TIDMAGD
Report
for the fourth quarter and year ended 31 December 2013
First annual production growth in nine years; 2013 production 4.105Moz at total
cash cost of $830/oz
Strong Q4 production of 1,229koz, up 43% over Q4 2012 and 18% over previous
quarter
Total cash costs $748/oz in Q4 -23% improvement on Q4 2012 and 8% improvement
on prior quarter.
All-in sustaining costs declined to $1,015/oz from $1,155/oz during the
previous quarter.
Net Debt to EBITDA improved to 1.86 times, down from 2.02 times in third
quarter.
Adjusted Headline Earnings Normalised jump 49% to $164m
All Injury Frequency Rate reaches lowest ever 7.33 per million hours worked for
the year.
Tropicana and Kibali deliver 106,000oz attributable production at average $532/
oz cash cost
Corporate* and exploration costs declined 20% from previous quarter.
Free cash outflow improved from $205m to $82m, after all capital, tax and
interest payments
2014 production outlook estimated at between 4.2Moz to 4.5Moz. Total cash costs
expected at between $750/oz to $790/oz.
2014 capital expenditures expected to decline by 31% to between $1.3bn and
$1.45bn.
* Including administration, marketing and other expenses.
Quarter Year
ended ended ended ended ended
Dec Sep Dec Dec Dec
2013 2013 2012 2013 2012
US dollar / Imperial
Operating review
Gold
Produced - oz (000) 1,229 1,043 859 4,105 3,944
Price received 1 - $/oz 1,271 1,327 1,718 1,401 1,664
All-in sustaining cost 2 - $/oz 1,015 1,155 1,551 1,174 1,251
Total cash costs 3 - $/oz 748 809 967 830 829
Financial review
Adjusted gross profit 4 - $m 376 310 393 1,351 2,389
Gross profit - $m 404 276 418 1,445 2,354
(Loss) profit attributable to
equity shareholders - $m (305) 1 (174) (2,230) 897
- cents/share (75) - (45) (568) 232
Headline (loss) earnings - $m (276) (18) 120 78 1,208
- cents/share (68) (5) 31 20 312
Adjusted headline earnings 5 - $m 45 576 19 599 988
- cents/share 11 148 5 153 255
Cash flow from operating
activities - $m 431 319 494 1,246 1,969
Capital expenditure - $m 477 448 844 1,993 2,322
Notes: 1. Refer to note C "Non-GAAP disclosure" for the definition.
2. Refer to note D "Non-GAAP disclosure" for the definition.
3. Refer to note E "Non-GAAP disclosure" for definition.
4. Refer to note B "Non-GAAP disclosure" for the definition
5. Refer to note A "Non-GAAP disclosure" for the
definition.
$ represents US dollar, unless otherwise stated.
Rounding of figures may result in computational discrepancies.
Certain statements contained in this document, other than statements of
historical fact, including, without limitation, those concerning the economic
outlook for the gold mining industry, expectations regarding gold prices,
production, cash costs, cost savings and other operating results, return on
equity, productivity improvements, growth prospects and outlook of AngloGold
Ashanti's operations, individually or in the aggregate, including the
achievement of project milestones, commencement and completion of commercial
operations of certain of AngloGold Ashanti's exploration and production
projects and the completion of acquisitions and dispositions, AngloGold
Ashanti's liquidity and capital resources and capital expenditures and the
outcome and consequence of any potential or pending litigation or regulatory
proceedings or environmental issues, are forward-looking statements regarding
AngloGold Ashanti's operations, economic performance and financial condition.
These forward-looking statements or forecasts involve known and unknown risks,
uncertainties and other factors that may cause AngloGold Ashanti's actual
results, performance or achievements to differ materially from the anticipated
results, performance or achievements expressed or implied in these
forward-looking statements. Although AngloGold Ashanti believes that the
expectations reflected in such forward-looking statements and forecasts 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, social and political and market conditions, the success of
business and operating initiatives, changes in the regulatory environment and
other government actions, including environmental approvals, fluctuations in
gold prices and exchange rates, the outcome of pending or future litigation
proceedings, and business and operational risk management. For a discussion of
such risk factors, refer to the prospectus supplement to AngloGold Ashanti's
prospectus dated 17 July 2012 that was filed with the United States Securities
and Exchange Commission ("SEC") on 26 July 2013. These factors are not
necessarily all of the important factors that could cause AngloGold Ashanti's
actual results to differ materially from those expressed in any forward-looking
statements. Other unknown or unpredictable factors could also have material
adverse effects on future results. Consequently, readers are cautioned not to
place undue reliance on forward-looking statements. 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
hereof or to reflect the occurrence of unanticipated events, except to the
extent required by applicable law. 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.
This communication may contain certain "Non-GAAP" financial measures. AngloGold
Ashanti utilises certain Non-GAAP performance measures and ratios in managing
its business. Non-GAAP financial measures should be viewed in addition to, and
not as an alternative for, the reported operating results or cash flow from
operations or any other measures of performance prepared in accordance with
IFRS. In addition, the presentation of these measures may not be comparable to
similarly titled measures other companies may use. AngloGold Ashanti posts
information that is important to investors on the main page of its website at
www.anglogoldashanti.com and under the "Investors" tab on the main page. This
information is updated regularly. Investors should visit this website to obtain
important information about AngloGold Ashanti.
Operations at a glance
for the quarter ended 31 December 2013
Production
oz Year-on-year Qtr on $/oz Year-on-year Qtr on
(000) Qtr Qtr
% Variance 3 % Variance 3
% %
Variance Variance
4 4
SOUTH AFRICA 339 98 3 1,005 (34) (12)
Vaal River Operations 127 102 4 1,080 (40) (11)
Great Noligwa 20 43 18 1,294 (22) (15)
Kopanang 39 50 (11) 1,296 (23) 2
Moab Khotsong 67 191 12 890 (56) (18)
West Wits Operations 154 105 3 919 (45) (19)
Mponeng 93 94 6 963 (30) (11)
TauTona 5 62 129 2 852 (57) (29)
Total Surface 58 71 (2) 1,039 89 5
Operations
First Uranium SA 6 27 93 4 1,040 (215) 11
Surface Operations 30 50 (9) 1,039 (29) 1
INTERNATIONAL 890 29 25 992 (33) (11)
OPERATIONS
CONTINENTAL AFRICA 460 22 20 1,129 (26) (1)
DRC
Kibali - Attr. 45% 7 40 - - 2,073 - -
Ghana
Iduapriem 67 52 8 1,153 (27) 82
Obuasi 63 (17) (7) 2,069 (20) 8
Guinea
Siguiri - Attr. 85% 75 17 9 1,116 (24) 8
Mali
Morila - Attr. 40% 7 12 (40) - 1,434 120 24
Sadiola - Attr. 41% 7 24 (11) 20 1,639 29 (18)
Yatela - Attr. 40% 7 8 (20) 60 2,226 25 50
Namibia
Navachab 18 - (5) 526 (66) (19)
Tanzania
Geita 154 31 21 784 (24) (14)
Non-controlling
interests, exploration
and other
AUSTRALASIA 169 207 173 763 (66) (52)
Australia
Sunrise Dam 102 85 65 804 (59) (35)
Tropicana - Attr. 70% 66 - - 640 - -
Exploration and other
AMERICAS 262 2 (3) 887 (29) (7)
Argentina
Cerro Vanguardia - 61 11 (3) 852 (39) 4
Attr. 92.50%
Brazil
AngloGold Ashanti 120 7 17 891 (32) (11)
Mineração
Serra Grande 8 34 (8) (3) 956 (24) (2)
United States of America
Cripple Creek & Victor 47 (11) (32) 1,076 14 7
Non-controlling
interests, exploration
and others
OTHER
Sub-total 1,229 43 18 1,015 (35) (12)
Equity accounted
investments included
above
AngloGold Ashanti
7 Equity accounted
joint ventures.
Operations at a glance
for the quarter ended 31 December 2013
Total cash costs
$/oz Year-on-year Qtr on $m Year-on-year Qtr on Qtr
Qtr
% Variance 3 $m Variance $m Variance
% 3 4
Variance
4
SOUTH AFRICA 767 (34) (10) 106 14 30
Vaal River Operations 762 (45) (12) 33 10 9
Great Noligwa 1,032 (25) (20) 2 (2) 5
Kopanang 910 (6) (5) 1 (12) (2)
Moab Khotsong 596 (56) (11) 30 24 6
West Wits Operations 717 (48) (12) 65 38 28
Mponeng 656 (30) (13) 36 2 7
TauTona 5 809 (42) (10) 29 36 20
Total Surface 915 (34) - 9 (33) (6)
Operations
First Uranium SA 6 843 (29) 6 3 (29) -
Surface Operations 980 (25) (3) 6 (4) (5)
INTERNATIONAL 741 (19) (6) 270 (48) 37
OPERATIONS
CONTINENTAL AFRICA 839 (15) 4 117 (25) (13)
DRC
Kibali - Attr. 45% 7 471 - - 22 22 22
Ghana
Iduapriem 966 (3) 67 7 (16) (29)
Obuasi 1,354 (11) 25 (15) 36 (7)
Guinea
Siguiri - Attr. 85% 844 (20) (14) 17 (4) (6)
Mali
Morila - Attr. 40% 7 853 19 13 3 (17) (4)
Sadiola - Attr. 41% 7 1,506 18 (13) (10) (25) (2)
Yatela - Attr. 40% 7 1,923 22 35 (8) (7) (7)
Namibia
Navachab 524 (50) 4 14 7 (1)
Tanzania
Geita 543 2 (1) 89 (15) 22
Non-controlling (2) (7) (3)
interests,
exploration and
others
AUSTRALASIA 640 (56) (50) 30 30 41
Australia
Sunrise Dam 685 (48) (42) 23 14 27
Tropicana - Attr. 70% 569 - - 9 9 9
Exploration and other (2) 7 5
AMERICAS 634 (10) (3) 125 (51) 11
Argentina
Cerro Vanguardia - 672 (11) 9 22 (14) (12)
Attr. 92.50%
Brazil
AngloGold Ashanti 518 (23) (14) 69 3 32
Mineração
Serra Grande 8 712 (5) - 12 (18) (1)
Cripple Creek & 825 24 11 22 (21) (7)
Victor
Non-controlling - (1) (2)
interests,
exploration and other
OTHER 5 (12) 7
Sub-total 748 (23) (8) 382 (45) 75
Equity accounted (6) 28 (9)
investments included
above
AngloGold Ashanti 376 (17) 66
1Refer to note D under "Non-GAAP disclosure" for definition
2 Refer to note B under "Non-GAAP disclosure" for definition
3 Variance December 2013 quarter on December 2012 quarter - increase
(decrease).
4 Variance December 2013 quarter on September 2013 quarter - increase
(decrease).
5 As from 1 January 2013, TauTona and Savuka were mined as one operation. For
presentation purposes TauTona and Savuka have been combined for the prior
quarter and prior year.
6 Effective 20 July 2012, AngloGold Ashanti acquired 100% of First Uranium (Pty)
Limited.
7 Equity accounted joint ventures.
8Effective 1 July 2012, AngloGold Ashanti increased its shareholding in Serra
Grande from 50% to 100%.
Rounding of figures may result in computational discrepancies.
Financial and Operating Report
OVERVIEW FOR THE YEAR AND QUARTER
FINANCIAL AND CORPORATE REVIEW
Full-year adjusted headline earnings (AHE) were $599m, or 153 US cents per
share, compared with $988m or 255 US cents per share in 2012. Despite a 16%
decline in the gold price received for the year, the company recorded solid
performance for the full year 2013 reflecting a 4% increase in production to
4.105Moz and all-in sustaining costs, despite inflation, decreasing by roughly
6% compared with 2012. The year-on-year improvement in production marks the
first increase in annual production for AngloGold Ashanti in nine years.
This reflected a recovery from strike activity in South Africa in 2012,
substantial improvements in both direct operating and overhead costs, and the
introduction of commercial production from two new, world-class, low-cost mines
in the fourth quarter. Last year (2013) marked the best year of safety
performance in AngloGold Ashanti history, providing an anchor for solid
production and cost results amidst a challenging gold price environment, wage
negotiations in South Africa, and a significant restructuring of corporate and
operating costs.
Net loss attributable to equity shareholders for the full year was $2.23bn,
compared to a profit of $897m in 2012, primarily due to a post-tax impairment
of assets and investments and inventory write-downs of $2.5bn and the
write-offs of deferred tax assets at Ghana and CC&V of $330m.
Net debt increased to $3.11bn at the end of 2013, from $3.01bn at the end of
the third quarter of 2013, primarily as a result of project capital
expenditures required to fund the final development phases of the Tropicana
project in Australia and ongoing investment in the Kibali project in the DRC,
both of which commenced commercial production during the fourth quarter of the
year.Free cash outflow during the fourth quarter was $82m. Improved cash flow
from operating activities meant all interest, tax, stay-in-business capex and
the majority of $224m project capex was funded.
Given an improvement in 12-month rolling EBITDA amounting to $1.67bn, Net Debt
to EBITDA declined to a ratio of 1.86 times, from 2.02 times at the end of the
third quarter.
Production in 2013 was 4.105Moz at a total cash cost of $830/oz, compared to
3.944Moz at a total cash cost of $829/oz the previous year. Group production
beat guidance for the year of 4.0Mozs - 4.1Mozs at total cash costs of between
$815-845/oz. All-in sustaining costs for the group in 2013 was $1,174/oz, down
from $1,251 in 2012.
As a result of declines and volatility in the gold price during 2013, reserves
and resources are calculated at $1,100/oz and $1,600/oz, respectively, compared
to 2012 reserves and resources calculated at $1,300/oz and $2,000/oz.
Reserves at year-end 2013 were 67.9Moz, down from 74.1Moz at the end of 2012,
reflecting the changes in economic assumptions due to the lower gold price,
which had the most significant impacts on Geita and CC&V. Resources at 31
December 2013 decreased to 233Moz, from 241.5Moz at the end of the previous
year, reflecting the reduced gold price and the resultant revision of mineral
resource models, increased cut-off grades, and modified recovery factors. This
was partially offset by a 2.7Moz increase from exploration at Kibali and La
Colosa.
"Having achieved our best year on safety, we've returned to production growth
for the first time in almost a decade, thanks to new lower cost ounces from
Tropicana and Kibali," Chief Executive Officer Srinivasan Venkatakrishnan said.
"The new production in the portfolio gives us the flexibility to rationalise
marginal production while we continue to focus closely on overhead and
operating costs."
FOURTH QUARTER REVIEW
Normalised adjusted headline earnings (AHE) for the fourth quarter amounted to
$164m, a 49% improvement on the previous quarter's $110m. Fourth quarter AHE
were impacted by a number of non-cash accounting adjustments including $54m
associated with stockpile and inventory provisions, $17m associated with
operational and corporate redundancies.
Reconciliation of fourth and third quarter published to normalised Adjusted
Headline Earnings:
Q3 2013 Q4 2013
$m $m
AHE as published 576 45
Realised fair value gain on Mandatory Convertible Bond (567) -
Transaction costs $1.25bn and bridge facility costs 20 -
Cost of early redemption of 3.5% May 2009 convertible bond 39 -
Stockpile and inventory provisions - 54
Loan and other impairments - 57
Operational and corporate redundancies 42 17
Insurance claim proceeds - (9)
AHE normalised 110 164
The fourth quarter saw another strong performance, with both production and
costs coming in better than market guidance. Production was 1,229Moz at an
average total cash cost of $748/oz, compared to 1,043Moz at $809/oz the
previous quarter and 859,000oz at $967/oz in the fourth quarter of 2012. Solid
results during the quarter reflected strong performance from the Continental
Africa region, particularly at Geita and Siguiri, and from the company's assets
in Australia, with Sunrise Dam delivering high-grade production as planned from
the Crown pillar, and the addition of low cost ounces from Tropicana. Costs
benefited from higher output, weaker local currencies and early indications
that a range of cost savings initiatives are gaining traction. All-in
sustaining costs also declined to $1,015/oz from $1,155/oz during the previous
quarter.
