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AngloGold Ashanti - Anglogold Ashanti Report For The Quarter And Nine Months
Ended 30 September 2005
AngloGold Ashanti Limited
Incorporated in the Republic of South Africa
Registration Number: 1944/017354/06)
ISIN Number: ZAE000043485
JSE Share Code: ANG
("AngloGold Ashanti/Company")
Report to Shareholders
for the quarter and nine months ended 30 September 2005
Group results ...
* Gold production down 2% to 1.534Moz, due to anticipated decline in grades at
Sunrise Dam and Geita, and a reduction in heap leach ounces at Siguiri.
* Strong recovery in the South Africa region following the four-day strike,
which saw local production up 2% to 677,000oz and total cash costs 2% lower
at R59,053/kg.
* Group total cash costs increase 2% to $284/oz.
* Adjusted headline earnings decline to $1m, due in part to a negative $21m
fair value (non-cash) movement on the convertible bond.
Quarter Nine months
ended ended ended ended
Sept Jun Sept Sept
2005 2005 2005 2004
Restated
SA rand / Metric
Operating
review
Gold
Produced -kg/oz(000) 47,723 48,792 145,323 129,951
Price
received (1) -R/kg/$/oz 90,440 87,314 86,613 82,775
Total cash
costs -R/kg/$/oz 59,453 57,351 57,177 54,663
Total
production
costs -R/kg/$/oz 78,082 74,728 74,456 68,338
Financial
review
Gross profit -R/$million 243 931 1,429 1,582
Gross profit
adjusted
for the
effect of
unrealised
non-
hedge
derivatives
(2) -R/$million 678 765 2,119 2,234
(Loss) profit
attributable
to equity
shareholders -R/$million (415) 566 201 493
Headline
(loss)
earnings -R/$million (384) 665 383 658
Headline
earnings
adjusted for
the effect of
unrealised
non-
hedge
derivatives
(3) -R/$million 9 604 1,078 1,072
Capital
expenditure -R/$million 1,385 1,068 3,317 2,583
(Loss)
earnings per
ordinary
share -
cents/share
Basic (157) 214 76 200
Diluted (156) 214 76 199
Headline (145) 251 145 266
Headline
earnings
adjusted
for the effect
of unrealised
non-
hedge
derivatives
(3) -cents/share 3 228 407 434
Dividends -cents/share 170 170
Quarter Nine months
ended ended ended ended
Sept Jun Sept Sept
2005 2005 2005 2004
Restated
US dollar / Imperial
Operating
review
Gold
Produced -kg/oz(000) 1,534 1,569 4,672 4,178
Price
received
(1) -R/kg/$/oz 433 422 427 393
Total cash
costs -R/kg/$/oz 284 278 282 260
Total
production
costs -R/kg/$/oz 373 363 367 325
Financial
review
Gross
profit -R/$million 29 154 240 239
Gross
profit
adjusted
for the
effect of
unrealised
non-
hedge
derivatives
(2) -R/$million 105 117 334 339
(Loss)
profit
attributable
to equity
shareholders -R/$million (73) 96 45 74
Headline
(loss)
earnings -R/$million (68) 112 75 99
Headline
earnings
adjusted
for
the effect
of
unrealised
non-
hedge
derivatives
(3) -R/$million 1 92 170 162
Capital
expenditure -R/$million 215 167 525 393
(Loss)
earnings
per
ordinary
share -
cents/share
Basic (28) 36 17 30
Diluted (28) 36 17 30
Headline (26) 42 28 40
Headline
earnings
adjusted
for the
effect
of
unrealised
non-
hedge
derivatives
(3) -cents/share - 35 64 66
Dividends -cents/share 26 26
Notes: 1. Price received includes realised non-hedge derivatives.
