Wrap Text
Report for the six months and year ended 31 December 2017 and declaration of Dividend No. 119
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" or AGA)
Report
for the six months and year ended 31 December 2017 and declaration of Dividend No. 119
FULL YEAR REVIEW
- Production rises 4% year-on-year to 3.755Moz, above top end of guidance
- Total cash costs $792/oz, in-line with full year guidance of $750-$800/oz
- All-in sustaining costs of $1,054/oz, at lower end of the guidance range
- Free cash flow $125m, before growth capital; impacted by South Africa restructuring costs
- Dividend of ZAR 70 cents per share (approximately 6 US cents per share) declared, given strong cash flow performance
- Adjusted Headline Earnings $9m, after retrenchment costs ($71m) and silicosis provision ($46m)
- Brownfield projects to improve life and margins, all remain on schedule
- New safety benchmarks set: three, straight fatality-free quarters for first time
- Obuasi redevelopment approved on strong return metrics and good government support
- SA restructuring progressing well; Moab Khotsong and Kopanang sales expected to close shortly; TauTona in orderly closure
- Strong reserve-replacement performance, declaration of maiden reserve in Colombia**
SECOND HALF REVIEW
- Production of 2.007Moz, up 7% on second half of 2016, on strong International operations performance
- Total cash costs of $787/oz, up 1% from the second half of 2016, reflects a strong fourth-quarter
- AISC of $1,038/oz, lower than the $1,058/oz of second half of 2016
- Free cash flow $231m, before growth capital
- Adjusted EBITDA up 14% to $872m, boosted by strong fourth-quarter performance
- Adjusted Headline Earnings of $101m compared to a loss of $16m in second half of 2016
- Balance sheet flexibility maintained; Net debt of $2bn and Net debt to Adjusted EBITDA of 1.35 times
Three Three Six Six
Months Months Months Months Year Year
ended ended ended ended ended ended
Dec Dec Dec Dec Dec Dec
2017 2016 2017 2016 2017 2016
US dollar / Imperial
Operating review
Gold
Produced - oz (000) 1,010 983 2,007 1,883 3,755 3,628
Sold - oz (000) 1,003 945 1,982 1,844 3,772 3,590
Financial review
Gold income - $m 1,168 1,032 2,324 2,125 4,356 4,085
Cost of sales - $m 930 885 1,874 1,763 3,582 3,263
Total cash costs - $m 709 676 1,451 1,323 2,709 2,435
Gross profit (loss) - $m 254 176 459 412 784 841
Price received * - $/oz 1,276 1,216 1,277 1,274 1,258 1,249
All-in sustaining costs * - $/oz 1,006 1,047 1,038 1,058 1,054 986
All-in costs * - $/oz 1,077 1,145 1,109 1,155 1,126 1,071
Total cash costs * - $/oz 768 764 787 780 792 744
Profit (loss) attributable to equity shareholders - $m (73) (7) (15) 11 (191) 63
- cents/share (18) (2) (4) 2 (46) 15
Headline earnings (loss) - $m 65 (6) 115 18 27 111
- cents/share 16 (2) 28 4 6 27
Adjusted headline earnings (loss) * - $m 49 (23) 101 (16) 9 143
- cents/share 12 (6) 24 (4) 2 35
Net cash flow from operating activities - $m 335 324 676 710 997 1,186
Free cash inflow (outflow) * - $m 74 39 162 170 1 278
Total borrowings - $m 2,268 2,178 2,268 2,178 2,268 2,178
Net debt * - $m 2,001 1,916 2,001 1,916 2,001 1,916
Capital expenditure - $m 248 282 499 493 953 811
Notes: * Refer to "Non-GAAP disclosure" for the definition $ represents US dollar, unless otherwise stated.
** made under JORC and Samrec
Rounding of figures may result in computational
discrepancies.
Published : 20 February 2018
December 2017
Operations at a glance
for the six months ended 31 December 2017
All-in sustaining
Production Cost of sales costs(1) Total cash costs (2) Gross profit (loss)
Year-on-year Year-on-year Year-on-year Year-on-year Year-on-year
oz (000) % Variance (3) $m % Variance(3) $/oz % Variance (3) $/oz % Variance (3) $m $m Variance (3)
SOUTH AFRICA 467 (3) (560) - 1,231 2 1,079 10 25 (55)
Vaal River Operations 212 7 (211) (2) 1,031 (5) 920 2 58 22
Kopanang 48 9 (72) (9) 1,512 (15) 1,591 6 (11) 11
Moab Khotsong 164 6 (140) 2 890 - 726 (1) 69 11
West Wits Operations 152 (18) (243) - 1,611 21 1,372 29 (50) (40)
Mponeng 118 (5) (145) 4 1,242 9 984 13 5 (11)
TauTona 34 (44) (98) (5) 2,900 68 2,739 89 (55) (29)
Total Surface Operations 99 6 (106) 3 1,080 (8) 967 (3) 17 (37)
First Uranium SA 58 29 (54) 10 919 (19) 776 (13) 16 (30)
Surface Operations 41 (15) (52) (4) 1,306 9 1,236 12 1 (7)
Other 4 (20) - - - - - - - -
INTERNATIONAL OPERATIONS 1,540 10 (1,526) 8 959 (2) 699 (1) 460 107
CONTINENTAL AFRICA 788 12 (769) 7 942 (2) 720 (3) 242 87
DRC
Kibali - Attr. 45% (4) 141 (6) (157) 1 998 13 707 2 19 (4)
Ghana
Iduapriem 121 (6) (113) - 1,031 10 803 (10) 39 8
Obuasi 1 - 5 - 6 4
Guinea
Siguiri - Attr. 85% 166 24 (140) 23 797 (21) 736 (14) 63 24
Mali
Morila - Attr. 40% (4) 16 78 (20) 18 1,236 (27) 961 (28) (1) 5
Sadiola - Attr. 41% (4) 33 (3) (35) (24) 1,089 (14) 934 (20) 7 9
Tanzania
Geita 310 19 (283) 13 944 3 647 15 100 37
Non-controlling interests,
exploration and other (25) 9 2
AUSTRALASIA 305 13 (300) 5 1,044 (6) 717 (8) 94 44
Australia
Sunrise Dam 131 15 (141) 8 1,234 7 871 (12) 29 17
Tropicana - Attr. 70% 174 12 (155) 7 835 (16) 555 (2) 69 20
Exploration and other (4) (4) 7
AMERICAS 447 4 (457) 11 922 (1) 652 8 124 (23)
Argentina
Cerro Vanguardia - Attr. 92.50% 145 (1) (125) (1) 756 (8) 552 (5) 58 (6)
Brazil
AngloGold Ashanti Mineração 227 4 (239) 18 1,010 7 696 18 48 (19)
Serra Grande 75 12 (80) 13 944 (14) 678 - 15 2
Non-controlling interests,
exploration and other (11) 3 -
TOTAL 2,007 7 1,038 (2) 787 1
OTHER - (100) (1) 4
(2,086) 5 484 58
Equity accounted investments included above 212 (3) (25) (11)
AngloGold Ashanti (1,874) 6 459 47
1 Refer to note C under "Non-GAAP disclosure" for definition
2 Refer to note D under "Non-GAAP disclosure" for definition
3 Variance December 2017 six months on December 2016 six months - increase (decrease).
4 Equity accounted joint ventures.
Rounding of figures may result in computational discrepancies.
Operations at a glance
for the year ended 31 December 2017
All-in sustaining
Production Cost of sales costs(1) Total cash costs (2) Gross profit (loss)
Year-on-year Year-on-year Year-on-year Year-on-year Year-on-year
oz (000) % Variance (3) $m % Variance(3) $/oz % Variance (3) $/oz % Variance (3) $m $m Variance (3)
SOUTH AFRICA 903 (7) (1,114) 7 1,245 15 1,085 21 (3) (152)
Vaal River Operations 386 4 (421) 5 1,094 4 958 9 65 2
Kopanang 91 - (147) 2 1,593 2 1,534 16 (31) -
Moab Khotsong 294 5 (275) 8 938 6 779 7 96 2
West Wits Operations 315 (21) (490) 7 1,544 36 1,311 43 (93) (134)
Mponeng 224 (12) (283) 9 1,259 25 1,014 30 (1) (58)
TauTona 91 (38) (207) 5 2,242 67 2,044 78 (92) (75)
Total Surface Operations 192 3 (203) 10 1,045 4 969 8 26 (19)
First Uranium SA 109 18 (101) 16 870 (6) 780 - 24 (1)
Surface Operations 83 (13) (103) 5 1,275 18 1,218 20 2 (18)
Other 11 10 - - - - - - - -
INTERNATIONAL OPERATIONS 2,852 7 (2,909) 11 972 5 700 2 798 76
CONTINENTAL AFRICA 1,453 10 (1,510) 13 953 5 720 - 386 52
DRC
Kibali - Attr. 45% (4) 268 2 (339) 16 1,090 22 784 6 1 (26)
Ghana
Iduapriem 228 7 (210) (4) 1,033 9 823 (9) 75 26
Obuasi 3 - 6 - 10 8
Guinea
Siguiri - Attr. 85% 324 25 (293) 34 796 (13) 725 (8) 123 29
Mali
Morila - Attr. 40% (4) 28 27 (34) 6 1,218 (9) 974 (13) - 6
Sadiola - Attr. 41% (4) 63 (10) (66) (19) 1,019 (4) 900 (9) 13 6
Tanzania
Geita 539 10 (519) 16 941 11 608 15 146 1
Non-controlling interests,
exploration and other (55) 22 5
AUSTRALASIA 559 8 (550) 2 1,062 - 743 (6) 159 53
Australia
Sunrise Dam 238 4 (260) 7 1,203 11 919 (1) 43 4
Tropicana - Attr. 70% 321 10 (274) (1) 885 (9) 564 (10) 132 45
Exploration and other (16) (16) 5
AMERICAS 840 2 (851) 13 943 8 638 10 253 (30)
Argentina
Cerro Vanguardia - Attr. 92.50% 283 1 (248) 7 772 - 522 (7) 122 5
Brazil
AngloGold Ashanti Mineração 424 4 (429) 18 1,006 13 671 19 109 (24)
Serra Grande 133 2 (153) 14 1,103 8 764 21 14 (14)
Non-controlling interests,
exploration and other (21) 8 3
TOTAL 3,755 4 1,054 7 792 6
OTHER 3 - 2 6
(4,022) 10 797 (71)
Equity accounted investments included above 440 8 (13) 14
AngloGold Ashanti (3,582) 10 784 (57)
1 Refer to note C under "Non-GAAP disclosure" for definition
2 Refer to note D under "Non-GAAP disclosure" for definition
3 Variance December 2017 year on December 2016 year - increase (decrease).
4 Equity accounted joint ventures.
Rounding of figures may result in computational discrepancies.
FINANCIAL AND OPERATING REPORT
FINANCIAL AND CORPORATE REVIEW
AngloGold Ashanti continued to make considerable enhancements to the quality of its portfolio during the year ended 31 December 2017.
The Company advanced the restructuring of its South African portfolio; executed, according to plan, the key self-funded brownfield projects
to sustainably improve mine lives and margins; and achieved its annual cost, production and capital guidance for the fifth consecutive
year, despite the asset sales and restructuring in South Africa.
Market Guidance Actual Met/Beaten
2017 2017
Production ('000 oz) 3,600 – 3,750 3,755 Beaten
Total cash costs ($/oz) 750 - 800 792 Met
All-in sustaining costs ($/oz) * 1,050 - 1,100 1,054 Met
Capital expenditure ($m) 950 - 1,050 953 Met
Management again demonstrated its key strengths in the areas of safety, project execution, planning, and financial and risk management.
New safety benchmarks were set during the year, with the Company recording three consecutive, fatality-free quarters for the first time in
its history and posting 349 days in South Africa without an operating fatality. The International Operations set a record of 495 days without
a fatality on 28 January 2018.
AngloGold Ashanti also delivered a strong exploration result, with most of the year's production replaced given success across a broad
front. The group Ore Reserve at the end of 2017 was 49.5Moz, from 50.1Moz in December 2016. During the year, additions from
Gramalote in Colombia, where a maiden reserve was declared, AGA Mineração in Brazil, Tropicana in Australia, Obuasi in Ghana and
Cerro Vanguardia in Argentina, mostly offset the total depletion of 4.3Moz.
The strong operating and financial performance in 2017 has further strengthened the foundation for AngloGold Ashanti's future. The slate
of low capital, high-return brownfields projects – all with attractive payback periods - are expected to deliver further improvements to cash
flows over time. This inward investment improves predictability at key assets, and despite stronger local currencies and increased
investment, AngloGold Ashanti has maintained a relatively stable cost structure, highlighting the optionality within its portfolio and the
quality of its operating teams.
"We delivered a strong production and cost performance, which ultimately allowed us to self- fund our reinvestment and restructuring
programme," Chief Executive Officer Srinivasan Venkatakrishnan said. "In ensuring we maintain focus on our long-term strategy, our
portfolio improvement projects were again executed on time and on schedule, and we continued to make progress on improving safety."
A strong performance during the fourth quarter of the year at the International Operations in particular, is a clear indication of the efforts
to sustainably improve cash flows. Whilst the last quarter tends to be seasonally stronger, improvements on most key metrics resulted in
a 27% increase in Adjusted EBITDA over the prior year quarter and free cash flow of $74m, an increase of 90% over the same period a
year earlier.
3 months ended 3 months ended
Dec 2017 Dec 2016 Variance
Produced from operations (kozs) 1,010 983 3%
Gold price received ($/oz) 1,276 1,216 5%
Total cash costs ($/oz) 768 764 1%
Corporate & marketing costs ($m) 13 15 -13%
Exploration & evaluation costs ($m) 23 30 -23%
All-in sustaining costs ($/oz) * 1,006 1,047 -4%
All-in costs ($/oz) * 1,077 1,145 -6%
Adjusted EBITDA ($m) 473 372 27%
Cash inflow from operating activities ($m) 331 324 2%
Free cash inflow (outflow) ($m) 74 39 90%
Capital expenditure ($m) 248 282 -12%
Free cash flow ($m) excl. SA retrenchments 108 39 177%
*World Gold Council Standard, excludes stockpiles written off.
FULL YEAR REVIEW
Production for the year of 3.755Moz exceeded the top end of guidance and was 4% higher than the previous year's production of 3.628Moz
despite the orderly closure of TauTona and Savuka. Stronger year-on-year operating performance across the International Operations
helped to more than offset the lower output from South Africa. In Australia, Sunrise Dam and Tropicana saw the benefits of mine
optimisation initiatives resulting in solid performances throughout the year. In Continental Africa, higher grades at Geita and Siguiri
contributed to the region's 10% increase in production over the previous year. In the Americas, a solid operating performance was
bolstered by improved production from AGA Mineração. The strong performance across the portfolio, particularly in the fourth quarter,
demonstrated continued cost and operating discipline and improvements through internally-funded, low-capital, high return brownfields investments.
Total cash costs for the full year of $792/oz were 6% higher than the previous year's $744/oz, and within the guidance range of $750/oz-
$800/oz. Costs were negatively impacted by inflation, stronger local currencies and the expensing of certain capital costs at the South
African operations as they underwent orderly closure. The South African rand averaged 9% stronger versus the dollar in 2017 compared
with 2016, and the Brazilian real averaged 8% stronger, contributing to the 21% year-on-year increase in total cash costs in South Africa
and 10% increase in the Americas region. In contrast, cash costs remained relatively flat in Continental Africa and declined by 6% in
Australia despite a 3% stronger Australian dollar. All-in sustaining costs came in at the bottom end of the guidance range at $1,054/oz,
7% higher than the previous year AISC of $986/oz due to higher planned sustaining capital expenditure levels in addition to the stronger
local currencies.
Cash flow from operating activities for the year ended 31 December 2017 declined 16% when compared to 2016, reflecting tighter margins,
working capital lockups, and payments for redundancies in South Africa, offsetting a 1% increase in the gold price received and a 5%
increase in gold sales. Free cash flow of $1m for the year, compared to $278m in 2016, reflects the higher planned capital expenditure
and was helped by a strong second half which delivered free cash flow of $162m. Free cash flow for the year, before taking growth capital
into account, was $125m versus $394m a year earlier, impacted by 19% higher sustaining capital expenditure of $829m compared to the
previous year of $695m, South African retrenchment costs paid of $49m and higher cash costs.
Total capital expenditure (including equity accounted investments) was $953m, at the lower end of the market guidance of between
$950m - $1,050m, and included project capital expenditure of $124m invested in growth projects at Siguiri and Kibali in Continental Africa
and Mponeng in South Africa. Sustaining capital increased 19% to $829m, compared to $695m in 2016, reflecting increased investment
at Geita in Tanzania and in Australia. This higher level of spend was largely aimed at improving mine lives and margins across the portfolio.
