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ANG
ANANO
ANG - Anglogold Ashanti Limited - Report to shareholders for the quarter and
nine months ended 30 September 2007
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 nine months ended 30 September 2007
Group results for the quarter
- Solid gold production performance at 1.43Moz, up 6% on the previous quarter
- Total cash costs at $357/oz, up 7% due to the impact of annual wage
increases, higher power tariffs and
consumable costs, combined with increased royalty payments
- Adjusted headline earnings at $81m, in line with the previous quarter
- Price received increased to $621/oz, 9% lower than the average spot price for
the quarter, as the company continues to deliver into hedge commitments
- Acquisition of 15% minority interest in Iduapriem completed
- Mark Cutifani succeeds Bobby Godsell as Chief Executive Officer
- Anglo American plc shareholding reduced to 17%, with free float increasing to
83%
Quarter Nine months
ended ended ended ended
Sep Jun Sep Sep
2007 2007 2007 2006
SA rand / Metric
Operating review
Gold
Produced
- kg / oz (000) 44,611 41,958 127,809 129,556
Price received
- R/kg / $/oz 141,400 137,579 139,732 122,595
Total cash costs
- R/kg / $/oz 81,186 75,724 78,074 65,334
Total production costs
- R/kg / $/oz 107,239 99,734 102,443 87,661
Financial review
Gross (loss) profit
- R / $ million (879) 1,930 1,830 1,060
Gross profit adjusted for the
(loss) profit
on unrealised non-hedge
derivatives
and other commodity contracts
- R / $ million 1,761 1,688 5,281 5,248
(Loss) profit attributable to
equity
shareholders
- R / $ million (2,015) 1,083 (1,082) (657)
Headline (loss) earnings 1
- R / $ million (1,972) 1,066 (1,042) (700)
Headline earnings adjusted for
the (loss) profit
on unrealised non-hedge
derivatives,
other commodity contracts and
fair value
adjustments on convertible bond
- R / $ million 575 578 1,855 2,436
Capital expenditure
- R / $ million 1,733 1,979 5,129 3,671
(Loss) earnings per ordinary
share - cents/share
Basic (716) 385 (384) (242)
Diluted (716) 384 (384) (242)
Headline 1 (701) 379 (370) (258)
Headline earnings adjusted for
the (loss) profit
on unrealised non-hedge
derivatives,
other commodity contracts and
fair value
adjustments on convertible bond
- cents/share 204 206 659 897
Dividends
- cents/share 90 210
Quarter Nine months
ended ended ended ended
Sep Jun Sep Sep
2007 2007 2007 2006
US dollar / Imperial
Operating review
Gold
Produced
- kg / oz (000) 1,434 1,349 4,109 4,165
Price received
- R/kg / $/oz 621 605 610 576
Total cash costs
- R/kg / $/oz 357 333 341 308
Total production costs
- R/kg / $/oz 471 439 448 413
Financial review
Gross (loss) profit
- R / $ million (159) 231 219 310
Gross profit adjusted for the (loss)
profit
on unrealised non-hedge derivatives
and other commodity contracts
- R / $ million 249 239 740 789
(Loss) profit attributable to equity
shareholders
- R / $ million (318) 111 (188) 28
Headline (loss) earnings 1
- R / $ million (312) 109 (182) 21
Headline earnings adjusted for the
(loss) profit
on unrealised non-hedge derivatives,
other commodity contracts and fair value
adjustments on convertible bond
- R / $ million 81 82 260 364
Capital expenditure
- R / $ million 245 279 720 557
(Loss) earnings per ordinary share -
cents/share
Basic (113) 39 (67) 10
Diluted (113) 39 (67) 10
Headline 1 (111) 39 (65) 8
Headline earnings adjusted for the
(loss) profit
on unrealised non-hedge derivatives,
other commodity contracts and fair value
adjustments on convertible bond
- cents/share 29 29 92 134
Dividends
- cents/share 12 29
Notes: 1. Refer to note 8 of "Notes" for the definition.
$ represents US dollar, unless otherwise stated.
Rounding of figures may result in computational discrepancies.
Operations at a glance
for the quarter ended 30 September 2007
Production Total cash costs
% %
oz (000) Variance 1 $/oz Variance 1
Mponeng 155 1 254 3
Sunrise Dam 153 3 279 (5)
Kopanang 117 16 305 4
TauTona 117 18 320 3
AngloGold Ashanti Mineracao 87 19 220 (12)
Great Noligwa 118 (6) 397 24
Geita 109 33 401 19
Cripple Creek & Victor 60 (13) 308 24
Cerro Vanguardia 2 50 - 291 14
Iduapriem 3 52 21 359 23
Morila 2 52 49 305 (26)
Serra Grande 2 23 (4) 268 2
Siguiri 2 61 (5) 518 4
Sadiola 2 35 3 400 (1)
Yatela 2 30 (9) 383 65
Tau Lekoa 43 10 482 3
Obuasi 84 (9) 513 13
Savuka 20 11 406 (6)
Navachab 21 5 431 23
Moab Khotsong 17 31 691 (1)
Other 30 (9) - -
AngloGold Ashanti 1,434 6 357 7
Gross profit (loss)
adjusted for the (loss)
profit on unrealised
non-hedge derivatives
and other commodity
Cash gross profit contracts
% %
$m Variance 1 $m Variance 1
Mponeng 59 11 46 12
Sunrise Dam 53 26 41 37
Kopanang 37 19 28 22
TauTona 36 24 21 40
AngloGold Ashanti Mineracao 31 19 21 11
Great Noligwa 27 (23) 15 (32)
Geita 26 8 13 18
Cripple Creek & Victor 24 4 15 (6)
Cerro Vanguardia 2 16 (16) 10 (23)
Iduapriem 3 14 8 9 -
Morila 2 13 86 9 125
Serra Grande 2 8 - 6 -
Siguiri 2 7 - (1) (100)
Sadiola 2 7 - 6 -
Yatela 2 7 (42) 6 (45)
Tau Lekoa 6 20 - 100
Obuasi 6 (60) (7) (800)
Savuka 4 33 2 100
Navachab 4 (20) 2 (50)
Moab Khotsong (1) - (7) (17)
Other 18 (5) 14 -
AngloGold Ashanti 402 5 249 4
1 Variance September 2007 quarter on June 2007 quarter - increase (decrease).
2 Attributable.
3 Effective 1 September 2007 the minority shareholdings of the International
Finance Corporation (10%) and Government of Ghana (5%) were acquired and
Iduapriem is now wholly-owned by AngloGold Ashanti.
Rounding of figures may result in computational discrepancies.
Financial and operating review
OVERVIEW FOR THE QUARTER
Following a disappointing safety performance during the first half of the year,
the company embarked upon a number of safety interventions, specifically at the
South African operations. These initiatives seek to address both behavioural
and management systems. The company`s lost time injury rate for the quarter
showed a 13% improvement to a rate of 7.9 per million hours worked. Twelve of
the twenty operations showed improvements against the previous quarter, with
six operations being injury free for the quarter, and a further two having only
a single lost time injury. Notwithstanding these improvements, the company
experienced seven fatal accidents during the quarter, which is an unacceptable
situation, re- emphasising the need to ensure that safe operating performance
is the first priority of every employee.
Operationally, the September quarter was marked by a stronger operational
performance with production 6% higher at 1.43Moz. Total cash costs, at $357/oz,
up 7% from the previous quarter, largely due to the annual wage increases and
higher power costs in both South Africa and Ghana, increased fuel, consumable
and maintenance costs, appreciation of local operating currencies, and higher
royalty payments due to an increased gold spot price.
Adjusted headline earnings were $81m compared with $82m in the second quarter.
Despite the higher production, the marginal reduction quarter- on-quarter was
primarily due to increased total cash costs, higher depreciation and
amortisation charge, combined with once-off compensation and recruitment
expenses relating to the retirement of Bobby Godsell and Roberto Carvalho Silva
and the appointment of Mark Cutifani as Chief Executive Officer. The received
gold price, whilst slightly up on the prior quarter at $621/oz, was 9% lower
than the average spot price of $680/oz, as the company continued to deliver
into hedge commitments. Based on a $96/oz higher spot price at the end of the
quarter, the net hedge delta at 30 September was higher at 10.58Moz.
The South African assets had a solid performance with all operations showing
production improvements against the previous quarter, with the exception of
Great Noligwa, which was affected by lower grade due to mining mix flexibility.
Total cash costs for the South African operations increased 8% to R77,247/kg
due to the annual wage increases, higher winter power tariffs and by- product
loss, which was partially off-set by the improved yield and higher gold
production. Individually, production at Kopanang, TauTona, Moab Khotsong, Tau
Lekoa and Savuka all reported double digit improvements, while Mponeng
increased marginally on its strong base.
The other African assets had a mixed quarter, with good operational
performances at Morila, where production increased 49% and total cash costs
declined 26%; at Geita, where production increased 33% and total cash costs
rose 19%; and at Iduapriem, where production improved by 21% and total cash
costs were 23% higher due to the non-occurrence of once-off credits. Navachab
and Sadiola showed production increases of 5% and 3% respectively. Production
at Obuasi was 9% lower following an eleven-day shut down for both maintenance
and the testing and development of processes to reduce environmental impacts of
ore treatment, which was done in line with a directive from the Ghanaian
Environmental Protection Agency. Seasonal rainfall affected Siguiri and Yatela
where production declined 5% and 9% respectively.
Further improvements were achieved at the international operations with an
overall 2% increase in production to 372,000oz for the quarter.
