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ANGLOGOLD ASHANTI LIMITED - REPORT TO SHAREHOLDERS FOR THE QUARTER AND YEAR
ENDED 31 DECEMBER 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
Report to shareholders
for the quarter and year ended 31 December 2004
Group results for the quarter...
- Hedge book restructured to give greater exposure to spot gold price and
to improve value of future forward sales contracts
- Production increased by 4% to 1.699Moz
- Total cash costs increased by 2% to $278/oz, largely due to a further
weakening in the dollar
- Total cash costs in South Africa reduced by almost 2% in rand terms
to R59,541/kg
- Adjusted headline earnings3 improved from $43m to $110m, $59m of which
is the result of a change to the estimated deferred tax rate
... and for the year
- Gold production increased 8% to 6.052Moz, largely due to the merger
with Ashanti
- Total cash costs2 increased 25% to $268/oz mainly due to stronger
operating currencies
- Adjusted headline earnings3 decreased by 7% to $263m, which includes
the effect of a change to the estimated deferred tax rate
- Final dividend declared at R1.80 per share or 30 US cents per share,
resulting in a total dividend of R3.50 or 56 US cents per share
Quarter Quarter Year Year
ended ended ended ended
Dec Sept Dec Dec
2004 2004 2004 2003
SA rand / Metric
Operating review
Gold
Produced - kg / oz (000) 52,852 50,623 188,223 174,668
Price received1 - R/kg / $/oz 76,802 80,572 81,184 87,826
Total cash costs2 - R/kg / $/oz 54,015 55,744 55,246 51,710
otal production costs2 - R/kg / $/oz 68,703 69,582 69,036 63,541
Financial review
Operating profit - R / $ million 110 602 1,629 4,667
Adjusted
operating profit4 - R / $ million 586 631 2,802 4,229
Net profit - R / $ million 136 253 567 2,331
Headline earnings - R / $ million 165 274 703 2,379
Adjusted headline
earnings3 - R / $ million 642 280 1,644 2,133
Capital expenditure2 - R / $ million 1,181 1,004 3,764 3,396
Earnings per ordinary
share - cents/share
Basic 51 96 226 1,046
Diluted 51 96 225 1,042
Headline 62 104 280 1,068
Adjusted headline3 243 106 654 957
Dividends - cents/share 350 710
Quarter Quarter Year Year
ended ended ended ended
Dec Sept Dec Dec
2004 2004 2004 2003
US dollar / Imperial
Operating review
Gold
Produced - kg / oz (000) 1,699 1,628 6,052 5,616
Price received1 - R/kg / $/oz 396 392 394 363
Total cash costs2 - R/kg / $/oz 278 272 268 214
otal production costs2 - R/kg / $/oz 354 340 336 263
Financial review
Operating profit - R / $ million 2 97 232 622
Adjusted
operating profit4 - R / $ million 97 98 434 559
Net profit - R / $ million 16 40 81 312
Headline earnings - R / $ million 20 44 102 318
Adjusted headline
earnings3 - R / $ million 110 43 263 282
Capital expenditure2 - R / $ million 192 156 585 449
Earnings per ordinary
share - cents/share
Basic 6 15 32 140
Diluted 6 15 32 139
Headline 8 17 41 143
Adjusted headline3 42 16 105 127
Dividends - cents/share 56 101
Notes:
1. Price received including realised non-hedge derivatives.
2. 2003 restated to reflect the change in accounting treatment of ore
reserve development expenditure.
3. Headline earnings before unrealised non-hedge derivatives and
fair value gains on interest rate swaps.
4. Operating profit excluding unrealised non-hedge derivatives.
$ represents US dollar, unless otherwise stated.
Operations at a glance
for the quarter ended 31 December 2004
Price received1 Production Total cash costs
% % %
$/oz Variance4 oz (000) Variance4 $/oz Variance4
Great Noligwa 430 5 203 (2) 234 -
Sunrise Dam 433 4 114 2 282 22
Morila5 416 15 90 143 150 (40)
Geita6 352 (4) 190 28 264 (10)
Cerro Vanguardia5 415 9 68 11 130 (10)
TauTona 428 5 131 (9) 278 10
Kopanang 431 6 123 3 285 (6)
AngloGoldAshanti Brazil 365 (1) 59 (8) 135 4
Mponeng 431 6 112 (5) 334 6
Cripple Creek & Victor 317 (2) 91 1 240 10
Sadiola5 419 6 47 24 255 (4)
Serra Grande5 362 - 24 - 147 8
Yatela5 438 9 28 17 276 18
Tau Lekoa 433 6 75 7 397 (2)
Freda-Rebecca - (100) - (100) - (100)
Navachab 428 11 17 (6) 462 53
Bibiani 310 (22) 4 (26) 283 20
Savuka 427 4 42 (2) 458 2
Iduapriem5 315 (16) 42 (24) 354 40
Ergo 416 2 48 (9) 404 3
Obuasi 314 (17) 90 (4) 320 7
Siguiri5 310 (19) 43 87 434 (14)
Other 28 (20)
AngloGold Ashanti 396 1 1,699 4 278 2
Cash operating Adjusted operating
profit (loss)2 profit (loss)3
% %
$m Variance4 $m Variance4
Great Noligwa 38 15 33 14
Sunrise Dam 28 47 20 54
Morila5 24 700 19 -
Geita6 22 175 5 -
Cerro Vanguardia5 22 38 16 78
TauTona 18 (18) 8 (38)
Kopanang 16 33 12 33
AngloGold Ashanti Brazil 13 (19) 10 (23)
Mponeng 10 - 2 (33)
Cripple Creek & Victor 8 (33) (1) (150)
Sadiola5 6 - 3 -
Serra Grande5 5 (17) 4 (20)
Yatela5 4 - 2 -
Tau Lekoa 2 - (3) 25
Freda-Rebecca - (100) - -
Navachab (1) (200) (2) (300)
Bibiani (1) (114) (4) (300)
Savuka (2) 33 (4) 20
Iduapriem5 (2) (140) (7) (450)
Ergo (4) (100) (4) (100)
Obuasi (4) (233) (12) (200)
Siguiri5 (9) (350) (11) (1,000)
Other 18 29 11 38
AngloGold Ashanti 211 10 97 (1)
1 Price received includes realised non-hedge derivatives.
2 Adjusted operating profit (loss) plus amortisation of mining assets less
non-cash revenues.
3 Operating profit excluding unrealised non-hedge derivatives.
4 Variance Dec ember 2004 quarter on September 2004 quarter - increase
(decrease).
5 Attributable.
6 Attributable 100% from May 2004.
Overview of the quarter and the year
In addition to a generally sound operational performance, this quarter is
characterised by two key issues - the restructuring of the hedge book and the
underperformance of the Ashanti assets.
Regarding the hedge book, and in light of the company"s view that the gold
price is likely to trade in the current range or higher in the medium term,
management has taken steps to reduce and improve the hedge position for 2005
and 2006 by delivering into a larger-than-usual number of contracts during the
quarter, together with partially restructuring the hedge book. This has
resulted in a reduction in the net delta of the hedge of some 2.2Moz, to a net
hedge of 10.49Moz at 31 December 2004, down substantially from the 12.7Moz
reported at the end of the last quarter, following the inclusion of the
Ashanti hedge into AngloGold"s book.
The restructured hedge now represents cover equal to 31% of five years"
production of AngloGold Ashanti. The 2.2Moz reduction in this one quarter is
of the same magnitude as the substantial reduction achieved in hedge
restructuring by AngloGold through the second quarter of 2002.
The combined effect of these actions has been to increase the proportion of
AngloGold Ashanti"s gold production that is exposed to the higher spot price
of gold and to improve the value of forward sales contracts in future years.
The second defining feature of the quarter is the continued underperformance
of the Ashanti assets, although a number of key indicators are improving and
these should lead to better production and lower costs.
Turning to operations, the gold price received, for the reasons referred to,
was 1% higher while gold production increased by 4%. Total cash costs
increased by $6/oz to $278/oz and total production costs increased by $14/oz
to $354/oz. Consequently, adjusted operating profit was virtually unchanged
at $97m.
The leading production gains were: Morila (53,000oz) following the resolution
of the plant expansion problems; Siguiri (20,000oz) which is recovering from
the embargo on gold exports; and Geita (42,000oz) which met its planned
increase in production. These increases in ounces were offset by a reduction
in production in South Africa (27,000oz), as well as at Bibiani (12,000oz) and
Iduapriem (13,000oz). The major reduction in South Africa came from TauTona
(13,000oz) while the other mines, with the exception of Kopanang and Tau
Lekoa, reported slight decreases.
Total cash costs increased by 2% from $272/oz to $278/oz, largely as a result
of the weakening of the dollar, which increased costs by $10/oz. Costs in
South Africa continued to be well controlled, decreasing by 2% in rand terms
to R59,541/kg, while the currency strengthened by 5%. At Morila, costs
declined substantially as a result of the higher production. In Australia,
however, total cash costs increased by A$43/oz ($49/oz) and in Ghana by $50/oz
as a result of lower grade at Obuasi and production problems at Bibiani and
Iduapriem.
Amortisation increased in line with production except at the former Ashanti
operations, where it has been adjusted by $5m after a review of the allocation
of the purchase price.
This quarter, there was an abnormal tax credit of $59m, primarily as a result
of a change to the estimated deferred tax rate. This credit had a
substantial, positive effect on adjusted headline earnings which from $43m to
$110m.
The unrealised loss on non-hedge derivatives, partially offset by the tax
gain, was the primary reason for a decline in net profit for the quarter to
$16m.
The AngloGold Ashanti board approved the $121m Cuiaba deepening project in
Brazil, which will increase production from that mine from 190,000oz per year
to 250,000oz per year within two years of the project"s completion. The
Cuiaba life of mine will be extended by six years and production over this
period will increase by 1.86Moz.
The company this week signed a new three year loan facility agreement for
$700m to replace the $600m facility that matures in February. The facility
will be used to repay the maturing facility and for general corporate
purposes. The new facility will reduce the group"s cost of borrowing, as the
borrowing margin over Libor will reduce from 70 basis points to 40 basis
points.
