| Thu 28 Jul 2005, 11:45 | | ANGLOGOLD ASHANTI LIMITED - REPORT TO SHAREHOLDERS |
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ANGLOGOLD ASHANTI LIMITED - REPORT TO SHAREHOLDERS FOR THE QUARTER AND SIX
MONTHS ENDED 30 JUNE 2005
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
GSE (Shares): AGA
GSE (GhDS): AADA
Euronext Paris: VA
Euronext Brussels: ANG
Report to shareholders
for the quarter and six months ended 30 June 2005
Group results ...
- Gold production steady at 1.569Moz.
- Strong financial performance, including $74m increase in profit
attributable to equity shareholders to $96m.
- Headline earnings adjusted for the effect of unrealised non-hedge
derivatives up 19% to $92m.
- Total cash costs down 2% to $278/oz, with South African total cash
costs 3% lower at R60,287/kg as a result of cost
cutting initiatives.
- Interim dividend of R1.70 ($0.25)/share declared.
Quarter Six months
ended ended ended ended
Jun Mar Jun Jun
2005 2005 2005 2004
Restated
SA rand / Metric
Operating review
Gold
Produced
- kg / oz (000) 48,792 48,808 97,600 80,972
Price received(1)
- R/kg / $/oz 87,314 82,152 84,739 84,152
Total cash costs
- R/kg / $/oz 57,351 54,778 56,064 54,456
Total production costs
- R/kg / $/oz 74,728 70,639 72,683 67,924
Financial review
Gross profit
- R / $ million 931 255 1,186 971
Gross profit adjusted
for the effect of
unrealised non-
hedge derivatives(2)
- R / $ million 765 676 1,441 1,593
Profit attributable
to equity
shareholders
- R / $ million 566 50 616 425
Headline earnings
- R / $ million 665 102 767 563
Headline earnings
adjusted for the
effect of unrealised
non-hedge
derivatives(3)
- R / $ million 604 464 1,069 956
Capital expenditure
- R / $ million 1,068 864 1,932 1,579
Earnings per
ordinary share
- cents/share
Basic 214 19 233 178
Diluted 214 19 232 171
Headline 251 39 290 236
Headline earnings
adjusted for the
effect of unrealised
non-hedge
derivatives(3)
- cents/share 228 175 404 401
Dividends
- cents/share 170 170
Quarter Six months
ended ended ended ended
Jun Mar Jun Jun
2005 2005 2005 2004
Restated
US dollar / Imperial
Operating review
Gold
Produced
- kg / oz (000) 1,569 1,569 3,138 2,603
Price received(1)
- R/kg / $/oz 422 424 423 393
Total cash costs
- R/kg / $/oz 278 284 281 254
Total production costs
- R/kg / $/oz 363 366 364 317
Financial review
Gross profit
- R / $ million 154 57 211 142
Gross profit adjusted
for the effect of
unrealised non-
hedge derivatives(2)
- R / $ million 117 112 230 240
Profit attributable
to equity
shareholders
- R / $ million 96 22 118 64
Headline earnings
- R / $ million 112 31 143 85
Headline earnings
adjusted for the
effect of unrealised
non-hedge
derivatives(3)
- R / $ million 92 77 169 147
Capital expenditure
- R / $ million 167 144 311 237
Earnings per
ordinary share
- cents/share
Basic 36 8 45 27
Diluted 36 8 45 26
Headline 42 12 54 36
Headline earnings
adjusted for the
effect of unrealised
non-hedge
derivatives(3)
- cents/share 35 29 64 62
Dividends
- cents/share 25 26
Notes: 1. Price received includes realised non-hedge derivatives.
2. Refer to note 5 of notes for the definition.
3. Refer to note 4 of notes for the definition.
$ represents US dollar, unless otherwise stated.
Rounding of figures may result in computational discrepancies.
