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AngloGold Ashanti - Anglogold Ashanti Report For The Quarter And Nine Months
Ended 30 September 2005
AngloGold Ashanti Limited
Incorporated in the Republic of South Africa
Registration Number: 1944/017354/06)
ISIN Number: ZAE000043485
JSE Share Code: ANG
("AngloGold Ashanti/Company")
Report to Shareholders
for the quarter and nine months ended 30 September 2005
Group results ...
* Gold production down 2% to 1.534Moz, due to anticipated decline in grades at
Sunrise Dam and Geita, and a reduction in heap leach ounces at Siguiri.
* Strong recovery in the South Africa region following the four-day strike,
which saw local production up 2% to 677,000oz and total cash costs 2% lower
at R59,053/kg.
* Group total cash costs increase 2% to $284/oz.
* Adjusted headline earnings decline to $1m, due in part to a negative $21m
fair value (non-cash) movement on the convertible bond.
Quarter Nine months
ended ended ended ended
Sept Jun Sept Sept
2005 2005 2005 2004
Restated
SA rand / Metric
Operating
review
Gold
Produced -kg/oz(000) 47,723 48,792 145,323 129,951
Price
received (1) -R/kg/$/oz 90,440 87,314 86,613 82,775
Total cash
costs -R/kg/$/oz 59,453 57,351 57,177 54,663
Total
production
costs -R/kg/$/oz 78,082 74,728 74,456 68,338
Financial
review
Gross profit -R/$million 243 931 1,429 1,582
Gross profit
adjusted
for the
effect of
unrealised
non-
hedge
derivatives
(2) -R/$million 678 765 2,119 2,234
(Loss) profit
attributable
to equity
shareholders -R/$million (415) 566 201 493
Headline
(loss)
earnings -R/$million (384) 665 383 658
Headline
earnings
adjusted for
the effect of
unrealised
non-
hedge
derivatives
(3) -R/$million 9 604 1,078 1,072
Capital
expenditure -R/$million 1,385 1,068 3,317 2,583
(Loss)
earnings per
ordinary
share -
cents/share
Basic (157) 214 76 200
Diluted (156) 214 76 199
Headline (145) 251 145 266
Headline
earnings
adjusted
for the effect
of unrealised
non-
hedge
derivatives
(3) -cents/share 3 228 407 434
Dividends -cents/share 170 170
Quarter Nine months
ended ended ended ended
Sept Jun Sept Sept
2005 2005 2005 2004
Restated
US dollar / Imperial
Operating
review
Gold
Produced -kg/oz(000) 1,534 1,569 4,672 4,178
Price
received
(1) -R/kg/$/oz 433 422 427 393
Total cash
costs -R/kg/$/oz 284 278 282 260
Total
production
costs -R/kg/$/oz 373 363 367 325
Financial
review
Gross
profit -R/$million 29 154 240 239
Gross
profit
adjusted
for the
effect of
unrealised
non-
hedge
derivatives
(2) -R/$million 105 117 334 339
(Loss)
profit
attributable
to equity
shareholders -R/$million (73) 96 45 74
Headline
(loss)
earnings -R/$million (68) 112 75 99
Headline
earnings
adjusted
for
the effect
of
unrealised
non-
hedge
derivatives
(3) -R/$million 1 92 170 162
Capital
expenditure -R/$million 215 167 525 393
(Loss)
earnings
per
ordinary
share -
cents/share
Basic (28) 36 17 30
Diluted (28) 36 17 30
Headline (26) 42 28 40
Headline
earnings
adjusted
for the
effect
of
unrealised
non-
hedge
derivatives
(3) -cents/share - 35 64 66
Dividends -cents/share 26 26
Notes: 1. Price received includes realised non-hedge derivatives.
2. Refer to note 7 of Notes for the definition.
3. Refer to note 6 of Notes for the definition.
$ represents US dollar, unless otherwise stated.
Rounding of figures may result in computational discrepancies.
Operations at a glance
for the quarter ended 30 September 2005
Price received(1) Production
$/oz % oz(000) %
Variance(4) Variance(4)
Great Noligwa 452 4 170 (2)
TauTona 449 2 124 3
Mponeng 453 2 127 (1)
Kopanang 450 3 126 7
Morila(5) 443 3 69 3
Cripple Creek
& Victor 383 7 92 30
AngloGold
Ashanti Mineracao 422 1 65 7
Sunrise Dam 447 (7) 101 (23)
Cerro Vanguardia(5) 400 5 52 2
Geita 407 16 137 (17)
Sadiola(5) 439 3 44 2
Siguiri(5) 415 (3) 61 (24)
Serra Grande(5) 417 - 24 -
Navachab 440 3 21 17
Obuasi 412 (3) 98 (4)
Yatela(5) 438 2 21 (9)
Tau Lekoa 450 3 71 4
Savuka 450 2 36 9
Iduapriem(5) 411 (3) 44 10
Bibiani 430 1 28 (7)
Other 24 14
AngloGold Ashanti 433 3 1,534 (2)
Total cash costs Cash gross profit(2)
$/oz % $m %
Variance(4) Variance(4)
Great Noligwa 269 - 27 8
TauTona 259 7 21 (9)
Mponeng 272 (2) 19 (10)
Kopanang 254 (10) 19 12
Morila(5) 194 12 17 6
Cripple Creek
& Victor 231 2 15 25
AngloGold
Ashanti Mineracao 173 7 15 -
Sunrise Dam 323 31 12 (60)
Cerro Vanguardia(5) 202 18 12 -
Geita 353 7 9 200
Sadiola(5) 240 (6) 9 29
Siguiri(5) 310 46 7 (50)
Serra Grande(5) 159 4 5 (29)
Navachab 268 (26) 5 -
Obuasi 341 5 4 (20)
Yatela(5) 285 (5) 3 -
Tau Lekoa 374 (7) 3 -
Savuka 379 (18) 1 200
Iduapriem(5) 369 9 1 (75)
Bibiani 308 4 - (100)
Other - - 17 13
AngloGold Ashanti 284 2 221 (6)
Gross profit (loss)
adjusted for the
effect of
unrealised non-
hedge derivatives(3)
$m %
Variance(4)
Great Noligwa 21 -
TauTona 12 33
Mponeng 9 (18)
Kopanang 14 8
Morila(5) 7 (36)
Cripple Creek
& Victor 4 100
AngloGold
Ashanti Mineracao 12 9
Sunrise Dam 5 (76)
Cerro Vanguardia(5) 5 (29)
Geita (1) 89
Sadiola(5) 7 75
Siguiri(5) 1 (89)
Serra Grande(5) 4 (33)
Navachab 4 500
Obuasi (5) -
Yatela(5) 2 100
Tau Lekoa (2) -
Savuka - 100
Iduapriem(5) (2) (200)
Bibiani (4) (300)
Other 11 (10)
AngloGold Ashanti 105 (10)
1 Price received includes realised non-hedge derivatives.
2 Gross profit adjusted for the effect of unrealised non-hedge derivatives
plus amortisation of tangible and intangible assets, less non-cash revenues.
3 Refer to note 7 of Notes for the definition.
4 Variance September 2005 quarter on June 2005 quarter - increase (decrease).
5 Attributable.
Rounding of figures may result in computational discrepancies.
Financial and operating review
OVERVIEW OF THE QUARTER
AngloGold Ashanti recorded adjusted headline earnings of $1m for the third
quarter compared with adjusted headline earnings of $92m in the previous
quarter. At a financial level, the decline was due to the non-recurrence of
the $47m tax credit recorded in the previous quarter, together with a negative
$34m fair value (non-cash) movement on the convertible bond, which arose on
account of the share price appreciation and associated increased volatility
during the quarter. At an operating level, the adjusted headline earnings
reduction was primarily due to the anticipated decline in grades at Sunrise Dam
and Geita as well as a reduction in the heap leach ounces at Siguiri.
The loss attributable to equity shareholders amounted to $73m as compared to a
profit of $96m in the prior quarter. This is primarily as a result of the
same factors that drove the decrease in adjusted headline earnings referred to
above and an unrealised non-hedge derivative loss relating to the negative
marked-to-market movement of the hedge book following the rally in the gold
price, as compared to the gain recorded in the previous quarter.
Production declined 2% quarter-on-quarter to 1.534Moz. As previously noted, the
production decline at Sunrise Dam was due to decreasing grades, as mining moves
to the lower-grade northern regions of the pit and the high-grade stockpiles
are depleted. In East Africa, production at Geita was down 28,000oz as a result
of declining grades in the current cut-back and delayed access to the
higher-grade ore of the next mining phase in the Nyakanga pit, which is
scheduled for early third quarter 2006. In West Africa, production at Siguiri
was down 19,000oz following the exceptionally high production level of last
quarter and the impact of pipeline failures at the CIP plant. Obuasi"s
production of 98,000oz was 4% lower than that of the previous quarter,
reflecting the continue adverse impact of limited mining flexibility and
developed reserves.
Set against these negative production impacts, this quarter saw an improved
performance from the South Africa region. Gold production was up 2% to
677,000oz, with total cash costs 2% lower at R59,053/kg. In the context of the
four-day strike action during the quarter, this represents a commendable
performance.
In respect of the international operations, CC&V"s production improved 30% to
92,000oz due to more favourable leach cycle timing and the recovery of ounces
placed earlier in the year. Production and cost performance of the South
American assets remained fairly constant quarter-on-quarter.
In respect of the company"s ongoing cost management strategy, savings arising
from improved efficiencies were negated by the inflationary increases that were
primarily evident at the South African operations in respect of the wage
increases reflected in the current quarter, together with the continuing
negative cost impacts of higher oil and mining consumables prices. These
factors, together with the drop in production by 2%, increased total cash costs
by 2% to $284/oz.
In the context of these ongoing cost pressures and in order to further maximise
synergies between the African operations, the company has begun a process of
further rationalising management structures on the continent. Going forward,
the eight open-pit mines will report to Fritz Neethling, while the eight
underground mines will report to Robbie Lazare. This will ensure that technical
skills are appropriately matched to orebody type. Daniel Owiredu will manage
the political, social and logistical issues of the African countries in which
the company operates. The current management structures in Africa are therefore
being rationalised, from three to two, supported by a small technical team, all
under the leadership of Neville Nicolau.
Capital expenditure for the quarter amounted to $215m, which includes stay-in
business capex of $149m.
Looking ahead, production for the fourth quarter is estimated to be 1.504Moz at
a total cash cost of $282/oz, assuming the following exchange rates to the US
dollar: R6.60; A$0.75; BRL2.25 and Argentinean peso 2.97.Capital expenditure is
estimated at $206m and will be managed in line with profitability and cash flow.
Notes:
* All references to price received includes realised non-hedge derivatives.
* 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.
Exploration
Exploration expenditure amounted to $25m ($12m expensed, $13m capitalised)
during the third quarter, compared to $19m ($12m expensed, $7m capitalised) in
the previous quarter. Exploration expenditure at existing mines was $16m.
At Obuasi in Ghana, drilling commenced at the first two of six surface diamond
holes of the Obuasi Ultra Deeps project.
At Sadiola in Mali, in-fill drilling at FN2, located north of the main pit,
verified the continuity of mineralisation, while drilling at FE3S closed off
the mineralisation associated with the NNE striking structures that splay off
the main FE trend. Work on the Deep Sulphide pre-feasibility study continued
and focused primarily on comminution and metallurgical test work.
At Siguiri in Guinea, resource delineation drilling at the Kintinian prospect,
located 5km north of the plant, is in progress. Additional mineralisation has
been identified in two zones immediately northwest of the nearby Kintinian
village.
