and
fair value losses on interest rate swaps 3 (28) (11)
Adjusted headline earnings 51 60
(Loss) earnings per ordinary share (cents)
- Basic (5) 17
- Diluted (5) 17
- Headline (2) 20
- Adjusted headline 20 27
Dividends
- $m
- cents per share
Quarter Six months Six months
ended ended ended
June June June
2003 2004 2003
US Dollar million Unaudited Unaudited Unaudited
Gold income 505 1,051 977
Cost of sales (380) (851) (726)
125 200 251
Non-hedge derivatives 17 (66) 36
Operating profit 142 134 287
Corporate administration and other
expenses (11) (27) (21)
Market development costs (3) (7) (8)
Exploration costs (9) (20) (18)
Interest receivable 9 23 17
Other net expenses (11) (7) (14)
Finance costs (9) (38) (17)
Fair value loss on interest rate
swaps - (5) -
(Loss) profit before exceptional
items 108 53 226
Amortisation of goodwill (7) (16) (14)
Impairment of mining assets (12) - (12)
Profit on disposal of assets and
subsidiaries 7 4 7
(Loss) profit on ordinary
activities before taxation 96 41 207
Taxation (34) (7) (75)
(Loss) profit on ordinary
activities after taxation 62 34 132
Minority interest (5) (8) (9)
Net (loss) profit 57 26 123
Adjusted operating profit
The operating profit has been
adjusted by the following
to arrive at adjusted operating
profit:
Operating profit 142 134 287
Unrealised non-hedge derivatives (2) 106 (1)
Adjusted operating profit 140 240 286
Headline earnings
The net profit has been adjusted by
the following to
arrive at headline earnings:
Net (loss) profit 57 26 123
Amortisation of goodwill 7 16 14
Impairment of mining assets 12 - 12
Profit on disposal of assets and
subsidiaries (7) (4) (7)
Current and deferred taxation on
exceptional items (3) 1 (3)
Headline (loss) earnings 66 39 139
Unrealised non-hedge derivatives
and fair value losses
on interest rate swaps (2) 111 (1)
Deferred tax on unrealised
non-hedge derivatives and
fair value losses on interest rate
swaps 2 (39) 2
Adjusted headline earnings 66 111 140
(Loss) earnings per ordinary share
(cents)
- Basic 26 11 55
- Diluted 25 11 55
- Headline 30 16 62
- Adjusted headline 30 47 63
Dividends
- $m 72 113
- cents per share 27 51
The results have been prepared in accordance with International Financial
Reporting Standards (IFRS).
Dividends are translated at actual rates on date of payment. The current
period is an indicative rate only.
GROUP BALANCE SHEET
As at As at As at A s at
June March June December
2004 2004 2003 2003
SA Rand million Unaudited Unaudited Unaudited Audited
ASSETS
Non-current assets
Tangible assets 34,079 18,082 18,283 18,427
Intangible assets 2,524 2,545 2,980 2,749
Investments in associates 43 47 155 47
Other investments 133 125 237 86
Other non-current assets 520 964 853 1,011
Derivatives 832 696 592 630
38,131 22,459 23,100 22,950
Current assets
Inventories 2,511 1,853 1,778 2,050
Trade and other
receivables 1,873 1,542 1,523 1,461
Cash and cash equivalents 3,458 5,868 2,330 3,367
Current portion of other
non-current assets 385 103 67 59
Derivatives 1,904 2,062 1,954 2,515
10,131 11,428 7,652 9,452
TOTAL ASSETS 48,262 33,887 30,752 32,402
EQUITY AND LIABILITIES
Equity 19,782 11,104 12,464 11,222
Non-current liabilities
Borrowings 8,088 7,977 4,122 5,383
Provisions 2,117 1,808 1,798 1,832
Deferred taxation 8,268 4,091 3,953 3,986
Derivatives 2,123 2,086 1,200 2,194
20,596 15,962 11,073 13,395
Current liabilities
Current portion of
borrowings 2,125 2,151 2,547 2,340
Trade and other payables 2,940 1,971 2,181 2,339
Taxation 157 141 193 164
Derivatives 2,662 2,558 2,294 2,942
7,884 6,821 7,215 7,785
TOTAL EQUITY AND
LIABILITIES 48,262 33,887 30,752 32,402
The results have been prepared in accordance with International Financial
Reporting Standards (IFRS).
