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ANG
ANANO
ANG - Anglogold Ashanti Limited - Report to shareholders for the quarter ended
31 March 2011
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 ended 31 March 2011
Group results for the quarter....
- First quarter production of 1.039Moz at a total cash cost of $706/oz.
- First quarter uranium production of 365klbs and silver production of 681koz
- Adjusted headline earnings of $203m, or 53 US cents a share.
- Hedge removal ensures strong cash generation from operating activities of
$513m.
- Continued improvement in net debt to $1.1bn; a reduction of some $200m during
the quarter.
- Kopanang shows 3% production gain, despite South Africa Christmas shutdown.
- Sadiola benefits from higher tonnages and grades for 3% production increase.
- Iduapriem showing early benefits from Project ONE, higher tonnages offset
lower grade.
- Cripple Creek & Victor continues turnaround, with strong production gain.
- Exploration at Hutite prospect in Egypt showing promising, high-grade
intercepts.
- New ore body discovered at Sunrise Dam.
Events post quarter-end...
- Proposed BEE restructuring ensures value for all beneficiaries; incremental
accounting cost of about $18m.
Quarter
ended ended
Mar Dec
2011 2010
SA rand / Metric
Operating review
Gold
Produced - kg / oz (000) 32,303 35,703
Price received - R/kg / $/oz 312,261 99,671
Price received excluding hedge
buy-back costs - R/kg / $/oz 312,261 303,454
Total cash costs - R/kg / $/oz 158,707 148,474
Total production costs - R/kg / $/oz 200,632 201,465
Financial review
Adjusted gross profit (loss) - Rm / $m 3,464 (3,718)
Adjusted gross profit excluding hedge
buy-back costs - Rm / $m 3,464 3,598
Profit attributable to equity
shareholders - Rm / $m 1,658 404
- cents/share 430 105
Adjusted headline earnings (loss) - Rm / $m 1,415 (5,263)
- cents/share 367 (1,368)
Adjusted headline earnings
excluding hedge buy-back costs - Rm / $m 1,415 2,026
- cents/share 367 527
Cash flow from operating activities
excluding hedge buy-back costs - Rm / $m 3,607 5,076
Capital expenditure - Rm / $m 1,740 2,572
Year
ended ended
Mar Dec
2010 2010
SA rand / Metric
Operating review
Gold
Produced - kg / oz (000) 33,574 140,418
Price received - R/kg / $/oz 244,873 135,862
Price received excluding hedge
buy-back costs - R/kg / $/oz 244,873 271,018
Total cash costs - R/kg / $/oz 149,431 149,577
Total production costs - R/kg / $/oz 190,374 190,889
Financial review
Adjusted gross profit (loss) - Rm / $m 1,638 (8,027)
Adjusted gross profit excluding hedge
buy-back costs - Rm / $m 1,638 10,927
Profit attributable to equity
shareholders - Rm / $m 1,150 637
- cents/share 313 171
Adjusted headline earnings (loss) - Rm / $m 463 (12,210)
- cents/share 126 (3,283)
Adjusted headline earnings
excluding hedge buy-back costs - Rm / $m 463 5,652
- cents/share 126 1,520
Cash flow from operating activities
excluding hedge buy-back costs - Rm / $m 1,326 12,603
Capital expenditure - Rm / $m 1,283 7,413
Quarter
ended ended
Mar Dec
2011 2010
US dollar / Imperial
Operating review
Gold
Produced - kg / oz (000) 1,039 1,148
Price received - R/kg / $/oz 1,391 452
Price received excluding hedge
buy-back costs - R/kg / $/oz 1,391 1,372
Total cash costs - R/kg / $/oz 706 672
Total production costs - R/kg / $/oz 893 912
Financial review
Adjusted gross profit (loss) - Rm / $m 497 (540)
Adjusted gross profit excluding hedge
buy-back costs - Rm / $m 497 522
Profit attributable to equity
shareholders - Rm / $m 241 56
- cents/share 62 15
Adjusted headline earnings (loss) - Rm / $m 203 (764)
- cents/share 53 (199)
Adjusted headline earnings
excluding hedge buy-back costs - Rm / $m 203 294
- cents/share 53 76
Cash flow from operating activities
excluding hedge buy-back costs - Rm / $m 513 679
Capital expenditure - Rm / $m 249 365
Year
ended ended
Mar Dec
2010 2010
US dollar / Imperial
Operating review
Gold
Produced - kg / oz (000) 1,079 4,515
Price received - R/kg / $/oz 1,015 561
Price received excluding hedge
buy-back costs - R/kg / $/oz 1,015 1,159
Total cash costs - R/kg / $/oz 619 638
Total production costs - R/kg / $/oz 789 816
Financial review
Adjusted gross profit (loss) - Rm / $m 218 (1,191)
Adjusted gross profit excluding hedge
buy-back costs - Rm / $m 218 1,507
Profit attributable to equity
shareholders - Rm / $m 157 76
- cents/share 43 20
Adjusted headline earnings (loss) - Rm / $m 61 (1,758)
- cents/share 17 (473)
Adjusted headline earnings
excluding hedge buy-back costs - Rm / $m 61 787
- cents/share 17 212
Cash flow from operating activities
excluding hedge buy-back costs - Rm / $m 179 1,669
Capital expenditure - Rm / $m 171 1,015
$ represents US dollar, unless otherwise stated.
Rounding of figures may result in computational discrepancies.
Operations at a glance
for the quarter ended 31 March 2011
Production Total cash costs
oz (000) % Variance 1 $/oz % Variance 1
SOUTH AFRICA 401 (16) 637 3
Great Noligwa 22 (35) 1,202 31
Kopanang 80 3 589 (10)
Moab Khotsong 68 (11) 586 (12)
Mponeng 118 (17) 516 6
Savuka 11 - 833 (6)
TauTona 54 (33) 856 33
Surface Operations 48 (8) 540 1
CONTINENTAL AFRICA 363 (3) 819 4
Ghana
Iduapriem 56 (3) 714 (4)
Obuasi 70 6 1,011 7
Guinea
Siguiri - Attributable 85% 65 (8) 675 (2)
Mali
Morila - Attributable 40% 2 22 (8) 832 9
Sadiola - Attributable 41% 2 30 3 699 (11)
Yatela - Attributable 40% 2 7 (22) 1,387 -
Namibia
Navachab 17 (39) 955 28
Tanzania
Geita 94 4 817 9
Non-controlling interests,
exploration and other
AUSTRALASIA 72 (29) 1,153 29
Australia
Sunrise Dam 72 (29) 1,083 26
Exploration and other
AMERICAS 203 4 480 3
Argentina
Cerro Vanguardia -
Attributable 92.50% 45 (10) 435 22
Brazil
AngloGold Ashanti
Mineracao 84 (1) 444 (3)
Serra Grande -
Attributable 50% 17 (11) 711 40
United States of America
Cripple Creek & Victor 57 36 494 (11)
Non-controlling
interests, exploration
and other
OTHER
Sub-total 1,039 (9) 706 5
Equity accounted
investments included
above
AngloGold Ashanti
Adjusted
gross profit (loss) excluding
hedge buy-back costs
$m $m Variance 1
SOUTH AFRICA 210 (29)
Great Noligwa (2) (8)
Kopanang 40 7
Moab Khotsong 29 13
Mponeng 87 (19)
Savuka 6 2
TauTona 11 (22)
Surface Operations 40 (2)
CONTINENTAL AFRICA 163 22
Ghana
Iduapriem 24 (1)
Obuasi 14 4
Guinea
Siguiri - Attributable 85% 45 1
Mali
Morila - Attributable 40% 2 11 (3)
Sadiola - Attributable 41% 2 20 5
Yatela - Attributable 40% 2 - 3
Namibia
Navachab 6 (11)
Tanzania
Geita 36 10
Non-controlling interests, exploration
and other 7 12
AUSTRALASIA 5 (36)
Australia
Sunrise Dam 11 (33)
Exploration and other (5) (1)
AMERICAS 156 31
Argentina
Cerro Vanguardia - Attributable 92.50% 32 (7)
Brazil
AngloGold Ashanti Mineracao 66 34
Serra Grande - Attributable 50% 6 (7)
United States of America
Cripple Creek & Victor 42 15
Non-controlling interests, exploration
and other 10 (4)
OTHER (7) (9)
Sub-total 527 (21)
Equity accounted investments included above (31) (5)
AngloGold Ashanti 497 (25)
1 Variance March 2011 quarter on December 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
FINANCIAL AND CORPORATE REVIEW
The first quarter of 2011 is the first period in which the company`s earnings
were unencumbered by the hedge book, which was removed on 7 October 2010. The
group now has full exposure to the spot price of gold, which continued to
perform strongly in the face of inflationary fears, macroeconomic uncertainty
and geopolitical tension. Adjusted headline earnings were $203m, or 53 US cents
a share in the seasonally weak production period, compared with $294m, or 76 US
cents the previous quarter. Profit attributable to ordinary shareholders was
$241m, from $56m the previous quarter.
Cash generated from operating activities was strong at $513m. Free cash flow
(after all capital expenditure, finance costs and tax) was $229m and this helped
reduce net debt (excluding the mandatory convertible bond) from $1.3bn at the
end of last quarter to $1.1bn at 31 March 2011.
On 14 April 2011, following the end of the quarter, AngloGold Ashanti announced
the proposed restructuring of its black economic empowerment transaction,
initially entered into in 2006, to ensure the intended benefits accrue to its
recipients, namely its South African employees, through the Bokamoso ESOP trust
and BEE Partner, Izingwe Holdings.
The total incremental accounting cost to AngloGold Ashanti of the proposed
restructuring which is subject to shareholders` approval, is around R121m
(approximately $18m), while the pro-forma impact on adjusted headline earnings
and net asset value per share is 0.4% and 0.2% respectively. When implemented
following shareholder approval, approximately $8m of the accounting cost will be
recorded during the second quarter 2011, with the balance of $4m spread equally
in the third and fourth quarters of 2011. The principal component of the
restructured transaction is the proposed reinstatement over the next three years
of a total of some 1.37m E Ordinary shares that have either lapsed or are
expected to lapse without realising the anticipated value for their holders.
Also, an additional 48,923 new ordinary shares will be allotted to employees who
qualify for the scheme as of the original cut-off date.
The Board believes that proactively implementing the proposed restructuring will
be recognised by government, AngloGold Ashanti`s employees, Izingwe and society
as a whole, as reinforcing the company`s continued commitment to the spirit of
transformation and empowerment as contained in the Mining Charter. Management
believes that the amendment of this transaction has the potential to enhance
labour relations within AngloGold Ashanti`s South African operations and more
broadly, reinforce AngloGold Ashanti`s reputation as a good corporate citizen in
South Africa.
