Wrap Text
ANG - Anglogold Ashanti - Report to shareholders for the quarter ended 31 March
2008 Group results for the quarter
ANGLOGOLD ASHANTI LIMITED
Registration No. 1944/017354/06
Incorporated in the Republic of South Africa
Share codes:
ISIN: ZAE000043485
JSE: ANG
LSE: AGD
NYSE: AU
ASX: AGG
GhSE (Shares): AGA
GhSE (GhDS): AAD
Euronext Paris: VA
Euronext Brussels: ANG
Report to shareholders for the quarter ended 31 March 2008
Group results for the quarter
- Adjusted headline earnings at $105m, up significantly on the prior quarter`s
$18m.
- Production at 1.2Moz, 9% higher than guidance provided in February 2008.
- Total cash costs at $430/oz, significantly below guidance, but 6% higher than
previous quarter following reduced production.
- Net delta hedge reduced by 1.13Moz to 9.26Moz.
- Marked improvement in safety performance, with fatality injury frequency rate
down 80% since launch of safety campaign in November 2007.
- Greenfields project yields resources of 12.9Moz from 100% owned La Colosa
project in Colombia, with additional upside.
- Offer to purchase minority interest in CC&V initiated, royalties sold for
$13.75m and equity position in B2Gold taken to accelerate certain Colombian
greenfields projects.
- Production outlook increased for the year following higher allocation of
power and own energy initiatives, which will see South African operations
moving towards full capacity.
Quarter
ended ended
Mar Dec
2008 2007
SA rand / Metric
Operating review
Gold
Produced - kg / oz (000) 37,210 42,556
Price received 1 - R/kg / $/oz 183,945 149,312
Total cash costs - R/kg / $/oz 104,461 87,744
Total production costs - R/kg / $/oz 136,200 122,344
Financial review
Gross (loss) profit - Rm / $m (3,359) (2,354)
Gross (loss) profit adjusted
for the loss on unrealised
non-hedge derivatives and
other commodity contracts 2 - Rm / $m 2,095 1,309
(Loss) profit attributable to
equity shareholders - Rm / $m (3,812) (3,199)
Headline (loss) earnings 3 - Rm / $m (3,880) (3,095)
Headline earnings adjusted for
the loss on unrealised non-hedge
derivatives, other commodity
contracts and fair value
adjustments on
convertible bond 4 - Rm / $m 813 117
Capital expenditure - Rm / $m 1,930 2,315
(Loss) profit per
ordinary share - cents/share
Basic (1,351) (1,136)
Diluted (1,351) (1,136)
Headline 3 (1,376) (1,099)
Headline earnings adjusted for
the loss on unrealised non-hedge
derivatives and other commodity
contracts and fair value
adjustments on
convertible bond 4 - cents/share 288 42
Dividends - cents/share
Year
ended ended
Mar Dec
2007 2007
SA rand / Metric
Operating review
Gold
Produced - kg / oz (000) 41,239 170,365
Price received 1 - R/kg / $/oz 139,953 142,107
Total cash costs - R/kg / $/oz 76,991 80,490
Total production costs - R/kg / $/oz 99,905 107,415
Financial review
Gross (loss) profit - Rm / $m 778 (524)
Gross (loss) profit adjusted for the
loss on unrealised non-hedge
derivatives and other commodity
contracts 2 - Rm / $m 1,832 6,590
(Loss) profit attributable to equity
shareholders - Rm / $m (150) (4,269)
Headline (loss) earnings 3 - Rm / $m (135) (4,136)
Headline earnings adjusted for the
loss on unrealised non-hedge
derivatives, other commodity contracts
and fair value adjustments on
convertible bond 4 - Rm / $m 702 1,971
Capital expenditure - Rm / $ m 1,417 7,444
(Loss) profit per ordinary share - cents/share
Basic (53) (1,516)
Diluted (53) (1,516)
Headline 3 (48) (1,470)
Headline earnings adjusted for the
loss on unrealised non-hedge
derivatives and other commodity
contracts and fair value adjustments
on convertible bond 4 - cents/share 250 700
Dividends - cents/share 143
Quarter
ended ended
Mar Dec
2008 2007
US dollar / Imperial
Operating review
Gold
Produced - kg / oz (000) 1,196 1,368
Price received 1 - R/kg / $/oz 755 687
Total cash costs - R/kg / $/oz 430 404
Total production costs - R/kg / $/oz 561 563
Financial review
Gross (loss) profit - Rm / $ m (77) (355)
Gross (loss) profit adjusted for the
loss on unrealised non-hedge
derivatives and other commodity
contracts 2 - Rm / $ m 274 195
(Loss) profit attributable to equity
shareholders - Rm / $ m (142) (482)
Headline (loss) earnings 3 - Rm / $ m (151) (466)
Headline earnings adjusted for the loss on
unrealised non- hedge derivatives, other
commodity contracts and fair value adjustments
on convertible bond 4 - Rm / $m 105 18
Capital expenditure - Rm / $ m 257 339
(Loss) profit per ordinary share - cents/share
Basic (50) (171)
Diluted (50) (171)
Headline 3 (54) (165)
Headline earnings adjusted for the loss on
unrealised non- hedge derivatives and other
commodity contracts and fair value adjustments
on convertible bond 4 - cents/share 37 6
Dividends - cents/share
Year
ended ended
Mar Dec
2007 2007
US dollar / Imperial
Operating review
Gold
Produced - kg / oz (000) 1,326 5,477
Price received 1 - R/kg / $/oz 602 629
Total cash costs - R/kg / $/oz 332 357
Total production costs - R/kg / $/oz 430 476
Financial review
Gross (loss) profit - Rm / $ m 147 (136)
Gross (loss) profit adjusted for the loss on
unrealised non- hedge derivatives and other
commodity contracts 2 - Rm / $ m 253 935
(Loss) profit attributable to equity
shareholders - Rm / $ m 19 (668)
Headline (loss) earnings 3 - Rm / $ m 21 (648)
Headline earnings adjusted for the loss on
unrealised non- hedge derivatives, other
commodity contracts and fair value adjustments
on convertible bond 4 - Rm / $m 97 278
Capital expenditure - Rm / $ m 196 1,059
(Loss) profit per ordinary share - cents/share
Basic 7 (237)
Diluted 7 (237)
Headline 3 7 (230)
Headline earnings adjusted for the loss on
unrealised non- hedge derivatives and other
commodity contracts and fair value adjustments
on convertible bond 4 - cents/share 34 99
Dividends - cents/share 19
Notes: 1. Refer to note D Non-GAAP disclosure for the definition.
2. Refer to note B on Non-GAAP disclosure for the definition.
3. Refer to note 8 of Notes for the definition.
4. Refer to note A of Non-GAAP disclosure.
$ represents US dollar, unless otherwise stated.
Rounding of figures may result in computational discrepancies .
Operations at a glance
for the quarter ended 31 March 2008
Production Total cash costs
% %
oz (000) Variance 3 $/oz Variance 3
Mponeng 132 (3) 253 (17)
Sunrise Dam 119 (21) 455 31
AngloGold Ashanti Brasil
Mineracao 72 (21) 316 26
Great Noligwa 107 (8) 400 (26)
Kopanang 90 (13) 353 7
Cripple Creek & Victor J.V. 58 (35) 284 3
Siguiri 4 93 12 436 (1)
TauTona 74 (24) 386 8
Obuasi 87 4 517 6
Sadiola4 36 (10) 405 (3)
Iduapriem 47 4 452 9
Morila 4 40 (23) 409 17
Cerro Vanguardia 4 28 (45) 553 78
Serra Grande 4 21 - 290 (1)
Tau Lekoa 35 (13) 529 3
Savuka 14 (18) 367 (13)
Yatela 4 17 (23) 522 (5)
Navachab 15 (25) 490 (7)
Moab Khotsong 25 9 578 (17)
Geita 64 10 717 (1)
Other 22 (27)
AngloGold Ashanti 1,196 (13) 430 6
Gross (loss) profit
adjusted for the loss
on unrealised non-
Cash gross profit 1 hedge derivatives
and other
commodity
contracts 2
% %
$m Variance 3 $m Variance 3
Mponeng 63 21 52 33
Sunrise Dam 35 (26) 23 (32)
AngloGold Ashanti Brasil
Mineracao 35 (5) 25 (4)
Great Noligwa 35 119 26 420
Kopanang 34 (6) 19 (30)
Cripple Creek & Victor J.V. 29 (19) 22 (21)
Siguiri 4 27 93 21 425
TauTona 26 (19) 17 42
Obuasi 19 258 2 109
Sadiola4 16 100 11 57
Iduapriem 15 200 10 400
Morila 4 14 (30) 11 (31)
Cerro Vanguardia 4 11 (21) 7 (13)
Serra Grande 4 9 - 7 -
Tau Lekoa 8 14 3 200
Savuka 5 - 3 (25)
Yatela 4 4 100 4 300
Navachab 4 - 3 -
Moab Khotsong 4 167 1 105
Geita 1 113 (13) 19
Other 24 (41) 18 (45)
AngloGold Ashanti 419 17 274 41
1 Refer to note F Non-GAAP disclosure for the definition.
2 Refer to note B of Non-GAAP disclosure for the definition.
3 Variance March 2008 quarter on December 2007 quarter - increase (decrease).
4 Attributable.
Rounding of figures may result in computational discrepancies.
Financial and operating review
OVERVIEW FOR THE QUARTER
Following the successful launch of the company`s "Safety is our first value"
campaign during the fourth quarter of 2007, the early indications of an
improved safety performance are encouraging.
For the quarter, a lost time injury frequency rate of 7.60 per million hours
worked was achieved, which marks an improvement against a rate of 8.08 in the
prior quarter and 8.24 for the 2007 year. In respect of medical treatment
injury rates, a 12% improvement has been noted against the 2007 rate of 27.85.
The fatal injury frequency rate for the quarter was 0.13 per million hours
worked, against a rate of 0.21 per million hours for the previous quarter. This
rate compares favourably against the rate of 0.36 recorded for the first
quarter of 2007, and is 37% lower than any previous first quarter result in the
history of the company, and 80% lower since the introduction of the safety
campaign.
Leading safety indicators at the South African operations show ed an
improvement, with four of the seven operations recording improved accident
rates. Elsewhere in Africa, Navachab, Yatela, Iduapriem, Siguiri and Geita
were all injury free. Iduapriem achieved a further milestone with five million
shifts recorded without a lost time injury at the end of March 2008.
During the quarter, regrettably five employees lost their lives , with three
accidents recorded at the South African operations and one each at Obuasi in
Ghana and Serra Grande in Brazil. This tragic loss of life underscores the
ongoing need for safety to remain the key focus for every manager and employee
in the company.
Gold production for the quarter reduced by 13% to 1.2Moz, mainly as a result of
the power shortage and year-end holiday breaks at the South African operations;
together with planned lower production from Sunrise Dam as mining grades
normalised following the completion of mining in the high grade zone during
2007; a t CC&V where production declined as a result of higher stacking levels,
and at Cerro Vanguardia where lower feed grades and problems with agitators
resulted in reduced production. Total cash costs at $430/oz, was 6% higher than
the previous quarter, which was primarily impacted by the reduced production
and inflation, partially mitigated by weaker local currencies and a n improved
by - products contribution.