Summary of quarter-on-quarter operating and cost improvements:
Improvement Improvement
Q3'2013 Q2'2013
Q4'2013 Q4-vs-Q3 Q3-vs-Q2
Gold Price received ($/oz) 1,271 (4%) 1,327 (7%) 1,421
Gold Production (Kozs) 1,229 18% 1,043 12% 935
Total cash costs ($/oz) 748* 8% 809 10% 898
Corporate & marketing ($m) 37 12% 42 26% 57
Exploration & evaluation ($m) 41 25% 55 30% 79
(6%)
Capital expenditure ($m) 477 448 19% 556
(due to
profiling)
All-in sustaining** ($/oz) 1,015 12% 1,155 11% 1,302
EBITDA ($m) 544 66% 327 14% 288
Cash inflow from operating 431 35% 319 128% 140
activities ($m)
Free cash outflow ($m) (82) 60% (205) 59% (497)
*Q4 2013 includes $30/oz consumable and stock impairments.
**Excludes stockpiles written off.
Comparing the first half of 2013 with the second half of 2013, the position is
as follows:
Particulars H1 H2 Improvement
2013 2013 H2 vs H1
Gold Price received ($/oz) 1,529 1,297 (15%)
Gold Production (Kozs) 1,834 2,272 24%
Total cash costs ($/oz) 896 777* 13%
Corporate & marketing costs ($m) 122 79 35%
Exploration & evaluation costs ($m) 159 96 39%
Capital Expenditure ($m) 1,069 925 13%
All-in-sustaining costs** ($/oz) 1,288 1,114 14%
EBITDA ($m) 796 871 9%
Cash inflow from Operating activities ($m) 496 750 51%
Free cash outflow ($m) (725) (287) 60%
* Q4 2013 includes $30/oz consumable and stock provisions.
**Excludes stockpiles written off.
Cash flow from operating activities increased 35% to $431m in the fourth
quarter, from $319m in the third quarter of 2013. Total capital expenditure
during the fourth quarter was $477m (including joint ventures), compared with
$448m the previous quarter and $844m in the fourth quarter of 2012. Of the
total capital spent, project capital expenditure during the fourth quarter of
2013 amounted to $224m. Net free cash flow, after all capital, tax and interest
costs, improved to negative $82m in the fourth quarter, from negative $205m in
the third quarter of 2013, reflecting improved costs and higher production.
Particulars Q4 Q4 Improvement
2012 2013 Y vs Y
Gold Price received ($/oz) 1,718 1,271 (26%)
Gold Production (Kozs) 859 1,229 43%
Total cash costs ($/oz) 967 748 23%
Corporate & marketing costs ($m) 85 37 56%
Exploration & evaluation costs ($m) 124 41 67%
Capital Expenditure ($m) 844 477 43%
All-in-sustaining costs** ($/oz) 1,551 1,015 35%
EBITDA ($m) 364 544 49%
Cash inflow from Operating activities ($m) 494 432 (13%)
Free cash outflow ($m) (447) (82) 82%
**Excludes stockpiles written off.
A two-part financing was completed in December of 2013 on the South African
debt facilities, providing a more diverse funding platform compared to the
previous funding platform which relied solely on the commercial paper (CP)
market. The first part of the financing is a 5-year revolving credit facility
(RCF) at R1.5bn with similar terms and conditions and a similar financial
covenant as those in our US$ credit facility.
The second part of the financing package is a three year-bond at R750m (this
has a floating rate of Johannesburg Interbank Agreed Rate - JIBAR +175 bps),
providing the ability to fund short term requirements from the CP market with a
back-up in South African rand RCF.
UPDATE ON CAPITAL PROJECTS
The company is pleased to announce the successful commissioning of two new gold
projects in the last week of September - Tropicana and Kibali. Together, these
projects are expected to add attributable production of 550,000oz to 600,000oz
in 2014 at a combined average total cash cost of less than $700/oz.
"Our operators and project teams persevered in delivering our two new,
high-quality projects ahead of schedule, despite a challenging environment for
developing new assets," Srinivasan Venkatakrishnan, Chief Executive Officer of
AngloGold Ashanti, said. "Along with our aggressive approach to optimising cash
flow, we are positioning AngloGold Ashanti to deliver leverage to shareholders
in a rising gold price environment."
Tropicana commissioned ahead of schedule. The Tropicana gold project, a joint
venture between AngloGold Ashanti (70%) and Independence Group NL (30%) poured
its first gold on 26 September 2013, ahead of schedule and on budget. Project
close-out activities are in progress, and costs remain on budget.
During the fourth quarter, focus remained on maintaining steady state
performance in the Tropicana plant which approached 90% plant availability at
year-end. The project produced 95kozs (67kozs attributable) in the fourth
quarter.
At the Kibali project, a joint venture between state-owned Sokimo (10%),
AngloGold Ashanti (45%) and operator Randgold Resources (45%), steady
production ramp-up progress is being made by Randgold Resources. During the
fourth quarter the Kibali plant ramp-up was on schedule with the oxide circuit
producing 88kozs (40kozs attributable) at a total cash cost of $471/oz. In
December, the primary crusher and mill for the sulphide circuit were
commissioned. Decline development and sinking of the main shaft sink are
progressing well. The focus for 2014 will be commissioning of the sulphide
circuit in the second quarter, decline access to the underground ore zone by
year end, and ongoing shaft sinking. The total project capital cost remains
within the board approved budget.
The Relocation Action Plan (RAP) is also nearing completion, with a total of
4,216 new houses built and the Church scheduled to be completed by the end of
March 2014.
In the Americas, the Mine Life Extension project at CC&V ($585m approved cost
over 5 years) is progressing on schedule. This Project is intended to extend
the production life of CC&V to 2025 and add over 2Mozs of gold production over
the life of the mine. The project adds a 2Mtpa mill to process higher grade
ore, a 200Mt valley heap leach facility, associated facilities, and replacement
mine fleet. Over 700,000 man-hours of work have been completed and there has
been one lost time injury.
Project expenditure to date at the end of 2013 at CC&V was $197m. The mill is
on track for mechanical completion in the late stages of 2014 and commissioning
/production ramp up in the fourth quarter of 2014, with full production
scheduled to begin in 2015. In 2013, mill engineering was completed and mill
concrete construction is 50% complete whilst the Colorado State highway
realignment was completed. The valley heap leach facility (VLF and associated
gold recovery plant (ADR) schedule is as follows:
* 2014: complete lining the pregnant solution pond area (triple lined
area) and start filling the area for the ADR2 (the gold recovery plant)
platform;
* 2015: complete the ADR2 pad, construct the ADR2 plant (the gold
recovery plant), and start loading ore on the first phase VLF2; and
* 2016: commission ADR2/VLF2 and start gold production.
Obuasi ramp decline continues according to schedule. Management continues to
consult with stakeholders around options to improve ability to execute project.
UPDATE ON COST OPTIMISATION AND PORTFOLIO REVIEW
Cost optimisation and portfolio review: A process remains underway to improve
efficiency across the business, to identify long-term savings in the company's
direct and indirect cost base and to optimise capital expenditure. Mine plans
have been adjusted and in some cases stockpiled inventories are being processed
with a view to further reduce costs and improve cash flow. In addressing
corporate costs, headcount reductions have been made during 2013 across the
global employee base, including capital contractors and other service
providers. The exit from exploration activities in non-core regions is going
according to plan.
A binding agreement was signed on 10 February 2014 to sell the Navachab mine to
a wholly-owned subsidiary of QKR Corporation Limited for an upfront
consideration based on an enterprise value of $110 million, adjusted for
AngloGold Ashanti Namibia's net debt and working capital position on the
scheduled closing date of the transaction. The upfront consideration is payable
in cash on the Closing Date. In addition, under the terms of the agreement,
AngloGold Ashanti will receive a net smelter return paid quarterly for seven
years following the second anniversary of the closing date of the transaction,
subject to an average gold price of $1,350 per ounce and capped at 18,750
ounces sold per quarter. The transaction is subject to fulfilment of a number
of conditions precedent, including Namibian and South African regulatory and
third party approvals.
"We are executing on our strategy to focus our efforts on assets of scale that
drive value in the business," said Charles Carter, AngloGold Ashanti's
Executive Vice President of Strategy and Business Development. "We're pleased
to have reached agreement to sell Navachab for fair value in the midst of a
difficult market - we believe that QKR is the right group to take Navachab
forward."
Furthermore, Project 500 (P500), a cost optimisation initiative which was
launched in early 2013 to deliver an annual reduction in Anglogold Ashanti's
operating cost base of approximately $500 million over an 18 month period,
realised an initial savings of approximately 25% in 2013, with further
significant savings anticipated in 2014. The first phase of P500 relied
primarily on the identification and realisation of reduction initiatives that
were known by the operations, but required support in planning, scheduling,
resourcing or execution.
In the South Africa region, cost cuts at Moab Khotsong were carried out through
staff and contractor reductions, deferment of projects as well as consumable
savings through various campaigns. The fourth quarter savings at Moab Khotsong
from the project approximated $6m. The implementation of P500 principles is
on-going and has now been deployed at all business units in the South Africa
region to identify key interventions and core focus points on cost control,
which are anticipated to yield positive results in 2014.
In Argentina at Cerro Vanguardia, initiatives designed to develop efficiencies
and production improvements continued during the fourth quarter of 2013 and
included underground mine design optimization, extension of tyres' operational
life, optimisation and stabilisation of Carbon-in-Leach and regeneration
circuits.
In Brazil, as anticipated, the potential savings identified are around $34m
with most of the initiatives anticipated to be realised in 2014, a small
portion having been realised in 2013. A strong cost and cash management program
was implemented in 2013 which led to improved cost and capital expenditure
control. These initiatives contemplated productivity improvements, optimisation
of operational processes, reductions on power and materials pricing and
consumption, as well as reductions in administrative expenses such as travel,
external services and consultancies.
Although the first phase of P500 is anticipated to deliver value until the end
of 2014, it has become necessary to consider the next phase of savings to be
delivered thereafter. Phase 2 will continue the P500 approach of co-ordinating
cross-functional experts from across the company to work with operational
management to identify further cost and revenue enhancement opportunities in
key areas. Given that there are numerous interventions across multiple
disciplines, this role includes assisting site management to prioritise and
integrate improvements into the group's plans, supported with appropriate
models and processes. Phase 2 will build on the learning of Phase 1, and
include a review of all previous and potential operational improvements.
Some cost reduction opportunities for the next phase have been identified
following discussions with operational and technical Senior Vice Presidents.
These include, among others:
The procurement of global strategic commodities (including fuel and power);
Third-party contracts and contractors;
Labour planning;
Working capital and stores' inventory optimization; and
Stay-in-business capital
SOUTH AFRICAN LABOUR UPDATE
The 2013 wage negotiations were concluded on 10 September 2013 when a
multi-year agreement was reached between South Africa's major gold producers,
represented in a collective bargaining forum led by the Chamber of Mines, and
three of the four unions (the National Union of Mineworkers, United Association
of South Africa and Solidarity). While the Association of Mineworkers and
Construction Union (AMCU), which participated in the central level
negotiations, did not sign the agreement, its members benefited from the wage
increases of the agreement from its effective date of 1 July 2013.
On 20 January 2014, AMCU served notice to the gold companies that it intended
to call a strike by its members on 23 January 2014, demanding higher wages. In
response, the Chamber of Mines, representing the gold mining companies in South
Africa, applied for an interdict against the strike given that wages had
already been settled. The Labour Court postponed its judgement to 30 January
2014, ordering AMCU not to strike until a judgement was delivered. On 30
January, the Court granted an interim interdict, declared the threatened AMCU
strike unprotected and ruling that AMCU must return to court on 14 March 2014
to explain why this interim interdict should not be made permanent. The
judgement was awarded, with costs.
TECHNOLOGY AND INNOVATION UPDATE
During the quarter ended December 2013, the Technology Innovation Consortium
has made considerable progress in prototype development pertaining to the key
technologies that are intended to establish the base for a safe, automated
mining method intended for use at AngloGold Ashanti's deep-level underground
mining operations.
Reef Boring (Stoping): In the fourth quarter of 2013, three 660mm single pass
holes were drilled with the newly designed Atlantis reamer.
The last hole, hole 17, was of critical importance to the project and it was
aimed at proving the technical viability of drilling holes that are immediately
adjacent to one another (skin-to-skin) in order to ensure maximum orebody
extraction. This was done successfully. The next holes will be drilled
skin-to-skin to verify the results obtained in the first test after which the
overlapping drilling configuration will be tested. The newly designed Atlantis
660mm reamer performed well in testing in terms of penetration rates, speed and
also produced cuttings of constant size. This reamer delivered much improved
size cuttings and significantly reduced the amount of vibrations on the
drilling machine. The average time taken to complete the holes was 3.5 days,
which compared favourably with the Atlantis single pass 540mm hole, despite the
bigger diameter.
Site Equipping: During the fourth quarter, site equipping, opening up and
development of the future production sites progressed according to schedule
with the exception of the TauTona mine VCR site. A fire that occurred on 75
Level at TauTona mine led to the site establishment work being halted in the 67
Level VCR production site until safe ventilation conditions can be
re-established. An alternative site that will accommodate the rig intended for
this site has already been identified at the Moab Khotsong mine with the
planning for site establishment having been concluded. The first production
site which is a TauTona Carbon Leader Reef site is on schedule to start in
April 2014.
Machine Manufacturing: The design of a machine for medium reefs (width 40-80cm)
and the machine design for narrow reefs (width 0-40cm) were concluded and the
orders for manufacturing have been placed.
Ultra High Strength Backfill (UHSB)
Enhancements to the batch mixing process progressed well, increasing the mix
volumes and reducing the preparation time of the UHSB. A replica of the
underground production site mixers have been constructed on surface for testing
to ensure operational readiness. Construction of the underground backfill plant
commenced in December 2013 and is scheduled to coincide with the start-up of
the first production site in April 2014.
Stress monitoring instrumentation installed within the filled holes is
producing real time data. Early monitoring has indicated that the performance
and effectiveness of the UHSB is satisfactory and that the effect of reef
boring extraction on the surrounding rock mass has been minimised.
SAFETY
After three consecutive months with no fatality, December unfortunately saw
fatal incidents at Moab Khotsong and Obuasi, each resulting in a single
fatality, both of which are being thoroughly investigated to ascertain the
underlying causes. Improvements to prevent the recurrence of such incidents
have been identified and are in the process of being implemented.
Much still needs to be done to reach our goals of zero harm, however, 2013 saw
the following outcomes from our operating and safety teams with 80% of the
operations having set new safety records:
This is the lowest number of fatalities recorded in any year in Anglogold
Ashanti's history (at a group level, South African Regional level and at the
International operational level). The company's fatality rate for 2013 was
0.05, a 50% improvement over 2012;
The South Africa region made significant inroads in 2013 to improve its safety
performance, particularly at West Wits which had a difficult first 5 months of
the year, but ended up without a fatality in the last 7 months of the year.
Vaal River Region recorded 17 months without a fatality prior to the accident
at Moab that happened at year-end;
Lost time injury, All injury, and Accident severity rates all saw an
improvement of at least 7% when compared to the previous year.
The focus continues on Major Hazard Management through identification and
monitoring of critical controls and High Potential Incidents (HPIs) with a view
of enhancing organisational learning and institutionalising change in order to
improve our safety record as we go into 2014. HPIs correlate well with fatal
incidents experienced by the business in the past and are used as learning
opportunities to prevent future occurrence.
OPERATING HIGHLIGHTS
For the year ended December 2013, the South African operations produced
1,302Moz at a total cash cost of $850/oz. In 2012, the region produced 1,212Moz
at a total cash cost of $873/oz. Production for the fourth quarter was
339,000oz at a total cash cost of $767/oz and all-in sustaining costs of $1,005
/oz. When compared to the same quarter the previous year, the region
demonstrated a strong improvement in production and costs partially given that
the fourth quarter of 2012 was impacted by strike activity. Notably, all-in
sustaining costs in the fourth quarter for the region saw a decline of 34% when
compared to fourth quarter in 2012 and 12% when compared to the third quarter
in 2013.
At the West Wits operations, the fourth quarter performance was adversely
affected by continued increase in seismic activity, safety stoppages and
deterioration in grades. Production was 154,000oz at total cash cost of $717/oz
compared to 149,000oz at $814/oz in the previous quarter. The decrease in cash
costs for the West Wits operations is testimony to the vigorous cost
optimisation measures that have been implemented. During the fourth quarter,
TauTona successfully embarked on an energy optimisation project which has
generated positive results.
