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ANG
ANANO
ANG - Anglogold Ashanti - Report to shareholders for the quarter and six months
ended 30 June 2007 Group results for the quarter
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
Report to shareholders for the quarter and six months ended 30 June 2007
Group results for the quarter
- Adjusted headline earnings of $82m compared with $98m in the previous
quarter, due to stronger local operating currencies, higher exploration spend
and continued hedge book reduction
- Gold production up slightly to 1.35Moz and total cash costs steady at $333/oz
- Price received increased slightly to $605/oz, 9% lower than the average spot
price for the quarter, with hedge delta reduced by 840,000oz to 8.75Moz
- Interim dividend of 90 South African cents (13 US cents) per share declared
- CEO Bobby Godsell announces his retirement; Mark Cutifani named as his
successor
Quarter Six months
ended ended ended ended
June March June June
2007 2007 2007 2006
SA rand / Metric
Operating review
Gold
Produced
- kg / oz (000) 41,958 41,239 83,198 85,691
Price received1
- R/kg / $/oz 137,579 139,953 138,807 116,683
Total cash costs
- R/kg / $/oz 75,724 76,991 76,406 62,181
Total production costs
- R/kg / $/oz 99,734 99,905 99,872 83,767
Financial review
Gross profit (loss)
- R / $ million 1,930 778 2,708 (921)
Gross profit adjusted for the
profit (loss)
on unrealised non-hedge
derivatives
and other commodity contracts 2
- R / $ million 1,688 1,832 3,520 3,228
Profit (loss) attributable to
equity
shareholders
- R / $ million 1,083 (150) 933 (2,126)
Headline earnings (loss) 3
- R / $ million 1,070 (130) 940 (2,159)
Headline earnings adjusted for
the profit (loss)
on unrealised non-hedge
derivatives,
other commodity contracts and
fair value
adjustments on convertible bond 4
- R / $ million 583 707 1,290 1,436
Capital expenditure
- R / $ million 1,979 1,417 3,396 2,130
Earnings (loss) per ordinary
share - cents/share
Basic 385 (53) 332 (790)
Diluted 384 (53) 331 (788)
Headline 3 380 (46) 334 (802)
Headline earnings adjusted for
the profit (loss)
on unrealised non-hedge
derivatives,
other commodity contracts and
fair value
adjustments on convertible bond 4
- cents/share 207 251 459 534
Dividends
- cents/share 90 210
Quarter Six months
ended ended ended ended
June March June June
2007 2007 2007 2006
US dollar / Imperial
Operating review
Gold
Produced
- kg / oz (000) 1,349 1,326 2,675 2,755
Price received1
- R/kg / $/oz 605 602 604 573
Total cash costs
- R/kg / $/oz 333 332 333 307
Total production costs
- R/kg / $/oz 439 430 435 413
Financial review
Gross profit (loss)
- R / $ million 231 147 378 (39)
Gross profit adjusted for the profit
(loss)
on unrealised non-hedge derivatives
and other commodity contracts 2
- R / $ million 239 253 492 506
Profit (loss) attributable to equity
shareholders
- R / $ million 111 19 131 (241)
Headline earnings (loss) 3
- R / $ million 109 22 132 (245)
Headline earnings adjusted for the
profit (loss)
on unrealised non-hedge derivatives,
other commodity contracts and fair value
adjustments on convertible bond 4
- R / $ million 82 98 180 225
Capital expenditure
- R / $ million 279 196 476 337
Earnings (loss) per ordinary share -
cents/share
Basic 39 7 47 (90)
Diluted 39 7 46 (89)
Headline 3 39 8 47 (91)
Headline earnings adjusted for the
profit (loss)
on unrealised non-hedge derivatives,
other commodity contracts and fair value
adjustments on convertible bond 4
- cents/share 29 35 64 84
Dividends
- cents/share 13 29
Notes: 1. Refer to note D of "Non-GAAP disclosure" for the definition.
2. Refer to note B of "Non-GAAP disclosure" for the definition.
3. Refer to note 8 of "Notes" for the definition.
4. Refer to note A of "Non-GAAP disclosure" for the definition.
$ represents US dollar, unless otherwise stated.
Rounding of figures may result in computational discrepancies.
Quarter 2 2007
Operations at a glance
for the quarter ended 30 June 2007
Production Total cash costs
% %
oz (000) Variance 3 $/oz Variance 3
Mponeng 154 8 247 (4)
Sunrise Dam 149 1 295 (1)
Great Noligwa 125 1 320 (12)
Kopanang 101 5 294 (1)
TauTona 99 3 311 11
AngloGold Ashanti Mineracao 73 11 249 20
Geita 82 5 337 (25)
Cripple Creek & Victor 69 8 249 3
Cerro Vanguardia4 50 (4) 256 36
Obuasi 92 (9) 452 14
Iduapriem 4 43 59 293 (36)
Yatela 4 33 (6) 232 7
Serra Grande 4 24 - 263 13
Siguiri 4 64 (12) 500 20
Morila 4 35 (15) 410 15
Sadiola 4 34 10 404 (7)
Tau Lekoa 39 (9) 469 9
Navachab 20 - 349 (5)
Savuka 18 - 431 21
Moab Khotsong 13 (7) 695 20
Other 33 -
AngloGold Ashanti 1,349 2 333 -
Gross profit (loss)
adjusted for the profit
(loss) on unrealised non-
hedge derivatives and
other commodity
Cash gross profit 1 contracts 2
% %
$m Variance 3 $m Variance 3
Mponeng 53 8 41 5
Sunrise Dam 42 (2) 30 (6)
Great Noligwa 35 17 22 16
Kopanang 31 7 23 5
TauTona 29 (6) 15 (25)
AngloGold Ashanti Mineracao 26 4 19 (10)
Geita 24 200 11 650
Cripple Creek & Victor 23 - 16 7
Cerro Vanguardia4 19 (5) 13 (7)
Obuasi 15 (25) 1 (80)
Iduapriem 4 13 225 9 200
Yatela 4 12 (14) 11 (8)
Serra Grande 4 8 (20) 6 (25)
Siguiri 4 7 (46) - (100)
Morila 4 7 (36) 4 (50)
Sadiola 4 7 - 6 -
Tau Lekoa 5 (29) (1) (200)
Navachab 5 - 4 -
Savuka 3 (40) 1 (67)
Moab Khotsong (1) - (6) (50)
Other 19 (41) 14 (44)
AngloGold Ashanti 382 (1) 239 (6)
1 Refer to note F of "Non-GAAP disclosure" for the definition.
2 Refer to note B of "Non-GAAP disclosure" for the definition.
3 Variance June 2007 quarter on March 2007 quarter - increase (decrease).
4 Attributable.
Rounding of figures may result in computational discrepancies.
Letter from the chairman
Dear Shareholders
The AngloGold Ashanti board announces that Bobby Godsell will be retiring from
the company and the board with effect from 30 September, 2007. Bobby has been
with the Anglo American Group since 1974, was appointed Chief Executive Officer
of the Gold and Uranium Division of Anglo American in July 1995 and Chief
Executive Officer of AngloGold Ashanti in April 1998.
We also announce the appointment of Mark Cutifani as Bobby`s successor. Mark is
an Australian mining engineer who currently holds the position of Chief
Operating Officer at CVRD Inco where he has responsibility for CVRD Inco`s
global nickel business. He will take up his new position in mid- September
2007.
The board and management of AngloGold Ashanti are very fortunate to have had
the benefits of Bobby`s leadership and inspiration for the past 12 years. His
career with the Anglo Group has been characterised by his clear vision of
ethics and business and how the two combine in the interests of shareholder
value, equity and the growth of democracy. I have no doubt that he will
continue to make a contribution to South Africa and this continent in whatever
course he chooses now to follow.
I am also confident that Mark Cutifani is a person with the necessary
technical, financial and socially responsible business experience to meet the
challenges which face AngloGold Ashanti in the years to come.
Additionally, we also announce that Roberto Carvalho Silva, after more than
thirty years with the Anglo American Group, has decided to leave AngloGold
Ashanti in September. The board and management wish him well in his future
pursuits. Neville Nicolau will become the Chief Operating Officer of the
company with responsibility for all operations. Mr Carvalho Silva will assist
Mr Nicolau in the consolidation of the two operating regions, which will
commence as soon as possible.
Yours sincerely,
R. P. Edey
Chairman
Financial and operating review
OVERVIEW FOR THE QUARTER
Adjusted headline earnings were $82m compared with $98m in the first quarter.
The reduction quarter-on- quarter was primarily due to stronger local operating
currencies, higher exploration spend and continued hedge book reduction. The
received gold price, whilst slightly up on the prior quarter at $605/oz, was 9%
lower than the average spot price of $666/oz as the company continued to reduce
its hedge book. As at 30 June the hedge delta was 8.75Moz, as compared to
9.59Moz at 31 March, based on spot prices at quarter end of $649/oz and
$663/oz, respectively.
The June quarter was marked by a steady operational performance with production
2% better at 1.35Moz. Total cash costs, at $333/oz, were in line with those of
the previous quarter, largely due to the appreciation of local operating
currencies, including a 2% strengthening in the South African rand, 5%
strengthening of the Australian dollar and a 7% strengthening of the Brazilian
real against the dollar.
Operationally, the South African assets had a mixed quarter, with lower
recovered grades mitigating the effect of higher volumes at most mines and
resulting in 2% improvements in both production and total cash costs, which
declined to R71,551/kg. Individually, Kopanang, Mponeng and TauTona all
reported solid production increases, while Great Noligwa and Savuka posted
steady production. Moab Khotsong and Tau Lekoa, however, saw production
decreases of 11% and 8% respectively.
Of the other African assets, good operational performances were recorded at
Iduapriem, where production increased 59% and total cash costs declined 36%; at
Sadiola, where production was 10% higher and total cash costs 7% lower; and at
Geita, where production and total cash costs improved by 5% and 25%,
respectively. Morila and Yatela reported production declines of 15% and 6%,
while power disruptions and maintenance shut-downs at Siguiri combined with a
5% grade decline, resulted in a 12% decrease in production.
Regarding the international operations, Cerro Vanguardia in Argentina had a
difficult quarter, with production 4% lower and total cash costs 36% higher due
in part to a lower silver by-product credit and increased consumption of mining
supplies. In Brazil, production remained steady at Serra Grande and increased
11% at AngloGold Ashanti Brasil Mineracao due to the commissioning of the
Cuiaba? expansion, although total cash costs at both operations were negatively
affected by the appreciation of the Brazilian real over the quarter. At Sunrise
Dam in Australia, production was in line with that of the previous quarter and
total cash costs were 7% lower, while Cripple Creek & Victor, in the US,
reported a 3% increase in total cash costs due to higher fuel prices, despite
an 8% production improvement.
Following the poor safety start to 2007, a full safety review commenced,
focusing on new outcome-based initiatives. TauTona, which had a particularly
difficult 2006 safety year, has made good progress and remains fatality-free to
date for 2007. Despite the injury-free performances reported by Morila,
Iduapriem, Siguiri and Navachab for the quarter, the company`s lost time injury
frequency rate nevertheless deteriorated by 15% to 9.08 per million hours
worked and remains a key focus for improvement going forward.
During the quarter, AngloGold Ashanti completed a transaction with
Trans-Siberian Gold (TSG), in which it currently holds a 29.9% stake, to
purchase two exploration companies from TSG for $40m. The exploration companies
consist of Amikan (which holds the Veduga deposit and related exploration and
mining licences) and AS APK (which holds the Bogunay deposit and related
exploration and mining licenses). Together, the companies will form part of
AngloGold Ashanti`s initial contribution towards its strategic alliance with
Polymetal as announced on 21 September 2006.
