Wrap Text
ANG - Anglogold Ashanti Limited - Report to shareholders for the quarter and
nine months ended 30 September 2010
ANGLOGOLD ASHANTI LIMITED
Registration No. 1944/017354/06
Incorporated in the Republic of South Africa
Share codes:
ISIN: ZAE000043485
JSE: ANG
LSE: AGD
NYSE: AU
ASX: AGG
GhSE (Shares): AGA
GhSE (GhDS): AAD
Euronext Paris: VA
Euronext Brussels: ANG
JSE Sponsor: UBS
Report to shareholders for the quarter and nine months ended 30 September 2010
Group results for the quarter....
- Adjusted headline earnings, excluding accelerated hedge buy-back and related
costs, increase 135% to $303m.
- Production of 1.162Moz at a total cash cost of $643/oz; both improved on
guidance.
- Production increases on continued recovery from South Africa and Australia.
- Geita continues turnaround progress, delivering 15% unit cash cost reduction
to $705/oz.
- Americas region delivers strong performance of 218,000oz at a total cash cost
of $433/oz.
- Continued strong uranium production of 389,000lbs on improved recoveries.
- Dual-tranche capital raising completed, with $1.53bn proceeds earmarked for
hedge elimination.
- Tropicana feasibility completed; AngloGold Ashanti board approves development
decision.
-La Colosa exploration drilling resumes; assay results awaited.
- Exploration yields continued positive results in Tropicana belt, Baffin Island
and Egypt.
Events post quarter-end...
- Residual hedge book eliminated on 7 October at an average price of $1,300/oz,
ending discounted gold sales.
- Moody`s Investor Service and Standard & Poor`s affirm international investment
grade credit rating.
Quarter
ended ended
Sep Jun
2010 2010
SA rand / Metric
Operating review
Gold
Produced - kg / oz (000) 36,129 35,011
Price received - R/kg / $/oz (47,750) 265,806
Price received excluding hedge
buy-back costs - R/kg / $/oz 267,707 265,806
Total cash costs - R/kg / $/oz 151,007 149,365
Total production costs - R/kg / $/oz 187,695 183,891
Financial review
Adjusted gross (loss) profit - Rm / $m (8,670) 2,723
Adjusted gross profit excluding hedge
buy-back costs - Rm / $m 2,969 2,723
Profit (loss) attributable to equity
shareholders - Rm / $m 443 (1,360)
- cents/share 120 (371)
Adjusted headline (loss) earnings - Rm / $m (8,389) 980
- cents/share (2,277) 267
Adjusted headline earnings excluding
hedge buy-back costs - Rm / $m 2,184 980
- cents/share 593 267
Cash flow from operating activities
excluding hedge buy-back costs - Rm / $m 3,238 2,963
Capital expenditure - Rm / $m 1,855 1,703
Nine months
ended ended
Sep Sep
2010 2009
SA rand / Metric
Operating review
Gold
Produced - kg / oz (000) 104,714 106,282
Price received - R/kg / $/oz 148,314 185,498
Price received excluding hedge
buy-back costs - R/kg / $/oz 259,858 245,364
Total cash costs - R/kg / $/oz 149,953 134,192
Total production costs - R/kg / $/oz 187,282 169,536
Financial review
Adjusted gross (loss) profit - Rm / $m (4,310) 1,165
Adjusted gross profit excluding hedge
buy-back costs - Rm / $m 7,329 7,480
Profit (loss) attributable to equity
shareholders - Rm / $m 233 (5,940)
- cents/share 63 (1,653)
Adjusted headline (loss) earnings - Rm / $m (6,947) (1,917)
- cents/share (1,890) (533)
Adjusted headline earnings excluding
hedge buy-back costs - Rm / $m 3,626 4,089
- cents/share 987 1,138
Cash flow from operating activities
excluding hedge buy-back costs - Rm / $m 7,527 6,486
Capital expenditure - Rm / $m 4,841 6,451
Quarter
ended ended
Sep Jun
2010 2010
US dollar / Imperial
Operating review
Gold
Produced - kg / oz (000) 1,162 1,126
Price received - R/kg / $/oz (239) 1,095
Price received excluding hedge
buy-back costs - R/kg / $/oz 1,141 1,095
Total cash costs - R/kg / $/oz 643 617
Total production costs - R/kg / $/oz 800 759
Financial review
Adjusted gross (loss) profit - Rm / $m (1,229) 359
Adjusted gross profit excluding hedge
buy-back costs - Rm / $m 408 359
Profit (loss) attributable to equity
shareholders - Rm / $m 51 (187)
- cents/share 14 (51)
Adjusted headline (loss) earnings - Rm / $m (1,184) 129
- cents/share (321) 35
Adjusted headline earnings excluding
hedge buy-back costs - Rm / $m 303 129
- cents/share 82 35
Cash flow from operating activities
excluding hedge buy-back costs - Rm / $m 424 386
Capital expenditure - Rm / $m 253 226
Nine months
ended ended
Sep Sep
2010 2009
US dollar / Imperial
Operating review
Gold
Produced - kg / oz (000) 3,367 3,417
Price received - R/kg / $/oz 598 653
Price received excluding hedge
buy-back costs - R/kg / $/oz 1,086 888
Total cash costs - R/kg / $/oz 627 485
Total production costs - R/kg / $/oz 783 612
Financial review
Adjusted gross (loss) profit - Rm / $m (652) 74
Adjusted gross profit excluding hedge
buy-back costs - Rm / $m 986 871
Profit (loss) attributable to equity
shareholders - Rm / $m 20 (743)
- cents/share 5 (207)
Adjusted headline (loss) earnings - Rm / $m (993) (279)
- cents/share (270) (78)
Adjusted headline earnings excluding
hedge buy-back costs - Rm / $m 494 479
- cents/share 134 133
Cash flow from operating activities
excluding hedge buy-back costs - Rm / $m 990 834
Capital expenditure - Rm / $m 650 734
$ represents US dollar, unless otherwise stated
Rounding of figures may result in computational discrepancies
Operations at a glance
for the quarter ended 30 September 2010
Production
oz (000) % Variance 1
SOUTH AFRICA 478 7
Great Noligwa 36 6
Kopanang 79 1
Moab Khotsong 83 19
Tau Lekoa 10 (63)
Mponeng 138 1
Savuka 8 300
TauTona 71 15
Surface Operations 53 33
CONTINENTAL AFRICA 373 1
Ghana
Iduapriem 57 14
Obuasi 75 (3)
Guinea
Siguiri - Attributable 85% 62 (9)
Mali
Morila - Attributable 40% 2 23 -
Sadiola - Attributable 41% 2 30 3
Yatela - Attributable 40% 2 10 (29)
Namibia
Navachab 23 28
Tanzania
Geita 93 3
Non-controlling interests, exploration
and other
AUSTRALASIA 93 7
Australia
Sunrise Dam 93 7
Exploration and other
AMERICAS 218 (1)
Argentina
Cerro Vanguardia - Attributable 92.50% 48 -
Brazil
AngloGold Ashanti Brasil Mineracao 93 19
Serra Grande - Attributable 50% 20 11
United States of America
Cripple Creek & Victor 56 (27)
Non-controlling interests, exploration and other
OTHER
Sub-total 1, 162 3
Equity accounted investments included above
AngloGold Ashanti
Total cash costs
$/oz % Variance 1
SOUTH AFRICA 594 6
Great Noligwa 854 3
Kopanang 663 22
Moab Khotsong 550 (1)
Tau Lekoa 952 3
Mponeng 475 16
Savuka 762 (757)
TauTona 729 7
Surface Operations 418 (13)
CONTINENTAL AFRICA 725 3
Ghana
Iduapriem 576 (7)
Obuasi 831 16
Guinea
Siguiri - Attributable 85% 703 13
Mali
Morila - Attributable 40% 2 790 14
Sadiola - Attributable 41% 2 623 (1)
Yatela - Attributable 40% 2 1,333 85
Namibia
Navachab 751 2
Tanzania
Geita 705 (15)
Non-controlling interests, exploration
and other
AUSTRALASIA 1,064 -
Australia
Sunrise Dam 1,068 4
Exploration and other
AMERICAS 433 4
Argentina
Cerro Vanguardia - Attributable 92.50% 374 8
Brazil
AngloGold Ashanti Brasil Mineracao 415 9
Serra Grande - Attributable 50% 466 (7)
United States of America
Cripple Creek & Victor 495 6
Non-controlling interests, exploration and other
OTHER
Sub-total 643 4
Equity accounted investments included above
AngloGold Ashanti
Adjusted
gross profit excluding hedge
buy-back costs
$m $m Variance 1
SOUTH AFRICA 189 35
Great Noligwa 3 1
Kopanang 22 (2)
Moab Khotsong 23 10
Tau Lekoa 1 (3)
Mponeng 84 7
Savuka 2 -
TauTona 14 5
Surface Operations 38 16
CONTINENTAL AFRICA 109 8
Ghana
Iduapriem 22 8
Obuasi 4 (12)
Guinea
Siguiri - Attributable 85% 25 -
Mali
Morila - Attributable 40% 2 9 (2)
Sadiola - Attributable 41% 2 16 1
Yatela - Attributable 40% 2 (2) (9)
Namibia
Navachab 7 2
Tanzania
Geita 25 23
Non-controlling interests, exploration
and other 4 (3)
AUSTRALASIA (5) (5)
Australia
Sunrise Dam (5) (9)
Exploration and other - 3
AMERICAS 134 8
Argentina
Cerro Vanguardia - Attributable 92.50% 26 (4)
Brazil
AngloGold Ashanti Brasil Mineracao 55 14
Serra Grande - Attributable 50% (8) (14)
United States of America
Cripple Creek & Victor 29 (9)
Non-controlling interests, exploration and other 32 22
OTHER 4 (7)
Sub-total 431 38
Equity accounted investments included above (23) 11
AngloGold Ashanti 408 49
1 Variance September 2010 quarter on June 2010 quarter - increase (decrease).
2 Equity accounted joint ventures.
Rounding of figures may result in computational discrepancies.
Financial and Operating Report
OVERVIEW FOR THE QUARTER
OPERATING RESULTS
Production and total cash costs for the three months to 30 September were both
better than guidance set by the company. Production rose 3% to 1.162Moz from the
previous quarter, while total cash costs rose 4% to $643/oz, due to seasonal
factors and stronger operating currencies. The improved performance was
attributable to a strong recovery in volumes mined in South Africa and
Australia, as well as a steady performance from Continental Africa and the
Americas.
Guidance for the third quarter was 1.150Moz at a total cash cost of $645/oz,
assuming an average exchange rate of R7.55/$. This compares to an average
realised exchange rate of R7.31/$ during the three month period.
SAFETY
Tragically, four fatalities were recorded during the quarter after three
colleagues lost their lives at the South African operations and another in Mali.
The year-to-date lost time injury frequency rate for the group remained largely
unchanged at 6.65, compared to 6.6 a year earlier. The South African operations
recorded 1.6m fatality free shifts during the quarter and 15 incident free days.
Great Noligwa achieved a full fatality- free year and Navachab, Sadiola, Yatela
and Serra Grande went without a single lost-time injury during the quarter.
While the achievements are extremely noteworthy, management remains committed to
achieving the next quantum improvement in safety, with particular focus on
consolidating gains made earlier in the year relating to fall-of-ground and
horizontal transport-related incidents. Modifying the behaviour of AngloGold
Ashanti`s people at every level, with particular regard to risk identification
and tolerance, remains a key focus as AngloGold Ashanti continues to make Safety
our first value.
OPERATING REVIEW
The South African operations produced 478,000oz at a total cash cost of $594/oz
in the third quarter of 2010, compared with 447,000oz at a total cash cost of
$560/oz the previous quarter. The strong result was driven by impressive
performances at the core operations and is noteworthy given the currency
strength during the quarter, as well as winter power tariffs, annual labour
increases, higher royalty payments and the inclusion of the Tau Lekoa mine, the
sale of which was concluded on 1 August 2010. At the Vaal River operations, Moab
Khotsong delivered a 19% increase in production to 83,000oz and a 1% decline in
total cash costs to $550/oz, mainly as a result of fewer safety related
interruptions and a focus on clean mining to reduce underground lock-up and
improved grade. Great Noligwa`s management continued with its plan to return the
mine to profitability, with vamping contributing to the 6% increase in
production to 36,000oz.
Kopanang`s output rose 1% to 79,000oz, due mainly to higher volumes mined. The
Surface operations, which replaced Tau Lekoa feed with marginal ore, achieved a
once-off gain from the resin replacement strategy, which helped achieve a 33%
improvement in production to 53,000oz while total cash costs dropped 13% to
$418/oz. At the West Wits operations, higher yield helped the cornerstone
Mponeng increase output by 1% to 138,000oz, while total cash costs rose 16% to
$475/oz. A rise in grade, due to higher face values, helped drive a 15% increase
in production at TauTona. Savuka made only a marginal contribution as management
continued to evaluate the optimal means of accessing the ore body, following the
extensive damage caused to underground infrastructure by last year`s seismic
event.
Continental Africa`s production rose 1% to 373,000oz at a total cash cost of
$725/oz, from 371,000oz at a total cash cost of $702/oz the previous quarter.