OPERATING RESULTS
Production and total cash costs for the three months to 31 March 2011,
traditionally the slowest production quarter for AngloGold Ashanti, were
1.039Moz at $706/oz, compared with 1.148Moz at $672/oz the previous quarter. The
result was affected by torrential rainfall which disrupted production at Sunrise
Dam in Australia and Navachab in Namibia, as well as the seasonally slow restart
after the Christmas break in South Africa. Strong performances were delivered by
Cripple Creek & Victor in the U.S., Kopanang in South Africa and Sadiola in
Mali.
Guidance for the first quarter was initially set at 1.04Moz at a total cash cost
of $675/oz - $700/oz. This was adjusted to 1.02Moz, with a consequent impact on
costs, on 15 March 2011 following the weather impact on the Australian
operations.
Total cash costs at $706/oz were adversely impacted by higher fuel prices,
royalties (on the back of improved spot prices) and accounting deferred
stripping costs.
SAFETY
Tragically, two employees lost their lives during the quarter in separate
incidents at Great Noligwa, in South Africa and at Obuasi, in Ghana. This is
especially distressing, given the unblemished record of the previous quarter.
Thorough analysis of those incidents was undertaken and steps taken to prevent
their reoccurrence. Encouragement can be taken from AngloGold Ashanti`s long-
term all-injury statistics, which at 10.25 per million hours worked, were the
lowest in the company`s history and bear testimony to the commitment at all
levels to reaching our goal of an injury free workplace, and to the
effectiveness of the systemic cultural changes being made in this business. In
March, this broad measure of safety had improved by more than half from its
levels of 2007, with South Africa and the Continental Africa regions leading the
improvements. While these gains are encouraging, additional interventions and
procedures are being designed and implemented to address specific factors
influencing safety performance in order to drive continued improvements in these
statistics.
OPERATING REVIEW
The South Africa operations produced 401,000oz at a total cash cost of $637/oz
in the first quarter of 2011, compared with 476,000oz at a total cash cost of
$616/oz the previous quarter. The performance was impacted by the slow restart
following the annual year-end break by most of the South African workforce, as
well as disruption caused by safety stoppages. At the West Wits operations,
production from Mponeng, the company`s largest mine, declined by 17% to
118,000oz due mainly to lower grades and tonnages, influenced by underground
temperature-related constraints. At neighbouring TauTona, the seasonal factors
had a similar impact on production, compounded by lower yield and a seismic
event in February. Production fell 33% to 54,000oz at a total cash cost of
$856/oz. At the Vaal River operations, production from Moab Khotsong declined by
11% to 68,000oz due to lower volumes resulting from the restart after Christmas,
safety stoppages during February and high underground temperatures. This was
partially offset by higher yield. Kopanang managed a 3% increase in production
despite the Christmas shutdown as yields improved by 13%. Costs declined by 10%
to $589/oz. At Great Noligwa, production dropped 35% to 22,000oz, with safety
stoppages and ore-pass blockages contributing to the decline. Lower grade
affected production from the Surface Operations, resulting in a 8% decline to
48,000oz. Costs were well contained at $540/oz.
The Continental Africa operations produced 363,000oz at a total cash cost of
$819/oz in the first quarter of 2011, compared with 374,000oz at a total cash
cost of $790/oz the previous quarter. Geita`s production increased by 4% to
94,000oz mainly due to higher grades mined from the Nyankanga pit. Higher fuel
and labour charges pushed total cash costs 9% higher to $817/oz. Production from
Iduapriem declined 3% as planned to 56,000oz due to the decrease in recovered
grade. This was partially offset by improved throughput arising from increased
plant availability and utilisation. Total cash costs improved by 4% to $714/oz.
At Obuasi, production rose 6% to 70,000oz due to a 5% increase in tonnage,
achieved through consistency in plant operations and improved underground
equipment availability. The operation`s 7% increase in total cash costs to
$1,011/oz included a $54/oz non-cash charge for inventory movements. At Siguiri,
production was 8% lower at 65,000oz following a reduction in tonnages, which was
offset by higher recovered grades. Total cash costs improved by 2% to $675/oz
due to reduced spending on external service providers. Mali continued to deliver
strong operational free cashflow to the business. Production from Morila fell 8%
to 22,000oz at a total cash cost of $832/oz. At Yatela, output fell 22% to
7,000oz as less ore was stacked. Higher recovered grade and tonnages at Sadiola
led to a 3% increase in production to 30,000oz. Costs decreased 11% to $699/oz.
In Namibia, Navachab`s production fell to 17,000oz as torrential rainfall
hampered access to higher grade areas at the base of the pit.
The Americas operations produced 203,000oz at a total cash cost of $480/oz in
the first quarter of 2011, compared with 196,000oz at a total cash cost of
$465/oz the previous quarter. Cerro Vanguardia, in Argentina, posted a 10%
decline in production to 45,000oz due to a planned reduction in grade and two
scheduled plant shutdowns. Accelerating inflation in Argentina, particularly
evident in higher payroll costs, caused a 22% rise in total cash costs to
$435/oz, though this was partially offset by lower consumption of fuel,
explosives and other consumables. At Cripple Creek & Victor in the U.S.,
production rose 36% to 57,000oz as planned, due to stacking ore closer to the
liner on the new pad. Cash costs improved 11% to $494/oz. At AngloGold Ashanti
Corrego do Sitio Mineracao (AngloGold Ashanti Mineracao), production was little
changed at 84,000oz, as higher grades offset lower tonnage caused by continued
challenges relating to performance of the underground fleet and geotechnical
challenges in the underground mine. Total cash costs improved by 3% to $444/oz,
aided by higher by-product credits and lower costs on certain consumables. At
Serra Grande, production decreased by 11% as planned to 17,000oz, due to lower
grades and tonnages. Total cash cost increased 40% from previous quarter to
$711/oz as a consequence of the lower production, local currency appreciation
and additional equipment maintenance.
Australasia produced 72,000oz at a total cash cost of $1,153/oz in the first
quarter of 2011, compared with 102,000oz at a total cash cost of $894/oz the
previous quarter. (This figure includes deferred stripping charge of $73/oz) The
flood inundation event during the quarter at Sunrise Dam severely impacted all
aspects of the operation. Laverton, 56km from the mine, had its highest rainfall
in February since records were first kept in 1899. Sunrise Dam, meanwhile,
recorded rainfall 30% higher than Laverton`s for the month, with the bulk of the
rain falling in only two events. In one 24-hour period alone, more than 150mm
fell, resulting in destructive flash flooding and substantial inflows of water
into the open pit and underground. All efforts were directed into pumping and
dewatering during the period.
PROJECTS
AngloGold Ashanti incurred capital expenditure of $249m during the quarter, of
which $89m was spent on growth projects. Of the growth-related capital, $49m was
spent in the Americas, $18m was spent in Continental Africa, $5m in Australasia
and $17m in South Africa.
Good progress was made on the Corrego do Sitio project in Brazil`s Minas Gerais
state. The team from Sherritt is preparing to visit the site to commission the
autoclave, while the major plant refurbishment was finalised during April.
Purchasing processes for the main pieces of equipment and major civil works are
also complete. The ball mill from the Queiroz plant has been disassembled and
trucked to Corrego do Sitio, while the new jaw crusher, screen and vibrating
feeders are already on site. Other imported equipment, including Knelson
concentrator and autoclave lining have already been shipped to Brazil. Ore
production was ahead of plan during the period.
In the Democratic Republic of the Congo, progress was made on the Kibali joint
venture, operated by AngloGold Ashanti`s joint venture partner Randgold
Resources. The partners have been involved in detailed technical discussions
around the final project design. Randgold has further provided guidelines on a
high-level integrated project implementation schedule. However, this schedule
requires further work. A mining-study manager was appointed to co-ordinate a
full redesign and schedule for the underground mine. Randgold also provided a
milestone schedule which indicates that the project approval is planned for the
first quarter in 2012. The relocation action plan project is progressing
well with good support from the community.
Also in the DRC, AngloGold Ashanti completed the feasibility study on the
Mongbwalu project in March 2011. The Mongbwalu project forms part of Ashanti
Goldfields Kilo, a DRC company 86.22% owned and managed by AngloGold Ashanti and
13.78% by SOKIMO, the DRC state-owned mining company. The project is currently
moving into an optimisation phase which is planned to be completed by June 2011
and the project will be submitted to the AngloGold Ashanti board for project
funding approval. The Mineral Resource model is currently updated with the
latest drilling data and is due for completion during the current quarter. A
project manager has been appointed to oversee the upgrade and refurbishment of
the existing run-of-river hydro power station. The project will result in
reliable green power to the surrounding district residents and industry.
At the Tropicana project in Australia (AngloGold Ashanti 70% and manager,
Independence Group NL 30%), the contract for construction of the 220km site
access road was awarded during the quarter. Major approvals for the road were
obtained and construction has begun. In April, the EPCM contract with Lycopodium
was executed and the open-pit mining contract was nearing completion. Tenders
were issued for the long lead-time, major equipment packages. Detailed
engineering design of the plant and infrastructure is underway and will be
carried out in parallel with road construction, while plant construction is
scheduled to begin early in 2012. Boston Shaker feasibility study work during
the quarter included metallurgical testing, resource modelling, pit
optimisations and design. It is anticipated that reserves and resources for
Boston Shaker will be updated by mid 2011. A two-year pre-feasibility study on
Havana Deeps was approved by the Tropicana JV partners during the quarter and
drilling to support the study began in late March. The study will examine the
best options for exploiting the Havana Deeps mineralisation, including mining
using an expanded pit with an underground operation beneath the pit, or using an
underground mine below the current planned pit design.
EXPLORATION
Total exploration expenditure during the first quarter, inclusive of expenditure
at equity accounted joint ventures, was $71m ($26m on brownfield, $25m on
greenfield and $20m on pre-feasibility studies), compared with $65m the previous
quarter ($23m on brownfield, $26m on greenfield and $16m on pre-feasibility
studies). The following are highlights from the company`s exploration activities
during the quarter. More detail on AngloGold Ashanti`s exploration programme can
be found at www.anglogoldashanti.com.
Greenfield exploration activities were undertaken in six regions (Australia,
Americas, China, Southeast Asia, Sub- Saharan Africa and the Middle East & North
Africa) during the first quarter. A total of 35,801m of diamond, RC and AC
drilling was completed at existing priority targets and used to delineate new
targets in Australia, Guinea, Gabon, the DRC, Egypt and the Solomon Islands.
