Wrap Text
Market update report for the quarter ended 30 September 2017
AngloGold Ashanti Limited
(Incorporated in the Republic of South Africa)
Reg. No. 1944/017354/06
ISIN. ZAE000043485 – JSE share code: ANG
CUSIP: 035128206 – NYSE share code: AU
("AngloGold Ashanti" or the "Company")
Market update report
for the quarter ended 30 September 2017
Johannesburg, 6 November 2017 - AngloGold Ashanti is pleased to provide an operational update for the quarter ended
30 September 2017. Detailed financial and operational results are provided on a six-monthly basis i.e. at the end of June
and December.
- Third-quarter gold production rose 11% year-on-year to 997,000oz
- AISC unchanged at $1,071/oz despite higher planned reinvestment expenditures, stronger
currencies and inflation
- Free cash flow $88m– strong turnaround from $41m outflow in the second-quarter of 2017
- Adjusted EBITDA $399m, up from $395m in the third quarter of 2016
- Production, AISC, total cash costs and capital expenditure remain within original guidance
- Net debt to Adjusted EBITDA ratio of 1.49 times, down from 1.56 in the second quarter of 2017
- Restructuring of South African operations remains on track
- All brownfields capital projects remain on track and on budget
Quarter Nine months
ended ended ended ended
Sep Sep Sep Sep
2017 2016 2017 2016
US dollar / Imperial
Operating review
Gold
Produced - oz (000) 997 900 2,746 2,645
Sold - oz (000) 979 898 2,769 2,645
Financial review
Price received - $/oz 1,277 1,334 1,251 1,260
All-in sustaining costs - $/oz 1,071 1,071 1,071 965
All-in costs - $/oz 1,142 1,166 1,143 1,044
Total cash costs - $/oz 807 797 800 737
Gross profit - $m 205 236 530 665
Free cash inflow / (outflow) - $m 88 131 (73) 239
Net debt - $m 2,063 1,972 2,063 1,972
Capital expenditure - $m 251 211 705 529
$ represents US dollar, unless otherwise stated.
Rounding of figures may result in computational discrepancies.
FINANCIAL AND CORPORATE REVIEW
Third quarter overview
AngloGold Ashanti delivered $88m of free cash flow for the third quarter of 2017 following a strong operating performance from the
group, with production 11% higher compared with the same period last year and 9% more than the previous quarter. Each of the
operating regions showed improved production over both periods. The group remains on track to meet full-year production, cost and
capital guidance as well as to deliver on its restructuring objectives in South Africa. Our slate of brownfields projects to extend life
and improve margins, remains on track and on budget.
Production rose to 997,000oz at an all-in sustaining cost (AISC) of $1,071/oz for the quarter ended 30 September 2017 compared to
900,000oz for the quarter ended 30 September 2016. All-in sustaining costs were unchanged despite inflationary pressure on costs,
stronger currencies and the group proceeding with planned higher reinvestment expenditures, which were offset by lower
rehabilitation costs, corporate costs and exploration costs. AISC levels for the quarter were driven mainly by higher capital
expenditure levels, which are reflective of the implementation of the Company's inward investment programme.
"Our strong production performance resulted in good free cash flow generation, despite our planned reinvestment programme and a
flat gold price," Chief Executive Officer Srinivasan Venkatakrishnan said. "We expect a strong finish to the year at our key international
operations and continued delivery to tight timelines and budgets on our portfolio-improvement projects."
For the third quarter of 2017, improved production performances were delivered in all regions when compared with the same quarter
in 2016, with the core South African assets continuing their improving trajectory, showing promising operating recoveries from the
prior year's interruptions. The International Operations delivered another strong performance, driven by contributions from both mines
in Australia, AGA Mineração in Brazil and Siguiri, Geita and Iduapriem in Continental Africa. Kibali had improved margins relative to
the previous quarter, but saw lower production compared with the third quarter of 2016, due to lower tonnes treated following conveyor
downtime and issues experienced with the crusher.
Free cash flow generation was $88m for the third quarter of 2017, compared with an outflow of $41m during the second quarter of
this year, and an inflow of $131m in the third quarter of 2016. Free cash flow for the quarter was affected by the lower gold price
received, higher operating costs with some currency impact, indirect VAT receivables lock-up principally in Tanzania and the DRC
where this continues to be a challenge, and the planned increase in reinvestment capital expenditure levels.
Adjusted earnings before interest, tax, depreciation and amortisation ("Adjusted EBITDA") stood at $399m for the quarter, up from
$395m in the third quarter of 2016, and increased by $103m, or 35%, from $296m for the second quarter of 2017.
Net debt as at 30 September 2017 was $2.063bn, up from $1.972bn at the same time last year, but lower than the $2.151bn posted
at the end of the second quarter of 2017. Accordingly, net debt to Adjusted EBITDA ratio was 1.49 times as at
30 September 2017, compared with 1.26 times as at 30 September 2016, but slightly lower than the 1.56 times as at the end of the
last quarter. The current net debt to Adjusted EBITDA ratio remains well below the covenant ratio of 3.5 times under our revolving
credit facilities ("RCFs").
The balance sheet remains robust with strong liquidity and long-dated maturities providing significant financial flexibility. Undrawn
facilities as at 30 September 2017 comprise approximately $910m available under the $1bn US dollar RCF, A$250m undrawn on the
A$500m Australian dollar RCF, approximately R1.335bn available from South African facilities, and cash and cash equivalents at the
end of the quarter of $177m compared to $276m, at the end of the third quarter of 2016.
Total capital expenditure (including equity accounted investments) increased by $40m during the third quarter, from $211m for the
third quarter of 2016 to $251m for the third quarter of 2017. Project capital expenditure during the quarter amounted to $32m, up
from $25m during the third quarter of 2016. Capital expenditure is expected to increase again in the fourth quarter, in line with past
trends due to timing of the expenditures.
