TIDMAGD
Report to shareholders
for the quarter ended 31 March 2010
Group results for the quarter....
Gold production of 1.08Moz, ahead of guidance
Total cash costs of $619/oz, 6% better than guidance
Adjusted headline earnings of $61m recorded for the quarter
Cripple Creek & Victor improvement continues; Brasil Mineraçáo continues to
deliver strong cost performance
TauTona restarted successfully in January after shaft inspection and repair
Geita continues turnaround progress with strong production performance
Uranium production of 313,000lbs is above target with stock levels at 1Mlbs
Hedge book commitments further reduced by 350,000oz to 3.55Moz
Events post quarter-end...
Achieved investment-grade international credit ratings from S&P and Moody's
Further restructured the balance sheet with longer-term debt package
Issued $1bn rated bonds comprising $300m 30-year notes, $700m 10-year notes
Raised $1bn unsecured credit facility from a 16-bank syndicate
Quarter Year Quarter Year
Ended Ended Ended Ended Ended ended Ended Ended
Mar Dec Mar Dec Mar Dec Mar Dec
2010 2009 009 2009 2010 2009 2009 2009
SA rand / Metric US dollar / Imperial
Operating
review
Gold
Produced - kg / oz (000) 33,574 36,767 34,306 143,049 1,079 1,182 1,103 4,599
Price
received - R/kg / $/oz 244,873 247,985 273,103 201,805 1,015 1,029 858 751
Price
received
excluding
hedge
buy-back
costs - R/kg / $/oz 244,873 247,985 273,109 246,048 1,015 1,029 858 925
Total cash
costs - R/kg / $/oz 149,431 143,596 141,552 136,595 619 598 445 514
Total
production
costs - R/kg / $/oz 190,374 178,739 180,751 171,795 789 743 568 646
Financial
review
Adjusted
gross profit - Rm / $m 1,638 2,521 2,764 3,686 218 337 279 412
Adjusted
gross profit
excluding
hedge
buy-back
costs - Rm / $m 1,638 2,521 2,764 10,001 218 337 279 1,208
Profit
(loss)
attributable
to equity
shareholders - Rm / $m 1,150 3,179 1 (2,762) 157 424 - (320)
- cents/share 313 867 - (765) 43 116 - (89)
Adjusted
headline
earnings
(loss) - Rm / $m 463 1,706 1,482 (211) 61 228 150 (50)
- cents/share 126 466 414 (58) 17 62 42 (14)
Adjusted
headline
earnings
excluding
hedge
buy-back
costs - Rm / $m 463 1,706 1,482 5,795 61 228 150 708
- cents/share 126 466 414 1,604 17 62 42 196
Cash flow
from
operating
activities
excluding
hedge
buy-back
costs - Rm / $m 1,326 3,610 2,427 10,096 179 465 243 1,299
Capital
expenditure - Rm / $m 1,283 2,275 2,381 8,726 171 293 241 1,027
$ represents US dollar, unless Rounding of figures may result in
otherwise stated. computational discrepancies.
Operations at a glance
for the quarter ended 31 March 2010
Adjusted gross
Production Total cash costs profit (loss)
% % $m
oz (000) Variance 1 $/oz Variance 1 $m Variance 1
SOUTH AFRICA 384 (11) 626 10 51 (67)
Great Noligwa 29 (15) 946 (7) (8) -
Kopanang 70 (31) 585 46 11 (35)
Moab Khotsong 63 (14) 574 17 1 (12)
Tau Lekoa 27 (21) 904 23 2 (8)
Mponeng 115 (9) 440 11 45 (25)
Savuka 1 (50) 6,263 54 (11) (3)
TauTona 44 76 779 (46) (4) 21
Surface Operations 34 (6) 518 13 15 (4)
CONTINENTAL AFRICA 374 (11) 630 (6) 104 (19)
Ghana
Iduapriem 20 (63) 791 54 2 (24)
Obuasi 98 1 559 (1) 30 4
Guinea
Siguiri - Attributable 85% 73 (5) 567 (11) 25 (5)
Mali
Morila - Attributable 40% 2 25 (19) 619 (6) 11 (2)
Sadiola - Attributable 41% 2,3 30 (6) 569 (11) 15 3
Yatela - Attributable 40% 2 27 (4) 474 24 16 (1)
Namibia
Navachab 18 6 656 (10) 4 (1)
Tanzania
Geita 84 4 828 (22) 1 14
Non-controlling interests, exploration
and other - (7)
AUSTRALASIA 114 7 931 8 (3) (11)
Australia
Sunrise Dam 114 7 900 8 1 (10)
Exploration and other (4) (1)
AMERICAS 207 (8) 398 3 103 (17)
Argentina
Cerro Vanguardia - Attributable 92.50% 47 - 390 15 19 -
Brazil
AngloGold Ashanti Brasil Mineração 82 (15) 369 (12) 39 (7)
Serra Grande - Attributable 50% 20 (26) 453 34 8 (6)
United States of America
Cripple Creek & Victor 58 4 482 15 27 (1)
Non-controlling interests, exploration
and other 10 (3)
OTHER 5 (6)
Sub-total 1,079 (9) 619 4 260 (120)
Less equity accounted investments (42) 1
AngloGold Ashanti 218 (119)
1 Variance March 2010 quarter on December 2009 quarter - increase
(decrease).
2 Equity accounted joint ventures.
3 Effective 29 December 2009, AngloGold Ashanti increased its interest in
Sadiola from 38% to 41%.
Rounding of figures may result in computational discrepancies.
Financial and Operating Report
OVERVIEW FOR THE QUARTER
Production for the seasonally weak first quarter declined by 9% to 1.08Moz from
that of the previous quarter. This was, however, ahead of guidance of 1.07Moz.
Total cash costs, which includes a $25/oz charge for deferred stripping, rose
4% to $619/oz, resulting from lower production and inflationary increases.
Total cash costs were, however, better than guidance of $660/oz, due to higher
than anticipated inventory build-up, lower than expected release of deferred
stripping charges and other efficiencies.
SAFETY
AngloGold Ashanti's focus on safety continued at the start of the year, with
January's lost time injury frequency rate (LTIFR) of 4.96 injuries per million
hours worked, having been the best achieved in the company's history. The LTIFR
for the quarter of 7.02 was little changed from the same period in 2009 but
decreased by 7% from the previous quarter. The South African operations lost
18 shifts to safety-related stoppages.
Tragically, three miners were fatally injured during the quarter in separate
incidents at Siguiri, Kopanang and Moab Khotsong. Both South African mines had
each achieved 1 million fatality free shifts earlier in the quarter,
underscoring the significant successes in reducing injury from falls of ground
at these deep mines. AngloGold Ashanti's management team analysed the causes of
these recent fatalities and is working to put in place measures to prevent any
reoccurrence. The Safety Transformation Blueprint, an overarching strategy to
help eliminate all workplace injuries, remains on track for implementation in
the first half of this year and will assist in realising the next quantum
improvement in the overall safety performance.
Sadiola achieved the important milestone of 5 million shifts over a year
without a lost time injury, while Cerro Vanguardia went without a lost time
injury for 1 million hours worked.
OPERATING REVIEW
The South African operations produced 384,000oz in the first quarter of 2010,
at a total cash cost of $626/oz, compared with 431,000oz at $569/oz in the
previous quarter. The traditionally slow start to the year, following the
annual December break contributed to the decline, as did safety stoppages at
Kopanang and lower grades reported at Moab Khotsong, Great Noligwa, Kopanang
and Mponeng. TauTona was successfully restarted and contributed 44,000oz after
the inspection and rehabilitation of the shaft barrel at the end of last year.
The rehabilitation work being carried out at Savuka, to repair damage to the
underground infrastructure caused a year ago by a seismic event, continues and
is expected to be completed by September 2010.
Continental Africa's production decreased to 374,000oz in the first quarter at
a total cash cost of $630/oz, from 418,000oz at $668/oz the previous quarter.
Iduapriem was the chief contributor to the decline, producing only 20,000oz
after the operation was suspended for 10 weeks to increase the overall tailings
storage capacity. While output at Obuasi was marginally higher for the quarter,
production will be impacted by around 20,000oz to 25,000oz in the second
quarter as gold processing is curtailed pending the implementation of a revised
water management strategy. Geita continued its turnaround, with the anticipated
higher grades from the Nyankanga pit helping to boost production and lower unit
costs.
Australia's production rose to 114,000oz at a total cash cost of A$1,030/oz
($931/oz), from 107,000oz at A$949/oz ($863/oz) in the prior quarter. Total
cash costs were inflated by deferred waste-stripping charges during the quarter
of some A$357/oz ($322/oz).
The Americas production fell to 207,000oz at a total cash cost of $398/oz
during the first quarter, from 226,000oz at $385/oz in the previous quarter.
The decline came from a planned reduction in grade from Serra Grande and
anticipated lower tonnages from AngloGold Brasil Mineraçáo, which despite this
remained the lowest cost producer in the group at $369/oz. Argentina further
consolidated its recovery of the past 18 months with steady production of
47,000oz, while Cripple Creek & Victor continued its recovery from leach pad
issues that hampered its performance last year, with a 4% increase in
production over the quarter to 58,000oz.
FINANCIAL AND CORPORATE REVIEW
Adjusted headline earnings (excluding accelerated hedge buy-back costs) for the
quarter declined to $61m, from $228m in the prior quarter, due largely to: the
decreased production in a seasonally weak quarter, particularly when compared
with the traditionally strong fourth quarter; the non-recurrence of a $65m
foreign exchange gain; higher charges for amortisation and rehabilitation; and
higher tax charges due to non-recurring credits and certain tax-free gains
recorded in the previous quarter.
Profit attributable to equity shareholders (including fair value movements on
the bond and the hedge book) was $157m for the quarter, compared with $424m
during the prior period when historical asset impairments at Geita, Obuasi and
Iduapriem were reversed. This was partly negated by the net gain on the
unrealised non-hedge derivatives.
The average realised gold price for the quarter was $1,015/oz, representing an
8.6% discount to the average spot price of $1,110/oz. Delivery into hedge
contracts continued with the removal of a further 350,000oz from the book
during the first quarter, leaving total commitments of 3.55Moz at 31 March
2010. The hedge book is expected to reduce by a further 280,000oz by the end of
the year, resulting in an average discount to spot gold prices of between 8%
and 10%, in line with previous guidance. This assumes a gold price range of
$950/oz to $1,250/oz and annual production of between 4.5Moz to 4.7Moz.
Subsequent to the quarter-end, AngloGold Ashanti successfully concluded two
legs of a financing package totalling $2bn, to fulfil the company's commitment
to refinance its debt facilities that were due to mature in the near term and
to extend the overall tenor of its debt. The first leg comprised a four-year,
unsecured revolving credit facility with a syndicate of 16 banks at an interest
rate of 175 basis points above the London Interbank Offered Rate. After
receiving investment grade ratings from Moody's Investors Service and Standard
& Poor, AngloGold Ashanti completed a $1bn bond issue in April. The issue,
which was more than six times oversubscribed, comprised: $700m of 10-year notes
carrying a coupon of 5.375%, at a premium of 165 basis points above United
States treasury bills of equivalent maturity; and $300m of 30-year notes with a
coupon of 6.5%, or 200 basis points above the relevant treasury bills. This
outcome is to be welcomed in that it removes refinancing risk and serves to
match AngloGold Ashanti's debt to the long-life nature of its portfolio.
