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ANG
ANANO
ANG - Anglogold Ashanti - Group results for the quarter and six months
ended 30 June 2008 and dividend declaration
ANGLOGOLD ASHANTI LIMITED
Registration No. 1944/017354/06
Incorporated in the Republic of South Africa
Share codes:
ISIN: ZAE000043485
JSE: ANG
LSE: AGD
NYSE: AU
ASX: AGG
GhSE (Shares): AGA
GhSE (GhDS): AAD
Euronext Paris: VA
Euronext Brussels: ANG
Report to shareholders
for the quarter and six months ended 30 June 2008
Group results for the quarter and six months ended 30 June 2008....
- Significant progress on safety on all fronts continues, including 110
fatality free days achieved.
- Gold production at 1.25Moz, 5% higher than prior quarter and 3% above
guidance.
- Total cash costs at $434/oz, better than guidance and marginally higher than
March quarter.
- Highly successful execution of rights issue with $1.7bn raised and an
exceptional 98% take up from rights holders.
- Hedge book commitments reduced by 3.15Moz during the quarter, 3 months ahead
of schedule, with commitments down to 6.88Moz.
- 1m pounds of uranium contracts cancelled, providing increased exposure to
spot uranium prices from 2009.
- Following hedge book reductions, adjusted headline loss at $946m. Adjusted
headline earnings, normalised for hedge reduction and other once-off items at
$50m.
- Interim dividend of 50 South African cents per share and 6.7 US cents per
share declared for the six months ended 30 June 2008.
Quarter
ended ended
Jun Mar
2008 2008
SA rand / Metric
Operating review
Gold
Produced - kg / oz (000) 38,984 37,210
Price received - R/kg / $/oz (44,303) 183,945
Price received normalised
for accelerated settlement of
non-hedge derivatives - R/kg / $/oz 178,796 183,945
Total cash costs - R/kg / $/oz 108,195 104,461
Total production costs - R/kg / $/oz 138,115 136,200
Financial review
Gross profit (loss) - Rm / $m 787 (3,359)
Gross (loss) profit adjusted for
the gain (loss) on unrealised
non-hedge derivatives and other
commodity contracts - Rm / $m (6,909) 2,095
Adjusted gross profit normalised
for accelerated settlement of
non-hedge derivatives - Rm / $m 1,726 2,095
(Loss) profit attributable to
equity
shareholders - Rm / $m (817) (3,812)
Headline (loss) earnings 1 - Rm / $m (1,354) (3,880)
Headline (loss) earnings
adjusted for the gain (loss)
on unrealised non-hedge
derivatives, other commodity
contracts and fair value
adjustments on convertible bond - Rm / $m (7,518) 813
Capital expenditure - Rm / $m 2,357 1,930
(Loss) profit per ordinary share - cents/share
Basic (289) (1,351)
Diluted (289) (1,351)
Headline 1 (479) (1,376)
Headline (loss) earnings adjusted
for the gain (loss)
on unrealised non-hedge
derivatives, other commodity
contracts and fair value
adjustments on convertible bond - cents/share (2,661) 288
Six months
ended ended
Jun Jun
2008 2007
SA rand / Metric
Operating review
Gold
Produced - kg / oz (000) 76,194 83,198
Price received - R/kg / $/oz 67,390 138,807
Price received normalised
for accelerated settlement of
non-hedge derivatives - R/kg / $/oz 181,303 138,807
Total cash costs - R/kg / $/oz 106,429 76,406
Total production costs - R/kg / $/oz 137,238 99,872
Financial review
Gross profit (loss) - Rm / $m (2,573) 2,708
Gross (loss) profit adjusted
for the gain (loss)
on unrealised non-hedge
derivatives and other
commodity contracts - Rm / $m (4,814) 3,520
Adjusted gross profit normalised
for accelerated settlement of
non-hedge derivatives - Rm / $m 3,821 3,520
(Loss) profit attributable to equity
shareholders - Rm / $m (4,630) 933
Headline (loss) earnings 1 - Rm / $m (5,234) 930
Headline (loss) earnings
adjusted for the gain (loss)
on unrealised non-hedge
derivatives, other commodity
contracts and fair value
adjustments on convertible bond - Rm / $m (6,705) 1,280
Capital expenditure - Rm / $m 4,287 3,396
(Loss) profit per ordinary share - cents/share
Basic (1,639) 332
Diluted (1,639) 331
Headline 1 (1,853) 331
Headline (loss) earnings
adjusted for the gain (loss)
on unrealised non-hedge
derivatives, other commodity
contracts and fair value
adjustments on convertible bond - cents/share (2,374) 455
Quarter
ended ended
Jun Mar
2008 2008
US dollar / Imperial
Operating review
Gold
Produced - kg / oz (000) 1,253 1,196
Price received - R/kg / $/oz (157) 755
Price received normalised for
accelerated
settlement of non-hedge
derivatives - R/kg / $/oz 717 755
Total cash costs - R/kg / $/oz 434 430
Total production costs - R/kg / $/oz 554 561
Financial review
Gross profit (loss) - Rm / $m 36 (77)
Gross (loss) profit adjusted
for the gain (loss)
on unrealised non-hedge
derivatives and other
commodity contracts - Rm / $m (866) 274
Adjusted gross profit normalised
for accelerated
settlement of non-hedge derivatives - Rm / $m 223 274
(Loss) profit attributable to equity
shareholders - Rm / $m (168) (142)
Headline (loss) earnings 1 - Rm / $m (237) (151)
Headline (loss) earnings adjusted
for the gain (loss) on unrealised
non-hedge derivatives, other
commodity contracts and fair value
adjustments on convertible bond - Rm / $m (946) 105
Capital expenditure - Rm / $m 304 257
(Loss) profit per ordinary share - cents/share
Basic (59) (50)
Diluted (59) (50)
Headline 1 (84) (54)
Headline (loss) earnings
adjusted for the gain (loss)
on unrealised non-hedge
derivatives, other commodity
contracts and fair value
adjustments on convertible bond - cents/share (335) 37
Six months
ended ended
Jun Jun
2008 2007
US dollar / Imperial
Operating review
Gold
Produced - kg / oz (000) 2,450 2,675
Price received - R/kg / $/oz 289 604
Price received normalised
for accelerated settlement
of non-hedge derivatives - R/kg / $/oz 736 604
Total cash costs - R/kg / $/oz 433 333
Total production costs - R/kg / $/oz 558 435
Financial review
Gross profit (loss) - Rm / $m (41) 378
Gross (loss) profit adjusted
for the gain (loss)
on unrealised non-hedge
derivatives and other
commodity contracts - Rm / $m (592) 492
Adjusted gross profit
normalised for accelerated
settlement of non-hedge
derivatives - Rm / $m 497 492
(Loss) profit attributable
to equity shareholders - Rm / $m (310) 131
Headline (loss) earnings 1 - Rm / $m (388) 130
Headline (loss) earnings
adjusted for the gain (loss)
on unrealised non-hedge
derivatives, other commodity
contracts and fair value
adjustments on convertible bond - Rm / $m (842) 179
Capital expenditure - Rm / $m 561 476
(Loss) profit per ordinary share - cents/share
Basic (110) 47
Diluted (110) 46
Headline 1 (137) 46
Headline (loss) earnings
adjusted for the gain (loss)
on unrealised non-hedge
derivatives, other commodity
contracts and fair value
adjustments on convertible bond - cents/share (298) 64
Notes: 1. Refer to note 9 "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 June 2008
Total
cash
Production costs
% %
oz (000) Variance 1 $/oz Variance 1
Mponeng 160 21 227 (10)
AngloGold Ashanti Brasil
Mineracao 82 14 323 2
TauTona 91 23 339 (12)
Cripple Creek & Victor J.V. 59 2 301 6
Siguiri 2 86 (8) 434 -
Kopanang 96 7 316 (10)
Morila 2 46 15 426 4
Sunrise Dam 114 (4) 553 22
Great Noligwa 96 (10) 432 8
Iduapriem 46 (2) 493 9
Sadiola 2 45 25 408 1
Serra Grande 2 22 5 307 6
Yatela 2 15 (12) 573 10
Tau Lekoa 35 - 554 5
Savuka 18 29 440 20
Navachab 16 7 599 22
Geita 74 16 630 (12)
Moab Khotsong 28 12 512 (11)
Cerro Vanguardia 2 27 (4) 870 57
Obuasi 79 (9) 612 18
Other 18 (18)
AngloGold Ashanti 1,253 5 434 1
Gross
(loss) profit
adjusted for Adjusted
the gain (loss) gross
on unrealised profit (loss)
non-hedge normalised
derivatives for accelerated
and other settlement
commodity of non-hedge
contracts derivatives
%
$m $m Variance 1
Mponeng (75) 65 25
AngloGold Ashanti Brasil Mineracao (58) 24 (4)
TauTona (58) 20 18
Cripple Creek & Victor J.V. (37) 19 (14)
Siguiri 2 (31) 17 (19)
Kopanang (73) 12 (37)
Morila 2 (30) 12 9
Sunrise Dam (83) 10 (57)
Great Noligwa (86) 7 (73)
Iduapriem (33) 7 (30)
Sadiola 2 (43) 7 (36)
Serra Grande 2 (11) 6 (14)
Yatela 2 (14) 3 (25)
Tau Lekoa (33) 3 -
Savuka (12) 2 (33)
Navachab (8) - (100)
Geita (66) (4) 69
Moab Khotsong (30) (5) (600)
Cerro Vanguardia 2 (24) (6) (186)
Obuasi (72) (8) (500)
Other 12 31 72
AngloGold Ashanti (866) 223 (19)
1 Variance June 2008 quarter on March 2008 quarter - increase (decrease).
2 Attributable.
Rounding of figures may result in computational discrepancies.
Financial and operating review
OVERVIEW FOR THE QUARTER
The encouraging safety trend from the first quarter continued, with the company
recording significant improvements in injury frequency rates. For the first
time in its history, the company achieved 110 days without a fatality, with no
fatalities recorded during the second quarter. Immediately after the quarter
close, however, TauTona experienced a seismic event, resulting in one fatality.
While we are saddened by our most recent loss, we are encouraged with progress
and the commitment of all our employees on this important aspect of our
business. Since launching "Safety is our first value" campaign on 8 November
2007, the company has reported a 75% decrease in fatal incidents.
The South African operations reported a 13% reduction in the lost time injury
frequency rate, driven by an 11% improvement in stope risk assessments.
Seismicity related fall of ground accidents have now declined for the sixth
consecutive quarter.
For the quarter, seven operations remained injury free; Navachab, Sadiola,
Yatela, Morila, CC&V, Serra Grande and Sunrise Dam. Mponeng was awarded the
Mine Health and Safety Council`s award for surpassing the 1 million
fatality-free shifts milestone. This is the second time in this deep level
South African mine`s history that this accomplishment has been achieved.
The company once again delivered on its production forecast for the quarter.
Gold production was 5% higher at 1.25Moz, reflecting higher production in South
Africa, Brazil, Mali and Tanzania. Total cash costs for the group increased
marginally from $430/oz to $434/oz, driven primarily by input cost inflation,
partially offset by the higher gold production and stockpile movements. Gold
production exceeded guidance for the second quarter, in part due to improved
performances from Mponeng, TauTona and Geita. Improved production positively
impacted reported costs for the second consecutive quarter.
The South African operations had a solid quarter, with gold production 9%
higher at 16,867kg, led by an increase in gold production of 22% from both
Mponeng and TauTona. Mponeng increased gold production as a result of improved
face length availability, higher face advance, treatment of additional surface
stockpile and increased vamping activities; while TauTona benefited from higher
face advance and increased reef development. Great Noligwa saw gold production
reduce by 10% to 2,997kg, following a ten-day stoppage resulting from safety
interventions. Total cash costs for the South African operations reduced
marginally to R87,459/kg ($352/oz), following the improved gold production and
improved by-product contribution, partially offset by the higher inflationary
impact.
In Brazil, AngloGold Ashanti Brasil Mineracao had a strong quarter with gold
production 14% higher at 82,000oz, through the mining of an increased
proportion of higher grade ore from the Cuiaba? operation. Total cash costs for
the Brazil operations were marginally higher at $341/oz, principally due to the
impact of the stronger local currency.
The Mali assets had a strong performance with gold production increasing 13% to
106,000oz, with Morila 15% higher on the back of improved throughput and grade,
while Sadiola was 25% higher due to an increase in yield following improved
performance of the gravity circuit which resulted in a higher overall recovery.
Total cash costs for the Mali operations was 4% higher at $432/oz, following
inflationary pressures on fuel in particular, combined with the effect of a
stronger US dollar.