Total sustaining capital expenditure increased by 18% to $219m for the quarter, compared to $186m for the third quarter of 2016.
Sustaining capital expenditure for the International Operations increased by 33% to $186m, compared to $140m for the third quarter
of 2016. Sustaining capital projects include the planned new power plant and underground development at Geita, increased
underground development at Kibali as the new underground mine ramps up, capitalised stripping at Iduapriem at the cut-back of the
Teberebie pit, and the recovery improvement initiatives at Sunrise Dam. It is anticipated that the sustaining capital expenditure will
peak in the last quarter of the year, in line with the plans.
The outlook for the full year remains unchanged as follows:
- Production between 3.6Moz and 3.75Moz;
- Capital expenditure between $950m and $1,050m;
- Total cash costs between $750/oz and $800/oz; and
- AISC between $1,050/oz and $1,100/oz.
Assuming average exchange rates against the US dollar of 13.20ZAR (Rand), 3.20BRL (Brazil Real), 0.77AUD (Aus$) and 16.75ARS
(Argentina Peso), with oil at $48/bl on average for the year.
Both production and cost estimates assume no labour or other interruptions, or changes to asset portfolio and/or operating mines and
have not been reviewed by our external auditors. Other unknown or unpredictable factors could also have material adverse effects on
our future results and no assurance can be given that any expectations expressed by AngloGold Ashanti will prove to have been
correct. Please refer to the Risk Factors section in AngloGold Ashanti's annual report on Form 20-F for the year ended 31 December
2016, filed with the United States Securities and Exchange Commission.
Comparison of the third quarter 2017 performance versus the previous quarter and the same quarter last year is shown below:
Improved Improved
Particulars Q3 2017 Q2 2017 Q vs Q Q3 2016 Qtr vs prior
Yr Qtr
Gold Production (kozs) 997 918 9% 900 11%
Gold price received ($/oz) 1,277 1,256 2% 1,334 -4%
Total cash costs ($/oz) 807 781 3% 797 1%
Corporate & marketing costs ($m) * 17 18 -6% 17 0%
Exploration & evaluation costs ($m) 29 31 -6% 42 -31%
All-in sustaining costs ($/oz) ** 1,071 1,082 -1% 1,071 0%
All-in costs ($/oz) ** 1,142 1,150 -1% 1,166 -2%
Adjusted EBITDA ($m) 399 296 35% 395 1%
Capital expenditure ($m) 251 238 5% 211 19%
Cash inflow from operating activities ($m) 345 228 51% 386 -11%
Free cash inflow / outflow ($m) 88 (41) 315% 131 -33%
Free cash inflow / outflow ($m) excl. tender premium and
SAR redundancies 95 (39) 344% 161 -41%
* Includes administration and other expenses.
** World Gold Council standard, excludes stockpiles written off.
The underlying operational performance in the third quarter of 2017 was stronger than the same quarter last year, but in 2016 the
group benefitted from inter-alia the following four factors namely: a higher US dollar gold price; much weaker currencies notably the
SA Rand and Brazilian Real and lower capital spend as compared to a high reinvestment year like 2017. In addition, free cash flow
for 2017 was adversely impacted by the VAT lock-ups at both Geita and Kibali.
FINANCIAL AND OPERATING REPORT
Safety Update
The All-Injury Frequency Rate (AIFR) of the group, the broadest measure of workplace safety, for the quarter ended September 2017
was 6.98 per million hours worked, a 6% improvement from 7.42 in the second quarter of the year. Sadiola, Yatela, Siguiri, Iduapriem,
Obuasi, La Colosa, Gramalote, Quebradona and Greenfields Exploration achieved an injury free quarter.
Regrettably, there was a fatality in the South Africa region during the quarter. This fatality was a result of medical complications that
followed a serious injury sustained earlier in the year.
During the quarter, all the South African operations had passed one million fatality-free shifts. The International Operations recorded
375 days without a fatal accident, as at the end of the quarter.
On 1 September 2017, AngloGold Ashanti was awarded South Africa's most prestigious safety accolade at the annual MineSAFE
Conference, for the Mining Company with the best safety improvements, achieved at its ultra-deep mines. The Company's West Wits
gold plants were also recognised as Best in Class in the processing plants category.
"Safety is, and always will be, our first priority. We have made strides to improve safety in recent years – and in particular the past
15 months – but the fatal accidents since the end of the quarter at our South African Operations, have demonstrated again that victory
can never be declared in this regard. We will be focusing closely on our safe production strategy and also intensifying our search for
continuous improvement," Venkatakrishnan said.
OPERATING HIGHLIGHTS
The South Africa region produced 261,000oz at a total cash cost of $1,088/oz for the third quarter of 2017 compared to 235,000oz
at a total cash cost of $997/oz for the same quarter in 2016. Total cash costs increased year-on-year due to inflationary pressures,
mainly from increases in consumables and power costs, lower grades, stronger currencies and unfavourable gold in-process
movements. These were partially compensated by higher volumes and cost efficiencies, which included efficient power consumption
and business improvement initiatives.
In West Wits, production was 93,000oz at a total cash cost of $1,337/oz for the third quarter of 2017 compared to 86,000oz at a total
cash cost of $1,106/oz for the same quarter in 2016. Production increased as Mponeng's performance improved by 10% due to higher
tonnages treated, in part reflecting recovery from safety-related production interruptions experienced in the same quarter in 2016.
Following the plan to restructure the South African mines, TauTona's performance was negatively impacted by the downscaling of
operations in anticipation of the transition to care and maintenance, with the final blast occurring on 15 September 2017.