Capital expenditure in Continental Africa increased by $109m (including equity accounted investments), with higher expenditure on
underground development at Geita and the cutback at Iduapriem's Teberebie pit, which extends the life of the operation by about a
decade. In Australia, expenditure at Tropicana increased to $91m as mine optimisation work and additional stripping costs, geared to
improve the medium- and longer-term profitability of the mine, progressed.
Adjusted Headline Earnings for the year were $9m, or 2 cents per share, compared with $143m, or 35 cents per share in 2016. Adjusted
headline earnings for 2017 include the impact of retrenchment provisions in the South Africa region of $71m (post-tax) and the provision
for the settlement of the silicosis class action claims and related expenditure of $46m (post-tax).
Adjusted earnings before interest, tax, depreciation and amortisation (Adjusted EBITDA) of $1,483m in 2017 decreased by $65m, or 4%
from the previous year, resulting in a 34% Adjusted EBITDA margin. Adjusted EBITDA for the year excludes the impact of the South
African redundancy costs and impairments but includes the impact of the estimated provision in respect of the silicosis class-action law
suit of $46m (pre-tax: $63m). The ratio of net debt to Adjusted EBITDA at the end of December 2017 was 1.35 times compared with 1.56
times at the end of June 2017 and 1.24 times at the end of December 2016. Management has successfully maintained financial flexibility
by remaining at or below targeted leverage levels, and well below the covenant ratio of 3.5 times which applies under our revolving credit
agreements.
Net debt increased marginally by 4% to $2bn at 31 December 2017, from $1.916bn at the end of 2016. During 2017, AngloGold Ashanti
increased its ZAR RCF facilities from R3.4bn to R5.7bn. The balance sheet remains robust, with liquidity comprising $1,050m available
on the $1.1bn US dollar RCFs at the end of December 2017, A$290m undrawn on the A$500m Australian dollar RCF, approximately
R2.95bn available from the South African RCF and other facilities and cash and cash equivalents of $205m at the end of December 2017.
The nearest bond maturities are in 2020 and 2022.
SECOND HALF YEAR REVIEW
Production for the second half of 2017 was 2.007Moz, a 7% increase on the same period a year earlier. Strong performances in the
International portfolio, notably in Continental Africa at Siguiri and Geita and in Australia at both Sunrise Dam and Tropicana, offset
production losses in South Africa due to the orderly closure of TauTona and Savuka as well as safety stoppages.
Total cash costs of $787/oz, up 1% year-on-year, reflect an exceptionally strong fourth-quarter performance which saw costs at $768/oz
offset mainly by strengthening currencies. Cash costs in the second half of the year also include the impact of a reclassification of certain
capital costs to operating expenses at the South African operations undergoing orderly closure. The Continental Africa region saw costs
decline year-on-year by 3%, reflecting significant improvements at Iduapriem, Siguiri, and Sadiola. At Geita in Tanzania, despite a 19%
increase in production versus the prior year, cash costs increased by 15% to $647/oz as a result of an increase in higher-cost underground
mining activities. In Australia, costs fell 8% to $717/oz when compared to the prior half year period. In Brazil, at AGA Mineração, a solid
operating performance was weighed down by a stronger Brazilian Real and lower underground grades when compared to a year earlier
and the first half of 2017.
AISC for the second half of 2017 was $1,038/oz, lower than the $1,058/oz reported for the second half of 2016, reflecting an increase in
gold sales, offsetting the stronger local currencies, as well as the impact of lower sustaining capital expenditure on a per ounce basis.
During the fourth quarter of the year, the group achieved an AISC of $1,006/oz, a 4% improvement over the same period a year earlier.
Free cash flow of $162m was generated in the second half of 2017, a 5% decrease on the prior year period. Higher operating costs
impacted by stronger local currencies, inflation and the payment of the South African redundancy costs, as well as unfavourable working
capital movements and higher taxes, were partially offset by higher gold sold. Free cash flow pre-growth capital was $231m, 4% lower
than the previous year.
Adjusted EBITDA rose by 14% to $872m from $767m the previous year. The period benefitted from higher gold sales and gold price, and
lower exploration costs. The gains were partially offset by higher operating costs, inflationary pressures and stronger currencies.
Adjusted headline earnings for the second half of 2017 of $101m or 24 cents per share, were significantly higher than the previous year
which recorded a loss of $16m. The increase is attributable to higher ounces sold, partly offset by stronger local currencies, higher cash
costs resulting mainly from inflationary increases, and retrenchment and silicosis provisions in the South Africa region.
Capital expenditure in the second half of 2017 was $499m (including equity accounted entities) compared to $493m in the second half of
2016. Of the capital spent, non-sustaining capital expenditure during the period amounted to $70m, in line with the same prior period and
primarily related to the Siguiri hard rock project.
Summary of six months on prior year six months and year on year operating and cost variations:
Six months
Six months Six months on prior year Year
ended ended six months Year Year on year
Particulars Dec 2017 Dec 2016 Variance Dec 2017 Dec 2016 Variance
Operating Review
Gold
Produced from operations (kozs) 2,007 1,883 7% 3,755 3,628 4%
Gold price received ($/oz) 1,277 1,274 0% 1,258 1,249 1%
Total cash costs ($/oz) 787 780 1% 792 744 6%
Corporate & marketing costs ($m) 30 32 -6% 64 61 5%
Exploration & evaluation costs ($m) 52 71 -27% 114 133 -14%
All-in sustaining costs ($/oz) * 1,038 1,058 -2% 1,054 986 7%
All-in costs ($/oz) * 1,109 1,155 -4% 1,126 1,071 5%
Adjusted EBITDA ($m) 872 767 14% 1,483 1,548 -4%
Cash inflow from operating activities ($m) 676 710 -5% 997 1,186 -16%
Free cash inflow (outflow) ($m) 162 170 -5% 1 278 -100%
Capital expenditure ($m) 499 493 1% 953 811 18%
Free cash flow ($m) excl. tender premium and SA
retrenchments 203 200 1% 50 308 -84%
* World Gold Council standard, excludes stockpiles written off.
SAFETY UPDATE
Employee safety – our first value - remained a key focus for the year. Prior to a fatality occurring in July 2017, the Company recorded
three consecutive fatality-free quarters for the first time in its history, with the South African ultra-deep mines, achieving 349 fatality-free
days. In the West Wits region, TauTona achieved a year without a fatality, whilst Mponeng recorded 2 million fatality-free shifts during
October 2017 for the first time in the mine's history. In the Vaal River region, Moab Khotsong recorded 500,000 fatality-free shifts during
November 2017, while Kopanang mine and South Africa Surface Operations respectively achieved one and two million fatality-free shifts.
During the year, the South Africa region received an award, the MineSafe's highest ranking prize, recognising AngloGold Ashanti as a
mining company with the most improved safety performance year-on-year. MineSafe is an industrial body representing a collaborative
effort between mining companies, employee bodies and the South African Department of Mineral Resources.
This safety performance improvement is a result of a progressive implementation and integration into daily work routines of the group
safety strategy. The main areas of the strategy include focus on fatality risks by ensuring every employee understands and manages
hazards and associated risks on a continuous basis, that critical controls remain in place with compliance to set work routines, and that
there is diligent reporting of high potential incidents, which are addressed whilst making optimal use of technology.
The strong start to the year was marred by seven fatalities in the second half, four of which were seismic-related, two were caused by
falls-of-ground and one occurred during rail-bound transport operations.
The group All-Injury Frequency Rate (AIFR), the broadest measure of workplace safety, for the quarter ended 31 December 2017 was
6.67 per million hours worked, a 6% improvement from 7.08 in the previous quarter. Yatela, Siguiri, Obuasi, La Colosa, Gramalote,
Quebradona and Growth and Exploration achieved an injury free quarter. The AIFR for 2017 was 7.53 compared to 7.71 in 2016.
OPERATING HIGHLIGHTS
The South African operations produced 903,000oz at a total cash cost of $1,085/oz for the year ended 31 December 2017 compared
to 967,000oz at a total cash cost of $896/oz for the year ended 31 December 2016. All-in sustaining costs (AISC) were $1,245/oz for the
year ended 31 December 2017 compared with $1,081/oz for the year ended 31 December 2016. Tonnes mined were affected by a poor
start up to the year at all operations, whilst the decision to stop the loss-making operations in the third quarter further impacted full-year
production. Underground yield dropped 8% to 6.93 g/t as a result of lower feed grades as well as higher dilution year-on-year. This was
mainly due to an increase in waste tonnes at Moab Khotsong, mining moving out of higher grade areas at Mponeng, and the reclamation
of the tailing storage facilities at the West Wits Surface Sources. The final blast took place at TauTona on 15 September and the Section
189 process continued at Kopanang together with the pending disposal of the mine - subject to conditions precedent - as announced in
October. Total cash costs increased due to lower production volumes, inflationary pressures and a stronger local currency against the US
dollar, compared with same period in 2016.
For the six months ended 31 December 2017, the region produced 467,000oz at a total cash cost of $1,079/oz compared to 481,000oz
at a total cash cost of $984/oz for the comparable period in 2016.
At West Wits, production was 315,000oz at a total cash cost of $1,311/oz for the year ended December 2017 compared to 399,000oz at
a total cash cost of $914/oz the previous year. At Mponeng, production decreased year-on-year from 254,000oz to 224,000oz, mainly as
a result of mining at lower grade areas as planned, face time constraints with mining occurring further away from shaft stations, and three
separate seismically induced fatal accidents. By the last quarter of the year, the improvement of Mponeng's yield which averaged 8.54g/t,
was offset by safety related stoppages due to the fatal incidents in the last quarter of the year.
At the Vaal River Operations production was 386,000oz at a total cash cost of $958/oz for the year ended 31 December 2017 compared
to 371,000oz at a total cash cost of $875/oz for the year ended 31 December 2016. At Moab Khotsong production increased due to fewer
safety related disruptions as well as improved efficiencies, and despite higher dilution and a lower mine call factor. At Kopanang,
production remained flat year-on-year, impacted by safety-related interruptions following the fall-off-ground fatal incidents that occurred in
the fourth quarter.
Surface Operations produced 192,000oz at a total cash cost of $969/oz for the year ended 31 December 2017 compared to 186,000oz
at a total cash cost of $899/oz. At Mine Waste Solutions, production was 18% higher when compared with the same period in 2016 as a
result of a 17% increase in feed grades due to higher grades from the Sulphur paydam and East tailing storage facilities (TSF), coupled
with improvements in recovery. The yield increase is as expected from the Sulphur Paydam which is normally associated with higher reef
values, together with higher volumes of floor cleaning material reclaimed. Gold recovery efforts showed improvements in the latter part
of the second half in 2017. This yielded about 7% improvement after reagent suite optimisation and improved carbon management,
resulting in improved production. Operations at the flotation and uranium circuit remain suspended as investigations into improved
water reticulation continue.
Hard rock production was lower when compared with the previous year. This drop is attributable to lower tonnage throughput, and a lower
recovery due to the increased amount of clean-up material which is refractory in nature. The sticky nature of the material processed
through the Surface Sources' plants impacted negatively on the metallurgical efficiencies. Production was also affected by the suspension
of Kopanang marginal ore dumps and the low mill availability at the Kopanang gold plant.
The Continental Africa region delivered 1.453Moz at a total cash cost of $720/oz for the year ended 31 December 2017 compared to
1.321Moz at a total cash cost of $717/oz for the year ended 31 December 2016. Production increased significantly year-on-year as almost
all operations delivered increased production driven mainly by higher recovered grades at Siguiri, Iduapriem and Geita, together with
higher tonnages in Mali. AISC were $953/oz for the year ended 31 December 2017 compared to $904/oz the year ended 31 December 2016.
For the six months ended 31 December 2017 the region produced 788,000oz at a total cash cost of $720/oz compared to the 702,000oz
at a total cash cost of $742/oz for the same period in 2016. Total cash costs decreased due to increased production, boosted by higher
grades and tonnages.
In Ghana, Iduapriem's production increased 7% to 228,000oz at a total cash cost of $823/oz for the year ended 31 December 2017,
compared to 214,000oz at a total cash cost of $908/oz for the year ended 31 December 2016. Production increased due to the 8% higher
recovered grade from mining deeper higher grade areas in the current period, partly offset by a decrease in tonnage treated.
In the Republic of Guinea, Siguiri's production increased 24% to 324,000oz at a total cash cost of $725/oz for the year ended
31 December 2017 compared to 260,000oz at a total cash cost of $784/oz for the year ended 31 December 2016. The production
improvement was due to a 29% increase in recovered grade as a result of the mining of higher grade areas, which included the new
Seguelen pit, compared to the previous period, partly offset by a decrease in tonnes treated. Total cash costs for the year decreased by
8%, mostly as a result of higher gold production, partly offset by the stockpile utilisation cost compared to additions in the previous year,
and the once-off benefit of a favourable settlement of contractor charges in the previous period.
In Mali, Morila's production increased 27% to 28,000oz at a total cash cost of $974/oz for the year ended 31 December 2017 compared
to 22,000oz at a total cash cost of $1,123/oz for the year ended 31 December 2016. Production increased as a result of a 45% increase
in tonnage throughput compared to the same period in 2016 driven by consistent plant availability, the treatment of softer ore, and the
resumption of limited mining in the latter part of the current year. This improvement was partly offset by a 10% decrease in recovered
grade as the operation continued treatment of marginal lower grade and tailings ore. Total cash costs consequently decreased by 13%.
At Sadiola, production was 63,000oz at a total cash cost of $900/oz for the year ended 31 December 2017 compared to 70,000oz at a
total cash cost of $991/oz for the year ended 31 December 2016. Production decreased as a result of a 10% decrease in recovered grade
due to the limited availability of the remaining oxide ore, partly offset by an increase in tonnes treated. Total cash costs however decreased
by 9% as a result of additions of full grade ore stockpiles compared to stockpile utilisation in the previous period.
In Tanzania, Geita's production was 539,000oz at a total cash cost of $608/oz for the year ended 31 December 2017 compared to
489,000oz at a total cash cost of $530/oz for the year ended 31 December 2016. The increase in production was due to a 13% increase
in recovered grade from mining higher grade ore at Nyankanga cut 7 and cut 8, in line with the mining plan. Increased production is also
supported by higher underground tonnes in the current period as the underground ramp up continues, reaching 493,000 tonnes for the
year. These factors were partly offset by a decrease in plant throughput. Total cash costs however increased mainly as a result of
increased underground mining activity and higher associated costs compared to the previous period.
In the Democratic Republic of the Congo, Kibali achieved 268,000oz (attributable) at a total cash cost of $784/oz for the year ended 31
December 2017 compared to 264,000oz at a total cash cost of $740/oz for the year ended 31 December 2016. Higher tonnes treated and
mined contributed to the higher production, notably in the fourth quarter with the commissioning of the underground materials handling
systems and beneficial use of the shaft, facilitating the increase in higher grade ore from underground. The plant operated for extended
periods on 100% sulphide ore achieving design recovery and above design throughput.
The Americas region produced 840,000oz at a total cash cost of $638/oz for the year ended 31 December 2017 compared to 820,000oz
at a total cash cost of $578/oz for the year ended 31 December 2016. AISC were $943/oz, compared to $875/oz achieved in the same
period in 2016. Production volumes reflected stronger year-on-year contributions from both Brazil and Argentina, attributable to operational
improvements and an increase in tonnes treated. Total cash costs for the region were higher compared to the same period in 2016 mainly
due to inflationary pressures and the strengthening of the Brazilian Real against the US dollar.
For the six months ended 31 December 2017, the region produced 447,000oz at a total cash cost of $652/oz compared to 431,000oz at
a total cash cost of $604/oz for the same period in 2016. Total cash costs increased due to decreased production. AISC were $922/oz,
compared to $929/oz achieved in the same period in 2016.
In Argentina, Cerro Vanguardia production was 283,000oz at a total cash cost of $522/oz for the year ended 31 December 2017 compared
to 281,000oz at a total cash cost of $563/oz for the year ended 31 December 2016. The mine achieved its highest production level in 18
years, boosted by operational and metallurgical improvements and an increase in tonnes treated at the plant. Total cash costs decreased
considerably, assisted by increased production, higher by-product sales, and favourable stockpile movements. Various cost savings
initiatives focused on efficiencies and production improvements in the underground mine expansion, increasing mill throughput and silver
recovery, and capital savings, amongst others. These positive factors were partially offset by the inflationary pressures, particularly related
to salary increases agreed on in October, as well as the elimination of Patagonia ports rebates at the end of 2016, ending a 10%
reimbursement benefit that was derived during the same period last year.