Geita in Tanzania showed an improvement from the prior quarter, as grades
stabilised and gold production increased 16% to 74,000oz. Consequently, total
cash costs reduced 12% to $630/oz. Progress on the performance turnaround was
promising for the quarter, and the recovery plan which was presented to the
Executive Management team has been endorsed for implementation.
In Ghana, Obuasi had a difficult quarter with gold production declining 9%,
following lower delivered grades and lower throughput resulting from
unscheduled plant stoppages for maintenance and the negative impact of power
shortages. Total cash costs for Obuasi increased by 18% to $612/oz. Performance
at Obuasi this quarter was unacceptable. While good progress was made in
identifying the steps necessary to effect the targeted performance turnaround,
actual control in key areas was below expectations. Additional steps are being
taken to support the operating team, with the establishment of a dedicated
project recovery team.
The company`s rights offer was completed in early July 2008, raising $1.7bn.
The transaction was highly successful, with a 98% take up from rights holders
to acquire rights offer shares. Applications for additional rights shares
representing nearly six times the number of rights offer shares were received.
The strong reception for the rights offer saw the company`s share price
actually increasing between announcement and completion of the rights offer,
despite difficult market conditions.
This encouraged the company to make substantial progress ahead of schedule in
the reduction of the hedge book. The company capitalised on a weaker gold
market during the quarter to execute a combination of delivery into and early
settlement of non-hedge derivatives, and the number of committed ounces reduced
from 10.03Moz at the end of the March 2008 quarter to 6.88Moz at 30 June 2008.
The restructuring resulted in the received price being negative and adjusted
headline earnings impacted by a corresponding after tax charge of $977m.
In addition, the company also cancelled 1.0 million pounds of uranium contracts
during the quarter, which represents a reduction of 30% of uranium contracts
outstanding as at 1 January 2008, at an after tax charge of $11m. This will
position AngloGold Ashanti to begin to participate in the spot uranium market
from 2009, which in turn will provide by-product revenue, to the benefit of
total cash costs.
As a result of the reduction in gold non-hedge derivatives ($977m) and uranium
commodity contracts ($11m), an adjusted headline loss of $946m was recorded for
the quarter. Excluding the impact of these adjustments, adjusted headline
earnings would have been $50m against the $105m recorded in the prior quarter.
The reduced earnings is the result of once-off tax credits received in the
prior quarter and the impact of a $38/oz lower received price.
On 16 May 2008 the sale of various exploration interests in Colombia to B2Gold
Corporation (B2Gold) was completed, with the company receiving 25m common
shares and 21.4m share purchase warrants in B2Gold, which could result in a
fully diluted interest in B2Gold of approximately 26%. This transaction allows
AngloGold Ashanti to build on its strategy in Colombia of continuing to
leverage its first mover advantage and developing its exploration portfolio,
which includes its initial Inferred Resource of 12.9Moz at its 100% owned La
Colosa project.
On 1 July 2008, shareholders of Golden Cycle Gold Corporation approved the
acquisition by AngloGold Ashanti, in an all share transaction that has resulted
in CC&V being fully owned by the company.
AngloGold Ashanti also sold its 50% interest in Nufcor International Limited, a
London based uranium marketing, trading and advisory business, to Constellation
Energy Commodities Group for gross proceeds of $50m. This transaction enables
the company to focus on its core gold and uranium mining business, while
retaining its 100% interest in Nuclear Fuels Corporation of South Africa (Pty)
Limited, its local uranium calcining business.
In relation to power management in South Africa, Eskom, the national provider,
has maintained a steady power supply of 96.5% during the second quarter. The
company successfully operated at full production utilising less than 94% of
power supply, following continuing the implementation of energy saving
initiatives.
Eskom has also undertaken to continue to provide consistent power throughout
the winter period and subject to this stable power supply, production for 2008
is expected to be between 4.9Moz to 5.1Moz. Given the higher inflationary
trends currently being experienced, higher power tariffs in South Africa and
Ghana, total cash costs are anticipated to be between $450/oz and $460/oz,
based on the following average exchange rate assumptions: R7.73/$, A$/$0.94,
BRL1.66/$ and Argentinean peso 3.15/$.
Production for the third quarter of 2008, based on a 96.5% stabilised power in
South Africa, is estimated to be 1.27Moz. Given winter power tariffs in South
Africa, the treatment of lower grade stockpiles at Geita, Siguiri and Sunrise
Dam and an inventory movement at CC&V, and inflationary trends currently being
experienced, total cash costs for the third quarter are expected to be
unusually high at around $490/oz. This assumes the following exchange rates:
R7.80/$, A$/$0.96, BRL1.60/$ and Argentinean peso 3.12/$. An interim dividend
of 50 South African cents (6.7 US cents) per share has been declared for the
six months ended 30 June 2008.
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.
- Rounding of figures may result in computational discrepancies.
Review of the gold market
The gold price again traded strongly during the second quarter, albeit in a
similarly volatile pattern to that in the first quarter, which is partly a
reflection of continuing uncertainty in financial markets. The direction of the
gold price remains closely linked to the movement of the US dollar, but more
recently has also shown a strong correlation to the oil price.
The first half of April 2008 saw strong dollar gold prices, reaching some
$946/oz towards the middle of the month, the highest price recorded during the
quarter, as the US dollar edged towards an all-time low of Euro/US$1.60. Since
then, the price fell by $100/oz to reach a low of $845/oz in the opening days
of May 2008, primarily on profit taking.
From the middle of May, however, gold resumed an upward trend as a consequence
of a steadily rising oil price and predictions by analysts of higher prices to
come. The gold price continued to be volatile for the balance of the quarter
reflecting uncertainty surrounding the outlook for the global economy and
inflation, and amidst fears of further write-downs in the banking sector.
At $898/oz, the average dollar gold spot price for the quarter was slightly
lower than the strong average price attained during the first quarter of
$925/oz. The rand gold price reached highs of R234,551/kg during the quarter,
and the spot price averaged R216,742/kg for the quarter, some 3% lower than the
previous quarter`s average of R224,308/kg.
JEWELLERY DEMAND
All the major markets experienced some slowdown in jewellery consumption over
the quarter. In the US, the mass-market segment was the worst affected, with
this group of consumers facing increased pressure on spending due to
inflationary trends in that economy. In emerging markets, gold price volatility
was a more significant factor in dampening demand. Seasonal factors also
impacted negatively on gold consumption and a return to buying can be expected
towards the end of the third quarter of the year, given a favourable price
environment.
In India, the world`s largest gold market, high rupee gold prices dampened
demand during the second quarter, continuing from the trend set in the first
quarter of the year. There were, however, some significant fluctuations in
demand during the period, with good levels of consumption being seen during the
festival of Akshaya Thritiya, a traditional gold-buying occasion. Although
demand during the festival was lower than in 2007 by some 11%, when record
levels of gold sales were registered, significant purchases still took place.
During May 2008 and June 2008, however, when price volatility became a
significant feature of the market, demand again receded.
Price volatility has an important impact on gold demand in India, while the
continued weakening of the rupee against the dollar has also increased the
absolute price level of gold to the consumer. With the metal breaching the
R12,000/100g level during the quarter, and moving above R13,000/100g in the
early part of July 2008, the Indian consumer is experiencing record high gold
prices. As a result of higher gold prices there is some evidence that retail
formats for jewellery in the Indian market are starting to shift. Wedding
jewellery is becoming lighter and jewellery designs are emerging which enable
consumers to wear one piece of jewellery in different ways and for different
occasions. Efforts are also underway to attract younger consumers to the
market, taking advantage of the disposable income available in this target
group.
Looking forward to the second half of the year, the wedding season which gets
underway in September/October and the Hindu festival of `Diwali` is likely to
act as a catalyst for a recovery in gold demand. This will be somewhat
dependent on gold prices stabilising and short-term price volatility reducing.
In the Middle East, price volatility also impacted on demand, as did
inflationary pressure, which limited the level of disposable income available
for discretionary purchases. The quarter started slowly with relatively low
levels of jewellery sales during the first part of April 2008, but picked up
during the balance of the period as the wedding and holiday season stimulated
sales.
Continued political uncertainty in Turkey and the weakening of the Turkish lira
against the dollar both impacted negatively on demand in this market. In the
Egyptian market, however, where the local currency appreciated against the
dollar, demand remained relatively strong, building on that market`s good
performance in the first quarter of the year.
In the US, mass-market jewellery outlets pulled back significantly on sales of
14 carat gold, and tended to substitute gold items with gold-clad or
lower-caratage jewellery. The high end of the market, though relatively small
in tonnage terms, showed some strength. Overall gold jewellery sales are
however expected to show a decline when figures for the quarter are released.
In China, the second quarter is traditionally a slower time for jewellery sales
and the market data received to date appears to reflect this. It also suggests
a significant slowdown in consumer demand following the earthquake on 12 May
2008. Inflationary concerns, however, remain significant and gold purchases in
China have historically been strong in times of high inflation. Looking forward
to the second half of the year, the Olympic Games are expected to lift consumer
sentiment in the country and tourist purchases may also boost demand.
CENTRAL BANK SALES
In the current year of the Central Bank Agreement (which runs from October 2007
to September 2008), member signatories have sold only 251t of the allotted 500t
quota for the period. If the signatories to the accord do not utilise their
full quota during the current year, it will be the third consecutive year in
which they have failed to do so.
Countries such as Russia, Philippines and Kazakhstan have bought 38.3, 7.88 and
6.2t of gold respectively since September 2007.
INVESTMENT MARKET
The seven major Exchange Traded Funds (ETFs) did not repeat the impressive
growth that they exhibited in the first quarter of 2008, although post quarter
there has been significant renewed interest in investing into gold ETFs. From a
peak of some 29Moz in the beginning of April 2008, these funds sold off almost
2Moz, before stabilising around 27Moz for the remainder of the quarter.
During the third quarter it is anticipated that the Dubai-based ETF will come
into operation, serving both the Middle East market and Islamic communities
globally through the provision of a Sharia-compliant exchange traded investment
product.
In the Indian context, ETFs account for only a small portion of investment
demand; the majority of gold purchased purely for investment purposes is in
either coin or bar format. However, new formats of gold investment vehicles are
being piloted in India which, if successful, could impact positively on this
market sector. These take the form of either consignment purchasing schemes or
gold savings schemes whereby individuals set aside a portion of their monthly
wages to purchase gold. These schemes are operated by local banks specialising
in micro-finance.
PRODUCER HEDGING
The main item of news in this respect, although not entirely unexpected, was
the statement from Newcrest that they had completed the close out of their last
remaining hedges. This amounted to buying of some 600,000oz in total.
During the quarter, AngloGold Ashanti reduced its hedge commitments from
10.03Moz to 6.88Moz, through deliveries into maturing contracts, combined with
select buy-backs, in respect of its non-hedge derivative contracts.
CURRENCIES
The rand opened the quarter at R8.09/$ and closed at R7.83/$, 3% stronger.
The rand started the quarter in a strengthening trend as it continued to
recover from the previous quarter, where confidence was strained following the
power shortages and political changes in South Africa. However, the
announcement of a 9% current account deficit for the first quarter re-inforced
the vulnerability of the rand and curtailed any further appreciation of the
currency. Although there is currently potential for fixed investment into South
Africa, specifically in the telecoms sector, the size of the current account
deficit will continue to hamper real appreciation of the currency.
The Australian dollar opened the quarter at A$/$0.9147 and closed at
A$/$0.9619, strengthening 5%.
The forces at play in the Australian dollar are much the same as those faced
globally, balancing the risks of growth against those of inflation. More recent
price increases, in particular iron ore and coal, have added support to the
currency and are likely to keep underpinning the strength of the Australian
dollar.
Despite showing unusual levels of volatility during the quarter, the Brazilian
real continued its strong appreciation trend, ending the quarter at BRL1.60/$,
an appreciation of 8% on its opening rate of BRL1.74/$.
Hedge position
As at 30 June 2008, the net delta hedge position was 6.54Moz or 204t (at 31
March 2008: 9.25Moz or 288t). Despite a higher gold price, the delta of the
hedge book was reduced by 2.71Moz to 6.54Moz, and total commitments reduced
from 10.03Moz to 6.88Moz, as a result of delivery into maturing contracts and
hedge buy-backs that were effected during the quarter.
The marked-to-market value of all hedge transactions making up the hedge
positions was a negative $3.53bn (negative R27.67bn), decreasing by $1.25bn
(R11.1bn) during the quarter. This value was based on a gold price of
$922.90/oz, exchange rates of R7.83/$ and A$/$0.95 and the prevailing market
interest rates and volatilities at that date.