At Vaal River, production was 114,000oz at a total cash cost of $942/oz for the third quarter of 2017, compared to 100,000oz at a total
cash cost of $889/oz in the same quarter in 2016. Production increased from strong performances at both Moab Khotsong and
Kopanang as the mines recovered from safety related production interruptions in the same quarter in 2016. Moab Khotsong, which
delivered improved tonnages year-on-year, was the lowest cash cost producer for the South African region during the quarter at
$757/oz. At Kopanang, the quarter was dominated by proceedings of the Section 189 process along with the potential disposal of the
mine as was announced on 15 September 2017.
Surface Operations produced 51,000oz at a total cash cost of $963/oz for the third quarter of 2017, compared to 47,000oz at a total
cash cost of $1,026/oz in the same quarter in 2016. The production increase was driven by Mine Waste Solutions which, during the
month of September, achieved its highest production level since its acquisition by us in 2012. Tonnages processed increase by 6%
year-on-year, with improved volumes reclaimed across all the respective sites. Studies to improve current trends in gold recoveries
are continuing and operations remain suspended at the flotation and uranium circuit.
The Vaal River surface sources suffered a decline in production as a result of the suspension of the processing of the Kopanang
Marginal Ore Dump (MOD) due to the low grade received and low mill availability, as well as challenges experienced at the Mispah
Gold Plant resulting from the sticky nature of the MOD material. West Wits Surface Sources also saw a slight reduction in MOD tonnes
treated.
The Continental Africa region produced 380,000oz at a total cash cost of $696/oz for the third quarter of 2017 compared to 333,000oz
at a total cash cost of $760/oz for the same quarter in 2016. Production increased by 14% compared with the third quarter of 2016,
driven by strong contributions from Geita and Siguiri and a solid performance by Iduapriem.
At Siguiri, production was 83,000oz, up 32% compared with production of 63,000oz the third quarter of 2016 driven by higher ore
tonnes treated given the softer nature of the ore, higher plant utilisation, and 26% higher average recovered grades from mining the
new Seguelen pit which commenced in the first quarter this year. Geita's production was up 21% compared with the same quarter of
last year, mainly driven by higher grades mined, supported by the underground ore. Iduapriem's production increased by 5%, driven
by higher volumes treated from higher plant utilisation, whilst production at Kibali decreased compared with the same quarter of last
year. Kibali's production was impacted by lower plant throughput resulting in 6% lower tonnes treated during the quarter compared to
the same period last year, due to conveyor downtime and challenges experienced with the crusher which are being addressed. The
final commissioning of Kibali's underground operations and the integration and automation of the vertical shaft in the last quarter of
this year, remains on a tight schedule and is key for Kibali to achieve its production target of 610,000oz (100%).
Total cash costs dropped mainly due to the increased production in the region. At Iduapreim, total cash costs were lower than the
prior year quarter as deferred stripping activities at the Cut 3 Teberebie and pre-stripping activities at the Cut 1 Teberebie pit were
undertaken. At Siguiri, the higher recovered grades impacted positively on cash costs as mining was undertaken in the Seguelen pit
in the current quarter.
The Americas region produced 213,000oz at a total cash cost of $673/oz for the third quarter of 2017 compared to 211,000oz at a
total cash cost of $588/oz for the same quarter in 2016. Production improvement in the region is attributable to higher tonnes mined
and treated at AGA Mineração. Total cash costs were impacted by the end of the rebate programme on Argentina's Patagonia ports
and lower feed grades in Argentina and some mines in Brazil.
Cerro Vanguardia's production was flat at 71,000oz at a total cash cost of $566/oz for the third quarter of 2017 compared to a total
cash cost of $529/oz for the same quarter in 2016. Despite higher tonnes treated and higher heap-leach tonnes placed during the
quarter compared to same period last year, lower grades impacted negatively on production due to the variability of the mining model.
The by-product income was lower for the quarter ended 30 September 2017 because of the lower average silver price. Total cash
costs were higher compared to same period last year mainly due to cessation of the rebate programme on Argentina's Patagonia
ports in December 2016. Costs were also impacted by inflationary pressures. These negative effects on costs were partially offset by
favourable stockpile movements due to higher volumes of stockpile inventory, and a weaker exchange rate reflecting the peso's
depreciation against the dollar.
Brazil produced 142,000oz at a total cash cost of $715/oz for the third quarter of 2017 compared to 139,000oz at a total cash cost of
$614/oz for the same quarter in 2016. Production was higher due to higher volumes treated, despite lower grades at AGA Mineração.
Total cash costs in Brazil increased reflecting lower feed grades and costs related to higher volume treated, inflation related increases
as well as the unfavourable exchange rate.
AGA Mineração produced 112,000oz at a total cash cost of $692/oz for the third quarter of 2017 compared to 107,000oz at a total
cash cost of $609/oz for the same quarter in 2016. Production increased mainly due to a higher production from the Córrego do Sítio
complex, with higher tonnes and higher grades from both oxide and sulphide mining, in line with the revised mine plan. Total cash
costs were higher compared to same period last year due to higher tonnes treated as well as lower grades from the Cuiaba complex.
Cuiaba complex experienced operational challenges, which included geotechnical problems and delays in development that
prevented access to high grade areas. These are being addressed and will translate into improvements in the forthcoming quarters.
At Serra Grande, production was 30,000oz at a total cash cost of $799/oz for the third quarter of 2017 compared to 32,000oz at a
total cash cost of $628/oz for the same quarter in 2016. Production decreased for the quarter reflecting operational issues, unplanned
lower feed grades from the open pit, higher underground dilution, model changes and rock mechanical problems.