AngloGold Ashanti, both for the fourth quarter and the year, saw its best ever
safety performance. For the quarter, lost time injuries declined by 26% to
6.56 per million man hours (1.31 per 200,000 man hours), and for the year, the
number of fatal accidents and the rate of fatal accidents declined by 26% and
34%, respectively. Safety improved in all of the company"s operating regions
and an increasing number of mines are achieving significant periods of time
without a lost time injury: Iduapriem (16 months), Cripple Creek & Victor (13
months), Bibiani (9 months), Navachab (8 months), Sunrise Dam (6 months),
Yatela (4 months) and Geita (4 months).
For the year ended 31 December 2004, gold production was 8% higher at 6.05Moz,
attributable largely to the Ashanti merger, as well as to higher production at
Sunrise Dam and Cripple Creek & Victor. This increase was offset to some
degree by the disposal of Jerritt Canyon and the closure of Union Reefs, as
well as reduced production from all of the South African underground
operations.
Total cash costs, at $268/oz, were $54/oz higher than those of the previous
year, mainly due to stronger operating currencies and lower grades. Adjusted
headline earnings for the year decreased by 7% to $263m.
A dividend of 180 South African cents (30 US cents) per share has been
declared for the six months ended 31 December 2004. This has been based on
the adjusted headline earnings, which excludes unrealised non-hedge
derivatives.
Looking ahead, production for the first quarter is estimated to be 1.6Moz at
an average total cash cost of $280/oz, assuming the following exchange rates:
R/$6.05:1, A$/$0.77:1, BRL/$2.7:1 and Argentinean Peso/$3:1. Capital
expenditure for the quarter is estimated at $174m but will be managed in line
with profitability and cash generation.
For the year, production is estimated to be 6.5Moz at an average total cash
cost of $273/oz, assuming the following exchange rates: R/$6.20:1, A$/$0.77:1,
BRL/$2.8:1 and Argentinean Peso/$3:1. Capital expenditure for the year is
estimated at $701m.
Notes:
- All references to price received include the realised non-hedge derivatives.
- All references to adjusted operating profit refer to operating profit
excluding unrealised non-hedge derivatives.
- All references to adjusted headline earnings refer to headline earnings
excluding unrealised non-hedge derivatives and fair value gains on interest
rate swaps.
- In the case of joint venture operations, all production and financial
results are attributable to AngloGold Ashanti.
- Rounding of figures may result in computational discrepancies.
Review of the gold market
The return of investor interest to gold produced a sustained rise in the gold
price during the latter half of 2004. The gold price rose almost
uninterruptedly for three months to early December. The quarter produced a
high spot gold price of $457/oz the highest price seen in almost 17 years.
The price closed the quarter at $435/oz, up by 5% from the beginning of 2004.
The market has corrected further since the end of the year to a low of
$416/oz, but buying interest returned in January 2005 and the price rally of
the past three years still appears intact.
The average spot price of $434/oz for the last quarter of 2004 was $33/oz or
8% stronger than the average price for the previous quarter. However, the
rand strengthened against the dollar by some 13% during this period, and the
South African gold price hardly benefited from the higher dollar prices. The
average local price of R83,983/kg was only 2% higher than the rand price in
the previous quarter. The gold price in rands of R79,442/kg at the end of
2004 was over 10% or R9,000/kg lower than the local gold price at the
beginning of the year.
GOLD
The gold price driver for the quarter was definitively the weakening of the US
dollar, particularly against the euro, but also against the Japanese Yenen. The
weakening of the US currency has been the primary driver of the gold price
rise over the past three and a half years, and the correlation between the
rising US dollar spot price of gold and the weakening of the dollar against
the euro reached a remarkable 97% over a three month period to December 2004.
This does not mean that other factors will not have some effect on the gold
market and the price of gold from time to time. It does, however, underline
the primary influence of the health of the US currency on the gold price in
this current market cycle for gold.
In this respect, the gold market differs from the parallel cycle of rising
base metal and commodity prices. Unlike the industrial metals, the price of
gold is not a bet on Chinese demand, on which many commodity prices depend.
The gold price correlation with the US dollar is an important one for the year
ahead. With market commentators and analysts uniformly forecasting a weaker
US dollar at the end of 2005, these forecasts have translated to a forecast of
higher spot prices of gold as well. Any stabilisation or recovery in the US
currency would have the opposite effect on the gold price in the current
market.
Investment demand remains the vehicle through which this influence on the gold
price is exercised. During the past quarter, the role played by investors and
speculators in gold on the New York Comex was supplemented by the launch in
the USA of the gold exchange-traded fund, the streetTRACKS Gold Shares. The
fund was created by the World Gold Council in partnership with State Street
Global Markets. By early 2005, this fund had purchased on behalf of its
investors over 140t of physical gold in the market. This level of investment
is equal to over 25% of the net long position in gold on the New York Comex.
On the Comex itself, during the quarter the total open position in gold
reached a record high of over 56Moz, or 1,750t. The net long position
remained consistently strong (at around 20Moz) throughout the final quarter of
2004, although it failed to reach the record high levels seen in early April.
PHYSICAL DEMAND
The physical market for gold for the first half of 2004 showed some positive
adjustment, and some acceptance of higher gold prices. The upshot has been a
slight recovery in aggregate demand, and some slippage in supply, and a
physical market more in balance for that.
In the important area of demand for gold in jewellery, latest reports show
improved offtake in the Middle East (particularly in Turkey) and in South East
Asia (particularly in Vietnam), and sustained demand in India. Set against
this demand, the market has seen lower official sales of gold in 2004, due in
part to the process of renegotiation and extension of the Washington Agreement
for a further five years, and lower gold scrap sales, as the temptation of a
higher dollar spot price of gold has been dampened by the weakening of the US
currency and consequently generally lower local prices of gold in many
countries.
A further contribution to an improved supply/demand balance is likely to come
from improving gold offtake in jewellery in China, for the first time in
several years. This improvement has come with the completion in 2003 of the
deregulation of the gold jewellery market in China, and the subsequent
introduction by the World Gold Council of modern, 18 carat gold jewellery to
metropolitan markets in China. This new product is able to compete with
platinum jewellery on price, colour and design and it has been interesting to
see growing sales of this new product and a simultaneous fall in platinum
jewellery sales in the China mainland market during 2004.
CURRENCIES
The recovery in the US dollar which commenced early in the first quarter of
2004 lasted well into the third quarter of the year. For over six months, the
US currency traded most of the time between $1.20 and $1.25 to the euro, and
reached Yen115 during May 2004. The dollar"s strength during this time was a
product largely of purchases of US dollar instruments by monetary authorities
of China and Japan. As this Asian intervention ended, so did the recovery in
the US currency. The dollar"s devaluation resumed late in the third quarter,
and continued unbroken for four months, to close 2004 at almost $1.36 to the
euro, and Yen102. By the end of the year, the euro had gained 8% and the Yenen
5%
against the US dollar compared with their exchange rates at the beginning of
2004.
The cycle of dollar weakness continued as the market took the view that the
challenge of the US budget deficit was unlikely to be resolved and the US
currency would have to weaken in order to set in train the economic
corrections necessary to reduce the US deficits. This market view was
reinforced by the public announcement in mid-November by Alan Greenspan,
Chairman of the US Federal Reserve Bank, that the current account deficit of
the USA was unsustainable and the willingness of foreign investors to finance
that deficit through investments in the US currency was finite. After that
announcement, the US currency went on to touch a record low of over $1,37 to
the euro, and to lose ground also against the Japanese Yenen. With the weaker
dollar came a stronger gold price, and the behaviour of gold as a currency
trade against the US dollar was reinforced.
Since the end of 2004, the dollar has recovered somewhat against both the Euro
and the Yenen, this time without the support of US Treasury bonds by Japan and
China that triggered and sustained the dollar recovery during the first half
of 2004. Whilst this looks in part like profit-taking by the forex markets,
the dollar"s revival does raise the issue of an appropriate exchange rate for
the US currency, given the healthier economic growth rates projected for 2005
for the USA by comparison with the alternative economies of Japan and Europe.
For the moment, the dollar recovery remains intact. However, it is likely to
be only a matter of time before the economic reality of the massive US current
account deficit reasserts itself, and market sentiment again turns against the
US dollar.
Against this background, the turn in the US interest rate policy is likely to
be maintained into 2005. Five rate increases during the second half of 2004
have brought US rates up to 2.25%p.a. The rate increases have been
implemented steadily and with a degree of caution to avoid damaging US
economic growth. The balance is a delicate one, but the Federal Reserve seems
committed to further interest rate increases in 2005 as a means of improving
the ability of the US dollar to attract foreign investment flows to address
the deficits of the US economy.
Turning to the rand, the local currency has strengthened against the US dollar
by significantly more than the dollar has weakened against the euro and the
Yenen. At their peak in 2004, the European and Japanese currencies had
strengthened by 8% and 5% against the opening exchange rates against the US
dollar at the beginning of 2004. By comparison, the rand gained fully 17%
against the US dollar. The local currency also showed significantly higher
volatility during the year than did the two other currencies. The rand
benefited from strong commodity prices and from sustained investor interest in
the South African economy. In addition, sound economic policies in recent
years have translated to sustained growth in the country and to a further
upgrading of the country"s sovereign risk rating by international rating
agencies. Whilst the value of the rand remains vulnerable to a recovery in
the US dollar, or to specific event-driven reactions, it is otherwise likely
to sustain its strength against major currencies into 2005.
HEDGING
As at 31 December 2004, the net delta hedge position of AngloGold Ashanti was
10.49Moz or 326t, valued at the spot price of gold on that date of $435/oz.
This net delta position reflects a decrease of just under 2.2Moz or 69t in the
net size of the AngloGold Ashanti hedge compared with the position at the end
of the previous quarter. This decrease has been achieved by the restructuring
of the combined hedge position of AngloGold and Ashanti.
The marked-to-market value of the hedge position as at 31 December 2004 was
negative $1,161m, little changed from the negative value of $1,139m recorded
at the end of 30 September 2004, notwithstanding the fact that the spot gold
price of $435/oz, on which this value is based, was $16/oz higher than the
spot price at 30 September 2004. The company continues to manage its hedged
positions actively, and to reduce overall levels of pricing commitments in
respect of future gold production by the company.