A dividend of 90 South African cents (13 US cents) per share has been declared
on ordinary shares for the six months ended 30 June 2007.
Looking ahead, production for the third quarter is estimated to be 1.48Moz at
an average total cash cost of $330/oz, assuming the following exchange rates:
R7.15/$, A$/$0.84, BRL1.95/$ and Argentinean peso 3.11/$. Capital expenditure
is estimated at $332m and will be managed in line with profitability and cash
flow.
Notes:
- All references to price received includes realised non-hedge derivatives.
- In the case of joint venture and operations with minority holdings, all
production and financial results are attributable to AngloGold Ashanti.
- Adjusted gross profit (loss) is gross profit (loss) adjusted to exclude
unrealised non-hedge derivatives and other commodity contracts.
- Adjusted headline earnings is headline earnings before unrealised non-hedge
derivatives and other commodity contracts, fair value adjustments on the option
component of the convertible bond and deferred tax thereon.
- Rounding of figures may result in computational discrepancies.
Review of the gold market
A strong start to the quarter saw the gold price trade up to $690/oz, however
on the back of a slightly stronger US dollar and what is normally a seasonally
quiet period for gold, the price then traded down to a low of $640/oz and ended
the quarter at $648/oz. The gold price averaged $666/oz for the quarter,
marginally higher that the previous quarter`s $650/oz.
The rand gold price averaged R151,392/kg for the quarter, marginally higher
than the previous quarter`s average of R150,698/kg. The strengthening of the
Australian dollar saw the gold price average A$802/oz for the quarter, some 3%
lower than the A$826/oz of the previous quarter.
PHYSICAL MARKET
The increased gold price stability of the first quarter of 2007 led to a 17%
improvement in jewellery demand, with indications that second quarter buying
was also healthy. Gold sales at the April Akshaya Thritiya festival in India -
one of the most important gold-buying events of the year - were reported to
have been substantially higher than those of the previous year, when volatility
rose to nearly 40%. It appears that provided the relative price stability of
2007 continues, jewellery demand is expected to remain strong throughout the
year, even at prices in the mid-to-high $600/oz range, and particularly given
the rising income levels of main jewellery-buying areas such as India, China
and the Middle East.
In an effort to help spur on this demand, the World Gold Council (WGC) this
quarter launched a new international consumer advertising campaign, "Only
Gold", in conjunction with major retailers and manufacturers in the US and
China. The roll-out of this campaign to Europe and India is planned for later
in the year, with early indications that acceptance by retailers to allocate
spend to these campaigns is growing.
CENTRAL BANK SALES
The second quarter saw continued central bank gold sales, with signatories of
the second Central Bank Gold Agreement (CBGA2), including Spain, France and the
European Central Bank selling a total of 267t during the period and bringing
the total sales for the third year of the CBGA2 to 301t by the end of June.
Significantly, the Swiss National Bank also announced in June that it will
adjust the composition of its reserves by selling 250t of gold before the end
of the CBGA2 in September 2009, which may result in higher central bank sales
for 2007 compared with those of 2006.
Speculation that the IMF will sell 400t of gold (out of its total reserves of
3,217t) remains, but as the sale is expected to be carried out under the terms
of the CBGA2 agreement, market impact of such a decision is likely to be
minimal.
INVESTMENT MARKET
Despite relatively limited activity in the gold ETFs over the quarter,
investment in the WGC-backed Exchange Traded Gold ETFs, notably the GLD in New
York and Singapore, GBS in London and Paris, GOLD in Australia and New Gold
Debentures in Johannesburg, remained strong, representing a total of 19Moz
(590t), or the equivalent of $12.5bn. Secondary listings of GBS took place in
Italy and Germany over the quarter and plans are in place for further listings
in Europe and Asia later this year.
INDUSTRIAL MARKET
The increasingly positive trends in industrial demand for gold over the last
few years have continued, with particularly buoyant demand from the electronics
industry in the Far East for gold- based products rising 5% over the past three
years. Demand has been further driven by increased consumer demand for personal
computers and mobile phones, which contain varying amounts of gold. Despite the
best efforts by manufacturers to `thrift` on gold usage, demand for gold in
this sector has reached record highs. New advances in the potential industrial
uses of gold may also suggest a further strengthening in industrial demand, as
highlighted this quarter by the announcement of a new emission and pollution
control system containing gold.
PRODUCER HEDGING
Net producer de-hedging continued through the second quarter, albeit at a
slower pace. In addition to the Lihr Gold Limited announcement which occurred
early into the quarter, further announcements followed from Harmony and
Buenaventura. Finally in June, Newmont announced that it had closed out the
remaining 1.85Moz of its hedge book. This quarter also saw the announcement of
a new hedge put in place to secure debt capital for expansion at Western
Goldfields.
CURRENCIES
The Euro continued to gain against the dollar for the early part of the
quarter, reaching a high of /$1.37. A brief correction saw the dollar trade
back to a /$1.33 before concerns surrounding the sub-prime mortgage market in
the US re-surfaced, which caused the dollar to weaken again and it closed the
quarter at /$1.35.
Although for the quarter it showed a marginal depreciation of just over 1%,
subsequent movement has seen the dollar slide to record lows of /$1.38. Further
weakening of the dollar is expected, which should see gold trade up to the
higher levels seen in the second quarter.
The rand range traded throughout the quarter between levels of R6.83/$ to
R7.36/$, and managed to appreciate some 3% against the dollar closing at
R7.02/$. Much of this relative strength can be attributed to the weakness of
the dollar.
Positive economic factors, high interest rates and the weakening dollar
continue to support the Australian dollar, which strengthened by 6%
quarter-on-quarter to average A$/$0.83. The Australian dollar has now traded as
high as A$/$0.88, close to its twenty year high of A$/$0.89.
Hedge position
HEDGE POSITION
As at 30 June, the net delta hedge position was 8.75Moz or 272t, valued at a
quarter end spot gold price of $648.60/oz, which was $15/oz lower than that of
the previous quarter. This reflects a net delta position decrease of 0.84Moz or
26.2t during the quarter, as a result of delivering into maturing hedge
positions and entering into new long positions as a continuation of the hedge
reduction strategy.
The company continues to actively manage its hedge position in a
value-accretive manner, whilst actively reducing the overall hedge delta. To
this end, further long positions were entered into, and at 30 June long
positions were 31,374kg at $664/oz for 2007 and a further 6,758kg at $658/oz
for 2008, which are reflected in the hedge disclosure table.
The marked-to-market value of the hedge book as at 30 June 2007 was negative
$2.78bn (as at 31 March 2007:
negative $3.03bn).
This decrease in the marked-to-market value of the hedge book
quarter-on-quarter was primarily due to the lower gold price, although
movements in both the R/$ and A$/$ exchange rates also contributed.
For the quarter, the company received a price of $605/oz, which is $61/oz less
than the average spot price of $666/oz. The deficit between the received price
and the spot price is likely to remain at 8 to 10% for the remainder of the
year, provided the gold price continues to trade between $600 and $700/oz.
As at 30 July, the marked-to-market value of the hedge book was a negative
$2.843bn (negative R20.13), based on a gold price of $661/oz and exchange rates
of R7.081/$ and A$/$0.848 and the prevailing market interest rates and
volatilities at the time.
As indicated last quarter, the group has changed the method of allocating the
effect of hedging to individual mines. The effect of hedging is now reported
proportional to attributable gold sold and therefore the average received gold
price for each mine is similar to the group average received gold price.
Year 2007 2008 2009 2010
DOLLAR GOLD
Forward contracts Amount 10,825 22,817 21,738 14,462
(kg)
US$ per oz $307 $314 $316 $347
Forward contracts Amount
(Long) (kg) *31,374 *6,758
US$ per oz $664 $658
Put options Amount 873
purchased (kg)
US$ per oz $291
Put options sold Amount 21,934 11,555 3,748 1,882
(kg)
US$ per oz $647 $587 $530 $410
Call options Amount
purchased (kg) 8,085 8,568
US$ per oz $408 $428
Call options sold Amount 47,996 53,619 44,725 35,155
(kg)
US$ per oz $582 $492 $490 $478
RAND GOLD
Forward contracts Amount *1,595 933
(kg)
Rand per R161,323 R116,335
kg
Put options sold Amount 467
(kg)
Rand per R154,002
kg
Call options Amount 746
purchased (kg)
Rand per R173,119
kg
Call options sold Amount 1,213 2,986 2,986
(kg)
Rand per R167,992 R202,054 R216,522
kg
A DOLLAR GOLD
Forward contracts Amount *311 2,177 3,390 3,110
(kg)
A$ per oz A$2,191 A$681 A$670 A$705
Put options Amount 2,799
purchased (kg)
A$ per oz A$813
Put options sold Amount 6,843
(kg)
A$ per oz A$778
Call options Amount 3,110 1,244 3,110
purchased (kg)
A$ per oz A$680 A$694 A$712
Call options sold Amount 8,709
(kg)
A$ per oz A$810
Delta (kg) 15,723 (51,259) (65,432) (48,475)
** Total net gold: Delta (oz) 505,505 (1,648,013) (2,103,685) (1,558,505)
Year 2011 2012-2016 Total
DOLLAR GOLD
Forward contracts Amount 12,931 24,307 107,080
(kg)
US$ per oz $397 $418 $352
Forward contracts Amount
(Long) (kg) *38,132
US$ per oz $663
Put options Amount 873
purchased (kg)
US$ per oz $291
Put options sold Amount 1,882 5,645 46,646
(kg)
US$ per oz $420 $440 $579
Call options Amount
purchased (kg) 16,653
US$ per oz $418
Call options sold Amount 37,246 56,847 275,588
(kg)
US$ per oz $498 $583 $525
RAND GOLD
Forward contracts Amount *662
(kg)
Rand per R144,715
kg
Put options sold Amount 467
(kg)
Rand per R154,002
kg
Call options Amount 746
purchased (kg)
Rand per R173,119
kg
Call options sold Amount 2,986 10,171
(kg)
Rand per R230,990 R210,734
kg
A DOLLAR GOLD
Forward contracts Amount 8,366
(kg)
A$ per oz A$629
Put options Amount 2,799
purchased (kg)
A$ per oz A$813
Put options sold Amount 6,843
(kg)
A$ per oz A$778
Call options Amount 7,464
purchased (kg)
A$ per oz A$696
Call options sold Amount 8,709
(kg)
A$ per oz A$810
Delta (kg) (48,321) (74,438) (272,202)
** Total net gold: Delta (oz) (1,553,554) (2,393,234) (8,751,486)
Rounding of figures may result in computational discrepancies.
Year 2007 2008 2009
DOLLAR SILVER
21,772
Put options purchased Amount (kg) 43,545
$ per oz $7.40 $7.66
Put options sold Amount (kg) 21,772 43,545
$ per oz $5.93 $6.19
Call options sold Amount (kg) 21,772 43,545
$ per oz $8.40 $8.64
Year 2010 2011 2012-2016 Total
DOLLAR SILVER
Put options purchased Amount (kg) 65,317
$ per oz $7.57
Put options sold Amount (kg) 65,317
$ per oz $6.10
Call options sold Amount (kg) 65,317
$ per oz $8.56
* Indicates a long position resulting from forward purchase contracts. The
group enters into forward purchase contracts as part of its strategy to
actively manage and reduce the size of the hedge book.
** The Delta of the hedge position indicated is the equivalent gold position
that would have the same marked-to-market sensitivity for a small change in the
gold price. This is calculated using the Black-Scholes option formula with the
ruling market prices, interest rates and volatilities as at 30 June 2007.