Cripple Creek & Victor in the US was 13% lower caused by delayed production
from the leach pad due to higher stacking levels, which increased total cash
cost by 24%; while production at Serra Grande was 4% lower due to lower feed
grades and total cash costs increased by 2%. Cerro Vanguardia in Argentina
remained steady, while Sunrise Dam continued its strong operational performance
with production up 3%, and total cash costs down 7%; and production at
AngloGold Ashanti Brasil Mineracao rose by 19% and total cash costs decreased
by 12%.
AngloGold Ashanti completed the acquisition of minority interests held by the
Government of Ghana and the International Finance Corporation in the Iduapriem
and Teberebie mine effective 1 September 2007 for a total cash consideration of
$25m, giving AngloGold Ashanti full ownership of the mine.
Looking ahead, production for the fourth quarter is estimated to be at 1.50Moz.
During October 2007, AngloGold Ashanti utilised the opportunity of the recent
dip in uranium prices to buy 300,000 pounds of uranium at a cost of $75/pound
to meet contractual commitments maturing in 2008. Given the impact of this
uranium purchase, rising fuel prices and inflation, total cash cost for the
fourth quarter is expected to be around $364/oz, assuming the following
exchange rates: R6.90/$, A$/$0.87, BRL1.90/$ and Argentinean peso 3.15/$.
Capital expenditure is estimated at $414m and will be managed in line with
profitability and cash flow.
Earnings for the fourth quarter are expected to be significantly distorted by,
amongst other things, annual accounting adjustments such as rehabilitation,
inventory, current and deferred tax provisions.
In early October 2007, Anglo American plc reduced its shareholding in AngloGold
Ashanti from 41.6% to 17.3%, through the sale of 67.1 million shares.
As a result of the reduction in shareholding, the directors representing Anglo
American plc on the AngloGold Ashanti board, namely Mrs C Carroll and Mr R
Medori, together with his alternate Mr P G Whitcutt, have resigned.
Bobby Godsell retired as CEO and from the board with effect from 30 September
2007, and Mark Cutifani was appointed his successor, with effect from 1 October
2007.
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 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.
Exploration
Total exploration expenditure increased to $46m ($21m brownfields, $25m
greenfields) during the third quarter of 2007, compared to $41m ($18m
brownfields, $23m greenfields) in the previous quarter.
BROWNFIELDS EXPLORATION
In South Africa, surface drilling continued in the Project Zaaiplaats area of
Moab Khotsong to further define the geological model of the lower mine.
Borehole MZA9, a long deflection to the east is in progress and drilling at
borehole MGR7 has been completed and the rig relocated to borehole MCY4.
Surface drilling in the Moab North area has been re-started after the
structural interpretation was updated. Borehole MCY4 has been re-opened and a
deflection to the east is in progress and a new borehole, MCY5 was started
during the quarter.
At Obuasi, in Ghana, drilling from 50 level achieved four new borehole
intersections in the Adansi Deeps area, and three new intersections were
obtained on the KMS side.
At Iduapriem, resource conversion drilling continued at Blocks 7 and 8, which
is the main mining area. A total of 40 holes were drilled during the quarter in
an effort to convert inferred mineral resources to indicated mineral resources.
In Australia, at Boddington mine, resource conversion and near mine extension
exploration diamond drilling rigs were reduced from six to two rigs, as
planned. During the quarter, approximately 31,032m of new drilling in 44 holes
was completed, bringing the total to date to 104,949m from 134 holes.
At Siguiri, in Guinea, drilling continued at the Kintinian prospect, situated
4km north of the mining operation. Infill and extension drilling will continue
at this prospect during the next quarter. Extension drilling started at Kosise
South and at Block 2 (45km west of the current operations), infill drilling of
the oxides at Foulata was started during the quarter.
At Geita, in Tanzania, during the third quarter exploration activities were
concentrated on five areas: Matandani Pit, A3 (West-Central-South),
Nyakabale-Prospect 30, the Lone Cone-Nyankanga Gap and the Nyankanga foot wall.
For the quarter, 2,141m of diamond drilling, 1,701m of reverse circulation (RC)
and 14,745m of air core drilling was achieved from 236 holes, comprising
follow-up work, drilling of extension to known mineralisation and
reconnaissance.
At Morila in Mali, results from borehole MSZ002 drilled during the second
quarter were received and no significant mineralisation were encountered. A
small infill soil sampling programme was completed in three areas of the
southern half of the exploitation lease area. Some anomalous zones were defined
and eight infill-soil sampling lines (1km line spacing and 100m sampling
intervals) were completed in the Domba- east corridor.
At Sadiola, heavy seasonal rain prevented drilling during August and September.
A fence line of diamond holes was planned between FE3-pit 3 and FE4 to verify
the possible plunge to the north of the mineralised breccia present on these
two prospects. Borehole SDFE3S-022 achieved 227m before rain halted drilling
and limited resource delineation drilling was completed at FE3, FE3S and
Tambali South.
At Yatela, six diamond holes totalling 1,836m were drilled on the "Deep
Sulphide" project and final assay results are being awaited. A drilling
programme to investigate the oxide potential at Dinnguilou started during the
quarter and the initial phase to test the alluvial potential was completed with
2,672m drilled from 238 holes. The saprolite drilling programme was delayed by
heavy rainfall and 6,719m was drilled of the planned 10,500m. Mineralised
intersections from a previous drilling campaign were followed up on at KE17 and
366m were drilled from 11 holes.
At Navachab, in Namibia, drilling continued in the Upper Schist to the
north-west of the main pit, as well as on the west ramp of the main pit area
and preliminary results received have been encouraging. A drilling programme to
test vertical mineralisation along the Upper Schist-MDM contact in the main pit
area was initiated, and drilling started at Gecko South and North. The existing
grade control block at Gecko Central was extended to the north-east to close
off the mineralisation and additional drilling to close off the orebody toward
the north-east at Grid A was completed and some positive intersections were
recorded.
At Cripple Creek & Victor in the United States, drilling continues on the north
side of the district near Schist Island and Control Point, while geotechnical
drilling has been completed in the Globe Hill area. Development drilling has
been completed along the Last Dollar/Orpha may trend on the southeast side of
the main Cresson pit and will focus on the Schist Island area for the remainder
of the year.
GREENFIELDS EXPLORATION
Greenfields exploration activities continued in seven countries (Australia,
Colombia, the DRC, China, Laos, the Philippines, and Russia) during the
quarter. A total of 269,700m of diamond (DDH) and reverse circulation (RC)
drilling has been completed to date for the year, on drill testing priority
targets in Australia, the DRC, and Colombia.
In Australia, drilling continued at the Tropicana JV Project (AngloGold Ashanti
70%, Independence Group 30%) as part of the pre- feasibility study (PFS), which
will focus on the economics of the open-pit mining of gold mineralisation,
currently identified over a four kilometre strike length at Tropicana-Havana.
Reconnaissance exploration is also continuing, in parallel, throughout the
remainder of the Tropicana JV tenement holding.
Regional exploration and target generation activities continued in Colombia
during the third quarter. Diamond drilling was carried out on the bulk-tonnage
gold targets at Gramalote, where a conceptual study is currently taking place,
with results expected at year end, and at Colosa. Drill testing of the joint
venture prospect Nechi (with local partner Mineros SA) also continued during
the quarter, with results currently under review, while encouraging results
were returned from drilling at the Miraflores prospect by the JV partner
B2Gold.
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 deeper, mineralised mylonite zones located to the
south- east and east of the past-producing Nzebi and Pluto mines, respectively.
The two RC rigs continued to evaluate the shallow, open-pit resource potential
of the Adidi North, Sokomutu, and Pluto sectors. A 50m x 50m drill grid has now
been completed over both the Adidi North and Sokomuto sectors. The 2007 drill
programme is expected to be finalised in the middle of next quarter, and will
allow for the calculation of an inferred gold resource by year- end. In
parallel, a conceptual scoping study on the economics of the Mongbwalu project
is expected to be completed during the first half of 2008.
Regional target generation activities continued at Concession 40, with
additional airborne magnetic data acquired during the quarter, bringing the
total area covered by high-resolution airborne geophysics to 2,200 square
kilometres, or nearly 25% of the entire concession. Interpretation of these
geophysical data is ongoing and field evaluation of the priority targets is in
progress.
In Russia, the formal documentation for the strategic alliance with Polymetal
has been signed, and all future exploration and business development activities
in Russia, will now be undertaken through the strategic alliance.
In China, preparation for first-round drilling of the Yili-Yunlong prospect was
advanced after the issuance of the business licence for the Co- operative Joint
Venture (CJV) in late June. AngloGold Ashanti also successfully signed its
third CJV in China at the Pingwu project in the Sichuan Province on August 30.
At Red Valley in Qinghai, 3,300m of diamond drilling was completed by AngloGold
Ashanti as part of its earn-in commitment on the CJV with results expected
during the fourth quarter.
In the Philippines, the final tenement grant for Mapawa is still awaited from
the Manila Central Mines and Geosciences Bureau, and work continued on
finalising the Mapawa and Outer Siana JV agreements with Red 5 Limited.
Under the Oxiana Limited JV in Laos, regional reconnaissance sampling and
mapping programmes were restricted, due to rain, to two areas, with assays
results awaited.
Review of the gold market
From a low of $641/oz early in the quarter, the gold price strengthened during
the quarter reaching a high of $745/oz at quarter end, on raised concerns over
economic uncertainty and a weaker US dollar. For the quarter, the gold price
averaged $680/oz, marginally higher than the previous quarter`s $666/oz. Post
quarter end the gold price has continued to trade higher, reaching a 27 year
high of $790/oz assisted by strong investment demand and the continued
weakening of the US dollar.
The stronger gold price and an unchanged rand saw the rand gold price average
R155,005/kg for the quarter, up 2% on the previous quarter`s average of
R151,562/kg. A stronger Australian dollar offset the US dollar gold price
increase and the gold price in Australian dollar terms was unchanged from the
previous quarter at A$802/oz.