On 19 October 2017, Newmont Mining Co. filed a lawsuit in the United States District Court for the Southern District of New York
against AngloGold Ashanti and certain related parties, alleging that AngloGold Ashanti and such parties did not provide Newmont
with certain information relevant to its purchase of the Cripple Creek and Victor Gold Mining Company in 2015 during the negotiation-
and-sale process. We believe the lawsuit is without merit and we intend to vigorously defend against it.
The Australia region produced 143,000oz at a total cash cost of $825/oz for the third quarter of 2017 compared to 121,000oz at a
total cash cost of $864/oz for the same quarter in 2016. Production increased by 18% compared to same period last year driven by
higher mill throughput; increased grades and metallurgical recoveries. Total cash costs decreased assisted by the production increase
together with lower maintenance and processing costs at Sunrise Dam, partially offset by the impact of deferred waste adjustments
at Tropicana.
Sunrise Dam's production was 63,000oz, up 24% compared to production of 51,000oz during the same period last year as a result of
higher mill throughput, increased grades, and improved metallurgical recoveries. Strong production is anticipated in the last quarter
as high-grade stopes are mined in the Cosmo ore zone. Tropicana's production was driven by the mill throughput which increased by
15% during the quarter due to plant de-bottlenecking. Capital spend is expected to be higher in the last quarter at both Sunrise Dam
and Tropicana as construction advances on the Recovery Enhancement Project and a wall raise on the tailings facility is undertaken
at Sunrise Dam. At Tropicana, the increase will be driven by the Fines Pulping Project in the processing plant and expansion of the
village to support Long Island. Work on the Long Island Study is expected to be completed in the latter part of the year.
CORPORATE UPDATE
Section 189 and South Africa Asset sales
On 28 June 2017, AngloGold Ashanti announced it would embark on a restructuring of its South African business to stem unaffordable
losses by placing some operations on care and maintenance and affecting as many as 8,500 people. The statutory consultation
process with labour unions relating to the restructuring of its South African business, was concluded on 28 August 2017. During –
and subsequent to - this process, job loss avoidance measures were explored, including Voluntary Severance Packages, transfers,
and sale of assets, among others. A dignified and respectful engagement with the affected employees is currently underway, and we
anticipate concluding the bulk of the current restructuring process at TauTona and Savuka by the end of the fourth quarter, as
planned. A summary of the number of employees affected will be provided once this difficult process is complete. Kopanang Mine
and the West Gold Plant have been suspended from the Section 189 restructuring process pending conclusion of the agreed sale to
Heaven-Sent SA Sunshine Investment Company Limited, which controls the local Village Main Reef operation, as announced on 19
October 2017 ("the Kopanang Disposal").
Following the conclusion of the disposal of the Moab Mining Sale Assets to Harmony Gold Mining Company Limited, as announced
on 19 October 2017, and the Kopanang Disposal, AngloGold Ashanti will cease to have underground mining operations in the Vaal
River region in South Africa. AngloGold Ashanti will retain the long-life Mine Waste Solutions tailings retreatment operation, as well
as the surface rock-dump reclamation operations in the Vaal River region, which will continue to be treated through the Kopanang
gold plant, which will also be retained by AngloGold Ashanti. These two operations in the Vaal River region together with the long-
life Mponeng mine in the West Wits region will form AngloGold Ashanti's operating base in South Africa.
Once the restructuring and the asset sales are completed, AngloGold Ashanti anticipates that about 13% of its production will come
from its South African assets. The proceeds from the sale will be applied to reduce debt, further improving the company's balance
sheet flexibility as it invests in the high-return brownfield projects that will improve the overall quality of its portfolio.
Legislation changes in Tanzania
At the end of June 2017, the Government of Tanzania (GoT), enacted the Natural Wealth and Resources (Permanent Sovereignty)
Act, No 5 of 2017, the Natural Wealth and Resources Contract (Review and Re-Negotiation of Unconscionable Terms) Act, No 6 of
2017 and the Written Laws (Miscellaneous Amendments) Act, No 7 of 2017. AngloGold Ashanti's subsidiaries continue to seek a
constructive dialogue with the GoT, and its agencies, to gain assurances that Geita Mine will not be affected by these legal and fiscal
changes.
On 13 July 2017, AngloGold Ashanti announced that its subsidiaries in Tanzania made a decision to take the precautionary step of
safeguarding their interests under the Mine Development Agreement (MDA), by commencing arbitration proceedings under the rules
of the United Nations Commission on International Trade Law, as provided for in the MDA.
For the full release, please refer to the announcement on the Company's Web site.
Despite the dispute over the legal basis for the increased royalty rate, from 4% to 6%, and the imposition of 1% clearing fee for the
export of gold, Tanzanian officials have insisted upon receipts of such payments as a condition of the release of exports. Whilst our
subsidiaries in Tanzania do not accept that they are bound to pay either new levy, these royalties and fees are being paid under
protest to ensure continued processing of export shipments. The impact of these additional royalties and levies currently is
approximately $20m on an annualised basis. The lack of input VAT refunds has resulted in approximately $40m increase in working
capital for the first nine months of the year. The company continues to engage with the revenue authorities to secure the refunds
due.
UPDATE ON CAPITAL PROJECTS
Obuasi
AngloGold Ashanti remains in advanced and constructive talks with the Government of Ghana with respect to a
Development and other agreements, that will create the necessary regulatory and fiscal certainty required before a decision can be made on
whether and how to proceed with the development of its high-grade Obuasi gold deposit into a modern, mechanised and highly
productive gold-mining operation.
Siguiri
At Siguiri, AngloGold Ashanti is investing about $115m over a little over two years to add a hard-rock plant to the current processing
infrastructure, providing the ability to develop the significant sulphide-ore potential that exists on the current concession. The company
is also building a new power plant at an additional cost of $43m, to provide electricity to the new facility.
