As filed with the Securities and Exchange Commission on May 31, 2011
April 26, 2013

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

¨

REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR 12(G) OF THE SECURITIES EXCHANGE ACT OF 1934 OR

x

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 OR

¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 OR

¨

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

o   REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR 12(G) OF THE SECURITIES EXCHANGE ACT OF 1934 OR

þ   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 OR
o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 OR
o   SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2010
2012

Commission file number: 1-14846

AngloGold Ashanti Limited

(Exact Name of Registrant as Specified in its Charter)

Republic of South Africa

(Jurisdiction of Incorporation or Organization)

76 Jeppe Street, Newtown, Johannesburg, 2001

(P.O. Box 62117, Marshalltown, 2107)

South Africa

(Address of Principal Executive Offices)

Lynda Eatwell,

ME Sanz Perez, Company Secretary, Telephone: +27 11 6376128,6376306, Facsimile: +27 11 6376677
86 6750137

E-mail: leatwell@anglogoldashanti.com,rsanz@anglogoldashanti.com, 76 Jeppe Street, Newtown, Johannesburg, 2001, South Africa

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registered

American Depositary Shares

 New York Stock Exchange

Ordinary Shares

 New York Stock Exchange*

6.00 Percent Mandatory Convertible Subordinated Bonds due 2013

 New York Stock Exchange
*

Not for trading, but only in connection with the registration of American Depositary Shares pursuant to the requirements of the Securities and Exchange Commission

Securities registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

Ordinary Shares of 25 ZAR cents each

   381,204,080383,320,962  

E Ordinary Shares of 25 ZAR cents each

   2,806,1261,617,752  

A Redeemable Preference Shares of 50 ZAR cents each

   2,000,000  

B Redeemable Preference Shares of 1 ZAR cent each

   778,896  

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yesþ Noo

Yes x No ¨

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yeso Noþ

Securities Exchange Act of 1934.

Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yesþ Noo

requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant (1) has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yesþ Noo

required to submit and post such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

 

(Check one): Large Accelerated Filerþx

  Accelerated Filero¨  

Non-Accelerated Filero¨

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAPx

þ

International Financial Reporting Standards as issued by the International Accounting Standards Boardo¨Othero¨
     If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yeso Noþ

 


TABLE OF CONTENTS

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

  Yes ¨  No x


TABLE OF CONTENTS  Page

  3

  4

  
  

  5
  

  8
  

  8
  

  9

Part I:

Item 1:

  

  10

Offer statistics and expected timetable

  10

  

Key information

  
3A.  

Selected financial data

  10
3B.  

Capitalization and indebtedness

  14
15
  

Reasons for the offer and the use of proceeds

  1514
  153D.      

Risk factors

14

Item 4:

Information on the company

  41
32
  

History and development of the company

  3241
  36
4B.      134

Business overview

  42
4C.  

Organizational structure

95
4D.  

Property, plants and equipment

  96
134

Item 4A:

  

  121
134

Item 5:

  

  135122
  1365A.      

Operating results

123

5B.  

Liquidity and capital resources

  

149

162
  

Research and development, patents and licenses, etc

  174158
  1745D.      

Trend information

158
5E.  

Off-balance sheet arrangements

  158
174
  

Tabular disclosure of contractual obligations

  158
175

Item 6:

  

  
  6A.  

6A. Directors and senior management

  176159
  182
6B.      191

  203166
  2046C.      

Board practices

172
6D.  

Employees

177
6E.  

Share ownership

179

Item 7:

Major shareholders and related party transactions

  208186
  2107A.      

Major shareholders

188
7B.  

Related party transactions

  189
210
  

Interests of experts and counsel

189

Item 8:

Financial information

    211
8A.    

190

Legal proceedings

190

Dividends

196
8B.

Significant changes

196

Item 9:

The offer and listing

9A.  

Offer and listing details

   212197  
9B.  

Legal proceedingsPlan of distribution

   212197  
9C.  

Dividend policyMarkets

   214198  
9D.  

8B. Significant changesSelling shareholders

   215198  

1


9E.  

Dilution

   198  
    Page9F.      

   198  

Item 10:

9A. Offer and listing detailsAdditional information

10A.

Share capital

199
10B.

Memorandum of Incorporation

202
10C.

Material contracts

213
10D.

Exchange controls

   216  
    21610E.    

   217  
10F.

9D. Selling shareholdersDividends and paying agents

   217221  
10G.

9E. DilutionStatement by experts

   217221  
10H.

9F. Expenses of the issueDocuments on display

   217221  
10I. 

Item 10:AdditionalSubsidiary information

   221  

Item 11:

    218
220
234
234
235
239
239
239
239

   240222  

Item 12:

Description of securities other than equity securities

12A.

Debt securities

   229  
12B.

12A. Debt securitiesWarrants and rights

   249229  
12C.

12B. Warrants and rightsOther securities

   249229  
12D.

12C. Other securitiesAmerican Depositary Shares

12D.3        Depositary fees and charges

   249229  

12D.4        12D. American Depositary Sharespayments for 2012

   229  

12D.3 Depositary fees and chargesPart II:

  249

Item 13:

    249

   250230  

Item 14:

Material modifications to the rights of security holders and use of proceeds

   251231  

Item 15:

Controls and procedures

   252232  

Item 16A:

Audit committee financial expert

   254234  

Item 16B:

Code of ethicsEthics and Whistleblowing Policies

   254235  

Item 16C:

Principal accountant fees and services

   255236  

Item 16D:

Exemptions from the listing standards for audit committees

   255236  

Item 16E:

Purchases of equity securities by the issuer and affiliated purchasers

   255236  

Item 16F:

Change in registrant’s certifying accountant

   256237  

Item 16G:

Corporate Governance

   256237  

Item 16H:

Mine Safety Disclosure

   237  

Part III:

Item 17:

Financial statements

   238  

Item 17:18:

Financial statements

   257239 and F pages  

Item 18:Financial statements19

    258 and F pages

Exhibits

  
 E pages
List of Subsidiaries
Certification of CEO
Certification of CFO
Certification
E&Y Consent
KPMG Consent
KMPG Consent
BDO Consent
Report on MSHA violations
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

2


PRESENTATION OF INFORMATION

AngloGold Ashanti Limited

In this annual report on Form 20-F, unless the context otherwise requires, references to AngloGold, or AngloGold Ashanti, the company, or the Company and the group are references to AngloGold Ashanti Limited or,including, as appropriate, subsidiaries and associate companies of AngloGold Ashanti.

US GAAP financial statements

The audited consolidated financial statements contained in this annual report on Form 20-F for the years ended December 31, 2010, 20092012, 2011 and 20082010 and as at December 31, 20102012 and 20092011 have been prepared in accordance with U.S. generally accepted accounting principles (US GAAP).

IFRS financial statements

As a company incorporated in the Republic of South Africa, AngloGold Ashanti also prepares annual audited consolidated financial statements and unaudited consolidated quarterly financial statements in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). These financial statements (referred to as IFRS statements) are distributed to shareholders and are submitted to the JSE Limited (JSE), as well as the London, New York, Australian and Ghana stock exchanges and Paris and Brussels bourses and are furnished to the US Securities and Exchange Commission (SEC) on Form 6-K.

Currency

AngloGold Ashanti presents its consolidated financial statements in United States dollars.

In this annual report, references to rands, ZAR and R are to the lawful currency of the Republic of South Africa, references to US dollars, dollar or $ are to the lawful currency of the United States, references to are to the lawful currency of the European Union, references to C$ or CAD are to the lawful currency of Canada, references to ARS and peso are to the lawful currency of Argentina, references to AUD and A$ are to the lawful currency of Australia, references to BRL are to the lawful currency of Brazil, reference to NAD and N$ are to the lawful currency of Nambia,Namibia, reference to Tsh is to the lawful currency of the United Republic of Tanzania and references to GHC, cedi or ¢ are to the lawful currency of Ghana.

See “Item 3A.: Selected financial data Exchange rate information” for historical information regarding the US dollar/South African rand exchange rate. On May 24, 2011April 19, 2013 the interbank US dollar/South African rand exchange rate as reported by OANDA Corporation was R6.99/R9.17/$1.00.

Non-GAAP financial measures

In this annual report on Form 20-F, AngloGold Ashanti presents the financial items “total cash costs”, “total cash costs per ounce”, “total production costs” and “total production costs per ounce” which have been determined using industry guidelines and practices promulgated by the Gold Institute and are not US GAAP measures. An investor should not consider these items in isolation or as alternatives to production costs, net income/(loss) applicable to common shareholders, income/(loss) before income tax provision, net cash provided by operating activities or any other measure of financial performance presented in accordance with US GAAP. While the Gold Institute has provided definitions for the calculation of total cash costs and total production costs, the calculation of total cash costs, total cash costs per ounce, total production costs and total production costs per ounce may vary significantly among gold mining companies, and by themselves do not necessarily provide a basis for comparison with other gold mining companies. See “Glossary of selected terms  Financial terms Total cash costs” and —“–“Total production costs” and “Item 5A.: Operating results  Total cash costs and total production costs”.

Shares and shareholders

In this annual report on Form 20-F, references to ordinary shares, ordinary shareholders and shareholders/members, should be read as common stock, common stockholders and stockholders, respectively, and vice versa.

3


CERTAIN FORWARD-LOOKING STATEMENTS

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 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, the completion and commencement 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 expenditure,expenditures and the outcome and consequencesconsequence of any potential or pending litigation or regulatory proceedings containor 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 are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results and forecasts could differ materially from those set out in the forward-looking statements as a result of amongstamong other factors, changes in economic, social and political and market conditions, success of business and operating initiatives,initiative, changes in the regulatory environment and other government actions, including environmental approval, fluctuations in gold prices and exchange rates, the outcome of pending or future litigation proceedings and business and operational risk management and other factors as determined in “Item“item 3D.: Risk Factors”factors” and elsewhere in this annual report. 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 of this annual report or to reflect the occurrence of unanticipated events.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.

CORPORATE WEBSITE
All references to the company’s website contained in this document do not infer that the information contained therein is being incorporated by reference.

4


GLOSSARY OF SELECTED TERMS

The following explanations are not intended as technical definitions but should assist the reader in understanding terminology used in this annual report. Unless expressly stated otherwise, all explanations are applicable to both underground and surface mining operations.

Mining terms

All injury frequency rate:The total number of injuries and fatalities that occurs per million hours worked.

BIF:Banded Ironstone Formation. A chemically formed iron-rich sedimentary rock.

By-products:Any products that emanate from the core process of producing gold, including silver, uranium and sulfuric acid.

Calc-silicate rock:A metamorphic rock consisting mainly of calcium-bearing silicates such as diopside and wollastonite, and formed by metamorphism of impure limestone or dolomite.

Carbon-in-leach (CIL):Gold is leached from a slurry of gold ore with cyanide in agitated tanks and adsorbed on to carbon granules in the same circuit. The carbon granules are separated from the slurry and treated in an elution circuit to remove the gold.

Carbon-in-pulp (CIP):Gold is leached conventionally from a slurry of gold ore with cyanide in agitated tanks. The leached slurry then passes into the CIP circuit where carbon granules are mixed with the slurry and gold is adsorbed on to the carbon. The granules are separated from the slurry and treated in an elution circuit to remove the gold.

Comminution:Comminution is the crushing and grinding of ore to make gold available for treatment. (See also “Milling”).

Contained gold:The total gold content (tons multiplied by grade) of the material being described.

Cut-off grade (surface mines):The minimum grade at which a unit of ore will be mined to achieve the desired economic outcome.

Depletion:The decrease in the quantity of ore in a deposit or property resulting from extraction or production.

Development:The process of accessing an orebody through shafts and/or tunneling in underground mining operations.

Diorite:An igneous rock formed by the solidification of molten material (magma).

Doré:Impure alloy of gold and silver produced at a mine to be refined to a higher purity, usually consisting of 85%85 percent gold on average.

Electro-winning:A process of recovering gold from solution by means of electrolytic chemical reaction into a form that can be smelted easily into gold bars.

Elution:Recovery of the gold from the activated carbon into solution before zinc precipitation or electro-winning.

Gold Produced:Refined gold in a saleable form derived from the mining process.

Grade:The quantity of gold contained within a unit weight of gold-bearing material generally expressed in ounces per short ton of ore (oz/t), or grams per metric tonne (g/t).

Greenschist:A schistose metamorphic rock whose green color is due to the presence of chlorite, epidote or actinolite.

5


Leaching:Dissolution of gold from crushed or milled material, including reclaimed slime, prior to adsorption on to activated carbon.

Life of mine (LOM):Number of years for which an operation is planning to mine and treat ore, and is taken from the current mine plan.

Metallurgical plant:A processing plant constructed to treat ore and extract gold.

Metallurgical recovery factor (MetRF): A measure of the efficiency in extracting gold from the ore deposit.

Milling:A process of reducing broken ore to a size at which concentrating can be undertaken. (See also “Comminution”).

Mine call factor:The ratio, expressed as a percentage, of the total quantity of recovered and unrecovered mineral product after processing with the amount estimated in the ore based on sampling. The ratio of contained gold delivered to the metallurgical plant divided by the estimated contained gold of ore mined based on sampling.

Mineral deposit:A mineral deposit is a concentration (or occurrence) of material of possible economic interest in or on the earth’s crust.

Ore Reserve:That part of a mineral deposit which could be economically and legally extracted or produced at the time of the Ore Reserve determination.

Ounce (oz) (troy):Used in imperial statistics. A kilogram is equal to 32.1507 ounces. A troy ounce is equal to 31.1035 grams.

Pay limit:The grade of a unit of ore at which the revenue from the recovered mineral content of the ore is equal to the sum of total cash costs, closure costs, Ore Reserve development and stay-in-business capital. This grade is expressed as an in-situ value in grams per tonne or ounces per short ton (before dilution and mineral losses).

Precipitate:The solid product of chemical reaction by fluids such as the zinc precipitation referred to below.

Probable Ore Reserve:Ore Reserve for which quantity and grade are computed from information similar to that used for Proven Reserves, but the sites for inspection, sampling, and measurement are further apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for Proven Reserves, is high enough to assume continuity between points of observation.

Productivity:An expression of labor productivity based on the ratio of grams of gold produced per month to the total number of employees in mining operations.

Proven Ore Reserve:Ore Reserve for which the (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade is computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of the Ore Reserve are well established.

Project capital:Capital expenditure to either bring a new operation into production; to materially increase production capacity; or to materially extend the productive life of an asset.

Reclamation:In the South African context, reclamation describes the process of reclaiming slimes (tailings) dumps using high-pressure water cannons to form a slurry which is pumped back to the metallurgical plants for processing.

Recovered grade:The recovered mineral content per unit of ore treated.

Reef:A gold-bearing sedimentary horizon, normally a conglomerate band that may contain economic levels of gold.

Refining:The final purification process of a metal or mineral.

6


Rehabilitation:The process of reclaiming land disturbed by mining to allow an appropriate post-mining use. Rehabilitation standards are defined by country-specific laws, including but not limited to the South African Department of Mineral Resources, the US Bureau of Land Management, the US Forest Service, and the relevant Australian mining authorities, and address among other issues, ground and surface water, topsoil, final slope gradient, waste handling and re-vegetation issues.

Seismic event:A sudden inelastic deformation within a given volume of rock that radiates detectable seismic energy.

Shaft:A vertical or subvertical excavation used for accessing an underground mine; for transporting personnel, equipment and supplies; for hoisting ore and waste; for ventilation and utilities; and/or as an auxiliary exit.

Short ton:Used in imperial statistics. Equal to 2,000 pounds.

Skarn:A rock of complex mineralogical composition, formed by contact metamorphism and metasomatism of carbonate rocks.

SmeltingSmelting::A pyro-metallurgical operation in which gold is further separated from impurities.

Stope:Underground excavation where the orebody is extracted.

Stoping:The process of excavating ore underground.

Stripping ratio:The ratio of waste tonnes to ore tonnes mined calculated as total tonnes mined less ore tonnes mined divided by ore tonnes mined.

Stoping:The process of excavating ore underground.

Syngenetic:Formed contemporaneously with the deposition of the sediment.

Tailings:Finely ground rock of low residual value from which valuable minerals have been extracted.

Tailings dam (slimes dam):Dam facilities designed to store discarded tailings.

Tonne:Used in metric statistics. Equal to 1,000 kilograms.

Ton:Used in imperial statistics. Equal to 2,000 pounds. Referred to as a short ton.

Tonnage:Quantity of material measured in tonnes or tons.

Waste:Material that contains insufficient mineralization for consideration for future treatment and, as such, is discarded

discarded.

Yield:The amount of valuable mineral or metal recovered from each unit mass of ore expressed as ounces per short ton or grams per metric tonne.

Zinc precipitation:Zinc precipitation is the chemical reaction using zinc dust that converts gold in solution to a solid form for smelting into unrefined gold bars.

7


Financial terms

Average number of employees:The monthly average number of production and non-production employees and contractors employed during the year, where contractors are defined as individuals who have entered into a fixed-term contract of employment with a group company or subsidiary. Employee numbers of joint ventures represents the group’s attributable share.

Capital expenditure:Total capital expenditure on tangible assets.

Discontinued operation:A component of an entity that, pursuant to a single plan, has been disposed of or abandoned or is classified as held for sale until conditions precedent to the sale have been fulfilled.

Effective tax rate:Current and deferred taxation charge for the year as a percentage of profit before taxation.

Monetary asset:OANDA Corporation:An asset which will be settled in a fixed or easily determinable amountinternet-based provider of money.

forex trading and currency information services.

Rated bonds:The $700 million 5.375 percent bonds due 2020, and the $300 million 6.5 percent bonds due 2040.

2040 and the $750 million 5.125 percent bonds due 2022.

Region:Defines the operational management divisions within AngloGold Ashanti Limited, namely South Africa, Continental Africa (Ghana, Guinea, Mali, Namibia and Tanzania), Australasia, and the Americas (Argentina, Brazil and United States of America).

Related party:Parties are considered related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions.

Significant influence:The ability, directly or indirectly, to participate in, but not exercise control over, the financial and operating policy decision of an entity so as to obtain economic benefit from its activities.

STRATE:The licensed Central Securities Depository (CSD) for the electronic settlement of financial instruments in South Africa.

Total cash costs:Total cash costs include site costs for all mining, processing and administration, reduced by contributions from by-products and are inclusive of royalties and production taxes. Depreciation, depletion and amortization, rehabilitation, corporate administration, employee severance costs, capital and exploration costs are excluded. Total cash costs per ounce are the attributable total cash costs divided by the attributable ounces of gold produced.

Total production costs:Total cash costs plus depreciation, depletion and amortization, employee severance costs, rehabilitation and other non-cash costs. Corporate administration and exploration costs are excluded. Total production costs per ounce are the attributable total production costs divided by the attributable ounces of gold produced.

Weighted average number of ordinary shares:The number of ordinary shares in issue at the beginning of the year, increased by shares issued during the year, weighted on a time basis for the period during which they have participated in the income of the group, and increased by share options that are virtually certain to be exercised.

Currencies

$, US$ or dollar

  
$, US$or dollar

United States dollars

  United States dollars
ARS  Argentinean peso
A$or AUD

ARS

  Australian dollars
BRL

Argentinean peso

  Brazilian real
€ or Euro  European Euro
C$

A$ or CADAUD

  Canadian

Australian dollars

BRL

Brazilian real

or Euro

European Euro

C$ or CAD

Canadian dollars

GHC, cedi or ¢

  

Ghanaian cedi

N$or NAD

  Namibian dollars
Tsh  Tanzanian Shillings

N$ or NAD

Namibian dollars

Tsh

Tanzanian Shillings

ZAR, R or rand

  

South African rands

8


Abbreviations
  
ADS
  

Abbreviations

ADS

American Depositary Share

ADR

  

American Depositary Receipt

AIFR

  

All injury frequency rate

ASX

  

Australian Securities Exchange

Au

  

Contained gold

bnBBSY

  Billion

Bank Bill Swap Bid Rate

capexbn

  Capital expenditure

Billion

CDIBEE

  

Black Economic Empowerment

capex

Capital expenditure

CDI

Chess Depositary Interests

CLR

  

Carbon Leader Reef

FCFACompanies Act

  Franc Communauté Financiére Africaine

South African Companies Act 71, of 2008

FIFRDMTNP

  

Domestic medium-term notes program

ERP

Enterprise resource planning

FIFR

Fatal injury frequency rate

G or g

  

Grams

g/t

  

Grams per tonne

g/TECGhDS

  Grams per total employee costed

Ghanaian Depositary Share

GhDSGhSE

  Ghanaian Depositary Share

Ghana Stock Exchange

GhSEJORC

  Ghana Stock Exchange
GWh
Gigawatt hours
JORC

Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves

JIBAR

  

Johannesburg Interbank Agreed Rate

JSE

  

JSE Limited (Johannesburg Stock Exchange)

King CodeIII

  

South African King Code on Corporate Governance, 2009 (King III)

Kg or kg

  

Kilograms

Km or km

  

Kilometers

Lb/tLSE

  Pounds per tonne

London Stock Exchange

LSELIBOR

  London Stock Exchange
LIBOR

London Interbank Offer Rate

LOM

  

Life of mine

m2/TEC
Square meters per total employee costed

M or m

  

Meter or million, depending on the context

Moz

  

Million ounces

Mt

  

Million tonnes or tons

Mtpa

  

Million tonnes/tons per annum

NOSANYSE

  National Occupational Safety Association
NYSE

New York Stock Exchange

Oz or oz

  

Ounces (troy)

oz/t

  

Ounces per ton

RIFRoz/TEC

  Reportable injury frequency rate

Ounces per million hours workedtotal employee costed

SAMREC

  

South African Code for the Reporting of Mineral Resources and Mineral Reserves 2007 Edition

SEC

  

United States Securities and Exchange Commission

SRPSOX

  South African Securities Regulation Panel
SOX

Sarbanes-Oxley Act of 2002

T or t

  

Tons (short) or tonnes (metric)

Tpm or tpm
Tonnes/tons per month

Tpa or tpa

  

Tonnes/tons per annum

Tpd or tpd
Tonnes/tons per day

US/USA/United States

  

United States of America

VCR

  

Ventersdorp Contact Reef

VCT
Voluntary counseling and testing

Note:Rounding of figures in this report may result in computational discrepancies.

9


PART I

ITEM 1: IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Not applicable.

ITEM 2: OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3: KEY INFORMATION
3A. SELECTED FINANCIAL DATA

3A.

SELECTED FINANCIAL DATA

The selected financial information set forth below for the years ended December 31, 2008, 20092010, 2011 and 20102012 and as at December 31, 20092011 and 20102012 has been derived from, and should be read in conjunction with, the US GAAP financial statements included under Item 18 of this annual report. The selected financial information for the years ended December 31, 20062008 and 20072009 and as at December 31, 2006, 20072008, 2009 and 20082010 has been derived from the US GAAP financial statements not included in this annual report.

10


    

Year ended December 31,

 

 
   2008 (1)  2009  2010  2011  2012 
   $  $  $  $  $ 
    (in millions, except share and per share amounts) 

Consolidated statement of income

      

Sales and other income

   3,730   3,954   5,402   6,642    6,428  

Product sales(2)

   3,655   3,784   5,334   6,570    6,353  

Interest, dividends and other

   75   170   68   72    75  

Costs and expenses

   4,103   4,852   5,021   4,521    5,217  

Operating costs(3)

   2,452   2,543   3,112   3,555    3,876  

Royalties

   78   84   142   193    164  

Depreciation, depletion and amortization

   615   615   720   789    794  

Impairment of assets

   670   8   91   17    367  

Interest expense

   72   123   151   178    213  

Accretion expense

   22   17   22   28    33  

(Profit)/loss on sale of assets, realization of loans, indirect taxes and other

   (64  10   (3  (43  35  

Non-hedge derivative loss/(gain) and movement on bonds

   258   1,452   786   (196  (265

(Loss)/income from continuing operations before income tax and equity income in associates

   (373  (898  381   2,121    1,211  

Taxation (expense)/benefit

   (22  33   (255  (705  (340

Equity (loss)/income in associates

   (149  88   40   59    (23

Net (loss)/income from continuing operations

   (544  (777  166   1,475    848  

Discontinued operations

   23   -   -    -    -  

Net (loss)/income

   (521  (777  166   1,475    848  

Less: Net income attributable to noncontrolling interests

   (42  (48  (54  (50  (19
                     

Net (loss)/income - attributable to AngloGold Ashanti

   (563  (825  112   1,425    829  

Net (loss)/income - attributable to AngloGold Ashanti

      

(Loss)/income from continuing operations

   (586  (825  112   1,425    829  

Discontinued operations

   23   -    -    -    -  
   (563  (825  112   1,425    829  

Basic (loss)/earnings per common share (in $)(4)

      

From continuing operations

   (1.86  (2.30  0.30   3.71    2.15  

Discontinued operations

   0.07   -    -    -    -  

Net (loss)/income - attributable to AngloGold Ashanti common stockholders

   (1.79  (2.30  0.30   3.71    2.15  

Diluted (loss)/income per common share (in $)(4)

      

From continuing operations

   (1.86  (2.30  0.30   3.17    1.61  

Discontinued operations

   0.07   -    -    -    -  

Net (loss)/income - attributable to common stockholders

   (1.79  (2.30  0.30   3.17    1.61  
                     

Dividend per common share (cents)

   13   13   18   34    56  

 

 
   2008    2009    2010    2011    2012  
   $   $   $   $   $ 
   (in millions, except share and per share amounts) 

 

 

Consolidated balance sheet data (as at period end)

          

Cash and cash equivalents and restricted cash

   585    1,112    585    1,147     927  

Other current assets

   2,328    1,646    1,412    1,484     1,863  

Property, plant and equipment and acquired properties, net

   5,579    6,285    6,762    6,902     7,983  

Goodwill and other intangibles, net

   152    180    197    213     305  

Materials on the leach pad (long-term)

   261    324    331    393     445  
Other long-term assets, derivatives, deferred taxation assets and other long-term inventory   546    1,115    1,101    1,046     1,579  
  

 

 

 

Total assets

   9,451    10,662    10,388    11,185     13,102  
  

 

 

 

Current liabilities

   3,458    4,475    1,004    919     1,959  

Provision for environmental rehabilitation

   302    385    530    653     758  

Deferred taxation liabilities

   1,008    1,171    1,200    1,242     1,157  

Other long-term liabilities and derivatives

   1,277    1,186    3,065    2,849     3,380  

Equity(5)

   3,406    3,445    4,589    5,522     5,848  
  

 

 

 

Total liabilities and equity

   9,451    10,662    10,388    11,185     13,102  
  

 

 

 

Capital stock (exclusive of long-term debt and redeemable preferred stock)

 

   12    12    13    13     13  

Number of common shares as adjusted to reflect changes in capital stock

 

       353,483,410    362,240,669    381,204,080    382,242,343     383,320,962  

Net assets

   3,406    3,445    4,589    5,522     5,848  

 

 

                     
  Year ended December 31, 
  2006  2007(1)  2008(2)  2009  2010 
  $  $  $  $  $ 
  (in millions, except share and per share amounts) 
 
Consolidated statement of income
                    
                     
Sales and other income  2,715   3,095   3,730   3,954   5,402 
   
Product sales(3)
  2,683   3,048   3,655   3,784   5,334 
Interest, dividends and other  32   47   75   170   68 
   
Costs and expenses  2,811   3,806   4,103   4,852   5,021 
Operating costs(4)
  1,785   2,167   2,452   2,543   3,112 
   
Royalties  59   70   78   84   142 
Depreciation, depletion and amortization  699   655   615   615   720 
Impairment of assets  6   1   670   8   91 
Interest expense  77   75   72   123   151 
Accretion expense  13   20   22   17   22 
(Profit)/loss on sale of assets, realization of loans, indirect taxes and other  (36)  10   (64)  10   (3)
Non-hedge derivative loss and movement on bonds  208   808   258   1,452   786 
   
(Loss)/income from continuing operations before income tax and equity income in associates  (96)  (711)  (373)  (898)  381 
Taxation(expense)/benefit  (122)  (118)  (22)  33   (255)
Equity income/(loss) in associates  99   41   (149)  88   40 
   
Net (loss)/income from continuing operations  (119)  (788)  (544)  (777)  166 
Discontinued operations  6   2   23       
   
Net (loss)/income  (113)  (786)  (521)  (777)  166 
Less: Net income attributable to noncontrolling interests  (29)  (28)  (42)  (48)  (54)
   
Net (loss)/income — attributable to AngloGold Ashanti  (142)  (814)  (563)  (825)  112 
   
Net (loss)/income — attributable to AngloGold Ashanti                    
(Loss)/income from continuing operations  (148)  (816)  (586)  (825)  112 
Discontinued operations  6   2   23       
   
   (142)  (814)  (563)  (825)  112 
   
Basic (loss)/earnings per common share (in $)(5)
                    
From continuing operations  (0.54)  (2.93)  (1.86)  (2.30)  0.30 
Discontinued operations  0.02   0.01   0.07       
   
   (0.52)  (2.92)  (1.79)  (2.30)  0.30 
   
Net income/(loss) — attributable to AngloGold Ashanti common stockholders  (0.52)  (2.92)  (1.79)  (2.30)  0.30 
   
Diluted (loss)/income per common share (in $)(5)
                    
From continuing operations  (0.54)  (2.93)  (1.86)  (2.30)  0.30 
Discontinued operations  0.02   0.01   0.07       
   
   (0.52)  (2.92)  (1.79)  (2.30)  0.30 
   
Net income/(loss) — attributable to common stockholders  (0.52)  (2.92)  (1.79)  (2.30)  0.30 
   
Dividend per common share (cents)  39   44   13   13   18 
   

11


                     
  2006  2007(1)  2008(2)  2009  2010 
  $  $  $  $  $ 
  (in millions, except share amounts) 
 
Consolidated balance sheet data (as at period end)
                    
Cash and cash equivalents and restricted cash  482   514   585   1,112   585 
Other current assets  1,394   1,599   2,328   1,646   1,412 
Property, plant and equipment and acquired properties, net  6,266   6,807   5,579   6,285   6,762 
Goodwill and other intangibles, net  566   591   152   180   197 
Materials on the leach pad (long-term)  149   190   261   324   331 
Other long-term assets, derivatives, deferred taxation assets and other long-term inventory  656   680   546   1,115   1,101 
   
Total assets  9,513   10,381   9,451   10,662   10,388 
   
Current liabilities  2,467   3,795   3,458   4,475   1,004 
Provision for environmental rehabilitation  310   394   302   385   530 
Deferred taxation liabilities  1,275   1,345   1,008   1,171   1,200 
Other long-term liabilities, and derivatives  2,092   2,232   1,277   1,186   3,065 
Equity(6)
  3,369   2,615   3,406   3,445   4,589 
   
Total liabilities and equity  9,513   10,381   9,451   10,662   10,388 
   
Capital stock (exclusive of long-term debt and redeemable preferred stock)  10   10   12   12   13 
Number of common shares as adjusted to reflect changes in capital stock  276,236,153   277,457,471   353,483,410   362,240,669   381,204,080 
Net assets  3,369   2,615   3,406   3,445   4,589 
(1)Includes the acquisition of 15 percent minority interest acquired in the Iduapriem and Teberebie mine with effect from September 1, 2007. See “Item 4A.: History and development of the company”.
(2)

2008 results included the acquisition of the remaining 33 percent shareholding in the Cripple Creek and Victor Gold Mining Company with effect from July 1, 2008. In prior years, the investment was consolidated as a subsidiary. The 2008 accounting treatment is therefore consistent with that of prior years. See “Item 4A.: History and development of the company”.

(3)(2)

Product sales represent revenue from the sale of gold.

(4)(3)

Operating costs include production costs, exploration costs, related party transactions, general and administrative, market development costs, research and development, employment severance costs and other.

(5)(4)

The calculations of basic and diluted (loss)/earnings per common share are described in note 98 to the consolidated financial statements “Income/(loss) per common share”. Amounts reflected exclude E Ordinary shares.

(6)(5)

Includes noncontrolling interests.

12


Annual dividends

The table below sets forth the amounts of interim, final and total dividends paid in respect of the past five years in cents per ordinary share. In respect of 2010, AngloGold Ashanti’s board of directors declared an interim2012, a fourth quarter dividend of 6550 South African cents per ordinary share on August 10, 2010, with a record date of September 3, 2010, and a payment date of September 10, 2010, and a final dividend of 80 South African cents per ordinary sharewas declared on February 15, 2011,18, 2013, with a record date of March 11, 201115, 2013 and a payment date of March 18, 2011.

                         
  Interim  Final  Total  Interim  Final  Total 
Year ended December 31 (South African cents per ordinary share)  (US cents per ordinary share(1)) 
 
2006  210   240   450   29.4   32.38   61.78 
2007  90   53   143   12.44   6.60   19.04 
2008  50   50   100   6.4490   4.9990   11.4480 
2009  60   70   130   7.6553   9.4957   17.1510 
2010  65   80   145   9.0034   11.2599   20.2633 
 
28, 2013.

  Year ended December 31(1)    2008     2009     2010     2011     2012 

  South African cents per ordinary share

                    

  First quarter

                     100  

  Second quarter

     50       60       65       90       100  

  Third quarter

                 90       50  

  Fourth quarter

     50       70       80       200       50  

  Total

     100       130       145       380       300  

  US cents per ordinary share(2)

                    

  First quarter

                     11.81  

  Second quarter

     6.45       7.66       9.00       12.08       12.10  

  Third quarter

                 10.87       5.76  

  Fourth quarter

     5.00       9.50       11.26       27.50       5.40  

  Total

     11.45       17.16       20.26       50.45       35.07  

(1)

During quarter three of 2011, the Company changed the frequency of dividend payments from half-yearly to quarterly.

(2)

Dividends for these periods were declared in South African cents. US dollar cents per share figures have been calculated based on exchange rates prevailing on each of the respective payment dates.

Dividends are proposed and approved by the board of directors of AngloGold Ashanti, based

For further information on the interim and year-end financial statements. Dividends are recognized when declared by the board of directors of AngloGold Ashanti. AngloGold Ashanti expects to continue to pay dividends, although there can be no assurance that dividends will be paid in the future or as to the particular amounts that will be paid from year to year. The payment of future dividends will be dependent upon the board’s ongoing assessment of AngloGold Ashanti’s cash flow, earnings, planned capital expenditures, financial conditioncompany’s policy on dividend distributions, see “Item 8A: Consolidated statements and other factors. AngloGold Ashanti will continue to manage capital expenditure in line with profitability and cash flow, and its approach to the dividend on the basis of prudent financial management. Under South African law, AngloGold Ashanti may declare and pay dividends from any capital and reserves included in total shareholders’ equity calculated in accordance with IFRS, subject to its solvency and liquidity. Dividends are payable to shareholders registered at a record date that is after the date of declaration.

Dividends may be declared in any currency at the discretion of the AngloGold Ashanti board or AngloGold Ashanti shareholders at a general meeting. Currently, dividends are declared in South African rands and paid in Australian dollars, South African rands, British pounds and Ghanaian cedis. Dividends paid to registered holders of AngloGold Ashanti ADSs are paid in US dollars converted from South African rands by The Bank of New York Mellon, as depositary, in accordance with the deposit agreement. Exchange rate fluctuations may therefore affect the value of the dividends received by registered shareholders and distributions paid by the relevant depositary to investors holding AngloGold Ashanti securities.
Moreover, fluctuations in the exchange rates of the US dollar may affect the US dollar price of the ADSs on the NYSE. For details on taxation and exchange controls applicable to holders of ordinary shares or ADSs, see “Item 10D.: Exchange controls” and “Item 10E.: Taxation — Taxation of dividends”information – Annual dividend”.
On February 21, 2007, the South African government announced a proposal to replace Secondary Tax on Companies with a 10 percent withholding tax on dividends and other distributions payable to shareholders. The date for the implementation of the withholding tax on dividends has now been announced as April 1, 2012. Although this may reduce the tax payable by the South African operations of the group thereby increasing distributable earnings, the withholding tax will generally reduce the amount of dividends and other distributions received by AngloGold Ashanti shareholders.

13


Exchange rate information

The following table sets forth, for the periods and dates indicated, certain information concerning US dollar/South African rand exchange rates expressed in rands per $1.00. On [May 24, 2011,April 19, 2013, the interbank rate between South African rands and US dollars as reported by OANDA Corporation was R6.99/R9.17/$1.00.

                 
Year ended December 31 High  Low  Year end  Average(1) 
 
2006(2)
  7.94   5.99   7.04   6.81 
2007(2)
  7.49   6.45   6.81   7.03 
2008(2)
  11.27   6.74   9.30   8.26 
2009(3)
  10.70   7.21   7.41   8.44 
2010(3)
  8.08   6.57   6.64   7.34 
2011(4)
  7.35   6.49      6.93 

  Year ended December 31    High     Low     Year end     Average (1) 

  2008(2)

     11.27       6.74       9.30       8.26  

  2009(3)

     10.70       7.21       7.41       8.44  

  2010(3)

     8.08       6.57       6.64       7.34  

  2011(3)

     8.60       6.49       8.14       7.27  

  2012(3)

     8.95       7.46       8.47       8.20  

  2013(3)(4)

     9.31       8.47       9.17       8.96  

(1)

The average rate of exchange on the last business day of each month during the year.

(2)

Based on the noon buying rate in New York City for cable transfers as certified for customs purposes by the Federal Reserve Bank of New York.

(3)

Based on the interbank rate as reported by OANDA Corporation.

(4)

Through to May 24, 2011.April 19, 2013.

         
Exchange rate information for the months of (1) High  Low 
 
November 2010  7.17   6.71 
December 2010  7.15   6.57 
January 2011  7.19   6.49 
February 2011  7.34   6.95 
March 2011  7.19   6.79 
April 2011  6.90   6.50 
May 2011(2)
  7.05   6.51 

  Exchange rate information for the months of (1)    High     Low 

  October 2012

     8.84       8.30  

  November 2012

     8.95       8.63  

  December 2012

     8.90       8.47  

  January 2013

     9.07       8.47  

  February 2013

     8.99       8.81  

  March 2013

     9.31       8.89  

  April 2013(2)

     9.23       9.08  

(1)

Based on the interbank rate as reported by OANDA Corporation.

(2)

Through to May 24, 2011.April 19, 2013.

3B.

CAPITALIZATION AND INDEBTEDNESS

14


3B. CAPITALIZATION AND INDEBTEDNESS
Not applicable.
3C. REASONS FOR THE OFFER AND USE OF PROCEEDS

3C.

REASONS FOR THE OFFER AND USE OF PROCEEDS

Not applicable.

3D. RISK FACTORS

3D.

RISK FACTORS

This section describes many of the risks that could affect AngloGold Ashanti. However, thereThere may however be additional risks unknown to AngloGold Ashanti and other risks, currently believed to be immaterial, that could turn out to be material. Additional risks may arise or become material subsequent to the date of this document. These risks, either individually or simultaneously, could significantly affect the group’s business, financial results and the price of its securities.

Risks related to AngloGold Ashanti’s results of operations and its financial condition as a result of factors that impact the gold mining industry generally.

Commodity market price fluctuations could adversely affect the profitability of AngloGold Ashanti’s operations.

AngloGold Ashanti’s revenues are primarily derived from the sale of gold and, to a lesser extent, uranium, silver and sulfuric acid. The company’s current policy is to sell its products at prevailing market prices and not to enter into price hedging arrangements. The market prices for these commodities fluctuate widely. These fluctuations are caused by numerous factors beyond the company’s control. For example, the market price of gold may fluctuatechange for a variety of reasons, including:

speculative positions taken by investors or traders in gold;

speculative positions taken by investors or traders in gold;
changes in the demand for gold as an investment;
changes in the demand for gold used in jewellery and for other industrial uses, including as a result of prevailing economic conditions;
changes in the supply of gold from production, disinvestment, scrap and hedging;
financial market expectations regarding the rate of inflation;
strength of the US dollar (the currency in which the gold price trades internationally) relative to other currencies;
changes in interest rates;
actual or expected sales or purchases of gold by central banks and the International Monetary Fund;
gold hedging and de-hedging by gold producers;
global or regional political or economic events; and
the cost of gold production in major gold producing countries.

monetary policies announced or implemented by central banks, including the US Federal Reserve;

changes in the demand for gold as an investment or as a result of leasing arrangements;

changes in the demand for gold used in jewellery and for other industrial uses, including as a result of prevailing economic conditions;

changes in the supply of gold from production, divestment, scrap and hedging;

financial market expectations regarding the rate of inflation;

the strength of the US dollar (the currency in which the gold price trades internationally) relative to other currencies;

changes in interest rates;

actual or anticipated sales or purchases of gold by central banks and the International Monetary Fund;

gold hedging and de-hedging by gold producers;

global or regional political or economic events; and

the cost of gold production in major gold producing countries.

The market price of gold has experienced significant volatility.been and continues to be significantly volatile. During 2010,2012, the gold price traded from a highlow of $1,431$1,540 per ounce to a lowhigh of $1,044$1,790 per ounce. On May 24, 2011,April 19, 2013, the afternoon fixingclosing price of gold on the London Bullion Market was $1,527$1,404 per ounce.

The price of gold is often subject to sharp, short-term changes resultingchanges; for example, during the period from speculative activities.Friday, April 12, 2013 through Monday, April 15, 2013, the price of gold dropped $228 per ounce. While the overall supply of and demand for gold can affect its market price, because of the considerable size of above-groundhistorical mined (i.e., above ground) stocks of the metal in comparison to other commodities,means that these factors typically do not affect the gold price in the same manner or degree that the supply of and demandas for other commodities tends to affect their market price.commodities. In addition, the shift in gold demand from physical demandgold to investment and speculative demand may exacerbate the volatility of the gold prices.
price.

During 2012, there appeared to develop a relationship between the central banks and the price of gold with the price falling at the prospect of the end of quantitative easing in some of the main economies.

A sustained period of significant gold price volatility may adversely affect the company’s ability to evaluate the feasibility of undertaking new capital projects, or continuingthe continuity of existing operations, or to make other long-term strategic decisions.

The use of lower gold prices in reserve calculations and life-of-mine plans could result in material write-downs of the company’s investment in mining properties and increased amortization, reclamation and closure charges.

The spot price of uranium has been volatile in past years. During 2012, the price varied between a low of approximately $41 per pound and a high of $53 per pound. On April 19, 2013, the spot price of uranium was $41 per pound. Uranium prices can be affected by several factors, including demand for nuclear reactors, uranium production shortfalls and restocking by utilities. Events like those surrounding the earthquake and tsunami that occurred in Japan in 2011 can also have a material impact on the price of and demand for uranium.

The price of silver has experienced significant fluctuations. From a low of $26 per ounce in January 2012, the price rose steadily to reach a high of $37 per ounce in February 2012. By December 2012, the price had dropped to approximately $30 per ounce. Factors affecting the price of silver include investor demand, physical demand for silver bars, industrial and retail off-take, and silver coin minting. On April 19, 2013, the price of silver was $23 per ounce.

If revenue from sales of gold, salesuranium, silver or sulfuric acid falls below thetheir respective cost of production for an extended period, AngloGold Ashanti may experience losses andor be forced to change its dividend payment policies and/orand curtail or suspend some or all of its capitalexploration projects and/orand existing operations.

15

Declining commodities prices may also force a reassessment of the feasibility of a particular project or projects, which could cause substantial delays or interrupt operations until the reassessment can be completed.


Foreign exchange fluctuations could have a material adverse effect on AngloGold Ashanti’s operational results of operations and financial condition.

Gold is principally a US dollar-priced commodity and most of the company’s revenues are realized in, or linked to, US dollars while production costs are largely incurred in the local currency where the relevant operation is located. As a result ofGiven the company’s global operations and local foreign exchange regulations, some of its funds are held in local currencies, such as the South African rand, Ghanaian cedi, Brazilian real, Argentinean peso and the Australian dollar. The weakening of the dollar, without a corresponding increase in the dollar price of gold against these local currencies, results in higher production costs in dollar terms. Conversely, the strengthening of the dollar, without a corresponding decrease in the dollar price of gold against these local currencies, yields lower production costs in dollar terms.

Exchange rate movements may have a material impact on AngloGold Ashanti’s operating results. For example, the company estimates that a 1 percent strengthening of all of the South African rand, Brazilian real, the Argentinean peso andor the Australian dollar against the US dollar will, other factors remaining equal, result in an increase in total cash costs under IFRS of nearly $5approximately $6 per ounce or approximately 1 percent of the company’s total cash costs. The impact on cash costs determined under US GAAP may be different.

The profitability of AngloGold Ashanti’s operations and the cash flows generated by these operations are significantly affected by fluctuations in input production prices, many of which are linked to the prices of oil and steel.

Fuel, energy and consumables, including diesel, heavy fuel oil, chemical reagents, explosives, tires,tyres, steel and mining equipment consumed in mining operations form a relatively large part of the operating costs and/orand capital expendituresexpenditure of any mining company.

AngloGold Ashanti has no influence over the cost of these consumables, many of which are linked to some degree to the price of oil and steel.

The price of oil has recently been volatile, fluctuating between $65.99$88.40 and $95.12$130.57 per barrel of Brent crude in 2010.2012. As of April 19, 2013, the price of oil was at $100.09 per barrel of Brent Crude. AngloGold Ashanti estimates that for each $1US dollar per barrel rise in the oil price, other factors remaining equal, the averagetotal cash costs under IFRS of all its operations increases by about $0.50approximately $0.90 per ounce with theounce. The impact on cash costs determined under US GAAP may be different. The cash costs of certain of the company’s mines, particularly Yatela, Sadiola, Siguiri, Geita, Navachab, Morila, and Cripple Creek & Victor, Siguiri and Sadiola, which, being more dependent on fuel, are moremost sensitive to changes in the price of oil.

Furthermore, therethe price of steel has also been volatility recently in the price of steel,volatile. Steel is used in the manufacture of most forms of fixed and mobile mining equipment, which is a relatively large contributor to the operating costs and capital expenditure of a mine. For example, the price of flat Hot Rolled Coilhot rolled coil (North American Domestic FOB) steel traded between $557$590 per tonne and $698$733 per tonne in 2010.

2012. On April 19, 2013, the price of flat hot rolled coil (North American Domestic FOB) was $609 per tonne.

Fluctuations in oil and steel prices have a significant impact on operating costcosts and capital expenditure estimates and, in the absence of other economic fluctuations, could result in significant changes in the total expenditure estimates for new mining projects or render certain projects non-viable.

Energy cost increases and power fluctuations and stoppages could adversely impact AngloGold Ashanti’sthe company’s results of operations and its financial condition.

Increasing global demand for energy, concerns about nuclear power, and the limited growth of new supply are impacting the price and supply of energy. The transition of emerging markets to higher energy consumption, carbon taxation as well as unrest and potential conflict in the Middle East, among other factors, could result in increased demand or constrained supply and sharply escalating oil and energy prices.

AngloGold Ashanti’s mining operations are substantially dependent upon electrical power generated by local utilities or by power plants situated at some of its operations.

The unreliability of these local sources of power can have a material effect on the company’s operations, as large amounts of power are required for exploration, development, extraction, processing and other mining activities on the company’s properties.

In South Africa, the company’s operations are substantially dependent on electricity supplied by one state-owned power generation company, Eskom. Electricity is used for most business and safety-critical operations that include cooling, hoisting and dewatering. Loss of power can therefore impact production, employee safety and prolonged outages could lead to flooding of workings and ore sterilization. In 2008, Eskom and the state-owned utility. South African government declared a national emergency and warned that they could no longer guarantee the availability of electricity due to a national supply shortage blamed on coal supply shortages and unplanned generation-set outages as a result of maintenance backlog and asset age. The entire country went into a program of rolling blackouts and AngloGold Ashanti and other mining companies operating in South Africa were forced in late January until mid-March of 2008 to temporarily suspend mining operations at their mines. In addition, lightning damage to power stations can result in power interruptions at our operations. In this regard, AngloGold Ashanti’s two main operational sites in the West Wits region in South Africa had all main power interrupted between March 13, 2013 and March 15, 2013 after a fire caused by lightning damaged a transformer at a main regional substation. The power supply to AngloGold Ashanti’s South African operations may be curtailed or interrupted again in the future. A warning of the “very high” risk of blackouts was re-issued at the start of 2011 and again in 2012. While a national energy conservation program is in place, Eskom cannot guarantee that there will be no power interruptions and is again facing very tight supply reserve margins in 2013, which we expect to continue at least until the new coal fired Medupi Power Station starts to come on line in early 2014.

Eskom and the National Energy Regulator of South Africa or NERSA,(NERSA) recognize the need to increase electricity supply capacity and a series of tariff increases and proposals have been tabledenacted to assist in the funding of this expansion. On February 24,In 2010, NERSA approved an annual increase of about 2524.8 percent for each2010, 25.8 percent for 2011, 25.9 percent for 2012, and 16.0 percent for 2013. The actual increase implemented for 2012 was lowered to 16.09 percent after government intervention, but there can be no assurance as to the existence or nature of any government intervention in the next three years.future. In February 2013, NERSA announced that Eskom would be allowed to increase electricity tarriffs at an average yearly rate of 8 percent between 2013 and 2018. This increase is half the 16 percent sought by the utility in its application. As energy represents a large proportion of the company’s operating costs in South Africa, these increases have anhad, and any future increases will have, a materially adverse impact on the cash costs of its South African operations. In 2008, Eskom warned it could no longer guarantee electricity availability to the South African mining industry. Consequently, AngloGold Ashanti and other mining companies operating in South Africa, were forced to temporarily suspend mining operations at their mines.

The company has since implemented various initiatives at its South African mines to reduce electricity consumption whilst operating at full capacity. AngloGold Ashanti cannot assure that power supply to its South African operations will not be curtailed or interrupted again.

16


In Ghana,also identified a risk of energy shortages in Argentina and the DRC. Furthermore, all of the company’s mining operations in Ghana depend on hydroelectric power supplied by the state-controlled Volta River Authority (VRA), which is supplemented by thermal power from the Takoradi plant and a smaller unit at Tema. During periods of below average inflows from the Volta reservoir, electricity supplies from the Akosombo Dam, the VRA’s primary generation source, may be curtailed; whichcurtailed as occurred in 1998, 2006 and the first half of 2007. During periods of limited electricity availability, the grid is subject to disturbances and voltage fluctuations which can damage equipment. Recent disruptions in natural gas supply from Nigeria, via the West Africa Gas Pipeline, has led to some reduction in thermal generation capacity and the use of more expensive light crude oil which is putting upward pressure on power tariffs. In the past, the VRA has obtained power from neighboring Côte d’Ivoire, which has intermittently experienced political instability and civil unrest. On June 1, 2010,AngloGold Ashanti negotiates rates directly with the VRA increased Obuasi’s electricity tariffs (excluding transmission charges and levies) from 9.3the VRA may not agree to 12.4 US cents per kilowatt hour through to the enda satisfactory rate during future rounds of 2010. According to the formula agreed with the government, the rate is then anticipated to decline to 11.2 US cents per kilowatt hour. These rates are expected to remain at these levels in the short term, but could be impacted by a significant spike in crude oil prices, given Ghana’s dependence on light crude oil for thermal power plants. At Iduapriem, negotiations regarding the increased power tariff are due to commence for the 12 month period ending May 2012. Increased power prices could negatively impact operating costs and cash flow of AngloGold Ashanti’s Ghanaian operations.
negotiations.

The company’s mining operations in Guinea, Tanzania and Mali are dependent on power supplied by outside contractors and supplies of fuel are delivered by road. Power supplies have been disrupted in the past, resulting in production losses due to equipment failure.

Increased energy prices could negatively impact operating costs and cash flow of AngloGold Ashanti’s operations.

Global economic conditions could adversely affect the profitability of AngloGold Ashanti’s operations.

AngloGold Ashanti’s operations and performance depend significantly on worldwide economic conditions.

The global financial markets have experienced considerable volatility from uncertainty surrounding the level and sustainability of the sovereign debt of various countries. Concerns remain regarding the sustainability of the European Monetary Union and its common currency, the euro, in their current form, as well as the negative impacts of the recent downgrade of the sovereign credit rating of the Republic of South Africa. These conditions and other disruptions to international credit markets and financial systems have caused a loss of investor confidence and resulted in widening credit spreads, a lack of price transparency, increased credit losses and tighter credit conditions. Despite the aggressive measures taken by governments and central banks so far, economic recovery has been extremely slow. A significant risk remains that these measures may not prevent the global economy from falling back into an even deeper and longer lasting recession or even a depression.

A global economic downturn and recession may have follow-on effects on AngloGold Ashanti’s business. For example:business that include inflationary cost pressures and commodity market fluctuations.

Other effects could, for example, include:

the insolvency of key suppliers or contractors which could result in contractual breaches and in a supply chain breakdown;

the insolvency of one or more joint venture partners which could result in contractual breaches and disruptions at the insolvency of key suppliers could result in a supply chain break-down;

other income and expense could vary materially from expectations depending on gains or losses realized on the sale or exchange of financial instruments and impairment charges may be incurred with respect to our investments;
AngloGold Ashanti’s defined benefit pension fund may not achieve expected returns on its investments, which could require the company to make substantial cash payments to fund any resulting deficits; and
a reduction in the availability of credit may make it more difficult for the company to obtain financing for its operations and capital expenditures or make that financing more costly.
In addition, uncertainty regarding global economic conditions may also increase the volatility or negatively impact the market value of the company’s securities.joint ventures;

changes in other income and expense which could vary materially from expectations, depending on gains or losses realized on the sale or exchange of financial instruments, and impairment charges that may be incurred with respect to investments;

AngloGold Ashanti’s defined benefit pension fund may not achieve expected returns on its investments, which could require the company to make substantial cash payments to fund any resulting deficits;

a reduction in the availability of credit which may make it more difficult for the company to obtain financing for its operations and capital expenditures or make that financing more costly; and

exposure to the liquidity and insolvency risks of the company’s lenders and customers;

any of which could negatively affect AngloGold Ashanti’s financial results.

Inflation may have a material adverse effect on AngloGold Ashanti’s operational results.

Mostresults of operations.

Many of AngloGold Ashanti’s operations are located in countries that have experienced high rates of inflation during certain periods.

Since the company is unable to influence the market price of gold, it It is possible that significantly higher future inflation in the countries in which itthe company operates may result in an increase in future operational costs in local currencies (without a concurrent devaluation of the local currency of operations against the dollar or an increase in the dollar price of gold). This could have a material adverse effect uponon the company’s results of operations and its financial condition.
While none of AngloGold Ashanti’s operations are currently materially adversely affected by inflation, significantly Significantly higher and sustained inflation, in the future, with a consequent increase in operational costs, could result in the rationalization of higher cost mines.
AngloGold Ashanti facesmines or projects.

Mining companies face many risks related to the development of its mining projects that may adversely affect the company’s results of operations and profitability.

The profitability of mining companies depends partly on the actual costs of developing and operating mines, which may differ significantly from estimates determined at the time the relevant project was approved following completion of its feasibility study. Development of mining projects may also be subject to unexpected problems and delays that could increase the development and operating costs of the relevant project.

17


AngloGold Ashanti’s decision to develop a mineral property is typically based on the results of a feasibility study, which estimatesstudy. Feasibility studies estimate the expected or anticipated economic returns from the project. These estimates are based on assumptions regarding:

future prices of gold, uranium, silver and other metals;

future prices of gold, uranium, silver and other metals;
future currency exchange rates;
tonnage, grades and metallurgical characteristics of ore to be mined and processed;
anticipated recovery rates of gold, uranium, silver and other metals extracted from the ore;
anticipated capital expenditure and cash operating costs; and
the required return on investment.

future currency exchange rates;

tonnage, grades and metallurgical characteristics of ore to be mined and processed;

anticipated recovery rates of gold, uranium, silver and other metals extracted from the ore;

anticipated capital expenditure and cash operating costs; and

required return on investment.

Actual cash operating costs, production and economic returns may differ significantly from those anticipated by such studies and estimates. Operating costs and capital expenditure are to a significant extent driven by the cost of commodity inputs consumed in mining, including fuel, chemical reagents, explosives, tirestyres and steel, and also by credits from by-products, such as silver and uranium.

They could also fluctuate considerably as a result of changes in the prices of mining equipment used in the construction and operation of mining projects.

There are a number of uncertainties inherent in the development and construction of a new mine or the extension toof an existing mine. In addition to those discussed above, these uncertainties include the:

timing and cost of construction of mining and processing facilities, which can be considerable;

timing and cost of construction of mining and processing facilities, which can be considerable;
availability and cost of skilled labor, power, water and transportation;
availability and cost of appropriate smelting and refining arrangements;
requirement and time needed to obtain necessary environmental and other governmental permits; and
availability of funds to finance construction and development activities.

availability and cost of mining and processing equipment;

availability and cost of skilled labor, power, water and transportation;

availability and cost of appropriate smelting and refining arrangements;

applicable requirements and time needed to obtain the necessary environmental and other governmental permits; and

availability of funds to finance construction and development activities.

The remote location of many mining properties, permitting requirements and/or delays, and/orthird-party legal challenges to individual mining projects and broader social or political opposition to mining may increase the cost, timing and complexity of mine development and construction. New mining operations could experience unexpected problems and delays during the development, construction, commissioning and/orand commencement of production. The global demandAngloGold Ashanti may prove unable to successfully develop the La Colosa and Gramalote projects as well as other potential exploration sites in Colombia due to difficulties that could arise in relation to, for miningexample, social and processing equipment maycommunity opposition, litigation, ore body grades, definition of adequate reserves and resources, and the time taken to prove project feasibility that could result in long lead times for the supplyexpiry of such equipment. Finally,permits. For example, on March 11, 2013, Cortolima, a regional environmental authority in Colombia, issued an injunction against AngloGold Ashanti’s Colombian subsidiary, alleging that the subsidiary was operating costwithout proper permits and capital expenditure estimates could fluctuate considerably aswas engaging in activity that was harmful to the environment. Furthermore, at around the same period in time, access to an AngloGold Ashanti drilling site was blockaded by residents of a result of changes in the prices of commodities consumed and mining equipment used in the construction and operation of mining projects.

nearby community.

Accordingly, AngloGold Ashanti’s future development activities may not result in the expansion or replacement of current production, or one or more new production sites or facilities may be less profitable than currently anticipated or may not be profitable at all.loss-making. The company’s operating results and financial conditionscondition are directly related to the success of its project developments. A failure ofin the company’s ability to develop and operate mining projects in accordance with, or in excess of, expectations could negatively impact its results of operations, as well as its financial condition and prospects.

AngloGold Ashanti faces

Mining companies face uncertainty and risks in exploration, feasibility studies and other project evaluation activities.

Exploration

AngloGold Ashanti must continually replace Ore Reserve depleted by mining and production to maintain or increase production levels in the long term. This is undertaken by exploration activities that are speculative in naturenature. The ability of the company to sustain or increase its present levels of gold production depends in part on the success of its projects and feasibilityit may be unable to sustain or increase such levels. For example, in South Africa, the company experienced declining production rates (1.213 million ounces of gold in 2012, compared with 1.624 million ounces of gold in 2011 and 1.784 million ounces in 2010), principally due to continued safety and associated stoppages, mining flexibility constraints and overall falls in grades. The significant decrease in 2012 was also mainly attributable to the industrial strike action at the company’s South African mines, which resulted in the loss of production of 235,000 ounces of gold.

Feasibility studies and other project evaluation activities necessary to determine the current or future viability of a mining operation are often unproductive. TheseSuch activities often require substantial expenditure on exploration drilling to establish the presence, extent and grade (metal content) of mineralized material. AngloGold Ashanti undertakes feasibility studies to estimate the technical and economic viability of mining projects and to determine appropriate mining methods and metallurgical recovery processes. These activities are undertaken to estimate the Ore Reserve.

Once mineralization is discovered, it may take several years to determine whether an adequate Ore Reserves exist,Reserve exists, during which time the economic feasibility of the project may change due to fluctuations in factors that affect both revenue and costs, including:

future prices of metals and other commodities;

future foreign currency exchange rates;

the required return on investment as based on the cost and availability of capital; and

applicable regulatory requirements, including the:

future prices of metals and other commodities;
future foreign currency exchange rates; and
required return on investment as based on the cost and availability of capital.
Feasibility studies also include activities to estimate anticipated:
tonnages, grades and metallurgical characteristics of the ore to be mined and processed;
recovery rates of gold, uranium and other metals from the ore; and
capital expenditure and cash operating costs.

18environmental, health and safety matters.


Feasibility studies also include activities to estimate the anticipated:

tonnages, grades and metallurgical characteristics of the ore to be mined and processed;

recovery rates of gold, uranium and other metals from the ore; and

capital expenditure and cash operating costs.

These estimates depend on assumptions made on available data. Ore Reserve estimates are not precise calculations and depend on the interpretation of limited information on the location, shape and continuity of the mineral occurrence and on the available sampling results. Further exploration and feasibility studies can result in new data becoming available that may change previous Ore Reserve estimates which willand impact the technical and economic viability of production from the project. Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves resulting in revisions to previous Ore Reserve estimates. These revisions could impact depreciation and amortization rates, asset-carrying amounts, provisions for closedown, restoration and environmental clean-uprehabilitation costs.

AngloGold Ashanti undertakes annual revisions to its Ore Reserve estimates based upon actual exploration and production results, depletion, new information on geology, model revisions and fluctuations in production, economic assumptions and operating and other costs. These factors may result in reductions in the Ore Reserve estimates, which could adversely affect the life-of-mine plans and consequently the total value of the company’s mining asset base. Ore Reserve restatements could negatively affect the company’s results of operations, as well as its financial condition and prospects.

The increased overall demand for gold and other commodities, combined with a declining rate of discovery of new gold Ore Reserves, hasReserve in recent years, has resulted in the accelerated depletion of the existing Ore ReservesReserve across the global gold sector. AngloGold Ashanti therefore faces intense competition for the acquisition of attractive mining properties. From time to time, the company evaluates the acquisition of an Ore Reserves,Reserve, development properties andor operating mines, either as stand-alone assets or as part of companies. AngloGold Ashanti’s decision to acquire these properties has been based on a variety of factors including historical operating results, estimates and assumptions regarding the extent of the Ore Reserve, cash and other operating costs, gold prices, projected economic returns and evaluations of existing or potential liabilities associated with the relevant property and its operations and how these factors may change in future. Other than historical operating results, these factors are uncertain and could have an impact on revenue, cash and other operating costs, as well as the process used to estimate the Ore Reserves.

Reserve.

As a result of these uncertainties, exploration and acquisitions by the company may not result in the expansion or replacement of current production or athe maintenance of its existing Ore ReservesReserve net of production or an increase in Ore Reserves.Reserve. AngloGold Ashanti’s results of operations and its financial condition are directly related to the success of its exploration and acquisition efforts and its ability to replace or increase the existing Ore Reserves.Reserve. If the company is not able to maintain or increase its Ore Reserves,Reserve, its results of operations as well as its financial condition and prospects could be adversely affected.

AngloGold Ashanti faces

Mining companies face many risks related to itstheir operations that may adversely impact cash flows and overall profitability.

Gold mining is susceptible to events that may adversely impact a mining company’s ability to produce gold and meet production and cost targets. These events include, but are not limited to:

environmental, as well as health and safety incidents during production or transportation resulting in injury, loss of life, or damage to equipment;

environmental hazards, including discharge of metals, pollutants, radioactivity or hazardous chemicals; industrial accidents or accidents during transportation;
underground fires;
labor disputes;
loss of information integrity or data;
activities of illegal or artisanal miners;
mechanical breakdowns;
electrical power interruptions;
encountering unexpected geological formations;
unanticipated ground conditions;
water ingress;
process water shortages;
unanticipated increases in gold lock-up and inventory levels at heap-leach operations;
fall-of-ground accidents in underground operations;
failure of mining pit slopes, heap-leach facilities, water dams, waste stockpiles and tailings dam walls;
legal and regulatory restrictions and changes to such restrictions;
safety-related stoppages;
seismic activity; and
other natural phenomena, such as floods, droughts or inclement weather conditions, potentially exacerbated by climate change.

ground and surface water pollution;

19social or community disputes or interventions;

security incidents;

surface or underground fires or explosions;

electrocution;

falls from heights and accidents relating to mobile machinery, including shaft conveyances and elevators, drilling blasting and mining operations;

labor force disputes and disruptions;

loss of information integrity or data;

activities of illegal or artisanal miners;

shortages in material and equipment;

mechanical failure or breakdowns and ageing infrastructure;

failure of unproven or evolving technologies;

energy and electrical power supply interruptions or rationing;


unusual or unexpected geological formations, ground conditions, including lack of mineable face length, and ore-pass blockages;

water ingress and flooding;

process water shortages;

metallurgical conditions and gold recovery;

unexpected decline of ore grade;

unanticipated increases in gold lock-up and inventory levels at heap-leach operations;

fall-of-ground accidents in underground operations;

cave-ins, sinkholes, subsidence, rock falls, rock bursts, or landslides;

failure of mining pit slopes, heap-leach facilities, water or solution dams, waste stockpiles and tailings dam walls;

legal and regulatory restrictions and changes to such restrictions;

safety-related stoppages;

gold bullion theft;

corruption, fraud and theft;

allegations of human rights abuses;

seismic activity; and

other natural phenomena, such as floods, droughts or weather conditions, potentially exacerbated by climate change.

Seismic activity is of particular concern in underground mining operations, particularly in South Africa due to the extent and extreme depth of mining, and also in Australia and Brazil due to the depth of mining and residual tectonic stresses. Despite modifications to mine layouts and support technology, as well as other technological improvements employed with a view to minimizing the incidence and impact of seismic activity, seismic events have caused death and injury to employees and contractors and may do so again in future.

future, and have in the past and may again result in safety-related stoppages.

Seismic activity may also cause the loss of mining equipment, damage to or destruction of mineral properties or production facilities, monetary losses, environmental damage and potential legal liabilities in South Africa and elsewhere where seismic activity may be a factor.liabilities. As a result, these events may have a material adverse effect on AngloGold Ashanti’s results of operations and financial condition.

For example, in early 2011, mining of the Ventersdorp Contact Reef shaft pillar at Tau Tona was suspended following a significant seismic event. New equipment had to be purchased and the shutdown contributed to the decline in the operational output of the mine as compared to the previous year.

In the past, floods have also disrupted the operations of some of the company’s mines. For example, unprecedented heavy rains in February and March 2011 in Australia flooded the Sunrise Dam Gold Mine and forced a temporary shutdown of operations. The flood event impacted underground production for approximately four months and open pit production for approximately six months. Despite the shutdown, full costs were incurred as the mining contractors worked on remedial activities to repair damage and rehabilitate flooded areas. The considerable remedial work required adversely impacted cash costs per ounce and the impact of the flood event and the pit wall failure together significantly reduced planned production at the plant.

Mining companies’ operations are vulnerable to infrastructure constraints.

Mining, processing, development and exploration activities depend on adequate infrastructure. Reliable rail, ports, roads, bridges, power sources, power transmission facilities and water supply are critical to the company’s business operations and affect capital and operating costs. These infrastructure and services are often provided by third parties whose operational activities are outside the control of the company.

Interferences in the maintenance or provision of infrastructure, including unusual weather phenomena, sabotage and social unrest, could impede the company’s ability to deliver its products on time and adversely affect AngloGold Ashanti’s business, results of operations and financial condition.

Establishing infrastructure for the company’s development projects requires significant resources, identification of adequate sources of raw materials and supplies, and necessary co-operation from national and regional governments, none of which can be assured.

AngloGold Ashanti has operations or potential development projects in countries where government-provided infrastructure may be inadequate and regulatory regimes for access to infrastructure may be uncertain, which could adversely impact the efficient operation and expansion of its business. AngloGold Ashanti may not secure and maintain access to adequate infrastructure in the future, or it may not do so on reasonable terms.

Mining companies face strong competition.

The mining industry is competitive in all of its phases. AngloGold Ashanti competes with other mining companies and individuals for specialized equipment, components and supplies necessary for exploration and development, for mining claims and leases on exploration properties and for the acquisition of mining assets. These competitors may have greater financial resources, operational experience and technical capabilities than AngloGold Ashanti. Competition may increase AngloGold Ashanti’s cost of acquiring suitable claims, properties and assets.

Mining companies are subject to extensive health and safety laws and regulations.

Gold mining operations are subject to a variety of industry-specificextensive health and safety laws and regulations depending on whichin every jurisdiction they are located.operate in. These laws and regulations, arealong with international and industry standards, designed to protect and improve the safety and health of employees.

employees, require extensive compliance measures.

From time to time, new or improvedupdated health and safety laws, regulations and regulationsstandards are introduced in jurisdictions in which AngloGold Ashanti operates.introduced. Should compliance with new standardsthese require a material increase in expenditure or material changes or interruptions to operations or production, including as a result of any temporary failure to comply with applicable regulations, the company’s results of operations and the financial condition of the company could be adversely affected. Furthermore, AngloGold Ashanti is implementing an enhanced safety program, which could result in additional costs for the company.

In South Africa, for example,some of the jurisdictions in which AngloGold Ashanti operates, the government has introducedenforces compulsory shutdowns of operations to enable investigations into the cause of accidents at those operations.accidents. Certain of the company’s operations have been temporarily suspended for this reasonsafety reasons in the past.

In South Africa, in particular, so-called ‘Section 54 safety stoppages’ have become a significant issue. In 2011, the Inspector of Mines ordered the shutdown of entire mines in cases of relatively minor violations, which had a material impact on production at these mines. In particular, the Inspector issued Kopanang eleven Section 54 notices during 2011. Each notice resulted in Kopanang suspending operations either fully or partially in order to comply with the inspector’s recommendations on safety.

Safety-related stoppages resulted in the direct loss of 72,900 and 72,400 ounces of gold production during 2011 and 2012, respectively, in South Africa.

A working group comprised of the inspectorate, the mining industry and organized labor has been formed to address the trend of increasing safety stoppages in South Africa. However, the working group may not agree on how to address this issue and the number of safety stoppages may continue or even increase in the future.

AngloGold Ashanti’s reputation as a responsible company and employer could be damaged by any significant governmental investigation or enforcement of health and safety laws, regulations or standards. Any of these factors could have a material adverse effect on the company’s results of operations and financial condition.

Mining companies are increasingly required to consideroperate in a sustainable manner and ensure the sustainable development of, andto provide benefits to the communitiesaffected communities. Failure to comply with these requirements can result in legal suits, additional operational costs, investor divestment, loss of ‘social licence to operate’, and countries in which they operate.

adversely impact mining companies’ financial condition.

As a result of public concern about the perceived ill effects of economic globalization, businesses in general and large multinational mining corporations such as AngloGold Ashanti in particular face increasing public scrutiny of their activities.

These businesses are under pressure to demonstrate that while they seek a satisfactory return on investment for shareholders, human rights are respected and other stakeholderssocial partners, including employees, host communities surrounding operations and more broadly the countries in which they operate, also benefit from their commercial activities. Such pressures tend to be particularly focused on companies whose activities are perceived to have, or have, a high impact on their social and physical environment. The potential consequences of these pressures includeand the adverse publicity in cases where companies are believed not to be creating sufficient social and economic benefit may result in additional operating costs, reputational damage, active community opposition, allegations of human rights abuses, legal suits and social spending obligations.

investor withdrawal.

Existing and proposed mining operations are often located at or near existing towns and villages, natural water courses and other infrastructure. As the impacts of dust generation, waste storage, water pollution or shortage, in particular, may be immediate and directly adverse to those communities, poor environmental management practices, or adverse changes in the supply or quality of water can result in community protest, regulatory sanctions or ultimately in the withdrawal of community and government support for company operations. For example, opposition to mining activity in the Tolima province of Colombia, which hosts the La Colosa deposit, has centered on the perception that large-scale mining activity will have a detrimental impact on the region’s river systems.

Mining operations must therefore be designed to minimize their impact on such communities and the environment, either by changing mining plans to avoid such impact, by modifying mining plans and operations, or by relocating the affected people to an agreed location. TheseResponsive measures may also include agreed levelsthe full restoration of livelihoods of those impacted.

In addition, as AngloGold Ashanti has a long history of mining operations in certain regions, issues may arise regarding historical as well as potential future environmental or health impacts in those areas. For example, certain parties, including non-governmental organizations, community groups and institutional investors, have raised concerns about surface and groundwater quality, among other issues, in the area surrounding the company’s Obuasi and Iduapriem mines in Ghana, including potential impacts to local rivers and wells used for water from heavy metals, arsenic and cyanide as well as sediment and mine rock waste.

Disputes with surrounding communities may also affect mining operations, particularly where they result in restrictions of access to supplies and to mining operations. The miners’ access to land may be subject to the rights or asserted rights of various community stakeholders, including indigenous people. Access to land and land use is of critical importance to the company for exploration and mining, as well as for ancillary infrastructure. In some cases, AngloGold Ashanti has had difficulty gaining access to new land because of perceived poor community compensation practices. For example, compensation remains a significant area of concern in Siguiri in Guinea. In 2011, a violent community protest interrupted operations for any adverse impactthree days, which contributed to the mining operation may continueproject’s decline in production as compared to have upon2010. Delays in projects attributable to a lack of community support can translate directly into a decrease in the community. value of a project or into an inability to bring the project to production.

The cost of these measures and other issues relating to the sustainable development of mining operations could place significant demands on personnel resources, could increase capital and operating costs and therefore could have an adverse impact uponon AngloGold Ashanti’s reputation, results of operations and financial condition.

Mining companies are subject to extensive environmental laws and regulations.

Mining companies are subject to extensive environmental laws and regulations in the various jurisdictions in which they operate.operate in addition to international standards. These regulations and standards establish limits and conditions on producers’a miner’s ability to conduct their operations. its operations and govern, among other things, extraction, use and conservation of water resources; air emissions (including dust control) and water treatment and discharge; regulatory and community reporting; clean-up of contamination; worker safety and community health; and the generation, transportation, storage and disposal of solid and hazardous wastes, such as acids, radioactive materials, and mine tailings.

The cost of compliance with environmental laws and regulations is expected to continue to be significant to AngloGold Ashanti.

AngloGold Ashanti could incur fines, penalties and other sanctions, clean-up costs, and third-party claims for personal injury or property damages, suffer reputational damage, or be required to install costly pollution control equipment or to modify or suspend operations, as a result of actual or alleged violations of environmental laws and regulations. In addition, unknown environmental hazards may exist on the company’s properties which may have been caused by previous owners or operators.

For example, in 2010 AngloGold Ashanti’s Obuasi mine in Ghana suspended gold processing operations for five days to implement a revised water management strategy aimed at reducing contaminants contained in its discharge. Brief stoppages after environmental incidents, such as pipeline failures, have occurred more recently at that mine. Furthermore, following a temporary suspension of operations at the Iduapriem mine, the company, with the approval of the Ghana Environmental Protection Agency, constructed an interim tailings storage facility for tailings deposition for a year while a new tailings storage facility was being constructed. The company continues to seek to make improvements in water quality management to reduce the risk of unpermitted and/or accidental discharges and, in addition, it is currently investigating allegations of impacts on water quality in the area of these mines.

Failure to comply with applicable environmental laws and regulations may also result in the suspension or revocation of operating permits. AngloGold Ashanti’s ability to obtain and maintain permits and to successfully operate in particular communities may be adversely impacted by real or perceived effects on the environment or human health and safety associated with AngloGold Ashanti’s or other mining companies’ activities.

For example, in Colombia, various plaintiffs, including associations that represent local communities, have brought legal proceedings against AngloGold Ashanti Colombia S.A. (AGAC) alleging that AGAC has violated applicable environmental laws in connection with the La Colosa project. If the plaintiffs were to prevail, AGAC’s three core concession contracts relating to the La Colosa project may be cancelled, AGAC would be required to abandon the La Colosa project and all other existing mining concession contracts and pending proposals for new mining concession contracts of AGAC, though not those of other companies of the AngloGold Ashanti group operating in Colombia. In addition, AGAC would be banned from doing business with the Colombian government for a period of five years. See Item 8A.: – “Legal proceedings”.

Environmental laws and regulations are continually changing and are generally becoming more restrictive. In particular, the use of sodium cyanide in metallurgical processing is under increasing environmental scrutiny and prohibited in certain jurisdictions.stringent. Changes to AngloGold Ashanti’s environmental compliance obligations or operating practices could adversely affect the company’s rate of production and revenue. Variations in laws and regulations, assumptions made

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to estimate liabilities, standards or operating procedures, more stringent emission or pollution thresholds or controls, or the occurrence of unanticipated conditions, may require operations to be suspended or permanently closed, and could increase AngloGold Ashanti’s expenses and provisions. These expenses and provisions could adversely affect the company’s results of operations and its financial condition.

For example, the use of sodium cyanide in metallurgical processing is under increasing environmental scrutiny and is prohibited for certain jurisdictions. As there are few, if any, effective substitutes in extracting gold from the ore, any ban or material restrictions on the use of sodium cyanide in mining operations in the jurisdictions where AngloGold Ashanti conducts its operations could adversely affect the company’s results of operations and financial condition. In addition, leaks or discharges of sodium cyanide or other hazardous materials could result in liabilities for clean-up or personal injury that may not be covered by insurance.

AngloGold Ashanti’s operations are heavily dependent upon access to substantial volumes of water for use in the mining and extractive processes and typically are subject to water-use permits that govern usage and require, among other things, that mining operations maintain certain water quality upon discharge. Water quality and usage are areas of concern globally, such as with respect to the company’s mining operations in Ghana and South Africa and its exploration projects in Colombia, where there is significant potential environmental and social impact and a high level of stakeholder scrutiny. Any failure by the company to secure access to suitable water supplies, or achieve and maintain compliance with applicable requirements of the permits or licenses, could result in curtailment or halting of production at the affected operation. Incidents of water pollution or shortage can, in extreme cases, lead to community protest and ultimately to the withdrawal of community and government support for our operations. Water scarcity has been identified as a significant risk at AngloGold Ashanti’s US operation in particular. Production at the Cripple Creek & Victor Gold Mining Company’s Cresson mine continued to be affected by a severe drought in 2011 and 2012. The lack of water reduced percolation through the heap-leach pad, which curtailed production and productivity.

Mining and mineral processing operations generate waste rock and tailings. The impact of dust generation, breach, leak, or failure of a waste rock or tailings storage facility, can be significant. An incident at AngloGold Ashanti’s operations could lead to, among others, obligations to remediate environmental contamination and claims for property damage and personal injury from adjacent communities. Incidents at other companies’ operations could result in governments tightening regulatory requirements and restricting mining activities.

In addition, mining companies are required by law to close their operations at the end of the mine life and rehabilitate the lands they mine.mined. Estimates of the total ultimate closure and rehabilitation costs for gold mining operations are significant and based principally on life-of-mine profiles, changing inflation and discount rate assumptions, changing designs of tailing storage facilities and current legal and regulatory requirements that may change materially. Environmental liabilities are accrued when they become known, probable and can be reasonably estimated. Increasingly, regulators are seeking security in the form of cash collateral or bank guarantees in respect of environmental obligations, which could have an adverse impact on AngloGold Ashanti’s financial condition.

AngloGold Ashanti’s discounted closure liability was US$758 million as at December 31, 2012 compared with US$653 million as at December 31, 2011. The reasons for the change were new damage from current mining operations, new damage from building of new mining areas, the acquisition of Mine Waste Solutions, changes in

estimates for new life of mine calculations and changes in discount rates. Costs associated with rehabilitating land disturbed by mining processes and addressing the environmental, health and community issues are estimated and financial provision made based upon current available information. Estimates may, however, be insufficient and further costs may be identified at any stage.stage that may exceed the provisions that AngloGold Ashanti has made. Any underestimated or unidentified rehabilitation costs would reduce earnings and could materially and adversely affect the company’s asset values, earnings and cash flows.

Compliance with emerging climate change regulationregulations could result in significant costs to AngloGold Ashanti and climate change may present physical risks to thea mining company’s operations.

Greenhouse gases or GHGs,(GHGs) are emitted directly by AngloGold Ashanti’s operations, and indirectly as a result of the consumption of electricity purchasedwell as by external utilities from external utilities.

Emissions from electricity consumption are indirectly attributable to its operations.which AngloGold Ashanti purchases power. Currently, a number of international and national measures to address or limit GHG emissions, including the Kyoto Protocol, and the Copenhagen Accord and the Durban Platform, are in various phases of discussion or implementation in the countries in which the company operates. In particular, the Durban Platform commits all parties to the conference to develop a global mitigation regime which could take effect in 2020, with the specific terms of that legally binding accord, including individual targets, to be finalized by 2015. These, or future, measures could result in requirements forrequire AngloGold Ashanti to reduce its direct and indirect GHG emissions.
The Australian government, elected in late 2010, has established an intensive processemissions or energy use or to gauge support and shape debateincur significant costs for GHG emissions permits or taxes or have these costs or taxes passed on possible interventions, including introduction of a carbon price, to address climate-change impacts in Australia. Its stated intention is to achieve consensus and announceby electricity utilities which supply the nature of key interventions by the end of parliament, which is debating the introduction of the Carbon Pollution Reduction Scheme, which would cap national emissions and require certain companies whose emissions exceed the agreed threshold to obtain allowances to emit GHGs.company’s operations. AngloGold Ashanti may be required under this schemealso could incur significant costs associated with capital equipment, GHG monitoring and reporting and other obligations to purchase allowances for emissions possibly starting in 2011. The company is already required to report its GHG emissions tocomply with applicable requirements. For example, on July 1, 2012, the Australian government under the National Greenhouse and Energy Reporting Act.
The South African government published a climate change response green paper in November 2010 andGovernment introduced a carbon tax discussion paper in December 2010. The policy process, culminating in the publication of a climate change response white paper, is expected later in 2011, withon GHG legislation likelyemissions. It also plans to be enacted thereafter. Animplement an emissions trading discussion paper is expected during 2011. It is possible that legislation to cap nationalscheme beginning in July 2015. Other countries, including South Africa, Brazil and the United States, have passed or are considering GHG trading or tax schemes, and/or other regulation of GHG emissions, introduce a trading scheme for GHG emission allowances and/or extendalthough the current carbon tax will be enacted, though the timing of this is uncertain.
It is unclear how climate change bills will progress if introduced in the US Congress. The likelyprecise impact on AngloGold Ashanti also remains unclear, as legislation hasAshanti’s operations cannot yet to be finalized. In May 2010, given the significant change in its composition following the November 2010 elections, the US Environmental Protection Agency continued to proceed on rules related to greenhouse gas emissions under the existing US Clean Air Act and Congress continued to evaluate whether or not to limit or restrict these activities. In some instances these rules will require installation of best available technology to control GHGs from large emitters.
In October 2010, the then-President of Brazil announced that sector-specific plans would be developed to meet a voluntary reduction target of 1.2 billion tonnes of CO2 by 2020. Amongst other plans, it is intended to reduce de-forestation in the Cerrado biome, where AngloGold Ashanti operates, by 40 percent and expand renewable energy production and energy efficiency programs. The decree also provided for a Brazilian GHG trading scheme, which is yet to be designed. In Brazil, the National Plan for Climate Change was enacted in December 2008 aiming to reduce de-forestation, which is the main cause of Brazil’s GHG emissions. While Brazil is not yet formally regulating GHG emissions at the national level, some state environmental agencies have requested companies to voluntarily submit GHG emissions management plans.

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determined.


Some of these measures have resulted in increased compliance costs for power suppliers and are passed through to the company in the form of price increases. In South Africa, for instance, AngloGold Ashanti pays a levy of ZAR0.02 per kilowatt hour for electricity generated from fossil fuels. These levies may increase over time and additional levies may be introduced in future in South Africa or other countries, which could result in a significant increase in costs to the company.
In addition, AngloGold Ashanti’s operations could be exposed to a number of physical risks from climate change, such as increasedchanges in rainfall rates, rising sea levels, reduced water availability, higher temperatures and extreme weather events. Events or conditions such as flooding or inadequate water supplies could disrupt mining and transport operations, mineral processing and rehabilitation efforts, create resource shortages or damage the company’s property or equipment and could increase health and safety risks on site. Such events or conditions could have other adverse effects such as increased disease prevalence inon the company’s workforce and on the communities around its mines, such as an increased risk of food insecurity, water scarcity and prevalence of disease.

Compliance with ‘conflict materials’ and ‘responsible gold’ legislation and standards could result in communitiessignificant costs.

There are ever more stringent standards relating to ‘conflict minerals’ and ‘responsible’ gold that include the: US Dodd-Frank Act; World Gold Council Conflict Free Gold Standard; Organization for Economic Cooperation and Development Due Diligence Guidelines for Responsible Supply Chain of Minerals from Conflict-Affected and High-Risk Areas; and London Bullion Market Association Responsible Gold Guidance.

Any such legislation and standards may result in close proximitysignificant costs to its operations.

ensure and demonstrate compliance, and difficulties in the sale of gold emanating from certain areas. The complexities of the gold supply chain, especially as they relate to ‘scrap’ or recycled gold, and the fragmented and often unregulated supply of artisanal and small-scale mined gold are such that there may be significant uncertainties at each stage in the chain as to the provenance of the gold, and as a result of uncertainties in the process, the costs of due diligence and audit, or the reputational risks of defining their product or a constituent part as containing a ‘conflict mineral’ would be too burdensome for the company’s customers. Accordingly, manufacturers may decide to switch supply sources or to substitute gold with other minerals not covered by the initiatives. This could have a material negative impact on the gold industry, including on AngloGold Ashanti’s financial results.

Mining operations and projects are vulnerable to supply chain disruption and AngloGold Ashanti’swith the result that operations and development projects could be adversely affected by shortages of, as well as the lead times to deliver, strategic spares, critical consumables, mining equipment or metallurgical plant.

AngloGold Ashanti’s operations and development projects could be adversely affected by both shortages and long lead times to deliver strategic spares, critical consumables, mining equipment and metallurgical plant. Import restrictions, such as those introduced by the Argentine government in 2011, can also delay the delivery of parts and equipment. In the past, the company and other gold mining companies experienced shortages in critical consumables, particularly as

production capacity in the global mining industry expanded in response to increased demand for commodities. AngloGold Ashanti has in the pastalso experienced increased delivery times for these items. These shortagesShortages have also resulted in unanticipated price increases in the price of certain of these items. Shortages of strategic spares, critical consumables, mining equipment or metallurgical plant, could result inand production delays and production shortfalls, and increases in prices resulting in an increasea rise in both operating costs and in the capital expenditure necessary to maintain and develop mining operations.

Individually, AngloGold Ashanti and other gold mining companies have limited influence over manufacturers and suppliers of these items. In certain cases there are a limited number of suppliers for certain strategic spares, critical consumables, mining equipment or metallurgical plant who command superior bargaining power relative to the company. The company could at times face limited supply or increased lead time in the delivery of such items.

For example, during 2012, supply of caustic soda was delayed in the Continental Africa Region. In addition, the unreliability of oxygen and lime supply similarly affected production at the Vaal River and West Wits surface operations in South Africa throughout 2011 and poor availability of drill rigs, heavy machinery and fleet equipment hampered underground drilling and overall operational performance at the Serra Grande mine in Brazil in 2011.

The company’s procurement policy is to only source mining and processing equipment and consumables from suppliers that meet its corporate values and ethical standards.standards although risk remains around the management of ethical supply chains. In certain locations, where a limited number of suppliers meet these standards, furtheradditional strain is placed on the supply chain, thereby increasing the cost of supply and time of delivery.

delivery times.

Furthermore, the effects of the 2011 earthquakesupply chains and tsunamirates can be impacted by natural disasters, such as earthquakes, extreme weather patterns and climate change, as well as other phenomena that include unrest, strikes, theft and fires. For example, a three-week transport strike in Japan could have a knock-on effect on2012 delayed the supply of consumables in South Africa. Potential supply chain disruption in Mali, as a result of the coup d’état and subsequent state of emergency, has been avoided to date by well managed consumable stock holding. Potential gold doré export disruptions at Geita, the result of an attempted gold heist, and in Mali, following the closure of Bamako International Airport, were minimized with the introduction of alternative transportation arrangements. In February 2013, a fire destroyed the heavy mining equipment extending lead timesstock of spares and potentially increasing costs of certain supplies.components at the Geita gold mine. If AngloGold Ashanti experiences shortages, or increased lead times in the delivery of strategic spares, critical consumables, mining equipment or processing plant, the company’scompany might have to suspend some of its operations and its results of operations and its financial condition could be adversely impacted.

Diversity in interpretation and application of accounting literature in the mining industry may impact AngloGold Ashanti’s reported financial results.

The mining industry has limited industry-specific accounting literature. As a result, there is diverse interpretation and application of accounting literature toon mining specific issues. AngloGold Ashanti, for example, capitalizes drilling and costs related to defining and delineating a residual mineral deposit that has not been classified as a proven‘Proven and probable reserveProbable Reserve’ at a development project or production stage mine. Some companies, however, expense such costs.

As and when this diverse interpretation and application is addressed, the company’s reported results could be adversely impacted should the adopted interpretation differ from the position it currently follows.

Failure to comply with laws, regulations, standards, contractual obligations whether following a breach or breaches in governance processes or fraud, bribery and corruption may lead to regulatory penalties, loss of licences or permits, and loss of reputation.

Since AngloGold Ashanti operates globally in multiple jurisdictions and with numerous and complex frameworks, its governance and compliance processes may not prevent potential breaches of law, accounting principles or other governance practices.

AngloGold Ashanti’s Code of Business Principles and Ethics, among other policies, standards and guidance, and training thereon may not prevent instances of unethical or unlawful behaviour, including bribery or corruption, nor guarantee compliance with legal and regulatory requirements, and breaches may not be detected by management.

Sanctions for failure by the company or others acting on its behalf to comply with these laws, regulations, standards and contractual obligations could include fines, penalties, imprisonment of officers, litigation, and loss of operating licences or permits, suspensions of operations, and may damage the company’s reputation. Such sanctions could have a material adverse impact on the company’s financial condition and results of operations.

Breaches in information technology security and governance process may adversely impact business activities.

AngloGold Ashanti maintains global information technology and communication networks and applications to support its business activities. Information technology security processes may not prevent future malicious actions, denial-of-service attacks, or fraud, resulting in corruption of operating systems, theft of commercially sensitive data, misappropriation of funds and business and operational disruption. Material system breaches and failures could result in significant interruptions that could in turn affect AngloGold Ashanti’s operating results and reputation.

Risks related to AngloGold Ashanti’s results of operations and its financial condition as a result of factors specific to the company and its operations

AngloGold Ashanti has removed the last of its gold hedging instruments and long-term sales contracts which exposesexposing the company to potential gains from subsequent commodity price increases but exposes it entirely to subsequent commodity price decreases.

AngloGold Ashanti removed the last of its gold hedging instruments in October 2010 in order to provide greater participation in a rising gold price environment. As a result, AngloGold Ashanti no longer has any protection against declines in the market price of gold compared with previous years. gold.

A sustained decline in the price of gold could adversely impact the company’s operating results and its financial condition.

Any downgrade of credit ratings assigned to AngloGold Ashanti’s debt securities could increase future interest costs and adversely affect the availability of new financing.

An actual or expected negative development of AngloGold Ashanti’s results of operations or cash flows, country risk, financial metrics, or an increase in net debt position could result in the deterioration of the company’s credit ratings. AngloGold Ashanti’s ratings are influenced by the location of its domicile and its operations. Following the downgrade of South Africa’s sovereign debt rating as a result of strikes, social tension and policy uncertainty in South Africa, AngloGold Ashanti was placed on “credit watch negative” by Standard & Poor’s on October 17, 2012. On December 10, 2012, Standard & Poor’s affirmed the investment grade rating of the company’s publicly traded debt, but warned that it could lower the rating in the future.

Any such downgrade by ratings agencies could increase the cost of capital, reduce the investor base and negatively and materially affect AngloGold Ashanti’s business, results of operations and its financial condition.

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Labor disruptions could have a material adverse effect on AngloGold Ashanti’s results of operations and financial condition.

AngloGold Ashanti employees in South Africa, Ghana, Guinea and Argentina, are highly unionized. Trade unions, therefore, have a significant impact on the company’s labor relations, as well as on social and political reforms, most notably in South Africa. There is a risk that strikes or other types of conflict with unions or employees may occur at any of the company’s operations, particularly where the labor force is unionized or there is inter-union rivalry. Labor disruptions may be used to advocate labor, political or social goals in the future. For example, labor disruptions may occur in sympathy with strikes or labor unrest in other sectors of the economy and for political goals. Labor unrest in South Africa can also be fuelled by migrant labor conditions and mine worker debt levels. Furthermore, such labor disruptions may themselves affect or be perceived to affect local political and social stability. Acts or vandalism affecting mines and mine equipment are possible during periods of labor unrest.

For example, following a wave of labor unrest and unprotected strike action that took place throughout the South African mining, transport and agricultural sectors since early August 2012, workers from AngloGold Ashanti’s Kopanang mine, three West Wits mines and the Vaal River region’s other operations engaged in unprotected strikes in September 2012. More than 100,000 miners were involved in the strikes across the mining sector during the last four months of 2012. Workers at AngloGold Ashanti mines in South Africa have also staged sit-ins which prompted the company to suspend operations at some of its mines. These work stoppages pose significant safety risks and operating challenges. The protracted period of inactivity caused by the strike, coupled by the depth of the affected mines, has complicated the consequent ramping up of production following the termination of the strikes and has resulted in a lengthened ramp-up period to ensure employee safety. The unprotected strike action at the South African operations had an adverse impact

on the company’s third quarter results and significantly adversely impacted its fourth quarter results. The company estimates that the unprotected strike action cost approximately 235,000 ounces in lost production due to the work stoppages and the slow ramp-up to full production.

Lower production and payroll increases resulting from the labor disruptions have adversely impacted the financial performance of all South African operations, threatening viability in some cases and similar disruptions in the future may have a material adverse effect on the company’s results of operations and financial condition. For example, subsequent to the 2012 strikes, AngloGold Ashanti, along with its major gold-producing peers in South Africa, increased the entry-level pay of employees; established a new pay category for equipment operators; provided an allowance for rock-drill operators; and increased pay by 2 percent for most categories of workers. The net impact of the settlement on the payroll cost for AngloGold Ashanti is $16 million per annum.

Increased labor costs could have a material adverse effect on AngloGold Ashanti’s results of operations and financial condition.

Labor costs represent a substantial proportion of the company’s total operating costs and at many operations, including its South African, Ghanaian and Tanzanian operations, constitute the company’s single largest component of operating costs. Failing to obtain any simultaneous increase in productivity, any change to the company’s wage agreements or other factors that could increase labor costs may have a material adverse effect on AngloGold Ashanti’s results of operations and financial condition. In 2012, the cost of salaries and wages increased by 7 percent over 2011 levels.

In South Africa, the established practice is to negotiate wages and conditions of employment with the unions every two years through the Chamber of Mines of South Africa. South African employment law sets out minimum terms and conditions of employment for employees, which form the benchmark for all employment contracts. As at December 31, 2012, approximately 62 percent of the company’s workforce, excluding contractors, or approximately 52 percent of its total workforce was located in South Africa. At present, the mining unions and gold mining companies are in the second year of this two-year wage agreement, with the latest increases (ranging from 8 percent to 10 percent) awarded to the workforce in July 2012 and additional improvements to the current pay structure offered to workers on October 18, 2012. Further negotiations on this agreement are expected in 2013, which may result in an increase in labor actions. In addition, any new agreement could result in increased labor costs for the company.

AngloGold Ashanti’s results may be further impaired if it incurs penalties for failing to meet standards set by labor laws regarding workers’ rights or incurs costs complying with new labor laws, rules and regulations. For example, employment law in South Africa imposes monetary penalties for neglecting to report to government authorities on progress made towards achieving employment equity in the workplace. Ghanaian law also contains broad provisions requiring mining companies to recruit and train Ghanaian personnel and to use the services of Ghanaian companies. In Australia, the federal government has recently introduced a new industrial relations system that includes ‘good faith bargaining’ obligations for employers, fewer restrictions on the content of collective agreements and an enhanced role for union officials as bargaining representatives, parties to agreements and participants in dispute resolution. Penalties and compliance costs, as well as increased costs due to laws and regulations less favourable to employers, could have a material adverse effect on the company’s results of operations and financial condition.

AngloGold Ashanti’s mining rights in the countries in which it operates could be altered, suspended or cancelled for a variety of reasons, including if the company breaches in its obligations in respect of its mining rights.

AngloGold Ashanti’s right to own and exploit mineral reservesMineral Reserves and deposits is governed by the laws and regulations of the jurisdictions in which the mineral properties are located. Currently, a significant portion of the company’s mineral reservesMineral Reserves and deposits are located in countries where mining rights could be suspended or cancelled should it breach its obligations in respect of the acquisition and exploitation of these rights.

In alleach of the countries wherein which AngloGold Ashanti operates, the formulation or implementation of government policies may be unpredictable on certain issues includingmay be unpredictable. This may include changes in laws relating to mineral rights and ownership of mining assets and the rightsright to prospect and mine, and in extreme cases, nationalization. Fornationalization, expropriation or nullification of existing concessions, licenses, permits, agreements and contracts. In May 2012, for example, the Guinean Government has announced in media reports that it will seek to increase its equity interest in mines and there is a call for a debate on nationalization and increased state ownership in South Africa. Argentine government nationalized the oil company Yacimientos Petrolíferos Fiscales (YPF) by expropriating 51 percent of the shares from the majority Spanish shareholder.

Any existing and new mining and exploration operations and projects are subject to various national and local laws, policies and regulations governing the ownership and the right to prospect or mine or develop proposed projects. For more details on the risks surrounding ownership of mining assets, see “– Title to AngloGold Ashanti’s properties may be uncertain and subject to challenge” and “– AngloGold Ashanti’s Mineral Reserve, deposits and mining operations are located in countries that face political, economic and security risks that may affect both the terms of its mining concessions, as well as its ability to conduct operations in certain countries”.

Project implementation delays could result in licences not being renewed and the loss of mining rights. Some of AngloGold Ashanti’s mining concessions, authorizations, licences and permits are subject to expiry, limitations on renewal and to various other risks and uncertainties. For example, the company’s license to mine at the Mongbwalu concession in the DRC is up for renewal in 2014, but the company must seek renewal a year in advance of the license’s expiration. The company may not be successful in the renewal process or in retaining the license on the same terms. If the company is unsuccessful in the renewal process, it will need to record an impairment. In October 2012, the DRC announced a proposed overhaul of the DRC’s mining code, which could affect the company’s ability to renew the license or its terms. This overhaul is still in progress.

If AngloGold Ashanti is not able to obtain or maintain necessary permits, authorizations or agreements to prospect or mine or to implement planned projects, or continue its operations, under conditions, or comply with all laws, regulations or requirements, or do so within time frames,time-frames that make such plans and operations economically viable, or if the laws impacting the company’s ownership of its mineral rights, or the right to prospect or mine were to change materially, or should Governmentsgovernments increase their ownership in the mines or nationalize them, AngloGold Ashanti’s results of operations and its financial condition could be adversely affected.

Title to AngloGold Ashanti’s properties may be uncertain and subject to challenge.

AngloGold Ashanti has operations in several countries where ownership of land is uncertain and where disputes may arise in relation to ownership. Certain of the company’s properties may be subject to the rights or the asserted rights of various community stakeholders, including indigenous people. The presence of those stakeholders may have an impact on AngloGold Ashanti’s ability to develop or operate its mining interests. For example, in Australia, the Native Title Act (1993) provides for the establishment and recognition of native title under certain circumstances. In South Africa, mining rights are linkedthe Extension of Security of Tenure Act (1997) and the Restitution of Land Rights Act (1994) provide for various landholding rights. Such legislation is complex, difficult to meeting various obligations that include the Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry, referred to as the Mining Charter. Compliance with the Mining Charter, measured using a designated scorecard, requires that every mining company achieve 26 percent ownership by historically disadvantaged South Africans (HDSAs) of its South African mining assets by May 2014,predict and achieves participation by HDSAs in various other aspects of management.

AngloGold Ashanti believes it has made significant progress towards meeting the requirementsoutside of the Mining Charter,company’s control, and could therefore negatively affect the scorecardbusiness results of new or existing projects. Where consultation with stakeholders is statutorily or otherwise mandated, relations may not remain amicable and its own undertakingsdisputes may lead to reduced access to properties or delays in terms of human resource development, employment equity, mine community and rural development, housing and living conditions and procurement and beneficiation. The company will incur expenses in giving further effectoperations.

Title to the Mining Chartercompany’s properties, particularly undeveloped ones, may also be defective or subject to challenge. Title insurance generally is not available, and title review does not necessarily preclude third parties from contesting ownership. Where surveys have not been conducted, the scorecard.

The Mining Charter provided for its review five years after promulgation. The outcomeprecise area and location of the first phase of the review was made publiccompany’s claims may be in June 2010, while results from the final review were made public in September 2010. According to these reviews, AngloGold Ashanti is compliant with the Mining Charter’s requirements relating to ownership of its assets by HDSAs. The company is also currently compliant with the Mining Charter’s requirements relating to, among others, human resource development, mine community development, and sustainable development and growth. Whilst AngloGold Ashanti is compliant with the Mining Charter’s ownership targets to be achieved by May 2014, it must make further progress to achieve future targets set under the Mining Charter, including further participation by HDSAs in various aspects of management, the upgrade of housing and accommodation at the company’s mines, further human resource development, mine community development, sustainable development and growth as well as procurement and enterprise development, certain of which are also included under the Code and Standard, as defined and discussed below and which targets must also be achieved by May 2014. AngloGold Ashanti expects to be compliant with these provisions by May 2014.
As required by the South African Mineral and Petroleum Resources Development Act (MPRDA), the Minister of Mineral Resources published a Code of Good Practice for the Minerals Industry (Code) and the Housing and Living Conditions Standard (Standard) in April 2009. The Code was developed to create principles to facilitate effective implementation of minerals and mining legislation and enhance implementation of the Mining Charter applicable to the mining industry. The Standard aims to include the provision of housing as an integral part of infrastructure during the development of a mine. Both the Code and the Standard provide that non-compliance equates to non-compliance with the MPRDA. It is unclear whether non-compliance with the Code or the Standard would lead to the cancellation or suspension of a mining right or whether they would be considered legislation under the MPRDA. Subsequent to the publication of the Code and the Standard, representatives of the Department of Mineral Resources, organized labor and the South African mining industry have engaged in discussions in an effort to address the concerns of the mining industry and to possibly amend the Code and the Standard. Furthermore, discussions related to the Code and Standard have also become related to the review of the Mining Charter. It is anticipated that the contents of the Code and Standard will ultimately be amended in line with the amendments to the Mining Charter that have resulted from its review. Details of the final Code and Standard are currently uncertain.

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doubt. Accordingly, AngloGold Ashanti’s mining rights in South Africa canmineral properties may be suspendedsubject to prior unregistered liens, agreements, transfers or cancelledclaims, including native land claims, and title may be affected by, the Minister of Mineral Resources if, upon notice of a breach from the Minister, the company breaches its obligations in complying with the MPRDA. The MPRDA also imposes additional responsibilities on mining companies relating to environmental management and to environmental damage, degradation or pollution resulting from their prospecting or mining activities. AngloGold Ashanti has a policy of evaluating, minimizing and addressing the environmental consequences of its activities and, consistent with this policy and the MPRDA, conducts an annual review of the environmental costs and liabilities associated with its South African operations in light of applicable requirements.
among other things, undetected defects.

AngloGold Ashanti may experience unforeseen difficulties, delays or costs in successfully implementing its business strategy and itsprojects, including any cost-cutting initiatives, and any such strategy or project may not result in the anticipated benefits.

The successful implementation of the company’s business strategy and projects depends upon a number ofmany factors, including those outside its control. For example: the successful management of costs will depend on prevailing market prices for input costs; the ability to grow the business will depend on the successful implementation of the company’s existing and proposed project development initiatives and continued exploration success, as well as on the availability of attractive merger and acquisition opportunities, all of which are subject to the relevant mining and company specific risks as outlined in these risk factors.

AngloGold Ashanti cannot give assuranceis in the process of implementing initiatives relating to strategic alignment, portfolio review, restructuring and cost-cutting, including in connection with the consolidation of its business activities and assets. Any future contribution of these measures to profitability will be influenced by the actual savings achieved and by the company’s ability to sustain these ongoing efforts. Strategic alignment, restructuring and cost-cutting initiatives may involve various risks, including, for example, labor unrest and operating licence withdrawal. The risk is highest in South Africa, given recent calls for withdrawal of mining licences for ‘mothballed shafts’ and hostile reaction to proposed

mining industry retrenchments. In addition, these measures may not be implemented as planned; turn out to be less effective than anticipated; only become effective later than anticipated; or not be effective at all. Any of these outcomes, individually or in combination, may adversely impact the company’s business, results of operations and financial condition.

AngloGold Ashanti’s business strategy also includes divesting activities in some business areas and strengthening others, including through mergers and acquisitions. With respect to dispositions, AngloGold Ashanti may not be able to divest some of its activities as planned or to obtain all of the required approvals, and the divestitures that unforeseenare carried out could have a negative impact on its business, results of operations, financial condition and reputation.

AngloGold Ashanti may also prove unable to deliver on production targets, including in potentially critical areas, such as the Obuasi turnaround plan in Ghana, as well as on the timely, cost-effective and successful execution of key capital projects, including at the Tropicana project in Australia, the Kibali project in the DRC, and with regard to the implementation of the company’s new Enterprise Resource Planning (ERP) system. For more details on the risks surrounding the ERP implementation, see the section entitled – “The implementation of an integrated ERP system could have an adverse effect on AngloGold Ashanti’s results of operations and financial condition.”

Unforeseen difficulties, delays or costs will notmay adversely affect the successful implementation of itsAngloGold Ashanti’s business strategy or that theand projects, and such strategy willand projects may not result in the anticipated benefits.

Any acquisition or acquisitions that AngloGold Ashanti may complete may expose the company to new geographic, political, legal, social, operating, financial and geological risks.

AngloGold Ashanti may pursue the acquisition of producing, development and advanced stage exploration properties and companies. Any such acquisition may change the scale of the company’s business and operations and may expose it to new geographic, geological, political, social, operating, financial, legal, regulatory and contractual risks. For example: there may be a significant change in commodity prices after the company has committed to complete the transaction and established the purchase price or share exchange ratio; a material ore body may prove below expectations; AngloGold Ashanti may have difficulty integrating and assimilating the operations and personnel of any acquired companies, realizing anticipated synergies and maximizing the financial and strategic position of the combined enterprise, and maintaining uniform standards, policies and controls; the integration may disrupt the company’s ongoing business and its relationships with employees, suppliers and contractors; and the acquisition may divert management’s attention from AngloGold Ashanti’s day-to-day business. Furthermore, the company operates and acquires businesses in different countries, with different regulatory and operating cultures, which may exacerbate the risks described above. In addition, the acquired business may have undetected liabilities which may be significant.

In the event that the company chooses to raise debt capital to finance any acquisition, the company’s leverage will be increased. Should the company choose to use equity as consideration for an acquisition, existing shareholders may suffer dilution. Alternatively, the company may choose to finance any acquisition with its existing resources, which could decrease its ability to fund future capital expenditures.

The company may not be successful in overcoming these risks or any other problems encountered in connection with acquisitions. Failure by AngloGold Ashanti to implement its acquisition strategy or to integrate acquired businesses successfully could have material adverse effects on its growth and business results.

Ageing infrastructure at some of AngloGold Ashanti’s operations could adversely impact its business.

Deep level gold mining shafts are usually designed with a lifespan of 25 to 30 years. Vertical shafts consist of large quantities of infrastructure steelwork for guiding conveyances and accommodating services such as high and low tension electric cables, air and water pipe columns. Rising temperatures in the deeper mining areas can also lead to increased cooling requirements in the form of upgraded and expanded ice plants. Maintaining this infrastructure requires skilled human resources, capital allocation, management and planned maintenance.

Once a shaft has reached the end of its intended lifespan, higher than normal maintenance and care is required. Incidents resulting in production delays, increased costs or industrial accidents may occur. Such incidents may have an adverse effect on the company’s results of operations and financial condition. Asset integrity issues relating to ageing infrastructure are of particular concern in South Africa and at the Obuasi mine in Ghana.

For example, cracks were discovered in the mill feed end in September 2008 and at the discharge end in February 2010 at the Geita gold mine. The Geita gold mine is one of the group’s principal assets and sources of cash flow. After initial repairs, the feed end was replaced during May and June 2011. A decision was subsequently taken to replace the entire mill as a result of shell distortion. After new mill manufacture delays, installation was completed during March 2013. Production throughput in 2011 was 1 million tonnes less than planned, as a result of mill downtime that included feed-end replacement; ore grade was however sufficient to achieve 494,000 ounces. The Geita gold mine produced approximately 531,000 ounces in 2012, with production throughput of some 100,000 tonnes short of budget.

Some of AngloGold Ashanti’s technologies are unproven and failure could adversely impact costs and production.

AngloGold Ashanti has teamed up with various specialists to engineer new solutions to environmental management, mine design, rock breaking and underground logistics, among others. The company has invested in new technologies, including phyto-technologies to reduce seepage and address soil and ground water contamination, and in mine support technologies to minimize the impact of seismic activity. The company is also attempting to develop technologies to access the deeper reaches of South African mines.

Some aspects of these technologies are unproven and their eventual operational outcome or viability cannot be assessed with certainty. The costs, productivity and other benefits from these initiatives, and the consequent effects on AngloGold Ashanti’s future earnings and financial condition, may vary from expectations. Failure of the company to realize the anticipated benefits could result in increased costs, an inability to realize production or growth plans, or adversely affect its operational performance.

The level of AngloGold Ashanti’s indebtedness could adversely impact its business.

As at December 31, 2010,2012, AngloGold Ashanti had gross borrowings (excludingof approximately $3.0 billion, (2011: approximately $1.7 billion) excluding the mandatory convertible bonds) of approximately $1.9 billion.

bonds amounting to $588 million (2011: $760 million).

AngloGold Ashanti’s indebtedness could have a material adverse effect on its flexibility to conduct business. For example, the company may be required to utilizeuse a large portion of its cash flow to pay the principal and interest on its debt, which will reduce funds available to finance existing operations and the development of new organic growth opportunities and further acquisitions. In addition, under the terms of the company’s borrowing facilities from its banks, AngloGold Ashanti is obliged to meet certain financial and other covenants. The company’s ability to continue to meet these covenants and to service its debt will depend on its future financial performance which will be affected by its operating performance as well as by financial and other factors, certain of which are beyond the control of the company.

Should the cash flow from operations be insufficient, AngloGold Ashanti could breach its financial and other covenants andcovenants. Covenant breaches, if interpreted as events of default under one or more debt agreements, could allow lenders to accelerate payment of such debt. Any such acceleration could result in the acceleration of indebtedness under other financial instruments. As a result, the company may be required to refinance all or part of the existing debt, use existing cash balances, issue additional equity and/or sell assets. AngloGold Ashanti cannot be sure that it will be able to do sorefinance its debt on commercially reasonable terms, if at all.

The company’s ability to access the bank, public debt or equity capital markets on an efficient basis may be constrained by dislocation in the credit markets or capital and liquidity constraints in the banking, debt or equity markets at the time of issuance.

Certain factors may affect AngloGold Ashanti’s ability to support the carrying amount of its property, plant and equipment, acquired properties, investments and goodwill on the balance sheet. If the carrying amount of its assets is not recoverable, AngloGold Ashanti may be required to recognize an impairment charge, which could be significant.

AngloGold Ashanti reviews and tests the carrying amount of its assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. The company values individual mining assets at the lowest level for which cash flows are identifiable and independent of cash flows of other mining assets and liabilities.

If there are indications that an impairment may have occurred, AngloGold Ashanti prepares estimates of expected future cash flows for each group of assets. Expected future cash flows are inherently uncertain, and could materially change over time. They are significantly affected by reserve and production estimates, together with economic factors such as spot and forward gold prices, discount rates, currency exchange rates, estimates of costs to produce reserves and future capital expenditure.

Estimated rehabilitation and closure costs could also materially affect the company’s financial performance and could result in the need to recognize an impairment charge.

If any of these uncertainties occur, either alone or in combination, management could be required to recognize an impairment, which could have a material adverse effect on the company’s financial condition and results of operations.

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operations and financial condition.


AngloGold Ashanti expects to have significant financing requirements.

AngloGold Ashanti’s existing Board-approvedboard-approved development projects and exploration initiatives will require significant funding. These includeinclude: Tropicana in Australia, the Cerro Vanguardia heap leach project in Argentina, theAustralia; Mponeng Ventersdorp Contact Reef ProjectsBelow 120 Project in South Africa, Córrego do SítioAfrica; the Mongbwalu and LamegoKibali projects in Brazilthe DRC; and the mine life extension project (MLE1)(MLE2) at Cripple Creek & Victor in the US.

United States.

Potential future development projects will also require significant funding, if and when approved by the AngloGold Ashanti Board.board of directors. These include thethe: La Colosa and Gramalote projects in Colombia, the Kibali and Mongbwalu projects in the DRC, the Mponeng CLR andColombia; Moab Khotsong Zaaiplaats projects in South Africa, the Cerro VanguardiaAfrica; Iduapriem expansion project in Ghana, Sadiola Deeps project in Mali; Geita underground mining project in Argentina, theTanzania; Nova Lima Sul project in Brazil, the Sadiola Deeps project in Mali, Cripple Creek & VictorBrazil; a further mine life extension project (MLE2)(MLE3) at Cripple Creek & Victor in the US,United States; as well as various other exploration projects and feasibility studies.

AngloGold Ashanti estimates that over the next three years, growth initiatives will require project capital expenditure (excluding stay in business and Ore Reserveore reserve development capital expenditure) of approximately $2.5$4.0 billion (subject to escalation)escalation and based on certain assumptions, including exchange rates). The company’s capital expenditure plans and requirements are subject to a number of risks, contingencies and other factors, some of which are beyond its control, and therefore the actual future capital expenditure and investments may differ significantly from theirthe current planned amounts.

AngloGold Ashanti’s operating cash flow and credit facilities may be insufficient to meet all of these expenditures, depending on the timing and costscost of development of these and other projects as well as its operating performance and available headroom under its credit facilities. As a result, new sources of capital may be needed to meet the funding requirements of these developments, to fund ongoing business activities and to pay dividends. AngloGold Ashanti’s ability to raise and service significant new sources of capital will be a function of macroeconomic conditions, the condition of the financial markets, future gold prices, the company’s operational performance and operating cash flow and debt position, among other factors. The company’s ability to raise further debt financing in the future and the cost of such financing will depend on, among other factors, its prevailing credit rating, which may be affected by the company’s ability to maintain its outstanding debt and financial ratios at levels acceptable to the credit ratings agencies, its business prospects risks relating to the countries in which it operates or other factors. As a result, in the event of lower gold prices, unanticipated operating or financial challenges, any dislocation in financial markets or new funding limitations, AngloGold Ashanti’s ability to pursue new business opportunities, invest in existing and new projects, fund its ongoing business activities and/orand retire or service outstanding debt and pay dividends, could be significantly constrained, all of which could adversely impact the company’s results of operations and its financial condition.

AngloGold Ashanti does not operatehave full management control over some of its significant joint venture projects and other interests. If the operators of these projects do not performmanage these effectively and efficiently, the company’s investment in these projects could be adversely affected and/orand its reputation could be harmed.

AngloGold Ashanti’s joint ventures at Morila in Mali and at Kibali in the DRC are operatedmanaged by the company’s joint venture partners.partner Randgold Resources Limited (Randgold). In addition, certain of AngloGold Ashanti’s exploration ventures are operatedmanaged by the relevant joint venture partner. AngloGold Ashanti’s marine gold joint venture with De Beers is operatedmanaged by an independent company jointly owned by AngloGold Ashanti and De Beers, with a significant part of the technical input subcontracted to De Beers or other marine service providers.

In South Africa, AngloGold Ashanti’s Ergo operations are currently operated by Ergo Mining, a subsidiary of DRDGOLD Limited (DRDGOLD). The Ergo operations were sold in 2007 to DRDGOLD and DRDGOLD has been managing and operating the assets pending the transfer of the mining rights from AngloGold Ashanti to DRDGOLD.

While AngloGold Ashanti provides strategic management and operational advice to its joint venture partners in respect of these projects, the company cannot ensure that these projects are operated in compliance with the standards that AngloGold Ashanti applies in its other operations. If these joint ventures are not operated effectively or efficiently, including as a result of weaknesses in the policies, procedures and controls implemented by the joint venture partners, the company’s investment in the relevant project could be adversely affected. In addition, negative publicity associated with operations that are ineffective and inefficient operatorship,or inefficiently operated, particularly relating to any resulting accidents or environmental incidents, could harm the company’s reputation and therefore its prospects and potentially its financial condition. Further, any failure of joint venture partners to meet their obligations to AngloGold Ashanti or to third parties, or any disputes with respect to the parties’ respective rights and obligations, could have a material adverse impact on AngloGold Ashanti’s results of operations and financial condition. In particular, the company and Randgold retain equal representation, with neither party holding a deciding vote on the board of the two companies that have overall management control of the Morila project in Mali and the Kibali project in the DRC, respectively, and all major

management decisions for each of these two projects, including approval of the budget, require board approval. If a dispute arises between the company and Randgold with respect to the Kibali or Morila project and the parties are unable to amicably resolve such dispute, it may be difficult for the parties to make strategic decisions relating to the project affected by such dispute, the day-to-day operations and the development of such project may be adversely affected and the company may have to participate in proceedings to resolve the dispute, which could adversely affect the company’s results of operations and financial condition.

AngloGold Ashanti’s joint ventures and other strategic alliances may not be successful.

AngloGold Ashanti’s joint venture partners may have economic or business interests or goals that are not consistent with the company’s or may, as a result of financial or other difficulties, be unable or unwilling to fulfill their obligations under the joint venture or other agreements. Disputes between AngloGold Ashanti and its joint venture partners may lead to legal action, including litigation between AngloGold Ashanti and joint venture partners. Such disputes could adversely affect the operation of the joint venture and may prevent the realization of the joint ventures goals. There is no assurance that the company’s joint venture partners will continue their relationship with the company in the future or that the company will be able to achieve its financial condition.

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or strategic objectives relating to the joint ventures.


For example, AngloGold Ashanti has a 50:50 strategic alliance with Thani Investments LLC (TI), a company based in Dubai. During 2011, AngloGold Ashanti advanced a loan of $35 million to Thani Ashanti Alliance Limited, the joint entity it owns together with TI. This loan was impaired during 2012. TI guaranteed the loan. AngloGold Ashanti has brought legal action against TI over non-payment of the loan. The resolution to this dispute may affect the overall relationship between TI and the company. The failure of the company’s joint venture partners to fulfil their obligations or their unwillingness to continue these relationships may have an adverse effect on the company’s results of operations and financial condition.

AngloGold Ashanti’s mineral reserves,Mineral Reserve, deposits and mining operations are located in countries that facewhere political, economic and/or security risks.
Some of AngloGold Ashanti’s mineral deposits and mining and exploration operations are located in countries that have experienced political instabilitytax and economic uncertainty. In all of the countries where the company operates, the formulation or implementation of governmentlaws and policies may be unpredictable onchange rapidly and unpredictably and such changes and policies may adversely affect both the terms of its mining concessions, as well as its ability to conduct operations in certain issues. These include regulations which impact its operations and changes in laws relating to issues such as mineral rights and asset ownership, taxation, royalties, import and export duties, currency transfers, restrictions on foreign currency holdings and repatriation of earnings.
countries.

Any existing and new mining, and exploration operations and projects that the company carries out in these countries will continue to beare subject to various national and local laws, policies and regulations governing the ownership, prospecting, development and mining of mineral reserves, taxation and royalties, exchange controls, import and export duties and restrictions, investment approvals, employee and social community relations and other matters.

If, in one or more of these countries, AngloGold Ashanti were not able to obtain or maintain necessary permits, authorizations or agreements to implement planned projects or continue its operations under conditions or within time frames that make such plans and operations economic, or if legal, ownership, fiscal (including all royalties and duties), exchange control, employment, environmental and social laws and regimes, or the governing political authorities change materially, resulting in changes to such laws and regimes, this could have a material adverse affect on AngloGold Ashanti’s operating results and financial condition.
Certain

In most of the countries in which AngloGold Ashanti hasoperates, there is a focus on resource nationalism with governments seeking to reap greater economic benefit from high commodity prices. This entails the review of mining codes and stability agreements, which were designed under different economic environments, and the formulation or amendment of laws, policies and regulations relating to issues such as mineral depositsrights and asset ownership, royalties, taxation and taxation disputes, ‘windfall’ or mining or exploration operations, including the DRC, Guinea‘super’ taxation, non-recovery of taxation refunds, import and Colombia, haveexport duties, currency transfers, restrictions on foreign currency holdings and repatriation of earnings. Laws, policies and regulations in such countries are uncertain, changing and generally require progressively higher payments to governments, notably in the past experienced,form of increased royalties and taxes, mandated beneficiation, export levies and increasing or retaining state or national ownership of resources. Changes in certain cases continueparticular to experience,the fiscal terms governing AngloGold Ashanti’s operations may have a difficult security environmentmaterial adverse impact on the company’s results of operations or financial condition, as well as political instability. In particular, various illegal groups activediscourage future investments in regions incertain jurisdictions, which the company are present may pose a credible threat of terrorism, extortion and kidnapping, which could have an adverse impact on the company’s ability to access new assets and could potentially reduce future growth opportunities.

For example on September 9, 2011, a new mining code for Guinea was enacted. The new mining code significantly increases the share of state ownership in the mining industry, extending a 15 percent share of future mining projects to the government, without financial compensation. The government also has the option to purchase up to an additional 20 percent of each project. However, the new mining code was withdrawn in October 2012 due to unfavorable reception and is yet to be re-issued. The Guinean government also announced its intention to carry out a review of the mining conventions currently in force in Guinea. This mining convention review is currently in progress. The outcome of this review may have a material adverse effect on its operations in such regions. In the event that continued operations in these countries compromise the company’s securityresults of operations or business principles,financial condition.

In late 2011 and early 2012, the government of Ghana amended its fiscal mining regime, increased its corporate taxation and royalty rates and may impose a windfall profit tax. Furthermore, the government of Ghana has constituted a review committee to review and re-negotiate stability agreements with mining companies. AngloGold Ashanti is currently participating in negotiations with the Ghanaian review committee. The outcome of these negotiations may withdraw from these countrieshave a material adverse effect on a temporarythe company’s results of operations or permanent basis. Furthermore,financial condition.

AngloGold Ashanti Limited and other major mining companies are in talks with the company has at times experienced strained relationships with someTanzanian government regarding new mining legislation and its impact on existing mining agreements; such talks follow an earlier declaration in July 2012 by the Tanzanian Minister of Energy and Minerals that the mining contracts were under review. The new mining legislation and the outcome of the communitiesreview of the mining contracts may have a material adverse impact on the company’s results of operations and financial condition. Recently, the Tanzanian Minister of Energy and Minerals unexpectedly increased the royalty rate levied on gold extracted in which it operates. ThisTanzania by AngloGold Ashanti’s operations by 1 percent. Further unanticipated increases in royalty rates in Tanzania or other countries could have a material adverse impact on the company’s results of operations and financial condition.

In the DRC, in October 2012 the Mines Minister announced a proposed overhaul of the DRC’s mining code. The proposed laws seek to, among other things, increase the government stake in mining operations to 35 percent from the existing 5 percent, double royalties on some minerals, and introduce a 50 percent levy on certain profits. Should such laws be enacted in the future, these may have a material adverse impact on the company’s results of operations in the DRC.

On July 1, 2012, Australia’s Minerals Resource Rent Tax (MRRT) came into effect after the legislation was passed in March 2012. The MRRT applies only to the bulk commodities of coal and iron ore, and replaced the previously proposed Resource Super Profit Tax (RSPT), which covered all minerals. The Australian federal government did not include gold and uranium in the final MRRT. However, should Australia consider reintroducing the RSPT, or if similar ‘super profit’ taxes were to be introduced and implemented in any other country in which AngloGold Ashanti operates, the company’s results of operations and financial condition could be materially adversely affected.

In addition, some of AngloGold Ashanti’s resultsmineral deposits and mining and exploration operations are located in countries that are experiencing political instability and economic uncertainty. For example, in South Africa, country risk has increased recently in light of operations.

the violent strike action, social unrest, high levels of unemployment, poverty and concern that the government may take measures unfavorable to business.

In December 2008,2012, while the ruling African National Council for Democracy and Development, led by Moussa Dadis Camara, seized power in Guinea afterCongress rejected the deathconcept of the country’s long-standing president Lasana Conte. On December 3, 2009, President Camara was shot and injured in an apparent assassination attempt and subsequently signedwholesale nationalization, it nevertheless favoured a transition agreement allowing for presidential elections‘resource rent’ tax on windfall profits. Political instability and the transfer of Guinea backresulting unstable business environment in which companies operate may discourage future investments in certain jurisdictions, which may have an adverse impact on the company’s ability to civilian rule. Aaccess new transitional government was appointed while elections were held. The first round of elections was held but, as a clear winner did not emerge, a second round of elections took place after a prolonged delay on November 7, 2010assets and ultimately Alpha Conde was sworn in as Guinea’s president on December 21, 2010. Some unrest and protest accompanied and followed the elections. However, the elections were deemed successful and Conde was installed as Guinea’s first democratically elected president. In early 2011, Conde confirmed his commitment to a review of all mining contracts under the auspices of international law, indicating that Guinea would seek to own a stake of at least a third of all mining projects located in Guinea. Currently the Government of Guinea holds a stake of 15 percent in the Siguiri Gold Mine. The review process has not yet commenced and could potentially reduce future growth opportunities.

AngloGold Ashanti is currently unablesubject to predictan uncertain tax environment. Increased taxes are expected in most countries of operation. Changes in tax laws could result in higher tax expense and payments. Furthermore, legislation changes could materially impact AngloGold Ashanti’s tax receivables and liabilities as well as deferred tax assets and deferred tax liabilities. In addition, the timinguncertain tax environment in some regions could limit AngloGold Ashanti’s ability to enforce its rights. As a global company, AngloGold Ashanti conducts its business in countries subject to complex tax rules, which may be interpreted in different ways. Further interpretations or developments of tax regimes may affect the company’s tax liability, return on investments and outcomebusiness operations. AngloGold Ashanti is regularly examined by tax authorities in the various jurisdictions of such review. On April 26, 2011 it was announced by Reuters that a copyoperation.

For example, on March 15, 2012, the Mwanza office of the new draftTanzania Revenue Authority notified Geita Gold Mine Limited (Geita Gold Mine) that it intended to issue additional tax assessments against Geita Gold Mine. In connection with such assessments, the Tanzania Revenue Authority also challenged the validity of the existing mining code includes a compulsory 15 percent stake fordevelopment agreement (MDA) relating to the Geita Gold Mine, which was entered into with the Tanzanian government in operations, with an option to acquire an additional 20 percent. Also according to Reuters, included in the draft mining code are provisions for a new “Local Empowerment Fund”, which will be funded from tax levies, and changes to the price reference point used for tax purposes from the free-on-board to a rolling three-month average from the London Metals Exchange.June 1999. AngloGold Ashanti continueswas served with a demand to monitorpay the situation.

increased assessments, which it is currently paying under protest while awaiting a discussion with the government. In the event that the MDA is held to be invalid, the tax burden on the company’s Tanzanian operations would increase and the company would have to pay additional taxes for prior periods.

Furthermore, in Guinea, Mali and Tanzania, AngloGold Ashanti is due refunds of input tax and fuel duties which remain outstanding for periods longer than those provided for in the respective statutes. In addition, the company has other outstanding assessments and unresolved tax disputes in a number of

The countries including Brazil, Argentina and Ghana. If the outstanding VAT input taxes are not received, the tax disputes are not resolved and assessments favorable to AngloGold Ashanti are not made, there could be an adverse effect upon the company’s results of operations and its financial condition. AngloGold Ashanti may also be impacted by the outcome of elections in jurisdictions in which it has operations and ancillary political processes leading up to elections. The company expects elections to occur in the DRC in 2011 and in South Africa in 2014.

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In February 2010, AngloGold Ashanti and other mining companies in Ghana received notice that the country’s government was considering a review and amendments to its fiscal mining regime. The government of Ghana has subsequently amended its fiscal mining regime, and should it seek to impose this new increased royalty rate on the company, AngloGold Ashanti may challenge it in light of the stability agreement entered into by the company with the government of Ghana in December 2003 and which was subsequently ratified by the parliament of Ghana in early 2004. No assurance can be given that, should AngloGold Ashanti challenge this new increased royalty rate, that it would ultimately succeed in the challenge or that any dispute with the government of Ghana would not otherwise have a material adverse impact on the company’s financial condition or results of operations.
In May 2010, the government of Australia proposed a Resource Super Profit Tax (RSPT), which would have required extractive industries, including the gold mining industry, to pay a tax of 40 percent on profits from Australian operations above certain levels determined by the government. Had the RSPT been implemented as proposed it would have had an adverse impact upon AngloGold Ashanti’s financial results from its existing operations in Australia as well as from the Tropicana project, once operational. However, in July 2010, the government of Australia proposed to replace the RSPT with the Mineral Resource Rent Tax (MRRT), which requires a tax of 30 percent on profits above certain levels from coal and iron ore mining starting July 1, 2010. Should the government of Australia reintroduce the RSPT or extend the MRRT to the gold mining industry, or if similar “super profit” taxes are introduced in Australia or any other country in which the company operates this couldmay also introduce strict exchange controls, impose restrictions to source materials and services locally, or impose other similar restrictions that hinder foreign companies’ operations within such countries. For example, the Argentine government introduced stricter exchange controls and related protracted approval processes, which may limit the company’s ability to repatriate dividends from its Argentine subsidiaries. In October 2011, the Argentina government has decreed that mining, oil and energy companies must repatriate export earnings. Additionally, the purchase of US dollars requires authorization from the Argentine tax agency and the purpose for which the currency will be used must be stated. In May 2012, the Argentine Mining Secretariat issued new regulations requiring mining companies in Argentina to boost their domestic purchases of equipment and services. Mining companies are now required to resort exclusively to locally established suppliers for their export-related shipping and logistics operations. A separate norm requires companies to open an import substitution division which will be in charge of submitting procurement plans to the Mining Secretariat on a quarterly basis. Such requirements are hindering the company’s operations within Argentina and these or similar requirements may continue to do so in the future and may have a material adverse effect on AngloGold Ashanti’s results of operations and its financial condition.
Labor disruptions and/

If, in one or increased labor costsmore of the countries in which it operates, AngloGold Ashanti were not able to obtain or maintain necessary permits, authorizations or agreements to implement planned projects or continue its operations under conditions or within timeframes that make such plans and operations economically viable, or if the applicable legal, ownership, fiscal (including all royalties and duties), exchange control, employment, environmental and social laws or regimes change materially, or if the governing political authorities change resulting in amendments to such laws and regimes, this could have a material adverse effect on AngloGold Ashanti’s operating results, financial condition, and, in extreme situations, on the viability of an operation.

For example, in South Africa mining rights are linked to meeting various obligations that include the broad-based socio-economic empowerment charter for the mining industry (the Revised Charter). Compliance with the Revised Charter is measured using a designated scorecard relating to equity ownership and management control of mining companies by historically disadvantaged South Africans (HDSAs) by no later than May 2014 and that HDSAs must constitute 40 percent of all levels of management by 2014. While AngloGold Ashanti believes that it is compliant with ownership targets to be achieved by May 2014, it must make further progress to achieve future targets, including further participation by HDSAs in senior and top management levels, the upgrade of housing and accommodation at the company’s mines, further human resource development, mine community development, sustainable development and growth as well as procurement and enterprise development, certain of which are also included under the Revised Charter’s targets that must also be achieved by May 2014.

The company will incur expenses in giving further effect to the Revised Charter and the scorecard. AngloGold Ashanti may not meet all of the various requirements by the required dates. Additionally, the South African government may decide that the Mining Charter has not gone far enough to achieve its underlying goals and therefore decide to expand the obligations of mining companies thereunder. Should AngloGold Ashanti breach its obligations in complying with the Mineral and Petroleum Resources Development Act, Revised Charter or any future amendments to the Mining Charter, its mining rights in South Africa could be suspended or cancelled by the Minister of Mineral Resources and it may be unable to obtain any new mining rights. Any such suspension or cancellation could have a material adverse effect on Anglo Ashanti’s results of operations and financial condition.

AngloGold Ashanti’s Mineral Reserve, deposits and mining operations are located in countries that face instability and security risks that may adversely affect both the terms of its mining concessions, as well as its ability to conduct operations in certain countries.

Some of AngloGold Ashanti’s mineral deposits and mining and exploration operations are located in countries that are experiencing political instability and economic uncertainty.

Certain of the countries in which AngloGold Ashanti has mineral deposits or mining or exploration operations, including the DRC, Mali, Guinea and Colombia, have in the past experienced, and in certain cases continue to experience, a difficult security environment. In particular, various illegal groups active in regions in which the company is present may pose a credible threat of military repression, terrorism, civil unrest, extortion and kidnapping, which could have an adverse effect on its operations in these and other regions.

For example, Mali continues to experience a difficult security environment since the military coup in March 2012. The situation in Mali remains of heightened concern as a result of the instability in northern Mali.

Eastern DRC also continues to experience tension consistent with the cycles of unrest experienced since the late 2000s. Fighting has caused instability in the area and could expand or intensify.

In 2012, and for the first time in approximately seven years, Anglo Gold Ashanti Colombia’s (AGAC) assets and employees were the targets of direct attacks by hostile actors around the La Colosa project’s area of influence. These and other such attacks could adversely affect the company’s operations in Colombia.

Since 2009, the company has recorded an almost five-fold increase in the instances of injury to security personnel, including members of AngloGold Ashanti’s internal security, private security companies and public security forces in certain jurisdictions. The rise in the number and severity of security incidents has come as a result of both increased illegal and artisanal mining due to a steady migration of people into the areas and an increase in the level of organization and funding of criminal activity around some of the company’s Continental African operations, spurred on by an escalating gold price. The most significant security challenges have occurred in Tanzania and Ghana in areas where there is endemic poverty and high levels of unemployment. If the security environment surrounding the company’s operations that are most exposed to these challenges does not improve or further deteriorates, employee, third-party and community member injuries and fatalities could also increase. Any such increase could disrupt the company’s operations in certain mines and adversely affect its reputation, results of operations and financial condition.

In some instances, risk assessments categorize threats as serious enough to require resort to public security forces, such as national police or military units on a near-permanent basis. In the event that continued operations in any of the company’s countries of operations compromise the company’s security or business principles, AngloGold Ashanti may withdraw from any such countries on a temporary or permanent basis. This could have a material adverse impact on AngloGold Ashanti’s results of operations and financial condition.

Furthermore, the company has at times experienced strained relationships with certain of its host communities. AngloGold Ashanti employeesoperates in South Africa, Ghana,several regions where poverty, unemployment and the lack of access to alternative livelihoods mean that the creation and distribution of economic benefit from mining operations is a significant area of focus for community and government. Conflict with communities has led to community protests and business interruptions, particularly at the Siguiri mine in Guinea during 2010 and 2011. In 2012, there were five recorded community protests at Cerro Vanguardia, Obuasi and Geita.

Illegal and artisanal mining occurs on AngloGold Ashanti’s properties, which can disrupt the company’s business and expose the company to liability.

Illegal and artisanal miners are active on, or adjacent to, some of AngloGold Ashanti’s Continental African and South American countries, are highly unionized. Trade unions, therefore, have a significant impact on the company’s labor relations climate, as well as on social and political reforms, most notably in South Africa. There is a risk that strikes or other types of conflictproperties, which leads at times to interference with unions or employees may occur at any of the company’s operations particularly whereand results in conflict situations that present a security threat to property and human life. Artisanal mining is associated with a number of negative impacts, including environmental degradation, flouting of land rights, poor working practices, erosion of civil society, human rights abuse and funding of conflict. The environmental, social, safety and health impacts of artisanal mining are frequently attributed to formal mining activity, and it is often assumed that artisanally-mined gold is channeled through large-scale mining operators, even though artisanal and large-scale miners have distinct supply chains. These misconceptions impact negatively on the labor force is unionized. Labor disruptions mayreputation of the industry.

The activities of the illegal miners, which include theft and shrinkage, could cause damage to AngloGold Ashanti’s properties, including pollution, underground fires, or personal injury or death, for which AngloGold Ashanti could potentially be used to advocate labor, political or social goalsheld responsible. Illegal mining could result in the future. For example, labor disruptions may occurdepletion of mineral deposits, potentially making the future mining of such deposits uneconomic. The presence of illegal miners could lead to project delays and disputes regarding the development or operation of commercial gold deposits. Illegal mining and theft could also result in sympathy with strikes or labor unrest in other sectors of the economy. Material labor disruptions could have an adverse effect on AngloGold Ashanti’s results of operationslost gold reserves, mine stoppages, and financial condition.

As at December 31, 2010, approximately 65 percent of the company’s workforce excluding contractors, or approximately 57 percent of its total workforce, was located in South Africa. In South Africa, it has become established practice to negotiate wages and conditions of employment with the unions every two years through the Chamber of Mines of South Africa. An agreement was signed with the unions in July 2009, following negotiations between the Chamber of Mines and the National Union of Mineworkers, the United Associations of South Africa, (UASA) (on behalf of some clerical and junior management staff) and Solidarity (on behalf of a small number of miners). The next round of negotiations is expected to take place in 2011.
AngloGold Ashanti cannot give assurance that it will be able to renegotiate this agreement on satisfactory terms when it expires in July 2011.
As at December 31, 2010, approximately 10 percent of the company’s workforce excluding contractors, or approximately 12 percent of the total workforce, was located in Ghana. In Ghana, a three-year, wage agreement for the years 2009 to 2011, effective from January 1, 2009, was reached towards the end of 2009. The next round of negotiations is expected to take place in 2011. AngloGold Ashanti cannot give assurance that it will be able to renegotiate this agreement on satisfactory terms when it expires at the end of December 2011.
Labor costs represent a substantial proportion of the company’s total operating costs and in many operations, including its South African, Ghanaian and Tanzanian operations, is the company’s single largest component of operating costs. Any increases in labor costs have to be offset by greater productivity efforts by all operations and employees, failing which such increase in labor cost could have a material adverse effect on AngloGold Ashanti’s results of operations and itsor financial condition.

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In 2012, the company recorded an increase in the number and severity of security incidents, due to a steady migration of people into the areas and an increase in the level of organization and funding of criminal activity around some of the company’s Continental African operations, spurred on by an escalating gold price. The most significant security challenges have occurred in Tanzania and Ghana in areas where there is endemic poverty and high levels of unemployment.

The use of mining contractors at certain of the company’s operations may expose AngloGold Ashanti to delays or suspensions in mining activities and increases in mining costs.

AngloGold Ashanti uses contractors at certain of its operations to mine and deliver ore to processing plants. Consequently, at theseplants as well as for other purposes. At mines employing mining contractors, contracting costs represent a significant proportion of the total operating costs of these operations and the company does not own all of the mining equipment. For example, increased contractor rates at the Sadiola mine in Mali contributed to a significant rise in total cash costs in the final quarter of 2011. Increased contractor costs at Sunrise Dam in Australia and Geita in Tanzania contributed to higher production costs in the first quarter of 2012.

AngloGold Ashanti’s operations could be disrupted, resulting in additional costs and liabilities, if the mining contractors at theseaffected mines have financial difficulties or if a dispute arises in renegotiating a mining contract, or if there is a delay in replacing an existing contractor.contractor and its operating equipment to meet business needs at expected cost levels. Increases in contract mining rates, in the absence of associated productivity increases, will also have an adverse impact on the company’s results of operations and financial condition.

For example, on October 13, 2012, AngloGold Ashanti terminated the underground development contract with a third-party contractor at the Obuasi mine in Ghana. The costs of the termination amounted to $17 million.

In addition, AngloGold Ashanti’s reduced control over those aspects of operations which are the responsibility of contractors, their failure to comply with applicable legal, human rights and regulatory requirements, or their inability to manage their workforce or provide high quality services or a high level of productivity could adversely affect AngloGold Ashanti’s reputation, results of operations and financial condition, and may result in the company incurring liability to third parties due to the actions of contractors.

AngloGold Ashanti competes with mining and other companies for key human resources.

resources and its inability to retain key personnel could have an adverse effect on its business.

AngloGold Ashanti competes on a global basis with mining and other companies, to attract and retain key human resources at all levels with the appropriate technical skills and operating and managerial experience necessary to operate and supervise its business. This is further exacerbated in the current environment of increased mining activity across the globe, combined with the global shortage of key mining skills, including geologists, mining engineers, metallurgists and skilled artisans.

The retention of staff is particularly challenging in South Africa, where, in addition to the impacts of global industry shortages of skilled labor, AngloGold Ashanti is required to achieve employment equity targets of participation by HDSAs in management and other positions.

AngloGold Ashanti competes with all companies in South Africa to attract and retain a small but growing pool of HDSAs with the necessary skills and experience.
There can AngloGold Ashanti has historically faced difficulty recruiting and retaining young graduates and qualified mid-level management in South Africa. Recruitment of skilled personnel has been challenging in Continental Africa due to university offerings that are often not well-suited to the specific needs of the mining industry, as well as other factors such as language barriers and low literacy skills.

The recruitment of skilled workers is also highly competitive in South America as a result of a shortage of skills and intense competition between mining companies.

The company may not be no assurance that the company willable to retain and attract and retainsufficient skilled and experienced employees.employees in all areas of the business. Should it fail to do so or lose any of its key personnel, the business and growth prospects may be harmed and this could have an adverse impact on AngloGold Ashanti’s results of operations and its financial condition.

AngloGold Ashanti’s inability to retain its senior management may have an adverse effect on its business.

The treatmentcompany’s success depends largely upon the continued service of its senior management, including its chief executive officer, chief financial officer and the executive officers at each of its business divisions and general managers at its mines. The loss of one or more members of senior management, such as the recently announced departure of AngloGold Ashanti Chief Executive Officer, Mark Cutifani, to take the same position at Anglo American PLC as of April 3, 2013, could lead to other members of the management team leaving, disrupt the company’s operations, and have a material adverse impact on the company’s business, results of operations and financial condition.

The prevalence of occupational health diseases and the potential costs and liabilities related thereto may have an adverse effect uponon the business and results of operations of AngloGold Ashanti and its financial condition.

Ashanti.

The primary areas of focus in respect of occupational health of employees within the company’s operations are noise inducednoise-induced hearing loss (NIHL),and occupational lung diseases (OLD), which includesinclude pulmonary diseases such as tuberculosis from various causes and tuberculosis (TB),silicosis in individuals exposed to silica dust. These require active dust management strategies in underground operations, particularly in South Africa where a significant number of silicosis cases by current and former employees alleging past exposures are still reported each year to the board for statutory compensation. AngloGold Ashanti provides occupational health services to its employees at its occupational health centers and clinics and continues to improve preventative occupational hygiene initiatives.initiatives, such as implementing various dust control measures and supplying its employees with respiratory protection equipment. If the costs associated with providing such occupational health services, implementing such dust control measures or supplying such equipment increase significantly beyond anticipated or budgeted amounts, this could have an adverse effect on theAngloGold Ashanti’s results of operations of AngloGold Ashanti and its financial condition.

The South African government, by way Actual and alleged health and safety incidents or breaches of a cabinet resolution in 1999, proposed a possible combination and alignment of benefits of the Occupational Diseases in Mines and Works Act (ODMWA) that provides for compensation to miners who have OLD and/or TB, and the Compensation for Occupational Injuries and Diseases Act (COIDA), that provides for compensation of non-miners who have OLD. It appears less likely that the proposed combination of the two acts will occur but some alignment of benefitsstandards may be considered. COIDA provides for compensation payments to workers suffering permanent disabilities from OLD, which are classified as pension liabilities if the permanent disability is above a certain threshold, or a lump sum compensation payment if the permanent disability is below a certain threshold. ODMWA only provides for a lump sum compensation payment to workers suffering from OLD as well as the payment of medical expenses over the claimant’s lifetime.
If the proposed combination of COIDA and ODMWA were to occur, this could further increase the level of compensation claims AngloGold Ashanti could be subject to and consequently could have an adverse effect on its financial condition.
On November 23, 2010 the Chamber of Mines of South Africa applied to the North Gauteng High Court for a declaratory order as to whether or not the Compensation Commissioner may include in the levy to be paid by any specific mine under ODMWA any amount that is intended to be used for funding benefits payable to:
ex-mine workers who had never worked at that mine; or
ex-mine workers who used to work at the mine, but no longer work at the mine.

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Judgment in the case was given on April 29, 2011. The Honorable Judge Zondo dismissed the Chamber’s application with costs. The judge concluded that the Compensation Commissioner has authority under ODMWA to address an historical or actuarial deficit in the Compensation Fund by increasing the levy payable by current mines and works to cover the shortfall in respect of all ex-mine workers. The Chamber is considering whether to appeal the judgment. Should the Chamber’s appeal be unsuccessful this could further increase the levy payable by AngloGold Ashanti to the ODMWA fund and consequently could have an adverse effect on its financial condition.
Mr. Thembekile Mankayi instituted legal action against AngloGold Ashanti in October 2006 in the South Gauteng High Court. Mr Mankayi claimed approximately R2.6 million for damages allegedly suffered by him as a result of silicosis allegedly contracted while working on a mine of Vaal Reefs Mining and Exploration Company Limited, which company was renamed AngloGold Limited in 1998 and AngloGold Ashanti Limited in 2004. The case was heard and judgment in the exception action was rendered on June 26, 2008 inalso adversely impact the company’s favor on the basis that mine employers are indemnified under ODMWA and COIDA against claims by employees against employers for damages relating to compensable diseases. Mr. Mankayi’s appeal to the Supreme Court of Appeal of South Africa was dismissed. On August 17, 2010, the Constitutional Court of South Africa heard Mr. Mankayi’s application for leave to appeal to the Constitutional Court. Judgment in the Constitutional Court was handed down on March 3, 2011. The Constitutional Court granted the application for leave to appeal and dealt with the matter as a full appeal. Mr. Mankayi was deceased prior to this judgment in the Constitutional Court, and, following the judgment, Mr. Mankayi’s executor may proceed with his case in the High Court and seek a claim for damages under common law against AngloGold Ashanti. This will comprise, amongst others, providing evidence that Mr. Mankayi contracted silicosis as a result of negligent conduct on the part of AngloGold Ashanti.
reputation.

AngloGold Ashanti is studying the details of the Constitutional Court judgment and will defend the case and any subsequent claims on their merits. As a result of the Constitutional Court decision,currently subject to class action litigation with respect to alleged occupational lung diseases (see “– AngloGold Ashanti could beis subject to numerous similar claims, including potentially by waythe risk of a class action or similar group claim. These too would be defended bylitigation, the companycauses and adjudicated by the Courts on their merits. In viewcosts of the limitation of current informationwhich are not always known”). AngloGold Ashanti is calling for the accurate estimation ofindustry to engage with government (and other stakeholders) to seek an appropriate industry-wide solution. An industry-wide solution may not be reached or the terms thereof may have a liability, no reliable estimate can be made for this possible obligation at this time. Should AngloGold Ashanti be unsuccessful in defending the claim of Mr. Mankayi’s executor and any other individuals or groups that lodge similar claims, this would have anmaterial adverse impacteffect on AngloGold Ashanti’s financial condition which could potentially be material.

condition.

In response to the effects of silicosis in labor sendinglabor-sending communities, a number of mining companies (under the auspices of the Chamber of Mines of South Africa) together with the NUM, which is the largest union in the mining sector in South Africa, and the national and regional departments of health, have embarked on a project to assist in delivering compensation and relief by mining companies under the ODMWAOccupational Diseases in Mines and Works Act (ODMWA) to affected communities.

In light of the Constitutional Court judgment, AngloGold Ashanti is calling for the industry to engage with government (and other stakeholders) to seek an appropriate industry-wide solution. AngloGold Ashanti can provide no assurances that an industry-wide solution can be reached or that the terms thereof will not have a material adverse affect on AngloGold Ashanti’s financial condition.

AngloGold Ashanti faces certain risks in dealing with HIV/AIDS, particularly at its South African operations and with tropical disease outbreaks such as malaria, and other diseases which may have an adverse effect on the company’s results of operations.

operations and financial condition.

AIDS and associated diseases remain one of the major health care challenges faced by AngloGold Ashanti’s South African operations. AccurateWorkforce prevalence data for AIDS is not available owing to doctor-patient confidentiality. The South African workforce prevalence studies however, indicate that HIV prevalence rates among AngloGold Ashanti’s South African workforce may be as high as 30 percent. AngloGold Ashanti continues to develop and implement programs to help those infected with HIV and prevent new infections from spreading. Since 2001, the company has offered a voluntary counseling and HIV testing program for employees in South Africa. In 2002, it began to offer anti-retroviral therapy, or ART, to HIV positive employees who met the current medical criteria for the initiation of ART. From April 2003, AngloGold Ashanti commenced a roll-out of the treatment to all eligible employees desiring it. As of December 2010, approximately 2,500 employees were receiving treatment using anti-retroviral drugs.

AngloGold Ashanti does not expect the cost that it will incur related to the prevention of HIV infection and the treatment of AIDS to materially and adversely affect its results of operations. Nevertheless, it is not possible to determine with certainty the costs that it may incur in the future in addressing this issue, and consequently the company’s results of operations and its financial condition could be adversely impacted.

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Malaria and other tropical diseases pose significant health risks at all of the company’s operations in Central, Westcentral, west and Easteast Africa where such diseases may assume epidemic proportions because of ineffective national control programs. Malaria is a major cause of death in young children and pregnant women but also gives rise to fatalities and absenteeism in adult men. Consequently, if uncontrolled,Other conditions such as heart disease, chronic diseases, and obesity are of increasing incidence and concern.

Such diseases impair the disease could have an adverse impact uponhealth of workers and negatively affect productivity and profitability levelsas a result of workers’ diminished focus or skill, absenteeism, treatment costs and allocated resources. Any current or future medical program may not be successful in preventing or reducing the infection rate among AngloGold Ashanti’s employees or in affecting consequent illness or mortality rates. AngloGold Ashanti may incur significant costs in addressing this issue in the future, which could also adversely impact the company’s results of operations located in these regions.

and financial condition.

The costs and impacts associated with the pumping of water inflows from closed mines adjacent to the company’s operations could have an adverse effect uponon its results of operations.

Certain of AngloGold Ashanti’s mining operations are located adjacent to the mining operations of other mining companies. The closure of a mining operation may have an impact upon continued operations at the adjacent mine if appropriate preventative steps are not taken. In particular, this can include the ingress of underground water where pumping operations at the adjacent closed mine are suspended. Such ingress could have an adverse effect uponon any one of the company’s mining operations as a result of property damage, disruption to operations, additional pollution liabilities and pumping costs and consequently could have an adverse impact uponon its results of operations and financial condition.

The potential costs associated with the remediation and/orand prevention of groundwater contamination from the company’s operations or due to flooding from closed mines adjacent to the company’s operations could have a material adverse effect upon theon AngloGold Ashanti’s results of operations of and financial condition.

AngloGold Ashanti has identified groundwater contamination plumes at certain of its operations that have occurred primarily as a result of seepage from surface operations and its financial condition.

facilities including tailings storage facilities and waste rock.

Deep groundwater contamination is a significant issue in South Africa, where groundwater in some older mining regions has infiltrated mined-out workings. Potential contamination risk to shallow ground and surface water resources can occur when water is exposed to sulfide-bearing rock in such situations. AngloGold Ashanti has identified a flooding and future pollution risk posed by deep groundwater in the Klerksdorp and Far West Rand goldfields in South Africa.goldfields. AngloGold Ashanti’s Vaal River operations are part of the Klerksdorp goldfieldgoldfields and its West Wits operations are part of the Far West Rand goldfield. Various studies have been undertaken by AngloGold Ashanti since 1999. Due togoldfields. As a result of the interconnected nature of underground mining operations in South Africa, any proposed solution needs to be a combined one supported by all the companies owning mines located in these goldfields. As a result, the South African 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,liabilities, no reliable estimate can be made at this time for this possible obligation, which could be material and have an adverse impact on AngloGold Ashanti’s financial condition.

AngloGold Ashanti has identified groundwater contamination plumes at certain of its operations. Numerous scientific, technical and legal studies have been undertaken to assist in determining the magnitude of the contamination and to find sustainable remediation solutions, and, based thereon, the company has instituted processes to reduce seepage and/or to reduce soil and groundwater contamination. It has been demonstrated that certain techniques and/or technologies, including monitored natural attenuation by the existing environment and phyto-technologies, could reduce seepage and/or address soil and groundwater contamination. Subject to the completion of further trials and the technologies becoming a proven remediation technique, no reliable estimate can currently be made for thethese obligations. The potential costs of remediation and/orand prevention of groundwater contamination at AngloGold Ashanti’s operations. Should these costsoperations could be significant this couldand may have a material adverse impact uponon AngloGold Ashanti’s results of operations and its financial condition.

The occurrence of events for which AngloGold Ashanti is not insured or for which its insurance is inadequate may adversely affect cash flows and overall profitability.

AngloGold Ashanti maintains insurance to protect only against catastrophic events which could have a significant adverse effect on its operations and profitability. This insurance is maintained in amounts that the company believes to be reasonable depending upon the circumstances surrounding each identified risk. However, damage and third-party claims arising from catastrophic events may exceed the limit of liability on insurance policies the company has in place. Furthermore, AngloGold Ashanti’s insurance does not cover all potential risks associated with its business and may exclude certain parts of its business. In addition, AngloGold Ashanti may elect not to insure certain risks due to the high premiums or for various other reasons, including an assessment that the risks are remote.

The company may not be able to obtain insurance coverage at acceptable premiums. The company believes negotiations with insurance providers have become more difficult for a number of reasons, including prevailing macroeconomic conditions and the risk profile of the mining industry. Insurance for certain risks in particular, such as loss of title to mineral property, political risks in certain jurisdictions, environmental pollution, or other hazards resulting from exploration and production, is not generally available to mining companies on acceptable terms. The availability and cost of insurance coverage can vary considerably from year to year as a result of events beyond the company’s control or from claims, and this can result in higher premiums and periodically being unable to maintain the levels or types of insurance carried.

the company typically carries.

The failure to obtain adequate insurance could impair the company’s ability to continue to operate in the normal course or could result in the occurrence of events for which AngloGold Ashanti is not insured, willeither of which could adversely impact its cash flows, its results of operations and financial condition.

AngloGold Ashanti is subject to the risk of litigation, the causes and costs of which are not always known.

AngloGold Ashanti is subject to litigation, arbitration and other legal proceedings arising in the normal course of business and may be involved in disputes that may result in litigation. The causes of potential future litigation cannot be known and may arise from, among other things, business activities, environmental and health and safety concerns, share price volatility or failure to comply with disclosure obligations. The results of litigation cannot be predicted with certainty but could include costly damage awards or settlements, fines, and the loss of licenses, concessions, or rights, among other things.

In the event of a dispute AngloGold Ashanti may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdiction of courts in South Africa or the United States.

AngloGold Ashanti is subject to numerous claims, including class actions or similar group claims relating to silicosis and other OLD, and could be subject to similar claims in the future.

AngloGold Ashanti has received notice of two applications for class certification relating to silicosis in which the company is a respondent. It has also received notice of individual claims. For further information, please refer to “Item 8.: Financial Information – Legal Proceedings – South Africa – Silicosis litigation”.

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 and any subsequent claims as filed on their merits. Should AngloGold Ashanti be unsuccessful in defending any such claims, or in otherwise favorably resolving perceived deficiencies in the national occupational disease compensation framework that were identified in an earlier decision by the Constitutional Court of South Africa, such matters would have an adverse effect on its financial condition.

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position, which could be material.


In Colombia, the company is also involved in five class action lawsuits in relation to AGAC Santa Maria-Montecristo and La Colosa projects. One of these class action lawsuits led to a preliminary injunction suspending the mining concession contracts of the Santa Maria-Montecristo project in September 2011. Additionally, in Colombia, AGAC is involved in an action in the Administrative Superior Court of the Cundinamarca District against the Department of the Environment, Housing and Territorial Development (DoE) following its issuance of a fine against AGAC on the basis that AGAC was in breach of its mining terms of reference.

Should the company be unable to resolve disputes favorably or to enforce its rights, this may have a material adverse impact on the company’s financial performance, cash flow and results of operations.

The implementation of an integrated Enterprise Resource Planning (ERP) system could have an adverse effect on AngloGold Ashanti’s results of operations and financial condition.

AngloGold Ashanti is implementing a single, global ERP system to support all the operations managed by AngloGold Ashanti. The ERP system is being implemented over a three-and-a-half-year period which commenced in August 2011. The contemplated implementation of an ERP system on a global basis is inherently a high-risk initiative due to the potential for implementation cost and time overruns. In addition, such implementation could affect the ability of AngloGold Ashanti to report and manage technical and financial information if difficulties in the implementation and operation of the system are experienced, which could have an adverse effect on AngloGold Ashanti’s results of operations and financial condition. The first sites went live during February 2013.

Sales of large quantities of AngloGold Ashanti’sAshanti‘s ordinary shares and ADSs,American Depository Shares (ADSs), and the perception that these sales may occur or other dilution of the company’s equity, could adversely affect the prevailing market price of the company’s securities.

The bulk of AngloGold Ashanti’s shares are held by a relatively small number of investors. According to information available to the company, AngloGold Ashanti’s four largest shareholders beneficially owned approximately 23.29 percent of AngloGold Ashanti’s ordinary shares as at December 31, 2012.

Poor returns, soaring costs, higher capital expenditure, ill-conceived corporate activity, rising geopolitical and labor risk and low dividend yields over the past few years have resulted in a change in market sentiment towards gold equities. The market price of the company’s securities could fall if large quantities of ordinary shares or ADSs are sold in the public market, if there is divestment by certain types or groupings of investors, or if there is the perception in the marketplace that such sales could occur. Subject to applicable securities laws, holders of AngloGold Ashanti’sthe company‘s ordinary shares or ADSs may decide to sell them at any time. The market price of the company’s ordinary shares or ADSs could also fall as a result of any future offerings AngloGold Ashanti makes of its ordinary shares, ADSs, or securities exchangeable or exercisable for the company’s ordinary shares or ADSs, or the perception in the market place that these salesofferings might occur. AngloGold Ashanti may make such offerings, including offerings of additional ADS rights, share rights or similar securities, at any time or from time to time in the future.

Fluctuations in the exchange rate of currencies may reduce the market value of AngloGold Ashanti’s securities, as well as the market value of any dividends or distributions paid by the company.

AngloGold Ashanti has historically declared all dividends in South African rands. As a result, exchange rate movements may have affected and may continue to affect the Australian dollar, the British pound, the Ghanaian cedi and the US dollar value of these dividends, as well as of any other distributions paid by the relevant depositary to investors that hold the company’s securities. This may reduce the value of these securities to investors.

AngloGold Ashanti’s memorandum and articles of association allowsallow for dividends and distributions to be declared in any currency at the discretion of the board of directors, or the company’s shareholders at a general meeting. If and to the extent that AngloGold Ashanti opts to declare dividends and distributions in US dollars, exchange rate movements will not affect the US dollar value of any dividends or distributions. Nevertheless, the value of any dividend or distribution in Australian dollars, British pounds, Ghanaian cedis or South African rands will continue to be affected. If and to the extent that dividends and distributions are declared in South African rands, exchange rate movements will continue to affect the Australian dollar, British pound, Ghanaian cedi and US dollar value of these dividends and distributions. Furthermore, the market value of AngloGold Ashanti’s securities as expressed in Australian dollars, British pounds, Ghanaian cedis, US dollars and South African rands will continue to fluctuate in part as a result of foreign exchange fluctuations.

The announced proposal by

AngloGold Ashanti may not pay dividends or make similar payments to shareholders in the South African Government to replace the Secondary Tax on Companies with a withholding tax onfuture.

AngloGold Ashanti pays cash dividends and other distributions may impactonly if there are sufficient funds available for that purpose. Fund availability depends upon many factors that include the amount of dividends or other distributions received bycash available in relation to AngloGold Ashanti’s shareholders.

On February 21, 2007, thecapital expenditure on existing infrastructure and exploration and other projects.

Under South African Government announcedlaw, companies are entitled to pay a proposaldividend or similar payment to replace Secondary Tax on Companies with a 10 percent withholding tax on dividendsits shareholders only if the company meets the solvency and other distributions payable to shareholders. Although this may reduce the tax payable byliquidity tests set out in legislation, and the company’s South African operations, thereby increasing distributable earnings,founding documents.

Given these factors, including the withholding tax could generally reducecapital and investment needs of the company, and the board of directors’ discretion to declare a dividend that includes the amount ofand timing thereof, cash dividends or other distributions received by its shareholders. The proposal was expected tomay not be implementedpaid in 2010, but its implementation has been delayed to April 1, 2012.

31the future.


ITEM 4: INFORMATION ON THE COMPANY

4A.

HISTORY AND DEVELOPMENT OF THE COMPANY

GROUP INFORMATION

AngloGold Limited was foundedformed in June 1998 with the consolidation of the gold mining interests of Anglo American. The company,American plc. AngloGold Ashanti Limited, as it is now,the company exists today, was formed on April 26, 2004 following the business combination between AngloGold and Ashanti Goldfields Company Limited. AngloGold Ashanti is currently the third-largest gold producer in the world based on ounces sold.

Current profile

CURRENT PROFILE

AngloGold Ashanti Limited is headquartered in Johannesburg, South Africa, is a global goldAfrica. The company with a portfolio of long-life, relatively low-cost assets and differing orebody types in key gold producing regions. The company’s 20 operations are located in 10 countries (Argentina, Australia, Brazil, Ghana, Guinea, Mali, Namibia, South Africa, Tanzania and the US), and are supported by extensive exploration activities. The combined Proven and Probable Ore Reserves of the group amounted to 71.2 million ounces as at December 31, 2010.

The primary listing of the company’s ordinary shares is on the JSE in South Africa. Its ordinary shares are also listed on stock exchanges in London, Paris and Ghana, as well as being quoted in Brussels in the form of International Depositary Receipts (IDRs), in New York in the form of American Depositary Shares (ADSs), in Australia, in the form of Clearing House Electronic Subregister System Depositary Interests (CDIs) and in Ghana, in the form of Ghanaian Depositary Shares (GhDSs).
AngloGold Ashanti Limited (Registration number 1944/017354/06) was incorporated in the Republic of South Africa in 1944 under the name of Vaal Reefs Exploration and Mining Company Limited and operates under the South African Companies Act 6171 of 1973,2008 (Companies Act), as amended.

Its registered office is at 76 Jeppe Street, Newtown, Johannesburg, South Africa, 2001.

4A. HISTORY AND DEVELOPMENT OF THE COMPANY
Telephone: +27 11 6376000.

While AngloGold Ashanti’s primary listing is on the Johannesburg Stock Exchange (JSE), the company is also listed on the London Stock Exchange (LSE), the New York Stock Exchange (NYSE), the Ghana Stock Exchange (GhSE) and the Australian Securities Exchange (ASX).

HISTORY AND SIGNIFICANT DEVELOPMENTS OF THE COMPANY

Below are highlights of key corporate activities from 1998:

1998

1998

Formation of AngloGold Limited through the consolidation of East Rand Gold and Uranium Company Limited; Eastvaal Gold Holdings Limited; Southvaal Holdings Limited; Free State Consolidated Gold Mines Limited; Elandsrand Gold Mining Company Limited; H.J. Joel Gold Mining Company Limited and Western Deep Levels Limited into a single, focused, independent, gold mining company. Vaal Reefs Exploration and Mining Company Limited (Vaal Reefs), the vehicle for the consolidation, changed its name to AngloGold Limited and increased its authorized share capital, effective March 30, 1998; and

Acquisition of non-controlling shareholders interest in Driefontein Consolidated Limited (17 percent); Anmercosa Mining (West Africa) Limited (100 percent); Western Ultra Deep Levels Limited (89 percent); Eastern Gold Holdings Limited (52 percent); Erongo Mining and Exploration Company Limited (70 percent).
1999
Purchased Minorco’s gold interests in North and South America; and
Acquisition of Acacia Resources in Australia.
2000
Acquired:
a 40 percent interest in the Morila mine in Mali from Randgold Resources Limited;
a 50 percent interest in the Geita mine in Tanzania from Ashanti Goldfields Company Limited (Ashanti); and
a 25 percent interest in OroAfrica, South Africa’s largest manufacturer of gold jewellery.

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2001
AngloGold sold the Elandsrand and Deelkraal mines to Harmony Gold Mining Company Limited (Harmony); disposedand Western Deep Levels Limited into a single, focused, independent, gold mining company. Vaal Reefs Exploration and Mining Company Limited (Vaal Reefs), the vehicle for the consolidation, changed its name to AngloGold Limited and increased its authorized share capital, effective March 30, 1998.

1998-2004

Expansion of AngloGold Limited’s operations outside of South Africa.

2004

Concluded the business combination with Ashanti Goldfields Company Limited, at which time the company changed its interestsname to AngloGold Ashanti Limited.

2007

Anglo American plc sold 69,100,000 ordinary shares of AngloGold Ashanti, thereby reducing Anglo American’s shareholding in No. 2 Shaft Vaal River OperationsAngloGold Ashanti from 41.7 percent to African Rainbow Minerals (ARM) and made an unsuccessful take-over bid16.6 percent.

2009

Anglo American plc sold its remaining shareholding to Paulson & Co. Inc.

2010

AngloGold Ashanti eliminated its hedge book, thereby gaining full exposure to spot gold prices.

2012

AngloGold Ashanti acquired the remaining 50 percent interest in Serra Grande in Brazil for Normandy Mining Limited.

$215 million.

2002
Sold its Free State assets to ARM and Harmony; and
Acquired an additional 46.25 percent of the equity, as well as the total loan assignment, of Cerro Vanguardia SA from Pérez Companc International SA, thereby increasing its interest in Cerro Vanguardia to 92.5 percent.
2003
Disposed of its wholly owned Amapari project to Mineração Pedra Branca do Amapari;
Sold its 49 percent stake in the Gawler Craton joint venture, including the Tunkillia project located in South Australia to Helix Resources Limited;
Sold its interest in the Jerritt Canyon joint venture to Queenstake Resources USA Inc;
Disposed of its entire investments in East African Gold Mines Limited and in Randgold Resources Limited; and
Purchased a portion of the Driefontein mining area in South Africa from Gold Fields Limited.
2004
Sold its Western Tanami project to Tanami Gold NL in Australia;
Concluded the business combination with Ashanti Goldfields Company Limited, at which time, the company changed its name to AngloGold Ashanti Limited;
Acquired the remaining 50 percent interest in Geita as a result of the business combination;
AngloGold Holdings plc, a subsidiary of AngloGold, completed an offering of $1 billion principal amount 2.375 percent convertible bonds, due 2009, and guaranteed by AngloGold Ashanti;
Acquired a 29.8 percent stake in Trans-Siberian Gold plc;
Sold its Union Reefs assets to the Burnside joint venture, comprising subsidiaries of Northern Gold NL (50 percent) and Harmony (50 percent);
Sold its entire interest in Ashanti Goldfields Zimbabwe Limited to Mwana Africa Holdings (Proprietary) Limited;
Sold its 40 percent equity interest in Tameng Mining and Exploration (Pty) Limited of South Africa (Tameng) to Mahube Mining (Pty) Limited; and
Subscribed for a 12.3 percent stake in the expanded issued capital of Philippines explorer Red 5 Limited.
2005
Substantially restructured its hedge book in January 2005;
Signed a three-year $700 million revolving credit facility;
Disposed of exploration assets in the Laverton area in Australia;
Disposed of its La Rescatada project to ARUNANI SAC, a local Peruvian corporation;
Acquired an effective 8.7 percent stake in China explorer, Dynasty Gold Corporation; and
The Director-General of Minerals and Energy notified AngloGold Ashanti in August 2005 that its application for the new order mining rights in terms of the South African Mineral and Petroleum Resources Development Act had been granted.
2006
Raised $500 million through an equity offering;
Acquired two exploration companies, Amikan and AS APK, from TSG as part of the company’s initial contribution towards its strategic alliance with Polymetal;
Formed a new company with B2Gold (formerly Bema Gold) to jointly explore a select group of mineral opportunities located in northern Colombia, South America;
AngloGold Ashanti (USA) Exploration Inc, International Tower Hill Mines Ltd (ITH) and Talon Gold Alaska, Inc. (Talon), a wholly owned subsidiary of ITH, entered into an Asset Purchase and Sale and Indemnity Agreement whereby AngloGold Ashanti sold to Talon a 100 percent interest in six Alaskan mineral exploration properties and associated databases in return for an approximate 20 percent interest in ITH. AngloGold Ashanti has the option to increase or dilute its stake in these projects, subject to certain conditions;
Disposed of its entire business undertaking related to the Bibiani mine and Bibiani North prospecting permit to Central African Gold plc;
Entered into a 50:50 strategic alliance with Russian gold and silver producer, OAO Inter-Regional Research and Production Association Polymetal (Polymetal), in terms of which Polymetal and AngloGold Ashanti would co-operate in exploration and the acquisition and development of gold mining opportunities within the Russian Federation; and

33The company acquired 100 percent of First Uranium (Proprietary) Limited for $335 million.


Implemented an empowerment transaction with two components: the development of an employee share ownership plan (ESOP) and the acquisition by Izingwe Holdings (Proprietary) Limited (an empowerment company) of an equity interest in AngloGold Ashanti.
2007
4B.Acquired the non-controlling interests, previously held by the Government of Ghana (5 percent) and the International Finance Corporation (10 percent), in the Iduapriem and Teberebie mines;
Anglo American plc sold 69,100,000 ordinary shares of AngloGold Ashanti, thereby reducing Anglo American’s shareholding in AngloGold Ashanti from 41.7 percent to 16.6 percent; and
Announced the successful closing of a $1.15 billion syndicated revolving credit facility.

BUSINESS OVERVIEW

2008
Issued 69,470,442 ordinary shares in a fully subscribed rights offer;
Announced significant exploration results at the 100 percent owned La Colosa;
Acquired Golden Cycle Gold Corporation through the issue of 3,181,198 ordinary shares, resulting in Cripple Creek & Victor becoming a wholly-owned subsidiary;
Sold entire holding in Nufcor International Limited and cancelled 1 million pounds of outstanding uranium contracts;
Acquired São Bento Gold Company Limited through the issue of 2,701,660 ordinary shares with the ultimate result of doubling production from the Córrego do Sítio project;
Entered into a $1 billion term facility agreement to be used to redeem the $1 billion convertible bonds due February 2009; and
AngloGold Ashanti implemented a hedge restructure program.
2009
Sold its 33.33 percent joint venture interest in the Boddington Gold Mine to Newmont Mining Corporation;
Entered into an agreement with Simmer & Jack Mines Limited to sell the Tau Lekoa Mine and adjacent project areas;
AngloGold Ashanti repaid its $1 billion convertible bonds issued in 2004;
Anglo American plc sold its remaining shareholding to Paulson & Co. Inc.;
Entered into a strategic alliance with Thani Dubai Mining Limited to explore, develop and operate mines across the Middle East and parts of North Africa;
AngloGold Ashanti issues $732.5 million, 3.5 percent convertible bonds, due 2014;
Issued 7,624,162 ordinary shares and raised a total of $284 million through an equity offering;
Acquired an effective 45 percent interest in the Kibali gold project in the Democratic Republic of the Congo;
Entered into a joint venture with the De Beers Group of Companies to explore for, and ultimately mine gold and other minerals and metals, excluding diamonds, on marine deposits;
Increased the holding in the Sadiola Gold Mine from 38 percent to 41 percent; and
AngloGold Ashanti continued to manage its hedge book in accordance with its hedge reduction program.
2010
Issued $700 million 5.375 percent bonds due 2020 and $300 million 6.5 percent bonds due 2040;
Finalized the sale of 100 percent interest in the Tau Lekoa mine and adjacent properties in South Africa to Simmer & Jack Mines Limited for R600 million;
Issued 18,140,000 ordinary shares and raised a total of $789 million through an equity offering;
Issued $789 million 6 percent mandatory convertible bond, due 2013;
Obtained a four-year syndicated revolving credit facility for $1 billion due 2014;
AngloGold Ashanti eliminated its hedge book, thereby gaining full exposure to spot gold price;
Sold entire shareholding in B2Gold and realized net proceeds of $68 million; and
Obtained a short-term facility with FirstRand Bank Limited of R1.5 billion.
The following announcements regarding significant developments were made by

AngloGold Ashanti, during 2010 and subsequent to year-end:

Appointment of chairman: Mr Tito Mboweni, the former Governorone of the South African Reserve Bank was appointed to the boardworld’s major gold exploration, mining and as chairman of the company with effect from June 1, 2010. He succeeded Mr Russell Edey, who retired as chairman and from the board on May 7, 2010.

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Joint venture in the Democratic Republic of the Congo: On March 26, 2010, AngloGold Ashanti announced that it had entered intomarketing companies, holds a definitive joint venture agreement (JVA) with Société Miniére de Kilo-Moto (SOKIMO) relating to the development of the Ashanti Goldfields Kilo (AGK) project in the Democratic Republic of the Congo (DRC) and the transfer of the exploitation permits to AGK. Under the JVA, AngloGold Ashanti and SOKIMO agree to jointly develop the AGK project through the joint company AGK, in which AGA holds an 86.22 percent interest and SOKIMO holds the remaining 13.78 percent. The JVA provides for the exploitation permits to be transferred from SOKIMO to AGK covering an area of approximately 6,000km2 in the Ituri district in the northeastern DRC. This includes the Mongbwalu project where a Mineral Resource of approximately 3 million ounces has been identified by previous exploration work and where further exploration and feasibility studies are currently taking place.
Temporary suspensionportfolio of operations atand projects on four continents, and has a worldwide exploration program. The company works across the Iduapriem and Obuasi mine: Following a temporary suspension of operations at the Iduapriem mine, AngloGold Ashanti with the approval of the Ghana EPA, constructed an interim tailings storage facility (TSF) for tailings deposition for a year while the greenfields tailings storage facility is being constructed. In addition, the water treatment plant on site was upgraded. The interim TSF was commissioned in April 2010 and water treatment plant in November 2010.
AngloGold Ashanti’s Obuasi mine in Ghana suspended operation of gold processing for five days to implement a revised water management strategy aimed at reducing contaminants contained in its discharge.
$1 billion revolving credit facility: On April 21, 2010, AngloGold Ashanti secured a $1 billion, four-year unsecured revolving credit facility, due 2014.
Issue of $1 billion unsecured bonds: On April 22, 2010, AngloGold Ashanti announced the pricing of an aggregate offering of US$1 billion of 10-year and 30-year unsecured bonds. The issue was significantly oversubscribed and the offering closed on April 28, 2010.
Cessation of services to mines in Orkney: On June 1, 2010, AngloGold Ashanti announced that it was halting the supply of services, including water, compressed air, electricity and sewerage, to the mines in Orkney following the failure by the liquidators of Pamodzi Gold Orkney, to settle debts owed for services supplied to the operations over the prior ten months. AngloGold Ashanti however would continue to supply potable water and electrical power to Pamodzi’s mine residences for as long as these were occupied.
Sale of Tau Lekoa Mine: The terms of the sale of the Tau Lekoa Mine to Simmer & Jack Mines Limited (Simmers) were announced on February 17, 2009. This sale was concluded effective August 1, 2010, following the transferfull spectrum of the mining rights of the Tau Lekoa Mine and the adjacent properties of Weltevreden, Jonkerskraal and Goedgenoeg to Buffelsfontein Gold Mines Limited, a wholly owned subsidiary of Simmers on July 20, 2010.
Amendment to the joint venture agreement with B2Gold Corp: On July 1, 2010, AngloGold Ashanti increased its holding in the Gramalote project from 49 percent to 51 percent. On August 12, 2010, AngloGold Ashanti announced that it had entered into an agreement with B2Gold Corp. to amend the Gramalote Joint Venture Agreement. Under the amended terms, AngloGold retains its 51 percent interest in the Gramalote Joint Venture and will become manager of the Gramalote Project in Colombia. The Gramalote Project to date was managed by B2Gold, which will retain its 49 percent interest in the Gramalote Joint Venture.
Concurrent equity and mandatory convertible bond issue: On September 15, 2010, AngloGold Ashanti announced the launch and pricing of a concurrent equity and mandatory convertible offering which was followed by an announcement on September 16, 2010 advising of the exercise of an over-allotment option. The concurrent offering resulted in the issue of 18,140,000 ordinary shares or 5 percent of the ordinary issued share capital of the company at an issue price of R308.37 per share and an issue of $789,086,750 Mandatory Convertible Subordinated Bonds due September 15, 2013. On October 26, 2010, shareholders, by the requisite majority, approved a special resolution placing up to a maximum of 18,140,000 ordinary shares under the control of the directors, deliverable upon the conversion of the Mandatory Convertible Subordinated Bonds.
Elimination of hedge book: On October 7, 2010, AngloGold Ashanti completed the elimination of its gold hedge book, providing the company and its shareholders with full exposure to the prevailing gold price.
Sale of B2Gold Corp shares: AngloGold Ashanti realized net proceeds of $68 million from the sale of its entire holding of shares in Vancouver-based gold producer B2Gold Corp.

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value chain.


PRODUCTS

Development of the Tropicana Gold Project in Western Australia: On November 11, 2010, AngloGold Ashanti announced that the development of the Tropicana Gold Project in Western Australia had been approved by the boards of AngloGold Ashanti (70 percent interest) and Independence Group NL (30 percent interest).
Retirement of Deputy Chairman: Dr TJ Motlatsi retired from the board of AngloGold Ashanti, effective from February 17, 2011.
Mankayi case — Constitutional Court ruling: On March 3, 2011, AngloGold Ashanti noted the decision of the Constitutional Court to grant Mr Mankayi leave to appeal against the decision of the Supreme Court of Appeal, which itself upheld the June 2008 Johannesburg High Court decision that employees who qualify for benefits in respect of the Occupational Diseases in Mines and Works Act (ODMWA) may not, in addition, lodge civil claims against their employers in respect of their relevant conditions. See “Item 3D.: Risk Factors”.
Sunrise Dam, Australia: On March 15, 2011, AngloGold Ashanti announced that its Sunrise Dam Gold Mine, situated 56 kilometers south of Laverton in Western Australia, had been impacted by unprecedented heavy rains over the prior month.
Restructuring of the Black Economic Empowerment share ownership transaction: On April 14, 2011, AngloGold Ashanti announced that it was proposing to restructure its Black Economic Empowerment (BEE) share ownership transaction first announced in 2006, to ensure the intended benefits will accrue to its recipients, namely South African employees, through the Bokamoso ESOP trust and BEE Partner, Izingwe Holdings (Proprietary) Limited (Izingwe) (an investment company controlled by black investors). The total incremental accounting cost to AngloGold Ashanti of the proposed restructuring which was subject to shareholders’ approval, is estimated at around R120.5 million (approximately $18 million). Shareholders in general meeting held on May 11, 2011 approved the restructuring.
4B. BUSINESS OVERVIEW
VISION, MISSION AND VALUES
AngloGold Ashanti’s:
Visionis to be the leading mining company.
Missionis to create value for our shareholders, our employees and our business and social partners through safely and responsibly exploring, mining and marketing its products. Our primary focus is gold and we will pursue value creating opportunities in other minerals where we can leverage our existing assets, skills and experience to enhance the delivery of value.
Our values
Safety is our first value.
We place people first and correspondingly put the highest priority on safe and healthy practices and systems of work. We are responsible for seeking out new and innovative ways to ensure that our workplaces are free of occupational injury and illness. We live each day for each other and use our collective commitment, talents, resources and systems to deliver on our most important commitment ...to care.
We treat each other with dignity and respect.
We believe that individuals who are treated with respect and who are entrusted to take responsibility respond by giving their best. We seek to preserve people’s dignity, their sense of self-worth in all our interactions, respecting them for who they are and valuing the unique contribution that they can make to our business success. We are honest with ourselves and others, and we deal ethically with all of our business and social partners.
We value diversity.
We aim to be a global leader with the right people for the right jobs. We promote inclusion and team work, deriving benefit from the rich diversity of the cultures, ideas, experiences and skills that each employee brings to the business.

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We are accountable for our actions and undertake to deliver on our commitments.
We are focused on delivering results and we do what we say we will do. We accept responsibility and hold ourselves accountable for our work, our behavior, our ethics and our actions. We aim to deliver high performance outcomes and undertake to deliver on our commitments to our colleagues, business and social partners, and our investors.
The communities and societies in which we operate will be better off for AngloGold Ashanti having been there.
We uphold and promote fundamental human rights where we do business. We contribute to building productive, respectful and mutually beneficial partnerships in the communities in which we operate. We aim to leave host communities with a sustainable future.
We respect the environment.
We are committed to continually improving our processes in order to prevent pollution, minimize waste, increase our carbon efficiency and make efficient use of natural resources. We will develop innovative solutions to mitigate environmental and climate risks.
ANGLOGOLD ASHANTI’S BUSINESS
Products
AngloGold Ashanti’s main product is gold. A portionIn the course of its revenue is also derived from sales ofprocessing the ore mined, by-products such as silver, uranium oxide and sulfuric acid.
Focused on returns
AngloGold Ashanti endeavors to maximizeacid are produced at the returns delivered to shareholders throughout the economic cycle, by producing gold safely, responsiblyArgentinian, South African and efficiently.
Exploration
The group’s exploration program, which covers greenfield, brownfield, and more recently, marine exploration, is conducted either directly or in collaboration with partners. The group’s foremost recent greenfield discovery is the La Colosa deposit in Colombia (see map for regions of active greenfield exploration). Brownfield exploration is conducted around existingBrazilian operations. In October 2009, the group established a joint venture to explore for marine mineral deposits on the continental shelf. This complements

OPERATIONS

AngloGold Ashanti’s existing terrestrial exploration21 operations are located in 10 countries (Argentina, Australia, Brazil, Ghana, Guinea, Mali, Namibia, South Africa, Tanzania and mining activities.

Operations
In addition to the United States). These include six deep-level mines and one surface operationoperations in South Africa AngloGold Ashanti hasas well as a combination of surface and underground mining operations in the Americas, Australia and elsewhere on the African continent.

EXPLORATION

The Tau Lekoa minegroup’s exploration program, covers greenfield, brownfield, and, more recently, marine exploration. Major development projects are Tropicana in South Africa was sold during 2010. In addition to gold, valuable by-products — silver, sulfuric acid and uranium — are producedAustralia, Kibali in the processDemocratic Republic of recovering the Congo (DRC) and La Colosa in Colombia. Our extensive brownfield, greenfield and marine exploration programs extend to 14 countries, in both established and new gold-producing regions through managed and non-managed joint ventures, strategic alliances and wholly owned ground holdings.

DEVELOPMENT

AngloGold Ashanti utilizes its exploration team to build on its record of new gold mined at certain operations.

Marketing
discoveries and to grow its gold endowment. The company has increased its capacity to fund a significant project pipeline by incurring longer-term debt, while maintaining capital discipline and improving returns.

MARKETING

Once processed to the doré (unrefined gold bar) stage at AngloGold Ashanti’s operations, this product is dispatched to various precious metal refineries where the gold is refined to a purity of at least 99.5 percent, in accordance with the standards of ‘good delivery’“good delivery” as determined by the London Bullion Market Association. It is then sold to bullion banks or refiners. Gold has been a much sought after source of wealth over the centuries, be it as an investment, a store of value or as jewellery. AngloGold Ashanti campaigns actively to promote the demand for gold.

