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ANG
ANANO
ANG - Anglogold Ashanti Limited - Report to shareholders for the quarter and six
months ended 30 June 2010
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
Report to shareholders for the quarter and six months ended 30 June 2010
Group results for the quarter....
- Adjusted headline earnings more than doubled to $129m, or 35 US cents per
share arising from the higher production and gold price.
- Production of 1.126Moz at a total cash cost of $617/oz; significant
improvements on market guidance.
- Production gains 4% on higher volumes from South Africa and Americas regions.
- Hedge book declines by 330,000oz to 3.22Moz, now less than three quarters`
production.
- Uranium production jumps 24% to 387,000lbs on improved recoveries.
- CC&V, Geita and South African operations continue strong turnaround success.
- Promising initial results received from exploration drilling on Baffin Island
in Canada.
- Tropicana regional exploration yields significant results, feasibility study
on track for completion in third quarter.
- Kibali and Mongbwalu project studies in the DRC, progressing to schedule.
- Interim dividend declared of 65 South African cents per share or 9 US cents
per ADS.
Events post quarter-end...
- Tau Lekoa sale to Simmer & Jack Mines Limited concluded on 1 August 2010.
- Drilling set to restart on La Colosa in Colombia.
- AngloGold Ashanti assumes 51% of Gramalote project in Colombia.
Quarter
ended ended
Jun Mar
2010 2010
SA rand / Metric
Operating review
Gold
Produced - kg / oz (000) 35,011 33,574
Price received - R/kg / $/oz 265,806 244,873
Total cash costs - R/kg / $/oz 149,365 149,431
Total production costs - R/kg / $/oz 183,891 190,374
Financial review
Adjusted gross profit - Rm / $m 2,723 1,638
(Loss) profit attributable to equity
shareholders - Rm / $m (1,360) 1,150
- cents/share (371) 313
Adjusted headline earnings - Rm / $m 980 463
- cents/share 267 126
Cash flow from operating activities - Rm / $m 2,963 1,326
Capital expenditure - Rm / $m 1,703 1,283
Six months
ended ended
Jun Jun
2010 2009
SA rand / Metric
Operating review
Gold
Produced - kg / oz (000) 68,586 69,356
Price received - R/kg / $/oz 255,564 256,862
Total cash costs - R/kg / $/oz 149,397 134,681
Total production costs - R/kg / $/oz 187,065 171,229
Financial review
Adjusted gross profit - Rm / $m 4,360 5,275
(Loss) profit attributable to equity
shareholders - Rm / $m (210) 2,305
- cents/share (57) 643
Adjusted headline earnings - Rm / $m 1,442 2,840
- cents/share 393 792
Cash flow from operating activities - Rm / $m 4,289 4,301
Capital expenditure - Rm / $m 2,986 4,608
Quarter
ended ended
Jun Mar
2010 2010
US dollar / Imperial
Operating review
Gold
Produced - kg / oz (000) 1,126 1,079
Price received - R/kg / $/oz 1,095 1,015
Total cash costs - R/kg / $/oz 617 619
Total production costs - R/kg / $/oz 759 789
Financial review
Adjusted gross profit - Rm / $m 359 218
(Loss) profit attributable to equity
shareholders - Rm / $m (187) 157
- cents/share (51) 43
Adjusted headline earnings - Rm / $m 129 61
- cents/share 35 17
Cash flow from operating activities - Rm / $m 386 179
Capital expenditure - Rm / $m 226 171
Six months
ended ended
Jun Jun
2010 2009
US dollar / Imperial
Operating review
Gold
Produced - kg / oz (000) 2,205 2,230
Price received - R/kg / $/oz 1,056 878
Total cash costs - R/kg / $/oz 618 458
Total production costs - R/kg / $/oz 774 583
Financial review
Adjusted gross profit - Rm / $m 578 584
(Loss) profit attributable to equity
shareholders - Rm / $m (30) 299
- cents/share (8) 83
Adjusted headline earnings - Rm / $m 190 317
- cents/share 52 88
Cash flow from operating activities - Rm / $m 566 498
Capital expenditure - Rm / $m 397 502
$ represents US dollar, unless otherwise stated.
Rounding of figures may result in computational discrepancies.
Operations at a glance
for the quarter ended 30 June 2010
Production
oz (000) % Variance 1
SOUTH AFRICA 447 16
Great Noligwa 34 17
Kopanang 78 11
Moab Khotsong 70 11
Tau Lekoa 27 -
Mponeng 136 18
Savuka 2 100
TauTona 62 41
Surface Operations 40 18
CONTINENTAL AFRICA 371 (1)
Ghana
Iduapriem 50 150
Obuasi 77 (21)
Guinea
Siguiri - Attributable 85% 68 (7)
Mali
Morila - Attributable 40% 2 23 (8)
Sadiola - Attributable 41% 2 29 (3)
Yatela - Attributable 40% 2 14 (48)
Namibia
Navachab 18 -
Tanzania
Geita 90 7
Non-controlling interests, exploration
and other
AUSTRALASIA 87 (24)
Australia
Sunrise Dam 87 (24)
Exploration and other
AMERICAS 221 7
Argentina
Cerro Vanguardia - Attributable 92.50% 48 2
Brazil
AngloGold Ashanti Brasil Mineracao 78 (5)
Serra Grande - Attributable 50% 18 (10)
United States of America
Cripple Creek & Victor 77 33
Non-controlling interests, exploration and other
OTHER
Sub-total 1,126 4
Equity accounted investments included above
AngloGold Ashanti
Total cash costs
$/oz % Variance 1
SOUTH AFRICA 560 (11)
Great Noligwa 829 (12)
Kopanang 542 (7)
Moab Khotsong 557 (3)
Tau Lekoa 927 3
Mponeng 408 (7)
Savuka (116) (102)
TauTona 682 (12)
Surface Operations 478 (8)
CONTINENTAL AFRICA 702 11
Ghana
Iduapriem 622 (21)
Obuasi 717 28
Guinea
Siguiri - Attributable 85% 623 10
Mali
Morila - Attributable 40% 2 696 12
Sadiola - Attributable 41% 2 631 11
Yatela - Attributable 40% 2 721 52
Namibia
Navachab 735 12
Tanzania
Geita 833 1
Non-controlling interests, exploration
and other
AUSTRALASIA 1,063 14
Australia
Sunrise Dam 1,028 14
Exploration and other
AMERICAS 416 -
Argentina
Cerro Vanguardia - Attributable 92.50% 345 (12)
Brazil
AngloGold Ashanti Brasil Mineracao 381 3
Serra Grande - Attributable 50% 502 11
United States of America
Cripple Creek & Victor 465 (4)
Non-controlling interests, exploration and other
OTHER
Sub-total 617 -
Equity accounted investments included above
AngloGold Ashanti
Adjusted
gross profit (loss)
$m $m Variance 1
SOUTH AFRICA 154 103
Great Noligwa 2 10
Kopanang 24 13
Moab Khotsong 13 12
Tau Lekoa 4 2
Mponeng 77 32
Savuka 2 13
TauTona 9 13
Surface Operations 22 7
CONTINENTAL AFRICA 102 (2)
Ghana
Iduapriem 14 12
Obuasi 16 (14)
Guinea
Siguiri - Attributable 85% 25 -
Mali
Morila - Attributable 40% 2 11 -
Sadiola - Attributable 41% 2 15 -
Yatela - Attributable 40% 2 7 (9)
Namibia
Navachab 5 1
Tanzania
Geita 2 1
Non-controlling interests, exploration
and other 7 8
AUSTRALASIA - 3
Australia
Sunrise Dam 4 3
Exploration and other (3) 1
AMERICAS 126 23
Argentina
Cerro Vanguardia - Attributable 92.50% 30 11
Brazil
AngloGold Ashanti Brasil Mineracao 41 2
Serra Grande - Attributable 50% 6 (2)
United States of America
Cripple Creek & Victor 38 11
Non-controlling interests, exploration and other 10 (1)
OTHER 11 6
Sub-total 393 133
Equity accounted investments included above (34) 8
AngloGold Ashanti 359 141
1 Variance June 2010 quarter on March 2010 quarter - increase (decrease).
2 Equity accounted joint ventures.
Rounding of figures may result in computational discrepancies.
Financial and Operating Report
OVERVIEW FOR THE QUARTER
OPERATING RESULTS FOR THE QUARTER
Production and total cash costs for the three months to 30 June were both
better than the guidance set by the company. Production rose 4% to 1.126Moz
from the previous quarter, while total cash costs were largely unchanged at
$617/oz. The improved performance was attributable to the recovery in
production in South Africa and Iduapriem in Ghana, the continued turnaround at
Cripple Creek & Victor in the US and Geita in Tanzania, as well as a strong
operating performance from Cerro Vanguardia in Argentina.
Guidance for the second quarter was 1.079Moz at a total cash cost of $650/oz
and an exchange rate of R7.40/$.
SAFETY
Tragically, eight fatal injuries were recorded during the quarter after five
colleagues lost their lives at the South African operations, two in Tanzania
and another in the Democratic Republic of the Congo. AngloGold Ashanti`s senior
management recommitted to the company`s goal of achieving `zero harm` across
its operations, with the launch of its Safety Transformation Blueprint. This
new strategy, to achieve the next quantum improvement in safety, will be
incorporated into the Project ONE operating model. The downward trend observed
in the Lost Time Injury Frequency Rate (LTIFR) during preceding years continued
into the second quarter, improving by 12% to 6.17 per million hours worked. An
analysis of injury reports show a proliferation of incidents between midnight
and the end of the night shift, when the human body is most susceptible to
fatigue. Work is currently underway to mitigate this risks in the workplace.
Siguiri, Yatela, Sadiola and Navachab remained free of lost time injuries
during the period under review.
OPERATING REVIEW
The South African operations produced 447,000oz at a total cash cost of $560/oz
in the second quarter of 2010, compared with 384,000oz at a total cash cost of
$626/oz the previous quarter. Strong volume gains and grade improvement across
each of the core operations contributed to the better performance as the new
management team implemented its turnaround strategy. At the Vaal River
operations, Great Noligwa showed a 17% improvement in production to 34,000oz
and a drop in total cash costs to $829/oz as the strategy of improving
productivity rates to return the mine to profitability continued. Kopanang and
Moab Khotsong were both beneficiaries of higher grades mined and registered 11%
production gains to 78,000oz at $542/oz and 70,000oz at $557/oz respectively.
The surface operations also improved yields amid a rise in volumes treated,
resulting in a 18% jump in output to 40,000oz and a 8% reduction in total cash
costs to $478/oz. Improved recoveries helped the company achieve a 24% rise in
uranium production to 387,000lb. At the West Wits operations, higher yield and
a better mine call factor at the flagship Mponeng operation led to an 18%
increase in production to 136,000oz, while total cash costs improved by 7% to
$408/oz. The resumption of normal operations at TauTona, following the halt for
an infrastructure inspection, led to a 41% rise in production to 62,000oz at a
total cash cost of $682/oz. Production at Savuka remained constrained at
2,000oz as rehabilitation work continued slower than anticipated. Options are
continually being reviewed for this asset going forward.
Continental Africa`s production declined marginally to 371,000oz at a total
cash cost of $702/oz, from 374,000oz at $630/oz in the previous quarter. The
principal reason for the drop was the lower production from Obuasi, where - as
stated earlier this year - steps were taken to improve water treatment,
resulting in a 21% decline in output to 77,000oz and a 28% rise in costs to
$717/oz. Iduapriem`s production rebounded and costs improved after a shutdown
for much of the preceding quarter for improvements to tailings storage. Grade
declines impacted production at Yatela and Morila in Mali and Siguiri in
Guinea, though this was partly offset at the latter by higher volumes. The
turnaround at Geita, in Tanzania, continued despite stoppages related to the
collision of two mining trucks during the quarter, with a 7% gain in production
to 90,000oz and total cash costs little changed at $833/oz.