In Australia, in the Tropicana JV (AngloGold Ashanti 70%, Independence Group
30%) regional Greenfields exploration during the quarter was affected by
seasonal, but larger than anticipated, rainfall events in the Tropicana area and
adjacent goldfields. Exploration programs were impacted, but have re-commenced.
Regional geochemical sampling programs recommenced in February at the wholly-
owned Viking project, which lies southwest of the Tropicana JV within the
Albany-
Fraser foreland tectonic setting that hosts the Tropicana deposit. Aircore
drilling of geochemical anomalies and an airborne magnetic survey are planned
for the second quarter. In late 2010, AngloGold Ashanti entered a farm-in and
joint venture agreement with Stellar Resources over the Coronation Bore and
Gairdner projects in the Gawler Craton of South Australia, targeting world-class
Iron Oxide Copper Gold mineralisation. Land access negotiations have progressed
with expectations of commencing geophysical surveys in the second quarter. At
the Cornelia Range project, located in central Western Australia, land access
negotiations advanced during the quarter and planning commenced for airborne
geophysical surveying and field reconnaissance. AngloGold Ashanti withdrew from
the Saxby JV (NW Queensland) with Falcon Minerals Limited in February 2011 and
has no further interest in the project.
Greenfields exploration in the Americas during the first quarter of 2011
continued focusing on early stage exploration in Colombia, Canada, USA, Brazil
and Argentina. In Canada, joint-venture partner Commander Resources is preparing
for the field season at the Baffin Island Gold Project in Nunavut. In Brazil, at
the Falcao Joint Venture, 100m x 50m spaced infill soil sampling has been
extended along strike to cover prospective areas of the target structure
highlighted by the geophysics. To date 11 lines with a total length of 46.1km
have been sampled. Drill testing is scheduled to commence in May. In Colombia,
field teams continued rock and soil sampling and mapping at Quebradona. In
March, a diamond drilling program was initiated at the Chaquiro Project. A total
of 694m were drilled in Q1 and drilling at Chaquiro continues. At the Colosa
project area, where AngloGold Ashanti now has four rigs working, a series of
strong drill results continue to confirm the company`s confidence in the ore
body. In the Solomon Islands, exploration activities continued at the Kele and
Mase joint ventures with XDM Resources. Tenement applications associated with
two additional joint venture agreements covering the New Georgia and Vangunu
project areas progressed. At Kele, diamond drilling resumed in late February,
with 997m of drilling completed during the quarter. Other work included
mechanical trenching totalling 1.71km and geochemical sampling with work
focussed in the Babatia, Tango West, Konga, Arovo and Vulu prospect areas.
Specialist activities included further geophysical, structural and spectral
studies of the established mineralised prospect areas.
In the Democratic Republic of the Congo, regional exploration continued on
Ashanti Goldfields Kilo`s (AGK) 5,487km2 Kilo project. A 5,000m diamond drilling
programme over key targets in the regional Kilo area that commenced last quarter
at Mont Tsi continued and a total of 1,212m over four holes were drilled to test
the mineralisation in and around intrusive bodies. Preliminary results are
encouraging with hole MTDD001 returning an intercept of 23.03m @ 3.08 g/t Au. A
follow-up soil sampling grid comprising 1,275 samples has been completed on the
2010 stream sediment sampling anomaly. Several soil anomalies have been
identified so far and further investigations are underway. Follow-up of regional
soil anomalies by trenching, detailed mapping and sampling is ongoing in the
northern and central areas with encouraging results. In Gabon, drilling
continued on the Ndjole licence being explored in a joint venture with Dome
Ventures. To date, a total of 3,000m has been drilled at the LaMboumi prospect.
Extensive sampling has been carried out with 16,000 samples on the Dome JV
licences and 5,200 samples on AngloGold Ashanti`s own exploration licences, with
robust anomalies that will be tested in the coming months. An EM and magnetic
survey was flown during the first quarter over the Ndjole licence and
preliminary results show that the prospective lithologies can be mapped in
detail below the soil cover with the EM. This geophysical data will be used to
generate further drill targets in the short term and direct the continuing soil
sampling programme.
In Tanzania, a field mapping exercise was undertaken on the Lusahunga licences,
some 150km west of Geita Gold Mine, to test the initial interpretation of
airborne geophysical data from a survey completed in 2010. Grab samples yielded
encouraging results up to 11 g/t Au and a follow-up sampling and drilling
programme is being planned for later in the year.
In Guinea, regional exploration work including soil sampling and drilling
continued on Blocks 2 and 4 that form part of the greater Siguiri mine tenement.
At the end of the first quarter, a total of 6,763 soil samples have been
collected, including 2,454 from Block 2 and 4,309 from Block 4. The first phase
of diamond drilling to better understand the geological model and mineralisation
controls at Saraya (Block 2) has been completed. A total of 2,058m over 8 holes
were drilled during the quarter and interpretation of the results is in
progress. The first phase of reconnaissance aircore drilling in Block 3
(Kounkoun) was also completed with a total of 9,840m over 107 holes. The
interpretation of the findings is underway and preliminary results are
encouraging. A reconnaissance aircore drilling programme in the Corridor Block
was carried out and by the end of the first phase a total of 6,775m over 96
holes had been drilled.
Greenfields exploration in the Middle East and North Africa region is being
undertaken by Thani Ashanti; a 50:50 Strategic Alliance between AngloGold
Ashanti and Thani Investments. During the first quarter, 1,822m of drilling was
completed and results have been received from three of the nine holes. The
results include:
12m @ 3.6 g/t Au from 178m;
14m @ 2.9 g/t Au from 193m;
6m @ 4.3 g/t Au from 155m;
8m @ 2.3 g/t Au from 168m;
1m @ 15.7 g/t Au from 133m;
6m @ 1.8 g/t Au from 175m.
Hutite is an historical underground gold mine, which ceased operations in 1952.
While historical production figures are unknown, the deposit has many
characteristics of other orogenic gold deposits throughout the world.
Mineralisation, including significant visible gold, has been defined by drilling
over a strike length of 1.5km and remains open along strike and at depth. A
second rig is scheduled to start drilling in April.
In Eritrea, the 10,000 line km airborne EM, magnetic and radiometric survey was
completed at the Kerkasha and Akordat North exploration licences. The
preliminary results of this survey are currently being interpreted and surface
geochemical programmes have commenced.
Thani Ashanti signed a Heads of Terms with Stratex International in 2010 signed
a Joint Venture Agreement in April 2011. The JV is for 11 exploration licences
in the Afar region of Ethiopia and Djibouti and will explore for low-
sulphidation, bonanza epithermal deposits. As part of this agreement, Thani
Ashanti has a minimum exploration commitment of US$1M, and can earn 51% interest
in the licences by spending US$3M. In addition, Thani Ashanti has completed a
US$0.5M private placement into Stratex International. Encouraging surface sample
results from the Megenta prospect in Ethiopia will be followed up with 3,000m
drill programme in the second quarter. In addition, the Asal and Dimoli Khan ELs
in Djibouti have returned positive rock chip assays, with eight of eighteen
samples from Asal assaying between 0.22 - 3.08 g/t Au.
OUTLOOK
Second quarter production is expected to be around 1.09Moz. Given stronger,
volatile currencies and fuel prices, AngloGold Ashanti is guiding second-quarter
total cash costs at $760/oz (R6.75/$, Brent crude $120/bl) and equivalent
Australian dollar and Brazilian real rates. The quarter-on-quarter increase is
influenced by stronger local currencies, higher fuel prices and electricity
costs. The above numbers include accounting for deferred stripping charges at
$14/oz.
Review of the Gold Market
Gold price movement and investment markets
Gold price data
The gold price traded as low as $1,308/oz at the beginning of the year as
investors moved out of safe-haven holdings into riskier assets, before
recovering steadily to current near-record levels. Civil unrest in the Middle
East and North Africa unnerved oil markets and resulted in Brent Crude trading
well above the key $100/barrel, with the prospects of continued elevated prices
while a speedy resolution of the Libyan conflict looks increasingly unlikely.
The consequences of higher oil prices and concomitant inflationary implications
have raised questions about the sustainability of the nascent global economic
recovery. Widespread civil unrest in the Middle East and North Africa, continued
debt concerns among European Union members and growing uncertainty over the
United States long-term macroeconomic outlook - underscored by Standard & Poor`s
surprise 18 April 2011 downgrade of the outlook on US debt to `negative` have
propelled the gold price to new record levels above $1,500/oz.
Investment demand
Despite the rebound in the gold price from February onwards, total ETF
investment holdings still reflect a net redemption of 1.72Moz, or 2.5% of the
gross holdings over the quarter, relative to the start of the year. Gross
holdings at the end of the first quarter were 66.81Moz or $95.3bn at $1,426/oz.
Much of the ETF sell-off in January was attributed to a rebalancing of
portfolios as investors banked gains resulting from the 30% rise in the gold
price in 2010. Global sales of bar and coin in 2010 amounted to some 60% of
investment demand, with ETFs accounting for 20%. It is also worth noting that
the rate of bar and coin outflows in the March quarter is likely to have been
less than ETF sales as coins and bars are not as easy to sell as ETFs. The COMEX
positioning, whilst traditionally more volatile, also showed a net decrease over
the quarter. Having started at 28Moz net long, it finished 6% lower at 26.3Moz
net long. In India, gold medallion and bar sales for the first quarter were
higher than the same period last year. The Indian ETF market continued to grow.
During the quarter under review, new gold mutual funds were launched to tap mass
market demand for gold ETFs. China experienced another stellar quarter on the
investment front, with an estimated year-on-year increase of some 50%. In the
US, coin and bar demand remained strong, though with no anecdotal evidence of a
repeat in coin minting shortfalls.
Official sector
The World Gold Council released a report during the quarter which confirmed
widespread expectations that the official sector was a net purchaser of gold in
2010. This marks the first time since 1998 that the sector has contributed to
demand, rather than being a significant source of supply. Continuing sovereign
debt concerns in the Eurozone are likely to keep bullion in central banks
vaults, while the trend of emerging nations bolstering gold reserves is also
expected to continue.