The following table indicates the group`s currency hedge position at 30 June
2007
Year 2007 2008 2009
RAND DOLLAR (000)
Forward contracts Amount ($) 20,000
US$/R R7.30
Put options purchased Amount ($) 115,000
US$/R R7.32
Put options sold Amount ($) 170,000
US$/R R7.06
Call options sold Amount ($) 170,000
US$/R R7.55
A DOLLAR (000)
Forward contracts Amount ($) 70,000 20,000
A$/US$ $0.82 $0.73
Put options purchased Amount ($) 70,000 30,000
A$/US$ $0.79 $0.82
Put options sold Amount ($) 70,000 30,000
A$/US$ $0.82 $0.85
Call options sold Amount ($) 70,000 30,000
A$/US$ $0.77 $0.80
BRAZILIAN REAL (000)
Forward contracts Amount ($) 18,000 12,000
US$/BRL BRL2.06 BRL2.04
Put options purchased Amount ($) 6,000
US$/BRL BRL2.20
Put options sold Amount ($) 6,000
US$/BRL BRL2.05
Call options sold Amount ($) 6,000 8,000
US$/BRL BRL2.23 BRL2.20
Year 2010 2011 2012-2016 Total
RAND DOLLAR (000)
Forward contracts Amount ($) 20,000
US$/R R7.30
Put options purchased Amount ($) 115,000
US$/R R7.32
Put options sold Amount ($) 170,000
US$/R R7.06
Call options sold Amount ($) 170,000
US$/R R7.55
A DOLLAR (000)
Forward contracts Amount ($) 90,000
A$/US$ $0.80
Put options purchased Amount ($) 100,000
A$/US$ $0.79
Put options sold Amount ($) 100,000
A$/US$ $0.82
Call options sold Amount ($) 100,000
A$/US$ $0.78
BRAZILIAN REAL (000)
Forward contracts Amount ($) 30,000
US$/BRL BRL2.05
Put options purchased Amount ($) 6,000
US$/BRL BRL2.20
Put options sold Amount ($) 6,000
US$/BRL BRL2.05
Call options sold Amount ($) 14,000
US$/BRL BRL2.21
Derivative analysis by accounting designation as at 30 June 2007
Cash flow
Normal sale hedge
exempted accounted
US Dollars (millions)
Commodity option
contracts (468) -
Foreign exchange
option contracts - -
Forward sale commodity
contracts (929) (308)
Forward foreign exchange
contracts - 3
Interest rate swaps (28) -
Total hedging contracts (1,425) (305)
Option component of
convertible bonds - -
Total derivatives (1,425) (305)
Non-hedge
accounted Total
Commodity option
contracts (1,090) (1,558)
Foreign exchange
option contracts (4) (4)
Forward sale commodity
contracts 5 (1,232)
Forward foreign exchange
contracts 4 7
Interest rate swaps 32 4
Total hedging contracts (1,053) (2,783)
Option component of
convertible bonds (21) (21)
Total derivatives (1,074) (2,804)
Rounding of figures may result in computational discrepancies.
Exploration
Total exploration expenditure amounted to $41m ($18m brownfields, $23m
greenfields) during the second quarter of 2007, compared to $33m ($14m
brownfields, $19m greenfields) in the previous quarter.
BROWNFIELDS EXPLORATION
In South Africa, at Moab Khotsong, drilling of three surface boreholes intended
to further define the geological model of the lower mine continues. Borehole
MGR7 obtained two further intersections of the Vaal Reef and is complete, while
borehole MMB5 advanced 230m during the quarter and is approximately 300m from
intersecting the Vaal Reef. Borehole MZA9, a long deflection to test the ground
to the east has also commenced.
At Obuasi, in Ghana, surface borehole USDD2 reached a depth of 1,948m, while
the first of four planned long inclined boreholes to explore the ground between
70 level and 80 level will resume after the machine has been relocated.
At Iduapriem, resource conversion drilling commenced at Blocks 7 and 8, which
is the main mining area. A total of 35 holes were drilled during the quarter in
an effort to convert inferred resources to indicated resources.
In Australia, at Boddington mine, seven diamond drilling rigs were employed in
advancing Resource conversion and near-mine extension exploration. During the
quarter, approximately 45,142m of new drilling was completed from 53 holes.
This brings the total to 73,917m of drilling from 86 holes to date.
At Siguiri, in Guinea, drilling continued at the Sintroko prospect, which is
situated some 8km south of the existing operation and at Kintinian prospect,
situated 4km north of the mining operation. Infill and extension drilling will
continue at both prospects during the third quarter. At Block 2, diamond
drilling was completed at Foulata (45km from current infrastructure) and Saraya
(55km from current infrastructure). For the third quarter, infill drilling at
Foulata is planned.
Surface geochemical sampling began from four new exploration licenses that were
issued in December 2006 (which extend over a 25km area north of the current
mine) and in Block 2 during the quarter. An airborne electromagnetic survey
over all four blocks was completed and interpretation and target generation is
in progress.
At Geita, in Tanzania, exploration activities were concentrated on Matandani
Pit, Kukuluma Pit, A3 Central, Nyakabale-Prospect 30 and Lone Cone- Nyankanga
Gap. For the quarter, 2,303m of diamond drilling, 648m of reverse circulation
(RC) and 10,461m of air core drilling was achieved from 177 holes, comprising
follow-up work, investigation of extensions to known mineralisation,
reconnaissance work and metallurgical test drilling. Encouraging results were
obtained at Matandani and Area 3 Central, while the results from the
Nyakabale-Prospect 30 area were disappointing.
At Morila in Mali, two diamond holes were drilled to test the grade continuity
between the MSZ target (located within the current pit and western extension of
the ore- body) and the Samcline target (located about 400m west of the pit at a
depth of 400m to 500m). The first hole intersected significant values between
90m and 150m, while the results for the second hole are still expected.
The interpretive desktop phase for the regional exploration continues.
At Sadiola, phase eight drilling of the deep sulphides was completed and
Mineral Resource modelling is ongoing. At the satellite pits, a full review of
the geological potential is underway.
At Yatela, a 50m by 25m grid was drilled over the north- west extension. Final
assay results are awaited.
At Navachab, in Namibia, drilling from the North Pit area has been completed
and the results remain encouraging. Drilling of the Gecko North prospect
yielded some positive results, while the stream sediment sampling results over
the Mon Repos Thrust zones were disappointing. Stream sediment sampling will
continue during the third quarter to cover new targeted areas.
At Corrego do Sitio, in Brazil, new targets Paraiso and Paiol are being
drill-defined.
At Cripple Creek & Victor in the United States, drilling in the Mine Life
Extension Project area continues at a spacing of 30m to 60m, and the results to
date have been encouraging. Drilling was focused on the west side of the Altman
deposit as well as the Globe Hill deposit where metallurgical core was
collected. Development drilling continues in the South Cresson and Southwest
Cresson areas to define the final pit depths and refine the high wall designs.
GREENFIELDS EXPLORATION
Greenfields exploration activities continued in seven countries (Australia,
Colombia, the DRC, China, Laos, the Philippines, and Russia) during the second
quarter of 2007. A total of 74,727m of diamond and RC drilling was completed,
so as to drill test priority targets in Australia, the DRC, and Colombia.
In Australia, approval was given to advance the Tropicana JV Project (AngloGold
Ashanti 70%, Independence Group 30%) to the pre-feasibility study (PFS) phase.
The Tropicana PFS will focus on the economics of the open-pit mining of gold
mineralisation currently identified over a 4km strike length at Tropicana-
Havana. Reconnaissance exploration will continue, in parallel, throughout the
remainder of the Tropicana JV tenement holding.
RC and diamond drilling completed during the quarter at the Tropicana zone was
primarily focused on testing down-dip extensions to the known mineralisation.
Highlights obtained from this drilling (at greater than 1g/t cut off) included
13m @ 13.3g/t, 14m @ 2.85g/t, and 9m @ 4.37g/t. At Havana, additional infill
drilling was completed together with further testing of down-dip extensions to
known mineralization. Better results obtained from this drilling included 10m @
8.01g/t (northern Havana), 19m @ 2.48g/t, 8m @ 9.5g/t, and 6m @ 5.06g/t
(southern Havana), and 12m @ 3.52g/t and 5m @ 33.7g/t (including 1m @ 159g/t)
and 14m @ 3.85g/t from south of the main Havana zone.
Regional aircore drilling also tested several prospects in the Tropicana-Havana
region during the quarter. Results from this work, including 2m @ 3.26g/t from
south of Havana, define a number of very encouraging anomalies along strike
from both Tropicana and Havana.
Regional exploration and target generation activities continued in Colombia
during the second quarter. Drilling also continued on the bulk-tonnage gold
target at Gramalote, and results from first-pass drilling of the new La Colosa
gold-copper porphyry prospect is encouraging. A preliminary scoping study,
together with some additional infill drilling, will be undertaken at the
Gramalote project in the second half of 2007. Regarding the company`s joint
venture in Northern Colombia with what was previously Bema Gold, this joint
venture was specifically excluded from Bema Gold`s recent merger with Kinross
and Bema`s rights in the joint venture was subsequently transferred to B2 Gold.
Drill testing of the B2 joint venture prospect San Martin de Loba as well as
prospects El Carmen and Nechi (which are part of the joint venture with local
partner Mineros SA) was completed during the second quarter, with results
currently under review. A decision was also taken to farm-out the Miraflores
target (Quinchia District) to the B2 Gold JV for Northern Colombia.
Drilling continued in the Mongbwalu region of the north- eastern DRC with one
diamond rig and two RC rigs.Diamond drilling continued to focus on defining the
resource potential of the mineralised mylonite zone located to the south-east
of the past-producing Nzebi mine. The two RC rigs continued to evaluate the
shallow, open-pit resource potential of the Adidi North, Sokomutu and Pluto
sectors. A 50m by 50m drill grid has now been completed over the Adidi North
sector, with similar grids currently being drilled at Sokomuto and
Pluto. The planned 2007 drill programme at Mongbwalu will allow for the
calculation of an inferred gold resource by year-end, with a preliminary
scoping study on the economics of the Mongbwalu project expected to be
completed by the end of the second quarter 2008.
Regional target generation activities continued in Concession 40. A preliminary
interpretation of the 15,450 line kilometres of airborne magnetic and
radiometric data collected in the first quarter has been completed and has
resulted in the identification of a number of new exploration targets
regionally. Field evaluation of these targets is now underway. An additional
7,500 line kilometres of airborne magnetic and radiometric data will be
collected during the third quarter, together with a further 12,000 line
kilometres of airborne time-domain electromagnetic data.
In Russia, the formal documentation for the strategic alliance with Polymetal
is expected to be signed before the end of August 2007. All future exploration
and business development activities in Russia will be undertaken through the
Polymetal strategic alliance.
In China, the business licence for the co-operative joint venture (CJV) between
Yunlong Mining Company and AngloGold Ashanti Ltd at the Yili project, in the
Xinjiang Province, was issued. During the quarter, ground magnetic and
soil-sampling programmes were commenced at Yili, with completion anticipated by
the end of the third quarter.
At Red Valley in Qinghai, AngloGold Ashanti has commenced earning into the CJV
through the funding of $1.5m in exploration in 2007. A 5,000m drill programme
has been proposed to test for high-grade gold mineralisation within the
regional-scale duplex identified during the 2006 field programme.
Field work is also continuing on two new projects in western China, where terms
for the proposed CJV have been agreed and the application for the business
licences is in progress.
In the Philippines, work continues on finalising the Mapawa and Outer Siana
joint venture agreements with Red 5 Limited. Limited field mapping and rock
chip sampling was also carried out in the southern portion of the Mapawa JV
area.