2. Refer to note 7 of Notes for the definition.
3. Refer to note 6 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 September 2005
Price received(1) Production
$/oz % oz(000) %
Variance(4) Variance(4)
Great Noligwa 452 4 170 (2)
TauTona 449 2 124 3
Mponeng 453 2 127 (1)
Kopanang 450 3 126 7
Morila(5) 443 3 69 3
Cripple Creek
& Victor 383 7 92 30
AngloGold
Ashanti Mineracao 422 1 65 7
Sunrise Dam 447 (7) 101 (23)
Cerro Vanguardia(5) 400 5 52 2
Geita 407 16 137 (17)
Sadiola(5) 439 3 44 2
Siguiri(5) 415 (3) 61 (24)
Serra Grande(5) 417 - 24 -
Navachab 440 3 21 17
Obuasi 412 (3) 98 (4)
Yatela(5) 438 2 21 (9)
Tau Lekoa 450 3 71 4
Savuka 450 2 36 9
Iduapriem(5) 411 (3) 44 10
Bibiani 430 1 28 (7)
Other 24 14
AngloGold Ashanti 433 3 1,534 (2)
Total cash costs Cash gross profit(2)
$/oz % $m %
Variance(4) Variance(4)
Great Noligwa 269 - 27 8
TauTona 259 7 21 (9)
Mponeng 272 (2) 19 (10)
Kopanang 254 (10) 19 12
Morila(5) 194 12 17 6
Cripple Creek
& Victor 231 2 15 25
AngloGold
Ashanti Mineracao 173 7 15 -
Sunrise Dam 323 31 12 (60)
Cerro Vanguardia(5) 202 18 12 -
Geita 353 7 9 200
Sadiola(5) 240 (6) 9 29
Siguiri(5) 310 46 7 (50)
Serra Grande(5) 159 4 5 (29)
Navachab 268 (26) 5 -
Obuasi 341 5 4 (20)
Yatela(5) 285 (5) 3 -
Tau Lekoa 374 (7) 3 -
Savuka 379 (18) 1 200
Iduapriem(5) 369 9 1 (75)
Bibiani 308 4 - (100)
Other - - 17 13
AngloGold Ashanti 284 2 221 (6)
Gross profit (loss)
adjusted for the
effect of
unrealised non-
hedge derivatives(3)
$m %
Variance(4)
Great Noligwa 21 -
TauTona 12 33
Mponeng 9 (18)
Kopanang 14 8
Morila(5) 7 (36)
Cripple Creek
& Victor 4 100
AngloGold
Ashanti Mineracao 12 9
Sunrise Dam 5 (76)
Cerro Vanguardia(5) 5 (29)
Geita (1) 89
Sadiola(5) 7 75
Siguiri(5) 1 (89)
Serra Grande(5) 4 (33)
Navachab 4 500
Obuasi (5) -
Yatela(5) 2 100
Tau Lekoa (2) -
Savuka - 100
Iduapriem(5) (2) (200)
Bibiani (4) (300)
Other 11 (10)
AngloGold Ashanti 105 (10)
1 Price received includes realised non-hedge derivatives.
2 Gross profit adjusted for the effect of unrealised non-hedge derivatives
plus amortisation of tangible and intangible assets, less non-cash revenues.
3 Refer to note 7 of Notes for the definition.
4 Variance September 2005 quarter on June 2005 quarter - increase (decrease).
5 Attributable.
Rounding of figures may result in computational discrepancies.
Financial and operating review
OVERVIEW OF THE QUARTER
AngloGold Ashanti recorded adjusted headline earnings of $1m for the third
quarter compared with adjusted headline earnings of $92m in the previous
quarter. At a financial level, the decline was due to the non-recurrence of
the $47m tax credit recorded in the previous quarter, together with a negative
$34m fair value (non-cash) movement on the convertible bond, which arose on
account of the share price appreciation and associated increased volatility
during the quarter. At an operating level, the adjusted headline earnings
reduction was primarily due to the anticipated decline in grades at Sunrise Dam
and Geita as well as a reduction in the heap leach ounces at Siguiri.