Operations at a glance
for the quarter ended 30 June 2005
Price received(1) Production
% %
$/oz Variance(4) oz (000) Variance(4)
Sunrise Dam 483 14 131 -
Great Noligwa 433 (2) 174 (3)
TauTona 439 - 120 (8)
Mponeng 442 - 128 11
Kopanang 437 - 118 (2)
Morila (5) 429 1 67 -
AngloGold Ashanti
Mineracao 417 - 61 7
Siguiri (5) 426 (5) 80 86
Cripple Creek & Victor 359 (12) 71 (12)
Cerro Vanguardia (5) 381 (1) 51 (11)
Sadiola (5) 427 (3) 43 13
Serra Grande (5) 415 - 24 -
Obuasi 424 (5) 102 11
Iduapriem (5) 422 (5) 40 (13)
Geita 351 (6) 165 (14)
Tau Lekoa 438 (2) 68 5
Yatela (5) 428 - 23 -
Bibiani 426 (1) 30 (9)
Navachab 427 (1) 18 (5)
Savuka 441 (1) 33 3
Other 21 (4)
AngloGold Ashanti 422 - 1,569 -
Total cash costs Cash gross profit
(loss)(2)
% %
$/oz Variance(4) $m Variance(4)
Sunrise Dam 246 (12) 30 36
Great Noligwa 270 (3) 25 (4)
TauTona 243 (11) 23 10
Mponeng 278 (16) 21 62
Kopanang 283 (8) 17 21
Morila (5) 173 - 16 (6)
AngloGold Ashanti
Mineracao 161 10 15 (6)
Siguiri (5) 212 (46) 14 250
Cripple Creek & Victor 227 3 12 (25)
Cerro Vanguardia (5) 171 21 12 (20)
Sadiola (5) 256 (10) 7 17
Serra Grande (5) 153 4 7 -
Obuasi 324 (10) 5 (29)
Iduapriem (5) 339 18 4 (20)
Geita 331 55 3 (88)
Tau Lekoa 400 (7) 3 200
Yatela (5) 299 7 3 (25)
Bibiani 296 2 3 (40)
Navachab 362 (12) - (100)
Savuka 461 (17) (1) 67
Other 16 100
AngloGold Ashanti 278 (2) 235 2
Gross profit (loss)
adjusted for the
effect of
unrealised
non-hedge
derivatives(3)
%
$m Variance(4)
Sunrise Dam 21 62
Great Noligwa 21 5
TauTona 9 -
Mponeng 11 267
Kopanang 13 44
Morila (5) 11 (8)
AngloGold Ashanti
Mineracao 11 (15)
Siguiri (5) 9 350
Cripple Creek & Victor 2 (71)
Cerro Vanguardia (5) 7 (30)
Sadiola (5) 4 100
Serra Grande (5) 6 -
Obuasi (5) (400)
Iduapriem (5) 2 -
Geita (9) (190)
Tau Lekoa (2) 60
Yatela (5) 1 (50)
Bibiani (1) -
Navachab (1) -
Savuka (3) 40
Other 10 233
AngloGold Ashanti 117 4
(1) Price received includes realised non-hedge derivatives.
(2) Gross profit (loss) adjusted for the effect of unrealised
non-hedge derivatives plus amortisation of tangible and
intangible assets, less non-cash revenues.
(3) Refer to note 5 of notes for the definition.
(4) Variance June 2005 quarter on March 2005 quarter - increase (decrease).
(5) Attributable.
Rounding of figures may result in computational discrepancies.
Financial and operating review
OVERVIEW OF THE QUARTER
The June quarter has produced a good financial performance, with steady
operational results, in line with those of last quarter. Headline earnings
adjusted for the effect of unrealised non-hedge derivatives increased 19% to
$92m, of which $35m relates to the net positive effect of a statutory tax rate
reduction in Ghana to 25% for three years (and 28% thereafter).Profit
attributable to equity shareholders was $74m higher than that of the prior
quarter, due to the statutory tax rate reductions and as a result of unrealised
non-hedge derivative gains in the second quarter, compared with losses in the
first quarter of the year.
A combination of factors had led to a 4% increase in gross profit adjusted for
the effect of unrealised non- hedge derivatives of $117m. The weakening of the
rand contributed $16m to profitability, while savings arising from improved
efficiencies were partly offset by lower grades and inflationary increases,
with the sustained strength of the oil price continuing to have a negative
impact on open-pit operations.
As noted, production was consistent quarter-on- quarter, due to solid
performances from the Brazilian, Malian and Australian assets and to
significantly improved performances at several other operations, including
Siguiri in Guinea, which posted a 37,000oz production increase following the
first full quarter of operation of the newly commissioned carbon-in-pulp
plant.Obuasi in Ghana also continued on its course of operational improvement,
with production up 11% to 102,000oz and total cash costs down 10% to $324/oz.
