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ANG
ANANO
ANG - Anglogold Ashanti Limited - Report to shareholders for the quarter
and year ended 31 December 2006 and dividend declaration
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 year ended 31 December 2006
- Group results for the quarter ....
- Gold production 4% higher to 1.469Moz
- Total cash costs slightly lower at $309/oz, primarily as a result of
higher
grades
- Price received 6% below spot price at $578/oz
- Adjusted headline earnings of $46m after taking into account year-end
adjustments amounting to $100m
and for the year
Gold production 9% lower to 5.6Moz
Total cash costs up 10% to $308/oz, primarily as a result of lower grades
and inflation Adjusted headline earnings doubled year-on-year to $413m, the
company`s highest level of annual earnings ever recorded Company delivers
strong earnings leverage to gold price, with earnings up 105% as against a
gold price increase of 36% Ore Reserves increased 6% to 66.9Moz, with
Mineral Resources up 3% to 181.6Moz, both net of depletion Final dividend
declared at 240 South African cents per share or 33 US cents per share,
resulting in a total dividend of 450 South African cents or 62 US cents per
share, a near doubling of total dividends as compared to 2005
Quarter
ended ended
Dec Sept
2006 2006
SA rand / Metric
Operating review
Gold
Produced - kg / oz (000) 45,697 43,864
Price received1 - R/kg / $/oz 135,628 134,176
Total cash costs - R/kg / $/oz 72,422 71,495
Total production costs - R/kg / $/oz 98,145 95,267
Financial review
Gross profit - R / $ million 1,639 1,981
Gross profit adjusted for the
effect
of unrealised non-hedge
derivatives 2 - R / $ million 1,959 2,020
Profit (loss) attributable to
equity
shareholders - R / $ million 69 1,470
Headline (loss) earnings 3 - R / $ million (150) 1,471
Headline earnings before unrealised
non-hedge derivatives, fair value
adjustments on convertible bond
and interest rate swaps 4 - R / $ million 343 1,011
Capital expenditure - R / $ million 1,861 1,542
Earnings (loss) per ordinary share - cents/share
Basic 25 533
Diluted 25 533
Headline3 (54) 534
Headline earnings before unrealised
non-hedge derivatives, fair value
adjustments on convertible bond
and interest rate swaps 4 - cents/share 124 367
Dividends - cents/share 240
Year
ended ended
Dec Dec
2006 2005
SA rand / Metric
Operating review
Gold
Produced - kg / oz (000) 175,253 191,783
Price received1 - R/kg / $/oz 126,038 89,819
Total cash costs - R/kg / $/oz 67,133 57,465
Total production costs - R/kg / $/oz 90,345 76,495
Financial review
Gross profit - R / $ million 2,700 1,099
Gross profit adjusted for the
effect
of unrealised non-hedge
derivatives 2 - R / $ million 7,207 2,999
Profit (loss) attributable to
equity
shareholders - R / $ million (587) (1,255)
Headline (loss) earnings 3 - R / $ million (838) (716)
Headline earnings before unrealised
non-hedge derivatives, fair value
adjustments on convertible bond
and interest rate swaps 4 - R / $ million 2,790 1,272
Capital expenditure - R / $ million 5,533 4,600
Earnings (loss) per ordinary share - cents/share
Basic (215) (474)
Diluted (215) (474)
Headline3 (307) (271)
Headline earnings before unrealised
non-hedge derivatives, fair value
adjustments on convertible bond
and interest rate swaps 4 - cents/share 1,022 481
Dividends - cents/share 450 232
Quarter
ended ended
Dec Sept
2006 2006
US dollar /
Imperial
Operating review
Gold
Produced - kg / oz (000) 1,469 1,410
Price received1 - R/kg / $/oz 578 584
Total cash costs - R/kg / $/oz 309 311
Total production costs - R/kg / $/oz 419 414
Financial review
Gross profit - R / $ million 133 349
Gross profit adjusted for the effect
of unrealised non-hedge
derivatives 2 - R / $ million 269 283
Profit (loss) attributable to equity
shareholders - R / $ million (72) 268
Headline (loss) earnings 3 - R / $ million (103) 268
Headline earnings before unrealised
non-hedge derivatives, fair value
adjustments on convertible bond
and interest rate swaps 4 - R / $ million 46 141
Capital expenditure - R / $ million 260 220
Earnings (loss) per ordinary share - cents/share
Basic (26) 97
Diluted (26) 97
Headline3 (37) 97
Headline earnings before unrealised
non-hedge derivatives, fair value
adjustments on convertible bond
and interest rate swaps 4 - cents/share 17 51
Dividends - cents/share 33
Year
ended ended
Dec Dec
2006 2005
US dollar /
Imperial
Operating review
Gold
Produced - kg / oz (000) 5,635 6,166
Price received1 - R/kg / $/oz 577 439
Total cash costs - R/kg / $/oz 308 281
Total production costs - R/kg / $/oz 414 374
Financial review
Gross profit - R / $ million 443 185
Gross profit adjusted for the effect
of unrealised non-hedge
derivatives 2 - R / $ million 1,058 470
Profit (loss) attributable to equity
shareholders - R / $ million (44) (182)
Headline (loss) earnings 3 - R / $ million (80) (97)
Headline earnings before unrealised
non-hedge derivatives, fair value
adjustments on convertible bond
and interest rate swaps 4 - R / $ million 413 201
Capital expenditure - R / $ million 817 722
Earnings (loss) per ordinary share - cents/share
Basic (16) (69)
Diluted (16) (69)
Headline3 (29) (37)
Headline earnings before unrealised
non-hedge derivatives, fair value
adjustments on convertible bond
and interest rate swaps 4 - cents/share 151 76
Dividends - cents/share 62 36
Notes:1. Refer to note D of "Non-GAAP disclosure" for the definition.
2. Refer to note B of "Non-GAAP disclosure" for the definition.
3. Refer to note 8 of "Notes" for the definition.
4. Refer to note A of "Non-GAAP disclosure" 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 December 2006
Price received 1 Production
% %
$/oz Variance oz (000) Variance
4 4
Sunrise Dam 625 (21) 153 42
Great Noligwa 559 (7) 149 (1)
Mponeng 556 (7) 148 (5)
AngloGold Ashanti Mineracao 746 26 69 3
Kopanang 558 (7) 118 6
TauTona 559 (7) 116 (10)
Cripple Creek & Victor 626 65 86 25
Morila 5 616 (1) 48 (4)
Yatela 5 615 (1) 34 -
Sadiola 5 612 (2) 50 9
Serra Grande 5 670 24 24 -
Geita 608 (2) 80 10
Tau Lekoa 561 (6) 45 2
Cerro Vanguardia 5 450 (8) 43 (22)
Siguiri 5 539 7 77 24
Savuka 568 (5) 21 (19)
Navachab 619 (1) 20 (13)
Bibiani 606 (3) 5 (38)
Iduapriem 5 495 (2) 39 (11)
Moab Khotsong 558 (6) 13 18
Obuasi 501 6 98 4
Other 34 31
AngloGold Ashanti 578 (1) 1,469 4
Cash gross
Total cash costs profit 2
% %
$/oz Variance $m Variance
4 4
Sunrise Dam 293 (15) 54 23
Great Noligwa 232 (14) 49 -
Mponeng 247 14 48 (17)
AngloGold Ashanti Mineracao 192 (7) 36 38
Kopanang 262 (8) 35 3
TauTona 277 14 32 (29)
Cripple Creek & Victor 259 7 31 182
Morila 5 317 14 17 (6)
Yatela 5 222 (5) 17 31
Sadiola 5 277 - 16 (6)
Serra Grande 5 207 7 11 38
Geita 586 9 11 120
Tau Lekoa 373 (11) 8 14
Cerro Vanguardia 5 340 60 8 (53)
Siguiri 5 383 (12) 8 100
Savuka 339 15 6 (25)
Navachab 303 19 6 (25)
Bibiani 508 (28) 5 600
Iduapriem 5 366 8 5 (29)
Moab Khotsong 498 (26) - 100
Obuasi 437 13 (8) (300)
Other 40 (11)
AngloGold Ashanti 309 - 434 2
Gross profit
(loss) adjusted
for the effect of
unrealised non-
hedge
derivatives 3
%
$m Variance
4
Sunrise Dam 43 23
Great Noligwa 35 (10)
Mponeng 30 (32)
AngloGold Ashanti Mineracao 32 39
Kopanang 27 (7)
TauTona 20 (35)
Cripple Creek & Victor 23 667
Morila 5 13 (7)
Yatela 5 14 75
Sadiola 5 12 (14)
Serra Grande 5 8 14
Geita - 100
Tau Lekoa (3) (200)
Cerro Vanguardia 5 (1) (110)
Siguiri 5 (3) -
Savuka 5 (29)
Navachab 4 (33)
Bibiani 4 300
Iduapriem 5 2 (33)
Moab Khotsong (6) (20)
Obuasi (22) (83)
Other 31 (14)
AngloGold Ashanti 269 (5)
1 Refer to note D of "Non-GAAP disclosure" for the definition.
2 Refer to note F of "Non-GAAP disclosure" for the definition.
3 Refer to note B of "Non-GAAP disclosure" for the definition.
4 Variance December 2006 quarter on September 2006 quarter - increase
(decrease).
5 Attributable.
Rounding of figures may result in computational discrepancies.
Financial and operating review
OVERVIEW FOR THE QUARTER AND YEAR
FOURTH QUARTER
The December quarter was marked by an improved
operational performance, with production 4% higher to 1.469Moz and total
cash costs slightly lower at $309/oz, both in line with company forecasts.
The price received for the quarter was also well within the estimated range,
at $578/oz, or 6% below the average spot price, as the company continued its
strategy of delivering into the hedge book as fully as possible.
Adjusted headline earnings for the quarter, at $46m, were reduced by year-
end accounting adjustments that amounted to $100m. Of this, non-cash charges
of $42m related to the vesting of certain share-based awards, as well as the
company`s employee share ownership plan and black economic empowerment
scheme. The remaining $56m was related to redundancy costs at Obuasi in
Ghana and changes to both current, deferred and indirect tax provisions, as
well as rehabilitation and amortisation charges.
During the fourth quarter, the company experienced 12 fatal accidents, of
which the seismic event at TauTona claimed the lives of five employees in
late October. The group`s fatal injury frequency rate (FIFR) for the quarter
regressed 29%, from 0.21 to 0.27 per million man hours worked. The lost-time
injury frequency rate (LTIFR) improved by 14%. For the year, the FIFR, at
0.22, represented a 57% increase, and a significant deterioration in what
had been an improving safety trend. The LTIFR also regressed for the year by
14%, notwithstanding solid safety performances from several operations,
including Cripple Creek & Victor, which has operated without a lost-time
injury since November 2003. The AngloGold Ashanti management team is
determined to improve the company`s safety performance, with the objective
of achieving injury and fatality-free workplaces.
While there were improvements at Tau Lekoa and Moab Khotsong and a
particularly strong performance from Kopanang due to a 12% yield increase,
production from the South African assets was marginally lower this quarter.
In particular, lower tonnes treated at Great Noligwa and lower yields at
Savuka resulted in production declines, while at TauTona, production was
reduced by seismicity concerns that halted mining on several panels. Total
cash costs for the South African assets were well- contained quarter-on-
quarter at R62,888/kg.
Of the other African assets, Sadiola in Mali and Geita in Tanzania reported
production increases of 9% and 10%, respectively, after recovered grade
improved 21% at Sadiola and 17% at Geita over the quarter. Siguiri in Guinea
also posted strong results, with production 24% better to 77,000oz as a
result of higher tonnage throughput and total cash costs 12% lower. The
Ghanaian operations had a mixed quarter, with production 4% higher at Obuasi
and 11% lower at Iduapriem, in both cases the result of grade changes. The
sale of Bibiani, also in Ghana, to Central African Gold plc, was completed
in December for a consideration of $40m which resulted in a profit on
disposal of assets of $25m.
The international assets reported generally strong results, particularly at
Sunrise Dam in Australia, where production was 42% higher and total cash
costs 17% lower as mining progressed in the open-pit to higher grade areas
as planned. Cripple Creek & Victor in Colorado also saw a significant
production increase to 86,000oz, while in South America, production was
generally steady at the Brazilian operations but 22% lower at Cerro
Vanguardia in Argentina due to lower grades.
YEAR
For the year ended 31 December 2006, gold production was 9% lower at
5.635Moz. This year-on- year decline was largely attributable to a
significantly reduced contribution from Geita due to the delayed cut-back of
the operation`s main pit. Production decreases at Bibiani as it phased into
closure mode, as well as at Great Noligwa due to lower yields also
contributed to the group`s overall production decline, as did the
restructurings of Savuka and Tau Lekoa to achieve higher profitability at
lower production rates.
Although total cash costs for the year increased 10% to $308/oz, the
company`s stringent approach to cost management, particularly in the face of
rising commodity input prices, yielded $73m in cost-savings during 2006. The
majority of this, or $50m, was again derived from the South African
operations, from which $144m in savings was also obtained in 2005. Adjusted
headline earnings doubled year-on-year to $413m, representing strong
leverage to the gold price despite these cost pressures.
In 2006, AngloGold Ashanti recorded an increase in total ore reserves before
depletion of 10.1Moz. After depletion, this represents a 6% increase year-on-
year, from 63.3Moz in 2005 to 66.9Moz in 2006.Significant additions included
2.9Moz at Mponeng due to the inclusion of the VCR Below 120 Level project,
and 1.1Moz at Cripple Creek & Victor as a result of a planned extension of
that operation`s life.
The company`s total Mineral Resource before depletion increased by 14.1Moz
for the year. After depletion, this represents an increase of 5.8Moz, from
175.8Moz in 2005 to 181.6Moz in 2006.