The loss attributable to equity shareholders amounted to $73m as compared to a
profit of $96m in the prior quarter. This is primarily as a result of the
same factors that drove the decrease in adjusted headline earnings referred to
above and an unrealised non-hedge derivative loss relating to the negative
marked-to-market movement of the hedge book following the rally in the gold
price, as compared to the gain recorded in the previous quarter.
Production declined 2% quarter-on-quarter to 1.534Moz. As previously noted, the
production decline at Sunrise Dam was due to decreasing grades, as mining moves
to the lower-grade northern regions of the pit and the high-grade stockpiles
are depleted. In East Africa, production at Geita was down 28,000oz as a result
of declining grades in the current cut-back and delayed access to the
higher-grade ore of the next mining phase in the Nyakanga pit, which is
scheduled for early third quarter 2006. In West Africa, production at Siguiri
was down 19,000oz following the exceptionally high production level of last
quarter and the impact of pipeline failures at the CIP plant. Obuasi"s
production of 98,000oz was 4% lower than that of the previous quarter,
reflecting the continue adverse impact of limited mining flexibility and
developed reserves.
Set against these negative production impacts, this quarter saw an improved
performance from the South Africa region. Gold production was up 2% to
677,000oz, with total cash costs 2% lower at R59,053/kg. In the context of the
four-day strike action during the quarter, this represents a commendable
performance.
In respect of the international operations, CC&V"s production improved 30% to
92,000oz due to more favourable leach cycle timing and the recovery of ounces
placed earlier in the year. Production and cost performance of the South
American assets remained fairly constant quarter-on-quarter.
In respect of the company"s ongoing cost management strategy, savings arising
from improved efficiencies were negated by the inflationary increases that were
primarily evident at the South African operations in respect of the wage
increases reflected in the current quarter, together with the continuing
negative cost impacts of higher oil and mining consumables prices. These
factors, together with the drop in production by 2%, increased total cash costs
by 2% to $284/oz.
In the context of these ongoing cost pressures and in order to further maximise
synergies between the African operations, the company has begun a process of
further rationalising management structures on the continent. Going forward,
the eight open-pit mines will report to Fritz Neethling, while the eight
underground mines will report to Robbie Lazare. This will ensure that technical
skills are appropriately matched to orebody type. Daniel Owiredu will manage
the political, social and logistical issues of the African countries in which
the company operates. The current management structures in Africa are therefore
being rationalised, from three to two, supported by a small technical team, all
under the leadership of Neville Nicolau.
Capital expenditure for the quarter amounted to $215m, which includes stay-in
business capex of $149m.
Looking ahead, production for the fourth quarter is estimated to be 1.504Moz at
a total cash cost of $282/oz, assuming the following exchange rates to the US
dollar: R6.60; A$0.75; BRL2.25 and Argentinean peso 2.97.Capital expenditure is
estimated at $206m and will be managed in line with profitability and cash flow.
Notes:
* All references to price received includes realised non-hedge derivatives.
* In the case of joint venture operations, all production and financial
results are attributable to AngloGold Ashanti.
* Rounding of figures may result in computational discrepancies.
Exploration
Exploration expenditure amounted to $25m ($12m expensed, $13m capitalised)
during the third quarter, compared to $19m ($12m expensed, $7m capitalised) in
the previous quarter. Exploration expenditure at existing mines was $16m.
At Obuasi in Ghana, drilling commenced at the first two of six surface diamond
holes of the Obuasi Ultra Deeps project.
At Sadiola in Mali, in-fill drilling at FN2, located north of the main pit,
verified the continuity of mineralisation, while drilling at FE3S closed off
the mineralisation associated with the NNE striking structures that splay off
the main FE trend. Work on the Deep Sulphide pre-feasibility study continued
and focused primarily on comminution and metallurgical test work.
At Siguiri in Guinea, resource delineation drilling at the Kintinian prospect,
located 5km north of the plant, is in progress. Additional mineralisation has
been identified in two zones immediately northwest of the nearby Kintinian
village.