Vaal River operations saw an increase in production in the fourth quarter to
127,000oz at a total cash cost of $762/oz despite experiencing the subsequent
effects of the previous quarter's fire at the Kopanang mine. Production in the
previous quarter was 122,000oz at a total cash cost of $867/oz. The average
grade recovered at Moab Khotsong increased by 53% year-on-year. This favourable
yield was achieved through a reduction in dilution due to a decrease in stoping
width and a higher average reef grade being mined, as planned. Moab Khotsong
was the lowest cost producer for the South African region at a total cash cost
of $596/oz.
Surface operations saw another strong operating quarter with production at
58,000oz at a total cash cost of $915/oz, as tonnage ramp-up incorporating the
Business Process Framework (BPF) at Mine Waste Solutions helped ensure that
higher tonnages are being treated than in the past. Production in the previous
quarter was 59,000oz at a total cash cost of $915/oz. Grades continue to
improve as Vaal River tailings now supplement the Mine Waste Solutions
tailings. Although the uranium circuit at Mine Waste Solutions started
commissioning in January 2014, harsh weather conditions, logistical and safety
challenges were encountered during the fourth quarter of 2013, resulting in
completion now anticipated by the end of the first quarter in 2014. Completion
of this circuit will not only allow uranium production, but is expected to also
improve gold recovery rates. Since the acquisition of First Uranium, AngloGold
Ashanti's operating protocols have led to improved efficiencies and regulatory
compliance at this operation and will endeavour to improve this performance
going forward.
The Continental Africa Region production for the year ended 31 December 2013
was 1,460Moz at a total cash cost $869/oz. In 2012, the region produced
1,521Moz at a total cash cost of $830/oz. In the fourth quarter, the region
produced 460,000oz at a total cash cost of $839/oz and at all-in sustaining
costs of $1,129/oz. In the fourth quarter of 2012, the region's production was
376,000oz at a total cash cost of $986/oz. In the third quarter of 2013 the
region delivered 383,000oz at a total cash cost of $804/oz.
Average daily throughput for the region continued to increase throughout the
year. The quarter saw the commencement of commercial production at Kibali, a
new world class project located in the DRC, which delivered 40,000oz in its
maiden operational quarter at a total cash cost of $471/oz.
In Ghana, Iduapriem's fourth quarter production increased by 8% to 67,000oz
compared to the third quarter, as a result of a 5% increase in recovered grade,
due to access to higher grade ore sources in the Ajopa and Block 8 pits,
together with a 5% increase in tonnage throughput as a result of 5% additional
production days in the quarter. Production achieved in the fourth quarter
represents the highest quarterly production performance in the last nine years.
Total cash costs, however, increased to $966/oz mainly due to non-cash year-end
adjustments of $371/oz to the carrying values of the ore stockpile.
At Obuasi, production in the fourth quarter decreased by 7% to 63,000oz
compared to the third quarter due to a 17% decrease in recovered grade as a
result of an unplanned variation in the mining plan necessitated by a technical
failure of the Agitator shaft, partly offset by an 11% increase in tonnage
throughput as a result of an increase in surface tonnes processed. Total cash
costs consequently increased to $1,354/oz quarter-on-quarter.
In the Republic of Guinea, Siguiri's production in the fourth quarter increased
9% to 75,000oz, compared to the third quarter, as the operation achieved its
eighth straight quarter of exceeding production targets. Tonnage throughput was
the highest ever achieved for a quarter as well as the month of December since
Carbon-In-Pulp production commenced. This is as a result of increased
efficiency both at the plant and mining operations, whilst recovered grade
increased by 1%. Total cash costs consequently decreased by 14% to $844/oz
quarter-on-quarter, as a result of the higher production together with lower
mining costs resulting from a lower mine stripping ratio.
At Geita, in Tanzania, production in the fourth quarter increased by 21% to
154,000oz compared to the third quarter, as a result of an 11% increase in
tonnage throughput due to additional production days, improved plant
availability and utilisation together with a 9% increase in recovered grade.
Total cash costs decreased by 1% to $543/oz quarter-on-quarter, due to the
higher production.
In the Americas, production for the year ended December 2013 was 1,001Moz, at
total cash cost of $671/oz. In 2012, the region produced 953,000oz at a total
cash costs of $669/oz. Production in the fourth quarter remained stable
compared to the previous quarter at 262,000oz at a total cash cost of $634/oz
and at all-in sustaining costs of $887/oz. Production was 258,000oz at total
cash cost of $703/oz the same quarter a year ago. The third quarter 2013
production was 270,000oz at a total cash cost of $656/oz.
In Argentina, at Cerro Vanguardia production, for the year ended 31 December
2013, was 10% higher than in 2012, the highest annual production for the last
10 years, mainly due to the effect of higher grade and treated tonnes.
Production for the fourth quarter was 61,000oz at a total cash cost of $672/oz.
The operation saw a 3% reduction in production quarter-on-quarter, mainly due
to lower grades, which also had an impact on total cash cost at $672/oz, 9%
higher quarter-on-quarter. Rising costs were partially compensated by
favourable efficiencies related to lower mine contractor costs, lower
maintenance costs, weaker exchange rate and lower royalties paid. Silver
production (92.5% attributable) at 825,307oz was a 5% increase compared to the
previous quarter.
In Brazil, operations had a strong performance producing 154,000oz at a total
cash cost of $560/oz in the fourth quarter of 2013 compared to 138,000oz at a
total cash cost of $629/oz in the previous quarter.
At Cripple Creek & Victor production for the fourth quarter was 47,000oz at a
total cash cost of $825/oz. Compared to the previous quarter, this was 32%
lower due to the timing of the pad placement sequencing as ore was stacked
further from the liner during the fourth quarter which delayed production.
Higher cost ounces placed on the heap leach pad, longer waste hauls, and lower
recoverable grades in more ore tons mined impacted negatively on the costs.
Third quarter production was 69,000oz at a total cash cost of $744/oz.
In Australia, production for the year ended December 2013 was 342,000oz at
total cash cost of $1,047/oz. Compared to the 2012 year, the region produced
257,000oz at a total cash costs of $1,211/oz. The fourth quarter produced
169,000oz at a total cash cost of $640/oz and at all-in sustaining costs of
$763/oz. Production was 55,000oz at a total cash cost of $1,462/oz, for the
fourth quarter of 2012. In the third quarter 2013 production was 62,000oz at
total cash cost of $1,270/oz. The significant increase in the fourth quarter
production was due to a strong operating quarter at Sunrise Dam and the
commencement of mining at Tropicana.
Sunrise Dam's production in the fourth quarter increased by 65% to 102,000oz,
primarily as a result of planned higher volumes and grades of ore mined in the
crown pillar portion of the open pit. Mill throughput averaged 10,147 tonnes
per day and the mining of the Crown Pillar was successfully completed. Total
cash costs decreased 42% to $685/oz, quarter-on-quarter, favourably impacted by
improved grade and higher volumes mined from the open pit.
As a result of a change to grade control and mine design, combined with
improved productivity, underground mining costs improved.
EXPLORATION
Total exploration and evaluation (including technology) expenditure during the
fourth quarter, inclusive of expenditure at equity accounted joint ventures,
was $54m ($23m on Brownfield, $15m on Greenfield and $16m on pre-feasibility
studies), compared with $176m during the same quarter the previous year ($51m
on Brownfield, $69m on Greenfield and $56m, on pre-feasibility studies).
In Colombia, exploration continued at the Nuevo Chaquiro target, Quebradona
project, in a joint venture with B2Gold (AngloGold Ashanti 86%). Diamond
drilling recommenced late in the quarter following a short halt to refine
targeting based on an updated geological and structural model. The latest
drillhole, CHA-048, will test the continuation of the high-grade zone
approximately 200m to the northwest of CHA-039, with results that are expected
in the first quarter of 2014. At year end, the drillhole was still above the
target zone, however visually, there is significant chalcopyrite mineralization
associated with early quartz diorite porphyry dykes that are similar to those
intersected in CHA-039.
The completion of the enhanced pre-feasibility study for Gramalote was
completed in November 2013. Rather than proceeding into full feasibility and
placing orders for long lead capital items and following discussions with our
JV partner, the focus for 2014 has moved to securing Environmental Impact
Assessments (EIA) permits from the government, given current depressed gold
prices.
In Australia, aircore drilling progressed solidly at the Tropicana JV
(AngloGold Ashanti 70%) during the quarter with several prospects tested in the
core of the Tropicana JV tenement package. Encouraging results were returned
from shallow aircore drilling at the near-mine Phoenix prospect, located 16km
north of Tropicana Gold Mine (TGM), and from the regional Lichini prospect,
approximately 90km southwest of TGM. Promising results were also returned from
first pass diamond drilling at Madras prospect approximately 25km south of TGM.
Follow-up work is planned for these targets in 2014. Geophysical surveys were
completed at a number of target areas within the Tropicana JV in the fourth
quarter, including airborne EM and magnetic surveys and ground based IP and EM
surveys. Results from these surveys are currently being assessed and will be
used to plan follow-up work in 2014. At the Nyngan JV (AGA: 70%), induced
polarisation geophysical surveying was progressed over key prospective areas
and aims to assist in delineating targets for drill testing in 2014.
In Guinea, exploration work continued on the Kounkoun trend in Blocks 3 and 4
(AngloGold Ashanti 85) with reverse circulation drilling at KK1 North (Block 3)
completed for 3,558m and 153 line km of IP surveying completed at Kouremale
(Block 4). The KK1 North drill programme aimed to test the continuity of
mineralisation along the turbidite/chlorite-magnetite-shale contact for a
distance of 2km to the north of the KK1 deposit. At Block 3, IP surveying
continued to delineate NS-trending structural features, prospective for gold
mineralisation, which will be tested by diamond drilling in the first quarter
of 2014.
Detailed information on the exploration activities and studies both for
brownfields and greenfields is available on the AngloGold Ashanti website (
www.anglogoldashanti.com ).
DIVIDEND
Given a volatile gold price, AngloGold Ashanti's Board of Directors has elected
to prioritise its cash flow at this stage for debt repayment and for the
completion of existing capital growth projects, namely the Kibali underground
mine and sulphide circuit in the DRC, the expansion of the Cripple Creek &
Victor mine in the US, and the life extension project at its Mponeng mine in
South Africa. AngloGold Ashanti, therefore, will not pay a final dividend and
will review this position again at the half year in light of the prevailing
gold price, debt levels and progress on its projects.
OUTLOOK
Gold production for 2014 is estimated at between 4.2Moz to 4.5Moz. These
estimates factor in the production from Tropicana (340 to 370koz) and Kibali
(250 to 275koz) and exclude production from Navachab (some 30 to 35koz) for a
period of six months. Total cash costs are estimated at between $750/oz to $790
/oz and "all in sustaining costs" at $1,025/oz to $1,075/oz, at an average
exchange rate of R11/$, BRL2.45/$, A$0.85/$ and AP6.50/$ and fuel at $100/
barrel.
Gold production for the first quarter of 2014 (which is always a weak quarter)
is estimated at 950koz to 1000koz. Total cash costs are estimated at between
$800/oz to $850/oz at an average exchange rate of R11/$, BRL2.45/$, A$0.85/$
and AP6.45/$ and fuel at $100/barrel.
For 2014, capital expenditure is anticipated to be between $1.3bn and $1.45bn
(including defined project capital of $400m and deferred stripping $113m).
Corporate costs and marketing expenditure are estimated at $120m to $140m.
Spending on expensed exploration, study and evaluation spend (including equity
accounted JV's), is anticipated to be $150m to $175m. Depreciation and
amortisation is anticipated to be $800m, while interest and finance costs are
expected to be $290m (income statement) and $250m (cash flow statement).
Known or unpredictable factors could have material adverse effects on our
future results. Please refer to the Risk Factors section in AngloGold Ashanti's
prospectus supplement to its prospectus dated 17 July 2012, filed with the
United States Securities and Exchange Commission ("SEC") on 26 July 2013 and
available on the SEC's homepage at http://www.sec.gov.
MINERAL RESOURCE AND ORE RESERVE
The AngloGold Ashanti Mineral Resource and Ore Reserve are reported in
accordance with the minimum standards described by the Australasian Code for
Reporting of Exploration Results, Mineral Resource and Ore Reserve (JORC Code,
2012 Edition), and also conform to the standards set out in the South African
Code for the Reporting of Exploration Results, Mineral Resource and Mineral
Reserve (The SAMREC Code, 2007 edition and amended July 2009). Mineral Resource
is inclusive of the Ore Reserve component unless otherwise stated. In complying
with revisions to the JORC code the company has reviewed the changes to its
Mineral Resource and Ore Reserve and concluded that none are material to the
overall valuation of the company. AngloGold Ashanti has therefore resolved not
to provide the detailed reporting as defined in Table 1 of the code. The
company will however continue to provide the high level of detail it has in
previous years in order to comply with the transparency requirements of the
code.
AngloGold Ashanti strives to actively create value by growing its major asset -
the Mineral Resource and Ore Reserve. This drive is based on an active,
well-defined brownfields exploration program, innovation in both geological
modelling and mine planning and continual optimisation of its asset portfolio.
GOLD PRICE
The following local prices of gold were used as a basis for estimation in the
December 2013 declaration:
Local prices of gold
Gold Price
South Africa Australia Brazil Argentina
US$/oz ZAR/kg AUD/oz BRL/oz ARS/oz
2013 Ore Reserve 1,100 360,252 1,249 2,551 6,186
2013 Mineral Resource 1,600 434,112 1,606 3,304 8,106
The JORC and SAMREC Codes require the use of reasonable economic assumptions.
These include long-range commodity price forecasts which are prepared in-house.
MINERAL RESOURCE
The total Mineral Resource decreased from 241.5Moz in December 2012 to 233.0Moz
in December 2013. A gross annual decrease of 2.8Moz occurred before depletion,
while the net decrease after allowing for depletion is 8.5Moz. Changes in
economic assumptions from December 2012 to December 2013 resulted in a 12.9Moz
decrease to the Mineral Resource, whilst exploration and modelling resulted in
an increase of 10.7Moz. Depletion from the Mineral Resource for the year
totalled 5.8Moz.
MINERAL RESOURCE Moz
Mineral Resource as at 31 December 2012 241.5
Reductions
Kopanang Negative exploration results defined a large uneconomic area (2.5)
Savuka Depletions and transfers to TauTona and Mponeng (3.0)
Obuasi Revised domaining of Mineral Resource models (2.4)
Geita Gold price resulted in an increased cut-off (1.6)
CC&V Gold price, model grade and recovery factors (2.1)
Other Total of non-significant changes (3.8)
Additions
Mponeng Transfers from Savuka Mineral Resource 1.7
Kibali Positive exploration results 2.0
La Colosa Exploration growth tempered by reduced economics 1.2
Other Total of non-significant changes 2.6
Disposals
Kibali Kibali South Inferred Mineral Resource was transferred to (0.6)
SOKIMO
Mineral Resource as at 31 December 2013 233.0
Rounding of numbers may result in computational discrepancies.
Mineral Resources have been estimated at a gold price of US$1,600/oz (2012:
US$2,000/oz).
ORE RESERVE
The AngloGold Ashanti Ore Reserve reduced from 74.1Moz in December 2012 to
67.9Moz in December 2013. This gross annual decrease of 6.2 Moz includes
depletion of 5.0Moz. The balance of 1.2 Moz reductions in Ore Reserve, results
from changes in economic assumptions between 2012 and 2013 which resulted in a
reduction of 3.4Moz to the Ore Reserve, whilst exploration and modelling
changes resulted in an increase of 2.2Moz.
ORE RESERVE Moz
Ore Reserve as at 31 December 2012 74.1
Reductions
Savuka Depletions and transfers to TauTona and Mponeng (0.5)
Moab Khotsong Model changes and depletions (0.5)
Sadiola Model changes, economics and depletions (0.7)
Geita Economic changes had a significant negative effect (1.5)
CC&V Lower gold price (1.2)
Other Total non-significant changes (3.0)
Additions
Mponeng Mainly due to net effect of transfer from Savuka 0.8
Other Total non-significant changes 0.4
Ore Reserve as at 31 December 2013 67.9
Rounding of numbers may result in computational discrepancies.
Ore reserves have been calculated using a gold price of US$1,100/oz (2012:
US$1,300/oz).
BY-PRODUCTS
Several by-products are recovered as a result of the processing of gold Ore
Reserves. These include 57,897t of Uranium oxide from the South African
operations, 382,766t of Sulphur from Brazil and 29.6Moz of silver from
Argentina.