Australia`s production declined to 87,000oz at $1,063/oz, from 114,000oz at
$931/oz the previous quarter. The decline in production from Sunrise Dam was in
line with the plan. The total cash cost figure at the operation included
$326/oz non-cash charge for deferred stripping.
The Americas production increased to 221,000oz at a total cash cost of $416/oz,
from 207,000oz at $416/oz the previous quarter. The chief contributor to
improved production was Cripple Creek & Victor, where the strategy of stacking
higher grade ore closer to the pad liner helped realise a 33% increase in
output to 77,000oz, along with a 4% drop in total cash costs to $465/oz. Higher
by-product credits at Cerro Vanguardia, where silver production rose 5%, helped
the mine achieve a 12% drop in total cash costs to $345/oz, the lowest in the
group. Gold production at the mine rose 2% to 48,000oz. In Brazil, lower grades
and the annual maintenance shutdown of the acid plant caused a 5% drop in
production at AngloGold Ashanti Brasil Mineracao to 78,000oz. The total cash
cost increase was well contained at 3% to $381/oz, despite higher power and
maintenance service expenses. Serra Grande`s production slipped by 10% to
18,000oz due to lower grades.
FINANCIAL AND CORPORATE REVIEW
Adjusted headline earnings more than doubled to $129m, or 35 US cents per
share, from $61m, or 17 US cents the previous quarter. This increase was due
largely to the increased production and strong cost control, as well as an
increase in the received price. An interim dividend of 65 South African cents
per share has been declared, an 8% increase on last year`s interim dividend.
The average gold price received during the quarter rose 8% to $1,095/oz. This
represents an 8.6% discount to the average spot price over the period of
$1,198/oz, within the guided range of 8% to 10%. The company`s overall hedge
commitments reduced by 330,000oz to 3.22Moz, which is less than three quarters`
production at current rates.
The company continued to improve the strength of its balance sheet given the
increase in operating cash flow and the two-part, $2bn debt package finalised
in May which comprised a renewed revolving credit facility of $1bn as well as a
$300m 30-year bond and a $700m 10-year bond. Net debt declined by 10% to $834m,
while the ratio of net debt to EBITDA (earnings before interest, tax and
depreciation) was 0.5 times.
The company recorded a loss attributable to equity shareholders of $187m
compared with a profit of $157m the previous quarter. The June quarter includes
unrealised losses on non-hedge derivatives of $380m pre-tax compared with a
profit of $82m pre-tax the previous quarter.
PROJECTS
AngloGold Ashanti incurred capital expenditure of $226m during the quarter, of
which $64m was spent on growth projects. Of the growth-related capital, $33m
was spent in the Americas, $20m in Continental Africa, $9m in South Africa and
$3m in Australasia.
The feasibility study at the Tropicana Gold Project, 330km east-northeast of
Kalgoorlie in Western Australia, is nearing completion. AngloGold Ashanti is
the manager of the project and owns a 70% stake, while Independence Group NL
owns the balance. Finalisation of capital and operating costs are in progress
and development of the implementation schedule and construction contracting
strategies are underway. The study is scheduled for completion by the fourth
quarter, when the partners will make a development decision. In July, the
Western Australia Environmental Protection Agency (EPA) released its report and
recommendation on the project and it is anticipated that the State and Federal
Ministers will announce their decision by year-end. Should the necessary
regulatory and board approvals be obtained by year-end, construction will start
in early 2011, with gold production to begin in the first half of 2013.
Scoping studies will be completed in the second half of the year at both Havana
Deeps deposit and at the Boston Shaker discovery, about 500m northeast of
Tropicana. Boston Shaker has now been defined over a 700m strike length and is
open down dip. It is expected that this work will add to resources in the
second half of 2010. (Refer exploration section of report for additional detail
on drilling results for the Tropicana district).
Detailed engineering on the Corrego do Sitio Project in Brazil commenced
immediately after the project was approved in May. Underground development by
AngloGold Ashanti`s in-house teams is progressing to schedule and environmental
licenses have been obtained for the crushing plant, ore storage facility, the
second portal and effluent treatment. The contract to refurbish and upgrade the
Sao Bento plant is currently in AngloGold Ashanti`s procurement process, while
the contracts for the design and manufacture of the autoclaves have been
awarded.
Randgold Resources has announced their decision to accelerate the proposed
start to the development of the Kibali Project, located in the northeast
Democratic Republic of the Congo. Pre-construction preparations have run ahead
of plan given positive interaction with local communities and rapid development
of associated infrastructure, allowing the partners to bring the start of
construction forward by six months to mid-2011. The project is on track to pour
its first gold in January 2014. An updated feasibility study, which will
optimise the mining plan and the size of the plant, is on track for completion
by the end of this year. Randgold, the operator of Kibali, and AngloGold
Ashanti each have an effective 45% stake in the project, while OKIMO holds the
balance. (Refer exploration section for an update on exploration at Mongbwalu).
EXPLORATION
Total exploration expenditure during the second quarter, inclusive of
expenditure at equity accounted joint ventures, was $72m ($26m on brownfields,
$26m on greenfields and $20m on pre-feasibility studies), compared with $48m
the previous quarter ($17m on brownfields, $17m on greenfields and $14m on
pre-feasibility studies). The following are highlights from the company`s
greenfields exploration activities during the quarter. More detail on the
brownfields programme can be seen at www.anglogoldashanti.com.
About 82,500m of greenfields exploration drilling was completed at priority
sites and used to delineate new targets in Australia, Canada, Guinea and the
Solomon Islands. This was more than double the amount drilled the previous
quarter. Expenditure rose 53% to $26m.
In Australasia, scoping level economic studies will be completed on the Boston
Shaker and Havana Deeps resource additions during the second half of the year.
Significant gold results at the Boston Shaker deposit, about 500m northeast of
the Tropicana resource, included 32m @ 3.71g/t Au from 181m, 5m @ 3.5g/t Au
from 61m and 9m @ 7.44g/t Au from 51m. The Havana Deeps prospect represents the
potential higher-grade underground extension of the Havana open-pit ore body.
Exploration of this zone will complement the Tropicana feasibility study.
Havana deeps drilling results included 11m @ 3.77g/t Au from 477m, 14m @
5.84g/t Au from 558m, 14m @ 4.75g/t Au from 663m and 14m @ 4.19g/t Au from
387m. Significant results were also returned from aircore drilling of several
regional prospects including Black Dragon, 25km northwest of Tropicana, with
gold results up to 8m @ 0.73g/t Au and from Voodoo Child, 50km north of
Tropicana, including 12m @ 2.5g/t Au from 1m and 26m @ 0.68g/t Au from 11m.
In the Americas, where the company has more than 60,000km2 of exploration
tenements in some of the most prospective gold belts, early stage exploration
took place in Colombia, Brazil, Argentina, the US and Canada.
Diamond drilling at the Malrok prospect, on the Baffin Island Gold Project JV
with Commander Resources in Canada, encountered thick intersections of altered
and structurally complex iron formation units in a number of holes drilled
down-plunge and down-dip from gold-bearing iron formation intercepts drilled in
2004. At least three separate iron formations, including one previously
undiscovered - were intersected during a 3,300m drilling campaign. The
gold-bearing iron formations at Malrok consist of iron-rich silicates with
pyrrhotite, arsenopyrite and erratically distributed fine grains of free gold.
Drilling also commenced 40km east of Malrok at the Kanosak prospect, a
300m-wide, 3.5km-long trend consisting of gold-bearing quartz veins and
alteration open to extension. Channel sampling over the past two years have
confirmed that gold values occur in quartz-arsenopyrite veins, the arsenopyrite
bearing host sedimentary rocks and localised shear zones. Previously reported
results included gold values of up to 9.32g/t Au over 5.87m and 91.06g/t Au
over 1.6m.
Regional exploration work in Colombia was also undertaken during the period and
included mapping and sampling in the La Colosa regional project area of
approximately 600km2, the southern Cajamarca region and the La Llanada region.
In Continental Africa, AngloGold Ashanti, in partnership with OKIMO (13.78%),
is scheduled to complete a feasibility study by the first quarter of next year
on the 2.93Moz Mongbwalu project in the Democratic Republic of the Congo. A
20,000m combined drilling programme is currently underway over Mongbwalu-Adidi
and a further 5,000m programme is planned for early phase drill-testing of
regional targets in the third quarter. Other regional work is ongoing and
5,886km2 of exploration licenses previously held by OKIMO, are being
transferred to this joint venture. Additional exploration took place on blocks
2,3 and 4 in Guinea, as well as with joint venture partners in Gabon and
Tanzania.
In the Middle East & North Africa, AngloGold Ashanti`s exploration and related
activities were conducted through the Strategic Alliance with Thani Investments
LLC and included Phase 2 sampling and mapping in Egypt. At the Hodine
concession, the Hutite orogenic gold prospect has been mapped and sampled in
detail. Encouraging results were received and drilling is scheduled to commence
in the third quarter. In Eritrea, where two exploration licences totalling
1,870km2 were granted to the alliance, exploration will begin in the third
quarter. Project generation has actively taken place elsewhere in the region,
including Saudi Arabia.
OUTLOOK
AngloGold Ashanti`s production and total cash cost guidance for the full year
2010 remains unchanged at 4.5Moz to 4.7Moz at a total cash cost of $590/oz to
$615/oz. This assumes an average exchange rate of R7.70/$ and an oil price of
$75/barrel.
Third quarter production is expected to be 1.150Moz at a total cash cost of
$645/oz, assuming an exchange rate of R7.55/$. This reflects the impact of the
winter power tariff and mid-year wage increases in South Africa.
Notes:
- All references to price received include realised non-hedge derivatives.
- All references to adjusted gross profit (loss) refers to gross profit (loss)
adjusted for unrealised non-hedge derivatives and other commodity contracts and
excludes hedge buy-back costs.
- In the case of joint venture and operations with non-controlling interests,
all production and financial results are attributable to AngloGold Ashanti.
- Rounding of figures may result in computational discrepancies.
Review of the Gold Market
GOLD PRICE MOVEMENT AND INVESTMENT MARKETS
Gold price data
The gold price averaged $1,198/oz during the quarter, 8% more than during the
previous three-month period amid a continued backdrop of heightened
sovereign-debt risk in Europe, with successive debt downgrades in Greece and
Portugal. As this contagion spread across Mediterranean countries, the equity
markets dropped and the euro traded sharply lower versus the dollar. Risk
aversion in the broader market sent bullion to a record $1,265/oz on 21 June
and also to new highs in euro and Brazilian real, highlighting the metal`s safe
haven qualities across several regions.
Investment
While the rate of inflows into exchange traded funds moderated year-on-year,
the 10 major ETFs still grew from 57Moz at the start of the quarter to a high
of 65Moz. ETF gold holdings now represent almost 80% of annual gold production.
Net long positions on the Comex peaked at 34Moz, a level last seen during the
fourth quarter of 2009.
The sovereign debt crisis underpinned investment demand in the US. During the
quarter, 191t were added to the GLD ETF and 13.4m contracts were added to
COMEX, 15% more than the previous quarter. American Eagles registered sales of
12.5t during the quarter, up from 8.4t the previous period. Gold investment in
the Middle East market did not experience a particularly notable second quarter
on the back of a reasonable first quarter.
