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ANG
ANANO
Anglogold Ashanti Limited - Report to shareholders for the quarter ended 31
March 2006
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): AADA
Euronext Paris: VA
Euronext Brussels: ANG
Report to shareholders for the quarter ended 31 March 2006
Group results for the quarter...
* Adjusted headline earnings up 110% to $86m.
* Price received up 14% or $69/oz to $545/oz.
* Gold production down 10% to 1.34Moz, due to lower grades and fewer
production shifts in South Africa, both of which were anticipated.
* Total cash costs up 11% to $308/oz, as a result of strong local operating
currencies and lower gold produced but some 4% below the company"s
mid-quarter guidance.
Quarter
ended ended
Mar Dec
2006 2005
SA rand / Metric
Operating review
Gold
Produced - kg / oz (000) 41,667 46,460
Price received 1 - R/kg / $/oz 107,903 99,780
Total cash costs - R/kg / $/oz 60,815 58,367
Total production costs - R/kg / $/oz 82,079 82,873
Financial review
Gross (loss) profit - R / $ million (318) (340)
Gross profit adjusted
for the effect of
unrealised non-
hedge derivatives 2 - R / $ million 1,248 870
(Loss) profit attributable
to equity
shareholders - R / $ million (1,074) (1,463)
Headline (loss)
earnings 3 - R / $ million (1,067) (1,097)
Headline earnings
before unrealised
non-hedge derivatives,
fair value
gain (loss) on
convertible bond
and interest
rate swaps 4 - R / $ million 530 250
Capital expenditure - R / $ million 961 1,283
(Loss) earnings per
ordinary share - cents/share
Basic (405) (552)
Diluted (405) (552)
Headline 3 (403) (414)
Headline earnings
before unrealised
non-hedge derivatives,
fair value
gain (loss) on
convertible bond
and interest
rate swaps 4 - cents/share 200 94
Dividends - cents/share 62
Year
ended ended
Mar Dec
2005 2005
SA rand / Metric
Operating review
Gold
Produced - kg / oz (000) 48,808 191,783
Price received 1 - R/kg / $/oz 82,152 89,819
Total cash costs - R/kg / $/oz 54,778 57,465
Total production costs - R/kg / $/oz 70,639 76,495
Financial review
Gross (loss) profit - R / $ million 255 1,088
Gross profit adjusted
for the effect of
unrealised non-
hedge derivatives 2 - R / $ million 676 2,988
(Loss) profit attributable
to equity
shareholders - R / $ million 50 (1,262)
Headline (loss)
earnings 3 - R / $ million 103 (723)
Headline earnings
before unrealised
non-hedge derivatives,
fair value
gain (loss) on
convertible bond
and interest rate
swaps 4 - R / $ million 368 1,265
Capital expenditure - R / $ million 864 4,600
(Loss) earnings per
ordinary share - cents/share
Basic 19 (477)
Diluted 19 (477)
HeadlineCubed 39 (273)
Headline earnings
before unrealised
non-hedge derivatives,
fair value
gain (loss) on
convertible bond
and interest
rate swaps 4 - cents/share 139 478
Dividends - cents/share 232
Quarter
ended ended
Mar Dec
2006 2005
US dollar / Imperial
Operating review
Gold
Produced - kg / oz (000) 1,340 1,494
Price received 1 - R/kg / $/oz 545 476
Total cash costs - R/kg / $/oz 308 278
Total production costs - R/kg / $/oz 416 395
Financial review
Gross (loss) profit - R / $ million (61) (57)
Gross profit adjusted
for the effect of
unrealised non-
hedge derivatives 2 - R / $ million 202 134
(Loss) profit attributable
to equity
shareholders - R / $ million (185) (227)
Headline (loss)
earnings 3 - R / $ million (184) (171)
Headline earnings
before unrealised
non-hedge derivatives,
fair value
gain (loss) on
convertible bond
and interest rate
swaps 4 - R / $ million 86 41
Capital expenditure - R / $ million 156 197
(Loss) earnings per
ordinary share - cents/share
Basic (70) (86)
Diluted (70) (86)
HeadlineCubed (69) (65)
Headline earnings
before unrealised
non-hedge derivatives,
fair value
gain (loss) on
convertible bond
and interest
rate swaps 4 - cents/share 32 15
Dividends - cents/share 10
Year
ended ended
Mar Dec
2005 2005
US dollar / Imperial
Operating review
Gold
Produced - kg / oz (000) 1,569 6,166
Price received 1 - R/kg / $/oz 424 439
Total cash costs - R/kg / $/oz 284 281
Total production costs - R/kg / $/oz 366 374
Financial review
Gross (loss) profit - R / $ million 57 183
Gross profit adjusted
for the effect of
unrealised non-
hedge derivatives 2 - R / $ million 112 469
(Loss) profit attributable
to equity
shareholders - R / $ million 22 (183)
Headline (loss)
earnings 3 - R / $ million 31 (98)
Headline earnings
before unrealised
non-hedge derivatives,
fair value
gain (loss) on
convertible bond
and interest rate
swaps 4 - R / $ million 61 200
Capital expenditure - R / $ million 144 722
(Loss) earnings per
ordinary share - cents/share
Basic 8 (69)
Diluted 8 (69)
HeadlineCubed 12 (37)
Headline earnings
before unrealised
non-hedge derivatives,
fair value
gain (loss) on
convertible bond
and interest
rate swaps 4 - cents/share 23 76
Dividends - cents/share 36
Notes: 1. Price received includes realised non-hedge derivatives.
2. Refer to note 8 of Notes for the definition.
3. Refer to note 6 of Notes for the definition.
4. Refer to note 7 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 31 March 2006
Price received 1 Production
$/oz % oz (000) %
Variance 4 Variance 4
Great Noligwa 577 18 161 (5)
Mponeng 579 19 137 (4)
TauTona 575 18 110 (14)
Sunrise Dam 598 16 91 (1)
Kopanang 576 18 104 (12)
Obuasi 532 16 99 (1)
Morila 5 560 16 54 (7)
Cerro Vanguardia 5 454 5 52 2
AngloGold Ashanti
Mineracao 457 1 49 (26)
Yatela 5 555 14 33 6
Siguiri 5 529 15 57 (8)
Geita 555 10 84 (30)
Cripple Creek & Victor 370 (7) 64 (25)
Sadiola 5 553 14 42 (2)
Navachab 553 15 22 -
Iduapriem 5 530 16 43 (2)
Serra Grande 5 453 (5) 24 -
Savuka 572 17 21 (16)
Bibiani 555 18 15 (40)
Tau Lekoa 572 17 46 (25)
Moab Khotsong 583 - 9 -
Other 21 (19)
AngloGold Ashanti 545 14 1,340 (10)
Total cash costs
$/oz %
Variance 4
Great Noligwa 263 10
Mponeng 261 6
TauTona 294 19
Sunrise Dam 281 22
Kopanang 325 24
Obuasi 349 (2)
Morila 5 262 15
Cerro Vanguardia 5 186 8
AngloGold Ashanti
Mineracao 188 (1)
Yatela 5 222 7
Siguiri 5 379 11
Geita 368 13
Cripple Creek & Victor 246 3
Sadiola 5 271 (5)
Navachab 227 (12)
Iduapriem 5 362 (9)
Serra Grande 5 187 7
Savuka 363 22
Bibiani 281 (16)
Tau Lekoa 518 17
Moab Khotsong 848 -
Other
AngloGold Ashanti 308 11
Gross profit (loss)
adjusted for the
effect of
Cash gross profit unrealised non-
(loss) 2 hedge derivatives 3
$m % $m %
Variance 4 Variance 4
Great Noligwa 49 17 36 44
Mponeng 45 41 32 28
TauTona 31 7 18 38
Sunrise Dam 28 100 22 214
Kopanang 26 4 19 6
Obuasi 18 100 1 120
Morila 5 16 14 11 38
Cerro Vanguardia 5 15 7 8 (11)
AngloGold Ashanti
Mineracao 14 (7) 11 (8)
Yatela 5 12 50 10 67
Siguiri 5 11 38 4 300
Geita 10 25 2 (71)
Cripple Creek & Victor 10 (23) 2 (50)
Sadiola 5 10 - 9 29
Navachab 7 (42) 5 (29)
Iduapriem 5 7 800 2 140
Serra Grande 5 6 (25) 5 (17)
Savuka 4 300 4 300
Bibiani 4 200 2 133
Tau Lekoa 1 (67) (5) -
Moab Khotsong (2) - (7) -
Other 20 186 11 1,200
AngloGold Ashanti 342 28 202 51
1 Price received includes realised non-hedge derivatives.
2 Cash gross profit is 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 8 of Notes for the definition.
4 Variance March 2006 quarter on December 2005 quarter - increase (decrease).
5 Attributable.
Rounding of figures may result in computational discrepancies.
Financial and operating review
OVERVIEW FOR THE QUARTER
Strong participation in the gold price rally, with the price received $69/oz
higher than that of the previous quarter and only 2% lower than the average
spot price, resulted in a much improved financial performance for the first
quarter of 2006, lifting adjusted headline earnings 110% to $86m.
Operationally, production was lower by 10% to 1.34Moz, with total cash costs of
$308/oz, some 4% below the company"s mid-quarter guidance.
In South Africa, production declined 9%, with TauTona and Kopanang reporting
respective decreases of 18,000oz and 14,000oz, due to lower volumes mined. More
generally, the region was affected by the reduced number of production shifts
associated with the normal year-end breaks, in addition to planned production
declines at Tau Lekoa and Savuka, as these operations are restructured to
improve profitability going forward. Mponeng had an excellent quarter, with
gold production only slightly down quarter-on-quarter notwithstanding the
December break, and total cash costs exceptionally well-contained at R51,487/kg
($261/oz).
Additionally, Moab Khotsong entered into commercial production this quarter,
reporting the low volumes and high total cash costs inherent to the planned
slow build-up in volume mined. Although Moab"s production is expected to
increase by approximately 80% over the next twelve months, with costs declining
accordingly, total cash costs for the South African operations as a whole rose
to R61,747/kg ($313/oz) this quarter, in part as a result of Moab"s
commencement.
The other African assets reported mixed operational results, with stable
production and lower cash costs at Obuasi and Iduapriem in Ghana, as well as
Sadiola in Mali. As reported in the guidance update earlier in the first
quarter, however, Geita was negatively affected by countrywide drought and
subsequent heavy rains in Tanzania, which resulted in the operation"s 30%
production decline over that of the prior quarter and 13% increase in total
cash costs to $368/oz.
Regarding the international operations, strong local currencies continued to
put pressure on total cash costs at the South American operations, with both
Cerro Vanguardia in Argentina and Serra Grande in Brazil reporting 8%
increases, in spite of steady production.