In Tanzania at Geita, resource in-fill drilling on the down-dip extensions at
the Geita Hill North East Extension zone continues to expand the mineralised
envelope down-dip and along strike. Definition and follow-up drilling is in
progress to the south of the Nyankanga pit along the strike extension of
previously delineated mineralisation.
In Brazil, drilling at Corrego do Sitio continued to expand the mineral
resource at the Carvoaria Velha, Laranjeiras, Mutuca and Cachorro Bravo
orebodies.Underground development was reinitiated at Cachorro Bravo on the 200
ore horizon, 10 metres below the previous development.Thus far, 64 metres of
development has yielded an average face grade of 12.8g/t over a mean horizontal
width of 2.9 metres.
Greenfields exploration activities are underway in the DRC, Alaska, Australia,
Colombia, Tanzania, China, Mongolia and Russia, with an expensed expenditure of
$9m for the quarter, compared with $10m in the previous quarter.
At the Kimin project in the DRC, the drilling programme at Adidi/D7 Kanga is
now 70% complete and continues to confirm historical tonnage and grade
estimates. An airborne geophysical survey is planned for the fourth quarter
over the 10km by 15km Mongbwalu Ridge area. Drilling at the Kimin project was
interrupted for a three-week period from the beginning of October, as a result
of instability in Mongbwalu after FARDC (Congolese Army) troops were deployed
to the area.This deployment is now complete and exploration activities have
resumed. The presence of FARDC troops is expected to further stabilise the
Mongbwalu region.
In Alaska, drill results from the Lost Mine South project near Pogo indicate
that the broad, near- surface, low-grade zone discovered earlier this year
transitions into a high-grade vein system at depth. Significant intersections
include 3.2m at 16.3g/t at a depth of 121.9m; 3.4m at 21.7g/t at a depth of
143m; and 1.5m at 49.3g/t at a depth of 171.8m. Drilling at the Terra project,
situated approximately 200km west of Anchorage, has defined multiple narrow,
high-grade veins in an overall system that appears to be over 8km in length.
Further field work is planned.
Regional systematic exploration continued in six areas in Colombia. Further
target definition and follow-up work is planned and a number of projects are
now drill-ready.
In Australia, at the Tropicana JV, encouraging drill results have been obtained
at the Tropicana, Rusty Nail and Kamikaze prospects.Mineralisation at Tropicana
now extends over a strike length of approximately 800 metres, with widths of 20
to 40 metres and grades of 1.5 to 8g/t over mineable widths. A number of
additional geochemical anomalies that require more follow-up have been
identified within 30km of the Tropicana Prospect.
Review of the gold market
The third quarter of 2005 saw new levels of investor and speculator interest in
gold and a strong break in gold price behaviour from its linkage over the past
four years to the US dollar/euro exchange rate.
Although the average spot price of gold for the quarter of US$439/oz was only
$12/oz or some 3% higher than the average price for the metal during the first
half of the year, the average figure does not reflect the extent of activity in
gold this quarter. The price saw a range of $57/oz during this quarter, the
second highest quarterly price range in five years. Much of this activity came
during the latter part of the quarter, and the spot price has strengthened by
almost 15% since late July, to touch $480/oz in early October. This is the
highest gold spot price seen in seventeen years, and the market now is looking
to the figure of US$500/oz last seen in December 1987.
See Graph 1: US $ Gold Price 1979 - 2005.
Although the tone of the rand against the US dollar was generally weaker, the
average exchange rate of R6.48 to the dollar was little changed from the
average of R6.40 for the previous quarter. This translated to an average local
gold price of close to R92,000/kg for the quarter which was some 4% higher than
the average local price in the second quarter of the year.
Gold
The divergence of the gold price from a strong inverse correlation to the
movement in the US dollar exchange rate against the euro, continued much more
strongly during the period under review. Whilst the US dollar has traded
sideways for the last five months, the gold price has moved up strongly and
steadily for much of the third quarter. See Graph 2 : US$/Euro and US$ Gold
Price Indexed, 2004 - 2005.
Whilst for a time this looked like simply a re-rating or re-pricing of the gold
market against a dollar/euro denominator, this interpretation becomes
inadequate during September and October, when the gold price has moved $40/oz
higher even whilst the dollar strengthened from $1.25 to $1.19 to the euro .
The result of this divergence has been a material increase in the gold price in
non-US dollar terms for the first time in the current gold price cycle.
After averaging some 325/oz for the past four years, the gold price reached
400/oz early in October. See Graph 3: Euro Gold Price 2001 - 2005.
A number of circumstances outside of the currency markets have encouraged an
interest in gold. Probably the most direct influence on sentiment has come from
the oil market, where supply dislocation caused by hurricane damage in the USA
pushed the spot price of benchmark West Texas Intermediate up by $10/barrel to
a record price of $70/barrel in early September.The possible impact of this oil
price increase on inflation and on global economic growth became the subject of
widespread comment. This, in turn, translated to buying interest in gold, and
there was some correlation between gold buying and oil price increases during
August and early September.Sentiment was further encouraged by positive news
during the quarter about physical demand for gold in important markets during
the first half of 2005.This renewed interest in gold became self-fulfilling,
and rising gold prices justified further interest and speculative buying in the
gold market. This continued interest has kept the gold price rising during the
past four weeks, even as the oil price has fallen back close to its
pre-hurricane Katrina levels .
The expectation of rising inflation rates is one commonly in use today to
justify higher gold prices. However, there is little conclusive evidence of an
increased inflation threat, notwithstanding base metal, commodity and energy
price increases in recent years. Whilst headline inflation in the USA in
September moved sharply upwards due to the impact of higher pump prices for
gasoline during the period of hurricane- induced supply dislocation, core
inflation in the US remains a little over 2% p.a. Most recent core inflation
figures in Europe remain below 2% p.a.
Nevertheless, the impact of higher oil prices has introduced a sense of
uncertainty about the health of the global economy, and this uncertainty
continues to encourage interest in gold amongst both investors and speculators.
In order to measure the extent of this investor interest in the metal, one
needs to look both at the New York Comex open interest, and at the latest gold
Exchange Traded Fund (ETF) holdings. The Comex continued to be the most direct
predictor of gold price movement, and the spot price of metal tracked the
rising buying interest on that exchange. The net open position recorded weekly
on the Comex matched last year"s record level in April 2004 at around 22Moz net
long (685t net long) and most certainly exceeded that level intra-week in early
October. However, to the net open Comex interest must be added aggregate
investor holdings in gold ETFs, which amounted at the end of September to over
9Moz or 280t of gold. These ETF holdings have been accumulated mostly during
the past nine months, and predominantly in the New York Stock Exchange
streetTRACKS fund launched in late 2004. The combined Comex and ETF holdings
thus exceed 31Moz, or almost 1,000t of gold in net investment and speculative
positions in developed markets.
Looking to the future, there appears to be sufficient uncertainty in financial
markets and in the global economy to sustain the current levels of interest in
gold.
Physical Demand
Reports of physical demand for gold during the first half of 2005 have been
very positive, with a powerful recovery in many markets from the slippage in
offtake between 2000 and 2003.Jewellery demand was particularly buoyant in
India and in the Middle East. In India, general economic growth has translated
to better offtake on a wide front and it would appear that that market has
adjusted to higher and more volatile gold prices. Improved offtake in the
Middle East has come primarily on the back of increased oil revenues in that
region. Both Turkey and China also show growth. As has been the case for some
time, however, the volume of offtake of gold in jewellery in the developed
markets of the USA, Europe and Japan remains disappointing.
Currencies
After gaining strongly against the euro during the second quarter of 2005, the
US dollar traded during the third quarter in a range between $1.20 and $1.25
against the euro.
As noted above in respect of the net delta size of the hedge position, the
increased negative value of the hedge was due to its valuation against the
quarter-end spot price of $465.60/oz compared with its valuation at the end of
June at a spot price $30/oz lower. The marked-to-market value of the hedge at
21 October 2005 at a spot price of $463/oz was negative $1.342m.
The sideways movement in the dollar/euro exchange rate seems to reflect an
equilibrium in sentiment in foreign exchange markets in respect of the current
state of the US and European economies. Whilst in the USA, the challenge
presented by the federal budget deficit and the record levels of trade deficit
remains unsolved, the US economy continues to grow more rapidly than any other
part of the developed world, and the US trade deficits continue to be funded by
capital inflows. Similarly, in Europe, the negative effects of political
uncertainty induced by the inconclusive parliamentary election in Germany and
by the rejection in France and Holland earlier this year of the proposed new
constitution for the European Union, have been moderated by encouraging
performance by the German economy.
Even though the recovery of the dollar earlier this year seemed to signal an
end to the three years of correction in the US currency against the euro, most
market commentators continue to expect renewed weakening by the US currency
before the end of this year. Should this happen, this would most likely
encourage further interest in gold.
In South Africa, interest rates have remained unchanged, and there has been
little news to influence the value of the local currency one way or another.
Nevertheless, the quarter has seen a slightly weaker rand against the US
dollar, due to the stable to stronger state of the US currency.
Hedging
As at 30 September 2005, the net delta hedge position of AngloGold Ashanti was
10.68Moz or 332t, valued at the spot gold price at the end of the quarter of
$465.60/oz. This net delta position reflects an increase of some 360,000oz or
11t in the net delta size of the AngloGold Ashanti hedge compared with the
position at the end of the previous quarter. The net increase quarter-on-
quarter is due entirely to a higher net volume of open options positions valued
against a quarter- end spot price which was $30/oz higher than the spot price
of $434.50/oz at which the hedge was measured at the end of June 2005.
The marked-to-market value of the hedge position as at 30 September 2005 was
negative $1.349bn, compared with the value at 30 June of negative $1.032bn.
The price received by the company for the quarter under review was $433/oz,
compared with an average spot price for the period of $439/oz. The company
continues to manage its hedge positions actively, and to reduce overall levels
of pricing commitments in respect of future gold production by the company.
As noted above in respect of the net delta size of the hedge position, the
increased negative value of the hedge was due to its valuation against the
quarter-end spot price of $465.60/oz compared with its valuation at the end of
June at a spot price $30/oz lower. The marked-to-market value of the hedge at
21 October 2005 at a spot price of $463/oz was negative $1.342bn.
The price received by the company for the quarter under review was $433/oz,
compared with an average spot price for the period of $439/oz. The company
continues to manage its hedge positions actively, and to reduce overall levels
of pricing commitments in respect of future gold production by the company.
See press release for graphs
Hedge position
As at 30 September 2005, 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 10.68Moz or 332t (at 30
June 2005:10.32Moz or 321t).
The marked-to-market value of all hedge transactions making up the hedge
positions was a negative $1.349bn (negative R8.59bn) as at 30 September 2005
(as at 30 June 2005: $1.032bn or R6.94bn). This value at 30 September 2005 was
based on a gold price of $465.60/oz, exchange rates of R/$6.3700 and A$/$0.7594
and the prevailing market interest rates and volatilities at that date.
As at 25 October 2005, the marked-to-market value of the hedge book was a
negative $1.370bn (negative R9.085bn), based on a gold price of $465.40/oz and
exchange rates of R/$6.63 and A$/$0.7494 and the prevailing market interest
rates and volatilities at the time.
These marked-to-market valuations are not predictive of the future value of the
hedge position, nor of future impact on the revenue of the company. The
valuation represents the cost of buying all hedge contracts at the time of
valuation, at market prices and rates available at the time.