Under the Oxiana Limited JV in Laos, regional reconnaissance sampling and
mapping programmes were undertaken in six areas defined from the previous
targeting exercises in the Truongson and Luang Prabang Fold Belts. Anomalous
gold values were returned in stream sediment and rock chip samples from two of
these areas, with anomalous Copper values being identified in a third area.
Field work is continuing in these and other target areas.
Group income statement
Quarter Quarter
ended ended
June March
2007 2007
SA Rand million Notes Unaudited Unaudited
Revenue 2 5,461 5,882
Gold income 5,222 5,664
Cost of sales 3 (4,132) (4,223)
Profit (loss) on non-hedge derivatives and
other commodity contracts 840 (662)
Gross profit (loss) 1,930 778
Corporate administration and other
expenses (216) (208)
Market development costs (26) (23)
Exploration costs (204) (176)
Other operating expenses 4 (43) (47)
Operating special items 5 86 14
Operating profit (loss) 1,527 339
Interest received 62 73
Exchange (loss) gain (14) 3
Fair value adjustment on option component
of convertible bond 223 135
Finance costs and unwinding of obligations (220) (200)
Share of associates` loss (51) (4)
Profit (loss) before taxation 1,527 346
Taxation 6 (371) (434)
Profit (loss) after taxation from
continuing
operations 1,155 (88)
Discontinued operations
Loss for the period from discontinued
operations 7 (4) (6)
Profit (loss) for the period 1,151 (94)
Allocated as follows:
Equity shareholders 1,083 (150)
Minority interest 68 56
Basic earnings (loss) per ordinary share
(cents) 1,151 (94)
Profit (loss) from continuing operations 1 386 (51)
Loss from discontinued operations 1 (1) (2)
Profit (loss) 385 (53)
Diluted earnings (loss) per ordinary
share (cents)
Profit (loss) from continuing operations 2 385 (51)
Loss from discontinued operations 2 (1) (2)
Profit (loss) 384 (53)
Dividends 3
- Rm
- cents per Ordinary share
- cents per E Ordinary share
Quarter Six months Six months
ended ended ended
June June June
2006 2007 2006
SA Rand million Unaudited Unaudited Unaudited
Revenue 4,966 11,343 9,422
Gold income 4,798 10,886 9,044
Cost of sales (3,546) (8,356) (7,018)
Profit (loss) on non-hedge
derivatives and
other commodity contracts (1,847) 178 (2,947)
Gross profit (loss) (594) 2,708 (921)
Corporate administration and other
expenses (140) (424) (267)
Market development costs (24) (49) (50)
Exploration costs (116) (380) (189)
Other operating expenses (39) (91) (69)
Operating special items 14 101 24
Operating profit (loss) (900) 1,866 (1,472)
Interest received 59 135 89
Exchange (loss) gain (7) (12) (11)
Fair value adjustment on option
component of
convertible bond 158 358 (75)
Finance costs and unwinding of
obligations (209) (419) (419)
Share of associates` loss (1) (54) (5)
Profit (loss) before taxation (900) 1,873 (1,892)
Taxation (86) (805) (125)
Profit (loss) after taxation from
continuing
operations (986) 1,067 (2,017)
Discontinued operations
Loss for the period from
discontinued operations (4) (10) (11)
Profit (loss) for the period (989) 1,057 (2,028)
Allocated as follows:
Equity shareholders (1,047) 933 (2,126)
Minority interest 58 124 98
Basic earnings (loss) per ordinary
share (cents) (989) 1,057 (2,028)
Profit (loss) from continuing
operations 1 (382) 335 (786)
Loss from discontinued operations 1 (1) (3) (4)
Profit (loss) (383) 332 (790)
Diluted earnings (loss) per
ordinary share (cents)
Profit (loss) from continuing
operations 2 (382) 334 (784)
Loss from discontinued operations 2 (1) (3) (4)
Profit (loss) (383) 331 (788)
Dividends 3
- Rm 251 578
- cents per Ordinary share 90 210
- cents per E Ordinary share 45 -
1 Calculated on the basic weighted average number of ordinary shares.
2 Calculated on the diluted weighted average number of ordinary shares.
3 The current period is only indicative.
Rounding of figures may results in computational discrepancies.
Group income statement
Quarter Quarter
ended ended
June March
2007 2007
US Dollar million Notes Unaudited Unaudited
Revenue 2 773 813
Gold income 739 783
Cost of sales 3 (585) (584)
Profit (loss) on non-hedge derivatives
and other commodity contracts 77 (51)
Gross profit (loss) 231 147
Corporate administration and other
expenses (31) (29)
Market development costs (4) (3)
Exploration costs (29) (24)
Other operating expenses 4 (6) (7)
Operating special items 5 12 2
Operating profit (loss) 174 86
Interest received 9 10
Exchange loss (2) -
Fair value adjustment on option component
of convertible bond 32 19
Finance costs and unwinding of obligations (31) (28)
Share of associates` loss (7) (1)
Profit (loss) before taxation 174 88
Taxation 6 (52) (60)
Profit (loss) after taxation from
continuing operations 121 28
Discontinued operations
Loss for the period from discontinued
operations 7 (1) (1)
Profit (loss) for the period 121 27
Allocated as follows:
Equity shareholders 111 19
Minority interest 10 8
121 27
Basic earnings (loss) per ordinary share
(cents)
Profit (loss) from continuing operations 1 39 7
Loss from discontinued operations 1 - -
Profit (loss) 39 7
Diluted earnings (loss) per ordinary
share (cents)
Profit (loss) from continuing operations 2 39 7
Loss from discontinued operations 2 - -
Profit (loss) 39 7
Dividends 3
- $m
- cents per Ordinary share
- cents per E Ordinary share
Quarter Six months Six months
ended ended ended
June June June
2006 2007 2006
US Dollar million Unaudited Unaudited Unaudited
Revenue 766 1,586 1,490
Gold income 740 1,522 1,430
Cost of sales (547) (1,169) (1,112)
Profit (loss) on non-hedge
derivatives
and other commodity contracts (169) 25 (357)
Gross profit (loss) 25 378 (39)
Corporate administration and
other expenses (22) (59) (42)
Market development costs (4) (7) (8)
Exploration costs (18) (53) (30)
Other operating expenses (7) (13) (10)
Operating special items 2 14 4
Operating profit (loss) (22) 260 (125)
Interest received 9 19 14
Exchange loss (1) (2) (2)
Fair value adjustment on option
component of convertible bond 25 51 (14)
Finance costs and unwinding of
obligations (32) (59) (67)
Share of associates` loss - (8) (1)
Profit (loss) before taxation (22) 261 (194)
Taxation (23) (112) (29)
Profit (loss) after taxation
from continuing operations (45) 149 (223)
Discontinued operations
Loss for the period from
discontinued operations (1) (1) (2)
Profit (loss) for the period (45) 148 (225)
Allocated as follows:
Equity shareholders (54) 131 (241)
Minority interest 9 17 16
(45) 148 (225)
Basic earnings (loss) per
ordinary share (cents)
Profit (loss) from continuing
operations 1 (20) 47 (89)
Loss from discontinued
operations 1 - - (1)
Profit (loss) (20) 47 (90)
Diluted earnings (loss) per
ordinary share (cents)
Profit (loss) from continuing
operations 2 (20) 46 (89)
Loss from discontinued
operations 2 - - (1)
Profit (loss) (20) 46 (89)
Dividends 3
- $m 36 81
- cents per Ordinary share 13 29
- cents per E Ordinary share 7 -
1 Calculated on the basic weighted average number of ordinary shares.
2 Calculated on the diluted weighted average number of ordinary shares.
3 Dividends are translated at actual rates on date of payment. The current
period is only indicative.
Rounding of figures may results in computational discrepancies.
Group balance sheet
As at As at
June March
2007 2007
SA Rand million Notes Unaudited Unaudited
ASSETS
Non-current assets
Tangible assets 44,551 44,282
Intangible assets 3,041 3,073
Investments in associates 245 371
Other investments 956 926
Inventories 2,103 2,167
Trade and other receivables 452 452
Derivatives - 22
Deferred taxation 417 444
Other non-current assets 313 340
52,078 52,077
Current assets
Inventories 4,112 3,553
Trade and other receivables 1,535 1,610
Derivatives 3,383 4,651
Current portion of other non-current
assets 5 5
Cash restricted for use 166 272
Cash and cash equivalents 2,792 2,919
11,993 13,010
Non-current assets held for sale 203 113
12,196 13,123
TOTAL ASSETS 64,274 65,200
EQUITY AND LIABILITIES
Share capital and premium 10 22,237 22,196
Retained earnings and other reserves 11 (34) (961)
Shareholders` equity 22,203 21,235
Minority interests 12 475 481
Total equity 22,678 21,716
Non-current liabilities
Borrowings 9,293 9,010
Environmental rehabilitation and other
provisions 2,929 2,927
Provision for pension and post-retirement
benefits 1,201 1,193
Trade, other payables and deferred income 131 138
Derivatives 1,183 1,827
Deferred taxation 7,821 7,826
22,559 22,921
Current liabilities
Current portion of borrowings 2,056 1,725
Trade, other payables and deferred income 3,880 4,003
Derivatives 11,869 13,384
Taxation 1,232 1,451
19,037 20,564
Total liabilities 41,596 43,484
TOTAL EQUITY AND LIABILITIES 64,274 65,200
Net asset value - cents per share 8,072 7,733
As at As at
June December
2006 2006
SA Rand million Unaudited Audited
ASSETS
Non-current assets
Tangible assets 41,238 42,382
Intangible assets 2,873 2,909
Investments in associates 312 300
Other investments 662 884
Inventories 1,673 2,006
Trade and other receivables 164 405
Derivatives 73 45
Deferred taxation 368 432
Other non-current assets 95 313
47,458 49,676
Current assets
Inventories 3,181 3,424
Trade and other receivables 1,606 1,300
Derivatives 5,941 4,546
Current portion of other non-current assets 11 5
Cash restricted for use 21 75
Cash and cash equivalents 2,450 3,467
13,211 12,817
Non-current assets held for sale 100 123
13,311 12,940
TOTAL ASSETS 60,769 62,616
EQUITY AND LIABILITIES
Share capital and premium 22,065 22,083
Retained earnings and other reserves (3,141) (1,188)
Shareholders` equity 18,924 20,895
Minority interests 419 436
Total equity 19,343 21,331
Non-current liabilities
Borrowings 9,375 9,963
Environmental rehabilitation and other provisions 2,579 2,785
Provision for pension and post-retirement benefits 1,263 1,181
Trade, other payables and deferred income 109 150
Derivatives 3,484 1,984
Deferred taxation 7,201 7,722
24,011 23,785
Current liabilities
Current portion of borrowings 465 413
Trade, other payables and deferred income 3,118 3,701
Derivatives 12,723 12,152
Taxation 1,110 1,234
17,416 17,500
Total liabilities 41,427 41,285
TOTAL EQUITY AND LIABILITIES 60,769 62,616
Net asset value - cents per share 7,030 7,607
Rounding of figures may results in computational discrepancies.