In Australia, Sunrise Dam also reported stable production, although total cash
costs rose 22%, returning to normal levels of $281/oz after a once-off
stockpile adjustment substantially reduced costs in the fourth quarter of last
year. Cripple Creek & Victor, in the US, reported a 25% decline in production
as a result of lower- than-expected grades.
Looking ahead, production for the second quarter is estimated to be 1.483Moz at
an average total cash cost of $299/oz, assuming the following exchange rates:
R/$6.22, A$/$0.72, BRL/$2.19 and Argentinean peso/$3.05. Capital expenditure is
estimated at $230m and will be managed in line with profitability and cash
flow.
In late March, AngloGold Ashanti announced the launching of an equity offering.
This offering was successfully completed on 20 April 2006 and resulted in the
issue of 9,970,732 new ordinary shares, along with the simultaneous sale of
19,685,170 AngloGold Ashanti shares held by Anglo American plc. The combined
offering was priced at $51.25 per ADS and ZAR315.19 per ordinary share (a 1%
discount to the weighted average traded price of the securities on the JSE over
the 30 days prior to pricing). Net proceeds of the primary offering
approximated $495m, which will result in a reduced net debt position of
approximately $1.2bn. The Anglo American plc holding in AngloGold Ashanti has
now reduced to 41.8%.
Exploration
Total exploration expenditure amounted to $18m
($12m expensed, $6m capitalised) during the first
quarter, compared to $19m ($11m expensed, $8m
capitalised) in the fourth quarter 2005.
BROWNFIELDS EXPLORATION
At Siguiri, in Guinea, drilling continued at the Kintinian prospect, supporting
previous intersections as well as confirming north-west and south-east
extensions. Drilling to further interrogate soil geochemical anomalies in the
Sintroko area, located 5km south of the Kami pit, has also recorded promising
intersections. Follow-up drilling at Foulata, located 35km west of the current
Siguiri operations, remains encouraging.
At Geita, in Tanzania, drilling between the Ridge 8 and Star and Comet deposits
(at Nyamulilima) has confirmed continuous mineralisation between these
deposits. Drilling at Lone Cone South Extension indicates that the orebody
extends westwards and that an additional ore zone exists between the South and
Central orebodies. At Nyankanga South, drill intercepts have confirmed
significant mineralisation as indicated by previous drilling.
Regional drilling on the Morila grant in Mali intersected encouraging results
in diamond hole REG003, located approximately 1km south-west, along strike of
the Morila orebody. Broad-spaced holes around this intersection have confirmed
the presence of a low-grade sub-economic mineralised halo.
At Sadiola, oxide mineralisation exploration continued and encouraging results
were obtained from FN3, indicating a potential southern extension of the
orebody. Assay results testing the gap area between FE3S and FE4 are awaited.
Further metallurgical testing is underway on the deep sulphides at Sadiola.
A high-resolution magnetic survey over the mining licence at Navachab in
Namibia was completed and the interpretation is in progress. Follow-up drilling
at Grid A West (Gecko Prospect) yielded positive results, which are also being
evaluated. A third phase of drilling will commence shortly.
In Brazil, drilling at CACubedrrego do SA-tio remains concentrated on the
Laranjeiras
orebody and this quarter returned results of 13.92 g/t over 2.05m on the
down-plunge. Two additional holes (10.28 g/t over 2.65m and 9.95 g/t over
2.25m) have indicated an additional, probable economic orebody south of
Cachorro Bravo.
In March, Serra Grande acquired the mining rights to property adjacent to its
current operations, permitting full access to the Palmeiras orebody, as well as
to the potential upside in surrounding mineralised structures.
GREENFIELDS EXPLORATION
Activities continued in the first quarter in Australia, Alaska, China,
Colombia, Russia and the DRC, with an expensed expenditure of $9m.
Exploration activities were concluded in Mongolia and the landholdings are in
the process of being divested.
An agreement was concluded to acquire an effective 8.7% stake in
Vancouver-based Dynasty Gold Corporation, which has exploration projects in
China, through a $2m private placement. The proceeds will be used to fund
exploration at two Dynasty projects, Red Valley and Wild Horse, both located in
China"s prospective Qilian metallogenic belt.
At the Kimin project in the DRC, drilling in the Adidi/D7 Kanga (Mongbwalu)
sector continued to encounter significant gold intercepts, extending
mineralisation westward.
In the USA in Alaska, drilling commenced at Lost Mine South to determine
continuity and expansion potential, with initially encouraging results.
Drilling is expected to commence at the Terra project in the third quarter of
this year.
Exploration activities in Colombia continued to focus on regional
reconnaissance, drill target definition, permitting and drill site preparation,
with drilling currently in progress on three targets. Initial drill intercepts
are encouraging.
In Australia, at the Tropicana JV, drilling continued at the Tropicana and
Rusty Nail prospects, extending the strike extent at Tropicana to 1.3km.
Significant new intersections include 21m at 2.0g/t from 50m, 42m at 3.27g/t
from 35m, and 9m at 4.17g/t.
Review of the gold market
Since the beginning of 2006, the gold price has moved strongly higher to a new
twenty-five year high. The price direction has been almost continuously upward
since late 2005.
The average price for the quarter of $554/oz was $69/oz or 14% higher than the
average price of $485/oz in the final quarter of 2005. Since the end of the
quarter, the price has broken strongly through $600/oz, a price level not seen
since December 1980, and currently trades above $660/oz. The momentum of price
rises seen in the final quarter of last year has hardly abated, with the price
of gold up by almost $160/oz since the beginning of 2006. The full benefit of
this price increase was reduced for South Africa producers by the local
currency which strengthened by 6% against the US dollar quarter- on-quarter.
Nevertheless, the average price of R108,955/kg for the period under review was
8% better than the average of R101,950/kg in the final quarter of 2005. Since
the end of the quarter, the local price has risen above R130,000/kg. In
Australia, a weaker local currency for much of the quarter assisted with
received prices for the period, although the Australian dollar has strengthened
since the end of the quarter.
GOLD
As noted above, momentum in the gold price continues, and the gold market seems
set for a sustained positive cycle.
Besides favourable circumstances particular to gold, the metal was most
certainly buoyed by continued investment flows in to commodities in general.
This is reflected in part in the high price correlation in the second-half of
2005 between gold and other metals, including zinc, silver, lead and copper.
Investor interest in commodities is reflected in the continued growth in
several major commodity funds, and this investment interest has translated into
record spot prices in metals such as copper, supported by continued physical
demand.
During the quarter under review, the price relationship between gold and silver
has broken, to the extent that the silver price has risen significantly more
sharply than even the favourable movement in gold. This move in silver has been
driven by the anticipation amongst investors and speculators of the launch of
an exchange traded fund in silver, which is likely to have a material positive
impact on demand for silver, and a related favourable impact on the silver
price. Whilst investment flows into gold exchange traded funds early in the
quarter kept the gold price firm, trade in these gold funds was much quieter
during the latter part of the quarter. This difference in the price behaviour
in the first quarter does not necessarily imply a permanent disconnection
between the two precious metals markets, and stronger prices for silver are
likely to be helpful for gold.
The interruption in the correlation between the US dollar spot price of gold
and the US dollar exchange rate against the euro has continued.
Market commentators refer frequently to changes in the US dollar/euro exchange
rate to justify movements in gold price, but it is difficult to sustain an
argument for effective correlation between the markets. During the nine months
since mid-2005, when the price behaviour of the two markets began to diverge,
the gold price has moved strongly upwards by almost 60%, whilst the dollar has
remained in a band of 6 - 7 cents or 5% against the euro.
Technical analysis of the gold price also remains strongly supportive of the
market today. Not only is the positive momentum of gold price rise in recent
years as yet unbroken, but the gold price has sustained its position above
ever-increasing historic trading averages, and analysts and commentators
predict prices well into the $600"s/oz for the year ahead.
In addition, other factors remain favourable to gold. For all the sustained
recovery in the US currency over the past year, currency market commentators
continue to call for a weaker US dollar during the year ahead. Oil prices
remain firm and rising, aided by on-going conflict in Iraq.
The investment sector remains strong and official holders of gold continue to
provide good news for the metal. The latest support from the official sector
came with the announcement during the past quarter that the Bundesbank would
not sell any gold during the current year of the second Washington Agreement.
The German central bank has elected for the second year in a row to forego its
right to sell gold as part of the annual tranche of up to 500t in terms of the
second central bank agreement on gold sales, and it is unlikely now that the
cumulative sales of gold by signatories to this agreement will reach either the
permitted amount of 500t for this year, or the total projected sales of 2,500t
for the five-year period to September 2009.
PHYSICAL MARKET
Entirely as one would expect, physical demand for gold during the final quarter
of 2005 and the first quarter of 2006 has fallen in the face of sharply higher
spot gold prices. This is particularly so in the jewellery sector and in those
markets such as India where margins are low and retail prices are close to the
underlying gold spot price.
In this regard, the annual gold demand figures for 2005 are misleading, insofar
as they show an increase of 4% year-on-year for total fabrication demand, or
some 125t of increased demand, with much of this coming from a 100t rise in
jewellery demand globally. These figures combine a strongly higher offtake
during the first half of 2005 with very substantially lower demand towards the
end of 2005. This fall in demand has carried over into 2006, and physical
offtake could be as much as 400t lower this year than it was in 2005, with
global demand for gold in jewellery actually lower than annual mine production
of gold.
Practically all demand for gold in respect of investment went into the
wholesale market of exchange traded funds, commodities exchanges and
over-the-counter purchases. Offtake of gold in both coin and bar was little
changed in 2005.
Regarding supply, new mine production was up by 2% year-on-year, with a
forecast that 2006 will see gold mine production up by a further 4%. A bigger
positive impact on supply came in the fall of almost 300t in de-hedging by gold
producers, from the total of 427t of gold hedge commitments taken back by
producers in 2004, to a relatively modest total of 130t of hedge taken back in
2005. This is the lowest level of de-hedging by gold producers since this
process commenced in 2000.
The effect of, the fall in de-hedging increases the amount of gold sold by gold
producers directly on the spot market.
Finally, just as jewellery demand has fallen in the face of higher spot prices,
so scrap supplies of gold on to the market have increased significantly during
the final quarter of 2005 and the first three months of 2006. Scrap sales of
gold of 8Moz, or 259t in the final quarter of 2005 equate to an annual rate of
supply from scrap of over 1,000t of gold, higher than at any time before.
CURRENCIES
The strength of the US dollar continues to confound all forecasts of the
inevitable weakening of the US currency.