Year 2005 2006 2007
DOLLAR GOLD
Forward contracts Amount (kg) 4,742 15,954 31,580
US$/oz $302 $317 $346
Put options purchased Amount (kg) 1,893 8,592 1,455
US$/oz $318 $345 $292
Put options sold Amount (kg) 467 4,354
US$/oz $447 $339
Call options purchased Amount (kg) 5,930 11,211 6,357
US$/oz $329 $333 $344
Call options sold Amount (kg) 8,526 31,224 28,934
US$/oz $352 $381 $378
RAND GOLD
Forward contracts Amount (kg) 2,805 2,449
Rand per kg R90,783 R97,520
Put options purchased Amount (kg) 1,875
Rand per kg R93,602
Put options sold Amount (kg) 2,706 1,400
Rand per kg R90,805 R88,414
Call options purchased Amount (kg)
Rand per kg
Call options sold Amount (kg) 5,568 3,306 311
Rand per kg R93,739 R102,447 R108,123
A DOLLAR GOLD
Forward contracts Amount (kg) 566 *1,555 6,843
A$ per oz A$705 A$556 A$651
Put options purchased Amount (kg)
A$ per oz
Put options sold Amount (kg)
A$ per oz
Call options purchased Amount (kg) 3,110 3,732
A$ per oz A$673 A$668
Call options sold Amount (kg)
A$ per oz
Delta (kg) 14,019 31,731 58,685
** Total net gold:
Delta (oz) 450,721 1,020,174 1,886,764
Year 2008 2009 2010-2014
DOLLAR GOLD
Forward contracts Amount (kg) 30,076 26,288 53,566
US$/oz $365 $380 $402
Put options purchased Amount (kg)
US$/oz
Put options sold Amount (kg) 855 1,882 9,409
US$/oz $390 $400 $430
Call options purchased Amount (kg)
US$/oz
Call options sold Amount (kg) 28,890 27,585 82,919
US$/oz $383 $410 $471
RAND GOLD
Forward contracts Amount (kg) 933
Rand per kg R116,335
Put options purchased Amount (kg)
Rand per kg
Put options sold Amount (kg)
Rand per kg
Call options purchased Amount (kg)
Rand per kg
Call options sold Amount (kg) 2,986 5,972
Rand per kg R202,054 R223,756
A DOLLAR GOLD
Forward contracts Amount (kg) 2,177 3,390 3,110
A$ per oz A$669 A$663 A$686
Put options purchased Amount (kg)
A$ per oz
Put options sold Amount (kg)
A$ per oz
Call options purchased Amount (kg) 3,110 1,244 3,110
A$ per oz A$660 A$694 A$712
Call options sold Amount (kg)
A$ per oz
Delta (kg) 55,888 53,092 118,768
** Total net gold:
Delta (oz) 1,796,838 1,706,945 3,818,474
Year Total
DOLLAR GOLD
Forward contracts Amount (kg) 162,206
US$/oz $369
Put options purchased Amount (kg) 11,940
US$/oz $334
Put options sold Amount (kg) 16,967
US$/oz $402
Call options purchased Amount (kg) 23,498
US$/oz $335
Call options sold Amount (kg) 208,078
US$/oz $419
RAND GOLD
Forward contracts Amount (kg) 6,187
Rand per kg R97,303
Put options purchased Amount (kg) 1,875
Rand per kg R93,602
Put options sold Amount (kg) 4,106
Rand per kg R89,990
Call options purchased Amount (kg)
Rand per kg
Call options sold Amount (kg) 18,142
Rand per kg R156,197
A DOLLAR GOLD
Forward contracts Amount (kg) 14,531
A$ per oz A$676
Put options purchased Amount (kg)
A$ per oz
Put options sold Amount (kg)
A$ per oz
Call options purchased Amount (kg) 14,308
A$ per oz A$683
Call options sold Amount (kg)
A$ per oz
Delta (kg) 332,183
** Total net gold:
Delta (oz) 10,679,916
* Long position.
** 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 30 September 2005.
Rounding of figures may result in computational discrepancies.
Year 2005 2006 2007
DOLLAR SILVER
Forward contracts Amount (kg)
$ per oz
Put options purchased Amount (kg) 10,886 43,545 43,545
$ per oz $7.11 $7.11 $7.40
Put options sold Amount (kg) 10,886 43,545 43,545
$ per oz $6.02 $6.02 $5.93
Call options purchased Amount (kg)
$ per oz
Call options sold Amount (kg) 10,886 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) 24,883 122,859
$ per oz $7.40 $7.27
Put options sold Amount (kg) 24,883 122,859
$ per oz $5.75 $5.93
Call options purchased Amount (kg)
$ per oz
Call options sold Amount (kg) 24,883 122,859
$ per oz $8.00 $8.19
The following table indicates the group"s currency hedge position at
30 September 2005
Year 2005 2006 2007
RAND DOLLAR (000)
Forward contracts Amount ($) 7,369
US$/R R6.45
Put options purchased Amount ($) 30,000
US$/R R7.00
Put options sold Amount ($) 30,000
US$/R R6.66
Call options purchased Amount ($)
US $ / R
Call options sold Amount ($) 60,000
US$/R R6.97
A DOLLAR (000)
Forward contracts Amount ($) 15,970 39,222
A$/US$ A$0.61 A$0.75
Put options purchased Amount ($)
A$/US$
Put options sold Amount ($)
A$/US$
Call options purchased Amount ($)
A$/US$
Call options sold Amount ($) 30,000 20,000
A$/US$ A$0.75 A$0.74
BRAZILIAN REAL (000)
Forward contracts Amount ($) 6,000 24,000 4,000
US$/BRL BRL2.98 BRL3.18 BRL3.31
Put options purchased Amount ($)
US$/BRL
Put options sold Amount ($)
US$/BRL
Call options purchased Amount ($)
US$/BRL
Call options sold Amount ($) 5,000 20,000
US$/BRL BRL3.08 BRL3.29
Year 2008 2009 2010-2014 Total
RAND DOLLAR (000)
Forward contracts Amount ($) 7,369
US$/R R6.45
Put options purchased Amount ($) 30,000
US$/R R7.00
Put options sold Amount ($) 30,000
US$/R R6.66
Call options purchased Amount ($)
US $ / R
Call options sold Amount ($) 60,000
US$/R R6.97
A DOLLAR (000)
Forward contracts Amount ($) 55,192
A$/US$ A$0.70
Put options purchased Amount ($)
A$/US$
Put options sold Amount ($)
A$/US$
Call options purchased Amount ($)
A$/US$
Call options sold Amount ($) 50,000
A$/US$ A$0.75
BRAZILIAN REAL (000)
Forward contracts Amount ($) 34,000
US$/BRL BRL3.16
Put options purchased Amount ($)
US$/BRL
Put options sold Amount ($)
US$/BRL
Call options purchased Amount ($)
US$/BRL
Call options sold Amount ($) 25,000
US$/BRL BRL3.25
Rounding of figures may result in computational discrepancies.
Group income statement
Quarter Quarter
ended ended
September June
2005 2005
SA Rand million Notes Unaudited Unaudited
Revenue 2 4,332 4,563
Gold income 4,151 4,404
Cost of sales 3 (3,748) (3,620)
Non-hedge derivatives (161) 147
Gross Profit 243 931
Corporate administration and other
expenses (109) (103)
Market development costs (21) (21)
Exploration costs (81) (78)
Amortisation of intangible assets - -
Impairment of tangible assets - (45)
Contract termination expenditure at Geita (55) -
Other operating expenses (48) (38)
Other operating income 12 8
Operating (loss) profit (60) 654
Interest receivable 34 39
Other net income (expense) 3 (4)
Profit on disposal of assets and
subsidiaries 11 -
Finance costs and unwinding of
decommissioning
and restoration obligations (166) (159)
Fair value adjustment on option component
of convertible bond (135) 79
Fair value gains (losses) on interest
rate swaps - 11
Share of associates (loss) profit (6) 2
(Loss) profit before taxation (319) 621
Taxation 4 (10) 62
(Loss) profit after taxation (329) 683
Discontinued operations 9 (42) (69)
(372) 614
Allocated as follows
Equity Shareholders (415) 566
Minority interest 43 48
(372) 614
Basic (loss) earnings per ordinary share
(cents)
(Loss) profit from continuing
operations(a) (141) 240
Loss from discontinued operations(a) (16) (26)
(Loss) profit (157) 214
Diluted (loss) earnings per ordinary
share (cents)
(Loss) profit from continuing
operations(b) (140) 240
Loss from discontinued operations(b) (16) (26)
(Loss) profit (156) 214
Dividends c
- Rm
- cents per share
Quarter Nine months Nine months
ended ended ended
September September September
2004 2005 2004
Restated Restated
SA Rand million Unaudited Unaudited Unaudited
Revenue 4,232 12,911 11,327
Gold income 4,041 12,413 10,734
Cost of sales (3,502) (10,784) (8,840)
Non-hedge derivatives 72 (201) (312)
Gross Profit 611 1,429 1,582
Corporate administration and
other expenses (84) (310) (265)
Market development costs (30) (63) (78)
Exploration costs (75) (219) (206)
Amortisation of intangible assets (48) - (153)
Impairment of tangible assets (8) (45) (8)
Contract termination expenditure
at Geita - (55) -
Other operating expenses (17) (111) (45)
Other operating income 14 24 14
Operating (loss) profit 363 650 841
Interest receivable 72 127 244
Other net income (expense) 13 6 5
Profit on disposal of assets and
subsidiaries 36 9 63
Finance costs and unwinding of
decommissioning
and restoration obligations (139) (474) (420)
Fair value adjustment on option
component of convertible bond (181) 59 67
Fair value gains (losses) on
interest rate swaps 24 (5) (10)
Share of associates (loss) profit - (3) (1)
(Loss) profit before taxation 188 370 789
Taxation (75) 111 (137)
(Loss) profit after taxation 113 481 652
Discontinued operations (5) (163) (58)
108 318 594
Allocated as follows
Equity Shareholders 69 201 493
Minority interest 39 117 101
108 318 594
Basic (loss) earnings per
ordinary share (cents)
(Loss) profit from continuing
operations(a) 28 138 223
Loss from discontinued
operations(a) (2) (62) (23)
(Loss) profit 26 76 200
Diluted (loss) earnings per
ordinary share (cents)
(Loss) profit from continuing
operations(b) 28 137 222
Loss from discontinued
operations(b) (2) (61) (23)
(Loss) profit 26 76 199
Dividends c
- Rm 450 449
- cents per share 170 170
(a) Calculated on the basic weighted average number of ordinary shares.
(b) Calculated on the diluted weighted average number of ordinary shares.
(c) Dividends are translated at actual rates on date of payment.
Rounding of figures may result in computational discrepancies.