Gold production and cost performance, did however, show a n improvement on
guidance provided at the end of the fourth quarter, following excellent work
undertaken in the South African operations to mitigate the negative impact of
the Eskom power situation.
Adjusted headline earnings for the quarter were $10 5m, compared with $18m in
the previous quarter which was distorted due to annual accounting adjustments.
Higher received gold prices and a tax credit following reduction in tax rates
in South Africa also contributed to the increase in earnings.
Despite a higher gold price, the total net delta hedge reduced by 1. 13Moz to
9. 26Moz at 31 March 2008, and total commitments reduced from 11. 28Moz to
10.03 Moz. The reductions were due to delivery into maturing contracts and
additional hedge buy-backs that were effected during the quarter.
In addition to a total of 6.95Moz attributable (9.1Moz on a 100% basis) of JORC
Inferred and Indicated Resources declared by AngloGold Ashanti on 31 December
2007, a further 12.9Moz of new Inferred Resources has been defined at AngloGold
Ashanti`s 100% owned La Colosa project in Colombia.
Based upon present drilling and geochemical observations, the La Colosa mineral
systems including the La Belgica sector, remains open to the north and south,
and three additional targets immediately surround the known La Colosa
mineralisation. A conceptual study is planned to be completed in the second
quarter of 2008.
This is the first significant gold porphyry discovery in the Colombian Andes,
where AngloGold Ashanti has a first mover advantage with a land position of
some 37,500km 2 , with significant potential to increase the resource at La
Colosa and at other projects in Colombia.
On 14 January 2008, AngloGold Ashanti announced that it had agreed to acquire
100% of Golden Cycle Gold Corporation (GCGC) through a transaction in which
GCGC`s shareholders will receive 29 AngloGold Ashanti ADRs for every 100 shares
of GCGC common stock held. GCGC holds a 33% shareholding in CC&V, while
AngloGold Ashanti holds the remaining 67%. This transaction is subject to a
number of regulatory and statutory approvals, including approval by GCGC
shareholders.
On 14 February 2008, AngloGold Ashanti entered into a binding memorandum of
agreement with B2Gold, whereby B2Gold will acquire from AngloGold Ashanti,
certain mineral properties in Colombia. In exchange, B2Gold will issue to
AngloGold Ashanti, 25m common shares and
21.4m common share purchase warrants.
AngloGold Ashanti would then hold approximately 15.9% of B2Gold`s issued and
outstanding shares and fully diluted interest in B2Gold upon the exercise of
the 21.4m warrants, would be approximately 26%.
In late February 2008, certain North American royalty and production related
payment interests of the El Chanate and Marigold projects were sold to Royal
Gold for $13.75m.
With regard to the power management in South Africa, Eskom, the national
provider, increased power supply to 96.5% from 90% in late March
2008.
Subject to the power stability and availability at 96.5% level, production for
2008 is expected to increase to a range of 4.9Moz to 5. 1Moz for the company.
This compares favourably to prior guidance of 4.8Moz to 5.0Moz. Given
inflationary trends currently being experienced, total cash costs are
anticipated to be between $4 40/oz and $46 0/oz, based on the following average
exchange rate assumptions: R/ $7.88, A$/$0.91, BRL/ $1.71 and Argentinean peso/
$ 3.16. Capital expenditure for the year is estimated at $1,262m, and will be
managed in line with profitability and cash flow.
Production for the second quarter of 2008, based on 96.5% stabilised power, is
estimated to be 1.22Moz at an average total cash cost of $46 4/oz, assuming the
following average exchange rates: R/ $7.80, A$/$0.91, BRL/ $1.71 and
Argentinean peso/ $ 3.16. Capital expenditure is estimated at $328m.
Review of the gold market
The first quarter of 2008 was characterised by a volatile gold price, with a
trading range of close to $200/oz. While the market in mid March was
exceptionally strong, with the price reaching a record high of $1031/oz , the
price also traded as low as $833/oz during the quarter.
The average US dollar gold price for the quarter was $92 5/oz, 1 7% higher than
the previous quarter`s average price of $7 8 8/oz.
A weaker Rand/US dollar exchange rate saw the rand gold price reaching highs of
some R27 1,6 22/ kg. In rand terms, the gold price averaged R22 4,308/kg for
the quarter, some 3 1% higher than the previous quarter`s average of
R171,334/kg.
JEWELLERY DEMAND
Jewellery demand slowed as a result of the high price volatility experienced
during the quarter, particularly in the key markets of India and the Middle
East. It is anticipated that jewellery demand for the quarter will show a
decline on a year- on - year basis, but it must be noted that comparisons made
against the first quarter of 2007 may be misleading as demand during that
period was exceptionally strong and reached record levels in some markets.
In the Gulf markets, where local currencies are pegged against the US dollar,
the full effect of the US dollar gold price volatility was felt and this led to
a downturn in demand of approximately 20% year- on -year. Inflationary concerns
in these markets acted as a further restraint on consumer confidence. In Dubai,
where demand from the tourist trade balances local demand, the effects of poor
local consumption were not felt as severely as in Saudi Arabia, where demand is
primarily local.
High value, branded segments of the market were less seriously affected than
trade in high caratage, low value-added jewellery items.
The Egyptian and Turkish markets held ground in the first two months of the
year, however both markets slowed in March 2008, with the Turkish market in
particular showing a significant fall in consumption when compared to the same
quarter in the previous year. This was due to low levels of re-stocking prior
to the main summer tourist season and the political crisis in March which
caused the Turkish lira to decline against the US dollar, thus driving up the
price of gold in local currency terms still further.
The Chinese market performed strongly despite the more volatile price
environment , with jewellery demand increasing by some 9% year-on-year and
investment demand by an estimated 63%. Chinese consumers perceive gold as an
investment vehicle which can provide a hedge against the inflationary
pressures which are increasingly being felt in that economy. The absence of
viable investment alternatives also helped the case for local gold investment.
US demand continued the declining trend from the fourth quarter of 2007,
particularly in the lower price segments of the market. Higher gold price
levels are causing retailers to reduce the quantity of gold used in jewellery
items in order to maintain price points.
CENTRAL BANK SALES
Sales under the Central Bank Gold Agreement totalled 70t during the quarter.
The bulk of these sales were accounted for by the French and Swiss Central
Banks with smaller sales by Sweden and the Netherlands.
IMF sales , though still subject to US congressional approval, look likely to
take place over the longer term and will most probably be effected through the
existing Central Bank Gold Agreement , without significant disruption to the
market.
INVESTMENT MARKET
The fourth quarter was an active period in the investment sector. Investment
markets in China and the Middle East were strong at the retail level, with
consumers in both markets moving strongly towards gold investment.
Investment in Exchange Traded Funds (ETFs) continued to grow for the fourth
consecutive year. Total ETF holdings at quarter end stood at 29.7Moz, with a
total value of over $27.2bn.
The majority of inflows during the quarter were accounted for by the New York
Stock Exchange listed StreetTracks Gold Shares product.
A new ETF was announced in the Middle East, and is expected to be listed and
finalised by June this year. The ETF is backed by the Dubai Government and is
Sharia compliant.
PRODUCER HEDGING
The size of the global hedge book as at the end of 2007 was confirmed late in
February at 26.8 million ounces. Since then, Newcrest have announced a further
reduction in their hedge book by some 300,000oz.
During the quarter, AngloGold Ashanti reduced its hedge commitments from
11.28Moz to 10. 0 3Moz, through deliveries into maturing contracts and hedge
buy-backs.
CURRENCIES
The US dollar continued to fall against the Euro, reaching a new low of
Euro/US$ 1.59 in March 2008. Overall, the US dollar depreciated 8% during the
quarter from its opening value of Euro/$ 1.46.
Post quarter end, the US Dollar continued to be under pressure at an exchange
of Euro/US$1.60. This weakness is primarily due to growing fears of an economic
recession in the United States which is consistent with the Federal Reserve`s
actions during the quarter, by cutting its target rate by 2%.
Oil prices have continued to trade stronger, moving through the psychological
barrier of $100/barrel and reaching a high of $110/barrel during the quarter.
This move did not help sentiment towards the US dollar, contributing as it did
to fears of surging inflation in a falling interest rate environment.
The South African Rand suffered its poorest quarterly performance in some time,
losing 19% from its opening of R/$6.84 to close at R/$8.09.A number of factors
have contributed to this weakness, most notably the uncertainty of power
generation and supply, and the effect it will have on economic growth. In
addition, the extent of the current account deficit within this environment has
added to the negative outlook for the Rand.
The Australian dollar and Brazilian real both traded to multi-year highs of A$/
$0.95 and US$/BRL1.66, respectively, in a quarter where both currencies
continued their pattern of steady appreciation.
Hedge position
As at 31 March 2008, the net delta hedge position was 9.25Moz or 288t (at 31
December 2007: 10.39M o z or 323t). Despite a higher gold price, the delta of
the hedge book was reduced by 1.13Moz t o 9.26Moz , and total commitments
reduced from 11.28Moz to 10.03Moz , as delivery into maturing contracts and
hedge buy -backs that were effected during the quarter.
The marked-to-market value of all hedge transactions making up the hedge
positions was a negative $4. 7 8bn (negative R 38.77bn), of which $2.73 bn
(R22.10bn) is on balance sheet as at 31 March 2008 (at 3 1 December 2007 the
hedge position was negative $4.27 bn or R29.10bn). This value was based on a
gold price of $917.40/oz, exchange rates of R8.10/$ and A$/$0.91 and the
prevailing market interest rates and volatilities at that date. The increase in
the negative marked-to- market value was primarily due to the higher spot gold
price.
For the quarter, the company`s received price of $7 5 5/oz, was 18% lower than
the average spot price of $ 925/oz for 2008, the gap in the received and spot
prices is likely to be between 20% to 2 2% going forward, provided that gold
trades in a price range of approximately $9 0 0/oz and $9 5 0/oz.
As at 30 April 2008, the marked-to-market value of the hedge book was a
negative $4.32bn (negative R32.91bn), based on a gold price of $874.20/oz and
exchange rates of R7.62/$ and A$/$0.93 and the prevailing market interest rates
and volatilities at the time.
These marked-to-market valuations are in no way predictive of the future value
of the hedge position, nor of future impact on the revenue of the company. The
valuation represents the theoretical cost of buying all hedge contracts at the
time of valuation, at market prices and rates available at that time.