For over a year now, analysts have continued to call for a dollar back over
$1.30 to the euro to reflect the budget deficit and more particularly the trade
and current account deficit of the United States. Notwithstanding these
forecasts, the exchange rate for the US currency against the euro has averaged
$1.20 for the past nine months and has remained in a tight range of $1.18 -
$1.23 to the European currency.
However, the likelihood of a weaker dollar must remain. The current account
deficit of the United States grew throughout 2005 to a total of $762bn for the
year, and the deficit is currently running at a trend in excess of $800bn for
2006. More importantly, with the end of the window period provided for in the
Homeland Investment Act to the end of 2005, net foreign funds flows into the US
faltered at the end of 2005 and have fallen below the amount of the trade
deficit. Notwithstanding the lack of correlation between the US dollar strength
and the gold price strength during the past nine months, it is likely that any
weakening in the US dollar during the year ahead will be beneficial to the US
dollar spot price of gold.
The South African currency opened the year stronger, and this strength has been
maintained. The rand closed the quarter at R6.17/$1 or 3% stronger than its
opening exchange rate, and the currency was as strong as R5.93/$1 during the
quarter. Notwithstanding slightly slower growth in the South African economy
and an increased trade deficit, there is no reason why this strength should not
be maintained further into the rest of the year, particularly if the
expectations of a weaker US dollar later in 2006 are correct.
HEDGING
As at 31 March 2006, the net delta hedge position of AngloGold Ashanti was
11.23Moz or 349t, valued at the spot gold price at the end of the quarter of
$582/oz. This net delta position reflects an increase of some 390,000oz or 12t
in the net delta size of the AngloGold Ashanti hedge, compared with the
position at the end of the previous quarter. This increase is due entirely to a
higher delta in open options positions, valued against a quarter-end spot price
which was higher by $65/oz than the closing spot price of $517/oz at the end of
2005.
The marked-to-market value of the hedge position as at 31 March 2006 was
negative $2.707bn. Again, the increase in the negative value of the hedge was
due entirely to the increase of the closing spot price by $65/oz
quarter-on-quarter. Had the spot price of gold at the end of March 2006
remained unchanged from the price of $517/oz at the end of December, the hedge
would have reduced in size to 10.34Moz or 322t, with a marked-to-market negative
value of $2.02bn.
The price received by the company for the quarter was $545/oz, compared with an
average spot price for the period of $554/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.
Hedge position
As at 31 March 2006, 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 11.23Moz or 349t (at 31 December 2005: 10.84Moz
or 337t).
The marked-to-market value of all hedge transactions making up the hedge
positions was a negative $2.707bn (negative R16.65bn) as at 31 March 2006 (as
at 31 December 2005: negative $1.941bn or R12.24bn). This value at 31 March
2006 was based on a gold price of $582/oz, exchange rates of R/$6.150 and
A$/$0.7148 and the prevailing market interest rates and volatilities at that
date.
As at 4 May 2006, the marked-to-market value of the hedge book was a negative
$3.633bn (negative R22.125bn), based on a gold price of $664.70 /oz and
exchange rates of R/$6.09 and A$/$0.7660 and the prevailing market interest
rates and volatilities at the time.
These marked-to-market valuations are not predictive of the future value of the
hedge position, nor of future impact on the revenue of the company. The
valuation represents the cost of buying all hedge contracts at the time of
valuation, at market prices and rates available at the time.
Year 2006 2007 2008
DOLLAR GOLD
Forward contracts Amount (kg) 2,380 25,469 30,076
US$/oz $365 $357 $365
Put options purchased Amount (kg) 11,010 1,455
US$/oz $345 $292
Put options sold Amount (kg) 14,460 855
US$/oz $485 $390
Call options purchased Amount (kg) 10,121 6,357
US$/oz $358 $344
Call options sold Amount (kg) 27,287 32,544 32,904
US$/oz $419 $387 $395
RAND GOLD
Forward contracts Amount (kg) 2,449
Rand per kg R97,520
Put options purchased Amount (kg)
Rand per kg
Put options sold Amount (kg) 3,266
Rand per kg R100,515
Call options purchased Amount (kg)
Rand per kg
Call options sold Amount (kg) 2,799 311
Rand per kg R116,185 R108,123
A DOLLAR GOLD
Forward contracts Amount (kg) *622 6,843 2,177
A$ per oz A$295 A$630 A$653
Put options purchased Amount (kg) 8,709
A$ per oz A$751
Put options sold Amount (kg) 4,977
A$ per oz A$732
Call options purchased Amount (kg) 3,110 3,732 3,110
A$ per oz A$673 A$668 A$680
Call options sold Amount (kg) 11,819
A$ per oz A$775
Delta (kg) 24,817 56,229 60,834
** Total net gold:
Delta (oz) 797,884 1,830,372 1,955,856
Year 2009 2010 2011-2015
DOLLAR GOLD
Forward contracts Amount (kg) 26,288 16,328 37,239
US$/oz $380 $382 $411
Put options purchased Amount (kg)
US$/oz
Put options sold Amount (kg) 1,882 1,882 7,527
US$/oz $400 $410 $435
Call options purchased Amount (kg)
US$/oz
Call options sold Amount (kg) 31,194 28,054 76,068
US$/oz $418 $429 $506
RAND GOLD
Forward contracts Amount (kg) 933
Rand per kg R116,335
Put options purchased Amount (kg)
Rand per kg
Put options sold Amount (kg)
Rand per kg
Call options purchased Amount (kg)
Rand per kg
Call options sold Amount (kg) 2,986 2,986 2,986
Rand per kg R202,054 R216,522 R230,990
A DOLLAR GOLD
Forward contracts Amount (kg) 3,390 3,110
A$ per oz A$648 A$683
Put options purchased Amount (kg)
A$ per oz
Put options sold Amount (kg)
A$ per oz
Call options purchased Amount (kg) 1,244 3,110
A$ per oz A$694 A$712
Call options sold Amount (kg)
A$ per oz
Delta (kg) 59,127 43,289 104,331
** Total net gold:
Delta (oz) 1,900,974 1,391,772 3,354,315
Year Total
DOLLAR GOLD
Forward contracts Amount (kg) 137,779
US$/oz $381
Put options purchased Amount (kg) 12,465
US$/oz $339
Put options sold Amount (kg) 26,606
US$/oz $457
Call options purchased Amount (kg) 16,479
US$/oz $353
Call options sold Amount (kg) 228,052
US$/oz $441
RAND GOLD
Forward contracts Amount (kg) 3,382
Rand per kg R102,711
Put options purchased Amount (kg)
Rand per kg
Put options sold Amount (kg) 3,266
Rand per kg R100,515
Call options purchased Amount (kg)
Rand per kg
Call options sold Amount (kg) 12,068
Rand per kg R190,454
A DOLLAR GOLD
Forward contracts Amount (kg) 14,899
A$ per oz A$662
Put options purchased Amount (kg) 8,709
A$ per oz A$751
Put options sold Amount (kg) 4,977
A$ per oz A$732
Call options purchased Amount (kg) 14,306
A$ per oz A$683
Call options sold Amount (kg) 11,819
A$ per oz A$775
Delta (kg) 349,329
** Total net gold:
Delta (oz) 11,231,172
* 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 31 March 2006.
Rounding of figures may result in computational discrepancies.
Year 2006 2007 2008
DOLLAR SILVER
Forward contracts Amount (kg)
$ per oz
Put options purchased Amount (kg) 32,659 43,545 43,545
$ per oz $7.11 $7.40 $7.66
Put options sold Amount (kg) 32,659 43,545 43,545
$ per oz $6.02 $5.93 $6.19
Call options purchased Amount (kg)
$ per oz
Call options sold Amount (kg) 32,659 43,545 43,545
$ per oz $8.11 $8.40 $8.64
Year 2009 2010 2011-2015 Total
DOLLAR SILVER
Forward contracts Amount (kg)
$ per oz
Put options purchased Amount (kg) 119,749
$ per oz $7.42
Put options sold Amount (kg) 119,749
$ per oz $6.05
Call options purchased Amount (kg)
$ per oz
Call options sold Amount (kg) 119,749
$ per oz $8.41
The following table indicates the group"s currency hedge position at
31 March 2006
Year 2006 2007 2008
RAND DOLLAR (000)
Forward contracts Amount ($) 64,937
US$/R R6.26
Put options purchased Amount ($) 55,000
US$/R R6.79
Put options sold Amount ($) 45,000
US$/R R6.55
Call options purchased Amount ($)
US$/R
Call options sold Amount ($) 95,000
US$/R R6.80
A DOLLAR (000)
Forward contracts Amount ($) 29,260
A$/US$ A$0.74
Put options purchased Amount ($) 60,000
A$/US$ A$0.73
Put options sold Amount ($) 80,000
A$/US$ A$0.76
Call options purchased Amount ($)
A$/US$
Call options sold Amount ($) 80,000
A$/US$ A$0.72
BRAZILIAN REAL (000)
Forward contracts Amount ($) 18,000 4,000
US$/BRL BRL3.21 BRL3.31
Put options purchased Amount ($) 5,000 2,500
US$/BRL BRL2.28 BRL2.30
Put options sold Amount ($) 5,000 2,500
US$/BRL BRL2.13 BRL2.10
Call options purchased Amount ($)
US$/BRL
Call options sold Amount ($) 20,000 2,500
US$/BRL BRL3.07 BRL2.36
Year 2009 2010 2011-2015 Total
RAND DOLLAR (000)
Forward contracts Amount ($) 64,937
US$/R R6.26
Put options purchased Amount ($) 55,000
US$/R R6.79
Put options sold Amount ($) 45,000
US$/R R6.55
Call options purchased Amount ($)
US$/R
Call options sold Amount ($) 95,000
US$/R R6.80
A DOLLAR (000)
Forward contracts Amount ($) 29,260
A$/US$ A$0.74
Put options purchased Amount ($) 60,000
A$/US$ A$0.73
Put options sold Amount ($) 80,000
A$/US$ A$0.76
Call options purchased Amount ($)
A$/US$
Call options sold Amount ($) 80,000
A$/US$ A$0.72
BRAZILIAN REAL (000)
Forward contracts Amount ($) 22,000
US$/BRL BRL3.23
Put options purchased Amount ($) 7,500
US$/BRL BRL2.28
Put options sold Amount ($) 7,500
US$/BRL BRL2.12
Call options purchased Amount ($)
US$/BRL
Call options sold Amount ($) 22,500
US$/BRL BRL2.99
Rounding of figures may result in computational discrepancies.