Restructuring the AngloGold Ashanti Hedge Book
This company has an established practice of actively managing its hedged
commitments under changing market circumstances. This is reflected in the
reduction of the book from its high of 17.8Moz at 31 December 2000 to 7.01Moz
at 30 June 2004. At the level of 7.01Moz, the hedge had been reduced to cover
an average of 22% of the annual production from AngloGold assets over the next
five years. Following the merger with Ashanti, the combined hedge books
amounted to 12.7Moz at the end of last quarter, and the level of cover
increased to 40% of five years" production of the combined company.
The company has previously indicated its intention to continue with the
reduction in hedging levels. The argument for this reduction has been further
supported by the company"s positive view of the gold price in the current
market cycle. The company believes that the market circumstances favourable
for the gold price are likely to remain in place for some time, and that the
gold price will continue to trade in its current range, or higher.
A substantial restructuring of the hedge was commenced in late December 2004
and completed in January 2005. This has resulted in a reduction in the net
delta of the combined hedge by some 2.2Moz or 69t of gold, down to a net hedge
delta of 10.49Moz at 31 December 2004. The restructured hedge now represents
cover equal to 31% of five years" production spread over a ten-year period.
The reduction of 2.2Moz in this one quarter is of the same order of magnitude
as the substantial reduction achieved in hedge restructuring by AngloGold
through the second quarter of 2002.
Notwithstanding a spot price at 31 December 2004 that was $16/oz higher than
that at 30 September 2004, the marked-to-market valuation of the hedge book at
the end of the year is almost unchanged quarter-on-quarter at negative
$1,161m, compared with negative $1,139m at the end of the third quarter. By
comparison, the marked-to-market value of the now restructured book at the
same spot price of $418.80/oz at which the 30 September valuation was
undertaken, would result in a value of negative $922m, reflecting a positive
variance of $217m.
This improvement was achieved through a combination of the elimination from
the hedge of lower-priced contracts and the cash injection of $83m into the
book in the final quarter of 2004, followed by a further $76m in January 2005.
The level of cover for 2005 is at approximately 10% of projected production
for that year, while in 2006 it is at approximately 17% of projected
production.
In broad terms, the steps undertaken in the restructuring included:
- the effective buy-back of poorly-priced forward and call option contracts in
years 2005, 2006 and 2007 in order to remove the concentration of hedging in
these years following the incorporation of the Ashanti hedge book, and to
increase exposure to the spot price of gold in this period; and
- the sale of new forward and call options contracts in the years beyond 2007
at higher gold prices than had been the case in the previous hedge structure,
and spread more evenly than in the previous hedge structure.
Because of the nature of the current accounting treatment of derivative
contracts, much of the restructuring of the hedge has been effected by
overlaying the existing hedge commitments with new contracts in order to
achieve the effect of buying-back and replacing with new contracts at
different dates and rates. The cash earnings will reflect the significantly
greater exposure of the company to the spot price during 2005 and 2006 in
particular. Beyond these years, the significantly higher contracted prices in
the restructured forward positions will provide further benefit.
It is the intention of management to continue to actively manage the hedge
book. This includes delivering into contracts, continuing to reduce the size
of the book, and continuing to seek the maximum economic benefit from the
book.
As much of the impact of the restructuring as possible has been taken in the
fourth quarter of 2004. What remained to be concluded of the restructuring
after the year-end was the apportionment of the net long position against
existing short forward positions, and the rollout of the balance of the
longer-dated new forward and option positions that complete the restructuring.
The shortfall in the received price in relation to the average spot price for
the fourth quarter of 2004 was a consequence of both the bunching of Ashanti
hedge contracts at year-end and the restructuring of the hedge book, and a gap
of this magnitude, is not expected to recur in anticipated market conditions.
For the year ahead, it is the company"s intention to track the spot price more
closely than in this previous quarter, and to manage the hedge book actively
with the goal of moderating any negative impact on the price received of the
remaining lower-priced hedge positions in the year.
Hedge position at year end
As at 31 December 2004, the group had outstanding the following forward-pricing
commitments against future production. The total net delta tonnage of the hedge
of the company on this date was 10.49Moz or 326t (at 30 September 2004:
12.7Moz or 395.2t).
The marked-to-market value of all hedge transactions making up the hedge
positions was a negative $1.161bn (negative R6.583bn) as at 31 December 2004
(as at 30 September 2004: $1.139bn or R7.346bn). This value at 31 December 2004
was based on a gold price of $434.70/oz, exchange rates of R/$5.67 and
A$/$0.7745 and the prevailing market interest rates and volatilities at that
date.
As at 25 January 2005, the marked-to-market value of the hedge book was a
negative $993m (negative R5.869bn), based on a gold price of $426.35/oz and
exchange rates of R/$5.93 and A$/$0.7710 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 2005 2006 2007 2008
DOLLAR GOLD
Forward contracts Amount (kg) 34,021 30,428 35,481 29,111
$ per oz $315 $338 $343 $363
*Restructure longs Amount (kg) 17,676
$ per oz $440
Put options purchased Amount (kg) 3,381 5,481 1,455
$ per oz $347 $355 $292
Put options sold Amount (kg) 6,221 4,354 855
$ per oz $397 $339 $390
Call options purchased Amount (kg) 9,880 3,030 2,003
$ per oz $340 $353 $361
Call options sold Amount (kg) 29,490 18,017 20,375 26,179
$ per oz $363 $386 $372 $377
RAND GOLD
Forward contracts Amount (kg)
Rand per kg
Put options purchased Amount (kg) 1,875
Rand per kg R93,602
Put options sold Amount (kg) 8,025 1,400
Rand per kg R80,840 R88,414
Call options purchased Amount (kg)
Rand per kg
Call options sold Amount (kg) 12,657 4,517 311
Rand per kg R88,509 R102,447 R108,123
A DOLLAR GOLD
Forward contracts Amount (kg) 2,969 3,110 8,398 3,110
A$ per oz A$560 A$746 A$650 A$673
Put options purchased Amount (kg) 1,244
A$ per oz A$585
Put options sold Amount (kg) 2,644
A$ per oz A$565
Call options purchased Amount (kg) 3,110 6,221 3,732 3,110
A$ per oz A$724 A$673 A$668 A$680
Call options sold Amount (kg) 1,711
A$ per oz A$597
Delta (kg) 32,280 44,577 57,531 52,221
**Total net gold:
Delta (oz) 1,037,825 ,433,182 ,849,662 1,678,942
Year 2009 2010-2014 Total
DOLLAR GOLD
Forward contracts Amount (kg) 25,324 48,745 203,110
$ per oz $377 $395 $357
*Restructure longs Amount (kg) 17,676
$ per oz $440
Put options purchased Amount (kg) 10,317
$ per oz $344
Put options sold Amount (kg) 1,882 9,409 22,721
$ per oz $400 $430 $400
Call options purchased Amount (kg) 14,913
$ per oz $345
Call options sold Amount (kg) 22,852 57,604 174,517
$ per oz $399 $455 $403
RAND GOLD
Forward contracts Amount (kg) 933 933
Rand per kg R116,335 R116,335
Put options purchased Amount (kg) 1,875
Rand per kg R93,602
Put options sold Amount (kg) 9,425
Rand per kg R81,965
Call options purchased Amount (kg)
Rand per kg
Call options sold Amount (kg) 2,986 5,972 26,443
Rand per kg R202,054 R223,756 R134,486
A DOLLAR GOLD
Forward contracts Amount (kg) 3,390 3,110 24,087
A$ per oz A$667 A$692 A$662
Put options purchased Amount (kg) 1,244
A$ per oz A$585
Put options sold Amount (kg) 2,644
A$ per oz A$565
Call options purchased Amount (kg) 1,244 3,110 20,527
A$ per oz A$694 A$712 A$688
Call options sold Amount (kg) 1,711
A$ per oz A$597
Delta (kg) 47,107 92,492 326,208
**Total net gold:
Delta (oz) 1,514,523 2,973,683 10,487,817
* At 31 December 2004, the group was in the process of restructuring the hedge
book and had acquired a long spot position in gold.
This long gold position will be applied to the restructure during the
first quarter of 2005.
** The Delta of the hedge position indicated above, is the equivalent gold
position that would have the same marked-to-market sensitivity for a small
change in the gold price. This is calculated using the Black-Scholes option
formula with the ruling market prices, interest rates and volatilities as at 31
December 2004.