GROUP BALANCE SHEET
As at As at As at A s at
June March June December
2004 2004 2003 2003
US Dollar million Unaudited Unaudited Unaudited Audited
ASSETS
Non-current assets
Tangible assets 5,473 2,877 2,443 2,764
Intangible assets 405 405 398 412
Investments in associates 7 7 21 7
Other investments 21 20 32 13
Other non-current assets 83 153 114 153
Derivatives 134 111 79 94
6,123 3,573 3,087 3,443
Current assets
Inventories 403 295 238 307
Trade and other
receivables 301 245 203 219
Cash and cash equivalents 555 934 311 505
Current portion of other
non-current assets 62 16 9 9
Derivatives 306 328 261 377
1,627 1,818 1,022 1,417
TOTAL ASSETS 7,750 5,391 4,109 4,860
EQUITY AND LIABILITIES
Equity 3,177 1,767 1,666 1,684
Non-current liabilities
Borrowings 1,299 1,269 551 807
Provisions 340 288 240 275
Deferred taxation 1,328 651 528 598
Derivatives 341 332 160 329
3,308 2,540 1,479 2,009
Current liabilities
Current portion of
borrowings 341 342 340 351
Trade and other payables 471 313 291 350
Taxation 25 22 26 25
Derivatives 428 407 307 441
1,265 1,084 964 1,167
TOTAL EQUITY AND
LIABILITIES 7,750 5,391 4,109 4,860
The results have been prepared in accordance with International Financial
Reporting Standards (IFRS).
GROUP CASH FLOW STATEMENT
Quarter Quarter Quarter
ended ended ended
June March June
2004 2004 2003
SA Rand million Unaudited Unaudited Unaudited
Cash flows from operating activities
Cash generated from operations 761 549 1,106
Interest received 61 72 53
Environmental and other expenditure (13) (17) (33)
Dividends received from associates - - -
Finance costs (78) (175) (58)
Recoupment tax received: Free State
assets - - 681
Recoupment tax paid: Free State assets - - (681)
Taxation paid (56) (105) (547)
Net cash inflow from operating
activities 675 324 521
Cash flows from investing activities
Capital expenditure (992) (567) (538)
Proceeds from disposal of mining
assets 9 26 14
Investments acquired (2) - (3)
(Acquisition) disposal of subsidiary (802) - 8
Loans advanced (32) (1) (6)
Repayment of loans advanced 106 3 7
Net cash outflow from investing
activities (1,713) (539) (518)
Cash flows from financing activities
Proceeds from issue of share capital 1 11 3
Share issue expenses (1) - (1)
Proceeds from borrowings 60 6,737 75
Repayment of borrowings (1,379) (3,192) (305)
Dividends paid (59) (758) (38)
Net cash (outflow) inflow from
financing activities (1,378) 2,798 (266)
Net (decrease) increase in cash and
cash equivalents (2,416) 2,583 (263)
Translation 6 (82) (93)
Opening cash and cash equivalents 5,868 3,367 2,686
Closing cash and cash equivalents 3,458 5,868 2,330
Cash generated from operations
(Loss) profit on ordinary activities
before taxation (133) 434 746
Adjusted for:
Non-cash movements (66) 42 81
Non-cash movement on derivatives 425 189 (26)
Amortisation of mining assets 600 446 444
Deferred stripping costs (40) (74) (70)
Interest receivable (72) (83) (63)
Finance costs 130 145 71
Amortisation of goodwill 54 52 56
Impairment of mining assets - - 95
Profit on disposal of assets and
subsidiaries (7) (20) (56)
Movement in working capital (130) (582) (172)
Movement in working capital 761 549 1,106
(Increase) decrease in inventories (157) 196 26
(Increase) in trade and other
receivables (168) (57) (99)
Increase (decrease) in trade and
other payables 195 (721) (99)
(130) (582) (172)
Six months Six months
ended ended
June June
2004 2003
SA Rand million Unaudited Unaudited
Cash flows from operating activities
Cash generated from operations 1,310 2,583
Interest received 133 115
Environmental and other expenditure (30) (83)
Dividends received from associates - 9
Finance costs (253) (144)
Recoupment tax received: Free State assets - 681
Recoupment tax paid: Free State assets - (681)
Taxation paid (161) (628)
Net cash inflow from operating activities 999 1,852
Cash flows from investing activities
Capital expenditure (1,559) (1,026)
Proceeds from disposal of mining assets 35 14
Investments acquired (2) (3)
(Acquisition) disposal of subsidiary (802) 8
Loans advanced (33) (8)
Repayment of loans advanced 109 7
Net cash outflow from investing activities (2,252) (1,008)
Cash flows from financing activities
Proceeds from issue of share capital 12 20
Share issue expenses (1) (2)
Proceeds from borrowings 6,797 148
Repayment of borrowings (4,571) (413)
Dividends paid (817) (1,560)
Net cash (outflow) inflow from financing
activities 1,420 (1,807)
Net (decrease) increase in cash and cash
equivalents 167 (963)
Translation (76) (251)
Opening cash and cash equivalents 3,367 3,544
Closing cash and cash equivalents 3,458 2,330
Cash generated from operations
(Loss) profit on ordinary activities before
taxation 301 1,667
Adjusted for:
Non-cash movements (24) 125
Non-cash movement on derivatives 614 (15)
Amortisation of mining assets 1,046 893
Deferred stripping costs (114) (128)
Interest receivable (155) (134)
Finance costs 275 140
Amortisation of goodwill 106 114
Impairment of mining assets - 95
Profit on disposal of assets and subsidiaries (27) (56)
Movement in working capital (712) (118)
Movement in working capital 1,310 2,583
(Increase) decrease in inventories 39 56
(Increase) in trade and other receivables (225) (15)
Increase (decrease) in trade and other payables (526) (159)
(712) (118)
The results have been prepared in accordance with International Financial
Reporting Standards (IFRS).