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GOLD MARKET

Built for purpose
Since launching its new business strategy at the end of March 2008, AngloGold Ashanti has significantly restructured its portfolio and rebuilt its balance sheet to create the operating and financial foundation to achieve its production growth target of 5.4 million ounces to 5.6 million ounces by 2015. Operating cash flow has increased markedly following the elimination of the hedge book, as well as the implementation of Project ONE, the business improvement intervention, and the higher gold price.
AngloGold Ashanti has also continued to invest in its industry leading exploration team to build on its record of new gold discoveries and to grow its world-class gold endowment. Longer-term debt has also been introduced into the balance sheet, thereby greatly enhancing the capacity to fund a significant project pipeline, while maintaining strict capital discipline and driving shareholder returns.
STRATEGY
Striving to be the leading mining company
AngloGold Ashanti’s business strategygold is reviewed regularly to determine progress in its implementation against the backdrop of a dynamic operating and regulatory environment. These evaluations allow for tactical adjustments necessary to achieve the ultimate goal of becoming “the leading mining company”.
AngloGold Ashanti has defined its strategic focus in five parts:
Recognize that “People are the business” — organizational development is a strategic value driver for the group;
Maximize margins— manage both revenue and costs to ensure delivery and protection of returns throughout the economic cycle;
Manage the business as an asset portfolio— use capital deployment optimization approaches to support delivery of return targets;
Grow the business— have a definite strategy for both organic growth and growth by acquisition and be opportunistic in seeking value accretive targets; and
Embrace sustainability principles— understand and focus on creating value for both business and social partners to manage risk and opportunity.
The key components of each of the strategy points are as follows:
People are the business
AngloGold Ashanti recognizes that “People are the business” and through its:
Mission, defines a clear view of the organization;
Vision, reflects a clear and consistent view of the organization’s future;
Values, recognizes that the process used to achieve results is as important as the results themselves;
Business Process Framework, defines the policy, standards and operating framework necessary to establish a flexible and responsive work model within which people have the opportunity to be creative and realize their potential; and
Organizational model, ensures that the right person, does the right work, in the right way and at the right time.
Maximize margins
AngloGold Ashanti seeks to ensure sustainable value and maximize returns by:
Managing revenuesto ensure that full value is realized from its products by:
managing product sales to realize premiums for the delivery of a superior quality product and by exploring other value adding initiatives;
delivering products of a consistent quality, on time; and
offering exposure to spot prices.

38


Managing coststo protect margins and returns on capital employed by:
applying resource development strategies to maintain operating margins over the life cycle of the assets;
protecting critical margins where appropriate;
maintaining costs below the industry’s mean in order to minimize risks to cash flow and returns in a volatile price environment; and
optimizing capital deployment by investing only in assets and growth opportunities which offer superior returns.
Manage the business
Meeting commitments is a critical objective and includes:
ensuring safe work practices and a healthy workforce;
generating returns on capital of more than 15 percent through the cycle;
meeting production and cost targets;
managing costs to maximize margins and return on capital employed over the life cycle of all operations and projects;
maximizing revenues; and
implementing Project ONE to standardize all operating procedures and achieve key five-year goals. The five-year goals agreed in 2008 were:
a 70 percent reduction in accident rates;
a 30 percent improvement in overall productivity (in terms of ounces of gold produced per employee);
a 60 percent reduction in reportable environmental incidents;
a 20 percent increase in gold production;
a 25 percent reduction in total cash costs per ounce (as calculated under IFRS); and
to deliver an average return on capital of above 15 percent.
Given the progress achieved to date, the board reviewed and amended the following key five-year goals in late 2010 for the period 2011-2015 as follows:
Safety — an all injury frequency rate of less than 9 per million hours worked by 2015;
Productivity — 20 percent improvement in ounce/TEC by 2015;
Environment — 30 percent reduction in reportable incidents by 2015;
Production (attributable ounces produced) — between 5.4 million ounces and 5.6 million ounces, an improvement of 20 percent on base;
Total cash cost per ounce — a 20 percent improvement in real unit costs by 2015 (adjusted for mining inflation); and
Return on shareholders’ equity — 15 percent through the cycle to 2015.
Manage the business as an asset portfolio
AngloGold Ashanti regularly reviews and ranks each asset and project as part of its annual business planning process. This ranking is both absolute and relative to its peer group, with the aim of:
ensuring that individual assets and projects meet or exceed specified risk-adjusted rates of return;
identifying the strengths and weaknesses of the portfolio, with particular focus on portfolio risk;
implementing strategies to identify optimal orebody capability;
applying methods and design to ensure optimal operating performance;
ensuring the application of detailed planning and scheduling, together with the use of best-practice operating methods associated with each asset;
optimizing returns from existing assets and growth opportunities; and
selling those assets that no longer meet the company’s criteria at attractive valuations.
Achieving these performance objectives will be impacted by any portfolio changes and is subject to a number of potentially offsetting factors and risks, uncertainties and other factors, some of which are beyond the company’s control, any of which may prevent or delay AngloGold Ashanti from achieving its stated goals. Certain of such risks, uncertainties and other factors are described in “Item 3D.: Risk Factors”. See also “Note Regarding Forward-Looking Statements”.

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Grow the business
AngloGold Ashanti seeks to further enhance shareholder value through:
Exploration— leveraging its asset portfolio and landholdings through greenfield and brownfield exploration and development while targeting new opportunities;
Brownfield development— the development portfolio comprises board approved projects including: the Tropicana gold project in Australia; the Córrego do Sítio and Lamego projects in Brazil; the Mine Life Extension project at Cripple Creek & Victor in the United States; the Ventersdorp Contact Reef project at the Mponeng mine in South Africa; and others undergoing feasibility studies in Argentina, Brazil, Colombia, the Democratic Republic of the Congo, Mali, Namibia, South Africa and the United States;
New projects— by promoting organic growth and leveraging current positions;
Mergers and acquisitions— by selectively pursuing value accretive merger and acquisition opportunities; and
Logical incrementalism— by maximizing the value of other commodities within an existing and developing asset portfolio.
Embrace sustainability principles
AngloGold Ashanti seeks to embrace sustainability principles to create business and social partnerships based on mutual value creation. This approach includes:
Safety and health— ensuring that commitment to the welfare of people remains the company’s most important value;
Environment— by managing the impact on the environment, meeting commitments made to host communities and ensuring AngloGold Ashanti is the preferred development partner for mining projects;
Community relations— establishing relationships and developing strategies that support the creation of unique value for various community partners;
Institutional relations— working through the respective government and other local institutions, while respecting the values and traditions of each jurisdiction; and
Political relationships— managing relationships in a manner consistent with the company’s values.
GOLD, URANIUM AND SILVER MARKET IN 2010
Gold market in 2010
Product and marketing channels
Gold accounts for 98 percent of AngloGold Ashanti’s revenue, with the balance derived from sales of silver, uranium oxide and sulfuric acid. These products are sold on international markets.
Gold produced by AngloGold Ashanti’s mining operations is processed to a saleable formrefined at various precious metalsmetal refineries. Once gold isIn refined to thisand marketable form, (normally largegold normally takes the shape of bars, varying in size from 12.5 kilogram to smaller bars weighing about 12.5 kilograms and containing 99.5 percent gold, or smaller bars of equal or greater purity weighingsome 1 kilogram or less)less, all of which contain 99.5 percent gold. Through the metalrefineries the gold is sold through refineries or directly to bullion banks.
Bullion banks are registered commercial banks thatwhich deal in gold, distributing bullion bought from mining companies and refineries to markets worldwide. These banks hold consignment stocks in all major physical markets and finance these inventories from the margins they charge physical buyers.
Gold market characteristics
Gold price movements are largely driven by macroeconomic factors such as inflation expectations, currency and interest rate fluctuations or global and regional political events that are judged to affect the world economy. For millennia, gold has been a store of value in times of price inflation and economic uncertainty. This attribute, together with the presence of significant gold stocks held above ground, has at times dampened the impact of supply and demand fundamentals on the market. Trade in physical gold, however, remains an important factor in determining a price floor. Gold bars and high-caratage jewellery remain a major investment vehicle in the emerging markets of India, China and the Middle East.
The gold market is relatively liquid compared to those for many other commodities, with deep and established markets for gold futures and forward sales on the various exchanges, as well as in over-the-counter markets.

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Physical gold demand
The physical gold market is dominated by the jewellery and investment sectors, which together account for some 9078 percent of total demand. The balance of gold supplydemand is used infrom the electronics and dentistry and electronics.
industry, as well as the uptake from central banks. While the quantity of gold used in jewellery consumption has decreased over the last decade with the steadily rising gold price, the investment market has largely absorbed available supply. Investment in physical gold includesinvolves bar and coin hoarding, coins, medals and other retail investment instruments, as well as a burgeoningthe now significant market for exchange traded funds (ETFs).

The latter have, since their inceptiongold price averaged $1,668 per ounce for 2012, marking the eleventh consecutive year of average annual price increases. After reaching a record of $1,921 per ounce in 2002, entrenched their position as a vehicle for retail and institutional investors. ETF investment activitySeptember 2011, the gold price failed to reach the same level during 2012.

Although gold has traditional “safe haven” status among financial assets, it did not benefit significantly in 2012. This was once again strong during 2010, with overall holdings continuing to grow, albeit at a slower rate than in 2009.

Newly mined gold accounts for just over 60 percent of total supply. Due to its high value, gold is rarely destroyed and some 161,000 tonneslargely on account of the metal,continued negative correlation between the equivalent of about 65 years of newly mined supply at current levels, is estimateddollar gold price and the dollar, in which a stronger dollar tended to existcap appreciation in the formgold price. This pattern was exacerbated by the fact that investors often sold profitable gold positions.

The announcement by the US Federal Reserve of jewellery, central bank gold reserves and private investment.

Gold demand by sector
Jewellery demand
The jewellery market improveda further round of quantitative easing in 2010 from the previous year,mid-September correlated with a welcome returnboost in the gold price, however, having averaged $1,651 per ounce over the first three quarters of 2012, the announcement of the third round of quantitative easing (QE3) corresponding with an increase in the gold price average to form$1,717 per ounce for the vital Indian jewellery market. China,final quarter. As of April 19, 2013, the only major gold jewelleryprice was $1,404 per ounce.

Investment market to grow

Holdings within the ETF universe showed reasonable growth. Although growth in total gold holdings was lower than that experienced in 2009 showed furtherand 2010, it was an improvement over 2011. ETF holdings grew by 6.4 million ounces in 2011 which represents growth of 9 percent over the year. In 2012, ETF holdings grew by almost 9.4 million ounces or 12 percent.

Among ETFs, which now include some 32 different funds, the NYSE-listed SPDR Gold Shares (GLD) remained the largest at 43.4 million ounces, or almost half of combined holdings of 88.8 million ounces (as at end 2012). This fund grew by 3.1 million ounces in 2012 and alone accounted for over a third of overall growth in 2010. These twoholdings during 2012.

The official sector continued to be a significant source of demand through 2012 with estimates of around 17.2 million ounces (net) bought by various central banks across the globe. The most dominant sources of demand from this sector remain those countries which are not members of the world’s largestOrganization for Economic Co-operation and Development (OECD), such as Brazil, Mexico and South Korea, which added to their gold consumers with high-caratage jewellery (22 caratreserves. In contrast, the third year of the Central Bank Gold Agreement ended at the end of September and total sales of 5 tonnes by its signatories were recorded. This represents the lowest annual sales in Indiaany of the agreements.

Bar and 24 caratcoin demand for 2012 failed to match the levels of 2011, declining by 260 tonnes year-on-year. Demand experienced from Europe in China) serving an important investment purpose. In fact, jewellery demand significantly exceeds investment demand in the form of ETFs, coins and bar hoarding in both nations.

In India, over 750 tonnes of gold were imported in 2010, a new record, and up from 557 tonnes the previous year. Indian consumers view gold jewellery as a form of savings and so do not readily sell their jewellery. Gold reached record prices in rupee terms and still consumers2011 did not cash-out en masse, with so-called `recycling’ of jewellery remaining around the longer-term average levels of 25 percent. Unlike 2009, the record gold price has been accepted by Indian consumers who continuedmaterialize again in 2012. However, after a long tradition of buying the precious metal as insurance against inflation and economic shock.
Chinese jewellery demand in 2010 rose some 10 percent over 2009. Most of this increase took the form of pure gold jewellery, which holds superior investment appealslow start to the 18 carat variety known in China as K Gold. Nevertheless, the K Gold market also showed a gain of 5 percent, following a 10 percent decline in 2009. Consumer psychology in 2010 was marked by the growing perception that gold is an important component of any asset portfolio. This view was previously the domain of wealthy Chinese, but the middle class began to exhibit a similar tendency. Chinese consumers showed little aversion to the higher price of gold, given the investment appeal of pure gold jewellery and a bullish outlook on the gold price.
The Middle Eastern market improved from 2009 levels, but the recovery was mixed and less substantial than the Indian resurgence. In the United Arab Emirates, the jewellery sector experienced a strong rebound in the secondfirst half of the year, as consumer confidence returnedIndian demand for bars and coins began to emerge and amounted some 25 percent of total demand for 2012. Demand from China, another important source of demand, was flat at 265 tonnes, primarily due to the local economy. The 22 carat segment remained the category leader thanks to heavy buying from expatriates from the Asian subcontinent. Turkey experienced a moderate increase in jewellery sales and exhibited a promising trend for mostslowing of the year. In dollar terms, gold jewellery exports from the region increased by 22 percent. In the KingdomChinese economy.

Jewellery markets

A jewellers’ strike and doubling of Saudi Arabia, each quarter saw a year-on-year increase in gold demand but consumers remained cautious given the rising price. Elevated prices, however, kept recycling at customary levels.

Investment demand
ETF holdings experienced mixed fortunes in 2010, after registering net disinvestment inimport duties meant that the first quarter. This trend reversed in the second and third quarters before stagnating in the final three monthshalf of the year at approximately 2,100 tonnes, or around 68 million ounces.
The cumulative growth in ETFs for 2010 was around 330 tonnes, in line with annual average growth rates since 2003. In 2009, however, ETF holdings grewwitnessed very poor demand out of India relative to 2011, down by 617 tonnes in a year that saw a 24 percent risepercent. Sentiment improved in the latter half of the year and India remained the strongest performing market for gold price. In 2010, ETF growthjewellery and, in 2012, accounted for 29 percent of global jewellery fabrication.

Slowing fortunes of the Chinese economy had an impact on jewellery demand from this region, down 4.5 tonnes year-on-year, as consumers cut back on their discretionary spending. Hong Kong maintained its levels of jewellery demand year-on-year at 27 tonnes.

European jewellery demand was significantly slower despite a 30 percent risesimilarly affected by economic woes and austerity measures.

The outlook for the gold price remains broadly supportive given the continuation of loose monetary policies in both the United States and Europe. However, there is growing confidence that monetary authorities may have managed the worst of these crises. Austerity measures may continue across Europe and this may weigh on European jewellery demand while further measures by the Indian authorities to curb gold imports mean that jewellery demand from this region will also likely decrease in the priceshort term.

RAW MATERIALS

AngloGold Ashanti uses chemicals including cyanide and lime in the production of gold. These chemicals are available from a large number of suppliers.

COMPETITION

As gold mining is a mature and regulated industry, and very significant volumes of gold and gold derivatives trade in the metal.world markets independent of gold mine supply, AngloGold Ashanti does not consider that competition for sales plays any role in its operations as a gold producer. However, gold producers do compete against each other for acquisition of mining assets, exploration opportunities and human resources.

INTELLECTUAL PROPERTY

AngloGold Ashanti, as a group, is not dependent on intellectual property for the conduct of its business as a whole.

SEASONALITY

AngloGold Ashanti’s business is not generally seasonal.

STRATEGY

To achieve its vision to be the leading mining company, AngloGold Ashanti must fulfill its mission to create value for shareholders, employees and business and social partners by safely and responsibly exploring for, mining and marketing its products. Although the primary focus is gold, AngloGold Ashanti will pursue value-creating opportunities in other minerals where it can leverage existing assets, skills and experience to enhance the delivery of value.

Strategic focus areas

AngloGold Ashanti’s five strategic focus areas are set out below:

People are the business, providing the leadership and the supporting management processes to ensure that the right people are in the right roles, doing the right work to deliver against the goals.

Maximize margins, managing revenues to ensure that full value is realized from its products by delivering a quality product and managing costs to protect margins and returns on capital employed.

Manage the business as an asset portfolio, optimizing asset and project portfolios to meet or exceed specified rates of returns. To achieve this, each asset is regularly reviewed and ranked in both absolute terms and relative to its peer group.

Grow the business, developing a range of options for growth, including greenfield and brownfield exploration, new opportunities for promoting organic growth, value-accretive merger and acquisition opportunities, and maximizing the value of commodities other than gold within its portfolio.

Embrace sustainability principles, developing business and social partnerships based on mutual value creation while maintaining a focus on ensuring the gold ETF market grew by 55 percentsafety and well-being of employees, and managing environmental and other impacts.

Management framework

AngloGold Ashanti’s internally developed Project ONE management framework is being implemented throughout the business to $34 billion.

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support the achievement of its broader strategic objectives. The universe of gold ETFs has grown steadily since inception, with 16 products now spanning global financial exchangesframework is designed to reduce variability in performance and support a seamless flow from New Yorkstrategy to Johannesburg and Istanbul to Dubai, among others. In the second half of 2010, China permitted domestic institutional investors to invest in international ETFs, broadening global investment channels for gold and — given the Chinese appetite for gold — generating significant potential for a fresh, largely untapped demand source. In India, the ETF market doubled in volume to around 16 tonnes.
Coin and bar markets in most major markets saw continued firm demand in 2010. In China, investment demand grew to 35 percent of total demand. China Gold Corporation reported remarkable sales of 45 tonnes, while ICBC bank sold 27 tonnes of the yellow metal. In the US, several reports chronicled the US Mint’s inability to keep pace with gold coin demand. The Middle Eastern market saw sustained interest in large denomination bullion bars from high-net-worth individuals.
Central bank holdings, sales and purchases
Central banks periodically sell or add to their gold reserves. Most central bank sales take place under so-called Central Bank Gold Agreements (CBGA), which compel signatories to sell in a stable and responsible fashion to minimize the impact on the global market. A third of these agreements, in effect since September 27, 2009, limits signatories to annual sales of 20 percent less than the previous agreement.
Given the turmoil in global financial markets and thedelivery. This framework prescribes strong performance of gold, it is unsurprising that there was little central bank selling in 2010. In the first full year of the third CBGA, just 6 tonnes of sales were reported against the annual quota of 400 tonnes excluding sales by the International Monetary Fund (IMF).
Official sector activity in 2010 was dominated by sales of a portion of the IMF inventory announced in late 2009. In additionleadership, considered role description, appropriate resourcing to the purchase by the Reserve Banktask at hand, well-defined and documented business processes in all areas, clear accountability and consistent analysis of India in 2009improvement of roughly half the 403 tonnes offered, Mauritius, Sri Lanka and Bangladesh made their own acquisitions from the IMF. These four countries account for roughly 55 percent of the gold the IMF had to sell, with the balance sold on the open market.
work undertaken.

AngloGold Ashanti’s marketing spendManaging performance

AngloGold Ashanti has remained committed to growing the gold market.

The company is an active member of the World Gold Council, and subscriptions to this industry body account for the bulk of marketing expenditure. AngloGold Ashanti also remains involved in independent projects to grow jewellery demand in partnership with companies including Tanishq, a subsidiary of the TATA Group. AuDITIONS, the company’s own global gold jewellery design competition, promotes improved gold jewellery design and has become a well-recognized corporate marketing tool. See the competition website at www.goldauditions.com.

Uranium market in 2010
AngloGold Ashanti’s uranium production is sold via a combination of spot sales and residual legacy agreements expiring in 2013.
After languishing between $40 per pound to $50 per pound for more than a year, the spot price of uranium began to rise sharply toward the end of October and ended 2010 at $61.50 per pound, the highest price since the onset of the global financial crisis in September 2008. The move appears to have been caused by a combination of a production shortfall, restocking by utilities and the launch of a physically backed ETF for uranium.
Demand is likely to remain robust as the number of nuclear reactors increases globally — therefive strategic focus areas are currently 441 reactors in operation and a further 58 under construction. This number is likely to increase as global emphasis shifts towards greener, more environmentally friendly energy sources, although this sentiment has been adversely impacted following the events surrounding the earthquake and tsunami in Japan.
Silver market in 2010
AngloGold Ashanti produces silver as a by-product of gold at a number of its global operations and principally at its Cerro Vanguardia mine in Argentina.

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The silver price rallied more than 80 percent over the course of the year, ending at almost $31 per ounce from the year’s opening levels of $17 per ounce. The gold/silver ratio, which measures how many ounces of silver can be bought with an ounce of gold, ended the year well below its five-year average at $47 per ounce. In addition to robust investor demand, industrial and retail offtake helped improve fundamentals for the white metal.
Although COMEX investors sold silver rather aggressively during the latter part of the year, global silver ETF holdings continued to climb throughout 2010, exceeding 500 million ounces at year end. This represents an increase of some 100 million ounces. In addition to the significant ETF boost, GFMS estimated that silver coin minting rose 23 percent in 2010 and reports suggest continued robust physical demand for silver bars and coins in North America.
GOLD PRODUCTION
Gold production can be divided into six main activities supported by mine planning, engineering services, ventilation, rock engineering, procurement, finance, social and environmental services and human resources, among others. The six core production processes are:
1.Exploration — Finding the orebody
AngloGold Ashanti’s exploration work is split into two functions. The company’s greenfield exploration team identifies and evaluates targets on its own or in conjunction with joint venture partners. The brownfield exploration team is responsible for identifying the limits of known deposits or finding additional deposits close to existing operations to facilitate organic growth. All discoveries undergo a well structured and intensive evaluation process aimed at improving confidence in the Mineral Resource and Ore Reserve estimates before developing or expanding the mine.
2.Development — Creating access to the orebody
Two types of mining are used to access orebodies:
Underground mining: a vertical or decline (inclined) shaft is sunk deep into the ground to transport people and mining materials to underground levels from which the orebody is accessed through horizontal tunnels known as haulages and cross-cuts. Further development is then undertaken to open the orebody so mining can take place; and
Open-pit mining: this method is employed when ore lies close to surface and can be exposed for mining by stripping overlying, barren material.
3.Mining — Removing the ore
In underground mining, holes are first drilled into the orebody, filled with explosives and blasted. The blasted ‘stopes’ or ‘faces’ are then cleaned and the ore released by blasting is then ready to be transported to surface.
In open-pit mining, the material may be ‘free digging,’ although drilling and blasting is usually necessary to break the ore and waste prior to transportation. Excavators then load the material onto haul trucks which transport the material to the plant, ore stockpiles or waste dump facility.
4.Transportation — Moving broken material from mining face to the plant
Underground material is brought to surface by a combination of horizontal and vertical transport systems. Once on surface, ore is transported to the processing facilities by surface rail or overland conveyors and waste material is deposited on low grade dumps.
In open-pit operations, haul trucks deliver ore directly to the processing facilities.
5.Processing — Treating the ore to recover the gold
Liberation is the first step in processing and involves breaking up ore, which is delivered as large rocks, into small particles so contained gold minerals are exposed and available for recovery. This is usually undertaken by a combination of multi- stage crushing and milling circuits with associated screening and classification processes to ensure that material of the correct size is removed promptly from the milling circuit. Coarse, liberated gold particles, which may not dissolve fully during the cyanide leach process, are removed by gravity concentration during milling with the resultant concentrate undergoing separate processing.

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     Recovery of gold can then commence, depending on the nature of the gold containedreflected in the ore.
     There are two basic classesrole descriptions of ore:
Free-milling: where gold is readily available for recovery by the cyanide leaching process; and
Refractory ores: where gold is not readily available for leaching because it is locked within a sulfide mineral matrix (e.g. pyrite), extremely finely dispersed within the host rock (not yet exposed), or alloyed with other elements which retard or prevent leaching (e.g. tellurides).
Free millingeach executive and oxidized refractory ores are processed for gold recovery by leaching ore in agitated tanks in an alkaline cyanide leach solution which dissolves the gold. This is generally followed by adsorption of the dissolved gold cyanide complex onto activated carbon at a significantly higher concentration. In some operations, the gold bearing solution is filtered from the pulp and gold is then precipitated by the addition of zinc dust.
Refractory ores undergo pre-treatment to make them more amenable to cyanide leaching. This commonly takes the form of separating the gold-bearing sulfide materials from the barren gangue material by using flotation to produce a high- grade sulfide concentrate. The sulfide concentrate is then oxidized by either roasting — as at AngloGold Ashanti Córrego Do Sítio Mineração; bacterial oxidation (BIOX®) — as at Obuasi; or in pressure oxidation units. This oxidation destroys the sulfide matrix and exposes the gold particles thereby making them amenable to recovery by the cyanidation process.
An alternative to the milling and leaching process is the heap leach process, generally applicable to high-tonnage, low-grade ore deposits. It can, however, also be successfully applied to medium-grade deposits where smaller ore deposit tonnages cannot economically justify a capital-intensive milling and leaching plant. In this process, ore is simply crushed to a coarse size and heaped on a lined leach pad. Low-strength alkaline cyanide solution is dripped onto the heap for periods of up to three months. The gold dissolves and the gold bearing solution is collected from the base of the heap and transferred to carbon-in-solution (CIS) columns, where the gold cyanide complex is adsorbed onto activated carbon. The barren solution is refreshed and recycled to the top of the heap.
Gold which has loaded (adsorbed) onto activated carbon is recovered by a process of re-dissolving it from the activated carbon (elution), followed by precipitation in electro-winning cells and subsequent smelting of the precipitate into doré bars, which have a gold content of between 85 percent and 95 percent. These bars are shipped to gold refineries for further processing.
Valuable by-products are generated during the gold recovery process at certain AngloGold Ashanti operations. These by products are:
Silver, which is associated with the gold at some of our operations;
Sulfuric acid, which is produced from the gases generated during sulfide roasting; and
Uranium, which is recovered in a process which involves sulfuric acid leaching, followed by recovery of the leached uranium onto resin and subsequent stripping of the resin by sulfuric acid and precipitation of ammonium diurinate (yellow cake) using ammonia. Uranium oxide is then produced by calcination (heating) of the yellow cake.
Residue from processing is pumped to well-designed tailings- storage facilities, where the solids settle to form a beach, while the water is reused.
6.Refining — Preparing the gold for market
The doré bars are transported to a precious metal refinery, where the gold is upgraded to a purity of 99.5 percent or greater, for sale to a range of final users. High-purity gold is referred to as ‘good delivery’, which means it meets the quality standards set by the London Bullion Market Association and gives the buyer assurance of its gold content and purity.

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MINE SITE REHABILITATION AND CLOSURE
All mining operations will eventually cease. For AngloGold Ashanti, an integral aspect of operating its mines is ongoing mine closure planning, together with the associated estimates of liability costs and the assurance of adequate financial provisions to cover these costs.
The company’s Environment and Community Policy commits the company, amongst others, to ensuring that “financial resources are available to meet its closure obligations”. One of the company’s values is that “the communities and societies in which we operate will be better off for AngloGold Ashanti having been there”.
In order to ensure that operating staff and the company’s stakeholders understand clearly what these statements mean in practice and to set a common benchmark across the company, a closure and rehabilitation management standard was finalized during 2009. Operations have been given two years (ie. end 2011) to achieve full compliance with the standard. Guidelines to assist operations to implement the standard were developed during 2009/10. A workshop was held in December 2010 to ensure alignment amongst environmental, social and accounting professionals within the company and to share best practices across the group.
The evaluation of new projects takes into account closure and associated costs in a conceptual closure plan. The AngloGold Ashanti standard requires that an interim closure plan be prepared within three years of commissioning an operation, or earlier if required by legislation. This plan is reviewed and updated every three years (annuallysenior manager in the final three years of a mine’s life) or whenever significant changes are made,group and take into account operational conditions, planningform the basis for evaluating and legislative requirements, international protocols, technological developments and advances in practice. The interim plan becomes a final plan at least three years before closure is anticipated.
For many of the older mines, closure planning and the evaluation of environmental liabilities is a complex process. This is particularly the case in Brazil, Ghana and South Africa, where many of the long-life operations present environmental legacies that may have developed over a century or more. A particular challenge is concurrent rehabilitation, which is carried out while a mine is still operating. This practice serves to decrease the current liability and reduces the final rehabilitation and closure work that must be undertaken, but has the potential to sterilize reserves, which the company might wish to exploit should conditions, such as the gold price, change.
An assessment of closure liabilities is undertaken annually.
rewarding their performance.

THE REGULATORY ENVIRONMENT ENABLING ANGLOGOLD ASHANTI TO MINE

AngloGold Ashanti’s rights to own and exploit Mineral Reservesmineral reserves and deposits are governed by the laws and regulations of the jurisdictions in which these mineral properties lie.

AngloGold Ashanti is subject to a wide range of laws and regulations governing all aspects of its operations, including such areas as environmental protection, reclamation, exploration, development, production, taxes, immigration, labor standards and employment issues, occupational health, mine safety, toxic substances, securities and foreign corrupt practices. AngloGold Ashanti has made, and expects to, among other things, make in the future, significant expenditures to comply with these laws and regulations. Non-compliance can result in violations and legal claims, as well as substantial fines, penalties and delays in day-to-day operations. Pending or proposed changes to existing laws and regulations, as well as any proposed or contemplated new laws or regulations could also have significant impacts on AngloGold Ashanti’s business and results of operations, the extent of which cannot be predicted.

There are in some cases certain restrictions on AngloGold Ashanti’s ability to independently move assets out of certain countries in which it has operations, and/or transfer assets within the group, without the prior consent of the local government or minority shareholders involved.

SOUTH AFRICA
In October 2002, See “Item 10D.: Exchange controls” for details.

For more information on the Presidentrisks and uncertainties associated with AngloGold Ashanti’s mining rights, see “Item 3D.: Risk factors”, in particular the risk factors entitled “AngloGold Ashanti’s mining rights in the countries in which it operates could be altered, suspended or cancelled for a variety of reasons, including breaches in its obligations in respect of its mining rights”, “Failure to comply with laws, regulations, standards, contractual obligations whether following a breach or breaches in governance processes or fraud, bribery and corruption may lead to regulatory penalties, loss of licenses or permits, and loss of reputation”, “Title to AngloGold Ashanti’s properties may be uncertain and subject to challenge”, “AngloGold Ashanti’s Mineral Reserve, deposits and mining operations are located in countries where political, tax and economic laws and policies may change rapidly and unpredictably and such changes and policies may adversely affect both the terms of its mining concessions, as well as its ability to conduct operations in certain countries” and “AngloGold Ashanti’s Mineral Reserve, deposits and mining operations are located in countries that face instability and security risks that may adversely affect both the terms of its mining concessions, as well as its ability to conduct operations in certain countries”.

South Africa assented to

The MPRDA and the Revised Mining Charter

The Mineral and Petroleum Resources Development Act (MPRDA), which had been passed by the Parliament of South Africa in June 2002 and came into effect on May 1, 2004. The objectives of the MPRDA are, among other things, to allow for state sovereignty over all mineral and petroleum resources in the country, to promote economic growth and the development of these resources and to expand opportunities for the historically disadvantaged. Another objective of the MPRDA is to ensure security of tenure for the respective operations concerning prospecting, exploration, mining and production. By virtue of the provisions of the MPRDA, the state ensures that holders of mining and prospecting rights contribute to the socio-economicsocioeconomic development of the areas in which they operate.

The Mineral and Petroleum Resources Development Amendment Act (MPRDAA) was passed by Parliament in 2008 and has been signed by the State President and published, but is not yet in effect. Its purpose is to amend the MPRDA in order to, among other things:

make the Minister of Mineral Resources (Minister) the responsible authority for implementing the requirements of the National Environmental Management Act, 1998 (NEMA) and specific environmental legislation as they relate to prospecting, mining, exploration, production and related activities incidental thereto on the prospecting, mining, exploration or production area;

align the MPRDA with the NEMA in order to provide for one environmental management system;

remove ambiguities in certain definitions;

add functions to the Regional Mining Development and Environmental Committee;

amend transitional arrangements so as to further afford statutory protection to certain existing old order rights; and

provide for matters connected therewith.

45On December 27, 2012, the Minister published the Draft Mineral and Petroleum Resources Development Bill, 2012 (Bill) and invited the mining industry and interested and affected parties to comment on it. The Bill seeks to amend the MPRDAA, which itself has not yet come into effect, as described above. It is unclear when the MPRDAA will come into force or to what extent the Bill will amend the MPRDAA.

The Bill, as currently drafted, contains, among others, the following provisions:

Residue stockpiles: The MPRDAA proposed including residue deposits and residue stockpiles in the definition of land, creating a “statutory accession” of movable dumps back to the land. The Bill extends this definition to include historic mines and dumps created before the implementation of the MPRDA.

Partitioning of rights and transfers of interests in companies: Section 11 of the MPRDA requires that a controlling interest in an unlisted company be consented to by the Minister. The MPRDAA amended this section so that consent by the Minister must also be obtained for the transfer of a controlling interest in a listed company. The Bill as drafted would amend Section 11 of the MPRDA so that a transfer of “any interest” in a listed company must be consented to by the Minister before such transfer, raising the possibility that the trading of shares of listed companies could be prohibited.

Mine closure: The Bill makes provision for two major changes to mine closure under the MPRDA. Firstly, the MPRDA would be amended so that a mining company could still incur environmental liability even after a closure certificate relative to a mine is obtained. Secondly, the financial provision paid to the Minister in terms of section 41 of the MPRDA will be retained for 20 years after the granting of the closure certificate.

Penalties: The Bill would also provide for revised penalties for violations of the MPRDA by making provision for both an administrative fine not exceeding 10 per cent of the person or holder’s annual turnover and exports during the preceding year, and imprisonment not exceeding four years.

The Bill is subject to change and any changes to it could be significant.


The Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry (the Mining(Mining Charter) sprungsprang from the MPRDA.MPRDA and also took effect on May 1, 2004. The Mining Charter committed all stakeholders in the mining industry to transfer ownership of 26 percent of their assets to black or historically disadvantaged South Africans (HDSAs) within 10 years. In addition,The Charter also sets targets for, among other things, the government indicated it would issue aadvancement of HDSAs into management positions, the employment of women, procurement of goods and services from HDSA-owned companies, training, community development and the upgrading of mine housing. Mining Charter Scorecard (Scorecard) against which companies could gauge their empowerment credentials. The fact that the Mining Charter enjoyed the full supportare required to devise plans to achieve these targets, must identify current levels of the mining houses, South Africa’s governmentbeneficiation and labor unions, gives it great credibility and improves its chancesmust indicate opportunities for success in the long run.
growth.

The objectives of the Mining Charter are to:

promote equitable access to the nation’s mineral resources by all the people of South Africa;

promote equitable access to the nation’s mineral resources by all the people of South Africa;
substantially and meaningfully expand opportunities for HDSAs, including women, to enter the mining and minerals industry and to benefit from the exploitation of the nation’s Mineral Resources;
use the industry’s existing skills base for the empowerment of HDSAs;
expand the skills base of HDSAs in order to serve the community;
promote employment and advance the social and economic welfare of mining communities and the major labor-sending areas; and
promote beneficiation of South Africa’s mineral commodities.

substantially and meaningfully expand opportunities for HDSAs, including women, to enter the mining and minerals industry and to benefit from the exploitation of the nation’s mineral resources;

use the industry’s existing skills base for the empowerment of HDSAs;

expand the skills base of HDSAs in order to serve the community;

promote employment and advance the social and economic welfare of mining communities and the major labor-sending areas; and

promote beneficiation of South Africa’s mineral commodities.

The Mining Charter envisages measuring progress on transformation of ownership by:

taking into account, among other things, attributable units of production controlled by HDSAs;

allowing flexibility by credits or offsets, so that, for example, where HDSA participation exceeds any set target in a particular operation, the excess may be offset against shortfalls in another operation;

taking into account previous empowerment deals in determining credits and offsets; and

considering special incentives to encourage the retention by HDSAs of newly acquired equity for a reasonable period.

Under the Charter, the mining industry as a whole agreed to assist HDSA companies in securing finance to fund participation in an amount of Rand 100 billion ($10.9 billion) over the first five years. Beyond the Rand 100 billion commitment, HDSA participation will be increased on a willing seller, willing buyer basis, at fair market value, where the mining companies are not at risk.

Following a review, the Department of Mineral Resources (DMR) amended the Mining Charter and the Revised Mining Charter was released on September 13, 2010. The requirement under the Mining Charter for mining entities to achieve a 26 percent HDSA ownership of mining assets by the year 2014 was retained. Amendments to the Mining Charter in the Revised Mining Charter require mining companies to:

facilitate local beneficiation of mineral commodities;

procure a minimum of 40 percent of capital goods, 70 percent of services and 50 percent of consumer goods from HDSA suppliers (i.e., suppliers in which a minimum of 25 percent + 1 vote of share capital is owned by HDSAs) by 2014, these targets being, however, exclusive of non-discretionary procurement expenditure;

ensure that multinational suppliers of capital goods put a minimum of 0.5 percent of their annual income generated from South African mining companies into a social development fund beginning in 2010, to contribute to the socioeconomic development of South African communities;

achieve a minimum of 40 percent HDSA demographic representation by 2014 at executive management (board) level, senior management (EXCO) as well as in those positions requiring core and critical skills, middle management level and junior management level;

invest up to 5 percent of annual payroll in essential skills development activities; and

implement measures to improve the standards of housing and living conditions for mineworkers by converting or upgrading mineworkers’ hostels into family units, attaining an occupancy rate of one person per room and facilitating home ownership options for all mineworkers in consultation with organized labor, all of which must be achieved by April 30, 2014.

In addition, mining companies are required to monitor and evaluate their compliance with the Revised Mining Charter, and must submit annual compliance reports to the DMR.

The government takes a “Scorecard” approach to the different facets of promoting the objectives of the Charter. It uses the Scorecard when considering applications for the conversion of existing old order rights into new order rights. The Scorecard was designedsets out the requirements of the Charter in tabular form which allows the DMR to function as an administrative“tick off” areas where a mining company is in compliance. It covers the following areas:

human resource development;

employment equity;

migrant labor;

mine community and not a legislative tool. Its objective was to find a practical framework for the Minister to assess whether a company measured uprural development;

housing and living conditions;

ownership and joint ventures;

beneficiation; and

reporting.

The new Scorecard attached to the intentRevised Mining Charter makes provision for a phased-in approach for compliance with the above targets over the 5-year period ending on April 30, 2014. For measurement purposes, the Scorecard allocates various weightings to the different elements of the Revised Mining Charter. Failure to comply with the provisions of the Revised Mining Charter will amount to a breach of the MPRDA, may result in the cancellation or suspension of a mining company’s existing mining rights and Mining Charter.

may prevent AngloGold Ashanti’s South African operations from obtaining any new mining rights.

On April 29, 2009, as required by section 100(1)(b) of the MPRDA, the Minister published the CodesCode of Good Practice for the South African Mineral Industry (the Code)(Code). The purpose of the Code was to set out administrative principles to enhance implementation of the Mining Charter and the MPRDA. The Code is to be read in combination with the Mining Charter and other legislation relating to measurement of socio-economic transformation in the South African mining industry.

A mining right will be granted to a successful applicant for a period not exceeding 30 years. Mining rights may be renewed for additional periods not exceeding 30 years at a time. A mining right can be cancelled if the mineral to which such mining right relates is not mined at an “optimal” rate.

AngloGold Ashanti holds eightseven mining rights in South Africa five of which have been successfully converted, executed and registered as new order mining rights at the Mineral and Petroleum Resources Titles Office (MPRTO). Three old order mining rights, being a non-core mining right, a surface operation that has been sold and a right which is an extension of an existing operation, are awaiting conversion by the Department of Mineral Resources (DMR), one of which has been executed, and is awaiting registration in the MPRTO.

AngloGold Ashanti holds three prospecting rights for gold and associated minerals, as well as a mining permit for the recovery of sand and clay. A new prospecting right application for copper, lead and zinc is in the process of being submitted to the DMR.

A prospecting right will be granted to a successful applicant for a period not exceeding five years, and may only be renewed once for three years. The MPRDA also provides for a retention period of up to three years after prospecting, with one renewal up to two years, subject to certain conditions.

A

AngloGold Ashanti holds four prospecting rights, one of which is in the process of being converted into a mining right. Six new prospecting right will be grantedapplications have been submitted to the DMR since the end of March 2011, after the moratorium on the issuing of rights was lifted.

AngloGold Ashanti also holds a successful applicantmining permit for a period not exceeding 30 years. Mining rights may be renewed for additional periods not exceeding 30 years at a time.

The MPRDA Amendment Act has been signed by the State President,recovery of sand and published, butclay, which is not yet in effect. Its purpose is to amend the MPRDA in order to:
make the Minister the responsible authority for implementing environmental matters in terms of the National Environmental Management Act, 1998 (NEMA) and specific environmental legislation as it relates to prospecting, mining, exploration, production and related activities incidental thereto on the prospecting, mining, exploration or production area;
align the MPRDA with the NEMA in order to provide for one environmental management system;
remove ambiguities in certain definitions;
add functions to the Regional Mining Development and Environmental Committee;
amend transitional arrangements so as to further afford statutory protection to certain existing old order rights; and
provide for matters connected therewith.
process of being renewed.

AngloGold Ashanti applied for and has been granted a refining license and an import and export permit by the South African Diamond and Precious Metals Regulator.

The BBBEE Amendment Bill

In December 2011, the Department of Trade and Industry (DTI) published the Broad-based Black Empowerment Amendment Bill, 2011 (2011 BBBEE Amendment Bill) for public comment. The BBBEE Amendment Bill sought to amend the Broad-based Black Economic Empowerment Act 53 of 2003 (BBBEE Act) to provide a framework of principles, strategies and guidelines aimed at promoting the broad-based socio-economic empowerment of HDSAs across the South African economy and society in the form of ownership, management, employment equity, skills development, preferential procurement, enterprise development and socio-economic development. The public comment period expired in February 2012. Following this public participation process, the 2011 BBBEE bill was revised and a new bill published in November 2012 (2012 BBBEE Amended Bill). As of April 19, 2013, the 2012 BBBEE Amendment Bill was still pending in parliament. The 2012 BBBEE Amendment Bill includes a number of changes to the current framework under the BBBEE Act, including:

amending and clarifying the definition of the intended beneficiaries of such framework;

46amending the definition of “Broad-Based Black Economic Empowerment”, or BBBEE, to introduce the concept of viable BBBEE and providing standards for that preferential procurement;

expanding the scope of the Codes of Good Practice, and the related transformation charters, on BBBEE matters that the Minister of Trade and Industry can issue under the BBBEE Act for specific sectors of the South African economy and making it compulsory for public authorities, governmental agencies and other public entities to apply such codes;

introducing into the BBBEE Act itself the definition of fronting BBBEE practices, which to date has been developed outside of the BBBEE Act and has now been expanded to capture the more sophisticated and unsuspecting fronting transactions, making fronting a criminal offense that is punishable with imprisonment and fines under certain circumstances, reasserting in the BBBEE Act the common law remedies for misrepresentation and more generally enhancing the enforcement mechanism against fronting;

establishing a BBBEE Commission responsible for overseeing, supervising and promoting compliance with the BBBEE Act, as well as receiving and investigating BBBEE-related complaints; and

providing that DTI may impose special requirements for specific industries.


The Royalty Act

The Mineral and Petroleum Resources Royalty Act, 2008, or the Royalty Act, was promulgated on November 24, 2008 and came into operation on March 1, 2010. The Royalty Act imposes a royalty on refined and unrefined minerals payable to the state.

The royalty in respect of refined minerals (which include gold and platinum) is calculated by dividing earnings before interest and taxes, or EBIT, as calculated under IFRS, by the product of 12.5 times gross revenue calculated as a percentage, plus an additional 0.5 percent. EBIT refers to taxable mining income (with certain exceptions such as no deduction for interest payable and foreign exchange losses) before assessed losses but after capital expenditure. A maximum royalty of 5 percent of revenue has been introduced for refined minerals.

The royalty in respect of unrefined minerals (which include uranium) is calculated by dividing EBIT by the product of nine times gross revenue calculated as a percentage, plus an additional 0.5 percent. A maximum royalty of 7 percent of revenue was introduced for unrefined minerals. Where unrefined mineral resources (such as uranium) constitute less than 10 percent in value of the total composite mineral resources, the royalty rate in respect of refined mineral resources may be used for all gross sales and a separate calculation of EBIT for each class of mineral resources is not required. For AngloGold Ashanti, this means that currently the company will pay a royalty based on refined mineral resources (as the unrefined mineral resources (such as uranium) for AngloGold Ashanti for 2012 constituted less than 10 percent in value of the total composite mineral resources). The rate of royalty tax payable for 2012 was 1.3 percent of revenue of the company’s South African operations.

CONTINENTAL AFRICA

DEMOCRATIC REPUBLIC OF THE CONGO

Democratic Republic of the Congo

The mining industry in the Democratic Republic of the Congo (DRC) is regulated primarily by the Mining Code enacted in July 2002 and its ancillary regulations (the Mining Regulations, promulgated in March 2003)2003 (DRC Mining Code). The DRC Mining Code which repealed the Mining Code of April 1981, vests the Minister of Mines with the authority for the granting, refusal, suspensionto grant, refuse, suspend and termination ofterminate mineral rights. Mineral rights may be granted in the form of exploration permits for an initial period of four years andor in the form of mining permits which are granted for an initial period of 30 years. An exploration permit may, at any time before expiry, be transformed partially into a mining license or a small-scale mining permit. ExploitationMining permits are granted followingupon successful completion of exploration and satisfaction of thecertain requirements, necessary for the award of such permit including approval of an environmental impact study and an environmental management plan.

The holder of a mining permit is required to commence development and mine construction within three years of the award of a miningsuch permit. Failure to do so may lead to forfeiture or payment of penalties.the mining permit. A permit holder must comply with specific rules relating to, among others, protection of the environment, cultural heritage, health and safety, construction and infrastructure planning.

Mining and exploration activities are required to be undertaken so as to affect as little as possible the interests of lawful occupants of land and surface rights holders, including their customary rights. The exercise of mineral rights by title holders which effectively deprives and/or interferes with the rights of occupants and surface rights holders, requires payment of fair compensation by the mineral title holder.
The

To protect and enforce rights acquired under an exploration or mining permit, the DRC Mining Code provides, fordepending on the nature of a dispute or threat, administrative, judicial and national or international arbitral recourses.

The DRC Mining Code sets out taxes, charges, royalties and other fees payable to the treasury by a mining title holder in respect of its activities. The Mining CodeIt also provides for a level of fiscal stability. Existingstability, in that existing tax, customs, exchange and benefits applicable to mining activities are guaranteed to remain unchanged for a period of 10 years in favor of a mining title holder in the event that amendment ofamendments to the DRC Mining Code resultswould result in less favorable payment obligations.

On January 1, 2012, a value added tax (VAT) replaced the previously applicable sales tax. The standard rate of VAT is 16 percent and is applicable to mining companies.

On January 1, 2013, a withholding tax of 14 percent became effective. The tax is applicable to services fees payable to a non-resident service provider by a resident of the DRC.

On July 18, 2012 the Convention between the Government of the Republic of South Africa and the Government of the Democratic Republic of Congo for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (Convention) came into effect, and is applicable to:

withholding taxes on amounts paid or credited on or after 1 January 2013; and

Regarding protection

other income taxes, levied in respect of taxable periods beginning on or after 1 January 2013.

The Convention reduces the withholding tax on dividends paid by companies resident in the DRC to companies resident in South Africa from 20 percent to 5 percent and enforcement of rights acquired under an exploration or mining permit,on interest paid by companies resident in the Mining Code provides, depending on the natureDRC to companies resident in South Africa from 20 percent to 10 percent. A South African company must own at least 25 percent of a disputerelevant DRC entity’s outstanding shares in order to take advantage of the reduced rates.

In October 2012, the DRC Minister of Mines announced a proposed overhaul of the DRC Mining Code. An informal review process has commenced. The proposals seek to, among others, increase the government stake to 35 percent from the existing 5 percent, increase the royalty rates from 2.5 percent to 6 percent on some minerals, and introduce a windfall tax of 50 percent levy on certain “super profits”. No formal timeframe or threat, administrative, judicial and national or international arbitral recourses. process has been announced for this review.

AngloGold Ashanti holds the majority stake and is the operator of Ashanti Goldfields Kilo (AGK)(86.22 percent), an exploration and mining joint venture with Société MiniéMinière de Kilo-Moto (SOKIMO) (13.78 percent), a DRC governmental mining agency. AGK is engaged in exploration activities in the north eastern DRC.

Following a review undertaken by a commission appointed by the DRC government to review all mining contracts entered into by mining companies with DRC parastatal mining agencies. AngloGold Ashanti engaged in and finalized with SOKIMO the renegotiation of the mining joint venture and AGK related agreements. AGK’s existing contractual arrangements, which were concluded under the repealed 1981 legislation, were replaced by new and restated agreements that conform or reflect the provisions of the current Mining Code of the DRC.
state-owned gold company.

AngloGold Ashanti also holds an effective 45 percenta stake in the Kibali gold project located in north easternnortheastern DRC. The Kibali gold project is operated by Randgold Resources and is owned by Randgold Resources (45 percent), AngloGold Ashanti (45 percent) and SOKIMO (10 percent), which latter share represents the interest of the DRC government in the Kibali gold project.

GHANA

Ghana

The Constitution of Ghana as well as the Minerals and Mining Act, 2006 (Act 703) (the(GMM Act) provide that all minerals in Ghana in their natural state are the property of the State and title to them is vested in the President on behalf of and in trust for the people of Ghana, with rights of prospecting, recovery and associated land usage being granted under license or lease.

The grant of a mining lease by the Ghana Minister of Mines is normally subject to parliamentary ratification unless the mining lease falls into a class of transactions exempted by Parliament.

47


Control of mining companies

The Ghana Minister of Mines has the power to object to a person becoming or remaining a ‘shareholder controller’,shareholder controller, a ‘majoritymajority shareholder controller’controller or an ‘indirect controller’“indirect controller” of a company which has been granted a mining lease if he considers thatthe Minister believes the public interest would be prejudiced by the person concerned becoming or remaining such a controller.

Stability agreementsagreement

The GMM Act provides for stability agreements as a mechanism to ensure that the incentives and protection afforded by laws in force at the time of the stability agreement are guaranteed for a period of 15 years. A stability agreement is subject to ratification by Parliament.

Prior to the business combination between AngloGold and Ashanti in April 2004, AngloGold and the government of Ghana agreed on the terms of a stability agreement (the “Ghana Stability Agreement”) to govern certain aspects of the fiscal and regulatory framework under which AngloGold Ashanti would operate in Ghana following the implementation of the business combination. The stability agreementGhana Stability Agreement necessitated the amendment of the Obuasi Mining Leasemining lease which had been ratified by Parliament.

Under the stability agreement,Ghana Stability Agreement, the government of Ghana agreed:

to extend the term of the mining lease relating to the Obuasi mine until 2054 on terms existing prior to the business combination;

to extend the term of the mining lease relating to the Obuasi mine until 2054 on terms existing prior to the business combination;
to maintain, for a period of 15 years, the royalties payable by AngloGold Ashanti with respect to its mining operations in Ghana at a rate of 3 percent per annum of the total revenue from minerals obtained by AngloGold Ashanti from such mining operations;
to ensure the income tax rate would be 30 percent for a period of 15 years. The agreement was amended in December 2006 to make the tax rate equal to the prevailing corporate rate for listed companies;
that a sale of AngloGold Ashanti’s or any of its subsidiaries’ assets located in Ghana remains subject to the government’s approval;
to permit AngloGold Ashanti and any or all of its subsidiaries in Ghana to retain up to 80 percent of export proceeds in foreign currencies offshore, or if such foreign currency is held in Ghana, to guarantee the availability of such foreign currency; and
to retain its special rights (Golden Share) under the provisions of the Mining Act pertaining to the control of a mining company, in respect of AngloGold Ashanti’s assets and operations in Ghana.

to maintain, for a period of 15 years, the royalties payable by AngloGold Ashanti with respect to its mining operations in Ghana at a rate of 3 percent per annum of the total revenue from minerals obtained by AngloGold Ashanti from such mining operations;

Further,

to ensure the Governmentincome tax rate would be 30 percent for a period of 15 years. The agreement was amended in December 2006 to make the tax rate equal to the prevailing corporate rate for listed companies; and

to permit AngloGold Ashanti and any or all of its subsidiaries in Ghana to retain up to 80 percent of export proceeds in foreign currencies offshore, or if such foreign currency is held in Ghana, to guarantee the availability of such foreign currency.

The Ghana Stability Agreement also stipulates that a sale of AngloGold Ashanti’s or any of its subsidiaries’ assets located in Ghana remains subject to the government’s approval. Furthermore, the government retains its special rights (Golden Share) under the provisions of the GMM Act pertaining to the control of a mining company, in respect of its assets and operations in Ghana.

The government of Ghana agreed that AngloGold Ashanti’s Ghanaian operations will not be adversely affected by any new enactments or orders, or by changes to the level of payments of any customs or other duties relating to mining operations, taxes, fees and other fiscal imports or laws relating to exchange control, transfer of capital and dividend remittance for a period of 15 years after the completion of the business combination. For fiscal years 2009

The government of Ghana has constituted a review committee to review and 2010,renegotiate stability agreements with the government, throughmining companies. Within the National Fiscal Stabilization Act 2009 (Act 785)committee’s powers of review are the redrafting of such stability agreements, the determination of whether stability agreements comply with the mining laws of Ghana and the Ghanaian legal regime for mining (fiscal requirements, foreign exchange regulations and the provisions of the tax laws), imposedand the preparation of guidelines to govern the granting of stability agreements in the mining industry. We are currently participating in negotiations with the Ghanaian review committee.

In March 2012 the tax laws of Ghana were amended. Changes to the tax laws include:

An increase in the income tax rate applicable to mining businesses from 25 percent to 35 percent. AngloGold Ashanti is currently protected until 2019 from any increase of its income tax rate to greater than the rate provided for under the Ghana Stability Agreement.

Introduction of a new capital allowance regime for class 3 assets (which include mineral and petroleum exploration and production rights, buildings, structures and works of a permanent nature used in mineral and petroleum exploration and production and plant and machinery used in mining and petroleum operations) that provides for a 20 percent straight line rate for a period of five years. Pursuant to the Ghana Stability Agreement, this change will not affect AngloGold Ashanti until 2019.

Elimination of the 5 percent levyallowance on all profits before tax for mining companies as a temporary measure to raise additional revenue to meet critical expenditures, while maintaining government’s fiscal objectives. In the 2011 Budget Statement and Economic Policy delivered on November 18, 2010, the Government extended the application of the Act for another fiscal year. AngloGold Ashanti has however been exempted from the application of this Act by virtue of its Stability Agreement. In March 2010, the Parliament of Ghana passed an amendmentprior year additions. Prior to the Minerals & Mining Act, 2006 (Act 703), namely2012 amendment, the Minerals and Mining (Amendment) Act, 2010 (Act 794), which amended section 25 of the Minerals & Mining Act, by fixing the royalty rate attax code granted an additional 5 percent instead of the previous provision which stated that royalty payable shall not be more than 6 percent or less than 3 percent of the value of assets acquired and qualified to be classified as class 3 assets for the purpose of granting capital allowances. Capital allowance is now 20 percent each year on the total revenuevalue of minerals obtained by the holder. Byassets. Pursuant to the Ghana Stability Agreement, this mining companies are now to pay royalties of 5 percent of total revenue of minerals obtained.change will not affect AngloGold Ashanti has once again been exempteduntil 2019.

A ring fencing rule to prevent mining businesses from deducting or setting off costs from one mining area with another’s income. Pursuant to the application ofGhana Stability Agreement, this amendment by virtuechange will not affect AngloGold Ashanti until 2019.

While the Stability Agreement protects AngloGold Ashanti from any new enactments that would impose obligations upon AngloGold Ashanti or any of its Ghanaian subsidiaries, the Government of Ghana has constituted a team to renegotiate stability agreements with mining companies. A government committee has invited AngloGold Ashanti for discussions and requested certain information. The government may intend to review the Ghana Stability Agreement.

Retention of foreign earnings

AngloGold Ashanti’s operations in Ghana are permitted to retain 80 percent of their foreign exchange earnings.earnings in an offshore foreign exchange account. In addition, the company has permission from the Bank of Ghana to retain and use US dollars, outside of Ghana, required to meet payments to the company’s hedge counterpartscounterparties which cannot be met from the cash resources of its treasury company.

48


Localization policy
A

Mining companies must submit a detailed program must be submitted for the recruitment and training of Ghanaians with a view to achieving ‘localization’“localization”, which is the replacement of expatriate personnel in a company’s Ghanaian operations by Ghanaian personnel. In addition, the holdermining companies must give preference to Ghanaian products and personnel, to the maximum extent possible, consistent with safety, efficiency and economies.

Recently passed Minerals and Mining (General) Regulations, 2012 (L.I. 2173) give further details on the localization policy.

Except as otherwise provided in a specific mining lease, all immovable assets of the holder underof the mining lease vest in the State onupon termination, as does all moveable property that is fully depreciated for tax purposes. Moveable property that is not fully depreciated is to be offered to the Statestate at the depreciated cost. The holder must exercise his rights subject to such limitations relating to surface rights as the Minister of Mines may prescribe.

Mining properties

The company is required to pay ground rent to the government of Ghana and such other fees as are prescribed by legislation, including royalties on timber felled within the lease area.

Obuasi

The current mining lease for the Obuasi area was granted by the Governmentgovernment of Ghana on March 5, 1994. It grants mining rights to land with an area of approximately 334 square kilometers in the Amansie East and Adansi West districts of the Ashanti region for a term of 30 years from the date of the agreement. In addition, the application for a mining lease over thean adjacent 140 square kilometers haswas also been granted, resulting in the total area under the mining lease conditions increasing to 474 square kilometers, (the Lease Area). The company is required to pay rent to the Government of Ghana (subject to review every five years, when the rent may be increased by up to 20 percent) at a rate of approximately $5 per square kilometer and such royalties as are prescribed by legislation, including royalties on timber felled within the Lease Area. kilometers.

The Government of Ghana agreed to extend the term of the mining lease relating to the Obuasi mine until 2054. The mining lease was formally ratified by Parliament on October 23, 2008.

Iduapriem and Teberebie

Iduapriem has title to a 33 square kilometer mining lease granted on April 19, 1989 for a period of 30 years. The terms and conditions of the lease are consistent with similar leases granted in respect of the Obuasi mining lease. Teberebie has two leases, one granted in February 1998 for a term of 30 years, and another granted in June 1992 for a term of 26 years. In January 2009 Iduapriem obtained a new mining lease, the Ajopa Concession, for a period of 10 years. The concession covers an area of 48.34m2.

GUINEA
48.34 square kilometers. In December 2011 the Minister of Lands and Natural Resources gave his consent for Teberebie’s title to a 25.83 square kilometer mining lease, granted in June 1992 for a period of 30 years, to be assigned to Iduapriem. While ownership of the lease has passed to Iduapriem, the registration of the transfer of the lease is still in process.

Guinea

In Guinea, all mineral substances are the property of the state. Mining activities are primarily regulated by the Mining Code, 1995. The right to undertake mining operations can only be acquired by virtue of one of the following mining titles: surveying permit, small-scale mining license, mining prospecting license, mining license or mining concession.

The holders of mining titles are guaranteed the right to dispose freely of their assets, to organize their enterprises as they wish, the freedom to engage and discharge staff in accordance with the regulations in force, the free movement ofto freely move their staff and their products throughout Guinea and freedom to dispose of their products in international markets.

The group’s Guinea subsidiary, Société AngloGold Ashanti Goldfields de Guinée SA (SAG), has title to the Siguiri mining concession area which was granted on November 11, 1993 for a period of 25 years. The agreement provides for an eventual extension/renegotiation after 23 years for such periods as may be required to exhaust the economic Ore Reserve.

At Siguiri, the original area granted of 8,384 square kilometers was reduced to a concession area of four blocks totaling 1,495 square kilometers.

SAG has the exclusive right to explore and mine in the remaining Siguiri concession area for an additional 22-year period from November 11, 1996 under conditions detailed in a Convention de Base which predates the new Guinea Mining Code.

49Code (described below).


Key elements of the Convention de Base are that:

The Republic of Guinea (Guinea) holds a 15 percent free-carried or non-contributory interest; is entitled to a royalty of 3 percent based on a spot gold price of less than $475 per ounce; and is owed 5 percent of the value of gold exported, based on a spot gold price above $475 per ounce, as fixed on the London Gold Bullion Market;

the Government of Guinea holds a 15 percent free-carried or non- contributory interest; a royalty of 3 percent based on a spot gold price of less than $475 per ounce, and 5 percent based on a spot gold price above $475 per ounce, as fixed on the London Gold Bullion Market, is payable on the value of gold exported;
a local development tax of 0.4 percent is payable on gross sales revenue;
salaries of expatriate employees are subject to a 10 percent income tax;
mining goods imported into Guinea are exempt from all import taxes and duties for the first two years of commercial production; and
SAG is committed to adopt and progressively implement a plan for the effective rehabilitation of the mining areas disturbed or affected by operations.

A local development tax of 0.4 percent is payable on gross sales revenue;

Salaries of expatriate employees are subject to a 10 percent income tax;

Mining goods imported into Guinea are exempt from all import taxes and duties for the first two years of commercial production; and

SAG is committed to adopting and progressively implementing a plan for the effective rehabilitation of the mining areas disturbed or affected by operations.

The Convention de Base is subject to early termination if both parties formally and expressly agree to do so,it, if all project activities are voluntarily suspended for a continuous period of eight months or are permanently abandoned by AngloGold Ashanti’s subsidiarySAG or if SAG goes into voluntary liquidation or is placed into liquidation by a court of competent jurisdiction.

Guinea Mining Code

The government enacted a mining code in September 2011 (Guinea Mining Code). However, the government suspended the application of the Guinea Mining Code pending the finalization of certain further amendments. In additionNovember 2012, a draft bill modifying certain provisions of the Guinea Mining Code was circulated for comment (Draft Bill). The revised Guinea Mining Code has not yet been finalized.

Pursuant to the exportGuinea Mining Code, existing mining titles in effect on the date on which the Guinea Mining Code comes into force remain valid for their duration and for the substances for which they have been issued.

The Guinea Mining Code provides for the establishment of a State mining company which will hold the interests that Guinea has in all the mining companies present in Guinea. The granting of a mining title by Guinea gives rise to a State shareholding of 15 percent in the mining company, which may not be diluted. This interest is acquired upon signing of the mining title and no financial contribution may be requested from Guinea in return. Guinea further reserves the right to acquire an additional share of 20 percent in cash in accordance with the terms established with each company concerned, which could bring the total shareholding of Guinea to 35 percent.

The provisions contained in the Guinea Mining Code concerning mining tax, payablecustoms duties, transparency, anti-corruption and labor (Mandatory Provisions) shall apply within 60 days following the effective date of the Guinea Mining Code to all mining companies having reached the exploitation phase. The Guinea Mining Code does not provide for transitional, stability or harmonization provisions concerning these Mandatory Provisions. To the extent that non-mandatory provisions of the Guinea Mining Code are inconsistent with the Convention de Base, the Government of Guinea a royalty on productionand AGA are required to work together as soon as possible after the Guinea Mining Code comes into force to harmonize the Convention de Base with the Guinea Mining Code. The Mandatory Provisions may be payable to the International Finance Corporation (IFC) and to Umicore SA, formerly Union Miniere (UM). Pursuant to the option agreement between UM and Golden Shamrock Mines Limited (GSM), a royalty on production may be payable to UM by Chevaning Mining Company Limited (CMC) or GSM, which payment obligation has been assignedapplicable to AngloGold Ashanti (Ghana) Limited, onas it is currently in exploitation phase.

The Guinea Mining Code also contains a sliding scaleformal commitment to the principles of between 2.5the Extractive Industries Transparency Initiative (EITI). The EITI sets a global standard for oil, gas and mining companies to publish what they pay and for governments to disclose what they receive. In addition to binding the government to EITI, the code requires all mining companies working in Guinea – even those from countries that have not committed to EITI – to respect the initiative’s principles and processes.

Currently, the government holds a stake of 15 percent and 7.5 percent, basedin the Siguiri gold mine. Following the adoption of the Guinea Mining Code, the Guinean government also announced its intention to carry out a review of the mining conventions currently in force in Guinea (including the Convention de Base). According to the Guinean government’s description of the review, the review will focus, among other things, on the spot gold price per ouncefinancial model of each mining convention, the discrepancies between $350 per ouncethe content of each existing convention and $475 per ounce, subjectthe new mining code, the legal status of each convention, and the specific challenges associated with the development of each project.

The Government has established a technical committee (the “Technical Committee”) tasked with negotiating amendments to indexing from January 1, 1995,mining conventions currently in place between the Government and the mining companies, to a cumulative maximum of $60 million. In addition, underensure the termsprogressive implementation of the restructuring agreement withprovisions of the IFC, a sliding scale royalty on productionGuinea Mining Code. The Draft Bill provides that the amendment agreements need to be finalized at the latest 24 months following the publication of the Guinea Mining Code. To date, SAG has not received any formal communication from the Government of Guinea relating to the renegotiation of its Convention de Base, but it expects that it may be payableinvited by the Technical Committee to renegotiate its Convention de Base during the IFC, calculated on the same basis but at half the rate payable to UM, to a maximumcourse of $7.8 million. The royalty payable to the IFC was fully discharged in January 2008, and the royalty payment payable to Umicore was fully discharged in December 2010.

MALI
2013 or 2014.

Mali

Mineral rights in Mali are governed by Ordinance No. 99-32/P- RMP-RM of August 19, 1999 enacting the mining code, as amended by No. 013/2000/P-RM of February 10, 2000 and ratified by Law No. 00-011 of May 30, 2000 (the “Mali Mining Code)Code”), and Decree No. 99-255/P-RM of September 15, 1999 implementing the Mali Mining Code.

Prospecting activities are carried out under prospecting authorizations (authorization(authorization de prospection), is an exclusive right forprospection). The authorizations give an individual or corporate entity the exclusive right to carry out prospecting activities over a given area for a period of three years renewable once for a period of 3 years without a reduction in the area ofcovered by the authorization. ResearchExploration activities may be carried out under researchexploration permits (permis(permis de recherchérecherche). The latter are granted to corporate entities only by order of the Minister in charge of Mines. ResearchExploration permits are granted for a period of three years, renewable twice for additional three-year periods. Each renewal ofrequires the research permit requires a relinquishment ofholder to relinquish 50 percent of the area covered by such permit. The entity applying for such a permit must provide proof of technical and financial capabilities.

An exploitation permit (permis d’exploitation)(permis d’exploitation) is required to mine a deposit located within the area of a prospecting authorization or a researchan exploration permit. The exploitation permit grants an exclusive titleright to prospect, researchexplore and exploit the named substances for a maximum period of 30 years renewable three times for an additional 10 years. The exploitation permit is granted only to the holder of an exploration permit or of a prospecting authorization and covers only the area coveredgoverned by the exploration permit or the prospecting authorization. An application must be submitted to the Minister in charge of Mines and to the National Director of Mines.

As soon as the exploitation permit is granted, the permit holder of the exploitation permit must incorporate a company under the law of Mali. The permit holder of the permit will assign the permit for free to this company. The StateMali will have a 10 percent free carried interest.interest in the company. This interest will be converted into priority shares and the State’sMali’s participation will not be diluted in the case of increasing thean increase in capital.

50


Applications for exploitation permits must contain various documents attesting to the financial and technical capacity of the applicant, a detailed environmental study in respect of the impact of the project on the environment, a feasibility study and a bank deposit. The permit is granted by decree of the Head of Government. A refusalRefusal to grant a permit may only be based on two grounds: insufficient evidence to support the exploitation of the deposit and/or athe failure of the environmental study.

Applications for prospecting authorizations and researchexploration permits must contain various documents attesting to the financial and technical capacity of the applicant, a detailed works and costcosts program, a map defining the area which is being requested and theproviding geographical coordinates, thereof, the exact details relating to the identity of the applicant and evidence of the authority of the signatory of the application. Such titles are granted by ministerial order. Any refusal to grant such titles shall be notified by letter from the Minister in charge of Mines to the applicant.

The

All mining titles mentioned above all require an establishment convention (convention d’etablissement) to be signed by the StateMali and the titleholder defining their rights and obligations. A standard form of such establishment convention has been approved by decree of the Head of Government.

AngloGold Ashanti has interests in Morila, Sadiola and Yatela, all of which are governed by establishment conventions covering exploration, mining, treatment and marketing in a comprehensive document. These documents include the general conditions with regard toprovisions regarding exploration (work program, fiscal and customs regime)framework) and exploitation (formation of a local limited liability company and mining company, state shareholdings, theState interest, fiscal and customs regime duringframework governing construction and exploitation phases, exchange controls, marketing of the product, accounting regime, training programs for local labor, protection of the environment, reclamation, safety, hygiene and settlement of disputes)dispute settlement).

As the establishment conventions contain stabilization clauses, the mining operations carried out by the AngloGold Ashanti entities in Mali are subjectedsubject to the provisions of the previous mining codes of 1970 and 1991 but also, for residual matters, to the provisions of the Mining Code of 1999.

AngloGold Ashanti has complied with all applicable requirements and the relevant permits have been issued. Morila, Sadiola and Yatela have 30-year permits which expire in 2022, 2024, 2020 and 2030,2024, respectively.

NAMIBIA
Mineral

Namibia

The Minerals (Prospecting and Mining) Act 33 of 1992 (MPM Act) provides that all rights to minerals in the Republic of Namibia vest in the State. In orderstate. The Mining Rights and Mineral Resources division of the Directorate of Mining handles all applications for and allocation of rights in relation to minerals in the Republic of Namibia.

Prospecting and mining activities are regulated by the MPM Act which, among others, provides for the granting, refusal, suspension and termination of rights in relation to minerals. The right to undertake prospecting and mining operations can only be acquired by virtue of one of the following mining titles:

Non-exclusive Prospecting Licenses;

Reconnaissance Licenses;

Mining Claims;

Exclusive Prospecting Licenses;

Mineral Deposit Retention Licenses; and

Mining Licenses.

To enable a company to prospect or mine,for minerals, the Ministry of Mines and Energy initially grantsmay grant an exclusive prospecting licenseExclusive Prospecting License or a Non-exclusive Prospecting License. Upon application and on presentation of a feasibility study, the Ministry then grants a mining license is then granted, takingMining License. Alternatively, the holder of a Non-Exclusive Prospecting License may peg and register a Mining Claim. Licensing decisions take into account the abilities of the company including(including its mining, financial and technical capabilities,capabilities), projected rehabilitation programs and the payment of royalties. Mining Licenses are only awarded to Namibian citizens and companies registered in Namibia, which includes foreign companies registered with the Namibian registrar of companies. A Mining Claim, on the other hand, may only be pegged by Namibian citizens or companies whose articles of association limits shareholding in those companies to Namibian citizens.

In 2011, the government adopted the New Equitable Economic Empowerment Framework (NEEEF). The relevant license was grantedobjectives of the NEEEF are aimed at redressing past inequalities and providing measures for empowerment. No legislation implementing the NEEEF has to date been enacted. In addition, the Chamber of Mines is in the process of negotiating its own charter with the government.

AngloGold Namibia (Pty) Ltd was granted the necessary licenses in respect of its mining and prospecting activities in Namibia. TheIts current 15-year mining licenseMining License expires in October 2018. ApplicationAn application has been submittedpresented to the Ministry of Mines and Energy during 2010 for the extension of the aforementioned Mining License to 2030. This application includes the mining area known as the Anomaly 16.

Taxes

The Namibian Government appears to include anomaly 16 as well ashave withdrawn or deferred the mining tax proposals that it made in 2011. These proposals included, among others, a requirement for mines to pay a value added tax of 15 percent on the export value of unprocessed minerals, a 5 percent export duty and an extensionincreased corporate tax rate of 44 percent, up from 37.5 percent. The minimum historic corporate tax rate on mining companies is 25 percent. Most mining companies currently pay between 25 and 40 percent, with diamond mines taxed at 55 percent. A corporate tax of 40 percent applies to profits from non-mining activities. There is a 10 percent withholding tax on interest earned by foreigners on their deposits held with Namibian banks or unit trust schemes. There is also a 25 percent withholding tax on certain services, management and consultancy fees rendered by foreigners.

An amount received from the sale or other disposal of a mineral license or the shares in a company holding a mineral license is deemed to be an income source in Namibia for purposes of calculating income tax, regardless of where the

transaction takes place.

Royalties

In 2008, the Government confirmed a royalty schedule that originally had been introduced in 2004. Since then all mining companies, at the discretion of the mining licenseMinister of Mines and Energy, pay a royalty of between 3 percent and 10 percent on the market value of base, precious, and rare metals and non-nuclear mineral fuels. AngloGold Namibia (Pty) Ltd currently pays a royalty of 3 percent. The government also introduced a windfall royalty, (now in effect), which is payable at the discretion of the Minister, and a new type of royalty in respect of all minerals other than precious stones and dimension stones, which might function as a penalty royalty. For example, this penalty may be imposed on minerals that are not in their most refined state that have been or are about to 2030.

TANZANIA
be exported and are of such a nature that their value can be increased by way of a practical and economical refining process that is available in Namibia.

Tanzania

Mineral rights in the United Republic of Tanzania are principally governed by the Mining Act of 1998 (the2010 (Tanzania Mining Act), and the Mining Regulations, 19992010 (Tanzania Mining Regulations), which include: Mining (Mineral Rights) Regulations 2010; Mining (Environmental Protection For Small Scale Mining) Regulations 2010; Mining (Mineral Beneficiation) Regulations 2010; Mining (Mineral Trading) Regulations 2010; Mining (Safety, Occupational Health and propertyEnvironmental Protection) Regulations 2010; and the Mining (Radioactive Mineral) Regulations 2010.

The Tanzania Mining Act and the Tanzania Mining Regulations came into force in November 2010. Ownership of and control over minerals are vestedon, in or under the land vest in the President of the United Republic of Tanzania. ProspectingNo person is allowed to prospect for theminerals or carry on mining of minerals,operations except petroleum, may only be conducted underpursuant to the authority of a mineral right license granted, byor deemed to have been granted, under the Tanzania Mining Act or its predecessor acts.

To enable a company to prospect or mine, the Ministry of Energy and Minerals (MEM) initially grants an exclusive prospecting license. Upon presentation of a feasibility study, together with certain other environmental, social and financial assurances, the MEM may then grant a form of license for mining. Licensing decisions take into account the abilities of the company (including its mining, financial and technical capabilities), projected rehabilitation programs, environmental compliance and the payment of royalties.

The following licenses can be applied for under this Act.the Tanzania Mining Act:

Licenses for Exploration:

prospecting license;

The three types

gemstone prospecting license; and

retention license.

Licenses for Mining:

special mining license (if the proposed capital investment is equal to at least US$100 million);

mining license (if the proposed capital investment is equal to between US$100,000 and US$100 million); and

primary mining license (reserved for Tanzanian citizens).

Licenses for Ancillary Activities:

processing license;

smelting license; and

refining license.

For purpose of mineral rights most often encountered, whichAngloGold Ashanti’s Geita Gold Mine, only prospecting, retention and special mining licenses are also those applicable to AngloGold Ashanti, are:

prospecting licenses;
retention licenses; and
mining licenses.

51

relevant.


A prospecting license grants the holder the exclusive right to prospect in the area covered by the license for all minerals within the class of minerals applied for. The classes that can be applied for include (amongst others):

metallic minerals;

energy minerals;

gemstones other than building materialskimberlitic diamonds; and gemstones,

kimberlitic diamonds.

An application for a prospecting license is made to the Commissioner for Minerals and the license is valid for a period of threefour years. Thereafter, the license is renewable for twothree further periods of– the first period being for three years and the second and third periods being for two years each. OnUpon each renewal, 50 percent of the area covered by the license must be relinquished. Before application is made for a prospecting license with an initial prospecting period (a prospecting license), a prospecting license with a reconnaissance period (a prospecting reconnaissance) may be applied for a maximum area of 5,000 square kilometers. This is issued for a period of two years after which a three-year prospecting license is applied for.

A company applying for a prospecting license must, inter alia,among other things, state the financial and technical resources available to it. A retention license can also be requested from the minister, after the expiry of a prospecting license period, for reasons ranging from funds to technical considerations.
Mining is carried out through either a mining license or a special mining license, both of which confer on the holder thereof the exclusive right to conduct mining operations in or on the area covered by the license. A mining license is granted for a period of 10 years and is renewable for a further period of 10 years. A special mining license is granted for a period of 25 years or for the estimated life of the orebody, whichever is shorter, and is renewable for a further period of 25 years.

If the holder of a prospecting license has identified a mineral deposit within the prospecting area whichthat is potentially of commercial significance but that cannot be developed immediately for reasonsbecause of technical constraints, adverse market conditions or other economic factors of a temporary character, it can apply for a retention license. A retention license which will entitlecan also be requested from the holder thereofMinister after the expiry of a prospecting license period, for reasons ranging from financial to apply for a special mining license when it sees fit to proceed with mining operations.

technical considerations. A retention license is valid for a period ofnot exceeding five years and is thereafter renewable for a single period of five years. The advantage of converting a prospecting license into a retention license is that the MEM may not revoke a retention license if the license holder fails to meet its obligations within the time frame agreed on application for the license (as would be the case with a prospecting license).

Holders of prospecting or retention licenses over a tenement will not automatically have first right to any mining license granted over that tenement. However, in practice, they will be best positioned to meet the requirements to be granted a form of license for mining.

Mining is mainly carried out through either a mining license or a special mining license, both of which confer on their holder the exclusive right to conduct mining operations in or on the area covered by the license. A special mining license is granted for the shorter of either the estimated life of the ore body indicated in the feasibility study report or such period as the applicant may request. It is renewable for a further period not exceeding the estimated life of the remaining ore body.

Except in the case of a special mining license, a mineral right may be freely assignedtransferred by theits holder thereof(in whole or in part) to another person or entity by notifyingwithout requiring consent from the MEM. However, the Commissioner for Minerals exceptmust be notified of any transfer of a prospecting or retention license and will refuse to register the transfer unless the transferee proves that it meets the financial and technical capability criteria required to apply for such licenses. The assignment of a special mining license which must havegenerally requires the approvalprior consent of the MinistryMEM, such consent not to be assigned. However, this approvalunreasonably withheld or delayed. There are limited exceptions to the requirement for the assignment of a mining license will not apply if the mining license is assignedMinister’s consent (such as transfers to an affiliate company of the license holder or to a financial institution or bank as security for any loan or guarantee in respect of mining operations.

Aoperations).

Special mining licenses have certain fiscal and other advantages over mining licenses, as the holder of a mineral rightspecial mining license may enter into a mining development agreement with the Ministrygovernment of Tanzania to guarantee the fiscal stability of a long-term mining project and make special provision for the payment of royalties, taxes, fees and other fiscal imposts.

imposts and a special mining license holder may, in certain circumstances, unilaterally amend the program of the mining operations agreed with the MEM.

AngloGold Ashanti has compliedconcluded a development agreement with all applicable requirements and the relevant licenses, which have been issued for 25 years, expiring in 2023.

The entire property and control over minerals on, in or under the land is vested in the United Republic of Tanzania. No person is allowed to prospect for minerals or carry on mining operations except under the authority of a Mineral Right granted, or deemed to have been granted under the Mining Act, 1998. In order to prospect or mine, the Ministry of Minerals and Energy initially grants an exclusive prospecting license and on presentation of a feasibility study,was issued a mining license for a period of 25 years, which expires in 2023.

The Finance Act 2012 which was passed on October 11, 2012 introduced some important changes to the fiscal regime with effect from July 1, 2012 that impact upon AngloGold Ashanti, in particular:

Introduction of a 30 percent capital gains tax on the sale of shares by an off-shore parent company. Changes were also made to the procedure for payment of capital gains tax by the seller of shares. Tax at the rate of 30 percent is then granted taking into accountpayable by way of an initial installment of 20 percent on the abilitytransfer, based on the notional gain that the seller would make where after a further installment of the company, including itsremaining 10 percent is due.

Prior to 2012 budgetary changes under the VAT Act 1997, mining financial and technical capabilities, rehabilitation programs and payment of royalties. The relevant licensecompanies were entitled to 100 percent VAT relief. This implied that no VAT was grantedapplicable on purchases made by mining companies. Following amendments to Geita Gold Mine Ltd in respect of itsthe VAT Act through the Finance Act 2012, the provision providing VAT relief to mining in Tanzania. The current 25-yearcompanies was repealed. As a result mining license expires in 2023. There is a new Mining Act which has been passed by Parliament this year. The new Mining Act and its Regulations came into force in November 2010.companies are no longer eligible for VAT relief.

AUSTRALASIA

AUSTRALIAAUSTRALASIA

Australia

In Australia, with a few exceptions, all onshore minerals are owned by the Crown (in right of the State).Crown. The respective Minister for each Statestate and Territoryterritory is responsible for administering the relevant Miningmining legislation enacted by the Statesstates and Territories.

territories.

Native Title legislation applies to certain mining tenuretenures within Australia. Australia recognizes and protects a form of Native Title whichthat reflects the entitlement of Aboriginal people to their traditional lands in accordance with their traditional custom and laws. Should Native Title claims or determinations exist, certain Native Title processes and procedures will apply under the Native Title Act 1993 (Cth) before the tenure is granted.

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Tenure may be granted subject to conditions relating to Native Title rights. In the mining context, Native Title matters are managed as part of the tenement grant process. If disputes arise in relation to the grant of a particular tenement, they can be referred to the National Native Title Tribunal, established under the Native Title Act, for resolution.


Other Federalfederal and Statestate Aboriginal heritage legislation operateslaws operate in parallel to the Native Title legislation, and arelegislation. They exist predominantly for the purposes of protecting Aboriginal sites and areas of significance from disturbance. To date, there has not been any significant impact on any of AngloGold Ashanti’s tenure due to Native Title or Aboriginal Heritage legislation.

AngloGold Ashanti’s operating properties are located in the state of Western Australia.Australia where tenure is issued under, and mining operations are governed by, the Mining Act 1978 (WA). The most common forms of tenure are exploration and prospecting licenses, mining leases, miscellaneous licenses and general purpose leases. In most Australian states, if the holder of an exploration license establishes indications of an economic mineral deposit in the area covered by the exploration license and complies with the conditions of the grant, the holder of the exploration license has a priority right against all others to apply forbe granted a mining lease which gives the holder exclusive mining rights with respect to minerals on the property.

A general purpose lease may also be granted for one or more of a number of permitted purposes. These purposes include erecting, placing and operating machinery and plants in connection with mining operations, depositing or treating minerals or tailings and using the land for any other specified purpose directly connected with mining operations.

Mining tenures will be granted with conditions relating to protection of the environment. Exploration and mining operations may also require separate approval from the state, territory or federal environment minister, which may require completion of an environmental impact assessment pursuant to applicable protection legislation prior to commencement. Further, an operating license under the relevant environmental protection legislation in the state or territory may also be required for certain mine processing or mining-related operations.

It is possible for an individual or entity to own the surfacean area of the propertyland and for another individual or entity to ownbe granted the mineral rights.right to explore for or mine any minerals located on or under the surface of the same area. Typically, the maximum initial term of a mining lease is 21 years and the holder has the right to renew the lease for an additional 21 years. Subsequent renewals are granted at the discretion of the respective Statestate or Territory’sterritory’s minister responsible for mining rights. MiningIn Western Australia, mining leases can only be assigned with the prior written consent of the relevant minister.

Government royalties are payable asby the holder of mining tenure in respect of minerals obtained from the relevant area of land, at the rates specified in the relevant legislation in each Statestate or Territory. A general purpose leaseterritory. The royalty on gold production in Western Australia is payable quarterly at a fixed rate of 2.5 percent of the royalty value of gold metal produced and sold. The royalty value is calculated by multiplying the amount of gold produced during a given month by the average gold spot price for that month. In addition, the holder of mining tenure may also be grantedrequired to pay annual rent in respect of the tenure. In Western Australia there is a minimum annual expenditure requirement for one or more of a number of permitted purposes. These purposes include erecting, placingprospecting and operating machineryexploration licenses and plant in connection with mining operations, depositing or treating minerals or tailings and usingleases. Exemptions from the land for any other specified purpose directly connected with mining operations.

expenditure requirement can be obtained if certain conditions are satisfied.

AngloGold Ashanti owns the mineral rights and has been granted 21-year term mining leases with rights of renewal to all of its mining areas in Australia, including its proportionate share of joint venture operations.operations and accordingly it has, together with its joint venture partners where applicable, the exclusive right to mine in those areas. Both the group and its joint venture partners are fully authorized to conduct operations in accordance with relevant laws and regulations. The mining leases and rights of renewal cover the current life-of-mine at AngloGold Ashanti’s operations in Australia.

AMERICAS

ARGENTINAAMERICAS

According to

Argentina

Land ownership & mining rights

The Argentinean Mining Code governs mining legislation, mines areactivity in the private propertycountry. Special regimes exist for hydrocarbons and nuclear minerals. In the case of most minerals, the Argentinean Mining Code establishes that the owner of the nationland is not the owner of the mineral rights; these are held by the national or provincial governments (depending on the location of the minerals). The national or provincial government, as applicable, is required by the Argentinean Mining Code to grant whomever discovers a province, depending on where theynew mine title to the mining concession.

The Argentinean Mining Code regulates exploration permits and mining concessions. Exploration permits grant their holders exclusivity rights to any mineral discoveries, including those made by a third party within the exploration area covered by the permit. Exploration permits are located. Individualslimited in time and as to the extent of the exploration area, are empoweredsubject to explore for and to exploit and dispose of mines as owners by meansthe payment of a single-time fee, and also require a minimum exploration work program and schedule to keep the permit in force.

The Argentinean Mining Code also regulates mining concessions, or exploitation rights. Priority for receiving a mining concession is given to the registered discoverer of the mine, which holds the exploration permit. Once the application for a mine has been submitted, the applicant may commence works and must submit a legal license grantedsurvey of the units

requested for the new mine. The application and the legal survey may be opposed by athird parties following specific proceedings set forth in the Argentinean Mining Code. Approval and registration of the legal survey by the Provincial mining authority constitutes formal title to the mining concession.

Any mining company wishing to commence or modify any mining-related activity, as defined by the Argentinean Mining Code, including prospecting, exploration, exploitation, development, preparation, extraction, and storage of mineral substances, as well as property abandonment or mine closure activity, is required to prepare and submit to the competent Provincial environmental authority an Environmental Impact Assessment (EIA) prior to commencing the work. Each EIA is required to describe the nature of the proposed work, its potential risk to the environment, and the measures that will be taken to mitigate that risk. If accepted by the competent authority, under the provisionsEIA is used as the basis to create a Declaration of Environmental Impact (DEI) to which the mining company is required to adhere during the mining-related activity at issue. The DEI is required to be updated at least on a biannual basis. Sanctions and penalties for non-compliance with the DEI are outlined in the Environmental Protection section of the ArgentineArgentinean Mining Code. The legal licenses granted forCode, and may include warnings, fines, suspension of quality certifications, restoration of the exploitationenvironment, temporary or permanent closure of mines are valid foractivities, and withdrawal of authorization to conduct mining-related activities.

Holders of mining concessions must comply with three main conditions: payment of an undetermined period, provided thatannual fee, investment of a minimum amount of capital, and the carrying out of a reasonable level of exploitation. Failure to do so could lead to forfeiture of the mining title holder complies withconcession, which would then revert back to the obligations settled in the Argentine Mining Code. In Argentina, the usual ways of transferring a right over a mining license are: to sell the license, to lease such a license, or to assign the right under such a license by a beneficial interest or Usufruct Agreement. Province.

In the case of Cerro Vanguardia, AngloGold Ashanti’s operation in Argentina, the mining titleconcession holder is itsAngloGold Ashanti’s partner, Fomicruz, and in terms of the Usufruct Agreement signed between them and Cerro Vanguardia SA onFomento Minero de Santa Cruz S.A. (Fomicruz). On December 27, 1996, the latter has theFomicruz entered into a usufruct agreement whereby Cerro Vanguardia S.A. was granted an irrevocable right to exploit the exploitation of theCerro Vanguardia deposit for a 40-year period, of 40 years. This agreementwhich expires on December 27, 2036.

BRAZIL
Cerro Vanguardia S.A. is an Argentinean company controlled by AngloGold Ashanti, with Fomicruz as minority shareholder.

In Brazil, there are two basic mining rights:

a license for the exploration stage, valid for a period of up to three years, renewable once; and
a mining concession or mine manifest, valid for the life of the deposit.
In general, exploration licenses are granted on a first-come, first-served basis. Mining concessions are grantedaddition to the holdersArgentinean Mining Code, between 1993 and 1995, Argentina implemented several federal laws to offer foreign companies attractive incentives for exploration and mining in Argentina, the Mining Investment Law (Law No. 24, 196, as amended, and related legal provisions) being the most important one. Such incentives include, among others, import duty exemptions, accelerated depreciation of exploration licenses that managefixed assets, a 3 percent cap on Provincial royalties, value added tax refunds for exploration-related expenses incurred by companies registered under the Mining Investment Law, and, subject to prove the existencefiling of a Mineral Resourcefeasibility study for the relevant mining project, a 30-year stability as to tax, customs and foreign exchange duties. Cerro Vanguardia S.A. obtained its tax, customs and foreign exchange stability certificate in 1996.

Recent and potential regulatory changes

On September 30, 2010, the National Law on Minimum Requirements for the Protection of Glaciers was enacted in Argentina, banning new mining exploration and exploitation activities on glaciers and “peri-glacial” areas. The law also subjects the ongoing mining activities to an environmental audit. If such audit results in material impacts on glaciers and “peri-glacial” areas, the relevant authority is empowered to take action, including suspension or relocation of the activity. The law establishes a broad definition of “peri-glacial” areas that, together with glacial areas, must yet be surveyed by an existing national Government Agency specifically appointed to this end. The constitutionality of the law has been challenged by the Province of San Juan (which hosts large mining projects), resulting in the granting of injunctions that have suspended the application of the law in that Province. The National Supreme Court of Justice of Argentina presides over the case, which is in its early stages.

On October 26, 2011, Decree 1722/2011 (Repatriation Decree) was issued, which imposes on oil, gas and mining companies operating in Argentina the obligation to repatriate all the proceeds of their exports from Argentina and to exchange such proceeds for Argentinean legal currency in the domestic banking system. All exporters, other than oil, gas and mining companies, have been licensedoperating under such regime since late 2001. Mining companies, on the other hand, were entitled to two exceptions: (i) a decree of 2003 applicable to mining companies with tax, customs and foreign exchange stability certificates obtained prior to the date on which such a decree was enacted (which is the case of Cerro Vanguardia S.A.); and (ii) a decree of 2004 applicable to mining companies with tax, customs and foreign exchange stability certificates obtained after the date on which such decree was enacted. Both exceptions have not been formally superseded by the competent environmental authority.

53Repatriation Decree, but appear to conflict with it, and such conflict may result, in some cases, in a violation of mining companies’ rights under the Mining Investment Law.


Mine manifests (mining titles grantedOn December 27, 2011, the Argentinean National Congress passed Law 26,737 which implemented a set of rules restricting the ownership of rural land by foreigners (including foreign individuals or any kind of legal entity controlled by foreign individuals or legal entities). The main restrictions are as follows: (i) foreigners cannot own in 1936)the aggregate more than 15 percent of the entire rural land of Argentina, the same cap being applicable to each province and municipality; (ii) foreigners will not be allowed to purchase more than 1,000 hectares in the so-called “zona nùcleo”, which comprises the main agricultural areas of central Argentina or an “equivalent” surface depending on the location of the land and its productive potential; and (iii) foreigners will not be allowed to buy land that contains, or is adjacent to, relevant and permanent water bodies (such as rivers and lakes). Although exploration permits and mining concessions (mining titles presentlyare not the subject matter of the restrictions placed by this law, certain rights granted through anto foreign mining companies under the Argentinean Mining Code may be restricted by this new law. For example, the right that holders of mining concessions currently have to force the surface owner to sell the land to the holder of the mining concession might be restricted if the concession holder is a foreign individual or a legal entity controlled by foreigners.

Ten provinces in whose territories the main mining projects of Argentina are located, signed a document with the Federal Government entitled Federal Mining Agreement, (FMA). The purpose of the FMA is, among other things, to increase provincial revenues from the mining industry by creating legal entities owned by provincial governments that would work in association with private mining companies. This scheme is not new in Argentina and it has been used by some provincial governments, among them Santa Cruz Province (through Fomicruz), in the Cerro Vanguardia project. The FMA also contemplates other forms of revenues such as the formation of special trusts to be funded by mining companies in order to finance education, health and other programs. Increase in royalty rates is not specifically contemplated in the FMA. The Provinces that signed the FMA had previously formed a special association of provinces, supported by the SecretaryNational Government.

In Argentina, the current regulatory regime of Mines of the Ministry of Minesroyalty payments is expected to change and Energy) are valid for an undetermined period until the depletion of reserves, provided thatseveral different options and payment thresholds have been discussed. The Santa Cruz Province has changed the mining title holder compliesroyalty from 1 percent to 3 percent.

Brazil

Land ownership and mining rights

General legal aspects

The Brazilian Constitution of 1934 states that, for purposes of exploration and exploitation, deposits and other mineral resources constitute property separate from the soil and belong to the Federal Union. Exploration and exploitation of such mineral resources may take place only with current Brazilian miningthe Federal Union’s concession and environmental legislation,in such a way as well as with those requirements setto protect the national interest. Federal law sets out bypenal and administrative sanctions for conduct and activities deemed harmful to the environment.

In Brazil, the National Department of Mineral Production (DNPM) is the state body within the Mines and Energy Ministry (the “MME”) that is responsible for: (i) the registration of mining titles, (ii) the grant of authorizations and concessions, (iii) the supervision of mining activities and mining titleholders, and (iv) the issuance of supplementary rules in relation to mining activity.

Under the current Mining Code, there are two kinds of mines: (i) claimstake mines (“Minas Manifestadas”), for which acts asrights were acquired before 1934 and exist independently of any mining license or authorization from the inspecting entityFederal Government and for mining activities. Obligationswhich the mineral resources constitute property of the titleholder include:

the start of construction, as per an approved development plan, within six months of the issuance of the concession;
extracting solely the substances indicated in the concession;
communicating to the DNPM the discovery of a mineral substance not included in the concession title;
complying with environmental requirements;
restoring the areas degraded by mining;
refraining from interrupting exploitation for more than six months; and
reporting annually on operations.
The difference between a mine manifestlandowner and a mining concession lies in(ii) granted mines, which are those that rely on grants from the legal nature of these two mining titles, since it is much more difficult and complicatedFederal Government for mineral exploration or exploitation (pursuant to the public administration to withdraw a mine manifest than a mining concession. Although, in practice, it is possible for a manifest to be cancelled or to become extinct if the abandonment of the mining operation is formally proven. All ofConstitution). AngloGold Ashanti’s operations in Brazil consist of both claimstake mines and granted mines.

Mining activities in granted mines must be performed in two defined stages: (i) exploration, which entails defining and evaluating the deposit and determining the feasibility of exploitation, and (ii) exploitation, which involves coordinating operations aimed at the industrial exploitation of the mineral deposit, from the extraction of useful minerals to their processing. Exploration authorizations issued by DNPM are valid for one to three years. Extensions can be obtained if necessary. In contrast, exploitation rights, once granted, are valid for the lifetime of the deposit, provided the mining titleholder complies with all legal requirements. Pursuant to these requirements, for example, titleholders must (i) start work on mineral exploitation within six (6) months from the date of publication of the Exploitation Concession, (ii) continue their mining activities until the mineral deposit has been exhausted, in accordance with the Economic Exploitation Plan (Plano de Aproveitamento Econômico) approved by DNPM and (iii) refrain from suspending mining activities without prior notice to DNPM.

During the exploration period, the mining titleholder has to pay an Annual Rate per Hectare (“TAH” – Taxa Anual por Hectare), subject to a maximum value set by law. In the exploitation period, regardless of the legal regime governing the project (whether claimstake or granted mines), the mining titleholder has to pay the Financial Compensation for Exploiting Mineral Resources (“CFEM” – Compensação Financeira pela Exploração Mineral). The CFEM is currently calculated based on revenues, minus some deductions authorized by mining law.

At the end of 2011 and the beginning of 2012 the states of Minas Gerais, Pará, Amapá and Mato Grosso do Sul each created a new tax (duty) on research, extraction and exploration activities as well as on the use of mineral resources carried out in those states. This tax could range from BRL3.00 to BRL6.50 per ton. In the state of Minas Gerais, however, gold ore was exempted from the collection of this new duty.

Potential regulatory changes

The Federal Government is contemplating changes to the mining legislation. Its goals would be to (i) strengthen the role of the Federal Government in regulating the mining industry, (ii) attract more and better investments to the mineral sector, (iii) encourage maximal use of mineral reserves and (iv) encourage members of the industry to add value to mineral products.

The government’s proposals have indefiniteinstitutional, legal and financial facets. Institutionally, the proposals would create a National Council of Mineral Policy to advise the Presidency of Brazil and the MME on, and develop guidelines and directives for, the mining licenses.

sector. They would also transform the DNPM into a regulatory agency with negotiation and inspection powers.

Legally, the proposals would change the rules governing access to mining titles. While exploration authorizations would be effective for a longer period of five (5) years, they would be renewable for only one extra year, at the discretion of authorities.

Companies would also have to demonstrate that they are investing in exploration activities on a yearly basis. Exploitation rights would be limited to 35- or 40-year grants renewable at the discretion of authorities. The granting of rights would become a more discretionary process and would result in a Formal Adhesion Contract for Exploitation rather than in an open-ended concession.

The proposals would raise CFEM rates for trade in gold ore from 1 percent on net invoicing to 2 percent on gross invoicing. They would also create new calculation methods and incidence hypotheses, notably with regard to transactions between related parties.

The MME has suspended the granting of new mining concessions until it promulgates changes to the mining legislation.

Colombia

COLOMBIALand ownership and mining rights

In Colombia, all mineral substances are the property of the Statestate of Colombia. The underlying principle of Colombian mining legislation is first-in-time, first-in-right.

Mining activities are primarily regulated by the Mining Code, Act 685, 2001 and2001. Amendments to the Mining Code enacted in 2010 pursuant to Act 1382 2010.were found unconstitutional. The underlying principleConstitutional Court stayed its ruling for two years to give the government the opportunity to present a new law. The government was expected to make new changes to the Mining Code public in the second half of Colombian mining legislation is: first in time, first in right.

2012, but has not yet presented any project of law yet to Congress.

The process starts with afiling of an exploration and exploitation proposal the presentation of which givestriggers a right of preference to obtain rights over the targeted area, provided it is available. The maximum extent of anSuch area covered by such a proposal iscannot exceed 10,000 hectares. OnceUpon receipt of a proposal, has been received, the relevant government agency undertakes an investigation to determinedetermines whether another proposal has been received regardingor contract already governs the area concerned or whether an existing contract forarea. If there are no pre-existing claims, the area is already in place. The government agency grants the applicant a “free zone” when the proposal made has a right of preference.

The new law includes the possibility for the government to reserve some areas to offer in a bidding process.
.

The concession contract

The government agency grants an exclusive concession contractcontracts for exploration and exploitation. Such a concession allows the concessionaireconcessions allow concessionaires to conduct the studies, works and installations necessary for establishingto establish the existence of minerals and to organize their exploitation. Upon being awarded a mining concession, a company must take out an insurance policy to cover any possible environmental damage as well as breaches of its mining obligations. It may then proceed with exploration activities. Once the exploration phase is complete, the concessionaire files a new plan regarding works and installations. An environmental impact study must also be filed and approved in order for the concessionaire to receive an environmental license prior to beginning construction and development.

The totalinitial term of such a concessionconcessions is 2030 years. Following an amendment, the extension of the concession contract for an additional 20-year period is no longer automatic. To receive thean extension, thea concessionaire must file a request the extension two years before the termination of the initial 20-year period,term, and must presentsubstantiate the application with economic, environmental and technical information. Because the extension is not automatic, the concessionaire must renegotiate the conditions of the extension.

According to the new law, the exploration period has been extended by 11 years. To receive the extension, the concessionaire must presentgrant. The term of a technical report every two years and explain its proposed activities for the next two years.
Once the concessionaire has completed its exploration program, a proposed plan of works and installations and a study of the environmental impact must be completed in order to receive an environmental license, without which the mining project may not be developed.
The terms of the concession and all the contractual obligations relatingthat arise from it are deemed to it, start fromtake effect as of the date of registration of the contract at the National Mining Register. Once a

AngloGold Ashanti’s core mining concession contracts at the La Colosa project provide that Agencia Nacional Minera (ANM), the new Colombian regulatory agency for mining activities, has been awarded, the discretion to declare the underlying concession void if AngloGold Ashanti Colombia S.A. (AGAC) breaches applicable environmental laws or regulations. If ANM were to exercise such discretion against AGAC, AGAC would be required to abandon the La Colosa project and all of its other existing mining concession contracts. Pending proposals for new mining concession contracts would also be cancelled and AGAC would be banned from doing business with the Colombian government for a period of five years. As a result, AGAC would be unable to conduct any mining exploration or development activities during such period. However, this would not affect other AngloGold Ashanti subsidiaries operating entity must take out an insurance policy to cover any possible environmental damage and its mining obligations.

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in Colombia, which hold singularly or in concert with joint venture partners the majority of the company’s concession contracts in Colombia.


There are some areas where mining activity is prohibited. These areas are:

National parks;

a)national parks;
b)regional parks;
c)protected forest reserves;
d)paramus (included in the new law); and
e)wetlands, according to the Ramsar Convention (included in the new laws).

Regional parks;

For

Protected forest reserves;

Paramus (included in Act 1382, introduced in 2010); and

Wetlands, pursuant to the Ramsar Convention.

Some forest reserves (these are not protected forest reserves“protected”, but rather landare set aside for active forestry purposes), it is necessary to extract this area to start activitiespurposes. Such forest reserves must be “extracted” after initial prospection, inmeaning that the exploration phase (ie. drilling). This extraction consists ofconcessionaire must obtain a specific permit to partially and temporarily change the use of the soil to permit suchbefore pursuing exploration activities.

Surface feeCannon fees and royalties

After exploration and construction of the infrastructure for the mine, royalty payments

Cannon fees are due.

The new law changes the payments of the cannon fees. Without taking into consideration the extension of the areas, as it was before, the amount of the cannon is due from the moment the area is declared available for the company (rather than from signature ofthe time the concession contract) and changes according tocontract is signed). Such fees change based on the number of years that the company has been a concessionaire, as follows:

From 1 to 5 years: approximately $9.00 per hectare per year.

from 1 to 5 years: approximately $9.00 per hectare per year; and
for years 6 and after, approximately $11.00 per hectare per year.

For years 6 and after, approximately $11.00 per hectare per year.

Royalty
The royalty

Once exploration is complete and the mining infrastructure is in place, the concessionaire must begin paying royalties. Royalties paid to the Colombian government is equivalent toconsist of a percentage of the exploited primary product the object of the mining title, and its sub-products.sub-products being exploited. For gold, the percentage of the royalty to be paid is 4 percent.

UNITED STATES OF AMERICAPotential regulatory changes

In 2013, the government is expected to modify the process for obtaining a mining concession. Instead of using a first-in-time, first-in-right approach in all cases, the government plans on subjecting some areas to a bidding process open to any qualified entity.

United States of America

Land ownership & mining rights

Mineral rights, as well asand surface rights in the USUnited States are owned by private parties, state governments or the federal government. MostAlthough not the case at Cripple Creek & Victor Gold Mining Company’s (CC&V) Cresson Project, the majority of land prospectiveutilized for precious metals exploration, development and mining in the western United States is owned by the federal government andgovernment. The right to mine on such land is obtained through a system of self-initiated location of mining claims pursuant togoverned by the General Mining Law of 1872, as amended. amended (General Mining Law). The General Mining Law allows mining claims on certain federal lands upon the discovery of a valuable mineral deposit and proper compliance with claim location and maintenance requirements. Until 1993, unpatented mining claim holders could apply for patents to their claims from the federal government, and, if granted, those patented mining claims became private lands owned by the mining claimant, limited only by reservations and restrictions contained in the patent from the federal government, and subject to the same permitting, environmental and reclamation laws and regulations as other private lands.

Individual states, including Colorado, typically follow a leaseleasing system for state-owned minerals. Private parties have the right to sell, lease or enter into other agreements, such as joint ventures, with respect to minerals that they own or control. All mining activities, regardless of whether they are situated on privately- or publicly-owned lands, are regulated by a myriad of federal, state and local laws, regulations, rules and ordinances, which address various matters including environmental protection, mitigation and rehabilitation.

Authorizations and permits setting forth the activities and restrictions pertaining thereto are issued by the responsible governmental agencies for all phases of mining activities.
Cripple Creek & Victor Gold Mining Company’sCC&V’s Cresson Project covers approximately 7,100 acres, the vast majority of which consists almost entirely of owned, patented mining claims from former public lands, with a small percentage of private and state lands, some of which are critical to the Cresson Project, being leased. The total areaAll of control is approximately 7,100 acres. Patented claims vest ownership in the holder, including the right to mine for an indefinite tenure. All life-of-mineCresson Project’s current reserves are within these property controls. Thethe patented claims.

Permitting and reclamation

CC&V’s Cresson Project is subject to a number of state and local permitting requirements, including permitting requirements imposed by the Colorado Mined Land Reclamation Act (MLRA) and Teller County. Under the MLRA, the Colorado Mined Land Reclamation Board (MLRB) issues and enforces mining and rehabilitationreclamation permits for all non-coal mines in Colorado on state, federal or private lands. In carrying out the statutory requirements of the MLRA, the MLRB (i) reviews mine permit applications and amendments and related matters, (ii) inspects active mine sites and prospecting sites and (iii) ensures financial warranties are posted for the actual cost of reclamation.

CC&V’s Cresson Project is currently operating under a permit generally referred to as mine life extension one (MLE1) issued by the StateMLRB and Teller County. Among other things, MLE1 permits CC&V to continue active mining at the Cresson Project through 2016 and imposes reclamation and other requirements on CC&V, including requiring (i) the stabilization and re-vegetation of Coloradodisturbed lands, (ii) the control of storm water and drainage from overburden storage areas, (iii) the removal of roads and structures, (iv) the treatment and the elimination of process solutions, (v) the treatment of mine water prior to discharge into the environment and (vi) visual mitigation. In September 2012, CC&V’s permit application for mine life extension two (MLE2) was approved by both the MRLB and Teller County.

Potential regulatory changes

Over the years, the U.S. Congress has considered a number of proposed amendments to the General Mining Law. Among the significant features contained in previously proposed legislation were a production royalty obligation, new and more stringent environmental standards and conditions, additional reclamation requirements, extensive new procedural steps which would likely result in delays in permitting, and granting counties the ability to petition the Secretary of the Interior to make certain areas unavailable for the location of unpatented mining claims. The ultimate content of future proposed legislation, if enacted, is uncertain. If any of the above-referenced provisions were imposed, CC&V’s operations could be adversely affected. Although no such legislation has been adopted to date, there can be no assurance that such legislation will not be adopted in the future.

MINE SITE REHABILITATION AND CLOSURE

Closure, an integral part of operations

All mining operations eventually cease. An integral aspect of operating our mines is on-going planning for closure, together with an estimate of associated liability costs and the placement of adequate financial provisions and assurances to cover these costs.

AngloGold Ashanti completed a group closure and rehabilitation management standard in 2009 and all of our operations were required to comply with the standard by December 2011. The Continental Africa operations were granted an extension to December 2012.

Closure planning is an activity that starts at the exploration and mine design stage and continues throughout the life of mine:

The evaluation of new projects includes a conceptual closure plan, which takes into account future closure and associated costs.

Our standard requires that an interim closure plan be prepared within three years of commissioning an operation, or earlier if required by legislation.

This plan is reviewed and updated every three years (annually in the final three years of a mine’s life) or whenever significant changes are life-of-minemade, and takes into account operational conditions, planning and legislative requirements, international protocols, technological developments and advances in practice.

For many of the older mines, closure planning and the evaluation of environmental liabilities is a complex process. This is particularly so in Brazil, Ghana and South Africa, where many of the long-life operations present environmental legacies that may have developed over a century or more.

A particular challenge is concurrent rehabilitation, which is carried out while a mine is still operational. This practice serves to decrease the current liability and reduces the final rehabilitation and closure work that must be undertaken, but has the potential to sterilize mineral reserves, which the company might wish to exploit should conditions, such as the gold price, change.

Our closure standard stipulates that closure planning must be undertaken in consultation with the community. In the course of these consultations, different issues are raised which require site-specific solutions. Livelihood preservation and infrastructure are often key requirements. Local people, who were previously employed at the mine, may receive education and training so as to seek viable employment alternatives. Communities also require information on the Company’s rehabilitation of the landscape and on any lasting environmental impacts.

In addition, long-term remediation obligations including decommissioning and restoration liabilities relating to past operations are based on our environmental management plans and comply with current environmental and regulatory requirements.

Provisions for remediation costs are made when there is a present obligation, it is probable that expenditure on remediation work will be required and the cost can be estimated within a reasonable range of possible outcomes. These costs are based on currently available facts, technology expected to be available at the time of the clean-up, laws and regulations presently or virtually certain to be enacted, and previous experience in the remediation of contaminated sites.

Decommissioning costs and restoration costs are provided at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices. Estimates are discounted at a pre-tax rate that reflects current market assessments of the time value of money.

Discounted closure liabilities (excluding joint ventures) increased from $653 million in 2011 to $758 million in 2012. This change is largely attributable to a change in mine plans resulting in accelerated cash flows, change in economic assumptions and discount rates.

ENVIRONMENTAL, HEALTH AND SAFETY MATTERS

In addition to post-mining land reclamation and closure requirements, AngloGold Ashanti is subject to extensive environmental, health and safety (EHS) laws and regulations in the various jurisdictions in which the company operates. These requirements govern, among other things, extraction, use, conservation and discharge of water; air emissions (including dust control); regulatory and community reporting; clean-up of contamination; worker health and safety and community health; and the generation, transportation, storage and disposal of solid and hazardous wastes, such as acids, radioactive materials, and mine tailings. In addition, environmental laws and regulations, including the requirements contained in environmental permits, are generally becoming more restrictive or more strictly enforced. Significant EHS requirements, risks and trends affecting our mining and processing operations are described below. For additional discussion of EHS performance on a mine-by-mine basis, see “Item 4B.: Business overview – Operating performance.”

Regulatory Compliance

Capital and operating costs to comply with EHS laws and regulations have been, and are expected to continue to be, significant to AngloGold Ashanti. In addition, AngloGold Ashanti could incur fines, penalties and other sanctions, environmental clean-up costs, and third-party claims for personal injury or property or natural resources damages; suffer reputational damages; and be required to install costly pollution control equipment or to modify or suspend operations, as a result of actual or alleged violations or liabilities under EHS laws and regulations. Failure to comply with applicable EHS laws and regulations may also result in the suspension or revocation of permits.

55

AngloGold Ashanti’s ability to obtain and maintain permits and to successfully operate in particular communities may be adversely impacted by real or perceived effects on the environment or human health and safety associated with AngloGold Ashanti’s or other mining companies’ activities.


Water Management

AngloGold Ashanti’s mining and processing operations are heavily dependent upon access to substantial volumes of water required for such operations. Typically, water-use permits or water rights in each country impose limits on the quantity of water that can be extracted from certain sources and require, among other things, that wastewater from mining operations meet certain water quality criteria upon discharge. Water quality and usage are areas of concern globally, but are particularly significant for operations in Ghana and South Africa, and for exploration projects in Colombia, where there is significant potential environmental and social impact and a high level of stakeholder scrutiny. Any failure to secure access to suitable water supplies, or achieve and maintain compliance with the requirements of the permits or licenses, could result in curtailment or suspension of production at the affected operation. Incidents of water pollution or shortage can, in extreme cases, lead to community protest and ultimately result in the withdrawal of community and government support for our operations.

Where feasible, we operate a “closed loop” system which recycles the water used in our operations without discharging it to the environment. In some areas, however, such as Ghana, high levels of rainfall and surface water runoff mean that a closed loop system is not feasible and that discharges, after water treatment, must take place. During 2011, we commissioned a reverse osmosis plant in the northern section of the Obuasi mine which functions in conjunction with complementary water treatment technologies to ensure that water released is compliant with Ghana’s water quality standards. At the southern section of the mine, a 250m3/hour water treatment plant was commissioned in early 2012 and another 500 m3/hour plant is under construction. At the Iduapriem mine, a water treatment plant was commissioned in 2010 to ensure that the operation can release excess water while meeting effluent discharge standards.

Waste Management

Mining and mineral processing operations generate waste rock and tailings.

During open-pit mining, large volumes of soil and/or rock (overburden) are generated to expose the ore body. Similarly, waste rock is generated during drilling and developing access to underground ore bodies. Overburden and waste rock typically contain sub-economic levels of gold and are deposited as large waste rock dumps. Mine tailings are the process waste generated once grinding and extraction of gold from the ore is completed in the milling process and are deposited as slurry in large storage facilities specifically designed for this purpose.

The impact of a breach, leak or other failure of a tailings storage facility can be significant, and the company therefore monitors such facilities closely in accordance with national regulatory requirements and commitments made to local communities. The occasional well-publicized failure of a tailings facility and the potential impact of such failure also mean that these facilities are generally tightly regulated. An incident at our operations could result, among other things, in enforcement, obligations to remediate environmental contamination, and claims for property or natural resources damages and personal injury and negative press coverage. Even an incident at another company’s operations has potential to result in governments tightening regulatory requirements and restricting other mine operators in response.

Groundwater Impacts and Environmental Remediation

AngloGold Ashanti has identified groundwater contamination plumes at certain of its operations. Numerous scientific, technical and legal studies have been undertaken to assist in determining the magnitude of the impact and to find sustainable remediation solutions. Based on those studies as well as discussion with regulators, the company has taken steps, including monitored natural attenuation and phyto-technologies, to address soil and groundwater

contamination. Subject to the completion of trials and the technology being a proven remediation technique, no reliable estimate can be made for the obligation. Should these costs be significant, this could have a material adverse impact upon AngloGold Ashanti’s results of operations and its financial condition.

As AngloGold Ashanti or its predecessors has a long history of mining operations in certain regions, issues may arise regarding historical as well as potential future environmental impacts to those areas. For example, certain parties, including NGOs, community groups and institutional investors, have raised concerns about surface and groundwater quality, among other issues, in the area surrounding the company’s Obuasi and Iduapriem mines in Ghana, including potential impacts to local rivers and wells used for water from heavy metals, arsenic and cyanide as well as sediment and mine rock waste. Following temporary shutdowns at both mines in 2010, the company has made improvements in effluent quality management and constructed a new tailings impoundment at Iduapriem as well as three additional water treatment plants at Obuasi to reduce the risk of incidents that have the potential to degrade local water sources. AngloGold Ashanti is continuing to investigate allegations of impacts by the company’s operations on water quality in mining areas and to consider, as appropriate, potential additional responsive actions, such as remediation, engineering and operational changes at the mine sites and community outreach programs.

In addition, AngloGold Ashanti has identified a flooding and future pollution risk to deep groundwater in the Klerksdorp and Far West Rand goldfields in South Africa. AngloGold Ashanti’s Vaal River operations are part of the Klerksdorp goldfields and its West Wits operations are part of the Far West Rand goldfields. Various studies have been undertaken by AngloGold Ashanti since 1999 to better understand groundwater conditions in mined-out workings, including potential groundwater infiltration and acidification concerns. Due to the interconnected nature of underground mining operations in South Africa, any proposed solution needs to be a combined one supported by all the companies owning mines located in these goldfields. As a result, the South African Department of Mineral Resources and affected mining companies are now involved in the development of a “Regional Mine Closure Strategy”. In view of the limited information currently available, no reliable estimate can be made for the obligation at this time. If material, obligations for this matter could have an adverse impact on AngloGold Ashanti’s financial condition.

Climate Change and Greenhouse Gas Regulation

Greenhouse gases, or “GHGs”, are emitted directly by AngloGold Ashanti’s operations, as well as by external utilities from which AngloGold Ashanti purchases power. Currently, a number of international and national measures to address or limit GHG emissions, including the Kyoto Protocol, the Copenhagen Accord and the Durban Platform, are in various phases of discussion or implementation in the countries in which the company operates.

The outcome of the climate change negotiations may, in due time, have the effect of requiring AngloGold Ashanti to reduce its direct GHG emissions or energy use or to incur significant costs for GHG emissions permits or taxes including through costs passed on by electricity utilities which supply the company. AngloGold Ashanti also could incur significant costs associated with capital equipment, GHG monitoring and reporting and other obligations to comply with applicable requirements. The most likely source of these company-level obligations is unlikely to be by operation of international law but more likely to come through domestic implementation of state obligations pursuant to evolving climate change legal regimes.

For example, the Australian government implemented a carbon trading scheme commencing in July 2012. Under the applicable requirements, approximately 500 of Australia’s biggest emitters, including AngloGold Ashanti, started to pay A$23 per tonne of carbon dioxide generated or equivalent from July 2012. The charge will increase by approximately 5 percent each year until 2015, when it will be set by the market under a trading scheme, similar to the existing Emissions Trading Scheme in the European Union.

Also, in 2011, the South African government released a climate change response white paper. In February 2013, the South African Minister of Finance announced his intention to introduce a carbon tax in 2015. AngloGold Ashanti already pays a levy of ZAR0.035 per kilowatt hour of electricity that it purchases and is generated from fossil fuels.

The 2013 Budget Review provides an indication of the expected levels of the carbon tax rate as being ZAR 120 (approximately US$13) per tonne of CO2e emitted above certain thresholds. Under the proposal, the tax rate would increase by 10 percent a year, reaching ZAR 193 (approximately US$21) per tonne by 2020. The end of the decade also marks the end of the first phase of the carbon tax. Depending on the nature of the emitter, a basic tax-free threshold of up to 60 percent of the tax liability will apply.

It is probable that the tax will be levied on sectors that comprise elements of the AngloGold Ashanti supply chain. Consequently, it is likely that the costs associated with those elements of the supply chain will increase for the medium- and long-term.

In 2010, Brazil launched sector-specific plans to meet a voluntary reduction target of 1.2 billion tonnes of CO2 by 2020. Amongst other plans, it is intended to reduce de-forestation in the Cerrado biome, where AngloGold Ashanti operates, by 40 percent and expand renewable energy production and energy efficiency programs. The decree also provided for a Brazilian GHG trading scheme, which is yet to be designed. While Brazil is not yet formally regulating GHG emissions at the national level, some state environmental agencies have requested companies to voluntarily submit GHG emissions management plans.

In addition, potential physical risks to our operations as a result of climate change include changes in rainfall rates or reduced water availability, rising sea levels, higher temperatures and extreme weather events. Events or conditions such as flooding or inadequate water supplies could disrupt mining and transport operations, mineral processing and rehabilitation efforts, could create resource shortages and could damage the company’s property or equipment and increase health and safety risks on site. Such events or conditions could have other adverse effects on the company’s workforce and on the communities in the area around our mines, such as an increased risk of food insecurity, water scarcity and prevalence of disease.

Occupational and Community Safety and Health and Tropical Diseases

AngloGold Ashanti’s operations are subject to a variety of laws and regulations designed to protect and improve the safety and health of employees. In some of the jurisdictions in which we operate, the government enforces compulsory shutdowns of operations to enable investigations into the cause of accidents at those operations. Certain of the company’s operations have been temporarily suspended for safety reasons in the past. In South Africa, in particular, so-called Section 54 safety stoppages have become a significant issue for mining companies. In 2012, stoppages occurred as follows:

•  Moab Khotsong

9

•  Savuka

3

•  Great Noligwa

9

•  Mponeng

6

•  TauTona

2

This had a material impact on production at these mines. Each directive resulted in suspending operations either fully or partially in order to comply with the inspector’s recommendations on safety. A working group comprising the inspectorate, the mining industry and organized labor has been formed to address the trend of increasing safety stoppages. AngloGold Ashanti is also enhancing safety programs, in line with the overall ONE initiative and industry Best Practice, which could result in significant additional costs for the company.

In addition, AngloGold Ashanti is subject to health and safety regulations relating to occupational disease. The primary areas of focus in respect of occupational health of employees within the company’s operations are noise-induced hearing loss (“NIHL”) and occupational lung diseases (“OLD”), which include pulmonary tuberculosis (“TB”) from various causes and silicosis in individuals exposed to silica dust. This issue has been particularly prevalent in South Africa and has also arisen at the company’s Continental Africa and Brazilian operations, albeit to a lesser extent. AngloGold Ashanti provides occupational health services to its employees at its occupational health centers and clinics, and continues to improve preventative occupational hygiene initiatives, such as implementing various dust control measures and supplying its employees with respiratory protective equipment. If the costs associated with providing such occupational health services, implementing such dust control measures or supplying such equipment increase significantly beyond anticipated or budgeted amounts, this could have an adverse effect on AngloGold Ashanti’s results of operations and its financial condition. Actual and alleged health and safety incidents or breaches of standards may also adversely impact the company’s reputation.

The South African government, by way of a cabinet resolution in 1999, proposed a possible combination and alignment of benefits of the Occupational Diseases in Mines and Works Act (“ODMWA”) that provides for compensation to miners who have OLD, and the Compensation for Occupational Injuries and Diseases Act (“COIDA”), that provides for compensation in respect of job related injuries and compensation of non-miners who have OLD. It appears less likely that the proposed combination of the two acts will occur in the short to medium term, but some alignment of benefits may be considered in the future. COIDA provides for compensation payments to workers suffering permanent

disabilities from OLD, which are classified as pension liabilities if the permanent disability is above a certain threshold, or a lump sum compensation payment if the permanent disability is below a certain threshold. ODMWA only provides for a lump sum compensation payment to workers suffering from OLD as well as the payment of medical expenses over the claimant’s lifetime. If the proposed combination of COIDA and ODMWA were to occur, this could further increase the amount of statutory compensation that miners employed by AngloGold Ashanti could claim, which consequently could have an adverse effect on AngloGold Ashanti’s financial condition.

On November 23, 2010, the Chamber of Mines of South Africa applied to the North Gauteng High Court for a declaratory order as to whether or not the Compensation Commissioner may include in the levy to be paid by any specific mine under ODMWA any amount that is intended to be used for funding benefits payable to: (1) ex-mine workers who had never worked at that mine; or (2) ex-mine workers who used to work at the mine, but no longer work at the mine. On April 29, 2011, the Honorable Judge Zondo dismissed the Chamber’s application with costs. The judge concluded that the Compensation Commissioner has authority under ODMWA to address an historical or actuarial deficit in the Compensation Fund by increasing the levy payable by current mines and works to cover the shortfall in respect of all ex-mine workers. The Chamber lodged an appeal to the Supreme Court of Appeal. The appeal was dismissed with costs. The effect of the judgment is that ODMWA levies may be increased in respect of the category of former employees referred to above.

AngloGold Ashanti is subject to numerous claims, including class actions or similar group claims related to silicosis and other OLD, and could be subject to similar claims in the future. AngloGold Ashanti has received notice of two applications for class certification relating to silicosis in which the company is a respondent. It has also received notice of individual claims. Please refer to “Item 8: Financial Information – Legal Proceedings – South Africa – Silicosis litigation.”

In addition to OLD, AIDS and associated diseases remain major health care challenges faced by AngloGold Ashanti’s South African operations. Workforce prevalence studies indicate that HIV prevalence rates among AngloGold Ashanti’s South African workforce may be as high as 30 percent. AngloGold Ashanti continues to develop and implement programs to help those infected with HIV and prevent new infections from spreading. Since 2001, the company has offered a voluntary counseling and HIV testing program for employees in South Africa and, since 2003, has offered anti-retroviral therapy to HIV positive employees who met the current medical criteria and who desire this treatment.

Malaria and other tropical diseases also pose significant health risks at all of the company’s operations in Central, West and East Africa where such diseases may assume epidemic proportions because of ineffective national control programs. Malaria is a major cause of death in young children and pregnant women but also gives rise to fatalities and absenteeism in adult men. Other conditions such as heart disease, chronic diseases and obesity are of increasing incidence and concern.

Such diseases impair the health of workers and negatively affect productivity and profitability as a result of workers’ diminished focus or skill, absenteeism, treatment costs and allocated resources. AngloGold Ashanti cannot guarantee that any current or future medical program will be successful in preventing or reducing the injury and illness rates amongst its employees or in affecting consequent morbidity or mortality rates. AngloGold Ashanti may incur significant costs in addressing this issue in the future, which could also adversely impact the company’s results of operations and financial condition.

ANGLOGOLD ASHANTI GLOBAL OPERATIONS: 2010

(MAP)
OPERATING PERFORMANCE
2012

LOGO

Operations

1.  Argentina  5. Guinea  8.  South Africa  9.  Tanzania
  Cerro Vanguardia (92.5%)   Siguiri (85%)    Vaal River    Geita
2.  Australia  6. Mali    Great Noligwa  

10.

  United States
  Sunrise Dam   Morila (40%)    Kopanang    Cripple Creek & Victor (CC&V)
3.  Brazil   Sadiola (41%)    Moab Khotsong    
  Serra Grande(1)   Yatela (40%)    Surface operations    
  AGA Mineração  7. Namibia    Mine Waste Solutions    
4.  Ghana   Navachab    West Wits    
  Iduapriem       Mponeng    
  Obuasi       Savuka    
         TauTona    

 

(1)   Effective July 1, 2012, AngloGold Ashanti increased its shareholding in Serra Grande from 50 percent to 100 percent.

 

Major Projects

11.

  Colombia  

12.

 DRC  

13.

  Australia    
  Gramalote (51%)   Kibali (45%)    Tropicana (70%)    
  La Colosa   Mongbwalu (86.2%)        

Percentages indicate the ownership interest of AngloGold Ashanti, whether held directly or indirectly. All operations and projects are 100%-owned unless otherwise indicated.

OPERATING PERFORMANCE

Group description

Headquartered in Johannesburg, South Africa, AngloGold Ashanti has 21 operations in 10 countries. Major development projects are Tropicana in Australia, Kibali in the Democratic Republic of the Congo (DRC) and La Colosa in Colombia. Our extensive brownfield, greenfield and marine exploration programs extend to 14 countries, in both established and new gold-producing regions through managed and non- managed joint ventures, strategic alliances and wholly owned ground holdings. We have an equity interest in Rand Refinery, a global gold refining and smelting complex in South Africa, and own and operate the Queiroz refinery in Brazil.

The group is managed according to four geographic regions, namely:

South Africa, which comprises two mining company with 20areas and associated infrastructure – namely West Wits and Vaal River, which together comprise six deep-level mining operations and surface operations. In July 2012, AngloGold Ashanti concluded the acquisition of First Uranium (Pty) Limited, the owner of Mine Waste Solutions (MWS), which operates in the same area of South Africa.

Continental Africa, which comprises the operations in Ghana, Guinea, Mali, Namibia and Tanzania, as well as projects in the DRC.

Americas, comprising operations in Argentina, Brazil and the United States, as well as projects in Colombia. AngloGold Ashanti concluded the acquisition of the remaining 50 percent interest in Serra Grande in Brazil during the year.

Australasia, which currently focuses on four continents,a mine and project in Australia.

The group also has a pipeline of greenfield, brownfield and marine exploration programs.

AngloGold Ashanti’s operations and joint ventures employed, 62,046on average, 65,822 people including contractors, and(including contractors) in 2012 (2011: 61,242).

Performance

In 2012, AngloGold Ashanti produced 4.523.94 million ounces of gold in 2010.

The group’s operations are divided into the following regions:
South Africa — includes operations in South Africa;
Continental Africa — includes operations in Ghana, Guinea, Mali, Namibia and Tanzania;
Australasia — includes the operation in Australia; and
Americas — includes operations in Argentina, Brazil and the United States.
In addition, the company conducts a focused worldwide exploration program. In the course(2011: 4.33 million ounces) as well as 1.21 million pounds of mininguranium, 2.36 million ounces of silver and processing the ore mined, by-products such as silver, uranium oxide and186.37 tonnes of sulfuric acid occur at the Argentinean, South African and Brazilian operations respectively.
Safety
For as by-products.

AngloGold Ashanti people come first and consequently, safety remained the highest priority for the company. AngloGold Ashanti will continue to strive to improve its safety performance across its global asset base and this focus continued in 2010. The company’s approach to managing risk and enabling employees to work safely in a supportive work environment is based on a new conversational culture, where many voices participate and make a meaningful contribution to designing the way in which the company works and protects itself from both known and unexpected risks. The success of this approach depends on four key factors — leadership; engagements; systems and learning. For these factors to be effective, they need to occur in an enabling environment. The focus on safety transformation process is on moving the organization towards a culture of engagement and learning that stimulates awareness of the nature of risk.

It is with much regret that the company reports that 15 employees lost their lives in work related accidents in 2010 (2009: 16 fatalities). AngloGold Ashanti remains focused on decreasing the long-term trend of fatal accidents.
Operational review
Given the focus on optimizing operational performance and maintaining costs, AngloGold Ashanti continued to investinvested significantly in capital expenditure.expenditure as the group is building and developing new projects in Continental Africa (Kibali and Mongwbalu in the DRC), Australia (Tropicana), Americas (Cripple Creek & Victor expansion in the US and other projects in Brazil) and South Africa (most notably Mponeng). Capital expenditure, including equity accounted joint ventures, for the yearin 2012 amounted to $1,015$2,154 million (2009: $1,027(2011: $1,527 million).

56


Safety

Regrettably, there were 18 fatalities across the group’s operations in 2012. The all injury frequency rate improved to 7.72 per million hours worked compared to 9.76 in 2011 and 11.50 in 2010.

OPERATIONS AT A GLANCEfor the years ended December 31

                                                             
  Attributable tonnes              Attributable gold  Total cash costs  Attributable Capital Expenditure 
  treated/milled (Mt)  Average grade recovered (g/t)  Production (000oz)  ($/oz)  ($m) 
  2010  2009  2008  2010  2009  2008  2010  2009  2008  2010  2009  2008  2010  2009  2008 
 
SOUTH AFRICA
                                                            
Vaal River
                                                            
Great Noligwa  0.7   0.9   1.4   5.99   5.73   7.33   132   158   330   894   791   458   24   24   26 
Kopanang  1.6   1.6   1.6   6.13   6.74   6.82   305   336   362   613   408   348   61   58   47 
Moab Khotsong  1.0   0.8   0.6   9.03   9.36   9.31   292   247   192   586   421   375   120   104   89 
Tau Lekoa  0.6   1.2   1.2   3.32   3.32   3.58   63   124   143   905   718   524   10   17   18 
Surface operations  10.2   9.7   7.9   0.54   0.53   0.36   179   164   92   486   378   446   3   3   1 
West Wits
                                                            
Mponeng  1.7   1.9   1.9   9.48   8.66   10.02   532   520   600   452   331   248   122   109   86 
Savuka  0.1   0.2   0.3   5.30   5.45   6.28   22   30   66   1,136   1,133   424   9   13   11 
TauTona(1)
  1.1   1.5   1.6   7.01   7.29   8.66   259   218   314   699   532   373   75   57   60 
 
CONTINENTAL AFRICA
                                                            
Ghana
                                                            
Iduapriem  3.4   3.4   3.5   1.70   1.72   1.76   185   190   200   778   658   625   17   28   54 
Obuasi(1)
  2.6   4.6   5.6   5.16   5.18   4.37   317   381   357   760   630   636   109   94   112 
Non-controlling interests and exploration(6)
                                      1   2   2 
Guinea
                                                            
Siguiri (85 percent)  8.8   8.8   8.6   0.97   1.11   1.20   273   316   333   656   513   468   10   22   18 
Non-controlling interests and exploration(6)
                                      2   4   4 
Mali
                                                            
Morila (40 percent)(5)
  1.7   1.7   1.7   1.70   2.47   3.08   95   137   170   716   526   424   1   4   1 
Sadiola (41 percent)(4)(5)
  1.8   1.7   1.6   2.04   2.52   3.42   118   135   172   686   489   401   8   4   3 
Yatela (40 percent)(3)(5)
  1.2   1.1   1.1   1.23   3.62   2.66   60   89   66   817   326   621   2   1   3 
Namibia
                                                            
Navachab  1.5   1.3   1.5   1.8   1.58   1.43   86   65   68   721   677   559   14   20   12 
Tanzania
                                                            
Geita  4.7   4.5   4.3   2.36   1.89   1.92   357   272   264   697   985   814   38   19   53 
Democratic Republic of Congo
                                                            
Kibali (45 percent)(5)
                                      30       
Other                                      2       
 
AUSTRALASIA
                                                            
Australia
                                                            
Boddington (33.33 percent)                                         146   419 
Sunrise Dam(2)
  3.6   3.9   3.8   3.22   2.87   3.46   396   401   433   692   631   559   29   31   19 
Tropicana (70 percent)                                      10       
Exploration and other                                      1       
 
AMERICAS
                                                            
Argentina
                                                            
Cerro Vanguardia (92.5 percent)
  1.0   0.9   0.9   6.11   6.51   5.44   194   192   154   366   359   617   38   17   15 
Non-controlling interests and exploration(6)
                                      3   1   1 
Brazil
                                                            
AGA Mineraçáo(1)
  1.6   1.5   1.4   7.21   7.02   7.62   338   329   320   444   347   322   142   84   69 
Serra Grande (50 percent)  0.6   0.5   0.4   4.05   4.52   6.85   77   77   87   481   429   299   26   33   20 
Non-controlling interests and exploration(6)
                                      29   36   22 
United States of America
                                                            
Cripple Creek & Victor(3)
  20.6   18.7   22.1   0.43   0.46   0.49   233   218   258   500   371   310   73   87   27 
 

   Attributable tonnes
treated/milled (Mt)
  Average grade
recovered (g/t)
  

Attributable gold

production (000oz)

  

Total cash costs

($ per ounce)

  Attributable capital
expenditure ($m)
 
   2012  2011  2010  2012  2011  2010  2012  2011  2010  2012  2011  2010  2012  2011  2010 

SOUTH AFRICA

                       

Vaal River

                       

Great Noligwa

  0.5    0.5    0.7    5.72    5.58    5.99    84    94    132    1,226    1,191    894    27    29    24  

Kopanang

  0.9    1.5    1.6    5.40    6.47    6.13    164    307    305    1,018    684    613    93    92    61  

Moab Khotsong

  0.6    0.9    1.0    8.16    9.39    9.03    162    266    292    1,043    688    586    159    147    120  

Tau Lekoa(1)

  -    -    0.6    -    -    3.32    -    -    63    -    -    905    -    -    10  

Surface operations

  10.8    10.7    10.2    0.42    0.48    0.54    144    164    179    833    665    486    8    5    3  

Mine Waste Solutions(2)

  7.2    -    -    0.12    -    -    28    -    -    1,036    -    -    7    -    -  

West Wits

                       

Mponeng

  1.3    1.6    1.7    9.40    9.71    9.48    405    500    532    640    547    452    194    172    122  

Savuka

  0.2    0.2    0.1    6.09    6.69    5.30    37    49    22    1,027    857    1,136    20    8    9  

TauTona(3)

  0.8    1.0    1.1    7.63    7.55    7.01    189    244    259    921    816    699    73    79    75  

CONTINENTAL AFRICA

                       

Ghana

                       

Iduapriem

  4.6    4.3    3.4    1.22    1.44    1.70    180    199    185    922    839    778    95    73    17  

Obuasi(3)

  2.1    2.0    2.6    4.79    4.82    5.16    280    313    317    1,189    859    760    185    132    109  

Guinea

                       

Siguiri (85 percent)

  10.1    9.7    8.8    0.76    0.79    0.97    247    249    273    935    871    656    28    15    10  

Mali

                       

Morila (40 percent)(5)

  1.8    1.8    1.7    1.41    1.70    1.70    81    99    95    765    818    716    1    1    1  

Sadiola (41 percent)(5)

  1.9    2.0    1.8    1.64    1.90    2.04    100    121    118    1,220    835    686    37    14    8  

Yatela (40 percent)(4)(5)

  1.1    1.1    1.2    1.06    1.04    1.23    29    29    60    1,793    1,483    817    2    1    2  

Namibia

                       

Navachab

  1.4    1.4    1.5    1.59    1.46    1.80    74    66    86    1,014    939    721    15    48    14  

Tanzania

                       

Geita

  4.8    3.9    4.7    3.47    3.98    2.36    531    494    357    652    488    697    81    58    38  

AUSTRALASIA

                       

Australia

                       

Sunrise Dam

  3.4    3.6    3.6    2.39    2.16    3.22    258    246    396    1,178    1,362    692    35    27    29  

AMERICAS

                       

Argentina

                       

Cerro Vanguardia (92.5 percent)

  1.7    1.0    1.0    6.48    6.23    6.11    219    196    194    644    403    366    70    73    38  

Brazil

                       

AGA Mineração(3)

  2.2    1.7    1.6    6.07    7.43    7.21    388    361    338    711    571    444    162    259    142  

Serra Grande(6)

  0.9    0.6    0.6    3.36    3.59    4.05    98    67    77    827    851    481    33    22    26  

United States of America

                       

Cripple Creek & Victor(4)

  20.9    20.3    20.6    0.40    0.39    0.43    247    267    233    640    569    500    100    67    73  
(1)

Sold effective August 1, 2010.

(2)

Effective July 20, 2012, AngloGold Ashanti acquired 100 percent of First Uranium (Pty) Limited which, owns MWS.

(3)

The yields of TauTona, Obuasi and AGA Mineraçáão represent underground operations;operations.

(2)(4)The yield of Sunrise Dam represents open-pit operations;
(3)

The yields of Yatela and Cripple Creek & Victor reflect recoverable gold placed/tonnes placed from heap leach operations. The remaining 33 percent interest in Cripple Creek & Victor was acquired effective

(5)

Equity-accounted investments.

(6)

Effective July 1, 2008;

(4)Prior2012 AngloGold Ashanti increased its holding from 50 percent to December 29, 2009 AngloGold Ashanti’s shareholding in Sadiola was 38 percent;100 percent.
(5)Equity-accounted investments;
(6)Non-controlling interest and exploration.

57Rounding of figures may result in computational discrepancies.


SOUTH AFRICA
(GRAPHIC)

LOGO

AngloGold Ashanti’s South African operations comprise six deep-level mines and one surface operation.operations including MWS. They are:

The Vaal River operations Great Noligwa, Kopanang, Moab Khotsong and the surface sources operations. The fourth deep-level mine in this region, Tau Lekoa, was sold during the course of the year;operations; and

The West Wits operations Mponeng, Savuka and TauTona.

    Gold production
(000oz)
   

Average number of  

employees  

 

  Operations

  

  1.   South Africa

    

        Vaal River

    

        Great Noligwa

   84     3,063    

        Kopanang

   164     6,014    

        Moab Khotsong

   162     6,645    

        Surface operations

   144     1,147    

        Mine Waste Solutions(1)

   28     727    

        West Wits

    

        Mponeng

   405     6,262    

        Savuka

   37     1,157    

        TauTona

   189     4,472    
           

Together,(1)

On July 20, 2012, AngloGold Ashanti acquired First Uranium (Pty) Limited, which owns MWS. MWS is a recently commissioned retreatment operation in South Africa’s Vaal River area in the immediate vicinity of AngloGold Ashanti’s other tailings facilities.

South Africa Key Statistics

    Unit  2012  2011  2010  

  Operation

        

  Tonnes treated/milled

  Mt  22.3  16.4  17.0  

  Pay limit

  oz/t  0.40  0.54  0.53  
  g/t  12.41  11.98  12.02  

  Recovered grade

  oz/t  0.219  0.232  0.212  
  g/t  7.50  7.95  7.28  

  Gold production

  000oz  1,213  1,624  1,784  

  Total cash costs(1)

  $/oz  873  695  598  

  Total production costs(1)

  $/oz  1,101  920  819  

  Capital expenditure

  $m  619  549  430  

  Safety

        

  Number of fatalities

    11  9  10  

  AIFR

  Per million hours worked  13.24  15.57  16.69  

  People

        

  Average no of employees: Total

    34,186  32,082  35,660  

Permanent employees

    29,740  28,176  31,723  

Contractors

     4,446  3,906  3,937  

(1)

Total cash costs and total production costs are non-GAAP measures. For further information on these operations produced 1.78 million ounces of gold in 2010, or 39 percent of groupnon-GAAP measures, see “Item 5A – Operating Results – Total cash costs and total production and 1.46 million pounds of uranium as a by-product. The South African operations employed 35,660 people in 2010.costs”.

Performance in the South Africa Region in 2012

Safety and health

Regrettably, in the South Africa region, there were 11 fatalities in 2012 (2011: 9). The number of fatalities remains of serious concern to the company. TauTona achieved 4 million fall-of-ground fatality free shifts in November and Kopanang achieved 1 million fatality free shifts in December, both notable achievements. For the region as a whole, an all injury frequency rate of 13.24 per million hours worked was reported as compared to 15.57 in 2011.

Production

The South Africa Region milled 22.3 million tonnes of ore in 2012, up by 36 percent on the previous year, primarily due to the acquisition of MWS effective July 20, 2012. The Vaal River operations accounted for 582,000 ounces (48 percent) of the South Africa Region’s production and the West Wits operations for 631,000 ounces (52 percent). Combined, this was equivalent to 31 percent of group production. In addition, the Vaal River operations produced 1.21 million pounds of uranium as a by-product.

Total cash costs for the South Africa region were $873 per ounce, compared with $695 per ounce in 2012. Mponeng, with a cash cost of $640 per ounce, was the lowest cost producer in the region with Great Noligwa, which is approaching the end of its operating life, being the highest at $1,226 per ounce. Unit cost increases were largely influenced by reduced production, and higher wages and input prices (energy and fuel). The primary cost components in 2012 were: labor $363 per ounce; consumables $253 per ounce; services $68 per ounce; and other inputs $189 per ounce.

The operating environment in South Africa remained challenging, with safety-related stoppages continuing to be disruptive, especially in the first half of the year. An industry-wide strike which started in the third quarter and continued into the fourth quarter, halted all mines and plants in South Africa for about six weeks. The total loss of production as a result of the strike and the slow ramp-up to full production, necessitated by geotechnical concerns resulting from the stoppage, was about 235,000 ounces. Seismic activity at the West Wits operations was also problematic and geological limitations, coupled with lower mining grades at the Vaal River operations and above-inflation cost pressure, presented an ongoing challenge.

Capital expenditure

Capital expenditure in the South Africa Region totalled $619 million, an increase of 12.7 percent on the $549 million spent in 2011. The bulk of this was spent at Mponeng ($194 million), Moab Khotsong ($159 million), Kopanang ($93 million) and TauTona ($73 million).

People

The South Africa operations employed an average of 34,186 people during the year (2011: 32,082), of whom 4,446 (13 percent) were contractors and 29,740 (87 percent) permanent employees. This was equivalent to 52 percent of the group’s total workforce. Productivity per employee for the year was 4.19 ounces/total employees costed (2011: 5.85 ounces/total employees costed) – the lowest in the group – a function of work stoppages, decreasing grades and the increasing labor intensity of deep level underground mining operations in South Africa.

Environment

The reduction in reportable environmental incidents in 2010 and 2011 was maintained in 2012, with most of these incidents in 2012 taking place at the newly acquired MWS operations. Since taking ownership of MWS in July 2012, considerable resources have been dedicated to ensuring this asset meets AngloGold Ashanti’s environmental operating standards. The potential for inter-mine flooding and water legacy issues continued to be environmental challenges.

Ore reserve

At December 31, 2012, South Africa had a total attributable Ore Reserve of 31.57 million ounces (2011: 32.43 million ounces), equivalent to 43 percent of the group’s Ore Reserve.

Growth

Notable progress was made with the Mponeng deepening below 120 level project, which will extend Mponeng’s life of mine. The first phase of this project, which accesses the VCR, is on track to begin production in April 2014. Phase 2, which will access the CLR below the 120 level, was approved by the AngloGold Ashanti board in March 2012. Infrastructure development is under way with production from the second phase scheduled to begin in 2016.

The Moab Khotsong business plan, without growth projects, is expected to produce some 3 million ounces of gold. Zaaiplaats will provide additional ounces and serve as a gateway for opportunities beyond the initial target block. Phase 1 of the Zaaiplaats project, approved in July 2010 and currently in implementation, is dedicated to establishing the infrastructure for Phase 2, which will create a drilling platform to increase geological confidence within the greater Zaaiplaats orebody while providing some initial gold production. Phase 3 is currently in prefeasibility study phase. A full study, to begin in the first quarter of 2013 and to run for about a year, includes various options of accessing the orebody through either Moab Khotsong or Kopanang, while accessing other mining blocks adjacent and contiguous to Project Zaaiplaats.

CONTINENTAL AFRICA

LOGO

AngloGold Ashanti has eight mining operations in its Continental Africa region:

Iduapriem and Obuasi in Ghana;

Siguiri in Guinea;

Morila, Sadiola and Yatela in Mali;

Navachab in Namibia; and

Geita in Tanzania.

    Gold production
(000oz)
   Average number of    
employees    
 

  Operations

    

  1.   Ghana

    

Iduapriem

   180     1,549      

Obuasi

   280     5,373      

  2.   Guinea

    

Siguiri

   247     3,643      

  3.   Mali

    

Morila

   81     319      

Sadiola

   100     783      

Yatela

   29     407      

  4.   Namibia

    

Navachab

   74     953      

  5.   Tanzania

    

Geita

   531     3,594      

Continental Africa - Key Statistics

    Unit  2012  2011  2010  

  Operation

        

  Tonnes treated/milled

  Mt  27.8  26.3  25.7  

  Pay limit

  oz/t  0.041  0.036  0.040  
  g/t  1.273  1.235  1.371  

  Recovered grade

  oz/t  0.055  0.055  0.052  
  g/t  1.70  1.87  1.79  

  Gold production

  000oz  1,522  1,570  1,491  

  Total cash costs(1)

  $/oz  911  752  720  

  Total production costs(1)

  $/oz  1,093  960  872  

  Capital expenditure

  $m  712  418  232  

  Safety

        

  Number of fatalities

    5  3  5  

  AIFR

  Per million hours worked  2.26  3.03  5.26  

  People

        

  Average no of employees: Total

    16,621  16,539  15,761  

Permanent employees

    10,014  9,783  9,684  

Contractors

     6,607  6,756  6,077  

(1)

Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A – Operating Results – Total cash costs and total production costs”.

Safety

Regrettably, in the Continental Africa Region, there were five fatalities in 2012 (2011: 3), at Obuasi (2) and Iduapriem (1) in Ghana, at Geita (1) in Tanzania and at Mongbwalu (1) in the DRC. The all injury frequency rate for the region improved to 2.26 per million hours worked in 2012 from 3.03 in 2011. Full investigations into the fatal accidents have been conducted and steps taken to mitigate their re-occurrence.

Production

Combined gold production from these operations decreased to 1.52 million ounces in 2012 (2011: 1.57 million ounces), equivalent to 39 percent of group production. The most significant contributors to the region’s production were Geita (35 percent), Obuasi (18 percent), Siguiri (16 percent) and Iduapriem (12 percent).

Total cash costs rose by 21 percent to $911 per ounce, (2011: $752 per ounce), largely as a result of poor performance at Obuasi, where the development contractor was replaced during the fourth quarter; and rising costs at Sadiola, where recoveries have suffered as mining moves from oxide to sulfide ore.

Capital expenditure

Total capital expenditure for the region was $712 million (2011: $418 million), an increase of 70 percent. The bulk of this was spent at Obuasi ($185 million) and Kibali ($263 million).

People

The region employed an average of 16,621 people in 2012 (2011: 16,539 people) made up of 10,014 (60 percent) permanent employees and 6,607 (40 percent) contractors. The average level of productivity for the region was 10.97 ounce per total employees costed, with productivity the highest at Morila (35.72 ounces per total employees costed) and Geita (19.20 ounces per total employees costed) mines.

Environment

One of the most significant challenges in this region in recent years has been the management of water, particularly in respect of legacy issues. The completion of a new tailings dam at Iduapriem and commissioning of two water treatment plants at Obuasi in Ghana have significantly improved water management, and enabled the mine to comply with permitting frameworks.

Ore Reserve

The total attributable Continental Africa Region Ore Reserve is 27.60 million ounces (2011: 28.02 million ounces). This amounts to 37 percent of the group’s Ore Reserve.

Growth

Work on a decline access to reach a number of active mining blocks is currently expected to start in 2013 and should start delivering production within about 12 months. In addition, investigations have begun into a new surface decline down to the 50 level to access Obuasi Deeps. Open-pit mining has already started at the Sibi pit. Again some economies of scale are expected from the use of the existing tailings storage facility (TSF), which is stable and has adequate capacity up to 2018.

The Sadiola Sulphide Project (SSP) was delayed by the coup in Mali during the year. Critical to its progress was the conclusion of a power purchase agreement in November. The SSP is designed to provide the operation with access to deeper more conformable sulfide material and will also absorb some skills and expertise from the Yatela operation, as it reaches the end of its life.

AUSTRALASIA

LOGO

    Gold production
(000oz)
   

Average number of  

employees  

 

  Operations

    

  1.   Australia

    

        Sunrise Dam

   258     494    

AngloGold Ashanti’s Australaisian assets comprise the wholly owned Sunrise Dam and the 70 percent-owned Tropicana Gold Project which was under construction during 2012.

Australasia - Key Statistics

    Unit  2012  2011  2010  

  Operation

        

  Tonnes treated/milled

  Mt  3.4  3.6  3.6  

  Pay limit

  oz/t  0.08  0.10  0.14  
  g/t  2.42  3.00  4.32  

  Recovered grade

  oz/t  0.070  0.063  0.099  
  g/t  2.39  2.16  3.40  

  Gold production

  000oz  258  246  396  

  Total cash costs(1)

  $/oz  1,178  1,362  692  

  Total production costs(1)

  $/oz  1,310  1,528  773  

  Capital expenditure (including Tropicana)

  $m  355  102  40  

  Safety

        

  Number of fatalities

        –  

  AIFR (including Tropicana)

  Per million hours worked  6.33  18.11  13.10  

  People

        

  Average no of employees: Total

    494  509  494  

Permanent employees

    110  101  93  

Contractors

     384  408  401  

(1)

Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A – Operating Results – Total cash costs and total production costs”.

Safety and health

Safety performance continued to be an area of focus with no fatalities reported. The AIFR improved to 6.33 per million hours worked (2011:18.11).

Production

Production from Australasia rose by 5 percent to 258,000 ounces in 2012 as operations at Sunrise Dam recovered from flood-related disruption (excessive rainfall, pit flooding and pit-wall failure) the previous year. Total cash costs decreased by 14 percent to $1,178 per ounce (2011: $1,362 per ounce) as volumes rose. An insurance payout of A$30 million related to the 2011 pit wall failure was offset against cash costs in 2012. Cash costs during the year were also positively impacted by improved grades from the North Wall Cutback area of the pit. The region contributed 6 percent to group production in 2012.

Capital expenditure

Total capital expenditure at Sunrise Dam was $35 million. This amount excludes expenditure at Tropicana of $315 million.

People

A total of 494 people (2011: 509 people), 110 (22 percent) permanent employees and 384 contractors (78 percent) were employed at Sunrise Dam in 2012. Productivity continued to be high, reporting 43.46 ounces per total employees costed in 2012 (2011: 38.93 ounces per total employees costed), the highest level in the group.

Skills shortages remain an area of concern in the region and are a driver of high employee turnover and costs. Efforts have been made to extend employment to local indigenous people and the community engagement team works closely with the human resources department to generate training and employment opportunities, address employee retention, mentor and support, and to provide supervision and leadership.

Environment

Energy is becoming a challenging global factor and Sunrise Dam is participating in a regional plan to integrate renewable energy sources such as gas, wind, solar thermal, biomass and solar panels, thereby reducing its reliance on non-renewable energy and lessening AngloGold Ashanti’s carbon footprint. Australia has taken a firm stance on environmental legislation and has imposed stricter emission limits and carbon pricing mechanisms. The Clean Energy Future Scheme, which came into effect from July 2012, introduced a carbon pricing scheme to regulate carbon emissions. AngloGold Ashanti will be required to pay A$23 per tonne of CO2 generated. This is due to increase by A$2.5 per tonne annually until 2015, from when it will be controlled by a market trading scheme. AngloGold Ashanti is actively engaging with the Australian government on the balancing of profitable business practices with responsible environmental strategies to overcome these adverse factors.

Ore reserve

At the end of 2012, the total attributable Ore Reserve for the Australasia Region was 3.92 million ounces (2011: 4.26 million ounces). This makes up around 5 percent of the group’s Ore Reserve.

Growth

Attributable production for the region will increase by the end of 2013 as Tropicana comes on stream. Mining of the Crown Pillar from the base of the Sunrise Dam pit will contribute high- grade ore to mill feed as the operation focuses on lifting underground ore production rates over 2 million tonnes per annum. Brownfields drilling at Sunrise Dam is targeting extensions to the Vogue discovery located below the currently mined Cosmo and adjacent Dolly underground domains. Vogue remains open along strike and at depth and offers an opportunity for either extensive bulk or selective mining close to existing underground mine infrastructure. At Tropicana a prefeasibility study to examine the potential open pit and underground development options at Havana Deeps is expected to be completed in the second half of 2013. At this time the Ore Reserve for the mine will be updated.

THE AMERICAS

LOGO

The Americas is an important growth area for AngloGold Ashanti with operations in Argentina, Brazil and the United States.

 

 
   Gold production
(000oz)
   Average number of  
employees  
 

 

 

  Operations

    

  1.    Argentina

    

         Cerro Vanguardia

   219     1,884    

 

 

  2.    Brazil

    

         AGA Mineração

   388     4,239    

         Serra Grande

   98     1,081    

 

 

  3.    United States

    

         Cripple Creek & Victor

   247     692    

 

 

Americas - Key Statistics

    Unit       2012       2011       2010   

  Operation

              

  Tonnes treated/milled

   Mt       25.7       23.6       23.8    

  Pay limit

   oz/t       0.024       0.026       0.025    
   g/t       0.822       0.891       0.843    

  Recovered grade

   oz/t       0.034       0.034       0.034    
   g/t       1.16       1.15       1.17    

  Gold production

   000oz       952       891       842    

  Total cash costs(1)

   $/oz       759       601       501    

  Total production costs(1)

   $/oz       1,017       841       707    

  Capital expenditure

   $m        382        452        309    

  Safety

              

  Number of fatalities

       1       2       –    

  AIFR

   Per million hours worked        4.34        6.33        5.66    

  People

              

  Average no of employees: Total

       7,896       7,389       6,582    

  Permanent employees

       5,509       5,273       4,737    

  Contractors

           2,387        2,116        1,845    

(1)

Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A – Operating Results – Total cash costs and total production costs”.

Safety and health

Regrettably, there was a fatal accident at the Cerro Vanguardia mine in January 2012, the first fatal accident at the mine since July 2002. The all injury frequency rate for the region improved to 4.34 per million hours worked.

Production

Combined production from the operations in this region increased by 7 percent to 952,000 ounces (2011: 891,000 ounces) in 2011. These operations now contribute about 24 percent towards group production (2011: 21 percent).

The increase in total cash costs was largely a result of inflationary effects in all countries, especially Argentina; lower by-product credits in Argentina and Brazil; higher costs for equipment maintenance and some contract and technical services in Argentina and the United States; and higher labor and operational development costs in Brazil. The Americas Region had the lowest regional cost within AngloGold Ashanti with CC&V ($640 per ounce) and Cerro Vanguardia ($644 per ounce) being the lowest and third lowest, respectively, of all group operations.

Capital expenditure

Capital expenditure was largely invested in the implementation of various projects such as the Córrego do Sítio Sulphide project in Brazil (14 percent), the MLE/MLE2 projects in the United States (22 percent), and the heap leaching project in Argentina (5 percent). Other mine development in Argentina and Brazil (19 percent), and other capital expenditure (38 percent) complete the balance of the capital investments in the region.

People

An average of 7,896 people in total were employed in the region during the year, 7 percent more than the 7,389 people employed in 2011. This number was made up of 5,509 (70 percent) permanent employees and 2,387 (30 percent) contractors. This figure excludes the more than 1,200 people employed in Colombia and at the greenfield operations in the region. The Americas Region employs around 12 percent of group employees.

Productivity at these operations is relatively high, at 17.47 ounces per total employees costed in 2012 (2011: 20.70 ounces per total employees costed).

Environment

AGA Mineração won the Environmental Management Award presented by the state of Minas Gerais. Severe drought again had a significant impact on production at CC&V during the year.

Ore reserve

At the end of 2012, the total attributable Ore Reserve for the Americas Region, was 11.01 million ounces (2011: 10.89 million ounces). This makes up around 15 percent of the group’s Ore Reserve.

Growth

Plans are under way to increase production from the Americas Region. At the Brazilian operations, the Córregio do Sítio sulfide project at AGA Mineração is scheduled to reach full production in 2013, with optimization programs to be introduced at the Cuiabá and Lamego operations. In the United States at CC&V, following approval of the second mine life extension project, development has begun.

REVIEW OF PROJECTS

LOGO

In addition to the Mponeng Below 120 project and the Zaaiplaats project in Moab Khotsong, both the South Africa, other growth projects not yet in 2010production are:

Projects

Continental Africa: Democratic Republic of the Congo (DRC)

1

Kibali

2

Mongbwalu

Australasia: Australia

3

Tropicana

Americas: Colombia

4

Gramalote

5

La Colosa

Continental Africa: Kibali, DRC

Description

The Kibali greenfields project is currently in the development and construction phase, after receiving board approval in May 2012. Pre-development work began in early 2011 and first gold production is anticipated in late 2013. The Kibali mine will comprise an integrated open-pit and underground mining operation, feeding a larger 6 million tonnes per annum processing plant which will include a full flotation section for treating sulfide ore. The complex will ultimately be supplied by four hydropower stations supported by thermal power during low rainfall periods and as back-up. The development and construction of Kibali has been divided into two phases:

Phase 1 includes the initial open-pit operations, metallurgical plant, the first phase of the tailings storage facility, the first of the hydropower stations, the back-up power plant and all shared infrastructure.

Phase 2 extends over the entire four-year period, and focuses mainly on the development of the underground mine, including a twin decline and vertical shaft system.

Location

Kibali lies in the northeastern area of the DRC, adjacent to the town of Doko, a staging point for the project and some 9 kilometers from the town of Watsa and 180 kilometers by road from Arua, on the Ugandan border.

Ownership structure

Joint venture between AngloGold Ashanti (45 percent), Randgold Resources Limited (45 percent) with Société des Mines d’Or de Kilo-Moto (SOKIMO), a state-owned gold company owning the balance. Randgold Resources is the operator and project manager.

Kibali – performance in 2012

Safety and health

Lost-time injuries are receiving continued focus with continuous safety training and awareness initiatives in place. A transport management plan has been implemented to address vehicle safety, speeding and dust suppression. The Congolese Safety Officers will be utilized to help monitor and enforce vehicle safety.

Malaria incidence remains high, with 2,951 cases reported for the project to date. The Malaria Vector Control program has been updated to include bush clearing and bi-monthly spraying of all accommodation and work sites. A medical outpost facility has been established and is operating at the remote Nzoro camp.

Mining and processing developments

2012 was $430key in the development of Kibali, and was marked by a significant ramp- up in construction activity. Mining in the open-pit began in July 2012 and the boxcut for the project’s underground twin-decline section is nearing completion. The mill and hydro-turbine manufacture is complete. The development of twin-declines and the sinking of the vertical shaft for the underground mine is tracking behind schedule, while the additional open-cut satellite ore source potential could offset the risk of delays. Two 7 megawatt mills were delivered to the Kibali mine in November 2012. In parallel with the construction of the metallurgical plant which began in August 2012, construction of the steelwork for the CIL plant and the primary crusher and conveyor facilities is progressing. Additional earthwork capability has been mobilized to address delays in site establishment. Capital expenditure was $263 million (2009: $395 million)(45 percent attributable) during the year and increased significantly in the fourth quarter with the start of decline activities and mobilization of the shaft and metallurgical infrastructure.

Exploration developments

Grade control drilling program continued during the year at the KCD deposit, with 91,734 meters completed. Drilling results confirmed areas of high grade shoots.

Continental Africa: Mongbwalu, DRC

Description

Preparatory work at this greenfield project has been completed. Belgian mining companies operated on a relatively small scale in the area for about 50 years before leaving in 1961, while SOKIMO began mining in 1966. The venture held 18 mining licenses which was reduced to 15 licenses totalling 3,784km² after the retrocession to SOKIMO of a total of 1,823km². The Akwé Exploration Licence (399km²) is being transferred to Ashanti Goldfields Kilo (AGK). The initial project will be designed and built with a view to increasing its size as the aggressive regional exploration program identifies new sources of ore. Further exploration was authorized in early 2013 along with a study to optimize the Mongbwalu project.

Location

Located in northeastern DRC, near to the town of Bunia and to the southeast of the group’s Kibali joint venture project. The concession area is in the highly prospective Kilo gold belt.

Ownership structure

Operated by AGK, a joint venture between AngloGold Ashanti Limited (86.22 percent) and SOKIMO, a state-owned gold mining company.

Mongbwalu – performance in 2012

Safety and health

Safety remains an area of concern and the development of a safety culture is an important area of focus. Among the initiatives undertaken during the year were: daily toolbox talks; inspections; weekly focus topics; helicopter hoist training; hazard and risk management training; gap analysis of all company and contractor vehicles; intermediate incident investigation program; vehicle driving training; and a fit-for-work medical examination process was put in place for all employees and all contractors.

A contractor lost his life, following an incident during 2012.

Indoor residual spraying to combat malaria was started in the camps in July 2012. The Malaria Vector Control program has been updated to include bush clearing and bi-monthly spraying of all accommodation and work sites, and may be extended to communities within the project target area.

Exploration progress and developments

The drilling program has confirmed the prospectivity in the region. Several intersections were encountered with gold grades of more than 7 grams per tonne and four deposits identified within two to three kilometers of the proposed mine. Further drilling is required to ascertain the extent of the orebody and the best means of accessing it. Common plant and infrastructure for a second operation could demonstrate the economies of scale which could precipitate a more profitable operation than was originally planned.

A novel development on site has been the application of portable drill rigs, transported across the concession by helicopter. In terms of environmental impact, this is a positive development, reducing the need for access roads and their rehabilitation, while also improving the effectiveness of the drill rigs, with more meters drilled per rig. Given the topography of the area, along with the dense vegetation, this practice has rendered the area far more accessible than conventional methods.

Australasia: Tropicana, Australia

Description

The Tropicana project is at an advanced stage of construction and development. Mining operations will be conducted from open pit mining of the Tropicana and Havanna deposits while surface infrastructure includes a processing plant, accommodation facilities and telecommunications services. The group’s exploration program in the area is vast, covering 13,500km2 along a strike length of 600 kilometers.

Location

Situated in the highly prospective Western Australia, the Tropicana project lies some 330 kilometers north north-east of Kalgoorlie and is 200 kilometers east of Sunrise Dam.

Ownership structure

70 percent owned by AngloGold Ashanti, with the balance held by joint venture partner in the project, Independence Group NL.

Tropicana – performance in 2012

Safety and health

AIFR at Tropicana further improved to 3.03 per million hours worked in 2012 from 5.55 in 2011. The high lost-time injury frequency rate (LTIFR) incidence in the production area remains a concern and an area of focus in spite of the improvement for the year, with the LTIFR reducing from 5.31 in 2011 to 1.01 in 2012. Further concerted effort is needed in this area to achieve the group’s safety strategy and AIFR objective of less than nine per million hours worked. Continuous safety training and awareness initiatives are in place to drive the required high safety standards throughout the project.

Mining and processing developments

The Tropicana gold project progressed well during 2012, despite external challenges from the competitive construction sector in Western Australia and the pressure this placed on skills. The 220 kilometers-long site access road to site was completed in the first half of the year, as was the sealing and approval for the airstrip. This was followed later in the year by completion of the village. The power station contract was also awarded. The mining contractor was mobilized on site and mining started early in the second half of the year. By the end of the year, all remaining tender contracts had been awarded, all within capital forecast estimates. Capital expenditure was $315 million during the year.

Americas: Gramalote, Colombia

Description

This advanced exploration project is expected to be the first major gold mine development in Colombia, and the group’s first operating gold mine there.

Location

110 kilometers northeast of Medellin in the municipality of San Roque, in the department of Antioquia.

Ownership structure

Joint venture between AngloGold Ashanti (51 percent) and Vancouver-based B2Gold Corporation (49 percent).

Gramalote – performance in 2012

Safety and health

There was a significant improvement in safety performance at Gramalote with the implementation of an array of strategies focused on safe work practices. An AIFR was recorded of 5.65 per million hours worked, a dramatic improvement on the AIFR of 16.14 recorded in 2011. The development of occupational health surveillance systems in Colombia was undertaken in the fourth quarter of 2011.

Mining and processing development

The project prefeasibility study was concluded in the fourth quarter of 2012. While the results of this work demonstrated the social, environment and technical viability of the project, several identified optimizations regarding capital and operating aspects of the project remain to be validated. Accordingly, the project team launched an enhanced engineering phase which continues to validate project enhancement opportunities.

Exploration progress and developments

A total of 23,000 meters of drilling has been completed. This has focused on geotechnical, condemnation and resource conversion. The exploration potential in the district is likely high, with a large tenement position that has only been explored in less than 10 percent of its area. CGL is advancing a comprehensive exploration program led by geophysical and geochemical surveys to assist on defining exploration targets that is expected to confirm the mining district (and project) estimated endowment.

Americas: La Colosa, Colombia

Description

La Colosa, which lies in steep terrain in Colombia’s central Cordillera region, is the largest greenfield discovery made by AngloGold Ashanti. The project is at the prefeasibility stage, currently evaluating alternative mining methods, plant locations and related infrastructure. The drilling program is progressing to define the size and extent of the Mineral Resource that has not been constrained in the northwest and is partially open at depth.

Location

14 kilometers west of the town of Cajamarca, in the department of Tolima.

Ownership structure

Exploration rights wholly held by AngloGold Ashanti.

La Colosa – performance in 2012

Safety and health

There was an improvement in safety performance, with the AIFR declining to 4.19 in 2012 from 19.33 in 2011. Continuous training and leadership involvement will be required to maintain and improve on this success. A health baseline study has been initiated with the goal of ensuring that data is available to design and submit a solid health impact assessment to the authorities, within an environmental impact analysis.

Mining and processing developments

Technical work has been undertaken to collect and analyze the information required for pit optimization, geotechnical and hydrogeological studies. The results are being used for pit design, pit slope stability, risk analysis, and capital and operational expenditure estimates. Trade-off studies of mining methods are in progress and extensive metallurgical test work was conducted in 2012. Comminution test work included tests for high pressure grinding rolls (HPGRs) and semi-autogenous (SAG) grinding. An economic evaluation of HPGR versus SAG milling was completed and indicated the favoured route to be conventional SAG/ball milling. Recovery test work included tests for gravity separation, whole ore leaching and flotation/concentrate leaching. An economic trade-off study indicated the preferred flow sheet to be whole ore leaching, with limited benefits of gravity separation. The process engineering phase started in the fourth quarter of 2012.

Developments during the year

Project efforts in 2012 continued to be driven by expansion of the Mineral Resource coupled with on-going efforts to address key social issues within the various stakeholder groups. Key decisions related to ore transportation and the relocation of infrastructure facilities out of the forest reserve area have dramatically changed the definition of the project’s direct and indirect area of influence, and the scope of the environmental and social studies. Additional trade-off studies were necessary to optimize estimates of capital and operating expenditure.

Technical evaluations also continued with the collection and analysis of geotechnical and hydrogeological information required for mine definition, trade-off studies on mining methods and alternatives, metallurgical test work and process definition, and infrastructure design.

GLOBAL EXPLORATION

LOGO

GREENFIELDS EXPLORATION

AngloGold Ashanti holds a total of 69,565km2 of greenfield tenements over which exploration activities are undertaken through joint ventures, strategic alliances or as wholly-owned ground holdings.

During 2012, exploration activities were conducted in 14 countries with over 364,994 meters of diamond, reverse circulation and aircore drilling completed, compared to 213,441 meters in 2011. Drilling programs aimed to test new high-priority targets in Australia, Brazil, Tanzania, the DRC and the Solomon Islands, and continued to delineate existing discoveries in Guinea, Egypt and Colombia.

In the Americas, the principal area of focus has been to advance exploration on a number of key projects in Colombia, including an advanced-stage diamond drill campaign at the Nuevo Chaquiro target, Quebradona project (AngloGold Ashanti/B2Gold joint venture). The Nuevo Chaquiro target is a newly identified porphyry-related, copper-gold mineralized system located within the Western Cordillera of Colombia.

In 2012, about 20,700 meters of diamond drilling has tested this porphyry copper and gold mineralized stockwork zone. Long intersections of copper mineralization with gold credits indicate good continuity within the zone and it has been intersected at depths from about 400 meters to over 900 meters below surface.

In Brazil, a joint venture was signed with Graben Mineração to explore its tenement holding in the highly prospective Juruena Belt while generative work continued in Argentina and the United States.

In sub-Saharan Africa, drilling continued to delineate significant mineralization at the Saraya and Kounkoun prospects, both located within 50 kilometers of the Siguiri mine in Guinea. At the Saraya prospect 9,230 meters was drilled to infill and define the extensions of the mineralized zone from which ore-grade mineralization was intersected in several holes. The zone has now been delineated over 1,300 meters in strike and from surface to 200 meters in depth. At Kounkoun about 56,000 meters was drilled with numerous shallow oxide ore-grade gold intersections indicating further good potential. In the DRC and Tanzania, preliminary diamond drill testing of coincident gold-in-soil and geophysical anomalies was completed.

In the Middle East and North Africa, exploration is conducted through a regional strategic alliance with Dubai-based Thani Investments. The alliance has made significant progress in advancing its Hutite orogenic gold discovery in Egypt and has also made further discoveries such as the Pandora epithermal system, in partnership with Stratex International, in Djibouti. Early stage exploration activities continued in both Ethiopia and Eritrea while project generation activities continued in Saudi Arabia where a number of tenement applications have been made.

In the Solomon Islands, the joint venture with XDM Resources Limited has been expanded to include additional projects within the prospective New Georgia Belt, consolidating the island chain. Exploration is now focused on the discovery of large porphyry and epithermal gold deposits. Generative exploration activities were completed at Kele, Mase, Tirua and Paraso while diamond drilling was also completed at Kele, Tirua and Mase.

In Western Australia, the Tropicana joint venture continues to systematically explore the highly prospective Tropicana Belt through auger surface geochemical sampling and follow-up aircore, reverse circulation and diamond drilling. At the wholly owned Viking project, immediately southwest of the Tropicana JV, aircore and diamond drilling at the Beaker prospect has intercepted potentially significant gold mineralisation. In South Australia, diamond drill testing of conceptual iron oxide copper-gold (IOCG) targets was completed at the Coronation Bore prospect, in joint venture with Stellar Resources.

Brownfields exploration

South Africa

A total of 22 surface holes were drilled during the year, six at Moab Khotsong, three at Mponeng (WUDLs) and 12 shallower surface holes were completed to the west of Kopanang, while one is still currently being drilled.

At Moab Khotsong, borehole MGR8 continued advancing its long deflection to the north. It was stopped due to budgetary constraints in the last quarter, but the site was not rehabilitated as the hole will continue as soon as funding is available. The drilling of the long deflection to the south in MGR6 continued. MHH2 advanced to a depth of 2,880 meters and progress was delayed by a series of in-hole technical difficulties. Diamond drilling started at MCY6 and advanced the hole to 1,998 meters. A high speed drilling program started to confirm the structure in the center of the main Zaaiplaats block, borehole MMB6 progressed to 2,541 meters and borehole MMB7 advanced to 1,134 meters.

A new generation, high resolution 3-D seismic survey was completed over the Project Zaaiplaats Phase 3 area.

Three holes are currently being drilled on the WUDLs Mining Rights extension of Mponeng Mine. These holes are all targeting the Ventersdorp Contact Reef. All the holes experienced significant loss of drill fluids and required multiple grouting operations. UD51 by year end had reached a depth of 3,582 meters in the Klipriviersberg lavas. UD59 advanced to 2,446 meters in the Klipriviersberg lavas and UD60 drilled to 1,556 meters.

The drilling of a series of shallow surface holes (500 meters – 1,400 meters) to the west of Kopanang continued during the year. A total of six holes targeting the Ventersdorp Contact Reef and six holes targeting the Vaal Reef were completed during the year.

Argentina

At Cerro Vanguardia, the drilling programs for Mineral Resource expansion and exploration continued during the year. Follow up drilling for vein extensions along strike and at depth was able to expand mill ore. Exploration and Mineral Resource modeling were able to identify opportunities for material to be processed at the heap leach facility. Exploration activities and drilling were completed based on geophysical surveys and target identification studies conducted at the El Volcan project during the year.

Brazil

In the Iron Quadrangle, the Mineral Resource development drilling programs continued at the Cuiabá and Lamego mines with renewed emphasis on support to long-term planning and Mineral Resource definition. The surface drilling programs at the Córrego do Sítio project continued to expand the oxide Mineral Resource, while underground drilling at Córrego do Sítio focused on developing the Sangue do Boi sulfide Mineral Resource for production. Exploration work beyond the production centers included follow up underground drilling at Raposos. Regional exploration programs were conducted at the Pari and Morro da Gloria projects.

At Serra Grande, the second year of fast track exploration program was completed with additional expansion of the Mineral Resource. The program was focused on additions in the Pequizão, Mina Nova, Mina III and Structure NW/Cajueiro targets. Geophysical surveys and soil sampling campaigns continued to be useful methods for target identification in preparation for drilling programs at the Cajueiro, Structure NW and Boa Vista (Votorantim Metais JV) regional targets.

Colombia

Exploration in the Gramalote area was focused on infill drilling to support the update of the Mineral Resource estimation for the Gramalote Central deposit. Drilling programs were also conducted for nearby satellite targets at Monjas West, Trinidad, and El Limon. As part of the prefeasibility study, additional infrastructure and geotechnical drill holes were completed to support highwall design and condemnation drilling for the proposed plant site, waste rock, and tailings storage facilities.

At La Colosa, the Mineral Resource development drilling program continued with four drills operating through most of the year. The geological model was updated during the year to support a significant Mineral Resource addition that came through expansion of the deposit to the northwest and at depth. Other drilling continued as support for site characterization and infrastructure site selection studies.

United States

The Mineral Resource development drilling program continued during the year at CC&V. Work focused on infill drilling to improve the definition of material within the current mine designs that will feed the planned mill facility. Other drilling was directed toward identifying expansion opportunities for the current open pit operations through highwall cutbacks. Selective drilling was also conducted to test deeper targets below or adjacent to planned open pit designs that may provide additional mill feed material potential.

Tanzania

At Geita, Mineral Resource upgrade and extension drilling was completed at the Geita Hill, Nyankanga and Star & Comet operations. Limited pre-resource drilling programs were undertaken to test exploration targets. The infill drilling campaigns aimed at increasing the confidence level of the Mineral Resource base and to allow for Mineral Resource to Ore Reserve conversion. A total of 440 holes for 85,221 meters were completed, with 67,738 samples submitted for gold assay.

As a result of this extensive drilling campaign, positive analytical results were received for holes drilled at Nyankanga Cut 7 OP, Geita Hill East and West, Star & Comet – Ridge 8 Gap, Ridge 8, Nyankanga Block 1 & 2, Kukuluma, Matandani and Area 3 West areas. However, poor analytical results were received for the Geita Hill Waste Dump sterilization program.

Drilling of down-dip extensions outside of the existing Nyankanga pit shell continue to support and extend underground potential at Geita.

Pit-scale structural mapping was completed at Nyankanga, Geita Hill and Star & Comet. This detailed mapping has provided resolution to the understanding of the geological model over the respective areas. Induced polarization (IP), gravity and electromagnetic geophysical surveys were also undertaken during the year and assisted with target generation.

Guinea

At Siguiri, exploration activities focused on the Block 1 license area with a total of 144,908 meters drilled during the year. Infill Mineral Resource drilling of 86,552 meters took place along the main northsouth trending Siguiri mineralized area, as well as an aggressive reconnaissance drilling program of 34,145 meters over soil anomalies and structural targets.

Significant drilling activities took place in the Sintroko-Sokunu, Tailings Facility, Silakoro, Kami- Kossise-Kozan, Sanu Tinti-Eureka-Kalamagna, Balato, and Kintinian areas. Fresh rock drilling centred on the hard rock mineralization potential below the pits of Kami NE, Kozan South, Kalamagna Pit 1, Sanu Tinti and Bidini and confirms the continuation of the mineralized ore zones below the oxide- fresh rock interface. In total, 8,824 meters were drilled for fresh rock exploration purposes.

The target generation program in Block 1 continued to center on IP surveys over selected soil geochemical and structural target areas. IP surveys were completed at Silakoro, Sintroko South and Komatiguiya. Gravity surveys were also completed over Silakoro and Sintroko South target areas. No surface geochemical soil sampling took place.

Ghana

At Obuasi, a total of 12,169 meters was drilled, with 4,805 meters from underground exploration and 7,364 meters from surface exploration activities. Surface exploration focused on the Rusty Monkey target, with 16 holes completed for a total of 5,659 meters.

Underground exploration continued to focus on the BSVS project area below 50 Level, with drilling designed to upgrade the existing Mineral Resource and test the down dip extensions of quartz and sulfide mineralization hosted within the carbonaceous and graphitic shear zones present in the area below Block 10 to -1390RL. Above 50 Level, drilling also commenced in Sansu 3 area during November to upgrade the Mineral Resource in Red Zone 9 area.

Field mapping and sampling to generate drill targets and enhance and refine geological understanding continued throughout the year.

A total of 13,227 meters of drilling was completed at Iduapriem. The focus was on Mineral Resource conversion drilling to facilitate the on-going Iduapriem expansion study, specifically at Block 3W and Blocks 7 and 8. A sterilization drilling program of 3,084 meters was carried out at the proposed location of the Ajopa waste dump from August to October 2012.

The geological modelling of Blocks 1, 2, 3, 3W, 4 and 5 to investigate the potential underground extraction of mineralization below the open pittable Mineral Resource has been completed.

DRC

At Mongbwalu, a total of 30,000 meters of brownfield exploration drilling was carried out. Drilling focused on infill Mineral Resource drilling within the main Adidi-Mongbwalu Mine area. Sterilization drilling was undertaken over both the portal, plant and camp areas. Additionally, over 18,000 meters of greenfield drilling was completed in the year under review. Limited reconnaissance drilling was completed in the Adidi North and Tchangaboli areas.

Total diamond drilling at Kibali was 18,000 meters. At the KCD deposit, a data review identified an area at the down plunge termination of the 5000 lode stope designs that has potential for Mineral Resource conversion and extension. Results to date are encouraging and compare positively with the current interpolated block model values; however, a potential loss was identified in the 3000 lode with some intersections lower than those predicted by the block model. The KCD deposit remains open down plunge and there are further opportunities for the conversion of Inferred Mineral Resource, most notably in the 9000 lode.

Within a 10 kilometer radius of the main Sessenge-KCD deposit, there are a number of satellite deposits which are considered to have significant upside, either having very limited drilling or drilling only to relatively shallow depths. Kombokolo, Gorumbwa, Pakaka, Agbarabo and Mengu Hill are priority targets which form part of the endowment development plan for near mine site targets.

At Gorumbwa, drilling results confirmed the current model and further defined the depletion of underground Mineral Resource by historic mining activities. The drilling has the potential to allow for the conversion of a significant proportion of the current Mineral Resource into Ore Reserve and suggests further open pit potential.

At Mengu Village and Mengu Hill, an 18-hole shallow pitting program was designed and completed in November to test for the up-plunge continuation of mineralization beyond available drill data. Results received to date have confirmed the presence of a significant mineralized system.

Mali

A total of 119,554 meters of reverse circulation (RC) and diamond drilling were completed at Sadiola and Yatela.

At Sadiola, 48,490 meters of RC drilling was concentrated at Tambali, FE Gap, S12, Sadiola NE and the sub-laterite targets of Mandakoto and Sekokoto. Diamond drilling of the deep sulfide targets below the Sadiola Sulphide Project was conducted. Further core drilling focused on sulfide exploration below FE 3 and 4 and Tambali pits and follow-up drilling for geology and structural interpretation at Tabakoto and S12. Sterilization drilling of 9,854 meters was successfully conducted at Tambali and over the proposed TSF and SSP infrastructure.

The S12 target at Sadiola, west of the FE3 pits, was one of the most prospective areas drilled during the year. Good results have been returned from both oxide and shallow sulfide intersections, with further drilling planned. Follow up drilling at Mandakoto confirmed the extension of northeast-southwest mineralization. At Tambali, drilling around the planned pit areas indicates the potential for extension of the current oxide Mineral Resource and sulfide potential at depth.

Exploration at Yatela consisted of 59,192 meters RC drilling at Yatela NE, KW18, Alamoutala, Yatela Diorite, Badji and Yiri. Diamond drilling totaled 2,608 meters. Approximately 11 percent of the RC drilling was conducted over proposed waste dump areas for sterilization purposes.

An IP geophysical survey at Sadiola-Yatela commenced in June and has been partially completed, with some delays experienced due to logistical factors and weather. Hyperspectral core imaging of 93,000 meters of core was completed and will provide alteration based vectors for exploration targeting and predictive metallurgy.

A comprehensive termite mound sampling program was undertaken over the entire Sadiola concession during 2012. The program has been successful in highlighting prospective areas on the lease along the FE trend and northeast extensions of the Sadiola mineralization. Termite mound sampling was also started at Yatela and will continue next year. Portable XRF analysis of all termite mound samples is ongoing to provide multi-element data and identify potential pathfinder elements for target generation.

A three-year research program by the Centre for Exploration Targeting (CET) from the University of Western Australia commenced in early 2012. The objective of this project is to review and enhance the geological understanding of the Sadiola-Yatela deposit. This will inform further exploration programs within the area.

Namibia

At Navachab, 23,741 meters of drilling was completed over several areas, with the emphasis on the expansion project, Main Pit down-plunge extension area, and the Okahandja targets.

Drilling of the expansion project consisted of 7,105 meters diamond drilling for Mineral Resource upgrades and 4,846 meters RC drilling, mainly for sterilization purposes, over the waste dump area. A total of 7,495 meters of diamond drilling was completed in the lower schist down-plunge target at the Main Pit.

Off-mine exploration focused on the Okahandja target area, with 2,127 meters of drilling to test the geophysical and soil geochemical targets generated at Agagia. Soil geochemical sampling was conducted at the Cox Montis target.

Australia

At Tropicana, a revised Mineral Resource estimate was prepared. Open Pit Resources are now reported within an A$1,500 per ounce pit shell. The study will consider the trade-off between open pit and underground mining options and will provide recommendations as to the optimal mining approach. Study work has commenced with metallurgical testing underway and a mining and geotechnical review.

Drilling of 38,336 meters for the Havana Deeps prefeasibility study was completed during the year while 14,221 meters of drilling of near-mine targets continued during the year. Drilling completed on the Havana-Tropicana trend, the Springbok/Hat Trick area and Boston Shaker.

Exploration at Sunrise Dam focused on growing the Mineral Resource base so that Sunrise Dam has the platform from which it can deliver its business plan each year. This was achieved through the specific work that includes:

in-mine exploration (35,739 meters), which extends the known Mineral Resource in areas proximal to existing development; and

Geology

near-mine exploration, which determines an understanding of the potential for Sunrise Dam, through specific geological characterization, and explores the areas around the mine and within enveloping tenure of 2,932 meters. This forms part of the mine life expansion project of 47,569 meters and includes the Vogue Mineral Resource of 28,897 meters.

A total of 115,137 meters was drilled in 420 drill holes. Drilling (66 percent) focused on deep extensions and longer-term Mineral Resource growth of the Vogue, Carey Shear and Astro-Sunrise Shear Lodes, whilst 33 percent of the drilling focused on in-mine exploration and mineral resource extension.

ANGLOGOLD ASHANTI / DE BEERS JOINT VENTURE

In South African Sea Areas (SASA), a drilling program was concluded in February with a total of 87 boreholes drilled. All but 3.5 percent of samples taken over the 260 x 60 kilometers exploration area contained gold. This suggests that the exploration is taking place within a significant gold province but that this search now needs to be narrowed down geologically to target areas of higher potential.

A full review of all data collected to date was conducted by the joint venture around mid-year and a number of work flows were identified for completion prior to a further review.

In Nome, the environmental baseline studies field work was successfully completed and the first draft report issued. Side scan sonar, swath bathymetry and 2D seismics survey were completed (3,997 line kilometers). Interpretation of the geophysical data has been completed and an initial geophysical model developed.

A ship-based sonic core drilling campaign was completed during the summer season and 454 meters of core retrieved. This core was transported to Cape Town where initial logging and sampling has started. A conceptual economic study was completed and indicated that a positive business case was possible.

4C.

