|
ANG
ANANO
ANG - Anglogold Ashanti Limited - Report to shareholders for the quarter and
nine months ended 30 September 2008
ANGLOGOLD ASHANTI LIMITED
Registration No. 1944/017354/06
Incorporated in the Republic of South Africa
Share codes:
ISIN: ZAE000043485
JSE: ANG
LSE: AGD
NYSE: AU
ASX: AGG
GhSE (Shares): AGA
GhSE (GhDS): AAD
Euronext Paris: VA
Euronext Brussels: ANG
Report to shareholders
for the quarter and nine months ended 30 September 2008
Group results for the quarter....
- Delivery for the third consecutive quarter on production and cost guidance,
with continued reduction in the hedge book.
- Production at 1.265Moz, 1% higher than previous quarter, with Obuasi and
Cerro Vanguardia posting substantial improvements.
- Total cash costs at $486/oz - better than guidance but higher than previous
quarter due to wage increases, power tariffs, inflation and inventory
movements
- while costs are expected to reduce to approximately $460/oz in the fourth
quarter.
- Continuing safety focus, with lost time injury rate improving 10% and despite
four fatalities during the quarter, the fatality rate reduced for the year by
60% against the same period in 2007.
- Uranium production up 7% to 346,000 pounds, with enhanced exposure to the
spot market expected in the fourth quarter.
- Hedge book commitments reduced by 580,000oz during the quarter, with the
company on track to reduce book to approximately 6.0Moz by year-end.
- Adjusted headline loss of $119m incurred, as a result of accelerated hedge
reduction.
- Greenfields exploration projects continue to make solid progress,
particularly in Australia and Colombia.
Quarter
ended ended
Sep Jun
2008 2008
Restated
SA rand / Metric
Operating review
Gold
Produced - kg / oz (000) 39,336 38,984
Price received - R/kg / $/oz 160,127 (44,303)
Price received normalised
for accelerated settlement
of non-hedge derivatives - R/kg / $/oz 160,127 178,796
Total cash costs - R/kg / $/oz 121,440 108,195
Total production costs - R/kg / $/oz 152,945 138,115
Financial review
Gross profit (loss) - Rm / $m 851 1,431
Gross profit (loss) adjusted for
the loss on unrealised non-hedge
derivatives and other commodity
contracts - Rm / $m 184 (6,282)
Adjusted gross profit normalised
for accelerated settlement of
non-hedge derivatives - Rm / $m 184 1,736
Profit (loss) attributable to
equity
shareholders 1 - Rm / $m (247) (176)
Headline earnings (loss) 2 - Rm / $m (298) (713)
Headline (loss) earnings adjusted
for the gain (loss) on unrealised
non-hedge derivatives and other
commodity contracts and fair
value adjustments on convertible
bond - Rm / $m (956) (6,876)
Capital expenditure - Rm / $m 2,623 2,357
Profit (loss) per ordinary share - cents/share
Basic (71) (62)
Diluted (71) (62)
Headline 2 (86) (252)
Headline (loss) earnings adjusted
for the gain (loss) on unrealised
non-hedge derivatives and other
commodity contracts and fair
value adjustments on convertible
bond - cents/share (275) (2,434)
Nine months
ended ended
Sep Sep
2008 2007
Restated
SA rand / Metric
Gold
Produced - kg / oz (000) 115,530 127,809
Price received - R/kg / $/oz 100,660 139,732
Price received normalised
for accelerated settlement
of non-hedge derivatives - R/kg / $/oz 174,646 139,732
Total cash costs - R/kg / $/oz 111,540 78,074
Total production costs - R/kg / $/oz 142,586 102,443
Financial review
Gross profit (loss) - Rm / $m (1,248) 1,312
Gross profit (loss) adjusted for
the loss on unrealised non-hedge
derivatives and other commodity
contracts - Rm / $m (4,187) 4,847
Adjusted gross profit normalised
for accelerated settlement of
non-hedge derivatives - Rm / $m 3,831 4,847
Profit (loss) attributable to equity
shareholders 1 - Rm / $m (4,236) (1,071)
Headline earnings (loss) 2 - Rm / $m (4,891) (1,042)
Headline (loss) earnings adjusted
for the gain (loss) on unrealised
non-hedge derivatives and other
commodity contracts and fair
value adjustments on convertible
bond - Rm / $m (7,019) 1,855
Capital expenditure - Rm / $m 6,911 5,129
Profit (loss) per ordinary share - cents/share
Basic (1,393) (381)
Diluted (1,393) (381)
Headline 2 (1,609) (370)
Headline (loss) earnings adjusted
for the gain (loss) on unrealised
non-hedge derivatives and other
commodity contracts and fair
value adjustments on convertible
bond - cents/share (2,309) 659
Quarter
ended ended
Sep Jun
2008 2008
Restated
US dollar / Imperial
Gold
Produced - kg / oz (000) 1,265 1,253
Price received - R/kg / $/oz 644 (157)
Price received normalised
for accelerated settlement
of non-hedge derivatives - R/kg / $/oz 644 717
Total cash costs - R/kg / $/oz 486 434
Total production costs - R/kg / $/oz 612 554
Financial review
Gross profit (loss) - Rm / $m 186 117
Gross profit (loss) adjusted for
the loss on unrealised non-hedge
derivatives and other commodity
contracts - Rm / $m 28 (787)
Adjusted gross profit normalised
for accelerated settlement of
non-hedge derivatives - Rm / $m 28 224
Profit (loss) attributable to equity
shareholders 1 - Rm / $m 51 (87)
Headline earnings (loss) 2 - Rm / $m 44 (156)
Headline (loss) earnings adjusted
for the gain (loss) on unrealised
non-hedge derivatives and other
commodity contracts and fair
value adjustments on convertible bond - Rm / $m (119) (866)
Capital expenditure - Rm / $m 338 304
Profit (loss) per ordinary share - cents/share
Basic 15 (31)
Diluted 15 (31)
Headline 2 13 (55)
Headline (loss) earnings adjusted
for the gain (loss) on unrealised
non-hedge derivatives and other
commodity contracts and fair
value adjustments on convertible bond - cents/share (34) (307)
Nine months
ended ended
Sep Sep
2008 2007
Restated
US dollar / Imperial
Gold
Produced - kg / oz (000) 3,714 4,109
Price received - R/kg / $/oz 416 610
Price received normalised
for accelerated settlement
of non-hedge derivatives - R/kg / $/oz 707 610
Total cash costs - R/kg / $/oz 451 341
Total production costs - R/kg / $/oz 576 448
Financial review
Gross profit (loss) - Rm / $m 204 147
Gross profit (loss) adjusted for
the loss on unrealised non-hedge
derivatives and other commodity
contracts - Rm / $m (509) 680
Adjusted gross profit normalised
for accelerated settlement of
non-hedge derivatives - Rm / $m 501 680
Profit (loss) attributable to equity
shareholders 1 - Rm / $m (179) (186)
Headline earnings (loss) 2 - Rm / $m (263) (182)
Headline (loss) earnings adjusted
for the gain (loss) on unrealised
non-hedge derivatives and other
commodity contracts and fair
value adjustments on convertible bond - Rm / $m (880) 260
Capital expenditure - Rm / $m 899 720
Profit (loss) per ordinary share - cents/share
Basic (59) (66)
Diluted (59) (66)
Headline 2 (87) (65)
Headline (loss) earnings adjusted
for the gain (loss) on unrealised
non-hedge derivatives and other
commodity contracts and fair
value adjustments on convertible bond - cents/share (289) 92
Notes:
1. The distortion between the profit / (loss) for the quarter in US dollar when
compared to South African rand, is as a result of a depreciation in the
South African rand between two quarter ends applied on the fair value of the
hedge book.
2. Refer to note 9 "Notes" for the definition.
$ represents US dollar, unless otherwise stated.
Rounding of figures may result in computational discrepancies.
Quarter 3 2008
Operations at a glance
for the quarter ended 30 September 2008
Production Total cash costs
% %
oz (000) Variance 1 $/oz Variance 1
Mponeng 164 3 289 27
AngloGold Ashanti Mineracao 83 1 331 2
TauTona 79 (13) 444 31
Cripple Creek & Victor 63 7 321 7
Kopanang 84 (13) 419 33
Siguiri 2 72 (16) 528 22
Morila 2, 3 38 (17) 463 9
Serra Grande 2 20 (9) 324 6
Sadiola 2, 3 41 (9) 398 (2)
Savuka 15 (17) 603 37
Navachab 17 6 539 (10)
Yatela 2, 3 18 20 631 10
Iduapriem 50 9 563 14
Tau Lekoa 38 9 568 3
Great Noligwa 64 (33) 601 39
Moab Khotsong 68 143 316 (38)
Sunrise Dam 115 1 619 12
Cerro Vanguardia 2 43 59 666 (23)
Obuasi 92 16 677 11
Geita 74 - 699 11
Other 4 25 39
Sub-total 1,265 1 486 12
Less equity accounted JV`s
AngloGold Ashanti
Gross profit
(loss) adjusted
for the loss on
unrealised
non-hedge
derivatives and
other commodity
contracts
$m
Mponeng 50
AngloGold Ashanti Mineracao 18
TauTona 17
Cripple Creek & Victor 12
Kopanang 8
Siguiri 2 6
Morila 2, 3 5
Serra Grande 2 5
Sadiola 2, 3 4
Savuka 2
Navachab 1
Yatela 2, 3 -
Iduapriem (1)
Tau Lekoa (2)
Great Noligwa (3)
Moab Khotsong (3)
Sunrise Dam (10)
Cerro Vanguardia 2 (15)
Obuasi (22)
Geita (44)
Other 4 9
Sub-total 37
Less equity accounted JV`s (9)
AngloGold Ashanti 28
1 Variance September 2008 quarter on June 2008 quarter - increase (decrease).
2 Attributable.
3 Equity accounted joint ventures.
4 Included in other is an amount relating to Nufcor International Limited which
is equity accounted.
Rounding of figures may result in computational discrepancies.
Financial and operating review
OVERVIEW FOR THE QUARTER
After achieving an historic fatal-free second quarter, regrettably four
employees lost their lives at three operations in the West Wits region in South
Africa. At the Vaal River region, consisting of four operations, the region
reported its second consecutive fatal-free quarter. This brings the fatal
injury frequency rate (FIFR) to 0.10 per million hours worked for the quarter,
and for the year to 0.08, compared with a rate of 0.20 for the same period in
2007, some 60% lower. The rate of 0.08 per million hours worked is also the
lowest the company has achieved since inception and the company remains
encouraged by the progress and commitment of all employees to ensuring that
safety is our first value.
Safety indicators continue to show an improvement, with the lost time injury
frequency rate (LTIFR) at 6.97 per million hours worked for the quarter, 10%
lower than the prior quarter`s performance. Four operations, Navachab, CC&V,
Sunrise Dam and Morila, remained injury free. At the South African operations,
the third quarter saw the lowest ever number of recorded dressing cases, with
the LTIFR improving by 14.5% to 10.74 per million hours worked. Year to date,
the group LTIFR was 7.44, 10% lower than that recorded for the same nine month
period in 2007.
For the quarter, gold production was 1% higher at 1.265Moz, reflecting improved
production primarily from Argentina and Ghana. Total cash costs for the group
increased as anticipated, from $434/oz to $486/oz, driven mainly by the annual
wage increases in South Africa and Brazil, higher power tariffs in South Africa
and Ghana, input cost inflation, inventory movements, which were partially
offset by the higher gold production, favourable by- product contribution and
depreciating local currencies. This was the third consecutive quarter that the
company delivered on its production and cost guidance.
The South African operations were steady, with gold production marginally lower
at 16,733kg, despite an increase in safety stoppages and nationwide strike
action. The quarter saw Great Noligwa transfer its high grade upper level, SV4
section to Moab Khotsong, as it undertakes a restructuring programme to
right-size and align its cost structure to a reduced mine plan. The transfer
enables the Moab Khotsong mine to better exploit operating synergies with the
SV4 section.
As a result of the transfer, Great Noligwa saw production decline 34%, while
Moab Khotsong increased 141%, in line with its ramp-up profile. In the West
Wits region, Mponeng had another strong quarter with gold production 3% higher,
while Tau Lekoa posted a 9% increase in gold production, despite losing three
shifts to safety stoppages and nationwide strike action.
Both Kopanang and TauTona saw gold production reduce by 12%, following safety
stoppages and nationwide strike action. Total cash costs for the South African
operations increased 17% to R102,682/kg ($411/oz), following marginally lower
gold production, annual wage increases, winter power tariffs and inflationary
impact on consumables.
Uranium production increased 7% during the third quarter to 346,000 pounds,
with 294,000 pounds delivered into contracts, and 679,000 pounds of uranium on
hand at the end of the quarter. Total uranium production for the year-to-date
was 930,000 pounds, 3% higher than for the same period in 2007, notwithstanding
the power-related production stoppages earlier in the year. As production
progresses into the fourth quarter, an estimated 350,000 pounds of uranium
inventory at year-end will be available for sale in the spot market.
In Argentina at Cerro Vanguardia, after two quarters of lower gold production,
production increased 59% following higher feed grades and remedial action taken
to rectify plant constraints.
In Brazil, gold production remained steady, with AngloGold Ashanti Brasil
Mineracao increasing 1% as a result of higher feed grades, while Serra Grande`s
production decreased 9%. Total cash costs for the Brazil operations were 4%
higher at $355/oz, due to annual wage increases and the inflationary impact on
consumables.