The proceeds from the bond will be used to extinguish and cancel: the $500m
term facility from Standard Chartered, of which half was drawn at the
quarter-end; and the $1.15bn revolving credit facility which matures in
December 2010, of which $710m was drawn at the end of the first quarter. The
cancellation of these debt facilities will result in a once off $8m charge
(accelerated amortisation of fees) to the income statement in the second
quarter.
EXPLORATION
Total exploration expenditure during the first quarter, inclusive of
expenditure at equity accounted joint ventures, was $48m ($17m on brownfields
exploration, $17m on greenfields exploration and $14m on pre-feasibility
studies), compared with $71m ($29m on brownfields, $25m on greenfields and $17m
on pre-feasibility studies) in the previous quarter. A total of 39,280m was
drilled during the quarter at existing priority targets so as to delineate new
targets across the company's property holdings. Work on the feasibility study
for the Tropicana project continued according to schedule, while further
drilling on the nearby Boston Shaker showed potential for an additional
open-pit and Havana Deeps showed underground mining potential. Additional
expenditure of A$9m was approved to accelerate drilling on both deposits,
increasing the Tropicana JV exploration budget for 2010 to A$25m.
In Colombia, where final permissions are awaited for the resumption of drilling
at the La Colosa project, exploration was undertaken on two other prospects.
Elsewhere in the Americas, where AngloGold Ashanti has 50,000km2 of exploration
tenements in the most prospective gold territories and new frontiers,
exploration efforts were focused on new targets which were identified in
Brazil, Argentina and Canada.
A 50,000m drilling campaign, expected to commence during the June quarter, is
planned for AngloGold Ashanti's landholdings in the Democratic Republic of the
Congo following the successful conclusion of negotiations with the state-owned
gold company. A pre-feasibility study is currently underway at the Mongbwalu
concession and is expected to be completed within a year.
OUTLOOK
AngloGold Ashanti's production and total cash cost guidance for the full year
2010 are both unchanged at 4.5Moz to 4.7Moz at a total cash cost of $590/oz to
$615/oz. This assumes an average exchange rate of R7.70/$ and an oil price of
$75/barrel.
Our press release dated 30 March 2010 flagged that second quarter production
from Ghana will be 20,000 to 25,000 ounces lower, for reasons stated
previously. In addition, Sunrise Dam will have a planned drop in quarterly
production in the second quarter, but remains on track for the full year's
target. We are therefore guiding second quarter's production at similar levels
recorded in the first quarter, i.e. 1.079Moz at a total cash cost of $650/oz at
a rand exchange rate of R7.40/$ for the quarter.
Notes:
All references to price received include realised non-hedge derivatives.
All references to adjusted gross profit (loss) refers to gross profit (loss)
adjusted for unrealised non-hedge derivatives and other commodity contracts.
In the case of joint venture and operations with non-controlling interests, all
production and financial results are attributable to AngloGold Ashanti.
Rounding of figures may result in computational discrepancies.
Review of the Gold Market
1. Gold price movement and investment markets
Gold price data
Gold traded in a relatively tight range of $90/oz during the first quarter of
the year, compared with $218/oz the previous quarter. The price averaged 1%
higher during the period at $1,110/oz. The price held convincingly above $1,000
/oz, reflecting broad investor satisfaction despite lingering uncertainty on
the prognosis for the global economy and financial markets.
The inverse correlation of the gold price and the US dollar remained largely
intact and late January saw a stronger dollar exert downward pressure on the
gold price. The dollar rallied in response to increased reserve requirements
announced by the Chinese, followed by the Reserve Bank of India. Both
highlighted the fragility of any global recovery.
Growing doubt over sovereign stability, most notably that of Greece, and the
ability of certain countries to fund or refinance significant debt obligations
approaching maturity, added impetus to the dollar's gains. Greece is not alone.
Other European nations holding large tranches of maturing debt are also likely
to face refinancing headwinds, placing further strain on the euro and ensured a
stronger dollar than might have been expected.
Nevertheless, the gold price has remained steady, trading comfortably above
$1,000/oz. The picture is decidedly more bullish in Europe, where the continued
economic turmoil has pushed bullion to historic highs in euro terms. This
further reflects the metal's true performance as a financial asset.
Gold touched a record EUR834/oz during the quarter, 3% higher than its previous
high of EUR812/oz on 3 December 2009. The price has continued to climb since the
end of the quarter, reaching EUR900/oz on 3 May 2010.
Combined holdings of the nine major gold exchange traded funds were little
changed, despite the stronger dollar, ending the quarter 1Moz lower at 55.3Moz.
Speculative activity on COMEX division of the New York Mercantile Exchange was
more pronounced, with the net long position rising 36% from its trough during
the quarter to a peak of 30.4Moz.
Official sector
Official sector selling was once again conspicuous by its absence. There were
no sales recorded during the quarter despite the IMF's stated intention to sell
191 tonnes of gold on the open market. No central bank purchases were
announced in the first quarter.
Producer de-hedging
No significant activity was reported.
Currencies
The US dollar remained relatively weak against most other currencies,
notwithstanding its strength relative to the euro.
The rand again outperformed most emerging market currencies in the quarter
ended 31 March. The Australian dollar remained resolute, averaging A$/$0.9045
during the quarter and trading in a narrow range of A$/$0.8640 to A$/$0.9320.
The strength of the Australian dollar was aided by the hawkish stance of the
Reserve Bank of Australia, a standout amongst central banks after hiking rates
a further 25 basis points against a global backdrop of low interest rates in
many other countries.
The Brazilian real, which for many quarters stood out among the best performing
emerging market currencies, failed to extend its strengthening trend. During
the quarter under review it averaged $/BRL 1.80 which is 3% weaker than its
average of the previous quarter, closing at $/BRL 1.78 at the end of March.
Silver
Silver prices continued to display a close correlation to gold prices. The
silver price averaged $16.93/oz for the quarter, from $17.53/oz the previous
quarter. The silver ETF remained static quarter on quarter at 396Moz.
2. Physical demand
2.1. Jewellery sales
The world's largest gold markets of India and China performed well, while there
was encouraging jewellery consumption data from the Middle East for the first
time since the onset of the global financial crisis. Relative gold price
stability aided recovery in all markets. India, the world's largest gold
consumer, enjoyed a vastly improved first quarter amid upbeat sentiment stoked
by signs of accelerating economic growth and a stronger rupee. Gold imports
topped 144 tonnes, the highest first quarter tally in the past five years. Many
retailers are restocking and also increasing the share of gold jewellery
relative to diamond jewellery in their inventories to boost turnover over
profit margins. It is anticipated that the first quarter's gains will be
consolidated in the second quarter, with key buying opportunities presented by
the Hindu New Year festivals, including the highly auspicious day of Akshaya
Tritiya, as well as the upcoming wedding season.
China's first quarter sales are traditionally marked by strong demand amid
Chinese New Year and Valentines Day celebrations. While many retailers reported
good trade given that the two events fell on the same day this year, demand
would have been stronger had the two not been combined. Interestingly, Women's
Day on 8 March registered strong sales for the first time as women marked the
day by buying jewellery, a positive indicator for the Chinese jewellery market.
Some Chinese manufacturers reported the first quarter as their strongest of the
past decade. January and February orders were predictably high while a
surprisingly robust March indicates retailer confidence in the coming months.
While the US market continued its struggle, some positive data from the fourth
quarter continued into the new year. Sterling Jewellers, the countries largest
retailer, reported an 8% increase in sales for the full year through January.
There were signs of retailers cautiously adding to inventories as year-on-year
sales showed a modest increase. High-end retailers, including Tiffany, Sacks of
Fifth Avenue and Neiman Marcus, reported strong sales. A continuation of that
trend would confirm the popular contention that the high-end market would be
first to recover from the slump. The luxury sector showed a similar rebound, as
post-holiday discounting bolstered first quarter sales.
The Middle East showed signs of recovery. In the United Arab Emirates an
increase in tourists visiting before and after the Dubai Shopping Festival
helped boost gold sales. Residents also showed signs of adjusting to a $1,090/
oz gold price level, which further supported sales boosted by growing consumer
confidence. Total jewellery sales increased by as much as 20% year on year.
Turkish jewellery exports leapt 52% to 10.4 tonnes, while local jewellery sales
rose 33% from a year earlier. In the Kingdom of Saudi Arabia, the relative
stability of gold prices in the first quarter, along with, increased government
stimulus and occasions like Spring Holiday, Valentine's Day and Mothers' Day,
all aided a 12% to 15% increase in jewellery sales.
2.2. Investment market
Last year's positive trend in bar and coin sales in India continued in the
first quarter. The Indian ETF showed low levels of redemptions, while the
launch of three new funds was announced. Changes to income tax regulations put
more money in the hands of consumers, further boosting the local gold market.
Recent advertising campaigns sponsored by commercial banks, extolling gold as a
'real' asset that can be used as collateral, are also now gaining traction.
Scrap activity declined significantly.
In the US, bar and coin sales remained steady. January saw some investors
selling gold to rebalance portfolios, but gold ETF sales were strong since
February. ETF demand in the first quarter dropped sharply from the same period
in 2009, when investors sought safe haven during the darkest days of the
financial crisis. The launch of Sprott Asset Management's physical gold
delivery ETF, saw ten tons of gold absorbed in just four days. In another
significant transaction, China Investment Corp bought 1.5 million units of the
SPDR Gold Trust, the world's largest ETF. The fact that CIC chose not to buy
physical gold from Chinese sources highlights one of the primary benefits of
investing in ETFs: they are easier to value, book and transact.
First quarter demand for China Gold Investment Bars was more than double that
in the first quarter of last year. In fact, demand for gold bars in China
during January and February was so strong that the Shanghai Gold Exchange
imported 70t of bullion. Such positive data reflects a growing fear of rising
inflation and investors diversifying away from property.
Middle Eastern investment saw some improvement in the first quarter, although
it is more muted than gains in the jewellery sector. However it should be
remembered that in terms of sales, the Middle Eastern jewellery market is far
more significant than the investment market. In the UAE, demand for coins and
bars rose by more than 15%, as Asian residents adjusted to a gold price around
$1,090/oz. The Turkish market for physical gold investment showed modest gains
and increased both year on year and quarter on quarter. Despite stronger
jewellery manufacture, bullion imports were virtually non-existent as Turkish
manufacturers were served by an increased supply of scrap. In Saudi Arabia the
level of investment demand was flat.
Hedge position
As at 31 March 2010, the net delta hedge position was 3.35Moz or 104t (at
31 December 2009: 3.49Moz or 108t), representing a further reduction of 0.14Moz
for the quarter. The total commitments of the hedge book as at 31 March 2010
was 3.55Moz or 110t, a reduction of 0.35Moz from the position as at 31 December
2009.
The marked-to-market value of all hedge transactions making up the hedge
positions was a negative $2.07bn (negative R15.09bn), decreasing by $0.11bn
(R1.09bn) over the quarter. This value was based on a gold price of $1,112.50/
oz, exchange rates of R7.30/$ and A$/$0.9162 and the prevailing market interest
rates and volatilities at that date.
As at 5 May 2010, the marked-to-market value of the hedge book was a negative
$2.18bn (negative R16.47bn), based on a gold price of $1,169.20/oz and exchange
rates of R7.55/$ and A$/$0.9073 and the prevailing market interest rates and
volatilities at the time.
These marked-to-market valuations are in no way predictive of the future value
of the hedge position, nor of future impact on the revenue of the company. The
valuation represents the theoretical cost of buying all hedge contracts at the
time of valuation, at market prices and rates available at the time.