Group income statement
Quarter Quarter
ended ended
September June
2005 2005
US Dollar million Notes Unaudited Unaudited
Revenue 2 666 708
Gold income 638 684
Cost of sales 3 (576) (565)
Non-hedge derivatives (33) 35
Gross Profit 29 154
Corporate administration and other
expenses (17) (16)
Market development costs (3) (3)
Exploration costs (12) (12)
Amortisation of intangible assets - -
Impairment of tangible assets - (7)
Contract termination expenditure at Geita (9) -
Other operating expenses (7) (6)
Other operating income 2 1
Operating (loss) profit (18) 111
Interest receivable 5 6
Other net (expense) income - (1)
Profit on disposal of assets and
subsidiaries 1 -
Finance costs and unwinding of
decommissioning
and restoration obligations (26) (25)
Fair value adjustment on option component
of convertible bond (21) 13
Fair value gains (losses) on interest
rate swaps - 2
Share of associates (loss) profit (1) -
(Loss) profit before taxation (58) 107
Taxation 4 (2) 9
(Loss) profit after taxation (60) 116
Discontinued operations 9 (7) (12)
(67) 103
Allocated as follows
Equity Shareholders (73) 96
Minority interest 7 7
(67) 103
Basic (loss) earnings per ordinary share
(cents)
(Loss) profit from continuing
operations(a) (25) 41
Loss from discontinued operations(a) (3) (5)
(Loss) profit (28) 36
Diluted (loss) earnings per ordinary
share (cents)
(Loss) profit from continuing
operations(b) (25) 41
Loss from discontinued operations(b) (3) (5)
(Loss) profit (28) 36
Dividends c
- $m
- cents per share
Quarter Nine months Nine months
ended ended ended
September September September
2004 2005 2004
Restated Restated
US Dollar million Unaudited Unaudited Unaudited
Revenue 663 2,042 1,728
Gold income 633 1,964 1,637
Cost of sales (549) (1,709) (1,350)
Non-hedge derivatives 14 (15) (48)
Gross Profit 98 240 239
Corporate administration and
other expenses (13) (49) (40)
Market development costs (5) (10) (12)
Exploration costs (12) (35) (31)
Amortisation of intangible assets (7) - (23)
Impairment of tangible assets (1) (7) (1)
Contract termination expenditure
at Geita - (9) -
Other operating expenses (3) (18) (8)
Other operating income 2 4 2
Operating (loss) profit 59 117 126
Interest receivable 11 20 36
Other net (expense) income 4 1 2
Profit on disposal of assets and
subsidiaries 5 1 9
Finance costs and unwinding of
decommissioning
and restoration obligations (22) (75) (63)
Fair value adjustment on option
component of convertible bond (30) 11 9
Fair value gains (losses) on
interest rate swaps 3 (1) (1)
Share of associates (loss) profit - (1) -
(Loss) profit before taxation 30 74 118
Taxation (13) 17 (20)
(Loss) profit after taxation 17 90 98
Discontinued operations (1) (27) (8)
16 63 90
Allocated as follows
Equity Shareholders 9 45 74
Minority interest 6 18 16
16 63 90
Basic (loss) earnings per
ordinary share (cents)
(Loss) profit from continuing
operations(a) 4 27 33
Loss from discontinued
operations(a) - (10) (3)
(Loss) profit 3 17 30
Diluted (loss) earnings per
ordinary share (cents)
(Loss) profit from continuing
operations(b) 4 27 33
Loss from discontinued
operations(b) - (10) (3)
(Loss) profit 3 17 30
Dividends c
- $m 69 68
- cents per share 26 26
(a) Calculated on the basic weighted average number of ordinary shares.
(b) Calculated on the diluted weighted average number of ordinary shares.
(c) Dividends are translated at actual rates on date of payment.
Rounding of figures may result in computational discrepancies.
Group balance sheet
As at As at
September June
2005 2005
SA Rand million Notes Unaudited Unaudited
ASSETS
Non-current assets
Tangible assets 37,107 37,528
Intangible assets 2,602 2,727
Investments in associates 238 254
Investment properties 57 60
Other investments 582 550
Inventories 767 789
Derivatives 311 403
Deferred taxation 233 215
Other non-current assets 177 170
42,074 42,696
Current assets
Inventories 2,623 2,619
Trade and other receivables 1,593 2,025
Derivatives 3,162 3,053
Current portion of other non-current
assets 3 5
Cash and cash equivalents 1,555 1,835
8,936 9,537
Non-current assets held for sale 100 100
9,036 9,637
TOTAL ASSETS 51,110 52,333
EQUITY AND LIABILITIES
Equity
Ordinary share capital and premium 11 19,023 19,006
Retained earnings and other reserves 12 (360) 1,410
Shareholders" equity 18,663 20,416
Minority interests 13 375 401
19,038 20,817
Non-current liabilities
Borrowings 10,889 10,500
Provisions 2,822 2,729
Derivatives 2,096 2,130
Deferred taxation 7,954 8,231
23,761 23,590
Current liabilities
Trade and other payables 2,799 2,919
Current portion of borrowings 991 1,141
Derivatives 4,218 3,551
Taxation 304 315
8,311 7,926
Total liabilities 32,072 31,516
TOTAL EQUITY AND LIABILITIES 51,110 52,333
Net asset value - cents per share 7,049 7,715
As at As at
September December
2004 2004
Restated Restated
SA Rand million Unaudited Audited
ASSETS
Non-current assets
Tangible assets 35,450 33,195
Intangible assets 2,636 2,347
Investments in associates 42 43
Investment properties 45 44
Other investments 195 179
Inventories 142 124
Derivatives 796 1,055
Deferred taxation - -
Other non-current assets 324 487
39,630 37,474
Current assets
Inventories 2,531 2,363
Trade and other receivables 1,790 1,747
Derivatives 1,984 2,767
Current portion of other non-current assets 390 5
Cash and cash equivalents 2,846 1,758
9,541 8,640
Non-current assets held for sale - -
9,541 8,640
TOTAL ASSETS 49,171 46,114
EQUITY AND LIABILITIES
Equity
Ordinary share capital and premium 18,984 18,987
Retained earnings and other reserves 210 (1,200)
Shareholders" equity 19,194 17,787
Minority interests 397 327
19,591 18,114
Non-current liabilities
Borrowings 8,360 7,262
Provisions 2,162 2,339
Derivatives 3,330 3,032
Deferred taxation 8,406 7,542
22,258 20,175
Current liabilities
Trade and other payables 2,841 2,650
Current portion of borrowings 2,078 1,800
Derivatives 2,273 3,007
Taxation 130 368
7,322 7,825
Total liabilities 29,580 28,000
TOTAL EQUITY AND LIABILITIES 49,171 46,114
Net asset value - cents per share 7,258 6,726
Rounding of figures may result in computational discrepancies.
Group balance sheet
As at As at
September June
2005 2005
US Dollar million Notes Unaudited Unaudited
ASSETS
Non-current assets
Tangible assets 5,834 5,615
Intangible assets 409 408
Investments in associates 37 38
Investment properties 9 9
Other investments 91 82
Inventories 121 118
Derivatives 49 60
Deferred taxation 37 32
Other non-current assets 28 26
6,615 6,388
Current assets
Inventories 412 392
Trade and other receivables 250 303
Derivatives 497 457
Current portion of other non-current
assets - 1
Cash and cash equivalents 244 275
1,405 1,427
Non-current assets held for sale 16 15
1,421 1,442
TOTAL ASSETS 8,035 7,830
EQUITY AND LIABILITIES
Equity
Ordinary share capital and premium 11 2,991 2,843
Retained earnings and other reserves 12 (57) 211
Shareholders" equity 2,934 3,054
Minority interests 13 59 60
2,993 3,114
Non-current liabilities
Borrowings 1,712 1,571
Provisions 444 408
Derivatives 330 319
Deferred taxation 1,250 1,231
3,736 3,529
Current liabilities
Trade and other payables 440 437
Current portion of borrowings 156 171
Derivatives 663 531
Taxation 48 47
1,307 1,186
Total liabilities 5,042 4,715
8,035 7,830
TOTAL EQUITY AND LIABILITIES
Net asset value - cents per share 1,108 1,154
As at As at
September December
2004 2004
Restated Restated
US Dollar million Unaudited Audited
ASSETS
Non-current assets
Tangible assets 5,474 5,880
Intangible assets 407 416
Investments in associates 7 8
Investment properties 7 8
Other investments 30 32
Inventories 22 22
Derivatives 123 187
Deferred taxation - -
Other non-current assets 50 86
6,120 6,639
Current assets
Inventories 391 419
Trade and other receivables 276 309
Derivatives 306 490
Current portion of other non-current assets 60 1
Cash and cash equivalents 440 312
1,473 1,531
Non-current assets held for sale - -
1,473 1,531
TOTAL ASSETS 7,593 8,170
EQUITY AND LIABILITIES
Equity
Ordinary share capital and premium 2,932 3,364
Retained earnings and other reserves 32 (213)
Shareholders" equity 2,964 3,151
Minority interests 61 58
3,025 3,209
Non-current liabilities
Borrowings 1,291 1,286
Provisions 334 415
Derivatives 514 537
Deferred taxation 1,298 1,336
3,437 3,574
Current liabilities
Trade and other payables 439 470
Current portion of borrowings 321 319
Derivatives 351 533
Taxation 20 65
1,131 1,387
Total liabilities 4,568 4,961
7,593 8,170
TOTAL EQUITY AND LIABILITIES
Net asset value - cents per share 1,121 1,191
Rounding of figures may result in computational discrepancies.
Group cash flow statement
Quarter Quarter Quarter
ended ended ended
September June September
2005 2005 2004
Restated
SA Rand million Unaudited Unaudited Unaudited
Cash flows from operating activities
Cash generated from operations 1,282 1,191 1,342
Cash (utilised) generated by
discontinued operations (51) (62) (2)
Environmental, rehabilitation and
other expenditure (27) (16) (38)
Termination of employee benefit plan (61) - -
Taxation paid (45) (34) (32)
Net cash inflow from operating
activities 1,098 1,078 1,270
Cash flows from investing activities
Capital expenditure (1,385) (1,068) (1,004)
Proceeds from disposal of tangible
assets 24 - 14
Investments acquired (6) (89) (98)
Acquisition of subsidiary net of cash - - (260)
Net loans repaid (advanced) 2 (29) 50
Utilised in hedge restructure - - -
Net cash outflow from investing
activities (1,363) (1,186) (1,298)
Cash flows from financing activities
Proceeds from issue of share capital 17 10 4
Share issue expenses - - -
Proceeds from borrowings 926 545 271
Repayment of borrowings (148) (407) (319)
Interest received 21 27 53
Finance costs (222) (68) (189)
Dividends paid (507) (31) (449)
Net cash inflow (outflow) from
financing activities 88 77 (629)
Net decrease in cash and cash
equivalents (177) (31) (657)
Translation (103) 123 45
Opening cash and cash equivalents 1,835 1,744 3,458
Closing cash and cash equivalents 1,555 1,835 2,846
Cash generated from operations
(Loss) profit before taxation (319) 621 188
Adjusted for:
Non-cash movements (56) 126 (53)
Movement on non-hedge derivatives 404 (185) 47
Deferred stripping costs (39) 17 (15)
Amortisation of tangible assets 784 787 660
Amortisation of intangible assets 3 3 48
Impairment of tangible assets - 45 8
Interest receivable (34) (39) (72)
Profit on disposal of assets and
subsidiaries (10) - (36)
Finance costs and unwinding of
decommissioning and
restoration obligations 166 159 139
Fair value adjustment on option
component of convertible bond 135 (79) 181
Movement in working capital 248 (267) 247
1,282 1,191 1,342
Movement in working capital
Decrease (increase) in inventories 6 (339) (162)
Decrease (increase) in trade and
other receivables 384 (268) 273
(Decrease) increase in trade and
other payables (142) 340 136
248 (267) 247
Nine months Nine months
ended ended
September September
2005 2004
Restated
SA Rand million Unaudited Unaudited
Cash flows from operating activities
Cash generated from operations 3,300 2,690
Cash (utilised) generated by discontinued
operations (164) 4
Environmental, rehabilitation and other
expenditure (55) (68)
Termination of employee benefit plan (61) -
Taxation paid (140) (193)
Net cash inflow from operating activities 2,878 2,433
Cash flows from investing activities
Capital expenditure (3,317) (2,583)
Proceeds from disposal of tangible assets 25 49
Investments acquired (95) (101)
Acquisition of subsidiary net of cash - (1,037)
Net loans repaid (advanced) (29) 126
Utilised in hedge restructure (415) -
Net cash outflow from investing activities (3,829) (3,546)
Cash flows from financing activities
Proceeds from issue of share capital 35 16
Share issue expenses - (1)
Proceeds from borrowings 4,039 6,970
Repayment of borrowings (2,043) (4,828)
Interest received 93 186
Finance costs (512) (442)
Dividends paid (1,026) (1,266)
Net cash inflow (outflow) from financing
activities 587 635
Net decrease in cash and cash equivalents (364) (478)
Translation 160 (43)
Opening cash and cash equivalents 1,758 3,367
Closing cash and cash equivalents 1,555 2,846
Cash generated from operations
(Loss) profit before taxation 370 789
Adjusted for:
Non-cash movements 38 (56)
Movement on non-hedge derivatives 647 615
Deferred stripping costs (13) (129)
Amortisation of tangible assets 2,303 1,706
Amortisation of intangible assets 9 153
Impairment of tangible assets 45 8
Interest receivable (127) (244)
Profit on disposal of assets and subsidiaries (10) (63)
Finance costs and unwinding of decommissioning
and
restoration obligations 474 420
Fair value adjustment on option component of
convertible bond (59) (67)
Movement in working capital (378) (442)
3,300 2,690
Movement in working capital
Decrease (increase) in inventories (900) (123)
Decrease (increase) in trade and other
receivables 118 48
(Decrease) increase in trade and other payables 403 (367)
(378) (442)
Rounding of figures may result in computational discrepancies.