At Geita and Tanzania, production remained steady at 74,000oz, with yield 5%
lower, while tonnage throughput was 5% higher. Production was below
expectations for the quarter following lower than expected recovered grades,
reduced mining in the base of Cut 4 in the Nyankanga pit and an unplanned mill
shutdown due to a crack in the SAG mill shell. As of mid-October repair work
had been completed, with tonnage throughput expected to return to normal levels
in November 2008.
In Ghana, Obuasi had a solid quarter, with gold production increasing 16% to
92,000oz, following improved delivered grades and higher throughput resulting
from increased plant availability. Total cash costs however rose by 11% to
$677/oz, due to power tariff increases, higher fuel prices and contractor
costs. Progress continues on identifying the steps necessary to affect the
targeted performance turnaround for the operation.
This quarter once again saw the company take advantage of lower spot gold
prices, with an additional 263,000oz delivered or settled into hedge contracts
taking total reduction to 580,000oz. This brings the total hedge commitments
down from 6.88Moz at the end of June 2008 to 6.30Moz at the end of September
2008, ahead of schedule of the year- end target of reducing hedge commitments
to approximately 6.0Moz. Total hedge commitments have now reduced by 4.98Moz
since the beginning of year, and the hedge delta has reduced from 6.54Moz at
the end of June 2008 to 5.79Moz at the end of September 2008. The accelerated
delivery will provide an improving exposure to spot prices in the fourth
quarter, with the company on track to complete its substantial hedge
restructuring by year-end.
During the quarter the company received a price of $644/oz, 10% lower than the
second quarter and 26% lower than the average spot price. As a result of the
lower received price, higher operating costs and the accelerated hedge delivery
of 263,000oz, an adjusted headline loss of $119m was recorded. Excluding the
hedge buy backs, the adjusted headline was breakeven, primarily due to the
write down on the Geita stockpile and higher cash costs.
Greenfields exploration saw a total of 72,349m drilled during the quarter, as
the company capitalised on the first mover advantage in Australia and Colombia.
The early stage exploration work suggests significant potential for the
discovery of new gold and copper-gold deposits, in these emerging, potentially
world- class terrains. During the quarter, significant and very encouraging
drill results were returned from both regional and prospect-scale programmes,
with the most noteworthy being the Black Dragon prospect, near the Tropicana JV
project area in Australia. Good progress is also being made on joint venture
projects with partners in Australia and Colombia.
For the fourth quarter of 2008, production, based on a 96.5% stabilised power
in South Africa, was estimated to be 1.25Moz while total cash costs are
expected to reduce to around $460/oz, after adjusting for the winter power
tariffs and inventory adjustments, based on the following exchange rates:
R8.40/$, A$/$0.80, BRL1.90/$ and Argentinean peso 3.11/$. Earnings for the
fourth quarter are expected to be significantly distorted by, amongst other
things, annual accounting adjustments such as rehabilitation, inventory,
current and deferred tax provisions.
As at 30 September 2008, the company had unrestricted cash and cash equivalents
of $555m and $294m of borrowing headroom available under its revolving credit
facility. As a portion of the borrowings are in Australian dollars, this
headroom should increase by approximately $140m due to the prevailing weaker
A$/$ exchange rate. AngloGold Ashanti`s budgeted spend on the Boddington
project for the remainder of the year is approximately A$150m. In addition, the
company had budgeted capital expenditures through the remainder of the year of
some $200m to $255m and are currently reviewing these additional capital
expenditures.
It was the company`s intention to refinance the $1.0bn convertible bond with
the proceeds of a new equity linked instrument. However, global capital market
conditions have been, and continue to be, disrupted and volatile and in recent
weeks the volatility and lack of liquidity in global capital markets have
reached unprecedented levels.
In light of these recent market conditions, the company is actively exploring a
broader range of refinancing options, including bridge financing, further debt
financing and additional asset sales, as well as reviewing discretionary
capital expenditures.
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
Global financial markets have, since quarter end, experienced unprecedented
volatility and a flight to cash by investors across the board. The nature of
the crisis and the extent of the associated deleveraging have meant that, while
there has been some incremental buying of gold as a `safe haven` asset, there
has also been significant selling down, particularly on the Comex and other
exchanges. Since quarter end, gold has fallen some 16% to $729.60/oz.
Exchange Traded Funds (ETFs) have been less affected despite some selling, most
notably in the period from 17 to 23 October, when the US-traded SPDR ETF saw
9.8t of redemptions, of which 8.58t took place within a 24-hour period on 22/23
October. These redemptions however represented only just over 1% of the total
volume of gold held in the fund, which stood at a record 770.64t on 13 October.
The events post quarter followed an already volatile three months for gold
prices, which saw a trading range of over $250/oz, as the mood of the global
financial markets swung from concerns about inflation to warnings of deflation
and recession. During the quarter the gold price traded from a high of $988/oz
to a low of $736/oz.
While gold traded to a high of $988/oz by mid-July on fears of surging
inflation and predictions that the oil price could reach $200/barrel,
subsequent fears of a slowdown in global growth, particularly in the European
Community, coupled with a slowing of growth in China, led to a sharp sell-off
in the base metals complex. This also led to a strengthening of the US dollar
as many of the commodity index trades were unwound. This reversal in the
fortunes of the US dollar weighed significantly on the gold price, which then
traded to an 11 month low of $736/oz.
This new-found strength and confidence in the US dollar was, however, short
lived as sub-prime mortgage fears re-emerged. The news in early September that
two government-sponsored enterprises, Fannie Mae and Freddie Mac, were
technically insolvent, the issuing by the US Treasury of financial guarantees
to those institutions and the prolonged period of uncertainty which followed
these events, caused investors to unwind positions in all markets and return to
cash. The gold market was not immune to this and there was a significant
liquidation of positions from ETF holdings.
Despite the eventual approval by the US legislature of the Troubled Assets
Relief Programme, the uncertainty and lack of confidence within financial
markets remains and problems in financial markets are proving to be global.
This has raised real fears that the global economy will slide into deflation
and ultimately recession.
The average spot price for the quarter was $869/oz, some 3% lower than the
previous quarter`s average. In Rand terms, the average gold price was
R216,674/kg, as compared with the previous quarter`s average of R224,023/kg.
Investment Market
ETF holdings continued to grow during July, peaking at 33Moz. However, the
strengthening of the US dollar eventually forced the withdrawal of some of
these investors and 3Moz of investments were redeemed through to August 2008.
Post quarter end, this liquidation had all been recovered and holdings of gold
ETF`s had reached an all time high of 35Moz.
Though still in their infancy, the newly-launched ETF funds in India performed
well and continued to attract investment from retail investors.
Producer Hedging
During the quarter under review there was no new producer hedging. Similarly
there were no reports of any significant producer de-hedging through
accelerated buybacks.
AngloGold Ashanti did continue its programme of de-hedging by accelerating the
delivery into 263,000oz of hedge contracts from periods beyond the current
quarter.
Physical Demand
In the volatile market situation of the third quarter, the focus in the gold
market was primarily on the investment sector. This was reflected in the
physical market, where coin sales in particular showed strong growth during the
period and jewellery demand presented a more mixed picture.
Jewellery Sector
The period of relatively stable and low prices during the first two months of
the quarter brought some recovery in demand in the largest gold jewellery
market, India, particularly when viewed against the backdrop of poor
consumption in the first half of the year. The recovery in demand experienced
during this period would have been stronger, had it not been for the
depreciation of the rupee against the US dollar, which negated some of the
impact of the gold price correction.
Overall during the quarter the Indian market is likely to show a year-on-year
increase of approximately 22-24% over the same quarter in 2007.
The increasing volatility in the price evident from the last week of August
2008 onwards, with daily price fluctuations of between $15/oz and $20/oz,
fostered a more cautious approach to the metal by Indian consumers and a
slowing of consumption.
Post quarter, increased turmoil in global financial markets is having a mixed
impact on the market. Indian buying during the main festive season, which has
already stretched from Ganesh in early September, through to Navratri in early
October and traditionally extends to Diwali in late October, may dampened as
growth in India slows, due to the tightening of money supply in response to
higher inflation and global economic turmoil. Consumer confidence has also been
eroded by global economic conditions, weaker stock markets and the frequency of
terrorist attacks, including in the major cities of Bangalore, Mumbai and New
Delhi.
Demand in the other major emerging markets of China and the Middle East was
remarkably stable.
In China, the investment sector showed significant increases in demand, while
the jewellery sector was relatively static. The Olympic Games generally had a
negative impact on retail spending, as Chinese consumers tended to stay at home
during the Games.
The fundamentals for investment in gold, which in China also takes the form of
jewellery, are however good, with stock markets experiencing significant
difficulties and property starting to show signs of peaking. Bank savings
registered a sharp increase, for the first time in recent years, and gold was
likely to benefit from a mood favouring safe haven investments.
Demand in the Middle East was healthy although the main Eid at the end of
Ramadan coincided with a period of more volatile prices. Local demand started
to return to the market in Turkey, while tourist and export demand from both
Turkey and the Gulf States remained low. Gold imports to the Turkish market
increased overall by some 35% during the quarter.
In the US market, now the third largest globally after India and China, gold
consumption experienced a decline in retail channels during the quarter, as
disposable incomes were eroded by fuel price increases and increasingly
difficult economic circumstances. With the events which unfolded post quarter
end, retailers have become even more cautious in restocking for the festive
period, traditionally the highest period of demand in the US market, and a
double digit decline in consumption for the period is anticipated unless there
is a significant shift in fundamentals.
Official Sector Sales
The end of September brought to an end the fourth year of the second Central
Bank Gold Agreement (CBGA). Sales for the period fell far short of the quota
allocated, at a total of 343t against a 500t quota. These sales took place in a
manner that was neutral to the market.
The current CBGA is now entering its fifth and final year. At this time it
seems likely that the CBGA will be renewed, and that any gold sales by the IMF
will also take place within the framework of the Agreement. The process of
finalising IMF gold sales is however a lengthy one and it seems unlikely that
actual sales will occur before early 2010.
Currencies
The Rand averaged R7.77/$ for the quarter, marginally weaker as compared with
the average of the previous quarter. Despite some unprecedented political
events domestically, the Rand maintained its value against the US dollar during
the quarter and managed a modest appreciation (4%) against the Euro.
Subsequent to the quarter end, the Rand has sold off, as have many of the
emerging market currencies, as further evidence of de-leveraging by investors.
Devaluation against the US Dollar has been significant, with the rand loosing
some 30% against the dollar since quarter end, closing at levels of around
R11/$ towards the end of October.
The Australian dollar averaged A$/$0.89 for the quarter, however post the
quarter end, the Australian dollar has experienced a severe sell off,
depreciating some 34% from its highs of A$/$0.9849 earlier in the year, to its
current levels of A$/$0.65.
Similarly, the Brazilian Real has suffered an exodus of investment, falling to
a low of BRL2.37/$, a level last seen in the second quarter of 2006.
Hedge position
As at 30 September 2008, the net delta hedge position was 5.79Moz or 180t (at
30 June 2008: 6.54Moz or 204t), representing a further reduction of 0.75Moz for
the quarter. The total commitments of the hedge book as at 30 September 2008
was 6.30Moz or 196t, a reduction of 0.58Moz from the position as at 30 June
2008.
The marked-to-market value of all hedge transactions making up the hedge
positions was a negative $2.97bn (negative R24.56bn), decreasing by $0.56bn
(R3.1bn) over the quarter. This value was based on a gold price of $876.30/oz,
exchange rates of R8.27/$ and A$/$0.64 and the prevailing market interest rates
and volatilities at that date.
The company`s received price for the third quarter was $644/oz, 26% below the
average spot price for the same period. This was due to the continued
acceleration of deliveries into contracts scheduled to mature in the fourth
quarter and later. An additional 263,000oz was closed out in the third quarter
in line with the stated objective of positioning the company to have greater
exposure to the spot price.
As at 29 October 2008, the marked-to-market value of the hedge book was a
negative $2.21bn (negative R22.85bn), based on a gold price of $744.60/oz and
exchange rates of R10.32/$ and A$/$0.64 and the prevailing market interest
rates and volatilities at the time.
These marked-to-market valuations are in no way predictive of the future value
of the hedge position, nor of future impact on the revenue of the company. The
valuation represents the theoretical cost of buying all hedge contracts at the
time of valuation, at market prices and rates available at that time. The
following table indicates the group`s commodity hedge position at 30 September
2008.
Year 2008 2009
DOLLAR GOLD
Forward contracts Amount (kg) 1,472 3,904
US$/oz **$138 **$460
Put options sold Amount (kg) 933
US$/oz $660
Call options purchased Amount (kg) 2,142
US$/oz $428
Call options sold Amount (kg) 1,804 11,695
US$/oz $347 $357
RAND GOLD
Forward contracts Amount (kg) 466 *1,866
Rand per kg R129,053 R157,213
A DOLLAR GOLD
Forward contracts Amount (kg) 900 1,835
A$ per oz A$602 A$571
Call options purchased Amount (kg) 1,555 1,244
A$ per oz A$682 A$694
Delta (kg) (951) (14,315)
*** Total net gold:
Delta (oz) (30,580) (460,230)
Year 2010 2011
DOLLAR GOLD
Forward contracts Amount (kg) 12,580 12,931
US$/oz $327 $397
Put options sold Amount (kg) 1,882
US$/oz $420
Call options purchased Amount (kg)
US$/oz
Call options sold Amount (kg) 29,168 37,146
US$/oz $498 $521
RAND GOLD
Forward contracts Amount (kg)
Rand per kg
A DOLLAR GOLD
Forward contracts Amount (kg) 3,110
A$ per oz A$681
Call options purchased Amount (kg) 3,111
A$ per oz A$712
Delta (kg) (39,587) (46,122)
*** Total net gold:
Delta (oz) (1,272,760) (1,482,850)
Year 2012 2013-2016 Total
DOLLAR GOLD
Forward contracts Amount (kg) 11,944 12,363 55,194
US$/oz $404 $432 $315
Put options sold Amount (kg) 1,882 3,763 8,460
US$/oz $430 $445 $460
Call options purchased Amount (kg) 2,142
US$/oz $428
Call options sold Amount (kg) 24,460 39,924 144,197
US$/oz $622 $604 $541
RAND GOLD
Forward
contracts Amount (kg) *1,400
Rand per kg R151,590
A DOLLAR GOLD
Forward contracts Amount (kg) 5,845
A$ per oz A$634
Call options purchased Amount (kg) 5,910
A$ per oz A$701
Delta (kg) (32,476) (46,552) (180,003)
*** Total net gold:
Delta (oz) (1,044,140) (1,496,680) (5,787,240)
* 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.