Group balance sheet
As at As at
June March
2007 2007
US Dollar million Notes Unaudited Unaudited
ASSETS
Non-current assets
Tangible assets 6,350 6,069
Intangible assets 433 421
Investments in associates 35 51
Other investments 136 127
Inventories 300 297
Trade and other receivables 64 62
Derivatives - 3
Deferred taxation 59 61
Other non-current assets 45 47
7,423 7,138
Current assets
Inventories 586 487
Trade and other receivables 219 220
Derivatives 482 638
Current portion of other non-current
assets 1 1
Cash restricted for use 24 37
Cash and cash equivalents 398 400
1,709 1,782
Non-current assets held for sale 29 16
1,738 1,798
TOTAL ASSETS 9,161 8,936
EQUITY AND LIABILITIES
Share capital and premium 10 3,169 3,042
Retained earnings and other reserves 11 (5) (131)
Shareholders` equity 3,165 2,911
Minority interests 12 68 66
Total equity 3,232 2,977
Non-current liabilities
Borrowings 1,325 1,235
Environmental rehabilitation and other
provisions 417 401
Provision for pension and post-retirement
benefits 171 164
Trade, other payables and deferred income 19 19
Derivatives 169 250
Deferred taxation 1,115 1,073
3,215 3,142
Current liabilities
Current portion of borrowings 293 236
Trade, other payables and deferred income 553 548
Derivatives 1,692 1,834
Taxation 176 199
2,713 2,818
Total liabilities 5,929 5,959
TOTAL EQUITY AND LIABILITIES 9,161 8,936
Net asset value - cents per share 1,150 1,060
As at As at
June December
2006 2006
US Dollar million Unaudited Audited
ASSETS
Non-current assets
Tangible assets 5,772 6,054
Intangible assets 402 415
Investments in associates 44 43
Other investments 93 126
Inventories 234 287
Trade and other receivables 23 58
Derivatives 10 6
Deferred taxation 51 62
Other non-current assets 13 44
6,642 7,095
Current assets
Inventories 445 489
Trade and other receivables 225 185
Derivatives 832 649
Current portion of other non-current assets 2 1
Cash restricted for use 3 11
Cash and cash equivalents 343 495
1,849 1,830
Non-current assets held for sale 14 18
1,863 1,848
TOTAL ASSETS 8,505 8,943
EQUITY AND LIABILITIES
Share capital and premium 3,088 3,154
Retained earnings and other reserves (440) (169)
Shareholders` equity 2,648 2,985
Minority interests 59 62
Total equity 2,707 3,047
Non-current liabilities
Borrowings 1,312 1,423
Environmental rehabilitation and other provisions 361 398
Provision for pension and post-retirement benefits 177 169
Trade, other payables and deferred income 15 21
Derivatives 488 283
Deferred taxation 1,008 1,103
3,361 3,397
Current liabilities
Current portion of borrowings 65 59
Trade, other payables and deferred income 436 528
Derivatives 1,781 1,736
Taxation 155 176
2,437 2,499
Total liabilities 5,798 5,896
TOTAL EQUITY AND LIABILITIES 8,505 8,943
Net asset value - cents per share 984 1,087
Rounding of figures may results in computational discrepancies.
Group cash flow statement
Quarter Quarter Quarter
ended ended ended
June March June
2007 2007 2006
SA Rand million Unaudited Unaudited Unaudited
Cash flow from operating activities
Receipts from customers 5,551 5,629 5,006
Payments to suppliers and employees (3,869) (3,537) (2,879)
Cash generated from operations 1,682 2,092 2,127
Cash (utilised) generated by
discontinued operations (9) (10) 14
Taxation paid (545) (332) (178)
Net cash inflow from operating
activities 1,128 1,750 1,963
Cash flows from investing activities
Capital expenditure (1,764) (1,417) (1,168)
Acquisition of assets (287) - -
Proceeds from disposal of tangible
assets 91 17 54
Proceeds from disposal of assets of
discontinued operations 6 2 22
Other investments acquired (16) (40) (13)
Associate loans and acquisitions 64 (63) (63)
Proceeds from disposal of investments 26 21 19
Cash restricted for use 101 (189) -
Interest received 49 60 44
Loans advanced 18 (26) -
Repayment of loans advanced 8 1 26
Net cash outflow from investing
activities (1,702) (1,634) (1,079)
Cash flows from financing activities
Proceeds from issue of share capital 36 104 3,026
Share issue expenses (4) - (32)
Proceeds from borrowings 730 196 81
Repayment of borrowings (182) (143) (2,973)
Finance costs (33) (212) (84)
Dividends paid (63) (694) (70)
Net cash inflow (outflow) from
financing activities 485 (749) (52)
Net (decrease) increase in cash and
cash equivalents (89) (632) 832
Translation (38) 84 200
Cash and cash equivalents at
beginning of period 2,919 3,467 1,419
Net cash and cash equivalents at end
of period 2,792 2,919 2,450
Cash generated from operations
Profit (loss) before taxation 1,527 346 (900)
Adjusted for:
Movement on non-hedge derivatives and
other commodity contracts (195) 984 2,584
Amortisation of tangible assets 1,009 948 951
Finance costs and unwinding of
obligations 220 200 209
Deferred stripping (131) (100) (126)
Interest receivable (62) (73) (59)
Operating special items (86) (14) 18
Amortisation of intangible assets 3 4 3
Fair value adjustment on option
components of convertible bond (223) (135) (158)
Environmental, rehabilitation and
other expenditure (14) (14) (9)
Other non-cash movements 181 146 (132)
Movements in working capital (547) (201) (254)
1,682 2,092 2,127
Movements in working capital
Increase in inventories (494) (326) (1,019)
Decrease (increase) in trade and
other receivables 79 (288) 70
(Decrease) increase in trade and
other payables (131) 413 695
(547) (201) (254)
Six months Six months
ended ended
June June
2007 2006
SA Rand million Unaudited Unaudited
Cash flow from operating activities
Receipts from customers 11,180 9,806
Payments to suppliers and employees (7,406) (6,125)
Cash generated from operations 3,774 3,681
Cash (utilised) generated by discontinued
operations (19) 3
Taxation paid (877) (269)
Net cash inflow from operating activities 2,878 3,415
Cash flows from investing activities
Capital expenditure (3,181) (2,130)
Acquisition of assets (287) -
Proceeds from disposal of tangible assets 108 65
Proceeds from disposal of assets of discontinued
operations 8 32
Other investments acquired (56) (17)
Associate loans and acquisitions 1 (63)
Proceeds from disposal of investments 48 36
Cash restricted for use (88) 30
Interest received 110 62
Loans advanced (8) -
Repayment of loans advanced 9 28
Net cash outflow from investing activities (3,336) (1,956)
Cash flows from financing activities
Proceeds from issue of share capital 140 3,049
Share issue expenses (4) (32)
Proceeds from borrowings 926 410
Repayment of borrowings (326) (3,342)
Finance costs (245) (336)
Dividends paid (756) (253)
Net cash inflow (outflow) from financing
activities (264) (503)
Net (decrease) increase in cash and cash
equivalents (721) 956
Translation 46 167
Cash and cash equivalents at beginning of period 3,467 1,328
Net cash and cash equivalents at end of period 2,792 2,450
Cash generated from operations
Profit (loss) before taxation 1,873 (1,892)
Adjusted for:
Movement on non-hedge derivatives and other
commodity contracts 788 4,166
Amortisation of tangible assets 1,957 1,810
Finance costs and unwinding of obligations 419 419
Deferred stripping (231) (233)
Interest receivable (135) (89)
Operating special items (101) 8
Amortisation of intangible assets 7 6
Fair value adjustment on option components of
convertible bond (358) 75
Environmental, rehabilitation and other
expenditure (28) (64)
Other non-cash movements 329 18
Movements in working capital (747) (543)
3,774 3,681
Movements in working capital
Increase in inventories (820) (1,174)
Decrease (increase) in trade and other receivables (209) (10)
(Decrease) increase in trade and other payables 282 640
(747) (543)
Rounding of figures may results in computational discrepancies.
Group cash flow statement
Quarter Quarter Quarter
ended ended ended
June March June
2007 2007 2006
US Dollar million Unaudited Unaudited Unaudited
Cash flow from operating activities
Receipts from customers 783 780 777
Payments to suppliers and employees (545) (492) (449)
Cash generated from operations 238 288 328
Cash (utilised) generated by
discontinued operations (1) (1) 2
Taxation paid (77) (46) (28)
Net cash inflow from operating
activities 160 240 302
Cash flows from investing activities
Capital expenditure (249) (196) (181)
Acquisition of assets (40) - -
Proceeds from disposal of tangible
assets 13 2 8
Proceeds from disposal of assets of
discontinued operations 1 - 4
Other investments acquired (2) (5) (2)
Associate loans and acquisitions 9 (9) (10)
Proceeds from disposal of investments 4 3 3
Cash restricted for use 14 (26) -
Interest received 7 8 7
Loans advanced 2 (4) -
Repayment of loans advanced 1 - 4
Net cash outflow from investing
activities (241) (226) (167)
Cash flows from financing activities
Proceeds from issue of share capital 5 14 505
Share issue expenses (1) - (5)
Proceeds from borrowings 103 27 11
Repayment of borrowings (26) (20) (493)
Finance costs (5) (29) (13)
Dividends paid (9) (94) (11)
Net cash inflow (outflow) from
financing activities 67 (102) (5)
Net (decrease) increase in cash and
cash equivalents (14) (88) 130
Translation 11 (8) (18)
Cash and cash equivalents at
beginning of period 400 495 230
Net cash and cash equivalents at end
of period 398 400 343
Cash generated from operations
Profit (loss) profit before taxation 174 88 (22)
Adjusted for:
Movement on non-hedge derivatives and
other commodity contracts 15 96 281
Amortisation of tangible assets 143 131 147
Finance costs and unwinding of
obligations 31 28 32
Deferred stripping (19) (14) (15)
Interest receivable (9) (10) (9)
Operating special items (12) (2) 2
Amortisation of intangible assets - - -
Fair value adjustment on option
components of convertible bond (32) (19) (25)
Environmental, rehabilitation and
other expenditure (2) (2) (1)
Other non-cash movements 25 22 (22)
Movements in working capital (76) (30) (40)
238 288 328
Movements in working capital
Increase in inventories (102) (14) (60)
Decrease (increase) in trade and
other receivables 3 (32) 47
Increase (decrease) in trade and
other payables 23 16 (27)
(76) (30) (40)
Six months Six months
ended ended
June June
2007 2006
US Dollar million Unaudited Unaudited
Cash flow from operating activities
Receipts from customers 1,563 1,553
Payments to suppliers and employees (1,037) (972)
Cash generated from operations 526 581
Cash (utilised) generated by discontinued
operations (3) -
Taxation paid (123) (43)
Net cash inflow from operating activities 400 538
Cash flows from investing activities
Capital expenditure (446) (337)
Acquisition of assets (40) -
Proceeds from disposal of tangible assets 15 10
Proceeds from disposal of assets of discontinued
operations 1 5
Other investments acquired (8) (3)
Associate loans and acquisitions - (10)
Proceeds from disposal of investments 6 6
Cash restricted for use (12) 5
Interest received 15 10
Loans advanced (1) -
Repayment of loans advanced 1 4
Net cash outflow from investing activities (467) (309)
Cash flows from financing activities
Proceeds from issue of share capital 19 509
Share issue expenses (1) (5)
Proceeds from borrowings 130 65
Repayment of borrowings (46) (553)
Finance costs (34) (53)
Dividends paid (103) (40)
Net cash inflow (outflow) from financing
activities (34) (77)
Net (decrease) increase in cash and cash
equivalents (101) 152
Translation 4 (17)
Cash and cash equivalents at beginning of period 495 209
Net cash and cash equivalents at end of period 398 343
Cash generated from operations
Profit (loss) profit before taxation 261 (194)
Adjusted for:
Movement on non-hedge derivatives and other
commodity contracts 111 547
Amortisation of tangible assets 274 286
Finance costs and unwinding of obligations 59 67
Deferred stripping (33) (33)
Interest receivable (19) (14)
Operating special items (14) -
Amortisation of intangible assets 1 1
Fair value adjustment on option components of
convertible bond (51) 14
Environmental, rehabilitation and other
expenditure (5) (19)
Other non-cash movements 46 12
Movements in working capital (106) (86)
526 581
Movements in working capital
Increase in inventories (115) (100)
Decrease (increase) in trade and other receivables (29) 27
Increase (decrease) in trade and other payables 39 (13)
(106) (86)
Rounding of figures may results in computational discrepancies.