As at the end of September, $58.5m has been spent on the project and a total of $141.9m committed. The project remains on
schedule and the costs are currently forecast within budget. All major commitments have now been concluded. The mill shells arrived
on site in September, and off-site fabrication and sourcing of electrical and instrumentation equipment and cabling, continued during
the quarter. Major contractors have mobilised on site and transition to a new mining contractor is set to commence in February 2018.
Kibali
At Kibali, the ramp up of the underground mine which will supplement, and eventually replace open-pit production is currently
underway. The underground operation and the integration and automation of the vertical shaft are proceeding to the final
commissioning and automation stage. It is expected that the mine will see significant increase in production once the final shaft
commissioning has been completed. The anticipated completion of the underground mine is in the fourth quarter of the year. The
vertical shaft construction progressed well during the quarter, completing the underground materials handling system. Paving of the
haulage level and automation development also progressed, targeting the full commissioning and ramp up of shaft ore delivery
system in the last quarter of the year.
Construction of the tailings return water detox facility was completed and commissioned during the quarter, facilitating better water
management. The only major capital project following the underground development would be the Gorumbwa resettlement project,
stripping activities mainly at the Pakaka and Kombokolo pits, and the third hydropower station, Azambi which is on schedule to deliver
its first power in the second quarter of 2018.
Sadiola Sulphide Project
At Sadiola, AngloGold Ashanti and joint-venture partner IAMGOLD Corporation are evaluating a project to add sulphide-ore
processing capability to the plant. Discussions with the Government of Mali continue regarding the Sadiola Sulphide Project. Despite
the benefits the project would generate locally and to the Government of Mali, there has been no resolution around the terms critical
to moving the project forward.
Mponeng Phase 1 and 2 Project
Anglogold Ashanti is extending the life of its Mponeng mine initially through the phase 1 project which accesses deeper, higher-grade
ore through the development of a decline below the current secondary shaft. Phase 2, under evaluation, would deepen the secondary
shaft to further extend life. The completion of the Mponeng Phase 1 project is expected in the second quarter of 2018. An additional
ventilation hole is being created from decline 3 to 116 level to create more ventilation capacity, along with an ore pass down to 126
level to ease ore handling logistics on 123 level.
The completion of the water management infrastructure on 127 level was delayed during the quarter due to flooding of the emergency
pump station and pump station panels. The emergency pump station is still under construction in the bottom of the decline system.
Commissioning is expected by year end.
The construction and commissioning of the ore handling infrastructure to 126 level is expected to be completed by the end of the first
half of 2018 after which the 126 level ramp-up to steady state ore reserve development will commence. The revised geological
resource model associated with the Ventersdorp Contact Reef is currently under review.
The feasibility study for the Mponeng life of mine project has recommenced, after being interrupted at the end of May 2017. The
interruption was planned in order to complete a geotechnical study to determine the most appropriate position of the infrastructure
relative to tolerable levels of rock stress. The study has resumed and the related revised schedule forecasts completion during the
first quarter of 2018.
For details on exploration work done during the quarter, see the Exploration Update document on the Company website.
The financial information, including any forward-looking information, set out in this market update report has not been reviewed and
reported on by the Company's external auditors. Outlook data is forward-looking information which is further discussed on the back
cover of this document.
Operations at a glance
for the quarters ended 30 September 2017, 30 June 2017 and 30 September 2016
Production Underground milled/treated Surface milled/treated
oz (000) 000 tonnes 000 tonnes
Sep-17 Jun-17 Sep-16 Sep-17 Jun-17 Sep-16 Sep-17 Jun-17 Sep-16
SOUTH AFRICA 261 237 235 933 864 788 9,421 8,944 9,473
Vaal River Operations 114 99 100 489 480 393 - - -
Kopanang 30 29 25 176 196 142 - - -
Moab Khotsong 84 70 75 313 284 251 - - -
West Wits Operations 93 86 86 432 374 383 - - -
Mponeng 63 58 57 289 238 248 - - -
TauTona 30 28 29 143 137 135 - - -
Total Surface Operations 51 49 47 - - - 9,421 8,944 9,473
First Uranium SA 30 28 22 - - - 7,087 6,453 6,659
Surface Operations 21 21 26 - - - 2,335 2,491 2,815
Other 4 2 2 11 10 13 - - -
INTERNATIONAL OPERATIONS 736 681 665 2,084 2,034 1,804 - - -
CONTINENTAL AFRICA 380 351 333 341 252 178 - - -
DRC
Kibali - Attr. 45% 65 64 68 193 191 178 - - -
Ghana
Iduapriem 58 58 55 - - - - - -
Obuasi - 2 - - - - - - -
Guinea
Siguiri - Attr. 85% 83 83 63 - - - - - -
Mali
Morila - Attr. 40% 6 6 4 - - - - - -
Sadiola - Attr. 41% 15 14 17 - - - - - -
Tanzania
Geita 152 124 126 149 61 - - - -
Non-controlling interests,
exploration and other
AUSTRALASIA 143 128 121 713 813 689 - - -
Australia
Sunrise Dam 63 51 51 713 813 689 - - -
Tropicana - Attr. 70% 80 78 70 - - - - - -
Exploration and other
AMERICAS 213 202 211 1,030 969 936 - - -
Argentina
Cerro Vanguardia - Attr. 92.50% 71 71 71 76 72 64 - - -
Brazil
AngloGold Ashanti Mineração 112 102 107 665 592 574 - - -
Serra Grande 30 28 32 289 305 298 - - -
Non-controlling interests,
exploration and other
Total 997 918 900 3,017 2,898 2,592 9,421 8,944 9,473
Rounding of figures may result in computational discrepancies.