** Indicates a short USD position resulting from net short forward purchase
contracts.
*** 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
September 2008.
Rounding of figures may result in computational discrepancies.
Year 2008 2009 2010
DOLLAR SILVER
Put options purchased Amount (kg) 10,886
$ per oz $7.66
Put options sold Amount (kg) 10,886
$ per oz $6.19
Call options sold Amount (kg) 10,886
$ per oz $8.64
Year 2011 2012 2013-2016 Total
DOLLAR SILVER
Put options purchased Amount (kg) 10,886
$ per oz $7.66
Put options sold Amount (kg) 10,886
$ per oz $6.19
Call options sold Amount (kg) 10,886
$ per oz $8.64
The following table indicates the group`s currency hedge position at 30
September 2008
Year 2008 2009 2010
RAND DOLLAR (000)
Put options purchased Amount ($) 30,000
US$/R R7.63
Put options sold Amount ($) 30,000
US$/R R7.09
Call options sold Amount ($) 30,000
US$/R R8.32
A DOLLAR (000)
Forward contracts Amount ($) 50,000
A$/US$ $0.86
Put options purchased Amount ($) 50,000
A$/US$ $0.91
Put options sold Amount ($) 50,000
A$/US$ $0.94
Call options sold Amount ($) 50,000
A$/US$ $0.88
BRAZILIAN REAL (000)
Forward contracts Amount ($) 17,390 58,670
US$/BRL BRL 1.81 BRL 1.87
Put options purchased Amount ($) 12,000 500
US$/BRL BRL 1.77 BRL 1.76
Call options sold Amount ($) 39,000 1,000
US$/BRL BRL 1.80 BRL 1.76
Year 2011 2012 2013-2016 Total
RAND DOLLAR (000)
Put options purchased Amount ($) 30,000
US$/R R7.63
Put options sold Amount ($) 30,000
US$/R R7.09
Call options sold Amount ($) 30,000
US$/R R8.32
A DOLLAR (000)
Forward contracts Amount ($) 50,000
A$/US$ $0.86
Put options purchased Amount ($) 50,000
A$/US$ $0.91
Put options sold Amount ($) 50,000
A$/US$ $0.94
Call options sold Amount ($) 50,000
A$/US$ $0.88
BRAZILIAN REAL (000)
Forward contracts Amount ($) 79,730
US$/BRL BRL 1.85
Put options purchased Amount ($) 12,500
US$/BRL BRL 1.77
Call options sold Amount ($) 40,000
US$/BRL BRL 1.80
Derivative analysis by accounting designation as at 30 September 2008
Normal sale Cash flow Non-hedge
exempted hedge accounted Total
accounted
US Dollars (millions)
Commodity option contracts (587) - (1,314) (1,901)
Foreign exchange option contracts - - (10) (10)
Forward sale commodity contracts (888) (198) 3 (1,083)
Forward foreign exchange contracts - (2) (8) (10)
Interest rate swaps (27) - 22 (5)
Total derivatives (1,502) (200) (1,307) (3,009)
Rounding of figures may result in computational discrepancies.
Exploration
Total exploration expenditure inclusive of
expenditure at equity accounted associates during
the third quarter of 2008 amounted to $47m ($25m
brownfields, $22m greenfields), compared to $52m
($27m brownfields, $25m greenfields) in the
previous quarter.
BROWNFIELDS EXPLORATION
In South Africa, surface drilling continued in the Project Zaaiplaats area,
with borehole MZA9 and MMB5 reaching depths of 2,941m and 2,915m respectively.
Surface drilling in the Moab North area continued with the long deflection of
borehole MCY4 reaching a depth of 2,626m, and it is anticipated to intersect C
Reef during the next quarter. Borehole MCY5 advanced to a depth of 3,129m but
failed to intersect Vaal Reef and this has lead to a revision of the structural
interpretation. The hole was stopped and the rig has been moved to drill
borehole MGR8 in the Zaaiplaats area. MGR8 has now advanced 349m.
At Iduapriem in Ghana, Mineral Resource conversion drilling at Ajopa continued,
with 93 Reverse Circulation (RC) (8,937m) holes being drilled. The programme,
including 2,775m Diamond Drilling (DDH), will be completed during the next
quarter. At Obuasi, exploration continued with 4,415m of DDH drilling below 50
level and 1,758m of DDH Drilling above 50 Level.
In Argentina at Cerro Vanguardia, the exploration programme continued with
3,243m of DDH drilling and 24,079m of RC drilling, almost completing the
planned 2008 definition drilling programme. A further 3,057m of DDH drilling
was completed on accessing the underground mining potential. The interpretation
of the hyperspectral survey was received and is being evaluated and
environmental studies over the 10 new claims (El Volcan) were presented to the
provincial authorities.
In Australia, at Boddington there were four rigs employed on the BGM Mineral
Resource conversion and near mine exploration DDH programme. During the
quarter, approximately 29,326m of DDH were drilled in 41 holes, bringing the
total metres drilled to 85,131m from 114 holes.
At Sunrise Dam, exploration successfully extended and increased the underground
Mineral Resources, while continuing to investigate the deep-seated
mineralisation to 1km vertically below the mine workings. This quarter, 9,310m
of DDH was drilled from 37 holes, and a significant mineralised shoot has been
defined within the Dolly lodes, which was open at depth. Immediate
opportunities have also been identified for open pit satellites within 10km of
the mine. These opportunities, together with the underground targets, would
remain the focus of the ongoing exploration programme.
In Brazil, at the Corrego do Sitio Sulphide Project, drilling continued with
9,830m being drilled from surface, 2,756m drilled from underground, together
with 953m of underground development. At the Lamego project, 5,770m of surface
drilling, 5,850m underground drilling and 1,031m of underground development was
completed.
At Siguiri in Guinea, exploration continued to focus on conversion drilling at
Sintroko South (situated 8km south of the mine) and was completed toward the
end of the quarter. Preliminary evaluation of the new data indicates a
significant increase in the Mineral Resource, compared to the previous model.
Mining is planned to commence in early 2009. Further in-fill drilling was
completed on the margins of the Seguelen (Kintinian) planned pit, and work
commenced in the Combined Pits project, in the area of Tubani-Bidini.
Delineation drilling in the Saraya project (Block 2, approximately 55km west of
the current mine) was temporarily suspended because of poor access during the
rainy season. Results from the drilling to date indicate extensions to the
known mineralisation.
Also in Guinea, reconnaissance drilling of the Manguity soil anomaly, situated
35 km west of the current Siguiri operation, yielded wide low grade
intersections. A number of geochemical soil sampling programmes are in
progress. Infill sampling over the Manguity anomaly in Block 2, and extension
sampling to the south of Saraya in Block 2 were completed, with encouraging
results from both areas. New programmes were initiated in the Naboun block of
licenses (28km north of the mine), and in the Corridor Block (14km northwest of
the mine). Sampling continued in Block 1 to the north of current mining
operations. Encouraging results have been obtained from the sampling northwest,
north and northeast of the Kintinian- Setiguia villages. All these new
opportunities will be drill tested using aircore drilling.
At Geita in Tanzania, exploration activities concentrated in two areas, namely
Area 3 (5,535m RC and 612m DDH) and Star and Comet (4,574m RC), where drilling
indicated a northern extention to the ore zones. Drilling commenced at Mabe
(660m RC) and 10 deep DDH holes were drilled to examine potential depth
extensions of Lone Cone, Geita Hill and Nyankanga.
Aircore (AC) drilling (2,980m) commenced at Matandani NW to test for oxide
potential. Reconnaissance RC drilling commenced at Nyamalembo with three holes
being drilled. An airborne TEM survey was completed in July and a high
resolution magnetic survey commenced in September.
At Morila in Mali, important and useful advances were made in understanding the
relationship between selected structures, such as shears, considered to be
important controls on gold mineralisation. Field work during the quarter was
limited to selected core logging and pit mapping.
At Sadiola, the Mineral Resource definition drilling was completed at Sekokoto
Main, where an infill RC drill programme of 6,515m was drilled, and results are
awaited. The Phase 10 diamond core drill programme for metallurgical testing of
the deep sulphide orebody commenced with two rigs currently drilling.
Results from the DDH programme completed last quarter around the FE4 pit are
still expected. However, a revision to the geological and the Mineral Resource
model is in progress.
The geological logging of the fence line drilled between FE3 pit and FE4 are in
progress. A total of 11 diamond holes were completed, logged, sampled and
assays received.
At Yatela, a total of 4,728m and 1,107m were drilled from 64 DDH and 16 RC
holes at the Alamoutala and the North-western pits, respectively.
At Navachab in Namibia, RC drilling at Gecko was completed with a total of
10,818m being drilled. At Steenbok-Starling, 2,460m of follow up RC were
drilled; additional drilling would be completed once all the assay results had
been received. The extension of the soil grid towards Ostrich and Giraffe
returned disappointing results and no gold anomalies were identified. At
Anomaly 16, 12,536m of exploration infill and advanced grade control holes had
been completed.
A total of 4,704m of DDH drilling was undertaken as part of the infill
programme on the Hanging and Footwall sheeted vein systems. RC drilling of
5,260m was done to the immediate north of the North Pit 2, where a northerly
vein plunge extension was confirmed and encouraging intersections were
achieved. Some of this drilling was also targeted at closing information gaps
in the Eastern Push Back.
At Cripple Creek & Victor in the United States, a total of 333 holes and
69,498m had been completed so far during 2008. Drilling continued in the Main
Cresson area, Schist Island, Squaw Gulch and near the old Victor Pads. In the
high grade study a test mining case was successfully completed in the Cresson
Mine. No holes were drilled for the High Grade Study as assays are pending for
recent drilling. Assay results continue to be encouraging.
GREENFIELDS EXPLORATION
Greenfields exploration activities continued in six countries (Australia,
Colombia, China, the Philippines, Russia and the DRC). During the third quarter
of 2008, a total of 72,349m of DDH RC) and AC drilling was completed at
existing priority targets and delineating new targets in Australia, the DRC,
Russia and Colombia.
In Australia on the Tropicana Joint Venture (JV) (AngloGold Ashanti 70%,
Independence Group 30%) prefeasibility studies were continuing with completion
expected in the second quarter of 2009. Work to date has focussed on a range of
project dimensions from 3.5m to 6.5m tonnes per annum.
The flowsheet options were well defined and infrastructure options evaluated. A
study programme was now being undertaken to optimise the dimensions and
economics of the project. Water exploration activities have identified the
project water supply, located approximately 50km north northwest of the plant
site. The main areas of ongoing assessment include the evaluation of power
options for the project (including solar thermal power), and an update of the
resource estimate, which is anticipated in the next quarter.
In parallel with the optimisation studies, exploration in the Tropicana JV
moved away from drilling of the Tropicana/Havana deposit with regional
exploration programmes now being accelerated. The work was focussed on high
priority targets within trucking distance from the Tropicana/Havana project
area.
The most significant results for the quarter come from the Black Dragon
prospect (30 km north-east of Tropicana/Havana), where further prospecting and
mapping was completed in conjunction with wide-spaced AC drilling under areas
of cover. Analysis of rock chip sampling returned spectacular results with
results of up to 573g/t gold, and 87g/t of silver. These results are supported
by significant AC results including 4m at 0.78g/t Au from surface and 4m at
0.3g/t Au from 20m. Black Dragon is a high priority target for RC drilling in
the next quarter. Diamond drill hole BCD001 from Beachcomber, returned 0.5m at
66.52g/t Au from 89.3m, 0.7m at 10.46g/t Au from 97.8m and 0.85m at 6.12g/t Au
from 156.7m.
RC drilling had returned significant results from Rusty Nail with 3m at 8.83g/t
Au while significant rock chip sampling results have been returned from Voodoo
Child (45 km north-east of Tropicana/Havana).
During the quarter a total of 742 AC holes were drilled for 40,132m (1,446
holes and 75,571m YTD), 41 RC holes for 5,760m and 9 diamond drill holes for
1,474m (12 holes and 1,892m YTD).
A regional aeromagnetic survey was completed during the quarter, with
high-resolution survey data now available over approximately 55% of the granted
tenement package. This new geophysical data, and the acceleration in the rate
of auger sampling over the project, would enable more rapid prospect generation
across the JV holdings.
The Bronco Plains JV (AngloGold Ashanti earning 50.4%), also in the Tropicana
Belt, was a farm-in and joint venture with Independence Group NL and Image
Resources NL on Image`s 230kmSquared Bronco Plains project, adjacent to the
western
margin of the AngloGold Ashanti/ Independence Group Tropicana project. AC
drilling, of the approximately 10km long gold-in-soil anomaly peaking at 86 ppb
gold would commence once regulatory approvals have been received.