Statement of recognised income and expense
Six months Year Six months
ended ended ended
June December June
2007 2006 2006
Unaudited Audited Unaudited
SA Rand million
Actuarial gain on pension
and post-retirement
benefits - 283 -
Net loss on cash flow
hedges removed from equity
and reported in income 540 1,274 614
Net loss on cash flow hedges (67) (1,604) (1,724)
Gain on available-for-sale
financial assets - 78 8
Deferred taxation on items
above (74) 50 343
Net exchange translation
differences 376 2,292 2,467
Net income recognised
directly in equity 775 2,373 1,708
Profit (loss) for the year 1,057 (385) (2,028)
Total recognised income
(expense) for the period 1,832 1,988 (320)
Attributable to:
Equity shareholders 1,705 1,755 (453)
Minority interest 127 233 133
1,832 1,988 (320)
US Dollar million
Actuarial gain on pension
and post-retirement
benefits - 42 -
Net loss on cash flow
hedges removed from equity
and reported in income 78 217 96
Net loss on cash flow hedges (10) (229) (242)
Gain on available-for-sale
financial assets - 12 1
Deferred taxation on items
above (11) 8 40
Net exchange translation
differences 50 281 327
Net income recognised
directly in equity 107 331 222
Profit (loss) for the year 148 (14) (225)
Total recognised income
(expense) for the period 255 317 (3)
Attributable to:
Equity shareholders 237 289 (17)
Minority interest 18 28 14
255 317 (3)
Rounding of figures may results in computational discrepancies.
Notes
for the quarter and six months ended 30 June 2007
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 2006 and
revised International Financial Reporting Standards (IFRS) which are effective
1 January 2007, where applicable.
The financial statements of AngloGold Ashanti Limited have been prepared in
compliance with IAS34, JSE Listings Requirements and in the manner required by
the South African Companies Act, 1973 for the preparation of financial
information of the group for the quarter and six months ended 30 June 2007.
2. Revenue
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Revenue consists of the
following principal
categories:
Gold income 5,222 5,664 4,798 10,886 9,044
By-products (note 3) 178 145 109 323 289
Interest received 62 73 59 135 89
5,461 5,882 4,966 11,343 9,422
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Revenue consists of the
following principal
categories:
Gold income 739 783 740 1,522 1,430
By-products (note 3) 25 20 17 45 46
Interest received 9 10 9 19 14
773 813 766 1,586 1,490
3. Cost of sales
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Cash operating costs (3,319) (3,199) (2,853) (6,517) (5,496)
By-products (note 2) 178 145 109 323 289
(3,141) (3,054) (2,744) (6,194) (5,207)
Other cash costs (165) (177) (137) (342) (254)
Total cash costs (3,305) (3,231) (2,881) (6,537) (5,461)
Retrenchment costs (9) (7) (13) (16) (25)
Rehabilitation and other
non-cash costs (19) (20) (25) (39) (64)
Production costs (3,333) (3,258) (2,919) (6,591) (5,550)
Amortisation of tangible
assets (1,009) (948) (951) (1,957) (1,810)
Amortisation of
intangible assets (3) (4) (3) (7) (6)
Total production costs (4,346) (4,210) (3,873) (8,556) (7,366)
Inventory change 214 (14) 327 200 348
(4,132) (4,223) (3,546) (8,356) (7,018)
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Cash operating costs (469) (443) (441) (912) (871)
By-products (note 2) 25 20 17 45 46
(444) (423) (424) (867) (825)
Other cash costs (23) (25) (21) (48) (40)
Total cash costs (468) (448) (445) (915) (865)
Retrenchment costs (1) (1) (2) (2) (4)
Rehabilitation and other
non-cash costs (3) (3) (4) (5) (10)
Production costs (471) (451) (451) (923) (880)
Amortisation of tangible
assets (143) (131) (147) (274) (286)
Amortisation of
intangible assets - - - (1) (1)
Total production costs (615) (583) (599) (1,198) (1,167)
Inventory change 30 (2) 52 28 56
(585) (584) (547) (1,169) (1,112)
Rounding of figures may result in computational discrepancies.
4. Other operating expenses
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Pension and medical defined
benefit provisions (25) (25) (19) (50) (40)
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 (6) (21) (18) (27) (26)
Other (12) (1) (2) (14) (3)
(43) (47) (39) (91) (69)
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Pension and medical defined
benefit provisions (3) (4) (4) (7) (6)
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 (1) (3) (3) (4) (4)
Other (2) - - (2) -
(6) (7) (7) (13) (10)
5. Operating special items
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Under provision of indirect
taxes (6) - (33) (6) (25)
Impairment of tangible
assets (note 8) - (1) - (1) (3)
Recovery of loan - 21 - 21 -
Profit on disposal of assets
(note 8) 92 (6) 47 86 52
86 14 14 101 24
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Under provision of indirect
taxes (1) - (5) (1) (4)
Impairment of tangible
assets (note 8) - - - - -
Recovery of loan - 3 - 3 -
Profit on disposal of assets
(note 8) 13 (1) 7 12 8
12 2 2 14 4
6. Taxation
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Current tax
Normal taxation (333) (442) (369) (775) (592)
Disposal of tangible assets
(note 8) (18) (4) (3) (22) (6)
Over (under) provision prior
year 23 (67) - (44) -
(328) (513) (372) (841) (598)
Deferred taxation
Temporary differences 31 1 (140) 32 (156)
Unrealised non-hedge
derivatives and other
commodity contracts 22 82 426 104 628
Impairment and disposal of
tangible assets (note 8) (6) (4) - (10) -
Change in estimated
deferred taxation (90) - - (90) -
(43) 79 286 36 473
Total taxation (371) (434) (86) (805) (125)
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Current tax
Normal taxation (46) (61) (56) (108) (92)
Disposal of tangible assets
(note 8) (3) (1) - (3) (1)
Over (under) provision prior
year 3 (9) - (6) -
(46) (71) (56) (117) (93)
Deferred taxation
Temporary differences 4 1 (22) 4 (24)
Unrealised non-hedge
derivatives and other
commodity contracts 4 11 55 15 88
Impairment and disposal of
tangible assets (note 8) (1) (1) - (1) -
Change in estimated
deferred taxation (13) - - (13) -
(6) 11 33 5 64
Total taxation (52) (60) (23) (112) (29)
Rounding of figures may result in computational discrepancies.
7. Discontinued operations
The Ergo surface dump reclamation, which forms part of the South African
operations, has been discontinued as the operation has reached the end of its
useful life. The results of Ergo are presented below:
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Gold income 2 2 10 4 16
Cost of Sales (5) (5) (8) (10) (14)
Gross (loss) profit (2) (3) 2 (6) 2
Taxation (2) (3) (5) (4) (13)
Loss from discontinued
operations (4) (6) (4) (10) (11)
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Gold income - - 2 1 3
Cost of Sales (1) (1) (1) (1) (2)
Gross (loss) profit (1) (1) - (1) 1
Taxation - - (1) (1) (2)
Loss from discontinued
operations (1) (1) (1) (1) (2)
8. Headline earnings (loss)
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
The profit (loss)
attributable
to equity shareholders has
been adjusted by the
following to arrive at
headline earnings (loss):
Profit (loss)
attributable to
equity shareholders 1,08 (150) (1,047) 933 (2,126)
Impairment of tangible
assets (note 5) - 1 - 1 3
(Profit) loss on
disposal of
assets (note 5) (92) 6 (47) (86) (52)
Impairment of associate 50 - - 50 -
Taxation on items above -
current portion (note 6) 18 4 3 22 6
Taxation on items above -
deferred portion (note 6) 6 4 - 10 -
Net loss from discontinued
operations (note 7) 4 6 4 10 11
Headline earnings (loss) 1,070 (130) (1,086) 940 (2,159)
Cents per share (1)
Headline earnings (loss) 380 (46) (398) 334 (802)
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
The profit (loss) attributable
to equity shareholders has
been adjusted by the
following to arrive at
headline earnings (loss):
Profit (loss)
attributable to
equity shareholders 111 19 (54) 131 (241)
Impairment of tangible
assets (note 5) - - - - -
(Profit) loss on
disposal of
assets (note 5) (13) 1 (7) (12) (8)
Impairment of associate 7 - - 7 -
Taxation on items above -
current portion (note 6) 3 1 - 3 1
Taxation on items above -
deferred portion (note 6) 1 1 - 1 -
Net loss from discontinued
operations (note 7) 1 1 1 1 2
Headline earnings (loss) 109 22 (60) 132 (245)
Cents per share (1)
Headline earnings (loss) 39 8 (22) 47 (91)
(1) Calculated on the basic weighted average number of ordinary shares.
Rounding of figures may result in computational discrepancies.
9. Shares
Quarter ended
Jun Mar Jun
2007 2007 2006
Authorised:
Ordinary shares of 25 SA cents
each 400,000,000 400,000,000 400,000,000
E ordinary shares of 25 SA
cents each 4,280,000 4,280,000 -
A redeemable preference shares
of 50 SA cents each 2,000,000 2,000,000 2,000,000
B redeemable preference shares
of 1 SA cent each 5,000,000 5,000,000 5,000,000
Issued and fully-paid:
Ordinary shares in issue 276,836,030 276,688,382 275,168,569
E ordinary shares in issue 4,115,930 4,149,230 -
Total ordinary shares: 280,951,960 280,837,612 275,168,569
A redeemable preference shares 2,000,000 2,000,000 2,000,000
B redeemable preference shares 778,896 778,896 778,896
In calculating the diluted
number of ordinary shares
outstanding for the year, the
following were taken into
consideration:
Ordinary shares 276,792,157 276,426,639 273,028,361
E Ordinary shares 4,152,725 4,167,212 -
Fully vested options 308,961 600,219 -
Weighted average number of
shares 281,253,843 281,194,070 273,028,361
Dilutive potential of share
options 568,077 641,741 421,807
Diluted number of ordinary
shares 281,821,920 281,835,811 273,450,168
Six months ended
Jun Jun
2007 2006
Authorised:
Ordinary shares of 25 SA cents each 400,000,000 400,000,000
E ordinary shares of 25 SA cents each 4,280,000 -
A redeemable preference shares of 50 SA cents
each 2,000,000 2,000,000
B redeemable preference shares of 1 SA cent each 5,000,000 5,000,000
Issued and fully-paid:
Ordinary shares in issue 276,836,030 275,168,569
E ordinary shares in issue 4,115,930 -
Total ordinary shares: 280,951,960 275,168,569
A redeemable preference shares 2,000,000 2,000,000
B redeemable preference shares 778,896 778,896
In calculating the diluted number of ordinary
shares outstanding for the year, the following
were taken into consideration:
Ordinary shares 276,619,448 269,068,365
E Ordinary shares 4,150,888 -
Fully vested options 359,980 -
Weighted average number of shares 281,130,316 269,068,365
Dilutive potential of share options 619,872 563,558
Diluted number of ordinary shares 281,750,188 269,631,923
10. Ordinary share capital and premium
As at
Jun Mar Jun Dec Jun
2007 2007 2006 2006 2007
Unaudited Unaudited Unaudited Audited Unaudited
SA Rand million
Balance at beginning of
period 23,045 23,045 19,362 19,362 3,292
Ordinary shares issued 146 109 3,015 3,330 19
E ordinary shares
(cancelled) issued (9) (4) - 353 (1)
Translation - - - - (7)
Sub-total 23,182 23,150 22,377 23,045 3,303
Redeemable preference
shares held
within the group
(312) (312) (312) (312) (44)
Ordinary shares held
within the group (289) (293) - (297) (41)
E Ordinary shares held
within the group (344) (349) - (353) (49)
Balance at end of period 22,237 22,196 22,065 22,083 3,169
As at
Mar Jun Dec
2007 2006 2006
Unaudited Unaudited Audited
US Dollar million
Balance at beginning of period 3,292 3,055 3,055
Ordinary shares issued 15 504 550
E ordinary shares (cancelled) issued (1) - 50
Translation (133) (427) (363)
Sub-total 3,173 3,132 3,292
Redeemable preference shares held
within the group
(43) (44) (45)
Ordinary shares held within the group (40) - (43)
E Ordinary shares held within the group (48) - (50)
Balance at end of period 3,042 3,088 3,154
Rounding of figures may result in computational discrepancies.