Group income statement
Quarter Quarter
ended ended
March December
2006 2005
SA Rand million Notes
Unaudited Unaudited
Revenue 2 4,456 4,478
Gold income 4,246 4,337
Cost of sales 3 (3,463) (3,929)
Non-hedge derivative loss (1,100) (748)
Gross (loss) profit (318) (340)
Corporate administration and other
expenses (127) (99)
Market development costs (26) (21)
Exploration costs (73) (69)
Other net operating expenses (41) (33)
Operating special items 4 22 (416)
Operating (loss) profit (563) (978)
Interest receivable 30 28
Exchange (loss) gain (4) (36)
Fair value adjustment on option component
of convertible bond (233) (271)
Finance costs and unwinding of
decommissioning
and restoration obligations (210) (216)
Fair value loss on interest rate swaps - -
Share of associates" (loss) profit (4) (15)
(Loss) profit before taxation (984) (1,487)
Taxation 5 (43) 109
(Loss) profit after taxation from
continuing operations (1,026) (1,378)
Loss for the period from discontinued
operations 9 (7) (56)
(Loss) profit for the period (1,034) (1,434)
Allocated as follows
Equity shareholders of parent (1,074) (1,463)
Minority interest 40 29
(1,034) (1,434)
Basic (loss) earnings per ordinary share
(cents)
(Loss) profit from continuing operations
(a) (402) (531)
Loss from discontinued operations (a) (3) (21)
(Loss) profit (405) (552)
Diluted (loss) earnings per ordinary
share (cents)
(Loss) profit from continuing operations
(b) (402) (531)
Loss from discontinued operations (b) (3) (21)
(Loss) profit (c) (405) (552)
Dividends (d)
- Rm
- cents per share
Quarter Year
ended ended
March December
2005 2005
SA Rand million Audited
Unaudited
Revenue 4,016 17,388
Gold income 3,858 16,750
Cost of sales (3,415) (14,713)
Non-hedge derivative loss (188) (949)
Gross (loss) profit 255 1,088
Corporate administration and other expenses (99) (410)
Market development costs (21) (84)
Exploration costs (60) (288)
Other net operating expenses (18) (127)
Operating special items (2) (499)
Operating (loss) profit 55 (320)
Interest receivable 54 155
Exchange (loss) gain 7 (29)
Fair value adjustment on option component of
convertible bond 115 (211)
Finance costs and unwinding of decommissioning
and restoration obligations (148) (690)
Fair value loss on interest rate swaps (16) (5)
Share of associates" (loss) profit 1 (17)
(Loss) profit before taxation 68 (1,117)
Taxation 59 220
(Loss) profit after taxation from continuing
operations 127 (897)
Loss for the period from discontinued operations (51) (219)
(Loss) profit for the period 76 (1,116)
Allocated as follows
Equity shareholders of parent 50 (1,262)
Minority interest 26 146
76 (1,116)
Basic (loss) earnings per ordinary share (cents)
(Loss) profit from continuing operations (a) 38 (394)
Loss from discontinued operations (a) (19) (83)
(Loss) profit 19 (477)
Diluted (loss) earnings per ordinary share (cents)
(Loss) profit from continuing operations (b) 38 (394)
Loss from discontinued operations (b) (19) (83)
(Loss) profit (c) 19 (477
Dividends (d) 614
- Rm 232
- cents per share
(a) Calculated on the basic weighted average number of ordinary shares.
(b) Calculated on the diluted weighted average number of ordinary shares.
(c) The impact of the diluted earnings per share is anti-dilutive and
therefore equal to the basic earnings per share.
(d) Dividends are translated at actual rates on date of payment.
Rounding of figures may result in computational discrepancies.
Group income statement
Quarter Quarter
ended ended
March December
2006 2005
US Dollar million Notes Unaudited Unaudited
Revenue 2 724 687
Gold income 690 665
Cost of sales 3 (563) (602)
Non-hedge derivative loss (188) (120)
Gross (loss) profit (61) (57)
Corporate administration and
other expenses (21) (15)
Market development costs (4) (3)
Exploration costs (12) (11)
Other net operating expenses (7) (6)
Operating special items 4 4 (64)
Operating (loss) profit (101) (155)
Interest receivable 5 4
Exchange (loss) gain (1) (5)
Fair value adjustment on option
component of convertible bond (39) (42)
Finance costs and unwinding of
decommissioning
and restoration obligations (34) (33)
Fair value loss on interest rate
swaps - -
Share of associates" (loss)
profit (1) (2)
(Loss) profit before taxation (170) (233)
Taxation 5 (7) 19
(Loss) profit after taxation
from continuing operations (177) (214)
Loss for the period from
discontinued operations 9 (1) (9)
(Loss) profit for the period (179) (223)
Allocated as follows
Equity shareholders of the parent (185) (227)
Minority interest 6 5
(179) (223)
Basic (loss) earnings per
ordinary share (cents)
(Loss) profit from continuing
operations (a) (69) (83)
Loss from discontinued
operations (a) (1) (3)
(Loss) profit (70) (86)
Diluted (loss) earnings per
ordinary share (cents)
(Loss) profit from continuing
operations (b) (69) (83)
Loss from discontinued
operations (b) (1) (3)
(Loss) profit (c) (70) (86)
Dividends d
- $m
Quarter Year
ended ended
March December
2005 2005
US Dollar million Unaudited Audited
Revenue 668 2,730
Gold income 642 2,629
Cost of sales (568) (2,311)
Non-hedge derivative loss (17) (135)
Gross (loss) profit 57 183
Corporate administration and other expenses (16) (64)
Market development costs (4) (13)
Exploration costs (10) (45)
Other net operating expenses (3) (20)
Operating special items - (77)
Operating (loss) profit 24 (36)
Interest receivable 9 25
Exchange (loss) gain 1 (5)
Fair value adjustment on option component of
convertible bond 19 (32)
Finance costs and unwinding of decommissioning
and restoration obligations (24) (108)
Fair value loss on interest rate swaps (3) (1)
Share of associates" (loss) profit - (3)
(Loss) profit before taxation 26 (160)
Taxation 9 36
(Loss) profit after taxation from continuing
operations 35 (124)
Loss for the period from discontinued operations (9) (36)
(Loss) profit for the period 26 (160)
Allocated as follows
Equity shareholders of the parent 22 (183)
Minority interest 4 23
26 (160)
Basic (loss) earnings per ordinary share (cents)
(Loss) profit from continuing operations (a) 12 (56)
Loss from discontinued operations (a) (3) (14)
(Loss) profit 8 (69)
Diluted (loss) earnings per ordinary share (cents)
(Loss) profit from continuing operations (b) 12 (56)
Loss from discontinued operations (b) (3) (14)
(Loss) profit (c) 8 (69)
Dividends d
- $m 95
- cents per share 36
(a) Calculated on the basic weighted average number of ordinary shares.
(b) Calculated on the diluted weighted average number of ordinary shares.
(c) The impact of the diluted earnings per share is anti-dilutive and
therefore equal to the basic earnings per share.
(d) Dividends are translated at actual rates on date of payment.
Rounding of figures may result in computational discrepancies.
Group balance sheet
As at As at As at
March December March
2006 2005 2005
SA Rand million Notes Unaudited Audited Unaudited
ASSETS
Non-current assets
Tangible assets 36,904 37,464 35,685
Intangible assets 2,419 2,533 2,569
Investments in associates 214 223 43
Other investments 647 645 628
Inventories 1,272 1,182 677
Derivatives 171 243 458
Trade and other receivables 126 124 108
Deferred taxation 321 279 176
Other non-current assets 136 101 38
42,210 42,794 40,382
Current assets
Inventories 2,475 2,436 2,365
Trade and other receivables 1,706 1,589 1,654
Derivatives 4,876 4,280 3,512
Current portion of other
non-current assets 6 43 5
Cash restricted for use 21 52 184
Cash and cash equivalents 1,419 1,328 1,572
10,503 9,728 9,292
100 100 -
Non-current assets held for
sale
10,603 9,828 9,292
52,814 52,622 49,674
TOTAL ASSETS
EQUITY AND LIABILITIES
Share capital and premium 12 19,070 19,047 18,995
Retained earnings and other
reserves 13 (4,600) (2,463) (193)
Shareholders" equity 14,470 16,584 18,802
Minority interests 14 384 374 367
Total equity 14,854 16,958 19,169
Non-current liabilities
Borrowings 10,798 10,825 9,934
Environmental rehabilitation
and other provisions 2,271 2,265 1,568
Provision for pension and
post-retirement benefits 1,252 1,249 980
Trade, other payables and
deferred income 80 87 26
Derivatives 2,928 2,460 2,191
Deferred taxation 6,903 7,353 8,061
24,233 24,239 22,760
Current liabilities
Trade, other payables and
deferred income 2,772 2,711 2,554
Current portion of borrowings 871 1,190 889
Derivatives 9,212 6,814 3,948
Taxation 872 710 354
13,727 11,425 7,745
Total liabilities 37,960 35,664 30,505
52,814 52,622 49,674
TOTAL EQUITY AND LIABILITIES
Net asset value - cents per
share 5,603 6,401 7,246
Rounding of figures may result in computational discrepancies.
Group balance sheet
As at As at As at
March December March
2006 2005 2005
US Dollar million Notes Unaudited Audited Unaudited
ASSETS
Non-current assets
Tangible assets 5,982 5,905 5,735
Intangible assets 392 399 413
Investments in associates 35 35 7
Other investments 105 102 101
Inventories 206 186 109
Derivatives 28 38 74
Trade and other receivables 20 20 17
Deferred taxation 52 44 28
Other non-current assets 22 16 6
6,842 6,745 6,490
Current assets
Inventories 401 384 380
Trade and other receivables 277 250 266
Derivatives 790 675 564
Current portion of other
non-current assets 1 7 1
Cash restricted for use 3 8 29
Cash and cash equivalents 230 209 253
1,703 1,533 1,493
16 16 -
Non-current assets held for
sale 1,719 1,549 1,493
8,561 8,294 7,983
TOTAL ASSETS
EQUITY AND LIABILITIES
Share capital and premium 12 3,091 3,002 3,053
Retained earnings and other
reserves 13 (745) (388) (31)
Shareholders" equity 2,346 2,614 3,022
Minority interests 14 62 59 59
2,408 2,673 3,081
Total equity
Non-current liabilities
Borrowings 1,750 1,706 1,597
Environmental rehabilitation
and other provisions 368 356 252
Provision for pension and
post-retirement benefits 203 197 157
Trade, other payables and
deferred income 13 14 4
Derivatives 475 388 352
Deferred taxation 1,119 1,159 1,295
3,928 3,820 3,657
Current liabilities
Trade, other payables and
deferred income 449 427 411
Current portion of borrowings 141 188 143
Derivatives 1,493 1,074 634
Taxation 141 112 57
2,225 1,801 1,245
Total liabilities 6,153 5,621 4,902
8,561 8,294 7,983
TOTAL EQUITY AND LIABILITIES
Net asset value - cents per
share 908 1,009 1,165
Rounding of figures may result in computational discrepancies.
