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ANG
ANANO
AngloGold Ashanti - Report to shareholders for the quarter and six months ended
30 June 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): AAD
Euronext Paris: VA
Euronext Brussels: ANG
Report to shareholders
for the quarter and six months ended 30 June 2006
Group results for the quarter
* Gold production up 6% to 1.415Moz, primarily due to strong performances
from South African, Malian, South American and Australian operations
* Price received 10% higher to $600/oz
* Total cash costs down 1% to $305/oz
* Adjusted headline earnings up 63% to $140m
* Interim dividend of 210 South African cents (29.89 US cents)/share declared
* Net debt level reduced from $1.66bn to $1.03bn
Quarter Six months
ended ended ended ended
Jun Mar Jun Jun
2006 2006 2006 2005
SA rand / Metric
Operating review
Gold
Produced
- kg / oz (000) 44,024 41,667 85,691 97,600
Price received 1
- R/kg / $/oz 125,409 107,903 116,683 84,739
Total cash costs
- R/kg / $/oz 63,276 60,815 62,079 56,064
Total production costs
- R/kg / $/oz 85,168 82,079 83,666 72,683
Financial review
Gross (loss) profit
- R / $ million (594) (318) (912) 1,186
Gross profit adjusted
for the effect of
unrealised non-
hedge derivatives
- R / $ million 1,988 1,248 3,237 1,441
(Loss) profit
attributable to
equity shareholders
- R / $ million (1,047) (1,074) (2,121) 616
Headline (loss)
earnings 2
- R / $ million (1,086) (1,067) (2,154) 765
Headline earnings
before unrealised
on-hedge derivatives,
fair value gain (loss)
on convertible bond
and interest
rate swaps
- R / $ million 911 530 1,442 877
Capital expenditure
- R / $ million 1,168 961 2,130 1,932
(Loss) earnings per
ordinary share
- cents/share
Basic (383) (405) (788) 233
Diluted (383) (405) (788) 232
Headline 2 (398) (403) (801) 289
Headline earnings
before unrealised
non-hedge derivatives,
fair value gain (loss)
on convertible bond
and interest
rate swaps
- cents/share 334 200 536 332
Dividends
- cents/share 210 170
Quarter Six months
ended ended ended ended
Jun Mar Jun Jun
2006 2006 2006 2005
US dollar / Imperial
Operating review
Gold
Produced
- kg / oz (000) 1,415 1,340 2,755 3,138
Price received 1
- R/kg / $/oz 600 545 573 423
Total cash costs
- R/kg / $/oz 305 308 306 281
Total production costs
- R/kg / $/oz 410 416 413 364
Financial review
Gross (loss) profit
- R / $ million 25 (61) (37) 211
Gross profit adjusted
for the effect of
unrealised non-
hedge derivatives 2
- R / $ million 305 202 507 230
(Loss) profit
attributable to
equity shareholders
- R / $ million (54) (185) (240) 118
Headline (loss)
earnings 3
- R / $ million (60) (184) (244) 143
Headline earnings
before unrealised
on-hedge derivatives,
fair value gain (loss)
on convertible bond
and interest
rate swaps 4
- R / $ million 140 86 226 138
Capital expenditure
- R / $ million 181 156 337 311
(Loss) earnings per
ordinary share
- cents/share
Basic (20) (70) (89) 45
Diluted (20) (70) (89) 45
Headline 3 (22) (69) (91) 54
Headline earnings
before unrealised
non-hedge derivatives
fair value gain (loss)
on convertible bond
and interest
rate swaps 4
- cents/share 51 32 84 52
Dividends
- cents/share 30 26
Notes: 1. Price received includes realised non-hedge derivatives.
2. Refer to note 8 of "Notes" for the definition.
$ represents US dollar, unless otherwise stated.
Rounding of figures may result in computational discrepancies.
Operations at a glance
for the quarter ended 30 June 2006
Price received 1 Production
% %
$/oz Variance 4 oz (000) Variance 4
Mponeng 651 12 156 14
Great Noligwa 655 14 153 (5)
Sunrise Dam 651 9 113 24
TauTona 653 14 120 9
Kopanang 654 14 114 10
AngloGold Ashanti Mineracao 621 36 57 16
Cerro Vanguardia 5 515 13 64 23
Morila 5 632 13 54 -
Sadiola 5 628 14 52 24
Yatela 5 629 13 40 21
Geita 645 16 71 (15)
Cripple Creek & Victor 288 (22) 65 2
Siguiri 5 519 (2) 59 4
Serra Grande 5 499 10 24 -
Tau Lekoa 653 14 41 (11)
Navachab 638 15 22 -
Obuasi 480 (10) 97 (2)
Savuka 647 13 21 -
Iduapriem 5 500 (6) 41 (5)
Bibiani 631 14 9 (40)
Moab Khotsong 655 12 11 22
Other 31 48
AngloGold Ashanti 600 10 1,415 6
Total cash costs Cash gross profit 2
% %
$/oz Variance 4 $m Variance 4
Mponeng 229 (12) 65 44
Great Noligwa 277 5 56 14
Sunrise Dam 273 (3) 46 64
TauTona 267 (9) 45 45
Kopanang 295 (9) 40 54
AngloGold Ashanti MineracAo 190 1 24 71
Cerro Vanguardia 5 188 1 24 60
Morila 5 249 (5) 19 19
Sadiola 5 255 (6) 18 80
Yatela 5 232 5 15 25
Geita 507 38 10 -
Cripple Creek & Victor 242 (2) 10 -
Siguiri 5 403 6 9 (18)
Serra Grande 5 206 10 8 33
Tau Lekoa 447 (14) 8 700
Navachab 279 23 8 14
Obuasi 406 16 7 (61)
Savuka 359 (1) 6 50
Iduapriem 5 408 13 5 (29)
Bibiani 412 47 2 (50)
Moab Khotsong 666 (21) - 100
Other 27 35
AngloGold Ashanti 305 (1) 452 32
Gross profit (loss)
adjusted for the
effect of
unrealised non-
hedge derivatives 3
%
$m Variance 4
Mponeng 50 56
Great Noligwa 45 25
Sunrise Dam 37 68
TauTona 32 78
Kopanang 34 79
AngloGold Ashanti Mineracao 21 91
Cerro Vanguardia 5 18 125
Morila 5 15 36
Sadiola 5 14 56
Yatela 5 12 20
Geita 3 50
Cripple Creek & Victor (5) (350)
Siguiri 5 2 (50)
Serra Grande 5 6 20
Tau Lekoa 2 140
Navachab 6 20
Obuasi (9) (1,000)
Savuka 5 25
Iduapriem 5 - (100)
Bibiani 1 (50)
Moab Khotsong (5) 29
Other 21 75
AngloGold Ashanti 305 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 Non-GAAP disclosure.
4 Variance June 2006 quarter on March 2006 quarter - increase (decrease).
5 Attributable.
Rounding of figures may result in computational discrepancies.
Financial and operating review
OVERVIEW FOR THE QUARTER
The quarter produced a modest improvement in lost- time injury rates (6.6
compared to 6.8) and a more significant improvement in fatal accidents (5
compared to 11), with fatality rates reducing from 0.28 to 0.12.
Three operations were lost-time accident free, namely Cripple Creek & Victor,
Bibiani and Yatela. A further seven operations recorded a single lost-time
injury during the quarter.
Improved production, higher received prices and lower costs resulted in an
improved financial performance for the June quarter, with adjusted headline
earnings up 63% to $140m. The price received, at $600/oz, was 10% higher than
that of the previous quarter. Operational performance was also solid, as
particularly strong results from the South Africa region and several of the
international assets resulted in a 6% improvement in production to 1.415Moz and
slightly lower total cash costs, at $305/oz.
Four of the seven South African operations posted higher production and lower
total cash costs, with production for the region 6% higher quarter-on-quarter
and total cash costs 4% better at R59,200/kg. Kopanang, Mponeng and TauTona
reported particularly strong results, with production increases of 11%, 14% and
9% and total cash cost improvements of 5%, 8% and 5%, respectively. At Great
Noligwa, lower volumes resulted in a 5% production decline as well as a 10%
increase in total cash costs.
In respect of the other African assets, the Malian operations had a strong
quarter, with production 24% higher at Sadiola, 21% higher at Yatela and steady
at Morila. Production at Siguiri in Guinea also improved by 4%, while all three
of the Ghanaian assets reported both lower production and higher cash costs.
As previously forecast, Geita, in Tanzania, continued to suffer the effects of
the first quarter"s adverse weather conditions and the related delay in the
Nyankanga pit push-back. Production consequently declined 15% and total cash
costs increased 38%. In addition, the recent application of a more appropriate
grade evaluation model has resulted in a lower in situ grade and an increase in
ore tonnage. This has reduced the feed grade to the plant and in turn, gold
output, as the plant is currently running at full capacity. In light of these
issues, the 2006 production outlook for Geita has been revised to approximately
350,000oz, with the potential to double this in 2007, as the pit push-back is
completed and higher grades are accessed. Importantly, this near-term revising
down of production at Geita does not impact the view of the significant
long-term potential of this orebody.
Turning to the international assets, Sunrise Dam, in Australia, reported
excellent operating results, with production up 24% due to higher grades.
Total cash costs were consequently 4% lower quarter-on-quarter.
In South America, both Cerro Vanguardia in Argentina and AngloGold Ashanti
Mineracao in Brazil reported solid results, with production 23% and 16% higher,
respectively, with total cash costs stable.
At Cripple Creek & Victor, in the United States, both production and total cash
costs improved 2% due to an increase in recoverable ounces placed on the heap
leach pad. Notwithstanding this improvement, however, the 2006 production
outlook for Cripple Creek & Victor has been reduced to approximately 300,000oz.