Jewellery sales
India`s gold resurgence continued in the first quarter of 2011 as January and
February import figures reflected a 28% increase in volume terms over the same
period last year. After a record 2010, consumption still remained robust at the
beginning of the year due to a drop in gold prices and relative stability during
the beginning of the auspicious period. An interesting trend has developed in
India, with consumers advancing money to retailers to book prices when there is
a significant drop. As a result of this trend, retailers are flush with welcome
working capital. A further development saw significant demand for bars and
coins, not for investment but to be converted into jewellery during the marriage
season. China experienced its strongest quarter for gold jewellery demand in
five years with an estimated 12% to 15% year-on-year increase. Remarkably,
demand remained very strong following the Chinese New Year period which
traditionally sees a dramatic slow down in demand. Eighteen-carat gold jewellery
once again failed to keep pace with pure gold, but still registered strong
growth of about 8%. During the first quarter, the beleaguered US market
continued to build upon its improved fourth-quarter performance, with many
retailers expressing some optimism for the future. A 4% increase in gold
jewellery demand is expected in the quarter under review. The low-end gold
market has been severely damaged by the twin blows recession and high gold
prices, but the higher-end market continues to grow.
Group income statement
Quarter Quarter
ended ended
March December
2011 2010
SA Rand million Notes Unaudited Unaudited
Revenue 2 10,402 11,095
Gold income 9,934 10,614
Cost of sales 3 (6,469) (7,016)
Gain (loss) on non-hedge derivatives and
other commodity contracts 4 11 (529)
Gross profit 3,476 3,069
Corporate administration, marketing and other
expenses (465) (518)
Exploration costs (397) (338)
Other operating expenses 5 (88) (27)
Special items 6 11 (208)
Operating profit 2,537 1,978
Interest received 55 119
Exchange gain 4 93
Fair value adjustment on option component of
convertible bonds 90 (280)
Finance costs and unwinding of obligations 7 (341) (357)
Fair value adjustment on mandatory
convertible bonds 139 (222)
Share of equity accounted investments` profit 81 63
Profit before taxation 2,565 1,394
Taxation 8 (864) (878)
Profit for the period 1,701 516
Allocated as follows:
Equity shareholders 1,658 404
Non-controlling interests 43 112
1,701 516
Basic earnings per ordinary share (cents) 1 430 105
Diluted earnings per ordinary share (cents) 2 429 105
Quarter Year
ended ended
March December
2010 2010
SA Rand million Unaudited Audited
Revenue 8,453 40,135
Gold income 8,222 38,833
Cost of sales (6,060) (25,833)
Gain (loss) on non-hedge derivatives and other
commodity contracts 59 (5,136)
Gross profit 2,221 7,864
Corporate administration, marketing and other expenses (301) (1,589)
Exploration costs (277) (1,446)
Other operating expenses (56) (149)
Special items (174) (894)
Operating profit 1,413 3,786
Interest received 65 311
Exchange gain 38 18
Fair value adjustment on option component of
convertible bonds 356 39
Finance costs and unwinding of obligations (239) (1,203)
Fair value adjustment on mandatory convertible bonds - (382)
Share of equity accounted investments` profit 163 467
Profit before taxation 1,796 3,036
Taxation (558) (2,018)
Profit for the period 1,238 1,018
Allocated as follows:
Equity shareholders 1,150 637
Non-controlling interests 88 381
1,238 1,018
Basic earnings per ordinary share (cents) 1 313 171
Diluted earnings per ordinary share (cents) 2 313 171
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
March December
2011 2010
US Dollar million Notes Unaudited Unaudited
Revenue 2 1,489 1,613
Gold income 1,422 1,543
Cost of sales 3 (926) (1,021)
Gain (loss) on non-hedge derivatives and
other commodity contracts 4 2 (77)
Gross profit 498 445
Corporate administration, marketing and other
expenses (66) (76)
Exploration costs (57) (49)
Other operating expenses 5 (13) (4)
Special items 6 1 (31)
Operating profit 363 285
Interest received 8 17
Exchange gain - 14
Fair value adjustment on option component of
convertible bonds 15 (41)
Finance costs and unwinding of obligations 7 (49) (52)
Fair value adjustment on mandatory
convertible bonds 22 (33)
Share of equity accounted investments` profit 12 9
Profit before taxation 371 199
Taxation 8 (123) (127)
Profit for the period 248 72
Allocated as follows:
Equity shareholders 241 56
Non-controlling interests 7 16
248 72
Basic earnings per ordinary share (cents) 1 62 15
Diluted earnings per ordinary share (cents) 2 62 14
Quarter Year
ended ended
March December
2010 2010
US Dollar million Unaudited Audited
Revenue 1,126 5,514
Gold income 1,095 5,334
Cost of sales (807) (3,550)
Gain (loss) on non-hedge derivatives and other
commodity contracts 13 (702)
Gross profit 301 1,082
Corporate administration, marketing and other expenses (40) (220)
Exploration costs (37) (198)
Other operating expenses (8) (20)
Special items (23) (126)
Operating profit 193 518
Interest received 9 43
Exchange gain 4 3
Fair value adjustment on option component of
convertible bonds 48 (1)
Finance costs and unwinding of obligations (32) (166)
Fair value adjustment on mandatory convertible bonds - (55)
Share of equity accounted investments` profit 22 63
Profit before taxation 244 405
Taxation (76) (276)
Profit for the period 168 129
Allocated as follows:
Equity shareholders 157 76
Non-controlling interests 11 53
168 129
Basic earnings per ordinary share (cents) 1 43 20
Diluted earnings per ordinary share (cents) 2 43 20
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 Year
ended ended ended ended
March December March December
2011 2010 2010 2010
SA Rand million Unaudited Unaudited Unaudited Audited
Profit for the period 1,701 516 1,238 1,018
Exchange differences on
translation of foreign
operations 474 (759) (280) (1,766)
Share of equity accounted
investments` other
comprehensive (expense) income (2) 1 - (1)
Net loss on cash flow hedges - - (1) -
Net loss on cash flow
hedges removed from
equity and reported in gold
income - - 279 279
Realised gain on hedges of
capital items 1 1 1 3
Deferred taxation thereon - - (98) (99)
1 1 181 183
Net (loss) gain on
available-for-sale
financial assets (11) 403 (45) 545
Release on disposal and
impairment of
available-for-sale
financial assets - (299) - (340)
Deferred taxation thereon - - 1 13
(11) 104 (44) 218
Actuarial loss recognised - (175) - (175)
Deferred taxation thereon
Deferred taxation thereon 47
- 47 -
- (128) - (128)
Other comprehensive income
(expense)
for the period net of tax 462 (781) (143) (1,494)
Total comprehensive income
(expense)
for the period net of tax 2,163 (265) 1,095 (476)
Allocated as follows:
Equity shareholders 2,120 (377) 1,007 (857)
Non-controlling interests 43 112 88 381
2,163 (265) 1,095 (476)
Rounding of figures may result in computational discrepancies.
Group statement of comprehensive income
Quarter Quarter Quarter Year
ended ended ended ended
March December March December
2011 2010 2010 2010
US Dollar million Unaudited Unaudited Unaudited Audited
Profit for the period 248 72 168 129
Exchange differences on
translation of foreign
operations (48) 123 22 213
Share of equity accounted
investments` other
comprehensive (expense) income - - - -
Net loss on cash flow hedges - - - -
Net loss on cash flow
hedges removed from
equity and reported in gold
income - - 37 38
Realised gain on hedges of
capital items - - - -
Deferred taxation thereon - - (13) (13)
- - 24 25
Net (loss) gain on
available-for-sale
financial assets (2) 56 (6) 75
Release on disposal and
impairment of
available-for-sale
financial assets - (41) - (47)
Deferred taxation thereon - - - 2
(2) 15 (6) 30
Actuarial loss recognised - (24) - (24)
Deferred taxation thereon - 6 - 6
- (18) - (18)
Other comprehensive
(expense) income
for the period net of tax (50) 120 40 250
Total comprehensive income
for the period net of tax 198 192 208 379
Allocated as follows:
Equity shareholders 191 176 197 326
Non-controlling interests 7 16 11 53
198 192 208 379
Rounding of figures may result in computational discrepancies.
Group statement of financial position
As at As at As at
March December March
2011 2010 2010
SA Rand million Note Unaudited Audited Unaudited
ASSETS
Non-current assets
Tangible assets 41,488 40,600 42,476
Intangible assets 1,325 1,277 1,309
Investments in associates and
equity accounted joint ventures 4,337 4,087 4,795
Other investments 1,677 1,555 1,315
Inventories 2,453 2,268 2,485
Trade and other receivables 1,099 1,000 867
Derivatives - - 19
Deferred taxation 87 131 349
Cash restricted for use 131 214 364
Other non-current assets 68 59 99
52,665 51,191 54,078
Current assets
Inventories 6,082 5,848 5,216
Trade and other receivables 1,878 1,625 1,517
Derivatives 17 6 1,517
Current portion of other
non-current assets 27 4 2
Cash restricted for use 123 69 118
Cash and cash equivalents 4,187 3,776 5,346
12,314 11,328 13,716
Non-current assets held for sale 10 110 665
12,324 11,438 14,381
TOTAL ASSETS 64,989 62,629 68,459
EQUITY AND LIABILITIES
Share capital and premium 11 45,742 45,678 39,884
Retained earnings and other
reserves (17,641) (19,470) (17,465)
Non-controlling interests 874 815 956
Total equity 28,975 27,023 23,375
Non-current liabilities
Borrowings 16,991 16,877 4,809
Environmental rehabilitation and
other provisions 4,025 3,873 3,383
Provision for pension and
post-retirement benefits 1,268 1,258 1,181
Trade, other payables and
deferred income 112 110 144
Derivatives 1,093 1,158 941
Deferred taxation 6,428 5,910 5,661
29,917 29,186 16,119
Current liabilities
Current portion of borrowings 312 886 7,095
Trade, other payables and
deferred income 4,645 4,630 3,867
Derivatives - - 16,674
Taxation 1,140 882 1,271
6,097 6,398 28,907
Non-current liabilities held for sale - 22 58
6,097 6,420 28,965
Total liabilities 36,014 35,606 45,084
TOTAL EQUITY AND LIABILITIES 64,989 62,629 68,459
Rounding of figures may result in computational discrepancies.