PHYSICAL MARKET
Gold jewellery demand in the second quarter of 2007 reached an all-time record
high of $14.5bn, which was 37% higher than the same quarter in 2006. In tonnage
terms, demand was 22% higher than the second quarter of 2006, at 675mt.
Indications are that these trends will continue into the third quarter.
Gold jewellery consumption in emerging market economies, where demand is driven
by an investment component, was particularly robust. The key factors driving
increased consumption were lower price volatility, favourable economic
conditions and a belief in possible further upside to the gold price. The
weakness of the dollar against local currencies further fuelled this demand,
with prices remaining stable or falling for the year to date.
In India, demand reached record levels in rupee and tonnage terms for both
jewellery and retail investment. Together these totalled 317mt, half of global
mine output for the quarter and 90% higher than the depressed level of a year
ago. Good monsoon rains should impact positively on the rural economy and
presage strong demand for the latter part of year and early 2008 under current
price conditions. The second half of the year will also see further demand for
gold in India, as the Hindu festival of lights, Diwali, is celebrated.
Record demand was also achieved in Turkey, China (up 32% year on year) and the
Middle East (up 20% year on year). In China, growth was achieved in both the
traditional 24 carat market as well as in the 18K (K Gold) product category. In
the Middle East, the Saudi Arabian market has showed strong growth with
jewellery demand in the second quarter rising 30% in tonnage and 38% in value
terms.
In Russia, jewellery demand has grown strongly over recent years and in 2006
measured 70mt. Quarterly demand is at record levels and demand during the first
half of 2007 reached almost 40mt. Russia became the seventh largest jewellery
market by size in 2006, and holds considerable potential for the future.
Increased imports have also assisted in creating a more innovative and varied
product offering.
CENTRAL BANK SALES
A total of 476mt of the 500mt available was sold in the third year of the
second Central Bank Gold Agreement (CBGA2). Sellers included Spain, France,
Switzerland and the European Central Bank, with the Swiss National Bank
accounting for a substantial portion of sales. The Swiss National Bank had
announced in June 2007 that it would make an adjustment in the composition of
its reserves which will result in selling 250mt of gold before CBGA2 expires at
the end of September 2009. However, the impact of these sales in a strong
investment market should be minimal.
INVESTMENT MARKET
After a subdued second quarter, which saw some sales from investors, Exchange
Traded Funds (ETFs) performed well during August and September. Total holdings
in ETFs reached over 24Moz.
India recently introduced two ETF`s in February and April of this year, and
both have accumulated over one tonne of gold to date. A further catalyst for
demand is the Shanghai Gold Exchange individual gold bullion trading, which
allows individual investors to trade gold from a minimum threshold of 100
grams.
INDUSTRIAL MARKET
The positive trends in industrial demand for gold over the last quarter
continues, on the back of buoyant demand from the electronics industry in the
Far East. Industrial demand of 79.2mt (a 2% improvement over the same quarter
in 2006) came primarily increase consumer demand for personal computers and
mobile phones, both of which contain varying amounts of gold.
PRODUCER HEDGING
Following the record hedge reduction of 5.2Moz in the previous quarter, it is
expected that the data for the third quarter will show only a small net
decrease in the global hedge position.
CURRENCIES
The US dollar continued to weaken against most currencies during the quarter
following increased concerns over a slowing US economy, and in particular the
US housing market. The large 50 basis point rate cut in September by the US
Federal Reserve and indications from China that it may curtail its purchases of
US Treasuries, in retaliation for threatened trade sanctions against China,
also helped weaken the dollar. In contrast, increasing interest rates in South
Africa and Australia have attracted investment inflows that have seen the local
currencies strengthen against the dollar over the quarter.
From opening levels of R7.02/$, A$/$0.83 and BRL1.92/$, the rand, Australian
dollar and Brazilian real strengthened during the quarter to close at R6.87/$,
A$/$0.88 and BRL1.85/$ respectively. The continued weakening of the US dollar
since quarter end has seen these currencies strengthen further to levels of
R6.70/$, A$/$0.91 and BRL1.79/$.
Hedge position
HEDGE POSITION
As at 30 September 2007, the net delta hedge position was 10.58Moz or 329t,
representing an increase of 1.83Moz compared to the quarters opening position.
The increase is primarily due to the closing spot gold price of $745/oz, which
was $96/oz higher than the quarters opening price of $649/oz.
The marked-to-market value of the hedge book as at 30 September was negative
$3.52bn (as at 30 June 2007: negative $2.78bn). The value was based on a gold
price of $745/oz, exchange rates of R/$ 6.87 and A$/$0.88 and the prevailing
market interest rates and volatilities at the time. The increase in the
negative marked-to-market value was due to a higher spot gold price and higher
gold option volatilities at quarter end.
The company continues to actively manage its hedge position in a value
accretive manner, whilst actively reducing the overall hedge delta. Some minor
hedge restructuring was concluded during the quarter.
For the quarter, the company received a price of $621/oz, which is $59/oz or 9%
lower than the average spot price of $680/oz. For the final quarter, the
deficit between the received price and the spot price is likely to be between
10% and 12% for spot gold prices in the $700 to $760/oz range.
As at 31 October 2007 the marked-to-market value of the hedge book was a
negative $3.81bn, based on a gold price of $783.70/oz and exchange rates of
R6.54/$ and A$/$0.92 and the prevailing market interest rates and volatilities
at the time.
As indicated previously, the group has changed the method of allocating the
effect of hedging to individual mines. The effect of hedging is now reported
proportional to attributable gold sold and therefore the average received gold
price for each mine is similar to the group average received gold price.
Year 2007 2008 2009 2010
DOLLAR GOLD
Forward contracts Amount (kg) 6,695 22,817 21,738 14,462
US$ per oz $363 $314 $316 $347
Restructure Longs Amount (kg) *7,527 *7,734
US$ per oz $654 $645
Put options purchased Amount (kg) 437
US$ per oz $292
Put options sold Amount (kg) 10,737 16,165 3,748 1,882
US$ per oz $663 $614 $530 $410
Call options purchased Amount (kg) 4,422 9,813
US$ per oz $408 $427
Call options sold Amount (kg) 20,710 55,796 45,191 35,933
US$ per oz $577 $500 $493 $483
RAND GOLD
Forward contracts Amount (kg) *2,559 933
Rand per kg R129,834 R116,335
Put options sold Amount (kg) 1,089
Rand per kg R157,860
Call options sold Amount (kg) 2,955 2,986 2,986
Rand per kg R164,134 R202,054 R216,522
A DOLLAR GOLD
Forward contracts Amount (kg) 10,109 2,177 3,390 3,110
A$ per oz A$762 A$659 A$645 A$688
Put options purchased Amount (kg) 7,154
A$ per oz A$837
Put options sold Amount (kg) 10,575 1,866
A$ per oz A$813 A$810
Call options purchased Amount (kg) 3,110 1,244 3,110
A$ per oz A$680 A$694 A$712
Call options sold Amount (kg) 10,575
A$ per oz A$860
Delta (kg) (26,579) (55,273) (68,319) (50,184)
** Total net gold: Delta (oz) (854,533) (1,777,066) (2,196,504)(1,613,451)
Year 2011 2012-2016 Total
DOLLAR GOLD
Forward
contracts Amount (kg) 12,931 24,307 102,950
US$ per oz $397 $418 $357
Restructure
Longs Amount (kg) *15,261
US$ per oz $649
Put options
purchased Amount (kg) 437
US$ per oz $292
Put options
sold Amount (kg) 1,882 5,645 40,059
US$ per oz $420 $440 $576
Call options
purchased Amount (kg) 14,235
US$ per oz $421
Call options
sold Amount (kg) 37,550 61,873 257,053
US$ per oz $500 $599 $526
RAND GOLD
Forward
contracts Amount (kg) *1,626
Rand per kg R126,227
Put options
sold Amount (kg) 1,089
Rand per kg R157,860
Call options
sold Amount (kg) 2,986 11,913
Rand per kg R230,990 R203,528
A DOLLAR GOLD
Forward
contracts Amount (kg) 18,786
A$ per oz A$717
Put options
purchased Amount (kg) 7,154
A$ per oz A$837
Put options
sold Amount (kg) 12,441
A$ per oz A$812
Call options
purchased Amount (kg) 7,464
A$ per oz A$696
Call options
sold Amount (kg) 10,575
A$ per oz A$860
Delta (kg) (49,576) (79,198) (329,129)
** Total net
gold: Delta (oz) (1,593,903) (2,546,271) (10,581,728)
Rounding of figures may result in computational discrepancies.
Year 2007 2008 2009
DOLLAR SILVER
Put options purchased Amount (kg) 10,886 43,545
$ per oz $7.40 $7.66
Put options sold Amount (kg) 10,886 43,545
$ per oz $5.93 $6.19
Call options sold Amount (kg) 10,886 43,545
$ per oz $8.40 $8.64
Year 2010 2011 2012-2016 Total
DOLLAR SILVER
Put options
purchased Amount (kg) 54,431
$ per oz $7.61
Put options sold Amount (kg) 54,431
$ per oz $6.14
Call options sold Amount (kg) 54,431
$ per oz $8.59
* Indicates a long position resulting from forward purchase contracts. The
group enters into forward purchase contracts as part of its strategy to
actively manage and reduce the size of the hedge book.
** The Delta of the hedge position indicated is the equivalent gold position
that would have the same marked-to-market sensitivity for a small change in the
gold price. This is calculated using the Black-Scholes option formula with the
ruling market prices, interest rates and volatilities as at 30 September 2007.