Significant additions included 5.2Moz at Obuasi as a result of exploration
and changes in the estimation methodology of the below-50 level area and
2.1Moz each at Boddington, Geita and Navachab, primarily due to successful
brownfields exploration.
A dividend of 240 South African cents (33 US cents)/ share has been declared
for the six months ended 31 December 2006.
The company is pleased to welcome Mr Sipho Pityana to its Board of
Directors, effective 13 February 2007. Sir Sam Jonah simultaneously
announced his resignation from the Board, effective immediately. AngloGold
Ashanti wishes to thank Sir Sam his years of dedicated service to the
company.
Looking ahead, and taking into account the impact of the recent slope
failure at Geita together with a revised mining strategy at TauTona due to
seismicity, production for the first quarter is estimated to be 1.34Moz at
an average total cash cost of $327/oz assuming the following exchange rates:
R7.50/$, A$/$0.76, BRL2.20/$ and Argentinean peso 3.15/$.Capital expenditure
is estimated at $272m and will be managed in line with profitability and
cash flow.
The table below provides guidance for the year in respect of forecast
ounces, total cash costs and capital expenditure. In 2007, AngloGold
Ashanti expects production to increase to approximately 5.8Moz.
Total cash costs are anticipated to be $309/oz, based on the following
exchange rate assumptions: R7.50/$, A$/$0.76, BRL2.20/$ and Argentinean peso
3.15/$. Capital expenditure for the year is estimated to be $1,070m.
Operational forecast for 2007
Expected Forecast Capital
Operation Forecast Production Cash Cost Expenditure
Ounces (000) US$/oz* US$m**
SOUTH AFRICA 2,500 286 363
Vaal River
Great Noligwa 580 295 40
Kopanang 470 260 58
Tau Lekoa 160 426 15
Surface Operations 120 300 -
Moab Khotsong 80 470 80
West Wits
Mponeng 550 249 87
Savuka 70 372 4
TauTona 470 252 79
ARGENTINA 200 263 23
Cerro Vanguardia 200 260 23
AUSTRALIA 580 275 346
Sunrise Dam 580 266 34
Boddington - - 312
BRAZIL 410 202 84
AngloGold Ashanti
Brasil Mineracao 320 178 65
Serra Grande 90 244 19
GHANA 570 369 133
Iduapriem 170 403 46
Obuasi 400 355 87
GUINEA 270 399 14
Siguiri 270 399 14
MALI 480 327 13
Morila -
Attributable 40% 200 297 4
Sadiola -
Attributable 38% 170 364 7
Yatela -
Attributable 40% 110 326 2
NAMIBIA 80 359 5
Navachab 80 359 5
TANZANIA 400 479 53
Geita 400 479 53
NORTH AMERICA 310 276 25
Cripple Creek &
Victor 310 267 25
Other - - 10
AngloGold Ashanti 5,800 309 1,070
* Assumes the following exchange assumptions to the US dollar: R7.50/$,
A$/$0.76, BRL2.20/$ and Argentinean peso 3.15/$.
** Capital expenditure is managed in line with earnings and cash flow, and
may
fluctuate accordingly.
Exploration
Total exploration expenditure amounted to $32m ($16m expensed, $16m
capitalised) during the fourth quarter of 2006, compared to $26m ($16m
expensed, $10m capitalised) in the previous quarter.
BROWNFIELDS EXPLORATION
In Australia, at Sunrise Dam, exploration focused on completing infill
drilling for the underground project targets at Cosmo, Hammerhead and West
of Western Shea and drilling of the Tiger target commenced in December.
Significant results were received in all targeted lodes. At the Boddington
mine, six diamond drilling rigs were employed to advance Resource conversion
and near-mine pit extension exploration.
At Siguiri, in Guinea, infill and extension drilling continued at the
Kintinian and Sintroko prospects, as did a drill programme to upgrade the
spent heap leach pad from an Inferred to Indicated Resource. The potential
re-treatment of the pad through the new CIP plant is under investigation.
Diamond drilling to establish the structural controls of the mineralisation
at Foulata, located 35km west of the current Siguiri operation, also
recommenced.
At Geita, in Tanzania, three diamond drill holes were completed at the Star
& Comment gap area, with results pending. Limited drilling at the Area 3
West - Central prospect and reconnaissance drilling at the Mabe and Star &
Comet North prospects both returned encouraging results. At Morila in Mali,
the grant-wide exploration programme encountered some broad, low-grade zones
but most holes have shown insignificant intersections. At Sadiola, infill
drilling commenced on upgrading Inferred Resources to Indicated for the Deep
Sulphide Project.
At Navachab, in Namibia, drilling of the Gecko Central and Anomaly 16
prospects has been completed and geostatistical modelling is underway. Scout
drilling of the Pub Grid anomalies has commenced, with some encouraging
results. Thirty- three Reverse Circulation (RC) holes totalling 4,130m have
been completed around the area of the main pit as part of the western
pushback evaluation.
In Argentina, at Cerro Vanguardia, resource reconnaissance drilling has been
largely completed.
At Corrego do Sitio, in Brazil, infill drilling conversion of open-pit
Resources to Reserves continued and new orebodies are being probed.
At Cripple Creek & Victor in the United States, drill results within the
Life of Mine Extension Project area have been encouraging and additional
modeling has been completed. Development drilling continues in the South
Cresson Deposit to define final pit depths and high wall designs.
GREENFIELDS EXPLORATION
Greenfields exploration activities continued during the fourth quarter in
Australia, Colombia, DRC, China, Laos, Philippines, and Russia.
In Australia, encouraging drill results were again obtained at the Tropicana
joint venture project from both the Tropicana and Havana zones. At
Tropicana, RC and diamond drilling was focused on 50m by 100m spaced infill
holes designed to test mineralisation down-dip on selected sections and to
better define the orientation of high-grade shoots. Better results received
from Tropicana during the quarter include: 12.0m @ 7.0g/t (includes 9.0m @
9.14g/t), 19.0m @ 3.78g/t (includes 11.0m @ 6.14g/t), 26.0m @ 3.04g/t
(includes 13.0m @ 3.87g/t), 19.0m @ 2.86g/t (includes 17.0m @ 3.11g/t),
15.0m @ 3.09g/t (includes 4.0m @ 8.78g/t).
At Havana, RC and diamond drilling returned results including 33.0m @
2.57g/t (includes 22.0m @ 3.59g/t), 10.0m @ 4.18g/t (includes 8.0m @
5.13g/t), 10m @ 5.3g/t, 11m @ 3.4g/t, 21.0m @ 4.03g/t (includes 14.0m @
5.75g/t), 30.0m @ 4.45g/t (includes 17.0m @ 6.95g/t), 63.0m @ 2.98g/t
(includes 40.0m @ 3.79g/t), and 18.0m @ 3.93g/t (includes 14.0m @ 4.84g/t).
Regional exploration programmes continued at an accelerated pace in Colombia
during the fourth quarter. Follow-up drilling was undertaken on AngloGold
Ashanti`s bulk-tonnage targets at Gramalote and Quinchia, located in the
Antioquia and Middle Cauca regions, respectively, together with the initial
drill testing of the joint venture prospects El Carmen (with local partner
Mineros) and San Martin (with Bema Gold). Results for this latest drilling
are pending.
Drill target definition on AngloGold Ashanti`s new La Colosa gold-copper
porphyry prospect also advanced, with drill testing expected to commence
during the first quarter of 2007.
During the fourth quarter, drilling in the Mongbwalu region of the DRC,
focused on evaluating the resource potential of the Pluto sector, located to
the north-east of the historical Adidi-Kanga mines. Additional open-pit
resource potential has also been identified to the north in the Issuru
sector, and drilling of this target is expected to commence during the first
quarter. Follow-up drilling was also completed in the "DD051" sector
(located south-east of Adidi-Kanga, and with a previously reported intercept
of 13.74m @ 6.40g/t from 57m) and around the known mineralisation in the
Nzebi mine. Results are pending. The best results obtained from the
Mongbwalu area included: 6.05m @ 20.29g/t (DDH084: 127.3 - 133.25m, Nzebi
area), 3.39m @ 7.87g/t (DDH116: 102.94 - 106.33m, Adidi area), 5.53m @
8.14g/t (DDH134: 260.7 - 266.23m; Pluto area).
In the first quarter of 2007, an additional two RC rigs will arrive on-site
to assist with infill drilling and an airborne geophysical survey will be
flown over the Mongbwalu District to cover the central Mongbwalu area,
together with the Galaya-Lodjo prospects (located 20km to the north of
Mongbwalu) and the Kilo-Camp III gold camp to the south-east.
In Russia, drafting of the Polymetal Strategic Alliance agreements
continued. On the completion of the Sale and Purchase Agreement with Trans-
Siberian Gold, which is close to finalisation, the Veduga and Bogunay
projects will be incorporated into the Polymetal Strategic Alliance. A
targeting and budget preparation meeting was held in Krasnoyarsk for the
Veduga project, which resulted in the definition of 19 targets for
evaluation in 2007.
In China, a second cooperative joint venture (CJV) was signed with local
partners at the Jinchanggou Project in Gansu Province. The process of
registering the CJV and applying for the business licence has now commenced.
This follows AngloGold Ashanti`s first CJV at Yili-Yunlong in Xinjiang
Province.
In the Philippines, work continued on finalising the Mapawa joint venture
agreement with Red 5. Final tenement grant for Mapawa is now awaited from
the Manila Central Mines and Geosciences Bureau, the granting of which will
allow more detailed exploration of the area to commence.
In Laos, regional reconnaissance stream sediment / rock chip sampling and
mapping programmes were conducted in two areas of north-western Laos under
the joint venture with Oxiana Limited. A technical review of the Truongson
fold belt, which hosts the Sepon and Phu Bia copper-gold mines, identified a
number of areas analogous to these deposits. Field visits to the highest
priority target areas are in progress to determine the existence of
favourable geology, structures and mineralisation.
Review of the gold market
Over the fourth quarter of 2006, spot gold traded in a range of $88, from a
low of nearly $561/oz to a high of $649/oz. The fourth quarter range,
similar to that of the previous quarter, highlighted the increasing
stability of the gold market, which was also evidenced in that the spot
price remained above $600/oz throughout the last two months of the quarter.
The average spot price for the quarter of $614/oz represents a decline of
approximately $7/oz or 1.3% from that of the third quarter, resulting in a
an average spot price for the year of $604/oz. While this marks a retreat
from the 26-year high of $725/oz that was reached in May 2006, it also
represents a 36% increase on the average annual gold price in 2005, and the
greatest annual gain since 1980.
The average rand gold price for the fourth quarter was R143,725/kg,
generally in line with that of the previous quarter. The average annual rand
gold price was R131,320/kg, a 44% increase over that of 2005.
PHYSICAL MARKET
While the gold price volatility that characterised the first half of 2006
contributed heavily to the 16% decline in global jewellery offtake for the
year, lower prices and, in particular, renewed price stability in the third
and fourth quarters saw some pent-up demand surges from key markets such as
India, which posted record gold imports even as the price steadied above
$600/oz.
This was less evident in the Middle East, where the combination of high and
volatile gold prices early in the year resulted in a 22% decline in
fabrication, despite a late-year recovery. Chinese jewellery fabrication,
however, increased approximately 5% for the year, supported primarily by
higher local consumption, while the North American retail market shifted to
lighter carat and mixed material jewellery in the face of volatile gold
prices. This shift negatively affected local gold fabrication and resulted
in a 19% decline in jewellery imports, impacting the key jewellery-producing
markets of Italy and Turkey, where fabrication fell 40% in the first ten
months of the year.
INVESTMENT MARKET
The confirmation in November that sales in the second year of the second
Central Bank Gold Agreement (CBGA) were 104t lower than the permissible
ceiling of 500t provided a bullish signal for both the gold market and
investors in the fourth quarter. Most market analysts continue to speculate
that the CBGA signatories are indeed unlikely to fulfil their full quota for
the remaining three years of the second agreement.
On 31 January, the IMF announced that its independent advisory group had
recommended the sale of 400t of its total 3,217t gold holding in order to
meet an expected shortfall in annual revenue. While this remains a
recommendation and an official IMF decision is yet to be taken, it should be
noted that the terms of the recommendation state that the potential sale
would not add to the announced volume of sales from official sources and
should be handled in such as way so as to avoid causing disturbances to the
broader gold market.
Exchange traded gold holdings grew by over 14%, or 77.5t, in the fourth
quarter, resulting in a worldwide investment in gold ETFs valued at $12.8bn
by the close of 2006. Also notable was new investor interest in physical
gold towards the end of the year, with both gold bullion coins and small
bars seeing steady demand, possibly related to the emergence over the course
of the year of increased "safe haven" buying driven by a sense of rising
geopolitical and economic insecurity.
Trading in the gold futures market was restrained over the quarter and, on
average, the net long positions reported by the Commodities Future Trading
Commission, fell 15% quarter-on-quarter.
PRODUCER HEDGING
Preliminary figures for 2006 indicate that gold producers reduced hedges by
more than 400t of gold during the year, through delivering into contracts
and unwinding gold hedge contracts.
This is the highest annual figure recorded and is approximately five times
the reduction seen in 2005.
CURRENCIES
Recovering somewhat from the economic and political uncertainty that
featured strongly in the third quarter, the rand gained ground against the
US dollar during the fourth quarter, opening at R7.75/$ and closing at
R6.97/$. However, quarter-on-quarter, the average rand dollar exchange rate
weakened by 2% to R7.31. For the full year, the average rand dollar exchange
rate was R6.77/$, some 6.3% weaker that the previous year`s average of
R6.37/$.
Against the euro, the US dollar weakened slightly during the quarter,
averaging $/1.29 versus the third quarter average of $/1.27. Looking
forward, the market consensus for 2007 is for a weaker US dollar due to an
expected slowing of the US economy and the continuation of the "twin
deficit" problem, thus giving further support to the gold price.