COMPETENT PERSONS
The information in this report relating to exploration results, Mineral
Resources and Ore Reserves is based on information compiled by or under the
supervision of the Competent Persons as defined in the JORC or SAMREC Codes.
All Competent Persons are employed by Anglogold Ashanti, unless stated
otherwise, and have sufficient experience relevant to the style of
mineralisation and type of deposit under consideration and to the activity
which they are undertaking. The Competent Persons consent to the inclusion of
Exploration Results, Mineral Resource and Ore Reserve information in this
report, in the form and context in which it appears.
During the past decade, the company has developed and implemented a rigorous
system of internal and external reviews aimed at providing assurance in respect
of Ore Reserve and Mineral Resource estimates. The following operations were
subject to an external audit in line with the policy that each operation /
project will be reviewed by an independent third party on average once every
three years:
Mineral Resource and Ore Reserve at Kopanang and Great Noligwa Mines
Mineral Resource and Ore Reserve at TauTona Mine
Ore Reserve at Kibali Mine
Mineral Resource at Gramalote
The external audits were conducted by the following companies AMEC (Kopanang,
Great Noligwa, TauTona and Gramalote) and Snowden (Kibali Mine). Certificates
of sign off have been received from all companies conducting the external
audits to state that the Mineral Resource and/or Ore Reserve comply with the
JORC Code and the SAMREC Code.
Numerous internal Mineral Resource and Ore Reserve process reviews were
completed by suitably qualified Competent Persons from within Anglogold
Ashanti. A documented chain of responsibility exists from the Competent Persons
at the operations to the company's Mineral Resource and Ore Reserve Steering
Committee. Accordingly, the Chairman of the Mineral Resource and Ore Reserve
Steering Committee, VA Chamberlain, MSc (Mining Engineering), BSc (Hons)
(Geology), MGSSA, FAusIMM, assumes responsibility for the Mineral Resource and
Ore Reserve processes for AngloGold Ashanti and is satisfied that the Competent
Persons have fulfilled their responsibilities.
A detailed breakdown of Mineral Resource and Ore Reserve and backup detail is
provided on the AngloGold Ashanti website (www.anglogoldashanti.com).
MINERAL RESOURCE BY REGION (ATTRIBUTABLE) INCLUSIVE OF ORE RESERVE
Tonnes Grade Contained Contained
as at 31 December 2013 Category million g/t gold gold
tonnes Moz
South Africa Region Measured 164.79 2.48 409.37 13.16
Indicated 949.84 2.07 1 968.70 63.30
Inferred 51.36 10.78 553.96 17.81
Total 1 165.99 2.51 2 932.03 94.27
Continental Africa Region Measured 110.41 2.32 256.30 8.24
Indicated 475.62 2.52 1 197.92 38.51
Inferred 290.50 2.39 693.66 22.30
Total 876.52 2.45 2 147.88 69.06
Australasia Measured 35.57 1.65 58.87 1.89
Indicated 70.92 2.10 148.71 4.78
Inferred 20.05 3.04 60.92 1.96
Total 126.54 2.12 268.51 8.63
Americas Measured 293.87 1.06 310.12 9.97
Indicated 277.67 1.26 349.90 11.25
Inferred 1 268.53 0.98 1 239.20 39.84
Total 1 840.07 1.03 1 899.22 61.06
Total Measured 604.64 1.71 1 034.66 33.27
Indicated 1 774.04 2.07 3 665.23 117.84
Inferred 1 630.45 1.56 2 547.74 81.91
Total 4 009.13 1.81 7 247.63 233.02
Rounding of figures may result in computational discrepancies.
MINERAL RESOURCE BY REGION (ATTRIBUTABLE) EXCLUSIVE OF ORE RESERVE
Tonnes Grade Contained Contained
as at 31 December 2013 Category million g/t gold gold
tonnes Moz
South Africa Measured 15.33 18.11 277.65 8.93
Indicated 230.62 3.71 856.27 27.53
Inferred 17.00 18.74 318.52 10.24
Total 262.95 5.52 1 452.43 46.70
Continental Africa Measured 22.89 3.68 84.32 2.71
Indicated 244.05 2.24 546.35 17.57
Inferred 289.56 2.39 691.73 22.24
Total 556.50 2.38 1 322.40 42.52
Australasia Measured 3.21 0.87 2.80 0.09
Indicated 43.29 1.97 85.30 2.74
Inferred 20.05 3.04 60.92 1.96
Total 66.55 2.24 149.02 4.79
Americas Measured 152.12 0.95 145.07 4.66
Indicated 203.04 1.04 211.91 6.81
Inferred 1 265.98 0.97 1 225.98 39.42
Total 1 621.13 0.98 1 582.96 50.89
Total Measured 193.55 2.63 509.83 16.39
Indicated 720.99 2.36 1 699.83 54.65
Inferred 1 592.59 1.44 2 297.16 73.86
Total 2 507.13 1.80 4 506.82 144.90
Rounding of figures may result in computational discrepancies.
ORE RESERVE BY REGION (ATTRIBUTABLE)
Tonnes Grade Contained Contained
as at 31 December 2013 Category million g/t gold gold
tonnes Moz
South Africa Proved 150.77 0.68 102.05 3.28
Probable 731.97 1.17 859.08 27.62
Total 882.75 1.09 961.13 30.90
Continental Africa Proved 67.88 2.22 150.35 4.83
Probable 250.06 2.44 608.99 19.58
Total 317.93 2.39 759.34 24.41
Australasia Proved 32.37 1.73 56.08 1.80
Probable 27.16 2.30 62.33 2.00
Total 59.53 1.99 118.41 3.81
Americas Proved 140.68 1.05 148.17 4.76
Probable 78.25 1.61 126.06 4.05
Total 218.93 1.25 274.23 8.82
Total Proved 391.70 1.17 456.65 14.68
Probable 1 087.44 1.52 1 656.45 53.26
Total 1 479.14 1.43 2 113.11 67.94
Rounding of figures may result in computational discrepancies.
Group income statement
Quarter Quarter Quarter Year Year
ended ended ended ended ended
December September December December December
2013 2013 2012 2013 2012
US Dollar million Notes Reviewed Reviewed Reviewed Reviewed Reviewed
Revenue 2 1,474 1,415 1,490 5,708 6,632
Gold income 2 1,418 1,374 1,398 5,497 6,353
Cost of sales 3 (1,042) (1,064) (1,005) (4,146) (3,964)
Gain (loss) on non-hedge 28 (34) 25 94 (35)
derivatives and other
commodity contracts
Gross profit 404 276 418 1,445 2,354
Corporate administration, (37) (42) (85) (201) (291)
marketing and other
expenses
Exploration and evaluation (41) (55) (124) (255) (395)
costs
Other operating expenses 4 (1) (7) (6) (19) (47)
Special items 5 (90) (92) (402) (3,410) (402)
Operating profit (loss) 235 80 (199) (2,440) 1,219
Dividends received 2 - - - 5 7
Interest received 2 15 8 12 39 43
Exchange gain 4 10 - 14 8
Finance costs and unwinding 6 (75) (89) (67) (296) (231)
of obligations
Fair value adjustment on (12) (46) - (58) -
$1.25bn bonds
Fair value adjustment on - - 17 9 83
option component of
convertible bonds
Fair value adjustment on - 44 65 356 162
mandatory convertible bonds
Share of associates and 7 4 25 (42) (162) (30)
joint ventures' profit
(loss)
Profit (loss) before 171 32 (214) (2,533) 1,261
taxation
Taxation 8 (426) (38) 46 333 (346)
(Loss) profit for the (255) (6) (168) (2,200) 915
period
Allocated as follows:
Equity shareholders (305) 1 (174) (2,230) 897
Non-controlling interests 50 (7) 6 30 18
(255) (6) (168) (2,200) 915
Basic (loss) earnings per -75 0 (45) (568) 232
ordinary share (cents) (1)
(3)
Diluted (loss) earnings per -75 (9) (57) (631) 177
ordinary share (cents) (2)
(1) Calculated on the basic weighted average number of ordinary shares.
(2) Calculated on the diluted weighted average number of ordinary shares.
(3) The basic earnings per ordinary share for the September 2013 quarter end is
0.26 cents.
Rounding of figures may result in computational discrepancies.
The reviewed financial statements for the quarter and year ended 31 December
2013 have been prepared by the corporate accounting staff of AngloGold Ashanti
Limited headed by Mr John Edwin Staples, the Group's Chief Accounting Officer.
This process was supervised by Mr Richard Duffy, the Group's Chief Financial
Officer and Mr Srinivasan Venkatakrishnan, the Group's Chief Executive
Officer. The financial statements for the quarter and year ended 31 December
2013 were reviewed, but not audited, by the Group's statutory auditors, Ernst &
Young Inc. A copy of their unmodified review report is available for
inspection at the company's head office.
Group statement of
comprehensive
income
Quarter Quarter Quarter Year Year
ended ended ended ended ended
December September December December December
2013 2013 2012 2013 2012
US Dollar million Reviewed Reviewed Reviewed Reviewed Reviewed
(Loss) profit for
the period (255) (6) (168) (2,200) 915
Items that may be
reclassified
subsequently to
profit or loss
Exchange (85) (8) (35) (433) (92)
differences on
translation of
foreign operations
Net gain (loss) on - 3 (10) (23) (27)
available-for-sale
financial assets
Release on 1 4 12 30 16
impairment of
available-for-sale
financial assets
(note 5)
Release on - (1) - (1) -
disposal of
available-for-sale
financial assets
Cash flow hedges 1 - - 1 -
Deferred taxation - - 2 2 6
thereon
2 6 4 9 (5)
Items that will
not be
reclassified to
profit or
loss:
Actuarial gain 52 (13) (14) 69 (14)
(loss) recognised
Deferred taxation - - - - (9)
rate change
thereon
Deferred taxation (15) 3 3 (20) 3
thereon
37 (10) (11) 49 (20)
Other (46) (12) (42) (375) (117)
comprehensive loss
for the period,
net of tax
Total (301) (18) (210) (2,575) 798
comprehensive
(loss) income for
the period, net of
tax
Allocated as
follows:
Equity (351) (11) (216) (2,605) 780
shareholders
Non-controlling 50 (7) 6 30 18
interests
(301) (18) (210) (2,575) 798
Rounding of figures may result in computational discrepancies.
Group statement of financial position
As at As at As at
December September December
2013 2013 2012
US Dollar million Notes Reviewed Reviewed Reviewed
ASSETS
Non-current assets
Tangible assets 4,815 4,800 7,776
Intangible assets 267 288 315
Investments in associates and joint ventures 1,327 1,233 1,047
Other investments 131 134 167
Inventories 586 602 610
Trade and other receivables 29 29 79
Deferred taxation 177 541 97
Cash restricted for use 31 30 29
Other non-current assets 41 7 7
7,404 7,664 10,127
Current assets
Other investments 1 - -
Inventories 1,053 1,064 1,213
Trade and other receivables 369 425 472
Cash restricted for use 46 36 35
Cash and cash equivalents 648 786 892
2,117 2,311 2,612
Non-current assets held for sale 15 153 150 -
2,270 2,461 2,612
TOTAL ASSETS 9,674 10,125 12,739
EQUITY AND LIABILITIES
Share capital and premium 11 7,006 6,988 6,742
Accumulated losses and other reserves (3,927) (3,555) (1,269)
Shareholders' equity 3,079 3,433 5,473
Non-controlling interests 28 (22) 21
Total equity 3,107 3,411 5,494
Non-current liabilities
Borrowings 3,633 3,583 2,724
Environmental rehabilitation and other 963 1,057 1,238
provisions
Provision for pension and post-retirement 152 179 221
benefits
Trade, other payables and deferred income 4 2 10
Derivatives - - 10
Deferred taxation 579 593 1,084
5,331 5,414 5,287
Current liabilities
Borrowings 258 326 859
Trade, other payables and deferred income 820 835 979
Bank overdraft 20 25 -
Taxation 81 54 120
1,179 1,240 1,958
Non-current liabilities held for sale 15 57 60 -
1,236 1,300 1,958
Total liabilities 6,567 6,714 7,245
TOTAL EQUITY AND LIABILITIES 9,674 10,125 12,739
Rounding of figures may result in computational
discrepancies.
Group statement of cash flows
Quarter Quarter Quarter Year Year
ended ended ended ended ended
December September December December December
2013 2013 2012 2013 2012
US Dollar million Reviewed Reviewed Reviewed Reviewed Reviewed
Cash flows from operating
activities
Receipts from customers 1,479 1,396 1,471 5,709 6,523
Payments to suppliers and (1,039) (1,048) (960) (4,317) (4,173)
employees
Cash generated from operations 440 348 511 1,392 2,350
Dividends received from joint - 10 18 18 72
ventures
Taxation refund 22 - 54 23 54
Taxation paid (31) (39) (89) (187) (507)
Net cash inflow from operating 431 319 494 1,246 1,969
activities
Cash flows from investing
activities
Capital expenditure (372) (327) (663) (1,501) (1,925)
Interest capitalised and paid - 2 (5) (5) (12)
Expenditure on intangible (17) (18) (28) (68) (79)
assets
Proceeds from disposal of 2 1 1 10 5
tangible assets
Other investments acquired (18) (17) (17) (91) (97)
Proceeds from disposal of 15 16 13 81 86
investments
Investments in associates and (78) (120) (132) (472) (349)
joint ventures
Proceeds from disposal of - - - 6 20
associates and joint ventures
Loans advanced to associates (14) (3) (1) (41) (65)
and joint ventures
Loans repaid by associates and - 31 1 33 1
joint ventures
Dividends received - - 6 5 7
Proceeds from disposal of - - 6 2 6
subsidiary
Cash in subsidiary acquired - - - - 5
Cash in subsidiary disposed - - (31) - (31)
Reclassification of cash 3 (5) - (2) -
balances to held for sale
assets
Acquisition of subsidiary and - - - - (335)
loan
(Increase) decrease in cash (13) (2) 28 (20) (3)
restricted for use
Interest received 10 4 11 23 36
Loans advanced - - (45) - (45)
Net cash outflow from investing (482) (438) (856) (2,040) (2,775)
activities
Cash flows from financing
activities
Proceeds from issue of share - - - - 2
capital
Proceeds from borrowings 238 1,640 220 2,344 1,432
Repayment of borrowings (260) (1,058) (5) (1,486) (217)
Finance costs paid (42) (58) (56) (200) (145)
Acquisition of non-controlling - - - - (215)
interest
Revolving credit facility and (2) (29) (1) (36) (30)
bond transaction costs
Dividends paid (11) 3 (22) (62) (236)
Net cash (outflow) inflow from (77) 498 136 560 591
financing activities
Net (decrease) increase in cash (128) 379 (226) (234) (215)
and cash equivalents
Translation (5) (1) (5) (30) (5)
Cash and cash equivalents at 761 383 1,123 892 1,112
beginning of period
Cash and cash equivalents at 628 761 892 628 892
end of period (1)
Cash generated from operations
Profit (loss) before taxation 171 32 (214) (2,533) 1,261
Adjusted for:
Movement on non-hedge (28) 34 (25) (94) 35
derivatives and other commodity
contracts
Amortisation of tangible assets 202 153 219 775 830
Finance costs and unwinding of 75 89 67 296 231
obligations
Environmental, rehabilitation (37) (8) (15) (66) (17)
and other expenditure
Special items 88 76 389 3,399 402
Amortisation of intangible 9 6 1 24 5
assets
Fair value adjustment on 12 46 - 58 -
$1.25bn bonds
Fair value adjustment on option - - (17) (9) (83)
component of convertible bonds
Fair value adjustment on - (44) (65) (356) (162)
mandatory convertible bonds
Interest received (15) (8) (12) (39) (43)
Share of associates and joint (4) (25) 42 162 30
ventures' profit (loss)
Other non-cash movements 7 8 8 25 79
Movements in working capital (40) (11) 133 (250) (218)
440 348 511 1,392 2,350
Movements in working capital
Increase in inventories (26) (18) (115) (142) (324)
Decrease (increase) in trade 20 31 70 69 (110)
and other receivables
(Decrease) increase in trade, (34) (24) 178 (177) 216
other payables and deferred
income
(40) (11) 133 (250) (218)
(1) The cash and cash equivalents balance at 31 December 2013 includes a bank
overdraft included in the statement of financial position as part of current
liabilities of $20m (September 2013: $25m).