In Brazil production was 557,000oz at a total cash cost of $693/oz for the year ended 31 December 2017 compared to 538,000oz at a
total cash cost of $580/oz for the year ended 31 December 2016. Total cash costs were mainly impacted by lower feed grades, inflationary
pressures and local currency effects due to the appreciation of the Brazilian Real against the US dollar during the year. Production
increased as a result of improved geological modelling at Mineração which assisted the recovery from geotechnical challenges faced at
the start of the year at Córrego do Sitio. At Serra Grande, production was driven by higher tonnes treated supported by crushing and
milling efficiencies and more efficient leaching following the implementation of the Carbon-In-Leach project, this despite lower feed grades.
This is a result of the Operational Excellence initiatives which improved levels of ore mined, offsetting lower open pit production.
The Australia region produced 559,000oz at a total cash cost of $743/oz for the year ended 31 December 2017 compared to 520,000oz
at a total cash cost of $793/oz for the year ended 31 December 2016. AISC were $1,062/oz for the year ended 31 December 2017,
compared to $1,067/oz achieved in the same period in 2016. Production improved due to higher mill throughput and feed grade, and a
significant increase in metallurgical recovery at Sunrise Dam and higher feed grade and mill throughput at Tropicana. Total cash costs
decreased on the back of improved production and favourable inventory movements. Higher head grades and improved metallurgical
recovery contributed to a 5% increase in production at Sunrise Dam in 2017. Tropicana production was 10% higher for the year compared
to 2016 due mainly to a 10% increase in mill throughput.
For the six months ended 31 December 2017 the region produced 305,000oz at a total cash cost of $717/oz compared to 269,000oz at a
total cash cost of $781/oz for the same period in 2016. On 7 December 2017, the Tropicana joint venture partners announced a
commitment to the Long Island mining strategy and approval of an additional ball mill to lift plant throughput and gold recovery, adding
2.1 million ounces of gold production to the Tropicana business plan. A scoping study on the potential for underground mining at Boston
Shaker is underway. It is anticipated that a pre-feasibility study will begin in 2018 in conjunction with infill drilling programmes.
CORPORATE UPDATES
South Africa Asset Sales and Restructure
On 28 June 2017, AngloGold Ashanti announced that it would restructure its South African Operations to safely return the business to
profitability, whilst mitigating job losses. This included placing TauTona and Savuka into care and maintenance, to be followed by
orderly closure later in this year.
On 19 October 2017 AngloGold Ashanti announced the sale of the Kopanang Mine and related infrastructure to Heaven-Sent SA Sunshine
Investment Company Limited (Heaven-Sent). Under the sale agreement, one of the conditions precedent was for the new owners to conclude
an agreement with AngloGold Ashanti and the employees' organised labour representatives to determine the number of existing employees
who would continue to work at the operations after the change in ownership comes into effect. This agreement was concluded on 16 November 2017.
It is anticipated that about 3,000 employees, of the total workforce of 3,638, will transfer to the new owner Heaven-Sent. AngloGold Ashanti
will honour its undertaking to pay accrued severance packages to all affected employees at Kopanang immediately following the conclusion of
the sale transaction.
The Kopanang sale transaction is conditional upon certain conditions precedent being fulfilled, many of which, including Section 11 and 102 and
Competition Commission approval, have been achieved. Completion of the Kopanang sale transaction is anticipated imminently.
Additionally, on 19 October 2017 the conclusion of the sale agreement for the disposal of the Moab Khotsong and Great Noligwa mines and related
infrastructure to Harmony Gold Mining Company Limited (Harmony), was announced. This transaction is also subject to conditions precedent, all of which,
including Section 11 and 102 approvals, Competition Commission and Tribunal approval, Harmony shareholder approval, as well as the release of
AngloGold Ashanti from the management and rehabilitation liabilities of underground water in the KOSH basin, have been achieved. Consequently,
the Moab Khotsong and Great Noligwa sale transaction is expected to close shortly.
Following the above asset sale transactions, AngloGold Ashanti will have no 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 that 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 and contribute 13% of the group's production on a proforma basis.
Work is now underway to ensure that all surface and off-mine costs are appropriate for the new production base and efforts are underway in the
South Africa region to return it to positive cash flow generation in the second half of 2018.
Maiden Ore Reserve for Gramalote
AngloGold Ashanti announced the maiden Ore Reserve for the Gramalote project of 63.7Mt @ 0.86 g/t gold comprising contained metal content
of 1.8Moz, on an attributable basis. Gramalote represents a long-term option for AngloGold Ashanti, and all avenues to realise value
from this important asset remain open. Work will continue to optimise all aspects of the project during its feasibility phase,
which is currently under way.
AngloGold Ashanti announced the maiden Ore Reserve for the Gramalote project of 63.7Mt @ 0.86 g/t gold comprising contained metal
content of 1.8Moz, on an attributable basis. Gramalote is a Joint Venture between AngloGold Ashanti (51% and manager) and B2Gold
(49%). The project lies on the eastern flank of the Cordillera Central near the towns of Providencia and San Jose del Nus in the municipality
of San Roque, in the north-west of the Antioquia Department. It is approximately 230km north-west of Bogota and 124km north-east of
Medellin.
The enhanced Pre-feasibility study was completed in September 2017 and the board has conditionally approved its progression to a full
Feasibility Study. The project has several strengths, both externally and intrinsic to the ore and the orebody itself.
- Relatively low strip ratio of 2.5:1
- Ability to implement grade streaming to increase early cash flow
- Exceptionally good metallurgy, resulting in low processing costs and high recovery
- Adjacent to a National Highway, which connects to a river and seaports
- Close to the national electricity grid with ample low-cost power
- Technically capable workforce
- High levels of community support from an area with an established mining culture
- Located in a high-rainfall area with good water supply
Mining will be conducted via open pits, starting in the high-grade portion of the main Gramalote Pit and progressing through a series of
cut-backs in Gramalote and in the two satellite pits, Trinidad and Monjas West. Total rock movement rises close to 60Mtpa in the second
year of operation, and remains at that level until the ninth year, before declining. Total material moved includes stockpile re-handling.
The project envisages a SAG-Ball mill circuit along with flotation and leaching, with test work showing the ore performing extremely well
metallurgically. Sulphide and oxide ores will be treated through separate grinding and flotation circuits, optimising operational performance.
The process for both ores involves floating the gold into a low-mass concentrate which is leached, and the benign flotation tails discarded.
The sulphide ore achieves close to 95% overall gold recovery with a very coarse grind size, minimising costs. Recovery from the oxide
ore is about 82%, and remains more profitable than a whole ore leach process.
On-site facilities to be constructed include: a tailings management facility; a creek diversion; residential camp and offices and a 26km high
voltage power line to the National grid, expected to be built and operated by a major Colombian power distribution company.
The project aims at producing a total of 4.22Moz of gold over the life of the mine at a rate of between 300koz and 450koz for the first eight
years, at attractive AISC levels.
AngloGold Ashanti's management is currently in discussions with the Joint Venture partner on how to further progress the project.
Please refer to the full disclosure on www.anglogoldashanti.com, covering the Maiden publication of the Gramalote Ore Reserve on
Table 1 in terms of the SAMREC code, and also containing the updated Ore Reserve and Mineral Resource estimates reported in
accordance with the South African Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2016 (SAMREC
Code) and Johannesburg Stock Exchange (JSE) Listing Requirements.
Silicosis Class Action Litigation
The settlement negotiations between the Occupational Lung Disease Working Group and class action legal representatives have reached
an advanced stage. The Working Group represents African Rainbow Minerals, Anglo American SA, AngloGold Ashanti, Gold Fields,
Harmony and Sibanye-Stillwater. The class members are represented by Richard Spoor Inc, Abrahams Kiewietz Inc and the Legal
Resources Centre. On 10 January 2018, in response to a request from all parties involved in the appeal to the Supreme Court of Appeal
(SCA) in respect of the silicosis and tuberculosis class action litigation, the Registrar of the SCA postponed the hearing date of the appeal
until further notice.
Legislation changes in Tanzania and Democratic Republic of the Congo
Tanzania regulatory update:
In July 2017, AngloGold Ashanti noted the enactment by the Republic of Tanzania's Parliament and publication in the Country's official
Government Gazette of three pieces of new legislation that purport to make a number of changes to the operating environment for
Tanzania's extractive industries, including those in its mining, and oil and gas sectors. For more detail on the legislation, please see
https://thevault.exchange/?get_group_doc=143/1501167539-PR20170713Geita.pdf. On 10 January 2018, the Government of Tanzania
published its new Mining Regulations, 2018, which contains, amongst others, the implementation provisions of the amended Mining
Act. AngloGold Ashanti's subsidiaries are seeking a constructive dialogue with the Government of Tanzania, to gain assurances that our
Geita Gold Mine in Tanzania will not be affected by these legal and fiscal changes, given their Mine Development Agreements which
guarantee fiscal and regulatory stability as well as agreement between all parties before material legal and regulatory changes are
made. In these circumstances, our subsidiaries have, however, had no choice but to take the precautionary step of safeguarding their
interests by commencing international arbitration proceedings as first announced in July 2017. AngloGold Ashanti has, throughout
this period, sought constructive dialogue with the Government of Tanzania, which has subsequently indicated its willingness
to engage. The parties will work toward agreeing a mutually agreeable time for those discussions to take place.
DRC regulatory update:
The Democratic Republic of the Congo (DRC) has recently announced a new mining code that purports to make a number of changes to
the operating environment for the DRC's extractive industries, including those in its mining, and oil and gas sectors. These changes may
impact on the protections enjoyed by AngloGold Ashanti's joint venture (the Kibali gold project), located in north-eastern DRC. The project
is operated by Randgold Resources and is owned by Randgold Resources (45 percent), AngloGold Ashanti (45 percent) and Société
Minière de Kilo-Moto SA (SOKIMO) (10 percent). For more detail on the new mining code, please refer to the following press release
issued by our partner Randgold Resources on 4 February 2018, titled "Randgold to engage at top level with Congolese government on
new mining code". The new mining code is yet to receive presidential assent needed for it to be passed into law. AngloGold Ashanti, as
part of an industry initiative, is lobbying against the passage of the legislation of the code in its current form. We are currently assessing
the impact of the new mining code on our joint venture.
UPDATE ON CAPITAL PROJECTS
Obuasi Redevelopment Approved
Agreements has been reached with the government of Ghana for the redevelopment of Obuasi Gold mine in Ghana, subject to ratification by
Ghana's parliament of the relevant fiscal and development agreements. These agreements have been signed by the Government and ratification
is scheduled during the current parliamentary sitting. The board therefore approved interim funding of $31m to cover the first 6 months,
for the purpose of project team establishment, project set-up and front end engineering and design, so as not to delay the project.
"We are confident that we have the right redevelopment plan, the strongest possible technical team and a very strong level of support
from the Government of Ghana, which together will help make the project a success, with attractive capital investment for an operation of
this size and returns well in excess of our hurdle rates," Graham Ehm, Executive Vice President of Group Planning & Technical said.
"Obuasi will rank among the largest contributors to the company's global production with costs below our current average and will generate
substantial cash flows from the second year of operations, when we see production approaching a rate of 400,000 oz per annum."
The study into Obuasi's redevelopment has been completed with improvements in returns and payback period. This was achieved with
an improved geological model, an earlier start to production, phasing of capital expenditure and governmental support.
The redevelopment will establish Obuasi as a long-life, modern, mechanised underground mining operation, which is a fundamental
departure from the previous operating method used at the mine. The redevelopment will deliver a mine that makes use of automation
and controls for improved operational efficiencies and consistency in performance. It envisages a smaller, but more skilled workforce that
can operate in a mechanised/automated environment with a strong sense of accountability.
The detailed feasibility study covers every aspect of the mine, including operational methods, systems and processes, environmental
management and mine rehabilitation, organisational design, human resource strategy and social responsibility, among others.
The project implementation will be undertaken in two distinct phases.
- Phase 1 includes project establishment, mine rehabilitation and development, plant and infrastructure refurbishment to enable production
at a rate of 2,000 tons per day for the first operating year. This will take approximately 18 months from the project's commencement, with
the first gold pour expected in the third quarter of 2019.
- Phase 2 includes refurbishment of the underground materials handling system, shafts and ventilation, construction of the primary
crusher, the SAG/Ball circuit, carbon regeneration and a new gold room and tailings storage facility. This will take a further 12 months and
enable the operation to climb to 4,000tpd. The operation will then ramp up to 5,000tpd over the following 3 years.
Mine production for the first 10 years will be focussed on the upper ore bodies and is expected to average 350,000 to 400,000oz at an
average head grade of 8.1g/t. Total cash costs are expected to average between $590/oz-$680/oz, while AISC are expected to be between
$795/oz-$850/oz. Mine production for the second 10 years increases to 400,000 -450,000oz per annum, as the mine deepens into higher
grade ore. AISC is then expected to improve to between $750/oz -$800/oz.
The project delivers internal real rates of return of between 16% and 23% at real gold prices of between $1,100/oz and $1,240/oz, and is highly
leveraged to the gold price.
Initial project capital expenditure anticipated over the first 2.5 years is expected to be between $450m -$500m, excluding pre-production
capital of $64m. After the completion of phase 2, extended project capital expenditure of $94m will continue through to year six, covering
the development of the Obuasi Deeps Decline (ODD) to the lower level of the mine, refurbishment of the KMS shaft, installation of new
underground pump stations and construction of the flotation tailings storage facility.
The project has a current life of more than 20 years. Opportunities exist to further optimise the plan and to extend life by targeting the
mine's significant additional mineral endowment, particularly with down-plunge extensions of the ore body into the Adansi Deeps area
below 50 Level.
The redevelopment of the mine will be led by Executive Vice President Graham Ehm, who led the turnaround of the Geita mine in 2009-
2010. Graham also oversaw the successful development of the Tropicana mine in Australia, which was completed in 2013 on time and on
budget, and has continued to meet all of its operating, geological and financial milestones in the years since. Graham will be assisted by
senior members of the Tropicana project team, including the Senior Vice President of Project Implementation Massoud Massoudi, as well
as senior members of our Ghanaian team, led by Eric Asubonteng, Managing Director of the Obuasi mine, who assisted in bringing the
mine to limited operations status and has been instrumental in negotiations with the Government of Ghana.
Kibali
At Kibali, the underground materials handling system and ore hoisting via the shaft were commissioned and ramp up is progressing well
and according to plan. The paving on the central haulage level was completed during the year, allowing haulage from the ore passes into
the underground crushers to the shaft system. It is expected that the mine will see a significant increase in production once the ramp up
has been completed. Underground produced 505,000t of ore from the declines in the last quarter of the year. In addition, Kibali completed
2.7km of development from the declines during the quarter. Total underground ore tonnes mined for the year were 1.787kt.
The only major capital project remaining is construction of the third hydropower station at Azambi which is expected to be commissioned
in the second half of 2018.
Construction of the next phase of tailings storage facility was initiated during the quarter, providing additional capacity for carbon in leach
(CIL) tails and is scheduled for completion in the second half of 2018.
Mponeng Phase 1 and 2 project
AngloGold Ashanti is extending the life of its Mponeng mine initially through the Phase 1 project which aims to access deeper, higher-
grade ore through the development of a decline below the current secondary shaft. The completion of the Mponeng Phase 1 project is
expected around mid 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. Full
commissioning is expected in the second half of 2018.
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. The ramp-up to steady state of ore reserve development is continuing. The revised geological resource model associated with
the Ventersdorp Contact Reef is currently under review.
Phase 2, under evaluation, would deepen the secondary shaft to further extend its life. The Phase 2 feasibility study for the Mponeng life
of mine project has recommenced, after being interrupted at the end of May 2017 to allow for the completion of a geotechnical study to
determine the most appropriate position of the infrastructure relative to tolerable levels of rock stress.
Sadiola Sulphides 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 Sulphides project. Despite our efforts and
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. Although we remain committed to the project, failing to reach an agreement, the operation will enter a restricted
exploitation phase and then at a later stage, when stockpiles are exhausted, it will enter a phase of suspended exploitation (care and
maintenance).
Siguiri
At Siguiri, AngloGold Ashanti is investing about $115m over approximately 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. During 2017, $67m was spent on
the project and a total of $145m has been committed to date. The project remains largely on schedule and the final costs are currently
being reviewed as 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.
Technology and Innovation
In June 2017, AngloGold Ashanti announced a decision to put the TauTona and Savuka operations in orderly closure. In view of this, all
aspects of the technology work conducted were suspended with the exceptions of Thermal Spalling, and High Strength Backfill for
Mponeng Mine.