HEDGING
As at 31 December, the net delta hedge position of AngloGold Ashanti was
10.16Moz or 316t, valued at the spot gold price at the quarter-end of
$636.30/oz, $35.20/oz higher than that of the previous quarter. This net
delta position reflects an increase of some 0.66Moz or 20t quarter-on-
quarter, due to the higher fourth quarter-end gold price, offset by
decreases related to maturing hedge contracts, buybacks and other delta-
reducing strategies as part of a broader hedge reduction strategy.
The marked-to-market value of the hedge position as at 31 December 2006 was
a negative $2.9bn (at 30 September 2006: negative $2.78bn). The increase in
the marked-to-market position was primarily due to the higher gold price of
$636.30/oz offset by the lower prevailing exchange rates, interest rates and
volatilities prevailing at quarter-end, combined with the impacts of the
changed hedge position quarter- on-quarter.
The price received by the company for the quarter was $578/oz, $36/oz or
some 6% below the average spot price for the period of $614/oz.
The company continues to actively manage its hedge position in a value
accretive manner and during the quarter a number of hedge contracts maturing
in the near-term were restructured into longer dated options contracts. A
number of the short dated long positions from the fourth quarter 2006 were
rolled out into 2007 resulting in a net long dollar gold position of
12,957kg at an average of $639/oz for 2007. These long positions will be
integrated into the hedge book and used to reduce hedging commitments in
future periods, in line with past practice.
Looking to 2007, and assuming a gold price range similar to that seen last
year, the received gold price for the group is likely to be some 8% to 10%
below the spot gold price
In order to simplify the reporting effect of the gold hedges on the received
price, from 1 January 2007, AngloGold Ashanti will in its group financials
show an average received gold price, which will be similar across all of its
mines.
Hedge position
As at 31 December 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 10.16Moz or 316t (at 30
September 2006: 9.50Moz or 296t).
The marked-to-market value of all hedge transactions making up the hedge
positions was a negative $2.903bn (negative R20.324bn) as at 31 December
2006 (at 30 September 2006: negative $2.777bn or R21.56bn). This value at 31
December 2006 was based on a gold price of $636.30/oz, exchange rates of
R7.001/$ and A$/$0.7886 and the prevailing market interest rates and
volatilities at that date.
As at 12 February 2007, the marked-to-market value of the hedge book was a
negative $3.147bn (negative R22.73bn), based on a gold price of $664.50/oz
and exchange rates of R7.225/$ and A$/$0.7736 and the prevailing market
interest rates and volatilities at the time.
These marked-to-market valuations are not predictive of the future value of
the hedge position, nor of future impact on the revenue of the company. The
valuation represents the cost of buying all hedge contracts at the time of
valuation, at market prices and rates available at the time.
Year 2007 2008
DOLLAR GOLD
Forward contracts Amount (kg) 19,622 22,817
US$/oz $301 $314
*Forward contracts
(Long) Amount (kg) 12,957
US$/oz $639
Put options purchased Amount (kg) 1,455
US$/oz $292
Put options sold Amount (kg) 19,259 11,555
US$/oz $612 $587
Call options purchased Amount (kg) 14,252 6,503
US$/oz $398 $432
Call options sold Amount (kg) 47,779 46,776
US$/oz $475 $466
RAND GOLD
Forward contracts Amount (kg) 2,138
Rand per kg R91,299
Call options sold Amount (kg) 311
Rand per kg R108,123
A DOLLAR GOLD
Forward contracts Amount (kg) 7,465 2,177
A$ per oz AUD 669 AUD 656
Put options purchased Amount (kg) 4,977
A$ per oz AUD 826
Put options sold Amount (kg) 5,910
A$ per oz AUD 800
Call options purchased Amount (kg) 3,732 3,110
A$ per oz AUD 668 AUD 680
Call options sold Amount (kg) 6,532
A$ per oz AUD 847
Delta (kg) (36,687) (54,993)
** Total net gold:
Delta (oz) (1,179,513) (1,768,063)
Year 2009 2010
DOLLAR GOLD
Forward contracts Amount (kg) 21,738 14,462
US$/oz $316 $347
*Forward contracts
(Long) Amount (kg)
US$/oz
Put options purchased Amount (kg)
US$/oz
Put options sold Amount (kg) 3,748 1,882
US$/oz $530 $410
Call options purchased Amount (kg)
US$/oz
Call options sold Amount (kg) 41,148 32,036
US$/oz $473 $458
RAND GOLD
Forward contracts Amount (kg) 933
Rand per kg R116,335
Call options sold Amount (kg) 2,986 2,986
Rand per kg R202,054 R216,522
A DOLLAR GOLD
Forward contracts Amount (kg) 3,390 3,110
A$ per oz AUD 649 AUD 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 AUD 694 AUD 712
Call options sold Amount (kg)
A$ per oz
Delta (kg) (62,616) (45,773)
** Total net gold:
Delta (oz) (2,013,148) (1,471,634)
Year 2011 2012-2016
DOLLAR GOLD
Forward contracts Amount (kg) 12,931 24,307
US$/oz $397 $418
*Forward contracts
(Long) Amount (kg)
US$/oz
Put options purchased Amount (kg)
US$/oz
Put options sold Amount (kg) 1,882 5,645
US$/oz $420 $440
Call options purchased Amount (kg)
US$/oz
Call options sold Amount (kg) 36,188 51,295
US$/oz $492 $564
RAND GOLD
Forward contracts Amount (kg)
Rand per kg
Call options sold Amount (kg) 2,986
Rand per kg R230,990
A DOLLAR GOLD
Forward contracts Amount (kg)
A$ per oz
Put options purchased Amount (kg)
A$ per oz
Put options sold Amount (kg)
A$ per oz
Call options purchased Amount (kg)
A$ per oz
Call options sold Amount (kg)
A$ per oz
Delta (kg) (46,952) (68,991)
** Total net gold:
Delta (oz) (1,509,540) (2,218,109)
Year Total
DOLLAR GOLD
Forward contracts Amount (kg) 115,877
US$/oz $347
*Forward contracts
(Long) Amount (kg) 12,957
US$/oz $639
Put options purchased Amount (kg) 1,455
US$/oz $292
Put options sold Amount (kg) 43,971
US$/oz $559
Call options purchased Amount (kg) 20,755
US$/oz $409
Call options sold Amount (kg) 255,222
US$/oz $491
RAND GOLD
Forward contracts Amount (kg) 3,071
Rand per kg R98,769
Call options sold Amount (kg) 9,269
Rand per kg R212,885
A DOLLAR GOLD
Forward contracts Amount (kg) 16,143
A$ per oz AUD 666
Put options purchased Amount (kg) 4,977
A$ per oz AUD 826
Put options sold Amount (kg) 5,910
A$ per oz AUD 800
Call options purchased Amount (kg) 11,196
A$ per oz AUD 686
Call options sold Amount (kg) 6,532
A$ per oz AUD 847
Delta (kg) (316,012)
** Total net gold:
Delta (oz) (10,160,007)
* Indicates a long position resulting from forward purchase contracts. The
group enters into forward purchase contracts as part of its strategy to
actively manage and reduce the size of the hedge book.
** 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 December 2006.
Rounding of figures may result in computational discrepancies.
Year 2007 2008 2009
DOLLAR SILVER
Put options purchased Amount (kg) 43,545 43,545
$ per oz $7.40 $7.66
Put options sold Amount (kg) 43,545 43,545
$ per oz $5.93 $6.19
Call options sold Amount (kg) 43,545 43,545
$ per oz $8.40 $8.64
Year 2010 2011 2012-2016
DOLLAR SILVER
Put options purchased Amount (kg)
$ per oz
Put options sold Amount (kg)
$ per oz
Call options sold Amount (kg)
$ per oz
Year Total
DOLLAR SILVER
Put options purchased Amount (kg) 87,090
$ per oz $7.53
Put options sold Amount (kg) 87,090
$ per oz $6.06
Call options sold Amount (kg) 87,090
$ per oz $8.52
The following table indicates the group`s currency hedge position at 31
December 2006
Year 2007 2008 2009
RAND DOLLAR (000)
Put options purchased Amount ($) $15,000
US$/R R7.61
Put options sold Amount ($) $40,000
US$/R R7.08
Call options sold Amount ($) $55,000
US$/R R7.34
A DOLLAR (000)
Forward contracts Amount ($) 73,518 20,000
A$/US$ AUD 0.76 AUD 0.73
Put options purchased Amount ($) 10,000
A$/US$ AUD 0.76
Put options sold Amount ($) 10,000
A$/US$ AUD 0.78
Call options sold Amount ($) 10,000
A$/US$ AUD 0.75
Year 2010 2011 2012-2016
RAND DOLLAR (000)
Put options purchased Amount ($)
US$/R
Put options sold Amount ($)
US$/R
Call options sold Amount ($)
US$/R
A DOLLAR (000)
Forward contracts Amount ($)
A$/US$
Put options purchased Amount ($)
A$/US$
Put options sold Amount ($)
A$/US$
Call options sold Amount ($)
A$/US$
Year Total
RAND DOLLAR (000)
Put options purchased Amount ($) $15,000
US$/R R7.61
Put options sold Amount ($) $40,000
US$/R R7.08
Call options sold Amount ($) $55,000
US$/R R7.34
A DOLLAR (000)
Forward contracts Amount ($) 93,518
A$/US$ AUD 0.75
Put options purchased Amount ($) 10,000
A$/US$ AUD 0.76
Put options sold Amount ($) 10,000
A$/US$ AUD 0.78
Call options sold Amount ($) 10,000
A$/US$ AUD 0.75
Derivative analysis by accounting designation as at 31 December 2006
Cash flow
Normal sale hedge Non-hedge
exempted accounted accounted Total
US Dollars (millions)
Commodity option contracts (516) - (1,056) (1,572)
Foreign exchange option contracts - - (12) (12)
Forward sale commodity contracts (1,061) (375) 108 (1,328)
Forward foreign exchange contracts - 2 2 4
Interest rate swaps (34) - 39 5
Total hedging contracts (1,611) (373) (919) (2,903)
Option component of convertible
bonds - - (72) (72)
Total derivatives (1,611) (373) (991) (2,975)
Rounding of figures may result in computational discrepancies.
Group income statement
Quarter Quarter
ended ended
December September
2006 2006
SA Rand million Notes Unaudited Unaudited
Revenue 2 5,975 5,707
Gold income 5,634 5,459
Cost of sales 3 (4,477) (3,987)
Non-hedge derivative gain (loss) 482 510
Gross profit (loss) 1,639 1,981
Corporate administration and other
expenses (174) (126)
Market development costs (32) (26)
Exploration costs (116) (112)
Other operating expenses 4 (26) (34)
Operating special items 5 (98) (56)
Operating profit (loss) 1,193 1,628
Interest receivable 69 60
Exchange (loss) gain (11) 6
Fair value adjustment on option component
of convertible bond (210) 421
Finance costs (246) (157)
Fair value loss on interest rate swaps - -
Share of associates` profit (loss) 2 (4)
Profit (loss) before taxation 797 1,955
Taxation 6 (676) (430)
Profit (loss) after taxation from
continuing operations 120 1,524
Loss for the period from discontinued
operations 7 (1) (1)
Profit (loss) for the period 119 1,523
Allocated as follows:
Equity shareholders of parent 69 1,470
Minority interest 50 54
119 1,523
Basic earnings (loss) per ordinary share
(cents)
Profit (loss) from continuing operations a 25 533
Loss from discontinued operations a - -
Profit (loss) 25 533
Diluted earnings (loss) per ordinary
share (cents)
Profit (loss) from continuing operations b 25 533
Loss from discontinued operations b - -
Profit (loss) c 25 533
Dividends d
- Rm
- cents per Ordinary share
Quarter Year Year
ended ended ended
December December December
2005 2006 2005
Restated Restated
SA Rand million Unaudited Unaudited Unaudited
Revenue 4,478 21,104 17,388
Gold income 4,337 20,137 16,750
Cost of sales (3,918) (15,482) (14,702)
Non-hedge derivative gain (loss) (748) (1,955) (949)
Gross profit (loss) (329) 2,700 1,099
Corporate administration and other
expenses (99) (567) (410)
Market development costs (21) (108) (84)
Exploration costs (69) (417) (288)
Other operating expenses (33) (129) (127)
Operating special items (416) (130) (499)
Operating profit (loss) (967) 1,349 (309)
Interest receivable 28 218 155
Exchange (loss) gain (36) (17) (29)
Fair value adjustment on option
component of convertible bond (271) 137 (211)
Finance costs (216) (822) (690)
Fair value loss on interest rate swaps - - (5)
Share of associates` profit (loss) (15) (6) (17)
Profit (loss) before taxation (1,476) 859 (1,106)
Taxation 105 (1,232) 216
Profit (loss) after taxation from
continuing operations (1,371) (373) (890)
Loss for the period from discontinued
operations (56) (12) (219)
Profit (loss) for the period (1,427) (385) (1,109)
Allocated as follows:
Equity shareholders of parent (1,456) (587) (1,255)
Minority interest 29 202 146
(1,427) (385) (1,109)
Basic earnings (loss) per ordinary
share (cents)
Profit (loss) from continuing
operations a (529) (211) (391)
Loss from discontinued operations a (21) (4) (83)
Profit (loss) (550) (215) (474)
Diluted earnings (loss) per ordinary
share (cents)
Profit (loss) from continuing
operations b (529) (211) (391)
Loss from discontinued operations b (21) (4) (83)
Profit (loss) c (550) (215) (474)
Dividends d
- Rm 1,246 614
- cents per Ordinary share 450 232
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 an indicative amount only.
Rounding of figures may results in computational discrepancies.