In Tanzania at Geita, resource in-fill drilling on the down-dip extensions at
the Geita Hill North East Extension zone continues to expand the mineralised
envelope down-dip and along strike. Definition and follow-up drilling is in
progress to the south of the Nyankanga pit along the strike extension of
previously delineated mineralisation.
In Brazil, drilling at Corrego do Sitio continued to expand the mineral
resource at the Carvoaria Velha, Laranjeiras, Mutuca and Cachorro Bravo
orebodies.Underground development was reinitiated at Cachorro Bravo on the 200
ore horizon, 10 metres below the previous development.Thus far, 64 metres of
development has yielded an average face grade of 12.8g/t over a mean horizontal
width of 2.9 metres.
Greenfields exploration activities are underway in the DRC, Alaska, Australia,
Colombia, Tanzania, China, Mongolia and Russia, with an expensed expenditure of
$9m for the quarter, compared with $10m in the previous quarter.
At the Kimin project in the DRC, the drilling programme at Adidi/D7 Kanga is
now 70% complete and continues to confirm historical tonnage and grade
estimates. An airborne geophysical survey is planned for the fourth quarter
over the 10km by 15km Mongbwalu Ridge area. Drilling at the Kimin project was
interrupted for a three-week period from the beginning of October, as a result
of instability in Mongbwalu after FARDC (Congolese Army) troops were deployed
to the area.This deployment is now complete and exploration activities have
resumed. The presence of FARDC troops is expected to further stabilise the
Mongbwalu region.
In Alaska, drill results from the Lost Mine South project near Pogo indicate
that the broad, near- surface, low-grade zone discovered earlier this year
transitions into a high-grade vein system at depth. Significant intersections
include 3.2m at 16.3g/t at a depth of 121.9m; 3.4m at 21.7g/t at a depth of
143m; and 1.5m at 49.3g/t at a depth of 171.8m. Drilling at the Terra project,
situated approximately 200km west of Anchorage, has defined multiple narrow,
high-grade veins in an overall system that appears to be over 8km in length.
Further field work is planned.
Regional systematic exploration continued in six areas in Colombia. Further
target definition and follow-up work is planned and a number of projects are
now drill-ready.
In Australia, at the Tropicana JV, encouraging drill results have been obtained
at the Tropicana, Rusty Nail and Kamikaze prospects.Mineralisation at Tropicana
now extends over a strike length of approximately 800 metres, with widths of 20
to 40 metres and grades of 1.5 to 8g/t over mineable widths. A number of
additional geochemical anomalies that require more follow-up have been
identified within 30km of the Tropicana Prospect.
Review of the gold market
The third quarter of 2005 saw new levels of investor and speculator interest in
gold and a strong break in gold price behaviour from its linkage over the past
four years to the US dollar/euro exchange rate.
Although the average spot price of gold for the quarter of US$439/oz was only
$12/oz or some 3% higher than the average price for the metal during the first
half of the year, the average figure does not reflect the extent of activity in
gold this quarter. The price saw a range of $57/oz during this quarter, the
second highest quarterly price range in five years. Much of this activity came
during the latter part of the quarter, and the spot price has strengthened by
almost 15% since late July, to touch $480/oz in early October. This is the
highest gold spot price seen in seventeen years, and the market now is looking
to the figure of US$500/oz last seen in December 1987.
See Graph 1: US $ Gold Price 1979 - 2005.
Although the tone of the rand against the US dollar was generally weaker, the
average exchange rate of R6.48 to the dollar was little changed from the
average of R6.40 for the previous quarter. This translated to an average local
gold price of close to R92,000/kg for the quarter which was some 4% higher than
the average local price in the second quarter of the year.
Gold
The divergence of the gold price from a strong inverse correlation to the
movement in the US dollar exchange rate against the euro, continued much more
strongly during the period under review. Whilst the US dollar has traded
sideways for the last five months, the gold price has moved up strongly and
steadily for much of the third quarter. See Graph 2 : US$/Euro and US$ Gold
Price Indexed, 2004 - 2005.