The approximate 5,000kmSquared Viking Project (AngloGold Ashanti 100%) is
located
southwest of the Tropicana Prospect within the same Albany- Fraser Foreland
tectonic setting that hosts the 4Moz Tropicana/Havana gold deposit. Results by
AngloGold Ashanti at Beachcomber and publicly reported by other explorers, adds
credence to this belt being a strike-extensive new gold province.
Two new tenement applications for approximately 900kmSquared were made in the
third
quarter, and permits to enable exploration to commence in the fourth quarter
had been granted.
In Colombia exploration, undertaken by Anglogold Ashanti and joint venture
partners B2Gold Corp., Mineros S.A. and Glencore International, continued
during the third quarter with activity on 33 projects and prospects with an
average of 716 staff and contractors per day active in the field. Anglogold
Ashanti activities focused on systematic reconnaissance and drill target
definition work on targets in 6 departments in Colombia. Airborne geophysical
surveys were completed over 3,107km 2 during the quarter. AngloGold Ashanti
exploration work at La Colosa remained suspended throughout the third quarter,
due to unforeseen delays in the environmental approvals being granted, it was
now anticipated that approvals would be received in the first quarter of 2009,
at which time, pre-feasibility work would commence.
Joint Venture partner B2Gold Corp. continued resource delineation drilling at
Gramalote, first phase drilling at Quebradona and continued reconnaissance and
drill target definition work in three departments in Colombia. Mineros S.A.
were drilling at one target in Antioquia and conducted reconnaissance and drill
target definition work at two other targets within the Segovia joint venture in
the Antioquia department.
Glencore continued drilling base metal targets and conducted reconnaissance
work in three departments of Colombia.
DDH completed during the third quarter of 2008 on AngloGold Ashanti and
partner`s projects were 20,348m, bringing the total DDH on all Colombian
projects to 51,547m at the end of the third quarter.
In China, work on the Jinchanggou Project in Gansu Province focussed on
follow-up of the robust gold in soil anomalies defined in the eastern
(Dashuigou) and western (Hongchungou) tenements. A 5,000m DDH programme using
man portable drill rigs would commence in the fourth quarter of 2008. Project
generation activities and evaluation of opportunities are ongoing in Western
and North Eastern China.
In the Philippines, final documentation is under review for the Mapawa tenement
application area.
In Russia, where AngloGold Ashanti operates in a joint venture alliance with
Russian miner, Polymetal, exploration continued on three license areas (939km2)
during the quarter. A total of 7,986m of DDH has been completed for the year to
date, of which the majority has been completed on the Veduga advanced
exploration project, while a field staff of 93 were engaged in field activities
on the three active projects.
The Bogunay project (42km2) was sold, while negotiations were ongoing for the
sale of (11.8km2) and Aprelkovskoye Anenskoye (161km2). The generation of new
project areas through data analysis remains a core task of the joint venture
team.
In Africa, work during the third quarter concentrated on project generation and
specific project reviews in West, Central and East Africa.
In the Democratic Republic of the Congo, exploration activities continued, with
a total of 2,532m of DDH completed around the Issuru and Mongbwalu resource
areas. The best intersections were 3.42m at 33.46g/t from 88.42m from diamond
drill hole RA273D and 4.69m at 10.59g/t from 158m, and 2.92m at 6.69g/t from
169.3m from DD266. During the third quarter regional exploration programmes
were underway at Lodjo, Camp3, Petsi, Mont Tsi and Bunia West prospects.
Geologic activities included soil sampling, regolith and geologic mapping,
trenching and bench sampling at the historic Mont Tsi open pit. Encouraging
results were obtained from trench samples at Lodjo, which include 9m at 3.08g/t
including 2m at 10g/t from trench TR11LO.
The airborne magnetic, radiometric (37,608km line) and EM (3,225km line)
surveys which commenced in June 2008 were completed during the third quarter.
To date a total of 5,550km2 of aeromagnetic and 1,224km2 of EM surveys had been
completed at a total cost of $1.85m enabling fast-tracking of the regional
exploration programmes.
Group income statement
Quarter Quarter
ended ended
September June
2008 2008
Restated
SA Rand million Notes Unaudited Unaudited
Revenue 2 7,205 7,950
Gold income 6,851 7,749
Cost of sales 3 (6,148) (4,894)
Gain (loss) on non-hedge derivatives and
other commodity contracts 4 148 (1,425)
Gross profit (loss) 851 1,431
Corporate administration and other
expenses (255) (255)
Market development costs (25) (24)
Exploration costs (205) (266)
Other operating expenses 5 (73) (48)
Operating special items 6 121 273
Operating profit (loss) 415 1,111
Dividend received from other investments - -
Interest received 248 101
Exchange gain (loss) 51 (17)
Fair value adjustment on option component
of convertible bond - 12
Finance costs and unwinding of obligations (235) (213)
Share of associates` and equity accounted
joint ventures (loss) profit (98) (770)
Profit (loss) before taxation 381 225
Taxation 7 (577) (471)
Loss after taxation from continuing
operations (196) (246)
Discontinued operations
Profit (loss) for the period from
discontinued operations 8 6 191
Loss for the period (190) (55)
Allocated as follows:
Equity shareholders (247) (176)
Minority interest 57 121
(190) (55)
Basic loss per ordinary share (cents) 1
Loss from continuing operations (73) (130)
Profit (loss) from discontinued operations 2 68
Loss (71) (62)
Diluted loss per ordinary share (cents) 2
Loss from continuing operations 3 (73) (130)
Profit (loss) from discontinued
operations 3 2 68
Loss 3 (71) (62)
Dividends 4
- Rm
- cents per Ordinary share
- cents per E Ordinary share
Quarter Nine months Nine months
ended ended ended
September September September
2007 2008 2007
Restated Restated
SA Rand million Unaudited Unaudited Unaudited
Revenue 6,133 22,019 16,405
Gold income 5,913 21,258 15,853
Cost of sales (4,558) (15,630) (12,298)
Gain (loss) on non-hedge
derivatives and other commodity
contracts (2,421) (6,875) (2,243)
Gross profit (loss) (1,066) (1,248) 1,312
Corporate administration and
other expenses (254) (727) (683)
Market development costs (26) (73) (75)
Exploration costs (215) (739) (592)
Other operating expenses (65) (89) (156)
Operating special items 48 476 149
Operating profit (loss) (1,578) (2,400) (45)
Dividend received from other
investments 16 - 16
Interest received 87 429 216
Exchange gain (loss) (24) 25 (25)
Fair value adjustment on option
component of convertible bond (140) 183 218
Finance costs and unwinding of
obligations (214) (701) (618)
Share of associates` and equity
accounted joint ventures (loss)
profit 18 (796) 107
Profit (loss) before taxation (1,835) (3,261) (131)
Taxation (94) (900) (731)
Loss after taxation from
continuing operations (1,928) (4,161) (862)
Discontinued operations
Profit (loss) for the period from
discontinued operations (24) 194 (34)
Loss for the period (1,952) (3,968) (896)
Allocated as follows:
Equity shareholders (2,003) (4,236) (1,071)
Minority interest 51 268 175
(1,952) (3,968) (896)
Basic loss per ordinary share
(cents) 1
Loss from continuing operations (703) (1,457) (369)
Profit (loss) from discontinued
operations (9) 64 (12)
Loss (712) (1,393) (381)
Diluted loss per ordinary share
(cents) 2
Loss from continuing operations 3 (703) (1,457) (369)
Profit (loss) from discontinued
operations 3 (9) 64 (12)
Loss 3 (712) (1,393) (381)
Dividends 4
- Rm 324 919
- cents per Ordinary share 103 330
- cents per E Ordinary share 52 165
1 Calculated on the basic weighted average number of ordinary shares.
2 The impact of the diluted loss per share is anti-dilutive and therefore equal
to the basic loss 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
ended ended
September June
2008 2008
Restated
US Dollar million Notes Unaudited Unaudited
Revenue 2 930 1,023
Gold income 885 997
Cost of sales 3 (790) (632)
Gain (loss) on non-hedge derivatives and
other commodity contracts 4 92 (248)
Gross profit (loss) 186 117
Corporate administration and other
expenses (33) (33)
Market development costs (3) (3)
Exploration costs (26) (34)
Other operating expenses 5 (9) (6)
Operating special items 6 16 36
Operating profit (loss) 130 77
Dividend received from other investments - -
Interest received 32 13
Exchange gain (loss) 6 (3)
Fair value adjustment on option component
of convertible bond - 2
Finance costs and unwinding of obligations (30) (28)
Share of associates` and equity accounted
joint ventures (loss) profit (12) (97)
Profit (loss) before taxation 126 (35)
Taxation 7 (69) (61)
Profit (loss) after taxation from
continuing operations 57 (96)
Discontinued operations
Profit (loss) for the period from
discontinued operations 8 1 24
Profit (loss) for the period 58 (72)
Allocated as follows:
Equity shareholders 51 (87)
Minority interest 7 16
58 (72)
Basic earnings (loss) per ordinary
share (cents) 1
Profit (loss) from continuing operations 15 (40)
Profit (loss) from discontinued operations - 9
Profit (loss) 15 (31)
Diluted earnings (loss) per ordinary
share (cents) 2
Profit (loss) from continuing operations 3 15 (40)
Profit (loss) from discontinued
operations 3 - 9
Profit (loss) 3 15 (31)
Dividends 4
- $m
- cents per Ordinary share
- cents per E Ordinary share
Quarter Nine months Nine months
ended ended ended
September September September
2007 2008 2007
Restated Restated
US Dollar million Unaudited Unaudited Unaudited
Revenue 867 2,859 2,303
Gold income 836 2,761 2,226
Cost of sales (644) (2,029) (1,728)
Gain (loss) on non-hedge
derivatives and other commodity
contracts (377) (528) (351)
Gross profit (loss) (185) 204 147
Corporate administration and
other expenses (36) (94) (96)
Market development costs (4) (9) (11)
Exploration costs (31) (96) (84)
Other operating expenses (9) (11) (22)
Operating special items 7 62 21
Operating profit (loss) (258) 55 (44)
Dividend received from other
investments 2 - 2
Interest received 13 56 30
Exchange gain (loss) (3) 3 (3)
Fair value adjustment on option
component of convertible bond (20) 24 30
Finance costs and unwinding of
obligations (30) (91) (87)
Share of associates` and equity
accounted joint ventures (loss)
profit 2 (100) 15
Profit (loss) before taxation (294) (53) (56)
Taxation (11) (115) (100)
Profit (loss) after taxation from
continuing operations (306) (169) (156)
Discontinued operations
Profit (loss) for the period from
discontinued operations (3) 24 (5)
Profit (loss) for the period (309) (144) (161)
Allocated as follows:
Equity shareholders (316) (179) (186)
Minority interest 7 35 25
(309) (144) (161)
Basic earnings (loss) per
ordinary share (cents) 1
Profit (loss) from continuing
operations (111) (67) (64)
Profit (loss) from discontinued
operations (1) 8 (2)
Profit (loss) (112) (59) (66)
Diluted earnings (loss) per
ordinary share (cents) 2
Profit (loss) from continuing
operations 3 (111) (67) (64)
Profit (loss) from discontinued
operations 3 (1) 8 (2)
Profit (loss) 3 (112) (59) (66)
Dividends 4
- $m 41 125
- cents per Ordinary share 13 45
- cents per E Ordinary share 7 22
1 Calculated on the basic weighted average number of ordinary shares.
2 The impact of the diluted earnings (loss) per share is anti-dilutive and
therefore equal to the basic earnings (loss) 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
September June
2008 2008
Restated
SA Rand million Notes Unaudited Unaudited
ASSETS
Non-current assets
Tangible assets 55,085 53,040
Intangible assets 3,287 3,491
Investments in associates and equity
accounted joint ventures 2,846 2,447
Other investments 663 633
Inventories 2,389 2,445
Trade and other receivables 531 584
Deferred taxation 111 533
Other non-current assets 88 281
65,000 63,454
Current assets
Inventories 5,342 5,206
Trade and other receivables 2,076 1,847
Derivatives 3,851 4,810
Current portion of other non-current
assets 2 2
Cash restricted for use 499 547
Cash and cash equivalents 4,585 3,661
16,355 16,072
Non-current assets held for sale 10 10
16,365 16,082
TOTAL ASSETS 81,365 79,536
EQUITY AND LIABILITIES
Share capital and premium 11 36,525 22,495
Retained earnings and other reserves 12 (6,579) (5,931)
Shareholders` equity 29,946 16,563
Minority interests 13 655 637
Total equity 30,601 17,200
Non-current liabilities
Borrowings 6,865 7,361
Environmental rehabilitation and other
provisions 3,805 3,853
Provision for pension and post-retirement
benefits 1,257 1,247
Trade, other payables and deferred income 72 68
Derivatives 14 313 350
Deferred taxation 8,170 7,925
20,483 20,804
Current liabilities
Current portion of borrowings 8,581 10,093
Trade, other payables and deferred income 15 4,857 12,437
Derivatives 14 15,998 18,126
Taxation 846 876
30,282 41,532
Total liabilities 50,764 62,336
TOTAL EQUITY AND LIABILITIES 81,365 79,536
Net asset value - cents per share 8,628 6,101
As at As at
December September
2007 2007
Restated Restated
SA Rand million Unaudited Unaudited
ASSETS
Non-current assets
Tangible assets 45,095 44,149
Intangible assets 2,859 2,891
Investments in associates and equity accounted
joint ventures 2,183 2,088
Other investments 699 749
Inventories 1,807 1,894
Trade and other receivables 387 271
Deferred taxation 430 409
Other non-current assets 278 300
53,738 52,752
Current assets
Inventories 3,753 3,300
Trade and other receivables 1,384 1,451
Derivatives 3,516 4,078
Current portion of other non-current assets 2 5
Cash restricted for use 264 294
Cash and cash equivalents 3,246 3,287
12,165 12,414
Non-current assets held for sale 210 201
12,375 12,615
TOTAL ASSETS 66,113 65,367
EQUITY AND LIABILITIES
Share capital and premium 22,371 22,265
Retained earnings and other reserves (6,167) (2,791)
Shareholders` equity 16,204 19,473
Minority interests 429 401
Total equity 16,633 19,874
Non-current liabilities
Borrowings 10,416 7,362
Environmental rehabilitation and other provisions 3,176 2,875
Provision for pension and post-retirement benefits 1,208 1,207
Trade, other payables and deferred income 79 39
Derivatives 1,110 1,321
Deferred taxation 7,100 7,410
23,089 20,213
Current liabilities
Current portion of borrowings 2,173 4,160
Trade, other payables and deferred income 4,318 4,288
Derivatives 18,763 15,421
Taxation 1,137 1,410
26,391 25,279
Total liabilities 49,480 45,492
TOTAL EQUITY AND LIABILITIES 66,113 65,367
Net asset value - cents per share 5,907 7,073
Rounding of figures may result in computational discrepancies.