An 11% production improvement at Mponeng helped to offset production declines
at several other South African operations, including TauTona and Great Noligwa.
After several excellent quarters, production at Geita in Tanzania decreased 14%
to 165,000oz and total cash costs climbed 55% to $331/oz, as a result of both
lower grades mined and reduced mining contractor efficiencies as the operation
starts the transition to owner-mining.
In Australia, the Sunrise Dam mine enjoyed another record production quarter of
131,000oz, equal to that of the first quarter, with total cash costs improving
11% to A$320/oz ($246/oz).
At the AngloGold Ashanti Mineracao operation in Brazil, gold production
increased 7% to 61,000oz, with total cash costs climbing 10% to $161/oz,
largely as a consequence of the 7% appreciation of the Brazilian real over the
quarter.The Cerro Vanguardia mine in Argentina saw lower tonnage and feed
grade, as planned in the production programme, with total cash costs 21% higher
at $171/oz, mainly due to retroactive January 2005 wage increases paid out
during the second quarter.
Turning to costs, globally increasing mining contractor rates, the strong oil
price and the generally higher price of consumables continue to require that
cost containment remains a key management focus across the group. The stringent
cost savings programmes noted last quarter are beginning to take effect and the
South African region in particular made strides over the quarter in achieving
its cost cutting targets, with local total cash costs at R60,287/kg
constituting a 3% improvement quarter-on- quarter.
Looking ahead, production for the third quarter is estimated to be 1.551Moz at
a total cash cost of $279/oz, assuming the following exchange rates to the US
dollar: R6.60; A$0.76; BRL2.4 and Argentinean peso 2.80.Capital expenditure for
the quarter is estimated at $277m and will be managed in line with
profitability.
After serving more than 30 years with AngloGold Ashanti and the Anglo American
and De Beers companies, CFO Jonathan Best will retire at the end of July 2005.
He is succeeded by Srinivasan Venkatakrishnan, currently deputy CFO, whose
professional history includes a senior position with Deloitte and Touche in
London, as well as the role of Finance Director of Ashanti from 2000, during
which period he led the financial restructuring of the company.
During the quarter under review, the company also indicated that Dr Sam Jonah
will move to a non-executive role on the Board of Directors.AngloGold Ashanti`s
two Chief Operating Officers, Neville Nicolau (Africa) and Roberto Carvalho
Silva (International) will now report directly to CEO Bobby Godsell.
Exploration
Total exploration expenditure during the second quarter amounted to $19m ($12m
expensed and $7m capitalised), versus $15m in the previous quarter. Of the
$19m, $9m ($2m expensed, $7m capitalised) was spent on brownfields exploration
activities at existing mines, while the remaining $10m funded greenfields
exploration in Tanzania, Alaska, China, Mongolia, Colombia, Peru, Russia and
the DRC.
Brownfields
In Ghana at Obuasi, site establishment is in progress for the first two of six
surface diamond holes of the Obuasi Ultra Deeps project. These are planned to
intersect the Obuasi Fissure 3,400m below surface and are expected to be
completed by January 2007.
At Sadiola in Mali, the contract for the pre-feasibility study of the Deep
Sulphides project will be awarded in the third quarter. Testing of the sulphide
potential below the oxide mineralisation at the FE3, FE3 South and FE4
satellite pits over the second quarter did not yield economic intercepts.
At Morila, the third drilling phase has been completed on the underground
Samacline target located 500m west of the current pit at a depth of 400m below
surface. A preliminary scoping study investigating the underground mining
potential of this target is in progress.
At Siguiri in Guinea, drilling results remain encouraging on both the oxide and
sulphide extensions of the existing pits. Reconnaissance drilling on a
previously delineated 2km soil geochemical anomaly at Foulata, which is
situated 45km west of the plant, has delineated a potential oxide Mineral
Resource.
In Tanzania at Geita, diamond drilling of the Geita Hill North East Extension
zone continues to intersect mineralisation down dip and along strike. Drilling
of the Geita Hill footwall zone is underway to confirm potential additional
mineralisation outside the current pit limits.
In Brazil, drilling at various sites at Corrego do Sitio continues to define
sulphide mineralisation below existing oxide Mineral Resources and a
pre-feasibility study and trial mining is planned to commence in 2006.