This revision is due to the effect of the quarter"s reduced rainfall on the
irrigation of the heap leach, after higher volumes were placed on the pad to
mitigate the effect of the lower grades mined from the bottom of the Altman pit
late last year and into the first quarter of 2006. The release of the lock-up
on the leach pad is expected to improve the production outlook in 2007.
A dividend of 210 South African cents (29.89 US cents) per share has been
declared for the six months ended 30 June 2006.
Looking ahead, production for the third quarter is estimated to be around
1.4Moz at an average total cash cost of $306/oz, assuming the following
exchange rates: R7.00/$, A$/$0.75, BRL2.18/$ and Argentinean peso 3.07/$.
Capital expenditure is estimated at $273m and will be managed in line with
profitability and cash flow.
In light of the company"s year-to-date performance and the downward revision of
the annual forecast ounces for Geita and Cripple Creek & Victor, the group
production outlook for the year currently stands at around 5.7Moz. The total
cash costs for the year are estimated at $301/oz. Capital expenditure is
forecast at $851m based on the following exchange rates: R6.65/$, A$/$0.75,
BRL2.20/$ and Argentinean peso 3.09/$.
The proceeds of the recently completed equity raising and improved cash
generation have enabled the company to reduce its net debt level from $1.66bn
to $1.03bn during the quarter. The annual rolling net debt to EBITDA ratio
improved from 2.27 times at the end of 2005 to 1.1 times as at 30 June 2006.
Exploration
Total exploration expenditure amounted to $27m ($18m expensed, $9m capitalised)
during the second quarter, compared to $18m ($12m expensed, $6m capitalised) in
the first quarter of 2006.
BROWNFIELDS EXPLORATION
At Siguiri, in Guinea, infill and extension drilling continued at the Kintinian
prospect. A ground gravity programme is in progress to define additional drill
targets to the south of the existing pits.
At Geita, in Tanzania, drilling confirmed the connection between the south and
central orebodies of Lone Cone. Drilling indicated the potential for a second
mineralised zone in Nyankanga South and drilling at Area 3 West (located
approximately 1km south-east of the Matandani pit) showed encouraging results.
In the regional drill programme on the Morila grant in Mali, 50 holes (26,146m)
have been completed. Drilling continues to the south of the main pit in the
Tonalite extension area, and results indicate a wide, low-grade mineralised
zone. Also in Mali, at Sadiola, drilling in the gap between FE3 and FE4
indicated open-ended mineralisation to the north and east. These intersections
will be followed up with further drilling.
Surface drilling continued at Obuasi, in Ghana, with UDSDD 2 reaching a depth
of 876m and USDD 3 reaching 1,500m. Reef intersections are expected in the
first quarter of 2007.
In South America, good progress has been made converting Inferred Resources to
Indicated Resources, which can be used for mine planning. Noteworthy additions
have been made at CuiabA and Serra Grande in Brazil, and Cerro Vanguardia in
Argentina.
At Cripple Creek & Victor in the United States, drill programme efforts
primarily focused on Resource expansion. Results from ongoing, step-out
drilling are being modelled to determine the impact of new drilling results and
updated cost assumptions on expanding the orebody. Infill and step-out
development drilling in the South Cresson Deposit continued.
GREENFIELDS EXPLORATION
Greenfields exploration activities continued during the second quarter in
Alaska, Australia, China, Colombia, Laos, the Philippines, Russia and the DRC.
A Letter of Intent was signed with International Tower Hill Mines Ltd on 15
June for the sale and option of all of AngloGold Ashanti"s Alaskan mineral
exploration properties and associated databases. Final Toronto Stock Exchange
approval for the transaction is expected early in the third quarter.
In Australia, drilling continued at the Tropicana joint venture on both the
original Tropicana zone and the newly-discovered Havana zone.
Significant new intercepts obtained from infill drilling at the Tropicana zone
included 29m at 4.4g/t from 219m in TPRC021D, 34m at 4.0g/t from 42m in TPD013
(TPRC031 twin), 13m at 5.0g/t from 71m in TPD024, and 25m at 2.0g/t from 160m
in TPRC079D. Gold mineralisation at the Tropicana zone has now been confirmed
to extend 1,400m along strike, with current drilling testing the down-dip
extent of mineralisation. Initial drilling on the new Havana zone, located
1.1km south of the Tropicana zone, has also returned encouraging results.
Regional exploration programmes continued at an accelerated pace in Colombia
during the second quarter. First-pass drill programmes were completed on two
projects; where highly encouraging results were obtained and follow-up drilling
is envisaged. Regional exploration joint ventures were also signed with both
Bema Gold Corporation and Antofagasta PLC, on 1 June and 14 July, respectively.
In the DRC, a second diamond drill rig commenced operation and allowed for
further drill testing of the priority Adidi/D7 Kanga and Nzebi/Senzere
corridors. Significant new intercepts included 14m at 6.40g/t from 57m in
DD051. Resource delineation drilling will continue in the DRC during both the
third and fourth quarters of 2006.
In China, generative exploration activities continued and select business
development opportunities were reviewed. A 5,000m diamond drill programme
commenced at Dynasty Gold"s Red Valley project in the Qinghai Province.
In the Philippines, exploration activities continued 20km north of the Siana
Gold Project. The project area contains potential for both epithermal and
porphyry style gold and copper mineralisation.
In Laos, regional exploration under the joint venture with Oxiana Limited was
undertaken in five main areas. Widespread stream sediment gold anomalies were
identified in one target area with encouraging geology and alteration
identified in another. Additional new targets have also been delineated for
follow-up.
In Russia, generative exploration activities remain underway in the Far East
and AngloGold Ashanti continued to provide technical assistance to Trans-
Siberian Gold"s Asacha and Veduga Projects.
Review of the gold market
The second quarter of 2006 was characterised by a break in the unabated rise of
the gold price since late 2005. At its peak the price reached $730/oz in
mid-May and then retraced to $543/oz.
This movement represents the highest spot price and the largest move within a
single quarter in the last twenty five years. The gold price subsequently
recovered to trade above $600/oz towards the end of the quarter, having rallied
strongly through the 200-day moving average (US$547/oz) to regain its upward
momentum.
The average price for the quarter of $629/oz represents a $75/oz increase over
the first quarter. As the dollar gold price declined in the second half of the
quarter, the rand weakened against the dollar, thus mitigating the impact on
the rand gold price. This has resulted in an average rand gold price of
R130,053/kg for the period under review, which represents a 19% or R20,000/kg
increase over the previous quarter.
PHYSICAL MARKET
As with the first quarter of 2006, the sharp price moves in the gold market
experienced during the second quarter, has seen some weakness in key consumer
markets such as Turkey and India, together with a shift by manufacturers to
lower gold content in manufactured products.
In addition, gold manufacturers have been adversely affected by higher price
levels and particularly greater price volatility, as banks make margin calls to
cover the higher value of gold inventory loans. Manufacturers therefore have
typically had to increase their loan collateral, or to repay loans, by cutting
production or liquidating stock.
Higher metal prices have also been accompanied by an influx of gold scrap into
refineries, with the new secondary refineries in Dubai being the major
beneficiaries.
While participants in the jewellery wholesale, manufacturing and retail trade
are adopting various strategies to deal with gold"s price appreciation and
volatility, those who analyse demand indicators in key markets are cautious
regarding potential further softening in the gold jewellery market through the
next six months.
INVESTMENT MARKET
In contrast to a slightly weaker jewellery market, the investment market for
gold has remained strong, notwithstanding a general pull-back in commodities
and precious metals investing in mid-May.
Gold Exchange Traded Funds (ETFs) again grew by some 45t during the second
quarter, with the increase year-to-date some 149t. Despite the sharp fall in
the gold price during the quarter, gold ETFs only reduced modestly and
recovered quickly to pre-sell off levels.
Central Bank selling appears to have been low since January, 2006. Sales have
amounted to be between 30t - 35t for the second quarter.
Reported sales for the current year of the Washington Agreement are between
315t to 320t, which means that signatories to the agreement may sell up to a
further 180t before the year-end of 26 September if they are to utilise, in
full, the agreed quota for 2006.
More generally, commodity prices continue to be supported, in part, by investor
demand. Investment in indexed commodity funds continues to grow and is
estimated to be as much as $90 billion currently, much of it coming from long-
only funds such as pension funds that are allocating a portion of funds under
management to commodities. The expectation amongst market commentators is for
this trend to continue, with the potential for significant further investment
flows into the sector.
CURRENCIES
During the quarter, the US dollar continued to trade in a range of $1.20 to
$1.30 against the euro despite continued concerns over the trade and current
account deficits in that country. Of significance during the quarter were the
comments and testimony made by the US FED Chairman Dr Ben S Bernanke, including
raising US interest rates by 25 basis points for the 17th consecutive time and
signalling to the market that the cycle of interest rate increases may not yet
be complete.
The remarks were influential in causing investors to withdraw funds from a
number of markets, particularly the more liquid emerging markets where there
was a realisation that the risk premium being offered in these markets may not
be sufficient to merit the investment. Coupled with local interest rate
changes, this had the effect of causing, amongst other currencies, the South
African rand, the Brazilian real and the Australian dollar to trade some 10%
lower.
Since then the real has recovered to trade at BRL2.2/$ from its lows of
BRL2.4/$ and the Australian dollar has strengthened to $0.755/A$ from its lows
of $0.72/A$. In the case of the rand, the release in June of a large current
account deficit for the first quarter of 2006 saw the rand weaken further to
lows of R7.40/$ despite the South African Monetary Policy Committee raising
interest rates by 50 basis points. It is unlikely that the rand will recover
much of its recent weakness unless the dollar itself weakens, hence going
forward South African producers should continue receiving the high rand gold
prices that they have been receiving of late.