GROUP CASH FLOW STATEMENT
Quarter Quarter Quarter
ended ended ended
June March June
2004 2004 2003
US Dollar million Unaudited Unaudited Unaudited
Cash flows from operating activities
Cash generated from operations 98 120 130
Interest received 9 11 7
Environmental and other expenditure (2) (3) (4)
Dividends received from associates - - -
Finance costs (12) (26) (8)
Recoupment tax received: Free State
assets - - 91
Recoupment tax paid: Free State assets - - (91)
Taxation paid (9) (15) (62)
Net cash inflow from operating
activities 84 87 63
Cash flows from investing activities
Capital expenditure (150) (84) (69)
Proceeds from disposal of mining
assets 1 4 2
Investments acquired - - -
(Acquisition) disposal of subsidiary (126) - 1
Loans advanced (5) - (1)
Repayment of loans advanced 16 - 1
Net cash outflow from investing
activities (264) (80) (66)
Cash flows from financing activities
Proceeds from issue of share capital - 2 -
Share issue expenses - - -
Proceeds from borrowings 22 997 9
Repayment of borrowings (213) (472) (38)
Dividends paid (9) (113) (5)
Net cash (outflow) inflow from
financing activities (200) 414 (34)
Net (decrease) increase in cash and
cash equivalents (380) 421 (37)
Translation 1 8 8
Opening cash and cash equivalents 934 505 340
Closing cash and cash equivalents 555 934 311
Cash generated from operations
(Loss) profit on ordinary activities
before taxation (25) 66 96
Adjusted for:
Non-cash movements (9) 7 11
Non-cash movement on derivatives 70 27 (3)
Amortisation of mining assets 91 66 57
Deferred stripping costs (6) (11) (9)
Interest receivable (11) (12) (9)
Finance costs 20 21 9
Amortisation of goodwill 8 8 7
Impairment of mining assets - - 12
Profit on disposal of assets and
subsidiaries - (4) (7)
Movement in working capital (40) (48) (34)
98 120 130
Movement in working capital
(Increase) decrease in inventories (29) 13 (8)
(Increase) in trade and other
receivables (29) (23) (28)
Increase (decrease) in trade and
other payables 18 (38) 3
(40) (48) (34)
Six months Six months
ended ended
June June
2004 2003
US Dollar million Unaudited Unaudited
Cash flows from operating activities
Cash generated from operations 218 311
Interest received 20 14
Environmental and other expenditure (5) (10)
Dividends received from associates - 1
Finance costs (38) (18)
Recoupment tax received: Free State assets - 91
Recoupment tax paid: Free State assets - (91)
Taxation paid (24) (72)
Net cash inflow from operating activities 171 226
Cash flows from investing activities
Capital expenditure (234) (128)
Proceeds from disposal of mining assets 5 2
Investments acquired - -
(Acquisition) disposal of subsidiary (126) 1
Loans advanced (5) (1)
Repayment of loans advanced 16 1
Net cash outflow from investing activities (344) (125)
Cash flows from financing activities
Proceeds from issue of share capital 2 2
Share issue expenses - -
Proceeds from borrowings 1,019 18
Repayment of borrowings (685) (51)
Dividends paid (122) (190)
Net cash (outflow) inflow from financing
activities 214 (221)
Net (decrease) increase in cash and cash
equivalents 41 (120)
Translation 9 18
Opening cash and cash equivalents 505 413
Closing cash and cash equivalents 555 311
Cash generated from operations
(Loss) profit on ordinary activities before
taxation 41 207
Adjusted for:
Non-cash movements (2) 16
Non-cash movement on derivatives 97 (2)
Amortisation of mining assets 157 111
Deferred stripping costs (17) (16)
Interest receivable (23) (17)
Finance costs 41 17
Amortisation of goodwill 16 14
Impairment of mining assets - 12
Profit on disposal of assets and subsidiaries (4) (7)
Movement in working capital (88) (24)
218 311
Movement in working capital
(Increase) decrease in inventories (16) (24)
(Increase) in trade and other receivables (52) (39)
Increase (decrease) in trade and other payables (20) 39
(88) (24)
The results have been prepared in accordance with International Financial
Reporting Standards (IFRS).