At Crixas, down-plunge drill testing of the Forquilha Sul and Mina I-West
ore-bodies intersected sub-economic mineralisation, effectively closing off
known ore shoots at depth. Exploration continues to look for further orebodies
down plunge.
In Australia, AngloGold Ashanti has divested its interests in selected
tenements north of Sunrise Dam Gold Mine to Crescent Gold Limited.
Greenfields
In the DRC, drilling re-commenced in mid-April at Adidi and preliminary results
confirm historical grade and tonnage estimates (1.2Moz at 9.9g/t). Preliminary
drilling was also carried out on two additional targets derived from mapping
and geochemical sampling during the first quarter.
In Alaska, results from the initial drilling programme on the Lost Mine South
project in the Pogo area delineated a near-surface, broad, shallow dipping gold
zone with grades in the 1-2g/t range; follow-up drilling is planned for the
third quarter. Two additional high grade targets are planned to be drill tested
in Alaska during the summer.
In South America, greenfields exploration is focussed in Colombia. Diamond
drilling has commenced at the San Carlos project in the Bolivar department and
AngloGold Ashanti is planning to drilltest a further three prospects in
Colombia in the second half of 2005.
Review of the gold market
Whilst the quarter saw a wide range of $30/oz in the spot gold price, and some
interesting changes in investor interest in buying gold, the most significant
moves during this period occurred in the currency markets.
The $/euro exchange rate broke down decisively from the euro strength displayed
in late 2004 and early 2005. Having tested $1.35/EUR twice during the first
quarter of the year, the European currency retreated by almost 10% against the
dollar, and closed the quarter at $1.21/EUR. The weakness of the euro and
resurgence of the US dollar contributed to a shift also in the local currency
and the rand weakened against the US dollar by 8% during this quarter. At its
weakest point of R6.96/$1, the South African currency had lost some 19% against
the US dollar since the rate of R5.65/$1 at which the rand opened in 2005. The
average $/euro exchange rate for the quarter of $1.26/EUR reflected the US
currency being 4% stronger than in the first quarter of 2005. The South African
currency weakened against the US dollar on average by 7% quarter on quarter.
Gold
The statistics of the gold spot price in US dollars reveal little of the
changes in the gold market during the period under review. The average spot
price for the quarter of $427/oz was unchanged from the average price of gold
for the first quarter of 2005. The high of $444/oz was within two dollars of
the high for the first quarter, and the low of $413/oz was similarly close to
the first quarter.
However, the behaviour of the gold price was remarkable for its divergence from
movements in the value of the US dollar during this quarter. See Graph 1 : Euro
/ US$ Exchange Rate & US$ Gold Spot Price: January 2004 - July 2005 Indexed.
The distinctive feature of the gold price rally of the past four years has been
the extent to which the gold price has risen in proportion to the weakening of
the US dollar against the euro, and fallen back when the US dollar has
strengthened against the euro. During this quarter however, as the US dollar
strengthened against the euro, the US dollar spot price of gold actually
finished June some 2% firmer on the quarter. As a direct consequence of the
stronger $/weaker euro, and a stronger spot gold price, the euro price of gold
rose by 12% during this quarter to a high of EUR368/oz.
In effect, traders on the New York Comex elected to remain long gold as the US
currency strengthened. There appeared to be no single justification for this
change of trading strategy on Comex. One important element was that of short
covering on the Comex. Certain investors had gone significantly short gold
early in the quarter when US dollar strength first emerged, taking Comex to a
net long position of only 5.6Moz, the lowest net long position since mid-2003.
When this short move attracted no further selling interest, the market saw
sustained short covering in June notwithstanding the strong US dollar. This
reaction on Comex took the net long gold position on the exchange back up to
almost 18Moz net long at the end of June. In effect, investors were buying US
dollars and buying gold during the same period. See Graph 2 : New York Comex
Gold Net Open Position vs IMM US$ Net Open Position 2001 - 2005.
The correction in the spot gold market was still under-way at the end of the
quarter, when the gold price closed at $434/oz. After the end of the quarter,
the price fell as low as $421/oz, although it has since recovered slightly to
trade at around $425/oz.
The sustained investor interest in gold during this quarter does not
necessarily reflect a complete break between gold price movement and changes in
the value of the US dollar. It is very likely that gold will again respond
positively to renewed US dollar weakness in the future, but off a higher base.