Year 2005 2006 2007
DOLLAR SILVER
Forward contracts Amount (kg)
$ per oz
Put options purchased Amount (kg) 43,545 43,545 43,545
$ per oz $7.11 $7.11 $7.40
Put options sold Amount (kg) 43,545 43,545 43,545
$ per oz $6.02 $6.02 $5.93
Call options purchased Amount (kg)
$ per oz
Call options sold Amount (kg) 43,545 43,545 43,545
$ per oz $8.11 $8.11 $8.40
Year 2008 2009 2010-2014 Total
DOLLAR SILVER
Forward contracts Amount (kg)
$ per oz
Put options purchased Amount (kg) 130,635
$ per oz $7.21
Put options sold Amount (kg) 130,635
$ per oz $5.99
Call options purchased Amount (kg)
$ per oz
Call options sold Amount (kg) 130,635
$ per oz $8.21
The following table indicates the group"s currency hedge position at
31 December 2004
Year 2005 2006 2007
RAND DOLLAR (000)
Forward contracts Amount ($) 130,509
Rand per $ R5.71
Put options purchased Amount ($)
Rand per $
Put options sold Amount ($)
Rand per $
Call options purchased Amount ($)
Rand per $
Call options sold Amount ($) 65,000
Rand per $ R5.72
A DOLLAR (000)
Forward contracts Amount ($) 55,237 39,222
$ per A$ A$0.59 A$0.75
Put options purchased Amount ($)
$ per A$
Put options sold Amount ($)
$ per A$
Call options purchased Amount ($)
$ per A$
Call options sold Amount ($) 20,000 20,000
$ per A$ A$0.76 A$0.74
BRAZILIAN REAL (000)
Forward contracts Amount ($)
$ per BRL
Put options purchased Amount ($) 600
$ per BRL BRL3.38
Put options sold Amount ($) 600
$ per BRL BRL3.21
Call options purchased Amount ($)
$ per BRL
Call options sold Amount ($) 600
$ per BRL BRL3.55
Year 2008 2009 2010-2014 Total
RAND DOLLAR (000)
Forward contracts Amount ($) 130,509
Rand per $ R5.71
Put options purchased Amount ($)
Rand per $
Put options sold Amount ($)
Rand per $
Call options purchased Amount ($)
Rand per $
Call options sold Amount ($) 65,000
Rand per $ R5.72
A DOLLAR (000)
Forward contracts Amount ($) 94,459
$ per A$ A$0.65
Put options purchased Amount ($)
$ per A$
Put options sold Amount ($)
$ per A$
Call options purchased Amount ($)
$ per A$
Call options sold Amount ($) 40,000
$ per A$ A$0.75
BRAZILIAN REAL (000)
Forward contracts Amount ($)
$ per BRL
Put options purchased Amount ($) 600
$ per BRL BRL3.38
Put options sold Amount ($) 600
$ per BRL BRL3.21
Call options purchased Amount ($)
$ per BRL
Call options sold Amount ($) 600
$ per BRL BRL3.55
Current hedge position
As at 25 January 2005, following further restructuring of the hedge book, the
group had outstanding, the following forward-pricing commitments against future
production. The total net delta of the hedge on this date was 10.49Moz or 326t
(at 31 December 2004: 10.49Moz or 326t).
The marked-to-market value of all hedge transactions making up the hedge
positions was a negative $993m (negative R5.869bn) as at 25 January 2005 (as at
31 December 2004: $1.161bn or R6.583bn).
This value was based on a gold price of $426.35/oz, exchange rates of R/$5.93
and A$/$0.7710 and the prevailing market interest rates and volatilities at 25
January 2005.
These marked-to-market valuations are in no way 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 2005 2006 2007 2008
DOLLAR GOLD
Forward contracts Amount (kg) 8,127 19,510 32,993 30,076
$ per oz $231 $336 $344 $365
Put options purchased Amount (kg) 9,135 8,592 1,455
$ per oz $334 $345 $292
Put options sold Amount (kg) 6,221 4,354 855
$ per oz $386 $339 $390
Call options purchasedAmount (kg) 15,001 3,435 2,003
$ per oz $338 $350 $361
Call options sold Amount (kg) 29,117 20,466 23,330 27,536
$ per oz $366 $392 $381 $380
RAND GOLD
Forward contracts Amount (kg)
Rand per kg
Put options purchased Amount (kg) 1,875
Rand per kg R93,602
Put options sold Amount (kg) 8,025 1,400
Rand per kg R81,457 R88,414
Call options purchasedAmount (kg)
Rand per kg
Call options sold Amount (kg) 12,657 4,517 311
Rand per kg R89,054 R102,447 R108,123
A DOLLAR GOLD
Forward contracts Amount (kg) 2,036 3,110 8,398 3,110
A$ per oz A$573 A$746 A$650 A$673
Put options purchased Amount (kg) 1,244
A$ per oz A$585
Put options sold Amount (kg) 3,110
A$ per oz A$553
Call options purchasedAmount (kg) 3,110 6,221 3,732 3,110
A$ per oz A$724 A$673 A$668 A$680
Call options sold Amount (kg) 3,110
A$ per oz A$577
Delta (kg) 22,017 34,937 56,920 54,089
*Total net gold:
Delta (oz) 707,8 1,123,249 1,830,018 1,738,999
Year 2009 2010-2014 Total
DOLLAR GOLD
Forward contracts Amount (kg) 26,288 53,566 170,560
$ per oz $380 $402 $365
Put options purchased Amount (kg) 19,182
$ per oz $336
Put options sold Amount (kg) 1,882 9,409 22,721
$ per oz $400 $430 $397
Call options purchasedAmount (kg) 20,439
$ per oz $342
Call options sold Amount (kg) 26,211 76,155 202,815
$ per oz $407 $468 $416
RAND GOLD
Forward contracts Amount (kg) 933 933
Rand per kg R116,335 $116,335
Put options purchased Amount (kg) 1,875
Rand per kg R93,602
Put options sold Amount (kg) 9,425
Rand per kg R82,491
Call options purchasedAmount (kg)
Rand per kg
Call options sold Amount (kg) 2,986 5,972 26,443
Rand per kg R202,054 R223,756 R134,747
A DOLLAR GOLD
Forward contracts Amount (kg) 3,390 3,110 23,154
A$ per oz A$667 A$692 A$667
Put options purchased Amount (kg) 1,244
A$ per oz A$585
Put options sold Amount (kg) 3,110
A$ per oz A$553
Call options purchasedAmount (kg) 1,244 3,110 20,527
A$ per oz A$694 A$712 A$688
Call options sold Amount (kg) 3,110
A$ per oz A$577
Delta (kg) 50,034 108,534 326,531
*Total net gold:
Delta (oz) 1,608,628 3,489,444 10,498,200
* The Delta of the hedge position indicated above, is the equivalent gold
position that would have the same marked-to-market sensitivity for a small
change in the gold price. This is calculated using the Black-Scholes option
formula with the ruling market prices, interest rates and volatilities as at 25
January 2005.
Exploration
In South Africa, assay results of surface borehole MMB4 drilled at Moab
Khotsong was completed during the quarter. This borehole returned encouraging
grades and confirmed the existing geological model, with an average grade of
32.46g/t over a channel width of 119.68cm for six deflections.
At Geita in Tanzania, diamond drilling of the Geita Hill down-dip extension
continued in order to optimise the open-pit and potential underground
interphase. Step-out drilling continued in the North East Extension area at
Geita Hill, tracing gold mineralisation along strike and down-dip to define
areas for infill drilling in 2005.
At Sadiola in Mali, an additional hole was drilled in the Hard Sulphide
Drilling Project, which verified the mineralisation previously encountered
100m below the exisitng Mineral Resource model. Satellite Mineral Resource
oxide modelling focused on FE3 South and drilling intersected mineralisation
300m further south. Infill drilling was completed over the western edge of
the FE4 pit.
At Yatela, four holes were drilled to investigate the sulphide potential below
the Alamoutala pit. Assay results received from the first two holes
intersected uneconomic mineralisation.
At Morila, drill intercepts at Samacline to the west of the pit remain
encouraging but deep. A regional target generation study within the lease
area identified several targets for follow-up drilling but no significant
mineralisation was intercepted.
At Obuasi in Ghana, underground exploration continues to focus on the below 50
Level Deeps project where results from drilling remain encouraging. The
tender has been awarded for the drilling of two 3,000m holes from surface in
the Deeps project. A further six holes are anticipated during the course of
this exploration project. Drilling of the West Lode sulphide orebody on the
32 Level project also yielded positive results.
At Bibiani North, drilling continued to focus on the delineation of additional
underground Mineral Resources with moderate results.
At Siguiri in Guinea, drilling for depth extensions in the Kami pit has
intersected narrow but relatively high grade zones. Mineral Resource
definition drilling continued south west of the Kozan pit and to the south of
the Kosise pit.
The start of the planned diamond drilling campaign at the Kimin project in
Democratic Republic of Congo is due to commence during January 2005.
In Namibia at Navachab, drilling at Anomaly 16, situated 5km from the current
pit, delineated an Inferred Mineral Resource of 5.4Mt at 1.03g/t for
178,000oz. Further drilling is required to test additional mineralisation
along strike and down-dip.
At Cripple Creek & Victor in the United States, efforts focused on evaluating
the metallurgical character of the Mineral Resource at the Wildhorse Extension
project, where results are pending. Mineral Resource expansion drilling
continued on this project with positive results. Drill testing of the Hoosier
Pass target, a sheeted vein system, continued with drill intersections of 1g/t
to 2g/t.
In Alaska, drilling at Livengood delineated a stratigraphically controlled,
shallow-dipping gold system, and further drilling is warranted. In the Pogo
district, the ER and Eagle projects will be farmed out in 2005, with
exploration focusing on three new targets identified during the 2004 regional
geochemical programme.
In Brazil, Mineral Resource definition drilling continued at Lamego. Drilling
confirmed multiple mineralised horizons at the southern extremity of the
CabeAa da Pedra fold hinge and the Carruagem exploration ramp advanced 227m
during the quarter to 242m.
At CACubedrrego do SA-tio, drilling at Carvoaria Velha-Bocaina (situated 2km
north-
east of Cachorro Bravo) confirmed the presence of multiple narrow, locally
high grade, mineralised sulphide horizons. Drilling at Bocaina at the
northern end of the property has extended the known oxide Mineral Resource to
the north and confirmed the down-plunge continuity of the sulphide
mineralisation. Ongoing underground drilling at Cachorro Bravo continues to
intersect high grade mineralisation within the 300 ore horizon.
Seven holes drilled to test the Biquinha target adjacent to the Cuiaba mine
failed to intersect significant mineralisation.
At Serra Grande, drilling concentrated on potential open-pit targets and
Mineral Resource modeling is in progress.
At Cerro Vanguardia, in Argentina, drilling at the Zorro, Gabriela and Liliana
veins highlighted continued upside in under-explored veins within the licence
area.
Diamond drilling was completed on one target in Peru, with further drilling
planned for early in 2005. A further three targets will be drill tested in
coming year. The Pichacani property in southern Peru was farmed out to Bear
Creek Mining in December.
In Colombia, target definition work continues and fieldwork is in progress.
At Sunrise Dam in Australia, drilling from surface and underground continued
to focus on the underground targets of Astro, Cosmo, GQ and Hammerhead. At
Neville, located 1km north of the underground portal, drilling intersected
narrow, high-grade mineralisation. At Lord Byron, located approximately 60km
east of Sunrise Dam, Reverse Circulation drilling targeted zones of higher-
grade mineralisation within the known mineralised area.