The principal contributor to the improved performance was Iduapriem, which
continued to ramp up after the shutdown earlier in the year to improve its
tailings storage facility. The mine posted a 14% rise in production to 57,000oz,
while total cash costs fell 7% to $576/oz. Obuasi`s production slipped by 3% to
75,000oz due to blocked ore passes and lower-than-anticipated ore reserve
development which restricted access to higher grade ore mining blocks, thereby
impacting mining flexibility. This, along with lower achieved grades, provision
for revision to power tariffs and the once-off settlement of backdated wage
increases, resulted in a 16% increase in total cash costs to $831/oz. Following
the success over the past year in achieving the operational turnaround at Geita,
a multi-disciplinary team reporting directly to the EVP Continental Africa has
been appointed to improve the performance of this key asset. Intermittent power
stoppages and a prolonged maintenance shutdown led to a 9% decline in production
from Siguiri to 62,000oz and a 13% increase in total cash costs to $703/oz.
Navachab`s production increased by 28% to 23,000oz as higher grade ore was mined
from the base of the pit and the operation reaped the benefits of the recently
commissioned dense media separator. Total cash costs rose 2% to $751/oz as
alternative sources of ore were accessed after the existing operations reached
the bottom of the main pit. In Tanzania, higher grades at Geita compensated for
the impact of a major maintenance shutdown, with production up 3% to 93,000oz.
Total cash costs were 15% lower at $705/oz, due to the improved grades and the
efficiencies gained in the operational turnaround plan.
Australasia`s gold production increased by 7% to 93,000oz, as planned. Total
cash costs were constant at $1,064/oz, mainly due to the effect of deferred
stripping charges and ore stockpiles. The total cash costs included $289/oz in
non-cash items relating to deferred stripping and ore stockpiles.
The Americas production declined marginally to 218,000oz at a total cash cost of
$433/oz, from 221,000oz at a total cash cost of $416/oz the previous quarter. At
AngloGold Ashanti Brasil Mineracao, production increased 19% as planned to
93,000oz due to higher tonnages and grade, while the 9% increase in total cash
costs to $415/oz followed annual wage increases, higher power tariffs and
maintenance costs. At Serra Grande, grade improvements helped boost production
by 11% to 20,000oz. In Argentina, Cerro Vanguardia`s production was unchanged at
48,000oz. Total cash costs rose 8% to $374/oz, still the lowest in the group, as
silver recoveries declined and the mine absorbed inflationary pressure and the
cost of the start- up of the underground development project. In the U.S.,
Cripple Creek & Victor`s production slipped 27% to 56,000oz as planned, given
the modified stacking plan which accelerated output in the first half of the
year.Total cash costs rose 6% to $495/oz.
FINANCIAL AND CORPORATE REVIEW
During the quarter, net proceeds of $1.53bn were raised in equal parts of a dual
tranche capital raising comprising equity and a three-year mandatory convertible
bond. These proceeds along with cash and debt facilities were deployed to
eliminate all outstanding hedge commitments, a process of more than a month in
duration, which was concluded on 7 October at an average price of $1,300/oz. The
elimination of AngloGold Ashanti`s residual hedge commitments (which totalled
almost 12Moz at the beginning of 2008 and declined to 3.22Moz at 30 June)
fulfils a crucial strategic objective by ending the practice of selling gold at
discounts to market prices, thus improving future cash flows and earnings. This
enhanced earning capacity should improve the company`s ability to fund an
exciting pipeline of growth projects.
Of the $2.64bn in cash required to conclude this final restructuring of the
hedge book, $1.58bn was spent in the third quarter to reduce commitments from
3.22Moz at 30 June to 1.37Moz at 30 September. The balance of $1.06bn will be
reflected in the fourth quarter, during which the hedge was eliminated.
Adjusted headline earnings, excluding the accelerated hedge buy-back and related
costs, increased 135% to $303m, or 82 U.S. cents a share in the three months to
30 September, from $129m, or 35 U.S. cents the previous quarter. The stronger
performance was due to the improved production performance and sales, higher
gold price and prior-period tax credits and was achieved despite the stronger
local operating currencies, winter power tariffs and annual wage increases in
South Africa. The average gold price received during the quarter, excluding
accelerated hedge buy-back costs, increased 4% to $1,141/oz.
During the quarter, the company generated free cash flow after all outflows
(capital expenditure, interest, taxes and the 2010 interim dividend) of $119m.
In addition, the proceeds from the Tau Lekoa sale received during the quarter
amounted to $64m.
Turning to the balance sheet, major financing transactions were concluded during
the last two quarters.These include the two international rated bonds,
new revolving credit facility (both of which were effected during the second
quarter) and the dual-tranche equity and mandatory convertible bond, effected
during the third quarter, to part-fund the elimination of the hedge book
Following approval by the shareholders to settle the $789m mandatory convertible
bond by the issue of up to a maximum of 18.14m shares, both S&P and Moody`s
confirmed full equity treatment for this instrument and reaffirmed AngloGold
Ashanti`s investment grade credit ratings. This instrument is therefore excluded
from Non-GAAP debt metrics.
The company recorded an adjusted headline loss of $1.18bn and a profit
attributable to equity shareholders of $51m post the accelerated hedge close-
out.
PROJECTS
AngloGold Ashanti incurred capital expenditure of $253m during the quarter, of
which $75m was spent on growth projects. Of the growth-related capital, $43m was
spent in the Americas, $17m in Continental Africa, $13m in South Africa and $2m
in Australasia.
The bankable feasibility study for the Tropicana gold project (AngloGold Ashanti
70%, Independence Group 30%) was completed and subsequently approved for
development by AngloGold Ashanti`s board. Detailed design will commence
immediately, with construction of the access road and plant to follow early next
year.
First gold is expected to be poured in the fourth quarter of 2013.Annual
attributable production in the first three years is estimated at between
329,000oz and 343,000oz, with an average of 231,000oz to 245,000oz over the 10-
year life. Total cash costs for the first three years are estimated at A$580/oz
- A$600/oz ($568/oz - $588/oz at an exchange rate of $0.98/A$) and A$710 -
A$730/oz ($696/oz - $715/oz) over the life of the project ($696 - $715/oz).
Attributable capital expenditure has been estimated at A$508m - A$543m ($498m -
$532m), including escalation and pre-production operating costs.
The mine will use open-cut contract mining of the Tropicana and Havana pits
using conventional drill-and- blast and truck and excavator operations. The
plant will have a throughput rate of 5.8Mt/a on hard rock ore. The plant
comminution circuit comprises two-stage crushing, high pressure grinding rolls,
ball milling and a conventional CIL circuit.
Development of the remote project will require substantial supporting
infrastructure, including construction of 220 km of new road, a sealed all-
weather airstrip, a 550-person village and a water supply from underground
sources about 50 km from the mine. In October, the scoping level economic study
on open-cut mining of the Boston Shaker prospect, located immediately to the
north-east of the Tropicana resource, was completed and a feasibility study is
now being carried out. This is scheduled for completion in mid 2011. Boston
Shaker could potentially add 175,000oz to 350,000oz to life-of-mine production.
During the quarter drilling continued as part of the scoping study to assess the
viability of underground mining of the Havana Deeps mineralisation. A hole
completed after quarter end intersected the mineralised zone 1,028m below
surface and approximately 2,100m down plunge of the open pit design. It is
anticipated that a pre-feasibility study will be carried out at Havana Deeps in
2011.
Exploration drilling resumed in August at the La Colosa deposit in Colombia. The
project team`s focus is on generating metallurgical samples and resource
additions to this world-class project, located in Tolima Department. Core from
the first drill holes has been submitted for assay and the results are awaited.
The pre-feasibility study on the project is expected to be completed in 2013. At
the Gramalote project, in Colombia`s Antioquia Department, AngloGold Ashanti,
increased its stake in the joint venture with B2Gold to 51%, assumed
operatorship and appointed a project manager. Exploration targeting was
initiated for a fourth quarter start and a pre-feasibility study is expected to
be completed on this emerging project in mid-2012.
In Brazil, detailed engineering for refurbishment of the Sao Bento plant at the
Corrego do Sitio project remained on track for completion in January.
Manufacturing of the autoclaves proceeded on schedule and construction and
commissioning of the power lines to the plant was completed in August.
Contractors completed ventilation raises in the underground mine.
At Cerro Vanguardia, mining the base of the existing pits from underground is
designed to lower costs. A trial mine has been developed to provide data for the
feasibility study that is expected to be approved by the end of the year before
implementation of the project in 2011. This portion of the mine is expected to
treat about 2.8Mt of ore at around 11g/t over its life which is expected to run
to 2019. Basic engineering on the heap leach project at Cerro Vanguardia is
substantially complete. Crushing and agglomeration plant has begun to arrive at
site and is expected to be fully delivered by the end of December, while the
contractors to erect the plant have been identified. The pad construction
contract has been awarded and mobilisation set for November. Production from the
pad is expected in the second half of 2011.
At Cripple Creek & Victor, in the U.S., the first gold from the Mine Life
Extension I project is roughly a year ahead of schedule and within its budget.
The stacking of ore on the new liner started in October and first gold is
expected in January. A pre-feasibility study on the Mine Life Extension II
project has started and a full feasibility study is planned next year.
At Kibali, in the Democratic Republic of the Congo, the partners are currently
working on updating the feasibility study, with the optimisation between the
underground and open pit operations, finalisation of mining plans and sizing of
the processing plant the key aspects planned for completion by the end of the
year. Further, optimisation and refinement of the underground mine design and
scheduling are expected to continue into 2011. Work on the resettlement plan is
progressing well and considerable progress has been made on access roads to
site. At Mongbwalu, the interim feasibility study on the project has been
submitted to the government while the full study remains on track for delivery
by March 2011.
EXPLORATION
Total exploration expenditure during the third quarter, inclusive of expenditure
at equity accounted joint ventures, was $72m ($28m on brownfields, $19m on
greenfields and $25m on pre-feasibility studies), compared with $72m the
previous quarter ($26m on brownfields, $26m on greenfields and $20m on pre-
feasibility studies). The following are highlights from the company`s
exploration activities during the quarter.More detail on AngloGold Ashanti`s
exploration programme can be found at www.anglogoldashanti.com.
About 98,000m of greenfields exploration drilling was completed at existing
priority sites and used to delineate new targets in Australia, Canada, Guinea,
Gabon, Colombia and the Solomon Islands. This compares with 82,500m in the
previous quarter. Expenditure was $19m, compared to $26m in the second quarter.
In Australia, AngloGold Ashanti applied for 13,780km2 of mineral exploration
tenements in central Western Australia to test for gold and copper
mineralisation in a frontier exploration region known as the Cornelia Range
project. Exploration continued throughout the Tropicana joint venture tenement,
with a focus on the adjacent Havana resource. The Havana Deeps prospect
represents the extensions of the Havana mineralised system beyond the Havana
Feasibility Study open pit. An underground scoping study, based on drill results
returned to the end of July, commenced in August. Significant gold results
returned during the quarter included 13m @ 6.11g/t Au from 417m, 12m @ 4.51g/t
Au from 508m, 17m @ 4.42g/t Au from 491m, 12m @ 5.32g/t Au from 607m, and 10m @
4.58g/t Au from 303m.
An open pit scoping study on the Boston Shaker deposit, immediately north of
Tropicana, commenced during August following test work completed over an 850m
strike. Significant gold results returned during the reporting period included
18m @ 4.35g/t Au from 34m, 29m @ 3.67g/t Au from 307m, 22m @ 4.38g/t Au from
247m, 10m @ 5.01g/t Au from 135m, 14m @ 3.23g/t Au from 151m, and 14m @ 3.19g/t
Au from 163m.
In the Americas, 5,500m was drilled at the Malrok and Kanosak prospects in
Baffin Island, a joint venture with Commander Resources. At Malrok, a 19 hole
programme included 3m @ 7.65g/t Au from 34m and 3m @ 5.9g/t Au from 44m. Assays
at Kanosak indicate strata-bound gold mineralisation within two layers of gently
dipping siliceous meta-sedimentary rocks distributed over a regional area. Best
results from the first drill programme include 9m @ 2.26g/t Au in the upper
strata and a vein in the deeper layer assaying 1m @ 22.5g/t Au. Additionally,
prospecting work in the Kanosak area discovered two new areas of gold
mineralisation: one between the Kanosak Main and Kanosak North prospects; and
significantly, one located 500m to the northeast of the Kanosak North prospect,
which extends the Kanosak structural corridor to at least 4km. Assay values from
grab samples range from 1.3g/t Au to 226.3g/t Au. The highest grade sample,
taken from an outcrop, contained abundant visible gold. In Colombia, work was
carried out in three regions by AngloGold Ashanti, as well as in joint venture
with Mineros S.A., where 4,000m was drilled in the Amalfi district.
In the Solomon Islands, exploration continued at the Kele and Mase joint
ventures with XDM Resources. At Kele, where work focused on the Vulu and Bopo
prospects, trenching, sampling and 2,537m of diamond drilling was completed
during the quarter. At Mase, geochemical sampling and 990m of diamond drilling
was completed during the quarter. Drilling will continue at both projects until
the end of the field year.