The following table indicates the group's commodity hedge position at 31 March
2010
Year 2010 2011 2012 2013 2014 2015 Total
US DOLLAR
/GOLD
Forward Amount * 60,000 122,500 119,500 91,500 *(95,427)
contracts (oz) (488,927)
US$/oz *$985 $227 $418 $477 $510 *$ 3,281
Put Amount 181,895 148,000 85,500 60,500 60,500 536,395
options (oz)
sold
US$/oz $772 $623 $538 $440 $450 $620
Call Amount 770,360 776,800 811,420 574,120 680,470 29,000 3,642,170
options (oz)
sold
US$/oz $607 $554 $635 $601 $604 $670 $601
RAND/GOLD
Forward Amount *(30,000) *(30,000)
contracts (oz)
ZAR/oz *R7,181 *R7,181
Put Amount 30,000 30,000
options (oz)
sold
ZAR/oz R7,500 R7,500
Call Amount 30,000 30,000
options (oz)
sold
ZAR/oz R8,267 R8,267
A DOLLAR/
GOLD
Forward Amount 100,000 100,000
contracts (oz)
A$/oz A$643 A$643
Call Amount 100,000 100,000
options (oz)
purchased
A$/oz A$712 A$712
** Total Delta
net gold: (oz) (250,090) (808,775) (880,206) (660,682) (726,215) (26,463) (3,352,431)
Committed (29,000)
(oz) (281,433) (836,800) (933,920) (693,620) (771,970) (3,546,743)
* Represents a net long gold position and net short US Dollars/Rands
position resulting from both forward sales and purchases for the period.
** The Delta of the hedge position indicated above is the equivalent gold
position that would have the same marked-to-market sensitivity for a small
change in the gold price. This is calculated using the Black-Scholes options
formula with the ruling market prices, interest rates and volatilities as at 31
March 2010.
Fair value of derivative analysis by accounting designation at 31 March 2010
Non-hedge
Figures in millions accounted
Total
US Dollar
Commodity option contracts (1,829)
Forward sale commodity contracts (237)
Interest rate swaps (13)
Total hedging contracts (2,079)
Embedded derivatives (1)
Warrants on shares 3
Option component of convertible bond (127)
Total derivatives (2,204)
Credit risk adjustment (120)
Total derivatives - before credit risk adjustment (2,324)
Rounding of figures may result in computational discrepancies.
Exploration
BROWNFIELDS EXPLORATION
In South Africa, surface drilling continued in the Project Zaaiplaats area.
MMB5 deflection 7 advanced to a depth of 2,797m. MZA9 continued drilling
deflection 23 and advanced 267m over the quarter. The Vaal reef intersection is
expected in June 2010. The long deflection from MGR6 continued drilling and the
hole is currently at a depth of 2,742m. The Vaal Reef is expected to be
intersected in September 2010 after minor delays were caused by a jammed core
barrel. MGR8 progressed to 40m above the reef (3,139m) when the rods broke. A
wedge was then set at 3,010m so as to bypass the stuck rods. A reef
intersection is anticipated in June 2010.
In the Western Ultra Deep Levels area, UD51 advanced from a depth of 2,796m to
a depth of 3,064m with a Ventersdorp Contact Reef intersection expected in
September 2010.
At Obuasi in Ghana, 1,374m of drilling was completed above 50 level. Drilling
is scheduled to re-start on 50 level, with one hole starting in May and two in
June as the sites are re-equipped.
In Argentina, positive results have been obtained from in-fill drilling on the
known veins. In regional exploration, detailed mapping on four targets defined
by radial and circular magnetic signatures at El Volcán is continuing.
In Australia, at Sunrise Dam, drilling continued to infill and extend both
surface and underground lodes. Underground targets included GQ, Cosmo, Dolly
and extensions to all these bodies. Surface targets included the paleochannel,
Golden Delicious and Sunrise North including Neville. Drilling has continued at
Wilga with a series of water bores being drilled.
In Brazil, surface and underground drilling for oxide and sulphide ore at
Córrego do Sítio, remains the primary focus. The Fe-Quad step change
exploration project commenced with exploration starting at the Pari prospect.
At MSG, the down-dip extension of the Pequizão ore body is being targeted.
Potential extensions of the Cajueiro are being targeted by a new drilling
programme following structural reinterpretation. Final reports on exploration
for MSG in accordance to the Brazilian Mining regulations have been completed
and six new applications for exploration are being considered by the
authorities. Regional exploration work continued on the Votorantim Metais
areas.
In Colombia, at the La Colosa project, some restrictions on exploration
activities have been lifted by the authorities. However, some water permits
crucial for the resumption of exploration drilling remain suspended due to
drought and consequent water restrictions. The most likely scenario is for
drilling to resume late in the third quarter. Meanwhile, geophysical work
(induction potential) is continuing and results to date encourage the view that
it can be used to develop drill target extensions to the altered early diorite
which is the primary host of the gold mineralisation. The development of a
'geometallurgical model', to define local variability in gold recovery and
other important metallurgical treatment characteristics is progressing and will
be invaluable for planning future exploitation.
At Kibali in the Democratic Republic of the Congo, Mineral Resource drilling of
the KCD deposit continued and targeted the defining of the open pit/underground
interface and the pit shell itself. A total of 19 holes (8,183m) were
drilled. Drilling of the KCD Sessenge gap and the KCD infill programme
commenced with 400m and 1,481m being drilled respectively. In the case of the
KCD infill drilling all boreholes confirmed the existing wireframe model.
A review and reinterpretation of the ore zones on the project was undertaken
during the quarter - this involved the re-logging of some 163 boreholes taking
into consideration alteration, mineralisation and structural criteria.
Surface mapping has been completed on four oxide ore potential targets with the
result that a 5,000m RC programme has been proposed for the Memekazi - Renzi
project area. Soil sampling started at Block 1 in January with 747 samples
taken. To date three anomalies have been identified in this block.
For Mongbwalu, a definitive agreement was signed with joint venture partner
OKIMO on 20 March 2010. Within one year a feasibility study (as defined in the
joint venture agreement) must be completed and submitted. In support of this
feasibility study operations continued throughout the quarter aimed at
metallurgical and geotechnical test work as well as infill Mineral Resource
drilling.
A total of 15 core holes (2,563m) were completed, nine for geotechnical test
work and the remainder for Mineral Resource definition.
At Siguiri in Guinea, a total of 22,173m of RC drilling was completed within
the Combined Pits project area. The aim being to upgrade oxide Mineral
Resources in Bidini South and Kalamagna South areas, around the Tubani
Extension pit and between Bidini and Sanu-Tinti pits. Drilling around Kosise
West and Kosise South East prospects was also completed with the aim of
generating new Mineral Resource ounces.
Geological and geotechnical diamond drilling (229.6m) in the Tubani Extension
project was carried out early in the quarter. Further drilling below Sanu
Tinti, Sintroko and Soloni Pits brought the total of diamond drilling to
1,368m.
Reconnaissance and delineation drilling continued on a ground gravity and
surface geochemical target north west of the Seguélén pit, and to the south
west of the planned Sokunu pit with a total of 5,932m AC drilling.
Geochemical soil sampling for the first quarter covered two main areas, being
the exploration license to the west of the TSF and the north eastern area of
Block 1. Data interpretation is currently ongoing to define the targets that
require follow up.
Ground geophysics IP grids were completed over a portion of Sintroko South and
the Tubani Extension areas for orientation purposes, and over the Sokunu-Kosise
gap for targeting purposes. The equipment has subsequently moved to the Saraya
deposit in Block 2.
At Geita in Tanzania, exploration work focused on processing data collected
from the Nyankanga Cut 7 infill drilling programme. A total of 14,000m new
core was logged and together with the re-logging of 49,700m of historic core
(which confirmed the previous interpretations), was incorporated into the
updated Nyankanga geological model.
Some 10,000 new density readings were collected across the ore body. The
average densities of the lithologies were confirmed but showed greater
variability.
An IP survey over the Area 3 test area has been completed and the data is
currently being processed. Target consolidation of the first 20 regional
exploration targets commenced in February with the collation of Prospect 5
data. The plan is to review all 20 targets by the end of 2010 with the aim of
implementing follow up drilling plans for the five highest potential targets.
Geological mapping on the extension area to Star and Comet commenced in March
to assist with delineating an area for IP survey in June quarter 2010 and
compiling revised geological models.
In Mali, drilling continued at Yatela with the aim of extending the life of the
Yatela and Alamoutala pits. Significant drill intersections were drilled at the
KW-18 pit area. At Yatela North, the most northern drilling, located at the
base of the Tamboura escarpment, shows mineralisation is open northwards.
The Sadiola Deeps Infill drilling is progressing well and remains on schedule.
A review of the geological models of the Tambali and FN2 areas (north and south
of the Sadiola open pit) has been undertaken and new wireframes are being
created accordingly. It is expected that this will lead to an increase in
Mineral Resource.
A detailed ground gravity survey is underway in the south of the Sadiola lease
area over a significant gravity low anomaly identified to the south of Sekekoto
SE prospect.
At Navachab in Namibia, 86 holes, totaling 11,255m, were drilled. Off-mine
drilling focused on the LS/LM contact mineralisation at Anomaly 16 Valley
target area with 27 RC holes (3,507m) and 5 diamond holes being drilled
(669m). This drilling is probing the down plunge extension of the higher grade
portion of mineralisation at the Valley target.
On-mine exploration drilling focused on the down plunge extension of the NP2 FW
veins as well as the main pit FW vein down plunge extension with 12 diamond
holes (3,270m) being completed on the NP2 vein set and 2 diamond holes (755m)
being completed for the main pit FW vein set. 40 RC holes totaling 3,054m were
drilled on the proposed HME waste dump extension to test the area for
mineralisation.
At Cripple Creek & Victor in the United States, drilling and studies continue
to quantify the potential of the high grade Mineral Resource. Metallurgical
testing of a high grade composite sample is underway as is an interim Mineral
Resource model. Mineral resource delineation drilling commenced in the North
Cresson area.
GREENFIELD EXPLORATION
Greenfield exploration activities were undertaken in Australia, the Americas,
China, Southeast Asia, Sub-Saharan Africa and the Middle East & North Africa. A
total of 39,280m of diamond, RC and AC drilling was completed at existing
priority targets and used to delineate new targets in Australia and Colombia.
In Australia, on the Tropicana JV, (AngloGold Ashanti 70%, Independence Group
30%) AngloGold Ashanti is currently undertaking a feasibility study and seeking
environmental approvals required for open pit mining. Exploration is continuing
throughout the tenement package and prioritised on targets close to the
proposed gold operation.
The feasibility study is advancing with pit designs complete and mine
scheduling in progress. The plant flow sheet and layout has been finalised. The
design of infrastructure including administration and plant facilities
buildings, tailings storage, access roads, village, water supply, and airstrip
are nearing completion. The estimation of feasibility level capital and
operating costs is in progress. The company will also consider the potential
impact of the Resource Super Profits Tax being proposed by the Government of
Australia effective 1 July 2012.
The Tropicana JV has responded to public submissions received during the eight
week public review period for the Tropicana Gold project environmental impact
assessment. The Environmental Protection Authority (EPA) is currently
considering the project. It is anticipated the EPA will provide a
recommendation on the project approval and approval conditions to the Western
Australia Minister for the Environment. The approval and conditions are subject
to potential public appeals.
During the quarter the Tropicana JV partners approved additional expenditure of
A$8.7m to accelerate drilling of the Havana Deeps and Boston Shaker Zones,
increasing the 2010 Tropicana JV exploration budget to A$25m.
At Boston Shaker, mineralisation has been intersected over an approximate 600m
strike length and is located approximately 500m northeast of the Tropicana pit.