ORGANIZATIONAL STRUCTURE

GROUP STRUCTURE

AngloGold Ashanti’s operations are divided into the following regions:

South Africa – operations in Vaal River and West Wits;

Continental Africa – operations in Ghana, Guinea, Namibia and Tanzania and joint venture operations in the DRC and Mali;

Australasia – operation in Australia; and

Americas – operations in Argentina, Brazil and the United States.

The above four regions also correspond to AngloGold Ashanti’s four business segments.

Management of the group is entrusted to AngloGold Ashanti’s executive committee which is chaired by the Chief Executive Officer. See “Item 6.: Directors, executive management and employees”.

Support is provided to the executive committee in managing AngloGold Ashanti’s corporate activities at both the central and local levels. Activities managed centrally include strategic and business planning, marketing, corporate finance, treasury, exploration, technology and innovation, corporate secretarial and corporate affairs. Specialized services directed from the center but managed by local operations include mining, engineering, metallurgy, mineral resource management, safety and health, the environment and human resources.

SUBSIDIARIES

AngloGold Ashanti has investments in principal subsidiaries and joint venture interests, see “Item 19.: Exhibits – Exhibit 19.8 List of AngloGold Ashanti Limited subsidiaries” for details.

4D.

PROPERTY, PLANTS AND EQUIPMENT

AngloGold Ashanti’s operating mines are all accessible by road.

SOUTH AFRICA - GEOLOGY

The Witwatersrand Basin comprises a six-kilometer thick sequence of inter-bedded argillaceous and arenaceous sediments that extend laterally for some 300 kilometers north-east/south-west and 100 kilometers north-west/south-east on the Kaapvaal Craton. The upper portion of the basin, which contains the orebodies, crops out at its northern extent near Johannesburg. Further west, south and east the basin is overlain by up to four kilometers of Archaean, Proterozoic and Mesozoic volcanic and sedimentary rocks. The Witwatersrand Basin is late Archaean in age and is considered to be in the order of 2.7 to 2.8 billion years old.

Gold occurs in laterally extensive quartz pebble conglomerate horizons or reefs, generally less than two meters thick, andwhich are widely considered to represent laterally extensive braided fluvial deposits. Separate fan systems were developed at different entry points and these are preserved as distinct goldfields. There is still much debate about the origin of the gold mineralization in the Witwatersrand Basin. Gold was generally considered to have been deposited syngenetically with the conglomerates, but increasingly an epigenetic origin theory is being supported. Nonetheless, theThe most fundamental control to the gold distribution in the Basin remains the sedimentary features, such as facies variations and channel directions. Gold generally occurs in native form often associated with pyrite and carbon, with quartz being the main gangue mineral.

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Operations in the South Africa region are powered by electricity from Eskom Holdings Limited which supplies 95 percent of the electricity used in South Africa.

Vaal River operations

Description:

The Vaal River operations consist of Great Noligwa, adjoins Kopanang, and Moab Khotsong and is located close to the town of Orkney near the Vaal River. The Vaal Reef, the primary reef, and the Crystalkop Reef, a secondary reef, are mined here.

This mining operation consists of a twin-shaft system and operates over eight main levels at an average depth of 2,400 meters below surface.
Given the geological complexity of the orebody at Great Noligwa, a scattered mining method is employed. The mine shares a milling and treatment circuit with Moab Khotsong and Kopanang, which applies conventional crushing, screening, SAG grinding and carbon-in-leach (CIL) processes to treat the ore and extract gold.
Geology:as well as surface operations.

Geology

In order of importance, the reefs mined at the Vaal River operations are the Vaal Reef, the VCR and the “C” Reef:

The Vaal Reef contains approximately 85 percent of the reserve tonnage with mining grades between 10 and 20g/t and comprises a series of oligomictic conglomerates and quartzite packages developed on successive unconformities. Several distinct facies have been identified, each with its unique gold distribution and grade characteristic.

The VCR has a lower grade than the Vaal Reef, and contains approximately 15 percent of the estimated reserves. The economic portion is mainly concentrated in the western part of the lease area and can take the form of a massive conglomerate, a pyritic sand unit with intermittent pebble layers or a thin conglomerate horizon. The reef is located at the contact between the overlying Kliprivierberg Lavas of the Ventersdorp SuperGroup and the underlying sediments of the Witwatersrand SuperGroup which creates a distinctive seismic reflector. The VCR is located up to one kilometer above the Vaal Reef.

The “C” Reef is a thin, small pebble conglomerate with a carbon-rich basal contact, located approximately 270 meters above the Vaal Reef. It has less than 1 percent of the estimated reserves with grades similar to the Vaal Reef, but is more erratic. The most significant structural features are the north-east striking normal faults which dip to the north-west and south-east, resulting in zones of fault loss.

Vaal River Summary of metallurgical operations

                     
      East Gold          
  West Gold  Acid and  Noligwa  Mispah Gold  Kopanang 
  Plant  Float Plant  Gold Plant  Plant  Gold Plant 
 
Gold plants
                    
Capacity (000 tonnes/month)  180   309   263   140   420 
Uranium plants
                    
Capacity (000 tonnes/month)        263       
Pyrite flotation plants
                    
Capacity (000 tonnes/month)     250   145       
Sulfuric acid plants
                    
Production (tonnes/month)     7,500          
 

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    West Gold
Plant
   East Gold
Acid and
Float Plant
   Noligwa
Gold Plant
   Mispah Gold
Plant
   Kopanang  
Gold Plant  
 

 Gold plants

          

  Capacity (000 tonnes/month)

   180    309    263    140    420   

 Uranium plants

          

  Capacity (000 tonnes/month)

             263         –    

Operating and production data for Vaal River Operations
                     
                  Vaal River 
          Moab      and West 
  Great Noligwa  Kopanang  Khotsong  Tau Lekoa(3)  Wits surface 
 
2010
                    
Pay limit (oz/t)  0.36   0.41   0.49       0.01 
Pay limit (g/t)  11.69   13.08   15.87       0.29 
Recovered grade (oz/t)  0.175   0.179   0.263       0.016 
Recovered grade (g/t)  5.99   6.13   9.03   3.32   0.54 
Gold production (000 oz)  132   305   292   63   179 
Total cash costs ($/oz)(1)
  894   613   586   905   486 
Total production costs ($/oz)(1)
  1,152   879   997   937   520 
Capital expenditure ($ million)  24   61   120   10   3 
Employees(2)
  3,225   5,484   4,651       374 
Outside contractors(2)
  90   454   1,801        
All injury frequency rate  21.63   21.86   19.72       5.99 
 
2009
                    
Pay limit (oz/t)  0.43   0.40   0.60   0.21   0.007 
Pay limit (g/t)  14.90   13.85   20.57   7.27   0.225 
Recovered grade (oz/t)  0.167   0.197   0.273   0.097   0.015 
Recovered grade (g/t)  5.73   6.74   9.36   3.32   0.53 
Gold production (000 oz)  158   336   247   124   164 
Total cash costs ($/oz)(1)
  791   408   421   718   378 
Total production costs ($/oz)(1)
  994   598   749   766   390 
Capital expenditure ($ million)  24   58   104   17   3 
Employees(2)
  4,612   5,612   4,334   2,700   228 
Outside contractors(2)
  127   447   1,735   414   6 
All injury frequency rate  17.51   22.71   28.82   26.39   9.10 
 
2008
                    
Pay limit (oz/t)  0.29   0.32   0.69   0.17   0.007 
Pay limit (g/t)  10.07   11.07   23.51   5.70   0.206 
Recovered grade (oz/t)  0.214   0.199   0.271   0.104   0.011 
Recovered grade (g/t)  7.33   6.82   9.31   3.58   0.36 
Gold production (000 oz)  330   362   192   143   92 
Total cash costs ($/oz)(1)
  458   348   375   524   446 
Total production costs ($/oz)(1)
  564   500   641   720   478 
Capital expenditure ($ million)  26   47   89   18   1 
Employees(2)
  5,472   5,620   2,914   2,650   227 
Outside contractors(2)
  271   411   1,823   384   7 
All injury frequency rate  28.54   25.29   38.24   33.92   11.80 
 
Key statistics — Surface sources — Uranium
             
  2010  2009  2008 
 
Pay limit (lb/t)  0.316   0.362   0.331 
Pay limit (g/t)  0.143   0.164   0.150 
Recovered grade (lb/t)  0.622   0.584   0.508 
Recovered grade (g/t)  0.282   0.265   0.231 
Uranium production (000lbs)  1,462   1,442   1,283 
Capital expenditure ($ million)  12   5   6 
Employees(2)
  185   194   193 
Contractors(2)
  28   27   36 
 
(1)Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”.
(2)Average for the year.
(3)Tau Lekoa was sold effective August 1, 2010.

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Great Noligwa
Description:

Description

Great Noligwa, which began operations in 1972, is a mature operation which adjoins Kopanang and Moab Khotsong and is located close to the town of Orkney, near the Vaal River. The Vaal Reef, the operation’s primary reef, and the Crystalkop Reef, a secondary reef, are mined here. This mining operation consists offrom a twin-shaft system and operates over eight main levels at an average depth of 2,400 meters below surface.

meters. Given the geological complexity of the orebody at Great Noligwa, a scatteredpillar mining method is employed.

The mine shares a milling and treatment circuit with Moab Khotsong and Kopanang.

Vaal River – Kopanang

Description

Kopanang which applies conventional crushing, screening, SAG grinding and carbon-in-leach (CIL) processes to treat the ore and extract gold.

Operating review:Gold production declined by 16 percent as planned to 132,000 ounces, from 158,000 ounces in 2009. This was largely as a result of the redesign of the mine plan and layout, and a shift in operational focus to pillar extraction. This redesign resulted in a reduction in the extent of underground resources and in lower volumes being mined. Consequently, tonnages milled fell by 20 percent and reef development by 85 percent. The latter was also affected by the complex geological structures encountered. Yield rose by 5 percent with the mining of higher grade areas and an increase in gold produced from vamping operations.
Total cash costs increased by 13 percent to $894 per ounce from $791 per ounce the previous year, due mainly to the mine redesign, inflationary pressure on labor, power and stores, royalty payments which came into effect on March 1, 2010, and a stronger currency.
Capital expenditure of $24 million in 2010 was unchanged from 2009.
Growth prospects: As a mature operation, Great Noligwa has converted from conventional scattered mining to pillar mining for the remainder of its operational life. The Vaal Reef, which has been the most economically viable reef at Great Noligwa, is mined extensively. The less economically viable Crystalkop Reef is also being exploited, together with viable pillars containing the Vaal Reef. Hence, the life extension opportunity is limited to the inclusion of a few Vaal and Crystalkop Reef haulage pillars that were previously not part of the Ore Reserve. A feasibility study was conducted to determine the viability of establishing alternate routes for men, material, ore and ventilation to replace these haulages. This study showed that portions of these pillars can be mined and they have thus been included in the business plan.
Sustainability
Safety:There were no fatalities during 2010, with the mine achieving 1 million fatality-free shifts on November 5, 2010. The mine also achieved 269 white flag days, signifying the number of full days without a lost-time injury being reported on site.
The all injury frequency rate deteriorated to 21.63 per million hours worked recorded for the year (2009: 17.51).
The “White Flag Day Every Day”, “It’s OK to Stop” and “United for Safe Gold” were the major safety campaigns undertaken during the year. Other initiatives included daily shaft-based communication and a continuation of tours by management and union leadership to increase visibility. Safety stoppages initiated by management also had a positive impact on physical conditions underground. A safety workshop was held at which three strategic safety pillars were identified. Plans were made to address these issues and dates set for their implementation. Great Noligwa maintained its OHSAS 18001 and ISO 14001 certification in 2010.
Labor:Great Noligwa was restructured during the year with the aim of reducing its overall operational footprint and to return it to profitability. Employees were offered the opportunity to apply for voluntary severance packages or transfer to other business units within the company. Labor unions were consulted on strategic matters throughout the process.
Transformation remains a strategic thrust of the mine and will receive continued attention during 2011.
Community:Great Noligwa remained active in the community with various outreach projects. Donations were made to the following organizations:
Triest Training Centre;
Matlosana Hospice;
Evannah Old Age Home;
Dipapeng Disability Centre;
Klerksdorp Baby House; and
Stilfontein Welfare.

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Environment:Great Noligwa retained its ISO 14001 certificate during the first advanced DQS audit conducted in August 2010. No environmental incidents were reported during the year.
The water separation project at Great Noligwa, aims to reduce the inflow of dirty water into the Great Noligwa gold plant process-water tank.
Kopanang
Description:The Kopanang mine, located in the Free State province, roughly 170 kilometers southwestsouth-west of Johannesburg has been in production since 1984. Kopanang’s current mineand approximately 10 kilometers southeast of the town of Orkney on a lease incorporates an area of 35km2, directly. The operation which started in 1984 is west of neighboringneighbour Great Noligwa and bound to the south by the Jersey Fault.
Kopanang exploits gold- and uranium-bearing conglomerates of the Central Rand Group of the Witwatersrand, the most important being the Vaal Reef. Gold is the primary commodity extractedoutput with uranium oxide as a by-product. Theby-product from a single shaft system to a depth of 2,600 meters.

Kopanang almost exclusively exploits the Vaal Reef, the primary reef mined, is exploited at depths of between 1,300 meters and 2,600 meters below surface. Minoralthough minor amounts of gold are also extracted from the secondary Crystalkop Reef, located about 250 meters above the Vaal Reef.

Given the complexity of the geology,geologically complex orebody, scattered mining is employed and the orebody accessed mainly via footwall tunneling, raised on dip of the reef and stoped on strike.
Kopanang uses conventional semi-autogenously grinding and carbon-in-pulp (CIP) technology to process gold. There are two streams of ore into the plant, one comprised mainly of used.

Vaal Reef ore and the other fed exclusively with marginal ore dump material. Roughly 60 percent of Kopanang’s ore is treated in this plant. The balance is sent to the Noligwa Gold Plant and South Uranium plant by rail for gold and uranium extraction.

Operating review: Gold production fell 9 percent to 305,000 ounces in 2010, from 336,000 ounces in 2009. Total cash costs increased 50 percent to $613 per ounce as a result of the stronger currency, lower production, lower grades, inflationary pressures on labor, power and stores, and royalty payments which came into effect on March 1, 2010.
A 13 percent decline in volumes mined was the major contributor to the drop in production, as were safety-related work stoppages, and lower-than-anticipated mining grades. The 9 percent decline in recovered grade was a function of the lower-grade areas mined, and the increase in dilution from tonnages treated at the waste washing plant. A waste washing plant to reduce dust by washing the fines from waste rock was commissioned. Additional labor was recruited during the second quarter to make up production lost owing to safety-related stoppages during the first half of the year. While these stoppages continued in the second half of the year, this initiative contributed 19,300 ounces towards the year’s total production.
Capital expenditure for the year totaled $61 million (2009: $58 million).
Growth prospects: Life extension projects identified in 2010 were De Pont Landing and Altona, Gencor 1 East extension, Crystalkop Reef (C-Reef) Below 68 level, the Shaft Fault area and pillars. Additional information will be obtained from ongoing exploration to generate Mineral Resources for conversion to Ore Reserves. The mother hole drilled at the Gencor 1E area had intersected the reef which will be sampled during 2011. Two more long inclined boreholes are planned from the same site for 2011.
Electro-hydraulic drilling, originally scheduled to commence in August 2010 in the De Pont Landing and Altona exploration areas, has been postponed to mid 2011 due to ventilation requirements and the delay in the issuing of the prospecting rights for De Pont Landing. The Below 68 level project was also delayed due to ventilation requirements which affected electro-hydraulic drilling, while limited pneumatic drilling was done from the 68 DW4 8 crosscut. The bulk of the exploration program has been deferred to 2011.
As a result of the C-Reef exploration program, the confidence increased in the Mineral Resource during 2010. The program will continue into 2011. The Shaft Fault drilling which added to the Mineral Resource during 2010, remains a very prospective target area for new Mineral Resource ounces and exploration here will continue during 2011.

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River – Moab Khotsong


Description

Sustainability
Safety: Regrettably, there were two fatal accidents — one each in March and September 2010. This overshadowed a strong safety performance in the preceding months with the mine having achieved 1 million fatality-free shifts in February 2010. The all injury frequency rate improved from 22.71 per million hours worked in 2009 to 21.86 in 2010. Mitigation strategies were implemented, including improved support standards for development areas, to reduce the risks associated with horizontal transport and falls of ground.
Strategies for 2011 include improved dust management systems through a centralized blasting system, improved footwall and dust filtration systems and experimentation with intake ‘air scrubbing’ systems. Following the noise baseline risk assessment which was conducted in February 2011, the current hearing protection device system will be revised to ensure optimum protection from noise, based on occupational exposures.
The mine successfully achieved recertification for both ISO 14001 and OHSAS 18001.
More than 60 percent of employees, including contractors, underwent voluntary HIV testing during the year following a concerted effort by AngloGold Ashanti’s wellness counselors, peer educators and its programs.
Kopanang, Great Noligwa and Moab Khotsong in conjunction with other mines in the region, regularly interact with the Department of Mineral Resources at a tripartite forum to discuss topical issues related to miningstarted operations in North West Province.
General managers, safety managers, health2003 and safety representatives, as well as unions and association representatives, meet with the state mine inspectors to discuss topical issues including regional health and safety statistics, focus areas and legislation trends.
Community:The mine hosted a number of underground visits from interested parties in the community, organized by Kopanang’s social committee, in partnership with a local non-governmental organization.
A mathematics and science competition was launched for surrounding secondary schools with the aim of identifying and recognizing students who excel in these subjects. Twenty-six children from five schools participated in this competition, which will be repeated. Kopanang is also represented in various activities in the surrounding area through the AngloGold Ashanti Fund’s Local Area Committee. These initiatives include the Winter Warming Project, which distributes blankets to the surrounding communities.
During 2010, the mine started its program to accelerate the conversion of communal rooms in the Kopanang residence to single room accommodation — 198 single rooms were completed, compared to 54 in 2009. Capital has been approved to convert 208 rooms in 2011. Another 1,819 rooms are scheduled for conversion over the next three years.
Environment:An environmental management system (EMS) is in place to address the environmental impacts of the operation, including water and energy consumption, dust levels and potential groundwater pollution from the waste rock dump. To address the dust issue, a waste washing plant was installed and will be fully commissioned in 2011, along with additional dust suppression systems. Storm-water catchment facilities will be put in place and 20 hectares of phytoremediation woodlands planted in 2011. Numerous projects resulted in reduced energy consumption from 32GWh per month in 2003 to 24.5GWh per month in 2010. Additional projects to reduce consumption to 23.4GWh per month are planned in 2011 and 2012.
Kopanang retained its ISO 14001 certification following an audit conducted in August 2010. No environmental incidents were reported during the year.

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Moab Khotsong
Description:Moab Khotsong is theAGA’s newest deep-level gold mine in South Africa. It is situated near Orkney, Klerksdorp and Viljoenskroon, about 180 kilometers southwest of Johannesburg.
Following the successful exploration of the Vaal Reef in the Moab lease area, which lies to the south and is contiguous with Great Noligwa, a decision was taken in late 1989 to exploit the Moab Mineral Resource. Shaft sinking started in 1991 and stoping Stoping operations began in November 2003. The2003, with the mine is scheduledexpected to reach full production in 2013.
A feasibility study of the lower mine (Zaaiplaats) was recently completed. The project will exploit the reef to depths of 3,455 meters below collar.
The main shaft was commissioned in June 2002 and the rock ventilation shaft in March 2003. Ore Reserve development on 85, 88, 92, 95, 98 and 101 levels is progressing to plan. Given the geological complexity of the Vaal Reef, scattered mining is employed.
Operating review:

The Zaaiplaats orebody in the Moab Khotsong continuedlease area presents a significant growth opportunity and capital has been allocated to ramp-upsupport its output. Production increased by 18 percent to 292,000 ouncesdevelopment in 2010, compared to 247,000 ounces the previous year. The operation is scheduled to reach full annual production of 368,000 ounces in 2013.

Total cash costs increased by 39 percent to $586 per ounce, due mainly to inflationary pressuresphases.

Surface operations

Description

Surface operations (metallurgy) extract gold from marginal ore dumps and tailings storage facilities on the cost of labor, power and stores, royalty payments which came into effect on March 1, 2010 and the stronger currency.

Capital expenditure for the year totaled $120 million (2009: $104 million).
Mined grade decreased by 4 percent as mining took place in lower grade areas in the older northern part of the mine. Volumes treated increased by 22 percent, mainly due to ramp-up activities. Production, however, was hampered by safety- and mining related stoppages as well as complex geological structures. These issues are being reviewed. In order to obtain critical information on a timely basis, a comprehensive risk-drilling program was revised to include macro drilling up to three cross-cuts ahead of the current development ends, thus improving grade prediction and development planning. This allowed more proactive mine design and the opening up of reef, while the development of new raises provided additional grade information. Ore Reserve development and LIB drilling proceeded according to plan in 2010. The active drilling program employs a minimum of five LIB machines to ameliorate the risk of intersecting dip features within the 12-month mining plan. There was also a focus on critical-path scheduling and increased development to open up Ore Reserves and create flexibility.
Project ONE was launched October 27, 2010surface at Moab Khotsong.
Growth prospects: The initial development of Moab Khotsong included the exploitation of adjacent ore blocks, including Zaaiplaats to the southwest and some 400 meters deeper than the existing mine. The first phase of Moab Khotsong’s business plan, excluding growth projects, sees the mine producing 3 million ounces of gold over the life of mine. The Zaaiplaats project provides an additional 5 million ounces (164 tonnes) and a life extension of some 15 years, as well as the potential to include additional blocks that rely on the new project infrastructure.
As Moab itself has achieved a stable operating base, Project Zaaiplaats is set to get under way. The project will utilize a modified approach to pre-development in order to facilitate drilling platforms for gathering orebody and structural information, together with the possibility of earlier gold production given the anticipated drilling outcomes. This pre-development also retains the option to fundamentally change the orebody extraction approach by applying different technologies.

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Sustainability
Safety:The mine achieved one million fatality free shifts in January 2010. Tragically, however, two fatalities were recorded in March and June, following incidents involving a fall-of-ground and horizontal transport. The all injury frequency rate improved 32 percent year-on-year, to 19.72 per million hours worked (2009: 28.82). An interpersonal communication strategy yielded improvements in personal safety during the second half of 2010, while an aggressive and rigorous audit protocol further improved safety in individual workplaces. A safety workshop was held and three strategic safety pillars identified. Action plans to address these were devised with the related implementation dates being the focus of 2011. These pillars include:
removing people from risk;
planning work; and
managing behavior.
OHSAS 18001 and ISO 14001 accreditation were received during 2010 following external audits.
Labor:The labor relations climate at the mine was stable during the year, with unions actively consulted on matters affecting their members and wherever possible involved in strategic issues affecting the operation. National Union of Mineworkers’ representatives hold monthly meetings with management while ad hoc engagements are expedited quickly to discuss issues of immediate concern. Workforce transformation in line with South Africa’s employment equity goals remains a strategic thrust for the mine and the company as a whole and will receive continued attention during 2011.
Community:As part of AngloGold Ashanti’s policy of anticipating and responding quickly and efficiently to immediate community needs, Moab Khotsong has a management representative on the local area committee (LAC). This committee was established by the AngloGold Ashanti Fund to disburse charitable donations to communities neighboring the company’s operations. In addition to LAC funding, Moab Khotsong made donations during the year to:
Stilfontein and Jouberton Anglican Church, specifically for the care of the elderly;
Kanana soup kitchen;
Bosasa Youth Development Centre;
Hoërskool Schoonspruit, a local high school;
SPCA;
Triest Training Centre; and
Youth Eagle Christian United Movement.
In order to improve the literacy of its workforce and those living in areas nearby, AngloGold Ashanti provides transport for students from neighboring communities who undertake evening classes in adult basic education and training.
Environment:Moab Khotsong retained its ISO 14001 certification during the first advanced DQS audit conducted in July 2010. No reportable environmental incidents were recorded during the year.
Environmental projects:
An Environmental Impact Assessment of the new chilled-water reservoir is in progress and was completed by the end of February 2011.
The clean and dirty water separation project was completed. This project aimed to reduce dirty water inflows into the dam and determine the ultimate volumes required for the second dam.
Tau Lekoa
Description:Tau Lekoa was one of four mining operations in the Vaal River area. It is close to the town of Orkney on the North West Province side of the Vaal River. Unlike the other Vaal River operations, the major reef mined at Tau Lekoa is the Ventersdorp Contact Reef. Mining operations are conducted at depths ranging from 800 meters to 1,743 meters.
The Tau Lekoa operation comprises a twin-shaft system. Because of its geologically complex orebody, a scattered mining method is used at Tau Lekoa with the orebody being accessed via footwall tunneling. Stoping takes place on strike. There are seven shaft levels with an average of 70 panels in operation. Tau Lekoa employs hydro-power as its primary source of energy.

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Ore mined at Tau Lekoa was processed and treated in preparation for gold extraction at the Kopanang gold plant. Tau Lekoa mine was sold effective August 1, 2010 to Simmer & Jack Mines Limited.
Operating review:Gold production during 2010 amounted to 63,000 ounces, while total cash costs were $905 per ounce.
various Vaal River and West Wits Surface Operations
Description:South Africa Metallurgy encompasses AngloGold Ashanti’s portfolio ofoperations where there is more metallurgical capacity than reef mined. Uranium is produced as a by-product. In addition, backfill product is used as support in mining operations. The surface operation includes the rail transport infrastructure, the Vaal River and West Wits Laboratories and tailings management facilities. Although there is more than one surface operation they are technically reported as one.

Mine Waste Solutions

Description

MWS is a gold and uranium processing plantstailings recovery operation located in South Africa, as well as its Surface Operations,the western portion of the Witwatersrand Basin, some 160 kilometers from Johannesburg approximately 8 kilometers from the town of Klerksdorp near Stilfontein in the North West Province. It has been operational since 1964 and was previously owned by First Uranium Corp.

The Project consists of 14 tailings dams, which extractare made up of deposits from three gold and uranium mines that operated for 50 years.

The tailings dams are scattered over an area that stretches approximately 13.5 kilometers north to south and 14 kilometers east to west. The footprints of the 14 tailings dams cover an area of approximately 1,100 hectares.

The MWS gold plants have the capacity to treat tailings of 1,93 million tonnes per month. The uranium plant has a design capacity of 135,000 tonnes per months and plan construction is expected to be completed by the last quarter of 2013.

Geology

MWS lies within the Witwatersrand Basin, an Archaean sedimentary basin which was deposited over a protracted time period, whose surface expression is an elongate structure that extends longitudinally for approximately 300 kilometers northeast-southwest by 100 kilometers northwest-southeast.

The tailings dams are comprised of tailings material which originated from tailings and rock dumps at surface. This operating unit also produces backfill essential for mining operations. The producing divisions include:

Vaal River Gold: Kopanang Gold Plant, West Gold Plant, East Gold and Archive Plant and Vaal River Tailings;
Vaal River Uranium: Noligwa Gold Plant, Mispah Plant, South Uranium Plant and Nufcor;
West Wits Metallurgy: Mponeng Plant (including a backfill plant), Savuka Plant, West Wits Tailings; and
Vaal River and West Wits Chemical Laboratories.
Operating review:
Goldproduction increased by 9 percent to 179,000 ounces, compared with 164,000 ounces in 2009.
Total cash costs increased by 26 percent to $486 per ounce,the processing of underground ore from $378 per ounce the previous year, due mainly to increased electricity tariffs, higher contractors costsBuffelsfontein Gold mine (“BGM”) and the stronger rand.
Uraniumproduction increased 1 percent to 1.46 million pounds in 2010, compared with 1.44 million pounds in 2009. A 6 percent increase in grade, improved recoverynow defunct Stilfontein Gold Mine (“SGM”). Both BGM and steady plant operations offset a 6 percent drop in tonnages treatedSGM predominately extracted gold from the previous year.
Sulfuric acid:Both the East and South Flotation Plants, as well as the East Acid Plant were not operated during the year as a cheaper product was available from external suppliers.
The BPF component of Project ONE was successfully implemented at the Savuka and Mponeng Gold Plants, with partial implementation during 2010 at the Noligwa Gold Plant and South Uranium Plant. Implementation of BPF will take place at West Kopanang and East Gold Plants during 2011.
Other aspects of Project ONE, namely SP and the Safety Framework and Engagement Process, have been initiated and are scheduled for implementation during 2011 and 2012.
Growth prospects:
South Africa Metallurgy’s project pipeline:Uranium is perceived as a growing opportunity within the South Africa region. The application of new technology has the potential to increase both the gold and uranium reserves.
Uranium Expansion Project:An alternative strategy has been identified to increase uranium production, premised on improved utilizationconglomerate refs of the uranium recovery process-plant stream. Processing of the highest-gradeWitwatersrand Basin. The material will be prioritized and the process plants will be modified to remove throughput restrictions to increase capacity.
Higher utilization will be realized by providing ore-surge capacity on surface and improving rail-network capacity to increase surface tramming tonnages. The surge storage will provide material for processing during weekends when no hoisting takes place from underground. Plant modifications will improve the processing efficiency of the Noligwa plant’s thickening circuit and ore reception areas. A feasibility study has identified that an additional 3.2 million pounds of uranium can be produced over the life of mine of Kopanang. Capital investment has been estimated at $27 million. Detailed design will commence in 2011, ramping up to full production from the second quarter of 2012.
New acid storage section at South Uranium Plant:Construction of a new acid storage section at the South Uranium Plant is in progress to provide storage capacity during periods of market surplus. Mechanical installation is nearing completion and the tanks will be commissionedcontained in the second quarter of 2011.

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tailings dams is generally fine.


Kopanang waste washing plant:The objective of this project is to recover extra gold from the Kopanang waste rock and to eliminate fine dust from the waste rock dump, which imposes an environmental liability on the mine. Construction was completed in the second quarter of 2010.
Mponeng feeder upgrades:The Langlaagte chutes on the mill-feed belts are to be replaced with Weba chutes. An installation on one of the mills showed reduced occurrence of chokes giving more consistent mill feed and improved mill throughput. Installation of the second chute was completed in the fourth quarter of 2010 and the third chute will be installed in 2011.
Sustainability
Safety:South Africa Metallurgy achieved a remarkable 12 million fatality free shifts during 2010. The all injury frequency rate improved from 9.10 per million hours worked in 2009 to 5.99 in 2010 and the total number of ‘white flag days’, signifying days on which no injury occurred, increased from 307 in 2009 to 326 in 2010. Eight plants achieved more than 100 consecutive ‘white flag days’. OHSAS 18001 certification was maintained, ICMI compliance was re-certified and industry milestones for silica dust and noise were achieved.
Labor:Initiatives to improve the relationship with organized labor particularly in West Wits, have begun with a focus on capacity building and roll-out of the company’s values.
Meeting employment equity targets remained key, with significant progress achieved during 2010. Historically disadvantaged South Africans accounted for 41.21 percent of all management roles, compared to 38.4 percent in 2009, while female representation across the workforce was 16.8 percent compared to 16 percent in 2009.
Environment:As part of the phytoremediation program, a total of 10 hectares was planted on the footprint of the East Pay Dam. Various environmental projects were successfully implemented during the year, including:
relining the No.2 Barren dam at South Uranium plant;
construction of lined areas and bund walls at Noligwa Gold plant to manage clean and dirty water;
construction of lined areas and bund walls at East Gold Acid Float (EGAF) plant to manage clean and dirty water;
lining of the process water trench from EGAF plant to Central Spillage; and
cleaning historical pyrite spills outside the Noligwa Gold plant.
ISO 14001 accreditation was successfully maintained during 2010.
A total of eight pre-closure sites were rehabilitated during the year. During the clean-up of the East Pay Dam footprint, 260,392 tonnes from the East Pay Dam, 2,101 tonnes from the site adjacent to EGAF and 3,522 tonnes from the black-reef area were loaded and transported to the screening plant for processing via the Archive mill. In addition, 29,126 tonnes of silt material was loaded and transported from the upper residence dam and 19,000 tonnes from the lower residence dam to the bunkers built on the old North Tailings Storage Facility.
A total of 51,408 tonnes of contaminated gold-bearing material was sold to a third party for processing.
An aggressive invader-plant eradication program was undertaken in 2010. Independent consultants measured a significant reduction in the prevalence of the three invader plant species targeted.
There were 10 reportable environmental incidents, a marked decline from 2009 when there were 35 incidents. All of the 2010 incidents involved water dam overflows. Dam capacity has been increased and is in the process of being expanded further. Dam level alarms have also been installed to prevent recurrence. The program to replace pipelines has borne fruit, with no incidents involving pipeline failures occurring during the year. The closure of the acid plant at the EGAF plant meant that there were also no reportable air emission incidents.
Bokkamp water management project: Construction was undertaken of a storm water dam and pipeline system to eliminate the environmental impact of overflowing dams in the Vaal River area. The dam was completed during the third quarter of 2010 and is operational.

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West Wits operations

Description:

The Mponeng, Savuka and TauTona mines are situated on the West Wits Line near the town of Carletonville, straddling the border of Gauteng and North West Province. Mponeng has its own gold processing plant, while the Savuka and TauTona operations share a plant.

Operating and production data for West Wits operations
             
  Mponeng  Savuka  TauTona 
 
2010
            
Pay limit (oz/t)  0.28   0.56   0.60 
Pay limit (g/t)  9.14   17.86   19.27 
Recovered grade (oz/t)  0.276   0.155   02.04 
Recovered grade (g/t)  9.48   5.30   7.01 
Gold production (000 oz)  532   22   259 
Total cash costs ($/oz)(1)
  452   1,136   699 
Total production costs ($/oz)(1)
  580   1,409   996 
Capital expenditure ($ million)  122   9   75 
Employees(2)
  5,732   952   4,137 
Outside contractors(2)
  46   29   472 
All injury frequency rate  15.93   7.69   19.03 
 
2009
            
Pay limit (oz/t)  0.25   0.78   0.74 
Pay limit (g/t)  8.53   26.74   25.33 
Recovered grade (oz/t)  0.253   0.159   0.213 
Recovered grade (g/t)  8.66   5.45   7.29 
Gold production (000 oz)  520   30   218 
Total cash costs ($/oz)(1)
  331   1,133   532 
Total production costs ($/oz)(1)
  404   1,400   766 
Capital expenditure ($ million)  109   13   57 
Employees(2)
  5,926   1,019   3,842 
Outside contractors(2)
  103   35   451 
All injury frequency rate  14.31   13.23   15.84 
 
2008
            
Pay limit (oz/t)  0.22   0.43   0.44 
Pay limit (g/t)  7.61   14.91   15.05 
Recovered grade (oz/t)  0.292   0.183   0.253 
Recovered grade (g/t)  10.02   6.28   8.66 
Gold production (000 oz)  600   66   314 
Total cash costs ($/oz)(1)
  248   424   373 
Total production costs ($/oz)(1)
  327   515   519 
Capital expenditure ($ million)  86   11   60 
Employees(2)
  5,482   1,179   3,849 
Outside contractors(2)
  203   45   774 
All injury frequency rate  14.29   19.82   19.00 
 
(1)Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”
(2)Average for the year.

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Geology

Mponeng
Description:Mponeng is located between the towns of Carletonville and Fochville on the border between Gauteng and the North West Province, southwest of Johannesburg. The operation mines the Ventersdorp Contact Reef (VCR) at depths between 2,400 meters and 3,900 meters. A sequential-grid mining method is employed. Access to the reef is from the main haulage and return airway development, with cross-cuts developed every 212 meters to the reef horizon. Raises are then developed on-reef to the level above and the reef is stoped-out on strike.
The Mponeng lease area is constrained to the north by the TauTona and Savuka mines, to the east by Gold Fields Limited’s Driefontein mine and to the west by Harmony Gold Mining Limited’s Kusasalethu mine.
Mponeng comprises a twin-shaft system housing two vertical shafts and two service shafts. Ore is treated and smelted at the mine’s gold plant which has a monthly capacity of 160,000 tons. The plant uses two semi-autogenous (SAG) mills to process ore and the gold is extracted by means of CIP technology.
Geology: Two reef horizons are exploited at the West Wits operations, the Ventersdorp Contactcontact Reef (VCR) located at the top of the Central Rand Group and the Carbon Leader Reef (CLR) near the base. The separation between the two reefs increases from east to west from 400 to 900 meters, owingdue to unconformity in the VCR. TauTona and Savuka exploit both reefs, whereas Mponeng only mines the VCR. The structure is relatively simple; faultsFaults of greater than 70 meters are rare. The CLR consists of one or more conglomerate units and varies from several centimeters to more than three meters in thickness. Regionally, the VCR dips at approximately 21 degrees but may vary between 5 degrees and 50 degrees, accompanied by changes in thickness of the conglomerate units. Where the conglomerate has the attitude of the regional dip, it tends to be thick, well-developed and accompanied by higher gold accumulations. Where the attitude departs significantly from the regional dip, the reef is thin, varying from several centimeters to more than three meters in thickness.
Operating review:Mponeng’s gold production increased by 2 percent to 532,000 ounces

West Wits – Mponeng

Description

Mponeng, in 2010, compared to 520,000 ounces in 2009. A 9 percent increase in grade contributed tooperation since 1986, is located between the rise in production.

Total cash costs rose by 37 percent to $452 per ounces, due totowns of Carletonville and Fochville on the impactborder between Gauteng and the North West Province, southwest of Johannesburg. The operation, the stronger currency, inflationary pressure on labor, power and stores and royalty payments which came into effect on March 1, 2010.
Capital expenditure forworld’s deepest mine, extracts the year totaled $122 million (2009: $109 million).
Growth prospects:
Ventersdorp Contact Reef (VCR) Below 120 Project: Developmentat depths between 2,400 meters and 3,900 meters through sequential-grid mining. The Mponeng lease area is aheadconstrained to the north by the TauTona and Savuka mines, to the east by Gold Fields’ Driefontein mine and to the west by Harmony’s Kusasalethu mine. Mponeng comprises a twin-shaft system housing two surface shafts and two sub-shafts. Ore is treated and smelted at the mine’s gold plant. The plant has a monthly capacity of schedule165 000 tonnes.

West Wits – TauTona

Description

TauTona lies on the West Wits Line, just south of Carletonville in Gauteng, about 70 kilometers southwest of Johannesburg. In operation since 1961, mining takes place at depths of 1,850 meters to 3,450 meters. The mine has a three-shaft system, supported by secondary and tertiary shafts, and is in line with the project plan.process of converting from longwall to scattered-grid mining. The estimated completion date is 2013change in mining method was necessitated by the increasingly complex geology being encountered and full production is scheduled for 2016. The project is anticipated to recover 2 million ounces of gold at a cost of R2 billion.

Carbon Leader Reef (CLR) Below 120 Project: This project which targets the mining area from 120 to 141 levelsunsuitability of the Carbon Leader Reef horizon, hascurrent method for mining through the potentialPretorius fault. This change is also expected to yield 11.3 million ounces of recovered gold. This project can be undertaken in a phased approach, accessing 123 and 126 levels first in order to bring gold forward. This initial phase could potentially recover 3.5 million ounces of gold.
Sustainability
Safety:Tragically, there were four fatalities at Mponeng during 2010. Two of the fatalities were of undetermined causes and are still pending classification upon completion of the DMR enquiry. The all injury frequency rate deteriorated to 15.93 per million hours worked from a rate of 14.31 in 2009.
The mine embarked on a number of safety initiatives in 2010. These included the introduction of detailed work packages in line with the implementation of BPF; the roll-out of the Safety Transformation program; promotion of consecutive injury free days; miner, artisan, team-leader and safety representative meetings; empowering of safety representatives and finally the application of the SANDLA safety system, which focuses on procedures, personal protective equipment and tools and equipment.

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improve safety.


West Wits – Savuka

Description

The Inspector of Mines issued Mponeng with 10 Section 54 directives during the year. Each directive resulted in Mponeng suspending operations fully or partially in order to comply with the inspector’s recommendations on safety aspects. In each case, the suspension order was lifted following investigation and consultation between management, organized labor and the DMR.
Occupational health and safety assessments for OHSAS 18001 first and second advance assessments were conducted in January and July 2010, with Mponeng retaining accreditation on both occasions.
Health:During 2010, some 111 new cases of occupational tuberculosis (TB) were diagnosed at Mponeng, at an annual incidence of 2 percent. By year-end, 58 employees were still receiving daily treatment for TB. In addition, 852 Mponeng employees were seen at the Wellness Clinic in the six-month period to December 2010, representing approximately 19 percent of the group 3-8 workforce. A total of 512 employees had received anti-retroviral therapy by the end of the year.
Training:Key successes of AngloGold Ashanti’s adult basic education and training (ABET) initiative at Mponeng included:
Coordinating and hosting International Literacy Day with partners including the Mining Qualification Authority, the National Union of Mineworkers and other mining companies in the region. The event included more than 3,000 ABET learners, staff, representatives from the Department of Labor and other stakeholders;
Providing learners with the opportunity to study for the national diploma (N1 and N2) courses at Wescol College; and
Planning a library and resource centre for both AngloGold Ashanti’s ABET learners and members of the general community. This library will be an electronic learning centre.
Skills training opportunities were provided to employees and the community. Training opportunities exist in boiler-making, wiring, plumbing, carpentry, welding and computer training. Fifty-nine employees and 52 community members participated during the year.
Community:Mponeng’s ‘We Care Committee’, has formed partnerships in the host communities of Kokosi, Greenspark and Fochville, and is making a concerted effort to understand their environment, traditions and values.
Projects undertaken during 2010 included:
Winnie the Pooh Nursery School, Greenspark: shelter for the school’s sandpit, provision of storage space, new tables, chairs and mattresses, a sustainable vegetable garden to feed children and sell surplus produce to the community to supplement funds;
Old age centre, Greenspark: construction of shaded areas and provision of food parcels;
Nursery School, Kokosi: provision of coats for school children during the winter months;
Fochville Service centre: provision of food parcels;
Welfare, Fochville: hosting a Christmas party and presents; and
Fochville and Losberg Primary Schools, Fochville: provision of stationery for learners and other outreach projects.
Environment:In order to prevent the mine from impacting surface and ground water, a number of risk assessments and environmental investigations were conducted during the year. Most of these studies have been completed and the planning and execution of mitigation projects are under way. These include:
Hydrological and waste assessments — the purchasing and installation of flumes and flow meters in the east and west trenches to measure clean storm water discharge;
Completion of a legal compliance audit and a polychlorinated biphenyls (PCB) assessment. (PCBs are a group of synthetic oil-like chemicals of the organochlorine family which have been shown to possess carcinogenic properties and damage reproductive, neurological and immune systems of wildlife and humans);
Coating and sealing of concrete-lined washing bays and waste transferring stations;
Collection and disposal of asbestos waste;
Eradication of alien and invader vegetation;
Purchasing of high pressure cleaners; and
Sampling and analysis of water discharge to demonstrate continual improvement in monitoring and managing process water. An ISO 14001 first advancement assessment audit was conducted at Mponeng in August 2010, with the mine retaining its accreditation. No reportable environmental incidents were recorded during the year.

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Savuka
DescriptionSavuka is situated on the West Wits line in the province of Gauteng, close to the town of Carletonville and approximately 70 kilometers southwest of Johannesburg. Savuka is close to the town of Carletonville. The Carbon Leader Reef (CLR) is mined at depths varying between 3,137 meters and 3,457 meters below surface and the Ventersdorp Contact Reef (VCR) at a depth of 1,808 meters below surface.
The Savuka lease area is constrained to the north and northwest by DRDGOLD Limited’s Blyvooruitzicht Mine, to the east by TauTona, to the west by Harmony’s Kusasalethu mine, and to the south by Mponeng.
Operating review:Savuka produced 22,000 ounces of gold during 2010, compared with 30,000 ounces the previous year. Total cash costs increased by 3 percent to $1,136 per ounces, from $1,133 per ounces in 2009.
Savuka’s operations continued to bear the impact of the seismic event that occurred in May 2009 as rehabilitation work continued during 2010. This resulted in production taking place in the VCR upper level in the first half of the year due to limited access to the CLR. In the interests of capital efficiency, a decision was made in late 2010 to place the mine on care and maintenance and to access its Ore Reserves from the larger, neighboring Mponeng operation in future.
An insurance claim, covering normal business interruption and material damage was lodged. Payments received during 2010 as a reimbursement of costs, were $11 million in June and $5 million in September.
Capital expenditure declined to $9 million in 2010 (2009: $13 million).
Growth prospects: Several strategic options are currently being considered for Savuka. These options vary from placing the operation on care and maintenance to a continuation of mining activities. It is anticipated that a formal decision on the future of Savuka will be made by mid-2011.
Sustainability
Safety:The all injury frequency rate improved from 13.23 in 2009 to 7.69 per million hours worked in 2010. There were no fatalities during 2010.
Savuka also retained its OHSAS 18001 certification following an audit that was conducted during the course of the year.
The mine continued implementation of the parallel safety initiatives initiated in 2008, including Goldsafe days; the promotion of team-based processes, mass open-air meetings and monthly miner, artisan, team leader and safety representative meetings.
Savuka also participated in AngloGold Ashanti’s successful roll-out of the ‘It’s OK to stop’ campaign. In addition, various internal safety audits were conducted to enable management to address and mitigate the risks identified in the process. The AuRisk system was implemented to address risks at the mine.
Community:Savuka’s community program is managed in tandem with that of the TauTona mine.
Environment:An ISO 14001 first advance assessment audit was conducted at Savuka in September 2010, with the operation retaining its accreditation.
The environmental closure plan has been assessed. Pumping will be dealt with through Mponeng and TauTona. Environment-related projects for TauTona/Savuka include the establishment of a centralized oil store and the construction of a storm-water channel at the internal mine store yard.
No reportable environmental incidents were recorded during the year.

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TauTona
Description:TauTona lies on the West Wits Line, just south of Carletonville in Gauteng and about 70 kilometers southwest of Johannesburg. Mining at TauTona takes place at depths of 1,850 meters to 3,450 meters. The mine has a three-shaft system, supported by secondary and tertiary shafts and is in the process of converting from longwall mining to scattered-grid mining. This change in mining method was necessitated by the increased incidence of complex geology and the unsuitability of the current method for mining through the Pretorius fault. The change will also lead to improved safety.
TauTonaSavuka shares a processing plant with Savuka.neighbouring TauTona and has been operational since 1962. The facility currentlygold plant has a monthly capacity of 180,000 tonnes and uses conventional milling to crush160 000 tonnes.

The West Wits team conducted an investigation into the ore and a CIP plant to treat it. Once the carbon has been removed from the ore, itincorporation of Savuka, which is transported to the gold plant at Mponeng for elution electro- winning, smelting and the final recovery of the gold.

Operating review:Production at TauTona rose by 19 percent to 259,000 ounces during 2010, compared with 218,000 ounces the previous year. Cash costs rose 31 percent to $699 per ounces, from $532 per ounces in 2009, due mainly to inflationary pressure on the cost of labor, power and stores, royalty payments which came into effect on March 1, 2010 and a stronger currency.
Capital expenditure totaled $75 million in 2010 (2009: $57 million).
The improvement in production was due largely to the successful resumption of mining in January 2010 following the temporary closure of the shaft in October 2009. The positive production performance was, however, affected by a Section 54 stoppage imposed on all tramming activities during September by the Department of Mineral Resources.
Project ONE was officially launched on October 26, 2010. A project support team was established and trained. Site configuration and employee training have commenced with full implementation scheduled fornearing the end of September 2011.
Projects update:
CLR Below 120 project: The original project scope wasits working life, into either TauTona or Mponeng. Post year-end, the investigation concluded that the optimal, most efficient solution to developaccessing Savuka’s remaining Ore Reserves would be via TauTona’s infrastructure.

From January 1, 2013 Savuka and TauTona operate as a twin-shaft system — one for men and material and the other a rock decline — to access and mine below the 120 level. Initial production targets were around 46.3 tonnes or 1.5 million ounces of recovered gold, including 42.9 tonnes or 1.4 million ounces directly from the project and the balance from tailings, which would contribute significantly to TauTona’s gold production. Following a major seismic event which closed off one of the two access routes, the project was reviewed and impaired in January 2009. A decision was made to limit the scope of the project to the development of the rock decline to 123 level. As a result of unfavorable geological drilling results and a significant increase in the latest cost estimate, the project has been suspended. The project area may be accessed at a later date from Mponeng.

CLR Shaft Pillar Extraction Project: The project was designed to enable stoping operations to be conducted up to an infrastructural zone of influence. However, given the safety and fall-of-ground risks, a decision was made to halt mining of this pillar. Only 65 percent (434,000 ounces) of the targeted production was achieved from this project. Capital expenditure on the project was $34 million.
VCR Pillar Project: The aim of this project is to provide the necessary infrastructure to access the VCR pillar area. Production began in 2005 and development was scheduled to have been completed in 2010. Total production was estimated at almost 200,000 ounces in all at a capital cost of $14 million, most of which has been spent. Following a seismic event in the shaft and after further modeling done by the Rock Mechanics Department, it was decided to stop mining the VCR pillar. As at December 2010, 141,000 ounces had been produced from this project.
Sustainability
Safety:Tragically, two fatalities occurred at TauTona during 2010 resulting from accidents related to winches and horizontal transport. The all injury frequency rate per million hours worked deteriorated from 15.84 in 2009 to 19.03 per million hours worked in 2010.

72single mine.


TauTona retained its OHSAS 18001 certification following an audit conducted during the second quarter of 2010 as the mine implemented the behavior based safety observations program to audit the behavior of the mine’s workforce and adopted the MOSH system to further enhance the mine’s safety performance. Shaft infrastructure upgrades continued into 2010 following an incident in the fourth quarter of 2009, when a length of penthouse steel fell down the sub-shaft, damaging infrastructure and prompting the temporary suspension of operations while a full inspection was undertaken.
Mining through complex geology, including the Pretorius fault zone, represented one of the chief safety challenges during the year. TauTona continued with the implementation of parallel safety initiatives which begun in 2008, including, the ongoing roll-out of the ‘It is OK to Stop’ principle to all employees, the White Flag drive and the Laduma for Safety and wellness days. The monitoring of emergency escape routes was improved.
On October 2, 2010, TauTona achieved two years without a fall-of-ground fatality, demonstrating the significant progress made in mitigating one of the most important risks related to deep-level, underground mining. The AuRisk system was implemented to address risk at the mine.
Community: TauTona plays an active role in supporting various community projects in the Merafong district. AngloGold Ashanti made donations to local organizations during the year, including:
Carletonville Home Based Centre;
Avondgloor Old Age Home;
Suid-Afrikaanse Vroue Federasie (SAVF); and
Timber Twig Pre-Primary School.
Environment:An ISO 14001 first advancement assessment audit was conducted at TauTona in September 2010, with the operation retaining its accreditation.
Additional projects undertaken during the year to minimize the operation’s environmental impacts included:
Upgrading of the waste separation area to improve waste handling and storage, thereby improving recycling capacity;
The cleanup and removal of steel and redundant equipment which formed part of the backfill testing plant, in order to reduce the size of the mine’s footprint; and
Relocation of the internal mine store and equipment from the ESKOM servitude, bringing TauTona in line with safety and legal requirements on power cabling running through the mine area.
Additional focus areas with regard to environmental aspects included:
Minimizing refrigeration gasses (R134a and R11) that are used in the refrigeration plants as refrigerant to supply cooling power to underground workings;
Management of hazardous material and waste, specifically hydrocarbons, chemicals and fluorescent tube light bulbs;
The management of clean and dirty water at TauTona; and
Water and electricity usage.
No reportable environmental incidents were recorded during the year.

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CONTINENTAL AFRICA
(CONTINENTAL AFRICA MAP)
AngloGold Ashanti has eight mining operations in its Continental Africa region:
Iduapriem and Obuasi in Ghana;
Siguiri in Guinea;
Morila, Sadiola and Yatela in Mali;
Navachab in Namibia; and
Geita in Tanzania.
Combined production from these operations declined by 6 percent to 1.49 million ounces of gold in 2010, equivalent to 33 percent of group production. In all, they employed 15,761 people, including contractors, 494 more than in 2009. Total attributable capital expenditure for the region was $232 million (2009: $196 million).
AngloGold Ashanti also conducts an active greenfield exploration program, principally in the Democratic of the Republic of the Congo (DRC), focused on the Mongbwalu concession and the Kibali joint venture with Randgold Resources and the DRC government. This is in addition to brownfield exploration being conducted in and around its existing operations. For further information on the group’s exploration program in Continental Africa, see the Global exploration section is this report.

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GHANA - Summary of metallurgical operations
                 
  OBUASI    
  Sulfide Treatment  Tailings Treatment  Oxide Treatment  IDUAPRIEM 
  Plant  Plant  Plant  PLANT 
Capacity (000 tonnes/month)  200   200   150   375 

   Obuasi  

        Iduapriem

Plant

 
   Sulfide Treatment
Plant
  

Tailings

Treatment Plant

  

Capacity (000 tonnes/month)

  195    180    385  

Ghana – Iduapriem

Description:

Description

Iduapriem, wholly owned by AngloGold Ashanti since September 2007, comprises the Iduapriem and Teberebie properties on a 110km2 concession. The mine, which began operations in 1992, is situated in the western region of Ghana, some 70 kilometers north of the coastal city of Takoradi and 10 kilometers southwest of Tarkwa.

Iduapriem is an open-pit mine and its processing facilities include a CIPCarbon-in-pulp (CIP) plant.

Geology:

The Iduapriem and Teberebie gold minesproperties are located along the southern end of the Tarkwa basin. The mineralization is contained in the Banket Series of rocks within the Tarkwaian System of Proterozoic age. The outcropping Banket Series of rocks in the mine area form prominent, arcuate ridges extending southwards from Tarkwa, westwards through Iduapriem and northwards towards Teberebie.

Operating and production data for Iduapriem
             
  2010  2009  2008 
 
Pay limit (oz/t)
  0.04   0.04   0.04
Pay limit (g/t)
  1.47   1.45   1.43
Recovered grade (oz/t)  0.050   0.050   0.051
Recovered grade (g/t)  1.70   1.72   1.76
Gold production (000 oz) 100 percent
  185   190   200
Total cash costs ($/oz)(1)
  778   658   625
Total production costs ($/oz)(1)
  1,027   795   740
Capital expenditure ($ million) 100 percent
  17   28   54
Employees(2)
  729   727   732
Outside contractors(2)
  754   720   1,048
All injury frequency rate  9.73   12.26   13.95 
(1)Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”.
(2)Average for the period.
Operating review:Gold production declined

Ghana – Obuasi

Description

Obuasi, wholly owned by 3 percent to 185,000 ounces in 2010. The decline in production was mainly due to a stoppage from February 11, to April 20, to improve and increase the capacity of the site’s tailings storage facilities (TSF). However, a significant portion of production lost due to the stoppage was recovered by re-planning mining operations and achieving designed plant throughput.

Total cash costs increased by 18 percent from the previous year to $778 per ounce, due primarily to higher fuel and power prices as well as increased employee and maintenance related costs.
The launch of Project ONE in August 2010 has improved overall mill throughput, which reached a record of 423,000 tonnes in December 2010, in line with the upgraded plant design specification.
Capital expenditure for the year was $17 million (2009: $28 million). Owing to the operational stoppage between February and April 2010 and based on a review of capital spend, the initial amount of $31 million budgeted for the Ajopa project and other projects was deferred.
Growth prospects:While the mine has limited growth prospects on surface, the higher gold price led to renewed interest in evaluating the considerable low-grade Mineral Resources in the Tarkwaian conglomerates that extend below the economic limits of the existing pits. Work is planned in 2011 to determine if there is an economic resource sufficient to support underground mining.

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In addition, the Ajopa project, which was anticipated to start in 2010, is to be developed over the next two to three years. Ajopa contains an estimated Ore Reserve of 5.2 million tonnes at a grade of 1.83g/t, equivalent to around 341,000 ounces of gold. This project is expected to yield approximately 324,000 ounces over 24 months. The change in projected Ajopa ounces is due to change in planning parameters leading to increased volume to be mined.
Sustainability
Safety:The all injury frequency rate of 9.73 per million hours worked improved from 12.26 reported in 2009.
Reducing the number of safety-related incidents remains a key focus for management, with a number of interventions already in place. These include hazard identification and risk assessment; incident reporting and investigation; employee engagement and communication; contractor safety management; and more visible leadership inspections by management.
Iduapriem maintained its OHSAS 18001 certification.
Environmental:Permitting issues had a significant impact on operations in 2010, following a shut-down while Block 2 and TSF 3 were closed and the interim TSF built with permission from the Ghana Environmental Protection Agency. In the meantime, construction of a TSF to cater for life of mine tailings deposition is in progress. It is anticipated that tailings deposition in the new facility will start in the first half of 2011.
In addition to this shut-down, four reportable environmental incidents, all related to pipeline failures, took place in 2010.
In 2009, the mine applied for temporary withdrawal from the certification to the cyanide code due to the non-compliance of its existing cyanide mixing and storage facility. Construction of the new cyanide storage facility is in progress and a new application will be made to the International Cyanide Management Institute (ICMI) during 2011. During 2010, the original water treatment plant installed in 2009 was upgraded. This work was undertaken to ensure full treatment of contaminants in process water in order to achieve the discharge standard for release of excess water from the operations.
Iduapriem achieved its ISO 14001 certification following a surveillance audit completed in November 2010.
Community:Iduapriem’s alternative livelihood program continued in 2010, with strong support from the communities, local chiefs and local authorities. The program includes crop, fish and palm farming and processing. In addition, a mushroom farming project is being piloted as part of a broader economic development strategy. Women from local communities will operate the mushroom farms as stand-alone businesses, selling and marketing their produce in and around the Tarkwa region.
Key outstanding issues from previous years, in particular cracks in houses in Teberebie village, were addressed in 2010. Work is still in progress to finalize land-for-land compensation. This would improve an already strong relationship with the mine’s surrounding communities.
Obuasi
Description:ObuasiAngloGold Ashanti since 2004, is located in the Ashanti Region of southern Ghana, approximately 60 kilometers south of Kumasi. It isMining operations are primarily an underground, mine operating at depthsto a depth of up to 1.5 kilometers, thoughkilometers. However, some surface mining in the form of open pit and tailings reclamation also occurs. Two treatment plants processed ore this year: the South Treatment Plant, which is a Float-BIOX®-CIL plant for treating hard rock sulfides and tailings; and a tailings treatment plant using CIL to treat only tailings. The tailings treatment plant was shut downObuasi originally opened in October and was impaired. Tailings will be treated through the South Treatment Plant to increase gold recovery.
1897.

Geology:

The gold deposits at Obuasi are part of a prominent gold belt of Proterozoic (Birimian) volcano-sedimentary and igneous formations which extend for a distance of approximately 300 kilometers in a north-east/south-west trend in south-western Ghana. Obuasi mineralization is shear-zone related and there are three main structural trends hosting gold mineralization: the Obuasi trend, the Gyabunsu trend and the Binsere trend.

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Two main ore types are mined:

quartz veins which consist mainly of quartz with free gold in association with lesser amounts of various metal sulfides such as iron, zinc, lead and copper. The gold particles are generally fine-grained and occasionally are visible to the naked eye. This ore type is generally non-refractory; and

sulfide ore which is characterized by the inclusion of gold in the crystal structure of a sulfide material. The gold in these ores is fine-grained and often locked in arsenopyrite. Higher gold grades tend to be associated with finer grained arsenopyrite crystals. Other prominent minerals include quartz, chlorite and sericite. Sulfide ore is generally refractory.
Operating and production data for Obuasi
             
 2010  2009  2008 
 
Pay limit (oz/t)(1)
  0.19   0.21   0.29 
Pay limit (g/t)
  6.60   7.26   9.35 
Recovered grade (oz/t)(1)
  0.150   0.151   0.127 
Recovered grade (g/t)
  5.16   5.18   4.37 
Gold production (000 oz)
  317   381   357 
Total cash costs ($/oz)(2)
  760   630   636 
Total production costs ($/oz)(2)
  1,003   848   863 
Capital expenditure ($ million)
  109   94   112 
Employees(3)
  4,225   4,408   4,259 
Outside contractors(3)
  1,497   1,351   1,463 
All injury frequency rate  2.86   4.73   6.36 
(1)Pay limits and recovered grade refer to underground ore resources.
(2)Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”.
(3)Average for the period.
Operating review: Gold production decreased by 17 percent to 317,000 ounces in 2010. The reduced gold production was mainly attributable to underground tonnages declining by 8 percent as a result of reduced flexibility in developed Ore Reserves. Total development meters were 19 percent lower, due largely to the poorer-than- expected performancenaked eye. This ore type is generally non-refractory; and

sulfide ore which is characterized by the inclusion of the contractor.

The South Treatment Plant was stopped twice during 2010 — for 5 days in March and 12 days in October, due to excess water on the TSF at Sansu. The tailings treatment plant was then shut down permanently in October as capacity on the Pompora tailings dam had been exhausted.
The mine also suffered blocked and collapsed ore passes and delays in ore-pass relocation. In order to increase the overall efficiency of the operationgold in the long term, the numbercrystal structure of mining areas at Obuasi was consolidated from thirteena sulfide material. The gold in these ores is fine-grained and often locked in arsenopyrite. Higher gold grades tend to nine as planned. Changesbe associated with finer grained arsenopyrite crystals. Other prominent minerals include quartz, chlorite and sericite. Sulfide ore is generally refractory.

Power is supplied to the mining method included changes to certain waste footwall drives used for access, definition drillingmines by the Volta River Authority.

GUINEA

Description

Siguiri, a multiple open-pit oxide gold mine which opened in all newly designed narrow reef stopes and an increase in stope length to 150 meters. The transverse open stoping mining method will be applied to widen sections of the reef.

AngloGold Ashanti has appointed a high-level, multi- disciplinary taskforce to address the operating problems at Obuasi. This team, comprising senior management, will analyze the recent underperformance and design a turnaround plan that will touch all aspects of the operation, from mining and processing to a holistic approach in addressing legacy sustainability issues resulting from a century of mining. Peter Anderton, a seasoned engineer with several years experience, will lead the rapid turnaround effort; and Keith Faulkner, the former AngloGold Ashanti (Ghana) managing director, will oversee the planning of Obuasi’s long-term future. This team will report its findings to the board and table a detailed plan for Obuasi’s sustained turnaround.
Total cash costs increased by 21 percent to $760 per ounce from $630 per ounce in 2009. The increase was mainly attributable to the decline in production, an increase in the power tariff and the once-off settlement of historical worker claims. These negative factors were partially offset by a reduction in the cost of consumables, which were sourced via a focused procurement strategy.
The Sulfide Treatment Plant metallurgical recovery rate was 86 percent against the target of 82 percent set during 2009.
Capital expenditure amounted to $109 million for the year (2009: $94 million).

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Growth prospects:Ore production from underground activity1997, is planned at 1.82 million tonnes in 2011, compared to 1.85 million tonnes achieved in 2010.
Within the task force structure implemented to manage the mine, one of the three elements is to identify the level and methods of production best suited to exploiting the deposit at Obuasi, given advances made in modern mining technology.
Development at Obuasi Deeps on level 50 for both the Kwesi Mensah Shaft and Brown Sub-Vertical Shaft, as well as exploration drilling on the level 50 platform, were suspended because of flooding in July 2009. Development was restarted in the fourth quarter of 2010 and exploration drilling is planned from the first quarter of 2011.
Sustainability
Safety:The safety performance at Obuasi improved significantly compared to 2009 with an all injury frequency rate of 2.86 per million hours worked recorded in 2010 compared with 4.73 per million hours worked in 2009. There were no fatalities during the year.
The safety strategy drawn up in 2009 and implemented in 2010 contributed significantly to this performance. It focused on four interlinked goals: processes that assign accountability and drive performance; effective employee dialogue and engagement; improving health and safety systems and establishing a health and safety support function that suits the operation’s needs.
Community:The implementation of the recommendations of the 2009 Social Study report on Obuasi communities continues to receive attention.
The mine site continued to engage with surrounding communities including the Artisanal Miners Association. There was an increase in the number of communities covered under the stakeholder engagement plan from 48 in 2009 to 58 in 2010.
On legacy issues, farms impacted by mining activities have been assessed and some compensation paid. Grievances have been investigated and documented, and proactive engagement through regular meetings with communities has been instituted.
Regarding economic development, three projects are being piloted at Obuasi to create employment opportunities for the communities, namely a piggery, aqua culture and a garment factory.
AngloGold Ashanti’s staffing needs in the community and social development spheres have been expanded and training is being provided to environment and community staff. Implementation of management standards to prevent or avoid the creation of additional legacy issues has commenced.
The occasional chemical treatment of process water for discharge in positive water balance situations to streams and rivers has been curtailed and rehabilitation of mined-out pits has commenced at Adubriem and Sansu. The road to Sansu village is being resurfaced by the company.
The mine continued to fund and operate its Malaria Control Program, which has successfully reduced the incidence of malaria in the community, of more than 250,000 people, by more than 75 percent. The program is a world benchmark and has been selected by the United Nation’s Global Fund with AngloGold Ashanti as the principal recipient to expand the Obuasi model to 40 districts around Ghana. Funding of $130 million will be provided over five years at which time the Obuasi program will be included in the Global Fund program. The program awaits government tax exemption on the Global Fund donor funds, which should be forthcoming in 2011.
In addition, Obuasi continues its support of the municipality on waste and hygiene management, education, HIV/Aids awareness and treatment.
Environment:Six reportable environmental incidents, two of which were related to tailings management, took place in 2010.
A tailings retreatment project is under way to retreat tailings in the facilities at the northern end of the mine and simultaneously address stability and drainage issues as part of Obuasi’s mine closure obligations.
Construction of two process water treatment plants to mitigate the positive water balances to the north and south of the mine is scheduled for completion by the second quarter of 2011.

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Permitting processes are also under way ahead of the construction of a return water dam to be commissioned by 2012, to enhance the stability of the south tailings storage facility.
The mine underwent its ISO 14001 surveillance audit in November after successfully completing a certification audit in December 2009.
GUINEA
AngloGold Ashanti has one gold miningsole operation Siguiri, in the Republic of Guinea.
SIGUIRI
Description: It is located in the district of Siguiri, around 850 kilometers northeast of the country’s capital Conakry. Conventional mining activities are performed by contractors in multiple open pits using conventional techniques. On surface, Siguiri’s gold processing plant treats about 960,000 tonnes per month. Power to the mine is self-generated.

AngloGold Ashanti hasholds an 85 percent interest in Siguiri and the government of Guinea holds the balance of 15 percent. Siguiripercent is a multiple open-pit, oxide gold mine situated inheld by the Siguiri district in northeastGovernment of the Republic of Guinea, about 850 kilometers northeast of the capital, Conakry. Siguiri’s open pits are operated by mining contractors using conventional techniques. Mineralization at Siguiri is hosted within the Birimian System. The plant processes at a rate of about 30,000 tonnes of ore a day.

Guinea.

Geology:

This concession is dominated by Proterozoic Birimian rocks which consist of turbidite facies sedimentary sequences. The two main types of gold deposits which occur in the Siguiri basin and are mined are:

laterite or CAP mineralization which occurs as aprons of colluvial or as palaeo-channels of alluvial lateritic gravel adjacent to, and immediately above; and

laterite or CAP mineralization which occurs as aprons of colluvial or as palaeo-channels of alluvial lateritic gravel adjacent to, and immediately above; and
in situ quartz-vein related mineralization hosted in meta-sediments with the better mineralization associated with vein stockworks that occurs preferentially in the coarser, brittle siltstones and sandstones.

in-situ quartz-vein related mineralization hosted in meta-sediments with the better mineralization associated with vein stockworks that occurs preferentially in the coarser, brittle siltstones and sandstones.

The mineralized rocks have been deeply weathered to below 100 meters in places to form saprolite or SAP mineralization. With the percentage of available CAP ore decreasing, a carbon-in-pulp (CIP) plant is used to treat predominantly SAP ore.

Operating and production data for Siguiri
             
  2010  2009  2008 
 
Pay limit (oz/t)
  0.02   0.02   0.03 
Pay limit (g/t)
  0.66   0.71   0.93 
Recovered grade (oz/t)  0.028   0.032   0.035 
Recovered grade (g/t)  0.97   1.11   1.20 
Gold production (000 oz) — 100 percent
  321   372   392 
Gold production (000 oz) — 85 percent
  273   316   333 
Total cash costs ($/oz)(1)
  656   513   468 
Total production costs ($/oz)(1)
  733   601   565 
Capital expenditure ($ million) — 100 percent
  12   26   22 
Capital expenditure ($ million) — 85 percent
  10   22   18 
Employees(2)
  1,531   1,492   1,489 
Outside contractors(2)
  1,639   1,481   1,444 
All injury frequency rate  6.15   5.54   9.42 
(1)Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”.
(2)Average for the period.
Operating review:Attributable gold production declined by 14 percent to 273,000 ounces, due mainly to the mining of lower grade ore. The decline in grade was a result of lower overall grades mined in the Sintroko and Tubani pits. Production was also affected by lower drawdown rates, which affected geotechnical stability and caused the failure of the main ramp of Sintroko pushback 1. This delayed mining operations in the affected area from August to November.

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MALI

The mine implemented the BPF component of the Project ONE business improvement initiative during 2010. It is anticipated that plant efficiencies will improve as a result of increased throughput as new initiatives are introduced.
Total cash costs increased by 28 percent to $656 per ounce, from $513 per ounce in 2009, due to higher fuel prices and costs related to labor and mining contractors.
Attributable capital expenditure for the year totaled $10 million (2009: $22 million).
Growth prospects:Scoping studies are being undertaken on the mining optimizations and expanded metallurgical processing capability of the mine. These studies are expected to:
provide direction for the short- and long-term development of the mine;
address the 30 million tonnes a year treatment of saprolite ore from areas to the northwest and southeast of the current pits, as well as the overlying cap rock in those areas and the transitional and hard oxide deposits below the existing pits; and
conduct mining scenarios to provide cut-off grades that will feed into blue sky exploration drilling programs.
Successful completion of the studies will provide direction on the expected increase in throughput over the life of mine.
Current Proven and Probable oxide Ore Reserves at Siguiri are around 2 million ounces of gold at 1.28g/t from the operation’s pits and 1.77 million ounces at 0.55g/t from stockpiles and spent heaps. This is sufficient to feed the plant at a rate of 10.2 million tonnes a year for three to four years. Studies are planned for 2011 to determine options available to improve plant throughput.
There remains potential for additional sulfide and low- grade oxide Mineral Resources in the regional gold belt, which remains very prospective and under explored. Support for this view is based on gold showings in surface geochemistry and on interpretations based on geophysical and geological understanding. Fast-tracking of drilling is required to upgrade ‘blue sky’ estimates into Proven and Probable Ore Reserves.
Sustainability
Safety:Siguiri had one fatality in January 2010 when a collision occurred between two trucks. Management implemented an action plan whereby contractors are closely managed and monitored with regards to safety. The all injury frequency rate for the year was 6.15 per million hours worked (2009: 5.54).
Management identified the need to entrench the view that safety remains more important than production goals. To achieve this, improvements are to be made to enforce basic safety rules and standards in contractor management, management visibility at the workplace, and operator training and awareness.
Preparations for continuous occupational hygiene measurement have been completed and this will be fully operational from January 2011.
The mine maintained its OHSAS 18001 certification.
Community:Siguiri continued its engagement with stakeholders to assure adoption of strategies to achieve common goals. An annual forum was initiated and held to solicit recommendations from interested stakeholders with a view to strengthening relationships with these groups. Long- and short-term community infrastructure projects were undertaken, including:
health post (Kourouda);
Great Mosque of Kintinian;
Arabic school of Kintinian;
upgrading of rural roads within and between villages;
water drainage systems;
water boreholes; and
renovation of Siguiri Central police station and the airport.
The second round of the year’s malaria control initiative for the mine village and six major surrounding communities progressed steadily and was identified as the main reason for the reduction in malaria-related illnesses reported at the new medical centre. The challenge for the malaria control program is how to attend to the larger community in the town of Siguiri, where about 70 percent of mine employees currently reside. It appears that the Global Fund is in the process of funding malaria projects in Guinea’s mining industry.

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Environment:Three reportable environmental incidents occurred during the year, all involving tailings spillages. High density polyethylene pipelines are being replaced by steel pipes on an ongoing basis. The frequency of pipeline inspections has been increased in order to minimize the volume of material spilled should a leak occur. One incident was as a result of sabotage by community members. Community engagement including local and regional authorities was stepped up to prevent a recurrence.
Dust control on haul and access roads and at the ROM1 stockpile was satisfactory, but remains a challenge in the dry months. The operations relied heavily on recirculation of process water and extracted less than a third of its annual water allocation from Tinkinsso River.
The land management program was well executed during the year, with no land-use conflicts with neighboring communities.
Mine closure planning remained high on the agenda, resulting in a closure gap analysis being carried out and measures put in place to close the identified shortfalls.
Siguiri was certified to be in full compliance with the International Cyanide Management Code in March 2010. Certification is valid for three years. A successful ISO 14001 surveillance audit was conducted during the year.
MALI
AngloGold Ashanti has interests in three gold mining operations in Mali, namely, Sadiola, Yatela and Morila. It manages two of these operations, Sadiola and Yatela.

Mali – Morila(attributable (attributable 40 percent)

Description:

Description

The Morila mine has operated for 13 years and is situated some 180 kilometers southeast of Bamako, the capital of Mali. The operation currently treats low- grade stockpiles. Thelow-grade stockpiles while the plant, at Morila, which incorporates a conventional CILcarbon-in-leach process with an upfront gravity section to extract the free gold, has an annual throughput capacity of 4.3 million tonnes. Since mining was concluded in 2009 with the depletion of the orebody, operations at Morila currently involve processing of the stockpile which stood at 5 million tonnes per annum.

Morila(marginal ore and marginal waste) as at year-end. Power is 80 percent ownedsupplied by Morila Limited, a joint venture in which subcontractor.

AngloGold Ashanti andhas an effective 40 percent stake in Morila, as does Randgold Resources Limited each have a 50 percent stake, giving AngloGold Ashanti an effective interest of 40 percent in Morila.(which manages the mine). The governmentGovernment of Mali owns the remaining 20 percent. Randgold Resources manages the mine.

Geology:

Morila is a mesothermal flat lying shear-zone hosted deposit which, apart from rising to the surface in the west against steep faulting, lies flat. The deposit occurs within a sequence Birimian metal-arkoses of amphibolite metamorphic grade. Mineralization is characterized by silica-feldspar alteration and sulfide mineralization consists of arsenopyrite, pyrrhotite, pyrite and chalcopyrite.

Operating and production data for Morila
             
  2010  2009  2008 
 
Pay limit (oz/t)
  0.02   0.04   0.06 
Pay limit (g/t)
  0.67   1.21   2.17 
Recovered grade (oz/t)
  0.050   0.072   0.090 
Recovered grade (g/t)
  1.70   2.47   3.08 
Gold production (000 oz) 100 percent
  238   342   425 
Gold production (000 oz) 40 percent
  95   137   170 
Total cash costs ($/oz)(1)
  716   526   424 
Total production costs ($/oz)(1)
  768   577   500 
Capital expenditure ($ million) 100 percent
  3   10   3 
Capital expenditure ($ million) 40 percent
  1   4   1 
Employees(2)
  476   518   605 
Outside contractors(2)
  415   535   1,098 
(1)Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”.
(2)Average for the year.

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Mali – Sadiola (attributable 41 percent)

Description

Operating review: Attributable gold production declined by 31 percent to 95,000 ounces, mainly due to a 30 percent drop in head grade as a result of the treatment of low-grade stockpiles.
Total cash costs increased by 36 percent to $716 per ounce as a result of the lower production and higher costs for reagent and also for fuel burnt in power generation.
Morila capital expenditure was $3 million in 2010, of which $1 million was attributable (2009: $10 million or $4 million attributable). The major elements of this were the SAG and ball mill main gearbox, conveyor belting and the replacement of the Knelson concentrators.
Morila will continue the current process of treating low-grade ore stockpiles until 2013. Attributable production is therefore expected to decrease further as Morila reaches the end of its life.
Growth prospects:From 2010 to the end of the mine’s life, Morila will continue to treat only low-grade ore. Attributable production is expected therefore to decrease.
Sustainability
Safety:The safety statistics for Morila are reported by Randgold Resources, the operator, and are not included in AngloGold Ashanti’s statistics.
Environment:No significant environmental incidents were reported during the year. ISO 14001 certification was maintained after an external assessment audit was completed during 2010. No non-conformance issues were raised.
Community:TheSadiola mine maintained a good relationship with communities and regular meetings were held. All community development projects planned for the year were completed. The mine continued to provide malaria spraying services and treated five villages during 2010, through three spraying cycles.
Morila’s closure committee is operational and meets quarterly. A sustainable agribusiness project is being developed to continue wealth creation after closure of the mine, with 1,270 hectares having been identified for agriculture. Plans are in place to convert the bulk mining yard and the batch plant into an area for poultry farming and animal husbandry.
The micro-finance project (CAMIDE) has funded 20 undertakings for former staff members. Morila’s management and unions are formulating a social plan for employees. The ongoing closure process focuses on the social plan submitted by labor unions and the closure coordinator, as well as engagement with government agencies to provide training assistance to affected employees.
The New Mine Collective Convention was implemented in September 2010, with no major issues identified. Compulsory health insurance and the payment of the related subscription came into effect in November 2010.
Sadiola(attributable 41 percent effective December 29, 2009, previously 38 percent)
Description:Sadiola is situated in the far southwest ofwestern Mali, some 77 kilometers southsouth-southwest of the regional capital Kayes. SadiolaThe mine is a joint venture in whichbetween AngloGold Ashanti (41 percent) and IAMGOLD each have a 41 percent interest(41 percent) and the government of Mali 18 percent.
(18 percent). The mine has been operating under the current ownership structure since 1996. Mining at Sadiola takesactivities take place in five open pits. Ore is treated and processed inOn-site surface infrastructure includes a CIL4.9 million tonnes per annum carbon-in-leach gold plant withwhere the ore is eluted and smelted. Sadiola’s future lies in the expansion of the Sadiola main pit and a monthly capacity of 364,000 tonnes.
new plant. Power to the Sadiola and Yatela mines is self-generated.

Geology:

The Sadiola deposit occurs within an inlier of greenschist facies metamorphosed Birimian rocks known as the Kenieba Window. The specific rocks which host the mineralization are marbles and greywackes which have been intensely weathered to a maximum depth of 200 meters. A series of north-south trending faults occur that are the feeders to the Sadiola mineralization. As a result of an east-west regional compression event, deformation occurs along a north-south striking marble-greywacke contact, increasing the porosity of this zone. North-east striking structures which intersect the north-south contact have introduced mineralization, mainly with the marble where the porosity was greatest. The Sadiola Hill deposit generally consists of two zones, an upper oxidized cap and an underlying sulfide zone. From 1996 until 2002, shallow saprolite oxide ore from the Sadiola Hill pit was the primary ore source. Since 2002, the deeper saprolitic sulfide ore has been mined and in future will progressively replace the depleting oxide reserves.

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Operating and production data for Sadiola
             
 2010  2009  2008 
 
Pay limit (oz/t)
  0.04   0.04   0.07 
Pay limit (g/t)
  1.28   1.46   2.18 
Recovered grade (oz/t)
  0.060   0.074   0.100 
Recovered grade (g/t)
  2.04   2.52   3.42 
Gold production (000 oz) 100 percent
  287   354   453 
Gold production (000 oz) 41 percent(1)
  118   135   172 
Total cash costs ($/oz)(2)
  686   489   401 
Total production costs ($/oz)(2)
  737   585   587 
Capital expenditure ($ million) 100 percent
  20   10   8 
Capital expenditure ($ million) 41 percent(1)
  8   4   3 
Employees(3)
  790   705   634 
Outside contractors(3)
  981   827   876 
All injury frequency rate  1.65   2.31   4.37 
(1)Effective December 29, 2009, the company increased its interest from 38 percent to 41 percent.
(2)Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”
(3)Average for the year.
Operating review:Attributable production decreased by 13 percent to 118,000 ounces, from 135,000 ounces in 2009, mainly as a result of a 12 percent decline in head grade.
The decline in grade is as a result of the depletion of the Sadiola main pit Ore Reserves and a change in the mining focus to the lower-grade satellite pits.
A new gravity circuit was introduced in the plant and aided recovery in the processing of oxide and sulfide feed materials. Advance crushing and screening of both ore types significantly improved plant throughput in the latter part of the year by minimizing the introduction of large rocks and associated blockages early in the process.
Total cash costs increased by 40 percent to $686 per ounce, owing mainly to the lower-grade feed supplied to the priority plant. In addition, mining contractor costs were higher as a result of the longer haulage distance, higher maintenance costs and increases in the fuel price.
The BPF component of the Project ONE initiative was introduced during 2010 and is expected to be fully entrenched during 2011. Initial BPF work will be directed at optimizing processing activities so as to increase availability, utilization and throughput of the plant.
Total capital expenditure for the year was $20 million ($8 million attributable) (2009: $10 million or $4 million attributable).
Growth prospects:Sadiola has two expansion opportunities, namely the Deep Sulfide project and the Oxide Expansion project, is the latter currently undergoing a prefeasibility study.
The Deep Sulfide project will treat both oxide (5 million tonnes per year) and sulfide (3.6 million tonnes per year) ores. Initial waste stripping at Sadiola’s main pit and the commissioning of the sulfide plant is expected to commence in 2012. Once current oxide Ore Reserves are depleted, the plant will be modified to treat only sulfide material at a capacity of 7.2 million tonnes per year. The Deep Sulfide project will extend the mine’s life and add 4.2 million ounces to Sadiola’s current life of mine production profile.
The Oxide Expansion project is based on exploration results that indicate additional oxide potential in the Sadiola area. Current work includes expediting the exploration program to better define the potential of all existing targets and profile new target areas.

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Sustainability
Safety:Sadiola had one fatality in August 2010. Whilst positioning a submersible de-watering pump, the supervisor fell into a temporary sump following the collapse of the area. All the recommendations arising from the investigation into the incident have been implemented. The all injury frequency rate for the year improved to 1.65 per million hours worked (2009: 2.31).
As contractor-related incidents were the major source of injury, contractor management received concerted attention to ensure alignment and compliance with AngloGold Ashanti’s standards and practices.
Other safety-related programs and initiatives are directed at pre-work planning, hazard analysis, vehicle safety and training focused on crisis and emergency plans.
The mine maintained its OHSAS 18001 certification in 2010.
Community (including Yatela)*:Annual workshops comprising government, national and regional authorities, local communities, media, Non- Governmental Organizations (NGOs) and other associations have been held since 2003. These workshops provide a forum to communicate the activities planned by Sadiola andMali – Yatela while providing an opportunity for the relevant stakeholders to comment and make recommendations.
The Integrated Development Action Plan (IDAP) has been in place since 2004. Covering villages located around the Sadiola and Yatela mines, it focuses on agricultural capacity-building and micro-financing activities. The plan is managed by the communities themselves and includes a general assembly with representatives from each village. The IDAP has received funding from Sadiola and Yatela which enables it to function successfully and independently.
Community members from the villages surrounding Sadiola and Yatela have been trained in malaria mitigating techniques, which has aided a decline in the incidence of the illness since the implementation of the program in 2005.
It is the responsibility of both Sadiola and Yatela to contribute to an HIV/AIDS program. Initiatives focus specifically on awareness, testing and peer educators in the workplace. The company partnered with NGOs during the soccer World Cup 2010 to attract villagers to central locations to watch games and participate in voluntary testing.
Environment:One reportable environmental incident occurred on April 26, 2010 when the incorrect disposal of 75 liters of a pesticide into drains led to contamination of the final effluent from the sewage treatment plant, resulting in the death of more than 200 birds. This incident resulted in a fine levied by local authorities. Management implemented measures to prevent a repeat of the incident by including regular inspections of the site and the education of employees on the importance of adhering to the correct disposal procedures.
The environmental impact assessment for the Sekokoto road diversion was completed and approved by government. ISO 14001 certification was maintained following an external surveillance audit.
* Given their proximity to each other, Sadiola and Yatela conduct their local community initiatives jointly.
Yatela(attributable(attributable 40 percent)
Description:The

Description

Yatela, mine is situated some 25 kilometers north of Sadiola and approximately 50 kilometers south-southwest of Kayes. Ore extraction is conducted from the Yatela main pit as well as the satellite pit at Alamoutala. The ore mined is treated at a heap-leach pad together with carbon loading. The carbon is then eluted and the gold smelted at nearby Sadiola.

Yatelaoperational since 2001, is 80 percent owned by the Sadiola Exploration Company Limited, a joint venture in whichbetween AngloGold Ashanti and IAMGOLD, giving each have an interest of 50 percent, giving AngloGold Ashanti an effective stake ofa 40 percent stake in Yatela. The balance of 20 percent is owned by the government of Mali.

The Yatela mine is situated in western Mali, ownssome 25 kilometers north of Sadiola and approximately 50 kilometers south-southwest of the regional capital Kayes. Ore extraction has been conducted from a number of pits in which mining in most of these pits has been completed.

For the remaining 20 percent stakeyears of the life of mine, the focus will be on a final cutback in Yatela Main pit as well as a new pit north of the mine.

Yatela Main pit. The ore mined is treated on heap-leach pads together with carbon loading. The carbon is then transported to Sadiola for elution and smelting.

Geology:

Yatela mineralization occurs as a keel-shaped body in Birimian metacarbonates. The ‘keel’ is centered on a fault which was the feeder for the original mesothermal mineralization, with an associated weakly mineralized diorite intrusion. Mineralization occurs as a layer along the sides and in the bottom of the ‘keel’. The ore dips almost vertically on the west limb and more gently towards the west on the east limb, with tight closure to the south.

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NAMIBIA

Namibia – Navachab

Operating and production data for Yatela
             
 2010  2009  2008 
 
Pay limit (oz/t)
  0.01   0.04   0.04 
Pay limit (g/t)
  0.45   1.52   1.34 
Recovered grade (oz/t)
  0.036   0.106   0.078 
Recovered grade (g/t)
  1.23   3.62   2.66 
Gold production (000 oz) 100 percent
  150   222   165 
Gold production (000 oz) 40 percent
  60   89   66 
Total cash costs ($/oz)(1)
  817   326   621 
Total production costs ($/oz)(1)
  883   416   636 
Capital expenditure ($ million) 100 percent
  5   3   8 
Capital expenditure ($ million) 40 percent
  2   1   3 
Employees(2)
  308   298   305 
Outside contractors(2)
  570   505   583 
All injury frequency rate  2.28   5.54   6.13 
(1)Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”.
(2)Average for the year.
Operating review:Yatela was originally scheduled for closure in 2010, though the life has since been extended. Attributable gold production at Yatela dropped by 33 percent from 2009 levels to 60,000 ounces in 2010. The decline in production was due mainly to a decrease in the head grade of the ore stacked as a result of non-conformity at the bottom of mineralized structures in Alamoutala.
Total cash costs increased by 151 percent to $817 per ounce, due to the significant decrease in production coupled with higher costs to access the Alamoutala ore and an increase in contract mining costs.
Capital expenditure for the year was $6 million ($2 million attributable) (2009: $3 million; $1 million attributable).
Growth prospects:The current life of mine is based on the successful conversion of the Inferred Mineral Resource in Yatela North, where the opportunity lies in the northeast and northwest extensions. Furthermore, a focused exploration program will be undertaken over the next year to ensure continuation of the mining operation.
Sustainability
Safety:The all injury frequency rate for the year improved to 2.28 per million hours worked (2009: 5.54).
Programs which enabled this improvement included pre-work planning, hazard analysis and also vehicle safety and training directed at crisis and emergency plans.
Management identified effective contractor management as a key area for safety improvement and contractor alignment with group safety standards as a priority.
The mine maintained its OHSAS 18001 certification in 2010.
Community:See discussion of Sadiola.
Environment:There were no reportable environmental incidents at Yatela during 2010. This was as a result of increased inspection and regular interaction with site personnel and management on accident prevention.
The mine rehabilitated 19.5 hectares of waste dumps and heap leach pads during the year. The rehabilitation of a further 160 hectares has been built into the current business plan and will be accelerated.
Furthermore, a closure manager has been appointed by Yatela to ensure that all requirements are fulfilled. The closed Obotan mine in Ghana was visited jointly with the National Closure Commission to better understand closure-related issues and help in the development of a formal closure plan for Yatela that considers the physical environment, social issues and worker development.
ISO 14001 recertification of Yatela was achieved following an audit. An external surveillance audit will be undertaken in 2011.

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Description


NAMIBIA
Description:The Navachab gold mine is situated near the town of Karibib, some 170 kilometers northwest of the capital Windhoek and 171 kilometers inland on the southwest coast of Africa.

Navachab, which began operations in 1989, is an open-pit mine with a processing plant which includes a mill as well as CIP and electro-winning facilities, all with a monthly capacity of 120,000 tonnes.

In addition to the current operation, a Dense Media Separation (DMS) plant with a monthly capacity of 120,000 tonnes was commissioned during 2010.

Geology:

The Navachab deposit is hosted by Damaran greenschistam-phibolite facies, calc-silicates, marbles and volcanoclastics. The rocks have been intruded by granites, pegmatites and (quartz-porphyry dykes) aplite and have also been deformed into a series of alternating dome and basin structures. The mineralized zone forms a sheet-like body which plunges at an angle of approximately 20 degrees to the north-west. The mineralization is predominantly hosted in a sheeted vein set (±60 percent) and a replacement skarn body (±40 percent). The gold is very fine-grained and associated with pyrrhotite, and minor to trace amounts of pyrite, chalcopyrite, maldonite and bismuthinite. Approximately 80 percent of the gold is free milling.

Operating and production data for Navachab
             
 2010  2009  2008 
 
Pay limit (oz/t)
  0.07   0.051   0.04 
Pay limit (g/t)
  2.53   1.55   1.29 
Recovered grade (oz/t)
  0.052   0.046   0.042 
Recovered grade (g/t)
  1.80   1.58   1.43 
Gold production (000 oz)  86   65   68 
Total cash costs ($/oz)(1)
  721   677   559 
Total production costs ($/oz)(1)
  779   723   632 
Capital expenditure ($ million)  14   20   12 
Employees(2)
  687   578   482 
Outside contractors(2)
         
All injury frequency rate  25.60   26.30   20.63 
(1)Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”.
(2)Average for the year.
Operating review:Gold production increased by 32 percent to 86,000 ounces in 2010, due to greater volumes mined from the bottom of the pit and the treatment of high-grade concentrate from the DMS plant.
Total cash costs rose by 6 percent to $721 per ounce as a result of higher labor and power costs and rising contractor fees, though this was partly offset by an increase in production.
Capital expenditure for the year was $14 million (2009: $20 million).
Growth prospects: The optimization process at Navachab indicated that the main pit will be expanded to the east from 2011 to access footwall mineralization north of the current east pushback. The west cut is expected to be mined from 2013 to access the hanging wall mineralization. Exploration during 2011 will focus on the down plunge extension of the existing orebody of the main pit. Drilling will focus on the North Pit 2 and the down plunge extension, while also exploring the strike extent of the satellite target areas where previous exploration indicated potential, as well as the western limb of the fold hinge at anomaly 16.
Sustainability
Safety:The all injury frequency rate per million hours worked improved from 26.30 in 2009 to 25.60 in 2010.
Navachab complied with OHSAS 18001 assessments conducted in March and October 2010.
Safety interventions include ongoing speed surveillance on the access roads in the mine, quarterly vehicle safety audits, regular safety representative meetings and quarterly safety steering-committee meetings. The behavioral safety initiative, known as Ostrich, is ongoing and has begun to produce results.

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TANZANIA

Tanzania – Geita

Community:Navachab made contributions to educational projects, including the ‘Spell it Right’ competition, spring school for grade 12 learners and prize giving ceremonies at local and regional schools. Navachab also sponsored the building of a house for volunteer teachers at the local government school, contributed to the young scientist exhibition and made its annual donation to the private school in the town of Karibib.
A pool of 100 unemployed women was identified in Karibib in order to create ad-hoc employment on a short-term basis where possible.
Environment:No reportable environmental incidents occurred during 2010.
The construction of the water filtration plant commenced in 2010 with commissioning planned to be complete by the third quarter of 2011. This facility will ensure additional recovery of water from the plant to eliminate the need for a third TSF and also negate the inherent safety, health and environment risk associated with a TSF.
ISO 14001 environment certification was maintained during the year. Navachab further received a formal notification of compliance with the Cyanide Code from the Code Secretariat.
TANZANIA
AngloGold Ashanti has one gold mining operation in Tanzania, the Geita gold mine.
Geita
Description:Description

The Geita gold mine is located in the Lake Victoria goldfields of the Mwanza region of Tanzania, about 120 kilometers from Mwanza and 4 kilometers west of the town of Geita. The mine is wholly owned and managed by AngloGold Ashanti.

The Geita gold deposit is an Archaean mesothermal orebody, largely hosted in a banded ironstone formation. Itmine is a multiple open pit operation with underground potential and is currently serviced by a 5.2 million tonnes per annum CIL processing plant.

Geology:

Geology

Geita is an Archaean mesothermal mainly BIF-hosted deposit. Mineralization is located where auriferous fluids, which are interpreted to have moved along shears often on BIF-diorite contacts, reacted with the BIF. Some lower-grade mineralization can occur in the diorite as well (usually in association with BIF-hosted mineralization), and approximately 20 percent of the gold is hosted in the diorite.

Operating and production data for Geita
             
 2010  2009  2008 
 
Pay limit (oz/t)
  0.07   0.09   0.10 
Pay limit (g/t)
  2.38   3.08   3.10 
Recovered grade (oz/t)
  0.069   0.055   0.056 
Recovered grade (g/t)
  2.36   1.89   1.92 
Gold production (000 oz)
  357   272   264 
Total cash costs ($/oz)(1)
  697   985   814 
Total production costs ($/oz)(1)
  874   1,191   1,004 
Capital expenditure ($ million)
  38   19   53 
Employees(2)
  1,874   1,990   2,130 
Outside contractors(2)
  1,391   1,196   986 
All injury frequency rate  5.38   5.56   8.52 
(1)Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”.
(2)Average for the year.

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AUSTRALIA

Australia – Sunrise Dam

Operating review:The turnaround at Geita resulted in gold production increasing by 31 percent to 357,000 ounces in 2010. Significant quarterly improvements were achieved during the first half of the year, with gold production rising from 84,000 ounces in the first quarter to 90,000 ounces in the second quarter. Output was hampered during the third quarter as a result of a major planned plant shutdown to replace the SAG mill discharge end-plate and to rebuild the crusher dump-pocket. Production was also supported by improved grades from Nyankanga pit, which delivered an average grade of 3g/t.
Total cash cost for the year improved by 29 percent to $697 per ounce, mainly as a result of lower reagent costs, as well as a reduction in general and engineering stores.
In addition, other initiatives included the start, in 2010, of the construction of a re-designed run-of-mine pad to improve the ore-blending capability of the plant. All planned performance parameters were achieved.
The fleet rationalization strategy also saw the number of trucks used during the year reduce from 48 to 34. This, in conjunction with improved operating practices, resulted in significant productivity gains as the same volume of material was moved with fewer haul trucks. Fleet rationalization will continue through 2011 as truck productivity is expected to improve by an additional 10 percent to 20 percent, as a result of the new larger, lightweight trays.
Geita’s turnaround and the implementation of Project ONE initiatives which include the BPF and SP, continued throughout 2010. The work management aspect of BPF was successfully implemented in the mining maintenance and processing divisions, resulting in continued improvements. Under the SP component, the Geita organizational structure was re-designed. Managerial Leadership Practices (MLP) training is being delivered to senior management and is due to be completed by 2011.
Capital expenditure for 2010 totaled $38 million (2009: $19 million).
Growth prospects:Exploration drilling was undertaken to increase confidence in the Nyankanga Cut 9 volumes, Cut 6 volumes behind the 2007 failure zone, and in the near-surface volume of Block 1 in the Nyankanga underground. Results confirmed current mineralization and the Nyankanga Mineral Resource model will be updated to incorporate additional drilling and mapping data in 2011.
Both the Nyankanga and Geita Hill Mineral Resource models were updated in April 2010. The Geita Hill Mineral Resource decreased by 2 percent and the Nyankanga Mineral Resource by 1 percent. Both reductions resulted from decreased mineralized volumes.
Exploration activities outside of the active mining areas comprised IP-surveying and geological mapping of five targets: Nyakabale, Mgusu, Nyankumbu, Kukuluma A and Kukuluma B. Except for Kukuluma B, all targets revealed promising combined chargeability and resistivity signatures indicative of disseminated sulfides and potentially associated with gold mineralization. Drill testing of these anomalies is ongoing.
Sustainability
Safety:Geita achieved 11.5 million hours free of lost-time injuries before two tragic fatalities in May 2010, resulting from a collision between two trucks on one of the haul roads during the night shift. The all injury frequency rate for 2010 was 5.38 per million hours worked (2009: 5.56).
Fatigue continues to pose a major threat to Geita’s safety record, making it a priority for safety management. The safety management program in 2010 included the completion of a hazard identification and reporting course, plan task observation training to all frontline managers and rescue team refresher courses.
Geita was second runner-up in the country OHSAS competition.
Community:Resolution of land compensation claims progressed well during the year, with the completion of the Nyamatagata and Katoma claims. Phase 5 of Nyankumbu Girls Secondary School started in 2010 and construction of the school will be completed in 2011.
Design work was completed on the Geita Town Water Supply Project, which will be built in 2011. This project, which will draw water from the Nyankanga dam on the mine’s lease area, will include transfer pumping, a treatment and storage system and will deliver water at a rate of 4,800 cubic meters per day to the town.

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Description


Environment:One reportable environmental incident took place in 2010, following the death of two birds.
Cyanide management has been enhanced with the completion of the plant tailings dilution circuit. Improved control may be expected once the second oxygen injection system on the conditioning tanks is satisfactorily commissioned at the beginning of 2011.
The key requirements of the cyanide code have now been met and the main remaining objective is to achieve compliance with the code requirement that weak acid dissociable (WAD) cyanide levels in the tailings slurry should not exceed 50 parts per million for a period of three to six months. This will be the objective for the first two quarters of 2011.
ISO 14001 environment certification was maintained during the year.

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AUSTRALASIA
(GRAPHIC)
AngloGold Ashanti’s sole operating mine in Australasia is Sunrise Dam.
Production from Australasia declined by 1 percent to 396,000 ounces in 2010, equivalent to 9 percent of group production. Total cash costs increased by 10 percent to $692 per ounce. In all, 494 people, including contractors were employed, 39 more than in 2009. Total attributable capital expenditure for the region, including Tropicana, was $40 million, a decrease of 77 percent on the $177 million spent in 2009, which included the Boddington project that was sold.
The group is also developing the new Tropicana gold mine in Western Australia, along with joint venture partner Independence Group Ltd. (30 percent). Tropicana, a greenfield discovery made by AngloGold Ashanti, is expected to deliver its first production in 2013. AngloGold Ashanti is managing the project along with a vast exploration program in the area that covers some 13,500km2 of tenements along a 600 kilometer strike length, considered one of the most prospective regions for new gold discoveries in Australia.
The Ore Reserve for Australasia, attributable to AngloGold Ashanti, totaled 3.74 million ounces at year-end.
Exploration in the Australasia region was conducted in the Cornelia Range, in Western Australia, and in the Solomon Islands. For further information on the group’s exploration program in Australasia, see the Global exploration section of this report.
AUSTRALIA
SUNRISE DAM
Description:The Sunrise Dam gold mine is located in the northern goldfields of Western Australia, 220 kilometers northeast of Kalgoorlie and 55 kilometers south of Laverton.

The mine consists of a large open pit which is now in its fourteenthsixteenth year of operation, and an underground mine which began in 2004. Mining is conducted by contractors and the ore is treated in a conventional gravity and CILcarbon-in-leach (CIL) processing plant, which is owner-managed.

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managed by AngloGold Ashanti. Power to the mine is self-generated. The CIL processing plant has a nameplate capacity of 2.5 million tonnes per annum.


Geology

Geology: Gold ore at Sunrise Dam is structurally and lithologically controlled within gently dipping high strain shear zones (for example, Sunrise Shear) and steeply dipping brittleductile low strain shear zones (for example, Western Shear). Host rocks include andesitic volcanic rocks, volcanogenic sediments and magnetic shales.
Operating and production data for Sunrise Dam
             
  2010  2009  2008 
 
Pay limit (oz/t)  0.14   0.08   0.09 
Pay limit (g/t)  4.32   2.45   2.79 
Recovered grade (oz/t)(2)
  0.094   0.084   0.101 
Recovered grade (g/t)(2)
  3.22   2.87   3.46 
Gold production (000 oz)  396   401   433 
Total cash costs ($/oz)(1)
  692   631   559 
Total production costs ($/oz)(1)
  773   738   665 
Capital expenditure ($ million)  29   31   19 
Employees(3)
  93   99   77 
Outside contractors(3)
  401   356   333 
All injury frequency rate  13.65   8.94   15.85 
 
(1)Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”.
(2)Open-pit operations.
(3)Average for the year.
Operating review:Production in 2010 decreased by 1 percent to 396,000 ounces, from 401,000 ounces the previous year. This was equivalent to 9 percent

THE AMERICAS

UNITED STATES OF AMERICA

United States of group gold production. The decline reflects the marginally lower average grade of ore processed as anticipated in the mine plan. Open-pit mining continued in the North Wall Cutback providing over 80 percent of production. Ore continued to be sourced from a combination of underground and open pit operations with the use of lower-grade stockpiles to supplement the ore feed to the plant.

Underground tonnage decreased by 12 percent, or 94,000 tonnes, to 686,000 tonnes. Underground ore yielded approximately 75,000 ounces, contributing 19 percent to total mine production compared with 28 percent, or 111,000 ounces, the previous year.
Total cash costs increased by 10 percent to $692 per ounce, from $631 per ounce in 2009.
Capital expenditure for the year was $29 million, a decrease of 6 percent on the previous year.
Growth prospects:The North Wall Cutback will continue to supply ore to the plant until the second half of 2012, which is a year longer than originally planned. Ore from the cutback will be blended with ore from stockpiles and from the underground mine.
The contribution from the underground mine is planned to increase in 2011. As a result, a paste fill plant has been constructed to enable larger orebodies to be fully extracted. Continued exploration and advances in geological understanding have also resulted in further growth of underground Mineral Resources.
Underground Ore Reserves decreased to 0.85 million ounces after depletion. Due to the time required to convert Mineral Resources to Ore Reserves, it is anticipated that Ore Reserves will increase in 2011. The mine’s total Ore Reserve at year-end was 1.38 million ounces.
Sustainability
Safety:Safety performance at Sunrise Dam reached a plateau during 2010 with an all injury frequency rate of 13.65 per million hours worked (2009: 8.94). There were no fatalities during the year.
Training in hazard identification and risk assessment was the focus at Sunrise Dam over the course of 2010. In addition, training aimed at providing an open, transparent culture of safety and safety systems, was undertaken in: risk management; values-based safety leadership; role clarity and personal accountability, open, transparent and learning safety culture; and safety systems.

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In May, the Sunrise Dam team won the 2010 Chamber of Minerals and Energy Surface Emergency Response competition for the second year in a row. In addition, the Emergency Response Team went on to win the Underground Emergency Response competition in November.
Community:Sunrise Dam continues to support the Laverton community through its involvement with the Laverton Mining Liaison Committee and Shire Council. AngloGold Ashanti also has representation on the Laverton Leonora Cross Cultural Association (LLCCA) and contributes to the Mt Margaret Mission and Laverton School lunch programs. An Indigenous People’s Engagement strategy is being progressed by the company’s cross functional team with support from an external representative.
Environment:A mine closure plan is in place and progressive rehabilitation in line with this plan is being undertaken. Governance reporting for Energy Efficiency Opportunity, National Greenhouse and Energy Reporting, and National Pollutant Inventory is being maintained and is in compliance with government regulations.
No reportable environmental incidents took place in 2010.
Tropicana
Description:The Tropicana Gold Project (TGP) is part of a joint venture between AngloGold Ashanti (70 percent interest and manager) and Independence Group (30 percent). The project is located 330 kilometers east-northeast of the mining service centre, Kalgoorlie, in Western Australia and 200 kilometers east of AngloGold Ashanti’s Sunrise Dam Gold Mine. The area is remote and infrastructure is limited.
The boards of AngloGold Ashanti and Independence approved development of the TGP in November 2010.
Tropicana was discovered in 2005 in an area not previously thought to be prospective for gold, and represents the most significant gold discovery in Australia for more than a decade.
The Tropicana joint venture’s first mover advantage has enabled it to peg tenements over the bulk of what is now recognized as a major new gold province, whilst ownership of the first processing plant in the Tropicana Belt will put the joint venture in a strong strategic position to leverage value from future discoveries.
The approved project will utilize conventional open-cut mining methods to mine the Tropicana and Havana deposits and conventional carbon-in-leach processing technology to process the ore at a rate of 5.8 million tonnes per annum.
Besides the processing plant and mining area, project infrastructure will include 220 kilometers of new road, a water bore field, a sealed airstrip and an accommodation village.
Average annual gold production is anticipated to be 330,000 ounces to 350,000 ounces (100 percent project) over the life of the mine and 470,000 ounces to 490,000 ounces per annum (100 percent project) over the first three years, when higher grade ore will be processed.
Geology:The Tropicana deposit comprises two known mineralized zones, the Tropicana zone to the north and Havana zone to the south. Together the known mineralized zones define a system that extends over a 4 kilometer strike length. The lenses have been tested to a vertical depth of 350 meters to 400 meters, and are open down dip. The Tropicana and Havana zones are grossly “stratiform” within the preferred gneissic host sequence. Havana zone consists of multiple stacked lenses, whereas Tropicana comprises one main mineralized lens.
Growth prospects:A feasibility study is under way to determine the viability of open-cut mining of the Boston Shaker deposit, immediately north of the proposed Tropicana pit, following encouraging results from scoping studies. A prefeasibility study on underground mining of the Havana Deeps mineralization beneath the proposed Havana pit will commence in 2011.
Sustainability
The processing plant has been designed to be energy and water efficient. The mine will utilize high pressure grinding rolls which use less energy than conventional ball or SAG milling. Leach and tailings thickeners will be used to recover and recycle process water, and grey water from the village will be recycled for use in the processing plant.
Community:The proposed project will provide employment in the local community and goods and services will be procured from local businesses wherever possible. Tropicana will also generate royalties and taxes for the state and federal governments.

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Consultation with key community groups has been under way for several years. A full spectrum of stakeholder consultation commenced very early in 2008, well before the project was referred to the Western Australian Environmental Protection Agency later that year. The joint venture held several public meetings in Perth, Kalgoorlie and Menzies during the various phases of the approvals process to address community concerns on an ongoing basis. Regular meetings are also held through the joint venture’s Indigenous Reference Group to keep members of the Aboriginal community informed about the development of the project, including heritage matters and employment and contracting opportunities when they arise.
Environment:Significant environmental baseline surveys were conducted between 2006 and 2009 to understand key environmental and heritage values. This information was used to design a project that avoids all known populations of Declared Rare Flora and Archaeological Heritage Sites and minimizes impacts on priority and threatened flora and fauna habitats. The project was referred to the Western Australia Environmental Protection Authority and the Commonwealth government in the first half of 2008. The project underwent a public environmental impact assessment in the second half of 2009 and received state and Commonwealth approval towards the end of 2010.

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THE AMERICAS
AngloGold Ashanti owns theAmerica – Cripple Creek & Victor mine in the United States, the Cerro Vanguardia mine in Argentina, the

Description

AngloGold Ashanti Córrego do Sítio Mineração (AGA Mineração) and Serra Grande operations, both in Brazil. The Americas represents an important growth region for AngloGold Ashanti.

Combined production from these operations increased by 3 percent to 842,000 ounces of gold in 2010. This was equivalent to 19 percent of group production. In all, 6,582 people including contractors, were employed, 698 more than in 2009. Total capital expenditure for the region was $309 million, an increase of 20 percent on the $257 million spent in 2009.
AngloGold Ashanti also conducts an extensive greenfield program across the Americas, most notably in Colombia, where it holds a significant land position and has made two greenfield discoveries — Gramalote and La Colosa. The company also has exploration activities, either conducted by its own teams or with joint venture partners,100 percent interest in Canada, Brazil and Argentina, among others.
AngloGold Ashanti’s Americas region fully endorses the company’s objective to eliminate workplace injuries, incidents and illnesses across its operations. As in the previous year, no fatal injuries occurred in 2010. Underpinning this performance has been a significant reduction in the total number of safety-related incidents, where an all injury frequency rate of 5.66 per million hours worked was achieved during the year. This represents a 21 percent reduction when compared with 2009 and a 43 percent improvement since 2008 (2009: 7.12 and 2008: 9.92).
UNITED STATES OF AMERICA
(GRAPHIC)
Cripple Creek & Victor (CC&V) Gold Mining Company (CC&V) is AngloGold Ashanti’s sole active operation in the United States.

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Cripple Creek & Victor
Description:LocatedCompany’s Cresson Project, located in the state of Colorado in the United States, CC&V’s Cresson Project is an open-pitStates. A surface mining operation which treats extractedprovides ore throughto a heap-leach pad,crusher and isvalley-leach facility, one of the largest in the world. Production at this operationhere began in 1994. AngloGold Ashanti holds a 100 percent interest in CC&V.
In 2009, construction began onProduction from the mine life extension (MLE1) project. The project, will provide four additional years of productionwhich involved expanding capacity toat the heap-leach pad. Productionpad, began in 2011. A further life extension and production expansion project (MLE2) was approved in 2012. The power for the mine is purchased from the expanded heap-leach pad area is expected to beginBlack Hills Energy. The mine became operational in 2011 and proceed through to 2016 at current1976. The mine production rates.
has been operated by AngloGold Ashanti since 1999.

Geology:

The district of Cripple Creek is centered on an intensely altered alkaline, Tertiary-aged, diatreme-volcanic, intrusive complex, approximately circular in shape covering 18.4 square kilometers and surrounded by Precambrian rocks. The Precambrian rocks consist of biotite gneiss, granodiorite and quartz monzonite and granite.

The intersection of these four units and regional tectonic events formed an area of regional dilation which subsequently facilitated the formation of the volcanic complex. The majority of the complex then in-filled with the eruptive phase Cripple Creek Breccia host rock. This complex was subsequently intruded by a series of intrusive dykes and sills that include syenites, phonolites, phonotephrites and lamprophyres. These intrusives occupy all of the dominant district structural orientations. District structures are generally near vertical and strike north-north-west to north-east. These structures acted as primary conduits for the late-stage gold mineralizing solutions. Higher grade pods of mineralization occur at structural intersections and/or as sheeted veins along zones of strike deflection. High-grade gold mineralization is associated with K-feldspar + pyrite +/- carbonate alteration and occurs adjacent to the major structural and intrusive dyke zones. The broader zones of disseminated mineralization occur primarily as micro-fracture halos around the stronger alteration zones in the more permeable Cripple Creek Breccia wall rocks.

The average depth of oxidation is 120 meters and is also developed along major structural zones to even greater depths. Individual orebodies can be tabular, pipe-like, irregular or massive. Individual gold particles are generally less than 20 microns in size and occur as native gold with pyrite or native gold after gold-silver tellurides. Gold occurs within hydrous iron and manganese oxides and as gold-silver tellurides. Silver is present but is economically unimportant. Gold mineralization can be encapsulated by iron and manganese oxides, pyrite, K-feldspar alteration and quartz.

Cripple Creek & Victor Summary of metallurgical operations

Gold plants
Capacity (000 tonnes/month)
- crushed ore production1,739
- total ore production1,796
- solution processed2,371
Operating and production data for Cripple Creek & Victor operations
             
  2010  2009  2008(3) 
 
Pay limit (oz/t)  0.007   0.005   0.01 
Pay limit (g/t)  0.23   0.17   0.34 
Recovered grade (oz/t)  0.013   0.013   0.014 
Recovered grade (g/t)  0.43   0.46   0.49 
Gold production (000 oz)  233   218   258 
Total cash costs ($/oz)(1)
  500   371   310 
Total production costs ($/oz)(1)
  901   743   643 
Capital expenditure ($ million)  73   87   27 
Employees(2)
  403   367   350 
Outside contractors  243   195   71 
All injury frequency rate  12.26   15.80   30.19 

(1)

Gold plants

  Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”.
 
(2)

Capacity (000 tonnes/month)

  Average for the year.
(3)

- crushed ore production

  Remaining 33 percent shareholding acquired effective July 1, 2008.1,632

- total ore production

1,814

- solution processed

2,627

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Operating review:Production increased by 7 percent to 233,000 ounces from 218,000 ounces in 2009. A total of 20.7 million tonnes of ore was placed on the heap-leach pad, compared with 18.7 million tonnes in 2009.
The increase in production resulted from the greater availability of the pad area near the liner following the removal of a truck load-out bin to another location. This change shortened the percolation time of the gold-bearing solution from the ore placed in this small, newly-lined area. In addition, successful test programs were undertaken to improve leach conditions at depth via deep injection into the pad to remediate an issue identified during the 2008 pad drilling program. The injected solution improves alkalinity and cyanide availability at depth to allow favorable conditions for leaching residual gold into solution. The injection programs are to be expanded, given their early success. Given the size of the pad, recovery of residual gold is expected to continue for several years.
Total cash costs increased 35 percent to $500 per ounce, due primarily to the higher unit cost for the new ounces placed, rising commodity prices (diesel fuel in particular), and increased royalty costs, driven by higher gold prices.
Capital expenditure for the year amounted to $73 million (2009: $87 million), spent mainly on equipment and pad facilities for the implementation of the MLE1 project.
Growth prospects:In 2008, CC&V was granted permits from the State of Colorado and Teller County for a mine-life extension (MLE1) that includes the development of new sources of ore and an extension to the heap-leach facility. The permits extend the operation of the expanded valley leach facility and closure and reclamation activities. Development drilling continues to further define areas of interest. Engineering analysis and permitting requirements were evaluated as part of a study for a second mine-life extension (MLE2) completed in late 2010. This new project which will involve milling the higher-grade ores and heap-leaching the lower-grade ores in a new valley leach facility, could extend the mine life to 2025 and possibly beyond.
Sustainability
Safety:CC&V continued to report a strong safety performance. The all injury frequency rate for 2010 improved to 12.26 per million hours worked (2009: 15.80). There were no fatalities during the year.
CC&V has implemented various safety programs in recent years, including the Safety Transformation Program in 2009. In 2010, the mine developed and implemented its own Safety & Environmental Observation Program where all employees provide written observations on best practices, as well as on deficiencies at the operation. In addition to immediate responses to these deficiencies, the employees’ observations are reviewed and acted on by the management team at weekly meetings. The programs have been implemented to ensure continued improvement in the safety performance at CC&V. Project ONE was rolled out in 2009 and further positive results are expected over the two-year implementation process.
Community:CC&V and the Victor Lowell Thomas Museum finished a successful season of mine site tours. The museum managed reservations, safety training and advertising while CC&V provided tour guides and buses. Tour fees collected were donated to the museum. The 2010 tours were 96 percent full, doubling revenues and visitation for the museum. The greater number of visitors to the museum has increased Victor’s foot traffic, leading to increased sales for local businesses. This initiative by CC&V contributes to the town’s viability and sustainability.
Environment: CC&V continued to be recognized as a Gold Leader in the State of Colorado’s Environmental Leadership Program, the first mine in Colorado to attain that level of recognition. In addition, CC&V’s Environmental Management System was again recommended for continued certification under the ISO 14001 standard. In September 2010, the operation was recognized by the International Cyanide Management Institute (ICMI) to be recertified “In Full Compliance” on all nine principles of the International Cyanide Management Code (ICMC). No reportable environmental incidents took place in 2010.

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SOUTH AMERICA
(GRAPHIC)
AngloGold Ashanti has three operations in South America —

ARGENTINA

Argentina – Cerro Vanguardia in Argentina and AngloGold Ashanti Córrego do Sítio Mineração (AGA Mineração) and Serra Grande in Brazil.

AngloGold Ashanti has had an active exploration program in Colombia for some years, with the most favorable of the prospects being in the La Colosa district. The exploration programs in Argentina and Brazil were recently expanded.
ARGENTINA
CERRO VANGUARDIA
Description:

Description

AngloGold Ashanti has a 92.5 percent interest in Cerro Vanguardia with Fomicruz (the province of Santa Cruz) owning the remaining 7.5 percent. Located to the northwest of Puerto San Julian in the province of Santa Cruz, Cerro Vanguardia consists of multiple small open pits with high stripping ratios.pits. Shallow underground mining began in 2010 to access high-grade material and accounts for about 19 percent of the mine’s production. The orebodies comprise a series of hydrothermal vein deposits containing gold and large quantities of silver, which is mined as a by-product.

Ore is processed at the metallurgical plant which has a capacity of 3,000 tonnes per day and includes a cyanide recovery facility. Technology atPower for the plantmine is based on a conventional leaching process in tanks and carbon-in-leach with a tailings dam incorporated in a closed circuit.self-generated but operated by an external contractor. The final recovery of gold and silver is achieved through a Merryl Crowe method with metallic zinc.

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mine has been operated by AngloGold Ashanti since 1998.


Geology

Geology: The oldest rocks in this part of Patagonia are metamorphics of the Precambrian-Cambrian age. These are overlain by Permian and Triassic continental clastic rocks which have been faulted into a series of horsts and grabens and are associated with both limited basaltic sills and dykes and with calc-alkaline granite and granodiorite intrusions. Thick andesite flows of Lower Jurassic age occur above these sedimentary units. A large volume of rhyolitic ignimbrites was emplaced during the Middle and Upper Jurassic age over an area of approximately 100,000 square kilometers.100,000km2. These volcanic rocks include the Chon Aike formation ignimbrite units that host the gold bearing veins at Cerro Vanguardia. Post-mineral units include Cretaceous and Tertiary rocks of both marine and continental origin, the Quaternary La Avenida formation, the Patagonia gravel and the overlying La Angelita basalt flows. These flows do not cover the area of the Cerro Vanguardia veins.

Gold and silver mineralization at Cerro Vanguardia occurs within a vertical range of about 150 meters to 200 meters in a series of narrow, banded quartz veins that occupy structures within the Chon Aike ignimbrites. These veins form a typical structural pattern related to major north-south (Concepcion) and east-west (Vanguardia) shears. Two sets of veins have formed in response to this shearing — oneshearing. One set of veins strikes about N40W and generally dips 65 to 90 degrees to the east; while the other set strikes about N75W and the veins dip 60 degrees to 80 degrees to the south.

The veins are typical of epithermal, low-temperature, adularia-sericite character and consist primarily of quartz in several forms: as massive quartz, banded chalcedonic quartz, and quartz-cemented breccias. Dark bands in the quartz are due to finely disseminated pyrite, now oxidized to limonite. The veins show sharp contacts with the surrounding ignimbrite which hosts narrow stockwork zones that are weakly mineralized and appear to have been cut by a sequence of north-east-trending faults that have southerly movement with no appreciable lateral displacement.

Operating and production data for Cerro Vanguardia
             
  2010  2009  2008 
 
Pay limit (oz/t)  0.13   0.12   0.19 
Pay limit (g/t)  4.36   4.17   6.39 
Recovered grade (oz/t)  0.178   0.190   0.159 
Recovered grade (g/t)  6.11   6.51   5.44 
Gold production (000 oz) 100 percent  209   208   166 
Gold production (000 oz) 92.50 percent  194   192   154 
Silver production (000 oz) 100 percent  2.8   2.2   1.7 
Silver production (000 oz) 92.50 percent  2.6   2.0   1.6 
Total cash costs ($/oz)(1)
  366   359   617 
Total production costs ($/oz)(1)
  521   495   747 
Capital expenditure ($ million) 100 percent  41   18   16 
Capital expenditure ($ million) 92.50 percent  38   17   15 
Employees(2)
  883   753   756 
Outside contractors(2)
  359   316   316 
All injury frequency rate  8.08   9.34   9.72 
 
(1)Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”.
(2)Average for the year.
Operating review:Attributable gold production of 194,000 ounces was marginally up on the previous year. The mine’s production strategy focused on ensuring 100 percent supply of plant feed.
Cerro Vanguardia was the group’s lowest cost producer in 2010. Cash costs of $366 per ounce were 2 percent higher than the $359 per ounce in 2009, chiefly reflecting increased labor costs and the impact of local inflationary pressures. Higher spot prices and increased royalties also contributed to the higher costs but were partially offset by higher silver credits. The stockpile movement was favorable as a consequence of higher ore tonnes mined compared with last year.
Capital expenditure totaled $41 million (attributable $38 million) (2009: $18 million or $17 million attributable). Capital expenditure focused primarily on underground development, heap leach construction and exploration activities, all of which will have a beneficial impact on Cerro Vanguardia’s life and improve its production profile.

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BRAZIL

Growth projects:The underground mine project was launched in July. Underground development excavation reached 3,800 meters at the end of 2010. Three mine portals were opened in Mangas Norte, Osvaldo CB4 and Osvaldo CB9.
The implementation of the heap leach project will enable Cerro Vanguardia’s annual gold production to increase by 20,000 ounces, maintaining total production at around 200,000 ounces by enabling the processing of low-grade material. Cerro Vanguardia’s marginal-grade ores, below the cut-off grade of the current plant process, range from 0.35g/t to 1.5g/t. Project implementation will start in mid 2011.
The 2011 exploration program is based on 31,000 meters of diamond drillholes and 17,000 meters of reverse circulation holes. The program aims to expand the mine’s Mineral Resource at depth and to the north and west of the concession.
Sustainability
Safety:Cerro Vanguardia’s safety performance improved during the year under review. For the eighth consecutive year no fatalities were recorded, while the all injury frequency rate improved to 8.08 per million hours worked (2009: 9.34), the best performance ever for the mine.
The Safety Transformation Program is to be implemented during the first quarter of 2011.
Cerro Vanguardia’s brigade members received theoretical and practical training on underground mining rescue procedures at a training course in Copiapo, Chile.
Community:The Development Agency is one of the major programs the mine shares with the local community of Puerto San Julian. This year it was agreed that the funds to sponsor these activities will be revised in line with the mine’s profitability. The application of these funds will be agreed between the Development Agency representatives, the mayor and a representative from the mine.
Environment:All of Cerro Vanguardia’s environmental initiatives and ISO 14001 certification were maintained. One reportable environmental incident took place during 2010. An excavator ruptured a buried tailings pipeline, spilling 10m3of tailings containing cyanide solution. The spillage was cleaned up and measures implemented to prevent a recurrence.
Cerro Vanguardia will apply for Cyanide Code certification during the first half of 2011.
BRAZIL
The two AngloGold Ashanti assets in Brazil are AngloGold Ashanti Córrego do Sítio Mineração (AGA Mineração) and Serra Grande.

Description

AngloGold Ashanti Córrego do Sítio Mineração (AGA Mineração)

Description:Reorganization of comprises two operational units, namely the corporate structure was completed during the first half of the year, combining the Cuiabá/Lamego/Queiroz and the Córrego do Sítio complexes. The Cuiabá complex includes the Cuiabá and São Bento operationsLamego mines and the Cuiabá and Queiroz plants. In operation for 27 years, the Cuiabá mine is principally a cut-and-fill mine accessed by ramp and shaft. Lamego is a new mine developed to capturemine an underground sulfide ore. The first stage of the processing of the ore from Cuiabá and Lamego mines is in the gold plant at the Cuiabá complex, where concentrate is produced. The material is then transported 15 kilometers by aerial ropeway to the Queiroz plant where milling, flotation, roasting, leaching, precipitation and refining occur. Total capacity of the complete circuit is 1.7 million tonnes per year and recoveries of 93 percent are achieved. Power for the mine is both self-generated and supplied by Cemig a stated owned company. The Cuiaba mine became operational in 1988 and the Lamego mine in 2009. However some of the older mines which are now closed have been operating and financial synergies. since 1834.

The new company is called AngloGold Ashanti Córrego do Sítio Mineração (AGA Mineração).

The wholly owned AGA Mineração mining complex is locatedoperation comprises one surface (oxide) and two underground (sulfide) mines, as well as a heap leach pad and sulfide plant, the latter originally acquired from Eldorado late in southeastern Brazil,2008 was refurbished and brought into operation in the state of Minas Gerais, close to the city of Belo Horizonte, with operations in the municipalities of Nova Lima, Sabará and Santa Bárbara.
Ore is sourced from the Cuiabá and Lamego underground mines and processed at the Cuiabá and Queiroz plants, while the Córrego do Sítio open pit mine has a heap-leaching facility.
January 2012.

Geology:

The area in which Brasil Mineração is located is known as the Iron Quadrangle and is host to historic and current gold mining operations, as well as a number of open-pit limestone and iron ore operations. The geology of the Iron Quadrangle is composed of Proterozoic and Archaean volcano-sedimentary sequences and Pre-Cambrian granitic complexes. The host to the gold mineralization is the volcano-sedimentary Nova Lima Group (NLG) that occurs at the base of the Rio das Velhas SuperGroup (RDVS). The upper sequence of the RDVS is the meta-sedimentary Maquiné Group. Cuiabá mine, located at Sabara Municipality, has gold mineralization associated with sulfides and quartz veins in Banded Ironstone Formation (BIF) and volcanic sequences. At this mine, structural control and fluids flow ascension are

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the most important factors for gold mineralization with a common association between large-scale shear zones and their associated structures. Where BIF is mineralized the ore appears strongly stratiform due to the selective sulfidation of the iron rich layers. Steeply plunging shear zones tend to control the ore shoots, which commonly plunge parallel to intersections between the shears and other structures.

The controlling mineralization structures are the apparent intersection of thrust faults with tight isoclinal folds in a ductile environment. The host rocks at Brasil Mineração are BIF, Lapa Seca and mafic volcanics (principally basaltic). Mineralization is due to the interaction of low salinity carbon dioxide rich fluids with the high-iron BIF, basalts and carbonaceous graphitic schists. Sulfide mineralization consists of pyrrhotite and pyrite with subordinate pyrite and chalcopyrite; the latter tends to occur as a late-stage fracture fill and is not associated with gold mineralization. Wallrock alteration is typically carbonate, potassic and silicic.

Brazil Summary of metallurgical operations

             
  AngloGold Ashanti Mineração    
  Cuiabá  Raposos  Serra Grande 
Gold plants Capacity (000 tonnes/month)
  135   26   66 
Operating and production data for AGA Mineração
             
  2010  2009  2008 
 
Pay limit (oz/t)  0.13   0.08   0.15 
Pay limit (g/t)  4.40   2.69   5.16 
Recovered grade (oz/t)(1)
  0.210   0.205   0.222 
Recovered grade (g/t)(1)
  7.21   7.02   7.62 
Gold production (000 oz)  338   329   320 
Total cash costs ($/oz)(2)
  444   347   322 
Total production costs ($/oz)(2)
  683   492   450 
Capital expenditure ($ million)  142   84   69 
Employees(3)
  2,486   2,249   1,954 
Outside contractors(3)
  940   715   1,033 
All injury frequency rate  2.62   4.19   5.79 
(1)Recovered grade represents underground operations.
(2)Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A. Operating results — Total cash costs and total production costs”.
(3)Average for the year.
Operating review:Gold production increased by 3

    Corrego do Sitio   Corrego do Sitio   AngloGold Ashanti Mineração   Serra Grande   
    Oxide   Sulfide   Cuiabá   Raposos      

Gold plants

          

Capacity (000 tonnes/month)

   38       50       138       28       102    

Brazil – Serra Grande (100 percent to 338,000 ounces from 329,000 ounces in 2009, due mainly to the implementation of the Lamego project. Total cash costs increased by 28 percent to $444 per ounce, driven largely by higher maintenance costs. These effects were partially offset, however, by higher revenue from the sale of sulfuric acid, a by-product of the Cuiabá mining operation.

Capital expenditure was $142 million (2009: $84 million).
As part of the conceptual study for the Cuiabá Future Project, which is investigating ways of sustaining performance in the longer term, actions were taken to enhance production from underground ore and waste transport logistics and to investigate alternative mining methods. A study was conducted in support of this initiative to define the best technical approaches regarding transport logistics (large truck capacity, conveyor and new shaft) that will be detailed throughout 2011, in parallel with the conceptual mining methods study.
The management maintenance program continued its focus on the optimization of costs and also on improving fleet availability. Efforts have been made since January 2010 to improve the maintenance management process for heavy mobile equipment at Cuiabá. In addition to the implementation of Project ONE, an integrated maintenance management system is ongoing and all efforts are organized into two strategies: short-term results focused on costs and equipment availability and medium- to long-term results focused on SIGM Pyramid (maintenance management process). These initiatives resulted in a 7 percent improvement in the performance of sponsored heavy mobile equipment during the year.

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Further productivity improvements are expected from Project ONE. Previous implementation experiences show that the successful stabilization of the work management portion can help operations to improve key parameters from the historical average to the 75th percentile of production rate.
Growth projects:An exploration program is currently under way on the former São Bento property, acquired in December 2008 from Eldorado Gold. The property adjoins AngloGold Ashanti’s existing Córrego do Sítio mine which, together with São Bento, has been renamed Córrego do Sítio Mineração. Phaseeffective July 1, of the Córrego do Sítio project, approved by the board in May 2010 with estimated capital expenditure of $195 million, covers the Laranjeiras, Carvoaria Velha and Cachorro Bravo orebodies with trial mining at the latter already completed. The capital project is proceeding according to schedule. The initial focus of the project team is on the refurbishment of the São Bento plant, the ramp-up in mine production and construction of infrastructure, including the new road to transport ore and waste. Annual production from Phase 1 is planned to start in 2011, following a mine and plant ramp up and will continue at an average of 140,000 ounces a year for the initial 11-year life of mine. The second phase of this project has the potential to increase production through the addition of Mineral Resources and the expansion of the plant. The scope and size of the expansion will depend on the results of exploration drilling currently under way.
The Lamego project, approved in September 2009, is currently being implemented. Production from the mine rose from 18,000 ounces in 2009 to 35,000 ounces in 2010, with full production of 47,000 ounces scheduled for 2011. Lamego is expected to produce approximately 469,000 ounces of gold over nine years from 3.2 million tonnes of milled ore.
A feasibility study on the Nova Lima Sul Project, which involves the restart of the mothballed Raposos mine, is being prepared for submission to the board in mid 2011. If approved, the implementation will start late in 2011, with refurbishment of the underground infrastructure and construction of a new ventilation system. Mine development will take place in 2012, and 2013 with production scheduled to begin in 2014.
Sustainability
Safety:A vastly improved safety performance during 2010 resulted in an all injury frequency rate of 2.62 per million hours worked for the year (2009: 4.19). There were no fatalities.
After taking into account the results of a survey conducted during December 2009 to assess attitudes toward safety, an integrated strategic safety program was designed to address deficiencies, drive further improvements and reinforce awareness of the importance of working safely. The plan is based on optimizing technology to reduce workers’ exposure to risks in the production process and on introducing controls that account for human fallibility in overall safety performance.
Cuiabá completed construction of the refrigeration plant on surface with zero lost-time injuries.
AngloGold Ashanti accepted an invitation to participate in the Brazilian Mining Association’s Safety and Health Strategic Group, which aims to promote institutional actions to ensure improved competitive conditions for Brazilian mining companies.
Community:AngloGold Ashanti is the first mining company in Brazil to receive Social Responsibility (NBR 16001) certification according to the Brazilian Association of Technical Standards (ABTN). ABTN is a private non-profit organization and a founding member of the International Organization for Standardization, the Pan-American Standards Commission and the Asociación Mercosur de Normalización.
A Portuguese-language website was developed and launched in 2010 to aid AngloGold Ashanti’s communication efforts with its Brazilian stakeholders.
The company signed contracts with 25 beneficiary institutions on the First Public Call for Projects Subscription. According to the project timetable, AngloGold Ashanti provided the funds in parallel with meetings and visits to follow up on project implementation. These projects are focused on education, job and income generation and health, and have been run in communities surrounding the group’s operations. This is a voluntary company initiative focused on local development.

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Preparations for the local sustainability report in May included a poll of stakeholder expectations. A multi-stakeholder forum included 42 participants from a variety of sectors (e.g. communities, NGOs, clients, suppliers, employees, academies, etc.) and was well received. Participants were invited to provide a critique of AngloGold Ashanti’s Social Responsibility Policy in practice. Responses included an acknowledgement that while the intentions of the policy appear favorable, it requires clarification in certain activities with regard to its local priorities, specifically: health, education, entrepreneurship and socio-economic empowerment, as well as the long-term sustainability of communities. It was also recommended that the company detail its efforts around mitigation and compensation strategies for certain key issues, including greenhouse gas emissions, mine tailings, water usage, closure, economic diversification and community empowerment. Respondents further suggested the company explicitly highlight past, present and future impacts and continue to improve and update its understanding of local social and cultural issues.
Environment:ISO 14001 environment certification was maintained during the year.
Córrego do Sítio II, the former São Bento mine, has a forest reserve which may have to be relocated in order to receive permission from the authorities to conduct exploration work on surface. A request has been submitted to the authorities and is under review.
New regulations have increased the management and cost in respect of the mine closure plan, land impacted by mining, disturbed land, taxes for water consumption, environmental compensation for the new project and especially for the impact of land clearance.
The necessary permits for the underground mine expansion at Córrego do Sítio and the license for the raising of the wall of the Cuiabá dam were granted by the Environmental Agency.
It was announced in November 2010 that AngloGold Ashanti would receive an environmental award from the Minas Gerais state government at a ceremony in February 2011. This award reflects the alignment of the company’s environmental goals and initiatives with those of the government.
No reportable environmental incidents occurred in 2010.
Serra Grande(attributablepreviously 50 percent)
Description:

Description

Serra Grande is located in central Brazil, in the state of Goiás, about 5 kilometers from the city of Crixás. AngloGold Ashanti and Kinross Gold Corporation are equal partners in this operation. In terms of the shareholders’ agreement, AngloGold Ashanti manages the operation and has the right to access a maximum of 50 percent of the earnings accrued and dividends paid by Serra Grande.

Serra Grande currently comprises three mechanized underground mines,mines: Mina III, Mina Nova — which(which includes the Pequizão orebodyorebody) and Palmeiras and an open pit aboveon the outcrop of Mina III.
The Palmeiras mine, where development began in May 2008, started production in 2009III orebody. One dedicated metallurgical plant treats ore from the primary development works.these different sources. Annual capacity of the processing circuit, which has grinding, leaching, filtration, precipitation and smelting facilities, was expanded from about 0.8 million tonnes to 1.15is 1.22 million tonnes. This expansion was completedDuring the year, AngloGold Ashanti increased its holding in February 2009.
Serra Grande from 50 percent to 100 percent. Power for the mine is supplied and purchased on the open market. The mine became operational in 1989 but has been operated by AngloGold Ashanti since 1999.

Geology:

The deposits occurare in the Rio Vermelho and Ribeirão das Antes Formations of the Archaean Pilar de Goia’s Group which together account for a large proportion of the Crixás Greenstone Belt in central Brazil.

The stratigraphy of the belt is dominated by basics and ultrabasics in the lower sequences with volcano sedimentary units forming the upper successions.

The gold deposits are hosted in a sequence of schists, volcanics and carbonates occurring in a typical greenstone belt structural setting. The host rocks are of the Pilar de Goiás Group of the Upper Archaean. Gold mineralization is associated with massive sulfides and vein quartz material associated with graphitic and sericitic schists and dolomites. The oreshoots plunge to the north-west with dips of between 6 and 35 degrees. The stratigraphy is overturned and thrusts towards the east.

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The greenstone belt lithologies are surrounded by Archaean tonalitic gneiss and granodiorite. The metamorphosed sediments are primarily composed of quartz, chlorite, sericite, graphitic and garnetiferous schists. The carbonates have been metamorphosed to ferroan dolomite marble with development of siderite and ankerite veining in the surrounding wallrock, usually associated with quartz veining. The basalts are relatively unaltered but do show pronounced stretching with elongation of pillow structures evident.

The Crixás greenstone belt comprises a series of Archaean to Palaeoproterozoic metavulcanics, metasediments and basement granitoids stacked within a series of north to north-east transported thrust sheet. Thrusting (D1) was accompanied by significant F1 folding/foliation development and progressive alteration in a brittle-ductile regime. D1 thrusting developed with irregular thrust ramp geometry, in part controlled by concealed early basin faults. The main

Crixás orebodies are adjacent to a major north-north-west structural corridor, and up the main fault ramp/corner, to become dispersed to the east and north in zones of foreland thrust flats. Fluid alteration also diminished to the west away from the main fault corner. A series of concealed east-west to north-west-south-east basement block faults may have provided secondary fluid migration, and development of early anti-formal warps in the thrust sheets; these structures probably define the quasi-regular spacing of significant mineralization within the belt. The D1 thrust stack was gently folded by non-cylindrical folds. Gold mineralizing fluids probably migrated during this event, with similar south-south-west to north-north-east migration, and focusing on bedding slip during folding. Gold mineralization became minor and dispersed to the north and east along the formal thrust flat zone. Concentrations of gold along the case of quartz vein may be due to the damming of fluids migrating upward along layering.

Operating

ORE RESERVES

The combined Proven and production data for Serra Grande

             
  2010  2009  2008 
 
Pay limit (oz/t)  0.09   0.11   0.11 
Pay limit (g/t)  3.20   3.92   3.91 
Recovered grade (oz/t)  0.118   0.132   0.200 
Recovered grade (g/t)  4.05   4.52   6.85 
Gold production (000 oz) 100 percent  155   154   174 
Gold production (000 oz) 50 percent  77   77   87 
Total cash costs ($/oz)(1)
  481   429   299 
Total production costs ($/oz)(1)
  688   571   402 
Capital expenditure ($ million) 100 percent  52   67   41 
Capital expenditure ($ million) 50 percent  26   33   20 
Employees(2)
  965   864   725 
Outside contractors(2)
  303   425   383 
All injury frequency rate (per million hours worked)  7.22   8.99   13.34 
 
(1)Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”.
(2)Average for the year.
Operating review:Attributable productionProbable Ore Reserve of 77,000 ounces was unchanged from the previous year.
Total cash costs increased 12 percent to $481 per ounce, due mainly to local currency appreciation and inflationary pressure.
In May, Serra Grande underwent re-evaluation of its mine plan and the production program was revised. The tonnages mined remained unchanged, while plant throughput exceeded the 30,000 tonnes initially planned. The feed grade was 13 percent lower than expected for the year. Despite these challenges, the total cash cost for the year was only 2 percent higher than forecast.
Attributable capital expendituregroup amounted to $26 million (2009: $33 million attributable).
Growth prospects:A total of 32,447 meters was drilled in the 2010 exploration program, which focused on Pequizão, Palmeiras and Cajueiros targets at a cost of more than $5 million. The exploration team has reviewed both geological mapping and the database, including agreements with joint venture partners, in order to assist in new target generation.

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The Pequizão orebody has shown potential for increased Mineral Resource both down plunge and along strike. The infill drilling campaign confirmed previous results and the deepest hole showed a high-grade intersection 850 meters deep, keeping the down plunge potential totally open. At the Cajueiro target, drilling was undertaken to understand mineralized structure controls. Preliminary results have confirmed the low-grade potential. During the third quarter of 2010, the Magnetoteluric geophysical method was tested at Mina III, aiming to define the structure III geometry below level 1,000. The preliminary results are being evaluated by specialists.
In 2011, a fast-track exploration program is planned to define and evaluate the complete potential of mine targets at Pequizão, Palmeiras, Orebody IV and Mina Nova and also to generate new targets in the northwest structure and joint venture partner areas. More than 70,000 meters of drilling is planned in this program, including underground and surface drilling as well as geochemical and geophysical surveys to support target generation.
Sustainability
Safety:Safety performance at Serra Grande improved in 2010 with an all injury frequency rate of 7.22 per million hours worked (2009: 8.99) recorded for the year. There were no fatalities recorded for the second consecutive year.
Continuous investments were made during the year in the development of a safety culture across the workforce. All leadership at site underwent seven modules of training with specialist consultants about the nature of human behavior, how to enhance safety awareness in the workplace and a one-on-one safety approach to work on a daily basis.
Significant investments in technology for safety were made in 2010 and a second scaler to remove rock from the roof and galleries was acquired.
There was increased use of sub-level mining methods during the year in order to minimize the exposure of people at the stope face. Serra Grande currently uses four remote-controlled loaders and Simbas for longer drilling. The ventilation system at the mine was upgraded using raise borer drilling.
Radio communication was installed in mobile equipment and a dispatch system implemented in all Serra Grande’s mines.
Community:Continuous support was given to local social institutions that assist people, especially children and those with special needs. Support was also given to cultural and religious celebrations and to the restoration of historical buildings to protect the city’s heritage, including an old house dating from the 1700s when the first miners arrived in the area. Donations were made to: the Association of Parents and Friends of Disabled Children; an amateur acting school for youngsters; free soccer lessons for 102 children; and the support of a day care centre that caters for 165 children every day.
Environment:Reviews were undertaken of all safety, health and environmental-related measurements such as water, air, dust, noise and vibration after blasting to ensure compliance with international standards.
Improvements in water usage controls across all industrial processes were developed and locations for all meters were identified with several having been installed by year-end. This will allow improved control of water usage. About 80 percent of all water used in the production process is currently recycled.
No reportable environmental incidents occurred in 2010.

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GLOBAL EXPLORATION
(GRAPHIC)
Greenfield exploration
An expansive greenfield exploration program was undertaken during 2010 in Australia, China, North and South America, the Middle East and North Africa (MENA), Sub-Saharan Africa and South East Asia. A total of 276,346 meters of diamond, reverse circulation, and aircore drilling was completed in testing existing priority targets and in the delineation of new targets in Australia, Colombia, the Solomon Islands, Gabon, Guinea, Egypt, the Democratic Republic of the Congo (DRC) and Canada. This compares to 183,481 meters drilled the previous year.
Greenfield activities were undertaken through joint ventures, strategic alliances and on wholly owned ground holdings. The principal objective of the greenfield exploration team is value creation through the discovery of new long-life, low-cost mines that maximize shareholder value. Discoveries and ground positions that do not meet certain investment criteria are joint-ventured or divested to maximize AngloGold Ashanti’s return on its exploration investment.

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Strategic context
AngloGold Ashanti’s greenfield exploration strategy maintains a balanced portfolio and a pipeline of projects at various stages of exploration. Importantly, this requires diversification across new frontiers, emerging regions and known terranes. The range of ownership and partnership structures employed by AngloGold Ashanti helps to achieve the desired variety of targets envisaged in this strategy. Important components for new discoveries and effective resource targeting include securing new search spaces and strategic land holdings while maintaining a balanced portfolio.
AngloGold Ashanti’s global exploration portfolio includes strategic world-class holdings in Colombia and Australia, where the company has progressed frontier exploration from broad geological concepts to major discoveries of the La Colosa and Tropicana-Havana deposits, two of the worlds’ largest virgin gold finds of recent times. In addition, the dominant strategic land holdings of some 44,838km2 in Australia and 15,815km2 in Colombia have the potential to yield further significant new discoveries.
In the Middle East and North Africa, AngloGold Ashanti and its strategic alliance partner, Thani Investments, have made significant progress in building a regional tenement portfolio in Egypt and Eritrea. The Thani Ashanti Alliance Company is also conducting project generation in Saudi Arabia and has entered into an exploration joint venture with Stratex International in Ethiopia and Djibouti. Once again, AngloGold Ashanti has been ahead of the curve in anticipating the importance of these regions, allowing it to gain early mover advantage ahead of several of its peers.
In Sub-Saharan Africa, the focus is on new opportunities in Gabon and Tanzania, in addition to the Kilo project in the DRC and regional exploration around Siguiri in Guinea.
Work undertaken in 2008 and 2009 to rebuild a balanced exploration portfolio is starting to produce the desired results. In 2009, drilling activities were restricted to three countries as a result of changes in legislation and evolving risk profiles in the remaining countries. In 2010, however, a total of 276,346 meters was drilled in nine countries, including, Argentina, Colombia, Canada, DRC, Guinea, Gabon, Australia, Solomon Islands and Egypt, as the company began to leverage its exploration land holdings to greater effect.
Achievements
Significant achievements for 2010 included the successful completion of the scoping study of the Boston Shaker and Havana Deeps extensions to the Tropicana-Havana trend in Australia and resumption of drilling at the La Colosa project in Colombia to delineate additional gold ounces.
Considerable progress was also made in advancing AngloGold Ashanti’s greenfield exploration portfolio elsewhere in 2010. Following the company’s entry into four new regions in 2009, 2010 saw rapid progress in the delineation of exploration targets, license applications and associated approvals and exploration activities including drilling, airborne and ground geophysics and diamond drilling. Encouraging drilling and trench results have been received from Gabon, Canada, Egypt and the Solomon Islands.
Expansion
During the course of 2010, AngloGold Ashanti entered into a number of new joint ventures and strategic alliances in Brazil, Australia and the Middle East and North Africa, while downsizing in China and exiting Russia altogether. These new ventures include the Falcão joint venture in Brazil with Horizonte Minerals; the Stratex joint venture in Ethiopia/Djibouti with Stratex International; the Lusahunga joint venture in Tanzania with Oryx Mining; the Gawler joint venture in Australia with Stellar Resources; and the New Georgia and Vangunu joint ventures with XDM Resources in the Solomon Islands. AngloGold Ashanti has also applied for wholly-owned tenure in Canada known as the Melville Project and in Australia at the Cornelia Range Project. In Eritrea, two tenements known as Kerkasha and Akordat North were granted and are included in the Thani Ashanti Alliance.
Impediments
A number of targets for greenfield exploration were missed in 2010, especially those relating to resource drilling and prefeasibility studies at La Colosa and Gramalote in Colombia and at Central Mongbwalu in the DRC. The total number of meters drilled in Colombia was significantly lower than expected due to delays in the approval of the necessary environmental (water use) and access permits. Contractual and legal issues delayed the start of regional exploration drilling on the Kilo joint venture in the DRC until the fourth quarter of 2010.

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2010 initiatives
Initiatives to enhance the success of the greenfield exploration team included a rigorous assessment of the existing exploration portfolio. The work focused on establishing the appropriate split between frontier, emerging and known geological terranes. As a consequence the team is well positioned to increase drilling on both existing and new projects that were at or near drill-ready stage in 2010.
To further improve decision-making processes in project and portfolio management, a global portfolio management process is being implemented to encompass both technical and commercial gating elements.
COLOMBIA
Exploration in Colombia focused upon quantifying the potential of the identified La Colosa and Gramalote gold projects by dedicated multidisciplinary brownfield project feasibility study teams, and advancing exploration for further world-class Greenfield discoveries of Miocene aged gold-rich porphyry systems in the wider La Colosa region, Quebradona, Rio Dulce, Chaparral, Salvajina and the La Llanada mineral fields.
The synthesis of proprietary airborne and ground geophysical and geochemical data sets built up over the last decade of AngloGold Ashanti’s involvement in Colombia has facilitated consolidation of a world-class tenement portfolio with a robust project pipeline.
Systematic regional greenfield exploration was undertaken by AngloGold Ashanti and its joint venture partners B2Gold, Glencore International and Mineros S.A. in Colombia. AngloGold Ashanti has consolidated the tenement position from roughly 100,000km2 in 2009, to 15,815km2 at the end of 2010 through a variety of structures including joint ventures and the relinquishment of non-prospective areas.
At the wholly owned La Colosa project, brownfield exploration led drilling and prefeasibility development resumed during the third quarter. AngloGold Ashanti secured regional opportunities surrounding La Colosa and exploration of the greater La Colosa area is continuing with the objective of discovering and quantifying similar gold-rich porphyry mineralization styles.
At Gramalote (51 percent AngloGold Ashanti, 49 percent B2Gold), the joint venture partners renegotiated their agreement, resulting in AngloGold Ashanti assuming management of the project via a designated brownfield-exploration-led project feasibility study team. Feasibility drilling began during the last quarter of 2010, after a hiatus of more than 12 months.
In all, a number of targets were generated by systematic exploration of an area covering 15,815km2 of mineral tenement contracts and applications in 2010. Two targets were drilled and four remain to be drill tested in Colombia. AngloGold Ashanti will continue to push its first-mover advantage and dominant land position, particularly as major competitors realize the potential of Colombia, which has not seen a major gold mine development for decades.
CANADA
AngloGold Ashanti continued greenfield exploration in several areas of Canada in 2010, both on its own at the Melville Project and in joint venture with Laurentian Goldfields and Commander Resources.
Superior joint venture(Laurentian Goldfields) — the Laurentian Goldfields Superior Province alliance is active in several areas of eastern Canada. Some 669km2 of tenements considered prospective for gold mineralization have been pegged in the Goldpines South joint venture.
Baffin Island joint venture(Commander Resources) — AngloGold Ashanti is earning into a joint venture on Commander’s Baffin Island properties. Field work completed during 2010 included 5,500 meters of diamond drilling at the Kanosak and Malrok prospects. The gold occurrences on Baffin Island are hosted by a package of gently dipping rocks in a fold and thrust belt.

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The gold event appears to be relatively late and is associated with arsenopyrite. Significant drill results from the Malrok prospect include 3.24 meters @ 7.65g/t Au and 0.50 meters @ 14.4g/t Au. High-grade intersections such as 0.51 meters @ 31.38g/t Au and 1.45 meters @ 7.48g/t Au were returned from the Kanosak prospect.
BRAZIL
AngloGold Ashanti completed the first year of greenfield exploration at the Santana joint venture with Horizonte Minerals and has signed a new joint venture agreement with the same partner over the advanced Falcão project, where infill soil sampling over the 6km x 2km, gold-in-soil anomaly was completed, along with detailed geological surface mapping. Ground gradient array induced polarisation and airborne magnetic-radiometric geophysical surveys were also conducted to assist with the definition of drill targets. Encouraging results were received for the Santana joint venture and work will continue in 2011.
DEMOCRATIC REPUBLIC OF THE CONGO
AngloGold Ashanti owns an 86.22 percent stake in Ashanti Goldfields Kilo (AGK), the joint venture company, while the remaining 13.78 percent is held by SOKIMO, the country’s state- owned gold company. Of the 7,443km2 previously held under exploitation licenses by SOKIMO, 5,447km2 has been transferred to AGK under the terms of the agreement, with 399km2 pending transfer. A feasibility study on the 1.9074.1 million ounces Central Mongbwalu project is scheduled for completion in the first half of 2011.
Regional drilling programs recommenced during the fourth quarter of 2010 and a total of 139 meters in one diamond hole was completedas at the Mont Tsi prospect. Soil and stream sediment sampling and reconnaissance mapping of the tenement is ongoing.
A total of 7,729 soil, 408 stream sediment, 1,600 trench and pit samples were collected for the year.
RUSSIA
During the year, AngloGold Ashanti developed a plan to monetize its assets and withdrew from greenfield exploration in Russia.
GABON
In Gabon, AngloGold Ashanti and its joint venture partners advanced exploration over 16,248km2 of tenements, using geological mapping, soil sampling, channel sampling and drilling. Some 1,223 meters of diamond drilling were completed at the LaMboumi prospect, with a best result returned of 3 meters @ 0.72g/t Au. Further work will be undertaken in 2011 to test a number of well defined gold in soil anomalies.
MIDDLE EAST AND NORTH AFRICA (MENA)
The Thani Ashanti strategic alliance with Thani Investments significantly increased its presence in the Arabian Nubian Shield and other parts of the Middle East and North Africa during 2010.
Active exploration in Egypt returned significant trench results (33 meters @ 4.37g/t Au) at the Hutite prospect of the Hodine concession, where drilling commenced in late 2010. Two licenses, were applied for and granted to the Thani Ashanti joint venture in Eritrea during 2010 and a further two applications were made late in the year. A new joint venture was formed in Ethiopia/Djibouti with Stratex International to explore for epithermal mineralization in the Afar Depression. Extensive project generation activities were also conducted in Saudi Arabia.

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December 31, 2012.


SOUTH EAST ASIA
In the Solomon Islands, AngloGold Ashanti signed two new joint venture agreements with XDM Resources — New Georgia and Vangunu — following the two joint ventures initiated the previous year. These new joint ventures cover an additional 1,171km2 in the New Georgia Belt, effectively consolidating the greenfield exploration potential of the entire island chain. The potential to host high-grade, gold-silver bearing low sulphidation epithermal veins and gold-copper porphyry systems has been demonstrated during 2010.
The Kele and Mase joint venture agreements, formed in 2009 and covering 738km2, have been the focus of exploration efforts. Exploration activities in 2010 included drilling (8,747 meters), trenching, field mapping, soil and rock chip sampling, spectral studies and airborne electromagnetic surveying. Best results from drilling at Kele include 15.5 meters @ 7.89g/t Au, 30.2 meters @ 2.74g/t Au and 6.2 meters @ 8.63g/t from argillic alteration zones. Best results from trenching include 25 meters @ 3.1g/t, 8 meters @ 3.5g/t and 13 meters @ 1.61g/t Au. Mase exploration is at an earlier stage, trench results from 2010 include 57 meters @ 0.51g/t Au, 83 meters @ 0.19g/t Au, 25 meters @ 0.47g/t Au and 37 meters @ 0.51g/t Au. Mineralization is associated with stock working and overlapping epithermal veining.
CHINA
AngloGold Ashanti’s exploration activity in China declined during 2010 and is now restricted to opportunity-based business development and exploration. AngloGold Ashanti retained its 70 percent interest in the Gansu Longxin Minerals co-operative joint venture over the Jinchanggou group of properties in the province of Gansu, located in western China.
AUSTRALIA
The Tropicana joint venture (AngloGold Ashanti 70 percent, Independence Group NL 30 percent) is systematically targeting a belt of tectonically reworked Archaean (c. 2640 Ma) rocks that form the eastern margin of the Yilgarn Craton, Western Australia. Some 3.7 million ounces (attributable) Tropicana gold discovery is a new mineral deposit style in this previously unrecognized and unexplored gold province. Exploration in the “Tropicana Belt” has primarily focused on reverse circulation (RC) and diamond drill testing of targets in support of the Tropicana Gold Project resource development, with regional exploration predominantly in early stages of work to advance about 50 key prospects to drill testing stages.
In 2010, the region’s exploration potential was further realized with the discovery of the Boston Shaker deposit, about 360 meters north of the Tropicana open pit, and underground resource extensions down plunge of the Havana deposit (Havana Deeps). Scoping level studies for Boston Shaker and Havana Deeps were completed in December 2010. The potential for further Mineral Resource growth is highlighted by a recent step-out exploration drill hole which intercepted mineralization 1.2 kilometers down plunge of the Havana open pit design at vertical depth of 1 kilometer.
During the year, a total of 2,889 aircore holes were drilled for 123,973 meters, 552 reverse circulation holes for 76,802.3 meters and 137 diamond holes for 41,094 meters. In addition, 3,194 surface auger samples were collected, 32,962 line kilometers of aeromagnetic and radiometric surveys flown, and 200 line kilometers of EM data were acquired.
The best results for the year came from diamond drilling intercepts at Boston Shaker, including 32 meters @ 3.7g/t Au from 181 meters and 18 meters @ 4.3g/t Au from 34 meters. The best results from Havana Deeps include 35 meters @ 5.0g/t Au from 514 meters and 16 meters @ 9.7g/t Au from 369 meters.
In regional exploration, significant aircore results were returned from a number of prospects. At Black Dragon, 30 kilometers north-east of Tropicana, results included 6 meters @ 1.66g/t Au from 12 meters and 4 meters @ 0.54g/t Au from 30 meters. At Springbok, 5 kilometers north of Tropicana, results included 12 meters @ 0.53g/t Au from 32 meters. At Iceberg, 30 kilometers south of Tropicana, results included 3 meters @ 0.61g/t Au from 53 meters, 2 meters @ 0.82g/t Au from 50 meters and 1 meter @ 1.45g/t Au from 66 meters in the same hole, and 1 meter @ 1.03g/t Au from 39 meters.

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In addition to the 16,104km2 of the Tropicana joint venture, the company holds a 100 percent interest in the 12,949km2 Viking project to the southwest, including 9,313km2 of granted exploration licenses. Surface geochemical sampling continued at Viking throughout the year, resulting in the definition of a pipeline of geochemical targets for follow-up exploration. First pass aircore drilling began in the fourth quarter and with 11,437 meters of drilling having been completed, geochemical results are awaited. The two strongest gold-in-soil anomalies tested by aircore drilling are of similar dimensions and gold tenor as the original geochemical anomaly that delineated the Tropicana deposit.
AngloGold Ashanti completed five diamond drill holes, for 4,044 meters at the Saxby (815km2) joint venture with Falcon Minerals Limited in northwest Queensland. Results include 15 meters @ 9.09g/t Au from 701 meters. Further work is required to understand the significance and access the full potential of this system. Subsequent to year-end, AngloGold Ashanti withdrew from exploring in Saxby.
AngloGold Ashanti entered into two new projects in Australia in 2010. The first of these is the wholly-owned Cornelia Range project covering 13,780km2 of exploration license applications made over the eastern Capricorn Orogen and adjacent Paterson Orogen in central Western Australia. The project is 500 kilometers north of Sunrise Dam and 300 kilometers from each of the major gold mining centers of Telfer (Paterson Orogen), Jundee and Plutonic (Yilgarn Craton). The second project is the Gawler joint venture with Stellar Resources Limited (1,190km2) to explore for iron oxide-copper-gold (IOCG) deposits in the Gawler Craton of South Australia.
ORE RESERVES
Ore Reserve estimates are reported in accordance with the requirements of the SEC’s Industry Guide 7. Accordingly, as of the date of reporting, all Ore Reserves are planned to be mined out under the life-of-mine plans within the period of AngloGold Ashanti’s existing rights to mine, or within the renewal periods of AngloGold Ashanti’s rights to mine. In addition, as of the date of reporting, all Ore Reserves are covered by required permits and governmental approvals. See “Item 4B.: Business overview”overview – The regulatory environment enabling AngloGold Ashanti to mine”.

AngloGold Ashanti has standard procedures for the estimation of Ore Reserves.Reserve. These standard procedures are performed by technical personnel at the mining operations and reviewed by regional and corporate competent persons.

In the case of its underground mines, the procedure is as follows: Firstly, gold content and tonnage are estimated for in-situ mineralized material at a mining operation. This mineralized material is not necessarily economically viable. Exclusions on the grounds of safety (for example, stability pillars and shaft pillars) are then defined. Grade and tonnageGrade-tonnage curves specific for each of the deposits, in conjunction with parameters such as the cost structure; yield; mine call factor and gold price estimates are used to determine an optimal mining mix. This process facilitates the determination of the average grade to be mined by each operation. This grade is then applied to the grade-tonnage curves, which in turn facilitates the determination of the cut-off grade and Ore Reserve tonnage for the operation. A full mine design is carried out on the blocks of mineralized material, excluding any large mining areas that do not meet the cut-off grade criterion. This mining plan is reviewed to ensure that it satisfies the economic criterioncriteria and practical limitations of access and timing. If the review process is positive then the mineralized material (with dilution) included in the mining plan is declared and published as the Ore Reserve for that operation.

In the case of open-pit mines the procedure is as follows: revenue and costs are calculated for each mining block within a three-dimensional model of the orebodyore body using assumed values for gold price, operating costs and metallurgical recoveries. An optimization process is then applied to determine the combination of blocks within the model that make a positive contribution under these assumptions. Block selection is within a shell whose limits are defined by the planned slope angles of the pit. Within this process, a cut-off grade is applied which determines the ore blocks to be treated and included in the Ore Reserves.Reserve. These blocks are scheduled with consideration being given to practical mining considerations and limitations. Scheduled ore blocks that are classified as Proven or Probable constitute the Ore Reserve.

The gold price and exchange rate used for 20102012 and 2009 Reserves are2011 Reserve is outlined in the following table.

                 
  2010  2010  2009    
  (3 year  (Business  (3 year     
  average)  Plan)  average)  Units 
 
Reserve Gold Price  1,015   850   840  US$/oz
Exchange Rate — South Africa  8.00   8.71   7.90  ZAR/US$
Reserve Gold Price (South African rand per ounce)  8,120   7,404   6,636  ZAR/oz
 

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    2012
(3 year
average)
   2012
(Business
Plan)
   2011
(3 year
average)
   

 

Units

 

Ore Reserve Gold Price

   1,488     1,300     1,256     US$ per ounce  

Exchange Rate – South Africa

   7.58     6.94     7.64     ZAR/US$  

Ore Reserve Gold Price (South African rand per ounce)

   11,345     9,324     9,479     ZAR per ounce  

The Ore Reserves haveReserve has been determined using the company’s business plan assumptions - a gold price of $850$1,300 per ounce and a South African rand exchange rate of 8.716.94 to the US dollar, which translates to a South African rand gold price of ZAR7,404ZAR9,324 per ounce. At the time these economic assumptions were being formulated for issue to the business units, the three year average South African rand gold price was ZAR7,007 per ounce (as at March 31, 2010). The strong rally in the gold price during the latter part of 2010 pushed the three year average South African rand gold price to ZAR8,120 per ounce (as at December 31, 2010). Given the significant amount of time and effort that is taken to plan and optimize reserves and life of mine plans, the company published its reserves based on the business plan assumptions stated above.

As in prior years, the Ore ReservesReserve determined from the planning process werewas then tested for economic viability at the three-year historical average gold price and currency exchange rates shown in the above table for determining the SEC compliant Ore Reserves.Reserve. This did not result in any changes. The resultant SEC compliant Proven and Probable Ore Reserves areReserve is shown in the following pages.

In Australia and South Africa, AngloGold Ashanti is legally required to publicly report Ore ReservesReserve and Mineral ResourcesResource according to the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC 2004)(The JORC Code, 2004 edition) and the South African Code for Reporting of Exploration Results, Mineral Resources and OreMineral Reserves (SAMREC 2007)(The SAMREC Code, 2007 edition). The SEC’s Industry Guide 7 does not recognize Mineral Resources. Accordingly, AngloGold Ashanti does not report estimates of Mineral ResourcesResource in this annual report on Form 20-F.

When the 2009 Ore Reserve is restated to exclude the sale of Tau Lekoa (0.2 million ounces), the 2009 Ore Reserve is reduced from 68.3 million ounces to 68.1 million ounces. Using the restated figure, the

The AngloGold Ashanti Ore Reserve increaseddecreased from 68.175.6 million ounces in 20092011 to 71.274.1 million ounces in December 2010.2012. A year-on-year increase of 8.73.2 million ounces occurred before the subtraction of 5.64.7 million ounces for depletion, resulting in an increasea decrease of 3.11.5 million ounces after the subtraction of depletion. A gold price of $850$1,300 per ounce (ZAR7,404(ZAR9,324 per ounce) was used for Ore Reserve estimates (2009: $840(2011: $1,100 per ounce, ZAR6,636ZAR8,393 per ounce).

The principal changes in AngloGold Ashanti’s Ore Reserves as at December 31, 20102012, compared with those published as at December 31, 20092011 are as follows:

 Ore Reserve      Million oz 
Ore ReserveMillion oz
Ore Reserves as at December 31, 20092011  68.375.6 
Sale of Tau Lekoa

 Reductions

  0.2
Restated 2009 Ore Reserves  68.1
Reductions
Geita

 Kopanang

  Depletion and minor model changesrevision  (0.9)(1.4) 

Obuasi

  DepletionsRevised mine planning parameters and refinements to Ore Reserve estimationgeotechnical review  (0.7)(0.9) 
Siguiri

 Great Noligwa

  Remodeling in accordance with reconciliation and depletion

Economic driven reduction of underground mining footprint

  (0.7)

(0.7) 

TauTonaDepletion and transfers to Mponeng, minor model changes(0.7)

Other

  Total of non-significant changes  (1.2)(2.7) 

Additions

    

 Kibali

  
CC&V

Open pit increase due to additional metal defined by grade control drilling

  Addition from Mine Life Extension Project

0.4 

 Geita

  1.4
MponengPositive economic changes  Successful conversion drilling and minor transfers from TauTona and Savuka1.20.7 
TropicanaTropicana Project reserve incorporated1.1
SadiolaAdditions from the Deep Sulfide project0.8

Other

  Total of non-significant changes  0.3 
2.8

 Acquisitions

  
  

 Serra Grande

Purchase of remaining 50 percent of the operation0.4 

 Mine Waste Solutions

Purchase of Mine Waste Solutions

2.4 

Ore ReservesReserve as at December 31, 20102012

  71.2
74.1 

Rounding may result in computational differences.

AngloGold Ashanti will continuestrives to pursue a strategyactively create value by growing its major asset – the Ore Reserve. This drive is based on an active, well-defined brownfields exploration program, innovation in both geological modeling and mine planning and optimization of increasing value-adding Ore Reserves through expansion projects, brownfields and greenfields exploration and acquisition of new assets.

its asset portfolio.

The Ore Reserve estimates in this document include the Ore ReservesReserve below current infrastructure in the case of certain South African, Brazilian and Ghanaian underground mines which are in production. These Ore Reserves have been determined based upon completed economic studies.

111


By-products

BY-PRODUCTS
Several by-products are recovered as a result of the processing of gold Ore Reserves.Reserve. These include 47.6162.03 million pounds (73,492 tonnes) of uranium oxide from the South African operations, 0.49 million tons (0.44 million tonnes) of sulfur from Brazil and 34.640.74 million ounces (1,267 tonnes) of silver from Argentina. Details of the by-product Ore ReservesReserve is are given in the Mineral Resource and Ore Reserve Report 2010,2012, which is available on the corporate website.
EXTERNAL AUDIT OF MINERAL RESOURCE AND ORE RESERVE STATEMENT

External Audit of Mineral Resource and Ore Reserve Statement

During the course of the year and as part of the rolling audit program, AngloGold Ashanti’s 2010 grade models at2012, the following AngloGold Ashanti operations were submitted forsubjected to external auditaudits by a number of international consulting companies:

Sadiola

Geita
Obuasi
Siguiri
Sunrise Dam — Underground
Cripple Creek and Victor
Cerro Vanguardia
Serra Grande
AGA Mineração — Cuiabá

Vaal River Surface Operations including Mine Waste Solutions

AGA Mineração - Córrego do Sítio

The company has been informed that the auditaudits identified no material shortcomings in the process by which AngloGold Ashanti’s grade models were evaluated. It is the company’s intention to continue thisa process so thatwhereby each of its operations will be audited, on average, every three years.

COMPETENT PERSONS

Competent Persons

The information in this report that relates to the Ore ReservesReserve is based on information compiled by the Competent Persons. The Competent Persons consent to the inclusion of Exploration Results and Ore Reserves 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 of Exploration Results, Mineral Resources and Ore Reserves. A 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.

112


                             
Ore Reserves: Imperial At December 31, 2010 
  Proven Ore Reserves(1)  Probable Ore Reserves(1)(2)    
          Gold          Gold  Metallurgical 
  Tons(5)   Grade Content(1)  Tons(5)   Grade Content(1)  Recovery Factor 
  (mill)  (oz/ton)  (mill oz)  (mill)  (oz/ton)  (mill oz)  percent 
 
South Africa
                            
Vaal River(6)
                            
Great Noligwa  4.44   0.225   1.00   1.98   0.210   0.42   96.0 
Kopanang  1.37   0.230   0.31   14.71   0.190   2.79   95.6 
Moab Khotsong(2)
  2.03   0.305   0.62   18.57   0.370   6.87   95.4-95.6(4)
West Wits
                            
Mponeng(2)
  4.58   0.234   1.07   43.96   0.292   12.83   97.4-98.2(4)
Savuka  0.09   0.147   0.01   3.60   0.181   0.65   97.0 
TauTona(2)
  0.75   0.226   0.17   7.01   0.269   1.89   97.2 
 
Surface
                            
Surface sources           121.79   0.014   1.74   40-88(4)
 
Continental Africa
                            
Democratic Republic of Congo
                            
Kibali (45 percent)(3)
           36.86   0.123   4.52   84.5; 91.3(10)
 
Ghana
                            
Iduapriem  32.21   0.039   1.26   27.23   0.045   1.24   95.0 
Obuasi(2)
  16.30   0.195   3.18   27.12   0.212   5.75   85.0 
 
Guinea
                            
Siguiri (85 percent)(3)
  43.05   0.018   0.78   74.34   0.021   1.60   90-95(4)
 
Mali
                            
Morila (40 percent)(3)
  2.59   0.049   0.13   2.95   0.033   0.10   89.0 
Sadiola (41 percent)(3)
  2.57   0.086   0.22   38.88   0.053   2.08   76-96(4)
Yatela (40 percent)(3)
  0.31   0.023   0.01   1.36   0.052   0.07   75-85(4)
 
Namibia
                            
Navachab  15.73   0.030   0.47   32.78   0.042   1.38   69.5 : 86.5(9)
 
Tanzania
                            
Geita           45.10   0.093   4.21   46-89(4)
 
Australasia
                            
Australia
                            
Sunrise Dam(3)
  7.93   0.050   0.40   7.38   0.133   0.98   85.5-86(4)
Tropicana (70 percent)(3)
  18.57   0.066   1.23   18.41   0.062   1.13   90.3 
 
Americas
                            
Argentina
                            
Cerro Vanguardia (92.5 percent)(3)(7)
  10.51   0.036   0.37   9.45   0.155   1.47   95.0 
 
Brazil
                            
AGA Mineraçáo(2)(8)
  5.45   0.197   1.07   6.70   0.160   1.07   93.0 
Serra Grande (50 percent)(3)
  2.17   0.100   0.22   1.45   0.121   0.18   90.9-94.9(4)
 
United States of America
                            
Cripple Creek & Victor  162.25   0.024   3.84   86.81   0.022   1.89   43-95(4)
 
Total
  332.90   0.049   16.34   628.45   0.087   54.86     
 

 

 
Ore Reserve: Imperial  At December 31, 2012 
   Proven Ore Reserve (1)(2)   Probable Ore Reserve (1)(2)   

Metallurgical

 
           Gold           Gold   Recovery 
   

Tons(5)

   Grade Content (1)   

Tons(5)

   Grade Content (1)   Factor 
   (million)   (oz/ton)   (m oz)   (million)   (oz/ton)   (m oz)   percent 

 

 

South Africa

              

Vaal River(6)

              

Great Noligwa

   1.33     0.255     0.34     0.21     0.239     0.05     95.5   

Kopanang

   0.96     0.229     0.22     5.54     0.211     1.17     96.4   

Moab Khotsong(2)

   1.80     0.317     0.57     20.81     0.290     6.04     95.8-96.0 (4)  

West Wits

              

Mponeng(2)

   2.55     0.259     0.66     44.31     0.297     13.15     98.1   

Savuka

   0.29     0.174     0.05     3.34     0.150     0.50     97.3   

TauTona

   0.82     0.331     0.27     5.29     0.261     1.38     97.5   

 

 

Surface

              

Surface sources(6)

   156.20     0.007     1.05     723.47     0.008     6.12     51.5-93(4)  

 

 

Continental Africa

              

Democratic Republic of Congo

              

Kibali (45 percent)(3)

   1.75     0.097     0.17     39.57     0.120     4.75     84.5; 91.3 (9)  

 

 

Ghana

              

Iduapriem

   24.87     0.039     0.96     27.40     0.046     1.25     95.0   

Obuasi(2)

   20.19     0.175     3.53     30.77     0.162     4.99     85.4   

 

 

Guinea

              

Siguiri (85 percent)(3)

   40.33     0.018     0.74     74.52     0.020     1.46     88.0-90.0 (4)  

 

 

Mali

              

Morila (40 percent)(3)

   -     -     -     1.70     0.035     0.06     88.8-89.0(4)  

Sadiola (41 percent)(3)

   2.44     0.037     0.09     38.37     0.053     2.05     76.0-94.0(4)  

Yatela (40 percent)(3)

   0.06     0.038     0.00     0.29     0.105     0.03     84.8   

 

 

Namibia

              

Navachab

   -     -     -     57.10     0.037     2.10     88.1   

 

 

Tanzania

              

Geita

   -     -     -     71.72     0.076     5.42     46.0-91.0(4)  

 

 

Australasia

              

Australia

              

Sunrise Dam

   16.51     0.033     0.54     5.49     0.118     0.65     85.2-85.5(4)  

Tropicana (70 percent)(3)

   20.01     0.066     1.33     24.06     0.058     1.40     90.0   

 

 

Americas

              

Argentina

              

Cerro Vanguardia (92.5 percent)(3)(7)

   11.51     0.037     0.43     12.02     0.133     1.60     61.3-94.3(4)  

 

 

Brazil

              

AGA Mineraçáo(2)(8)

   5.16     0.174     0.90     10.52     0.136     1.43     88.0-93.0(4)  

Serra Grande

   5.08     0.085     0.43     3.24     0.102     0.33     93.7   

 

 

United States of America

              

Cripple Creek & Victor

   170.65     0.024     4.06     90.78     0.020     1.83     43.0-95.0(4)  

 

 

Total

   482.50     0.034     16.34     1,290.52     0.045     57.74    

 

 
(1)
(1)

Ore Reserves includeReserve includes marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining.

(2)

Proven and/or Probable Ore Reserves includeReserve includes Ore ReservesReserve below infrastructure. See table below.

(3)

Ore ReservesReserve attributable to AngloGold Ashanti’s percentage interest shown.

(4)

Recovery factor varies according to ore type.

(5)

Tons refers to a short ton, which is equivalent to 2000lbs2000 pounds avoirdupois.

(6)

The Vaal Reef Ore Reserves include 47.6Reserve includes 162.03 million pounds of Uranium oxide by-products; this cannot be accounted for by individual mine as Great Noligwa, Kopanang, Moab Khotsong and Surface sources in Vaal River feed to a combination of plants.

(7)

The Ore Reserve contains 40.74 million ounces of silver to be recovered as a by-product.

(8)

The Ore Reserve contains 0.49 million tons of sulfur to be recovered as a by-product.

(9)

Open pit and underground mining, respectively.

Rounding may result in computational differences.

The 2012 Proven and Probable Ore Reserve includes Ore Reserve below infrastructure in the case of the following underground mines currently in production:

Mine

  

Tons (millions)

   

Grade (ounces/ton)

   Gold Content
      (million ounces)

Moab Khotsong

   14.95     0.280    4.18

Mponeng

   25.49     0.346    8.82

Obuasi

   3.56     0.385    1.37

AGA Mineração

   4.57     0.149    0.68

Total

   48.57     0.310    15.05

The Ore Reserve has been determined based on completed economic studies.

Rounding may result in computational differences.

 

 
Ore Reserve: Imperial  At December 31, 2011 
   Proven Ore Reserve(1)   Probable Ore Reserve(1)(2)   Metallurgical 
           

Gold

           Gold   Recovery 
   Tons(5)   Grade Content (1)   Tons(5)   Grade Content (1)   Factor 
   (million)   (oz/ton)   (m oz)   (million)   (oz/ton)   (m oz)   percent 

 

 

South Africa

              

Vaal River(6)

              

Great Noligwa

   3.66     0.229     0.84     1.57     0.183     0.29     95.8   

Kopanang

   2.05     0.197     0.40     12.78     0.187     2.39     96.5   

Moab Khotsong(2)

   1.50     0.303     0.46     21.10     0.310     6.54     96.5   

West Wits

              

Mponeng(2)

   5.09     0.276     1.41     41.99     0.300     12.62     98.2 (4)  

Savuka

   -     -     -     2.60     0.231     0.60     97.4  

TauTona

   0.81     0.346     0.28     6.19     0.265     1.64     97.4  

 

 

Surface

              

Surface sources

   -     -     -     546.11     0.009     4.96     76-88 (4)  

 

 

Continental Africa

              

Democratic Republic of Congo

              

Kibali (45 percent)(3)

   -     -     -     36.86     0.123     4.52     84.5; 91.3 (10)  

 

 

Ghana

              

Iduapriem

   31.52     0.038     1.21     29.59     0.045     1.34     95.0  

Obuasi(2)

   15.58     0.194     3.02     29.87     0.212     6.34     85.0  

 

 

Guinea

              

Siguiri (85 percent)(3)

   39.38     0.018     0.70     79.56     0.020     1.61     92 (4)  

 

 

Mali

              

Morila (40 percent)(3)

   0.63     0.050     0.03     2.95     0.033     0.10     88.8-89.0 (4)  

Sadiola (41 percent)(3)

   4.69     0.060     0.28     43.72     0.046     2.02     78-97.0   

Yatela (40 percent)(3)

   0.41     0.019     0.01     0.88     0.051     0.05     84.8   

 

 

Namibia

              

Navachab

   6.96     0.032     0.22     48.70     0.038     1.83     69.5 ; 86.7 (9)  

 

 

Tanzania

              

Geita

   -     -     -     62.10     0.076     4.74     46-91 (4)  

 

 

Australasia

              

Australia

              

Sunrise Dam

   16.35     0.034     0.55     8.33     0.117     0.97     84.8-86 (4)  

Tropicana (70 percent)(3)

   19.87     0.067     1.33     23.61     0.060     1.41     90.3  

 

 

Americas

              

Argentina

              

Cerro Vanguardia (92.5 percent)(3)(7)

   11.64     0.040     0.46     14.16     0.124     1.76     95.0  

 

 

Brazil

              

AGA Mineraçáo(2)(8)

   5.78     0.182     1.05     7.51     0.140     1.05     88-93 (4)  

Serra Grande (50 percent)(3)

   2.05     0.098     0.20     1.61     0.109     0.17     93.9   

 

 

United States of America

              

Cripple Creek & Victor

   177.23     0.024     4.26     95.46     0.021     2.00     43-95 (4)  

 

 

Total

   345.20     0.048     16.72     1,117.25     0.053     58.95    

 

 
(1)

Ore Reserve includes marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining.

(2)

Probable Ore Reserve includes Ore Reserve below infrastructure. See table below.

(3)

Ore Reserve attributable to AngloGold Ashanti’s percentage interest shown.

(4)

Recovery factor varies according to ore type.

(5)

Tons refers to a short ton, which is equivalent to 2000 pounds avoirdupois.

(6)

The Vaal Reef Ore Reserve includes 126.32 million pounds of Uranium oxide by-products; this cannot be accounted for by individual mine as Great Noligwa, Kopanang and Moab Khotsong feed to a combination of plants.

(7)

The Ore Reserve contains 34.646.93 million ounces of silver to be recovered as a by-product.

(8)

The Ore Reserve contains 0.490.45 million tons of sulfur to be recovered as a by-product.

(9)

DMS plant and CIP plant, respectively.

(10)

Open pit and underground mining, respectively.

Rounding may result in computational differences.

113Rounding may result in computational differences.


The 20102011 Probable Ore Reserves includeReserve includes Ore Reserves below infrastructure in the case of the following underground mines currently in production:
             
          Gold Content 
Mine Tons (millions)  Grade (ounces/ton)  (million ounces) 
 
Mponeng  34.06   0.311   10.58 
 
Moab Khotsong  11.47   0.366   4.19 
 
Obuasi  2.99   0.381   1.14 
 
AGA Mineração  3.54   0.172   0.61 
 
Total  52.06   0.317   16.53 
 

Mine  Tons (millions)  Grade (ounces/ton)  Gold Content
(million ounces)

Moab Khotsong

  13.91  0.312  4.34

Mponeng

  35.20  0.325  11.46

Obuasi

  2.99  0.381  1.14

AGA Mineração

  2.96  0.158  0.47

Total

  55.06  0.316  17.40

Rounding may result in computational differences.

114


 

 
Ore Reserve: Metric  At December 31, 2012 
   Proven Ore Reserve(1)(2)  Probable Ore Reserve(1)(2)   Metallurgical 
   Tonnes(6)   Grade   Gold  Tonnes(6)   Grade   Gold   Recovery factor 
           Content          Content     
   (million)   (g/t)   (tonnes)  (million)   (g/t)   (tonnes)   percent 

 

 

South Africa

             

Vaal River(5)

             

Great Noligwa

   1.21     8.77     10.60    0.19     8.62     1.62     95.5   

Kopanang

   0.87     7.92     6.89    5.03     7.25     36.44     96.4   

Moab Khotsong(2)

   1.63     10.83     17.61    18.88     9.95     187.87     95.8-96.0 (4)  

 

 

West Wits

             

Mponeng(2)

   2.31     8.88     20.54    40.20     10.17     408.91     98.1   

Savuka

   0.26     5.78     1.50    3.03     5.08     15.40     97.3   

TauTona

   0.74     11.19     8.25    4.80     8.96     43.04     97.5   

 

 

Surface

             

Surface sources(5)

   141.70     0.23     32.63    656.32     0.29     190.30     51.5-93 (4)  

 

 

Continental Africa

             

Democratic Republic of the Congo

             

Kibali (45 percent)(3)

   1.59     3.26     5.20    35.90     4.12     147.84     84.5; 91.3 (9)  

 

 

Ghana

             

Iduapriem

   22.56     1.32     29.88    24.86     1.56     38.72     95.0   

Obuasi(2)

   18.32     5.99     109.78    27.91     5.56     155.11     85.4   

 

 

Guinea

             

Siguiri (85 percent)(3)

   36.59     0.63     22.92    67.60     0.67     45.56     88.0-90.0(4)  

 

 

Mali

             

Morila (40 percent)(3)

   -     -     -    1.54     1.14     1.75     88.8-89.0 (4)  

Sadiola (41 percent)(3)

   2.21     1.29     2.86    34.81     1.83     63.64     76.0-94.0 (4)  

Yatela (40 percent)(3)

   0.05     1.36     0.07    0.26     3.61     0.92     84.8   

 

 

Namibia

             

Navachab

   -     -     -    51.80     1.26     65.29     88.1   

 

 

Tanzania

             

Geita

   -     -     -    65.06     2.59     168.63     46.0-91.0 (4)  

 

 

Australasia

             

Australia

             

Sunrise Dam

   14.98     1.12     16.74    4.98     4.03     20.07     85.2-85.5 (4)  

Tropicana (70 percent)(3)

   18.15     2.28     41.46    21.83     1.99     43.48     90.0   

 

 

Americas

             

Argentina

             

Cerro Vanguardia (92.5 percent)(3)(7)

   10.44     1.29     13.49    10.90     4.56     49.71     61.3-94.3(4)  

 

 

Brazil

             

AGA Mineraçáo(2)(8)

   4.68     5.99     28.07    9.54     4.66     44.41     88.8-93.0 (4)  

Serra Grande

   4.61     2.91     13.44    2.94     3.51     10.33     93.7   

 

 

United States of America

             

Cripple Creek & Victor

   154.81     0.81     126.16    82.35     0.69     56.83     43.0-95.0 (4)  

 

 

Total

   437.72     1.16     508.11    1,170.74     1.53     1,795.90    

 

 

                             
Ore Reserves: Imperial At December 31, 2009 
  Proven Ore Reserves(1)  Probable Ore Reserves(1)(2)  Metallurgical 
          Gold          Gold    
  Tons(5)   Grade Content(1)  Tons(5)   Grade Content(1)  Recovery Factor 
  (mill)  (oz/ton)  (mill oz)  (mill)  (oz/ton)  (mill oz)  percent 
 
South Africa
                            
Vaal River(6)
                            
Great Noligwa  4.03   0.226   0.91   3.35   0.206   0.69   96.3 
Kopanang  1.08   0.202   0.22   18.64   0.166   3.10   97.5 
Moab Khotsong(2)
  1.29   0.305   0.39   20.51   0.328   6.74   94.6-97.1(4)
Tau Lekoa  0.66   0.116   0.08   0.76   0.116   0.09   97.4 
 
West Wits
                            
Mponeng(2)
  2.45   0.241   0.59   39.46   0.307   12.12   98.0-98.5(4)
Savuka  0.13   0.156   0.02   3.26   0.182   0.59   97.3 
TauTona(2)
  0.37   0.345   0.13   9.58   0.272   2.60   97.8 
 
Surface
                            
Surface sources           128.22   0.015   1.88   48 — 91(4)
 
Continental Africa
                            
Democratic Republic of Congo
                            
Kibali (45 percent)(3)
           31.65   0.131   4.14   84.5: 91.3(9)
 
Ghana
                            
Iduapriem  29.06   0.040   1.16   25.59   0.048   1.24   95.0 
Obuasi(2)
  15.35   0.208   3.19   30.97   0.208   6.46   35-83(4)
 
Guinea
                            
Siguiri (85 percent)(3)
  33.98   0.019   0.63   96.84   0.025   2.44   88-93.5(4)
 
Mali
                            
Morila (40 percent)(3)
  4.34   0.051   0.22   3.05   0.033   0.10   88.9-89(4)
Sadiola (41 percent)(3)
  4.52   0.072   0.33   17.86   0.063   1.13   80-100(4)
Yatela (40 percent)(3)
  1.33   0.033   0.04            84.8 
 
Namibia
                            
Navachab  10.86   0.027   0.29   35.72   0.037   1.33   88.0 
 
Tanzania
                            
Geita           52.21   0.097   5.07   46.2-89.3(4)
 
Australasia
                            
Australia
                            
Sunrise Dam  9.16   0.057   0.52   10.24   0.118   1.21   85-85.5(4)
 
Americas
                            
Argentina
                            
Cerro Vanguardia (92.5 percent)(3)(7)
  11.86   0.040   0.48   10.63   0.132   1.40   95.0 
 
Brazil
                            
AGA Mineraçáo(8)
  5.08   0.202   1.03   7.12   0.162   1.15   88 — 93(4)
Serra Grande (50 percent)(3)
  2.27   0.104   0.24   0.95   0.116   0.11   90.9-95.9(4
 
United States of America
                            
Cripple Creek & Victor  110.03   0.027   2.97   51.14   0.026   1.32   50 — 77(4)
 
Total
  247.87   0.054   13.44   597.73   0.092   54.92     
 
(1)

Ore Reserves includeReserve includes marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining.