In Continental Africa, the feasibility study over Mongbwalu resource in the
Democratic Republic of the Congo remains on schedule for completion by the end
of March 2011. A 5,000m diamond drilling campaign is planned for drill-testing
regional targets in the Kilo area, while sediment and soil sampling and
reconnaissance mapping is ongoing. In Mali, an AngloGold Ashanti review
identified an opportunity to significantly improve the economics of the Deep
Sulphide Project by converting mineralisation to the North of the main deposit.
A conversion drilling programme commenced in September, with 8,372m RC drilling
already completed and the programme still ongoing. In Guinea, regional
exploration work around the existing Siguiri mine on Blocks 2, 3 and 4 is
ongoing with ground geophysics and drilling taking place throughout the year to
test the various anomalies. The Saraya mineralised trend in Block 2 has been
delineated further southwards for approximately 3km and further resource
definition drilling is planned.
In the Middle East & North Africa, where AngloGold Ashanti works in joint
venture with Thani Investments, sampling and mapping continued at the Wadi
Kareem and Hodine concessions in Egypt. At Hodine, the Hutite prospect returned
encouraging results, with one rock chip sample returning 33m @ 4.37g/t Au
(including 8m @ 8.85g/t Au) in gabbro and ultramafic rocks. The prospect has a
strike length of at least 2km and diamond drilling will commence in the fourth
quarter. In Eritrea, Phase 1 exploration began at the Kerkasha and Akordat North
exploration licences and a 10,000 line km airborne EM survey will be flown in
the fourth quarter. The Alliance maintains very active project generation
activities in other parts of the MENA region.
In South Africa, surface drilling continued in the Project Zaaiplaats area. MMB5
deflection 7 advanced to a depth of 3,236m. The Vaal Reef was intersected at
3,116m and returned a value of 11.87g/t over a true width of 1m. Intersection
drilling continues. MZA9 was stopped and the site cleared and rehabilitated.
MGR8 progressed to a final depth of 3,337m after intersecting the Vaal reef at
3,116m. The reef intersection which was faulted and brecciated returned an assay
value of 15.44g/t over a true width of 1m. Deflection drilling continues. The
MGR6 borehole was recovered by use of a new generation downhole motor and
drilling continues.
OUTLOOK
AngloGold Ashanti`s production for the full year is expected to be 4.5Moz. As
flagged in previous quarters, production issues in Ghana and longer than
expected shut down at Savuka have impacted 2010 production. Total cash costs are
expected to be $635/oz, assuming an average exchange rate of R7.34/$ and oil at
$80/barrel for the 12 month period. (When restated using the original foreign
exchange assumption of R7.70/$, this translates to $613/oz, within guidance).
Fourth quarter production is expected to be 1.140Moz at a total cash cost of
$640/oz assuming an exchange rate of R7.25/$ to $675/oz assuming an exchange
rate of R6.75/$, and oil at $80/barrel. In addition to the residual impact from
the accelerated hedge close outs, as in prior years, fourth quarter results will
be distorted by accounting adjustments relating to the reassessment of useful
asset lives, rehabilitation, tax and inventory provisions.
Notes:
- All references to price received include realised non-hedge derivatives.
- All references to adjusted gross profit (loss) refers to gross profit (loss)
adjusted for unrealised non- hedge derivatives and other commodity contracts and
excludes hedge buy-back costs.
- In the case of joint venture and operations with non-controlling interests,
all production and financial results are attributable to AngloGold Ashanti.
- Rounding of figures may result in computational discrepancies.
Review of the Gold Market
GOLD PRICE MOVEMENT AND INVESTMENT MARKETS
Gold price data
The gold price averaged 2% higher than the previous quarter at $1,226/oz. Whilst
the European debt crisis supported the gold price in the second quarter, and
powered prices to new highs in Euro terms, renewed fears over the US economy
spurred the gold price to a record $1,315/oz on the last day of the third
quarter. The threat of a `double-dip` recession and the prospect of further
quantitative easing, renewed pressure on the US dollar. The spectre of deflation
for some and inflation for others, has increased gold`s appeal as a safe haven.
Consequently several analysts revised price forecasts higher.
Investment
Despite the gold price rally, the investment market has shown an increase of
about 30% year-on-year. The 10 major ETFs continued to grow during the quarter
and stood at more than 66Moz at quarter end. The surge in the value of global
ETF holdings is notable, with a 40% increase in value year to date, representing
some $87bn, of which about $60bn is in the US alone. The COMEX reflected a net
long position of 32Moz and strong coin demand in the US continues to cause
supply shortages. China has shown further positive growth in investment demand
and leading bullion houses reported a steady uptick in gold bar sales. In India,
bar and coin demand remained firm and gold imports reflected the recovery of the
Indian gold market, with imports for July and August almost doubling to 157
tonnes from the 88 tonnes recorded for the same period last year. The Middle
East experienced another flat quarter but there is increasing interest in
bullion from high net worth individuals seeking to exploit price volatility or
maintain the value of their savings.
Official sector
The first year of the third Central Bank Accord expired at the end of September,
with 94 tonnes sold representing the lowest sales yet. Although International
Monetary Fund sales are included under this arrangement, sales remain
significantly below the 400 tonne quota. Much of the IMF sales have been
absorbed by central banks themselves, with Bangladesh`s acquisition of 10 tonnes
the latest sovereign to purchase directly from the IMF.
Jewellery
The Indian jewellery industry also continued to show strong signs of recovery,
with jewellery sales at the end of August at 526 tonnes, compared to jewellery
sales for the whole of 2009 amounting to 559 tonnes. The strong Rupee is
softening the impact of the higher dollar gold price, with robust sales expected
over the Diwali festival. A good monsoon season will have put more money in the
hands of the rural market over high demand season. In China, gold jewellery
retail demand grew between 6% and 8% year on year. August and September remain
peak buying times, with festivals such as Teacher`s day, Moon Festival and
National day spurring gold sales. Manufacturers using 18 carat (K-Gold) gold
reported orders increasing by 12-20%, while 24 carat manufacturers saw gains of
8-10% year-on-year. In the Middle East, third-quarter jewellery demand got off
to a good start with the wedding season in July stimulating sales, which were
further bolstered by purchases from expatriates returning home with gold as
gifts. However, the advent of Ramadan in August slowed consumption. In the US
market, the high gold price and weak dollar took a further toll on the already
frail jewellery market and demand was flat compared with the previous quarter.
Hedge position
As at 30 September 2010, AngloGold Ashanti had the following total outstanding
commitments against future production. The total ounces committed on this date
was 1.37Moz or 43t (as at 30 June 2010: 3.22Moz or 100t) and the total net delta
tonnage of the hedge on this date was 1.33Moz or 41t (at 30 June 2010: 3.06Moz
or 95t).
The marked-to-market value of all hedge transactions making up the hedge
positions in the table below was a negative $0.98bn (negative R6.80bn) as at 30
September 2010 (at 30 June 2010: negative $2.41bn - negative R18.40bn). The
value was based on a gold price of $1,309.85/oz, exchange rates of R6.96/$ and
A$/$0.9666 and the prevailing market interest rates and volatilities at the
time.
All hedge positions were eliminated by 7 October, 2010.
The following table indicates the group`s commodity hedge position at 30
September 2010:
Year 2010 2011 2012 2013
US DOLLAR/GOLD
Forward
contracts Amount (oz) 589,307 *(37,500) *(25,000)
US$/oz $554 *$534 *$641
Put options
sold Amount (oz) 213,965 148,000 85,500 60,500
US$/oz $1,129 $623 $538 $440
Call options
sold Amount (oz) 323,725 237,180
US$/oz $645 $591
RAND/GOLD
Put options
sold Amount (oz) 10,000
ZAR/oz R7,550
** Total net
gold: Delta (oz) (584,387) 37,727 (284,449) (229,676)
Committed (oz) (589,307) 37,500 (298,725) (237,180)
Year 2014 2015 Total
US DOLLAR/GOLD
Forward contracts Amount (oz) 526,807
US$/oz $551
Put options sold Amount (oz) 60,500 568,465
US$/oz $450 $763
Call options sold Amount (oz) 255,680 29,000 845,585
US$/oz $620 $670 $623
RAND/GOLD
Put options sold Amount (oz) 10,000
ZAR/oz R7,550
** Total net gold: Delta (oz) (241,695) (26,954) (1,329,434)
Committed (oz) (255,680) (29,000) (1,372,392)
* Represents a net long gold position and net short US Dollars and Rands
resulting from both forward sales and purchases for the period.
** 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 options
formula with the ruling market prices, interest rates and volatilities as at 30
September 2010.
Fair value of derivative analysis by accounting designation at 30 September
2010:
Non-hedge
accounted
Figures in millions
Total
US Dollar
Commodity option contracts (586)
Forward sale commodity contracts (400)
Total hedging contracts (986)
Embedded derivatives (1)
Warrants on shares 1
Option component of convertible bond (135)
Total derivatives (1,121)
Credit risk adjustment (30)
Total derivatives - before credit risk adjustment (1,151)
Rounding of figures may result in computational discrepancies.
Group income statement
Quarter Quarter
ended ended
September June
2010 2010
SA Rand million Notes Unaudited Unaudited
Revenue 2 10,668 9,918
Gold income 10,372 9,625
Cost of sales 3 (6,659) (6,099)
Loss on non-hedge derivatives and other
commodity contracts 4 (1,041) (3,625)
Gross profit (loss) 2,672 (99)
Corporate administration and other expenses (350) (371)
Market development costs (26) (21)
Exploration costs (440) (391)
Other operating expenses 5 (50) (15)
Special items 6 (424) (89)
Operating profit (loss) 1,382 (986)
Interest received 58 70
Exchange (loss) gain (113) (1)
Fair value adjustment on option component of
convertible bond (166) 129
Finance costs and unwinding of obligations 7 (285) (323)
Fair value loss on mandatory convertible bond (160) -
Share of equity accounted investments` profit 151 89
Profit (loss) before taxation 867 (1,022)
Taxation 8 (318) (264)
Profit (loss) for the period 549 (1,286)
Allocated as follows:
Equity shareholders 443 (1,360)
Non-controlling interests 106 74
549 (1,286)
Basic profit (loss) per ordinary share
(cents) 1 120 (371)
Diluted profit (loss) per ordinary share
(cents) 2 120 (371)
Quarter Nine months Nine months
ended ended ended
September September September
2009 2010 2009
SA Rand million Unaudited Unaudited Unaudited
Revenue 8,806 29,040 22,447
Gold income 8,512 28,220 21,511
Cost of sales (6,168) (18,819) (17,001)
Loss on non-hedge derivatives and
other
commodity contracts (11,216) (4,607) (9,228)
Gross profit (loss) (8,872) 4,794 (4,718)
Corporate administration and other
expenses (264) (1,003) (916)
Market development costs (24) (67) (77)
Exploration costs (311) (1,108) (776)
Other operating expenses (36) (122) (137)
Special items (231) (686) 448
Operating profit (loss) (9,738) 1,808 (6,176)
Interest received 121 192 311
Exchange (loss) gain 25 (75) 326
Fair value adjustment on option
component of
convertible bond (60) 319 (183)
Finance costs and unwinding of
obligations (305) (846) (879)
Fair value loss on mandatory
convertible bond - (160) -
Share of equity accounted
investments` profit 175 403 558
Profit (loss) before taxation (9,782) 1,641 (6,043)
Taxation 1,650 (1,140) 351
Profit (loss) for the period (8,132) 501 (5,692)
Allocated as follows:
Equity shareholders (8,245) 233 (5,940)
Non-controlling interests 113 268 248
(8,132) 501 (5,692)
Basic profit (loss) per ordinary
share (cents) 1 (2,286) 63 (1,653)
Diluted profit (loss) per ordinary
share (cents) 2 (2,286) 63 (1,653)
1 Calculated on the basic weighted average number of ordinary shares.
2 Calculated on the diluted weighted average number of ordinary shares.
Rounding of figures may result in computational discrepancies.