Exploration is targeting Boston Shaker as a possible additional open pit mining
area with further RC and diamond drilling being carried out to determine the
northern and down-dip extents of the mineralisation.
Drilling at Havana Deeps identified the down-dip extensions of the
mineralisation, which may have potential for underground mining. Gold
intersections include 35m @ 5.03 g/t Au from 514m (including 22m @ 6.41 g/t Au
from 527m) and 23m @ 3.39 g/t Au from 327m (including 21m @ 3.64 g/t Au from
349m).
At Tumbleweed, 10km north of Tropicana-Havana, aircore drilling returned gold
results including 12m @ 0.72 g/t Au from 28m. Follow-up reverse circulation and
diamond drilling will be completed in the June quarter.
The approximately 11,400km2 Viking project, including 6,500km2 of granted
exploration licences, is southwest of the Tropicana JV within the Albany-Fraser
foreland tectonic setting that hosts the Tropicana deposit. Here surface
geochemical sampling continued throughout the quarter.
Greenfields exploration in the Americas in the first quarter focused on early
stage exploration in Colombia, Canada, Brazil, Argentina and the USA. Two
projects were drilled in Colombia, both of which will see continued evaluation
throughout 2010. Several new targets were identified in Colombia, Brazil,
Argentina and Canada as a result of AngloGold Ashanti's 100% greenfields
exploration programmes as well as those with JV partners. AngloGold Ashanti
currently has exploration tenements that cover more than 50,000km2 in some of
the most prospective belts and new frontiers in the Americas.
In China, at the Jinchanggou project, transfer of the remaining exploration
licences into the JV is underway. Following completion of this structural
targets identified from trenching will be drill tested. The three new
applications in the Junggar Belt of northeast China are still pending final
approval. Military clearance has been obtained from Provincial level, but due
to procedural changes has been passed to Beijing for final clearance. We expect
the licences to be granted in June quarter.
In the Solomon Islands, exploration activities continued at two JV's with XDM
Resources. Exploration activities included airborne electro-magnetic
geophysical surveys, trenching, geological mapping and geochemical sampling.
Spectral and petrographic studies, with remodelling of existing geophysical
data, were also completed to improve understanding of the project areas.
Drilling equipment was being mobilised to high-priority drill targets
identified and prioritised during the first quarter work.
In Sub-Saharan Africa, project generation work is ongoing with the development
of new conceptual targets to guide longer term strategies. A number of specific
exploration opportunities are currently under negotiation.
In the Democratic Republic of the Congo, the protracted mining contract
renegotiation over the former Concession 40 area was concluded in March. The
areal extent of Exploitation Licences currently held by OKIMO is 7,443km2 and
approximately 5,900km2 is to be transferred to the joint venture company,
Ashanti Goldfields Kilo (AGK), of which 86.22% of the share capital is held by
AngloGold Ashanti and the remaining 13.78% by OKIMO, a state-owned gold
company. The Mongbwalu project is now the subject of a Pre-feasibility Study
(PFS), which is to be completed within 12 months as per the agreement.
Geotechnical and metallurgical drill-testing has been completed for the PFS and
a 50,000m combined diamond and reverse circulation drilling programme is
scheduled to commence during the second quarter. Regional greenfields
exploration on the remaining licence area will focus primarily on regional soil
sampling, reconnaissance mapping and drill-testing of key targets.
In Gabon, encouraging results came from work on licences held by Dome Ventures
that are the subject of an earn-in. Drilling on these licences is planned for
the third quarter. Data from a recently released regional geophysical survey
that was flown in 2009 as part of the Sysmin project is currently being
acquired by AngloGold Ashanti. This will enable detailed interpretation and aid
in target generation work over AngloGold Ashanti's 8,000km2 prospecting
licence, as well as the exploration licences that were acquired from Swala.
In the Middle East & North Africa, the strategic alliance between AngloGold
Ashanti and Thani Investments has identified several promising projects in the
Arabian Nubian Shield.
In Russia, the Sale and Purchase Agreement for the disposal of the Zoloto Taigi
JV property of Veduga to Alfa Gold, was concluded this quarter and Federal
Antimonopoly Service approval was received. Completion is expected in the
second quarter.
ANGLOGOLD ASHANTI/DE BEERS JOINT VENTURE
During the quarter the Launch and Recovery system was commissioned and
integrated with the sonic drill rig. In March, drilling activities started off
the west coast of South Island, New Zealand. A total of 249m were drilled
during the quarter. The first assay results are expected early in the third
quarter.
Group
operating
results
Quarter ended Year Year
ended ended
Mar Dec Mar Dec Mar Dec Mar Dec
2010 2009 2009 2009 2010 2009 2009 2009
Unaudited Unaudited
Rand / Metric Dollar /
Imperial
OPERATING RESULTS
UNDERGROUND
OPERATIONS
Milled - 000 / - 000 tons 2,801 2,910 3,032 11,944 3,087 3,207 3,343 13,166
tonnes
Yield - g/t / - oz/t 6.22 6.68 6.22 6.41 0.181 0.195 0.181 0.187
Gold - kg / - oz (000) 17,414 19,435 18,857 76,532 560 625 606 2,461
produced
SURFACE AND DUMP
RECLAMATION
Treated - 000 / - 000 tons 2,692 3,068 3,264 12,779 2,967 3,382 3,598 14,086
tonnes
Yield - g/t / - oz/t 0.47 0.48 0.56 0.51 0.014 0.014 0.016 0.015
Gold - kg / - oz (000) 1,276 1,476 1,824 6,481 41 47 59 208
produced
OPEN-PIT
OPERATIONS
Mined - 000 / - 000 tons 39,861 40,346 45,352 167,000 43,939 44,474 49,992 184,086
tonnes
Treated - 000 / - 000 tons 5,919 6,645 5,737 25,582 6,525 7,325 6,324 28,199
tonnes
Stripping - t (mined total - 4.93 4.71 5.44 5.58 4.93 4.71 5.44 5.58
ratio mined ore) / t mined
ore
Yield - g/t / - oz/t 2.05 1.98 1.99 1.96 0.060 0.058 0.058 0.057
Gold in ore - kg / - oz (000) 7,131 10,348 7,750 34,934 229 333 249 1,123
Gold - kg / - oz (000) 12,161 13,128 11,406 50,041 391 422 367 1,609
produced
HEAP LEACH
OPERATIONS
Mined - 000 / - 000 tons 16,565 14,480 13,882 57,456 18,260 15,961 15,302 63,334
tonnes
Placed 1 - 000 / - 000 tons 5,457 4,678 5,605 19,887 6,015 5,156 6,179 21,922
tonnes
Stripping - t (mined total - 2.08 2.23 1.51 1.94 2.08 2.23 1.51 1.94
ratio mined ore) / t mined
ore
Yield 2 - g/t / - oz/t 0.56 0.72 0.57 0.65 0.016 0.021 0.017 0.019
Gold placed - kg / - oz (000) 3,068 3,380 3,220 12,958 99 109 104 417
3
Gold - kg / - oz (000) 2,723 2,728 2,219 9,995 87 88 71 321
produced
TOTAL
Gold - kg / - oz (000) 33,574 36,767 34,306 143,049 1,079 1,182 1,103 4,599
produced
Gold sold - kg / - oz (000) 32,999 37,359 32,584 142,837 1,061 1,201 1,048 4,592
Price - R/kg / -$/oz sold 244,873 247,985 273,109 201,805 1,015 1,029 858 751
received
Price - R/kg / -$/oz sold 244,873 247,985 273,109 246,048 1,015 1,029 858 925
received
excluding hedge
buy-back
costs
Total cash - R/kg / -$/oz 149,431 143,596 41,552 136,595 619 598 445 514
costs produced
Total - R/kg / -$/oz 190,374 178,379 180,751 171,795 789 743 568 646
production produced
costs
PRODUCTIVITY PER
EMPLOYEE
Target - g / - oz 300 333 293 317 9.64 10.72 9.42 10.20
Actual - g / - oz 268 292 287 292 8.61 9.40 9.23 9.40
CAPITAL - Rm / - $m 1,283 2,275 2,381 8,726 171 293 241 1,027
EXPENDITURE
1 Tonnes (tons) placed on to leach pad.
2 Gold placed / tonnes
(tons) placed.
3 Gold placed into
leach pad inventory.
Rounding of figures may result in computational
discrepancies.
Group income statement
Quarter Quarter Quarter Year
ended ended ended ended
March December March December
2010 2009 2009 2009
SA Rand million Notes Unaudited Unaudited Unaudited Audited
Revenue 2 8,453 9,514 6,824 31,961
Gold income 8,222 9,234 6,518 30,745
Cost of sales 3 (6,060) (6,219) (5,621)
(23,220)
Gain (loss) on non-hedge 4 59 (2,706) 205
derivatives and other commodity (11,934)
contracts
Gross profit (loss) 2,221 309 1,102 (4,409)
Corporate administration and other (282) (359) (351) (1,275)
expenses
Market development costs (19) (10) (28) (87)
Exploration costs (277) (442) (221) (1,217)
Other operating (expenses) income 5 (56) 58 (50) (80)
Operating special items 6 (174) 4,761 (60) 5,209
Operating profit (loss) 1,413 4,317 391 (1,859)
Interest received 65 133 97 444
Exchange gain 38 527 16 852
Fair value adjustment on option 356 (66) - (249)
component of convertible bond
Finance costs and unwinding of 7 (239) (268) (252) (1,146)
obligations
Share of equity accounted 163 227 223 785
investments' profit
Profit (loss) before taxation 1,796 4,870 476 (1,173)
Taxation 8 (558) (1,522) (384) (1,172)
Profit (loss) for the period 1,238 3,348 92 (2,345)
Allocated as follows:
Equity shareholders 1,150 3,179 1 (2,762)
Non-controlling interests 88 169 91 417
1,238 3,348 92 (2,345)
Basic profit (loss) per ordinary 313 867 - (765)
share (cents) 1
Diluted profit (loss) per ordinary 313 865 - (765)
share (cents) 2
1 Calculated on the basic weighted average number
of ordinary shares.
2 Calculated on the diluted weighted average
number of ordinary shares.
Rounding of figures may result in
computational discrepancies.
Group income statement
Quarter Quarter Quarter Year
ended ended ended ended
March December March December
2010 2009 2009 2009
US Dollar million Notes Unaudited Unaudited Unaudited Audited
Revenue 2 1,126 1,273 689 3,916
Gold income 1,095 1,236 658 3,768
Cost of sales 3 (807) (833) (568) (2,813)
Gain (loss) on non-hedge 4 13 (363) 20 (1,533)
derivatives and other commodity
contracts
Gross profit (loss) 301 40 111 (578)
Corporate administration and other (37) (48) (35) (154)
expenses
Market development costs (3) (1) (3) (10)
Exploration costs (37) (59) (22) (150)
Other operating (expenses) income 5 (8) 8 (5) (8)
Operating special items 6 (23) 636 (6) 691
Operating profit (loss) 193 576 39 (209)
Interest received 9 18 10 54
Exchange gain 4 71 1 112
Fair value adjustment on option 48 (9) - (33)
component of convertible bond
Finance costs and unwinding of 7 (32) (36) (25) (139)
obligations
Share of equity accounted 22 30 23 94
investments' profit
Profit (loss) before taxation 244 650 48 (121)
Taxation 8 (76) (204) (39) (147)
Profit (loss) for the period 168 446 9 (268)
Allocated as follows:
Equity shareholders 157 424 - (320)
Non-controlling interests 11 22 9 52
168 446 9 (268)
Basic profit (loss) per ordinary 43 116 - (89)
share (cents) 1
Diluted profit (loss) per ordinary 43 115 - (89)
share (cents) 2
1 Calculated on the basic weighted average number
of ordinary shares.