Rounding of figures may result in computational discrepancies
Group Statement of Changes in Equity
Share Cash Available
capital Other Accumu- flow for
and capital lated hedge sale
US Dollar million premium reserves losses reserve reserve
Balance at 31 December 2011 - as 6,689 171 (1,300) (2) 18
previously reported
Restated for IFRIC 20 adjustments (46)
(1)
Restated for IAS 19R adjustments (1) (5)
Balance at 31 December 2011 6,689 171 (1,351) (2) 18
- restated
Profit for the period 897
Other comprehensive loss (5)
Total comprehensive income (loss) - - 897 - (5)
Shares issued 53
Share-based payment for share awards 15
net of exercised
Disposal of subsidiary
Acquisition of non-controlling (144)
interest
Dividends paid (215)
Dividends of subsidiaries
Translation (9) 7
Balance at 31 December 2012 - 6,742 177 (806) (2) 13
restated
Balance at 31 December 2012 - 6,742 177 (806) (2) 13
restated
Loss for the period (2,230)
Other comprehensive income (loss) 1 8
Total comprehensive (loss) income - - (2,230) 1 8
Shares issued 264
Share-based payment for share awards (13)
net of exercised (2)
Dividends paid (40)
Dividends of subsidiaries
Translation (28) 15 (3)
Balance at 31 December 2013 7,006 136 (3,061) (1) 18
(1) Refer note 14.
Rounding of figures may result in computational discrepancies.
Group Statement of Changes in Equity
Foreign
Actuarial currency Non-
(losses) translation controlling Total
US Dollar million gains reserve Total interests equity
Balance at 31 December 2011 - as (78) (469) 5,029 137 5,166
previously reported
Restated for IFRIC 20 (46) (46)
adjustments (1)
Restated for IAS 19R adjustments 5 - -
(1)
Balance at 31 December 2011 (73) (469) 4,983 137 5,120
- restated
Profit for the period 897 18 915
Other comprehensive loss (20) (92) (117) (117)
Total comprehensive income (20) (92) 780 18 798
(loss)
Shares issued 53 53
Share-based payment for share 15 15
awards
net of exercised
Disposal of subsidiary - (45) (45)
Acquisition of non-controlling (144) (71) (215)
interest
Dividends paid (215) (215)
Dividends of subsidiaries - (17) (17)
Translation 3 1 (1) -
Balance at 31 December 2012 - (90) (561) 5,473 21 5,494
restated
Balance at 31 December 2012 - (90) (561) 5,473 21 5,494
restated
Loss for the period (2,230) 30 (2,200)
Other comprehensive income 49 (433) (375) (375)
(loss)
Total comprehensive (loss) 49 (433) (2,605) 30 (2,575)
income
Shares issued 264 264
Share-based payment for share (13) (13)
awards
net of exercised (2)
Dividends paid (40) (40)
Dividends of subsidiaries - (23) (23)
Translation 16 - -
Balance at 31 December 2013 (25) (994) 3,079 28 3,107
(1) Refer note 14.
Segmental reporting
AngloGold Ashanti's operating segments are being reported based on the
financial information provided to the Chief Executive Officer and the Executive
Committee, collectively identified as the Chief Operating Decision Maker
(CODM). Individual members of the Executive Committee are responsible for
geographic regions of the business.
Quarter ended Year ended
Dec Sep Dec Dec Dec
2013 2013 2012 2013 2012
Reviewed Reviewed Reviewed Reviewed Reviewed
US Dollar million
Gold income
South Africa 428 452 344 1,810 2,013
Continental Africa 568 530 651 2,111 2,609
Australasia 192 83 94 441 426
Americas 335 359 413 1,425 1,656
1,523 1,424 1,501 5,787 6,704
Equity-accounted investments (105) (50) (103) (290) (351)
included above
1,418 1,374 1,398 5,497 6,353
Gross profit (loss)
South Africa 134 42 117 510 651
Continental Africa 117 130 142 475 959
Australasia 30 (11) - (9) 78
Americas 125 114 176 516 736
Corporate and other 5 (2) 17 - 41
410 273 452 1,492 2,465
Equity-accounted investments (6) 3 (34) (47) (111)
included above
404 276 418 1,445 2,354
Capital expenditure
South Africa 112 116 187 451 583
Continental Africa 212 198 304 839 925
Australasia 35 49 189 285 369
Americas 116 83 163 410 409
Corporate and other 2 2 2 8 36
477 448 844 1,993 2,322
Equity-accounted investments (94) (103) (142) (411) (303)
included above
383 345 702 1,582 2,019
Quarter ended Year
ended
Dec Sep Dec Dec Dec
2013 2013 2012 2013 2012
Reviewed Reviewed Reviewed Reviewed Reviewed
oz (000)
Gold production
South Africa 339 329 171 1,302 1,212
Continental Africa 460 382 376 1,460 1,521
Australasia 169 62 55 342 258
Americas 262 270 258 1,001 953
1,229 1,043 859 4,105 3,944
As at As at As at
Dec Sep Dec
2013 2013 2012
Reviewed Reviewed
Unaudited
US Dollar million
Total assets (1)
South Africa 2,325 2,441 3,082
Continental Africa 3,391 3,568 4,846
Australasia 1,108 1,168 1,045
Americas 2,203 2,232 2,878
Corporate and other 647 716 888
9,674 10,125 12,739
(1) During the 2013 year, pre tax impairments, derecognition of goodwill,
tangible assets and intangible assets of $3,029m were accounted for in South
Africa ($311m), Continental Africa ($1,776m) and in the Americas ($942m).
Rounding of figures may result in computational discrepancies.
Notes
for the quarter and year ended 31 December 2013
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 2012
except for the adoption of new standards and interpretations effective
1 January 2013 (refer note 14).
The financial statements of AngloGold Ashanti Limited have been prepared in
compliance with IAS 34, IFRS as issued by the International Accounting
Standards Board, The Financial Reporting Guidelines as issued by the South
African Institute of Chartered Accountants, JSE Listings Requirements and in
the manner required by the South African Companies Act, 2008 (as amended) for
the preparation of financial information of the group for the quarter and year
ended 31 December 2013.
2. Revenue
Quarter ended Year ended
Dec Sep Dec Dec Dec
2013 2013 2012 2013 2012
Reviewed Reviewed Reviewed Reviewed Reviewed
US Dollar million
Gold income 1,418 1,374 1,398 5,497 6,353
By-products (note 3) 39 32 75 149 206
Dividends received - - - 5 7
Royalties received (note 5) 1 1 5 18 23
Interest received 15 8 12 39 43
1,474 1,415 1,490 5,708 6,632
3. Cost of sales
Quarter ended Year ended
Dec Sep Dec Dec Dec
2013 2013 2012 2013 2012
Reviewed Reviewed Reviewed Reviewed Reviewed
US Dollar million
Cash operating costs 858 805 824 3,274 3,172
Insurance reimbursement - - - - (30)
By-products revenue (note 2) (39) (32) (75) (149) (206)
819 773 749 3,125 2,936
Royalties 32 30 22 129 164
Other cash costs 10 12 10 43 35
Total cash costs 861 815 782 3,297 3,135
Retrenchment costs 16 44 2 69 10
Rehabilitation and other non-cash
costs (11) 6 16 18 67
Production costs 866 865 800 3,384 3,212
Amortisation of tangible assets 202 153 219 775 830
Amortisation of intangible assets 9 6 1 24 5
Total production costs 1,077 1,025 1,020 4,183 4,047
Inventory change (35) 39 (15) (37) (83)
1,042 1,064 1,005 4,146 3,964
4. Other operating expenses
Quarter ended Year ended
Dec Sep Dec Dec Dec
2013 2013 2012 2013 2012
Reviewed Reviewed Reviewed Reviewed Reviewed
US Dollar million
Pension and medical defined
benefit provisions (1) 5 2 14 37
Claims filed by former employees
in respect of loss of employment,
work-related accident injuries
and diseases, governmental fiscal
claims and care and maintenance
of old tailings operations 2 2 4 5 10
1 7 6 19 47
5. Special items
Quarter ended Year ended
Dec Sep Dec Dec Dec
2013 2013 2012 2013 2012
Reviewed Reviewed Reviewed Reviewed Reviewed
US Dollar million
Impairment and derecognition of
goodwill, tangible assets and
intangible assets (note 9) 36 8 354 3,029 356
Impairment of other investments
(note 9) 1 4 12 30 16
Impairment reversal of intangible
assets (note 9) - - - - (10)
Impairment of other receivables - - - - 1
Net loss (profit) on disposal and
derecognition of land, mineral
rights, tangible assets and
exploration properties (note 9) - 1 1 (2) 15
Royalties received (note 2) (1) (1) (5) (18) (23)
Indirect tax expenses and legal
claims 7 5 33 43 40
Inventory write-off due to fire at
Geita - - - 14 -
Net insurance proceeds on Geita
claim (13) - - (13) -
Legal fees and other costs related
to contract termination and
settlement costs 16 - 21 19 21
Profit on partial disposal of Rand
Refinery Limited (note 9) - - (14) - (14)
Write-down of stockpiles and heap
leach to net realisable value and
other stockpile adjustments 38 - - 216 -
Retrenchment costs 4 16 - 24 -
Write-off of a loan - - - 7 -
Costs on early settlement of
convertible bonds and transaction
costs on the $1.25bn bond and
standby facility 2 59 - 61 -
90 92 402 3,410 402
During the year ended 31 December 2013, impairment, derecognition of assets and
write-down of inventories to net realisable value and other stockpile
adjustments include the following:
The group reviews and tests the carrying value of its mining assets (including
ore-stock piles) when events or changes in circumstances suggest that the
carrying amount may not be recoverable.
During June 2013, consideration was given to a range of indicators including a
decline in gold price, increase in discount rates and reduction in market
capitalisation. As a result, certain cash generating units' recoverable
amounts, including Obuasi and Geita in Continental Africa, Moab Khotsong in
South Africa and CC&V and AGA Mineração in the Americas, did not support their
carrying values and impairment losses were recognised during 2013. The
impairment for these cash generating units represents 80% of the total
impairment and range between $200m and $700m per cash generating unit on a post
taxation basis.
The indicators were re-assessed as at 31 December 2013 as part of the annual
impairment assessment cycle and the conditions that arose in June 2013 were
largely unchanged and no further cash generating unit impairments arose.
Investments in Inventory
equity-accounted write-down
Tangible Intangible Asset associates and and other Pre-tax
Goodwill asset asset derecognition joint ventures stockpile sub Taxation Post-tax
impairment impairment impairment (1) impairment adjustments total thereon total
US Dollar million
South - 308 - 3 - 1 312 (86) 226
Africa
Continental - 1,651 20 105 179 200 2,155 (564) 1,591
Africa
Americas 15 910 16 1 - 15 957 (333) 624
Corporate - - - - 16 - 16 - 16
and other
15 2,869 36 109 195 216 3,440 (983) 2,457
(1) The Mongbwalu project in the Democratic Republic of the Congo was
discontinued.
Impairment calculation assumptions as at 31 December 2013 - goodwill, tangible
and intangible assets
Management assumptions for the value in use of tangible assets and goodwill
include:
the gold price assumption represents management's best estimate of the future
price of gold. A long-term real gold price of $1,269/oz (2012: $1,584/oz) is
based on a range of economic and market conditions that will exist over the
remaining useful life of the assets.
Annual life of mine plans take into account the following:
proved and probable Ore Reserve;
value beyond proved and probable reserves (including exploration potential)
determined using the gold price assumption referred to above;
In determining the impairment, the real pre-tax rate, per cash generating unit
ranged from 6.21% to 18.07% which was derived from the group's weighted average
cost of capital (WACC) and risk factors consistent with the basis used in 2012.
At 31 December 2013, the group WACC was 7.30% (real post-tax) which is 204
basis points higher than in 2012 of 5.26%, and is based on the average capital
structure of the group and three major gold companies considered to be
appropriate peers. In determining the WACC for each cash generating unit,
sovereign and mining risk factors are considered to determine country specific
risks. Project risk has been applied to cash flows relating to certain mines
that are deep level underground mining projects below infrastructure in South
Africa and Continental Africa region;
foreign currency cash flows translated at estimated forward exchange rates and
then discounted using appropriate discount rates for that currency;
cash flows used in impairment calculations are based on life of mine plans
which range from 3 years to 47 years; and
variable operating cash flows are increased at local Consumer Price Index
rates.
Rounding of figures may result in computational discrepancies.
Impairment calculation assumptions - Investments in equity-accounted associates
and joint ventures
The impairment indicators considered the quoted share price, current financial
position and decline in anticipated operating results. Included in share of
equity-accounted investments' loss of $162m is an impairment of $195m and an
impairment reversal of $31m.
Net realisable value calculation assumptions as at 31 December 2013 - Inventory
Impairments of $178m were raised at 30 June 2013 to net realisable value based
on a spot price of $1,200. Additional impairments of $38m were raised at 31
December 2013 due to stockpile abandonments and other specific adjustments. The
practice of writing down inventories to the lower of cost or net realisable
value is consistent with the view that assets should not be carried in excess
of amounts expected to be realised from their sale or use.
6. Finance costs and unwinding of obligations
Quarter ended Year ended
Dec Sep Dec Dec Dec
2013 2013 2012 2013 2012
Reviewed Reviewed Reviewed Reviewed Reviewed
US Dollar million
Finance costs 67 76 47 247 167
Unwinding of obligations,
accretion of convertible bonds
and other discounts 8 13 20 49 64
75 89 67 296 231
7. Share of associates and joint ventures' profit (loss)
Quarter ended Year ended
Dec Sep Dec Dec Dec
2013 2013 2012 2013 2012
Reviewed Reviewed Reviewed Reviewed Reviewed
US Dollar million
Revenue 117 62 122 334 383
Operating and other expenses (93) (67) (116) (295) (334)
Special items (18) (1) 4 (20) 8
Net interest received (paid) 1 1 3 4 2
Profit (loss) before taxation 7 (5) 13 23 59
Taxation (2) (2) (8) (21) (30)
Profit (loss) after taxation 5 (7) 5 2 29
Net (impairment) reversal of
investments in associates and
joint
ventures (note 9)(1) (1) 31 (45) (164) (57)
Loss on disposal of loan to joint
venture (note 9) - - (2) - (2)
4 25 (42) (162) (30)
(1) During the September 2013 quarter, a loan of $31m was recovered which was
impaired in 2012.
8. Taxation
Quarter ended Year ended
Dec Sep Dec Dec Dec
2013 2013 2012 2013 2012
Reviewed Reviewed Reviewed Reviewed Reviewed
US Dollar million
South African taxation
Mining tax 1 (4) (28) 7 54
Non-mining tax - - 8 1 18
Prior year over provision (25) - (3) (26) (3)
Deferred taxation
Temporary differences 13 8 27 (39) 65
Unrealised non-hedge derivatives
and other commodity contracts 8 (9) 7 25 (10)
Change in estimated deferred tax
rate - - (8) - (9)
Change in statutory tax rate - - - - (131)
(3) (5) 2 (32) (16)
Foreign taxation
Normal taxation 96 25 56 160 354
Prior year over provision - (9) (14) (8) (9)
Deferred taxation(1)
Temporary differences 333 27 (90) (453) (21)
Change in statutory tax rate - - - - 38
429 43 (48) (301) 362
426 38 (46) (333) 346
(1) Included in temporary differences in Foreign taxation is a tax credit
on impairments, derecognition of assets of $915m and write-down of inventories
of $68m. During the fourth quarter, deferred tax assets of $270m and $60m were
derecognised in Ghana and CC&V respectively.
9. Headline (loss) earnings
Quarter ended Year ended
Dec Sep Dec Dec Dec
2013 2013 2012 2013 2012
Reviewed Reviewed Reviewed Reviewed Reviewed
US Dollar million
The (loss) profit attributable to
equity shareholders has been
adjusted by the following to
arrive at headline (loss)
earnings:
(Loss) profit attributable to
equity shareholders (305) 1 (174) (2,230) 897
Impairment and derecognition of
goodwill, tangible assets and
intangible assets (note 5) 36 8 354 3,029 356
Impairment reversal of intangible
assets (note 5) - - - - (10)
Net loss (profit) on disposal and
derecognition of land, mineral
rights, tangible assets and
exploration properties (note 5) - 1 1 (2) 15
Impairment of other investments
(note 5) 1 4 12 30 16
Profit on partial disposal of
Rand Refinery Limited (note 5) - - (14) - (14)
Net impairment (reversal) of
investments in associates and
joint ventures (note 7) 1 (31) 45 164 57
Loss on disposal of loan to joint
ventures (note 7) - - 2 - 2
Special items of associates and
joint ventures 2 - - 2 (4)
Taxation on items above - current
portion 1 - - - (1)
Taxation on items above -
deferred portion (12) (1) (106) (915) (106)
(276) (18) 120 78 1,208
Headline (loss) earnings per
ordinary share (cents) (1) (68) (5) 31 20 312
Diluted headline (loss) earnings
per ordinary share (cents) (2) (68) (13) 15 (62) 251
(1) Calculated on the basic weighted average number of ordinary shares.