Group income statement
Quarter Quarter
ended ended
September June
2010 2010
US Dollar million Notes Unaudited Unaudited
Revenue 2 1,461 1,314
Gold income 1,420 1,275
Cost of sales 3 (911) (810)
Loss on non-hedge derivatives and other
commodity contracts 4 (152) (486)
Gross profit (loss) 357 (21)
Corporate administration and other expenses (48) (49)
Market development costs (4) (2)
Exploration costs (60) (52)
Other operating expenses 5 (7) (2)
Special items 6 (60) (12)
Operating profit (loss) 178 (138)
Interest received 8 9
Exchange (loss) gain (16) -
Fair value adjustment on option component of
convertible bond (24) 17
Finance costs and unwinding of obligations 7 (39) (43)
Fair value loss on mandatory convertible bond (22) -
Share of equity accounted investments` profit 21 11
Profit (loss) before taxation 106 (144)
Taxation 8 (41) (33)
Profit (loss) for the period 65 (177)
Allocated as follows:
Equity shareholders 51 (187)
Non-controlling interests 14 10
65 (177)
Basic profit (loss) per ordinary share (cents) 1 14 (51)
Diluted profit (loss) per ordinary share (cents) 2 14 (51)
Quarter Nine months Nine months
ended ended ended
September September September
2009 2010 2009
US Dollar million Unaudited Unaudited Unaudited
Revenue 1,140 3,901 2,642
Gold income 1,101 3,791 2,533
Cost of sales (796) (2,529) (1,981)
Loss on non-hedge derivatives and
other
commodity contracts (1,421) (625) (1,170)
Gross profit (loss) (1,116) 637 (618)
Corporate administration and other
expenses (34) (135) (105)
Market development costs (3) (9) (9)
Exploration costs (40) (149) (91)
Other operating expenses (5) (16) (16)
Special items (31) (95) 55
Operating profit (loss) (1,229) 233 (784)
Interest received 16 26 36
Exchange (loss) gain 3 (11) 40
Fair value adjustment on option
component of
convertible bond (9) 40 (24)
Finance costs and unwinding of
obligations (39) (114) (103)
Fair value loss on mandatory
convertible bond - (22) -
Share of equity accounted
investments` profit 22 54 64
Profit (loss) before taxation (1,236) 206 (771)
Taxation 209 (149) 57
Profit (loss) for the period (1,027) 57 (714)
Allocated as follows:
Equity shareholders (1,042) 20 (743)
Non-controlling interests 15 37 29
(1,027) 57 (714)
Basic profit (loss) per ordinary
share (cents) 1 (289) 5 (207)
Diluted profit (loss) per ordinary
share (cents) 2 (289) 5 (207)
1 Calculated on the basic weighted average number of ordinary shares.
2 Calculated on the diluted weighted average number of ordinary shares.
Rounding of figures may result in computational discrepancies.
Group statement of comprehensive income
Quarter Quarter Quarter
ended ended ended
September June September
2010 2010 2009
SA Rand million Unaudited Unaudited Unaudited
Profit (loss) for the period 549 (1,286) (8,132)
Exchange differences on translation of
foreign
operations (1,100) 373 325
Share of equity accounted investments` other
comprehensive expense (income) 2 (4) -
Net gain (loss) on cash flow hedges - 1 (142)
Net loss on cash flow hedges removed from
equity and reported in gold income - - 122
Hedge (effectiveness) ineffectiveness on
cash flow hedges - - (18)
Realised gain (loss) on hedges of capital items - 1 (35)
Deferred taxation thereon (1) - 17
(1) 2 (56)
Net gain on available for sale financial
assets 43 144 100
Release on disposal of available for sale
financial assets - (41) -
Deferred taxation thereon - 12 (4)
43 115 96
Other comprehensive (expense) income
for the period net of tax (1,056) 486 365
Total comprehensive expense for the
period net of tax (507) (800) (7,767)
Allocated as follows:
Equity shareholders (613) (874) (7,880)
Non-controlling interests 106 74 113
(507) (800) (7,767)
Nine months Nine months
ended ended
September September
2010 2009
SA Rand million Unaudited Unaudited
Profit (loss) for the period 501 (5,692)
Exchange differences on translation of foreign
operations (1,007) (2,027)
Share of equity accounted investments` other
comprehensive expense (income) (2) -
Net gain (loss) on cash flow hedges - 8
Net loss on cash flow hedges removed from
equity and reported in gold income 279 974
Hedge (effectiveness) ineffectiveness on
cash flow hedges - 25
Realised gain (loss) on hedges of capital items 2 (14)
Deferred taxation thereon (99) (250)
182 743
Net gain on available for sale financial assets 142 136
Release on disposal of available for sale
financial assets (41) -
Deferred taxation thereon 13 (8)
114 128
Other comprehensive (expense) income
for the period net of tax (713) (1,156)
Total comprehensive expense for the period net of tax (212) (6,848)
Allocated as follows:
Equity shareholders (480) (7,106)
Non-controlling interests 268 258
(212) (6,848)
Rounding of figures may result in computational discrepancies.
Group statement of comprehensive income
Quarter Quarter Quarter
ended ended ended
September June September
2010 2010 2009
US Dollar million Unaudited Unaudited Unaudited
Profit (loss) for the period 65 (177) (1,027)
Exchange differences on translation of
foreign operations 151 (83) 74
Share of equity accounted investments` other
comprehensive expense (income) 1 (1) -
Net (loss) gain on cash flow hedges - - (15)
Net loss on cash flow hedges removed from
equity and reported in gold income - - 19
Hedge (effectiveness) ineffectiveness on
cash flow hedges - - (2)
Realised loss on hedges of capital items - - (4)
Deferred taxation thereon - - 1
- - (1)
Net gain on available for sale financial
assets 5 20 12
Release on disposal of available for sale
financial assets - (6) -
Deferred taxation thereon - 2 (1)
5 16 11
Other comprehensive income (expense)
for the period net of tax 157 (68) 84
Total comprehensive income (expense)
for the period net of tax 222 (245) (943)
Allocated as follows:
Equity shareholders 206 (255) (958)
Non-controlling interests 16 10 15
222 (245) (943)
Nine months Nine months
ended ended
September September
2010 2009
US Dollar million Unaudited Unaudited
Profit (loss) for the period 57 (714)
Exchange differences on translation of foreign operations 90 362
Share of equity accounted investments` other
comprehensive expense (income) - -
Net (loss) gain on cash flow hedges - 1
Net loss on cash flow hedges removed from
equity and reported in gold income 38 112
Hedge (effectiveness) ineffectiveness on cash flow hedges - 3
Realised loss on hedges of capital items - (2)
Deferred taxation thereon (13) (32)
25 82
Net gain on available for sale financial assets 19 16
Release on disposal of available for sale
financial assets (6) -
Deferred taxation thereon 2 (1)
15 15
Other comprehensive income (expense)
for the period net of tax 130 459
Total comprehensive income (expense)
for the period net of tax 187 (255)
Allocated as follows:
Equity shareholders 150 (285)
Non-controlling interests 37 30
187 (255)
Rounding of figures may result in computational discrepancies.
Group statement of financial position
As at As at
September June
2010 2010
SA Rand million Note Unaudited Unaudited
ASSETS
Non-current assets
Tangible assets 41,489 43,625
Intangible assets 1,296 1,272
Investments in associates and equity
accounted joint ventures 4,329 4,559
Other investments 1,627 1,512
Inventories 2,268 2,422
Trade and other receivables 994 1,022
Derivatives 8 19
Deferred taxation 88 28
Cash restricted for use 214 345
Other non-current assets 92 102
52,405 54,906
Current assets
Inventories 5,860 6,061
Trade and other receivables 1,588 1,595
Derivatives 453 1,148
Current portion of other non-current assets 2 2
Cash restricted for use 84 106
Cash and cash equivalents 9,313 6,607
17,300 15,519
Non-current assets held for sale 114 653
17,414 16,172
TOTAL ASSETS 69,819 71,078
EQUITY AND LIABILITIES
Share capital and premium 11 45,598 40,057
Retained earnings and other reserves (19,159) (18,414)
Non-controlling interests 916 939
Total equity 27,355 22,582
Non-current liabilities
Borrowings 17,363 12,556
Environmental rehabilitation and other provisions 3,332 3,459
Provision for pension and post-retirement benefits 1,187 1,189
Trade, other payables and deferred income 119 150
Derivatives 947 852
Deferred taxation 5,776 5,200
28,724 23,406
Current liabilities
Current portion of borrowings 1,864 185
Trade, other payables and deferred income 4,061 4,065
Derivatives 7,316 19,646
Taxation 499 1,134
13,740 25,030
Non-current liabilities held for sale - 60
13,740 25,090
Total liabilities 42,464 48,496
TOTAL EQUITY AND LIABILITIES 69,819 71,078
Net asset value - cents per share 7,127 6,174
As at As at
December September
2009 2009
SA Rand million Audited Unaudited
ASSETS
Non-current assets
Tangible assets 43,263 37,416
Intangible assets 1,316 1,315
Investments in associates and equity accounted joint
ventures 4,758 1,890
Other investments 1,302 961
Inventories 2,508 2,550
Trade and other receivables 788 766
Derivatives 40 -
Deferred taxation 451 487
Cash restricted for use 394 380
Other non-current assets 63 30
54,883 45,795
Current assets
Inventories 5,102 4,997
Trade and other receivables 1,419 3,586
Derivatives 2,450 2,900
Current portion of other non-current assets 3 2
Cash restricted for use 87 121
Cash and cash equivalents 8,176 8,328
17,237 19,934
Non-current assets held for sale 650 642
17,887 20,576
TOTAL ASSETS 72,770 66,371
EQUITY AND LIABILITIES
Share capital and premium 39,834 39,759
Retained earnings and other reserves (18,276) (21,601)
Non-controlling interests 966 848
Total equity 22,524 19,006
Non-current liabilities
Borrowings 4,862 12,512
Environmental rehabilitation and other provisions 3,351 3,530
Provision for pension and post-retirement benefits 1,179 1,280
Trade, other payables and deferred income 108 107
Derivatives 1,310 1,249
Deferred taxation 5,599 4,272
16,409 22,950
Current liabilities
Current portion of borrowings 9,493 1,867
Trade, other payables and deferred income 4,332 4,449
Derivatives 18,770 16,954
Taxation 1,186 1,079
33,781 24,349
Non-current liabilities held for sale 56 66
33,837 24,415
Total liabilities 50,246 47,365
TOTAL EQUITY AND LIABILITIES 72,770 66,371
Net asset value - cents per share 6,153 5,195
Rounding of figures may result in computational discrepancies.
Group statement of financial position
As at As at
September June
2010 2010
US Dollar million Note Unaudited Unaudited
ASSETS
Non-current assets
Tangible assets 5,961 5,718
Intangible assets 186 167
Investments in associates and equity
accounted joint ventures 622 598
Other investments 234 198
Inventories 326 317
Trade and other receivables 143 134
Derivatives 1 2
Deferred taxation 13 4
Cash restricted for use 31 45
Other non-current assets 13 13
7,530 7,196
Current assets
Inventories 842 794
Trade and other receivables 228 209
Derivatives 65 150
Current portion of other non-current assets - -
Cash restricted for use 12 14
Cash and cash equivalents 1,338 866
2,485 2,033
Non-current assets held for sale 17 86
2,502 2,119
TOTAL ASSETS 10,032 9,315
EQUITY AND LIABILITIES
Share capital and premium 11 6,615 5,834
Retained earnings and other reserves (2,817) (2,998)
Non-controlling interests 132 123
Total equity 3,930 2,959
Non-current liabilities
Borrowings 2,495 1,646
Environmental rehabilitation and other
provisions 479 453
Provision for pension and post-retirement
benefits 170 156
Trade, other payables and deferred income 17 20
Derivatives 136 112
Deferred taxation 830 681
4,127 3,068
Current liabilities
Current portion of borrowings 268 24
Trade, other payables and deferred income 584 533
Derivatives 1,051 2,575
Taxation 72 148
1,975 3,280
Non-current liabilities held for sale - 8
1,975 3,288
Total liabilities 6,102 6,356
TOTAL EQUITY AND LIABILITIES 10,032 9,315
Net asset value - cents per share 1,024 809
As at As at
December September
2009 2009
US Dollar million Audited Unaudited
ASSETS
Non-current assets
Tangible assets 5,819 4,980
Intangible assets 177 175
Investments in associates and equity accounted joint
ventures 640 252
Other investments 175 128
Inventories 337 339
Trade and other receivables 106 102
Derivatives 5 -
Deferred taxation 61 65
Cash restricted for use 53 51
Other non-current assets 8 4
7,381 6,096
Current assets
Inventories 686 665
Trade and other receivables 191 477
Derivatives 330 386
Current portion of other non-current assets - -
Cash restricted for use 12 16
Cash and cash equivalents 1,100 1,108
2,319 2,652
Non-current assets held for sale 87 85
2,406 2,737
TOTAL ASSETS 9,787 8,833
EQUITY AND LIABILITIES
Share capital and premium 5,805 5,794
Retained earnings and other reserves (2,905) (3,378)
Non-controlling interests 130 113
Total equity 3,030 2,529
Non-current liabilities
Borrowings 654 1,665
Environmental rehabilitation and other provisions 451 470
Provision for pension and post-retirement benefits 159 170
Trade, other payables and deferred income 14 14
Derivatives 176 166
Deferred taxation 753 569
2,207 3,054
Current liabilities
Current portion of borrowings 1,277 249
Trade, other payables and deferred income 582 592
Derivatives 2,525 2,256
Taxation 159 144
4,543 3,241
Non-current liabilities held for sale 7 9
4,550 3,250
Total liabilities 6,757 6,304
TOTAL EQUITY AND LIABILITIES 9,787 8,833
Net asset value - cents per share 828 691
Rounding of figures may result in computational discrepancies.