Medallion and bar sales rose strongly in India, with anecdotal evidence
suggesting that, unlike the jewellery sector, investors showed robust demand
even as the price rose. This was further evidenced in large-scale registrations
for Jewellery Savings Schemes. Investment demand in China jumped by half
year-on-year and accounted for as much as 40% of the total gold off-take of
about 200t during the quarter. This was nearly equivalent to all of last year`s
investment-related purchases amid continued declines in the country`s stock
market and regulatory changes that have made property speculation more onerous.
Official sector
With three months remaining in the third Central Bank Sales Agreement, only 39t
of the 400t quota have been sold, comprised of sales by the International
Monetary Fund. The World Gold Council reports that official sector gold
holdings increased by 272t in the first quarter of 2010, with 180t from a
revision of Saudi Arabia`s gold holdings and the balance of 92t, which has been
accumulated by the official sector during the first quarter of the year.
Jewellery
In India the second quarter witnessed strong demand in the period leading up to
the Akshaya Thritiya festival in mid-May. Across India the festivities started
with the Baisakhi Vishu and the Bengali New Year festivities, which run from
mid-April. Most jewellers reported higher Akshaya Thritiya sales in volume
terms when compared to the same period last year. June is traditionally the
annual off-peak season for the Indian market and this year is no different with
demand slowing.
The increasing gold price took its toll on jewellery demand in India, with the
average price 5% higher in rupee terms. Consumer sentiment remained sluggish
during the off-peak season amid high price levels, relative volatility and the
high rate of inflation. Demand is expected to recover during the festive season
from August until November, which features Diwali-Dhanteras. Jewellery sales in
China showed single-digit percentage increase during the quarter, which is
traditionally a weak sales period in the country. China`s consumers appeared to
have adjusted to the new price floor around $1,200/oz, but retailers and
manufacturers remained more circumspect than during the first quarter.
Consumers in the US, however, suffered `sticker shock` at the higher prices and
retailers continued to hold smaller inventories.
Hedge position
As at 30 June 2010, AngloGold Ashanti had the following total outstanding
commitments against future production. The total ounces committed on this date
was 3.22Moz or 100t (as at 31 March 2010: 3.55Moz or 110t) and the total net
delta tonnage of the hedge on this date was 3.06Moz or 95t (at 31 March 2010:
3.35Moz or 104t).
The marked-to-market value of all hedge transactions making up the hedge
positions in the table below was a negative $2.41bn (negative R18.40bn) as at
30 June 2010 (at 31 March 2010; negative $2.07bn - negative R15.09bn). The
value was based on a gold price of $1,240.6/oz, exchange rates of R7.63/$ and
A$/$0.8362 and the prevailing market interest rates and volatilities at the
time.
As at 10 August 2010, the marked-to-market value of the hedge book was a
negative $2.16bn (negative R15.61bn), based on a gold price of $1,197.3/oz and
exchange rates of R7.23/$ and A$/$0.9132 and the prevailing market interest
rates and volatilities at the time.
These marked-to-market valuations are in no way predictive of the future value
of the hedge position nor of future impact on the revenue of the company. The
valuation represents the cost of buying all hedge contracts at the time of
valuation, at market prices and rates available at the time.
The following table indicates the group`s commodity hedge position at 30 June
2010:
Year 2010 2011
US DOLLAR/GOLD
Forward contracts Amount (oz) * (538,542) 60,000
US$/oz *$1,128 $227
Put options sold Amount (oz) 177,930 148,000
US$/oz $938 $623
Call options sold Amount (oz) 492,340 776,800
US$/oz $588 $554
RAND/GOLD
Forward contracts Amount (oz) *(20,000)
ZAR/oz *R7,064
Put options sold Amount (oz) 20,000
ZAR/oz R7,525
Call options sold Amount (oz) 20,000
ZAR/oz R8,350
** Total net gold: Delta (oz) 61,073 (820,484)
Committed (oz) 46,202 (836,800)
Year 2012 2013
US DOLLAR/GOLD
Forward contracts Amount (oz) 122,500 119,500
US$/oz $418 $477
Put options sold Amount (oz) 85,500 60,500
US$/oz $538 $440
Call options sold Amount (oz) 811,420 574,120
US$/oz $635 $601
RAND/GOLD
Forward contracts Amount (oz)
ZAR/oz
Put options sold Amount (oz)
ZAR/oz
Call options sold Amount (oz)
ZAR/oz
** Total net gold: Delta (oz) (888,798) (661,884)
Committed (oz) (933,920) (693,620)
Year 2014 2015 Total
US DOLLAR/GOLD
Forward contracts Amount (oz) 91,500 * (145,042)
US$/oz $510 * $3,025
Put options sold Amount (oz) 60,500 532,430
US$/oz $450 $674
Call options sold Amount (oz) 680,470 29,000 3,364,150
US$/oz $604 $670 $598
RAND/GOLD
Forward contracts Amount (oz) *(20,000)
ZAR/oz *R7,064
Put options sold Amount (oz) 20,000
ZAR/oz R7,525
Call options sold Amount (oz) 20,000
ZAR/oz R8,350
** Total net gold: Delta (oz) (726,053) (26,462) (3,062,608)
Committed (oz) (771,970) (29,000) (3,219,108)
The following table indicates the group`s currency hedge position at 30 June
2010:
Year 2010 2011 2012
RAND DOLLAR
Call options sold Amount ($000) 20,000
US$/R R8,08
A DOLLAR
Put options purchased Amount ($000) 20,000
A$/US$ $0,82
Put options sold Amount ($000) 20,000
A$/US$ $0,86
Call options sold Amount ($000) 20,000
A$/US$ $0,79
Year 2013 2014 2015 Total
RAND DOLLAR
Call options sold Amount ($000) 20,000
US$/R R8,08
A DOLLAR
Put options purchased Amount ($000) 20,000
A$/US$ $0,82
Put options sold Amount ($000) 20,000
A$/US$ $0,86
Call options sold Amount ($000) 20,000
A$/US$ $0,79
* Represents a net long gold position and net short US Dollars and Rands
resulting from both forward sales and purchases for the period.
** The Delta of the hedge position indicated above is the equivalent gold
position that would have the same marked-to-market sensitivity for a small
change in the gold price. This is calculated using the Black-Scholes options
formula with the ruling market prices, interest rates and volatilities as at 30
June 2010.
Fair value of derivative analysis by accounting designation at 30 June 2010:
Non-hedge
Figures in millions accounted
Total
US Dollar
Commodity option contracts (2,179)
Forward sale commodity contracts (246)
Total hedging contracts (2,425)
Embedded derivatives (1)
Warrants on shares 2
Option component of convertible bond (111)
Total derivatives (2,535)
Credit risk adjustment (106)
Total derivatives - before credit risk adjustment (2,641)
Rounding of figures may result in computational discrepancies.
Group income statement
Quarter Quarter
ended ended
June March
2010 2010
SA Rand million Notes Unaudited Unaudited
Revenue 2 9,918 8,453
Gold income 9,625 8,222
Cost of sales 3 (6,099) (6,060)
(Loss) gain on non-hedge derivatives and
other
commodity contracts 4 (3,625) 59
Gross (loss) profit (99) 2,221
Corporate administration and other expenses (371) (282)
Market development costs (21) (19)
Exploration costs (391) (277)
Other operating expenses 5 (15) (56)
Operating special items 6 (89) (174)
Operating (loss) profit (986) 1,413
Interest received 70 65
Exchange (loss) gain (1) 38
Fair value adjustment on option component of
convertible bond 129 356
Finance costs and unwinding of obligations 7 (323) (239)
Share of equity accounted investments` profit 89 163
(Loss) profit before taxation (1,022) 1,796
Taxation 8 (264) (558)
(Loss) profit for the period (1,286) 1,238
Allocated as follows:
Equity shareholders (1,360) 1,150
Non-controlling interests 74 88
(1,286) 1,238
Basic (loss) profit per ordinary share (cents) 1 (371) 313
Diluted (loss) profit per ordinary share (cents) 2 (371) 313
Quarter Six months Six months
ended ended ended
June June June
2009 2010 2009
SA Rand million Unaudited Unaudited Unaudited
Revenue 6,817 18,371 13,641
Gold income 6,481 17,847 12,999
Cost of sales (5,212) (12,159) (10,833)
(Loss) gain on non-hedge
derivatives and other
commodity contracts 1,783 (3,566) 1,987
Gross (loss) profit 3,051 2,122 4,153
Corporate administration and other
expenses (300) (653) (651)
Market development costs (25) (41) (52)
Exploration costs (243) (668) (465)
Other operating expenses (51) (71) (102)
Operating special items 739 (262) 679
Operating (loss) profit 3,171 427 3,562
Interest received 92 134 190
Exchange (loss) gain 285 36 301
Fair value adjustment on option
component of convertible bond (123) 485 (123)
Finance costs and unwinding of
obligations (322) (561) (573)
Share of equity accounted
investments` profit 160 253 383
(Loss) profit before taxation 3,263 774 3,739
Taxation (915) (822) (1,299)
(Loss) profit for the period 2,348 (48) 2,440
Allocated as follows:
Equity shareholders 2,304 (210) 2,305
Non-controlling interests 44 162 135
2,348 (48) 2,440
Basic (loss) profit per ordinary
share (cents) 1 642 (57) 643
Diluted (loss) profit per ordinary
share (cents) 2 641 (57) 641
1 Calculated on the basic weighted average number of ordinary shares.
2 Calculated on the diluted weighted average number of ordinary shares.
Rounding of figures may result in computational discrepancies.
Group income statement
Quarter Quarter
ended ended
June March
2010 2010
US Dollar million Notes Unaudited Unaudited
Revenue 2 1,314 1,126
Gold income 1,275 1,095
Cost of sales 3 (810) (807)
(Loss) gain on non-hedge derivatives and
other
commodity contracts 4 (486) 13
Gross (loss) profit (21) 301
Corporate administration and other expenses (49) (37)
Market development costs (2) (3)
Exploration costs (52) (37)
Other operating expenses 5 (2) (8)
Operating special items 6 (12) (23)
Operating (loss) profit (138) 193
Interest received 9 9
Exchange gain - 4
Fair value adjustment on option component
of convertible bond 17 48
Finance costs and unwinding of obligations 7 (43) (32)
Share of equity accounted investments` profit 11 22
(Loss) profit before taxation (144) 244
Taxation 8 (33) (76)
(Loss) profit for the period (177) 168
Allocated as follows:
Equity shareholders (187) 157
Non-controlling interests 10 11
(177) 168
Basic (loss) profit per ordinary share (cents) 1 (51) 43
Diluted (loss) profit per ordinary share (cents) 2 (51) 43
Quarter Six months Six months
ended ended ended
June June June
2009 2010 2009
US Dollar million Unaudited Unaudited Unaudited
Revenue 814 2,440 1,503
Gold income 773 2,370 1,431
Cost of sales (617) (1,617) (1,185)
(Loss) gain on non-hedge
derivatives and other
commodity contracts 231 (473) 252
Gross (loss) profit 387 280 498
Corporate administration and other
expenses (36) (86) (71)
Market development costs (3) (5) (6)
Exploration costs (29) (89) (51)
Other operating expenses (6) (10) (11)
Operating special items 92 (35) 86
Operating (loss) profit 406 55 445
Interest received 11 18 21
Exchange gain 36 5 38
Fair value adjustment on option
component of
convertible bond (15) 64 (15)
Finance costs and unwinding of
obligations (39) (75) (64)
Share of equity accounted
investments` profit 19 33 41
(Loss) profit before taxation 418 100 465
Taxation (113) (109) (152)
(Loss) profit for the period 305 (9) 313
Allocated as follows:
Equity shareholders 299 (30) 299
Non-controlling interests 5 21 14
305 (9) 313
Basic (loss) profit per ordinary
share (cents) 1 83 (8) 83
Diluted (loss) profit per ordinary
share (cents) 2 83 (8) 83
1 Calculated on the basic weighted average number of ordinary shares.
2 Calculated on the diluted weighted average number of ordinary shares.
Rounding of figures may result in computational discrepancies.