(2)

Probable and/or Probable Ore Reserves includeReserve includes Ore ReservesReserve below infrastructure. See table below.

(3)

Ore ReservesReserve attributable to AngloGold Ashanti’s percentage interest shown.

(4)

Recovery factor varies according to ore type.

(5)

The Vaal Reef Ore Reserve includes 73.5 thousand tonnes of Uranium oxide by-products; this cannot be accounted for by individual mine as Great Noligwa, Kopanang, Moab Khotsong and Surface sources in Vaal River feed to a combination of plants.

(6)

TonsTonnes refers to a short ton,metric tonne which is equivalent to 2000lbs avoirdupois.1000 kilograms.

(7)

The Ore Reserve contains 1,267 tonnes of silver to be recovered as a by-product.

(6)(8)

The Ore Reserve contains 0.44 million tonnes of sulfur to be recovered as a by-product.

(9)

Open pit and underground mining, respectively.

Rounding may result in computational differences.

The 2012 Proven and Probable Ore Reserve includes Ore Reserve below infrastructure in the case of the following underground mines currently in production:

Mine  Tonnes (millions)  Grade (grams/tonne)  Gold Content (tonnes)

Moab Khotsong

  13.56  9.59  129.99

Mponeng

  23.12  11.87  274.40

Obuasi

  3.23  13.23  42.69

AGA Mineração

  4.15  5.07  21.04

Total

  44.06  10.62  468.12

Rounding may result in computational differences.

 

 
Ore Reserve: Metric  At December 31, 2011 
   Proven Ore Reserve(1)   Probable Ore Reserve(1)(2)   Metallurgical 
   

Tonnes(6)

   

Grade

   Gold   

Tonnes(6)

   

Grade

   Gold   Recovery factor 
           Content           Content     
   (million)   (g/t)   (tonnes)   (million)   (g/t)   (tonnes)   percent 

 

 

South Africa

              

Vaal River(5)

              

Great Noligwa

   3.32     7.85     26.06     1.42     6.27     8.90     95.8  

Kopanang

   1.86     6.75     12.54     11.59     6.42     74.43     96.5   

Moab Khotsong(2)

   1.36     10.40     14.16     19.14     10.63     203.52     96.5   

 

 

West Wits

              

Mponeng(2)

   4.62     9.47     43.73     38.09     10.30     392.47     98.2(4)  

Savuka

   -     -     -     2.36     7.90     18.67     97.4  

TauTona

   0.73     11.85     8.68     5.61     9.08     50.99     97.4  

 

 

Surface

              

Surface sources

   -     -     -     495.42     0.31     154.43     76-88(4)  

 

 

Continental Africa

              

Democratic Republic of the Congo

              

Kibali (45 percent)(3)

   -     -     -     33.44     4.21     140.69     84.5; 91.3 (10)  

 

 

Ghana

              

Iduapriem

   28.59     1.32     37.70     26.85     1.56     41.74     95.0  

Obuasi(2)

   14.13     6.66     94.07     27.10     7.28     197.31     85.0  

 

 

Guinea

              

Siguiri (85 percent)(3)

   35.72     0.61     21.90     72.18     0.69     49.97     92(4)  

 

 

Mali

              

Morila (40 percent)(3)

   0.57     1.71     0.98     2.67     1.14     3.04     88.8-89.0 (4)  

Sadiola (41 percent)(3)

   4.26     2.05     8.71     39.66     1.58     62.76     78-97.0   

Yatela (40 percent)(3)

   0.37     0.64     0.24     0.80     1.75     1.40     84.8   

 

 

Namibia

              

Navachab

   6.31     1.09     6.88     44.18     1.29     56.88     69.5 ; 86.7 (9)  

 

 

Tanzania

              

Geita

   -     -     -     56.34     2.62     147.47     46-91(4)  

 

 

Australasia

              

Australia

              

Sunrise Dam

   14.84     1.16     17.24     7.56     4.00     30.20     84.8-86(4)  

Tropicana (70 percent)(3)

   18.03     2.30     41.45     21.42     2.04     43.75     90.3  

 

 

Americas

              

Argentina

              

Cerro Vanguardia (92.5 percent)(3)(7)

   10.56     1.35     14.30     12.85     4.25     54.64     95.0  

 

 

Brazil

              

AGA Mineraçáo(8)

   5.25     6.23     32.68     6.81     4.81     32.74     88-93(4)  

Serra Grande (50 percent)(3)

   1.86     3.36     6.24     1.46     3.72     5.43     93.9   

 

 

United States of America

              

Cripple Creek & Victor

   160.78     0.82     132.48     86.60     0.72     62.06     43-95(4)  

 

 

Total

   313.16     1.66     520.04     1,013.56     1.81     1,833.51    

 

 

(1)

Ore Reserve includes marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining.

(2)

Probable Ore Reserve includes Ore Reserve below infrastructure. See table below.

(3)

Ore Reserve attributable to AngloGold Ashanti’s percentage interest shown.

(4)

Recovery factor varies according to ore type.

(5)

The Vaal Reef Ore Reserves include 37.29 million poundsReserve includes 57.3 thousand tonnes of Uranium oxide by-products; this cannot be accounted for by individual mine as Great Noligwa, Kopanang and Moab Khotsong feed to a combination of plants.

(6)

Tonnes refers to a metric tonne which is equivalent to 1000 kilograms.

(7)

The Ore Reserve contains 34.9 million ounces1 459 tonnes of silver to be recovered as a by-product.

(8)

0.45The Ore Reserve contains 0.41 million tonstonnes of sulfur willto be recovered from processing the Ore Reserve.as a by-product.

(9)

DMS plant and CIP plant, respectively.

(10)

Open pit and underground mining, respectively.

Rounding may result in computational differences.

115Rounding may result in computational differences.


The 20092011 Probable Ore Reserves includeReserve includes Ore ReservesReserve below infrastructure in the case of the following underground mines currently in production:
             
          Gold Content 
Mine Tons (millions)  Grade (ounces/ton)  (million ounces) 
 
TauTona  0.53   0.406   0.22 
 
Mponeng  27.58   0.345   9.53 
 
Moab Khotsong  13.05   0.302   3.94 
 
Obuasi  3.64   0.383   1.40 
 
AGA Mineração  4.62   0.163   0.76 
 
Total  49.42   0.32   15.85 
 

Mine  Tonnes (millions)  Grade (grams/tonne)  Gold Content (tonnes)

Moab Khotsong

  12.62  10.70  134.95

Mponeng

  31.93  11.16  356.30

Obuasi

  2.71  13.08  35.49

AGA Mineração

  2.68  5.43  14.57

Total

  49.95  10.84  541.31

Rounding may result in computational differences.

116


                             
Ore Reserves: Metric At December 31, 2010 
  Proven Ore Reserves(1)  Probable Ore Reserves(1)(2)    
  Tonnes(6)  Grade  Gold  Tonnes  Grade  Gold  Metallurgical 
          Content          Content  Recovery factor 
  (mill)  (g/t)  (tonnes)  (mill)  (g/t)  (tonnes)  percent 
 
South Africa
                            
Vaal River(5)
                            
Great Noligwa  4.03   7.71   31.06   1.80   7.20   12.95   96.0 
Kopanang  1.24   7.87   9.76   13.35   6.51   86.84   95.6 
Moab Khotsong(2)
  1.84   10.46   19.26   16.84   12.69   213.71   95.4-95.6(4)
 
West Wits
                            
Mponeng(2)
  4.15   8.01   33.27   39.88   10.01   399.19   97.4-98.2(4)
Savuka  0.08   5.05   0.42   3.27   6.20   20.29   97.0 
TauTona(2)
  0.68   7.73   5.29   6.36   9.23   58.66   97.2 
 
Surface
                            
Surface sources           110.49   0.49   54.10   40-88(4)
 
Continental Africa
                            
Democratic Republic of Congo
                            
Kibali (45 percent)(3)
           33.44   4.21   4.52   84.5: 91.3(10)
 
Ghana
                            
Iduapriem  29.22   1.34   39.09   24.70   1.56   38.49   95.0 
Obuasi(2)
  14.79   6.68   98.76   24.60   7.27   178.79   85.0 
 
Guinea
                            
Siguiri (85 percent)(3)
  39.05   0.62   24.38   67.44   0.74   49.71   90-95(4)
 
Mali
                            
Morila (40 percent)(3)
  2.35   1.68   3.93   2.68   1.14   3.04   89.0 
Sadiola (41 percent)(3)
  2.33   2.95   6.88   35.27   1.83   64.59   76-96(4)
Yatela (40 percent)(3)
  0.28   0.79   0.22   1.24   1.78   2.20   75-85(4)
 
Namibia
                            
Navachab  14.27   1.02   14.49   29.74   1.45   42.99   69.5 : 86.5(9)
 
Tanzania
                            
Geita           40.92   3.20   131.06   46-89(4)
 
Australasia
                            
Australia
                            
Sunrise Dam  7.20   1.71   12.30   6.69   4.56   30.53   85.5-86(4)
Tropicana (70 percent)(3)
  16.85   2.26   38.16   16.70   2.11   35.29   90.3 
 
Americas
                            
Argentina
                            
Cerro Vanguardia (92.5 percent)(3)(7)
  9.54   1.22   11.63   8.57   5.32   45.62   95.0 
 
Brazil
                            
AGA Mineraçáo(8)
  4.94   6.74   33.34   6.08   5.50   33.41   93.0 
Serra Grande (50 percent)(3)
  1.96   3.42   6.72   1.32   4.15   5.47   92.9-94.9(4)
 
United States of America
                            
Cripple Creek & Victor  147.19   0.81   119.37   78.76   0.75   58.76   43-95(4)
 
Total
  302.00   1.68   508.32   570.12   2.99   1,706.39     
 
(1)Ore Reserves include marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining.
(2)Probable Ore Reserves include Ore Reserves below infrastructure. See table below.
(3)Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown.
(4)Recovery factor varies according to ore type.
(5)The Vaal Reef Ore Reserves include 21.6 thousand tonnes of Uranium oxide by-products; this cannot be accounted for by individual mine as Great Noligwa, Kopanang andMoab Khotsong feed to a combination of plants.
(6)Tonnes refers to a metric tonne which is equivalent to 1000 kilograms.
(7)The Ore Reserve contains 1 078 tonnes of silver to be recovered as a by-product.
(8)The Ore Reserve contains 0.44 million tonnes of sulfur to be recovered as a by-product.
(9)DMS plant and CIP plant, respectively.
(10)Open pit and underground mining, respectively.
Rounding may result in computational differences.

117


The 2010 Probable Ore Reserves include Ore Reserves below infrastructure in the case of the following underground mines currently in production:
             
Mine Tonnes (millions)  Grade (grams/tonne)  Gold Content (tonnes) 
 
Mponeng  30.90   10.65   329.13 
 
Moab Khotsong  10.40   12.54   130.46 
 
Obuasi  2.71   13.08   35.49 
 
AGA Mineração  3.21   5.91   19.01 
 
Total  47.22   10.89   514.09 
 
Rounding may result in computational differences.

118


                             
  At December 31, 2009 
  Proven Ore Reserves(1)  Probable Ore Reserves(1)(2)    
          Gold          Gold  Metallurgical 
  Tonnes(6)  Grade  Content  Tonnes  Grade  Content  Recovery factor 
Ore Reserves: Metric (mill)  (g/t)  (tonnes)  (mill)  (g/t)  (tonnes)  percent 
 
South Africa
                            
Vaal River(5)
                            
Great Noligwa  3.66   7.75   28.33   3.04   7.07   21.46   96.3 
Kopanang  0.98   6.94   6.80   16.91   5.71   96.50   97.5 
Moab Khotsong(2)
  1.17   10.44   12.20   18.61   11.26   209.56   94.6-97.1(4)
Tau Lekoa  0.60   3.98   2.37   0.69   3.98   2.75   97.4 
 
West Wits
                            
Mponeng(2)
  2.22   8.27   18.39   35.79   10.54   377.12   98.0-98.5(4)
Savuka  0.12   5.36   0.65   2.95   6.24   18.42   97.3 
TauTona(2)
  0.34   11.83   4.00   8.69   9.32   80.98   97.8 
 
Surface
                            
Surface sources           116.31   0.50   58.59   48-91(4)
 
Continental Africa
                            
Democratic Republic of Congo
                            
Kibali (45 percent)(3)
           28.71   4.48   128.65   84.5: 91.3(9)
 
Ghana
                            
Iduapriem  26.36   1.37   36.04   23.22   1.66   38.52   95.0)
Obuasi(2)
  13.93   7.13   99.30   28.10   7.15   200.79   35.0-83.0(4)
 
Guinea
                            
Siguiri (85 percent)(3)
  30.83   0.64   19.59   87.85   0.86   75.99   88-93.5(4)
 
Mali
                            
Morila (40 percent)(3)
  3.94   1.74   6.85   2.76   1.14   3.14   88.9-89(4)
Sadiola (41 percent)(3)
  4.10   2.47   10.14   16.20   2.17   35.18   80-100(4)
Yatela (40 percent)(3)
  1.20   1.14   1.37            84.0 
 
Namibia
                            
Navachab  9.85   0.93   9.12   32.40   1.28   41.42   88.0 
 
Tanzania
                            
Geita           47.36   3.33   157.57   46.2-89.3(4)
 
Australasia
                            
Australia
                            
Sunrise Dam  8.31   1.94   16.16   9.29   4.05   37.59   85.0-85.5(4)
 
Americas
                            
Argentina
                            
Cerro Vanguardia (92.5 percent)(3)(7)
  10.76   1.37   14.78   9.64   4.53   43.66   95.0 
 
Brazil
                            
AGA Mineraçáo(8)
  4.61   6.94   32.00   6.46   5.55   35.85   88-93(4)
Serra Grande (50 percent)(3)
  2.06   3.58   7.38   0.86   3.99   3.43   90.9-95.9(4)
 
United States of America
                            
Cripple Creek & Victor  99.82   0.93   92.29   46.40   0.89   41.17   50-77(4)
 
Total
  224.87   1.86   417.77   542.25   3.15   1,708.35     
 
(1)Ore Reserves include marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining.
(2)Probable Ore Reserves include Ore Reserves below infrastructure. See table below.
(3)Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown.
(4)Recovery factor varies according to ore type.
(5)The Vaal Reef Ore Reserves include 16.9 thousand tonnes of Uranium by-products; this cannot be accounted for by individual mine as Great Noligwa, Kopanang and Moab Khotsong feed to a combination of plants.
(6)Tonnes refers to a metric tonne which is equivalent to 1000 kilograms.
(7)The Ore Reserve contains 1 175 tonnes of silver to be recovered as a by-product.
(8)0.41 million tonnes of sulfur will be recovered from processing the Ore Reserve.
(9)Open pit and underground mining, respectively.
Rounding may result in computational differences.

119


The 2009 Probable Ore Reserves include Ore Reserves below infrastructure in the case of the following underground mines currently in production:
             
Mine Tonnes (millions)  Grade (grams/tonne)  Gold Content (tonnes) 
 
TauTona  0.48   13.93   6.70 
 
Mponeng  25.02   11.84   296.30 
 
Moab Khotsong  11.84   10.35   122.56 
 
Obuasi  3.3   13.14   43.41 
 
AGA Mineração  4.19   5.6   23.49 
 
Total  44.83   10.99   492.46 
 
Rounding may result in computational differences.

120


Stockpiles: Imperial

Stockpiles are previously mined ore scheduled for future process plant feed. The Proven and Probable Ore Reserves includeReserve includes the following stockpile material:

             
  At December 31, 2010 
          Gold content 
Stockpiles Tons (million)  Grade (ounces/ton)  (million ounces) 
 
South Africa
            
Surface sources(2)
  121.79   0.014   1.74 
 
Continental Africa
            
Ghana
            
Iduapriem  4.29   0.030   0.13 
 
Guinea
            
Siguiri (85 percent)(1)(3)
  67.22   0.016   1.08 
 
Mali
            
Morila (40 percent)(1)
  5.53   0.040   0.22 
Sadiola (41 percent)(1)
  2.57   0.086   0.22 
Yatela (40 percent)(1)
  0.26   0.019    
 
Namibia
            
Navachab  9.05   0.022   0.20 
 
Tanzania
            
Geita  7.57   0.032   0.24 
 
Australasia
            
Australia
            
Sunrise Dam  7.26   0.049   0.35 
 
Americas
            
Argentina
            
Cerro Vanguardia (92.5 percent)(1)
  12.35   0.020   0.25 
 
Brazil
            
Serra Grande (50 percent)(1)
  0.03   0.083    
 

 

 
Stockpiles  At December 31, 2012 

 

 
   Tons (million)   Grade (ounces/ton)   Gold content
(million ounces)
 

 

 

South Africa

      

Surface sources(2)

   879.66     0.008     7.17   

 

 

Continental Africa

      

Ghana

      

Iduapriem

   7.33     0.024     0.18   

Obuasi

   0.12     0.130     0.02   

 

 

Guinea

      

Siguiri (85 percent)(1)(3)

   67.63     0.017     1.12   

 

 

Mali

      

Morila (40 percent)(1)

   1.70     0.033     0.06   

Sadiola (41 percent)(1)

   4.00     0.059     0.24   

Yatela (40 percent)(1)

   0.06     0.041     0.00   

 

 

Namibia

      

Navachab

   12.48     0.020     0.25   

 

 

Tanzania

      

Geita

   12.26     0.036     0.44   

 

 

Australasia

      

Australia

      

Sunrise Dam

   16.51     0.033     0.54   

Tropicana (70 percent)(1)

   0.32     0.051     0.02   

 

 

Americas

      

Argentina

      

Cerro Vanguardia (92.5 percent)(1)

   12.83     0.018     0.23   

 

 

Brazil

      

Serra Grande

   0.09     0.055     0.00   

 

 

(1)

Ore ReservesReserve attributable to AngloGold Ashanti’s percentage interest shown.

(2)

Centralized operations treating material on surface that was previously generated by several underground operations.

(3)

Spent heap included in Ore Reserve.

The rounding of figures and converting from metric to imperial units may result in minor computational discrepancies.

121The rounding of figures and converting from metric to imperial units may result in minor computational discrepancies.


Stockpiles: Imperial

Stockpiles are previously mined ore scheduled for future process plant feed. The Proven and Probable Ore Reserves includeReserve includes the following stockpile material:

             
  At December 31, 2009 
          Gold content 
Stockpiles Tons (million)  Grade (ounces/ton)  (million ounces) 
 
South Africa
            
Surface
            
Vaal River Surface — SA MET(2)
  119.33   0.015   1.74 
West Wits Surface — SA MET(2)
  8.88   0.017   0.15 
 
Continental Africa
            
Ghana
            
Iduapriem  3.05   0.032   0.10 
Obuasi  5.62   0.058   0.33 
 
Guinea
            
Siguiri (85 percent)(1)(3)
  64.86   0.016   1.06 
 
Mali
            
Morila (40 percent)(1)
  7.40   0.043   0.32 
Sadiola (41 percent)(1)
  4.52   0.072   0.33 
Yatela (40 percent)(1)
  1.33   0.033   0.04 
 
Namibia
            
Navachab  7.58   0.022   0.17 
 
Tanzania
            
Geita  2.95   0.047   0.14 
 
Australasia
            
Australia
            
Sunrise Dam  7.43   0.045   0.34 
 
Americas
            
Argentina
            
Cerro Vanguardia (92.5 percent)(1)
  14.45   0.018   0.26 
 
Brazil
            
Serra Grande (50 percent)(1)
  0.05   0.093   0.01 
 

 

 
Stockpiles  At December 31, 2011 

 

 
   Tons (million)   Grade (ounces/ton)   Gold content
(million ounces)
 

 

 

South Africa

      

Surface sources(2)

   546.11     0.009     4.96   

 

 

Continental Africa

      

Ghana

      

Iduapriem

   6.28     0.027     0.17   

 

 

Guinea

      

Siguiri (85 percent)(1)(3)

   66.59     0.016     1.09   

 

 

Mali

      

Morila (40 percent)(1)

   3.58     0.036     0.13   

Sadiola (41 percent)(1)

   4.69     0.060     0.28   

Yatela (40 percent)(1)

   0.41     0.019     0.01   

 

 

Namibia

      

Navachab

   4.47     0.031     0.14   

 

 

Tanzania

      

Geita

   12.16     0.036     0.43   

 

 

Australasia

      

Australia

      

Sunrise Dam

   15.92     0.033     0.53   

 

 

Americas

      

Argentina

      

Cerro Vanguardia (92.5 percent)(1)

   14.23     0.019     0.27   

 

 

Brazil

      

Serra Grande (50 percent)(1)

   0.03     0.055     0.00   

 

 

(1)

Ore ReservesReserve attributable to AngloGold Ashanti’s percentage interest shown.

(2)

Centralized operations treating material on surface that was previously generated by several underground operations.

(3)

Spent heap included in Ore Reserve.

The rounding of figures and converting from metric to imperial units may result in minor computational discrepancies.

122The rounding of figures and converting from metric to imperial units may result in minor computational discrepancies.


Stockpiles: Metric

Stockpiles are previously mined ore scheduled for future process plant feed. The Proven and Probable Ore Reserves includeReserve includes the following stockpile material:

             
  At December 31, 2010 
          Gold content 
Stockpiles Tonnes (million)  Grade (grams/tonne)  (tonnes) 
 
South Africa
            
Surface sources(2)
  110.49   0.49   54.10 
 
Continental Africa
            
Ghana
            
Iduapriem  3.89   1.05   4.06 
 
Guinea
            
Siguiri (85 percent) (1)(3)
  60.98   0.55   33.62 
 
Mali
            
Morila (40 percent)(1)
  5.02   1.39   6.97 
Sadiola (41 percent)(1)
  2.33   2.95   6.88 
Yatela (40 percent)(1)
  0.23   0.66   0.15 
 
Namibia
            
Navachab  8.21   0.77   6.31 
 
Tanzania
            
Geita  6.87   1.09   7.51 
 
Australasia
            
Australia
            
Sunrise Dam  6.58   1.67   11.02 
 
Americas
            
Argentina
            
Cerro Vanguardia (92.5 percent)(1)
  11.20   0.70   7.83 
 
Brazil
            
Serra Grande (50 percent)(1)
  0.03   2.83   0.08 
 

 

 
Stockpiles  At December 31, 2012 

 

 
   Tonnes (million)   Grade (grams/tonne)   Gold content
(tonnes)
 

 

 

South Africa

      

Surface sources(2)

   798.01     0.28     222.93   

 

 

Continental Africa

      

Ghana

      

Iduapriem

   6.65     0.83     5.53   

Obuasi

   0.11     4.28     0.49   

 

 

Guinea

      

Siguiri (85 percent)(1)(3)

   61.35     0.57     34.98   

 

 

Mali

      

Morila (40 percent)(1)

   1.54     1.14     1.75   

Sadiola (41 percent)(1)

   3.63     2.04     7.40   

Yatela (40 percent)(1)

   0.05     1.36     0.07   

 

 

Namibia

      

Navachab

   11.32     0.70     7.89   

 

 

Tanzania

      

Geita

   11.12     1.23     13.67   

 

 

Australasia

      

Australia

      

Sunrise Dam

   14.98     1.12     16.74   

Topicana (70 percent)(1)

   0.29     1.76     0.51   

 

 

Americas

      

Argentina

      

Cerro Vanguardia (92.5 percent)(1)

   11.64     0.62     7.22   

 

 

Brazil

      

Serra Grande

   0.08     1.96     0.15   

 

 

(1)

Ore ReservesReserve attributable to AngloGold Ashanti’s percentage interest shown.

(2)

Centralized operations treating material on surface that was previously generated by several underground operations.

(3)

Spent heap included in Ore Reserve.

The rounding of figures and converting from metric to imperial units may result in minor computational discrepancies.

123The rounding of figures and converting from metric to imperial units may result in minor computational discrepancies.


Stockpiles: Metric

Stockpiles are previously mined ore scheduled for future process plant feed. The Proven and Probable Ore Reserves includeReserve includes the following stockpile material:

             
  At December 31, 2009
        Gold content 
Stockpiles Tonnes (million)  Grade (grams/tonne)  (tonnes) 
 
South Africa
            
Vaal River Surface — SA MET(2)
  108.26   0.50   54.02 
West Wits Surface — SA MET(2)
  8.06   0.57   4.57 
 
Continental Africa
            
Ghana
            
Iduapriem  2.77   1.08   2.99 
Obuasi  5.10   2.01   10.23 
 
Guinea
            
Siguiri (85 percent) (1)(3)
  58.84   0.56   32.83 
 
Mali
            
Morila (40 percent)(1)
  6.71   1.49   9.99 
Sadiola (41 percent)(1)
  4.10   2.47   10.14 
Yatela (40 percent)(1)
  1.20   1.14   1.37 
 
Namibia
            
Navachab  6.87   0.77   5.28 
 
Tanzania
            
Geita  2.67   1.63   4.35 
 
Australasia
            
Australia
            
Sunrise Dam  6.74   1.55   10.47 
 
Americas
            
Argentina
            
Cerro Vanguardia (92.5 percent)(1)
  13.11   0.62   8.14 
 
Brazil
            
Serra Grande (50 percent)(1)
  0.04   3.2   0.14 
 

 

 
Stockpiles  At December 31, 2011 

 

 
   Tonnes (million)   Grade (grams/tonne)   Gold content
(tonnes)
 

 

 

South Africa

      

Surface sources(2)

   495.42     0.31     154.43   

 

 

Continental Africa

      

Ghana

      

Iduapriem

   5.70     0.94     5.32   

 

 

Guinea

      

Siguiri (85 percent)(1)(3)

   60.41     0.56     33.94   

 

 

Mali

      

Morila (40 percent)(1)

   3.25     1.24     4.02   

Sadiola (41 percent)(1)

   4.26     2.05     8.71   

Yatela (40 percent)(1)

   0.37     0.64     0.24   

 

 

Namibia

      

Navachab

   4.06     1.06     4.31   

 

 

Tanzania

      

Geita

   10.50     1.25     13.10   

 

 

Australasia

      

Australia

      

Sunrise Dam

   14.44     1.14     16.43   

 

 

Americas

      

Argentina

      

Cerro Vanguardia (92.5 percent)(1)

   12.91     0.64     8.28   

 

 

Brazil

      

Serra Grande (50 percent)(1)

   0.03     1.89     0.05   

 

 

(1) 

(1)

Ore ReservesReserve attributable to AngloGold Ashanti’s percentage interest shown.

(2)

Centralized operations treating material on surface that was previously generated by several underground operations.

(3)

Spent heap included in Ore Reserve.

The rounding of figures and converting from metric to imperial units may result in minor computational discrepancies.

124The rounding of figures and converting from metric to imperial units may result in minor computational discrepancies.


Drill hole spacing: Imperial

In determining the Proven and Probable Ore Reserves,Reserve, AngloGold Ashanti applied the following drill hole spacings:

Drill Hole Spacings
Proven Ore ReserveProbable Ore Reserve

South Africa

   

Underground sources

 Drill Hole Spacings
Proven Ore ReservesProbable Ore Reserves
South Africa
Underground sources

Ore body opened up, developed and sampled on a 7 to 10 foot spacing on raise lines and on a 16 x 16 grid thereafter

 From a 131 x 131 foot spacing up to 3281 x 3281 foot spacing

Surface sources

 
Surface sources

Variable sampling strategies: Belt samplers, cross stream residue samplers and bulk sampling campaigns

 Variable sampling strategies: Belt samplers, cross stream residue samplers

Continental Africa

   
Continental Africa

Democratic Republic of the Congo

   

Kibali

33 x 16 feet

131 x 131 feet

Ghana

   

Iduapriem

 

33 x 49 feet, 164 x 164 feet

164 x 246 feet, 328 x 164 feet

 

164 x 246 feet, 164 x 164328 feet,

328 x 246 feet

Obuasi — Surface

 

33 x 33 feet, 66 x 66 feet, 131 x 66 feet

 

98 x 98 feet,

Obuasi — Underground66 164 x 66164 feet,

197 x 197 feet

Guinea

   
Guinea

Siguiri

 
Siguiri

16 x 33 feet, 16 x 39 feet, 33 x 33 feet

 

66 x 131 feet, 82 x 82 feet, 164 x 82 feet

Mali

   
Mali

Sadiola

 
Morila33

16 x 33 feet

98 x 98 feet
Sadiola66 x 66 feet, 82 x 82 feet

 82 x 164 feet
Yatela

33 x 33 feet, 82 x 82 feet, 164 x 82 feet

Yatela

 

33 x 16 feet, 82 x 82 feet

82 x 82 feet, 115 x 148 feet

Namibia

   
Namibia

Navachab

 
Navachab33 x 33 feet82 x 164 feet
Tanzania
Geita

16 x 33 feet, 33 x 33 feet

 131

82 x 13182 feet

Tanzania

   

Geita

16 x 33 feet, 16 x 16 feet

66 x 66 feet, 131 x 131 feet,

164 x 164 feet

Australasia

   

Australia

   

Sunrise Dam

 

33 x 33 feet, 82 x 82 feet

 

66 x 66 feet, 131 x 131 feet

Tropicana

33 x 39 feet, 82 x 82 feet

164 x 164 feet

Americas

   
Americas

Argentina

   
Argentina

Cerro Vanguardia

10 x 49 feet, 41 x 16 feet

131 x 131 feet

Brazil

   
Cerro Vanguardia

AGA Mineraçáo

 41

49 x 4149 feet,

131 x 131 feet
Brazil
AGA Mineraçáo66 x 6633 feet, 82 x 82 feet. Drilling pattern offeet,

98 x 98 feet, 98 x 197 x 66 feet for Cuiabá Expansion Project.

 66

98 x 6682 feet, 164 x 98 feet, 164 x 164 feet.feet, 98 x 197 feet, 410 x 82 feet, 98 x 98 feet, 197 x 197 feet

Serra Grande

 
Serra Grande

33 x 33 feet, 66 x 33 feet

 

33 x 66 feet, 66 x 164 feet, 328 x 82 feet

(50 percent)

United States of America

   
United States of America

Cripple Creek & Victor

 

<98 x 98 feet

 >98

148 x 98148 feet

125


Drill hole spacing: Metric

In determining the Proven and Probable Ore Reserves,Reserve, AngloGold Ashanti applied the following table of drill hole spacings:

spacing:

Drill Hole Spacing
Proven Ore ReserveProbable Ore Reserve

South Africa

   

Underground sources

 Drill Hole Spacings
Proven Ore ReservesProbable Ore Reserves
South Africa
Underground sources

Ore body opened up, developed and sampled on a 2 to 3 meter spacing on raise lines and on a 5 x 5 grid thereafter

 From a 40 x 40 meter spacing up to 1000 x 1000 meter spacing

Surface sources

 
Surface sources

Variable sampling strategies: Belt samplers, cross stream residue samplers and bulk sampling campaigns

 Variable sampling strategies: Belt samplers, cross stream residue samplers

Continental Africa

   
Continental Africa

Democratic Republic of the Congo

   

Kibali

10 x 5 meter40 x 40 meter

Ghana

   

Iduapriem

 

10 x 15 meter, 50 x 50 meter,

50 x 75 meter, 100 x 50 meter

 

50 x 75 meter, 50 x 50100 meter,

100 x 75 meter

Obuasi — Surface

 

10 x 10 meter, 20 x 20 meter,

40 x 20 meter

 30 x 30 meter,
Obuasi — Underground20 50 x 2050 meter,60 x 60 meter

Guinea

   
Guinea

Siguiri

 
Siguiri

5 x 10 meter, 5 x 12 meter,

10 x 10 meter

 20 x 40 meter, 25 x 25 meter, 50 x 25 meter

Mali

   
Mali

Sadiola

 
Morila105 x 10 meter30 x 30 meter
Sadiola20 x 20 meter, 25 x 25 meter25 x 50 meter
Yatela 10 x 10 meter, 25 x 25 meter,35 50 x 4525 meter
Namibia
Navachab

Yatela

 10 x 105 meter, 25 x 25 meter 25 x 25 meter, 35 x 45 meter

Namibia

   
Tanzania
Geita

Navachab

 5 x 10 meter, 10 x 10 meter 4025 x 4025 meter

Tanzania

   

Geita

5 x 10 meter, 5 x 5 meter20 x 20 meter, 40 x 40 meter, 50 x 50 meter

Australasia

   

Australia

   

Sunrise Dam

 10 x 10 meter, 25 x 25 meter 20 x 20 meter, 40 x 40 meter

Tropicana

10 x 12 meter, 25 x 25 meter50 x 50 meter

Americas

   
Americas

Argentina

   
Argentina

Cerro Vanguardia

 
Cerro Vanguardia3 x 15 meter, 12.5 x 12.55 meter 40 x 40 meter

Brazil

   
Brazil

AGA Mineraçáo

 
AGA Mineraçáo

15 x 15 meter, 20 x 2010 meter,

25 x 25 meter. Drilling pattern ofmeter, 30 x 30 meter,

30 x 60 x 20 for Cuiabá Expansion Project.meter

 20

30 x 2025 meter, 50 x 30 meter, 50 x 50 meter.meter,

30 x 60 meter, 125 x 25 meter, 30 x 30 meter, 60 x 60 meter

Serra Grande

 
Serra Grande

10 x 10 meter, 20 x 10 meter

 

10 x 20 meter, 20 x 50 meter, 100 x 25 meter

(50 percent)

United States of America

   
United States of America

Cripple Creek & Victor

 <30 x 30 meter >3045 x 3045 meter

126


DEVELOPMENT
Project ONE, AngloGold Ashanti’s all-encompassing change program, gained increased traction across the organization during 2010 as its teams moved aggressively to progress implementation. The model was rolled out at 15 sites during the year, adding to the eight that went live in 2009. Originally designed to facilitate delivery of the company’s five-year business objectives, which encompass an ambitious set of financial, operating and sustainability targets, Project ONE has secured tangible operating and cost efficiencies which together have helped unlock almost $500 million in operating cash flow improvements across the business, with potential to improve on that figure in coming years. The implementation of the model has also resulted in improvements in managerial effectiveness and accountability, both crucial to ensuring the improvements are sustained and enhanced. Project ONE is composed of two integrated initiatives — theSystem for People (SP)and theBusiness Process Framework (BPF)— which together promote standard business processes across every area of the company in order to ensure that the right people are in the right roles and are working to ensure stable processes that deliver consistently excellent results. The greatest advantage of Project ONE is that it engages employees as active participants in the design and the detail of their work, while leaders play a significant role in creating and sustaining a values-based culture that prioritizes safety, diversity, mutual respect for colleagues, the environment and communities in which AngloGold Ashanti operates. Ultimately, Project ONE demands strict accountability at every level of the organization as it strives towards achieving those five-year goals that were set in 2008 of: reducing accident rates by 70 percent; increasing overall productivity by 30 percent; cutting reportable environmental incidents by 60 percent; increasing production by 20 percent; achieving a 25 percent real reduction in costs; and earning a return of at least 15 percent on capital employed, through the commodity and investment cycle. The goals were reset in 2010.
TheSPis a managerial effectiveness system focused on ensuring that those at each level in the organization are held directly accountable for their work responsibilities. This component of Project ONE was designed to create the most effective organizational design possible, in which a culture of mutual trust is fostered in order to facilitate the efficient execution of work. A core team has been established to enhance the design and development of the SP and to provide ongoing internal support during its continued implementation. This process will be led by Charles Carter, Executive Vice President — Business Strategy and Organizational Effectiveness.
TheBPFis the second component of Project ONE. This is a scientifically rigorous system focused heavily on short- and long-term planning and execution of work. The BPF clearly defines business expectations and sets operational targets while also seeking continuous improvement once operational volatility has been eliminated. The BPF was launched in August 2008 under the direction of Tony O’Neill, Executive Vice President: Business and Technical Development and has seen a string of positive results across various mines, plants, shafts and corporate structures, where well-planned operating methodologies have reduced volatility and increased average productivity. While great progress was made in the implementation of BPF, the process is still in its formative stages and is expected to yield sustained productivity improvements in coming years as it is bedded down across the business.
The Mponeng plant in South Africa, at the outset one of AngloGold Ashanti’s most efficient operating units, was chosen as a pilot site for the project’s implementation to showcase its effectiveness. Throughput improvements of 15 percent achieved during 2009 demonstrated the potential that the process can unlock. Before the implementation of the BPF, ore from the Mponeng mine would regularly be trucked to neighboring plants for processing, as the mill struggled to cope with volumes from AngloGold Ashanti’s largest mine. Since implementation of BPF, however, the plant has improved productivity to the point that it now has spare capacity, leaving the challenge now squarely with the mining operation to improve tonnage to fill the gap. The early signs of the implementation of BPF at the more extensive and complex underground mines in South Africa toward the end of 2010 have been encouraging. At the Mponeng plant, meanwhile, the management team is applying additional Project ONE business process elements to further improve metallurgical performance. Emphasis on stabilized processes has also resulted in a 20 percent reduction in sodium cyanide consumption. Crucially, these improved processes and the lessons from their development can be rapidly extended throughout the company, a key benefit of the uniform operating model.
Improvements at Geita in Tanzania, are also emblematic of the potential that BPF can unlock. Implementation of the change model saw management’s focus shift to improved planning, scheduling and resourcing of maintenance work, in order to limit operational interruptions in the plant. This led to improved recoveries and a 30 percent increase in plant throughput. This performance has held since 2009, demonstrating the sustainability of the process. The BPF was also applied to the maintenance of the heavy mobile equipment fleet. Truck availability has soared following improvements to the service strategy and the establishment of a separate work crew to attend to unexpected breakdowns in order not to disrupt essential scheduled work. These improvements, coupled with improvements to utilization through more efficient scheduling of driver shifts and improved road conditions in the pit, contributed towards Geita’s truck fleet reducing from

127


48 trucks in 2009 to 34 at the end of 2010, while moving more tons. Further fleet reductions are planned in 2011. The implications for fleet replacement and overall capital efficiency are significant and demonstrate how BPF supports the overall objective of achieving returns on capital of more than 15 percent, throughout the cycle.
Geita’s Project ONE implementation teams have since been repatriated to their home regions in Australia, West Africa and Brazil, where similar improvements are becoming evident. Most encouraging is the application of the improved planning, scheduling and resourcing of work to AngloGold Ashanti’s mining operations. The first pilot mining site, Lamego in Brazil, reported significant improvements in jumbo drilling advances as well as drilling and blasting cycles as a direct consequence of enhanced planning and scheduling. A similar focus is being applied at Sunrise Dam in Australia, Iduapriem in Ghana and the deep-level underground mines in South Africa.
Integrating the SP and the BPF was a priority in 2010. The systems are hugely complementary in delivering rigorous approaches to planning, scheduling, resourcing and execution of work. The resultant creation of cooperative processes, employee engagement and teamwork is a primary Project ONE objective that furthers a range of other initiatives intrinsically linked to AngloGold Ashanti’s organizational values.
Safety Transformation, an initiative developed to underpin safety improvements, outlines AngloGold Ashanti’s strategy to create workplaces free of occupational injury and illness. Embedding specific safety elements and concepts which defines the new approach, into both components of Project ONE, will ensure sustainability of the overall safety effort. In the first quarter of 2011, specific safety training will commence, focused on Incident Management and supporting integrated Project ONE delivery.
We value diversity’ and ‘We treat each other with dignity and respect‘, are two specific values that guide AngloGold Ashanti’s efforts toward transformation or employment equity. Achieving these goals requires the transformation strategy be an integral part of Project ONE. A policy for the transformation and localization of labor was approved by the board of directors in November 2010 and will serve as a framework within which the regions will develop their own strategies. The policy is an expansion of AngloGold Ashanti’s previous approach to legal transformation requirements in South Africa which were focused on redressing past employment inequities by enhancing the representation of historically disadvantaged groups. With the full commitment from the board of directors and the executive team in October 2008, the policy was developed to include the elimination of local barriers to skills development and upward mobility, and to progressively recruit local talent into technical and managerial roles in host countries. The policy aims to take into account the legislative frameworks of these countries, as well as the company’s own values, in order to redress historical imbalances, promote gender equality and employment of local citizens at all levels, as well as the equitable employment of people with disabilities.
COMPETITION
As gold mining is a mature and regulated industry, and very significant volumes of gold and gold derivatives trade in the world markets independent of gold mine supply, AngloGold Ashanti does not consider that competition for sales plays any role in its operations as a gold producer. However, gold producers do compete against each other for acquisition of mining assets, exploration opportunities and human resources.
INTELLECTUAL PROPERTY
AngloGold Ashanti, as a group, is not dependent on intellectual property for the conduct of its business as a whole.
SUSTAINABLE DEVELOPMENT — A SUMMARY
Business sustainability
AngloGold Ashanti has reported on social investment and sustainability issues since 2002. In 2009, the reporting approach used by the company was reviewed, taking into account leading international practice, and, the company moved towards the production of a more focused report, which clearly identifies the issues that are important in making the business viable over the longer term.
Six focus areas were identified for sustainability reporting in 2010, and are summarized in the table below.

128


This table sets out the context for each issue. More detail on our performance can be found in the company’s sustainability report for 2010 —Sustainable Gold.
Key focus areasOur context
Improving operational safety
performance
Safety is our first value and the most important business consideration. We are committed to creating the safest possible environment for our employees and, over the longer term, to operating an injury-free business.
Managing health impacts that arise at our operations and in our communities
We do not accept ill health as a natural consequence of our business and believe that employees must be able to go home fit and well at the end of each working day. Our most material health risks relate to silicosis, noise-induced hearing loss, HIV/AIDS and malaria.
Operating with respect for human
rights
Our concern for operating with respect for human rights stems from our aim to place people first in all aspects of the business. Human rights considerations cut across a range of disciplines at AngloGold Ashanti, including health, safety, security, community, environmental, human resources, legal and regulatory, governance and labor relations. Human rights considerations have been considered in developing policies in these areas, and we have focused in particular on embedding the Voluntary Principles on Security and Human Rights (VPSHR) into our security practices. We have not, however, had a company-wide human rights policy in place. This is an area of work which was initiated in 2010 and will be developed further in 2011, in alignment with progress that has been made in the UN in defining the responsibilities of business to respect human rights.
Relationships with the communities
which host our operations
AngloGold Ashanti is developing a global sustainability strategy which aims to create value for all of its business and social partners. We operate in regions where communities are vulnerable. Transparency is therefore important in our interactions with governments and communities, and essential if they are to derive sustainable economic benefit from our operations.
A lifecycle approach — exploration and closure
We aim to leave host communities better off for our presence, which implies that, even at the exploration phase of a project, we need to take into account the fact that our mines will eventually close. Communities which have hosted our operations must be consulted on what we leave behind in terms of infrastructure and impacts.
Effective stewardship of the environment and of the natural resources that we use, primarily land, water and energy
Mining operations use increasingly scarce resources such as energy, water and land and can have substantial impacts on the environment, both positive and negative. Key concerns in this area relate to water, energy and greenhouse gas emissions, land, climate change, hazardous materials and air quality. In February 2010, operations at Iduapriem in Ghana were suspended for a period of two and a half months due to potentially adverse environmental impacts arising from the tailings storage facility at the operation. In conjunction with the Environmental Protection Agency of Ghana (EPA), an interim location for tailings storage was identified. Construction of a new storage facility to cater for life of mine tailings deposition is in progress and this new facility will become operational in the first half of 2011.
Our sustainability commitments
In the pages which follow, we set out our future commitments on each of these focus areas, as well as our performance against commitments made in our 2009 reporting cycle. The commitments listed below are based on the key focus areas currently identified. They will be reviewed in light of the strategy process that is underway.
Improving operational safety performance
Our 2009 commitmentsOur progress in 2010
Achieving a further 20 percent reduction in the all injury frequency rate with the long-term objective of operating an accident-free businessWe achieved a reduction of 11 percent in our all injury frequency rate in 2010. Although this is short of our target for the year, we are pleased to be able to report a 45 percent improvement in the all injury frequency rate since 2007, from 20.95 in 2007 to 11.50 in 2010. Due to the transformational nature of our safety interventions, our expectation was that improvements would be achieved through a series of step changes.
Begin implementation of the Safety Transformation projectImplementation of the Safety Transformation project has begun — the project was launched in May 2010. Significant work was undertaken on integrating the project into the operating framework of the business.

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Our 2011 commitments
In 2011, we aim to achieve continued improvement in safety performance towards our 2015 business goal of an all injury frequency rate of less than 9 per million hours worked. Our target to reduce fatalities by 70 percent by 2012 (from a 2007 baseline) remains intact.
Work is under way to continue implementation of safety transformation within Project ONE in 2011 through:
completion of guidelines by mid-2011 to support roll out of the global safety standards;
implementation of a new model and process for accident investigation;
a review of organizational safety capabilities; and
development of operational safety plans to business unit teams.
Managing health issues
Our 2009 commitmentsOur progress in 2010
Elimination of new cases of silicosis after December 2013 among employees in South Africa with no occupational exposure prior to 2008We are working towards achievement of this industry milestone. Due to the latency period of the disease we are not yet able to provide a meaningful assessment of this group of employees. We have, however, met and exceeded industry milestones on silica dust exposure as one of the measures in place to combat this disease and have set lower internal benchmarks for exposure.
Intensify hearing conservation programs and continue to silence — to acceptable levels — all identified noise equipment in order to achieve the industry milestone of no deterioration in hearing greater than 10 percent among occupationally-exposed individuals at South African operationsWe are working towards achievement of this industry milestone. It is still too early to provide a meaningful assessment of this group of employees due to the latent nature of this disability.

We have been in compliance with the 2013 industry noise targets since 2008 and have now set lower internal benchmarks.
Maintain a rate of 80 percent of South African employees attending voluntary counseling and testing for HIV (VCT) during 2010, excluding current wellness clinic attendees74 percent of South African employees attended VCT during 2010. The uptake of VCT programs has been falling since 2008. Programs relating to the prevention of HIV/AIDS have been in place at AngloGold Ashanti since 2000 and numbers of employees presenting themselves for VCT are declining. Communications and awareness efforts continue, as does the provision of anti-retroviral therapy (ART) and wellness programs to affected employees.
Reduce by 50 percent the number of avoidable drop-outs from wellness programs in 2010Over 4,000 employees attended wellness programs in 2010 and ART continues to be supplied to approximately 2,500 employees for whom this treatment is clinically indicated. We have not been able to measure the number of drop-outs from wellness programs accurately, due to the difficulty of establishing the cause of an employee discontinuing treatment.
Reduce occupational tuberculosis (TB) incidence to 3 percent of all South African employees by 2010We have achieved this target. The incidence of TB among South African employees was reduced to 2.64 percent in 2010.
Successfully cure 85 percent of new TB cases in 2010Over 90 percent of new cases were successfully cured in 2009. Data for 2010 is not yet available as treatment programs for TB last between six and eight months.
Our 2011 commitments
To progress our health strategy, we intend to undertake health risk assessments and health system audits at our operations in Continental Africa by the end of 2011 and complete health risk assessments and health system audits for the balance of our operations by the end of 2012.

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We have set the following goals relating to wellness and occupational environment:
continue progress towards the industry milestone of no new cases of silicosis among previously unexposed employees in South Africa (2008 onwards) after December 2013;
meet the industry milestone of no deterioration in hearing greater than 10 percent among occupationally-exposed individuals at South African operations;
roll out integrated malaria programs, drawing on the model implemented at Obuasi in Ghana, at operations in Mali, Tanzania and Guinea; and
in South Africa, continue efforts to reduce occupational tuberculosis (TB) incidence to 2.25 percent of all South African employees by 2015 and successfully cure 85 percent of new cases (our long-term target is the reduction of TB incidence to 1.5 percent of all South African employees by 2029).
Human rights and business
Our 2009 commitmentsOur progress in 2010
Zero violations of the Voluntary Principles on Security and Human Rights (VPSHR) in 2010In 2010, two violations of the VPSHR were recorded, details are provided in the group-level Sustainability Report. We are continuing efforts to embed the VPSHR into our security management systems and practices in order to effect the continuous improvement necessary to reach our target of zero VPSHR violations.

We continue to encourage self reporting by security personnel of potential violations.
Develop a standard approach for all contracts with private and public securityA review of all contracts with private and public security is under way in order to achieve this target and is scheduled for completion by the end of 2011.
Our 2011 commitments
In 2011, we aim to develop a more effective approach to human rights issues by putting in place a company-wide policy, framework and procedures.
In the area of security and human rights, we continue to target zero incidents under the Voluntary Principles on Security Human Rights (VPSHR) and aim to reduce the number of allegations of VPSHR incidents that are made. To support achievement of this target, we will:
complete implementation of the global security framework by the end of 2011; and
review all contracts with private and public security services worldwide in order to standardize contract requirements by the end of 2011.
AngloGold Ashanti and communities
Our 2009 commitmentsOur progress in 2010
Final approval of management standards and associated guidance material that govern how the company interacts with communitiesStandards have been developed and are scheduled for approval by the executive committee of the company in 2011. Work to develop guidance material will follow shortly after approval.
Incorporate community aspects into each operation’s ISO 14001 management system by 2012The ISO 14001 management system is in place at all operations and progress has been made towards incorporating community aspects. Further work is being done to support sites to meet the target date which is three years following approval of the management standards by the board.
Continue to embed the government relations function into decision-making processes, including through development of a management standard by 2011In 2010 progress was made in incorporating the government relations function into broader AngloGold Ashanti decision-making processes. The need for a management standard will be reviewed.
Roll-out of a pilot government engagement strategy model in South African and in a minimum of two other jurisdictions in 2011This pilot program remains work in progress in South Africa in 2011. Following its successful completion, we aim to extend the model to two other jurisdictions.
In South Africa, participate in the
Mining Charter review
We participated actively in the Mining Charter review, including through the relevant industry structures. The reviewed Mining Charter was agreed and published.

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Our 2011 commitments
In 2011, we aim to better define expectations for performance with regard to community and social performance. This will be done through community-focused management standards which are currently at the latest stages of finalization and review and are expected to be approved by the Executive Committee of the company in 2011.
Work to support and give effect to the standards will begin in 2011, after their approval, and will include the development of guidelines to aid in implementation of the standard and the allocation of appropriate resources.
To ensure an integrated approach to managing community and environmental aspects in line with the integration of the two functions, we aim to integrate community aspects into the ISO 14001 management system. Work towards this is already in progress; however, a specific work plan has been developed for 2011 to accelerate efforts such that sites will be ready to undergo certification audits by 2014.
Exploration and closure
Our 2009 commitmentsOur progress in 2010
Work on findings of review conducted in 2009 to address any site-level deficiencies in closure plans and ensure alignment with company management standard by 2011An internal multi-disciplinary committee continued to guide site-level closure planning to ensure alignment with the company standard by the end of 2011. A workshop was held in December 2010 to ensure alignment amongst environmental, social and accounting professionals within the company and to share best practices across the group.
Our 2011 commitments
In 2011 and 2012, assess compliance with the closure standard. Work to achieve compliance with the closure standard at all operations by the end of 2011 will continue. A corporate-led assurance and operations review will assess closure plans to ensure compliance and efficiency.
During 2011, the greenfield exploration business unit will be working to formalize and improve a process which will ensure that an appropriate level of community and environmental oversight is completed at each stage of exploration.
Environmental and natural resource stewardship
Our 2009 commitmentsOur progress in 2010
Continue work to improve energy and water performance including through the development of site-level objectivesComprehensive energy maps have been developed for South Africa and are being progressed for all other operations. A more complete range of water performance indicators is being developed for key aspects of water performance. Site water balances are being refined. A global approach for quantifying the energy and water benefits from business improvement projects is also being progressed.
Audit the global energy and water security position for all operationsHigh level energy and water security reviews have been completed at 15 of our 19 relevant operations and the balance will be completed in 2011. Strategic frameworks have been developed for energy and water management.
Continue to address key climate change opportunities and risksPreliminary preparations to understand site-specific climate change risks in greater detail have commenced. A project to install heat pumps at high-density residences in South Africa is almost complete and is expected to earn carbon credits. We are continuing to assess other opportunities for generating carbon credits, especially in the South Africa region where our energy consumption is 40 percent of the group total.
Final approval or development of management standards and associated guidance material that govern how the company interacts with the environmentProgress was made in agreeing a biodiversity management standard, which will be finalized in 2011. Guidance for the closure and rehabilitation management standard was finalized.

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Our 2011 commitments
Improve energy performance by:
developing site-based targets and action plans from 2012 onwards;
continuing to refine energy metrics, performance measurement and reporting during 2011; and
quantifying the energy benefits of business improvement initiatives.
Improve energy security at our operations by:
finalizing high-level reviews of site energy security arrangements during 2011; and
commencing the development of site-based energy security strategies for life of mine.
Improve water performance by:
developing site-based targets and action plans from 2012 onwards;
continuing to refine key performance indicators, performance measurement and reporting during 2011; and
quantifying the water benefits of business improvement initiatives.
Improve water security at our operations by:
finalizing high-level reviews of water security arrangements during 2011;
commencing the development of site-based water security strategies for life of mine; and
embedding integrated water management at all sites, and recognizing the value of managing water performance across entire site operations in a planned and coordinated manner.
Continue to address key climate change opportunities and risks, by specifying life-of-mine climate change risks in more detail for priority operations, starting in 2011 with those at greatest risk.
Over 2011 and 2012 a program of assessing compliance with the environment-focused management standards approved during 2009 will commence in the form of the biennial Community and Environment Review Program (CERP). Concurrently, a roll out phase to socialize finalized community-focused standards will commence, also as part of the CERP.
People
The following commitments were made in our 2009 report and progress against these commitments is reported below:
Our 2009 commitmentsOur progress in 2010
Continue with the roll out of the System for People (SP), including the global values surveySignificant progress was made during the year on implementation of the SP, with the development of a new delivery framework clearly defining corporate and regional roles. The global values survey was completed in 2010 and the results reviewed by the Executive Committee. The results will be fed back into the business in early 2011.
Review the wage negotiations strategy in Continental Africa and develop a model for conducting wage negotiations which can be applied throughout the company’s Continental African operationsA labor engagement model was developed and successful collective bargaining processes were concluded at the Siguiri mine in Guinea and Sadiola/Yatela mines in Mali.
Standardize, to the extent possible, the conditions of employment of senior managers to facilitate mobility within the companyA survey of conditions of employment with respect to senior and executive management was conducted by PwC on behalf of the company and the report submitted to the Remuneration Committee. This survey covered all the countries in which the company operates. The findings of this survey resulted in the formulation of the company’s Remuneration Policy that was approved by the shareholders at the annual general meeting held in May 2010.

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4C. ORGANIZATIONAL STRUCTURE
HEAD OFFICE STRUCTURE AND OPERATIONS
AngloGold Ashanti’s operations are organized on a regional basis. Management of AngloGold Ashanti is entrusted to the executive committee, comprising the two executive directors, seven executive vice presidents and one senior vice president. See “Item 6.: Directors, executive management and employees”.
Corporate activities
Activities provided in the corporate area fall into three categories. First, support is provided to the executive committee in managing AngloGold Ashanti as a whole. Second, certain activities are managed centrally, including strategic and business planning, marketing, corporate finance, treasury, exploration, technology and innovation, corporate secretarial and corporate affairs. Third, certain specialized services are directed from the center although they are managed by operations. These include mining, engineering, metallurgy, mineral resource management, safety and health, the environment and human resources.
AngloGold Ashanti has investments in numerous principal subsidiaries and joint venture interests, see “Item 19.: Exhibits — Exhibit 19.8 List of AngloGold Ashanti Limited subsidiaries” for details.
4D. Property, plant and equipment
For a discussion on AngloGold Ashanti’s mining properties, plant and equipment, see “Item 4B.: Business Overview”.
ITEM 4A:  UNRESOLVED STAFF COMMENTS

Not applicable.

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ITEM 5:  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion provides information that management believes is relevant to an assessment and understanding of the consolidated financial condition and results of operations of AngloGold Ashanti Limited under US GAAP for the three years ended and as at December 31, 2010, 20092012, 2011 and 2008.

2010.

This item should be read in conjunction with the Company’s consolidated financial statements and the notes thereto which are included under Item 18 of this annual report.

The principal accountant of AngloGold Ashanti has made reference to the work of other auditors in theirits report on the consolidated financial statements of AngloGold Ashanti Limited for the years ended December 31, 2010 and 2012 and therefore in compliance with Regulation S-X Rule 2-05 the separate reports of the other auditors are included in Item 18.

Overview

Headquartered

AngloGold Ashanti is a global gold mining company headquartered in Johannesburg, South Africa,Africa. AngloGold Ashanti’s main product is gold. As part of extracting gold the Company also produces silver, uranium oxide and sulfuric acid as by-products. The Company sells its products on world markets.

AngloGold Ashanti conducts gold-mining operations in the following regions, which represent its business segments:

South Africa (comprising the Vaal River and West Wits operations)

Continental Africa (comprising Ghana, Guinea, Mali, Namibia, the DRC and Tanzania operations)

Australasia (comprising Australia)

Americas (comprising Argentina, Brazil and United States of America)

In particular, AngloGold Ashanti has a global presence with 2021 operations in the four regions comprising open-pit and underground mines and surface metallurgical plants, in ten countries on four continents, which are supported by extensive, yet focused, exploration activities. For more information on the Company’s business and operations, see “Item 4B.: Business Overview – Products, operations and geographical locations”.

As at December 31, 20102012 the Company had on an attributable basis, Proven and Probable Ore Reserves of approximately 71.274.1 million ounces (including joint ventures). For the year ended December 31, 2010,2012, AngloGold Ashanti had an attributable gold production of approximately 4.523.9 million ounces (including joint ventures).

AngloGold Ashanti’s main product is gold. A portion of its revenue is also derived from sales of silver, uranium oxide and sulfuric acid. The Company sells its products on world markets.
AngloGold Ashanti conducts gold-mining operations in the following regions: South Africa; Continental Africa (Namibia, Ghana, Guinea, Mali and Tanzania); Australasia (Australia); Americas (Argentina, Brazil and United States of America). For more information on the Company’s business and operations, see “Item 4B.: Business Overview — Products, operations and geographical locations”.

AngloGold Ashanti’s costs and expenses consist primarily of production costs, royalties, exploration, general and administration costs and depreciation, depletion and amortization and exploration.amortization. Production costs include labor, mining contracts, fuel, lubricants, power, consumable stores which(which include explosives, timber and other consumablesconsumables), utilities and utilities.costs of environmental rehabilitation. The Company’s mining operations consist of deep-level underground mining methods as well as open-pit operations, both of which are labor intensive, therefore labor is a significant component of production costs.

With

Outlook

Gold production for 2013 is forecast to be between 4.1 million and 4.4 million ounces. Capital expenditure is expected to be approximately $2.10 billion in 2013 (2012: $2.15 billion).

AngloGold Ashanti’s results of operations, in ten countries on four continents, AngloGold Ashanti is exposedfinancial condition and prospects, as well as the company’s ability to meet its targets, may be adversely affected by a number of factors, relating to these specific countries that could affect its profitability,risks and uncertainties, some of which are beyond the company’s control, including gold prices, exchange rate fluctuations, inflation, as well as political, mining and other risks. TheseIn particular, our production outlook is subject to, among other things, labor disruptions, unplanned stoppages and safety-related interventions, the stability and availability of power as well as other operational risks. Certain of these risks, uncertainties and other factors are inherentdescribed in conducting mining operations“Item 3D.: Risk factors”. See also “Note regarding forward-looking statements”.

5A.

OPERATING RESULTS

INTRODUCTION

Economic uncertainty that characterized the major economies of the United States and Europe during 2011 continued into 2012. The gold price did not necessarily reflect such heightened uncertainty. Gold traded in a band between $1,565 per ounce and $1,785 per ounce, averaging $1,651 per ounce for the first three quarters of 2012.

In September 2012, the Federal Reserve announced a further round of quantitative easing (QE 3) which corresponded with an increase in the gold price above $1,700 per ounce for a short period of time before the gold price retreated once more below $1,700 per ounce level and it closed the year at $1,674 per ounce. The spot price averaged $1,668 per ounce for 2012, which is a 6 percent increase on the average price of $1,572 per ounce for 2011.

Physical demand for gold in 2012 was similarly disappointing with both major regions, India and China, reporting lower offtake year on year. India’s demand was impacted due to a global basis,jewellers’ strike and the Company applies measures wherever appropriate and feasible, to reduceincreased import duties, while China’s slowing economy saw jewellery demand fall 4.5 tonnes year on year.

As AngloGold Ashanti had eliminated its exposure to these factors.

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5A. OPERATING RESULTS
INTRODUCTION
The most significant eventhedge book in 2010, was the complete elimination of the hedge book, thus providing the company withit had full exposure to the prevailinghigher spot gold priceprices in future years.
2011 and 2012 as reflected in the increased net income over the period 2010 to 2012, notwithstanding lower production levels, exchange rate variances and increased costs.

Key factors affecting results

Gold prices

AngloGold Ashanti’s operating results are directly related to the price of gold, which can fluctuate widely and is affected by numerous factors beyond its control, including industrialinvestment, jewellery and jewelleryindustrial demand, expectations with respect to the rate of inflation, the strength of the US dollar (the currency in which the price of gold is generally quoted) and of other currencies, interest rates, actual or expected gold sales and purchases by central banks and the International Monetary Fund (IMF), global or regional political or economic events, and production and cost levels in major gold-producing regions. In addition, the price of gold is often subject to sharp, short-term changes because of speculative activities. The shift in gold demand from physical demand to investment and speculative demand may exacerbate the volatility of gold prices.

changes.

The current demand for and supply of gold may affect gold prices, but not necessarily in the same manner as current supply and demand affects the prices of other commodities. The supply of gold consists of a combination of new production and fabricated gold held by governments, public and private financial institutions, industrial organizations and private individuals.

As the amounts producedglobal gold production in any single year constituteconstitutes a very small portion of the total potential supply of gold, short term variations in current production do not necessarily have a significant impact on the supply of gold or on its price. The shift in gold demand from physical demand to investment and speculative demand may exacerbate the volatility of gold prices.

Yearly average spot gold prices have increased during the three years under review as follows:

2010 - $1,227 per ounce

2011 - $1,572 per ounce

2012 - $1,668 per ounce

AngloGold Ashanti’s net income for 2010 was adversely impacted by its hedge book, which was eliminated in the same year. Since the elimination of the hedge book, the Company has been fully exposed to spot gold prices, which resulted in higher income from gold sales.

In the first quarter of 2013, the gold price came under some pressure and it reached lows of $1,626 per ounce on January 14, 2013 due to muted jewellery demand from India and lower than anticipated investment demand. During the period from Friday, April 12, 2013 through Monday, April 15, 2013 the price of gold dropped $228 per ounce. On April 19, 2013, the afternoon fixing price for gold on the London Bullion Market was $1,404 per ounce. If revenue from gold sales falls for a substantialan extended period below the Company’s cost of production at its operations, AngloGold Ashanti could determine that it is not economically feasible to continue commercial production at any or all of its operations or to continue the development of some or all of its projects.

On May 24, 2011, the afternoon fixing price foroperations. Declining gold on the London Bullion Market was $1,527 per ounce.
Forprices may also force a discussionreassessment of the gold supplyfeasibility of a particular exploration or development project or projects, and demand dynamics, see “Item 4B.: Business overview — The Gold and Uranium Markets — Gold” in this annual report.
Production costs
Production costs include the cost of labor, mining contracts, fuel, lubricants, power, consumable stores (which include explosives, timber and other consumables) and utilities used in the production of gold. AngloGold Ashanti has no influence over the cost of most consumables, many of which are linked to some degreecould lead to the pricecurtailment or suspension of oilsuch projects. A sustained decrease in gold prices may force the Company to change its dividend payment policies, reduce expenditures and steel. AngloGold Ashanti estimates that for each $1 per barrel rise inundertake measures to address its cost base. In addition, the oil price, other factors remaining equal, the average cash costs under IFRS of all its operations increases by about $0.50 per ounce with the cash costs of certain of the company’s mines, particularly Geita, Cripple Creek & Victor, Siguiri and Sadiola, which, being more dependent on fuel, are more sensitive to changes in the price of oil. Furthermore, there has also been volatility recently in the price of steel, used in the manufacture of most forms of fixed and mobile mining equipment, which is a relatively large contributor to the operating costs and capital expenditure of a mine. For example, the price of flat Hot Rolled Coil (North American Domestic FOB) steel traded between $557 per ton and $698 per ton in 2010. Labor is also a significant component of production costs as AngloGold Ashanti’s mining operations consist of deep-level underground mining methods as well as open-pit operations, both of which are labor intensive.

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Effect of commodity instruments
During the year, AngloGold Ashanti had in place commodity hedging instruments to protect the selling price of some of its anticipated production. The use of such instruments had prevented full participationlower gold prices in subsequent increasesreserve calculations and life-of-mine plans could result in the market price of gold with respect to covered production. In order to provide full exposure to the rising spot price of gold, the Company completed its final tranche of the hedge buy-back program and settled all derivative gold contracts that had been used by the Company. As a result, the Company has eliminated its outstanding hedge commitments of 3.90 million ounces (or 100 percent) and had no outstanding hedge commitments as at December 31, 2010. Buy-back transactions resulted in cash outflows during the current year of $2,611 million. For a discussionmaterial write-downs of the Company’s commodity instruments see “Item 11.: Quantitivateinvestment in mining properties and qualitative disclosures about market risk”.
increase amortization, reclamation and closure charges.

ImpairmentsProduction levels

In addition to gold prices, AngloGold Ashanti reviewsAshanti’s revenue in any year is also influenced by its level of gold production. Production levels are in turn influenced by grades, tonnages mined and testsprocessed through the carrying valueplant, and metallurgical recoveries. Attributable gold production (including joint ventures) declined from 4.5 million ounces in 2010 to 3.9 million ounces in 2012. The decline in production levels is due to a variety of its assets when events or changesfactors, as follows:

South Africa: 32 percent decline in circumstances suggest thatproduction primarily due to the carrying amount may not be recoverable. AngloGold Ashanti values individual mining assetsunprotected strike action during September 2012 and October 2012 and increased levels of safety related stoppages at the lowest levelmines resulting in lower tonnages being mined and processed.

Continental Africa: 2 percent increase in production, with production levels declining in Ghana, Guinea, Namibia and Mali primarily due to lower recovered grades, compensated for which cash flows are identifiableby higher production from Tanzania primarily as independenta result of cash flows of other mining assetsimproved grades and liabilities.productivity improvements.

If there are indications that impairment may have occurred, AngloGold Ashanti prepares estimates of expected future cash flows for each group of assets. Expected future cash flows are inherently uncertain,

Australasia: 35 percent decline in production primarily due to unprecedented rainfalls, pitwall and could materially changeaccess ramp failure at Sunrise Dam, together with forecast decline in grades at the mine.

Americas: 13 percent increase in production from Americas primarily due to grade and productivity improvements.

Grades from gold ore bodies tend to decline as they mature over time. They are significantly affectedWith a view to reversing the grade decline, the Company embarked on the following initiatives:

Short-term: Continued implementation of Project ONE and aims to put in place optimum resources, business processes to restore stability, initially by reserveminimizing variations, and production estimates, together with economic factors such as spotonce stable, to further enhance productivity.

Medium-term: Active exploration programmes to replenish depletion in existing ore bodies by mine life extensions and forward gold prices, discount rates, currency exchange rates, estimates of costs to produce reserves and future capital expenditures.new mines.

If any of these uncertainties occur either alone or in combination, it could require management to recognize an impairment. In 2010, AngloGold Ashanti incurred an impairment charge of $91 million on long-lived assets. In 2009, AngloGold Ashanti incurred an impairment charge of $8 million on long-lived assets. See “Note 5 — Costs and Expenses” to the consolidated financial statements for a detailed description of impairments.
Effect of exchange rate fluctuations
Currently, a significant portion of AngloGold Ashanti’s revenues are generated

Long-term: Technology project in South Africa with a view to accessing the ore body at greater depth and further distance from existing infrastructure.

Concurrently, AngloGold Ashanti also embarked on ways of increasing the tonnage mined and processed, and processing improvements to enhance metallurgical recoveries.

Foreign exchange fluctuations

Production costs in all business segments are largely incurred in local currency where the relevant operation is located. US dollar denominated production costs and net income tend to be adversely impacted by local currency strength and favorably impacted by local currency weakness, assuming there are no other offsetting factors. AngloGold Ashanti’s financial results can be influenced significantly by the fluctuations in the South African Rand, Brazilian Real, Australian Dollar, and, to a lesser extent, in Brazil, Argentinathe Argentinean Peso, Ghanaian Cedi and Australia. Most of its production costs, therefore, are denominated inother local currencies, such ascurrencies. As set out below, during the year ended December 31, 2012, the US dollar strengthened and the South African rand, theRand and Brazilian real, the Argentinean peso and the Australian dollar. Real weakened, which had a favorable impact on AngloGold Ashanti’s US Dollar denominated production costs.

Average annual exchange rates to the US dollar

 

  

2012

 

   

2011

 

   

2010

 

 

South African Rand

   8.20    7.26    7.30 

Brazilian Real

   1.95    1.68    1.76 

Australian Dollar

   0.97    0.97    1.09 

In 2010,2012, the Company derived 6658 percent (62(55 percent including joint ventures) of its revenues from these countriesSouth Africa, Brazil, Australia and Argentina, and incurred 6259 percent (58(55 percent including joint ventures) of its production costs in these local currencies. A one percent strengthening of these local currencies against the US dollar will result in an increase ofin total cash costs, under IFRS, incurred of nearly $5about $6 per ounce. As the price of gold is denominated in US dollars and the Company realizes the majority of its revenues in US dollars, devaluation of these local currencies against the US dollar improves the Company’s production costs in the short-term. Conversely strengthening of these local currencies against the US dollar adversely impacts the Company’s production costs in the short-term. Most local currencies were stronger against the US dollar during 2010 compared to 2009. Consequently, total cash costs in US dollar terms were negatively impacted during the 2010 year, thereby eroding the benefits of the higher US dollar gold price.

To fund local operations, AngloGold Ashanti holds funds in local currencies. The US dollar value of these currencies may be affected by exchange rate fluctuations and, as a result, the Company’s cash and cash equivalents reported in US dollars could change. At December 31, 2010, approximately 64 percent of the Company’s cash and cash equivalents were held in these local currencies (South Africa, Australia, Brazil and Argentina).

Certain exchange controls are currently in force in most emerging markets in which the Company operates, including, for example, South Africa. AlthoughAfrica and Argentina. In the case of South Africa, though the exchange rate of the rand is primarily market determined, its value at any time may not be considered a true reflection of the underlying value while exchange controls exist. The government has indicated its intention to relax exchange controls over time. As exchange controls are relaxed, rand exchange rates will be more closely tied to market forces. It is not possible to predict whether or when this will occur or the future value of the rand. For a detailed discussion of these exchange controls, see “Item 10D.: Exchange controls”.

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EffectProduction costs and effects of inflation

Production costs include the cost of labor, mining contracts, fuel, lubricants, power, consumable stores (which include explosives, timber and other consumables), utilities and environmental rehabilitation costs. The mining industry continues to experience price inflation for many commodities and consumablescosts of inputs used in the production of gold, which leads to higher production costs reported by many gold producers.

AngloGold Ashanti’s operations have not been materially adversely affected by inflation in recent years, given that it has benefited from sustained periods of rising gold prices. However, the Company is unable to control the prices at which it sells its gold and it is possible, therefore, that if there is to begold. Accordingly, in the event of significant inflation in South Africa andor, to a lesser extent, in Brazil, Argentina andor Australia, without a concurrent devaluation of the local currency or an increase in the price of gold, there could be a material adverse effect upon the Company’s results and financial condition.

AngloGold Ashanti employs over 60,000 people globally, most of whom are members of trade unions, particularly in South Africa, Continental Africa and the Americas. Labor accounts for a significant component of production costs and are impacted by annual wage increases. During the period under review, trade unions have been successful in negotiating and securing higher than inflationary wage increases. During the years ended December 31, 2010, 2011 and 2012, management used Project ONE benefits arising from productivity improvements to offset some of the increases.

Energy costs, comprising power, fuel and lubricants, are another material component of production costs. Due to the remote location of some of its mines in Continental Africa, AngloGold Ashanti uses fuel to generate power and uses fuel and lubricants at its mines to run its fleet and processing plants. The percentageprice of oil has recently been volatile, fluctuating between $88.40 and $130.57 per barrel of Brent crude in 2012. AngloGold Ashanti estimates that for each $1 per barrel rise in the oil price, other factors remaining equal, the average cash costs under IFRS of all its operations increases by about $0.87 per ounce with the cash costs of certain of the company’s mines, particularly Geita, Cripple Creek & Victor, Siguiri and Sadiola, which are more dependent on fuel, being more sensitive to changes in the price of oil. However, the impact under US GAAP could be different. Energy costs, even in business segments which are supported by grid power, like South Africa, have increased considerably over the three year period, with price increases from Eskom (South Africa’s power utility) of approximately 26 percent per annum, far higher than average inflation. These increases have adversely impacted production costs.

AngloGold Ashanti has no influence over the cost of most consumables, many of which are linked to some degree to the price of oil and steel and in a number of cases have exceeded inflation. Furthermore, there has also been volatility recently in the price of steel, used in the manufacture of most forms of fixed and mobile mining equipment, which is a relatively large contributor to the operating costs and capital expenditure of a mine. All of these cost pressures have adversely impacted net income during the period.

Discounted closure liabilities (excluding joint ventures) increased from $653 million in 2011 to $758 million in 2012. This change is largely attributable to an overall average change in the rand/US dollar exchange rate, based upon averagemine plans resulting in accelerated cash flows, change in economic assumptions, discount rates and changes in design of tailings storage facilities.

Exploration costs

The Company has incurred increasing amounts of exploration expenditure during the respective years ended December 31, 2010, 2011 and 2012 in order to replenish depleting gold reserves and bring new ore bodies into pre-feasibility or feasibility. The exploration costs incurred over the local annual inflation rate,last three fiscal years amounted to $206 million in 2010, $279 million in 2011 and $388 million in 2012 and have adversely impacted net income.

General and administrative costs

In order to meet AngloGold Ashanti’s strategic objectives, management has incurred increasing levels of costs to build talent, capacity and expertise globally and in particular to support its Project ONE initiatives. The increase in general and administrative costs over the 2010 - 2012 period had an adverse impact on net income. The general and administrative costs incurred over such period amounted to $228 million in 2010, $287 million in 2011 and $299 million in 2012.

Royalties

Royalties, which are generally calculated as measured bya percentage of revenue, increased from the South African Producer Price Index (PPI),$142 million incurred in 2010 to $164 million incurred in 2012, primarily due to the higher spot gold prices resulting in increased royalties.

Royalties are set outlikely to continue to increase in the table below:

             
  2010  2009  2008 
Year ended December 31 percent  percent  percent 
 
The average South African rand/US$ exchange rate (strengthened)/weakened by:  (12.9)  1.7   17.4 
PPI (inflation rate) increase/(decrease):  5.8   (0.1)  14.2 
 
Net effect  18.7   (1.8)  (3.2)
 
coming years as in a number of jurisdictions host governments increasingly seek to obtain a higher share of revenue by increasing the royalty rates for gold mines.

Depreciation, depletion and amortization

Depreciation, depletion and amortization increased during the 2010—2012 period largely due to higher capital expenditure, reassessment of useful lives of assets and revisions in life of mine plans. Due to the higher capital investment expenditure required to complete new projects, depreciation, depletion and amortization is likely to continue to increase in the coming years.

Impairments

AngloGold Ashanti reviews and tests the carrying value of its assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. AngloGold Ashanti values individual mining assets at the lowest level for which cash flows are identifiable as independent of cash flows of other mining assets and liabilities.

If there are indications that impairment may have occurred, AngloGold Ashanti prepares estimates of expected future cash flows for each group of assets. Expected future cash flows are inherently uncertain, and could materially change over time. They are significantly affected by reserve and production estimates, together with economic factors, such as spot and forward gold prices, discount rates, currency exchange rates, estimates of costs to produce reserves and future capital expenditures.

If any of these uncertainties occur either alone or in combination, management could be required to recognize impairments. The impairment charges AngloGold Ashanti incurred on long-lived assets amounted to $91 million in 2010, $17 million in 2011 and $367 million in 2012. See “Note 5 – Costs and Expenses” to the consolidated financial statements for a detailed description of impairments.

When reviewing goodwill and other long-lived assets for impairment, AngloGold Ashanti’s assumption on gold price represents its best estimate of the future price of gold. In arriving at the estimated long-term gold price, AngloGold Ashanti considers all available market information including current prices, historical averages, and forward pricing information and data. The long term gold price of $1,584 per ounce in 2012 and $1,530 per ounce in 2011, were based on a range of economic and market conditions, which were expected to exist over the remaining useful life of the assets.

AngloGold Ashanti considers the long term fundamentals that provide support to the gold price assumption. These include, amongst other things, gold as a long term store of value, hedge against inflation, safe haven status, strong physical demand from emerging markets, central bank purchases, quantitative easing and devaluation of paper currency, falling global mine production and rising costs of producing gold, all of which represent significant and enduring trends supportive of AngloGold Ashanti’s gold price assumption.

The actual gold price averaged $1,668 per ounce in 2012 and $1,572 per ounce in 2011. The gold price in 2013 has been subject to volatile short term swings and has averaged $1,632 per ounce in the first quarter of 2013 and closed at $1,404 per ounce on April 19, 2013.

AngloGold Ashanti will continue to monitor the underlying long term factors driving the gold price and will review its gold price assumption, should it consider it appropriate to do so. Should the gold price assumption used in 2012 be revised significantly downward for any reason (by more than 10 percent), goodwill related to Mine Waste Solutions and long-lived assets related to Great Noligwa are most vulnerable to impairment.

Furthermore, should the gold price fall and remain at such lower levels, management will consider, in addition to other mitigating factors, reviewing and amending the life of mine plans to reduce expenditures, optimize costs and increase cash flows in respect of its mining assets.

Taxation

Taxation expense increased significantly over the period from an expense of $255 million in 2010 to an expense of $340 million in 2012. The sharp increase in the tax charge is a result of utilization of tax losses and higher spot prices resulting in higher pre-tax net income.

Taxation expense is likely to continue to increase in the coming years, as host governments in a number of jurisdictions increasingly seek to obtain a higher share of revenue by increasing rates of existing taxes and introducing new taxes on gold mines.

Acquisitions and dispositions

The global gold mining industry has experienced active consolidation and rationalization activities in recent years. Accordingly, AngloGold Ashanti has been, and expects to continue to be, involved in assessing a number of acquisitions and dispositions as part of this global trend and to identify value-adding business combination and acquisition opportunities.

Acquisitions and dispositions are described in note 3 to the consolidated financial statements, “Acquisitions and disposals of businesses and assets”. See also note 29 to the consolidated financial statements, “Subsequent events”. The consolidated financial statements reflect the operations and financial condition of AngloGold Ashanti, assuming that acquisitions and disposals took place on the effective date of these transactions.

South African economic and other factors

AngloGold Ashanti is a company domiciled in South Africa with a number ofsignificant operations in South Africa. As a result, the Company is subject to various economic, fiscal and monetary factors that affect South African companies generally.

Comparison of operating performance in 2010, 20092012, 2011 and 2008

2010

The following table presents operating data for the AngloGold Ashanti group for the three year period ended December 31, 2010:

             
Operating data for AngloGold Ashanti     Year ended December 31 
  2010  2009  2008 
 
Total attributable gold production (thousand ounces)  4,515   4,599   4,982 
Total cash costs ($/oz)  627   534   465 
Total production costs ($/oz)  812   683   592 
Production costs (million US dollars)  2,656   2,229   2,159 
Capital expenditure (million US dollars)(1)
  1,015   1,027   1,239 
   
— Consolidated entities  973   1,019   1,232 
— Equity accounted joint ventures  42   8   7 
   
           
2012:

 Operating data for AngloGold Ashanti    Year ended December 31   
      2012     2011     2010 

 Total attributable gold production (thousand ounces)

     3,944      4,331      4,515 

 Total cash costs ($/oz)(1)

     884      733      627 

 Total production costs ($/oz)(1)

     1,103      948      812 

 Production costs (million US dollars) - per financial statements

     3,183      2,977      2,656 

 Capital expenditure (million US dollars)

     2,154      1,527      1,015 

 - Consolidated entities

     1,851      1,439      973 

 - Equity accounted joint ventures

     303      88      42 
            
                      

(1)

Including capital expenditure of Boddington in 2009Total cash costs and 2008.total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results – Total cash costs and total production costs”.

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Attributable gold production

Production in 2012

For the year ended December 31, 2010,2012, AngloGold Ashanti’s total attributable gold production from continuing operations at 4.523.94 million ounces was 84,000390,000 ounces, or 29 percent, lower as compared to the 2011 production of 4.33 million ounces.

InSouth Africa, gold production decreased by 25 percent, or 411,000 ounces, in 2012 as compared to 2011. The lower output was mainly due to the unprotected strike action from September 20, 2012 to October 25, 2012 and the slow start-up thereafter and safety and associated stoppages during the year.

Production decreased by 3 percent, or 48,000 ounces, in 2012 inContinental Africa mainly due to a lower recovered grades at Obuasi, Iduapriem, Sadiola and Morila. The decrease was partially offset by higher production at Geita where gold production increased by 37,000 ounces.

Production increased by 5 percent, or 12,000 ounces, in 2012 inAustralia as operations at Sunrise Dam recovered from flood related disruption the previous year.

In theAmericas region, production increased by 7 percent, or 61,000 ounces, to 952,000 ounces. In Brazil the increase was mainly due the 100 percent ownership, effective July 1, 2012, of Serra Grande and the ramping up of production from the Córrego do Sítio sulfide project commissioned in July 2011. In Argentina at Cerro Vanguardia, the increase of production was mainly due to the higher yield in line with the production plan. The increase was partially offset by lower production at Cripple Creek & Victor in North America due to lower recovered grades.

Production in 2011

For the year ended December 31, 2011, AngloGold Ashanti’s total attributable gold production from continuing operations at 4.33 million ounces was 184,000 ounces, or 4 percent, lower when compared to 20092010 production of 4.64.52 million ounces.

InSouth Africa, gold production decreased by 19 percent or 12,000160,000 ounces in 2010 mainly due2011 of which 63,000 ounces relate to a 13 percent decline in volumes mined and a 9 percent decline in recovered grade at Kopanang and the sale of Tau Lekoa effective August 1, 2010.

Production decreased by 6 percent or 93,000 ounces in 2010 in Continental Africa The balance of the production decrease occurred across most of the South African mines. The lower output was mainly due to industrial strike actions and an increased number of government imposed safety related stoppages. At TauTona, a decision was taken early in 2011, following a significant seismic event, to cease mining of the Ventersdorp Contact Reef (VCR) shaft pillar and remove it from the immediate mine plan in the interests of safety. This decision contributed to the decline in output. Great Noligwa experienced lower grades minedproduction due to a combination of ore pass blockages and processed at Siguiri, Morila, Yatela and Sadiola. Lowerthe closure of two haulages.

Production increased by 5 percent or 79,000 ounces in 2011 inContinental Africa mainly due to a significant increase in production at Obuasi was mainly attributable to underground tonnages declining by 8 percent as a result of reduced flexibilityGeita in developed ore reserves, in addition to stoppages to address environmental issues at the Tailings Storage Facility and elution problems at the Tailings Treatment Plant.

The decrease in 2010 inTanzania, where gold produced referred to above was partially offset by an increaseincreased from 357,000 ounces in gold production at Moab Khotsong (South Africa) due to higher volumes mined, TauTona (South Africa) due to the successful resumption of mining in January 2010 following the temporary closure of the shaft in October 2009 and the treatment of higher tonnes and higher grade material in 2010 at Geita (Continental Africa).
For the year ended December 31, 2009, AngloGold Ashanti’s total attributable gold2010 to 494,000 ounces in 2011. The increase in production from continuing operationswas due to the mining of higher grade material in 2011. This increase was partially offset by lower production at Yatela, Siguiri and Navachab due to lower recovered grades.

Production decreased by 383,00038 percent or 150,000 ounces or 8 percent, to 4.6 million ounces from 5.0 million ounces produced in 2008.

In South Africa, gold production decreased by 14 percent from 2,099,000 ounces produced2011 in 2008 to 1,797,000 ounces produced in 2009Australia mainly due to a decline in the volumeimpact of ore mined at Great Noligwa as a result ofunprecedented heavy rainfall and the intersection of complex, unexpected geological structuresramp failure in the first quarter of 2009, an underground fire and safety stoppages, lower volume mined2011 at TauTonaSunrise Dam in Australia, which severely affected all aspects of the operation during the rest of the year.

In theAmericas region, production increased by 6 percent or 49,000 ounces to 891,000 ounces. The increase was mainly due to stoppagebetter ounce recovery from the heap leach pad at Cripple Creek & Victor in North America, which benefited from better pad pH chemistry and the strategy of production in final quarter of 2009 for shaft rehabilitationstacking higher grade ore closer to the pad liner. In Brazil, at AngloGold Ashanti Córrego do Sítio Mineração, higher tonnage and lower grades at Mponeng duecontributed to lower reef values and increased dilution. The decrease over 2008 was also causedproduction. These increases were partially offset by lower production at SavukaSerra Grande in Brazil due to a seismic incident in May 2009 that damaged the sub-shaft infrastructure.

Gold production in Australia, Mali and North America decreased from 433,000 ounces, 409,000 ounces and 258,000 ounces, respectively, produced in 2008 to 401,000 ounces, 360,000 ounces and 218,000 ounces, respectively, produced in 2009. This decrease was mainly due to the completion of mining the high grade ore in the base of the Mega Pit that boosted production in 2008 at Sunrise Dam (Australia), change in the mix of oxide and sulfide ore (higher percentage of high grade sulfide ore was processed in 2008) at Sadiola (Mali) and pad phase timing and reduced recovery from poor alkalinity at depth impacting the pH levels at Cripple Creek (North America).
The decrease in 2009 in gold produced at most mines was partially offset by an increase in gold production at Moab Khotsong (South Africa), the surface operations (which mainly treat material from the Great Noligwa waste rock dump in South Africa) and Cerro Vanguardia (Argentina) from 192,000 ounces, 92,000 ounces and 154,000 ounces, respectively, produced in 2008 to 247,000 ounces, 164,000 ounces and 192,000 ounces produced, respectively, in 2009. This was mainly due to continuation of production build up as well as the addition of SV4 section from the second half of 2008 at Moab Khotsong, the commissioning of the No.1 Waste Rock Dump in the current year, which resulted in grades exceeding that of 2008 at the surface operations and higherlower recovered grades arising from improvements in the plant efficiency at Cerro Vanguardia.
grades.

Total cash costs and total production costs

Comparison of total cash costs and total production costs in 20102012 with 20092011

Most local currencies (South Africa, Argentina and Brazil) were on average weaker against the US dollar during 2012 compared to 2011. Consequently, total cash costs in US dollar terms were positively impacted for 2012.

Cash costs per ounce at all of the operations situated in South Africa increased in 2012 when compared to 2011, largely a result of lower production due to the unprotected strike action during September and October 2012, partially offset by weakening of the rand.

Geita, in Tanzania, reported a 34 percent increase in cash costs from $488 per ounce in 2011 to $652 per ounce in 2012. This was mainly as a result of an increase in inventory adjustments, consumables and contract labor costs. This increase was partially offset by increased production.

In Mali, at Morila, cash costs decreased in 2012 to $765 per ounce compared to $818 per ounce in 2011 mainly due to a decrease in inventory on hand allocations partially offset by lower production. At Sadiola, cash costs increased from $835 per ounce in 2011 to $1,220 per ounce in 2012. This increase was primarily driven by lower production, increases in fuel prices, mining contractor costs and inventory adjustments. The cash costs at Yatela increased from $1,483 per ounce in 2011 to $1,793 per ounce in 2012 mainly due to an increase in inventory on hand allocations.

In Ghana, at Obuasi, cash costs increased in 2012 to $1,189 per ounce compared to $859 per ounce in 2011 mainly due to the decline in production and an increase in the power tariff, other service related costs and labor costs. At Siguiri, in Guinea, cash costs increased to $935 per ounce in 2012 from $871 per ounce in 2011 mainly due to the decline in production, higher fuel prices, an increase in inventory on hand allocations and increased costs related to labor.

In the United States, Cripple Creek reported a $71 per ounce increase in cash costs to $640 per ounce in 2012 due primarily to rising commodity prices (diesel fuel, in particular), increased labor costs and a decline in production. In Brazil at AngloGold Ashanti Córrego do Sítio Mineração, cash costs increased to $711 per ounce in 2012 from $571 per ounce in 2011 driven largely by higher labor and operational development costs partially offset by higher production. At Serra Grande cash costs decreased by $24 per ounce to $827 per ounce in 2012 due to an increase in production of 31,000 ounces partially offset by an increase in inventory on hand allocations and other service related costs.

In Australia, at Sunrise Dam, cash costs decreased in 2012 to $1,178 per ounce compared to $1,362 per ounce in 2011, mainly due to an 12,000 ounce increase in production as operations recovered from the flood related disruption the previous year and the effect of a $30 million recovery from settled insurance claims for the flood disruptions. The decrease was partially offset by the stronger Australian Dollar which negatively impacted cash costs per ounce.

Overall the Company’s total cash costs in 2012 increased by $151 per ounce, or 21 percent, when compared to the previous year. Of these increased costs, inflation accounted for $62 per ounce and lower production accounted for $101 per ounce. The weakening of local currencies accounted for $42 per ounce partially offsetting the increase.

Comparison of total cash costs and total production costs in 2011 with 2010

Most local currencies (South Africa, Australia and Brazil) were on average stronger against the US dollar during 20102011 compared to 2009.2010. Consequently, total cash costs in US dollar terms were negatively impacted for 2010.

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2011.


Cash costs per ounce at allmost of the operations situated in South Africa increased in 20102011 when compared to 2009.2010. This was largely a result of inflationary pressures onincreases in the cost of labor, power and stores and royalty payments which came into effect on March 1, 2010, andas well as the strengthening of the rand. The lower production in 2011 also negatively impacted the cash cost increase at the Savuka operation was offset by an insurance claim received for normal business interruption and material damage following the seismic event which occurred in May 2009. The insurance claim was for $46 million of which payments received and credited to working costs during 2010 were $16 million. The Company utilized the proceeds to reopen the mining area and equipping of infrastructure damaged during the seismic event.
per ounce.

Geita, in Tanzania, reported a 2930 percent decrease in cash costs from $985 per ounce in 2009 to $697 per ounce in 2010.2010 to $488 per ounce in 2011. This was mainly as a result of higher production lower reagent costs and a reduction in general and engineering stores.

inventory adjustments.

In Mali, at Morila, cash costs increased in 20102011 to $818 per ounce compared to $716 per ounce compared to $526 per ounce in 20092010 mainly due to the lower production and higher reagent costs and fuel used in power generation. At Sadiola cash costs increased from $489 per ounce in 2009 to $686 per ounce in 2010. The increase2010 to $835 per ounce in cash costs was mainly due to the lower-grade feed supplied to the priority plant. In addition,2011. These were driven by increases in fuel prices, mining contractor costs were higher as a result of the longer haulage distance and higher maintenance costs and increases in the fuel price.costs. The cash costs at Yatela increased from $326 per ounce in 2009 to $817 per ounce in 2010 to $1,483 per ounce in 2011 mainly due to the significant decrease in production of 29,00031,000 ounces (33(52 percent) and an increase in contract mining costs.

.

In Ghana, at Obuasi, cash costs increased in 20102011 to $859 per ounce compared to $760 per ounce compared to $630 per ounce in 20092010 mainly due to the decline in production and an increase in the power tariff and the once-off settlement of historical wage claims. These negative factors were partially offset by a reduction in the cost of consumables, which were sourced via a focused procurement strategy.inventory adjustments. At Siguiri, in Guinea, cash costs increased to $871 per ounce in 2011 from $656 per ounce in 2010 from $513 per ouncemainly due to the decline in 2009 mainly dueproduction, higher fuel prices, an increase in inventory adjustments and increased costs related to labor and mining contractors.

In North America,the United States, Cripple Creek reported a $129$69 per ounce increase in cash costs to $500$569 per ounce in 20102011 due primarily to the higher unit cost for the new ounces placed, rising commodity prices (diesel fuel in particular), and increased royalty costs, driven by higher gold prices.labor costs. In Brazil at AngloGold Ashanti Córrego do Sítio Mineração cash costs increased to $571 per ounce in 2011 from $444 per ounce in 2010 from $347 per ounce in 2009 driven largely by labor cost increases and higher maintenanceenergy consumption following the commissioning of the refrigeration plant in Cuiabá. Other factors were the stronger Brazilian real, lower volumes and higher unit costs and stronger local currencies.from new Córrego do Sítio sulfide production. These effects were partially offset, however, by higher revenue from the sale of sulfuric acid, a by-product of the Cuiabá mining operation.

At Serra Grande cash costs increased by $370 per ounce to $851 per ounce in 2011 due to reduced production as well as continued inflationary pressure on all mining-related inputs, such as power, consumables and labor in Brazil and the impact of the stronger Brazilian real.

In Australia, at Sunrise Dam, cash costs increased in 2011 to $1,362 per ounce compared to $692 per ounce in 2010 mainly due to the significant decrease in production of 150,000 ounces (38 percent). The decrease in production was due to the impact of unprecedented heavy rainfall and the ramp failure in the first quarter of 2011. The considerable remedial work and the stronger Australian Dollar negatively impacted cash costs per ounce.

Overall the Company’s total cash costs in 2011 increased by $93$106 per ounce, or 17 percent, when compared to the previous year. Of this increase, inflation accounted for $46$47 per ounce, lower production accounted for $20 per ounce, royalties accounted for $12 per ounce and local currency strength accounted for $45$9 per ounce.

Comparison of total cash costs and total production costs in 2009 with 2008
Although most local currencies (South Africa, Australia and Brazil) were on average weaker against the US dollar during 2009 compared to 2008, the trend in local currencies from early to the middle of the year started to strengthen as the US dollar was still impacted by effects of the financial debt crisis. Consequently, total cash costs in US dollar terms were negatively impacted for the greater part of the 2009 year.
Cash costs at most of the operations situated in South Africa increased in 2009 when compared to 2008. This was largely a result of the reduced volumes mined, declining recovered grades, increased power tariffs, wage increases and input cost inflation.
Cerro Vanguardia, the Argentinean mine, recorded a decrease in cash costs of 42 percent from $617 per ounce in 2008 to $359 per ounce in 2009, mainly as a result of an increase in volumes and grade, the decrease cost of mining supplies, as well as an increase in by-product sales and ore stockpile movements.
The Australian mine, Sunrise Dam, reported cash costs of $631 per ounce for 2009 compared to $559 per ounce for 2008, a 13 percent increase mainly due to ore stockpile movements (as mining volume decreased plant capacity is filled using ore previously stockpiled on surface) as well as a decrease in production.
The Brazilian mines, Brasil Mineração and Serra Grande, reported cash costs of $347 per ounce in 2009 compared to $322 per ounce in 2008 and $429 per ounce in 2009 compared to $299 per ounce in 2008, respectively. This increase in cash costs at both mines is mainly attributable to the appreciation of the Brazilian real against the US

140


dollar and lower offsetting revenue from the sale of sulfuric acid, which is a by-product of the Cuiabá operation (Brasil Mineração). The onset of the global economic crisis in late 2008 caused a sharp decline in sulfuric acid prices in 2009. In addition total cash costs at Serra Grande increased from 2008 due largely to inflation and lower production. The appreciation in the value of the local currency versus the US dollar affected 80 percent of total costs including that of power, labor, fuel, taxes and maintenance services in 2009.
In Mali, at Morila, cash costs increased in 2009 to $526 per ounce compared to $424 per ounce in 2008 mainly due to the lower level of gold production, a weakening in the US dollar against the euro, and significant increases in certain reagent costs and metallurgical stores. At Sadiola, production decreased by 22 percent to 135,000 ounces, consequently cash costs increased from $401 per ounce in 2008 to $489 per ounce in 2009. The increase in cash costs was partially offset by a decrease in cash costs at Yatela, where the cash costs decreased from $621 per ounce to $326 per ounce due to the significant rise in gold production and improved grades, lower fuel prices and a decrease in mining contractor costs resulting from the renegotiation of the contract and the appointment of a new contractor.
Navachab in Namibia reported an increase in cash costs of 21 percent to $677 per ounce as a result of an increase in the cost of labor, power and contractor fees. Cost pressures were compounded by the decline in gold production.
Geita, in Tanzania, reported a 21 percent increase in cash costs from $814 per ounce in 2008 to $985 per ounce in 2009. This was mainly due to a 66 percent increase in reagent costs, a function of higher prices and increased consumption, a 72 percent increase in mining contractor costs owing to the progression into hard-rock mining, and the outsourcing of the drill and blast functions. These increases were partly offset by a 36 percent decline in fuel costs. In North America, Cripple Creek reported a $61 per ounce increase to $371 per ounce in 2009 mainly due to reduced recovery resulting from poor alkalinity at depth impacting the pH levels.
Overall, total cash costs for 2009 increased by $69 per ounce, or 15 percent, the primary causes being $8 per ounce due to inflation, $22 per ounce to lower grades, $17 per ounce to lower volumes and a net $22 per ounce for other variances.
Reconciliation of total cash costs and total production costs to financial statements

Total cash costs and total production costs are calculated in accordance with the guidelines of the Gold Institute industry standard and industry practice and are not US GAAP measures. The Gold Institute, which has been incorporated into the National Mining Association, wasis a non-profit international association of miners, refiners, bullion suppliers and manufacturers of gold products, which developed a uniform format for reporting total production costs on a per ounce basis. The guidance was first adopted in 1996 and revised in November 1999.

Total cash costs, as defined in the Gold Institute industry guidelines, are production costs as recorded in the statement of operations, less offsite (i.e. central), general and administrative expenses (including head office costs charged to the mines, central training expenses, industry association fees, refinery charges and social development costs) and rehabilitation costs, plus royalties and employee termination costs.

Total cash costs as calculated and reported by AngloGold Ashanti include costs for all mining, processing, onsite administration costs, royalties and production taxes, as well as contributions from by-products, but exclusive of depreciation, depletion and amortization, rehabilitation costs, employment severance costs, corporate administration costs, capital costs and exploration costs. Total cash costs per ounce are calculated by dividing attributable total cash costs by attributable ounces of gold produced.

Total production costs, as defined in the Gold Institute industry guidelines, are total cash costs, as calculated using the Gold Institute industry guidelines, plus amortization, depreciation and rehabilitation costs.

141


Total production costs as calculated and reported by AngloGold Ashanti include total cash costs, plus depreciation, depletion and amortization, employee severance costs and rehabilitation and other non-cash costs. Total production costs per ounce are calculated by dividing attributable total production costs by attributable ounces of gold produced.

Total cash costs and total production costs should not be considered by investors in isolation or as alternatives to production costs, net income/(loss) applicable to common stockholders, income/(loss) before income tax provision, net cash provided by operating activities or any other measure of financial performance presented in accordance with US GAAP or as an indicator of the company’s performance. While the Gold Institute has provided definitions for the calculation of total cash costs and total production costs, the calculation of total cash costs, total cash costs per ounce, total production costs and total production costs per ounce may vary significantly among gold mining companies, and by themselves do not necessarily provide a basis for comparison with other gold mining companies.

However, AngloGold Ashanti believes that total cash costs and total production costs in total by mine and per ounce by mine are useful indicators to investors and management as they provide:

an indication of profitability, efficiency and cash flows;

an indication of profitability, efficiency and cash flows;
the trend in costs as the mining operations mature over time on a consistent basis; and
an internal benchmark of performance to allow for comparison against other mines, both within the AngloGold Ashanti group and of other gold mining companies.

the change in costs as the mining operations mature over time on a consistent basis; and

an internal benchmark of performance to allow for comparison against other mines, both within the AngloGold Ashanti group and of other gold mining companies.

A reconciliation of production costs as included in the company’s audited financial statements to total cash costs and to total production costs for each of the three years in the period ended December 31, 20102012 is presented below. In addition, the Company has also provided below detail of the attributable ounces of gold produced by mine for each of those periods.

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For the year ended December 31, 2010
2012

Operations in South Africa

(in $ millions, except as otherwise noted)

                                     
  Great Noligwa  Kopanang  Moab Khotsong  Tau Lekoa  Mponeng  Savuka  TauTona  Surface operations  Corporate(6) 
 
Production costs
  120   192   181   59   233   24   177   89   12
Plus:
                                    
Production costs of equity accounted joint ventures(1)
                          
Less:
                                    
Rehabilitation costs & other non-cash costs  (2)  (5)  (10)     (5)     (3)     (8)
Plus:
                                    
Inventory movement  (1)  (1)  (1)  (1)              
Royalties  2   4   4      18   1   9      
Related party transactions(2)
  (1)  (3)  (3)  (1)  (5)     (2)  (2)  
Adjusted for:
                                    
Noncontrolling interests(3)
                          
Non-gold producing companies and adjustments                          (9)
 
Total cash costs
  118   187   171   57   241   25   181   87   (5)
Plus:
                                    
Depreciation, depletion and amortization  27   73   108   1   58   5   71   6   15
Employee severance costs  5   3   2   1   5   1   3      
Rehabilitation and other non-cash costs  2   5   10      5      3      8
Adjusted for:
                                    
Noncontrolling interests(3)
                          (11)
Non-gold producing companies and adjustments                          (5)
 
Total production costs
  152   268   291   59   309   31   258   93   2
 
Gold produced (000’ ounces)(4)
  132   305   292   63   532   22   259   179   
Total cash costs per ounce(5)
  894   613   586   905   452   1,136   699   486   
Total production costs per ounce(5)
  1,152   879   997   937   580   1,409   996   520   

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Production costs

  102   165   157   253   38   172   (2  121   1,006   50 

Plus:

           

Production costs of equity accounted joint ventures(1)

  -    -    -    -    -    -    -    -    -    -  

Less:

           

Rehabilitation costs & other non-cash costs

  1   1   12   (2  -    (2  30   -    40   (18

Plus:

           

Inventory movement

  -    1   -    -    -    -    1   -    2   -  

Royalties

  1   2   2   13   1   6   -    -    25   -  

Related party transactions(2)

  (1  (2  (2  (5  (1  (2  -    (1  (14  -  

Adjusted for:

           

Noncontrolling interests(3)

  -    -    -    -    -    -    -    -    -    -  

Non-gold producing companies and adjustments

  -    -    -    -    -    -    -    -    -    (20

Total cash costs

  103   167   169   259   38   174   29   120   1,059   12 

Plus:

           

Depreciation, depletion and amortization

  22   42   91   69   11   64   7   4   310   15 

Employee severance costs

  1   2   1   1   -    1   -    -    6   -  

Rehabilitation and other non-cash costs

  (1  (1  (12  2   -    2   (30  -    (40  18 

Adjusted for:

           

Noncontrolling interests(3)

  -    -    -    -    -    -    -    -    -    4 

Non-gold producing companies and adjustments

  -    -    -    -    -    -    -    -    -    (5

Total production costs

  125   210   249   331   49   241   6   124   1,335   44 

 

Gold produced (000’ ounces) (4)

  84   164   162   405   37   189   28   144   1,213   -  

 

Total cash costs per ounce (5)

  1,226   1,018   1,043   640   1,027   921   1,036   833   873   -  
Total production costs per ounce (5)  1,488   1,280   1,537   817   1,324   1,275   214   861   1,101   -  
                                         

For the year ended December 31, 2010
2012

Operations in Ghana, Guinea, Mali, Namibia, Tanzania, Australia, United States of America, Argentina and Brazil

(in $ millions, except as otherwise noted)

                                                     
                                      UNITED       
  GHANA  GUINEA  MALI  NAMIBIA  TANZANIA  AUSTRALIA  STATES OF AMERICA  ARGENTINA  BRAZIL 
                                      Cripple      AngloGold Ashanti    
  Iduapriem  Obuasi  Siguiri  Morila  Sadiola  Yatela  Navachab  Geita  Sunrise Dam  Creek & Victor  Cerro Vanguardia  Mineracao  Serra Grande 
 
Production costs
  151   238   184            57   256   261   114   63   169   76 
Plus:                                                    
Production costs of equity accounted joint ventures(1)
           61   5   43                      
Less:                                                    
Rehabilitation costs & other non-cash costs  (20)  (16)  (1)     (3)  (2)  3   (8)  1   (13)  (7)  (18)   
Plus:                                                    
Inventory movement  6   7   (1)     1   1   (1)  (12)     58      (1)  (2)
Royalties  7   12   29   7   9   4   3   13   12   5   21      1 
Related party transactions(2)
              (1)  3                      
Adjusted for:                                                    
Noncontrolling interests(3)
        (32)                       (6)     (38)
 
Total cash costs
  144   241   179   68   81   49   62   249   274   164   71   150   37 
Plus:                                                    
Depreciation, depletion and amortization  25   61   23   4   3   2   8   55   33   33   24   61   32 
Employee severance costs
  1         1                     1   2    
Rehabilitation and other non-cash costs  20   16   1      3   2   (3)  8   (1)  13   7   18    
Adjusted for:                                                    
Noncontrolling interests(3)
        (3)                       (2)     (16)
 
Total production costs
  190   318   200   73   87   53   67   312   306   210   101   231   53 
 
Gold produced (000’ ounces)(4)
  185   317   273   95   118   60   86   357   396   233   194   338   77 
Total cash costs per ounce(5)
  778   760   656   716   686   817   721   697   692   (7) 500   366   444   481 
Total production costs per ounce(5)
  1,027   1,003   733   768   737   883   779   874   773   901   521   683   688 

144


                                                             
   

 

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Production costs  167   348   245   -   -   -   73   325   1,158   292   145   127   295   110   677 

Plus:

                           

Production costs of equity accounted joint ventures (1)

  -    -    -    52   111   47   -    -    210   -    -    -    -    -    -  

Less:

                           

Rehabilitation costs & other non-cash costs

  (7  (29  (12  2   2   (1  (2  (8  (55  -    (9  (4  (20  1   (32

Plus:

                           

Inventory movement

  (3  -    16   -    (1  1   -    (4  9   1   78   (4  1   (4  71 

Royalties

  9   14   23   8   10   3   4   33   104   11   11   33   -    1   45 

Related party transactions(2)

  -    -    -    -    -    2   -    -    2   -    -    -    -    -    -  

Adjusted for:

                           

Noncontrolling interests (3)

  -    -    (41  -    -    -    -    -    (41  -    -    (11  -    (27  (38

Total cash costs

  166   333   231   62   122   52   75   346   1,387   304   225   141   276   81   723 

Plus:

                

Depreciation, depletion and amortization

  30   79   27   4   3   2   14   68   227   34   46   35   113   24   218 

 

Employee severance costs

  -    -    -    -    -    -    -    -    -    -    -    1   3   -    4 

 

Rehabilitation and other non-cash costs

  7   29   12   (2  (2  1   2   8   55   -    9   4   20   (1  32 

Adjusted for:

                

Noncontrolling interests(3)

  -    -    (5  -    -    -    -    -    (5  -    -    (1  -    (8  (9

Total production costs

  203   441   265   64   123   55   91   422   1,664   338   280   180   412   96   968 

 

Gold produced (000’ ounces)(4)

  180   280   247   81   100   29   74   531   1,522   258   247   219   388   98   952 

 

Total cash costs per ounce(5)

  922   1,189   935   765   1,220   1,793   1,014   652   911   1,178   (7) 640   644   711   827   759 

 

Total production costs per ounce(5)

  1,128   1,575   1,073   790   1,230   1,897   1,230   795   1,093   1,310   1,134   822   1,062   980   1,017 
                                                             

For the year ended December 31, 2010
2012

AngloGold Ashanti operations - Total

(in $ millions, except as otherwise noted)

    Total 

Production costs per financial statements

   2,6563,183 

Plus:

  

Production costs of equity accounted joint ventures(1)

   179210 

Less:

  

Rehabilitation costs & other non-cash costs

   (11765)

Plus/(less):

Inventory movement

   83 
Inventory movement

Royalties

   52185 
Royalties161

Related party transactions(2)

   (1512)

Adjusted for:

  

Noncontrolling interests(3)

   (7679)

Non-gold producing companies and adjustments

   (920)

Total cash costs

   2,8313,485 

Plus:

Depreciation, depletion and amortization

   804 
Depreciation, depletion and amortization

Employee severance costs

   72810 
Employee severance costs25

Rehabilitation and other non-cash costs

   11765 

Adjusted for:

  

Noncontrolling interests(3)

   (3210)

Non-gold producing companies and adjustments

   (5)

Total production costs

   3,6644,349 

Gold produced (000’ ounces)(4)

   4,5153,944 

Total cash costs per ounce(5)

   627884 

Total production costs per ounce(5)

   8121,103 
(1)

Attributable production costs and related expenses of equity accounted joint ventures are included in the calculation of total cash costs per ounce and total production costs per ounce.

(2)

Relates solely to production costs as included in the Company’s consolidated financial statements and has, accordingly, been included in total production costs and total cash costs.

(3)

Adjusting for noncontrolling interest of items included in calculation, to disclose the attributable portions only.

(4)

Attributable production only.

(5)

In addition to the operational performances of the mines, total cash costs per ounce and total production costs per ounce are affected by fluctuations in the currency exchange rate. AngloGold Ashanti reports total cash costs per ounce and total production costs per ounce calculated to the nearest US dollar amount and gold produced in ounces.

(6)

Corporate includes non-gold producing subsidiaries.

(7)

Total cash costs per ounce calculation includes heap-leach inventory change.

145


For the year ended December 31, 2009
2011

OerationsOperations in South Africa

(in $ millions, except as otherwise noted)

                                     
  Great Noligwa  Kopanang  Moab Khotsong  Tau Lekoa  Mponeng  Savuka  TauTona  Surface operations Corporate(6)  
 
Production costs
  127   141   107   88   178   34   119   64   (26)
Plus:
                                    
Production costs of equity accounted joint ventures(1)
                           
Less:
                                    
Rehabilitation costs & other non-cash costs     (1)     2               (15)
Plus:
                                    
Inventory movement              (1)     (1)      
Royalties                           
Related party transactions(2)
  (2)  (3)  (3)  (1)  (5)     (2)  (2)   
Adjusted for:
                                    
Noncontrolling interests(3)
                           
Non-gold producing companies and adjustments                          41 
 
Total cash costs
  125   137   104   89   172   34   116   62    
Plus:
                                    
Depreciation, depletion and amortization  29   61   80   7   37   8   49   2   13 
Employee severance costs  3   2   1   1   1      2       
Rehabilitation and other non-cash costs     1      (2)              15 
Adjusted for:
                                    
Noncontrolling interests(3)
                          8 
Non-gold producing companies and adjustments                          (3)
 
Total production costs
  157   201   185   95   210   42   167   64   33 
 
Gold produced (000’ ounces)(4)
  158   336   247   124   520   30   218   164    
Total cash costs per ounce(5)
  791   408   421   718   331   1,133   532   378    
Total production costs per ounce(5)
  994   598   749   766   404   1,400   766   390    

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Production costs

   109   201   174   -    248   40   188   110   1,070   24 

Plus:

                      

Production costs of equity accounted joint ventures (1)

   -    -    -    -     -    -    -    -    -    -  

Less:

                      

Rehabilitation costs & other non-cash costs

   -    (2  -    -     -    (1  (1  -    (4  1 

Plus:

                      

Inventory movement

   -    -    -    -     -    -    -    -    -    -  

Royalties

   4   13   11   -     29   3   14   -    74   -  

Related party transactions (2)

   (1  (2  (2  -     (3  -    (2  (1  (11  -  

Adjusted for:

                      

Noncontrolling interests (3)

   -    -    -    -     -    -    -    -    -    -  

Non-gold producing companies and adjustments

   -    -    -    -     -    -    -    -    -    (29

Total cash costs

   112   210   183   -     274   42   199   109   1,129   (4

Plus:

                      

Depreciation, depletion and amortization

   23   78   101   -     70   1   75   4   352   16 

Employee severance costs

   1   2   1   -     2   1   2   -    9   1 

Rehabilitation and other non-cash costs

   -    2   -    -     -    1   1   -    4   (1

Adjusted for:

                      

Noncontrolling interests (3)

   -    -    -    -     -    -    -    -    -    (24

Non-gold producing companies and adjustments

   -    -    -    -     -    -    -    -    -    (7
Total production costs   136   292   285   -     346   45   277   113   1,494   (19

 

Gold produced (000’ ounces) (4)

   94   307   266   -     500   49   244   164   1,624   -  

 

Total cash costs per ounce (5)

   1,191   684   688   -     547   857   816   665   695   -  
Total production costs per ounce (5)   1,447   951   1,071   -     691   918   1,135   689   920   -  

For the year ended December 31, 2009
2011

Operations in Ghana, Guinea, Mali, Namibia,Tanzania, Australia, United States of America, Argentina and Brazil

(in $ millions, except as otherwise noted)

                                                         
                                          UNITED       
  GHANA  GUINEA  MALI  NAMIBIA  TANZANIA  AUSTRALIA  STATES OF AMERICA  ARGENTINA  BRAZIL 
                                          Cripple      AngloGold Ashanti    
  Iduapriem  Obuasi  Siguiri  Morila  Sadiola  Yatela  Navachab  Geita  Boddington(8)  Sunrise Dam  Creek & Victor  Cerro Vanguardia  Brasil Mineracao  Serra Grande 
 
Production costs
  122   240   160            42   261      250   83   62   112   65 
Plus:                                                        
Production costs of equity accounted joint ventures(1)
           67   61   26                         
Less:                                                        
Rehabilitation costs & other non-cash costs  (2)  (5)  (7)  (2)  (1)  (3)  (1)  (3)     (6)  5   (2)  (4)  (1)
Plus:                                                        
Inventory movement     (6)  7   (1)  (2)  (1)  1   2      (1)  54   (1)  6    
Royalties  5   11   30   8   8   5   2   8      10   2   16       
Related party transactions(2)
                 2                         
Adjusted for:                                                        
Noncontrolling interests(3)
        (28)                          (6)     (31)
 
Total cash costs
  125   240   162   72   66   29   44   268      253   144   69   114   33 
Plus:                                                        
Depreciation, depletion and amortization  24   76   26   5   12   5   2   53      37   23   24   44   20 
Employee severance costs     2                              2       
Rehabilitation and other non-cash costs  2   5   7   2   1   3   1   3      6   (5)  2   4   1 
Adjusted for:                                                        
Noncontrolling interests(3)
        (5)                          (2)     (10)
 
Total production costs
  151   323   190   79   79   37   47   324      296   162   95   162   44 
 
Gold produced (000’ ounces)(4)
  190   381   316   137   135   89   65   272      401   218   192   329   77 
Total cash costs per ounce(5)
  658   630   513   526   489   326   677   985      631   (7) 371   359   347   429 
Total production costs per ounce(5)
  795   848   601   577   585   416   723   1,191      738   743   495   492   571 

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Production costs

   176   324   252   -    -   -   59   220   1,031   325    135   53   220   119   527 

Plus:

                                 

Production costs of equity accounted joint ventures (1)

   -    -   -    72    92   41   -    -    205   -     -    -    -    -    -  

Less:

                                 

Rehabilitation costs & other non-cash costs

   (18  (69  (11  -     (2  (1  (1  (10  (112  -     (17  (8  (24  (18  (67

Plus:

                                 

Inventory movement

   -    (1  (8  -     -    (1  1   8   (1  1    67   13   9   6   95 

Royalties

   9   15   23   9    11   3   3   23   96   9    8   27   -    2   37 

Related party transactions(2)

   -    -    -    -     -    1   -    -    1   -     -    -    -    -    -  

Adjusted for:

                                 

Noncontrolling interests (3)

   -    -    (39  -     -    -    -    -    (39  -     -    (6  -    (52  (58

Total cash costs

   167   269   217   81    101   43   62   241   1,181   335    193   79   205   57   534 

Plus:

                                 

Depreciation, depletion and amortization

   29   65   24   4    2   1   10   82   217   41    38   26   76   32   172 

Employee severance costs

   1   -    -    -     -    -    1   -    2   -     -    1   2   -    3 

Rehabilitation and other non-cash costs

   18   69   11   -     2   1   1   10   112   -     17   8   24   18   67 

Adjusted for:

                                 

Noncontrolling interests(3)

   -    -    (5  -     -    -    -    -    (5  -     -    (3  -    (25  (28

Total production costs

   215   403   247   85    105   45   74   333   1,507   376    248   111   307   82   748 

 

Gold produced (000’ ounces)(4)

   199   313   249   99    121   29   66   494   1,570   246    267   196   359   67   889 

 

Total cash costs per ounce(5)

   839   859   871   818    835   1,483   939   488   752   1,362    (7)  569    403   571   851   601 
Total production costs per ounce(5)   1,080   1,288   992   859    868   1,552   1,121   674   960   1,528    929   566   855   1,224   841 

For the year ended December 31, 2009
2011

AngloGold Ashanti operations - Total

(in $ millions, except as otherwise noted)

    Total 

Production costs per financial statements

   2,2292,977 

Plus:

  

Production costs of equity accounted joint ventures(1)

   154205 

Plus:

  

Rehabilitation costs & other non-cash costs

   (46182)

(Less)/plus:

Inventory movement

   95 
Inventory movement

Royalties

   56216 
Royalties105

Related party transactions(2)

   (1610)

Adjusted for:

  

Noncontrolling interests(3)

   (6597)

Non-gold producing companies and adjustments

   41(29) 

Total cash costs

   2,4583,175 

Plus/(less):

Depreciation, depletion and amortization

   798 
Depreciation, depletion and amortization

Employee severance costs

   63715 
Employee severance costs14

Rehabilitation and other non-cash costs

   46182 

Adjusted for:

  

Noncontrolling interests(3)

   (957)

Non-gold producing companies and adjustments

   (37)

Total production costs

   3,1434,106 

Gold produced (000’ ounces)(4)

   4,5994,329 

Total cash costs per ounce(5)

   534733 

Total production costs per ounce(5)

   683948 
(1)

Attributable production costs and related expenses of equity accounted joint ventures are included in the calculation of total cash costs per ounce and total production costs per ounce.

(2)

Relates solely to production costs as included in the Company’s consolidated financial statements and has, accordingly, been included in total production costs and total cash costs.

(3)

Adjusting for noncontrolling interest of items included in calculation, to disclose the attributable portions only.

(4)

Attributable production only.

(5)

In addition to the operational performances of the mines, total cash costs per ounce and total production costs per ounce are affected by fluctuations in the currency exchange rate. AngloGold Ashanti reports total cash costs per ounce and total production costs per ounce calculated to the nearest US dollar amount and gold produced in ounces.

(6)

Corporate includes non-gold producing subsidiaries.

(7)

Total cash costs per ounce calculation includes heap-leach inventory change.

(8)

There was no production attributable to AngloGold Ashanti in 2009.2011. AngloGold Ashanti sold the 33.33 percent joint venture interest it heldTau Lekoa to Simmer & Jack Mines Limited (“Simmers”) in Boddington Gold Mine to Newmont Mining during 2009.2010.

148


For the year ended December 31, 2008
2010

Operations in South Africa

(in $ millions, except as otherwise noted)

                                     
  Great Noligwa  Kopanang  Moab Khotsong  Tau Lekoa  Mponeng  Savuka  TauTona  Surface operations  Corporate(6) 
 
Production costs
  152   128   74   78   155   29   125   41   13 
Plus:
                                    
Production costs of equity accounted joint ventures(1)
                          9 
Less:
                                    
Rehabilitation costs & other non-cash costs        (1)  (2)  (2)  (1)  (7)     26 
Plus:
                                    
Inventory movement              (1)            
Royalties                           
Related party transactions(2)
  (1)  (2)  (1)  (1)  (3)     (1)      
Adjusted for:
                                    
Noncontrolling interests(3)
                           
Non-gold producing companies and adjustments                          (32)
 
Total cash costs
  151   126   72   75   149   28   117   41   16 
Plus:
                                    
Depreciation, depletion and amortization  32   53   50   25   44   5   37   3   12 
Employee severance costs  3   2      1   1      2       
Rehabilitation and other non-cash costs        1   2   2   1   7      (26)
Adjusted for:
                                    
Noncontrolling interests(3)
                          (8)
Non-gold producing companies and adjustments                          (3)
 
Total production costs
  186   181   123   103   196   34   163   44   (9)
 
Gold produced (000’ ounces)(4)
  330   362   192   143   600   66   314   92    
Total cash costs per ounce(5)
  458   348   375   524   248   424   373   446    
Total production costs per ounce(5)
  564   500   641   720   327   515   519   478    

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Production costs

  120   192   181   59   233   24   177   89   1,075   12 

Plus:

                    

Production costs of equity accounted joint ventures(1)

  -    -    -    -    -    -    -    -    -    -  

Less:

                    

Rehabilitation costs & other non-cash costs

  (2  (5  (10  -    (5  -    (3  -    (25  (8

Plus:

                    

Inventory movement

  (1  (1  (1  (1  -    -    -    -    (4  -  

Royalties

  2   4   4   -    18   1   9   -    38   -  

Related party transactions(2)

  (1  (3  (3  (1  (5  -    (2  (2  (17  -  

Adjusted for:

                    

Noncontrolling interests(3)

  -    -    -    -    -    -    -    -    -    -  

Non-gold producing companies and adjustments

  -    -    -    -    -    -    -    -    -    (9

Total cash costs

  118   187   171   57   241   25   181   87   1,067   (5

Plus:

                    

Depreciation, depletion and amortization

  27   73   108   1   58   5   71   6   349   15 

Employee severance costs

  5   3   2   1   5   1   3   -    20   -  

Rehabilitation and other non-cash costs

  2   5   10   -    5   -    3   -    25   8 

Adjusted for:

                    

Noncontrolling interests(3)

  -    -    -    -    -    -    -    -    -    (11

Non-gold producing companies and adjustments

  -    -    -    -    -    -    -    -    -    (5
Total production costs  152   268   291   59   309   31   258   93   1,461   2 

 

Gold produced (000’ ounces) (4)

  132   305   292   63   532   22   259   179   1,784   -  

 

Total cash costs per ounce (5)

  894   613   586   905   452   1,136   699   486   598   -  
Total production costs per ounce (5)  1,152   879   997   937   580   1,409   996   520   819   -  

For the year ended December 31, 2008
2010

Operations in Ghana, Guinea, Mali, Namibia, Tanzania, Australia, United States of America, Argentina and Brazil

(in $ millions, except as otherwise noted)

                                                         
                                          UNITED       
  GHANA  GUINEA  MALI  NAMIBIA  TANZANIA  AUSTRALIA  STATES OF AMERICA  ARGENTINA  BRAZIL 
                                          Cripple      AngloGold Ashanti    
  Iduapriem  Obuasi  Siguiri  Morila  Sadiola  Yatela  Navachab  Geita  Boddington(8)  Sunrise Dam  Creek & Victor  Cerro Vanguardia  Brasil Mineracao  Serra Grande 
 
Production costs
  118   227   157            37   268   (1)  231   70   99   106   52 
Plus:                                                        
Production costs of equity accounted joint ventures(1)
           65   60   34                         
Less:                                                        
Rehabilitation costs & other non-cash costs  1      (1)        1   (1)  5   1      (3)  (5)  1    
Plus:                                                        
Inventory movement  1   (9)  (3)  (2)     1      (65)     1   63   (4)  (4)   
Royalties  5   9   31   9   9   3   2   7      10   2   12       
Related party transactions(2)
                 2                         
Adjusted for:                                                        
Noncontrolling interests(3)
        (28)                          (7)     (26)
 
Total cash costs
  125   227   156   72   69   41   38   215      242   132   95   103   26 
 
Plus:                                                        
Depreciation, depletion and amortization  24   81   36   13   32   2   4   55      46   31   17   42   17 
Employee severance costs                                          
Rehabilitation and other non-cash costs  (1)     1         (1)  1   (5)  (1)     3   5   (1)   
Adjusted for:                                                        
Noncontrolling interests(3)
        (5)                          (2)     (8)
 
Total production costs
  148   308   188   85   101   42   43   265   (1)  288   166   115   144   35 
 
Gold produced (000’ ounces)(4)
  200   357   333   170   172   66   68   264      433   258   154   320   87 
Total cash costs per ounce(5)
  625   636   468   424   401   621   559   814      559   (7) 310   617   322   299 
Total production costs per ounce(5)
  740   863   565   500   587   636   632   1,004      665   643   747   450   402 
 

150


   

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Production costs

  151   238   184   -   -   -   57   256   886   261   114   63   169   76   422 

Plus:

                              

Production costs of equity accounted joint ventures(1)

  -   -   -   61   75   43   -   -   179   -   -   -   -   -   -  

Less:

                              

Rehabilitation costs & other non-cash costs

  (20  (16  (1  -   (3  (2  3   (8  (47  1   (13  (7  (18  -   (38

Plus:

                              

Inventory movement

  6   7   (1  -   1   1   (1  (12  1   -   58   -   (1  (2  55 

Royalties

  7   12   29   7   9   4   3   13   84   12   5   21   -   1   27 

Related party transactions(2)

  -   -   -   -   (1  3   -   -   2   -   -   -   -   -   -  

Adjusted for:

                              

Noncontrolling interests(3)

  -   -   (32  -   -   -   -   -   (32  -   -   (6  -   (38  (44

Total cash costs

  144   241   179   68   81   49   62   249   1,073   274   164   71   150   37   422 

Plus:

                              

Depreciation, depletion and amortization

  25   61   23   4   3   2   8   55   181   33   33   24   61   32   150 

Employee severance costs

  1   -   -   1   -   -   -   -   2   -   -   1   2   -   3 

Rehabilitation and other non-cash costs

  20   16   1   -   3   2   (3  8   47   (1  13   7   18   -   38 
Adjusted for:                              

Noncontrolling interests(3)

  -   -   (3  -   -   -   -   -   (3  -   -   (2  -   (16  (18
Total production costs  190   318   200   73   87   53   67   312   1,300   306   210   101   231   53   595 

 

Gold produced (000’ ounces)(4)

  185   317   273   95   118   60   86   357   1,491   396   233   194   338   77   842 

 

Total cash costs per ounce(5)

  778   760   656   716   686   817   721   697   720   692   (7) 500   366   444   481   501 
Total production costs per ounce (5)  1,027   1,003   733   768   737   883   779   874   872   773   901   521   683   688   707 

For the year ended December 31, 2008
2010

AngloGold Ashanti operations - Total

(in $ millions, except as otherwise noted)

    Total 

Production costs per financial statements

   2,1592,656 

Plus:

  

Production costs of equity accounted joint ventures(1)

   168179 

Less:

  

Rehabilitation costs & other non-cash costs

12
Plus/(less):
Inventory movement

   (22117)
Royalties

Plus/(less):

Inventory movement

   9952 

Royalties

161

Related party transactions(2)

   (715)

Adjusted for:

  

Noncontrolling interests(3)

   (6176)

Non-gold producing companies and adjustments

(9

Total cash costs

2,831

Plus:

Depreciation, depletion and amortization

728

Employee severance costs

25

Rehabilitation and other non-cash costs

117

Adjusted for:

Noncontrolling interests(3)

   (32)
Total cash costs
2,316
Plus:
Depreciation, depletion

Non-gold producing companies and amortization

661
Employee severance costs9
Rehabilitation and other non-cash costsadjustments

   (125)
Adjusted for:

Total production costs

   3,664 
Noncontrolling interests

Gold produced (000’ ounces)(3)

(4)

   (23)
Non-gold producing companies and adjustments(3)
Total production costs
2,9484,515 
Gold produced (000’ ounces)(4)
4,982

Total cash costs per ounce(5)

   465627 

Total production costs per ounce(5)

   592812 
(1) 

(1)

Attributable production costs and related expenses of equity accounted joint ventures are included in the calculation of total cash costs per ounce and total production costs per ounce.

(2)

Relates solely to production costs as included in the Company’s consolidated financial statements and has, accordingly, been included in total production costs and total cash costs.

(3)

Adjusting for noncontrolling interest of items included in calculation, to disclose the attributable portions only.

(4)

Attributable production only.

(5)

In addition to the operational performances of the mines, total cash costs per ounce and total production costs per ounce are affected by fluctuations in the currency exchange rate. AngloGold Ashanti reports total cash costs per ounce and total production costs per ounce calculated to the nearest US dollar amount and gold produced in ounces.

(6)

Corporate includes non-gold producing subsidiaries.

(7)

Total cash costs per ounce calculation includes heap-leach inventory change.

(8)There was no production attributable to AngloGold Ashanti in 2008.

151


Capital expenditure

Total capital expenditure of $1,015$2,154 million was recorded in 2012 compared to $1,527 million in 2011. This represents a $627 million, or 41 percent, increase from 2011. The increased capital expenditure during 2012 relates to increased capital spent on existing operations of $75 million and increased spending of $552 million for growth related projects. Capital expenditure increased at Tropicana by $242 million, the Kibali joint venture by $190 million, infrastructure spend at the Mongbwalu project by $76 million, Obuasi by $53 million, Cripple Creek & Victor by $33 million, Geita by $23 million, Sadiola by $23 million, Mponeng by $22 million and Iduapriem by $22 million.

Total capital expenditure of $1,527 million was recorded in the year ended December 31, 20102011 compared to $1,027$1,015 million in the same period in 2009.2010. This represents a $12$512 million, or 150 percent, decreaseincrease from 2009. In Australia, total2010. The increased capital expenditure decreased from $177during 2011 relates to increased spending to sustain existing operations of $265 million in 2009 to $40 million in 2010 as a resultand growth related projects of the sale of Boddington during 2009.$247 million. Capital expenditure increased at Obuasi by $27 million, AngloGold Ashanti Córrego do Sítio Mineração by $24$117 million, GeitaTropicana by $22$63 million, Iduapriem by $56 million, Mponeng by $17$50 million, Kibali joint venture by $43 million, Cerro Vanguardia by $35 million, Navachab by $34 million, Kopanang by $31 million, Moab Khotsong by $13$27 million, Obuasi by $23 million and Cerro VanguardiaGeita by $7$20 million.

Total capital expenditure of $1,027 million was recorded in the year ended December 31, 2009 compared to $1,239 million in the same period in 2008. This represents a $212 million, or 17 percent, decrease from 2008. In Australia, total capital expenditure decreased from $439 million in 2008 to $177 million in 2009. This is as a result of the sale of Boddington during 2009.

Comparison of financial performance on a segment basis for 2010, 20092012, 2011 and 2008

2010

The Company produces gold as its primary product and does not have distinct divisional segments in terms of principal business activity, but manages its business on the basis of different geographic segments. Therefore, information regarding separate geographic segments is provided. Revenues presented below exclude allocated realized gains/losses on non-hedge derivatives to individual geographic areas.

Revenues
                         
  Year ended December 31 
  2010  2009  2008 
(in millions) $  percent  $  percent  $  percent 
 
Category of activity                        
Total revenues                        
Product sales  5,334       3,784       3,655     
Interest, dividends and other  68       170       75     
 
Total revenues  5,402       3,954       3,730     
 
Geographical area data                        
Total revenues                        
South Africa  2,276   42   1,687   43   1,521   41 
Continental Africa  1,871   34   1,451   36   1,406   37 
Australasia  468   9   239   6   282   8 
Americas  1,125   21   804   20   702   19 
Other, including Corporate and Non-gold producing subsidiaries  (6)     129   3       
 
   5,734       4,310       3,911     
Less : Equity method investments included above  (332)  (6)  (355)  (8)  (181)  (5)
 
Total revenues  5,402   100   3,955   100   3,730   100 
 
In 2010, 42 percent of AngloGold Ashanti’s total consolidated revenues were derived from its operations in South Africa, compared to 43 percent in 2009. South Africa produced 40 percent of the global production in 2010.
In 2009, 43 percent of AngloGold Ashanti’s total consolidated revenues were derived from its operations in South Africa, compared to 41 percent in 2008. South Africa produced 39 percent of the global production in 2009.

152


Revenues

 (in millions)  Year ended December 31 
   2012          2011      2010     
    $  percent  $  percent  $  percent 

 Category of activity

       

 Total revenues

       

 Product sales

   6,353    6,570    5,334  

 Interest, dividends and other

   75    72    68  

 Total revenues

   6,428       6,642       5,402     

 Geographical area data

       

 Total revenues

       

 South Africa

   2,056   32   2,596   39   2,276   42 

 Continental Africa

   2,617   41   2,529   38   1,871   34 

 Australasia

   430   7   389   6   468   9 

 Americas

   1,658   25   1,499   23   1,125   21 

 Other, including Corporate and Non-gold producing

 subsidiaries

   20   -   17   -   (6  - 
   6,781    7,030    5,734  

 Less : Equity method investments included above

   (353  (5  (388  (6  (332  (6

 Total revenues

   6,428   100   6,642   100   5,402   100 

Assets

                         
  As at December 31 
  2010  2009  2008 
  $  percent  $  percent  $  percent 
 
Geographical area data                        
Total segment assets                        
South Africa  3,370   32   3,354   31   2,497   26 
Continental Africa  4,093   39   4,055   38   3,582   38 
Australasia  534   5   496   5   1,279   14 
Americas  2,170   21   2,012   19   1,717   18 
Other, including Corporate, Assets held for sale and Non-gold producing subsidiaries  221   2   745   7   376   4 
 
Total segment assets
  10,388   100   10,662   100   9,451   100 
 

 (in millions)  As at December 31 
   2012           2011           2010         
    $   percent   $   percent   $   percent 

 Geographical area data

            

 Total segment assets

            

 South Africa

   3,570    27    2,974    27    3,370    32 

 Continental Africa

   4,752    36    4,365    39    4,093    39 

 Australasia

   1,007    8    714    6    534    5 

 Americas

   2,894    22    2,527    23    2,170    21 

 Other, including Corporate, Assets held for sale and

 Non-gold producing subsidiaries

   879    7    605    5    221    2 

 Total segment assets

   13,102    100    11,185    100    10,388    100 

At December 31, 2010, 32 percent of AngloGold Ashanti’s total assets were located in Southern Africa compared with 31 percent at the end of 2009, mainly due to increased capital expenditure and the strengthening of the rand against the US dollar (2010: $/R6.5701, 2009: $/R7.435). The remaining operations collectively accounted for approximately 68 percent of AngloGold Ashanti’s total assets at December 31, 2010 compared to 69 percent at the end of the same period in 2009.

At December 31, 2009, 312012, 27 percent of AngloGold Ashanti’s total assets were located in South Africa compared with 2627 percent at the end of 2008, mainly due to increased capital expenditure, the strengthening of the rand against the US dollar (2009: $/R7.435, 2008: $/R9.455) and the increase of South Africa’s deferred tax asset. In addition, the sale of Boddington (Australia) increased the share of South Africa’s assets in relation to total assets.2011. The remaining operations collectively accounted for approximately 6973 percent of AngloGold Ashanti’s total assets at December 31, 20092012 compared to 7473 percent at the end of the same period in 2008.
2011.

At December 31, 2011, 27 percent of AngloGold Ashanti’s total assets were located in South Africa compared with 32 percent at the end of 2010, mainly due to the weakening of the rand against the US dollar (2011: $/R8.0407, 2010: $/R6.5701). The remaining operations collectively accounted for approximately 73 percent of AngloGold Ashanti’s total assets at December 31, 2011 compared to 68 percent at the end of the same period in 2010.

Comparison of financial performance in 2010, 20092012, 2011 and 2008

             
Financial performance of AngloGold Ashanti Year ended December 31 
(in millions) 2010  2009  2008 
 
Revenue  5,402   3,954   3,730 
Cost and expenses  (5,021)  (4,852)  (4,103)
Taxation (expense)/benefit  (255)  33   (22)
Equity income/(loss) in associates  40   88   (149)
Discontinued operations        23 
Net income attributable to noncontrolling interests  (54)  (48)  (42)
Net income/(loss)  112   (825)  (563)
 

153

2010


 Financial performance of AngloGold Ashanti  Year ended December 31             
 (in millions)  2012   2011   2010 

 Revenue

   6,428    6,642    5,402 

 Cost and expenses

   (5,217)                 (4,521)             (5,021)  

 Taxation expense

   (340)     (705)     (255)  

 Equity (loss)/income in associates

   (23)     59    40 

 Net income attributable to noncontrolling interests

   (19)     (50)     (54)  

 Net income

   829    1,425    112 

Comparison of financial performance in 20102012 with 2009
2011

Revenues

Revenues from product sales and other income decreased by $214 million from $6,642 million in 2011 to $6,428 million in 2012, representing a 3 percent decrease over the period. This decrease was mainly due to the decrease in production following the unprotected strike action at the South African operations. The decrease was partially offset by the increase in the average spot price of gold. The average spot price of gold was $1,668 per ounce during 2012, $96 per ounce, or 6 percent, higher than $1,572 per ounce in 2011.

Total revenues from the South African operations decreased by $540 million to $2,056 million from $2,596 million in 2011, mainly as a result of the decrease in production (1,213,000 ounces in 2012 compared to 1,624,000 ounces in 2011) following the unprotected strike action. This decrease was partially offset by the increase in the average spot price of gold.

Total revenues from the Continental Africa operations increased by $88 million to $2,617 million from $2,529 million in 2011, mainly as a result of the increase in the average spot price of gold. This increase was partially offset by the 48,000 attributable ounces decrease in production.

Total revenue from the Australian operation at Sunrise Dam increased from $389 million in 2011 to $430 million in 2012. The increase was mainly due to the increase in production from 246,000 attributable ounces in 2011 to 258,000 attributable ounces in 2012 and the increase in the average spot price of gold.

Total revenues from the Americas operations increased from $1,499 million in 2011 to $1,658 million in 2012 mainly as a result of the increase in the average spot price of gold and an increase in gold produced from 891,000 attributable ounces in 2011 to 952,000 attributable ounces in 2012.

Production costs

Production costs increased from $2,977 million in 2011 to $3,183 million in 2012, which represents a $206 million, or 7 percent increase. The increase was primarily due to an increase in operational costs including labor, consumables and fuel. In particular, increased service related costs in Obuasi in Ghana, South Africa, Córrego do Sítio Mineração in Brazil and Cerro Vanguardia in Argentina, contractor costs at Sunrise Dam in Australia and Geita in Tanzania and labor costs in Argentina, Brazil, Obuasi in Ghana and Siguiri in Guinea contributed to higher production costs. Fuel costs increased at Geita in Tanzania, Siguiri in Guinea and Navachab in Namibia and electricity costs increased in South Africa and Obuasi in Ghana. These increases were partially offset by the $30 million recovery from settled insurance claims during the third quarter of 2012 for the reimbursement of costs relating to the pitwall failure at Sunrise Dam (Australia) during 2011 and by the weakening of local currencies against the US dollar.

Exploration costs

Exploration costs increased from $279 million in 2011 to $388 million in 2012 mainly due to higher prefeasibility expenditure at La Colosa in Colombia, additional exploration at Tropicana in Australia and Mongbwalu in the Democratic Republic of the Congo, as well as increased exploration activities in Guinea. For a discussion of AngloGold Ashanti’s exploration activities in 2012, see “Item 4B.: Business overview – Global exploration”.

Royalties

Royalties paid by AngloGold Ashanti decreased from $193 million in 2011 to $164 million in 2012, mainly due to a decrease in payments of royalties under the South African Mineral and Petroleum Resources Act, which was a result of the unprotected strike action and the subsequent decrease in revenue. Royalties recorded by the South African mines decreased from $73 million in 2011 to $25 million in 2012. Royalties in Argentina increased from $27 million in 2011 to $33 million in 2012 primarily as a result of higher average spot prices of gold and higher production. In Argentina, royalties are payable to Fomicruz, a state owned company in the Santa Cruz Province, being the minority shareholder of the Cerro Vanguardia operation and are calculated as a percentage of revenues. Royalties paid in Tanzania amounted to $33 million in 2012 compared to $23 million in 2011 primarily due to the higher production and the higher gold price.

Depreciation, depletion and amortization

Depreciation, depletion and amortization expense increased by $5 million or 1 percent, to $794 million in 2012 when compared to $789 million recorded in 2012.

Impairment of assets

In 2012, AngloGold Ashanti recorded impairments amounting to $367 million, compared to impairments amounting to $17 million in 2011. This was partly due to the impairment of Great Noligwa and Kopanang of $42 million and $14 million, respectively, in South Africa, due to changes in the mine plan resulting in certain areas being abandoned. Furthermore, due to a change in the mine plan at Obuasi in Continental Africa, certain infrastructure, development and assets have been impaired and written-off amounting to $296 million. See “Note 5 - Costs and expenses: Impairment of assets” to the consolidated financial statements for additional information.

Interest expense

Interest expense increased by $35 million to $213 million in 2012, compared to $178 million in 2011. The increase is mainly due to increases in the amortization of borrowing fees, interest charges on the new $750 million rated bonds issued in July 2012, senior floating and fixed rate notes (DMTNP) issued in October 2012 and the increase in discount on a long-term indirect tax receivables. Interest expense recorded in the year ended December 31, 2012 includes $6 million related to accelerated amortization of fees on the syndicated revolving credit facility ($1 billion) canceled in August 2012.

Accretion expense

Accretion expense of $33 million was recorded in 2012 compared with $28 million in 2011. Accretion relates to the unwinding of discounted future rehabilitation obligations to present values and increases in the reclamation obligations to its future estimated payout.

Employment severance cost

Employment severance costs decreased to $10 million in 2012 from $15 million in 2011. Employment severance costs recorded for the year ended December 31, 2012 relates to retrenchments in the South Africa region, South America and Continental Africa region reflecting rationalization of operations.

(Loss)/profit on sale of assets, realization of loans, indirect taxes and other

In 2012, the Company recorded a loss of $35 million compared to a profit of $43 million recorded in 2011. The loss in 2012 mainly related to the reassessment of indirect taxes payable, mining contractor termination and settlement costs, the impairment of investments and the loss on disposal of land, equipment and assets, mineral rights and exploration properties. These losses were partially offset by royalties received from Newmont Mining Corporation (2009 sale of Boddington Gold mine) and Simmers & Jack Mines Limited (2010 sale of Tau Lekoa Gold mine), profit on part disposal of Rand Refinery Limited and profit on disposal of AGA-Polymetal Strategic Alliance.

In 2011, the Company recorded a profit of $43 million compared to a profit of $3 million recorded in 2010. The profit in 2011 mainly related to royalties received from Newmont Mining Corporation (2009 sale of Boddington Gold mine) and Franco Nevada Corporation (2011 sale of royalty stream in Ayanfuri mine). These profits were partially offset by the impairment of investments, the loss on disposal of land, equipment and assets, mineral rights and exploration properties, reassessment of indirect taxes payable and Black economic empowerment transaction restructuring costs.

Non-hedge derivative gain/loss and movement on bonds

Non-hedge derivative gain

A gain on non-hedge derivatives of $93 million was recorded in 2012 compared to a gain of $83 million in 2011 relating to the use of non-hedging instruments. These represent derivatives not designated in formal hedge accounting relationships. The change in fair value of these derivatives are recorded each period in the income statement.

The net gain recorded for the year ended December 31, 2012 related to the fair value movements of the conversion features of convertible bonds amounting to $83 million, movements on other commodity contracts and the revaluation of non-hedge derivatives resulting from changes in the prevailing forward gold price, exchange rates, interest rates and volatilities during the year amounting to a gain of $10 million.

Non-hedge derivatives recorded for the years ended December 31, 2012 and 2011 included:

   Year ended December 31, 
   2012   2011 
   (in US Dollars, million) 

(Gain)/loss on unrealized non-hedge derivatives

   (10)      

Fair value gain on option component of convertible bonds

   (83)     (84)  
  

 

 

 

Net gain

   (93)     (83)  
  

 

 

 
Movement on bonds        
   Year ended December 31, 
   2012   2011 
   (in US Dollars, million) 

Fair value gain on mandatory convertible bonds

   (172)     (113)  

Fair value movements on the mandatory convertible bonds were based on the ex interest NYSE closing price of these bonds.

    

Equity loss/income in associates

Equity income in equity method investments decreased from an income of $59 million in 2011 to a loss of $23 million in 2012, mainly as a result of the decrease in revenue from gold sales at Sadiola and Morila mines in Mali from $189 million and $157 million, respectively, in 2011 to $169 million and $135 million, respectively, in 2012 due to the decrease in production. The decrease was partially offset by the increase in the average spot price of gold for 2012.

Taxation expense

A net taxation expense of $340 million was recorded in 2012, compared to a net taxation expense of $705 million in 2011. Charges for current tax in 2012 amounted to $414 million, compared to $406 million in 2011. The increase in the tax charge in 2012 was mainly due to higher taxable income as a result of the higher gold price, while 2011 was lower due to the utilization of tax losses. This was partially offset by lower taxes at the South African operations as a result of safety stoppages and the unprotected strike action. Charges for deferred tax in 2012 amounted to a net tax benefit of $74 million compared to a net tax expense of $299 million in 2011. The decrease in the deferred tax charge in 2012 is mainly due to the lower enacted statutory tax rates in South Africa, tax credits on impairments at Obuasi and corporate restructuring of Serra Grande, partially offset by the higher enacted statutory tax rates in Ghana. Refer to “Note 7 – Taxation” of the consolidated financial statements.

Comparison of financial performance in 2011 with 2010

Revenues

Revenues from product sales and other income increased by $1,447$1,240 million from $3,955 million in 2009 to $5,402 million in 2010 to $6,642 million in 2011, representing a 3723 percent increase over the period. This increase was mainly due to the increase in the average spot price of gold. The average spot price of gold was $1,572 per ounce during 2011, $345 per ounce, or 28 percent, higher than $1,227 per ounce during 2010, $253 per ounce, or 26 percent, higher than $974 per ounce in 2009. In addition, included in the 2009 gold income, were normal purchase and sale exempted (NPSE) contract losses which from July 2009 onwards were redesignated at fair value on the balance sheet and reported under the loss from non-hedge derivatives.2010. The year on year increase in revenue was partially offset by reduced gold production of 84,000184,000 ounces in 20102011 when compared to 2009.2010. The majority of product sales consisted of US dollar-denominated gold sales.

Total revenues from the South African operations increased by $589$320 million to $2,596 million from $2,276 million from $1,687 million in 2009,2010, mainly as a result of the increase in the average spot price of gold. This increase was offset by the reduced gold production at the South African operations (1,785,000(1,624,000 ounces in 20102011 compared to 1,797,0001,784,000 ounces in 2009)2010).

Total revenues from the Americas operations increased from $804 million in 2009 to $1,125 million in 2010 mainly as a result of the increase in the average spot price of gold and an increase in gold produced from 816,000 attributable ounces in 2009 to 842,000 ounces in 2010.

Total revenues from the Continental Africa operations increased by $420$658 million to $2,529 million from $1,871 million from $1,451 million in 2009,2010, mainly as a result of the increase in the average spot price of gold and the treatment of higher tonnes and higher grade material at Geita.

Total revenue from the Australian operation at Sunrise Dam increaseddecreased from $239 million in 2009 to $468 million in 2010 to $389 million in 2011. The decrease in revenue was mainly due to the decrease in production of 150,000 ounces in 2011.

Total revenues from the Americas operations increased from $1,125 million in 2010 to $1,499 million in 2011 mainly as a result of the increase in the average spot price of gold. Average recovered grade increasedgold and an increase in gold produced from 2.87 grams per tonne842,000 attributable ounces in 20092010 to 3.22 grams per tonne891,000 ounces in 2010.

2011.

Production costs

Production costs increased from $2,229 million in 2009 to $2,656 million in 2010 to $2,977 million in 2011, which represents a $427$321 million, or 1912 percent increase. The production costs of most of the operations increased in 2010.2011. The increase was mainly as a result of an increase in rehabilitation and operational costs including labor, consumables and power. Operational cost increases were mainly due to annual labor cost increases and increased contractor costs at Sunrise Dam, power and the increasetariff increases mainly in the rehabilitation provision. The increase in production costs was partially offset by the effects of cost saving initiatives.

South Africa continued to grapple with steeply rising (31 percent) electricity tariffs, effective from July 2009. On February 24, 2010 Eskom Holdings Limited, the state-owned utility, was also granted permission by the National Energy Regulator to raise prices annually by a further average 25 percent for each of the next three years to fund the construction of new power generation capacity. This will significantly increase the cost structure ofand at AngloGold Ashanti’s South African operations which currently account for approximately 40 percent of annual production. In 2010 powerAshanti Córrego do Sítio Mineração in Brazil and higher rehabilitation costs increased by $71 million of which $51 million wasthat were recorded at Obuasi in South Africa.
Production costsGhana and Serra Grande in Tanzania (Continental Africa) marginally decreased from $261 million in 2009 to $256 million in 2010. This was due to a decrease in consumables used and the effects of cost saving initiatives.
Brazil.

Exploration costs

Exploration costs increased from $150 million in 2009 to $206 million in 2010 to $279 million in 2011 mainly due to higher prefeasibility expenditure at La Colosa in Colombia, additional exploration at Tropicana in Australia and Mongbwalu in the Democratic Republic of the Congo.Congo, as well as increased exploration activities in Guinea, the Solomon Islands and marine exploration areas. For a discussion of AngloGold Ashanti’s exploration activities in 2010,2011, see “Item 4B.: Business overview  Global exploration”.

General and administrative
General and administrative expenses increased from $158 million in 2009 to $228 million in 2010, mainly due to higher labor costs, the roll out of Project ONE business improvement initiatives, the implementation of a global security framework, corporate office costs, consultancy fees and the strengthening of the rand relative to the US dollar.

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Royalties

Royalties paid by AngloGold Ashanti increased from $84$142 million in 20092010 to $142$193 million paid in 20102011, mainly due to the introductionpayments of royalties under the South African Mineral and Petroleum Resources Act of royalties payable in South Africa from March 1, 2010 as well asand the highhigher average spot price of gold. Royalties recorded by the South African mines wereincreased from $38 million in 2010.2010 to $73 million in 2011. Royalties in Argentina increased from $16 million in 2009 to $21 million in 2010 to $27 million in 2011 as a result of higher average spot prices of gold. In Argentina, royalties are payable to Fomicruz, a Statestate owned company in the Santa Cruz Province, being the minority shareholder of the Cerro Vanguardia operation and are calculated as a percentage of revenues. Royalties paid in Ghana and GuineaTanzania amounted to $48$23 million in 20102011 compared to $46$13 million in 2009. In Ghana, royalties are payable2010. Royalties in Tanzania increased due to the government at a fixed rate of 3 percent per annum based on revenue, as agreed to under the Stability Agreement entered into with AngloGold as part of the AngloGold Ashanti business combination. In Guinea, royalties are paid to the government, Union Minierehigher production and the International Finance Corporation and are calculated as a percentage of revenues.

higher gold price.

Depreciation, depletion and amortization

Depreciation, depletion and amortization expense increased by $105$69 million or 1710 percent, to $789 million in 2011 when compared to $720 million in 2010 when compared to $615 million recorded in 2009.2010. This increase was mainly due to increases in depreciation, depletion and amortization expense in South Africa, Tanzania (Continental Africa) and the Americas from $281 million, $53$55 million and $111$152 million, respectively, incurred in the year ended December 31, 20092010 to $357 million, $55$82 million and $152$173 million, respectively, for the same period of 20102011 mainly as a result of higher production and changes in estimated livesuseful life of assets as well as stronger local currencies. This was partially offset by a decreasewhich are used in the calculation of depreciation, depletion and amortization expense in Ghana (Continental Africa) which decreased from $101 million incurred in the year ended December 31, 2009 to $87 million in the same period in 2010 as a result of a decrease in gold production.

amortization.

Impairment of assets

In 2010,2011, AngloGold Ashanti recorded impairments amounting to $91$17 million compared to $8$91 million in 2009. The increase2010. This was mainly due to the impairment of Tau Lekoa (held for sale),Savuka, waste wash plant at Kopanang and abandoned shaft pillar development at Tau Tona and Savuka in South Africa during 2010,2011 and the write-off of assets at Iduapriem, Geita and Serra GrandeObuasi in Brazil.Continental Africa. Tau Tona and Savuka were impaired due to changes in the mine plan resulting in areas being abandoned and safety related concerns. Total impairment recognized for Tau Tona and Savuka during 2010 was $63 million. Following the classification of Tau Lekoa as held for sale, impairment testing was performed on the held for sale asset and since the estimated fair value did not support the carrying value, an impairment of $8 million was recorded. See “Note 5 Costs and expenses: Impairment of assets” to the consolidated financial statements for additional information.

Interest expense

Interest expense increased by $28$27 million to $178 million in 2011, compared to $151 million in 2010, compared to $123 million recorded in 2009.2010. The increase is mainly due to interest charges for the full year on the rated bonds and mandatory convertible bonds which waswere issued in April 2010 and September 2010, respectively, partially offset by lower interest paid due to the repayment of the 2009 Term Facility and $1.5 billion Revolving Credit Facility during 2010. Interest expense recorded in the year ended December 31, 2010 includes $8 million related to accelerated amortization of fees on canceled debt facilities cancelled.

facilities.

Accretion expense

Accretion expense of $22$28 million was recorded in 20102011 compared with $17$22 million in 2009.2010. Accretion relates to the unwinding of discounted future reclamationrehabilitation obligations to present values and increases in the reclamation obligations to its future estimated payout.

155


Employment severance cost

Employment severance costs increaseddecreased to $15 million in 2011 from $23 million in 2010 from $14 million in 2009.2010. Employment severance costs recorded for the year ended December 31, 20102011 relates to retrenchments in the South Africa region reflecting rationalization of operations at Great Noligwa, Kopanang, Tau TonaTauTona and Mponeng.

Mponeng and in Continental Africa reflecting rationalization of operations.

Profit/loss on sale of assets, realization of loans, indirect taxes and other

In 2010,2011, the Company recorded a profit of $3$43 million compared to a lossprofit of $10$3 million recorded in 2009. 2010. The profit in 2011 mainly related to royalties received from Newmont Mining Corporation (2009 sale of Boddington Gold mine) and Franco Nevada Corporation (2011 sale of royalty stream in Ayanfuri mine). These profits were partially offset by the impairment of investments, the loss on disposal of land, equipment and assets, mineral rights and exploration properties, reassessment of indirect taxes payable and Black economic empowerment transaction restructuring costs.

The profit in 2010 mainly related to profit on sale of investments held in B2Gold Corporation and Red 5 Limited, an insurance claim recovery at Savuka mine and royalties received. These profits waswere partially offset by the mandatory convertible bond underwriting and professional fees, the loss on disposal of land, equipment and assets, mineral rights and exploration properties and reassessment of indirect taxes payable in Tanzania, Brazil, Guinea and South Africa.

The loss in 2009 mainly related to the impairment of Pamodzi Gold debtor in South Africa whose operations were liquidated during October 2009, a loss on consignment stock and reassessment of indirect taxes payable in Tanzania, Brazil and Guinea being offset by the profit on disposal of the indirect 33.33 percent joint venture interest in Boddington Gold mine in Australia to Newmont Mining Corporation.
Non-hedge derivative loss and movement on bonds

Non-hedge derivative loss

A lossgain on non-hedge derivatives of $703$83 million was recorded in 20102011 compared to a loss of $1,452$703 million in 20092010 (which included normal purchase and sale exempted (“NPSE”) contracts re-designated to non-hedging instruments during the period)in previous years) relating to the use of non-hedging instruments. These represent derivatives not designated in formal hedge accounting relationships. The change in fair value of suchthese derivatives is recorded each period in the income statement.

The net gain recorded for the year ended December 31, 2011 relates to the fair value movements of the conversion features of convertible bonds amounting to $84 million and the revaluation of non-hedge derivatives resulting from changes in the prevailing forward gold price, exchange rates, interest rates and volatilities during the year amounting to a loss of $1 million.

During 2010, the Company eliminated its gold hedge book. The loss on scheduled hedge book maturities during 2010 was $277 million. Loss on non-hedge derivatives includesincluded a realized loss of $2,698 million relatingrelated to the final tranche of the accelerated hedge buy-back that commenced in September 2010 and was concluded on October 7, 2010. The final phase of hedge restructuring was funded with proceeds from the equity offering and the mandatory convertible bonds in September 2010, as well as cash from internal sources and debt facilities.

Therefore, the

The loss on non-hedge derivatives recorded for the year ended December 31, 2010 relates to the accelerated hedge book settlement, normal realized losses on non-hedge derivatives, the fair value movement of the conversion features of convertible bonds aggregating to $1.1 million and the revaluation of non-hedge derivatives resultingderivative that resulted from changes in the prevailing spot gold price, exchange rates, interest rates, volatilities and non-performance risk during 2010.

During 2009, the Company embarked on a

The hedge buy-back that resulted in the accelerated settlement of both non-hedge and forward gold contracts qualifying for the normal purchases and sales exemption (which permits the Company to not record such amounts in its financial statements until the maturity date of the contract) under which the Company had committed to deliver a specified quantity of gold at a future date in exchange for an agreed price. Of the total hedge buy-back cost of $797 million, the majority, being $580 million, related to contracts previously designated as NPSE, which allowed them to be accounted for off-balance sheet in prior periods. A further $217 million was also incurred in accelerating the cash settlement of existing non-hedge derivative contracts that were not previously designated as NPSE contracts. However, as a result of the accelerated cash settlement of the NPSE contracts during July 2009, the FASB ASC guidance on derivatives and hedging necessitated a review of the continuing designation of, and accounting treatment for, the remaining NPSE contracts that were not part of the accelerated settlement. As the Company continued to consider alternatives to reduce its outstanding gold derivatives position in future periods including, where appropriate, the accelerated settlementre-designation of contracts previously qualifying for the NPSE designation, management concluded,(effected in accordance with the provisions of the FASB ASC guidance, to re-designate all remaining NPSE contracts as non-hedge derivatives and to account for such contracts at fair value on the balance sheet with changes in fair value accounted for in the income statement.

156


The impact in July 2009 of the related re-designation of the contracts discussed above2009) resulted in an increase in the current non-hedge derivative liabilityliabilities and a consequential loss on non-hedge derivatives of $543 million. During the remainder of 2009, the contracts that were previously NPSE designated experienced a further fair value decline (recordedrecorded in (gain)/loss on non-hedge derivatives) of $143 million, settlements of $130 million and thus resulted in a $556 million derivative liability balance as of December 31, 2009.derivatives. During 2010, the contracts had aopening balance of the derivative liability of $556 million further declined by $131 million in fair value, decline of $131 million, before all these contracts were settled for $687 million throughout the year.
million.

Non-hedge derivatives recorded for the years ended December 31, 2011 and 2010 and 2009 included:

         
  Year ended December 31, 
  2010  2009 
  (in US Dollars, million) 
Loss on realized non-hedge derivatives  2,975   543 
(Gain)/loss on unrealized non-hedge derivatives  (2,273)  876 
Fair value loss on option component of convertible bonds  1   33 
   
Net loss  703   1,452 
   
Movement on bonds
         
  Year ended December 31, 
  2010  2009 
  (in US Dollars, million) 
Fair value loss on mandatory convertible bonds  83    
         
Fair value movements on the mandatory convertible bonds relate to the ex interest NYSE closing price of these bonds.        

   Year ended December 31, 
   2011  2010 
   (in US Dollars, million) 

Loss on realized non-hedge derivatives

   -   2,975 

Loss/(gain) on unrealized non-hedge derivatives

   1   (2,273

Fair value (gain)/loss on option component of convertible bonds

   (84  1 
  

 

 

 

Net (gain)/loss

   (83  703 
  

 

 

 

Movement on bonds

 

   
   Year ended December 31, 
   2011  2010 
   (in US Dollars, million) 

Fair value (gain)/loss on mandatory convertible bonds

   (113  83 

Fair value movements on the mandatory convertible bonds were based on the ex interest NYSE closing price of these bonds.

   

Equity income in associates

Equity income in equity method investments decreasedincreased from $88 million in 2009 to $40 million in 2010 to $59 million in 2011, mainly as a result of a decreasethe increase in revenue from gold sales at YatelaSadiola and Morila mines in Mali from $89 million and $135 million, respectively, in 2009 to $71$143 million and $117 million, respectively, in 2010.2010 to $189 million and $157 million, respectively, in 2011. The decrease was mainly due to a decrease in production in 2010 compared to 2009. The decrease in production was partially offset by the increase in the average spot price of gold for 2010.

Taxation expense/benefit
A net taxation expense of $255 million was recorded in 2010 compared to a net tax benefit of $33 million recorded in 2009. Charges for current tax in 2010 amounted to $117 million compared to $166 million in 2009. The decrease in the current tax charge in 2010 mainly related to tax benefits on losses relating to the early hedge settlement and tax benefits relating to prior year in South Africa. This decrease was partly offset by an increase in the tax charge due to higher income as a result of the higher gold price. Charges for deferred tax in 2010 amounted to a net tax expense of $138 million compared to a net tax benefit of $199 million in 2009. The increase in the deferred tax charge in 2010 is mainly related to the reversal of deferred tax on unrealized non-hedge derivative losses. Refer to “Note 7 — Taxation” of the consolidated financial statements for deductible temporary differences expected to reverse.

157


Comparison of financial performance in 2009 with 2008
Revenues
Revenues from product sales and other income increased by $224 million from $3,730 million in 2008 to $3,954 million in 2009, representing a 6 percent increase over the period. This increase was mainly due to the increase in the average spot price of gold. The average spot price of gold was $974 per ounce during 2009, $102 per ounce, or 12 percent, higher than $872 per ounce, the average spot price of gold in 2008. This increase was partially offset by reduced gold production (4.6 million ounces in 2009 compared to 5 million ounces in 2008). The majority of product sales consisted of US dollar-denominated gold sales.
Total revenues from the South African operations increased by $165 million to $1,686 million from $1,521 million in 2008, mainly as a result of the increase in the average spot price of gold. This increase was offset by the reduced gold production at the South African operations (1,797,000 ounces in 2009 compared to 2,099,000 ounces in 2008). Total revenues from Navachab (in Namibia) increased from $42 million in 2008 to $61 million in 2009.
The two operations in Brazil produced 406,000 attributable ounces compared to 407,000 ounces in 2008. Total revenues increased from $343 million in 2008 to $438 million in 2009 as a result of the increase in the average spot price of gold. Total revenues from Cerro Vanguardia (in Argentina) increased from $118 million in 2008 to $196 million in 2009.
The Australian operation at Sunrise Dam production decreased from 433,000 ounces in 2008 to 401,000 ounces in 2009. Average recovered grade decreased from 3.46 grams per tonne in 2008 to 2.87 grams per tonne in 2009. Total revenues decreased from $282 million in 2008 to $239 million in 2009. The decrease was partially offset by the increase in the average spot price of gold.
for 2011.

Production costs

Production costs increased from $2,159 million in 2008 to $2,229 million in 2009, which represents a $70 million, or 3 percent increase. The production costs of most of the operations increased in 2009. The increase was mainly as a result of an increase in operational costs including labor, consumables, power and ore stockpile adjustments. The increase in production costs was partially offset by the effects of cost saving initiatives.
The increase in production costs during 2009 was partially offset by a decrease in production costs in Argentina (Cerro Vanguardia) from $99 million in 2008 to $62 million in 2009. This was due to an increase in silver revenue (which is deducted from production costs) and the effects of cost saving initiatives.
South Africa continued to grapple with steeply rising electricity tariffs, evidenced by the 31 percent price increase effective from July 2009.
Exploration costs
Exploration costs increased from $126 million in 2008 to $150 million in 2009 mainly due to increased activities in Colombia relating to prefeasibility work at La Colosa, new projects in Canada and the Solomon Islands, increased activities in Australia, marginally offset by a drop in activities in the DRC and winding down of activities in China. For a discussion of AngloGold Ashanti’s exploration activities in 2009, see “Item 4B.: Business overview — Global exploration”.
General and administrative
General and administrative expenses increased from $136 million in 2008 to $158 million in 2009, mainly due to costs relating to labor bonuses, corporate office costs and consultancy fees.

158


Royalties
Royalties paid by AngloGold Ashanti increased from $78 million in 2008 to $84 million paid in 2009 primarily due to higher spot prices, with royalties in Argentina amounting to $16 million in 2009 compared with $12 million in 2008. In Argentina, royalties are payable to Fomicruz, a State owned company in the Santa Cruz Province, being the minority shareholder of the Cerro Vanguardia operation and are calculated as a percentage of revenues. Royalties paid in Ghana and Guinea amounted to $46 million in 2009 compared to $45 million in 2008. In Ghana, royalties are payable to the government at a fixed rate of 3 percent per annum based on revenue, as agreed to under the Stability Agreement entered into with AngloGold as part of the AngloGold Ashanti business combination. In Guinea, royalties are paid to the government, Union Miniere and the International Finance Corporation and are calculated as a percentage of revenues.
Royalties paid by AngloGold Ashanti will increase further in 2010 as a result of the requirement in the South African Mineral and Petroleum Resources Act to pay additional royalties in South Africa from March 1, 2010. See “key factors affecting results — South African economic and other factors”.
Depreciation, depletion and amortization
Depreciation, depletion and amortization expense recorded in 2009 was similar to the $615 million recorded in 2008.
Impairment of assets
In 2009, AngloGold Ashanti recorded impairments amounting to $8 million compared to $670 million in 2008. Impairments in 2009 consist of impairment and write-off of the oxide treatment plant at the Obuasi mine and impairment of Tau Lekoa (held for sale). Following the classification of Tau Lekoa as held for sale, impairment testing was performed on the held for sale asset. As the estimated fair value did not support the carrying value, an impairment of $4 million was recorded. See “Note 5 — Costs and expenses: Impairment of assets” to the consolidated financial statements for additional information. In accordance with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) guidance on discontinued operations, Tau Lekoa is not classified as a discontinued operation. See “Note 17 — Assets and Liabilities Held for Sale” to the consolidated financial statements.
InterestTaxation expense
Interest expense increased by $51 million to $123 million in 2009, compared to $72 million recorded in 2008. This was mainly due to the higher interest and fees on the Term Facility and a reduction in capitalized interest.
Accretion expense
Accretion

A net taxation expense of $17$705 million was recorded in 20092011 compared with $22to $255 million in 2008. Accretion relates to the unwinding of discounted future reclamation obligations to present values and increases the reclamation obligations to its future estimated payout.

Employment severance cost
Employment severance costs increased to $14 million in 2009 from $9 million in 2008. The 2009 expense was due to retrenchments reflecting mainly downsizing and rationalization of operations in the South Africa and Ghana regions. Employee severance costs recorded in 2009 included retrenchment costs of $10 million in the South African region and $3 million in Ghana (at Obuasi) due to a planned reduction in workforce.
Profit/loss on sale of assets, realization of loans, indirect taxes and other
In 2009, the Company recorded a loss of $10 million compared to a profit of $64 million recorded in 2008. The loss in 2009 mainly related to the impairment of Pamodzi Gold debtor in South Africa whose operations were liquidated during October 2009, a loss on consignment stock and reassessment of indirect taxes payable in Tanzania, Brazil and Guinea offset by the profit on disposal of the indirect 33.33 percent joint venture interest in Boddington Gold Mine in Australia to Newmont Mining Corporation.

159


Non-hedge derivative loss
A loss on non-hedge derivatives of $1,452 million was recorded in 2009 (which includes normal purchase and sale exempted (“NPSE”) contracts re-designated to non-hedging instruments during the period) compared to a loss of $258 million in 2008 relating to the use of non-hedging instruments, which represent derivatives not designated in formal hedge accounting relationships. The change in fair value of such derivatives is recorded each period in the income statement.
During 2009, the Company embarked on a hedge buy-back that resulted in the accelerated settlement of both non-hedge and forward gold contracts qualifying for the normal purchases and sales exemption (which permits the Company to not record such amounts in its financial statements until the maturity date of the contract) under which the Company had committed to deliver a specified quantity of gold at a future date in exchange for an agreed price. Of the total hedge buy-back cost of $797 million, the majority, being $580 million, related to contracts previously designated as NPSE, which allowed them to be accounted for off-balance sheet in prior periods. A further $217 million was also incurred in accelerating the cash settlement of existing non-hedge derivative contracts that were not previously designated as NPSE contracts. However, as a result of the accelerated cash settlement of the NPSE contracts during July 2009, the FASB ASC guidance on derivatives and hedging necessitated a review of the continuing designation of, and accounting treatment for, the remaining NPSE contracts that were not part of the accelerated settlement. As the Company continued to consider alternatives to reduce its outstanding gold derivatives position in future periods including, where appropriate, the accelerated settlement of contracts previously qualifying for the NPSE designation, management concluded, in accordance with the provisions of the FASB ASC guidance, to re-designate all remaining NPSE contracts as non-hedge derivatives and to account for such contracts at fair value on the balance sheet with changes in fair value accounted for in the income statement.
The impact in July 2009 of the related re-designation of the contracts discussed above resulted in an increase in the current non-hedge derivative liability and a consequential loss on non-hedge derivatives of $543 million. During the remainder of 2009, the contracts that were previously NPSE designated experienced a further fair value decline (recorded in loss on non-hedge derivatives) of $143 million, settlements of $130 million and thus resulted in a $556 million derivative liability balance as of December 31, 2009.
Therefore, the loss on non-hedge derivatives recorded for the year ended December 31, 2009 primarily relates to the hedge buy-back that resulted in the accelerated settlement and related re-designation of the NPSE contracts discussed above, the fair value movement of the conversion features of convertible bonds amounting to $32.6 million (as described in Note 19 to the financial statements) and the revaluation of non-hedge derivatives, including those NPSE contracts re-designated as a result of the accelerated settlement as discussed above, resulting from changes in the prevailing spot gold price, exchange rates, interest rates, volatilities and non-performance risk during 2009.
During 2008, the Company recorded a realized loss on the accelerated settlement of non-hedge derivatives of $1,088 million. In addition, the Company recognized a loss of $150 million during 2008 on forward gold contracts previously qualifying for the NPSE, due to the inability of a single counterpart to accept physical delivery of gold for the forward contracts that had matured. Accordingly, the remaining contracts with this counterpart for future periods were accounted for at fair value on balance sheet, with changes in fair value reflected in the income statement. Following this, during the third quarter of 2008, the Company cash settled contracts now designated as non-hedge derivative contracts, with the same counterpart, maturing in July 2008 through August 2009. Non-hedge derivatives recorded for the years ended December 31, 2009 and 2008 included:
         
  Year ended December 31, 
  2009  2008 
  (in US Dollars, million) 
Loss on realized non-hedge derivatives  543   1,243 
Loss/(gain) on unrealized non-hedge derivatives  876   (985)
Fair value loss on option component of convertible bonds  33    
   
Net loss  1,452   258 
   

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Other operating items
Other operating items, consisting of realized loss on other commodity contracts and (reversal of) provision for loss on future deliveries of other commodities and unrealized gain/loss on other commodity physical borrowings amounted to a net expense of $nil million in 2009 compared to a net expense of $19 million in 2008.
Equity income in associates
Equity income in equity method investments increased from a loss of $149 million in 2008 to an income of $88 million in 2009, mainly as a result of increased attributable earnings at Yatela, Sadiola and Morila mines in Mali in 2009 of $33 million, $32 million and $36 million, respectively, compared to losses of $18 million, $52 million and $69 million, respectively, in 2008. The increase in attributable earnings was mainly due to an increase in the average spot price of gold and better production from Yatela.
Taxation expense/benefit
A net taxation benefit of $33 million was recorded in 2009 compared to a net tax expense of $22 million recorded in 2008.2010. Charges for current tax in 20092011 amounted to $166$406 million compared to $94$117 million in 2008. Charges for deferred tax in 2009 amounted to a net tax benefit of $199 million compared to a net tax benefit of $72 million in 2008.2010. The increase in the current tax charge in 20092011 is mainly due to higher income as a result of the higher gold price and capital gainslosses having been fully utilized during the current year in South Africa and Tanzania. Charges for deferred tax in 2011 amounted to a net tax expense of $299 million compared to $138 million in 2010. The increase in the deferred tax charge in 2011 is mainly due to the reversal of deferred tax credits on losses utilized in South Africa, Geita and the sale of the interest in Boddington.Americas. Refer to “Note 7 Taxation” of the consolidated financial statements for deductible temporary differences expectedstatements.

5B.

LIQUIDITY AND CAPITAL RESOURCES

In the board’s opinion, AngloGold Ashanti’s working capital is sufficient to reverse.

161

meet the Company’s present requirements.


5B. LIQUIDITY AND CAPITAL RESOURCES
Operating activities
2010

2012

Net cash provided by operating activities was $1,038$1,700 million in 2010, significantly2012, lower than the 2011 amount of $2,550 million. The decrease in net cash provided by operations was mainly as a result of higher costs and lower revenues.

Net cash outflow from operating working capital items amounted to $195 million in 2012, compared with an outflow of $131 million in 2011.

2011

Net cash provided by operating activities was $2,550 million in 2011, higher than the 20092010 amount of $443$1,038 million. The increase in net cash provided by operations was mainly as a result of an increase in the average spot price of gold price received during 2011 and the elimination of the hedge book in 2010.

Net cash outflow from operating working capital items amounted to $314$131 million in 2010,2011, compared with an outflow of $21$314 million in 2009.

2009
Net cash provided by operating activities was $443 million in 2009, significantly higher than the 2008 amount of $64 million. The increase in net cash provided by operations was mainly as a result of lower payments to suppliers, higher received gold price and lower cash utilized in hedge buy-backs in 2009.
Net cash outflow from operating working capital items amounted to $21 million in 2009, compared with an outflow of $239 million in 2008.
2010.

Investing activities

2010

2012

Investing activities in 20102012 resulted in a net cash outflow of $1,887$2,651 million, which is an increase of $1,619$1,048 million from an outflow of $268$1,603 million in 2009.2011. Additions to property, plant and equipment increased to $1,758 million in 2012 compared to $1,393 million in 2011. The acquisition of First Uranium (Pty) Limited resulted in a cash outflow of $335 million in 2012.

2011

Investing activities in 2011 resulted in a net cash outflow of $1,603 million, which is a decrease of $284 million from an outflow of $1,887 million in 2010. Additions to property, plant and equipment increased to $1,393 million in 2011 compared to $973 million in 2010. Investing activities for non-hedge derivatives maturing resulted in an outflow of $984$nil million in the year ended December 31, 20102011 compared to an outflow of $18$984 million for the same period in 2009. Proceeds received from the sale of assets decreased from $1,142 million in 2009 to $69 million in 2010 due to the inclusion of the sale of Boddington 2009.

2009
Investing activities in 2009 resulted in a net cash outflow of $268 million, which is a decrease of $1,325 million from an outflow of $1,593 million in 2008 mainly due to the $990 million in proceeds received from the sale of the 33.33 percent stake in Boddington which was offset in part by the $344 million acquisition of an effective indirect 45 percent interest in the Kibali gold project.
2010.

Financing activities

2010
During the second and third quarter of 2010, AngloGold Ashanti completed the following key financing transactions, namely:
1.The issue of two rated US dollar bonds maturing in 10 and 30 years aggregating $1.0 billion. The net proceeds of $983 million were applied to repay and cancel amounts drawn under the $1.15 billion syndicated loan facility and the 2009 Term Facility;
2.The entering of a four year unsecured Syndicated loan facility with a group of banks for $1.0 billion of which $950 million remained undrawn as at December 31, 2010;
3.The entering of a ZAR1.5 billion ($222 million) short-term loan from FirstRand Bank Limited, of which $107 million was drawn as at December 31, 2010, to part fund the closing of the hedge book; and
��
4.The raising of aggregate net proceeds of $1,562 billion in equal parts of a dual tranche capital raising

162


2012

comprising equity and three-year mandatory convertible bonds in order to, together with cash and drawings from credit facilities, fund the elimination of the hedge book.
Net cash generated by financing activities in the year ended December 31, 20102012 amounted to an inflow of $230$736 million, which is a decreasean increase of $73$1,055 million from an inflowoutflow of $303$319 million in the year ended December 31, 2009.2011. Cash inflows from proceeds from loans in 20102012 amounted to $2,316$1,432 million and included gross$200 million drawn down on the $1.0 billion four-year syndicated loan facility, $750 million proceeds of $994 million raised fromon the rated bonds issued in July 2012 to fund ongoing capital projects as well as $262 million drawn down on the A$600 million syndicated loan for general corporate purposes, principally on the Tropicana project.

Cash outflows from repayment of debt of $217 million during April 2010, $789the year ended December 31, 2012 included the repayment of $200 million raised from mandatory convertible bonds during September 2010, $326 million raised fromon the Firstrand Bank Limited$1.0 billion four-year syndicated loan facility raised and $170normal scheduled loan repayments of $17 million. Cash outflows for the acquisition of the remaining 50 percent stake of Serra Grande mine in Brazil amounted to $215 million.

Dividends paid increased from $169 million raised fromin 2011 to $236 million in 2012. Dividends are proposed and approved by the $1 billion Syndicated loan facility. Financingboard of directors of AngloGold Ashanti, based on the Company’s financial performance.

2011

Net cash generated by financing activities for non-hedge derivatives maturing resulted in the year ended December 31, 2011 amounted to an outflow of $1,065$319 million, which is a decrease of $549 million from an inflow of $230 million in the year ended December 31, 2010 compared2010. Cash inflows from proceeds from loans in 2011 amounted to an inflow$109 million and included gross proceeds of $35$100 million forraised from the same period in 2009. Debt issuance costs paid during the year ended December 31, 2010 included $26 million on the mandatory convertible bonds and $13 million on the rated bonds.

$1 billion syndicated loan facility.

Cash outflows from repayment of debt of $1,642$268 million during the year ended December 31, 20102011 included the capital repayment of $1,060 million towards the $1.15 billion syndicated loan facility during June 2010, $250 million towards the 2009 Term Facility, $200$99 million towards the FirstRand Bank Limited loan facility, $120$150 million towards the $1.0 billion syndicated loan facility and normal scheduled loan repayments of $12$19 million.

Dividends paid increased from $56 million in 2009 to $117 million in 2010.2010 to $169 million in 2011. Dividends are proposed and approved by the board of directors of AngloGold Ashanti, declares interim dividends at the time of announcing its interim results and declares and pays final dividends in the following year based on the previous year’s results.

2009
Net cash generated by financing activities in 2009 amountedCompany’s financial performance. During the third quarter of 2011, the Company changed its frequency of dividend payments to an inflow of $303 million, which is a decrease of $1,412 million from an inflow of $1,715 million in 2008, and included cash inflows from proceeds from loans of $2,774 million (which included $1.0 billion under the Standard Chartered Term Facility, $985 million under the $1.15 billion syndicated loan facility and $732.5 million under the convertible bonds issued May 2009). Proceeds from stock issued (reflecting mainly the equity offering to fund the acquisition of the initial effective 35 percent interest in the Kibali gold project) in 2009 amounted to $306 million.
Cash outflows from repayment of debt of $2,731 million during 2009 included: the capital repayment of the $1.0 billion convertible bond on February 27, 2009, $899 million on the $1.15 billion syndicated loan facility, $750 million on the Term Facility and normal scheduled loan repayments of $82 million.
Dividends paid decreased from $58 million in 2008 to $56 million in 2009. AngloGold Ashanti declares interim dividends at the time of announcing its interim results and declares and pays final dividends in the following year based on the previous year’s results.
quarterly, rather than half-yearly.

Liquidity

AngloGold Ashanti’s revenues are derived primarily from the sale of gold produced at its mines. Cash generated by operating activities is therefore the function of gold produced sold at a specific price. The market price of gold can fluctuate widely, which impacts the profitability of the Company’s operations and the cash flows generated by these operations. Earnings of joint ventures and subsidiaries in Mali and Argentina which are not permanently re-invested may be received as dividends.

AngloGold Ashanti’s cash and cash equivalents decreased to $586 million (which includes $11 million for held for sale assets) at December 31, 2010 compared with $1,100$892 million at December 31, 2009.2012 compared with $1,112 million at December 31, 2011. In accordance with South African Reserve Bank regulations, cash generated by South African operations is held in rands and is therefore subject to exchange controls. At December 31, 2010, approximately 362012, 77 percent of the Company’s cash and cash equivalents werewas held in US dollars, 3113 percent werewas held in South African rands and 3310 percent werewas held in other currencies.

163


On May 22, 2009, the Company concluded an issue of convertible bonds, in the aggregate principal amount of $732.5 million at an interest rate of 3.5 percent convertible into ADS of AngloGold Ashanti at an initial conversion price of $47.6126. The conversion price is subject to standard weighted average anti-dilution protection. The convertible bonds were issued by AngloGold Ashanti Holdings Finance plc, a finance company subsidiary wholly-owned by AngloGold Ashanti Limited. The business of AngloGold Ashanti Holdings Finance plc is to issue debt securities to finance the activities of AngloGold Ashanti Limited and its subsidiaries and associates. AngloGold Ashanti Limited has fully and unconditionally guaranteed the convertible bonds issued by AngloGold Ashanti Holdings Finance plc. There are no significant restrictions on the ability of AngloGold Ashanti Limited to obtain funds from its subsidiaries by dividend, loan or advances. The convertible bonds mature on May 22, 2014.
On April 20, 2010, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Inc., each a wholly-owned subsidiary of AngloGold Ashanti Limited, as borrowers, and AngloGold Ashanti Limited entered into a $1.0 billion four year revolving credit facility, at an interest rate of Libor plus 1.750 percent, with a syndicate of lenders to replace the existing $1.15 billion syndicated facility. AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Inc. each guaranteed the obligations of the borrowers and other guarantors under the facility. Amounts may be repaid and reborrowed under the facility during its four year term. A commitment fee of 0.70 percent is payable quarterly in arrears on the undrawn portion of the facility. The syndicated loan facility will mature on April 20, 2014.
On April 22,28, 2010, the Company announced the pricing ofcompleted an offering of a $700 million 10-year note and a $300 million 30-year note. The offering closed on April 28, 2010. The notes were issued by AngloGold Ashanti Holdings plc, a wholly-owned subsidiary of AngloGold Ashanti Limited, and are fully and unconditionally guaranteed by AngloGold Ashanti Limited. The notes are unsecured and interest is payable semi-annually at a rate of 5.375 percent on the $700 million bond and 6.50 percent on the $300 million bond. The bonds are payable in April 2020 and April 2040, respectively.

In September 2010, the Company issued mandatory convertible bonds at a coupon rate of 6 percent due in September 2013. The conversion of the mandatory convertible bonds into ADSs was subject to shareholder approval, which was granted in October 2010. These bonds are convertible into a variable number of shares ranging from 18,140,000 at a share price equal to or lesser than $43.50, to 14,511,937 at a share price equal to or greater than $54.375, each as calculated in accordance with the formula set forth in the indenture and subject to adjustment. Concurrent with the mandatory convertible bonds offering was an equity offering which resulted in the issue of 18,140,000 shares at an issue price of R308.37 per share. Total gross proceeds of $789 million were received from each of these offerings.

During The mandatory convertible bonds issued during 2010 are not included in basic earnings per ordinary share as they contain features that could result in their settlement in cash and therefore do not meet the definition of an equity instrument. The principal of this bond will be settled by the issue of shares as mentioned earlier and only the interest payments will be settled in cash.