The following table indicates the group`s currency hedge position at 30
September 2007
Year 2007 2008 2009
RAND DOLLAR (000)
Forward contracts Amount ($) 30,113
US$/R R7.13
Put options purchased Amount ($) 140,000
US$/R R7.32
Put options sold Amount ($) 185,000
US$/R R7.10
Call options sold Amount ($) 185,000
US$/R R7.55
A DOLLAR (000)
Forward contracts Amount ($) 60,000 80,000
A$/US$ $0.84 $0.79
Put options purchased Amount ($) 80,000 80,000
A$/US$ $0.81 $0.81
Put options sold Amount ($) 80,000 80,000
A$/US$ $0.83 $0.84
Call options sold Amount ($) 80,000 80,000
A$/US$ $0.79 $0.79
BRAZILIAN REAL (000)
Forward contracts Amount ($) 12,000 19,000
US$/BRL BRL2.06 BRL2.05
Put options purchased Amount ($) 9,000
US$/BRL BRL2.04
Put options sold Amount ($) 3,000
US$/BRL BRL2.05
Call options sold Amount ($) 15,000 8,000
US$/BRL BRL2.01 BRL2.20
Year 2010 2011 2012-2016 Total
RAND DOLLAR (000)
Forward contracts Amount ($) 30,113
US$/R R7.13
Put options purchased Amount ($) 140,000
US$/R R7.32
Put options sold Amount ($) 185,000
US$/R R7.10
Call options sold Amount ($) 185,000
US$/R R7.55
A DOLLAR (000)
Forward contracts Amount ($) 140,000
A$/US$ $0.81
Put options purchased Amount ($) 160,000
A$/US$ $0.81
Put options sold Amount ($) 160,000
A$/US$ $0.84
Call options sold Amount ($) 160,000
A$/US$ $0.79
BRAZILIAN REAL (000)
Forward contracts Amount ($) 31,000
US$/BRL BRL2.05
Put options purchased Amount ($) 9,000
US$/BRL BRL2.04
Put options sold Amount ($) 3,000
US$/BRL BRL2.05
Call options sold Amount ($) 23,000
US$/BRL BRL2.08
Derivative analysis by accounting designation as at 30 September 2007
Cash flow
Normal sale hedge
exempted accounted
US Dollars (million)
Commodity option contracts (567) -
Foreign exchange option contracts - -
Forward sale commodity contracts (1,118) (346)
Forward foreign exchange contracts - 4
Interest rate swaps (32) -
Total hedging contracts (1,717) (342)
Option component of convertible bonds - -
Total derivatives (1,717) (342)
Non-hedge
accounted Total
US Dollars (million)
Commodity option contracts (1,560) (2,127)
Foreign exchange option contracts (2) (2)
Forward sale commodity contracts 54 (1,410)
Forward foreign exchange contracts 13 17
Interest rate swaps 35 3
Total hedging contracts (1,460) (3,519)
Option component of convertible bonds (41) (41)
Total derivatives (1,501) (3,560)
Rounding of figures may result in computational discrepancies.
Statement of recognised income and expense
Nine months Nine months Year
ended ended ended
September September December
2007 2006 2006
Unaudited Unaudited Audited
SA Rand million
Actuarial gain on pension and
post-retirement benefits - - 283
Transactions with minorities (170) - -
Net loss on cash flow hedges
removed from equity and reported
in income 910 874 1,274
Net loss on cash flow hedges (662) (1,717) (1,604)
(Loss) gain on available-for-sale
financial assets (24) 147 78
Deferred taxation on items above 20 346 50
Net exchange translation
differences 60 4,362 2,292
Net income recognised directly in
equity 134 4,012 2,373
Loss for the period (907) (505) (385)
Total recognised (expense) income
for the period (773) 3,507 1,988
Attributable to:
Equity shareholders (852) 3,287 1,755
Minority interest 79 220 233
(773) 3,507 1,988
US Dollar million
Actuarial gain on pension and
post-retirement benefits - - 42
Transactions with minorities (25) - -
Net loss on cash flow hedges
removed from equity and reported
in income 130 155 217
Net loss on cash flow hedges (96) (221) (229)
(Loss) gain on available-for-sale
financial assets (3) 16 12
Deferred taxation on items above (5) 32 8
Net exchange translation
differences 35 493 281
Net income recognised directly in
equity 36 475 331
(Loss) profit for the period (163) 51 (14)
Total recognised (expense) income
for the period (127) 526 317
Attributable to:
Equity shareholders (139) 505 289
Minority interest 12 21 28
(127) 526 317
Rounding of figures may result in computational discrepancies.
Group income statement
Quarter Quarter
ended ended
September June
2007 2007
SA Rand million Notes Unaudited Unaudited
Revenue 2 6,549 5,461
Gold income 6,319 5,222
Cost of sales 3 (4,924) (4,132)
(Loss) profit on non-hedge derivatives
and other commodity contracts (2,274) 840
Gross (loss) profit (879) 1,930
Corporate administration and other
expenses (252) (216)
Market development costs (26) (26)
Exploration costs (219) (204)
Other operating expenses 4 (65) (43)
Dividend received from investments 16 -
Operating special items 5 36 86
Operating (loss) profit (1,388) 1,527
Interest received 89 62
Exchange (loss) gain (6) (14)
Fair value adjustment on option component
of convertible bond (140) 223
Finance costs and unwinding of obligations (230) (220)
Share of associates` loss (104) (51)
(Loss) profit before taxation (1,780) 1,527
Taxation 6 (161) (371)
(Loss) profit after taxation from
continuing operations (1,941) 1,155
Discontinued operations
Loss for the period from discontinued
operations 7 (24) (4)
(Loss) profit for the period (1,964) 1,151
Allocated as follows:
Equity shareholders (2,015) 1,083
Minority interest 51 68
(1,964) 1,151
Basic (loss) earnings per ordinary share
(cents) 1
(Loss) profit from continuing operations (708) 386
Loss from discontinued operations (9) (1)
(Loss) profit (716) 385
Diluted (loss) earnings per ordinary
share (cents) 2
(Loss) profit from continuing operations 3 (708) 385
Loss from discontinued operations 3 (9) (1)
(Loss) profit 3 (716) 384
Dividends
- Rm
- cents per Ordinary share
- cents per E Ordinary share
Quarter Nine months Nine months
ended ended ended
September September September
2006 2007 2006
SA Rand million Unaudited Unaudited Unaudited
Revenue 5,707 17,892 15,129
Gold income 5,459 17,204 14,503
Cost of sales (3,987) (13,279) (11,006)
(Loss) profit on non-hedge
derivatives and other commodity
contracts 510 (2,095) (2,437)
Gross (loss) profit 1,981 1,830 1,060
Corporate administration and
other expenses (126) (676) (393)
Market development costs (26) (75) (75)
Exploration costs (112) (599) (301)
Other operating expenses (34) (156) (103)
Dividend received from investments - 16 -
Operating special items (56) 137 (32)
Operating (loss) profit 1,628 477 156
Interest received 60 224 149
Exchange (loss) gain 6 (18) (5)
Fair value adjustment on option
component of convertible bond 421 218 347
Finance costs and unwinding of
obligations (157) (649) (576)
Share of associates` loss (4) (159) (8)
(Loss) profit before taxation 1,955 93 62
Taxation (430) (966) (556)
(Loss) profit after taxation from
continuing operations 1,524 (873) (494)
Discontinued operations
Loss for the period from
discontinued operations (1) (34) (12)
(Loss) profit for the period 1,523 (907) (505)
Allocated as follows:
Equity shareholders 1,470 (1,082) (657)
Minority interest 54 175 152
1,523 (907) (505)
Basic (loss) earnings per
ordinary share (cents) 1
(Loss) profit from continuing
operations 533 (372) (238)
Loss from discontinued operations - (12) (4)
(Loss) profit 533 (384) (242)
Diluted (loss) earnings per
ordinary share (cents) 2
(Loss) profit from continuing
operations 3 533 (372) (238)
Loss from discontinued operations
3 - (12) (4)
(Loss) profit 3 533 (384) (242)
Dividends
- 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 The impact of the diluted earnings per share is anti-dilutive and therefore
equal to the basic earnings per share.
3 Calculated on the diluted weighted average number of ordinary shares.
Rounding of figures may result in computational discrepancies.