STATEMENT OF CHANGES IN EQUITY
Attributable to holders of the group
Ordinary Equity
share portion of
capital and convertible
premium bond
SA Rand million
Balance at December 2002 9,607 -
Movements on other comprehensive
income
Net profit
Dividends paid
Ordinary shares issued 18
Transfer from non-distributable
reserves
Translation
Balance at June 2003 9,625 -
Balance at December 2003 9,668 -
Movements on other comprehensive
income
Net profit
Dividends paid
Ordinary shares issued 9,312
Issue of convertible bond 513
At acquisition of subsidiary
Translation
Balance at June 2004 18,980 513
Non -
distri- Foreign
butable currency
reserves translation
SA Rand million
Balance at December 2002 138 360
Movements on other comprehensive
income
Net profit
Dividends paid
Ordinary shares issued
Transfer from non-distributable
reserves (1)
Translation 1 (540)
Balance at June 2003 138 (180)
Balance at December 2003 138 (755)
Movements on other comprehensive
income
Net profit
Dividends paid
Ordinary shares issued
Issue of convertible bond
At acquisition of subsidiary
Translation (1,579)
Balance at June 2004 138 (2,334)
Other
compre-
hensive Retained
income earnings Total
SA Rand million
Balance at December 2002 (1,583) 3,853 12,375
Movements on other comprehensive
income 680 680
Net profit 991 991
Dividends paid (1,500) (1,500)
Ordinary shares issued 18
Transfer from non-distributable
reserves 1 -
Translation 135 (404)
Balance at June 2003 (768) 3,345 12,160
Balance at December 2003 (2,031) 3,848 10,868
Movements on other comprehensive
income 811 811
Net profit 178 178
Dividends paid (748) (748)
Ordinary shares issued 9,312
Issue of convertible bond 513
At acquisition of subsidiary -
Translation 77 (1,502)
Balance at June 2004 (1,143) 3,278 19,432
Minority Total
interest equity
SA Rand million
Balance at December 2002 347 12,722
Movements on other comprehensive
income 680
Net profit 72 1,063
Dividends paid (60) (1,560)
Ordinary shares issued 18
Transfer from non-distributable
reserves -
Translation (55) (459)
Balance at June 2003 304 12,464
Balance at December 2003 354 11,222
Movements on other comprehensive
income 811
Net profit 61 239
Dividends paid (69) (817)
Ordinary shares issued 9,312
Issue of convertible bond 513
At acquisition of subsidiary 22 22
Translation (18) (1,520)
Balance at June 2004 350 19,782
Ordinary Equity
share portion of
capital and convertible
premium bond
US Dollar Million
Balance at December 2002 1,120 -
Movements on other comprehensive
income
Net profit
Dividends paid
Ordinary shares issued 2
Transfer from non-distributable
reserves
Translation 164
Balance at June 2003 1,286 -
Balance at December 2003 1,450 -
Movements on other comprehensive
income
Net profit
Dividends paid
Ordinary shares issued 1,368
Issue of convertible bond 82
At acquisition of subsidiary
Translation 230
Balance at June 2004 3,048 82
Non -
distri- Foreign
butable currency
reserves translation
US Dollar Million
Balance at December 2002 16 43
Movements on other comprehensive
income
Net profit
Dividends paid
Ordinary shares issued
Transfer from non-distributable
reserves -
Translation 2 (67)
Balance at June 2003 18 (24)
Balance at December 2003 21 (113)
Movements on other comprehensive
income
Net profit
Dividends paid
Ordinary shares issued
Issue of convertible bond
At acquisition of subsidiary
Translation 1 (260)
Balance at June 2004 22 (373)
Other
compre-
hensive Retained
income earnings Total
US Dollar Million
Balance at December 2002 (185) 449 1,443
Movements on other comprehensive
income 97 97
Net profit 123 123
Dividends paid (183) (183)
Ordinary shares issued 2
Transfer from non-distributable
reserves - -
Translation (14) 58 143
Balance at June 2003 (102) 447 1,625
Balance at December 2003 (307) 577 1,628
Movements on other comprehensive
income 123 123
Net profit 26 26
Dividends paid (111) (111)
Ordinary shares issued 1,368
Issue of convertible bond 82
At acquisition of subsidiary -
Translation - 34 5
Balance at June 2004 (184) 526 3,121
Minority Total
interest equity
US Dollar Million
Balance at December 2002 40 1,483
Movements on other comprehensive
income 97
Net profit 9 132
Dividends paid (8) (191)
Ordinary shares issued 2
Transfer from non-distributable
reserves -
Translation - 143
Balance at June 2003 41 1,666
Balance at December 2003 53 1,681
Movements on other comprehensive
income 123
Net profit 8 34
Dividends paid (11) (122)
Ordinary shares issued 1,368
Issue of convertible bond 82
At acquisition of subsidiary 3 3
Translation 3 8
Balance at June 2004 56 3,177
The results have been prepared in accordance with International Financial
Reporting Standards (IFRS).
NOTES
Extracts from detailed report - see note 11 below:
Audit of 2003 mineral resource and ore reserve statement: Early this
year, the AngloGold Ashanti 2003 Mineral Resource and Ore Reserve
Statement was submitted to independent consultants for review. The ore
reserves and mineral resources from eight of AngloGold Ashanti"s global
operations were randomly selected and subjected to review. The company
has been informed that the audit identified no material shortcomings in
the process by which AngloGold Ashanti"s reserves and resources were
evaluated. It is the company"s intention to repeat this process
periodically to ensure continued compliance with accepted practice.