Open-pit treated Underground Recovered grade Surface Recovered grade Open-pit Recovered grade
000 tonnes g/tonne g/tonne g/tonne
Sep-17 Jun-17 Sep-16 Sep-17 Jun-17 Sep-16 Sep-17 Jun-17 Sep-16 Sep-17 Jun-17 Sep-16
SOUTH AFRICA - - - 6.89 6.68 7.34 0.17 0.17 0.15 - - -
Vaal River Operations - - - 7.24 6.45 7.89 - - - - - -
Kopanang - - - 5.32 4.67 5.46 - - - - - -
Moab Khotsong - - - 8.32 7.68 9.27 - - - - - -
West Wits Operations - - - 6.67 7.15 7.02 - - - - - -
Mponeng - - - 6.77 7.60 7.14 - - - - - -
TauTona - - - 6.46 6.36 6.78 - - - - - -
Total Surface Operations - - - - - - 0.17 0.17 0.15 - - -
First Uranium SA - - - - - - 0.13 0.13 0.10 - - -
Surface Operations - - - - - - 0.28 0.27 0.28 - - -
Other - - - - - - - - - - - -
INTERNATIONAL OPERATIONS 8,851 8,499 8,483 3.78 3.38 3.59 - - - 1.62 1.63 1.60
CONTINENTAL AFRICA 6,885 6,752 6,720 5.59 4.77 4.09 - - - 1.44 1.43 1.42
DRC
Kibali - Attr. 45% 635 643 701 6.42 4.91 4.09 - - - 1.24 1.61 1.98
Ghana
Iduapriem 1,306 1,278 1,242 - - - - - - 1.37 1.41 1.38
Obuasi - - - - - - - - - - - -
Guinea
Siguiri - Attr. 85% 2,611 2,548 2,489 - - - - - - 0.99 1.01 0.79
Mali
Morila - Attr. 40% 566 593 369 - - - - - - 0.35 0.34 0.34
Sadiola - Attr. 41% 514 515 497 - - - - - - 0.92 0.87 1.08
Tanzania
Geita 1,253 1,174 1,423 4.52 4.34 - - - - 3.25 3.06 2.68
Non-controlling interests,
exploration and other
AUSTRALASIA 1,672 1,489 1,494 2.21 1.67 1.76 - - - 1.71 1.77 1.69
Australia
Sunrise Dam 313 192 313 2.21 1.67 1.76 - - - 1.24 1.15 1.11
Tropicana - Attr. 70% 1,359 1,298 1,180 - - - - - - 1.82 1.86 1.85
Exploration and other
AMERICAS 294 257 269 4.27 4.45 4.84 - - - 5.41 6.24 5.68
Argentina
Cerro Vanguardia - Attr. 92.50% 224 201 228 7.03 8.31 8.26 - - - 6.20 7.25 6.29
Brazil
AngloGold Ashanti Mineração - - - 4.73 5.05 5.37 - - - - - -
Serra Grande 70 56 41 2.49 2.37 3.08 - - - 2.88 2.63 2.30
Non-controlling interests,
exploration and other
Total 8,851 8,499 8,483 4.74 4.36 4.73 0.17 0.18 0.15 1.62 1.63 1.60
Rounding of figures may result in computational discrepancies.
Total cash costs All-in sustaining costs ORD / Stripping capex
$/oz $/oz $m
Sep-17 Jun-17 Sep-16 Sep-17 Jun-17 Sep-16 Sep-17 Jun-17 Sep-16
SOUTH AFRICA 1,088 1,037 997 1,240 1,201 1,211 20 26 26
Vaal River Operations 942 916 889 1,088 1,070 1,078 9 11 11
Kopanang 1,459 1,175 1,345 1,545 1,334 1,579 - 3 3
Moab Khotsong 757 808 736 921 960 911 9 8 8
West Wits Operations 1,337 1,229 1,106 1,532 1,454 1,378 11 15 15
Mponeng 972 974 885 1,227 1,197 1,161 11 10 10
TauTona 2,109 1,760 1,536 2,174 1,988 1,800 - 6 5
Total Surface Operations 963 945 1,026 1,041 996 1,155 - - -
First Uranium SA 799 732 969 884 768 1,169 - - -
Surface Operations 1,195 1,222 1,073 1,273 1,288 1,142 - - -
Other - - - - - - - - -
INTERNATIONAL OPERATIONS 714 689 724 996 1,013 995 85 97 68
CONTINENTAL AFRICA 696 687 760 946 992 946 37 50 17
DRC
Kibali - Attr. 45% 781 859 756 1,112 1,405 957 7 9 8
Ghana
Iduapriem 786 785 914 1,014 1,064 981 9 13 -
Obuasi - - - - - - - - -
Guinea
Siguiri - Attr. 85% 704 728 837 789 805 934 - - -
Mali
Morila - Attr. 40% 1,024 963 1,424 1,163 1,072 1,659 - - -
Sadiola - Attr. 41% 902 742 1,062 1,028 832 1,112 - - -
Tanzania
Geita 586 504 590 915 899 895 21 28 9
Non-controlling interests,
exploration and other - - -
AUSTRALASIA 825 815 864 1,133 1,120 1,266 16 12 16
Australia
Sunrise Dam 922 1,080 1,131 1,254 1,320 1,333 7 5 4
Tropicana - Attr. 70% 686 597 614 951 919 1,118 9 7 12
Exploration and other - - -
AMERICAS 673 613 588 989 977 928 32 35 34
Argentina
Cerro Vanguardia - Attr. 92.50% 566 450 529 821 735 741 12 11 10
Brazil
AngloGold Ashanti Mineração 692 654 609 1,027 1,051 1,024 13 17 16
Serra Grande 799 861 628 1,183 1,338 1,115 6 7 7
Non-controlling interests,
exploration and other 1 1 1
Sub-total 807 781 797 1,071 1,082 1,071 105 124 94
OTHER
Total 105 124 94
Equity accounted investments included above
AngloGold Ashanti
Rounding of figures may result in computational discrepancies.