Whilst for a time this looked like simply a re-rating or re-pricing of the gold
market against a dollar/euro denominator, this interpretation becomes
inadequate during September and October, when the gold price has moved $40/oz
higher even whilst the dollar strengthened from $1.25 to $1.19 to the euro .
The result of this divergence has been a material increase in the gold price in
non-US dollar terms for the first time in the current gold price cycle.
After averaging some 325/oz for the past four years, the gold price reached
400/oz early in October. See Graph 3: Euro Gold Price 2001 - 2005.
A number of circumstances outside of the currency markets have encouraged an
interest in gold. Probably the most direct influence on sentiment has come from
the oil market, where supply dislocation caused by hurricane damage in the USA
pushed the spot price of benchmark West Texas Intermediate up by $10/barrel to
a record price of $70/barrel in early September.The possible impact of this oil
price increase on inflation and on global economic growth became the subject of
widespread comment. This, in turn, translated to buying interest in gold, and
there was some correlation between gold buying and oil price increases during
August and early September.Sentiment was further encouraged by positive news
during the quarter about physical demand for gold in important markets during
the first half of 2005.This renewed interest in gold became self-fulfilling,
and rising gold prices justified further interest and speculative buying in the
gold market. This continued interest has kept the gold price rising during the
past four weeks, even as the oil price has fallen back close to its
pre-hurricane Katrina levels .
The expectation of rising inflation rates is one commonly in use today to
justify higher gold prices. However, there is little conclusive evidence of an
increased inflation threat, notwithstanding base metal, commodity and energy
price increases in recent years. Whilst headline inflation in the USA in
September moved sharply upwards due to the impact of higher pump prices for
gasoline during the period of hurricane- induced supply dislocation, core
inflation in the US remains a little over 2% p.a. Most recent core inflation
figures in Europe remain below 2% p.a.
Nevertheless, the impact of higher oil prices has introduced a sense of
uncertainty about the health of the global economy, and this uncertainty
continues to encourage interest in gold amongst both investors and speculators.
In order to measure the extent of this investor interest in the metal, one
needs to look both at the New York Comex open interest, and at the latest gold
Exchange Traded Fund (ETF) holdings. The Comex continued to be the most direct
predictor of gold price movement, and the spot price of metal tracked the
rising buying interest on that exchange. The net open position recorded weekly
on the Comex matched last year"s record level in April 2004 at around 22Moz net
long (685t net long) and most certainly exceeded that level intra-week in early
October. However, to the net open Comex interest must be added aggregate
investor holdings in gold ETFs, which amounted at the end of September to over
9Moz or 280t of gold. These ETF holdings have been accumulated mostly during
the past nine months, and predominantly in the New York Stock Exchange
streetTRACKS fund launched in late 2004. The combined Comex and ETF holdings
thus exceed 31Moz, or almost 1,000t of gold in net investment and speculative
positions in developed markets.
Looking to the future, there appears to be sufficient uncertainty in financial
markets and in the global economy to sustain the current levels of interest in
gold.
Physical Demand
Reports of physical demand for gold during the first half of 2005 have been
very positive, with a powerful recovery in many markets from the slippage in
offtake between 2000 and 2003.Jewellery demand was particularly buoyant in
India and in the Middle East. In India, general economic growth has translated
to better offtake on a wide front and it would appear that that market has
adjusted to higher and more volatile gold prices. Improved offtake in the
Middle East has come primarily on the back of increased oil revenues in that
region. Both Turkey and China also show growth. As has been the case for some
time, however, the volume of offtake of gold in jewellery in the developed
markets of the USA, Europe and Japan remains disappointing.
Currencies
After gaining strongly against the euro during the second quarter of 2005, the
US dollar traded during the third quarter in a range between $1.20 and $1.25
against the euro.