Group income statement
Quarter Quarter
ended ended
December September
2006 2006
US Dollar million Notes Unaudited Unaudited
Revenue 2 818 798
Gold income 770 763
Cost of sales 3 (612) (557)
Non-hedge derivative (loss) gain (25) 143
Gross profit (loss) 133 349
Corporate administration and other
expenses (24) (18)
Market development costs (4) (4)
Exploration costs (16) (16)
Other operating expenses 4 (4) (5)
Operating special items 5 (14) (7)
Operating profit (loss) 71 300
Interest receivable 10 8
Exchange (loss) gain (2) 1
Fair value adjustment on option component
of convertible bond (28) 58
Finance costs (34) (22)
Fair value loss on interest rate swaps - -
Share of associates` loss - -
Profit (loss) before taxation 17 344
Taxation 6 (82) (69)
(Loss) profit after taxation from
continuing operations (65) 276
Loss for the period from discontinued
operations 7 - -
(Loss) profit for the period (65) 276
Allocated as follows:
Equity shareholders of parent (72) 268
Minority interest 7 8
(65) 276
Basic (loss) earnings per ordinary share
(cents)
(Loss) profit from continuing operations a (26) 97
Loss from discontinued operations a - -
(Loss) profit (26) 97
Diluted (loss) earnings per ordinary
share (cents)
(Loss) profit from continuing operations b (26) 97
Loss from discontinued operations b - -
(Loss) profit c (26) 97
Dividends d
- $m
- cents per Ordinary share
Quarter Year Year
ended ended ended
December December December
2005 2006 2005
Restated Restated
US Dollar million Unaudited Unaudited Unaudited
Revenue 687 3,106 2,730
Gold income 665 2,964 2,629
Cost of sales (600) (2,282) (2,309)
Non-hedge derivative (loss) gain (120) (239) (135)
Gross profit (loss) (55) 443 185
Corporate administration and other
expenses (15) (84) (64)
Market development costs (3) (16) (13)
Exploration costs (11) (61) (45)
Other operating expenses (6) (18) (20)
Operating special items (64) (18) (77)
Operating profit (loss) (153) 246 (34)
Interest receivable 4 32 25
Exchange (loss) gain (5) (2) (5)
Fair value adjustment on option
component of convertible bond (42) 16 (32)
Finance costs (33) (123) (108)
Fair value loss on interest rate swaps - - (1)
Share of associates` loss (2) (1) (3)
Profit (loss) before taxation (231) 168 (158)
Taxation 18 (180) 35
(Loss) profit after taxation from
continuing operations (213) (12) (123)
Loss for the period from discontinued
operations (9) (2) (36)
(Loss) profit for the period (222) (14) (159)
Allocated as follows:
Equity shareholders of parent (226) (44) (182)
Minority interest 5 30 23
(222) (14) (159)
Basic (loss) earnings per ordinary
share (cents)
(Loss) profit from continuing
operations a (82) (14) (55)
Loss from discontinued operations a (3) (1) (14)
(Loss) profit (85) (16) (69)
Diluted (loss) earnings per ordinary
share (cents)
(Loss) profit from continuing
operations b (82) (14) (55)
Loss from discontinued operations b (3) (1) (14)
(Loss) profit c (85) (16) (69)
Dividends d
- $m 173 106
- cents per Ordinary share 62 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. The current
period is an indicative amount only.
Rounding of figures may results in computational discrepancies.
Group balance sheet
As at As at As at
December September December
2006 2006 2005
Restated
SA Rand million Notes Unaudited Unaudited Unaudited
ASSETS
Non-current assets
Tangible assets 42,382 44,458 37,487
Intangible assets 2,909 3,137 2,533
Investments in associates 300 327 223
Other investments 884 846 645
Inventories 2,006 1,991 1,182
Trade and other receivables 405 120 124
Derivatives 45 48 243
Deferred taxation 432 419 279
Other non-current assets 313 95 101
49,676 51,440 42,817
Current assets
Inventories 3,425 3,592 2,442
Trade and other receivables 1,318 1,783 1,553
Derivatives 4,546 5,548 4,280
Current portion of other
non-current assets 5 5 43
Cash restricted for use 75 46 52
Cash and cash equivalents 3,467 2,871 1,328
12,836 13,845 9,698
Non-current assets held for
sale 123 225 100
12,959 14,070 9,798
TOTAL ASSETS 62,635 65,510 52,615
EQUITY AND LIABILITIES
Share capital and premium 10 22,083 22,077 19,047
Retained earnings and other
reserves 11 (1,188) 37 (2,539)
Shareholders` equity 20,895 22,114 16,508
Minority interests 12 436 478 374
Total equity 21,331 22,592 16,882
Non-current liabilities
Borrowings 9,963 10,497 10,825
Environmental
rehabilitation and other
provisions 2,785 2,671 2,265
Provision for pension and
post-retirement benefits 1,181 1,267 1,249
Trade, other payables and
deferred income 150 104 87
Derivatives 2,199 2,592 2,460
Deferred taxation 7,722 7,615 7,320
24,000 24,746 24,206
Current liabilities
Current portion of
borrowings 413 290 1,190
Trade, other payables and
deferred income 3,720 3,461 2,813
Derivatives 11,937 12,794 6,814
Taxation 1,234 1,532 710
17,304 18,077 11,527
Non-current liabilities
held for sale - 95 -
17,304 18,172 11,527
Total liabilities 41,304 42,918 35,733
TOTAL EQUITY AND LIABILITIES 62,635 65,510 52,615
Net asset value - cents per
share 7,607 8,208 6,372
Rounding of figures may results in computational discrepancies.
Group balance sheet
As at As at As at
December September December
2006 2006 2005
Restated
US Dollar million Notes Unaudited Unaudited Unaudited
ASSETS
Non-current assets
Tangible assets 6,054 5,726 5,908
Intangible assets 415 404 399
Investments in associates 43 42 35
Other investments 126 109 102
Inventories 287 256 186
Trade and other receivables 58 15 20
Derivatives 6 6 38
Deferred taxation 62 54 44
Other non-current assets 44 12 16
7,095 6,626 6,748
Current assets
Inventories 489 463 385
Trade and other receivables 188 230 245
Derivatives 649 714 675
Current portion of other
non-current assets 1 1 7
Cash restricted for use 11 6 8
Cash and cash equivalents 495 370 209
1,833 1,783 1,529
Non-current assets held for
sale 18 29 16
1,851 1,812 1,545
TOTAL ASSETS 8,946 8,438 8,293
EQUITY AND LIABILITIES
Share capital and premium 10 3,154 2,844 3,002
Retained earnings and other
reserves 11 (169) 5 (399)
Shareholders` equity 2,985 2,848 2,603
Minority interests 12 62 62 59
Total equity 3,047 2,910 2,662
Non-current liabilities
Borrowings 1,423 1,352 1,706
Environmental
rehabilitation and other
provisions 398 344 356
Provision for pension and
post-retirement benefits 169 163 197
Trade, other payables and
deferred income 21 13 14
Derivatives 314 334 388
Deferred taxation 1,103 981 1,154
3,428 3,187 3,815
Current liabilities
Current portion of
borrowings 59 37 188
Trade, other payables and
deferred income 531 446 442
Derivatives 1,705 1,648 1,074
Taxation 176 197 112
2,471 2,328 1,816
Non-current liabilities
held for sale - 12 -
2,471 2,341 1,816
Total liabilities 5,899 5,528 5,631
TOTAL EQUITY AND LIABILITIES 8,946 8,438 8,293
Net asset value - cents per
share 1,087 1,057 1,005
Rounding of figures may results in computational discrepancies.
Group cash flow statement
Quarter Quarter Quarter
ended ended ended
December September December
2006 2006 2005
Restated
SA Rand million Unaudited Unaudited Unaudited
Cash flow from operating activities
Receipts from customers 5,906 5,681 4,818
Payments to suppliers and employees (3,283) (3,181) (3,628)
Cash generated from operations 2,623 2,500 1,190
Cash generated (utilised) by
discontinued operations 7 (16) (23)
Taxation paid (553) (146) (48)
Net cash inflow from operating
activities 2,077 2,338 1,118
Cash flows from investing activities
Capital expenditure (1,861) (1,542) (1,283)
Proceeds from disposal of tangible
assets 322 6 29
Proceeds on disposal of discontinued
assets 23 7 18
Other investments acquired (22) (406) (67)
Associate loans and acquisitions (2) (3) (1)
Proceeds from disposal of investments 2 409 6
Cash restricted for use (54) (20) 33
Interest received 55 56 20
Loans advanced (5) - (2)
Repayment of loans advanced 2 8 23
Utilised in hedge restructure - - -
Net cash outflow from investing
activities (1,539) (1,485) (1,223)
Cash flows from financing activities
Proceeds from issue of share capital 7 12 25
Share issue expenses - - -
Proceeds from borrowings 619 496 154
Repayment of borrowings (321) (294) (141)
Finance costs (82) (169) (45)
Dividends paid (55) (606) (26)
Net cash inflow (outflow) from
financing activities 168 (560) (32)
Net increase (decrease) in cash and
cash equivalents 706 294 (137)
Translation (109) 127 (4)
Cash and cash equivalents at
beginning of period 2,871 2,450 1,469
Net cash and cash equivalents at end
of period 3,467 2,871 1,328
Cash generated from operations
Profit (loss) before taxation 797 1,955 (1,476)
Adjusted for:
Movement on non-hedge derivatives 304 120 1,257
Amortisation of tangible assets 1,215 1,034 900
Amortisation of intangible assets 4 4 3
Deferred stripping (34) (262) (140)
Interest receivable (69) (60) (28)
Operating special items 98 56 416
Finance costs 246 157 216
Fair value adjustment on option
components of convertible bond 210 (421) 271
Environmental, rehabilitation and
other expenditure (133) (26) 159
Termination of employee benefit plans - - -
Other non-cash movements 115 153 (140)
Movement in working capital (130) (210) (248)
2,623 2,500 1,190
Movement in working capital
Decrease (increase) in inventories 156 (842) (186)
Decrease (increase) in trade and
other receivables 162 (199) (66)
(Decrease) increase in trade and
other payables (448) 831 5
(130) (210) (248)
Year Year
ended ended
December December
2006 2005
Restated
SA Rand million Unaudited Unaudited
Cash flow from operating activities
Receipts from customers 21,228 17,175
Payments to suppliers and employees (12,424) (12,907)
Cash generated from operations 8,804 4,268
Cash generated (utilised) by discontinued operations (6) (188)
Taxation paid (968) (188)
Net cash inflow from operating activities 7,830 3,892
Cash flows from investing activities
Capital expenditure (5,533) (4,600)
Proceeds from disposal of tangible assets 393 53
Proceeds on disposal of discontinued assets 63 27
Other investments acquired (446) (83)
Associate loans and acquisitions (68) (93)
Proceeds from disposal of investments 449 7
Cash restricted for use (44) 112
Interest received 173 113
Loans advanced (5) (45)
Repayment of loans advanced 38 38
Utilised in hedge restructure - (415)
Net cash outflow from investing activities (4,980) (4,886)
Cash flows from financing activities
Proceeds from issue of share capital 3,068 60
Share issue expenses (32) -
Proceeds from borrowings 1,525 4,194
Repayment of borrowings (3,957) (2,183)
Finance costs (586) (471)
Dividends paid (913) (1,051)
Net cash inflow (outflow) from financing activities (895) 549
Net increase (decrease) in cash and cash equivalents 1,955 (445)
Translation 184 143
Cash and cash equivalents at beginning of period 1,328 1,630
Net cash and cash equivalents at end of period 3,467 1,328
Cash generated from operations
Profit (loss) before taxation 859 (1,106)
Adjusted for:
Movement on non-hedge derivatives 4,590 1,744
Amortisation of tangible assets 4,059 3,203
Amortisation of intangible assets 13 13
Deferred stripping (528) (153)
Interest receivable (218) (155)
Operating special items 158 444
Finance costs 822 690
Fair value adjustment on option components of
convertible bond (137) 211
Environmental, rehabilitation and other expenditure (160) 265
Termination of employee benefit plans - (61)
Other non-cash movements 221 (113)
Movement in working capital (875) (714)
8,804 4,268
Movement in working capital
Decrease (increase) in inventories (1,852) (1,086)
Decrease (increase) in trade and other receivables (46) (46)
(Decrease) increase in trade and other payables 1,023 418
(875) (714)
Rounding of figures may results in computational discrepancies.