The events of this quarter confirm the fact that the New York Comex remains the
primary market place for investor and speculator activity in gold, and for the
spot pricing of the metal. See Graph 3 : New York Comex Net Open Interest
Position and Gold Price: January 2004-July 2005.
The combination of a strong spot gold price and a weaker rand during the
quarter produced sharply higher rand gold prices and some relief for local gold
producers. From a low of R81,500/kg during the quarter, the local price reached
almost R96,500/kg, while the average of R87,800/kg for the quarter was
R5,000/kg or 6% higher than the average price for the first quarter. During
July, however, a degree of recovery in the rand has taken the local gold price
back below R90,000/kg.
Physical Demand
Physical offtake of gold continued to improve during the first quarter of 2005,
following the healthy performance of demand in 2004.Consumption of gold in
jewellery in the first quarter increased by 17% year-on-year, largely on the
back of growth in Indian demand. Gold jewellery offtake in the developed
markets of the USA, Europe and Japan remained flat to down.Net bullion supply
on the market increased by 23%, driven particularly by higher official sales of
254t during the first quarter and significantly reduced de-hedging by gold
producers, and the market remained effectively in balance.
However, gold offtake in the second quarter suffered from the combination of
higher gold prices in local currencies (on the back of the stronger US dollar)
and seasonally low demand for jewellery.Offtake in India has fallen
particularly during this quarter due to these two factors. Nevertheless, the
major physical gold markets seem to have adjusted to higher gold prices in
general, and demand would be expected to increase again should gold weaken from
the higher spot price levels at which it traded at the end of the second
quarter.
Official Sector
The official sector contributed to better sentiment towards gold during this
quarter with the announcement by the G8 of a debt relief programme for heavily
indebted poor countries which would not be funded by the revaluation or sale of
the gold reserves of the IMF, as had been proposed in recent months. Although
most commentators had expressed doubt that the proposal by UK`s Gordon Brown,
for the funding of debt relief by the sale of IMF gold reserves would succeed,
the announcement removed a residual uncertainty that new sales might cap the
gold market for a time.
The high level of official gold sales during the early months of 2005 has led
to less official selling since then, and assisted the physical market in the
second quarter, when physical demand has fallen.
Currencies
At the end of June, the US dollar had gained 11% against the euro since the
beginning of 2005, most of this during the second quarter of the year.
During July, the US dollar gained further to reach a high of $1.186/EUR, a level
last seen in mid-2004.
During the four years of correction in the US currency against the euro since
2001, the market has seen several US dollar rallies led by economic good news
from the USA, where cyclical strength in the US economy has outweighed the
structural problems in that economy. However, during the second quarter of
2005, the cyclical advantages of sound economic growth and rising interest
rates in the USA were complemented by recognition of major negative factors in
European economies, and the fact that these weaknesses were fundamentally at
odds with a stronger euro. Sentiment towards the euro was also damaged by
political uncertainties raised by the referenda in France and Holland in June,
in which voters rejected the new European Constitution.
The US dollar was the direct beneficiary of the market`s concern about the
European currency, and market fears about the US trade and fiscal deficits
receded during the period under review.
Whilst the dollar has moved largely on good news in the US economy and bad news
in Europe, the stronger US currency has now broken through the technical trend
lines of the correction of the past four years. This technical break has
occurred in respect of the exchange rate both against the euro and against a
trade-weighted currency index.It will be interesting to see what this means for
the US currency during the rest of this year, particularly if cyclically
favourable circumstances in the US should weaken. Market commentary is divided
between institutions that now see a stronger dollar by the end of 2005, and
those who still expect dollar weakness to resume, albeit with more modest
year-end targets.
Whilst South Africa suffered no particular negative economic shift during this
quarter, the local currency lost ground sharply against the US dollar. This
move was driven by the stronger dollar, but also by some public recognition by
leading monetary and political figures of the harm done to sectors of the South
African economy by a strong local currency.
Whilst the further movement of the dollar against the euro will obviously
influence rand exchange rates, the market seems more persuaded now of the
likelihood of a weaker rand going forward.
Hedging
As at 30 June 2005, the net delta hedge position of AngloGold Ashanti was
10.32Moz or 321t valued at the spot gold price at the end of the quarter of
$434.50/oz. This net delta position reflects a decrease of some 400,000oz or
12.5t in the net size of the AngloGold Ashanti hedge compared with the position
at the end of the previous quarter. The net reduction reflects the maturing of
price contracts during the past quarter.