Thermal Spalling will continue with testing in 2018. In support of the Phakisa industry initiative for mining, AngloGold Ashanti would avail
technologies for future redeployment and continued development by interested parties associated with the Phakisa process.
EXPLORATION UPDATE
Generative Exploration
During the second half of 2017, generative exploration activities were undertaken in Australia, Colombia, Brazil, Argentina and the USA,
completing 41,117m of drilling globally. Total expenditure for the second half of 2017 was $17m.
In Australia, exploration activity was focussed on the Butcher Well and Lake Carey farm-in ("AngloGold Ashanti" earning 70%), within the
Laverton district. The Reverse Circulation (RC) and Diamond Drilling (DD) at Butcher Well was completed in early June. 68 RC/DD holes
were completed for 16,000m in the second half of 2017. During this period, the Camp Zone, discovered by AngloGold Ashanti has returned
multiple intercepts of strong mineralisation over 500m of strike and 400m down plunge and is open at depth and to the south. This new
discovery begins at approximately 300m below the surface and has underground potential. In addition, 15 RC holes were completed at
Mt Minnie and defined a zone of gold mineralisation over a 600m strike at shallow depth. Five fences of RC holes spaced at 150m returned
gold intersections at shallow depth, suggesting open pit potential.
At the Oak Dam project, within the Tropicana belt, a large scale geochemical sampling programme was completed. Two significant gold
in soil anomalies were delineated both situated along major structures. A follow up aircore programme is planned for 2018.
In the USA, the reconnaissance rotosonic drill programme at the Celina project in Minnesota, which is 100% AngloGold Ashanti (AGA)
owned, returned no significant results from basal till sampling. AGA has been awarded ~380km2 of new exploration leases in Minnesota
via the annual State Nonferrous Metallic Mineral public lease sale which overlie a prospective geological setting within the Wawa Sub-
province. Passive seismic geophysical surveys were completed. Additional reconnaissance rotasonic drilling is planned for the first quarter
in 2018.
At the Silicon project in Nevada (a 100% earn-in option agreement with Renaissance Gold) surface geochemical, geological and spectral
mapping were completed with a total of 174 samples collected. DD of the main low-sulphidation vein target is scheduled for the first quarter
of 2018.
In Brazil, work concentrated on the Tromai project which covers a ~2,000km2 tenement package (AGA earning 70% from Equinox Gold
Corp; formerly Trek Mining). DD and RC drilling continued (3,112m DD and 3,466m RC the second half of 2017) over known structures
associated with artisanal mining and soil geochemistry. New targets were generated from the aeromagnetic and airborne Electromagnetic
surveys, with further drilling planned for the first quarter in 2018.
In Argentina and Tanzania early stage generative exploration programmes progressed well.
Brownfields Exploration
During the second half of 2017, brownfields exploration activities were undertaken across the globe. Over the period, brownfields
exploration completed 262,468m of drilling for a total expenditure of $34m (capital) and $28m (expensed).
South Africa: The surface exploration drilling activities in operation at the start of the year have been completed and both drill sites
UD58A and UD60 have been rehabilitated and signed off by the respective landowners. The Ventersdorp Contact Reef was successfully
intersected in both surface holes. Piloting of UD63 has commenced and percussion drilling to 400m has been completed. Site
establishment is underway and the foundations have been completed. Percussion drilling at UD61 has been completed to 511m.
Tanzania: Exploration drilling at Geita concentrated on Mineral Resource development drilling programmes at Matandani, Geita Hill
underground Blocks 1 & 2, Nyankanga Block 5 and Star & Comet Cuts 2 & 3 Underground projects, exploratory drilling to test the
Nyankanga 3D Seismic Targets 1 & 5 and reconnaissance drilling at the Selous Satellite target. 200 drill holes totaling 25,262m were
completed.
Significant intersections were reported from Matandani BST, Nyankanga Block 5 and Star & Comet Underground projects, Geita Hill-Lone
Blocks 1 & 2 and the Selous satellite target.
Guinea: At Siguiri, exploration consisted of drilling in Block 1 and Block 2 mine license areas, soil sampling in the Saraya West license
area and the collection of geometallurgical measurements. Total drilling amounted to 26,837m. A total of 6,314m of the Seguelen and
2,663m of Foulata core was XRF scanned for the Geometallurgical study.
Ghana: At Iduapriem, drilling (2,139m) at Block 1W / Nueng continued with field mapping conducted at Nkyemia and Ajopa NW.
Democratic Republic of the Congo: Drilling at Kibali to test the folded BIF model of the main KCD orebody has supported the down
plunge continuity of mineralised system for approximately 600m. A new domain (12000 lode) below the known 9000 lode was intersected
and is interpreted to be the down plunge projection of Sessenge SW some 2.6km up plunge. Mineralisation in this lode is associated with
pyrite and arsenopyrite on the contacts of the BIF. Wide-spaced drilling from underground will begin to test the 12000 lode model.
Near mine exploration activities were focused around the Kombokolo, Makoke, Rhino-Agbarabo, KZD, Kalimva, Ikamva, Ndala North and
the South KZ areas in the second half, drilling a total of 10,251m. Field work was undertaken at Ndala North and the South KZ areas with
the objective of making new discoveries.
Republic of Mali: A total of 8,122m of RC drilling was completed at Sadiola South, Tambali West, Dogofile South, Timbabougouni,
Voyager West, Tabakoto West and Lakanfla. Significant intersections were returned at Sadiola South and anomalous values were
returned at Dogofile south. Both targets were followed up with the Dogofile South results showing no improvement while the results for
the Sadiola South are awaited.
A total of 2,607m DD was completed at FE3, Tambali and Sadiola North focusing on shallow and deep transitional and sulphide potential.
Significant results were obtained from FE3, FE4, and Tambali deep drilling, Sadiola North, Sadiola South and Voyager West.
In Argentina, a total of 2,725m RC was drilled in 26 holes on 12 different structures at CVSA. RC was used for shallow drilling and
scouting in poorly known areas. A DD programme was carried out using two rigs to drill a total of 8,524m in 38 holes covering 10 veins.
An important trenching programme was completed to define new 2018 drilling targets and channel sampling is ongoing. A total of 15,345m
were excavated in 124 trenches and 2,172m of sampling was cut in 71 channels. Trenching was focused in four areas: Antonio, Laura,
Sonia, Vanguardia2 and Vanguardia3 in the NW of the district; Cuncuna and Sandra veins in the East; Serena Sur in the main central
part; and Teresa, El Palo, Laguna del Mineral, Ariadna and Patricia veins in the southern, silver-rich sector of the district. A ground
geophysics programme designed to search for shallow blind structures is also ongoing and will continue in 2018.
In Brazil, at Cuiabá, exploration was focused on underground drilling for ore body extension, Mineral Resource conversion and the testing
of conceptual targets. Deep drilling moved up from L28-30 to L24 to reach the northern hinge of the Cuiaba structure. Regional mapping
and sampling continued around Cuiaba at the Pompeu target. 45% of the soil sampling programme was completed with 582 samples
collected.
At Lamego exploration focused on Carraguem SW ore body where drilling is being undertaken from a hanging wall drive. The results are
promising, especially on the normal limb where the Carraguem ore body shows continuity along with Carraguem SW. Mineral Resource
modelling is in progress.
Córrego do Sítio exploration included underground Mineral Resource conversion drilling at CDSI, and surface Mineral Resource
conversion drilling at Rosalino (CDSI), Pinta Bem (CDSII) and Anomalia I (CDSIII) and Mineral Resource addition drilling at Cachorro
Bravo and Laranjeiras (CDSI). Blue sky exploratory drilling was limited to Anomalia I target. A total of 36,403m were drilled by the
contractor and 12,319m by AGA.
At Serra Grande, a total of 14,557m was drilled. Exploration focused on extensions and infill of known orebodies related to the mining
areas, this included drilling at Orebody IV, Structure III, Inga, Pequizao, Palmeiras and Mangaba. Field work continued on regional leases
and CA's were signed with interested parties.
In Colombia, at Gramalote no drilling took place. Field based exploration focused on rock chip sampling and soil sampling at San Javier,
Santa Barbara, and Encarnaciones targets to continue delineation of the quartz vein system identified in the area. At La Colosa, no
exploration occurred.
At Quebradona, no drilling took place during the second half and work mainly focused on supporting the Pre-Feasibility Study with field
activities, core relogging and geotechnical logging.
In Australia, at Sunrise Dam drilling targeted Vogue Deeps, Carey Shear, Dolly Porphyry, Cosmo, Cosmo East and Elle orebodies, the
Western Area of Vogue 1800, 1600 and 1400 Blocks, down dip extensions to Cosmo, Carey Shear, Elle and Astro North. A total of
45,870m were drilled in the second half.
At Tropicana, extensional drilling at Boston Shaker to evaluate underground potential down dip of the Long Island pit design and minor
infill drilling at Crouching Tiger took place. A total of 9,045m RC and 14,805m of DD, for a total of 23,850m, was completed.
Regional brownfields exploration completed 16,936m of AC, 8,291m RC and 2,993 DD drilling, for a total of 28,220m. A number of
significant intercepts were returned from follow-up RC/DDH drilling at the New Zebra prospect and will be followed up in 2018. AC drilling
was completed at Chocolatini and Don Pedro prospects with no significant results returned. Meanwhile several encouraging results were
reported from AC drilling at Angel Eyes which will be followed up in 2018.
See the Exploration Update document on the Company website: www.anglogoldashanti.com for more details on both Brownfields and
Generative exploration programmes conducted during the year ended 31 December 2017.
DIVIDENDS
In February 2017, the Board approved a dividend policy which provides for an annual dividend to be based on 10% of the free cash flow,
before capital growth expenditure, generated by the business for that financial year. Furthermore, this is subject to the Board exercising
its discretion on an annual basis, after taking into consideration the prevailing market conditions, balance sheet flexibility and future capital
commitments of the group.
Consequently, the quantum of the dividend payout is expected to be volatile as it is based on a free cash flow metric that is subject to
market conditions and is impacted by the level of funding of sustaining capital expenditure. In 2017, due to the significant capital
reinvestment that the company has made at its existing operations, sustaining capital expenditure increased by 19% to $829 million when
compared to the prior year. In line with the approved dividend policy, the board has applied its discretion in adjusting the 2017 free cash
flow, pre-growth capital expenditure metric for the $49m abnormal South African retrenchment costs paid and has approved a dividend of
ZAR 70 cents per share (approximately 6 US cents per share). (Refer to note 19).
The Board is satisfied that subsequent to the dividend declaration, the Company has adequate balance sheet flexibility and sufficient
funding facilities available to withstand market volatility. The continuation of the dividend reflects capital discipline and management's
commitment to improving shareholder returns.
GUIDANCE 2018
Guidance Notes
- Includes three months production from Moab
Production (000oz) 3,325 – 3,450 and Kopanang at ~30koz per month
All-in sustaining costs ($/oz) 990 – 1,060 Assumptions: ZAR12.79/$, $/A$0.78,
Costs BRL3.20/$, AP19.61/$; Brent $62/bl
Total cash costs ($/oz) 770 - 830
Corporate costs ($m) 70 - 80
Overheads
Expensed exploration and study costs ($m) 115 - 125 Including equity accounted joint ventures
Total ($m) 800 - 920
Capex Sustaining capex ($m) 600 - 670
Expenditure related to Obuasi, Siguiri Hard
Non-sustaining capex ($m) 200 - 250 Rock project, Kibali and Mponeng
Depreciation and amortisation ($m) 775
Depreciation and amortisation – included in equity accounted earnings
($m) 150 Earnings of associates and joint ventures
Interest and finance costs ($m) 140
Primarily related to the costs of care and
Other operating expenses ($m) 90 maintenance
Both production and cost estimates assume neither labour interruptions or power disruptions, nor further 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 (SEC).
MINERAL RESOURCE AND ORE RESERVE
The Mineral Resource and Ore Reserve for AngloGold Ashanti Limited (AngloGold Ashanti) are reported in accordance with the minimum
standards described by the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (The
SAMREC Code, 2016 edition), and also conform to the standards set out in the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves (JORC Code, 2012 Edition).
The Mineral Resource is inclusive of the Ore Reserve component unless otherwise stated. In complying with revisions to the SAMREC
code the changes to AngloGold Ashanti's Mineral Resource and Ore Reserve have been reviewed and it was concluded that none of the
changes are material to the overall valuation of the Company. AngloGold Ashanti has therefore once again resolved not to provide the
detailed reporting as defined in Table 1 of the code, apart from the maiden Ore Reserve declaration for Gramalote. The Company will
however continue to provide the high level of detail it has in previous years in order to comply with the transparency requirements of the
code.
AngloGold Ashanti strives to actively create value by growing its major asset – the Mineral Resource and Ore Reserve. This drive is based
on active, well-defined brownfields and generative exploration programmes, innovation in both geological modelling and mine planning
and continual optimisation of the asset portfolio.
GOLD PRICE
The following local prices of gold were used as a basis for estimation in the December 2017 declaration:
Local prices of gold
Gold Price
South Africa Australia Brazil Argentina
US$/oz ZAR/kg AUD/oz BRL/oz ARS/oz
2017 Ore Reserve 1 100 512 059 1 491 3 573 17 898
2017 Mineral Resource 1 400 601 870 1 824 4 492 21 242
The SAMREC and JORC Codes require the use of reasonable economic assumptions. These include long-range commodity price
forecasts which are prepared in-house.
MINERAL RESOURCE
The AngloGold Ashanti Mineral Resource reduced from 214.7Moz in December 2016 to 208.2Moz in December 2017. This gross annual
decrease of 6.6Moz includes depletion of 4.8Moz. The balance of 1.8Moz reductions in Mineral Resource, results from an increase due
to exploration and modelling changes of 1.9Moz and a reduction due to other factors of 0.4Moz, whilst changes in economic assumptions
resulted in a 3.3Moz reduction. The Mineral Resource has been estimated at a gold price of $1,400/oz (2016: $1,400/oz).
MINERAL RESOURCE Moz
Mineral Resource as at 31 December 2016 214.7
Depletions -4.8
Sub Total 209.9
Additions
Siguiri Decreased costs resulted in a reduced cutoff grade 1.4
Obuasi Mineral Resource updated based on recaptured geological data 0.6
Other Additions less than 0.5Moz. 1.6
Sub Total 213.5
Reductions
TauTona Mine closed and part of the Mineral Resource transferred to Mponeng -2.6
West Wits Surface Cost increase resulted in reductions -0.8
Moab Khotsong Due primarily to reclassification of Mineral Resource -0.8
Other Reductions less than 0.5Moz. -1.1
Mineral Resource as at 31 December 2017 208.2
ORE RESERVE
The AngloGold Ashanti Ore Reserve reduced from 50.1Moz in December 2016 to 49.5Moz in December 2017. This gross annual decrease
of 0.6Moz includes depletion of 4.3Moz. The balance of 3.7Moz additions in Ore Reserve, results from exploration and modelling changes
of 4.0Moz and other factors of 0.5Moz, whilst changes in economic assumptions resulted in a 0.8Moz reduction. The Ore Reserve has
been estimated using a gold price of $1,100/oz (2016: $1,100/oz).
ORE RESERVE Moz
Ore Reserve as at 31 December 2016 50.1
Depletions -4.3
Sub Total 45.8
Additions
Gramalote Positive Pre-Feasibility study complete and approved by Board 1.8
AGA Mineracão Inclusion of transitional and sulphide material in the CDS Rosalino open pit as well
as Mineral Resource conversions. 0.8
Tropicana Model update for Havana South and new designs for Boston Shaker 0.6
Obuasi Updated mine plan based on updated Mineral Resource models 0.4
CVSA Due to improved methodology 0.3
Other Additions less than 0.3Moz. 0.8
Sub Total 50.5
Reductions
TauTona Mine closed -0.7
Other Reductions less than 0.3Moz. -0.3
Ore Reserve as at 31 December 2017 49.5
Rounding of numbers may result in computational discrepancies.
SALE OF ASSETS
AngloGold Ashanti announced on 19 October 2017 that it was selling various assets in the Vaal River region of its South African operations.
The sales processes are still underway and therefore do not affect the stated Mineral Resource and Ore Reserve for 2017. However, on
conclusion of the sales the following reductions are expected:
Kopanang: Mineral Resource 3.02Moz
Ore Reserve 0.36Moz
Moab Khotsong: Mineral Resource 16.30Moz
Ore Reserve 4.87Moz
BY-PRODUCTS
Several by-products will be recovered as a result of processing of the gold Ore Reserve. These include 40.4kt of uranium oxide from the
South African operations, 0.37Mt of sulphur from Brazil and 21.8Moz of silver from Argentina.