At Yamarna, diamond drilling tested priority targets in the southern portions
of the project area, intersecting extensive alteration with low gold values.
Aircore drilling in the northern portions defined a large geochemical anomaly
requiring further testing.
At Tropicana East, diamond drilling was undertaken to provide detailed
geological controls of the recently discovered gold mineralisation. Extensive
geochemical sampling along strike defined broad anomalous areas, which require
further infill sampling in order to define drill targets.
In the Northern Territory, AngloGold Ashanti and Newmont Australia have agreed
that AngloGold Ashanti will exit the Tanami Mine Joint Venture and the Central
Desert Joint Venture. The Tanami Mine Joint Venture includes the Tanami Mill
and associated infrastructure and tenements.
In December, an exploration alliance was established with Oxiana Resources,
targeting new mineralisation in Laos.
In Mongolia, two new targets were drill tested this quarter. Drill results
are awaited from the Tsagaan Tolgoi and Altan Uul projects.
In China, target generation and project reviews continue.
In Russia, AngloGold Ashanti continues to provide Trans-Siberian Gold with
geological input at both the Veduga and Asacha projects, where drilling is in
progress to increase the Mineral Resource.
Group income statement
Quarter Quarter
ended ended
December September
2004 2004
SA Rand million Notes Unaudited Unaudited
Gold income 4,174 4,171
Cost of sales 2 (3,610) (3,651)
564 520
Non-hedge derivatives (454) 82
Operating profit 110 602
Corporate administration and other
expenses (66) (84)
Market development costs (23) (30)
Exploration costs (77) (75)
Interest receivable 66 63
Other net (expense) income (28) 13
Finance costs (127) (129)
Fair value gains on interest rate
swaps 20 24
Abnormal items - -
(Loss) profit before exceptional items (125) 384
Amortisation of intangible assets (46) (48)
Impairment of tangible assets - (8)
Profit on disposal of assets and
subsidiaries 23 36
Profit on disposal of investments - -
(Loss) profit on ordinary activities
before taxation (148) 364
Taxation 3 307 (72)
Profit on ordinary activities after
taxation 159 292
Minority interest (23) (39)
Minority interest in abnormal items - -
Net profit 136 253
Adjusted operating profit
The operating profit has been
adjusted by the
following to arrive at adjusted
operating profit:
Operating profit 110 602
Unrealised non-hedge derivatives 476 29
Adjusted operating profit 586 631
Headline earnings
The net profit has been adjusted by
the following to
arrive at headline earnings:
Net profit 136 253
Amortisation of intangible assets 46 48
Impairment of tangible assets - 8
Profit on disposal of assets and
subsidiaries (23) (36)
Profit on disposal of investments - -
Current and deferred taxation on
exceptional items 3 6 1
Headline earnings 165 274
Unrealised non-hedge derivatives and
fair value
gains on interest rate swaps 456 5
Deferred tax on unrealised non-hedge
derivatives and fair
value gains on interest rate swaps 3 21 1
Adjusted headline earnings 642 280
Earnings per ordinary share (cents)
- Basic 51 96
- Diluted 51 96
- Headline 62 104
- Adjusted headline 243 106
Dividends
- Rm
- cents per share
Quarter Year Year
ended ended ended
December December December
2003 2004 2003
SA Rand million Unaudited Reviewed Audited
Gold income 3,685 15,348 15,264
Cost of sales (2,821) (12,933) (11,458)
864 2,415 3,806
Non-hedge derivatives 196 (786) 861
Operating profit 1,060 1,629 4,667
Corporate administration and other
expenses (60) (331) (273)
Market development costs (46) (100) (139)
Exploration costs (68) (283) (283)
Interest receivable 94 285 285
Other net (expense) income 7 (61) (123)
Finance costs (145) (512) (362)
Fair value gains on interest rate
swaps 32 10 38
Abnormal items (122) - (122)
(Loss) profit before exceptional items 752 637 3,688
Amortisation of intangible assets (52) (200) (221)
Impairment of tangible assets 20 (8) (327)
Profit on disposal of assets and
subsidiaries 19 88 75
Profit on disposal of investments 51 - 331
(Loss) profit on ordinary activities
before taxation 790 517 3,546
Taxation (142) 174 (1,080)
Profit on ordinary activities after
taxation 648 691 2,466
Minority interest (32) (124) (130)
Minority interest in abnormal items (5) - (5)
Net profit 611 567 2,331
Adjusted operating profit
The operating profit has been
adjusted by the
following to arrive at adjusted
operating profit:
Operating profit 1,060 1,629 4,667
Unrealised non-hedge derivatives (134) 1,173 (438)
Adjusted operating profit 926 2,802 4,229
Headline earnings
The net profit has been adjusted by
the following to
arrive at headline earnings:
Net profit 611 567 2,331
Amortisation of intangible assets 52 200 221
Impairment of tangible assets (20) 8 327
Profit on disposal of assets and
subsidiaries (19) (88) (75)
Profit on disposal of investments (51) - (331)
Current and deferred taxation on
exceptional items 12 16 (94)
Headline earnings 585 703 2,379
Unrealised non-hedge derivatives and
fair value
gains on interest rate swaps (166) 1,163 (476)
Deferred tax on unrealised non-hedge
derivatives and fair
value gains on interest rate swaps 87 (222) 230
Adjusted headline earnings 506 1,644 2,133
Earnings per ordinary share (cents)
- Basic 274 226 1,046
- Diluted 273 225 1,042
- Headline 263 280 1,068
- Adjusted headline 227 654 957
Dividends
- Rm 926 1,584
- cents per share 350 710
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 only an indicative amount.
Group income statement
Quarter Quarter
ended ended
December September
2004 2004
US Dollar million Notes Unaudited Unaudited
Gold income 692 653
Cost of sales 2 (599) (572)
93 81
Non-hedge derivatives (91) 16
Operating profit 2 97
Corporate administration and other
expenses (11) (13)
Market development costs (4) (5)
Exploration costs (13) (12)
Interest receivable 11 10
Other net (expense) income (4) 2
Finance costs (21) (20)
Fair value gains on interest rate
swaps 3 3
Abnormal items - -
(Loss) profit before exceptional items (37) 62
Amortisation of intangible assets (7) (7)
Impairment of tangible assets - (1)
Profit on disposal of assets and
subsidiaries 4 5
Profit on disposal of investments - -
(Loss) profit on ordinary activities
before taxation (40) 59
Taxation 3 60 (13)
Profit on ordinary activities after
taxation 20 46
Minority interest (4) (6)
Minority interest in abnormal items - -
Net profit 16 40
Adjusted operating profit
The operating profit has been
adjusted by the following to
arrive at adjusted operating profit:
Operating profit 2 97
Unrealised non-hedge derivatives 95 1
Adjusted operating profit 97 98
Headline earnings
The net profit has been adjusted by
the following to arrive
at headline earnings:
Net profit 16 40
Amortisation of intangible assets 7 7
Impairment of tangible assets - 1
Profit on disposal of assets and
subsidiaries (4) (5)
Profit on disposal of investments - -
Current and deferred taxation on
exceptional items 3 1 1
Headline earnings 20 44
Unrealised non-hedge derivatives and
fair value
gains on interest rate swaps 92 (2)
Deferred tax on unrealised non-hedge
derivatives and fair value
gains on interest rate swaps 3 (2) 1
Adjusted headline earnings 110 43
Earnings per ordinary share (cents)
- Basic 6 15
- Diluted 6 15
- Headline 8 17
- Adjusted headline 42 16
Dividends
- $m
- cents per share
Quarter Year Year
ended ended ended
December December December
2003 2004 2003
US Dollar million Unaudited Reviewed Audited
Gold income 547 2,396 2,029
Cost of sales (419) (2,022) (1,526)
128 374 503
Non-hedge derivatives 31 (142) 119
Operating profit 159 232 622
Corporate administration and other
expenses (9) (51) (36)
Market development costs (7) (15) (19)
Exploration costs (10) (44) (38)
Interest receivable 14 44 38
Other net (expense) income 1 (10) (15)
Finance costs (21) (79) (49)
Fair value gains on interest rate
swaps 5 2 6
Abnormal items (19) - (19)
(Loss) profit before exceptional items 113 79 490
Amortisation of intangible assets (8) (31) (29)
Impairment of tangible assets 2 (1) (44)
Profit on disposal of assets and
subsidiaries 3 13 10
Profit on disposal of investments 8 - 45
(Loss) profit on ordinary activities
before taxation 118 60 472
Taxation (20) 40 (142)
Profit on ordinary activities after
taxation 98 100 330
Minority interest (4) (19) (17)
Minority interest in abnormal items (1) - (1)
Net profit 93 81 312
Adjusted operating profit
The operating profit has been
adjusted by the following to
arrive at adjusted operating profit:
Operating profit 159 232 622
Unrealised non-hedge derivatives (22) 202 (63)
Adjusted operating profit 137 434 559
Headline earnings
The net profit has been adjusted by
the following to arrive
at headline earnings:
Net profit 93 81 312
Amortisation of intangible assets 8 31 29
Impairment of tangible assets (2) 1 44
Profit on disposal of assets and
subsidiaries (3) (13) (10)
Profit on disposal of investments (8) - (45)
Current and deferred taxation on
exceptional items 1 2 (12)
Headline earnings 89 102 318
Unrealised non-hedge derivatives and
fair value
gains on interest rate swaps (27) 200 (69)
Deferred tax on unrealised non-hedge
derivatives and fair value
gains on interest rate swaps 13 (39) 33
Adjusted headline earnings 75 263 282
Earnings per ordinary share (cents)
- Basic 42 32 140
- Diluted 42 32 139
- Headline 40 41 143
- Adjusted headline 34 105 127
Dividends
- $m 148 224
- cents per share 56 101
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 only an indicative amount.