Other sustaining capex Non sustaining capex Gross profit (loss)
$m $m $m
Sep-17 Jun-17 Sep-16 Sep-17 Jun-17 Sep-16 Sep-17 Jun-17 Sep-16
SOUTH AFRICA 10 10 19 4 6 7 (8) 15 46
Vaal River Operations 3 3 5 - - 1 17 15 24
Kopanang - 1 2 - - - (8) (4) (7)
Moab Khotsong 3 2 4 - - 1 25 18 31
West Wits Operations 3 4 7 4 6 6 (23) (20) (3)
Mponeng 3 3 4 4 6 6 3 2 10
TauTona - 1 2 - - - (26) (22) (13)
Total Surface Operations 4 2 6 - - - (2) 20 25
First Uranium SA 2 1 5 - - - (4) 19 19
Surface Operations 2 1 2 - - - 1 - 6
Other - 1 2 - - - - - -
INTERNATIONAL OPERATIONS 101 79 72 28 18 18 214 171 202
CONTINENTAL AFRICA 46 34 25 27 18 18 111 74 91
DRC
Kibali - Attr. 45% 15 20 4 9 1 15 2 (12) 10
Ghana
Iduapriem 2 1 2 - - - 20 18 16
Obuasi - - - - - 1 - 1 1
Guinea
Siguiri - Attr. 85% 5 3 6 15 14 2 33 30 22
Mali
Morila - Attr. 40% - - - - - - - 1 (2)
Sadiola - Attr. 41% 1 - 1 1 - - 3 5 2
Tanzania
Geita 24 9 10 - - - 47 28 38
Non-controlling interests,
exploration and other 1 - 1 2 2 - 5 4 3
AUSTRALASIA 24 19 20 - - - 34 26 19
Australia
Sunrise Dam 14 5 4 - - - 14 1 (1)
Tropicana - Attr. 70% 10 14 16 - - - 27 30 25
Exploration and other - - - - - - (7) (5) (5)
AMERICAS 31 26 27 1 - - 70 71 91
Argentina
Cerro Vanguardia - Attr. 92.50% 5 3 5 - - - 31 38 48
Brazil
AngloGold Ashanti Mineração 21 17 17 1 - - 34 29 33
Serra Grande 4 4 5 - - - 4 2 8
Non-controlling interests,
exploration and other 1 1 1 - - - 1 3 2
Sub-total 111 89 92 32 24 25
OTHER 3 1 - 4 (2) (1)
Total 114 90 92 32 24 25 210 184 246
Equity accounted investments included above (5) 6 (10)
AngloGold Ashanti 205 190 236
Rounding of figures may result in computational discrepancies.
Development Sampling
for the quarter ended 30 September 2017
Development values represent actual results of sampling, no allowances having been made for adjustments necessary in estimating Ore Reserves.
Statistics are shown in metric units Advanced Sampled
metres Sampled Avg. ore body gold uranium
(total)* metres thickness (cm) Avg. g/t Avg. cm.g/t Avg. kg/t Avg. cm.kg/t
SOUTH AFRICA
VAAL RIVER
Kopanang
Vaal reef 539 114 12.3 67.40 829 5.81 70
Moab Khotsong
Moab Khotsong Vaal reef 2,457 386 94.7 46.38 4,392 1.00 93
WEST WITS
Mponeng
Ventersdorp Contact reef 1,775 296 54.8 40.62 2,226 - -
TauTona
TauTona Carbon Leader reef 767 78 26.0 52.58 1,367 0.27 8.00
CONTINENTAL AFRICA
Geita 3,440 1,202 425.0 4.90 - - -
SOUTH AMERICA
AngloGold Ashanti Mineração
Mina de Cuiabá 3,092 1,561 0.7 7.23 - - -
Lamego 1,079 429 60.0 2.29 - - -
Córrego do Sitio Mina I 2,480 788 - 4.36 - - -
Serra Grande
Mina III 2,932 4,698 - 2.79 - - -
Mina Nova 831 3,084 - 2.17 - - -
CVSA
Cerro Vanguardia 2,539 883 400.0 4.30 - - -
Statistics are shown in imperial units Advanced Sampled
feet Sampled Avg. ore body gold uranium
(total)* feet thickness (inches) Avg. oz/t Avg. ft.oz/t Avg. lb/t Avg. ft.lb/t
SOUTH AFRICA
VAAL RIVER
Kopanang
Vaal reef 1,768 374 4.84 1.97 0.79 11.62 4.69
Moab Khotsong
Moab Khotsong Vaal reef 8,060 1,266 37.28 1.35 4.20 2.00 6.21
WEST WITS
Mponeng
Ventersdorp Contact reef 5,824 971 21.57 1.18 2.13 - -
TauTona
TauTona Carbon Leader reef 2,516 256 10.24 1.53 1.31 0.54 0.46
CONTINENTAL AFRICA
Geita 11,286 3,943 167.32 0.14 - - -
SOUTH AMERICA
AngloGold Ashanti Mineração
Mina de Cuiabá 10,143 5,122 0.27 0.21 - - -
Lamego 3,541 1,406 23.62 0.07 - - -
Córrego do Sitio Mina I 8,135 2,586 - 0.13 - - -
Serra Grande
Mina III 9,620 15,413 - 0.08 - - -
Mina Nova 2,727 10,118 - 0.06 - - -
CVSA
Cerro Vanguardia 8,330 2,898 157.48 0.13 - - -
* This includes total "on-reef" and "off-reef" development metres
Administration and corporate information
ANGLOGOLD ASHANTI LIMITED Directors
Executive Share Registrars
Registration No. 1944/017354/06 S Venkatakrishnan*§ (Chief Executive Officer) South Africa
Incorporated in the Republic of South Africa KC Ramon ^ (Chief Financial Officer) Computershare Investor Services (Pty) Limited
Rosebank Towers, 15 Biermann Avenue,
Rosebank, 2196
(PO Box 61051, Marshalltown 2107)
Share codes: Non-Executive South Africa
ISIN: ZAE000043485 SM Pityana^ (Chairman) Telephone: 0861 100 950 (in SA)
JSE: ANG A Garner# Fax: +27 11 688 5218
NYSE: AU R Gasant^ Website : queries@computershare.co.za
ASX: AGG DL Hodgson^
GhSE: (Shares) AGA NP January-Bardill^ Australia
GhSE: (GhDS) AAD MJ Kirkwood* Computershare Investor Services Pty Limited
M Richter# Level 11, 172 St George's Terrace
RJ Ruston~ Perth, W A 6000
SV Zilwa^ (GPO Box D182 Perth, WA 6840)
JSE Sponsor: Australia
Deutsche Securities (SA) Proprietary Limited Telephone: +61 8 9323 2000
Telephone: 1300 55 2949 (Australia only)
*British (§)Indian (#)American Fax: +61 8 9323 2033
Auditors: Ernst & Young Inc. ~ Australian ^South African
Ghana
Offices Officers NTHC Limited
Registered and Corporate Executive Vice President – Legal, Commercial and Martco House