CORPORATE GOVERNANCE
AngloGold Ashanti has established a Mineral Resource and Ore Reserve Steering Committee (RRSC), which is responsible for setting
and overseeing the Company's Mineral Resource and Ore Reserve governance framework and for ensuring that it meets the Company's
goals and objectives while complying with all relevant regularity codes. Its membership and terms of references are mandated under a
policy document signed off by the Chief Executive Officer.
Over more than a decade, the Company has developed and implemented a rigorous system of internal and external reviews aimed at
providing assurance in respect of Ore Reserve and Mineral Resource estimates. The following operations were subject to an external
review in line with the policy that each operation project will be reviewed by an independent third party on average once every three years:
- Mineral Resource and Ore Reserve at Mponeng
- Mineral Resource at Obuasi
- Ore Reserve at Obuasi
- Mineral Resource and Ore Reserve at Tropicana
- Mineral Resource and Ore Reserve at Gramalote
- Mineral Resource at Kibali
The external reviews were conducted by AMEC, Aranz Geo, Snowden, Optiro, SRK and Optiro respectively. Certificates of sign-off have
been received from the companies conducting the external reviews to state that the Mineral Resource and/or Ore Reserve comply with
the SAMREC and JORC Codes.
In addition, numerous internal Mineral Resource and Ore Reserve process reviews were completed by suitably qualified Competent
Persons from within AngloGold Ashanti and no significant deficiencies were identified. The Mineral Resource and Ore Reserve are
underpinned by appropriate Mineral Resource Management processes and protocols that ensure adequate corporate governance. These
procedures have been developed to be compliant with the guiding principles of the Sarbanes-Oxley Act of 2002 (SOX).
AngloGold Ashanti makes use of a web based group reporting database called the Resource and Reserve Reporting System (R3) for the
compilation and authorisation of Mineral Resource and Ore Reserve reporting. It is a fully integrated system for the reporting and
reconciliation of Mineral Resource and Ore Reserve that supports various regulatory reporting requirements including the SEC and the
JSE under SAMREC. AngloGold Ashanti uses R3 to ensure a documented chain of responsibility exists from the competent persons at
the operations to the Company's RRSC.
AngloGold Ashanti has also developed an enterprise-wide risk management tool that provides consistent and reliable data that allows for
visibility of risks and actions across the group. This tool is used to facilitate, control and monitor material risks to the Mineral Resource
and Ore Reserve, thus ensuring that the appropriate risk management and mitigation plans are in place.
COMPETENT PERSONS
The information in this report relating to exploration results, Mineral Resources and Ore Reserves is based on information compiled by or
under the supervision of the Competent Persons as defined in the SAMREC or JORC Codes. All Competent Persons are employed by
AngloGold Ashanti, except for Kibali and Morila, and have sufficient experience relevant to the style of mineralisation and type of deposit
under consideration and to the activity which they are undertaking. The legal tenure of each operation and project has been verified to the
satisfaction of the accountable Competent Person and all Ore Reserves have been confirmed to be covered by the required mining permits
or there exists a realistic expectation that these permits will be issued. This will be detailed in the 2017 Mineral Resource and Ore Reserve
document.
Accordingly, the Chairman of the Mineral Resource and Ore Reserve Steering Committee, Vaughan Chamberlain, MSc (Mining
Engineering), BSc (Hons) (Geology), MGSSA and FAusIMM, assumes responsibility for the Mineral Resource and Ore Reserve processes
for AngloGold Ashanti and is satisfied that the Competent Persons have fulfilled their responsibilities. Vaughan Chamberlain has 30 years'
experience in exploration and mining and is employed full-time by AngloGold Ashanti and can be contacted at the following address: 76
Rahima Moosa Street, Newtown, 2001, South Africa.
A detailed breakdown of Mineral Resource and Ore Reserve and backup detail will be provided on the AngloGold Ashanti website
(www.anglogoldashanti.com) and www.aga-reports.com.
MINERAL RESOURCE BY REGION (ATTRIBUTABLE) INCLUSIVE OF ORE RESERVE
Gold Tonnes Grade Contained gold
as at 31 December 2017 Category million g/t Tonnes Moz
South Africa Measured 139 1.83 254 8
Indicated 742 2.29 1697 55
Inferred 28 14.52 410 13
Total 909 2.60 2360 76
Continental Africa Measured 47 1.75 82 3
Indicated 468 2.60 1218 39
Inferred 203 3.41 694 22
Total 718 2.78 1995 64
Australasia Measured 34 0.97 32 1
Indicated 127 1.98 251 8
Inferred 35 1.84 65 2
Total 196 1.78 348 11
Americas Measured 27 5.07 139 4
Indicated 1064 0.99 1054 34
Inferred 803 0.72 578 19
Total 1895 0.93 1771 57
AngloGold Ashanti total Measured 247 2.06 508 16
Indicated 2401 1.76 4220 136
Inferred 1070 1.63 1746 56
Total 3718 1.74 6475 208
Rounding of figures may result in computational discrepancies.
MINERAL RESOURCE BY REGION (ATTRIBUTABLE) EXCLUSIVE OF ORE RESERVE
Gold Tonnes Grade Contained gold
as at 31 December 2017 Category million g/t Tonnes Moz
South Africa Measured 9 20.06 175 6
Indicated 82 10.28 845 27
Inferred 16 15.97 253 8
Total 107 11.93 1273 41
Continental Africa Measured 5 4.78 23 1
Indicated 277 2.65 733 24
Inferred 203 3.42 694 22
Total 484 2.99 1450 47
Australasia Measured 11 0.57 6 0
Indicated 84 1.79 151 5
Inferred 35 1.84 65 2
Total 130 1.71 222 7
Americas Measured 17 5.80 96 3
Indicated 1046 0.91 956 31
Inferred 801 0.66 527 17
Total 1863 0.85 1579 51
AngloGold Ashanti total Measured 41 7.39 301 10
Indicated 1489 1.80 2685 86
Inferred 1055 1.46 1538 49
Total 2585 1.75 4524 145
Rounding of figures may result in computational discrepancies.
ORE RESERVE BY REGION (ATTRIBUTABLE)
Gold Tonnes Grade Contained gold
as at 31 December 2017 Category million g/t Tonnes Moz
South Africa Proved 131 0.50 65 2
Probable 663 1.00 666 21
Total 795 0.92 731 24
Continental Africa Proved 36 1.48 53 2
Probable 184 2.57 472 15
Total 220 2.39 525 17
Australasia Proved 23 1.14 26 1
Probable 43 2.33 100 3
Total 66 1.92 126 4
Americas Proved 9 2.89 26 1
Probable 82 1.61 132 4
Total 91 1.73 157 5
AngloGold Ashanti total Proved 199 0.86 170 5
Probable 972 1.41 1370 44
Total 1171 1.32 1540 50
Rounding of figures may result in computational discrepancies.
EY
Building a better working world
102 Rivonia Road Ernst & Young Incorporated
Sandton Co. Reg. No. 2005/002308/21
Private Bag X14 Tel: +27 (0) 11 772 3000
Sandton Fax: +27 (0) 11 772 4000
2146 Docex 123 Randburg
ey.com
Independent auditor's review report on the condensed consolidated financial information for the twelve months ended
31 December 2017 to the shareholders of AngloGold Ashanti Limited
We have reviewed the condensed consolidated financial statements of AngloGold Ashanti Limited (the 'company') contained in the
accompanying preliminary report on pages 18 to 36, which comprise the accompanying condensed consolidated statement of
financial position as at 31 December 2017, the condensed consolidated income statement, statement of comprehensive income,
statement of changes in equity and statement of cash flows for the twelve months then ended, and selected explanatory notes.
Directors' Responsibility for the condensed consolidated financial statements
The directors are responsible for the preparation and presentation of these condensed consolidated financial statements in
accordance with the requirements of the JSE Limited Listings Requirements for preliminary reports, as set out in note 1 to the
condensed consolidated financial statements, and the requirements of the Companies Act of South Africa, and for such internal
control as the directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express a conclusion on these condensed consolidated financial statements. We conducted our review in
accordance with International Standard on Review Engagements (ISRE) 2410, which applies to a review of historical information
performed by the independent auditor of the entity. This standard requires us to conclude whether anything has come to our
attention that causes us to believe that the condensed consolidated financial statements are not prepared in all material respects in
accordance with the applicable financial reporting framework. This standard also requires us to comply with relevant ethical
requirements.
A review of financial statements in accordance with ISRE 2410 is a limited assurance engagement. We perform procedures, primarily
consisting of making enquiries of management and others within the entity, as appropriate, and applying analytical procedures, and
evaluating the evidence obtained.
The procedures performed in a review are substantially less than and differ in nature from those performed in an audit conducted in
accordance with International Standards on Auditing. Accordingly, we do not express an audit opinion on these condensed
consolidated financial statements.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated financial
statements of the company for the twelve months ended 31 December 2017 are not prepared, in all material respects, in accordance
with the requirements of the JSE Limited Listings Requirements for preliminary reports, as set out in note 1 to the condensed
consolidated financial statements, and the requirements of the Companies Act of South Africa.
Ernst & Young Inc.
Ernest Adriaan Lodewyk Botha - Director
Registered Auditor
Chartered Accountant (SA)
102 Rivonia Road, Sandton
Johannesburg, South Africa
19 February 2018
GROUP – INCOME STATEMENT
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Notes Unaudited Unaudited Reviewed Audited
Revenue 2 2,416 2,213 4,543 4,254
Gold income 2 2,324 2,125 4,356 4,085
Cost of sales 3 (1,874) (1,763) (3,582) (3,263)
Gain (loss) on non-hedge derivatives and other commodity contracts 9 50 10 19
Gross profit (loss) 459 412 784 841
Corporate administration, marketing and other expenses (30) (32) (64) (61)
Exploration and evaluation costs (52) (71) (114) (133)
Other operating expenses 4 (47) (64) (88) (110)
Special items 5 (186) (36) (438) (42)
Operating profit (loss) 144 209 80 495
Interest received 2 7 11 15 22
Exchange gain (loss) (6) (5) (11) (88)
Finance costs and unwinding of obligations 6 (86) (83) (169) (180)
Fair value adjustment on issued bonds - 34 - 9
Share of associates and joint ventures' profit (loss) 7 31 (9) 22 11
Profit (loss) before taxation 90 157 (63) 269
Taxation 8 (95) (138) (108) (189)
Profit (loss) for the year (5) 19 (171) 80
Allocated as follows
Equity shareholders (15) 11 (191) 63
Non-controlling interests 10 8 20 17
(5) 19 (171) 80
Basic earnings (loss) per ordinary share (cents) (1) (4) 2 (46) 15
Diluted earnings (loss) per ordinary share (cents) (2) (4) 2 (46) 15
(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.
The condensed consolidated financial statements for the year ended 31 December 2017 have been prepared by the corporate accounting staff
of AngloGold Ashanti Limited headed by Ms Meroonisha Kerber (CA (SA)), the Senior Vice President: Finance. This process was supervised
by Ms Kandimathie Christine Ramon (CA (SA)), the Group's Chief Financial Officer and Mr Srinivasan Venkatakrishnan (BCom; ACA (ICAI)),
the Group's Chief Executive Officer. The condensed consolidated financial statements for the twelve months ended 31 December 2017 were
reviewed, but not audited, by the Group's statutory auditors, Ernst & Young Inc.
GROUP – STATEMENT OF COMPREHENSIVE INCOME
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Reviewed Audited
Profit (loss) for the year (5) 19 (171) 80
Items that will be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations 40 58 123 180
Net gain (loss) on available-for-sale financial assets 17 (14) 20 13
Release on impairment of available-for-sale financial assets 2 - 3 -
Release on disposal of available-for-sale financial assets (6) (1) (6) (2)
Deferred taxation thereon 6 4 8 (2)
19 (11) 25 9
Items that will not be reclassified subsequently to profit or loss:
Actuarial gain (loss) recognised 8 3 8 (2)
Deferred taxation thereon (2) (1) (2) -
6 2 6 (2)
Other comprehensive income (loss) for the year, net of tax 65 49 154 187
Total comprehensive income (loss) for the year, net of tax 60 68 (17) 267
Allocated as follows
Equity shareholders 50 60 (37) 250
Non-controlling interests 10 8 20 17
60 68 (17) 267
GROUP – STATEMENT OF FINANCIAL POSITION
As at As at
Dec Dec
2017 2016
US Dollar million Notes Reviewed Audited
ASSETS
Non-current assets
Tangible assets 3,742 4,111
Intangible assets 138 145
Investments in associates and joint ventures 1,507 1,448
Other investments 131 125
Inventories 100 84
Trade, other receivables and other assets 67 34
Deferred taxation 4 4
Cash restricted for use 37 36
5,726 5,987
Current assets
Other investments 7 5
Inventories 683 672
Trade, other receivables and other assets 222 255
Cash restricted for use 28 19
Cash and cash equivalents 205 215
1,145 1,166
Non-current assets held for sale 10 348 -
1,493 1,166
Total assets 7,219 7,153
EQUITY AND LIABILITIES
Share capital and premium 12 7,134 7,108
Accumulated losses and other reserves (4,471) (4,393)
Shareholders' equity 2,663 2,715
Non-controlling interests 41 39
Total equity 2,704 2,754
Non-current liabilities
Borrowings 2,230 2,144
Environmental rehabilitation and other provisions 942 877
Provision for pension and post-retirement benefits 122 118
Trade, other payables and deferred income 3 4
Deferred taxation 363 496
3,660 3,639
Current liabilities
Borrowings 38 34
Trade, other payables and deferred income 638 615
Taxation 53 111
729 760
Non-current liabilities held for sale 10 126 -
855 760
Total liabilities 4,515 4,399
Total equity and liabilities 7,219 7,153
Rounding of figures may result in computational discrepancies.
GROUP – STATEMENT OF CASH FLOWS
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Reviewed Audited
Cash flows from operating activities
Receipts from customers 2,433 2,228 4,534 4,231
Payments to suppliers and employees (1,699) (1,524) (3,383) (2,929)
Cash generated from operations 734 704 1,151 1,302
Dividends received from joint ventures 6 32 6 37
Taxation refund 3 9 14 12
Taxation paid (67) (35) (174) (165)
Net cash inflow (outflow) from operating activities 676 710 997 1,186
Cash flows from investing activities
Capital expenditure (438) (430) (829) (706)
Expenditure on intangible assets (1) (2) (1) (5)
Proceeds from disposal of tangible assets 4 2 7 4
Other investments acquired (37) (32) (91) (73)
Proceeds from disposal of other investments 32 28 78 61
Investments in associates and joint ventures (7) (7) (27) (11)
Proceeds from disposal of associates and joint ventures - 10 - 10
Loans advanced to associates and joint ventures (2) (2) (6) (4)
Decrease (increase) in cash restricted for use (8) 3 (8) 8
Interest received 7 5 15 14
Net cash (outflow) inflow from investing activities (450) (425) (862) (702)
Cash flows from financing activities
Proceeds from borrowings 484 585 815 787
Repayment of borrowings (600) (1,004) (767) (1,333)
Finance costs paid (71) (87) (138) (172)
Bond settlement premium, RCF and bond transaction costs - (30) - (30)
Dividends paid - (9) (58) (15)
Net cash inflow (outflow) from financing activities (187) (545) (148) (763)
Net increase (decrease) in cash and cash equivalents 39 (260) (13) (279)
Translation 2 5 3 10
Cash and cash equivalents at beginning of period 164 470 215 484
Cash and cash equivalents at end of period 205 215 205 215
Cash generated from operations
Profit (loss) before taxation 90 157 (63) 269
Adjusted for:
Movement on non-hedge derivatives and other commodity contracts (9) (50) (10) (19)
Amortisation of tangible assets 428 440 817 789
Finance costs and unwinding of obligations 86 83 169 180
Environmental, rehabilitation and other expenditure (10) (15) (30) (13)
Special items – non cash 149 38 394 44
Amortisation of intangible assets 3 5 6 20
Fair value adjustment on $1.25bn bonds - (34) - (9)
Interest received (note 2) (7) (11) (15) (22)
Share of associates and joint ventures' (profit) loss (note 7) (31) 9 (22) (11)
Exchange loss on foreign currency reserve release - - - 60
Other non-cash movements 26 56 61 90
Movements in working capital 9 26 (156) (76)
734 704 1,151 1,302
Movements in working capital:
(Increase) decrease in inventories (45) (15) (67) (48)
(Increase) decrease in trade, other receivables and other assets 8 (82) (86) (131)
Increase (decrease) in trade, other payables and deferred income 46 123 (3) 103
9 26 (156) (76)
Rounding of figures may result in computational discrepancies.