HEDGING
As at 30 June 2006, the net delta hedge position of AngloGold Ashanti was
10.14Moz or 315t, valued at the spot gold price at the quarter end of $620/oz.
This net delta position reflects a decrease of some 1.1Moz or 34t. This
decrease was due to maturing positions and hedge reducing strategies that
resulted in the hedge reducing by some 1.37Moz, offset by an increase in delta
due to the quarter end gold price of $620/oz which was $38/oz higher that the
first quarter"s closing gold price of $582/oz.
The marked-to-market value of the hedge position as at 30 June 2006 was
negative $3.17bn. The increase in the marked-to-market value was mostly due to
the $38/oz increase in the gold price over the previous quarter, combined with
the effects of higher US interest rates and gold volatilities. Had the spot
price of gold at the end of June remained unchanged from the price of $582/oz
at the end of the previous quarter, the hedge would have reduced in size to
9.86Moz or 307t, with a marked-to-market value of negative $2.8bn.
The price received by the company for the quarter was $600/oz, compared to a
spot price for the period of $629/oz. The company continues to manage its hedge
position actively, and to reduce overall levels of pricing commitments in
respect of future gold production.
Hedge position
As at 30 June 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 10.14Moz or 315t (at 31 March 2006: 11.23Moz or
349t).
The marked-to-market value of all hedge transactions making up the hedge
positions was a negative $3.167bn (negative R22.45bn) as at 30 June 2006 (as at
31 March 2006: negative $2.707bn or R16.65bn). This value at 30 June 2006 was
based on a gold price of $619.80/oz, exchange rates of R7.088/$ and A$/$0.7438
and the prevailing market interest rates and volatilities at that date.
As at 26 July 2006, the marked-to-market value of the hedge book was a negative
$3.115bn (negative R21.93bn), based on a gold price of $618.95/oz and exchange
rates of R7.04/$ and A$/$0.758 and the prevailing market interest rates and
volatilities at the time.
These marked-to-market valuations are not predictive of the future value of the
hedge position, nor of future impact on the revenue of the company. The
valuation represents the cost of buying all hedge contracts at the time of
valuation, at market prices and rates available at the time.
Year 2006 2007 2008 2009
DOLLAR GOLD
Forward
contracts
Amount (kg) *29,534 25,469 30,076 26,288
US$/oz $687 $357 $365 $380
Put options
purchased
Amount (kg) 7,674 1,455
US$/oz $345 $292
Put options
sold
Amount (kg) 18,970 855 1,882
US$/oz $540 $390 $400
Call options
purchased
Amount (kg) 7,770 6,357
US$/oz $366 $344
Call options
sold
Amount (kg) 25,491 32,544 32,904 31,194
US$/oz $488 $387 $395 $418
RAND GOLD
Forward
contracts
Amount (kg) 967 2,449 933
Rand per kg R28,536 R97,520 R116,335
Put options
purchased
Amount (kg)
Rand per kg
Put options
sold
Amount (kg)
Rand per kg
Call options
purchased
Amount (kg)
Rand per kg
Call options
sold
Amount (kg) 311 2,986
Rand per kg R108,123 R202,054
A DOLLAR GOLD
Forward
contracts
Amount (kg) 12,752 6,843 2,177 3,390
A$ per oz A$819 A$629 A$663 A$655
Put options
purchased
Amount (kg)
A$ per oz
Put options
sold
Amount (kg)
A$ per oz
Call options
purchased
Amount (kg) 3,110 3,732 3,110 1,244
A$ per oz A$673 A$668 A$680 A$694
Call options
sold
Amount (kg)
A$ per oz
Delta (kg) *10,032 56,866 60,497 59,517
** Total
net gold:
Delta (oz) *322,536 1,828,282 1,945,021 1,913,513
Year 2010 2011-2015 Total
DOLLAR GOLD
Forward
contracts
Amount (kg) 16,328 37,239 105,866
US$/oz $382 $411 $292
Put options
purchased
Amount (kg) 9,129
US$/oz $336
Put options
sold
Amount (kg) 1,882 7,527 31,116
US$/oz $410 $435 $494
Call options
purchased
Amount (kg) 14,127
US$/oz $356
Call options
sold
Amount (kg) 28,054 76,068 226,255
US$/oz $429 $506 $449
RAND GOLD
Forward
contracts
Amount (kg) 4,349
Rand per kg R86,214
Put options
purchased
Amount (kg)
Rand per kg
Put options
sold
Amount (kg)
Rand per kg
Call options
purchased
Amount (kg)
Rand per kg
Call options
sold
Amount (kg) 2,986 2,986 9,269
Rand per kg R216,522 R230,990 R212,885
A DOLLAR GOLD
Forward
contracts
Amount (kg) 3,110 28,272
A$ per oz A$690 A$727
Put options
purchased
Amount (kg)
A$ per oz
Put options
sold
Amount (kg)
A$ per oz
Call options
purchased
Amount (kg) 3,110 14,306
A$ per oz A$712 A$683
Call options
sold
Amount (kg)
A$ per oz
Delta (kg) 43,753 104,732 315,333
** Total
net gold:
Delta (oz) 1,406,690 3,367,207 10,138,177
* Long position.
** The Delta of the hedge position indicated above is the equivalent gold
position that would have the same marked-to-market sensitivity for a small
change in the gold price. This is calculated using the Black-Scholes
option formula with the ruling market prices, interest rates and
volatilities as at 30 June 2006.
Rounding of figures may result in computational discrepancies.
Year 2006 2007 2008 2009
DOLLAR SILVER
Forward contracts
Amount (kg)
$ per oz
Put options purchased
Amount (kg) 21,772 43,545 43,545
$ per oz $7.11 $7.40 $7.66
Put options sold
Amount (kg) 21,772 43,545 43,545
$ per oz $6.02 $5.93 $6.19
Call options purchased
Amount (kg)
$ per oz
Call options sold
Amount (kg) 21,772 43,545 43,545
$ per oz $8.11 $8.40 $8.64
Year 2010 2011-2015 Total
DOLLAR SILVER
Forward contracts
Amount (kg)
$ per oz
Put options purchased
Amount (kg) 108,862
$ per oz $7.45
Put options sold
Amount (kg) 108,862
$ per oz $6.05
Call options purchased
Amount (kg)
$ per oz
Call options sold
Amount (kg) 108,862
$ per oz $8.44
The following table indicates the group"s currency hedge position at 30 June
2006
Year 2006 2007 2008 2009
RAND DOLLAR (000)
Forward contracts
Amount ($)
US$/R
Put options
purchased
Amount ($) 55,000
US$/R R6.68
Put options sold
Amount ($) 45,000
US$/R R6.44
Call options
purchased
Amount ($)
US$/R
Call options sold
Amount ($) 55,000
US$/R R7.05
A DOLLAR (000)
Forward contracts
Amount ($) 53,398 60,000 20,000
A$/US$ A$0.75 A$0.76 A$0.73
Put options
purchased
Amount ($) 40,000
A$/US$ A$0.73
Put options sold
Amount ($) 40,000
A$/US$ A$0.76
Call options
purchased
Amount ($)
A$/US$
Call options sold
Amount ($) 50,000
A$/US$ A$0.72
BRAZILIAN REAL (000)
Forward contracts
Amount ($) 12,000 4,000
US$/BRL BRL3.25 BRL3.31
Put options
purchased
Amount ($) 2,500
US$/BRL BRL2.30
Put options sold
Amount ($) 2,500
US$/BRL BRL2.10
Call options
purchased
Amount ($)
US$/BRL
Call options
sold
Amount ($) 12,500
US$/BRL BRL3.17
Year 2010 2011-2015 Total
RAND DOLLAR (000)
Forward contracts
Amount ($)
US$/R
Put options
purchased
Amount ($) 55,000
US$/R R6.68
Put options sold
Amount ($) 45,000
US$/R R6.44
Call options
purchased
Amount ($)
US$/R
Call options sold
Amount ($) 55,000
US$/R R7.05
A DOLLAR (000)
Forward contracts
Amount ($) 133,398
A$/US$ A$0.75
Put options
purchased
Amount ($) 40,000
A$/US$ A$0.73
Put options sold
Amount ($) 40,000
A$/US$ A$0.76
Call options
purchased
Amount ($)
A$/US$
Call options sold
Amount ($) 50,000
A$/US$ A$0.72
BRAZILIAN REAL (000)
Forward contracts
Amount ($) 16,000
US$/BRL BRL3.26
Put options
purchased
Amount ($) 2,500
US$/BRL BRL2.30
Put options sold
Amount ($) 2,500
US$/BRL BRL2.10
Call options
purchased
Amount ($)
US$/BRL
Call options
sold
Amount ($) 12,500
US$/BRL BRL3.17
Derivative analysis by accounting designation as at 30 June 2006
Cash flow
Normal sale hedge Non-hedge Total
exempted accounted accounted
US Dollars (millions)
Commodity option
contracts (580) (9) (1,116) (1,705)
Foreign exchange
option contracts - - (13) (13)
Forward sale
commodity contracts (1,204) (469) 216 (1,457)
Forward foreign
exchange contracts - 7 (2) 5
Interest rate swaps (38) - 41 3
Total hedging
contracts (1,822) (471) (874) (3,167)
Hedge restructure
debtor - - 20 20
Option component of
convertible bonds - - (102) (102)
Total derivatives (1,822) (471) (956) (3,249)
Rounding of figures may result in computational discrepancies.