Group balance sheet
As at As at
September June
2008 2008
Restated
US Dollar million Notes Unaudited Unaudited
ASSETS
Non-current assets
Tangible assets 6,663 6,771
Intangible assets 398 446
Investments in associates and equity
accounted joint ventures 344 313
Other investments 80 81
Inventories 289 312
Trade and other receivables 64 75
Deferred taxation 13 68
Other non-current assets 11 36
7,863 8,101
Current assets
Inventories 646 665
Trade and other receivables 251 236
Derivatives 466 614
Current portion of other non-current
assets - -
Cash restricted for use 60 70
Cash and cash equivalents 555 467
1,978 2,051
Non-current assets held for sale 1 1
1,979 2,052
TOTAL ASSETS 9,842 10,153
EQUITY AND LIABILITIES
Share capital and premium 11 4,418 2,872
Retained earnings and other reserves 12 (796) (757)
Shareholders` equity 3,622 2,115
Minority interests 13 79 81
Total equity 3,702 2,196
Non-current liabilities
Borrowings 830 940
Environmental rehabilitation and other
provisions 460 492
Provision for pension and post-retirement
benefits 152 159
Trade, other payables and deferred income 9 9
Derivatives 14 38 45
Deferred taxation 988 1,012
2,478 2,656
Current liabilities
Current portion of borrowings 1,038 1,288
Trade, other payables and deferred income 15 587 1,588
Derivatives 14 1,935 2,314
Taxation 102 112
3,663 5,301
Total liabilities 6,140 7,957
TOTAL EQUITY AND LIABILITIES 9,842 10,153
Net asset value - cents per share 1,044 779
As at As at
December September
2007 2007
Restated Restated
US Dollar million Unaudited Unaudited
ASSETS
Non-current assets
Tangible assets 6,621 6,426
Intangible assets 420 421
Investments in associates and equity accounted
joint ventures 321 304
Other investments 103 109
Inventories 265 276
Trade and other receivables 57 39
Deferred taxation 63 60
Other non-current assets 41 44
7,891 7,679
Current assets
Inventories 551 480
Trade and other receivables 203 211
Derivatives 516 594
Current portion of other non-current assets - 1
Cash restricted for use 39 43
Cash and cash equivalents 477 478
1,786 1,806
Non-current assets held for sale 31 29
1,817 1,835
TOTAL ASSETS 9,708 9,514
EQUITY AND LIABILITIES
Share capital and premium 3,285 3,241
Retained earnings and other reserves (906) (406)
Shareholders` equity 2,379 2,835
Minority interests 63 58
Total equity 2,442 2,893
Non-current liabilities
Borrowings 1,529 1,071
Environmental rehabilitation and other provisions 467 418
Provision for pension and post-retirement benefits 177 176
Trade, other payables and deferred income 12 6
Derivatives 163 192
Deferred taxation 1,042 1,078
3,390 2,941
Current liabilities
Current portion of borrowings 319 606
Trade, other payables and deferred income 635 624
Derivatives 2,755 2,245
Taxation 167 205
3,876 3,680
Total liabilities 7,266 6,621
TOTAL EQUITY AND LIABILITIES 9,708 9,514
Net asset value - cents per share 867 1,030
Rounding of figures may result in computational discrepancies.
Group cash flow statement
Quarter Quarter Quarter
ended ended ended
September June September
2008 2008 2007
Restated Restated
SA Rand million Unaudited Unaudited Unaudited
Cash flows from operating activities
Receipts from customers 6,818 7,991 6,050
Payments to suppliers and employees (6,193) (7,352) (4,027)
Cash generated from operations 625 639 2,023
Cash generated (utilised) by
discontinued operations 9 (16) (6)
Cash utilised for hedge book
settlements (7,755) (749) -
Dividend received from associates 141 342 49
Taxation paid (129) (430) (78)
Net cash (outflow) inflow from
operating activities (7,108) (215) 1,988
Cash flows from investing activities
Capital expenditure (2,615) (2,348) (1,723)
Acquisition of assets - - -
Proceeds from disposal of tangible assets 279 21 65
Proceeds from disposal of assets of
discontinued operations 1 77 1
Other investments acquired (228) (78) -
Associate loans, acquisitions and
disposals (304) 396 -
Proceeds from disposal of investments 214 105 129
Dividend received from other investments - - 16
Decrease (increase) in cash
restricted for use 24 (119) (126)
Interest received 256 99 72
Net loans advanced (repaid) 1 1 1
Net cash outflow from investing
activities (2,372) (1,846) (1,564)
Cash flows from financing activities
Proceeds from issue of share capital 13,494 21 19
Share issue expenses (410) - -
Proceeds from borrowings 2,305 1,903 834
Repayment of borrowings (4,402) (33) (170)
Finance costs (242) (30) (230)
Advanced proceeds from rights offer (6) 6 -
Dividends paid (254) (49) (277)
Net cash inflow (outflow) from
financing activities 10,486 1,818 175
Net increase (decrease) in cash and
cash equivalents 1,005 (243) 600
Translation (81) 56 11
Cash and cash equivalents at
beginning of period 3,661 3,848 2,676
Net cash and cash equivalents at end
of period 4,585 3,661 3,287
Cash generated from operations
Profit (loss) before taxation 381 225 (1,835)
Adjusted for:
Movement on non-hedge derivatives and
other commodity contracts (821) (244) 2,776
Amortisation of tangible assets 1,111 1,102 1,040
Finance costs and unwinding of
obligations 235 213 214
Environmental, rehabilitation and
other expenditure 54 (27) 44
Operating special items (121) (273) (48)
Amortisation of intangible assets 4 4 3
Deferred stripping (124) 36 (154)
Fair value adjustment on option
components of convertible bond - (12) 140
Interest receivable (248) (101) (87)
Other non-cash movements 393 904 23
Movements in working capital (238) (1,189) (93)
625 639 2,023
Movements in working capital
Increase in inventories (310) (677) (234)
(Increase) decrease in trade and
other receivables (241) (126) 16
Increase (decrease) in trade and
other payables 312 (386) 125
(238) (1,189) (93)
Nine months Nine months
ended ended
September September
2008 2007
Restated
SA Rand million Unaudited Unaudited
Cash flows from operating activities
Receipts from customers 21,345 16,220
Payments to suppliers and employees (18,218) (10,932)
Cash generated from operations 3,127 5,288
Cash generated (utilised) by discontinued
operations (7) (24)
Cash utilised for hedge book settlements (8,504) -
Dividend received from associates 483 337
Taxation paid (902) (695)
Net cash (outflow) inflow from operating
activities (5,804) (4,904)
Cash flows from investing activities
Capital expenditure (6,881) (4,879)
Acquisition of assets - (286)
Proceeds from disposal of tangible assets 522 173
Proceeds from disposal of assets of
discontinued operations 79 9
Other investments acquired (572) (13)
Associate loans, acquisitions and disposals 123 1
Proceeds from disposal of investments 526 134
Dividend received from other investments - 16
Decrease (increase) in cash restricted for use (144) (214)
Interest received 440 176
Net loans advanced (repaid) (1) 2
Net cash outflow from investing activities (5,907) (4,881)
Cash flows from financing activities
Proceeds from issue of share capital 13,580 159
Share issue expenses (410) (4)
Proceeds from borrowings 5,412 1,712
Repayment of borrowings (4,589) (459)
Finance costs (522) (468)
Advanced proceeds from rights offer - -
Dividends paid (455) (1,033)
Net cash inflow (outflow) from financing activities 13,016 (93)
Net increase (decrease) in cash and cash
equivalents 1,306 (70)
Translation 33 60
Cash and cash equivalents at beginning of period 3,246 3,297
Net cash and cash equivalents at end of period 4,585 3,287
Cash generated from operations
Profit (loss) before taxation (3,261) (131)
Adjusted for:
Movement on non-hedge derivatives and other
commodity contracts 4,215 3,467
Amortisation of tangible assets 3,233 2,917
Finance costs and unwinding of obligations 701 618
Environmental, rehabilitation and other expenditure 113 14
Operating special items (476) (149)
Amortisation of intangible assets 11 10
Deferred stripping (278) (405)
Fair value adjustment on option components of
convertible bond (183) (218)
Interest receivable (429) (216)
Other non-cash movements 1,208 209
Movements in working capital (1,727) (828)
3,127 5,288
Movements in working capital
Increase in inventories (2,427) (980)
(Increase) decrease in trade and other
receivables (753) (263)
Increase (decrease) in trade and other payables 1,452 415
(1,727) (828)
Rounding of figures may result in computational discrepancies.
Group cash flow statement
Quarter Quarter Quarter
ended ended ended
September June September
2008 2008 2007
Restated Restated
US Dollar million Unaudited Unaudited Unaudited
Cash flows from operating activities
Receipts from customers 884 1,026 855
Payments to suppliers and employees (799) (937) (567)
Cash generated from operations 85 89 288
Cash generated (utilised) by
discontinued operations 1 (2) (1)
Cash utilised for hedge book
settlements (1,018) (94) -
Dividend received from associates 15 43 8
Taxation paid (16) (56) (11)
Net cash (outflow) inflow from
operating activities (933) (20) 284
Cash flows from investing activities
Capital expenditure (337) (303) (243)
Acquisition of assets - - -
Proceeds from disposal of tangible assets 36 3 9
Proceeds from disposal of assets of
discontinued operations - 10 -
Other investments acquired (29) (10) -
Associate loans, acquisitions and
disposals (36) 50 -
Proceeds from disposal of investments 28 13 18
Dividend received from other investments - - 2
Decrease (increase) in cash
restricted for use 3 (16) (18)
Interest received 33 13 10
Net loans advanced (repaid) - - -
Net cash outflow from investing
activities (302) (241) (221)
Cash flows from financing activities
Proceeds from issue of share capital 1,743 3 3
Share issue expenses (53) - -
Proceeds from borrowings 298 247 117
Repayment of borrowings (573) (4) (24)
Finance costs (31) (3) (32)
Advanced proceeds from rights offer (1) 1 -
Dividends paid (33) (6) (38)
Net cash inflow (outflow) from
financing activities 1,351 236 25
Net increase (decrease) in cash and
cash equivalents 115 (25) 88
Translation (28) 16 9
Cash and cash equivalents at
beginning of period 467 475 381
Net cash and cash equivalents at end
of period 555 467 478
Cash generated from operations
Profit (loss) before taxation 126 (35) (294)
Adjusted for:
Movement on non-hedge derivatives and
other commodity contracts (178) 37 427
Amortisation of tangible assets 143 142 147
Finance costs and unwinding of
obligations 30 28 30
Environmental, rehabilitation and
other expenditure 7 (3) 6
Operating special items (16) (36) (7)
Amortisation of intangible assets - - -
Deferred stripping (16) 3 (23)
Fair value adjustment on option
components of convertible bond - (2) 20
Interest receivable (32) (13) (13)
Other non-cash movements 49 114 3
Movements in working capital (29) (146) (9)
85 89 288
Movements in working capital
Decrease (increase) in inventories 14 (115) (49)
Increase in trade and other
receivables (17) (23) (2)
(Decrease) increase in trade and
other payables (27) (8) 42
(29) (146) (9)
Nine months Nine months
ended ended
September September
2008 2007
Restated
US Dollar million Unaudited Unaudited
Cash flows from operating activities
Receipts from customers 2,781 2,272
Payments to suppliers and employees (2,393) (1,530)
Cash generated from operations 388 742
Cash generated (utilised) by discontinued
operations (1) (3)
Cash utilised for hedge book settlements (1,112) -
Dividend received from associates 58 49
Taxation paid (117) (98)
Net cash (outflow) inflow from operating activities (784) 690
Cash flows from investing activities
Capital expenditure (895) (685)
Acquisition of assets - (40)
Proceeds from disposal of tangible assets 69 24
Proceeds from disposal of assets of
discontinued operations 10 1
Other investments acquired (74) (2)
Associate loans, acquisitions and disposals 17 -
Proceeds from disposal of investments 68 19
Dividend received from other investments - 2
Decrease (increase) in cash restricted for use (19) (30)
Interest received 57 25
Net loans advanced (repaid) - -
Net cash outflow from investing activities (768) (685)
Cash flows from financing activities
Proceeds from issue of share capital 1,755 22
Share issue expenses (53) (1)
Proceeds from borrowings 704 241
Repayment of borrowings (597) (64)
Finance costs (68) (66)
Advanced proceeds from rights offer - -
Dividends paid (58) (141)
Net cash inflow (outflow) from financing
activities 1,683 (10)
Net increase (decrease) in cash and cash
equivalents 131 (5)
Translation (54) 12
Cash and cash equivalents at beginning of period 477 471
Net cash and cash equivalents at end of period 555 478
Cash generated from operations
Profit (loss) before taxation (53) (56)
Adjusted for:
Movement on non-hedge derivatives and other
commodity contracts 187 524
Amortisation of tangible assets 420 410
Finance costs and unwinding of obligations 91 87
Environmental, rehabilitation and other expenditure 14 2
Operating special items (62) (21)
Amortisation of intangible assets 1 1
Deferred stripping (36) (59)
Fair value adjustment on option components of
convertible bond (24) (30)
Interest receivable (56) (30)
Other non-cash movements 151 29
Movements in working capital (245) (114)
388 742
Movements in working capital
Decrease (increase) in inventories (150) (154)
Increase in trade and other receivables (56) (41)
(Decrease) increase in trade and other payables (40) 82
(245) (114)
Rounding of figures may result in computational discrepancies.