On December 22, 2011, approximately $135 millionAngloGold Ashanti Australia Limited, a wholly-owned subsidiary of AngloGold Ashanti’s debtAshanti Limited, entered into a four year revolving credit facility of A$600 million with a syndication of banks. Interest is scheduled to mature, consisting mainlycharged at BBSY plus 2 percent per annum. Each of $107 millionAngloGold Ashanti Limited and AngloGold Ashanti Holdings plc. has guaranteed all payments and other obligations of AngloGold Ashanti Australia Limited under the FirstRand Bankfacility. Amounts may be repaid and redrawn under the facility during its four year term. No draw down was made during 2011 under the facility. An amount of $266 million was drawn down during the year ended December 31, 2012 under the facility. A commitment fee of 50 percent of the applicable margin (i.e. 1 percent) is payable quarterly in arrears on the undrawn portion of the facility. This facility will be used to fund general working capital requirements.

On July 20, 2012, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Inc., each a wholly-owned subsidiary of AngloGold Ashanti Limited, as borrowers, and AngloGold Ashanti Limited entered into a $1.0 billion five-year unsecured revolving credit facility with a syndicate of lenders which replaced its existing $1.0 billion syndicated facility maturing in April 2014. AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc. and AngloGold Ashanti USA Inc. each guaranteed the obligations of the borrowers under the facility. Amounts may be repaid and redrawn under the facility during its five-year term. Amounts outstanding under the facility bear interest at LIBOR plus a margin that varies based on the credit rating of AngloGold Ashanti Limited. No draw down was made during 2012 under the facility. A commitment fee of 0.525 percent is payable quarterly in arrears on the undrawn portion of the facility.

On July 30, 2012, the Company completed an offering of $750 million aggregate principal amount of 5.125 percent notes due 2022. The notes were issued by AngloGold Ashanti Holdings plc, a wholly-owned subsidiary of the Company. The notes are unsecured and fully and unconditionally guaranteed by AngloGold Ashanti Limited.

On February 18, 2013, AngloGold Ashanti Limited entered into a syndicated bridge loan facility agreement pursuant to which a syndicate of banks agreed to make available $750 million to AngloGold Ashanti Holdings plc. In the event that AngloGold Ashanti Limited chooses to draw on the loan, the proceeds are to be applied towards the repayment of the $732.5 million 3.5 percent convertible bonds due in May 2011.

2014 issued by AngloGold Ashanti Holdings Finance plc.

AngloGold Ashanti intends to finance its capital expenditure and debt repayment requirements in 20112013 from cash on hand, cash flow from operations, existing credit facilities and, potentially, if deemed appropriate, long-term debt financing, the issuance of equity and equity linked instruments.

Short-term debt

AngloGold Ashanti’s short-term debt decreasedincreased to $135$859 million at December 31, 20102012 from $1,292$32 million at December 31, 2009.2011. Included in the short-term debt at December 31, 2010,2012, were:

$588 million payable under the mandatory convertible bonds, which are convertible into ADSs in September 2013 (interest charged at 6 percent per annum; the bonds are US dollar-based);

the amount outstanding of $107 million under the FirstRand Bank Limited loan facility due in May 2011;
$8 million in interest payable under the $700 million 10 year bond (interest charged at 5.375 percent per annum; the loan is repayable in April 2020 and is US dollar-based); and
$4 million in interest payable under the $300 million 10 year bond (interest charged at 6.50 percent per annum; the loan is repayable in April 2040 and is US dollar-based).

$84 million payable under the Senior Floating Rate Notes (DMTNP) (interest charged at 5.815 percent per annum; the notes are ZAR-based);

$59 million payable under the FirstRand Bank Limited demand facility and is ZAR-based;

$36 million payable under the Senior Fixed Rate Notes (DMTNP) (interest charged at 5.365 percent per annum; the notes are ZAR-based);

$16 million in interest payable under the $750 million 10-year bond (interest charged at 5.125 percent per annum; the bonds mature in August 2022 and are US dollar-based);

$8 million is payable under the Navachab Lewcor Mining contract loan (interest charged at 8.40 percent per annum; the loan matures in April 2015 and is Namibian dollar-based);

$7 million in interest payable under the $700 million 10-year bond (interest charged at 5.375 percent per annum; the bonds mature in April 2020 and are US dollar-based); and

$4 million in interest payable under the $300 million 30-year bond (interest charged at 6.50 percent per annum; the bonds mature in April 2040 and are US dollar-based).

164


Long-term debt

AngloGold Ashanti’s long-term debt increased to $2,602$2,750 million at December 31, 20102012 compared with $667$2,473 million at December 31, 2009.2011. As at December 31, 2010,2012, the Company’s long-term borrowings included:

Unsecured loans:

$994 million outstanding under the $700 million 10-year and $300 million 30-year rated bonds issued April 2010 (interest charged at 5.375 percent and 6.50 percent, respectively, per annum; the bonds mature in April 2020 and April 2040, respectively, and are US dollar-based);

$994 million outstanding under the $700 million 10 year and $300 million 30 year rated bonds issued April 2010 (interest charged at 5.375 percent and 6.50 percent, respectively, per annum; the bonds are repayable in April 2020 and April 2040, respectively, and are US dollar-based).
The fair value of $872 million outstanding under the Mandatory Convertible Bonds issued September 2010 (quarterly coupons are paid at 6 percent per annum; the bonds are convertible into ADS until their maturity in September 2013 and are US dollar-based). The principal of this bond will be settled by the issue of shares as mentioned earlier and only the interest payments will be settled in cash.
$630 million outstanding under the convertible bonds issued on May 22, 2009 (interest charged at 3.50 percent per annum; the bonds are convertible, at holders’ option, into ADS up to May 2014 and are US dollar-based).
$50 million outstanding under the $1 billion Syndicated loan facility issued in April 2010 (interest charged at Libor plus 1.750 percent per annum; the loan is repayable in April 2014 and is US dollar-based).

$745 million outstanding under the rated bonds issued July 2012 (interest charged at 5.125 percent per annum; the bonds mature in August 2022 and are US dollar-based);

$686 million outstanding under the convertible bonds issued on May 22, 2009 (interest charged at 3.50 percent per annum; the bonds are convertible, at holders’ option, into ADS up to May 2014 and are US dollar-based); and

$266 million outstanding under the A$600 million syndicated revolving credit facility (interest charged at BBSY plus 2 percent per annum; the loan matures in December 2015 and is Australian dollar-based).

Secured capital leases:

$14 million is repayable to Navachab Lewcor Mining Contract for equipment financed (interest charged at a rate of 8.4 percent per annum. Loans mature in April 2015 and are Namibian dollar-based. The equipment financed is used as security for these loans);

$39

$30 million is repayable to Turbine Square Two (Proprietary) Limited for buildings financed (interest charged at an implied rate of 9.8 percent per annum, lease payments are payable in monthly installments terminating in March 2022, are rand-based and the buildings financed are used as security for these loans);

$9 million is repayable to California First National Bank (Interest charged at an average rate of 2.4 percent per annum. Loans are repayable in monthly installments terminating in December 2019 and are US dollar-based. The equipment financed is used as security for these loans); and

$5 million is repayable to Caterpillar Financial Services Corporation (Interest charged at an average rate of 5.46 percent per annum. Loans are repayable in monthly installments terminating in January 2015 and are US dollar-based. The equipment financed is used as security for these loans).

$10 million is repayable to Caterpillar Financial Services Corporation (Interest charged at an average rate of 5.46 percent per annum. Loans are repayable in monthly installments terminating in January 2015 and are US dollar-based. The equipment financed is used as security for these loans.)

165


As at December 31, 2010,2012, AngloGold Ashanti’s total long-term debt, including the short-term portion maturing within 2010,2012, was made up as follows:

    $ (million) 

Unsecured loans

   2,6792,724  

Secured capital leases

   5873  

Total

   2,7372,797  

Less: Short-term maturities

   13547  

Long-term debt

   2,6022,750  

Debt maturities are scheduled as follows:

     
  $ (million) 
 
2011  135 
2012  8 
2013  877 
2014  685 
2015  2 
Thereafter  1,030 
 
Total
  2,737 
 

    $ (million) 

2013

   859  

2014

   703  

2015

   273  

2016

    

2017

    

Thereafter

   1,765  

Total

   3,609  

At December 31, 20102012, the currencies in which the borrowings were denominated were as follows:

    $ (million) 

United States dollars

   2,5853,107  
South African rands

Australian dollars

   146266  
Brazilian real

South African rands

   6210  
Total

Brazilian real

   2,737 

Namibian dollars

22  

Total

3,609 

Repayments of short-term and long-term borrowings amounted to $1,522$2 million and $120$215 million, respectively, in 2010.

2012.

At December 31, 2010,2012, AngloGold Ashanti had the following undrawn amounts available under its borrowing facilities:

    $ (million) 

Syndicated Loan Facility ($1,01.0 billion) US dollar

   9501,000  
FirstRand Bank Limited — US

Syndicated Loan Facility (A$600 million) – Australian dollar

   50359  
Absa

FirstRand Bank Limited — US dollar– rands

   4230  
FirstRand Bank Limited — rands

Total undrawn

   1391,389  
Standard Bank of South Africa Limited — rands28
Nedbank Limited — rands18
Absa Bank Limited — rands5
Total undrawn
1,232

166


AngloGold Ashanti had no other committed lines of credit as of December 31, 2010.
2012.

As of December 31, 2010,2012, the Company was in compliance with all debt covenants and provisions related to potential defaults.

AngloGold Ashanti, through its executive committee, reviews its short, medium and long-term funding, treasury and liquidity requirements and positions monthly. The board of directorsAudit Committee also reviews these on a quarterly basis at its meetings.

Commitments and contingencies

For a detailed discussion of commitments and contingencies, see note 2120 to the consolidated financial statements “Commitments and contingencies”.

As at December 31, 2010,2012, capital commitments(1) and contingencies can be summarized over the periods shown below as follows:

                     
  Expiration per Period 
  Total  Less than 1  1 - 3  4 - 5  Over 5 
Commitment amount  year  years  years  years 
(in millions) $  $  $  $  $ 
 
Capital expenditure (contracted and not yet contracted)(1)
  1,164   837   327       
Guarantees  2,864   15   791   786   1,272 
Other commercial commitments(2)
  538   398   81   41   18 
   
Total
  4,566   1,250   1,199   827   1,290 
 
(1)Including commitments through contractual arrangements with equity accounted joint ventures of $12 million (2009: $6 million).
(2)Excludes commitments through contractual arrangements with equity accounted joint ventures.

167


    Expiration per period 

Commitment

 

(in millions)

  Total
amount
$
   

Less than
1 year

$

   1 – 3
years
$
   4 – 5
years
$
   Over 5
years
$
 

Capital expenditure

   3,317    1,609    1,708    -     -  

(contracted and not yet contracted)(1)

          

Guarantees

   3,970    803    736    266    2,165 

Other commercial commitments(2)

   745    643    65    25    12 

Total

   8,032    3,055    2,509    291    2,177 

(1) Including commitments through contractual arrangements with equity accounted joint ventures of $749 million.

(2) Excludes commitments through contractual arrangements with equity accounted joint ventures.

Derivatives accounted for at fair value

In the normal course of its operations, the Company is exposed to gold and other commodity price, currency, interest rate, liquidity and non-performance risk, which includes credit risk. The Company is also exposed to certain by-product commodity price risk. In order to manage these risks, the Company may enter into transactions which make use of derivatives. The Company has developed a risk management process to facilitate, control and monitor these risks. The board approves and monitors this risk management process, inclusive of documented treasury policies, counterpart limits, controlling and reporting structures. The Company does not acquire, hold or issue derivatives for tradingspeculative purposes. During the year,Until 2010 the Company had utilized a number of derivatives including forward purchase and sale contracts and call and put options, to manage commodity price and foreign exchangeas part of its hedging of these risks. In order to provide financial exposure to the rising spot price of gold and the potential for enhanced cash flowcash-flow generation the Company completed its final tranche of the hedge buy-back program during 2010 and settled all the hedge bookforward gold and foreign exchange contracts that had been used by the Company in the past to manage those risks.

The estimated fair values of financial instruments are determined at discrete points in time based on relevant market information. The following table represents the change in fair value of all derivative financial instruments:

    $ (million) 

Fair value of derivatives at January 1, 20102012

   (2,366)
Derivatives realized or otherwise settled during the year2,975(93)  
Fair value of other new contracts entered into during the year
Change in fair value of derivatives during the year (1)
(780)

Option component of convertible bonds

   (1)
Embedded derivatives183  
Warrants on shares(4)

Fair value of derivatives at December 31, 2010

2012

   (175(10))
  
(1)Net losses on revaluation of derivatives.

The fair value of the on-balance sheet derivatives at December 31, 20102012 included:

    $ (million) 

Derivatives — current assets– non-current liabilities

   1(10)  

Derivatives — non-current assets– net liabilities

   (10)  
Derivatives — current liabilities
Derivatives — non-current liabilities(176)
Derivatives — net liabilities
(175)

The maturity of the fair value of derivatives as at December 31, 20102012 was as follows:

                     
  Fair value of derivatives at December 31 
  Maturity  Maturity  Maturity  Maturity    
  less than  1 - 3  4 - 5  excess of  Total Fair 
Source of fair value 1 year  years  years  5 years  value 
(in millions) $  $  $  $  $ 
 
Prices actively quoted               
Prices provided by other external sources       ��       
Prices based on models and other valuation methods(1)
  1      (176)     (175)
 
(1)Fair value of volatility-based instruments (i.e. options) are calculated based on market prices, volatilities, credit risk and interest rates.

    Fair value of derivatives at December 31 
Source of fair value  Maturity   Maturity   Maturity   Maturity   Total 
(in millions)  

less than

1 year

$

   

1 - 3

years

$

   

4 - 5

years

$

   

excess of

5 years

$

   

Fair

value

$

 

Prices actively quoted

   -     -     -     -     -  

Prices provided by other external sources

   -     -     -     -     -  

Prices based on models and other valuation methods(1)

   -     (9)     -     (1)     (10)  

(1)Fair value of volatility-based instruments (i.e. options) is calculated based on market prices, volatilities, credit risk and interest rates.

Recent developments

For a detailed discussion of recent developments, see note 3029 to the consolidated financial statements “Subsequent events”.

168


Related party transactions

For a detailed discussion of related party transactions, see “Item 7B.: Related party transactions”.

Recently adopted accounting policies and pending adoption of new accounting standards

AngloGold Ashanti’s accounting policies are described in note 4 to the consolidated financial statements “Significant accounting policies”. Recently adopted accounting policies are described in note 2 to the consolidated financial statements “Accounting changes”. Recent pronouncements are described in note 4.27 to the consolidated financial statements “Recent pronouncements”.

Critical accounting policies

AngloGold Ashanti’s accounting policies are described in note 4 to the consolidated financial statements “Significant accounting policies”. The preparation of the Company’s financial statements in conformity with US GAAP requirerequires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. The following are considered to be the accounting policies that are most critical to the Company’s results of operations, financial condition and cash flows.

UsingUse of estimates and making of assumptions

The most critical accounting estimates upon which AngloGold Ashanti’s financial reporting depends are those requiring estimates of Proven and Probable Reserves, recoverable ounces there from,therefrom, and/or assumptions of future gold prices. Such estimates and assumptions affect the value of inventories (which are stated at the lower of average cost or net realizable value) and the potential impairment of long-lived assets and intangibles as detailed below. These estimates and assumptions also affect the rate at which depreciation and amortization are charged to earnings. On an ongoing basis, management evaluates its estimates and assumptions; however, actual amounts could differ significantly due to the ultimate conclusion of uncertainties.

Ore reserves and life-of-mines

AngloGold Ashanti estimates on an annual basis its Ore Reserves at its mining operations. There are a number of uncertainties inherent in estimating quantities of reserves, including many factors beyond the Company’s control. Estimates of Ore Reserves are based upon engineering evaluations of assay values derived from samplings of drill holes and other openings. Additionally, declines in the market price of gold may render certain reserves containing relatively lower grades of mineralization uneconomic to mine. Further, availability of permits, changes in operating and capital costs, and other factors could materially and adversely affect Ore Reserves. The Company uses its estimates of Ore Reserves to determine the unit basis for mine depreciation and closure rates, and to evaluate mine asset impairments. Changes in estimates of Ore Reserves could significantly affect these items. At least annually, the Company reviews mining schedules, production levels and asset lives in the Company’s life-of-mine planning for all of the Company’s operating and development properties. Significant changes in the life-of-mine plans may occur as a result of mining experience, new ore discoveries, changes in mining methods and rates, process changes, investment in new equipment and technology and gold prices. Based on the life-of-mine analysis the Company reviews its accounting estimates and adjusts depreciation, amortization, reclamation costs and evaluation of each mine for impairment where necessary. Accordingly, this analysis and the estimates made therein have a significant impact on the Company’s results of operations and financial condition.

Drilling and related costs

Drilling and related costs incurred on sites without an existing mine and on areas outside the boundary of a known mineral deposit that contain proven and probable reserves are recorded as exploration expenditures and are expensed as incurred.

Drilling and related costs incurred to define and delineate a residual mineral deposit that has not been classified as proven and probable reserves at a development stage or production stage mine are capitalized when management determines that there is sufficient evidence that the expenditure will result in a future economic benefit to the Company in the accounting period when the expenditure is made. Management evaluates whether or not there is sufficient geologic and economic certainty of being able to convert a residual mineral deposit into a proven and probable reserve at a development stage or production stage mine, based on the known geologicgeology and metallurgy, existing mining and processing facilities, operating permits and environmental programs. Therefore, prior to

169


capitalizing such costs, management determines that the following conditions have been met:

There is a probable future benefit;

a.There is a probable future benefit;
b.AngloGold Ashanti can obtain the benefit and control access to it; and
c.The transaction or event giving rise to it has already occurred.

AngloGold Ashanti can obtain the benefit and control access to it; and

The transaction or event giving rise to it has already occurred.

The Company understands that there is diversity in practice within the mining industry, in that some companies expense the drilling and related costs incurred to define and delineate residual mineral deposits that have not been classified as proven and probable reserves at a development stage or production stage mine. Had AngloGold Ashanti expensed such costs as incurred, net income, earnings per share and retained earnings would have been lower by approximately the following amounts:

             
  2010  2009  2008 
 
Net income ($ millions)  27   16   10 
Earnings per share (cents)(1)
  7   4   3 
 
Retained income — January 1 ($ millions)  86   70   60 
Retained income — December 31 ($ millions)  113   86   70 
 

      2012     2011     2010 

Net income ($ millions)

     34      10      27 

Earnings per share - basic(1) (cents)

     9      3      7 

Earnings per share - diluted(2) (cents)

     8      2      7 

Retained income – January 1 ($ millions)

     123      113      86 

Retained income – December 31 ($ millions)

     157      123      113 

(1)

Impact per basic and diluted earnings per common share.
Accounting for derivatives
The Company accounts for derivative contracts in accordance with the FASB ASC guidance for derivatives and hedging.
The guidance requires all contracts that meet the definition of a derivative to be recognized on the balance sheet as either assets or liabilities and recorded at fair value. Gains or losses arising from remeasuring derivatives to fair value at each reporting period are to be accounted for either in the income statement or in accumulated other comprehensive income, depending on the use and designation of the derivative and whether it qualifies for hedge accounting. The key criterion, which must be met in order to qualify for hedge accounting, is that the derivative must be highly effective in offsetting the change in the fair value or cash flows of the hedged item.
Contracts that meet the criteria for hedge accounting are designated as the hedging instruments hedging the variability of forecasted cash flows from capital expenditure and the sale of production into the spot market, and are classified as cash flow hedges. Where a derivative qualifies as the hedging instrument in a cash flow hedge, changes in fair value of the hedging instruments, to the extent effective, are deferred in accumulated other comprehensive income and reclassified to earnings as product sales or as an adjustment to depreciation expense pertaining to capital expenditure, when the hedged transaction occurs. The ineffective portion of changes in fair value of the cash flow hedging instruments is reported inper common share.

(2)Impact per diluted earnings as gains or losses on non-hedge derivatives in the period in which they occur.

All other contracts not meeting the criteria for the normal purchases and sales or hedge accounting, as defined in the FASB ASC guidance, are recorded at their fair market value, with changes in value at each reporting period recorded in earnings as gains and losses on non-hedge derivatives.
The estimated fair values of derivatives are determined at discrete points in time based on relevant market information. These estimates are calculated with reference to the market rates using industry standard valuation techniques.
AngloGold Ashanti does not acquire, hold or issue derivative instruments for trading purposes. A number of products, including derivatives, are used to manage commodity price, interest rate and foreign exchange risks that arise out of the Company’s core business activities. Forward purchase and sale contracts and call and put options have been used by the Company to manage its exposure to gold and other commodity prices, interest rate and currency fluctuations.
See “Item 5E.: Off-balance sheet arrangements” for a description of accounting treatment of the normal purchase and normal sale exempt contracts.

170

per common share.


Revenue recognition
AngloGold Ashanti’s revenues are derived primarily from the sale of gold produced at its mines. Revenue from product sales is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the seller’s price to the buyer is fixed or determinable and collectability is reasonably assured. Gold is a liquid commodity that is dealt with on the international markets, and gold produced by the Company’s mining operations is processed to saleable form at various precious metals refineries.
Contingencies

AngloGold Ashanti accounts for contingencies in accordance with the FASB ASC guidance for contingencies. It requires the recording of an estimated loss for a loss contingency when information available indicates that it is probable that an asset has been impaired or a liability has been incurred, and the amount of the loss can be reasonably estimated. Accounting for contingencies such as legal and income tax matters requires the use of judgments to determine the amount to be recorded in the financial statements. By their nature, contingencies will only be resolved when one or more future events occur or fail to occur, and typically, those events will occur a number of years into the future. The Company assesses such contingent liabilities, which inherently involves the exercise of significant management judgment and estimates of the outcome of future events. Also, see “Taxation” discussed below.

Impairment of long-lived assets

AngloGold Ashanti’s long-lived assets include property, plant and equipment, acquired properties, goodwill and other tangible assets. In assessing the potential impairment of its long-lived assets held for use, the Company must make assumptions regarding estimated future cash flows and other factors relating to the respective assets. To the extent that the carrying value of the long-lived asset as recorded in the consolidated financial statements exceeds the undiscounted cash flows associated with these assets, an impairment charge is recognized in the consolidated financial statements based on the fair value of the asset. The Company performs impairment tests for goodwill at least annually during the fourth quarter and whenever certain indicators of impairment exist. Impairment calculation assumptions are included in notes to the consolidated financial statements Note 5 - “Costs and expenses”.

Taxation

AngloGold Ashanti follows the liability method of accounting for deferred taxation whereby the Company recognizes the tax consequences of temporary differences by applying current statutory tax rates applicable to future years to differences between financial statement amounts and the tax bases of certain assets and liabilities. Changes in deferred tax assets and liabilities include the impact of any tax rate changes enacted during the year. Deferred tax is estimated at the future average anticipated taxation rates at which temporary differences are expected to reverse. Future average anticipated taxation rates are determined from revenue and expenditure outlined in life-of-mine business plans that are revised annually. When a deferred tax asset arises the Company reviews the asset for recoverability and establishes a valuation allowance where the Company determines it is more likely than not that such an asset will not be realized. These determinations are based on the projected realization of tax allowances and tax losses. If these tax assets are not to be realized, an adjustment to the valuation allowance would be required, which would be charged to income in the period that the determination was made.

If the Company determines that it would be able to realize tax assets in the future in excess of the recorded amount thereof, an adjustment to reduce the valuation allowance would be recorded as a credit to income in the period that the determination is made. Management classifies taxes payable based on the likelihood of the amount required to be settled within twelve months, which are then reported within current liabilities. All other taxes payable are recorded within non-current liabilities.

Provision for environmental rehabilitation

AngloGold Ashanti’s mining and exploration activities are subject to various laws and regulations governing the protection of the environment. The Company recognizes management’s best estimate for asset retirement obligations in the period in which they are incurred. Actual costs incurred in future periods could differ materially from the estimates. Additionally, future changes to environmental laws and regulations, life of mine estimates and discount rates could affect the carrying amount of this provision. Changes in Mineral Reserves could similarly affect the useful lives of assets depreciated on a straight-line-basis, where those lives are limited to the life of mine.

171


Discounted closure liabilities (excluding joint ventures) increased from $653 million in 2011 to $758 million in 2012. This change is largely attributable to a change in mine plans resulting in accelerated cash flows, change in economic assumptions and discount rates.

Share-based payments
AngloGold Ashanti issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company’s estimate of the shares that will eventually vest and adjusted for the effect of non market-based vesting conditions.
Fair value is measured using the Black-Scholes pricing model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioral considerations.
Pension plans and post-retirement medical aid obligations
The determination of AngloGold Ashanti’s obligation and expense for pension and provident funds, as well as post-retirement health care liabilities, depends on the selection of certain assumptions used by actuaries to calculate amounts. These assumptions are described in Note 26 to the consolidated financial statements “Provision for pension and other post-retirement benefits” and include, among others, the discount rate, the expected long-term rate of return of plan assets, health care inflation costs and rates of increase in compensation costs. While the Company believes that these assumptions are appropriate, significant changes in the assumptions may materially affect pension and other post-retirement obligations as well as future expenses, which may result in an impact on earnings in the periods that the changes in the assumptions occur.
The main assumptions for 2010 relating to the most significant defined benefit plan were the discount rate, the expected return on plan assets and the compensation and pension plan inflation rates. The discount rate was determined using the South African bond yield rate (on the “benchmark” R186 bond) as a guide and adjusted for the taxation effects on pension plans.
The assumed level of salary increases relative to inflation was advised by the AngloGold Ashanti directors as well as the AngloGold Ashanti Human Resources department. The expected return on plan assets were based on the historical market performance of the underlying assets. For inflation targets the published Consumer Price Index (CPI) by the Department of Statistics as well as the South African Reserve Bank inflation target were used as a guide. Pension increases were assumed to be at 90 percent of the assumed inflation rate, based on the respective Fund’s pension increase policy.
Effects on results of operations
Company and plan participants’ contributions to the defined benefit funds are disclosed in note 26 to the consolidated financial statements “Provision for pension and other post-retirement medical benefits”. The total Company contributions to defined contribution plans for the years ended December 31, 2010, 2009 and 2008 amounted to $64 million, $53 million and $49 million, respectively.
Change in pension trends
The trend of the long-term expected return on the plan assets is lower at 9.99 percent for the year ended December 31, 2010 compared to 10.63 percent for the same period in 2009. The expected return on the defined benefit plan assets for 2010 amounted to $29 million compared to the actual 2010 return of $40 million. The long-term compensation and pension inflation increases estimated in 2009 at 7.5 percent and 4.95 percent, respectively, have decreased to 7.25 percent and 4.73 percent, respectively, which is in line with current economic indicators.
Sensitivity analysis
It is not the policy of AngloGold Ashanti to consider the sensitivity of the accounting figures to different assumptions. The actual short-term salary inflation rate used for the 2010 valuation was a rate of 7.5 percent and the long-term salary inflation rate was 7.25 percent, which is in line with the actual average increases granted and expected future increases. For each 1 percent point variance in the actual return on the plan assets, the value in growth will vary by $3 million.

172


Ore on Leach Pads

The recovery of gold from certain oxide ores is achieved through the heap-leaching process. Under this method, ore is placed on leach pads where it is permeated with a chemical solution, which dissolves the gold contained in the ore. The resulting “pregnant” solution is further processed in a process plant where the gold is recovered. For accounting purposes, costs are added to leach pads based on current mining costs, including applicable depreciation, depletion and amortization relating to mining operations. Costs are removed from the leach pad as ounces are recovered in circuit at the leach plant based on the average cost per recoverable ounce of gold on the leach pad.

pad.

The engineering estimates of recoverable gold on the leach pads are calculated from the quantities of ore placed on the pads (measured tons added to the leach pads), the grade of ore placed on the leach pads (based on assay data) and a recovery percentage (based on metallurgical testing and ore type). Leach pad production cycles vary from several months to multiple years dependantdependent on the height of the heap leach pad. The increased height of the pad and the resultant associated lengthy transport time of the solution to the internal collection ponds from which the pregnant solution is pumped significantly increase the time from placement of ore to the ultimate gold recovery.

Although the quantities of recoverable gold placed on the leach pads are reconciled by comparing the grades of ore placed on pads to the quantities of gold actually recovered (metallurgical balancing), the nature of the leaching process inherently limits the ability to precisely monitor recoverability levels. As a result, the metallurgical balancing process is constantly monitored and the engineering estimates are refined based on actual results over time. Historically, AngloGold Ashanti’s operating results have not been materially impacted by variations between the estimated and actual recoverable quantities of gold on its leach pads. For operations with long-term leach production cycles, variations in recovery estimates from new metallurgical data or production variances would be accounted for as an adjustment to the recoverable ounces and the average cost per recoverable ounce of gold on the leach pad. Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis. The ultimate recovery of gold from a pad will not be known until the leaching process has been concluded.

The costs of materials currently contained on the leach pad are reported as a separate line item. As at December 31, 20102012 and 2009, $912011, $128 million and $40$98 million, respectively, was classified as short-term as the Company expects the related gold to be recovered within twelve months. The short-term portion of materials on the leach pad is determined by multiplying the average cost per ounce in inventory by the expected production ounces for the next twelve months. Heap-leach pad inventory occurs in two forms: (1) gold recoverable but yet to be dissolved (i.e. gold still in the ore), and (2) gold recoverable from gold dissolved in solution within the leach pad (i.e. pore water). This estimate calculation was used in determining the short-term portion of materials on the leach pad as at December 31, 2010.2012. As at December 31, 2010, $3312012, $445 million was classified as long-term compared with $324$393 million as at December 31, 2009.

1732011.


5C.

RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.

Research and development expenditure included in the income statement amounted to $9 million, $1 million and $4 million $3 millionduring 2012, 2011 and $1 million during 2010, 2009 and 2008 respectively.

5D.

TREND INFORMATION

Outlook

For a discussion of trends affecting AngloGold Ashanti’s business and operations, see “Item 5A.: Gold production for 2011 is forecast to be between 4.55 million and 4.75 million ounces. Our production outlook is subject to, among other things, unplanned stoppages and safety-related interventions and the stability and availability of power in South Africa and other operational risks generally, which may affect production. See “Certain Forward-Looking Statements” which are included in this annual report.

Capital expenditure is expected to be approximately $1.5 billion to $1.6 billion in 2011 (2010: $1,015 million), of which 37 percent relates to South Africa, 26 percent to Continental Africa, 26 percent to the Americas and 10 percent to Australasia.
Operating Results – Key factors affecting results”.

5E.

OFF-BALANCE SHEET ARRANGEMENTS

AngloGold Ashanti does not engage in off-balance sheet financing activities, and does not have any off-balance sheet debt obligations, special purpose entities or unconsolidated associates. The most significant off-balance sheet item is the unaccrued future rehabilitation obligations, of which is discussed below. Normal purchase and normal sale exempt contracts which classified as an off-balance sheet item were redesignated as non-hedge derivatives during 2009.

Normal purchase and normal sale exempt contracts
During 2009, Gold derivative positions to the value of $797 million were accelerated and settled as part of a hedge buy back exercise. Of these accelerated settlements, the majority, being $580 million, were previously designated as NPSE contracts, allowing them to be accounted for off-balance sheet in prior periods. A further $217 million was also incurred in accelerating the cash settlement of existing non-hedge derivative contracts. However, as a result of the accelerated cash settlement of the NPSE contracts during July 2009, the provisions of the FASB ASC guidance for derivatives and hedging, necessitated a review of the continuing designation of, and accounting treatment for, the remaining NPSE contracts that were not part of the accelerated settlement. Management concluded, in accordance with the guidance for derivatives and hedging, to re-designate all remaining NPSE contracts as non-hedge derivatives and to account for such contracts at fair value on the balance sheet with changes in fair value accounted for in the income statement.
During 2010, all the contracts that were previously designated as NPSE were closed out and the Company completed the final phase of the acceleration and settlement of its hedge book.
Future rehabilitation liability
The unaccrued portion of the future rehabilitation liability is an off-balance sheet obligation. obligations.

See note 2019 to the consolidated financial statements “Provision for environmental rehabilitation”.

174


5F.

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

As at December 31, 20102012 AngloGold Ashanti had the following known contractual obligations:

                     
      Less than  1-3  3-5  More than 
Contractual Obligations Total  1 year  years  years  5 years 
(in millions) $  $  $  $  $ 
 
Long-term debt obligations including interest(1)
  3,935   252   1,146   829   1,708 
Capital lease obligations  92   10   19   15   48 
Operating lease obligations  27   18   8   1    
Purchase obligations                    
- Contracted capital expenditure(2)
  176   176          
- Other purchase obligations(3)
  538   398   81   41   18 
Environmental rehabilitation costs(4)
  2,512   84   48   67   2,313 
Derivatives(5)
  176         176    
Pensions and other post retirement medical obligations(6)
  194   16   35   35   108 
Uncertain taxes(7)
  52      46      6 
 
Total
  7,702   954   1,383   1,164   4,201 
 

Contractual obligations                       
   Total  Less than
1 year
   1-3  3-5   More than
5 years
 
          years  years     
(in millions)  $  $   $  $   $ 

Long-term debt obligations including interest(1)

   4,946   1,008    1,256   205    2,477 

Capital lease obligations

   96   20    31   14    31 

Operating lease obligations

   32   22    5   2    3 

Purchase obligations

        

- Contracted capital expenditure(2)

   1,075   1,075    -    -     -  

- Other purchase obligations(3)

   745   643    65   25    12 

Environmental rehabilitation costs(4)

   2,984   40    89   128    2,727 

Derivatives(5)

   (10  -     (9  -     (1

Pensions and other post retirement medical obligations(6)

   197   14    29   32    122 

Uncertain taxes(7)

   53   15    26   -     12 

Total

   10,118   2,837    1,492   406    5,383 

(1)

Interest calculations are at the rate existing at the year end. Actual rates are set at floating rates for some of the debt (Refer Note 1918 of Item 18). Certain of these obligations will be settled by the issue of equity, refer item 5Bto “Item 5B.: Liquity and capital resources.resources”.

(2)

Represents contracted capital expenditure for which contractual obligations exist. Amounts stated include commitments of equity accounted joint ventures.

(3)

Other purchase obligations represent contractual obligations for mining contract services, purchase of power, supplies, consumables, inventories, explosives and activated carbon. Amounts stated exclude purchase obligations of equity accounted joint ventures.

(4)

Operations of gold mining companies are subject to extensive environmental regulations in the various jurisdictions in which they operate. These regulations establish certain conditions on the conduct of operations by AngloGold Ashanti. Pursuant to environmental regulations, AngloGold Ashanti is also obligated to close theirits operations and reclaim and rehabilitate the lands upon which it conducted its mining and gold recovery operations. The present estimated closure costs at existing operating mines and mines in various stages of closure are reflected in this table. For more information of environmental rehabilitation obligations, see “Item 4B.: Business overview — Sustainable development - Mine site rehabilitation and closure” and “Item 4B.: Environment, communityBusiness overview - Environmental, health and human rights”safety matters”. Amounts stated include a total estimated liability of $54$61 million in respect of equity accounted joint ventures.

(5)

Estimated fair value of all derivatives. Also see “Item 5B.: Liquidity and capital resources Derivatives accounted for at fair value”. Amounts stated include derivatives of equity accounted joint ventures. Warrants on shares of $1 million dollars not included in derivatives total.

(6)

Represents payments for unfunded plans or plans with insufficient funding.

(7)

Certain of the uncertain tax positions will prescribe in 2014.2013, 2014 and 2015.

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ITEM 6: DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

6A.

DIRECTORS AND SENIOR MANAGEMENT

Directors

AngloGold Ashanti has a unitary board structure which comprises two executive directors and eightten non-executive directors. Certain information with respect to AngloGold Ashanti’s directors as at December 31, 20102012 is set forth below:

           
        Year first
Name Age Position appointed(1)
 
Mark Cutifani  52  Executive director and chief executive officer  2007 
Srinivasan Venkatakrishnan  45  Executive director, and chief financial officer  2005 
Tito T Mboweni(3)
  51  Independent non-executive director and chairman  2010 
Thokoana J. (James) Motlatsi(4)(5)
  59  Independent non-executive director and deputy chairman  1998 
Frank B. Arisman(2)
  66  Independent non-executive director  1998 
Rhidwaan Gasant(2)
  51  Independent non-executive director  2010 
William (Bill) A Nairn  66  Independent non-executive director  2001 
Lumkile W (Wiseman) Nkuhlu(2)
  66  Independent non-executive director  2006/2009 
Ferdinand Ohene-Kena  74  Independent non-executive director  2010 
Sipho M Pityana  51  Independent non-executive director  2007 
 

Name  Age  Position  Year first
appointed (1)

Mark Cutifani

  54  Executive director and chief executive officer  2007

SrinivasanVenkatakrishnan

  47  Executive director, and chief financial officer  2005

Tito T Mboweni(3)

  53  Independent non-executive director and chairman  2010

Frank B. Arisman(2)

  68  Independent non-executive director  1998

Rhidwaan Gasant(2)

  53  Independent non-executive director  2010

Nozipho January-Bardill (2)

  62  Independent non-executive director  2011

Michael J. Kirkwood

  65  Independent non-executive director  2012

William (Bill) A Nairn

  68  Independent non-executive director  2001

Lumkile W (Wiseman) Nkuhlu(2)

  68  Independent non-executive director  2006/2009

Ferdinand Ohene-Kena

  76  Independent non-executive director  2010

Sipho M Pityana(4)

  53  Independent non-executive director  2007

Rodney J. Ruston

  62  Independent non-executive director  2012

(1)

Directors who do not have a contract of employment with the company (non-executive directors) serve for a period of three years unless re-elected. At each annual general meeting, directors appointed since the previous annual general meeting are required to retire, but are eligible for re-election. In addition, one-third of the non-executive directors (rounded down to the next whole number), must retire according to seniority or by lot but may be re-elected.

 
(2)

Member of the auditAudit and corporate governanceCorporate Governance committee.

(3)

Appointed as chairman with effect from June 1, 2010.

(4)

Appointed as deputy chairman withWith effect from May 1, 2002.

(5)Resigned from the board effective February 17, 2011.19, 2013 S. Pityana is no longer independent, refer Item 7B.: - “Related Party Transactions”.

EXECUTIVE DIRECTORS
Mr M Cutifani (52) (Australian),
BE (Min. Eng)

Chief executive officer
Mark Cutifani was appointed to the board of AngloGold Ashanti on September 17, 2007 and as chief executive officer on October 1, 2007. He is chairman of the Executive Committee and a member of the Transformation and Human Resources Development, Safety, Health and Sustainable Development, Investment, Party Political Donations, Risk and Information Integrity committees. He attends Audit and Corporate Governance Committee meetings as an invitee.
Mark has considerable experience across several mining sectors and operating jurisdictions, having worked extensively in the gold, coal and base metals industries since 1976 in the Americas, Africa, Australia and the Asia Pacific regions. Prior to joining AngloGold Ashanti, he held the position of chief operating officer at CVRD Inco, a Toronto-based company, where he was responsible for Inco’s global nickel business. He is currently Vice-President of the South African Chamber of Mines.
Mr S Venkatakrishnan (Venkat) (45) (British),
BCom, ACA (ICAI)

Chief financial officer
Venkat joined AngloGold Ashanti on July 1, 2004 from Ashanti Goldfields Company Limited (Ashanti) where he was Chief Financial Officer until that company’s merger with AngloGold Limited in May 2004. He was appointed to the board on August 1, 2005, is a member of the Executive, Investment and Risk and Information Integrity committees and is invited to attend meetings of the Audit and Corporate Governance Committee.
Venkat has extensive financial experience, having been a director in the reorganisation services division of Deloitte & Touche in London prior to joining Ashanti in 2000.

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NON-EXECUTIVE CHAIRMAN:


NON-EXECUTIVE DIRECTORS
Mr TT Mboweni (51) (South African),
(53)

BA, MA (Development Economics)

Chairman and independent non-executive director

Tito Mboweni was appointed to the board and as chairman of AngloGold AshantiChairman on June 1, 2010. Mr MboweniHe is chairman of the Nominations and Transformation and Human Resources Development committees and a member of the Investment, Remuneration, Financial Analysis and Party Political Donations committees. He has a long and outstanding record of public service. As LaborLabour Minister from 1994 to 1998, heTito was the architect of South Africa’s post-apartheid labor legislation which today continues to provide the basis for the mutually respectful labor relationships central to AngloGold Ashanti’s operational approach in South Africa. The past ten years have cemented his reputation as oneHe was the eighth Governor of the world’s foremostSouth African Reserve Bank from 1999 to 2009, and highly respected Central Bank governors.Chancellor of the University of the North from 2002 to 2005. He is also non-executive chairman of Nampak Limited and an international adviser to Goldman Sachs. Tito is a founder member of Mboweni Brothers Investment Holdings. He is also chairman of the Nominations Committeefund raising committee of the Nelson Mandela Children’s Hospital and isa trustee and chairman of the finance committee of the Thabo Mbeki Foundation. In December 2012, he was elected as a member of the Investment, Financial Analysis and Party Political Donations committees.

Dr TJ Motlatsi (59) (South African),
Hon DSoc Sc (Lesotho)

National Executive Committee of the African National Congress.

EXECUTIVE DIRECTORS:

Mr M Cutifani (54)

BE (Mining Engineering)

Deputy chairman and independent non-executiveChief Executive Officer

James Motlatsi

Mark Cutifani was appointed to the board of AngloGold Ashanti on AprilSeptember 17, 2007 and as Chief Executive Officer on October 1, 1998 and deputy chairman on May 1, 2002.

2007. He iswas chairman of the Transformation and Human Resources Development and the Party Political Donations committeesExecutive Committee and a member of the Social, Ethics and Transformation; Human Resources Development; Safety, Health and Sustainable Development, NominationsDevelopment; Risk and Remuneration committees.
JamesInformation Integrity; Party Political Donations Committee; and Investment Committees. Mark has substantialconsiderable experience in and knowledge of thegold mining, industry in general and of South Africa in particular. His associationhaving been associated with the industry since 1976. He has had responsibility across six countries, mining and marketing more than 25 commodities. Prior to joining AngloGold Ashanti, he was Chief Operating Officer at CVRD Inco, a Toronto-based company, where he was responsible for Inco’s global nickel business. Mr Cutifani left AngloGold Ashanti on March 31, 2012 to assume the CEO position at Anglo American plc. Mr AM O’Neill (who was appointed to the board of directors on February 20, 2013) and Mr S Venkatakrishnan will be acting CEOs until such time as a suitable replacement is found.

Mr S Venkatakrishnan (Venkat) (47)

BCom, ACA (ICAI)

Chief Financial Officer

Venkat joined AngloGold Ashanti on July 1, 2004, having been chief financial officer at Ashanti Goldfields Company Limited (Ashanti) until that company’s merger with AngloGold Limited in May 2004. He was appointed to the board on August 1, 2005, is a member of the Executive, Risk and Information Integrity, and Investment committees, and is invited to attend meetings of the Audit and Corporate Governance Committee. Venkat has extensive financial experience, having been a director in the reorganization services division of Deloitte & Touche in London prior to joining Ashanti in 2000. He is a member of the audit committee of the World Gold Council and is a member of the Financial Reporting Investigation Panel, an advisory panel of the JSE. Venkat led the team that eliminated a 12 million ounce hedge book at an attractive average price, generating significant value for the company. He was also the key executive behind rebuilding the balance sheet through a series of successful and innovative financings that included debt, convertible debt and equity. His efforts to secure an international investment grade rating for AngloGold Ashanti and then to successfully defend that rating after a wave of industrial unrest in South Africa, spans more than 30 years in various positionshave helped AngloGold Ashanti retain a competitive cost of capital. As the lead executive on all M&A activity, he has successfully negotiated a series of acquisitions and disposals, including that of past presidentthe $1 billion sale of the National UnionBoddington stake to Newmont and the sale of Mineworkers. He is the executive chairmanTau Lekoa to Simmer & Jack. (Acquisitions have largely been bolt-on in nature and value accretive.) Venkat became joint acting CEO of TEBA Limited, a service organization primarily responsible for the recruitment of mineworkers for the South African mining industry.

James retired from the board on February 17, 2011.
AngloGold Ashanti effective April 1, 2013.

NON-EXECUTIVE DIRECTORS:

Mr FB Arisman (66) (American)(68)

BA (Finance),
MSc (Finance)

Independent non-executive director

Frank Arisman joined the board of AngloGold Ashanti on April 1, 1998. He serves on six board committees: Auditis chairman of the Financial Analysis and Corporate Governance,Investment Committees, and a member of the Safety, Health and Sustainable Development, Nominations, Remuneration,Development; Audit and Corporate Governance; Nominations; Risk and Information Integrity committeesIntegrity; and chairs the Investment and the Financial Analysis committees.

Remuneration Committees. Frank, who resides in the USA,United States, has a rich background in management and finance through his experiences at JPJ.P. Morgan where he held various positions prior to his retirement.

Mr R Gasant (51) (South African),
(53)

CA (SA), ACIMA

Independent non-executive director

Rhidwaan Gasant was appointed to the board of AngloGold Ashanti on August 12, 2010 and2010. He is chairman of the Risk and Information Integrity Committee as well asand a member of the Audit and Corporate Governance, Nominations and Financial Analysis Committees. He is the former Chief Executive Officer of Energy Africa Limited and a former finance director of Engen Ltd and sits on the board of South African and international non-public companies in the MTN Group.

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He is currently chief executive officer of Rapid African Energy Holdings, a start-up oil and gas exploration company focused on Africa.


Mrs NP January-Bardill (62)

BA (UBCS), MA (Applied Linguistics)

Mr F Ohene-Kena (74) (Ghanaian),
MSc Engineering, DIC, ACSM

Independent non-executive director
Ferdinand (Fred) Ohene-Kena

Nozipho January-Bardill was appointed to the board of AngloGold Ashanti on JuneOctober 1, 2010. He is2011. She chairs the former Ghanaian Minister of MinesSocial, Ethics and Energy and is currently a member of the Ghana Judicial Council. He is the Chairman of the Ghana Minerals CommissionTransformation Committee and is a member of the President’s Economic Advisory Council. Audit and Corporate Governance, Safety, Health and Sustainable Development, Party Political Donations, Nominations and Transformation and Human Resources Development committees. She recently retired from the MTN Group where she served on several of the company’s subsidiary boards and was an executive director on its main board. She is a former South African Ambassador to Switzerland, Lichtenstein and the Holy See, and former Deputy Director General, Human Capital Management, and Head of the Foreign Service Institute in the then Department of Foreign Affairs (now the Department of International Relations and Co-operation). She is the founder and executive director of Bardill & Associates, a consulting company focusing on strategic communications, high-level government relations and stakeholder management. She also serves on the boards of Credit Suisse Securities, Johannesburg, Multi Motion Fuels (Pty) Ltd and the Health and Welfare SETA, which she chairs. She was reappointed to the United Nations Expert Committee on the Elimination of Racial Discrimination, Xenophobia and Related Intolerances for the period 2012-2016.

Mr Ohene-KenaMJ Kirkwood (65)

AB, Stanford, (Engineering Econosystems Management)

Independent non-executive director

Michael Kirkwood joined the board on June 1, 2012 and is a member of the Investment, Remuneration, Social, Ethics and Transformation and Nominations committees. He is a highly experienced and respected former international banker, having worked at the highest levels of Citigroup during his 30-year career with the bank. He is currently chairman of Circle Holdings plc, sits on the boards of UK Financial Investments Ltd and Eros International plc, and is senior advisor (former chairman) of Ondra Partners LLP.

Mr WA Nairn (68)

BSc (Mining Engineering)

Independent non-executive director

Bill Nairn was appointed to the board in 2000 as an alternate director and on May 16, 2001 as a permanent non-executive director. He chairs the Remuneration Committee and is a member of the Safety, Health and Sustainable Development,Development; Transformation and Human Resources Development and Nominations Committees.

Mr WA Nairn (66) (South African),
BSc (Mining Engineering)

Independent non-executive
Bill Nairn has been a member of the board of AngloGold Ashanti since January 1, 2000 and chairs the Safety, Health and Sustainable Development Committee. He is a member of five other committees: Transformation and Human Resources Development, Investment,Development; Investment; Party Political Donations, Nominations andDonations; Risk and Information IntegrityIntegrity; Nominations and Social, Ethics and Transformation committees. Bill, a mining engineer, has considerable technical experience, having been the group technical directorGroup Technical Director of Anglo American plc until 2004 when he retired from the company.
Having completed the three-year cooling-off period, he is now considered an independent non-executive director of AngloGold Ashanti.

Prof LW Nkuhlu (66) (South African),
(68)

BCom, CA (SA), MBA (New York University)

Independent non-executive director

Wiseman Nkuhlu was first appointed to the board on August 4, 2006.2006 and resigned on April 30, 2009. He has been thewas reappointed on June 1, 2009. He is chairman of the Audit and Corporate Governance Committee since May 5, 2007, having served as deputy chairman of the committee from August 4, 2006. Heand also serves as a member of the Financial Analysis, Investment, Nominations, Party Political Donations, Remuneration,Risk and Information Integrity, Safety, Health and Sustainable Development, Social, Ethics and RiskTransformation, Party Political Donations, and Information Integrity, and the Financial AnalysisRemuneration committees.

Wiseman, a respected South African academic, educationist, professional and business leader, served as Economic Adviser to the former President of South Africa, Mr Thabo Mbeki, and as Chief Executive of the Secretariat of the New Partnership for Africa’s Development (NEPAD) from 2000 to 2005. From 1989 to 2000, he served as a director onto a number of major South African companies, including Standard Bank, South African Breweries, Old Mutual, Tongaat Hulett, BMW and JCI. Wiseman was President of the South African Institute of Chartered Accountants from 1998 to 2000, and Principal and Vice Chancellor of the University of Transkei from 1987 to 1991. He is also a member of the board of Datatec Limited. He was elected President of the Geneva basedGeneva-based International OrganizationOrganisation of Employers (IOE) in May 2008 for a period of two years. He is currently a member of the Financial Crisis Advisory Groupboard of directors of Datatec Limited, Rothschild SA and the Ethics Institute of South Africa. He serves on the Audit and Risk Committee of Datatec Limited and is a trustee of the International AccountingFinancial Reporting Standards Board (IASB)Foundation.

Mr F Ohene-Kena (76)

MSc (Engineering), DIC and ACSM

Independent non-executive director

Ferdinand (Fred) Ohene-Kena was appointed to the Financial Accounting Standards Board (FASB).

board of AngloGold Ashanti on June 1, 2010. He is the former Ghanaian Minister of Mines and Energy and is currently a member of the Ghana Judicial Council. He is the chairman of the Ghana Minerals Commission and a member of the President’s Economic Advisory Council. Mr Ohene-Kena is a member of the Safety, Health and Sustainable Development; Transformation and Human Resources Development; and Nominations Committees.

Mr SM Pityana (51) (South African),
(53)

BA (Hons) (Essex), MSc (London), Dtech (Honoris) (Vaal University of Technology)Technology
)

Independent non-executive director

Sipho Pityana joined the board of AngloGold Ashanti on February 13, 2007 and assumed the chairmanship of the Remuneration Committee on August 1, 2008.2007. He is a memberthe chairman of the Safety, Health and Sustainable Development Committee and is a member of the Remuneration, Party Political Donations, Investment, Nominations, Financial Analysis, Risk and Information Integrity, Social, Ethics and Transformation and the Transformation and Human Resources Development Risk and Information Integrity and the Financial Analysis committees.Committees. Sipho has extensive experience in management and finance, and has occupied strategic roles in both the public and private sectors, including that of Director General of the national departments of both labor and foreign affairs. He was formerly a senior executive of Nedbank Limited and is currently the executive chairmanExecutive Chairman of Izingwe Holdings (Proprietary) Limited, a local empowerment group and a significant investor in mining, engineering, infrastructure and logistics, and AngloGold Ashanti’s BEE partner. He serves as a non-executive directorNon-executive Director on the boards of several other South African companies.

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Mr RJ Ruston (62)

MBA, Business, BE (Mining)

Board movements during 2010Independent non-executive director
Mr R P Edey retired as chairman and

Rodney Ruston was appointed to the board on January 1, 2012. He is a member of the Investment, Safety, Health and Sustainable Development, Risk and Information Integrity, Nominations and the Social, Ethics and Transformation committees. Rodney, a mining engineer, has over 35 years of experience in the resources industry. He is currently the chief executive of County Coal Limited, an Australian-listed company which he joined in June 2012. He was previously chief executive officer and president of North American Energy Partners Inc., a large Canadian mining and construction contracting company listed on the NYSE and the TSX.

Board and Executive Committee movements during 2012 and subsequent to year end

The following movements in the board atof directors, the conclusionExecutive Committee and the position of company secretary took place during the annual general meeting held on May 7, 2010.

period January 1, 2012 to December 31, 2012, and subsequent to year-end:

Mr T T MboweniRJ Ruston was appointed as chairman and member ofto the board and with effect from January 1, 2012;

Mr F Ohene-KenaMJ Kirkwood was appointed as a member ofto the board with effect from June 1, 2010.

2012;

Mr R Gasant was appointed as a member ofRL Lazare retired from the boardcompany and as a member of the AuditExecutive Committee with effect on March 31, 2012;

Mr MD MacFarlane was appointed Executive Vice President – Business Strategy and Corporate Governancea member of the Executive Committee with effect from August 12, 2010.

In termsJune 11, 2012;

Mr D Noko was appointed Executive Vice President – Social and Sustainable Development and a member of the company’s memorandumExecutive Committee on June 15, 2012;

Ms L Eatwell retired as company secretary effective August 31, 2012;

Ms ME Sanz Perez, Group General Counsel was appointed company secretary with effect from September 1, 2012;

Mark Cutifani, Chief Executive Officer, resigned with effect from March 31, 2013;

Sipho Pityana was reclassified as a non-executive director with effect from February 19, 2013. Refer Item 7B.: “Related Party Transactions”;

Until a new Chief Executive Officer is appointed, the board has asked Chief Financial Officer, Srinivasan Venkatakrishnan, and articlesExecutive Vice President: Business and Technical Development, Tony O’Neill, to act as joint interim Chief Executives. Venkat will be responsible for all finance and corporate functions and Tony for all operations, projects (including ERP and procurement) and technical functions; and

Tony O’Neill was appointed an executive director to the board with effect from February 20, 2013.

EXECUTIVE COMMITTEE

Day-to-day management of association, therethe group’s affairs is no mandatory retirement age for non-executive directors. Non-executive directors do not hold service contracts withvested in the company.

In accordance withExecutive Committee, which is chaired by the articlesChief Executive Officer and comprises 13 members. The committee’s work is supported by country and regional management teams. Given the importance of association ofColombia to AngloGold Ashanti, all non-executive directors must retire at least once every three years by rotationit was decided to restructure the work in Colombia under a dedicated EVP to manage the creation of a new social and may be re-elected by shareholders. Atsustainable mining model that delivers on the annual general meeting held on May 7, 2010, Mr F B Arisman who retired by rotation and Prof L W Nkuhlu who retired in termsexpectations of the company’s articlespeople of association atColombia and which creates frameworks for our Colombian business to be successful over the annual general meeting made themselves availablelong term. Charles Carter has taken on the role of EVP – Colombia, reporting directly to the Chief Executive Officer, while retaining his accountability for re-electionAngloGold Ashanti’s investor relations and election respectivelyfinancial public relations portfolio. During the year under review, two new members, Mike MacFarlane and David Noko, were appointed by shareholders at the annual general meeting.
At the annual general meeting held on May 11 2011, Mr T T Mboweni, Mr F Ohene-Kena and Mr R Gasant who were all appointed to the board since the last annual general meeting, retired from the board in terms of the company’s articles of association, and having made themselves available for election to the board, were appointed by the shareholders. Mr W A Nairn and Mr S M Pityana who retired by rotation at the annual general meeting held on May 11, 2011 and having made themselves available for re-election, were re-elected by shareholders.
Board movements subsequent to year-end
On February 17, 2011, Dr T J Motlatsi retired from the board.
EXECUTIVE COMMITTEE
This committee, chaired by Mr Cutifani, the chief executive officer, is responsible for overseeing the day-to-day management of the company’s affairs and for executing the decisions of the board. The committee meets at least monthly and is actively involved in the strategic review of the company’s values, safety performance, operation and exploration profiles and financial status.
committee.

In addition to Mr M Cutifani and Mr S Venkatakrishnan, the two executive directors, the following make uppeople are members of the Executive Committee. The business experience

Ms I Boninelli (56)

MA (Psychology), post-graduate diploma in Labor Relations

Executive Vice President – People and functions of the executive committee members ofOrganizational Development

Italia Boninelli joined AngloGold Ashanti on October 15, 2010 as atSenior Vice President: Human Resources, Strategy and Change Management and was appointed to the Executive Committee on December 31, 2010 are as follows.

1, 2011 where she is responsible for the company’s people strategy, transformation and change management initiatives. Italia has more than 25 years’ experience in human resources, marketing communications, customer relationship management and business transformation, in a variety of industries including mining, manufacturing, healthcare and banking. She is a registered industrial psychologist with the Health Professions Council of South Africa, holds a masters degree in psychology and a post-graduate diploma in labor relations.

Dr CE Carter (48),
(50)

BA (Hons), DPhil, EDP

Executive Vice President — Business Strategy– Colombia and
Organizational Effectiveness Investor Relations

Charles Carter has worked in the mining industry in South Africa and the USUnited States since 1991, in a range of corporate roles with Anglo American Corporation, RFC Corporate Finance and AngloGold Ashanti. He has recently taken on executive responsibility for the company’s business in Colombia. Prior to this he was appointed Executive Vice President Business Strategy, in December 2007 and is responsible for corporate strategyCorporate Strategy and business planning, risk management and investor relations. In late 2009, he assumed additional responsibility for the group’s Human Resources function, and now also has oversight ofBusiness Planning, Risk Management, Project ONE’s ongoingOne implementation and integration into the business.

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Corporate Human Resources. He retains accountability for AngloGold Ashanti’s investor relations and financial public relations activities.


Mr RN Duffy (47),
(49)

BCom, MBA

Executive Vice President Continental Africa

Richard Duffy joined Anglo American in 1987 and in 1998 was appointed executive officerExecutive Officer and managing secretaryManaging Secretary of AngloGold. In November 2000, he was appointed headHead of business planningBusiness Planning and in 2004 assumed responsibility for all new business opportunities globally. In April 2005, this role was expanded to include Greenfieldgreenfields exploration. He was appointed to the Executive Committee in August 2005. Richard was appointed as Executive Vice President Continental Africa in July 2008.

Mr GJ Ehm (54),
(56)

BSc Hons, MAusIMM, MAICD

Executive Vice President Australasia

Graham Ehm has, since 1979, gained diverse experience in mine operations and project management, covering the nickel, phosphate, copper, uranium and gold sectors. He was appointed General Manager of Sunrise Dam Gold Minegold mine in 2000, Regional Head Australia in 2006 and Executive Vice President Australasia in December 2007. He assumed the role of Executive Vice President Tanzania on June 1, 2009 where he led a successful implementation of a turnaround strategy for the Geita mine. Inand during August 2010, he resumed the position of Executive Vice President Australasia.

Mr RW Largent (50),
(52)

BSc (Min. Eng)(Mining Engineering), MBA

Executive Vice President Americas

Ron Largent has been with AngloGold Ashanti since 1994.more than 30 years’ experience in the mining industry in both domestic and international operations as well as project management. He has served on the boardBoard of directors forDirectors of the Colorado Mining Association, Californiathe Nevada Mining Association and Nevadathe California Mining Association. In 2001, heHe joined the company in 1994 as manager of gold operations for CC&V. He was appointednamed vice president and general manager of the Cripple Creek & Victor Gold MineJerritt Canyon Joint Venture in 2000 and took up his current role asof CC&V in 2002. In January 2007, he was named Vice President for the North America Region and was appointed Executive Vice President —President: Americas in December 2007.

Mr RL Lazare (54),
BA, HED, DPLR, SMP

MD MacFarlane (56)

Executive Vice President – Business Strategy

Mike MacFarlane was appointed as a consultant responsible for leading the South Africa

Robbie Lazare joined Anglo American Gold Region’s Technology Innovation Consortium and Uranium Divisiondrive to a new deep level mining paradigm in 1982, working in a variety of management posts until 1999 when heSouth Africa. He was appointed general manager of TauTona. In December 2004, he was appointed an executive officer with responsibility for South African operations and in July 2008, Executive Vice President — Human Resources. From November 17, 2009, Robbie– Business Strategy on June 11, 2012 and is accountable for Business Strategy and Planning, Risk Management and Project ONE, while also retaining a strategic guiding role for the South Africa Region’s Technology Innovation Project. Mike has a broad global mining experience, having previously been responsible for Vale’s Canadian mining operations, while also working on developing its sustainability approach. He has also worked in Australia with Mount Isa Mines.

Mr D Noko (55)

MBA; Post Graduate Diploma in Company Direction; Higher National Diploma – Engineering

Executive Vice President – Social and Sustainable Development

David Noko joined the group on June 15, 2012 and assumed responsibility for social and sustainable development. The sustainability portfolio incorporates employee and community health and safety, environmental care, community development, global security, human rights and public affairs. Prior to joining AngloGold Ashanti, David served as the managing director of his consulting firm, Cela Corp (Pty) Limited. He also held a host of directorships in JSE listed companies and was assigned to leaduntil recently Deputy Chairman of the board of Harmony Gold Mining Company Limited. He has strong local and international business leadership knowledge and experience acquired through operating across various business platforms both within and outside the mining industry. His career includes, among others, the role of managing director, De Beers Consolidated Mines Ltd; Vice President, Chamber of Mines of South Africa; Chief Executive Officer, Air Chefs (Pty) Ltd and senior positions at Pepsi Cola international and South African Breweries Ltd. He is a strategy reviewmember of the South African operations and is now responsible for the South Africa region as Executive Vice President — South Africa Region.

Institute of Directors.

Mr AM O’NeillMP O’Hare (53),

BSc (Mining Engineering), MBA
Engineering (Mining)

Executive Vice President – South Africa Region

Mike O’Hare joined Anglo American in 1977, and has held a number of positions at various gold mining operations within the group. His roles have included General Manager of Kopanang (1993), Great Noligwa (2003), Head of Mining and Mineral Resource Management Underground (2006), Vice President: Technical Support (2008), Senior Vice President: Operations and Business Planning for South Africa (2010), and in 2011, he was appointed Executive Vice President – South Africa Region.

Mr AM O’Neill (55)

BSc Engineering (Mining), MBA

Executive Director – Business and Technical Development

Tony O’Neill joined AngloGold Ashanti in July 2008 as Executive Vice President Business and Technical Development, having consulted to the company prior to this on its asset portfolio strategy. He is a mining engineer with an MBA from the University of Melbourne. His extensive career in mining, since 1978 includedpredominantly in the rolesgold sector, has spanned almost 35 years, including his previous role as executive in charge of executive — operations at Newcrest Mining Limited and before that as the executive general manager forin charge of the gold atbusiness of Western Mining Corporation.

Mr TML Setiloane (51),
FAE, BSc (Mech Eng)

Tony is a recognized global business and technical expert in the mining industry. He has led strategy development and delivery of significant turnarounds in large, complex and geographically diverse mining businesses, capitalizing on his deep understanding of the resources sector, its inputs, and conditions for success. As Executive Vice President Business Sustainability
Thero Setiloane joined AngloGold in May 2003and Technical Development, Tony has had full accountability for a wide global portfolio ranging from Real Africa Holdings, where he had been an executive director. Heexploration, innovation and improvement, strategy, mergers and acquisitions, asset management, business knowledge and information technology, supply chain and safety and the environment. With effect from February 20, 2013, Tony was appointed an executive officerdirector and together with Venkat, he became a memberjoint acting CEO of AngloGold Ashanti’s Executive CommitteeAshanti effective April 1, 2013.

Ms ME Sanz (47)

BCom LLB, H Dip Tax, Admitted Attorney

Group General Counsel and Company Secretary

Maria (Ria) Sanz joined AGA in February 2006June 2011 having worked in a number of industries and major corporate organizations. She has held legal roles at Investec Bank, Basil Read, Afrox and Sappi. She was also Group Head of Sustainability at Sappi. She is responsible for Group legal services as Executive Vice President — Sustainabilitywell as compliance and was appointed Company Secretary in December 2007.

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September 2012.


Ms Y Simelane (47)

Ms YZ Simelane (45),
BA LLB, FILPA, MAP, EXMPM

EMPM

Senior Vice President Corporate Affairs

Yedwa Simelane joined AngloGold in November 2000 fromas Managing Secretary to the Mineworkers’ Provident Fund whereboard and Executive Committee. Prior to joining, she wasworked in financial services and gained experience in the senior manager of the Fund.retirement funding industry. She was appointed an executive officer in May 2004 and Vice President Government Relations in July 2008. In November 2009, she was appointedShe is currently Senior Vice President Corporate Affairs.

OFFICE OF THE COMPANY SECRETARY
Ms L Eatwell (56),
FCIS, FCIBM
Lynda Eatwell joined AngloGoldAffairs, a position she assumed in 2000 as assistant company secretary and was appointed company secretary in December 2006. She is responsibleNovember 2009, with responsibility for ensuring compliance with statutory andgovernment relations, corporate governance requirementscommunications, marketing and the regulations of the stock exchanges on which AngloGold Ashanti is listed. She also advises members of the board on their duties and responsibilities as directors.
group’s sustainability reporting.

COMPETENT PERSONS

As part of itits suite of annual reports, AngloGold Ashanti produces a Mineral Resource and Ore ReservesReserve statement and all the information in this report that relates to Exploration Results, Mineral Resources and Ore ReservesReserve is based on information compiled by the Competent Persons.

During the past decade, the company has developed and implemented a rigorous system of internal and external reviews of Exploration Results, Mineral Resources and Ore Reserves. A documented chain of responsibility exists from the Competent Persons at the operations to the Company’s Mineral Resource and Ore ReservesReserve Steering Committee. Accordingly, the Chairman of the Mineral Resources and Ore ReservesReserve Steering Committee, Mr V AVA Chamberlain, assumes responsibility for the Mineral Resource and Ore Reserve processes for AngloGold Ashanti and is satisfied that the Competent Persons have fulfilled their responsibility.

VA Chamberlain (48)
(50)

MSc (Mining Engineering), BSc (Hons) (Geology), MAusIMM

Vaughan has 25 years27 years’ experience and holds a Bachelor of Science (Honors) degree in Geology from the University of Natal and a Masters degree in Mining Engineering from the University of the Witwatersrand. He started his career with Anglo American Corporation in 1987 as a geologist at Western Deep Levels East Mine (now TauTona mine). He joined AngloGold in 1998 and currently holds the position of Senior Vice President — GeosciencesPresident: Geology and Metallurgy and is chairman of the Mineral Resources and Ore Reserves Steering Committee.

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6B.

COMPENSATION

6B. COMPENSATION
REMUNERATION COMMITTEE

Remuneration Committee

The Remuneration Committee comprises only independent non-executive directors and is responsible for evaluating the performance of executive directors and executive management, and for setting appropriate remuneration for such officerspurpose of the company.

committee is to discharge the responsibilities of the board relating to all compensation, including equity compensation of the company’s executives. The committee establishes and administers the company’s executive remuneration with the broad objective of aligning executive remuneration with company performance and shareholder interests, setting remuneration standards aimed at attracting, retaining and motivating a competent executive team, linking individual pay with operational and company performance in relation to strategic objectives; and evaluating compensation of executives including approval of salary, equity and incentive based awards. The committee also considers and makes recommendations to shareholders on non-executive director’s fees.

The performance of eachthe executive directorteam, including the executive directors, is assessedconsidered relative to the prevailing business climate and market conditions, as well as to annual evaluations of the achievement of key predetermined targets.performance objectives. Bonuses paid to executive directorsthe executives are a reflection of the performance of each of the directorsexecutives and the company as a whole.

The members and attendance atof the remuneration committee meetings during 2010 is2012 are reflected below:

Members

WA Nairn (Chairman)

FB Arisman

MJ Kirkwood (appointed October 1, 2012)

TT Mboweni

Prof LW Nkuhlu

SM Pityana

The following symbols are used to describe various aspects of meeting attendance:

Symbol Meaning
Director attended meeting.
XApologies received from director prior to meeting and leave of absence granted.
Attendance not required as director was not a member of the board or committee at the time of the meeting.
MembersFebruary 11March 9May 4August 5November 8
Mr SM Pityana (Chairman)
Mr FB Arisman
Mr RP Edey(1)
Dr TJ MotlatsiX
Prof LW Nkuhlu
By invitation
Mr M Cutifani
Mr TT Mboweni(2)
(1)Retired on May 7, 2010
(2)Appointed on August 1, 2010
All meetings of the committee are attended by the chief executive officer, chief financial officer and executive vice president — human resources,president: people and organizational development, except when their own remuneration or benefits are being discussed. The services

Remuneration principles

A holistic remuneration approach is followed which includes guaranteed pay (comprising base pay and benefits) and variable pay (which is separated into long term incentives and short term incentives). All elements play a key role in attracting and retaining our people. To support this philosophy we therefore:

Align the behaviors and performance of PWC (formerly PricewaterhouseCoopers) were retained to act as independent, expert advisers on executive remuneration.

Mr Pityana resigned as chairmanour senior management and executives with the strategic goals of the committee, on March 25, 2011organization, by offering competitive incentive plans with performance goals in orderplace that align both their and our shareholders’ interests;

Benchmark our executive remuneration against a comparator group of global and South African mining and multi-national companies. The comparator group is reviewed annually to remove any perceptionensure that may exist of a potential conflict of interest, given his association with the company’s BEE partner. A new chairman of the remuneration committee will be appointed by the board in May 2011.

Remuneration policy
AngloGold Ashanti aimsit continues to be appropriate;

Continue to encourage the leading gold mining companydevelopment of our employees to meet our business needs;

Ensure that our employees share in the medium-termsuccess of our company; and the leading mining company in the long-term. This ambitious growth objective requires

Continue to ensure that the company’scorrect governance frameworks are applied to all decisions and practices around remuneration strategies are sufficiently robust and innovative to attract people with the requisite skills on a global basis. throughout AngloGold Ashanti.

Remuneration policy

The remuneration policy is deviseddesigned to support this business strategy.

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allow us to compete in a global market where growth and scarcity of key skills remain an obstacle. The focus is therefore to attract and retain these key skills whilst recognizing that cost and shareholder value are fundamental drivers of the policy delivery.


The Remuneration Committee setsLinking pay and monitorsperformance for our executives is important and by having a large portion of executive remuneration forpay defined as at risk pay, we are ensuring executive compensation is aligned with the overall performance of the company, the regions and the business units and that the executives have an overriding focus on safety, as a large percentage of their variable pay is directly linked to keeping our employees safe.

Total reward

Over the past few years, the demand for executives with mining-related skills and experience has increased. Fewer people have entered the mining industry globally which limits the talent supply. The company operates in line witha highly competitive market for executives and the attraction and retention of talented and experienced executives is one of the key objectives of the executive remuneration policy. This policy has as its objectives to:

attract, reward and retain executives of the highest caliber;
align the behavior and performance of executives with the company’s strategic goals, in the overall interests of shareholders;
ensure the appropriate balance between short-, medium- and long-term rewards and incentives, with the latter being closely linked to structured company performance targets and strategic objectives that are in place from time to time; and
ensure that senior regional management is competitively rewarded within a global remuneration policy, which recognizes both local and global market practice.
In particular, the Remuneration Committee is responsible for:
the remuneration packages for executive directors of the company including, but not limited to, basic salary, performance-based short- and long-term incentives, pensions, and other benefits; and
the design and operation of the company’s executive share option and other share incentive schemes.
The following principles are applied to give effect to the remuneration policy and in determining executive remuneration:
to attract, reward and retain executives of the highest caliber, executive remuneration is benchmarked against a comparator group of global and selected South African mining and multi-national companies. The most recent benchmarking exercise conducted by independent consultants, PWC, indicates that the total remuneration of the executive directors is above the median of the comparator group, but the remuneration of the executive vice presidents (EVP) lags that of the peer group. Specific cash-based retention plans (settled after a three-year period) have been put in place to address this issue. However, a systemic adjustment of the remuneration levels for executives and senior management is required to ensure that the company’s remuneration levels are consistent with global pay levels in the mining sector, and that the company can compete effectively in the global market;
to ensure the appropriate balance between short-, medium- and long-term incentives, annual remuneration is a combination of base pay and short- and long-term incentives, with salary comprising about 35 percent — 45 percent of annual remuneration if the bonus and LTIP targets are partially achieved. Full achievement of the BSP and LTIP targets results in salary comprising between 24 percent and 35 percent of total annual remuneration; and
to align the behavior and performance of executives with the company’s strategic goals, all incentive plans align performance targets with shareholder interests. The quantum of the short-term incentive and the related bonus shares are determined with respect to current performance and the vesting of the LTIP awards is determined with respect to company performance over the three years following the date of grant.
During 2010, the key remuneration decisions taken were as follows:
As a result of the benchmarking exercise comparing the EVP with the global comparator group, adjustments in excess of the South African inflationary increases were made to close the gap between the EVP basic salaries and the comparator group median. The outcome of this review, as it affects EVP basic salaries, is explained further in this report.
A decision was taken not to renew the retention scheme but to ensure that going forward, the salaries of senior management and the executive are competitive against the local and international mining market.
Some steps were taken in 2010 to align with the King III requirements.approach. AngloGold Ashanti is not compliant with King III in the following areas:
Performance drivers on the STI (Short Term Incentive) scheme (BSP) and the LTI (Long Term Incentive) scheme (LTIP) are duplicated ie. EPS, resource to reserve conversion and safety. The duplicated drivers are key to success of the company and therefore, at least for now, the drivers will remain as is;
Executive contracts do not contain a shorter notice period in the event of dismissal;
AngloGold Ashanti does have compensation forhas designed its executive remuneration program to emphasize performance-based incentives that reward its executives in the event of severance as a result of a change in control. This is felt necessary in order to retain executives particularly during turbulent economic times and while the company undergoes significant change in numerous areas; and
AngloGold Ashanti does, in some countries, pay salaries which are on average above the median of the market. This is also felt necessary in order to retain the key skills already within the company and to attract talented individuals, particularly in those countries where there are shortages of critical skills.

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Executive remuneration
Executive Remuneration takes into account remuneration paid to the members of the Executive Committee. Executive directors’ remuneration and the remuneration paid to the other members of the Executive Committee currently comprise the following elements:
Basic salary;
Pensions and risk benefits;
Other benefits;
Retention award;
Short-term incentive; and
Long-term incentive.
Each component is described in more detail below:
Basic salaryis subject to annual review by the Remuneration Committee and is reviewed with reference to market data of a group of comparator companies in the South African and relevant international markets. The median of the comparator group is the primary point of reference for the remuneration policy. However, the transition from a primarily South African company to a global company has resulted in the actual remuneration of management below the executive director level, lagging significantly. The individual salaries of the executive management are reviewed annually in accordance with their own performance, experience, responsibility and company performance.
Pensions and risk benefits: There are a range of retirement funds to which the executive management belong, which is dependent on the country in which they work and the individual’s nationality. For example, the South African executive management belong to either the AngloGold Ashanti Pension Fund or the Evergreen Provident Fund. Executive management who are non-South African citizens but working in South Africa have the option of electing a retirement benefit in their country and currency of choice, in which case, the company contributes an amount equal to the contribution made for other AngloGold Ashanti executives. Death and disability cover reflects best practice amongst comparable employers in South Africa.
Other benefits: Executive management are members of an external medical aid scheme, which covers the individual and his/her immediate family.
Bonus Share Plan (BSP)is a short-term incentive plan under which award levels are determined with reference to the achievement of a set of stretched company and individual performance targets. For 2010, the company targets were based on performance measures including:
earnings per share (EPS);
gold production;
cost control; and
resource to reserve conversion.
A safety multiplier/penalty was also applied so that the safety record could be taken into account when determining the extent to which performance targets are achieved.
The weighting of the respective contribution of company and individual targets at the executive management level is 60 percent company and 40 percent individual.
The bonus paid comprises two separate parts:
a cash bonus, which may not exceed 50 percent of the maximum bonus allocated per level, is payable at the end of the relevant financial year; and
an equity bonus to the equivalent value of the cash bonus, settled by way of BSP share awards, which together with the cash bonus, may not exceed the maximum bonus.
The BSP awards vest over a two-year period and vesting is subject to the individual being in the employ of the group at the date of vesting. In respect of the BSP awards granted after January 1, 2008, 40 percent of the awards vest on the first anniversary from the date of grant and the remaining 60 percent of awards vest on the second anniversary from the date of grant. Provided that the individual has not exercised any BSP awards during the vesting period, he or she will be eligible to receive an additional 20 percent BSP awards on the third anniversary from the date of grant.

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The maximum bonus achievable under the BSP (expressed as a percentage of basic salary) is shown in the table below. For these purposes, basic salary includes offshore payments:
                 
              On target 
              BSP award 
              (face value 
  Maximum  On target  On target  at date of 
Position bonus  bonus  cash bonus  grant) 
 
Chief executive officer  160%  80%  40%  40%
Executive directors  140%  70%  35%  35%
Executive management  120%  60%  30%  30%
Other management  100%  50%  25%  25%
 
In respect of 2010, the performance targets imposed on BSP awards were achieved at a level of 62.3 percent. The payments made under the BSP in respect of the 2010 financial year to executive management are disclosed in this Remuneration Report.
In respect of the 2011 BSP awards, the performance targets to be satisfied will be based on the targets summarized above.
Cash payments, equal in value to the dividends which would have been paid had actual shares been issued during the vesting period, were made when the BSP awards granted in 2007, 2008 and 2009 vested during 2010.
Long-Term Incentive Plan (LTIP). The objective of the LTIP is to align the interests of the executive management with those of the company and the shareholders over the medium- to long-term.
Under the LTIP, the executive management are granted a right to receive shares in the company, subject firstly to performance conditions being achieved over the specified performance period and secondly to continued employment with the group.
The performance targets used for vesting of the LTIP awards are determined annually by the Remuneration Committee and link directly to the company’s strategy. The LTIP awards are granted with a three-year vesting period. For awards granted in 2009, the company targets were based on measures including:
EPS;
total shareholder return (TSR) against a comparator group of gold mining companies;
safety; and
resource generation.
LTIP awards will vest on the following basis for the 2009 and 2010 awards:
1.Earnings per share(30 percent weighting)
EPS growth of at least 2 percent, net of US inflation per year over the three-year vesting period. Partial vesting occurs at 2 percent growth per year and full vesting at 5 percent growth per year.
2.Total shareholder returns(30 percent weighting)
TSR relative to a group of global peer gold mining companies. For vesting of the 2009 and 2010 LTIP awards to occur, the company’s TSR has to be at least equal to the third place performer from the comparator group for partial vesting, and second or better for full vesting.
3.Strategic target(40 percent weighting)
The strategic target is divided into two parts:
i)Safety performance(20 percent weighting)
The company’s safety performance has become the primary strategic target from an operating perspective and it is essential that the company’s performance shows significant improvement. The target is a 20 percent year-on-year improvement in fatal injuries (FIFR) and in lost-time injuries (LTIFR) during the period. For partial vesting a minimum of a 10 percent improvement per year must be achieved.
ii)Reserve and resource ounce generation(20 percent weighting)
The target is at least 9 million ounces at the measured and indicated resource level, and 5 million ounces at the published reserves level for full vesting, and 7 million ounces and 3 million ounces respectively for partial vesting.

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In this context, partial vesting means that 50 percent of the weighted target is achieved (except in the case of TSR where partial vesting means a 40 percent achievement of target) while full vesting results in a 100 percent achievement. Achievement between partialspecific annual, medium and target results in vesting calculated on a straight line graph between these two points.
The value of awards which may be granted under the LTIP by reference to the face value of the awards as at the date of grant and expressed as a percentage of basic salary, is shown in the table below. In this table, “face value” means the value of the award at the current share price (i.e. share price x number of shares under award) assuming all performance criteria are met and the awards vest in full. Since the introduction of the LTIP awards, vesting has ranged from between 40 percent and 82 percent.
In this context basic salary includes offshore payments:
Maximum
Positionface value
Chief executive officer120%
Executive directors100%
Executive management80%
Other management80%
The LTIP awards granted in respect of the 2010 financial year, issued in 2011, to executive management are disclosed in this Remuneration Report under the Share Incentive Scheme section.
In respect of the LTIP awards granted in 2008 which vested during 2011, 82 percent of the award vested following the testing of the performance conditions. In making up the 82 percent, earnings per share with its 30 percent weighting and strategic targets with its 40 percent weighting were 100 percent vested (safety, 20 percent, and reserve and resource ounce generation, 20 percent). Of the 30 percent weighting for total shareholder return, only 12 percent vested.
In respect of the LTIP awards granted in 2011, the performance targets to be satisfied will be based on the targets summarized above and certain changes to the maximum face value or maximum expected value of awards for the chief executive officer, chief financial officer and executive vice presidents were proposed to and approved by shareholders on May 11, 2011.
At the discretion of the Remuneration Committee, a cash payment, equal in value to the dividends which would have been paid had actual shares been issued during the vesting period, will be made to employees to whom LTIP awards were granted, to the extent that these LTIP awards vest after the performance conditions have been tested.
Directors’ service contracts
Service contracts of executive directors are reviewed annually. Mark Cutifani, as chief executive officer, has a twelve-month notice period while the notice period for the chief financial officer Srinivasan Venkatakrishnan, is nine months. Executive vice presidents have a six-month notice period, while senior vice presidents and vice presidents have three-month notice periods. The contracts also provide for a payment of twenty-four months’ salary in the case of the chief executive officer; eighteen months in the case of the chief financial officer and twelve months in the case of other executive management, in the event of a material change in role, responsibilities or remuneration, including loss of employment, following a new shareholder assuming control of the company.
COMPENSATION OF EXECUTIVE DIRECTORS AND EXECUTIVE MANAGEMENT
Under the Listings Requirements of the JSE and as required by King III, from 2010, AngloGold Ashanti discloses compensation paid to its executive directors and its top three earners who are not executive directors, on an individual basis, while compensation paid to the remaining executive officers/executive management is disclosed in the aggregate.
The following table presents the compensation paid by AngloGold Ashanti to executive management during 2010 and 2009. long-term business goals.

Executive directors do not receive payment of directors’directors fees or committee feesfees.

Benchmarking

Our executives and travel allowances.

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non-executives are benchmarked against a global group of competitors. AngloGold Ashanti’s size and complexity as well as each individual executive’s role and personal performance are reviewed annually against the benchmark group from a base pay, benefits, guaranteed pay and variable pay perspective. The 2012 bespoke benchmark survey was completed by GRS/ Mercer. For the 2013 annual increases (awarded effectively January 2013) the benchmark group was modified, following on shareholder feedback, to a slightly smaller peer group of companies (11) that are more similar to AngloGold Ashanti in size and geographic spread.


Our salary benchmarks are targeted at the market median; where there is a shortage of specialist and/or key technical skills higher than the benchmark median is paid, typically targeting the 75th percentile.

Each executive’s role is individually sized to ensure the best match possible. The comparison is done on the same or similar roles irrespective of place of work (including a review of purchasing power parity between countries). Each component of remuneration (base salary, short-term incentives, long-term incentives and benefits) is analysed and compared with the benchmarks and the overall package is reviewed accordingly.

Retirement benefits/pension

Retirement benefits are granted to all executives. All new executives and employees receive retirement benefits under defined contribution plans. Legacy defined benefit plans remain in place for some executives. Contributions vary from those prescribed by the USA 401(k) defined contribution fund, to the legacy defined benefit plan.

EXECUTIVE DIRECTORS’ AND EXECUTIVE MANAGEMENT REMUNERATION

                                 
                          Pre-tax gain on share    
  Appointment(2)      Performance related  Pension scheme  Other  Encashed  options    
All figures in $000(1) From/To  Salary  payments(3)  contributions(4)  Benefits(4)  leave(5)  exercised(6)  Total 
Executive directors’ remuneration 2010
                                
M Cutifani Full year  1,567   1,170   286   47         3,070 
S Venkatakrishnan Full year  961   681   179   303         2,124 
       
       2,528   1,851   465   350         5,194 
 
                                 
 
Executive management (non-directors) — top three earners remuneration 2010
                                
Top earner 1 Full year  1,209   545   269   117         2,140 
Top earner 2 Full year  626   339   109   254      409   1,737 
Top earner 3 Full year  547   233   57   162      456   1,455 
       
       2,382   1,117   435   533      865   5,332 
 
                                 
 
Remainder of Executive management’s remuneration 2010 representing 5 executive managers
 Full year  2,627   1,501   360   720   19   389   5,616 
 
                                 
 
Total Remuneration 2010, comprising:
                                
Executive directors and Executive management (incorporating Top-three earners and remaining executive management)
      7,537   4,469   1,260   1,603   19   1,254   16,142 
 
                                 
 
Executive directors’ remuneration 2009
                                
M Cutifani Full year  1,294   910  228  76       2,508 
S Venkatakrishnan Full year  785   512  143  232    313   1,985 
       
       2,079   1,422   371   308      313   4,493 
 
Executive management’s remuneration 2009 representing 10 executive management
 Full year  4,488   2,029   537   1,208   47   2,430   10,739 
 
Total executive directors, and executive management remuneration 2009
      6,567   3,451   908   1,516   47   2,743   10,143 
 

2012

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  M Cutifani

  Full year       1,713     359     351     57     2,480     2,800(10)   5,280  

  S Venkatakrishnan(6)

  Full year       1,063     314     209     522     2,108     2,283(10)   4,391  

  Total executive directors

           2,776     673     560     579     4,588     5,083   9,671  

  Prescribed officers

                    

 I Boninelli

  Full year       591     118     62     3     774     -    774  

 CE Carter(6)

  Full year       684     156     71     291     1,202     1,058(10)   2,260  

 RN Duffy(6)

  Full year       755     106     148     326     1,335     -    1,335  

 GJ Ehm(6)

  Full year       688     119     62     175     1,044     -    1,044  

 RW Largent(6)

  Full year       827     177     191     356     1,551     1,711   3,262  

 RL Lazare(6)(7)

      March 31, 2012   173     320     30     374     897     1,243   2,140  

 M MacFarlane(5)

  From June 01, 2012       379     42     27     -     448     -    448  

 DC Noko(9)

  From June 15, 2012       299     56     37     275     667     -    667  

 MP O’Hare

  Full year       687     126     134     48     995     -    995  

 AM O’Neill(6)

  Full year       1,453     328     39     257     2,077     -    2,077  

 ME Sanz Perez(8)

  Full year       481     101     50     96     728     -    728  

 YZ Simelane

  Full year       427     73     83     14     597     -    597  

  Total Prescribed Officers

   7,444     1,722     934     2,215     12,315     4,012   16,327  

  Total executive director and management remuneration 2012

   10,220     2,395     1,494     2,794     16,903     9,095   25,998  

2011

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  M Cutifani

  Full year       1,735     1,150     317     634     3,836     -     3,836  

  S Venkatakrishnan

  Full year       1,074     609     163     411     2,257     -     2,257  

  Total executive directors

           2,809     1,759     480     1,045     6,093     -     6,093  

  Prescribed officers

                     

 I Boninelli

  From November 1, 2011       103     323     11     1     438     -     438  

 CE Carter

  Full year       704     332     75     201     1,312     353     1,665  

 RN Duffy

  Full year       712     335     147     222     1,416     172     1,588  

 GJ Ehm

  Full year       586     279     83     326     1,274     833     2,107  

 RW Largent

  Full year       671     313     42     259     1,285     -     1,285  

 RL Lazare

  Full year       707     634     138     567     2,046     1,001     3,047  

 MP O’Hare

  From June 1, 2011       357     287     71     534     1,249     284     1,533  

 AM O’Neill

  Full year       1,608     624     132     151     2,515     -     2,515  

 ME Sanz

  From June 13, 2011       232     197     24     106     559     -     559  

 TML Setiloane

      August 31, 2011   388     161     42     197     788     -     788  

 YZ Simelane

  Full year       440     194     83     23     740     720     1 460  

  Total Prescribed Officers

   6,508     3,679     848     2,587     13,622     3,363     16,985  

  Total executive director and management remuneration 2011

   9,317     5,438     1,328     3,632     19,715     3,363     23,078  

(1)

Where directors’ compensation is paid in South African rands, for the purposes of this annual report on Form 20-F, the rand values have been converted to US dollar using the following year-to-date average rate of exchange R7.3028:R8.1961:$ (2009: R8.38510:(2011: R7.2569:$).

(2)

Salaries are disclosed only for the period from or to which office was held.

(3)

In order to more accurately disclose remuneration received/receivable by executive directors and executive management, the tables above include theThe performance related payments calculated on the year’s financial results.

(4)

Includes health care and personal travel and retention payments.

(5)Pursuant to AngloGold Ashanti’s policy regarding the number of leave days that may be accrued, all surplustravel. Surplus leave days accrued are compulsorily encashed.automatically encashed unless work requirements allow for carry over.

(5)

M MacFarlane commutes between Canada and South Africa and the company carries the cost of flights and hotel accommodation in South Africa, these are excluded for reporting purposes.

(6)

Received retention bonuses.

(7)In 2009,

Mr VenkatakrishnanCash paid in lieu of LTIP for 2012.

(8)

Received the remainder of sign-on bonus in July 2012 (paid over 24 months).

(9)

Received a sign-on bonus.

(10)

These executives and prescribed officers applied all of the proceeds after tax from the sale of his share options to acquire 5,130 ordinary shares (2008: 4,569) in AngloGold Ashanti. Of the 92,452 share options exercised by the executive management, the proceeds from the sale of 48,595their options were used to acquire 16,911– Messrs Cutifani 51,692; Venkatakrishnan 42,157 and Carter 19,541 ordinary shares in AngloGold Ashanti (2008: of the 15,563 share options exercised by the executive management, the proceeds from the sale of 12,963 options were used to acquire 2,304 ordinary shares in AngloGold Ashanti).Ashanti.

Rounding of figures may result in computational discrepancies.

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NON-EXECUTIVE DIRECTORS’ COMPENSATION

The fees of non-executive directors are fixed by shareholders at the annual general meeting and, other than the fees they receive for their participation on board committees and allowanceallowances for travellingtraveling internationally to attend board meetings, non-executive directors receive no further payments from the company and are precluded from participation in the company’s share incentive scheme.

At the annual general meeting of shareholders held on May 11, 2011,10, 2012, shareholders approved an increase to the fees payable to non-executive directors.

This was to ensure that the remuneration of non-executive directors remains competitive in order to enable the company to attract and retain persons of the caliber required in order to make meaningful contributions to the company given its global spread and growth aspirations and having regard to the appropriate capability, skills and experience required.
A survey of fees paid by multi-jurisdictional companies to non-executive directors, including those in the mining industry, was commissioned by the company. The findings of the survey highlighted the disparity between the fees paid by the company (which tends to be lower) and international best practice (which tends to be higher).
The Remuneration Committee has recommended and the board has approved that the fees paid to non-executive directors be adjusted over a three year period, to accord with international best practice and to better align comparable reward across all directors, while at the same time taking into account where necessary the particular market dynamics of the jurisdictions from which directors are recruited. In order to achieve this, the proposed increases in fees to be paid to non-executive directors (for the first year of the three year period) as contemplated, range from 10 percent for the Chairman and non-South African directors residing outside of Africa, 15 percent for South African resident directors and 25 percent for non-South African directors residing in Africa. These increases were approved by shareholders on May 11, 2011.

The increases as approved by shareholders are shown below:

1.1Non-Executive Directors’ fees for six board meetings per annum
Current fee perIncreased fee per
1.1Board Meetingsannumannum
1.1.1South African resident ChairmanR1,520,300R1,672,330
1.1.2South African resident Deputy ChairmanR650,000R747,500
1.1.3South African resident directorsR270,000R310,500
1.1.4Non-South African resident directors who are resident in AfricaUS$33,750US$42,188
1.1.5Non-South African resident directors who are resident in jurisdictions other than AfricaUS$60,000US$66,000
1.2Allowance for attendance by non-executive directors at additional board meetings
Each non-executive director will be entitled to an allowance for each board meeting attended by such director, in addition to the six scheduled board meetings per annum, as follows:
Current fee perIncreased fee per
1.2Additional Board Meetingsmeetingmeeting
1.2.1South African resident ChairmanR78,000R85,800
1.2.2South African resident Deputy ChairmanR32,400R37,260
1.2.3South African resident directorsR16,000R18,400
1.2.4Non-South African resident directors who are resident in AfricaUS$2,000US$2,500
1.2.5Non-South African resident directors who are resident in jurisdictions other than AfricaUS$3,000US$3,300

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Non-Executive Directors’ fees for six board meetings per annum

            Board Meetings

 

  

Fees to  

May 31, 2012  

per annum  

  Fees from
June 1, 2012
per annum

South African resident Chairman

  R1,672,330    -

Chairman

  -    $251,325

South African resident director

  R310,500    $57,762

Non-South African resident director who is resident in Africa

  $42,188    $57,762
Non-South African resident director who is resident in jurisdictions other than Africa  $66,000    $69,000

Allowance for attendance by non-executive directors at additional board meetings

1.3Travel allowance to be paid to non-executive directors who travel from outside South Africa to attend board meetings
Each non-executive director who is not in South Africa and who travels to attend board meetings will be entitled to receive a travel allowance on the basis set out below. In addition to the travel allowance payable, the company will cover all accommodation and sundry costs. The travel allowance for directors outside South Africa who attend board meetings isEach non-executive director will be entitled to an allowance for each board meeting attended by such director, in addition to the six scheduled board meetings per annum, as follows:
Current fee perIncreased fee per
1.3Additional Board Meetingsmeetingmeeting
1.3.1South African resident directorsRnilRnil
1.3.2Non-South African resident who are resident in AfricaUS$6,000US$7,500
1.3.3Non-South African resident directors who are resident in jurisdictions other than AfricaUS$8,000US$8,800
2.1Board committee fees payable to non-executive directors
The fee paid to each non-executive director in respect of such director’s membership of a committee of the board will be increased with effect from June 1, 2011 on the basis set out below:
Current fee perIncreased fee per
2.1Board Committee Meetingsannumannum
Audit and Corporate Governance Committee
2.1.1Chairman — South African residentR160,000R184,000
2.1.2Member — South African residentR135,000R155,250
2.1.3Member — Non-South African resident who are resident in AfricaUS$16,875US$21,094
2.1.4Member — Non-South African resident who are resident in jurisdictions other than AfricaUS$25,315US$27,847
Other Committees (being Investment, Remuneration, Safety, Health and Sustainable Development, Transformation and Human Resource Development, Risk and Information Integrity and such other committees of the board as may be established from time to time)
2.1.5Chairman — South African residentR130,000R149,500
2.1.6Chairman — Non-South African resident who is resident in AfricaUS$16,250US$20,313
2.1.7Chairman — Non-South African resident who are resident in jurisdictions other than AfricaUS$25,000US$27,500
2.1.8Member — South African residentR110,000R126,500
2.1.9Member — Non-South African resident who is resident in AfricaUS$13,750US$17,188
2.1.10Member — Non-South African resident who is resident in jurisdictions other than AfricaUS$20,000US$22,000
2.2Fees payable to non-executive directors in respect of their attendance at meetings of committees of the board which meet on an ad hoc basis
Each non-executive director will be entitled to an allowance for each board committee meeting attended by such director in respect of those committees which meet on an ad hoc basis, including, the Financial Analysis committee, the Party Political Donations committee, the Nominations committee and any special purpose committee established by the board as follows:
Current fee perIncreased fee per
2.2Board Committee and Special Purpose Committeemeetingmeeting
2.2.1South African resident directorsR16,200R18,630
2.2.2Non-South African resident who are resident in AfricaUS$2,025US$2,531
2.2.3Non-South African resident directors who are resident in jurisdictions other than AfricaUS$3,000US$3,300

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            Additional Board Meetings

 

  

Fees to  

May 31, 2012  

per meeting  

  Fees from
June 1,  2012
per meeting

South African resident Chairman

  R85,800    -

Chairman

  -    $12,894

South African resident director

  R18,400    $3,465

Non-South African resident director who is resident in Africa

  $2,500    $3,465
Non-South African resident director who is resident in jurisdictions other than Africa  $3,300    $3,465

Travel allowance to be paid to non-executive directors who travel from outside South Africa to attend board meetings

Each non-executive director who is not in South Africa and who travels to attend board meetings will be entitled to receive a travel allowance on the basis set out below. In addition to the travel allowance payable, the company will cover all accommodation and sundry costs. The travel allowance for directors outside South Africa who attend board meetings is as follows:

 

            Travel Allowance

 

  Travel allowance to:
  May 31, 2012    June 1, 2012

South African resident director

  Rnil    Rnil

Non-South African resident who is resident in Africa

  $7,500    $7,800
Non-South African resident director who is resident in jurisdictions other than Africa  $8,800    $9,152

Board committee fees payable to non-executive directors

The fee paid to each non-executive director in respect of such director’s membership of a committee of the board is as follows:

Board Committee Meetings

 

  Fees to  
    May 31, 2012  
per annum  
  Fees from
    June 1, 2012
per annum

Audit and Corporate Governance Committee

 

      

Chairman - South African resident

  R184,000    $30,000

Member - South African resident

  R155,250    $21,393

Member - Non-South African resident who is resident in Africa

  $21,094    $21,393
Member - Non-South African resident who is resident in jurisdictions other than Africa  $27,847    $27,847

 

Remuneration Committee

 

      

Chairman - South Africa

  -    $26,000

Member - South African

  -    $17,730

Member - African

  -    $17,730

Member - Other than Africa

  -    $22,000

 

Other Committees (being Investment, Safety, Health and Sustainable Development, Transformation and Human Resource Development, Risk and Information Integrity, Social, Ethics and Transformation committee and such other committees of the board as may be established from time to time)

 

      

Chairman – South African resident

  R149,500    -

Chairman – South Africa and African

  -    $20,601

Chairman – Non-South African resident who is resident in Africa

  $20,313    -
Chairman – Non-South African resident who is resident in jurisdictions other than Africa  $27,500    $27,500

Member – South African resident

  R126,500    $17,432

Member – Non-South African resident who is resident in Africa

  $17,188    $17,432
Member – Non-South African resident who is resident in jurisdictions other than Africa  $22,000    $22,000

Fees payable for attendance at ad hoc meetings

Each non-executive director will be entitled to an allowance for each board committee meeting attended by such director in respect of those committees which meet on an ad hoc basis, including the Financial Analysis committee, the Party Political Donations committee, the Nominations committee and any special purpose committee established by the board as follows:

Board Committee and Special Purpose Committee

 

  Fees to  
    May 31, 2012  
per meeting  
  Fees from
    June 1, 2012
per meeting

South African resident director

  R18,630    $3,465

Non-South African resident who is resident in Africa

  $2,531    $3,465
Non-South African resident director who is resident in jurisdictions other than Africa  $3,300    $3,465

NON-EXECUTIVE DIRECTORS’ REMUNERATION

                                         
              Com-              Com-       
         Directors’  mittee          Directors’  mittee       
All figures stated to the Appointment  fees(3)  fees  Travel(4)  Total  fees(3)  fees  Travel(4)  Total 
nearest $000(1) From(2)  To(2)  2010  2009 
 
RP Edey (outgoing Chairman)     May 7, 10  114   30   20   164   204   38   40   282 
T T Mboweni (Chairman) June 1, 10      121   14      136             
Dr TJ Motlatsi (Deputy chairman)          86   51      137   67   33      100 
FB Arisman          51   86   32   169   40   36   26   102 
RE Bannerman     May 15, 09              14   8   10   32 
R Gasant Aug 12, 10      15   16      31             
JH Mensah     May 15, 09              14   12   5   31 
WA Nairn          36   58      94   27   34      61 
Prof LW Nkuhlu(5)
          36   67      103   29   31      60 
F Ohene-Kena June 1, 10      19   15   11   45             
SM Pityana          36   73      109   27   47      74 
 
Total — non-executive directors
          514   410   63   987   422   239   81   742 
 

      2012  2011
All figures stated to the nearest $000(1) Appointment Directors’
fees(3)
   Committee
fees
   Travel   Total  Directors’
fees(3)
   Committee
fees
   Travel   Total
   From(2) To(2)     

T TMboweni (Chairman)

      293     64          357    245     57         302

Dr TJ Motlatsi

   Feb 17, 2011                       22     14         36

FB Arisman

      85     130     36     251    76     132     50    258

R Gasant

      67     51          118    50     52         102

NP January-Bardill

 Oct 1, 2011    67     79          146    11     6         17

MJ Kirkwood

 June 1, 2012      47     20     27     94                  

WA Nairn

      64     114          178    45     101         146

Prof LW Nkuhlu

      60     118          178    50     85         135

F Ohene-Kena

      55     40     23     118    41     43     27    111

SM Pityana

      64     111          175    43     95         138

RJ Ruston

 Jan 1, 2012    81     63     45     189                  

Total – non-executive directors

      883     790     131     1,804    583     585     77    1,245

(1)

Where non-executive directors’ compensation is paid in South African rands in 2011, for the purposes of this annual report on Form 20-F, the rand values have been converted to US dollars using the following yearly average rate of exchange: 2010: R7.30280:$1 and 2009: R8.38510:R7.2569:$1.

(2)

Fees are disclosed only for the period from or to which, office is held.

(3)

At the annual general meeting of shareholders held on May 7, 201010, 2012, shareholders approved an increase in directors’ fees with effect from June 1, 2010 as follows:2012. Directors fees for committees may vary depending on the number of committees on which the non-executive director is a member and whether he/she is chairman or a member of the committee.

             
  For six  Additional    
  meetings  per meeting  Travel(4) 
   
— Chairman
  R1,520,300   R78,000  $10,000 
— Deputy chairman
  R650,000   R32,400    
— South African resident directors
  R270,000   R16,000    
— Non-South African directors
            
— Living in Africa
 $33,750  $2,000  $6,000 
— Living other than Africa
 $60,000  $3,000  $8,000 

Rounding may result in computational differences.

6C.

BOARD PRACTICES

The fees payable in respectBoard of committeesDirectors

The strategic leadership of AngloGold Ashanti is the responsibility of a unitary board, comprising two executive directors and ten independent non-executive directors as approvedat December 31, 2012. The board has delegated some of its responsibilities to its subcommittees but reserves certain areas of responsibility solely for itself.

The following movements to the board of directors took place during the period from January 1, 2012 to December 31, 2012 and subsequent to year-end.

Executive directors

There were no changes to the executive directors during the year under review. Subsequent to year end, the board of AngloGold Ashanti announced the resignation of Chief Executive Officer, Mark Cutifani, effective March 31, 2013. The board further announced the appointment of current Chief Financial Officer, Srinivasan Venkatakrishnan, and Executive Vice President: Business & Technical Development, Tony O’Neill, as joint interim Chief Executive Officers until a successor to Mark Cutifani is appointed.

On February 18, 2013, the board announced the appointment of Tony O’Neill as an executive director of the company with effect from February 20, 2013.

Non-executive directors

Rodney Ruston and Michael Kirkwood were appointed to the board with effect from January 1, 2012 and June 1, 2012 respectively. Rodney Ruston offered himself and was elected as a director by shareholders at the Annual General Meeting held on May 10, 2012. Michael Kirkwood will retire at the annual general meeting and offer himself for election by shareholders at the annual general meeting to be held on May 7, 201013, 2013.

The directors retiring by rotation at the forthcoming annual general meeting pursuant to the Memorandum of Incorporation, are as follows:

From June 2010
             
  Audit       
  and Corporate       
  Governance  Other  Ad hoc 
  committee  committees  committees 
  (per annum)  (per annum)  (per meeting) 
   
— Chairman — South African resident
  R160,000   R130,000    
— Chairman — Living in Africa
    $16,250    
— Chairman — Living other than Africa
    $25,000    
— South African resident members
  R135,000   R110,000   R16,200 
— Non-South African members
            
— Living in Africa
 $16,875  $13,750  $2,025 
— Living other than Africa
 $25,315  $20,000  $3,000 
(4)A paymentBill Nairn, Ferdinand Ohene-Kena, Frank Arisman and Srinivasan Venkatakrishnan. Bill Nairn, Ferdinand Ohene-Kena and Frank Arisman will not offer themselves for re-election.

The company’s Memorandum of Incorporation does not set a travel allowance, per board meeting, is paid to non-executive directors who travel internationally to attend board meetings. In addition, AngloGold Ashanti is liable for the payment of all travel costs.

(5)Dr Motlatsi retired from the board effective February 17, 2011.
Rounding may result in computational differences.
Non-executive directors are not eligible to participate in the Share Incentive Scheme.

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6C. BOARD PRACTICES
THE BOARD OF DIRECTORS
The Articles of Association of AngloGold Ashanti requires the board to be composed of a minimum of four directors. The company is governed by a unitary board, comprising of two executive directors: the chief executive officer and the chief financial officer and eight independent non-executive directors who all meet the board’s independence criteria.
There is no mandatory retirement age for non-executive directors; however, in line with best practice in corporate governance anddirectors. However, in accordance with recommendations of King III and the Sarbanes-Oxleyrequirements of the Sarbanes Oxley Act, directors are required to step down from the board after nine consecutive years of service. The nine-year tenure could be extended atNevertheless, the board’sboard has discretion andto extend this period with the individual director’s consent. Mr RP Edey, the former chairmanconsent of the boardindividual director and after a rigorous assessment of the director’s independence and performance.

Non-executive directors do not hold service contracts with the company.

Company Secretary

Lynda Eatwell retired at the annual general meeting heldas Company Secretary on May 7, 2010 after serving the board for twelve years, eight of which were as board chairman. The independence of Mr FB Arisman, who joined the board in 1998 was evaluated by the board in February 2010. The board concluded that, his performance, skillsAugust 31, 2012 and knowledge and his contribution to the board’s performance are of a high standard and that his independence of character and judgment are not in any way affected or impaired by the length of his service as a director. This decision was ratified at the annual general meeting held on May 7, 2010, when an extension of tenure for a further three years was approved by shareholders.

During the year, a number of changes to the board membership occurred: Mr TT MboweniMaria Sanz Perez was appointed to the board and as chairmanCompany Secretary with effect from JuneSeptember 1, 2010 and Mr F Ohene-Kena joined the board on the same date. Mr R Gasant was appointed to the board and the Audit and Corporate Governance Committee with effect from August 12, 2010.
The board’s charter sets out the powers, responsibilities, functions and delegation of authority, and the areas of responsibility expressly reserved for the board. The charter covers, among others, the following key areas:
authority of the board;
composition of the board;
membership and appointment to the board;
role and responsibility of the board;
procedures of the board;
board committees;
matters reserved for board decision;
the board’s relationship with shareholders;
meeting procedures and proceedings;
share dealings by directors;
management of risks;
corporate governance;
remuneration issues;
evaluation of board performance and induction of new directors; and
declaration of interests.
2012.

Appointment of directors

The board is authorized by the company’s ArticlesMemorandum of AssociationIncorporation to appoint new directors based on recommendations by the Nominations Committee, provided such appointeesCommittee. Newly appointed directors are required to retire at the next annual general meeting following their appointment and stand for election by shareholders. Eligibility for appointment as a director is guided by the Director’s Fit and Proper Standards Policy, requirements of the Companies Act, King III and best practice.

Non-executive directors receive fees for their services as directors which are approved by shareholders at annual general meetings. Non-executive directors do not participate in the company’s share incentive scheme.

Executive directors have contracts of employment with the company.

Retirement by rotation

One-third of the non-executive directors retire by rotation follows a staggered processannually in accordance with one-thirdthe company’s Memorandum of non-executiveIncorporation, with the longest serving directors retiring at least every three years at the annual general meeting. The curriculum vitae of each director standingbeing eligible for election or re-election is made available to shareholders in the notice of meeting circulated to shareholders prior to the annual general meeting to assist in their decision-making.

re-election. Executive directors are not subjectsubjected to the retirement by rotation process as they overseegiven their responsibility for the day-to-day running of the company and are held accountable for the operational and management performance of the company by regularly reporting to the board. Their performance is measured and remuneratedassessed annually by the board against pre-determined criteria.
Executive directors have contracts

On March 27, 2013, shareholders approved the company’s new Memorandum of employment with the company. Details on the remuneration of executive and non- executive directors are presented in “Item 6.B.: Compensation.”

Non-executive directors do not have contracts of service with the company.

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All non-executive membersIncorporation. One of the board have accesskey changes in this document, compared to management and the recordsold constitutional document, is the provision for all directors, not only non-executive directors, to be subjected to retirement by rotation. In anticipation of the company, as well as to external professional advisers should the need arise.
The feesadoption of non-executive directors, including the fees receivedthis provision, Srinivasan Venkatakrishnan, Chief Financial Officer, will stand for membership of committees, are fixedre-election by shareholders at the annual general meeting. Other than these feesmeeting to be held on May 13, 2013 and an allowance for travelling internationally to attend board meetings, non-executive directors receive no further payments from the company.
Non-executive directors are precluded from participation in the company’s share incentive scheme.
Board tenure
There is no mandatory retirement age for non-executive directors; however, in line with best practice in corporate governance and in accordance with the Sarbanes-Oxley Act, directors are required to step down from the board after nine consecutive years of service. The nine-year tenure could be extended at the board’s discretion and with the individual director’s consent. In line with this practice the independence of both Messrs Arisman and Nairn were assessed and it was concluded that despite both Mr Arisman and Mr Nairn having served as directors for periods in excess of 9 years, the performance, skill and knowledge that both these directors bringshareholders will equally vote on confirming Tony O’Neill’s appointment to the boardboard. The other directors to retire by rotation are Frank Arisman, Bill Nairn and Ferdinand Ohene-Kena, all of such a high standard and that their independencewhom will not stand for re-election.

Independence of character and judgement are not in any way affected or impaired by the length of their service as directors. The board therefore were of the opinion and have declared that both Mr Arisman and Mr Nairn are independent.

Non-executive directors
Non-executive directors provide the board with advice and experience that is independent of management and the executive. The presence of independent directors on the board, and the critical role they play as board representatives on key committees such as the Audit and Corporate Governance, Nominations, Party Political Donations and Remuneration committees, ensures that the company’s interests are served by impartial and independent views that are separate from those of management and shareholders.
Determination of director independence

Determination of independence is guided by King III, the Companies Act, and international best practice. Where the board, exercising its discretion and having considered all relevant facts, determines that a director is independent despite not meeting the set criteria, the board will fully and publicly disclose its reasoning.

The policy and independence of individual non-executive directors are reviewed annually as partrequirements of the annual board evaluation process. The performance evaluation tools are also reviewed, asJSE and when necessary, to ensure that changes in the corporate governance environmentNew York Stock Exchange’s rules on independence as well as best practice. The board complies, at all times, with the requirement to consist of a majority of independent directors.

Post year-end, Sipho Pityana’s status as an independent non-executive director was changed to non-executive director with effect from February 19, 2013. The company believed this to be appropriate after AngloGold Ashanti’s South African operations contracted with Izingwe Property Managers (Pty) Limited, after a competitive bidding process, to plan, design, develop and construct 200 residential accommodation units for its employees under a pilot employee homeownership program. Izingwe Property Managers (Pty) Limited is an associate of Sipho Pityana. This commercial transaction has resulted in his being deemed non-independent in terms of the company’s strategic needs, are well catered for. During 2010, the policy was reviewed and its contents maintained. The policy determining the independenceon director independence. As a result of directors can be found at the company’s website atwww.anglogoldashanti.com.

In compliance with King III, an assessmentthis change of status, he has stepped down as a member of the independenceRemuneration Committee.

Executive Committee

Day-to-day management of the chairman by the non-executive directors on the board forms part of the 2010 performance evaluation of the board.

The test of independence thatgroup’s affairs is used by the board of AngloGold Ashanti Limited to determine the independence of its members is based on the following:
1.An independent director is a non-executive director of the board who:
a.Is not a representative or officer of a significant shareholder of the company. For purposes of this policy the term “significant shareholder” means a shareholder who owns, directly or indirectly, more than 5 percent of the company’s issued share capital or a shareholder who has the ability to influence the decisions of the board and/or management. The term “officer” shall mean a director or company secretary of the shareholder, any person identified as an officer according to the requirements of any relevant laws; any person who has the capacity to influence significant business and/or financial decisions of the shareholder (including decisions affecting the relationship with AngloGold Ashanti) or who is appointed to any capacity within the shareholder by its board or any of its board committees;

192


b.Has not been employedvested in an executive capacity by the company or the group for the preceding three financial years. For purposes of this policy the term “executive capacity” means any employee whose appointment requires the approval of the Remuneration Committee, Nominations Committee or the Audit and Corporate Governance Committee of the board;
c.Has not been the auditor of the company for the preceding three financial years;
d.Is not a professional adviser to the company other than in his or her capacity as a director of the company;
e.Does not have a material interest in a contract with the company or is not employed by a company that has a material interest in a contract with the company. For purposes of this policy the term “material interest in a contract” means, as a guideline, any contract which is:
(i)The greater of 0.5 percent of AngloGold Ashanti’s total gross revenue in the preceding financial year or $20 million whichever is the greater; and
(ii)Even if the limit mentioned in (i) above is not exceeded, the board will consider whether the contract is deemed material to either contracting side taking into account all relevant facts including (but not limited to) the value of the contract relative to the total business of each party and the importance of the business relationship to the parties.
f.Is free of any other business or other relationship which could be perceived to materially interfere with the individual’s capacity to act independently of other board members, management or the individual’s own interests;
g.Receives remuneration for services as a director in the form of cash and shares (but not share options); and
h.Objectively conducts himself or herself in a manner displaying independence of thought, judgment and action.
2.For purposes of determining the independence of directors the criteria above will apply mutatis mutandis to the immediate family members of the director. For purposes of this policy the term “immediate family member” shall include any of the following persons who are related to the director in question: spouse, children and grandchildren; parents, parents-in-law and grandparents; siblings and the children, spouses and grandchildren of any of these siblings.
3.The board will annually review which of its members are independent having regard to this policy and relevant facts.
Directors’ performance evaluation
An annual self-evaluation is undertaken to determine that the board and its committees are effective in the performance of their duties and to facilitate board development. Depending on the results of the evaluation, appropriate action is taken to achieve the desired results. The board is also cognizant of the opportunity that the evaluation process affords it in improving communication among its members and between the board and management and to fine-tune its role in the overall governance of the company.
The most recent self-evaluation of the performance of the board, its committees and its chairman took place in February 2010. The chairman of the board and the chairman of each committee of the board led the processes to evaluate the board and the committees respectively. Led by the deputy chairman, each director evaluated the performance of the chairman.
The evaluation for the 2010 financial year is being done as a self-assessment, and will be finalized by end-July 2011. The external audit firm and the Internal Audit Department will also be evaluated. Additionally, the evaluation of the board chairman will be undertaken by the Nominations Committee and will become the standard procedure for future evaluations. The evaluation process for the 2011 financial year will be facilitated by an independent third party.
Topics covered in the board’s effectiveness evaluation include the following:
composition of the board;
setting of performance objectives;
board contribution to development of strategy;
board response to crisis;
board awareness of developments in regulatory and market environments;
composition of board committees;
effectiveness of board committees in fulfilling the mandate;

193


evaluation of the relationship between the board and management, shareholders and among members of the board itself;
board meetings and their effectiveness;
board succession;
corporate governance and legal issues facing the board/company; and
the performance evaluation of executive directors is conducted by the Remuneration Committee.
Board meetings
The board holds six scheduled meetings annually: four quarterly, a strategy review session and a budget review meeting.
All documents submitted to the board for its discussions or approval are reviewed and approved by the Executive Committee, to ensure completenesswhich is chaired by the Chief Executive Officer and relevance. Non-executive directors have unfettered accesscomprises 13 members, four of whom head the regional operations. The committee’s work is supported by country and regional management teams. During the year under review, two new members, M MacFarlane and D Noko, were appointed to the executive teamcommittee.

The committee held 12 meetings and any other employeetwo workshops to discuss operational matters and review the programs and activities being implemented to advance the achievement of the company to seek explanationsset of strategic goals on safety, asset portfolio-, financial-, people- and clarification on any matter prior to or following board meetings. This facilitates the board’s discussions and assists it in reaching speedy but informed decisions.

environmental management as well as stakeholder engagement.

Executive contracts

All members of the Executive Committee have permanent employment contracts which entitle them to standard group benefits as defined by their specific region and participation in the company’s short term incentive scheme, the Bonus Share Plan (BSP), and the Long-Term Incentive Plan (LTIP).

South African executives have dual contracts which reflect the percentage of their time focused on offshore business requirements.

The executive contracts are regular attendees at board meetingsreviewed annually and reportcurrently continue to include a change of control provision. The change of control is subject to the board on their respective operational areas.following triggers:

The acquisition of all or part of AngloGold Ashanti; or

During 2010,

A number of shareholders holding less than 35 percent of the company’s issued share capital consorting to gain a majority of the board held its six scheduled meetings and make management decisions; and

The contracts of Executive Committee members are either terminated or their role and employment conditions are curtailed.

In the event of a change of control becoming effective, the executive will in certain circumstances be subject to both the notice periods and the change of control contract terms.

The notice period applied per category of executive and the change of control periods as at December 31, 2012 were as follows:

  Executive committee member

Payment in lieu of notice periodChange of control

  Chief executive officer

12 months24 months

  Chief financial officer

  9 months  9 months

  Other executive committee members

  6 months  6 months

The board in negotiation with the executive has the discretion to mutually agree the duration of the notice period, as a result:

Following on from his resignation and appointment to Anglo American, the board mutually agreed with Mark Cutifani to reduce his notice period from 12 months to three special meetingsmonths;

In negotiating conditions for the acting chief executive officers in January 2013 with both Tony O’Neill and Srinivasan Venkatakrishnan, and in exchange for a ‘stay period’ to considerend September 2013, the board agreed it would review all acting arrangements upon appointment of a new chief executive officer or in June 2013 (whichever occurred sooner) and that both Tony O’Neill and Srinivasan Venkatakrishnan would be offered the option to return to their normal positions post appointment of a new chief executive officer or have the alternative to exit the company at the end of September 2013. Their notice periods would revert back to the standard notice period after September 2013.

Non-executive directors do not hold service contracts with the company. Executive directors do not receive payment of directors’ fees or committee fees.

Board activities in 2012

Outside of meeting on a collective basis, individual board members, especially the chairman of the board, the chairman of the Audit and Corporate Governance Committee and the chairmen of the other board committees, actively and continuously engage with management and other stakeholders on important matters, thereby enabling the board to approve various financial transactions that wereprovide the required strategic leadership.

The following are some key actions and programs undertaken and implemented by the company. In addition,board in 2012 in fulfilling its functions and responsibilities regarding strategic oversight:

Evaluated and approved management’s five-year strategic proposals;

Discussed and approved management’s budget proposals for the 2013 financial year;

Examined ways of improving long-term value to shareholders;

Successfully defended and maintained investment-grade credit rating, and completed a refinancing of the undrawn revolving credit facility; issued a new ten-year rated bond, and raised an aggregate of R1 billion from the South African debt markets under the Domestic Medium Term Note Program;

Discussed and approved capital expenditure proposals submitted by management on a quarterly basis;

Achieved substantial compliance with the provisions of the Companies Act;

Visited various mines and exploration sites to observe and acquire a better understanding of the operations;

Assessed the skills set of the board which resulted in the appointment of two sub-committee meetings were held to approve various corporate reports includingnew independent non-executive directors;

Carried out an annual evaluation of the 2009 annual financial statementsboard, its committees, independence of directors, performance of the Chairman of the board and the annual report on Form 20-F (US GAAP Report for 2009).competence and qualifications of the Company Secretary;

The following symbols are used to describe various aspects

Reviewed the independence of boardeach non-executive director in accordance with policy and committee meeting attendance:best practice guidelines;

Symbol Meaning

Set up the Social, Ethics and Transformation Committee in fulfilment of Section 72(4) and Regulation 43 of the Companies Act; and

Director attended meeting.
XApologies received from director prior to meeting and leave of absence granted.
Attendance not required as director was not a member of the board or committee at the time of the meeting.
Recused from meeting due to conflict of interest
Board meeting attendance for 2010
Feb 16Feb 22Apr 20May 5May 6Aug 10Sep 9Nov 9Nov 17
(quarterly(special(special(quarterly(strategy(quarterly(special(quarterly(budget
Membersmeeting)meeting)meeting)meeting)meeting)meeting)meeting)meeting)meeting)
Mr TT Mboweni(1) (Chairman)
(6)
Mr RP Edey(2)(Chairman)
Dr TJ Motlatsi(3)
XXX
Mr FB Arisman
Mr R Gasant(4)
Mr M CutifaniX
Mr WA NairnX
Prof LW Nkuhlu
Mr F Ohene-Kena(5)
X
Mr SM PityanaX
Mr S Venkatakrishnan
(1)Appointed to the board as chairman on June 1, 2010
(2)Retired from the board and as chairman on May 7, 2010
(3)Retired from the board on February 17, 2011
(4)Appointed to the board on August 12, 2010
(5)Appointed to the board on June 1, 2010
(6)Attended by invitation

194Considered and approved a number of regulatory compliance policies.


Board committees

The board has established and delegated specific roles and responsibilities to nine11 standing committees, and one management committee (theincluding the Executive Committee)Committee, to assist it in discharging its duties and responsibilities. The terms of reference of each committee are approved by the execution of its mandate. board and reviewed annually or as necessary.

All standing committees, except the Executive Committee, are chaired by independent non-executive directors and the following committees are composed of only independentcomprise non-executive directors only – Audit and Corporate Governance, Remuneration, Nominations, Party Political DonationsRemuneration and Financial Analysis. The Executive Committee is chaired by the chief executive officer.

Each committee’s role and responsibilities and membership are spelt out

All committees meet quarterly in itsaccordance with their terms of reference, approved by the board and reviewed regularly to ensure that they remain in line with relevant regulations, the company’s needs and business climate and with best practice in corporate governance. During 2010, a new committee, Risk and Information Integrity Committee was established. The Treasury Committee, which was a sub-committee of the Audit and Corporate Governance Committee, was dissolved on November 9, 2010 following the elimination of the company’s hedge book, which substantially reduced the functions of that committee. Residual duties of the committee were transferred to the Audit and Corporate Governance Committee. As and when required, the board may establish ad hoc committees to address specific issues.

Meetings of the board committees are held quarterly except for the Party Political Donations, Nominations and Financial Analysis committees which only meet on a need basis.need-to basis and the Executive Committee which meets monthly or as often as required. Members of the Executive Committee are regular attendees at board and committee meetings. Several members of theother management team attend meetings of committees whose roles and responsibilities are relevant to their job functions.
In order to keep the board abreast with activities of the committees, the chairman of each committee reports on a quarterly basis to the board on the committee’s deliberations, including decisions taken on behalf of the board. In addition, approved minutes of committee meetings are included in the board’s meeting packs for information.
The board encourages and has put in place a procedure to enable directors to attend the meetings of committees of which they are not members to enable them to gain information and achieve a better knowledge and understanding of the company’s operations. During 2010, Messrs Arisman, Edey, Mboweni, Cutifani and Venkatakrishnan attended the meetings of othervarious committees as detailedand when required. During 2012, all committees held the minimum number of meetings as required and discharged their duties as prescribed by the respective terms of reference.

The Social, Ethics and Transformation Committee held its first and only meeting in the committee attendance details.

Relevant information on each board committee is provided below.
November 2012, following its establishment in April 2012.

The Party Political Donations and Financial Analysis Committees did not meet during 2012.

Attendance at meetings by directors

  Director  Board   Audcom   Remcom   R&II   Nomcom   SE&T   SHSD   THRC   INVCOM 

  TT Mboweni

   10/10          5/6          3/3               4/4     4/4  

  FB Arisman

   10/10     7/7     6/6     3/4     3/3          3/5          4/4  

  M Cutifani

   (3)7/10               3/4          1/1     4/5     4/4     4/4  

  R Gasant

   10/10     7/7          4/4     3/3                      

  NP January-Bardill

   10/10     7/7               3/3     1/1     5/5     4/4       

  MJ Kirkwood(1)

   5/6          2/2          1/1     1/1               1/1  

  WA Nairn

   10/10          6/6     4/4     3/3     1/1     5/5     4/4     4/4  

  Prof LW Nkuhlu

   8/10     7/7     6/6     4/4     3/3     1/1     5/5          4/4  

  F Ohene-Kena

   5/10                    2/3          4/5     3/4       

  SM Pityana

   10/10          5/6     4/4     3/3     1/1     5/5     4/4     4/4  

  RJ Ruston(2)

   10/10               2/2     3/3     1/1     3/3          2/2  

  S Venkatakrishnan

   10/10               4/4                         4/4  

(1)

Appointed to the board and Nomcom on June 1, 2012 and Remcom, SE&T and Invcom on October 1, 2012.

(2)

Appointed to the board and Nomcom on January 1, 2012 and R&II, SHSD, SE&T and Invcom on June 1, 2012.

(3)

M Cutifani was recused from attending two board meetings convened to discuss special matters relating to the CEO and one other meeting which he was unable to attend owing to an important industry meeting.

Key

Audcom:

Audit and Corporate Governance Committee

Remcom:

Remuneration Committee

R&II:

Risk and Information Integrity Committee

Nomcom:

Nominations Committee

SHSD:

Safety, Health and Sustainable Development Committee

SE&T:

Social, Ethics and Transformation Committee

THRC:

Transformation and Human Resources Development Committee

INVCOM:

Investment Committee

Audit and Corporate Governance Committee

Membership

In accordance with best practice recommendations of the AuditKing III and Corporate Governance Committee, including its chairman, comprises only independent non-executive directors, in compliance with the Sarbanes-Oxley Act of the United States, and the guidelinesmembership of King III. All threethis committee comprises four independent non-executive directors. Several members of the committee have considerable financial knowledgeexecutive team and experience to help overseemanagement, including the Chief Executive Officer, the Chief Financial Officer, the Chief Accounting Officer, Group General Counsel and guideCompany Secretary, Vice President Treasury, Senior Vice President Group Internal Audit, Financial Controllers at the board andregional operations as well as the company in respectexternal auditors attended the committee’s quarterly meetings. Members of the audit and corporate governance functions.

At its meeting held on February 15, 2010, the board re-appointed thecommittee regularly engage with key members of the Auditfinancial management team for discussion on matters relevant to the committee’s role.

Pursuant to the Companies Act, King III and Corporate Governance Committee to serve as membersbest practice, the committee, among other business:

Reviewed and approved the external auditors’ fees and the integrated audit plan for the 2012 financial year;

Reviewed the performance of the committeeexternal auditors and recommended their reappointment;

Considered, and pre-approved, on a quarterly basis, non-audit services provided by all external auditors to the group;

Reviewed the independence of the external audit team and audit partner and concluded that they were independent for the next2012 audit year;

Reviewed the 2011 annual reports and 2012 quarterly reports on behalf of the board;

Received and reviewed, on a quarterly basis, the use of the company’s whistle-blowing facility and advised on ways to enhance its use;

Reviewed, on a quarterly basis, submissions by management on the state of the group’s financial year. In line withaffairs, internal control environment and auditing, and reported thereon to the board;

Performed liquidity and solvency tests in relation to dividends (quarterly) and guarantees (as necessary);

Monitored implementation of recommendations on audit findings;

Monitored the activities of the group’s internal audit function and also ensured that it was sufficiently resourced to discharge its duties;

Reviewed and monitored the implementation of the combined assurance framework and an integrated audit process;

Monitored, on behalf of the board, application of the principles of King III their appointment was put before shareholders on May 7, 2010 for the first time and the resolutions for each member was duly passed by about 98 percent of shareholders who participated in and voted at the annual general meeting. Their next re-appointments were considered and also voted on at the annual general meeting held on May 11, 2011.

In 2010 one member of the committee, former board chairman, Mr RP Edey, resigned following his retirement from the board. Mr R Gasant was appointed as a member of the committee on August 12, 2010.
The US Sarbanes-Oxley Act requires the board, on an annual basis, to identify a financial expert from within its ranks. At its meeting held on February 16, 2011, the board resolved that the committee’s chairman, Prof Wiseman Nkuhlu, is the board’s financial expert.
The NYSE listing rules requires that the board determine whether a member of the committee’s simultaneous service on the audit committees of more than three public companies impairs the ability of such a member to effectively serve on a listed company’s audit committee. Professor Nkuhlu, the chairman of the committee, is a member of one (2009: one) other public company’s audit committee but is not its chairman. Mr Gasant is the chairman of the audit and risk committees of three non-public companies and Mr Arisman does not serve on any other public company’s audit committee.

195


After due consideration of all relevant facts, and given his professional knowledge and skills, the board concluded that the simultaneous service on three other non-public company’s audit committees by Mr Gasant has not and is not likely to impair his ability to diligently execute his responsibilities to the committee and the board of AngloGold Ashanti.
The committee is guided by its terms of reference which were updated in February 2010 to incorporate relevant new principles of King III. The committee’s mandate as delegated by the board is ensuring the integrity of financial reporting and adequacy of governance, internal control and risk management policies and processes throughout the group. The roles and responsibilities of the committee include the following:
selection and evaluation of external auditors and recommendation of their appointment to shareholders;
determination of the terms of engagement of the external auditor;
determination of the external auditors remuneration on an annual basis;
approval and implementation of policy procedures for approving the performance of non-audit work by the external auditors and the remuneration thereof;
ensuring the independence of the external auditors by putting in place measures to that effect and conducting an annual assessment of their independence;
reviewing the performance and independence of the internal auditor;
approving the internal audit charter;
approving the internal audit plan;
reviewing management’s half year and full year going concern statement;
submitting a report on its activities on an annual basis to shareholders;
overseeing the company’s integrated reporting and providing assurance to the board as to the integrity of information provided in the report. It also provides assurance to the board that the non-financial aspects of the sustainability review conforms to the financial information in terms of accuracy and consistency;
reviewing fraud prevention policies and processes. The investigations of the reports made through the “whistle blowing” process and the actions taken are reviewed and monitored by the committee on at least a quarterly basis;
ensuring a smooth and cordial working relationship between management and the external audit team;
ensuring that the compliance function is adequately resourced and is performing its functions adequately;
conducting an annual self-evaluation of its performance;
providing oversight role of the financial performance of relevant subsidiaries;
reporting annually to the stakeholders and the board as to the effectiveness of the company’s internal financial controls; and
reviews the annual financial statements and the integrated report of the company and recommends them to the board for approval.
In relation to risk management, the committee reviews the risk policies of the company with respect to risk identification and the risk management process, ensuring that the guidelines of the King Code and the requirements of the Sarbanes-Oxley Act are met, as well as advisingCompanies Act;

Monitored developments in IFRS and US GAAP accounting standards through regular updates from management with the boardmain objective of ensuring that the company’s accounting practices complied with relevant standards;

Received quarterly briefings and updates on the effectivenessroll-out of the riskCode of Business Principles and Ethics and matters relating to compliance. This function was transferred to the Social, Ethics and Transformation Committee;

Received and reviewed on a quarterly basis, reports on major litigations and disputed cases so as to assess their likely outcome and their potential financial and other impact on the group; and

Assisted and advised management system. The committee’s roleto develop a legal and regulatory framework to monitor compliance with respect to risk management has now been vested in the relevant laws and regulations.

Risk and Information Integrity Committee. All members of the committee are also members of the Committee

Risk and Information Integrity Committee.

Theinformation integrity committee meets regularly withassists the external audit partner,board in discharging its responsibilities relating to the group’s internal auditorgovernance of risk; the management of IT resources; and the Chief Financial Officer to review the audit plansintegrity of the internalinformation.

Safety, Health and external auditors and ascertain the scope of the audits, and to review the quarterly financial results, significant legal matters affecting the company, the preliminary announcement of the annual results and the annual financial statements, as well as all statutory submissions of a financial nature, prior to approval by the board.

Attendance at Audit and Corporate GovernanceSustainable Development Committee meetings — 2010
MembersFebruary 11May 3August 10November 5
Prof LW Nkuhlu (Chairman)
Mr FB Arisman
Mr RP Edey(1)
Mr R Gasant(2)
By invitation
Mr M CutifaniX
Mr S Venkatakrishnan
(1)Retired on May 7, 2010
(2)Appointed on August 12, 2010

196


To facilitate the committee’s role in relation to integrated reporting, the chairman was appointed to the Safety, Health and Sustainable Development Committee with effect from October 27, 2009.
Audit fees approved by the committee and paid to the external auditors in respect of the audit of the 2010 financial statements amounted to $8 million and $2 million in respect of other audit related services. The percentage of other audit related fees as a portion of total audit fees paid to the external auditors for 2010 was about 20 percent.
Meetings of the committee
The committee’s terms of reference stipulates that it holds at least four meetings in any particular year. The committee has established an annual work planseeks to ensure that all relevant mattersoperations are covered by the agendas of the meetings planned for the year and to ensure adequate coverage of the matters laid outconducted in the terms of reference.
Permanent invitees to the committee’s meetings include the chief financial officer, who is also an executive director, the vice president: group internal audit, the executive vice president: business strategy who is responsible for risk management, executives responsible for the company’s operations, the financial controllers of the various regions, the group compliance manager, head of legal, and the Sarbanes-Oxley compliance manager. The board chairman and the chief executive officer are also invited to the committees meetings.
At meetings of the committee, the committee fulfilled its responsibilities set outwith company policies in this report.
It held four scheduled quarterly meetings during 2010 as detailed above. In addition, two sub-committee meetings were held.
Internal audit
The company’s internal audit function plays a critical role in the functioning of the Audit and Corporate Governance Committee. The group’s internal audit function is headed by the vice president: group internal audit who reports directly to the committee and only has an administrative line to the chief financial officer. The group’s internal control processes and systems are monitored by the group’s internal audit function.
The vice president: internal audit attends all meetings of the Audit and Corporate Governance Committee and all Executive Committee meetings that precede board meetings. He reports on the group internal control environment, highlighting major audit findings and remedial measures to address adverse findings. The committee contributes to the setting of key performance targets of the internal auditor and evaluates his performance annually.
As part of processes being put in place to conduct its first combined assurance, the group internal audit presented a risk based audit plan to the committee in November 2010, which was reviewed and approved. The vice president: internal audit has unrestricted access to both the chief executive officer and the chief financial officer, the board chairman and the chairman of this committee, and is invited to attend and report on his department’s activities at all meetings of the committee. The board is confident that the unfettered access of the vice president: internal audit to key board members, and the direct and regular reporting to the committee, enables him to discharge his duties as required by law and in fulfilment of his obligations to the company.
In addition, the committee meets quarterly with the internal and external auditors without the presence of management.
Safety, Health and Sustainable Development Committee
The Safety, Health and Sustainable Development Committee oversees the company’s performance on sustainable issues including safety, health and the environment, and its social interaction with the communities in which it operates, as well as the security discipline. The committee ensures that the company conducts its operations in an economically and socially responsible manner and in accordance with sustainable business practices and with due regard to the safety and health of its employees, communities and the protection of the natural environment. The committee is also responsible for establishing targets in relation to each of these areas. Safety, health and environmental performance and relations with government, community members and other stakeholders, form an integral part of operational management.

197

way.


Membership of the committee comprises non-executive directors and the chief executive officer. Its meetings are attended by several members of the executive team and other officers of the company whose roles and duties are relevant to the committee’s mandate. During 2010, the committee deliberated on the strategies and methodologies that will enhance the safety and security of all company employees, and in particular deliberated on the safety concerns faced by the company’s South African mines.
Four scheduled quarterly meetings were held during 2010 as detailed below:
Attendance at Safety, Health and Sustainable Development Committee meetings — 2010
MembersFebruary 15May 4August 5November 8
Mr WA Nairn (Chairman)
Mr FB Arisman(1)
Mr M Cutifani
Dr TJ MotlatsiX
Prof LW Nkuhlu
Mr F Ohene-Kena(1)
Mr SM Pityana
By invitation
Mr FB Arisman
Mr RP Edey(2)
(1)Appointed on August 1, 2010
(2)Retired on May 7, 2010
Remuneration Committee
The Remuneration Committee comprises only independent non-executive directors and is responsible for evaluating the performance of executive directors and executive management, and for setting appropriate remuneration for such officers of the company.
The performance of each executive director is assessed relative to the prevailing business climate and market conditions, as well as to annual evaluations of the achievement of key predetermined targets. Bonuses paid to executive directors are a reflection of the performance of each of the directors and the company as a whole.
Attendance at Remuneration Committee meetings — 2010
MembersFebruary 11March 9May 4August 5November 8
Mr SM Pityana (Chairman)
Mr FB Arisman
Mr RP Edey(1)
Dr TJ MotlatsiX
Prof LW Nkuhlu
By invitation
Mr M Cutifani
Mr TT Mboweni(2)
(1)Retired on May 7, 2010
(2)Appointed on August 1, 2010
Nominations Committee
The appointment of directors is a matter for the board as a whole but the Nominations Committee, whose membership comprises of only independent non-executive directors, is responsible for identifying, assessing and recommending suitable candidates for appointment to the board. The fit and proper standards policy for directors guides this process. The committee is also responsible for establishing and reviewing succession plans for members of the board, particularly those of the chief executive officer and the board chairman.

198


During the year the committee conducted several interviews with potential candidates for the position of chairman of the board and other independent non-executive directors. Four meetings were held in addition to the interview sessions.
Attendance at Nominations Committee meetings — 2010
MembersFebruary 12February 15February 22August 5
Mr RP Edey (Chairman)(1)
Mr TT Mboweni (Chairman)(2)
Mr FB Arisman
Mr R Gasant(3)
Dr JT Motlatsi
Mr WA Nairn
Prof LW Nkuhlu
Mr F Ohene-Kena(2)
Mr SM Pityana
By invitation
Mr M Cutifani
Mr S Venkatakrishnan
(1)Retired on May 7, 2010
(2)Appointed on August 1, 2010
(3)Appointed on August 12, 2010
Risk and Information Integrity Committee
In February 2009, the board approved a comprehensive Group Risk and Opportunity Report and Framework that marked a new approach to risk management in the company. The main aim was to ensure that risk management became embedded into all the company’s business practices and processes, as well as policy and strategic planning. This approach would ensure that risk was regarded as one of the key tools for the achievement of business objectives and not only as a compliance issue. Implementation of the new risk management framework commenced in the second half of 2009 and has achieved significant successes.
Risk management, together with information technology management, has assumed greater importance in corporate governance in South Africa as evidenced by recommendations in King III. The board of AngloGold Ashanti, was cognizant of the fact that information plays a key role in the operations of the company, and resolved to establish the Risk and Information Integrity committee to oversee Risk Management and Information Technology Governance as required by King III.
The board approved the terms of reference as well as the membership of the committee on August 10, 2010. Members of the committee comprise both executive and non-executive directors as follows: Messrs R Gasant, M Cutifani, FB Arisman, WA Nairn, SM Pityana, S Venkatakrishnan and Prof LW Nkuhlu. The committee held its first meeting on November 5, 2010 during which it reviewed its terms of reference, membership and meeting procedures. The meeting was chaired by the chief executive officer and all members, except Mr R Gasant, were present. At its meeting held on November 9, the board appointed Mr Gasant as chairman of the committee.
The main function of the committee as outlined in its terms of reference is to assist the board in carrying out its risk responsibilities and to advise the board on the effectiveness of the risk and information integrity management processes and to ensure that information technology and compliance risk are integral parts of risk management.
In February 2011, the board approved the following documents:
a.Risk Management Policy;
b.Risk Management Plan; and
c.Risk Management Standard.
The board reviewed the ten most important risks facing the company. In addition, a risk register is being reviewed by the committee at least twice a year, and for 2011 Internal Audit will give assurance on the effectiveness of the implementation of risk management.

199


Transformation and Human Resources Development Committee
The committee is responsible for overseeing the company’s performance in respect of employment equity, transformation and staff development by taking into account the legal requirements of applicable legislation and the monitoring of targets set by the company, including the monitoring of the Mining Charter in its entirety and all legislative requirements impacting on the company’s right to mine at all its operations. The committee is also responsible for employee skills development in a manner that seeks to develop and retain talent, and to provide employees with the opportunity to enhance their skills and knowledge. Details of the company’s employment equity practices and performance during the year, as well as the challenges the company faces in this regard are provided in the Sustainability Review 2010 which is available on the company’s website. The committee held four scheduled quarterly meetings in 2010.
Attendance at

Transformation and Human Resources Development Committee meetings — 2010

MembersFebruary 15May 4August 5November 8
Dr TJ Motlatsi (Chairman)X
Mr FB Arisman(1)
Mr M Cutifani
Mr WA Nairn
Mr F Ohene-Kena(2)
Mr SM Pityana
(1)Resigned from committee on August 1, 2010
(2)Appointed on August 1, 2010
oversees compliance with laws on social transformation and the development of employees.

Remuneration Committee

Remuneration Committee monitors and aligns executive remuneration with company performance and shareholder interests, and seeks to maintain remuneration standards aimed at attracting and retaining a competent executive team.

Social, Ethics and Transformation Committee

Social, Ethics and Transformation Committee came into effect on April 30, 2012. The committee assists the board in discharging its responsibilities as prescribed by the Companies Act and in terms of the company’s specific needs on sustainable development, compliance and ethics, transformation and localization.

Nominations Committee

Nominations committee assists the board in identifying and accessing the eligibility of potential directors.

Investment Committee

This committee

Investment Committee is responsible for overseeingrequired to assess individual capital projects to ensure that investments, divestments and reviewingfinancing proposals are in accordance with AngloGold Ashanti’s strategic investments which includes the acquisition and disposalobjective of assets, capital expenditure and projects.

Attendance at Investment Committee meetings — 2010
MembersFebruary 11May 3August 6November 5
Mr RP Edey (Chairman)(1)
Mr FB Arisman (Chairman)(2)
Mr M Cutifani
Mr TT Mboweni(3)
Mr WA Nairn
Mr SM PityanaXX
Mr S VenkatakrishnanX
By invitation
Mr FB Arisman
(1)Retired on May 7, 2010
(2)Appointed chairman on August 1, 2010
(3)Appointed August 1, 2010
creating sustainable wealth.

Financial Analysis Committee

The

Financial Analysis Committee is composed of only non-executive directors, but its meetings are attended byan ad hoc committee that assists the chief executive officer andboard in assessing financial transactions. This committee did not meet during 2012.

Party Political Donations Committee

Party Political Donations Committee is an ad hoc committee which discharges the chief financial officer. Other attendeesresponsibilities delegated to the committee’s meetings include the executive vice president, business strategy and organizational effectiveness and members of the finance and treasury management teams. Mr Arisman assumed the chairmanship of the committee with effect from August 1, 2010 following the resignation of Mr Edey from the committee on May 7, 2010.

It is authorizedit by the board of the company to review and analyze issues and matters relating to aspects of the company’s financial management, including exchange and commodities markets, the hedge book management and its reduction strategies, operations cash flow requirements and asset sales.

200


The committee meets on a needs basis. In 2010, it met four times to deliberate on various transactions that were undertaken by the company relating to debt financing and the management of the hedge book.
Attendance at Financial Analysis Committee meetings — 2010
MembersJanuary 28April 20September 9November 5
Mr FB Arisman (Chairman)
Mr RP Edey(1)
Mr R Gasant(2)
Mr TT Mboweni(3)
Prof LW Nkuhlu
Mr SM PityanaX
(1)Retired on May 7, 2010
(2)Appointed on August 12, 2010
(3)Appointed on August 1, 2010
Party Political Donations Committee
The membershipin terms of the Party Political Donations Committee comprises the South African resident independent non-executive directors and the chief executive officer, namely Messrs M Cutifani, R Gasant, TT Mboweni, WA Nairn, SM Pityana and Prof LW Nkuhlu and was chaired by the deputy chairman of the board, Dr TJ Motlatsi. No meeting was held in 2010. Mr TT Mboweni took over the chairmanship of this committee in 2011 following Dr TJ Motlatsi’s retirement from the board.
The committee determines the funding of political parties in South Africa in accordance with principles set out in the political donations policy adopted by the board on April 29, 2003.
Executive Committee
policy. This committee is chaired by Mr Mark Cutifani, the chief executive officer and comprises members of the executive team. The committee is responsible for overseeing the day-to-day management of the company’s affairs and for executing the decisions of the board. It meets at least monthly and is actively involved in the strategy development, review of the company’s values, safety performance, operations and exploration profiles and financial affairs.
Disclosures Committee
AngloGold Ashanti believes in the dissemination of credible, accurate and verifiable information. Accordingly, a Disclosures Committee, comprising senior management, has been established to manage compliance with the company’s continuous disclosure obligations and communications policy. In accordance with the updated Disclosures Policy approved by the board on May 5, 2010, the committee ensures that adequate guidelines are put in place to facilitate the process of material disclosure of company information, and bears responsibility for certain categories of information gathering and processes.
Company secretary
The company secretary assists the board in its deliberations, drawing the attention of members to their duties and ensuring, together with the executive directors and senior management, that decisions of the board are properly recorded, appropriately communicated and implemented. The company secretary, in collaboration with the group compliance manager, is responsible for ensuring that new directors are effectively inducted in terms of their duties and responsibilities. Together with the investor relations department, the company secretary provides a direct communication link with investors and liaises with the company’s share registrars on all issues affecting shareholders. The company secretarial function, in consultation with other departments, provides mandatory information required by various regulatory bodies and stock exchanges on which the company is listed. The company secretary ensures compliance with all the statutory requirements relating to the administration of the company’s share incentive scheme. She also ensures that minutes of meetings of shareholders, board and board committees are properly recorded in accordance with the South African Companies Act 61 of 1973, as amended. The company secretarial function coordinates the board’s annual evaluation process.

201did not meet during 2012.


6D.

EMPLOYEES

Legal and regulatory compliance
Legal and regulatory compliance forms an important component of AngloGold Ashanti’s corporate governance structure given the company’s geographic spread.
AngloGold Ashanti recognizes that compliance with laws and regulations of the jurisdictions in which the company has operations, promotes and sustains the reputation and standing of the company and meets the expectations of the market and society while assisting in building and maintaining a sustainable business. In this regard, the board has established the Compliance Department, headed by the group compliance manager. The compliance function has the responsibility for advising and assisting the board of directors and management in designing and implementing appropriate compliance management policies and procedures; in awareness training; in assessing, monitoring and reporting on the company’s compliance programs and practices; in implementing strategies that reinforce a safe, transparent and ethical working environment; and in ensuring consistent enforcement of policies, standards and procedures.
In furtherance of its commitment to legal and regulatory compliance, the board of directors approved a Compliance Policy Statement in October 2009. The policy seeks to establish, promote and maintain values based on compliance and an ethical culture within the spirit of the laws, regulations, codes and standards applicable in the company’s operating jurisdictions, and in the context of the company’s values, internal policies and procedures.
Compliance activities in 2010
In line with its commitment to develop and adhere to value-based principles, policies and procedures to guide its employees in the performance of their duties and conduct of internal relationships and interactions with external stakeholders, a new Code of Business Principles and Ethics was approved by the board on August 10, 2010.
Following the approval of the Code, a steering committee was formed comprising members of the following department: Compliance, Company Secretarial, Information Technology, Corporate Communication, Human Resources, Internal Audit and other relevant departments to coordinate the implementation of the Code. This was partly in fulfillment of regulations of the US Securities and Exchange Commission which require companies listed on the New York Stock Exchange to demonstrate the existence of an effective compliance program which should include the distribution of a code of ethics to all employees and relevant third parties and the company’s commitment to embedding ethical behavior among its employees and other stakeholders.
An 18-month implementation program was developed to guide the implementation of the Code. The roll-out will encompass communication and awareness raising campaigns, training in various forms and documented guidance for managing unethical situations.
To further demonstrate the importance of ethics in the company’s governance practices and the board’s commitment to the promotion of ethical conduct, the Code was formally launched by the chief executive officer on November 25, 2010. The launch was attended by the chairman of the Audit and Corporate Governance Committee, several members of management and a cross section of corporate office employees.
Given its geographic spread and the diverse nature of legislations and statutes, country representatives are being identified to oversee local compliance programs, especially as they relate to the implementation plan for the code.
As part of efforts to inculcate ethical conduct among its employees, an anti-corruption workshop was facilitated by the Ethics Institute of South Africa on November 23, 2010 and attended by the chairman of the Audit and Corporate Governance Committee, who presented the key note address. The chief executive officer and other senior managers, as well corporate office employees participated in the workshop.
Three workshops on King III, facilitated by corporate governance experts, also took place at the corporate office to educate employees on the requirements of the code.

202


6D. EMPLOYEES
The average number of attributable employees (including contractors) in the AngloGold Ashanti group over the last 3 financial years was:
             
  2010  2009  2008 
 
South Africa  35,660   37,425   37,127 
Continental Africa  15,761   15,267   15,644 
Australasia  494   1,776   1,198 
Americas  6,582   5,884   5,588 
Other, including corporate and non-gold producing subsidiaries  3,549   3,012   3,338 
 
Total
  62,046   63,364   62,895 
 

      2012     2011     2010 

South Africa

     34,186       32,082       35,660  

Continental Africa

     16,621       16,539       15,761  

Australasia

     494       509       494  

Americas

     7,896       7,389       6,582  

Other, including corporate and non-gold producing subsidiaries

     6,625       4,723       3,549  

Total

     65,822       61,242       62,046  

Labor relations and collective bargaining

AngloGold Ashanti recognizes the fundamental right of freedom of association of all employees and contractors, and adheres to collective bargaining agreements with due regard to the relevant legislation in the countries in which it operates. Relations with organized labor are founded on mutual respect, and wage negotiations are conducted in line with the company’s values.

Approximately 8391.5 percent of AngloGold Ashanti’s full-time employees are either members of a union or are catered for through collective bargaining agreements. Exceptions are the United States andIn Australia, where employees are not members of unions but where a high degree of employee participation in wage discussions is encouraged. Wage settlements are specific to each jurisdiction in which AngloGold Ashanti operates and the company’s approach is to ensure that agreements are fair but realistic, taking into account the local economic context and the impact of any settlement on the long-term viability of the business.

In 2009 wage settlements were reached without disruption to labor.

In South Africa widespread labor unrest occurred in the mining sector during 2012. The mining unrest stemmed from inter-union rivalry, dissatisfaction with socio-economic conditions and a two-yeargeneral demand for an increase in wages.

AGA was affected by unprotected strike action, during the period September 20, 2012 to October 25, 2012.

Following the unprotected strike, there appeared to be a considerable shift of membership towards the trade union AMCU (Association of Mineworkers and Construction Union) in the West Wits district. AMCU recruitment on a lesser scale also occurred in the Vaal River district.

The Mponeng mine in the West Wits was plagued by a number of underground sit-ins, which made a safe and orderly restart problematic. The mine was closed for the period November 7 to November 12, 2012 to stabilise labor relations and to ensure a halt to further sit-ins. Representatives of the traditional unions, as well as AMCU were engaged, and a facilitated process lead to an agreement setting out guiding principles for future labor matters.

Navachab Gold Mine in Namibia experienced a 13 day strike during the annual wage settlement was reached in July 2009. negotiations with the union which ended with a wage agreement for 2012 wages being concluded.

In Mali, after many years of engaging with one union, Sadiola management have seen the introduction of a second minority union. Wage negotiations for 2012 were successfully concluded.

In Ghana, a two year wage agreement was successfully concluded for the 2012 and 2013 wage period.

In Guinea settlements were reached without the loss of production, however, the negotiation processes were protracted and several months were required to reach agreement.

a one year wage agreement was successfully concluded for 2012.

In response to the industrial relations environment and the sometimes volatile economic and political context in which the company operates in West Africa, an integrated strategy for collective bargaining is being implemented,Tanzania, Geita Gold Mine management signed a revised access agreement with the aimTanzania Mine & Construction Workers Union (TAMICO) following which a recognition agreement was concluded for the purposes of creating a framework within which the companycommunication and organized labor can improve their relationship and, through collective bargaining, agree on conditions of employment in an efficient and mutually beneficial manner. The approach is a holistic one, where issues relating to the political, economic and social environment are considered in the development of this strategy.

consultation.

A pro-active approach to labor relations, integrated with other management initiatives, has been adopted at AngloGold Ashanti’s operations in Argentina, where the uncertain political and economic climate has the potential to affect relations between the various labor groups and between management and employees. Frequent dialogue with union leaders at local provincial and national level has taken place during the year. The climate among employees is also monitored, and management communicates proactively with employees to ensure that they are well informed about their conditions of employment.

At a group level,

The increase of salaries for unionized employees in an undertaking to promote internationally accepted labor relations and human resource practices at AngloGold Ashanti’s operations around the world, a global agreementArgentina was signed between the International Federation of Chemical, Energy, Mine and General Workers’ unions (ICEM) and the company.finalized in February 2012. The agreement sets out the commitmentincluded an increase of both parties20 percent from February 2013 to respectJune 2013 and advance the principles and values of internationally-accepted labor relations and human resource practice, including the relevant ILO conventions and the principles of GRI and the UNGC. Its objective is7 percent from July 2013 to enhance principles or practices established by local regulation and collective bargaining processes at operations managed directly by AngloGold Ashanti. Provision is also madeJanuary 2014. Other companies in the agreementregion which have similar agreements are on average 30 percent higher than CVSA.

Since March 2013, CVSA recognized a new union for ongoing dialogue betweenwhite collar workers. This union will represent all managers, supervisors and support employees.

Representation for our contractors (truckers and construction) is an increasing concern resulting in strikes on all projects and sites in Santa Cruz, including CVSA. Meetings with the company anddifferent general managers of the ICEM at a corporate level.

203sites in Santa Cruz are being held to address these issues.


6E.

SHARE OWNERSHIP

6E. SHARE OWNERSHIP
DIRECTORS’ AND PRESCRIBED OFFICERS’ INTERESTS IN ORDINARY SHARES
At December 31, 2010, the members of AngloGold Ashanti’s board of directors beneficially held the aggregate of 26,135 ordinary shares of the company (not including stock options or other equity awards), which represented 0.0069 percent of the company’s issued share capital at that date.

The interests of the directors and prescribed officers in the ordinary shares of the company at December 31, 2010 are shown below. There have been no changes2012 which did not individually exceed 1 percent of the company’s issued ordinary share capital, were:

 

 
     Beneficial     Beneficial     
     Direct  Indirect     Direct  Indirect 

 

 
     December 31, 2012             December 31, 2011         

 

 

Non-executive directors

          

FB Arisman

     -    4,984       -    4,984  

LW Nkuhlu

     -    800       -    800  

 

 

Total

     -    5,784       -    5,784  

 

 

Executive directors

          

M Cutifani

     61,692    -       10,000    -  

S Venkatakrishnan

     52,508    -       10,351    -  

 

 

Total

     114,200    -       20,351    -  

 

 

Prescribed officers

          

AM O’Neill

     -    7,000       -    7,000  

CE Carter

     25,078    -       7,037    -  

 

 
     25,078    7,000       7,037    7,000  

 

 

Grand total

     139,278    12,784       27,388    12,784  

 

 

A register detailing directors and prescribed officers’ interests in contracts is available for inspection at the interests since Decembercompany’s registered and corporate office.

CHANGE IN DIRECTOR’S AND PRESCRIBED OFFICER’S INTERESTS IN ANGLOGOLD ASHANTI SHARES SINCE DECEMBER 31, 2010.

         
  Beneficial 
  Direct  Indirect 
  December 31, 2010 
 
Executive directors
        
M Cutifani  10,000    
S Venkatakrishnan  10,351    
 
Total
  20,351    
 
Non-executive directors
        
FB Arisman     4,984 
LW Nkuhlu     800 
 
Total
     5,784 
 
Grand total
  20,351   5,784 
 
2012

Date of
transaction
Type of transactionNumber
of shares
Direct/indirect
beneficial
holding

Non-executive director

LW Nkuhlu

February 22, 2013On-market purchase of AngloGold Ashanti ordinary shares2,200Indirect

Executive directors

S Venkatakrishnan

February 27, 2013On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan3,429Direct

M Cutifani

March 1, 2013On market sale of shares35,580Direct
March 1, 2013Off market purchase of shares from the exercise of options88,594Direct

Company Secretary

ME Sanz Perez

March 1, 2013On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan1,135Direct

Prescribed officers

GJ Ehm

February 22, 2013On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan1,256Direct

MP O’Hare

February 27, 2013On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan927Direct

Date of
transaction
Type of transactionNumber
of shares
Direct/indirect
beneficial
holding

I Boninelli

February 27,2013On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan1,284Direct

CE Carter

February 27,2013On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan1,716Direct

DC Noko

February 27,2013On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan615Direct

RW Largent

February 28, 2013On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan1,881Direct

RN Duffy

March 1, 2013On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan1,180Direct

MD Macfarlane

March 6, 2013On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan452Direct

SHARE OWNERSHIP OF EXECUTIVE OFFICERS/EXECUTIVE MANAGEMENT

Under the Listings Requirements of the JSE, AngloGold Ashanti is not required to disclose, and it does not otherwise disclose or ascertain, share ownership of individual executive officers/executive management in the share capital of AngloGold Ashanti. However, to the best of its knowledge, AngloGold Ashanti believes that AngloGold Ashanti ordinary shares held by executive officers, in aggregate;aggregate, do not exceed 1 percent of the company’s issued ordinary share capital.

DIRECTORS’ INTERESTS IN E ORDINARY SHARES

SM Pityana, an independent non-executive director of AngloGold Ashanti as at December 31, 2012, has an indirect beneficial holding in the company given that he is a Trustee and beneficiary of a trust which holds a 44 percent interest in Izingwe Holdings, the company’s BEE partner. As at December 31, 2012, Izingwe Holdings held 700,000 E ordinary shares in the issued capital of the company (December 31, 2011: 1,050,000 E ordinary shares). This holding is unchanged at the date of this report.

MINIMUM SHAREHOLDING REQUIREMENT FOR EXECUTIVES

With effect from March 2013, a minimum shareholding requirement (MSR) will be applicable to all executives as indicated below:

Executive directors

Within three years of appointment (or for existing executives, from introduction of this rule) executive directors (CEO and CFO) are to accumulate a MSR of AngloGold Ashanti shares to the value of 100 percent of net annual base salary; and

At the end of six years, executive directors are to accumulate a MSR of AngloGold Ashanti shares to the value of 200 percent of net annual base salary (additional 100 percent MSR) which they will be required to hold on an on-going basis.

Executive Committee members

Within three years of appointment (or for existing executives, from the introduction of this rule), Executive Committee members are to accumulate a MSR of AngloGold Ashanti shares to the value of 75 percent of net annual base salary; and

At the end of six years, Executive Committee members are to accumulate a MSR of AngloGold Ashanti shares to the value of 150 percent of net annual base salary (additional 75 percent MSR) which they will be required to hold on an on-going basis.

Co-Investment Executive Share Plan

To assist executives in meeting their MSR’s, with effect from February 2013, they were given the opportunity, on a voluntary basis, to participate in the Co-Investment Plan (CIP), this has been adopted on the conditions below:

Executives will be allowed to take up to 50 percent of their after tax cash bonus to participate in a further matching scheme by purchasing shares in AngloGold Ashanti, and the company will match their initial investment into the scheme at 150 percent, with vesting over a two-year period in two equal tranches.

SHARE OWNERSHIP OF EMPLOYEES

At a general meeting of shareholders held on December 11, 2006, members approved the creation of 4,280,000 E ordinary shares of 25 South African cents pursuant to an employee share ownership plan for the benefit of certain AngloGold Ashanti employees, of which the majority are historically disadvantaged South Africans as defined in the Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry. For details on the E ordinary share capital, see “Item 7.:7: Shareholders and related party transactions  E Ordinary shares”.

At a general meeting held on May 11, 2011, shareholders approved an amendment to the BEE transaction authorising an additional issue of 48,923 ordinary shares to be made to the ESOP and the reinstatement of lapsed E ordinary shares to be made. The amendment also revised changes to the vesting criteria and duration of the scheme.

On June 9, 2011, a total of 1,329,164 E ordinary shares were reinstated.

AngloGold Share Incentive Scheme

AngloGold Ashanti operates a share incentive scheme through which executive directors, executive vice presidents and management groups of the company and its subsidiaries are given the opportunity to acquire shares in the company. The objective is to incentivize such employees to identify themselves more closely with the fortunes of the group and its continued growth and to promote the retention of such employees.

Non-executive directors are not eligible for participation in the share incentive scheme.

At the annual general meeting held on May 7, 2010, shareholders authorized that 17,000,000 shares may be allocated for the purposes of the scheme. Prior to this authorization, the maximum number of shares attributable to the scheme was 2.75 percent of the total number of ordinary shares in issue from time to time. The maximum aggregate number of shares which may be acquired by any one participant in the scheme is 5 percent of the shares attributable to the scheme or 850,000 ordinary shares per employee could be issued in aggregate (2009: 498,080)(2011: 850,000).

Employees participate in the share incentive scheme to the extent that they are granted options or rights to acquire shares and accept them. All options or rights which have not been exercised within ten years from the date on which they were granted, automatically expire.

204


The incentives offered by AngloGold Ashanti are reviewed periodically to ensure that they remain globally competitive, so as to attract, reward and retain managers of the highest caliber. As a result, several types of incentives, each with their own issue and vesting criteria have been granted to employees. These are collectively known as the “AngloGold Share Incentive SchemeScheme” or share“share incentive scheme”.

Although the Remuneration Committee has the discretion to incentivize employees through the issue of shares, only options or rights have so far been granted.

The type and vesting criteria of the options or rights granted are:

Time-related
The granting of time-related options was approved by shareholders at the general meeting held on June 4, 1998 and amended by shareholders at the annual general meeting held on April 30, 2002, when it was agreed that no further time-related options would be granted and all options granted hereunder will terminate on February 1, 2012, being the date on which the last options granted under this criteria may be exercised or they will expire.
Time-related options vest over a five-year period from the date of grant and may be exercised in tranches of 20 percent each in years two, three and four and 40 percent in year five. As of the date of this report, all options granted and outstanding have vested in full.

Performance-related

The granting of performance-related options was approved by shareholders at the annual general meeting held on April 30, 2002 and amended at the annual general meeting held on April 29, 2005 when it was agreed that no further performance related options would be granted and all options granted hereunder will terminate on November 1, 2014, being the date on which the last options granted under this criteria may be exercised or they will expire.

Performance-related options granted vest in full, three years from the date of grant, provided that the conditions under which the options were granted are met. All options granted and outstanding vested in full on November 1, 2007.

Bonus Share Plan (BSP)

The granting of rights in terms ofawards pursuant to the BSP was approved by shareholders at the annual general meeting held on April 29, 2005 and amended at the general meeting held on May 6, 2008 when shareholders approved an increase in the maximum level of the bonus payable to eligible participants, as well as shortening the vesting period. Executive directors, executive vice presidents and other management groups and employees are eligible for participation. Each award made in respect of the BSP entitles the holder to acquire one ordinary share at “nil” cost. In respect of all awards granted to and including 2007, these awards vest in full, three years from the date of grant, provided that the participant is still in the employ of the company at the date of vesting unless an event, such as death, retirement or redundancy occurs which may result in an earlier vesting date. In respect of awards granted in 2008 and onwards, the vesting period has been shortened to 40 percent in year one and 60 percent in year two from the date of grant or, in the event that the exercising of awards only takes place in year three, then 120 percent of awards granted will be available to such participants.

Approval for exercising.

the following changes was granted at the extraordinary general meeting on March 11, 2013. The 20 percent uplift for the retention of shares for 36 months will fall away and will now be added to the initial 100 percent resulting in an allocation of 120 percent share matching for all management. The Executive Committee members will receive an increased allocation from 120 percent to 150 percent. The vesting period has therefore been shortened to two years with 50 percent vesting 12 months after the date of issue and the remaining 50 percent vesting 24 months after the date of issue.

Long-Term Incentive Plan (LTIP)

The granting of rightsawards in terms of the LTIP was approved by shareholders at the annual general meeting held on April 29, 2005. Executive directors, executive vice presidents and selected senior management are eligible for participation. Each award made in respect of the LTIP entitles the holder to acquire one ordinary share at “nil” cost. Awards granted vest three years from date of grant, to the extent that the stretched company performance targets, under which the rights were granted, are met and provided that the participant is still in the employ of the company, or unless an event, such as death, retirement or redundancy occurs which may result in an earlier vesting date.

205


The Remuneration Committee has approved a new retention bonus scheme comprising both cash (40 percent of 2013 total base pay) and shares (60 percent of base pay) which will be implemented on March 1, 2013 for Executive Committee members. This will be implemented over the short term to support a strategy of retaining the top management for a minimum 18 months to ensure delivery on key business imperatives while a new Chief Executive Officer is identified and inducted. The share award will be a performance-based share (LTIP) granted in March 2013. Subject to the performance conditions, these shares will vest at the end of August 2014. In line with the LTIP vesting, the cash portion will be delivered at the end of August 2014, based on the achievement of the performance conditions.

The allocation to the Chief Financial Officer will be 80 percent cash and 60 percent shares.

PARTICIPATION BY EXECUTIVE DIRECTORS, EXECUTIVE MANAGEMENT AND OTHER MANAGERS IN THE ANGLOGOLD SHARE INCENTIVE SCHEME

Details of the options and rights to subscribe for ordinary shares in the company granted to, and exercised by, executive directors, executive management and other managers on an aggregate basis during the year to December 31, 20102012 and subsequent to year-end are set out in the table below.

                     
          Executive  Other    
          manage-  manage-  Total 
  M Cutifani  Venkat(1)  ment(2)  ment(2)  scheme(3) 
 
Granted and outstanding at January 1, 2010
                    
Number  100,127   82,184   394,814   2,650,559   3,227,684 
 
Granted during the year(4)
                    
Number  77,694   40,617   142,873   1,181,596   1,442,780 
 
Exercised during the year
                    
Number        (28,241)  (795,170)  (823,411)
Pre-tax gain at date of exercise (value) — R        9,155,351   193,379,517   202,534,868 
Lapsed during the year
                    
Number     (5,781)  (17,535)  (278,981)  (302,297)
 
Held at December 31, 2010
                    
Number  177,821   117,020   491,911   2,758,004   3,544,756 
 
Latest expiry date
 Feb 23, 2020 Feb 23, 2020 Feb 23, 2020 Feb 23, 2020 Feb 23, 2020
 

Number of options and awards granted

    Balance at
January 1,
2012
   

Granted
during

2012

   

Exercised
during

2012

   

Pre-tax

gains on share
options
exercised

($’000)

   

Lapsed
during

2012

   

Balance

as at
December 31,
2012(5)

 

  Executive Directors

            

  M Cutifani

   258,210     112,183     86,293     2,800     12,209     271,891  

  S Venkatakrishnan

   160,966     52,176     70,375     2,283     6,372     136,395  
   419,176     164,359     156,668     5,083     18,581     408,286  

  Prescribed officers(1)

            

  I Boninelli

   8,568     21,590     -     -     -     30,158  

  CE Carter

   76,627     25,507     32,621     1,058     3,182     66,331  

  RN Duffy

   85,394     27,790     -     -     3,536     109,648  

  GJ Ehm

   48,845     22,286     -     -     2,660     68,471  

  RW Largent

   88,331     26,083     52,069     1,711     6,139     56,206  

  RL Lazare(4)

   41,573     1,901     34,279     1,243     9,195     -  

  MP O’Hare

   54,281     22,809     -     -     2,471     74,619  

  M MacFarlane(2)

   -     -     -     -     -     -  

  AM O’Neill

   108,544     45,512     -     -     3,943     150,113  

  D Noko(3)

   -     -     -     -     -     -  

  ME Sanz Perez

   8,406     13,387     -     -     -     21,793  

  YZ Simelane

   32,008     13,350     -     -     2,389     42,969  

  Total prescribed officers

   552,577     220,215     118,969     4,012     33,515     620,308  

  Other management

   3,006,829     1,592,126     670,004     23,155     377,216     3,551,735  

  Total share incentive scheme

   3,978,582     1,976,700     945,641     32,250     429,312     4,580,329  

(1)
(1)Venkat refers

Pursuant to S Venkatakrishnan

(2)As a resultthe South African Companies Act 71, of 2008 (as amended), which came into effect on May 1, 2011, companies are required to identify and disclose the remuneration for the prescribed officers of the change in status,company.

(2)

M MacFarlane was appointed to the movementsExecutive Committee with effect from June 1, 2012 and therefore has no holdings/grants to opening balances were madedate.

(3)

D Noko was appointed to the Executive Committee with effect from executive management statusJune 15, 2012 and therefore has no holdings/grants to other managers — 91,119 options/awardsdate.

(4)

RL Lazare retired from the company with effect from March 31, 2012.

(3)(5)Of the 3,544,756

The latest expiry date of all options/awards granted and outstanding at December 31, 2010, 929,029 options/awards are fully vested.

(4)Awards granted since 2005 have been granted at NIL cost to participants.2012, is February 21, 2022.

Awards granted in 2011 to

Options/awards have been exercised by executive directors and executive management are as follows:

         
  BSP  LTIP(1) 
 
M Cutifani  25,086   60,940 
S Venkatakrishnan  14,462   32,098 
Top 3 earners  23,734   26,040 
Other executive management  31,962   64,700 
 
prescribed officers subsequent to year-end.

The following Excom members have exercised options/awards subsequent to year end:

(1)  The extent to which LTIPs vest is dependent upon performance criteria being met.Number of
options/awards

M Cutifani

88,594

CE Carter

13,609

RW Largent

7,966

MP O’Hare

2,306

206

A total of 1,264,872 options/awards out of the 4,580,329 options/awards granted and outstanding at December 31, 2012 are fully vested.


Awards granted since 2005 have been granted at nil cost to participants.

Non-executive directors are not eligible to participate in the share incentive scheme.

Options

Awards granted in respect of the previous year’s financial results:

  Number of awards issued in    Total(1)
2013  
     Total(2)
2012  
     Total  
2011  
 

  Executive Directors

            

  M Cutifani

     5,429         112,183         86,789    

  S Venkatakrishnan

     99,043         52,176         47,943    

  Total executive directors

     104,472         164,359         134,732    

  Prescribed officers

            

  I Boninelli

     52,314         21,590         8,568    

  CE Carter

     66,929         25,507         23,300    

  RN Duffy

     65,193         27,790         21,950    

  GJ Ehm

     59,443         22,286         18,702    

  RW Largent(3)

     76,865         26,083         22,730    

  RL Lazare(4)

     -         1,901         -    

  MP O’Hare

     66,699         22,809         12,852    

  M MacFarlane

     42,765         -         -    

  AM O’Neill

     124,961         45,512         41,528    

  D Noko

     45,334         -         -    

  ME Sanz Perez

     46,087         13,387         8,406    

  TML Setiloane(5)

     -         1,263         5,357    

  YZ Simelane

     36,218         13,350         12,085    

  Total prescribed officers

     682,808         221,478         175,478    

  Total awards to executive management

     787,280         385,837         310,210    

(1)

Includes awards granted in respect of the 20 percent top-up for the 2010 BSP awards, 2013 BSP matching award and 2013 LTIP (inclusive of the 60 percent share retention bonus award, the 40 percent deferred cash portion will be reported in the year of payment i.e. 2014).

(2)

Includes awards granted in respect of the 20 percent top-up for the 2009 BSP awards.

(3)

Received a cash payment in lieu of the 2010 BSP top-up due to US tax restrictions.

(4)

Ceased to be a prescribed officer with effect from March 31, 2012.

(5)

Ceased to be a prescribed officer with effect from August 31, 2011.

Number of time-related, performance-related, BSP and rights

LTIP awards granted

As is required to be disclosed in terms of the AngloGold Share Incentive Scheme and stock exchange regulations, the movement in respect of options and rights granted and the ordinary shares issued as a result of the exercise of options and rights during the period January 1, 20102012 to January 31, 2011February 28, 2013 is as follows:

                         
              Long-  Total    
      Perfor-  Bonus  Term  Share  Total 
  Time-  mance  Share  Incentive  Incentive  shares 
  related  related  Plan(1)  Plan(1)  Scheme  issued 
 
At January 1, 2010  28,252   639,975   1,295,708   1,263,749   3,227,684   6,100,420 
Movement during year                        
— Granted        811,638   632,142   1,442,780     
— Exercised  (27,611)  (242,551)  (468,327)  (84,922)  (823,411)  823,411 
— Lapsed — terminations     (5,492)  (86,526)  (211,279)  (302,297)    
 
At December 31, 2010  641   391,932   1,552,493   1,599,690   3,544,756   6,923,831 
 
Average exercise/issue price per share  R194.00   R241.96   R283.39   R172.03   R241.96     
 

    Performance
related
   Bonus
Share
Plan(1)
   Long-
Term
Incentive
Plan(1)
   Total
Share
Incentive
Scheme
   Total
shares
issued
 

 At January 1, 2012

   171,144     1,825,378     1,982,060     3,978,582     7,813,424  

 Movement during year

           

 – Granted

   -     993,146     983,554     1,976,700    

 – Exercised

   (47,107)     (558,042)     (340,492)     (945,641)     945,641  

 – Lapsed – terminations

   (31,070)     (104,026)     (294,216)     (429,312)       

 At December 31, 2012

   92,967     2,156,456     2,330,906     4,580,329     8,759,065  

 Average exercise/issue price per share

 outstanding

   220.09     317.88     316.28     315.08       

 Subsequent to year-end

           

 – Granted

   -     61,436     -     61,436    

 – Exercised

   (370)     (97,027)     (25,651)     (123,048)     123,048  

 – Lapsed – terminations

   -     (10,493)     (323,203)     (333,696)       

 At February 28, 2013

   92,597     2,110,372     1,982,052     4,185,021     8,882,113  

(1)
(1)

BSP and LTIP awards granted at nil cost to participants.

Effective

Following a change in the Schedule 14 of the JSE Listings Requirements (Share Incentive Schemes) on October 15, 2008, the JSE amended Schedule 14 (Requirements for share incentive schemes) of the Listings Requirements. AngloGold Ashanti is required to amend the terms of its Share Incentive Scheme by obtaining shareholder approval to amend the totalmaximum number of shares attributable to the share incentive scheme was changed from 2.75 percent of issued share capital from time to time to a fixed figure of 17,000,000. The maximum aggregate number of shares thatwhich may be issued to the scheme. Although the amendment only had to be in placeacquired by January 1, 2011, AngloGold Ashanti sought and obtained shareholder approval at the annual general meeting held on May 7, 2010 authorizing the directors to issue up to 17,000,000 shares, including options/awards granted and outstanding as at December 31, 2010. The total number of options/awards that may be issued in aggregate to any one participant toin the scheme will remain atis 5 percent of the total number of shares attributable to the scheme.

scheme, being 850,000 ordinary shares in aggregate.

Also effective October 15, 2008, the recycling of options/awards that have vested and which have been delivered and for which AngloGold Ashanti shares have been issued, is no longer allowed. The table below reflects the total number of options/awards that are unissued in terms of the share incentive scheme, as affected by this Listings Requirements rule change:

 Details  Options/Awards 
DetailsOptions/Awards

Total number of optionsoptions/awards attributable to the scheme at December 31, 20102012

   17,000,000 

Less:

  

 – Total number of options/awards granted and outstanding at December 31, 20102012

   3,544,756(4,580,329) 

 – Total number of options/awards exercised:

  

During the period October 15, to December 31, 2008

   (101,013)

During the period January 1 to December 31, 2009

   (1,131,916)

During the period January 1 to December 31, 2010

   (823,411)

– During the period January 1 to December 31, 2011

(889,593) 

– During the period January 1 to December 31, 2012

(945,641

Total options/awards available but unissued at December 31, 20102012

   11,398,9048,528,097 

207


ITEM 7: SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

OVERVIEW

DESCRIPTION OF ANGLOGOLD ASHANTI’S SHARE CAPITAL

AngloGold Ashanti’s share capital consists of four classes of stock:

Ordinary shares, par value 25 South African cents each (the “ordinary shares”);

Ordinary shares, par value 25 South African cents each (the “ordinary shares”);
E-Ordinary shares, par value 25 South African cents each (the “E-ordinary shares”);
A redeemable preference shares, par value 50 South African cents each (the “A preference shares”); and
B redeemable preference shares, par value 1 South African cent each (the “B preference shares”).

E-Ordinary shares, par value 25 South African cents each (the “E-ordinary shares”);

A redeemable preference shares, par value 50 South African cents each (the “A preference shares”); and

B redeemable preference shares, par value 1 South African cent each (the “B preference shares”).

The authorized and issued share capital of AngloGold at December 31, 2010,2012, is set out below:

         
Title of class Authorized  Issued 
 
Ordinary shares  600,000,000   381,204,080 
E-Ordinary shares  4,280,000   2,806,126 
A preference shares  2,000,000   2,000,000 
B preference shares  5,000,000   778,896 
 

Title of class    Authorized     Issued 

Ordinary shares

     600,000,000        383,320,962   

E-Ordinary shares

     4,280,000        1,617,752   

A preference shares

     2,000,000        2,000,000   

B preference shares

     5,000,000        778,896   

 

 

All the issued ordinary shares, E ordinary shares, A redeemable preference shares and B redeemable preference shares are fully paid and are not subject to further calls or assessment by AngloGold Ashanti. For a discussion of rights attaching to the ordinary shares, E ordinary shares, the A redeemable preference shares and the B redeemable preference shares, see “Item 10B.: Memorandum and Articles of Association”Incorporation”.

The following are the movements in the ordinary issued share capital at December 31:

Ordinary shares

                         
  Number of      Number of      Number of    
  Shares  Rand  Shares  Rand  Shares  Rand 
  2010  2009  2008 
 
At January 1  362,240,669   90,560,167   353,483,410   88,370,853   277,457,471   69,364,368 
Issued during the year:                        
- Rights offer              69,470,442   17,367,611 
- Golden Cycle acquisition              3,181,198   795,299 
- São Bento acquisition              2,701,660   675,415 
- Equity offering to fund the initial 35 percent interest in the Kibali gold project        7,624,162   1,906,041       
- Equity raising — proceeds used to part fund the hedge elimination  18,140,000   4,535,000             
- Bokamoso ESOP on conversion of E ordinary shares        1,181   295   94   24 
- Exercise of options by participants in the AngloGold share Incentive Scheme  823,411   205,853   1,131,916   282,979   672,545   168,136 
   
   381,204,080   95,301,020   362,240,669   90,560,167   353,483,410   88,370,853 
   

    Number of
Shares
   Rand   Number of
Shares
   Rand   Number of
Shares
   Rand 
    2012     2011     2010  
    

At January 1

   382,242,343     95,560,586     381,204,080     95,301,020     362,240,669     90,560,167  

Issued during the year:

               

- Equity raising – proceeds used to part fund the hedge elimination

                       18,140,000     4,535,000  

- Bokamoso ESOP on conversion of E ordinary shares

   84,446     21,112     60,695     15,174            

- Izingwe on conversion of E ordinary shares

   48,532     12,133     39,052     9,763            

- BEE transaction (as approved by shareholders on May 11, 2011) Bokamoso ESOP

             48,923     12,231            

- Exercise of options by participants in the AngloGold share Incentive Scheme

   945,641     236,410     889,593     222,398     823,411     205,853  
    383,320,962     95,830,241     382,242,343     95,560,586     381,204,080     95,301,020  

During the period January 1, 20112013 to and including May 24, 2011, 269,742April 19, 2013, 361,458 ordinary shares were issued at an average issue price of R279.77R324.35 per share, resulting in 269,742383,682,420 ordinary shares being in issue at May 24, 2011.April 19, 2013. Of the 269,742361,458 ordinary shares issued during the period January 1, 20112013 to and including May 24, 2011, noApril 19, 2013, 2,138 ordinary shares were issued on conversion and cancellation of 685,87612,392 E ordinary shares in accordance with the applicable conversion formula.

208


E ordinary shares

The following are the movements in the E ordinary issued share capital at December 31:

       Number of
Shares
  Rand  Number of
Shares
  Rand  Number of
Shares
  Rand
      2012    2011    2010
    

At January 1

   2,582,962   645,741   2,806,126   701,532   3,794,998  948,749

Reinstated

      1,329,164   332,291    

Issued during the year:

          

-

 Cancelled in exchange for ordinary shares in terms of the cancellation formula   (965,210  (241,303  (1,552,328  (388,082  (988,872 (247,217)
      1,617,752   404,438   2,582,962   645,741   2,806,126  701,532  

On December 11, 2006, shareholders in general meeting authorized the creation of a maximum of 4,280,000 E ordinary shares to be issued pursuant to an Employee Share Ownership Plan (ESOP) and a black economic empowermentBlack Economic Empowerment transaction (BEEwith Izingwe Holdings (Pty) Limited (Izingwe) – (collectively, the BEE transaction). All E ordinary shares have been issued.

                         
  Number of      Number of      Number of    
  Shares  Rand  Shares  Rand  Shares  Rand 
  2010  2009  2008 
 
At January 1  3,794,998   948,749   3,966,941   991,735   4,140,230   1,035,057 
Issued during the year:                        
- Cancelled in exchange for ordinary shares in terms of the cancellation formula  (988,872)  (247,218)  (171,943)  (42,986)  (173,289)  (43,322)
   
   2,806,126   701,531   3,794,998   948,749   3,966,941   991,735 

In terms of the original authority granted by shareholders in 2006, on vesting, E ordinary shares arewere cancelled in exchange for ordinary shares in accordance with the cancellation formula. All

However, in November 2011, in addition to the reinstatement of cancelled E ordinary shares, shareholders approved an amendment to the cancellation formula through the resetting of the strike price. Participants to the ESOP and Izingwe are now guaranteed a minimum conversion price of R40 per E ordinary share with a maximum of R90 per E ordinary share for the ESOP and R70 per E ordinary share for Izingwe from a base price of R320 and R330 per share, respectively.

E ordinary shareholders are entitled to vote at all ordinary shareholder meetings but do not hold veto rights.

Dividends are payable on E ordinary shares, in an amount equal to 50 percent of dividends payable to ordinary shareholders.

E ordinary shares which vest and are exchanged for ordinary shares are cancelled and may not be re-issued and therefore, doesre-issued. Therefore, they do not form part of the unissued share capital of the company.

E ordinary share capital amounting to R89,954,970 in respect of 988,872 vested, unconverted and cancelled E ordinary shares, was transferred to ordinary share premium during 2010. E ordinary shares do not convert to ordinary shares in the instance when the market price of an AngloGold Ashanti ordinary share is less than the value of the E ordinary share as calculated in accordance with the cancellation formula.
On November 1, 2009, the first tranche of the E ordinary shares issued to the Bokamoso ESOP and to Izingwe Holdings (Pty) Limited (Izingwe) vested. In terms of the rules, if at the date of the vesting the cost price of the E Ordinary shares as calculated in accordance with the cancellation formula is greater than the market price on the last business day prior to the date of vesting, then the conversion of the E ordinary shares will be deferred. In respect of the Bokamoso ESOP and Izingwe, vesting was deferred to May 1, 2010 at which time the E ordinary shares were cancelled without benefit.
On November 1, 2010, the second tranche of the E ordinary shares issued to the Bokamoso ESOP and to Izingwe vested. In terms of the rules, if at the date of the vesting the cost price of the E Ordinary shares as calculated in accordance with the cancellation formula is greater than the market price of the last business day prior to the date of vesting, then the conversion of the E ordinary shares will be deferred. In respect of the Bokamoso ESOP vesting has been deferred to May 1, 2011 at which time, the E ordinary shares will either be exchanged for AngloGold Ashanti ordinary shares or will be cancelled without benefit, as calculated in accordance with the cancellation formula. In respect of the E ordinary shares issued to Izingwe, and in accordance with the rules, notice was received from Izingwe deferring vesting. Izingwe has during the period November 1, 2010 to and including May 1, 2011 (extended vesting period), the option to exercise its rights to exchange the E ordinary shares for AngloGold Ashanti ordinary shares on the giving of such notice to do so, in accordance with the cancellation formula. Any E ordinary shares that are unexercised during the extended vesting period will be cancelled.
On April 14, 2011, AngloGold Ashanti announced the proposed restructuring of the BEE transaction, subject to shareholder approval. A circular providing full details of the proposed restructuring complete with the notice of general meeting was posted to shareholders on the same day and a general meeting to consider the proposed restructuring was held on May 11, 2011 at which, all the resolutions to give effect to the proposed restructuring were approved by the requisite majority.

Redeemable preference shares

The A and B redeemable preference shares, all of which are held by wholly owned subsidiary, Eastvaal Gold Holdings Limited, may not be transferred and are redeemable from the realization of the assets relating to the Moab lease area after the cessation of mining operations in the area. The shares carry the right to receive dividends equivalent to the profits (net of royalty, ongoing capital expenditure and taxation) from operations in the area. No further A and B redeemable preference shares will be issued.