Group income statement
Quarter Quarter
ended ended
June March
2006 2006
SA Rand million Notes Unaudited Unaudited
Revenue 2 4,966 4,456
Gold income 4,798 4,246
Cost of sales 3 (3,546) (3,463)
Non-hedge derivative (loss) gain (1,847) (1,100)
Gross (loss) profit (594) (318)
Corporate administration and other
expenses (140) (127)
Market development costs (24) (26)
Exploration costs (116) (73)
Other net operating expenses 4 (39) (30)
Operating special items 5 14 11
Operating (loss) profit (900) (563)
Interest receivable 59 30
Exchange (loss) gain (7) (4)
Fair value adjustment on option component
of convertible bond 158 (233)
Finance costs and unwinding of
decommissioning
and restoration obligations (209) (210)
Fair value gain (loss) on interest rate
swaps - -
Share of associates" (loss) profit (1) (4)
(Loss) profit before taxation (900) (984)
Taxation 6 (86) (43)
(Loss) profit after taxation from
continuing operations (986) (1,026)
Loss for the period from discontinued
operations 7 (4) (7)
(Loss) profit for the period (989) (1,034)
Allocated as follows:
Equity shareholders of parent (1,047) (1,074)
Minority interest 58 40
(989) (1,034)
Basic (loss) earnings per ordinary share
(cents)
(Loss) profit from continuing operations a (382) (402)
Loss from discontinued operations a (1) (3)
(Loss) profit (383) (405)
Diluted (loss) earnings per ordinary
share (cents)
(Loss) profit from continuing operations b (382) (402)
Loss from discontinued operations b (1) (3)
(Loss) profit c (383) (405)
Dividends d
- Rm
- cents per share
Quarter Six months Six months
ended ended ended
June June June
2005 2006 2005
SA Rand million Unaudited Unaudited Unaudited
Revenue 4,563 9,422 8,579
Gold income 4,404 9,044 8,261
Cost of sales (3,620) (7,009) (7,036)
Non-hedge derivative (loss) gain 147 (2,947) (40)
Gross (loss) profit 931 (912) 1,186
Corporate administration and other
expenses (103) (267) (201)
Market development costs (21) (50) (42)
Exploration costs (78) (189) (138)
Other net operating expenses (34) (69) (53)
Operating special items (41) 24 (44)
Operating (loss) profit 654 (1,463) 708
Interest receivable 39 89 93
Exchange (loss) gain (4) (11) 4
Fair value adjustment on option
component of convertible bond 79 (75) 194
Finance costs and unwinding of
decommissioning
and restoration obligations (159) (419) (308)
Fair value gain (loss) on interest
rate swaps 11 - (5)
Share of associates" (loss) profit 2 (5) 3
(Loss) profit before taxation 621 (1,883) 689
Taxation 62 (128) 121
(Loss) profit after taxation from
continuing operations 683 (2,012) 690
Loss for the period from
discontinued operations (69) (11) (121)
(Loss) profit for the period 614 (2,023) 690
Allocated as follows:
Equity shareholders of parent 566 (2,121) 616
Minority interest 48 98 74
614 (2,023) 690
Basic (loss) earnings per ordinary
share (cents)
(Loss) profit from continuing
operations a 240 (784) 278
Loss from discontinued operations a (26) (4) (46)
(Loss) profit 214 (788) 233
Diluted (loss) earnings per
ordinary share (cents)
(Loss) profit from continuing
operations b 240 (784) 278
Loss from discontinued operations b (26) (4) (46)
(Loss) profit c 214 (788) 232
Dividends d
- Rm 578 450
- cents per share 210 170
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. The current
period is only indicative.
Rounding of figures may result in computational discrepancies.
Group income statement
Quarter Quarter
ended ended
June March
2006 2006
US Dollar million Notes Unaudited Unaudited
Revenue 2 766 724
Gold income 740 690
Cost of sales 3 (547) (563)
Non-hedge derivative (loss) gain (169) (188)
Gross profit (loss) 25 (61)
Corporate administration and other
expenses (22) (21)
Market development costs (4) (4)
Exploration costs (18) (12)
Other net operating expenses 4 (7) (4)
Operating special items 5 2 2
Operating (loss) profit (22) (101)
Interest receivable 9 5
Exchange (loss) gain (1) (1)
Fair value adjustment on option component
of convertible bond 25 (39)
Finance costs and unwinding of
decommissioning
and restoration obligations (32) (34)
Fair value gain (loss) on interest rate
swaps - -
Share of associates" (loss) profit - (1)
(Loss) profit before taxation (22) (170)
Taxation 6 (23) (7)
(Loss) profit after taxation from
continuing operations (45) (177)
Loss for the period from discontinued
operations 7 (1) (1)
(Loss) profit for the period (45) (179)
Allocated as follows:
Equity shareholders of the parent (54) (185)
Minority interest 9 6
(45) (179)
Basic (loss) earnings per ordinary share
(cents)
(Loss) profit from continuing operations a (20) (69)
Loss from discontinued operations a - (1)
(Loss) profit (20) (70)
Diluted (loss) earnings per ordinary
share (cents)
(Loss) profit from continuing operations b (20) (69)
Loss from discontinued operations b - (1)
(Loss) profit c (20) (70)
Dividends d
- $m
- cents per share
Quarter Six months Six months
ended ended ended
June June June
2005 2006 2005
US Dollar million Unaudited Unaudited Unaudited
Revenue 708 1,490 1,377
1,326
Gold income 684 1,430
(1,133)
Cost of sales (565) (1,110)
18
Non-hedge derivative (loss) gain 35 (357)
211
Gross profit (loss) 154 (37)
(32)
Corporate administration and other
expenses (16) (42)
(7)
Market development costs (3) (8)
(22)
Exploration costs (12) (30)
Other net operating expenses (5) (10) (8)
(7)
Operating special items (7) 4
135
Operating (loss) profit 111 (123)
15
Interest receivable 6 14
-
Exchange (loss) gain (1) (2)
32
Fair value adjustment on option
component of convertible bond 13 (14)
Finance costs and unwinding of
decommissioning
(50)
and restoration obligations (25) (67)
(1)
Fair value gain (loss) on interest
rate swaps 2 -
Share of associates" (loss) profit - (1) -
132
(Loss) profit before taxation 107 (192)
18
Taxation 9 (30)
150
(Loss) profit after taxation from
continuing operations 116 (222)
Loss for the period from
discontinued operations (12) (2) (21)
130
(Loss) profit for the period 103 (224)
Allocated as follows:
118
Equity shareholders of the parent 96 (240)
12
Minority interest 7 16
103 (224) 130
Basic (loss) earnings per ordinary
share (cents)
(Loss) profit from continuing
operations a 41 (88) 52
Loss from discontinued operations a (5) (1) (8)
(Loss) profit 36 (89) 45
Diluted (loss) earnings per
ordinary share (cents)
(Loss) profit from continuing
operations b 41 (88) 52
Loss from discontinued operations b (5) (1) (8)
(Loss) profit c 36 (89) 45
Dividends d
- $m 82 69
- cents per share 30 26
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. The current
period is only indicative.
Rounding of figures may result in computational discrepancies.
Group balance sheet
As at As at As at As at
June March June December
2006 2006 2005 2005
Notes Unaudited Unaudited Unaudited Audited
SA Rand million
ASSETS
Non-current
assets
Tangible assets 41,214 36,904 37,588 37,464
Intangible
assets 2,873 2,419 2,727 2,533
Investments in
associates 312 214 254 223
Other
investments 662 647 550 645
Inventories 1,673 1,272 789 1,182
Derivatives 73 171 403 243
Trade and
other
receivables 164 126 128 124
Deferred
taxation 368 321 215 279
Other
non-current
assets 95 136 128 101
47,434 42,210 42,781 42,794
Current assets
Inventories 3,181 2,475 2,619 2,436
Trade and
other
receivables 1,645 1,706 1,934 1,589
Derivatives 5,941 4,876 3,053 4,280
Current
portion of
other
non-current
assets 11 6 5 43
Cash
restricted for
use 21 21 197 52
Cash and cash
equivalents 2,450 1,419 1,644 1,328
13,250 10,503 9,452 9,728
100 100 100 100
Non-current
assets held
for sale
13,350 10,603 9,552 9,828
60,784 52,814 52,333 52,622
TOTAL ASSETS
EQUITY AND
LIABILITIES
Share capital
and premium 10 22,065 19,070 19,006 19,047
Retained
earnings and
other reserves 11 (3,057) (4,600) 1,410 (2,463)
Shareholders"
equity 19,008 14,470 20,416 16,584
Minority
interests 12 419 384 401 374
19,427 14,854 20,817 16,958
Total equity
Non-current
liabilities
Borrowings 9,375 10,798 10,500 10,825
Environmental
rehabilitation
and other
provisions 2,579 2,271 1,657 2,265
Provision for
pension and
post-retiremen
t benefits 1,263 1,252 1,072 1,249
Trade, other
payables and
deferred
income 109 80 20 87
Derivatives 3,484 2,928 2,130 2,460
Deferred
taxation 7,239 6,903 8,231 7,353
24,049 24,233 23,610 24,239
Current
liabilities
Trade, other
payables and
deferred
income 3,011 2,772 2,899 2,711
Current
portion of
borrowings 465 871 1,141 1,190
Derivatives 12,723 9,212 3,551 6,814
Taxation 1,110 872 315 710
17,309 13,727 7,906 11,425
41,357 37,960 31,516 35,664
Total
liabilities
60,784 52,814 52,333 52,622
TOTAL EQUITY
AND
LIABILITIES
Net asset
value - cents
per share 7,060 5,603 7,867 6,401
Rounding of figures may result in computational discrepancies.