Group cash flow statement
Quarter Quarter Quarter
ended ended ended
September June September
2005 2005 2004
Restated
US Dollar million Unaudited Unaudited Unaudited
Cash flows from operating activities
Cash generated from operations 195 193 196
Cash (utilised) generated by
discontinued operations (8) (11) -
Environmental, rehabilitation and
other expenditure (4) (3) (5)
Termination of employee benefit plan (10) - -
Taxation paid (7) (5) (5)
Net cash inflow from operating
activities 166 175 186
Cash flows from investing activities
Capital expenditure (215) (167) (156)
Proceeds from disposal of tangible
assets 4 - 2
Investments acquired (1) (15) (15)
Acquisition of subsidiary net of cash - - (39)
Net loans (advanced) repaid - (5) 8
Utilised in hedge restructure - - -
Net cash outflow from investing
activities (211) (186) (200)
Cash flows from financing activities
Proceeds from issue of share capital 3 2 1
Share issue expenses - - -
Proceeds from borrowings 139 43 42
Repayment of borrowings (19) (27) (51)
Interest received 3 4 8
Finance costs (35) (10) (29)
Dividends paid (78) (5) (68)
Net cash inflow (outflow) from
financing activities 14 7 (97)
Net decrease in cash and cash
equivalents (31) (4) (111)
Translation 1 (2) (4)
Opening cash and cash equivalents 275 280 555
Closing cash and cash equivalents 244 275 440
Cash generated from operations
(Loss) profit before taxation (58) 107 30
Adjusted for:
Non-cash movements (9) 20 (11)
Movement on non-hedge derivatives 71 (38) 5
Deferred stripping costs (6) 2 (2)
Amortisation of tangible assets 121 123 104
Amortisation of intangible assets - - 7
Impairment of tangible assets - 7 1
Interest receivable (5) (6) (11)
Profit on disposal of assets and
subsidiaries (1) - (5)
Finance costs and unwinding of
decommissioning and
restoration obligations 26 25 22
Fair value adjustment on option
component of convertible bond 21 (13) 30
Movement in working capital 36 (33) 26
195 193 196
Movement in working capital
Increase in inventories (25) (17) (13)
Decrease (increase) in trade and
other receivables 45 (20) 53
Increase (decrease) in trade and
other payables 16 4 (14)
36 (33) 26
Nine months Nine months
ended ended
September September
2005 2004
Restated
US Dollar million Unaudited Unaudited
Cash flows from operating activities
Cash generated from operations 524 416
Cash (utilised) generated by discontinued
operations (27) 1
Environmental, rehabilitation and other
expenditure (8) (10)
Termination of employee benefit plan (10) -
Taxation paid (22) (29)
Net cash inflow from operating activities 456 378
Cash flows from investing activities
Capital expenditure (525) (393)
Proceeds from disposal of tangible assets 4 7
Investments acquired (15) (15)
Acquisition of subsidiary net of cash - (165)
Net loans (advanced) repaid (5) 19
Utilised in hedge restructure (69) -
Net cash outflow from investing activities (610) (547)
Cash flows from financing activities
Proceeds from issue of share capital 6 3
Share issue expenses - -
Proceeds from borrowings 640 1,061
Repayment of borrowings (324) (736)
Interest received 15 28
Finance costs (81) (67)
Dividends paid (165) (190)
Net cash inflow (outflow) from financing
activities 91 99
Net decrease in cash and cash equivalents (63) (70)
Translation (4) 5
Opening cash and cash equivalents 312 505
Closing cash and cash equivalents 244 440
Cash generated from operations
(Loss) profit before taxation 74 118
Adjusted for:
Non-cash movements 5 (10)
Movement on non-hedge derivatives 89 95
Deferred stripping costs (2) (19)
Amortisation of tangible assets 365 261
Amortisation of intangible assets 1 23
Impairment of tangible assets 7 1
Interest receivable (20) (36)
Profit on disposal of assets and subsidiaries (1) (9)
Finance costs and unwinding of decommissioning
and
restoration obligations 75 63
Fair value adjustment on option component of
convertible bond (11) (9)
Movement in working capital (58) (62)
524 416
Movement in working capital
Increase in inventories (92) (29)
Decrease (increase) in trade and other
receivables 53 1
Increase (decrease) in trade and other payables (20) (34)
(58) (62)
Rounding of figures may result in computational discrepancies.
Statement of recognised income and expense
for the nine months ended 30 September 2005
Nine months Nine months
ended ended
September September
2005 2004
Unaudited Unaudited
SA Rand million
Actuarial gains on defined benefit retirement
plans 42 -
Net loss on cash flow hedges removed from
equity and reported in income 42 710
Net (loss) gain on cash flow hedges (433) 75
Net gain on available for sale financial assets 20 20
Deferred taxation on items above 221 (177)
Net exchange translation differences (135) 33
Net (expense) income recognised directly in
equity (243) 661
Profit for the period 318 594
Total recognised income and expense for the
period 75 1,255
Attributable to:
Equity shareholders (42) 1,154
Minority interest 117 101
75 1,255
US Dollar million
Actuarial gains on defined benefit retirement
plans 7 -
Net loss on cash flow hedges removed from
equity and reported in income 6 111
Net (loss) gain on cash flow hedges (68) 12
Net gain on available for sale financial assets 3 3
Deferred taxation on items above 34 (26)
Net exchange translation differences 3 (6)
Net (expense) income recognised directly in
equity (15) 94
Profit for the period 63 90
Total recognised income and expense for the
period 48 184
Attributable to:
Equity shareholders 30 168
Minority interest 18 16
48 184
Rounding of figures may result in computational discrepancies.
Notes
for the quarter and nine months ended 30 September 2005
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 2004 except for the new and revised
International Financial Reporting Standards (IFRS) statements which are
effective 1 January 2005, where applicable and where indicated.
The option to account for actuarial gains and losses through equity reserves
under Employee benefits (IAS19) revised has been adopted. The financial effects
of the adoption on prior periods are disclosed in note 15.
The financial statements of AngloGold Ashanti have been prepared in compliance
with IAS34, in compliance with the 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 and nine months ended 30
September 2005.
Where the preparation or classification of an item has been amended,
comparative information has 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. Refer to note 9, discontinued
operations, note 15, financial effects of IAS19 revised and note 21,
convertible bonds.
2. Revenue
Quarter ended Nine months ended
Sept Jun Sept Sept
2005 2005 2005 2004
Restated
Unaudited Unaudited Unaudited Unaudited
SA Rand million
Gold income 4,151 4,404 12,413 10,734
Sale of uranium, silver
and sulphuric acid 147 121 371 348
Interest receivable 34 39 127 244
4,332 4,563 12,911 11,327
Quarter ended Nine months ended
Sept Jun Sept Sept
2005 2005 2005 2004
Restated
Unaudited Unaudited Unaudited Unaudited
US Dollar million
Gold income 638 684 1,964 1,637
Sale of uranium, silver
and sulphuric acid 23 19 59 53
Interest receivable 5 6 20 37
666 708 2,042 1,728
3. Cost of sales
Quarter ended Nine months ended
Sept Jun Sept Sept
2005 2005 2005 2004
Restated
Unaudited Unaudited Unaudited Unaudited
SA Rand million
Cash operating costs 2,757 2,744 8,152 6,911
Other cash costs 104 92 296 234
Total cash costs 2,861 2,836 8,448 7,144
Retrenchment costs 60 31 106 42
Rehabilitation & other
non-cash costs 67 49 161 94
Production costs 2,988 2,916 8,714 7,280
Amortisation of
tangible assets 784 787 2,303 1,706
Amortisation of
intangible assets 3 3 9 -
Total production costs 3,775 3,706 11,,027 8,985
Inventory change (28) (86) (243) (145)
3,748 3,620 10,784 8,840
Quarter ended Nine months ended
Sept Jun Sept Sept
2005 2005 2005 2004
Restated
Unaudited Unaudited Unaudited Unaudited
US Dollar million
Cash operating costs 423 428 1,293 1,055
Other cash costs 16 14 47 36
Total cash costs 439 443 1,340 1,091
Retrenchment costs 9 5 16 6
Rehabilitation & other
non-cash costs 10 8 26 14
Production costs 459 456 1,382 1,111
Amortisation of
tangible assets 121 123 365 261
Amortisation of
intangible assets - - 1 -
Total production costs 580 578 1,748 1,372
Inventory change (4) (14) (40) (22)
576 565 1,709 1,350
Rounding of figures may result in computational discrepancies.
Updated post - Board 26 October 2005 - version2
4. Taxation
Quarter ended Nine months ended
Sept Jun Sept Sept
2005 2005 2005 2004
Restated
Unaudited Unaudited Unaudited Unaudited
SA Rand million
Current taxation (36) 11 (63) (117)
Deferred taxation (35) (158) (226) (259)
Deferred taxation -
contract termination
expenditure at Geita 19 - 19 -
Deferred taxation on
change in tax rate - 314 386 -
Deferred taxation on
unrealised non-
hedge derivatives 42 (105) (5) 239
(10) 62 111 (137)
Quarter ended Nine months ended
Sept Jun Sept Sept
2005 2005 2005 2004
Restated
Unaudited Unaudited Unaudited Unaudited
US Dollar million
Current taxation (6) 1 (11) (18)
Deferred taxation (5) (22) (33) (39)
Deferred taxation -
contract termination
expenditure at Geita 3 - 3 -
Deferred taxation on
change in tax rate - 47 59 -
Deferred taxation on
unrealised non-
hedge derivatives 6 (16) (1) 37
(2) 9 17 (20)
5. Headline (loss) earnings
Quarter ended Nine months ended
Sept Jun Sept Sept
2005 2005 2005 2004
Restated
Unaudited Unaudited Unaudited Unaudited
SA Rand million
(Loss) profit
attributable to equity
shareholders has been
adjusted
by the following to
arrive at headline
earnings:
(Loss) profit
attributable to equity
shareholders (415) 566 201 493
Amortisation of
intangible assets - - - 153
Impairment of tangible
assets - 45 45 8
Profit on disposal of
assets and
subsidiaries (11) - (9) (63)
Taxation on items above (1) (15) (17) 10
Net loss from
discontinued operations
(note 9) 42 69 163 58
Headline (loss) earnings (384) 665 383 658
Cents per share (1)
Headline (loss) earnings (145) 251 145 266
Quarter ended Nine months ended
Sept Jun Sept Sept
2005 2005 2005 2004
Restated
Unaudited Unaudited Unaudited Unaudited
US Dollar million
(Loss) profit
attributable to
equity
shareholders has been
adjusted
by the following to
arrive at headline
earnings:
(Loss) profit
attributable to
equity
shareholders (73) 96 45 74
Amortisation of
intangible assets - - - 23
Impairment of
tangible assets - 7 7 1
Profit on disposal of
assets and
subsidiaries (1) - (1) (9)
Taxation on items
above - (2) (3) 1
Net loss from
discontinued
operations
(note 9) 7 12 27 8
Headline (loss)
earnings (68) 112 75 99
Cents per share (1)
Headline (loss)
earnings (26) 42 28 40
(1) Calculated on the basic weighted average number of ordinary shares.