Group statement of comprehensive income
Quarter Quarter Quarter
ended ended ended
June March June
2010 2010 2009
SA Rand million Unaudited Unaudited Unaudited
(Loss) profit for the period (1,286) 1,238 2,348
Exchange differences on translation
of foreign operations 373 (280) (2,518)
Share of equity accounted
investments` other
comprehensive income (4) - -
Net gain (loss) on cash flow hedges 1 (1) 321
Net loss on cash flow hedges removed from
equity and reported in gold income - 279 322
Hedge ineffectiveness on cash flow hedges - - 7
Realised gains on hedges of capital items 1 1 36
Deferred taxation thereon - (98) (176)
2 181 510
Net gain (loss) on available for sale
financial assets 144 (45) (47)
Release on disposal of available for sale
financial assets (41) - -
Deferred taxation thereon 12 1 (1)
115 (44) (48)
Other comprehensive income (expense)
her omprehensiv income expense)
for the period net of tax 486 (143) (2,056)
Total comprehensive (expense) income
for the period net of tax (800) 1,095 292
Allocated as follows:
Equity shareholders (874) 1,007 244
Non-controlling interests 74 88 48
(800) 1,095 292
Six months Six months
ended ended
June June
2010 2009
SA Rand million Unaudited Unaudited
(Loss) profit for the period (48) 2,440
Exchange differences on translation of foreign
operations 93 (2,352)
Share of equity accounted investments` other
comprehensive income (4) -
Net gain (loss) on cash flow hedges - 150
Net loss on cash flow hedges removed from
equity and reported in gold income 279 852
Hedge ineffectiveness on cash flow hedges - 43
Realised gains on hedges of capital items 2 21
Deferred taxation thereon (98) (267)
183 799
Net gain (loss) on available for sale financial assets 99 36
Release on disposal of available for sale
financial assets (41) -
Deferred taxation thereon 13 (4)
71 32
Other comprehensive income (expense)
her omprehensiv income expense)
for the period net of tax 343 (1,521)
Total comprehensive (expense) income for the
period net of tax 295 919
Allocated as follows:
Equity shareholders 133 774
Non-controlling interests 162 145
295 919
Rounding of figures may result in computational discrepancies.
Group statement of comprehensive income
Quarter Quarter Quarter
ended ended ended
June March June
2010 2010 2009
US Dollar million Unaudited Unaudited Unaudited
(Loss) profit for the period (177) 168 305
Exchange differences on translation
of foreign operations (83) 22 302
Share of equity accounted
investments` other
comprehensive income (1) - -
Net gain on cash flow hedges - - 33
Net loss on cash flow hedges removed from
equity and reported in gold income - 37 39
Hedge ineffectiveness on cash flow hedges - - 2
Realised gains on hedges of capital items - - 4
Deferred taxation thereon - (13) (24)
- 24 54
Net gain (loss) on available for sale
financial assets 20 (6) (4)
Release on disposal of available for
sale financial assets (6) - -
Deferred taxation thereon 2 - -
16 (6) (4)
Other comprehensive (expense) income
for the period net of tax (68) 40 352
Total comprehensive (expense) income
for the period net of tax (245) 208 657
Allocated as follows:
Equity shareholders (255) 197 652
Non-controlling interests 10 11 5
(245) 208 657
Six months Six months
ended ended
June June
2010 2009
US Dollar million Unaudited Unaudited
(Loss) profit for the period (9) 313
Exchange differences on translation of foreign
operations (61) 288
Share of equity accounted investments` other
comprehensive income (1) -
Net gain on cash flow hedges - 16
Net loss on cash flow hedges removed from
equity and reported in gold income 37 93
Hedge ineffectiveness on cash flow hedges - 5
Realised gains on hedges of capital items - 2
Deferred taxation thereon (13) (33)
24 83
Net gain (loss) on available for sale financial assets 14 4
Release on disposal of available for sale
financial assets (6) -
Deferred taxation thereon 2 -
10 4
Other comprehensive (expense) income
for the period net of tax (28) 375
Total comprehensive (expense) income
for the period net of tax (37) 688
Allocated as follows:
Equity shareholders (58) 673
Non-controlling interests 21 15
(37) 688
Rounding of figures may result in computational discrepancies.
Group statement of financial position
As at As at
June March
2010 2010
SA Rand million Note Unaudited Unaudited
ASSETS
Non-current assets
Tangible assets 43,625 42,476
Intangible assets 1,272 1,309
Investments in associates and equity
accounted joint ventures 4,559 4,795
Other investments 1,512 1,315
Inventories 2,422 2,485
Trade and other receivables 1,022 867
Derivatives 19 19
Deferred taxation 28 349
Cash restricted for use 345 364
Other non-current assets 102 99
54,906 54,078
Current assets
Inventories 6,061 5,216
Trade and other receivables 1,595 1,517
Derivatives 1,148 1,517
Current portion of other non-current assets 2 2
Cash restricted for use 106 118
Cash and cash equivalents 6,607 5,346
15,519 13,716
Non-current assets held for sale 653 665
16,172 14,381
TOTAL ASSETS 71,078 68,459
EQUITY AND LIABILITIES
Share capital and premium 11 40,057 39,884
Retained earnings and other reserves (18,414) (17,465)
Non-controlling interests 939 956
Total equity 22,582 23,375
Non-current liabilities
Borrowings 12,556 4,809
Environmental rehabilitation and other provisions 3,459 3,383
Provision for pension and post-retirement benefits 1,189 1,181
Trade, other payables and deferred income 150 144
Derivatives 852 941
Deferred taxation 5,200 5,661
23,406 16,119
Current liabilities
Current portion of borrowings 185 7,095
Trade, other payables and deferred income 4,065 3,867
Derivatives 19,646 16,674
Taxation 1,134 1,271
25,030 28,907
Non-current liabilities held for sale 60 58
25,090 28,965
Total liabilities 48,496 45,084
TOTAL EQUITY AND LIABILITIES 71,078 68,459
Net asset value - cents per share 6,174 6,386
As at As at
December June
2009 2009
SA Rand million Audited Unaudited
ASSETS
Non-current assets
Tangible assets 43,263 37,111
Intangible assets 1,316 1,264
Investments in associates and equity accounted joint
ventures 4,758 1,805
Other investments 1,302 820
Inventories 2,508 2,432
Trade and other receivables 788 696
Derivatives 40 15
Deferred taxation 451 390
Cash restricted for use 394 377
Other non-current assets 63 31
54,883 44,941
Current assets
Inventories 5,102 5,212
Trade and other receivables 1,419 3,534
Derivatives 2,450 3,551
Current portion of other non-current assets 3 2
Cash restricted for use 87 110
Cash and cash equivalents 8,176 17,768
17,237 30,177
Non-current assets held for sale 650 669
17,887 30,846
TOTAL ASSETS 72,770 75,787
EQUITY AND LIABILITIES
Share capital and premium 39,834 37,547
Retained earnings and other reserves (18,276) (13,570)
Non-controlling interests 966 792
Total equity 22,524 24,768
Non-current liabilities
Borrowings 4,862 12,857
Environmental rehabilitation and other provisions 3,351 3,492
Provision for pension and post-retirement benefits 1,179 1,279
Trade, other payables and deferred income 108 111
Derivatives 1,310 1,215
Deferred taxation 5,599 6,032
16,409 24,986
Current liabilities
Current portion of borrowings 9,493 7,846
Trade, other payables and deferred income 4,332 4,014
Derivatives 18,770 13,011
Taxation 1,186 1,098
33,781 25,969
Non-current liabilities held for sale 56 64
33,837 26,033
Total liabilities 50,246 51,019
TOTAL EQUITY AND LIABILITIES 72,770 75,787
Net asset value - cents per share 6,153 6,916
Rounding of figures may result in computational discrepancies.
Group statement of financial position
As at As at
June March
2010 2010
US Dollar million Note Unaudited Unaudited
ASSETS
Non-current assets
Tangible assets 5,718 5,823
Intangible assets 167 180
Investments in associates and equity
accounted joint ventures 598 657
Other investments 198 180
Inventories 317 340
Trade and other receivables 134 119
Derivatives 2 3
Deferred taxation 4 48
Cash restricted for use 45 50
Other non-current assets 13 14
7,196 7,414
Current assets
Inventories 794 715
Trade and other receivables 209 208
Derivatives 150 208
Current portion of other non-current assets - -
Cash restricted for use 14 16
Cash and cash equivalents 866 733
2,033 1,880
Non-current assets held for sale 86 91
2,119 1,971
TOTAL ASSETS 9,315 9,385
EQUITY AND LIABILITIES
Share capital and premium 11 5,834 5,811
Retained earnings and other reserves (2,998) (2,738)
Non-controlling interests 123 131
Total equity 2,959 3,204
Non-current liabilities
Borrowings 1,646 659
Environmental rehabilitation and other provisions 453 464
Provision for pension and post-retirement benefits 156 162
Trade, other payables and deferred income 20 20
Derivatives 112 129
Deferred taxation 681 776
3,068 2,210
Current liabilities
Current portion of borrowings 24 973
Trade, other payables and deferred income 533 530
Derivatives 2,575 2,286
Taxation 148 174
3,280 3,963
Non-current liabilities held for sale 8 8
3,288 3,971
Total liabilities 6,356 6,181
TOTAL EQUITY AND LIABILITIES 9,315 9,385
Net asset value - cents per share 809 875
As at As at
December June
2009 2009
US Dollar million Audited Unaudited
ASSETS
Non-current assets
Tangible assets 5,819 4,813
Intangible assets 177 164
Investments in associates and equity accounted joint
ventures 640 234
Other investments 175 106
Inventories 337 315
Trade and other receivables 106 90
Derivatives 5 2
Deferred taxation 61 51
Cash restricted for use 53 49
Other non-current assets 8 4
7,381 5,829
Current assets
Inventories 686 676
Trade and other receivables 191 458
Derivatives 330 461
Current portion of other non-current assets - -
Cash restricted for use 12 14
Cash and cash equivalents 1,100 2,305
2,319 3,914
Non-current assets held for sale 87 87
2,406 4,001
TOTAL ASSETS 9,787 9,830
EQUITY AND LIABILITIES
Share capital and premium 5,805 5,508
Retained earnings and other reserves (2,905) (2,398)
Non-controlling interests 130 103
Total equity 3,030 3,212
Non-current liabilities
Borrowings 654 1,668
Environmental rehabilitation and other provisions 451 453
Provision for pension and post-retirement benefits 159 166
Trade, other payables and deferred income 14 14
Derivatives 176 158
Deferred taxation 753 782
2,207 3,241
Current liabilities
Current portion of borrowings 1,277 1,018
Trade, other payables and deferred income 582 521
Derivatives 2,525 1,687
Taxation 159 142
4,543 3,368
Non-current liabilities held for sale 7 8
4,550 3,376
Total liabilities 6,757 6,617
TOTAL EQUITY AND LIABILITIES 9,787 9,830
Net asset value - cents per share 828 897
Rounding of figures may result in computational discrepancies.