As noted above in respect of the net delta size of the hedge position, the
increased negative value of the hedge was due to its valuation against the
quarter-end spot price of $465.60/oz compared with its valuation at the end of
June at a spot price $30/oz lower. The marked-to-market value of the hedge at
21 October 2005 at a spot price of $463/oz was negative $1.342m.
The sideways movement in the dollar/euro exchange rate seems to reflect an
equilibrium in sentiment in foreign exchange markets in respect of the current
state of the US and European economies. Whilst in the USA, the challenge
presented by the federal budget deficit and the record levels of trade deficit
remains unsolved, the US economy continues to grow more rapidly than any other
part of the developed world, and the US trade deficits continue to be funded by
capital inflows. Similarly, in Europe, the negative effects of political
uncertainty induced by the inconclusive parliamentary election in Germany and
by the rejection in France and Holland earlier this year of the proposed new
constitution for the European Union, have been moderated by encouraging
performance by the German economy.
Even though the recovery of the dollar earlier this year seemed to signal an
end to the three years of correction in the US currency against the euro, most
market commentators continue to expect renewed weakening by the US currency
before the end of this year. Should this happen, this would most likely
encourage further interest in gold.
In South Africa, interest rates have remained unchanged, and there has been
little news to influence the value of the local currency one way or another.
Nevertheless, the quarter has seen a slightly weaker rand against the US
dollar, due to the stable to stronger state of the US currency.
Hedging
As at 30 September 2005, the net delta hedge position of AngloGold Ashanti was
10.68Moz or 332t, valued at the spot gold price at the end of the quarter of
$465.60/oz. This net delta position reflects an increase of some 360,000oz or
11t in the net delta size of the AngloGold Ashanti hedge compared with the
position at the end of the previous quarter. The net increase quarter-on-
quarter is due entirely to a higher net volume of open options positions valued
against a quarter- end spot price which was $30/oz higher than the spot price
of $434.50/oz at which the hedge was measured at the end of June 2005.
The marked-to-market value of the hedge position as at 30 September 2005 was
negative $1.349bn, compared with the value at 30 June of negative $1.032bn.
The price received by the company for the quarter under review was $433/oz,
compared with an average spot price for the period of $439/oz. The company
continues to manage its hedge positions actively, and to reduce overall levels
of pricing commitments in respect of future gold production by the company.
As noted above in respect of the net delta size of the hedge position, the
increased negative value of the hedge was due to its valuation against the
quarter-end spot price of $465.60/oz compared with its valuation at the end of
June at a spot price $30/oz lower. The marked-to-market value of the hedge at
21 October 2005 at a spot price of $463/oz was negative $1.342bn.
The price received by the company for the quarter under review was $433/oz,
compared with an average spot price for the period of $439/oz. The company
continues to manage its hedge positions actively, and to reduce overall levels
of pricing commitments in respect of future gold production by the company.
See press release for graphs
Hedge position
As at 30 September 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 10.68Moz or 332t (at 30
June 2005:10.32Moz or 321t).
The marked-to-market value of all hedge transactions making up the hedge
positions was a negative $1.349bn (negative R8.59bn) as at 30 September 2005
(as at 30 June 2005: $1.032bn or R6.94bn). This value at 30 September 2005 was
based on a gold price of $465.60/oz, exchange rates of R/$6.3700 and A$/$0.7594
and the prevailing market interest rates and volatilities at that date.
As at 25 October 2005, the marked-to-market value of the hedge book was a
negative $1.370bn (negative R9.085bn), based on a gold price of $465.40/oz and
exchange rates of R/$6.63 and A$/$0.7494 and the prevailing market interest
rates and volatilities at the time.
These marked-to-market valuations are not predictive of the future value of the
hedge position, nor of future impact on the revenue of the company. The
valuation represents the cost of buying all hedge contracts at the time of
valuation, at market prices and rates available at the time.