Group balance sheet
As at As at As at
December September December
2004 2004 2003
SA Rand million Reviewed Unaudited Audited
ASSETS
Non-current assets
Tangible assets 33,188 35,450 18,427
Intangible assets 2,354 2,636 2,749
Investments in associates 43 42 47
Other investments 259 239 81
Inventories(1) 124 142 47
Derivatives 1,055 796 630
Other non-current assets 521 493 1,000
37,544 39,798 22,981
Current assets
Inventories 2,363 2,531 2,003
Trade and other receivables 1,853 1,790 1,461
Derivatives 2,767 1,984 2,515
Current portion of other non-current
assets 5 390 59
Cash and cash equivalents 1,758 2,846 3,367
8,746 9,541 9,405
TOTAL ASSETS 46,290 49,339 32,386
EQUITY AND LIABILITIES
Equity
Shareholders" equity 18,228 19,781 10,852
Minority interests 327 397 354
18,555 20,178 11,206
Non-current liabilities
Borrowings 7,262 8,360 5,383
Provisions 2,267 2,162 1,832
Derivatives 2,716 2,854 2,194
Deferred taxation 7,611 8,463 3,986
19,856 21,839 13,395
Current liabilities
Trade and other payables 2,665 2,841 2,339
Current portion of borrowings 1,800 2,078 2,340
Derivatives 3,052 2,273 2,942
Taxation 362 130 164
7,879 7,322 7,785
46,290 49,339 32,386
TOTAL EQUITY AND LIABILITIES
The results have been prepared in
accordance with International Financial
Reporting Standards (IFRS).
(1) Relates to heap leach operations.
Net asset value - cents per share 6,892 7,480 4,863
Group balance sheet
As at As at As at
December September December
2004 2004 2003
US Dollar million Reviewed Unaudited Audited
ASSETS
Non-current assets
Tangible assets 5,879 5,474 2,764
Intangible assets 417 407 412
Investments in associates 8 7 7
Other investments 46 37 12
(1)
Inventories 22 22 7
Derivatives 187 123 94
Other non-current assets 92 76 151
6,651 6,146 3,447
Current assets
Inventories 419 391 300
Trade and other receivables 328 276 219
Derivatives 490 306 377
Current portion of other non-current
assets 1 60 9
Cash and cash equivalents 312 440 505
1,550 1,473 1,410
TOTAL ASSETS 8,201 7,619 4,857
EQUITY AND LIABILITIES
Equity
Shareholders" equity 3,229 3,055 1,628
Minority interests 58 61 53
3,287 3,116 1,681
Non-current liabilities
Borrowings 1,286 1,291 807
Provisions 402 334 275
Derivatives 481 440 329
Deferred taxation 1,349 1,307 598
3,518 3,372 2,009
Current liabilities
Trade and other payables 472 439 350
Current portion of borrowings 319 321 351
Derivatives 541 351 441
Taxation 64 20 25
1,396 1,131 1,167
8,201 7,619 4,857
TOTAL EQUITY AND LIABILITIES
The results have been prepared in
accordance with International Financial
Reporting Standards (IFRS).
(1) Relates to heap leach operations.
Net asset value - cents per share 1,221 1,155 730
Group cash flow statement
Quarter Quarter Quarter
ended ended ended
December September December
2004 2004 2003
SA Rand million Unaudited Unaudited Unaudited
Cash flows from operating activities
Cash generated from operations 879 1,344 901
Interest received 50 53 84
Environmental and other expenditure (80) (38) (108)
Dividends received from associates - - -
Finance costs (23) (189) (80)
Recoupment tax received: Free State
assets - - -
Recoupment tax paid: Free State assets - - -
Taxation paid (25) (32) (101)
Net cash inflow from operating
activities 801 1,138 696
Cash flows from investing activities
Capital expenditure (1,181) (1,004) (1,057)
Proceeds from disposal of tangible
assets 20 14 19
Investments acquired (26) (98) (5)
Proceeds from disposal of investments - - 72
(Acquisition) disposal of subsidiary
net of cash (40) (260) 58
Net loans repaid (advanced) 399 50 (115)
Utilised in hedge restructure (475) - -
Net cash outflow from investing
activities (1,303) (1,298) (1,028)
Cash flows from financing activities
Proceeds from issue of share capital 6 4 22
Share issue expenses - - -
Proceeds from borrowings 90 271 347
Repayment of borrowings (477) (319) (460)
Dividends paid (52) (453) (35)
Net cash inflow (outflow) from
financing activities (433) (497) (126)
Net (decrease) increase in cash and
cash equivalents (935) (657) (458)
Translation (153) 45 60
Opening cash and cash equivalents 2,846 3,458 3,765
Closing cash and cash equivalents 1,758 2,846 3,367
Cash generated from operations
(Loss) profit on ordinary activities
before taxation (148) 364 790
Adjusted for:
Non-cash movements 84 (43) 24
Movement on non-hedge derivatives 422 45 (98)
Amortisation of tangible assets 726 660 455
Deferred stripping costs 17 (15) (88)
Interest receivable (66) (63) (94)
Finance costs 127 129 145
Abnormal items - - 122
Amortisation of intangible assets 46 48 52
Impairment of tangible assets - 8 (20)
Profit on disposal of investments - - (51)
Profit on disposal of assets and
subsidiaries (23) (36) (19)
Movement in working capital (306) 247 (317)
879 1,344 901
Movement in working capital
Decrease (increase) in inventories 122 (162) (219)
(Increase) decrease in trade and
other receivables (37) 273 (135)
(Decrease) increase in trade and
other payables (391) 136 37
(306) 247 (317)
Year Year
ended ended
December December
2004 2003
SA Rand million Reviewed Audited
Cash flows from operating activities
Cash generated from operations 3,505 4,527
Interest received 236 245
Environmental and other expenditure (148) (232)
Dividends received from associates - 9
Finance costs (465) (291)
Recoupment tax received: Free State assets - 681
Recoupment tax paid: Free State assets - (681)
Taxation paid (218) (780)
Net cash inflow from operating activities 2,910 3,478
Cash flows from investing activities
Capital expenditure (3,764) (2,744)
Proceeds from disposal of tangible assets 69 38
Investments acquired (127) (8)
Proceeds from disposal of investments - 423
(Acquisition) disposal of subsidiary net of cash (1,139) 66
Net loans repaid (advanced) 526 (104)
Utilised in hedge restructure (475) -
Net cash outflow from investing activities (4,910) (2,329)
Cash flows from financing activities
Proceeds from issue of share capital 22 63
Share issue expenses (1) (2)
Proceeds from borrowings 7,236 2,678
Repayment of borrowings (5,348) (1,241)
Dividends paid (1,322) (2,476)
Net cash inflow (outflow) from financing activities 587 (978)
Net (decrease) increase in cash and cash equivalents (1,413) 171
Translation (196) (348)
Opening cash and cash equivalents 3,367 3,544
Closing cash and cash equivalents 1,758 3,367
Cash generated from operations
(Loss) profit on ordinary activities before taxation 517 3,546
Adjusted for:
Non-cash movements 22 159
Movement on non-hedge derivatives 1,081 (449)
Amortisation of tangible assets 2,431 1,739
Deferred stripping costs (112) (325)
Interest receivable (285) (285)
Finance costs 512 362
Abnormal items - 122
Amortisation of intangible assets 200 221
Impairment of tangible assets 8 327
Profit on disposal of investments - (331)
Profit on disposal of assets and subsidiaries (88) (75)
Movement in working capital (781) (484)
3,505 4,527
Movement in working capital
Decrease (increase) in inventories (1) (165)
(Increase) decrease in trade and other receivables 11 57
(Decrease) increase in trade and other payables (791) (376)
(781) (484)
The results have been prepared in accordance with International
Financial Reporting Standards (IFRS).
Group cash flow statement
Quarter Quarter Quarter
ended ended ended
December September December
2004 2004 2003
US Dollar million Unaudited Unaudited Unaudited
Cash flows from operating activities
Cash generated from operations 168 196 136
Interest received 9 8 13
Environmental and other expenditure (14) (5) (15)
Dividends received from associates - - -
Finance costs (5) (29) (13)
Recoupment tax received: Free State
assets - - -
Recoupment tax paid: Free State assets - - -
Taxation paid (5) (5) (20)
Net cash inflow from operating
activities 153 165 101
Cash flows from investing activities
Capital expenditure (192) (156) (148)
Proceeds from disposal of tangible
assets 3 2 3
Investments acquired (5) (15) (1)
Proceeds from disposal of investments - - 11
(Acquisition) disposal of subsidiary
net of cash (6) (39) 9
Net loans repaid (advanced) 64 8 (15)
Utilised in hedge restructure (83) - -
Net cash outflow from investing
activities (219) (200) (141)
Cash flows from financing activities
Proceeds from issue of share capital - 1 4
Share issue expenses - - -
Proceeds from borrowings 16 42 48
Repayment of borrowings (82) (51) (65)
Dividends paid (8) (68) (5)
Net cash (outflow) inflow from
financing activities (74) (76) (18)
Net (decrease) increase in cash and
cash equivalents (140) (111) (58)
Translation 12 (4) 21
Opening cash and cash equivalents 440 555 542
Closing cash and cash equivalents 312 440 505
Cash generated from operations
(Loss) profit on ordinary activities
before taxation (40) 59 118
Adjusted for:
Non-cash movements 11 (9) 4
Movement on non-hedge derivatives 83 5 (17)
Amortisation of tangible assets 121 104 68
Deferred stripping costs 3 (2) (13)
Interest receivable (11) (10) (14)
Finance costs 21 20 21
Abnormal items - - 19
Amortisation of intangible assets 7 7 8
Impairment of tangible assets - 1 (2)
Profit on disposal of investments - - (8)
Profit on disposal of assets and
subsidiaries (4) (5) (3)
Movement in working capital (23) 26 (45)
168 196 136
Movement in working capital
Increase in inventories (27) (13) (44)
(Increase) decrease in trade and
other receivables (39) 53 (28)
Increase (decrease) in trade and
other payables 43 (14) 27
(23) 26 (45)
Year Year
ended ended
December December
2004 2003
US Dollar million Reviewed Audited
Cash flows from operating activities
Cash generated from operations 585 592
Interest received 37 33
Environmental and other expenditure (24) (31)
Dividends received from associates - 1
Finance costs (72) (40)
Recoupment tax received: Free State assets - 91
Recoupment tax paid: Free State assets - (91)
Taxation paid (34) (102)
Net cash inflow from operating activities 492 453
Cash flows from investing activities
Capital expenditure (585) (363)
Proceeds from disposal of tangible assets 10 6
Investments acquired (20) (1)
Proceeds from disposal of investments - 56
(Acquisition) disposal of subsidiary net of cash (171) 10
Net loans repaid (advanced) 83 (15)
Utilised in hedge restructure (83) -
Net cash outflow from investing activities (766) (307)
Cash flows from financing activities
Proceeds from issue of share capital 3 10
Share issue expenses - -
Proceeds from borrowings 1,077 362
Repayment of borrowings (818) (165)
Dividends paid (198) (314)
Net cash (outflow) inflow from financing activities 64 (107)
Net (decrease) increase in cash and cash equivalents (210) 39
Translation 17 53
Opening cash and cash equivalents 505 413
Closing cash and cash equivalents 312 505
Cash generated from operations
(Loss) profit on ordinary activities before taxation 60 472
Adjusted for:
Non-cash movements 6 19
Movement on non-hedge derivatives 185 (65)
Amortisation of tangible assets 381 232
Deferred stripping costs (16) (43)
Interest receivable (44) (38)
Finance costs 79 49
Abnormal items - 19
Amortisation of intangible assets 31 29
Impairment of tangible assets 1 44
Profit on disposal of investments - (45)
Profit on disposal of assets and subsidiaries (13) (10)
Movement in working capital (85) (71)
585 592
Movement in working capital
Increase in inventories (56) (87)
(Increase) decrease in trade and other receivables (38) (53)
Increase (decrease) in trade and other payables 9 69
(85) (71)
The results have been prepared in accordance with International
Financial Reporting Standards (IFRS).