Group statement of cash flows
Quarter Quarter Quarter
ended ended ended
June March June
2010 2010 2009
SA Rand million Unaudited Unaudited Unaudited
Cash flows from operating activities
Receipts from customers 10,030 8,166 6,928
Payments to suppliers and employees (6,992) (6,640) (5,135)
Cash generated from operations 3,038 1,526 1,793
Dividends received from equity
accounted investments 488 117 421
Taxation paid (563) (317) (340)
Net cash inflow from operating
activities 2,963 1,326 1,874
Cash flows from investing activities
Capital expenditure (1,600) (1,267) (2,189)
Proceeds from disposal of tangible assets 4 16 7,156
Other investments acquired (127) (120) (33)
Acquisition of associates and equity
accounted joint ventures (99) (72) (9)
Proceeds on disposal of associate - 4 -
Loans advanced to associates and
equity accounted joint ventures (6) (17) -
Loans repaid from associates and
equity accounted joint ventures - - 3
Proceeds from disposal of investments 127 54 60
Decrease (increase) in cash
restricted for use 36 (3) 10
Interest received 56 59 88
Loans advanced (1) (37) (1)
Repayment of loans advanced - 1 1
Net cash (outflow) inflow from
investing activities (1,610) (1,382) 5,086
Cash flows from financing activities
Proceeds from issue of share capital 26 3 15
Share issue expenses - - (6)
Proceeds from borrowings 7,383 264 7,092
Repayment of borrowings (7,263) (2,642) (1,003)
Finance costs paid (301) (76) (245)
Dividends paid (182) (260) -
Net cash (outflow) inflow from
financing activities (337) (2,711) 5,853
Net increase (decrease) in cash and
cash equivalents 1,016 (2,767) 12,813
Translation 245 (63) (919)
Cash and cash equivalents at
beginning of period 5,346 8,176 5,874
Cash and cash equivalents at end of
period 6,607 5,346 17,768
Cash generated from operations
(Loss) profit before taxation (1,022) 1,796 3,263
Adjusted for:
Movement on non-hedge derivatives and
other commodity contracts 2,878 (672) (525)
Amortisation of tangible assets 1,173 1,267 1,095
Finance costs and unwinding of obligations 323 239 322
Environmental, rehabilitation and
other expenditure (18) 30 (27)
Operating special items 86 169 (733)
Amortisation of intangible assets 4 4 4
Deferred stripping 324 204 (263)
Fair value adjustment on option
component of convertible bond (129) (356) 123
Interest received (70) (65) (92)
Share of equity accounted
investments` profit (89) (163) (160)
Other non-cash movements 9 21 (285)
Movements in working capital (431) (948) (928)
3,038 1,526 1,793
Movements in working capital
(Increase) decrease in inventories (775) (97) 1,153
(Increase) decrease in trade and
other receivables (199) (302) 131
Increase (decrease) in trade and
other payables 543 (549) (2,212)
(431) (948) (928)
Six months Six months
ended ended
June June
2010 2009
SA Rand million Unaudited Unaudited
Cash flows from operating activities
Receipts from customers 18,196 13,332
Payments to suppliers and employees (13,632) (8,861)
Cash generated from operations 4,564 4,471
Dividends received from equity accounted investments 605 594
Taxation paid (880) (764)
Net cash inflow from operating activities 4,289 4,301
Cash flows from investing activities
Capital expenditure (2,867) (4,576)
Proceeds from disposal of tangible assets 20 7,173
Other investments acquired (248) (193)
Acquisition of associates and equity accounted
joint ventures (171) (9)
Proceeds on disposal of associate 4 -
Loans advanced to associates and equity accounted
joint ventures (23) -
Loans repaid from associates and equity accounted
joint ventures - 3
Proceeds from disposal of investments 181 225
Decrease (increase) in cash restricted for use 33 (94)
Interest received 116 186
Loans advanced (37) (1)
Repayment of loans advanced 1 1
Net cash (outflow) inflow from investing
activities (2,991) 2,716
Cash flows from financing activities
Proceeds from issue of share capital 29 130
Share issue expenses - (11)
Proceeds from borrowings 7,647 18,030
Repayment of borrowings (9,905) (11,138)
Finance costs paid (376) (655)
Dividends paid (443) (178)
Net cash (outflow) inflow from financing activities (3,048) 6,178
Net increase (decrease) in cash and cash equivalents (1,750) 13,195
Translation 181 (865)
Cash and cash equivalents at beginning of period 8,176 5,438
Cash and cash equivalents at end of period 6,607 17,768
Cash generated from operations
(Loss) profit before taxation 774 3,739
Adjusted for:
Movement on non-hedge derivatives and other
commodity contracts 2,206 1,095
Amortisation of tangible assets 2,440 2,356
Finance costs and unwinding of obligations 561 573
Environmental, rehabilitation and other expenditure 13 (11)
Operating special items 255 (672)
Amortisation of intangible assets 7 10
Deferred stripping 528 (575)
Fair value adjustment on option component of
convertible bond (485) 123
Interest received (134) (190)
Share of equity accounted investments` profit (253) (383)
Other non-cash movements 31 (202)
Movements in working capital (1,379) (1,393)
4,564 4,471
Movements in working capital
(Increase) decrease in inventories (872) 713
(Increase) decrease in trade and other receivables (501) (206)
Increase (decrease) in trade and other payables (6) (1,899)
(1,379) (1,393)
Rounding of figures may result in computational discrepancies.
Group statement of cash flows
Quarter Quarter Quarter
ended ended ended
June March June
2010 2010 2009
US Dollar million Unaudited Unaudited Unaudited
Cash flows from operating activities
Receipts from customers 1,332 1,086 811
Payments to suppliers and employees (934) (881) (575)
Cash generated from operations 398 205 236
Dividends received from equity
accounted investments 63 16 59
Taxation paid (75) (42) (40)
Net cash inflow from operating activities 386 179 255
Cash flows from investing activities
Capital expenditure (212) (169) (257)
Proceeds from disposal of tangible assets 1 2 893
Other investments acquired (17) (16) (5)
Acquisition of associates and equity
accounted joint ventures (13) (10) (1)
Proceeds on disposal of associate - 1 -
Loans advanced to associates and
equity accounted joint ventures (1) (2) -
Loans repaid from associates and
equity accounted joint ventures - - -
Proceeds from disposal of investments 17 7 8
Decrease (increase) in cash
restricted for use 5 - 1
Interest received 7 8 11
Loans advanced - (5) -
Repayment of loans advanced - - -
Net cash (outflow) inflow from
investing activities (213) (184) 650
Cash flows from financing activities
Proceeds from issue of share capital 3 - 3
Share issue expenses - - (1)
Proceeds from borrowings 995 35 856
Repayment of borrowings (963) (352) (111)
Finance costs paid (40) (10) (31)
Dividends paid (24) (35) -
Net cash (outflow) inflow from
financing activities (29) (362) 716
Net increase (decrease) in cash and
cash equivalents 144 (367) 1,621
Translation (11) - 71
Cash and cash equivalents at
beginning of period 733 1,100 613
Cash and cash equivalents at end of period 866 733 2,305
Cash generated from operations
(Loss) profit before taxation (144) 244 418
Adjusted for:
Movement on non-hedge derivatives and
other commodity contracts 387 (94) (81)
Amortisation of tangible assets 156 169 130
Finance costs and unwinding of obligations 43 32 39
Environmental, rehabilitation and
other expenditure (2) 4 (3)
Operating special items 11 23 (92)
Amortisation of intangible assets - - 1
Deferred stripping 43 27 (31)
Fair value adjustment on option
component of convertible bond (17) (48) 15
Interest received (9) (9) (11)
Share of equity accounted
investments` profit (11) (22) (19)
Other non-cash movements 1 3 (36)
Movements in working capital (60) (124) (94)
398 205 236
Movements in working capital
Increase in inventories (55) (33) (74)
Increase in trade and other receivables (17) (45) (44)
Increase (decrease) in trade and
other payables 12 (46) 24
(60) (124) (94)
Six months Six months
ended ended
June June
2010 2009
US Dollar million Unaudited Unaudited
Cash flows from operating activities
Receipts from customers 2,418 1,457
Payments to suppliers and employees (1,814) (953)
Cash generated from operations 604 504
Dividends received from equity accounted investments 79 77
Taxation paid (117) (83)
Net cash inflow from operating activities 566 498
Cash flows from investing activities
Capital expenditure (381) (499)
Proceeds from disposal of tangible assets 3 895
Other investments acquired (33) (21)
Acquisition of associates and equity accounted
joint ventures (23) (1)
Proceeds on disposal of associate 1 -
Loans advanced to associates and equity accounted
joint ventures (3) -
Loans repaid from associates and equity accounted
joint ventures - -
Proceeds from disposal of investments 24 25
Decrease (increase) in cash restricted for use 4 (9)
Interest received 15 20
Loans advanced (5) -
Repayment of loans advanced - -
Net cash (outflow) inflow from investing activities (398) 411
Cash flows from financing activities
Proceeds from issue of share capital 4 14
Share issue expenses - (1)
Proceeds from borrowings 1,029 1,961
Repayment of borrowings (1,315) (1,135)
Finance costs paid (50) (72)
Dividends paid (59) (18)
Net cash (outflow) inflow from financing activities (391) 749
Net increase (decrease) in cash and cash equivalents (223) 1,658
Translation (11) 72
Cash and cash equivalents at beginning of period 1,100 575
Cash and cash equivalents at end of period 866 2,305
Cash generated from operations
(Loss) profit before taxation 100 465
Adjusted for:
Movement on non-hedge derivatives and other
commodity contracts 293 84
Amortisation of tangible assets 324 258
Finance costs and unwinding of obligations 75 64
Environmental, rehabilitation and other expenditure 2 (1)
Operating special items 34 (85)
Amortisation of intangible assets 1 1
Deferred stripping 70 (62)
Fair value adjustment on option component of
convertible bond (64) 15
Interest received (18) (21)
Share of equity accounted investments` profit (33) (41)
Other non-cash movements 4 (28)
Movements in working capital (184) (144)
604 504
Movements in working capital
Increase in inventories (88) (108)
Increase in trade and other receivables (61) (76)
Increase (decrease) in trade and other payables (35) 41
(184) (144)
Rounding of figures may result in computational discrepancies.