GROUP – STATEMENT OF CHANGES IN EQUITY
Equity holders of the parent
Retained Foreign
Share Other earnings Cash flow Available- Actuarial currency Non-
capital and capital (Accumulated hedge for-sale gains translation controlling Total
US Dollar million premium reserves losses) reserve reserve (losses) reserve Total interests equity
Balance at 31 December 2015 7,066 117 (3,174) (1) 7 (19) (1,566) 2,430 37 2,467
Profit (loss) for the year 63 63 17 80
Other comprehensive income
(loss)(1) 9 (2) 180 187 187
Total comprehensive income
(loss) - - 63 - 9 (2) 180 250 17 267
Shares issued 42 42 42
Share-based payment for share
awards net of exercised (7) (7) (7)
Dividends of subsidiaries - (15) (15)
Transfer to reserves (2) 2 - -
Translation 7 (6) 1 (2) - -
Balance at 31 December 2016 7,108 117 (3,119) (1) 17 (21) (1,386) 2,715 39 2,754
Balance at 31 December 2016 7,108 117 (3,119) (1) 17 (21) (1,386) 2,715 39 2,754
Profit (loss) for the year (191) (191) 20 (171)
Other comprehensive income
(loss) 25 6 123 154 154
Total comprehensive income
(loss) - - (191) - 25 6 123 (37) 20 (17)
Shares issued 26 26 26
Share-based payment for share
awards net of exercised (1) (1) (1)
Dividends paid (39) (39) (39)
Dividends of subsidiaries - (19) (19)
Translation 9 (10) 1 (1) (1) 1 -
Balance at 31 December 2017 7,134 125 (3,359) (1) 43 (16) (1,263) 2,663 41 2,704
(1) Foreign currency translation reserve includes an exchange difference of $60m reclassified on the repayment of a loan which was designated as part
of the investment in subsidiary and $53m arising on preference shares cancelled.
Rounding of figures may result in computational discrepancies.
Segmental reporting
AngloGold Ashanti's operating segments are being reported based on the financial information provided to the Chief Executive Officer
and the Executive Committee, collectively identified as the Chief Operating Decision Maker (CODM). Individual members of the Executive
Committee are responsible for geographic regions of the business.
Gold income
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Reviewed Audited
South Africa 576 593 1,101 1,173
Continental Africa 1,011 872 1,895 1,663
Australasia 394 336 709 646
Americas 580 558 1,104 1,036
2,561 2,359 4,809 4,518
Equity-accounted investments included above (237) (234) (453) (433)
2,324 2,125 4,356 4,085
By-product revenue
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Reviewed Audited
South Africa 7 10 15 23
Continental Africa 1 2 3 4
Australasia 1 1 2 2
Americas 65 56 135 110
74 69 155 139
Equity-accounted investments included above - - (1) (1)
74 69 154 138
Total cash costs
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Reviewed Audited
South Africa 499 468 968 857
Continental Africa 589 533 1,088 976
Australasia 214 206 407 404
Americas 297 267 547 486
Corporate and other (2) 4 (6) -
1,597 1,478 3,004 2,723
Equity accounted investments included above (146) (155) (295) (288)
1,451 1,323 2,709 2,435
Rounding of figures may result in computational discrepancies.
Cost of sales
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Reviewed Audited
South Africa 560 562 1,114 1,041
Continental Africa 769 716 1,510 1,331
Australasia 300 286 550 540
Americas 457 411 851 752
Corporate and other - 7 (3) 5
2,086 1,982 4,022 3,669
Equity-accounted investments included above (212) (219) (440) (406)
1,874 1,763 3,582 3,263
Gross profit (loss)
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Reviewed Audited
South Africa 25 80 (3) 149
Continental Africa 242 155 386 334
Australasia 94 50 159 106
Americas 124 147 253 283
Corporate and other (1) (6) 2 (4)
484 426 797 868
Equity-accounted investments included above (25) (14) (13) (27)
459 412 784 841
Capital expenditure
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Reviewed Audited
South Africa 70 106 150 182
Continental Africa 218 179 409 291
Australasia 87 71 153 109
Americas 120 135 234 225
Corporate and other 4 2 7 4
499 493 953 811
Equity-accounted investments included above (60) (61) (123) (100)
439 432 830 711
Rounding of figures may result in computational discrepancies.
Gold production
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
oz (000)
South Africa 467 481 903 967
Continental Africa 788 702 1,453 1,321
Australasia 305 269 559 520
Americas 447 431 840 820
2,007 1,883 3,755 3,628
Total assets
As at As at
Dec Dec
2017 2016
US Dollar million Reviewed Audited
South Africa 1,734 1,818
Continental Africa 3,153 3,090
Australasia 929 804
Americas 1,258 1,273
Corporate and other 145 168
7,219 7,153
Rounding of figures may result in computational discrepancies.
Notes
for the six months and year ended 31 December 2017
1 Basis of preparation
The condensed consolidated financial statements are prepared in accordance with the requirements of the JSE Limited Listings
Requirements for preliminary reports and the requirements of the Companies Act of South Africa. The Listings Requirements require
preliminary reports to be prepared in accordance with the framework concepts and the measurement and the recognition requirements
of International Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements
as issued by Financial Reporting Standards Council and to also, as a minimum, contain the information required by IAS 34 Interim
Financial Reporting. The accounting policies applied in the preparation of the condensed consolidated financial statements are in terms
of International Financial Reporting Standards (IFRS) and are consistent with those applied in the consolidated annual financial
statements for the year ended 31 December 2016. No new standards were adopted in 2017.
Based on materiality, certain comparatives have been aggregated.
2 Revenue
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Reviewed Audited
Gold income 2,324 2,125 4,356 4,085
By-products (note 3) 74 69 154 138
Royalties received (note 5) 11 8 18 9
Interest received 7 11 15 22
2,416 2,213 4,543 4,254
3 Cost of sales
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Reviewed Audited
Cash operating costs 1,456 1,324 2,728 2,444
By-products revenue (note 2) (74) (69) (154) (138)
1,382 1,255 2,574 2,306
Royalties 61 56 116 105
Other cash costs 8 12 19 24
Total cash costs 1,451 1,323 2,709 2,435
Retrenchment costs 3 9 6 14
Rehabilitation and other non-cash costs 16 15 29 43
Amortisation of tangible assets 428 440 817 789
Amortisation of intangible assets 3 5 6 20
Inventory change (27) (29) 15 (38)
1,874 1,763 3,582 3,263
4 Other operating expenses
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Reviewed Audited
Care and maintenance costs 34 33 62 70
Pension and medical defined benefit provisions 4 22 9 25
Government fiscal claims and care and maintenance of old
tailings operations 7 8 14 14
Other expenses 2 1 3 1
47 64 88 110
Rounding of figures may result in computational discrepancies.
5 Special items
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Reviewed Audited
Impairment and derecognition of assets (1) 182 2 297 3
Impairment of other investments 2 - 3 -
Retrenchment and related costs 13 1 88 1
Legal fees and other costs related to contract terminations and
settlement costs (2) 4 8 71 11
Write-down of inventories - 12 3 12
Net (profit) loss on disposal of assets (7) (4) (8) (4)
Royalties received (note 2) (11) (8) (18) (9)
Indirect tax expenses (recoveries) 3 (5) 2 (2)
Repurchase premium and cost on settlement of issued bonds - 30 - 30
186 36 438 42
(1) Impairment and derecognition of assets includes the following:
The group reviews and tests the carrying value of its mining assets when events or changes in circumstances suggest that the carrying
amount may not be recoverable.
During June 2017, due to a change in mine plans to restructure the South African operations, Kopanang mine, TauTona mine including
Savuka section and the West Gold Plant section of the Surface operations in South Africa were fully impaired as they were not expected to
generate future economic benefits.
On 19 October 2017, AngloGold Ashanti announced the sale of various assets in the Vaal River Region including the Moab Khotsong Mine
to Harmony Gold Mining Company Limited ("Harmony") for a cash consideration of US$300 million. Moab Khotsong Mine was accordingly
transferred to held for sale and written down to the fair value less cost to sell. Refer to note 10 - Non current assets and liabilities held for
sale.
Goodwill has been allocated to its respective CGU's where it is tested for impairment as part of the CGU on an annual basis. Following the
impairment review, goodwill to the value of $9m at First Uranium SA was impaired utilising a real pre-tax discount rate of 9.2% during 2017.
The discount rates for 2017 were determined on a basis consistent with the 2016 discount rates.
Impairment calculation assumptions as at 31 December 2017 – goodwill, tangible and intangible assets
Management assumptions for the value in use of tangible assets and goodwill include:
- the gold price assumption represents management's best estimate of the future price of gold. A long-term real gold price of $1,240/oz
(2016: $1,212/oz) is based on a range of economic and market conditions that will exist over the remaining useful life of the assets.
Annual life of mine plans take into account the following:
- proved and probable Ore Reserve;
- value beyond proved and probable reserves (including exploration potential) determined using the gold price assumption referred to
above;
- In determining the impairment for each cash generating unit, the real pre-tax rate was derived from the weighted average cost of capital
(WACC) using the Capital Asset Pricing Model ("CAPM") to determine the required return on equity with risk factors consistent with the
basis used in 2016. At 31 December 2017, the derived group WACC was 7.50% (real post-tax) which is 20 basis points higher than in
2016 of 7.30%, and is based on the industry average capital structure of the major gold companies considered to be appropriate
peers. In determining the WACC for each cash generating unit, sovereign and mining risk factors are considered to determine country
specific risks. In certain instances, a specific risk premium was added to large projects being undertaken or the turnaround nature of a
specific mine to address uncertainties in the forecast of the cash flows;
- foreign currency cash flows translated at estimated forward exchange rates and then discounted using appropriate discount rates for
that currency;
- cash flows used in impairment calculations are based on life of mine plans which range from 2 years to 42 years; and
- variable operating cash flows are increased at local Consumer Price Index rates.
For the year ended 31 December 2017, the following impairments and derecognitions were recognised:
Impairment and derecognition Impairment of Taxation Post-tax
US Dollar million of tangible assets intangible assets thereon total
TauTona 79 - 19 60
Kopanang 35 - 9 26
Surface operations 9 - - 9
Moab Khotsong 146 - 41 105
Mponeng 3 - 1 2
First Uranium SA 13 9 4 18
Other 3 - - 3
Total 288 9 73 224
(2) Legal fees and other costs related to contract terminations and settlement costs include the following:
Litigation claims - Class action
Occupational Diseases in Mines and Works Act (ODMWA) litigation - On 3 March 2011, in Mankayi vs. AngloGold Ashanti, the
Constitutional Court of South Africa held that section 35(1) of the Compensation for Occupational Injuries and Diseases Act, 1993
does not cover an "employee" who qualifies for compensation in respect of "compensable diseases" under ODMWA. This judgement
allows such qualifying employee to pursue a civil claim for damages against the employer. Following the Constitutional Court
decision, AngloGold Ashanti and members of the working group (discussed below) have been subject to numerous claims relating
to silicosis and other Occupational Lung Diseases (OLD), including several potential class actions and individual claims.
In November 2014, Anglo American South Africa, AngloGold Ashanti, Gold Fields, Harmony Gold Mining Company and Sibanye-
Stillwater formed an industry working group on OLD to address issues relating to compensation for OLD in the gold mining industry
in South Africa. The working group now also includes African Rainbow Minerals ("ARM"). The working group remains of the view
that achieving a comprehensive solution which is both fair to past, present and future employees, and sustainable for the sector, is
preferable to protracted litigation. The working group will continue with its efforts – which have been ongoing for more than two
years – to find common ground with all stakeholders, including government, labour and the claimants' legal representatives.
AngloGold Ashanti, along with other mining companies including Anglo American South Africa, ARM, Gold Fields, Harmony Gold
Mining Company, DRDGold, Randgold and Exploration Company, and Sibanye-Stillwater, were served with a consolidated class
action application on 21 August 2013. The companies do not believe that they are liable in respect of the claims brought, and they
are defending these. They do, however, believe that they should work together to seek a solution to this South African mining
industry legacy issue.
On 13 May 2016, the High Court ordered, among other things: (1) the certification of two classes: (a) a silicosis class comprising
current and former mine workers who have contracted silicosis and the dependents of mine workers who have died of silicosis; and
(b) a tuberculosis class comprising current and former mine workers who have worked on the mines for a period of not less than
two years and who have contracted pulmonary tuberculosis and the dependents of deceased mine workers who died of pulmonary
tuberculosis; and (2) that the common law be developed to provide that, where a claimant commences suing for general damages
and subsequently dies before close of pleadings, the claim for general damages will transmit to the estate of the deceased claimant.
The progression of the classes certified will be done in two phases: (i) a determination of common issues, on an opt-out basis, and
(ii) the hearing and determination of individualised issues, on an opt-in basis. In addition, costs were awarded in favour of the
claimants. The High Court ruling did not represent a ruling on the merits of the cases brought by the Claimants. The amount of
damages has not yet been quantified for any of the class representatives in the Consolidated Class Application or for any other
members of the classes.
AngloGold Ashanti and the other respondents believed that the judgement addressed a number of highly complex and important
issues, including a far-reaching amendment of the common law, that have not previously been considered by other courts in South
Africa. The High Court itself found that the scope and magnitude of the proposed claims is unprecedented in South Africa and that
the class action would address novel and complex issues of fact and law. The respondents applied for leave to appeal against the
judgement because they believed that the court's ruling on some of these issues is incorrect and that another court may come to a
different decision.
On 24 June 2016, the South Gauteng High Court granted the mining companies leave to appeal against the finding amending the
common law in respect of the transmissibility of general damages claims. It refused leave to appeal on the certification of silicosis
and tuberculosis classes. On 15 July 2016, AngloGold Ashanti and the other respondents each filed petitions to the Supreme Court
of Appeal (SCA) for leave to appeal against the certification of the class action for silicosis and pulmonary tuberculosis. On 21
September 2016, the SCA granted the respondents leave to appeal against all aspects of the class certification judgement of the
South Gauteng High Court delivered in May 2016. The appeal hearing before the SCA was scheduled to be heard from 19 – 23
March 2018. On 10 January 2018, in response to a request from all parties involved in the appeal to the SCA in respect of the
silicosis and tuberculosis class action litigation, the Registrar of the SCA postponed the hearing date of the appeal until further
notice.
Provision raised
As a result of the progress made by the working group since 31 December 2016 on a variety of issues, management is now in a
position to reliably estimate within an acceptable range the AngloGold Ashanti share of a possible settlement of the class action
claims and related costs. As a result, AngloGold Ashanti has provided for this obligation and recorded an expense of $63m for the
year ended 31 December 2017. The ultimate outcome of these negotiations and the court sanction of the agreement remains
uncertain and accordingly the provision is subject to adjustment in the future.
6 Finance costs and unwinding of obligations
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Reviewed Audited
Finance costs 72 72 142 158
Unwinding of obligations and accretion of convertible bonds 14 11 27 22
86 83 169 180
7 Share of associates and joint ventures' profit (loss)
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Reviewed Audited
Revenue 237 235 453 441
Operating costs, special items and other expenses (222) (244) (470) (446)
Net interest received (paid) 1 (1) 1 3
Profit (loss) before taxation 16 (10) (16) (2)
Taxation 3 5 23 7
Profit (loss) after taxation 19 (5) 7 5
Net (impairment) reversal of investments in associates and
joint ventures 12 (4) 15 6
31 (9) 22 11
8 Taxation
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Reviewed Audited
South African taxation
Non-mining tax - 1 1 1
Prior year (over) under provision - (3) - (3)
Deferred taxation
Impairment and disposal of tangible assets (44) - (72) -
Other temporary differences (7) 16 (62) 12
Prior year (over) under provision 15 23 15 25
Change in estimated deferred tax rate 31 - 31 -
(5) 37 (87) 35
Foreign taxation
Normal taxation 104 137 201 246
Prior year over provision (27) (5) (26) (10)
Deferred taxation
Temporary differences 23 (14) 20 (65)
Prior year (over) under provision 2 (17) 2 (17)
Change in statutory tax rate (2) - (2) -
100 101 195 154
95 138 108 189
9 Headline earnings (loss)
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Reviewed Audited
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 (15) 11 (191) 63
Net impairment (reversal) and derecognition of assets 180 1 295 (16)
Impairment of other investments 2 - 3 -
Net (profit) loss on disposal of assets (7) 5 (8) 4
Exchange loss on foreign currency translation reserve release - - - 60
Taxation (45) 1 (72) -
Headline earnings (loss) 115 18 27 111
Headline earnings (loss) per ordinary share (cents)(1) 28 4 6 27
Diluted headline earnings (loss) per ordinary share (cents) (2) 28 4 6 27
(1) Calculated on the basic weighted average number of ordinary shares.