Group income statement
Quarter Quarter
ended ended
September June
2007 2007
US Dollar million Notes Unaudited Unaudited
Revenue 2 925 773
Gold income 893 739
Cost of sales 3 (696) (585)
(Loss) profit on non-hedge derivatives
and other commodity contracts (356) 77
Gross (loss) profit (159) 231
Corporate administration and other
expenses (36) (31)
Market development costs (4) (4)
Exploration costs (31) (29)
Other operating expenses 4 (9) (6)
Dividend received from investments 2 -
Operating special items 5 5 12
Operating (loss) profit (231) 174
Interest received 13 9
Exchange (loss) gain (1) (2)
Fair value adjustment on option component
of convertible bond (20) 32
Finance costs and unwinding of obligations (32) (31)
Share of associates` loss (14) (7)
(Loss) profit before taxation (286) 174
Taxation 6 (21) (52)
(Loss) profit after taxation from
continuing operations (308) 121
Discontinued operations
Loss for the period from discontinued
operations 7 (3) (1)
(Loss) profit for the period (311) 121
Allocated as follows:
Equity shareholders (318) 111
Minority interest 7 10
(311) 121
Basic (loss) earnings per ordinary share
(cents) 1
(Loss) profit from continuing operations (112) 39
Loss from discontinued operations (1) -
(Loss) profit (113) 39
Diluted (loss) earnings per ordinary
share (cents) 2
(Loss) profit from continuing operations 3 (112) 39
Loss from discontinued operations 3 (1) -
(Loss) profit 3 (113) 39
Dividends 4
- $m
- cents per Ordinary share
- cents per E Ordinary share
Quarter Nine months Nine months
ended ended ended
September September September
2006 2007 2006
US Dollar million Unaudited Unaudited Unaudited
Revenue 798 2,511 2,288
Gold income 763 2,415 2,193
Cost of sales (557) (1,865) (1,669)
(Loss) profit on non-hedge
derivatives and other commodity
contracts 143 (331) (214)
Gross (loss) profit 349 219 310
Corporate administration and
other expenses (18) (95) (60)
Market development costs (4) (11) (12)
Exploration costs (16) (84) (45)
Other operating expenses (5) (22) (16)
Dividend received from investments - 2 -
Operating special items (7) 19 (3)
Operating (loss) profit 300 29 174
Interest received 8 31 22
Exchange (loss) gain 1 (3) (1)
Fair value adjustment on option
component of convertible bond 58 30 44
Finance costs and unwinding of
obligations (22) (91) (89)
Share of associates` loss - (22) (1)
(Loss) profit before taxation 344 (25) 150
Taxation (69) (133) (97)
(Loss) profit after taxation from
continuing operations 276 (158) 53
Discontinued operations
Loss for the period from
discontinued operations - (5) (2)
(Loss) profit for the period 276 (163) 51
Allocated as follows:
Equity shareholders 268 (188) 28
Minority interest 8 25 23
276 (163) 51
Basic (loss) earnings per
ordinary share (cents) 1
(Loss) profit from continuing
operations 97 (65) 11
Loss from discontinued operations - (2) (1)
(Loss) profit 97 (67) 10
Diluted (loss) earnings per
ordinary share (cents) 2
(Loss) profit from continuing
operations 3 97 (65) 11
Loss from discontinued operations
3 - (2) (1)
(Loss) profit 3 97 (67) 10
Dividends 4
- $m 35 81
- cents per Ordinary share 12 29
- cents per E Ordinary share 6 -
1 Calculated on the basic weighted average number of ordinary shares.
2 The impact of the diluted earnings per share is anti-dilutive and therefore
equal to the basic earnings per share.
3 Calculated on the diluted weighted average number of ordinary shares.
4 Dividends are translated at actual rates on date of payment.
Rounding of figures may result in computational discrepancies.
Group balance sheet
As at As at
September June
2007 2007
SA Rand million Notes Unaudited Unaudited
ASSETS
Non-current assets
Tangible assets 44,834 44,551
Intangible assets 3,036 3,041
Investments in associates 141 245
Other investments 839 956
Inventories 2,275 2,103
Trade and other receivables 477 452
Derivatives - -
Deferred taxation 499 417
Other non-current assets 300 313
52,401 52,078
Current assets
Inventories 4,156 4,112
Trade and other receivables 1,516 1,535
Derivatives 4,078 3,383
Current portion of other non-current
assets 5 5
Cash restricted for use 294 166
Cash and cash equivalents 3,447 2,792
13,495 11,993
Non-current assets held for sale 201 203
13,696 12,196
TOTAL ASSETS 66,098 64,274
EQUITY AND LIABILITIES
Share capital and premium 10 22,265 22,237
Retained earnings and other reserves 11 (2,803) (34)
Shareholders` equity 19,461 22,203
Minority interests 12 401 475
Total equity 19,862 22,678
Non-current liabilities
Borrowings 7,415 9,293
Environmental rehabilitation and other
provisions 3,003 2,929
Provision for pension and post-retirement
benefits 1,207 1,201
Trade, other payables and deferred income 39 131
Derivatives 1,321 1,183
Deferred taxation 7,476 7,821
20,460 22,559
Current liabilities
Current portion of borrowings 4,358 2,056
Trade, other payables and deferred income 4,469 3,880
Derivatives 15,421 11,869
Taxation 1,526 1,232
25,775 19,037
Non-current liabilities held for sale - -
25,775 19,037
Total liabilities 46,235 41,596
TOTAL EQUITY AND LIABILITIES 66,098 64,274
Net asset value - cents per share 7,068 8,072
As at As at
September December
2006 2006
SA Rand million Unaudited Audited
ASSETS
Non-current assets
Tangible assets 44,458 42,382
Intangible assets 3,137 2,909
Investments in associates 327 300
Other investments 846 884
Inventories 1,991 2,006
Trade and other receivables 120 405
Derivatives 48 45
Deferred taxation 419 432
Other non-current assets 95 313
51,440 49,676
Current assets
Inventories 3,592 3,424
Trade and other receivables 1,783 1,300
Derivatives 5,548 4,546
Current portion of other non-current assets 5 5
Cash restricted for use 46 75
Cash and cash equivalents 2,871 3,467
13,845 12,817
Non-current assets held for sale 225 123
14,070 12,940
TOTAL ASSETS 65,510 62,616
EQUITY AND LIABILITIES
Share capital and premium 22,077 22,083
Retained earnings and other reserves 37 (1,188)
Shareholders` equity 22,114 20,895
Minority interests 478 436
Total equity 22,592 21,331
Non-current liabilities
Borrowings 10,497 9,963
Environmental rehabilitation and other provisions 2,671 2,785
Provision for pension and post-retirement benefits 1,267 1,181
Trade, other payables and deferred income 104 150
Derivatives 2,592 1,984
Deferred taxation 7,615 7,722
24,746 23,785
Current liabilities
Current portion of borrowings 290 413
Trade, other payables and deferred income 3,461 3,701
Derivatives 12,794 12,152
Taxation 1,532 1,234
18,077 17,500
Non-current liabilities held for sale 95 -
18,172 17,500
Total liabilities 42,918 41,285
TOTAL EQUITY AND LIABILITIES 65,510 62,616
Net asset value - cents per share 8,208 7,607
Rounding of figures may result in computational discrepancies.
Group balance sheet
As at As at
September June
2007 2007
US Dollar million Notes Unaudited Unaudited
ASSETS
Non-current assets
Tangible assets 6,526 6,350
Intangible assets 442 433
Investments in associates 21 35
Other investments 122 136
Inventories 331 300
Trade and other receivables 69 64
Derivatives - -
Deferred taxation 73 59
Other non-current assets 44 45
7,628 7,423
Current assets
Inventories 605 586
Trade and other receivables 221 219
Derivatives 594 482
Current portion of other non-current
assets 1 1
Cash restricted for use 42 24
Cash and cash equivalents 502 398
1,964 1,709
Non-current assets held for sale 29 29
1,994 1,738
TOTAL ASSETS 9,621 9,161
EQUITY AND LIABILITIES
Share capital and premium 10 3,241 3,169
Retained earnings and other reserves 11 (408) (5)
Shareholders` equity 2,833 3,165
Minority interests 12 58 68
Total equity 2,891 3,232
Non-current liabilities
Borrowings 1,079 1,325
Environmental rehabilitation and other
provisions 437 417
Provision for pension and post-retirement
benefits 176 171
Trade, other payables and deferred income 6 19
Derivatives 192 169
Deferred taxation 1,088 1,115
2,978 3,215
Current liabilities
Current portion of borrowings 634 293
Trade, other payables and deferred income 651 553
Derivatives 2,245 1,692
Taxation 222 176
3,752 2,713
Non-current liabilities held for sale - -
3,752 2,713
Total liabilities 6,730 5,929
TOTAL EQUITY AND LIABILITIES 9,621 9,161
Net asset value - cents per share 1,029 1,150
As at As at
September December
2006 2006
US Dollar million Unaudited Audited
ASSETS
Non-current assets
Tangible assets 5,726 6,054
Intangible assets 404 415
Investments in associates 42 43
Other investments 109 126
Inventories 256 287
Trade and other receivables 16 58
Derivatives 6 6
Deferred taxation 54 62
Other non-current assets 12 44
6,626 7,095
Current assets
Inventories 463 489
Trade and other receivables 230 185
Derivatives 714 649
Current portion of other non-current assets 1 1
Cash restricted for use 6 11
Cash and cash equivalents 370 495
1,783 1,830
Non-current assets held for sale 29 18
1,812 1,848
TOTAL ASSETS 8,438 8,943
EQUITY AND LIABILITIES
Share capital and premium 2,844 3,154
Retained earnings and other reserves 4 (169)
Shareholders` equity 2,848 2,985
Minority interests 62 62
Total equity 2,910 3,047
Non-current liabilities
Borrowings 1,352 1,423
Environmental rehabilitation and other provisions 344 398
Provision for pension and post-retirement benefits 163 169
Trade, other payables and deferred income 13 21
Derivatives 334 283
Deferred taxation 981 1,103
3,187 3,397
Current liabilities
Current portion of borrowings 37 59
Trade, other payables and deferred income 446 528
Derivatives 1,648 1,736
Taxation 197 176
2,328 2,499
Non-current liabilities held for sale 12 -
2,341 2,499
Total liabilities 5,528 5,896
TOTAL EQUITY AND LIABILITIES 8,438 8,943
Net asset value - cents per share 1,057 1,087
Rounding of figures may result in computational discrepancies.