Group statement of financial position
As at As at As at
March December March
2011 2010 2010
US Dollar million Note Unaudited Audited Unaudited
ASSETS
Non-current assets
Tangible assets 6,132 6,180 5,823
Intangible assets 196 194 180
Investments in associates and
equity accounted joint ventures 641 622 657
Other investments 248 237 180
Inventories 363 345 340
Trade and other receivables 162 152 119
Derivatives - - 3
Deferred taxation 13 20 48
Cash restricted for use 19 33 50
Other non-current assets 10 9 14
7,784 7,792 7,414
Current assets
Inventories 899 890 715
Trade and other receivables 277 247 208
Derivatives 3 1 208
Current portion of other
non-current assets 4 1 -
Cash restricted for use 18 10 16
Cash and cash equivalents 619 575 733
1,820 1,724 1,880
Non-current assets held for sale 2 16 91
1,822 1,740 1,971
TOTAL ASSETS 9,606 9,532 9,385
EQUITY AND LIABILITIES
Share capital and premium 11 6,637 6,627 5,811
Retained earnings and other
reserves (2,483) (2,638) (2,738)
Non-controlling interests 129 124 131
Total equity 4,283 4,113 3,204
Non-current liabilities
Borrowings 2,511 2,569 659
Environmental rehabilitation and
other provisions 595 589 464
Provision for pension and
post-retirement benefits 187 191 162
Trade, other payables and
deferred income 16 17 20
Derivatives 162 176 129
Deferred taxation 950 900 776
4,421 4,442 2,210
Current liabilities
Current portion of borrowings 46 135 973
Trade, other payables and
deferred income 687 705 530
Derivatives - - 2,286
Taxation 169 134 174
902 974 3,963
Non-current liabilities held for sale - 3 8
902 977 3,971
Total liabilities 5,323 5,419 6,181
TOTAL EQUITY AND LIABILITIES 9,606 9,532 9,385
Rounding of figures may result in computational discrepancies.
Group statement of cash flows
Quarter Quarter Quarter Year
ended ended ended ended
March December March December
2011 2010 2010 2010
SA Rand million Unaudited Unaudited Unaudited Audited
Cash flows from operating
activities
Receipts from customers 10,123 10,955 8,166 39,717
Payments to suppliers and
employees (6,596) (5,944) (6,640) (26,682)
Cash generated from operations 3,527 5,011 1,526 13,035
Dividends received from
equity accounted investments 203 218 117 939
Taxation paid (123) (153) (317) (1,371)
Cash utilised for hedge
buy-back costs - (7,312) - (18,333)
Net cash inflow (outflow)
from operating activities 3,607 (2,236) 1,326 (5,730)
Cash flows from investing
activities
Capital expenditure (1,635) (2,470) (1,267) (7,108)
Proceeds from disposal of
tangible assets 12 12 16 500
Other investments acquired (215) (152) (120) (832)
Acquisition of associates
and equity accounted joint
ventures (166) (100) (72) (319)
Proceeds on disposal of
associate - - 4 4
Loans advanced to
associates and equity
accounted joint ventures - - (17) (22)
Proceeds from disposal of
subsidiary 62 - - -
Cash in subsidiary disposed (77) - - -
Proceeds from disposal of
investments 105 578 54 1,039
Decrease (increase) in cash
restricted for use 31 8 (3) 182
Interest received 54 59 59 232
Loans advanced - (8) (37) (41)
Repayment of loans advanced - 2 1 3
Net cash outflow from
investing activities (1,829) (2,071) (1,382) (6,362)
Cash flow s from financing
activities
Proceeds from issue of
share capital 5 31 3 5,656
Share issue expenses - (31) - (144)
Proceeds from borrowings - 1,880 264 16,666
Repayment of borrowings (1,080) (2,400) (2,642) (12,326)
Finance costs paid (122) (398) (76) (821)
Mandatory convertible bond
transaction costs - (30) - (184)
Dividends paid (306) (139) (260) (846)
Net cash (outflow) inflow
from financing activities (1,503) (1,087) (2,711) 8,001
Net increase (decrease) in
cash and cash equivalents 275 (5,394) (2,767) (4,091)
Translation 63 (70) (63) (236)
Cash and cash equivalents
at beginning of period 3,849 9,313 8,176 8,176
Cash and cash equivalents
at end of period (1) 4,187 3,849 5,346 3,849
Cash generated from operations
Profit before taxation 2,565 1,394 1,796 3,036
Adjusted for:
Movement on non-hedge
derivatives and other
commodity contracts (11) 499 (672) 2,946
Amortisation of tangible assets 1,294 1,341 1,267 5,022
Finance costs and unwinding
of obligations 341 357 239 1,203
Environmental, rehabilitation
and other expenditure 1 470 30 535
Special items 45 279 169 1,076
Amortisation of intangible assets 4 7 4 18
Deferred stripping 141 156 204 921
Fair value adjustment on
option component of
convertible bonds (90) 280 (356) (39)
Fair value adjustment on
mandatory convertible bonds (139) 222 - 382
Interest received (55) (119) (65) (311)
Share of equity accounted
investments` profit (81) (63) (163) (467)
Other non-cash movements 43 133 21 250
Movements in working capital (531) 55 (948) (1,537)
3,527 5,011 1,526 13,035
Movements in working capital
Increase in inventories (354) (101) (97) (667)
Increase in trade and other
receivables (497) (200) (302) (781)
Increase (decrease) in
trade and other payables 320 356 (549) (89)
(531) 55 (948) (1,537)
(1) The cash and cash equivalents balance at 31 December 2010 includes cash and
cash equivalents included on the statement of financial position as part of non-
current assets held for sale of R73m.
Rounding of figures may result in computational discrepancies.
Group statement of cash flows
Quarter Quarter Quarter Year
ended ended ended ended
March December March December
2011 2010 2010 2010
US Dollar million Unaudited Unaudited Unaudited Audited
Cash flows from operating
activities
Receipts from customers 1,451 1,589 1,086 5,448
Payments to suppliers and
employees (950) (925) (881) (3,734)
Cash generated from operations 501 664 205 1,714
Dividends received from
equity accounted investments 30 39 16 143
Taxation paid (18) (24) (42) (188)
Cash utilised for hedge
buy-back costs - (1,061) - (2,611)
Net cash inflow (outflow)
from operating activities 513 (382) 179 (942)
Cash flows from investing
activities
Capital expenditure (234) (350) (169) (973)
Proceeds from disposal of
tangible assets 2 2 2 69
Other investments acquired (31) (23) (16) (114)
Acquisition of associates
and equity accounted joint
ventures (24) (15) (10) (44)
Proceeds on disposal of associate - - 1 1
Loans advanced to
associates and equity
accounted joint ventures - - (2) (3)
Proceeds from disposal of
subsidiary 9 - - -
Cash in subsidiary disposed (11) - - -
Proceeds from disposal of
investments 15 80 7 142
Decrease in cash restricted
for use 5 2 - 25
Interest received 8 8 8 32
Loans advanced - (1) (5) (6)
Repayment of loans advanced - - - -
Net cash outflow from
investing activities (261) (297) (184) (871)
Cash flows from financing
activities
Proceeds from issue of
share capital 1 4 - 798
Share issue expenses - (4) - (20)
Proceeds from borrowings - 276 35 2,316
Repayment of borrowings (152) (324) (352) (1,642)
Finance costs paid (18) (58) (10) (115)
Mandatory convertible bond
transaction costs - (4) - (26)
Dividends paid (43) (20) (35) (117)
Net cash (outflow) inflow
from financing activities (212) (130) (362) 1,194
Net increase (decrease) in
cash and cash equivalents 40 (809) (367) (619)
Translation (7) 57 - 105
Cash and cash equivalents
at beginning of period 586 1,338 1,100 1,100
Cash and cash equivalents
at end of period (1) 619 586 733 586
Cash generated from operations
Profit before taxation 371 199 244 405
Adjusted for:
Movement on non-hedge
derivatives and other
commodity contracts (2) 72 (94) 408
Amortisation of tangible assets 185 195 169 690
Finance costs and unwinding
of obligations 49 52 32 166
Environmental, rehabilitation
and other expenditure - 69 4 78
Special items 7 42 23 152
Amortisation of intangible assets 1 1 - 2
Deferred stripping 20 23 27 125
Fair value adjustment on option
component of convertible bonds (15) 41 (48) 1
Fair value adjustment on
mandatory convertible bonds (22) 33 - 55
Interest received (8) (17) (9) (43)
Share of equity accounted
investments` profit (12) (9) (22) (63)
Other non-cash movements 7 19 3 37
Movements in working capital (80) (56) (124) (299)
501 664 205 1,714
Movements in working capital
Increase in inventories (17) (85) (33) (236)
Increase in trade and other
receivables (66) (46) (45) (142)
Increase (decrease) in
trade and other payables 3 75 (46) 79
(80) (56) (124) (299)
(1) The cash and cash equivalents balance at 31 December 2010 includes cash and
cash equivalents included on the statement of financial position as part of non-
current assets held for sale of $11m.
Rounding of figures may result in computational discrepancies.