The table below reflects the hedge position as at 30 June 2008 and includes the
effect of all hedge close outs undertaken during the second quarter.
The second half of the year will see the continued reduction of the hedge book
through the delivery into maturing short hedge positions.
Before taking the effects of the recent hedge close out into account, the
company`s received price for the second quarter would have been $734/oz, or 18%
lower than the average spot price of $898/oz. Looking at the third and fourth
quarter, the discount to spot price is likely to be between 17% and 19%,
assuming that gold trades between $900/oz and $950/oz. For 2009, the discount
to spot is expected to be around 6%, based on a $900/oz price assumption.
As at 30 July 2008, the marked-to-market value of the hedge book was a negative
$3.42bn (negative R25.18bn), based on a gold price of $915.50/oz and exchange
rates of R7.36/$ and A$/$0.95 and the prevailing market interest rates and
volatilities at the time.
These marked-to-market valuations are in no way predictive of the future value
of the hedge position, nor of future impact on the revenue of the company. The
valuation represents the theoretical cost of buying all hedge contracts at the
time of valuation, at market prices and rates available at that time.
Year 2008 2009 2010
DOLLAR GOLD
Forward contracts Amount (kg) 7,823 12,917 12,580
US$/oz $104 $218 $327
Put options sold Amount (kg) 933
US$/oz $660
Call options
purchased Amount (kg) 4,284
US$/oz $428
Call options sold Amount (kg) 6,096 11,695 29,168
US$/oz $348 $357 $498
RAND GOLD
Forward contracts Amount (kg) 933 *1,866
Rand per kg R127,944 R157,213
A DOLLAR GOLD
Forward contracts Amount (kg) 1,555 1,835 3,111
A$ per oz A$591 A$569 A$685
Call options
purchased Amount (kg) 1,555 1,244 3,111
A$ per oz A$682 A$694 A$712
Delta (kg) (10,591) (23,390) (40,491)
** Total net gold:
Delta (oz) (340,510) (752,020) (1,301,820)
Year 2011 2012
DOLLAR GOLD
Forward contracts Amount (kg) 12,931 11,944
US$/oz $397 $404
Put options sold Amount (kg) 1,882 1,882
US$/oz $420 $430
Call options purchased Amount (kg)
US$/oz
Call options sold Amount (kg) 37,146 24,461
US$/oz $521 $622
RAND GOLD
Forward contracts Amount (kg)
Rand per kg
A DOLLAR GOLD
Forward contracts Amount (kg)
A$ per oz
Call options purchased Amount (kg)
A$ per oz
Delta (kg) (47,467) (33,520)
** Total net gold:
Delta (oz) (1,526,100) (1,077,690)
Year 2013-2016 Total
DOLLAR GOLD
Forward contracts Amount (kg) 12,364 70,559
US$/oz $432 $326
Put options sold Amount (kg) 3,763 8,460
US$/oz $445 $460
Call options purchased Amount (kg) 4,284
US$/oz $428
Call options sold Amount (kg) 39,924 148,490
US$/oz $604 $535
RAND GOLD
Forward contracts Amount (kg) *933
Rand per kg R147,456
A DOLLAR GOLD
Forward contracts Amount (kg) 6,501
A$ per oz A$630
Call options purchased Amount (kg) 5,910
A$ per oz A$701
Delta (kg) (48,066) (203,525)
** Total net gold:
Delta (oz) (1,545,320) (6,543,460)
* 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 above is the equivalent gold
position that would have the same marked-to-market sensitivity for a small
change in the gold price. This is calculated using the Black-Scholes option
formula with the ruling market prices, interest rates and volatilities as at 30
June 2008.
Rounding of figures may result in computational discrepancies.
Year 2008 2009 2010
DOLLAR SILVER
Put options purchased Amount (kg) 21,772
$ per oz $7.66
Put options sold Amount (kg) 21,772
$ per oz $6.19
Call options sold Amount (kg) 21,772
$ per oz $8.64
Year 2011 2012 2013-2016 Total
DOLLAR SILVER
Put options
purchased Amount (kg) 21,772
$ per oz $7.66
Put options sold Amount (kg) 21,772
$ per oz $6.19
Call options sold Amount (kg) 21,772
$ per oz $8.64
The following table indicates the group`s currency hedge position at 30 June
2008
Year 2008 2009 2010
RAND DOLLAR (000)
Forward contracts Amount ($) *420,000
US$/R R7.85
Put options purchased Amount ($) 50,000
US$/R R7.41
Put options sold Amount ($) 50,000
US$/R R6.94
Call options sold Amount ($) 50,000
US$/R R8.06
A DOLLAR (000)
Forward contracts Amount ($) 5,000
A$/US$ $0.73
Put options purchased Amount ($) 30,000
A$/US$ $0.84
Put options sold Amount ($) 30,000
A$/US$ $0.88
Call options sold Amount ($) 30,000
A$/US$ $0.81
BRAZILIAN REAL (000)
Forward contracts Amount ($) 15,000 1,000
US$/BRL BRL 1.87 BRL 1.84
Put options purchased Amount ($) 24,000 500
US$/BRL BRL 1.78 BRL 1.76
Call options sold Amount ($) 78,000 1,000
US$/BRL BRL 1.80 BRL 1.76
Year 2011 2012 2013-2016 Total
RAND DOLLAR (000)
Forward contracts Amount ($) *420,000
US$/R R7.85
Put options
purchased Amount ($) 50,000
US$/R R7.41
Put options sold Amount ($) 50,000
US$/R R6.94
Call options sold Amount ($) 50,000
US$/R R8.06
A DOLLAR (000)
Forward contracts Amount ($) 5,000
A$/US$ $0.73
Put options
purchased Amount ($) 30,000
A$/US$ $0.84
Put options sold Amount ($) 30,000
A$/US$ $0.88
Call options sold Amount ($) 30,000
A$/US$ $0.81
BRAZILIAN REAL (000)
Forward contracts Amount ($) 16,000
US$/BRL BRL 1.87
Put options
purchased Amount ($) 24,500
US$/BRL BRL 1.78
Call options sold Amount ($) 79,000
US$/BRL BRL 1.80
* Indicates a long position established as part of the hedge close out
transaction.
Derivative analysis by accounting designation as at 30 June 2008
Cash flow
Normal sale hedge
exempted accounted
US Dollars (millions)
Commodity option contracts (719) -
Foreign exchange option contracts - -
Forward sale commodity contracts (1,086) (273)
Forward foreign exchange contracts - -
Interest rate swaps (27) -
Total derivatives (1,832) (273)
Non-hedge
accounted Total
US Dollars (millions)
Commodity option contracts (1,409) (2,128)
Foreign exchange option contracts (4) (4)
Forward sale commodity contracts (93) (1,452)
Forward foreign exchange contracts 4 4
Interest rate swaps 30 3
Total derivatives (1,472) (3,577)
Rounding of figures may result in computational discrepancies.
Exploration
Total exploration expenditure amounted to $52m ($27m brownfields, $25m
greenfields) during the second quarter of 2008, compared to $46m ($19m
brownfields, $27m greenfields) in the previous quarter.
BROWNFIELDS EXPLORATION
In South Africa, surface drilling continued in the Project Zaaiplaats area,
with borehole MZA9 and MMB5 advancing 288m and 581m, respectively.
Surface drilling in the Moab North area continued with a long deflection of
borehole MCY4 reaching a depth of 2,386m and borehole MCY5 advancing a further
890m.
At Tau Lekoa, borehole G55 was stopped at a depth of 1,513m after intersecting
a large fault and passing into deep footwall quartzite and further drilling is
being considered.
At Iduapriem in Ghana, preparation for Mineral Resource conversion drilling at
Ajopa continued, but was hampered by rugged terrain and heavy rains. Diamond
(DDH) and reverse circulation (RC) drilling is planned to start in mid-July. At
Obuasi, exploration continued with 4,005m of DDH drilling below 50 level and
1,212m of DDH drilling.
In Argentina at Cerro Vanguardia, the 2008 exploration programme continued with
7,594m of DDH drilling and 16,689m of RC drilling being completed. The
interpretation of the hyper-spectral survey will be completed in July 2008.
Exploration rights over 10 new claims were confirmed by the provincial
authorities and geophysical surveys over these areas are being planed for 2009.
In Australia, at Boddington five rigs were employed on the Mineral Resource
conversion and near mine exploration DDH drilling programmes. During the
quarter, approximately 30,049m were drilled from 43 holes.
At Sunrise Dam, exploration continued to focus on the deep-seated
mineralisation towards the Carey Shear Zone (1km vertical) and the extensions
of known mineralisation in the Astro, GQ and Dolly lodes. During the quarter,
12,249m of diamond core was drilled from 81 holes. Economic gold intercepts
were returned from the deep targets below the mine and further delineation of
these deep mineralised zones remains the priority for 2008/2009.
In Brazil, at the Corrego do Sitio Sulphide Project, drilling continued with
11,448m being drilled from surface, 2,632m drilled from underground and 1,042m
of underground development. At the Lamego project, 8,660m of surface drilling,
4,381m underground drilling and 1,067m of underground development were
completed.
At Siguiri in Guinea, exploration activities continued to focus on conversion
drilling at Sintroko South (situated 8km south of the mine).
Depth extensions to the high grade oxide mineralisation in the Sintroko pit
were tested by DDH drilling, with encouraging results.
Results from reconnaissance air core drilling of the Setiguia anomaly were
negative. Geochemical soil sampling covering the northwest extensions of
Kintinian produced positive results and will require follow up aircore (AC)
drilling. Reconnaissance AC drilling was completed on the Manguity geochemical
anomaly, in the south-eastern corner of Block 2. Results from infill and
extension drilling at Saraya in Block 2 is being awaited.
The individual resource models in the current mining area have been remodelled
to create a larger, combined single model. This model indicates upside on the
known mineralisation in the current mining area and a study is being conducted
to optimise the current mining area based on this new model.
Conversion drilling will be completed at Sintroko South early in the third
quarter, and efforts will then refocus on drill testing the combined pits
model, together with conversion drilling along the perimeters of Kintinian
village.
At Geita in Tanzania, exploration activities concentrated in three areas,
namely, Area 3 (1,870m RC and 550m DDH); Kalondwa Hill (800m RC and 426m DDH)
and Star and Comet, where drilling commenced on the southern extension and
sterilisation of the proposed waste dump site. AC drilling on the
Nyakabale-Prospect 30 area was completed.
At Morila in Mali, pitting and trenching was completed, and although no
anomalous mineralisation was intersected, important structural and lithological
data was collected and is being interpreted.
At Sadiola, resource definition drilling was carried out at Sekokoto Main where
an infill RC drill programme was started with 1,552m drilled. No major
mineralised intersections were obtained from the drilling of Lakanfla East,
which was completed in February 2008.
The Phase 9 diamond core drill programme for deep sulphide ore in the northern
part of the Sadiola Main Pit was completed early in the quarter. A total of 11
diamond drill holes amounting to 4,420m were drilled along four fence lines,
approximately 300m apart. Air Core drilling of the following anomalies
continued during the quarter: S3 (3,879m); S5 (1,480m); S6a (3,272m), S6b
(2,997m), S7 and S9 (2,630m).
A diamond drill programme was completed around the FE4 pit, with the objective
to collect geological and structural information to be correlated with the pit
mapping and update the geological model for FE4, and test for sulphide
mineralisation. A total of 7 holes were drilled along three fence lines
amounting to 2,125m.
At Yatela, a RC drill programme at Donguera was completed and a total of 77 RC
holes (4,632m) were drilled. A RC drill program was laid out at Dinguilou to
cover two areas that have potential for oxide mineralisation, and a total
3,660m were drilled in these two areas.
At Alamoutala, an infill RC drill programme is in progress to the east and
south of the current pit, with the intention to close off the mineralisation.
The core logging and sampling for the 2007 Deep Sulphide drill programme was
completed and final results are being awaited.
At Navachab in Namibia, RC drilling at Gecko continued with an additional
5,000m being drilled, and the drilling programme is expected to be completed by
mid quarter.
At Steenbok-Starling, 2,840m of follow up RC was drilled. Results from the
extension of the soil grid towards Bulbul have been disappointing, and no
follow-up work is being planned. An extension of the soil grid towards Ostrich
and Giraffe is currently underway.
At Anomaly 16, 2,920m of exploration, infill and advanced grade control holes
were completed.
Results from the 195 sample BLEG stream sediment survey over the Okondura
EPL3276 were disappointing and the EPL was therefore significantly reduced.
Initial remote sensing work commenced on the two EPL`s to the northeast of
Okahandja.