Year 2008 2009 2010
DOLLAR GOLD
Forward
contracts Amount (kg) 17,113 21,738 14,462
US$/oz $309 $316 $347
Restructure
Longs Amount (kg) *20,254
US$/oz $846
Put options sold Amount (kg) 17,531 3,748 1,882
US$/oz $810 $530 $410
Call options
purchased Amount (kg) 7,048
US$/oz $428
Call options
sold Amount (kg) 4 1,435 45,950 36,804
US$/oz $506 $498 $492
RAND GOLD
Forward
contracts Amount (kg) (467) 933
Rand per kg R161,159 R116,335
Call options
sold Amount (kg) 2,986 2,986
Rand per kg R2 02,054 R216,522
A DOLLAR GOLD
Forward
contracts Amount (kg) 10,886 3,390 3,110
A$ per oz A$858 A$644 A$685
Put options
sold Amount (kg) 6,532
A$ per oz A$972
Call options
purchased Amount (kg) 3,110 1,244 3,110
A$ per oz A$680 A$694 A$712
Call options
sold Amount (kg) 1,555
A$ per oz A$948
Delta (kg) (3 0 ,267) (71,812) (52,226)
** Total net
gold:
Delta (oz) (973,105) (2,308,806) (1,679,102)
Year 2011 2012 2013-201 6
DOLLAR GOLD
Forward
contracts Amount (kg) 12,931 11,944 12,364
US$/oz $397 $404 $432
Restructure
Longs Amount (kg)
US$/oz
Put options
sold Amount (kg) 1,882 1,882 3,764
US$/oz $420 $430 $445
Call options
purchased Amount (kg)
US$/oz
Call options
sold Amount (kg) 39,385 24,460 39,924
US$/oz $ 517 $ 622 $ 604
RAND GOLD
Forward
contracts Amount (kg)
Rand per kg
Call options
sold Amount (kg) 2,986
Rand per kg R230,990
A DOLLAR GOLD
Forward
contracts Amount (kg)
A$ per oz
Put options
sold Amount (kg)
A$ per oz
Call options
purchased Amount (kg)
A$ per oz
Call options
sold Amount (kg)
A$ per oz
Delta (kg) (5 2 ,040) (33,363) (47,877)
** Total net
gold:
Delta (oz) (1,673 ,122) (1,072 ,644) (1,539,279)
Year Total
DOLLAR GOLD
Forward contracts Amount (kg) 90,552
US$/oz $359
Restructure Longs Amount (kg) *20,254
US$/oz $846
Put options sold Amount (kg) 30,689
US$/oz $ 6 59
Call options purchased Amount (kg) 7,048
US$/oz $428
Call options sold Amount (kg) 227,958
US$/oz $534
RAND GOLD
Forward contracts Amount (kg) 466
Rand per kg R131,276
Call options sold Amount (kg) 8,958
Rand per kg R216,522
A DOLLAR GOLD
Forward contracts Amount (kg) 17,386
A$ per oz A$785
Put options sold Amount (kg) 6,532
A$ per oz A$972
Call options purchased Amount (kg) 7,464
A$ per oz A$696
Call options sold Amount (kg) 1,555
A$ per oz A$948
Delta (kg) (287,585)
** Total net gold:
Delta (oz) (9,246,058)
* Indicates a long position resulting from forward purchase contracts.
The group enters into forward purchase contracts as part of its strategy to
actively manage and reduce the size of the hedge book.
** The Delta of the hedge position indicated above is the equivalent
gold position that would have the same marked-t o -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 3 1 March 2008.
Rounding of figures may result in computational discrepancies.
Year 2008 2009 2010 2011
DOLLAR SILVER
Put options purchased Amount (kg) 32,659
$ per oz $7.66
Put options sold Amount (kg) 32,659
$ per oz $6.19
Call options sold Amount (kg) 32,659
$ per oz $8.64
Year 2012 2013-201 6 Total
DOLLAR SILVER
Put options purchased Amount (kg) 32,659
$ per oz $7.66
Put options sold Amount (kg) 32,659
$ per oz $6.19
Call options sold Amount (kg) 32,659
$ per oz $8.64
The following table indicates the group`s currency hedge position at 31 March
2008
Year 2008 2009 2010 2011
RAND DOLLAR (000)
Forward contracts Amount ($) 10,000
US$/R R7.01
Put options purchased Amount ($) 50,000
US$/R R7.31
Put options sold Amount ($) 50,000
US$/R R6.89
Call options sold Amount ($) 50,000
US$/R R7.96
A DOLLAR (000)
Forward contracts Amount ($) 5,000
A$/US$ $0.73
Put options purchased Amount ($) 70,000
A$/US$ $0.85
Put options sold Amount ($) 70,000
A$/US$ $0.89
Call options sold Amount ($) 70,000
A$/US$ $0.82
BRAZILIAN REAL (000)
Forward contracts Amount ($) 26,000 1,000
US$/BRL BRL 1.91 BRL 1.84
Put options purchased Amount ($) 37,000 500
US$/BRL BRL 1.78 BRL 1.76
Call options sold Amount ($) 117,000 1,000
US$/BRL BRL 1.80 BRL 1.76
Year 2012 2013-2016 Total
RAND DOLLAR (000)
Forward contracts Amount ($) 10,000
US$/R R7.01
Put options purchased Amount ($) 50,000
US$/R R7.31
Put options sold Amount ($) 50,000
US$/R R6.89
Call options sold Amount ($) 50,000
US$/R R7.96
A DOLLAR (000)
Forward contracts Amount ($) 5,00 0
A$/US$ $0.73
Put options purchased Amount ($) 70,000
A$/US$ $0.85
Put options sold Amount ($) 70,000
A$/US$ $0.89
Call options sold Amount ($) 70,000
A$/US$ $0.82
BRAZILIAN REAL (000)
Forward contracts Amount ($) 27,000
US$/BRL BRL 1.91
Put options purchased Amount ($) 37,500
US$/BRL BRL 1.78
Call options sold Amount ($) 118,000
US$/BRL BRL 1.80
Derivative analysis by accounting designation as at 3 1 March 2008
Cash flow
Normal sale hedge
exempted accounted
(US Dollars (millions)
Commodity option contracts (758) -
Foreign exchange option contracts - -
Forward sale commodity contracts (1,335) (3 41)
Forward foreign exchange contracts - 1
Interest rate swaps (29) -
Total hedging contracts (2,122) (340)
Option component of convertible bonds - -
Total derivatives (2,122) (340)
Non-hedge
accounted Total
(US Dollars (millions)
Commodity option contracts (2,332) (3,090)
Foreign exchange option contracts (14) (1 4)
Forward sale commodity contracts (75) (1,751)
Forward foreign exchange contracts - 1
Interest rate swaps 33 4
Total hedging contracts (2,388) (4,850)
Option component of convertible bonds (2) (2)
Total derivatives (2,390) (4,852)
Rounding of figures may result in computational discrepancies.
Exploration
Total exploration expenditure amounted to $46m ($19m brownfields, $27m
greenfields) during the first quarter of 2008, compared to $4 8m ($ 22m
brownfields, $26m greenfields) in the previous quarter.
BROWNFIELDS EXPLORATION
In South Africa, surface drilling continued in the Project Zaaiplaats area,
with boreholes MZA9 and MMB5 during the quarter.
Surface drilling in the Moab North area continued with a long deflection of
Borehole MCY4 reaching a depth of 2,106m and borehole MCY5 advancing a further
478m during the quarter.
At Tau Lekoa, borehole G54 was completed and borehole G55 is currently drilling
and has reached a depth of 1, 285m at the end of the quarter.
At Iduapriem in Ghana , preparation for Mineral Resource conversion drilling
was started at Ajopa, with line cutting and drilling pad development completed
and drilling expected to start in the second quarter of the year.
In Argentina , at Cerro Vanguardia the 2008 exploration programme commenced in
February with 4,731m of diamond drilling and 600m of reverse circulation (R C)
drilling being completed. A hyper-spectral survey was completed and is
currently being interpreted.
In Australia, at Boddington mine, by quarter end there were five rigs employed
on Mineral Resource conversion and the near mine exploration diamond drilling
programme. During the quarter, nearly 25,756m were drilled from 30 holes.
In Brazil, at Corrego do Sitio Sulphide Project, drilling continued with
10,269m being drilled from surface, 2,341m drilled from underground and 860m of
underground development. At the Lamego project 4, 633m of surface drilling,
3,063m underground drilling and 946m of underground development were completed.
At Siguiri in Guinea , exploration activities continued to focus on 50m by 50m
of infill RC drilling at Sintroko South (situated 8km south of the mine).
Results from reconnaissance air core drilling of the Setiguia anomaly to the
north west of the Eureka North pit are awaited. Geochemical soil sampling is
ongoing to investigate the western extensions of the Setiguia and other
potassium anomalies on the north-west trending structures related to the Eureka
North - Kintinian mineralis ation corridor.
Reconnaissance aircore drilling (AC) was completed and results were received
for coincident AEM and geochemical anomalies at Kouremale in Block 4, close to
the Malian border, and in Block 3 at Kolita-Kounkoun. These will require follow
up drilling after the rainy season.
At Geita in Tanzania , exploration activities continued to be concentrated in
three areas , namely, Area 3 (820m); Nyakabale-Prospect 30 (5,288m) and
Kalondwa Hill (33 1m). Diamond drilling ( 1,620m) for metallurgical testing was
started at the Star and Comet projects during the quarter.
At Morila in Mali, a pitting programme was conducted at Sokela (33 pits) and
Domba-B l a (9 pits) to define the limits of inferred sediment rafts.
At Sadiola, testing started at the four anomalies, Sekokoto SE ( 1,562m);
Lakanfala East (5, 650m); S5 (990m) and S6 (3,272m). In addition, the Phase 9
Deep sulphide drilling programme started in the northern part of the Sadiola
Main pit (1,647m) and dedicated mapping was conducted in the FE4 Pit to provide
support for the further development of the 3- D geological model.
At Navachab in Namibia, drilling focused on ore extension in the Main Pit and
North Pit 2 areas with 5,200m drilled. Two new drill access roads were
completed at Gecko North. Drilling of 4,780m of exploration infill and advanced
grade control holes at Anomaly 16 has been completed.
Following some positive anomalies from the Steenbok-Starling soil survey, the
grid was extended southwards. The BLEG stream sediment survey (195 samples)
over the Okondura EPL3276 has been completed and the results thus far have been
disappointing.
Two new EPLs, Otjombali and Elisenore of approximately 100,000 hectares each,
to the northeast of Okahandja, have been applied for.
At Cripple Creek & Victor in the United States, exploration and development
drilling continued on the north side of the district near Schist Island and
Control Point.
GREENFIELDS
Greenfields exploration activities continued in six countries (Australia,
Colombia, the DRC, China, the Philippines, and Russia) during the first quarter
of 2008. A total of 25,220m of diamond drilling (DDH), reverse circulation
(RC), and aircore (AC) drilling were completed during the first quarter of
2008, at existing priority targets and delineating new targets in Australia,
the DRC, and Colombia.
In addition to a total of 6.95Moz attributable (9.1Moz on a 100% basis) of JORC
Inferred and Indicated Mineral Resource declared by AngloGold Ashanti in 2007
at its greenfields projects, an additional 12.9Moz Inferred Mineral Resource
has been defined at AngloGold Ashanti`s 100% owned La Colosa project in
Colombia.
In Colombia, regional exploration and target generation activities continued
during the first quarter with diamond drilling on four prospects. A major focus
was drilling and resource modelling at La Colosa, where 5,897 m of diamond
drilling was completed on the Main Porphyry and La Belgica sectors. At the end
of the quarter, a total of 17,052m has been drilled from 59 holes throughout
the La Colosa area, and an Inferred Mineral Resource of 12.9Moz has been
defined in the Main Porphyry , at a gold price of $1,000/oz , as per table
below.