209


7A.

MAJOR SHAREHOLDERS

7A. MAJOR SHAREHOLDERS
According to information available to the directors, the following are the only shareholders holding, directly or indirectly, in excess of 5%5 percent of the ordinary issued share capital of the company:
                         
Ordinary shares held at December 31, 2010  December 31, 2009  December 31, 2008 
  Number of  % Voting  Number of  % Voting  Number of  % Voting 
Shareholder* Shares  Rights  Shares  Rights  Shares  Rights 
 
Paulson & Co., Inc  41,000,000   10.76   42,849,864   11.83  Not disclosed    
Allan Gray Unit Trust Management Limited  31,668,339   8.31   36,689,809   10.13   42,865,757   12.13 
Fidelity Management & Research  28,383,749   7.45   12,862,911   3.55  Not disclosed    
 
*Shares may not necessarily reflect the beneficial shareholder

Ordinary shares held at  December 31, 2012   December 31, 2011   December 31, 2010
Shareholder*  Number of
Shares
   

percent

Voting
Rights

   Number of
Shares
   

percent

Voting
Rights

   Number of
Shares
   

percent

Voting
Rights

     

Paulson & Co., Inc

   28,607,495     7.46     32,570,668     8.52     41,000,000    10.76

Allan Gray Unit Trust Management Limited

   20,510,646     5.35     24,710,806     6.46     31,668,339    8.31

Investec Asset Management Pty Ltd (South Africa)

   20,108,121     5.25             

Public Investment Corp. of South Africa

   20,050,361     5.23             

Fidelity Management & Research

                       28,383,749    7.45

*Shares may not necessarily reflect the beneficial shareholder

At December 31, 2010,2012, a total of 182,168,922153,711,993 shares (or 47.7940.10 percent of issued ordinary share capital) waswere held by The Bank of New York Mellon, as Depositary for the company’s American Depositary Receipt program. Each American Depositary Share (ADS) is equivalent to one ordinary share. At December 31, 2010,2012, the number of persons who were registered holders of ADSs was reported at 3,675.3,196. AngloGold Ashanti is aware that many ADSs are held of record by brokers and other nominees, and accordingly the above numbers are not necessarily representative of the actual number of persons who are beneficial holders of ADSs or the number of ADSs beneficially held by these persons.

All shareholders have the same voting rights.

As at December 31, 2010,2012, there were 9,0499,535 holders of record of AngloGold Ashanti ordinary shares. Of these holders 365351 had registered addresses in the United States and held a total of 69,99963,900 ordinary shares, approximately 0.01840.017 percent of the total outstanding ordinary shares. In addition, certain accounts of record with registered addresses outside the United States, including The Bank of New York Mellon, hold AngloGold Ashanti ordinary shares, in whole or in part, beneficially for United States persons.

At May 24, 2011,180,324,850March 31, 2013,151,193,769 ADSs or approximately 47.2739.4 percent of the total issued ordinary share capital, were issued and outstanding and held of record by approximately 3,6043,142 registered holders .

Insofar as is known to AngloGold Ashanti, there was no person who, directly or indirectly, jointly or severally, exercised or could exercise control over AngloGold Ashanti, nor is AngloGold Ashanti aware of any arrangements which might result in a change in control of AngloGold Ashanti.

7B. RELATED PARTY TRANSACTIONS
Related party transactions are concluded on an arm’s length basis.

7B.

RELATED PARTY TRANSACTIONS

The groupCompany had the following transactions with related parties during the years ended December 31, 2010, 20092012, 2011 and 2008:

                     
At December 31 2010  2009  2008 
  Purchases  Amounts  Purchases  Amounts  Purchases 
  (by)/from  owed to/ (by)  (by)/from  owed to/ (by)  (by)/from 
 related party  related party  related party  related party  related party 
(in millions) $  $  $  $  $ 
 
Purchases of goods and services (by)/from equity accounted joint ventures and associates
                    
Margaret Water Company  3      1      1 
Société d’Exploitation des Mines d’Or de Sadiola S.A.  (8)  (2)  (10)  (3)  (5)
Société d’Exploitation des Mines d’Or de Yatela S.A.  (3)     (3)     (1)
Société des Mines de Morila S.A.  (8)  (1)  (6)  (1)  (5)
Trans-Siberian Gold plc  1         (1)   
   
   (15)  (3)  (18)  (5)  (10)
   

210

2010:


At December 31 2012  2011   2010  

 

(in millions)

 

Purchases

(by)/from

related party

$

  

Amounts

owed to/(by)

related party

$

  

Purchases 

(by)/from 

related party 

  

Amounts 

owed to/ (by) 

related party 

  

Purchases

(by)/from

related party

$

 
Purchases of goods and services (by)/from equity accounted joint ventures and associates        

Margaret Water Company

  4    -            

Société d’Exploitation des Mines

d’Or de Sadiola S.A.

  (14)    (2)    (12)    (2)    (8)  

Société d’Exploitation des Mines

d’Or de Yatela S.A.

  (1)    -    (2)    (1)    (3)  

Société des Mines d’Or MorilaS.A.

  (3)    -    (4)        (8)  

Trans-Siberian Gold plc

  -    -             
   (14)    (2)    (12)    (3)    (15)  

Amounts owed to/due by joint venture and associate related parties arising from purchases of goods and services are unsecured and non-interest bearing.

As at December 31, 2012 and 2011, there are no outstanding balances arising from purchases of goods and services owed to related parties.

On February 19, 2013, AngloGold Ashanti entered into an agreement (Agreement) with Izingwe Property Managers (Pty) Limited (Izingwe Property) under which Izingwe Property will assist AngloGold Ashanti in the planning, design, development and construction of 200 units of housing in South Africa for employees of AngloGold Ashanti. Izingwe Property’s roles will be those of development and project manager and main contractor. The terms of the Agreement call for payments from AngloGold Ashanti to Izingwe Property in the amount of $6.7 million in consideration for Izingwe Property’s services. Mr Sipho Pityana, a non-executive director of the company, is Chairman and a 44 percent shareholder of Izingwe Holdings (Proprietary) Limited (Izingwe), AngloGold Ashanti’s BEE partner. Izingwe Capital (Proprietary) Limited, an associate company of Izingwe is the majority shareholder of Izingwe Property.

Rand Refinery Limited (Rand Refinery) became an associate of AngloGold Ashanti on December 3, 2012 when AngloGold Ashanti sold five percent of Rand Refinery. AngloGold Ashanti held a 48.3 percent interest in Rand Refinery. Rand Refinery refines all of AngloGold Ashanti’s South African gold production and some of AngloGold Ashanti’s Continental Africa gold production.

Loans due by equity accounted joint ventures and associates for the years endedas at December 31, 2010 and 2009:

         
  2010 2009
  $ $
 
AGA-Polymetal Strategic Alliance (joint venture) (1)
     3 
Oro Group (Proprietary) Limited(2)
  2   2 
AuruMar (Proprietary) Limited (joint venture)(3)
  5   2 
Orpheo (Proprietary) Limited(3)
  1   1 
 

    

2012  

$  

  

2011

$

Oro Group (Proprietary) Limited (1)

  2    1

AuruMar (Proprietary) Limited (joint venture) (2)

  2    5

Societe d’Exploitation des Mines d’Or de Sadiola S.A. (joint venture) (3)

  36    -

Societe d’Exploitation des Mines d’Or de Yatela S.A. (joint venture) (4)

  -    -

Trans-Siberian Gold plc (5)

  -    3

Thani Ashanti Alliance Limited (joint venture) (6)

  -    20

(1)The loan was written off during 2010.
(2)

The loan bears a market related interest at a rate determined by the Oro Group (Proprietary) Limited’s board of directors and is repayable at theirits discretion.

(3)(2)

Loans are unsecured,The loan is interest free and there arehas no fixed terms of repayment.

(3)

The loan is repayable on demand and bears interest at a margin of 2 percent over the London Interbank Offered Rate (“LIBOR”) per annum.

(4)

A loan of $12 million granted during 2012 was fully impaired during the year. The loan, included in the carrying amount of the joint venture, was repayable on demand and carried interest at a margin of 2 percent over LIBOR per annum.

(5)

The loan was unsecured, carried interest at 8 percent per annum and was converted into ordinary shares during April 2012.

(6)

The loan was repayable in December 2012 but due to non-payment it was fully impaired. A write-off of $37 million is included in equity income in associates for 2012.

As at December 31, 20102012 and 2009,2011, there are no outstanding balances arising from loans owed to related parties.

7C. INTERESTS OF EXPERTS AND COUNSEL

7C.

INTERESTS OF EXPERTS AND COUNSEL

Not applicable.

211


ITEM 8: FINANCIAL INFORMATION
8A. CONSOLIDATED FINANCIAL STATEMENTS AND OTHER INFORMATION

8A.

CONSOLIDATED FINANCIAL STATEMENTS AND OTHER INFORMATION

See “Item 18: Financial statements”.

LEGAL PROCEEDINGS
No

There is no material proceeding in which a director, officer or officeraffiliate of AngloGold Ashanti hasis either a directparty adverse or indirect positionhas a material interest adverse to the company.

In addition to the proceedings described below, the company becomes involved, from time to time, in various claims, legal proceedings and complaints incidental to the ordinary course of its business.

The State of Goiás v. Mineração Serra Grande S.A. (MSG): In Brazil, in 2006, MSG received two tax assessments from the State of Goiás related to payments of state sales taxes at the rate of 12 percent 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 assessment (First Assessment) and the second assessment (Second Assessment) are approximately $96 million and $60 million, respectively. In November 2006, the administrative council’s second chamber ruled in favor of MSG and fully cancelled the tax liability related to the first period. In July 2011, the administrative council’s second chamber ruled in favor 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, with respect to the First Assessment, and June 2012, with respect to the Second Assessment, 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. Both the First Assessment and the Second Assessment have been remitted to the COMEX and are under review. MSG believes both assessments are in violation of federal legislation on sales taxes. A final hearing before the COMEX has been scheduled for May 28, 2013.

The State of Minas Gerais v. Mineração Serra Grande S.A.:In Brazil, MSG received a tax assessment in October 2003 from the State of Minas Gerais related to sales taxes on gold. The tax administrators rejected all MSG’s appeals against the assessment, reaching its closure under the Administrative Court in 2003. In 2005, the State of Minas Gerais began the Judicial Foreclosure of the assessment which is yet to be sentenced. The assessment is approximately $19 million.

As part of the acquisition by AngloGold Ashanti.Ashanti of the remaining 50 percent interest in MSG during June 2012 from Kinross Gold Corporation (Kinross), Kinross has provided an indemnity to a maximum amount of BRL255 million (approximately $127 million) against the specific exposures related to the tax assessments from the State of Goiás and the State of Minas Gerais.

Departamento Nacional de Produção Mineral (DNPM) v. AngloGold Ashanti Brazil Mineração (AABM): In Brazil, in November 2007, the DNPM, a federal mining authority, issued a tax assessment against AABM in the amount of $21 million relating to the calculation and payment by AABM of the financial contribution on mining exploitation in the period from 1991 to 2006.

AngloGold Ashanti’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 $17 million.

Notice from the Colombian Tax Office (DIAN) to AngloGold Ashanti Colombia S.A. (AGAC): AGAC received notice in January 2013 from DIAN that DIAN disagreed with the company’s tax treatment of certain items in AGAC’s 2010 income tax return. DIAN has requested that the company voluntarily amend its income tax return for the 2010 and 2011 periods. The company believes that the tax legislation has been applied correctly by AGAC and is involvedconsidering defending AGAC’s position. An estimated additional tax of $26 million will be payable if the tax returns are amended. Penalties and interest for the additional tax are expected to be $135 million based on Colombian tax law.

Ghanaian tax authorities v. AngloGold Ashanti (Ghana) Limited (AGAG): In Ghana, AGAG received tax assessments of $22.7 million in amongst other less material matters,respect of the 2006-2008 and 2009-2011 tax years, following cases:

Incertain jurisdictions, including butan audit by the tax authorities related to indirect taxes on various items. AGAG believes that the indirect taxes were not limitedproperly assessed and has lodged an objection to Argentinathe assessment. AGAG has subsequently met with the Commissioner-General and Brazil,provided its position in writing together with the Company is dealing with numerous and varied tax claims. These claims are at various stages of resolution.relevant supporting documentation. AGAG has yet to receive a response from the Commissioner-General.

In

SOUTH AFRICA:

Silicosis litigation

A

Mankayi v. AngloGold Ashanti. In October 2006, a former employee,Mr Mr. Thembekile Mankayi,, instituted a legal action in the Witwatersrand Local Division High Court of South Africa against AngloGold Ashanti, in October 2006, claiming approximately $360,000R2.6 million (approximately $0.3 million) for damages allegedly suffered as a result of silicosis. AngloGold Ashanti learntMr. Mankayi’s case was heard in the High Court of the death of Mr Mankayi on March 3, 2011 and wishes to offer condolences to his family and friends. InSouth Africa in June 2008, judgment onand an applicationappeal was givenheard in the company’sSupreme Court of Appeal in 2010. In both instances judgment was awarded in favor of AngloGold Ashanti on the basis that mine employers arean employer is indemnified against claims by employeessuch a claim for damages relating to diseases compensated under existing legislation. Anby section 35 of the Compensation for Occupational Injuries and Diseases Act, 1993 (COIDA). A further appeal that was lodged by MrMr. Mankayi was dismissed by the Supreme Court of Appeal. In August 2010,heard in the Constitutional Court of South Africa heard Mr Mankayi’s application for leave to appeal to the Constitutional Court.(Constitutional Court). On March 3, 2011, the Constitutional Court grantedheld that section 35 of COIDA does not cover an “employee” who qualifies for compensation in respect of “compensable diseases” under the leaveOccupational Diseases in Mines and Workers Act, 1973 (ODMWA). This judgment allows such qualifying employee to appeal and simultaneously grantedpursue a civil claim for damages against the Appeal. The effect thereof is thatemployer outside he provisions of either statute. Following the executor of MrConstitutional Court judgment, Mr. Mankayi’s estate may return toproceed with his case in the High Court to recover common law damages fromCourt. Without paying any amount in settlement of the claim, AngloGold Ashanti and that they are not barred by legislation from doing so. AngloGold Ashanti has several defenses availablepaid to it, and itMr. Mankayi’s estate agreed legal costs. The company will continue to defend the action. As a result ofcase on its merits.

Following the Constitutional Court decision, AngloGold Ashanti could behas become subject to numerous similar claims relating to silicosis and other Occupational Lung Diseases (OLD), including potentiallyseveral potential class actions and individual claims.

Bangumzi Bennet Balakazi and others v. AngloGold Ashanti. On or about August 21, 2012, AngloGold Ashanti was served with an application instituted by Bangumzi Bennet Balakazi 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 class actionsummons 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 has 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.

Bongani Nkala and others v. Harmony Gold Mining Company Limited, AngloGold Ashanti, Free State Consolidated Gold Mines (Operations) Limited and others. On or similar group claim. These too would be defendedabout January 8, 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 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 January 1, 1965 to date; and (ii) the companydependants of mineworkers who died as a result of silicosis (whether or not accompanied by any other disease) and adjudicatedwho worked on these gold mines at any time after January 1, 1965. AngloGold Ashanti has filed a notice of intention to oppose the application.

Individual claimants’ actions against AngloGold Ashanti. In October 2012, a further 31 individual summonses and particulars of claim were received by AngloGold Ashanti relating to silicosis and/or other OLD. The total amount being claimed in the by31 summonses is R77 million (approximately $8 million). On October 22, 2012, AngloGold Ashanti filed a notice of intention to oppose these claims. AngloGold Ashanti has also served a notice of exception to the Courts on their merits.

summonses which, if successful, is expected to require the plaintiffs to redraft the particulars of claim to correct certain errors.

AngloGold Ashanti v. Pamodzi Gold (Orkney) (Pty) Limited(Pamodzi) (in Provisional Liquidation) (Pamodzi): AngloGold Ashantisold certain mine shafts to another mining company in 1998 but continued to service them pursuant to the terms of a service contract. When Pamodzi later purchased Shafts 1 — 7 from Harmony Gold Mining Company.the shafts, AngloGold Ashanti has provided various services to Shafts 1 — 7 since it sold the Shafts to ARM in 1998. Despite not having a written agreement with Pamodzi, AngloGold Ashanti providedAshantiprovided services to Pamodzi on the same basis that it had provided services to ARM andthe previous owner, on the understanding that a new agreement would be entered into with Pamodzi once all of the commercial terms of such an agreement were finalized. On March 10, 2009, prior to AngloGold Ashanti andAshantiand Pamodzi entering into a new services agreement, a creditor of Pamodzi applied to have Pamodzi placed under provisional liquidation. This application was granted by the North Gauteng High Court. At

AngloGold Ashanti alleges that at the time of beingit was placed in provisional liquidation, Pamodzi owed AngloGold Ashanti approximately R59 million (approximately $6.5$6 million) for services rendered. AngloGold Ashanti also alleges that Pamodzi owes AngloGold Ashanti approximately R54 million (approximately $6 million) for services rendered by AngloGold Ashanti. The provisional liquidators of Pamodzi have entered into a contract with Aurora Empowerment Services. Aurora has agreedsubsequent to operate the mines pending final liquidation and Aurora possibly purchasing the company in provisional liquidation or the assets. Pamodzi owes (in addition to the R59 million mentioned above) approximately R54 million (approximately $5.9 million) to AngloGold Ashanti for services rendered post the liquidation application being made. This R54 million is an administrative costThe date of the final liquidation order has not yet been set.

On March 16, 2012, Pamodzi (in provisional liquidation) and will be a first chargefour others issued summons against the estate.

Action has been instituted by a group of AngloGold Ashanti pensioners (van der Post and others) againstin the company for introducing a CPIX capNorth Gauteng High Court, Pretoria, demanding the return of about R89.5 million (approximately $10 million) paid by Pamodzi to post retirement health care contributions byAngloGold Ashanti less than six months prior to the company. The company maintains that its action is justifiable and fair given the circumstances and precedent. Summons has been issued by the plaintiffs demandingwinding-up of Pamodzi. Plaintiffs further allege that AngloGold Ashanti restoretook possession of some 26.9 kilograms of gold owned by Pamodzi in March 2009 and demand either that the levelgold be returned or that reimbursement be provided in the amount of contributions to what pertained before the introduction of the cap. The matter has been referred to private arbitration which arbitration hearing is scheduled to take place in September 2011.

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R7.1 million (approximately $0.8 million).


InCOLOMBIA:
 Plaintiff: USER ASSOCIATION OF THE LAND ADEQUATION DISTRICT OF COELLO AND CUCUANA RIVERS (USOCOELLO)
Defendant: MINISTRY OF THE ENVIRONMENT, HOUSING AND TERRITORIAL DEVELOPMENT. MINISTRY OF MINES, INGEOMINAS

Claim:Van der PostA classet al. v. AngloGold Ashanti Limited: In May 2007, a group of AngloGold Ashanti pensioners instituted an action law suit against the government seeking to ensure thatcompany in the collective rights to a healthy environment, public health and food safety of USOCOELLO users and citizens of El Espinal, Coello and Guamo (Tolima) are protected. The suit asks that INGEOMINAS, MINISTRY OF ENVIRONMENT and MINISTRY OF MINES AND ENERGY be ordered not to declare theLa Colosamining project feasible, which implies disapproving the subtractionWitwatersrand Local Division of the 515.75 hectares fromHigh Court (now called the forest reserve as perSouth Gauteng High Court). At issue was the formulations madeintroduction of an inflation-related cap on post-retirement health care contributions by the Officecompany. The company maintains that its action was justifiable and fair given the circumstances, precedents and the contractual nature of the Attorney Generalundertaking. The plaintiffs issued a summons demanding that AngloGold Ashanti restore the level of Colombia and CORTOLIMA. Thatcontributions that prevailed before the municipalities of El Espinal, Coello and Guamo, CORTOLIMA and the Officeintroduction of the Environmentalcap. In 2011, a private arbitration hearing was postponed pending settlement negotiations. The parties settled in May 2012. The settlement agreement provided that AngloGold Ashanti will make certain health care contributions on behalf of the pensioners and Agrarian Attorneythat AngloGold Ashanti contribute the sum of Tolima Office be linked as parties to proceedings. That GGF-151 and EIG-163 mining concession contracts be suspended as a precautionary measure. The special conciliation hearing (Pacto de Cumplimiento) took place on April 27, 2011. No settlement was made and an evidence period will now commence.R800,000 ($0.1 million) toward the legal costs incurred by the pensioners.

COLOMBIA

Penalty of the Ministry of Environment againstLa Colosa class action lawsuits: The following two class action lawsuits are currently pending before different Colombian state and federal courts in relation to AngloGold Ashanti Colombia S.A.: (AGAC)’s La Colosa project, which is currently in its pre-feasibility phase and consists of three core concession contracts:

Usocoello, Cortolima, Procuraduria Regional Tolima, Universidad de Ibagué, Estudiantes de la Universidad del Rosario, Federarroz v. AGAC, Federal Department of Mines, Federal Department of the Environment, Housing and Territorial Development and Ingeominas (September 2010) (Uscocoello); and

Juan Ceballos v. Federal Department of the Environment, Housing and Territorial Development, Ingeominas, Cortolima and AGAC (February 2012).

Each lawsuit aims to stop exploration and mining in certain restricted areas affected by the La Colosa project due to environmental concerns or alleged breaches of environmental laws. Under Colombian law, restricted areas are State-protected land on which certain economic activities are restricted. AGAC has opposed, and has sought the dismissal of most of, the class action lawsuits that have been filed against it.

In 2013, the Tribunal de Cundinamarca (a Colombian appellate court) dismissed both cases known as Maria del Pilar Hurtado v. Federal Department of Mines, Ingeominas and AGAC.

The Ministryclass action lawsuit that has progressed the most is Uscocoello, which was filed in the Third Administrative Court of the District of Ibagué on September 9, 2010. It named each of Ingeominas (the Colombian regulatory agency for mining activities), the Federal Department of the Environment, Housing and Territorial Development, as well as the Federal Department of Mines as defendants. AGAC was subsequently joined to the lawsuit as an additional defendant. The plaintiffs are the User Association of the Land Adequation District of Coello and Cucuana Rivers (Usocoello) (a cooperative representing local farmers), the Autonomous Regional Corporation of Tolima

(“Cortolima”), (the government of the State of Tolima), the Office of the Attorney General of the State of Tolima (Procurador Judicial Ambiental y Agrario para el Tolima), the University of Ibagué (Estudiantes de la Universidad del Rosario), (a student association of the University of El Rosario) and Fedearroz (the Colombian association of rice growers).

The plaintiffs have petitioned the court to order the defendant governmental entities not to declare the La Colosa mining project feasible on the grounds that the project threatens a healthy environment, public health and food safety for Usocoello members and local residents. Such order by the court would result in the revocation of AGAC’s permit to temporarily use for its exploration activities on 6.39 hectares of forest reserve that are otherwise designated as restricted areas.

In addition, as each of AGAC’s three core mining concession contracts governing the La Colosa project provides that Ingeominas has the discretion to declare the underlying concession void if AGAC breaches applicable environmental laws or regulations, the plaintiffs have petitioned the court to direct Ingeominas to cancel such concession contracts on the ground that AGAC has violated the Code of Natural Resources. If plaintiffs prevail and Ingeominas is ordered to cancel AGAC’s three core concession contracts, the company would be required to abandon the La Colosa project and all of AGAC’s other existing mining concession contracts and pending proposals for new mining concession contracts would also be cancelled. In addition, AGAC would be banned from doing business with the Colombian government for a period of five years. As a result, AGAC would be unable to conduct any mining exploration or development activities during such period. However, this would not affect other AngloGold Ashanti subsidiaries operating in Colombia, which hold singularly or in concert with joint venture partners the majority of AngloGold Ashanti’s concession contracts in Colombia.

As no settlement was reached at a special conciliation hearing (Pacto de Cumplimiento) held on April 27, 2011, the trial has continued and the court is gathering evidence from the parties in preparation for its ruling.

Toche Anaima Belt class action lawsuit: In addition to the La Colosa class action lawsuits, the following lawsuit was filed in connection with the Toche Anaima Belt.

The Personero de Ibagué v. Federal Department of the Environment, Housing and Territorial Development, Ingeominas, AGAC, Continental Gold Ltda., Oro Barracuda Ltda., Fernando Montoya, Alberto Murillo and Eugenio Gomez (December 2011); and

In addition, in connection with the class action lawsuit in September 2011, the Superior Court of the District of Ibagué granted the plaintiff a preliminary injunction that resulted in the suspension of AGAC’s mining concession contracts relating to certain greenfield exploration activities in the Toche Anaima Belt. These contracts do not include AGAC’s core concession contracts relating to the La Colosa project. AGAC has appealed against this preliminary injunction and its appeal is still pending.

Cortolima’s injunction against AGAC: On March 11, 2013, Cortolima issued a regulatory injunction against AGAC alleging, among other things, that in relation to certain of AGAC’s La Colosa exploration activities, AGAC was operating without proper permits and regulatory permission and was engaging in drilling and other activities that were having negative effects on the environment. On March 22, 2013, AGAC delivered a resolution against the injunction, seeking an annulment of the action and the restoration of AGAC’s rights to continue exploration activities in the area. While the injunction remains in place, AGAC will not be able to engage in certain of its activities related to the La Colosa Project.

Department of the Environment, Housing and Territorial Development (DoE) v. AngloGold Ashanti Colombia S.A.: In Resolution No. 785 of April 29, 2009, the DoE opened an investigation against the companyAGAC and brought a list of charges against the companyit for carrying out exploratory activities at the La Colosa project without having processedobtained the subtractionapplicable permit to partially or temporarily use the soil of a forest reserve that was designated as a restricted area. In particular, the DoE alleged that AGAC violated Article 210 of the area fromCode of Natural Resources (the “Code”), which requires a company to obtain such a permit when it plans on carrying out an economic activity that will involve the forest reserve. Aftercutting down of trees. In 2010, while conducting its investigation, the evidence period,DoE also proceeded to update the Environmental Ministryexisting mining terms of reference, which set forth the environmental studies and other environmental activities that each mining company is required to conduct in connection with the exploration phase of its respective mining project. As reflected in Article 34 of the Code, the new terms of reference specify that exploration may not be carried out in restricted areas without a permit sanctioning such exploration. The DoE then resolved that AGAC was in breach of the 2010 terms of reference and issued a fine against AGAC.

As the company.parties were unable to reach an agreement at a conciliation meeting held on May 30, 2011, AGAC filed an action against the DoE in the Administrative Superior Court of the Cundinamarca District to annul the penalties. On April 16, 2012, the action was submitted to the court office of the Cundinamarca District for admission.

In November 2012, AGAC filed a legal action alleging a violation of AGAC’s constitutional rights, also known as a tutela action. A hearing on the tutela action has not yet been scheduled.

Should the DoE’s fine ultimately be upheld by the courts, Ingeominas would then have the discretion to terminate AGAC’s three core mining concession contracts relating to the La Colosa project. In the event of such termination, AGAC would be required to abandon the La Colosa project and all of AGAC’s other existing mining concession contracts and pending proposals for new mining concession contracts would also be cancelled. In addition, AGAC would be banned from doing business with the Colombian government for a period of five years. As a result, AGAC would be unable to conduct any mining exploration or development activities during such period. However, this would not affect other AngloGold Ashanti commenced prejudicial conciliation proceedings,subsidiaries operating in Colombia, which hold singularly or in concert with joint venture partners the majority of AngloGold Ashanti’s concession contracts in Colombia.

DUBAI

AngloGold Ashanti v. Thani Investments LLC (TI): In September 2011, AGA made advances totaling $35 million under a loan agreement entered into with Thani Ashanti Alliance Limited (TAAL). The loan was guaranteed by TI and matured on December 31, 2012.

Payment of the loan plus interest was not made at maturity which gave rise to an event of default under the loan agreement. AngloGold Ashanti sent notices of demand to TI and other related parties. In February 2013, at the request of AngloGold Ashanti, a Dubai court issued an order granting the attachment of a bank account of TI in favor of AngloGold Ashanti. No funds could be recovered from the bank account. AngloGold Ashanti has brought in a claim against TI under the Environmental Ministry, as required.

guarantee in the Dubai courts. In addition, AngloGold Ashanti has also brought an action to liquidate TI in the Dubai courts.

GHANA

:

Westchester/Africore Limited and Ashanti Goldfields Company Limited: Westchester/Africore Limited instituted an action against Ashanti Goldfields Company Limited in the High Court in Accra claiming damages for breach of an Exploration and Option Agreement. A provision in the Agreement stated that the parties should settle the matter by arbitration under the Arbitration Act of Ghana. In February 2002, the court directed the plaintiffs to seek arbitration as stipulated in the Agreement. The plaintiffs requested arbitration under the International Chamber of Commerce (ICC). Ashanti raised jurisdictional objections, which the ICC supported. The plaintiffs subsequently applied to pursue the matter through arbitration in Ghana. AngloGold Ashanti nominated an arbitrator in August 2006 and notified the plaintiffs accordingly. The plaintiffs then unilaterally pulled out of the arbitration and filed a Notice to maintain the action in the High Court. Ashanti Goldfields filed its defence and the trial began on February 13, 2009. Plaintiff sought leave to amend their Statement of Claim. The Plaintiffs were claiming an amount of $20 million. They however later amended their Statement of Claim to specific damages of $9 million. After several adjournments, the court gave judgment in favor of the Plaintiffs on March 31, 2011 and awarded damages of $17.4 million and GHS 30,000 ($19,726) costs. The Company has instructed Counsel to file a Notice of Appeal and Stay of Execution on groundsinter aliathat the judgment is against the weight of the evidence given and that the trial judge unduly relied on the evidence of the Plaintiff’s expert witness.
Westchester Resources Limited (Westchester) / Africore Ghana Limited (Africore) vs. AngloGold Ashanti v (Ghana) Limited (AGAG): Westchester and Africore (together, the “plaintiffs”) commenced separate actions in the High Court of Ghana claiming that AGAG breached the exploration agreement they respectively entered into with AGAG on October 31, 2000. The cases were consolidated.

On March 31, 2011 the High Court gave judgment in favor of the plaintiffs and awarded total damages of $17.4 million to Westchester and Africore jointly for breach of the agreements and total costs of GHc30,000. On April 4, 2011 AGAG filed an appeal to the Court of Appeal and subsequently applied to the trial court for an order for a stay of execution of the judgment pending the hearing and determination of the appeal. The court granted the application on condition that AGAG pay $3 million to each plaintiff (with the full amounts to be awarded upon execution of the judgment if appeals are unsuccessful) and that the plaintiffs give an undertaking that the said sums would be refunded in the event that AGAG’s appeal is successful. On October 24, 2011, following AGAG’s application before the Court of Appeal requesting a variation of the conditions of the stay of execution, the Court of Appeal altered the High Court’s decision by ordering AGAG to pay $1 million (rather than $3 million) to each plaintiff and deposit an additional $4 million total with the Registrar for investment pending the determination of the appeal. On December 20, 2012, the Court of Appeal affirmed the judgment of the High Court and dismissed AGAG’s appeal. AGAG filed an appeal to the Supreme Court contesting the decision of the High Court and an application for directions. In a ruling on March 27, 2013 the Court upheld the respondents’ objection to the application for directions and ordered that AGAG file its notice of appeal before the Court of Appeal and file a subsequent application for stay of execution. AGA has complied with the ruling of the Court. A date has not been set down for the application to be heard.

National Labour Commission (NLC) & 273 Others:Others v. AngloGold Ashanti (Ghana) Limited: In December 2006, Appiah Agyei Boateng and 272 others claiming to be the employees of AngloGold AshantiAGAG (affected employees) petitioned the National Labour Commission (NLC) for the payment ofNLC to compel AGAG to pay their gratuities. The basis of their claim wasaffected employees claimed that they were at all material times employees of AngloGold Ashanti (Ghana) Limited and that they have been transferred to Mining and& Building Contractors Limited (MBC), an independent construction firm,mining contractor, without their consent and have consequentlyallege that, as a result of their transfer, they suffered a diminution in their terms and conditions of service. They were therefore claimingThe affected employees sought redundancy payments from AngloGold Ashanti. AGAG.

On August 20, 2009, the NLC found in favor of the petitioners and ordered AngloGold AshantiAGAG to pay the Petitionersmake redundancy payments totallingtotaling $4.7 million. AngloGold Ashanti then initiated proceedings inAGAG applied to the High Court seeking to have the NLCNLC’s decision set aside. The affected workers applied and secured an order from the court joining them to the suit. On April 7, 2011, the High Court gave judgment ruling in favorfound against AGAG. A stay of execution was granted on January 13, 2012, on condition that an appeal be heard within three months. On November 8, 2012, a settlement was reached among AGAG, the NLC and the affected employees. Terms of the plaintiffssettlement and a notice of withdrawal of appeal were filed with the court. The settlement provides that AngloGold Ashanti will pay approximately $4.7 million total to be divided among the National Labour Commission had the power to determine the matter. By this judgment, the Company is toaffected employees and will pay the award as given by the Labour Commission. We are reviewing the possibility of applying for leave of the court to file an appeal$200,000 in legal fees to the Labour Commission’s decision outaffected employees’ lawyers. On December 12, 2012, the Court of time.

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Appeal granted AGAG’s application to withdraw the appeal and declared the matter settled as per the terms of settlement. All affected employees have been paid in full and have acknowledged receipt of payment. The matter is now settled.


National Labour Commission v(NLC) v. AngloGold Ashanti (Early Retirees)(Ghana) Limited (in re early retirees):The Company was requested by In March 2008, petitioners alleged to the National Labour Commission to provide its comments on a petition filed against the Company at the Commission. The thrust of their petition isNLC that ManagementAGAG had misrepresented to them that they could opt for an early retirement and receive enhanced benefits by way of their unpaid salaries and Social Security Contributions.social security contributions. They claimclaimed that, but for AGAG’s misrepresentation, they would have elected to exit by way of redundancy which was being done at the time. Specifically they are claiming against the company toredundancy. They demanded that AGAG pay to them the difference between what would have been their ‘redundancy’redundancy packages and the actual payments made to them under the retirement package. This has been computed to beThe total amount of the cediclaim is the Ghanaian currency equivalent of $1.8 million.

On April 3, 2009, the National Labour Commission issued a decision on the matter. ItNLC ordered AngloGold Ashanti GhanaAGAG to calculatepay each petitioner the difference between the Redundancy Packageredundancy package and the Early Retirement benefit in the case of each petitioner and the difference paid to each petitioner. Then AngloGold Ashanti refused to comply with the orders of the Commission, the Commission instituted action at theearly retirement benefit. The High Court to enforce their orders. On February 11, 2011upheld the High Court dismissed our Application for Stay of Execution pending appeal and ordered further that we pay the amount ordered to be paid to the petitioners into court within 14 days. Thereafter each of the petitioners, who are not parties to the suit should apply to the court to take out his or her entitlement upon providing satisfactory security. AngloGold Ashanti repeated its Application for Stay of Execution at the Court of Appeal. On March 14, 2011order, but the Court of Appeal grantedreversed the Company’s Applicationorder on March 14, 2011 and allowed AGAG’s application for Staya stay of Executionexecution pending appeal. The records of appeal were settled and directedon November 26, 2012 AGAG filed its written submissions. The Court has fixed May 30, 2013 to deliver its judgement.

Abdul Waliyu and 152 others vs AngloGold Ashanti (Ghana) Limited (AGAG): AGAG is involved in litigation relating to the Pompora Treatment Plant (PTP) near the Obuasi mine which was decommissioned in 2000. On April 2, 2013 AGAG received a summons from Abdul Waliyu and 152 others in which the plaintiffs allege that it should ensurethey 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 PTP. Plaintiffs’ alleged injuries include respiratory infections, skin diseases and certain cancers. The writ asks the court to award general damages, special damages for medical treatment and punitive damages, as well as several orders relating to operation of the PTP. AGAG has filed a notice of intention to defend.

In addition, in 2010, four separate writs, involving more than four hundred people resident in three suburbs of Obuasi, were issued to AGAG involving similar allegations that the Appeal would be ready for hearing within three months. The Company has written toplaintiffs’ health had been adversely affected by the Registrar to completeoperation of the recordPTP. In 2011, two of proceedings for onward transmission to the Courtwrits were dismissed, with costs awarded in favour of Appeal.

InAGAG, and a third writ was adjourned indefinitely. AngloGold Ashanti is currently in discussions with the plaintiffs in the fourth matter, Abena Manu and 41 others vs AngloGold Ashanti, Obuasi.

TANZANIA:

Jackson Manyelo & others vs. Geita Gold Mining Limited (GGM): In January 2007, the plaintiffs filed a suit against GGM Misc. Civil case no. 27/2007 (land case):The claimants allegein the Mwanza High Court alleging that they have beenwere affected by blasting activities in the Katoma blastingarea carried out by GGM and they havehad suffered damages in the amount of Tshs 9.6Tshs9.6 billion ($7,161,446)(approximately $6 million). Pre trial conference has been rescheduled.The parties then attempted to solve the matter through mediation, but were unsuccessful. The matter is scheduled to be heard in the Mwanza High Court on April 25, 2013.

In

GUINEA

Government of Guinea (National Claim Commission) v. Société AngloGold Ashanti Goldfields de Guinée SA (SAG):

Anational claim recovery commissionput in place established by the government has demanded fromthat SAG the payment of the sum ofpay $43 million as dividendin dividends and penalty whichpenalties that would allegedly have been dueowed to the stategovernment for the accounting years 2004 2007. This claim is contested by SAG.SAG opposes the claim. The two parties havehad originally decided to submit their dispute to an independent audit firm which willto be appointed by a common accord.accord; however, the independent audit firm was never appointed. In December 2010, the national claim recovery commission was disbanded and the matter was turned over to the Inspector General of the Ministry of Finance.

Dividend policyDIVIDENDS

Dividends are proposed and approved by the board of directors of AngloGold Ashanti, based on the interim and year endcompany’s financial performance. Dividends are recognized when declared by the board of directors of AngloGold Ashanti. During the third quarter of 2011, the Company changed its timing of dividend payments to quarterly, rather than half-yearly.

Dividends may be declared in any currency at the discretion of the AngloGold Ashanti board or AngloGold Ashanti shareholders at a general meeting. Currently, dividends are declared in South African rands and may be payablepaid in Australian dollars, South African rands, United KingdomBritish pounds orand Ghanaian cedis.

Dividends paid to registered holders of AngloGold Ashanti ADSs are paid in US dollars converted from South African rands by The Bank of New York Mellon, as depositary, in accordance with the deposit agreement. Exchange rate fluctuations may therefore affect the value of the dividends received by registered shareholders and distributions paid by the relevant depositary to investors holding AngloGold Ashanti securities. Moreover, fluctuations in the exchange rates of the US dollar may affect the US dollar price of the ADSs on the NYSE. For details on taxation and exchange controls applicable to holders of ordinary shares or ADSs, see “Item 10D.: Exchange controls” and “Item 10E.: Taxation – Taxation of dividends”.

Dividends declared to foreign shareholders are not subject to the approval by the South African Reserve Bank (SARB) in terms of South African foreign exchange control regulations. Dividends are freely transferable to foreign shareholders from both trading and non-trading profits earned in South Africa by publicly listed companies.

Under South African law, the company may declare and pay dividends from any reserves included in total shareholder’s equity (including share capital and share premium) calculated in accordance with International Financial Reporting Standards (IFRS), subject to its solvency and liquidity.

AngloGold Ashanti expects to continue to pay dividends, although there can be no assurance that dividends will be paid in the future or as to the particular amounts that will be paid from year to year. The payment of future dividends will dependbe dependent upon the Board’sboard’s ongoing assessment of AngloGold Ashanti’s earnings, after providing for capital expenditurelong term growth, cash/debt resources, compliance with the solvency and long-term growth, cash and debt resources,liquidity requirements the Companies Act, the amount of reserves available for a dividend usingbased on the going concern assessment, and restrictions placed by the conditions of the convertible bond, other debt facilities, protection of the investment grade credit rating and other factors.

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AngloGold Ashanti will continue to manage capital expenditure in line with profitability and cash flow, and its approach to the dividend on the basis of prudent financial management.


Under South African law, the company may declare and pay dividends from any reserves included in total shareholder’s equity (including share capital and share premium) calculated in accordance with International Financial Reporting Standards (IFRS), subject to the solvency and liquidity test.

Withholding tax
On February 21, 2007,Dividends are payable to shareholders registered at a record date that is after the date of declaration. Dematerialized shareholders on the South African Government announcedshare register will receive payment of their dividends electronically, as provided for by STRATE. Certificated shareholders, who have elected to receive their dividends electronically, will be paid via the company’s electronic funds transmission service. Certificated shareholders who have not yet elected to receive dividend payments electronically are encouraged to mandate this method of payment for all future dividends.

Withholding tax

South Africa currently imposes a proposal to replace the SecondaryDividend Withholding Tax on Companies (dividends tax) at a rate of 15 percent on the net amount of the dividend declared by a resident company, other than a Headquarter Company.

The dividends tax is generally imposed on the beneficial owner. The dividends tax could be reduced to a lower rate under an applicable double tax treaty, if all requirements are met. In the case of dividends paid to a US holder with respect to shares, the Treaty would generally limit the dividends tax rate to 5 percent of the gross amount of the dividends if a US holder (it must be a corporate) holds directly at least 10 percent withholding tax on dividends and other distributions payable to shareholders. The date for the implementation of the withholdingvoting stock of AngloGold Ashanti. In all other cases, the maximum tax rate under the Treaty is 15 percent of the gross amount of the dividend. There are different rules to consider if the beneficial owner of the dividends is a US resident who carries on business in South Africa through a permanent establishment situated in South Africa, or performs in South Africa independent personal services from a fixed base situated in South Africa, and the dividends has now been announced as April 1, 2012. Although this may reduceare attributable to such permanent establishment or fixed base. Moreover, if the dividends tax payable byrate is reduced under the auspices of an applicable double tax treaty, there are certain South African operations ofcompliance requirements that must be met in order to access the group, thereby increasing distributable earnings, the withholdingdouble tax will generally reduce the amount of dividends or other distributions received by AngloGold Ashanti shareholders.

treaty relief.

8B.

SIGNIFICANT CHANGES

None.

8B. SIGNIFICANT CHANGES
None.

215


ITEM 9:  THE OFFER AND LISTING
9A. OFFER AND LISTING DETAILS

9A.

OFFER AND LISTING DETAILS

The following table sets out, for the periods indicated, the reported high and low market quotations for AngloGold Ashanti’s ordinary shares on the JSE and for its sponsored ADSs on the NYSE:

                 
  JSE  NYSE(1) 
  High  Low  High  Low 
Year ended December 31 (South African cents per ordinary share)  (US dollars per ADS) 
 
Annual information
                
2006  38,700   24,700   62.20   35.58 
2007  35,899   25,400   49.42   33.80
2008  34,900   15,011   51.35   13.37 
2009  34,679   28,630   47.52   36.05 
2010  36,631   26,640   52.86   34.11 
                 
2009
                
First quarter  36,900   23,206   38.99   22.50 
Second quarter  35,789   25,950   43.16   29.36 
Third quarter  33,990   27,150   45.64   32.77 
Fourth quarter  34,679   28,630   47.52   36.05 
                 
2010
                
First quarter  33,000   26,640   44.68   34.11 
Second quarter  34,150   27,649   45.25   37,52 
Third quarter  33,946   28,650   47.75   38.55 
Fourth quarter  36,631   31,165   52.86   44.22 
                 
2011
                
First quarter  35,240   30,226   49.99   42.47 
                 
October 2010  32,950   31,165   48.16   44.22 
November 2010  36,631   31,986   52.86   45.88 
December 2010  34,786   32,230   50.76   46.57 
January 2011  33,199   30,226   49.59   42.47 
February 2011  35,240   30,810   49.31   43.21 
March 2011  34,320   30,695   49.99   43.40 
April 2011  34,096   32,344   51.28   47.67 
May 2011(2)
  33,491   30,247   51.69   43.29 

   JSE        NYSE(1)   
Year ended December 31 High Low   High         Low  
   (South African cents per ordinary share)              (US dollars per ADS)      

Annual information

        

2008

 34,900 15,011   51.35 13.37  

2009

 34,679 28,630   47.52 36.05  

2010

 36,631 26,640   52.86 34.11  

2011

 39,182 27,333   51.69 38.97  

2012

 36,500 25,199   47.17 29.51  
  

2011

     

First quarter

 35,240 30,226   49.99 42.47  

Second quarter

 34,096 27,333   51.69 39.70  

Third quarter

 38,250 27,600   48.85 40.58  

Fourth quarter

 39,182 32,000   49.14 38.97  
  

2012

     

First quarter

 36,500 28,001   47.17 36.06  

Second quarter

 31,979 25,250   38.31 30.70  

Third quarter

 30,530 25,199   36.93 30.56  

Fourth quarter

 30,495 25,500   35.89 29.51  
  

2013

     

First quarter

 27,048 21,031   31.88 23.08  
  

September 2012

 30,530 26,091   36.93 31.15  

October 2012

 30,495 26,891   35.89 31.98  

November 2012

 30,172 26,133   34.97 29.58  

December 2012

 27,780 25,500   31.48 29.51  

January 2013

 27,048 24,450   31.88 27.02  

February 2013

 26,196 21,776   29.78 24.17  

March 2013

 23,547 21,031   25.47 23.08  

April 2013(2)

 

 217.96 161.33   23.55 17.45  

(1)

Each ADS represents one ordinary share.

(2)

Through May 24, 2011.April 19, 2013.

See “Item 7A.: Major shareholders” for the number of ADSs outstanding at December 31, 2010.

9B. PLAN OF DISTRIBUTION
2012.

9B.

PLAN OF DISTRIBUTION

Not applicable.

216


9C.

MARKETS

9C. MARKETS
NATURE OF TRADING MARKET

The principal trading markets for AngloGold Ashanti’s ordinary shares are the New York Stock Exchange, in the form of ADSs, under the symbol “AU” and the JSE Limited, in the form of ordinary shares, under the symbol “ANG”.

AngloGold Ashanti’s ordinary shares are also listed on the London Stock Exchange under the symbol “AGD”, Euronext Paris under the symbol “VA” and the Ghana Stock Exchange under the symbol “AGA”. Its ordinary shares are also listed on the Australian StockSecurities Exchange, in the form of Chess Depositary Interests (each representing one-fifth of an ordinary share) under the symbol “AGG”, and on the Ghana Stock Exchange, in the form of Ghanaian Depositary Shares or GhDSs (each representing one one-hundredth of an ordinary share) under the symbol “AADS” and quoted on Euronext Brussels in the form of unsponsored international depositary receipts under the symbol “ANG”.

9D. SELLING SHAREHOLDERS

9D.

SELLING SHAREHOLDERS

Not applicable.

9E. DILUTION

9E.

DILUTION

Not applicable.

9F. EXPENSES OF THE ISSUE

9F.

EXPENSES OF THE ISSUE

Not applicable.

217


ITEM 10: ADDITIONAL INFORMATION
10A. SHARE CAPITAL
ANGLOGOLD ASHANTI’S ORDINARY SHARES AND PREFERENCE SHARES

10A.

SHARE CAPITAL

Authorized and Issued Shares

At the annual general meeting of shareholders held on May 15, 2009, shareholders approved an increase in the company’s authorized ordinary share capital. AngloGold Ashanti’s authorized and issued share capital as of December 31, 20102012 and May, 24, 2011April 19, 2013 (being the latest practicable date prior to the publication of this document) is set out below:

             
      Issued 
Title of Class Authorized  May 24, 2011(1)  December 31, 2010 
 
Ordinary shares at par value of R0.25 each  600,000,000   381,473,822   381,204,808 
E ordinary shares at par value of R0.25 each  4,280,000   2,120,250   2,806,126 
A redeemable preference shares at par value of R0.50 each  2,000,000   2,000,000   2,000,000 
B redeemable preference shares at par value of R0.01 each  5,000,000   778,896   778,896 
 
(1)Does not include additional shares to be issued in respect of the BEE Transaction approved by shareholders on May 11, 2011 of 48,923 ordinary shares and 1,370,634 E ordinary shares.

Title of Class  Authorized     Issued 
    April 19, 2013   December 31, 2012 

Ordinary shares at par value of R0.25 each

   600,000,000      383,682,420      383,320,962   

E ordinary shares at par value of R0.25 each

   4,280,000      1,605,360      1,617,752   

A redeemable preference shares at par value of R0.50 each

   2,000,000      2,000,000      2,000,000   

B redeemable preference shares at par value of R0.01 each

   5,000,000      778,896      778,896   

All of the issued ordinary shares, E ordinary shares, A redeemable preference shares and B redeemable preference shares are fully paid and are not subject to further calls or assessment by AngloGold Ashanti.

The table below details changes in the issued ordinary share capital of AngloGold Ashanti since December 31, 2009 through December 31, 2012.

Period toDescriptionNumber of
Shares

December 31, 2009

362,240,669 

Ordinary shares issued during 2010

AngloGold Share Incentive Scheme823,411 
Employee Share ownership program – on conversion of E ordinary shares– 
Equity raising – proceeds used to part fund the hedge elimination18,140,000 

December 31, 2010

381,204,080 

Ordinary shares issued during 2011

AngloGold Share Incentive Scheme889,593 
Employee Share ownership program – on conversion of E ordinary shares99,747 
BEE transaction Bokamoso ESOP48,923 

December 31, 2011

382,242,343

Ordinary shares issued during 2012

AngloGold Share Incentive Scheme945,641
Employee Share ownership program – on conversion of E ordinary shares132,978

December 31, 2012

383,320,962

A and B Redeemable Preference shares

All of the A redeemable preference shares and B redeemable preference shares are held by Eastvaal Gold Holdings Limited, AngloGold Ashanti’s wholly-owned subsidiary. AngloGold Ashanti’s ArticlesMemorandum of AssociationIncorporation provide that the A redeemable preference shares and B redeemable preference shares are not transferable.

E ordinary shares

On December 11, 2006, shareholders in general meeting authorized the creation of a maximum of 4,280,000 E ordinary shares to be issued pursuant to an Employee Share Ownership Plan (ESOP) and a black economic empowerment transaction with Izingwe Holdings (Pty) Limited (Izingwe) – (collectively,BEE transaction). The table below detailsE ordinary shares will not be listed.

At a general meeting held on May 11, 2011, shareholders approved an amendment to the terms of the BEE transaction by authorizing the issue of an additional 48,923 ordinary shares to the ESOP and the reinstatement of lapsed E ordinary shares – a maximum of 810,634 to the ESOP and a maximum of 560,000 to Izingwe. In addition to the reinstatement of cancelled E ordinary shares, shareholders approved an amendment to the cancellation formula through the resetting of the strike price. Participants to the ESOP and Izingwe are consequently guaranteed a minimum conversion price of R40 per E ordinary share with a maximum of R90 per E ordinary share for the ESOP and R70 per E ordinary share for Izingwe from a base price of R320 and R330 per share, respectively. The amendment also authorized changes to the duration of the scheme.

On June 9, 2011, a total of 1,329,164 E ordinary shares were reinstated to the BEE Transaction – 769,164 to the ESOP and 560,000 to Izingwe.

In terms of the original authority granted by shareholders in 2006, on vesting, E ordinary shares were cancelled in exchange for ordinary shares in accordance with the cancellation formula.

E ordinary issuedshare capital amounting to R51,842,313 in respect of 688,332 vested, unconverted and cancelled E ordinary shares, was transferred to ordinary share premium during 2011. Prior to the amendment of the BEE transaction, E ordinary shares did not convert into ordinary shares where the market price of an AngloGold Ashanti ordinary share was less than the strike price of the E ordinary share as calculated in accordance with the cancellation formula.

E ordinary shareholders are entitled to vote at all ordinary shareholder meetings. However, they do not hold a veto right.

Dividends are payable on E ordinary shares, in an amount equal to 50 percent of dividends payable to ordinary shareholders. The residual 50 percent of the dividend payable is taken into account in determining the cancellation formula.

E ordinary shares which vest and are exchanged for ordinary shares are automatically cancelled and may not be re-issued. Therefore, they do not form part of the unissued share capital of AngloGold since December 31, 2007 through December 31, 2010.

Period toDescriptionNumber of Shares
December 31, 2007277,457,471
Ordinary shares issued during 2008AngloGold Share Incentive Scheme672,545
Employee Share ownership program — on
conversion of E ordinary shares94
Acquisition of Golden Cycle Gold
Corporation3,181,198
Rights offer69,470,442
Acquisition of São Bento Gold Company
Limited2,701,660
December 31, 2008353,483,410
Ordinary shares issued during 2009AngloGold Share Incentive Scheme1,131,916
Employee Share ownership program — on
conversion of E ordinary shares1,181
Equity offering to fund the initial
effective 35 percent interest in the
Kibali gold project7,624,162
December 31, 2009362,240,669
Ordinary shares issued during 2010AngloGold Share Incentive Scheme823,411
Employee Share ownership program — on
conversion of E ordinary shares
Equity raising — proceeds used to part
fund the hedge elimination18,140,000
December 31, 2010381,204,080

218

the company.


The table below details changes in the E-ordinary issued share capital of AngloGold Ashanti since December 31, 20072009 through December 31, 2010.
2012.

Period toDescriptionNumber of
Shares

December 31, 2009

   3,794,998   
Period toDescriptionNumber of Shares
December 31, 20074,140,230
2008

2010 E-ordinary shares movement

  Cancelled and exchanged for ordinary shares
in accordance with the cancellation formula   (173,289(988,872))
  

December 31, 20082010

   3,966,9412,806,126   
2009

2011 E-ordinary shares movement

Re-instated1,329,164
  Cancelled and exchanged for ordinary shares
in accordance with the cancellation formula   (171,943(1,552,328))
  

December 31, 20092011

   3,794,9982,582,962  
2010

2012 E-ordinary shares movement

  Cancelled and exchanged for ordinary shares
in accordance with the cancellation formula   (988,872(965,210))
  

December 31, 20102012

   2,806,1261,617,752  

 
E-ordinary

Unissued shares

In terms of a general authority from shareholders in annual general meeting, granted on 10 May 2012, the directors of the Company are cancelledauthorized to allot and issue, for such purposes and on such terms as they may, in exchange fortheir discretion, determine, ordinary shares of 25 SA cents each (shares) in accordance with the cancellation formula. All E-ordinary shares which are cancelled may not be re-issued and therefore, does not form part of theauthorized but unissued share capital of the company.

OfCompany up to a maximum of 5 percent of the 171,943 E-ordinary shares which were cancelled during 2009, 138,059 E-ordinary shares were cancelled without ordinary shares being issued. E-ordinary shares are not exchanged for ordinarynumber of shares in issue from time to time. The directors annually seek renewal of such authority at the instance whenannual general meeting, and the market pricenext renewal will be requested at the annual general meeting to be held on 13 May 2013.

Authorized but unissued ordinary Shares under the control of the directors – amounting to 5 percent of issued shares from time to time19,166,048
Authorized but unissued ordinary shares attributable to the share incentive scheme (balance of – 17,000,000 total scheme allocation pursuant to shares issued from 15 October 2008)13,108,426
Authorized but unissued ordinary shares under specific authority for the convertible bonds (approved at the general meeting 30 July 2009)15,384,615
Authorized but unissued ordinary shares under specific authority for the mandatory convertible bonds (approved at the general meeting 26 October 2010)18,140,000

10B.

MEMORANDUM OF INCORPORATION

On May 1, 2011, the South African Companies Act 71 of an AngloGold Ashanti ordinary share is less than the value of the E-ordinary share as calculated in accordance with the cancellation formula.

On November 1, 2009, the first tranche of the E-ordinary shares issued to the Bokamoso ESOP and to Izingwe Holdings (Pty) Limited (Izingwe) vested.2008 (as amended) (the Act) came into effect. In terms of the rules pertainingAct, companies were granted a two year period to E ordinary shares, if atamend their constitutional documents (previously referred to as the dateMemorandum and Articles of Association, but known under the Act as a Memorandum of Incorporation (MoI)), in order to harmonize such constitutional documents with the Act or adopt a new MoI, During the two year grace period certain provisions of the vesting the cost priceexisting MoIs would continue to prevail over those of the E-ordinary shares as calculatedAct in accordance with the cancellation formula is greater than the market price on the last business day prior to the date of vesting, then the conversion of the E-ordinary shares will be deferred. In respect of the Bokamoso ESOP, vesting will be deferred until May 1, 2010 at which time the E-ordinary shares will either be exchanged for AngloGold Ashanti ordinary shares or will be cancelled without benefit, as calculated in accordance with the cancellation formula. In respect of the E-ordinary shares issued to Izingwe, and in accordance with the rule pertaining to E ordinary shares, notice was received from Izingwe deferring vesting. Izingwe has, during the period November 1, 2009 to and including May 1, 2010 (the extended vesting period), the option to exercise its rights to exchange the E-ordinary shares for AngloGold Ashanti ordinary shares on the giving of such notice to do so, in accordance with the cancellation formula. Any E-ordinary shares that are unexercised during the extended vesting period will be cancelled.
On November 1, 2010, the second tranche of the E ordinary shares issued to the Bokamoso ESOP and to Izingwe vested. In terms of the rules, if at the date of the vesting the cost price of the E Ordinary shares as calculated in accordance with the cancellation formula is greater than the market price of the last business day prior to the date of vesting, then the conversion of the E ordinary shares will be deferred. In respect of the Bokamoso ESOP vesting has been deferred to May 1, 2011 at which time, the E ordinary shares will either be exchanged for AngloGold Ashanti ordinary shares or will be cancelled without benefit, as calculated in accordance with the cancellation formula. In respect of the E ordinary shares issued to Izingwe, and in accordance with the rules, notice was received from Izingwe deferring vesting. Izingwe has during the period November 1, 2010 to and including May 1, 2011 (extended vesting period), the option to exercise its rights to exchange the E ordinary shares for AngloGold Ashanti ordinary shares on the giving of such notice to do so, in accordance with the cancellation formula. Any E ordinary shares that are unexercised during the extended vesting period will be cancelled.
On April 14, 2011, AngloGold Ashanti announced the proposed restructuring of the BEE transaction, subject to shareholder approval. The principal component of the restructured transaction is the proposed reinstatement over the next three yearscase of a total of some 1.37 million E Ordinary shares (“E shares”), that have either lapsed or are expected to lapse without realising the anticipated value for their holders. This is largely due to the market and economic circumstances (including the performance of the company’s share price in rand terms) which have prevailed since the launch of the BEE transaction in 2006. Also, an additional 48,923 new ordinary shares will be allotted to employees who qualify for the scheme as of the original cut-off date.

219


The E shares issued to the Bokamoso ESOP trust and Izingwe are effectively share appreciation rights which, upon vesting in the intended recipients, will be net settled with equity. The proposed restructuring entails a resetting of the strike price of the E shares at R320 for the Bokamoso ESOP and R330 for Izingwe, as well as providing on vesting for both a minimum payout (“floor”) of R40 per E share and a maximum payout per E share of R70 for Izingwe and R90 for members of the Bokamoso ESOP. While the floor price provides certainty to all beneficiaries of the BEE transaction, the creation of a ceiling serves to limit the cost to AngloGold Ashanti and its shareholders.
A circular providing full details of the proposed restructuring with the notice of general meeting was posted to shareholders on the same day andconflict. At a general meeting to consider the proposed restructuring was held on May 11, 2011 at which, allMarch 27, 2013, shareholders voted to adopt a new MoI for AngloGold Ashanti. This is furnished to the resolutions were approved by the requisite majority.
10B. MEMORANDUM AND ARTICLES OF ASSOCIATION
SEC as an exhibit to AngloGold Ashanti’s report on form 6-K on April 10, 2013.

REGISTRATION

AngloGold Ashanti is incorporated under the laws of the Republic of South Africa and registered with the Registrar of Companies and Intellectual Property Commission under registration number 1944/017354/06. AngloGold Ashanti’s memorandum of association provides thatThe Act has abolished the company’s main business isrequirement for specific “object and purpose” provisions to be included in an MoI, but the company continues to carry on as its main business, gold exploration, the mining and production of gold, the manufacturing, marketing and selling of gold products and the development of markets for gold.

AngloGold Ashanti is governed by its articles of association which documentAshanti’s new MoI is available for inspection as set out in “Item 10H.: Documents on Display” and a summary of pertinent provisions, including rights of the holders of shares in AngloGold Ashanti, are set out below.

This summary does not contain all the information concerningpertaining to the rights of holders of AngloGold Ashanti’s ordinary shares and is qualified in its entirety by reference to the lawlaws of South Africa and AngloGold Ashanti’s governing corporate documents. As well as being governed by the provisions of the articles of association,MoI, the rights of holders of AngloGold Ashanti’s ordinary shares are governed by the South African Companies Act 61 of 1973, as amended, which is referred to as, the Companies Regulations, 2011, promulgated under the Act (Regulations), which include the South African Securities Regulation Code on Take-Overs and MergersTakeover Regulations, and the JSE ListingListings Requirements. In addition, the South African Companies Act 71 of 2008, which is referred to as the 2008 Companies Act, was signed by the President of the Republic of South Africa on April 9, 2008 and will replace the Companies Act upon its commencement, which is effective on May 1, 2011. Further, the rights of holders of AngloGold Ashanti ADSs are governed by the Deposit Agreement between AngloGold Ashanti and The Bank of New York Mellon. See “— Share“Share Rights, Preferences and Restrictions The Deposit Agreement”.

The founding document of a company under the 2008 Companies Act will be the Memorandum of Incorporation, which will replace what is currently the memorandum and articles of association. The memorandum and articles of association of an existing company will continue to be effective for two years notwithstanding any conflicts between the memorandum and articles of association and the 2008 Companies Act and can continue to be effective beyond two years if there is no conflict between the memorandum and articles of association and the 2008 Companies Act.

The 2008 Companies Act provides that ordinary shares will no longer have a par or nominal value. It is expectedvalue and hence no new shares having a nominal or par value may be authorized. However any shares which have a nominal or par value authorized prior to the effective date continue to have that the regulations willnominal or par value and can be passed to provideissued as such for the transition of existingso long as there are par value shares to no par value shares. Such regulations are obliged to preservein the rights of the existing shareholders and provide for the company to compensate its shareholders for any loss of any such rights. Additionally, under the 2008 Companies Act, a new class of shares referred to as “unclassified shares” may be created. The rights and terms that will attach to “unclassified shares” are to be determined by the directors of a company.
company’s authorized share capital.

DIRECTORS

The management and control of any business of AngloGold Ashanti is vested in the directors who, in additiondirectors. The authority of the board to their powers undermanage and direct the articlesbusiness and affairs of association, may exercise all powersthe company is not limited, restricted or qualified by the MoI.

Appointment and do all such acts and things as may be exercised or done by AngloGold Ashanti which are not expressly required to be exercised or done by AngloGold Ashanti’s shareholders in a general meeting.

Appointment, Retirement and Removal of Directors

The shareholders of the company have the power to elect the directors, and they are entitled to elect one or more alternate directors, in accordance with the provisions of the Act.

The board of directors may appoint any person to bewho satisfies the requirements for election as a director to fill any vacancy and anyserve as a director so appointed will hold office only untilon a temporary basis provided such appointment must be approved by shareholders at the followingnext shareholders’ meeting or annual general meeting and will then be eligible for re-election. meeting.

The MoI authorizes the chairman of the board, subject to the written approval of the majority of the directors, who retireto appoint any person as a director provided that such appointment is approved by shareholders at the next shareholders’ meeting or annual general meeting in this manner will not be taken into account in determining the directors who are to retire by rotation at such meeting.

220


At every annual general meeting one-third of the directors, not subject to employment contract,including executive directors, will retire by rotation, or if their number is not a multiple of three, then the number will be rounded downnearest to the nearest whole number.but not less than one third. Directors retiring by rotation are eligible for re-election. The directors so to retire at suchevery annual general meeting will unless otherwise determined by the board, be those who have been the longest in office since their last election, but as between persons who become or were last elected directors on the same day, those to retire will (unless they otherwise agree amongst themselves) be determined by lot.
A director will no longer act as a director of the company if he becomes insolvent or subject to insolvency procedures, is found to be of unsound mind, is requested to resign by at least three-quarters of the directors, is removed by a board resolution of AngloGold Ashanti or is absent from board meetings without leave of the directors for six consecutive months. A director can resign with one month’s written notice unless he obtains the permission of the directors to shorten his notice period.
election.

The articles of association containMoI contains no provision for directors to hold qualification shares, nor stipulateshares. The MoI does not impose an age limit requirement for the retirement or non-retirement of directors.

Under the 2008 Companies Act, the Memorandum of Incorporation of a profit company must provide the company’s shareholders the right to elect a minimum of 50 percentdirectors, but in terms of the company’s directors. The remaininggovernance policies directors may be appointed inare considered for retirement from age 70.

Remuneration

In accordance with the Memorandum of Incorporation ofAct, the company. In addition, a director may be removed by an ordinary resolution at a shareholders’ meeting. The director concerned must be given notice of the meeting and be afforded a reasonable opportunity to make a presentation on the matter either personally or by representative before a vote is taken by the shareholders. If a company’s Memorandum of Incorporation so provides, a person may be appointed to be an ex officio director as a consequence of that person holding some other office, title, designation or similar status.

The 2008 Companies ActMoI provides that the authority of the board and its actions are not limited, negated or invalidated if the number of directors of a company falls below the minimum required by the 2008 Companies Act or the Memorandum of Incorporation of such company. Instead, the board is obliged, within 40 business days, to convene a shareholders’ meeting to elect additional directors to bring the number of directors into compliance with the 2008 Companies Act and the Memorandum of Incorporation of such company.
Board Meetings
The directors may regulate board meetings and determine the quorum necessary for the transaction of business as they deem fit. Unless otherwise determined by the directors, two directors form a quorum. Issues arising at meetings are decided by majority vote with the chairman having a second or casting vote where there are more than two directors present at the meeting.
Under the 2008 Companies Act, to the extent that the Memorandum of Incorporation does not provide otherwise, decisions can be adopted by the written consent of a majority of directors given in person or by electronic communication, provided that each director has received notice of the matter to be decided.
Borrowing Powers
AngloGold Ashanti may create and issue secured or unsecured debentures and the directors may borrow or secure the payment of such sums as they deem fit and may secure the repayment of any indebtedness by bond, mortgage or charge provided that no special privileges as to allotment of shares, attending and voting at meetings, appointment of directors or otherwise will be given to the holders of AngloGold Ashanti’s debentures without the sanction of AngloGold Ashanti shareholders in a general meeting.
AngloGold Ashanti’s borrowing powers are unlimited. These borrowing powers may be varied by AngloGold Ashanti shareholders by way of a special resolution in a general meeting.
Remuneration
The directors are entitled to such remuneration for their services as directors as AngloGold AshantiAshanti’s shareholders may approve by special resolution in a general meeting.meeting or annual general meeting within the previous two years of the date of payment of such remuneration. If a director performs services that, in the opinion of the board of directors, are outside the scope of the ordinary duties of a director, he may be paid such extra remuneration as the directors determine.

221


Under the 2008 Companies Act, directors’ remuneration is required to be approved, by a special resolution of shareholders within two years of the date of such remuneration.
Interests of Directors and Restriction on Voting
A director who is in any way, whether directly or indirectly, interested in a contract or arrangement or proposed contract or arrangement with AngloGold Ashanti or any of AngloGold Ashanti’s subsidiaries must declare the nature of his interest to AngloGold Ashanti in accordance with the Companies Act.
A director will not vote nor be counted in the quorum and if he will do so his vote will not be counted on any resolution for his own appointment to any other office or position under AngloGold Ashanti, or in respect of any contract or arrangement in which he is interested. This prohibition will not apply to:
(i)any arrangement for giving to any director any security or indemnity in respect of money lent by him to, or obligations undertaken by him for the benefit of, AngloGold Ashanti;
(ii)any arrangement for the giving by AngloGold Ashanti of any security to a third party in respect of a debt or obligation of AngloGold Ashanti which the director has himself guaranteed or secured;
(iii)any contract by a director to subscribe for or underwrite securities; or
(iv)any contract or arrangement with a company in which he is interested by reason only of being a director, officer, creditor or member of such company (and note that these prohibitions may at any time be suspended or relaxed to any extent either generally, or in respect of any particular contract or arrangement, by AngloGold Ashanti in general meeting).
Where proposals are under consideration concerning the appointment (including fixing or varying the terms of appointment) of two or more directors to offices or employments with AngloGold Ashanti or any company in which AngloGold Ashanti is interested, such proposals may be divided and considered in relation to each director separately and in such cases each of the directors concerned will be entitled to vote (and be counted in the quorum) in respect of each resolution except that concerning his own appointment.
If any question arises at any meeting as to the entitlement of any directors to vote and such question is not resolved by his voluntarily agreeing to abstain from voting, such question must be referred to the chairman of the meeting and his ruling in relation to any other director must be final and conclusive except in a case where the nature or extent of

Although the interests of directors are not dealt with in the director concerned have not been fairly disclosed.

TheMoI, the provisions of the Act in this regard are unalterable and will automatically apply, together with the applicable common law. Under the Act, the procedures to deal with the personal financial interests of directors mayalso apply to prescribed officers (i.e. persons who exercise general executive control over and management of the voting powers conferred bywhole, or a significant portion, of the sharesbusiness and activities of the company or regularly participate to a material degree in any otherthe exercise of general executive control over and management of the whole, or a significant portion, of the business and activities of the company, irrespective of the office held or ownedfunction performed by AngloGold Ashanti in such manner and in all respects as they deem fit, including the exercise thereof in favor of any resolution appointing themselves or any of them to be directors or officers of such other company or voting or providing for the payment of remuneration to the directors or officers of such other company.
Under the 2008 Companies Act, the restrictions described above will apply to a company’s directors, certain prescribed officers (the precise scope of which remains to be defined)persons) and any person who is a member of a committee of the board of the company, or of the Audit Committee of the company, whether or not that person is also a member of the company’s board.
The Act provides that a director or such other person with a personal financial interest must disclose this to the board and cannot vote at, and must leave, the meeting in which the matter is discussed, but will be counted as present for the purposes of a quorum.

Share Rights, Preferences and Restrictions

Allotment and Issue of Ordinary Shares

Any

Subject to the Listings Requirements of the JSE, any unissued ordinary shares can be disposed of or dealt with in such manner as AngloGold Ashanti board of directors in their discretion think fit, if so authorised by shareholders may direct in a general meeting. AngloGold Ashanti shareholders may resolve that all or any of such ordinary shares are at the disposal of the directors who may allot, grant options over or otherwise deal with or dispose of the ordinary shares to such persons at such times and on such terms and conditions and for such consideration as the directors may determine.

Any ordinary shares may be issued with such rights or restrictions as AngloGold Ashanti shareholders in a general meeting may from time to time determine.

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or annual general meeting.


No ordinary shares may be issued at a discount except in accordance with section 81 of the South African Companies Act, which states that a company can issue shares at a discount to the par value shares of such shares if such shares are of a class already in issue; if such issue is authorized by a special resolution; if the company has been trading for at least one year; if the issue is sanctioned by the court and if the issue occurs within one month of the sanction. If shares are issued at a discount, every prospectus issued by the company thereafter relating to the issue of any shares, will contain particulars of the discount allowed on the issue of those shares, or so much of the discount as has not been written off at the date of the issue of such prospectus.
Under the 2008 Companies Act, although directors may generally issue shares without shareholder approval, shareholder approval by way of a special resolution will, subject to certain exceptions, be required for the issue of shares (including ordinary shares), convertible securities (including share options to directors and other persons that are related to the company or to any director) or if there is an issue of shares (including ordinary shares), or convertible securities, including share options, with voting power on an as-converted basis equal to or exceeding 30 percent of the voting power of all shares of that class held by shareholders immediately prior to the transaction or series of transactions.
Under the 2008 Companies Act, directors may only issue shares for adequate consideration as determined by the board. The term “adequate consideration” is not defined under the 2008 Companies Act. The board’s determination of adequate consideration may not be challenged unless the directors have breached their standards of conduct as specified in the 2008 Companies Act. In some cases, it may not be possible to indemnify the directors for their conduct and the company may have a claim against the directors for breach of their duties as set out in the 2008 Companies Act. When a company has received the consideration for the issuance of shares (including in AngloGold Ashanti’s case, its ordinary shares) as approved by the board, such shares will be fully paid and the company will be obliged to issue the shares and cause the name of the holder to be entered into the company’s securities registers.
The 2008 Companies Act also provides that shares can be issued for a consideration of future services, future benefits or future payment.
Dividends, Rights and Distributions

The ordinary shares participate fully in all dividends, other distributions and entitlements as and when declared by AngloGold Ashanti in respect of fully paid ordinary shares. Under South African law, AngloGold Ashanti may declare and pay dividends, from any reserves included in total shareholders’ equity calculated in accordance with International Financial Reporting Standards, subject to itsthe company satisfying the solvency and liquidity.liquidity test as provided by the Act and the board passing a resolution acknowledging that such test has been applied and it was reasonably concluded that the company would satisfy such test immediately after completing the distribution. No larger dividend will be declared by shareholders in general meeting than is recommended by the directors. Dividends are payable to shareholders registered at a record date that is after the date of declaration.

Dividends

Although not stated in the MoI, dividends may be declared in any currency at the discretion of the board of directors.directors or AGA shareholders in an extraordinary general meeting or annual general meeting. Currently, dividends are declared in South African rands and paid in Australian dollars, South African rands, Ghanaian cedis or United Kingdom pounds. Dividends paid to registered holders of AngloGold Ashanti ADSs are paid in US dollars converted from South African rands by The Bank of New York Mellon, as depositary, in accordance with the Deposit Agreement. See “— The“The Deposit Agreement”.

As approved by shareholders in general meeting on December 11, 2006, the company’s authorized share capital was increased through the creation of a maximum of 4,280,000 E ordinary shares, to be issued for cash, pursuant to an employee share ownership plan and black economic empowerment transaction. The E ordinary shares will not be listed.

Holders of E ordinary shares are entitled to receive a dividend, equal to one-half50 percent of the dividend per ordinary share declared by AngloGold Ashanti from time to time.time by AngloGold Ashanti. In addition, the residual 50 percent of the dividend declared by AngloGold Ashanti from time to time is offset against the loan value of the E ordinary shares.

The holder of the B preference shares is entitled to an annual dividend amounting to the lesser of five percent of the issue price of the B preference shares, or an amount equivalent to the balance of the after-tax profits from income derived from mining the Moab Lease Area (which is part of the Vaal River operations in South Africa) as determined by the directors in each financial year. This annual dividend is a first charge on any profit available for distribution from the Moab Lease Area. The annual dividend is not payable from any of AngloGold Ashanti’s other profits.

The holder of the A preference shares is entitled to an annual dividend equivalent to the balance of the after-tax profits from income derived from mining the Moab Lease Area as determined by AngloGold Ashanti’s directors in each financial year, only once the annual dividend on the B preference shares has been paid in full.

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AnyAlthough not stated in the MoI, any dividend may be paid and satisfied, either wholly or in part, by the distribution of specific assets, or in paid-up securities of AngloGold Ashanti or of any other company, or in cash, or in any one or more of such ways as the directors or AngloGold Ashanti in general meeting may at the time of declaring the dividend determine and direct.

All dividends remaining unclaimed for a period of not less than three years from the date on which they became payable, may, be forfeited by a resolution of the directors, become forfeited for the benefit of the company.

All of the issued ordinary shares, A redeemable preference shares and B redeemable preference shares are fully paid and are not subject to further calls or assessment by AngloGold Ashanti.
Under the 2008 Companies Act, any dividend distributions must be approved by the board and satisfy certain solvency and liquidity tests as provided by the 2008 Companies Act.

Voting Rights

Each ordinary share confers the right to vote at all general meetings. Each holder present in person or by proxy or, in the case of a corporate entity, represented, has one vote on a show of hands. If a poll is held, holders present or any duly appointed proxy will have one vote for each ordinary share held. A holder of ordinary shares is entitled to appoint a proxy to attend, speak and vote at any meeting on his or her behalf and the proxy need not be a shareholder. Holders of ADSs are not entitled to vote in person at meetings, but may vote by way of proxy through The Bank of New York Mellon as the ADS issuer. Holders of CDIs and GhDSs are not entitled to vote in person or by proxy at meetings, but may vote by way of proxy.

instructing Chess Depository Nominees and NTHC Limited as depositary, respectively, how to vote their shares.

There are no limitations on the right of non-South African registered shareholders to hold or exercise voting rights attaching to any of the ordinary shares.

Holders of E ordinary shares have the right to vote at all general meetings and are entitled to appoint a proxy to attend, speak and vote at any meeting on his or hertheir behalf and the proxy need not be a shareholder, toshareholder. To the extent that holders of E ordinary shares will not be entitled to veto any resolution that would otherwise have been capable of being passed or not, by the required majority of votes of holders of ordinary shares and subject to the Listings Requirements of the JSE, holders of E ordinary shares will not be counted for categorization purposes in terms of section 9 of the Listings Requirements. These limitations on the E ordinary shares are a function of shareholder approval and the JSE ListingListings Requirements.

The A redeemable preference shares have similar voting rights that are similart to those of ordinary shares. The B redeemable preference shares have limited voting rights, except in the event that a dividend on this class of share has not been paid and remains unpaid for six months, or in connection with issuesresolutions directly affecting these preference shares or AngloGold Ashanti as a whole, such as disposal of substantially all of the company’s assets, winding up AngloGold Ashanti or reducing the company’s share capital.

The articles

At any meeting of association do not provide for cumulative voting in respect of anyAngloGold Ashanti at which the holders of the classes of AngloGold Ashanti’s shares.

The articles of association specify that if new classes of ordinary orshares, A redeemable preference shares, and B redeemable preference shares are issued,present and entitled to vote, on a poll, each holder of the A redeemable preference shares shall be entitled to 50 votes for every A redeemable preference share held, each holder of the ordinary shares is entitled to 50 votes for every ordinary share held and each holder of the B redeemable preference shares is entitled to one vote for every B redeemable preference share held

The MoI specifies that the rights relating to any class of shares may be modified or abrogated either with the consent in writing of the holders of at least three-fourths of the issued shares of that class, or with the sanction of a resolution passed as if it were a special resolution of the companyholders of shares in that class at a separate general meeting ofmeeting. The MOI also specifies that the holders of the A and B preference shares of that class.

Transfer of Ordinary Shares
Dematerialized shares which have been traded on the JSE are transferred on the STRATE (Share Transactions Totally Electronic) settlement system and delivered within five business days after each trade.
The dematerialization of shares is not mandatory and holders of ordinary shares in AngloGold Ashanti may elect to retain their certificated securities. Subject to any statutory restrictions on transfers, any shareholder may transfer all or part of his certificated securities,provide written consents to the extent it is not prevented by section 91Amodification of the Companies Act. Every transfer must be in writing in the usual common form or in such other form as the directors may approve and must be left at the transfer office where the register of transfers is kept or at such other place as the directors prescribe and must be accompanied by the share certificate and such other evidence as the directors or registrar may require to prove title and capacity of the intending transferor or transferee.

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their rights.


The directors may refuse to register any transfer of certificated securities unless the instrument of transfer, duly stamped, is lodged with AngloGold Ashanti accompanied by the share certificate, the transfer is in respect of only one class of securities or the transfer is permitted within any of AngloGold Ashanti’s incentive schemes.
Conversion of Ordinary Shares into Stock
AngloGold Ashanti may, by special resolution, convert any paid-up shares into stock and may reconvert any stock into paid-up shares of any denomination. The holders of stock may transfer their respective interests but the directors may fix the minimum amount of stock transferable. The holders of stock have the same rights, privileges and advantages as regards participation in profits and voting at general meetings of AngloGold Ashanti as if they held the shares from which the stock arose. All of the provisions of the Articles apply equally to stock as to shares.
Increase and Reduction of Capital
AngloGold Ashanti shareholders may by way of special resolution

The company is authorized to issue the shares specified in a general meetingthe MOI and all such shares are required to be issued as fully paid up in accordance with the provisions of the Companies Act resolve to:

increase its capital by any sum divided into shares of any amount;
consolidate and divide all applicable approval and/or any part of its share capital into shares of larger amounts or consolidate and reduce the number of any issued no par value shares;
increase the number of any issued no par value shares without increasing its stated capital;
cancel any shares which have not been subscribed for;
sub-divide its shares or any of them into shares of smaller amounts than fixed by the memorandum of association;
vary, modify or amend any rights attached to any shares whether issued or not, including the conversion of any shares into preference shares; and
convert any of its shares whether issued or not into shares of another class.
In addition, AngloGold Ashanti shareholders may by ordinary resolution in a general meeting and subject to theother requirements of the Companies Act and the rules andJSE Listings Requirements.

The directors are authorized, subject to any requirements of the stock exchange on which the securities are listed, reduce, dispose of, distribute or otherwise deal with in any manner its share capital, share premium, stated capital, reserves and capital redemption reserve fund.

Under the 2008 Companies Act, the authorization and classification of shares, the numbers of authorized shares of each class,JSE Listings Requirements and the preference, rights, limitations and other terms associated with each class of shares, as set out in a company’s Memorandum of Incorporation, may be changed by amending the company’s Memorandum of Incorporation by special resolution of shareholders or, unless the Memorandum of Incorporation provides otherwise, the directors of the company mayMoI, to increase or decrease the number of authorized shares of any class of shares, reclassify any classified shares that have been authorized but not issued, classify any unclassified shares that have been authorized but not issued, orand determine the preferences, rights, limitations or other terms of any class of authorized shares which are subjector amend any preferences, rights, limitations or other terms as determined. The JSE however currently does not allow the MoI to be amended to give effect to such capital amendments, without the directors’ determination.
Share Premium Account and Capital Redemption Reserve Fund
AngloGold Ashantiapproval of ordinary shareholders may by ordinary resolution in a general meeting authorize the directors to distribute or deal with, in any way recommended by the directors, all or any part of the amount outstanding to the credit of any share premium account or capital redemption reserve fund of AngloGold Ashanti.
Under the 2008 Companies Act, all par value instruments will be converted to no par value and the applicable reserves will be amalgamated into the stated capital account.
special resolution.

Rights Upon Liquidation

In the event of the winding up of AngloGold Ashanti:

the B redeemable preference shares confer the right, in priority to any payment in respect of the ordinary shares or the A preference shares in the capital of AngloGold Ashanti, to receive only so much of the net proceeds from the disposal of the assets relating to the Moab Lease Area as is available for distribution, but not exceeding a return for each B redeemable preference share of the capital paid up on that share and any share premium paid on the issue of the B redeemable preference shares outstanding at that time;

the A redeemable preference shares confer the right, in priority to any payment in respect of the ordinary shares but after any payment in respect of the B preference shares, to receive only so much of the net proceeds from the disposal of the assets relating to the Moab Lease Area as is then available for distribution. Thedistribution;

the A redeemable preference and

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B redeemable preference shares do not confer the right to participation in the surplus funds of AngloGold Ashanti arising in any other manner; and

the ordinary shares and E ordinary shares confer the equal rights to any surplus arising from the liquidation of all other assets of AngloGold Ashanti.

Redemption Provisions

The A redeemable preference shares may be redeemed for their nominal value, plus a premium per share of an amount equal to the net proceeds available from the disposal of the assets relating to the Moab Lease Area, after redemption in full of the B preference shares and payment of the nominal value of the A preference shares, divided by 2,000,000.

The B redeemable preference shares may be redeemed for their nominal value, plus a premium of up to R249.99 per share, but limited to an amount equal to the net proceeds available from the disposal of the assets relating to the Moab Lease Area after payment of the nominal value of the B preference shares.

The ordinary shares are not redeemable.

Description of AngloGold Ashanti ADSs

The Bank of New York Mellon issues AngloGold Ashanti’s American Depositary Shares, or ADSs. One ADS represents the ownership interest of one ordinary share of AngloGold Ashanti.

The Deposit Agreement

This section provides a summary description of AngloGold Ashanti’s ADSs.

AngloGold Ashanti has entered into an Amended and Restated Deposit Agreement dated as of June 3, 2008 with The Bank of New York Mellon as depositary and the owners and beneficial owners of American Depositary Receipts (the “Deposit Agreement”)(Deposit Agreement).

The following is a summary of the material provisions of the Deposit Agreement. For more complete information, read the entire Deposit Agreement and the formForm of American Depositary Receipt, which AngloGold Ashanti has filed with the SEC as an exhibit to AngloGold Ashanti’s registration statement on Form F-6/A (File No. 333-133049) on May 27, 2008. See “Item 10.H.: Documents On Display”. Copies of the Deposit Agreement are also available for inspection at the Corporate Trust Office of The Bank of New York Mellon currently located at 101 Barclay Street, New York, New York, 10286.

Description of the ADSs

The Bank of New York Mellon, as depositary, will register and deliver ADSs. Each ADS will represent one ordinary share (or a right to receive one share) deposited with The Standard Bank of South Africa Limited, Société Générale South Africa Limited, FirstRand Bank Limited, National Australia Bank Limited of Australia and New Zealand Banking Group Limited, each as a custodian for The Bank of New York Mellon, and all of which are referred to collectively as the custodian.“the Custodian”. Each ADS will also represent any other securities, cash or other property which may be held by The Bank of New York Mellon. The Bank of New York Mellon’s Corporate Trust Office at which the ADSs will be administered is located at 101 Barclay Street, New York, New York 10286. The Bank of New York Mellon’s principal executive office is located at One Wall Street, New York, New York 10286.

ADSs may be held either (A) directly (i) by having an American Depositary Receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in the holder’s name, or (ii) by having ADSs registered in a holder’s name in the Direct Registration System, or (B) indirectly by holding a security entitlement in ADSs through a

broker or other financial institution. If ADSs are held directly, such holders are ADS holders. This description applies to AngloGold Ashanti’s ADS holders. If ADSs are held indirectly, such holders must rely on the procedures of their broker or other financial institution to assert the rights of ADS registered holders described in this section. Such holders should consult with their broker or financial institution to find out what those procedures are.

The Direct Registration System, or DRS, is a system administered by DTC pursuant to which the depositary may register the ownership of uncertificated ADSs, which ownership will be evidenced by periodic statements sent by the depositary to the registered holders of uncertificated ADSs.

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AngloGold Ashanti will not treat ADS holders as its shareholders and ADS holders do not have shareholder rights. South African law governs shareholder rights. The Bank of New York Mellon is the holder of the shares underlying the ADSs. Registered holders of ADSs have ADS holder rights. The Deposit Agreement sets out ADS holder rights as well as the rights and obligations of The Bank of New York Mellon. New York law governs the Deposit Agreement and the ADSs.

Dividends and Other Distributions

The Bank of New York Mellon has agreed to pay to holders of ADSs the cash dividends or other distributions it or a custodian receives on AngloGold Ashanti ordinary shares or other deposited securities after deducting any fees and expenses and any applicable withholding taxes. Holders of ADSs will receive these distributions in proportion to the number of AngloGold Ashanti’s ordinary shares that their ADSs represent.

Cash

The Bank of New York Mellon will convert any cash dividend or other cash distribution (in South African Rands) that AngloGold Ashanti pays on AngloGold Ashanti’s ordinary shares into US dollars (unless AngloGold Ashanti pays itsuch dividend or cash distribution in US dollars), if it can do so on a reasonable basis and can transfer the US dollars to the United States. Currently,. AngloGold Ashanti currently pays dividends on ordinary shares in South African rand. AngloGold Ashanti may declare dividends and distributions on ordinary shares in any currency that the board of directors or shareholders at a general meeting approve.

rands. The Bank of New York Mellon will convert the South African randrands it receives from AngloGold Ashanti to US dollars and distribute dividends in US dollars to registered holders of ADSs. If that is no longer possible or if any approval from any government is needed and cannot be obtained, The Bank of New York Mellon may distribute non-US currency only to those ADS holders to whom it is possible to make this type of distribution.

The Bank of New York Mellon may hold the non-US currency it cannot convert for the account of holders of ADSs who for one reason or the other have not been paid. It will not invest the non-US currency, and it will not be liable for the interest. Before making a distribution, any withholding taxes that must be paid will be deducted. See “Payment of Taxes” below. The Bank of New York Mellon will distribute only whole US dollars and cents and will round fractional cents to the nearest whole cent. If the exchange rates fluctuate during a time when The Bank of New York Mellon cannot convert the non-US currency, holders of ADSs may lose some or all of the value of the distribution.

Ordinary Shares

The Bank of New York Mellon may distribute to holders of ADSs additional ADSs representing ordinary shares that AngloGold Ashanti distributes as a dividend or free distribution, if AngloGold Ashanti provides itsuch distribution promptly with satisfactory evidence that it is legal to do so. If The Bank of New York Mellon does not distribute additional ADSs, the outstanding ADSs will also represent the newly distributed AngloGold Ashanti ordinary shares. The Bank of New York Mellon will only distribute whole ADSs. It will sell AngloGold Ashanti ordinary shares that would require it to deliver a fraction of an ADS and distribute the net proceeds in the same way as it distributes cash. The Bank of New York Mellon may sell a portion of the distributed shares sufficient to pay its fees and expenses in connection with that distribution.

Rights to Subscribe for Additional Ordinary Shares

If AngloGold Ashanti offers holders of its ordinary shares any rights to subscribe for additional AngloGold Ashanti ordinary shares or any other rights, The Bank of New York Mellon, after consultation with AngloGold Ashanti, may make these rights available to holders of ADSs or sell the rights and distribute the proceeds in the same way as it distributes cash. If The Bank of New York Mellon cannot do either of these things for any reason, it may allow these rights to lapse. In that case, holders of ADSs will receive no value for them.

If The Bank of New York Mellon makes these types of subscription rights available to holders of ADSs, upon instruction from holders of ADSs, it will exercise the rights and purchase AngloGold Ashanti’s ordinary shares on their behalf. The Bank of New York Mellon will then deposit the AngloGold Ashanti ordinary shares and deliver ADSs to the holders of ADSs. It will only exercise these rights if holders of ADSs pay it the exercise price and any other charges the rights require them to pay.

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US securities laws may restrict the sale, deposit, cancellation and transfer of the ADSs issued after the exercise of rights. For example, holders of ADSs may not be able to trade the ADSs freely in the United States. In this case, The Bank of New York Mellon may deliver ADSs which are “restricted securities” within the meaning of Rule 144 which will have the same provisions as the ADSs described here, except for the changes needed to put the restrictions in place.

Other Distributions

The Bank of New York Mellon will send to holders of ADSs any other distributions that AngloGold Ashanti makes on deposited securities by any means it thinks is legal, fair and practical. If it cannot make the distribution in that way, The Bank of New York Mellon may decide to sell what AngloGold Ashanti distributes, and then distribute the net proceeds in the same way as it distributes cash, or it may decide to hold what AngloGold Ashanti distributes, in which case the outstanding ADSs will also represent the newly distributed property. However, The Bank of New York Mellon is not required to distribute any securities (other than ADSs) to ADS holders unless it receives satisfactory evidence from AngloGold Ashanti that it is legal to make that distribution. The Bank of New York Mellon may sell a portion of the distributed securities or property sufficient to pay its fees and expenses in connection with that distribution.

The Bank of New York Mellon is not responsible if, based on available information, it decides that it is unlawful or impractical to make a distribution available to any ADS holders. AngloGold Ashanti has no obligation to register ADSs, AngloGold Ashanti ordinary shares, rights or other securities under the US Securities Act of 1933. AngloGold Ashanti also has no obligation to take any other action to permit the distribution of ADSs, AngloGold Ashanti ordinary shares, rights or anything elseany other rights to ADS holders. This means that the holders of ADSs may not receive the distribution AngloGold Ashanti makes on its ordinary shares or any value for them if it is illegal or impractical for AngloGold Ashanti to make them available to the holders of ADSs.

Deposit, Withdrawal and Cancellation

The Bank of New York Mellon will deliver ADSs if a holder of AngloGold Ashanti’s ordinary shares or their broker deposits AngloGold Ashanti’s ordinary shares or evidence of rights to receive ordinary shares with the custodian.Custodian. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, The Bank of New York Mellon will register the appropriate number of ADSs in the names such holder of AngloGold Ashanti ordinary shares requests and will deliver the ADSs at its Corporate Trust office to the persons such holders request.

Holders of ADSs may turn in their ADSs at The Bank of New York Mellon’s Corporate Trust Office. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, The Bank of New York Mellon will deliver (1) the underlying ordinary shares to an account designated by the relevant holder of ADSs and (2) any other deposited securities underlying the ADSs at the office of the Custodian. Or,Custodian, or, at the request, risk and expense of ADS holders, The Bank of New York Mellon will deliver the deposited securities at its Corporate Trust Office.

Interchange Between Certificated ADSs and Uncertificated ADSs

ADS registered holders may surrender their ADR to The Bank of New York Mellon for the purpose of exchanging such ADR for uncertificated ADSs. The Bank of New York Mellon will cancel that ADR and will send to the ADS registered holder a statement confirming that the ADS registered holder is the registered holder of uncertificated ADSs. Alternatively, upon receipt by The Bank of New York Mellon of a proper instruction from a registered holder of uncertificated ADSs requesting the exchange of uncertificated ADSs for certificated ADSs, The Bank of New York Mellon will execute and deliver to the ADS registered holder an ADR evidencing those ADSs.

Voting Rights

ADS registered holders may instruct The Bank of New York Mellon to vote the number of deposited shares their ADSs represent. The Bank of New York Mellon will notify ADS registered holders of shareholders’ meetings and arrange to deliver AngloGold Ashanti’s voting materials to them if AngloGold Ashanti asks it to. Those materials will describe the matters to be voted on and explain how ADS registered holders may instruct The Bank of New York Mellon how to vote. For instructions to be valid, they must reach The Bank of New York Mellon by a date set by The Bank of New York Mellon.

Otherwise, ADS registered holders will not be able to exercise their right to vote unless they withdraw the shares. However, ADS registered holders may not know about the meeting sufficiently in advance to withdraw the shares.

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The Bank of New York Mellon will try, as far as practical, to vote or to have its agents vote the ordinary shares or other deposited securities as holders of ADSs instruct, but this is subject to South African law, the provisions of AngloGold Ashanti’s Memorandum and Articles of AssociationMoI and of the deposited securities and any applicable rule of the JSE. The Bank of New York Mellon will only vote or attempt to vote as such holders of ADSs instruct.

AngloGold Ashanti cannot assure the holders of ADSs that they will receive the voting materials in time for them to instruct The Bank of New York Mellon to vote their ordinary shares. In addition, The Bank of New York Mellon and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that holders of ADSs may not be able to exercise their right to vote and there may be nothing they can do if their ordinary shares are not voted as they requested.

Fees and expenses

Fees and expenses
  
ADS holders must pay: 

ForFor::

$5.00 (or less) per 100 ADSs

 

Each issuance of an ADS, including as a result of a distribution of AngloGold Ashanti ordinary shares or rights or other property

Each cancellation of an ADS, including if the Deposit Agreement terminates

  

$0.02 (or less) per ADS

 

Any cash payment

  

Registration or transfer fees

 

Transfer and registration of AngloGold Ashanti ordinary shares on the AngloGold Ashanti share register to or from the name of The Bank of New York Mellon or its agent when AngloGold Ashanti ordinary shares are deposited or withdrawn

$0.02 (or less) per ADS per yearDepositary services
Expenses of The Bank of New York MellonConversion of non-US currency to US dollars

  
  Cable, telex and facsimile transmission expenses

$0.02 (or less) per ADS per year

 

Depositary services

  
  

Expenses of The Bank of New York Mellon

Conversion of non-US currency to US dollars

Cable, telex and facsimile transmission expenses

Servicing the deposited securities

  

Taxes and other governmental charges that The Bank of New York Mellon or any custodian has to pay on any ADS or AngloGold Ashanti ordinary share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes

 

As necessary

  

A fee equivalent to the fee that would have been payable if the securities distributed had been ordinary shares deposited for issuance of ADSs

 

Distribution of securities distributed to holders of deposited securities that are distributed by The Bank of New York Mellon to ADS holders

Payment of Taxes

Holders of ADSs will be responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities underlying their ADSs. The Bank of New York Mellon may refuse to transfer their ADSs or allow them to withdraw the deposited securities underlying their ADSs until such taxes or other charges are paid. It may apply payments owed to holders of ADSs or sell deposited securities underlying their ADSs to pay any taxes they owe, and they will remain liable for any deficiency. If itthe Bank of New York sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay to holders of ADSs any proceeds, or send to them any property remaining after it has paid the taxes.

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Reclassifications

If AngloGold Ashanti:Then:  
If AngloGold Ashanti: Then:
Changes the nominal or par value of the ordinary shares;

Reclassifies, splits up or consolidates any of the deposited securities;

Distributes securities on the ordinary shares that are not distributed to holders of ADSs; or

Recapitalizes, reorganizes, merges, liquidates, sells all or substantially all of AngloGold Ashanti’s assets, or takes any similar action.

 

The cash, ordinary shares or other securities received by The Bank of New York Mellon will become deposited securities. Each ADS will automatically represent its equal share of the new deposited securities.

Distributes securities on the ordinary shares that are not distributed to holders of ADSs; or

Recapitalizes, reorganizes, merges, liquidates, sells all or substantially all of AngloGold Ashanti’s assets, or takes any similar action.

The Bank of New York Mellon may, and will if AngloGold Ashanti asks it to, distribute some or all of the cash, AngloGold Ashanti ordinary shares or other securities it receives. It may also issue new ADSs or ask holders of ADSs to surrender their outstanding ADSs in exchange for new ADSs identifying the new deposited securities.

  

Amendment and Termination

AngloGold Ashanti may, for any reason, agree with The Bank of New York Mellon to amend the Deposit Agreement and the ADSs without the consent of holders for any reason.holders. If the amendment adds or increases fees or charges (except for taxes and other governmental charges or registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses) or if the amendment prejudices an important right of ADS holders, it will only become effective 30 days after The Bank of New York Mellon notifies holders of ADSs of the amendment. At the time an amendment becomes effective, holders of ADSs are considered, by continuing to hold their ADSs, to agree to the amendment and to be bound by the ADSs and the agreement as amended.

The Bank of New York Mellon may terminate the Deposit Agreement by mailing notice of termination to ADS holders at least 30 days prior to the date fixed in the notice if AngloGold Ashanti asks it to do so. The Bank of New York Mellon may also terminate the Deposit Agreement if The Bank of New York Mellon has told AngloGold Ashanti that it would like to resign and AngloGold Ashanti has not appointed a new depositary bank within 90 days. In both cases, The Bank of New York Mellon must notify holders of AngloGold Ashanti ADSs at least 30 days before termination.

After termination, The Bank of New York Mellon and its agents will be required to do only the following under the Deposit Agreement: collect distributions on the deposited securities, sell rights, and, upon surrender of ADSs, deliver AngloGold Ashanti ordinary shares and other deposited securities. Four months after the date of termination or later, The Bank of New York Mellon may sell any remaining deposited securities by public or private sale and will hold the proceeds of the sale, as well as any other cash it is holding under the Deposit Agreement, for the pro rata benefit of the ADS holders who have not surrendered their ADSs. It will not invest the money and will have no liability for interest. The Bank of New York Mellon’s only obligations will be to account for the proceeds of the sale and other cash. After termination, AngloGold Ashanti’s only obligations will be with respect to indemnification of, and payment of certain amounts to, The Bank of New York Mellon.

Limitations on Obligations and Liability to ADS Holders

The Deposit Agreement expressly limits AngloGold Ashanti’s obligations and the obligations of The Bank of New York Mellon, and limits AngloGold Ashanti’s liability and the liability of The Bank of New York Mellon. AngloGold Ashanti and The Bank of New York Mellon:

are only obligated to take the actions specifically set forth in the Deposit Agreement without negligence or bad faith;

are only obligated to take the actions specifically set forth in the Deposit Agreement without negligence or bad faith;
are not liable if either of AngloGold Ashanti or The Bank of New York Mellon is prevented or delayed by law or circumstances beyond their control from performing their obligations under the Deposit Agreement;
are not liable if either of AngloGold Ashanti or The Bank of New York Mellon exercises discretion permitted under the Deposit Agreement;
are not liable for the inability of any holder of ADSs to benefit from any distribution on deposited securities that is not made available to holders of ADSs under the terms of the Deposit Agreement, or for any special, consequential or punitive damages for any breach of the terms of the Deposit Agreement;
have no obligation to become involved in a lawsuit or other proceeding related to the ADSs or the Deposit Agreement on behalf of the holders of ADSs or on behalf of any other party;
may rely on advice of or information from legal counsel, accountants, and any persons presenting AngloGold Ashanti’s ordinary shares for deposit, any registered holder or any other person believed by AngloGold Ashanti in good faith to be competent to give such advice or information; and

are not liable if either of AngloGold Ashanti or The Bank of New York Mellon is prevented or delayed by law or circumstances beyond their control from performing their obligations under the Deposit Agreement;

are not liable if either of AngloGold Ashanti or The Bank of New York Mellon exercises discretion permitted under the Deposit Agreement;

are not liable for the inability of any holder of ADSs to benefit from any distribution on deposited securities that is not made available to holders of ADSs under the terms of the Deposit Agreement, or for any special, consequential or punitive damages for any breach of the terms of the Deposit Agreement;

have no obligation to become involved in a lawsuit or other proceeding related to the ADSs or the Deposit Agreement on behalf of the holders of ADSs or on behalf of any other party;

may rely on advice of or information from legal counsel, accountants, and any persons presenting AngloGold Ashanti’s ordinary shares for deposit, any registered holder or any other person believed by AngloGold Ashanti in good faith to be competent to give such advice or information; and

pursuant to the Deposit Agreement, AngloGold Ashanti and The Bank of New York Mellon agree to indemnify each other under certain circumstances.

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Requirements for Depositary Action

Before The Bank of New York Mellon will issue, transfer or register the transfer of an ADS, make a distribution on an ADS, or allow withdrawal of AngloGold Ashanti ordinary shares, The Bank of New York Mellon may require:

payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any ordinary shares or other deposited securities;

payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any ordinary shares or other deposited securities;
production of satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and
compliance with regulations it may establish, from time to time, consistent with the Deposit Agreement, including presentation of transfer documents.

production of satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and

compliance with regulations it may establish, from time to time, consistent with the Deposit Agreement, including presentation of transfer documents.

The Bank of New York Mellon may refuse to deliver, transfer or register transfers of ADSs generally when the books of The Bank of New York Mellon or AngloGold Ashanti’s books are closed, or at any time if either AngloGold Ashanti or The Bank of New York Mellon thinks it advisable to do so.

Holders of ADSs have the right to cancel their ADSs and withdraw the underlying ordinary shares at any time except:

when temporary delays arise because: (1) either AngloGold Ashanti or The Bank of New York Mellon have closed AngloGold Ashanti’s transfer books; (2) the transfer of the ordinary shares is blocked in connection with voting at a general meeting of shareholders; or (3) AngloGold Ashanti is paying a dividend on the ordinary shares;

when temporary delays arise because: (1) either AngloGold Ashanti or The Bank of New York Mellon have closed AngloGold Ashanti’s transfer books; (2) the transfer of the ordinary shares is blocked in connection with voting at a general meeting of shareholders; or (3) AngloGold Ashanti is paying a dividend on the ordinary shares;
when ADS holders seeking to withdraw the ordinary shares owe money to pay fees, taxes and similar charges; or
when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of the ordinary shares or other deposited securities.

when ADS holders seeking to withdraw the ordinary shares are liable for unpaid fees, taxes and similar charges; or

when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of the ordinary shares or other deposited securities.

This right of withdrawal may not be limited by any other provision of the Deposit Agreement.

Pre-release of ADSs

In certain circumstances, subject to the provisions of the Deposit Agreement, The Bank of New York Mellon may deliver ADSs before deposit of the underlying ordinary shares. This is called a pre-release of the ADS.

The Bank of New York Mellon may also deliver AngloGold Ashanti ordinary shares upon cancellation of pre-released ADSs (even if the ADSs are cancelled before the pre-release transaction has been closed out). A pre-release is closed out as soon as the underlying AngloGold Ashanti ordinary shares are delivered to The Bank of New York Mellon. The Bank of New York Mellon may receive ADSs instead of ordinary shares to close out a pre-release.

The Bank of New York Mellon may pre-release ADSs only under the following conditions:

before or at the time of the pre-release, the person to whom the pre-release is being made must represent to The Bank of New York Mellon in writing that it or its customer: (a) owns the ordinary shares or ADSs to be remitted, (b) assigns all beneficial rights, title and interest in such ADSs or ordinary shares, as the case may be, to The Bank of New York Mellon in its capacity as the depositary and for the benefit of the ADS holders, and (c) will not take any action with respect to such ADSs or ordinary shares, as the case may be, that is consistent with the transfer of beneficial ownership (including, without the consent of The Bank of New York Mellon, disposing of such ADSs or ordinary shares, as the case may be) other than satisfaction of such pre-release;

before or at the time of the pre-release, the person to whom the pre-release is being made must represent to The Bank of New York Mellon in writing that it or its customer: (a) owns the ordinary shares or ADSs to be remitted, (b) assigns all beneficial rights, title and interest in such ADSs or ordinary shares, as the case may be, to The Bank of New York Mellon in its capacity as the depositary and for the benefit of the ADS holders, and (c) will not take any action with respect to such ADSs or ordinary shares, as the case may be, that is consistent with the transfer of beneficial ownership (including, without the consent of The Bank of New York Mellon, disposing of such ADSs or ordinary shares, as the case may be) other than satisfaction of such pre-release;
the pre-release must be fully collateralized with cash, US government securities, or other collateral that The Bank of New York Mellon considers appropriate; and
the Bank of New York Mellon must be able to close out the pre-release on not more than five business days’ notice. Each pre-release will be subject to any further indemnities and credit regulations that The Bank of New York Mellon deems appropriate. The Bank of New York Mellon will normally limit the number of AngloGold Ashanti ordinary shares not deposited but represented by ADSs outstanding at any time as a result of pre-release so that they do not exceed 30 percent of the ordinary shares deposited, although The Bank of New York Mellon may disregard this limit from time to time, if it thinks it is appropriate to do so.

the pre-release must be fully collateralized with cash, US government securities, or other collateral that The Bank of New York Mellon considers appropriate; and

the Bank of New York Mellon must be able to close out the pre-release on not more than five business days’ notice. Each pre-release will be subject to any further indemnities and credit regulations that The Bank of New York Mellon deems appropriate. The Bank of New York Mellon will normally limit the number of AngloGold Ashanti ordinary shares not deposited but represented by ADSs outstanding at any time as a result of pre-release so that they do not exceed 30 percent of the ordinary shares deposited, although The Bank of New York Mellon may disregard this limit from time to time, if it thinks it is appropriate to do so.

Direct Registration System

In the Deposit Agreement, all parties to the Deposit Agreement acknowledge that the DRS and Profile Modification System, or Profile, will apply to uncertificated ADSs upon acceptance thereof to DRS by The Depository Trust Company, also referred to as DTC. DRS is the system administered by DTC pursuant to which the depositary may register the ownership of uncertificated ADSs, which ownership will be evidenced by periodic statements sent by the depositary to the registered holders of uncertificated ADSs. Profile is a required feature of DRS which allows a DTC

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participant, claiming to act on behalf of a registered holder of ADSs, to direct the depositary to register a transfer of those ADSs to DTC or its nominee and to deliver those ADSs to the DTC account of that DTC participant without receipt by the depositary of prior authorization from the ADS registered holder to register that transfer.

In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties to the Deposit Agreement understand that The Bank of New York Mellon will not verify, determine or otherwise ascertain that the DTC participant which is claiming to be acting on behalf of an ADS holder in requesting registration of transfer and delivery described in the paragraph above has the actual authority to act on behalf of the ADS holder (notwithstanding any requirements under the Uniform Commercial Code). In the Deposit Agreement, the parties agree that The Bank of New York Mellon’s reliance on and compliance with instructions received by The Bank of New York Mellon through the DRS/Profile System and in accordance with the Deposit Agreement will not constitute negligence or bad faith on the part of The Bank of New York Mellon.

Shareholder Communications;Communications: Inspection of Register of Holders of ADSs

The Bank of New York Mellon will make available for inspection at its office all communications that it receives from AngloGold Ashanti as a holder of deposited securities that AngloGold Ashanti makes generally available to holders of deposited securities. The Bank of New York Mellon sends copies of those communications if requested by AngloGold Ashanti. ADS holders have a right to inspect the register of holders of ADSs, but not for the purpose of contacting those holders about a matter unrelated to AngloGold Ashanti’s business or the ADSs.

Shareholders’ meetings

The directors may convene general meetings of AngloGold Ashanti shareholders. Subject to the provisions of the Companies Act, the shareholders may requisition for the convening of a general meeting.

An

Notice of each AngloGold Ashanti annual general meeting and ageneral meeting of AngloGold Ashanti shareholders for the purpose of passing a special resolution maymust be called by giving 21 clear days’ notice in writing ofdelivered at least 15 business days before that shareholders’ meeting. For any other meeting of AngloGold Ashanti shareholders, 14 clear days’ notice must be given. “Clear days” means calendaris to begin. In accordance with the Act, business days are calculated by excluding the first day, on whichincluding the notice is givenlast day and excluding Saturdays, Sundays and any public holiday in the dateRepublic of South Africa. In terms of the meeting. AllMoI, all shareholders are entitled to attend.

AngloGold Ashanti’s articlesattend shareholders’ meetings.

In the case of association provide that a quorum forclass meeting of the A or B preference shares, the sole holder of such shares shall constitute a general meeting (other than a meeting at which a special resolution will be passed) consists of three shareholders present personally, or ifquorum. Save as aforesaid, the shareholders are a corporate entity, represented and entitled to vote. If a general meeting is not quorate, the meeting is dissolved and a new meeting will have to be called following the relevant notice provision.

The quorum of a shareholders’ meeting convened for the purpose of passing a special resolution consists ofto begin is sufficient persons present, shareholders personallyin person or by proxy, holdingat the meeting to exercise, in aggregate, at least 25 percent of all of the total shareholder votes.voting rights that are entitled to be exercised in respect of at least one matter to be decided at the meeting and a quorum must remain present for the continuation of that shareholders meeting, provided that at least three shareholders must be present at the meeting. Such quorum requirement also applies for the consideration of any matter to be decided at the meeting. If the meeting is not quorate within 30 minutes after the appointed time for the meeting to begin (or such longer or shorter period as the chairperson may determine), it will be adjourned to a date between seven and 21 days after the adjourned meeting,postponed, without motion, vote or further notice, for 1 week and the shareholders present, in person or by proxy, at the secondpostponed meeting will constitute a quorum as long as there arequorum. For an ordinary resolution to be approved by shareholders, it must be supported by more than 50 percent of the voting rights exercised on the resolution. For a special resolution to be approved by shareholders, it must be supported by at least three of them at the second meeting. A special resolution must be passed by a vote of 75 percent of the shareholders present atvoting rights exercised on the meeting, personally or by proxy, and entitled to vote or by a vote of 75 percent of the total votes to which these shareholders are entitled.
If the meeting is not quorate and is convened upon the requisition of shareholders, the meeting is dissolved.
Under the 2008 Companies Act, shareholders must be given at least 15 business days notice for all shareholder meetings, whether the meeting is held to consider ordinary or special resolutions. In addition, a company must make available to its shareholders reasonable access to electronic participation for all shareholder meetings. The 2008 Companies Act also provides that resolutions may be submitted to shareholders for consideration and voted on in writing by such shareholders within 20 business days prior notice, thereby alleviating the need to hold a formal shareholders’ meeting. This is permitted for all meetings other than annual general meetings.

232resolution.


Disclosure of Interest in Shares

Under South African law, a registered holderperson must notify AngloGold Ashanti within three business days after that person acquires a beneficial interest in sufficient securities of a class issued by AngloGold Ashanti such that, as a result of the acquisition, the person holds a beneficial interest in securities amounting to 5 percent, 10 percent, 15 percent or any further whole multiple of 5 percent of the issued securities of that class or disposes of any beneficial interest in sufficient securities of a class issued by AngloGold Ashanti such that the result of the disposition the person no longer holds a beneficial interest in securities amounting to a particular multiple of 5 percent of issued securities of that class. When AngloGold Ashanti has received the notice referred to above it must file a copy with the Takeover Regulation Panel and report the information to holders of the relevant class of security unless the notice concerned a disposition of less than 1 percent of the class of securities.

If the securities of AngloGold Ashanti sharesare registered in the name of a person who is not the beneficial owner of such shares is required to disclose every three months to AngloGold Ashanti the identityholder of the beneficial owner and the number and class of securities held on behalfinterest in all of the beneficial owner. Moreover, AngloGold Ashanti may, by notice in writing, require a person who is a registered shareholder, or whom AngloGold Ashanti knows or has reasonable cause to believe has a beneficial interestsecurities in AngloGold Ashanti ordinary shares, to confirm or deny whether or not suchheld by that person, holdsthat registered holder of the ordinary shares or beneficial interest and, if the ordinary shares are held for another person, tosecurities must disclose to AngloGold Ashanti the identity of the person on whose behalf that security is held and the ordinary sharesidentity of each person with a beneficial interest in securities so held, the number and the class of securities held for each such person with a beneficial interest and the extent of each such beneficial interest. This information must be disclosed in writing to the company within five business days after the end of every month during which a change has occurred in the information or more promptly or frequently to the extent so provided by the requirements of a Central Securities Depository. A company that knows or has reasonable cause to believe that any of its securities are held. AngloGold Ashantiheld by one person for the beneficial interest of another may alsoby notice in writing require the personeither of those persons to giveconfirm or deny that fact, provide particulars of the extent of the beneficial interest held during the three years preceding the date of the notice and disclose the identity of each person with a beneficial interest in the securities held by that person, which information must be provided within 10 business days of the receipt of the notice.

AngloGold Ashanti is obligated to establish and maintain a register of the disclosures described above and to publish in its annual financial statements a list of the persons who hold beneficial interest equal to or in excess of 5 percent of the total number of ordinary shares issued by AngloGold Ashanti together with the extent of those beneficial interests.

Rights of Minority Shareholders

Majority shareholders of South African companies have no fiduciary obligations under South African common law to minority shareholders. However, under the Companies Act, a shareholder may, under certain circumstances, seek relief from the court if he has been unfairly prejudiced by the company. There may also be common law personal and derivative actions available to a shareholder of a company.

Pursuant to the 2008 Companies Act, a shareholder may petition a South African court for relief from the actions or omissions or, business conduct of the company or the actions of the company’s directors or officers that is oppressive or unfairly prejudicial to, or unfairly disregards the interest of the shareholder.

In addition, a shareholder who voted against a resolution to amend the company’s MoI, or to approve a fundamental transaction, (and complied with other requirements set out in the Act) may exercise its appraisal right to demand that the company pay to it the fair value for all the shares of the company held by that shareholder.

Golden Share

Under the Stability Agreement, the Government of Ghana (Government) has confirmed and agreed that the Government’s rights with respect to the Golden Share apply only in respect of AngloGold Ashanti’s assets and operations in Ghana. The rights do not extend to any other assets or operations of AngloGold Ashanti outside Ghana, nor to any assets or operations of AngloGold Ashanti.

The Government has also agreed to waive any right it may have under Section 60(I) of the Minerals and Mining Law, 1986, as amended to acquire a special share in AngloGold Ashanti or any of its direct or indirect subsidiaries or joint ventures.

The Golden Share may only be held by or transferred to a Minister of the Government or any person acting on behalf of such Government and authorized in writing by such Minister.

The following matters require, and will not be effective without, the written consent of the holder of the Golden Share:

(i)

any amendment to or removal of the relevant provisions of the AngloGold Ashanti (Ghana) Limited Regulations setting out the rights and restrictions attaching to the Golden Share;

(ii)

the voluntary winding-up or voluntary liquidation of AngloGold Ashanti (Ghana) Limited;

(iii)

the redemption of or purchase by AngloGold Ashanti of the Golden Share;

(iv)

the disposal of any mining lease held by AngloGold Ashanti (Ghana) Limited or any subsidiary of AngloGold Ashanti (Ghana) Limited; and

(v)

any disposal by AngloGold Ashanti (Ghana) Limited (other than any disposal in the ordinary course of business of AngloGold Ashanti) which, alone or when aggregated with any disposal or disposals forming part of, or connected with, the same or a connected transaction, constitutes a disposal of the whole or a material part of the assets of the AngloGold Ashanti group taken as a whole. For this purpose, a part of the AngloGold Ashanti group’s assets will be considered material if either (a) its book value (calculated by reference to the then latest audited consolidated accounts), or the total consideration to be received on its disposal, is not less than 25 percent of the book value of the net assets of the AngloGold Ashanti group or (b) the average profits attributable to it represent at least 25 percent of the average profits of the AngloGold Ashanti group for the last three years for which audited accounts are available (before deducting all charges, except taxation and extraordinary items).

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Upon a return of assets in a winding-up or liquidation of AngloGold Ashanti (Ghana) Limited, the holder of the Golden Share is entitled to the sum of 0.10 cedis (approximately 75 US cents) in priority to any payment to other members, but the Golden Share confers no further right to participate in the profits or assets of AngloGold Ashanti. The Golden Share carries no right to any dividend or any right to participate in any offer of securities to existing shareholders or in any capitalization issue.

The holder of the Golden Share may require AngloGold Ashanti (Ghana) Limited to redeem the Golden Share at any time in consideration of the payment to such holder of 0.10 cedis (approximately 75 US cents).

10C.

MATERIAL CONTRACTS

Revolving Credit Facility

10C. MATERIAL CONTRACTSGeneral

Not applicable.

On July 20, 2012, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Incorporated, as borrowers, entered into a credit agreement (the Revolving Credit Agreement) with Barclays Bank plc, as facility agent, and certain financial institutions party thereto as lenders. The Revolving Credit Agreement provides for a $1.0 billion revolving credit facility (the Revolving Credit Facility) available for drawing in US dollars. As of April 19, 2013, we have drawn $nil under the Revolving Credit Facility.

10D. EXCHANGE CONTROLSGuarantees

The Revolving Credit Facility is guaranteed by AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Incorporated. The obligations of AngloGold Ashanti USA Incorporated, in its capacity as a guarantor, are subject to certain limitations set forth in the Revolving Credit Agreement in order to comply with applicable U.S. laws. The guarantees constitute unconditional obligations of the guarantors and rank at leastpari passu with all other future unsecured obligations of the guarantors, except for obligations mandatorily preferred by law.

Security

The obligations under the Revolving Credit Agreement are unsecured.

Amount and repayment of borrowings

Loans under the Revolving Credit Facility must be for a minimum of $10 million (or for the balance of the undrawn total commitments at the time of the drawing), and no more than 14 loans may be outstanding at any time. Each loan must be repaid on the last day of the loan’s interest period, which can be a period of one, two, three or six months or any other period agreed by AngloGold Ashanti Holdings plc, in its capacity as obligors’ agent, and the lenders. All loans must be repaid in full on the final maturity date. The final maturity date is July 20, 2017.

Interest rates and fees

The annual interest rate on loans is calculated based on LIBOR, plus a margin that varies between 1.25 percent and 2.00 percent per annum depending on the long term debt rating of AngloGold Ashanti Limited, and certain mandatory costs. Interest on loans is payable on the last day of the loan’s interest period and, if the interest period exceeds six months, on the dates falling at six month intervals after the day the loan was made.

The borrowers are required to pay a commitment fee equal to 35 percent of the then applicable margin per annum on the undrawn and uncancelled amount of each lender’s commitment during the commitment period. The borrowers are also required to pay a utilization fee of 0.20 percent per annum (if the aggregate outstanding loans are less than one third of the total commitments then in effect), 0.40 percent per annum (if the aggregate outstanding loans are equal to or greater than one third but less than two thirds of the total commitments then in effect) or 0.60 percent per annum (if the aggregate outstanding loans are equal to or greater than two thirds of the total commitments then in effect).

Financial covenant

The Revolving Credit Agreement includes a financial maintenance covenant which requires that the ratio of Total Net Financial Indebtedness to EBITDA (as such terms are defined in the Revolving Credit Agreement) does not at any time exceed 3:00 to 1:00.

Change of control

If a lender so requires, the commitment of such lender under the Revolving Credit Agreement will be cancelled and the participation of such lender in all outstanding loans, together with accrued interest and all other amounts accrued, will become immediately due and payable in case any person or group of persons acting in concert becomes (directly or indirectly) the beneficial owner of more than 50 percent of the issued share capital of AngloGold Ashanti Limited.

Undertakings

The Revolving Credit Agreement contains negative covenants, including restrictions on the granting of security, a change of business of AngloGold Ashanti Limited and its subsidiaries, acquisitions or participations in joint ventures and mergers and disposals.

The Revolving Credit Agreement also contains, among others, the following affirmative covenants: mandatory periodic reporting of financial and other information, notice upon the occurrence of events of default and certain other events, compliance with environmental laws, and other obligations requiring each of AngloGold Ashanti Limited and its subsidiaries to maintain its corporate existence and qualifications to conduct its business as currently conducted in all applicable jurisdictions and to maintain insurance coverage.

The covenants are subject to exceptions and materiality thresholds.

Events of default

The Revolving Credit Agreement contains events of default including failure to make payment of amounts due, breach of obligations under the loan documents, defaults under other agreements evidencing indebtedness, certain bankruptcy events and a cessation of business, failure of either of the borrowers to be a wholly-owned subsidiary of AngloGold Ashanti Limited and the occurrence of a material adverse change in the business and financial condition of the borrowers and guarantors under the Revolving Credit Agreement, or AngloGold Ashanti and its subsidiaries as a whole, or in the ability of the borrowers and guarantors to perform their payment obligations under the loan documents. The occurrence of an event of default could result in the immediate and automatic cancellation of all commitments and the acceleration of all payment obligations under the Revolving Credit Agreement and the other loan documents.

The above description is only a summary of certain provisions of the Revolving Credit Agreement and is qualified in its entirety by reference to the provisions of the Revolving Credit Agreement, a copy of which is attached hereto as Exhibit 19.4.5 and is incorporated herein by reference.

Term Loan Facility

General

On February 18, 2013, AngloGold Ashanti Holdings plc, as borrower, entered into a credit agreement (the Term Credit Agreement) with Citibank International plc, as facility agent, and certain financial institutions party thereto as lenders. The Revolving Credit Agreement provides for a $750 million syndicated bridge loan facility (the Term Facility) available for drawing in US dollars from the period starting on May 15, 2014 and ending on May 22, 2014 (as such period may be extended pursuant to the terms of the Term Credit Agreement). In the event that the borrower chooses to draw on the loan, the proceeds thereof are to be applied towards the repayment of the $732.5 million 3.5 percent convertible bonds due May 2014 issued by AngloGold Ashanti Holdings Finance plc.

Guarantees

The Term Facility is guaranteed by AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Incorporated. The obligations of AngloGold Ashanti USA Incorporated, in its capacity as a guarantor, are subject to certain limitations set forth in the Term Credit Agreement in order to comply with applicable U.S. laws. The guarantees constitute unconditional obligations of the guarantors and rank at leastpari passu with all other future unsecured obligations of the guarantors, except for obligations mandatorily preferred by law.

Security

The obligations under the Term Credit Agreement are unsecured.

Amount and repayment of borrowings

The borrower is required to repay the full amount of the Term Facility on the final maturity date. The final maturity date is May 22, 2014 (or such later date as agreed pursuant to the extension option under the Term Credit Agreement).

Interest rates and fees

Interest on the loan is payable on the last day of the loan’s interest period and, if the interest period exceeds six months, on the dates falling at six month intervals after the day the loan was made. The annual interest rate on the loan is calculated based on LIBOR, plus a margin that varies between 1.25 percent and 2.00 percent per annum depending on the long term debt rating of AngloGold Ashanti Limited (the initial margin being 1.50% per annum), and certain mandatory costs. If the final maturity date is extended beyond May 22, 2014, the applicable margin shall be increased by 0.50 percent per annum on May 22, 2014, and the applicable margin range described in the immediately preceding sentence shall be increased by 0.50 percent per annum (i.e., varying between 1.75 percent and 2.50 percent), and shall be further increased by 0.30 percent per annum at the end of each three month period thereafter.

The borrowers are required to pay a commitment fee equal to 35 percent of the then applicable margin per annum on the undrawn and uncancelled amount of each lender’s commitment for the period starting from the date of the Term Credit Agreement and ending on the earlier of (i) the last day of the commitment period, (ii) the date on which the total commitments are cancelled or (iii) the date on which the loan is drawn.

Financial covenant

The Term Credit Agreement includes a financial maintenance covenant which requires that the ratio of Total Net Financial Indebtedness to EBITDA (as such terms are defined in the Term Credit Agreement) does not at any time exceed 3:00 to 1:00.

Change of control

If a lender so requires, the commitment of such lender under the Term Credit Agreement will be cancelled and the participation of such lender in the outstanding loan, together with accrued interest and all other amounts accrued, will become immediately due and payable in case any person or group of persons acting in concert becomes (directly or indirectly) the beneficial owner of more than 50 percent of the issued share capital of AngloGold Ashanti Limited.

Undertakings

The Term Credit Agreement contains substantially the same negative and affirmative covenants set forth in the Revolving Credit Agreement. The covenants are subject to exceptions and materiality thresholds.

Events of default

The Term Credit Agreement contains substantially the same events of default set forth in the Revolving Credit Agreement. The occurrence of an event of default could result in the immediate and automatic cancellation of all commitments and the acceleration of all payment obligations under the Term Credit Agreement and the other loan documents.

The above description is only a summary of certain provisions of the Term Credit Agreement and is qualified in its entirety by reference to the provisions of the Term Credit Agreement, a copy of which is attached hereto as Exhibit 19.4.6 and is incorporated herein by reference.

10D.

EXCHANGE CONTROLS

Exchange controls and other limitations affecting security holders

The following is a general outline of South African exchange controls and such outline may not apply to former residents of South Africa. Investors should consult a professional advisor as to the exchange control implications of their particular investments.

South African law provides for exchange control regulations, which restrict the export of capital from the Common Monetary Area, which comprises South Africa, the Kingdoms of Lesotho and Swaziland and the Republic of Namibia. The exchange control regulations, which are administered by the Exchange Control Department of the South African Reserve Bank (SARB), are applied throughout the Common Monetary Area and regulate transactions involving South African residents, including natural persons and legal entities. Government officials have from time to time stated their intentions to relax South Africa’s exchange control regulations when economic conditions permit such action. In his budget speech in March 1998, the then Minister of Finance announced that restrictions relating to offshore investments by South African companies and individuals subject to South African exchange control would, to a limited extent, be lifted.

Since then, the government has incrementally relaxed aspects of exchange control for financial institutions and individuals. However, it is impossible to predict with any certainty if and when the government will remove exchange controls in their entirety.

The comments below relate to exchange controls in place at the date of this annual report.

Investments in South African companies

A foreign investor may invest freely in ordinary shares in a South African company. Any foreign investor may also sell shares in a South African company and transfer the proceeds out of South Africa without restriction. Acquisitions of shares or assets of South African companies by non-South African purchasers are not generally subject to review by the SARB when the consideration is in cash, but may require SARB review in certain circumstances, including when the consideration is equity in a non-South African company or when the acquisition is financed by a loan from a South African lender.

Dividends

Dividends declared to foreign stockholders are not subject to the approval by the (SARB).SARB. Dividends are freely transferable to foreign stockholders from both trading and non-trading profits earned in South Africa by publicly listed companies.

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Interest

Interest
Interest on foreign loans is freely remittable abroad, provided that the loans have received prior SARB approval.

Voting rights

There are no limitations imposed by South African law or by the memorandum and articles of associationincorporation of AngloGold Ashanti on the rights of non-South African shareholders to vote the ordinary shares.

Overseas financing and investments

AngloGold Ashanti and its South African subsidiaries require SARB approval to raise debt from and repay debt to non-residents of the Common Monetary Area, mainly in respect of the interest rate and terms of repayment applicable to the loan.

Debt raised outside the Common Monetary Area by AngloGold Ashanti’s non-South African subsidiaries is not restricted under South African exchange control regulations and can be used for overseas investment, subject to any conditions imposed by the SARB in connection with establishing such a subsidiary. AngloGold Ashanti and its South African subsidiaries would, however, require SARB approval in order to provide guarantees for the obligations of any of its subsidiaries with regard to funds obtained from non-residents of the Common Monetary Area.

Debt raised outside the Common Monetary Area by AngloGold Ashanti’s non-South African subsidiaries must be repaid or serviced by AngloGold Ashanti’s foreign subsidiaries.

A listing by a South African company on any stock exchange other than the JSE in connection with raising capital requires permission from the SARB.

Under current exchange control regulations, offshore investments by AngloGold Ashanti and its South African subsidiaries require the approval of the SARB. Subject to approval, there is no limit on the amount of capital that may be invested offshore.

10E. TAXATION

10E.

TAXATION

SOUTH AFRICAN TAXATION

The following discussion summarizes South African tax consequences of the ownership and disposition of shares or ADSs by a US holder (as defined below). This summary is based upon current South African tax law and South African Inland Revenue Service (SARS) practice, the convention betweenConvention Between the Government of the United States of America and the Republic of South Africa for the avoidanceAvoidance of double taxationDouble Taxation and the preventionPrevention of fiscal evasionFiscal Evasion with respectRespect to taxesTaxes on incomeIncome and capital gains,Capital Gains, signed February 17, 1997 (the “Treaty”), and in part upon representations of the depositary, and assumes that each obligation provided for in, or otherwise contemplated by, a Deposit Agreement and any related agreement will be performed in accordance with its respective terms.

The following summary of South African tax considerations does not address the tax consequences to a US holder that is resident in South Africa for South African tax purposes, whose holding of shares or ADSs is effectively connected with a permanent establishment in South Africa through which such US holder carries on business activities or, in the case of an individual who performs independent personal services, with a fixed base situated therein, or who is otherwise not entitled to full benefits under the Treaty.

The statements of law set forth below are subject to any changes (which may be applied retroactively) in South African law or in the interpretation thereof by the South African tax authorities,SARS, or in the Treaty, occurring after the date hereof. It should be expressly noted that South African tax law does not specifically address the treatment of ADSs. However, it is reasonable to assume (although no assurance can be made) that the tax treatment of US holders of shares is also applicable to US holders of ADSs.

Holders are strongly urged to consult their own tax advisors as to the consequences under South African, US federal, state and local, and other applicable laws, of the ownership and disposition of shares or ADSs.

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Taxation of dividends

South Africa currently imposes a corporate tax known as SecondaryDividend Withholding Tax on Companies (STC)(dividends tax) at a rate of 1015 percent on the distributionnet amount of earnings in the form of dividends. Under the terms of an option granted to gold mining corporations, AngloGold Ashanti has elected not to be subject to STC. As a result, although AngloGold Ashanti’s dividend payments are not subject to STC, AngloGold Ashanti pays corporate income tax at a slightly higher rate than would otherwise have been the case. This election resulted in the overall tax paid by AngloGold Ashanti being lower than the tax payable using the standard corporate tax rate together with STC. STC will be phased out over the next two years and replaceddeclared by a dividend withholding tax.

South Africa does not currently impose any withholdingresident company, other than a Headquarter Company.

The dividends tax or any other form ofis generally imposed on the beneficial owner. The dividends tax on dividends paidcould be reduced to US holders with respect to shares, but there has been a recent announcement (as set out below) that this is about to change.lower rate under an applicable double tax treaty, if all requirements are met. In the case of a South African withholding tax on dividends paid to a US holder with respect to shares, the Treaty would generally limit the dividends tax rate of this tax to 5 percent of the gross amount of the dividends if a US holder (it must be a corporate) holds directly at least 10 percent of the voting stock of AngloGold Ashanti andAshanti. In all other cases, the maximum tax rate under the Treaty is 15 percent of the gross amount of the dividends in all other cases. The above provisions will not applydividend. There are different rules to consider if the beneficial owner of the dividends is a US resident who carries on business in South Africa through a permanent establishment situated in South Africa, or performs in South Africa independent personal services from a fixed base situated in South Africa, and the dividends are attributable to such permanent establishment or fixed base.

On February 21, 2007, Moreover, if the dividends tax rate is reduced under the auspices of an applicable double tax treaty, there are certain South African Government announced a proposalcompliance requirements that must be met in order to replace Secondary Tax on Companies with a 10 percent withholdingaccess the double tax on dividends and other distributions payable to shareholders. The date for the implementationtreaty relief.

Taxation of the withholding tax on dividends has now been announced as April 1, 2012. Although this may reduce the tax payable by the South African operations of the group thereby increasing distributable earnings, the withholding tax will generally reduce the amount of dividends or other distributions received by AngloGold Ashanti shareholders.

Taxation ofcapital gains on sale or other disposition

South African residents are (subject to certain exemptions) taxed on their worldwide income, while non-residents are only taxed on South African sourced income (subject to the provisions of any relevant double taxation agreement).

Capital gains tax is not a separate tax to income tax; instead, a percentile of the taxpayer’s net capital gain (that is the taxable capital gain) is included in its taxable income on which it is taxed at the income tax rate.

Non-residents are only subject to the South African capital gains tax provisions in respect of the disposal of any immovable property (such as land or mining rights) or any interest or right of whatever nature to or in immovable property situated in South Africa, imposesor any asset of a taxpermanent establishment through which that non-resident is carrying on capital gains, which only appliesa trade in South Africa. In the instance of a shareholder holding shares in a South African company, the ‘interest in immovable property’ requirements are met if 80 percent or more of the market value of the shares is directly or indirectly attributable to South African residents. The meaningimmovable property held on capital account, and that shareholder (whether alone or together with any connected person in relation to that person), directly or indirectly, holds at least 20 percent of the word “residents” is different for individuals and corporations and is governed by theequity shares of that South African Income Tax Act of 1962, as amended, and by the Treaty. In contrast, gains on the disposal of securities which are not capital in nature are usually subject to income tax. However, even in the latter case, a US holder will not be subject to income tax unless the US holder carries on business incompany.

If South Africa throughhas such a permanent establishment situated therein.

United Statesright to taxation
under its domestic law, the provisions of the Treaty must be analyzed when determining the right of taxation of the source state (South Africa) compared to the country of residence (the US).

UNITED STATES TAXATION

The following is a general summary of the material US federal income tax consequences of the ownership and disposition of shares or ADSs to a US holder (as defined below) that holds its shares or ADSs as a capital asset. This summary is based on US tax laws including the Internal Revenue Code of 1986, as amended (the Code), Treasury regulations promulgated thereunder, rulings, judicial decisions, administrative pronouncements, and the Treaty, all as currently in effect as of the date of this annual report, and all of which are subject to change or changes in interpretation, possibly with retroactive effect. In addition, this summary is based in part upon the representations of the depositary and the assumption that each obligation in the Deposit Agreement relating to the ADSs and any related agreement will be performed in accordance with its terms.

This summary does not address all aspects of US federal income taxation that may apply to holders that are subject to special tax rules, including US expatriates, nonresident aliens present in the United States for at least 183 days during the calendar year, insurance companies, tax-exempt entities, banks, certain financial institutions, persons subject to the alternative minimum tax, regulated investment companies, securities broker-dealers, traders in securities who elect to apply a mark-to-market method of accounting, investors that own (directly, indirectly or by attribution) 10 percent or more of the outstanding share capital or voting stock of AngloGold Ashanti, partnerships, persons holding their shares or ADSs as part of a straddle, hedging or conversion transaction, persons who acquired their shares or ADSs pursuant to the exercise of employee stock options or otherwise as compensation, accrual basis taxpayers, or persons whose functional currency is not the US dollar. Such holders may be subject to US federal income tax consequences different from those set forth below.

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As used herein, the term “US holder” means a beneficial owner of shares or ADSs that is (a) a citizen or individual resident of the United States for US federal income tax purposes; (b) a corporation (or other entity taxable as a corporation for US federal income tax purposes) created or organized in or under the laws of the United States or any state thereof (including the District of Columbia); (c) an estate the income of which is subject to US federal income taxation regardless of its source; or (d) a trust if a court within the United States can exercise primary supervision over the administration of the trust and one or more US persons are authorized to control all substantial decisions of the trust. If a partnership (including for this purpose any entity treated as a partnership for US federal income tax purposes)

holds shares or ADSs, the tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. If a US holder is a partner in a partnership that holds shares or ADSs, the holder is urged to consult its own tax advisor regarding the specific tax consequences of the ownership and disposition of the shares or ADSs.

US holders should consult their own tax advisors regarding the specific South African and US federal, state and local tax consequences of owning and disposing of shares or ADSs in light of their particular circumstances as well as any consequences arising under the laws of any other taxing jurisdiction. In particular, US holders are urged to consult their own tax advisors regarding whether they are eligible for benefits under the Treaty.

For South African and US federal income tax purposes, a US holder of ADSs should be treated as owning the underlying shares represented by those ADSs. Therefore, deposits or withdrawals by a US holder of shares for ADSs or of ADSs for shares will not be subject to US federal income tax. The following discussion (except where otherwise expressly noted) applies equally to US holders of shares and US holders of ADSs.

Taxation of dividends

The gross amount of any distribution (including the amount of any South African withholding tax thereon) paid to a US holder by AngloGold Ashanti generally will be taxable as dividend income to the US holder for US federal income tax purposes on the date the distribution is actually or constructively received by the US holder, in the case of shares, or by the depositary, in the case of ADSs. Corporate US holders will not be eligible for the dividends received deduction in respect of dividends paid by AngloGold Ashanti. For foreign tax credit limitation purposes, dividends paid by AngloGold Ashanti will be income from sources outside the United States. At present,As noted above in ‘Taxation – South Africa does not impose a withholding tax or any other formAfrican Taxation – Taxation of tax on dividends, paid to US holders with respect to shares. Thethe South African government however, has recently announced its intent to enactenacted a dividend withholding tax, which is expected to be implemented on April 1, 2012. See ‘Taxation — South African Taxation — Taxation of dividends. Once the dividend withholding tax becomes effective,tax. As a result, US holders who are eligible for benefits under the current Treaty will be subject to a maximum withholding tax of 15 percent on the gross amount of dividend distributions paid by AngloGold Ashanti.

The amount of any distribution paid in foreign currency (including the amount of any South African withholding tax thereon) generally will be includible in the gross income of a US holder of shares in an amount equal to the US dollar value of the foreign currency calculated by reference to the spot rate in effect on the date of receipt by the US holder, in the case of shares, or by the depositary, in the case of ADSs, regardless of whether the foreign currency is converted into US dollars on such date. If the foreign currency is converted into US dollars on the date of receipt, a US holder of shares generally should not be required to recognize foreign currency gain or loss in respect of the dividend. If the foreign currency received in the distribution is not converted into US dollars on the date of receipt, a US holder of shares generally will have a tax basis in the foreign currency equal to its US dollar value on the date of receipt. Any gain or loss recognized upon a subsequent conversion or other disposition of the foreign currency generally will be treated as US source ordinary income or loss. In the case of a US holder of ADSs, the amount of any distribution paid in a foreign currency generally will be converted into US dollars by the depositary upon its receipt. Accordingly, a US holder of ADSs generally will not be required to recognize foreign currency gain or loss in respect of the distribution. Special rules govern and specific elections are available to accrual method taxpayers to determine the US dollar amount includible in income in the case of taxes withheld in a foreign currency. Accrual basis taxpayers are therefore urged to consult their own tax advisors regarding the requirements and elections applicable in this regard.

Subject to certain limitations, South African withholding taxes will be treated as foreign taxes eligible for credit against a US holder’s US federal income tax liability. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. Dividend income generally will constitute ‘passive category’ income, or in the case of certain US holders, ‘general category’ income. The use of foreign tax credits is subject to complex conditions and limitations. In lieu of a credit, a US holder who itemizes deductions may elect to deduct all of such holder’s foreign taxes in the taxable year. A deduction does not reduce US tax on a dollar-for-dollar basis like a tax credit, but the deduction for foreign taxes is not subject to the same limitations applicable to foreign tax credits. US holders are urged to consult their own tax advisors regarding the availability of foreign tax credits.

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Certain US holders (including individuals) are eligible for reduced rates of US federal income tax (currently at a maximum rate of 15 percent) in respect of “qualified dividend income” received in taxable years beginning before January 1, 2011.received. For this purpose, qualified dividend income generally includes dividends paid by a non-US corporation if, among other things, the US holders meet a certain minimum holding period and other requirements and the non-US corporation satisfies certain requirements, including that either (i) the ordinary shares (or ADSs) with respect to which the dividend has been paid are readily tradable on an established securities market in the United States, or (ii) the non-US corporation is eligible for the benefits of a comprehensive US income tax treaty (such as the Treaty) which provides for the exchange of information. AngloGold Ashanti currently believes that dividends paid with respect to its shares and ADSs should constitute qualified dividend income for US federal income tax purposes. AngloGold Ashanti anticipates that its dividends will be reported as qualified dividends on Forms 1099-DIV delivered to US holders. Each individual US holder of AngloGold Ashanti shares or ADSs is urged to consult his own tax advisor regarding the availability to him of the reduced dividend tax rate in light of his own particular situation.

The US Treasury has expressed concern that parties to whom ADSs are pre-released may be taking actions that are inconsistent with the claiming of foreign tax credits for US holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax described above, applicable to dividends received by certain non-corporate holders. Accordingly, the analysis of the creditability of South African withholding taxes or the availability of qualified dividend treatment could be affected by future actions that may be taken by the US Treasury with respect to ADSs.

Taxation of capital gains

dispositions

If a US holder is a resident of the United States for purposes of the Treaty, such holder will not be subject to South African tax on any capital gain if it sells or disposes of its shares or ADSs. Special rules apply to individuals who are residents of more than one country.

In general, upon a sale, exchange or other disposition of shares or ADSs, a US holder will recognize capital gain or loss for US federal income tax purposes in an amount equal to the difference between the US dollar value of the amount realized on the disposition and the holder’s tax basis, determined in US dollars, in the shares or ADSs. Such gain or loss generally will be US source gain or loss, and will be treated as a long-term capital gain or loss if the holder’s holding period in the shares exceeds one year at the time of disposition. If the US holder is an individual, any capital gain generally will be subject to US federal income tax at preferential rates if specified minimum holding periods are met. The deductibility of capital losses is subject to significant limitations.

A US holder’s tax basis in a share will generally be its US dollar cost. The US dollar cost of a share purchased with foreign currency will generally be the US dollar value of the purchase price on the date of purchase, or the settlement date for the purchase in the case of shares traded on an established securities market that are purchased by a cash basis US holder or an electing accrual basis US holder. The amount realized on a sale or other disposition of shares for an amount in foreign currency will be the US dollar value of this amount on the date of sale or disposition. On the settlement date, the US holder will recognize US source foreign currency gain or loss (taxable as ordinary income or loss) equal to the difference (if any) between the US dollar value of the amount received based on the exchange rates in effect on the date of sale or other disposition and the settlement date. However, in the case of shares traded on an established securities market that are sold by a cash basis US holder (or an accrual basis US holder that so elects), the amount realized will be based on the exchange rate in effect betweenon the settlement date for the sale, and no exchange gain or loss will be recognized at that time. If an accrual basis US holder makes either of the elections described above, it must be applied consistently from year to year and cannot be revoked without the considerationconsent of the IRS.

Internal Revenue Services (IRS).

Foreign currency received on the sale or other disposition of a share will have a tax basis equal to its US dollar value on the settlement date. Any gain or loss recognized on a sale or other disposition of foreign currency (including its use to purchase shares or upon exchange for US dollars) will be US source ordinary income or loss.

Passive foreign investment company considerations

A non-US corporation will be classified a Passive Foreign Investment Company (a “PFIC”)(PFIC) for any taxable year if at least 75 percent of its gross income consists of passive income (such as dividends, interest, rents or royalties (other than rents or royalties derived in the active conduct of a trade or business and received from an unrelated person), or gains on the disposition of certain minority interests), or at least 50 percent of the average value of its assets consists of assets that produce, or are held for the production of, passive income. AngloGold Ashanti believes that it was not treated as a PFIC for the taxable year ended December 31, 20092012 or any prior taxable years and does not expect to become a PFIC in the foreseeable future. If AngloGold Ashanti were characterized as a PFIC for any taxable year, a US holder would suffer adverse tax consequences.

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consequences with respect to that taxable year and all future years during which it holds AngloGold Ashanti ordinary shares (or ADSs).


These consequences may include having gains realized on the disposition of shares treated as ordinary income rather than capital gains and being subject to punitive interest charges on the receipt of certain dividends and on the proceeds of the sale or other disposition of the shares. Furthermore, dividends paid by AngloGold Ashanti would not be “qualified dividend income” and would be taxed at the higher rates applicable to other items of ordinary income. US holders should consult their own tax advisors regarding the potential application of the PFIC rules to their ownership of the shares.

US information reporting and backup withholding

Dividend payments made to a holder and proceeds paid from the sale, exchange, or other disposition of shares may be subject to information reporting to the Internal Revenue Service (the “IRS”).IRS. US federal backup withholding generally is imposed at a current rate of 28 percent on specified payments including dividends and gross sale proceeds to persons who fail to furnish required information. Backup withholding will not apply to a holder who furnishes a correct taxpayer identification number or certificate of foreign status and makes any other required certification, or who is otherwise exempt from backup withholding. US persons who are required to establish their exempt status generally must provide IRS Form W-9 (Request for Taxpayer Identification Number and Certification). Non-US holders generally will not be subject to US information reporting or backup withholding. However, these holders may be required to provide certification of non-US status (generally on IRS Form W-8BEN) in connection with payments received in the United States or through certain US-related financial intermediaries. Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a holder’s US federal income tax liability. A holder may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the IRS and furnishing any required information.

10F. DIVIDENDS AND PAYING AGENTS

Information with respect to foreign financial assets

Individuals that own “specified foreign financial assets” with an aggregate value in excess of $50,000 are generally required to file information reports with respect to such assets with their U.S. federal income tax returns. Depending on the individual’s circumstances, higher threshold amounts may apply. “Specified foreign financial assets” include any financial accounts maintained by foreign financial institutions, as well as any of the following, but only if they are not held in accounts maintained by financial institutions: (i) stocks and securities issued by non–United States persons, (ii) financial instruments and contracts held for investment that have non-United States issuers or counterparties and (iii) interests in non-United States entities. The shares may be treated as specified foreign financial assets. You may be subject to this information reporting regime and be required to file IRS form 8938 listing these assets with your U.S. federal income tax return. Failure to file information reports may subject you to penalties. You are urged to consult your own tax advisor regarding your obligations to file information reports with respect to the shares.

10F.

DIVIDENDS AND PAYING AGENTS

Not applicable.

10G. STATEMENT BY EXPERTS

10G.

STATEMENT BY EXPERTS

Not applicable.

10H. DOCUMENTS ON DISPLAY

10H.

DOCUMENTS ON DISPLAY

AngloGold Ashanti files annual reports on Form 20-F and reports on Form 6-K with the SEC. You may read and copy this information at the SEC’s Public Reference Room at 100F Street, N.E., Room 1580, Washington D.C. 20549 or by accessing the SEC’s home page (http://www.sec.gov). You can also request copies of documents, upon payment of a duplicating fee, by writing to the Public Reference Section of the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. In addition, AngloGold Ashanti’s reports and other information may be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. Copies of the documents referred to herein may also be inspected at AngloGold Ashanti’s offices by contacting AngloGold Ashanti at 76 Jeppe Street, Newtown, Johannesburg, 2001 (P.O. Box 62117, Marshalltown, 2107) South Africa, Attention: Company Secretary, telephone number: +27 11 637 6000.

10I. SUBSIDIARY INFORMATION

10I.

SUBSIDIARY INFORMATION

Not applicable.

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ITEM 11:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

TREASURY POLICY

Risk management activities within the group are the ultimate responsibility of the board of directors. The chief executive officer is responsible to the board of directors for the design, implementation and monitoring of the risk management plan. The newly formed Risk and Information Integrity Committee is responsible for overseeing risk management plans and systems, and the Audit and Corporate Governance Committee oversees financial risks which include a review of treasury activities and exposure to the group’s counterparties.

Under the treasury and risk management policy, hedges may be put in place using approved instruments over the group’s planned gold production and resultant gold sales currency exposures. The tenor of the hedges may extend out to ten years. The treasury and risk management policy sets limits on the extent to which the hedge position may change for the various levels of treasury management from dealer, through treasurer, executive management and board.

The financial risk management activities objectives of the group are as follows:

Safeguarding the group’s core earnings stream through the effective control and management of gold and other commodity price risk, foreign exchange risk and interest rate risk;

The financial risk management activities objectives of the group are as follows:

Effective and efficient usage of credit facilities through the adoption of reliable liquidity planning and procedures;

Safeguarding the group’s core earnings stream through the effective control and management of gold and other commodity price risk, foreign exchange risk and interest rate risk;
Effective and efficient usage of credit facilities through the adoption of reliable liquidity planning and procedures;
Ensuring that investment and hedging transactions are undertaken with creditworthy counterparts; and
Ensuring that all contracts and agreements related to financial risk management activities are co-ordinated and consistent throughout the group and comply where necessary with all relevant regulatory and statutory requirements.

Ensuring that investment and hedging transactions are undertaken with creditworthy counterparts; and

Ensuring that all contracts and agreements related to financial risk management activities are co-ordinated and consistent throughout the group and comply where necessary with all relevant regulatory and statutory requirements.

Under the treasury and risk management policy, treasury reports that are produced at the following minimum intervals for review by management and the board of directors.

Daily

  

Treasurer

Daily

Monthly

  Treasurer

Executive Committee

Monthly

Quarterly

  Executive Committee
Quarterly

Audit and Corporate Governance Committee, Board of Directors and shareholder reports

The Treasury Risk Analyst is responsible for monitoring all reports for completeness and accuracy which are reviewed by the Treasurer.

At AngloGold Ashanti, all front office (dealing), middle office (risk reporting), back office (deal confirmations) and payment (treasury settlements) activities are segregated. All treasury transactions are captured on a third party developed treasury and risk management system that is widely used in corporate treasuries. The group internal audit function conducts regular and ad-hoc reviews of the activities of treasury and the group’s treasury system.

GOLD PRICE RISK MANAGEMENT ACTIVITIES

In the normal course of its operations, the groupCompany is exposed to gold price,and other commodity price, foreign exchange,currency, interest rate, liquidity, equity price, and credit risks. A number of products, including derivatives, are used to manage the price of gold and other commodities, interest rate and foreign exchange, liquidity and non-performance risk, which includes credit risk that arise outrisk. The Company is also exposed to certain by-product commodity price risk. In order to manage these risks, the Company may enter into transactions which make use of the group’s core business activities. AngloGold Ashanti does not acquire, hold or issue derivative instruments for economic trading purposes.derivatives. The groupCompany has developed a comprehensive risk management process to facilitate, control and monitor these risks.

Gold price risk arises from the risk of an adverse effect onof current or future earnings resulting from fluctuations in the price of gold. During the year, the groupThe Company eliminated its hedge book during 2010 and has since had utilized forward purchase and sale contracts and purchased or sold call and put options to manage its exposure to gold price. In order to provide financialfull exposure to the rising spot price of gold and the potential for enhanced cash-flow generation the group completed its final tranche of the hedge buy-back programme and settled all forward gold and foreign exchange contracts that had been used by the group in the past to manage those risks. The group is also exposed to certain by-product commodity price risk. At year-end there were no net forward sales contracts (2009: 571kg), no net call options sold (2009: 120,594kg) and no net put options sold (2009: 27,071kg) outstanding.

240gold.


The mix of derivative instruments, the volume of production hedged and the tenor of the hedge book is continuously reviewed in light of changes in operational forecasts, market conditions and the group’s hedging policy.
The fair value of early termination options as at December 31, 2010 amounted to $nil (2009: $nil million; 2008: $498 million) as these options were part of the hedge buy-back effected during July 2009.
FASB ASC guidance on derivatives and hedging requires that derivative instruments be accounted for as follows:

Commodity based (“normal purchase or normal sale exempt”) contracts that meet the requirements of the FASB ASC guidance and are designated as such, are recognized in product sales when they are settled by physical delivery. They are not recorded in the financial statements between the dates that they are entered into and settled.

Contracts that meet the criteria for hedge accounting are designated as the hedging instruments hedging the variability of forecasted cash flows from the sale of production into the spot market and from capital expenditure denominated in a foreign currency and are classified as cash flow hedges under the FASB ASC guidance. The ineffective portion of matured and existing cash flow hedges recognized in loss on non-hedge derivatives in the income statement during the year was $nil million (2009: $5 million; 2008: $8 million). The Company does not have any open cash flow hedge contracts relating to product sales or forecasted capital expenditure as at December 31, 2010 (2009: $37 million; 2008: $123 million). Cash flow hedge losses pertaining to capital expenditure of $3 million as at December 31, 2010 (2009: $4 million; 2008: $nil million) are expected to be reclassified from accumulated other comprehensive income and recognized as an adjustment to depreciation expense until 2017.

All other derivatives are measured at their estimated fair value, with the changes in estimated fair value at each reporting date reported as gains or losses on derivatives in earnings in the period in which they occur.
Cash flows from derivative instruments accounted for as cash flow hedges under the FASB ASC guidance. Cash flow hedge losses pertaining to capital expenditure of $3 million as at December 31, 2012 (2011: $3 million; 2010: $3 million) are includedexpected to be reclassified from accumulated other comprehensive income and recognized as an adjustment to depreciation expense equally until 2019.

All other derivatives are measured at their estimated fair value, with the changes in net cash provided by operating activitiesestimated fair value at each reporting date reported as gains or losses on derivatives in earnings in the statements of consolidated cashperiod in which they occur.

Cash flows.Contracts that contain ‘off-market’ terms that result related to these instruments designated as qualifying hedges are reflected in the inflowconsolidated statement of cash at inception are analogous to borrowing activities and,flows in the same category as such, are treated as financing activities. All current and futurethe cash flow from the items being hedged. Accordingly, cash flows associated with such instruments are classifiedrelating to the settlement of forward sale commodity derivatives contracts hedging the forecasted sale of production into the spot market as financing activities withinwell as the forward sale currency derivative contracts hedging the forecasted capital expenditure, will be reflected upon settlement as a component of the consolidatedoperating cash flow statement. Contracts that contain ‘off-market’ terms that result in the outflow of cash at inception are analogous to lending activities and, as such, are treated as investing activities. All current and future cash flows associated with such instruments are classified within the investing activities of the consolidated cash flow statement.

flows.

As at December 31, 20102012 and 2011 the Company had no outstanding commitments against future production as a result of the elimination of the hedge book. As of December 31, 2009, the hedge book reflected a net delta tonnage position of 3.49 million ounces (108 tonnes) out of a committed position of 3.90 million ounces (121 tonnes).

As at December 31, 2010 the Company had no open hedge positions, which represents a decrease of $2,175 million from a liability of $2,175 million as at December 31, 2009. The value as at December 31, 2009 was based on a gold price of $1,102 per ounce, exchange rates of $1 = R7.435 and A$1 = $0.8967 and the prevailing market interest rates and volatilities at December 31, 2009.
These marked-to-market valuations are not predictive of the future value of the hedge position, nor of the future impact on the revenue of the Group. The valuation represents the theoretical cost of exiting all hedge contracts at the time of valuation, at market prices and rates available at that time.
During 2009, the Group embarked on a hedge buy-back that resulted in the accelerated settlement of both non-hedge and forward gold contracts qualifying for the normal sale exemption (which permits the Group to not record such amounts in its financial statements until the maturity date of the contract) under which the Group had committed to deliver a specified quantity of gold at a future date in exchange for an agreed price. As a result of the accelerated settlement of the normal sale exempted contracts, all remaining contracts scheduled to mature in later periods have been determined to not meet all of the requirements necessary for them to continue to qualify for the normal sales exemption in future periods and are being accounted for as non-hedge derivatives at fair value in the consolidated balance sheet, with changes in fair value reflected in the income statement.
during 2010.

Foreign exchange price risk protection agreements

The Company, entersfrom time to time, may enter into currency forward exchange and currency option contracts to hedge certain anticipated transactions denominated in foreign currencies. The objective of the Company’s foreign currency hedging activities is to protect the Company from the risk that the eventual cash flows resulting from transactions denominated in US dollars will be adversely affected by changes in exchange rates.

241


As at December 31, 20102012 and 2009,2011, the Company had no open forward exchange or currency option contracts in its currency hedge position.

Interest rate and liquidity risk

Fluctuations in interest rates impacts interest paid and received on the short-term cash investments and financing activities, giving rise to interest rate risk.

In the ordinary course of business, the Company receives cash from the proceeds of its gold sales and is required to fund working capital requirements. This cash is managed to ensure surplus funds are invested in a manner to achieve market related returns while minimizing risks.

The Company is able to actively source financing at competitive rates. The counterparts are financial and banking institutions and their credit ratings are regularly monitored by the Company.

Cash and loans advanced maturity profile

                                     
      2010  2009 
      Fixed rate      Floating rate      Fixed rate      Floating rate    
      investment amount  Effective  investment amount  Effective  investment amount  Effective  investment amount  Effective 
Maturity date Currency  (million)  rate %  (million)  rate %  (million)  rate %  (million)  rate % 
 
All less than one year USD  13   0.20   171   0.19   506   0.29   178   0.13 
  ZAR  969   5.58   57   4.64   1,135   7.03   839   6.38 
  AUD  42   4.45   25   4.44         13   3.52 
  EUR        3   1.00         1   0.50 
  CAD        2   0.20         1   0.08 
  HKD                    1   0.01 
  BRL        30   8.90         152   10.20 
  ARS        2   9.00         4   10.23 
  NAD  102   5.00   207   5.00             
 

       2012  2011 
Maturity date Currency  Fixed rate
investment
amount
(million)
  Effective
rate %
  Floating rate
investment
amount
(million)
  Effective
rate %
  Fixed rate
investment
amount
(million)
  Effective
rate %
  Floating rate
investment
amount
(million)
  Effective
rate %
 

All less than one year

  $    1   2.50   611   0.30   10   0.48   467   0.20 
  ZAR    780   3.55   215   2.10   3,030   5.50   164   3.55 
  AUD    -   -   29   3.00   81   4.65   23   4.45 
  BRL    -   -   34   7.51   -   -   27   6.61 
  ARS    -   -   73   15.00   -   -   1   10.23 
   NAD    -   -   2   4.30   -   -   119   4.08 

Borrowings maturity profile

                                     
  Within one year  Between one and two years  Between Two and five years  After five years  Total 
  Borrowings  Effective  Borrowings  Effective  Borrowings  Effective  Borrowings  Effective  Borrowings 
  Amount  Rate  Amount  Rate  Amount  Rate  Amount  Rate  Amount 
Currency (million)  %  (million)  %  (million)  %  (million)  %  (million) 
 
$  26   4.7   5   5.5   1,560   4.9   994   5.7   2,585 
ZAR  703   6.4         20   9.8   237   9.8   960 
BRL  3   4.7   5   5.1   2   6.0         10 
 

        Within one year   

            Between

  one and two years

   

            Between

  two and five years

       After five years   Total 
        Currency  Borrowings
amount
(million)
   

Effective
rate

%

   Borrowings
amount
(million)
   

Effective
rate

%

   Borrowings
amount
(million)
   

Effective
rate

%

   Borrowings
amount
(million)
   

Effective
rate

%

   Borrowings
amount
(million)
 
$   669    5.7    691    3.5    6    2.9    1,741    5.5    3,107 
ZAR   1,521    5.7    8    9.8    59    9.8    186    9.8    1,774 
BRL   4    9.3    2    5.8    -     -     2    4.5    8 
NAD   68    8.4    84    8.4    34    8.4    -     -     186 
AUD   -    -     -     -     256    5.1    -     -     256 

Interest rate risk

                             
  Fixed for less than one year  Fixed for between one and three years  Fixed for greater than three years  Total 
  Borrowings  Effective  Borrowings  Effective  Borrowings  Effective  Borrowings 
  Amount  Rate  Amount  Rate  Amount  Rate  Amount 
Currency (million)  %  (million)  %  (million)  %  (million) 
  | | | | | | |
$  26   4.7   880   6.0   1,679   4.8   2,585 
ZAR  703   6.4   7   9.8   250   9.8   960 
BRL  3   4.7   7   5.3         10 
 

242


   

Fixed for less than one year

 

  

Fixed for between one and three

years

 

  

Fixed for greater than three years

 

  

Total

 

 
Currency 

    Borrowings

amount

(million)

  

Effective

rate

%

  

    Borrowings

amount

(million)

  

Effective

rate

%

  

Borrowings

amount

(million)

  

Effective

rate

%

  

Borrowings

amount

(million)

 
$  669   5.7   693   3.5   1,745   5.4   3,107 
ZAR  1,521   5.7   25   9.8   228   9.8   1,774 
BRL  4   9.3   2   5.8   2   4.5   8 
NAD  68   8.4   118   8.4   -    -    186 
AUD  -   -    256   5.1   -    -    256 

Non-performance risk

Realization of contracts is dependent upon counterparts’ performance. The Company has not obtained collateral or other security to support the financial instruments subject to non-performance risk, but the credit standing of counterparts was monitored on a regular basis throughout the year. The Company spreads itits business over a number of financial and banking institutions to minimize the risk of potential non-performance risk. Furthermore, the approval process of counterparts and the limits applied to each counterpart were monitored by the audit sub-committee of the board of directors. Where possible, ISDA netting agreements were put into place by management.

in place.

The combined maximum credit risk exposure at balance sheet date amounts to $1$183 million (2009: $335(2011: $198 million). Credit risk exposure netted by open derivative positions with counterparts was $nil million (2009: $104 million)(2011: $nil). No set-off is applied to balance sheet amounts due to the different maturity profiles of assets and liabilities.

The combined maximum credit risk exposure of the Company as at December 31, 2010 is as follows.
December 31,
2010
$
Warrants on shares1
1
The fair value of derivative assets and liabilities reflects non-performance risk relating to the counterparts and the Company, respectively.

Fair value of financial instruments

The estimated fair values of financial instruments are determined at discrete points in time based on relevant market information. The estimated fair values of the Company’s financial instruments, as measured at December 31, 20102012 and 2009,2011, are as follows (assets/(assets (liabilities)):

                 
  December 31, 2010  December 31, 2009 
  Carrying     Carrying    
  Amount  Fair Value  Amount  Fair Value 
  $  $  $  $ 
 
Cash and cash equivalents  575   575   1,100   1,100 
Restricted cash  43   43   65   65 
Short-term debt  (135)  (135)  (1,292)  (1,292)
Long-term debt  (1,730)  (2,059)  (667)  (889)
Long-term debt at fair value  (872)  (872)      
Derivatives  (175)  (175)  (2,366)  (2,366)
Marketable equity securities — available for sale  124   124   111   111 
Marketable debt securities — held to maturity  13   14   10   10 
Non-marketable assets — held to maturity  2   2   2   2 
Non-marketable debt securities — held to maturity  89   89   48   48 
 

      December 31, 2012     December 31, 2011    
    Carrying
amount
$
   

Fair value

$

   

Carrying
amount

$

   

Fair value

$

    

Cash and cash equivalents

   892     892     1,112     1,112   

Restricted cash

   64     64     58     58   

Short-term debt

   (271)     (271)     (30)     (30)   

Short-term debt at fair value

   (588)     (588)     (2)     (2)   

Long-term debt

   (2,750)     (2,871)     (1,715)     (1,857)   

Long-term debt at fair value

             (758)     (758)   

Derivatives

   (10)     (10)     (93)     (93)   

Marketable equity securities - available for sale

   69     69     82     82   

Marketable debt securities - held to maturity

       11         11   

Non-marketable equity securities - available for sale

                   

Non-marketable assets - held to maturity

                 

Non-marketable debt securities - held to maturity

   86     86     85     85    

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash restricted for use, cash and cash equivalents and short-term debt

The carrying amounts approximate fair value because of the short-term duration of these instruments.

Long-term debt

The mandatory convertible bonds are carried at fair value. The fair value of the convertible and rated bonds are shown at their quoted market value. Other long-term debt re-prices on a short-term floating rate basis, and accordingly the carrying amount approximates to fair value.

243


Derivatives

Derivatives
The fair value of volatility-based instruments (i.e. options) are estimated based on market prices, volatilities, credit risk and interest rates for the periods under review. The Company used the Black-Scholes option pricing formula to value commodity option contracts. The fair value of forward sales and purchases were estimated based on the quoted market prices and credit risk for the contracts at December 31, 2009.

Investments

Marketable equity securities classified as available-for-sale are carried at fair value. Marketable debt securities classified as held to maturity are measured at amortized cost. Non-marketable assets classified as held to maturity are measured at amortized cost. The fair value of marketable debt securities and non-marketable assets has been calculated using market interest rates. Investments in non-marketable debt securities classified as held to maturity are measured at amortized cost. The cost method investment isNon-marketable equity securities classified as available for sale are carried at cost. There is no active market for the investment and thecost or fair value, cannotwhere fair value can be reliably measured.

The following is the fair value of the derivative (liabilities)/assets and liabilities split by accounting designation:

                 
    
  December 31, 2010 
      Cash flow       
      hedge  Non-hedge    
      accounted  accounted  Total 
Assets Balance Sheet location  $  $  $ 
 
Warrants on shares Current assets - derivatives     1   1 
   
Total derivatives         1   1 
                 
    
  December 31, 2010 
      Cash flow       
      hedge  Non-hedge    
      accounted  accounted  Total 
Liabilities Balance Sheet location  $  $  $ 
 
Option component of convertible bonds Non-current liabilities - derivatives     (176)  (176)
   
Total derivatives         (176)  (176)
 
                 
  December 31, 2009 
      Cash flow       
      hedge  Non-hedge    
      accounted  accounted  Total 
  Balance Sheet location  $  $  $ 
 
Assets
                
Forward sales type agreements — commodity Current assets - derivatives     283   283 
Option contracts — commodity Current assets - derivatives     47   47 
 
Total hedging contracts         330   330 
Warrants on shares Non-current assets - derivatives     5   5 
 
Total derivatives         335   335 
 
                 
Liabilities
                
Forward sales type agreements — commodity Current liabilities - derivatives  (37)  (441)  (478)
Option contracts — commodity Current liabilities - derivatives     (2,034)  (2,034)
Interest rate swaps — gold Current liabilities - derivatives     (13)  (13)
 
Total hedging contracts      (37)  (2,488)  (2,525)
Embedded derivatives Non-current liabilities - derivatives     (1)  (1)
Option component of convertible bonds Non-current liabilities - derivatives     (175)  (175)
 
Total derivatives      (37)  (2,664)  (2,701)
 

244


 

 
  December 31, 2012 
  

Liabilities

 

 
  Balance Sheet location        

Non-hedge
accounted

$

     

Total

$

 

 

 

Option component of convertible bonds

 

Non-current liabilities - derivatives

     (9)       (9)  

Embedded derivatives

 

Non-current liabilities - derivatives

     (1)       (1)  
 

 

 

Total derivatives

      (10)       (10)  

 

 
         

 

 
  December 31, 2011 
  Liabilities 
  Balance Sheet location        Non-hedge
accounted
$
     

Total

$

 

 

 

Option component of convertible bonds

 

Non-current liabilities - derivatives

     (92)       (92)  

Embedded derivatives

 

Non-current liabilities - derivatives

     (1)       (1)  
 

 

 

Total derivatives

      (93)       (93)  

 

 
         

 

 

At December 31, 2010 the Company had no open derivative positions in its hedge book. The impact of credit risk adjustment totaled $150 million at December 31, 2009.
Non-hedge derivative gain/(loss)(gain)/loss recognized

                                                                           

 

 
   Year ended December 31, 
   2012    2011    2010  
  

 

 

 
   $   $   $ 

 

 

Realized (1)

      

Forward sales type agreements - commodity

             377   

Option contracts - commodity

             2,573   

Forward sales agreements - currency

             13   

Option contracts - currency

             (3)  

Interest rate swaps - Gold

             15   
  

 

 

 
             2,975  (2) 

Unrealized (1)

      

Forward sales type agreements - commodity

             (265)  

Option contracts - commodity

             (1,999)  

Interest rate swaps - Gold

             (13)  

Option component of convertible bonds

   (83)     (84)       

Other commodity contracts

   (10)            

Embedded derivatives

            (1)  

Warrants on shares

               
  

 

 

 
   (93)     (83)     (2,272)  
  

 

 

 

Non-hedge derivatives (gain)/loss

   (93)     (83)     703  
  

 

 

 

(1)
Year ended December 31, 2010
Location of gain/(loss)

Realized and unrealized gains and losses on non-hedge derivatives are included in income statement

$
Realized
Forward sales type agreements — commodityNon-hedge“Non-hedge derivative gain/(loss)(gain)/loss and movement on bonds(377)
Option contracts — commodityNon-hedge derivative gain/(loss) and movement on bonds(2,573)
Forward sales agreements — currencyNon-hedge derivative gain/(loss) and movement on bonds(13)
Option contracts — currencyNon-hedge derivative gain/(loss) and movement on bonds3
Interest rate swaps — GoldNon-hedge derivative gain/(loss) and movement on bonds(15)
(2,975)(1)
Unrealized
Forward sales type agreements — commodityNon-hedge derivative gain/(loss) and movement on bonds265
Option contracts — commodityNon-hedge derivative gain/(loss) and movement on bonds1,999
Interest rate swaps — GoldNon-hedge derivative gain/(loss) and movement on bonds13
Option component of convertible bondsNon-hedge derivative gain/(loss) and movement on bonds(1)
Embedded derivativesNon-hedge derivative gain/(loss) and movement on bonds1
Warrants on sharesNon-hedge derivative gain/(loss) and movement on bonds(5)
2,272
Loss on non-hedge derivatives(703)
bonds” in the income statement.

(2)

(1)

IncludesIncluded $2,698 million loss related to the final tranche of the accelerated hedge buy-back.
Non-hedge derivative gain/(loss) recognized
Year ended December 31, 2009
Location of gain/(loss) in income statement$
Realized
Forward sales type agreements — commodityNon-hedge derivative gain/(loss) and movement on bonds(535)
Option contracts — commodityNon-hedge derivative gain/(loss) and movement on bonds(144)
Forward sales agreements — currencyNon-hedge derivative gain/(loss) and movement on bonds107
Option contracts — currencyNon-hedge derivative gain/(loss) and movement on bonds12
Interest rate swaps — GoldNon-hedge derivative gain/(loss) and movement on bonds16
(544)(1)
Unrealized
Forward sales type agreements — commodityNon-hedge derivative gain/(loss) and movement on bonds(188)
Option contracts — commodityNon-hedge derivative gain/(loss) and movement on bonds(648)
Forward sales agreements — currencyNon-hedge derivative gain/(loss) and movement on bonds(15)
Option contracts — currencyNon-hedge derivative gain/(loss) and movement on bonds(3)
Interest rate swaps — GoldNon-hedge derivative gain/(loss) and movement on bonds(25)
Option component of convertible bondsNon-hedge derivative gain/(loss) and movement on bonds(33)
Embedded derivativesNon-hedge derivative gain/(loss) and movement on bonds(1)
Warrants on sharesNon-hedge derivative gain/(loss) and movement on bonds5
(908)
Loss on non-hedge derivatives(1,452)
(1)Includes $797 million loss related to the accelerated hedge buy-back.buy-back executed during 2010.

245


Other comprehensive income
Year ended December 31, 2010
Cash flow
hedges, beforeCash flow hedges removed from
taxequity, before taxHedge ineffectiveness, before tax
$$$
Amount of
Gain/(loss)Location of(gain)/loss
recognized in(gain)/lossreclassified fromAmount of
accumulatedreclassified fromaccumulated other(gain)/loss
otheraccumulated othercomprehensiverecognized
comprehensivecomprehensiveincome intoLocation of (gain)/lossin income
income (effectiveincome into incomeincome (effectiverecognized in income(ineffective
portion)(effective portion)portion)(ineffective portion)portion)
Forward sales type agreements - commodityProduct sales52Non-hedge derivatives gain/(loss) and movement on bonds
52
Other comprehensive income
                     
  Year ended December 31, 2009 
  Cash flow hedges,  Cash flow hedges removed from equity,    
  before tax      before tax  Hedge ineffectiveness, before tax 
  $      $      $ 
          Amount of        
  Gain/(loss)  Location of  (gain)/loss        
  recognized in  (gain)/loss  reclassified from      Amount of 
  accumulated  reclassified from  accumulated other      (gain)/loss 
  other  accumulated other  comprehensive      recognized 
  comprehensive  comprehensive  income into  Location of (gain)/loss  in income 
  income (effective  income into income  income (effective  recognized in income  (ineffective 
  portion)  (effective portion)  portion)  (ineffective portion)  portion) 
Forward sales type agreements - commodity  (16) Product sales  137  Non-hedge derivatives gain/(loss) and movement on bonds  5 
Forward sales agreements - currency  (1) Depreciation    Non-hedge derivatives gain/(loss) and movement on bonds   
   (17)      137       5 
Other comprehensive income
                 
  Accumulated other  Changes in fair      Accumulated other 
  comprehensive income as  value recognized  Reclassification  comprehensive income 
  of January 1, 2010  in 2010  adjustments  as of December 31, 2010 
  $  $  $  $ 
 
Derivatives designated as Gold sales  (52)     52    
Capital expenditure  (3)        (3)
   
Before tax totals  (55)     52   (3)(1)
   
After tax totals  (22)     20   (2)
   

246


 

 
  

Accumulated other
comprehensive income
as of    January 1, 2012

$

  

Changes in fair
value recognized
in 2012

$

  

Reclassification
adjustments

$

  

 

Accumulated other
comprehensive income
as of December 31,
2012

$

 

 

 

Derivatives designated as

    

Capital expenditure

  (3)          (3)  
 

 

 

 

Before tax totals

  (3)          (3)  
 

 

 

 

After tax totals

  (2)          (2)  
 

 

 

 
    

 

 
  Accumulated other
comprehensive income
as of    January 1, 2011
$
  

Changes in fair
value recognized
in 2011

$

  

Reclassification
adjustments

$

  

 

Accumulated other
comprehensive income
as of December 31,
2011

$

 

 

 

Derivatives designated as

    

Capital expenditure

  (3)          (3)  
 

 

 

 

Before tax totals

  (3)          (3)  
 

 

 

 

After tax totals

  (2)          (2)  
 

 

 

 

                 
  Accumulated other          Accumulated other 
  comprehensive  Changes in fair      comprehensive income 
  income as  value recognized  Reclassification  as of December 31, 
  of January 1, 2009  in 2009  adjustments  2009 
  $  $  $  $ 
  | | | |
Derivatives designated as                
Gold sales  (178)  (16)  142   (52)
Capital expenditure  (2)  (2)  1   (3)
   
Before tax totals  (180)  (18)  143   (55)(1)
   
After tax totals  (112)  (13)  103   (22)
   
(1)Includes adjustment for cumulative net translation differences of $nil million (2009: $18 million) resulting from the revaluation and settlement of non US dollar denominated cash flow hedge contracts.
Maturity profile of derivatives, at carrying value
             
  2010 
  Total  Assets  Liabilities 
  $  $  $ 
 
Amounts to mature within twelve months of balance sheet date  1   1    
Amounts maturing between one and two years         
Amounts maturing between two and five years (176)  176      (176)
   
Total  (175)  1   (176)
 
             
  2009 
  Total  Assets  Liabilities 
  $  $  $ 
 
Amounts to mature within twelve months of balance sheet date  (2,195)  330   (2,525)
Amounts maturing between one and two years  5   5    
Amounts maturing between two and five years  (175)     (175)
Amounts to mature thereafter  (1)     (1)
   
Total  (2,366)  335   (2,701)
 

                                                            

 

 
   

Total

$

   

 

2012

Assets

$

   

Liabilities

$

 

 

 

Amounts to mature within twelve months of balance sheet date

              

Amounts maturing between one and two years

   (9)         (9)  

Amounts maturing between two and five years

               

Amounts to mature thereafter

   (1)          (1)  
  

 

 

 

Total

   (10)          (10)  
  

 

 

 
      

 

 
   

Total

$

   

 

2011

Assets

$

   

Liabilities

$

 

 

 

Amounts to mature within twelve months of balance sheet date

              

Amounts maturing between one and two years

              

Amounts maturing between two and five years

   (92)          (92)  

Amounts to mature thereafter

   (1)          (1)  
  

 

 

 

Total

   (93)          (93)  
  

 

 

 

Sensitivity analysis

Derivatives

A principal part of the Company’s management of risk is to monitor the sensitivity of derivative positions in the hedge book to changes in the underlying factors, including commodity prices, foreign exchange rates and interest rates under varying scenarios. There are no open hedge positions as a result of the hedge book elimination during 2010. Additionally the Company’s management of risk is to monitor

The Company monitors the sensitivity of the convertible bonds to changes in AngloGold Ashanti Limited’sits share price and warrants on shares.

247

price.


The following table discloses the approximate sensitivities,sensitivity, in US dollars, of the warrants on shares and the convertible bonds to key underlying factorsthe Company’s share price at December 31, 20102012 (actual changes in the timing and amount of the following variables may differ from the assumed changes below).
                 
  2010 
     Cash flow      Total 
  Change in  hedge  Non-hedge  change in 
  underlying  accounted  accounted  fair value 
  factor (+)  $  $  $ 
Convertible bonds
                
AngloGold Ashanti Limited share price (US$) Spot (+$1)     (10)  (10)
Warrants on shares
                
B2Gold Corporation share price (C$) Spot (+C$0.25)     1   1 
                 
  2010         
    Cash flow       
  Change in  hedge  Non-hedge  Total change in 
  underlying  accounted  accounted  fair value 
  factor (-)  $  $  $ 
Convertible bonds
                
AngloGold Ashanti Limited share price (US$) Spot (-$1)     9   9 
Warrants on shares
                
B2Gold Corporation share price (C$) Spot (-C$0.25)         

                                                            

 

 
   2012 
  

 

 
   

 

Change in
          underlying

factor

 Non-hedge
accounted
  Total change in
fair value
 
     $  $ 

 

 

Convertible bonds

    

AngloGold Ashanti Limited share price ($)

  Spot (+$5)  (14)    (14)  

AngloGold Ashanti Limited share price ($)

  Spot (-$5)        
    

 

 

Mandatory convertible bonds

The mandatory convertible bond valuation is primaryprimarily linked to the AngloGold Ashanti Limited share price traded on the New York Stock Exchange (NYSE) and fluctuates with reference to the NYSE share price and market interest rates. A changeAn increase or decrease of $1$5 in the AngloGold Ashanti Limited share price will generally impact the value of the mandatory convertible bond priceliability in a stable interest environment by $0.83.

approximately +$72 million and -$83 million, respectively.

Foreign exchange risk

Foreign exchange risk arises on financial instruments that are denominated in a foreign currency.

The following table discloses the approximate foreign exchange risk sensitivities of debt at December 31, 20102012 (actual changes in the timing and amount of the following variables may differ from the assumed changes below).

 
   20102012

 
   

Change in
          exchange rate

  

Change in
borrowings

total

 
     

$

 
Debt

 

Debt

ZAR denominated (R/$)

  Spot (+R1)   (19(22))

BRL denominated (BRL/$)

  Spot (+BRL0.25)   (1)

NAD denominated (NAD/$)

Spot (+NAD1)   (2)

AUD denominated (AUD/$)

Spot (+AUD0.05)   (13)  

 
   20102012

 
   

Change in
exchange rate

  

Change in
borrowings

total

 
     

$

 
Debt

 

Debt

ZAR denominated (R/$)

  Spot (-R1)   2628  

BRL denominated (BRL/$)

  Spot (-BRL0.25)   1

NAD denominated (NAD/$)

Spot (-NAD1)

AUD denominated (AUD/$)

Spot (-AUD0.05)14 

 

248


ITEM 12: DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

12A.

Debt Securities

Not applicable

12B.

Warrants and Rights

Not applicable

12C.

Other Securities

Not applicable

12D.

American Depositary Shares

12A. Debt Securities
     Not applicable
12B. Warrants and Rights
     Not applicable
12C. Other Securities
     Not applicable
12D. American Depositary Shares
12D.3 Depositary Fees and Charges

AngloGold Ashanti’s American Depositary Shares, or ADSs, each representing one of AngloGold Ashanti’s ordinary shares, are traded on the New York Stock Exchange under the symbol “AU.” The ADSs are evidenced by American Depositary Receipts, or ADRs, issued by The Bank of New York Mellon, as Depositary under the Amended and Restated Deposit Agreement dated as of June 3, 2008, among AngloGold Ashanti Limited, The Bank of New York Mellon and owners and beneficial owners of from time to time of ADRs. ADS holders may have to pay the following service fees to the Depositary:

Service

  AngloGold Ashanti’s American Depositary Shares, or

Fees (USD)

Issuance of ADSs each representing one of AngloGold Ashanti’s ordinary shares, are traded on the New York Stock Exchange under the symbol “AU.” The ADSs are evidenced by American Depositary Receipts, or ADRs, issued by The Bank of New York Mellon, as Depositary under the Amended and Restated Deposit Agreement dated as of June 3, 2008, among AngloGold Ashanti Limited, The Bank of New York Mellon and owners and beneficial owners of from time to time of ADRs. ADS holders may have to pay the following service fees to the Depositary:

  
ServiceFees (USD)
Issuance of ADSsUp to 5 cents per ADS(1)

Cancellation of ADSs

  Up to 5 cents per ADS(1)

Distribution of cash dividends or other cash distributions

  Up to 2 cents per ADS(2)

Distribution of securities pursuant to

  

    (i) stock dividends, free stock distributions or

  

    (ii) exercises of rights to purchase additional ADSs

  Up to 5 cents per ADS(2)

ADR Depositary Services fee

  Up to 2 cents per year(2)

(1)

These fees are typically paid to the Depositary by the brokers on behalf of their clients receiving the newly-issued ADSs from the Depositary and by the brokers on behalf of their clients delivering the ADSs to the Depositary for cancellation. The brokers in turn charge these transaction fees to their clients.

(2)

In practice, the Depositary has not collected these fees. If collected, such fees are offset against the related distribution made to the ADR holder.

In addition, ADS holders are responsible for certain fees and expenses incurred by the Depositary on their behalf including (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of ordinary shares generally on the share register and applicable to transfers of ordinary shares to the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals, and (3) such cable, telex and facsimile transmission expenses as are expressly incurred by the Depositary in the conversion of foreign currency.

Fees and other charges payable by the Depositary, any of the Depositary’s agents, including the Custodian, or the agents of the Depositary’s agents in connection with the servicing of Shares or other Deposited Securities, shall be collected at the sole discretion of the Depositary by billing such owners for such charge or by deducting such charge from one or more cash dividends or other cash distributions.

For further information, refer to “Item 10.B —10B.: Memorandum of Incorporation – The Deposit Agreement”deposit agreement”.

12D.4 Depositary Payments for 20102012

For the year ended December 31, 2010,2012, The Bank of New York Mellon, as Depositary, has agreed to reimbursereimbursed AngloGold Ashanti an amount of $798,343 (2009:$1,208,174)$24,220 (2011: $725,780) mainly for contributions towards the company’s investor relations activities (including investor meetings, conferences and fees of investor relations service vendors).

249related expenses.


PART II

ITEM 13:  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.

250


None.

ITEM 14:    MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
None.

251


None.

ITEM 15: CONTROLS AND PROCEDURES

(a)

Disclosure Controls and Procedures:As of December 31, 20102012 (the “Evaluation Date”), the company, under the supervision and with the participation of its management, including the chief executive officer and chief financial officer has evaluated the effectiveness of the company’s disclosure controls and procedures (as defined in Rules 13(a) 15(e) and 15(d) 15(e) under the Securities Exchange Act of 1934, as amended (“the Exchange Act”). Based on such evaluation, the chief executive officer and chief financial officer have concluded that, as of the Evaluation Date, the company’s disclosure controls and procedures are effective, and are reasonably designed to ensure that information required to be disclosed by the company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. These disclosure controls and procedures include without limitation, controls and procedures designed to ensure that information required to be disclosed by the company in reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding disclosure.

(b)

Management’s Annual Report on Internal Control over Financial Reporting:Management is responsible for establishing and maintaining adequate internal control over financial reporting for the company, as defined in the Exchange Act Rule 13(a) 15(f) and 15(d) -15(f). The company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the company’s financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America.

The company’s internal control over financial reporting includes those policies and procedures that:

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of the assets of the company;

The company’s internal control over financial reporting includes those policies and procedures that:

Provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and the Directors of the company; and

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of the assets of the company;
Provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and the Directors of the company; and
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods is subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.