Group cash flow statement
Quarter Quarter Quarter
ended ended ended
December September December
2006 2006 2005
Restated
US Dollar million Unaudited Unaudited Unaudited
Cash flow from operating activities
Receipts from customers 804 798 741
Payments to suppliers and employees (449) (452) (559)
Cash generated from operations 355 346 182
Cash generated (utilised) by
discontinued operations 1 (2) (4)
Taxation paid (80) (20) (7)
Net cash inflow from operating
activities 276 324 171
Cash flows from investing activities
Capital expenditure (260) (220) (197)
Proceeds from disposal of tangible
assets 46 1 6
Proceeds on disposal of discontinued
assets 3 1 3
Other investments acquired (4) (62) (10)
Associate loans and acquisitions - - -
Proceeds from disposal of investments - 62 -
Cash restricted for use (8) (3) 5
Interest received 7 7 3
Loans advanced (1) - -
Repayment of loans advanced - 1 4
Utilised in hedge restructure - - -
Net cash outflow from investing
activities (217) (213) (186)
Cash flows from financing activities
Proceeds from issue of share capital 1 2 4
Share issue expenses - - -
Proceeds from borrowings 86 75 19
Repayment of borrowings (29) (41) (19)
Finance costs (10) (24) (6)
Dividends paid (8) (85) (4)
Net cash inflow (outflow) from
financing activities 40 (73) (7)
Net increase (decrease) in cash and
cash equivalents 99 38 (22)
Translation 26 (11) -
Cash and cash equivalents at
beginning of period 370 343 231
Net cash and cash equivalents at end
of period 495 370 209
Cash generated from operations
Profit (loss) profit before taxation 17 344 (231)
Adjusted for:
Movement on non-hedge derivatives 134 (54) 199
Amortisation of tangible assets 167 144 138
Amortisation of intangible assets - - -
Deferred stripping (12) (31) (22)
Interest receivable (10) (8) (4)
Operating special items 14 7 64
Finance costs 34 22 33
Fair value adjustment on option
components of convertible bond 28 (58) 42
Environmental, rehabilitation and
other expenditure (18) (3) 24
Termination of employee benefit plans - - -
Other non-cash movements 17 21 (24)
Movement in working capital (16) (38) (37)
355 346 182
Movement in working capital
Increase in inventories (57) (55) (31)
(Increase) decrease in trade and
other receivables (2) (8) (11)
Increase (decrease) in trade and
other payables 42 25 5
(16) (38) (37)
Year Year
ended ended
December December
2006 2005
Restated
US Dollar million Unaudited Unaudited
Cash flow from operating activities
Receipts from customers 3,132 2,707
Payments to suppliers and employees (1,850) (2,034)
Cash generated from operations 1,282 673
Cash generated (utilised) by discontinued operations (1) (31)
Taxation paid (143) (30)
Net cash inflow from operating activities 1,138 612
Cash flows from investing activities
Capital expenditure (817) (722)
Proceeds from disposal of tangible assets 57 8
Proceeds on disposal of discontinued assets 9 4
Other investments acquired (68) (12)
Associate loans and acquisitions (10) (15)
Proceeds from disposal of investments 66 1
Cash restricted for use (6) 17
Interest received 25 18
Loans advanced (1) (7)
Repayment of loans advanced 6 6
Utilised in hedge restructure - (69)
Net cash outflow from investing activities (739) (771)
Cash flows from financing activities
Proceeds from issue of share capital 512 9
Share issue expenses (5) -
Proceeds from borrowings 226 659
Repayment of borrowings (623) (343)
Finance costs (87) (74)
Dividends paid (133) (169)
Net cash inflow (outflow) from financing activities (110) 82
Net increase (decrease) in cash and cash equivalents 289 (77)
Translation (3) (3)
Cash and cash equivalents at beginning of period 209 289
Net cash and cash equivalents at end of period 495 209
Cash generated from operations
Profit (loss) profit before taxation 168 (158)
Adjusted for:
Movement on non-hedge derivatives 627 262
Amortisation of tangible assets 597 503
Amortisation of intangible assets 2 2
Deferred stripping (75) (24)
Interest receivable (32) (25)
Operating special items 22 68
Finance costs 123 108
Fair value adjustment on option components of
convertible bond (16) 32
Environmental, rehabilitation and other expenditure (22) 41
Termination of employee benefit plans - (10)
Other non-cash movements 27 (18)
Movement in working capital (140) (108)
1,281 673
Movement in working capital
Increase in inventories (211) (123)
(Increase) decrease in trade and other receivables 16 23
Increase (decrease) in trade and other payables 55 (8)
(140) (108)
Rounding of figures may results in computational discrepancies.
Statement of recognised income and expense
Year Year
ended ended
December December
2006 2005
Restated
Unaudited Audited
SA Rand million
Actuarial gains (losses) on pension and
post-retirement benefits 283 (173)
Net loss on cash flow hedges removed from
equity and reported in income 1,274 391
Net loss on cash flow hedges (1,604) (1,281)
Gain on available-for-sale financial assets 78 16
Deferred taxation on items above 50 446
Net exchange translation differences 2,292 1,534
Net income recognised directly in equity 2,373 933
Loss for the year (385) (1,109)
Total recognised income (expense) for the
year 1,988 (176)
Attributable to:
Equity shareholders of the parent 1,755 (348)
Minority interest 233 172
1,988 (176)
US Dollar million
Actuarial gains (losses) on pension and
post-retirement benefits 42 (27)
Net loss on cash flow hedges removed from
equity and reported in income 217 18
Net loss on cash flow hedges (229) (202)
Gain on available-for-sale financial assets 12 2
Deferred taxation on items above 8 69
Net exchange translation differences 281 294
Net income recognised directly in equity 331 154
Loss for the year (14) (159)
Total recognised income (expense) for the
year 317 (5)
Attributable to:
Equity shareholders of the parent 289 (26)
Minority interest 28 21
317 (5)
Rounding of figures may results in computational discrepancies.
Notes
for the quarter and year ended 31 December 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 year ended 31 December 2006.
As part of the year-end process and in compliance with disclosures for the
year ended 31 December 2006, certain amounts have been reclassified to agree
with current disclosures. Full details of all changes will be presented in
the 2006 annual report which is expected to be distributed to shareholders
during March 2007.
2. Revenue
Quarter ended
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited Unaudited
SA Rand million
Gold income 5,634 5,459 4,337
By-products and other
revenue (note 3) 272 188 112
Interest receivable 69 60 28
5,975 5,707 4,478
Year ended
Dec Dec
2006 2005
Restated
Unaudited Unaudited
SA Rand million
Gold income 20,137 16,750
By-products and other
revenue (note 3) 749 483
Interest receivable 218 155
21,104 17,388
Quarter ended
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited Unaudited
US Dollar million
Gold income 770 763 665
By-products and other
revenue (note 3) 38 26 17
Interest receivable 10 8 4
818 798 687
Year ended
Dec Dec
2006 2005
US Dollar million
Restated
Unaudited Unaudited
Gold income 2,964 2,629
By-products and other
revenue (note 3) 110 76
Interest receivable 32 25
3,106 2,730
3. Cost of sales
Quarter ended
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited Unaudited
SA Rand million
Cash operating costs 3,403 3,095 2,777
By-products and other
revenue (note 2) (272) (188) (112)
3,131 2,907 2,665
Other cash costs 172 167 116
Total cash costs 3,303 3,075 2,781
Retrenchment costs 114 14 62
Rehabilitation & other
non-cash costs (122) 23 207
Production costs 3,295 3,111 3,050
Amortisation of tangible
assets 1,215 1,034 900
Amortisation of
intangible assets 4 4 3
Total production costs 4,514 4,148 3,954
Inventory change (37) (161) (35)
4,477 3,987 3,918
Year ended
Dec Dec
2006 2005
Restated
Unaudited Unaudited
SA Rand million
Cash operating costs 11,944 11,300
By-products and other
revenue (note 2) (749) (483)
11,245 10,817
Other cash costs 594 412
Total cash costs 11,839 11,229
Retrenchment costs 152 168
Rehabilitation & other
non-cash costs (35) 368
Production costs 11,956 11,765
Amortisation of tangible
assets 4,059 3,203
Amortisation of
intangible assets 13 13
Total production costs 16,028 14,981
Inventory change (546) (279)
15,482 14,702
Quarter ended
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited Unaudited
US Dollar million
Cash operating costs 466 432 425
By-products and other
revenue (note 2) (38) (26) (17)
428 406 408
Other cash costs 24 23 18
Total cash costs 452 429 426
Retrenchment costs 16 2 9
Rehabilitation & other
non-cash costs (17) 3 31
Production costs 451 434 467
Amortisation of tangible
assets 167 144 138
Amortisation of
intangible assets - - -
Total production costs 618 579 606
Inventory change (6) (22) (5)
612 557 600
Year ended
Dec Dec
2006 2005
Restated
Unaudited Unaudited
US Dollar million
Cash operating costs 1,770 1,777
By-products and other
revenue (note 2) (110) (76)
1,660 1,701
Other cash costs 86 65
Total cash costs 1,746 1,766
Retrenchment costs 22 26
Rehabilitation & other
non-cash costs (3) 57
Production costs 1,765 1,849
Amortisation of tangible
assets 597 503
Amortisation of
intangible assets 2 2
Total production costs 2,364 2,354
Inventory change (82) (45)
2,282 2,309
Rounding of figures may result in computational discrepancies.
4. Other operating expenses
Quarter ended
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited Unaudited
SA Rand million
Pension and medical defined
benefit provisions 1 (20) 3
Claims filed by former
employees in respect of
loss of employment, work
related accident injuries
and diseases, govern-
mental fiscal claims and
costs of old tailings
operations (30) (14) (36)
Other 3 - -
(26) (34) (33)
Year ended
Dec Dec
2006 2005
Restated
Unaudited Unaudited
SA Rand million
Pension and medical defined
benefit provisions (57) (56)
Claims filed by former
employees in respect of
loss of employment, work
related accident injuries
and diseases, govern-
mental fiscal claims and
costs of old tailings
operations (67) (71)
Other (5) -
(129) (127)
Quarter ended
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited Unaudited
US Dollar million
Pension and medical defined
benefit provisions - (3) -
Claims filed by former
employees in respect of
loss of employment, work
related accident injuries
and diseases, govern-
mental fiscal claims and
costs of old tailings
operations (4) (2) (6)
Other - - -
(4) (5) (6)
Year ended
Dec Dec
2006 2005
Restated
Unaudited Unaudited
US Dollar million
Pension and medical defined
benefit provisions (8) (9)
Claims filed by former
employees in respect of
loss of employment, work
related accident injuries
and diseases, govern-
mental fiscal claims and
costs of old tailings
operations (9) (11)
Other (1) -
(18) (20)
5. Operating special items
Quarter ended
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited Unaudited
SA Rand million
Under provision of indirect
taxes (118) (59) (27)
Performance related option
expense (129) - -
Cost of E-shares issued to
Izingwe Holdings (Pty) Ltd,
a Black Economic
Empowerment company (131) - -
Impairment of tangible
assets (41) - (255)
Profit on disposal of assets
(note 8) 321 3 22
Abandonment of assets at
Malian operations - - (31)
Impairment of intangible
assets - - (125)
Contract termination fee at
Geita - - -
(98) (56) (416)
Year ended
Dec Dec
2006 2005
Restated
Unaudited Unaudited
SA Rand million
Under provision of indirect
taxes (202) (27)
Performance related option
expense (129) -
Cost of E-shares issued to
Izingwe Holdings (Pty) Ltd,
a Black Economic
Empowerment company (131) -
Impairment of tangible
assets (44) (300)
Profit on disposal of assets
(note 8) 376 39
Abandonment of assets at
Malian operations - (31)
Impairment of intangible
assets - (125)
Contract termination fee at
Geita - (55)
(130) (499)
Quarter ended
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited Unaudited
US Dollar million
Under provision of indirect
taxes (16) (8) (4)
Performance related option
expense (19) - -
Cost of E-shares issued to
Izingwe Holdings (Pty) Ltd,
a Black Economic
Empowerment company (19) - -
Impairment of tangible
assets (6) - (38)
Profit on disposal of assets
(note 8) 46 1 3
Abandonment of assets at
Malian operations - - (5)
Impairment of intangible
assets - - (20)
Contract termination fee at
Geita - - -
(14) (7) (64)
Year ended
Dec Dec
2006 2005
Restated
Unaudited Unaudited
US Dollar million
Under provision of indirect
taxes (28) (4)
Performance related option
expense (19) -
Cost of E-shares issued to
Izingwe Holdings (Pty) Ltd,
a Black Economic
Empowerment company (19) -
Impairment of tangible
assets (6) (44)
Profit on disposal of assets
(note 8) 54 5
Abandonment of assets at
Malian operations - (5)
Impairment of intangible
assets - (20)
Contract termination fee at
Geita - (9)
(18) (77)
Rounding of figures may result in computational discrepancies.
6. Taxation
Quarter ended
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited Unaudited
SA Rand million
Current tax
Normal taxation (261) (520) (117)
Disposal of tangible
assets (note 8) (2) (3) (4)
Under provision prior year (49) - (347)
(312) (523) (468)
Deferred taxation
Temporary differences (76) 15 -
Impairment and disposal
of tangible assets (note 8) (57) - 64
Change in estimated
deferred taxation (268) - 74
Contract termination fee - - -
at Geita
Change in statutory tax
rate - - 302
Unrealised non-hedge
derivatives 37 77 133
(364) 92 573
Total taxation (676) (430) 105
Year ended
Dec Dec
2006 2005
Restated
Unaudited Unaudited
SA Rand million
Current tax
Normal taxation (1,370) (182)
Disposal of tangible
assets (note 8) (13) (2)
Under provision prior year (49) (347)
(1,432) (531)
Deferred taxation
Temporary differences (215) (248)
Impairment and disposal
of tangible assets (note 8) (56) 79
Change in estimated
deferred taxation (271) 74
Contract termination fee - 19
at Geita
Change in statutory tax
rate - 695
Unrealised non-hedge
derivatives 742 128
200 747
Total taxation (1,232) 216
Quarter ended
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited Unaudited
US Dollar million
Current tax
Normal taxation (37) (72) (18)
Disposal of tangible
assets (note 8) - (1) (1)
Under provision prior year (7) - (52)
(44) (73) (71)
Deferred taxation
Temporary differences (7) 1 (1)
Impairment and disposal
of tangible assets (note 8) (8) - 9
Change in estimated
deferred taxation (38) - 12
Contract termination fee - - -
at Geita
Change in statutory tax
rate - - 48
Unrealised non-hedge
derivatives 15 3 21
(38) 4 89
Total taxation (82) (69) 18
Year ended
Dec Dec
2006 2005
Restated
Unaudited Unaudited
US Dollar million
Current tax
Normal taxation (201) (29)
Disposal of tangible
assets (note 8) (2) -
Under provision prior year (7) (53)
(210) (82)
Deferred taxation
Temporary differences (30) (36)
Impairment and disposal
of tangible assets (note 8) (8) 12
Change in estimated
deferred taxation (38) 12
Contract termination fee - 3
at Geita
Change in statutory tax
rate - 107
Unrealised non-hedge
derivatives 106 21
30 117
Total taxation (180) 35
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
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited Unaudited
SA Rand million
Gold income 6 3 12
Retrenchment, rehabilitation
and other costs (19) (6) (7)
Gross loss (profit) (13) (3) 5
Impairment loss reversed - - -
Loss (profit) before taxation
from discontinued
operations (13) (3) 5
Taxation 12 2 (61)
Net loss attributable to
discontinued operations (1) (1) (56)
Year ended
Dec Dec
2006 2005
Restated
Unaudited Unaudited
SA Rand million
Gold income 26 111
Retrenchment, rehabilitation
and other costs (39) (418)
Gross loss (profit) (13) (307)
Impairment loss reversed - 115
Loss (profit) before taxation
from discontinued
operations (13) (192)
Taxation 1 (27)
Net loss attributable to
discontinued operations (12) (219)
Quarter ended
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited Unaudited
US Dollar million
Gold income 1 - 2
Retrenchment,
rehabilitation
and other costs (3) (1) (1)
Gross loss (profit) (2) - 1
Impairment loss reversed - - -
Loss (profit) before
taxation
from discontinued
operations (2) - 1
Taxation 2 - (9)
Net loss attributable to
discontinued operations - - (9)
Year ended
Dec Dec
2006 2005
Restated
Unaudited Unaudited
US Dollar million
Gold income 4 18
Retrenchment, rehabilitation
and other costs (6) (66)
Gross loss (profit) (2) (48)
Impairment loss reversed - 17
Loss (profit) before taxation
from discontinued
operations (2) (31)
Taxation - (5)
Net loss attributable to
discontinued operations (2) (36)
Rounding of figures may result in computational discrepancies.