Year 2005 2006 2007
DOLLAR GOLD
Forward contracts Amount (kg) 4,742 15,954 31,580
US$/oz $302 $317 $346
Put options purchased Amount (kg) 1,893 8,592 1,455
US$/oz $318 $345 $292
Put options sold Amount (kg) 467 4,354
US$/oz $447 $339
Call options purchased Amount (kg) 5,930 11,211 6,357
US$/oz $329 $333 $344
Call options sold Amount (kg) 8,526 31,224 28,934
US$/oz $352 $381 $378
RAND GOLD
Forward contracts Amount (kg) 2,805 2,449
Rand per kg R90,783 R97,520
Put options purchased Amount (kg) 1,875
Rand per kg R93,602
Put options sold Amount (kg) 2,706 1,400
Rand per kg R90,805 R88,414
Call options purchased Amount (kg)
Rand per kg
Call options sold Amount (kg) 5,568 3,306 311
Rand per kg R93,739 R102,447 R108,123
A DOLLAR GOLD
Forward contracts Amount (kg) 566 *1,555 6,843
A$ per oz A$705 A$556 A$651
Put options purchased Amount (kg)
A$ per oz
Put options sold Amount (kg)
A$ per oz
Call options purchased Amount (kg) 3,110 3,732
A$ per oz A$673 A$668
Call options sold Amount (kg)
A$ per oz
Delta (kg) 14,019 31,731 58,685
** Total net gold:
Delta (oz) 450,721 1,020,174 1,886,764
Year 2008 2009 2010-2014
DOLLAR GOLD
Forward contracts Amount (kg) 30,076 26,288 53,566
US$/oz $365 $380 $402
Put options purchased Amount (kg)
US$/oz
Put options sold Amount (kg) 855 1,882 9,409
US$/oz $390 $400 $430
Call options purchased Amount (kg)
US$/oz
Call options sold Amount (kg) 28,890 27,585 82,919
US$/oz $383 $410 $471
RAND GOLD
Forward contracts Amount (kg) 933
Rand per kg R116,335
Put options purchased Amount (kg)
Rand per kg
Put options sold Amount (kg)
Rand per kg
Call options purchased Amount (kg)
Rand per kg
Call options sold Amount (kg) 2,986 5,972
Rand per kg R202,054 R223,756
A DOLLAR GOLD
Forward contracts Amount (kg) 2,177 3,390 3,110
A$ per oz A$669 A$663 A$686
Put options purchased Amount (kg)
A$ per oz
Put options sold Amount (kg)
A$ per oz
Call options purchased Amount (kg) 3,110 1,244 3,110
A$ per oz A$660 A$694 A$712
Call options sold Amount (kg)
A$ per oz
Delta (kg) 55,888 53,092 118,768
** Total net gold:
Delta (oz) 1,796,838 1,706,945 3,818,474
Year Total
DOLLAR GOLD
Forward contracts Amount (kg) 162,206
US$/oz $369
Put options purchased Amount (kg) 11,940
US$/oz $334
Put options sold Amount (kg) 16,967
US$/oz $402
Call options purchased Amount (kg) 23,498
US$/oz $335
Call options sold Amount (kg) 208,078
US$/oz $419
RAND GOLD
Forward contracts Amount (kg) 6,187
Rand per kg R97,303
Put options purchased Amount (kg) 1,875
Rand per kg R93,602
Put options sold Amount (kg) 4,106
Rand per kg R89,990
Call options purchased Amount (kg)
Rand per kg
Call options sold Amount (kg) 18,142
Rand per kg R156,197
A DOLLAR GOLD
Forward contracts Amount (kg) 14,531
A$ per oz A$676
Put options purchased Amount (kg)
A$ per oz
Put options sold Amount (kg)
A$ per oz
Call options purchased Amount (kg) 14,308
A$ per oz A$683
Call options sold Amount (kg)
A$ per oz
Delta (kg) 332,183
** Total net gold:
Delta (oz) 10,679,916
* 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 September 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) 10,886 43,545 43,545
$ per oz $7.11 $7.11 $7.40
Put options sold Amount (kg) 10,886 43,545 43,545
$ per oz $6.02 $6.02 $5.93
Call options purchased Amount (kg)
$ per oz
Call options sold Amount (kg) 10,886 43,545 43,545
$ per oz $8.11 $8.11 $8.40