Group cash flow statement
Quarter Quarter Quarter Year
ended ended ended ended
March December March December
2006 2005 2005 2005
SA Rand million Unaudited Unaudited Unaudited Audited
Cash flows from
operating activities
Receipts from customers 4,052 4,818 3,784 17,175
Payments to suppliers
and employees (2,482) (3,588) (2,959) (12,742)
Cash generated from
operations 1,570 1,230 825 4,433
Cash generated
(utilised) by
discontinued operations 4 (23) (51) (188)
Environmental,
rehabilitation and other
expenditure (31) (48) (12) (104)
Termination of employee
benefit plan - - - (61)
Taxation paid (90) (48) (61) (188)
Net cash inflow from
operating activities 1,453 1,110 701 3,892
Cash flows from
investing activities
Capital expenditure (961) (1,283) (864) (4,600)
Proceeds from disposal
of tangible assets 11 37 - 53
Proceeds on disposal of
discontinued assets 10 18 - 27
Other investments
acquired (5) (67) (6) (83)
Associate acquired - (1) - (93)
Proceeds from disposal
of investments 17 6 - 7
Cash restricted for use 30 33 (25) 112
Interest received 18 20 45 113
Loans advanced - (2) (1) (45)
Repayment of loans
advanced 2 23 - 38
Utilised in hedge
restructure - - (415) (415)
Net cash outflow from
investing activities (877) (1,215) (1,266) (4,886)
Cash flows from
financing activities
Proceeds from issue of
share capital 23 25 8 60
Proceeds from borrowings 329 154 2,568 4,194
Repayment of borrowings (369) (141) (1,488) (2,183)
Finance costs (251) (45) (221) (471)
Dividends paid (183) (26) (488) (1,051)
Net cash (outflow)
inflow from financing
activities (451) (32) 379 549
Net increase (decrease)
in cash and cash
equivalents 124 (137) (186) (445)
Translation (33) (4) 128 143
Cash and cash
equivalents at beginning
of period 1,328 1,469 1,630 1,630
Net cash and cash
equivalents at end of
period 1,419 1,328 1,572 1,328
Cash generated from
operations
(Loss) profit before
taxation (984) (1,487) 68 (1,117)
Adjusted for:
Movement on non-hedge
derivatives 1,582 1,257 427 1,744
Amortisation of tangible
assets 859 900 732 3,203
Deferred stripping (107) (140) 8 (153)
Interest receivable (30) (28) (54) (155)
(22) 416 2 444
Operating special items
Finance costs and
unwinding of
decommissioning and
restoration obligations 210 216 148 690
Amortisation of
intangible assets 3 3 3 13
Fair value adjustment on
option component of
convertible bond 233 271 (115) 211
Other non-cash movements 61 70 (33) 267
Movement in working
capital (236) (248) (361) (714)
1,570 1,230 825 4,433
Movement in working
capital
Increase in inventories (101) (186) (567) (1,086)
Increase in trade and
other receivables (80) (66) - (46)
(Decrease) increase in
trade and other payables (55) 5 206 418
(236) (248) (361) (714)
Rounding of figures may result in computational discrepancies.
Group cash flow statement
Quarter Quarter Quarter Year
ended ended ended ended
March December March December
2006 2005 2005 2005
US Dollar million Unaudited Unaudited Unaudited Audited
Cash flows from
operating activities
Receipts from customers 661 741 621 2,707
Payments to suppliers
and employees (406) (551) (486) (2,008)
Cash generated from
operations 255 190 135 699
Cash generated
(utilised) by
discontinued operations 1 (4) (8) (31)
Environmental,
rehabilitation and other
expenditure (5) (8) (2) (16)
Termination of employee
benefit plan - - - (10)
Taxation paid (15) (7) (10) (30)
Net cash inflow from
operating activities 236 171 115 612
Cash flows from
investing activities
Capital expenditure (156) (197) (144) (722)
Proceeds from disposal
of tangible assets 2 6 - 8
Proceeds on disposal of
discontinued assets 2 3 - 4
Other investments
acquired (1) (10) (1) (12)
Associate acquired - - - (15)
Proceeds from disposal
of investments 3 - - 1
Cash restricted for use 5 5 (4) 17
Interest received 3 3 7 18
Loans advanced - - - (7)
Repayment of loans
advanced - 4 - 6
Utilised in hedge
restructure - - (69) (69)
Net cash outflow from
investing activities (143) (186) (211) (771)
Cash flows from
financing activities
Proceeds from issue of
share capital 4 4 1 9
Proceeds from borrowings 54 19 458 659
Repayment of borrowings (60) (19) (278) (343)
Finance costs (41) (6) (37) (74)
Dividends paid (29) (4) (82) (169)
Net cash (outflow)
inflow from financing
activities (73) (7) 62 82
Net increase (decrease)
in cash and cash
equivalents 20 (22) (34) (77)
Translation 1 - (2) (3)
Cash and cash
equivalents at beginning
of period 209 231 289 289
Net cash and cash
equivalents at end of
period 230 209 253 209
Cash generated from
operations
(Loss) profit before
taxation (170) (233) 26 (160)
Adjusted for:
Movement on non-hedge
derivatives 266 199 57 262
Amortisation of tangible
assets 140 138 122 503
Deferred stripping (17) (22) 1 (24)
Interest receivable (5) (4) (9) (25)
(4) 64 - 68
Operating special items
Finance costs and
unwinding of
decommissioning and
restoration obligations 34 33 24 108
Amortisation of
intangible assets - - - 2
Fair value adjustment on
option component of
convertible bond 39 42 (19) 32
Other non-cash movements 10 10 (6) 41
Movement in working
capital (39) (37) (62) (108)
255 190 135 699
Movement in working
capital
Increase in inventories (33) (31) (50) (123)
(Increase) decrease in
trade and other
receivables (20) (11) 29 23
Increase (decrease)
increase in trade and
other payables 14 5 (40) (8)
(39) (37) (62) (108)
Rounding of figures may result in computational discrepancies.
Statement of recognised income and expense
Quarter Year Quarter
ended ended ended
March December March
2006 2005 2005
Restated Restated
Unaudited Unaudited Unaudited
SA Rand million
Actuarial loss on defined benefit
retirement plans - (173) (2)
Net loss on cash flow hedges removed
from equity and reported in income 193 391 97
Net loss on cash flow hedges (745) (1,281) (57)
Gain (loss) on available for sale
financial assets 15 17 (16)
Deferred taxation on items above 151 445 49
Net exchange translation differences (525) 1,534 1,386
Net (expense) income recognised
directly in equity (911) 933 1,457
(Loss) profit for the period (1,034) (1,116) 76
Total recognised income and expense
for the period (1,945) (183) 1,533
Attributable to:
Equity shareholders of the parent (1,973) (355) 1,481
Minority interest 28 172 52
(1,945) (183) 1,533
US Dollar million
Actuarial loss on defined benefit
retirement plans - (27) -
Net loss on cash flow hedges removed
from equity and reported in income 31 18 15
Net loss on cash flow hedges (121) (202) (9)
Gain (loss) on available for sale
financial assets 3 2 (3)
Deferred taxation on items above 26 69 7
Net exchange translation differences (85) 293 229
Net (expense) income recognised
directly in equity (146) 153 239
(Loss) profit for the period (179) (160) 26
Total recognised income and expense
for the period (325) (7) 265
Attributable to:
Equity shareholders of the parent (331) (28) 262
Minority interest 6 21 3
(325) (7) 265
Rounding of figures may result in computational discrepancies.
Notes
for the quarter ended 31 March 2006
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 2005 and
revised International Financial Reporting Standards (IFRS) which are effective
1 January 2006, where applicable.
The financial statements of AngloGold Ashanti Limited have been prepared in
compliance with IAS34, in compliance with the JSE Listings Requirements and in
the manner required by the South African Companies Act, 1973 for the
preparation of financial information of the group for the quarter ended 31
March 2006.
Where the preparation or classification of an item has been amended,
comparative information has been reclassified to ensure comparability with the
current period. Such amendments have been made to provide the users of the
financial statements with additional information.
2. Revenue
Quarter ended Year
ended
Mar Dec Mar Dec
2006 2005 2005 2005
Unaudited Unaudited Unaudited Audited
SA Rand million
Gold income 4,246 4,337 3,858 16,750
By-products and other
revenue (note 3) 181 112 103 483
Interest receivable 30 28 54 155
4,456 4,478 4,016 17,388
Quarter ended Year
ended
Mar Dec Mar Dec
2006 2005 2005 2005
Unaudited Unaudited Unaudited Audited
US Dollar million
Gold income 690 665 642 2,629
By-products and other
revenue (note 3) 29 17 17 76
Interest receivable 5 4 9 25
724 687 668 2,730
3. Cost of sales
Quarter ended Year
ended
Mar Dec Mar Dec
2006 2005 2005 2005
Unaudited Unaudited Unaudited Audited
SA Rand million
Cash operating costs 2,635 2,788 2,753 11,311
By-product and other
revenue (note 2) (181) (112) (103) (483)
2,454 2,676 2,650 10,828
Other cash costs 118 116 100 412
Total cash costs 2,572 2,792 2,750 11,240
Retrenchment costs 12 62 14 168
Rehabilitation & other
non-cash costs 39 207 45 368
Production costs 2,623 3,061 2,809 11,776
Amortisation of tangible
assets 859 900 732 3,203
Amortisation of
intangible assets 3 3 3 13
Total production costs 3,484 3,965 3,544 14,992
Inventory change (21) (35) (129) (279)
3,463 3,929 3,415 14,713
Quarter ended Year
ended
Mar Dec Mar Dec
2006 2005 2005 2005
Unaudited Unaudited Unaudited Audited
US Dollar million
Cash operating costs 428 427 458 1,779
By-product and other
revenue (note 2) (29) (17) (17) (76)
399 410 441 1,703
Other cash costs 19 18 17 65
Total cash costs 419 428 458 1,768
Retrenchment costs 2 9 2 26
Rehabilitation & other
non-cash costs 6 31 7 57
Production costs 427 468 467 1,851
Amortisation of tangible
assets 140 138 122 503
Amortisation of
intangible assets - - - 2
Total production costs 567 607 590 2,356
Inventory change (4) (5) (21) (45)
563 602 568 2,311
Rounding of figures may result in computational discrepancies.