8. Headline earnings (loss)
Quarter ended
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited Unaudited
SA Rand million
The profit (loss) attributable
to equity shareholders has
been adjusted by the
following to arrive at
headline (loss) earnings:
Profit (loss) attributable to
equity shareholders 69 1,470 (1,456)
Impairment of tangible
assets (note 5) 41 - 255
Impairment of intangible
assets (note 5) - - 125
(Profit) loss on disposal of
assets (note 5) (321) (3) (22)
Impairment of associate - - 11
Taxation on items above -
current portion 2 4 4
Taxation on items above -
deferred portion (note 6) 57 - (64)
Net loss from discontinued
operations (note 7) 1 1 56
Headline (loss) earnings (150) 1,471 (1,091)
Cents per share (1)
Headline (loss) earnings (54) 534 (412)
Year ended
Dec Dec
2006 2005
Restated
Unaudited Unaudited
SA Rand million
The profit (loss) attributable
to equity shareholders has
been adjusted by the
following to arrive at
headline (loss) earnings:
Profit (loss) attributable to
equity shareholders (587) (1,255)
Impairment of tangible
assets (note 5) 44 300
Impairment of intangible
assets (note 5) - 125
(Profit) loss on disposal of
assets (note 5) (376) (39)
Impairment of associate - 11
Taxation on items above -
current portion 13 2
Taxation on items above -
deferred portion (note 6) 56 (79)
Net loss from discontinued
operations (note 7) 12 219
Headline (loss) earnings (838) (716)
Cents per share (1)
Headline (loss) earnings (307) (271)
Quarter ended
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited Unaudited
US Dollar million
The profit (loss) attributable
to equity shareholders has
been adjusted by the
following to arrive at
headline (loss) earnings:
Profit (loss) attributable to
equity shareholders (72) 268 (226)
Impairment of tangible
assets (note 5) 6 - 38
Impairment of intangible
assets (note 5) - - 20
(Profit) loss on disposal of
assets (note 5) (46) (1) (3)
Impairment of associate - - 2
Taxation on items above -
current portion - 1 1
Taxation on items above -
deferred portion (note 6) 8 - (9)
Net loss from discontinued
operations (note 7) - - 9
Headline (loss) earnings (103) 268 (170)
Cents per share (1)
Headline (loss) earnings (37) 97 (64)
Year ended
Dec Dec
2006 2005
Restated
Unaudited Unaudited
US Dollar million
The profit (loss) attributable
to equity shareholders has
been adjusted by the
following to arrive at
headline (loss) earnings:
Profit (loss) attributable to
equity shareholders (44) (182)
Impairment of tangible
assets (note 5) 6 44
Impairment of intangible
assets (note 5) - 20
(Profit) loss on disposal of
assets (note 5) (54) (5)
Impairment of associate - 2
Taxation on items above -
current portion 2 -
Taxation on items above -
deferred portion (note 6) 8 (12)
Net loss from discontinued
operations (note 7) 2 36
Headline (loss) earnings (80) (97)
Cents per share (1)
Headline (loss) earnings (29) (37)
(1) Calculated on the basic weighted average number of ordinary shares.
9. Shares
Quarter ended
Dec Sept Dec
2006 2006 2005
Authorised:
Ordinary shares of 25 SA cents
each 400,000,000 400,000,000 400,000,000
E ordinary shares of 25 SA
cents each 4,280,000 - -
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 276,236,153 275,258,118 264,938,432
E ordinary shares in issue 4,185,770 - -
Total ordinary shares: 280,421,923 275,258,118 264,938,432
A redeemable preference shares 2,000,000 2,000,000 2,000,000
B redeemable preference shares 778,896 778,896 778,896
In calculating the diluted
number of ordinary shares
outstanding
for the year, the following
were taken into consideration:
Ordinary shares 275,394,961 275,225,150 264,293,098
E Ordinary shares 773,762 - -
Time related options 304,280 281,656 537,379
Bonus Share Plan 203,495 164,406 21,039
Basic ordinary shares 276,676,498 275,671,212 264,851,516
Dilutive potential of share
options - 124,674 565,436
Diluted number of ordinary
shares (1) 276,676,498 275,795,886 265,416,952
Year ended
Dec Dec
2006 2005
Authorised:
Ordinary shares of 25 SA cents each 400,000,000 400,000,000
E ordinary shares of 25 SA cents each 4,280,000 -
A redeemable preference shares of 50 SA cents
each 2,000,000 2,000,000
B redeemable preference shares of 1 SA cent each 5,000,000 5,000,000
Issued and fully-paid:
Ordinary shares in issue 276,236,153 264,938,432
E ordinary shares in issue 4,185,770 -
Total ordinary shares: 280,421,923 264,938,432
A redeemable preference shares 2,000,000 2,000,000
B redeemable preference shares 778,896 778,896
In calculating the diluted number of ordinary
shares outstanding
for the year, the following were taken into
consideration:
Ordinary shares 272,214,937 264,052,904
E Ordinary shares 194,954 -
Time related options 398,326 522,298
Bonus Share Plan 199,390 60,432
Basic ordinary shares 273,007,607 264,635,634
Dilutive potential of share options - -
Diluted number of ordinary shares (1) 273,007,607 265,236,949
(1) The Basic and diluted number of ordinary shares are the same for
December 2006 quarter and the year 2006 as the effects of shares for
performance related options are anti-dilutive.
Rounding of figures may result in computational discrepancies.
On 11 December 2006, shareholders approved the creation of E ordinary shares
and the implementation of an Employee Share Ownership Plan and Black
Economic Empowerment transaction ("BEE transaction").
During the quarter 49,445 ordinary shares were allotted in terms of the
AngloGold Share Incentive Scheme and 928,590 ordinary shares were allotted
to The Bokamoso ESOP Trust in terms of the BEE transaction. In addition,
2,785,770 E ordinary shares were issued to The Bokamoso ESOP and 1,400,000 E
ordinary shares were issued to Izingwe Holdings (Proprietary) Limited in
terms of the BEE transaction.
10. Ordinary share capital and premium
As at
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited
SA Rand million
Balance at beginning of period 19,360 19,360 19,300
Ordinary shares issued 3,331 3,030 60
E ordinary shares issued 353 - -
Translation - - -
Sub-total 23,046 22,390 19,360
Redeemable preference shares held within
the group (313) (313) (313)
Ordinary shares held within the group (297) - -
E Ordinary shares held within the group (353) - -
Balance at end of period 22,083 22,077 19,047
As at
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited
US Dollar million
Balance at beginning of period 3,055 3,055 3,415
Ordinary shares issued 550 506 9
E ordinary shares issued 50 - -
Translation (363) (677) (369)
Sub-total 3,292 2,884 3,055
Redeemable preference shares held within
the group (45) (40) (53)
Ordinary shares held within the group (43) - -
E Ordinary shares held within the group (50) - -
Balance at end of period 3,154 2,844 3,002
11. Retained earnings and other reserves
Foreign
Non- currency
Retained distributable translation
Earnings reserves reserve
SA Rand million
Balance at December 2004 as
previously reported 3,379 138 (3,552)
Change in comparative data
(note 19) (83)
As restated 3,296 138 (3,552)
Actuarial losses recognised
Deferred taxation thereon
Loss attributable to equity
shareholders (1,255)
Dividends (926)
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
Deferred taxation on
available-for-sale financial
assets
Share-based payment expense
Translation 1,642
Balance at December 2005 1,115 138 (1,910)
Actuarial gains recognised
Deferred taxation thereon
Loss attributable to equity
shareholders (587)
Dividends (742)
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
Deferred taxation
available-for-sale financial
assets
Share-based payment expense
Translation 2,346
Balance at December 2006 (214) 138 436
Other
Actuarial Comprehen-
gains sive
(losses) income Total
SA Rand million
Balance at December 2004 as
previouslyreported (122) (1,040) (1,197)
Change in comparative data
(note 19) (83)
As restated (122) (1,040) (1,280)
Actuarial losses recognised (173) (173)
Deferred taxation thereon 68 68
Loss attributable to equity
shareholders (1,255)
Dividends (926)
Net loss on cash flow hedges
removed from
equity and reported in income 387 387
Net loss on cash flow hedges (1,272) (1,272)
Deferred taxation on cash flow
hedges 377 377
Gain on available-for-sale
financial assets 16 16
Deferred taxation on
available-for-sale financial
assets 1 1
Share-based payment expense 15 15
Translation (139) 1,503
Balance at December 2005 (227) (1,655) (2,539)
Actuarial gains recognised 283 283
Deferred taxation thereon (102) (102)
Loss attributable to equity
shareholders (587)
Dividends (742)
Net loss on cash flow hedges
removed from
equity and reported in income 1,264 1,264
Net loss on cash flow hedges (1,592) (1,592)
Deferred taxation on cash flow
hedges 167 167
Gain on available for sale
financial assets 78 78
Deferred taxation
available-for-sale financial
assets (15) (15)
Share-based payment expense 338 338
Translation 1 (88) 2,259
Balance at December 2006 (45) (1,503) (1,188)
Rounding of figures may result in computational discrepancies.
Non- Foreign
distri- currency
Retained butable translation
Earnings reserve reserves
US Dollar million
Balance at December 2004 previously
reported 286 24 (317)
Change in comparative data (note 19) (13)
As restated 273 24 (317)
Actuarial losses recognised
Deferred taxation thereon
Loss attributable to equity shareholders (182)
Dividends (149)
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) 251
Balance at December 2005 (58) 22 (66)
Actuarial gains recognised
Deferred taxation thereon
Loss attributable to equity shareholders (44)
Dividends (107)
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
Deferred taxation on cash flow hedges
Share-based payment expense
Translation (2) 307
Balance at December 2006 (209) 20 241
Other
Actuarial Comprehen-
gains sive
(losses) income Total
US Dollar million
Balance at December 2004 previously reported (22) (184) (213)
Change in comparative data (note 19) (13)
As restated (22) (184) (226)
Actuarial losses recognised (27) (27)
Deferred taxation thereon 11 11
Loss attributable to equity shareholders (182)
Dividends (149)
Net loss on cash flow hedges removed from
equity and reported in income 17 17
Net loss on cash flow hedges (200) (200)
Deferred taxation on cash flow hedges 58 58
Gain on available-for-sale financial assets 2 2
Share-based payment expense 2 2
Translation 2 44 295
Balance at December 2005 (36) (261) (399)
Actuarial gains recognised 42 42
Deferred taxation thereon (15) (15)
Loss attributable to equity shareholders (44)
Dividends (107)
Net loss on cash flow hedges removed
from equity and reported in income 215 215
Net loss on cash flow hedges (227) (227)
Deferred taxation on cash flow hedges 25 25
Gain on available-for-sale financial assets 12 12
Deferred taxation on cash flow hedges (2) (2)
Share-based payment expense 48 48
Translation 3 (25) 283
Balance at December 2006 (6) (215) (169)
12. Minority interests
As at
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited
SA Rand million
Balance at beginning of year 374 374 327
Attributable profit 202 152 146
Dividends paid (171) (116) (125)
Net loss on cash flow hedges removed from
equity and reported in income 10 7 4
Net loss on cash flow hedges (12) (9) (9)
Translation 33 70 31
Balance at end of period 436 478 374
As at
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited
US Dollar million
Balance at beginning of year 59 59 58
Attributable profit 30 23 23
Dividends paid (25) (18) (20)
Net loss on cash flow hedges removed from
equity and reported in income 2 1 1
Net loss on cash flow hedges (2) (1) (2)
Translation (2) (2) (1)
Balance at end of period 62 62 59
13. Exchange rates
Dec Sept Dec
2006 2006 2005
Unaudited Unaudited Unaudited
Rand/US dollar average for the year
to date 6.77 6.59 6.37
Rand/US dollar average for the quarter 7.31 7.15 6.53
Rand/US dollar closing 7.00 7.76 6.35
Rand/Australian dollar average for
the year to date 5.10 4.93 4.85
Rand/Australian dollar average for
the quarter 5.63 5.41 4.86
Rand/Australian dollar closing 5.53 5.82 4.65
BRL/US dollar average for the year to
date 2.18 2.18 2.44
BRL/US dollar average for the quarter 2.15 2.17 2.25
BRL/US dollar closing 2.14 2.17 2.35
Rounding of figures may result in computational discrepancies.