2 Calculated on the diluted weighted average
number of ordinary shares.
Rounding of figures may result in
computational discrepancies.
Group statement of comprehensive income
Quarter Quarter Quarter Year
ended ended ended ended
March December March December
2010 2009 2009 2009
Restated Restated
SA Rand million Unaudited Unaudited Unaudited Audited
Profit (loss) for the period 1,238 3,348 92 (2,345)
Exchange differences on translation of (280) (618) 166 (2,645)
foreign operations
Net loss on cash flow hedges (1) (140) (171) (132)
Net loss on cash flow hedges removed 279 181 530 1,155
from equity and reported in gold income
Hedge ineffectiveness on cash flow - 15 36 40
hedges
Realised gains (losses) on hedges of 1 2 (15) (12)
capital items
Deferred taxation thereon (98) (13) (91) (263)
181 45 289 788
Net (loss) gain on available for sale (45) 346 83 482
financial assets
Deferred taxation thereon 1 (5) (3) (13)
(44) 341 80 469
Actuarial gain recognised - 88 - 88
Deferred taxation thereon - (28) - (28)
- 60 - 60
Other comprehensive (expense) income for (143) (172) 535 (1,328)
the period net of tax
Total comprehensive income (expense) for 1,095 3,176 627 (3,673)
the period net of tax
Allocated as follows:
Equity shareholders 1,007 3,008 530 (4,099)
Non-controlling interests 88 168 97 426
1,095 3,176 627 (3,673)
Rounding of figures may result in computational
discrepancies.
Group statement of comprehensive income
Quarter Quarter Quarter Year
ended ended ended ended
March December March December
2010 2009 2009 2009
Restated Restated
US Dollar million Unaudited Unaudited Unaudited Audited
Profit (loss) for the period 168 446 9 (268)
Exchange differences on translation of 22 (45) (14) 318
foreign operations
Net loss on cash flow hedges - (17) (17) (16)
Net loss on cash flow hedges removed 37 26 54 138
from equity and reported in gold income
Hedge ineffectiveness on cash flow - 2 3 5
hedges
Realised gains (losses) on hedges of - 1 (2) (1)
capital items
Deferred taxation thereon (13) (3) (9) (35)
24 9 29 91
Net (loss) gain on available for sale (6) 41 8 57
financial assets
Deferred taxation thereon - (1) - (2)
(6) 40 8 55
Actuarial gain recognised - 10 - 10
Deferred taxation thereon - (3) - (3)
- 7 - 7
Other comprehensive income for the 40 11 23 471
period net of tax
Total comprehensive income for the 208 457 32 203
period net of tax
Allocated as follows:
Equity shareholders 197 434 22 150
Non-controlling interests 11 23 10 53
208 457 32 203
Rounding of figures may result in computational
discrepancies.
Group statement of financial position
As at As at As at
March December March
2010 2009 2009
SA Rand million Note Unaudited Audited Unaudited
ASSETS
Non-current assets
Tangible assets 42,476 43,263 41,404
Intangible assets 1,309 1,316 1,408
Investments in associates and equity accounted 4,795 4,758 2,897
joint ventures
Other investments 1,315 1,302 704
Inventories 2,485 2,508 2,884
Trade and other receivables 867 788 716
Derivatives 19 40 -
Deferred taxation 349 451 477
Cash restricted for use 364 394 359
Other non-current assets 99 63 36
54,078 54,883 50,884
Current assets
Inventories 5,216 5,102 5,877
Trade and other receivables 1,517 1,419 1,827
Derivatives 1,517 2,450 4,744
Current portion of other non-current assets 2 3 2
Cash restricted for use 118 87 84
Cash and cash equivalents 5,346 8,176 5,874
13,716 17,237 18,408
Non-current assets held for sale 665 650 9,104
14,381 17,887 27,512
TOTAL ASSETS 68,459 72,770 78,396
EQUITY AND LIABILITIES
Share capital and premium 11 39,884 39,834 37,513
Retained earnings and other reserves (17,465) (13,995)
(18,276)
Non-controlling interests 956 966 893
Total equity 23,375 22,524 24,411
Non-current liabilities
Borrowings 4,809 4,862 9,147
Environmental rehabilitation and other 3,383 3,351 3,934
provisions
Provision for pension and post-retirement 1,181 1,179 1,299
benefits
Trade, other payables and deferred income 144 108 115
Derivatives 941 1,310 -
Deferred taxation 5,661 5,599 6,153
16,119 16,409 20,648
Current liabilities
Current portion of borrowings 7,095 9,493 9,745
Trade, other payables and deferred income 3,867 4,332 4,683
Derivatives 16,674 18,770 17,376
Taxation 1,271 1,186 803
28,907 33,781 32,607
Non-current liabilities held for sale 58 56 731
28,965 33,837 33,338
Total liabilities 45,084 50,246 53,986
TOTAL EQUITY AND LIABILITIES 68,459 72,770 78,396
Net asset value - cents per share 6,386 6,153 6,818
Rounding of figures may result in computational
discrepancies.
Group statement of financial position
As at As at As at
March December March
2010 2009 2009
US Dollar million Note Unaudited Audited Unaudited
ASSETS
Non-current assets
Tangible assets 5,823 5,819 4,320
Intangible assets 180 177 147
Investments in associates and equity accounted 657 640 302
joint ventures
Other investments 180 175 73
Inventories 340 337 301
Trade and other receivables 119 106 75
Derivatives 3 5 -
Deferred taxation 48 61 50
Cash restricted for use 50 53 37
Other non-current assets 14 8 4
7,414 7,381 5,308
Current assets
Inventories 715 686 613
Trade and other receivables 208 191 190
Derivatives 208 330 495
Current portion of other non-current assets - - -
Cash restricted for use 16 12 9
Cash and cash equivalents 733 1,100 613
1,880 2,319 1,920
Non-current assets held for sale 91 87 950
1,971 2,406 2,870
TOTAL ASSETS 9,385 9,787 8,178
EQUITY AND LIABILITIES
Share capital and premium 11 5,811 5,805 5,503
Retained earnings and other reserves (2,738) (2,905) (3,049)
Non-controlling interests 131 130 93
Total equity 3,204 3,030 2,547
Non-current liabilities
Borrowings 659 654 954
Environmental rehabilitation and other 464 451 410
provisions
Provision for pension and post-retirement 162 159 135
benefits
Trade, other payables and deferred income 20 14 12
Derivatives 129 176 -
Deferred taxation 776 753 642
2,210 2,207 2,153
Current liabilities
Current portion of borrowings 973 1,277 1,017
Trade, other payables and deferred income 530 582 489
Derivatives 2,286 2,525 1,813
Taxation 174 159 84
3,963 4,543 3,402
Non-current liabilities held for sale 8 7 76
3,971 4,550 3,478
Total liabilities 6,181 6,757 5,631
TOTAL EQUITY AND LIABILITIES 9,385 9,787 8,178
Net asset value - cents per share 875 828 711
Rounding of figures may result in computational
discrepancies.
Group statement of cashflows
Quarter Quarter Quarter Year
ended ended ended ended
March December March December
2010 2009 2009 2009
SA Rand million Unaudited Unaudited Unaudited Audited
Cash flows from operating activities
Receipts from customers 8,166 9,596 6,404 31,473
Payments to suppliers and employees (6,640) (5,889) (3,726)
(20,896)
Cash generated from operations 1,526 3,707 2,678 10,577
Dividends received from equity accounted 117 136 173 751
investments
Taxation paid (317) (233) (423) (1,232)
Cash utilised for hedge buy-back costs - - - (6,315)
Net cash inflow from operating 1,326 3,610 2,427 3,781
activities
Cash flows from investing activities
Capital expenditure (1,267) (2,243) (2,387) (8,656)
Proceeds from disposal of tangible 16 1,814 17 9,029
assets
Other investments acquired (120) (229) (160) (750)
Acquisition of associates and equity (72) (2,638) - (2,646)
accounted joint ventures
Proceeds on disposal of associate 4 - - -
Associates' loans advanced (17) (17) - (17)
Associates' loans repaid - - 1 3
Proceeds from disposal of investments 54 196 165 680
(Increase) decrease in cash restricted (3) 19 (104) (91)
for use
Interest received 59 129 98 445
Loans advanced (37) - - (1)
Repayment of loans advanced 1 2 1 4
Net cash outflow from investing (1,382) (2,967) (2,370) (2,000)
activities
Cash flows from financing activities
Proceeds from issue of share capital 3 39 114 2,384
Share issue expenses - (39) (4) (84)
Proceeds from borrowings 264 162 10,938 24,901
Repayment of borrowings (2,642) (57) (10,135)
(24,152)
Finance costs paid (76) (180) (410) (946)
Dividends paid (260) (43) (178) (474)
Net cash (outflow) inflow from financing (2,711) (118) 325 1,629
activities
Net (decrease) increase in cash and cash (2,767) 525 382 3,410
equivalents
Translation (63) (677) 54 (672)
Cash and cash equivalents at beginning 8,176 8,328 5,438 5,438
of period
Cash and cash equivalents at end of 5,346 8,176 5,874 8,176
period
Cash generated from operations
Profit (loss) before taxation 1,796 4,870 476 (1,173)
Adjusted for:
Movement on non-hedge derivatives and (672) 2,281 1,621 14,417
other commodity contracts
Amortisation of tangible assets 1,267 1,152 1,261 4,615
Finance costs and unwinding of 239 268 252 1,146
obligations
Environmental, rehabilitation and other 30 (70) 16 (47)
expenditure
Operating special items 169 (4,708) 60 (5,148)
Amortisation of intangible assets 4 4 6 18
Deferred stripping 204 205 (313) (467)
Fair value adjustment on option (356) 66 - 249
component of convertible bonds
Interest received (65) (133) (97) (444)
Share of equity accounted investments' (163) (227) (223) (785)
profit
Other non-cash movements 21 (675) 84 (853)
Movements in working capital (948) 674 (464) (951)
1,526 3,707 2,678 10,577
Movements in working capital
(Increase) decrease in inventories (97) (183) (440) 634
(Increase) decrease in trade and other (302) 438 (337) 106
receivables
(Decrease) increase in trade and other (549) 419 313 (1,691)
payables
(948) 674 (464) (951)
Rounding of figures may result in computational
discrepancies.