Group statement of changes in equity
Cash
Share Other flow
capital & capital Retained hedge
SA Rand million premium reserves earnings reserve
Balance at December 2008 37,336 799 (22,765) (1,008)
Profit for the period 2,305
Comprehensive income (expense) 789
Total comprehensive income
(expense) - - 2,305 789
Shares issued 211
Share-based payment for
share awards 70
Dividends paid (178)
Translation (11) 127 20
Balance at June 2009 37,547 858 (20,511) (199)
Balance at December 2009 39,834 1,194 (25,739) (174)
(Loss) profit for the period (210)
Comprehensive (expense) income (4) 183
Total comprehensive
(expense) income - (4) (210) 183
Shares issued 223
Share-based payment for
share awards 4
Dividends paid (255)
Dividends of subsidiaries
Transfers to other reserves 26 (26)
Translation 9 (39)
Balance at June 2010 40,057 1,229 (26,243) (17)
US Dollar million
Balance at December 2008 5,485 85 (2,361) (107)
Profit for the period 299
Comprehensive income 82
Total comprehensive income - - 299 82
Shares issued 23
Share-based payment for
share awards 8
Dividends paid (18)
Translation 18 (14) (1)
Balance at June 2009 5,508 111 (2,094) (26)
Balance at December 2009 5,805 161 (2,744) (23)
(Loss) profit for the period (30)
Comprehensive (expense) income (1) 24
Total comprehensive
(expense) income - (1) (30) 24
Shares issued 29
Share-based payment for
share awards
Dividends paid (35)
Dividends of subsidiaries
Transfers to other reserves 3 (3)
Translation (2) 2
Balance at June 2010 5,834 161 (2,807) (2)
Available Foreign
for Actuarial currency
sale (losses) translation
SA Rand million reserve gains reserve Total
Balance at December 2008 (18) (347) 8,959 22,956
Profit for the period 2,305
Comprehensive income
(expense) 32 (2,352) (1,531)
Total comprehensive
income (expense) 32 - (2,352) 774
Shares issued 211
Share-based payment for
share awards 70
Dividends paid (178)
Translation 5 2 143
Balance at June 2009 19 (345) 6,607 23,976
Balance at December 2009 414 (285) 6,314 21,558
(Loss) profit for the period (210)
Comprehensive (expense) income 71 93 343
Total comprehensive
(expense) income 71 - 93 133
Shares issued 223
Share-based payment for
share awards 4
Dividends paid (255)
Dividends of subsidiaries -
Transfers to other reserves -
Translation 10 (20)
Balance at June 2010 495 (285) 6,407 21,643
US Dollar million
Balance at December 2008 (2) (37) (635) 2,428
Profit for the period 299
Comprehensive income 4 288 374
Total comprehensive income 4 - 288 673
Shares issued 23
Share-based payment for
share awards 8
Dividends paid (18)
Translation (8) (5)
Balance at June 2009 2 (45) (347) 3,109
Balance at December 2009 56 (38) (317) 2,900
(Loss) profit for the period (30)
Comprehensive (expense) income 10 (61) (28)
Total comprehensive
(expense) income 10 - (61) (58)
Shares issued 29
Share-based payment for
share awards -
Dividends paid (35)
Dividends of
subsidiaries -
Transfers to other reserves -
Translation (1) 1 -
Balance at June 2010 65 (37) (378) 2,836
Non-
controlling Total
SA Rand million interests equity
Balance at December 2008 790 23,746
Profit for the period 135 2,440
Comprehensive income (expense) 10 (1,521)
Total comprehensive income (expense) 145 919
Shares issued 211
Share-based payment for share awards 70
Dividends paid (178)
Translation (143) -
Balance at June 2009 792 24,768
Balance at December 2009 966 22,524
(Loss) profit for the period 162 (48)
Comprehensive (expense) income 343
Total comprehensive (expense) income 162 295
Shares issued 223
Share-based payment for share awards 4
Dividends paid (255)
Dividends of subsidiaries (209) (209)
Transfers to other reserves -
Translation 20 -
Balance at June 2010 939 22,582
US Dollar million
Balance at December 2008 83 2,511
Profit for the period 14 313
Comprehensive income 1 375
Total comprehensive income 15 688
Shares issued 23
Share-based payment for share awards 8
Dividends paid (18)
Translation 5 -
Balance at June 2009 103 3,212
Balance at December 2009 130 3,030
(Loss) profit for the period 21 (9)
Comprehensive (expense) income (28)
Total comprehensive (expense) income 21 (37)
Shares issued 29
Share-based payment for share awards -
Dividends paid (35)
Dividends of subsidiaries (28) (28)
Transfers to other reserves -
Translation -
Balance at June 2010 123 2,959
Rounding of figures may result in computational discrepancies.
Notes
for the quarter and six months ended 30 June 2010
1. Basis of preparation
The financial statements in this quarterly report have been prepared in
accordance with the historic cost convention except for certain financial
instruments which are stated at fair value. The group`s accounting policies
used in the preparation of these financial statements are consistent with those
used in the annual financial statements for the year ended 31 December 2009 and
revised International Financial Reporting Standards (IFRS) which are effective
1 January 2010, where applicable. Effective 1 January 2010 the Chief Operating
Decision Maker changed the reportable segments. Details are included in
Segmental reporting.
The financial statements of AngloGold Ashanti Limited have been prepared in
compliance with IAS34, JSE Listings Requirements and in the manner required by
the South African Companies Act, 1973 for the preparation of financial
information of the group for the quarter and six months ended 30 June 2010.
2. Revenue
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Gold income 9,625 8,222 6,481 17,847 12,999
By-products (note 3) 223 166 244 390 452
Interest received 70 65 92 134 190
9,918 8,453 6,817 18,371 13,641
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Gold income 1,275 1,095 773 2,370 1,431
By-products (note 3) 29 22 30 52 51
Interest received 9 9 11 18 21
1,314 1,126 814 2,440 1,503
3. Cost of sales
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Cash operating costs (4,969) (4,773) (4,385) (9,743) (9,110)
Insurance reimbursement 85 - - 85 -
By-products revenue (note 2) 223 166 244 390 452
(4,661) (4,607) (4,141) (9,268) (8,658)
Royalties (246) (189) (152) (435) (330)
Other cash costs (48) (37) (30) (85) (59)
Total cash costs (4,955) (4,832) (4,323) (9,787) (9,046)
Retrenchment costs (26) (52) (40) (78) (55)
Rehabilitation and
other non-cash costs (36) (86) (32) (122) (91)
Production costs (5,017) (4,971) (4,395) (9,987) (9,192)
Amortisation of tangible
assets (1,173) (1,267) (1,095) (2,440) (2,356)
Amortisation of intangible
assets (4) (4) (4) (7) (10)
Total production costs (6,193) (6,242) (5,495) (12,435) (11,558)
Inventory change 94 182 282 275 725
(6,099) (6,060) (5,212) (12,159) (10,833)
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Cash operating costs (659) (636) (520) (1,296) (998)
Insurance reimbursement 11 - - 11 -
By-products revenue (note 2) 29 22 30 52 51
(619) (614) (490) (1,233) (947)
Royalties (32) (25) (18) (58) (36)
Other cash costs (7) (5) (4) (11) (6)
Total cash costs (658) (644) (512) (1,302) (989)
Retrenchment costs (4) (7) (5) (10) (6)
Rehabilitation and other non-cash
costs (5) (12) (4) (16) (10)
Production costs (666) (663) (521) (1,329) (1,005)
Amortisation of tangible assets (156) (169) (130) (324) (258)
Amortisation of intangible assets - - (1) (1) (1)
Total production costs (822) (832) (652) (1,654) (1,264)
Inventory change 13 24 34 37 79
(810) (807) (617) (1,617) (1,185)
4. (Loss) gain on non-hedge derivatives and other commodity contracts
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
(Loss) gain on
realised non-hedge derivatives (803) (524) 1,243 (1,327) 3,109
(Loss) gain on unreaslied non-
hedge derivatives (2,822) 583 540 (2,239) (1,122)
(3,625) 59 1,783 (3,566) 1,987
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
(Loss) gain on realised
non-hedge derivatives (107) (69) 149 (176) 338
(Loss) gain on unreaslied non-
hedge derivatives (380) 82 82 (297) (86)
(486) 13 231 (473) 252
Rounding of figures may result in computational discrepancies.
5. Other operating expenses
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Pension and medical
defined benefit provisions (24) (24) (24) (48) (48)
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 9 (32) (24) (23) (51)
Miscellaneous - - (3) - (3)
(15) (56) (51) (71) (102)
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Pension and medical
defined benefit provisions (3) (3) (3) (7) (5)
Claims filed by former
employees in respect
of loss of employment,
work-related accident injuries
and diseases, governmental
fiscal claims and costs of old
tailings operations 1 (5) (3) (3) (6)
Miscellaneous - - - - -
(2) (8) (6) (10) (11)
6. Operating special items
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Indirect tax (expenses)
reimbursement (35) (44) 12 (79) 9
Net impairments of tangible
assets (note 9) (62) (81) - (143) -
Loss on consignment stock - - (116) - (116)
Impairment of debtors (19) (33) (3) (52) (66)
Contract termination fee at
Geita Gold Mine (4) (5) - (8) -
Insurance claim recovery 10 - 7 10 7
Net (loss) profit on disposal
and abandonment of land, mineral
rights, tangible assets and
exploration properties (note 9) (24) (11) 839 (35) 844
Profit on disposal of
investment (note 9) 45 - - 45 -
(89) (174) 739 (262) 679
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Indirect tax (expenses)
reimbursement (6) (6) 2 (11) 1
Net impairments of tangible
assets (note 9) (8) (11) - (19) -
Loss on consignment stock - - (15) - (15)
Impairment of debtors (2) (4) - (7) (6)
Contract termination fee at
Geita Gold Mine - (1) - (1) -
Insurance claim recovery 1 - 1 1 1
Net (loss) profit on disposal and
abandonment of land, mineral rights,
tangible assets and exploration
properties (note 9) (3) (2) 105 (5) 105
Profit on disposal of
investment (note 9) 6 - - 6 -
(12) (23) 92 (35) 86
7. Finance costs and unwinding of obligations
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
Finance costs (245) (142) (259) (386) (442)
Unwinding obligations,
accretion on convertible
bond and other discounts (78) (97) (63) (175) (131)
(323) (239) (322) (561) (573)
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Finance costs (33) (19) (31) (52) (49)
Unwinding obligations,
accretion on convertible
bond and other discounts (10) (13) (8) (23) (15)
(43) (32) (39) (75) (64)
8. Taxation
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
South African taxation
Mining tax (84) - (108) (84) (108)
Non-mining tax (35) (95) (126) (130) (156)
Under provision prior year (12) (12) (13) (23) (29)
Deferred taxation:
Temporary differences (122) 108 12 (14) (310)
Unrealised non-hedge
derivatives and other
commodity contracts 420 (160) (238) 260 (71)
Change in estimated
deferred tax rate (22) 29 - 7 -
146 (130) (473) 16 (673)
Foreign taxation
Normal taxation (315) (337) (379) (652) (516)
(Under) over provision
prior year (60) 2 (3) (58) (14)
Deferred taxation:
Temporary differences (13) (92) (155) (105) (203)
Unrealised non-hedge
derivatives and
other commodity contracts (23) - 94 (23) 106
(410) (428) (442) (838) (626)
(264) (558) (915) (822) (1,299)
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
South African taxation
Mining tax (11) - (13) (11) (13)
Non-mining tax (5) (13) (15) (17) (18)
Under provision prior year (2) (2) (2) (3) (3)
Deferred taxation:
Temporary differences (15) 14 2 (1) (30)
Unrealised non-hedge
derivatives and
other commodity contracts 56 (22) (30) 34 (13)
Change in estimated
deferred tax rate (3) 4 - 1 -
21 (18) (58) 3 (78)
Foreign taxation
Normal taxation (42) (45) (46) (87) (59)
(Under) over provision
prior year (8) - - (8) (1)
Deferred taxation:
Temporary differences (1) (13) (21) (14) (26)
Unrealised non-hedge
derivatives and
other commodity contracts (3) - 12 (3) 13
(54) (58) (55) (112) (74)
(33) (76) (113) (109) (152)
Rounding of figures may result in computational discrepancies.