4. Operating special items
Year
Quarter ended ended
Mar Dec Mar Dec
2006 2005 2005 2005
Unaudited Unaudited Unaudited Audited
SA Rand mi llion
Contract termination
fee at Geita - - - (55)
Over (under) provision
of indirect taxes 18 (27) - (27)
Impairment of
intangible assets - (125) - (125)
Impairment of tangible
assets (2) (255) - (300)
Profit (loss) on sale
and abandonment
of assets 6 (9) (2) 8
22 (416) (2) (499)
Year
Quarter ended ended
Mar Dec Mar Dec
2006 2005 2005 2005
Unaudited Unaudited Unaudited Audited
US Dollar million
Contract termination
fee at Geita - - - (9)
Over (under) provision
of indirect taxes 3 (4) - (4)
Impairment of
intangible assets - (20) - (20)
Impairment of tangible
assets - (38) - (44)
Profit (loss) on sale
and abandonment
of assets 1 (2) - -
4 (64) - (77)
5. Taxation
Quarter ended Year
ended
Mar Dec Mar Dec
2006 2005 2005 2005
Unaudited Unaudited Unaudited Audited
SA Rand million
Current tax
Non-mining taxation (222) (117) (37) (182)
Disposal and impairment
of
tangible assets (4) (4) - (2)
Under provision prior
year - (347) (1) (347)
(226) (468) (38) (531)
Deferred taxation
Temporary differences (18) 4 (40) (244)
Impairment of tangible
assets - 64 - 79
Change in estimated
deferred
taxation - 74 - 74
Contract termination
expenditure at
Geita - - - 19
Change in tax rate - 302 79 695
Unrealised non-hedge
derivatives 202 133 58 128
184 577 97 751
Total taxation (43) 109 59 220
Quarter ended Year
ended
Mar Dec Mar Dec
2006 2005 2005 2005
Unaudited Unaudited Unaudited Audited
US Dollar million
Current tax
Non-mining taxation (36) (18) (6) (29)
Disposal and impairment
of
tangible assets (1) (1) - -
Under provision prior
year - (52) - (53)
(37) (71) (6) (82)
Deferred taxation
Temporary differences (3) (1) (7) (37)
Impairment of tangible
assets - 10 - 12
Change in estimated
deferred
taxation - 12 - 12
Contract termination
expenditure at
Geita - - - 3
Change in tax rate - 48 13 107
Unrealised non-hedge
derivatives 33 21 9 21
30 90 15 118
Total taxation (7) 19 9 36
Rounding of figures may result in computational discrepancies.
6. Headline (loss) earnings
Quarter ended Year
ended
Mar Dec Mar Dec
2006 2005 2005 2005
Unaudited Unaudited Unaudited Audited
SA Rand million
The (loss) profit
attributable to equity
shareholders has been
adjusted
by the following to
arrive at headline
(loss) earnings:
(Loss) profit
attributable to equity
shareholders (1,074) (1,463) 50 (1,262)
Impairment of tangible
assets (note 4) 2 255 - 300
Impairment of
intangible assets
(note 4) - 125 - 125
(Profit) loss on
disposal of assets (6) (22) 2 (39)
Impairment of associate - 11 - 11
Taxation on items above
- current
portion 4 4 - 2
Taxation on items above
- deferred
portion (note 5) - (64) - (79)
Net loss from
discontinued operations
(note 9) 7 56 51 219
Headline (loss) earnings (1,067) (1,097) 103 (723)
Cents per share(1)
Headline (loss) earnings (403) (414) 39 (273)
Quarter ended Year
ended
Mar Dec Mar Dec
2006 2005 2005 2005
Unaudited Unaudited Unaudited Audited
US Dollar million
The (loss) profit
attributable to equity
shareholders has been
adjusted
by the following to
arrive at headline
(loss) earnings:
(Loss) profit
attributable to equity
shareholders (185) (227) 22 (183)
Impairment of tangible
assets (note 4) - 38 - 44
Impairment of intangible
assets
(note 4) - 20 - 20
(Profit) loss on disposal
of assets (1) (4) - (5)
Impairment of associate - 2 - 2
Taxation on items above -
current
portion 1 1 - -
Taxation on items above -
deferred
portion (note 5) - (10) - (12)
Net loss from
discontinued operations
(note 9) 1 9 9 36
Headline (loss) earnings (184) (171) 31 (98)
Cents per share(1)
Headline (loss) earnings (69) (65) 12 (37)
(1) Calculated on the basic weighted average number of ordinary shares.
7. Headline earnings adjusted for the effect of unrealised non-hedge
derivatives, fair value gain (loss) on convertible bond and interest rate
swaps
Quarter ended Year
ended
Mar Dec Mar Dec
2006 2005 2005 2005
Unaudited Unaudited Unaudited Unaudited
SA Rand million
Headline (loss)
earnings (note 6) (1,067) (1,097) 103 (723)
Unrealised non-hedge
derivatives 1,566 1,210 421 1,900
Deferred taxation on
unrealised non-
hedge derivatives (note
5) (202) (133) (58) (128)
Fair value gain (loss)
on convertible
233 271 (115) 211
bond
Fair value gain (loss)
on interest rate
swap - - 16 5
Deferred tax on
interest rate swap - - 2 -
Headline earnings
before unrealised
non-hedge derivatives,
fair value
gain (loss) on
convertible bond
and interest rate swaps 530 250 368 1,265
Quarter ended Year
ended
Mar Dec Mar Dec
2006 2005 2005 2005
Unaudited Unaudited Unaudited Unaudited
US Dollar million
Headline (loss)
earnings (note 6) (184) (171) 31 (98)
Unrealised non-hedge
derivatives 264 191 55 286
Deferred taxation on
unrealised non-
hedge derivatives (note
5) (33) (21) (9) (21)
Fair value gain (loss)
on convertible
39 42 (19) 32
bond
Fair value gain (loss)
on interest rate
swap - - 3 1
Deferred tax on
interest rate swap - - - -
Headline earnings
before unrealised
non-hedge derivatives,
fair value
gain (loss) on
convertible bond
and interest rate swaps 86 41 61 200
Rounding of figures may result in computational discrepancies.
Quarter ended Year
ended
Mar Dec Mar Dec
2006 2005 2005 2005
Unaudited Unaudited Unaudited Unaudited
SA Rand million
Cents per share(1)
Headline earnings
adjusted for the
effect of unrealised
non-hedge
derivatives, fair
value gain (loss)
on convertible bond
and interest
rate swaps 200 94 139 478
Quarter ended Year
ended
Mar Dec Mar Dec
2006 2005 2005 2005
Unaudited Unaudited Unaudited Unaudited
US Dollar million
Cents per share(1)
Headline earnings
adjusted for the
effect of unrealised
non-hedge
derivatives, fair value
gain (loss)
on convertible bond and
interest
rate swaps 32 15 23 76
(1) Calculated on the basic weighted average number of ordinary shares.
(2) Non-hedge derivatives in the income statement comprise the change in
fair value of all non-hedge derivatives as follows:
- Open positions: The change in fair value from the previous reporting date
or date of recognition (if later) through to the current reporting date;
and
- Settled positions: The change in fair value from the previous reporting
date or date of recognition (if later)through to the date of settlement.
Headline earnings adjusted for the effect of unrealised non-hedge derivatives,
fair value gain (loss) on convertible bond and interest rate swaps, is intended
to illustrate earnings after adjusting for:
- The unrealised fair value change in contracts that are still open at the
reporting date, as well as, the unwinding of the historic marked-to-market
value of the positions settled in the period; and
- Investment in hedge restructure transaction: During the hedge restructure in
the quarter ended 31 December 2004 and the quarter ended 31 March 2005, $83m
and $69m in cash was injected into the hedge book to increase the value of
long-dated contracts. This investment in long-dated derivatives (all of
which have not yet matured), for the purposes of the adjustment to earnings,
will only be taken into account when the long-dated contracts are settled.
- The unrealised fair value change on the option component of the convertible
bond.
8. Gross profit adjusted for the effect of unrealised non-hedge derivatives
Quarter ended Year
ended
Mar Dec Mar Dec
2006 2005 2005 2005
Unaudited Unaudited Unaudited Unaudited
SA Rand million
Reconciliation of gross
(loss) profit to
gross profit adjusted
for the effect
of unrealised non-hedge
derivatives:
Gross (loss) profit (318) (340) 255 1,088
Unrealised non-hedge
derivatives 1,566 1,210 421 1,900
Gross profit adjusted
for the effect
of unrealised non-hedge
derivatives(1) 1,248 870 676 2,988
Quarter ended Year
ended
Mar Dec Mar Dec
2006 2005 2005 2005
Unaudited Unaudited Unaudited Unaudited
US Dollar million
Reconciliation of gross
(loss) profit to
gross profit adjusted
for the effect
of unrealised non-hedge
derivatives:
Gross (loss) profit (61) (57) 57 183
Unrealised non-hedge
derivatives 264 191 55 286
Gross profit adjusted
for the effect
of unrealised non-hedge
derivatives(1) 202 134 112 469
(1) Non-hedge derivatives in the income statement comprise the change in
fair value of all non-hedge derivatives as follows:
- Open positions: The change in fair value from the previous reporting date
or date of recognition (if later) through to the current reporting date;
and
- Settled positions: The change in fair value from the previous reporting
date or date of recognition (if later) through to the date of settlement.
Gross profit adjusted for the effect of unrealised non-hedge derivatives, is
intended to illustrate earnings after adjusting for:
- The unrealised fair value change in contracts that are still open at the
reporting date, as well as, the unwinding of the historic marked-to-market
value of the positions settled in the period; and
- Investment in hedge restructure transaction: During the hedge restructure
in the quarter ended 31 December 2004 and the quarter ended 31 March 2005,
$83m and $69m in cash was injected into the hedge book to increase the
value of long-dated contracts. This investment in long-dated derivatives
(all of which have not yet matured), for the purposes of the adjustment to
earnings, will only be taken into account when the long-dated contracts are
settled.
Rounding of figures may result in computational discrepancies.