Prospects for the third quarter and year: AngloGold Ashanti anticipates
producing approximately 1.6Moz at a total cash cost of about $263/oz,
assuming a rand/dollar exchange rate of R6.59. For the full year, the
company expects to produce approximately 6.1Moz at a total cash cost of
about $260/oz, assuming an exchange rate of R6.59 for the year. The
revision to these estimates follows an in-depth review of the Ashanti
integration plan post the closure of the transaction. The company remains
encouraged by the potential of these assets.
1. Basis of preparation: The financial statements have been prepared in
accordance with the historic cost convention except for certain financial
instruments which are stated at fair value. The group"s accounting
policies used in the preparation of these financial statements are
consistent with those used in the annual financial statements for the
year ended 31 December 2003.
The summarised group financial statements of AngloGold Ashanti Limited
have been prepared in accordance with International Financial Reporting
Standards (IFRS), South African Statements of Generally Accepted
Accounting Practices (SA GAAP), in compliance with the JSE Securities
Exchange South Africa and in the manner required by the South African
Companies Act, 1973 for the preparation of financial information of the
company for the quarter and six months ended 30 June 2004. However, they
do not include all of the information and disclosures required by
International Financial Reporting Standards (IFRS) and SA GAAP and the
South African Companies Act, 1973 for annual consolidated financial
statements.
Where the presentation or classification of an item has been amended,
comparative amounts have been reclassified to ensure comparability with
the current period. The amendments have been made to provide the users of
the financial statements with additional information.
2. Cost of sales
Quarter ended Six months ended
June March June June
2004 2004 2004 2003
Unaudited Unaudited Unaudited Unaudited
SA Rand million
Cash operating costs 2,492 2,095 4,587 4,807
Other cash costs 80 59 139 133
Total cash costs 2,572 2,154 4,726 4,940
Retrenchment costs 7 25 32 5
Rehabilitation & other
non-cash costs 43 41 84 49
Production costs 2,622 2,220 4,842 4,994
Amortisation of mining
assets 600 446 1,046 893
Total production costs 3,222 2,666 5,888 5,887
Inventory change (131) (85) (216) (70)
3,091 2,581 5,672 5,817
Quarter ended Six months ended
June March June June
2004 2004 2004 2003
Unaudited Unaudited Unaudited Unaudited
US Dollar million
Cash operating costs 378 310 688 600
Other cash costs 13 8 21 17
Total cash costs 391 318 709 617
Retrenchment costs 1 4 5 1
Rehabilitation & other
non-cash costs 7 6 13 6
Production costs 399 328 727 624
Amortisation of mining
assets 91 66 157 111
Total production costs 490 394 884 735
Inventory change (20) (13) (33) (9)
470 381 851 726
3. Taxation
Quarter ended Six months ended
June March June June
2004 2004 2004 2003
Unaudited Unaudited Unaudited Unaudited
SA Rand million
Normal taxation 49 77 126 396
Deferred taxation 33 138 171 218
Deferred tax on
unrealised non-hedge
derivatives and fair
value losses on
interest rate swaps (170) (72) (242) 16
Taxation on exceptional
items 1 6 7 (26)
(87) 149 62 604
Quarter ended Six months ended
June March June June
2004 2004 2004 2003
Unaudited Unaudited Unaudited Unaudited
US Dollar million
Normal taxation 8 11 19 49
Deferred taxation 6 20 26 27
Deferred tax on
unrealised non-hedge
derivatives and fair
value losses on
interest rate swaps (28) (11) (39) 2
Taxation on exceptional
items (1) 2 1 (3)
(15) 22 7 75
4. Capital commitments
June March June Dec
2004 2004 2003 2003
SA Rand million
Orders placed and outstanding
on capital contracts at the
prevailing rate of exchange 885 931 1,123 650
June March June Dec
2004 2004 2003 2003
US Dollar million
Orders placed and outstanding
on capital contracts at the
prevailing rate of exchange 142 148 150 98
5. Shares
Quarter ended
June 2004 March 2004 June 2003
Authorised share capital:
Ordinary shares of 25 SA cents
each 400,000,000 400,000,000 400,000,000
A redeemable preference shares
of 50 SA cents each 2,000,000 2,000,000 2,000,000
B redeemable preference shares
of 1 SA cent each 778,896 778,896 778,896
Issued share capital:
Ordinary shares 264,403,394 223,255,242 222,785,154
A redeemable preference shares 2,000,000 2,000,000 2,000,000
B redeemable preference shares 778,896 778,896 778,896
Weighted average number of
ordinary
shares for the period
Basic ordinary shares 253,046,275 223,212,890 222,737,513
Diluted number of ordinary
shares 268,430,890 224,180,742 222,437,590
Six months ended
June 2004 June 2003
Authorised share capital:
Ordinary shares of 25 SA cents each 400,000,000 400,000,000
A redeemable preference shares of
2,000,000 2,000,000
50 SA cents each
B redeemable preference shares of
1 SA cent each 778,896 778,896
Issued share capital:
Ordinary shares 264,403,394 222,785,154
A redeemable preference shares 2,000,000 2,000,000
B redeemable preference shares 778,896 778,896
Weighted average number of ordinary
shares for the period
Basic ordinary shares 238,129,583 222,737,513
Diluted number of ordinary shares 248,695,939 223,437,590
During the quarter, 14,400 ordinary shares were allotted in terms of the
AngloGold Share Incentive Scheme and 41,133,752 ordinary shares were allotted in
terms of the merger with Ashanti Goldfields Company Limited. All the preference
shares are held by a wholly-owned subsidiary company.