6. Headline earnings adjusted for the effect of unrealised non-hedge
derivatives
Quarter ended Nine months ended
Sept Jun Sept Sept
2005 2005 2005 2004
Restated
Unaudited Unaudited Unaudited Unaudited
SA Rand million
Headline (loss)
earnings (note 5) (384) 665 383 658
Unrealised non-hedge
derivatives 435 (166) 690 652
Deferred taxation on
unrealised non-
hedge derivatives
(note 4) (42) 105 5 (239)
Headline earnings
adjusted for
the effect of
unrealised non-hedge
derivatives (2) 9 604 1,078 1,072
Cents per share (1)
Headline earnings
adjusted for the
effect of unrealised
non-hedge
derivatives 3 228 407 434
Quarter ended Nine months ended
Sept Jun Sept Sept
2005 2005 2005 2004
Restated
Unaudited Unaudited Unaudited Unaudited
US Dollar million
Headline (loss)
earnings (note 5) (68) 112 75 99
Unrealised non-hedge
derivatives 76 (37) 95 100
Deferred taxation on
unrealised non-
hedge derivatives
(note 4) (6) 16 1 (37)
Headline earnings
adjusted for
the effect of
unrealised non-hedge
derivatives (2) 1 92 170 162
Cents per share (1)
Headline earnings
adjusted for the
effect of unrealised
non-hedge
derivatives - 35 64 66
(1) Calculated on the basic weighted average number of ordinary shares.
(2) Non-hedge derivatives in the income statement comprise the change
in fair value of all non-hedge derivatives as follows:
- Open positions: The change in fair value from the previous reporting date
or date of recognition (if later) through to the current reporting date;
and
- Settled positions: The change in fair value from the previous reporting
date or date of recognition (if later) through to the date of settlement.
Rounding of figures may result in computational discrepancies.
Headline (loss) earnings adjusted for the effect of unrealised non-hedge
derivatives, is intended to illustrate earnings after adjusting for:
- The unrealised fair value change in contracts that are still open at the
reporting date, as well as, the unwinding of the historic marked-to-market
value of the positions settled in the period; and
- Investment in hedge restructure transaction: During the hedge restructure
in the quarter ended 31 December 2004 and the quarter ended 31 March 2005,
$83m and $69m in cash was injected into the hedge book in these quarters
to increase the value of long- dated contracts. The entire investment in
short-dated derivatives (certain of which have now matured) and investment
in long-dated derivatives (all of which have not yet matured), for the
purposes of the adjustment to earnings, will only be taken into account
when the realised portion of long-dated non-hedge derivatives are settled,
and not when the short-term contracts are settled.
7. Gross profit and gross profit adjusted for the effect of unrealised
non-hedge derivatives
Quarter ended Nine months ended
Sept Jun Sept Sept
2005 2005 2005 2004
Restated
Unaudited Unaudited Unaudited Unaudited
SA Rand million
Reconciliation of gross
profit to gross
profit adjusted for the
effect of
unrealised non-hedge
derivatives:
Gross profit 243 931 1,429 1,582
Unrealised non-hedge
derivatives 435 (166) 690 652
Gross profit adjusted
for the effect of
unrealised non-hedge
derivatives (1) 678 765 2,119 2,234
Quarter ended Nine months ended
Sept Jun Sept Sept
2005 2005 2005 2004
Restated
Unaudited Unaudited Unaudited Unaudited
US Dollar million
Reconciliation of gross
profit to gross
profit adjusted for the
effect of
unrealised non-hedge
derivatives:
Gross profit 29 154 240 239
Unrealised non-hedge
derivatives 76 (37) 95 100
Gross profit adjusted
for the effect of
unrealised non-hedge
derivatives (1) 105 117 334 339
(1) Non-hedge derivatives in the income statement comprise the change in fair
value of all non-hedge derivatives as follows:
- Open positions: The change in fair value from the previous reporting date
or date of recognition (if later) through to the current reporting date;
and
- Settled positions: The change in fair value from the previous reporting
date or date of recognition (if later) through to the date of settlement.
Gross profit adjusted for the effect of unrealised non-hedge derivatives,
is intended to illustrate earnings after adjusting for:
- The unrealised fair value change in contracts that are still open at the
reporting date, as well as, the unwinding of the historic marked-to-market
value of the positions settled in the period; and
- Investment in hedge restructure transaction: During the hedge restructure
in the quarter ended 31 December 2004 and the quarter ended 31 March 2005,
$83m and $69m in cash was injected into the hedge book in these quarters
to increase the value of long- dated contracts. The entire investment in
short-dated derivatives (certain of which have now matured) and investment
in long-dated derivatives (all of which have not yet matured), for the
purposes of the adjustment to earnings, will only be taken into account
when the realised portion of long-dated non-hedge derivatives are settled,
and not when the short-term contracts are settled.
8. Capital commitments
Sept Jun Sept Dec
2005 2005 2004 2004
Unaudited Unaudited Unaudited Audited
SA Rand million
Orders placed and
outstanding on
capital contracts at the
prevailing
rate of exchange 1,753 1,312 1,005 835
Sept Jun Sept Dec
2005 2005 2004 2004
Unaudited Unaudited Unaudited Audited
US Dollar million
Orders placed and
outstanding on
capital contracts at the
prevailing
rate of exchange 276 196 155 148
Liquidity and capital resources:
To service the above capital commitments and other operational requirements,
the group is dependant upon cash generated from the South African operations,
borrowing facilities and cash distributions from offshore operations.
Cash generated from the South African operations fund to a large extent the
capital expenditure to maintain and expand those operations in South Africa.
Consequently other funding requirements are serviced from borrowing facilities
and offshore distributions which are subject to market and other risks. The
credit facilities and other financing arrangements contain financial covenants
and other similar undertakings.
The distributions from offshore operations are subject to foreign investment
and exchange control laws and regulations and the quantity of foreign exchange
available in offshore countries. In addition offshore distributions from joint
venture partners are subject to consent and co-operation from those joint
venture partners.
The group"s current covenant performance, cash and liquidity funds from the
various resources available are within the required limits which will meet its
obligations and capital commitments.
Rounding of figures may result in computational discrepancies.
9. 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 Nine months ended
Sept Jun Sept Sept
2005 2005 2005 2004
Restated
Unaudited Unaudited Unaudited Unaudited
SA Rand million
Gold income 4 10 99 439
Retrenchment,
rehabilitation and
other
costs (13) (261) (410) (483)
Non-hedge derivatives - - - (18)
Gross loss (9) (251) (311) (62)
Impairment loss reversed - 115 115 -
Loss before taxation
from discontinued
operations (9) (136) (196) (62)
Deferred taxation (34) 67 34 4
Net loss attributable
to discontinued
operations (42) (69) (163) (58)
Quarter ended Nine months ended
Sept Jun Sept Sept
2005 2005 2005 2004
Restated
Unaudited Unaudited Unaudited Unaudited
US Dollar million
Gold income 1 2 16 67
Retrenchment,
rehabilitation and
other
costs (2) (41) (66) (73)
Non-hedge derivatives - - - (3)
Gross loss (1) (39) (49) (9)
Impairment loss reversed - 17 17 -
Loss before taxation
from discontinued
operations (1) (22) (32) (9)
Deferred taxation (5) 10 5 1
Net loss attributable
to discontinued
operations (7) (12) (27) (8)
10. Shares
Quarter ended
Sept Jun Sept
2005 2005 2004
Restated
Unaudited Unaudited Unaudited
Authorised shares:
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
5,000,000 5,000,000 5,000,000
1 SA cent each
Issued shares:
Ordinary shares 264,749,794 264,611,494 264,439,294
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 264,642,218 264,556,116 264,412,359
Diluted number of ordinary
shares 265,224,451 265,101,415 265,016,648
Nine months ended
Sept Sept
2005 2004
Restated
Unaudited Unaudited
Authorised shares:
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
5,000,000 5,000,000
1 SA cent each
Issued shares:
Ordinary shares 264,749,794 264,439,294
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 264,562,882 246,954,457
Diluted number of ordinary shares 265,146,330 247,662,274
During the quarter, 138,300 ordinary shares were allotted in terms of the
AngloGold Share Incentive Scheme. All the preference shares are held by a
wholly-owned subsidiary company.
11. Ordinary share capital and premium
As at As at
Sept Sept
2005 2004
Unaudited Unaudited
SA Rand million
Balance at December 18,987 9,668
Ordinary shares issued 35 9,316
Translation - -
Balance at September 19,023 18,984
As at As at
Sept Sept
2005 2004
Unaudited Unaudited
US Dollar million
Balance at December 3,364 1,450
Ordinary shares issued 6 1,369
Translation (379) 113
Balance at September 2,991 2,932
Rounding of figures may result in computational discrepancies.