Group statement of changes in equity
Equity holders of the parent
Share
capital Other
and capital Retained
SA Rand million premium reserves earnings
Balance at 31 December 2009 39,834 1,194 (25,739)
Profit for the period 1,150
Other comprehensive (expense) income
Total comprehensive income (expense) - - 1,150
Shares issued 50
Share-based payment for share awards
net of exercised 45
Dividends paid (255)
Dividends of subsidiaries
Translation (2) 22
Balance at 31 March 2010 39,884 1,237 (24,822)
Balance at 31 December 2010 45,678 1,275 (25,437)
Profit for the period 1,658
Other comprehensive income (expense) (2)
Total comprehensive income (expense) - (2) 1,658
Shares issued 64
Share-based payment for share awards
net of exercised 31
Dividends paid (306)
Translation 8 (39)
Balance at 31 March 2011 45,742 1,312 (24,124)
US Dollar million
Balance at 31 December 2009 5,805 161 (2,744)
Profit for the period 157
Other comprehensive income (expense)
Total comprehensive income (expense) - - 157
Shares issued 6
Share-based payment for share awards
net of exercised 6
Dividends paid (35)
Dividends of subsidiaries
Translation 3 (3)
Balance at 31 March 2010 5,811 170 (2,625)
Balance at 31 December 2010 6,627 194 (2,750)
Profit for the period 241
Other comprehensive expense
Total comprehensive income (expense) - - 241
Shares issued 10
Share-based payment for share awards
net of exercised 5
Dividends paid (43)
Translation (5) 5
Balance at 31 March 2011 6,637 194 (2,547)
Equity holders of the parent
Cash Available Foreign
flow for Actuarial currency
hedge sale (losses) translation
SA Rand million reserve reserve gains reserve
Balance at 31 December 2009 (174) 414 (285) 6,314
Profit for the period
Other comprehensive
(expense) income 181 (44) (280)
Total comprehensive income
(expense) 181 (44) - (280)
Shares issued
Share-based payment for
share awards
net of exercised
Dividends paid
Dividends of subsidiaries
Translation (6)
Balance at 31 March 2010 7 364 (285) 6,034
Balance at 31 December 2010 (15) 568 (409) 4,548
Profit for the period
Other comprehensive income
(expense) 1 (11) 474
Total comprehensive income
(expense) 1 (11) - 474
Shares issued
Share-based payment for
share awards
net of exercised
Dividends paid
Translation 16 (1)
Balance at 31 March 2011 (14) 573 (410) 5,022
US Dollar million
Balance at 31 December 2009 (23) 56 (38) (317)
Profit for the period
Other comprehensive income
(expense) 24 (6) 22
Total comprehensive income
(expense) 24 (6) - 22
Shares issued
Share-based payment for
share awards
net of exercised
Dividends paid
Dividends of subsidiaries
Translation (1)
Balance at 31 March 2010 1 50 (39) (295)
Balance at 31 December 2010 (2) 86 (62) (104)
Profit for the period
Other comprehensive expense (2) (48)
Total comprehensive income
(expense) - (2) - (48)
Shares issued
Share-based payment for
share awards net of exercised
Dividends paid
Translation 1 1
Balance at 31 March 2011 (2) 85 (61) (152)
Non-
controlling Total
SA Rand million Total interests equity
Balance at 31 December 2009 21,558 966 22,524
Profit for the period 1,150 88 1,238
Other comprehensive (expense) income (143) (143)
Total comprehensive income (expense) 1,007 88 1,095
Shares issued 50 50
Share-based payment for share awards
net of exercised 45 45
Dividends paid (255) (255)
Dividends of subsidiaries - (84) (84)
Translation 14 (14) -
Balance at 31 March 2010 22,419 956 23,375
Balance at 31 December 2010 26,208 815 27,023
Profit for the period 1,658 43 1,701
Other comprehensive income (expense) 462 462
Total comprehensive income (expense) 2,120 43 2,163
Shares issued 64 64
Share-based payment for share awards
net of exercised 31 31
Dividends paid (306) (306)
Translation (16) 16 -
Balance at 31 March 2011 28,101 874 28,975
US Dollar million
Balance at 31 December 2009 2,900 130 3,030
Profit for the period 157 11 168
Other comprehensive income (expense) 40 40
Total comprehensive income (expense) 197 11 208
Shares issued 6 6
Share-based payment for share awards
net of exercised 6 6
Dividends paid (35) (35)
Dividends of subsidiaries - (11) (11)
Translation (1) 1 -
Balance at 31 March 2010 3,073 131 3,204
Balance at 31 December 2010 3,989 124 4,113
Profit for the period 241 7 248
Other comprehensive expense (50) (50)
Total comprehensive income (expense) 191 7 198
Shares issued 10 10
Share-based payment for share awards
net of exercised 5 5
Dividends paid (43) (43)
Translation 2 (2) -
Balance at 31 March 2011 4,154 129 4,283
Rounding of figures may result in computational discrepancies.
Segmental reporting
for the quarter ended 31 March 2011
AngloGold Ashanti`s operating segments are being reported based on the financial
information provided to the Chief Executive Officer and the Executive Management
team, collectively identified as the Chief Operating Decision Maker ("CODM").
Individual members of the Executive Management team are responsible for
geographic regions of the business.
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
SA Rand million
Gold income
South Africa 3,910 4,499 3,083 16,056
Continental Africa 3,805 3,654 3,082 13,604
Australasia 674 988 844 3,391
Americas 2,119 2,073 1,879 8,202
10,508 11,214 8,888 41,253
Equity accounted investments
included above (574) (600) (667) (2,420)
9,934 10,614 8,222 38,833
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
US Dollar million
Gold income
South Africa 560 654 410 2,207
Continental Africa 545 532 411 1,868
Australasia 97 143 113 466
Americas 303 301 250 1,124
1,505 1,630 1,184 5,665
Equity accounted investments
included above (82) (87) (89) (331)
1,422 1,543 1,095 5,334
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
SA Rand million
Gross profit (loss)
South Africa 1,469 (345) 797 3,180
Continental Africa
Continental Africa 1,132 4,412 815 4,219
Australasia 37 (513) (24) (1,452)
Americas 1,101 (317) 909 2,664
Corporate and other (49) 13 41 171
3,690 3,250 2,538 8,782
Equity accounted investments
included above (214) (180) (317) (918)
3,476 3,069 2,221 7,864
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
US Dollar million
Gross profit (loss)
South Africa 210 (50) 108 429
Continental Africa
Continental Africa 163 640 110 604
Australasia 5 (75) (3) (206)
Americas 158 (46) 122 357
Corporate and other (7) 2 5 23
529 471 343 1,207
Equity accounted investments
included above (31) (26) (42) (125)
498 445 301 1,082
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Unaudited
SA Rand million
Adjusted gross profit (loss)
excluding hedge buy-back
costs (1)
South Africa 1,469 1,652 387 4,580
Continental Africa 1,132 971 781 3,314
Australasia 37 279 (25) 217
Americas 1,090 863 771 3,563
Corporate and other (49) 13 41 171
3,678 3,778 1,955 11,845
Equity accounted
investments included above (214) (180) (317) (918)
3,464 3,598 1,638 10,927
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Unaudited
US Dollar million
Adjusted gross profit (loss)
excluding hedge buy-back
costs (1)
South Africa 210 239 51 634
Continental Africa 163 141 104 455
Australasia 5 41 (3) 33
Americas 156 125 103 487
Corporate and other (7) 2 5 23
527 548 260 1,632
Equity accounted
investments included above (31) (26) (42) (125)
497 522 218 1,507
(1) Refer to note B "Non-GAAP disclosure" for definition.
Rounding of figures may result in computational discrepancies.
Segmental reporting (continued)
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
kg
Gold production (1)
South Africa 12,466 14,801 11,949 55,528
Continental Africa 11,287 11,623 11,643 46,390
Australasia 2,244 3,175 3,552 12,313
Americas 6,306 6,105 6,431 26,187
32,303 35,703 33,574 140,418
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
oz (000)
Gold production (1)
South Africa 401 476 384 1,785
Continental Africa 363 374 374 1,492
Australasia 72 102 114 396
Americas 203 196 207 842
1,039 1,148 1,079 4,515
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
SA Rand million
Capital expenditure
South Africa 663 1,009 610 3,096
Continental Africa 436 685 204 1,708
Australasia 75 71 65 290
Americas 551 782 393 2,270
Corporate and other 14 25 11 49
1,740 2,572 1,283 7,413
Equity accounted investments
included above (105) (102) (16) (305)
1,635 2,470 1,267 7,108
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
US Dollar million
Capital expenditure
South Africa 95 144 81 424
Continental Africa 62 97 27 234
Australasia 11 10 9 40
Americas 79 111 52 311
Corporate and other 2 3 2 6
249 365 171 1,015
Equity accounted investments
included above (15) (15) (2) (42)
234 350 169 973
As at As at As at
Mar Dec Mar
2011 2010 2010
Unaudited Audited Unaudited
SA Rand million
Total assets
South Africa 16,275 16,226 16,892
Continental Africa 26,682 26,060 28,660
Australasia 4,000 3,644 4,208
Americas 14,656 13,855 14,692
Corporate and other 3,917 3,384 4,526
65,530 63,169 68,978
Equity accounted investments included above (541) (540) (518)
64,989 62,629 68,459
As at As at As at
Mar Dec Mar
2011 2010 2010
Unaudited Audited Unaudited
US Dollar million
Total assets
South Africa 2,406 2,469 2,316
Continental Africa 3,944 3,966 3,929
Australasia 591 555 577
Americas 2,166 2,109 2,014
Corporate and other 579 515 620
9,686 9,614 9,456
Equity accounted investments included above (80) (82) (71)
9,606 9,532 9,385
(1) Gold production includes equity accounted investments.
Rounding of figures may result in computational discrepancies.
Notes
for the quarter ended 31 March 2011
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 2010.
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 (as amended) for the preparation of
financial information of the group for the quarter ended 31 March 2011.
2. Revenue
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
SA Rand million
Gold income 9,934 10,614 8,222 38,833
By-products (note 3) 356 321 166 935
Royalties received 57 42 - 56
Interest received 55 119 65 311
10,402 11,095 8,453 40,135
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
US Dollar million
Gold income 1,422 1,543 1,095 5,334
By-products (note 3) 51 47 22 129
Royalties received 8 6 - 8
Interest received 8 17 9 43
1,489 1,613 1,126 5,514
3. Cost of sales
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
SA Rand million
Cash operating costs (5,107) (5,120) (4,773) (20,084)
Insurance reimbursement - - - 123
By-products revenue (note 2) 356 321 166 935
(4,751) (4,799) (4,607) (19,026)
Royalties (276) (313) (189) (1,030)
Other cash costs (50) (54) (37) (182)
Total cash costs (5,077) (5,166) (4,832) (20,238)
Retrenchment costs (28) (64) (52) (166)
Rehabilitation and other
non-cash costs (68) (529) (86) (756)
Production costs (5,173) (5,759) (4,971) (21,160)
Amortisation of tangible
assets (1,294) (1,341) (1,267) (5,022)
Amortisation of intangible
assets (4) (7) (4) (18)
Total production costs (6,471) (7,107) (6,242) (26,200)
Inventory change 2 92 182 367
(6,469) (7,016) (6,060) (25,833)
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
US Dollar million
Cash operating costs (730) (745) (636) (2,756)
Insurance reimbursement - - - 16
By-products revenue (note 2) 51 47 22 129
(679) (698) (614) (2,611)
Royalties (40) (45) (25) (142)
Other cash costs (7) (8) (5) (25)
Total cash costs (726) (751) (644) (2,778)
Retrenchment costs (4) (9) (7) (23)
Rehabilitation and other
non-cash costs (10) (78) (12) (109)
Production costs (740) (838) (663) (2,910)
Amortisation of tangible assets (185) (195) (169) (690)
Amortisation of intangible
assets (1) (1) - (2)
Total production costs (925) (1,034) (832) (3,602)
Inventory change (1) 13 24 52
(926) (1,021) (807) (3,550)
4. Gain (loss) on non-hedge derivatives and other commodity contracts
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
SA Rand million
Loss on realised non-hedge
derivatives - - (524) (2,073)
Loss on hedge buy-back costs - (7,316) - (18,954)
Gain on unrealised non-hedge
derivatives 11 6,787 583 15,891
11 (529) 59 (5,136)
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
US Dollar million
Loss on realised non-hedge
derivatives - - (69) (277)
Loss on hedge buy-back costs - (1,061) - (2,698)
Gain on unrealised non-hedge
derivatives 2 985 82 2,273
2 (77) 13 (702)
Rounding of figures may result in computational discrepancies.