Group balance sheet
As at As at As at As at
June March June December
2006 2006 2005 2005
Unaudited Unaudited Unaudited Audited
US Dollar
million Notes
ASSETS
Non-current
assets
Tangible assets 5,768 5,982 5,624 5,905
Intangible
assets 402 392 408 399
Investments in
associates 44 35 38 35
Other
investments 93 105 82 102
Inventories 234 206 118 186
Derivatives 10 28 60 38
Trade and
other
receivables 23 20 19 20
Deferred
taxation 51 52 32 44
Other
non-current
assets 13 22 20 16
6,639 6,842 6,401 6,745
Current assets
Inventories 445 401 392 384
Trade and
other
receivables 230 277 289 250
Derivatives 832 790 457 675
Current
portion of
other
non-current
assets 2 1 1 7
Cash
restricted for
use 3 3 29 8
Cash and cash
equivalents 343 230 246 209
1,854 1,703 1,414 1,533
Non-current
assets held
for sale 14 16 15 16
1,868 1,719 1,429 1,549
8,507 8,561 7,830 8,294
TOTAL ASSETS
EQUITY AND
LIABILITIES
Share capital
and premium 10 3,088 3,091 2,843 3,002
Retained
earnings and
other reserves 11 (428) (745) 211 (388)
Shareholders"
equity 2,660 2,346 3,054 2,614
Minority
interests 12 59 62 60 59
Total equity 2,719 2,408 3,114 2,673
Non-current
liabilities
Borrowings 1,312 1,750 1,571 1,706
Environmental
rehabilitation
and other
provisions 361 368 248 356
Provision for
pension and
post-retiremen
t benefits 177 203 160 197
Trade, other
payables and
deferred
income 15 13 3 14
Derivatives 488 475 319 388
Deferred
taxation 1,013 1,119 1,231 1,159
3,366 3,928 3,532 3,820
Current
liabilities
Trade, other
payables and
deferred
income 421 449 434 427
Current
portion of
borrowings 65 141 171 188
Derivatives 1,781 1,493 531 1,074
Taxation 155 141 47 112
2,422 2,225 1,183 1,801
Total
liabilities 5,788 6,153 4,716 5,621
TOTAL EQUITY
AND
LIABILITIES 8,507 8,561 7,830 8,294
Net asset
value - cents
per share 988 908 1,177 1,009
Rounding of figures may result in computational discrepancies.
Group cash flow statement
Quarter Quarter Quarter
ended ended ended
June March June
2006 2006 2005
SA Rand million Unaudited Unaudited Unaudited
Cash flows from operating activities
Receipts from customers 5,006 4,800 4,475
Payments to suppliers and employees (2,862) (3,230) (3,288)
Cash generated from operations 2,144 1,570 1,187
Cash generated (utilised) by
discontinued operations 14 (11) (62)
Environmental, rehabilitation and
other expenditure (17) (16) (16)
Taxation paid (178) (90) (34)
Net cash inflow from operating
activities 1,963 1,453 1,075
Cash flows from investing activities
Capital expenditure (1,168) (961) (1,068)
Proceeds from disposal of tangible
assets 54 11 4
Proceeds on disposal of discontinued
assets 22 10 -
Other investments acquired (13) (5) (5)
Associate loans and acquisitions (63) - (91)
Proceeds from disposal of investments 19 17 -
Cash restricted for use - 30 (2)
Interest received 44 18 27
Loans advanced - - (42)
Repayment of loans advanced 26 2 13
Utilised in hedge restructure - - -
Net cash outflow from investing
activities (1,079) (877) (1,164)
Cash flows from financing activities
Proceeds from issue of share capital 3,026 23 10
Share issue expenses (32) - -
Proceeds from borrowings 81 329 545
Repayment of borrowings (2,973) (369) (407)
Finance costs (84) (251) (68)
Dividends paid (70) (183) (31)
Net cash (outflow) inflow from
financing activities (52) (451) 50
Net increase (decrease) in cash and
cash equivalents 832 124 (40)
Translation 200 (33) 113
Cash and cash equivalents at
beginning of period 1,419 1,328 1,571
Net cash and cash equivalents at end
of period 2,450 1,419 1,644
Cash generated from operations
(Loss) profit before taxation (900) (984) 621
Adjusted for:
Movement on non-hedge derivatives 2,584 1,582 (185)
Amortisation of tangible assets 951 859 787
Amortisation of intangible assets 3 3 3
Deferred stripping (126) (107) 17
Interest receivable (59) (30) (39)
18 (11) 41
Operating special items
Finance costs and unwinding of
decommissioning and
restoration obligations 209 210 159
Fair value adjustment on option
component of convertible bond (158) 233 (79)
Other non-cash movements (125) 103 129
Movement in working capital (254) (289) (267)
2,144 1,570 1,187
Movement in working capital
Increase in inventories (1,019) (154) (339)
Decrease (increase) in trade and
other receivables 70 (80) (268)
Increase (decrease) in trade and
other payables 695 (55) 340
(254) (289) (267)
Six months Six months
ended ended
June June
2006 2005
SA Rand million Unaudited Unaudited
Cash flows from operating activities
Receipts from customers 9,806 8,614
Payments to suppliers and employees (6,092) (6,600)
Cash generated from operations 3,714 2,014
Cash generated (utilised) by discontinued
operations 3 (113)
Environmental, rehabilitation and other
expenditure (33) (29)
Taxation paid (269) (95)
Net cash inflow from operating activities 3,415 1,777
Cash flows from investing activities
Capital expenditure (2,130) (1,932)
Proceeds from disposal of tangible assets 65 2
Proceeds on disposal of discontinued assets 32 -
Other investments acquired (17) (12)
Associate loans and acquisitions (63) (91)
Proceeds from disposal of investments 36 -
Cash restricted for use 30 (26)
Interest received 62 72
Loans advanced - (42)
Repayment of loans advanced 28 13
Utilised in hedge restructure - (415)
Net cash outflow from investing activities (1,956) (2,431)
Cash flows from financing activities
Proceeds from issue of share capital 3,049 18
Share issue expenses (32) -
Proceeds from borrowings 410 3,113
Repayment of borrowings (3,342) (1,895)
Finance costs (336) (288)
Dividends paid (253) (519)
Net cash (outflow) inflow from financing
activities (503) 429
Net increase (decrease) in cash and cash
equivalents 956 (225)
Translation 167 239
Cash and cash equivalents at beginning of period 1,328 1,630
Net cash and cash equivalents at end of period 2,450 1,644
Cash generated from operations
(Loss) profit before taxation (1,883) 689
Adjusted for:
Movement on non-hedge derivatives 4,166 242
Amortisation of tangible assets 1,810 1,519
Amortisation of intangible assets 6 6
Deferred stripping (233) 25
Interest receivable (89) (93)
8 44
Operating special items
Finance costs and unwinding of decommissioning and
restoration obligations 419 308
Fair value adjustment on option component of
convertible bond 75 (194)
Other non-cash movements (22) 95
Movement in working capital (543) (628)
3,714 2,014
Movement in working capital
Increase in inventories (1,174) (906)
Decrease (increase) in trade and other receivables (10) (267)
Increase (decrease) in trade and other payables 640 546
(543) (628)
Rounding of figures may result in computational discrepancies.