12. Retained earnings and other reserves
Non- Foreign Other
distri- currency Comprehen-
Retained butable translation sive
earnings reserves reserve income Total
SA Rand million (1)
Balance at December
2003 as previously
reported 3,848 138 (755) (2,047) 1,184
Change in accounting
policy for defined
benefit retirement plans - - - (112) (112)
As restated 3,848 138 (755) (2,159) 1,072
Net loss on cash flow
hedges removed from
equity
and reported in income - - - 708 708
Net gain on cash flow
hedges - - - 72 72
Deferred taxation on
cash flow hedges - - - (177) (177)
Net gain on available
for sale financial
assets - - - 20 20
Exchange translation
differences - - (819) 38 (781)
Profit attributable to
equity shareholders 493 - - - 493
Dividends paid (1,197) - - - (1,197)
Balance at September
2004 (restated) 3,144 138 (1,574) (1,498) 210
Balance at December
2004 (restated) 3,379 138 (3,552) (1,040) (1,075)
Change in accounting
policy for defined
benefit retirement plans - - - (125) (125)
As restated 3,379 138 (3,552) (1,165) (1,200)
Actuarial gain on
defined benefit
retirement plans - - - 42 42
Deferred taxation on
defined benefit
retirement plans - - - (14) (14)
Net loss on cash flow
hedges removed from
equity
and reported in income - - - 39 39
Net loss on cash flow
hedges - - - (430) (430)
Deferred taxation on
cash flow hedges - - - 235 235
Net loss on available
for sale financial
assets - - - 20 20
Exchange translation
differences - - 1,809 (136) 1,673
Profit attributable to
equity shareholders 201 - - - 201
Dividends paid (926) - - - (926)
Balance at September
2005 2,654 138 (1,743) (1,408) (360)
US Dollar million (1)
Balance at December
2003 as previously
reported 356 21 108 (307) 178
Change in accounting
policy for defined
benefit retirement plans - - - (18) (18)
As restated 356 21 108 (325) 160
Net loss on cash flow
hedges removed
from equity and
reported in income - - - 111 111
Net gain on cash flow
hedges - - - 11 11
Deferred taxation on
cash flow hedges - - - (26) (26)
Net gain on available
for sale financial
assets - - - 3 3
Exchange translation
differences - (117) (5) (122)
Profit attributable to
equity shareholders 74 - - - 74
Dividends paid (179) - - - (179)
Balance at September
2004 (restated) 251 21 (9) (231) 32
Balance at December
2004 (restated) 286 24 (317) (184) (191)
Change in accounting
policy for defined
benefit retirement plans - - - (22) (22)
As restated 286 24 (317) (206) (213)
Actuarial gain on
defined benefit
retirement plans - - - 7 7
Deferred taxation on
defined benefit
retirement plans - - - (2) (2)
Net loss on cash flow
hedges removed from
equity and reported in
income - - - 6 6
Net loss on cash flow
hedges - - - (68) (68)
Deferred taxation on
cash flow hedges - - - 36 36
Net loss on available
for sale financial
assets - - - 3 3
Exchange translation
differences - (2) 278 3 279
Profit attributable to
equity shareholders 45 - - - 45
Dividends paid (150) - - - (150)
Balance at September
2005 181 22 (39) (221) (57)
(1) The 2004 opening balances and comparative amounts have been
restated in terms of the effects of changes in foreign exchange rates (IAS21)
revised.
Rounding of figures may result in computational discrepancies.
13. Minority interests
As at As at As at As at
Sept Sept Sept Sept
2005 2004 2005 2004
Unaudited Unaudited Unaudited Unaudited
SA Rand million US Dollar million
Balance at December 327 354 58 53
Attributable profit 117 101 18 16
Dividends paid (100) (69) (16) (11)
Net loss on cash flow hedges removed
from equity and reported in income 3 2 - -
Net loss on cash flow hedges (3) 3 - 1
Exchange translation differences 31 6 (1) 2
Balance at September 2005 375 397 59 61
14. Exchange rates
Sept Jun Sept Dec
2005 2005 2004 2004
Unaudited Unaudited Unaudited Audited
Rand/US dollar average for the period 6.31 6.21 6.57 6.44
Rand/US dollar average for the quarter 6.51 6.41 6.37 6.05
Rand/US dollar closing 6.36 6.68 6.48 5.65
Rand/Australian dollar average for the
period 4.85 4.80 4.80 4.82
Rand/Australian dollar average for the
quarter 4.95 4.93 4.52 4.58
Rand/Australian dollar closing 4.85 5.06 4.69 4.42
15. Financial effects of Employee benefits (IAS19) revised
The cumulative effect of accounting for actuarial gains and losses through
equity reserves for the previous reported periods are as follows:
As at As at As at As at
Sept Dec Sept Dec
2004 2004 2004 2004
Unaudited Audited Unaudited Audited
SA Rand million US Dollar million
Non-current assets
Other non-current assets
As previously reported 493 601 76 106
Actuarial gain related to the pension
plan asset
recognised directly in equity (169) (114) (25) (16)
Translation - - (1) (4)
As restated 324 487 50 86
Non-current liabilities
Provisions
As previously reported 2,162 2,265 334 402
Actuarial gain related to the post
retirement
medical liability recognised directly
in equity - 74 - 11
Translation - - - 2
As restated 2,162 2,339 334 415
Non-current liabilities
Deferred taxation
As previously reported 8,463 7,605 1,307 1,347
Actuarial gain related to the
retirement plans
recognised directly in equity (57) (63) (9) (9)
Translation - - - (2)
As restated 8,406 7,542 1,298 1,336
Rounding of figures may result in computational discrepancies.
16. Contingent liabilities
At 30 September 2005, the aggregate contingent liability is approximately $100
million. The details of significant contingent liabilities are listed below:
Capital cost of water pipelines and electricity supply of Navachab - A
potential liability of $1m exists at Navachab in Namibia to pay the outstanding
capital cost of the water pipeline and electricity supply in the event of mine
closure prior to 2019.
Tax claims - Tanzania and Mali - Potential tax claims including interest and
penalties in Tanzania of $22m and in Mali of $2m. The Tanzanian amount relates
to corporate tax and VAT claims by the Tanzanian revenue authorities which
claims are being contested. Discussions are continuing with the Malian
government as to the validity of these tax claims.
Yatela loan - AngloGold Ashanti has signed a surety in favour of the bankers on
the Yatela loan for $2m.
Australia - Exploration and development tenements - AngloGold Ashanti stands
collateral to certain bankers for the satisfactory contract performance in
relation to exploration and development tenements and mining operations in
Australia, amounting to $15m.
North America - Reclamation - AngloGold Ashanti USA has posted reclamation
bonds of $49m with various federal and governmental agencies to cover potential
rehabilitation obligations. The company has guaranteed these obligations. At 30
September 2005, the carrying value of these obligations relating to AngloGold
Ashanti USA amounted to $21m.
Tax claims - South America - Various equipment tax claims are subject to
litigation. Guarantees amounting to
$3m have been posted as a requirement of the judiciary until legal proceedings
are complete.
Re-export arrangements of artifacts - South Africa - AngloGold Ashanti has
undertaken to re-export certain gold artefacts, temporarily imported into South
Africa, for which custom and value added tax was waived to the amount of $3m.
Provision of Surety - ORO Africa, 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 ZAR100m
($16m).
Litigation with mining contractor and non-payment of receivable - Ghana - A
group of employees of Mining and Building Contractors (MBC), the Obuasi
underground developer, are claiming to be employees of the group. The potential
liability amounts to $6m.
US Class Action - The terms of settlement in the US Class Action brought
against the former Ashanti Goldfields Company Limited (AGC) have been concluded
subject to court approval. The complaint inter-alia alleges non- disclosures
and misstatements by AGC regarding its hedging programme.
Water pumping cost - Vaal River - South Africa - Several mining companies
operate in the area immediately upstream from the Vaal River mining operation.
By law, these companies are obliged to continue pumping underground water. The
South African Department of Water Affairs and Forestry issued a directive that
splits the cost of water pumping between DRDgold, Harmony, Stilfontein and
AngloGold Ashanti. This directive expires at the end of October 2005. AngloGold
Ashanti believes that it is not liable to fund these pumping costs but cannot
make any assurances regarding the ultimate result until the matter has been
settled.
Siguiri Convention de Base - Pursuant to the Convention de Base that governs
the Siguiri mine, a royalty on production may be payable to the International
Finance Corporation (IFC) and to Umicore SA (UM), on a sliding scale between
2.5% and 7.5%, based on the spot gold price per ounce of between
$350 and $475, subject to indexation from 1 January 1995, to a cumulative
maximum of $60m. In terms of the restructuring agreement with the IFC, a
sliding scale royalty on production is payable to the IFC calculated on the
same basis at 1.25% subject to a maximum of $7.8m. The royalty
rate payable to the UM is 2.5% of revenue. The trigger price agreed and
calculated for 2004 is $433.05/oz which was reached in the fourth
quarter and the total royalty payable is $0.7m. The trigger price for
2005 is $442.91/oz which has, to date, not been reached.
17. 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 not expected to vary significantly from the preliminary allocation.
18. 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.
19. Announcements
19.1 On 2 August 2005, AngloGold Ashanti announced that the company had
received notification from the Director-General of Minerals and Energy that
it had been granted its application for new order mining rights in terms of
the Mineral Resources and Petroleum Development Act. In its application for
these rights, the company committed itself to achieving the Mining Charter"s
goals, including: 40% representation in management of Historically
Disadvantaged South Africans within five years; participating in local
economic development programmes in the areas where it operates and from which
it draws its labour; and meeting the Charter"s empowerment ownership target.
In respect of the latter, in addition to the transactions with Armgold
carried out between 1998 and 2002, the company committed to the development
of an Employee Share Ownership Programme, with a value equivalent to
approximately 6% of the South African net assets.
19.2 On 11 August 2005, AngloGold Ashanti announced the end of the South
African gold mining industry"s wage dispute and strike, which resulted in
three lost production shifts and culminated in the signing of a two-year wage
agreement, effective 1 July 2005.
19.3 On 11 August 2005, AngloGold Ashanti announced that it had disposed of
its La Rescatada Project for a total consideration of $13m with an option to
repurchase 60% of the project should reserves in excess of 2Moz be identified
within three years. The exploration project is located approximately 800km
south-east of the city of Lima in Peru.
20. Dividend
Interim dividend No. 98 of 170 South African cents or 14.78 UK pence or
2,381.75 cedis per share was paid to registered shareholders on 26 August 2005,
while a dividend of 6.8102 Australian cents per CHESS Depositary Interest (CDI)
was paid on the same day. On 29 August 2005, a dividend of 23.81751 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 6 September 2005 at a rate of 26.095 US cents per American Depositary
Share (ADS). Each ADS represents one ordinary share.
21. Group financial statements
The group financial statements for the quarter and nine months ended 30
September 2005 were authorised for issue in accordance with a resolution of the
directors passed on 26 October 2005. AngloGold Ashanti is a limited liability
company incorporated in the Republic of South Africa.
22. Convertible bonds
The group changed its accounting policy for convertible bonds during the first
quarter of 2005. Previously, convertible bonds were accounted for as compound
financial instruments, part equity and part liability. The equity component was
not re-measured for changes in fair value.
Convertible bonds are now accounted for entirely as a liability, with the
option component disclosed as a derivative liability, carried at fair value.
Changes in such fair value are recorded in the income statement.
This change was made in response to additional guidance becoming available on
the interpretation of International Financial Reporting Standards. This change
is applied retrospectively and comparative figures have been restated.
The impact on comparative figures is as follows:
Quarter to 30 September 2004:
Profit attributable to equity shareholders decreased by $30m recorded in the
income statement; Option component previously disclosed as equity ($82m) is
removed from shareholders equity, and replaced by a derivative liability of
$73m.
Nine months ended 30 September 2004:
Profit attributable to equity shareholders increased by $9m recorded in the
income statement; Option component previously disclosed as equity ($82m) is
removed from shareholders equity, and replaced by a derivative liability of
$73m.
23. Borrowings
AngloGold Ashanti"s borrowings are interest bearing.
24. 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 R M GODSELL
Chairman Chief Executive Officer
26 October 2005
Board of directors and executive officers
Non-Executive Directors
MR R P EDEY (63)
FCA
Chairman
Russell Edey was appointed to the AngloGold board in April 1998 and as deputy
chairman in December 2000. In May 2003 he was appointed chairman when Bobby
Godsell relinquished this office. Based in the United Kingdom, he is deputy
chairman of N M Rothschild Corporate Finance and a director of a number of
other companies.
DR T J MOTLATSI (54)
Hon D Soc Sc (Lesotho)
Deputy Chairman
James Motlatsi was appointed to the AngloGold board in April 1998 and as deputy
chairman in May 2002 upon Russell Edey being appointed chairman. He has been
associated with the South African mining industry since 1970, and is a past
president of the National Union of Mineworkers. He is chief executive officer
of TEBA Limited.
MR F B ARISMAN (61)
MSc (Finance)
Frank Arisman was appointed to the AngloGold board in April 1998. He resides in
New York and recently retired, after 32 years of service, from JP Morgan Chase,
where he held the position of managing director.