Group cash flow statement
Quarter Quarter Quarter
ended ended ended
September June September
2007 2007 2006
SA Rand million Unaudited Unaudited Unaudited
Cash flow s from operating activities
Receipts from customers 6,498 5,551 5,681
Payments to suppliers and employees (4,168) (3,869) (3,181)
Cash generated from operations 2,330 1,682 2,500
Cash utilised by discontinued
operations (6) (9) (16)
Taxation paid (123) (545) (146)
Net cash inflow from operating
activities 2,201 1,128 2,338
Cash flow s from investing activities
Capital expenditure (1,733) (1,764) (1,542)
Acquisition of assets - (287) -
Proceeds from disposal of tangible
assets 50 91 6
Proceeds from disposal of assets of
discontinued operations 8 6 7
Other investments acquired (7) (16) (406)
Associate loans and acquisitions - 64 (3)
Proceeds from disposal of investments 36 26 409
Dividends from other investments 16 - -
(Increase) decrease in cash
restricted for use (126) 101 (20)
Interest received 77 49 56
Loans advanced - 18 -
Repayment of loans advanced 1 8 8
Net cash outflow from investing
activities (1,679) (1,702) (1,485)
Cash flow s from financing activities
Proceeds from issue of share capital 19 36 12
Share issue expenses - (4) -
Proceeds from borrowings 864 730 496
Repayment of borrowings (208) (182) (294)
Finance costs (241) (33) (169)
Dividends paid (277) (63) (606)
Net cash inflow (outflow) from
financing activities 158 485 (560)
Net increase (decrease) in cash and
cash equivalents 680 (89) 293
Translation (24) (38) 127
Cash and cash equivalents at
beginning of period 2,792 2,919 2,450
Net cash and cash equivalents at end
of period 3,447 2,792 2,871
Cash generated from operations
(Loss) profit before taxation (1,780) 1,527 1,955
Adjusted for:
Movement on non-hedge derivatives and
other commodity contracts 2,725 (195) 120
Amortisation of tangible assets 1,082 1,009 1,034
Finance costs and unwinding of
obligations 230 220 157
Deferred stripping (128) (131) (262)
Interest receivable (89) (62) (60)
Operating special items (36) (86) 56
Amortisation of intangible assets 3 3 4
Fair value adjustment on option
components of convertible bond 140 (223) (421)
Environmental, rehabilitation and
other expenditure 44 (14) (26)
Other non-cash movements 132 181 153
Movements in working capital 6 (547) (210)
2,330 1,682 2,500
Movements in working capital
Increase in inventories (215) (494) (842)
(Increase) decrease in trade and
other receivables (27) 79 (199)
Increase (decrease) in trade and
other payables 248 (131) 831
6 (547) (210)
Nine months Nine months
ended ended
September September
2007 2006
SA Rand million Unaudited Unaudited
Cash flow s from operating activities
Receipts from customers 17,678 15,322
Payments to suppliers and employees (11,574) (9,140)
Cash generated from operations 6,104 6,182
Cash utilised by discontinued operations (24) (13)
Taxation paid (1,001) (415)
Net cash inflow from operating activities 5,079 5,754
Cash flow s from investing activities
Capital expenditure (4,914) (3,671)
Acquisition of assets (287) -
Proceeds from disposal of tangible assets 158 71
Proceeds from disposal of assets of
discontinued operations 16 39
Other investments acquired (63) (424)
Associate loans and acquisitions 1 (66)
Proceeds from disposal of investments 84 447
Dividends from other investments 16 -
(Increase) decrease in cash restricted for use (214) 10
Interest received 186 118
Loans advanced (8) (1)
Repayment of loans advanced 10 36
Net cash outflow from investing activities (5,015) (3,441)
Cash flow s from financing activities
Proceeds from issue of share capital 159 3,061
Share issue expenses (4) (32)
Proceeds from borrowings 1,790 906
Repayment of borrowings (533) (3,636)
Finance costs (486) (504)
Dividends paid (1,033) (858)
Net cash inflow (outflow) from financing
activities (106) (1,063)
Net increase (decrease) in cash and cash
equivalents (42) 1,250
Translation 22 294
Cash and cash equivalents at beginning of
period 3,467 1,328
Net cash and cash equivalents at end of period 3,447 2,871
Cash generated from operations
(Loss) profit before taxation 93 62
Adjusted for:
Movement on non-hedge derivatives and other
commodity contract s 3,514 4,286
Amortisation of tangible assets 3,040 2,844
Finance costs and unwinding of obligations 649 576
Deferred stripping (359) (494)
Interest receivable (224) (149)
Operating special items (137) 64
Amortisation of intangible assets 10 10
Fair value adjustment on option components of
convertible bond (218) (347)
Environmental, rehabilitation and other
expenditure 16 (200)
Other non-cash movements 460 283
Movements in working capital (740) (754)
6,104 6,182
Movements in working capital
Increase in inventories (1,035) (2,014)
(Increase) decrease in trade and other
receivables (236) (211)
Increase (decrease) in trade and other
payables 530 1,471
(740) (754)
Rounding of figures may result in computational discrepancies.
Group cash flow statement
Quarter Quarter Quarter
ended ended ended
September June September
2007 2007 2006
US Dollar million Unaudited Unaudited Unaudited
Cash flow s from operating
activities
Receipts from customers 918 783 798
Payments to suppliers and
employees (590) (545) (452)
Cash generated from operations 328 238 346
Cash utilised by discontinued
operations (1) (1) (2)
Taxation paid (18) (77) (20)
Net cash inflow from operating
activities 310 160 324
Cash flow s from investing
activities
Capital expenditure (245) (249) (220)
Acquisition of assets - (40) -
Proceeds from disposal of
tangible assets 7 13 1
Proceeds from disposal of assets
of discontinued operations 1 1 1
Other investments acquired (1) (2) (62)
Associate loans and acquisitions - 9 -
Proceeds from disposal of
investments 5 4 62
Dividends from other investments 2 - -
(Increase) decrease in cash
restricted for use (18) 14 (3)
Interest received 11 7 7
Loans advanced - 2 -
Repayment of loans advanced - 1 1
Net cash outflow from investing
activities (237) (241) (213)
Cash flow s from financing
activities
Proceeds from issue of share
capital 3 5 2
Share issue expenses - (1) -
Proceeds from borrowings 122 103 75
Repayment of borrowings (29) (26) (41)
Finance costs (34) (5) (24)
Dividends paid (38) (9) (85)
Net cash inflow (outflow) from
financing activities 23 67 (73)
Net increase (decrease) in cash
and cash equivalents 95 (14) 38
Translation 9 11 (11)
Cash and cash equivalents at
beginning of period 398 400 343
Net cash and cash equivalents at
end of period 502 398 370
Cash generated from operations
(Loss) profit before taxation (286) 174 344
Adjusted for:
Movement on non-hedge
derivatives and other commodity
contracts 420 15 (54)
Amortisation of tangible assets 153 143 144
Finance costs and unwinding of
obligations 32 31 22
Deferred stripping (19) (19) (31)
Interest receivable (13) (9) (8)
Operating special items (5) (12) 7
Amortisation of intangible assets - - -
Fair value adjustment on option
components of convertible bond 20 (32) (58)
Environmental, rehabilitation
and other expenditure 6 (2) (3)
Other non-cash movements 19 25 21
Movements in working capital 1 (76) (38)
328 238 346
Movements in working capital
Increase in inventories (50) (102) (55)
(Increase) decrease in trade and
other receivables (8) 3 (8)
Increase in trade and other
payables 60 23 25
1 (76) (38)
Nine months Nine months
ended ended
September September
2007 2006
US Dollar million Unaudited Unaudited
Cash flow s from operating activities
Receipts from customers 2,481 2,329
Payments to suppliers and employees (1,627) (1,401)
Cash generated from operations 854 928
Cash utilised by discontinued operations (3) (2)
Taxation paid (141) (63)
Net cash inflow from operating activities 710 863
Cash flow s from investing activities
Capital expenditure (690) (557)
Acquisition of assets (40) -
Proceeds from disposal of tangible assets 22 11
Proceeds from disposal of assets of
discontinued operations 2 6
Other investments acquired (9) (64)
Associate loans and acquisitions - (10)
Proceeds from disposal of investments 12 68
Dividends from other investments 2 -
(Increase) decrease in cash restricted for use (30) 2
Interest received 26 17
Loans advanced (1) -
Repayment of loans advanced 1 5
Net cash outflow from investing activities (704) (522)
Cash flow s from financing activities
Proceeds from issue of share capital 22 511
Share issue expenses (1) (5)
Proceeds from borrowings 251 140
Repayment of borrowings (75) (594)
Finance costs (68) (78)
Dividends paid (141) (125)
Net cash inflow (outflow) from financing
activities (11) (151)
Net increase (decrease) in cash and cash
equivalents (6) 190
Translation 12 (30)
Cash and cash equivalents at beginning of period 495 209
Net cash and cash equivalents at end of period 502 370
Cash generated from operations
(Loss) profit before taxation (25) 150
Adjusted for:
Movement on non-hedge derivatives and other
commodity contract 530 493
Amortisation of tangible assets 427 431
Finance costs and unwinding of obligations 91 89
Deferred stripping (52) (64)
Interest receivable (31) (22)
Operating special items (19) 7
Amortisation of intangible assets 1 1
Fair value adjustment on option components of
convertible bond (30) (44)
Environmental, rehabilitation and other
expenditure 2 (30)
Other non-cash movements 64 42
Movements in working capital (105) (125)
854 928
Movements in working capital
Increase in inventories (165) (155)
(Increase) decrease in trade and other
receivables (38) 19
Increase in trade and other payables 98 12
(105) (125)
Rounding of figures may result in computational discrepancies.
Notes
for the quarter and nine months ended 30 September 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 nine months ended 30 September
2007.