Statement of changes in equity
Attributable equity holders of the group
Ordinary Equity Non -
share portion of distribu-
capital and convertible table
premium bond reserves
SA Rand million
Balance at December 2002 9,607 - 138
Net profit
Dividends paid
Ordinary shares issued 61
Net loss on cash flow hedges
removed from equity and reported
in income
Net loss on cash flow hedges
Deferred taxation on cash flow
hedges
Net gain on available-for-sale
financial assets
Net gain on available-for-sale
financial assets removed from
equity
and reported in net income
Net gain on repayment of net
investment
At acquisition of subsidiaries
Translation
Balance at December 2003 9,668 - 138
Balance at December 2003 9,668 - 138
Net profit
Dividends paid
Ordinary shares issued 9,319
Issue of convertible bond 542
Net loss on cash flow hedges
removed from equity and reported
in income
Net gain (loss) on cash flow
hedges
Deferred taxation on cash flow
hedges
Net gain on available-for-sale
financial assets
At acquisition of subsidiaries
Translation (78)
Balance at December 2004 18,987 464 138
Attributable equity holders of the group
Foreign Other
currency compre-
translation hensive Retained
reserve income earnings
SA Rand million
Balance at December 2002 360 (1,583) 3,853
Net profit 2,331
Dividends paid (2,336)
Ordinary shares issued
Net loss on cash flow hedges
removed from equity and reported in
income 375
Net loss on cash flow hedges (956)
Deferred taxation on cash flow
hedges (38)
Net gain on available-for-sale
financial assets 114
Net gain on available-for-sale
financial assets removed from equity
and reported in net income (174)
Net gain on repayment of net
investment 3
At acquisition of subsidiaries
Translation (1,118) 215
Balance at December 2003 (755) (2,047) 3,848
Balance at December 2003 (755) (2,047) 3,848
Net profit 567
Dividends paid (1,197)
Ordinary shares issued
Issue of convertible bond
Net loss on cash flow hedges
removed from equity and reported in
income 864
Net gain (loss) on cash flow hedges 245
Deferred taxation on cash flow
hedges (291)
Net gain on available-for-sale
financial assets 6
At acquisition of subsidiaries
Translation (2,784) 183
Balance at December 2004 (3,539) (1,040) 3,218
Attributable equity holders of the group
Total
share-
holders" Minority
equity interests Equity
SA Rand million
Balance at December 2002 12,375 347 12,722
Net profit 2,331 135 2,466
Dividends paid (2,336) (140) (2,476)
Ordinary shares issued 61 61
Net loss on cash flow hedges
removed from equity and reported in
income 375 5 380
Net loss on cash flow hedges (956) (18) (974)
Deferred taxation on cash flow
hedges (38) (38)
Net gain on available-for-sale
financial assets 114 114
Net gain on available-for-sale
financial assets removed from equity
and reported in net income (174) (174)
Net gain on repayment of net
investment 3 3
At acquisition of subsidiaries - 103 103
Translation (903) (78) (981)
Balance at December 2003 10,852 354 11,206
Balance at December 2003 10,852 354 11,206
Net profit 567 124 691
Dividends paid (1,197) (125) (1,322)
Ordinary shares issued 9,319 9,319
Issue of convertible bond 542 542
Net loss on cash flow hedges
removed from equity and reported in
income 864 3 867
Net gain (loss) on cash flow hedges 245 (3) 242
Deferred taxation on cash flow hedges
(291) (291)
Net gain on available-for-sale
financial assets 6 6
At acquisition of subsidiaries - 18 18
Translation (2,679) (44) (2,723)
Balance at December 2004 18,228 327 18,555
The results have been prepared in accordance with International
Financial Reporting Standards (IFRS).
Statement of changes in equity
Attributable equity holders of the group
Ordinary Equity Non -
share portion of distribu-
capital and convertible table
premium bond reserves
US Dollar million
Balance at December 2002 1,120 - 16
Net profit
Dividends paid
Ordinary shares issued 10
Net loss on cash flow hedges
removed from equity and reported
in income
Net loss on cash flow hedges
Deferred taxation on cash flow
hedges
Net gain on available-for-sale
financial assets
Net gain on available-for-sale
financial assets removed from
equity
and reported in income
Net gain on repayment of net
investment
At acquisition of subsidiaries
Translation 320 5
Balance at December 2003 1,450 - 21
Balance at December 2003 1,450 - 21
Net profit
Dividends paid
Ordinary shares issued 1,369
Issue of convertible bond 82
Net loss on cash flow hedges
removed from equity and reported
in income
Net gain on cash flow hedges
Deferred taxation on cash flow
hedges
Net gain on available-for-sale
financial assets
At acquisition of subsidiaries
Translation 545 3
Balance at December 2004 3,364 82 24
Foreign Other
currency compre-
translation hensive Retained
reserve income earnings
US Dollar million
Balance at December 2002 43 (185) 449
Net profit 312
Dividends paid (296)
Ordinary shares issued
Net loss on cash flow hedges
removed from equity and reported in
income 47
Net loss on cash flow hedges (142)
Deferred taxation on cash flow hedges
7
Net gain on available-for-sale
financial assets 15
Net gain on available-for-sale
financial assets removed from equity
and reported in income (22)
Net gain on repayment of net
investment
At acquisition of subsidiaries
Translation (156) (27) 112
Balance at December 2003 (113) (307) 577
Balance at December 2003 (113) (307) 577
Net profit 81
Dividends paid (179)
Ordinary shares issued
Issue of convertible bond
Net loss on cash flow hedges
removed from equity and reported in
income 137
Net gain on cash flow hedges 44
Deferred taxation on cash flow hedges
(43)
Net gain on available-for-sale
financial assets 3
At acquisition of subsidiaries
Translation (514) (18) 91
Balance at December 2004 (627) (184) 570
Total
share-
holders" Minority
equity interests Equity
US Dollar million
Balance at December 2002 1,443 40 1,483
Net profit 312 18 330
Dividends paid (296) (18) (314)
Ordinary shares issued 10 10
Net loss on cash flow hedges
removed from equity and reported in
income 47 1 48
Net loss on cash flow hedges (142) (2) (144)
Deferred taxation on cash flow hedges
7 7
Net gain on available-for-sale
financial assets 15 15
Net gain on available-for-sale
financial assets removed from equity
and reported in income (22) (22)
Net gain on repayment of net
investment - -
At acquisition of subsidiaries - 13 13
Translation 254 1 255
Balance at December 2003 1,628 53 1,681
Balance at December 2003 1,628 53 1,681
Net profit 81 19 100
Dividends paid (179) (19) (198)
Ordinary shares issued 1,369 1,369
Issue of convertible bond 82 82
Net loss on cash flow hedges
removed from equity and reported in
income 137 137
Net gain on cash flow hedges 44 44
Deferred taxation on cash flow hedges
(43) (43)
Net gain on available-for-sale
financial assets 3 3
At acquisition of subsidiaries - 3 3
Translation 107 2 109
Balance at December 2004 3,229 58 3,287
The results have been prepared in accordance with International Financial
Reporting Standards (IFRS).
Notes
for the quarter and year ended 31 December 2004
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 financial statements of AngloGold Ashanti have been prepared in accordance
with International Financial Reporting Standards (IAS34), South African
Generally Accepted Accounting Practices (AC127), 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
group for the quarter and year ended 31 December 2004.