6. Exchange rates
June 2004 March 2004 June 2003 Dec 2003
Rand/US dollar average
for the year to date 6.67 6.76 8.03 7.55
Rand/US dollar average
for the quarter 6.59 6.76 7.73 6.74
Rand/US dollar closing 6.23 6.28 7.48 6.67
Rand/Australian dollar
average for the year to
date 4.94 5.17 4.96 4.90
Rand/ Australian dollar
average for the quarter 4.70 5.17 4.95 4.82
Rand/ Australian dollar
closing 4.33 4.79 5.02 5.02
7. Attributable interest
Although AngloGold Ashanti holds a 66.7 % interest in Cripple Creek &
Victor Gold Mining Company Limited, it is currently entitled to receive
100% of the cash flows from the operation until the loan, extended to the
joint venture by Anglogold USA Inc., is repaid.
8. Announcements
On 26 May 2004, it was announced that the government of Guinea had placed
an embargo on imports and exports by AngloGold Ashanti"s Siguiri Mine.
This was followed by a further announcement on 14 June 2004 in which the
company advised that constructive discussions had commenced and that the
supply of diesel fuel to the mine had resumed. However, the embargo on the
export of gold from Siguiri remains in place. AngloGold Ashanti is using
its best efforts to bring this undesirable state of affairs to a speedy
and satisfactory resolution.
On 21 June 2004, AngloGold Ashanti announced that talks between management
and union representatives were continuing, following the return to work by
the workforce after a three day strike at Morila.
Following an announcement made on 14 November 2003 in which the company
advised that an agreement had been entered into for the sale of Union
Reefs Gold Mine and associated assets and tenements, AngloGold Ashanti
advises that the agreement has been terminated and related negotiations
for the sale have ceased but that the company continues to explore other
options for the sale of these gold mining assets.
On 1 July 2004, AngloGold Ashanti announced that it had entered into an
agreement with Trans- Siberian Gold plc for the acquisition of a 29.9%
stake in the company through an equity investment of approximately 17.6m
($32m). This first move into Russia allows AngloGold Ashanti the
opportunity of establishing an association with credible partners familiar
with the environment.
9. Dividend: The directors have today declared Interim Dividend No. 96 of 170
(Interim Dividend No. 94: 375) South African cents per ordinary share for
the six months ended 30 June 2004. In compliance with the requirements of
STRATE, given the company"s primary listing on the JSE Securities Exchange
South Africa, the salient dates for payment of the dividend are as follows:
To holders of ordinary shares and to holders of CHESS Depositary Interests
(CDIs) Each CDI represents one-fifth of an ordinary share.
2004
Currency conversion date for UK pounds, Australian
dollars and Ghanaian cedis Thursday, 5 August
Last date to trade ordinary shares cum dividend Friday, 13 August
Last date to register transfers of certificated
securities cum dividend Friday, 13 August
Ordinary shares trade ex dividend Monday, 16 August
Record date Friday, 20 August
Payment date Friday, 27 August
On the payment date, dividends due to holders of certificated securities
on the South African share register will either be electronically
transferred to shareholders" bank accounts or, in the absence of suitable
mandates, dividend cheques will be posted to such shareholders.
Dividends in respect of dematerialised shareholdings will be credited to
shareholders" accounts with the relevant CSDP or broker.
To comply with the further requirements of STRATE, between Monday, 16
August 2004 and Friday, 20 August 2004, both days inclusive, no transfers
between the South African, United Kingdom, Australian and Ghana share
registers will be permitted and no ordinary shares pertaining to the South
African share register may be dematerialised or rematerialised.
To holders of American Depositary Shares
Each American Depositary Share (ADS) represents one
ordinary share.
2004
Ex dividend on New York Stock Exchange Wednesday, 18 August
Record date Friday, 20 August
Approximate date for currency conversion Friday, 27 August
Approximate payment date of dividend Friday, 7 September
Assuming an exchange rate of R6.2737/$1, the dividend payable on an ADS
is equivalent to 27 US cents. This compares with the interim dividend of
50.73 US cents per ADS paid on 9 September 2003. However, the actual rate
of payment will depend on the exchange rate on the date for currency
conversion.
To holders of Ghanaian Depositary Shares (GhDSs)
100 GhDSs represent one ordinary share.
2004
Last date to trade and to register GhDSs cum dividend Friday, 13 August
Record date Friday, 20 August
Approximate payment date of dividend Monday, 30 August
Assuming an exchange rate of R1/c1,446 the dividend payable per GhDS is
equivalent to 24.58 cedis. However, the actual rate of payment will
depend on the exchange rate on the date for currency conversion. In
Ghana, the authorities have determined that dividends payable to
residents on the Ghana share register be subject to a final withholding
tax at a rate of 10%, similar to the rate applicable to dividend payments
made by resident companies which is currently at 10%.