MRS E le R BRADLEY (67)
BSc, MSc
Elisabeth Bradley was appointed to the AngloGold board in April 1998. She is
non-executive chairman of Wesco Investments Limited, Metair Investments Limited
and Toyota South Africa (Proprietary) Limited and a director of a number of
other companies. She is deputy chairman of the South Africa Institute of
International Affairs.
MR C B BRAYSHAW (70)
CA (SA), FCA
Colin Brayshaw was appointed to the AngloGold board in April 1998. He is a
retired managing partner and chairman of Deloitte & Touche and is a
non-executive director of a number of companies including Anglo Platinum,
Datatec and Jonnic Holdings.
DR S E JONAH (KBE) (56)
Hon D Sc
President
Sam Jonah (Sir Sam) worked in various positions, including underground, with
Ashanti Goldfields and was appointed to the position of CEO of Ashanti in 1986.
Sir Sam has been decorated with many awards and honours and in 2003, was
conferred with an Honorary Knighthood by Her Majesty, Queen Elizabeth II of
Great Britain, in recognition of his exceptional achievements as an African
businessman. Sir Sam was appointed as an executive director to the board of
AngloGold Ashanti in 2004, which position he relinquished in 2005 but retained
his appointment as a non-executive director.
MR R MEDORI (48)
Doctorate Economics, Grad (Fin)
Rene Medori was appointed to the AngloGold Ashanti board in August 2005. He is
the finance director of Anglo American plc.
MR W A NAIRN (61)
BSc (Min Eng)
Bill Nairn has been a member of the AngloGold board since January 2000. He was
re-appointed to the board in May 2001, having previously been alternate
director to Tony Trahar. He was group technical director of Anglo American plc,
prior to his retirement in 2004.
MR S R THOMPSON (46)
MA (Geology)
Simon Thompson is a director of Anglo American plc and chairman of the
Base Metals Division, the Industrial Minerals Division and the Exploration
Division. Simon was appointed to the AngloGold Ashanti board in 2004.
MR A J TRAHAR (56)
BCom, CA (SA)
Tony Trahar was appointed to the AngloGold board in October 2000. He is chief
executive officer of Anglo American plc.
MR P L ZIM (45)
MCom
Lazarus Zim is chief executive officer of Anglo American South Africa Limited
and is chairman of Anglo Operations Limited and serves on a number of boards in
the Anglo American group, including Anglo Platinum.
Lazarus was appointed to the AngloGold Ashanti board in 2004.
Executive Directors
MR R M GODSELL (53)
BA, MA
Chief Executive Officer
Bobby Godsell was appointed to the AngloGold board as chief executive officer
in April 1998 and as chairman in December 2000. He relinquished his role as
chairman of AngloGold in May 2002. He has 29 years of service with companies
associated with the mining industry, and has served as a non-executive director
of Anglo American plc since March 1999. He is also the immediate past chairman
of the World Gold Council.
MR R CARVALHO SILVA (54)
BAcc, BCorp Admin
Chief Operating Officer - International
Roberto Carvalho Silva joined the Anglo American group in Brazil in 1973 and
was appointed president and CEO of AngloGold South America in January 1999.
He became executive officer, South America for AngloGold in 2000 and was
appointed to the board of AngloGold Ashanti in May 2005 in his current
capacity.
MR N F NICOLAU (46)
B Tech (Min Eng); MBA
Chief Operating Officer - Africa
Neville Nicolau was appointed the executive officer responsible for AngloGold"s
South Africa region in November 2001 and was appointed to the board of
AngloGold Ashanti in May 2005 in his current capacity.
He has 26 years of experience in the mining industry.
MR S VENKATAKRISHNAN (VENKAT) (40)
BCom, A C A (ICAI)
Executive Director: Finance (Chief Financial Officer)
Venkat was the finance director of Ashanti Goldfields Company Limited from 2002
until the merger with AngloGold in 2004. Prior to joining Ashanti, Venkat was a
director in the Reorganisation Services division of Deloitte and Touche in
London. He was appointed to the board of AngloGold Ashanti in August 2005.
MR K H WILLIAMS (57)
BA (Hons)
Executive Director: Marketing
Kelvin Williams was appointed marketing director of AngloGold in April 1998. He
has 27 years of service in the gold mining industry. He is a past chairman of
Rand Refinery and a director of the World Gold Council.
Alternate Directors
MR D D BARBER (53)
FCA, AMP (Harvard)
David Barber was appointed alternate director to Julian Ogilvie Thompson in
April 2002 and following the latter"s retirement from the board in April 2004,
he was appointed as alternate to Lazarus Zim. He is finance director of Anglo
American South Africa.
MR A H CALVER (58)
BSc (Hons) Engineering, MDP (UNISA), PMD (Harvard)
Harry Calver was appointed alternate director to Bill Nairn in May 2001. He is
head of engineering Anglo American plc.
MR P G WHITCUTT (40)
BCom (Hons), CA (SA), MBA
Peter Whitcutt who is head of finance at Anglo American plc, has been an
alternate director since October 2001, firstly to Tony Lea, and then to Rene
Medori who replaced the former on the board of AngloGold Ashanti.
Executive Officers
Ms MERENE BOTSIO-PHILLIPS (48)
LLB BL
General Counsel
Merene Botsio-Phillips joined Ashanti Goldfields in 1995, and was appointed to
the board as executive director - general counsel in 1996. Prior to joining
Ashanti, she was director of legal services / company secretary at Ghana
Airways Limited and was later appointed to the board of the airline as a
non-executive director. She was admitted to the English Bar in 1979 and is a
member of Gray"s Inns, the Ghana Bar and the International Bar Association. She
was appointed an executive officer of AngloGold Ashanti in 2004.
DR C E CARTER (43)
BA (Hons) (UCT), DPhil (Oxford), EDP (Northwest University - Kelogg School of
Management) Executive Officer - Investor Relations
Charles Carter joined Anglo American in 1991 and moved to the Gold and Uranium
Division in 1996. In May 2005, he was appointed an executive officer, with
responsibility for overseeing the company"s global investor relations
programme.
MR D H DIERING (54)
BSc, AMP
Executive Officer - Business Planning : Africa
Dave Diering joined the Anglo American Gold and Uranium Division in 1975 and
worked at several South African operations as well as for Zimbabwe Nickel
Corporation until 2001, when he joined AngloGold as head of mining and mineral
resources. In 2005 he was appointed an executive officer.
MR R N DUFFY (42)
BCom, MBA
Executive Officer - Business Development
Richard Duffy joined Anglo American in 1987 and in 1998 was appointed executive
officer and managing secretary of AngloGold. In November 2000 he was appointed
head of business planning and in 2004 assumed responsibility for all new
business opportunities globally. In April 2005 this role was expanded to
include greenfields exploration. He was appointed to the executive committee in
August 2005.
MRS D EARP (44)
CA (SA), BCom, BAcc
Executive Officer - Corporate Accounting
Dawn Earp joined AngloGold in July 2000 from Anglo American, where she was vice
president, Central Finance. Dawn was appointed an executive officer in May
2004.
MR B W GUENTHER (53)
BS (Min, Eng)
Executive Officer - Corporate Technical Group
Ben Guenther joined AngloGold as senior vice president general manager of
Jerritt Canyon mine in Nevada, USA and in 2000 was seconded to AngloGold"s
corporate office in Johannesburg as head of mining. In 2001, he assumed some
responsibilities for safety and health, as well as heading up the corporate
technical group. He was appointed an executive officer in May 2004.
MR R L LAZARE (49)
BA, HED (University of Free State), DPLR (UNISA), SMP (Henley Management
College) Executive Officer - South Africa Region
Robbie Lazare joined Anglo American Gold and Uranium Division in 1982 where he
worked in a variety of management posts until 1999 when he was appointed
general manager of TauTona mine. In December 2004 he was appointed an executive
officer with the responsibility of overseeing all AngloGold Ashanti"s South
African operations.
MR S J LENAHAN (50)
BSoc Sc, MSc
Executive Officer - Corporate Affairs
Steve Lenahan has been working in the mining industry since 1978 when he
started his career at De Beers. He was appointed an executive officer of
AngloGold in 1998, responsible for investor relations and assumed
responsibility for corporate affairs in 2001.
MR M P LYNAM (44)
B Eng (Mech)
Executive Officer - Treasury
Mark Lynam joined the Anglo American group in 1983 and has been involved in the
hedging and treasury area since 1990. In 1998 he joined AngloGold as treasurer
and was appointed an executive officer in May 2004.
MR F R L NEETHLING (53)
BSc (Mech Eng)
Executive Officer - East & West Africa Region
Fritz Neethling joined the Anglo American group in 1997 and in 1999 joined
AngloGold as general manager of the Ergo operation. He was appointed an
executive officer in July 2005.
MR D M A OWIREDU (48)
BSc (Hons)(Mech, Eng), MBA
Deputy Chief Operating Officer - Africa
Daniel Owiredu joined the erstwhile Ashanti Goldfields Company Limited in 1984
and served in various engineering capacities. He has also served as Managing
Director for the Obuasi, Bibiani and Siguiri mines. In March 2004, he was
appointed Chief Operating Officer - West Africa following the Ashanti/AngloGold
merger until his new position as Deputy Chief Operating Officer - Africa in
October 2005.
Ms Y Z SIMELANE (40)
BA LLB, FILPA, MAP
Executive Officer and Managing Secretary
Yedwa Simelane joined AngloGold in November 2000 from the Mineworkers"
Provident Fund where she was the senior manager of the Fund. She was appointed
an executive officer in May 2004.
MR N W UNWIN (53)
BA
Executive Officer - Human Resources and Information Technology
Nigel Unwin has many years experience in the field of human resources. He was
appointed an executive officer in 1999.
Company Secretary
MR C R BULL (58)
BCom
Chris Bull has been employed by the Anglo American group since 1965 in various
company secretarial positions. He was appointed company secretary of AngloGold
in 1998 and is responsible for ensuring compliance with statutory and corporate
governance requirements and the regulations of the stock exchanges on which
AngloGold Ashanti is listed.
Administrative information
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
GSE (Shares): AGA
GSE (GhDS): AADA
Euronext Paris: VA
Euronext Brussels: ANG
JSE Sponsor: UBS
Auditors: Ernst & Young
Contacts
South Africa
Charles Carter
Telephone: +27 11 637 6385
Fax: +27 11 637 6400
E-mail: cecarter@AngloGoldAshanti.com
Michael Clements
Telephone: +27 11 637 6647
Fax: +27 11 637 6400
E-mail:
mclements@AngloGoldAshanti.com
Clement Mamathuba
Telephone: +27 11 637 6223
Fax: +27 11 637 6400
E-mail:
cmamathuba@AngloGoldAshanti.com
United States of America
Andrea Maxey
Telephone: (800) 417 9255 (toll free in
USA and Canada) or +1 212 750 7999
Fax: +1 212 750 5626
E-mail: amaxey@AngloGoldAshanti.com
General E-mail enquiries
investors@AngloGoldAshanti.com
AngloGold Ashanti website
http://www.AngloGoldAshanti.com
Directors
Executive
R M Godsell (Chief Executive Officer)
R Carvalho Silva !
N F Nicolau
S Venkatakrishnan *
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
Dr S E Jonah KBE+
R Medori
(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
French ! Brazilian
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 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
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)
Fax: +27 11 688 5222
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 0000
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
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
2004, which was filed with the Securities and Exchange Commission (SEC) on
14 July 2005.
Date: 26/10/2005 03:45:13 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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