The company’s management assessed the effectiveness of the company’s internal control over financial reporting as of the Evaluation Date. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control Integrated Framework. Based on this assessment, and using those criteria, management concluded that the company’s internal control over financial reporting was effective as of the Evaluation Date.

(c)

Changes in Internal Control over Financial Reporting:There have been no changes in the company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rule 13(a) 15 during the year ended December 31, 20102012 that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting.

(d)

Attestation Report of the Registered Public Accounting Firm:The company’s independent registered accounting firm, Ernst & Young Inc., has issued an audit report on the effectiveness of the company’s internal control over financial reporting. This report appears below.

/s/ AM O’Neill

  
/s/ M Cutifani  

/s/ S Venkatakrishnan

Tony O’Neill

  
Mark Cutifani
  

Srinivasan Venkatakrishnan

Chief Executive Officer
  

Chief Financial Officer

/s/ S Venkatakrishnan

Srinivasan Venkatakrishnan

Joint Chief Executive Officers

252


REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The board of directors and stockholders of AngloGold Ashanti Limited

We have audited AngloGold Ashanti Limited’s internal control over financial reporting as of December 31, 2010,2012, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). AngloGold Ashanti Limited’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying management certification.Management’s Annual Report on Internal Controls over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, AngloGold Ashanti Limited maintained, in all material respects, effective internal control over financial reporting as of December 31, 2010,2012, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the 20102012 consolidated financial statements of AngloGold Ashanti Limited and our report dated May 27, 2011April 26, 2013 expressed an unqualified opinion thereon.

/s/ Ernst & Young Inc.

Registered Auditor

Johannesburg, Republic of South Africa
May 27, 2011

253


April 26, 2013

ITEM 16A: AUDIT COMMITTEE FINANCIAL EXPERT

Membership of the audit and corporate governance committee, including its chairman, comprises only independent non-executive directors, in compliance with the Sarbanes-Oxley Act. This also fulfils the guidelines of the King III, Code, which became effective in March 2010, and the requirements of the Companies Act 71, of 2008, which becomesbecame effective on May 1, 2011. The Sarbanes-Oxley Act requires the board to identify a financial expert from within its ranks. The board has resolved that the committee’s chairman, Prof Wiseman Nkuhlu is the auditAudit and corporate governanceCorporate Governance committee’s financial expert. All threeThree of the four members of the committee have considerable financial knowledge and experience to help oversee and guide the board and the company in respect of the audit and corporate governance disciplines.

The committee is guided by its terms of reference. The mandate as delegated by the board is ensuring integrity of financial reporting and adequacy of governance, internal control and risk management policies and processes throughout the company.

ITEM 16B: CODE OF ETHICS AND WHISTLE BLOWING POLICIES

In order to comply with the company’s obligation in terms of the Sarbanes-Oxley Act and the South African King Code on Corporate Governance,III, and in the interests of good governance, the company has systems and procedures to introduce, monitor and enforce its ethical codes and has adopted a code of business principles and ethics for employees and directors, a code of ethics for the chief executive officer, principal financial officer and senior financial officers, and a whistle-blowing policy that encourages employees to report anonymously if they wish and other stakeholders to confidentially and anonymously reportwithout fear of retaliation acts of an unethical or illegal nature that affect the company’s interests. Senior management oversee compliance withThe code of business principles and ethics expresses the ethical code by means of several mechanisms including:

Assessing the integrity of new appointees in the selection and promotion process;
Adherencecompany’s commitment to the policy on the delegationconduct of authority;
Induction ofits business in line with ethical standards and is designed to enable employees and directors perform their roles and employees on the company’s values, policiesduties with integrity and procedures; and
Compliance with a strict disciplinary code of conduct.
responsibility.

The whistle-blowing policy applies to all companies in the AngloGold Ashanti group and provides a channelchannels for shareholders, employees and the general public to report acts and practices that are in conflict with the company’s code of business principles and ethics or are unlawful, including financial malpractice or dangers to the public or the environment. Reports aremay be made to management or through several mediums including the intranet, internet, telephone, fax and post. An initiative is being undertaken to also implement short messaging system (sms) as a medium for reporting., fax and post. All reports not made in terms of the whistle-blowing policyto management are administered by a third party, Tip-Offs Anonymous, to ensure confidentiality and independence of the process. Reported cases are relayed to management through internal audit. A report is provided by internal audit to the Executive Committee and the Audit and Corporate Governance Committee on a quarterly basis. Reporters have the option to request feedback on reported cases. The processwhistle-blowing policy encourages reports to be made in good faith in a responsible and ethical manner. Employees are encouraged to first seek resolution of alleged malpractices through discussion with their direct managers, if appropriate, or if unresolved, they should then report these throughother management including legal, compliance, human resources or internal audit.

The code of business principles and ethics for employees and directors and the whistle-blowing line or directly to internal audit or the legal department.

In addition, the company has adopted a disclosures policy, the objective of which is to ensure compliance with the rules of the various exchanges on which it is listed and provide timely, accurate and reliable information fairly to all stakeholders, including investors (and potential investors), regulators and analysts.
Each code of ethics whistle blowingfor the chief executive officer, principal financial officer and disclosure policy issenior financial officers are available on the company’s website at

http://www.anglogoldashanti.co.za/About+our+business/Gov+Policies.htm. Each code of ethics and disclosure policy is also available on request from the company secretary.

254Policies.htm.


ITEM 16C: PRINCIPAL ACCOUNTANT FEES AND SERVICES

Ernst & Young Inc. has served as AngloGold Ashanti’s independent public accountants for each of the financial years in the three-year period ended December 31, 20102012 for which audited financial statements appear in this annual report on Form 20-F.

The following table presents the aggregate fees for professional services and other services rendered by Ernst & Young Inc. to AngloGold Ashanti in 20102012 and 2009.

         
  2010  2009 
(in millions) $  $ 
Audit fees(1)
  7.76   5.80 
Audit-related fees(2)
  1.98   1.77 
Tax fees(3)
  0.17   0.40 
       
Total  9.91   7.97 
       
2011.

 (in millions)      

2012

$

     

2011 

 Audit fees(1)

     6.83      6.97 

 Audit-related fees(2)

      4.17      6.76 

 Tax fees(3)

      0.39      0.39 

 Total

      11.39      14.12 

Rounding may result in computational differences.

Rounding may result in computational differences.
(1)

The Audit fees consist of fees billed for the annual audit services engagement and other audit services, which are those services that only the external auditor reasonably can provide, and include the Company audit; statutory audits; attest services; and assistance with and review of documents filed with the SEC. Included in the Audit Fees for 2010 and 2009 are fees paid to the external auditors in respect of SOX, which was implemented in 2006.

(2)

Audit-related fees consist of fees billed for assurance and related services and include consultations concerning financial accounting and reporting standard, comfort letters and consents.services.

(3)

Tax fees include fees billed for tax advice and tax compliance services.

Audit and Corporate Governance Committee Pre-approval Policies and Procedures

It is the policy of AngloGold Ashanti to maintain compliance with the requirements of the various applicable legislation and good governance practices when appointing or assigning work to the Company’s external auditor. Non-audit services may not be undertaken without an employee of AngloGold Ashanti obtaining the pre-approval of the Audit and Corporate Governance Committee as is laid out in the procedures relating to the pre-approval process.

The auditAudit and corporate governance committeeCorporate Governance Committee has delegated the approval authority to the chairman of the committee, Prof Wiseman Nkuhlu or his designated official. The approval may take the form of a written or oral instruction, and in the case of an oral instruction this would be ratified at the next auditAudit and corporate governance committeeCorporate Governance Committee meeting. On a quarterly basis a summary of all approvals and work to date is tabled at the auditAudit and corporate governance committeeCorporate Governance Committee meeting.

All non-audit services provided to AngloGold Ashanti by the principal independent registered public accounting firm during 20102012 were reviewed and approved according to the procedures above. None of the services provided during 20102012 were approved under thede minimisexception allowed under the Exchange Act.

No work was performed by persons other than the principal accountant’s employees in respect of the audit of AngloGold Ashanti’s financial statements for 2010.

2012.

ITEM 16D: EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E: PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Neither the issuer nor any affiliate of the issuer purchased any of the company’s shares during 2010.

2552012.


ITEM 16F: CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not applicable.

ITEM 16G: CORPORATE GOVERNANCE

The following is a summary of the significant ways in which AngloGold Ashanti’s corporate governance practices differ from those followed by US domestic companies under the New York Stock Exchange’s corporate governance listing standards (the “NYSE(NYSE listing standards”)standards).

The NYSE listing standards require the appointment of a Nominations Committee to oversee the appointment of new directors to the board, and that such committee be comprised solely of independent directors. The JSE Listing Requirements also require the appointment of such a committee, but require that it be comprised solely of non-executive directors, the majority of whom must be independent.

The company has appointed a Nominations Committee of the board. The nominations committee’s membership comprises only of non-executive board members, all of whom, but one, are independent, as defined in the JSE Listing Requirements, and is chaired by the independent chairman of the board.

AngloGold Ashanti’s home country practices are regulated by the JSE Securities Exchange South Africa Listings Requirements (JSE listing requirements). The NYSEJSE listing standardsrequirements require that a majorityAngloGold Ashanti adhere to King III. Although there are differences between King III and the NYSE corporate governance rules, AngloGold Ashanti has voluntarily adopted corporate governance practices that do not differ in any significant ways from the requirements of the boardNYSE corporate governance rules.

ITEM 16H: MINE SAFETY DISCLOSURE

The information concerning certain mine safety violations or other regulatory matters required pursuant to be comprised of independent directors, as such term is defined in the NYSE listing standards, and that the remunerations committeeSection 1503(a) of the board be fully independent. In previous years, AngloGold Ashanti did not comply with these standards as the JSE Listing Requirements did not have similar standards. However, since May 6, 2008, the board comprises of a majority of independent directors, as definedDodd-Frank Wall Street Reform and Consumer Protection Act and this Item 16H is included in the JSE Listing Requirements, and the remuneration committee of the board is fully independent.

256Exhibit 19.16 to this annual report on Form 20-F.


PART III

ITEM 17:  FINANCIAL STATEMENTS

Not applicable.

257


ITEM 18: FINANCIAL STATEMENTS

258


Report of Independent Registered Public Accounting Firm

The board of directors and stockholders of AngloGold Ashanti Limited

We have audited the accompanying consolidated balance sheets of AngloGold Ashanti Limited (the “Company”) as of December 31, 2010, 20092012 and 20082011 and the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2010.2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

The

We did not audit the financial statements of Kibali Goldmines SPRL (“Kibali”), a corporation in which the Company has a 45 percent interest. In the consolidated financial statements, the Company’s investment in Kibali is stated at $797 million as of December 31, 2012, and the Company’s equity in the net income of Kibali is stated at $2 million for the year ended December 31, 2012. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Kibali, is based solely on the report of the other auditors.

We did not audit the financial statements of Société d’Exploitation des Mines d’Or de Sadiola S.A. (“Sadiola”), a corporation in which the Company has a 41 percent (Decemberinterest. In the consolidated financial statements, the Company’s equity in the net income of Sadiola is stated at $35 million for the year ended December 31, 2008: 38 percent) interest, have been2010. Those statements were audited by other auditors for the years ended December 31, 2010 and December 31, 2008 and for the periods then ended, whose reportsreport has been furnished to us, and our opinion, on the consolidated financial statements, insofar as it relates to the amounts included for Sadiola, is based solely on the report of the other auditors. In the consolidated financial statements, the Company’s investment in Sadiola is stated at $99 million at December 31, 2010 and $97 million at December 31, 2008, the Company’s equity in net income is stated at $35 million for the year ended December 31, 2010, and the Company’s equity in net loss is stated at $52 million for the year ended December 31, 2008.

The financial statements of Société des Mines de Morila S.A. (“Morila”), a corporation in which the Company has a 40 percent interest, have been audited by other auditors at December 31, 2008 and for the period then ended, whose report has been furnished to us, and our opinion on the consolidated financial statements, insofar as it relates to the amounts included for Morila, is based solely on the report of the other auditors. In the consolidated financial statements, the Company’s investment in Morila is stated at $114 million at December 31, 2008, and the Company’s equity in net loss is stated at $69 million for the year then ended.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of AngloGold Ashanti Limited at December 31, 2010, 20092012 and 2008,2011, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 20102012 in conformity with U.SU.S. generally accepted accounting principles.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of AngloGold Ashanti Limited’s internal control over financial reporting as of December 31, 2010,2012, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated May 27, 2011April 26, 2013 expressed an unqualified opinion thereon.

/s/ Ernst & Young Inc.

Registered Auditor

Johannesburg, Republic of South Africa
May 27, 2011

259


April 26, 2013

REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and stockholders Kibali Goldmines Sprl

We have audited the accompanying statement of financial position of Kibali Goldmines Sprl as of December 31, 2012 and the related statement of comprehensive loss, statement of changes in shareholders’ deficit, and statement of cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Kibali Goldmines Sprl at December 31, 2012, and the results of its operations and its cash flows for the year then ended, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB).

/s/ BDO LLP

London

United Kingdom

April 19, 2013

Report of Independent Registered Public Accounting Firm

The Board of Directors and stockholders of Societe d’Exploitation des Mines d’Or de Sadiola S.A.:

We have audited the balance sheet of Societe d’Exploitation des Mines d’Or de Sadiola S.A. (the company) as of December 31, 2010, and the related statements of income, changes in stockholders’ equity and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In

ln our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Societe d’Exploitation des Mines d’Or de Sadiola S.A.SA as of December 31, 2010, and the results of its operations and its cash flows for the year ended December 31, 2010 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

/s/ KPMG Inc.
Registered Auditor

Bloemfontein, South Africa

May 26, 2011

260


Report of Independent Registered Public Accounting Firm
The Board of Directors and stockholders of Societe d’Exploitation des Mines d’Or de Sadiola S.A.:
We have audited the accompanying balance sheet of Societe d’Exploitation des Mines d’Or de Sadiola S.A. (the company) as of December 31, 2008, and the related statements of income, changes in stockholders’ equity and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Societe d’Exploitation des Mines d’Or de Sadiola S.A. as of December 31, 2008, and the results of its operations and its cash flows for the year ended December 31, 2008 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
KPMG Inc.
Registered Auditor
Bloemfontein, South Africa
May 4, 2009

261


Report of the Independent Registered Public Accounting Firm
To the Members of Société des Mines de Morila S.A.
We have audited the accompanying balance sheet of Société des Mines de Morila S.A. (the Company) as of December 31, 2008, and the related statement of income, shareholders’ equity, and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Société des Mines de Morila S.A. at December 31, 2008 and the results of its operations and its cash flows for the year then ended, in conformity with International Financial Reporting Standards as issued by the IASB.
BDO Stoy Hayward LLP
London, England
April 22, 2009

262


PAGE LEFT BLANK INTENTIONALLY

263


ANGLOGOLD ASHANTI LIMITED

Consolidated statements of income

FOR THE YEARS ENDED DECEMBER 31, 2010, 20092012, 2011 and 2008
2010

(In millions, except share and per share information)

                 
      2010  2009  2008 
  Notes  $  $  $ 
 
Sales and other income
      5,402   3,954   3,730 
       
Product sales      5,334   3,784   3,655 
Interest, dividends and other      68   170   75 
       
Costs and expenses
      5,021   4,852   4,103 
       
Production costs      2,656   2,229   2,159 
Exploration costs      206   150   126 
Related party transactions  6   (15)  (18)  (10)
General and administrative      228   158   136 
Royalties      142   84   78 
Market development costs      14   10   13 
Depreciation, depletion and amortization      720   615   615 
Impairment of assets  5   91   8   670 
Interest expense  5   151   123   72 
Accretion expense  5   22   17   22 
Employment severance costs  5   23   14   9 
(Profit)/loss on sale of assets, realization of loans, indirect taxes and other  5   (3)  10   (64)
Non-hedge derivative loss and movement on bonds  5   786   1,452   258 
Other operating items  5         19 
       
Income/(loss) from continuing operations before income tax and equity income in associates
      381   (898)  (373)
       
Taxation (expense)/benefit  7   (255)  33   (22)
       
Equity income/(loss) in associates      40   88   (149)
       
Net income/(loss) from continuing operations
      166   (777)  (544)
       
Discontinued operations  8         23 
       
Net income/(loss)
      166   (777)  (521)
       
Less: Net income attributable to noncontrolling interests      (54)  (48)  (42)
       
Net income/(loss) — attributable to AngloGold Ashanti
      112   (825)  (563)
Net income/(loss) — attributable to AngloGold Ashanti      
       
Income/(loss) from continuing operations      112   (825)  (586)
Discontinued operations            23 
       
       112   (825)  (563)
       
Earnings/(loss) per share attributable to AngloGold Ashanti common stockholders: (cents)
                
 
From continuing operations  9             
Ordinary shares      30   (230)  (186)
E Ordinary shares      15   (115)  (93)
Ordinary shares — diluted      30   (230)  (186)
E Ordinary shares — diluted      15   (115)  (93)
Discontinued operations  9             
Ordinary shares            7 
E Ordinary shares            4 
Ordinary shares — diluted            7 
E Ordinary shares — diluted            4 
       
Net income/(loss)  9             
Ordinary shares      30   (230)  (179)
E Ordinary shares      15   (115)  (89)
Ordinary shares — diluted      30   (230)  (179)
E Ordinary shares — diluted      15   (115)  (89)
       
Weighted average number of shares used in computation
  9             
Ordinary shares      368,688,159   357,355,126   313,157,584 
E Ordinary shares — basic and diluted      3,182,662   3,873,169   4,046,364 
Ordinary shares — diluted      370,257,765   357,355,126   313,157,584 
       
Dividend paid per ordinary share (cents)
      18   13   13 
Dividend paid per E ordinary share (cents)
      9   7   7 
       
The accompanying notes are an integral part of these Consolidated Financial Statements.
 

F-1

        Notes      

2012 

$

   

2011 

$

   

2010 

$

  

Sales and other income

       6,428     6,642    5,402  
           

Product sales

       6,353     6,570    5,334  

Interest, dividends and other

       75     72    68  

 

Costs and expenses

       5,217     4,521    5,021  

 

Production costs

       3,183     2,977    2,656  

Exploration costs

       388     279    206  

Related party transactions

  6     (14)     (12)    (15) 

General and administrative

       299     287    228  

Royalties

       164     193    142  

Market development costs

       10        14  

Depreciation, depletion and amortization

       794     789    720  

Impairment of assets

  5     367     17    91  

Interest expense

  5     213     178    151  

Accretion expense

  5     33     28    22  

Employment severance costs

  5     10     15    23  

Loss/(profit) on sale of assets, realization of loans, indirect taxes and other

  5     35     (43)    (3) 

Non-hedge derivative (gain)/loss and movement on bonds

  5     (265)     (196)    786  
                  

Income from continuing operations before income tax and equity

income in associates

       1,211     2,121    381  

Taxation expense

  7     (340)     (705)    (255) 

Equity (loss)/income in associates

       (23)     59    40  

Net income

       848     1,475    166  

Less: Net income attributable to noncontrolling interests

       (19)     (50)    (54) 

Net income - attributable to AngloGold Ashanti

       829     1,425    112  

Earnings per share attributable to AngloGold Ashanti common stockholders: (cents)

           

Net income

  8         

Ordinary shares

       215     371    30  

E Ordinary shares

       108     185    15  

Ordinary shares - diluted

       161     317    30  

E Ordinary shares - diluted

       84     160    15  

Weighted average number of shares used in computation

  8         

Ordinary shares

       384,374,029     383,010,809    368,688,159  

Ordinary shares - diluted

       419,738,843     418,107,439    370,257,765  

E Ordinary shares - basic and diluted

       2,392,316     2,950,804    3,182,662  

Dividend paid per ordinary share (cents)

       56     34    18  

Dividend paid per E ordinary share (cents)

       28     17     

 

The accompanying notes are an integral part of these Consolidated Financial Statements.

 

F - 1


ANGLOGOLD ASHANTI LIMITED
Consolidated balance sheets
AT DECEMBER 31, 2010 and 2009
(In millions, except share information)
             
      2010  2009 
  Notes  $  $ 
 
ASSETS
            
Current Assets
      1,997   2,758 
       
Cash and cash equivalents      575   1,100 
Restricted cash  10   10   12 
Receivables      298   206 
       
Trade  11   53   45 
Recoverable taxes, rebates, levies and duties      156   82 
Related parties      3   5 
Other  11   86   74 
       
Inventories  12   792   663 
Materials on the leach pad  12   91   40 
Derivatives  24   1   330 
Deferred taxation assets  7   214   333 
Assets held for sale  17   16   74 
       
Property, plant and equipment, net
  13   5,926   5,454 
Acquired properties, net
  14   836   831 
Goodwill
  15   180   162 
Other intangibles, net
  15   17   18 
Derivatives
  24      5 
Other long-term inventory
  12   27   26 
Materials on the leach pad
  12   331   324 
Other long-term assets
  16   1,073   1,022 
Deferred taxation assets
  7   1   62 
           
Total assets
      10,388   10,662 
           
LIABILITIES AND EQUITY
            
Current liabilities
      1,004   4,475 
       
Trade accounts payable      404   340 
Payroll and related benefits      175   147 
Other current liabilities  18   153   120 
Derivatives  24      2,525 
Short-term debt  19   135   1,292 
Tax payable      134   42 
Liabilities held for sale  17   3   9 
       
Other non-current liabilities
  18   69   163 
Long-term debt
  19   1,730   667 
Long-term debt at fair value
  19   872    
Derivatives
  24   176   176 
Deferred taxation liabilities
  7   1,200   1,171 
Provision for environmental rehabilitation
  5 / 20   530   385 
Provision for labor, civil, compensation claims and settlements
      38   33 
Provision for pension and other post-retirement medical benefits
  26   180   147 
Commitments and contingencies
  21       
Equity
      4,589   3,445 
       
Common stock
            
Share capital — 600,000,000 (2009 — 600,000,000) authorized common stock of 25 ZAR cents each. Stock issued 2010 — 381,204,080 (2009 — 362,240,669)      13   12 
Additional paid in capital      8,670   7,836 
Accumulated deficit      (3,869)  (3,914)
Accumulated other comprehensive income      (385)  (654)
Other reserves      37   37 
       
Total AngloGold Ashanti stockholders’ equity      4,466   3,317 
Noncontrolling interests      123   128 
       
Total liabilities and equity
      10,388   10,662 
       
The accompanying notes are an integral part of these Consolidated Financial Statements.
            

F-2


ANGLOGOLD ASHANTI LIMITED
Consolidated statements of cash flows
comprehensive income

FOR THE YEARS ENDED DECEMBER 31, 2010, 20092012, 2011 and 2008
2010

(In millions)

                 
      2010  2009  2008 
  Notes  $  $  $ 
 
Net cash provided by operating activities
      1,038   443   64 
       
Net income/(loss)      166   (777)  (521)
Reconciled to net cash provided by operations:                
Loss/(profit) on sale of assets, realization of loans, indirect taxes and other      22   18   (64)
Depreciation, depletion and amortization      720   615   615 
Impairment of assets      91   8   670 
Deferred taxation      138   (199)  (72)
Cash utilized for hedge book settlements      (2,611)  (797)  (1,113)
Movement in non-hedge derivatives and bonds      2,544   1,689   511 
Equity (income)/loss in associates      (40)  (88)  149 
Dividends received from associates      143   101   78 
Other non cash items      48   (125)  27 
Net increase in provision for environmental rehabilitation, pension and other post-retirement medical benefits      131   19   24 
Effect of changes in operating working capital items:                
Receivables      (153)  (44)  (7)
Inventories      (215)  (169)  (131)
Accounts payable and other current liabilities      54   192   (101)
       
Net cash provided by continuing operations      1,038   443   65 
Net cash used in discontinued operations            (1)
       
Net cash used in investing activities
      (1,887)  (268)  (1,593)
       
Increase in non-current investments      (114)  (89)  (93)
Associates and equity accounted joint ventures acquired      (44)  (354)   
Proceeds on disposal of associates      1      48 
Associates loans advanced      (3)  (2)  (4)
Associates loans repaid            4 
Additions to property, plant and equipment      (973)  (1,019)  (1,194)
Proceeds on sale of mining assets      69   1,142   39 
Proceeds on sale of discontinued assets            10 
Proceeds on sale of available for sale investments      79   2   4 
Proceeds on redemption of held to maturity investments      63   79   84 
Cash outflows from derivatives purchased      (984)  (18)  (485)
Loans receivable advanced      (6)      
Loans receivable repaid         1    
Change in restricted cash      25   (10)  (6)
       
Net cash generated by financing activities
      230   303   1,715 
       
Short-term debt repaid      (1,522)  (1,867)  (298)
Short-term debt raised      363   1,014   110 
Issuance of stock      798   306   1,722 
Share issue expenses      (20)  (11)  (54)
Long-term debt repaid      (120)  (864)  (316)
Long-term debt raised      1,953   1,760   743 
Debt issue costs      (39)  (14)   
Cash outflows from derivatives with financing      (1,066)     (134)
Cash inflows from derivatives with financing         35    
Dividends paid to common stockholders      (67)  (45)  (41)
Dividends paid to noncontrolling interests      (50)  (11)  (17)
 
Net (decrease)/increase in cash and cash equivalents
      (619)  478   186 
Effect of exchange rate changes on cash
      105   47   (88)
Cash and cash equivalents — January 1,
      1,100   575   477 
 
Cash and cash equivalents — December 31,
      586(1)  1,100   575 
 

        Notes      2012 
$
   

2011 

$

   2010 
$
 

Net income

       848     1,475     166  

Other comprehensive income consists of the following:

          

Translation (loss)/gain

       (93)     (394)     234  
Net loss on cash flow hedges removed from other comprehensive income and reported in income, net of tax               20  

Net (loss)/gain on available-for-sale financial assets arising during the period, net of tax

       (21)     (81)     69  

Release on disposal of available-for-sale financial assets during the period, net of tax

               (51)  
Reclassification of other-than-temporary impairments on available-for-sale financial assets to Net income during the period, net of tax       16     21      
                   

Other comprehensive income

       (98)     (453)     274  

Comprehensive income

       750     1,022     440  

Total comprehensive income attributable to:

          

AngloGold Ashanti

       733     978     381  

Noncontrolling interests

       17     44     59  
       750     1,022     440  

 

The accompanying notes are an integral part of these Consolidated Financial Statements.

          

F - 2


ANGLOGOLD ASHANTI LIMITED

Consolidated balance sheets

AT DECEMBER 31, 2012 and 2011

(In millions, except share information)

    Notes        

2012 

$

         

2011 

$

  

ASSETS

               

Current Assets

         2,790        2,631  

Cash and cash equivalents

         892         1,112  

Restricted cash

  9       35        35  

Receivables

         496         351  

Trade

         104        46  

Recoverable taxes, rebates, levies and duties

         247        170  

Other

  10       145         135  

Inventories

  11       1,165        959  

Materials on the leach pad

  11       128        98  

Deferred taxation assets

  7       74        75  

Assets held for sale

  16                

Property, plant and equipment, net

  12       7,235        6,123  

Acquired properties, net

  13       748        779  

Goodwill

  14       193        182  

Other intangibles, net

  14       112        31  

Other long-term inventory

  11       180        31  

Materials on the leach pad

  11       445        393  

Other long-term assets

  15       1,360        1,001  

Deferred taxation assets

  7       39        14  

Total assets

         13,102        11,185  

LIABILITIES AND EQUITY

               

Current liabilities

         1,959        919  

Trade accounts payable

         590         473  

Payroll and related benefits

         215        186  

Other current liabilities

  17       202        120  

Short-term debt

  18       271        30  

Short-term debt at fair value

  18       588         

Tax payable

         93         108  

Other non-current liabilities

  17       379        63  

Long-term debt

  18       2,750        1,715  

Long-term debt at fair value

  18              758  

Derivatives

  23       10        93  

Deferred taxation liabilities

  7       1,157        1,242  

Provision for environmental rehabilitation

  5 / 19       758        653  

Provision for labor, civil, compensation claims and settlements

         32        35  

Provision for pension and other post-retirement medical benefits

  25       209        185  

Commitments and contingencies

  20               

Equity

         5,848        5,522  

Common stock

               
Share capital - 600,000,000 (2011 - 600,000,000) authorized common stock of 25 ZAR cents each. Share capital - 4,280,000 (2011 - 4,280,000) authorized E ordinary shares of 25 ZAR cents each. Ordinary shares issued 2012 - 383,166,205 (2011 - 381,915,437). E ordinary shares issued 2012 - 700,000 (2011 - 1,050,000)         13         13  

Additional paid in capital

         8,808        8,740  

Accumulated deficit

         (2,103)        (2,575) 

Accumulated other comprehensive income

         (928)        (832) 

Other reserves

         36        36  

Total AngloGold Ashanti stockholders’ equity

         5,826         5,382  

Noncontrolling interests

         22         140  
               

Total liabilities and equity

         13,102         11,185  

The accompanying notes are an integral part of these Consolidated Financial Statements.

 

F - 3


ANGLOGOLD ASHANTI LIMITED

Consolidated statements of cash flows

FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 and 2010

(In millions)

    Notes        

2012 

$

     

2011 

$

     

2010 

$

   

Net cash provided by operating activities

         1,700       2,550       1,038   

Net income

         848       1,475       166   

Reconciled to net cash provided by operations:

                  

Loss on sale of assets, realization of loans, indirect taxes and other

         35       27       22   

Depreciation, depletion and amortization

         794       789       720   

Impairment of assets

         367       17       91   

Deferred taxation

         (74)       299       138   

Cash utilized for hedge book settlements

                       (2,611)   

Movement in non-hedge derivatives and bonds

         (265)       (196)       2,544   

Equity loss/(income) in associates

         23       (59)       (40)   

Dividends received from associates

         79       111       143   

Other non cash items

         53       29       48   

Net increase in provision for environmental rehabilitation, pension and other post-retirement medical benefits

         35       189       131   

Effect of changes in operating working capital items:

                  

Receivables

         (117)       (13)       (153)   

Inventories

         (324)       (244)       (215)   

Accounts payable and other current liabilities

         246       126       54   

Net cash used in investing activities

         (2,651)       (1,603)       (1,887)   

Available for sale investments acquired

         (6)       (47)       (22)   

Held to maturity investments acquired

         (91)       (100)       (92)   

Associates and equity accounted joint ventures acquired

         (2)       (8)       (3)   

Contributions to associates and equity accounted joint ventures

         (347)       (107)       (41)   

Acquisition of subsidiary and loan

         (335)                 

Additions to property, plant and equipment

         (1,758)       (1,393)       (973)   

Interest capitalized and paid

         (12)                 

Expenditure on intangible assets

         (79)       (16)          

Proceeds on sale of mining assets

               19       69   

Proceeds on sale of available for sale investments

                      79   

Proceeds on redemption of held to maturity investments

         86       89       63   

Proceeds on disposal of associates and equity accounted joint ventures

         20                

Proceeds on disposal of subsidiary

                        

Cash outflows from derivatives purchased

                       (984)   

Loans receivable advanced

         (45)              (6)   

Loans receivable repaid

                         

Loans advanced to associates and equity accounted joint ventures

         (65)       (25)       (3)   

Loans repaid by associates and equity accounted joint ventures

                         

Cash of subsidiary acquired

                         

Cash of subsidiary disposed

         (31)       (11)          

Change in restricted cash

         (3)       (19)       25   

Net cash generated/(used) by financing activities

         736       (319)       230   

Short-term debt repaid

         (2)       (118)       (1,522)   

Short-term debt raised

         220             363   

Issuance of stock

               10       798   

Share issue expenses

                (1)       (20)   

Long-term debt repaid

         (215)       (150)       (120)   

Long-term debt raised

         1,212       100       1,953   

Debt issue costs

         (30)              (39)   

Acquisition of noncontrolling interest

         (215)                 

Cash outflows from derivatives with financing

                       (1,066)   

Dividends paid to common stockholders

         (215)       (131)       (67)   

Dividends paid to noncontrolling interests

         (21)       (38)       (50)   
                             

Net (decrease)/increase in cash and cash equivalents

         (215)       628       (619)   

Effect of exchange rate changes on cash

         (5)       (102)       105   

Cash and cash equivalents - January 1,

         1,112       586       1,100   

Cash and cash equivalents - December 31,

           892       1,112       586 (1)  

(1)

Includes cash and cash equivalents of held for sale assets of $11 million at December 31, 2010.

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-3The accompanying notes are an integral part of these Consolidated Financial Statements.

F - 4


ANGLOGOLD ASHANTI LIMITED

Consolidated statements of stockholders’ equity

FOR THE YEARS ENDED DECEMBER 31, 2010, 20092012, 2011 and 2008
2010

(In millions, except share information)

                                 
AngloGold Ashanti stockholders             
              Accumulated other             
      Common  Additional paid  comprehensive  Accumulated  Other  Noncontrolling    
  Common  stock  in capital  income*  deficit  reserves  interests  Total 
  stock  $  $  $  $  $  $  $ 
 
Balance — January 1, 2008
  276,544,061   10   5,607   (625)  (2,440)      63   2,615 
Net (loss)/income                  (563)      42   (521)
Translation loss              (597)          (8)  (605)
Net loss on cash flow hedges removed from other comprehensive income and reported in income, net of tax              157           3   160 
Net loss on cash flow hedges, net of tax              (61)              (61)
Hedge ineffectiveness on cash flow hedges, net of tax              8               8 
Net loss on available-for-sale financial assets arising during the period, net of tax              (29)              (29)
Release on disposal of available-for-sale financial assets during the period, net of tax              (1)              (1)
                                
Other comprehensive loss                              (528)
                                
Comprehensive loss                              (1,049)
Acquisition of subsidiary                          1   1 
Stock issues as part of rights offer  69,470,442   2   1,664                   1,666 
Stock issues as part of Golden Cycle acquisition  3,181,198      118                   118 
Stock issues as part of Sao Bento acquisition  2,701,660      70                   70 
Stock issues as part of Share Incentive Scheme  672,545      14                   14 
Stock issues in exchange for E Ordinary shares cancelled  94      3                   3 
Stock issues transferred from Employee Share Ownership Plan to exiting employees  57,761      2                   2 
Stock based compensation expense          24                   24 
Dividends                  (41)      (17)  (58)
   
Balance — December 31, 2008
  352,627,761   12   7,502   (1,148)  (3,044)      84   3,406 
Net (loss)/income                  (825)      48   (777)
Translation gain              320           6   326 
Net loss on cash flow hedges removed from other comprehensive income and reported in income, net of tax              97           1   98 
Net loss on cash flow hedges, net of tax              (12)              (12)
Hedge ineffectiveness on cash flow hedges, net of tax              5               5 
Net gain on available-for-sale financial assets arising during the period, net of tax              72               72 
Realized loss in earnings on available-for-sale financial assets during the period, net of tax              12               12 
                                
Other comprehensive income                              501 
                                
Comprehensive loss                              (276)
Share of capital transaction at equity accounted joint venture                      37       37 
Stock issues as part of equity offering  7,624,162      280                   280 
Stock issues as part of Share Incentive Scheme  1,131,916      25                   25 
Stock issues in exchange for E Ordinary shares cancelled  1,181      3                   3 
Stock issues transferred from Employee Share Ownership Plan to exiting employees  189,787      7                   7 
Stock based compensation expense          19                   19 
Dividends                  (45)      (11)  (56)
   
Balance — December 31, 2009
  361,574,807   12   7,836   (654)  (3,914)  37   128   3,445 
                                 
Net income                  112       54   166 
Translation gain              229           5   234 
Net loss on cash flow hedges removed from other comprehensive income and reported in income, net of tax              20               20 
Net gain on available-for-sale financial assets arising during the period, net of tax              74               74 
Release on disposal of available-for-sale financial assets during the period, net of tax              (56)              (56)
Realized loss in earnings on available-for-sale financial assets during the period, net of tax              2               2 
                                
Other comprehensive income                              274 
                                
Comprehensive loss                              440 
Stock issues as part of equity offering  18,140,000   1   772                   773 
Stock issues as part of Share Incentive Scheme  823,411      26                   26 
Stock issues in exchange for E Ordinary shares cancelled        12                   12 
Stock issues transferred from Employee Share Ownership Plan to exiting employees  230,921      10                   10 
Stock based compensation expense          14                   14 
Dividends                  (67)      (64)  (131)
   
Balance — December 31, 2010
  380,769,139   13   8,670   (385)  (3,869)  37   123   4,589 
   

    AngloGold Ashanti stockholders          
    

Common

stock

   

        Common

stock

$

   

Additional paid

in capital

$

   

Accumulated other

comprehensive income*

$

   

Accumulated

deficit

$

   

Other

        reserves

$

   

Noncontrolling

interests

$

   

            Total

$

Balance - January 1, 2010   362,974,807     12     7,836     (654)     (3,914)     37     128     3,445 
Net income           112        54     166 
Other comprehensive income         269             274 
Stock issues as part of equity offering   18,140,000         772            773 
Stock issues as part of Share Incentive Scheme   823,411          26            26 
Stock issues in exchange for E Ordinary shares cancelled             12            12 
E Ordinary shares of common stock cancelled - Izingwe Holdings   (280,000)                      
Stock issues transferred from Employee Share Ownership Plan to exiting employees   230,921          10            10 
Stock based compensation expense       14            14 
Dividends                       (67)          (64)    (131)
Balance - December 31, 2010   381,889,139     13     8,670     (385)     (3,869)     37     123    4,589 
Net income           1,425       50    1,475 
Other comprehensive income         (447)         (6)    (453)
Share of equity accounted joint venture’s other comprehensive income             (1)      (1)
Stock issues as part of Share Incentive Scheme   889,593          33            33 
Stock issues in exchange for E Ordinary shares cancelled   99,747          20            20 
E Ordinary shares of common stock cancelled - Izingwe Holdings   (70,000)                      
Stock issues transferred from Employee Share Ownership Plan to exiting employees   156,958                     
Stock based compensation expense       10            10 
Dividends                       (131)          (27)    (158)
Balance - December 31, 2011   382,965,437     13     8,740     (832)     (2,575)     36     140    5,522 
Net income           829       19    848 
Other comprehensive income         (96)         (2)    (98)
Acquisition of noncontrolling interest(1)           (142)       (73)    (215)
Disposal of subsidiary(2)               (45)    (45)
Stock issues as part of Share Incentive Scheme   945,641          33            33 
Stock issues in exchange for E Ordinary shares cancelled   132,978                     
E Ordinary shares of common stock cancelled - Izingwe Holdings   (350,000)                      
Stock issues transferred from Employee Share Ownership Plan to exiting employees   172,149                     
Stock based compensation expense       21            21 
Dividends           (215)       (17)    (232)
Balance - December 31, 2012   383,866,205     13     8,808     (928)     (2,103)     36     22    5,848 

(1)

Acquisition of remaining 50 percent interest in Serra Grande mine on June 28, 2012. See Note 3.

(2)
*

The cumulative translation loss included in accumulated other comprehensive income amounted to $536 million (2009: $765 million). The translation loss has no tax effect. The cumulative charge, net of deferred taxation of $1 million (2009: $33 million), included in accumulated other comprehensive income in respect of cash flow hedges amounted to $2 million (2009: $22 million). The cumulative gain, net of deferred taxation of $nil million (2009: $3 million), included in accumulated other comprehensive income in respect of available for sale financial assets amounted to $89 million (2009: $69 million). The cumulative gain included in accumulated other comprehensive income in respect of the hedgeCompany disposed of a net investment5 percent interest in foreign entities amounted to $64 million (2009: $64 million). This gain is offset by $64 million (2009: $64 million) arising from translation of net investments in foreign entities.Rand Refinery Limited on December 3, 2012. See Note 3.

*The cumulative translation loss included in accumulated other comprehensive income amounted to $1,015 million (2011: $924 million). The translation loss has no tax effect. The cumulative charge, net of deferred taxation of $1 million (2011: $1 million), included in accumulated other comprehensive income in respect of cash flow hedges amounted to $2 million (2011: $2 million). The cumulative gain, net of deferred taxation of $6 million (2011: $nil million), included in accumulated other comprehensive income in respect of available for sale financial assets amounted to $25 million (2011: $30 million). The cumulative gain included in accumulated other comprehensive income in respect of the hedge of a net investment in foreign entities amounted to $64 million (2011: $64 million). This gain is offset by $64 million (2011: $64 million) arising from translation of net investments in foreign entities.

As at December 31, 20102012 and 2009, $1332011, $556 million and $254$305 million, respectively, of retained earnings arising from the Company’s equity accounted joint ventures and certain subsidiaries may not be remitted without third-party shareholder consent.

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-4

F - 5


ANGLOGOLD ASHANTI LIMITED

Notes to the consolidated financial statements

FOR THE YEARS ENDED DECEMBER 31, 2010, 20092012, 2011 and 2008
2010

(In millions, except share and per share information)

1.

NATURE OF OPERATIONS

    

AngloGold Limited was formed in June 1998 with the consolidation of the gold mining interests of Anglo American plc. AngloGold Ashanti Limited, (the “Company”), as it conducts businessthe company exists today, was formed on April 26, 2004 following the Business Combination ofbusiness combination between AngloGold Limited (AngloGold) withand Ashanti Goldfields Company Limited (Ashanti). Limited.

AngloGold formerly Vaal Reefs ExplorationAshanti is a global gold mining company headquartered in Johannesburg, South Africa. AngloGold Ashanti’s main product is gold. As part of extracting gold the Company also produces silver, uranium oxide and Mining Company Limited, was incorporated in South Africa on May 29, 1944 and Ashanti was incorporated in Ghana on August 19, 1974.sulfuric acid as by-products. The Company sells its products on world markets.

AngloGold Ashanti conducts gold-mining operations in the following regions:regions, which represent its business segments:

South Africa;Africa (comprising the Vaal River and West Wits operations)

Continental Africa (Ghana,(comprising Ghana, Guinea, Mali, Namibia and Tanzania);Tanzania operations)

Australasia (Australia) and the(comprising an Australian operation)

Americas (Argentina,(comprising Argentina, Brazil and United States of America). The Company also produces as by-product: silver, uranium oxide and sulfuric acid.America operations)

2.

ACCOUNTING CHANGES

    Disclosures about the credit quality of financing receivables and the allowance for credit losses

Goodwill impairment testing

    

In July 2010,September 2011, the Financial Accounting Standards Board (“FASB”) issued guidance to address concerns about the sufficiency, transparency, and robustness of credit risk disclosures for financing receivables and the related allowance for credit losses. The guidance requires that entities disclose information at disaggregated levels. The expanded disclosures include information regarding the credit quality of receivables as of the end of a reporting period.

The new disclosure requirements apply to all entities that have lending arrangements in the form of receivables or a lessor’s right to lease payments (other than operating leases), although disclosures for trade accounts receivable with a contractual maturity of one year or less are exempt. For public entities, the new disclosures are required for interim and annual periods ending on or after December 15, 2010. Except for disclosure changes, the adoption had no impact on the Company’s financial statements.
The accounting standards codification
In June 2009, the FASB established the accounting standards codification to become the source of authoritative U.S. GAAP. The codification will supersede all non-SEC accounting and reporting standards. It is effective for interim and annual periods ending after September 15, 2009. The adoption had no impact on the Company’s financial statements, other than the references to authoritative U.S. GAAP.
Recognition and presentation of other-than-temporary impairments
In April 2009, the FASB updated the Accounting Standards Codification (“the Codification” or “ASC”) guidance was issued which simplifies how an entity tests goodwill for recognitionimpairment. The guidance allows both public and presentationnonpublic entities an option to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under that option, an entity no longer would be required to calculate the fair value of other-than-temporary impairments which: (i) clarifiesa reporting unit unless the factorsentity determines, based on that should be considered when determining whether a debt securityqualitative assessment, that it is othermore likely than temporarily impaired, (ii) providesnot that its fair value is less than its carrying amount. The adoption of the updated guidance on the amount recognized of an other-than-temporary impairment and (iii) expands the disclosures required. It is effective for interim and annual reporting periods ending after June 15, 2009. The adoptionJanuary 1, 2012 had no material impact on the Company’s financial statements.

    

Presentation of comprehensive income

    Interim

In June 2011, the FASB issued guidance for disclosures about fair valuecomprehensive income. The guidance is intended to increase the prominence of financial instruments

In April 2009, the FASB updated the ASC guidance for interim disclosures about fair value of financial instruments which requires disclosures about fair value of financial instruments for interim reporting periods as well asother comprehensive income in annual financial statements. It is effective for interim reporting periods ending after June 15, 2009.The main provisions of the guidance provide that an entity that reports items of other comprehensive income has the option to present comprehensive income in either one statement or two consecutive statements. The Company adopted the two consecutive statement approach on January 1, 2012. Except for presentation changes, the adoption had no impact on the Company’s financial statements.

F-5

Fair value measurements

In May 2011, the FASB issued updated guidance on fair value measurement and disclosure requirements. The requirements do not extend the use of fair value accounting, but provide guidance on how it should be applied where its use is already required or permitted by other standards within US GAAP. The update will supersede most of the FASB ASC guidance for fair value measurements, although many of the changes are clarifications of existing guidance or wording changes. The adoption of the updated guidance on January 1, 2012 had no impact on the Company’s financial statements.

F - 6


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

2.3.ACCOUNTING CHANGES(continued)

ACQUISITIONS AND DISPOSALS OF BUSINESSES AND ASSETS

    Assets and liabilities from contingencies in business combinations

2012 acquisitions

    

The Company made the following acquisitions during the year:

    

•     Acquisition of First Uranium

On July 20, 2012, AngloGold Ashanti acquired the entire share capital of First Uranium (Pty) Limited, a wholly owned subsidiary of Toronto-based First Uranium Corporation and the owner of Mine Waste Solutions in South Africa, for a cash consideration of $335 million. Mine Waste Solutions is a recently commissioned tailings retreatment operation located in South Africa’s Vaal River region and in the immediate proximity of AngloGold Ashanti’s own tailings facilities. In April 2009,connection with the FASB updatedacquisition, AngloGold Ashanti agreed to guarantee the ASC guidanceobservance and performance of existing delivery obligations of a wholly owned subsidiary of Mine Waste Solutions to sell to an existing customer at a pre-agreed price, 25 percent of the gold produced at a gold recovery plant located in northwest South Africa, subject to a cap of 312,500 ounces over the life of the contract. The transaction was funded from cash reserves and debt facilities. The acquisition has been accounted for accounting foras a purchase business combination under US GAAP whereby identifiable assets acquired and liabilities assumed were recorded at their fair market values as of the date of acquisition. The excess of the purchase price over fair value was recorded as goodwill and as such, the acquisition resulted in goodwill of $9 million being recorded, relating mainly to the expected synergies arising from the immediate proximity of AngloGold Ashanti’s own tailings facilities to the Mine Waste Solutions plant that will allow processing of AngloGold Ashanti’s Vaal River tailings without having to build additional processing facilities.

In accordance with FASB ASC guidance, goodwill is assigned to specific reporting units. The Company’s reporting units are generally consistent with the operating mines underlying segments identified in Note 26 – Segment and geographical information. An individual operating mine is not a typical “going-concern” business combinationbecause of the finite life of its reserves. The allocation of goodwill to an individual operating mine likely will result in an eventual goodwill impairment due to the wasting nature of the primary asset of the reporting unit. The Company evaluates its held-for-use long lived assets for impairment when events or changes in circumstances indicate that arise from contingencies.the related carrying amount likely will not be recoverable over the long term and, in accordance with the FASB ASC guidance, performs its annual impairment review of assigned goodwill during the fourth quarter of each year. The guidance addresses issues raisedaccounting treatment of goodwill arising on initial recognition and measurement, subsequent measurement and accounting and disclosureacquisition of First Uranium (Pty) Limited is consistent with FASB ASC guidance. Goodwill related to the acquisition is non-deductible for income tax purposes. The assets and liabilities arising from contingenciesof First Uranium (Pty) Limited are included in a business combination. It is effectivethe South Africa segment for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after January 1, 2009. The Company adopted the provisions to be applied to all future business combinations.disclosure purposes.

    Derivative instruments

The operations and financial condition of the companies and assets acquired are included in the financial statements from July 20, 2012, the effective date of the acquisition.

    In March 2008,

For information purposes only, the FASB updatedfollowing unaudited pro-forma financial data reflects the ASC guidance for disclosures about derivative instruments and hedging activities. The guidance requires entities to provide enhanced disclosures about (i) how and why an entity uses derivative instruments, (ii) how derivative instruments and related hedged items are accounted for, and (iii) how derivative instruments and related hedged items affect an entity’s financial position,consolidated results of operations and cash flows. The Company adopted these provisionsof AngloGold Ashanti as if the acquisition had taken place on January 1, 2009. Except for presentation changes, the adoption had no impact on the Company’s financial statements.2012, 2011 and 2010:

    

2012

$

  

2011

$

  

2010

$

Total revenue

  6,494   6,767   5,483 
  

 

Net income - attributable to AngloGold Ashanti

  838   1,442   137 
  

 

    Noncontrolling interests
In December 2007,

The pro forma information is not indicative of the FASB updatedresults of operations that would have occurred had the ASC guidance for noncontrolling interests in consolidated financial statements to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. The guidance clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. The Company adopted the provisionsacquisition been consummated on January 1, 2009. Except for presentation changes,2012 or the adoption had no impact on the Company’s financial statements.group’s future results of operations.

    Business combinations
In December 2007,

From the FASB updateddate of acquisition, First Uranium (Pty) Limited has contributed $41 million of revenue and $33 million to the ASC guidance for business combinations, which requires the acquiring entity in a business combination to recognize all the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose information on the nature and financial effectNet income before taxation of the business combination. The Company adopted the provisions on January 1, 2009 to be applied to all future business combinations.    

Post-retirement benefit plan assets
In December 2008, the FASB updated the ASC guidance for employers’ disclosures about post-retirement benefit plan assets, which provides guidance on an employer’s disclosures about plan assets of a defined benefit pension or other post-retirement plan. It requires more detailed disclosures about employers’ plan assets, including employers’ investment strategies, major categories of plan assets, concentrations of risk within plan assets and valuation techniques used to measure the fair value of plan assets. The Company early adopted the provisions as of December 31, 2008. The adoption did not have a material impact on the Company’s financial statements.
Disclosures about credit derivatives and certain guarantees
In September 2008, the FASB updated the ASC guidance for disclosures about credit derivatives and certain guarantees, which requires disclosures by sellers of credit derivatives, including credit derivatives embedded in a hybrid instrument to provide certain disclosures for each credit derivative for each statement of financial position presented. It also requires an additional disclosure about the current status of the payment/performance risk of a guarantee. The Company does not have any credit derivatives. The Company adopted the disclosure requirements with regards to guarantees as of December 31, 2008.Company.

F-6

F - 7


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

3.

ACQUISITIONS AND DISPOSALS OF BUSINESSES AND ASSETS(continued)

The fair value of the identifiable assets and liabilities of First Uranium (Pty) Limited as at the date of acquisition was:

2.ACCOUNTING CHANGES(continued)
    Employee benefit plans$

Assets

  In September 2006, the FASB updated the ASC guidance for employers’ accounting for defined benefit pension

Property, plant and equipment

616 

Other long-term assets

Restricted cash

Deferred taxation assets

52 

Inventories

134 

Trade and other post-retirement plans. The adoption of its requirement to measure the plan assets and benefit obligations as of December 31, 2008 did not have a material impact on the Company’s financial statements.

receivables

  Fair value measurements

Cash and cash equivalents

  The Company adopted the FASB ASC guidance for fair value measurements for financial assets and financial liabilities on January 1, 2008.
  It provided enhanced guidance815 

Liabilities

Other non-current liabilities

342 

Deferred taxation liabilities

61 

Provision for usingenvironmental rehabilitation

37 

Loans from group companies

204 

Accounts payable and other current liabilities

49 
693 

Total identifiable net assets at fair value to measure assets

122 

Purchase consideration

131 

Goodwill recognized on acquisition

Analysis of cash flows on acquisition:

Net cash acquired with the subsidiary

Cash paid - Share capital acquired

(131)

Cash paid - Loan acquired

(204)
(330)

Delivery obligations of Mine Waste Solutions acquired as part of the business combination have been recognized on acquisition as a loss making executory contract, and liabilities. Fair value refers toare amortized as the price that would be received to sell an asset or paid to transferdeliveries of ounces occur.

The transaction costs of $3 million are a liabilitynon-recurring expense and have been included in an orderly transaction between market participantsGeneral and administrative expenses in the marketcondensed consolidated statements of income and are included in whichoperating cash flows in the reporting entity transacts. It clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liabilitycondensed consolidated statements of cash flows.

Financial assets acquired include trade and establishesother receivables with a fair value hierarchy that prioritizes the information usedof $2 million. Trade and other receivables are expected to develop those assumptions. It also requires that fair value measurements be separately disclosed by level within the fair value hierarchy.

collectible.

  In February 2008, the FASB issued an update

There were no material non-recurring pro-forma adjustments directly attributable to the ASC guidance which provided a one year deferral until January 1, 2009 for certain non-financial assets and non-financial liabilities, except for those items that are recognized or disclosed at fair value on a recurring basis (at least annually). The Company adopted the provisions on January 1, 2009.

acquisition of First Uranium (Pty) Limited.

  In October 2008, the ASC guidance was updated for determining the fair value of a financial asset when the market for that asset is not active. The intent of this update was to provide guidance on how the fair value of a financial asset is to be determined when the market for that financial asset is not active. It is effective as of the issuance date and has not affected the valuation of the Company’s financial assets.
In January 2010, the ASC guidance for disclosures about fair value measurements was updated, providing amendments to the guidance which requires entities to disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. The updated guidance further clarified the level of disaggregation required for assets and liabilities and the disclosures required for inputs and valuation techniques used to measure the fair value of assets and liabilities that fall in either Level 2 or Level 3. The disclosures related to Level 1 and Level 2 fair value measurements are effective for interim and annual reporting periods beginning after December 15, 2009. Except for disclosure changes, the adoption of the updated guidance had no material impact on the Company’s financial statements.

F-7

F - 8


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

3.

ACQUISITIONS AND DISPOSALS OF BUSINESSES AND ASSETS(continued)

2010 disposale
The Company’s disposals during the year included:

    

Acquisition of remaining 50 percent interest in Serra Grande

On May 29, 2012, AngloGold Ashanti, which holds, through a subsidiary, a 50 percent interest in the Serra Grande (“Crixás”) mine in Brazil, acquired the remaining 50 percent stake in the mine from Kinross Gold Corporation for $215 million in cash. The transaction was accounted for as an equity transaction and funded from existing cash reserves and borrowings under the Company’s existing debt facilities and closed on June 28, 2012.

2012 Disposals

The Company’s disposals during the year included:

•     Part disposal of Rand Refinery Limited

On December 3, 2012, AngloGold Ashanti Limited disposed of a 5 percent interest in Rand Refinery Limited for a total cash consideration of $6 million. AngloGold Ashanti Limited holds a remaining interest of 48.03 percent as at December 31, 2012 which is accounted for using the equity method. The disposal resulted in a profit of $14 million due to the recognition of the fair value of the residual interest as summarized below:

  $

Fair value of consideration received

Fair value of residual value of investment

57 

Noncontrolling interest

45 

Less: Carrying value of assets disposed

(94)

Total profit on disposal

14 
Subsequent to year-end, the Company disposed of an additional 4.24 percent interest in Rand Refinery Limited. See Note 29.

•     Disposal of AngloGold Ashanti-Polymetal Strategic Alliance

On February 8, 2012, the transaction to dispose of the AngloGold Ashanti-Polymetal Strategic Alliance consisting of AngloGold Ashanti-Polymetal Strategic Alliance Management Company Holdings Limited, Amikan Holdings Limited, AS APK Holdings Limited, Imitzoloto Holdings Limited and Yeniseiskaya Holdings Limited to Polyholding Limited was completed. The Company realized a profit equating to proceeds of $20 million on disposal.

2011 acquisitions

The Company made the following acquisition during the year:

•     Acquisition of an interest in First Uranium

On July 22, 2011, AngloGold Ashanti acquired 47,065,916 shares (or 19.79 percent) in First Uranium Corporation, a Canadian incorporated company, from Village Main Reef Limited, a South African incorporated company, at a price of CAD0.60 per share ($0.64 per share), representing an aggregate consideration of $30 million.

2011 disposal

The Company’s disposal during the year included:

•     Disposal of ISSI

AngloGold Ashanti disposed of its subsidiary ISS International Limited (“ISSI”) during the first quarter of 2011. The Company entered into a memorandum of understanding with The Institute of Mine Seismology relating to the disposal of ISSI. The sale was concluded on February 28, 2011, proceeds amounted to $9 million and the Company realized a profit of $2 million on disposal.

F - 9


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

3.

ACQUISITIONS AND DISPOSALS OF BUSINESSES AND ASSETS(continued)

2010 disposals

The Company’s disposals during the year included:

•     Disposal of Tau Lekoa

    

On February 17, 2009, AngloGold Ashanti announced the terms of the sale of its Tau Lekoa mine, together with the adjacent properties Weltevreden, Jonkerskraal and Goedgenoeg, to Simmer & Jack Mines Limited (“Simmers”). The sale was concluded effective August 1, 2010. The selling price of R600 million ($85 million) was payable in two tranches, R450 million ($64 million) was paid in cash on August 4, 2010 with the remaining R150 million ($21 million) (which was subject to certain offset adjustments) being settled on November 1, 2010. The Company realized a loss of $7 million on the sale of Tau Lekoa.

    

Disposal of B2Gold

    

AngloGold Ashanti Limited realized net proceeds of $68 million from the sale of its entire holding of 31,556,650 shares in Vancouver-based gold producer B2Gold Corp (“B2Gold”). This stake, equivalent to about 10.17 percent of B2Gold’s outstanding shares, was sold on November 9, 2010.2010 and the Company realized a profit of $45 million on disposal. The Company acquired a 15.9 percent direct interest in B2Gold during 2008 as discussed in this note under 2008 disposals “Disposal of exploration interests in Colombia”.May 2008.

2009 acquisitions
The Company made the following acquisitions during the year:
Acquisition of an effective 45 percent interest in the Kibali gold project
With effect from December 22, 2009, AngloGold Ashanti and Randgold Resources Limited (“Randgold”) each hold an effective 45 percent interest in the Kibali gold project (formerly the Moto gold project), while L’Office des Mines d’Or de Kilo-Moto (“OKIMO”), a Congolese parastatal, holds the remaining

F - 10 percent stake, thereby maintaining the continued vested interest of the Government of the Democratic Republic of the Congo (“the DRC”) in the Kibali gold project. The purchase price for the acquisition of AngloGold Ashanti’s initial interest of 35 percent in the Kibali gold project was funded by an offering of 7,624,162 ordinary shares at an issue price of $37.25 per ADS (or R288.32 per ordinary share) which represented an approximate 3 percent discount to the closing price of its ADS on the NYSE on August 31, 2009. The offering closed on September 8, 2009 and AngloGold Ashanti received total gross proceeds, before underwriting discounts and expenses, of approximately $284 million. Total consideration for the effective 45 percent interest acquired in the Kibali gold project amounted to $345 million.

Acquisition of an additional interest in Sadiola
On December 29, 2009, AngloGold Ashanti, together with IAMGOLD Corporation purchased from the International Finance Corporation (“IFC”), the IFC’s 6 percent stake in Société d’Exploitation des Mines d’or de Sadiola (“SEMOS”), which owns the Sadiola Gold Mine for $12 million (AngloGold Ashanti’s share being $6 million) to be followed by contingent payments not exceeding $3 million (of which AngloGold Ashanti’s share is $1.5 million). This transaction has resulted in AngloGold Ashanti and IAMGOLD each increasing their respective interest in Sadiola from 38 percent to 41 percent.

F-8


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

3.4.ACQUISITIONS AND DISPOSALS OF BUSINESSES AND ASSETS(continued)

SIGNIFICANT ACCOUNTING POLICIES

2009 disposals
The Company’s disposals during the year included:

    Disposal of Boddington Gold Mine
On January 28, 2009, AngloGold Ashanti announced that it had agreed to sell its 33.33 percent interest in the Boddington Gold Mine to Newmont Mining Corporation (“Newmont”). The transaction was completed on June 26, 2009. In terms of the agreement, the Company received payment of $750 million in cash during June 2009 and a further $240 million in December 2009. In addition, the Company is entitled to receive a royalty on any gold recovered or produced by the Boddington Gold Mine, where the gold price is in excess of Boddington Gold Mine’s cash costs plus $600 per ounce. The royalty commences on July 1, 2010 and is capped at a total amount of $100 million. All refunds and reimbursements between the Company and Newmont have been settled.
2008 acquisitions
The Company made the following acquisitions during the year:
Acquisition of noncontrolling interests in North America
Effective July 1, 2008, AngloGold Ashanti acquired the remaining 33 percent shareholding in the Cripple Creek & Victor Gold Mining Company joint venture (“CC&V”) through the acquisition of 100 percent of Golden Cycle Gold Corporation (“GCGC”). The Company issued 3,181,198 AngloGold Ashanti shares (total value $118 million) pursuant to this transaction. The Company completed the purchase price allocation of fixed assets during the third quarter of 2008. The transaction was accounted for as a purchase business combination whereby identifiable assets acquired and liabilities assumed were recorded at their fair market values as of the date of acquisition. The excess of the purchase price over such fair value was recorded as goodwill and as such, the acquisition resulted in goodwill of $18 million being recorded, relating mainly to the premium paid to obtain the remaining interest in CC&V. The goodwill related to the acquisition is non-deductible for tax purposes. Details of the acquisition are as follows:
Fair value of acquisition of business
2008
Golden Cycle
acquisition
$
Property, plant and equipment93
Goodwill18
Current assets7
Net value of assets acquired118
Purchase price paid(118)
- Issuance of common stock(118)
Gross value(118)
Share issue expenses
•    Acquisition of São Bento mine
On December 15, 2008, AngloGold Ashanti announced that it had completed the purchase of São Bento Gold Company Limited (“SBG”) and its wholly-owned subsidiary, São Bento Mineração S.A. (“SBMSA”) from Eldorado Gold Corporation (“Eldorado”) for a consideration of $70 million through the issuance of 2,701,660 AngloGold Ashanti shares. The transaction was accounted for as an asset acquisition. The purchase price was allocated to the underlying assets acquired. The purchase of SBG and SBMSA gave AngloGold Ashanti access to the São Bento mine, a gold operation situated in the immediate vicinity of AngloGold Ashanti’s Córrego do Sítio mine, located in the municipality of Santa Bárbara, Iron Quadrangle region of Minas Gerais State, Brazil.

F-9


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
3.ACQUISITIONS AND DISPOSALS OF BUSINESSES AND ASSETS(continued)
2008 disposals
The Company’s disposals during the year included:
Disposal of exploration interests in Colombia
On February 14, 2008, AngloGold Ashanti announced that it had entered into a binding memorandum of agreement (“MOA”) with B2Gold. B2Gold would acquire from AngloGold Ashanti, additional interests in certain mineral properties in Colombia. In exchange, B2Gold would issue to AngloGold Ashanti, 25 million common shares and 21.4 million common share purchase warrants in B2Gold. On May 16, 2008, AngloGold Ashanti announced that it had completed the transaction to acquire a 15.9 percent direct interest in B2Gold and increase B2Gold’s interest in certain Colombian properties, as stated.
Disposal of equity interest in Nufcor International Limited
During the quarter ended June 30, 2008, the Company disposed of its 50 percent interest held in Nufcor International Limited, a London based uranium marketing, trading and advisory business, to Constellation Energy Commodities Group for net proceeds of $48 million.

F-10


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
4.SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation: The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The Company presents its consolidated financial statements in United States dollars. The functional currency of a significant portion of the group’s operations is the South African rand. Other main subsidiaries have functional currencies of US dollars and Australian dollars. The translation of amounts into US dollars is in accordance with the FASB ASC guidance on foreign currency translation.

    

Use of estimates: The preparation of the financial statements requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The determination of estimates requires the exercise of judgment based on various assumptions and other factors such as historical experience, current and expected economic conditions, and in some cases actuarial techniques. The Company regularly reviews estimates and assumptions that affect the annual financial statements, however, actual results could differ from those estimates.

    

The more significant areas requiring the use of management estimates and assumptions include mineral reserves that are the basis of future cash flow estimates and unit-of-production depreciation, depletion and amortization calculations; environmental, reclamation and closure obligations; estimates of recoverable gold and other materials in heap leach pads; asset impairments (including impairments of goodwill, long-lived assets, and investments); write-downs of inventory to net realizable value; post employment, post retirement and other employee benefit liabilities; valuation allowances for deferred taxation assets; reserves for contingencies and litigation; and the fair value and accounting treatment of financial instruments.

    

The following are the accounting policies used by the Company which have been consistently applied:

 4.1

Consolidation

     

The consolidated financial information includes the financial statements of the Company and its subsidiaries. Where the Company has a direct or indirect controlling interest in an entity through a subsidiary, the entity is classified as a subsidiary. Interests in incorporated mining joint ventures in which the Company has joint control are accounted for by the equity method.

     

The financial statements of subsidiaries and the Environmental Trust Fund (a rehabilitation trust under the Company’s control) are prepared for the same reporting period as the Company, using the same accounting policies, except for Rand Refinery Limited (a subsidiary of the Company) which reports on a three-month time lag. Adjustments are made to subsidiary financial results for material transactions and events in the intervening period.policies.

     

Subsidiaries are consolidated from the date on which control is transferred. They are de-consolidated from the date on which control ceases.

     

All significant intercompany transactions and accountsbalances are eliminated in consolidation.

F-11

F - 11


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

4.

SIGNIFICANT ACCOUNTING POLICIES(continued)

 4.2

Investments in equity investees (associates and incorporated joint ventures)

     

An associate is an entity other than a subsidiary in which the Company has a material long-term interest and in respect of which the Company has the ability to exercise significant influence over operational and financial policies, normally owning between 20 percent and 50 percent of the voting equity.

     

A joint venture is an entity in which the Company holds a long-term interest and which is jointly controlled by the Company and one or more external joint venture partners under a contractual arrangement that provides for strategic, financial and operating policy decisions relating to the activities requiring unanimous consent.

     

Investments in associates and incorporated joint ventures are accounted for using the equity method.

     

Goodwill relating to associates and incorporated joint ventures is included in the carrying value of the Company’s investment. The total carrying value of equity accounted investments in associates and incorporated joint ventures, including goodwill, is evaluated for impairment when conditions indicate that a decline in fair value below the carrying amount is other than temporary or at least annually. When an indicated impairment indicator exists, the carrying value of the Company’s investment in those entities is written down to its fair value. The Company’s share of results of equity accounted investees, that have financial years within three months of the fiscal year-end of the Company, is included in the consolidated financial statements based on the results reported by those investees for their financial years. There were no significant adjustments required to be made in respect of equity accounted investees which have financial years that are different to those of the Company.

     

Profits realized in connection with transactions between the Company and associated companies are eliminated in proportion to ownership.

 4.3

Foreign currency transactions and foreign currency statements

     

Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (the ‘functional currency’).

 

Transactions and balances

     

Transactions in foreign currencies are converted at the rates of exchange ruling at the date of these transactions. Monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange ruling at balance sheet date. Non-monetary items are translated at historic rates. Gains, losses and costs associated with foreign currency transactions are recognized in the income statement in the period to which they relate, except where hedge accounting is applied. These transactions are included in the determination of other income.

Group companies

     

Group companies

 

The results and financial position of all group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

share capital and premium are translated at historical rates of exchange;

equity items other than profit attributable to equity shareholders are translated at the closing rate;

assets and liabilities for each balance sheet presented are translated at the closing rate;

income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

all resulting exchange differences are recognized as a separate component of equity and included within accumulated other comprehensive income.

F - 12


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

4.

SIGNIFICANT ACCOUNTING POLICIES(continued)

 4.3share capital

Foreign currency transactions and premium are translated at historical rates of exchange;

equity items other than profit attributable to equity shareholders are translated at the closing rate;
assets and liabilities for each balance sheet presented are translated at the closing rate;
income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and
all resulting exchange differences are recognized as a separate component of equity and included within accumulated other comprehensive income.foreign currency statements (continued)

     

Exchange differences arising from the translation of the net investment in foreign operations, and of borrowings and other currency instruments designated as hedges of such investments, are taken to stockholders’ equity on consolidation.

     

When a foreign operation is sold, cumulative exchange differences are recognized in the income statement as part of the gain or loss on sale.

     

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate at each balance sheet date.

F-12


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
4.SIGNIFICANT ACCOUNTING POLICIES(continued)
 4.4Segment

Segmental reporting

     

A segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other segments and are reported on a reporting segment basis using the management approach. This approach is based on the way management organizes segments within the Company for making operating decisions and assessing performance. The Chief Operating Decision Maker, defined as the Executive Committee, has determined that the Company operates primarily in the deliveryproduction of gold.

 4.5

Cash and cash equivalents and restricted cash

     

Cash and cash equivalents consist of cash balances and highly liquid investments with an original maturity of three months or less. Due to the short maturity of cash equivalents, their carrying amounts approximate their fair value. Restricted cash, classified as short-term, is reported separately in the consolidated balance sheets. Cash that is restricted as to withdrawal or use for other than current operations is classified as non-current.non-current and is included in Other long-term assets.

 4.6

Non-marketable equity investments and debt securities

     

Non-marketable equity investments which are considered available for sale, are carried at fair value, where fair value can be determined, or at cost less impairment if fair value cannot be reliably measured.

 

Investments in non-marketable debt securities, for which the Company does not control or exercise significant influence, are classified as held to maturity and are subsequently measured at amortized cost. If there is evidence that held to maturity financial assets are impaired the carrying amount is reduced and the loss recognized in the income statement.

 4.7

Marketable equity investments and debt securities

     

Marketable equity investments and debt securities which are considered available-for-sale, are carried at fair value, and the unrealized gains and losses, net of tax, computed in marking these securities to market are reported within accumulated other comprehensive income in the period in which they arise. These amounts are removed from accumulated other comprehensive income and reported in income when the asset is derecognized or when there is evidence that the asset is impaired in accordance with the FASB ASC guidance on accounting for certain investments in debt and equity securities. AngloGold Ashanti considers several factors in determining other-than-temporary impairment losses: including the current and expected long-term business prospects of the issuer; the length of time and relative magnitude of the price decline and its ability and intent to hold the investment until the price recovers.

     

Marketable debt securities that are classified as held to maturity are subsequently measured at amortized cost. If there is evidence that held to maturity financial assets are impaired the carrying amount is reduced and the loss recognized in the income statement.

F - 13


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

4.

SIGNIFICANT ACCOUNTING POLICIES(continued)

 4.8

Inventories

     

Inventories, including goldmetals in process, gold on hand (doré/bullion), uranium oxide, sulfuric acid, ore stockpiles and supplies, are stated at the lower of cost or market value. GoldMetals in process isare valued at the average total production cost at the relevant stage of production as described below. The cost of gold, uranium oxide and sulfuric acid is determined principally by the weighted average cost method using related production costs.

     

Ore stockpiles are valued at the average moving cost of mining the ore. Supplies are valued at the lower of weighted average cost or market value. Heap leach pad materials are measured on an average total production cost basis.

     

The cost of inventory is determined using the full absorption costing method. GoldMetals in process and ore stockpile inventory include all costs attributable to the stage of completion. Costs capitalized to inventory include amortization of property, plant and equipment and capitalized mining costs, direct and indirect materials, direct labor, shaft overhead expenses, repairs and maintenance, utilities, metallurgy costs, attributable production taxes and royalties, and directly attributable mine costs. Gold on hand (doré/bullion) includes all goldmetals in process and refining costs. Ore is recorded in inventory when blasted underground, or when placed on surface stockpiles in the case of open-pit operations.

     

The costs of materials currently contained on the leach pad are reported as a separate line item and classified as either short-term or long-term. Materials on the leach pad are classified as short-term if the Company expects the related gold to be recovered within twelve months. The short-term portion is determined by multiplying the average cost per ounce in inventory by the expected production ounces for the next twelve months. Heap leach pad inventory occurs in two forms: (1) gold recoverable but yet to be dissolved (i.e. gold still in the ore), and (2) gold recoverable from gold dissolved in solution within the leach pad (i.e. pore water). This estimate was used in determining the short-term portion of materials on the leach pad.

F-13


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
4.SIGNIFICANT ACCOUNTING POLICIES(continued)
 4.9

Development costs and stripping costs

     

Development costs relating to major programs at existing mines are capitalized. Development costs consist primarily of expenditures to initially establish a mine and to expand the capacity of operating mines.

     

Post production stripping costs are considered costs of the extracted minerals under a full absorption costing system and recognized as a component of inventory to be recognized in cost of sales in the same period as the revenue from the sale of the inventory. Additionally, capitalization of such costs only occurs to the extent inventory exists at the end of a reporting period.

     

Costs associated with the opening of a new pit, are capitalized as mine development costs.

F - 14


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

4.

SIGNIFICANT ACCOUNTING POLICIES(continued)

 4.10

Depreciation, depletion and amortization

 

Mine development costs, mine plant facilities and other fixed assets

 

Mine development costs, mine plant facilities and other fixed assets are recorded at cost less accumulated amortization and impairments. Cost includes pre-production expenditure incurred during the development of a mine and the present value of future decommissioning costs.

     

Capitalized mine development costs include expenditure incurred to develop new orebodies, to define further mineralization in existing orebodies and to expand the capacity of a mine. Where funds have been borrowed specifically to finance a project, the amount of interest capitalized represents the actual borrowing costs incurred.

     

Depreciation, depletion and amortization of mine development costs are computed principally by the units-of-production method based on estimated proven and probable mineral reserves. Proven and probable mineral reserves reflect estimated quantities of economically recoverable reserves which can be recovered in the future from known mineral deposits.

     

Mine plant facilities are amortized using the lesser of their useful life or units-of-production method based on estimated proven and probable mineral reserves. Main shafts are depleted using the units-of-production method based on total proven and probable reserves as the shaft will be used over the life of the mine. Other infrastructure costs including ramps, stopes, laterals, etc. and ore reserve development are depleted using proven and probable reserves applicable to that specific area. When an area is vacated and there is no longer an intention to mine due to a change in mine plans, all costs that have not been depleted are written off.

     

Other fixed assets comprising vehicles and computer equipment, are depreciated by the straight-line method over their estimated useful lives as follows:

vehicles up to five years; and

computer equipment up to three years.

vehicles up to five years; and
computer equipment up to three years.
Acquired properties
     

Acquired properties

 

Acquired properties are carried at amortized cost. Purchased undeveloped mineral interests are acquired mineral rights and are recorded as tangible assets as part of acquired properties. The amount capitalized related to a mineral interest represents its fair value at the time it was acquired, either as an individual asset purchase or as a part of a business combination. “Brownfield” stage mineral interests represent interests in properties that are believed to potentially contain other mineralized material, such as measured, indicated or inferred mineral resources with insufficient drill spacing to qualify as proven and probable mineral reserves, that is in proximity to proven and probable mineral reserves and within an immediate mine structure. “Greenfield” stage mineral interests represent interests in properties that are other mine-related or greenfields exploration potential that are not part of measured or indicated resources and are comprised mainly of material outside of a mine’s infrastructure. The Company’s mineral rights are enforceable regardless of whether proven and probable mineral reserves have been established. The Company has the ability and intent to renew mineral rights where the existing term is not sufficient to recover all identified and valued proven and probable mineral reserves and/or undeveloped mineral interests.

F-14


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
4.SIGNIFICANT ACCOUNTING POLICIES(continued)
4.10Depreciation, depletion and amortization(continued)
     

Both Brownfield properties are carried at acquired costs until such time as a mineral interest enters the production stage and are amortized using the unit-of-production method based on estimated proven and probable mineral reserves.

Greenfield mineral interests are carried at acquired costs until such time as a mineral interest enters the production stage and are amortized using the unit-of-production method based on estimated proven and probable mineral reserves.

     

Both Brownfield properties and Greenfield mineral interests are evaluated for impairment as held-for-use assets in accordance with the Company’s asset impairment accounting policy. See Note 4.13.

F - 15


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

4.

SIGNIFICANT ACCOUNTING POLICIES(continued)

 4.11

Other mining costs

     

Other mining costs including repair and maintenance costs incurred in connection with major maintenance activities are charged to operationsthe income statement as incurred.

 4.12

Goodwill and other intangibles

 

Goodwill

     

Where an investment in a subsidiary, joint venture or an associate is made, any excess of the purchase price over the fair value of the attributable mineral reserves including value beyond proven and probable, acquired properties and other net assets is recognized as goodwill.

     

Goodwill relating to subsidiaries is tested for impairment at least annually or when indicators of impairment exist and is carried at cost less accumulated impairment losses. Potential impairment is identified by comparing the fair value of a reporting unit with its carrying amount. The fair value of a reporting unit is determined using an expected present value technique.

     

Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to reporting units for the purpose of impairment testing.

     

Goodwill relating to incorporated joint ventures and associates is included within the carrying value of the investment in incorporated joint ventures and associates and tested for impairment when indicators exist. See Note 4.2.

     

The allocation of goodwill to an individual operating mine will result in an eventual goodwill impairment due to the wasting nature of the mine reporting unit. The Company performs its annual impairment review of assigned goodwill during the fourth quarter of each year.

 

Software

Software purchased, including direct costs associated with customization and installation of the software, is capitalized as other intangible assets.

Internally-developed software is capitalized when it meets the criteria for capitalization. Other software development expenditure is charged to the income statement as incurred. Software is amortized on a straight-line basis over its useful life which is determined to be the lesser of:

the license period of the software;

the period to the manufacturer’s next announced upgrade that management intends to implement; or

three years.

Useful lives are reviewed, and adjusted if appropriate, at the beginning of each financial year.

 4.13

Asset impairment

     

The Company evaluates its held-for-use long lived assets for impairment when events or changes in circumstances indicate that the related carrying amount may not be recoverable. If the sum of estimated future cash flows on an undiscounted basis is less than the carrying amount of the related asset, including goodwill, if any, an asset impairment is considered to exist. The related impairment loss is measured by comparing estimated future cash flows on a discounted basis to the carrying amount of the asset. Management’s estimate of future cash flows is subject to risk and uncertainties. It is therefore reasonably possible that changes could occur which may affect the recoverability of the group’s mining assets. The Company records a reduction of a group of assets to fair value as a charge to earnings if expected future cash flows are less than the carrying amount. The Company estimates fair value by discounting the expected future cash flows using a discount factor that is commensurate with the risks involved, considering the term of the expected cash flows and any asset specific and country risks. In addition, an asset impairment is considered to exist where the fair value less costs to sell of an asset held for sale is below its carrying amount.

F - 16


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

4.

SIGNIFICANT ACCOUNTING POLICIES(continued)

 4.14

Borrowing costs

     

Interest on borrowings relating to the financing of major capital projects under construction is capitalized during the construction phase as part of the cost of the project. Such borrowing costs are capitalized over the period during which the asset is being acquired or constructed and borrowings have been incurred. Capitalization ceases when construction is interrupted for an extended period or when the asset is substantially complete. Other borrowing costs are expensed as incurred.

F-15


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
4.SIGNIFICANT ACCOUNTING POLICIES(continued)
 4.15

Leased assets

     

Assets subject to finance leases are capitalized at the lower of fair value or present value of minimum lease payments with the related lease obligation recognized at the same amount. Capitalized leased assets are depreciated over the shorter of their estimated useful lives and the lease term. Finance lease payments are allocated using the effective interest rate method, between the lease finance cost, which is included in finance costs, and the capital repayment, which reduces the liability to the lessor.

     

Operating lease rentals are charged against operating profits in a systematic manner related to the period the assets concerned will be used.

 4.16

Provisions

     

Provisions are recognized when the Company has a present obligation, whether legal or constructive, as a result of a past event for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

     

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the balance sheet date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability.

 4.17

Taxation

     

Current and deferred taxation is recognized as income or expense and included in the profit or loss for the period, except to the extent that the tax arises from a transaction or event which is recognized, in the same or a different period directly in equity; or a business combination that is an acquisition. See Note 4.22.

     

Current taxation is measured on taxable income at the applicable enacted statutory rates.

     

The Company’s operation involves dealing with uncertainties and judgments in the application of complex tax regulations in multiple jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities and resolution of disputes arising from federal, state, and international tax audits. A tax position is recognized in the financial statements when it is ‘more-likely-than-not’ that the tax position will be sustained upon examination by the relevant taxing authority based on the technical merits. The Company recognizes tax liabilities for anticipated tax audit issues in tax jurisdictions based on its estimate of whether, and the extent to which, additional taxes will be due. The Company recognizes interest and penalties, if any, in the income statement as part of income taxtaxation expense.

F - 17


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

4.

SIGNIFICANT ACCOUNTING POLICIES(continued)

 4.18

Asset retirement obligations and rehabilitation costs

     

The Company accounts for asset retirement obligations (“AROs”) in accordance with the FASB ASC guidance on accounting for asset retirement obligations.

     

AROs, also referred to as decommissioning costs, arise from the acquisition, development, construction and operation of mining property, plant and equipment, due to government controls and regulations that protect the environment on the closure and reclamation of mining properties. The fair value of a liability for an asset retirement obligation is recorded in the period in which it is incurred. When the liability is initially recorded, the cost is capitalized by increasing the carrying amount of the related long-lived asset. Over time, the liability is increased to reflect an interest element (accretion) considered in its initial measurement at fair value, and the capitalized cost is amortized over the useful life of the related asset. Where the obligation arises from activities that are operational in nature and does not give rise to future economic benefit, the capitalized cost is amortized in the period incurred. Upon settlement of the liability, a gain or loss will be recorded if the actual cost incurred is different from the liability recorded.

     

Rehabilitation costs and related liabilities are based on the Company’s interpretation of current environmental and regulatory requirements.

     

Based on current environmental regulations and known rehabilitation requirements, management has included its best estimate of these obligations in its rehabilitation accrual. However, it is reasonably possible that the Company’s estimates of its ultimate rehabilitation liabilities could change as a result of changes in regulations or cost estimates.

     

Environmental liabilities other than rehabilitation costs which relate to liabilities from specific events are accrued when they are known, probable and reasonably estimable.

F-16


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
4.SIGNIFICANT ACCOUNTING POLICIES(continued)
 4.19

Product sales

     

Revenue from product sales is recognized when:

persuasive evidence of an arrangement exists;

persuasive evidence of an arrangement exists;
delivery has occurred or services have been rendered;
the seller’s price to the buyer is fixed or determinable; and
collectability is reasonably assured.

delivery has occurred or services have been rendered;

the seller’s price to the buyer is fixed or determinable; and

collectability is reasonably assured.

     

The sales price, net of any taxes, is fixed on either the terms of gold sales contracts or the gold spot price.

 4.20

Financial instruments

     

Financial instruments recognized on the balance sheet include investments, loans receivable, trade and other receivables, cash and cash equivalents, borrowings, derivatives, and trade and other payables. Financial instruments are initially measured at cost, including transaction costs, when the Company becomes a party to the contractual arrangements. Subsequent measurement of derivative instruments is dealt with below.

Derivatives

     

Derivatives

 

The Company accounts for derivative contracts in accordance with the FASB ASC guidance on accounting for derivative instruments and hedging activities, which requires all contracts that meet the definition of a derivative to be recognized on the balance sheet as either assets or liabilities and recorded at fair value. Gains or losses arising from remeasuring derivatives to fair value at each reporting period are accounted for either in the income statement or in accumulated other comprehensive income, depending on the use and designation of the derivative and whether it qualifies for hedge accounting. The key criterion which must be met in order to qualify for hedge accounting, is that the derivative must be highly effective in offsetting the change in the fair value or cash flows of the hedged item.

F - 18


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

4.

SIGNIFICANT ACCOUNTING POLICIES(continued)

 4.20

Financial instruments(continued)

     

Contracts that meet the criteria for hedge accounting are designated as the hedging instruments hedging the variability of forecasted cash flows from capitalized expenditure and the sale of production into the spot market, and are classified as cash flow hedges. Where a derivative qualifies as the hedging instrument in a cash flow hedge, changes in fair value of the hedging instruments, to the extent effective, are deferred in accumulated other comprehensive income and reclassified to earnings as product sales or as an adjustment to depreciation expense pertaining to capital expenditure, when the hedged transaction occurs. The ineffective portion of changes in fair value of the cash flow hedging instruments is reported in earnings as gains or losses on non-hedge derivatives in the period in which they occur.

     

All other contracts not meeting the criteria for the normal purchases and sales exemption or hedge accounting are recorded at their fair market value, with changes in value at each reporting period recorded in earnings as gains or losses on non-hedge derivatives.

     

Cash flows from derivative instruments accounted for as cash flow hedges and non-hedge derivatives are included in net cash provided by operating activities in the consolidated statements of consolidated cash flows. Contracts that contain ‘off-market’ terms that result in the inflow of cash at inception are analogous to borrowing activities and, as such, are treated as financing activities. All current and future cash flows associated with such instruments are classified as financing activities within the consolidated statements of cash flow statement.flows. Contracts that contain ‘off-market’ terms that result in the outflow of cash at inception are analogous to lending activities and, as such, are treated as investing activities. All current and future cash flows associated with such instruments are classified within the investing activities of the consolidated statementstatements of cash flows.

     

The estimated fair values of derivatives are determined at discrete points in time based on relevant market information. These estimates are calculated with reference to the market rates using industry standard valuation techniques.

     

Certain derivative instruments are designated as hedges of foreign currency denominated borrowings and investments in foreign entities. This designation is reviewed at least quarterly, or as borrowing and investment levels change. The hedge amounts (to the extent effective) are recorded as an offset to the translation gains/losses being hedged.

F-17


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
4.SIGNIFICANT ACCOUNTING POLICIES(continued)
 4.21

Employee benefits

Pension obligations
     

Pension obligations

 

Group companies operate various pension schemes. The schemes are funded through payments to insurance companies or trustee administered funds, determined by annual actuarial calculations. The Company has both defined benefit and defined contribution plans.

     

The current service cost in respect of defined benefit plans is recognized as an expense in the current year. Past service costs, experience adjustments, the effect of changes in actuarial assumptions and the effects of plan amendments in respect of existing employees are recognized as an expense or income as and when they arise. This method is applied consistently in each period end to all gains and losses.

     

The asset/liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method.

     

The contributions on defined contribution plans are recognized as employee benefit expense when due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available.

F - 19


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

4.

SIGNIFICANT ACCOUNTING POLICIES(continued)

 4.21

Employee benefits(continued)

Other post-employment benefit obligations

     

Some group companies provide post-retirement healthcare benefits. The expected costs of these benefits are accrued over the period of employment using an accounting methodology on the same basis as that used for defined benefit pension plans. These obligations are valued annually by independent qualified actuaries. Actuarial gains and losses arising in the plan are recognized as income or expense as and when they arise.

Termination benefits

     

Termination benefits

 

The Company recognizes termination benefits when it is demonstrably committed to either: terminating the employment of current employees according to a detailed formal plan; or providing termination benefits as a result of an offer made to encourage voluntary redundancy based on the number of employees expected to accept the offer. Benefits falling due more than twelve months after balance sheet date are discounted to present value.

 4.22

Deferred taxation

     

The Company follows the liability method of accounting for deferred taxation whereby the Company recognizes the tax consequences of temporary differences by applying enacted tax rates applicable to future years to differences between financial statement amounts and the tax bases of certain assets and liabilities. Changes in deferred taxation assets and liabilities include the impact of any tax rate changes enacted during the year. Principal temporary differences arise from depreciation on property, plant and equipment, derivatives, provisions and tax losses carried forward. A valuation allowance is recorded to reduce the carrying amounts of deferred taxation assets if it is more likely than not that such assets will not be realized.

 4.23

Dividends paid

     

Dividends are recognized when declared by the board of directors. Dividends may be payable in Australian dollars, South African rands, United Kingdom pounds or Ghanaian cedis. Dividends declared to foreign stockholders are not subject to approval by the South African Reserve Bank in terms of South African foreign exchange control regulations. Dividends are freely transferable to foreign stockholders from both trading and non-trading profits earned in South Africa by publicly listed companies. Under South African law, the Company may declare and pay dividends from any reserves included in total shareholders’ equity (including share capital and premium) calculated in accordance with International Financial Reporting Standards (IFRS)(“IFRS”), subject to itsthe solvency and liquidity.liquidity test per the Companies Act.

F-18


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
4.SIGNIFICANT ACCOUNTING POLICIES(continued)
 4.24

Earnings per share

     

Earnings and diluted earnings per share have been calculated, for each class of common stock outstanding, in accordance with the FASB ASC guidance on earnings per share, using the two class method which requires that basic net income (loss) per share is computed using the weighted average number of shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted average number of Ordinary shares and, if dilutive, potential common shares outstanding during the period. The computation of the diluted income (loss) per share of Ordinary shares assumes the conversion of E Ordinary shares.

     

The rights, including the liquidation, voting and dividend rights, of holders of Ordinary shares and E Ordinary shares are identical. As a result, the undistributed earnings for each year are allocated based on the contractual participation rights of the Ordinary and E Ordinary shares as if the earnings for the year had been distributed. As only 50 percent of dividends are paid to E ordinary share holdersshareholders in cash (the remaining 50 percent reduces the exercise price of the E ordinary shares), the undistributed earnings are allocated between E ordinary shares and ordinary shares based on this proportionate basis. Further, as the Company assumes the conversion of E Ordinary shares in the computation of the diluted net income (loss) per share of Ordinary shares, the undistributed earnings are equal to net income (loss) for the computation.

F - 20


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

4.

SIGNIFICANT ACCOUNTING POLICIES(continued)

 4.25

Exploration and evaluation costs

     

The Company expenses all exploration costs until the directors conclude that a future economic benefit is more likely than not of being realized. In evaluating if expenditures meet this criterion to be capitalized, the directors utilize several different sources of information depending on the level of exploration. While the criteria for concluding that expenditure should be capitalized is always probable, the information that the directors use to make that determination depends on the level of exploration.

Costs on greenfields sites, being those where the Company does not have any mineral deposits which are already being mined or developed, are expensed as incurred until the directors are able to demonstrate that future economic benefits are probable, which generally will be the establishment of proven and probable reserves at this location.

Costs on greenfields sites, being those where the Company does not have any mineral deposits which are already being mined or developed, are expensed as incurred until the directors are able to demonstrate that future economic benefits are probable, which generally will be the establishment of proven and probable reserves at this location.
Costs on brownfields sites, being those adjacent to mineral deposits which are already being mined or developed, are expensed as incurred until the directors are able to demonstrate that future economic benefits are probable, which generally will be the establishment of increased proven and probable reserves after which the expenditure is capitalized as a mine development cost.
Costs relating to extensions of mineral deposits, which are already being mined or developed, including expenditure on the definition of mineralization of such mineral deposits, are capitalized as mine development costs.

Costs on brownfields sites, being those adjacent to mineral deposits which are already being mined or developed, are expensed as incurred until the directors are able to demonstrate that future economic benefits are probable, which generally will be the establishment of increased proven and probable reserves after which the expenditure is capitalized as a mine development cost.

Costs relating to extensions of mineral deposits, which are already being mined or developed, including expenditure on the definition of mineralization of such mineral deposits, are capitalized as mine development costs.

     

Costs relating to property acquisitions are capitalized within development costs.

     

Drilling and related costs incurred on sites without an existing mine and on areas outside the boundary of a known mineral deposit that contain proven and probable reserves are recorded as exploration expenditures and are expensed as incurred.

     

Drilling and related costs incurred to define and delineate a residual mineral deposit that has not been classified as proven and probable reserves at a development stage or production stage mine are capitalized when management determines that there is sufficient evidence that the expenditure will result in a future economic benefit to the Company in the accounting period when the expenditure is made. Management evaluates whether or not there is sufficient geologic and economic certainty of being able to convert a residual mineral deposit into a proven and probable reserve at a development stage or production stage mine, based on the known geologic and metallurgy, existing mining and processing facilities, operating permits and environmental programs. Therefore prior to capitalizing such costs, management determines that the following conditions have been met:

F-19


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
4.SIGNIFICANT ACCOUNTING POLICIES(continued)
4.25Exploration and evaluation costs(continued)
 a.

There is a probable future benefit;

 b.

AngloGold Ashanti can obtain the benefit and control access to it; and

 c.

The transaction or event giving rise to it has already occurred.

F - 21


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

4.

SIGNIFICANT ACCOUNTING POLICIES(continued)

4.25

Exploration and evaluation costs(continued)

     

The Company understands that there is diversity in practice within the mining industry, in that some companies expense the drilling and related costs incurred to define and delineate residual mineral deposits that have not been classified as proven and probable reserves at a development stage or production stage mine. Had AngloGold Ashanti expensed such costs as incurred, net income, earnings per share and retained earnings would have been lower by approximately the following amounts:

 

   2012  2011  2010 

 

Net income ($ millions)

  34   10   27 

Earnings per share - basic (1)(cents)

      

Earnings per share - diluted (2)(cents)

      

Retained income - January 1 ($ millions)

  123   113   86 

Retained income - December 31 ($ millions)

  157   123   113 

 

(1) Impact per basic earnings per common share.

      

(2) Impact per diluted earnings per common share.

      
             
  2010  2009  2008 
 
Net income ($ millions)  27   16   10 
Earnings per share(1)(cents)
  7   4   3 
             
Retained income — January 1 ($ millions)  86   70   60 
Retained income — December 31 ($ millions)  113   86   70 
(1)Impact per basic and diluted earnings per common share.

 4.26

Stock-based compensation plans

     

The Company’s management awards certain employees stock options on a discretionary basis.

     

The fair value of the stock-based payments is calculated at grant date using an appropriate model. For equity settled stock-based payments, the fair value is determined using a Black-Scholes method and expensed on a straight-line basis over the vesting period based on the group’s estimate of shares that will eventually vest.

     

Option schemes which include non-market vesting conditions have been calculated using the Black-Scholes model. For all other stock-based payments to employees the fair value is determined by reference to the market value of the underlying stock at grant date adjusted for the effects of the relevant terms and conditions.

     

For schemes with non-market related vesting conditions, the likelihood of vesting has been taken into account when determining the income statement charge. Vesting assumptions are reviewed during each reporting period.

     

Stock options are subject to a three year vesting condition and their fair value is recognized as an employee benefit expense with a corresponding increase in Additional paid in capital over the vesting period. The proceeds received, net of any directly attributable transaction costs are credited to Common stock and Additional paid in capital when the options are exercised.

F-20

F - 22


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

4.

SIGNIFICANT ACCOUNTING POLICIES(continued)

 4.27

Recent pronouncements

Business Combinations

     

Reporting of amounts reclassified out of accumulated other comprehensive income

 

In December 2010,February 2013, the FASB issued guidance for business combinations regarding howwhich requires additional disclosure of items reclassified from Accumulated Other Comprehensive Income (“AOCI”). An entity is required to provide information about the amounts reclassified out of AOCI by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income. For public entities disclose supplemental pro forma informationthe amendments are effective prospectively for business combinationsreporting periods beginning after December 15, 2012. Except for presentation changes, the Company does not expect the adoption of this guidance to have a material impact on the Company’s financial statements.

Cumulative translation adjustments upon derecognition

In March 2013, the FASB issued guidance which indicates that occur duringa cumulative translation adjustment (“CTA”) is attached to the current year. Under the amendedparent’s investment in a foreign entity and should be released in a manner consistent with derecognition guidance a public entity that presents comparative financial statements must disclose the revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the prior annual reporting period. The guidance also requireson investments in entities. For public entities to provide a description of the nature and amount of any material, nonrecurring pro forma adjustments directly attributable to business combination(s) that are included in the reported pro forma revenue and earnings. The amended guidance is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted. The Company is currently assessing the impact of the guidance on the Company’s financial statements.

Disclosures about the credit quality of financing receivables and the allowance for credit losses
In July 2010, the FASB issued guidance for the disclosure of the allowance for credit losses and financing receivable modifications. The expanded disclosures include roll-forward schedules of the allowance for credit losses and enhanced disclosure of financing receivables that were modified during a reporting period and those that were previously modified and have re-defaulted. The new disclosure requirements are required for interim and annual periods beginning on or after December 15, 2010. The Company is currently assessing the impact of the guidance on the Company’s financial statements.
Compensation — stock compensation
In April 2010, the FASB issued guidance for stock compensation. The amendments clarify that a share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, such an award should not be classified as a liability if it otherwise qualifies as equity. The guidance also clarifies that disclosures currently required are applicable to a share-based payment award, including the nature and terms of share-based payment arrangements. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The amendments will be applied prospectively. A cumulative-effect adjustment will be calculated for all awards outstanding as of the beginning of the fiscal year in which the amendments are initially applied, as if the amendments had been applied consistently since the inception of the award. The cumulative-effect adjustment should be presented separately.2013. The Company does not expect the adoption of this guidance to have a material impact on the Company’s financial statements.
Fair value measurements
In January 2010, the FASB ASC guidance for disclosures about fair value measurements was updated requiring level 3 disclosure details regarding separate information about purchases, sales, issuances, and settlements in the reconciliation of fair value measurements using significant unobservable inputs. The disclosures related to Level 3 fair value measurements are effective for interim and annual reporting periods beginning after December 15, 2010. The Company does not expect the adoption of this guidance to have a material impact on the Company’s financial statements.

F-21

F - 23


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

5.

COSTS AND EXPENSES

Employment severance costs

             
  2010  2009  2008 
  $  $  $ 
 
South Africa  19   10   9 
Continental Africa  1   3    
Americas  3   1    
   
   23   14   9 
   

    

Employment severance costs

 

   2012   2011   2010 
   $  $  $

 

South Africa

      19 

Continental Africa

      

Americas

      
  

 

  10   15   23 
  

 

    

Employee severance costs were due to retrenchments reflecting downsizing and rationalization of operations resulting in a planned reduction in workforce.

    

Interest expensesexpense

 

   2012   2011   2010 
       

 

Finance costs on rated bonds and corporate notes (1)

  74   56   38 

Finance costs on convertible bonds (2)

  27   25   22 

Finance costs on mandatory convertible bonds (3)

  47   47   13 

Finance costs on bank loans and overdrafts

  18   10   19 

Unwinding of discount on convertible bonds

  30   28   27 

Amortization of deferred loan fees (4)

  15     20 

Capital lease charges

      

Discounting of non-current trade and other debtors

      

Other

      
  

 

  225   181   151 

Less : Amounts capitalized on qualifying assets

  (12)  (3)  
  

 

  213   178   151 
  

 

             
  2010  2009  2008 
  $  $  $ 
 
Finance costs on rated bonds  38       
Finance costs on convertible bonds(1)
  22   18   7 
Finance costs on mandatory convertible bonds  13       
Finance costs on bank loans and overdrafts  19   55   47 
Finance costs on corporate bond        18 
Unwinding of discount on convertible bonds  27   18   20 
Amortization of deferred loan fees  20   31   2 
Capital lease charges  5   3   3 
Discounting of non-current trade and other debtors  6   6   1 
Other  1   5   4 
   
   151   136   102 
Less : Amounts capitalized(2)
     (13)  (30)
   
   151   123   72 
   

(1) (1)

TheOn April 28, 2010, AngloGold Ashanti Holdings plc issued $1.0 billion 2.375of 10-year and 30-year unsecured notes. The issue consisted of $700 million of 10-year unsecured notes at a semi-annual coupon of 5.375 percent convertible bond (issued February 27, 2004) was repaid on February 27, 2009. due 2020 and $300 million of 30-year unsecured notes at a semi-annual coupon of 6.5 percent due 2040. On July 30, 2012, AngloGold Ashanti Holdings plc issued $750 million 5.125 percent notes due 2022. See Note 18.

(2)

On May 22, 2009, AngloGold Ashanti Holdings Finance plcawholly-owned subsidiary of the Company, issued $732.5 million 3.5 percent guaranteed convertible bonds due May 2014, convertible into ADSs and guaranteed byAngloGold Ashanti Limited. Refer toADSs. See Note 19.18.

 (3)

In September 2010, AngloGold Ashanti Holdings Finance plc issued $789 million of mandatory convertible bonds at a coupon rate of 6 percent due in September 2013. See Note 18.

(2) (4)

Interest capitalized on qualifying assets. ReferIncludes once-off charges of $6 million and $8 million related to Note 13.the cancellation of debt facilities during 2012 and 2010, respectively.

F-22

F - 24


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

5.

COSTS AND EXPENSES(continued)

    

Impairment of assets

Impairments are made up as follows:

 

   2012   2011   2010 
   $  $  $

 

South Africa

      

Impairment of Great Noligwa(1)

  42     

Impairment of abandoned development areas at Kopanang mine(2)

  14     

Impairment of abandoned shaft pillar development at TauTona(3)

      

Impairment and write-off of Savuka(4)

      16 

Impairment and write-off of waste wash plant at Kopanang mine(5)

      

Below 120 level at TauTona(6)

      47 

Impairment of Tau Lekoa(7)

      

Continental Africa

      

Impairment and write-off of mine development at Siguiri(8)

  14     

Impairment and write-off of mine infrastructure, development and assets at Obuasi(9)

  296     

Impairment and write-off of vehicles and mining equipment at Obuasi mine

      

Impairment of Iduapriem obsolete tailings storage facility(10)

      

Impairment and write-off of vehicles and heavy mining equipment at Geita mine

      

Impairment and write-off of tailings treatment plant at Obuasi mine(11)

      

Americas

      

Write-off of mining assets at Serra Grande

      

Other

      

Impairment and write-off of various minor tangible assets, mine infrastructure and equipment

      
  

 

  367   17   91 
  

 

             
  2010  2009  2008 
  $  $  $ 
 
South Africa
            
Below 120 level at TauTona(1)
  47      16 
Impairment and write-off of Savuka(2)
  16       
Impairment of Tau Lekoa(3)
  8   4    
Continental Africa
            
Impairment of Iduapriem obsolete tailings storage facility(4)
  8       
Impairment of Geita mining assets(5)
  5      299 
Impairment of goodwill held in Geita mine(5)
        181 
Impairment and write-off of tailings treatment plant at Obuasi mine(6)
  3       
Impairment and write-off of oxide treatment plant at Obuasi mine(7)
     4    
Impairment of goodwill held in Obuasi mine(8)
        104 
Impairment of abandoned shaft infrastructure and reserve power plant at Obuasi mine(9)
        15 
Impairment of reserve power plant at Iduapriem mine(9)
        3 
Impairment of goodwill held in Iduapriem mine(10)
        14 
Impairment of exploration assets in the DRC(11)
        29 
Impairment of obsolete heap leach plant infrastructure at Siguiri mine        7 
Americas
            
Write-off of mining assets at Serra Grande  3       
Other
            
Impairment and write-off of various minor tangible assets and equipment  1      2 
       
   91   8   670 
       

(1) (1)

Due to a change in the mine plan during 2012, resulting from a reduction in reserves from abandonment of certain areas, grade factors and an increase in the cost of extraction, the carrying value of Great Noligwa was written down to an estimated fair value using a pre-tax discount rate of 13 percent.

(2)

Due to a change in the mine plan, certain development areas have been abandoned and are not expected to generate future cash flows.

(3)

Due to a change in the mine plan resulting from safety related concerns following seismic activity, the VCR shaft pillar and ore pass development have been abandoned and is no longer expected to generate future cash flows.

(4)

Due to a further change in the mine plan during 2011, the Savuka assets have been abandoned and are not expected to generate future cash flows.

(5)

The use of the waste wash plant was discontinued as it did not yield the desired benefit.

(6)

Due to a change in the mine plan resulting from safety related concerns following seismic activity, a portion of the below 120 level development has been abandoned and willis not expected to generate future cash flows.

 
(2)(7)Due to a change in the mine plan, the Savuka assets have been abandoned and will not generate future cash flows.
(3)

Following the classification of Tau Lekoa as held for sale in 2009, impairment testing was performed on the held for sale asset. As the estimated fair value less costs to sell did not support the carrying value, an impairment was recorded for held for sale assets. The sale of Tau Lekoa was concluded effective August 1, 2010. Refer to Note 17.

 (8)

Due to depleted reserves in the Sintroko, Kozan and Kintinia pits, costs previously capitalized are not expected to generate future cash flows. Certain areas were also abandoned due to safety-related concerns.

(4) (9)

Due to a change in the mine plan, certain areas have been abandoned mainly due to depletion of reserves and assets in poor physical condition or considered obsolete were written-off.

(10)

The use of the tailings storage facility was discontinued.discontinued as no further economic benefit is expected to be derived.

 
(5)(11)Impairment of mining assets in 2010 represents the write-off of vehicles and heavy mining equipment at Geita. In 2008, the annual impairment testing for goodwill was performed for Geita mine and it was determined that its goodwill was fully impaired. The impairment testing for mining assets was performed and the estimated fair value of the mining assets did not support the carrying values and as a result, an impairment of mining assets was recorded. The impairment at Geita mine was due to a combination of factors such as the lower forward gold curve price, higher discount rates and a change in the mine plan revised mainly due to a reduction in reserves resulting from resource model changes, grade factors and an increase in the cost of extraction.
(6)

Due to safety related concerns the use of the tailings treatment plant was discontinued.

(7)Due to damage suffered by the leach tanks of the treatment plant its use was discontinued in 2009.
(8)In 2008, the annual impairment testing for goodwill was performed for Obuasi mine and it was determined that its goodwill was fully impaired. The goodwill impairment was the result of factors such as the lower forward gold curve price, higher discount rates and a revised mine plan which incorporated changes in the cost of extraction due to the higher power costs experienced in Ghana.
(9)The reserve power plant had been placed on care and maintenance during 2008 and was handed over to the Volta Regional Authority in 2009. Both Obuasi mine and Iduapriem mine contributions to the capital cost of the reserve power plant were impaired as the mines would not derive further economic benefit.
(10)In 2008, the annual impairment testing for goodwill was performed for Iduapriem mine and it was determined that its goodwill was fully impaired. The goodwill impairment was the result of factors such as the lower forward gold curve price, higher discount rates and a revised mine plan which incorporated changes in the cost of extraction due to the higher power costs experienced in Ghana.
(11)In terms of the volatile political situation in the DRC in 2008, commercial exploitation appeared unlikely and the mineral right value was impaired.

F-23

F - 25


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

5.

COSTS AND EXPENSES(continued)

    

The following estimates and assumptions were used by management when reviewing goodwill and long-lived assets for impairment:

 

the gold price assumption represented management’s best estimate of the future price of gold. In arriving at the estimated long-term gold price, management considered all available market information including current prices, historical averages, and forward pricing curves. The long-term gold price is based on a range of economic and market conditions that willexpected to exist over the remaining useful life of the assets; (1)

proven and probable ore reserves as well as value beyond proven and probable reserves estimates. For these purposes proven and probable ore reserves of approximately 71.2 million ounces (including joint ventures) as at December 31, 2010 were determined;
the real pre-tax discount rate is commensurate with the risks involved which is consistent with the basis used in 2009. The risk factors considered were country risk as well as asset risk for cash flows relating to mines that are not yet in production and deep level mining projects. The country risk factor was based on the Company’s internal assessment of country risk relative to the issues experienced in the countries in which it operates and explores;
foreign currency cash flows were translated at estimated forward exchange rates and then discounted using appropriate discount rates for that currency; and
cash flows used in impairment calculations were based on life of mine plans.

proven and probable ore reserves as well as value beyond proven and probable reserves estimates. For these purposes proven and probable ore reserves of approximately 74.1 million ounces (including joint ventures) as at December 31, 2012 were determined;

the real pre-tax discount rate is commensurate with the risks involved which is consistent with the basis used in 2011. The risk factors considered were country risk as well as asset risk for cash flows relating to mines that are not yet in production and deep level mining projects. The country risk factor was based on the Company’s internal assessment of country risk relative to the issues experienced in the countries in which it operates and explores;

foreign currency cash flows were translated at estimated forward exchange rates and then discounted using appropriate discount rates for that currency; and

cash flows used in impairment calculations were based on life of mine plans.

     

Estimates and assumptions used by management included the following:

 

 

 
     

2012 

$ per ounce

  

2011 

$ per ounce

  

2010 

$ per ounce

 
 

 

 

(1)

 

Long-term real gold price

  1,584   1,530    1,113  
             
  2010  2009  2008 
  $ per ounce  $ per ounce  $ per ounce 
 
(1) Long-term real gold price
  1,113   906   817 

    

When reviewing goodwill and other long-lived assets for impairment, AngloGold Ashanti’s assumption on gold price represents its best estimate of the future price of gold. In arriving at the estimated long-term gold price, AngloGold Ashanti considers all available market information including current prices, historical averages, and forward pricing information and data. The long term gold price of $1,584 per ounce in 2012 and $1,530 per ounce in 2011, were based on a range of economic and market conditions, which were expected to exist over the remaining useful life of the assets.

    

AngloGold Ashanti considers the long term fundamentals that provide support to the gold price assumption. These include, amongst other things, gold as a long term store of value, hedge against inflation, safe haven status, strong physical demand from emerging markets, central bank purchases, quantitative easing and devaluation of paper currency, falling global mine production and rising costs of producing gold, all of which represent significant and enduring trends supportive of AngloGold Ashanti’s gold price assumption.

The actual gold price averaged $1,668 per ounce in 2012 and $1,572 per ounce in 2011. The gold price in 2013 has been subject to volatile short term swings and has averaged $1,632 per ounce in the first quarter of 2013 and closed at $1,404 per ounce on April 19, 2013.

AngloGold Ashanti will continue to monitor the underlying long term factors driving the gold price and will review its gold price assumption, should it consider it appropriate to do so. Should the gold price assumption used in 2012 be revised significantly downward for any reason (by more than 10 percent), goodwill related to Mine Waste Solutions and long-lived assets related to Great Noligwa are most vulnerable to impairment.

Furthermore, should the gold price fall and remain at such lower levels, management will consider, in addition to other mitigating factors, reviewing and amending the life of mine plans to reduce expenditures, optimize costs and increase cash flows in respect of its mining assets.

The real pre-tax discount rates applied in the 20102012 impairment calculations on reporting units with significant assigned goodwill were as follows:

   Percentage

Australasia

  

Sunrise Dam

  6.1%
Sunrise Dam

Americas

  11.1%
Americas

Cripple Creek & Victor

  8.2%
Cripple Creek6.5%

    

In addition to the gold price and discount rate assumptions described above, the factors affecting the estimates include:

changes in proven and probable ore reserves as well as value beyond proven and probable reserves;

changes in proven and probable ore reserves as well as value beyond proven and probable reserves;
the grade of ore reserves as well as value beyond proven and probable reserves may vary significantly from time to time;
differences between actual commodity prices and commodity price assumptions;
unforeseen operational issues; and
changes in capital, operating mining, processing and reclamation costs and foreign exchange rates.

the grade of ore reserves as well as value beyond proven and probable reserves may vary significantly from time to time;

The real pre-tax discount rates applied in the 2008 impairment calculations to determine reporting unit’s fair value were as follows:

differences between actual commodity prices and commodity price assumptions;

Discount rate
Continental Africa
Geita11.5%
Obuasi9.0%
Iduapriem8.8%

unforeseen operational issues; and

changes in capital, operating mining, processing and reclamation costs and foreign exchange rates.

F-24

F - 26


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

5.

COSTS AND EXPENSES(continued)

    

Environmental rehabilitation obligations

    

Long-term environmental obligations comprising decommissioning and restoration are based on the Company’s environmental management plans, in compliance with the current environmental and regulatory requirements.

   $

The following is a reconciliation of the total liabilities for asset retirement obligations:

  

Balance as at December 31, 20092011

  385653 

Additions to liabilities

  2614 

Liabilities settled

  (6)(21)

Accretion expense

  2233 

Change in assumptions(1)

  76(1)50 

Other movements

  21 
Translation

Acquisition of subsidiary(2)

  2537 

Translation

  (9)
  

Balance as at December 31, 20102012

  758 
530  

 
(1)

Revisions relate to an overall average change in mine plans resulting in accelerated cash flows, change in economic assumptions, discount rates and changes in laws and regulations governing the protectiondesign of the environment and factors relating to rehabilitation estimates, cost escalations and a change in the quantities of material in reserves and a corresponding change in the life of mine plan.tailings storage facilities. These liabilities are anticipated to unwind beyond the end of the life of mine.

 (2)

Acquisition of First Uranium (Pty) Limited during July 2012. See Note 3.

These liabilities mainly relate to obligations at the Company’s active and inactive mines to perform reclamation and remediation activities in order to meet applicable existing environmental laws and regulations.

    

Certain amounts have been contributed to a rehabilitation trusttrusts and an environmental protection bond under the Company’s control. The monies in the trusttrusts and bond are invested primarily in interest bearing debt securities and cash and are included in Other long-term assets in the Company’s consolidated balance sheet. Cash balances held in the trusttrusts and bond are classified as restricted cash and are included in Other long-term assets in the Company’s consolidated balance sheets.sheet. As at December 31, the carrying amounts and estimated fair values of balances held in the trusttrusts and bond were as follows:

                
 December 31, 2010 December 31, 2009 

 
 Carrying Carrying      December 31, 2012   December 31, 2011 
 amount Fair value amount Fair value          
 $ $ $ $    

Carrying

amount

$

   

Fair value

$

   

Carrying

amount

$

   

Fair value

$

 

 
Securities 117 118 69 69     115     119     111     114  
Cash 32 32 53 53     28     28     22     22  
     

 

 

 
 149 150 122 122     143     147     133     136  
     

 

 

 

    

Operating lease charges

    

Operating lease rentals are charged against income in a systematic manner related to the period the leased property will be used. Lease charges relate mainly to the hire of plant and machinery and other land and buildings.

    

Operating leases for plant and machinery are for contracts entered into with mining contractors. The contracts are for specified periods and include escalation clauses. Renewals are at the discretion of the respective operating mine. Certain contracts include the provision of penalties payable on early exiting or cancellation.

    

Rental expense(1)

 

   

2012 

$

  

2011 

$

  

2010 

$

 

Comprising of:

      

Minimum rentals

  42   29   23 
  

 

(1)Included in production costs for each period presented.

Future minimum rental payments are:

      

2013

  22     

2014

      

2015

      

2016

      

2017

      

Thereafter

      
  

 

    
  32     
  

 

    
             
  2010  2009  2008 
  $  $  $ 
 
Comprising of:            
Minimum rentals  23   33   30 
   
(1)Included in production costs for each period presented.
     
Future minimum rental payments are:    
 
2011  18 
2012  7 
2013  1 
2014  1 
Thereafter   
    
   27 
    

F-25

F - 27


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

5.

COSTS AND EXPENSES(continued)

    (Profit)/loss

   Loss/(profit) on sale of assets, realization of loans, indirect taxes and other

             
  2010  2009  2008 
  $  $  $ 
 
Mandatory convertible bonds underwriting and professional fees  26       
Loss on disposal of land, equipment and assets, mineral rights and exploration properties(1)
  19   13   2 
Indirect tax expenses and legal claims(2)
  17   29   (18)
Impairment of other receivables  9   7    
Loss on sale of Tau Lekoa Gold mine(3)
  7       
Impairment of investments(4)
  2   12   6 
Mining contractor termination costs  1      1 
Profit on disposal of investments(5)
  (52)      
Net insurance claim recovery(6)
  (19)  (7)   
Royalties received(7)
  (8)      
(Recovery)/loss on consignment inventory  (5)  12    
Profit on disposal of joint venture interest in Boddington Gold mine in Australia(8)
     (56)   
Profit on disposal of certain exploration interests in Colombia to B2Gold Corporation        (33)
Certain royalty and production related payment interests in the United States of America sold to Royal Gold Inc.        (14)
Deferred income on sale of La Rescatada exploration interest recognized in Peru        (8)
Recovery of exploration costs previously expensed in South Africa and Peru        (4)
Contributions by other members to Nufcor Uranium Trust situated in South Africa        (3)
Profit on disposal of the Company’s equity interest held in Nufcor International Limited        (2)
Costs relating to the issue of rights granted to E ordinary shareholders        9 
   
   (3)  10   (64)
   
(1)Refers to the disposal and derecognition of land, equipment and assets, mineral rights and exploration properties in South Africa, Continental Africa and the Americas.
(2)Indirect taxes and legal claims are in respect of:
             
South Africa
  1         
Tanzania
  6   25   (15)
Guinea
  10   7   (3)
Brazil
      (3)    
(3)The sale of Tau Lekoa Gold mine was concluded effective August 1, 2010. Refer to Note 17.
(4)Impairment of investments include the following (refer to Note 16):
Corvus Gold Incorporated (United States of America)
2
B2Gold Corporation shares (Colombia)
12
Red 5 Limited shares (Australia)
4
Dynasty Gold Corporation shares (China)
2
(5)Profit on disposal of investments include:
B2Gold Corporation (Colombia)
(45)
Red 5 Limited (Australia)
(7)
(6)Includes business interruption insurance following a seismic event which resulted in the suspension of operations at Savuka Gold mine (in South Africa) during 2009. The Company has recovered $46 million to date from its insurers. Amounts received included:
         
Business interruption recoveries
  (19)  (11)
Reimbursement of costs (included in Production costs)
  (16)    
(7)Royalties received are mainly from Newmont Mining Corporation in connection with the 2009 sale of the joint venture interest in Boddington Gold mine and Simmers & Jack Mines Limited in connection with the 2010 sale of Tau Lekoa Gold mine.
(8)Included $31 million foreign exchange transaction loss.
  

 

      

2012 

$

  

2011 

$

  

2010 

$

  

 

  Indirect tax expenses and legal claims(1)  40     17 
  Mining contractor termination and settlement costs(2)  21     
  Impairment of investments  16   21   
  Loss on disposal of land, equipment and assets, mineral rights, exploration properties and other  14     19 
  Reassessment of other receivables    (1)  
  Royalties received(3)  (23)  (79)  (8)
  Profit on disposal of AGA-Polymetal Strategic Alliance(4)  (20)    
  Profit on partial disposal of Rand Refinery Limited(5)  (14)    
  Black economic empowerment transaction restructuring costs for Izingwe Holdings (Proprietary) Limited      
  Insurance claim recovery on capital items at Obuasi    (3)  
  Profit on disposal of the Company’s subsidiary ISS International Limited(6)    (2)  
  Mandatory convertible bonds underwriting and professional fees      26 
  Loss on sale of Tau Lekoa Gold mine(7)      
  Profit on disposal of investments(8)      (52)
  Net insurance claim recovery(9)      (19)
  Recovery on consignment inventory      (5)
    

 

    35   (43)  (3)
    

 

(1)

  Indirect taxes and legal claims are in respect of:      
            Colombia  16     
            Guinea  11     10 
            Ghana  11     
            United States of America      
            Brazil    (1)  
            Argentina  (1)    
            Namibia  (1)    
            Tanzania    (10)  
            South Africa      

(2)

  Mining contractor termination and settlement costs include:      
            Mining and Building Contractors Limited (“MBC”) termination costs at Obuasi  17     
            Contract settlement costs at Siguiri      
            Contractor termination costs at Geita      

(3)

  Royalties received include:      
            Newmont Mining Corporation (2009 sale of Boddington Gold mine)  (18)  (38)  (4)
            Franco Nevada Corporation (2011 sale of royalty stream in Ayanfuri mine)    (35)  
            Simmers & Jack Mines Limited (2010 sale of Tau Lekoa Gold mine)  (5)  (5)  (3)
            Other royalties    (1)  (1)

(4)

  

On February 8, 2012, the transaction to dispose of the AGA-Polymetal Strategic Alliance consisting of AGA-Polymetal Strategic Alliance Management Company Holdings Limited, Amikan Holding Limited, AS APK Holdings Limited, Imitzoloto Holdings Limited and Yeniseiskaya Holdings Limited to Polyholding Limited was completed. These assets were fully impaired as at December 31, 2011.

      

(5)

  

On December 3, 2012, the Company disposed of a 5 percent stake in Rand Refinery Limited. See Note 3.

      

(6)

  

ISS International Limited (“ISSI”) was classified as held for sale in 2010. The sale was concluded on February 28, 2011.

      

(7)

  

The sale of Tau Lekoa Gold mine was concluded effective August 1, 2010.

      

(8)

  

Profit on disposal of investments include:

      
  

          B2Gold Corporation (Colombia)

      (45)
  

          Red 5 Limited (Australia)

      (7)

(9)

  

Includes business interruption insurance following a seismic event which resulted in the suspension of operations at Savuka Gold mine (in South Africa) during 2009. The Company recovered $46 million from its insurers. Amounts received included:

      
  

          Business interruption recoveries

      (19)
  

          Reimbursement of costs (included in Production costs)

      (16)

F-26

F - 28


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

5.

COSTS AND EXPENSES(continued)

    

Non-hedge derivative (gain)/loss and movement on bonds

Non-hedge derivative loss

             
  2010  2009  2008 
  $  $  $ 
 
Loss on non-hedge derivatives  703   1,452   258 

    

Non-hedge derivative (gain)/loss

 

   

2012 

$

  

2011 

$

  

2010 

$

 

(Gain)/loss on non-hedge derivatives

  (93)  (83)  703

    

The net lossgain recorded for the year ended December 31, 20102012 relates to the accelerated hedge book settlement, normal realized losses on non-hedge derivatives, the fair value movements of the conversion features of convertible bonds amounting to $1$83 million (2009: $33 million) (as described in note 19)(see Note 18), movements on other commodity contracts and the revaluation of non-hedge derivatives resulting from changes in the prevailing spotforward gold price, exchange rates, interest rates and volatilities during the year.year, amounting to a gain of $10 million.

    

The net gain recorded for the year ended December 31, 2011 mainly relates to the fair value movements of the conversion features of convertible bonds amounting to $84 million (see Note 18).

    

During 2010, the Company eliminated its gold hedge book. The loss of scheduled hedge book maturities during 2010 was $277 million. Loss on non-hedge derivatives includes a realized loss of $2,698 million relating to the final tranche of the accelerated hedge buy-back that commenced in September 2010 and was concluded on October 7, 2010. The final phase of the hedge restructuring was funded with proceeds from the equity offering (refer to(see Note 22)21) and the three-year mandatory convertible bonds (refer to(see Note 19)18) issued in September, as well as cash from internal sources and debt facilities.

    During July 2009, the Company embarked on a hedge buy back that resulted in the accelerated settlement of both non-hedge and forward gold contracts qualifying for the normal purchases and sales exemption (which permits the Company to not record such amounts in its financial statements until the maturity date of the contract) under which the Company had committed to deliver a specified quantity of gold at a future date in exchange for an agreed price. These effects are reflected in the table below.

Effects of the accelerated hedge settlements

 

  

        2012 

$

  

        2011 

$

  

2010 

$

 

Accelerated hedge settlement of non-hedge derivatives

         2,698 

Previously designated NPSE contracts

         405 

Other non-hedge derivative contracts

         2,293 
             
  2010  2009  2008 
  $  $  $ 
 
Accelerated hedge settlement of non-hedge derivatives  2,698   797   1,088 
Previously designated NPSE contracts  405   580    
Other non-hedge derivative contracts  2,293   217   1,088 

    In addition to the accelerated hedge settlement during 2008, the Company recognized a loss of $150 million on forward gold contracts previously qualifying for the normal sale exemption, due to the inability of a single counterpart to accept physical delivery of gold for the forward contracts that had matured. Accordingly, the remaining contracts with this counterpart for future periods were accounted for at fair value on balance sheet, with changes in fair value reflected in the income statement.
The hedge buy-back and re-designation of contracts effected in 2009 resulted in an increase in current non-hedge derivative liabilities and a consequential loss on non-hedge derivatives. During 2010, all the contracts that were previously designated as normal purchase and sale exempted (“NPSE”) were closed out and recorded as a non-hedge derivative loss.

As a result of the accelerated cash settlement of the NPSEnormal purchase and sale exempted (“NPSE”) contracts during July 2009, the FASB ASC guidance on derivatives and hedging necessitated a review of the continuing designation of, and accounting treatment for, the remaining NPSE contracts that were not part of the accelerated settlement. Management concluded, in accordance with the provisions of the FASB ASC guidance, to re-designate all remaining NPSE contracts as non-hedge derivatives and to account for such contracts at fair value on the balance sheet with changes in fair value accounted for in the income statement.

    

The hedge buy-back and re-designation of contracts effected in 2009 resulted in an increase in current non-hedge derivative liabilities and a consequential loss on non-hedge derivatives. During 2010, all the contracts that were previously designated as NPSE were closed out and recorded as a non-hedge derivative loss.

    The effect of the NPSE re-designation in July 2009 and subsequent accounting for these contracts is stated below.

Movement on bonds

         
  2010  2009 
  $  $ 
 
Liability at beginning of period  556    
Non-hedge derivative losses recognized in respect of NPSE re-designation     543 
Fair value movements (recorded in non-hedge derivative loss)  131   143 
Realized settlements  (687)  (130)
   
Liability as at December 31     556 
   

 

   

2012 

$

  

2011 

$

  

2010 

$

 

Fair value (gain)/loss on mandatory convertible bonds (See Note 18)

  (172)  (113)  83

F-27

F - 29


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

5.6.COSTS AND EXPENSES(continued)
Movement on bonds

RELATED PARTY TRANSACTIONS

             
  2010  2009  2008 
  $  $  $ 
 
Fair value loss on mandatory convertible bonds  83       
    Fair value movements on

The Company had the mandatory convertible bonds relate tofollowing transactions with related parties during the ex interest NYSE closing price as further discussed in Note 19.years ended December 31, 2012, 2011 and 2010:

 

   December 31, 2012   December 31, 2011   December 31, 2010  
  

 

 

   

Purchases

(by)/from

      related party

   

Amounts

owed to/(by)

related party

   

Purchases

(by)/from

related party

   

Amounts

owed to/(by)

related party

   

Purchases

(by)/from

related party

(in millions)  $   $   $   $   $

 

Purchases of goods and services (by)/from equity accounted joint ventures and associates

          
Margaret Water Company                    
Societe d’Exploitation des Mines d’Or de Sadiola S.A.   (14)     (2)     (12)     (2)    (8)
Societe d’Exploitation des Mines d’Or de Yatela S.A.   (1)          (2)     (1)    (3)
Societe des Mines de Morila S.A.   (3)          (4)         (8)
Trans-Siberian Gold plc                      
  

 

 

   (14)     (2)     (12)     (3)    (15)
  

 

 

    

Amounts due by joint venture and associate related parties arising from purchases of goods and services are unsecured and non-interest bearing. See Note 10.

    Other operating items

As at December 31, 2012 and 2011, there are no outstanding balances arising from purchases of goods and services owed to related parties.

             
  2010  2009  2008 
  $  $  $ 
 
Comprising of:            
Realized loss on other commodity contracts        32 
Provision reversed on loss on future deliveries of other commodities        (5)
Unrealized gain on other commodity physical borrowings        (8)
   
         19 
   

F-28


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
6.RELATED PARTY TRANSACTIONS
The Company had the following transactions with related parties during the years ended December 31, 2010, 2009 and 2008:
                     
  December 31, 2010  December 31, 2009  December 31, 2008 
      Amounts      Amounts owed  Purchases 
  Purchases (by)/from  owed to/(by)  Purchases (by)/from  to/(by) related  (by)/from 
  related party  related party  related party  party  related party 
(in millions) $  $  $  $  $ 
 
Purchases of goods and services (by)/from equity accounted joint ventures and associates                    
Margaret Water Company  3      1      1 
Societe d’Exploitation des Mines d’Or de Sadiola S.A.  (8)  (2)  (10)  (3)  (5)
Societe d’Exploitation des Mines d’Or de Yatela S.A.  (3)     (3)     (1)
Societe des Mines de Morila S.A.  (8)  (1)  (6)  (1)  (5)
Trans-Siberian Gold plc  1         (1)   
   
   (15)  (3)  (18)  (5)  (10)
   
Amounts owed to/due by joint venture and associate related parties arising from purchases of goods and services are unsecured and non-interest bearing.
As at December 31, 2010 and 2009, there are no outstanding balances arising from purchases of goods and services owed to related parties.
Loans due by equity accounted joint ventures and associates included in Other long-term assets
         
  2010  2009 
  $  $ 
  | |
AGA-Polymetal Strategic Alliance (joint venture) (1)
     3 
Oro Group (Proprietary) Limited (2)
  2   2 
AuruMar (Proprietary) Limited (joint venture) (3)
  5   2 
Orpheo (Proprietary) Limited (3)
  1   1 

Loans due by equity accounted joint ventures and associates included in Other long-term assets

 

      

2012 

$

  

2011 

$

 

Oro Group (Proprietary) Limited (1)

    2  

AuruMar (Proprietary) Limited (joint venture) (2)

    2  

Societe d’Exploitation des Mines d’Or de Sadiola S.A. (joint venture) (3)

    36  

Societe d’Exploitation des Mines d’Or de Yatela S.A. (joint venture) (4)

    -  

Trans-Siberian Gold plc (5)

    -  

Thani Ashanti Alliance Limited (joint venture) (6)

    -  20 

(1) The loan was written off during 2010. The write-off is included in equity income in associates.
(2)

The loan bears a market related interest at a rate determined by the Oro Group (Proprietary) Limited’s board of directors and is repayable at theirits discretion.

 
(3)(2) Loans are unsecured,

The loan is interest free and there arehas no fixed terms of repayment.

 (3)

The loan is repayable on demand and bears interest at a margin of 2 percent over the London Interbank Offered Rate (“LIBOR”) per annum.

(4)

A loan of $12 million granted during 2012 was fully impaired during the year. The loan, included in the carrying amount of the joint venture, was repayable on demand and carried interest at a margin of 2 percent over LIBOR per annum.

(5)

The loan was unsecured, carried interest at 8 percent per annum and was converted into ordinary shares during April 2012.

(6)

The loan was repayable in December 2012 but due to non-payment it was fully impaired. A write-off of $37 million is included in equity income in associates.

There are no allowances for credit losses relating to the loans described above. Credit quality of loans is monitored on an ongoing basis.

    

As at December 31, 20102012 and 2009,2011, there are no outstanding balances arising from loans owed to related parties.

F-29

F - 30


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
7.TAXATION
             
  2010  2009  2008 
  $  $  $ 
 
Income/(loss) from continuing operations before income tax and equity income in associates was derived from the following jurisdictions:            
South Africa  203   (340)  251 
Continental Africa  391   (249)  (714)
Australasia  (149)  (147)  (69)
Americas  282   (19)  200 
Other, including Corporate and Non-gold producing subsidiaries(1)
  (346)  (143)  (41)
   
   381   (898)  (373)
   

7.
(1)The increase in the loss is due to fair value movements on the mandatory convertible bonds and finance charges on the mandatory convertible and rated bonds as well as exploration expenses.

TAXATION

             
Benefit/(charge) for income taxes attributable to continuing operations is as follows:            
Current:
            
South Africa(1)
  106   (36)  (20)
Continental Africa(2)
  (81)  (38)  (32)
Australasia(3)
  (36)  (34)  3 
Americas(4)
  (106)  (54)  (34)
Other     (4)  (11)
   
Total current  (117)  (166)  (94)
   
(1)The tax benefit in 2010 is mainly related to tax benefits on losses relating to the early hedge settlement and tax benefits relating to prior years. The increase in the tax charge in 2009 is mainly due to higher income as a result of the higher gold price. The lower tax charge in 2008 is mainly related to the tax benefit on losses relating to the settlement of non-hedge derivative contracts.
(2)The increase in the tax charge in 2010 is mainly related to higher earnings at Siguiri and Iduapriem from an improved gold price as well as lower capital expenditure.
(3)The increase in the tax charge in 2010 is due to higher taxable earnings from an improved gold price. The increase in the tax charge in 2009 is mainly due to capital gains tax on the sale of the Boddington Gold Mine. In 2008, Sunrise Dam’s taxable income reduced considerably following the completion of the mining in the megapit during the year.
(4)The increase in the tax charge mainly relates to higher earnings in line with the improved gold price and higher production.
Mining tax on mining income in South Africa is determined according to a formula which adjusts the tax rate in accordance with the ratio of profit to revenue from operations. This formula also allows an initial portion of mining income to be free of tax. Non-mining income is taxed at a standard rate.
             
Deferred:
            
South Africa(1)
  (119)  141   (40)
Continental Africa(2)
  (19)  27   122
Australasia(3)
  (1)  49   (4)
Americas  (1)  (18)  (16)
Other  2      10
   
Total deferred  (138)  199   72
   
   
Total income and mining tax (expense)/benefit  (255)  33   (22)
   
(1)The increase in the tax charge in 2010 related mainly to the reversal of deferred tax on unrealized non-hedge derivative losses. The increase in deferred tax credits in 2009 is mainly due to unrealized non-hedge derivative losses arising from an improved gold price and the remaining NPSE contracts being re-designated as non-hedge derivatives and recorded on the balance sheet, following the hedge buy-back in July 2009.
(2)The increase in the tax charge is mainly due to the tax benefits at Geita in 2009 not recurring in 2010. The 2008 deferred tax benefit was due to the continuing net increase in the capital allowances at Obuasi as a result of the high capital expenditure and the benefit relating to the impairment of mining assets at Geita.
(3)The deferred tax benefit in 2009 relates to the reversal of timing differences on the sale of Boddington.
Estimated deferred taxation rates in South Africa reflect the future anticipated taxation rates at the time temporary differences reverse.

 

     2012   2011   2010 
         

 

Income/(loss) from continuing operations before income tax and equity income in associates was derived from the following jurisdictions:

      
 

    South Africa

  363   813   203 
 

    Continental Africa

  316   745   391 
 

    Australasia

  (16)  (25)  (149)
 

    Americas

  627   690   282 
 

    Other, including Corporate and Non-gold producing subsidiaries (1)

  (79)  (102)  (346)
   

 

   1,211   2,121   381 
   

 

(1)

 The decrease in 2011 over 2010 is mainly due to fair value movements on the mandatory convertible and rated bonds.      

(Charge)/benefit for income taxes attributable to continuing operations is as follows:

      
Current:      
     South Africa(1)  (70)  (128)  106 
     Continental Africa(2)  (218)  (146)  (81)
     Australasia(3)  10     (36)
     Americas(4)  (131)  (124)  (106)
     Other  (5)  (8)  
   

 

Total current

  (414)  (406)  (117)
   

 

(1)

 

The lower tax charge in 2012 is mainly due to the lower earnings as a result of safety stoppages and the unprotected strike action at the South African operations. The increase in the tax charge in 2011 is mainly due to higher income and non-hedge derivative losses having been fully utilized during the year. The tax benefit in 2010 is mainly related to tax benefits on losses relating to the early hedge settlement and tax benefits relating to prior years.

      

(2)

 

The increase in the tax charge in 2012 is mainly due to withholding taxes on dividends and higher earnings at Geita from an improved gold price, whilst 2011 was lower due to the utilization of tax losses. The higher taxes relative to lower earnings is mainly due to the impairment and write-off of assets at Obuasi of $296 million, the tax benefit of which is reflected under deferred taxes.

      

(3)

 

The tax credit in 2012 is due to an adjustment related to the 2011 tax assessment. The lower tax charge in 2011 is due to lower earnings resulting from flooding and the ramp failure which severely affected all aspects of the operation at Sunrise Dam during 2011.

      

(4)

 

The increase in the tax charge in 2012 is mainly due to Annual Minimum Tax payable by Cripple Creek & Victor in North America. The increase in the tax charge in 2011 mainly relates to higher earnings in line with the improved gold price.

      

 

Mining tax on mining income in South Africa is determined according to a formula which adjusts the tax rate in accordance with the ratio of profit to revenue from operations. This formula also allows an initial portion of mining income to be free of tax. Non-mining income is taxed at a standard rate.

      
      

Deferred:

      
 

    South Africa(1)

  86   (212)  (119)
 

    Continental Africa(2)

  14   (93)  (19)
 

    Australasia

  (6)    (1)
 

    Americas(3)

  (21)    (1)
 

    Other

      
   

 

Total deferred

  74   (299)  (138)
   

 

       
   

 

Total income and mining tax expense

  (340)  (705)  (255)
   

 

(1)

 

The lower tax charge in 2012 includes a tax benefit of $134 million resulting from changes in enacted statutory tax rates and $8 million from changes in estimated deferred taxation rate. The increase in the tax charge in 2011 is mainly due to the reversal of deferred tax credits on losses utilized. The tax charge in 2010 included the reversal of deferred tax on unrealized non-hedge derivative losses.

      

(2)

 

The decrease in the tax charge in 2012 is mainly due to tax credits on impairments at Obuasi of $89 million, partly offset by the increase in enacted statutory taxation rate change in Ghana (capped at 30 percent in terms of a special tax rate Stability Agreement) of $62 million. The increase in the tax charge in 2011 is mainly due to the reversal of deferred tax credits from the utilization of tax losses at Geita.

      

(3)

 

The lower deferred tax charge is partly due to deferred tax credits arising from a corporate restructuring of Serra Grande of $59 million.

      

F-30

F - 31


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
7.TAXATION(continued)
During 2010, 2009 and 2008, deferred taxation in South Africa was provided at the future anticipated taxation rates ranging as follows:
             
  2010  2009  2008 
 
Maximum anticipated deferred taxation rate  38%  39%  38%
Minimum anticipated deferred taxation rate  35%  36%  36%
The effect of the change in estimated deferred taxation rate in South Africa on the results for 2010, 2009 and 2008 were as follows:
                         
      Year ended December 31 
      2010      2009      2008 
      Per basic and               
      diluted common      Per basic and diluted      Per basic and diluted 
  Impact  share(a)(b)  Impact  common share(a)(b)  Impact  common share(a)(b) 
  $  cents  $  cents  $  cents 
 
Net (benefit)/expense  (8)  (2)  (21)  (6)  4   1 
   

7.
(a)

TAXATIONPer basic and diluted ordinary and E ordinary shares.(continued)

(b)The calculation of diluted earnings per common share did not assume the effect of the following number of shares as their effects are anti-dilutive.

             
  2010  2009  2008 
 
Issuable upon the exercise of convertible bonds  33,524,615   15,384,615   15,384,615 
Issuable upon the exercise of stock incentive options      1,234,858   872,373 
Estimated deferred taxation rates in South Africa reflect the future anticipated taxation rates at the time temporary differences reverse.      
During 2012, 2011 and 2010, deferred taxation in South Africa was provided at the future anticipated taxation rates ranging as follows:      

 

   2012   2011   2010 

 

Maximum anticipated deferred taxation rate

  30%  39%  38%

Minimum anticipated deferred taxation rate

  28%  36%  35%

The effect of the change in estimated deferred taxation rate in South Africa on the results for 2012, 2011 and 2010 were as follows:

Unutilized tax losses

 

    Year ended December 31
  

 

 

    2012  2011  2010   

 

       

Per basic

and diluted

common

     

Per basic

and diluted

common

     

Per basic

and diluted

common

   
   Impact    share(a)(b)   Impact    share(a)(b)   Impact    share(a)(b)  
    $  cents  $  cents  $  cents   

 

Net benefit/(expense)

   8   2    (11)   (3)    8   2   
  

 

 

(a)     Per basic and diluted ordinary and E ordinary shares.

        

(b)     The calculation of diluted earnings per common share did not assume the effect of the following number of shares as their effects are anti-dilutive.

        

Unutilized tax losses as at December 31, 2010, 2009 and 2008 amounted to:

 

 
   2012   2011   2010 

 

 

Issuable upon the exercise of convertible bonds

   -     -     33,524,615 
             
  2010
$
  2009
$
  2008
$
 
 
Unutilized tax losses (1)
  1,200   1,032   841 
(1)Increase in unutilized operating loss carryforwards over 2009 are mainly due to losses from the early hedge settlement in 2010, offset partially by a reduction at Cripple Creek & Victor gold mine.
Unutilized operating loss carryforwards remaining to be used against future profits can be split into the following periods:

    

Unutilized tax losses

Within one year716
Within one and two years125
Within two and five years120

    
In excess of five years239
1,200

Unutilized tax losses as at December 31, 2012, 2011 and 2010 amounted to:

 

   2012   2011   2010 
   $  $  $

 

Unutilized tax losses(1)(2)

  691   469   1,356 

(1)     Increase in unutilized operating loss carryforwards in 2012 mainly relates to Colombia and Brazil. Decrease in unutilized operating loss carryforwards in 2011 over 2010 are due to utilization of losses in South Africa, Tanzania, North America and Brazil.

      

(2)     The prior period comparatives have been adjusted to include unutilized tax losses in Colombia of $148 million and $156 million for 2011 and 2010, respectively.

      
Unutilized operating loss carryforwards remaining to be used against future profits can be split into the following periods:      

Within one year

  143     

Within one and two years

  93     

Within two and five years

  111     

In excess of five years

  344     
  

 

    
  691     
  

 

    

F-31

F - 32


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
7.TAXATION(continued)
Reconciliation between corporate income tax and statutory income tax is as follows:
             
  2010  2009  2008 
  $  $  $ 
 
Corporate income tax at statutory rates  133   (314)  (131)
Formula variation in mining taxation rate     (21)  (1)
Disallowable expenditure(1)
  83   292   47
Effect of income tax rates of other countries  46   38   118
Impact of change in estimated deferred taxation rate  (8)  (21)  4
Other  1   (7)  (15)
   
Total income and mining tax expense/(benefit)  255   (33)  22
   

7.

TAXATION(continued)

(1)    Disallowable expenditure includes the impact of hedge losses in non-taxable jurisdictions

Reconciliation between corporate income tax and share expense costs. In 2009, the lossesstatutory income tax is as follows:

 

     

2012 

$

  

2011 

$

  

2010 

$

 

Corporate income tax at statutory rates

  (339)  (742)  (133)

Formula variation in mining taxation rate

    (7)  

Disallowable items(1)

  (38)  (37)  (89)

(Increase)/reversal of valuation allowances(2)

  (17)  42   

Effect of income tax rates of other countries

  (38)  50   (46)

Impact of change in estimated deferred taxation rate

    (11)  

Impact of change in statutory taxation rate

  72     

Other

      (1)
   

 

Total income and mining tax expense

  (340)  (705)  (255)
   

 

(1)   

Disallowable items include the impact of hedge losses in non-taxable jurisdictions and share expense costs.

      
(2)   

The prior period comparatives have been adjusted to include unutilized tax losses in Colombia.

      

Deferred taxation liabilities and assets on the hedge settlements were mainly in non-tax effective entities.balance sheet as at December 31, 2012 and 2011, relate to the following:

Deferred taxation liabilities and assets on the balance sheet as at December 31, 2010 and 2009, relate to the following:
         
  2010  2009 
  $  $ 
 
Deferred tax liabilities:        
Depreciation, depletion and amortization  1,555   1,471 
Product inventory not taxed  15   15 
Unrealized non-hedge derivatives  1   8 
Other  34   4 
   
Total  1,605   1,498 
   
Deferred tax assets:        
Provisions, including rehabilitation accruals  (363)  (175)
Derivatives  (1)  (14)
Unrealized non-hedge derivatives     (415)
Other  (5)  (6)
Tax loss carry forwards  (364)  (298)
   
Total  (733)  (908)
Less: Valuation allowances  125   194 
   
Total  (608)  (714)
   
Disclosed as follows:        
Long-term portion deferred taxation assets  1   62 
Short-term portion deferred taxation assets  214   333 
Long-term portion deferred taxation liabilities  1,200   1,171 
Short-term portion classified as other current liabilities. Refer to Note 18.  12   8 
The classification of deferred taxation assets is based on the related asset or liability creating the deferred taxation. Deferred taxes not related to a specific asset or liability are classified based on the estimated period of reversal. As at December 31, the Company’s losses in South Africa, on which deferred tax had been provided at the anticipated tax rate to be utilized are noted as follows:

     

2012 

  

2011 

Deferred tax liabilities:

      

Depreciation, depletion and amortization

    1,578   1,611 

Product inventory not taxed

    58   24 

Derivatives

      

Other

    15   
    

 

Total

    1,653   1,648 
    

 

Deferred tax assets:

      

Provisions, including rehabilitation accruals

    (465)  (389)

Derivatives

    (1)  (1)

Other

    (18)  (28)

Tax loss carry forwards (1)

    (220)  (118)
    

 

Total

    (704)  (536)

Less: Valuation allowances (1)

    115   56 
    

 

Total

    (589)  (480)
    

 

Disclosed as follows:

      

Long-term portion deferred taxation assets

    39   14 

Short-term portion deferred taxation assets

    74   75 

Long-term portion deferred taxation liabilities

    1,157   1,242 

Short-term portion classified as other current liabilities. See Note 17.

    20   15 

(1) The prior period comparatives have been adjusted to include unutilized tax losses in Colombia.

      

The classification of deferred taxation assets is based on the related asset or liability creating the deferred taxation. Deferred taxes not related to a specific asset or liability are classified based on the estimated period of reversal. As at December 31, the Company’s losses in South Africa, on which deferred tax had been provided at the anticipated tax rate to be utilized are noted as follows:

      
        

 2010 2009      2012  2011 

South Africa
       
Losses ($ millions) 508 4     2  
Deferred tax at the anticipated tax rate to be utilized (percent) 33 37     29  37 

F-32

F - 33


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

7.

TAXATION(continued)

7.TAXATION(continued)
Unremitted earnings of foreign subsidiaries and foreign incorporated joint ventures
Dividends from incorporated joint ventures may be remitted to the Company without being subject to income or withholding taxes. No provision is made for the income tax effect that may arise on the remittance of unremitted earnings by certain foreign subsidiaries. It is management’s intention that these earnings will be permanently re-invested into future capital expansion projects, maintenance capital and ongoing working capital funding requirements. In the event that the Company repatriated these earnings, income taxes and withholding taxes may be incurred. The determination of such taxes is subject to various complex calculations and accordingly, the Company has determined that it is impractical to estimate the amount of the deferred tax liability on such unremitted earnings. The amounts of these unremitted earnings are as follows:
         
  2010 2009
  $ $
 
Unremitted earnings as at December 31  1,519  624
Analysis of valuation allowances
The movement in valuation allowances for the three years in the period ended December 31, is summarized as follows:
             
  Balance at beginning      Balance at end of 
  of period  Movement  period 
  $  $  $ 
 
Year ended December 31, 2010            
- Valuation allowance  194   (69)  125 
Year ended December 31, 2009            
- Valuation allowance  226   (32)  194 
Year ended December 31, 2008            
- Valuation allowance  98   128   226 
The deferred tax assets for the respective periods were assessed for recoverability and, where applicable, a valuation allowance recorded to reduce the total deferred tax asset to an amount that will, more likely than not, be realized. The valuation allowance relates primarily to certain net operating loss carryforwards, tax credit carryforwards and deductible temporary differences for which it is more likely than not that these items will not be realized.
Although realization is not assured, the Company has concluded that it is more-likely-than-not that the deferred tax assets for which a valuation allowance was determined to be unnecessary will be realized based on the available evidence, including scheduling of deferred tax liabilities and projected income from operating activities. The amount of the net deferred tax assets considered realizable, however, could change in the near term if actual future income or income tax rates differ from that estimated, or if there are differences in the timing or amount of future reversals of existing taxable or deductible temporary differences.

Unremitted earnings of foreign subsidiaries and foreign incorporated joint ventures

     

 

Provision has been made for South African income tax or foreign taxes that may result from future remittances of undistributed earnings of foreign subsidiaries or foreign corporate joint ventures, where the group is able to assert that the undistributed earnings are not permanently reinvested. In all other cases, the foreign subsidiaries reinvest the undistributed earnings into future capital expansion projects, maintenance capital and ongoing working capital funding requirements. In the event that the Company repatriated these earnings, income taxes and withholding taxes may be incurred. The determination of such taxes is subject to various complex calculations and accordingly, the Company has determined that it is impractical to estimate the amount of the deferred tax liability on such unremitted earnings. The amounts of these unremitted earnings are as follows:

    

 

     

2012 

$

  

2011 

$

 

Unremitted earnings as at December 31

   1,649   1,812 

F-33

Analysis of valuation allowances

The movement in valuation allowances for the three years in the period ended December 31, is summarized as follows:

 

   Balance at beginning        Balance at end of
  of period    Movement (1)  period
   $     $  $

 

Year ended December 31, 2012

        

- Valuation allowance

  56     59   115 

Year ended December 31, 2011

        

- Valuation allowance

  177     (121)  56 

Year ended December 31, 2010

        

- Valuation allowance

  194     (17)  177 

 

(1)     The prior period comparatives have been adjusted to include valuation allowances in Colombia of $49 million and $52 million for 2011 and 2010, respectively.

  

The deferred tax assets for the respective periods were assessed for recoverability and, where applicable, a valuation allowance recorded to reduce the total deferred tax asset to an amount that will, more-likely-than-not, be realized. The valuation allowance relates primarily to certain net operating loss carryforwards, tax credit carryforwards and deductible temporary differences for which it is more-likely-than-not that these items will not be realized.

Although realization is not assured, the Company has concluded that it is more-likely-than-not that the deferred tax assets for which a valuation allowance was determined to be unnecessary will be realized based on the available evidence, including scheduling of deferred tax liabilities and projected income from operating activities. The amount of the net deferred tax assets considered realizable, however, could change in the near term if actual future income or income tax rates differ from that estimated, or if there are differences in the timing or amount of future reversals of existing taxable or deductible temporary differences.

F - 34


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
7.TAXATION(continued)
Uncertain tax positions
A reconciliation of the beginning and ending amount of unrecognized tax benefits, recorded as a liability in other non-current liabilities (refer to Note 18), is as follows:
         
  2010  2009 
  $  $ 
 
Balance at January 1,  149   106 
Additions for tax positions of prior years  8   14 
Reductions for tax position of prior years  (113)   
Translation  8   29 
   
Balance at December 31, (1)
  52   149 
   

7.

TAXATION(continued)

(1)    Unrecognized

Uncertain tax positions

A reconciliation of the beginning and ending amount of unrecognized tax benefits, which, if recognized, would affect the Company’s effective tax rate.is as follows:

The Company’s continuing practice is to recognize interest and penalties related to unrecognized tax benefits as part of its income tax expense. For the years ended and as at December 31, interest recognized and interest accrued amounted to:
             
  2010  2009  2008 
  $  $  $ 
 
Interest recognized  2   9   6 
Interest accrued as at December 31  8   53   34 
As at December 31, 2010, the Company’s South African tax assessments for the years 2004 — 2010 remain open to scrutiny by the South African Revenue Service.
In other jurisdictions, the revenue system is based on a self-assessment process, all tax filings due by December 31, 2010 have been filed, and the self-assessed position recorded in the consolidated financial statements. The legislation of individual jurisdictions provides for different periods for the authorities to review the filings with specified expiry dates. The Company is disputing assessments received in some jurisdictions where it operates and these arguments are under consideration by the authorities. Based on current legal advice, the Company does not expect the resolution will significantly affect the Company’s consolidated financial statements.

 

     

2012 

$

  

2011 

$

 

Balance at January 1,

   78   52 

Additions for tax positions of prior years

   17   38 

Reductions for tax position of prior years

     (3)

Translation

   (2)  (9)
   

 

Balance at December 31,

   93   78 
   

 

Unrecognized tax benefits are summarized as follows:

     

Recognized as a reduction of deferred tax assets

   40   29 

Recognized in other non-current liabilities (See Note 17) (1)

   53   49 
   

 

Balance at December 31,

   93   78 
   

 

 

(1)  Unrecognized tax benefits which, if recognized, would affect the Company’s effective tax rate.

    

The Company’s continuing practice is to recognize interest and penalties related to unrecognized tax benefits as part of its income tax expense. For the years ended and as at December 31, interest recognized and interest accrued amounted to:

 

    

 

  

2012             

$            

  

2011 

$

  

2010 

$

 

Interest recognized

 3                 

Interest accrued as at December 31

 14               12   

As at December 31, 2012, the Company’s South African tax assessments for the years 2004 – 2012 remain open to scrutiny by the South African Revenue Service.

    

 

In other jurisdictions, the revenue system is based on a self-assessment process, all tax filings due by December 31, 2012 have been filed, and the self-assessed position recorded in the consolidated financial statements. The legislation of individual jurisdictions provides for different periods for the authorities to review the filings with specified expiry dates. The Company is disputing assessments received in some jurisdictions where it operates and these arguments are under consideration by the authorities. Based on current legal advice, the Company does not expect the resolution will significantly affect the Company’s consolidated financial statements.

    

F-34

F - 35


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
8.DISCONTINUED OPERATIONS
In 2008, the Ergo reclamation surface operation, which formed part of the South Africa region, had been discontinued as the operation had reached the end of its useful life and the assets were no longer in use. The pre-tax gain on disposal recorded in 2008 related to the remaining assets of Ergo, that were sold by the Company to ERGO Mining (Pty) Limited a joint venture between Mintails South Africa (Pty) Limited and DRD South African Operations (Pty) Limited.
The following table details selected financial information included in the income/(loss) from discontinued operations in the consolidated statement of income.
             
  2008
  $  (cents)(1)(3)  (cents)(2)(3) 
 
Revenue         
Costs, expenses and recoveries  1       
Gain on disposal  27   8   5 
   
Pre-tax profit  28   8   5 
Taxation expense  (5)  (1)  (1)
   
Net profit attributable to discontinued operations  23   7   4 
   

8.
(1)Per basic and diluted ordinary shares.
(2)Per basic and diluted E ordinary shares.
(3)Basic and diluted earnings per common share.

INCOME PER COMMON SHARE

The calculation of diluted earnings per common share did not assume the effect of the following number of shares as their effects are anti-dilutive.
2008
Issuable upon the exercise of convertible bonds
15,384,615
Issuable upon the exercise of stock incentive options
872,373
The calculation of diluted earnings per common share for 2008 did not assume the effect of conversion of E Ordinary shares as the Company recorded a loss from continuing operations during this period.
    

 

2012

$

  

2011

$

  

2010

$

 
The following table sets forth the computation of basic and diluted income per share (in millions, except per share data):    

Ordinary shares undistributed income

   612   1,289   45  

E Ordinary shares undistributed income

   2   5     
  

 

 

 

Total undistributed income

   614   1,294   45  
  

 

 

 

Ordinary shares distributed income

   214   131   67  

E Ordinary shares distributed income

   1   -      
  

 

 

 

Total distributed income(1)

   215   131   67  
  

 

 

 

Numerator - Net income

    

Attributable to Ordinary shares

   826   1,420   112  

Attributable to E Ordinary shares

   3   5     
  

 

 

 

Total attributable to AngloGold Ashanti

   829   1,425   112  
  

 

 

 

In calculating diluted income per ordinary share, the following were taken into consideration:

    

Income attributable to equity shareholders

   826   1,420   112  

Interest expense on convertible bonds

   74   72     

Amortization of issue cost and discount on convertible bonds

   32   31     

Fair value adjustment on convertible bonds included in income

   (255  (197    
  

 

 

 

Income used in calculation of diluted earnings per ordinary share

   677   1,326   112  
  

 

 

 

Denominator for basic income per ordinary share

    

Ordinary shares

         382,757,790       381,621,687       367,664,700  

Fully vested options(2)

   1,616,239   1,389,122   1,023,459  
  

 

 

 

Weighted average number of ordinary shares

   384,374,029   383,010,809   368,688,159  

Effect of dilutive potential ordinary shares

    

Dilutive potential of stock incentive options

   1,840,199   1,572,015   1,569,606  

Dilutive potential of convertible bonds(3)

   33,524,615   33,524,615     

Dilutive potential of E Ordinary shares(4)

   -    -      
  

 

 

 

Denominator for diluted income per share – adjusted weighted average number of ordinary shares and assumed conversions

   419,738,843   418,107,439   370,257,765  
  

 

 

 

Weighted average number of E Ordinary shares used in calculation of basic and diluted income per E Ordinary share

   2,392,316   2,950,804   3,182,662  
  

 

 

 

Income per share attributable to AngloGold Ashanti common stockholders (cents)

    

Net income per share

    

Ordinary shares(5)

   215   371   30  

E Ordinary shares

   108   185   15  

Ordinary shares – diluted

   161   317   30  

E Ordinary shares – diluted(6)

   84   160   15  
  

 

 

 

(1)        Withholding tax on dividends and other distributions to shareholders of 15 percent became effective on April 1, 2012. The withholding tax, which was announced by the South African government on February 21, 2007, replaced the Secondary Tax on Companies.

    

(2)        Compensation awards are included in the calculation of basic income per common share from when the necessary conditions have been met, and it is virtually certain that shares will be issued as a result of employees exercising their options.

    

The calculation of diluted income per common share did not assume the effect of the following number of shares as their effects are anti-dilutive:

    

(3)          Issuable upon the exercise of convertible bonds

     33,524,615 

(4)        Issuable upon the conversion of E Ordinary shares

   246,665   343,716  

(5)        The mandatory convertible bonds issued during 2010 are not included in basic income per common share as they contain features that could result in their settlement in cash and therefore do not meet the definition of an equity instrument.

    

(6)         The prior period comparatives have been adjusted to take into account the earnings effect of the convertible bonds.

    

The effect of rounding may result in computational differences.

    

F-35

F - 36


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
9.INCOME/(LOSS) PER COMMON SHARE
             
  2010  2009  2008 
  $  $  $ 
 
The following table sets forth the computation of basic and diluted income/(loss) per share (in millions, except per share data):            
Numerator       
Net income/(loss) — attributable to AngloGold Ashanti            
Income/(loss) from continuing operations  112   (825)  (586)
Discontinued operations        23 
   
Net income/(loss)  112   (825)  (563)
Less Dividends:            
Ordinary shares  67   45   41 
E Ordinary shares         
   
Undistributed income/(losses)  45   (870)  (604)
Ordinary shares undistributed income/(losses)  45   (865)  (600)
E Ordinary shares undistributed losses     (5)  (4)
   
Total undistributed income/(losses)  45   (870)  (604)
   
Denominator for basic income/(loss) per ordinary share            
Ordinary shares  367,664,700   356,563,773   312,610,124 
Fully vested options(1)
  1,023,459   791,353   547,460 
   
Weighted average number of ordinary shares  368,688,159   357,355,126   313,157,584 
Effect of dilutive potential ordinary shares            
Dilutive potential of stock incentive options(2)
  1,569,606       
Dilutive potential of convertible bonds(3)
         
Dilutive potential of E Ordinary shares(4)
         
   
Denominator for diluted income/(loss) per share — adjusted weighted average number of ordinary shares and assumed conversions  370,257,765   357,355,126   313,157,584 
   
Weighted average number of E Ordinary shares used in calculation of basic and diluted income/(loss) per E Ordinary share  3,182,662   3,873,169   4,046,364 
   
Income/(loss) per share attributable to AngloGold Ashanti common stockholders (cents)            
From continuing operations            
Ordinary shares  30   (230)  (186)
E Ordinary shares  15   (115)  (93)
Ordinary shares — diluted  30   (230)  (186)
E Ordinary shares — diluted  15   (115)  (93)
   
Discontinued operations            
Ordinary shares        7 
E Ordinary shares        4 
Ordinary shares — diluted        7 
E Ordinary shares — diluted        4 
   
Net income/(loss)            
Ordinary shares  30   (230)  (179)
E Ordinary shares  15   (115)  (89)
Ordinary shares — diluted  30   (230)  (179)
E Ordinary shares — diluted  15   (115)  (89)
   

9.
(1)Compensation awards are included in the calculation of basic income/(loss) per common share from when the necessary conditions have been met, and it is virtually certain that shares will be issued as a result of employees exercising their options.
The calculation of diluted income/(loss) per common share did not assume the effect of the following number of shares as their effects are anti-dilutive:

RESTRICTED CASH

             
(2)    Issuable upon the exercise of stock incentive options
      1,234,858   872,373 
(3)     Issuable upon the exercise of convertible bonds
  33,524,615   15,384,615   15,384,615 
(4)   The calculation of diluted loss per common share for 2009 and 2008 did not assume the effect of conversion of E Ordinary shares as the Company recorded a loss from continuing operations during these periods.
           
10.RESTRICTED CASH
        
 2010 2009 
 $ $ 
  

                2012

$

   

            2011 

Cash classified as restricted for use comprise of the following:     
Cash restricted by prudential solvency requirements 8 8    11   
Cash balances held by the Tropicana project 1 3    23   22 
Other 1 1    1   
    

 

 

 10 12    35   35 
    

 

 

Long-term restricted cash balances are included in Other long-term assets (See Note 15).

    

F-36

10.

OTHER RECEIVABLES

   

                  2012

$

  

              2011 

Other receivables include:

  

Prepayments and accrued income

  86  80 

Interest receivable

  1  

Related parties. See Note 6.

  2  

Exploration debtors

  4  

Royalties receivable

  -  14 

Short-term loans

  45  12 

Deferred loan fees

  2  

Other debtors

  5  11 
 

 

 

  145  135 
 

 

 

11.

INVENTORIES

   

                   2012

$

  

           2011 

Short-term:

  

Metals in process

  267  189  

Gold on hand (doré/bullion)

  91  94  

Ore stockpiles

  512  454  

Uranium oxide and sulfuric acid

  11  24  

Supplies

  412  296  
 

 

 

  1,293  1,057  

Less: Materials on the leach pad(1)

  (128 (98) 
 

 

 

  1,165  959  
 

 

 

(1)    Short-term portion relating to heap leach inventory classified separately, as materials on the leach pad.

  

Long-term:

  

Metals in process

  445  393  

Ore stockpiles(2)

  180  31  
 

 

 

  625  424  

Less: Materials on the leach pad(3)

  (445 (393) 
 

 

 

  180  31  
 

 

 

(2)     Includes long-term ore stockpiles of First Uranium (Pty) Limited acquired on July 20, 2012.

  

(3)     Long-term portion relating to heap leach inventory classified separately, as materials on the leach pad.

  
The aggregate write-down of inventory to reduce the carrying value to net realizable value for the years ended December 31 were as follows:  

    

2012

$

  

           2011

$

  

              2010 

Inventory write-downs (included in production costs)

   5   4  21

F - 37


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
11.TRADE AND OTHER RECEIVABLES
         
  2010  2009 
  $  $ 
 
Trade debtors are net of:        
Provision for doubtful debt  19   12 
   
         
Other receivables include:        
         
Prepayments and accrued income  60   52 
Interest receivable  9   2 
Exploration debtors  11    
Deferred loan fees     15 
Other debtors  6   5 
   
   86   74 
   
12.INVENTORIES
         
  2010  2009 
  $  $ 
 
Short-term:
        
         
Metals in process  184   115 
Gold on hand (doré/bullion)  77   75 
Ore stockpiles  324   227 
Uranium oxide and sulfuric acid  43   34 
Supplies  255   252 
   
   883   703 
Less: Heap leach inventory(1)
  (91)  (40)
   
   792   663 
   
(1)Short-term portion relating to heap leach inventory classified separately, as materials on the leach pad.
Long-term:
         
Metals in process  331   324 
Ore stockpiles  27   25 
Supplies     1 
   
   358   350 
Less: Heap leach inventory(1)
  (331)  (324)
   
   27   26 
   
(1)Long-term portion relating to heap leach inventory classified separately, as materials on the leach pad.
The aggregate write-down of inventory to reduce the carrying value to net realizable value for the years ended December 31 were as follows:
             
  2010  2009  2008 
  $  $  $ 
 
Inventory write-downs (included in production costs)  21   48   60 
13.PROPERTY, PLANT AND EQUIPMENT, NET
         
  2010  2009 
  $  $ 
 
Mine development  6,590   5,604 
Buildings and mine infrastructure  3,263   2,957 
Mineral rights and other  1,045   1,053 
Assets under construction(1)
  502   251 
Land  37   30 
   
   11,437   9,895 
Accumulated depreciation, depletion and amortization  (5,511)  (4,441)
   
Net book value December 31,  5,926   5,454 
   
         
(1)   Interest capitalized during the year (See Note 5) amounted to:
     13 
  Net book value of mining assets encumbered by capital leases (See Note 19)  48   50 

F-37


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
14.ACQUIRED PROPERTIES, NET
         
  2010  2009 
  $  $ 
 
Acquired properties, at cost  2,168   2,053 
Accumulated amortization  (1,332)  (1,222)
   
Net book value December 31,  836   831 
   
15.GOODWILL AND OTHER INTANGIBLES
Goodwill
The carrying amount of goodwill by reporting unit as of December 31, 2010 and 2009 and changes in the carrying amount of goodwill are summarized as follows:
                 
          Continental    
  Americas  Australasia  Africa  Total 
  $  $  $  $ 
 
Balance at January 1, 2009  18   103   11   132 
Translation     30      30 
   
Balance at December 31, 2009  18   133   11   162 
Translation     18      18 
   
Balance at December 31, 2010  18   151   11   180 
   
Net carrying amount of goodwill as at December 31, 2010 and 2009 is reconciled as follows:                
   
- Gross carrying amount  18   151   310   479 
- Accumulated impairment losses        (299)  (299)
   
Net carrying amount as at December 31, 2010  18   151   11   180 
   
- Gross carrying amount  18   133   310   461 
- Accumulated impairment losses        (299)  (299)
   
Net carrying amount as at December 31, 2009  18   133   11   162 
Other intangibles, net
         
  2010  2009 
  $  $ 
 
Royalty rate concession agreement(1)
        
Gross carrying value  30   29 
Accumulated amortization  (13)  (11)
   
   17   18 
   

12.
(1)The government of Ghana agreed to a concession on royalty payments at a fixed rate of 3 percent per year for a period of fifteen years from 2004.

PROPERTY, PLANT AND EQUIPMENT, NET

The royalty rate concession is amortized on a straight line basis with nil residual value. The amortization expense included in the consolidated statements of income were as follows:
             
  2010  2009  2008 
  $  $  $ 
 
Amortization expense  2   2   2 
Based on carrying value at December 31, 2010, the estimated aggregate amortization expense for each of the next five years is as follows:
             
2011  2         
2012  2         
2013  2         
2014  2         
2015  2         
            

 

 
   2012    2011  
   $   $ 

 

 

Mine development

   7,185     6,652  

Buildings and mine infrastructure

   4,686     3,613  

Mineral rights and dumps

   916     1,023  

Assets under construction

   1,074     522  

Land

   51     41  
  

 

 

 
           13,912             11,851  

Accumulated depreciation, depletion and amortization

   (6,677)     (5,728)  
  

 

 

 

Net book value December 31,

   7,235     6,123  
  

 

 

 

Net book value of mining assets encumbered by capital leases (See Note 18).

   59     67  

F-38

13.

ACQUIRED PROPERTIES, NET

 

 
   2012    2011  
   $   $ 

 

 

Acquired properties, at cost

             1,976               2,010  

Accumulated amortization

   (1,228)     (1,231)  
  

 

 

 

Net book value December 31,

   748     779  
  

 

 

 

F - 38


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
16.OTHER LONG-TERM ASSETS
         
  2010  2009 
  $  $ 
 
Investments in associates — unlisted  7   6 
Investments in associates — listed  3   2 
Investments in equity accounted joint ventures  601   659 
   
Carrying value of equity method investments
  611   667 
         
Investment in marketable equity securities — available for sale
  124   111 
Investment in marketable debt securities — held to maturity
  13   10 
Investment in non-marketable assets — held to maturity
  2   2 
Cost method investment
  9   4 
Investment in non-marketable debt securities — held to maturity
  89   48 
Restricted cash
  33   53 
Other non-current assets
  192   127 
   
   1,073   1,022 
   
         
Investments in associates
        
         
  December 31,  December 31, 
  2010  2009 
  percentage held  percentage held 
 
Unlisted        
South Africa
        
Oro Group (Proprietary) Limited(1)
  25.00   25.00 
Margaret Water Company  33.33   33.33 
Orpheo (Proprietary) Limited(1)
  50.00   33.33 
Wonder Wise Holdings Limited(2)
     25.00 
         
Listed        
Other
        
Trans-Siberian Gold plc(1)(3)(4)
  30.70   29.74 
             
  2010  2009  2008 
  $  $  $ 
(1)Results are included for the twelve months ended September 30, 2010, adjusted for material transactions.
            
(2)Investment disposed of during 2010.
            
(3)Market value of the Company’s investment in Trans-Siberian Gold plc as at December 31
  33   12   5 
(4)Impairment losses recorded during the years ended December 31
        8 
Investments in equity accounted joint ventures
The Company holds the following interests in incorporated mining joint ventures, of which the significant financial operating policies are, by contractual arrangement, jointly controlled:
         
  December 31,  December 31, 
  2010  2009 
  percentage held  percentage held 
 
South Africa
        
AuruMar (Proprietary) Limited  50.00   50.00 
Continental Africa
        
Sadiola  41.00   41.00 
Morila  40.00   40.00 
Yatela  40.00   40.00 
Kibali Goldmines s.p.r.l.  45.00   45.00 
Other
        
AGA — Polymetal Strategic Alliance(1)
  50.00   50.00 

14.
(1)Results are included for the twelve months ended September 30, 2010, adjusted for material transactions. The AGA-Polymetal Strategic Alliance consists of the AGA-Polymetal Strategic Alliance Management Company, Amikan Holdings Limited (“Amikan”), AS APK Holdings Limited, Imizoloto Holdings Limited and Yeniseiskaya Holdings Limited.

GOODWILL AND OTHER INTANGIBLES

F-39Goodwill

The carrying amount of goodwill by reporting unit as of December 31, 2012 and 2011 and changes in the carrying amount of goodwill are summarized as follows:

               
   

South Africa

$

  

Americas

$

  

Australasia

$

  

Continental

Africa

$

  

Total

$

Balance at January 1, 2011

     18    151    11   180 

Translation

              

Balance at December 31, 2011

     18    153    11   182 

First Uranium (Pty) Limited acquisition (1)

               

Translation

              

Balance at December 31, 2012

     18    155    11   193 

(1)  See Note 3.

     

Net carrying amount of goodwill as at December 31, 2012 and 2011 is reconciled as follows:

 

     

- Gross carrying amount

     18    155    310   492 

- Accumulated impairment losses

             (299)   (299)

Net carrying amount as at December 31, 2012

     18    155    11   193 

- Gross carrying amount

     18    153    310   481 

- Accumulated impairment losses

             (299)   (299)

Net carrying amount as at December 31, 2011

     18    153    11   182 

 

Other intangibles, net

     
       

Royalty rate

concession

agreement (2)

$

  

Software and

licenses (3)

$

  

Service

agreements

$

  

Total

$

Gross carrying value at January 1, 2011

   30         30 

Additions

      16      16 

Accumulated amortization

   (15)         (15)

Balance at December 31, 2011

   15    16      31 

Gross carrying value at January 1, 2012

   30    16      46 

Additions

      78      85 

Accumulated amortization

   (17)         (17)

Translation

      (2)      (2)

Balance at December 31, 2012

   13    92      112 

(2)  The government of Ghana agreed to a concession on royalty payments at a fixed rate of 3 percent per year for a period of fifteen years from 2004.

             

    

(3)  During 2011, the Company undertook the implementation of an Enterprise Resource Plan (“ERP”) system. Phase 1 of the ERP was brought into use in February 2013.

   ��            

    

The royalty rate concession, software and licenses and service agreements are amortized on a straight line basis with nil residual value. The amortization expense included in the consolidated statements of income were as follows:

                 

 

        2012   2011   2010 
        $  $  $

 

Royalty rate concession amortization expense

         

Software and licenses amortization expense (4)

         

Service agreements amortization expense (5)

         

(4)  No amortization expense was recorded for purchased software and licenses as these have not been brought into use.

             

    

(5)  Less than $1 million in 2012.

      

    

F - 39


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

14.

GOODWILL AND OTHER INTANGIBLES(continued)

16.OTHER LONG-TERM ASSETS(continued)
During 2010, the Company fully impaired its investments in the Margaret Water Company and AGA — Polymetal Strategic Alliance. An impairment loss of $24 million (net of tax of $nil million) was recognized and the impairment loss is reflected in equity income in associates for 2010.
Effective December 2, 2009, AngloGold Ashanti Holdings plc, a wholly owned subsidiary, entered into a memorandum of understanding with Polyholding Limited relating to the disposal of Amikan. Amikan holds mining and exploration interests in Russia. Completion was expected to occur on or before April 30, 2010 but agreement could not be reached and the transaction was subsequently cancelled. The Company recorded an impairment loss of $9 million (net of tax of $nil million) on Amikan to reduce the carrying amount of the investment to fair value. The impairment loss was reflected in equity income in associates for 2009.
During 2008, the Company recorded an impairment loss of $42 million (net of tax of $6 million) relating to its interest held in Morila, based on the investment’s future cash flows. The impairment loss was reflected in equity loss in associates for 2008.
         
  2010  2009 
  $  $ 
 
Investment in marketable equity securities — available for sale
        
Available for sale investments in marketable equity securities consists of investments in ordinary shares.        
Cost  35   39 
Gross unrealized gains  89   72 
Gross unrealized losses      
   
Fair value (net carrying value)  124   111 
   
 
Other-than-temporary impairments recognized (1)
  2   12 
See “Note 5 - Costs and expenses: (Profit)/loss on sale of assets, realization of loans, indirect taxes and other” for additional information. In addition to these investments, the Company holds various equities as strategic investments in gold exploration companies. Three of the strategic investments are in an unrealized loss position and the Company has the intent and ability to hold these investments until the losses are recovered.        
The following tables present the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by length of time that the individual securities have been in a continuous unrealized loss position:        
             
    More than 12    
  Less than 12 months  months  Total 
  $  $  $ 
 
2010
            
Aggregate fair value of investments with unrealized losses  4      4 
Aggregate unrealized losses         
             
2009 (2)
            
             
Aggregate fair value of investments with unrealized losses         
Aggregate unrealized losses         
             
  2010  2009  2008 
  $  $  $ 
 
(1)Impairments relating to available for sale investments in marketable equity securities recorded during the years ending December 31, included:
            
Corvus Gold Incorporated shares (United States of America)
  2       
B2Gold Corporation shares (Colombia)
     12    
Red 5 Limited shares (Australia)
        4 
Dynasty Gold Corporation shares (China)
        2 
The impairments resulted in a transfer of fair value adjustments previously included in accumulated other comprehensive income to the income statement.
            
(2)In aggregate, the fair value of strategic investments in an unrealized loss position, as well as the aggregate unrealized losses amount to less than $1 million, respectively.
            
Based on carrying value at December 31, 2012, the estimated aggregate amortization expense for each of the next five years is as follows:   
   

Royalty rate
concession
agreement

$

 

    Software and
licenses

$

 

Service
    agreements

$

2013

  28  

2014

  31  

2015

  31  

2016

   

2017

   
 

 

 

 

 

 

F-40

F - 40


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
16.OTHER LONG-TERM ASSETS(continued)
         
  2010  2009 
  $  $ 
 
Investment in marketable debt securities — held to maturity
  13   10 
Investments in marketable debt securities represent held to maturity government bonds held by the Environmental Rehabilitation Trust Fund with a total fair value of $14 million (2009: $10 million) and gross unrealized gains of $1 million (2009: nil).        
         
Investment in non-marketable assets — held to maturity
  2   2 
Investments in non-marketable assets represent secured loans and receivables secured by pledge of assets.        
         
Cost method investment
  9   4 
The cost method investment mainly represent shares held in XDM Resources Limited. (1)
        
         
Investment in non-marketable debt securities — held to maturity
  89   48 
Investments in non-marketable debt securities represent the held to maturity fixed-term deposits required by legislation for the Environmental Rehabilitation Trust Fund and Nufcor Uranium Trust Fund.        
As of December 31, 2010 the contractual maturities of debt securities were as follows:        
         
Marketable debt securities
        
Up to three years  2     
Three to seven years  11     
        
   13     
        
         
Non-marketable debt securities
        
Less than one year  89     
        
         
Restricted cash
  33   53 
Restricted cash mainly represent cash balances held by the Environmental Rehabilitation Trust Fund and Environmental Protection Bond.        
         
Other non-current assets
        
Unsecured
        
Other loans and assets (2)
  9   8 
Non-current debtors
        
Prepayments and accrued income  31   27 
Recoverable tax, rebates, levies and duties  82   56 
Unamortized issue costs of long-term debt, bonds and revolving credit facility  32   13 
Other debtors  38   23 
   
   192   127 
   

15.
(1)The fair value is not estimated as there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment and it is not practicable to estimate the fair value of the investment.
(2)Other comprises the following:

OTHER LONG-TERM ASSETS

Loans and receivables measured at amortized cost
61
Post-retirement assets measured according to the employee benefits accounting policy.
37
 

 

      

        2012 

$

 

2011 

$

 

 

 

 

Investments in associates - unlisted

  63  
 

Investments in associates - listed

  18  15 
 

Investments in equity accounted joint ventures

  972  671 
   

 

 

Carrying value of equity method investments

  1,053  691 
 

Investment in marketable equity securities – available for sale

  69  82 
 

Investment in marketable debt securities – held to maturity

   
 

Investment in non-marketable equity securities – available for sale

   
 

Investment in non-marketable assets – held to maturity

   
 

Investment in non-marketable debt securities – held to maturity

  86  85 
 

Restricted cash

  29  23 
 

Other non-current assets

  111  101 
   

 

   1,360  1,001 
   

 

  

 

Investments in associates

      
 

 

      

December 31,
2012

percentage
held

 

December 31,
2011

percentage
held

 

 

 

Unlisted

   
 

South Africa

   
 

Rand Refinery Limited(1)

  48.03 -
 

Oro Group (Proprietary) Limited(2)

  36.00 25.00
 

Margaret Water Company

  33.33 33.33
 

Listed

   
 

Other

   
 

Trans-Siberian Gold plc(2)(3)

  31.17 30.90
 

Mariana Resources Limited(2)(4)(5)

  19.86 19.86
    
 

 

    

2012 

$

 

2011 

$

 

2010 

$

 

 

(1)

 

Rand Refinery Limited is equity accounted as at December 31, 2012. See Note 3. Subsequent to year-end, the Company disposed of an additional 4.24 percent interest in Rand Refinery Limited. See Note 29.

   

(2)

 

Results are included to September 30, 2012, adjusted for material transactions.

   

(3)

 

Market value of the Company’s investment in Trans-Siberian Gold plc as at December 31

 22 35 33

(4)

 

Market value of the Company’s investment in Mariana Resources Limited as at December 31

 3 7 -

(5)

 

The Company acquired its stake in Mariana Resources Limited for $8 million during December 2011 and accounts for it using the equity method as it has the right to representation on the Mariana Resources Limited board of directors and is therefore considered to have significant influence in the company.

   

F-41

F - 41


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

15.

OTHER LONG-TERM ASSETS(continued)

16.OTHER LONG-TERM ASSETS(continued)
Equity accounted joint ventures
Summarized financial statements of the joint ventures which have been equity accounted are as follows (100 percent shown):
             
  2010  2009  2008 
  $  $  $ 
 
Statements of income for the period
            
Sales and other income  823   880   464 
Costs and expenses  (528)  (508)  (726)
Taxation  (126)  (120)  (97)
   
Net income/(loss)  169   252   (359)
   
             
Balance sheets at December 31,
            
Non-current assets  1,205   1,166     
Current assets  550   523     
       
   1,755   1,689     
Long-term liabilities  (126)  (111)    
Loans from shareholders  (4)  (5)    
Current liabilities  (260)  (169)    
       
Net assets  1,365   1,404     
       
 

Investments in equity accounted joint ventures

   
 

The Company holds the following interests in incorporated mining joint ventures, of which the significant financial operating policies are, by contractual arrangement, jointly controlled:

   
 

 

      

December 31,
2012

percentage
held

 

December 31,
2011

percentage
held

 

 

 

South Africa

   
 

AuruMar (Proprietary) Limited

  50.00 50.00
 

Continental Africa

   
 

Société d’Exploitation des Mines d’Or de Sadiola S.A.

  41.00 41.00
 

Société des Mines de Morila S.A.

  40.00 40.00
 

Société d’Exploitation des Mines d’Or de Yatela S.A.

  40.00 40.00
 

Kibali Goldmines s.p.r.l.

  45.00 45.00
 

Other

   
 

AGA-Polymetal Strategic Alliance(1)

  - 50.00
 

Thani Ashanti Alliance Limited

  50.00 50.00

(1)

 

The AGA-Polymetal Strategic Alliance consisting of the AGA-Polymetal Strategic Alliance Management Company Holdings Limited, Amikan Holding Limited (“Amikan”), AS APK Holdings Limited, Imizoloto Holdings Limited and Yeniseiskaya Holdings Limited were disposed of during February 2012. See Note 5.

  
  

 

Impairments of associates and equity accounted joint ventures(2)

 

 

The Company recognized the following impairments which are included in equity income in associates:

 

   
 

 

    Year ended December 31,
                2012  2011  2010 
  

 

    $ $ $
 

 

 

Associates

   
 

Mariana Resources Limited(3)

   
 

Margaret Water Company(4)

   
 

Orpheo (Proprietary) Limited(5)(6)

   
 

Equity accounted joint ventures

   
 

Thani Ashanti Alliance Limited(7)

 37   
 

Société d’Exploitation des Mines d’Or de Yatela S.A.(5)

   
 

AGA-Polymetal Strategic Alliance(5)

   23 
  

 

  45  10  24 
  

 

(2)

 

The impairments recognized had no tax effects.

   

(3)

 

The carrying amount of the listed associate was written down to fair value.

   

(4)

 

Contributions to the investment during 2012, 2011 and 2010 were impaired in full.

   

(5)

 

Investments fully impaired.

   

(6)

 

Sold effective July 1, 2011.

   

(7)

 

Loan impaired in full. See Note 6.

   

F-42

F - 42


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

15.

OTHER LONG-TERM ASSETS(continued)

17.ASSETS AND LIABILITIES HELD FOR SALE
         
  2010  2009 
  $  $ 
 
Effective November 3, 2010, ISS International Limited (“ISSI”) in South Africa was classified as held for sale. AngloGold Ashanti entered into a memorandum of understanding with The Institute of Mine Seismology (“IMS”) relating to the disposal of ISSI. The transaction closed on February 28, 2011 and the proceeds from disposal amounted to $13 million. At December 31, 2009, net assets of ISSI amounted to $9 million.  12    
 
Effective December 2007, Rand Refinery Limited in South Africa (a subsidiary of the Company) transferred parts of its premises that were no longer utilized (previously recognized as a tangible asset), to held for sale. On April 1, 2008, a sale agreement was concluded, subject to achievement of the suspensive condition regarding rezoning of the land and transfer of title deeds. Rand Refinery Limited is currently awaiting the rezoning transfer notification from the municipal and deeds office in order to conclude the sales transaction.  1   1 
 
On February 17, 2009, AngloGold Ashanti announced the terms of the sale of its Tau Lekoa mine together with the adjacent properties of Weltevreden, Jonkerskraal and Goedgenoeg (“Tau Lekoa”) in South Africa to Simmer & Jack Mines Limited (“Simmers”). Tau Lekoa was previously recognized as a combination of tangible assets, current assets and current and long-term liabilities. The sale was concluded effective August 1, 2010, following the transfer of the mineral rights of Tau Lekoa to Buffelsfontein Gold Mines Limited, a wholly-owned subsidiary of Simmers on July 20, 2010. The Company recorded a loss on disposal of $7 million on the sale. Refer to “Note 5 — Costs and expenses: Profit/loss on sale of assets, realization of loans, indirect taxes and other”.
        
 
Following the effective date of the disposal, Simmers will treat all ore produced from the assets at its own processing facilities. As a result, AngloGold Ashanti will have increased processing capacity available at its Vaal River plants, allowing for the processing of additional material from its surface sources and the other Vaal River mines.        
 
The additional treatment capacity will ensure significant continuing direct cash flows from the same gold commodity in an active market. Consequently, due to the migration of cash flows and in accordance with the FASB ASC guidance on discontinued operations, Tau Lekoa was not classified as a discontinued operation.        
 
Tau Lekoa was classified as held for sale in the balance sheet as at December 31, 2009.     64 
 
Following the classification of Tau Lekoa as held for sale, the Company recognized impairment losses of $8 million (2009: $4 million) in earnings to reduce the carrying amount of Tau Lekoa to fair value less costs to sell. Refer to “Note 5 — Costs and expenses: Impairment of assets”.
        

 

      

2012 

$

 

2011 

$

 

Investment in marketable equity securities – available for sale

     
Available for sale investments in marketable equity securities consists of investments in ordinary shares and collective investment schemes.     