The marked-to-market value of the hedge position as at 30 June 2005 was
negative $1,032m, little changed from the negative value of $1,066m recorded at
the end of March 2005. However, this value of $1,032m was calculated off a
closing spot price $7/oz higher than the closing price at the end of March at
which the previous valuation was calculated. The marked-to-market value of the
hedge at 27 July 2005 at a spot price of $422.80/oz was negative $925.620m. The
price received by the company for the quarter under review was $422/oz,
compared with an average spot price for the period of $427/oz. The company
continues to manage its hedged positions actively, and to reduce overall levels
of pricing commitments in respect of future gold production by the company.
Hedge position
As at 30 June 2005, the group had outstanding the following forward-pricing
commitments against future production. The total net delta tonnage of the hedge
of the company on this date was 10.32Moz or 321t (at 31 March 2005: 10.72Moz or
334t).
The marked-to-market value of all hedge transactions making up the hedge
positions was a negative $1.032bn (negative R6.94bn) as at 30 June 2005 (as at
31 March 2005: $1.066bn or R6.62bn). This value at 30 June 2005 was based on a
gold price of $434.50/oz, exchange rates of R/$6.7240 and A$/$0.7560 and the
prevailing market interest rates and volatilities at that date.
As at 27 July 2005, the marked-to-market value of the hedge book was a negative
$925.620m (negative R6.192bn), based on a gold price of $422.80/oz and exchange
rates of R/$6.69 and A$/$0.7546 and the prevailing market interest rates and
volatilities at the time.
These marked-to-market valuations are not predictive of the future value of the
hedge position, nor of future impact on the revenue of the company. The
valuation represents the cost of buying all hedge contracts at the time of
valuation, at market prices and rates available at the time.
Year 2005 2006 2007
DOLLAR GOLD
Forward contracts Amount (kg) 11,511 16,654 32,993
US$/oz $310 $316 $344
Put options purchased Amount (kg) 4,408 8,592 1,455
US$/oz $333 $345 $292
Put options sold Amount (kg) 5,132 4,354
US$/oz $411 $339
Call options purchased Amount (kg) 11,860 11,211 6,357
US$/oz $329 $333 $344
Call options sold Amount (kg) 18,607 31,224 27,560
US$/oz $360 $381 $374
RAND GOLD
Forward contracts Amount (kg) * 1,218 2,449
Rand per kg R109,988 R97,520
Put options purchased Amount (kg) 1,875
Rand per kg R93,602
Put options sold Amount (kg) 7,620 1,400
Rand per kg R91,907 R88,414
Call options purchased Amount (kg)
Rand per kg
Call options sold Amount (kg) 9,889 4,517 311
Rand per kg R93,515 R102,447 R108,123
A DOLLAR GOLD
Forward contracts Amount (kg) * 1,885 1,555 8,398
A$ per oz A$615 A$762 A$650
Put options purchased Amount (kg)
A$ per oz
Put options sold Amount (kg)
A$ per oz
Call options purchased Amount (kg) 3,110 6,221 3,732
A$ per oz A$724 A$673 A$668
Call options sold Amount (kg)
A$ per oz
** Total net gold: Delta (kg) 14,198 32,959 59,879
Delta (oz) 456,476 1,059,655 1,925,152
Year 2008 2009
DOLLAR GOLD
Forward contracts Amount (kg) 30,076 26,288
US$/oz $365 $380
Put options purchased Amount (kg)
US$/oz
Put options sold Amount (kg) 855 1,882
US$/oz $390 $400
Call options purchased Amount (kg)
US$/oz
Call options sold Amount (kg) 27,516 26,211
US$/oz $380 $407
RAND GOLD
Forward contracts Amount (kg) 933
Rand per kg R116,335
Put options purchased Amount (kg)
Rand per kg
Put options sold Amount (kg)
Rand per kg
Call options purchased Amount (kg)
Rand per kg
Call options sold Amount (kg) 2,986
Rand per kg R202,054
A DOLLAR GOLD
Forward contracts Amount (kg) 3,110 3,390
A$ per oz A$678 A$665
Put options purchased Amount (kg)
A$ per oz
Put options sold Amount (kg)
A$ per oz
Call options purchased Amount (kg) 3,110 1,244
A$ per oz A$680 A$694
Call options sold Amount (kg)
A$ per oz
** Total net gold: Delta (kg) 54,809 50,663
Delta (oz) 1,762,148 1,628,851