A total of 1,666m of DDH drilling was undertaken in the area to the immediate
north of the main pit, where drilling the northerly plunge extension of the
MDM/US sheeted veins is in progress. RC drilling of 5,276m was done to the
immediate north of the North Pit2, where a northerly vein plunge extension was
confirmed and encouraging intersections were achieved.
At Cripple Creek & Victor in the United States, follow-up work with encouraging
intercepts continues in the North Cresson area, while in-fill drilling has
started in the Wild Horse and Cresson areas. Drilling for the High Grade Study
was completed in Cresson and South Cresson and further work, including a
test-mining case, is planned.
GREENFIELDS EXPLORATION
Greenfields exploration activities continued in six countries, namely
Australia, Colombia, the DRC, China, the Philippines, and Russia. A total of
80,676m of diamond drilling (DDH), reverse circulation (RC), and aircore (AC)
drilling was completed during the second quarter, at existing priority targets
while also delineating new targets in Australia, the DRC, and Colombia.
In Australia, exploration drilling of the Tropicana Prospect (AngloGold Ashanti
70%, Independence Gold 30%) continued during the quarter, and focused on infill
drilling of the resource to increase confidence in the estimate, to a level
required for reserve reporting and feasibility level assessment.
It is anticipated that the resource drilling programme will be largely
completed by mid-year. Prefeasibility studies are continuing with metallurgical
test work programmes, while engineering and mining studies have been
substantially completed. Key work programmes to be completed, prior to making a
recommendation on the project, include process water supply, exploration,
optimal scale of operation and economic modelling.
Regional AC exploration drilling returned encouraging results from the
Screaming Lizard prospect, 10km to the east of the Tropicana Prospect. Field
mapping at the Black Dragon and Voodoo Child Prospects located approximately
30km northeast of the Tropicana identified outcropping gold mineralisation.
Diamond drilling at the Beachcomber prospect intersected visible gold
mineralisation, and the regional exploration effort will be accelerated in the
second half of the year, as drill rigs and personnel become available from the
resource drilling at the Tropicana prospect.
The Viking project (AngloGold Ashanti 100%) is located along the southeast
Yilgarn margin in an equivalent geological setting to the Tropicana project. A
number of tenements in the Viking project area were granted during the quarter
and exploration will commence in the third quarter.
In Colombia, regional exploration focused on 41 targets, with three new targets
brought to drill ready stage. Anglogold Ashanti and its partners are actively
exploring 294 targets, generated by systematic exploration in an area of 4.2m
hectares, for precious and base metal deposits. At La Colosa it is anticipated
that the necessary environmental permits will be issued during the fourth
quarter of 2008, after which pre-feasibility stage work, including drilling,
will continue.
Anglogold Ashanti and JV partners drilled on four new projects and continued
drilling at Gramalote during the quarter. Significant results were released
from the Quebradona project (JV with B2Gold), as per the table below.
Metres
Location at Hole drilled Gold Silver Copper
La Aurora no. (m) (ppm) (ppm) (%)
La Mama 1 161.87 0.97 2.5 .154
La Mama 2 52.70 1.36 2.1 .144
La Mama 3 86.15 0.99 2.1 .134
La Mama Incl. 32.90 1.67 2.6 .167
La Mama 4 86.30 2.08 2.6 .166
La Mama 5 65.80 0.94 2.5 .162
La Mama 6 228.90 0.80 2.0 .154
La Mama Incl. 125.00 1.07 2.0 .153
Exploration activities in the DRC continued over Concession 40, which covers
most of the Kilo greenstone belt. A second regional aeromagnetic survey is
being planned to collectively provide coverage over approximately 70% of the
area, which remains virtually unexplored by modern methods. This programme,
combined with regional geochemistry programmes, will provide the platform from
which to fast-track regional exploration over the concession. Field work has
concentrated on detailed mapping, soil sampling and trenching. At the Issuru
prospect, located approximately 4km north of the Mongbwalu resource, a total of
2,972m was drilled, defining potentially economic mineralisation over a strike
length of approximately 800m and a width of up to 450m. A further 14,000m of
planned drilling will focus on defining the underground resource. The findings
of the DRC Minerals Review Commission have resulted in AngloGold Ashanti and
the AGK joint venture engaging the DRC government to seek resolution and secure
our rights to Concession 40. It is envisaged that formal discussions will
commence early in the third quarter 2008.
In the Philippines, all required documentation has been submitted and final
grant of the Mapawa tenement application is being awaited from the Department
of Environment and Natural Resources.
In Russia, exploration to increase resources at Veduga, so as to improve
project economics, is ongoing. Trenching and drilling at this advanced project
have demonstrated strike continuation of mineralisation from the south-eastern
ore zone for a further 500m along strike. At the recently acquired Penchenga
property, regional soil geochemistry has begun as part of a programme to assess
the potential of the licence area within 18 months. Growth through project
generation and securing grassroots licences is being planned by the AngloGold
Ashanti / Polymetal Alliance in the North Yenisei and Baley districts.
In China work on the Yili-Yunlong project focussed on investigating geochemical
anomalies and coincident silica-clay alteration. Data from this work is being
compiled, with a final evaluation of these tenements to be completed by the end
of the third quarter 2008. Final approval for the Jinchanggou CJV was received
from the Gansu government in late June 2008. Results from soil sampling on the
eastern (Dashuigou) and western (Hongchungou) tenements indicate significant
extensions to known mineralisation with anomalous gold-in-soils over more than
16km strike length, and drilling is likely to commence in the fourth quarter of
2008.
Group income statement
Quarter Quarter Quarter
ended ended ended
June M arch June
2008 2008 2007
SA Rand million Notes Unaudited Unaudited Unaudited
Revenue 2 7,720 7,471 5,461
Gold income 7,508 7,245 5,222
Cost of sales 3 (5,406) (4,992) (4,132)
(Loss) gain on non-hedge
derivatives and other
commodity contracts 4 (1,316) (5,612) 840
Gross profit (loss) 787 (3,359) 1,930
Corporate administration
and other expenses (252) (215) (216)
Market development costs (24) (24) (26)
Exploration costs (269) (274) (204)
Other operating (expenses)
income 5 (48) 32 (43)
Operating special items 6 273 82 86
Operating profit (loss) 467 (3,758) 1,527
Interest received 102 82 62
Exchange (loss) gain (28) 1 (14)
Fair value adjustment on
option component of
convertible bond 12 170 223
Finance costs and unwinding
of obligations (216) (265) (220)
Share of associates` profit
(loss) 10 (1) (51)
Profit (loss) before
taxation 348 (3,771) 1,527
Taxation 7 (1,235) 52 (371)
(Loss) profit after
taxation from continuing
operations (887) (3,719) 1,155
Discontinued operations
Profit (loss) for the
period from discontinued
operations 8 191 (3) (4)
(Loss) profit for the period (697) (3,722) 1,151
Allocated as follows:
Equity shareholders (817) (3,812) 1,083
Minority interest 121 90 68
(697) (3,722) 1,151
Basic (loss) earnings per
ordinary share (cents) 1
(Loss) profit from
continuing operations (357) (1,350) 386
Profit (loss) from
discontinued operations 68 (1) (1)
(Loss) profit (289) (1,351) 385
Diluted (loss) earnings per
ordinary share (cents) 2
(Loss) profit from
continuing operations 3 (357) (1,350) 385
Profit (loss) from
discontinued operations 3 68 (1) (1)
(Loss) profit 3 (289) (1,351) 384
Dividends 4
- Rm
- cents per Ordinary share
- cents per E Ordinary share
Six months Six months
ended ended
June June
2008 2007
SA Rand million Unaudited Unaudited
Revenue 15,191 11,343
Gold income 14,753 10,886
Cost of sales (10,398) (8,356)
(Loss) gain on non-hedge derivatives and other
commodity contracts (6,928) 178
Gross profit (loss) (2,573) 2,708
Corporate administration and other expenses (467) (424)
Market development costs (48) (49)
Exploration costs (542) (380)
Other operating (expenses) income (16) (91)
Operating special items 355 101
Operating profit (loss) (3,291) 1,866
Interest received 184 135
Exchange (loss) gain (27) (12)
Fair value adjustment on option component of
convertible bond 183 358
Finance costs and unwinding of obligations (481) (419)
Share of associates` profit (loss) 10 (54)
Profit (loss) before taxation (3,423) 1,873
Taxation (1,183) (805)
(Loss) profit after taxation from continuing
operations (4,607) 1,067
Discontinued operations
Profit (loss) for the period from discontinued
operations 188 (10)
(Loss) profit for the period (4,419) 1,057
Allocated as follows:
Equity shareholders (4,630) 933
Minority interest 211 124
(4,419) 1,057
Basic (loss) earnings per ordinary share (cents) 1
(Loss) profit from continuing operations (1,706) 335
Profit (loss) from discontinued operations 67 (3)
(Loss) profit (1,639) 332
Diluted (loss) earnings per ordinary share
(cents) 2
(Loss) profit from continuing operations 3 (1,706) 334
Profit (loss) from discontinued operations 3 67 (3)
(Loss) profit 3 (1,639) 331
Dividends 4
- Rm 148 668
- cents per Ordinary share 53 240
- cents per E Ordinary share 26 120
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 Represents the dividend declared and paid during the period.
Rounding of figures may result in computational discrepancies.
Group income statement
Quarter Quarter Quarter
ended ended ended
June March June
2008 2008 2007
US Dollar million Notes Unaudited Unaudited Unaudited
Revenue 2 996 987 773
Gold income 968 958 739
Cost of sales 3 (698) (661) (585)
(Loss) gain on non-hedge
derivatives and other
commodity contracts 4 (235) (373) 77
Gross profit (loss) 36 (77) 231
Corporate administration
and other expenses (33) (28) (31)
Market development costs (3) (3) (4)
Exploration costs (34) (37) (29)
Other operating (expenses)
income 5 (6) 4 (6)
Operating special items 6 36 11 12
Operating (loss) profit (4) (130) 174
Interest received 13 11 9
Exchange loss (4) - (2)
Fair value adjustment on
option component of
convertible bond 2 23 32
Finance costs and unwinding
of obligations (28) (35) (31)
Share of associates` profit
(loss) 1 - (7)
(Loss) profit before
taxation (20) (131) 174
Taxation 7 (157) 1 (52)
(Loss) profit after
taxation from continuing
operations (176) (130) 121
Discontinued operations
Profit (loss) for the
period from discontinued
operations 8 24 - (1)
(Loss) profit for the period (152) (131) 121
Allocated as follows:
Equity shareholders (168) (142) 111
Minority interest 16 11 10
(152) (131) 121
Basic (loss) earnings per
ordinary share (cents) 1
(Loss) profit from
continuing operations (68) (50) 39
Profit from discontinued
operations 9 - -
(Loss) profit (59) (50) 39
Diluted (loss) earnings per
ordinary share (cents) 2
(Loss) profit from
continuing operations 3 (68) (50) 39
Profit from discontinued
operations 3 9 - -
(Loss) profit 3 (59) (50) 39
Dividends4
- $m
- cents per Ordinary share
- cents per E Ordinary share
Six months Six months
ended ended
June June
2008 2007
US Dollar million Unaudited Unaudited
Revenue 1,983 1,586
Gold income 1,926 1,522
Cost of sales (1,359) (1,169)
(Loss) gain on non-hedge derivatives and other
commodity contracts (608) 25
Gross profit (loss) (41) 378
Corporate administration and other expenses (61) (59)
Market development costs (6) (7)
Exploration costs (71) (53)
Other operating (expenses) income (2) (13)
Operating special items 47 14
Operating (loss) profit (134) 260
Interest received 24 19
Exchange loss (4) (2)
Fair value adjustment on option component of
convertible bond 24 51
Finance costs and unwinding of obligations (63) (59)
Share of associates` profit (loss) 1 (8)
(Loss) profit before taxation (151) 261
Taxation (156) (112)
(Loss) profit after taxation from continuing
operations (307) 149
Discontinued operations
Profit (loss) for the period from discontinued
operations 24 (1)
(Loss) profit for the period (283) 148
Allocated as follows:
Equity shareholders (310) 131
Minority interest 27 17
(283) 148
Basic (loss) earnings per ordinary share (cents) 1
(Loss) profit from continuing operations (118) 47
Profit from discontinued operations 8 -
(Loss) profit (110) 47
Diluted (loss) earnings per ordinary share
(cents) 2
(Loss) profit from continuing operations 3 (118) 46
Profit from discontinued operations 3 8 -
(Loss) profit 3 (110) 46
Dividends4
- $m 18 90
- cents per Ordinary share 7 32
- cents per E Ordinary share 3 16
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 Represents the dividend declared and paid during the period.
Rounding of figures may result in computational discrepancies.