Cut - Price Tonnage Grade Ounces
Off $ (Mt) (g/t) (Moz)
(g/t)
0.5 700 293.4 1.03 9.7
0.4 800 351.6 0.95 10.8
0.3 1,000 468.8 0.86 12.9
Table: Mineral Resource (Inferred), constrained within an optimised pit shell
at gold prices of $700, $800 and $1000/oz
La Colosa is the second significant greenfields discovery (Gramalote being the
first) in Colombia and was discovered by AngloGold Ashanti`s Colombian
greenfields exploration team during 2006. The Project is 100% owned by
AngloGold Ashanti and is located 150km west of Colombia`s capital city, Bogota
and 30km west of the major town of Ibague in the Department of Tolima.
Since discovery, only 18 months ago, exploration drilling at La Colosa has
rapidly defined "porphyry style" mineralization at a grade > 0.3g/t gold
extending over a strike length in excess of 1,500m and a width of 600m.
Additional upside potential, which is considered material, remains untested
both along strike to the north and south as well as to the east of the drilled
portion of the deposit and regionally, where at least three quality targets
require follow-up.
Included within the pit optimisation are some 0.5Moz of potentially mineralised
material that has not yet been drilled. This material was included in the pit
optimization, as it lies at the crest of the La Colosa Hill and has not yet
been drilled due to logistical constraints. There is strong geological
evidence that this material is mineralised, and as it has not been included in
the Mineral Resource, it constitutes further near term upside.
Exploration drilling at Colosa is temporarily suspended until a new
environmental permit is issued, which is expected within the next few months.
In Australia exploration in the Tropicana JV (AngloGold Ashanti 70%,
Independence Gold 30%) focussed on the drilling of the Tropicana and Havana
resource and infrastructure sterilisation as part of the project pre -
feasibility study. On completion of this project at the end of the second
quarter 2008, the focus will be directed to the regional programmes on the
12,500km 2 of tenement held by AngloGold Ashanti in the Tropicana JV and Viking
Project (3,500km 2 and 100% AngloGold Ashanti). Reconnaissance work in the
Tropicana JV tenements returned encouraging rock, auger, aircore and diamond
drilling results. Auger results defined anomalies at Tropicana Group 4 with
sufficient encouragement to follow -up with further sampling and aircore
drilling later in the year. Mapping at Black Dragon returned several selective
rock chip samples with anomalous grades up to 22.18g/t. Significant aircore
results were returned from Black Dragon, Beetlejuice and Screaming Lizard.
Diamond drilling at Beachcomber included a 1.8m quartz vein intersection with
visible gold. During the first quarter, a total of 258 aircore holes were
drilled for 14,291m and 2 diamond holes for 422m.
A restated joint venture agreement was signed with Independence Gold during the
quarter. The agreement includes requirements for the future mining operation
and the JV partner has agreed to jointly fund all regional exploration and
certain other activities outside of the agreed scope of the Pre-feasibility
Study.
Along the Albany -Fraser orogenic belt, where AngloGold Ashanti has a first
mover advantage, with granted tenements and applications covering an area of
12,500km 2 dominating a strike length of 600km. The approximate 3,500km 2
Viking project is southwest of the Tropicana JV within the same Albany - Fraser
belt that hosts the Tropicana deposit. Recent results at Beachcomber and those
reported by other explorers add credence to this belt potentially emerging as a
new gold province.
Exploration activates in the DRC were undertaken at Concession 40 (10,000km 2),
which covers most of the Kilo greenstone belt and remains virtually unexplored
by modern methods. A total of 1,950m of infill drilling for definition of the
open-pitable Inferred Mineral Resource at Mongbwalu was completed, and the
2007 Mineral Resource estimation of 33Mt at 2.68g/t will be updated wit h assay
results from the twenty holes drilled during the quarter. A further 14,050m of
infill drilling spaced at 50m by 50m, adjacent to the open pit resource will
focus on defining an underground resource.
Around Mongbwalu, detailed surface mapping and data integration is leading to a
n enhanced understanding of the potential in the immediate area. Regional
exploration activities focused around four main areas including Lodjo; Bunia
West; Mont Tsi and Petsi, all located within 50km of the Mongbwalu resource
area. The Mont Tsi and Petsi prospects are ready for first phase drilling
during the year, and at the Petsi prospect, up to a 30m wide potentially gold
mineralised shear zone has been identified by trenches over a distance of
1.8km. Mont Tsi is an historically mined area where an old open pit, which is
approximately 1.5km long, exposes strongly deformed and altered mafic granitoid
that host gold mineralisation. Assay results from trenches for both Petsi and
Mont Tsi are still being awaited. The findings of the DRC Minerals Review
Commission have resulted in AngloGold Ashanti and the AGK joint venture
engaging the DRC government to seek resolution and agree a way forward to
optimally develop Concession 40.
In Russia the formation of Zoloto Taigi, the AngloGold Ashanti / Polymetal
strategic alliance vehicle, was completed. It is anticipated that through the
strategic alliance, AngloGold Ashanti will be in a position to increase its
presence in Russia by pursuing new opportunities through participation in
licence auctions, acquiring equity in prospective projects and by new project
generation in new or less intensely explored areas. In the Krasnoyarsk region,
diamond drilling to increase the Ore Reserve by a possible 600,000oz , from
1.8Moz to 2.4Moz , is in progress. A licence wide geochemical survey is also
underway on the Aprelkova licence in the Chita region.
In China , results from the diamond drilling programme was completed at one of
the targets on the tenements held by the Yili-Yunlong CJV , and returned low
gold and copper results. Final evaluation of these tenements will be completed
by the end of the third quarter of 2008. The CJV is awaiting grant of three
exploration licences applications (130km 2) in eastern Tianshan. The area was
selected for exploration for copper -gold porphyries following a government
funded soil sampling programme, which found high levels of gold ( 3 0-60ppb) in
calcrete. Final approval of the Jinchanggou CJV is expected at the end of the
second quarter 2008, with delays caused by changes to government regulations.
Low-cost exploration programmes have however confirmed the extension and
continuity of gold anomalies. Mapping and sampling of small open-pit and
underground workings have characterised both the low and high-grade gold
mineralisation. Drilling will commence following the issue of the business
licence.
In the Philippines, progress was made on the Mapawa MPSA during the quarter
with the licence approved for grant by the Manila Mines Geological Bureau
(MGB). Final approval/ratification is still awaited from the Department of
Environment and Natural Resources (DENR).
Group income statement
Quarter Quarter
ended ended
March December
2008 2007
SA Rand million Notes Unaudited Unaudited
Revenue 2 7,471 6,428
Gold income 7,245 5,784
Cost of sales 3 (4,992) (5,215)
Loss on non-hedge derivatives and other
commodity contracts (5,612) (2,923)
Gross (loss) profit (3,359) (2,354)
Corporate administration and other
expenses (215) (209)
Market development costs (24) (40)
Exploration costs (274) (241)
Other operating income (expenses) 4 32 22
Operating special items 5 82 (288)
Operating (loss) profit (3,758) (3,110)
Dividend received from other investments - -
Interest received 82 89
Exchange gain 1 23
Fair value adjustment on option component
of convertible bond 170 115
Finance costs and unwinding of obligations (265) (231)
Share of associates` loss (1) (6)
(Loss) profit before taxation (3,771) (3,120)
Taxation 6 52 (73)
Losst after taxation from continuing
operations (3,719) (3,193)
Discontinued operations
(Loss) profit for the period from
discontinued operations 7 (3) 41
Loss for the period (3,722) (3,152)
Allocated as follows:
Equity shareholders (3,812) (3,199)
Minority interest 90 47
(3,722) (3,152)
Basic 1 and diluted 2 loss per ordinary
share (cents)
Loss from continuing operations (1,350) (1,151)
(Loss) profit from discontinued operations (1) 15
Loss (1,351) (1,136)
Dividends
- Rm
- cents per Ordinary share
- cents per E Ordinary share
Quarter Year
ended ended
March December
2007 2007
SA Rand million Unaudited Audited
Revenue 5,882 24,383
Gold income 5,664 23,052
Cost of sales (4,223) (18,495)
Loss on non-hedge derivatives and other commodity
contracts (662) (5,081)
Gross (loss) profit 778 (524)
Corporate administration and other expenses (208) (885)
Market development costs (23) (115)
Exploration costs (176) (839)
Other operating income (expenses) (47) (134)
Operating special items 14 (139)
Operating (loss) profit 339 (2,636)
Dividend received from other investments - 16
Interest received 73 312
Exchange gain 3 4
Fair value adjustment on option component of
convertible bond 135 333
Finance costs and unwinding of obligations (200) (880)
Share of associates` loss (4) (164)
(Loss) profit before taxation 346 (3,015)
Taxation (434) (1,039)
Losst after taxation from continuing operations (88) (4,054)
Discontinued operations
(Loss) profit for the period from discontinued
operations (6) 7
Loss for the period (94) (4,047)
Allocated as follows:
Equity shareholders (150) (4,269)
Minority interest 56 222
(94) (4,047)
Basic 1 and diluted 2 loss per ordinary share (cents)
Loss from continuing operations (51) (1,519)
(Loss) profit from discontinued operations (2) 3
Loss (53) (1,516)
Dividends
- Rm 399
- cents per Ordinary share 143
- cents per E Ordinary share 72
1 Calculated on the basic weighted average number of ordinary shares.
2 Calculated on the diluted weighted average number of ordinary shares. The
impact of the diluted earnings per share is anti-dilutive and therefore equal
to the basic earnings per share.
Rounding of figures may result in computational discrepancies.
Group income statement
Quarter Quarter
ended ended
March December
2008 2007
US Dollar million Notes Unaudited Unaudited
Revenue 2 987 951
Gold income 958 856
Cost of sales 3 (661) (771)
Loss on non-hedge derivatives and other
commodity contracts (373) (440)
Gross (loss) profit (77) (355)
Corporate administration and other
expenses (28) (31)
Market development costs (3) (6)
Exploration costs (37) (36)
Other operating income (expenses) 4 4 3
Operating special items 5 11 (42)
Operating (loss) profit (130) (467)
Dividend received from other investments - -
Interest received 11 13
Exchange gain - 3
Fair value adjustment on option component
of convertible bond 23 17
Finance costs and unwinding of obligations (35) (34)
Share of associates` loss - (1)
(Loss) profit before taxation (131) (469)
Taxation 6 1 (11)
(Loss) profit after taxation from
continuing operations (130) (481)
Discontinued operations
Profit (loss) for the period from
discontinued operations 7 - 6
Loss (profit) for the period (131) (475)
Allocated as follows:
Equity shareholders (142) (482)
Minority interest 11 7
(131) (475)
Basic 1 and diluted 2 (loss) earnings per
ordinary share (cents)
(Loss) profit from continuing operations (50) (173)
Profit from discontinued operations - 2
(Loss) profit (50) (171)
Dividends
- $m
- cents per Ordinary share
- cents per E Ordinary share
Quarter Year
ended ended
March December
2007 2007
US Dollar million Unaudited Audited
Revenue 813 3,472
Gold income 783 3,280
Cost of sales (584) (2,636)
Loss on non-hedge derivatives and other commodity
contracts (51) (780)
Gross (loss) profit 147 (136)
Corporate administration and other expenses (29) (126)
Market development costs (3) (16)
Exploration costs (24) (120)
Other operating income (expenses) (7) (20)
Operating special items 2 (21)
Operating (loss) profit 86 (439)
Dividend received from other investments - 2
Interest received 10 45
Exchange gain - 1
Fair value adjustment on option component of
convertible bond 19 47
Finance costs and unwinding of obligations (28) (125)
Share of associates` loss (1) (23)
(Loss) profit before taxation 88 (492)
Taxation (60) (145)
(Loss) profit after taxation from continuing
operations 28 (637)
Discontinued operations
Profit (loss) for the period from discontinued
operations (1) 1
Loss (profit) for the period 27 (636)
Allocated as follows:
Equity shareholders 19 (668)
Minority interest 8 32
27 (636)
Basic 1 and diluted 2 (loss) earnings per ordinary
share (cents)
(Loss) profit from continuing operations 7 (237)
Profit from discontinued operations - -
(Loss) profit 7 (237)
Dividends
- $m 53
- cents per Ordinary share 19
- cents per E Ordinary share 10
1 Calculated on the basic weighted average number of ordinary shares.
2 Calculated on the diluted weighted average number of ordinary shares.
The impact of the diluted earnings per share is anti-dilutive and therefore
equal to the basic earnings per share.