Year 2010-2014 Total
DOLLAR GOLD
Forward contracts Amount (kg) 53,566 171,088
US$/oz $402 $366
Put options purchased Amount (kg) 14,455
US$/oz $336
Put options sold Amount (kg) 9,409 21,632
US$/oz $430 $403
Call options purchased Amount (kg) 29,428
US$/oz $334
Call options sold Amount (kg) 76,048 207,166
US$/oz $468 $413
RAND GOLD
Forward contracts Amount (kg) 2,164
Rand per kg R160,520
Put options purchased Amount (kg) 1,875
Rand per kg R93,602
Put options sold Amount (kg) 9,020
Rand per kg R91,365
Call options purchased Amount (kg)
Rand per kg
Call options sold Amount (kg) 5,972 23,675
Rand per kg R223,756 R141,953
A DOLLAR GOLD
Forward contracts Amount (kg) 3,110 17,678
A$ per oz A$689 A$744
Put options purchased Amount (kg)
A$ per oz
Put options sold Amount (kg)
A$ per oz
Call options purchased Amount (kg) 3,110 20,527
A$ per oz A$712 A$688
Call options sold Amount (kg)
A$ per oz
** Total net gold: Delta (kg) 108,569 321,077
Delta (oz) 3,490,569 10,322,850
* Long position.
** The Delta of the hedge position indicated above is the equivalent gold
position that would have the same marked-to-market sensitivity for a small
change in the gold price. This is calculated using the Black-Scholes
option formula with the ruling market prices, interest rates and
volatilities as at 30 June 2005.
Rounding of figures may result in computational discrepancies.
Year 2005 2006 2007
DOLLAR SILVER
Forward contracts Amount (kg)
$ per oz
Put options purchased Amount (kg) 21,772 43,545 43,545
$ per oz $7.11 $7.11 $7.40
Put options sold Amount (kg) 21,772 43,545 43,545
$ per oz $6.02 $6.02 $5.93
Call options purchased Amount (kg)
$ per oz
Call options sold Amount (kg) 21,772 43,545 43,545
$ per oz $8.11 $8.11 $8.40
Year 2008 2009 2010-2014
DOLLAR SILVER
Forward contracts Amount (kg)
$ per oz
Put options purchased Amount (kg) 24,883
$ per oz $7.40
Put options sold Amount (kg) 24,883
$ per oz $5.75
Call options purchased Amount (kg)
$ per oz
Call options sold Amount (kg) 24,883
$ per oz $8.00
Year Total
DOLLAR SILVER
Forward contracts Amount (kg)
$ per oz
Put options purchased Amount (kg) 133,745
$ per oz $7.26
Put options sold Amount (kg) 133,745
$ per oz $5.94
Call options purchased Amount (kg)
$ per oz
Call options sold Amount (kg) 133,745
$ per oz $8.19
The following table indicates the group`s currency hedge position at 30 June
2005
Year 2005 2006 2007
RAND DOLLAR (000)
Forward contracts Amount($) 7,488
US$/R R6.34
Put options purchased Amount($) 60,000
US$/R R6.97
Put options sold Amount($) 60,000
US$/R R6.69
Call options purchased Amount($)
US$/R
Call options sold Amount($) 115,000
US$/R R7.13
A DOLLAR (000)
Forward contracts Amount($) 15,970 39,222
A$/US$ A$0.61 A$0.75
Put options purchased Amount($)
A$/US$
Put options sold Amount($)
A$/US$
Call options purchased Amount($)
A$/US$
Call options sold Amount($) 50,000 20,000
A$/US$ A$0.75 A$0.74
BRAZILIAN REAL (000)
Forward contracts Amount($) 12,000 24,000 4,000
US$/BRL BRL2.94 BRL3.18 BRL3.31
Put options purchased Amount($)
US$/BRL
Put options sold Amount($)
US$/BRL
Call options purchased Amount($)
US$/BRL
Call options sold Amount($) 10,000 20,000
US$/BRL BRL3.03 BRL3.29
Year 2008 2009 2010-2014 Total
RAND DOLLAR (000)
Forward contracts Amount($) 7,488
US$/R R6.34
Put options purchased Amount($) 60,000
US$/R R6.97
Put options sold Amount($) 60,000
US$/R R6.69
Call options purchased Amount($)
US$/R
Call options sold Amount($) 115,000
US$/R R7.13
A DOLLAR (000)
Forward contracts Amount($) 55,192
A$/US$ A$0.70
Put options purchased Amount($)
A$/US$
Put options sold Amount($)
A$/US$
Call options purchased Amount($)
A$/US$
Call options sold Amount($) 70,000
A$/US$ A$0.75
BRAZILIAN REAL (000)
Forward contracts Amount($) 40,000
US$/BRL BRL3.12
Put options purchased Amount($)
US$/BRL
Put options sold Amount($)
US$/BRL
Call options purchased Amount($)
US$/BRL
Call options sold Amount($) 30,000
US$/BRL BRL3.20
Rounding of figures may result in computational discrepancies.