Group statement of cashflows
Quarter Quarter Quarter Year
ended ended ended ended
March December March December
2010 2009 2009 2009
US Dollar million Unaudited Unaudited Unaudited Audited
Cash flows from operating activities
Receipts from customers 1,086 1,283 646 3,845
Payments to suppliers and employees (881) (805) (378) (2,500)
Cash generated from operations 205 478 268 1,345
Dividends received from equity accounted 16 19 18 101
investments
Taxation paid (42) (32) (43) (147)
Cash utilised for hedge buy-back costs - - - (797)
Net cash inflow from operating 179 465 243 502
activities
Cash flows from investing activities
Capital expenditure (169) (281) (241) (1,019)
Proceeds from disposal of tangible 2 242 2 1,142
assets
Other investments acquired (16) (29) (16) (89)
Acquisition of associates and equity (10) (353) - (354)
accounted joint ventures
Proceeds on disposal of associate 1 - - -
Associates' loans advanced (2) (2) - (2)
Associates' loans repaid - - - -
Proceeds from disposal of investments 7 25 17 81
Decrease (increase) in cash restricted - 2 (10) (10)
for use
Interest received 8 17 10 55
Loans advanced (5) - - -
Repayment of loans advanced - - - 1
Net cash outflow from investing (184) (379) (239) (195)
activities
Cash flows from financing activities
Proceeds from issue of share capital - 5 12 306
Share issue expenses - (5) - (11)
Proceeds from borrowings 35 29 1,105 2,774
Repayment of borrowings (352) (22) (1,024) (2,731)
Finance costs paid (10) (23) (41) (111)
Dividends paid (35) (6) (18) (56)
Net cash (outflow) inflow from financing (362) (22) 33 171
activities
Net (decrease) increase in cash and cash (367) 64 37 478
equivalents
Translation - (72) 1 47
Cash and cash equivalents at beginning 1,100 1,108 575 575
of period
Cash and cash equivalents at end of 733 1,100 613 1,100
period
Cash generated from operations
Profit (loss) before taxation 244 650 48 (121)
Adjusted for:
Movement on non-hedge derivatives and (94) 306 164 1,787
other commodity contracts
Amortisation of tangible assets 169 154 127 555
Finance costs and unwinding of 32 36 25 139
obligations
Environmental, rehabilitation and other 4 (9) 2 (6)
expenditure
Operating special items 23 (629) 6 (683)
Amortisation of intangible assets - - 1 2
Deferred stripping 27 27 (32) (48)
Fair value adjustment on option (48) 9 - 33
component of convertible bonds
Interest received (9) (18) (10) (54)
Share of equity accounted investments' (22) (30) (23) (94)
profit
Other non-cash movements 3 (90) 8 (115)
Movements in working capital (124) 72 (49) (50)
205 478 268 1,345
Movements in working capital
Increase in inventories (33) (35) (34) (155)
(Increase) decrease in trade and other (45) 55 (32) (45)
receivables
(Decrease) increase in trade and other (46) 52 17 150
payables
(124) 72 (49) (50)
Rounding of figures may result in computational
discrepancies.
Group
statement of
changes in
equity
Cash Available Foreign
Share Other flow for Actuarial currency Non-
capital capital Retained hedge sale (losses) translation controlling Total
&
SA Rand premium reserves earnings reserve reserve gains reserve Total interests equity
million
Balance at 37,336 799 (18) (347) 8,959 22,956 790 23,746
December 2008 (22,765) (1,008)
Profit for 1 1 91 92
the period
Comprehensive 283 80 166 529 6 535
income
Total - - 1 283 80 - 166 530 97 627
comprehensive
income
Shares issued 177 177 177
Share-based 39 39 39
payment for
share awards
Dividends (178) (178) (178)
paid
Translation (6) 10 (7) (3) (6) 6 -
Balance at 37,513 832 (732) 59 (347) 9,125 23,518 893 24,411
March 2009 (22,932)
Balance at 39,834 1,194 (174) 414 (285) 6,314 21,558 966 22,524
December 2009 (25,739)
Profit for 1,150 1,150 88 1,238
the period
Comprehensive 181 (44) (280) (143) (143)
income
(expense)
Total - - 1,150 181 (44) - (280) 1,007 88 1,095
comprehensive
income
(expense)
Shares issued 50 50 50
Share-based 45 45 45
payment for
share awards
Dividends (255) (255) (255)
paid
Dividends of - (84) (84)
subsidiaries
Translation (2) 22 (6) 14 (14) -
Balance at 39,884 1,237 7 364 (285) 6,034 22,419 956 23,375
March 2010 (24,822)
US Dollar
million
Balance at 5,485 85 (2,361) (107) (2) (37) (635) 2,428 83 2,511
December 2008
Profit for - 9 9
the Period
Comprehensive 28 8 (14) 22 1 23
income
(expense)
Total - - - 28 8 - (14) 22 10 32
comprehensive
income
(expense)
Shares issued 18 18 18
Share-based 4 4 4
payment for
share awards
Dividends (18) (18) (18)
paid
Translation (2) (2) 3 1 - -
Balance at 5,503 87 (2,381) (76) 6 (36) (649) 2,454 93 2,547
March 2009
Balance at 5,805 161 (2,744) (23) 56 (38) (317) 2,900 130 3,030
December 2009
Profit for 157 157 11 168
the period
Comprehensive 24 (6) 22 40 40
income
(expense)
Total - - 157 24 (6) - 22 197 11 208
comprehensive
income
(expense)
Shares issued 6 6 6
Share-based 6 6 6
payment for
share awards
Dividends (35) (35) (35)
paid
Dividends of - (11) (11)
subsidiaries
Translation 3 (3) - (1) (1) 1 -
Balance at 5,811 170 (2,625) 1 50 (39) (295) 3,073 131 3,204
March 2010
Rounding of figures may result in computational
discrepancies.
Notes
for the quarter ended 31 March 2010
1. Basis of preparation
The financial statements in this quarterly report have been prepared
in accordance with the historic cost convention except for certain financial
instruments which are stated at fair value. The group's accounting policies
used in the preparation of these financial statements are consistent with those
used in the annual financial statements for the year ended 31 December 2009 and
revised International Financial Reporting Standards (IFRS) which are effective
1 January 2010, where applicable. Effective 1 January 2010 the Chief Operating
Decision Maker changed the reportable segments. Details are included in
Segmental reporting.
The financial statements of AngloGold Ashanti Limited have been
prepared in compliance with IAS34, JSE Listings Requirements and in the manner
required by the South African Companies Act, 1973 for the preparation of
financial information of the group for the quarter ended 31 March 2010.
2. Revenue
Year Year
Quarter ended ended Quarter ended ended
Mar Dec Mar Dec Mar Dec Mar Dec
2010 2009 2009 2009 2010 2009 2009 2009
Unaudited Unaudited Unaudited Audited Unaudited Unaudited Unaudited Audited
SA Rand million US Dollar million
Gold income 8,222 9,234 6,518 30,745 1,095 1,236 658 3,768
By-products
(note 3) 166 147 208 772 22 20 21 94
Interest
received 65 133 97 444 9 18 10 54
8,453 9,514 6,824 31,961 1,126 1,273 689 3,916
3. Cost of sales
Year Year
Quarter ended ended Quarter ended ended
Mar Dec Mar Dec Mar Dec Mar Dec
2010 2009 2009 2009 2010 2009 2009 2009
Unaudited Unaudited Unaudited Audited Unaudited Unaudited Unaudited Audited
SA Rand million US Dollar million
Cash operating
costs (4,713) (4,865) (4,628) (18,493) (628) (652) (467) (2,234)
By-products
revenue (note
2) 166 147 208 772 22 20 21 94
By-products
cash operating
costs (60) (77) (96) (351) (8) (10) (10) (43)
(4,607) (4,795) (4,516) (18,072) (614) (642) (456) (2,183)
Royalties (189) (179) (178) (699) (25) (24) (18) (84)
Other cash
costs (37) (43) (29) (134) (5) (6) (3) (16)
Total cash
costs (4,832) (5,017) (4,723) (18,905) (644) (671) (477) (2,283)
Retrenchment
costs (52) (39) (14) (110) (7) (5) (1) (14)
Rehabilitation
and other
non-cash costs (86) 5 (59) (182) (12) 1 (6) (22)
Production
costs (4,971) (5,050) (4,796) (19,197) (663) (676) (484) (2,319)
Amortisation
of tangible
assets (1,267) (1,152) (1,261) (4,615) (169) (154) (127) (555)
Amortisation
of intangible
assets (4) (4) (6) (18) - - (1) (2)
Total
production
costs (6,242) (6,206) (6,063) (23,830) (832) (830) (612) (2,876)
Inventory
change 182 (13) 442 610 24 (2) 44 63
(6,060) (6,219) (5,621) (23,220) (807) (833) (568) (2,813)
4. Gain (loss) on non-hedge derivatives and other commodity contracts
Year Year
Quarter ended ended Quarter ended ended
Mar Dec Mar Dec Mar Dec Mar Dec
2010 2009 2009 2009 2010 2009 2009 2009
Unaudited Unaudited Unaudited Audited Unaudited Unaudited Unaudited Audited
SA Rand million US Dollar million
(Loss) gain
on realised
non-hedge
derivatives (524) (494) 1,867 2,476 (69) (66) 189 254
Loss on
hedge
buy-back
costs - - - (6,315) - - - (797)
Gain (loss)
on
unrealised
non-hedge
derivatives 583 (2,212) (1,662) (8,095) 82 (297) (168) (990)
59 (2,706) 205 (11,934) 13 (363) 20 (1,533)
Rounding of figures may result in computational discrepancies.
5. Other operating (expenses) income
Year Year
Quarter ended ended Quarter ended ended
Mar Dec Mar Dec Mar Dec Mar Dec
2010 2009 2009 2009 2010 2009 2009 2009
Unaudited Unaudited Unaudited Audited Unaudited Unaudited Unaudited Audited
SA Rand million US Dollar million
Pension and
medical
defined
benefit
provisions (24) 29 (24) (44) (3) 4 (2) (5)
Claims filed
by former
employees in
respect of
loss of
employment,
work-related
accident
injuries and
diseases,
governmental
fiscal claims
and costs of
old tailings
operations (32) 31 (26) (31) (5) 4 (3) (3)
Miscellaneous - (2) - (5) - - - -
(56) 58 (50) (80) (8) 8 (5) (8)
6. Operating special items
Year Year
Quarter ended ended Quarter ended ended
Mar Dec Mar Dec Mar Dec Mar Dec
2010 2009 2009 2009 2010 2009 2009 2009
Unaudited Unaudited Unaudited Audited Unaudited Unaudited Unaudited Audited
SA Rand million US Dollar million
Indirect tax
expenses (44) (240) (3) (219) (6) (32) - (29)
Net
(impairments)
reversals of
tangible
assets (note
9) (81) 5,209 - 5,115 (11) 696 - 683
Recovery
(loss) on
consignment
stock - 14 - (95) - 2 - (12)
Impairment of
debtors (33) - (63) (66) (4) - (6) (7)
Contract
termination
fee at Geita
Gold Mine (5) - - - (1) - - -
Insurance
claim
recovery - 54 - 54 7 7
Net (loss)
profit on
disposal and
abandonment
of land,
mineral
rights,
tangible
assets and
exploration
properties
(note 9) (11) (275) 6 420 (2) (37) 1 49
(174) 4,761 (60) 5,209 (23) 636 (6) 691
7. Finance costs and unwinding of obligations
Year Year
Quarter ended ended Quarter ended ended
Mar Dec Mar Dec Mar Dec Mar Dec
2010 2009 2009 2009 2010 2009 2009 2009
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million US Dollar million
Finance
costs (161) (191) (181) (863) (22) (26) (17) (105)
Unwinding
obligations,
equity
portion of
convertible
bond and
other
discounts (78) (77) (71) (283) (10) (10) (8) (34)
(239) (268) (252) (1,146) (32) (36) (25) (139)
8. Taxation
Year Year
Quarter ended ended Quarter ended ended
Mar Dec Mar Dec Mar Dec Mar Dec
2010 2009 2009 2009 2010 2009 2009 2009
Unaudited Unaudited Unaudited Audited Unaudited Unaudited Unaudited Audited
SA Rand million US Dollar million
South
African
taxation
Mining
tax - (60) - (153) - (8) - (19)
Non-mining
tax (95) (10) (30) (89) (13) (1) (3) (10)
(Under)
over
provision
prior year (12) 7 (16) (33) (2) 1 (2) (4)
Deferred
taxation:
Temporary
differences 108 (180) (322) (535) 14 (24) (33) (61)
Unrealised
non-hedge
derivatives
and other
commodity
contracts (160) 204 168 1,451 (22) 27 17 181
Change in
estimated
deferred
tax rate 29 156 - 156 4 21 - 21
(130) 118 (200) 797 (18) 16 (20) 108
Foreign
taxation
Normal
taxation (337) (335) (137) (1,113) (45) (45) (14) (138)
Over
(under)
provision
prior year 2 90 (11) 50 - 12 (1) 7
Deferred
taxation:
Temporary
differences (92) (1,410) (48) (1,220) (13) (188) (5) (164)
Unrealised
non-hedge
derivatives
and other
commodity
contracts - 15 13 314 - 2 1 40
(428) (1,640) (183) (1,969) (58) (219) (18) (255)
(558) (1,522) (384) (1,172) (76) (204) (39) (147)
Rounding of figures may result in computational discrepancies.