Rounding of figures may result in computational discrepancies.
Group balance sheet
As at As at As at
March December March
2008 2007 2007
SA Rand million Notes Unaudited Audited Unaudited
ASSETS
Non-current assets
Tangible assets 53,383 45,783 44,282
Intangible assets 3,657 2,996 3,073
Investments in associates 127 140 371
Other investments 835 795 926
Inventories 2,917 2,217 2,167
Trade and other receivables 761 566 452
Derivatives - - 22
Deferred taxation 631 543 444
Other non-current assets 281 278 340
62,593 53,318 52,077
Current assets
Inventories 5,639 4,603 3,553
Trade and other receivables 1,949 1,587 1,610
Derivatives 3,966 3,516 4,651
Current portion of other
non-current assets 2 2 5
Cash restricted for use 326 264 272
Cash and cash equivalents 4,167 3,381 2,919
16,049 13,353 13,010
Non-current assets held for sale 110 210 113
16,159 13,563 13,123
TOTAL ASSETS 78,752 66,881 65,200
EQUITY AND LIABILITIES
Share capital and premium 10 22,448 22,371 22,196
Retained earnings and other
reserves 11 (5,787) (6,167) (961)
Shareholders` equity 16,661 16,204 21,235
Minority interests 12 576 429 481
Total equity 17,237 16,633 21,716
Non-current liabilities
Borrowings 5,728 10,441 9,010
Environmental rehabilitation
and other provisions 4,082 3,361 2,927
Provision for pension and
post-retirement benefits 1,244 1,208 1,193
Trade, other payables and
deferred income 89 79 138
Derivatives 874 1,110 1,827
Deferred taxation 7,398 7,159 7,826
19,415 23,358 22,921
Current liabilities
Current portion of borrowings 10,157 2,309 1,725
Trade, other payables and
deferred income 5,250 4,549 4,003
Derivatives 25,188 18,763 13,384
Taxation 1,506 1,269 1,451
42,101 26,890 20,564
Total liabilities 61,515 50,248 43,484
TOTAL EQUITY AND LIABILITIES 78,752 66,881 65,200
Net asset value - cents per
share 6,116 5,907 7,733
Rounding of figures may result in computational discrepancies.
Group balance sheet
As at As at As at
March December March
2008 2007 2007
US Dollar million Notes Unaudited Audited Unaudited
ASSETS
Non-current assets
Tangible assets 6,595 6,722 6,069
Intangible assets 452 440 421
Investments in associates 16 21 51
Other investments 103 117 127
Inventories 360 325 297
Trade and other receivables 94 83 62
Derivatives - - 3
Deferred taxation 78 80 61
Other non-current assets 35 41 47
7,733 7,829 7,138
Current assets
Inventories 697 676 487
Trade and other receivables 241 233 220
Derivatives 490 516 638
Current portion of other
non-current assets - - 1
Cash restricted for use 40 39 37
Cash and cash equivalents 515 496 400
1,984 1,960 1,782
Non-current assets held for sale 14 31 16
1,997 1,991 1,798
TOTAL ASSETS 9,731 9,820 8,936
EQUITY AND LIABILITIES
Share capital and premium 10 2,773 3,285 3,042
Retained earnings and other
reserves 11 (715) (906) (131)
Shareholders` equity 2,058 2,379 2,911
Minority interests 12 71 63 66
Total equity 2,130 2,442 2,977
Non-current liabilities
Borrowings 708 1,533 1,235
Environmental rehabilitation
and other provisions 504 494 401
Provision for pension and
post-retirement benefits 154 177 164
Trade, other payables and
deferred income 11 12 19
Derivatives 108 163 250
Deferred taxation 914 1,051 1,073
2,399 3,430 3,142
Current liabilities
Current portion of borrowings 1,255 339 236
Trade, other payables and
deferred income 649 668 548
Derivatives 3,112 2,755 1,834
Taxation 186 186 199
5,202 3,948 2,818
Total liabilities 7,600 7,378 5,959
TOTAL EQUITY AND LIABILITIES 9,731 9,820 8,936
Net asset value - cents per
share 756 867 1,060
Rounding of figures may result in computational discrepancies.
Group cash flow statement
Quarter Quarter Quarter Year
ended ended ended ended
March December March December
2008 2007 2007 2007
SA Rand million Unaudited Unaudited Unaudited Audited
Cash flows from
operating activities
Receipts from
customers 7,142 6,302 5,629 24,059
Payments to suppliers
and employees (5,267) (4,382) (3,537) (16,144)
Cash generated from
operations 1,875 1,920 2,092 7,915
Cash (utilised)
generated by
discontinued
operations (1) 10 (10) (14)
Dividends received
from associates - 1 - 1
Taxation paid (442) (664) (332) (1,664)
Net cash inflow from
operating activities 1,432 1,268 1,750 6,238
Cash flows from
investing activities
Capital expenditure (1,930) (2,284) (1,417) (7,198)
Acquisition of assets - 3 - (284)
Proceeds from
disposal of tangible
assets 222 24 17 197
Proceeds from
disposal of assets of
discontinued
operations - - 2 9
Other investments
acquired (266) (207) (40) (190)
Associate loans and
acquisitions 30 - (63) 1
Proceeds from
disposal of
investments 207 69 21 174
Dividend received
from other
investments - - - 16
(Increase) decrease
in cash restricted
for use (48) 37 (189) (177)
Interest received 88 74 60 260
Loans advanced (3) - (26) (7)
Repayment of loans
advanced 1 - 1 10
Net cash outflow from
investing activities (1,700) (2,284) (1,634) (7,189)
Cash flows from
financing activities
Proceeds from issue
of share capital 65 88 104 247
Share issue expenses - - - (4)
Proceeds from
borrowings 1,300 4,320 196 6,111
Repayment of
borrowings (233) (3,399) (143) (3,932)
Finance costs (258) (25) (212) (511)
Dividends paid (152) (17) (694) (1,050)
Net cash inflow
(outflow) from
financing activities 722 967 (749) 861
Net increase
(decrease) in cash
and cash equivalents 454 (49) (632) (90)
Translation 332 (17) 84 4
Cash and cash
equivalents at
beginning of period 3,381 3,447 3,467 3,467
Net cash and cash
equivalents at end of
period 4,167 3,381 2,919 3,381
Cash generated from
operations
(Loss) profit before
taxation (3,771) (3,120) 346 (3,015)
Adjusted for:
Movement on non-hedge
derivatives and other
commodity contracts 5,409 3,719 984 7,232
Amortisation of
tangible assets 1,082 1,103 948 4,143
Finance costs and
unwinding of
obligations 265 231 200 880
Environmental,
rehabilitation and
other expenditure 87 271 (14) 287
Operating special items (82) 288 (14) 168
Amortisation of
intangible assets 4 3 4 14
Deferred stripping (213) (73) (100) (431)
Fair value adjustment
on option components
of convertible bond (170) (115) (135) (333)
Interest receivable (82) (89) (73) (312)
Other non-cash
movements (20) 90 146 520
Movements in working
capital (633) (388) (201) (1,238)
1,875 1,920 2,092 7,915
Movements in working
capital
Increase in
inventories (1,762) (453) (326) (1,489)
Increase in trade and
other receivables (462) (260) (288) (501)
Increase in trade and
other payables 1,591 326 413 752
(633) (388) (201) (1,238)
Rounding of figures may result in computational discrepancies.
Group cash flow statement
Quarter Quarter Quarter Year
ended ended ended ended
March December March December
2008 2007 2007 2007
US Dollar million Unaudited Unaudited Unaudited Audited
Cash flows from
operating activities
Receipts from customers 953 937 780 3,424
Payments to suppliers
and employees (705) (655) (492) (2,303)
Cash generated from
operations 248 282 288 1,121
Cash generated
(utilised) by
discontinued operations - 2 (1) (2)
Dividends received from
associates - - - -
Taxation paid (59) (96) (46) (237)
Net cash inflow from
operating activities 189 188 240 882
Cash flows from
investing activities
Capital expenditure (257) (334) (196) (1,024)
Acquisition of assets - - - (40)
Proceeds from disposal
of tangible assets 30 4 2 29
Proceeds from disposal
of assets of
discontinued operations - - - 1
Other investments
acquired (35) (30) (5) (27)
Associate loans and
acquisitions 4 - (9) -
Proceeds from disposal
of investments 28 10 3 25
Dividend received from
other investments - - - 2
(Increase) decrease in
cash restricted for use (6) 5 (26) (25)
Interest received 11 11 8 37
Loans advanced - - (4) (1)
Repayment of loans
advanced - - - 1
Net cash outflow from
investing activities (226) (334) (226) (1,022)
Cash flows from
financing activities
Proceeds from issue of
share capital 9 12 14 34
Share issue expenses - - - -
Proceeds from borrowings 173 618 27 870
Repayment of borrowings (31) (485) (20) (560)
Finance costs (34) (4) (29) (73)
Dividends paid (19) (2) (94) (144)
Net cash inflow
(outflow) from financing
activities 97 139 (102) 127
Net increase (decrease)
in cash and cash
equivalents 60 (7) (88) (13)
Translation (42) 1 (8) 14
Cash and cash
equivalents at beginning
of period 496 502 495 495
Net cash and cash
equivalents at end of
period 515 496 400 496
Cash generated from
operations
(Loss) profit before
taxation (131) (469) 88 (492)
Adjusted for:
Movement on non-hedge
derivatives and other
commodity contracts 345 558 96 1,088
Amortisation of tangible
assets 144 164 131 590
Finance costs and
unwinding of obligations 35 34 28 125
Environmental,
rehabilitation and other
expenditure 12 40 (2) 42
Operating special items (11) 42 (2) 25
Amortisation of
intangible assets - - - 2
Deferred stripping (26) (11) (14) (63)
Fair value adjustment on
option components of
convertible bond (23) (17) (19) (47)
Interest receivable (11) (13) (10) (45)
Other non-cash movements (3) 13 22 75
Movements in working
capital (82) (59) (30) (179)
248 282 288 1,121
Movements in working
capital
Increase in inventories (59) (75) (14) (240)
Increase in trade and
other receivables (21) (40) (32) (79)
(Decrease) increase in
trade and other payables (3) 56 16 140
(82) (59) (30) (179)
Rounding of figures may result in computational discrepancies.