9. Discontinued operations
The Ergo surface dump reclamation, which forms part of the South African
operations, has been discontinued as the operation has reached the end of
its useful life. The results of Ergo are presented below:
Quarter ended Year
ended
Mar Dec Mar Dec
2006 2005 2005 2005
Unaudited Unaudited Unaudited Audited
SA Rand million
Gold income 6 12 85 111
Retrenchment,
rehabilitation and other
costs (5) (7) (136) (418)
Gross profit (loss) 1 5 (51) (307)
Impairment loss reversed - - - 115
Profit (loss) before
taxation from
discontinued operations 1 5 (51) (192)
Deferred taxation (8) (61) - (27)
Net loss attributable to
discontinued
operations (7) (56) (51) (219)
Quarter ended Year
ended
Mar Dec Mar Dec
2006 2005 2005 2005
Unaudited Unaudited Unaudited Audited
US Dollar million
Gold income 1 2 14 18
Retrenchment,
rehabilitation and other
costs (1) (1) (23) (66)
Gross profit (loss) - 1 (9) (48)
Impairment loss reversed - - - 17
Profit (loss) before
taxation from
discontinued operations - 1 (9) (31)
Deferred taxation (1) (9) - (5)
Net loss attributable to
discontinued
operations (1) (9) (9) (36)
10. Capital commitments
Mar Dec Mar
2006 2005 2005
Unaudited Unaudited Unaudited
SA Rand million
Orders placed and outstanding on
capital contracts at the prevailing
rate of exchange 2,101 1,182 1,108
Mar Dec Mar
2006 2005 2005
Unaudited Unaudited Unaudited
US Dollar million
Orders placed and outstanding on
capital contracts at the prevailing
rate of exchange 341 186 178
Liquidity and capital resources:
To service the above capital commitments and other operational requirements,
the group is dependant upon cash generated from the South African operations,
borrowing facilities, share capital issue and cash distributions from offshore
operations.
Cash generated from the South African operations fund to a large extent the
capital expenditure to maintain and expand those operations in South Africa.
Consequently other funding requirements are serviced from borrowing facilities
and offshore distributions which are subject to market and other risks. The
credit facilities and other financing arrangements contain financial covenants
and other similar undertakings.
The distributions from offshore operations are subject to foreign investment
and exchange control laws and regulations and the quantity of foreign exchange
available in offshore countries. In addition offshore distributions from joint
venture partners are subject to consent and co-operation from those joint
venture partners.
The group"s current covenant performance, cash and liquidity funds from the
various resources available are within the required limits which will meet its
obligations and capital commitments.
Rounding of figures may result in computational discrepancies.
11. Shares
Quarter ended
March Dec
2006 2005
Unaudited Unaudited
Authorised:
Ordinary shares of 25 SA cents each 400,000,000 400,000,000
A redeemable preference shares of 50 SA cents
each 2,000,000 2,000,000
B redeemable preference shares of 1 SA cent each 5,000,000 5,000,000
Issued and fully-paid:
Ordinary shares in issue 265,117,213 264,938,432
A redeemable preference shares 2,000,000 2,000,000
B redeemable preference shares 778,896 778,896
Weighted average number of ordinary shares for
the period
Basic ordinary shares 265,064,368 264,851,516
Diluted number of ordinary shares 265,574,084 265,416,952
Year ended
Mar Dec
2005 2005
Unaudited Audited
Authorised:
Ordinary shares of 25 SA cents each 400,000,000 400,000,000
A redeemable preference shares of 50 SA cents
each 2,000,000 2,000,000
B redeemable preference shares of 1 SA cent each 5,000,000 5,000,000
Issued and fully-paid:
Ordinary shares in issue 264,527,794 264,938,432
A redeemable preference shares 2,000,000 2,000,000
B redeemable preference shares 778,896 778,896
Weighted average number of ordinary shares for
the period
Basic ordinary shares 264,488,624 264,635,634
Diluted number of ordinary shares 265,024,329 265,236,949
During the quarter, 178,781 ordinary shares were allotted in terms of the
AngloGold Share Incentive Scheme. All the preference shares are held by a
wholly-owned subsidiary company.
12. Share capital and premium
As at As at As at
Mar Dec Mar
2006 2005 2005
Unaudited Audited Unaudited
SA Rand million
Balance at beginning of period 19,047 18,987 18,987
Ordinary shares issued 23 60 8
Translation - - -
Balance at end of period 19,070 19,047 18,995
As at As at As at
Mar Dec Mar
2006 2005 2005
Unaudited Audited Unaudited
US Dollar million
Balance at beginning of period 3,002 3,364 3,364
Ordinary shares issued 4 9 1
Translation 85 (371) (312)
Balance at end of period 3,091 3,002 3,053
Rounding of figures may result in computational discrepancies.
13. Retained earnings and other reserves
Foreign
Retained Non- currency
Earnings distributable translation
reserves reserve
SA Rand million
Balance at December 2004 3,379 138 (3,552)
Actuarial gains and losses
recognised
Profit attributable to equity
shareholders 50
Dividends (477)
Net loss on cash flow hedges
removed
from equity and reported in
income
Net loss on cash flow hedges
Deferred taxation on cash
flow hedges
Loss on available for sale
financial
assets
Translation 1,473
Balance at March 2005
(restated) 2,952 138 (2,079)
Balance at December 2005 1,191 138 (1,910)
Loss attributable to equity
shareholders (1,074)
Dividends (164)
Net loss on cash flow hedges
removed
from equity and reported in
income
Net loss on cash flow hedges
Deferred taxation on cash
flow hedges
Gain on available for sale
financial
assets
Translation (554)
Balance at March 2006 (47) 138 (2,464)
US Dollar million
Balance at December 2004 286 24 (317)
Profit attributable to equity
shareholders 22
Dividends (80)
Net loss on cash flow hedges
removed
from equity and reported in
income
Net loss on cash flow hedges
Deferred taxation on cash
flow hedges
Loss on available for sale
financial
assets
Translation (2) 230
Balance at March 2005
(restated) 228 22 (87)
Balance at December 2005 (46) 22 (67)
Loss attributable to equity
shareholders (185)
Dividends (26)
Net loss on cash flow hedges
removed
from equity and reported in
income
Net loss on cash flow hedges
Deferred taxation on cash
flow hedges
Gain on available for sale
financial
assets
Translation (82)
Balance at March 2006 (257) 22 (149)
Other
Actuarial Comprehen-
gains sive
(losses) income Total
SA Rand million
Balance at December 2004 (122) (1,040) (1,197)
Actuarial gains and losses
recognised (2) (2)
Profit attributable to equity
shareholders 50
Dividends (477)
Net loss on cash flow hedges
removed
from equity and reported in
income 96 96
Net loss on cash flow hedges (57) (57)
Deferred taxation on cash flow
hedges 49 49
Loss on available for sale
financial
assets (16) (16)
Translation (112) 1,361
Balance at March 2005 (restated) (124) (1,080) (193)
Balance at December 2005 (227) (1,655) (2,463)
Loss attributable to equity
shareholders (1,074)
Dividends (164)
Net loss on cash flow hedges
removed
from equity and reported in
income 191 191
Net loss on cash flow hedges (738) (738)
Deferred taxation on cash flow
hedges 151 151
Gain on available for sale
financial
assets 15 15
Translation 36 (518)
Balance at March 2006 (227) (2,000) (4,600)
US Dollar million
Balance at December 2004 (22) (184) (213)
Profit attributable to equity
shareholders 22
Dividends (80)
Net loss on cash flow hedges
removed
from equity and reported in
income 15 15
Net loss on cash flow hedges (9) (9)
Deferred taxation on cash flow
hedges 7 7
Loss on available for sale
financial
assets (3) (3)
Translation 2 - 230
Balance at March 2005 (restated) (20) (174) (31)
Balance at December 2005 (36) (261) (388)
Loss attributable to equity
shareholders (185)
Dividends (26)
Net loss on cash flow hedges
removed
from equity and reported in
income 31 31
Net loss on cash flow hedges (120) (120)
Deferred taxation on cash flow
hedges 26 26
Gain on available for sale
financial
assets 3 3
Translation (1) (3) (86)
Balance at March 2006 (37) (324) (745)
Rounding of figures may result in computational discrepancies.
14. Minority interests
As at As at As at
Mar Dec Mar
2006 2005 2005
Unaudited Audited Unaudited
SA Rand million
Balance at beginning of year 374 327 327
Attributable profit 40 146 26
Dividends paid (18) (125) (12)
Net loss on cash flow hedges
removed from equity and
reported in income 2 4 1
Net loss on cash flow hedges (7) (9) -
Translation (7) 31 25
Balance at end of period 384 374 367
As at As at As at
Mar Dec Mar
2006 2005 2005
Unaudited Audited Unaudited
US Dollar million
Balance at beginning of year 59 58 58
Attributable profit 6 23 4
Dividends paid (3) (20) (2)
Net loss on cash flow hedges
removed from equity and
reported in income - 1 -
Net loss on cash flow hedges (1) (2) -
Translation 1 (1) (1)
Balance at end of period 62 59 59
15. Exchange rates
Mar Dec Mar
2006 2005 2005
Unaudited Audited Unaudited
Rand/US dollar average for the period 6.15 6.37 6.01
Rand/US dollar average for the quarter 6.15 6.53 6.01
Rand/US dollar closing 6.17 6.35 6.22
Rand/Australian dollar average for the
period 4.55 4.85 4.67
Rand/Australian dollar average for the
quarter 4.55 4.86 4.67
Rand/Australian dollar closing 4.39 4.65 4.81
16. Contingent liabilities
AngloGold Ashanti"s contingent liabilities at 31 March 2006, are
detailed below:
Water pumping cost - South Africa - The South African Department of Water
Affairs and Forestry issued a directive on 1 November 2005 ordering the
four mining groups, Simmer and Jack Investments (Proprietary) Limited,
Simmer and Jack Mines Limited (collectively known as Simmers who have
purchased Buffelsfontein shafts from DRDGold Limited), Harmony Gold
Mining Company Limited, AngloGold Ashanti and Stilfontein Gold Mining
Company to share equally, the costs of pumping water at Stilfontein"s
Margaret Shaft. This follows an interdict application made by AngloGold
Ashanti in response to DRDGold"s threat to cease funding the pumping of
water at the Margaret and Buffelsfontein shafts, after placing
Buffelsfontein, its subsidiary that operated the North West operations,
into liquidation on 22 March 2005. Simmers have purchased the
Buffelsfontein shafts from DRDGold and have assumed the water management
liabilities associated with the Buffelsfontein shafts.
The directive also orders the mining companies to submit an agreement and
a joint proposal towards the long- term sustainable management of water
arising from the mining activities in the area. AngloGold Ashanti
believes that it is not liable to fund these pumping costs but cannot
provide any assurances regarding the ultimate result until the matter has
been settled.
Groundwater pollution - South Africa - AngloGold Ashanti has identified a
number of groundwater pollution sites at its current operations in South
Africa, and has investigated a number of different technologies and
methodologies that could possibly be used to remediate the pollution
plumes. The viability of the suggested remediation techniques in the
local geological formation in South Africa is however unknown. No sites
have been remediated and present research and development work is focused
on several pilot projects to find a solution that will in fact yield
satisfactory results in South African conditions. Subject to the
technology being developed as a remediation technique, no reliable
estimate can be made for the obligation.