Group income statement
Quarter Quarter
ended ended
June March
2005 2005
SA Rand million Notes Unaudited Unaudited
Revenue 4,563 4,016
Gold income 4,404 3,858
Cost of sales 2 (3,620) (3,415)
Non-hedge derivatives 147 (188)
Gross Profit 931 255
Corporate administration
and other expenses (103) (99)
Market development costs (21) (21)
Exploration costs (78) (60)
Amortisation of
intangible assets - -
Impairment of
tangible assets (45) -
Other operating expenses (38) (23)
Other operating income 8 4
Operating profit (loss) 654 56
Interest receivable 39 54
Other net (expense) income (4) 7
(Loss) profit on disposal
of assets and subsidiaries - (1)
Finance costs and unwinding
of decommissioning
and restoration obligations (159) (148)
Fair value adjustment on option
component of convertible bond 79 115
Fair value gains (losses)
on interest rate swaps 11 (16)
Share of associates profit (loss) 2 1
Profit before taxation 621 68
Taxation 3 62 59
Profit after taxation 683 127
Discontinued operations 7 (69) (51)
614 76
Allocated as follows
Equity Shareholders 566 50
Minority interest 48 26
614 76
Basic earnings per
ordinary share (cents)
Profit from continuing operations 1 240 38
Loss from discontinued operations 1 (26) (19)
Profit 214 19
Diluted earnings per ordinary share
(cents)
Profit from continuing operations 2 240 38
Loss from discontinued operations 2 (26) (19)
Profit 214 19
Dividends 3
- Rm
- cents per share
Quarter Six months Six months
ended ended ended
June June June
2004 2005 2004
Restated Restated
SA Rand million Unaudited Unaudited Unaudited
Revenue 3,754 8,579 7,095
Gold income 3,559 8,261 6,693
Cost of sales (2,925) (7,036) (5,338)
Non-hedge derivatives (379) (40) (384)
Gross Profit 255 1,186 971
Corporate administration
and other expenses (105) (201) (181)
Market development costs (22) (42) (48)
Exploration costs (72) (138) (131)
Amortisation of
intangible assets (54) - (106)
Impairment of
tangible assets - (45) -
Other operating expenses (22) (63) (27)
Other operating income - 12 -
Operating profit (loss) (21) 709 478
Interest receivable 80 93 172
Other net (expense) income (7) 4 (8)
(Loss) profit on disposal
of assets and subsidiaries 7 (1) 27
Finance costs and unwinding
of decommissioning
and restoration obligations (124) (308) (282)
Fair value adjustment on option
component of convertible bond 397 194 248
Fair value gains (losses)
on interest rate swaps (15) (5) (33)
Share of associates profit (loss) (2) 3 (1)
Profit before taxation 316 689 602
Taxation 87 121 (64)
Profit after taxation 403 810 538
Discontinued operations (52) (121) (52)
351 690 486
Allocated as follows
Equity Shareholders 326 616 425
Minority interest 25 74 61
351 690 486
Basic earnings per
ordinary share (cents)
Profit from continuing operations 1 149 278 200
Loss from discontinued operations 1 (21) (46) (22)
Profit 129 233 178
Diluted earnings per ordinary share
(cents)
Profit from continuing operations 2 141 278 192
Loss from discontinued operations 2 (19) (46) (21)
Profit 121 232 171
Dividends 3
- Rm 450 449
- cents per share 170 170
1 Calculated on the basic weighted average number of ordinary shares.
2 Calculated on the diluted weighted average number of ordinary shares.
3 Dividends are t