(2) Calculated on the diluted weighted average number of ordinary shares.
10 Non-current assets and liabilities held for sale
Kopanang gold mine, West Gold Plant and related infrastructure (Kopanang Sale Assets)
The Kopanang gold mine is situated approximately 170 kilometres southwest of Johannesburg. It is included in the South Africa
reporting segment. Kopanang gold mine was previously recognised as a combination of tangible assets, current assets, current
and long term liabilities. Due to the change in mine plans to restructure Kopanang, an impairment of $34m was recognised at
30 June 2017. On 19 October 2017, AngloGold Ashanti Limited announced that it had entered into an agreement to dispose of the
Kopanang Sale Assets to Heaven-Sent SA Sunshine Investment Company Limited ("HSC"), a Chinese capital management
company headquartered in Hong Kong. The purchase consideration will be settled on the closing date by a payment of R100 million
in cash and the transfer of certain gold bearing rock dumps from a subsidiary of HSC, namely Village Main reef Limited, to AngloGold
Ashanti. Kopanang mine is a single shaft system, which produces gold as its primary output. In 2017, Kopanang mine produced
91,000 ounces of gold (2016: 91,000 ounces).
Moab Khotsong gold mine and related infrastructure, Nufcor and Margaret Water Company (Moab Sale Assets)
The Moab Khotsong gold mine is situated approximately 180 kilometres southwest of Johannesburg. It is included in the South
Africa reporting segment. Moab Khotsong gold mine was previously recognised as a combination of tangible assets, current assets,
current and long term liabilities. On 19 October 2017, AngloGold Ashanti Limited announced that it had entered into a sale and
purchase agreement, to dispose of various assets situated in the Vaal River region of South Africa to Harmony Gold Mining
Company Limited for a cash consideration of US$300 million.
The assets and related interests to be sold include the following:
- The Moab Khotsong mine (which incorporates the Great Noligwa mine) and related infrastructure;
- AngloGold Ashanti's entire interest in Nuclear Fuels Corporation of South Africa Proprietary Limited (Nufcor); and
- AngloGold Ashanti's entire interest in Margaret Water Company NPC.
Moab Khotsong is an underground mine which produced 294,000 ounces in 2017 (2016: 280,000 ounces).
The above transactions are subject to fulfilment of a number of conditions precedent including regulatory and third party approvals
which are expected to be obtained within the next several months.
The carrying amount of major classes of assets and liabilities include:
US Dollar million 31 December 2017 (Reviewed)
Moab Sale Kopanang
assets Sale assets Total
Tangible Assets 277 12 289
Intangible assets 2 - 2
Inventories 16 5 21
Other investments 31 5 36
Non-current assets held for sale 326 22 348
Environmental and rehabilitation provision 20 9 29
Provision for pension and post-retirement benefits 1 - 1
Trade, other payables and deferred income 10 5 15
Deferred taxation 81 - 81
Non-current liabilities held for sale 112 14 126
Net non-current assets held for sale 214 8 222
Accounting policy
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through
a sale transaction rather than through continuing use. This condition is regarded as having been met only when the sale is highly
probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed
to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount
and fair value less costs to sell.
11 Number of shares
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
Unaudited Unaudited Reviewed Audited
Authorised number of shares:
Ordinary shares of 25 SA cents each 600,000,000 600,000,000 600,000,000 600,000,000
A redeemable preference shares of 50 SA cents each 2,000,000 2,000,000 2,000,000 2,000,000
B redeemable preference shares of 1 SA cents each 5,000,000 5,000,000 5,000,000 5,000,000
C redeemable preference shares at no par value 30,000,000 30,000,000 30,000,000 30,000,000
Issued and fully paid number of shares:
Ordinary shares of 25 SA cents each 410,054,615 408,223,760 410,054,615 408,223,760
A redeemable preference shares of 50 SA cents each 2,000,000 2,000,000 2,000,000 2,000,000
B redeemable preference shares of 1 SA cents each 778,896 778,896 778,896 778,896
In calculating the basic and diluted number of ordinary shares outstanding for the period, the following were taken into
consideration:
Ordinary shares 409,759,701 408,169,347 409,265,471 407,519,542
Fully vested options 4,965,424 3,334,117 6,174,606 5,065,500
Weighted average number of shares 414,725,125 411,503,464 415,440,077 412,585,042
Dilutive potential of share options - 2,056,495 - 2,121,358
Dilutive number of ordinary shares 414,725,125 413,559,959 415,440,077 414,706,400
12 Share capital and premium
As at As at
Dec Dec
2017 2016
US Dollar million Reviewed Audited
Balance at beginning of period 7,161 7,119
Ordinary shares issued 26 42
Sub-total 7,187 7,161
Redeemable preference shares held within group (53) (53)
7,134 7,108
13 Borrowings
AngloGold Ashanti's borrowings are interest bearing.
As at As at
Dec Dec
2017 2016
US Dollar million Reviewed Reviewed
Change in liabilities arising from financing activities:
Reconciliation of total borrowings
A reconciliation of the total borrowings included in the statement of financial position is set
out in the following table:
Opening balance 2,178 2,737
Proceeds from borrowings 815 787
Repayment of borrowings (767) (1,333)
Finance costs paid on borrowings (125) (159)
Interest charged to the income statement 130 136
Translation 37 10
Closing balance 2,268 2,178
Reconciliation of finance costs paid:
A reconciliation of the finance cost paid included in the statement of cash flows is set out in
the following table:
Finance costs paid on borrowings 125 159
Commitment fees, environmental guarantees fees and other borrowing costs 13 13
Total finance costs paid 138 172
14 Exchange rates
As at As at
Dec Dec
2017 2016
Unaudited Unaudited
ZAR/USD average for the year to date 13.30 14.68
ZAR/USD average for the quarter 13.63 13.90
ZAR/USD average for the half year to date 13.39 13.98
ZAR/USD closing 12.36 13.73
AUD/USD average for the year to date 1.30 1.35
AUD/USD average for the quarter 1.30 1.34
AUD/USD average for the half year to date 1.28 1.33
AUD/USD closing 1.28 1.39
BRL/USD average for the year to date 3.19 3.48
BRL/USD average for the quarter 3.25 3.29
BRL/USD average for the half year to date 3.21 3.27
BRL/USD closing 3.31 3.26
ARS/USD average for the year to date 16.57 14.78
ARS/USD average for the quarter 17.55 15.46
ARS/USD average for the half year to date 17.42 15.20
ARS/USD closing 18.65 15.89
15 Financial risk management activities
Borrowings
The rated bonds are carried at amortised cost and their fair values are their closing market values at the reporting date (fair value
hierarchy – level 1) which results in the difference noted in the table below. The interest rate on the remaining borrowings is reset on
a short-term floating rate basis and accordingly the carrying amount is considered to approximate the fair value.
As at As at
Dec Dec
2017 2016
US Dollar million Reviewed Audited
Carrying amount 2,268 2,178
Fair value 2,377 2,203
Fair Value hierarchy
The group uses the following hierarchy for determining and disclosing the fair value of financial instruments:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (as prices)
or indirectly (derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The following tables set out the group's financial assets measured at fair value by level within the fair value hierarchy:
Type of instruments:
31 December 2017 31 December 2016
Reviewed Reviewed
US Dollar million Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Equity securities 80 - - 80 51 - - 51
Environmental obligations
Pursuant to environmental regulations in the countries in which we operate, we are obligated to close our operations and rehabilitate
the lands which we mine in accordance with these regulations. As a consequence, AngloGold Ashanti is required in some
circumstances to provide either reclamations bonds issued by third party entities, establish independent trust funds or provide
guarantees issued by the operation, to the respective environmental protection agency or such other government department with
responsibility for environmental oversight in the respective country to cover the potential environmental rehabilitation obligation in
specified amounts.
In most cases, the environmental obligations will expire on completion of the rehabilitation although in some cases we are required
to potentially post bonds for events unknown that may arise after the rehabilitation has been completed.
In South Africa, AngloGold Ashanti has established a trust fund which has assets of ZAR 1.39bn and guarantees of ZAR 1.52bn
issued by various banks, for a current carrying value of the liability of ZAR 1.15bn. In Australia, since 2014, the group has paid an
amount of AUD $4m into a Mine Rehabilitation Fund for a current carrying value of the liability of AUD $113.2m. At Iduapriem the
group has provided a bond comprising of a cash component of $9.8m with a further bond guarantee amounting to $35.9m issued
by Ecobank Ghana Limited and Barclays Ghana Limited for a current carrying value of the liability of $44.3m. At Obuasi the group
has provided a bond comprising of a cash component of $20.3m with a further bank guarantee amounting to $30m issued by
Nedbank Limited for a current carrying value of the liability of $211m. In some circumstances, the group may be required to post
further bonds in future years which will have a consequential income statement charge for the fees charged by the providers of the
reclamation bonds.
16 Capital commitments
As at As at
Dec Dec
2017 2016
US Dollar million Reviewed Audited
Orders placed and outstanding on capital contracts at the prevailing rate
of exchange (1) 87 58
(1) Includes the group's attributable share of capital commitments relating to associates and 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, 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 finance arrangements contain financial covenants and other similar undertakings. To the extent that
external borrowings are required, the group's covenant performance indicates that existing financing facilities will be available to
meet the above commitments. To the extent that any of the financing facilities mature in the near future, the group believes that
sufficient measures are in place to ensure that these facilities can be refinanced.
17 Contractual commitments and contingencies
AngloGold Ashanti's material contingent liabilities at 31 December 2017 and 31 December 2016 are detailed below:
Contingencies and guarantees
Dec Dec
2017 2016
US Dollars million Reviewed Audited
Contingent liabilities
Litigation - Ghana(1) (2) 97 97
Litigation - North America(3) - -
Tax disputes - Brazil(4) 24 15
Tax dispute - AngloGold Ashanti Colombia S.A.(5) 150 141
Tax dispute - Cerro Vanguardia S.A.(6) 27 29
Groundwater pollution(7) - -
Deep groundwater pollution - Africa(8) - -
298 282
Litigation claims
(1) Litigation - On 11 October 2011, AngloGold Ashanti (Ghana) Limited (AGAG) terminated Mining and Building Contractors
Limited's (MBC) underground development agreement, construction on bulkheads agreement and diamond drilling agreement
at Obuasi mine. The parties reached agreement on the terms of the separation and concluded a separation agreement on
8 November 2012. On 20 February 2014, AGAG was served with a demand issued by MBC claiming a total of $97m.
In December 2015, the proceedings were stayed in the High Court pending arbitration. In February 2016, MBC submitted the
matter to arbitration.
(2) Litigation - AGAG received a summons on 2 April 2013 from Abdul Waliyu and 152 others in which the plaintiffs allege that they
were or are residents of the Obuasi municipality or its suburbs and that their health has been adversely affected by emission
and/or other environmental impacts arising in connection with the current and/or historical operations of the Pompora Treatment
Plant (PTP), which was decommissioned in 2000. The plaintiffs' alleged injuries include respiratory infections, skin diseases
and certain cancers. The plaintiffs subsequently did not timely file their application for directions, but AGAG intends to allow
some time to pass prior to applying to have the matter struck out for want of prosecution. On 24 February 2014, executive
members of the PTP (AGAG) Smoke Effect Association (PASEA), sued AGAG by themselves and on behalf of their members
(undisclosed number) on grounds similar to those discussed above, as well as economic hardships as a result of constant failure
of their crops. This matter has been adjourned indefinitely. AGAG intends to allow some time to pass prior to applying to have
the matter struck out for want of prosecution. In view of the limitation of current information for the accurate estimation of a
liability, no reliable estimate can be made for AGAG's obligation in either matter.
(3) Litigation - 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 & Victor Gold Mining Company in 2015
during the negotiation- and-sale process. AngloGold Ashanti believes the lawsuit is without merit and intends to vigorously
defend against it. The matter is proceeding. In view of the limitation of current information for the accurate estimation of a liability,
no reliable estimate can be made for the obligation.
Tax claims
(4) Tax disputes - AngloGold Ashanti Limited's subsidiaries in Brazil are involved in various disputes with tax authorities. These
disputes involve federal tax assessments including income tax, royalties, social contributions, VAT and annual property tax. In
December 2017, new VAT assessments of $14 million were received. Collectively, the possible amount involved is
approximately $24m (2016: $15m). Management is of the opinion that these taxes are not payable.
(5) Tax dispute - In January 2013, AngloGold Ashanti Colombia S.A. (AGAC) received notice from the Colombian Tax Office (DIAN)
that it disagreed with the Company's tax treatment of certain items in the 2010 and 2011 income and equity tax returns. On 23
October 2013, AGAC received the official assessments from the DIAN which established that an estimated additional tax of
$21m (2016: $21m) will be payable if the tax returns are amended. Penalties and interest for the additional taxes are expected
to be $129m (2016: $120m). The Company believes that the DIAN has applied the tax legislation incorrectly. AGAC
subsequently challenged the DIAN's ruling by filing lawsuits in March 2015 and April 2015 before the Administrative Tribunal of
Cundinamarca (the trial court for tax litigation). Closing arguments on the tax disputes were presented in February and June
2017 and judgement is pending.
(6) Tax dispute - On 12 July 2013, Cerro Vanguardia S.A. (CVSA) received a notification from the Argentina Tax Authority (AFIP)
requesting corrections to the 2007, 2008 and 2009 income tax returns of $6m (2016: $7m) relating to the non-deduction of tax
losses previously claimed on hedge contracts. The AFIP is of the view that the financial derivatives could not be considered as
hedge contracts, as hedge contract losses could only be offset against gains derived from the same kind of hedging contracts.
Penalties and interest on the disputed amounts are estimated at a further $21m (2016: $22m). CVSA and AFIP have
corresponded on this issue over the past several years and while management is of the opinion that the taxes are not payable,
the government continues to assert its position regarding the use of the financial derivatives. CVSA filed an appeal with the Tax
Court on 19 June 2015, and the parties submitted their final reports in July 2017. The matter is pending with the Tax Court.
Other
(7) 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 improvements in some instances. Furthermore, literature
reviews, field trials and base line modelling techniques suggest, but have 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.
(8) Deep groundwater pollution - The group has identified potential water ingress and future pollution risk posed by deep
groundwater in certain underground mines in Africa. Various studies have been undertaken by AngloGold Ashanti since 1999
to understand this potential risk. In South Africa, 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 Mineral and Petroleum
Resources Development Act (MPRDA) requires that the affected mining companies develop a Regional Mine Closure Strategy
to be approved by the Department of Mineral Resources. In view of the limitation of current information for the accurate
estimation of a liability, no reliable estimate can be made for the obligation.
18 Impact of the adoption of IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial
Instruments
IFRS 15 Revenue from Contracts with Customers (IFRS 15) was issued by the International Accounting Standards Board (IASB)
during May 2014. AngloGold Ashanti is mandatorily required to apply IFRS 15 for annual reporting periods beginning on or after
1 January 2018.
Management has assessed the potential impact of IFRS 15 on the financial statements of the group and concluded that the group
does not sell product based on multiple-element arrangements and it does not sell product on a provisional or variable pricing basis
and as such the new standard does not have a significant impact on the timing or amount of the group's revenue recognition.
However, the adoption of IFRS 15 will result in the presentation of by-product revenue in Revenue from product sales where
previously by-product revenue was included in cost of sales. Revenue from product sales includes gold income and by-product
revenue. This change in classification results in a corresponding increase in costs of sales, and therefore will not have an impact
on previously reported gross profit.
As currently reported:
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Reviewed Audited
Revenue 2,416 2,213 4,543 4,254
Gold income 2,324 2,125 4,356 4,085
Cost of sales (1,874) (1,763) (3,582) (3,263)
Gain (loss) on non-hedge derivatives and other commodity contracts 9 50 10 19
Gross profit 459 412 784 841
Gross profit % 19.75% 19.39% 18.00% 20.59%
By-products revenue for the six months ended 31 December 2017 and 2016 and the years ended 31 December 2017 and 2016
($74m, $69m and $154m and $138m, respectively) is included in the revenue line, but is offset and thus reduces cost of sales in
the detailed income statement.
On adoption of IFRS 15, AngloGold Ashanti will disclose revenue from all product sales in the detailed income statement.