Statement of recognised income and expense
Quarter Year Quarter
ended ended ended
March December March
2008 2007 2007
SA Rand million Unaudited Audited Unaudited
Actuarial loss on pension and
post-retirement benefits - (99) -
Net loss on cash flow hedges removed
from equity and reported in gold sales 494 1,421 215
Net loss on cash flow hedges (827) (1,173) (304)
Hedge ineffectiveness 13 69 -
(Loss) gain on available-for-sale
financial assets (73) 8 24
Deferred taxation on items above 106 36 65
Translation 4,615 (169) 1,000
Net income recognised directly in equity 4,328 93 1,000
Loss for the period (3,722) (4,047) (94)
Total recognised income (expense) for
the period 606 (3,954) 906
Attributable to:
Equity shareholders 455 (4,169) 836
Minority interest 151 215 70
606 (3,954) 906
US Dollar million
Actuarial loss on pension and
post-retirement benefits - (14) -
Net loss on cash flow hedges removed
from equity and reported in gold sales 66 202 32
Net loss on cash flow hedges (110) (168) (42)
Hedge ineffectiveness 2 10 -
(Loss) gain on available-for-sale
financial assets (9) 1 3
Deferred taxation on items above 14 5 9
Translation 376 6 100
Net income recognised directly in equity 339 42 102
(Loss) profit for the period (131) (636) 27
Total recognised income (expense) for
the period 208 (594) 129
Attributable to:
Equity shareholders 199 (627) 121
Minority interest 9 33 8
208 (594) 129
Rounding of figures may result in computational discrepancies.
Notes
for the quarter ended 3 1 March 2008
1. Basis of preparation
The financial statements in this quarterly report 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 2007 and
revised International Financial Reporting Standards (IFRS) which are effective
1 January 2008, where applicable.
The financial statements of AngloGold Ashanti Limited have been prepared in
compliance with IAS34, JSE Listings Requirements and in the manner required by
the South African Companies Act, 1973 for the preparation of financial
information of the group for the quarter ended 31 March 2008.
2. Revenue
Quarter ended Year ended
Mar Dec Mar Dec
2008 2007 2007 2007
Unaudited Unaudited Unaudited Audited
SA Rand million
Gold income 7, 245 5,784 5 , 664 23,052
By -products
(note 3) 145 555 145 1,003
Dividend
received from
other investments - - - 16
Interest received 82 89 73 312
7, 471 6, 428 5, 882 24,383
Quarter ended Year ended
Mar Dec Mar Dec
2008 2007 2007 2007
Unaudited Unaudited Unaudited Audited
US Dollar million
Gold income 958 856 783 3,280
By -products
(note 3) 19 82 20 145
Dividend
received from
other
investments - - - 2
Interest
received 11 13 10 45
987 951 813 3,472
3. Cost of sales
Quarter ended Year ended
Mar Dec Mar Dec
2008 2007 2007 2007
Unaudited Unaudited Unaudited Audited
SA Rand million
Cash operating
costs (3,770) (3, 518) (3, 099) (13, 365)
By-products
revenue (note 2) 145 555 145 1,003
By-products
cash operating
costs (107) (538) (100) (892)
(3, 732) (3, 501) (3, 054) (13,254)
Other cash costs (251) (187) (177) (705)
Total cash costs (3, 983) (3, 688) (3, 231) (13,959)
Retrenchment
costs (26) (88) (7) (131)
Rehabilitation
and other non-cash
costs (106) (321) (20) (445)
Production costs (4, 115) (4, 097) (3,258) (14,535)
Amortisation of
tangible assets (1, 082) (1, 103) (948) (4,143)
Amortisation of
intangible assets (4) (3) (4) (14)
Total
production costs (5,201) (5, 203) (4, 210) (18,692)
Inventory change 209 (12) (14) 197
(4, 992) (5, 215) (4, 223) (18,495)
Quarter ended Year ended
Mar Dec Mar Dec
2008 2007 2007 2007
Unaudited Unaudited Unaudited Audited
US Dollar million
Cash operating costs (500) (520) (429) (1, 904)
By -products
revenue (note 2) 19 82 20 145
By -products
cash operating costs (14) (80) (14) (129)
(495) (518) (423) (1,888)
Other cash costs (33) (27) (25) (100)
Total cash costs (528) (545) (448) (1,988)
Retrenchment costs (3) (13) (1) (19)
Rehabilitation
and other non-cash
costs (14) (47) (3) (65)
Production costs (545) (605) (451) (2,072)
Amortisation of
tangible assets (144) (164) (131) (590)
Amortisation of
intangible assets - - - (2)
Total production
costs (689) (769) (583) (2,664)
Inventory change 28 (2) (2) 28
(661) (771) (584) (2,636)
Rounding of figures may result in computational discrepancies.
4. Other operating income (expenses)
Quarter ended Year ended
Mar Dec Mar Dec
2008 2007 2007 2007
Unaudited Unaudited Unaudited Audited
SA Rand million
Pension and
medical defined (24) 52 (25) (23)
benefit provisions
Claims filed by
former employees in
respect of loss of
employment, work-
related accident
injuries and diseases,
govern- mental fiscal
claims and costs of old
tailings operations 60 (30) (21) (97)
Miscellaneous (4) - (1) (14)
32 22 (47) (134)
Quarter ended Year ended
Mar Dec Mar Dec
2008 2007 2007 2007
Unaudited Unaudited Unaudited Audited
US Dollar million
Pension and
medical defined (3) 7 (4) (3)
benefit provisions
Claims filed by
former employees in
respect of loss of
employment, work-
related accident
injuries and
diseases, govern-
mental fiscal
claims and
costs of old
tailings
operations 8 (4) (3) (15)
Miscellaneous (1) - - (2)
4 3 (7) (20)
5. Operating special items
Quarter ended Year ended
Mar Dec Mar Dec
2008 2007 2007 2007
Unaudited Unaudited Unaudited Audited
SA Rand million
Indirect tax
expenses - (177) - (184)
Impairment of
tangible
assets (note 8) (3) (5) (1) (6)
Impairment of
goodwill
(note 8) - (7) - (7)
Recovery of loan - - 21 -
Recovery of
exploration
costs previously
expensed - 6 - 29
Siguiri royalty
payment
calculation
dispute with the
Guinean
Administration - (27) - (27)
Profit (loss) on
disposal and
abandonment of
assets (note 8) 85 (78) (6) 56
82 (288) 14 (139)
Quarter ended Year ended
Mar Dec Mar Dec
2008 2007 2007 2007
Unaudited Unaudited Unaudited Audited
US Dollar million
Indirect tax
expenses - (26) - (26)
Impairment of
tangible
assets (note 8) - (1) - (1)
Impairment of
goodwill
(note 8) - (1) - (1)
Recovery of loan - - 3 -
Recovery of
exploration
costs previously
expensed - 1 - 4
Siguiri royalty
payment
calculation
dispute with the
Guinean
Administration - (4) - (4)
Profit (loss) on
disposal and
abandonment of
assets (note 8) 11 (12) (1) 7
11 (42) 2 (21)
Rounding of figures may result in computational discrepancies.
6. Taxation
Quarter ended Year ended
Mar Dec Mar Dec
2008 2007 2007 2007
Unaudited Unaudited Unaudited Audited
SA Rand million
Current tax
Normal taxation (577) (390) (442) (1,608)
Disposal of
tangible
assets (note 8) (2) (9) (4) (40)
Over (under)
provision
prior year 14 (6) (67) (32)
(565) (405) (513) (1,680)
Deferred taxation
Temporary
differences (151) (36) 1 7
Unrealised
non-hedge
derivatives and
other
commodity contracts 590 336 82 673
Disposal of
tangible
assets (note 8) (11) (2) (4) 18
Change in estimated
deferred tax rate - 34 - (57)
Change in
statutory tax rate 189 - - -
617 332 79 641
Total taxation 52 (73) (434) (1,039)
Quarter ended Year ended
Mar Dec Mar Dec
2008 2007 2007 2007
Unaudited Unaudited Unaudited Audited
US Dollar million
Current tax
Normal taxation (77) (58) (61) (229)
Disposal of
tangible
assets (note 8) - (1) (1) (6)
Over (under)
provision
prior year 2 (1) (9) (4)
(75) (60) (71) (239)
Deferred taxation
Temporary
differences (20) (6) 1 1
Unrealised
non-hedge
derivatives and
other
commodity contracts 72 50 11 98
Disposal of
tangible
assets (note 8) (1) - (1) 3
Change in estimated
deferred tax rate - 5 - (8)
Change in
statutory tax rate 25 - - -
76 49 11 94
Total taxation 1 (11) (60) (145)
7. Discontinued operations
The Ergo surface dump reclamation, which forms part of the South African
operations, has been discontinued as the operation has reached the end of its
useful life. The results of Ergo are presented below:
Quarter ended Year ended
Mar Dec Mar Dec
2008 2007 2007 2007
Unaudited Unaudited Unaudited Audited
SA Rand million
Gold income - - 2 5
Cost of sales (5) 31 (5) 15
Gross (loss) profit (5) 31 (3) 20
Other income 3 10 - 10
Taxation (1) (1) (3) (23)
Net (loss) profit
attributable
to discontinued
operations (3) 41 (6) 7
Quarter ended Year ended
Mar Dec Mar Dec
2008 2007 2007 2007
Unaudited Unaudited Unaudited Audited
US Dollar million
Gold income - - - 1
Cost of sales (1) 5 (1) 2
Gross (loss) profit (1) 5 (1) 3
Other income 1 2 - 2
Taxation - - - (4)
Net (loss) profit
attributable
to discontinued
operations - 6 (1) 1
Rounding of figures may result in computational discrepancies.
8. Headline (loss) earnings
Quarter ended Year ended
Mar Dec Mar Dec
2008 2007 2007 2007
Unaudited Unaudited Unaudited Audited
SA Rand million
The (loss) profit
attributable
to equity
shareholders has
been adjusted by the
following to
arrive at
headline (loss)
earnings :
(Loss) profit
attributable to
equity shareholders (3, 812) (3, 199) (150) (4,269)
Impairment of tangible
assets (note 5) 3 5 1 6
Impairment of goodwill
(note 5) - 7 - 7
(Profit) loss on
disposal of
assets (note 5) (85) 78 6 (56)
Impairment of
investment in
associate 1 3 - 154
Taxation on items
above -
current portion
(note 6) 2 9 4 40
Taxation on items
above -
deferred portion
(note 6) 11 2 4 (18)
Headline (loss)
earnings (3, 880) (3, 095) (135) (4,136)
Cents per share (1)
Headline (loss)
earnings (1, 376) (1,099) (48) (1,470)
Quarter ended Year ended
Mar Dec Mar Dec
2008 2007 2007 2007
Unaudited Unaudited Unaudited Audited
US Dollar million
The (loss) profit
attributable
to equity
shareholders has
been adjusted by the
following to
arrive at
headline (loss)
earnings :
(Loss) profit
attributable to
equity shareholders (142) (482) 19 (668)
Impairment of tangible
assets (note 5) - 1 - 1
Impairment of
goodwill
(note 5) - 1 - 1
(Profit) loss on
disposal of
assets (note 5) (11) 12 1 (7)
Impairment of
investment in
associate - - - 22
Taxation on items
above -
current portion
(note 6) - 1 1 6
Taxation on items
above -
deferred portion
(note 6) 1 - 1 (3)
Headline (loss)
earnings (151) (466) 21 (648)
Cents per share (1)
Headline (loss)
earnings (54) (165) 7 (230)
(1) Calculated on the basic weighted average number of ordinary shares.