5. Other operating expenses
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
SA Rand million
Pension and medical defined
benefit provisions (26) 45 (24) (28)
Claims filed by former
employees in respect of
loss of employment,
work-related accident
injuries and diseases,
governmental fiscal
claims and care and
maintenance of old
tailings operations (62) (72) (32) (121)
(88) (27) (56) (149)
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
US Dollar million
Pension and medical defined
benefit provisions (4) 7 (3) (3)
Claims filed by former
employees in respect of
loss of employment,
work-related accident
injuries and diseases,
governmental fiscal
claims and care and
maintenance of old
tailings operations (9) (11) (5) (17)
(13) (4) (8) (20)
6. Special items
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
SA Rand million
Indirect tax expenses and
legal claims (35) (46) (44) (125)
Mandatory convertible bonds
issue discount, underwriting and
professional fees - 5 - (396)
Net impairments of tangible
assets (note 9) (7) (399) (81) (634)
Recovery on consignment inventory - - - 39
Impairment of other receivables (7) (11) (33) (67)
Contractor termination costs
at Geita Gold
Mining Limited - - (5) (8)
Insurance claim recovery - 31 - 134
Royalties received 57 41 - 56
Net loss on disposal and
derecognition of land,
mineral rights, tangible
assets and
exploration properties (note 9) (11) (81) (11) (191)
Impairment of investment (note 9) - (16) - (16)
Profit on disposal of
investments (note 9) - 269 - 314
Profit on disposal of subsidiary
ISS International Limited (note 9) 14 - - -
11 (208) (174) (894)
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
US Dollar million
Indirect tax expenses and
legal claims (5) (6) (6) (17)
Mandatory convertible bonds
issue discount, underwriting and
professional fees - 1 - (56)
Net impairments of tangible
assets (note 9) (1) (59) (11) (91)
Recovery on consignment
inventory - - - 5
Impairment of other receivables (1) (2) (4) (9)
Contractor termination costs
at Geita Gold
Mining Limited - - (1) (1)
Insurance claim recovery - 4 - 19
Royalties received 8 6 - 8
Net loss on disposal and
derecognition of land,
mineral rights, tangible
assets and
exploration properties (note 9) (2) (11) (2) (25)
Impairment of investment (note 9) - (2) - (2)
Profit on disposal of
investments (note 9) - 37 - 43
Profit on disposal of subsidiary
ISS International Limited
(note 9) 2 - - -
1 (31) (23) (126)
7. Finance costs and unwinding of obligations
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
SA Rand million
Finance costs (248) (259) (142) (834)
Unwinding of obligations,
accretion of convertible bonds
and other discounts (93) (98) (97) (369)
(341) (357) (239) (1,203)
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
US Dollar million
Finance costs (36) (38) (19) (115)
Unwinding of obligations,
accretion of convertible bonds
and other discounts (13) (14) (13) (51)
(49) (52) (32) (166)
8. Taxation
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
SA Rand million
South African taxation
Non-mining tax (10) (53) (95) (112)
(Under) over provision prior year (5) 34 (12) 628
Deferred taxation
Temporary differences (403) 80 108 1,377
Unrealised non-hedge
derivatives and
other commodity contracts - (461) (160) (2,353)
Change in estimated deferred
tax rate - 39 29 39
(418) (361) (130) (421)
Foreign taxation
Normal taxation (367) (617) (337) (1,628)
Over provision prior year - 46 2 17
Deferred taxation
Temporary differences (79) 54 (92) 37
Unrealised non-hedge
derivatives and
other commodity contracts - - - (23)
(446) (517) (428) (1,597)
(864) (878) (558) (2,018)
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
US Dollar million
South African taxation
Non-mining tax (1) (8) (13) (13)
(Under) over provision prior year (1) 5 (2) 89
Deferred taxation
Temporary differences (58) 12 14 195
Unrealised non-hedge
derivatives and
other commodity contracts - (67) (22) (334)
Change in estimated deferred
tax rate - 6 4 6
(60) (52) (18) (57)
Foreign taxation
Normal taxation (52) (90) (45) (226)
Over provision prior year - 7 - 3
Deferred taxation
Temporary differences (11) 8 (13) 7
Unrealised non-hedge
derivatives and
other commodity contracts - - - (3)
(63) (75) (58) (219)
(123) (127) (76) (276)
Rounding of figures may result in computational discrepancies.
9. Headline earnings
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
SA Rand million
The profit attributable to
equity shareholders
has been adjusted by the
following to arrive
at headline earnings:
Profit attributable to
equity shareholders 1,658 404 1,150 637
Net impairments of tangible
assets (note 6) 7 399 81 634
Net loss on disposal and
derecognition of land,
mineral rights, tangible
assets and exploration
properties (note 6) 11 81 11 191
Impairment of investment
(note 6) - 16 - 16
Profit on disposal of ISS
International Limited
(note 6) (14) - - -
Profit on disposal of
investments (note 6) - (269) - (314)
Impairment of investment in
associates and joint ventures - 166 20 157
Reversal of impairment in
associates - (94) - (126)
Special items of associates - - - (7)
Taxation on items above -
current portion - - - 4
Taxation on items above -
deferred portion (6) (143) (21) (230)
1,656 561 1,241 962
Headline earnings per
ordinary share (cents) (1) 429 146 338 259
Diluted headline earnings
per ordinary share (cents) (2) 428 145 337 258
Quarter ended Year ended
Mar Dec Mar Dec
2011 2010 2010 2010
Unaudited Unaudited Unaudited Audited
US Dollar million
The profit attributable to
equity shareholders
has been adjusted by the
following to arrive
at headline earnings:
Profit attributable to
equity shareholders 241 56 157 76
Net impairments of tangible
assets (note 6) 1 59 11 91
Net loss on disposal and
derecognition of land,
mineral rights, tangible
assets and exploration
properties (note 6) 2 11 2 25
Impairment of investment (note 6) - 2 - 2
Profit on disposal of ISS
International Limited (note 6) (2) - - -
Profit on disposal of
investments (note 6) - (37) - (43)
Impairment of investment in
associates and joint ventures - 23 3 24
Reversal of impairment in
associates - (13) - (19)
Special items of associates - - - (1)
Taxation on items above -
current portion - - - -
Taxation on items above -
deferred portion (1) (21) (3) (33)
241 79 169 122
Headline earnings per
ordinary share (cents) (1) 62 21 46 33
Diluted headline earnings
per ordinary share (cents) (2) 62 20 46 33
(1) Calculated on the basic weighted average number of ordinary shares.
(2) Calculated on the diluted weighted average number of ordinary shares.
10. Number of shares
Quarter ended
Mar Dec
2011 2010
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 381,403,955 381,204,080
E ordinary shares in issue 2,774,290 2,806,126
Total ordinary shares: 384,178,245 384,010,206
A redeemable preference shares 2,000,000 2,000,000
B redeemable preference shares 778,896 778,896
In calculating the basic and diluted number of
ordinary shares outstanding
for the period, the following were taken into
consideration:
Ordinary shares 381,272,542 381,103,478
E ordinary shares 2,782,784 2,818,699
Fully vested options 1,587,017 797,875
Weighted average number of shares 385,642,343 384,720,052
Dilutive potential of share options 834,453 1,493,052
Diluted number of ordinary shares 386,476,796 386,213,104
Year ended
Mar Dec
2010 2010
Unaudited Audited
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 362,352,345 381,204,080
E ordinary shares in issue 3,709,362 2,806,126
Total ordinary shares: 366,061,707 384,010,206
A redeemable preference shares 2,000,000 2,000,000
B redeemable preference shares 778,896 778,896
In calculating the basic and diluted number of
ordinary shares outstanding
for the period, the following were taken into
consideration:
Ordinary shares 362,295,477 367,664,700
E ordinary shares 3,734,382 3,182,662
Fully vested options 1,186,849 1,023,459
Weighted average number of shares 367,216,708 371,870,821
Dilutive potential of share options 733,901 1,569,606
Diluted number of ordinary shares 367,950,609 373,440,427
11. Share capital and premium
As at
Mar Dec Mar
2011 2010 2010
Unaudited Audited Unaudited
SA Rand million
Balance at beginning of period 46,343 40,662 40,662
Ordinary shares issued 61 5,771 43
E ordinary shares cancelled (3) (90) (10)
Sub-total 46,401 46,343 40,695
Redeemable preference shares held within
the group (313) (313) (313)
Ordinary shares held within the group (136) (139) (205)
E ordinary shares held within the group (210) (213) (293)
Balance at end of period 45,742 45,678 39,884
As at
Mar Dec Mar
2011 2010 2010
Unaudited Audited Unaudited
US Dollar million
Balance at beginning of period 6,734 5,935 5,935
Ordinary shares issued 9 812 5
E ordinary shares cancelled (1) (13) (1)
Sub-total 6,742 6,734 5,939
Redeemable preference shares held within
the group (53) (53) (53)
Ordinary shares held within the group (21) (22) (31)
E ordinary shares held within the group (31) (32) (44)
Balance at end of period 6,637 6,627 5,811
Rounding of figures may result in computational discrepancies.
12. Exchange rates
Mar Dec Mar
2011 2010 2010
Unaudited Unaudited Unaudited
ZAR/USD average for the year to date 6.99 7.30 7.50
ZAR/USD average for the quarter 6.99 6.88 7.50
ZAR/USD closing 6.77 6.57 7.30
ZAR/AUD average for the year to date 7.03 6.71 6.78
ZAR/AUD average for the quarter 7.03 6.80 6.78
ZAR/AUD closing 6.99 6.70 6.68
BRL/USD average for the year to date 1.67 1.76 1.80
BRL/USD average for the quarter 1.67 1.70 1.80
BRL/USD closing 1.63 1.67 1.78
ARS/USD average for the year to date 4.01 3.91 3.83
ARS/USD average for the quarter 4.01 3.96 3.83
ARS/USD closing 4.05 3.97 3.87
13. Capital commitments
Mar Dec Mar
2011 2010 2010
Unaudited Audited Unaudited
SA Rand million
Orders placed and outstanding on
capital contracts at the prevailing rate
of exchange (1) 1,852 1,156 1,179
Mar Dec Mar
2011 2010 2010
Unaudited Audited Unaudited
US Dollar million
Orders placed and outstanding on
capital contracts at the prevailing rate
of exchange (1) 274 176 162
(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,
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 finance arrangements contain financial covenants
and other similar undertakings. To the extent that external borrowings are
required, the group`s covenant performance indicates that existing financing
facilities will be available to meet the above commitments. To the extent that
any of the financing facilities mature in the near future, the group believes
that sufficient measures are in place to ensure that these facilities can be
refinanced.