9. Headline earnings (loss)
Year Year
Quarter ended ended Quarter ended ended
Mar Dec Mar Dec Mar Dec Mar Dec
2010 2009 2009 2009 2010 2009 2009 2009
Unaudited Unaudited Unaudited Audited Unaudited Unaudited Unaudited Audited
SA Rand million US Dollar million
The profit
(loss)
attributable
to equity
shareholders
has been
adjusted by
the
following to
arrive at
headline
earnings
(loss):
Profit
(loss)
attributable
to equity
shareholders 1,150 3,179 1 (2,762) 157 424 - (320)
Net
impairments
(reversals)
of tangible
assets (note
6) 81 (5,209) - (5,115) 11 (696) - (683)
Net (profit)
loss on
disposal and
abandonment
of land,
mineral
rights,
tangible
assets and
exploration
properties
(note 6) 11 275 (6) (420) 2 37 (1) (49)
Impairment
of
investment
in
associates
and joint
ventures 20 75 1 76 3 10 - 10
Reversal of
impairment
in
associates - (75) - (75) - (10) - (10)
Operating
special
items of
associates - 1 - 1 - - - -
Taxation on
items above
- current
portion - (12) 4 145 - (2) 1 18
Taxation on
items above
- deferred
portion (21) 1,414 (1) 1,360 (3) 189 - 182
1,241 (353) - (6,790) 169 (48) - (852)
Cents per
share (1)
Headline
earnings
(loss) 338 (96) - (1,880) 46 (13) - (236)
(1)Calculated on the basic weighted average number of ordinary shares.
10. Number of shares
Quarter ended Year ended
Mar Dec Mar Dec
2010 2009 2009 2009
Unaudited Unaudited Unaudited Audited
Authorised number of shares:
Ordinary shares of 25 SA 600,000,000 600,000,000 400,000,000 600,000,000
cents each
E ordinary shares of 25 4,280,000 4,280,000 4,280,000 4,280,000
SA cents each
A redeemable preference 2,000,000 2,000,000 2,000,000 2,000,000
shares of 50 SA cents each
B redeemable preference 5,000,000 5,000,000 5,000,000 5,000,000
shares of 1 SA cent each
Issued and fully paid number of
shares:
Ordinary shares in issue 362,352,345 362,240,669 354,135,912 362,240,669
E ordinary shares in 3,709,362 3,794,998 3,927,894 3,794,998
issue
Total ordinary shares: 366,061,707 366,035,667 358,063,806 366,035,667
A redeemable preference 2,000,000 2,000,000 2,000,000 2,000,000
shares
B redeemable preference 778,896 778,896 778,896 778,896
shares
In calculating the diluted number of ordinary shares outstanding for the
period, the following were taken into consideration:
Ordinary shares 362,295,477 362,137,200 353,635,884 356,563,773
E ordinary shares 3,734,382 3,809,476 3,940,464 3,873,169
Fully vested options 1,186,849 539,666 805,303 791,353
Weighted average number 367,216,708 366,486,342 358,381,651 361,228,295
of shares
Dilutive potential of 733,901 1,205,730 - -
share options
Diluted number of 367,950,609 367,692,072 358,381,651 361,228,295
ordinary shares (1)
(1)The basic and diluted number of ordinary shares is the same for the March
2009 quarter and year ended December 2009 as the effects of shares for
performance related options are anti-dilutive.
11. Share capital and premium
As at As at
Mar Dec Mar Mar Dec Mar
2010 2009 2009 2010 2009 2009
Unaudited Audited Unaudited Unaudited Audited Unaudited
SA Rand million US Dollar million
Balance at beginning of
period 40,662 38,246 38,246 5,935 5,625 5,625
Ordinary shares issued 43 2,438 173 5 312 17
E ordinary shares
cancelled (10) (22) (5) (1) (2) (1)
Sub-total 40,695 40,662 38,414 5,939 5,935 5,642
Redeemable preference
shares held within the
group (313) (313) (313) (53) (53) (53)
Ordinary shares held
within the group (205) (212) (269) (31) (32) (39)
E ordinary shares held
within group (293) (303) (320) (44) (45) (47)
Balance at end of
period 39,884 39,834 37,513 5,811 5,805 5,503
Rounding of figures may result in computational discrepancies.
12. Exchange rates
Mar Dec Mar
2010 2009 2009
Unaudited Unaudited Unaudited
ZAR/USD average for the year to date 7.50 8.39 9.90
ZAR/USD average for the quarter 7.50 7.47 9.90
ZAR/USD closing 7.30 7.44 9.59
ZAR/AUD average for the year to date 6.78 6.56 6.58
ZAR/AUD average for the quarter 6.78 6.80 6.58
ZAR/AUD closing 6.68 6.67 6.60
BRL/USD average for the year to date 1.80 2.00 2.31
BRL/USD average for the quarter 1.80 1.74 2.31
BRL/USD closing 1.78 1.75 2.33
ARS/USD average for the year to date 3.83 3.73 3.54
ARS/USD average for the quarter 3.83 3.81 3.54
ARS/USD closing 3.87 3.80 3.71
13. Capital commitments
Mar Dec Mar Mar Dec Mar
2010 2009 2009 2010 2009 2009
Unaudited Audited Unaudited Unaudited Audited Unaudited
SA Rand million US Dollar million
Orders placed and
outstanding on
capital contracts
at the prevailing
rate of exchange
(1) 1,179 976 1,721 162 131 180
(1)Includes capital commitments relating to equity accounted
joint ventures.
Liquidity and capital resources
To service the above capital commitments and other operational requirements,
the group is dependent on existing cash resources, cash generated from
operations and borrowing facilities.
Cash generated from operations is subject to operational, market and other
risks. Distributions from operations may be subject to foreign investment and
exchange control laws and regulations and the quantity of foreign exchange
available in offshore countries. In addition, distributions from joint ventures
are subject to the relevant board approval.
The credit facilities and other financing arrangements contain financial
covenants and other similar undertakings. To the extent that external
borrowings are required, the groups covenant performance indicates that
existing financing facilities will be available to meet the above commitments.
14. Contingencies
AngloGold Ashanti's material contingent liabilities and assets at 31
March 2010 are detailed below:
Contingencies and guarantees SA Rand US Dollar
million million
Contingent liabilities
Groundwater pollution (1) - -
Deep groundwater pollution - South Africa - -
(2)
Sales tax on gold deliveries - Brazil (3) 554 76
Other tax disputes - Brazil (4) 197 27
Indirect taxes - Ghana (5) 66 9
Contingent assets - -
Royalty - Boddington Gold Mine (6) - -
Insurance claim - Savuka Gold Mine (7)
Financial guarantees
Oro Group (Pty) Ltd (8) 100 14
917 126
Rounding of figures may result in computational discrepancies.
AngloGold Ashanti is subject to contingencies pursuant to
environmental laws and regulations that may in future require the group to take
corrective action as follows:
Groundwater pollution - AngloGold Ashanti has identified groundwater
contamination plumes at certain of its operations, which have occurred
primarily as a result of seepage from mine residue stockpiles. Numerous
scientific, technical and legal studies have been undertaken to assist in
determining the magnitude of the contamination and to find sustainable
remediation solutions. The group has instituted processes to reduce future
potential seepage and it has been demonstrated that Monitored Natural
Attenuation (MNA) by the existing environment will contribute to improvement in
some instances. Furthermore, literature reviews, field trials and base line
modelling techniques suggest, but are not yet proven, that the use of
phyto-technologies can address the soil and groundwater contamination. Subject
to the completion of trials and the technology being a proven remediation
technique, no reliable estimate can be made for the obligation.
Deep groundwater pollution - The company has identified a flooding and future
pollution risk posed by deep groundwater in the Klerksdorp and Far West Rand
gold fields. Various studies have been undertaken by AngloGold Ashanti since
1999. Due to the interconnected nature of mining operations, any proposed
solution needs to be a combined one supported by all the mines located in these
gold fields. As a result the Department of Mineral Resources and affected
mining companies are involved in the development of a "Regional Mine Closure
Strategy". In view of the limitation of current information for the accurate
estimation of a liability, no reliable estimate can be made for the obligation.
Sales tax on gold deliveries - Mineração Serra Grande S.A. (MSG), received two
tax assessments from the State of Goiás related to payments of sales taxes on
gold deliveries for export. AngloGold Ashanti Brasil Mineração Ltda. manages
the operation and its attributable share of the first assessment is
approximately $47m. In November 2006, the administrative council's second
chamber ruled in favour of MSG and fully cancelled the tax liability related to
the first period. The State of Goiás has appealed to the full board of the
State of Goiás tax administrative council. The second assessment was issued by
the State of Goiás in October 2006 on the same grounds as the first assessment,
and the attributable share of the assessment is approximately $29m. The company
believes both assessments are in violation of federal legislation on sales
taxes.
Other tax disputes - MSG received a tax assessment in October 2003 from the
State of Minas Gerais related to sales taxes on gold. The tax administrators
rejected the company's appeal against the assessment. The company is now
appealing the dismissal of the case. The company's attributable share of the
assessment is approximately $9m.
AngloGold subsidiaries in Brazil are involved in various disputes with tax
authorities. These disputes involve federal tax assessments including income
tax, royalties, social contributions and annual property tax. The amount
involved is approximately $18m.
Indirect taxes - AngloGold Ashanti (Ghana) Limited received a tax assessment
for $9m during September 2009 following an audit by the tax authorities related
to indirect taxes on various items. Management is of the opinion that the
indirect taxes are not payable and the company has lodged an objection.
Royalty - As a result of the sale of the interest in the Boddington Gold Mine
joint venture during 2009, the group is entitled to receive a royalty on any
gold recovered or produced by the Boddington Gold Mine, where the gold price is
in excess of Boddington Gold Mine's cash cost plus $600/oz. The royalty
commences on 1 July 2010 and is capped at a total amount of $100m, R744m.
Insurance claim - On 22 May 2009 an insurable event occurred at Savuka Gold
Mine. The amounts due from the insurers are subject to a formula based on lost
production, average gold price and average exchange rates subject to various
excesses and the production and the preparation of supportable data. The
insurable amount is not yet determinable, but management expects that it is
likely to exceed $40m, R297m and will be received during the first half of
2010.
Provision of surety - The company has provided sureties in favour of a lender
on a gold loan facility with its affiliate Oro Group (Pty) Limited and one of
its subsidiaries to a maximum value of $14m, R100m. The suretyship agreements
have a termination notice period of 90 days.
15. Concentration of risk
There is a concentration of risk in respect of reimbursable value
added tax and fuel duties from the Tanzanian government:
Reimbursable value added tax due from the Tanzanian government amounts to $42m
at 31 March 2010 (31 December 2009: $36m). The last audited value added tax
return was for the period ended 31 January 2010 and at the reporting date the
audited amount was $36m. The outstanding amounts at Geita have been discounted
to their present value at a rate of 7.82%.