2. Revenue
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Revenue consists of the
following principal
categories:
Gold income 6,319 5,222 5,459 17,204 14,503
By-products (note 3) 125 178 188 448 477
Dividend received 16 - - 16 -
Interest received 89 62 60 224 149
6,549 5,461 5,707 17,892 15,129
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Revenue consists of the
following principal
categories:
Gold income 893 739 763 2,415 2,193
By-products (note 3) 18 25 26 63 73
Dividend received 2 - - 2 -
Interest received 13 9 8 31 22
925 773 798 2,511 2,288
3. Cost of sales
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Cash operating
costs (3,684) (3,319) (3,095) (10,201) (8,591)
By-products
(note 2) 125 178 188 448 477
(3,559) (3,141) (2,907) (9,753) (8,114)
Other cash costs (176) (165) (167) (518) (422)
Total cash costs (3,735) (3,305) (3,075) (10,271) (8,536)
Retrenchment costs (27) (9) (14) (44) (38)
Rehabilitation
and other
non-cash costs (85) (19) (23) (124) (87)
Production costs (3,847) (3,333) (3,111) (10,439) (8,661)
Amortisation of
tangible
assets (1,082) (1,009) (1,034) (3,040) (2,844)
Amortisation of
intangible assets (3) (3) (4) (10) (10)
Total production
costs (4,933) (4,346) (4,148) (13,489) (11,515)
Inventory change 9 214 161 209 509
(4,924) (4,132) (3,987) (13,279) (11,006)
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Cash operating costs (521) (469) (432) (1,433) (1,304)
By-products (note 2) 18 25 26 63 73
(503) (444) (406) (1,370) (1,231)
Other cash costs (25) (23) (23) (73) (64)
Total cash costs (528) (468) (429) (1,443) (1,295)
Retrenchment costs (4) (1) (2) (6) (6)
Rehabilitation and other
non-cash costs (12) (3) (3) (17) (13)
Production costs (544) (471) (434) (1,466) (1,314)
Amortisation of tangible
assets (153) (143) (144) (427) (431)
Amortisation of
intangible assets - - - (1) (1)
Total production costs (697) (615) (579) (1,895) (1,746)
Inventory change 1 30 22 30 77
(696) (585) (557) (1,865) (1,669)
Rounding of figures may result in computational discrepancies.
4. Other operating expenses
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Pension and medical defined
benefit provisions (25) (25) (20) (75) (58)
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 (40) (6) (14) (67) (41)
Other - (12) - (14) (4)
(65) (43) (34) (156) (103)
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Pension and medical defined
benefit provisions (4) (3) (3) (11) (9)
Claims filed by former
employees in respect of loss
of employment, work-related
accident injuries and
diseases, governmental
fiscal claims and costs of old
tailings operations (5) (1) (2) (9) (6)
Other - (2) - (2) (1)
(9) (6) (5) (22) (16)
5. Operating special items
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Under provision of indirect
taxes - (6) (1) (6) (27)
VAT not recoverable - - (58) - (58)
Impairment of tangible
assets (note 8) - - - (1) (3)
Recovery of loan - - - 23 -
Profit on disposal of assets
(note 8) 36 92 3 122 56
36 86 (56) 137 (32)
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Under provision of indirect
taxes - (1) (8) (1) (4)
VAT not recoverable - - - - (8)
Impairment of tangible
assets (note 8) - - - - -
Recovery of loan - - - 3 -
Profit on disposal of assets
(note 8) 5 13 1 17 8
5 12 (7) 19 (3)
6. Taxation
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Current tax
Normal taxation (443) (333) (519) (1,218) (1,110)
Disposal of tangible
assets
(note 8) (9) (18) (4) (31) (11)
Over (under) provision
prior
year 18 23 - (26) -
(434) (328) (523) (1,275) (1,121)
Deferred taxation
Temporary differences 10 31 15 42 (141)
Unrealised non-hedge
derivatives and other
commodity contracts 233 22 77 337 705
Disposal of tangible
assets
(note 8) 31 (6) - 20 1
Change in estimated
deferred taxation - (90) - (90) -
274 (43) 92 309 565
Total taxation (161) (371) (430) (966) (556)
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Current tax
Normal taxation (63) (46) (72) (171) (164)
Disposal of tangible assets
(note 8) (1) (3) (1) (4) (2)
Over (under) provision prior
year 3 3 - (4) -
(61) (46) (73) (179) (166)
Deferred taxation
Temporary differences 2 4 1 6 (22)
Unrealised non-hedge
derivatives and other
commodity contracts 34 4 3 49 91
Disposal of tangible assets
(note 8) 4 (1) - 3 -
Change in estimated
deferred taxation - (13) - (13) -
40 (6) 4 45 69
Total taxation (21) (52) (69) (133) (97)
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 Nine months ended
Sep Jun Sep Sep Sep
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Gold income 1 2 3 5 19
Cost of Sales (6) (5) (6) (16) (20)
Gross loss (5) (2) (3) (11) -
Taxation (19) (2) 2 (23) (11)
Loss from discontinued
operations (24) (4) (1) (34) (12)
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Gold income - - 1 1 3
Cost of Sales (1) (1) (1) (2) (3)
Gross loss (1) (1) - (1) -
Taxation (3) - - (3) (2)
Loss from discontinued
operations (3) (1) - (5) (2)
8. Headline (loss) earnings
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
The (loss) profit
attributable
to equity shareholders has
been adjusted by the
following to arrive at
headline (loss) earnings:
(Loss) profit
attributable to
equity shareholders (2,015) 1,083 1,470 (1,082) (657)
Impairment of tangible
assets (note 5) - - - 1 3
Profit on disposal of
assets
(note 5) (36) (92) (3) (122) (56)
Impairment of associate 101 50 - 151 -
Taxation on items above -
current portion (note 6) 9 18 4 31 11
Taxation on items above -
deferred portion (note 6) (31) 6 - (20) (1)
Headline (loss) earnings (1,972) 1,066 1,470 (1,042) (700)
Cents per share (1)
Headline (loss) earnings (701) 379 533 (370) (258)
Quarter ended Nine months ended
Sep Jun Sep Sep Sep
2007 2007 2006 2007 2006
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
The (loss) profit attributable
to equity shareholders has
been adjusted by the
following to arrive at
headline (loss) earnings:
(Loss) profit attributable to
equity shareholders (318) 111 268 (188) 28
Impairment of tangible
assets (note 5) - - - - -
Profit on disposal of assets
(note 5) (5) (13) (1) (17) (8)
Impairment of associate 14 7 - 21 -
Taxation on items above -
current portion (note 6) 1 3 1 4 2
Taxation on items above -
deferred portion (note 6) (4) 1 - (3) -
Headline (loss) earnings (312) 109 268 (182) 21
Cents per share (1)
Headline (loss) earnings (111) 39 97 (65) 8
(1) Calculated on the basic weighted average number of ordinary shares.
Rounding of figures may result in computational discrepancies.
9. Shares
Quarter ended
Sep Jun Sep
2007 2007 2006
Unaudited Unaudited Unaudited
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 276,919,836 276,836,030 275,258,118
E ordinary shares in issue 4,077,860 4,115,930 -
Total ordinary shares 280,997,696 280,951,960 275,258,118
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 276,853,218 276,792,157 275,225,150
E Ordinary shares 4,093,133 4,152,725 -
Fully vested options 455,473 308,961 446,062
Weighted average number of
shares 281,401,824 281,253,843 275,671,212
Dilutive potential of share
options (1) - 568,077 124,674
Diluted number of ordinary
shares 281,401,824 281,821,920 275,795,886
Nine months ended
Sep Sep
2007 2006
Unaudited Unaudited
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 276,919,836 275,258,118
E ordinary shares in issue 4,077,860 -
Total ordinary shares 280,997,696 275,258,118
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 276,698,228 271,143,179
E Ordinary shares 4,131,425 -
Fully vested options 548,859 445,519
Weighted average number of shares 281,378,512 271,588,698
Dilutive potential of share options (1) - 124,674
Diluted number of ordinary shares 281,378,512 271,713,372
(1) The calculation of diluted loss per ordinary share for the quarter and nine
months ended 30 September 2007 did not assume the effect of 823,608 and 833,584
shares respectively, issuable upon the exercise of share incentive options as
their effects are anti-dilutive for these periods.