11. Retained earnings and other reserves
Foreign
Non- currency
Retained distributable translation
Earnings reserves reserve
SA Rand million
Balance at December 2005 1,115 138 (1,910)
Loss attributable to equity
shareholders (2,126)
Dividends (164)
Net loss on cash flow hedges
removed from
equity and reported in income
Net loss on cash flow hedges
Gain on available-for-sale
financial assets
Deferred taxation on items above
Share-based payment for share
awards and
BEE transaction
Translation 2,533
Balance at June 2006 (1,175) 138 623
Balance at December 2006 (214) 138 436
Loss attributable to equity
shareholders 933
Dividends (668)
Net loss on cash flow hedges
removed from
equity and reported in income
Net loss on cash flow hedges
Deferred taxation on items above
Share-based payment for share
awards and
BEE transaction
Translation 385
Balance at June 2007 51 138 821
Comprehen-
Actuarial gains sive Other
(losses) income Total
Balance at December 2005 (227) (1,655) (2,539)
Loss attributable to equity
shareholders (2,126)
Dividends (164)
Net loss on cash flow hedges
removed from
equity and reported in income 609 609
Net loss on cash flow hedges (1,712) (1,712)
Gain on available-for-sale
financial assets 8 8
Deferred taxation on items above 343 343
Share-based payment for share
awards and
BEE transaction 15 15
Translation 1 (109) 2,425
Balance at June 2006 (226) (2,501) (3,141)
Balance at December 2006 (45) (1,503) (1,188)
Loss attributable to equity
shareholders 933
Dividends (668)
Net loss on cash flow hedges
removed from
equity and reported in income 536 536
Net loss on cash flow hedges (67) (67)
Deferred taxation on items above (74) (74)
Share-based payment for share
awards and
BEE transaction 117 117
Translation (8) 377
Balance at June 2007 (45) (999) (34)
Foreign
Non- currency
Retained distributable translation
Earnings reserves reserve
US Dollar million
Balance at December 2005 (58) 22 (66)
Loss attributable to
equity shareholders (241)
Dividends (26)
Net loss on cash flow
hedges removed from
equity and reported in
income
Net loss on cash flow
hedges
Gain on available-for-sale
financial assets
Deferred taxation on items
above
Share-based payment for
share awards and
BEE transaction
Translation (3) 314
Balance at June 2006 (325) 19 248
Balance at December 2006 (209) 20 241
Profit attributable to
equity shareholders 131
Dividends (90)
Net loss on cash flow
hedges removed from
equity and reported in
income
Net loss on cash flow
hedges
Deferred taxation on items
above
Share-based payment for
share awards and
BEE transaction
Translation 50
Balance at June 2007 (168) 20 291
Other
Comprehen-
Actuarial gains sive
(losses) income Total
Balance at December 2005 (36) (261) (399)
Loss attributable to equity
shareholders (241)
Dividends (26)
Net loss on cash flow hedges
removed from
equity and reported in income 95 95
Net loss on cash flow hedges (240) (240)
Gain on available-for-sale
financial assets 1 1
Deferred taxation on items above 40 40
Share-based payment for share
awards and
BEE transaction 2 2
Translation 4 13 328
Balance at June 2006 (32) (350) (440)
Balance at December 2006 (6) (215) (169)
Profit attributable to equity
shareholders 131
Dividends (90)
Net loss on cash flow hedges
removed from
equity and reported in income 77 77
Net loss on cash flow hedges (10) (10)
Deferred taxation on items above (11) (11)
Share-based payment for share
awards and
BEE transaction 17 17
Translation 50
Balance at June 2007 (6) (142) (5)
Rounding of figures may result in computational discrepancies.
12. Minority interests
As at
Jun Mar Jun Dec
2007 2007 2006 2006
Unaudited Unaudited Unaudited Audited
SA Rand million
Balance at beginning of period 436 436 374 374
Profit for the period 124 56 98 202
Dividends paid (88) (25) (88) (171)
Net loss on cash flow hedges removed from
equity and reported in income 4 4 5 10
Net loss on cash flow hedges - (3) (12) (12)
Translation (1) 13 42 33
Balance at end of period 475 481 419 436
As at
Jun Mar Jun Dec
2007 2007 2006 2006
Unaudited Unaudited Unaudited Audited
US Dollar million
Balance at beginning of period 62 62 59 59
Profit for the period 17 8 16 30
Dividends paid (12) (4) (14) (25)
Net loss on cash flow hedges removed from
equity and reported in income 1 1 1 2
Net loss on cash flow hedges - (1) (2) (2)
Translation - - (1) (2)
Balance at end of period 68 66 59 62
13. Exchange rates
Jun Mar Jun Dec
2007 2007 2006 2006
Unaudited Unaudited Unaudited Unaudited
Rand/US dollar average
for the year to date 7.14 7.22 6.31 6.77
Rand/US dollar average
for the quarter 7.07 7.22 6.46 7.31
Rand/US dollar closing 7.02 7.30 7.15 7.00
Rand/Australian dollar
average for the year to
date 5.78 5.68 4.69 5.10
Rand/Australian dollar
average for the quarter 5.88 5.68 4.83 5.63
Rand/Australian dollar
closing 5.96 5.90 5.31 5.53
BRL/US dollar average
for the year to date 2.04 2.11 2.19 2.18
BRL/US dollar average
for the quarter 1.97 2.11 2.18 2.15
BRL/US dollar closing 1.92 2.15 2.16 2.14
14. Related parties
AngloGold Ashanti, who holds an equity investment of 29.9% in Trans-Siberian
Gold plc (TSG), entered into a significant transaction during the June 2007
quarter with TSG in which two exploration companies were acquired for a cash
consideration of $40million. The companies acquired consist of Amikan (which
holds the Veduga deposit and related exploration and mining licences) and AS
APK (which holds the Bogunay deposit and related exploration and mining
licences).
15. Capital commitments
Jun Mar Jun Dec
2007 2007 2006 2006
Unaudited Unaudited Unaudited Audited
SA Rand million
Orders placed and
outstanding on capital
contracts at the
prevailing rate of
exchange 4,216 4,045 2,726 2,475
Jun Mar Jun Dec
2007 2007 2006 2006
Unaudited Unaudited Unaudited Audited
US Dollar million
Orders placed and
outstanding on capital
contracts at the
prevailing rate
of exchange 601 554 382 354
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.
To the extent that any of financing facilities mature in the near future, the
group believes that these facilities can be refinanced on similar terms to
those currently in place.
Rounding of figures may result in computational discrepancies.
16. Contingent liabilities
AngloGold Ashanti`s contingent liabilities at 30 June 2007 are detailed below:
Water pumping cost - South Africa - The group is involved in a legal dispute
regarding the responsibility for water pumping of the Margaret shaft, which
belongs to Stilfontein. Following an attempt by DRDGold to liquidate its North
West operations and avoid incurring pumping cost, AngloGold Ashanti Limited
launched an urgent application against DRDGold and government departments
requesting the court to order the continued pumping of water at the Stilfontein
Mines. The cessation of water pumping is likely to cause flooding in various
Vaal River operations. The Department of Water Affairs and Forestry responded
by issuing directives to the mining companies directing that they share the
costs of pumping at the Margaret Shaft.
The three mining companies, Simmer and Jack Mines, Harmony Gold Mining Company
and AngloGold Ashanti, are finalising an arrangement in which responsibility
for the water pumping will be transferred to an independent newly formed
company. The group responsibility will be limited to providing one-third of the
start-up capital on loan account and the three mining companies will be members
of the newly formed company. The operational cost going forward will be
apportioned to the three parties and form part of working cost for the group.
Should the proposed arrangement not be acceptable to the courts and/or the
regulatory authorities the proposal may have to be amended. Due to this
uncertainty, no estimate is made of any potential liabilities.
Groundwater pollution - South Africa - AngloGold Ashanti has identified a
number of groundwater pollution sites at its current operations in South
Africa, and has investigated a number of different technologies and
methodologies that could possibly be used to remediate the pollution plumes.
The viability of the suggested remediation techniques in the local geologic
formation in South Africa is however unknown. No sites have been remediated and
present research and development work is focused on several pilot projects to
find a solution that will in fact yield satisfactory results in South African
conditions. Subject to the technology being developed as a remediation
technique, no reliable estimate can be made for the obligation.
Provision of surety - South Africa - AngloGold Ashanti has provided sureties in
favour of a lender on a Gold loan facility with its affiliate Oro Africa (Pty)
Ltd and one of its subsidiaries to a maximum value of R100m ($14m). The
suretyship agreements have a termination notice period of 90 days.
Sales tax on gold deliveries - Brazil - Mineracao Serra Grande S.A.(MSG), the
operator of the Crixas mine in Brazil, has received two tax assessments from
the State of Goias related to payments of sales taxes on gold deliveries for
export: one for the period between February 2004 and June 2005 and the other
for the period between July 2005 and May 2006. The tax authorities maintain
that whenever a taxpayer export gold mined in the state of Goias, through a
branch located in a different Brazilian State, it must obtain an authorisation
from the Goias State Treasury by means of a Special Regime Agreement (Termo de
Acordo re Regime Especial - TARE). The Serra Grande operation is co-owned with
Kinross Gold Corporation. AngloGold Ashanti Brasil Mineracao Ltda manages the
operation and its attributable share of the first assessment is approximately
$33m. Although MSG requested the TARE in early 2004, the TARE, which authorised
the remittance of gold to the company`s branch in Minas Gerais specifically for
export purposes, was only granted and executed in May 2006. In November 2006
the administrative council`s second chamber ruled in favour of Serra Grande and
fully cancelled the tax liability related to the first period. The State of
Goias has appealed to the full board of the State of Goias tax administrative
council. The second assessment was issued by the State of Goias in October 2006
on the same grounds as the first one, and the attributable share of the
assessment is approximately $20m. The company believes both assessments are in
violation of Federal legislation on sales taxes.
VAT Disputes - Brazil - MSG received a tax assessment in October 2003 from the
State of Minas Gerais related to sales taxes on gold allegedly returned from
the branch in Minas Gerais to the company head office in the State of Goias.
The tax administrators rejected the company`s appeal against the assessment.
The company is now dismissing the case at the judicial sphere. The company`s
attributable share of the assessment is approximately $6m.
VAT Dispute - Brazil - Morro Velho is involved in a dispute with tax
authorities. As a result of an erroneous duplication of a shipping invoice
between two states in Brazil, tax authorities are claiming that VAT is payable
on the second invoice. The amount involved is approximately $5m.