Group statement of cash flows
Quarter Quarter Quarter
ended ended ended
September June September
2010 2010 2009
SA Rand million Unaudited Unaudited Unaudited
Cash flows from operating activities
Receipts from customers 10,566 10,030 8,545
Payments to suppliers and employees (7,105) (6,992) (6,147)
Cash generated from operations 3,461 3,038 2,398
Dividends received from equity accounted
investments 116 488 21
Taxation paid (339) (563) (234)
Cash utilised for hedge buy-back costs (11,021) - (6,315)
Net cash (outflow) inflow from operating
activities (7,783) 2,963 (4,130)
Cash flows from investing activities
Capital expenditure (1,771) (1,600) (1,836)
Proceeds from disposal of tangible assets 468 4 43
Other investments acquired (432) (127) (328)
Acquisition of associates and equity
accounted joint ventures (48) (99) -
Proceeds on disposal of associate - - -
Loans advanced to associates and equity
accounted joint ventures - (6) -
Loans repaid from associates and equity
accounted joint ventures - - -
Proceeds from disposal of investments 280 127 258
Decrease (increase) in cash restricted
for use 142 36 (16)
Interest received 57 56 129
Loans advanced 4 (1) -
Repayment of loans advanced - - 1
Net cash (outflow) inflow from investing
activities (1,300) (1,610) (1,749)
Cash flows from financing activities
Proceeds from issue of share capital 5,596 26 2,215
Share issue expenses (113) - (34)
Proceeds from borrowings 7,139 7,383 6,709
Repayment
Repayment of borrowings (21) (7 263) (12,957)
Finance costs paid (46) (301) (110)
Mandatory convertible bond transaction
costs (155) - -
Dividends paid (264) (182) (253)
Net cash inflow (outflow) from financing
activities 12,136 (337) (4,430)
Net increase (decrease) in cash and cash
equivalents 3,053 1,016 (10,309)
Translation (347) 245 869
Cash and cash equivalents at beginning
of period 6,607 5,346 17,768
Cash and cash equivalents at end of period 9,313 6,607 8,328
Cash generated from operations
Profit (loss) before taxation 867 (1,022) (9,782)
Adjusted for:
Movement on non-hedge derivatives and
other commodity contracts 241 2,878 11,041
Amortisation of tangible assets 1,240 1,173 1,107
Finance costs and unwinding of
obligations 285 323 305
Environmental, rehabilitation and other
expenditure 53 (18) 33
Special items 542 86 231
Amortisation of intangible assets 4 4 4
Deferred stripping 237 324 (96)
Fair value adjustment on option
component of convertible bond 166 (129) 60
Fair value loss on mandatory convertible bond 160 - -
Interest received (58) (70) (121)
Share of equity accounted investments`
profit (151) (89) (175)
Other non-cash movements 88 9 23
Movements in working capital (213) (431) (232)
3,461 3,038 2,398
Movements in working capital
Decrease (increase) in inventories 306 (775) 104
Increase in trade and other receivables (80) (199) (125)
(Decrease) increase in trade and other
payables (439) 543 (211)
(213) (431) (232)
Nine months Nine months
ended ended
September September
2010 2009
SA Rand million Unaudited Unaudited
Cash flows from operating activities
Receipts from customers 28,762 21,877
Payments to suppliers and employees (20,737) (15,008)
Cash generated from operations 8,025 6,869
Dividends received from equity accounted investments 721 615
Taxation paid (1,219) (998)
Cash utilised for hedge buy-back costs (11,021) (6,315)
Net cash (outflow) inflow from operating activities (3,494) 171
Cash flows from investing activities
Capital expenditure (4,638) (6,413)
Proceeds from disposal of tangible assets 488 7,216
Other investments acquired (680) (521)
Acquisition of associates and equity accounted
joint ventures (219) (9)
Proceeds on disposal of associate 4 -
Loans advanced to associates and equity accounted
joint ventures (22) -
Loans repaid from associates and equity accounted
joint ventures - 3
Proceeds from disposal of investments 461 484
Decrease (increase) in cash restricted for use 174 (110)
Interest received 173 316
Loans advanced (33) (1)
Repayment of loans advanced 1 2
Net cash (outflow) inflow from investing activities (4,291) 967
Cash flows from financing activities
Proceeds from issue of share capital 5,625 2,345
Share issue expenses (113) (45)
Proceeds from borrowings 14,786 24,739
Repayment
Repayment of borrowings (9 926) (24,095)
Finance costs paid (422) (766)
Mandatory convertible bond transaction costs (155) -
Dividends paid (707) (431)
Net cash inflow (outflow) from financing activities 9,088 1,747
Net increase (decrease) in cash and cash equivalents 1,303 2,885
Translation (166) 5
Cash and cash equivalents at beginning of period 8,176 5,438
Cash and cash equivalents at end of period 9,313 8,328
Cash generated from operations
Profit (loss) before taxation 1,641 (6,043)
Adjusted for:
Movement on non-hedge derivatives and other
commodity contracts 2,448 12,136
Amortisation of tangible assets 3,680 3,463
Finance costs and unwinding of obligations 846 879
Environmental, rehabilitation and other expenditure 66 22
Special items 796 (441)
Amortisation of intangible assets 11 14
Deferred stripping 765 (671)
Fair value adjustment on option component of
convertible bond (319) 183
Fair value loss on mandatory convertible bond 160 -
Interest received (192) (311)
Share of equity accounted investments` profit (403) (558)
Other non-cash movements 118 (179)
Movements in working capital (1,592) (1,625)
8,025 6,869
Movements in working capital
Decrease (increase) in inventories (565) 817
Increase in trade and other receivables (582) (332)
(Decrease) increase in trade and other payables (445) (2,110)
(1,592) (1,625)
Rounding of figures may result in computational discrepancies.
Group statement of cash flows
Quarter Quarter Quarter
ended ended ended
September June September
2010 2010 2009
US Dollar million Unaudited Unaudited Unaudited
Cash flows from operating activities
Receipts from customers 1,441 1,332 1,104
Payments to suppliers and employees (995) (934) (741)
Cash generated from operations 446 398 363
Dividends received from equity accounted
investments 25 63 5
Taxation paid (47) (75) (32)
Cash utilised for hedge buy-back costs (1,550) - (797)
Net cash (outflow) inflow from operating
activities (1,126) 386 (461)
Cash flows from investing activities
Capital expenditure (242) (212) (239)
Proceeds from disposal of tangible assets 64 1 5
Other investments acquired (58) (17) (39)
Acquisition of associates and equity
accounted joint ventures (6) (13) -
Proceeds on disposal of associate - - -
Loans advanced to associates and equity
accounted joint ventures - (1) -
Loans repaid from associates and equity
accounted joint ventures - - -
Proceeds from disposal of investments 38 17 31
Decrease (increase) in cash restricted
for use 19 5 (2)
Interest received 8 7 17
Loans advanced - - -
Repayment of loans advanced - - -
Net cash (outflow) inflow from investing
activities (177) (213) (227)
Cash flows from financing activities
Proceeds from issue of share capital 790 3 287
Share issue expenses (16) - (5)
Proceeds from borrowings 1,011 995 784
Repayment
Repayment of borrowings (3) (963) (1 573)
Finance costs paid (8) (40) (16)
Mandatory convertible bond transaction
costs (22) - -
Dividends paid (37) (24) (32)
Net cash inflow (outflow) from financing
activities 1,715 (29) (555)
Net increase (decrease) in cash and cash
equivalents 412 144 (1,243)
Translation 60 (11) 46
Cash and cash equivalents at beginning
of period 866 733 2,305
Cash and cash equivalents at end of period 1,338 866 1,108
Cash generated from operations
Profit (loss) before taxation 106 (144) (1,236)
Adjusted for:
Movement on non-hedge derivatives and
other commodity contracts 43 387 1,398
Amortisation of tangible assets 170 156 143
Finance costs and unwinding of obligations 39 43 39
Environmental, rehabilitation and other
expenditure 8 (2) 5
Special items 76 11 31
Amortisation of intangible assets - - 1
Deferred stripping 32 43 (13)
Fair value adjustment on option
component of convertible bond 24 (17) 9
Fair value loss on mandatory convertible
bond 22 - -
Interest received (8) (9) (16)
Share of equity accounted investments`
profit (21) (11) (22)
Other non-cash movements 13 1 3
Movements in working capital (58) (60) 21
446 398 363
Movements in working capital
Increase in inventories (63) (55) (12)
Increase in trade and other receivables (34) (17) (25)
Increase in trade and other payables 39 12 58
(58) (60) 21
Nine months Nine months
ended ended
September September
2010 2009
US Dollar million Unaudited Unaudited
Cash flows from operating activities
Receipts from customers 3,859 2,561
Payments to suppliers and employees (2,809) (1,694)
Cash generated from operations 1,050 867
Dividends received from equity accounted
investments 104 82
Taxation paid (164) (115)
Cash utilised for hedge buy-back costs (1,550) (797)
Net cash (outflow) inflow from operating activities (560) 37
Cash flows from investing activities
Capital expenditure (623) (737)
Proceeds from disposal of tangible assets 67 900
Other investments acquired (91) (60)
Acquisition of associates and equity accounted
joint ventures (29) (1)
Proceeds on disposal of associate - -
Loans advanced to associates and equity accounted
joint ventures (3) -
Loans repaid from associates and equity accounted
joint ventures - -
Proceeds from disposal of investments 62 56
Decrease (increase) in cash restricted for use 23 (11)
Interest received 23 37
Loans advanced (4) -
Repayment of loans advanced - -
Net cash (outflow) inflow from investing activities (575) 184
Cash flows from financing activities
Proceeds from issue of share capital 793 301
Share issue expenses (16) (6)
Proceeds from borrowings 2,040 2,745
Repayment
Repayment of borrowings (1 318) (2,708)
Finance costs paid (57) (88)
Mandatory convertible bond transaction costs (22) -
Dividends paid (96) (50)
Net cash inflow (outflow) from financing activities 1,324 194
Net increase (decrease) in cash and cash equivalents 189 415
Translation 49 118
Cash and cash equivalents at beginning of period 1,100 575
Cash and cash equivalents at end of period 1,338 1,108
Cash generated from operations
Profit (loss) before taxation 206 (771)
Adjusted for:
Movement on non-hedge derivatives and other
commodity contracts 336 1,481
Amortisation of tangible assets 494 400
Finance costs and unwinding of obligations 114 103
Environmental, rehabilitation and other expenditure 9 3
Special items 110 (54)
Amortisation of intangible assets 1 2
Deferred stripping 103 (75)
Fair value adjustment on option component of
convertible bond (40) 24
Fair value loss on mandatory convertible bond 22 -
Interest received (26) (36)
Share of equity accounted investments` profit (54) (64)
Other non-cash movements 17 (24)
Movements in working capital (242) (122)
1,050 867
Movements in working capital
Increase in inventories (151) (120)
Increase in trade and other receivables (95) (100)
Increase in trade and other payables 4 98
(242) (122)
Rounding of figures may result in computational discrepancies.
Group statement of changes in equity
Cash
Share Other flow
capital & capital Retained hedge
SA Rand million premium reserves earnings reserve
Balance at December 2008 37,336 799 (22,765) (1,008)
(Loss) profit for the period (5,940)
Comprehensive income (expense) 733
Total comprehensive (expense)
income - - (5,940) 733
Shares issued 2,423
Share-based payment for share
awards 120
Dividends paid (392)
Dividends of subsidiaries
Translation (23) 138 43
Balance at September 2009 39,759 896 (28,959) (232)
Balance at December 2009 39,834 1,194 (25,739) (174)
Profit for the period 233
Comprehensive (expense) income (2) 182
Total comprehensive (expense)
income - (2) 233 182
Shares issued 5,764
Share-based payment for share
awards 45
Dividends paid (492)
Dividends of subsidiaries
Transfers to other reserves 25 (25)
Translation (15) 89 1
Balance at September 2010 45,598 1,247 (25,909) (16)
US Dollar million
Balance at December 2008 5,485 85 (2,361) (107)
(Loss) profit for the period (743)
Comprehensive income 81
Total comprehensive (expense)
income - - (743) 81
Shares issued 309
Share-based payment for share awards 14
Dividends paid (45)
Dividends of subsidiaries
Translation 20 (12) (5)
Balance at September 2009 5,794 119 (3,161) (31)
Balance at December 2009 5,805 161 (2,744) (23)
Profit for the period 20
Comprehensive income 25
Total comprehensive income - - 20 25
Shares issued 811
Share-based payment for share awards 6
Dividends paid (67)
Dividends of subsidiaries
Transfers to other reserves 3 (3)
Translation 9 (7) (1)
Balance at September 2010 6,615 179 (2,798) (2)
Available Foreign
for Actuarial currency
sale (losses) translation
SA Rand million reserve gains reserve
Balance at December 2008 (18) (347) 8,959
(Loss) profit for the period
Comprehensive income (expense) 128 (2,027)
Total comprehensive (expense) income 128 - (2,027)
Shares issued
Share-based payment for share awards
Dividends paid
Dividends of subsidiaries
Translation (3) 2
Balance at September 2009 107 (345) 6,932
Balance at December 2009 414 (285) 6,314
Profit for the period
Comprehensive (expense) income 114 (1,007)
Total comprehensive (expense) income 114 - (1,007)
Shares issued
Share-based payment for share awards
Dividends paid
Dividends of subsidiaries
Transfers to other reserves
Translation (31)
Balance at September 2010 497 (285) 5,307
US Dollar million
Balance at December 2008 (2) (37) (635)
(Loss) profit for the period
Comprehensive income 15 362
Total comprehensive (expense) income 15 - 362
Shares issued
Share-based payment for share awards
Dividends paid
Dividends of subsidiaries
Translation 1 (9)
Balance at September 2009 14 (46) (273)
Balance at December 2009 56 (38) (317)
Profit for the period
Comprehensive income 15 90
Total comprehensive income 15 - 90
Shares issued
Share-based payment for share awards
Dividends paid
Dividends of subsidiaries
Transfers to other reserves
Translation (3)
Balance at September 2010 71 (41) (227)
Non-
controlling Total
SA Rand million Total interests equity
Balance at December 2008 22,956 790 23,746
(Loss) profit for the period (5,940) 248 (5,692)
Comprehensive income (expense) (1,166) 10 (1,156)
Total comprehensive (expense) income (7,106) 258 (6,848)
Shares issued 2,423 2,423
Share-based payment for share awards 120 120
Dividends paid (392) (392)
Dividends of subsidiaries - (43) (43)
Translation 157 (157) -
Balance at September 2009 18,158 848 19,006
Balance at December 2009 21,558 966 22,524
Profit for the period 233 268 501
Comprehensive (expense) income (713) (713)
Total comprehensive (expense) income (480) 268 (212)
Shares issued 5,764 5,764
Share-based payment for share awards 45 45
Dividends paid (492) (492)
Dividends of subsidiaries - (274) (274)
Transfers to other reserves - -
Translation 44 (44) -
Balance at September 2010 26,439 916 27,355
US Dollar million
Balance at December 2008 2,428 83 2,511
(Loss) profit for the period (743) 29 (714)
Comprehensive income 458 1 459
Total comprehensive (expense) income (285) 30 (255)
Shares issued 309 309
Share-based payment for share awards 14 14
Dividends paid (45) (45)
Dividends of subsidiaries - (5) (5)
Translation (5) 5 -
Balance at September 2009 2,416 113 2,529
Balance at December 2009 2,900 130 3,030
Profit for the period 20 37 57
Comprehensive income 130 130
Total comprehensive income 150 37 187
Shares issued 811 811
Share-based payment for share awards 6 6
Dividends paid (67) (67)
Dividends of subsidiaries - (37) (37)
Transfers to other reserves - -
Translation (2) 2 -
Balance at September 2010 3,798 132 3,930
Rounding of figures may result in computational discrepancies.