14. Contingencies
AngloGold Ashanti`s material contingent liabilities and assets at 31 March 2011
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) 642 95
Other tax disputes - Brazil (4) 266 39
Indirect taxes - Ghana (5) 73 11
ODMWA litigation (6) - -
Contingent assets
Royalty - Boddington Gold Mine (7) - -
Royalty - Tau Lekoa Gold Mine(8) - -
Financial Guarantees
Oro Group (Pty) Limited (9) 100 15
1,081 160
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 Crrego do Sito Mineracao S.A.
manages the operation and its attributable share of the first assessment is
approximately $59m. 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
company`s attributable share of the assessment is approximately $36m. 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 $10m.
AngloGold Ashanti 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 $29m.
(5) Indirect taxes - AngloGold Ashanti (Ghana) Limited received a tax assessment
for $11m during September 2009 in respect of 2006, 2007 and 2008 tax years,
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) Occupational Diseases in Mines and Works Act (ODMWA) litigation - The case
of Mr Thembekile Mankayi was heard in the High Court of South Africa in June
2008, and an appeal heard in the Supreme Court of Appeals in 2010. In both
instances judgement was awarded in favour of AngloGold Ashanti Limited. A
further appeal that was lodged by Mr Mankayi was heard in the Constitutional
Court in 2010. Judgement in the Constitutional Court was handed down on 3 March
2011.
Following the judgement, Mr Mankayi`s executor may proceed with his case in the
High Court. This will comprise, amongst others, providing evidence showing that
Mr Mankayi contracted silicosis as a result of negligent conduct on the part of
AngloGold Ashanti.
The company will defend the case and any subsequent claims on their merits.
Should other individuals or groups lodge similar claims, these too would be
defended by the company and adjudicated by the Courts on their merits. In view
of the limitation of current information for the accurate estimation of a
possible liability, no reliable estimate can be made for this possible
obligation.
(7) 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
commenced on 1 July 2010 and is capped at a total amount of $100m, R677m.
Royalties of $6m, R49m were received during the quarter.
(8) Royalty - As a result of the sale of the interest in the Tau Lekoa Gold Mine
during 2010, the group is entitled to receive a royalty on the production of a
total of 1.5Moz by the Tau Lekoa Gold Mine and in the event that the average
monthly rand price of gold exceeds R180,000/kg (subject to inflation
adjustment). Where the average monthly rand price of gold does not exceed
R180,000/kg (subject to inflation adjustment), the ounces produced in that
quarter do not count towards the total 1.5Moz upon which the royalty is payable.
The royalty will be determined at 3% of the net revenue (being gross revenue
less State royalties) generated by the Tau Lekoa assets. Royalties of $1m, R8m
were received during the quarter.
(9) 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 $15m, 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 recoverable value added tax and
fuel duties from the Tanzanian government:
- Recoverable value added tax due from the Tanzanian government amounts to $47m
at 31 March 2011 (31 December 2010: $49m). The last audited value added tax
return was for the period ended 31 October 2010 and at the reporting date the
audited amount was $47m. The outstanding amounts at Geita have been discounted
to their present value at a rate of 7.82%.
- Recoverable fuel duties from the Tanzanian government amounts to $67m at 31
March 2011 (31 December 2010: $62m). 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 the refund of fuel duties
amounting to $52m have been lodged with the Customs and Excise authorities which
are still outstanding, whilst claims for a refund of $15m have not yet been
submitted. The amounts outstanding have been discounted to their present value
at a rate of 7.82%.
16. Subsequent events
On 14 April 2011, AngloGold Ashanti Limited, the National Union of Mineworkers
(NUM), Solidarity, The Union (UASA), Izingwe Holdings (Proprietary) Limited and
the Bokamoso ESOP Board of Trustees announced the restructuring of the
empowerment transactions concluded respectively between the company and the
unions, and the company and Izingwe in 2006.
This restructuring was motivated by the fact that share price performance since
the onset of the 2008 global financial crisis led to a situation where the first
two tranches of E shares (otherwise known to participants as loan shares), which
operate essentially as share appreciation rights, vested and lapsed at no
additional value to Bokamoso ESOP beneficiaries and Izingwe.
In order to remedy this situation in a manner that would ensure an element of
value accruing to participants, though at a reasonable incremental cost to
AngloGold Ashanti shareholders, the scheme will be restructured as follows:
- all lapsed loan shares that vested without value will be reinstated;
- the strike (base) price will be fixed at R320 per share for the Bokamoso ESOP
and R330 for Izingwe;
- the notional interest charge will fall away;
- as previously, 50% of any dividends declared will be used to reduce the strike
price;
- as previously, the remaining 50% is paid directly to participants under the
empowerment transaction; and
- the life span of the scheme will be extended by an additional one year, the
last vesting being in 2014, instead of 2013. A minimum payout on vesting of the
E shares has been set at R40 each and a maximum payout of R70 each per E Share
for Izingwe and R90 each for members of the Bokamoso ESOP (i.e. employees), plus
the impact of the 50% of dividend flow. While the floor price provides certainty
to all beneficiaries of the empowerment transactions, the creation of a ceiling
serves to limit the cost to AngloGold Ashanti and its shareholders
The total incremental accounting cost to AngloGold Ashanti of the proposed
restructuring of the BEE Transaction which was subject to shareholders`
approval, is around R121m (approximately $18m) over the total vesting period of
the scheme, while the pro-forma impact on adjusted headline earnings and net
asset value per share is 0.4% and 0.2% respectively.
17. Borrowings
AngloGold Ashanti`s borrowings are interest bearing.
18. Announcements
Retirement of Deputy Chairman: Dr T J Motlatsi retired from the board of
AngloGold Ashanti, effective from 17 February 2011.
Mankayi case - Constitutional Court ruling: On 3 March 2011, AngloGold Ashanti
noted the decision of the Constitutional Court to grant Mr Mankayi leave to
appeal against the decision of the Supreme Court of Appeal, which itself upheld
the June 2008 Johannesburg High Court decision that employees who qualify for
benefits in respect of the Occupational Diseases in Mines and Works Act (ODMWA)
may not, in addition, lodge civil claims against their employers in respect of
their relevant conditions.
The company is still studying the details of the judgment and its initial
impression is that should the Executor of Mr Mankayi`s estate wish to pursue his
claim, he or she will now need to return to the High Court to continue with the
litigation action. AngloGold Ashanti will defend the case on its merits. Should
other individuals lodge similar claims, these too would ultimately be defended
by the company and judged on their merits.
Sunrise Dam, Australia: On 15 March 2011, AngloGold Ashanti announced that its
Sunrise Dam Gold Mine, situated 56km south of Laverton in Western Australia, had
been impacted by unprecedented heavy rains over the prior month. While open pit
mining had resumed, underground mining remained suspended for safety reasons,
with the expectation that Sunrise Dam would achieve normal mining rates in the
June Quarter. AngloGold Ashanti was therefore expecting that first quarter
guidance of 1.04Moz would be negatively impacted by approximately 20,000oz with
a consequential impact on total cash costs.
Proposed restructuring of the Black Economic Empowerment share ownership
transaction: On 14 April 2011 AngloGold Ashanti announced that it was proposing
to restructure its Black Economic Empowerment (BEE share ownership transaction
first announced in 2006, to ensure the intended benefits will accrue to its
recipients, namely its South African employees, through the Bokamoso ESOP trust
and BEE Partner, Izingwe Holdings (Proprietary) Limited (Izingwe) (an investment
company controlled by black investors) (proposed restructuring). See Note 16.
19. Dividend
Final Dividend No. 109 of 80 South African cents or 7.1181 UK pence or 17.38
cedis per ordinary share was paid to registered shareholders on 18 March 2011,
while a dividend of 2.275 Australian cents per CHESS Depositary Interest (CDI)
was paid on the same day. On 21 March 2011, holders of Ghanaian Depositary
Shares (GhDSs) were paid 0.1738 cedis per GhDS. Each CDI represents one-fifth of
an ordinary share, and 100 GhDSs represents one ordinary share. A dividend of
11.2599 US cents per American Depositary Share (ADS) was paid to holders of
American Depositary Receipts (ADRs) on 28 March 2011. Each ADS represents one
ordinary share.
Final Dividend No. E9 of 40 South African cents was paid to holders of E
ordinary shares on 18 March 2011, being those employees participating in the
Bokamoso ESOP and Izingwe Holdings (Proprietary) Limited.
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
9 May 2011
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)
F B Arisman #
R Gasant !
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
Michael Bedford
Telephone: +27 11 637 6273
Mobile: +27 82 374 8820
E-mail: mbedford@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@AngloGoldAshanti.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 the economic outlook for the gold mining industry, expectations
regarding gold prices, production, cash costs and other operating results,
growth prospects and outlook of AngloGold Ashanti`s operations, individually or
in the aggregate, including the completion and commencement of commercial
operations of certain of AngloGold Ashanti`s exploration and production projects
and the completion of announced mergers and acquisitions transactions, AngloGold
Ashanti`s liquidity, capital resources and capital expenditure and the outcome
and consequences of any litigation or regulatory proceedings and AngloGold
Ashanti`s Project One performance targets , 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
and other factors, refer to AngloGold Ashanti`s annual report for the year ended
31 December 2009, which was distributed to shareholders on 30 March 2010. These
factors are not necessarily all of the important factors that could cause
AngloGold Ashanti`s actual results to differ materially from those expressed in
any forward-looking statements. Other unknown or unpredictable factors could
also have material adverse effects on future results. The company`s annual
report on Form 20-F was filed with the Securities and Exchange Commission in the
United States on April 19, 2010 and was amended on May 18, 2010. AngloGold
Ashanti undertakes no obligation to update publicly or release any revisions to
these for ward-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. This communication contains certain "Non-GAAP" financial
measures. AngloGold Ashanti utilises certain Non-GAAP performance measures and
ratios in managing its business. Non-GAAP financial measures should be viewed in
addition to, and not as an alternative for, the reported operating results or
cash flow from operations or any other measures of performance prepared in
accordance with IFRS. In addition, the presentation of these measures may not be
comparable to similarly titled measures other companies may use. 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: 11/05/2011 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.