14. Capital commitments
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited
SA Rand million
Orders placed and outstanding on capital contracts
at the prevailing rate of exchange 2,475 2,910 1,182
Dec Sept Dec
2006 2006 2005
Restated
Unaudited Unaudited
US Dollar million
Orders placed and outstanding on capital contracts
at the prevailing rate of exchange 354 375 186
Liquidity and capital resources:
To service the above capital commitments and other operational requirements,
the group is dependent on existing cash resources, cash generated from
operations and borrowing facilities.
Cash generated from operations is subject to operational, market and other
risks. Distributions from operations may be subject to foreign investment
and exchange control laws and regulations and the quantity of foreign
exchange available in offshore countries. In addition distributions from
joint ventures are subject to the relevant board approval.
The credit facilities and other financing arrangements contain financial
covenants and other similar undertakings. To the extent that external
borrowings are required, the groups covenant performance indicates that
existing financing facilities will be available to meet the above
commitments. To the extent that any of financing facilities mature in the
near future, the group believes that these facilities can be refinanced on
similar terms to those currently in place.
15. Contingent liabilities
AngloGold Ashanti`s contingent liabilities at 31 December 2006 are detailed
below:
Water pumping cost - South Africa - The group is involved in a legal dispute
regarding the responsibility for water pumping of the Margaret shaft at the
Stilfontein mine. Following an attempt by DRDGold Limited to liquidate its
North West operations and avoid incurring pumping costs, AngloGold Ashanti
launched an urgent application against DRDGold Limited and government
departments requesting the court to order the continued pumping of water at
the Stilfontein Mines. The cessation of water pumping is likely to cause
flooding in various of the Group`s Vaal River operations. The Department of
Water Affairs and Forestry responded by issuing directives to the mining
companies directing that they share the costs of pumping at the Stilfontein
Margaret Shaft.
The three mining companies, Simmer and Jack Mines Limited, Harmony Gold
Mining Company Limited and AngloGold Ashanti Limited, are finalising an
arrangement in which responsibility for the water pumping will be
transferred to an independent newly formed company. AngloGold Ashanti`s
responsibility will be limited to providing one-third of the start-up
capital on loan account and the three mining companies will be members of
the newly formed company.
Should the proposed arrangement not be acceptable to the courts and/or the
regulatory authorities, the proposal may have to be amended. Due to this
uncertainty, no estimate is made of any potential liabilities as management
believe that the proposed arrangement is a pragmatic and reasonable basis to
resolve the issue.
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.
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. The
Group receives a fee from the associate for providing the surety, and has
provided for non-performance.
Sales tax on gold deliveries - Brazil - Mineracao Serra Grande S.A.(MSG),
the operator of the Crixas mine in Brazil, has received two tax assessments
from the State of Goias related to payments of sales taxes on gold
deliveries for export: one for the period between February 2004 and June
2005 and the other for the period between July 2005 and May 2006. The tax
authorities maintain that whenever a taxpayer exports gold through a branch
located in a different Brazilian State, it must obtain an authorisation from
the Goias State Treasury by means of a Special Regime Agreement (Termo de
Acordo re Regime Especial - TARE). The Serra Grande operation is co-owned
with Kinross Gold Corporation.
The company manages the operation and its attributable share of the first
assessment is approximately $29m. In May 2006 MSG signed the TARE, which
authorised the remittance of gold to the company`s branch in Minas Gerais
specifically for export purposes. In November 2006 the administrative
council`s second chamber ruled in favour of Serra Grande and fully canceled
the tax liability related to the first period. The State of Goias may still
appeal to the full board of the State of Goias tax administrative council.
The second assessment was issued by the State of Goias in October 2006 on
the same grounds of the first one, and the attributable share of the
assessment is approximately $18m. The company believes both assessments are
in violation of Federal legislation on sales taxes.
VAT Disputes - Brazil - MSG received a tax assessment in October 2003 from
the State of Minas Gerais related to sales taxes on gold allegedly returned
from the branch in Minas Gerais to the company head office in the State of
GoiA??s. The company lost the case at the administrative level but is now
discussing at the judicial sphere. The company believes there is a remote
chance of success for the State of Minas Gerais. The company`s attributable
share of the assessment is approximately $6m.
VAT Dispute - Brazil - Morro Velho is involved in a dispute with tax
authorities. As a result of an erroneous duplication of a shipping invoice
between two states in Brazil, tax authorities are claiming that VAT is
payable on the second invoice. The amount involved is approximately $5m.
Social security payments - Brazil - AngloGold Ashanti Brazil is being
accused of failing to pay certain required payments towards the social
security system in Brazil during the period 1997 to 2004. Legislation is
unclear on whether the contributions are actually due and payable. The
amount involved is approximately $2m.
Litigation with mining contractor - 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.
Capital cost of water pipelines - Namibia - A potential liability of
approximately $1m exists at Navachab in Namibia to pay the outstanding
capital cost of the water pipeline 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, amounts to an attributable $34m at 31 December 2006 (30 September
2006: attributable $35m). The last audited value added tax return was for
the period ended 31 December 2005 and at that date an attributable $19m was
still outstanding and an attributable $15m 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 $11m at 31 December 2006 (30 September 2006:
attributable $12m). Fuel duty refund claims 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 $5m, 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. As from February
2006 all fuel duties have been exonerated.
The government of Mali is a shareholder in all the Malian entities and has
provided a repayment plan for the amounts due.
There is a concentration of risk in respect of reimbursable value added tax
and fuel duties from the Tanzanian government:
? Reimbursable value added tax due from the Tanzanian government, for
the company amounts to $14m at 31 December 2006 (30 September 2006: $14m).
The last audited value added tax return was for the period ended 31 May
2006 and at the balance sheet date $9m was still outstanding and $5m is
still subject to audit. The accounting processes for the unaudited amount
are in accordance with the processes advised by the Tanzanian government
in terms of the previous audits.
? Reimbursable fuel duties from the Tanzanian government, for the
company amount to $18m at 31 December 2006 (30 September 2006: $11m). Fuel
duty claims are required to be submitted after consumption of the related
fuel and are subject to authorisation by the Customs and Excise authorities.
Claims for refund of fuel duties amounting to $12m have been lodged with the
Customs and Excise authorities, which are still outstanding, whilst claims
for refund of $6m have not yet been submitted. The accounting processes for
the unauthorised amount are in accordance with the processes advised by the
Tanzanian government in terms of the previous
authorisations.
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. Borrowings
AngloGold Ashanti`s borrowings are interest bearing.
19. Change in comparative data
AngloGold Ashanti has, as a result of further guidance on materiality
assessment published in the United States of America, decided to assess
materiality on a combination of two methods, because it will result in a
more accurate assessment of materiality on both the balance sheet and the
income statement.
In previous periods, AngloGold Ashanti used the "roll over" method to assess
materiality for potential adjustments.
The roll over method quantifies a misstatement based on the amount of the
error originating in the current year income statement but it ignores the
"carryover effects" of prior year misstatements. This can result in
accumulation of significant misstatements on the balance sheet. The
alternative to the roll over method, the iron curtain method, quantifies a
misstatement based on the effects of correcting the misstatement existing on
the balance sheet, irrespective of the year of occurrence.
As a result of the revised assessment criteria, AngloGold Ashanti identified
an adjustment necessary to the balance sheet, principally to trade and other
payables and deferred income. The adjustment, due to an accumulation over
several years of immaterial amounts in the income statement, has been
accounted for retrospectively, and the comparative statements for 2005 have
been restated.
The effect of the change on 2005 is as tabulated below. Opening retained
earnings for 2005 have been reduced by $11m, R76m which is the amount of the
adjustment relating to periods prior to 2005. The net effect on the income
statement was $1m, R7m.
Figures in million SA Rands US Dollars
Income statement
Reduction in cost of sales 11 2
Reduction in taxation (4) (1)
Effect on profit attributable to equity shareholders 7 1
Balance sheet
Assets
Increase in tangible assets 23 3
Increase in inventories 6 1
Decrease in trade and other receivables (36) (5)
Figures in million SA Rands US Dollars
Liabilities
Decrease in deferred taxation (33) (5)
Increase in trade, other payables and deferred
income 102 15
Retained earnings
Decrease in retained earnings (76) (11)
There are no cash flow effects
20. Announcements
On 11 December 2006, shareholders in general meeting approved the creation
of E ordinary shares and the implementation of an Employee Share Ownership
Plan (ESOP) to be introduced at its operations in South Africa. In addition,
shareholders approved a Black Economic Empowerment transaction as well as
the introduction of an ESOP in countries outside of South Africa. This
follows the announcement made on the 2 October 2006, in which AngloGold
Ashanti advised the imminent finalisation of an employee share ownership
plan with the National Union of Mineworkers, Solidarity, United Association
and Izingwe Holdings (Proprietary) Limited.
21. Dividend
The directors have today declared Final Dividend No. 101 of 240 (Final
Dividend No. 99: 62) South African cents per ordinary share for the year
ended 31 December 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.
2007
Currency conversion date for UK pounds, Australian
dollars and Ghanaian cedis Thursday, 1 March
Last date to trade ordinary shares cum dividend Friday, 2 March
Last date to register transfers of certificated
securities cum dividend Friday, 2 March
Ordinary shares trade ex dividend Monday, 5 March
Record date Friday, 9 March
Payment date Friday, 16 March
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, 5 March
2007 and Friday, 9 March 2007, 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.
2007
Ex dividend on New York Stock Exchange Wednesday, 7 March
Record date Friday, 9 March
Approximate date for currency conversion Friday, 16 March
Approximate payment date of dividend Monday, 26 March
Assuming an exchange rate of R7.19/$1, the dividend payable on an ADS is
equivalent to 33.37 US cents. This compares with the final dividend of 9.865
US cents per ADS paid on 20 March 2006. 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.
2007
Last date to trade and to register GhDSs cum dividend Friday, 2 March
GhDSs trade ex dividend Monday, 5 March
Record date Friday, 9 March
Approximate payment date of dividend Monday, 19 March
Assuming an exchange rate of R1/?1,289.291 the dividend payable per GhDS is
equivalent to 30.94 cedis. This compares with the final dividend of
9.20018cedis per GhDS paid on 13 March 2006. 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%.
In addition, directors have today declared Dividend No. E1 of 120 South
African
cents per E ordinary share, payable to employees participating in the
Bokamoso
ESOP and Izingwe Holdings (Proprietary) Limited. These dividends are payable
on
Friday, 16 March 2007.
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
12 February 2007
Ore Reserves Statement
Mineral Resources
The 2006 Mineral Resource increased by 14.1Moz to 181.6Moz before depletion.
After a depletion of 8.3Moz the increase is 5.8Moz. Mineral Resources were
estimated at a gold price of $650/oz in contrast to the $475/oz used in
2005.
This change in economic assumptions from 2005 to 2006 resulted in the
Mineral
Resources increasing by 5.8Moz, while successful exploration and revised
modelling resulted in a further increase of 7.6Moz, and other minor changes
accounted for additional 0.7Moz.
Moz
December 2005 Mineral Resources 175.8
Reductions
2006 Total Depletion -8.3
TauTona, areas on both the Ventersdorp Contact Reef and Carbon Leader
Reef Shaft Pillars
were determined not to have economic potential -1.9
Moab Khotsong, due to new exploration drilling -1.4
Sadiola, due to a change in methodology when compared to the 2005
Mineral Resource -0.9
Bibiani Mine, due to sale of asset -0.9
Other, total of non-significant changes -0.5
Additions
Obuasi, due to exploration and changes in estimation methodology
below 50 level area 5.2
Boddington, due to successful exploration 2.1
Navachab, due to successful exploration, increased gold price and
improved mining efficiencies 2.1
Geita, due to revised Mineral Resource Models, successful exploration
and increased gold price 2.1
Siguiri, due to successful exploration and increased gold price 1.5
Savuka, due to increased gold price 1.2
Cripple Creek & Victor, due to successful exploration and gold price 1.1
Iduapriem, due to increased gold price 0.7
Cerro Vanguardia, due to successful exploration 0.6
West Wits Surface, due to inclusion of tailing dams as a result of
the increased gold price 0.5
Serra Grande, due to the successful exploration in the open-pit and
Mina Nova areas 0.2
Yatela, due increased gold price 0.2
Other, total of non-significant changes 2.0
December 2006 Mineral Resources 181.6
Rounding of figures may result in computational discrepancies.
Ore Reserves
The 2006 AngloGold Ashanti Ore Reserves increased by 16% or 10.1Moz before
depletion. After depletion, this increase amounted to 3.6Moz, or 6%. A gold
price of $550/oz was used for Ore Reserve estimation in contrast to the
$400/oz
used in 2005. This change in the economic assumptions from 2005 to 2006
resulted in the Ore Reserves increasing 3.7Moz, while exploration and
modelling
changes resulted in a further addition of 6.6Moz. A reduction of 0.1Moz was
due
to the sale of Bibiani.