Group balance sheet
As at As at
June March
2008 2008
SA Rand million Notes Unaudited Unaudited
ASSETS
Non-current assets
Tangible assets 53,752 53,362
Intangible assets 3,649 3,657
Investments in associates 396 127
Other investments 633 738
Inventories 3,030 2,917
Trade and other receivables 864 761
Deferred taxation 655 631
Other non-current assets 281 281
63,259 62,475
Current assets
Inventories 5,778 5,639
Trade and other receivables 1,905 1,949
Derivatives 4,810 3,966
Current portion of other non-current
assets 2 2
Cash restricted for use 547 423
Cash and cash equivalents 3,914 4,167
16,955 16,146
Non-current assets held for sale 10 131
16,965 16,277
TOTAL ASSETS 80,224 78,752
EQUITY AND LIABILITIES
Share capital and premium 11 22,495 22,448
Retained earnings and other reserves 12 (6,573) (5,787)
Shareholders` equity 15,921 16,661
Minority interests 13 637 576
Total equity 16,558 17,237
Non-current liabilities
Borrowings 7,387 5,728
Environmental rehabilitation and other
provisions 4,049 3,917
Provision for pension and post-retirement
benefits 1,247 1,244
Trade, other payables and deferred income 68 89
Derivatives 14 350 874
Deferred taxation 8,366 7,392
21,467 19,244
Current liabilities
Current portion of borrowings 10,103 10,157
Trade, other payables and deferred income 15 12,658 5,250
Derivatives 14 18,126 25,188
Taxation 1,313 1,506
42,200 42,101
Non-current liabilities held for sale - 171
42,200 42,272
Total liabilities 63,666 61,515
TOTAL EQUITY AND LIABILITIES 80,224 78,752
Net asset value - cents per share 5,873 6,116
As at As at
December June
2007 2007
SA Rand million Audited Unaudited
ASSETS
Non-current assets
Tangible assets 45,783 44,551
Intangible assets 2,996 3,041
Investments in associates 140 245
Other investments 795 956
Inventories 2,217 2,103
Trade and other receivables 566 452
Deferred taxation 543 417
Other non-current assets 278 313
53,318 52,078
Current assets
Inventories 4,603 4,112
Trade and other receivables 1,587 1,535
Derivatives 3,516 3,383
Current portion of other non-current assets 2 5
Cash restricted for use 264 166
Cash and cash equivalents 3,381 2,792
13,353 11,993
Non-current assets held for sale 210 203
13,563 12,196
TOTAL ASSETS 66,881 64,274
EQUITY AND LIABILITIES
Share capital and premium 22,371 22,237
Retained earnings and other reserves (6,167) (34)
Shareholders` equity 16,204 22,203
Minority interests 429 475
Total equity 16,633 22,678
Non-current liabilities
Borrowings 10,441 9,293
Environmental rehabilitation and other provisions 3,361 2,929
Provision for pension and post-retirement benefits 1,208 1,201
Trade, other payables and deferred income 79 131
Derivatives 1,110 1,183
Deferred taxation 7,159 7,821
23,358 22,559
Current liabilities
Current portion of borrowings 2,309 2,056
Trade, other payables and deferred income 4,549 3,880
Derivatives 18,763 11,869
Taxation 1,269 1,232
26,890 19,037
Non-current liabilities held for sale - -
26,890 19,037
Total liabilities 50,248 41,596
TOTAL EQUITY AND LIABILITIES 66,881 64,274
Net asset value - cents per share 5,907 8,072
Rounding of figures may result in computational discrepancies.
Group balance sheet
As at As at
June March
2008 2008
US Dollar million Notes Unaudited Unaudited
ASSETS
Non-current assets
Tangible assets 6,862 6,593
Intangible assets 466 452
Investments in associates 51 16
Other investments 81 91
Inventories 387 360
Trade and other receivables 110 94
Deferred taxation 84 78
Other non-current assets 36 35
8,076 7,719
Current assets
Inventories 738 697
Trade and other receivables 243 241
Derivatives 614 490
Current portion of other non-current
assets - -
Cash restricted for use 70 52
Cash and cash equivalents 500 515
2,164 1,996
Non-current assets held for sale 1 16
2,165 2,011
TOTAL ASSETS 10,241 9,731
EQUITY AND LIABILITIES
Share capital and premium 11 2,872 2,773
Retained earnings and other reserves 12 (839) (715)
Shareholders` equity 2,033 2,058
Minority interests 13 81 71
Total equity 2,114 2,130
Non-current liabilities
Borrowings 943 708
Environmental rehabilitation and other
provisions 517 484
Provision for pension and post-retirement
benefits 159 154
Trade, other payables and deferred income 9 11
Derivatives 14 45 108
Deferred taxation 1,068 913
2,740 2,378
Current liabilities
Current portion of borrowings 1,290 1,255
Trade, other payables and deferred income 15 1,616 649
Derivatives 14 2,314 3,112
Taxation 168 186
5,387 5,202
Non-current liabilities held for sale - 21
5,387 5,223
Total liabilities 8,127 7,600
TOTAL EQUITY AND LIABILITIES 10,241 9,731
Net asset value - cents per share 750 756
As at As at
December June
2007 2007
US Dollar million Audited Unaudited
ASSETS
Non-current assets
Tangible assets 6,722 6,350
Intangible assets 440 433
Investments in associates 21 35
Other investments 117 136
Inventories 325 300
Trade and other receivables 83 64
Deferred taxation 80 59
Other non-current assets 41 45
7,829 7,423
Current assets
Inventories 676 586
Trade and other receivables 233 219
Derivatives 516 482
Current portion of other non-current assets - 1
Cash restricted for use 39 24
Cash and cash equivalents 496 398
1,960 1,709
Non-current assets held for sale 31 29
1,991 1,738
TOTAL ASSETS 9,820 9,161
EQUITY AND LIABILITIES
Share capital and premium 3,285 3,169
Retained earnings and other reserves (906) (5)
Shareholders` equity 2,379 3,165
Minority interests 63 68
Total equity 2,442 3,232
Non-current liabilities
Borrowings 1,533 1,325
Environmental rehabilitation and other provisions 494 417
Provision for pension and post-retirement benefits 177 171
Trade, other payables and deferred income 12 19
Derivatives 163 169
Deferred taxation 1,051 1,115
3,430 3,215
Current liabilities
Current portion of borrowings 339 293
Trade, other payables and deferred income 668 553
Derivatives 2,755 1,692
Taxation 186 176
3,948 2,713
Non-current liabilities held for sale - -
3,948 2,713
Total liabilities 7,378 5,929
TOTAL EQUITY AND LIABILITIES 9,820 9,161
Net asset value - cents per share 867 1,150
Rounding of figures may result in computational discrepancies.
Group cash flow statement
Quarter Quarter Quarter
ended ended ended
June March June
2008 2008 2007
SA Rand million Unaudited Unaudited Unaudited
Cash flows from operating activities
Receipts from customers 7,706 7,142 5,551
Payments to suppliers and employees (6,413) (5,267) (3,869)
Cash generated from operations 1,293 1,875 1,682
Cash utilised by discontinued
operations (16) (1) (9)
Taxation paid (544) (442) (545)
Net cash inflow from operating
activities 733 1,432 1,128
Cash flows from investing activities
Capital expenditure (2,357) (1,930) (1,764)
Acqusition of assets - - (287)
Disposal of subsidiary net of cash 229 - -
Proceeds from disposal of tangible
assets 21 222 91
Proceeds from disposal of assets of
discontinued operations 77 - 6
Other investments acquired (78) (266) (16)
Associate loans and acquisitions - 30 64
Proceeds from disposal of investments 105 207 26
(Increase) decrease in cash
restricted for use (119) (48) 101
Interest received 100 88 49
Net loans advanced (repaid) 1 (2) 26
Cash utilised for hedge book
settlement (749) - -
Net cash outflow from investing
activities (2,770) (1,700) (1,702)
Cash flows from financing activities
Proceeds from issue of share capital 21 65 36
Share issue expenses - - (4)
Proceeds from borrowings 1,918 1,300 730
Repayment of borrowings (78) (233) (182)
Finance costs (30) (258) (33)
Advanced proceeds from rights offer 6 - -
Dividends paid (50) (152) (63)
Net cash inflow (outflow) from
financing activities 1,788 722 485
Net (decrease) increase in cash and
cash equivalents (249) 454 (89)
Translation (4) 332 (38)
Cash and cash equivalents at
beginning of period 4,167 3,381 2,919
Net cash and cash equivalents at end
of period 3,914 4,167 2,792
Cash generated from operations
Profit (loss) before taxation 348 (3,771) 1,527
Adjusted for:
Movement on non-hedge derivatives and
other commodity contracts 771 5,409 (195)
Amortisation of tangible assets 1,184 1,082 1,009
Finance costs and unwinding of
obligations 216 265 220
Environmental, rehabilitation and
other expenditure (28) 87 (14)
Operating special items (273) (82) (86)
Amortisation of intangible assets 4 4 3
Deferred stripping 18 (213) (131)
Fair value adjustment on option
components of convertible bond (12) (170) (223)
Interest receivable (102) (82) (62)
Other non-cash movements 211 (20) 181
Movements in working capital (1,043) (633) (547)
1,293 1,875 1,682
Movements in working capital
Increase in inventories (591) (1,762) (494)
Decrease (increase) in trade and
other receivables 5 (462) 79
(Decrease) increase in trade and
other payables (457) 1,591 (131)
(1,043) (633) (547)
Six months Six months
ended ended
June June
2008 2007
SA Rand million Unaudited Unaudited
Cash flows from operating activities
Receipts from customers 14,848 11,180
Payments to suppliers and employees (11,681) (7,406)
Cash generated from operations 3,167 3,774
Cash utilised by discontinued operations (16) (19)
Taxation paid (986) (877)
Net cash inflow from operating activities 2,165 2,878
Cash flows from investing activities
Capital expenditure (4,287) (3,181)
Acqusition of assets - (287)
Disposal of subsidiary net of cash 229 -
Proceeds from disposal of tangible assets 243 108
Proceeds from disposal of assets of discontinued
operations 78 8
Other investments acquired (344) (56)
Associate loans and acquisitions 31 1
Proceeds from disposal of investments 312 48
(Increase) decrease in cash restricted for use (168) (88)
Interest received 188 110
Net loans advanced (repaid) (2) 1
Cash utilised for hedge book settlement (749) -
Net cash outflow from investing activities (4,470) (3,336)
Cash flows from financing activities
Proceeds from issue of share capital 86 140
Share issue expenses - (4)
Proceeds from borrowings 3,218 926
Repayment of borrowings (311) (326)
Finance costs (288) (245)
Advanced proceeds from rights offer 6 -
Dividends paid (202) (756)
Net cash inflow (outflow) from financing
activities 2,510 (264)
Net (decrease) increase in cash and cash
equivalents 205 (721)
Translation 328 46
Cash and cash equivalents at beginning of period 3,381 3,467
Net cash and cash equivalents at end of period 3,914 2,792
Cash generated from operations
Profit (loss) before taxation (3,423) 1,873
Adjusted for:
Movement on non-hedge derivatives and other
commodity contracts 6,179 788
Amortisation of tangible assets 2,266 1,957
Finance costs and unwinding of obligations 481 419
Environmental, rehabilitation and other
expenditure 58 (28)
Operating special items (355) (101)
Amortisation of intangible assets 8 7
Deferred stripping (194) (231)
Fair value adjustment on option components of
convertible bond (183) (358)
Interest receivable (184) (135)
Other non-cash movements 190 329
Movements in working capital (1,676) (747)
3,167 3,774
Movements in working capital
Increase in inventories (2,353) (820)
Decrease (increase) in trade and other receivables (458) (209)
(Decrease) increase in trade and other payables 1,134 282
(1,676) (747)
Rounding of figures may result in computational discrepancies.