9. Shares
Quarter ended
Mar Dec
2008 2007
Unaudited Unaudited
Authorised:
Ordinary shares of 25 SA cents each 400,000,000 400,000,000
E ordinary shares of 25 SA cents each 4,280,000 4,280,000
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 and fully paid:
Ordinary shares in issue 277,745,007 277,457,471
E ordinary shares in issue 4,104,635 4,140,230
Total ordinary shares: 281,849,642 281,597,701
A redeemable preference shares 2,000,000 2,000,000
B redeemable preference shares 778,896 778,896
In calculating the diluted number of ordinary
shares outstanding for
the period, the following were taken into
consideration:
Ordinary shares 277,658,759 277,119,778
E ordinary shares 4,122,800 4,080,713
Fully vested options 280,789 457, 601
Weighted average number of shares 282,062,348 281,658,092
Dilutive potential of share options - -
Diluted number of ordinary shares (1) 282,062,348 281,658,092
Year ended
Mar Dec
2007 2007
Unaudited Audited
Authorised:
Ordinary shares of 25 SA cents each 400,000,000 400,000,000
E ordinary shares of 25 SA cents each 4,280,000 4,280,000
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 and fully paid:
Ordinary shares in issue 276,688,382 277,457,471
E ordinary shares in issue 4,149,230 4,140,230
Total ordinary shares: 280,837,612 281,597,701
A redeemable preference shares 2,000,000 2,000,000
B redeemable preference shares 778,896 778,896
In calculating the diluted number of ordinary
shares outstanding for
the period, the following were taken into
consideration:
Ordinary shares 276,426,639 276,805,309
E ordinary shares 4,167,212 4,117,815
Fully vested options 600,219 531,983
Weighted average number of shares 281,194,070 281,455,107
Dilutive potential of share options 641,741 -
Diluted number of ordinary shares (1) 281,835,811 281,455,107
(1) The basic and diluted number of ordinary shares are the same for March 2008
quarter as the effects of shares for performance related options are
anti-dilutive.
Rounding of figures may result in computational discrepancies.
10. Share capital and premium
As at
Mar Dec Mar
2008 2007 2007
Unaudited Audited Unaudited
SA Rand million
Balance at beginning of period 23, 322 23,045 23, 045
Ordinary shares issued 73 283 109
E ordinary shares cancelled (5) (6) (4)
Translation - - -
Sub-total 23, 391 23, 322 23, 150
Redeemable preference shares
held within the group (312) (312) (312)
Ordinary shares held within
the group (288) (292) (293)
E ordinary shares held within
the group (343) (347) (349)
Balance at end of period 22, 448 22, 371 22, 196
As at
Mar Dec Mar
2008 2007 2007
Unaudited Audited Unaudited
US Dollar million
Balance at beginning of period 3, 425 3,292 3, 292
Ordinary shares issued 10 40 15
E ordinary shares cancelled (1) (1) (1)
Translation (544) 94 (133)
Sub-total 2, 890 3, 425 3, 173
Redeemable preference shares
held within the group (39) (46) (43)
Ordinary shares held within
the group (36) (43) (40)
E ordinary shares held within
the group (42) (51) (48)
Balance at end of period 2, 773 3 , 285 3, 042
11. Retained earnings and other reserves
Foreign
Non- currency
Retained distributable translation
earnings reserves reserve
SA Rand million
Balance at December 2006 (214) 138 436
Loss attributable to equity
shareholders (150)
Dividends (670)
Net loss on cash flow hedges
removed from
equity and reported in gold sales
Net loss on cash flow hedges
Deferred taxation on cash flow hedges
Gain on available-for-sale
financial assets
Deferred taxation on available-
for-sale financial
assets
Share-based payment for share
awards and BEE
transaction
Translation 1,061
Balance at March 2007 (1,034) 138 1,497
Balance at December 2007 (5,524) 138 338
Deferred taxation rate change
Loss attributable to equity
shareholders (3, 812)
Dividends (148)
Transfers to foreign currency
translation reserve (12) 12
Net loss on cash flow hedges
removed from equity
and reported in gold sales
Net loss on cash flow hedges
Hedge ineffectiveness
Deferred taxation on cash flow
hedges and hedge
ineffectiveness
Loss on available-for-sale
financial assets
Deferred taxation on available-
for-sale financial
assets
Share-based payment for share
awards and BEE transaction
Translation 4,697
Balance at March 2008 (9,496) 138 5,047
Other
Actuarial comprehen-
gains sive
(losses) income Total
SA Rand million
Balance at December 2006 (45) (1,503) (1, 188)
Loss attributable to equity
shareholders (150)
Dividends (670)
Net loss on cash flow hedges removed
from equity and reported in gold sales 211 211
Net loss on cash flow hedges (301) (301)
Deferred taxation on cash flow hedges 64 64
Gain on available-for-sale
financial assets 24 24
Deferred taxation on available-for
-sale financial assets 1 1
Share-based payment for share awards
and BEE
transaction 61 61
Translation (74) 987
Balance at March 2007 (45) (1,517) (961)
Balance at December 2007 (108) (1,011) (6,167)
Deferred taxation rate change (3) (3)
Loss attributable to equity
shareholders (3, 812)
Dividends (148)
Transfers to foreign currency
translation reserve -
Net loss on cash flow hedges removed
from equity
and reported in gold sales 488 488
Net loss on cash flow hedges (822) (822)
Hedge ineffectiveness 13 13
Deferred taxation on cash flow hedges
and hedge
ineffectiveness 92 92
Loss on available-for-sale
financial assets (73) (73)
Deferred taxation on available-for
-sale financial assets 17 17
Share-based payment for share awards
and BEE transaction 73 73
Translation (142) 4,555
Balance at March 2008 (111) (1,365) (5,787)
Rounding of figures may result in computational discrepancies.
11. Retained earnings and other reserves cont.
Foreign
Non- currency
Retained distributable translation
earnings reserves reserve
US Dollar million
Balance at December 2006 (209) 20 241
Profit attributable to equity
shareholders 19
Dividends (90)
Net loss on cash flow hedges
removed from
equity and reported in gold sales
Net loss on cash flow hedges
Deferred taxation on cash flow
hedges
Gain on available-for-sale
financial assets
Deferred taxation on available-
for-sale financial
assets
Share-based payment for share
awards and BEE
transaction
Translation (1) 103
Balance at March 2007 (280) 19 344
Balance at December 2007 (1,020) 20 258
Deferred taxation rate change
Loss attributable to equity
shareholders (142)
Dividends (18)
Transfers to foreign currency
translation reserve (2) 2
Net loss on cash flow hedges
removed from equity and reported
in gold sales
Net loss on cash flow hedges
Hedge ineffectiveness
Deferred taxation on cash flow
hedges and hedge
ineffectiveness
Loss on available-for-sale
financial assets
Deferred taxation on
available-for-sale financial assets
Share-based payment for share
awards and BEE transaction
Translation (3) 372
Balance at March 2008 (1,182) 17 632
Other
Actuarial Comprehen-
gains sive
(losses) income Total
US Dollar million
Balance at December 2006 (6) (215) (169)
Profit attributable to equity shareholders 19
Dividends (90)
Net loss on cash flow hedges removed from
equity and reported in gold sales 31 31
Net loss on cash flow hedges (41) (41)
Deferred taxation on cash flow hedges 9 9
Gain on available-for-sale financial assets 3 3
Deferred taxation on available-for
-sale financial assets - -
Share-based payment for share awards and
BEE transaction 7 7
Translation (2) 100
Balance at March 2007 (6) (208) (131)
Balance at December 2007 (16) (148) (906)
Deferred taxation rate change -
Loss attributable to equity shareholders (142)
Dividends (18)
Transfers to foreign currency translation reserve -
Net loss on cash flow hedges removed
from equity and reported in gold sales 65 65
Net loss on cash flow hedges (109) (109)
Hedge ineffectiveness 2 2
Deferred taxation on cash flow hedges and hedge
ineffectiveness 12 12
Loss on available-for-sale financial assets (9) (9)
Deferred taxation on available-for-sale
financial assets 2 2
Share-based payment for share awards and
BEE transaction 10 10
Translation 3 6 378
Balance at March 2008 (13) (169) (715)
12. Minority interests
As at
Mar Dec Mar
2008 2007 2007
Unaudited Audited Unaudited
SA Rand million
Balance at beginning of year 429 436 436
Profit for the period 90 222 56
Dividends paid (4) (131) (25)
Acquisition of minority
interest (1) - (91) -
Net loss on cash flow hedges
removed from
equity and reported in gold sales 6 14 4
Net loss on cash flow hedges (5) (12) (3)
Translation 60 (9) 13
Balance at end of period 576 429 481
As at
Mar Dec Mar
2008 2007 2007
Unaudited Audited Unaudited
US Dollar million
Balance at beginning of year 63 62 62
Profit for the period 11 32 8
Dividends paid (1) (19) (4)
Acquisition of minority
interest (1) - (13) -
Net loss on cash flow hedges
removed from
equity and reported in gold sales 1 2 1
Net loss on cash flow hedges (1) (2) (1)
Translation (2) 1 -
Balance at end of period 71 63 66
(1) With effect 1 September 2007, AngloGold Ashanti acquired the remaining 15%
minorities of Iduapriem.
Rounding of figures may result in computational discrepancies.
13. Exchange rates
Mar Dec Mar
2008 2007 2007
Unaudited Unaudited Unaudited
Rand/US dollar average for
the year to date 7.52 7.03 7.22
Rand/US dollar average for the quarter 7.52 6.76 7.22
Rand/US dollar closing 8.09 6.81 7.30
Rand/Australian dollar average for
the year to date 6.84 5.89 5.68
Rand/Australian dollar average for
the quarter 6.84 6.00 5.68
Rand/Australian dollar closing 7.40 5.98 5.90
BRL/US dollar average for the
year to date 1.74 1.95 2.11
BR L/US dollar average for the quarter 1.74 1.78 2.11
BRL/US dollar closing 1.74 1.78 2.15
14. Capital commitments
Mar Dec Mar
2008 2007 2007
Unaudited Audited Unaudited
SA Rand million
Orders placed and outstanding
on capital contracts
at the prevailing rate of
exchange 3,697 2, 968 4, 045
Mar Dec Mar
2008 2007 2007
Unaudited Audited Unaudited
US Dollar million
Orders placed and
outstanding on capital
contracts at the prevailing
rate of exchange 457 436 554
Liquidity and capital resources:
To service the above capital commitments and other operational requirements,
the group is dependent on existing cash resources, cash generated from
operations and borrowing facilities.