The primary reasons for the changes are as follows:
Moz
December 2005 Ore Reserves 63.3
Reductions
2006 Total Depletion -6.5
Moab Khotsong, due to drop in values as a result of exploration
drilling -0.4
Bibiani Mine, due to sale of asset -0.1
Other, total of non significant changes -0.4
Additions
Mponeng, due to the inclusion of the VCR below 120 level project and
higher gold price 2.9
Cripple Creek & Victor, due to planned extension of life 1.1
Sadiola, due to the inclusion of the Deep Sulphide Project 1.0
Boddington, due to upgrade of Inferred Mineral Resources in the Pit
and increased gold and
copper prices 0.7
Sunrise Dam, due to inclusion of North-Wall Cutback and Cosmo
Orebodies because of an
increased gold price 0.7
Iduapriem, due to increased gold price 0.5
Tau Lekoa, due to increased gold price 0.5
AngloGold Ashanti Brasil Mineracao, due to Corrego do Sitio
Sulphide exploration drilling
and CuiabA?? Development 0.5
Cerro Vanguardia, due to successful exploration programme and
increased gold price 0.4
Siguiri, additional pit included due to increased gold price 0.4
Navachab, due to the increased gold price marginal ore is now economic
and the pit is larger 0.3
Savuka, due to the increased gold price 0.3
Yatela, due to the inclusion of an additional cutback 0.2
Serra Grande, due to incorporation of an open-pit and the development
of levels with higher
tons than expected 0.2
Morila, due to the increased gold price marginal ore is now economic 0.1
Other, total of non-significant changes 1.4
December 2006 Ore Reserves 66.9
Rounding of figures may result in computational discrepancies.
By-products
A number of by-products will be recovered as a result of processing the Gold
Ore Reserves. These include 11,800t of uranium from the South African
operations, 0.19Mt of Copper from Australia, 0.50Mt of Sulphur from Brazil
and
24.5Moz of silver from Argentina.
Competent persons
The information in this report that relates to exploration results, Mineral
Resources or Ore Reserves is based on information compiled by the competent
persons listed below. They are either members of the Australian Institute of
Mining and Metallurgy (AusIMM) or recognised overseas professional
organisations. They are all full-time employees of the company.
The competent person for AngloGold Ashanti Exploration is:
? E Roth, PhD (Economic Geology), BSc (Hons) (Geology), MAusIMM,
16 years experience.
Competent persons for AngloGold Ashanti`s Mineral Resources are:
? VA Chamberlain, MSc (Mining Engineering), BSc (Hons) (Geology), MAusIMM,
21 years experience.
? MF O`Brien, MSc (Mining Economics), BSc (Hons) (Geology), Dip Data,
Pr.Sci.Nat., MAusIMM, 27 years` experience.
Competent persons for AngloGold Ashanti`s Ore Reserves are:
? CE Brechtel, MSc (Mining Engineering), MAusIMM, 31 years` experience.
? D L Worrall, ACSM, MAusIMM, 26 years` experience.
? J van Zyl Visser, MSc (Mining Engineering), BSc (Mineral Resource
Management), PLATO, 20 years` experience.
The competent persons consent to the inclusion of the exploration, Mineral
Resources and Ore Reserves information in this report, in the form and
context
in which it appears.
Mineral Resources and Ore Reserves are reported in accordance with the
minimum
standard described by the Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (The JORC Code, 2004 Edition),
and
also conform to the standards set out in the South African Code for the
Reporting of Mineral Resources and Mineral Reserves (the SAMREC 2000 Code).
Mineral Resources are inclusive of the Ore Reserve component unless
otherwise
stated.
Rounding of figures may result in computational discrepancies.
MINERAL RESOURCES AND ORE RESERVES
ORE RESERVES BY COUNTRY
(as at 31 December 2006)
METRIC
Tonnes Grade Contained
million g/t gold
tonnes
South Africa Proved 15.5 7.86 122.0
Probable 181.6 3.99 724.7
Total 197.2 4.29 846.7
Argentina* Proved 0.9 7.09 6.1
Probable 6.9 6.22 42.7
Total 7.7 6.32 48.8
Australia* Proved 54.9 1.18 64.7
Probable 133.2 1.02 135.4
Total 188.0 1.07 200.1
Brazil* Proved 3.7 5.60 20.8
Probable 10.3 7.40 76.3
Total 14.0 6.92 97.1
Ghana* Proved 50.8 2.13 108.2
Probable 74.5 3.10 231.3
Total 125.3 2.71 339.5
Guinea* Proved 18.2 0.60 10.8
Probable 52.7 0.85 45.0
Total 70.9 0.79 55.9
Mali* Proved 15.7 1.79 28.0
Probable 20.8 2.85 59.1
Total 36.4 2.39 87.2
Namibia Proved 5.3 1.08 5.8
Probable 10.1 1.63 16.5
Total 15.5 1.44 22.3
Tanzania Proved 4.0 0.97 3.9
Probable 74.9 3.47 259.6
Total 79.0 3.34 263.6
USA Proved 93.4 0.93 87.0
Probable 35.6 0.91 32.5
Total 129.0 0.93 119.5
Totals* Proved 262.4 1.74 457.2
Probable 600.6 2.70 1 623.3
Total 863.0 2.41 2 080.5
IMPERIAL
Tons Grade Contained
million oz/t gold
million oz
South Africa Proved 17.1 0.229 3.9
Probable 200.2 0.116 23.3
Total 217.3 0.125 27.2
Argentina* Proved 0.9 0.207 0.2
Probable 7.6 0.181 1.4
Total 8.5 0.184 1.6
Australia* Proved 60.5 0.034 2.1
Probable 146.8 0.030 4.4
Total 207.3 0.031 6.4
Brazil* Proved 4.1 0.163 0.7
Probable 11.4 0.216 2.5
Total 15.5 0.202 3.1
Ghana* Proved 56.0 0.062 3.5
Probable 82.2 0.091 7.4
Total 138.1 0.079 10.9
Guinea* Proved 20.1 0.017 0.3
Probable 58.1 0.025 1.4
Total 78.2 0.023 1.8
Mali* Proved 17.3 0.052 0.9
Probable 22.9 0.083 1.9
Total 40.02 0.070 2.8
Namibia Proved 5.9 0.032 0.2
Probable 11.2 0.048 0.5
Total 17.0 0.041 0.7
Tanzania Proved 4.5 0.028 0.1
Probable 82.6 0.101 8.3
Total 87.0 0.097 8.5
USA Proved 103.0 0.027 2.8
Probable 39.2 0.027 1.0
Total 142.2 0.027 3.8
Totals* Proved 289.2 0.051 14.7
Probable 662.1 0.079 52.2
Total 951.3 0.070 66.9
* Reserves attributable to AngloGold Ashanti
Rounding of figures may result in computational discrepancies.
MINERAL RESOURCES BY COUNTRY (1)
(as at 31 December 2006)
METRIC
Tonnes Grade Contained
million g/t gold
tonnes
South Africa Measured 27.3 13.97 381.0
Indicated 528.5 3.89 2,054.4
Inferred 28.4 5.66 160.7
Total 584.2 4.44 2,596.1
Argentina** Measured 11.4 2.35 26.7
Indicated 17.5 3.24 56.6
Inferred 10.4 3.03 31.4
Total 39.2 2.93 114.7
Australia** Measured 71.2 1.08 76.6
Indicated 213.9 0.87 186.3
Inferred 233.3 0.73 170.3
Total 518.4 0.84 433.2
Brazil** Measured 8.6 6.16 52.7
Indicated 18.5 7.35 136.3
Inferred 25.7 7.11 182.9
Total 52.8 7.04 371.8
Ghana** Measured 82.1 3.60 295.7
Indicated 93.3 4.77 445.4
Inferred 43.9 6.47 284.2
Total 219.3 4.68 1,025.4
Guinea** Measured 18.7 0.60 11.2
Indicated 74.1 0.83 61.5
Inferred 131.4 0.66 86.4
Total 224.1 0.71 159.2
Mali** Measured 18.8 1.90 35.7
Indicated 23.4 2.80 65.6
Inferred 16.7 2.48 41.5
Total 59.0 2.42 142.8
Namibia Measured 11.4 0.81 9.3
Indicated 53.8 1.29 69.1
Inferred 33.7 1.16 38.9
Total 98.9 1.19 117.3
Tanzania Measured 4.0 0.97 3.9
Indicated 114.2 3.32 379.2
Inferred 24.3 3.09 75.2
Total 142.5 3.22 458.3
USA Measured 180.2 0.82 148.3
Indicated 95.7 0.75 71.5
Inferred 14.1 0.59 8.3
Total 290.0 0.79 228.1
Totals** Measured 433.7 2.40 1,041.1
Indicated 1,232.8 2.86 3,525.8
Inferred 561.9 1.92 1,079.9
Total 2,228.5 2.53 2,646.9
IMPERIAL
Tons Grade Contained
million oz/t gold
million oz
South Africa Measured 30.0 0.408 12.2
Indicated 582.6 0.113 66.1
Inferred 31.3 0.165 5.2
Total 643.9 0.130 83.5
Argentina** Measured 12.6 0.068 0.9
Indicated 19.2 0.095 1.8
Inferred 11.4 0.088 1.0
Total 43.2 0.085 3.7
Australia** Measured 78.5 0.031 2.5
Indicated 236.8 0.025 6.0
Inferred 257.1 0.021 5.5
Total 571.5 0.024 13.9
Brazil** Measured 9.4 0.180 1.7
Indicated 20.4 0.214 4.4
Inferred 28.3 0.207 5.9
Total 58.2 0.205 12.0
Ghana** Measured 90.4 0.105 9.5
Indicated 102.9 0.139 14.3
Inferred 48.4 0.189 9.1
Total 241.8 0.136 33.0
Guinea** Measured 20.6 0.018 0.4
Indicated 81.6 0.024 2.0
Inferred 144.8 0.019 2.8
Total 247.1 0.021 5.1
Mali** Measured 20.8 0.055 1.1
Indicated 25.8 0.082 2.1
Inferred 18.4 0.072 1.3
Total 65.0 0.071 4.6
Namibia Measured 11.6 0.024 0.3
Indicated 59.3 0.037 2.2
Inferred 37.1 0.034 1.3
Total 109.0 0.035 3.8
Tanzania Measured 4.5 0.028 0.1
Indicated 125.8 0.097 12.2
Inferred 26.8 0.090 2.4
Total 157.1 0.094 14.7
USA Measured 198.7 0.024 4.8
Indicated 105.4 0.022 2.3
Inferred 15.6 0.017 0.3
Total 319.7 0.023 7.3
Totals** Measured 478.1 0.070 33.5
Indicated 1,259.0 0.083 113.4
Inferred 619.4 0.056 34.7
Total 2,456.5 0.074 181.6
** Resources attributable to AngloGold Ashanti
(1) Inclusive of the Ore Reserve component
Rounding of figures may result in computational discrepancies.
Shareholders` notice board
Diary:
Financial year-end 31 December
2006
Annual financial statements posting on or about 19 March
2007
Annual general meeting 11:00 SA time 4 May
2007
Quarterly reports released:
Quarter ended 31 March 2007 5 May
2007
Quarter ended 30 June 2007 31 July
2007
Quarter ended 30 September 2007 1 November
2007
Quarter ended 31 December 2007 *1 February
2008
Dividends / Declared Last date to trade
Dividend Number ordinary shares
cum dividend
Final - No. 101 12 February 2007 2 March 2007
Interim - No. 102 30 July 2007* 17 August 2007*
Final - No. 103 31 January 2008* 15 February 2008*
Dividends / Payment date to Payment date to ADS
Dividend Number shareholders holders
Final - No. 101 16 March 2007 26 March 2007
Interim - No. 102 31 August 2007* 10 September 2007*
Final - No. 103 29 February 2008* 10 March 2008*
* Approximate dates.
Dividend policy: Dividends are proposed by, and approved by the board of
directors of AngloGold Ashanti, based on the interim and year-end financial
statements. Dividends are recognised when declared by the board of directors
of
AngloGold Ashanti. AngloGold Ashanti expects to continue to pay dividends,
although there can be no assurance that dividends will be paid in the future
or
as to the particular amounts that will be paid from year to year. The
payments
of future dividends will depend upon the Board`s ongoing assessment of
AngloGold Ashanti`s earnings, after providing for long term growth are
cash/debt resources, the amount of reserves available for dividend using
going
concern assessment and restrictions placed by the conditions of the
convertible
bond and other factors.
Annual general meeting: Shareholders on the South African register who have
dematerialised their shares in the company (other than those shareholders
whose
shareholding is recorded in their own name in the sub-register maintained by
their CSDP) and who wish to attend the annual general meeting in person,
will
need to request their CSDP or broker to provide them with the necessary
authority in terms of the custody agreement entered into between them and
the
CSDP or broker.
Such shareholders may also use the electronic online proxy voting facility
for
purposes of instructing their CSDP or broker as to how they wish to vote. In
order for shareholders to use their online proxy voting facility, it is
necessary to register for the service via the following website.
http:www.investorportal.co.za (click on the AngloGold Ashanti icon). A
demonstration of the electronic online proxy voting process may be viewed on
http:/www.investorportal.co.za Registration is free of charge. The website
will
be available on or about 1 March 2007.
Further information will be included in the notice of the general meeting to
be
sent to shareholders on or about 19 March 2007.
Change of details: Shareholders are reminded that the onus is on them to
keep
the company, through its nominated share registrars, apprised of any change
in
their postal address and personal particulars. Similarly, where shareholders
receive dividend payments electronically (EFT), they should ensure that the
banking details which the share registrars and/or CSDPs have on file are
correct.
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
Offices
Registered and Corporate
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
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 #
R E Bannerman**
Mrs E le R Bradley
C B Brayshaw
Dr S E Jonah KBE**
R Medori
(Alternate: P G Whitcutt)
J H Mensah**
W A Nairn (Alternate: A H Calver *)
Prof W L Nkuhlu
S R Thompson *
A J Trahar
* British # American ** Ghanaian
French ! Brazilian
Officers
Managing Secretary: Ms Y Z Simelane
Company Secretary: Ms L Eatwell
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
General E-mail enquiries
investors@AngloGoldAshanti.com
AngloGold Ashanti website
http://www.AngloGoldAshanti.com
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
PO Box 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 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: 13/02/2007 08:02:38 Produced by the JSE SENS Department.
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