Statement of recognised income and expense
Nine months Year Nine months
ended ended ended
September December September
2008 2007 2007
Restated Restated
SA Rand million Unaudited Unaudited Unaudited
Actuarial loss on pension and
post-retirement benefits (193) (99) -
Net loss on cash flow hedges
removed from equity and reported
in gold sales 1,413 1,421 910
Net loss on cash flow hedges (622) (1,173) (662)
Hedge (effectiveness)
ineffectiveness (3) 69 -
(Loss) gain on available-for-sale
financial assets (89) 8 (24)
Deferred taxation on items above (107) 36 20
Translation 4,524 (169) 61
Net income recognised directly in
equity 4,923 93 305
Loss for the period (3,968) (4,047) (896)
Total recognised income (expense)
for the period 955 (3,954) (591)
Attributable to:
Equity shareholders 604 (4,169) (761)
Minority interest 351 215 170
955 (3,954) (591)
US Dollar million
Actuarial loss on pension and
post-retirement benefits (25) (14) -
Net loss on cash flow hedges
removed from equity and reported
in gold sales 184 202 130
Net loss on cash flow hedges (81) (168) (96)
Hedge ineffectiveness - 10 -
(Loss) gain on available-for-sale
financial assets (12) 1 (3)
Deferred taxation on items above (13) 5 (5)
Translation 364 6 35
Net income recognised directly in
equity 417 42 61
Loss for the period (144) (636) (161)
Total recognised income (expense)
for the period 273 (594) (100)
Attributable to:
Equity shareholders 241 (627) (125)
Minority interest 32 33 25
273 (594) (100)
Rounding of figures may result in computational discrepancies.
Notes
for the quarter and nine months ended 30 September 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. Except for the change in accounting
policy described below and detailed in note 20, 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 group changed its accounting policy regarding accounting for incorporated
joint ventures to provide more relevant financial data as returns from these
investments are limited to dividends which is more representative of the income
flows. Incorporated joint ventures were previously accounted for under the
proportionate consolidation method. Comparative figures have been restated to
conform to the changes in accounting policy.
The financial statements of AngloGold Ashanti Limited have been prepared in
compliance with IAS34, JSE Listings Requirements and in the manner required by
the South African Companies Act, 1973 for the preparation of financial
information of the group for the quarter and nine months ended 30 September
2008.
2. Revenue
Quarter ended
Sep Jun Sep
2008 2008 2007
Restated Restated
Unaudited Unaudited Unaudited
SA Rand million
Gold income 6,851 7,749 5,913
By-products (note 3) 106 100 116
Dividend received from other
investments - - 16
Interest received 248 101 87
7,205 7,950 6,133
Nine months ended
Sep Sep
2008 2007
Restated
Unaudited Unaudited
SA Rand million
Gold income 21,258 15,853
By-products (note 3) 332 320
Dividend received from other
investments - 16
Interest received 429 216
22,019 16,405
Quarter ended
Sep Jun Sep
2008 2008 2007
Restated Restated
Unaudited Unaudited Unaudited
US Dollar million
Gold income 885 997 836
By-products (note 3) 14 13 16
Dividend received from other
investments - - 2
Interest received 32 13 12
930 1,023 867
Nine months ended
Sep Sep
2008 2007
Restated
Unaudited Unaudited
US Dollar million
Gold income 2,761 2,226
By-products (note 3) 43 45
Dividend received from other
investments - 2
Interest received 56 30
2,859 2,303
3. Cost of sales
Quarter ended
Sep Jun Sep
2008 2008 2007
Restated Restated
Unaudited Unaudited Unaudited
SA Rand million
Cash operating costs (4,540) (3,864) (3,318)
By-products revenue (note 2) 106 100 116
By-products cash operating costs (57) (86) (57)
(4,491) (3,850) (3,259)
Other cash costs (177) (156) (136)
Total cash costs (4,668) (4,006) (3,395)
Retrenchment costs (14) (15) (27)
Rehabilitation and other
non-cash costs (102) (16) (85)
Production costs (4,784) (4,037) (3,507)
Amortisation of tangible assets (1,111) (1,102) (1,040)
Amortisation of intangible assets (4) (4) (3)
Total production costs (5,899) (5,143) (4,550)
Inventory change (249) 249 (8)
(6,148) (4,894) (4,558)
Nine months ended
Sep Sep
2008 2007
Restated
Unaudited Unaudited
SA Rand million
Cash operating costs (11,916) (9,144)
By-products revenue (note 2) 332 320
By-products cash operating costs (221) (192)
(11,805) (9,016)
Other cash costs (538) (404)
Total cash costs (12,343) (9,420)
Retrenchment costs (56) (44)
Rehabilitation and other
non-cash costs (221) (120)
Production costs (12,620) (9,584)
Amortisation of tangible assets (3,233) (2,917)
Amortisation of intangible assets (11) (10)
Total production costs (15,864) (12,511)
Inventory change 234 213
(15,630) (12,298)
Quarter ended
Sep Jun Sep
2008 2008 2007
Restated Restated
Unaudited Unaudited Unaudited
US Dollar million
Cash operating costs (584) (498) (469)
By-products revenue (note 2) 14 13 16
By-products cash operating costs (8) (11) (8)
(578) (496) (461)
Other cash costs (23) (21) (19)
Total cash costs (601) (517) (480)
Retrenchment costs (2) (2) (4)
Rehabilitation and other
non-cash costs (13) (2) (12)
Production costs (616) (521) (496)
Amortisation of tangible assets (143) (142) (147)
Amortisation of intangible assets - - -
Total production costs (759) (663) (643)
Inventory change (32) 31 (1)
(790) (632) (644)
Nine months ended
Sep Sep
2008 2007
Restated
Unaudited Unaudited
US Dollar million
Cash operating costs (1,548) (1,284)
By-products revenue (note 2) 43 45
By-products cash operating costs (29) (27)
(1,534) (1,266)
Other cash costs (70) (57)
Total cash costs (1,604) (1,323)
Retrenchment costs (7) (6)
Rehabilitation and other
non-cash costs (28) (17)
Production costs (1,639) (1,346)
Amortisation of tangible assets (420) (410)
Amortisation of intangible assets (1) (1)
Total production costs (2,060) (1,757)
Inventory change 31 29
(2,029) (1,728)
Rounding of figures may result in computational discrepancies.
Rounding of figures may result in computational discrepancies.
4. Gain (loss) on non-hedge derivatives and other commodity contracts
Quarter ended
Sep Jun Sep
2008 2008 2007
Restated Restated
Unaudited Unaudited Unaudited
SA Rand million
(Loss) gain on realised
non-hedge derivatives (519) (1,119) 302
Realised loss on other commodity
contracts - (253) -
Loss on accelerated settlement of
non-hedge derivatives - (7,765) -
Gain (loss) on unrealised non-
hedge derivatives 666 7,673 (2,574)
Unrealised gain on other
commodity physical borrowings 1 22 56
Provision reversed (accrued) for
gain (loss) on future deliveries
of other commodities - 18 (204)
148 (1,425) (2,421)
Nine months ended
Sep Sep
2008 2007
Restated
Unaudited Unaudited
SA Rand million
(Loss) gain on realised
non-hedge derivatives (1,797) 1,292
Realised loss on other commodity
contracts (253) -
Loss on accelerated settlement of
non-hedge derivatives (7,765) -
Gain (loss) on unrealised non-
hedge derivatives 2,876 (3,476)
Unrealised gain on other
commodity physical borrowings 26 27
Provision reversed (accrued) for
gain (loss) on future deliveries
of other commodities 37 (87)
(6,875) (2,243)
Quarter ended
Sep Jun Sep
2008 2008 2007
Restated Restated
Unaudited Unaudited Unaudited
US Dollar million
(Loss) gain on realised
non-hedge derivatives (66) (142) 43
Realised loss on other commodity
contracts - (32) -
Loss on accelerated settlement of
non-hedge derivatives - (979) -
Gain (loss) on unrealised non-
hedge derivatives 158 899 (398)
Unrealised gain on other
commodity physical borrowings - 3 8
Provision reversed (accrued) for
gain (loss) on future deliveries
of other commodities - 2 (29)
92 (248) (377)
Nine months ended
Sep Sep
2008 2007
Restated
Unaudited Unaudited
US Dollar million
(Loss) gain on realised
non-hedge derivatives (230) 181
Realised loss on other commodity
contracts (32) -
Loss on accelerated settlement of
non-hedge derivatives (979) -
Gain (loss) on unrealised non-
hedge derivatives 705 (524)
Unrealised gain on other
commodity physical borrowings 3 4
Provision reversed (accrued) for
gain (loss) on future deliveries
of other commodities 5 (12)
(528) (351)
5. Other operating expenses
Quarter ended
Sep Jun Sep
2008 2008 2007
Restated Restated
Unaudited Unaudited Unaudited
SA Rand million
Pension and medical defined
benefit provisions (24) (24) (25)
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 (49) (27) (40)
Miscellaneous - 3 -
(73) (48) (65)
Nine months ended
Sep Sep
2008 2007
Restated
Unaudited Unaudited
Pension and medical defined
benefit provisions (72) (75)
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 (17) (67)
Miscellaneous - (14)
(89) (156)
Quarter ended
Sep Jun Sep
2008 2008 2007
Restated Restated
Unaudited Unaudited Unaudited
US Dollar million
Pension and medical defined
benefit provisions (3) (3) (4)
Claims filed by former employees
in respect of loss of
employment, work-related
accident injuries and diseases,
governmental fiscal claims and
costs of old tailings operations (6) (3) (5)
Miscellaneous - - -
(9) (6) (9)
Nine months ended
Sep Sep
2008 2007
Restated
Unaudited Unaudited
US Dollar million
Pension and medical defined
benefit provisions (9) (11)
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 (2) (9)
Miscellaneous - (2)
(11) (22)
6. Operating special items
Quarter ended
Sep Jun Sep
2008 2008 2007
Restated Restated
Unaudited Unaudited Unaudited
SA Rand million
Reimbursement (under provision)
of indirect tax expenses 1 49 -
Impairment of tangible assets
(note 9) (3) (1) -
Recovery of loan 34 - -
ESOP and BEE costs resulting
from rights offer - (76) -
Profit on disposal (acquisition)
and abandonment of assets
(note 9) 101 272 48
(Loss) profit on disposal of
investment in associate
(note 9) (12) 29 -
121 273 48
Nine months ended
Sep Sep
2008 2007
Restated
Unaudited Unaudited
SA Rand million
Reimbursement (under provision)
of indirect tax expenses 50 (6)
Impairment of tangible assets
(note 9) (7) (1)
Recovery of loan 34 23
ESOP and BEE costs resulting
from rights offer (76) -
Profit on disposal (acquisition)
and abandonment of assets
(note 9) 457 134
(Loss) profit on disposal of
investment in associate
(note 9) 18 -
476 149
Quarter ended
Sep Jun Sep
2008 2008 2007
Restated Restated
Unaudited Unaudited Unaudited
US Dollar million
Reimbursement (under provision)
of indirect tax expenses - 6 -
Impairment of tangible assets
(note 9) - - -
Recovery of loan 4 - -
ESOP and BEE costs resulting
from rights offer - (10) -
Profit on disposal (acquisition)
and abandonment of assets
(note 9) 14 35 7
(Loss) profit on disposal of
investment in associate
(note 9) (2) 4 -
16 36 7
Nine months ended
Sep Sep
2008 2007
Restated
Unaudited Unaudited
Reimbursement (under provision)
of indirect tax expenses 6 (1)
Impairment of tangible assets
(note 9) (1) -
Recovery of loan 4 3
ESOP and BEE costs resulting
from rights offer (10) -
Profit on disposal (acquisition
and abandonment of assets
(note 9) 60 19
(Loss) profit on disposal of
investment in associate
(note 9) 2 -
62 21
Rounding of figures may result in computational discrepancies.