Tax Dispute - Brazil - Morro Velho is involved in a dispute with tax
authorities. The state of Minas Gerais has denied a tax credit due to improper
classification on the relevant forms. The amount involved is approximately $3m.
Social security payments - Brazil - Anglogold Ashanti Brazil is being accused
of failing to pay certain required payments towards the social security system
in Brazil during the period 1997 to 2004. There is doubt if amounts are
actually due and payable under applicable law. The amount involved is
approximately $2m.
Capital cost of water pipelines - Namibia - A potential liability of
approximately $1m exists at Navachab in Namibia to pay the outstanding capital
cost of the water pipeline in the event of mine closure prior to 2019.
17. Concentration of risk
There is a concentration of risk in respect of reimbursable value added tax and
fuel duties from the Malian government:
- Reimbursable value added tax due from the Malian government amounts to an
attributable $32m at 30 June 2007 (31 March 2007: attributable $37m). The last
audited value added tax return was for the period ended 31 December 2006 and at
the balance sheet date an attributable $25m was still outstanding and $7m is
still subject to audit. The accounting processes for the unaudited amount are
in accordance with the processes advised by the Malian government in terms of
the previous audits.
- Reimbursable fuel duties from the Malian government amounts to an
attributable $8m at 30 June 2007 (31 March 2007: attributable $10m). Fuel duty
refund claims are required to be submitted before 31 January of the following
year and are subject to authorisation by firstly the Department of Mining and
secondly the Custom and Excise authorities. The Customs and Excise authorities
have approved an attributable $1m, which is still outstanding, whilst an
attributable $7m is still subject to authorisation. The accounting processes
for the unauthorised amount are in accordance with the processes advised by the
Malian government in terms of the previous authorisations. As from February
2006 all fuel duties have been exonerated.
The government of Mali is a shareholder in all the Malian entities and protocol
agreements governing repayments of certain of these amounts have been signed.
All payments as scheduled in terms of the protocol agreements have been
recovered up to June 2007. The amounts outstanding have been discounted to
their present value at a rate of 5%.
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
$17m at 30 June 2007 (31 March 2007: $15m). The last audited value added tax
return was for the period ended 30 November 2006 and at the balance sheet date
$14m was still outstanding and $3m is still subject to audit. The accounting
processes for the unaudited amount are in accordance with the processes advised
by the Tanzanian government in terms of the previous audits. The outstanding
amounts have been discounted to their present value at a rate of 5%.
- Reimbursable fuel duties from the Tanzanian government amounts to $26m at
30 June 2007 (31 March 2007: $22m). 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 $18m have been lodged with the Customs and Excise authorities,
which are still outstanding, whilst claims for refund of $8m have not yet been
submitted. The accounting processes for the unauthorised amount are in
accordance with the processes advised by the Tanzanian government in terms of
the previous authorisations. The outstanding amounts have been discounted to
their present value at a rate of 5%.
18. Attributable interest
Although AngloGold Ashanti holds a 66.7% interest in Cripple Creek & Victor
Gold Mining Company Limited, it is currently entitled to receive 100% of the
cash flows from the operation until the loan, extended to the joint venture by
AngloGold Ashanti USA Inc., is repaid.
19. Borrowings
AngloGold Ashanti`s borrowings are interest bearing.
20. Announcements
On 4 May 2007, AngloGold Ashanti announced that Mr C B Brayshaw and Mr A J
Trahar retired from the board effective 5 May 2007. AngloGold Ashanti, further
announced that Mrs C Carroll had been appointed as a non- executive director
with effect from 5 May 2007.
On 1 June 2007, AngloGold Ashanti announced the commencement of a
pre-feasibility study at the Tropicana gold project in Western Australia. This
study was expected to be completed in mid 2008 and would focus on the Tropicana
and Havana zones and would only consider open-cut resources.
On 8 June 2007, AngloGold Ashanti announced the sale of most of the remaining
moveable and immovable assets of Ergo, the surface reclamation operation east
of Johannesburg, discontinued in March 2005, to a consortium of Mintails South
Africa (Pty) Limited / DRD South African Operations (Pty) Limited Joint Venture
for R42.8m.
21. Dividend
The directors have today declared Interim Dividend No. 102 (Interim Dividend
No. 100: 210) of 90 South African cents per ordinary share for the six months
ended 30 June 2007. In compliance with the requirements of Strate, given the
company`s primary listing on the JSE Limited, the salient dates for payment of
the dividend are as follows:
To holders of ordinary shares and to holders of CHESS Depositary Interests
(CDIs) Each CDI represents one-fifth of an ordinary share
2007
Currency conversion date for UK pounds,
Australian dollars and Ghanaian cedis Thursday, 16 August
Last date to trade ordinary shares cum dividend Friday, 17 August
Last date to register transfers of
certificated securities cum dividend Friday, 17 August
Ordinary shares trade ex dividend Monday, 20 August
Record date Friday, 24 August
Payment date Friday, 31 August
On the payment date, dividends due to holders of certificated securities on the
South African share register will either be electronically transferred to
shareholders` bank accounts or, in the absence of suitable mandates, dividend
cheques will be posted to such shareholders.
Dividends in respect of dematerialised shareholdings will be credited to
shareholders` accounts with the relevant CSDP or broker.
To comply with the further requirements of STRATE, between Monday, 20 August
2007 and Friday, 24 August 2007, both days inclusive, no transfers between the
South African, United Kingdom, Australian and Ghana share registers will be
permitted and no ordinary shares pertaining to the South African share register
may be dematerialised or rematerialised.
To holders of American Depositary Shares
Each American Depositary Share (ADS) represents
one ordinary share
2007
Ex dividend on New York Stock Exchange Wednesday, 22 August
Record date Friday, 24 August
Approximate date for currency conversion Friday, 31 August
Approximate payment date of dividend Monday, 10 September
Assuming an exchange rate of R6.97/$1, the dividend payable on an ADS is
equivalent to 13 US cents. This compares with the final dividend of 32.384 US
cents per ADS paid on 26 March 2007. However, the actual rate of payment
will depend on the exchange rate on the date for currency conversion.
To holders of Ghanaian Depositary Shares (GhDSs)
100 GhDSs represent one ordinary share
2007
Last date to trade and to register GhDSs cum dividend Friday, 17 August
GhDSs trade ex dividend Monday, 20 August
Record date Friday, 24 August
Approximate payment date of dividend Monday, 3 September
Assuming an exchange rate of R1/?1,315.804, the dividend payable per GhDS is
equivalent to 11.84 cedis. This compares with the final dividend of 30.41
cedis per Ghanaian Depositary Share (GhDS) paid on 19 March 2007. However,
the actual rate of payment will depend on the exchange rate on the date for
currency conversion. In Ghana, the authorities have determined that dividends
payable to residents on the Ghana share register be subject to a final
withholding tax at a rate of 10%, similar to the rate applicable to dividend
payments made by resident companies which is currently at 10%.
In addition, directors have today declared Dividend No. E2 of 45 South African
cents per E ordinary share, payable to employees participating in the Bokamoso
ESOP and Izingwe Holdings (Proprietary) Limited.
These dividends are payable on Friday, 31 August 2007.
By order of the Board
R P EDEY R M GODSELL
Chairman Chief Executive Officer
30 July 2007
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
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
(P O Box 2665)
Accra
Ghana
Telephone: +233 21 772190
Fax: +233 21 778155
United Kingdom Secretaries
St James`s Corporate Services Limited
6 St James`s Place
London SW1A 1NP
England
Telephone: +44 20 7499 3916
Fax: +44 20 7491 1989
E-mail: jane.kirton@corpserv.co.uk
Directors
Executive
R M Godsell (Chief Executive Officer)
R Carvalho Silva !
N F Nicolau
S Venkatakrishnan *
Non-Executive
R P Edey * (Chairman)
Dr T J Motlatsi (Deputy Chairman)
F B Arisman #
R E Bannerman ?
Mrs E le R Bradley
Mrs C Carroll #
R Medori
(Alternate: P G Whitcutt)
J H Mensah ?
W A Nairn
Prof W L Nkuhlu
S M Pityana
S R Thompson *
* British # American ? Ghanaian
French ! Brazilian
Officers
Managing Secretary: Ms Y Z Simelane
Company Secretary: Ms L Eatwell
Contacts
Charles Carter
Telephone: +27 11 637 6385
Fax: +27 11 637 6400
E-mail: cecarter@AngloGoldAshanti.com
Himesh Persotam
Telephone: +27 11 637 6647
Fax: +27 11 637 6400
E-mail:
hpersotam@AngloGoldAshanti.com
General E-mail enquiries
investors@AngloGoldAshanti.com
AngloGold Ashanti website
http://www.AngloGoldAshanti.com
Share Registrars
South Africa
Computershare Investor Services 2004
(Pty) Limited
Ground Floor, 70 Marshall Street
Johannesburg 2001
(PO Box 61051, Marshalltown 2107)
South Africa
Telephone: 0861 100 950 (in SA)
Fax: +27 11 688 5218
web.queries@computershare.co.za
United Kingdom
Computershare Investor Services PLC
P O Box 82
The Pavilions
Bridgwater Road
Bristol BS99 7NH
England
Telephone: +44 870 889 3177
Fax: +44 870 703 6119
Australia
Computershare Investor Services Pty
Limited
Level 2, 45 St George`s Terrace
Perth, WA 6000
(GPO Box D182 Perth, WA 6840)
Australia
Telephone: +61 8 9323 2000
Telephone: 1300 55 7010 (in Australia)
Fax: +61 8 9323 2033
Ghana
NTHC Limited
Martco House
Off Kwame Nkrumah Avenue
POBox K1A 9563 Airport
Accra
Ghana
Telephone: +233 21 238492-3
Fax: +233 21 229975
ADR Depositary
The Bank of New York ("BoNY")
Investor Services, P O Box 11258
Church Street Station
New York, NY 10286-1258
United States of America
Telephone: +1 888 269 2377 (Toll free
in USA) or +9 610 382 7836 outside
USA)
E-mail: shareowners@bankofny.com
Website: http://www.stockbny.com
Global BuyDIRECTSM
BoNY maintains a direct share purchase
and dividend reinvestment plan for
ANGLOGOLD ASHANTI.
Telephone: +1-888-BNY-ADRS
PRINTED BY INCE (PTY) LIMITED
Certain statements contained in this document, including, without limitation,
those concerning the economic outlook for the gold mining industry,
expectations regarding gold prices and production, the completion and
commencement of commercial operations of certain of AngloGold Ashanti`s
exploration and production projects, and its liquidity and capital resources
and expenditure, contain certain forward-looking statements regarding AngloGold
Ashanti`s operations, economic performance and financial condition. Although
AngloGold Ashanti believes that the expectations reflected in such forward
-looking statements are reasonable, no assurance can be given that such
expectations will prove to have been correct. Accordingly, results could differ
materially from those set out in the forward-looking statements as a result of,
among other factors, changes in economic and market conditions, success of
business and operating initiatives, changes in the regulatory environment and
other government actions, fluctuations in gold prices and exchange rates, and
business and operational risk management. AngloGold Ashanti undertakes no
obligation to update publicly or release any revisions to these forward
-looking statements to reflect events or circumstances after the date of the
annual report on Form 20-F or to reflect the occurrence of unanticipated
events. All subsequent written or oral forward-looking statements attributable
to AngloGold Ashanti or any person acting on its behalf are qualified by the
cautionary statements herein. For a discussion on such risk factors, refer to
AngloGold Ashanti`s annual report on Form 20-F for the year ended 31 December
2006 dated 06 July 2007, which was filed with the Securities and Exchange
Commission (SEC) on 09 July 2007.
Date: 31/07/2007 07:50:03 Produced by the JSE SENS Department.
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