76 Rahima Moosa Street Governance and Company Secretary: Off Kwame Nkrumah Avenue
Newtown 2001 PO Box K1A 9563 Airport
(PO Box 62117, Marshalltown 2107) ME Sanz Perez Accra
South Africa Ghana
Telephone: +27 11 637 6000 Telephone: +233 302 235814/6
Fax: +27 11 637 6624 Investor Relations Contacts Fax: +233 302 229975
Stewart Bailey
Telephone: +27 11 637 6031
Mobile: +27 81 032 2563 ADR Depositary
Australia E-mail: sbailey@anglogoldashanti.com BNY Mellon (BoNY)
Level 13, St Martins Tower BNY Shareowner Services
44 St George's Terrace PO Box 30170
Perth, W A 6000 Fundisa Mgidi College Station, TX 77842-3170
(PO Box Z5046, Perth WA 6831) Telephone: +27 11 637 6763 United States of America
Australia Mobile: +27 82 821 5322 Telephone: +1 866-244-4140 (Toll free in USA) or
Telephone: +61 8 9425 4602 E-mail: fmgidi@anglogoldashanti.com +1 201 680 6825 (outside USA)
Fax: +61 8 9425 4662
E-mail: shrrelations@cpushareownerservices.com
Website: www.mybnymdr.com
Sabrina Brockman
Telephone: +1 646 880 4526 Global BuyDIRECT SM
Ghana Mobile: +1 646 379 2555 BoNY maintains a direct share purchase and dividend
Gold House E-mail: sbrockman@anglogoldashantina.com reinvestment plan for ANGLOGOLD ASHANTI.
Patrice Lumumba Road Telephone: +1-888-BNY-ADRS
(PO Box 2665)
Accra General e-mail enquiries
Ghana Investors@anglogoldashanti.com
Telephone: +233 303 773400
Fax: +233 303 778155 AngloGold Ashanti website
www.anglogoldashanti.com
Company secretarial e-mail
Companysecretary@anglogoldashanti.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.
PUBLISHED BY ANGLOGOLD ASHANTI
Forward-looking statements
Certain statements contained in this document, other than statements of historical fact, including, without limitation, those
concerning the economic outlook for the gold mining industry, expectations regarding gold prices, production, total cash costs,
all-in sustaining costs, all-in costs, cost savings and other operating results, productivity improvements, growth prospects and
outlook of AngloGold Ashanti's operations, individually or in the aggregate, including the achievement of project milestones,
commencement and completion of commercial operations of certain of AngloGold Ashanti's exploration and production projects and the
completion of acquisitions, dispositions or joint venture transactions, AngloGold Ashanti's liquidity and capital resources and capital
expenditures and the outcome and consequence of any potential or pending litigation or regulatory proceedings or environmental health
and safety issues, are forward-looking statements regarding AngloGold Ashanti's operations, economic performance and financial condition.
These forward-looking statements or forecasts involve known and unknown risks, uncertainties and other factors that may cause AngloGold
Ashanti's actual results, performance or achievements to differ materially from the anticipated results, performance or achievements
expressed or implied in these forward-looking statements. 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,
social and political and market conditions, the success of business and operating initiatives, changes in the regulatory environment
and other government actions, including environmental approvals, fluctuations in gold prices and exchange rates, the outcome of pending
or future litigation proceedings, and business and operational risk management. For a discussion of such risk factors, refer to AngloGold
Ashanti's annual reports on Form 20-F filed with the United States Securities and Exchange Commission. These factors are not necessarily
all of the important factors that could cause AngloGold Ashanti's actual results to differ materially from those expressed
in any forward-looking statements. Other unknown or unpredictable factors could also have material adverse effects on future results.
Consequently, readers are cautioned not to place undue reliance on forward-looking statements. AngloGold Ashanti undertakes no obligation
to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events, except to the extent required by applicable law. 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.
Non-GAAP financial measures
This communication may contain certain "Non-GAAP" financial measures. AngloGold Ashanti utilises certain Non-GAAP performance measures
and ratios in managing its business. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the reported
operating results or cash flow from operations or any other measures of performance prepared in accordance with IFRS. In addition, the presentation
of these measures may not be comparable to similarly titled measures other companies may use. 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.
Date: 06/11/2017 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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