Group cash flow statement
Quarter Quarter Quarter
ended ended ended
June March June
2006 2006 2005
US Dollar million Unaudited Unaudited Unaudited
Cash flows from operating activities
Receipts from customers 776 777 700
Payments to suppliers and employees (445) (522) (507)
Cash generated from operations 331 255 193
Cash generated (utilised) by
discontinued operations 2 (2) (11)
Environmental, rehabilitation and
other expenditure (3) (2) (2)
Taxation paid (28) (15) (5)
Net cash inflow from operating
activities 302 236 175
Cash flows from investing activities
Capital expenditure (181) (156) (167)
Proceeds from disposal of tangible
assets 8 2 -
Proceeds on disposal of discontinued
assets 4 2 -
Other investments acquired (2) (1) (1)
Associate loans and acquisitions (10) - (14)
Proceeds from disposal of investments 3 3 -
Cash restricted for use - 5 (1)
Interest received 7 3 4
Loans advanced - - (7)
Repayment of loans advanced 4 - 2
Utilised in hedge restructure - - -
Net cash outflow from investing
activities (167) (143) (183)
Cash flows from financing activities
Proceeds from issue of share capital 505 4 2
Share issue expenses (5) - -
Proceeds from borrowings 11 54 43
Repayment of borrowings (493) (60) (27)
Finance costs (13) (41) (9)
Dividends paid (11) (29) (5)
Net cash (outflow) inflow from
financing activities (5) (73) 4
Net increase (decrease) in cash and
cash equivalents 131 20 (4)
Translation (18) 1 (3)
Cash and cash equivalents at
beginning of period 230 209 253
Net cash and cash equivalents at end
of period 343 230 246
Cash generated from operations
(Loss) profit before taxation (22) (170) 107
Adjusted for:
Movement on non-hedge derivatives 281 266 (38)
Amortisation of tangible assets 147 140 123
Amortisation of intangible assets - - -
Deferred stripping (15) (17) 2
Interest receivable (9) (5) (6)
2 (2) 7
Operating special items
Finance costs and unwinding of
decommissioning and
restoration obligations 32 34 25
Fair value adjustment on option
component of convertible bond (25) 39 (13)
Other non-cash movements (20) 16 18
Movement in working capital (40) (47) (33)
331 255 193
Movement in working capital
Increase in inventories (60) (41) (17)
Decrease (increase) in trade and
other receivables 47 (20) (20)
(Decrease) increase in trade and
other payables (40) 14 3
(27) (47) (33)
Six months Six months
ended ended
June June
2006 2005
US Dollar million Unaudited Unaudited
Cash flows from operating activities
Receipts from customers 1,553 1,397
Payments to suppliers and employees (967) (1,068)
Cash generated from operations 586 329
Cash generated (utilised) by discontinued
operations - (19)
Environmental, rehabilitation and other
expenditure (5) (5)
Taxation paid (43) (15)
Net cash inflow from operating activities 538 289
Cash flows from investing activities
Capital expenditure (337) (311)
Proceeds from disposal of tangible assets 10 -
Proceeds on disposal of discontinued assets 5 -
Other investments acquired (3) (2)
Associate loans and acquisitions (10) (14)
Proceeds from disposal of investments 6 -
Cash restricted for use 5 (5)
Interest received 10 12
Loans advanced - (7)
Repayment of loans advanced 4 2
Utilised in hedge restructure - (69)
Net cash outflow from investing activities (309) (393)
Cash flows from financing activities
Proceeds from issue of share capital 509 3
Share issue expenses (5) -
Proceeds from borrowings 65 501
Repayment of borrowings (553) (305)
Finance costs (53) (47)
Dividends paid (40) (87)
Net cash (outflow) inflow from financing
activities (77) 65
Net increase (decrease) in cash and cash
equivalents 151 (38)
Translation (17) (5)
Cash and cash equivalents at beginning of period 209 289
Net cash and cash equivalents at end of period 343 246
Cash generated from operations
(Loss) profit before taxation (192) 132
Adjusted for:
Movement on non-hedge derivatives 547 18
Amortisation of tangible assets 286 244
Amortisation of intangible assets 1 1
Deferred stripping (33) 4
Interest receivable (14) (15)
- 7
Operating special items
Finance costs and unwinding of decommissioning and
restoration obligations 67 50
Fair value adjustment on option component of
convertible bond 14 (32)
Other non-cash movements (4) 15
Movement in working capital (86) (94)
586 329
Movement in working capital
Increase in inventories (100) (67)
Decrease (increase) in trade and other receivables 27 9
(Decrease) increase in trade and other payables (13) (36)
(86) (94)
Rounding of figures may result in computational discrepancies.
Statement of recognised income and expense
Six months Year Six months
ended ended ended
December June
June
2006 2005 2005
Unaudited Audited Unaudited
SA Rand million
Actuarial gains and losses
on defined benefit
retirement plans - (173) 40
Net loss (gain) on cash
flow hedges removed from
equity and reported in
income 614 391 (91)
Net loss on cash flow hedges (1,724) (1,281) (116)
Gain (loss) on available
for sale financial assets 8 17 (2)
Deferred taxation on items
above 343 445 182
Net exchange translation
differences 2,470 1,534 2,497
Net (expense) income
recognised directly in
equity 1,711 933 2,510
(Loss) profit for the period (2,023) (1,116) 690
Total recognised income and
expense for the period (312) (183) 3,200
Attributable to:
Equity shareholders of the
parent (445) (355) 3,083
Minority interest 133 172 117
(312) (183) 3,200
US Dollar million
Actuarial gains and losses
on defined benefit
retirement plans - (27) 7
Net loss (gain) on cash
flow hedges removed from
equity and reported in
income 96 18 (11)
Net loss on cash flow hedges (242) (202) (17)
Gain (loss) on available
for sale financial assets 1 2 (2)
Deferred taxation on items
above 40 69 26
Net exchange translation
differences 327 293 380
Net (expense) income
recognised directly in
equity 222 153 383
(Loss) profit for the period (224) (160) 130
Total recognised income and
expense for the period (2) (7) 513
Attributable to:
Equity shareholders of the
parent (16) (28) 504
Minority interest 14 21 9
(2) (7) 513
Rounding of figures may result in computational discrepancies.
Notes
for the quarter and six months ended 30 June 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, JSE Listings Requirements and in the manner required by
the South African Companies Act, 1973 for the preparation of financial
information of the group for the quarter and six months ended 30 June 2006.
Where the preparation or classification of an item has been amended,
comparative information has been reclassified to ensure comparability with the
current period as disclosed in the previous annual report. Such amendments have
been made to provide the users of the financial statements with additional
information.
2. Revenue
Quarter ended Six months
ended
Jun Mar Jun Jun Jun
2006 2006 2005 2006 2005
Unaudited
SA Rand million
Gold income 4,798 4,246 4,404 9,044 8,261
By-products and other revenue
(note 3) 109 181 121 289 224
Interest receivable 59 30 39 89 93
4,966 4,456 4,563 9,422 8,579
Quarter ended Six months
ended
Jun Mar Jun Jun Jun
2006 2006 2005 2006 2005
Unaudited
US Dollar million
Gold income 740 690 684 1,430 1,326
By-products and other revenue
(note 3) 17 29 19 46 36
Interest receivable 9 5 6 14 15
766 724 708 1,490 1,377
3. Cost of sales
Quarter ended Six months
ended
Jun Mar Jun Jun Jun
2006 2006 2005 2006 2005
Unaudited
SA Rand million
Cash operating costs 2,853 2,635 2,865 5,487 5,619
By-products and other revenue
(note 2) (109) (181) (121) (289) (224)
2,744 2,454 2,744 5,198 5,395
Other cash costs 137 118 92 254 192
Total cash costs 2,881 2,572 2,836 5,453 5,587
Retrenchment costs 13 12 31 25 46
Rehabilitation & other
non-cash costs 25 39 49 64 94
Production costs 2,919 2,623 2,916 5,541 5,727
Amortisation of tangible
assets 951 859 787 1,810 1,519
Amortisation of intangible
assets 3 3 3 6 6
Total production costs 3,873 3,484 3,706 7,358 7,252
Inventory change (327) (21) (86) (348) (216)
3,546 3,463 3,620 7,009 7,036
Quarter ended Six months
ended
Jun Mar Jun Jun Jun
2006 2006 2005 2006 2005
Unaudited
US Dollar million
Cash operating costs 441 428 447 870 906
By-products and other revenue
(note 2) (17) (29) (19) (46) (36)
424 399 428 824 870
Other cash costs 21 19 14 40 31
Total cash costs 445 419 443 864 901
Retrenchment costs 2 2 5 4 7
Rehabilitation & other non-cash
costs 4 6 8 10 15
Production costs 451 427 456 878 923
Amortisation of tangible assets 147 140 123 286 244
Amortisation of intangible assets - - - 1 1
Total production costs 599 567 578 1,166 1,168
Inventory change (52) (4) (14) (56) (35)
547 563 565 1,110 1,133
Rounding of figures may result in computational discrepancies.
4. Other net operating expenses
Quarter ended Six months
ended
Jun Mar Jun Jun Jun
2006 2006 2005 2006 2005
Unaudited
SA Rand million
Pension and medical defined benefit
provisions 19 21 16 40 30
Claims filed by former employees in
respect of loss of employment,
work-
related accident injuries and
diseases, governmental fiscal
claims
18 8 18 26 23
and costs of old tailings
operations
Other 2 1 - 3 -
39 30 34 69 53
Quarter ended Six months
ended
Jun Mar Jun Jun Jun
2006 2006 2005 2006 2005
Unaudited
US Dollar million
Pension and medical defined benefit
provisions 4 3 2 6 5
Claims filed by former employees in
respect of loss of employment,
work-
related accident injuries and
diseases, governmental fiscal
claims
3 1 3 4 3
and costs of old tailings
operations
Other - - - - -
7 4 5 10 8
5. Operating special items
Quarter ended Six months
ended
Jun Mar Jun Jun Jun
2006 2006 2005 2006 2005
Unaudited
SA Rand million
(Under) over provision of indirect
taxes (33) 7 - (25) -
Impairment of tangible assets
(note 8) - (2) (45) (3) (45)
Profit (loss) on disposal of assets
47 6 4 52 1
(note 8)
14 11 (41) 24 (44)
Quarter ended Six months
ended
Jun Mar Jun Jun Jun
2006 2006 2005 2006 2005
Unaudited
US Dollar million
(Under) over provision of indirect
taxes (5) 1 - (4) -
Impairment of tangible assets
(note 8) - - (7) - (7)
Profit (loss) on disposal of assets
7 1 - 8 -
(note 8)
2 2 (7) 4 (7)
6. Taxation
Quarter ended Six months
ended
Jun Mar Jun Jun Jun
2006 2006 2005 2006 2005
Unaudited
SA Rand million
Current tax
Normal taxation (369) (222) 11 (592) (26)
Disposal and impairment of
tangible
assets (note 8) (3) (4) - (6) -
Under provision prior year - - - - (1)
(372) (226) 11 (598) (27)
Deferred taxation
Temporary differences (140) (18) (173) (158) (213)
Impairment of tangible assets
(note 8) - - 15 - 15
Change in tax rate - - 314 - 393
Unrealised non-hedge
derivatives 426 202 (105) 628 (47)
286 184 51 470 148
Total taxation (86) (43) 62 (128) 121
Quarter ended Six months
ended
Jun Mar Jun Jun Jun
2006 2006 2005 2006 2005
Unaudited
US Dollar million
Current tax
Normal taxation (56) (36) 1 (92) (5)
Disposal and impairment of tangible
assets (note 8) - (1) - (1) -
Under provision prior year - - - - -
(56) (37) 1 (93) (5)
Deferred taxation
Temporary differences (22) (3) (25) (25) (31)
Impairment of tangible assets
(note 8) - - 2 - 2
Change in tax rate - - 47 - 59
Unrealised non-hedge derivatives 55 33 (16) 88 (7)
33 30 8 63 23
Total taxation (23) (7) 9 (30) 18
Rounding of figures may result in computational discrepancies.