10. Ordinary share capital and premium
As at
Sep Jun Sep Dec
2007 2007 2006 2006
Unaudited Unaudited Unaudited Audited
SA Rand million
Balance at beginning of period 23,045 23,045 19,362 19,362
Ordinary shares issued 170 146 3,027 3,330
E ordinary shares (cancelled) issued (14) (9) - 353
Translation - - - -
Sub-total 23,201 23,182 22,389 23,045
Redeemable preference shares held
within the group (312) (312) (312) (312)
Ordinary shares held within the
group (285) (289) - (297)
E Ordinary shares held within the
group (339) (344) - (353)
Balance at end of period 22,265 22,237 22,077 22,083
As at
Sep Jun Sep Dec
2007 2007 2006 2006
Unaudited Unaudited Unaudited Audited
US Dollar million
Balance at beginning of period 3,292 3,292 3,055 3,055
Ordinary shares issued 22 19 506 550
E ordinary shares (cancelled) issued (1) (1) - 50
Translation 63 (7) (677) (363)
Sub-total 3,376 3,303 2,884 3,292
Redeemable preference shares held
within the group (45) (44) (40) (45)
Ordinary shares held within the group (41) (41) - (43)
E Ordinary shares held within the group (49) (49) - (50)
Balance at end of period 3,241 3,169 2,844 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 (657)
Dividends (742)
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 4,468
Balance at September 2006 (284) 138 2,558
Balance at December 2006 (214) 138 436
Loss attributable to equity
shareholders (1,082)
Dividends (919)
Transactions with minorities (79)
Net loss on cash flow hedges
removed from
equity and reported in income
Net loss on cash flow hedges
Loss on available-for-sale
financial assets
Deferred taxation on items above
Share-based payment for share
awards and
BEE transaction
Translation 66
Balance at September 2007 (2,294) 138 502
Other
comprehen-
Actuarial sive
(losses) gains income Total
SA Rand million
Balance at December 2005 (227) (1,655) (2,539)
Loss attributable to equity
shareholders (657)
Dividends (742)
Net loss on cash flow hedges
removed from
equity and reported in income 867 867
Net loss on cash flow hedges (1,708) (1,708)
Gain on available-for-sale
financial assets 147 147
Deferred taxation on items above 346 346
Share-based payment for share
awards and
BEE transaction 31 31
Translation 1 (177) 4,292
Balance at September 2006 (226) (2,149) 37
Balance at December 2006 (45) (1,503) (1,188)
Loss attributable to equity
shareholders (1,082)
Dividends (919)
Transactions with minorities (79)
Net loss on cash flow hedges
removed from
equity and reported in income 900 900
Net loss on cash flow hedges (655) (655)
Loss on available-for-sale
financial assets (24) (24)
Deferred taxation on items above 1 19 20
Share-based payment for share
awards and
BEE transaction 156 156
Translation (1) 3 68
Balance at September 2007 (45) (1,104) (2,803)
Foreign
Non- currency
Retained distributable translation
earnings reserves reserve
US Dollar million
Balance at December 2005 (58) 22 (66)
Profit attributable to equity
shareholders 28
Dividends (107)
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 (4) 495
Balance at September 2006 (137) 18 429
Balance at December 2006 (209) 20 241
Loss attributable to equity
shareholders (188)
Dividends (125)
Transactions with minorities (12)
Net loss on cash flow hedges
removed from
equity and reported in income
Net loss on cash flow hedges
Loss on available-for-sale
financial assets
Deferred taxation on items above
Share-based payment for share
awards and
BEE transaction
Translation 32
Balance at September 2007 (534) 20 273
Other
comprehen-
Actuarial sive
(losses) gains income Total
US Dollar million
Balance at December 2005 (36) (261) (399)
Profit attributable to equity
shareholders 28
Dividends (107)
Net loss on cash flow hedges
removed from
equity and reported in income 154 154
Net loss on cash flow hedges (220) (220)
Gain on available-for-sale
financial assets 16 16
Deferred taxation on items above 32 32
Share-based payment for share
awards and
BEE transaction 5 5
Translation 7 (3) 495
Balance at September 2006 (29) (277) 4
Balance at December 2006 (6) (215) (169)
Loss attributable to equity
shareholders (188)
Dividends (125)
Transactions with minorities (12)
Net loss on cash flow hedges
removed from
equity and reported in income 129 129
Net loss on cash flow hedges (95) (95)
Loss on available-for-sale
financial assets (3) (3)
Deferred taxation on items above (5) (5)
Share-based payment for share
awards and
BEE transaction 25 25
Translation 3 35
Balance at September 2007 (6) (161) (408)
Rounding of figures may result in computational discrepancies.
12. Minority interests
As at
Sep Jun Sep 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 175 124 152 202
Distributions to minorities (114) (88) (116) (171)
Acquisition of minority interest (1) (95) - - -
Other balance sheet movements 4 - - -
Net loss on cash flow hedges removed from
equity and reported in income 10 4 7 10
Net loss on cash flow hedges (7) - (9) (12)
Translation (8) (1) 70 33
Balance at end of period 401 475 478 436
As at
Sep Jun Sep 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 25 17 23 30
Distributions to minorities (16) (12) (18) (25)
Acquisition of minority interest (1) (13) - - -
Other balance sheet movements - - - -
Net loss on cash flow hedges removed from
equity and reported in income 1 1 1 2
Net loss on cash flow hedges (1) - (1) (2)
Translation - - (2) (2)
Balance at end of period 58 68 62 62
(1) Effective 1 September 2007, the minority shareholdings of the International
Finance Corporation (10%) and Government of Ghana (5%) were acquired and
Iduapriem is now wholly-owned by AngloGold Ashanti.
13. Exchange rates
Sep Jun Sep Dec
2007 2007 2006 2006
Unaudited Unaudited Unaudited Audited
Rand/US dollar average
for the year to date 7.12 7.14 6.59 6.77
Rand/US dollar average
for the quarter 7.08 7.07 7.15 7.31
Rand/US dollar closing 6.87 7.02 7.76 7.00
Rand/Australian dollar
average for the year to
date 5.85 5.78 4.93 5.10
Rand/Australian dollar
average for the quarter 6.00 5.88 5.41 5.63
Rand/Australian dollar
closing 6.04 5.96 5.82 5.53
BRL/US dollar average for
the year to date 2.00 2.04 2.18 2.18
BRL/US dollar average for
the quarter 1.92 1.97 2.17 2.15
BRL/US dollar closing 1.85 1.92 2.17 2.14
14. Capital commitments
Sep Jun Sep 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 4,406 4,216 2,910 2,475
Sep Jun Sep 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 641 601 375 354
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.
15. Contingent liabilities
AngloGold Ashanti`s contingent liabilities at 30 September 2007 are detailed
below:
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 ($15m). 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 exports 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 $36m. Although MSG requested the TARE in early
2004, the TARE, which authorized 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 $22m. 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 $7m.
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.
16. 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 $37m at 30 September 2007 (30 June 2007: attributable $32m). The
last audited value added tax return was for the period ended 31 March 2007 and
at the balance sheet date an attributable $29m was still outstanding and $8m 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 September 2007 (30 June 2007: attributable $8m). 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 September 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
$18m at 30 September 2007 (30 June 2007: $17m). The last audited value added
tax return was for the period ended 30 April 2007 and at the balance sheet date
$15m 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 $30m at 30
September 2007 (30 June 2007: $26m). 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 $19m have been lodged with the Customs and Excise
authorities, which are still outstanding, whilst claims for refund of $11m 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%.
17. 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.
Effective 1 September 2007, the minority shareholdings of the International
Finance Corporation (10%) and Government of Ghana (5%) were acquired and
Iduapriem is now wholly-owned by AngloGold Ashanti.
18. Borrowings
AngloGold Ashanti`s borrowings are interest bearing.
19. Announcements
On 11 July 2007, AngloGold Ashanti announced that Mr A H Calver resigned from
the board as Mr W A Nairn`s alternate.
On 31 July 2007, the board announced the retirement of Mr R M Godsell,
AngloGold Ashanti`s Chief Executive Officer, from the board and company,
effective 30 September 2007. Mark Cutifani, the Chief Operating Officer of CVRD
INCO would succeed Mr R M Godsell as Chief Executive Officer. In addition, Mr R
Carvalho Silva, Chief Operating Officer - International gave notice of his
intention to leave AngloGold Ashanti, effective 30 September 2007 and Mr N F
Nicolau, currently Chief Operating Officer - Africa would assume responsibility
as Chief Operating Officer for all operations.
On 18 September 2007, AngloGold Ashanti announced that Mr M Cutifani was
appointed to the board effective 17 September 2007, as Chief Executive Officer
designate. Mr M Cutifani would succeed Mr R M Godsell as Chief Executive
Officer, on his retirement with effect from 1 October 2007.
On 1 October 2007, AngloGold Ashanti noted the announcement by Anglo American
plc that it intended to offer for sale, 61 million ordinary shares of AngloGold
Ashanti in the form of ordinary shares and American Depositary Shares pursuant
to the registration of such securities under AngloGold Ashanti`s automatic
shelf registration statement. Goldman Sachs International acted as the global
co-ordinator for the offering and Goldman Sachs International and UBS
Investment Bank were joint book runners for the offering.
On 2 October 2007, AngloGold Ashanti noted the announcement by Anglo American
plc that Anglo American had completed an offering of 67.1 million ordinary
shares of AngloGold Ashanti in the form of ordinary shares and American
Depositary Shares (ADS) priced at US$44.00 per ADS (US$44.11 inclusive of
uncertificated securities tax) and ZAR300.61 per ordinary share (exclusive of
uncertificated securities tax). The offering which was launched on 1 October
2007, was increased from the earlier announced 61 million ordinary shares. The
offering price represented discounts of 6.16% and 7.84% to the closing prices
of the ADSs and ordinary shares in New York and Johannesburg respectively on
Friday, 28 September 2007. The offering was scheduled to settle on 9 October
2007. After the completion of the offering, Anglo American`s holding in
AngloGold Ashanti would be 17.3%.
Following the settlement of the secondary offering and the subsequent reduction
in shareholding, all the directors representing Anglo American plc on the
AngloGold Ashanti board, namely Mrs C Carroll and Mr R Medori, together with
his alternate Mr P G Whitcutt resigned from the AngloGold Ashanti board,
effective 9 October 2007.
20. Dividend
Interim dividend No. 102 of 90 South African cents or 6.0721 UK pence or 11.1
new cedis per share was paid to registered shareholders on 31 August 2007,
while a dividend of 2.997 Australian cents per CHESS Depositary Interest (CDI)
was paid on the same day. On 3 September 2007, a dividend of 0.111 new cedis
per Ghanaian Depositary Share (GhDS) was paid to holders thereof. Each CDI
represents one-fifth of an ordinary share, and 100 GhDSs represent one ordinary
share. A dividend was paid to holders of American Depositary Receipts (ADRs) on
10 September 2007 at a rate of 12.435 US cents per American Depositary Share
(ADS). Each ADS represents one ordinary share.
In addition, the directors 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 were paid on Friday, 31 August 2007.
21. Detailed report
This report contains a summary of the results of AngloGold Ashanti`s
operations. A detailed report appears on the internet and is obtainable in
printed format from the investor relations contacts, whose details, along with
the website address, appear at the end of this report.
By order of the Board
R P EDEY M CUTIFANI
Chairman Chief Executive Officer
31 October 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
M Cutifani
(Chief Executive Officer)
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
J H Mensah ##
W A Nairn
Prof W L Nkuhlu
S M Pityana
S R Thompson *
* British # American ## Ghanaian
Australian
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 BuyDIRECT SM
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: 01/11/2007 07:55:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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