(2) Calculated on the diluted weighted average number of ordinary shares of
405,546,908 for the year ended December 2013 and 405,002,405 for the quarter
ended December 2013.
10. Number of shares
Quarter ended Year ended
Dec Sep Dec Dec Dec
2013 2013 2012 2013 2012
Reviewed Reviewed Reviewed Reviewed Reviewed
Authorised number of shares:
Ordinary shares of 25 SA cents each 600,000,000 600,000,000 600,000,000 600,000,000 600,000,000
E ordinary shares of 25 SA cents each 4,280,000 4,280,000 4,280,000 4,280,000 4,280,000
A redeemable preference shares of 50 SA cents each 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000
B redeemable preference shares of 1 SA cents each 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000
Issued and fully paid number of shares:
Ordinary shares in issue 402,628,406 402,271,116 383,320,962 402,628,406 383,320,962
E ordinary shares in issue 712,006 1,579,674 1,617,752 712,006 1,617,752
Total ordinary shares: 403,340,412 403,850,790 384,938,714 403,340,412 384,938,714
A redeemable preference shares 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000
B redeemable preference shares 778,896 778,896 778,896 778,896 778,896
In calculating the basic and diluted number of ordinary shares outstanding for
the period, the following were taken into consideration:
Ordinary shares 402,462,266 386,931,984 383,197,618 389,184,639 382,757,790
E ordinary shares 1,062,510 1,590,750 1,999,566 1,460,705 2,392,316
Fully vested options 1,477,629 1,599,773 1,232,070 1,979,920 1,616,239
Weighted average
number of shares 405,002,405 390,122,507 386,429,254 392,625,264 386,766,345
Dilutive potential
of share options - - - - 1,840,199
Dilutive potential
of convertible bonds - 15,747,913 18,140,000 12,921,644 33,524,615
Diluted number of
ordinary shares 405,002,405 405,870,420 404,569,254 405,546,908 422,131,159
Rounding of figures may result in computational discrepancies.
11. Share capital and premium
As at
Dec Sep Dec
2013 2013 2012
Reviewed Reviewed Reviewed
US Dollar Million
Balance at beginning of period 6,821 6,821 6,782
Ordinary shares issued 259 246 46
E ordinary shares issued and cancelled (6) - (7)
Sub-total 7,074 7,067 6,821
Redeemable preference shares held within the
group (53) (53) (53)
Ordinary shares held within the group (6) (10) (10)
E ordinary shares held within the group (9) (16) (16)
Balance at end of period 7,006 6,988 6,742
12. Exchange rates
Dec Sep Dec
2013 2013 2012
Unaudited Unaudited Unaudited
ZAR/USD average for the year to date 9.62 9.45 8.20
ZAR/USD average for the quarter 10.12 9.96 8.67
ZAR/USD closing 10.45 10.02 8.45
AUD/USD average for the year to date 1.03 1.02 0.97
AUD/USD average for the quarter 1.08 1.09 0.96
AUD/USD closing 1.12 1.07 0.96
BRL/USD average for the year to date 2.16 2.12 1.95
BRL/USD average for the quarter 2.27 2.29 2.06
BRL/USD closing 2.34 2.23 2.05
ARS/USD average for the year to date 5.48 5.28 4.55
ARS/USD average for the quarter 6.07 5.58 4.80
ARS/USD closing 6.52 5.79 4.92
13. Capital commitments
Dec Sep Dec
2013 2013 2012
Reviewed Reviewed Reviewed
US Dollar Million
Orders placed and outstanding on capital
contracts at the prevailing rate of exchange (1) 437 640 1,075
(1) Includes capital commitments relating to associates and joint ventures.
Rounding of figures may result in computational discrepancies.
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,
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 finance arrangements contain financial
covenants and other similar undertakings. To the extent that external
borrowings are required, the group's covenant performance indicates that
existing financing facilities will be available to meet the above commitments.
To the extent that any of the financing facilities mature in the near future,
the group believes that sufficient measures are in place to ensure that these
facilities can be refinanced.
14. Change in accounting policies
The following accounting standards, amendments to standards and new
interpretations have been adopted with effect from 1 January 2013:
IFRS 7 Amendment - Disclosures - Offsetting Financial Assets and
Financial Liabilities
IFRS 10 Consolidated Financial Statements
IFRS 11 Joint Arrangements
IFRS 12 Disclosure of Interests in Other Entities
IFRS 13 Fair Value Measurement
IFRSs Annual Improvements 2009 - 2011
IAS 1 Amendment - Presentation of Items of Other Comprehensive Income
IAS 19 Employee Benefits (revised)
IAS 27 Separate Financial Statements (Revised 2011)
IAS 28 Investments in Associates and Joint Ventures (Revised 2011)
IAS 36 Amendment - Recoverable Amount Disclosures for Non-financial
Assets
IFRIC Stripping Costs in the Production Phase of a Surface Mine
20
New standards and amendments which have an impact on the interim consolidated
financial statements of the group are described below:
IAS 1 Presentation of Financial Statements. The group adopted the amendments to
IAS 1 which required it to group other comprehensive income items by those that
will be reclassified and those that will not be subsequently reclassified to
profit and loss. The amendment affected presentation and had no impact on the
group's financial position or performance.
The accounting policies adopted are significantly consistent with those of the
previous financial year, except for the changes arising due to the adoption of
IFRIC 20 "Stripping Costs in the Production Phase of a Surface Mine" and the
adoption of IAS 19 "Employee Benefits" (revised) (IAS 19) which became
effective for annual reporting periods beginning on or after 1 January 2013.
IFRIC 20 clarifies when an entity should recognise waste removal costs that are
incurred in surface mining activity during the production phase of the mine
("production stripping costs") as an asset. The interpretation impacts the way
in which the group accounts for production stripping costs.
IAS 19 includes a number of amendments to the accounting for defined benefit
plans, including actuarial gains and losses that are now recognised in other
comprehensive income (OCI) and permanently excluded from profit and loss;
expected returns on plan assets that are no longer recognised in profit or
loss, instead, there is a requirement to recognise interest on the net defined
benefit liability (asset) in profit or loss, calculated using the discount rate
used to measure the defined benefit obligations, and unvested past service
costs are now recognised in profit or loss at the earlier of when the
amendment occurs or when the related restructuring or termination costs are
recognised. Other amendments include new disclosures.
In case of the group, the transition to IAS 19 had no impact on the net defined
benefit plan obligations due to the difference in accounting for interest on
plan assets. The effect of the adoption of IAS 19 is explained in Note 14.2.
14.1 IFRIC 20 "Stripping Costs in the Production Phase of a Surface Mine"
Prior to the issuance of IFRIC 20, the accounting for production stripping
costs have been based on general IFRS principles and the Framework, as IFRS had
no specific guidance.
Previously for group accounting purposes stripping costs incurred in open-pit
operations during the production phase to remove additional waste were either
capitalised to mine development costs or charged to operating costs on the
basis of the average life of mine stripping ratio and the average life of mine
costs per tonne. The cost of stripping in any period reflected the average
stripping rates for the orebody as a whole.
IFRIC 20 provides specific guidance for accounting of production stripping
costs in the production phase of a surface mine. IFRIC 20 differs from the life
of mine average strip ratio approach as follows:
The level at which production stripping costs are to be assessed, i.e. at a
component level rather than a life of mine level; and
The way in which any stripping activity assets are to be depreciated.
In addition, specific transitional rules are provided to deal with any opening
deferred stripping balances the group may have recognised under its previous
accounting policy. The impact as a consequence of moving from a life of mine
strip ratio to a strip ratio applicable to a component of an orebody is as
follows:
Transition
IFRIC 20 has been applied retrospectively to production stripping costs
incurred on or after the beginning of the earliest period presented, which for
the group, for the year ended 31 December 2013, is 1 January 2011. Any
previously recognised asset balance(s) that resulted from stripping activity is
to be reclassified as part of an existing asset to which the stripping activity
related, to the extent that there remains an identifiable component of the
orebody with which the predecessor stripping asset can be associated.
If there is no identifiable component of the orebody to which the predecessor
asset relates, the asset is written off via opening accumulated losses at the
beginning of the earliest periods presented, i.e. 1 January 2011.
Impact of IFRIC 20
For purposes of the quarterly results, the adoption of IFRIC 20 at the
transition date of 1 January 2011; the adjustments required for the financial
reporting period from the transition date until the beginning of the preceding
period presented, i.e. 1 January 2011 to 31 December 2011; and the adjustments
required for the financial reporting period 1 January 2012 to 31 December 2012,
had the following cumulative impact on accumulated losses as at 1 January 2012
and 31 December 2012:
1 January 2012 31 December 2012
As IFRIC 20 As IFRIC 20
US Dollar previously adjustments Adjusted previously adjustments Adjusted
million reported (1) balance reported (1) balance
Accumulated
losses
Opening balance (1,300) - (1,300) (823) - (823)
Derecognise
deferred
stripping
balances not
meeting the
requirements of
IFRIC 20 - (99) (99) - (99) (99)
Reversals of
deferred
stripping
movements under
previous
approach - 18 18 - 7 7
Additional
production
stripping costs
capitalised in
terms of IFRIC
20 - 158 158 - 312 312
Amortisation of
deferred
stripping
assets
capitalised in
terms of IFRIC
20 - (57) (57) - (94) (94)
Adjustment to
inventory
valuations as a
result of
deferred
stripping asset
adjustments - (66) (66) - (74) (74)
Effect on
equity
accounted
investments'
profit (loss) - (11) (11) - (13) (13)
Tax effect - 11 11 - (15) (15)
Non-controlling
interests - - - - 1 1
Adjusted
opening
accumulated
losses(2) (1,300) (46) (1,346) (823) 25 (798)
(1) The IFRIC 20 adjustments including transition adjustments; reversal of
historical accounting for deferred stripping; and the accounting for deferred
stripping in line with the requirements of IFRIC 20.
(2) Adjusted opening accumulated losses before the impact of IAS 19 -
refer 14.2.
Impact on the comparative information
The adoption of IFRIC 20 had the following impact on the comparative
information for the quarter ended 31 December 2012:
As IFRIC 20
previously adjustments Adjusted
US Dollar million reported (1) balance
Tangible assets
Opening balance - 1 January 2012 6,525 20 6,545
Reversals of deferred stripping movements 5 (5) -
under previous approach
Production stripping costs capitalised in - 88 88
terms of IFRIC 20
Amortisation of deferred stripping assets - (17) (17)
Other movements in tangible assets 259 - 259
Adjusted closing balance - 30 June 2012 6,789 87 6,876
Reversals of deferred stripping movements 6 (6) -
under previous approach
Production stripping costs capitalised in - 40 40
terms of IFRIC 20
Amortisation of deferred stripping assets - (7) (7)
Other movements in tangible assets 825 - 825
Adjusted closing balance - 30 September 2012 7,620 114 7,733
Reversals of deferred stripping movements - - -
under previous approach
Production stripping costs capitalised in - 26 26
terms of IFRIC 20
Amortisation of deferred stripping assets - (13) (13)
Other movements in tangible assets 28 1 29
Adjusted closing balance - 31 December 2012 7,648 128 7,776
(1) The IFRIC 20 adjustments including transition adjustments; reversal of
historical accounting for deferred stripping; and the accounting for deferred
stripping in line with the requirements of IFRIC 20.
31 December 2012
As IFRIC 20
previously adjustments Adjusted
US Dollar million reported (1) balance
Inventory
Closing balance 1,287 - 1,287
Adjustment to inventory valuation as a result
of deferred stripping asset adjustments - (74) (74)
Adjusted closing balance 1,287 (74) 1,213
(1) The IFRIC 20 adjustments include the effect on the inventory valuation
of the reversal of historical accounting for deferred stripping and the
accounting for deferred stripping in line with the requirements of IFRIC 20.
Quarter ended Year ended
31 December 2012 31 December 2012
As IFRIC 20 As IFRIC 20
US Dollar previously adjustments Adjusted previously adjustments Adjusted
million reported (1) balance reported (1) balance
Profit or loss
(Loss) profit
before taxation (234) - (234) 1,171 - 1,171
Decrease
(increase) in
cash costs
included in cost
of sales due to: - 37 37 - 135 135
- Reversals of
deferred
stripping
movements under
previous
approach - (2) (2) - (11) (11)
- Production
stripping costs
capitalised in
terms of IFRIC
20 - 29 29 - 154 154
- Adjustment to
inventory
valuation as a
result of
deferred
stripping asset
adjustments - 10 10 - (8) (8)
Increase in cost
of sales due to
amortisation of
capitalised
production
stripping costs
in terms of
IFRIC 20 - (13) (13) - (37) (37)
Effect on
equity-accounted
investments'
profit (loss) - 2 2 - (2) (2)
Sub-total (234) 26 (208) 1,171 96 1,267
Taxation 52 (7) 45 (322) (26) (348)
- Normal
taxation (15) (3) (18) (413) (1) (414)
- Deferred
taxation 67 (4) 63 91 (25) 66
Adjusted (loss)
profit (182) 19 (163) 849 70 919
The IFRIC 20 adjustments include transition adjustments; reversal of historical
accounting for deferred stripping; and the accounting for deferred stripping in
line with the requirements of IFRIC 20.
Quarter ended Year ended
31 December 2012 31 December 2012
As IFRIC 20 As IFRIC 20
US Dollar previously adjustments Adjusted previously adjustments Adjusted
million reported (1) balance reported (1) balance
Other
comprehensive
income
(Loss) profit
as previously (182) - (182) 849 - 849
reported
Adjustment to
profit as a
result of - 19 19 - 70 70
deferred
stripping asset
adjustments
Other movements
in other (47) - (47) (122) 1 (121)
comprehensive
income
Adjusted total
comprehensive
(loss) income (229) 19 (210) 727 71 798
for the period,
net of tax
(1) The IFRIC 20 adjustments including transition adjustments; reversal of
historical accounting for deferred stripping; and the accounting for deferred
stripping in line with the requirements of IFRIC 20.
14.2 Employee benefits
The group operates defined benefit pension plans, which require contributions
to be made to separately administered funds.
IAS 19 (revised) has been applied retrospectively from 1 January 2011. As a
result, expected returns on plan assets of defined benefit plans are not
recognised in profit or loss. Instead, interest on net defined benefit
obligation is recognised in profit or loss, calculated using the discount rate
used to measure the net pension obligation or asset.
Impact of transition to IAS 19:
No impact was recorded in the statement of financial position on the defined
benefit plan obligations nor on total shareholders' equity as the impact only
affected the pension cost recorded in the income statement and the
consequential effect on actuarial gains and losses recognised in OCI.
The impact on the adjusted opening accumulated losses, the statement of
comprehensive income and the statement of changes in equity (note 14.1) are set
out below:
1 January 31 December
US Dollar million 2012 2012
Total equity as previously reported 5,166 5,469
Effect of IFRIC 20 adjustments per 14.1 (46) 25
Adjustment to accumulated losses due to the
requirements of IAS 19 (5) (8)
Adjustment to actuarial gain due to the requirements
of IAS 19 5 8
Adjusted total equity 5,120 5,494
Quarter Year
ended ended
31 31
December December
US Dollar million 2012 2012
Total comprehensive income
Opening balance per 14.1 (210) 798
Decrease in profit and loss due to the recognition of
interest on net defined benefit obligation instead of
expected return on plan assets in terms of IAS 19 (6) (6)
Deferred tax thereon 2 2
Decrease in other comprehensive loss due to the decrease in
actuarial loss as a result of the recognition of interest on
net defined benefit obligation instead of expected return on
plan assets in terms of IAS 19 6 6
Deferred tax thereon (2) (2)
Adjusted total comprehensive income (210) 798
There was no impact on the group's consolidated statement of cash flows.
Rounding of figures may result in computational discrepancies.