10. The group financial statements for the quarter and six months to 30 June
2004 were authorised for issue in accordance with a resolution of the
directors passed on 28 July 2004. AngloGold Ashanti is a limited liability
company incorporated in the Republic of South Africa.
11. This report contains a summary of the results of AngloGold Ashanti"s
operations. A detailed report appears on the Internet and is obtainable in
printed format from the investor relations contacts, whose details, along
with the website address, appear at the end of this report.
By order of the board
R P EDEY R M GODSELL
Chairman Chief Executive Officer
29 July 2004
OPERATIONS AT A GLANCE
for the quarter ended 30 June 2004
Price received 1
$/oz % Variance 4
Great Noligwa 389 (8)
Sunrise Dam 422 (12)
TauTona 389 (8)
AngloGold Ashanti Brazil 393 12
Geita 5 357 3
Kopanang 390 (8)
Cripple Creek & Victor J.V. 327 8
Cerro Vanguardia 6 361 (2)
Mponeng 388 (8)
Sadiola 6 392 (4)
Serra Grande 6 391 14
Morila 6 353 (6)
Tau Lekoa 390 (8)
Yatela 6 395 (2)
Obuasi 400 -
Bibiani 391 -
Navachab 396 (2)
Iduapriem 6 400 -
Freda-Rebecca 418 -
Ergo 389 (8)
Siguiri 6 - -
Savuka 388 (8)
Other - -
AngloGold Ashanti 385 (5)
Production
oz (000) % Variance 4
Great Noligwa 196 4
Sunrise Dam 97 11
TauTona 147 1
AngloGold Ashanti Brazil 65 25
Geita 5 140 51
Kopanang 122 1
Cripple Creek & Victor J.V. 76 6
Cerro Vanguardia 6 47 34
Mponeng 105 1
Sadiola 6 44 (2)
Serra Grande 6 23 -
Morila 6 34 (21)
Tau Lekoa 81 21
Yatela 6 25 25
Obuasi 71 -
Bibiani 25 -
Navachab 16 7
Iduapriem 6 27 -
Freda-Rebecca 4 -
Ergo 59 (5)
Siguiri 6 17 -
Savuka 38 9
Other 31 19
AngloGold Ashanti 1,490 21
Total cash costs
$/oz % Variance 4
Great Noligwa 223 (5)
Sunrise Dam 255 (7)
TauTona 229 3
AngloGold Ashanti Brazil 129 (7)
Geita 5 226 19
Kopanang 263 (4)
Cripple Creek & Victor J.V. 208 -
Cerro Vanguardia 6 187 2
Mponeng 323 3
Sadiola 6 232 7
Serra Grande 6 125 (4)
Morila 6 238 51
Tau Lekoa 316 (14)
Yatela 6 238 (13)
Obuasi 292 -
Bibiani 237 -
Navachab 320 6
Iduapriem 6 309 -
Freda-Rebecca 447 -
Ergo 391 5
Siguiri 6 386 -
Savuka 462 2
Other - -
AngloGold Ashanti 260 -
Cash operating
profit 2
$m % Variance 4
Great Noligwa 30 (12)
Sunrise Dam 23 35
TauTona 21 (30)
AngloGold Ashanti Brazil 17 55
Geita 5 14 -
Kopanang 13 (28)
Cripple Creek & Victor J.V. 13 8
Cerro Vanguardia 6 10 25
Mponeng 6 (50)
Sadiola 6 6 (33)
Serra Grande 6 6 20
Morila 6 4 (56)
Tau Lekoa 4 -
Yatela 6 4 100
Obuasi 4 -
Bibiani 3 -
Navachab 2 100
Iduapriem 6 - -
Freda-Rebecca (1) -
Ergo (2) (300)
Siguiri 6 (2) -
Savuka (4) 33
Other 16 (14)
AngloGold Ashanti 187 (6)
Adjusted operating
profit 3
$m % Variance 4
Great Noligwa 26 (16)
Sunrise Dam 18 64
TauTona 13 (43)
AngloGold Ashanti Brazil 14 75
Geita 5 8 (20)
Kopanang 10 (33)
Cripple Creek & Victor J.V. 4 300
Cerro Vanguardia 6 3 -
Mponeng - (100)
Sadiola 6 4 (33)
Serra Grande 6 5 25
Morila 6 1 (92)
Tau Lekoa 1 100
Yatela 6 3 200
Obuasi - -
Bibiani - -
Navachab 1 -
Iduapriem 6 - -
Freda-Rebecca (1) -
Ergo (2) (300)
Siguiri 6 (2) -
Savuka (7) 75
Other 9 (10)
AngloGold Ashanti 108 (18)
1 Price received includes realised non-hedge derivatives.
2 Adjusted operating profit plus amortisation of mining assets less non-cash
revenues.