Cash generated from operations is subject to operational, market and other
risks. Distributions from operations may be subject to foreign investment and
exchange control laws and regulations and the quantity of foreign exchange
available in offshore countries. In addition distributions from joint ventures
are subject to the relevant board approval.
The credit facilities and other financing arrangements contain financial
covenants and other similar undertakings. To the extent that external
borrowings are required, the groups covenant performance indicates that
existing financing facilities will be available to meet the above commitments.
To the extent that any of the financing facilities mature in the near future,
the group believes that these facilities can be refinanced on similar terms to
those currently in place.
15. Contingent liabilities
AngloGold Ashanti`s material contingent liabilities at 31 March 2008 are
detailed below:
Groundwater pollution - South Africa - AngloGold Ashanti has identified a
number of groundwater pollution sites at its current operations in South
Africa, and has investigated a number of different technologies and
methodologies that could possibly be used to remediate the pollution plumes.
The viability of the suggested remediation techniques in the local geological
formation in South Africa is however unknown. No sites have been remediated and
present research and development work is focused on several pilot projects to
find a solution that will in fact yield satisfactory results in South African
conditions. Subject to the technology being developed as a remediation
technique, no reliable estimate can be made for the obligation.
Provision of surety - South Africa - AngloGold Ashanti has provided sureties in
favour of a lender on a gold loan facility with its affiliate Oro Africa (Pty)
Ltd and one of its subsidiaries to a maximum value of R100m ($12m). The
suretyship agreements have a termination notice period of 90 days.
Sales tax on gold deliveries - Brazil - Mineracao Serra Grande S.A.(MSG), the
operator of the Crixas mine in Brazil, has received two tax assessments from
the State of Goias related to payments of sales taxes on gold deliveries for
export, one for the period between February 2004 and June 2005 and the other
for the period between July 2005 and May 2006. The tax authorities maintain
that whenever a taxpayer exports gold mined in the state of Goias, through a
branch located in a different Brazilian State, it must obtain an authorisation
from the Goias State Treasury by means of a Special Regime Agreement (Termo de
Acordo re Regime Especial - TARE). The Serra Grande operation is co -owned with
Kinross Gold Corporation. AngloGold Ashanti Brasil Mineracao Ltda. manages the
operation and its attributable share of the first assessment is approximately
$41m. Although MSG requested the TARE in early 2004, the TARE, which authorised
the remittance of gold to the company`s branch in Minas Gerais specifically for
export purposes, was only granted and executed in May 2006.
In November 2006 the administrative council`s second chamber ruled in favour of
Serra Grande and fully cancelled the tax liability related to the first period.
The State of Goias has appealed to the full board of the State of Goias tax
administrative council. The second assessment was issued by the State of Goias
in October 2006 on the same grounds as the first one, and the attributable
share of the assessment is approximately $2 5m. The company believes both
assessments are in violation of Federal legislation on sales taxes.
VAT Disputes - Brazil - MSG received a tax assessment in October 2003 from the
State of Minas Gerais related to sales taxes on gold allegedly returned from
the branch in Minas Gerais to the company head office in the State of Goias.
The tax administrators rejected the company`s appeal against the assessment.
The company is now discussing the case at the judicial sphere. The company`s
attributable share of the assessment is approximately $8m.
Tax Disputes - Brazil - Morro Velho and AngloGold Ashanti Brasil Mineracao are
involved in disputes with tax authorities. These disputes involve eleven
federal tax assessments including income tax, social contributions and annual
property tax based on ownership of properties outside of urban perimeters
(ITR). The amount involved is approximately $9m.
16. Concentration of risk
There is a concentration of risk in respect of reimbursable value added tax and
fuel duties from the Malian government:
' Reimbursable value added tax due from the Malian government amounts to an
attributable $47m at 31 March 2008 (31 December 2007: attributable $42m). The
last audited value added tax return was for the period ended 31 March 2007 and
at the balance sheet date an attributable $24m was still outstanding and $23m
is still subject to audit. The accounting processes for the unaudited amount
are in accordance with the processes advised by the Malian government in terms
of the previous audits.
' Reimbursable fuel duties from the Malian government amounts to an
attributable $3m at 31 March 2008 (31 December 2007: attributable $7m). Fuel
duty refund claims are required to be submitted before 31 January of the
following year and are subject to authorisation by firstly the Department of
Mining and secondly the Custom and Excise authorities. An attributable $3m is
still subject to authorisation by the Customs and Excise authorities. The
accounting processes for the unauthorised amount are in accordance with the
processes advised by the Malian government in terms of the previous
authorisations. As from February 2006 all fuel duties have been exonerated.
The government of Mali is a shareholder in all the Malian entities. Management
is in negotiations with the Government of Mali to agree a protocol for the
repayment of the outstanding amounts. The amounts outstanding have been
discounted to their present value at a rate of 6.5%.
There is a concentration of risk in respect of reimbursable value added tax and
fuel duties from the Tanzanian government:
Reimbursable value added tax due from the Tanzanian government amounts to
$17m at 31 March 2008 (31 December 2007: $16m). The last audited value added
tax return was for the period ended 30 November 2007 and at the balance sheet
date $13m was still outstanding and $4m is still subject to audit. The
accounting processes for the unaudited amount are in accordance with the
processes advised by the Tanzanian government in terms of the previous audits.
The outstanding amounts have been discounted to their present value at a rate
of 7.8%.
Reimbursable fuel duties from the Tanzanian government amounts to $36m at 31
March 2008 (31 December 2007: $37m). Fuel duty claims are required to be
submitted after consumption of the related fuel and are subject to
authorisation by the Customs and Excise authorities. Claims for refund of fuel
duties amounting to $17m have been lodged with the Customs and Excise
authorities, which are still outstanding, whilst claims for refund of $19m have
not yet been submitted. The accounting processes for the unauthorised amount
are in accordance with the processes advised by the Tanzanian government in
terms of the previous authorisations. The outstanding amounts have been
discounted to their present value at a rate of 7.8%.
17. 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.
18. Borrowings
AngloGold Ashanti`s borrowings are interest bearing.
19. Announcements
On 14 February 2008, AngloGold Ashanti (AGA) announced that it had entered
into a binding memorandum of agreement (MOA) with B2Gold Corp. (B2Gold). The
MOA provides for the existing Colombian joint venture agreements between AGA
and B2Gold to be amended. B2Gold would also acquire from AGA, additional
interests in certain mineral properties in Colombia. In exchange, B2Gold would
issue to AGA, 25m common shares and 21.4m common share purchase warrants in
B2Gold.
On 4 April 2008, it was announced that following the stabilisation of Eskom
(the South African electricity supply body) power to South African operations
during the quarter, AGA forecasted the first quarter production to be
approximately 1.19Moz. The revised production outlook was around, 8% above
guidance provided at the fourth quarter. AGA had also fully delivered into
maturing hedge contracts during the quarter.
20. Dividend
Final Dividend No. 103 of 53 South African cents or 3.4848 UK pence or 6.53
cedis per share was paid to registered shareholders on 7 March 2008, while a
dividend o f 1.484 Australian cents per CHESS Depositary Interest (CDI) was
paid on the same day. On 10 March 2008, a dividend of 0.0653 cedis per Ghanaian
Depositary Share (GhDS) was paid to holders thereof. Each CDI represents
one-fifth of an ordinary share, and 100 GhDSs represents one ordinary share. A
dividend was paid to holders of American Depositary Receipts (ADRs) on 17 March
2008 at a rate of 6.606 US cents per American Depositary Share (ADS). Each ADS
represents one ordinary share.
In addition, directors declared Dividend No. E3 of 26.50 South African cents
per E ordinary share, payable to employees participating in the Bokamoso ESOP
and Izingwe Holdings (Proprietary) Limited. These dividends were paid on 7
March 2008.
21. Detailed report
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 M CUTIFANI
Chairman Chief Executive Officer
5 May 2008
Administrative information
ANGLO GOLD ASHANTI LIMITED
Registration No. 1944/017354/06
Incorporated in the Republic of South Africa
Share codes:
ISIN: ZAE000043485
JSE: ANG
LSE: AGD
NYSE: AU
ASX: AGG
G hSE (Shares): AGA
G hSE (GhDS): AAD
Euronext Paris: VA
Euronext Brussels: ANG
JSE Sponsor: UBS
Auditors: Ernst & Young Inc
Offices
Registered and Corporate
76 Jeppe Street
Newtown 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 4602
Fax: +61 8 9425 4662
Ghana
Gold House
Patrice Lumumba Road
(PO Box 2665)
Accra
Ghana
Telephone: +233 21 772190
Fax: +233 21 778155
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
E-mail: jane.kirton@corpserv.co.uk
Directors
Executive
M Cutifani
(Chief Executive Officer)
S Venkatakrishnan *
Non-Executive
R P Edey * (Chairman)
Dr T J Motlatsi (Deputy Chairman)
F B Arisman #
R E Bannerman ^
Mrs E le R Bradley
J H Mensah ^
W A Nairn
Prof W L Nkuhlu
S M Pityana
S R Thompson *
* British # American ^ Ghanaian
Australian
Officers
Managing Secretary: Ms Y Z Simelane
Company Secretary: Ms L Eatwell
Contacts
Charles Carter
Telephone: +27 11 637 6385
Fax: +27 11 637 6400
E-mail: cecarter@AngloGoldAshanti.com
Himesh Persotam
Telephone: +27 11 637 6647
Fax: +27 11 637 6400
E-mail:
hpersotam@AngloGoldAshanti.com
General E-mail enquiries
investors@AngloGoldAshanti.com
AngloGold Ashanti website
http://www.AngloGoldAshanti.com
Share Registrars
South Africa
Computershare Investor Services (Pty)
Limited
Ground Floor, 70 Marshall Street
Johannesburg 2001
(PO Box 61051, Marshalltown 2107)
South Africa
Telephone: 0861 100 950 ( in SA)
Fax: +27 11 688 5218
web.queries@computershare.co.za
United Kingdom
Computershare Investor Services PLC
P O Box 82
The Pavilions
Bridgwater Road
Bristol BS99 7NH
England
Telephone: +44 870 889 3177
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")
Investor Services , P O Box 11258
Church Street Station
New York, NY 10286- 1258
United States of America
Telephone: +1 888 269 2377 (Toll free
in USA) or +9 610 382 7836 outside
USA)
E-mail: shareowners@bankofny.com
Website: http://www.stockbny.com
Global BuyDIRECT SM
BoNY maintains a direct share purchase
and dividend reinvestment plan for
ANGLOGOLD ASHANTI.
Telephone: +1-888-BNY-ADRS
PRINTED BY INCE (PTY) LIMITED
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. AngloGold Ashanti undertakes no
obligation to update publicly or release any revisions to these forward-
looking statements to reflect events or circumstances after the date of the
annual report on Form 20- F or to reflect the occurrence of unanticipated
events. All subsequent written or oral forward- looking statements attributable
to AngloGold Ashanti or any person acting on its behalf are qualified by the
cautionary statements herein. For a discussion on such risk factors, refer to
AngloGold Ashanti`s annual report on Form 20-F for the year ended 31 December
2006 dated 06 July 2007, which was filed with the Securities and Exchange
Commission (SEC) on 09 July 2007.
Date: 06/05/2008 08:00:01 Supplied by www.sharenet.co.za
Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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