14.3 Effect of Accounting Policy changes on earnings per share and headline
earnings per share
Quarter
ended Year ended
31 December 31 December
2012 2012
Basic earnings per ordinary share
Previously reported basic (loss) earnings per
ordinary share (cents) (49) 215
(Decrease) increase in basic (loss) earnings per
ordinary share (cents) (4) 17
Restated basic (loss) earnings per ordinary share
(cents) (45) 232
Diluted earnings per ordinary share
Previously reported diluted earnings per ordinary
share (cents) (60) 161
(Decrease) increase in diluted (loss) earnings per
ordinary share (cents) (3) 16
Restated diluted (loss) earnings per ordinary share
(cents) (57) 177
Headline earnings per ordinary share
Previously reported headline earnings per ordinary
share (cents) 28 296
Increase in headline earnings per ordinary share
(cents) 3 16
Restated headline earnings per ordinary share (cents) 31 312
Diluted headline earnings per ordinary share
Previously reported diluted headline earnings per
ordinary share (cents) 13 236
Increase in diluted headline earnings per ordinary
share (cents) 2 15
Restated diluted headline earnings per ordinary share
(cents) 15 251
Rounding of figures may result in computational discrepancies.
15. Non-current assets and liabilities held for sale
Effective 30 April 2013, AngloGold Ashanti announced its plan to sell
the Navachab mine in Namibia. The Navachab gold mine is situated close to
Karibib, about 170 kilometres northwest of the Namibian capital, Windhoek. It
is included in the Continental Africa reporting segment. The open-pit mine,
which began operations in 1989, has a processing plant that handles 120,000
metric tons a month. The mine produced 63,000 ounces of gold in 2013 (2012:
74,000 ounces).
On 10 February 2014, AngloGold Ashanti announced that it signed a binding
agreement to sell Navachab to a wholly-owned subsidiary of QKR Corporation Ltd
(QKR). The agreement provides for an upfront consideration based on an
enterprise value of US$110 million which will be adjusted to take into account
Navachab's net debt and working capital position on the closing date of the
transaction. The upfront consideration is payable in cash on the closing date.
In addition, AngloGold Ashanti will receive deferred consideration in the form
of a net smelter return (NSR). The NSR is to be paid quarterly for a period of
seven years following the second anniversary of the closing date and will be
determined at 2% of ounces sold by Navachab during a relevant quarter subject
to a minimum average gold price of US$1,350 per ounce being achieved and capped
at a maximum of 18,750 ounces sold per quarter.
The transaction is subject to fulfilment of a number of conditions precedent,
including Namibian and South African regulatory and third party approvals,
which are expected to be obtained over the next several months. Navachab is not
a discontinued operation and is not viewed as part of the core assets of the
company.
16. Financial risk management activities
Borrowings
The $1.25bn bonds and the mandatory convertible bonds settled in September
2013, are carried at fair value. The convertible bonds, settled 99.1% in August
2013 and in full in November 2013, and rated bonds are carried at amortised
cost and their fair values are their closing market values at the reporting
date. The interest rate on the remaining borrowings is reset on a short-term
floating rate basis, and accordingly the carrying amount is considered to
approximate fair value.
As at
Dec Sep Dec
2013 2013 2012
Reviewed Reviewed Reviewed
Carrying amount 3,891 3,909 3,583
Fair value 3,704 3,690 3,730
Derivatives
The fair value of derivatives is estimated based on ruling market prices,
volatilities, interest rates and credit risk and includes all derivatives
carried in the statement of financial position.
Embedded derivatives and the conversion features of convertible bonds are
included as derivatives on the statement of financial position.
The following inputs were used in the valuation of the conversion features of
the convertible bonds:
Quarter Quarter Quarter
ended ended ended
Dec Sep Dec
2013 2013 2012
Market quoted bond price % - 100 103.9
Fair value of bonds excluding conversion feature 100
% - 102.6
Fair value of conversion feature % - - 1.3
Total issued bond value $m - 6.6 732.5
The option component of the convertible bonds is calculated as the difference
between the price of the bonds including the option component (bond price) and
the price excluding the option component (bond floor price).
Derivative assets (liabilities) comprise the following:
Assets Liabilities Assets Liabilities Assets Liabilities
non- non- non- non- non- non-
hedge hedge hedge hedge hedge hedge
accounted accounted accounted accounted accounted accounted
US Dollar December 2013
million September 2013 December 2012
Embedded
derivatives - - - - - (1)
Option
component
of
convertible
bonds - - - - - (9)
Total
derivatives - - - - - (10)
The group uses the following hierarchy for determining and disclosing the fair
value of financial instruments:
Level 1: quote prices (unadjusted) in active markets for identical assets
or liabilities;
Level 2: inputs other than quoted prices included in level 1 that are
observable for the asset or liability, either directly (as prices) or
indirectly (derived from prices); and
Level 3: inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
The following tables set out the group's financial assets and liabilities
measured at fair value by level within the fair value hierarchy:
Type of instrument
Level Level Level
1 2 3 Total
US Dollar million December 2013
Assets measured at fair value
Available-for-sale financial assets
Equity securities 47 - - 47
Liabilities measured at fair value
Financial liabilities at fair value through
profit or loss
Option component of convertible bonds - - - -
Embedded derivatives - - - -
Mandatory convertible bonds - - - -
$1.25bn bonds 1,353 - - 1,353
Level Level Level Level Level Level
1 2 3 Total 1 2 3 Total
US Dollar million September 2013 December 2012
Assets measured at fair value
Available-for-sale financial
assets
Equity securities 45 2 - 47 69 2 - 71
Liabilities measured at fair
value
Financial liabilities at fair
value through profit or loss
Option component of convertible
bonds - - - - - 9 - 9
Embedded derivatives - - - - - 1 - 1
Mandatory convertible bonds - - - - 588 - - 588
$1.25bn bonds 1,315 - - 1,315 - - - -
Rounding of figures may result in computational discrepancies.
17. Contingencies
AngloGold Ashanti's material contingent liabilities and assets at 31 December
are detailed below:
Contingencies and guarantees
Dec Dec
2013 2012
Reviewed Restated
US Dollar million
Contingent liabilities
Groundwater pollution (1) - -
Deep groundwater pollution - Africa (2) - -
Indirect taxes - Ghana (3) 28 23
Litigation - Ghana (4) (5) 97 -
ODMWA litigation (6) - -
Other tax disputes - AngloGold Ashanti Brasil Mineração
Ltda (7) 38 38
Sales tax on gold deliveries - Mineração Serra Grande
S.A.(8) 101 156
Other tax disputes - Mineração Serra Grande S.A.(9) 16 19
Tax dispute - AngloGold Ashanti Colombia S.A.(10) 188 161
Tax dispute - Cerro Vanguardia S.A.(11) 63 -
Contingent assets
Indemnity - Kinross Gold Corporation (12) (60) (90)
Royalty - Tau Lekoa Gold Mine (13) - -
Financial Guarantees
Oro Group (Pty) Limited (14) 10 12
481 319
Groundwater pollution - AngloGold Ashanti has identified groundwater
contamination plumes at certain of its operations, which have occurred
primarily as a result of seepage. Numerous scientific, technical and legal
studies have been undertaken to assist in determining the magnitude of the
contamination and to find sustainable remediation solutions. The group has
instituted processes to reduce future potential seepage and it has been
demonstrated that Monitored Natural Attenuation (MNA) by the existing
environment will contribute to improvements in some instances. Furthermore,
literature reviews, field trials and base line modelling techniques suggest,
but are not yet proven, that the use of phyto-technologies can address the soil
and groundwater contamination. Subject to the completion of trials and the
technology being a proven remediation technique, no reasonable estimate can be
made for the obligation.
Deep groundwater pollution - The group has identified a flooding and future
pollution risk posed by deep groundwater in certain underground mines in
Africa. Various studies have been undertaken by AngloGold Ashanti since 1999.
Due to the interconnected nature of mining operations, any proposed solution
needs to be a combined one supported by all the mines located in these gold
fields. As a result, in South Africa, the Department of Mineral Resources and
affected mining companies are now involved in the development of a "Regional
Mine Closure Strategy". In view of the limitation of current information for
the accurate estimation of a liability, no reasonable estimate can be made for
the obligation.
Indirect taxes - AngloGold Ashanti (Ghana) Limited (AGAG) received a tax
assessment for the 2006 to 2008 and for the 2009 to 2011 tax years following
audits by the tax authorities which related to various indirect taxes amounting
to $28m (2012: $23m). Management is of the opinion that the indirect taxes were
not properly assessed and the company has lodged an objection.
Litigation - On 11 October 2011, AGAG terminated its commercial arrangements
with Mining and Building Contractors Limited (MBC) relating to certain
underground development, construction on bulkheads and diamond drilling
services provided by MBC in respect of the Obuasi mine. On 8 November 2012, as
a result of this termination, AGAG and MBC concluded a separation agreement
that specified the terms on which the parties agreed to sever their commercial
relationship. On 23 July 2013, MBC commenced proceedings against AGAG in the
High Court of Justice (Commercial Division) in Accra, Ghana, and served a writ
of summons that claimed a total of approximately $97m in damages. MBC asserts
various claims for damages, including, among others, as a result of the breach
of contract, non-payment of outstanding historical indebtedness by AGAG and the
demobilisation of equipment, spare parts and material acquired by MBC for the
benefit of AGAG in connection with operations at the Obuasi mine in Ghana. MBC
has also asserted various labour claims on behalf of itself and certain of its
former contractors and employees at the Obuasi mine. On 9 October 2013, AGAG
filed a motion in court to refer the action or a part thereof to arbitration.
This motion was set to be heard on 25 October 2013, however, on 24 October
2013, MBC filed a motion to discontinue the action with liberty to reapply. The
application was granted and the matter will accordingly remain dormant until
MBC reapply. AGAG intends to vigorously defend any forthcoming claims.
Litigation - AGAG received a summons on 2 April 2013 from Abdul Waliyu and 152
others in which the plaintiffs allege that they were or are residents of the
Obuasi municipality or its suburbs and that their health has been adversely
affected by emission and/or other environmental impacts arising in connection
with the current and/or historical operations of the Pompora Treatment Plant
(PTP) which was decommissioned in 2000. The claim is to award general damages,
special damages for medical treatment and punitive damages, as well as several
orders relating to the operation of the PTP. AGAG has filed a notice of
intention to defend. In view of the limitation of current information for the
accurate estimation of a liability, no reasonable estimate can be made for the
obligation.
Occupational Diseases in Mines and Works Act (ODMWA) litigation - On 3 March
2011, in Mankayi vs. AngloGold Ashanti, the Constitutional Court of South
Africa held that section 35(1) of the Compensation for Occupational Injuries
and Diseases Act, 1993 does not cover an "employee" who qualifies for
compensation in respect of "compensable diseases" under the Occupational
Diseases in Mines and Works Act, 1973 (ODMWA). This judgement allows such
qualifying employee to pursue a civil claim for damages against the employer.
Following the Constitutional Court decision, AngloGold Ashanti has become
subject to numerous claims relating to silicosis and other Occupational Lung
Diseases (OLD), including several potential class actions and individual
claims.
For example, on or about 21 August 2012, AngloGold Ashanti was served with an
application instituted by Bangumzi Bennet Balakazi ("the Balakazi Action") and
others in which the applicants seek an order declaring that all mine workers
(former or current) who previously worked or continue to work in specified
South African gold mines for the period owned by AngloGold Ashanti and who have
silicosis or other OLD constitute members of a class for the purpose of
proceedings for declaratory relief and claims for damages. In the event the
class is certified, such class of workers would be permitted to institute
actions by way of a summons against AngloGold Ashanti for amounts as yet
unspecified. On September 4, 2012, AngloGold Ashanti delivered its notice of
intention to defend this application. AngloGold Ashanti also delivered a formal
request for additional information that it requires to prepare its affidavits
in respect to the allegations and the request for certification of a class.
In addition, on or about 8 January 2013, AngloGold Ashanti and its subsidiary
Free State Consolidated Gold Mines (Operations) Limited, alongside other mining
companies operating in South Africa, were served with another application to
certify a class ("the Nkala Action"). The applicants in the case seek to have
the court certify two classes namely: (i) current and former mineworkers who
have silicosis (whether or not accompanied by any other disease) and who work
or have worked on certain specified gold mines at any time from 1 January 1965
to date; and (ii) the dependants of mineworkers who died as a result of
silicosis (whether or not accompanied by any other disease) and who worked on
these gold mines at any time after 1 January 1965. AngloGold Ashanti filed a
notice of intention to oppose the application.
On 21 August 2013, an application was served on AngloGold Ashanti, for the
consolidation of the Balakazi Action and the Nkala Action, as well as a request
for an amendment to change the scope of the classes the court was requested to
certify in the previous applications that were brought. The applicants now
request certification of two classes (the "silicosis class" and the
"tuberculosis class"). The silicosis class which the applicants now request the
court to certify would consist of certain current and former mineworkers who
have contracted silicosis, and the dependants of certain deceased mineworkers
who have died of silicosis (whether or not accompanied by any other disease).
The tuberculosis class would consist of certain current and former mineworkers
who have or had contracted pulmonary tuberculosis and the dependants of certain
deceased mineworkers who died of pulmonary tuberculosis (but excluding
silico-tuberculosis).
In October 2012, a further 31 individual summonses and particulars of claim
were received relating to silicosis and/or other OLD. The total amount being
claimed in the 31 summonses is approximately $7 million. On 22 October 2012,
AngloGold Ashanti filed a notice of intention to oppose these claims. AngloGold
Ashanti has also served a notice of exception to the summonses which, if
successful, is expected to require the plaintiffs to redraft the particulars of
claim to correct certain errors. The exception was heard on 3 October 2013.
Judgement has been reserved.
It is possible that additional class actions and/or individual claims relating
to silicosis and/or other OLD will be filed against AngloGold Ashanti in the
future. AngloGold Ashanti will defend all current and subsequently filed claims
on their merits. Should AngloGold Ashanti be unsuccessful in defending any such
claims, or in otherwise favourably resolving perceived deficiencies in the
national occupational disease compensation framework that were identified in
the earlier decision by the Constitutional Court, such matters would have an
adverse effect on its financial position, which could be material. The Company
is unable to reasonably estimate its share of the amounts claimed.
Other tax disputes - In November 2007, the Departamento Nacional de Produção
Mineral (DNPM), a Brazilian federal mining authority, issued a tax assessment
against AngloGold Ashanti Brazil Mineração Ltda (AABM) in the amount of $19m
(2012: $21m) relating to the calculation and payment by AABM of the financial
contribution on mining exploitation (CFEM) in the period from 1991 to 2006.
AngloGold Ashanti Limited's subsidiaries in Brazil are involved in various
other disputes with tax authorities. These disputes involve federal tax
assessments including income tax, royalties, social contributions and annual
property tax. The amount involved is approximately $19m (2012: $17m).
Management is of the opinion that these taxes are not payable.
Sales tax on gold deliveries - In 2006, Mineração Serra Grande S.A. (MSG),
received two tax assessments from the State of Goiás related to payments of
state sales taxes at the rate of 12% on gold deliveries for export from one
Brazilian state to another during the period from February 2004 to the end of
May 2006. The first and second assessments are approximately $62m (2012: $96m;
2011: attributable share $54m) and $39m (2012: $60m; 2011: attributable share
$34m) respectively. In November 2006, the administrative council's second
chamber ruled in favour of MSG and fully cancelled the tax liability related to
the first period. In July 2011, the administrative council's second chamber
ruled in favour of MSG and fully cancelled the tax liability related to the
second period. The State of Goiás has appealed to the full board of the State
of Goiás tax administrative council. In November 2011 (first case) and June
2012 (second case), the administrative council's full board approved the
suspension of proceedings and the remittance of the matter to the Department of
Supervision of Foreign Trade (COMEX) for review and verification. On 28 May
2013, the Full Board of the State of Goiás Tax Administrative Council ruled in
favour of the State of Goiás, however reduced the penalties of the two tax
assessments from 200% to 80%. The company is considering legal options
available in this matter, since it believes that both assessments are in
violation of federal legislation on sales taxes. MSG will be required to
provide a bank guarantee to the tax authorities for the possible taxes payable.
Other tax disputes - MSG received a tax assessment in October 2003 from the
State of Minas Gerais related to sales taxes on gold. The tax administrators
rejected the company's appeal against the assessment. The company is now
appealing the dismissal of the case. The assessment is approximately $16m
(2012: $19m).