Accordingly, the detailed income statement would be restated for the effects of adopting IFRS 15 as follows:
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Unaudited Unaudited
Revenue 2,416 2,213 4,543 4,254
Revenue from product sales 2,398 2,194 4,510 4,223
Cost of sales (1,948) (1,832) (3,736) (3,401)
Gain (loss) on non-hedge derivatives and other commodity contracts 9 50 10 19
Gross profit 459 412 784 841
Gross profit % 19.14% 18.78% 17.38% 19.91%
AngloGold Ashanti intends to apply IFRS 15 retrospectively to each prior reporting period presented in accordance with IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors.
IFRS 9 Financial Instruments
The Group's financial assets include debt instrument, cash restricted for use and cash and cash equivalents which will be subject
to IFRS 9 expected credit loss model as they are to be carried at amortised cost. We have evaluated the possible impact of the
expected credit loss model and we do not expect the adoption of the IFRS 9 to have a significant impact on total assets, total
liabilities or the results of the group.
The accounting policy for listed equity investments will depend on the nature of the listed investment. Listed investments which are
held to meet rehabilitation liabilities in future will be classified as fair value through profit and loss. Listed investments held for other
purposes will be classified as fair value through other comprehensive income.
19 Dividends
The directors of AngloGold Ashanti Limited (Registration Number 1944/017354/06) declared Dividend No.119 for the year ended
31 December 2017 as detailed below. In terms of the withholding tax on dividends which became effective on 1 April 2012, the
following additional information is disclosed:
Dividends have been declared out of total reserves
Gross dividend declared per ordinary share in South African cents 70,00
Dividends tax rate applicable to shareholders liable to pay the dividend tax 20%
Net dividend in South African cents (where dividend tax at 20% is payable on payment date) 56,00
The issued ordinary share capital of AngloGold Ashanti at date of declaration is 410,097,264
AngloGold Ashanti's tax reference number 9640006608
In compliance with the requirements of Strate, given the Company's primary listing on the JSE, the salient dates for payment of the
dividend are as follows:
To holders of ordinary shares
2018
Currency conversion date for Australian dollars and Ghanaian cedis Friday, 16 March
Last date to trade ordinary shares cum dividend Monday, 19 March
Last date to register transfer of certificated securities cum dividend Monday, 19 March
Ordinary shares trade ex-dividend Tuesday, 20 March
Record date Friday, 23 March
Payment date Friday, 6 April
Dividends in respect of dematerialised shareholdings will be credited to shareholders' accounts with the relevant CSDP or broker.
19 Dividends continued
To comply, with further requirements of Strate, share certificates may not be dematerialised or rematerialised between Tuesday,
20 March 2018 and Friday, 23 March 2018, both days inclusive. No transfers between South African, Australian and Ghana share
registers will be permitted between Friday, 16 March 2018 and Friday, 23 March 2018, both days inclusive.
To holders of CHESS Depositary Interests (CDIs)
Each CDI represents one-fifth of an ordinary share.
2018
Last date to trade ordinary shares cum dividend Wednesday, 21 March
Last date to register transfer of certificated securities cum dividend Wednesday, 21 March
Ordinary shares trade ex-dividend Thursday, 22 March
Record date Friday, 23 March
Payment date Friday, 6 April
To holders of American Depositary Shares (ADS)
Each American Depositary Share represents one ordinary share.
2018
Ex dividend on New York Stock Exchange Thursday, 22 March
Record date Friday, 23 March
Approximate date of currency conversion Friday, 6 April
Approximate payment date of dividend Monday, 16 April
Assuming an exchange rate of R11,6641/$, the gross dividend payable per ADS, which is subject to a 20% South African withholding
tax, is equivalent to 6 US cents. However, the actual rate of payment will depend on the exchange rate on the date for currency
conversion.
To holders of Ghanaian Depositary Shares (GhDSs)
100 GhDSs represent one ordinary share
2018
Last date to trade and to register GhDSs cum dividend Thursday, 15 March
GhDSs trade ex-dividend Tuesday, 20 March
Record date Friday, 23 March
Approximate payment date of dividend Monday, 9 April
Assuming an exchange rate of R1/¢0,3827, the gross dividend payable per share, which is subject to a 20% South African withholding
tax, is equivalent to 0,26789 cedis. However, the actual rate of payment will depend on the exchange rate on the date for currency
conversion.
20 Announcements
On 19 October 2017, AngloGold Ashanti announced the disposal of its Kopanang Mine, the West Gold Plant and related
infrastructure – AngloGold Ashanti announced that it has entered into an agreement to dispose of the Kopanang Mine, the West
Gold Plant and the related infrastructure to Heaven-Sent SA Sunshine Investment Company Limited ("HSC"), a Chinese capital
management company headquartered in Hong Kong. Refer to Note 10 - Non-current assets and liabilities held for sale, for details.
On 19 October 2017, AngloGold Ashanti announced the sale of various assets in the Vaal River Region including the Moab
Khotsong Mine to Harmony – AngloGold Ashanti announced that it has entered into a sale and purchase agreement (the "SPA")
to dispose of various assets situated in the Vaal River region of South Africa to Harmony Gold Mining Company Limited ("Harmony")
for a cash consideration of US$300 million (the "Transaction"). Refer to Note 10 - Non-current assets and liabilities held for sale, for
details.
By order of the Board
SM PITYANA S VENKATAKRISHNAN KC RAMON
Chairman Chief Executive Officer Chief Financial Officer
19 February 2018
Non-GAAP disclosure
From time to time AngloGold Ashanti Limited may publicly disclose certain "Non-GAAP" financial measures in the course of its financial
presentations, earnings releases, earnings conference calls and otherwise. Set out below are measures extracted from financial information
regularly presented to the Chief Operating Decision Maker (the Chief Executive Officer and the Executive Committee).
The group uses certain Non-GAAP performance measures and ratios in managing the business and may provide users of this financial
information with additional meaningful comparisons between current results and results in prior operating periods. The Non-GAAP financial
measures are used to adjust for fair value movements on the convertible bonds as well as the highly volatile marked-to-market movements
on unrealised non-hedge derivatives and other commodity contracts, which can only be measured with certainty on settlement of the contracts.
Non-GAAP financial measures should be viewed in addition to, and not as an alternative to, the reported operating results or any other
measure of performance prepared in accordance with IFRS. In addition, the presentation of these measures may not be comparable to
similarly titled measures that other companies use.
A Adjusted headline earnings (loss)
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Unaudited Unaudited
Headline earnings (loss) (note 9) 115 18 27 111
Gain (loss) on unrealised non-hedge derivatives and other commodity
contracts (9) (49) (10) (18)
Deferred tax on unrealised non-hedge derivatives and other
commodity contracts (note 8) 3 15 3 5
Fair value adjustment on issued bonds - (34) - (9)
Repurchase premium and cost on settlement of issued bonds (note 5) - 30 - 30
Provision for losses and impairments (reversals) in associates (8) 4 (11) 24
Adjusted headline earnings (loss) 101 (16) 9 143
Adjusted headline earnings (loss) per ordinary share (cents)(1) 24 (4) 2 35
(1) Calculated on the basic weighted average number of ordinary shares.
B Price received
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Unaudited Unaudited
Gold income (note 2) 2,324 2,125 4,356 4,085
Adjusted for non-controlling interests (50) (42) (103) (83)
2,274 2,083 4,253 4,002
Realised gain on other commodity contracts 12 10 23 19
Associates and joint ventures' share of gold income including realised
non-hedge derivatives 237 234 453 433
Attributable gold income including realised non-hedge derivatives 2,523 2,327 4,729 4,454
Attributable gold sold - oz (000) 1,977 1,827 3,761 3,567
Price received per unit - $/oz 1,277 1,274 1,258 1,249
Rounding of figures may result in computational discrepancies.
C All-in sustaining costs and All-in costs(1)
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Unaudited Unaudited
Cost of sales (note 3) 1,874 1,763 3,582 3,263
Amortisation of tangible and intangible assets (note 3) (431) (445) (823) (809)
Adjusted for decommissioning amortisation 1 5 4 9
Corporate administration and marketing related to current operations 29 31 63 59
Associates and joint ventures' share of costs 148 161 306 295
Inventory writedown to net realisable value and other stockpile - 12 3 13
Sustaining exploration and study costs 32 34 65 70
Total sustaining capex 429 421 829 695
All-in sustaining costs 2,082 1,982 4,029 3,595
Adjusted for non-controlling interests and non-gold producing
companies (30) (31) (64) (58)
All-in sustaining costs adjusted for non-controlling interests and
non-gold producing companies 2,052 1,951 3,965 3,537
Adjusted for stockpile write-offs - (17) (3) (18)
All-in sustaining costs adjusted for non-controlling interests,
non-gold producing companies and stockpile write-offs 2,052 1,934 3,962 3,519
All-in sustaining costs 2,082 1,982 4,029 3,595
Non-sustaining project capital expenditure 70 71 124 116
Technology improvements 4 8 10 14
Non-sustaining exploration and study costs 22 33 50 56
Care and maintenance (note 4) 34 33 62 70
Corporate and social responsibility costs not related to current
operations 12 31 24 40
All-in costs 2,224 2,158 4,299 3,891
Adjusted for non-controlling interests and non-gold producing (31) (30) (63) (53)
companies
All-in costs adjusted for non-controlling interests and non-gold
producing companies 2,193 2,128 4,236 3,838
Adjusted for stockpile write-offs - (17) (3) (18)
All-in costs adjusted for non-controlling interests, non-gold
producing companies and stockpile write-offs 2,193 2,111 4,233 3,820
Gold sold - oz (000) 1,977 1,827 3,761 3,567
All-in sustaining cost (excluding stockpile write-offs) per unit - $/oz 1,038 1,058 1,054 986
All-in cost per unit (excluding stockpile write-offs) - $/oz 1,109 1,155 1,126 1,071
D Total cash costs(1)
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Unaudited Unaudited
Total cash costs (note 3) 1,451 1,323 2,709 2,435
Adjusted for non-controlling interests, non-gold producing companies
and other (21) (23) (41) (41)
Associates and joint ventures' share of total cash costs 146 156 295 289
Total cash costs adjusted for non-controlling interests and non-
gold producing companies 1,576 1,456 2,963 2,683
Gold produced - oz (000) 2,002 1,867 3,744 3,606
Total cash cost per unit - $/oz 787 780 792 744
(1) Refer to the Supplementary report for Summary of Operations by Mine
Rounding of figures may result in computational discrepancies.
E Adjusted EBITDA(2)
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Unaudited Unaudited
Profit (loss) before taxation
90 157 (63) 269
Add back:
Finance costs and unwinding of obligations 86 83 169 180
Interest received (7) (11) (15) (22)
Amortisation of tangible and intangible assets 431 445 823 809
Adjustments:
Exchange (gain) loss 6 5 11 88
Fair value adjustment on issued bonds - (34) - (9)
Impairment and derecognition of assets (note 5) 182 2 297 3
Impairment of other investments (note 5) 2 - 3 -
Write-down of inventories (note 5) - 12 3 12
Retrenchment costs 14 10 90 14
Care and maintenance (note 4) 34 33 62 70
Net profit (loss) on disposal of assets (note 5) (7) (4) (8) (4)
(Gain) loss on unrealised non-hedge derivatives and other
commodity contracts (9) (49) (10) (18)
Repurchase premium and cost on settlement of issued bonds - 30 - 30
Associates and joint ventures' special items (2) 8 (2) (11)
Associates and joint ventures' - adjustments for amortisation,
interest, taxation and other 56 80 116 137
Other amortisation (4) - 7 -
Adjusted EBITDA (note F) 872 767 1,483 1,548
(2) EBITDA (as adjusted) and prepared in terms of the formula set out in the Revolving Credit Agreements.
F Interest cover
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Unaudited Unaudited
Adjusted EBITDA (note E) 872 767 1,483 1,548
Finance costs (note 6) 72 72 142 158
Interest cover - times 12 11 10 10
G Free cash flow
Six months Six months Year Year
ended ended ended ended
Dec Dec Dec Dec
2017 2016 2017 2016
US Dollar million Unaudited Unaudited Unaudited Unaudited
Net cash inflow (outflow) from operating activities 676 710 997 1,186
Net cash inflow (outflow) from investing activities (450) (425) (862) (702)
Finance costs (note 6) (72) (72) (142) (158)
Movements in restricted cash 8 (3) 8 (8)
Acquisitions, disposals and other - (40) - (40)
Free cash flow 162 170 1 278
Rounding of figures may result in computational discrepancies.
H Net asset value - cents per share
As at As at
Dec Dec
2017 2016
US Dollar million Unaudited Unaudited
Total equity 2,704 2,754
Number of ordinary shares in issue - million (note 11) 410 408
Net asset value - cents per share 659 675
Total equity 2,704 2,754
Intangible assets (138) (145)
2,566 2,609
Number of ordinary shares in issue - million (note 11) 410 408
Net tangible asset value - cents per share 626 639
I Net debt
As at As at
Dec Dec
2017 2016
US Dollar million Unaudited Unaudited
Borrowings - long-term portion 2,230 2,144
Borrowings - short-term portion 38 34
Total borrowings 2,268 2,178
Corporate office lease (15) (15)
Unamortised portion of the convertible and rated bonds 18 23
Cash restricted for use (65) (55)
Cash and cash equivalents (205) (215)
Net debt 2,001 1,916
Rounding of figures may result in computational discrepancies.
Administration and corporate information
ANGLOGOLD ASHANTI LIMITED
Registration No. 1944/017354/06 Directors Share Registrars
Incorporated in the Republic of South Africa Executive South Africa
S Venkatakrishnan*§ (Chief Executive Officer) Computershare Investor Services (Pty) Limited
Share codes: KC Ramon^ (Chief Financial Officer) Rosebank Towers, 15 Biermann Avenue,
ISIN: ZAE000043485 Rosebank, 2196
JSE: ANG Non-Executive (PO Box 61051, Marshalltown 2107)
NYSE: AU SM Pityana^ (Chairman) South Africa
ASX: AGG A Garner# Telephone: 0861 100 950 (in SA)
GhSE: (Shares) AGA R Gasant^ Fax: +27 11 688 5218
GhSE: (GhDS) AAD DL Hodgson^ Website : queries@computershare.co.za
NP January-Bardill^
JSE Sponsor: MJ Kirkwood* Australia
Deutsche Securities (SA) Proprietary Limited M Richter# Computershare Investor Services Pty Limited
SV Zilwa^ Level 11, 172 St George's Terrace
Auditors: Ernst & Young Inc. Perth, WA 6000
*British §Indian #American (GPO Box D182 Perth, WA 6840)
Offices ~Australian ^South African Australia
Registered and Corporate Telephone: +61 8 9323 2000
76 Rahima Moosa Street Telephone: 1300 55 2949 (Australia only)
Newtown 2001 Officers Fax: +61 8 9323 2033
(PO Box 62117, Marshalltown 2107) Executive Vice President – Legal, Commercial and Ghana
South Africa Governance and Company Secretary: NTHC Limited
Telephone: +27 11 637 6000 ME Sanz Perez Martco House
Fax: +27 11 637 6624 Off Kwame Nkrumah Avenue
Investor Relations Contacts PO Box K1A 9563 Airport
Australia Stewart Bailey Accra
Level 13, St Martins Tower Telephone: +27 11 637 6031
44 St George's Terrace Mobile: +27 81 032 2563 Ghana
Perth, WA 6000 E-mail: sbailey@anglogoldashanti.com Telephone: +233 302 235814/6
(PO Box Z5046, Perth WA 6831) Fax: +233 302 229975
Australia Fundisa Mgidi
Telephone: +61 8 9425 4602 Telephone: +27 11 637 6763 ADR Depositary
Fax: +61 8 9425 4662 Mobile: +27 82 821 5322 BNY Mellon (BoNY)
E-mail: fmgidi@anglogoldashanti.com BNY Shareowner Services
Ghana PO Box 30170
Gold House Sabrina Brockman College Station, TX 77842-3170
Patrice Lumumba Road Telephone: +1 646 880 4526 United States of America
(PO Box 2665) Mobile: +1 646 379 2555 Telephone: +1 866-244-4140 (Toll free in USA) or
Accra E-mail: sbrockman@anglogoldashantina.com +1 201 680 6825 (outside USA)
Ghana E-mail: shrrelations@cpushareownerservices.com
Telephone: +233 303 773400 General e-mail enquiries Website: www.mybnymdr.com
Fax: +233 303 778155 Investors@anglogoldashanti.com
Global BuyDIRECT(SM)
AngloGold Ashanti website BoNY maintains a direct share purchase and dividend
www.anglogoldashanti.com reinvestment plan for ANGLOGOLD ASHANTI.
Telephone: +1-888-BNY-ADRS
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. No material on the
AngloGold Ashanti website forms any part of, or is
incorporated by reference into, this document. References
herein to the company's website shall not be deemed to
cause such incorporation.
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: 20/02/2018 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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