3 Operating profit excluding unrealised non-hedge derivatives.
4 Variance June 2004 quarter on March 2004 quarter - Increase (Decrease).
5 Attributable 100% from May 2004.
6 Attributable.
ADMINISTRATIVE INFORMATION
ANGLOGOLD ASHANTI LIMITED
(formerly: AngloGold Limited)
Registration No. 1944/017354/06
Incorporated in the Republic of South Africa
ISIN: ZAE000043485
Share codes:
JSE: ANG
LSE: AGD
NYSE: AU
ASX: AGG
GSE: AGA
Euronext Paris: VA
Euronext Brussels: ANG BB
JSE Sponsor: UBS
Auditors: Ernst & Young
Contacts
South Africa
Steve Lenahan
Telephone: +27 11 637 6248
Fax: +27 11 637 6400
E-mail:
slenahan@anglogoldashanti.com
Michael Clements
Telephone: +27 11 637 6647
Fax: +27 11 637 6400
E-mail:
mclements@anglogoldashanti.com
United States of America
Charles Carter
Telephone: (800) 417 9255 (toll free in
USA and Canada) or +1 212 750 7999
Fax: +1 212 750 5626
E-mail:
cecarter@anglogoldashanti.com
Australia
Andrea Maxey
Telephone: +61 8 9425 4604
Fax: +61 8 9425 4662
E-mail:
amaxey@anglogoldashanti.com.au
General E-mail enquiries
investors@anglogoldashanti.com
AngloGold Ashanti website
http://www.anglogoldashanti.com
Directors
Executive
R M Godsell (Chief Executive Officer)
J G Best
D L Hodgson
Dr S E Jonah KBE +
K H Williams
Non-Executive
R P Edey * (Chairman)
Dr T J Motlatsi (Deputy Chairman)
F B Arisman #
Mrs E le R Bradley
C B Brayshaw
A W Lea (Alternate: P G Whitcutt)
W A Nairn (Alternate: A H Calver *)
S R Thompson *
A J Trahar
P L Zim (Alternate: D D Barber)
#
* British American +Ghanaian
Offices
Registered and Corporate
Managing Secretary
Ms Y Z Simelane
Company Secretary
C R Bull
11 Diagonal Street
Johannesburg 2001
(PO Box 62117, Marshalltown 2107)
South Africa
Telephone: +27 11 637 6000
Fax: +27 11 637 6624
Australia
Level 13, St Martins Tower
44 St George"s Terrace
Perth, WA 6000
(PO Box Z5046, Perth WA 6831)
Australia
Telephone: +61 8 9425 4604
Fax: +61 8 9425 4662
United Kingdom Secretaries
St James"s Corporate Services Limited
6 St James"s Place
London SW1A 1NP
England
Telephone: +44 20 7499 3916
Fax: +44 20 7491 1989
Share Registrars
South Africa
Computershare Investor Services
2004 (Pty) Limited
Ground Floor, 70 Marshall Street
Johannesburg 2001
(PO Box 61051, Marshalltown
2107)
South Africa
Telephone: +27 11 370 7700
Fax: +27 11 688 7722
United Kingdom
Computershare Investor Services
PLC
P O Box 82
The Pavilions
Bridgwater Road
Bristol BS99 7NH
England
Telephone: +44 870 702 0001
Fax: +44 870 703 6119
Australia
Computershare Investor Services
Pty Limited
Level 2, 45 St George"s Terrace
Perth, WA 6000
(GPO Box D182 Perth, WA 6840)
Australia
Telephone: +61 8 9323 2000
Telephone: 1300 55 7010 (in
Australia)
Fax: +61 8 9323 2033
Ghana
NTHC Limited
Martco House
Off Kwame Nkrumah Avenue
POBox K1A 9563 Airport
Accra
Ghana
Telephone: +233 21 238492-3
Fax: +233 21 229975
ADR Depositary
The Bank of New York ("BoNY")
101 Barclay Street
22nd Floor
New York, NY 10286
United States of America
Telephone: +1 888 269 2377
Fax: +1 212 571 3050/3052
Global BuyDIRECTSM
BoNY maintains a direct share
purchase and dividend
reinvestment plan for ANGLOGOLD
ASHANTI.
Certain statements contained in this document, including, without limitation,
those concerning the economic outlook for the gold mining industry, expectations
regarding gold prices and production, the completion and commencement of
commercial operations of certain of AngloGold Ashanti"s exploration and
production projects, and its liquidity and capital resources and expenditure,
contain certain forward- looking statements regarding AngloGold Ashanti"s
operations, economic performance and financial condition.
Although AngloGold Ashanti believes that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be given that such
expectations will prove to have been correct. Accordingly, results could differ
materially from those set out in the forward-looking statements as a result of,
among other factors, changes in economic and market conditions, success of
business and operating initiatives, changes in the regulatory environment and
other government actions, fluctuations in gold prices and exchange rates, and
business and operational risk management. For a discussion on such risk factors,
refer to AngloGold"s annual report on Form 20-F for the year ended 31 December
2003, which was filed with the Securities and Exchange Commission
(SEC) on 19 March 2004.
Date: 30/07/2004 08:01:47 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
Sharenet Sites 