9. Headline (loss) earnings
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
SA Rand million
The (loss) profit
attributable to equity
shareholders has been
adjusted by the
following to arrive at
headline (loss) earnings:
(Loss) profit attributable
to equity shareholders (1,360) 1,150 2,304 (210) 2,305
Net impairments of tangible
assets (note 6) 62 81 - 143 -
Net loss (profit) on disposal and
abandonment of land, mineral rights,
tangible assets and exploration
properties (note 6) 24 11 (839) 35 (844)
Insurance claim recovery for
infrastructure - - (7) - (7)
Profit on disposal of
investment (note 6) (45) - - (45) -
Impairment of investment in
associates and joint ventures 15 20 3 35 5
Taxation on items above - current
portion 3 - 201 3 205
Taxation on items above -
deferred portion (14) (21) (32) (35) (32)
Cents per share (1) (1,315) 1,241 1,631 (74) 1,631
Headline (loss) earnings (359) 338 455 (20) 455
Quarter ended Six months ended
Jun Mar Jun Jun Jun
2010 2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
The (loss) profit
attributable to equity
shareholders has been
adjusted by the
following to arrive at
headline (loss)earnings:
(Loss) profit attributable
to equity shareholders (187) 157 299 (30) 299
Net impairments of tangible
assets (note 6) 8 11 - 19 -
Net loss (profit) on disposal and
abandonment of land, mineral rights,
tangible assets and exploration
properties (note 6) 3 2 (105) 5 (105)
Insurance claim recovery for
infrastructure - - (1) - (1)
Profit on disposal of
investment (note 6) (6) - - (6) -
Impairment of investment
in associates and
joint ventures 2 3 - 5 1
Taxation on items above -
current portion - - 26 - 25
Taxation on items above -
deferred portion (2) (3) (4) (5) (4)
Cents per share (1) (181) 169 215 (12) 215
Headline (loss) earnings (49) 46 60 (3) 60
(1) Calculated on the basic weighted average number of ordinary shares.
10. Number of shares
Quarter ended
Jun Mar Jun
2010 2010 2009
Unaudited Unaudited Unaudited
Authorised number of shares:
Ordinary shares of 25 SA
cents each 600,000,000 600,000,000 600,000,000
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 number of shares:
Ordinary shares in issue 362,752,860 362,352,345 354,241,602
E ordinary shares in issue 3,005,932 3,709,362 3,879,290
Total ordinary shares: 365,758,792 366,061,707 358,120,892
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 362,530,946 362,295,477 354,198,056
E ordinary shares 3,235,727 3,734,382 3,896,280
Fully vested options 1,017,064 1,186,849 551,521
Weighted average number
of shares 366,783,737 367,216,708 358,645,857
Dilutive potential of
share options - 733,901 897,098
Diluted number of ordinary
shares (1) 366,783,737 367,950,609 359,542,955
Six months ended
Jun Jun
2010 2009
Unaudited Unaudited
Authorised number of shares:
Ordinary shares of 25 SA cents each 600,000,000 600,000,000
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 number of shares:
Ordinary shares in issue 362,752,860 354,241,602
E ordinary shares in issue 3,005,932 3,879,290
Total ordinary shares: 365,758,792 358,120,892
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 362,413,862 353,918,523
E ordinary shares 3,483,676 3,918,250
Fully vested options 1,063,772 670,465
Weighted average number of shares 366,961,310 358,507,238
Dilutive potential of share options - 907,306
Diluted number of ordinary shares (1) 366,961,310 359,414,544
(1) The basic and diluted number of ordinary shares is the same for the June
2010 quarter and six months ended June 2010 as the effects of shares for
performance related options are anti-dilutive.
11. Share capital and premium
As at
Jun Mar Dec Jun
2010 2010 2009 2009
Unaudited Unaudited Audited Unaudited
SA Rand million
Balance at beginning of period 40,662 40,662 38,246 38,246
Ordinary shares issued 210 43 2,438 202
E ordinary shares cancelled (64) (10) (22) (11)
Sub-total 40,808 40,695 40,662 38,437
Redeemable preference shares
held within the group (313) (313) (313) (313)
Ordinary shares held within
the group (199) (205) (212) (263)
E ordinary shares held within
the group (239) (293) (303) (314)
Balance at end of period 40,057 39,884 39,834 37,547
As at
Jun Mar Dec Jun
2010 2010 2009 2009
Unaudited Unaudited Audited Unaudited
US Dollar million
Balance at beginning of period 5,935 5,935 5,625 5,625
Ordinary shares issued 28 5 312 22
E ordinary shares cancelled (9) (1) (2) (1)
Sub-total 5,954 5,939 5,935 5,645
Redeemable preference shares
held within the group (53) (53) (53) (53)
Ordinary shares held within the group (31) (31) (32) (38)
E ordinary shares held within the group (36) (44) (45) (46)
Balance at end of period 5,834 5,811 5,805 5,508
Rounding of figures may result in computational discrepancies.
12. Exchange rates
Jun Mar Dec Jun
2010 2010 2009 2009
Unaudited Unaudited Unaudited Unaudited
ZAR/USD average for the
year to date 7.52 7.50 8.39 9.18
ZAR/USD average for the
quarter 7.54 7.50 7.47 8.40
ZAR/USD closing 7.63 7.30 7.44 7.71
ZAR/AUD average for the
year to date 6.71 6.78 6.56 6.49
ZAR/AUD average for the
quarter 6.65 6.78 6.80 6.42
ZAR/AUD closing 6.38 6.68 6.67 6.21
BRL/USD average for the
year to date 1.80 1.80 2.00 2.20
BRL/USD average for the
quarter 1.79 1.80 1.74 2.07
BRL/USD closing 1.80 1.78 1.75 1.96
ARS/USD average for the
year to date 3.87 3.83 3.73 3.63
ARS/USD average for the
quarter 3.90 3.83 3.81 3.73
ARS/USD closing 3.93 3.87 3.80 3.80
13. Capital commitments
Jun Mar Dec Jun
2010 2010 2009 2009
Unaudited Unaudited Audited Unaudited
SA Rand million
Orders placed and outstanding on capital contracts
at the prevailing rate of exchange (1) 1,809 1,179 976 1,333
Jun Mar Dec Jun
2010 2010 2009 2009
Unaudited Unaudited Audited Unaudited
US Dollar million
Orders placed and outstanding on
capital contracts at the
prevailing rate of exchange (1) 237 162 131 173
(1) Includes capital commitments relating to equity accounted joint ventures.
Liquidity and capital resources
To service the above capital commitments and other operational requirements,
the group is dependent on existing cash resources, cash generated from
operations and borrowing facilities.
Cash generated from operations is subject to operational, market and other
risks. Distributions from operations may be subject to foreign investment and
exchange control laws and regulations and the quantity of foreign exchange
available in offshore countries. In addition, distributions from joint ventures
are subject to the relevant board approval.
The credit facilities and other financing arrangements contain financial
covenants and other similar undertakings.
To the extent that external borrowings are required, the groups covenant
performance indicates that existing financing facilities will be available to
meet the above commitments.
14. Contingencies
AngloGold Ashanti`s material contingent liabilities and assets at 30 June 2010
are detailed below:
Contingencies and guarantees SA Rand million US Dollar million
Contingent liabilities
Groundwater pollution (1) - -
Deep groundwater pollution - South Africa (2) - -
Sales tax on gold deliveries - Brazil (3) 599 79
Other tax disputes - Brazil (4) 227 30
Indirect taxes - Ghana (5) 73 10
Contingent assets
Royalty - Boddington Gold Mine (6) - -
Insurance claim - Savuka Gold Mine (7) - -
Financial guarantees
Oro Group (Pty) Limited (8) 100 13
999 132
Rounding of figures may result in computational discrepancies.
AngloGold Ashanti is subject to contingencies pursuant to environmental laws
and regulations that may in future require the group to take corrective action
as follows:
(1) Groundwater pollution - AngloGold Ashanti has identified groundwater
contamination plumes at certain of its operations, which have occurred
primarily as a result of seepage from mine residue stockpiles. Numerous
scientific, technical and legal studies have been undertaken to assist in
determining the magnitude of the contamination and to find sustainable
remediation solutions. The group has instituted processes to reduce future
potential seepage and it has been demonstrated that Monitored Natural
Attenuation (MNA) by the existing environment will contribute to improvement in
some instances. Furthermore, literature reviews, field trials and base line
modelling techniques suggest, but are not yet proven, that the use of
phyto-technologies can address the soil and groundwater contamination. Subject
to the completion of trials and the technology being a proven remediation
technique, no reliable estimate can be made for the obligation.
(2) Deep groundwater pollution - The company has identified a flooding and
future pollution risk posed by deep groundwater in the Klerksdorp and Far West
Rand gold fields. Various studies have been undertaken by AngloGold Ashanti
since 1999. Due to the interconnected nature of mining operations, any proposed
solution needs to be a combined one supported by all the mines located in these
gold fields. As a result the Department of Mineral Resources and affected
mining companies are now involved in the development of a "Regional Mine
Closure Strategy". In view of the limitation of current information for the
accurate estimation of a liability, no reliable estimate can be made for the
obligation.
(3) Sales tax on gold deliveries - Mineracao Serra Grande S.A. (MSG), received
two tax assessments from the State of Goias related to payments of sales taxes
on gold deliveries for export. AngloGold Ashanti Brasil Mineracao Ltda. manages
the operation and its attributable share of the first assessment is
approximately $49m. 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 assessment,
and the attributable share of the assessment is approximately $30m. The company
believes both assessments are in violation of federal legislation on sales
taxes.
(4) Other tax disputes - MSG received a tax assessment in October 2003 from the
State of Minas Gerais related to sales taxes on gold. The tax administrators
rejected the company`s appeal against the assessment. The company is now
appealing the dismissal of the case. The company`s attributable share of the
assessment is approximately $9m.
AngloGold subsidiaries in Brazil are involved in various disputes with tax
authorities. These disputes involve federal tax assessments including income
tax, royalties, social contributions and annual property tax. The amount
involved is approximately $21m.
(5) Indirect taxes - AngloGold Ashanti (Ghana) Limited received a tax
assessment for $10m during September 2009 following an audit by the tax
authorities related to indirect taxes on various items. Management is of the
opinion that the indirect taxes are not payable and the company has lodged an
objection.
(6) Royalty - As a result of the sale of the interest in the Boddington Gold
Mine joint venture during 2009, the group is entitled to receive a royalty on
any gold recovered or produced by the Boddington Gold Mine, where the gold
price is in excess of Boddington Gold Mine`s cash cost plus $600/oz. The
royalty commences on 1 July 2010 and is capped at a total amount of $100m,
R763m.
(7) Insurance claim - On 22 May 2009 an insurable event occurred at Savuka Gold
Mine. The amounts due from the insurers are subject to a formula based on lost
production, average gold price and average exchange rates subject to various
excesses and the production and the preparation of supportable data. The
insurable amount is not yet determinable, but management expects the amount to
exceed $40m, R305m, of which $23m, R176m has been received during 2009 and
2010.
(8) Provision of surety - The company has provided sureties in favour of a
lender on a gold loan facility with its affiliate Oro Group (Pty) Limited and
one of its subsidiaries to a maximum value of $13m, R100m. The suretyship
agreements have a termination notice period of 90 days.
15. Concentration of risk
There is a concentration of risk in respect of reimbursable value added tax and
fuel duties from the Tanzanian government:
Reimbursable value added tax due from the Tanzanian government amounts to
$47m at 30 June 2010 (31 March 2010: $42m). The last audited value added tax
return was for the period ended 28 February 2010 and at the reporting date the
audited amount was $36m. The outstanding amounts at Geita have been discounted
to their present value at a rate of 7.82%.
Reimbursable fuel duties from the Tanzanian government amounts to $49m at 30
June 2010 (31 March 2010: $49m). 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
$43m have been lodged with the Customs and Excise authorities, whilst claims
for refund of $6m have not yet been lodged. The outstanding amounts have been
discounted to their present value at a rate of 7.82%.