7. 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 Six months
ended
Jun Mar Jun Jun Jun
2006 2006 2005 2006 2005
Unaudited
SA Rand million
Gold income 10 6 10 16 95
Retrenchment, rehabilitation and
other costs (8) (5) (261) (14) (398)
Gross profit (loss) 2 1 (251) 2 (303)
Impairment loss reversed - - 115 - 115
Profit (loss) before taxation
from
discontinued operations 2 1 (136) 2 (188)
Taxation (5) (8) 67 (13) 67
Net loss attributable to
discontinued
operations (4) (7) (69) (11) (121)
Quarter ended Six months
ended
Jun Mar Jun Jun Jun
2006 2006 2005 2006 2005
Unaudited
US Dollar million
Gold income 2 1 2 3 16
Retrenchment, rehabilitation and
other costs (1) (1) (41) (2) (64)
Gross profit (loss) - - (39) - (48)
Impairment loss reversed - - 17 - 17
Profit (loss) before taxation from
discontinued operations - - (22) - (31)
Taxation (1) (1) 10 (2) 10
Net loss attributable to
discontinued
operations (1) (1) (12) (2) (21)
8. Headline (loss) earnings
Quarter ended Six months
ended
Jun Mar Jun Jun Jun
2006 2006 2005 2006 2005
Unaudited
SA Rand million
The (loss) profit
attributable to equity
shareholders has been
adjusted
by the following to
arrive at
headline (loss) earnings:
(Loss) profit
attributable to equity
shareholders (1,047) (1,074) 566 (2,121) 616
Impairment of tangible
assets (note 5) - 2 45 3 45
(Profit) loss on disposal
of assets
(note 5) (47) (6) (4) (52) (1)
Taxation on items above -
current
portion (note 6) 3 4 - 6 -
Taxation on items above -
deferred
- - (15) - (15)
portion (note 6)
Net loss from
discontinued operations
(note 7) 4 7 69 11 121
Headline (loss) earnings (1,086) (1,067) 661 (2,154) 765
Cents per share (1)
Headline (loss) earnings (398) (403) 250 (801) 289
Quarter ended Six months
ended
Jun Mar Jun Jun Jun
2006 2006 2005 2006 2005
Unaudited
US Dollar million
The (loss) profit attributable
to equity
shareholders has been adjusted
by the following to arrive at
headline (loss) earnings:
(Loss) profit attributable to
equity
shareholders (54) (185) 96 (240) 118
Impairment of tangible assets
(note 5) - - 7 - 7
(Profit) loss on disposal of
assets
(note 5) (7) (1) - (8) -
Taxation on items above - current
portion (note 6) - 1 - 1 -
Taxation on items above -
deferred
- - (2) - (2)
portion (note 6)
Net loss from discontinued
operations
(note 7) 1 1 12 2 21
Headline (loss) earnings (60) (184) 112 (244) 143
Cents per share (1)
Headline (loss) earnings (22) (69) 42 (91) 54
(1) Calculated on the basic weighted average number of ordinary shares.
Rounding of figures may result in computational discrepancies.
9. Shares
Quarter ended
Jun Mar Jun
2006 2006 2005
Authorised:
Ordinary shares of 25 SA
cents each 400,000,000 400,000,000 400,000,000
A redeemable preference
shares of 50 SA cents each 2,000,000 2,000,000 2,000,000
B redeemable preference
shares of 1 SA cent each 5,000,000 5,000,000 5,000,000
Issued and fully-paid:
Ordinary shares in issue 275,168,569 265,117,213 264,611,494
A redeemable preference shares 2,000,000 2,000,000 2,000,000
B redeemable preference shares 778,896 778,896 778,896
Weighted average number of
ordinary shares for the
period
Basic ordinary shares 273,028,361 265,064,368 264,556,116
Diluted number of ordinary
shares 273,450,168 265,574,084 265,101,415
Six months ended
Jun Jun
2006 2005
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 275,168,569 264,611,494
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 269,068,365 264,522,557
Diluted number of ordinary shares 269,631,923 265,069,987
During the quarter, 9,970,732 ordinary shares were allotted in terms of the
subscription offer for cash, as approved by shareholders in general meeting on
10 April 2006, while 80,624 ordinary shares were allotted in terms of the
AngloGold Share Incentive Scheme. All the preference shares are held by a
wholly-owned subsidiary company.
10. Share capital and premium
As at
Jun Mar Jun Dec
2006 2006 2005 2005
Unaudited Audited
SA Rand million
Balance at beginning of period 19,047 19,047 18,987 18,987
Ordinary shares issued 3,018 23 19 60
Translation - - - -
Balance at end of period 22,065 19,070 19,006 19,047
As at
Jun Mar Jun Dec
2006 2006 2005 2005
Unaudited Audited
US Dollar million
Balance at beginning of period 3,002 3,002 3,364 3,364
Ordinary shares issued 504 4 3 9
Translation (418) 85 (524) (371)
Balance at end of period 3,088 3,091 2,843 3,002
Rounding of figures may result in computational discrepancies.
11. 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 - - -
Deferred taxation recognised
directly in equity - - -
Profit attributable to equity
shareholders 616 - -
Dividends (476) - -
Net gain 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 - - 2,657
Balance at June 2005 3,519 138 (895)
Balance at December 2005 1,191 138 (1,910)
Loss attributable to equity
shareholders (2,121) - -
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 - - -
Share-based payment expense - - -
Translation - - 2,536
Balance at June 2006 (1,094) 138 626
US Dollars million
Balance at December 2004 286 24 (317)
Actuarial gains and losses
recognised - - -
Deferred taxation recognised
directly in equity - - -
Profit attributable to equity
shareholders 118 - -
Dividends (80) - -
Net gain 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 - (3) 385
Balance at June 2005 324 21 68
Balance at December 2005 (46) 22 (67)
Loss attributable to equity
shareholders (240) - -
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 - - -
Share-based payment expense - - -
Translation - (3) 314
Balance at June 2006 (312) 19 247
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 40 - 40
Deferred taxation recognised directly
in equity (13) - (13)
Profit attributable to equity
shareholders - - 616
Dividends - - (476)
Net gain on cash flow hedges removed
from
equity and reported in income - (93) (93)
Net loss on cash flow hedges - (116) (116)
Deferred taxation on cash flow hedges - 195 195
Loss on available for sale financial
assets - (2) (2)
Translation (1) (200) 2,456
Balance at June 2005 (96) (1,256) 1,410
Balance at December 2005 (227) (1,655) (2,463)
Loss attributable to equity
shareholders - - (2,121)
Dividends - - (164)
Net loss on cash flow hedges removed
from
equity and reported in income - 609 609
Net loss on cash flow hedges - (1,712) (1,712)
Deferred taxation on cash flow hedges - 343 343
Gain on available for sale financial
assets - 8 8
Share-based payment expense - 15 15
Translation 1 (109) 2,428
Balance at June 2006 (226) (2,501) (3,057)
US Dollars million
Balance at December 2004 (22) (184) (213)
Actuarial gains and losses recognised 7 - 7
Deferred taxation recognised directly
in equity (2) - (2)
Profit attributable to equity
shareholders - - 118
Dividends - - (80)
Net gain on cash flow hedges removed
from
equity and reported in income - (11) (11)
Net loss on cash flow hedges - (17) (17)
Deferred taxation on cash flow hedges - 28 28
Loss on available for sale financial
assets - (2) (2)
Translation 3 (2) 383
Balance at June 2005 (14) (188) 211
Balance at December 2005 (36) (261) (388)
Loss attributable to equity
shareholders - - (240)
Dividends - - (26)
Net loss on cash flow hedges removed
from equity and reported in income - 95 95
Net loss on cash flow hedges - (240) (240)
Deferred taxation on cash flow hedges - 40 40
Gain on available for sale financial
assets - 1 1
Share-based payment expense - 2 2
Translation 4 13 328
Balance at June 2006 (32) (350) (428)
Rounding of figures may result in computational discrepancies.
12. Minority interests
As at
Jun Mar Jun Dec
2006 2006 2005 2005
Unaudited Audited
SA Rand million
Balance at beginning of year 374 374 327 327
Attributable profit 98 40 74 146
Dividends paid (88) (18) (43) (125)
Net loss on cash flow hedges
removed from
5 2 2 4
equity and reported in income
Net loss on cash flow hedges (12) (7) - (9)
Translation 42 (7) 41 31
Balance at end of period 419 384 401 374
As at
Jun Mar Jun Dec
2006 2006 2005 2005
Unaudited Audited
US Dollar million
Balance at beginning of year 59 59 58 58
Attributable profit 16 6 12 23
Dividends paid (14) (3) (7) (20)
Net loss on cash flow hedges
removed from
1 - - 1
equity and reported in income
Net loss on cash flow hedges (2) (1) - (2)
Translation (1) 1 (3) (1)
Balance at end of period 59 62 60 59
13. Exchange rates
Jun Mar Dec Jun
2006 2006 2005 2005
Unaudited Unaudited Audited Unaudited
Rand/US dollar average
for the period 6.31 6.15 6.37 6.21
Rand/US dollar average
for the quarter 6.46 6.15 6.53 6.41
Rand/US dollar closing 7.15 6.17 6.35 6.68
Rand/Australian dollar
average for the period 4.69 4.55 4.85 4.80
Rand/Australian dollar
average for the quarter 4.83 4.55 4.86 4.93
Rand/Australian dollar
closing 5.31 4.39 4.65 5.06
14. Capital commitments
Jun Mar Jun Dec
2006 2006 2005 2005
Unaudited Audited
SA Rand million
Orders placed and outstanding on
capital contracts
at the prevailing rate
of exchange 2,726 2,101 1,312 1,182
Jun Mar Jun Dec
2006 2006 2006 2005
Unaudited Audited
US Dollar million
Orders placed and outstanding on
capital contracts
at the prevailing rate of exchange 382 341 196 186
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 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.