7. Taxation
Quarter ended
Sep Jun Sep
2008 2008 2007
Restated Restated
Unaudited Unaudited Unaudited
SA Rand million
Current tax
Normal taxation (103) 92 (342)
Disposal of tangible assets
(note 9) (2) (3) (9)
(Under) over provision prior year (4) (28) 17
(109) 61 (334)
Deferred taxation
Temporary differences (446) 1,004 (31)
Unrealised non-hedge derivatives
and other commodity contracts (9) (1,543) 240
Disposal of tangible assets
(note 9) (13) 7 31
Change in estimated deferred tax
rate - - -
Change in statutory tax rate - - -
(468) (532) 240
Total taxation (577) (471) (94)
Nine months ended
Sep Sep
2008 2007
Restated
Unaudited Unaudited
SA Rand million
Current tax
Normal taxation (480) (976)
Disposal of tangible assets
(note 9) (7) (31)
(Under) over provision prior year (19) (22)
(506) (1,029)
Deferred taxation
Temporary differences 400 25
Unrealised non-hedge derivatives
and other commodity contracts (966) 344
Disposal of tangible assets
(note 9) (17) 20
Change in estimated deferred tax
rate - (90)
Change in statutory tax rate 189 -
(394) 299
Total taxation (900) (731)
Quarter ended
Sep Jun Sep
2008 2008 2007
Restated Restated
Unaudited Unaudited Unaudited
US Dollar million
Current tax
Normal taxation (15) 10 (49)
Disposal of tangible assets
(note 9) - - (1)
(Under) over provision prior year - (4) 3
(15) 6 (47)
Deferred taxation
Temporary differences (57) 126 (4)
Unrealised non-hedge derivatives
and other commodity contracts 4 (194) 35
Disposal of tangible assets
(note 9) (2) 1 4
Change in estimated deferred tax
rate - - -
Change in statutory tax rate - - -
(55) (67) 35
Total taxation (69) (61) (11)
Nine months ended
Sep Sep
2008 2007
Restated
Unaudited Unaudited
US Dollar million
Current tax
Normal taxation (66) (137)
Disposal of tangible assets
(note 9) (1) (4)
(Under) over provision prior year (2) (3)
(69) (144)
Deferred taxation
Temporary differences 48 4
Unrealised non-hedge derivatives
and other commodity contracts (118) 50
Disposal of tangible assets
(note 9) (2) 3
Change in estimated deferred tax
rate - (13)
Change in statutory tax rate 25 -
(47) 44
Total taxation (115) (100)
8. Discontinued Operations
The Ergo surface dump reclamation, which forms part of the South Africa
operations, has been discontinued as the operation has reached the end of its
useful life. The results of Ergo are presented below:
Quarter ended
Sep Jun Sep
2008 2008 2007
Restated Restated
Unaudited Unaudited Unaudited
SA Rand million
Gold income - - 1
Cost of sales (4) (12) (6)
Gross loss (4) (12) (5)
Other income 8 3 -
Profit (loss) before taxation 4 (10) (5)
Normal taxation 1 (22) 1
Deferred tax - - (20)
Net profit (loss) after tax 5 (32) (24)
Profit on disposal of assets (note
9) 1 217 -
Deferred tax on disposal
of assets (note 9) - 6 -
Profit (loss) from discontinued
operations 6 191 (24)
Nine months ended
Sep Sep
2008 2007
Restated
Unaudited Unaudited
SA Rand million
Gold income - 5
Cost of sales (21) (16)
Gross loss (21) (11)
Other income 13 -
Profit (loss) before taxation (8) (11)
Normal taxation (21) (2)
Deferred tax (1) (21)
Net profit (loss) after tax (30) (34)
Profit on disposal of assets (note 9) 218 -
Deferred tax on disposal
of assets (note 9) 6 -
Profit (loss) from discontinued
operations 194 (34)
Quarter ended
Sep Jun Sep
2008 2008 2007
Restated Restated
Unaudited Unaudited Unaudited
US Dollar million
Gold income - - -
Cost of sales (1) (2) (1)
Gross loss (1) (2) (1)
Other income 1 - -
Profit (loss) before taxation 1 (1) (1)
Normal taxation - (3) -
Deferred tax - - (3)
Net profit (loss) after tax 1 (4) (3)
Profit on disposal of assets
(note 9) - 27 -
Deferred tax on disposal
of assets (note 9) - 1 -
Profit (loss) from discontinued
operations 1 24 (3)
Nine months ended
Sep Sep
2008 2007
Restated
Unaudited Unaudited
US Dollar million
Gold income - 1
Cost of sales (3) (2)
Gross loss (3) (1)
Other income 2 -
Profit (loss) before taxation (1) (1)
Normal taxation (3) -
Deferred tax - (3)
Net profit (loss) after tax (4) (5)
Profit on disposal of assets (note 9) 27 -
Deferred tax on disposal
of assets (note 9) 1 -
Profit (loss) from discontinued
operations 24 (5)
The pre-tax profit on disposal of the assets in the June 2008 quarter amounted
to $27 million (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 earnings (loss)
Quarter ended
Sep Jun Sep
2008 2008 2007
Restated Restated
Unaudited Unaudited Unaudited
SA Rand million
The profit (loss) attributable to
equity shareholders has been
adjusted by the following to
arrive at headline earnings
(loss):
Profit (loss) attributable to
equity
shareholders (247) (176) (2,003)
Impairment of tangible assets
(note 6) 3 1 -
Profit on disposal and
abandonment of assets
(note 6) (101) (272) (48)
Loss (profit) on disposal of
investment in associate
(note 6) 12 (29) -
Profit on disposal of discontinued
assets (note 8) (1) (217) -
Impairment of investment in
associate 21 13 101
Profit on disposal of assets in
associate - (23) -
Taxation on items above -
current portion (note 7) 2 3 9
Taxation on items above -
deferred portion (note 7) 13 (7) (31)
Discontinued operations
Taxation on items above
(note 8) - (6) -
Headline earnings (loss) (298) (713) (1,972)
Cents per share (1)
Headline earnings (loss) (86) (252) (701)
Nine months ended
Sep Sep
2008 2007
Restated
Unaudited Unaudited
SA Rand million
The profit (loss) attributable to
equity shareholders has been
adjusted by the following to
arrive at headline earnings
(loss):
Profit (loss) attributable to equity
shareholders (4,236) (1,071)
Impairment of tangible assets
(note 6) 7 1
Profit on disposal and
abandonment of assets
(note 6) (457) (134)
Loss (profit) on disposal of
investment in associate
(note 6) (18) -
Profit on disposal of discontinued
assets (note 8) (218) -
Impairment of investment in
associate 35 151
Profit on disposal of assets in
associate (23) -
Taxation on items above -
current portion (note 7) 7 31
Taxation on items above -
deferred portion (note 7) 17 (20)
Discontinued operations
Taxation on items above
(note 8) (6) -
Headline earnings (loss) (4,891) (1,042)
Cents per share (1)
Headline earnings (loss) (1,609) (370)
Quarter ended
Sep Jun Sep
2008 2008 2007
Restated Restated
Unaudited Unaudited Unaudited
US Dollar million
The profit (loss) attributable to
equity shareholders has been
adjusted by the following to
arrive at headline earnings
(loss):
Profit (loss) attributable to
equity
shareholders 51 (87) (316)
Impairment of tangible assets
(note 6) - - -
Profit on disposal and
abandonment of assets
(note 6) (14) (35) (7)
Loss (profit) on disposal of
investment in associate
(note 6) 2 (4) -
Profit on disposal of
discontinued
assets (note 8) - (27) -
Impairment of investment in
associate 3 2 14
Profit on disposal of assets in
associate - (3) -
Taxation on items above -
current portion (note 7) - - 1
Taxation on items above -
deferred portion (note 7) 2 (1) (4)
Discontinued operations
Taxation on items above
(note 8) - (1) -
Headline earnings (loss) 44 (156) (312)
Cents per share (1)
Headline earnings (loss) 13 (55) (111)
Nine months ended
Sep Sep
2008 2007
Restated
Unaudited Unaudited
US Dollar million
The profit (loss) attributable to
equity shareholders has been
adjusted by the following to
arrive at headline earnings
(loss):
Profit (loss) attributable to equity
shareholders (179) (186)
Impairment of tangible assets
(note 6) 1 -
Profit on disposal and
abandonment of assets
(note 6) (60) (19)
Loss (profit) on disposal of
investment in associate
(note 6) (2) -
Profit on disposal of discontinued
assets (note 8) (27) -
Impairment of investment in
associate 4 21
Profit on disposal of assets in
associate (3) -
Taxation on items above -
current portion (note 7) 1 4
Taxation on items above -
deferred portion (note 7) 2 (3)
Discontinued operations
Taxation on items above
(note 8) (1) -
Headline earnings (loss) (263) (182)
Cents per share (1)
Headline earnings (loss) (87) (65)
(1) Calculated on the basic weighted average number of ordinary shares.
10. Shares
Quarter ended
Sep Jun Sep
2008 2008 2007
Unaudited Unaudited Unaudited
Authorised:
Ordinary shares of 25 SA
cents each 400,000,000 400,000,000 4,000,000
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 350,677,750 277,894,808 276,919,836
E ordinary shares in issue 4,002,887 4,042,865 4,077,860
Total ordinary shares: 354,680,637 281,937,673 280,997,696
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 342,692,446 277,825,711 276,853,218
E ordinary shares 4,018,901 4,064,751 4,093,133
Fully vested options 405,584 607,752 455,473
Weighted average number of
shares 347,116,931 282,498,214 281,401,824
Dilutive potential of share
options 786,816 - -
Diluted number of ordinary
shares (1) 347,903,747 282,498,214 281,401,824
Nine months ended
Sep Sep
2008 2007
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 350,677,750 276,919,836
E ordinary shares in issue 4,002,887 4,077,860
Total ordinary shares: 354,680,637 280,997,696
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 299,550,334 276,698,228
E ordinary shares 4,068,636 4,131,425
Fully vested options 418,312 548,859
Weighted average number of
shares 304,037,282 281,378,512
Dilutive potential of share options - -
Diluted number of ordinary
shares (1) 304,037,282 281,378,512
(1) The basic and diluted number of ordinary
shares is the same for the June
2008 quarter, September 2007 quarter, period ended nine months September 2008
and period ended nine months September 2007 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
Sep Jun Dec Sep
2008 2008 2007 2007
Restated Restated Restated
Unaudited Unaudited Unaudited Unaudited
SA Rand million
Balance at beginning of
period 23,322 23,322 23,045 23,045
Ordinary shares issued 14,140 112 283 170
E ordinary shares
cancelled (17) (10) (6) (14)
Translation - - - -
Sub-total 37,445 23,424 23,322 23,201
Redeemable preference
shares held within the
group (312) (312) (312) (312)
Ordinary shares held
within the group (278) (282) (292) (285)
E ordinary shares held
within group (330) (335) (347) (339)
Balance at end of period 36,525 22,495 22,371 22,265
As at
Sep Jun Dec Sep
2008 2008 2007 2007
Restated Restated Restated
Unaudited Unaudited Unaudited Unaudited
US Dollar million
Balance at beginning of
period 3,425 3,425 3,292 3,292
Ordinary shares issued 1,725 15 40 22
E ordinary shares
cancelled (2) (1) (1) (1)
Translation (618) (448) 94 63
Sub-total 4,530 2,991 3,425 3,376
Redeemable preference
shares held within the
group (38) (40) (46) (45)
Ordinary shares held
within the group (34) (36) (43) (41)
E ordinary shares held
within group (40) (43) (51) (49)
Balance at end of period 4,418 2,872 3,285 3,241
12. Retained earnings and other reserves
Non- Foreign
Retained distribu- currency
earnings table transla-
reserves tion
reserve
SA Rand million
Balance at December 2006 (214) 138 436
Deferred taxation thereon
Loss attributable to equity shareholders (1,071)
Dividends (919)
Transaction with minorities (79)
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
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 65
Balance at September 2007 (2,283) 138 501
Balance at December 2007 (5,524) 138 338
Actuarial loss recognised
Deferred taxation thereon
Loss attributable to equity shareholders (4,236)
Dividends (324)
Transfers to foreign currency
translation reserve (12) 12
Acquisition of minority interest (853)
Net loss on cash flow hedges removed
from equity and reported in gold sales
Net loss on cash flow hedges
Hedge effectiveness
Deferred taxation on cash flow hedges
and hedge effectiveness
Loss on available-for-sale financial
assets
Release on disposal of
available-for-sale financial assets
Deferred taxation on
availability-for-sale financial assets
Share-based payment for share awards
and BEE transaction
Translation 4,599
Balance at September 2008 (10,949) 138 4,949
Other
Actuarial compre-
(losses) hensive Total
gains income
SA Rand million
Balance at December 2006 (45) (1,503) (1,188)
Deferred taxation thereon 1 1
Loss attributable to equity shareholders (1,071)
Dividends (919)
Transaction with minorities (79)
Net loss on cash flow hedges removed from
equity and reported in gold sales 900 900
Net loss on cash flow hedges (655) (655)
Deferred taxation on cash flow hedges 8 8
Loss on available-for-sale financial
assets (24) (24)
Deferred taxation on available-for-sale
financial assets 11 11
Share-based payment for share awards and
BEE transaction 156 156
Translation 1 3 69
Balance at September 2007 (43) (1,104) (2,791)
Balance at December 2007 (108) (1,011) (6,167)
Actuarial loss recognised (193) (193)
Deferred taxation thereon 66 66
Loss attributable to equity shareholders (4,236)
Dividends (324)
Transfers to foreign currency translation
reserve -
Acquisition of minority interest (853)
Net loss on cash flow hedges removed from
equity and reported in gold sales 1,395 1,395
Net loss on cash flow hedges (635) (635)
Hedge effectiveness (3) (3)
Deferred taxation on cash flow hedges and
hedge effectiveness (196) (196)
Loss on available-for-sale financial
assets (81) (81)
Release on disposal of available-for-sale
financial assets (8) (8)
Deferred taxation on
availability-for-sale financial assets 23 23
Share-based payment for share awards and
BEE transaction 161 161
Translation 2 (129) 4,472
Balance at September 2008 (233) (484) (6,579)
Rounding of figures may result in computational discrepancies.