Group cash flow statement
Quarter Quarter Quarter
ended ended ended
June March June
2008 2008 2007
US Dollar million Unaudited Unaudited Unaudited
Cash flows from operating
activities
Receipts from customers 990 953 783
Payments to suppliers and employees (826) (705) (545)
Cash generated from operations 164 248 238
Cash utilised by discontinued
operations (2) - (1)
Taxation paid (70) (59) (77)
Net cash inflow from operating
activities 91 189 160
Cash flows from investing
activities
Capital expenditure (304) (257) (249)
Acqusition of assets - - (40)
Disposal of subsidiary net of cash 29 - -
Proceeds from disposal of tangible
assets 3 30 13
Proceeds from disposal of assets
of discontinued operations 10 - 1
Other investments acquired (10) (35) (2)
Associate loans and acquisitions - 4 9
Proceeds from disposal of
investments 13 28 4
(Increase) decrease in cash
restricted for use (16) (6) 14
Interest received 13 11 7
Net loans advanced - - 3
Cash utilised for hedge book
settlement (94) - -
Net cash outflow from investing
activities (357) (226) (241)
Cash flows from financing
activities
Proceeds from issue of share
capital 3 9 5
Share issue expenses - - (1)
Proceeds from borrowings 248 173 103
Repayment of borrowings (10) (31) (26)
Finance costs (4) (34) (5)
Advanced proceeds from rights offer 1 - -
Dividends paid (6) (19) (9)
Net cash inflow (outflow) from
financing activities 232 97 67
Net (decrease) increase in cash
and cash equivalents (34) 60 (14)
Translation 18 (42) 11
Cash and cash equivalents at
beginning of period 515 496 400
Net cash and cash equivalents at
end of period 500 515 398
Cash generated from operations
(Loss) profit before taxation (20) (131) 174
Adjusted for:
Movement on non-hedge derivatives
and other commodity contracts 165 345 15
Amortisation of tangible assets 153 144 143
Finance costs and unwinding of
obligations 28 35 31
Environmental, rehabilitation and
other expenditure (4) 12 (2)
Operating special items (36) (11) (12)
Amortisation of intangible assets - - -
Deferred stripping 1 (26) (19)
Fair value adjustment on option
components of convertible bond (2) (23) (32)
Interest receivable (13) (11) (9)
Other non-cash movements 27 (3) 25
Movements in working capital (136) (82) (76)
164 248 238
Movements in working capital
Increase in inventories (111) (59) (102)
(Increase) decrease in trade and
other receivables (8) (21) 3
(Decrease) increase in trade and
other payables (18) (3) 23
(136) (82) (76)
Six months Six months
ended ended
June June
2008 2007
US Dollar million Unaudited Unaudited
Cash flows from operating activities
Receipts from customers 1,943 1,563
Payments to suppliers and employees (1,531) (1,037)
Cash generated from operations 412 526
Cash utilised by discontinued operations (2) (3)
Taxation paid (129) (123)
Net cash inflow from operating activities 280 400
Cash flows from investing activities
Capital expenditure (561) (446)
Acqusition of assets - (40)
Disposal of subsidiary net of cash 29 -
Proceeds from disposal of tangible assets 32 15
Proceeds from disposal of assets of discontinued
operations 10 1
Other investments acquired (45) (8)
Associate loans and acquisitions 4 -
Proceeds from disposal of investments 41 6
(Increase) decrease in cash restricted for use (23) (12)
Interest received 24 15
Net loans advanced - -
Cash utilised for hedge book settlement (94) -
Net cash outflow from investing activities (583) (467)
Cash flows from financing activities
Proceeds from issue of share capital 11 19
Share issue expenses - (1)
Proceeds from borrowings 421 130
Repayment of borrowings (41) (46)
Finance costs (38) (34)
Advanced proceeds from rights offer 1 -
Dividends paid (25) (103)
Net cash inflow (outflow) from financing
activities 330 (34)
Net (decrease) increase in cash and cash
equivalents 27 (101)
Translation (24) 4
Cash and cash equivalents at beginning of period 496 495
Net cash and cash equivalents at end of period 500 398
Cash generated from operations
(Loss) profit before taxation (151) 261
Adjusted for:
Movement on non-hedge derivatives and other
commodity contracts 510 111
Amortisation of tangible assets 296 274
Finance costs and unwinding of obligations 63 59
Environmental, rehabilitation and other
expenditure 7 (5)
Operating special items (47) (14)
Amortisation of intangible assets 1 1
Deferred stripping (25) (33)
Fair value adjustment on option components of
convertible bond (24) (51)
Interest receivable (24) (19)
Other non-cash movements 24 46
Movements in working capital (219) (106)
412 526
Movements in working capital
Increase in inventories (170) (115)
(Increase) decrease in trade and other receivables (28) (29)
(Decrease) increase in trade and other payables (21) 39
(219) (106)
Rounding of figures may result in computational discrepancies.
Statement of recognised income and expense
Six months Year Six months
ended ended ended
June December June
2008 2007 2007
SA Rand million Unaudited Audited Unaudited
Actuarial loss on pension and
post-retirement benefits - (99) -
Net loss on cash flow hedges removed
from equity and reported in gold sales 1,017 1,421 540
Net loss on cash flow hedges (763) (1,173) (67)
Hedge (effectiveness) ineffectiveness (2) 69 -
(Loss) gain on available-for-sale
financial assets (67) 8 -
Deferred taxation on items above (51) 36 (74)
Translation 4,108 (169) 376
Net income recognised directly in equity 4,242 93 775
(Loss) profit for the period (4,419) (4,047) 1,057
Total recognised (expense) income
for the period (177) (3,954) 1,832
Attributable to:
Equity shareholders (438) (4,169) 1,705
Minority interest 261 215 127
(177) (3,954) 1,832
US Dollar million
Actuarial loss on pension and
post-retirement benefits - (14) -
Net loss on cash flow hedges removed
from equity and reported in gold sales 134 202 78
Net loss on cash flow hedges (100) (168) (10)
Hedge ineffectiveness - 10 -
(Loss) gain on available-for-sale
financial assets (9) 1 -
Deferred taxation on items above (6) 5 (11)
Translation 351 6 50
Net income recognised directly in equity 370 42 107
(Loss) profit for the period (283) (636) 148
Total recognised income (expense)
for the period 87 (594) 255
Attributable to:
Equity shareholders 62 (627) 237
Minority interest 25 33 18
87 (594) 255
Rounding of figures may result in computational discrepancies.
Notes
for the quarter and six months ended 30 June 2008
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 2007 and
revised International Financial Reporting Standards (IFRS) which are effective
1 January 2008, where applicable.
The financial statements of AngloGold Ashanti Limited have been prepared in
compliance with IAS34, JSE Listings Requirements and in the manner required by
the South African Companies Act, 1973 for the preparation of financial
information of the group for the quarter and six months ended 30 June 2008.
2. Revenue
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2008 2008 2007 2008 2007
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Gold income 7,508 7,245 5,222 14,753 10,886
By-products (note 3) 110 145 178 254 323
Interest received 102 82 62 184 135
7,720 7,471 5,461 15,191 11,343
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2008 2008 2007 2008 2007
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Gold income 968 958 739 1,926 1,522
By-products (note 3) 14 19 25 33 45
Interest received 13 11 9 24 19
996 987 773 1,983 1,586
3. Cost of sales
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2008 2008 2007 2008 2007
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Cash operating
costs (4,168) (3,770) (3,176) (7,937) (6,274)
By-products
revenue (note 2) 110 145 178 254 323
By-products cash
operating
costs (159) (107) (143) (265) (243)
(4,217) (3,732) (3,141) (7,948) (6,194)
Other cash costs (207) (251) (165) (459) (342)
Total cash costs (4,424) (3,983) (3,305) (8,407) (6,537)
Retrenchment costs (15) (26) (9) (42) (16)
Rehabilitation and
other non-cash
costs (15) (106) (19) (120) (39)
Production costs (4,454) (4,115) (3,333) (8,569) (6,591)
Amortisation of
tangible assets (1,184) (1,082) (1,009) (2,266) (1,957)
Amortisation of
intangible assets (4) (4) (3) (8) (7)
Total production
costs (5,642) (5,201) (4,346) (10,843) (8,556)
Inventory change 236 209 214 445 200
(5,406) (4,992) (4,132) (10,398) (8,356)
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2008 2008 2007 2008 2007
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Cash operating costs (537) (500) (449) (1,036) (878)
By-products revenue
(note 2) 14 19 25 33 45
By-products cash operating
costs (21) (14) (20) (35) (34)
(544) (495) (444) (1,038) (867)
Other cash costs (27) (33) (23) (60) (48)
Total cash costs (570) (528) (468) (1,098) (915)
Retrenchment costs (2) (3) (1) (5) (2)
Rehabilitation and
other non-cash costs (2) (14) (3) (15) (5)
Production costs (574) (545) (471) (1,119) (923)
Amortisation of
tangible assets (153) (144) (143) (296) (274)
Amortisation of
intangible assets - - - (1) (1)
Total production costs (727) (689) (615) (1,416) (1,198)
Inventory change 30 28 30 58 28
(698) (661) (585) (1,359) (1,169)
Rounding of figures may result in computational discrepancies.
4. (Loss) gain on non-hedge derivatives and other commodity contracts
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2008 2008 2007 2008 2007
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
(Loss) gain on realised
non-hedge
derivatives (249) (158) 598 (407) 990
Realised loss on other
commodity
contracts (128) - - (128) -
Loss on accelerated
settlement of non-
hedge derivatives (8,635) - - (8,635) -
Gain (loss) on unrealised
non-hedge
derivatives 7,673 (5,464) 99 2,210 (902)
Unrealised gain (loss) on
other commodity
physical borrowings 19 (10) 19 9 (28)
Provision reversed for
loss on future
deliveries of other
commodities 3 20 125 23 119
(Loss) gain on non-hedge
derivatives and
other commodity contracts (1,316) (5,612) 840 (6,928) 178
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2008 2008 2007 2008 2007
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
(Loss) gain on realised
non-hedge
derivatives (32) (22) 84 (54) 139
Realised loss on other
commodity
contracts (16) - - (16) -
Loss on accelerated
settlement of non-
hedge derivatives (1,089) - - (1,089) -
Gain (loss) on unrealised
non-hedge
derivatives 899 (353) (28) 547 (127)
Unrealised gain (loss) on
other commodity
physical borrowings 2 (1) 3 1 (4)
Provision reversed for
loss on future
deliveries of other
commodities - 3 18 3 17
(Loss) gain on non-hedge
derivatives and
other commodity contracts (235) (373) 77 (608) 25
5. Other operating (expenses) income
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2008 2008 2007 2008 2007
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Pension and medical defined
benefit provisions (24) (24) (25) (48) (50)
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 (27) 60 (6) 33 (27)
Miscellaneous 3 (4) (12) (1) (14)
(48) 32 (43) (16) (91)
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2008 2008 2007 2008 2007
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Pension and medical defined
benefit provisions (3) (3) (3) (6) (7)
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 (3) 8 (1) 5 (4)
Miscellaneous - (1) (2) (1) (2)
(6) 4 (6) (2) (13)
6. Operating special items
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2008 2008 2007 2008 2007
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Reimbursement (under provision)
of indirect tax expenses 49 - (6) 49 (6)
Impairment of tangible
assets (note 9) (1) (3) - (4) (1)
Recovery of loan - - - - 21
ESOP and BEE costs resulting from
rights offer (76) - - (76) -
Profit on disposal and
abandonment of
assets (note 9) 272 85 92 357 86
Profit on disposal of
investment in
subsidiary (note 9) 29 - - 29 -
273 82 86 355 101
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2008 2008 2007 2008 2007
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Reimbursement (under provision)
of indirect tax expenses 6 - (1) 6 (1)
Impairment of tangible
assets (note 9) - - - - -
Recovery of loan - - - - 3
ESOP and BEE costs resulting from
rights
offer (10) - - (10) -
Profit on disposal and
abandonment of
assets (note 9) 35 11 13 46 12
Profit on disposal of
investment in
subsidiary (note 9) 4 - - 4 -
36 11 12 47 14
Rounding of figures may result in computational discrepancies.