16. Subsequent events
Tau Lekoa - Finalisation of sale
The Department of Mineral Resources has transferred the mining rights for its
Tau Lekoa Mine to Buffelsfontein Gold Mines Limited, a wholly-owned subsidiary
of Simmer & Jack Mines Limited (Simmers). Full ownership of Tau Lekoa and the
adjacent properties of Weltevreden, Jonkerskraal and Goedgenoeg will pass to
Simmers on 1 August 2010.
AngloGold Ashanti entered into an agreement with Simmers in February 2009 for
the sale of Tau Lekoa and the adjacent properties of Weltevreden, Jonkerskraal
and Goedgenoeg for a total purchase consideration of
R600m (payable on completion of the transaction and adjusted as set out
below); and
a royalty determined at 3% of the net revenue (gross revenue less state
royalties) generated by the Tau Lekoa mine and any operations developed at
Weltevreden, Jonkerskraal and Goedgenoeg. The royalty will be payable
quarterly, from 1 January 2010, until the total production from Tau Lekoa,
Weltevreden, Jonkerskraal or Goedgenoeg upon which the royalty is paid is equal
to 1.5Moz and provided that the average quarterly rand price of gold is equal
to or exceeds R180,000/kg (in 1 January 2010 terms).
In terms of the agreement, Simmers will settle the R600m purchase consideration
payable at completion as follows:
R450m in cash; and
the balance in cash or shares in Simmers. This remaining R150m is subject to
an offset adjustment (up to a maximum of R150m) based on the free cash flow
generated by Tau Lekoa between 1 January 2009 and 31 July 2010 and including an
offset for the royalty payable from 1 January 2010 to 30 June 2010. This
balancing amount will be determined based upon a final audit of the July 2010
production figures.
17. Borrowings
AngloGold Ashanti`s borrowings are interest bearing.
18. Announcements
On 1 June 2010, AngloGold Ashanti announced that it was halting the supply of
services, including water, compressed air, electricity and sewerage, to the
mines in Orkney following the failure by the liquidators of Pamodzi Gold
Orkney, to settle debts owed for services supplied to the operations over the
past ten months. AngloGold Ashanti however would continue to supply potable
water and electrical power to Pamodzi`s mine residences for as long as these
were occupied.
On 17 February 2009 AngloGold Ashanti announced the terms of the sale of its
Tau Lekoa Mine to Simmer & Jack Mines Limited (Simmers). This sale was
concluded effective 1 August 2010, following the transfer of the mining rights
of the Tau Lekoa Mine and the adjacent properties of Weltevreden, Jonkerskraal
and Goedgenoeg to Buffelsfontein Gold Mines Limited, a wholly-owned subsidiary
of Simmers on 20 July 2010. Refer Note 16.
19. Dividend
The directors declared Interim Dividend No. 108 of 65 (Interim Dividend No.
106: 60) South African cents per ordinary share for the six months ended 30
June 2010. In compliance with the requirements of Strate, given the company`s
primary listing on the JSE Limited, the salient dates for payment of the
dividend are as follows: To holders of ordinary shares and to holders of CHESS
Depositary Interests (CDIs) Each CDI represents one-fifth of an ordinary share.
2010
Currency conversion date for UK pounds, Australian
dollars and Ghanaian cedis Thursday, 26 August
Last date to trade ordinary shares cum dividend Friday, 27 August
Last date to register transfers of certificated
securities cum dividend Friday, 27 August
Ordinary shares trade ex dividend Monday, 30 August
Record date Friday, 3 September
Payment date Friday, 10 September
On the payment date, dividends due to holders of certificated securities on the
South African share register will either be electronically transferred to
shareholders` bank accounts or, in the absence of suitable mandates, dividend
cheques will be posted to such shareholders.
Dividends in respect of dematerialised shareholdings will be credited to
shareholders` accounts with the relevant CSDP or broker.
To comply with the further requirements of Strate, between Monday, 30 August
2010 and Friday, 3 September 2010, both days inclusive, no transfers between
the South African, United Kingdom, Australian and Ghana share registers will be
permitted and no ordinary shares pertaining to the South African share register
may be dematerialised or rematerialised.
To holders of American Depositary Shares
Each American Depositary Share (ADS) represents one
ordinary share.
2010
Ex dividend on New York Stock Exchange Wednesday, 1 September
Record date Friday, 3 September
Approximate date for currency conversion Friday, 10 September
Approximate payment date of dividend Monday, 20 September
Assuming an exchange rate of R7.2255/$, the dividend payable per ADS is
equivalent to 8.9959 US cents. This compares with the interim dividend of
7.6553 US cents per ADS paid on 8 September 2009. However the actual rate of
payment will depend on the exchange rate on the date for currency conversion.
To holders of Ghanaian Depositary Shares (GhDSs)
100 GhDSs represent one ordinary share.
2010
Last date to trade and to register GhDSs cum dividend Friday, 27 August
GhDSs trade ex dividend Monday, 30 August
Record date Friday, 3 September
Approximate payment date of dividend Monday, 13 September
Assuming an exchange rate of R1/Cents (USD)0.1970, the dividend payable per
share is
equivalent to 0.12805 cedis. This compares with the interim dividend of 0.10956
cedis per share paid on 31 August 2009. However, the actual rate of payment
will depend on the exchange rate on the date for currency conversion. In Ghana,
the authorities have determined that dividends payable to residents on the
Ghana share register be subject to a final withholding tax at a rate of 8%.
In addition, directors declared Dividend No. E8 of 32.5 South African cents per
E ordinary share, payable to employees participating in the Bokamoso ESOP and
Izingwe Holdings (Proprietary) Limited. These dividends will be paid on Friday,
10 September 2010.
20. Detailed report
This report contains a summary of the results of AngloGold Ashanti`s
operations. A detailed report appears on the internet and is obtainable in
printed format from the investor relations contacts, whose details, along with
the website address, appear at the end of this report.
By order of the Board
T T MBOWENI M CUTIFANI
Chairman Chief Executive Officer
10 August 2010
Administrative information
ANGLOGOLD ASHANTI LIMITED
Registration No. 1944/017354/06
Incorporated in the Republic of South Africa
Share codes:
ISIN: ZAE000043485
JSE: ANG
LSE: AGD
NYSE: AU
ASX: AGG
GhSE (Shares): AGA
GhSE (GhDS): AAD
Euronext Paris: VA
Euronext Brussels: ANG
JSE Sponsor: UBS
Auditors: Ernst & Young Inc
Offices
Registered and Corporate
76 Jeppe Street
Newtown 2001
(PO Box 62117, Marshalltown 2107)
South Africa
Telephone: +27 11 637 6000
Fax: +27 11 637 6624
Australia
Level 13, St Martins Tower
44 St George`s Terrace
Perth, WA 6000
(PO Box Z5046, Perth WA 6831)
Australia
Telephone: +61 8 9425 4602
Fax: +61 8 9425 4662
Ghana
Gold House
Patrice Lumumba Road
(PO Box 2665)
Accra
Ghana
Telephone: +233 303 772190
Fax: +233 303 778155
United Kingdom Secretaries
St James`s Corporate Services Limited
6 St James`s Place
London SW1A 1NP
England
Telephone: +44 20 7499 3916
Fax: +44 20 7491 1989
E-mail: jane.kirton@corpserv.co.uk
Directors
Executive
M Cutifani
(Chief Executive Officer)
S Venkatakrishnan * (Chief Financial Officer)
Non-Executive
T T Mboweni (Chairman)
Dr T J Motlatsi (Deputy Chairman)
F B Arisman #
W A Nairn
Prof L W Nkuhlu
F Ohene-Kena +
S M Pityana
* British # American
Australian ## South African
+ Ghanaian
Officers
Company Secretary: Ms L Eatwell
Investor Relations Contacts
South Africa
Sicelo Ntuli
Telephone: +27 11 637 6339
Fax: +27 11 637 6400
E-mail: sntuli@AngloGoldAshanti.com
United States
Stewart Bailey
Telephone: +1-212-836-4303
Mobile: +1-646-717-3978
E-mail: sbailey@AngloGoldAshanti.com
General E-mail enquiries
investors@AngloGoldAshanti.com
AngloGold Ashanti website
http://www.AngloGoldAshanti.com
Company secretarial E-mail
Companysecretary@AngoGoldAshanti.com
AngloGold Ashanti posts information that is important to investors on the main
page of its website at www.anglogoldashanti.com and under the "Investors" tab
on the main page. This information is updated regularly. Investors should visit
this website to obtain important information about AngloGold Ashanti.
Share Registrars
South Africa
Computershare Investor Services (Pty)
Limited
Ground Floor, 70 Marshall Street
Johannesburg 2001
(PO Box 61051, Marshalltown 2107)
South Africa
Telephone: 0861 100 950 (in SA)
Fax: +27 11 688 5218
web.queries@computershare.co.za
United Kingdom
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 7NH
England
Telephone: +44 870 702 0000
Fax: +44 870 703 6119
Australia
Computershare Investor Services Pty
Limited
Level 2, 45 St George`s Terrace
Perth, WA 6000
(GPO Box D182 Perth, WA 6840)
Australia
Telephone: +61 8 9323 2000
Telephone: 1300 55 2949 (in Australia)
Fax: +61 8 9323 2033
Ghana
NTHC Limited
Martco House
Off Kwame Nkrumah Avenue
PO Box K1A 9563 Airport
Accra
Ghana
Telephone: +233 303 229664
Fax: +233 303 229975
ADR Depositary
The Bank of New York Mellon ("BoNY")
BNY Shareowner Services
PO Box 358016
Pittsburgh, PA 15252-8016
United States of America
Telephone: +1 800 522 6645 (Toll free
in USA) or +1 201 680 6578 (outside
USA)
E-mail: shrrelations@mellon.com
Website:
www.bnymellon.com.com\shareowner
Global BuyDIRECT SM
BoNY maintains a direct share purchase
and dividend reinvestment plan for
ANGLOGOLD ASHANTI.
Telephone: +1-888-BNY-ADRS
PUBLISHED BY ANGLOGOLD ASHANTI
PRINTED BY INCE (PTY) LIMITED
Certain statements made in this communication, including, without limitation,
those concerning AngloGold Ashanti`s strategy to reduce its gold hedging
position including the extent and effects of the 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, the resumption of
production at AngloGold Ashanti`s mines in Ghana, the completion of announced
mergers and acquisitions transactions, AngloGold Ashanti`s liquidity and
capital resources, and expenditure and the outcome and consequences of any
litigation proceedings or environmental issues, 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 including environmental
approvals and actions, fluctuations in gold prices and exchange rates, and
business and operational risk management. For a discussion of certain of these
factors, refer to AngloGold Ashanti`s annual report for the year ended 31
December 2009, which was distributed to shareholders on 30 March 2010. The
company`s annual report on Form 20-F, was filed with the Securities and
Exchange Commission in the United States on 19 April 2010 and as amended on 18
May 2010. AngloGold Ashanti undertakes no obligation to update publicly or
release any revisions to these forward-looking statements to reflect events or
circumstances after today`s date or to reflect the occurrence of unanticipated
events. All subsequent written or oral forward-looking statements attributable
to AngloGold Ashanti or any person acting on its behalf are qualified by the
cautionary statements herein. AngloGold Ashanti posts information that is
important to investors on the main page of its website at
www.anglogoldashanti.com and under the "Investors" tab on the main page. This
information is updated regularly. Investors should visit this website to obtain
important information about AngloGold Ashanti.
Date: 12/08/2010 07:55:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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