Tax dispute - AngloGold Ashanti Colombia S.A. (AGAC) received notice from the
Colombian Tax Office (DIAN) that it disagreed with the company's tax treatment
of certain items in the 2011 and 2010 income tax returns. On 23 October 2013
AGAC received the official assessments from the DIAN which established that an
estimated additional tax of $35m will be payable if the tax returns are
amended. Penalties and interest for the additional tax are expected to be
$153m, based on Colombian tax law. The company believes that it has applied the
tax legislation correctly. AGAC requested that DIAN reconsider its decision and
the company has been officially notified that DIAN will review its earlier
ruling. This review is anticipated to take twelve months, at the end of which
AGAC may file suit if the ruling is not reversed.
Tax dispute - On 12 July 2013, Cerro Vanguardia S.A. received a notification
from the Argentina Tax Authority requesting corrections to the 2007, 2008 and
2009 income tax returns of about $18m relating to the non-deduction of tax
losses previously claimed on hedge contracts. Penalties and interest on the
disputed amounts are estimated at a further $45m. Management is of the opinion
that the taxes are not payable.
Indemnity - As part of the acquisition by AngloGold Ashanti of the remaining
50% interest in MSG during June 2012, Kinross Gold Corporation (Kinross) has
provided an indemnity to a maximum amount of BRL255m ($109m at 31 December 2013
exchange rates) against the specific exposures discussed in items 8 and 9
above. At 31 December 2013, the company has estimated that the maximum
contingent asset is $60m (2012: $90m).
Royalty - As a result of the sale of the interest in the Tau Lekoa Gold Mine
during 2010, the group is entitled to receive a royalty on the production of a
total of 1.5Moz by the Tau Lekoa Gold Mine and in the event that the average
monthly rand price of gold exceeds R180,000/kg (subject to an inflation
adjustment). Where the average monthly rand price of gold does not exceed
R180,000/kg (subject to an inflation adjustment), the ounces produced in that
quarter do not count towards the total 1.5Moz upon which the royalty is
payable.
The royalty is determined at 3% of the net revenue (being gross revenue less
state royalties) generated by the Tau Lekoa assets. Royalties on 413,246oz
produced have been received to date. Royalties of $1m (2012: $1m) were received
during the quarter.
Provision of surety - The company has provided surety in favour of a lender on
a gold loan facility with its associate Oro Group (Pty) Limited and one of its
subsidiaries to a maximum value of $10m (2012: $12m). The probability of the
non-performance under the suretyships is considered minimal. The suretyship
agreements have a termination notice period of 90 days.
18. Concentration of tax risk
There is a concentration of tax risk in respect of recoverable value
added tax, fuel duties and appeal deposits from the Tanzanian government.
The recoverable value added tax, fuel duties and appeal deposits are
summarised as follows:
2013
US Dollar million
Recoverable fuel duties (1) 18
Recoverable value added tax 49
Appeal deposits 4
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.
19. Borrowings
AngloGold Ashanti's borrowings are interest bearing.
20. Announcements
The following significant public announcements were made by AngloGold Ashanti
on the dates specified during the period under the review and up to the date of
the release of the quarterly results on 19 February 2014:
On 9 October 2013, AngloGold Ashanti Holdings Finance plc notified holders of
an optional redemption of the 3.50 per cent Guaranteed Convertible Bonds due in
2014.
On 11 November 2013, AngloGold Ashanti Holdings Finance plc announced
redemption of all of its outstanding 3.50 per cent Guaranteed Convertible Bonds
due in 2014.
On 20 January 2014, the Association of Mineworkers and Construction Union
(AMCU) served notice that it intended to call a strike by its gold mining
industry members on 23 January 2014, demanding higher wages for its members. In
response, the Chamber of Mines, representing the gold mining houses in South
Africa, applied for an interdict against the strike given that wages had
already been settled. The Labour Court initially postponed its judgement to 30
January 2014 ordering AMCU not to strike until then and on that date, the Court
declared the threatened AMCU strike unprotected.
On 17 February 2014, AngloGold Ashanti announced that as a result of his
increasing portfolio of professional commitments, Mr Tito Mboweni has decided
not to stand for re-election as non-executive director at the Annual General
Meeting to be held in May, 2014. Mr Mboweni also stood down as chairman on the
same date. Mr Sipho Pityana, was elected unanimously by the board to take over
from Mr Mboweni.
21. Subsequent events
On 10 February 2014, AngloGold Ashanti announced that it signed a binding
agreement to sell Navachab (refer note 15).
By order of the Board
S M PITYANA S VENKATAKRISHNAN
Chairman Chief Executive Officer
17 February 2014
Non-GAAP disclosure
From time to time AngloGold Ashanti Limited may publicly disclose certain
"Non-GAAP" financial measures in the course of its financial presentations,
earnings releases, earnings conference calls and otherwise.
The group uses certain Non-GAAP performance measures and ratios in managing
the business and may provide users of this financial information with
additional meaningful comparisons between current results and results in
prior operating periods. Non-GAAP financial measures should be viewed in
addition to, and not as an alternative to, the reported operating results or
any other measure of performance prepared in accordance with IFRS. In
addition, the presentation of these measures may not be comparable to
similarly titled measures that other companies use.
A Adjusted headline earnings
Quarter ended Year ended
Dec Sep Dec Dec Dec
2013 2013 2012 2013 2012
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Headline (loss) earnings (276) (18) 120 78 1,208
(note 9)
(Gain) loss on unrealised (28) 34 (25) (94) 35
non-hedge derivatives and
other commodity
contracts
Deferred tax on unrealised 8 (9) 7 25 (10)
non-hedge derivatives and
other commodity
contracts (note 8)
Derecognition of deferred 330 - - 330 -
tax assets
Fair value adjustment on 12 46 - 58 -
$1.25bn bonds
Fair value adjustment on - - (17) (9) (83)
option component of
convertible bonds
Fair value adjustment on - 523 (65) 211 (162)
mandatory convertible bonds
Adjusted headline earnings 45 576 19 599 988
Adjusted headline earnings 11 148 5 153 255
per ordinary share (cents)
(1)
(1) Calculated on the basic weighted average
number of ordinary shares.
B Adjusted gross profit
Quarter ended Year ended
Dec Sep Dec Dec Dec
2013 2013 2012 2013 2012
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million
Reconciliation of gross
profit to adjusted gross
profit:
Gross profit 404 276 418 1,445 2,354
(Gain) loss on unrealised (28) 34 (25) (94) 35
non-hedge derivatives and
other
commodity contracts
Adjusted gross profit 376 310 393 1,351 2,389
C Price received
Quarter ended Year ended
Dec Sep Dec Dec Dec
2013 2013 2012 2013 2012
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million / Imperial
Gold income (note 2) 1,418 1,374 1,398 5,497 6,353
Adjusted for (15) (21) (19) (77) (135)
non-controlling interests
1,403 1,353 1,379 5,420 6,218
Realised loss on other 6 6 5 26 10
commodity contracts
Associates and joint 105 50 103 290 351
ventures' share of gold
income including realised
non-hedge derivatives
Attributable gold income 1,514 1,409 1,487 5,736 6,579
including realised
non-hedge
derivatives
Attributable gold sold - 1,191 1,062 865 4,093 3,953
oz (000)
Revenue price per unit - $/ 1,271 1,327 1,718 1,401 1,664
oz
Rounding of figures may result in
computational discrepancies.
Quarter ended Year ended
Dec Sep Dec Dec Dec
2013 2013 2012 2013 2012
Unaudited Unaudited Unaudited Unaudited Unaudited
US Dollar million / Imperial
D All-in sustaining costs
Cost of sales (note 3) 1,042 1,064 1,005 4,146 3,964
Amortisation of tangible (211) (159) (220) (799) (835)
and intangible assets (note
3)
Adjusted for 2 1 2 6 7
decommissioning
amortisation
Inventory writedown to net 38 - - 216 -
realisable value and other
stockpile
adjustments (note 5)
Corporate administration 36 41 85 199 290
and marketing related to
current operations
Associates and joint 90 52 66 234 229
ventures' share of costs
Sustaining exploration and 16 14 49 94 152
study costs
Total sustaining capex 253 232 375 999 1,236
All-in sustaining costs 1,265 1,245 1,362 5,095 5,043
Adjusted for (16) (19) (20) (71) (99)
non-controlling interests
All-in sustaining costs 1,249 1,226 1,342 5,024 4,944
adjusted for
non-controlling interests
Gold sold - oz (000) 1,191 1,062 865 4,093 3,953
All-in sustaining cost per 1,048 1,155 1,551 1,227 1,251
unit - $/oz
All-in sustaining cost 1,015 1,155 1,551 1,174 1,251
(excluding stockpile
write-offs) per unit - $/oz
E Total costs
Total cash costs (note 3) 861 815 782 3,297 3,135
Adjusted for (20) (22) (14) (110) (95)
non-controlling interests
and non-gold producing
companies
Associates and joint 79 50 64 219 230
ventures' share of total
cash costs
Total cash costs adjusted 920 843 831 3,406 3,270
for non-controlling
interests
and non-gold producing
companies
Retrenchment costs (note 3) 16 44 2 69 10
Rehabilitation and other (11) 6 16 18 67
non-cash costs (note 3)
Amortisation of tangible 202 153 219 775 830
assets (note 3)
Amortisation of intangible 9 6 1 24 5
assets (note 3)
Adjusted for 17 7 (12) 14 (31)
non-controlling interests
and non-gold producing
companies
Equity-accounted associates 17 2 2 23 7
and joint ventures' share
of production costs
Total production costs 1,170 1,061 1,059 4,329 4,158
adjusted for
non-controlling
interests and non-gold
producing companies
Gold produced - oz (000) 1,229 1,043 859 4,105 3,944
Total cash cost per unit - 748 809 967 830 829
$/oz
Total production cost per 952 1,017 1,233 1,054 1,054
unit - $/oz
F EBITDA
Operating profit (loss) 235 80 (199) (2,440) 1,219
Retrenchment costs (note 3) 16 44 2 69 10
Amortisation of tangible 202 153 219 775 830
assets (note 3)
Amortisation of intangible 9 6 1 24 5
assets (note 3)
Impairment and 36 8 354 3,029 356
derecognition of goodwill,
tangible and intangible
assets (note 5)
Impairment reversal of - - - - (10)
intangible assets (note 5)
Impairment of other 1 4 12 30 16
investments (note 5)
Net loss (profit) on - 1 1 (2) 15
disposal and derecognition
of assets (note 5)
(Gain) loss on unrealised (28) 34 (25) (94) 35
non-hedge derivatives and
other commodity contracts
Write-down of stockpiles 38 - - 216 -
and heap leach to net
realisable value and other
stockpile adjustments
(note 5)
Write-off of a loan to - - - 7 -
SOKIMO (note 5)
Share of equity-accounted 34 (4) 13 53 67
associates and joint
ventures' EBITDA
Profit on partial disposal - - (14) - (14)
of subsidiary Rand Refinery
Limited (note 5)
544 327 364 1,667 2,529
G Interest cover
EBITDA (note F) 544 327 364 1,667 2,529
Finance costs (note 6) 67 76 47 247 167
Capitalised finance costs - (2) 4 5 12
67 74 51 252 179
Interest cover - times 8 4 7 7 14
As at As at As at
Dec Sep Dec
2013 2013 2012
Unaudited Unaudited Unaudited
US Dollar million
H Net asset value - cents per
share
Total equity 3,107 3,411 5,494
Mandatory convertible bonds - - 588
3,107 3,411 6,082
Number of ordinary shares 403 404 385
in issue - million (note
10)
Net asset value - cents per 770 845 1,580
share
Total equity 3,107 3,411 5,494
Mandatory convertible bonds - - 588
Intangible assets (267) (288) (315)
2,840 3,123 5,767
Number of ordinary shares 403 404 385
in issue - million (note
10)
Net tangible asset value - 704 773 1,498
cents per share
I Net debt
Borrowings - long-term 3,633 3,583 2,724
portion
Borrowings - short-term 258 326 271
portion
Bank overdraft 20 25 -
Total borrowings (1) 3,911 3,934 2,995
Corporate office lease (25) (26) (31)
Unamortised portion of the 2 (2) 53
convertible and rated bonds
Fair value adjustment on (58) (46) -
$1.25bn bonds
Cash restricted for use (77) (66) (64)
Cash and cash equivalents (648) (786) (892)
Net debt excluding 3,105 3,008 2,061
mandatory convertible bonds
(1) Borrowings exclude the mandatory
convertible bonds (note H).
Rounding of figures may result in
computational discrepancies.
Administrative information
AngloGold Ashanti Limited
Registration No. 1944/017354/06
Incorporated in the Republic of South Africa
Share codes:
ISIN: ZAE000043485
JSE: ANG
LSE: (Shares) AGD
LES : (Dis) AGD
NYSE: AU
ASX: AGG
GhSE: (Shares) AGA
GhSE: (GhDS) AAD
JSE Sponsor: UBS (South Africa) (Pty) Ltd
Auditors: Ernst & Young Inc.
Offices
Registered and Corporate
76 Jeppe Street
Newtown 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
(PO Box 2665)
Accra
Ghana
Telephone: +233 303 772190
Fax: +233 303 778155
United Kingdom Secretaries
St James's Corporate Services Limited
Suite 31, Second Floor
107 Cheapside
London
EC2V 6DN
Telephone: 020 7796 8644
Fax: 020 7796 8645
E-mail: jane.kirton@corpserv.co.uk
Directors
Executive
RN Duffy^ (Chief Financial Officer)
S Venkatakrishnan*§ (Chief Executive Officer)
Non-Executive
SM Pityana^ (Chairman)
R Gasant^
Ms N P January-Bardill^
M J Kirkwood*
Prof L W Nkuhlu^
TT Mboweni^
S M Pityana^
R J Ruston
* British
^South African
Australian
§ Indian
Officers
Group General Counsel and
Company Secretary: Ms M E Sanz Perez
Investor Relations Contacts
South Africa
Stewart Bailey
Telephone: +27 637 6031
Mobile: +27 81 032 2563
E-mail: sbailey@AngloGoldAshanti.com
Fundisa Mgidi
Telephone: +27 637 6763
Mobile: +27 82 374 8820
E-mail: fmgidi@AngloGoldAshanti.com
United States
Sabrina Brockman
Telephone: +1 212 858 7702
Mobile: +1 646 379 2555
E-mail: sbrockman@AngloGoldAshantiNA.com
General E-mail enquiries
investors@AngloGoldAshanti.com
AngloGold Ashanti website
http://www.AngloGoldAshanti.com
Company secretarial E-mail
Companysecretary@AngloGoldAshanti.com
AngloGold Ashanti posts information that is important to investors on the main
page of its website at www.anglogoldashanti.com and under the "Investors" tab
on the main page. This information is updated regularly. Investors should visit
this website to obtain important information about AngloGold Ashanti.
PUBLISHED BY ANGLOGOLD ASHANTI
Share Registrars
South Africa
Computershare Investor Services (Pty) Limited
Ground Floor, 70 Marshall Street
Johannesburg 2001
(PO Box 61051, Marshalltown 2107)
South Africa
Telephone: (SA only) 0861 100 950
Fax: +27 11 688 5218
Website : queries@computershare.co.za
United Kingdom
Shares
Jersey
Computershare Investor Services (Jersey) Ltd
Queensway House
Hilgrove Street
St Helier
Jersey JE1 1ES
Telephone: +44 870 889 3177
Fax: +44 (0) 870 873 5851
Depositary Interests
Computershare Investor Services PLC
The Pavillions
Bridgwater Road
Bristol BS99 6ZY
England
Telephone: +44 (0) 870 702 0000
Fax: +44 (0) 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: (Australia only) 1300 55 2949
Fax: +61 8 9323 2033
Ghana
NTHC Limited
Martco House
Off Kwame Nkrumah Avenue
PO Box K1A 9563 Airport
Accra
Ghana
Telephone: +233 302 229664
Fax: +233 302 229975
ADR Depositary
The Bank of New York Mellon ("BoNY")
BNY Shareowner Services
PO Box 358016
Pittsburgh, PA 15252-8016
United States of America
Telephone: +1 800 522 6645 (Toll free in USA)
or +1 201 680 6578 (outside USA)
E-mail: shrrelations@mellon.com
Website: www.bnymellon.com.comshareowner
Global BuyDIRECTSM
BoNY maintains a direct share purchase and dividend reinvestment plan for
AngloGold Ashanti.
Telephone: +1-888-BNY-ADRS
END
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