12. Retained earnings and other reserves
Non- Foreign
Retained distribu- currency
earnings table transla
reserves tion
reserve
US Dollar million
Balance at December 2006 (209) 20 241
Deferred taxation thereon
Loss attributable to equity shareholders (186)
Dividends (125)
Transactions with minorities (12)
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
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 - 32
Balance at September 2007 (532) 20 273
Balance at December 2007 (1,020) 20 258
Actuarial loss recognised
Deferred taxation thereon
Loss attributable to equity shareholders (179)
Dividends (41)
Acquisition of minority interest (111)
Transfers to foreign currency
translation reserve (1) 1
Net loss on cash flow hedges removed
from equity and reported in gold sales
Net loss on cash flow hedges
Hedge effectiveness
Deferred taxation on cash flow hedges
and hedge effectiveness
Loss on available-for-sale financial
assets
Release on disposal of
available-for-sale financial assets
Deferred taxation on available-for-sale
financial assets
Share-based payment for share awards
and BEE transaction
Translation (3) 367
Balance at September 2008 (1,352) 17 626
Other
Actuarial compre-
(losses) hensive
gains income Total
US Dollar million
Balance at December 2006 (6) (215) (169)
Deferred taxation thereon - -
Loss attributable to equity shareholders (186)
Dividends (125)
Transactions with minorities (12)
Net loss on cash flow hedges removed from
equity and reported in gold sales 129 129
Net loss on cash flow hedges (95) (95)
Deferred taxation on cash flow hedges (6) (6)
Loss on available-for-sale-financial assets (3) (3)
Deferred taxation on available-for-sale
financial assets 1 1
Share-based payment for share awards and
BEE transaction 25 25
Translation - 3 35
Balance at September 2007 (6) (161) (406)
Balance at December 2007 (16) (148) (906)
Actuarial loss recognised (25) (25)
Deferred taxation thereon 9 9
Loss attributable to equity shareholders (179)
Dividends (41)
Acquisition of minority interest (111)
Transfers to foreign currency translation
reserve -
Net loss on cash flow hedges removed from
equity and reported in gold sales 182 182
Net loss on cash flow hedges (83) (83)
Hedge effectiveness - -
Deferred taxation on cash flow hedges and
hedge effectiveness (24) (24)
Loss on available-for-sale financial assets (11) (11)
Release on disposal of available-for-sale
financial assets (1) (1)
Deferred taxation on available-for-sale
financial assets 2 2
Share-based payment for share awards and
BEE transaction 21 21
Translation 4 3 371
Balance at September 2008 (28) (59) (796)
13. Minority interests
As at
Sep Jun Dec Sep
2008 2008 2007 2007
Restated Restated
Unaudited Unaudited Unaudited Unaudited
SA Rand million
Balance at beginning of
period 429 429 436 436
Profit for the period 268 211 222 175
Dividends paid (131) (53) (131) (114)
Acquisition of minority
interest(1) 6 - (91) (95)
Other balance sheet
movements - - - 4
Net loss on cash flow
hedges removed from
equity and
reported in gold sales 18 12 14 10
Net gain (loss) on cash
flow hedges 13 (5) (12) (7)
Translation 52 43 (9) (8)
Balance at end of period 655 637 429 401
As at
Sep Jun Dec Sep
2008 2008 2007 2007
Restated Restated Restated Restated
Unaudited Unaudited Unaudited Unaudited
US Dollar million
Balance at beginning of
period 63 63 62 62
Profit for the period 35 27 32 25
Dividends paid (17) (7) (19) (16)
Acquisition of minority
interest(1) 1 - (13) (13)
Other balance sheet
movements - - - -
Net loss on cash flow
hedges removed from
equity and
reported in gold sales 2 2 2 1
Net gain (loss) on cash
flow hedges 2 (1) (2) (1)
Translation (7) (3) 1 -
Balance at end of period 79 81 63 58
(1) With effect 1 September 2008, AngloGold Ashanti acquired a 70% interest in
the Gansu Joint Venture and effective 1 September 2007, AngloGold Ashanti
acquired the remaining 15% minorities of Iduapriem.
14. Derivatives
During the September 2008 quarter the hedge book delta was reduced by
750,000oz. Accelerated deliveries into contracts scheduled to mature in the
fourth quarter and later amounted to 263,000oz. During the June 2008 quarter
the hedge book delta was reduced by 2.71Moz.
15. Trade, other payables and deferred income
The amount of $1,588 million (R12,437 million) as at 30 June 2008 includes an
accrual for the accelerated cancellation of non hedge derivative contracts
amounting to $1,009 million (R7,902 million). These accruals were cash settled
during the month of July 2008.
16. Exchange rates
Sep Jun Dec Sep
2008 2008 2007 2007
Unaudited Unaudited Unaudited Unaudited
ZAR/USD average for the
year to date 7.69 7.64 7.03 7.12
ZAR/USD average for the
quarter 7.77 7.76 6.76 7.08
ZAR/USD closing 8.27 7.83 6.81 6.87
ZAR/AUD average for the
year to date 7.02 7.08 5.89 5.85
ZAR/AUD average for the
quarter 6.86 7.32 6.00 6.00
ZAR/AUD closing 6.66 7.54 5.98 6.04
BRL/USD average for the
year to date 1.69 1.70 1.95 2.00
BRL/USD average for the
quarter 1.67 1.65 1.78 1.92
BRL/USD closing 1.93 1.59 1.78 1.85
ARS/USD average for the
year to date 3.11 3.14 3.12 3.11
ARS/USD average for the
quarter 3.04 3.12 3.15 3.14
ARS/USD closing 3.12 3.03 3.15 3.15
17. Capital commitments
Sep Jun Dec Sep
2008 2008 2007 2007
Restated
Unaudited Unaudited Unaudited Unaudited
SA Rand million
Orders placed and
outstanding on capital
contracts at
the prevailing rate of
exchange (1) 2,292 2,709 2,968 4,406
Sep Jun Dec Sep
2008 2008 2007 2007
Restated
Unaudited Unaudited Unaudited Unaudited
US Dollar million
Orders placed and
outstanding on capital
contracts at
the prevailing rate of
exchange (1) 277 346 436 641
(1)
Includes capital commitments relating to equity accounted joint ventures.
Liquidity and capital resources:
To service the above capital commitments and other operational requirements,
the group is dependent on existing cash resources, cash generated from
operations and borrowing facilities.
Cash generated from operations is subject to operational, market and other
risks. Distributions from operations may be subject to foreign investment and
exchange control laws and regulations and the quantity of foreign exchange
available in offshore countries. In addition distributions from joint ventures
are subject to the relevant board approval.
The credit facilities and other financing arrangements contain financial
covenants and other similar undertakings. To the extent that external
borrowings are required, the groups covenant performance indicates that
existing financing facilities will be available to meet the above commitments.
To the extent that any of the financing facilities mature in the near future,
the group believes that these facilities can be refinanced.
18. Contingent liabilities
AngloGold Ashanti`s material contingent liabilities at 30 September 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 ($12m). 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 MSG 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
$40m 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 $24m. 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 $8m.
Tax Disputes - Brazil - Morro Velho and AngloGold Ashanti Brasil Mineracao are
involved in disputes with tax authorities. These disputes involve federal tax
assessments including income tax, social contributions and annual property tax
based on ownership of properties outside of urban perimeters (ITR) and the
reimbursable value added tax on fixed assets. The amount involved is
approximately $22m.
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 amount to an
attributable $42m at 30 September 2008 (30 June 2008: attributable $52m).
The last audited value added tax return was for the period ended 30 June
2008 and at the balance sheet date an attributable $31m was audited and
$11m 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 September 2008 (30 June 2008: attributable $7m).
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
$16m at 30 September 2008 (30 June 2008: $15m). The last audited value
added tax return was for the period ended 31 July 2008 and at the balance
sheet date was $15m. 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 $42m at
30 September 2008 (30 June 2008: $41m). 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 $14m have been audited and lodged with the Customs
and Excise authorities, whilst claims for refund of $28m have not yet been
lodged. 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. Change in accounting policy
Effective 1 January 2008, the group changed its accounting policy for the
accounting of jointly controlled entities. In terms of IAS 31 "Interests in
Joint Ventures" the group previously proportionately consolidated jointly
controlled entities. During the current year the group decided to change its
accounting policy to account for these entities using the equity method, the
alternative treatment permitted by IFRS. Management has concluded that the
change in accounting policy will result in more reliable and relevant
information and is in accordance with international trends in accounting.
Comparative information in this report has been restated in order to reflect
the adoption of the revised accounting policy for the accounting of jointly
controlled entities.
21. Attributable interest
On 1 July 2008, shareholders of Golden Cycle Gold Corporation approved the
acquisition by AngloGold Ashanti, in an all share transaction that resulted in
Cripple Creek & Victor Gold Mining Company Limited being fully owned by the
company. Prior to this, AngloGold Ashanti held a 66.7% interest in CC&V in
which it was entitled to receive 100% of the cash flows from the operation
until the loan, extended to the joint venture by AngloGold Ashanti USA Inc.,
was repaid.
22. Borrowings
AngloGold Ashanti`s borrowings are interest bearing.
23. Announcements
On 31 July 2008, AngloGold Ashanti announced it had entered into a letter
agreement with Eldorado Gold Corporation ("Eldorado") to acquire 100% of
Eldorado`s wholly owned subsidiary, Sao Bento Gold Limited ("SBG"), which
company in turn wholly owns Sao Bento Mineracao S.A. ("SBMSA") for a
consideration of $70m to be settled by the issue of AngloGold Ashanti shares to
Eldorado ("the Transaction").
SBMSA holds the Sao Bento Mine ("Sao Bento"), a Brazilian gold operation
located in the immediate vicinity of AngloGold Ashanti`s proposed Corrego do
Sltio Mine ("Corrego do Sltio"). Corrego do Sltio is part of AngloGold
Ashanti Mineracao Ltda and is located in the municipality of Santa Barbara,
Iron Quadrangle region of Minas Gerais State, Brazil. Sao Bento started its
operations in 1986 and operated until January 2007, at which time Sao Bento`s
process plant and facilities were placed on care and maintenance.
The Transaction is subject to the execution and delivery of all definitive
agreements necessary to implement the Transaction and the receipt of all
necessary regulatory, ministerial and other government approvals in South
Africa and Brazil including the approval of the South African Reserve Bank and
the SDE-CADE antitrust approval in Brazil.
On 17 October 2008 AngloGold Ashanti announced that it has been notified of an
unsolicited below-market "mini- tender offer" by TRC Capital Corporation of
Toronto, Canada to purchase up to 4,000,000 American depositary shares ("ADSs")
of AngloGold Ashanti Limited (each of which represents one ordinary share).
AngloGold Ashanti recommended against ADS holders tendering their ADSs in
response to this unsolicited mini-tender offer and cautioned shareholders that
TRC Capital had made a multitude of below-market mini-tender offers for the
shares of other companies for its profit.
24. Dividend
Interim dividend No. 104 of 50 South African cents or 3.4137 UK pence or 67.4
cedis per share was paid to registered shareholders on 29 August 2008, while a
dividend of 1.459 Australian cents per CHESS Depositary Interest (CDI) was paid
on the same day. On 1 September 2008, a dividend of 0.0674 cedis per Ghanaian
Depositary Share (GhDS) was paid to holders thereof. Each CDI represents
one-fifth of an ordinary share, and 100 GhDSs represents one ordinary share. A
dividend was paid to holders of American Depositary Receipts (ADRs) on 8
September 2008 at a rate of 6.449 US cents per American Depositary Share (ADS).
Each ADS represents one ordinary share.
In addition, directors declared Dividend No. E4 of 25 South African cents per E
ordinary share, payable to employees participating in the Bokamoso ESOP and
Izingwe Holdings (Proprietary) Limited. These dividends were paid on 29 August
2008.
25. 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
29 October 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
Renee Beyers
Telephone: +27 11 637 6302
Fax: +27 11 637 6400
E-mail: rbeyers@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
Certain statements contained in this document, including, without limitation,
those concerning AngloGold Ashanti`s strategy to reduce its gold hedging
position including the extent and effect of the hedge reduction, the economic
outlook for the gold mining industry, expectations regarding gold prices,
production, cash costs and other operating results, growth prospects and
outlook of AngloGold Ashanti`s operations, individually or in the aggregate,
including the completion and commencement of commercial operations of certain
of AngloGold Ashanti`s exploration and production projects and completion of
acquisitions and dispositions, AngloGold Ashanti`s liquidity and capital
resources and expenditure, including its intentions and ability to refinance
its $1 billion convertible bond, and the outcome and consequences of any
pending litigation proceedings, contain certain forward- looking statements
regarding AngloGold Ashanti`s operations, economic performance and financial
condition. Although AngloGold Ashanti believes that the expectations reflected
in such forward-looking statements are reasonable, no assurance can be given
that such expectations will prove to have been correct. Accordingly, results
could differ materially from those set out in the forward-looking statements as
a result of, among other factors, changes in economic and market conditions,
success of business and operating initiatives, changes in the regulatory
environment and other government actions, fluctuations in gold prices and
exchange rates, and business and operational risk management. For a discussion
of such factors, refer to AngloGold Ashanti`s annual report 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. 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
this document 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.
Date: 30/10/2008 07:59:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