7. Taxation
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2008 2008 2007 2008 2007
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Current tax
Normal taxation (270) (577) (333) (847) (775)
Disposal of tangible
assets (note 9) (3) (2) (18) (5) (22)
(Under) over provision
prior year (28) 14 23 (14) (44)
(301) (565) (328) (866) (841)
Deferred taxation
Temporary differences 604 (151) 31 452 32
Unrealised non-hedge
derivatives and other
commodity contracts (1,545) 590 22 (954) 104
Disposal of tangible
assets (note 9) 7 (11) (6) (4) (10)
Change in estimated
deferred tax rate - - (90) - (90)
Change in statutory tax
rate - 189 - 189 -
(934) 617 (43) (317) 36
Total taxation (1,235) 52 (371) (1,183) (805)
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2008 2008 2007 2008 2007
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Current tax
Normal taxation (36) (77) (46) (111) (108)
Disposal of tangible
assets (note 9) - - (3) (1) (3)
(Under) over provision
prior year (4) 2 3 (2) (6)
(40) (75) (46) (114) (117)
Deferred taxation
Temporary differences 76 (20) 4 55 4
Unrealised non-hedge
derivatives and other
commodity contracts (194) 72 4 (122) 15
Disposal of tangible
assets (note 9) 1 (1) (1) - (1)
Change in estimated
deferred tax rate - - (13) - (13)
Change in statutory tax rate - 25 - 25 -
(117) 76 (6) (42) 5
Total taxation (157) 1 (52) (156) (112)
8. Discontinued operations
The Ergo surface dump reclamation, which forms part of the South African
operations, has been discontinued as the operation has reached the end of its
useful life. The results of Ergo are presented below:
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2008 2008 2007 2008 2007
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Gold income - - 2 - 4
Cost of sales (12) (5) (5) (17) (10)
Gross loss (12) (5) (2) (17) (6)
Profit on disposal of assets 217 - - 217 -
Other income 3 3 - 5 -
Profit (loss) before taxation 207 (2) (2) 205 (6)
Normal tax (22) - (3) (22) (3)
Deferred tax on disposal of assets
(note 9) 6 - - 6 -
Other deferred tax - (1) 1 (1) (1)
Net profit (loss) attributable
to discontinued operations 191 (3) (4) 188 (10)
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2008 2008 2007 2008 2007
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Gold income - - - - 1
Cost of sales (2) (1) (1) (2) (1)
Gross loss (2) (1) (1) (2) (1)
Profit on disposal of assets 27 - - 27 -
Other income - 1 - 1 -
Profit (loss) before taxation 26 - (1) 26 (1)
Normal tax (3) - - (3) -
Deferred tax on disposal of assets
(note 9) 1 - - 1 -
Other deferred tax - - - - -
Net profit (loss) attributable
to discontinued operations 24 - (1) 24 (1)
The pre-tax profit on disposal of the assets amounting to $27million (R217
million) relates to the remaining moveable and immovable assets of Ergo that
was sold by the Company to a consortium of Mintails South Africa (Pty) Ltd/DRD
South African Operations (Pty) Ltd Joint Venture. The transaction was approved
by the Competition Commissioner during May 2008 and the Joint Venture will
operate, for its own account, under the AngloGold Ashanti authorisations until
the new order mining rights have been obtained and transferred to the Joint
Venture.
Rounding of figures may result in computational discrepancies.
9. Headline (loss) earnings
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2008 2008 2007 2008 2007
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 (817) (3,812) 1,083 (4,630) 933
Impairment of tangible
assets (note 6) 1 3 - 4 1
Profit on disposal and
abandonment
of assets (note 6) (272) (85) (92) (357) (86)
Profit on disposal of
investment in
subsidiary (note 6) (29) - - (29) -
Profit on disposal of
discontinued
assets (note 8) (217) - - (217) -
Impairment of investment
in associate 13 1 50 14 50
Profit on disposal of
assets in associate (23) - - (23) -
Taxation on items above -
current portion (note 7) 3 2 18 5 22
Taxation on items above -
deferred portion (note 7) (7) 11 6 4 10
Discontinued operation -
Taxation
on item above (note 8) (6) - - (6) -
Headline (loss) earnings (1,354) (3,880) 1,066 (5,234) 930
Cents per share (1)
Headline (loss) earnings (479) (1,376) 379 (1,853) 331
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2008 2008 2007 2008 2007
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 (168) (142) 111 (310) 131
Impairment of tangible assets
(note 6) - - - - -
Profit on disposal and
abandonment
of assets (note 6) (35) (11) (13) (46) (12)
Profit on disposal of
investment in
subsidiary (note 6) (4) - - (4) -
Profit on disposal of
discontinued
assets (note 8) (27) - - (27) -
Impairment of investment in
associate 2 - 7 2 7
Profit on disposal of assets in
associate (3) - - (3) -
Taxation on items above -
current portion (note 7) - - 3 1 3
Taxation on items above -
deferred portion (note 7) (1) 1 1 - 1
Discontinued operation -
Taxation
on item above (note 8) (1) - - (1) -
Headline (loss) earnings (237) (151) 109 (388) 130
Cents per share (1)
Headline (loss) earnings (84) (54) 39 (137) 46
(1) Calculated on the basic weighted average number of ordinary shares.
10. Shares
Quarter ended
Jun Mar
2008 2008
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 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 277,894,808 277,745,007
E ordinary shares in issue 4,042,865 4,104,635
Total ordinary shares: 281,937,673 281,849,642
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 period, the following were taken into
consideration:
Ordinary shares 277,825,711 277,658,759
E ordinary shares 4,064,751 4,122,800
Fully vested options 607,752 280,789
Weighted average number of shares 282,498,214 282,062,348
Dilutive potential of share options - -
Diluted number of ordinary shares (1) 282,498,214 282,062,348
Six months ended
Jun Jun Jun
2007 2008 2007
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 4,280,000
A redeemable preference shares
of 50 SA cents each 2,000,000 2,000,000 2,000,000
B redeemable preference shares
of 1 SA cent each 5,000,000 5,000,000 5,000,000
Issued and fully paid:
Ordinary shares in issue 276,836,030 277,894,808 276,836,030
E ordinary shares in issue 4,115,930 4,042,865 4,115,930
Total ordinary shares: 280,951,960 281,937,673 280,951,960
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 period,
the following were taken
into consideration:
Ordinary shares 276,792,157 277,742,234 276,619,448
E ordinary shares 4,152,725 4,093,776 4,150,888
Fully vested options 308,961 630,553 359,980
Weighted average number
of shares 281,253,843 282,466,563 281,130,316
Dilutive potential of
share options 568,077 - 619,872
Diluted number of ordinary
shares (1) 281,821,920 282,466,563 281,750,188
(1) The basic and diluted number of ordinary shares is the same for the March
2008 quarter, June 2008 quarter and period ended six months June 2008 as the
effects of shares for performance related options are anti-dilutive.
Rounding of figures may result in computational discrepancies.
11. Share capital and premium
As at
Jun Mar Dec Jun
2008 2008 2007 2007
Unaudited Unaudited Audited Unaudited
SA Rand million
Balance at beginning
of period 23,322 23,322 23,045 23,045
Ordinary shares issued 112 73 283 146
E ordinary shares
cancelled (10) (5) (6) (9)
Translation - - - -
Sub-total 23,424 23,391 23,322 23,182
Redeemable preference
shares held within the group (312) (312) (312) (312)
Ordinary shares held
within the group (282) (288) (292) (289)
E ordinary shares held
within the group (335) (343) (347) (344)
Balance at end of period 22,495 22,448 22,371 22,237
As at
Jun Mar Dec Jun
2008 2008 2007 2007
Unaudited Unaudited Audited Unaudited
US Dollar million
Balance at beginning of
period 3,425 3,425 3,292 3,292
Ordinary shares issued 15 10 40 19
E ordinary shares
cancelled (1) (1) (1) (1)
Translation (448) (544) 94 (7)
Sub-total 2,991 2,890 3,425 3,303
Redeemable preference
shares held within the
group (40) (39) (46) (44)
Ordinary shares held
within the group (36) (36) (43) (41)
E ordinary shares held
within the group (43) (42) (51) (49)
Balance at end of period 2,872 2,773 3,285 3,169
12. Retained earnings and other reserves
Foreign
Non- currency
Retained distributable translation
earnings reserves reserve
SA Rand million
Balance at December 2006 (214) 138 436
Profit attributable to equity
shareholders 933
Dividends (668)
Net loss on cash flow hedges
removed from
equity and reported in gold sales
Net loss on cash flow hedges
Deferred taxation on cash flow hedges
Share-based payment for share
awards and BEE
transaction
Translation 385
Balance at June 2007 51 138 821
Balance at December 2007 (5,524) 138 338
Deferred taxation rate change
Loss attributable to equity
shareholders (4,630)
Dividends (148)
Transfers to foreign currency
translation reserve (12) 12
Disposal of subsidiary
Net loss on cash flow hedges
removed from equity
and reported in gold sales
Net loss on cash flow hedges
Hedge ineffectiveness
Deferred taxation on cash flow
hedges and hedge
effectiveness
Loss on available-for-sale
financial assets
Deferred taxation on
available-for-sale financial assets
Share-based payment for share
awards and BEE
transaction
Translation 4,175
Balance at June 2008 (10,314) 138 4,525
Other
Actuarial comprehen-
(losses) sive
gains income Total
SA Rand million
Balance at December 2006 (45) (1,503) (1,188)
Profit attributable to equity
shareholders 933
Dividends (668)
Net loss on cash flow hedges removed from
equity and reported in gold sales 536 536
Net loss on cash flow hedges (67) (67)
Deferred taxation on cash flow hedges (74) (74)
Share-based payment for share awards
and BEE
transaction 117 117
Translation (8) 377
Balance at June 2007 (45) (999) (34)
Balance at December 2007 (108) (1,011) (6,167)
Deferred taxation rate change (3) (3)
Loss attributable to equity
shareholders (4,630)
Dividends (148)
Transfers to foreign currency
translation reserve -
Disposal of subsidiary (6) (6)
Net loss on cash flow hedges removed
from equity
and reported in gold sales 1,005 1,005
Net loss on cash flow hedges (758) (758)
Hedge ineffectiveness (2) (2)
Deferred taxation on cash flow hedges
and hedge
effectiveness (64) (64)
Loss on available-for-sale financial assets (67) (67)
Deferred taxation on
available-for-sale financial assets 16 16
Share-based payment for share awards
and BEE
transaction 186 186
Translation 2 (112) 4,065
Balance at June 2008 (109) (813) (6,573)
Rounding of figures may result in computational discrepancies.
12. Retained earnings and other reserves cont.
Foreign
Non- currency
Retained distributable translation
earnings reserves reserve
US Dollar million
Balance at December 2006 (209) 20 241
Profit attributable to equity
shareholders 131
Dividends (90)
Net loss on cash flow hedges
removed from
equity and reported in gold sales
Net loss on cash flow hedges
Deferred taxation on cash flow
hedges
Share-based payment for share
awards and BEE
transaction
Translation 50
Balance at June 2007 (168) 20 291
Balance at December 2007 (1,020) 20 258
Deferred taxation rate change
Loss attributable to equity
shareholders (310)
Dividends (18)
Transfers to foreign currency
translation reserve (2) 2
Disposal of subsidiary
Net loss on cash flow hedges
removed
from equity and reported in gold sales
Net loss on cash flow hedges
Hedge ineffectiveness
Deferred taxation on cash flow
hedges and hedge
effectiveness
Loss on available-for-sale
financial assets
Deferred taxation on
available-for-sale financial assets
Share-based payment for share
awards and BEE
transaction
Translation (2) 351
Balance at June 2008 (1,350) 18 611
Other
Actuarial Comprehen-
(losses) sive
gains income Total
US Dollar million
Balance at December 2006 (6) (215) (169)
Profit attributable to equity shareholders 131
Dividends (90)
Net loss on cash flow hedges removed from
equity and reported in gold sales 77 77
Net loss on cash flow hedges (10) (10)
Deferred taxation on cash flow hedges (11) (11)
Share-based payment for share awards and
BEE
transaction 17 17
Translation 50
Balance at June 2007 (6) (142) (5)
Balance at December 2007 (16) (148) (906)
Deferred taxation rate change -
Loss attributable to equity shareholders (310)
Dividends (18)
Transfers to foreign currency translation reserve -
Disposal of subsidiary (1) (1)
Net loss on cash flow hedges removed
from equity and reported in gold sales 132 132
Net loss on cash flow hedges (99) (99)
Hedge ineffectiveness - -
Deferred taxation on cash flow hedges and hedge
effectiveness (8) (8)
Loss on available-for-sale financial assets (9) (9)
Deferred taxation on available-for-sale
financial assets 2 2
Share-based payment for share awards and
BEE
transaction 24 24
Translation 2 3 354
Balance at June 2008 (14) (104) (839)
13. Minority interests
As at
Jun Mar Dec Jun
2008 2008 2007 2007
Unaudited Unaudited Audited Unaudited
SA Rand million
Balance at beginning of period 429 429 436 436
Profit for the period 211 90 222 124
Dividends paid (53) (4) (131) (88)
Acquisition of minority
interest (1) - - (91) -
Net loss on cash flow
hedges removed from
equity and reported in
gold sales 12 6 14 4
Net loss on cash flow
hedges (5) (5) (12) -
Translation 43 60 (9) (1)
Balance at end of period 637 576 429 475
As at
Jun Mar Dec Jun
2008 2008 2007 2007
Unaudited Unaudited Audited Unaudited
US Dollar million
Balance at beginning of
period 63 63 62 62
Profit for the period 27 11 32 17
Dividends paid (7) (1) (19) (12)
Acquisition of minority
interest (1) - - (13) -
Net loss on cash flow
hedges removed from
equity and reported in
gold sales 2 1 2 1
Net loss on cash flow
hedges (1) (1) (2) -
Translation (3) (2) 1 -
Balance at end of period 81 71 63 68
(1) With effect 1 September 2007, AngloGold Ashanti acquired the remaining 15%
minorities of Iduapriem.