Year 2008 2009 2010-2014 Total
DOLLAR SILVER
Forward contracts Amount (kg)
$ per oz
Put options purchased Amount (kg) 24,883 122,859
$ per oz $7.40 $7.27
Put options sold Amount (kg) 24,883 122,859
$ per oz $5.75 $5.93
Call options purchased Amount (kg)
$ per oz
Call options sold Amount (kg) 24,883 122,859
$ per oz $8.00 $8.19
The following table indicates the group"s currency hedge position at
30 September 2005
Year 2005 2006 2007
RAND DOLLAR (000)
Forward contracts Amount ($) 7,369
US$/R R6.45
Put options purchased Amount ($) 30,000
US$/R R7.00
Put options sold Amount ($) 30,000
US$/R R6.66
Call options purchased Amount ($)
US $ / R
Call options sold Amount ($) 60,000
US$/R R6.97
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 ($) 30,000 20,000
A$/US$ A$0.75 A$0.74
BRAZILIAN REAL (000)
Forward contracts Amount ($) 6,000 24,000 4,000
US$/BRL BRL2.98 BRL3.18 BRL3.31
Put options purchased Amount ($)
US$/BRL
Put options sold Amount ($)
US$/BRL
Call options purchased Amount ($)
US$/BRL
Call options sold Amount ($) 5,000 20,000
US$/BRL BRL3.08 BRL3.29
Year 2008 2009 2010-2014 Total
RAND DOLLAR (000)
Forward contracts Amount ($) 7,369
US$/R R6.45
Put options purchased Amount ($) 30,000
US$/R R7.00
Put options sold Amount ($) 30,000
US$/R R6.66
Call options purchased Amount ($)
US $ / R
Call options sold Amount ($) 60,000
US$/R R6.97
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 ($) 50,000
A$/US$ A$0.75
BRAZILIAN REAL (000)
Forward contracts Amount ($) 34,000
US$/BRL BRL3.16
Put options purchased Amount ($)
US$/BRL
Put options sold Amount ($)
US$/BRL
Call options purchased Amount ($)
US$/BRL
Call options sold Amount ($) 25,000
US$/BRL BRL3.25
Rounding of figures may result in computational discrepancies.
Group income statement
Quarter Quarter
ended ended
September June
2005 2005
SA Rand million Notes Unaudited Unaudited
Revenue 2 4,332 4,563
Gold income 4,151 4,404
Cost of sales 3 (3,748) (3,620)
Non-hedge derivatives (161) 147
Gross Profit 243 931
Corporate administration and other
expenses (109) (103)
Market development costs (21) (21)
Exploration costs (81) (78)
Amortisation of intangible assets - -
Impairment of tangible assets - (45)
Contract termination expenditure at Geita (55) -
Other operating expenses (48) (38)
Other operating income 12 8
Operating (loss) profit (60) 654
Interest receivable 34 39
Other net income (expense) 3 (4)
Profit on disposal of assets and
subsidiaries 11 -
Finance costs and unwinding of
decommissioning
and restoration obligations (166) (159)
Fair value adjustment on option component
of convertible bond (135) 79
Fair value gains (losses) on interest
rate swaps - 11
Share of associates (loss) profit (6) 2
(Loss) profit before taxation (319) 621
Taxation 4 (10) 62
(Loss) profit after taxation (329) 683
Discontinued operations 9 (42) (69)
(372) 614
Allocated as follows
Equity Shareholders (415) 566
Minority interest 43 48
(372) 614
Basic (loss) earnings per ordinary share
(cents)
(Loss) profit from continuing
operations(a) (141) 240
Loss from discontinued operations(a) (16) (26)
(Loss) profit (157) 214
Diluted (loss) earnings per ordinary
share (cents)
(Loss) profit from continuing
operations(b) (140) 240
Loss from discontinued operations(b) (16) (26)
(Loss) profit (156) 214
Dividends c
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