Reimbursable fuel duties from the Tanzanian government amounts to $49m at 31
March 2010 (31 December 2009: $48m). Fuel duty claims are required to be
submitted after consumption of the related fuel and are subject to
authorisation by the Customs and Excise authorities. Claims for refund of fuel
duties amounting to $45m have been lodged with the Customs and Excise
authorities, whilst claims for refund of $4m have not yet been lodged. The
outstanding amounts have been discounted to their present value at a rate of
7.82%.
16. Subsequent events
During April 2010 AngloGold Ashanti secured a US$1 billion, four-year unsecured
revolving credit facility (RCF) from its banking syndicate, to refinance its
existing unsecured revolving credit facility that matures in December 2010 and
to extend the overall tenor of its statement of financial position. The new
RCF, agreed with a group of 16 banks, replaces a three-year facility of
US$1.15 billion that was due to mature in December 2010. The RCF carries a
margin of 175 basis points above the London Interbank Offered Rate and carries
a commitment fee of 40 percent of margin.
AngloGold Ashanti Limited also announced the pricing of an offering of $1
billion of 10-year and 30-year unsecured notes during April 2010. The offering
consisted of $700m of 10-year unsecured notes at a coupon of 5.375%, a premium
of 165 basis points over 10 year treasuries and $300m of 30-year unsecured
notes at a coupon of 6.50%, a premium of 200 basis points over treasuries. The
issue was significantly oversubscribed. The offering closed on 28 April 2010.
AngloGold Ashanti estimates that the net proceeds from the offering will be
approximately $983m, after deducting discounts and estimated expenses.
17. Borrowings
AngloGold Ashanti's borrowings are interest bearing.
18. Announcements
On 19 February 2010, AngloGold Ashanti announced that following
discussions with the Environmental Protection Agency of Ghana (EPA), the
Iduapriem mine in Ghana had been temporarily suspended to address adverse
environmental impacts arising from the current tailings storage facility.
On 24 February 2010, AngloGold Ashanti announced that Mr Tito Mboweni,
the former Governor of the South African Reserve Bank has been appointed, with
effect from 1 June 2010, as chairman of AngloGold Ashanti, to succeed Mr
Russell Edey, following his retirement as chairman and from the board at the
conclusion of the annual general meeting to be held on 7 May 2010.
On 26 March 2010, AngloGold Ashanti announced that it has entered into
a definitive joint venture agreement (JVA) with l'Office des Mines d'Or de
Kilo-Moto (OKIMO) relating to the development of the Ashanti Goldfields Kilo
(AGK) project in the Democratic Republic of the Congo (DRC) and the transfer of
the exploitation permits to AGK. Under the JVA, AngloGold Ashanti and OKIMO
agree to jointly develop the AGK project through the joint company AGK, in
which AGA holds an 86.22% interest and OKIMO holds the remaining 13.78%. The
JVA provides for the exploitation permits to be transferred from OKIMO to AGK
covering an area of approximately 6,000 km2 in the Ituri district in the
northeastern DRC. This includes the Mongbwalu project where a mineral resource
of approximately 3 million ounces has been identified by previous exploration
work and where further exploration and feasibility studies are currently taking
place.
Following its announcement of 19 February 2010 of a temporary
suspension of operations at the Iduapriem mine, AngloGold Ashanti announced on
30 March 2010 that it had applied for a permit from the EPA for the
construction of the tailings facility and expected gold production to resume at
Iduapriem in April. The Company was accelerating the establishment of a water
treatment plant and a new tailings storage facility which it aims to commission
in the third quarter of 2010 and early 2011 respectively. In addition, it
announced that at its Obuasi mine in Ghana, AngloGold Ashanti had suspended the
operation of gold processing pending the implementation of a revised water
management strategy to reduce contaminants contained in its discharge.
Details of the strategy have been submitted to the EPA.
On 9 April 2010, AngloGold Ashanti noted the following investment
grade ratings assigned to it:
Moody's Investors Service : Baa3, Outlook Stable
Standard & Poor's : BBB-, Outlook Stable
On 21 April 2010, AngloGold Ashanti announced that it had secured a
US$1 billion, four-year unsecured revolving credit facility.
On 21 April 2010, AngloGold Ashanti announced the appointment of
Mr Ferdinand (Fred) Ohene-Kena, the former Ghanaian Minister of Mines and
Energy to the board. The appointment becomes effective on 1 June 2010.
On 22 April 2010, AngloGold Ashanti announced the pricing of an
offering of US$1 billion of 10-year and 30-year unsecured notes. The issue was
significantly oversubscribed and the offering closed on 28 April 2010.
19. Dividend
Final Dividend No. 107 of 70 South African cents or 6.2067 UK pence or
13.22 cedis per ordinary share was paid to registered shareholders on 19 March
2010, while a dividend of 2.079 Australian cents per CHESS Depositary Interest
(CDI) was paid on the same day. On 22 March 2010, holders of Ghanaian
Depositary Shares (GhDSs) were paid 0.1322 cedis per GhDS. Each CDI represents
one-fifth of an ordinary share, and 100 GhDSs represents one ordinary share. A
dividend of 9.4957 US cents per American Depositary Share (ADS) was paid to
holders of American Depositary Receipts (ADRs) on 29 March 2010. Each ADS
represents one ordinary share.
Final Dividend No. E7 of 35 South African cents was paid to holders of
E ordinary shares on 19 March 2010, being those employees participating in the
Bokamoso ESOP and Izingwe Holdings (Proprietary) Limited.
20. Detailed report
This report contains a summary of the results of AngloGold Ashanti's
operations. A detailed report appears on the internet and is obtainable in
printed format from the investor relations contacts, whose details, along with
the website address, appear at the end of this report.
By order of the Board
R P EDEY M CUTIFANI
Chairman Chief Executive Officer
5 May 2010
Administrative information
AngloGold Ashanti Limited
Registration No. 1944/017354/06
Incorporated in the Republic of South Africa
Share codes:
ISIN: ZAE000043485
JSE: ANG
LSE: AGD
NYSE: AU
ASX: AGG
GhSE (Shares): AGA
GhSE (GhDS): AAD
Euronext Paris: VA
Euronext Brussels: ANG
JSE Sponsor: UBS
Auditors: Ernst & Young Inc
Offices
Registered and Corporate
76 Jeppe Street
Newtown 2001
(PO Box 62117, Marshalltown 2107)
South Africa
Telephone: +27 11 637 6000
Fax: +27 11 637 6624
Australia
Level 13, St Martins Tower
44 St George's Terrace
Perth, WA 6000
(PO Box Z5046, Perth WA 6831)
Australia
Telephone: +61 8 9425 4602
Fax: +61 8 9425 4662
Ghana
Gold House
Patrice Lumumba Road
(PO Box 2665)
Accra
Ghana
Telephone: +233 21 772190
Fax: +233 21 778155
United Kingdom Secretaries
St James's Corporate Services Limited
6 St James's Place
London SW1A 1NP
England
Telephone: +44 20 7499 3916
Fax: +44 20 7491 1989
E-mail: jane.kirton@corpserv.co.uk
Directors
Executive
M Cutifani (Chief Executive Officer)
S Venkatakrishnan * (Chief Financial Officer)
Non-Executive
R P Edey * (Chairman)
Dr T J Motlatsi ? (Deputy Chairman)
F B Arisman #
W A Nairn ?
Prof W L Nkuhlu ?
S M Pityana ?
* British # American
Australian ? South African
Officers
Company Secretary: Ms L Eatwell
Investor Relations Contacts
South Africa
Sicelo Ntuli
Telephone: +27 11 637 6339
Fax: +27 11 637 6400
E-mail: sntuli@AngloGoldAshanti.com
United States
Stewart Bailey
Telephone: +1-212-836-4303
Mobile: +1-646-717-3978
E-mail: sbailey@AngloGoldAshanti.com
General E-mail enquiries
investors@AngloGoldAshanti.com
AngloGold Ashanti website
http://www.AngloGoldAshanti.com
Company secretarial E-mail
Companysecretary@AngoGoldAshanti.com
AngloGold Ashanti posts information that is important to investors on the main
page of its website at www.anglogoldashanti.com and under the "Investors" tab
on the main page. This information is updated regularly. Investors should
visit this website to obtain important information about AngloGold Ashanti.
PUBLISHED BY ANGLOGOLD ASHANTI
PRINTED BY INCE (PTY) LIMITED
Share Registrars
South Africa
Computershare Investor Services (Pty) Limited
Ground Floor, 70 Marshall Street
Johannesburg 2001
(PO Box 61051, Marshalltown 2107)
South Africa
Telephone: 0861 100 950 (in SA)
Fax: +27 11 688 5218
web.queries@computershare.co.za
United Kingdom
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 7NH
England
Telephone: +44 870 702 0000
Fax: +44 870 703 6119
Australia
Computershare Investor Services Pty Limited
Level 2, 45 St George's Terrace
Perth, WA 6000
(GPO Box D182 Perth, WA 6840)
Australia
Telephone: +61 8 9323 2000
Telephone: 1300 55 2949 (in Australia)
Fax: +61 8 9323 2033
Ghana
NTHC Limited
Martco House
Off Kwame Nkrumah Avenue
PO Box K1A 9563 Airport
Accra
Ghana
Telephone: +233 21 229664
Fax: +233 21 229975
ADR Depositary
The Bank of New York Mellon ("BoNY")
BNY Shareowner Services
PO Box 358016
Pittsburgh, PA 15252-8016
United States of America
Telephone: +1 800 522 6645 (Toll free in USA) or +1 201 680 6578 (outside USA)
E-mail: shrrelations@mellon.com
Website: www.bnymellon.com.comshareowner
Global BuyDIRECTSM
BoNY maintains a direct share purchase and dividend reinvestment plan for
AngloGold Ashanti.
Telephone: +1-888-BNY-ADRS
Certain statements made in this communication, including, without limitation,
those concerning AngloGold Ashanti's strategy to reduce its gold hedging
position including the extent and effects of the hedge reduction, the economic
outlook for the gold mining industry, expectations regarding gold prices,
production, cash costs and other operating results, growth prospects and
outlook of AngloGold Ashanti's operations, individually or in the aggregate,
including the completion and commencement of commercial operations of certain
of AngloGold Ashanti's exploration and production projects and completion of
acquisitions and dispositions, AngloGold Ashanti's liquidity and capital
resources, and capital expenditure and the outcome and consequences of any
pending litigation proceedings, contain certain forward-looking statements
regarding AngloGold Ashanti's operations, economic performance and financial
condition. Although AngloGold Ashanti believes that the expectations reflected
in such forward-looking statements are reasonable, no assurance can be given
that such expectations will prove to have been correct. Accordingly, results
could differ materially from those set out in the forward-looking statements as
a result of, among other factors, changes in economic and market conditions,
success of business and operating initiatives, changes in the regulatory
environment and other government actions, fluctuations in gold prices and
exchange rates, and business and operational risk management. For a discussion
of such factors, refer to AngloGold Ashanti's annual report for the year ended
31 December 2009, which was distributed to shareholders on 30 March 2010, and
the company's annual report on Form 20-F, filed with the Securities and
Exchange Commission in the United States on 19 April 2010. AngloGold Ashanti
undertakes no obligation to update publicly or release any revisions to these
forward-looking statements to reflect events or circumstances after today's
date or to reflect the occurrence of unanticipated events. All subsequent
written or oral forward-looking statements attributable to AngloGold Ashanti or
any person acting on its behalf are qualified by the cautionary statements
herein. AngloGold Ashanti posts information that is important to investors on
the main page of its website at www.anglgoldashanti.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.
END
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