Rounding of figures may result in computational discrepancies.
14. Derivatives
Hedge book delta reduced by 2.71Moz during the quarter, ahead of schedule.
15. Trade, other payables and deferred income
The amount of $1,616m (R12,658m) as at 30 June 2008 includes an accrual for the
accelerated cancellation of non-hedge derivative contracts amounting to
$1,009m (R7,900m). These accruals were cash settled during the month of July
2008.
16. Exchange rates
Jun Mar Jun Dec
2008 2008 2007 2007
Unaudited Unaudited Unaudited Unaudited
Rand/US dollar average
for the year to date 7.64 7.52 7.14 7.03
Rand/US dollar average
for the quarter 7.76 7.52 7.07 6.76
Rand/US dollar closing 7.83 8.09 7.02 6.81
Rand/Australian dollar
average for the year to
date 7.08 6.84 5.78 5.89
Rand/Australian dollar
average for the quarter 7.32 6.84 5.88 6.00
Rand/Australian dollar
closing 7.54 7.40 5.96 5.98
BRL/US dollar average
for the year to date 1.70 1.74 2.04 1.95
BRL/US dollar average
for the quarter 1.65 1.74 1.97 1.78
BRL/US dollar closing 1.59 1.74 1.92 1.78
17. Capital commitments
Jun Mar Jun Dec
2008 2008 2007 2007
Unaudited Unaudited Unaudited Audited
SA Rand million
Orders placed and
outstanding on capital
contracts
at the prevailing rate of
exchange 7,510 3,697 4,216 2,968
Jun Mr Jun Dec
2008 2008 2007 2007
Unaudited Unaudited Unaudited Audited
US Dollar million
Orders placed and
outstanding on capital
contracts
at the prevailing rate of
exchange 948 457 601 436
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 the financing facilities mature in the near future,
the group believes that these facilities can be refinanced on similar terms to
those currently in place.
18. Contingent liabilities
AngloGold Ashanti`s material contingent liabilities at 30 June 2008 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 geological
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.
Deep groundwater pollution - South Africa - AngloGold Ashanti has identified a
flooding and future pollution risk posed by deep groundwater, due to the
interconnected nature of operations in the West Wits and Vaal River operations.
AGA is involved in Task Teams and other structures to find long term
sustainable solutions for this risk, together with industry partners and
government. There is too little foundation for the accurate estimate of a
liability and thus 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 ($13m). 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
$47m. Although MSG requested the TARE in early 2004, the TARE, which authorised
the remittance of gold to the company`s branch in Minas Gerais specifically for
export purposes, was only granted and executed in May 2006.
In November 2006 the administrative council`s second chamber ruled in favour of
MSG 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 $29m. 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 discussing the case at the judicial sphere. The company`s
attributable share of the assessment is approximately $9m.
Tax Disputes - Brazil - Morro Velho and AngloGold Ashanti Brasil Mineracao are
involved in disputes with tax authorities. These disputes involve seven federal
tax assessments including income tax, social contributions and annual property
tax based on ownership of properties outside of urban perimeters (ITR). The
amount involved is approximately $12m.
19. 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 $52m at 30 June 2008 (31 March 2008: attributable $47m). The last
audited value added tax return was for the period ended 31 March 2007 and at
the balance sheet date an attributable $23m was still outstanding and $29m 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 $7m at 30 June 2008 (31 March 2008: attributable $6m). 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. An attributable $5m is still
subject to authorisation by the authorities. 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. Management
is in negotiations with the Government of Mali to agree a protocol for the
repayment of the outstanding amounts. The amounts outstanding have been
discounted to their present value at a rate of 6.5%.
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
$15m at 30 June 2008 (31 March 2008: $17m). The last audited value added tax
return was for the period ended 30 April 2008 and at the balance sheet date
$15m was still outstanding which has been subjected 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 7.8%.
Reimbursable fuel duties from the Tanzanian government amounts to $41m at 30
June 2008 (31 March 2008: $36m). 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
$26m have been lodged with the Customs and Excise authorities, which are still
outstanding, whilst claims for refund of $15m 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 7.8%.
20. 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.
21. Borrowings
AngloGold Ashanti`s borrowings are interest bearing.
22. Announcements
On 6 May 2008, AngloGold Ashanti announced the retirement of Mrs E Le R Bradley
from the board effective 6 May 2008.
On 6 May 2008, AngloGold Ashanti announced the completion of the initial
JORC-compliant resource estimate for the La Colosa deposit, the second
significant greenfields discovery (Gramalote being the first) in Colombia,
which was discovered by AngloGold Ashanti`s Colombian greenfields exploration
team during 2006. The Project which is 100% owned by AngloGold Ashanti and is
located 150km west of Colombia`s capital city, Bogota, in the department of
Tolima and is expected to yield some 12.9Moz of inferred Mineral Resource at a
gold price of $1,000/oz.
On 15 May 2008, AngloGold Ashanti announced that it had terminated the process
related to its proposed sale of its interests in Morila Limited, due to the
fact that no proposals were received which met the company`s value criteria for
such a sale. AngloGold Ashanti will remain a joint venture partner in Morila
Limited, together with Randgold Resources Limited and consequently, through
Morila Limited, a joint venture partner together with the Government of Mali in
Morila SA. Randgold Resources will continue as the operator of Morila Gold
Mine.
On 16 May 2008, AngloGold Ashanti announced that it had completed the
transaction to acquire a 15.9% direct interest in B2Gold and increase B2Gold`s
interest in certain Colombian properties, as announced on 14 February 2008
On 29 May 2008, AngloGold Ashanti announced its amendment to the merger
agreement to acquire 100% of Golden Cycle Gold Corporation (GCGC) to adjust the
consideration that GCGC shareholders receive from 0.29 AngloGold Ashanti ADRs
to 0.3123 AngloGold Ashanti ADRs to account for the effects of the AngloGold
Ashanti rights offer announced on 23 May 2008. GCGC shareholders approved the
merger on 30 June 2008 at a general meeting and the merger became effective on
1 July 2008 at which time, AngloGold Ashanti acquired the remaining 33%
shareholding in CC&V. A total of 3,181,198 AngloGold Ashanti ADRs were issued
pursuant to this transaction.
On 26 June 2008, AngloGold Ashanti announced that the Johannesburg High Court
ruled that the exception lodged by AngloGold Ashanti in respect of Mr
Thembekile Mankayi`s claim for damages against the company had been upheld. Mr
Mankayi had lodged a R2.7m claim in respect of occupational lung disease
allegedly sustained during his employment at AngloGold Ashanti`s then Vaal
Reefs mine in the 1990s. The finding confirms that employees who qualify for
benefits in respect of the Occupational Diseases in Mines and Works Act (ODMWA)
may not, in addition, lodge civil claims against their employers in respect of
their relevant conditions.
On 30 June 2008, AngloGold Ashanti announced further changes to its Executive
Management as part of its previously announced transformation.
Shareholders at a general meeting held on 22 May 2008 approved the issue of new
ordinary shares to AngloGold Ashanti ordinary and E ordinary shareholders by
way of a rights offer at a ratio of 24.6403 rights offer shares for every 100
AngloGold Ashanti shares held on the record date of 6 July 2008. The Final
terms of the rights offer were announced on 23 May 2008 resulting in a total of
69,470,442 new rights offer shares being offered to shareholders at a
subscription price of R194.00 per share. On 7 July 2008, AngloGold Ashanti
announced that the rights offer closed on 4 July 2008 and that 68,105,143
shares had been subscribed for (98% of rights offered) which shares were issued
on 7 July 2008. Applications to acquire additional shares amounting to
400,468,713 shares (or 576.5%) had been received and the remaining 1,365,299
shares were issued on 11 July 2008. A total of R13.477bn was raised.
On 29 July 2008, AngloGold Ashanti announced the resignation of Simon Thompson
from the board, effective 28 July 2008.
23. Dividend
The directors have today declared Interim Dividend No. 104 (Interim Dividend
No. 102: 90) of 50 South African cents per ordinary share for the six months
ended 30 June 2008. In compliance with the requirements of Strate, given the
company`s primary listing on the JSE Limited, the salient dates for payment of
the dividend are as follows:
To holders of ordinary shares and to holders of CHESS Depositary Interests
(CDIs) Each CDI represents one-fifth of an ordinary share
2008
Currency conversion date for UK pounds, Australian
dollars and Ghanaian cedis Thursday, 14 August
Last date to trade ordinary shares cum dividend Friday, 15 August
Last date to register transfers of certificated
securities cum dividend Friday, 15 August
Ordinary shares trade ex dividend Monday, 18 August
Record date Friday, 22 August
Payment date Friday, 29 August
On the payment date, dividends due to holders of certificated securities on the
South African share register will either be electronically transferred to
shareholders` bank accounts or, in the absence of suitable mandates, dividend
cheques will be posted to such shareholders.
Dividends in respect of dematerialised shareholdings will be credited to
shareholders` accounts with the relevant CSDP or broker.
To comply with the further requirements of Strate, between Monday, 18 August
2008 and Friday, 22 August 2008, both days inclusive, no transfers between the
South African, United Kingdom, Australian and Ghana share registers will be
permitted and no ordinary shares pertaining to the South African share register
may be dematerialised or rematerialised.
To holders of American Depositary Shares
Each American Depositary Share (ADS) represents one ordinary share
2008
Ex dividend on New York Stock Exchange Wednesday, 20 August
Record date Friday, 22 August
Approximate date for currency conversion Friday, 29 August
Approximate payment date of dividend Monday, 8 September
Assuming an exchange rate of R7.3605/$1, the dividend payable on an ADS is
equivalent to 6.7 US cents. This compares with the final dividend of 6.6 US
cents per ADS paid on 17 March 2008. However, the actual rate of payment will
depend on the exchange rate on the date for currency conversion.
To holders of Ghanaian Depositary Shares (GhDSs)
100 GhDSs represent one ordinary share
2008
Last date to trade and to register GhDSs cum dividend Friday, 15 August
GhDSs trade ex dividend Monday, 18 August
Record date Friday, 22 August
Approximate payment date of dividend Monday, 1 September
Assuming an exchange rate of R1/?0.1561, the dividend payable per GhDS is
equivalent to 0.78 cedis. This compares with the final dividend of 0.065 cedis
per Ghanaian Depositary Share (GhDS) paid on 10 March 2008. However, the actual
rate of payment will depend on the exchange rate on the date for currency
conversion. In Ghana, the authorities have determined that dividends payable to
residents on the Ghana share register be subject to a final withholding tax at
a rate of 10%, similar to the rate applicable to dividend payments made by
resident companies which is currently at 10%.
In addition, directors have today declared Interim Dividend No. E4 (Interim
Dividend No E2: 45) of 25 South African cents per E ordinary share, payable to
employees participating in the Bokamoso ESOP and Izingwe Holdings (Proprietary)
Limited. These dividends are payable on 29 August 2008.
24. 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
30 July 2008
Administrative information
ANGLOGOLD ASHANTI LIMITED
Registration No. 1944/017354/06
Incorporated in the Republic of South
Africa
Share codes:
ISIN: ZAE000043485
JSE: ANG
LSE: AGD
NYSE: AU
ASX: AGG
GhSE (Shares): AGA
GhSE (GhDS): AAD
Euronext Paris: VA
Euronext Brussels: ANG
JSE Sponsor: UBS
Auditors: Ernst & Young Inc
Offices
Registered and Corporate
76 Jeppe Street
Newtown 2001
(PO Box 62117, Marshalltown 2107)
South Africa
Telephone: +27 11 637 6000
Fax: +27 11 637 6624
Australia
Level 13, St Martins Tower
44 St George`s Terrace
Perth, WA 6000
(PO Box Z5046, Perth WA 6831)
Australia
Telephone: +61 8 9425 4602
Fax: +61 8 9425 4662
Ghana
Gold House
Patrice Lumumba Road
(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)
S Venkatakrishnan *
Non-Executive
R P Edey * (Chairman)
Dr T J Motlatsi (Deputy Chairman)
F B Arisman #
R E Bannerman
J H Mensah
W A Nairn
Prof W L Nkuhlu
S M Pityana
* British # American ## Ghanaian
Australian
Officers
Company Secretary: Ms L Eatwell
Contacts
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 (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 2007 dated
19 May 2008, which was filed with the Securities and Exchange Commission (SEC)
on 19 May 2008.
Date: 31/07/2008 08:00:28 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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