15. Contingent liabilities
AngloGold Ashanti"s contingent liabilities at 30 June 2006 are detailed below:
Water pumping cost - South Africa - The South African Department of Water
Affairs and Forestry (DWAF) 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 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.
The mining companies have signed and submitted Settlement and Shareholders"
Agreements to DWAF. The mining companies and government are in the process of
discussing the fulfilment of the conditions precedent in the Agreements. The
Settlement Agreement describes the formation of a "New Water Company", which
will take over the running of the Margaret Shaft from the Stilfontein Gold
Mining Company. The state has requested that the new company be a Section 21
"not for profit company" in order for it to qualify for reduced water tariffs.
The new company will be responsible for the operation of the shaft and the
operation of all pumping equipment at the shaft in order to transfer all
fissure water to surface on a daily basis. Each of the three companies has
agreed to provide one third of the start up capital required on loan account to
the New Water Company. The mining companies will each contribute a maximum of
R18 million capital in the aggregate over a 3-year period. Any additional
working or other capital costs required by the New Water Company will be
borrowed or otherwise obtained from outside sources. In other words the mining
companies are not obliged to contribute more than the R18 million capital. Each
of the mining companies must agree with the contents of a business plan for the
New Water Company. The mining companies will not have any obligation whatsoever
to approve of the Business Plan unless they are satisfied that the New Water
Company will be able to conduct and continue conducting business on a viable
and sustainable basis without any funding being required from the mining
companies other than the R18 million capital provided for in the agreement. At
present it is estimated that a total finance of R54 million is required for the
Margaret Shaft over a three-year period. The Shareholders Agreement provides
for the formation of the New Wa
ter Company, with each mining company nominating
two directors each.
Stilfontein, the owner of the Margaret and Scott Shafts has been placed in
provisional liquidation on the application of a creditor, Mining Reclamation
Services (Pty) Limited. The Master of the High Court has appointed 4 (four)
liquidators. During a meeting held on 21 July the mining companies were advised
that Stilfontein was deregistered as a company at the Company Registrar"s
office after it was placed in provisional liquidation. It is uncertain whether
the deregistration takes precedence over the provisional liquidation. Should
deregistration of Stilfontein be valid then ownership in the assets of the
company vest in the State. If this is the case then the State is free to grant
the New Water Company access to Margaret and Scott Shafts. However should the
liquidation take precedence over the deregistration then the mining companies
will consider purchasing the Margaret and Scott Shafts from the liquidators at
a nominal cost or the cost may be defrayed by the claims that the mining
companies have as creditors of Stilfontein.
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.
Retrenchment costs - South Africa - Following the decision to discontinue
operations at Ergo in 2005, employees surplus to requirements have had their
service contracts 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.
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 ($14m). 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 approximately $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.
16. 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 $30m at 30 June 2006 (31 March 2006: attributable
$27m). The last audited value added tax return was for the period ended 30
June 2005 and at that date an attributable $20m was still outstanding and an
attributable $10m 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 30 June 2006 (31 March 2006: attributable $14m).
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 $7m 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
provided a repayment plan for the amounts due.
17. 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.
18. Borrow ings
AngloGold Ashanti"s borrowings are interest bearing.
19. Announcements
On 10 May 2006, AngloGold Ashanti announced that Kelvin Williams retired from
the board effective 6 May 2006.
On 1 June 2006, AngloGold Ashanti and Bema Gold Corporation announced that they
are to form a new company which will jointly explore a select group of
AngloGold Ashanti"s mineral opportunities located in Northern Colombia, with
initial work focused on the La Mina and El Pino targets. As part of the
agreement, AngloGold Ashanti has initially agreed to provide a minimum of eight
exploration properties while Bema will provide a minimum of $5m in exploration
funding.
On 15 June 2006, AngloGold Ashanti announced the signature of a Letter of
Intent with International Tower Hill Mines Ltd. (ITH), for the sale and option
of AngloGold Ashanti"s 100% interest in six Alaskan mineral exploration
properties and associated databases to ITH. ITH will issue to AngloGold
Ashanti, 19.99% of its issued shares following the acquisition and the
completion of equity financing to raise a minimum of $10m for future
exploration activities. ITH will be required to raise an additional approximate
$6m either prior to or concurrently with the closing of the deal with AngloGold
Ashanti. AngloGold Ashanti will also grant to ITH, the exclusive option to
acquire a 60% interest in each of its LMS and Terra projects by incurring $3m
of exploration expenditure on each project within four years of the grant date
of the option, following which AngloGold Ashanti will have the option to
increase or dilute its stake in these projects, subject to certain conditions.
On 14 July 2006, AngloGold Ashanti announced the signing of a Heads of
Agreement with Antofagasta PLC to jointly explore a highly prospective belt in
Southern Colombia for new gold and copper deposits. AngloGold Ashanti will
include all of its mineral applications, contracts and third party contracts
within the area of interest in the new joint venture, while Antofagasta will
commit to fund a minimum of $1.3m of exploration within 12 months of the
signing of the agreement, with an option to invest an additional $6.7m within
four years in order to earn-in to 50% of the joint venture. Both AngloGold
Ashanti and Antofagasta will have the right to increase their interests by 20%
in copper-dominant and gold-dominant properties subject to certain conditions.
20. Dividend
The directors have today declared Interim Dividend No. 100 of 210 (Interim
Dividend No. 98: 170) South African cents per ordinary share for the six months
ended 30 June 2006. In compliance with the requirements of STRATE, given the
company"s primary listing on the JSE Limited, the salient dates for payment of
the dividend are as follows:
To holders of ordinary shares and to holders of CHESS Depositary Interests
(CDIs)
Each CDI represents one-fifth of an ordinary share.
2006
Currency conversion date for UK pounds, Australian
dollars and Ghanaian cedis Thursday, 10 August
Last date to trade ordinary shares cum dividend Friday, 11 August
Last date to register transfers of certificated
securities cum dividend Friday, 11 August
Ordinary shares trade ex dividend Monday, 14 August
Record date Friday, 18 August
Payment date Friday, 25 August
On the payment date, dividends due to holders of certificated securities on the
South African share register will either be electronically transferred to
shareholders" bank accounts or, in the absence of suitable mandates, dividend
cheques will be posted to such shareholders.
Dividends in respect of dematerialised shareholdings will be credited to
shareholders" accounts with the relevant CSDP or broker.
To comply with the further requirements of STRATE, between Monday, 14 August
2006 and Friday, 18 August 2006, both days inclusive, no transfers between the
South African, United Kingdom, Australian and Ghana share registers will be
permitted and no ordinary shares pertaining to the South African share register
may be dematerialised or rematerialised.
To holders of American Depositary Shares
Each American Depositary Share (ADS) represents one ordinary share.
2006
Ex dividend on New York Stock Exchange Wednesday, 16 August
Record date Friday, 18 August
Approximate date for currency conversion Friday, 25 August
Approximate payment date of dividend Monday, 4 September
Assuming an exchange rate of R7.025/$1, the dividend payable on an ADS is
equivalent to 29.89 US cents. This compares with the interim dividend of 26.095
US cents per ADS paid on 6 September 2005. However, the actual rate of payment
will depend on the exchange rate on the date for currency conversion.
To holders of Ghanaian Depositary Shares (GhDSs)
100 GhDSs represent one ordinary share.
2006
Last date to trade and to register GhDSs cum dividend Friday, 11 August
GhDSs trade ex dividend Monday, 14 August
Record date Friday, 18 August
Approximate payment date of dividend Monday, 28 August
Assuming an exchange rate of R1/US Cents1,308.19 the dividend payable per GhDS
is
equivalent to 27.47 cedis. This compares with the interim dividend of
23.818cedis per GhDS paid on 29 August 2005. However, the actual rate of
payment will depend on the exchange rate on the date for currency conversion.
In Ghana, the authorities have determined that dividends payable to residents
on the Ghana share register be subject to a final withholding tax at a rate of
10%, similar to the rate applicable to dividend payments made by resident
companies which is currently at 10%.
21. 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
26 July 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): AAD
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
PRINTED BY INCE (PTY) LIMITED
Directors
Executive
R M Godsell (Chief Executive Officer)
R Carvalho Silva !
N F Nicolau
S Venkatakrishnan *
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 MA(c)dori
(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
E-mail: jane.kirton@corpserv.co.uk
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 5218
web.queries@computershare.co.za
United Kingdom
Computershare Investor Services PLC
P O Box 82
The Pavilions
Bridgwater Road
Bristol BS99 7NH
England
Telephone: +44 870 889 3177
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
Global BuyDIRECT SM
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 forw ard-looking statements regarding
AngloGold Ashanti"s operations, economic performance and financial condition.
Although AngloGold Ashanti believes that the expectations reflected in such
forw ard-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 forw ard-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 forw
ard-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 w ritten or oral forw ard-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, w hich was filed with the
Securities and Exchange Commission (SEC) on 20 March 2006.
Date: 27/07/2006 08:01:43 AM Produced by the JSE SENS Department
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