Segmental reporting
for the quarter and nine months ended 30 September 2010
AngloGold Ashanti implemented IFRS 8 "Operating Segments" with effect from 1
January 2009. AngloGold Ashanti`s operating segments are being reported based on
the financial information provided to the Chief Executive Officer and the
Executive Management team, collectively identified as the Chief Operating
Decision Maker ("CODM"). As a result of changes in the management structure and
reporting from 1 January 2010, the CODM has changed its reportable segments.
Individual members of the Executive Management team are responsible for
geographic regions of the business. Comparative information has been presented
on a consistent basis. Navachab which was previously included in Southern Africa
now forms part of Continental Africa and North and South America has been
combined into Americas. Southern Africa has been renamed to South Africa.
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Gold income
South Africa 4,633 3,842 3,970 11,558 10,156
Continental Africa 3,490 3,378 2,822 9,950 7,802
Australasia 711 847 449 2,403 971
Americas 2,082 2,168 1,872 6,129 4,729
10,916 10,235 9,112 30,039 23,659
Equity accounted
investments
included above (544) (610) (600) (1,819) (2,148)
10,372 9,625 8,512 28,220 21,511
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Gold income
South Africa 634 509 516 1,553 1,201
Continental Africa 478 448 362 1,336 911
Australasia 98 113 58 323 108
Americas 285 287 243 822 560
1,495 1,356 1,178 4,035 2,780
Equity accounted investments
included above (75) (81) (77) (244) (247)
1,420 1,275 1,101 3,791 2,533
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Gross profit (loss)
South Africa 2,742 (14) (4,990) 3,525 (2,020)
Continental Africa (573) (433) (1,707) (192) (902)
Australasia (992) 76 (1,164) (940) (1,356)
Americas 1,636 436 (756) 2,981 391
Corporate and other 28 89 15 158 156
2,841 154 (8,601) 5,532 (3,730)
Equity accounted investments
included above (168) (253) (271) (738) (989)
2,672 (99) (8,872) 4,794 (4,718)
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Gross profit (loss)
South Africa 375 (4) (628) 479 (287)
Continental Africa (86) (61) (215) (36) (106)
Australasia (139) 10 (147) (132) (172)
Americas 226 56 (93) 403 43
Corporate and other 4 11 2 21 18
380 13 (1,081) 736 (504)
Equity accounted investments
included above (23) (34) (35) (99) (113)
357 (21) (1,116) 637 (618)
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Adjusted gross profit
excluding hedge
buy-back costs
South Africa 1,374 1,168 881 2,929 3,676
Continental
Africa 795 768 660 2,343 1,936
Australasia (38) 1 85 (62) 415
Americas 979 950 834 2,700 2,285
Corporate
and other 28 88 15 158 156
3,137 2,975 2,476 8,067 8,468
Equity accounted
investments
included above (168) (253) (271) (738) (989)
2,969 2,723 2,205 7,329 7,480
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Adjusted gross profit excluding
hedge buy-back costs
South Africa 189 154 115 394 420
Continental Africa 109 102 85 315 227
Australasia (5) - 11 (8) 49
Americas 134 126 108 362 270
Corporate and other 4 11 2 21 19
431 393 321 1,084 985
Equity accounted investments
included above (23) (34) (35) (99) (113)
408 359 287 986 871
Rounding of figures may result in computational discrepancies.
Segmental reporting (continued)
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
kg
Gold production (1)
South Africa 14,859 13,919 14,504 40,726 42,491
Continental
Africa 11,600 11,525 12,664 34,768 36,297
Australasia 2,894 2,692 3,176 9,138 9,145
Americas 6,776 6,876 6,580 20,082 18,349
36,129 35,011 36,925 104,714 106,282
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
oz (000)
Gold production (1)
South Africa 478 447 466 1,309 1,366
Continental
Africa 373 371 407 1,118 1,167
Australasia 93 87 102 294 294
Americas 218 221 211 646 590
1,162 1,126 1,187 3,367 3,417
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Capital expenditure
South Africa 731 746 865 2,087 2,297
Continental Africa 439 377 370 1,022 1,144
Australasia 72 81 61 219 1,539
Americas 604 491 520 1,488 1,420
Corporate and other 9 8 26 25 51
1,855 1,703 1,842 4,841 6,451
Equity accounted investments
included above (84) (102) (5) (203) (37)
1,771 1,600 1,836 4,638 6,413
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Capital expenditure
South Africa 100 99 108 280 264
Continental Africa 60 50 48 137 131
Australasia 10 11 8 29 169
Americas 82 65 65 200 164
Corporate and other 1 1 3 3 6
253 226 232 650 734
Equity accounted investments
included above (11) (14) (1) (27) (4)
242 212 231 623 729
As at As at As at As at
Sep Jun Dec Sep
2010 2010 2009 2009
Unaudited Unaudited Unaudited Unaudited
SA Rand million
Total assets
South Africa 16,394 17,080 17,061 17,206
Continental Africa 26,896 29,671 29,401 21,188
Australasia 3,466 3,374 4,494 6,728
Americas 13,918 14,939 14,642 14,063
Corporate and other 9,667 6,565 7,740 7,688
70,341 71,629 73,337 66,873
Equity accounted
investments
included above (522) (551) (567) (502)
69,819 71,078 72,770 66,371
As at As at As at As at
Sep Jun Dec Sep
2010 2010 2009 2009
Unaudited Unaudited Unaudited Unaudited
US Dollar million
Total assets
South Africa 2,356 2,238 2,295 2,290
Continental Africa 3,864 3,889 3,954 2,820
Australasia 498 442 604 895
Americas 2,000 1,958 1,969 1,872
Corporate and other 1,389 860 1,042 1,024
10,107 9,388 9,864 8,900
Equity accounted
investments
included above (75) (72) (77) (67)
10,032 9,315 9,787 8,833
(1) Gold production includes equity accounted investments.
Rounding of figures may result in computational discrepancies.
Notes
for the quarter and nine months ended 30 September 2010
1. Basis of preparation
The financial statements in this quarterly report have been prepared in
accordance with the historic cost convention except for certain financial
instruments which are stated at fair value. The group`s accounting policies used
in the preparation of these financial statements are consistent with those used
in the annual financial statements for the year ended 31 December 2009 and
revised International Financial Reporting Standards (IFRS) which are effective 1
January 2010, where applicable. Effective 1 Januar y 2010 the Chief Operating
Decision Maker changed the reportable segments. Details are included in
Segmental reporting.
The financial statements of AngloGold Ashanti Limited have been prepared in
compliance with IAS34, JSE Listings Requirements and in the manner required by
the South African Companies Act, 1973 for the preparation of financial
information of the group for the quarter and nine months ended 30 September
2010.
2. Revenue
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Gold income 10,372 9,625 8,512 28,220 21,511
By-products
(note 3) 224 223 173 614 625
Royalties received 15 - - 15 -
Interestreceived 58 70 121 192 311
10,668 9,918 8,806 29,040 22,447
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Gold income 1,420 1,275 1,101 3,791 2,533
By-products (note 3)31 29 23 83 73
Royalties received 2 - - 2 -
Interest received 8 9 16 26 36
1,461 1,314 1,140 3,901 2,642
3. Cost of sales
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Cash operating costs (5,220) (4,969) (4,793) (14,964) (13,903)
Insurance
reimbursement 37 85 - 123 -
By-products revenue
(note 2) 224 223 173 614 625
(4,959) (4,661) (4,620) (14,227) (13,278)
Royalties (282) (246) (190) (717) (519)
Other cash costs (43) (48) (32) (128) (92)
Total cash costs (5,284) (4,955) (4,842) (15,072) (13,888)
Retrenchment costs (23) (26) (17) (102) (71)
Rehabilitation and
other non-cash
costs (106) (36) (96) (228) (187)
Production costs (5,414) (5,017) (4,955) (15,401) (14,147)
Amortisation of
tangible assets (1,240) (1,173) (1,107) (3,680) (3,463)
Amortisation of
intangible assets (4) (4) (4) (11) (14)
Total production
costs (6,658) (6,193) (6,066) (19,093) (17,624)
Inventory change (1) 94 (102) 274 622
(6,659) (6,099) (6,168) (18,819) (17,001)
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Cash operating costs (715) (659) (618) (2,011) (1,615)
Insurance reimbursement 5 11 - 16 -
By-products revenue (note 2) 31 29 23 83 73
(679) (619) (595) (1,912) (1,542)
Royalties (39) (32) (24) (96) (60)
Other cash costs (6) (7) (5) (18) (11)
Total cash costs (724) (658) (624) (2,026) (1,613)
Retrenchment costs (3) (4) (2) (14) (8)
Rehabilitation and other
non-cash
costs (15) (5) (12) (31) (22)
Production costs (741) (666) (638) (2,070) (1,643)
Amortisation of tangible
assets (170) (156) (143) (494) (400)
Amortisation of intangible
assets - - (1) (1) (2)
Total production costs (912) (822) (781) (2,566) (2,045)
Inventory change 1 13 (14) 38 65
(911) (810) (796) (2,529) (1,981)
4. Loss on non-hedge derivatives and other commodity contracts
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
(Loss) gain on
realised non-hedge
derivatives (745) (803) (139) (2,072) 2,970
Loss on hedge
buy-back costs (11,639) - (6,315) (11,639) (6,315)
Gain (loss) on
unrealised non-
hedge derivatives 11,343 (2,822) (4,762) 9,104 (5,883)
(1,041) (3,625) (11,216) (4,607) (9,228)
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
(Loss) gain on realised
non-hedgederivatives (101) (107) (19) (277) 319
Loss on hedge buy-back
costs (1,637) - (797) (1,637) (797)
Gain (loss) on
unrealised non-
hedge derivatives 1,586 (380) (606) 1,289 (692)
(152) (486) (1,421) (625) (1,170)
Rounding of figures may result in computational discrepancies.