Where the preparation 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 Year ended
Dec Sept Dec Dec
2004 2004 2004 2003
Unaudited Unaudited Reviewed Audited
SA Rand million
Cash operating costs 2,778 2,762 10,127 9,473
Other cash costs 109 97 345 255
Total cash costs 2,887 2,859 10,472 9,728
Retrenchment costs 16 12 60 27
Rehabilitation & other
non-cash costs 63 50 196 97
Production costs 2,966 2,921 10,728 9,852
Amortisation of tangible
assets 726 660 2,431 1,739
Total production costs 3,692 3,581 13,159 11,591
Inventory change (82) 70 (226) (133)
3,610 3,651 12,933 11,458
Quarter ended Year ended
Dec Sept Dec Dec
2004 2004 2004 2003
Unaudited Unaudited Reviewed Audited
US Dollar million
Cash operating costs 460 434 1,581 1,260
Other cash costs 18 15 54 34
Total cash costs 478 449 1,635 1,294
Retrenchment costs 3 2 9 4
Rehabilitation & other
non-cash costs 10 7 32 13
Production costs 491 458 1,676 1,311
Amortisation of tangible
assets 121 104 381 232
Total production costs 612 562 2,057 1,543
Inventory change (13) 10 (35) (17)
599 572 2,022 1,526
3. Taxation
Quarter ended Year ended
Dec Sept Dec Dec
2004 2004 2004 2003
Unaudited Unaudited Reviewed Audited
SA Rand million
Normal and deferred
taxation (4) (70) (370) (1,123)
Change in estimates 338 - 338 -
Deferred tax on unrealised
non-hedge
derivatives and fair value
gains on
interest rate swaps (21) (1) 222 (230)
Taxation on abnormal items - - - 179
Taxation on exceptional
items (6) (1) (16) 94
307 (72) 174 (1,080)
Quarter ended Year ended
Dec Sept Dec Dec
2004 2004 2004 2003
Unaudited Unaudited Reviewed Audited
US Dollar million
Normal and deferred
taxation - (11) (56) (148)
Change in estimates 59 - 59 -
Deferred tax on unrealised
non-hedge
derivatives and fair value
gains on
interest rate swaps 2 (1) 39 (33)
Taxation on abnormal items - - - 27
Taxation on exceptional
items (1) (1) (2) 12
60 (13) 40 (142)
4. Capital commitments
Dec Sept Dec
2004 2004 2003
SA Rand million
Orders placed and outstanding on capital
contracts at the prevailing rate of exchange 494 1,005 650
Dec Sept Dec
2004 2004 2003
US Dollar million
Orders placed and outstanding on capital
contracts at the prevailing rate of exchange 87 155 98
5. Shares
Quarter ended
Dec 2004 Sept 2004 Dec 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 5,000,000 5,000,000 5,000,000
Issued share capital:
Ordinary shares 264,462,894 264,439,294 223,136,342
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 264,451,226 264,412,359 222,836,574
Diluted number of ordinary
shares 265,085,959 279,796,974 223,717,575
Year ended
Dec 2004 Dec 2003
Authorised share capital:
Ordinary shares of 25 SA cents
each 400,000,000 400,000,000
A redeemable preference shares
of 50 SA cents each 2,000,000 2,000,000
B redeemable preference shares
of 1 SA cent each 5,000,000 5,000,000
Issued share capital:
Ordinary shares 264,462,894 223,136,342
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 251,352,552 222,836,574
Diluted number of ordinary
shares 252,048,301 223,717,575
During the quarter, 23,600 ordinary shares were allotted in terms of the
AngloGold Share Incentive Scheme. All the preference shares are held by a
wholly-owned subsidiary company.
6. Exchange rates
Dec 2004 Sept 2004 Dec 2003
Rand/US dollar average for the period 6.44 6.57 7.55
Rand/US dollar average for the quarter 6.05 6.37 6.74
Rand/US dollar closing 5.65 6.48 6.67
Rand/Australian dollar average for the
period 4.82 4.80 4.90
Rand/Australian dollar average for the
quarter 4.58 4.52 4.82
Rand/Australian dollar closing 4.42 4.69 5.02
7. Contingent liabilities
AngloGold Ashanti acts as ultimate guarantor in respect of sureties provided to
bankers and other parties by its subsidiaries in respect of certain loans and
commitments. At 31 December 2004, the contingent liability is approximately
$71m. Discussions are underway in respect of the class action being brought
against the former Ashanti Goldfields and it is anticipated that the final
outcome of this claim will have no material effect on the company.
8. 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 Ashanti USA Inc., is repaid.
9. Acquisition of Ashanti assets
The transaction was accounted for as a purchase business combination during the
second quarter of 2004. AngloGold Ashanti has performed a preliminary purchase
price allocation based on independent appraisals. The purchase price allocation
is in the final stage of completion and is not expected to vary significantly
from the preliminary allocation.
10. Announcements
10.1 On 13 December 2004, AngloGold Ashanti announced that it had entered into
an exploration alliance with Oxiana Limited, to explore for gold in Laos.
Laos is highly prospective for both gold and copper, but is
under-explored. Projects generated will be owned jointly by AngloGold
Ashanti and Oxiana, with AngloGold Ashanti having an option to earn an
additional 10% equity in any project generated, by either sole funding the
first $10m of expenditure where a project is still to be drilled, or sole
funding through to completion of a bankable feasibility study where a
significant drill intersection has already been made.
10.2 On 23 December 2004, AngloGold Ashanti announced that the deadline to
subscribe for the second tranche of new ordinary shares in Trans-Siberian
Gold plc had been extended from 31 December 2004, to 15 April 2005. The
extension has been agreed because the condition in the subscription
agreement relating to the financing of Trans-Siberian"s Asacha project
would not be satisfied by 31 December 2004.
11. Dividend
The directors have today declared Final Dividend No. 97 of 180 (Final Dividend
No. 95: 335) South African cents per ordinary share for the year ended 31
December 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.
2005
Currency conversion date for UK pounds, Australian
dollars and Ghanaian cedis Thursday, 3 February
Last date to trade ordinary shares cum dividend Friday, 11 February
Last date to register transfers of certificated
securities cum dividend Friday, 11 February
Ordinary shares trade ex dividend Monday, 14 February
Record date Friday, 18 February
Payment date Friday, 25 February
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, 14 February
2005 and Friday, 18 February 2005, 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.
2005
Ex dividend on New York Stock Exchange Wednesday, 16 February
Record date Friday, 18 February
Approximate date for currency conversion Friday, 25 February
Approximate payment date of dividend Monday, 7 March
Assuming an exchange rate of R5.9435/$1, the dividend payable on an ADS is
equivalent to 30 US cents. This compares with the interim dividend of 25.62 US
cents per ADS paid on 7 September 2004. 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.
2005
Last date to trade and to register GhDSs cum dividend Friday, 11 February
GhDSs trade ex dividend Monday, 14 February
Record date Friday, 18 February
Approximate payment date of dividend Monday, 28 February
Assuming an exchange rate of R1/c1,499 the dividend payable per GhDS is
equivalent to 26.98 cedis.
This compares with the interim dividend of 24.848 cedis per GhDS paid on 30
August 2004.
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%.
12. The group financial statements for the quarter and year ended 31 December
2004 were authorised for issue in accordance with a resolution of the
directors passed on 26 January 2005. AngloGold Ashanti is a limited
liability company incorporated in the Republic of South Africa.
13. AngloGold Ashanti"s borrowings are interest bearing. AngloGold Ashanti
issued a $1bn convertible bond in February 2004. The bond matures on 27
February 2009. The net effect of the issue of the convertible bond on basic
earnings and adjusted headline earnings is 43 South African cents or 7 US
cents per ordinary share for the year. The calculation is based on a
weighted average number of ordinary shares in the amount of 251,352,552.
14. The results have been reviewed by AngloGold Ashanti"s auditors, Ernst &
Young, Registered Accountants and Auditors, Chartered Accountants (SA), and
their unmodified review opinion is available for inspection at AngloGold
Ashanti"s registered office in South Africa.
15. 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
26 January 2005
Shareholders" notice board
Diary:
Financial year-end 31 December 2004
Annual financial statements posting on or about 15 March 2005
Annual general meeting 11:00 SA time 29 April 2005
Quarterly reports released:
Quarter ended 31 March 2005 29 April 2005
Quarter ended 30 June 2005 29 July 2005
Quarter ended 30 September 2005 27 October 2005
Quarter ended 31 December 2005 31 January 2006
Dividends / Last date to trade
Dividend Number Declared ordinary shares
cum dividend
Final A- No. 97 26 January 2005 11 February 2005
Interim A- No. 98 28 July 2005* 12 August 2005*
Final A- No. 99 30 January 2006* 17 February 2006*
Payment date to Payment date to
shareholders ADS holders
25 February 2005 7 March 2005*
26 August 2005* 5 September 2005*
3 March 2006* 13 March 2006*
* Approximate dates.
Dividend policy: Dividends are proposed by, and approved by the board of
directors of AngloGold Ashanti, based on the interim and year-end financial
statements. Dividends are recognised when declared by the board of directors of
AngloGold Ashanti. AngloGold Ashanti expects to continue to pay dividends,
although there can be no assurance that dividends will be paid in the future or
as to the particular amounts that will be paid from year to year. The payments
of future dividends will depend upon the Board"s ongoing assessment of
AngloGold Ashanti"s earnings, financial condition, including its cash needs,
future earnings prospects and other factors.
Annual financial statements: AngloGold Ashanti"s 2004 Annual Report is
scheduled to be posted to shareholders on or about 15 March 2005 and in the
interests of improving communications to shareholders, they may elect, in lieu
of receiving a printed document, to receive an annual report electronically, or
on CD. In accordance with the Listings Requirements of the JSE however,
shareholders are required to provide the company with a signed mandate of such
election. To this end, the necessary mandate has been enclosed for completion
and return as addressed.
Annual general meeting: In line with AngloGold Ashanti"s commitment to improve
its communications to shareholders, AngloGold Ashanti is in the process of
investigating the possibility of implementing a procedure to enable
shareholders to cast their votes electronically. Further information will be
included in the notice of the general meeting to be sent to shareholders on or
about 15 March 2005.
Share certificates: It is nine months since AngloGold and Ashanti merged. If
there are any former Ashanti shareholders who have not yet received their
AngloGold Ashanti share certificates, kindly advise the nearest share
registrar, details of which are on the back cover of this document. For those
shareholders who have not yet surrendered the share certificates of the
companies who participated in the formation of AngloGold for AngloGold Ashanti
share certificates, kindly contact your nearest share registrar for assistance.
Change of details: Shareholders are reminded that the onus is on them to keep
the company, through its nominated share registrars, apprised of any change in
their postal address and personal particulars. Similarly, where shareholders
receive dividend payments electronically (EFT), they should ensure that the
banking details which the share registrars and/or CSDPs have on file are
correct.
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
Ghana
Gold House
Patrice Lumumba Road
(P O Box 2665)
Accra
Ghana
Telephone: +233 21 772190
Fax: +233 21 775947
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: 0861 100 724 (in SA)
web.queries@computershare.co.za
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. Telephone: +1-888-BNY-
ADRS
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 w ill 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: 27/01/2005 08:01:26 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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