Rounding of figures may result in computational discrepancies
Retrenchment costs - South Africa - Following the decision to discontinue
operations at Ergo in 2005, employees surplus to requirements have been
terminated and retrenchment packages settled. Ergo continues to retain
various staff members to complete the discontinuance and the attendant
environmental obligations which are expected to be completed by 2012. The
retained employees may resign, be transferred within the Group, attain
retirement age or be retrenched as their current position is made
redundant. AngloGold Ashanti is currently unable to determine the effect,
if any, of any potential retrenchment costs.
Re-export arrangements of artifacts - South Africa - AngloGold Ashanti
has undertaken to re-export certain gold artifacts, temporarily imported
into South Africa, for which custom and value added tax was waived to the
amount of $5m.
Provision of surety - South Africa - AngloGold Ashanti has provided
sureties in favour of a lender on a Gold loan facility with its affiliate
Oro Africa (Pty) Ltd and one of its subsidiaries to a maximum value of
R100m ($16m). The suretyship agreements have a termination notice period
of 90 days.
Sales tax on gold deliveries - Brazil - MineracAo Serra Grande S.A., the
operator of the Crixas mine in Brazil, has received assessments from the
State of Goias Tax Inspection related to payments of sales taxes on gold
deliveries for export. The Serra Grande Joint Venture is co-owned with
Kinross Gold Corporation. The company manages the operation and its
attributable share of the assessment is approximately $29 million. The
company believes the assessments are in violation of Federal legislation
on sales taxes and that there is a remote chance of success for the State
of Goias. The assessment has been appealed.
Litigation with mining contractor and non-payment of receivable - Ghana
A group of employees of Mining and Building Contractors (MBC), the
Obuasi underground developer, are claiming to be employees of the
group. If successful, there is a risk of some employees claiming
rights to share options;
Bayswater Construction and Mining Limited (BCM) have instituted
court proceedings against the Bibiani mine (AGBL), claiming $5m
pertaining to a contractual dispute. This matter is currently
stayed on technical grounds to the effect that the litigation
cannot commence until arbitration has been concluded. A provision
of $2m has been made;
BCM has instituted a claim against the Bibiani mine relating to a
wall slip to which BCM considered that they had an exclusive right
under their contract to repair. AGBL awarded the repair to a third
party. The potential liability amounts to $1m.
Capital cost of water pipelines and electricity supply - Namibia - A
potential liability of $1m exists at Navachab in Namibia to pay the
outstanding capital cost of the water pipeline and electricity supply in
the event of mine closure prior to 2019.
17. Concentration of risk
There is a concentration of risk in respect of reimbursable value added
tax and fuel duties from the Malian government:
- Reimbursable value added tax due from the Malian government, for the
company amount to an attributable $27m at 31 March 2006 (31 December
2005: attributable $25m). The last audited value added tax return was
for the period ended 30 June 2005 and at that date an attributable
$12m was still outstanding and an attributable $6m is still subject to
audit. The accounting processes for the unaudited amount are in
accordance with the processes advised by the Malian government in
terms of the previous audits.
- Reimbursable fuel duties from the Malian government, for the company
amount to an attributable $14m at 31 March 2006 (31 December 2005:
attributable $13m). Fuel duties are required to be submitted before
31 January of the following year and are subject to authorisation by
firstly the Department of Mining and secondly the Custom and Excise
authorities. The Customs and Excise authorities have approved an
attributable $7m which is still outstanding, whilst an attributable
$6m is still subject to authorisation. The accounting processes for
the unauthorised amount are in accordance with the processes advised
by the Malian government in terms of the previous authorisations.
The government of Mali is a shareholder in all the Malian entities and
has promised to provide a repayment plan for the amounts due.
Rounding of figures may result in computational discrepancies
18. Attributable interest
Although AngloGold Ashanti holds a 66.7% interest in Cripple Creek &
Victor Gold Mining Company Limited, it is currently entitled to receive
100% of the cash flows from the operation until the loan, extended to the
joint venture by AngloGold Ashanti USA Inc., is repaid.
19. Borrowings
AngloGold Ashanti"s borrowings are interest bearing.
20. Announcements
On 10 February 2006, AngloGold Ashanti announced the appointment of
Reginald Bannerman to the board of directors.
On 27 February 2006, AngloGold Ashanti announced that it had signed an
agreement with Dynasty Gold Corporation, a Vancouver-based exploration
company with projects in China, to acquire an effective 8.7% stake in the
company through a $2m private placement in shares and warrants. The
investment will be used to fund further exploration of the Red Valley and
Wild Horse projects, both located in the prospective Quilian metallogenic
belt.
On 15 March 2006, AngloGold Ashanti announced that it had posted to its
shareholders, the company"s annual report for the year ended 31 December
2005 and notice of the annual general meeting.
On 24 March 2006, AngloGold Ashanti posted to its shareholders, a
circular detailing ordinary resolutions to be voted on at a general
meeting, together with notice of such meeting. The general meeting which
was held on 10 April 2006, at which the ordinary resolutions were passed
with the requisite majority, provides authority to the directors to allot
sufficient ordinary shares of the company to allow it to raise $500m
before expenses but after underwriters" fees in a private offering. On 10
April 2006, AngloGold Ashanti announced that its offering of 9,970,732
ordinary shares had been priced at $51.25 per ADS and R315.19 per
ordinary share.
21. Dividend
Final dividend No. 99 of 62 South African cents or 5.7949 UK pence or
920.018 cedis per share was paid to registered shareholders on 10 March
2006, while a dividend of 2.74784 Australian cents per CHESS Depositary
Interest (CDI) was paid on the same day. On 13 March 2006, a dividend of
9.20018 cedis per Ghanaian Depositary Share (GhDS) was paid to holders
thereof. Each CDI represents one-fifth of an ordinary share, and 100
GhDSs represents one ordinary share. A dividend was paid to holders of
American Depositary Receipts (ADRs) on 20 March 2006 at a rate of 9.865
US cents per American Depositary Share (ADS). Each ADS represents one
ordinary share.
22. Detailed report
This report contains a summary of the results of AngloGold Ashanti"s
operations. A detailed report appears on the Internet and is obtainable
in printed format from the investor relations contacts, whose details,
along with the website address, appear at the end of this report.
By order of the Board
R P EDEY R M GODSELL
Chairman Chief Executive Officer
4 May 2006
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): AADA
Euronext Paris: VA
Euronext Brussels: ANG
JSE Sponsor: UBS
Auditors: Ernst & Young
Contacts
South Africa
Charles Carter
Telephone: +27 11 637 6385
Fax: +27 11 637 6400
E-mail: cecarter@AngloGoldAshanti.com
Michael Clements
Telephone: +27 11 637 6647
Fax: +27 11 637 6400
E-mail:
mclements@AngloGoldAshanti.com
United States of America
Andrea Maxey
Telephone: (800) 417 9255 (toll free in
USA and Canada) or +1 212 750 7999
Fax: +1 212 750 5626
E-mail: amaxey@AngloGoldAshanti.com
General E-mail enquiries
investors@AngloGoldAshanti.com
AngloGold Ashanti website
http://www.AngloGoldAshanti.com
Directors
Executive
R M Godsell (Chief Executive Officer)
R Carvalho Silva !
N F Nicolau
S Venkatakrishnan *
K H Williams
Non-Executive
R P Edey * (Chairman)
Dr T J Motlatsi (Deputy Chairman)
F B Arisman #
Mrs E le R Bradley
R E Bannerman
C B Brayshaw
Dr S E Jonah KBE
R Medori
(Alternate: P G Whitcutt)
W A Nairn (Alternate: A H Calver *)
S R Thompson *
A J Trahar
P L Zim (Alternate: D D Barber)
* British # American Ghanaian
French ! Brazilian
Offices
Registered and Corporate
Managing Secretary: Ms Y Z Simelane
Company Secretary: C R Bull
11 Diagonal Street
Johannesburg 2001
(PO Box 62117, Marshalltown 2107)
South Africa
Telephone: +27 11 637 6000
Fax: +27 11 637 6624
Australia
Level 13, St Martins Tower
44 St George"s Terrace
Perth, WA 6000
(PO Box Z5046, Perth WA 6831)
Australia
Telephone: +61 8 9425 4602
Fax: +61 8 9425 4662
Ghana
Gold House
Patrice Lumumba Road
(P O Box 2665)
Accra
Ghana
Telephone: +233 21 772190
Fax: +233 21 778155
United Kingdom Secretaries
St James"s Corporate Services Limited
6 St James"s Place
London SW1A 1NP
England
Telephone: +44 20 7499 3916
Fax: +44 20 7491 1989
Share Registrars
South Africa
Computershare Investor Services 2004
(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 5222
web.queries@computershare.co.za
United Kingdom
Computershare Investor Services PLC
P O Box 82
The Pavilions
Bridgwater Road
Bristol BS99 7NH
England
Telephone: +44 870 702 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 7010 (in Australia)
Fax: +61 8 9323 2033
Ghana
NTHC Limited
Martco House
Off Kwame Nkrumah Avenue
POBox K1A 9563 Airport
Accra
Ghana
Telephone: +233 21 238492-3
Fax: +233 21 229975
ADR Depositary
The Bank of New York ("BoNY")
Investor Services, P O Box 11258
Church Street Station
New York, NY 10286-1258
United States of America
Telephone: +1 888 269 2377 (Toll free
in USA) or +9 610 382 7836 outside
USA)
E-mail: shareowners@bankofny.com
Website: http://www.stockbny.com
SM
Global BuyDIRECT
BoNY maintains a direct share purchase
and dividend reinvestment plan for
ANGLOGOLD ASHANTI.
Telephone: +1-888-BNY-ADRS
Certain statements contained in this document, including, without limitation,
those concerning the economic outlook for the gold mining industry,
expectations regarding gold prices and production, the completion and
commencement of commercial operations of certain of AngloGold Ashanti"s
exploration and production projects, and its liquidity and capital resources
and expenditure, contain certain forward-looking statements regarding AngloGold
Ashanti"s operations, economic performance and financial condition. Although
AngloGold Ashanti believes that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be given that such
expectations will prove to have been correct. Accordingly, results could differ
materially from those set out in the forward-looking statements as a result of,
among other factors, changes in economic and market conditions, success of
business and operating initiatives, changes in the regulatory environment and
other government actions, fluctuations in gold prices and exchange rates, and
business and operational risk management. AngloGold Ashanti undertakes no
obligation to update publicly or release any revisions to these forward-looking
statements to reflect events or circumstances after the date of the annual
report on Form 20-F 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. For a discussion on such risk factors, refer to AngloGold
Ashanti"s annual report on Form 20-F for the year ended 31 December 2005 dated
17 March 2006, which was filed with the Securities and Exchange Commission
(SEC) on 20 March 2006.
Date: 05/05/2006 08:04:09 AM Produced by the JSE SENS Department
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