5. Other operating expenses
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Pension and medical defined benefit
provisions (24) (24) (24) (72) (73)
Claims filed by former employees in
respect
of loss of employment, work-related
accident injuries and diseases,
governmental fiscal claims and
costs of old
tailings operations (26) 9 (11) (50) (62)
Miscellaneous - - (1) - (2)
(50) (15) (36) (122) (137)
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Pension and medical
defined benefit
provisions (3) (3) (3) (10) (9)
Claims filed
by former employees
in respect of loss
of employment,
work-related accident
injuries and diseases,
governmental fiscal
claims and costs of
old tailings
operations (4) 1 (2) (6) (7)
Miscellaneous - - - - -
(7) (2) (5) (16) (16)
6. Special items
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Indirect tax (expenses)
reimbursement - (35) 11 (79) 21
Mandatoryconvertible
bond issue discount,
underwriting and
professional
fees (401) - - (401) -
Net impairments
of tangible
assets (note 9) (92) (62) (94) (235) (94)
Recovery (loss)
on consignment
stock 39 - 7 39 (109)
Impairment
of debtors (4) (19) - (56) (65)
Contract termination
fee at Geita
Gold Mine - (4) - (8) -
Insurance claim
recovery 93 10 - 103 7
Royalties
received 15 - - 15 -
Net (loss) profit
on disposal and
abandonment of land,
mineral rights,
tangible assets
and exploration
properties
(note 9) (74) (24) (156) (64) 689
Profit on
disposal of
investment (note 9) - 45 - - -
(424) (89) (231) (686) 448
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Indirect tax (expenses) reimbursement - (5) 1 (10) 3
Mandatory convertible bond issue
discount,
underwriting and professional fees (56) - - (56) -
Net impairments of tangible assets
(note 9) (13) (8) (13) (32) (13)
Recovery (loss) on consignment stock 5 - 1 5 (14)
Impairment of debtors (1) (2) - (8) (6)
Contract termination fee at Geita
Gold Mine - - - (1) -
Insurance claim recovery 14 1 - 15 1
Royalties received 2 - - 2 -
Net (loss) profit on disposal and
abandonment of land, mineral rights,
tangible assets and exploration
properties
(note 9) (10) (3) (21) (9) 84
Profit on disposal of investment
(note 9) - 6 - - -
(60) (12) (31) (95) 55
7. Finance costs and unwinding of obligations
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Finance costs (189) (245) (214) (575) (656)
Unwinding
obligation,
accretion on
convertible
bond and other
discounts (96) (78) (92) (271) (223)
(285) (323) (305) (846) (879)
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Finance costs (26) (33) (27) (78) (77)
Unwinding obligation,
accretion on convertible
bond and other
discounts (13) (10) (12) (36) (26)
(39) (43) (39) (114) (103)
8. Taxation
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
South African taxation
Mining tax 84 (84) 14 - (93)
Non-mining tax 71 (35) 77 (59) (79)
Over (under) provision prior
year 618 (12) (12) 594 (40)
Deferred taxation:
Temporary differences 1,311 (122) (44) 1,297 (355)
Unrealised non-hedge
derivatives and
other commodity contracts (2,152) 420 1,317 (1,892) 1,247
Change in estimated deferred
tax rate (7) (22) - - -
(76) 146 1,353 (60) 680
Foreign taxation
Normal taxation (358) (315) (262) (1,011) (777)
Over (under) provision prior
year 29 (60) (27) (29) (41)
Deferred taxation:
Temporary differences 87 (13) 393 (18) 190
Unrealised non-hedge
derivatives and
other commodity contracts - (23) 193 (23) 299
(242) (410) 297 (1,080) (329)
(318) (264) 1,650 (1,140) 351
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
South African taxation
Mining tax 13 (11) 2 2 (11)
Non-mining tax 10 (5) 10 (7) (9)
Over (under) provision prior year 87 (2) (2) 84 (5)
Deferred taxation:
Temporary differences 184 (15) (6) 183 (36)
Unrealised non-hedge derivatives and
other commodity contracts (301) 56 167 (267) 154
Change in estimated deferred tax
rate (1) (3) - - -
(7) 21 171 (5) 93
Foreign taxation
Normal taxation (49) (42) (34) (136) (93)
Over (under) provision prior year 4 (8) (4) (4) (5)
Deferred taxation:
Temporary differences 12 (1) 51 (1) 25
Unrealised non-hedge derivatives and
other commodity contracts - (3) 24 (3) 38
(33) (54) 38 (145) (36)
(41) (33) 209 (149) 57
Rounding of figures may result in computational discrepancies.
9. Headline earnings (loss)
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
The profit (loss)
attributable to equity
shareholders has been
adjusted by the
following to arrive at
headline earnings (loss):
Profit (loss) attributable
to equity shareholders 443 (1,360) (8,245) 233 (5,940)
Net impairments of tangible
assets (note 6) 92 62 94 235 94
Net loss (profit) on disposal
and abandonment of land, mineral
rights, tangible assets and
exploration
properties (note 6) 74 24 156 64 (689)
Insurance claim recovery for
infrastructure - - - - (7)
Profit on disposal of
investment (note 6) - (45) - - -
Net (reversal) impairment of
investment in
associates and joint ventures(74) 15 (2) (40) 3
Special items of associates (7) - - (7) -
Taxation on items above -
current portion - 3 (48) 4 156
Taxation on items above -
deferred portion (51) (14) (22) (87) (54)
476 (1,315) (8,068) 402 (6,437)
Cents per share (1)
Headline earnings (loss) 129 (359) (2,237) 109 (1,791)
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudite Unaudited Unaudited
US Dollar million
The profit (loss) attributable
to equity shareholders has been
adjusted by the following to arrive
at headline earnings (loss):
Profit (loss) attributable to equity
shareholders 51 (187) (1,042) 20 (743)
Net impairments of tangible
assets (note 6) 13 8 13 32 13
Net loss (profit) on disposal and
abandonment of land, mineral rights,
tangible assets and exploration
properties (note 6) 10 3 21 9 (84)
Insurance claim recovery for
infrastructure - - - - (1)
Profit on disposal of investment
(note 6) - (6) - - -
Net (reversal) impairment of
investment in
associates and joint ventures (10) 2 - (6) -
Special items of associates (1) - - (1) -
Taxation on items above -
current portion - - (6) - 19
Taxation on items above -
deferred portion (7) (2) (3) (12) (7)
55 (181) (1,018) 43 (803)
Cents per share (1)
Headline earnings (loss) 15 (49) (282) 12 (223)
(1) Calculated on the basic weighted average number of ordinary shares.
10. Number of shares
Quarter ended
Sep Jun Sep
2010 2010 2009
Unaudited Unaudited Unaudited
Authorised number of shares:
Ordinary shares of 25 SA cents
each 600,000,000 600,000,000 600,000,000
E ordinary shares of 25 SA cents
each 4,280,000 4,280,000 4,280,000
A redeemable preference shares of
50 SA cents each 2,000,000 2,000,000 2,000,000
B redeemable preference shares of
1 SA cent each 5,000,000 5,000,000 5,000,000
Issued and fully paid number of
shares:
Ordinary shares in issue 380,966,077 362,752,860 362,003,085
E ordinary shares in issue 2,837,150 3,005,932 3,832,568
Total ordinary shares: 383,803,227 365,758,792 365,835,653
A redeemable preference shares 2,000,000 2,000,000 2,000,000
B redeemable preference shares 778,896 778,896 778,896
In calculating the diluted number
of ordinary shares
outstanding for the period, the
following were taken into
consideration:
Ordinary shares 364,556,377 362,530,946 356,194,586
E ordinary shares 2,954,409 3,235,727 3,848,172
Fully vested options 905,619 1,017,064 622,613
Weighted average number of shares 368,416,405 366,783,737 360,665,371
Dilutive potential of share options 1,113,099 - -
Diluted number of ordinary shares
(1) 369,529,504 366,783,737 360,665,371
Nine months ended
Sep Sep
2010 2009
Unaudited Unaudited
Authorised number of shares:
Ordinary shares of 25 SA cents each 600,000,000 600,000,000
E ordinary shares of 25 SA cents each 4,280,000 4,280,000
A redeemable preference shares of 50 SA cents each 2,000,000 2,000,000
B redeemable preference shares of 1 SA cent each 5,000,000 5,000,000
Issued and fully paid number of shares:
Ordinary shares in issue 380,966,077 362,003,085
E ordinary shares in issue 2,837,150 3,832,568
Total ordinary shares: 383,803,227 365,835,653
A redeemable preference shares 2,000,000 2,000,000
B redeemable preference shares 778,896 778,896
In calculating the diluted number of ordinary
shares
outstanding for the period, the following were
taken into consideration:
Ordinary shares 363,135,881 354,685,548
E ordinary shares 3,305,316 3,894,634
Fully vested options 1,100,186 774,457
Weighted average number of shares 367,541,383 359,354,639
Dilutive potential of share options 1,158,835 -
Diluted number of ordinary shares (1) 368,700,218 359,354,639
(1) The basic and diluted number of ordinary shares is the same for the June
2010 quarter, September 2009 quarter and nine months ended September 2009 as
effects of shares for performance related options are anti-dilutive.
11. Share capital and premium
As at
Sep Jun Dec Sep
2010 2010 2009 2009
Unaudited Unaudited Audited Unaudited
SA Rand million
Balance at beginning of period 40,662 40,662 38,246 38,246
Ordinary shares issued 5,733 210 2,438 2,409
E ordinary shares cancelled (85) (64) (22) (17)
Sub-total 46,310 40,808 40,662 40,638
Redeemable preference shares
held within the group (313) (313) (313) (313)
Ordinary shares held within
the group (181) (199) (212) (258)
E ordinary shares held
within the group (218) (239) (303) (308)
Balance at end of period 45,598 40,057 39,834 39,759
As at
Sep Jun Dec Sep
2010 2010 2009 2009
Unaudited Unaudited Audited Unaudited
US Dollar million
Balance at beginning of period 5,935 5,935 5,625 5,625
Ordinary shares issued 806 28 312 308
E ordinary shares cancelled (12) (9) (2) (2)
Sub-total 6,729 5,954 5,935 5,931
Redeemable preference shares
held within the group (53) (53) (53) (53)
Ordinary shares held within
the group (28) (31) (32) (38)
E ordinary shares held
within the group (33) (36) (45) (45)
Balance at end of period 6,615 5,834 5,805 5,794
Rounding of figures may result in computational discrepancies.
12. Exchange rates
Sep Jun Dec Sep
2010 2010 2009 2009
Unaudited Unaudited Unaudited Unaudited
ZAR/USD average for the
year to date 7.45 7.52 8.39 8.70
ZAR/USD average for the quarter 7.31 7.54 7.47 7.77
ZAR/USD closing 6.96 7.63 7.44 7.51
ZAR/AUD average for the
year to date 6.68 6.71 6.56 6.48
ZAR/AUD average for the quarter 6.61 6.65 6.80 6.47
ZAR/AUD closing 6.73 6.38 6.67 6.62
BRL/USD average for the
year to date 1.78 1.80 2.00 2.08
BRL/USD average for the quarter 1.75 1.79 1.74 1.87
BRL/USD closing 1.69 1.80 1.75 1.77
ARS/USD average for the
year to date 3.89 3.87 3.73 3.70
ARS/USD average for the quarter 3.94 3.90 3.81 3.83
ARS/USD closing 3.96 3.93 3.80 3.84
13. Capital commitments
Sep Jun Dec Sep
2010 2010 2009 2009
Unaudited Unaudited Audited Unaudited
SA Rand million
Orders placed and
outstanding on capital
contracts at the prevailing
rate of exchange (1) 1,624 1,809 976 1,096
Sep Jun Dec Sep
2010 2010 2009 2009
Unaudited Unaudited Audited Unaudited
US Dollar million
Orders placed and
outstanding on capital
contracts at the prevailing
rate of exchange (1) 233 237 131 146
(1) Includes capital commitments relating to equity accounted joint ventures.
Liquidity and capital resources
To service the above capital commitments and other operational requirements, the
group is dependent on existing cash resources, cash generated from operations
and borrowing facilities.
Cash generated from operations is subject to operational, market and other
risks. Distributions from operations may be subject to foreign investment and
exchange control laws and regulations and the quantity of foreign exchange
available in offshore countries. In addition, distributions from joint ventures
are subject to the relevant board approval.
The credit facilities and other financing arrangements contain financial
covenants and other similar undertakings. To the extent that external borrowings
are required, the groups covenant performance indicates that existing financing
facilities will be available to meet the above commitments.
14. Contingencies
AngloGold Ashanti`s material contingent liabilities and assets at 30 September
2010 are detailed below:
Contingencies and guarantees SA Rand million US Dollar million
Contingent liabilities
Groundwater pollution (1) - -
Deep groundwater pollution - South Africa (2) - -
Sales tax on gold deliveries - Brazil (3) 590 85
Other tax disputes - Brazil (4) 226 32
Indirect taxes - Ghana (5) 69 10
Contingent assets
Royalty - Boddington Gold Mine (6) - -
Royalty - Tau Lekoa Gold Mine (7) - -
Financial Guarantees
Oro Group (Pty) Limited (8) 100 14
985 141
Rounding of figures may result in computational discrepancies.
AngloGold Ashanti is subject to contingencies pursuant to environmental laws and
regulations that may in future require the group to take corrective action as
follows:
(1) Groundwater pollution - AngloGold Ashanti has identified groundwater
contamination plumes at certain of its operations, which have occurred primarily
as a result of seepage from mine residue stockpiles. Numerous scientific,
technical and legal studies have been undertaken to assist in determining the
magnitude of the contamination and to find sustainable remediation solutions.
The group has instituted processes to reduce future potential seepage and it has
been demonstrated that Monitored Natural Attenuation (MNA) by the existing
environment will contribute to improvement in some instances. Furthermore,
literature reviews, field trials and base line modelling techniques suggest, but
are not yet proven, that the use of phyto-technologies can address the soil and
groundwater contamination. Subject to the completion of trials and the
technology being a proven remediation technique, no reliable estimate can be
made for the obligation.
(2) Deep groundwater pollution - The company has identified a flooding and
future pollution risk posed by deep groundwater in the Klerksdorp and Far West
Rand gold fields. Various studies have been undertaken by AngloGold Ashanti
since 1999. Due to the interconnected nature of mining operations, any proposed
solution needs to be a combined one supported by all the mines located in these
gold fields. As a result the Department of Mineral Resources and affected mining
companies are now involved in the development of a "Regional Mine Closure
Strategy". In view of the limitation of current information for the accurate
estimation of a liability, no reliable estimate can be made for the obligation.
(3) Sales tax on gold deliveries - Mineracao Serra Grande S.A. (MSG), received
two tax assessments from the State of Goias related to payments of sales taxes
on gold deliveries for export. AngloGold Ashanti Brasil Mineracao Ltda. manages
the operation and its attributable share of the first assessment is
approximately $53m. In November 2006 the administrative council`s second chamber
ruled in favour of MSG and fully cancelled the tax liability related to the
first period. The State of Goias has appealed to the full board of the State of
Goias tax administrative council. The second assessment was issued by the State
of Goias in October 2006 on the same grounds as the first assessment, and the
attributable share of the assessment is approximately $32m. The company believes
both assessments are in violation of federal legislation on sales taxes.
(4) Other tax disputes - MSG received a tax assessment in October 2003 from the
State of Minas Gerais related to sales taxes on gold. The tax administrators
rejected the company`s appeal against the assessment. The company is now
appealing the dismissal of the case. The company`s attributable share of the
assessment is approximately $9m.
AngloGold subsidiaries in Brazil are involved in various disputes with tax
authorities. These disputes involve federal tax assessments including income
tax, royalties, social contributions and annual property tax. The amount
involved is approximately $23m.
(5) Indirect taxes - AngloGold Ashanti (Ghana) Limited received a tax assessment
for $10m during September 2009 following an audit by the tax authorities related
to indirect taxes on various items. Management is of the opinion that the
indirect taxes are not payable and the company has lodged an objection.
(6) Royalty - As a result of the sale of the interest in the Boddington Gold
Mine joint venture during 2009, the group is entitled to receive a royalty on
any gold recovered or produced by the Boddington Gold Mine, where the gold price
is in excess of Boddington Gold Mine`s cash cost plus $600/oz. The royalty
commenced on 1 July 2010 and is capped at a total amount of $100m, R763m.
Royalties of $2m, R13m were received during the quarter.
(7) Royalty - As a result of the sale of the interest in the Tau Lekoa Gold Mine
during 2010, the group is entitled to receive a royalty on the production of a
further 1.4m ounces by the Tau Lekoa Gold Mine; and in the event that the
average monthly rand price of gold exceeds R180,000/kg (subject to inflation
adjustment). Where the average monthly rand price of gold does not exceed
R180,000/kg (subject to inflation adjustment), the ounces produced in that
quarter do not count towards the total 1.4m ounces upon which the royalty is
payable.
The Royalty will be determined at 3% of the net revenue (being gross revenue
less State royalties) generated by the Tau Lekoa assets.
(8) Provision of surety - The company has provided sureties in favour of a
lender on a gold loan facility with its affiliate Oro Group (Pty) Limited and
one of its subsidiaries to a maximum value of $14m, R100m. The suretyship
agreements have a termination notice period of 90 days.
15. Concentration of risk
There is a concentration of risk in respect of reimbursable value added tax and
fuel duties from the Tanzanian government:
Reimbursable value added tax due from the Tanzanian government amounts to $48m
at 30 September 2010 (30 June 2010: $47m). The last audited value added tax
return was for the period ended 31 July 2010 and at the reporting date the
audited amount was $47m. The outstanding amounts at Geita have been discounted
to their present value at a rate of 7.82%.
Reimbursable fuel duties from the Tanzanian government amounts to $55m at 30
September 2010 (30 June 2010: $49m). Fuel duty claims are required to be
submitted after consumption of the related fuel and are subject to authorisation
by the Customs and Excise authorities. Claims for refund of fuel duties
amounting to $42m have been lodged with the Customs and Excise authorities,
whilst claims for refund of $13m have not yet been lodged. The outstanding
amounts have been discounted to their present value at a rate of 7.82%.
16. Subsequent events
On 7 October 2010, AngloGold Ashanti completed the elimination of its gold hedge
book, providing the company and its shareholders with full exposure to the
prevailing gold price. The company will now sell the gold it produces at market
prices and therefore expects to enhance cash flow and profit margins as a result
of removing hedge contracts with low committed gold prices.
The additional cost of closing out all future hedge contracts and related costs
amounted to approximately $2.78bn. The average buy-back price was $1,300 per
ounce for this final tranche of the hedge restructure. The cost will be
reflected in adjusted headline earnings for the last two quarters of 2010.
AngloGold Ashanti Limited, through its wholly-owned offshore subsidiary, has
realised net proceeds of C$70m from the sale of its entire holding of 31,556,650
shares in Vancouver-based gold producer B2Gold Corporation. This stake,
equivalent to about 10.17% of B2Gold`s outstanding shares, was sold on 9
November 2010 in an orderly fashion, after the markets closed.
17. Borrowings
AngloGold Ashanti`s borrowings are interest bearing.
18. Announcements
On 21 July 2010, AngloGold Ashanti announced the finalisation of the sale of its
Tau Lekoa mine. The terms of the sale of the Tau Lekoa mine together with the
adjacent properties of Weltevreden, Jonkerskraal and Goedgenoeg ("Tau Lekoa") to
Simmer & Jack Mines Limited ("Simmers") was announced on 17 February 2009 by
AngloGold Ashanti. The sale was concluded effective 1 August 2010, following the
transfer of the mineral rights of Tau Lekoa to Buffelsfontein Gold Mines
Limited, a wholly-owned subsidiary of Simmers, on 20 July 2010. The selling
price of R600m was payable in two tranches, R450m was paid in cash on 4 August
2010 with the remaining R150m, which was subject to certain offset adjustments,
was settled on 1 November through the cash payment of R1,843,473 and the issue
of 30,612,245 Simmers shares.
On 12 August 2010, AngloGold Ashanti announced that it has entered into an
agreement with B2Gold Corp. to amend the Gramalote Joint Venture Agreement.
Under the amended terms, AngloGold retains its 51% interest in the Gramalote
Joint Venture and will become manager of the Gramalote Project in Colombia. The
Gramalote Project to date was managed by B2Gold, which will retain its 49%
interest in the Gramalote Joint Venture.
On 15 September 2010, AngloGold Ashanti announced the launch and pricing of a
concurrent equity and a mandatory convertible offering which was followed by an
announcement on 16 September 2010 advising of the exercise of an over-allotment
option. The concurrent offering resulted in the issue of 18,140,000 ordinary
shares or 5% of the ordinary issued share capital of the company at an issue
price of R308.37 per share and an issue of $789,086,750 Mandatory Convertible
Subordinated Bonds due 15 September 2013. On 26 October 2010, shareholders, by
the requisite majority, approved a special resolution placing up to a maximum of
18,140,000 ordinary shares under the control of the directors, deliverable upon
the conversion of the Mandatory Convertible Subordinated Bonds.
On 7 October 2010, AngloGold Ashanti announced the elimination of its gold hedge
book.
19. Dividend
Interim Dividend No. 108 of 65 South African cents or 5.72297 UK pence or 12.66
cedis per ordinary share was paid to registered shareholders on 10 September
2010, while a dividend of 2.002 Australian cents per CHESS Depositary Interest
(CDI) was paid on the same day. On 13 September 2010, holders of Ghanaian
Depositary Shares (GhDSs) were paid 0.1266 cedis per GhDS. Each CDI represents
one-fifth of an ordinary share, and 100 GhDSs represents one ordinary share. A
dividend of 9.0034 US cents per American Depositary Share (ADS) was paid to
holders of American Depositary Receipts (ADRs) on 20 September 2010. Each ADS
represents one ordinary share.
Interim Dividend No. E8 of 32.5 South African cents was paid to holders of E
ordinary shares on 10 September 2010, being those employees participating in the
Bokamoso ESOP and Izingwe Holdings (Proprietary) Limited.
20. 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
T T MBOWENI M CUTIFANI
Chairman Chief Executive Officer
9 November 2010
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
GhSE (Shares): AGA
GhSE (GhDS): AAD
Euronext Paris: VA
Euronext Brussels: ANG
JSE Sponsor: UBS
Auditors: Ernst & Young Inc
Offices
Registered and Corporate
76 Jeppe Street
Newtown 2001
(PO Box 62117, Marshalltown 2107)
South Africa
Telephone: +27 11 637 6000
Fax: +27 11 637 6624
Australia
Level 13, St Martins Tower
44 St George`s Terrace
Perth, WA 6000
(PO Box Z5046, Perth WA 6831)
Australia
Telephone: +61 8 9425 4602
Fax: +61 8 9425 4662
Ghana
Gold House
Patrice Lumumba Road
(PO Box 2665)
Accra
Ghana
Telephone: +233 303 772190
Fax: +233 303 778155
United Kingdom Secretaries
St James`s Corporate Services Limited
6 St James`s Place
London SW1A 1NP
England
Telephone: +44 20 7499 3916
Fax: +44 20 7491 1989
E-mail: jane.kirton@corpserv.co.uk
Directors
Executive
M Cutifani
(Chief Executive Officer)
S Venkatakrishnan * (Chief Financial Officer)
Non-Executive
T T Mboweni (Chairman)
Dr T J Motlatsi (Deputy Chairman)
F B Arisman #
W A Nairn +
Prof L W Nkuhlu
F Ohene-Kena
S M Pityana
* British # American
Australian South African
+ Ghanaian
Officers
Company Secretary: Ms L Eatwell
Investor Relations Contacts
South Africa
Renee Swan
Mobile: +27 79 523 9714
Fax: +27 11 637 6400
E-mail: rswan@AngloGoldAshanti.com
United States
Stewart Bailey
Telephone: +1-212-836-4303
Mobile: +1-646-717-3978
E-mail: sbailey@AngloGoldAshanti.com
General E-mail enquiries
investors@AngloGoldAshanti.com
AngloGold Ashanti website
http://www.AngloGoldAshanti.com
Company secretarial E-mail
Companysecretary@AngoGoldAshanti.com
AngloGold Ashanti posts information that is important to investors on the main
page of its website at www.anglogoldashanti.com and under the "Investors" tab on
the main page. This information is updated regularly.
Investors should visit this website to obtain important information about
AngloGold Ashanti.
Share Registrars
South Africa
Computershare Investor Services (Pty)
Limited
Ground Floor, 70 Marshall Street
Johannesburg 2001
(PO Box 61051, Marshalltown 2107)
South Africa
Telephone: 0861 100 950 (in SA)
Fax: +27 11 688 5218
web.queries@computershare.co.za
United Kingdom
Computershare Investor Services PLC
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 2949 (in Australia)
Fax: +61 8 9323 2033
Ghana
NTHC Limited
Martco House
Off Kwame Nkrumah Avenue
PO Box K1A 9563 Airport
Accra
Ghana
Telephone: +233 303 229664
Fax: +233 303 229975
ADR Depositary
The Bank of New York Mellon ("BoNY")
BNY Shareowner Services
PO Box 358016
Pittsburgh, PA 15252-8016
United States of America
Telephone: +1 800 522 6645 (Toll free
in USA) or +1 201 680 6578 (outside
USA)
E-mail: shrrelations@mellon.com
Website:
www.bnymellon.com.comshareowner
Global BuyDIRECT SM
BoNY maintains a direct share purchase
and dividend reinvestment plan for
ANGLOGOLD ASHANTI.
Telephone: +1-888-BNY-ADRS
Certain statements made in this communication, including, without limitation,
those concerning AngloGold Ashanti`s strategy to reduce its gold hedging
position including the extent and effects of the reduction, the economic outlook
for the gold mining industry, expectations regarding gold prices, production,
cash costs and ot her operating results, growth prospects and outlook of
AngloGold Ashanti`s operations, individually or in the aggregate, including the
completion and commencement of commercial operations of certain of AngloGold
Ashanti`s exploration and production projects, the resumption of production at
AngloGold Ashanti`s mines in Ghana, the completion of announced mergers and
acquisitions transactions, AngloGold Ashanti`s liquidity and capital resources,
and expenditure and the outcome and consequences of any litigation proceedings
or environmental issues, 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 including environmental approvals and actions,
fluctuations in gold prices and exchange rates, and business and operational
risk management. For a discussion of certain of these factors, refer to
AngloGold Ashanti`s annual report for the year ended 31 December 2009, which was
distributed to shareholders on 30 March 2010. The company`s annual report on
Form 20-F, was filed with the Securities and Exchange Commission in the United
States on 19 April 2010 and as amended on 18 May 2010. AngloGold Ashanti
undertakes no obligation to update publicly or release any revisions to these
forward-looking statements to reflect events or circumstances after today`s date
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.
AngloGold Ashanti posts information that is important to investors on the main
page of its website at www.anglogoldashanti.com and under the "Investors" tab on
the main page. This information is updated regularly. Investors should visit
this website to obtain important information about AngloGold Ashanti.
PUBLISHED BY ANGLOGOLD ASHANTI
PRINTED BY INCE (PTY) LIMITED
Date: 11/11/2010 08:00:03 Supplied by www.sharenet.co.za
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