Cost

    50  51 

Gross unrealized gains

    21  34 

Gross unrealized losses

    (2) (3)
    

 

Fair value (net carrying value)

    69  82 
    

 

Other-than-temporary impairments and disposals of marketable equity securities – available for sale

 

   Year ended December 31,
  

 

   2012   2011  2010 
   $  $ $

 

Other-than-temporary impairments

     

First Uranium Corporation (South Africa)

    19  

Stratex International plc (Isle of Man)

     

Commander Resources Limited (Isle of Man)

     

Laurentian Goldfields Limited (Isle of Man)

     

Village Main Reef Limited (South Africa)

     

Corvus Gold Incorporated (United States of America)

     
  

 

    21  
  

 

The impairments recognized resulted in a transfer of fair value adjustments previously included in accumulated other comprehensive income to the income statement. See Note 5.

     

Disposals of marketable equity securities

     

 

The Company’s disposals of marketable equity securities resulted in the following reclassification of losses/(gains) of fair value adjustments to the income statement:

     

Equity investments held by the Environmental Rehabilitation Trust Fund (net of tax of $nil million)

    1 

B2Gold Corporation (net of tax of $nil million)

     (47)

Red5 Limited (net of tax of $2 million)

     (4)
  

 

    1 (51)
  

 

In addition, the Company holds various equities as strategic investments in gold exploration companies. Four of the strategic investments are in an unrealized loss position and the Company has the intent and ability to hold these investments until the losses are recovered.

   

The following tables present the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by length of time that the individual securities have been in a continuous unrealized loss position:

 

   

 

   

Less than
12 months

$

  

More than
12 months

$

 

Total

$

 

2012

     

Aggregate fair value of investments with unrealized losses

  27    27 

Aggregate unrealized losses

  (2)   (2)

2011

     

Aggregate fair value of investments with unrealized losses

     

Aggregate unrealized losses

  (3)   (3)

F-43

F - 43


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

15.

OTHER LONG-TERM ASSETS(continued)

17.ASSETS AND LIABILITIES HELD FOR SALE(continued)
         
  2010  2009 
  $  $ 
 
As at December 31, 2010 and 2009 the carrying amounts of major classes of assets and liabilities classified as held for sale included:        
         
Cash and cash equivalents  11    
Trade and other receivables  2    
Inventories  1   3 
Property, plant and equipment  2   70 
Acquired properties     1 
Trade and other payables  (3)  (3)
Provision for environmental rehabilitation     (6)
   
Net assets  13   65 
   
18.OTHER LIABILITIES
Current
         
Deferred income  10   13 
Deferred taxation. Refer to Note 7.  12   8 
Pension and other post-retirement medical benefits. Refer to Note 26.  14   14 
Accrual for power  42   18 
Other (including accrued liabilities)  75   67 
   
   153   120 
   
Non-current
         
Deferred income  7   5 
Taxation. Refer to Note 7.  52   149 
Other creditors  10   9 
   
   69   163 
   
  

 

         2012   2011 
         $  $
  

 

  

Investment in marketable debt securities - held to maturity

      
  

Investments in marketable debt securities represent held to maturity government bonds held by the Environmental Rehabilitation Trust Fund with a total fair value of $11 million (2011: $11 million) and gross unrealized gains of $4 million (2011: $3 million).

      
  

Investment in non-marketable equity securities - available for sale

      
  

The non-marketable equity investments mainly represent shares held in XDM Resources Limited.(1)

      
  

Investment in non-marketable assets - held to maturity

      
  

Investments in non-marketable assets represent secured loans and receivables secured by pledge of assets.

      
  

Investment in non-marketable debt securities - held to maturity

    86   85 
  

Investments in non-marketable debt securities represent the held to maturity fixed-term deposits required by legislation for the Environmental Rehabilitation Trust Fund and Nufcor Uranium Trust Fund.

      
  

As at December 31, 2012 the contractual maturities of debt securities were as follows:

      
  

 

Marketable debt securities

      
  

Less than one year

      
  

After ten years

      
      

 

  
        
      

 

  
  

Non-marketable debt securities

      
  

Less than one year

    86   
      

 

  
  

Restricted cash

    29   23 
  

Restricted cash mainly represent cash balances held by environmental rehabilitation trust funds and an environmental protection bond.

      
  

Financing receivables

      
  

Loans to equity accounted joint ventures and associates of $40 million (2011: $29 million) are disclosed in Note 6.

      
  

 

Other non-current assets

      
  

Unsecured

      
  

Other loans and assets(2)

      
  

 

Non-current debtors

      
  

Prepayments and accrued income

    31   22 
  

Recoverable tax, rebates, levies and duties

    20   14 
  

Reclamation sites trust fund

    20   29 
  

Unamortized issue costs of long-term debt, bonds and syndicated revolving credit facilities

    33   26 
  

Other debtors

      
      

 

      111  101
      

 

(1)

  

During 2012, XDM Resources Limited was impaired by $7 million due to a significant decline in value. The fair value of this non-marketable equity investment was based on a share price of C$0.25 per share, being the issue price obtained in a private equity raising which was completed during December 2012. During 2011, the fair value could not be estimated as there were no identified events or changes in circumstances that would have had a significant adverse effect on fair value of the investment and therefore it was not practicable to estimate the fair value of the investment. See Note 5.

      

(2)

  

Other comprises the following:

      
  

Loans and receivables measured at amortized cost

      
  

Post-retirement assets measured according to the employee benefits accounting policy

      

F-44

F - 44


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

15.

OTHER LONG-TERM ASSETS(continued)

Equity accounted joint ventures

19.LONG-TERM DEBT
         
  2010  2009 
  $  $ 
 
Unsecured
        
 
Debt carried at fair value        
 
Mandatory convertible bonds — issued September 2010(1)
  874    
Quarterly coupon of 6 percent per annum. The bonds are convertible into ADS’s in September 2013 and are US dollar-based. The bonds are convertible into a variable number of shares as set forth in the indenture        
Accrued interest included in short-term debt  (2)   
       
 
Long-term debt at fair value
  872    
       
 
Debt carried at amortized cost
        
 
Rated bonds — issued April 2010(2)
  1,006    
The rated bonds have two components, $700 million 10-year bonds and $300 million 30-year bonds. Semi-annual coupons of 5.375 percent per annum on $700 million 10-year bonds and 6.5 percent per annum on $300 million 30-year bonds. The $700 million 10-year bonds are repayable in April 2020 and the $300 million 30-year bonds are repayable in April 2040. The bonds are US dollar-based        
 
Syndicated loan facility ($1.0 billion)(3)
  50    
Interest charged at LIBOR plus 1.75 percent per annum. The loan is repayable in April 2014 and is US dollar-based        
 
Syndicated loan facility ($1.15 billion)(4)
     1,025 
Interest charged at LIBOR plus 0.4 percent per annum. Loan was repaid in June 2010 and was US dollar-based        
 
3.5% Convertible bonds(5)
  633   609 
Semi-annual coupon of 3.5 percent per annum. The bonds are convertible, at the holders’ option, into ADSs up to May 2014 and are US dollar-based. The bonds are convertible at an initial conversion price of $47.6126 per ADS        
 
FirstRand Bank Limited loan facility (R1.5 billion)
  107    
Interest charged at JIBAR plus 0.95 percent per annum. Loan is repayable in May 2011 and is ZAR-based        
 
2009 Term Facility(6)
     252 
Interest charged at a margin of 4.25 percent per annum over the higher of the applicable LIBOR and the lenders’ cost of funds (subject to a cap of LIBOR plus 1.25 percent per annum). Loan was repaid in May 2010 and was US dollar-based        
 
Grupo Santander Brasil
  5   8 
Interest charged at LIBOR plus 1.45 percent per annum. Loan is repayable in quarterly installments terminating in September 2011 and is US dollar-based        
 
Grupo Santander Brasil
  4   6 
Interest charged at 6 percent per annum. Loans are repayable in monthly installments terminating in November 2013 and April 2014 and are Brazilian real-based        

Summarized financial statements of the joint ventures which have been equity accounted are as follows (100 percent shown):

F-45

 

   2012   2011  2010 
   $  $ $

 

Statements of income for the period

     

Sales and other income

  886   966  823 

Costs and expenses

  (828)  (679) (528)

Taxation

  (78)  (120) (126)
  

 

Net (loss)/income

  (20)  167  169 
  

 

Balance sheets as at December 31

     

Non-current assets

  2,019   1,337  

Current assets

  1,577   675  
  

 

 
  3,596   2,012  

Long-term liabilities

  (58)  (64) 

Loans from shareholders

  (63)  (53) 

Current liabilities

  (1,280)  (473) 
  

 

 

Net assets

  2,195   1,422  
  

 

 

F - 45


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

16.

ASSETS AND LIABILITIES HELD FOR SALE

19.LONG-TERM DEBT(continued)
         
  2010  2009 
  $  $ 
 
Secured
        
Capital leases
        
Turbine Square Two (Proprietary) Limited(7)
  39   35 
The leases are capitalized at an implied interest rate of 9.8 percent per annum. Lease payments are due in monthly installments terminating in March 2022 and are ZAR-based. The buildings financed are used as security for these loans. Refer to Note 13
        
 
Caterpillar Financial Services Corporation(7)
  13   16 
Interest charged at an average rate of 5.46 percent per annum. Loans are repayable in monthly installments terminating in January 2015 and are US dollar-based. The equipment financed is used as security for these loans. Refer to Note 13        
 
Mazuma Capital Corporation(7)
  4   7 
Interest charged at an average rate of 5.6 percent per annum. Loans are repayable in monthly installments terminating in November 2012 and are US dollar-based. The equipment financed is used as security for these loans. Refer to Note 13        
 
CSI Latina Arrendamento Mercantil S.A.(7)
  2   1 
Interest charged at a rate of 3.3 percent per annum. Loans are repayable in monthly installments terminating in June 2013 and are Brazilian real-based. The equipment financed is used as security for these loans. Refer to Note 13        
 
       
Total debt at amortized cost
  1,863   1,959 
Current maturities included in short-term debt  (133)  (1,292)
       
Long-term debt at amortized cost
  1,730   667 
       
Certain long-term debt facilities are subject to debt covenant arrangements for which no breaches have occurred        
 
Scheduled minimum total debt maturities are:        
2011  135     
2012  8     
2013  877     
2014  685     
2015  2     
Thereafter  1,030     
        
   2,737     
        
The currencies in which the borrowings are denominated are as follows:        
United States dollars  2,585   1,917 
South African rands  146   35 
Brazilian real  6   7 
       
   2,737   1,959 
       
 

 

        2012  2011 
        $ $
 

 

 

Effective December 2007, Rand Refinery Limited in South Africa transferred parts of its premises that were no longer utilized, to held for sale. On April 1, 2008, a sale agreement was concluded, subject to achievement of the suspensive condition regarding rezoning of the land and transfer of title deeds. On December 3, 2012, the Company disposed of a 5 percent stake in Rand Refinery Limited reducing its shareholding to 48.03 percent and at year-end this investment is accounted for using the equity method. See Note 3.

     
 

As at December 31, 2012 and 2011 the carrying amounts of major classes of assets and liabilities classified as held for sale included:

     
 

Property, plant and equipment

     
     

 

F-46

17.

OTHER LIABILITIES

 

Current

     
 

Deferred income

     
 

Deferred taxation. See Note 7.

    20  15 
 

Pension and other post-retirement medical benefits. See Note 25.

    12  12 
 

Accrual for power

    43  27 
 

Short-term portion of commodity contract(1)

    34  
 

Other (including accrued liabilities)

    90  60 
     

 

     202  120 
     

 

 

Non-current

     
 

Deferred income

     
 

Provision for uncertain tax positions. See Note 7.

    53  49 
 

Commodity contract(1)

    316  
 

Other creditors

     11 
     

 

     379  63 
     

 

(1)

 

Chemwes (Pty) Limited, subsidiary of First Uranium (Pty) Limited acquired by AngloGold Ashanti Limited during 2012, agreed to sell 25 percent of its production, capped at 312,500 ounces from January 1, 2012, to Franco-Nevada (Barbados) Corporation. Franco Nevada is required to pay $400 per ounce which inflates at 1 percent compounded annually from 2013. The obligation is calculated as the present value of the portion which is deemed a loss making executory contract in light of the market conditions that existed at the acquisition date. As at December 31, 2012, the remaining production due to Franco Nevada is 292,672 ounces. Included in the long-term obligation are future royalty obligations to Buffelsfontein Gold Mines and Premier Royalty Company of $14 million and environmental legal claims of $3 million.

     

F - 46


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
19.

18.

LONG-TERM DEBT

 

      

2012 

$

 

2011 

$

 

Unsecured

     

Debt carried at fair value

     

Mandatory convertible bonds - issued September 2010(1)

    588  760 

Quarterly coupon of 6 percent per annum. The bonds are convertible into ADS’s in September 2013 and are US dollar-based. The bonds are convertible into a variable number of shares as set forth in the indenture.

     

Included in short-term debt at fair value

    (588) (2)
    

 

Long-term debt at fair value

     758 
    

 

Debt carried at amortized cost

     

Rated bonds - issued April 2010(2)

    1,005  1,006 

The rated bonds have two components, $700 million 10-year bonds and $300 million 30-year bonds. Semi-annual coupons of 5.375 percent per annum on $700 million 10-year bonds and 6.5 percent per annum on $300 million 30-year bonds. The $700 million 10-year bonds are repayable in April 2020 and the $300 million 30-year bonds are repayable in April 2040. The bonds are US dollar-based.

     

Rated bonds - issued July 2012(3)

    761  

Semi-annual coupon of 5.125 percent per annum. The bonds are repayable in August 2022 and are US dollar-based.

     

3.5 percent Convertible bonds(4)

    689  659 

Semi-annual coupon of 3.5 percent per annum. The bonds are convertible, at the holders’ option, into ADSs up to May 2014 and are US dollar-based. The bonds are convertible at an initial conversion price of $47.6126 per ADS.

     

Syndicated revolving credit facility (A$600 million)(5)

    266  

Interest charged at BBSY plus 2 percent per annum. The applicable margin is subject to a ratings grid. The loan is repayable in December 2015 and is Australian dollar-based.

     

Grupo Santander Brasil

     

Interest charged at 8.11 percent per annum. Loans are repayable in monthly installments terminating in November 2013 and April 2014 and are Brazilian real-based.

     

Brazilian Economic and Social Development Bank

     

Interest charged at a rate of 2.3 percent plus delta exchange rate on individual installments per annum. Loans are repayable in monthly installments terminating in April 2014 and are Brazilian real-based.

     

Banco de Desenvolvimento de Minas Gerais

     

Interest charged at a rate of 4.5 percent per annum. Loans are repayable in monthly installments terminating in June 2020 and are Brazilian real-based.

     

F - 47


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

         
  2010  2009 
  $  $ 
 
Undrawn borrowing facilities as at December 31 are as follows:        
Syndicated loan facility ($1.0 billion) — US dollar  950    
Syndicated loan facility ($1.15 billion) — US dollar     125 
Standard Chartered PLC (2009 Revolving Credit Facility) — US dollar     250 
FirstRand Bank Limited — US dollar  50   50 
Absa Bank Limited — US dollar  42   42 
Nedbank Limited — US dollar     2 
FirstRand Bank Limited — rands  139   30 
Standard Bank of South Africa Limited — rands  28   25 
Nedbank Limited — rands  18   14 
Absa Bank Limited — rands  5   4 
       
   1,232   542 
       

18.

LONG-TERM DEBT(continued)

 

      

2012 

$

 

2011 

$

 

Secured

     

Capital leases

     

Turbine Square Two (Proprietary) Limited(6)

    31  33 

The leases are capitalized at an implied interest rate of 9.8 percent per annum. Lease payments are due in monthly installments terminating in March 2022 and are ZAR-based. The buildings financed are used as security for these loans. See Note 12.

     

Caterpillar Financial Services Corporation(6)

     10 

Interest charged at an average rate of 5.46 percent per annum. Loans are repayable in monthly installments terminating in January 2015 and are US dollar-based. The equipment financed is used as security for these loans. See Note 12.

     

Mazuma Capital Corporation(6)

     

Interest charged at an average rate of 5.6 percent per annum. Loans were repaid in monthly installments and terminated in November 2012 and were US dollar-based. The equipment financed was used as security for these loans. See Note 12.

     

CSI Latina Arrendamento Mercantil S.A.(6)

     

Interest charged at a rate of 10.4 percent per annum. Loans are repayable in monthly installments terminating in December 2015 and are Brazilian real-based. The equipment financed is used as security for these loans. See Note 12.

     

Navachab Lewcor Mining Contract(6)

    22  29 

Interest charged at a rate of 8.4 percent per annum. Loans are repayable in April 2015 and are Namibian dollar-based. The equipment financed is used as security for these loans. See Note 12.

     

California First National Bank(6)

    11  

Interest charged at an average rate of 2.4 percent per annum. Loans are repayable in monthly installments terminating in December 2019 and are US dollar-based. The equipment financed is used as security for these loans. See Note 12.

     
    

 

Total long-term debt at amortized cost

    2,797  1,745 

Current maturities included in short-term debt

    (47) (30)
    

 

Long-term debt at amortized cost

    2,750  1,715 
    

 

Certain long-term debt facilities are subject to debt covenant arrangements for which no breaches have occurred.

     

F - 48


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

18.

LONG-TERM DEBT(continued)

 

      

2012 

$

 

2011 

$

 

Short-term debt at amortized cost

     

Current maturities of long-term debt

    47  30 

Unsecured

     

Senior Floating Rate Notes (Domestic Medium-Term Note Program (“DMTNP”))

    84  

Senior Fixed Rate Notes (DMTNP)

    36  

FirstRand Bank Limited demand facility

    59  

Other loans

    45  
    

 

Short-term debt at amortized cost

    271  30 
    

 

Scheduled minimum total debt maturities are:

     

2013

    859  

2014

    703  

2015

    273  

2016

     

2017

     

Thereafter

    1,765  
    

 

 
    3,609  
    

 

 

The currencies in which the borrowings are denominated are as follows:

     

United States dollars

    3,107  2,437 

Australian dollars

    266  

South African rands

    210  33 

Brazilian real

     

Namibian dollars

    22  29 
    

 

    3,609  2,505 
    

 

Undrawn borrowing facilities as at December 31 are as follows:

     

Syndicated revolving credit facility ($1.0 billion) - US dollar

    1,000  1,000 

Syndicated revolving credit facility (A$600 million) - Australian dollar

    359  617 

FirstRand Bank Limited - US dollar

     50 

Absa Bank Limited - US dollar

     42 

Nedbank Limited - US dollar

     

FirstRand Bank Limited - rands

    30  14 

Standard Bank of South Africa Limited - rands

     23 

Nedbank Limited - rands

     13 

Absa Bank Limited - rands

     
    

 

    1,389  1,765 
    

 

F - 49


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

18.

LONG-TERM DEBT(continued)

(1)

 

Mandatory convertible bonds

In September 2010, the Company issued mandatory convertible bonds at a coupon rate of 6 percent due in September 2013. The conversion of the mandatory convertible bonds into ADSs was subject to shareholder approval, which was granted in October 2010. These bonds are convertible into a variable number of ADSs, ranging from 18,140,000 at a share price equal to or lesser than $43.50, to 14,511,937 at a share price equal to or greater than $54.375, each as calculated in accordance with the formula set forth in the indenture and subject to adjustment.

 

The mandatory convertible bonds contain certain embedded derivatives relating to change in control and anti-dilution protection provisions. The FASB ASC guidance contains an election for the Company to record the entire instrument at fair value as opposed to separating the embedded derivatives from the instrument. The shareholders have authorized that the convertible bonds will be settled in equity and not have any cash settlement potential except if a fundamental change or conversion rate adjustment causes the number of ADSs deliverable upon conversion to exceed the number of shares reserved for such purpose, among other circumstances provided in the indenture, and therefore the Company has chosen to recognize the instrument, in its entirety, at fair value. Depending on the final calculated share price on the date of conversion, the liability recognized may differ from the principal amount.

 

Other convertible bonds that have been issued by the Company will only be settled in equity if future events, outside of the control of the Company, result in equity settlement and thus have a potential cash settlement at maturity that will not exceed the principal amount, in those circumstances the liabilities are recognized at amortized cost.

 

In determining the fair value liability of the mandatory convertible bonds, the Company has measured the effect based on the ex interest NYSE closing price on the reporting date. The ticker code used by the NYSE for the mandatory convertible bonds is AUPRA. The accounting policy of the Company is to recognize interest expense separately from the fair value adjustments in the income statement. Interest is recognized at a quarterly coupon rate of 6 percent per annum. Fair value adjustments are included in Non-hedge derivative gain/loss and movement on bonds in the income statement — refer to– see Note 5.

 

The contractual principal amount of the mandatory convertible bonds is $789 million, provided the calculated share price of the Company is within the range of $43.50 to $54.375. If the calculated share price is below $43.50, the Company will recognize a gain on the principal amount and above $54.375 a loss. As at December 30, 2010,31, 2012, the actual share price was $49.23.

$31.37 (December 31, 2011: $42.45).

 

The mandatory convertible bonds were issued by AngloGold Ashanti Holdings Finance plc, a finance company wholly-owned by AngloGold Ashanti Limited. AngloGold Ashanti Limited has fully and unconditionally guaranteed the mandatory subordinated convertible bonds issued by AngloGold Ashanti Holdings Finance plc. There are no significant restrictions on the ability of AngloGold Ashanti Limited to obtain funds from its subsidiaries by dividend or loan.

F-47

F - 50


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
19.LONG-TERM DEBT(continued)
         
  2010  2009 
  $  $ 
 
(2)Rated bonds
        
Senior unsecured fixed rate bonds  1,000    
Less: Unamortized discount  (6)   
Add: Accrued interest  12    
       
   1,006    
       
On April 22, 2010, the Company announced the pricing of an offering of 10-year and 30-year notes. The offering closed on April 28, 2010. The notes were issued by AngloGold Ashanti Holdings plc, a wholly-owned subsidiary of AngloGold Ashanti Limited, and are fully and unconditionally guaranteed by AngloGold Ashanti Limited. The notes are unsecured and interest is payable semi-annually        
(3)Syndicated loan facility ($1.0 billion)
        
Drawn down  50    
Add: Accrued interest      
       
   50    
       
On April 20, 2010, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Inc., each a wholly-owned subsidiary of AngloGold Ashanti Limited, as borrowers, and AngloGold Ashanti Limited entered into a $1.0 billion four year revolving credit facility with a syndicate of lenders to replace the existing $1.15 billion syndicated facility. AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Inc. each guaranteed the obligations of the borrowers and other guarantors under the facility. Amounts may be repaid and reborrowed under the facility during its four year term. A commitment fee of 0.70 percent is payable quarterly in arrears on the undrawn portion of the facility        
(4)Syndicated loan facility ($1.15 billion)
        
Drawn down     1,025 
       
      1,025 
       
In December 2007, the Company entered into a three year $1.15 billion unsecured syndicated borrowing facility, at a margin of 0.4 percent over LIBOR. On April 20, 2010, the Company entered into a $1.0 billion four year revolving credit facility to replace the $1.15 billion syndicated loan facility. During the second quarter of 2010, the Company applied proceeds from the rated bonds issued in April 2010, to repay the $1.15 billion syndicated facility        
During the year ended December 31, 2010, the Company drew down and repaid the following amounts:        
Amount drawn down under the $1.15 billion facility  35     
Amount repaid under the $1.15 billion facility  1,060     

F-48


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
19. LONG-TERM DEBT(continued)
         
  2010  2009 
  $  $ 
 
(5)3.5% Convertible bonds
        
Senior unsecured fixed rate bonds  630   607 
Add: Accrued interest  3   2 
       
   633   609 
       
The issue of convertible bonds in the aggregate principal amount of $732.5 million at an interest rate of 3.5 percent was concluded on May 22, 2009. These bonds are convertible into ADSs at an initial conversion price of $47.6126. The conversion price is subject to standard weighted average anti-dilution protection. The convertible bonds were issued by AngloGold Ashanti Holdings Finance plc, a finance company wholly-owned by AngloGold Ashanti Limited. AngloGold Ashanti Limited has fully and unconditionally guaranteed the convertible bonds issued by AngloGold Ashanti Holdings Finance plc. There are no significant restrictions on the ability of AngloGold Ashanti Limited to obtain funds from its subsidiaries by dividend or loan        
The convertible bonds mature on May 22, 2014. However, at any time on or after June 12, 2012 the Company has the right, but not the obligation, to redeem all (but not part) of the convertible bonds at their principal amount together with accrued interest if the volume weighted average price of the ADSs that would be delivered by the Company on the conversion of a convertible bond of a principal amount of $100,000 exceeds $130,000 on each of at least 20 consecutive dealing days ending not earlier than five days prior to the date that the Company gives notice of the redemption        
Upon the occurrence of a change of control of the Company, each convertible bond holder will have the right to require the Company to redeem its convertible bonds at their principal amount plus accrued interest thereon. If the convertible bond holder elects to convert its convertible bonds in connection with such change of control, the Company will pay a “make whole” premium to such convertible bond holder in connection with such conversion        
The Company is separately accounting for the conversion features of the convertible bonds at fair value as a derivative liability with subsequent changes in fair value recorded in earnings each period. The total fair value of the derivative liability on May 22, 2009 (date of issue) amounted to $142.2 million. The difference between the initial carrying value and the stated value of the convertible bonds is being accreted to interest expense using the effective interest method over the 5 year term of the bonds        
The associated derivative liability (which has been accounted for separately) are summarized as follows:        
Convertible bond derivative liability        
Balance at beginning of period  175   142 
Fair value movements on conversion features of convertible bonds  1   33 
       
Balance at end of period  176   175 
       
(6)2009 Term Facility
        
Drawn down     250 
Add: Accrued interest     2 
       
      252 
       
On November 20, 2008, AngloGold Ashanti Holdings plc entered into a $1.0 billion term loan facility agreement (the “Term Facility”)        
During 2009, the Company completed an amendment to the Term Facility by prepaying an amount of $750 million and, as a result, the balance of the Term Facility was converted into a new term loan of $250 million (the “2009 Term Facility”) and a new revolving credit facility of $250 million was made available (the “2009 Revolving Credit Facility”)        
During the second quarter of 2010, the Company applied proceeds from the rated bonds issued in April 2010, to repay the 2009 Term Facility and to cancel the 2009 Revolving Credit Facility. The cancellation of these debt facilities in the June quarter resulted in a once-off charge to earnings of $8 million related to accelerated amortization of fees        

F-49


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
19.LONG-TERM DEBT(continued)

(7)18.Capital leases
Capital leases are for specific periods, with terms of renewal but no purchase options. Renewals are at the discretion of the entity that holds the lease.
Property, plant and equipment, allocated to Buildings and mine infrastructure, includes the following assets under capital leases:

LONG-TERM DEBT(continued)

                 
  2010  2009 
      Accumulated      Accumulated 
  Cost  depreciation  Cost  depreciation 
  $  $  $  $ 
 
Turbine Square Two (Proprietary) Limited  37   9   33   6 
Caterpillar Financial Services Corporation  15   2   16    
Mazuma Capital Corporation  8   2   7   1 
CSI Latina Arrendamento Mercantil S.A.  3   2   2   1 
   
   63   15   58   8 
   
Amortization charges relating to capital leases are included in Depreciation, depletion and amortization expense. Future minimum lease payments under all the above capital leases together with the present value of minimum lease payments as of December 31, 2010 are:
     
  2010 
  $ 
2011  10 
2012  11 
2013  8 
2014  9 
2015  6 
Thereafter  48 
    
Total minimum lease payments  92 
Less interest  34 
    
Present value of net minimum lease payments  58 
Less current portion  6 
    
Long-term capital lease obligation  52 
    

 

        

2012 

$

  

2011 

$

 

(2)

 

Rated bonds - issued April 2010

      
 

Senior unsecured fixed rate bonds

    1,000   1,000 
 

Less: Unamortized discount

    (6)  (6)
 

Add: Accrued interest

    11   12 
     

 

     1,005   1,006 
     

 

       
 

On April 22, 2010, the Company announced the pricing of an offering of 10-year and 30-year notes. The offering closed on April 28, 2010. The notes were issued by AngloGold Ashanti Holdings plc, a wholly-owned subsidiary of AngloGold Ashanti Limited, and are fully and unconditionally guaranteed by AngloGold Ashanti Limited. The notes are unsecured and interest is payable semi-annually.

    
(3) 

Rated bonds - issued July 2012

      
 

Senior unsecured fixed rate bonds

    750   
 

Less: Unamortized discount

    (5)  
 

Add: Accrued interest

    16   
     

 

     761   
     

 

 

On July 25, 2012, the Company announced the pricing of an offering of $750 million notes. The notes were issued by AngloGold Ashanti Holdings plc, a wholly-owned subsidiary of the Company, at an issue price of 99.398 percent. The notes are unsecured and are fully and unconditionally guaranteed by AngloGold Ashanti Limited. The transaction closed on July 30, 2012.

    

F-50

F - 51


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
20.PROVISION FOR ENVIRONMENTAL REHABILITATION
         
  2010  2009 
  $  $ 
 
Accrued environmental rehabilitation costs  530   385 
       

18.Long-term environmental obligations comprising decommissioning and restoration are based on the Company’s environmental management plans, in compliance with the current environmental and regulatory requirements.
While the ultimate amount of rehabilitation is uncertain, the Company has estimated that the total cost for mine rehabilitation and closure, on an undiscounted basis, will be $2,512 million which includes a total estimated liability of $54 million in respect of equity accounted joint ventures. AngloGold Ashanti USA has posted reclamation bonds with various federal and governmental agencies to cover environmental rehabilitation obligations. Refer to Note 21.
The Company intends to finance the ultimate rehabilitation costs from the monies invested with the rehabilitation trust fund, the environmental protection bond as well as the proceeds on sale of assets and gold from plant clean-up at the time of mine closure.

LONG-TERM DEBT(continued)

 

        

2012 

$

  

2011 

$

 

(4)

 

3.5 percent Convertible bonds

      
 

Senior unsecured fixed rate bonds

    686   656 
 

Add: Accrued interest

      
     

 

     689   659 
     

 

 

The issue of convertible bonds in the aggregate principal amount of $732.5 million at an interest rate of 3.5 percent was concluded on May 22, 2009. These bonds are convertible into ADSs at an initial conversion price of $47.6126. The conversion price is subject to standard weighted average anti-dilution protection. The convertible bonds were issued by AngloGold Ashanti Holdings Finance plc, a finance company wholly-owned by AngloGold Ashanti Limited. AngloGold Ashanti Limited has fully and unconditionally guaranteed the convertible bonds issued by AngloGold Ashanti Holdings Finance plc. There are no significant restrictions on the ability of AngloGold Ashanti Limited to obtain funds from its subsidiaries by dividend or loan.

    
 

The convertible bonds mature on May 22, 2014. However, at any time on or after June 12, 2012 the Company has the right, but not the obligation, to redeem all (but not part) of the convertible bonds at their principal amount together with accrued interest if the volume weighted average price of the ADSs that would be delivered by the Company on the conversion of a convertible bond of a principal amount of $100,000 exceeds $130,000 on each of at least 20 consecutive dealing days ending not earlier than five days prior to the date that the Company gives notice of the redemption.

    
 

Upon the occurrence of a change of control of the Company, each convertible bond holder will have the right to require the Company to redeem its convertible bonds at their principal amount plus accrued interest thereon. If the convertible bond holder elects to convert its convertible bonds in connection with such change of control, the Company will pay a “make whole” premium to such convertible bond holder in connection with such conversion. The conversion price is subject to adjustment on occurrence of certain events, as described in the terms and conditions of the bonds.

    
 

The Company is separately accounting for the conversion features of the convertible bonds at fair value as a derivative liability with subsequent changes in fair value recorded in earnings each period. The total fair value of the derivative liability on May 22, 2009 (date of issue) amounted to $142.2 million. The difference between the initial carrying value and the stated value of the convertible bonds is being accreted to interest expense using the effective interest method over the 5 year term of the bonds.

    
 

The associated derivative liability (which has been accounted for separately) is summarized as follows:

    
 

Convertible bond derivative liability

      
 

Balance at beginning of period

    92   176 
 

Fair value movements on conversion features of convertible bonds

    (83)  (84)
     

 

 

Balance at end of period

      92 
     

 

 

Subsequent to year-end, the Company entered into a syndicated bridge loan facility of $750 million, the proceeds of which may be applied towards the repayment of the $732.5 million 3.5 percent Convertible bonds, due May 2014. See Note 29.

    

(5)

 

Syndicated revolving credit facility (A$600 million)

      
 

Drawn down

    266   
     

 

 

On December 22, 2011, AngloGold Ashanti Australia Limited, a wholly-owned subsidiary of AngloGold Ashanti Limited, entered into a four-year revolving credit facility of A$600 million with a syndication of banks. AngloGold Ashanti Limited together with AngloGold Ashanti Holdings plc has each guaranteed all payments and other obligations of AngloGold Ashanti Australia Limited under the facility. Amounts may be repaid and reborrowed under the facility during its four-year term. A commitment fee of 50 percent of the applicable margin (i.e. 1 percent) is payable quarterly in arrears on the undrawn portion of the facility.

    

F-51

F - 52


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
21.COMMITMENTS AND CONTINGENCIES
         
  2010  2009 
  $  $ 
 
Capital expenditure commitments(1)
        
Contracts for capital expenditure  176   131 
Authorized by the directors but not yet contracted for  988   1,683 
       
   1,164   1,814 
       
Allocated for:        
Project expenditure        
- within one year  433   264 
- thereafter  107   594 
       
   540   858 
       
Stay in business expenditure        
- within one year  404   705 
- thereafter  220   251 
       
   624   956 
       
(1)Including commitments through contractual arrangements by equity accounted joint venturesamounting to:
  12   6 
Other contractual purchase obligations(2)
        
- within one year  398   346 
- thereafter  140   96 
       
   538   442 
       

18.

LONG-TERM DEBT(continued)

(2)
 

Other purchase obligations represent contractual obligations for the purchaseSyndicated revolving credit facility ($1.0 billion)

On April 20, 2010, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Inc., each a wholly-owned subsidiary of mining contract services, power, supplies, consumables, inventories, explosivesAngloGold Ashanti Limited, as borrowers, and activated carbon. Amounts exclude purchaseAngloGold Ashanti Limited entered into a $1.0 billion four-year revolving credit facility with a syndicate of lenders. AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Inc. each guaranteed the obligations of equity accounted joint ventures.

Summary of contracted uranium sales as at December 31, 2010
The Company had the following uranium commitments:
         
      Average contracted 
Year lbs (000)(1)  price ($/lbs) 
2011  494   33.97 
2012  494   34.35 
2013  494   34.74 
(1)the borrowers and other guarantors under the facility. Amounts may be repaid and reborrowed under the facility during its four-year term. During 2012, the Company drew down $200 million under the facility. This facility has been repaid and cancelled.

 Certain contracts allow

On July 20, 2012, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Inc., each a wholly owned subsidiary of AngloGold Ashanti Limited, as borrowers, and AngloGold Ashanti Limited entered into a $1.0 billion five-year unsecured revolving credit facility with a syndicate of lenders which replaced its existing $1.0 billion syndicated facility maturing in April 2014. AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Inc. each guaranteed the buyer to adjustobligations of the purchase quantity withinborrowers under the facility. Amounts may be repaid and reborrowed under the facility during its five-year term. Amounts outstanding under the facility bear interest at LIBOR plus a specified range.margin that varies depending on the credit rating of AngloGold Ashanti Limited. No draw down was made during 2012 under the facility. A commitment fee of 0.525 percent is payable quarterly in arrears on the undrawn portion of the facility.

F-52

(6)

 

Capital leases

       
 

Capital leases are for specific periods, with terms of renewal but no purchase options. Renewals are at the discretion of the entity that holds the lease.

       
 

 

Property, plant and equipment, allocated to Buildings and mine infrastructure, includes the following assets under capital leases:

       
 

 

    2012  2011
    

Cost

$

  Accumulated
depreciation
$
  

Cost

$

  

Accumulated
depreciation

$

 

 

 

Turbine Square Two (Proprietary) Limited

 30    11   39   18 
 

Caterpillar Financial Services Corporation

 16      16   
 

Mazuma Capital Corporation

        
 

CSI Latina Arrendamento Mercantil S.A.

        
 

Navachab Lewcor Mining Contract

 30    10   31   
 

California First National Bank

 12        
  

 

  99    40   97   30 
  

 

 

 

Amortization charges relating to capital leases are included in Depreciation, depletion and amortization expense.

  

   
 

Future minimum lease payments under all the above capital leases together with the present value of minimum lease payments as of December 31, 2012 are:

      

 

         

2012 

$

 

2013

      20 

2014

      20 

2015

      11 

2016

      

2017

      

Thereafter

      31 
      

 

Total minimum lease payments

      96 

Less interest

      (23)
      

 

Present value of net minimum lease payments

      73 

Less current portion

      (15)
      

 

Long-term capital lease obligation

      58 
      

 

F - 53


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

21.19.

PROVISION FOR ENVIRONMENTAL REHABILITATION

 

  

2012 

$

 

2011 

$

 

Accrued environmental rehabilitation costs

 758  653 
 

 

Long-term environmental obligations comprising decommissioning and restoration are based on the Company’s environmental management plans, in compliance with the current environmental and regulatory requirements.

  

While the ultimate amount of rehabilitation is uncertain, the Company has estimated that the total cost for mine rehabilitation and closure, on an undiscounted basis, will be $2,984 million (2011: $2,542 million) which includes a total estimated liability of $61 million (2011: $57 million) in respect of equity accounted joint ventures. Environmental and reclamation bonds of $184 million (2011: $131 million) have been posted with federal and governmental agencies to cover environmental rehabilitation obligations. See Note 20.

  

The Company intends to finance the ultimate rehabilitation costs from the monies invested with rehabilitation trust funds, the environmental protection bond as well as the proceeds on sale of assets and gold from plant clean-up at the time of mine closure.

  

F - 54


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

20.

COMMITMENTS AND CONTINGENCIES

 

 
  

2012 

$

  

2011 

$

 

 

 

Capital expenditure commitments(1)

  

Contracts for capital expenditure

  1,075    202 

Authorized by the directors but not yet contracted for

  2,242    1,128 
 

 

 

 
              3,317                1,330 
 

 

 

 

Allocated for:

  

Project expenditure

  

- within one year

  1,092    832  

- thereafter

  1,708    46  
 

 

 

 
  2,800    878  
 

 

 

 

Other capital expenditure

  

- within one year

  517    421  

- thereafter

     31  
 

 

 

 
  517    452  
 

 

 

 

(1) Including commitments through contractual arrangements by equity accounted joint ventures amounting to:

  749    14  
  

Other contractual purchase obligations(2)

  

- within one year

  643    334  

- thereafter

  102    129  
 

 

 

 
  745    463  
 

 

 

 

(2) Other purchase obligations represent contractual obligations for the purchase of mining contract services, power, supplies, consumables, inventories, explosives and activated carbon. Amounts exclude purchase obligations of equity accounted joint ventures.

  

F - 55


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

20.

COMMITMENTS AND CONTINGENCIES(continued)

Contingencies and guarantees are summarized as follows for disclosure purposes. Amounts represent possible losses for loss contingencies, where an estimate can be made, and quantification of guarantees:

           
    2010 2009
    $ $
 
  Contingent liabilities        
           
  Groundwater pollution (1)      
  Deep groundwater pollution — South Africa (2)      
  Sales tax on gold deliveries — Brazil (3)  89   76 
  Other tax disputes — Brazil (4)  34   25 
  Indirect taxes — Ghana (5)  11   9 
  Occupational Diseases in Mines and Works Act (“ODMWA”) litigation (6)      
           
  Contingent assets        
           
  Royalty — Boddington Gold Mine (7)      
  Royalty — Tau Lekoa Gold Mine (8)      
           
  Financial guarantees        
           
  Oro Group surety (9)  15   13 
  AngloGold Ashanti USA reclamation bonds (10)  88   84 
  AngloGold Ashanti environmental guarantees (11)  172   134 
  Guarantee provided for revolving credit facility (12)  50    
  Guarantee provided for rated bonds (13)  1,012    
  Guarantee provided for convertible bonds (14)  736   735 
  Guarantee provided for mandatory convertible bonds (15)  791    
  Guarantee provided for term loan facility and revolving credit facility (16)     252 
  Guarantee provided for syndicated loan facility (17)     1,025 
           
  Hedging guarantees        
  Gold delivery guarantees (18)     370 
  Ashanti Treasury Services Limited (“ATS”) hedging guarantees (19)     443 
  Geita Management Company Limited (“GMC”) hedging guarantees (20)     432 
      
     2,998   3,598 
      
 
  The Company assesses the credit quality of counterparts at least on a quarterly basis. As of December 31, 2010, the probability of non-performance is considered minimal.        
 
 
(1)
 Ground water pollution        
           
  The Company has identified groundwater contamination plumes at certain of its operations, which have occurred primarily as a result of seepage from mine residue stockpiles. 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 Company 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 improvement in some instances. Furthermore, literature reviews, field trials and base line modeling 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.        

 

  

2012 

$

 

2011 

$

 

Contingent liabilities

  

Groundwater pollution (1)

  

Deep groundwater pollution(2)

  

Sales tax on gold deliveries - Mineração Serra Grande S.A. (3)

 156  88 

Other tax disputes - Mineração Serra Grande S.A. (4)

 19  

Other tax disputes - AngloGold Ashanti Brasil Mineração Ltda (5)

 38  29 

Indirect taxes - Ghana (6)

 23  12 

Occupational Diseases in Mines and Works Act (“ODMWA”) litigation (7)

  

Tax dispute - AngloGold Ashanti Colombia S.A (8)

 161  

Contingent assets

  

Indemnity - Kinross Gold Corporation (9)

 (90) 

Royalty - Boddington Gold Mine (10)

  

Royalty - Tau Lekoa Gold Mine (11)

  

Financial guarantees

  

Oro Group surety (12)

 12  12 

AngloGold Ashanti USA reclamation bonds (13)

 132  101 

AngloGold Ashanti Australia environmental bonds (14)

 52  30 

AngloGold Ashanti environmental guarantees (15)

 162  166 

AngloGold Ashanti Iduapriem environmental guarantees (16)

 32  

AngloGold Ashanti Kilo Sarl environmental guarantees (17)

 10  

Guarantee provided for syndicated revolving credit facility (18)

  

Guarantee provided for rated bonds - issued April 2010 (19)

 1,011  1,012 

Guarantee provided for rated bonds - issued July 2012 (20)

 766  

Guarantee provided for convertible bonds (21)

 736  736 

Guarantee provided for mandatory convertible bonds (22)

 791  791 

Guarantee provided for A$ syndicated revolving credit facility (23)

 266  

Performance guarantees

  

Gold delivery - Mine Waste Solutions (24)

  

Hedging guarantees

  

Gold delivery guarantees (25)

  
 

 

 4,277  2,986 
 

 

F-53

(1)

Ground water pollution

The Company 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 extent of the contamination and to find sustainable remediation solutions. The Company 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 modeling techniques suggest, but have 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.

F - 56


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

21.20.

COMMITMENTS AND CONTINGENCIES(continued)

           
    2010 2009
    $ $
 
(2)
 Deep ground water pollution — South Africa        
           
  The Company has identified a flooding and future pollution risk posed by deep groundwater in the Klerksdorp and Far West Rand gold fields. 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, the Department of Mineral Resources and affected mining companies are involved in the development of a “Regional Mine Closure Strategy”. In view of the limitation of current information for the estimation of a liability, no reasonable estimate can be made for the obligation.        
           
(3)
 Sales tax on gold deliveries — Brazil        
           
  Mineração Serra Grande S.A. (“MSG”) received two tax assessments from the State of Goiás related to payments of sales taxes on gold deliveries for export. AngloGold Ashanti Córrego do Sitío Mineração S.A. manages the operation. In November 2006, the administrative council’s second chamber ruled in favor of MSG and fully cancelled the tax liability related to the first period. The State of Goiás has appealed to the full board of the State of Goiás tax administrative council. The second assessment was issued by the State of Goiás in October 2006 on the same grounds as the first assessment. The Company believes both assessments are in violation of federal legislation on sales taxes.        
  The Company’s attributable share of the assessments are as follows:        
  First assessment  55   47 
  Second assessment  34   29 
      
     89   76 
           
(4)
 Other tax disputes — Brazil        
           
  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 Company’s attributable share of the assessment is approximately:  10   8 
           
  Subsidiaries of the Company in Brazil are involved in various 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:  24   17 
           
      
     34   25 
           
(5)
 Indirect taxes — Ghana        
           
  AngloGold Ashanti (Ghana) Limited received a tax assessment during September 2009 in respect of the 2006, 2007 and 2008 tax years following an audit by the tax authorities related to indirect taxes on various items. Management is of the opinion that the indirect taxes are not payable and the Company has lodged an objection.        
           
  The assessment is approximately:  11   9 
           
(6)
 ODMWA litigation        
           
  The case of Mr Thembekile Mankayi was heard in the High Court of South Africa in June 2008, and an appeal heard in the Supreme Court of Appeals in 2010. In both instances judgment was awarded in favor of AngloGold Ashanti Limited. A further appeal that was lodged by Mr Mankayi was heard in the Constitutional Court in 2010. Judgment in the Constitutional Court was handed down on March 3, 2011.        
           
  Following the judgment, Mr Mankayi’s executor may proceed with his case in the High Court. This will comprise, amongst others, providing evidence showing that Mr Mankayi contracted silicosis as a result of negligent conduct on the part of AngloGold Ashanti.        
           
  The Company will defend the case and any subsequent claims on their merits. Should other individuals or groups lodge similar claims, these too would be defended by the Company and adjudicated by the Courts on their merits. In view of the limitation of current information for the estimation of a possible liability, no reasonable estimate can be made for this possible obligation.        

F-54

 

 

 
     

2012 

$

  

            2011 

$

  
 

 

 

 

(2)

 

 

Deep ground water pollution

     
 

The Company 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 Limited 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 involved in the development of a “Regional Mine Closure Strategy”. In view of the limitation of current information for the estimation of a liability, no reasonable estimate can be made for the obligation.

     

(3)

 

Sales tax on gold deliveries - Mineração Serra Grande S.A.

     
 

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 percent on gold deliveries for export from one Brazilian state to another during the period from February 2004 to the end of May 2006. In November 2006, the administrative council’s second chamber ruled in favor of MSG and fully cancelled the tax liability related to the first period. In July 2011, the administrative council’s second chamber ruled in favor 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. Both cases have been remitted to the COMEX and are under review. The Company believes both assessments are in violation of federal legislation on sales taxes. A final hearing before the COMEX has been scheduled for May 28, 2013.

     
 

The first and second assessments are as follows:

     
 

First assessment

  96  54 (a)
 

Second assessment

  60  34 (a)
   

 

 
   156  88  
 

(a)  Represents the attributable share in 2011 only.

     

(4)

 

Other tax disputes - Mineração Serra Grande S.A.

     
 

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:

  19  (a) 
 

(a)  Represents the attributable share in 2011 only.

     

(5)

 

Other tax disputes - AngloGold Ashanti Brasil Mineração Ltda

     
 

In November 2007, the Departamento Nacional de Produçâo Mineral (“DNPM”), a Brazilian federal mining authority, issued a tax assessment against AngloGold Ashanti Brazil Mineração (“AABM”) relating to the calculation and payment by AABM of the financial contribution on mining exploitation (“CFEM”) in the period from 1991 to 2006. The amount involved is approximately:

  21  21 
 

Subsidiaries of the Company 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:

  17  8 
   

 

 
   38  29 
 

Management is of the opinion that these taxes are not payable.

     

(6)

 

Indirect taxes - Ghana

     
 

AngloGold Ashanti (Ghana) Limited 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. Management is of the opinion that the indirect taxes were not properly assessed and the Company has lodged an objection.

     
 

The assessment is approximately:

  23  12 

F - 57


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

21.20.

COMMITMENTS AND CONTINGENCIES(continued)

           
    2010 2009
    $ $
 
(7)
 Royalty — Boddington Gold Mine        
           
  As a result of the sale of the interest in the Boddington Gold Mine during 2009, the Company is entitled to receive a royalty on any gold recovered or produced by the Boddington Gold Mine, where the gold price is in excess of Boddington Gold Mine’s cash costs plus $600 per ounce. The royalty is payable in each quarter from and after the second quarter in 2010, within forty five days of reporting period close and is capped at a total of $100 million.        
           
  Details of the royalty are as follows:        
           
  Royalties received during the year ended December 31. See Note 5.  4    
  Royalties received subsequent to December 31, 2010  6    
           
(8)
 Royalty — Tau Lekoa Gold Mine        
           
  As a result of the sale of the Tau Lekoa Gold Mine during 2010, the Company is entitled to receive a royalty on the production of a total of 1.5 million ounces by the Tau Lekoa Gold Mine and in the event that the average monthly rand price of gold exceeds R180,000 per kilogram (subject to an inflation adjustment). Where the average monthly rand price of gold does not exceed R180,000 per kilogram (subject to an inflation adjustment), the ounces produced in that quarter do not count towards the total 1.5 million ounces upon which the royalty is payable. The royalty will be determined at 3 percent of the net revenue (being gross revenue less state royalties) generated by the Tau Lekoa assets.        
           
  Royalties received during the year ended December 31. See Note 5.  3    
           
(9)
 Oro Group surety  15   13 
           
  The Company has provided surety in favor of a lender on a gold loan facility with its associate Oro Group (Proprietary) Limited and one of its subsidiaries. The Company has a total maximum liability, in terms of the suretyships, of R100 million. The probability of the non-performance under the suretyships is considered minimal.        
           
(10)
 AngloGold Ashanti USA reclamation bonds  88   84 
           
  Pursuant to US environmental and mining requirements, gold mining companies are obligated to close their operations and rehabilitate the lands that they mine in accordance with these requirements. AngloGold Ashanti USA has posted reclamation bonds with various federal and state governmental agencies to cover potential rehabilitation obligations. The Company has provided a guarantee for these obligations which would be payable in the event of AngloGold Ashanti USA not being able to meet its rehabilitation obligations. The obligations will expire upon completion of such rehabilitation and release of such areas by the applicable federal and/or state agency. AngloGold Ashanti is not indemnified by third parties for any of the amounts that may be paid by AngloGold Ashanti under its guarantee.        
           
(11)
 AngloGold Ashanti environmental guarantees  172   134 
           
  Pursuant to South African mining laws, mining companies are obligated to close their operations and rehabilitate the lands that they mine in accordance with these laws. In order to cover against premature closure costs, the Company has secured bank guarantees to cover potential rehabilitation obligations of certain mines in South Africa. The Company has provided a guarantee for these obligations which would be payable in the event of the South African mines not being able to meet such rehabilitation obligations. The obligations will expire upon compliance with all provisions of the environment management program in terms of South African mining laws. AngloGold Ashanti is not indemnified by third parties for any of the amounts that may be paid by AngloGold Ashanti under its guarantee.        
           
(12)
 Guarantee provided for revolving credit facility        
           
  AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Incorporated, as guarantors, have each guaranteed all payments and other obligations of the borrowers and the other guarantors under the $1.0 billion four year revolving credit facility.        
           
  The total amount outstanding under this facility as at December 31 amounted to:  50    

F-55

 

 

     

2012 

$

  

2011 

$

 

 

 

(7)

 

 

ODMWA litigation

    
 

 

On March 3, 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 ODMWA. This judgment 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 August 21, 2012, AngloGold Ashanti was served with an application instituted by Bangumzi Bennet Balakazi 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 has 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 January 8, 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 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 January 1, 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 January 1, 1965. AngloGold Ashanti has filed a notice of intention to oppose the application.

    
 

 

In October 2012, a further 31 individual summonses and particulars of claim have been received relating to silicosis and/or other OLD. The total amount being claimed in the 31 summonses is approximately $9 million. On October 22, 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.

    
 

 

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 favorably 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.

    

(8)

 

Tax dispute - AngloGold Ashanti Colombia S.A.

    
 

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 2010 and 2011 income tax returns. The Company believes that it has applied the tax legislation correctly. The Company is considering defending AGAC’s position.

    
 

Details of the disputes are as follows:

    
 

Estimated additional tax payable if tax returns are amended

  26   
 

Expected penalties and interest on the above (based on Colombian tax law)

  135   
   

 

   161   

F - 58


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

21.20.

COMMITMENTS AND CONTINGENCIES(continued)

           
    2010 2009
    $ $
 
(13)
 Guarantee provided for rated bonds  1,012    
           
  AngloGold Ashanti Limited has fully and unconditionally guaranteed all payments and other obligations of AngloGold Ashanti Holdings plc regarding the issued $700 million 5.375 percent rated bonds due 2020 and the issued $300 million 6.5 percent rated bonds due 2040.        
           
(14)
 Guarantee provided for convertible bonds  736   735 
           
  AngloGold Ashanti Limited has fully and unconditionally guaranteed all payments and other obligations of AngloGold Ashanti Holdings Finance plc regarding the issued $732.5 million 3.5 percent convertible bonds due 2014.        
           
(15)
 Guarantee provided for mandatory convertible bonds  791    
           
  AngloGold Ashanti Limited has fully and unconditionally guaranteed all payments and other obligations of AngloGold Ashanti Holdings Finance plc regarding the issued $789 million 6 percent mandatory convertible bonds due 2013.        
           
(16)
 Guarantee provided for term loan facility and revolving credit facility     252 
           
  AngloGold Ashanti Limited, AngloGold Ashanti USA Incorporated and AngloGold Ashanti Australia Limited, as guarantors, had each guaranteed all payments and other obligations of AngloGold Ashanti Holdings plc and the other guarantors under the 2009 Term Facility and the 2009 Revolving Credit Facility. During the second quarter of 2010, the Company repaid the 2009 Term Facility and cancelled the 2009 Revolving Credit Facility.        
           
(17)
 Guarantee provided for syndicated loan facility     1,025 
           
  AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc, AngloGold Ashanti USA Incorporated and AngloGold Ashanti Australia Limited, as guarantors, had each guaranteed all payments and other obligations of the borrowers and the other guarantors under the $1.15 billion syndicated loan facility. During the second quarter of 2010, the Company repaid and cancelled the $1.15 billion syndicated loan facility.        
           
(18)
 Gold delivery guarantees     370 
           
  The Company has issued gold delivery guarantees to several counterpart banks pursuant to which it guarantees the due performance of its subsidiaries AngloGold (USA) Trading Company, AngloGold South America Limited and Cerro Vanguardia S.A. under their respective gold hedging agreements. At December 31, 2010 the Company had no open gold hedge contracts.        
           
(19)
 ATS hedging guarantees     443 
           
  The Company together with its wholly-owned subsidiary AngloGold Ashanti Holdings plc has provided guarantees to several counterpart banks for the hedging commitments of its wholly-owned subsidiary ATS. The maximum potential amount of future payments is all moneys due, owing or incurred by ATS under or pursuant to the hedging agreements. At December 31, 2010 the Company had no open gold hedge contracts.        
(20)
GMC hedging guarantees432
The Company and its wholly-owned subsidiary AngloGold Ashanti Holdings plc have issued hedging guarantees to several counterpart banks in which they have guaranteed the due performance by GMC of its obligations under or pursuant to the hedging agreements entered into by GMC, and to the payment of all money owing or incurred by GMC as and when due. The maximum potential amount of future payments is all moneys due, owing or incurred by GMC under or pursuant to the hedging agreements. At December 31, 2010 the Company had no open gold hedge contracts.

F-56

 

 

     

2012 

$

  

2011 

$

 

 

 

(9)

 

 

Indemnity - Kinross Gold Corporation

  (90)  -
 

As part of the acquisition by AngloGold Ashanti Limited of the remaining 50 percent interest in MSG during June 2012, Kinross Gold Corporation has provided an indemnity to a maximum amount of BRL255 million ($125 million at December 31, 2012 exchange rates) against the specific exposures discussed in items 3 and 4 above.

    

(10)

 

Royalty - Boddington Gold Mine

    
 

As a result of the sale of the interest in the Boddington Gold Mine during 2009, the Company is entitled to receive a royalty on any gold recovered or produced by the Boddington Gold Mine, where the gold price is in excess of Boddington Gold Mine’s cash costs plus $600 per ounce. The royalty is payable in each quarter from and after the second quarter in 2010, within forty five days of reporting period close and is capped at a total of $100 million.

    
 

Details of the royalty are as follows:

    
 

Total royalties recorded to date

  60   42

(11)

 

Royalty - Tau Lekoa Gold Mine

    
 

As a result of the sale of the Tau Lekoa Gold Mine during 2010, the Company is entitled to receive a royalty on the production of a total of 1.5 million ounces by the Tau Lekoa Gold Mine and in the event that the average monthly rand price of gold exceeds R180,000 per kilogram (subject to an inflation adjustment). Where the average monthly rand price of gold does not exceed R180,000 per kilogram (subject to an inflation adjustment), the ounces produced in that quarter do not count towards the total 1.5 million ounces upon which the royalty is payable. The royalty will be determined at 3 percent of the net revenue (being gross revenue less state royalties) generated by the Tau Lekoa assets. Royalties on 304,643 ounces produced have been received to date.

    
 

Royalties received during the year ended December 31

    5

(12)

 

Oro Group surety

  12   12
 

The Company has provided surety in favor of a lender on a gold loan facility with its associate Oro Group (Proprietary) Limited and one of its subsidiaries. The Company has a total maximum liability, in terms of the suretyships, of R100 million. The probability of the non-performance under the suretyships is considered minimal. The suretyship agreements have a termination notice period of 90 days.

    

(13)

 

AngloGold Ashanti USA reclamation bonds

  132   101
 

Pursuant to US environmental and mining requirements, gold mining companies are obligated to close their operations and rehabilitate the lands that they mine in accordance with these requirements. AngloGold Ashanti USA has posted reclamation bonds with various federal and state governmental agencies to cover potential rehabilitation obligations. The Company has provided a guarantee for these obligations which would be payable in the event of AngloGold Ashanti USA not being able to meet its rehabilitation obligations. The obligations will expire upon completion of such rehabilitation and release of such areas by the applicable federal and/or state agency. AngloGold Ashanti is not indemnified by third parties for any of the amounts that may be paid by AngloGold Ashanti under its guarantee.

    

F - 59


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

21.20.

COMMITMENTS AND CONTINGENCIES(continued)

           
    2010 2009
    $ $
 
  Vulnerability from concentrations        
           
  The majority of AngloGold Ashanti’s 62,046 employees (2009: 63,364, 2008: 62,895) are subject to collective bargaining agreements. These agreements are established in negotiations between the Chamber of Mines, the body that represents the gold mining industry in South Africa, and representative groups of labor. The agreements have a two-year validity period. The most recent settlement negotiation was completed in July 2009, when the parties reached an agreement covering the period from July 1, 2009 to June 30, 2011.        
           
  There is a concentration of risk in respect of recoverable value added tax and fuel duties from the Tanzanian government. The outstanding amounts have been discounted to their present value at a rate of 7.82 percent.        
           
  The recoverable value added tax and fuel duties are summarized as follows:        
           
 Recoverable value added tax due to the Company  49   36 
 Recoverable fuel duties due to the Company (1)  62   48 
 (1)  Fuel duty claims are required to be submitted after consumption of the related fuel and are subject to authorization by the Customs and Excise authorities.        

F-57

  

 

      

2012 

$

  

2011 

$

  

 

 

(14)

  

 

AngloGold Ashanti Australia environmental bonds

  52   30
  

Pursuant to Australia environmental and mining requirements, gold mining companies are obligated to close their operations and rehabilitate the lands that they mine in accordance with these requirements. AngloGold Ashanti Australia has posted bonds with state governmental agencies to cover potential rehabilitation obligations. The Company has provided a guarantee for these obligations which would be payable in the event of AngloGold Ashanti Australia not being able to meet its rehabilitation obligations. The obligations will expire upon completion of such rehabilitation and release of such areas by the applicable state agency. AngloGold Ashanti is not indemnified by third parties for any of the amounts that may be paid by AngloGold Ashanti under its guarantee.

    

(15)

  

AngloGold Ashanti environmental guarantees

  162   166
  

Pursuant to South African mining laws, mining companies are obligated to close their operations and rehabilitate the lands that they mine in accordance with these laws. In order to cover against premature closure costs, the Company has secured bank guarantees to cover potential rehabilitation obligations of certain mines in South Africa. The Company has provided a guarantee for these obligations which would be payable in the event of the South African mines not being able to meet such rehabilitation obligations. The obligations will expire upon compliance with all provisions of the environment management program in terms of South African mining laws. AngloGold Ashanti is not indemnified by third parties for any of the amounts that may be paid by AngloGold Ashanti under its guarantee.

    

(16)

  

AngloGold Ashanti Iduapriem environmental guarantees

  32   -
  

Pursuant to Ghanaian mining laws, mining companies are obligated to close their operations and rehabilitate the lands that they mine in accordance with these laws. In order to cover against premature closure costs, AngloGold Ashanti Iduapriem Limited has secured bank guarantees to cover potential rehabilitation obligations for the Iduapriem mine. The obligations will expire upon compliance with all provisions of the environment management program in terms of Ghanaian mining laws. AngloGold Ashanti Iduapriem is not indemnified by third parties for any of the amounts that may be paid by AngloGold Ashanti Iduapriem under its guarantee.

    

(17)

  

Ashanti Goldfields Kilo Sarl environmental guarantees

  10   -
  

Pursuant to the Democratic Republic of Congo (“DRC”) mining laws, mining companies are obligated to close their operations and rehabilitate the lands that they mine in accordance with these laws. In order to cover against premature closure costs, Ashanti Goldfields Kilo Sarl has secured bank guarantees to cover potential rehabilitation obligations for the Mongbwalu project. The obligations will expire upon compliance with all provisions of the environment management program in terms of the DRC mining laws. Ashanti Goldfields Kilo Sarl is not indemnified by third parties for any of the amounts that may be paid by Ashanti Goldfields Kilo Sarl under its guarantee.

    

(18)

  

Guarantee provided for syndicated revolving credit facility

    
  

AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Incorporated, as guarantors, each guaranteed all payments and other obligations of the borrowers and the other guarantors under the $1.0 billion four-year revolving credit facility. This facility was repaid and cancelled during 2012.

    
  

AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Inc., as guarantors, each guaranteed all payments and other obligations of the borrowers and the other guarantors under the $1.0 billion five-year revolving credit facility entered into during July 2012.

    
  

The total amount outstanding under these facilities as at December 31 were:

  -  -

F - 60


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

20.

COMMITMENTS AND CONTINGENCIES(continued)

 

 

     

2012 

$

  

2011 

$

 

 

 

(19)

 

 

Guarantee provided for rated bonds - issued April 2010

  1,011  1,012
 

AngloGold Ashanti Limited has fully and unconditionally guaranteed all payments and other obligations of AngloGold Ashanti Holdings plc regarding the issued $700 million 5.375 percent rated bonds due 2020 and the issued $300 million 6.5 percent rated bonds due 2040.

    

(20)

 

Guarantee provided for rated bonds - issued July 2012

  766  -
 

AngloGold Ashanti Limited has fully and unconditionally guaranteed all payments and other obligations of AngloGold Ashanti Holdings plc regarding the issued $750 million 5.125 percent rated bonds due 2022.

    

(21)

 

Guarantee provided for convertible bonds

  736  736
 

AngloGold Ashanti Limited has fully and unconditionally guaranteed all payments and other obligations of AngloGold Ashanti Holdings Finance plc regarding the issued $732.5 million 3.5 percent convertible bonds due 2014.

    

(22)

 

Guarantee provided for mandatory convertible bonds

  791  791
 

AngloGold Ashanti Limited has fully and unconditionally guaranteed all payments and other obligations of AngloGold Ashanti Holdings Finance plc regarding the issued $789 million 6 percent mandatory convertible bonds due 2013.

    

(23)

 

Guarantee provided for A$ syndicated revolving credit facility

    
 

AngloGold Ashanti Limited together with AngloGold Ashanti Holdings plc, as guarantors, has each guaranteed all payments and other obligations of AngloGold Ashanti Australia Limited under the A$600 million four-year revolving credit facility entered into during December 2011.

    
 

The total amount outstanding under this facility as at December 31 amounted to:

  266  -

(24)

 

Gold delivery - Mine Waste Solutions

  -  -
 

As part of the acquisition by AngloGold Ashanti of First Uranium (Pty) Limited, the owner of Mine Waste Solutions, AngloGold Ashanti agreed to guarantee the observance and performance of existing delivery obligations of a wholly-owned subsidiary of Mine Waste Solutions to sell to an existing customer at a pre-agreed price, 25 percent of the gold produced at a gold recovery plant located in northwest South Africa, subject to a cap of 312,500 ounces over the life of the contract. As at December 31, 2012, 292,672 ounces remain to be delivered against the guarantee over the life of the contract.

    

(25)

 

Gold delivery guarantees

  -  -
 

The Company has issued gold delivery guarantees to several counterpart banks pursuant to which it guarantees the due performance of its subsidiaries AngloGold (USA) Trading Company, AngloGold South America Limited and Cerro Vanguardia S.A. under their respective gold hedging agreements. At December 31, 2012 and 2011 the Company had no open gold hedge contracts.

    

F - 61


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

20.

COMMITMENTS AND CONTINGENCIES(continued)

 

 

     

2012 

$

  

2011 

$

 

 

 

Vulnerability from concentrations

    
 

The majority of AngloGold Ashanti’s 65,822 employees (2011: 61,242, 2010: 62,046) are subject to collective bargaining agreements. In South Africa agreements are established in negotiations between the Chamber of Mines, the body that represents the gold mining industry in South Africa, and representative groups of labor. The agreements have a two-year validity period. The most recent settlement negotiation was completed in August 2011, when the parties reached an agreement covering the period from July 1, 2011 to June 30, 2013.

    
 

There is a concentration of risk in respect of recoverable value added tax, fuel duties and appeal deposits from the Tanzanian government. The outstanding amounts have been discounted to their present value at a rate of 7.82 percent.

    
 

The recoverable value added tax, fuel duties and appeal deposits are summarized as follows:

    
 

Recoverable value added tax

  16  
 

Recoverable fuel duties (1)

  35  
 

Appeal deposits

  4  
 

 

(1)  Fuel duty claims are required to be submitted after consumption of the related fuel and are subject to authorization by the Customs and Excise authorities.

    

F - 62


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

21.

STOCKHOLDERS’ EQUITY

The authorized common stock of the Company is 600,000,000 shares of common stock of 25 ZAR cents each.

22.STOCKHOLDERS’ EQUITY
On May 15, 2009, shareholders approved the increase in the authorized common stock from 400,000,000 shares of common stock to 600,000,000 shares of common stock of 25 ZAR cents each.
  No of shares 

At the annual general meeting of shareholders held on May 7, 2010,10, 2012, shareholders approved, as a general authority, authorization to the board of directors to allot and issue, in their discretion, and for such purpose and on such terms as they may in their discretion determine, up to a maximum of 5 percent of the total number of common stock of 25 ZAR cents each in the issued share capital of the Company from time to time. Shareholders will be asked to renew this authority at the forthcoming annual general meeting to be held on May 11, 2011.13, 2013. At December 31, 2010,2012, the number of shares of common stock placed under the control of the directors, after stock issued pursuant to the equity offering completed in September 2010, amounted to:

  920,20419,166,048 

The Company’s redeemable preference shares, held within the group, consist of the following:

 

A redeemable preference shares issued

  2,000,000 

B redeemable preference shares issued

  778,896 

A and B redeemable preference shares issued which are held by a wholly-owned subsidiary Eastvaal Gold Holdings Limited, may not be transferred and are redeemable from the realization of the assets relating to the Moab Lease area after cessation of mining operations in the area. The shares carry the right to receive dividends equivalent to the profits (net of royalty, ongoing capital expenditure and taxation) from operations in the area. No further A and B redeemable preference shares will be issued.

 

The issues of common stock and the cancellations of E shares of common stock resulted in the following year-on-year movements in share capital and premium:

The issues of common stock and the cancellations of E shares of common stock resulted in the following year-on-year movements in share capital and premium:
                         
      2010      2009      2008 
      Number of      Number of      Number of 
  $  shares  $  shares  $  shares 
 
Stock issued as part of equity offering completed on September 15, 2010  773   18,140,000             
Stock issued on the exercise of options/awards granted in terms of the share incentive scheme  26   823,411   25   1,131,916   14   672,545 
E shares cancelled and stock issued in accordance with the cancellation formula pertaining to the Employee Share Ownership Plan and Izingwe Holdings (1)
  12      3   1,181   3   94 
Stock issued as part of equity offering, the funds of which were applied to initial 35 percent interest in the Kibali gold project        280   7,624,162       
Stock issued as part of rights offer completed on July 11, 2008, the funds of which were applied to reduce the hedge book              1,666   69,470,442 
Stock issued to acquire the remaining 33 percent shareholding in the Cripple Creek & Victor mine from Golden Cycle Gold Corporation              118   3,181,198 
Stock issued to purchase São Bento Gold Company Limited              70   2,701,660 
Stock transferred from the Employee Share Ownership Plan to exiting employees pursuant to the rules of the scheme  10   230,921   7   189,787   2   57,761 
   
   821   19,194,332   315   8,947,046   1,873   76,083,700 
   
                         
(1) E Shares of common stock cancelled — Employee Share Ownership Plan
      708,872       171,943       173,289 
E Shares of common stock cancelled — Izingwe Holdings      280,000               
 

 

 
       2012     2011     2010 
   $   Number of
shares
  $   Number of
shares
  $   Number of
shares
 
 

 

 
 

 

Stock issued as part of equity offering completed on September 15, 2010

  -   -   -   -   773   18,140,000  
 

 

Stock issued on the exercise of options/awards granted in terms of the share incentive scheme

  33   945,641   33   889,593   26   823,411  
 

 

E shares cancelled and stock issued in accordance with the cancellation formula pertaining to the Employee Share Ownership Plan and Izingwe Holdings (1)

  7   132,978   20   99,747   12    
 

 

E Shares of common stock cancelled - Izingwe Holdings

  -   (350,000  -   (70,000  -   (280,000)  
 

 

Stock transferred from the Employee Share Ownership Plan to exiting employees pursuant to the rules of the scheme

  7   172,149   7   156,958   10   230,921  
  

 

 

 
           47   900,768             60   1,076,298           821   18,914,332  
  

 

 

 

(1)

 

E Shares of common stock cancelled - Employee Share Ownership Plan

   615,210    922,328    708,872  

F-58

F - 63


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

22.

FAIR VALUE MEASUREMENTS

The FASB ASC guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

23.

Level 1

 FAIR VALUE MEASUREMENTS
The FASB ASC guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
Level 1 - 

Quoted prices in active markets for identical assets or liabilities.

Level 2

 
Level 2 - 

Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3

 
Level 3 - 

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company utilizes the market approach to measure fair value. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
The following table sets out the Company’s financial assets and (liabilities) measured on a recurring basis at fair value, by level within the hierarchy as at December 31, 2010 (in US Dollars, millions):
Items measured at fair value on a recurring basis
                 
Description Level 1  Level 2  Level 3  Total 
 
Cash and cash equivalents  575           575 
Marketable equity securities  124           124 
Mandatory convertible bonds  (872)          (872)
Warrants on shares      1       1 
Option component of convertible bonds      (176)      (176)
 
The Company’s cash equivalents are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The cash instruments that are valued based on quoted market prices in active markets are primarily money market securities. Due to the short maturity of cash, carrying amounts approximate fair values.
The Company’s marketable equity securities (refer to Note 16) are included in Other long-term assets in the Company’s consolidated balance sheet. They consist of investments in ordinary shares and are valued using quoted market prices in active markets and as such are classified within Level 1 of the fair value hierarchy. The fair value of the marketable equity securities is calculated as the quoted market price of the marketable equity security multiplied by the quantity of shares held by the Company.
The Company’s mandatory convertible bonds (refer to Note 19) are included in Long-term debt at fair value in the Company’s consolidated balance sheet. The bonds are valued using quoted market prices in an active market and as such are classified within Level 1 of the fair value hierarchy. The fair value of the bonds is calculated as the quoted market price of the bond multiplied by the quantity of bonds issued by the Company.
Options associated with marketable equity securities and the conversion features of convertible bonds are included as derivatives on the balance sheet. Such instruments are typically classified within Level 2 of the fair value hierarchy.
The following inputs were used in the valuation of the conversion features of convertible bonds as at December 31:
2010
Market quoted bond price (percent)125.625
Fair value of bond excluding conversion feature (percent)101.600
Fair value of conversion feature (percent)24.025
Total issued bond value ($ million)732.5
The option component of the convertible bonds is calculated as the difference between the price of the bond including the option component (bond price) and the price excluding the option component (bond floor price).

F-59The Company utilizes the market approach to measure fair value. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

The following table sets out the Company’s financial assets and (liabilities) measured on a recurring basis at fair value, by level within the hierarchy as at December 31, 2012 (in US Dollars, millions):

Items measured at fair value on a recurring basis

 

        

 

Description Level 1 Level 2 Level 3 Total

 

Cash and cash equivalents

 892    892 

Marketable and non-marketable equity securities

 69    71 

Mandatory convertible bonds

 (588)   (588)

Embedded derivatives

  (1)  (1)

Option component of convertible bonds

  (9)  (9)

 

The Company’s cash equivalents are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The cash instruments that are valued based on quoted market prices in active markets are primarily money market securities. Due to the short maturity of cash, carrying amounts approximate fair values.

The Company’s marketable equity securities (see Note 15) are included in Other long-term assets in the Company’s consolidated balance sheet. They consist of investments in ordinary shares and collective investment schemes and are valued using quoted market prices in active markets and as such are classified within Level 1 of the fair value hierarchy. The fair value of the marketable equity securities is calculated as the quoted market price of the marketable equity security multiplied by the quantity of shares held by the Company.

The Company’s non-marketable equity securities (see Note 15) are included in Other long-term assets in the Company’s consolidated balance sheet. They consist of investments in ordinary shares and were valued using the issue price obtained in a private equity raising which was completed during December 2012.

The Company’s mandatory convertible bonds (see Note 18) are included in debt at fair value in the Company’s consolidated balance sheet. The bonds are valued using quoted market prices in an active market and as such are classified within Level 1 of the fair value hierarchy. The fair value of the bonds is calculated as the quoted market price of the bond multiplied by the quantity of bonds issued by the Company.

Embedded derivatives and the conversion features of convertible bonds are included as derivatives on the balance sheet. Such instruments are classified within Level 2 of the fair value hierarchy.

F - 64


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

23.22.

FAIR VALUE MEASUREMENTS(continued)

The following inputs were used in the valuation of the conversion features of convertible bonds as at December 31:

 
  2012 

Market quoted bond price (percent)

103.9 

Fair value of bond excluding conversion feature (percent)

102.6 

Fair value of conversion feature (percent)

1.3 

Total issued bond value ($ million)

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).

An independent service provider pricing formation was used in the valuation of the option component of convertible bonds. The Company has internal controls in place to evaluate the observable market information used in calculating the bond floor price by the pricing service. In recalculating the bond floor price the Company evaluated that the pricing information obtained was accurate and complete. No adjustments were made to prices obtained from the independent pricing service.

Items measured at fair value on a non-recurring basis
 

 
  2010

2012 

$

 
$

 

During 2010, the Company fully impaired2012, long-lived assets held and wrote-off various assetsused in South Africa, Continental Africa and the Americas, amongst others. This resultedwith a carrying amount of $74 million were written down to fair value of $32 million, resulting in a loss, which is included in earnings for the period, of:

  8342 
Long-lived assets of Tau Lekoa

The following estimates and assumptions were written downused by management to estimate fair value less costsusing the income approach:

•       the gold price assumption represented management’s best estimate of the future price of gold. In arriving at the estimated long-term gold price, management considered all available market information including current prices, historical averages, and forward pricing curves. The long-term gold price of $1,584 per ounce is based on a range of economic and market conditions expected to sellexist over the remaining useful life of the asset;

•       proven and probable ore reserves as well as value beyond proven and probable reserves estimates. For these purposes proven and probable ore reserves of approximately 0.4 million ounces as at June 30, 2010. Fair valuesDecember 31, 2012 were determined;

•       the real pre-tax discount rate of these assets13 percent is commensurate with the risks involved which is consistent with the basis used in 2011. The risk factors considered were country risk which was based on the Company’s internal assessment of country risk relative to the issues experienced in South Africa;

•       foreign currency cash flows were translated at estimated forward exchange rates and then discounted using appropriate discount rates for that currency; and

•       cash flows used in fair value valuations were based on sales agreements with third partiesthe life of mine plan.

During 2012, the Company fully impaired and as such are classified within Level 2 of the fair value hierarchy.wrote-off certain assets mainly in South Africa and Continental Africa. This resulted in a loss, which is included in earnings for the period, of:

  8325 
Tau Lekoa was sold during the third quarter of 2010.

See “Note 5 - Costs and expenses: Impairment of assets” for additional information.

 

In 2010,2012, the Company fully impaired its equity method investments in the Margaret Water Company and AGA — Polymetal Strategic Alliance. ReferSociété d’Exploitation des Mines d’Or de Yatela S.A. In addition, the Company fully impaired the loan granted to Thani Ashanti Alliance Limited. See Note 16.15. This resulted in a loss, which is included in equity income in associates, of:

  2445 

The above items are summarized as follows:

The above items are summarized as follows:
                    
 Total 
 Fair value Level 1 Level 2 Level 3 gain/(loss) 

 
Description $ $ $ $ $  Fair value
$
 Level 1
$
 Level 2
$
 Level 3
$
 

 

Total
gain/(loss)
$

 

 

Long-lived assets held and used

  32    32    (42)  
Long-lived assets abandoned   (83)  -      (325)  
Long-lived assets held for sale 61 61  (8)
Associates and equity accounted joint ventures   (24)  -      (45)  
   

 

 

 
 61  61   (115)  32   -   32   -   (412)  
   

 

 

 

F-60

F - 65


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

24.23.

FINANCIAL RISK MANAGEMENT ACTIVITIES

In the normal course of its operations, the Company is exposed to gold and other commodity price, currency, interest rate, equity price, liquidity and non-performance risk, which includes credit risk. The Company is also exposed to certain by-product commodity price risk. In order to manage these risks, the Company may enter into transactions which make use of derivatives. The Company has developed a risk management process to facilitate, control and monitor these risks. The board has approved and monitors this risk management process, inclusive of documented treasury policies, counterpart limits, controlling and reporting structures. The Company does not acquire, hold or issue derivatives for speculative purposes. Although all derivative transactions executed by the Company serve to economically manage the Company’s risk to the market factors discussed above, not all such derivatives qualify for hedge accounting treatment, including instances whereby management has elected to not designate such derivatives as part of a qualifying hedge accounting relationship.
The financial risk management activities objectives of the Company are as follows:

In the normal course of its operations, the Company is exposed to gold and other commodity price, currency, interest rate, equity price, liquidity and non-performance risk, which includes credit risk. The Company is also exposed to certain by-product commodity price risk. In order to manage these risks, the Company may enter into transactions which make use of derivatives. The Company has developed a risk management process to facilitate, control and monitor these risks. The Audit and Corporate Governance Committee has approved and monitors this risk management process, inclusive of documented treasury policies, counterpart limits, controlling and reporting structures. The Company does not acquire, hold or issue derivatives for speculative purposes. Although all derivative transactions executed by the Company serve to economically manage the Company’s risk to the market factors discussed above, not all such derivatives qualify for hedge accounting treatment, including instances whereby management has elected to not designate such derivatives as part of a qualifying hedge accounting relationship.

The financial risk management activities objectives of the Company are as follows:

Safeguarding the Company’s core earnings stream through the effective control and management of gold and other commodity price risk, foreign exchange risk and interest rate risk;

Safeguarding the Company’s core earnings stream through the effective control and management of gold and other commodity price risk, foreign exchange risk and interest rate risk;
Effective and efficient usage of credit facilities through the adoption of liquidity planning procedures;
Ensuring that investment and hedging transactions are undertaken with creditworthy counterparts; and
Ensuring that contracts and agreements related to risk management activities are coordinated, consistent throughout the Company and comply where necessary with relevant regulatory and statutory requirements.

Effective and efficient usage of credit facilities through the adoption of liquidity planning procedures;

A number of products, including derivatives are used to satisfy these objectives. Contracts that meet the criteria for hedge accounting are designated as the hedging instruments hedging the variability of forecasted cash flows from the sale of production into the spot market and from capital expenditure denominated in a foreign currency and are classified as cash flow hedges under the FASB ASC guidance on derivatives and hedging. Cash flows related to these instruments designated as qualifying hedges are reflected in the consolidated statement of cash flows in the same category as the cash flow from the items being hedged. Accordingly, cash flows relating to the settlement of forward sale commodity derivatives contracts hedging the forecasted sale of production into the spot market as well as the forward sale currency derivative contracts hedging the forecasted capital expenditure, have been reflected upon settlement as a component of operating cash flows. The ineffective portion of cash flow hedges recognized in loss on non-hedge derivatives in the income statement during the year was $nil million (2009: $5 million; 2008: $8 million). The Company does not have any open cash flow hedge contracts relating to product sales or forecasted capital expenditure as at December 31, 2010 (2009: $37 million; 2008: $123 million). Cash flow hedge losses pertaining to capital expenditure of $3 million as at December 31, 2010 (2009: $4 million; 2008: $nil million) are expected to be reclassified from accumulated other comprehensive income and recognized as an adjustment to depreciation expense until 2017.
A loss on non-hedge derivatives of $703 million was recorded in 2010 (2009: $1,452 million; 2008: $258 million). See “Note 5 — Cost and expenses: Non-hedge derivative loss and movement on bonds” for additional information.
Gold price risk management activities
Gold price risk arises from the risk of an adverse effect of current or future earnings resulting from fluctuations in the price of gold. During the year the Company utilized derivatives as part of its hedging of the risk. In order to provide financial exposure to the rising spot price of gold and the potential for enhanced cash-flow generation the Company completed its final tranche of the hedge buy-back program and settled all forward gold and foreign exchange contracts that had been used by the Company in the past to manage those risks. At year end there were no net forward sales contracts (2009: 571kg; 2008: 39,990kg), net call options sold (2009: 120,594kg; 2008: 146,542kg) and net put options sold (2009: 27,071kg; 2008: 16,963kg).
The fair value of early termination options as at December 31, 2010 amounted to $nil million (2009: $nil million; 2008: $498 million) as these options were part of the hedge buy-back effected during July 2009.
The mix of derivative instruments, the volume of production hedged and the tenor of the hedge book is continuously reviewed in light of changes in operational forecasts, market conditions and the Company’s hedging policy as set by the board of directors.

Ensuring that investment and hedging transactions are undertaken with creditworthy counterparts; and

Ensuring that contracts and agreements related to risk management activities are coordinated, consistent throughout the Company and comply where necessary with relevant regulatory and statutory requirements.

F-61A number of products, including derivatives are used to satisfy these objectives. Contracts that meet the criteria for hedge accounting are designated as the hedging instruments hedging the variability of forecasted cash flows from the sale of production into the spot market and from capital expenditure denominated in a foreign currency and are classified as cash flow hedges under the FASB ASC guidance on derivatives and hedging. Cash flows related to these instruments designated as qualifying hedges are reflected in the consolidated statement of cash flows in the same category as the cash flow from the items being hedged. Accordingly, cash flows relating to the settlement of forward sale commodity derivatives contracts hedging the forecasted sale of production into the spot market as well as the forward sale currency derivative contracts hedging the forecasted capital expenditure, have been reflected upon settlement as a component of operating cash flows. Cash flow hedge losses pertaining to capital expenditure of $3 million as at December 31, 2012 (2011: $3 million; 2010: $3 million) are expected to be reclassified from accumulated other comprehensive income and recognized as an adjustment to depreciation expense equally until 2019.

A gain on non-hedge derivatives of $93 million was recorded in 2012 (2011: gain of $83 million; 2010: loss of $703 million). See “Note 5 – Cost and expenses: Non-hedge derivative (gain)/loss and movement on bonds” for additional information.

Gold price risk management activities

Gold price risk arises from the risk of an adverse effect of current or future earnings resulting from fluctuations in the price of gold. The Company eliminated its hedge book during 2010 and has since had full exposure to the spot price of gold.

F - 66


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

24.23.

FINANCIAL RISK MANAGEMENT ACTIVITIES(continued)

Elimination of hedge book
During 2008, the Company communicated a board approved strategy to begin reducing its outstanding gold derivatives position in order to be more exposed to spot gold prices. During 2010, the Company completed the final phase of this strategy and eliminated its gold hedge book. See “Note 5 — Cost and expenses: Non-hedge derivative loss and movement on bonds” for additional information relating to the final 2010 hedge book elimination and the 2008 and 2009 hedge buy-back transactions, including the impact thereof on the 2008, 2009 and 2010 consolidated financial statements.
The results of operations and cash flows for 2008, 2009 and 2010 were adversely impacted given the early cash settlement of non-hedge derivatives and previously designated NPSE contracts with low contracted sales prices, respectively, committed ounces have been fully eliminated as at December 31, 2010 (December 31, 2009: 3.90 million committed ounces; December 31, 2008: 5.99 million committed ounces). The Company now has full exposure to the spot price of gold.
Net delta open hedge position as at December 31, 2010
As at December 31, 2010 the Company had no outstanding commitments against future production as a result of the elimination of the hedge book.
As of December 31, 2009, the hedge book reflected a net delta tonnage position of 3.49 million ounces (108 tonnes).
At December 31, 2009, the marked-to-market value of all derivatives, irrespective of accounting designation, making up the hedge position was negative $2.18 billion based on a gold price of $1,102 per ounce, exchange rates of $1 = R7.4350 and A$1 = $0.8967 and the market interest rates and volatilities prevailing at that date.
These marked-to-market valuations are not predictive of the future value of the hedge position, nor of the future impact on the revenue of the Company. The valuation represents the theoretical cost of exiting all hedge contracts at the time of valuation, at market prices and rates available at that time.
Foreign exchange price risk protection agreements
The Company enters into currency forward exchange and currency option contracts to hedge certain anticipated transactions denominated in foreign currencies. The objective of the Company’s foreign currency hedging activities is to protect the Company from the risk that the eventual cash flows resulting from transactions denominated in US dollars will be adversely affected by changes in exchange rates.
As at December 31, 2010 and 2009, the Company had no open forward exchange or currency option contracts in its currency hedge position.

F-62

Elimination of hedge book

The Company communicated a strategy in prior years to reduce its outstanding gold derivatives position in order to be more exposed to spot gold prices. During 2010, the Company completed the final phase of this strategy and eliminated its gold hedge book.

The results of operations and cash flows for 2010 were adversely impacted given the early cash settlement of non-hedge derivatives and previously designated NPSE contracts with low contracted sales prices, respectively, committed ounces have been fully eliminated as at December 31, 2012 and 2011.

Foreign exchange price risk protection agreements

The Company, from time to time, may enter into currency forward exchange and currency option contracts to hedge certain anticipated transactions denominated in foreign currencies. The objective of the Company’s foreign currency hedging activities is to protect the Company from the risk that the eventual cash flows resulting from transactions denominated in US dollars will be adversely affected by changes in exchange rates.

As at December 31, 2012 and 2011, the Company had no open forward exchange or currency option contracts in its currency hedge position.

Interest rate and liquidity risk

Fluctuations in interest rates impacts interest paid and received on the short-term cash investments and financing activities, giving rise to interest rate risk.

In the ordinary course of business, the Company receives cash from the proceeds of its gold sales and is required to fund working capital requirements. This cash is managed to ensure surplus funds are invested in a manner to achieve market related returns while minimizing risks.

The Company is able to actively source financing at competitive rates. The counterparts are financial and banking institutions and their credit ratings are regularly monitored by the Company.

F - 67


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

24.23.

FINANCIAL RISK MANAGEMENT ACTIVITIES(continued)

Cash and loans advanced maturity profile

Interest rate and liquidity risk
Fluctuations in interest rates impacts interest paid and received on the short-term cash investments and financing activities, giving rise to interest rate risk.
In the ordinary course of business, the Company receives cash from the proceeds of its gold sales and is required to fund working capital requirements. This cash is managed to ensure surplus funds are invested in a manner to achieve market related returns while minimizing risks.
The Company is able to actively source financing at competitive rates. The counterparts are financial and banking institutions and their credit ratings are regularly monitored by the Company.
Cash and loans advanced maturity profile
                                     
      2010  2009 
      Fixed rate      Floating rate      Fixed rate      Floating rate    
      Investment      Investment      Investment      Investment    
      Amount  Effective  Amount  Effective  Amount  Effective  Amount  Effective 
Maturity date Currency  (million)  rate %  (million)  rate %  (million)  rate %  (million)  rate % 
 
All less than one year USD  13   0.20   171   0.19   506   0.29   178   0.13 
  ZAR  969   5.58   57   4.64   1,135   7.03   839   6.38 
  AUD  42   4.45   25   4.44         13   3.52 
  EUR        3   1.00         1   0.50 
  CAD        2   0.20         1   0.08 
  HKD                    1   0.01 
  BRL        30   8.90         152   10.20 
  ARS        2   9.00         4   10.23 
  NAD  102   5.00   207   5.00             
 
Borrowings maturity profile
                                     
          Between  Between       
  Within one year  one and two years  two and five years  After five years  Total 
  Borrowings  Effective  Borrowings  Effective  Borrowings  Effective  Borrowings  Effective  Borrowings 
  Amount  Rate  Amount  Rate  Amount  Rate  Amount  Rate  Amount 
Currency (million)  %  (million)  %  (million)  %  (million)  %  (million) 
 
  $26   4.7   5   5.5   1,560   4.9   994   5.7   2,585 
ZAR  703   6.4         20   9.8   237   9.8   960 
BRL  3   4.7   5   5.1   2   6.0         10 
 
Interest rate risk
                             
          Fixed for between one and three Fixed for greater than three  
  Fixed for less than one yearthree years years years Total
  Borrowings Effective Borrowings Effective Borrowings Effective Borrowings
  Amount Rate Amount Rate Amount Rate amount
Currency (million) % (million) % (million) % (million)
 
  $26   4.7   880   6.0   1,679   4.8   2,585 
ZAR  703   6.4   7   9.8   250   9.8   960 
BRL  3   4.7   7   5.3         10 
 
        2012     2011   
Maturity date  Currency  Fixed rate
investment
amount
(million)
   Effective
rate %
   Floating rate
investment
amount
(million)
   Effective
rate %
   Fixed rate
investment
amount
(million)
   Effective
rate %
   Floating rate
investment
amount
(million)
   Effective
rate %
 

All less than one year

  $   1    2.50    611    0.30    10    0.48    467    0.20 
  ZAR   780    3.55    215    2.10    3,030    5.50    164    3.55 
  AUD   -    -    29    3.00    81    4.65    23    4.45 
  BRL   -    -    34    7.51    -    -    27    6.61 
  ARS   -    -    73    15.00    -    -    1    10.23 
   NAD   -    -    2    4.30    -    -    119    4.08 

F-63Borrowings maturity profile

                                                                                                                              

 

 
       Between   Between         
   Within one year           one and two years                   two and five years           After five years   Total 
Currency             

 

Borrowings
amount
(million)

   

Effective
rate

%

   Borrowings
amount
(million)
   

Effective
rate

%

   Borrowings
amount
(million)
   

Effective
rate

%

   Borrowings
amount
(million)
   

Effective
rate

%

   Borrowings
amount
(million)
 

 

 

$        

   669    5.7    691    3.5    6    2.9    1,741    5.5    3,107  

ZAR        

   1,521    5.7    8    9.8    59    9.8    186    9.8    1,774  

BRL        

   4    9.3    2    5.8    -    -    2    4.5     

NAD        

   68    8.4    84    8.4    34    8.4    -    -    186  

AUD        

   -    -    -    -    256    5.1    -    -    256  

 

 

Interest rate risk

 

 
   Fixed for less than one year   

 

Fixed for between one and three
years

   Fixed for greater than three years   Total 
Currency             

 

Borrowings

amount

(million)

   

Effective

rate

%

   

Borrowings

amount

(million)

   

Effective

rate

%

   

Borrowings

amount

(million)

   

Effective

rate

%

   

Borrowings

amount

(million)

 

 

 

$        

   669    5.7    693    3.5    1,745    5.4    3,107  

ZAR        

   1,521    5.7    25    9.8    228    9.8    1,774  

BRL        

   4    9.3    2    5.8    2    4.5     

NAD        

   68    8.4    118    8.4    -    -    186  

AUD        

   -    -    256    5.1    -    -    256  

 

 

Non-performance risk

Realization of contracts is dependent upon counterparts’ performance. The Company has not obtained collateral or other security to support the financial instruments subject to non-performance risk, but the credit standing of counterparts was monitored on a regular basis throughout the year. The Company spreads its business over a number of financial and banking institutions to minimize the risk of potential non-performance risk. Furthermore, the approval process of counterparts and the limits applied to each counterpart were monitored by the board of directors. Where possible, ISDA netting agreements were put in place.

The combined maximum credit risk exposure at balance sheet date amounts to $183 million (2011: $198 million). Credit risk exposure netted by open derivative positions with counterparts was $nil million (2011: $nil million). No set-off is applied to balance sheet amounts due to the different maturity profiles of assets and liabilities.

F - 68


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

24.23.

FINANCIAL RISK MANAGEMENT ACTIVITIES(continued)

Non-performance risk
Realization of contracts is dependent upon counterparts’ performance. The Company has not obtained collateral or other security to support to financial instruments subject to non-performance risk, but the credit standing of counterparts was monitored on regular basis throughout the year. The Company spreads it business over a number of financial and banking institutions to minimize the risk of potential non-performance risk. Furthermore, the approval process of counterparts and the limits applied to each counterpart were monitored by the board of directors. Where possible, ISDA netting agreements were put into place by management.
The combined maximum credit risk exposure at balance sheet date amounts to $1 million (2009: $335 million). Credit risk exposure netted by open derivative positions with counterparts was $nil million (2009: $104 million). No set-off is applied to balance sheet amounts due to the different maturity profiles of assets and liabilities.
The combined maximum credit risk exposure of the Company as at December 31, 2010 is as follows.

Fair value of financial instruments

The estimated fair values of financial instruments are determined at discrete points in time based on relevant market information. The estimated fair values of the Company’s financial instruments, as measured at December 31, 2012 and 2011, are as follows (assets (liabilities)):

December 31,
2010
$
Warrants on shares1
1
The fair value of derivative assets and liabilities reflects non-performance risk relating to the counterparts and the Company, respectively.
Fair value of financial instruments
The estimated fair values of financial instruments are determined at discrete points in time based on relevant market information. The estimated fair values of the Company’s financial instruments, as measured at December 31, 2010 and 2009, are as follows (assets (liabilities)):
                
 December 31, 2010 December 31, 2009 
 Carrying Carrying   
 amount Fair value amount Fair value 
 $ $ $ $   December 31, 2012   December 31, 2011     
  Carrying
amount
$
   Fair value
$
   Carrying
amount
$
   Fair value    
$    
 
Cash and cash equivalents 575 575 1,100 1,100    892     892     1,112     1,112       
Restricted cash 43 43 65 65    64     64     58     58       
Short-term debt  (135)  (135)  (1,292)  (1,292)   (271)     (271)     (30)     (30)      

Short-term debt at fair value

   (588)     (588)     (2)     (2)      
Long-term debt  (1,730)  (2,059)  (667)  (889)   (2,750)     (2,871)     (1,715)     (1,857)      
Long-term debt at fair value  (872)  (872)              (758)     (758)      
Derivatives  (175)  (175)  (2,366)  (2,366)   (10)     (10)     (93)     (93)      
Marketable equity securities — available for sale 124 124 111 111 
Marketable debt securities — held to maturity 13 14 10 10 
Non-marketable assets — held to maturity 2 2 2 2 
Non-marketable debt securities — held to maturity 89 89 48 48 

Marketable equity securities - available for sale

   69     69     82     82       

Marketable debt securities - held to maturity

       11         11       

Non-marketable equity securities - available for sale

               -       

Non-marketable assets - held to maturity

               2       

Non-marketable debt securities - held to maturity

   86     86     85     85       

F-64The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash restricted for use, cash and cash equivalents and short-term debt

The carrying amounts approximate fair value because of the short-term duration of these instruments.

Long-term debt

The mandatory convertible bonds are carried at fair value. The fair value of the convertible and rated bonds are shown at their quoted market value. Other long-term debt re-prices on a short-term floating rate basis, and accordingly the carrying amount approximates fair value.

Derivatives

The fair value of volatility-based instruments (i.e. options) are estimated based on market prices, volatilities, credit risk and interest rates for the periods under review.

Investments

Marketable equity securities classified as available-for-sale are carried at fair value. Marketable debt securities classified as held to maturity are measured at amortized cost. Non-marketable assets classified as held to maturity are measured at amortized cost. The fair value of marketable debt securities and non-marketable assets has been calculated using market interest rates. Investments in non-marketable debt securities classified as held to maturity are measured at amortized cost. Non-marketable equity securities classified as available for sale are carried at cost or fair value, where fair value can be reliably measured.

F - 69


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

24.23.

FINANCIAL RISK MANAGEMENT ACTIVITIES(continued)

The following is the fair value of the derivative (liabilities)/assets split by accounting designation:

 

 
   December 31, 2012 
   

Liabilities

 

 
   Balance Sheet location  Non-hedge
accounted
   Total 
      $   $ 

 

 

Option component of convertible bonds

  Non-current liabilities - derivatives   (9)     (9)  

Embedded derivatives

  Non-current liabilities - derivatives   (1)     (1)  
  

 

 

Total derivatives

     (10)     (10)  

 

 
      

 

 
   December 31, 2011 
   

Liabilities

 

 
   Balance Sheet location  Non-hedge
accounted
   Total 
      $   $ 

 

 

Option component of convertible bonds

  Non-current liabilities - derivatives   (92)     (92)  

Embedded derivatives

  Non-current liabilities - derivatives   (1)     (1)  
  

 

 

Total derivatives

     (93)     (93)  

 

 

Non-hedge derivative (gain)/loss recognized

 

 
   Year ended December 31, 
                     2012    2011    2010  
  

 

 

 
   $   $   $ 

 

 

Realized(1)

      

Forward sales type agreements - commodity

           377  

Option contracts - commodity

           2,573  

Forward sales agreements - currency

           13  

Option contracts - currency

           (3)  

Interest rate swaps - Gold

           15  
  

 

 

 
           2,975     (2) 

Unrealized (1)

      

Forward sales type agreements - commodity

           (265)  

Option contracts - commodity

           (1,999)  

Interest rate swaps - Gold

           (13)  

Option component of convertible bonds

   (83)     (84)      

Other commodity contracts

   (10)          

Embedded derivatives

           (1)  

Warrants on shares

            
  

 

 

 
   (93)     (83)     (2,272)  
  

 

 

 

Non-hedge derivatives (gain)/loss

   (93)     (83)     703  
  

 

 

 

 (1)The following methods

Realized and assumptions were used to estimateunrealized gains and losses on non-hedge derivatives are included in “Non-hedge derivative (gain)/loss and movement on bonds” in the fair value of each class of financial instrument:income statement.

 (2)Cash restricted for use, cash and cash equivalents and short-term debt
The carrying amounts approximate fair value because

Included $2,698 million loss related to the final tranche of the short-term duration of these instruments.

Long-term debt
The mandatory convertible bonds are carried at fair value. The fair value of the convertible and rated bonds are shown at their quoted market value. Other long-term debt re-prices on a short-term floating rate basis, and accordingly the carrying amount approximates to fair value.
Derivatives
The fair value of volatility-based instruments (i.e. options) are estimated based on market prices, volatilities, credit risk and interest rates for the periods under review. The Company used the Black-Scholes option pricing formula to value commodity option contracts. The fair value of forward sales and purchases were estimated based on the quoted market prices and credit risk for the contracts at December 31, 2009.
Investments
Marketable equity securities classified as available-for-sale are carried at fair value. Marketable debt securities classified as held to maturity are measured at amortized cost. Non-marketable assets classified as held to maturity are measured at amortized cost. The fair value of marketable debt securities and non-marketable assets has been calculated using market interest rates. Investments in non-marketable debt securities classified as held to maturity are measured at amortized cost. The cost method investment is carried at cost. There is no active market for the investment and the fair value cannot be reliably measured.
The following is the fair value of the derivative (liabilities)/assets split by accounting designation:accelerated hedge buy-back executed during 2010.

                 
  December 31, 2010 
  Assets 
      Cash flow       
      Hedge  Non-hedge    
  Balance Sheet location  accounted  accounted  Total 
      $  $  $ 
 
Warrants on shares Current assets — derivatives     1   1 
   
Total derivatives         1   1 
 
                 
  December 31, 2010 
  Liabilities 
      Cash flow       
      Hedge  Non-hedge    
  Balance Sheet location  accounted  accounted  Total 
      $  $  $ 
 
Option component of convertible bonds Non-current liabilities — derivatives     (176)  (176)
   
Total derivatives         (176)  (176)
 

F-65

F - 70


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

24.23.

FINANCIAL RISK MANAGEMENT ACTIVITIES(continued)

Other comprehensive income

                 
  December 31, 2009 
  Assets 
      Cash flow       
      Hedge  Non-hedge    
  Balance Sheet location  accounted  accounted  Total 
      $  $  $ 
 
Forward sales type agreements — commodity Current assets — derivatives     283   283 
Option contracts — commodity Current assets — derivatives     47   47 
   
Total hedging contracts         330   330 
Warrants on shares Non-current assets — derivatives     5   5 
   
Total derivatives         335   335 
 
                 
  December 31, 2009 
  Liabilities 
      Cash flow       
      Hedge  Non-hedge    
  Balance Sheet location  accounted  accounted  Total 
      $  $  $ 
 
Forward sales type agreements — commodity Current liabilities — derivatives  (37)  (441)  (478)
Option contracts — commodity Current liabilities — derivatives     (2,034)  (2,034)
Interest rate swaps — Gold Current liabilities — derivatives     (13)  (13)
   
Total hedging contracts      (37)  (2,488)  (2,525)
Embedded derivatives Non-current liabilities — derivatives     (1)  (1)
Option component of convertible bonds Non-current liabilities — derivatives     (175)  (175)
   
Total derivatives      (37)  (2,664)  (2,701)
 
At December 31, 2010 the Company had no open derivative positions in its hedge book. The impact of credit risk adjustment totaled $150 million at December 31, 2009.

 

 
  Accumulated other
comprehensive income
as of January 1, 2012
  Changes in fair
value recognized
in 2012
  Reclassification
adjustments
  

 

Accumulated other
comprehensive income
as of December 31,
2012

 
  $  $  $  $ 

 

 

Derivatives designated as

    

Capital expenditure

  (3)          (3)  
 

 

 

 

Before tax totals

  (3)          (3)  
 

 

 

 

After tax totals

  (2)          (2)  
 

 

 

 
    

 

 
  Accumulated other
comprehensive income
as of January 1, 2011
  Changes in fair
value recognized
in 2011
  Reclassification
adjustments
  

 

Accumulated other
comprehensive income
as of December 31,
2011

 
  $  $  $  $ 

 

 

Derivatives designated as

    

Capital expenditure

  (3)          (3)  
 

 

 

 

Before tax totals

  (3)          (3)  
 

 

 

 

After tax totals

  (2)          (2)  
 

 

 

 

F-66Maturity profile of derivatives, at carrying value

 

 
   

Total

$

      

 

2012

Assets

$

      

Liabilities

$

 

 

 

Amounts to mature within twelve months of balance sheet date

                             -        

Amounts maturing between one and two years

   (9)             (9)  

Amounts maturing between two and five years

                

Amounts to mature thereafter

   (1)             (1)  
  

 

 

 

Total

                   (10)                             (10)  
  

 

 

 
          

 

 
   

Total

$

      

 

2011

Assets

$

      

Liabilities

$

 

 

 

Amounts to mature within twelve months of balance sheet date

                

Amounts maturing between one and two years

                

Amounts maturing between two and five years

   (92)             (92)  

Amounts to mature thereafter

   (1)             (1)  
  

 

 

 

Total

   (93)             (93)  
  

 

 

 

F - 71


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

24.23.

FINANCIAL RISK MANAGEMENT ACTIVITIES(continued)

Sensitivity analysis

Derivatives

The Company monitors the sensitivity of the convertible bonds to changes in its share price.

The following table discloses the approximate sensitivity, in US dollars, of the convertible bonds to the Company’s share price at December 31, 2012 (actual changes in the timing and amount of the following variables may differ from the assumed changes below).

 

 
   2012           
  

 

 

 
   

Change in
            underlying

factor

   Non-hedge
accounted
   Total��change in
fair value
 
       $   $ 

 

 

Convertible bonds

      

AngloGold Ashanti Limited share price ($)

   Spot (+$5)     (14)     (14)  

AngloGold Ashanti Limited share price ($)

   Spot (-$5)          

F - 72


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

23.

FINANCIAL RISK MANAGEMENT ACTIVITIES(continued)

Mandatory convertible bonds

The mandatory convertible bond valuation is primarily linked to the AngloGold Ashanti Limited share price traded on the New York Stock Exchange (NYSE) and fluctuates with reference to the NYSE share price and market interest rates. An increase or decrease of $5 in the AngloGold Ashanti Limited share price will generally impact the value of the mandatory convertible bond liability in a stable interest environment by approximately +$72 million and -$83 million, respectively.

Foreign exchange risk

Foreign exchange risk arises on financial instruments that are denominated in a foreign currency.

The following table discloses the approximate foreign exchange risk sensitivities of debt at December 31, 2012 (actual changes in the timing and amount of the following variables may differ from the assumed changes below).

   Non-hedge derivative gain/(loss) recognized2012
   

Change in
exchange rate

Change in
borrowings

total

$

Debt

ZAR denominated (R/$)

Spot (+R1)(22)

BRL denominated (BRL/$)

Spot (+BRL0.25)

NAD denominated (NAD/$)

Spot (+NAD1)(2)

AUD denominated (AUD/$)

Spot (+AUD0.05)(13)
       
  Year ended December 31, 20102012
   Location of gain/(loss)

Change in income statement
exchange rate

  

Change in
borrowings

total

$

Debt

 
 
Realized

ZAR denominated (R/$)

  Spot (-R1)   28 
Forward sales type agreements — commodityNon-hedge derivative gain/(loss) and movement on bonds

BRL denominated (BRL/$)

  (377)
Option contracts — commodityNon-hedge derivative gain/(loss) and movement on bondsSpot (-BRL0.25)   (2,573)
Forward sales agreements — currencyNon-hedge derivative gain/(loss) and movement on bonds

NAD denominated (NAD/$)

  (13)
Option contracts — currencyNon-hedge derivative gain/(loss) and movement on bondsSpot (-NAD1)   3 
Interest rate swaps — GoldNon-hedge derivative gain/(loss) and movement on bonds

AUD denominated (AUD/$)

  (15Spot (-AUD0.05))14 
       
(2,975)(1)
Unrealized
Forward sales type agreements — commodityNon-hedge derivative gain/(loss) and movement on bonds265
Option contracts — commodityNon-hedge derivative gain/(loss) and movement on bonds1,999
Interest rate swaps — GoldNon-hedge derivative gain/(loss) and movement on bonds13
Option component of convertible bondsNon-hedge derivative gain/(loss) and movement on bonds(1)
Embedded derivativesNon-hedge derivative gain/(loss) and movement on bonds1
Warrants on sharesNon-hedge derivative gain/(loss) and movement on bonds(5)
2,272
Loss on non-hedge derivatives(703)

24.
(1)Includes $2,698 million loss related to the final tranche of the accelerated hedge buy-back.
Non-hedge derivative gain/(loss) recognized
Year ended December 31, 2009
Location of gain/(loss) in income statement$
Realized
Forward sales type agreements — commodityNon-hedge derivative gain/(loss) and movement on bonds(535)
Option contracts — commodityNon-hedge derivative gain/(loss) and movement on bonds(144)
Forward sales agreements — currencyNon-hedge derivative gain/(loss) and movement on bonds107
Option contracts — currencyNon-hedge derivative gain/(loss) and movement on bonds12
Interest rate swaps — GoldNon-hedge derivative gain/(loss) and movement on bonds16
(544)(1)
Unrealized
��
Forward sales type agreements — commodityNon-hedge derivative gain/(loss) and movement on bonds(188)
Option contracts — commodityNon-hedge derivative gain/(loss) and movement on bonds(648)
Forward sales agreements — currencyNon-hedge derivative gain/(loss) and movement on bonds(15)
Option contracts — currencyNon-hedge derivative gain/(loss) and movement on bonds(3)
Interest rate swaps — GoldNon-hedge derivative gain/(loss) and movement on bonds(25)
Option component of convertible bondsNon-hedge derivative gain/(loss) and movement on bonds(33)
Embedded derivativesNon-hedge derivative gain/(loss) and movement on bonds(1)
Warrants on sharesNon-hedge derivative gain/(loss) and movement on bonds5
(908)
Loss on non-hedge derivatives(1,452)
(1)Includes $797 million related to the accelerated hedge buy-back.

ADDITIONAL CASH FLOW INFORMATION

F-67

 

 

 
     

2012

$

     2011
$
     

2010

$

 
 

 

 
 

 

Reported in the consolidated statements of cash flows:

          
 

 

Interest paid

   145       144       115  
 

 

Taxation paid

   507       477       188  
 

 

Non-cash investing and financing items not reported in the consolidated statements of cash flows:

          
 

 

Non cash movements included in Property, plant & equipment

   68       389       302  
 

 

Exercise of share options

   45       51       43  
 

 

Non-cash operating items not reported in the consolidated statements of cash flows:

          
 

 

Foreign exchange gain(1)

         11        

 

(1)

 

 

Foreign exchange gain included in Interest, dividends and other amounts to:

                

F - 73


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

24.25.FINANCIAL RISK MANAGEMENT ACTIVITIES(continued)
Other comprehensive income

PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS

The provision for pension and post-retirement medical funding represents the provision for health care and pension benefits for employees, retired employees and their dependants.

Defined benefit plans

The retirement schemes as at December 31, 2012, 2011 and 2010, consist of the following which reflects the following provision values:

Year ended December 31, 2010
Cash flow
hedges, beforeCash flow hedges removed from
taxequity, before taxHedge ineffectiveness, before tax
$$$
Amount of
Gain/(loss)Location of(gain)/loss
recognized in(gain)/lossreclassified fromAmount of
accumulatedreclassified fromaccumulated other(gain)/loss
otheraccumulated othercomprehensiverecognized
comprehensivecomprehensiveincome intoLocation of (gain)/lossin income
income (effectiveincome into incomeincome (effectiverecognized in income(ineffective
portion)(effective portion)portion)(ineffective portion)portion)
Forward sales type agreements — commodityProduct sales52Non-hedge derivatives gain/ (loss) and movement on bonds
52
Other comprehensive income
                 
  Year ended December 31, 2009 
  Cash flow       
  hedges, before  Cash flow hedges removed from    
  tax  equity,before tax  Hedge ineffectiveness, before tax 
  $    $    $ 
        Amount of      
  Gain/(loss)  Location of (gain)/loss      
  recognized in  (gain)/loss reclassified from    Amount of 
  accumulated  reclassified from accumulated other    (gain)/loss 
  other  accumulated other comprehensive    recognized 
  comprehensive  comprehensive income into  Location of (gain)/loss in income 
  income (effective  income into income income (effective  recognized in income (ineffective 
  portion)  (effective portion) portion)  (ineffective portion) portion) 
 
Forward sales type agreements — commodity           Non-hedge derivatives gain/(loss) and movement on bonds    
  (16) Product sales  137    5 
Forward sales agreements - currency           Non-hedge derivatives gain/(loss) and movement on bonds    
  (1) Depreciation       
              
   (17)    137     5 
              
                                                            

 

 
   

2012 

$

   

2011 

$

   

2010 

$

 

 

 

AngloGold Ashanti Pension Fund liability

   24     23      

Post-retirement medical scheme for AngloGold Ashanti South Africa employees

   183     159     179  

Other defined benefit plans

   14     12     12  
  

 

 

 

Sub total

   221     194     191  

Transferred to other non-current assets. See Note 15.

      

Post-retirement medical scheme for Rand Refinery employees

            

Ashanti retired staff pension plan

            

Short-term portion transferred to other current liabilities. See Note 17.

   (12)     (12)     (14)  
  

 

 

 

Total provision classified as a non-current liability

   209     185     180  
  

 

 

 

F-68South Africa defined benefit pension fund

The plan is evaluated by independent actuaries on an annual basis as at December 31. The valuation as at December 31, 2012 was completed at the beginning of 2013. The most recent statutory valuation effective December 31, 2011 was completed in May 2012. The next statutory valuation will have an effective date no later than December 31, 2014.

All South African pension funds are governed by the Pension Funds Act of 1956 as amended.

F - 74


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
24.FINANCIAL RISK MANAGEMENT ACTIVITIES(continued)
                 
Other comprehensive income  
  Accumulated other          Accumulated other 
  comprehensive income  Changes in fair      comprehensive income 
  as of January 1,  value recognized  Reclassification  as of December 31, 
  2010  in 2010  adjustments  2010 
  $  $  $  $ 
   
Derivatives designated as                
Gold sales  (52)     52    
Capital expenditure  (3)        (3)
   
Before tax totals  (55)     52   (3)(1)
   
After tax totals  (22)     20   (2)
   
                 
              Accumulated other 
  Accumulated other  Changes in fair      comprehensive income 
  comprehensive income  value recognized  Reclassification  as of December 31, 
  as of January 1, 2009  in 2009  adjustments  2009 
  $  $  $  $ 
 
Derivatives designated as                
Gold sales  (178)  (16)  142   (52)
Capital expenditure  (2)  (2)  1   (3)
   
Before tax totals  (180)  (18)  143   (55)(1)
   
After tax totals  (112)  (13)  103   (22)
   
(1)Includes adjustment for cumulative net translation differences of $nil million (2009: $18 million) resulting from the revaluation and settlement of non US dollar denominated cash flow hedge contracts.
Maturity profile of derivatives, at carrying value
             
      2010    
  Total  Assets  Liabilities 
  $  $  $ 
 
Amounts to mature within twelve months of balance sheet date  1   1    
Amounts maturing between one and two years         
Amounts maturing between two and five years  (176)     (176)
   
Total  (175)  1   (176)
   
             
  Total  Assets  Liabilities 
  $  $  $ 
 
Amounts to mature within twelve months of balance sheet date  (2,195)  330   (2,525)
Amounts maturing between one and two years  5   5    
Amounts maturing between two and five years  (175)     (175)
Amounts to mature thereafter  (1)     (1)
   
Total  (2,366)  335   (2,701)
   

F-69


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
24.FINANCIAL RISK MANAGEMENT ACTIVITIES(continued)
Sensitivity analysis
Derivatives
A principal part of the Company’s management of risk is to monitor the sensitivity of derivative positions in the hedge book to changes in the underlying factors, including commodity prices, foreign exchange rates and interest rates under varying scenarios. There are no open hedge positions as a result of the hedge book elimination during 2010. Additionally the Company’s management of risk is to monitor the sensitivity of the convertible bonds to changes in AngloGold Ashanti Limited’s share price and warrants on shares.
The following table discloses the approximate sensitivities, in US dollars, of the warrants on shares and the convertible bonds to key underlying factors at December 31, 2010 (actual changes in the timing and amount of the following variables may differ from the assumed changes below).
                 
  2010 
      Cash flow       
  Change in  hedge  Non-hedge  Total change in 
  underlying  accounted  accounted  fair value 
  factor (+)  $  $  $ 
 
Convertible bonds
                
AngloGold Ashanti Limited share price (US$) Spot (+$1)     (10)  (10)
                 
Warrants on shares
                
B2Gold Corporation share price (C$) Spot (+C$0.25)     1   1 
 
                 
  2010 
      Cash flow       
  Change in  hedge  Non-hedge  Total change in 
  underlying  accounted  accounted  fair value 
  factor (-)  $  $  $ 
 
Convertible bonds
                
AngloGold Ashanti Limited share price (US$) Spot (-$1)     9   9 
                 
Warrants on shares
                
B2Gold Corporation share price (C$) Spot (-C$0.25)         
 

F-70


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
24.FINANCIAL RISK MANAGEMENT ACTIVITIES(continued)
Mandatory convertible bonds
The mandatory convertible bond valuation is primarily linked to the AngloGold Ashanti Limited share price traded on the New York Stock Exchange (NYSE) and fluctuates with reference to the NYSE share price and market interest rates. A change of $1 in the AngloGold Ashanti Limited share price will generally impact the value of the mandatory convertible bond price in a stable interest environment by $0.83.
Foreign exchange risk
Foreign exchange risk arises on financial instruments that are denominated in a foreign currency. The following table discloses the approximate foreign exchange risk sensitivities of debt at December 31, 2010 (actual changes in the timing and amount of the following variables may differ from the assumed changes below).
2010
Change in
borrowings
Change intotal
exchange rate$
Debt
ZAR denominated (R/$)Spot (+R1)(19)
BRL denominated (BRL/$)Spot (+BRL0.25)(1)
2010
Change in
borrowings
Change intotal
exchange rate$
Debt
ZAR denominated (R/$)Spot (-R1)26
BRL denominated (BRL/$)Spot (-BRL0.25)1
25.ADDITIONAL CASH FLOW INFORMATION
             
  2010  2009  2008 
  $  $  $ 
 
Reported in the consolidated statements of cash flows:            
             
Interest paid  115   111   93 
Taxation paid  188   147   125 
             
Non-cash investing and financing items not reported in the consolidated statements of cash flows:            
             
Shares issued as part of Golden Cycle Gold Corporation acquisition        118 
Shares issued to acquire São Bento Gold Company Limited        70 
Exercise of share entitlements  43   20   16 
             
Non-cash operating items not reported in the consolidated statements of cash flows:            
             
Foreign exchange transaction gain(1)
  2   103   7 
 
(1)      Foreign exchange transaction gain included in Interest, dividends and other amounts to:
  3   112   4 

F-71


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
26.PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS
The provision for pension and post-retirement medical funding represents the provision for health care and pension benefits for employees, retired employees and their dependants.
Defined benefit plans
The retirement schemes as at December 31, 2010, 2009 and 2008, consist of the following which reflects the following provision values:
             
  2010  2009  2008 
  $  $  $ 
 
AngloGold Ashanti Pension Fund (asset)/liability     (5)  11 
Post-retirement medical scheme for AngloGold Ashanti South Africa employees  179   149   115 
Other defined benefit plans  12   10   11 
   
Sub total
  191   154   137 
Transferred to other non-current assets. Refer to Note 16.            
AngloGold Ashanti Pension Fund     5    
Post-retirement medical scheme for Rand Refinery employees  3   2   2 
Short-term portion transferred to other current liabilities. Refer to Note 18.  (14)  (14)  (13)
   
Total provision classified as a non-current liability
  180   147   126 
   
South Africa defined benefit pension fund
The plan is evaluated by independent actuaries on an annual basis as at December 31. The valuation as at December 31, 2010 was completed at the beginning of 2011. The most recent regulatory valuation effective December 31, 2008 was completed in March 2010. The next regulatory valuation will have an effective date no later than December 31, 2011.
All South African pension funds are governed by the Pension Funds Act of 1956 as amended.

F-72


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
26.

PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS(continued)

Information with respect to the defined benefit fund, which includes benefits for AngloGold Ashanti employees, for the year ended December 31, is set forth in the table below:

Information with respect to the defined benefit fund, which includes benefits for AngloGold Ashanti employees, for the year ended December 31, is set forth in the table below:

             
  Pension benefits 
  2010  2009  2008 
  $  $  $ 
 
Change in benefit obligation
            
Benefit obligation at January 1,  269   199   257 
Service cost  7   6   6 
Interest cost  25   16   17 
Plan participants’ contributions  2   2   2 
Actuarial loss/(gain)  21   (2)  16 
Benefits paid  (28)  (8)  (24)
Translation  38   56   (75)
   
Benefit obligation at December 31,  334   269   199 
   
             
Change in plan assets
            
Fair value of plan assets at January 1,  274   188   293 
Actual return on plan assets  40   32   (7)
Company contributions  8   5   5 
Plan participants’ contributions  2   2   2 
Benefits paid  (28)  (8)  (24)
Translation  38   55   (81)
             
   
Fair value of plan assets at December 31,  334   274   188 
   
             
Funded/(Unfunded) status at end of year     5   (11)
   
Net amount recognized     5   (11)
   
             
Components of net periodic benefit cost
            
Service cost  7   6   6 
Interest cost  25   16   17 
Actuarial gains and losses  10   (14)  49 
Expected return on assets  (29)  (20)  (26)
   
Net periodic benefit cost  13   (12)  46 
   
             
Accumulated benefit obligation at December 31,  290   230   170 
             
Assumptions
            
Weighted-average assumptions used to determine benefit obligations at December 31,
            
Discount rate  8.50%  9.25%  7.25%
Rate of compensation increase  7.25%  7.50%  5.25%
             
Weighted-average assumptions used to determine the net periodic benefit cost for the years ended December 31,
            
Discount rate  8.50%  9.25%  7.25%
Expected long-term return on plan assets  9.99%  10.63%  9.28%
Rate of compensation increase(1)
  7.25%  7.50%  5.25%
Pension increase  4.73%  4.95%  3.60%
 
 
(1)Short-term compensation rate increase
  7.50%  7.00%  10.00%
Long-term compensation rate increase
  7.25%  7.50%  5.25%
                                                                                
 

 

 
     Pension benefits 
     2012    2011    2010  
     $   $   $ 
 

 

 
 Change in benefit obligation      
 Benefit obligation at January 1,   307     334     269  
 Service cost            
 Interest cost   26     25     25  
 Plan participants’ contributions            
 Actuarial loss   22     22     21  
 Benefits paid   (18)     (19)     (28)  
 Translation   (17)     (64)     38  
   

 

 

 
 Benefit obligation at December 31,   328     307     334  
   

 

 

 
 Change in plan assets      
 Fair value of plan assets at January 1,   284     334     274  
 Actual return on plan assets   45     24     40  
 Company contributions            
 Plan participants’ contributions            
 Benefits paid   (18)     (19)     (28)  
 Translation   (15)     (64)     38  
   

 

 

 
 Fair value of plan assets at December 31,   304     284     334  
   

 

 

 
 Unfunded status at end of year   (24)     (23)      
   

 

 

 
 Net amount recognized   (24)     (23)      
   

 

 

 
 Components of net periodic benefit cost      
 Service cost     ��      
 Interest cost   26     25     25  
 Actuarial loss       28     10  
 Expected return on assets   (31)     (30)     (29)  
   

 

 

 
 Net periodic benefit cost   10     30     13  
   

 

 

 
 Accumulated benefit obligation at December 31,   274     269     290  
 Assumptions      
 Weighted-average assumptions used to determine benefit obligations at December 31,      
 Discount rate   8.25%     8.75%     8.50%  
 Rate of compensation increase   8.00%     8.00%     7.25%  
 Weighted-average assumptions used to determine the net periodic benefit cost for the years ended December 31,      
 Discount rate   8.25%     8.75%     8.50%  
 Expected long-term return on plan assets   10.53%     11.20%     9.99%  
 Rate of compensation increase(1)   8.00%     8.00%     7.25%  
 Pension increase   5.40%     5.40%     4.73%  
 

 

 

(1)

 

Short-term compensation rate increase

   5.50%     7.50%     7.50%  
 

Long-term compensation rate increase

   8.00%     8.00%     7.25%  

F-73

F - 75


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

26.25.

PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS(continued)

The expected long-term return on plan assets is determined using the after tax return of RSA Government long bond yields as a guide.

The expected long-term return on plan assets is determined using the after tax return of RSA Government long bond yields as a guide.

         
  Pension benefits 
  2010  2009 
  %  % 
 
Plan assets
        
AngloGold Ashanti’s pension plan asset allocations at December 31, 2010 and 2009, by asset category are as follows:        
         
Asset category
        
Equity securities  60%  60%
Debt securities  36%  32%
Other  4%  8%
   
   100%  100%
   
Fair value of plan assets
The following table sets out the Company’s plan assets measured at fair value, by level within the hierarchy as at December 31, 2010 (in US Dollars, millions):
                 
Description Level 1  Level 2  Level 3  Total 
 
Domestic equity security  150           150 
Foreign equity securities  50           50 
Domestic fixed interest bonds  95           95 
Foreign fixed interest bonds  13           13 
Real estate investment trust  4           4 
Cash  11           11 
Unlisted specialized credit      11       11 
 
Fair value of level 1 plan assets is based on quoted market prices.
Fair value of level 2 plan assets is based on market interest rates (for fixed rate investments) accrued interest and credit risk ratings.
                                                      

 

 
  Pension benefits 
 

 

 

 
  

2012 

%

  

2011 

%

 

 

 

 Plan assets

  

 AngloGold Ashanti’s pension plan asset allocations at December 31, 2012 and 2011, by asset category are as follows:

  

 Asset category

  

 Equity securities

  56%    56%  

 Debt securities

  38%    37%  

 Other

  6%    7%  
 

 

 

 
  100%    100%  
 

 

 

 

F-74Fair value of plan assets

The following table sets out the Company’s plan assets measured at fair value, by level within the hierarchy as at December 31, 2012 (in US Dollars, millions):

                                                                                                            

 

 
Description Level 1  Level 2  Level 3 Total 

 

 

Domestic equity security

  115     115 

Foreign equity securities

  57     57 

Domestic fixed interest bonds

  90     90 

Foreign fixed interest bonds

  15     15 

Real estate investment trust

  3     3 

Cash

  13     13 

Unlisted specialized credit

   11    11 

 

 

The following table sets out the Company’s plan assets measured at fair value, by level within the hierarchy as at December 31, 2011 (in US Dollars, millions):

                                                                                                            

 

 
Description Level 1  Level 2  Level 3 Total 

 

 

Domestic equity security

  106     106 

Foreign equity securities

  54     54 

Domestic fixed interest bonds

  81     81 

Foreign fixed interest bonds

  14     14 

Real estate investment trust

  3     3 

Cash

  16     16 

Unlisted specialized credit

   10    10 

 

 

Fair value of level 1 plan assets is based on quoted market prices.

Fair value of level 2 plan assets is based on market interest rates (for fixed rate investments) accrued interest and credit risk ratings.

F - 76


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

26.25.

PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS(continued)

Investment policy

The Trustees have adopted a long-term horizon in formulating the Fund’s investment strategy, which is consistent with the term of the Fund’s liabilities. The investment strategy aims to provide a reasonable return relative to inflation across a range of market conditions.

The Trustees have adopted different strategic asset allocations for the assets backing pensioner and active member liabilities. The strategic asset allocation defines what proportion of the Fund’s assets should be invested in each major asset class. The Trustees have then selected specialist investment managers to manage the assets in each asset class according to specific performance mandates instituted by the Trustees.

The Trustees have also put in place a detailed Statement of Investment Principles that sets out the Fund’s overall investment philosophy and strategy.

Fund returns are calculated on a monthly basis, and the performance of the managers and Fund as a whole is formally reviewed by the Fund’s Investment Sub-Committee at least every six months.

                                                                                                                        

 

 
   2012   2011 
   

No. of

shares

   Percentage of
total assets
  Fair value
$
   

No. of

shares

   Percentage of
total assets
  Fair value
$
 

 

 
Related parties          

Investments held in related parties are summarized as follows:

          
Equity securities          
AngloGold Ashanti Limited   184,432     1.9%        100,079     1.5%     
     

 

 

      

 

 

 

Other investments exceeding 5% of total plan assets

          
Bonds          
IFM Corporate Bond Unit Trust   271,680,384     11.4%    35     287,226,346     12.7%    36  
Allan Gray Orbis Global Equity Fund   224,509     9.5%    29     242,110     9.5%    27  
Contrarius Global Equity Fund   1,151,413     9.2%    28     1,251,535     9.1%    26  
     

 

 

      

 

 

 
      92        89  
     

 

 

      

 

 

 

Cash flows

 
  Investment policy$
 

Contributions

Expected Company contribution to its pension plan in 2013

  The Trustees have adopted a long-term horizon in formulating the Fund’s investment strategy, which is consistent with the term of the Fund’s liabilities. The investment strategy aims to provide a reasonable return relative to inflation across a range of market conditions.5
 
The Trustees have adopted different strategic asset allocations for the assets backing pensioner and active member liabilities. The strategic asset allocation defines what proportion of the Fund’s assets should be invested in each major asset class. The Trustees have then selected specialist investment managers to manage the assets in each asset class according to specific performance mandates instituted by the Trustees.
The Trustees have also put in place a detailed Statement of Investment Principles that sets out the Fund’s overall investment philosophy and strategy.
Fund returns are calculated on a monthly basis, and the performance of the managers and Fund as a whole is formally reviewed by the Fund’s Investment Sub-Committee at least every six months.

Estimated future benefit payments

The following pension benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:

                         
  2010  2009 
  No. of  Percentage of  Fair Value  No. of  Percentage of  Fair Value 
  Shares  total assets  $  Shares  total assets  $ 
 
Related parties
                        
Investments held in related parties are summarized as follows:                        
                         
Equity securities
                        
AngloGold Ashanti Limited  119,758   1.8%  6   296,410   4.5%  12 
                       
                         
Other investments exceeding 5% of total plan assets
                        
Equities
                        
Sasol Limited           424,680   6.2%  17 
SABMiller Plc           759,600   8.0%  22 
Bonds
                        
IFM Corporate Bond Unit Trust  267,975,059   12.2%  41   158,630,977   7.3%  20 
Allan Gray Orbis Global Equity Fund  243,210   9.0%  30   312,715   13.0%  36 
                       
           71           95 
                       
Cash flows
     
  $ 
 
Contributions
    
Expected Company contribution to its pension plan in 2011  7 
     
Estimated future benefit payments
    
 
The following pension benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:    
 
2011  25 
2012  25 
2013  25 
2014  26 
2015  26 
2016 — 2020  133 

2013

  19  

2014

  20  

2015

  20  

2016

  21  

2017

  21  

2018 – 2022

  117  

F-75

F - 77


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

26.25.

PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS(continued)

South Africa post-retirement medical benefits

The provision for post-retirement medical funding represents the provision for health care benefits for employees and retired employees and their registered dependants. The post-retirement benefit costs are assessed in accordance with the advice of independent professionally qualified actuaries. The actuarial method used is the projected unit credit funding method. This scheme is unfunded. The last actuarial valuation was performed at December 31, 2012.

Information with respect to the defined benefit liability, which includes post-retirement medical benefits for AngloGold Ashanti South Africa employees, for the year ended December 31, is set forth in the table below:

                                                                                
 

 

 
     Other benefits 
   

 

 

 
     

2012 

$

   

2011 

$

   

2010 

$

 
 

 

 
 

Change in benefit obligation

      
 

Benefit obligation at January 1,

   159     179     149  
 

Service cost

            
 

Recognition of past service cost

   22          
 

Interest cost

   13     13     13  
 

Benefits paid

   (15)     (13)     (14)  
 

Actuarial loss

   11     11     10  
 

Translation

   (8)     (32)     20  
   

 

 

 
 

Benefit obligation at December 31,

   183     159     179  
   

 

 

 
 

Unfunded status at end of year

   (183)     (159)     (179)  
   

 

 

 
 

Net amount recognized

   (183)     (159)     (179)  
   

 

 

 
 

Components of net periodic benefit cost

      
 

Service cost

            
 

Recognition of past service cost (1)

   22          
 

Interest cost

   13     13     13  
 

Actuarial loss

   11     11     10  
   

 

 

 
    47     25     24  
   

 

 

 

(1)

 

Revision of the Company contributions towards health care benefits to align with medical inflation.

  

 

The assumptions used in calculating the above amounts are:

      
 

Discount rate

   7.75%     8.75%     8.50%  
 

Expected increase in health care costs

   7.00%     7.50%     7.60%  
 

Assumed health care cost trend rates at December 31,

      
 

Health care cost trend assumed for next year

   7.00%     7.50%     7.60%  
 

Rate to which the cost trend is assumed to decline (ultimate trend rate)

   7.00%     7.50%     7.60%  
 Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. A one percentage-point change in assumed health care cost trend rates would have the following effect:      

  1-percentage point
increase
  1-percentage point
decrease
 
 

 

 

 

Effect on total service and interest cost

  1   (1)  

Effect on post-retirement benefit obligation

  5   (16)  

Cash flows

 
  South Africa$

Contributions

Expected Company contributions to the post-retirement medical benefitsplan in 2013

  The provision for post-retirement medical funding represents the provision for health care benefits for employees and retired employees and their registered dependants. The post-retirement benefit costs are assessed in accordance with the advice of independent professionally qualified actuaries. The actuarial method used is the projected unit credit funding method. This scheme is unfunded. The last actuarial valuation was performed at December 31, 2010.12 
 
Information with respect to the defined benefit liability, which includes post-retirement medical benefits for AngloGold Ashanti South Africa employees, for the year ended December 31, is set forth in the table below:

Estimated future benefit payments

The following medical benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:

             
  Other benefits 
  2010  2009  2008 
  $  $  $ 
 
Change in benefit obligation
            
Benefit obligation at January 1,  149   115   168 
Service cost  1      1 
Interest cost  13   9   11 
Benefits paid  (14)  (10)  (11)
Actuarial loss/(gain)  10   4   (8)
Translation  20   31   (46)
   
Benefit obligation at December 31,  179   149   115 
   
Unfunded status at end of year  (179)  (149)  (115)
   
Net amount recognized  (179)  (149)  (115)
   
             
Components of net periodic benefit cost
            
Service cost  1      1 
Interest cost  13   9   11 
Actuarial gains and losses  10   4   (8)
   
   24   13   4 
   
             
The assumptions used in calculating the above amounts are:
            
Discount rate  8.50%  9.25%  7.25%
Expected increase in health care costs  7.60%  7.00%  5.50%
             
Assumed health care cost trend rates at December 31,            
Health care cost trend assumed for next year  7.60%  7.00%  5.50%
Rate to which the cost trend is assumed to decline (ultimate trend rate)  7.60%  7.00%  5.50%
             
Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. A one percentage-point change in assumed health care cost trend rates would have the following effect:            
         
  1-percentage point  1-percentage point 
  increase  decrease 
   
Effect on total service and interest cost  2   (2)
Effect on post-retirement benefit obligation  22   (19)
     
Cash flows $ 
 
Contributions
    
Expected Company contributions to the post-retirement medical plan in 2011  14 
     
Estimated future benefit payments
    
 
The following medical benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:    
 
2011  14 
2012  16 
2013  16 
2014  16 
2015  16 
2016 — 2020  85 

2013

  12  

2014

  13  

2015

  14  

2016

  15  

2017

  15  

2018 – 2022

  81  

F-76

F - 78


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

26.25.

PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS(continued)

Other defined benefit plans
Other defined benefit plans include the Ashanti Retired Staff Pension Plan, the Obuasi Mines Staff Pension Scheme, the Post-retirement medical scheme for Rand Refinery employees, the Retiree Medical Plan for the United States of America employees, the Supplemental Employee Retirement Plan for North America (USA) Inc. employees and the Nuclear Fuels South Africa (NUFCOR) — Retiree Medical Plan for Nufcor South African employees.
Information in respect of other defined benefit plans for the years ended December 31, 2010, 2009 and 2008 have been aggregated in the tables of change in benefit obligations, change in plan assets and components of net periodic benefit cost as follows:
Aggregated information in respect of the other defined benefit plans, for the year ended December 31, is set forth in the table below:

Other defined benefit plans

Other defined benefit plans include the Ashanti Retired Staff Pension Plan, the Obuasi Mines Staff Pension Scheme, the Post-retirement medical scheme for Rand Refinery employees (partly disposed of in December 2012), the Retiree Medical Plan for the United States of America employees, the Supplemental Employee Retirement Plan for North America (USA) Inc. employees and the Nuclear Fuels South Africa (“NUFCOR”) – Retiree Medical Plan for Nufcor South African employees.

Information in respect of other defined benefit plans for the years ended December 31, 2012, 2011 and 2010 have been aggregated in the tables of change in benefit obligations, change in plan assets and components of net periodic benefit cost as follows:

Aggregated information in respect of the other defined benefit plans, for the year ended December 31, is set forth in the table below:

             
  2010  2009  2008 
  $  $  $ 
 
Change in benefit obligations
            
Balance at January 1,  18   17   18 
Interest cost  1       
Actuarial loss  5       
Benefits paid  (2)  (1)  (1)
Translation     2    
   
Balance at December 31,  22   18   17 
   
             
Change in plan assets
            
Fair value of plan assets at January 1,  8   6   9 
Actual return on plan assets  2      (1)
Benefits paid  (1)      
Translation  1   2   (2)
   
Fair value of plan assets at December 31,  10   8   6 
   
             
Unfunded status at end of year  (12)  (10)  (11)
   
Net amount recognized  (12)  (10)  (11)
   
Components of net periodic benefit cost
            
Interest cost  1       
Actuarial gains and losses  (1)     1 
   
         1 
   
Accumulated benefit obligation at December 31,  12   10   10 
Cash flows
The other retirement defined benefit plans are all closed to new members and current members are either retired or deferred members. The Company does not make a contribution to these plans.
     
  $ 
 
Estimated future benefit payments
    
 
The following pension benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:    
 
2011  2 
2012  2 
2013  2 
2014  2 
2015  2 
2016 — 2020  8 
                                                            

 

 
  

2012 

$

  

2011 

$

  

2010 

$

 

 

 

Change in benefit obligations

   

Balance at January 1,

  21    22    18  

Interest cost

         

Actuarial loss

         

Disposal of subsidiary

  (2)        

Benefits paid

  (2)    (2)    (2)  

Translation

  (1)        
 

 

 

 

Balance at December 31,

  18    21    22  
 

 

 

 

Change in plan assets

   

Fair value of plan assets at January 1,

     10     

Actual return on plan assets

         

Disposal of subsidiary

  (4)        

Benefits paid

        (1)  

Translation

  (1)    (2)     
 

 

 

 

Fair value of plan assets at December 31,

��       10  
 

 

 

 

Unfunded status at end of year

  (14)    (12)    (12)  
 

 

 

 

Net amount recognized

  (14)    (12)    (12)  
 

 

 

 

Components of net periodic benefit cost

   

Interest cost

         

Actuarial loss/(gain)

     (1)    (1)  
 

 

 

 
         
 

 

 

 

Accumulated benefit obligation at December 31,

  14    12    12  

F-77Cash flows

The other retirement defined benefit plans are all closed to new members and current members are either retired or deferred members. The Company does not make a contribution to these plans.

Estimated future benefit payments

The following pension benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:

 

 
  $ 

 

 

2013

   

2014

   

2015

   

2016

   

2017

   

2018 – 2022

   

F - 79


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

26.25.

PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS(continued)

Defined contribution funds

The following table sets forth the cost of providing retirement benefits.

                                       

 

 
  

2012 

$

  

2011 

$

  

2010 

$

 

 

 

South Africa (1)

  46    48    48  

Continental Africa (2)

   

Ghana

  10        

Guinea

         

Namibia

         

Tanzania

         

Australasia (3)

         

Americas (4)

   

United States of America

         

Brazil

         

Argentina

         

Colombia

         
 

 

 

 
  69    64    64  
 

 

 

 

Contributions to the various retirement schemes are fully expensed during the year.

   

 (1)Defined contribution funds
The following table sets forth the cost of providing retirement benefits.

South Africa

             
  2010  2009  2008 
  $  $  $ 
 
Australia (Sunrise Dam) (1)
  4   4   3 
Namibia (Navachab) (2)
  1   1   1 
Tanzania (Geita) (3)
         
United States of America (Cripple Creek & Victor) (4)
  2   2   2 
Argentina and Brazil (AngloGold Ashanti Córrego do Sitío Mineração, Cerro Vanguardia and Serra Grande) (5)
  4   1   3 
Ghana and Guinea (Iduapriem, Obuasi and Siguiri) (6)
  5   4   4 
South Africa (Great Noligwa, Kopanang, Moab Khotsong, Mponeng, Savuka and TauTona) (7)
  48   41   36 
   
   64   53   49 
   

  Contributions

AngloGold Ashanti Limited’s operations in South Africa (Great Noligwa, Kopanang, Moab Khotsong, Mponeng, Savuka, TauTona, First Uranium SA, Corporate and Other) contribute to various industry-based pension and provident retirement plans which cover substantially all employees and are defined contribution plans. These plans are all funded and the various retirementassets of the schemes are fully expensed duringheld in administrated funds separately from the year.group’s assets.

(2)

Continental Africa

(1) Contributions

AngloGold Ashanti Limited’s mines in Ghana (Iduapriem and Obuasi) contribute to provident plans for their employees which are to various approved superannuation funds for the provision of benefits to employees and their dependants on retirement, disability or death. The fund is a multi-industry national fund with defined contribution arrangements. Contribution ratesplans. The funds are administered by the operation on behalfBoards of employees varies, with minimum contributions meeting compliance requirements under the Superannuation Guarantee legislation. The contributions by the operation are legally enforceable to the extent required by the Superannuation Guarantee legislationTrustees and relevant employment agreements. Contributionsinvest mainly in 2008 included Boddington.Ghana government treasury instruments, fixed term deposits and other investments.

 
(2) Navachab

AngloGold Ashanti Limited’s mine in Guinea (Siguiri) contributes to provident plans for their employees which are defined contribution plans. The funds are administered by Boards of Trustees and invest mainly in Guinea government treasury instruments, fixed term deposits and other investments.

At AngloGold Ashanti Limited’s mine in Namibia (Navachab) the employees are members of a defined contribution provident fund. The fund is administered by the Old Mutual Life Assurance Company (Namibia) Limited. Both the Company and the employees contribute to this fund.

 
(3) Geita

AngloGold Ashanti Limited’s mine in Tanzania (Geita) does not have a retirement scheme for employees. Tanzanian nationals contribute to the National Social Security Fund (NSSF)(“NSSF”) or the Parastatal Provident Fund (PPF)(“PPF”), depending on the employee’s choice, and the Company also makes a contribution on the employee’s behalf to the same fund. On leaving the Company,group, employees may withdraw their contribution from the fund. From July 2005, the Company has set up a supplemental provident fund which is administered by the PPF with membership available to permanent national employees on a voluntary basis. The Company makes no contribution towards any retirement schemes for contracted expatriate employees. The Company contributes to the NSSF on behalf of expatriate employees. On termination of employment the Company may apply for a refund of contributions from the NSSF. The NSSF also administers this fund.

 (3)

Australasia

(4) 

AngloGold Ashanti USALimited’s mines in Australia (Sunrise Dam and Tropicana) contribute to various approved superannuation funds for the provision of benefits to employees and their dependants on retirement, disability or death. The fund is a multi-industry national fund with defined contribution arrangements. Contribution rates by the operation on behalf of employees varies, with minimum contributions meeting compliance requirements under the Superannuation Guarantee legislation. The contributions by the operations are legally enforceable to the extent required by the Superannuation Guarantee legislation and relevant employment agreements.

F - 80


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

25.

PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS(continued)

Defined contribution funds (continued)

(4)

Americas

AngloGold Ashanti Limited’s mine in North America (Cripple Creek & Victor) sponsors a 401(k) savings plan whereby employees may contribute up to 60 percent of their salary, of which up to 5 percent is matched at a rate of 150 percent by AngloGold Ashanti Limited USA.

 
(5) 

AngloGold Ashanti Limited operatesLimited’s mines in Brazil (AngloGold Ashanti Córrego do Sitío Mineração and Serra Grande) operate defined contribution arrangements for their employees in Argentina and Brazil.employees. These arrangements are funded by the operations (basic plan) and operations/employees (optional supplementary plan). A PGBL (PlanoPlano Gerador de Beneficio Livre)Benefício Livre (“PGBL”) fund, similar to the American 401 (k)401(k) type of plan was started in December 2001. Administered by Bradesco PrevidenciaPrevidência e Seguros (which assumes the risk for any eventual actuarial liabilities), this is the only private pension plan sponsored by the Companygroup.

AngloGold Ashanti Limited’s mine in Brazil.Argentina (Cerro Vanguardia) does not have a retirement scheme for employees. Argentine nationals contribute to the obligatory Régimen Previsional Público fund which is administered by the state through the National Administrators of the Social Security (“ANSES”). Employees in Argentina contribute 11 percent of their salaries towards the Argentinean government pension fund. TheRégimen Previsional Público fund and the Company makes a contribution of 17 percent of an employee’s salary on behalf of employees to the same fund.

 
(6) The Company’s mines

AngloGold Ashanti Limited’s operations in Ghana and Guinea contribute to provident plans for their employees which areColombia offer an optional defined contribution plans.plan to their employees. The funds are administered by Boardsemployees can contribute up to 10 percent of Trustees and invested mainly in Ghana and Guinea government treasury instruments, fixed term deposits and other investments.

(7)South Africa contributes to various industry-based pension and provident retirement plans which cover substantially all employees and are defined contribution plans. These plans are all fundedtheir salary and the assetsCompany contributes 50 percent of this amount. On termination of employment the schemes are held in administrated funds separatelyparticipant may apply to withdraw from the Company’s assets.fund.

F-78

F - 81


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

27.26.

SEGMENT AND GEOGRAPHICAL INFORMATION

The Company produces gold as its primary product and does not have distinct divisional segments in terms of principal business activity, but manages its business on the basis of different geographic segments. During 2010, the Company’s Chief Operating Decision Maker, defined as the Executive Management team, changed the basis of segment reporting as a result of a re-alignment of the management reporting structure. Navachab which was previously included with Southern Africa forms part of Continental Africa, and North and South America have been combined into the Americas. Southern Africa (previously South Africa and Navachab) has been renamed to South Africa. The Australasia segment remains unchanged. Where applicable, the corresponding items of segment information for prior periods presented have been restated to reflect this.

The Company produces gold as its primary product and does not have distinct divisional segments in terms of principal business activity, but manages its business on the basis of different geographic segments. This information is consistent with the information used by the Company’s Chief Operating Decision Maker, defined as the Executive Committee, in evaluating operating performance of, and making resource allocation decisions.

                                                                        
 Year ended December 31 

 
 2010 2009 2008  Year ended December 31 
Business segment data $ $ $ 
 

 

 

 
 

2012 

$

 

2011 

$

 

2010 

$

 

 
Revenues
    
Revenues from product sales:    
South Africa 875 1,374 986   2,013    2,561    875  
Continental Africa 1,038 1,242 905   2,609    2,529    1,038  
Australasia 206 291 214   426    385    206  
Americas 571 692 493   1,656    1,487    571  
   

 

 

 
 2,690 3,599 2,598   6,704    6,962    2,690  
Less: Equity method investments included above  (331)  (358)  (186)  (351)    (392)    (331)  
Plus: Loss on realized non-hedge derivatives included above 2,975 543 1,243         2,975  
   

 

 

 
Total revenues from product sales 5,334 3,784 3,655   6,353    6,570    5,334  
   

 

 

 
 
Depreciation and amortization expense
    
South Africa 357 281 256   318    360    357  
Continental Africa 185 207 251   233    223    185  
Australasia 35 38 47   36    42    35  
Americas 152 111 107   217    173    152  
   

 

 

 
 729 637 661   804    798    729  
Less: Equity method investments included above  (9)  (22)  (46)  (10)    (9)    (9)  
   

 

 

 
Total depreciation and amortization expense 720 615 615   794    789    720  
   

 

 

 

F-79

F - 82


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

27.26.

SEGMENT AND GEOGRAPHICAL INFORMATION(continued)

                                                                        
Business segment data Year ended December 31 

 
             Year ended December 31              
 2010 2009 2008  

 

 

 
 $ $ $  

2012 

$

 

2011 

$

 

2010 

$

 

 
Segment income/(loss)
    
South Africa 675 574 480   577    1,021    675  
Continental Africa 493 199  (579)  526    941    493  
Australasia 158  (15)  (22)  82    38    158  
Americas 508 335 240   688    751    508  
Other, including Corporate and Non-gold producing subsidiaries  (179)  (133)  (89)  (253)    (192)    (179)  
   

 

 

 
Total segment income 1,655 960 30   1,620    2,559    1,655  
   

 

 

 
 
The following are included in segment income/(loss):    
 
Interest revenue
    
South Africa 27 30 48   21    28    27  
Continental Africa 3 3 4      14     
Australasia 2 12 3          
Americas 10 8 8   10       10  
Other, including Corporate and Non-gold producing subsidiaries 1 1 3          
   

 

 

 
Total interest revenue 43 54 66   43    52    43  
   

 

 

 
 
Interest expense
    
South Africa 7 4 17          
Continental Africa 7 4 1          
Australasia 1 2 5          
Americas 3 12 10          
Other, including Corporate and Non-gold producing subsidiaries 133 101 39   197    169    133  
   

 

 

 
Total interest expense 151 123 72   213    178    151  
   

 

 

 
 
Equity income/(loss) in associates
 

Equity (loss)/income in associates

   
South Africa  (1)  (2) 2   (2)    (2)    (1)  
Continental Africa 69 102  (139)  66    89    69  

Americas

  (12)        
Other, including Corporate and Non-gold producing subsidiaries  (28)  (12)  (12)  (75)    (28)    (28)  
   

 

 

 
Total equity income/(loss) in associates 40 88  (149)

Total equity (loss)/income in associates

  (23)    59    40  
   

 

 

 
 
Reconciliation of segment income to Net income/(loss) - attributable to AngloGold Ashanti
 
Reconciliation of segment income to Net income - attributable to AngloGold Ashanti   
Segment total 1,655 960 30   1,620    2,559    1,655  
Exploration costs  (206)  (150)  (126)  (388)    (279)    (206)  
General and administrative expenses  (228)  (158)  (136)  (299)    (287)    (228)  
Market development costs  (14)  (10)  (13)  (10)    (9)    (14)  
Non-hedge derivative loss  (786)  (1,452)  (258)
Other operating items    (19)
Taxation (expense)/benefit  (255) 33  (22)
Discontinued operations   23 

Non-hedge derivative gain/(loss) and movement on bonds

  265    196    (786)  

Taxation expense

  (340)    (705)    (255)  
Noncontrolling interests  (54)  (48)  (42)  (19)    (50)    (54)  
   

 

 

 
Net income/(loss) — attributable to AngloGold Ashanti 112  (825)  (563)

Net income - attributable to AngloGold Ashanti

  829    1,425    112  
   

 

 

 

F-80

F - 83


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

27.26.

SEGMENT AND GEOGRAPHICAL INFORMATION(continued)

             
Business segment data Year ended December 31 
  2010  2009  2008 
  $  $  $ 
 
Segment assets
            
South Africa(1)
 3,370   3,354   2,497 
Continental Africa(2)
 4,093   4,055   3,582 
Australasia(3)
  534   496   1,279 
Americas  2,170   2,012   1,717 
Other, including Corporate, and Non-gold producing subsidiaries 221   745   376 
   
Total segment assets  10,388   10,662   9,451 
   
(1)Includes the following which have been classified as assets held for sale:
             
ISS International Limited
  15       
Rand Refinery Limited
  1   1   1 
Tau Lekoa
     73    
(2)Includes an effective 45 percent interest acquired during 2009 in Kibali Goldmines in the Democratic Republic of the Congo.
(3)Included assets held for sale of Boddington of $781 million in 2008.
             
Expenditure for additions to long-lived assets
            
South Africa  430   395   347 
Continental Africa  232   196   260 
Australasia  40   177   439 
Americas  309   257   191 
Other, including Corporate and Non-gold producing subsidiaries  4   2   2 
   
   1,015   1,027   1,239 
Less: Equity method investments included above  (42)  (8)  (7)
   
Total expenditure for additions to long-lived assets  973   1,019   1,232 
   
             
Geographical area data
            
Total revenues
            
South Africa  899   1,395   1,041 
Continental Africa  1,043   1,243   902 
Australasia  208   308   217 
Americas  573   691   508 
Other, including Corporate and Non-gold producing subsidiaries  37   129    
   
   2,760   3,766   2,668 
Less: Equity method investments included above  (333)  (355)  (181)
Plus: Loss on realized non-hedge derivatives included above  2,975   543   1,243 
   
Total revenues  5,402   3,954   3,730 
   
             
Long-lived assets by area
            
South Africa  2,701   2,393   1,832 
Continental Africa(1)
  3,437   3,405   2,954 
Australasia  373   342   294 
Americas  1,808   1,678   1,399 
Other, including Corporate and Non-gold producing subsidiaries  72   86   59 
   
Total long-lived assets  8,391   7,904   6,538 
   
(1)Includes an effective 45 percent interest acquired during 2009 in Kibali Goldmines in the Democratic Republic of the Congo.

F-81

 

                 Year ended December 31             
   

 

     

2012 

$

  

2011 

$

  

2010 

$

 

 

Segment assets

      
 

South Africa(1)(2)

  3,570   2,974   3,370 
 

Continental Africa

  4,752   4,365   4,093 
 

Australasia

  1,007   714   534 
 

Americas

  2,894   2,527   2,170 
 

Other, including Corporate, and Non-gold producing subsidiaries

  879   605   221 
   

 

 

Total segment assets

  13,102   11,185   10,388 
   

 

(1)

 

Includes the following which have been classified as assets held for sale:

 

 

Rand Refinery Limited

      
 

ISS International Limited

      15 
 

On December 3, 2012, the Company disposed of a 5 percent stake in Rand Refinery Limited reducing its shareholding to 48.03 percent.

 

ISS International Limited was classified as held for sale in 2010. The sale was concluded effective February 28, 2011.

(2)

 

Includes the assets of First Uranium (Pty) Limited acquired on July 20, 2012.

 

Expenditure for additions to long-lived assets

      
 

South Africa

  619   549   430 
 

Continental Africa

  712   418   232 
 

Australasia

  355   102   40 
 

Americas

  382   452   309 
 

Other, including Corporate and Non-gold producing subsidiaries

  86     
   

 

   2,154   1,527   1,015 
 

Less: Equity method investments included above

  (303)  (88)  (42)
   

 

 

Total expenditure for additions to long-lived assets

  1,851   1,439   973 
   

 

 

Geographical area data

      
 

Total revenues

      
 

South Africa

  2,056   2,596   899 
 

Continental Africa

  2,617   2,529   1,043 
 

Australasia

  430   389   208 
 

Americas

  1,658   1,499   573 
 

Other, including Corporate and Non-gold producing subsidiaries

  20   17   37 
   

 

   6,781   7,030   2,760 
 

Less: Equity method investments included above

  (353)  (388)  (333)
 

Plus: Loss on realized non-hedge derivatives included above

      2,975 
   

 

 

Total revenues

  6,428   6,642   5,402 
   

 

 

Long-lived assets by area

      
 

South Africa

  3,164   2,360   2,701 
 

Continental Africa

  3,747   3,544   3,437 
 

Australasia

  786   441   373 
 

Americas

  2,316   2,088   1,808 
 

Other, including Corporate and Non-gold producing subsidiaries

  299   121   72 
   

 

 

Total long-lived assets

  10,312   8,554   8,391 
   

 

F - 84


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

27.26.

SEGMENT AND GEOGRAPHICAL INFORMATION(continued)

 

  Year ended December 31
 

 

  

2012 

$

 

2011 

$

 

2010 

$

 

Entity-wide disclosures

   

Revenues(1)

   

South Africa

 2,013  2,561  2,207 

Ghana

 772  802  566 

Tanzania

 906  753  

Brazil

 851  767  599 
             
  Year ended December 31 
  2010  2009  2008 
Business segment data $  $  $ 
 
Entity-wide disclosures
            
Revenues(1)
            
South Africa  2,207   1,665   1,466 
Ghana  566   513   511 
Brazil  599   437     

(1) (1)

Material revenues are attributed to countries based on location of production.

            
Long-lived assets(2)
    
South Africa 2,458 2,176 1,668  2,913  2,151  2,458 
Ghana 1,924 1,887 1,863  1,921  2,034  1,924 
Tanzania 584 
United States of America 719 671  917  810  719 
Brazil 768 689 598  988  950  768 

(2) (2)

Material long-lived assets excluding goodwill and other intangibles, financial instruments and deferred taxation assets.

F-82

F - 85


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

28.27.

ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS

Employee share incentive scheme

At a general meeting held on June 4, 1998, shareholders approved the introduction of the AngloGold Limited Share Incentive Scheme (“Share Incentive Scheme”) for the purpose of providing an incentive to executive directors and senior employees of the Company and its subsidiaries to identify themselves more closely with the fortunes of the Company and also to promote the retention of such employees by giving them an opportunity to acquire shares in the Company. Employees participate in the scheme to the extent that they are granted options and accept them.

At a general meeting held on April 30, 2002, it was approved that the rules of the Share Incentive Scheme be amended to provide for the exercise of options to be based on conditions, related to the performance of the Company, as determined by the directors and which will be objective and specified. An employee would only be able to exercise his options after the date upon which he has received written notification from the directors that the previously specified performance conditions have been fulfilled or waived. The options granted prior to May 1, 2002 remained subject to the conditions under which they were granted. Although there are no automatically convertible unsecured debentures currently in issue under the rules of the Share Incentive Scheme, consequential amendments were approved to the rules of the scheme which effectively made the conversion of debentures subject to the same terms as the exercise of options.

At the annual general meeting held on May 7, 2010, shareholders authorized that 17,000,000 shares may be allocated for the purposes of the scheme. The maximum aggregate number of shares which may be acquired by any one participant in the scheme is 5 percent of the shares attributable to the scheme or 850,000 ordinary shares per employee could be issued in aggregate (2011: 850,000).

Ordinary shares issued in terms of the Share Incentive Scheme shall, subject to the provisions of the Share Incentive Scheme, rankpari passu with issued shares in all respects, including participation in dividends.

Non-executive directors are not eligible for participation in the Share Incentive Scheme.

Total plan employee costs

On December 31, 2012, the Company had four stock based compensation plans which are described below.

Total compensation cost charged against income for these plans were as follows:

    

2012 

$

   

2011 

$

  

2010 

$

 

Compensation cost recognized

   66    54 (1)   59  

 (1)Employee share incentive scheme
At a general meeting held on June 4, 1998, shareholders approved the introduction of the AngloGold Limited Share Incentive Scheme (“Share Incentive Scheme”) for the purpose of providing an incentive to executive directors and senior employees of the Company and its subsidiaries to identify themselves more closely with the fortunes of the Company and also to promote the retention of such employees by giving them an opportunity to acquire shares in the Company. Employees participate in the scheme

Excluded $7 million relating to the extent that they are granted options and accept them.

At a general meeting held on April 30, 2002, it was approved that the rules of the Share Incentive Scheme be amended to provideBlack economic empowerment transaction restructuring costs for the exercise of options to be based on conditions, related to the performance of the Company, as determined by the directors and which will be objective and specified. An employee would only be able to exercise his options after the date upon which he has received written notification from the directors that the previously specified performance conditions have been fulfilled or waived. The options granted prior to May 1, 2002 remained subject to the conditions under which they were granted. Although there are no automatically convertible unsecured debentures currently in issue under the rules of the Share Incentive Scheme, consequential amendments were approved to the rules of the scheme which effectively made the conversion of debentures subject to the same terms as the exercise of options.
At the annual general meeting held on May 7, 2010, shareholders authorized that 17,000,000 shares may be allocated for the purposes of the scheme. Prior to this authorization, the maximum number of shares attributable to the scheme was 2.75 percent of the total number of ordinary shares in issue at any time. The maximum aggregate number of shares which may be acquired by any one participant in the scheme is 5 percent of the shares attributable to the scheme or 850,000 ordinary shares per employee could be issued in aggregate (2009: 498,080)Izingwe during 2011 (see Note 5).
Ordinary shares issued in terms of the Share Incentive Scheme shall, subject to the provisions of the Share Incentive Scheme, rankpari passuwith issued shares in all respects, including participation in dividends.
Non-executive directors are not eligible for participation in the Share Incentive Scheme.
Total plan employee costs
On December 31, 2010, the Company had six stock based compensation plans which are described below.
Total compensation cost charged against income for these plans were as follows:

             
  2010  2009  2008 
  $  $  $ 
 
Compensation cost recognized  59   41   40 

At the year end, the unallocated balance of shares subject to the Share Incentive Scheme amounted to 11,398,904 (2009: 5,501,005)8,528,097 (2011: 10,075,485).

F-83

F - 86


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

28.27.

ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued)

Options
An option may only be granted to an employee to purchase a certain number of shares, specified by the directors, at the option price payable in accordance with the rules of the Share Incentive Scheme.
The Share Incentive Scheme provides for the granting of options based on two separate criteria:

Options

An option may only be granted to an employee to purchase a certain number of shares, specified by the directors, at the option price payable in accordance with the rules of the Share Incentive Scheme.

The Share Incentive Scheme provides for the granting of options based on two separate criteria:

 Ÿ 

Time related options

Time related options may be exercised over a five year period from date of grant, and may be exercised in tranches of 20 percent each in years 2, 3 and 4 and 40 percent in year five.
No further options will be granted under this plan which will terminate on February 1, 2012, being the date on which the last options granted under this plan, may be exercised or will expire.
Resulting from the rights offer made to ordinary shareholders, which was finalized during July 2008, additional options were awarded to existing option holders in terms of the anti-dilution provision of the original grant. As the employees did not receive any benefit in excess of the original grant value, no additional compensation cost was recognized. Approximately one option was awarded for every four held at an exercise price of R194.
A summary of time related options showing movement from the beginning of the year to the end of the year, is presented below:
         
      Weighted- 
      average 
  Options  exercise price 
  (000)  R 
 
Outstanding at January 1, 2010  28   146 
Exercised  (27)  145 
   
Outstanding at December 31, 2010  1   194 
   
Exercisable at December 31, 2010  1   194 
   

Time related options may be exercised over a five year period from date of grant, and may be exercised in tranches of 20 percent each in years 2, 3 and 4 and 40 percent in year five.

No further options will be granted under this plan which terminated on February 1, 2012, being the date on which the last options granted under this plan could have been, exercised or expired.

A summary of the salient features of the time related options is presented below:

    2012    2011   2010 

Total intrinsic value of options outstanding at period end (R millions)

   -    -   -  (1) 

Intrinsic value of options exercised (R millions)

   -    -  (1)   5 

Weighted average remaining contractual term (years)

   -    -  ��1 
             
  2010  2009  2008 
 
Total intrinsic value of options outstanding at period end (R millions)  (1)  5   13 
Intrinsic value of options exercised (R millions)  5   15   15 
Weighted average remaining contractual term (years)  1   1   2 

(1) (1)

Less than R1 million.

There was no income statement charge for 2010, 2009 and 2008, as the total compensation cost was expensed up to date of vesting in 2007.

F-84There was no income statement charge for 2012, 2011 and 2010, as the total compensation cost was expensed up to date of vesting in 2007.

F - 87


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

28.27.

ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued)

 Ÿ 

Performance related options

Performance related options granted vest in full, three years after date of grant, provided that the conditions on which the options were granted, namely related to the performance of the Company (growth in adjusted earnings per share) as determined by the directors, are met. If the performance conditions are not met at the end of the first three year period, then performance is re-tested each year over the ten year life of the option on a rolling three year basis. Options are normally exercisable, subject to satisfaction of the performance conditions, between three and ten years from date of grant.

The performance related options’ compensation expense is fixed at grant date and recorded when it is probable that the performance criteria will be met.

No further performance related options will be granted and all options granted hereunder will terminate on November 1, 2014, being the date on which the last options granted under these criteria may be exercised or will expire.

A summary of performance related options showing movement from the beginning of the year to the end of the year, is presented below:

Performance related options granted vest in full, three years after date of grant, provided that the conditions on which the options were granted, namely related to the performance of the Company (growth in an adjusted earnings per share) as determined by the directors, are met. If the performance conditions are not met at the end of the first three year period, then performance is re-tested each year over the ten year life of the option on a rolling three year basis. Options are normally exercisable, subject to satisfaction of the performance conditions, between three and ten years from date of grant.
The performance related options’ compensation expense is fixed at grant date and recorded when it is probable that the performance criteria will be met.
Resulting from the rights offer made to ordinary shareholders, which was finalized during July 2008, additional options were awarded to existing option holders in terms of the anti-dilution provision of the original grant. As the employees did not receive any benefit in excess of the original grant value, no additional compensation cost was recognized. Approximately one option was awarded for every four held at an exercise price of R194.
No further performance related options will be granted and all options granted hereunder will terminate on November 1, 2014, being the date on which the last options granted under these criteria may be exercised or will expire.
A summary of performance related options showing movement from the beginning of the year to the end of the year, is presented below:
         
      Weighted- 
      average 
      exercise 
  Options  price 
  (000)  R 
 
Outstanding at January 1, 2010  640   241 
Exercised  (244)  240 
Forfeited (terminations)  (4)  288 
   
Outstanding at December 31, 2010  392   242 
   
Exercisable at December 31, 2010  392   242 
   
A summary of the salient features of the performance related options is presented below:
             
  2010  2009  2008 
 
Total intrinsic value of options outstanding at period end (R millions)  33   42   18 
Intrinsic value of options exercised (R millions)  17   49   3 
Weighted average remaining contractual term (years)  3   4   5 
All options which have not been exercised within ten years from the date on which they were granted automatically expire.
There was no income statement charge for 2010, 2009 and 2008, as the total compensation cost was expensed up to date of vesting in 2007.
During 2010, a total of 271,162 common shares were issued under the share incentive scheme in terms of time-based and performance awards.
As at December 31, 2010, there was no unrecognized compensation cost related to unvested stock options.

 

     Options 
(000) 
      

Weighted- 

average 

exercise 

price 

Outstanding at January 1, 2012

    171       232 

Exercised

    (47)     224 

Forfeited (terminations)

    (31)      295 

Outstanding at December 31, 2012

    93       220 

Exercisable at December 31, 2012

    93      220 

F-85A summary of the salient features of the performance related options is presented below:

    2012   2011    2010 

Total intrinsic value of options outstanding at period end (R millions)

   4   19    33 

Intrinsic value of options exercised (R millions)

   3   17    17 

Weighted average remaining contractual term (years)

   2   2    

All options which have not been exercised within ten years from the date on which they were granted automatically expire.

There was no income statement charge for 2012, 2011 and 2010, as the total compensation cost was expensed up to date of vesting in 2007.

During 2012, a total of 47,107 common shares were issued under the share incentive scheme in terms of performance awards.

As at December 31, 2012, there was no unrecognized compensation cost related to unvested stock options.

F - 88


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

28.27.

ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued)

The weighted average of all options outstanding as at December 31, 2010, is as follows:

The weighted average of all options outstanding as at December 31, 2012, is as follows:

                 
  Range of exercise  Quantity of options  Weighted average  Weighted average 
  prices  within range  exercise price  contractual life 
  R  (000)  R  Years 
 
   144 — 211   62   194   2.8 
   212 — 300   331   251   1.3 
 
       393(1)  242   1.4 
 
(1)Represents a total of 641 time related options and 391,932 performance related options outstanding.
No options expired during the year ended December 31, 2010.
Since December 31, 2010 to and including April 30, 2011, 24,822 options (granted in respect of time and performance related options) have been exercised.
Bonus Share Plan (“BSP”) and Long-Term Incentive Plan (“LTIP”)
At the annual general meeting held on April 29, 2005, shareholders approved the introduction of the BSP and LTIP and the discontinuation of the previous share incentive scheme. Options granted under the previous share incentive scheme will remain subject to the conditions under which they were originally granted.
Bonus Share Plan (“BSP”)
The BSP is intended to provide effective incentives to eligible employees. An eligible employee is one who devotes substantially the whole of his working time to the business of the Company, any subsidiary of the Company or a company under the control of AngloGold Ashanti. An award in terms of the BSP may be made at any date at the discretion of the board, the only vesting condition being three years’ service for awards granted prior to 2008. For all BSP awards granted from 2008, 40 percent will vest after one year and the remaining 60 percent will vest after two years. An additional 20 percent of the original award will be granted to employees if the full award remains unexercised after three years. The board is required to determine a BSP award value and this will be converted to a share amount based on the closing price of the Company shares on the JSE on the last business day prior to the date of grant.
During 2010 a total of 468,327 common shares were issued in terms of the BSP rules.
During 2008, additional BSP awards were made to all scheme participants as a result of the rights offer to ordinary shareholders. The award was made in terms of the anti-dilution provision of the original grant. Employees did not receive any benefit in excess of the original grant value and no additional compensation cost was recognized.
For awards made, the following information is presented:
                 
            
            
Award date (unvested awards and awards vested during the year) 2010  2009  2008  2007 
   
Calculated fair value (R per share)  280.90   293.99   267.05   322.00 
Vesting date (100%)          January 1, 2010 
Vesting date (40%) February 24, 2011  February 18, 2010  January 1, 2009    
Vesting date (60%) February 24, 2012  February 18, 2011  January 1, 2010    
Vesting date (conditional 20%) February 24, 2013  February 18, 2012  January 1, 2011    
Expiry date February 23, 2020  February 17, 2019  December 31, 2017  December 31, 2016 
   

Range of exercise

prices

R

  

Quantity of options

within range

(000)

  

Weighted average

exercise price

R

  

Weighted average

contractual life

Years

 
  144 – 211    16   194    1.83 
  212 – 300    77   226    1.83 
       93 (1)   220    1.83 

F-86(1)Represents performance related options outstanding.

No options expired during the year ended December 31, 2012.

Since December 31, 2012 to and including March 31, 2013, 370 options (granted in respect of performance related options) have been exercised.

Bonus Share Plan (“BSP”) and Long-Term Incentive Plan (“LTIP”)

At the annual general meeting held on April 29, 2005, shareholders approved the introduction of the BSP and LTIP and the discontinuation of the previous share incentive scheme. Options granted under the previous share incentive scheme will remain subject to the conditions under which they were originally granted.

Bonus Share Plan (“BSP”)

The BSP is intended to provide effective incentives to eligible employees. An eligible employee is one who devotes substantially the whole of his working time to the business of the Company, any subsidiary of the Company or a company under the control of AngloGold Ashanti unless the board of directors (“the board”) excludes such a company. An award in terms of the BSP may be made at any date at the discretion of the board, the only vesting condition being three years’ service for awards granted prior to 2008. For all BSP awards granted from 2008, 40 percent will vest after one year and the remaining 60 percent will vest after two years. An additional 20 percent of the original award will be granted to employees if the full award remains unexercised after three years. The board is required to determine a BSP award value and this will be converted to a share amount based on the closing price of the Company shares on the JSE on the last business day prior to the date of grant.

During 2012 a total of 558,042 common shares were issued in terms of the BSP rules.

For awards made, the following information is presented:

Award date (unvested awards and awards vested
during the year)
  2012    2011    2010    2009  
Calculated fair value (R per share)   328.59     340.00     280.90     293.99  
Vesting date (40%)   February 21, 2013     February 21, 2012     February 24, 2011     February 18, 2010  
Vesting date (60%)   February 21, 2014     February 21, 2013     February 24, 2012     February 18, 2011  
Vesting date (conditional 20%)   February 21, 2015     February 21, 2014     February 24, 2013     February 18, 2012  
Expiry date   February 20, 2022     February 20, 2021     February 23, 2020     February 17, 2019  

F - 89


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

28.27.

ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued)

A summary of time related equity settled compensation scheme showing movement from the beginning of the year to the end of the year, is presented below:

   A summary of time related equity settled compensation scheme showing movement from the beginning of the year to the end of the year, is presented below:

                Awards

(000)

Awards
(000)

Outstanding at January 1, 20102012

 1,2961,825 

Granted

 812993 

Exercised

 (468)(558)

Forfeited (terminations)

 (88)(104)
 

Outstanding at December 31, 20102012

 1,5522,156 
 

Exercisable at December 31, 20102012

 451881 
 

BSP awards are issued with no exercise price.

A summary of the salient features of the BSP is presented below:

    2012                2011                2010 
Total intrinsic value of awards outstanding at period end (R millions)   566    627    508 

Intrinsic value of awards exercised (R millions)

   163    153    146 

Weighted average remaining contractual term (years)

   6    6    7 

Long-Term Incentive Plan (“LTIP”)

The LTIP is an equity settled share-based payment arrangement, intended to provide effective incentives for executives to earn shares in the Company based on the achievement of stretched Company performance conditions. Participation in the LTIP is offered to executive directors, executive officers/management and selected members of senior management. An award in terms of the LTIP may be granted at any date during the year that the board of the Company determine and may even occur more than once a year. The board is required to determine an LTIP award value and this will be converted to a share amount based on the closing price of the Company shares on the JSE on the last business day prior to the date of grant.

The main performance conditions in terms of the LTIP issued in 2009, 2010, 2011 and 2012 are:

 BSP awards are issued with no exercise price.
Ÿ A summary of the salient features of the BSP is presented below:
             
  2010  2009  2008 
 
Total intrinsic value of awards outstanding at period end (R millions)  508   397   238 
Intrinsic value of awards exercised (R millions)  146   75   28 
Weighted average remaining contractual term (years)  7   7   8 
Long-Term Incentive Plan (“LTIP”)
The LTIP is an equity settled share-based payment arrangement, intended to provide effective incentives for executives to earn shares in the Company based on the achievement of stretched Company performance conditions. Participation in the LTIP will be offered to executive directors, executive officers/management and selected members of senior management. An award in terms of the LTIP may be granted at any date during the year that the board of the Company determine and may even occur more than once a year. The board is required to determine an LTIP award value and this will be converted to a share amount based on the closing price of the Company shares on the JSE on the last business day prior to the date of grant.
The main performance conditions in terms of the LTIP issued in 2007 are:
up to 40 percent of an award will be determined by the performance of total shareholder returns compared with that of a group of comparative gold-producing companies;
up to 30 percent of an award will be determined by an adjusted earnings per share compared to a planned adjusted earnings per share over the performance period;
up to 30 percent of an award will be dependent on the achievement of strategic performance measures which will be set by the Remuneration Committee; and
three year’s service is required.
The main performance conditions in terms of the LTIP issued in 2008, 2009 and 2010 are:

up to 30 percent of an award will be determined by the performance of total shareholder returns compared with that of a group of comparative gold-producing companies;

 Ÿ 

up to 30 percent of an award will be determined by real growth (above US inflation) in adjusted earnings per share over the performance period;

 Ÿ 

up to 40 percent of an award will be dependent on the achievement of strategic performance measures which will be set by the Remuneration Committee; and

 Ÿ 

three-year’s service is required.

During 2010 a total of 84,922 common shares were issued in terms of the LTIP rules.
During 2008, additional LTIP awards were made to all scheme participants as a result of the rights offer to ordinary shareholders. The award was made in terms of the anti-dilution provision of the original grant. Employees did not receive any benefit in excess of the original grant value and no additional compensation cost was recognized.

F-87During 2012, a total of 340,492 common shares were issued in terms of the LTIP rules.

F - 90


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

28.27.

ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued)

For awards made, the following information is presented:

Award date (unvested awards and awards
vested during the year)
  2012   2011   2010   2009 
Calculated fair value (Rand per share)  328.59   340.00   280.90   293.99 
Vesting date  February 21, 2015  February 21, 2014  February 24, 2013  February 18, 2012
Expiry date  February 20, 2022  February 20, 2021  February 23, 2020  February 17, 2019

A summary of time and performance related equity settled compensation scheme showing movement from the beginning of the year to the end of the year, is presented below:

   For awards made, the following information is presented:
                 
            
            
Award date (unvested awards and awards vested during the year) 2010  2009  2008  2007 
   
Calculated fair value (Rand per share)  280.90   293.99   267.05   322.00 
Vesting date February 24, 2013  February 18, 2012  January 1, 2011  January 1, 2010 
Expiry date February 23, 2020  February 17, 2019  December 31, 2017  December 31, 2016 
A summary of time and performance related equity settled compensation scheme showing movement from the beginning of the year to the end of the year, is presented below:

Awards

(000)

Outstanding at January 1, 20102012 1,2641,982 
Granted 632983 
Exercised (85)(340)
Forfeited (terminations) (211)(294)
 

Outstanding at December 31, 20102012 1,6002,331 
 

Exercisable at December 31, 20102012 85251 
 

LTIP awards are issued with no exercise price.

 A summary of the salient features of the LTIP is presented below:

A summary of the salient features of the LTIP is presented below:

            
 2010 2009 2008  2012 2011 2010 
Total intrinsic value of awards outstanding at period end (R millions) 522 387 250  611 681 522 
Intrinsic value of awards exercised (R millions) 26 22 11  99 66 26 
Weighted average remaining contractual term (years) 7 7 8  6 6 

 
Compensation expense related to BSP and LTIP awards recognized ($ millions) 45 27 20  58 42 45 
As at December 31, the unrecognized compensation cost related to unvested awards of the BSP and LTIP plans amounted to ($ millions) 23 18 12  43 27 23 
Unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately (years)
 2 2 2  2 2 

F-88

F - 91


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

28.27.

ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued)

Employee Share Ownership Plan (“ESOP”)
On December 12, 2006, AngloGold Ashanti announced the finalization of the Bokamoso Employee Share Ownership Plan (Bokamoso ESOP) for employees of the South African operations. The Bokamoso ESOP creates an opportunity for AngloGold Ashanti and the unions to ensure a closer alignment of the interest between South African based employees and the Company. Participation is restricted to those employees not eligible for participation in any other South African share incentive plan.
In order to facilitate these transactions the Company established a trust to acquire and administer the ESOP shares. AngloGold Ashanti allotted and issued free ordinary shares to the trust and also created, allotted and issued E ordinary shares to the trust for the benefit of employees. The Company also undertook an empowerment transaction with a Black Economic Empowerment investment vehicle, Izingwe Holdings (Proprietary) Limited (“Izingwe”) during 2006 and created, allotted and issued E ordinary shares to Izingwe. The key terms of the E ordinary share are:

Employee Share Ownership Plan (“ESOP”)

On December 12, 2006, AngloGold Ashanti announced the finalization of the Bokamoso Employee Share Ownership Plan (Bokamoso ESOP) for employees of the South African operations. The Bokamoso ESOP creates an opportunity for AngloGold Ashanti and the unions to ensure a closer alignment of the interest between South African based employees and the Company. Participation is restricted to those employees not eligible for participation in any other South African share incentive plan.

In order to facilitate these transactions the Company established a trust to acquire and administer the ESOP shares. AngloGold Ashanti allotted and issued free ordinary shares to the trust and also created, allotted and issued E ordinary shares to the trust for the benefit of employees. The Company also undertook an empowerment transaction with a Black Economic Empowerment investment vehicle, Izingwe Holdings (Proprietary) Limited (“Izingwe”) during 2006 and created, allotted and issued E ordinary shares to Izingwe. The key terms of the E ordinary share are:

 Ÿ 

AngloGold Ashanti will havehas the right to cancel the E ordinary shares, or a portion of them, in accordance with the ESOP and Izingwe cancellation formula, respectively;

 Ÿ 

the E ordinary shares will not be listed;

 Ÿ 

the E ordinary shares which are not cancelled will be converted into ordinary shares; and

 Ÿ 

the E ordinary shares will each be entitled to receive a cash dividend equal to one-half of the dividend per ordinary share declared by the Company from time to time and a further one-half is included in the calculation of the strike price calculation.price.

On April 14, 2011, AngloGold Ashanti Limited, NUM, Solidarity, UASA, Izingwe and the Bokamoso ESOP Board of Trustees announced the restructuring of the empowerment transactions concluded between the Company and the unions, and the Company and Izingwe respectively in 2006.

This restructuring was motivated by share price performance that since the onset of the 2008 global financial crisis led to a situation where the first two tranches of E ordinary shares vested and lapsed at no additional value to Bokamoso ESOP beneficiaries and Izingwe.

In order to remedy this in a manner that would ensure an element of value accruing to participants, though at a reasonable incremental cost to AngloGold Ashanti Limited shareholders, the scheme was restructured as follows:

 The award of free ordinary shares to employees
Ÿ The fair value of each free ordinary share awarded in 2008 was R188 (2007: R306 and 2006: R320). The fair value is equal to the market value at the date-of-grant. Dividends declared and paid to the trust will accrue and be paid to ESOP members, pro rata to the number of shares allocated to them. An equal number of shares vests from 2009, and each subsequent year up to expiry date of November 1, 2013.
A summary of time related equity settled compensation scheme showing movement from the beginning of the year to the end of the year, is presented below:
Awards
(000)
Outstanding at January 1, 2010��666
Reallocated21
Exercised(231)
Forfeited (terminations)(21)
Outstanding at December 31, 2010435
Exercisable at December 31, 2010
A summary of the salient features of the award of free ordinary shares under ESOP to employees is presented below:
             
  2010  2009  2008 
 
Total intrinsic value of awards outstanding at period end (R millions)  142   204   216 
Intrinsic value of awards exercised (R millions)  72   58   14 
Weighted average remaining contractual term (years)  1   2   3 
The Company awarded the right to acquire approximately one AngloGold Ashanti ordinary share for every four free ordinary shares held in the rights offer finalized during July 2008. The benefit to employees was in terms of the anti-dilutive provision of the original grant and no additional compensation cost was recognized.

F-89


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
28.ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued)
The award of

all lapsed E ordinary shares to the employees:

The average fair value of the E ordinary shares awarded to employees in 2008 was R13 (2007: R79 and 2006: R105) per share. Dividends declared in respect of the E ordinary shares will firstly be allocated to cover administration expenses of the trust, whereafter it will accrue and be paid to ESOP members, pro rata to the number of shares allocated to them. At each anniversary over a five year period commencing on the third anniversary of the original 2006 award, the Company will cancel the relevant number of E ordinary shares as stipulated by a cancellation formula. Any E ordinary shares remaining in the tranche will be converted to ordinary shares for the benefit of the employees. All unexercised awards will be cancelled on May 1, 2014.
The value of each share granted is estimated on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires the input of subjective assumptions, including the expected term of the option award and stock price volatility. These estimates involve inherent uncertainties and the application of management judgment. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those options expected to vest. As a result, if other assumptions had been used, the Company’s recorded compensation expense could have been different from that reported.
The Black-Scholes option-pricing model used the following assumptions, at grant date:
             
  2008  2007  2006 
 
Risk-free interest rate  7.00%  7.00%  7.00%
Dividend yield  1.39%  2.06%  2.30%
Volatility factor of market share price  35.00%  33.00%  36.00%
A summary of E ordinary shares, awarded to employees, showing movement from the beginning of the year to the end of the year, is presented below:
         
      Weighted- 
      average 
  Options  exercise price 
  (000)  R 
   
Outstanding at January 1, 2010  2,395   347 
Reallocated  69   361 
Forfeited (terminations)  (69)  354 
Cancelled  (709)  354 
   
Outstanding at December 31, 2010  1,686   366 
   
Exercisable at December 31, 2010      
   
A summary of the salient features of the award of E ordinary shares to employees is presented below:
             
  2010  2009  2008 
Total intrinsic value of awards outstanding at period end (R millions) (1)
         
Intrinsic value of awards exercised (R millions) (2)
         
Weighted average remaining contractual term (years)
  1   2   3 
 
Compensation expense related to the ESOP scheme recognized ($ millions)
  12   12   14 
As at December 31, the unrecognized compensation cost related to unvested awards of the ESOP scheme amounted to ($ millions)
  8   16   14 
Unrecognized compensation cost is expected to be recognized over the remaining scheme term of (years)  3   4   5 
(1)The options outstanding at December 31, 2010, 2009 and 2008 had no intrinsic value as the share price at year end was lower than the weighted average exercise price.
(2)Less than R1 million.

F-90


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
28.ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued)
Weighted average exercise price is calculated as the initial grant price of R288 plus interest factor less dividend apportionment. This value will change on a monthly basis.
In addition to the above share scheme expenses relating to the Bokamoso ESOP plan, the Company awarded the right to acquire approximately one AngloGold Ashanti ordinary share for every four E ordinary shares held in the rights offer finalized during July 2008. The benefit to employees was in excess of the anti-dilution provision of the original grant and additional compensation cost was recognized. The fair value at grant date of these rights awarded to Bokamoso was calculated at R76 per right. The income statement charge relating to the rights offer to Bokamoso participants was $6 million in 2008. As the rights were issued as fully vested, the expense was recorded immediately.
Cash Settled Share Incentive Scheme
Ghana Employee Share Ownership Plan (“Ghana ESOP”)
A memorandum of understanding was signed with the Ghanaian employees on April 28, 2009 to introduce the Ghana ESOP under defined rules.
In terms of the rules of the scheme, every eligible employee is entitled to 20 AngloGold Ashanti Limited share appreciation rights (“phantom shares”), which will be paid out in four equal tranches, commencing May 2009 and ending in May 2012.
The value of the rights are equal to the value of AngloGold Ashanti Limited American Depositary receipts (“ADR’s”) as listed on the New York Stock Exchange, converted into Ghanaian Cedis at the prevailing US dollar exchange rate.
The share price on the day of issue as of April 29, 2009 was $32.15, whilst the share price used in the payment of the first tranche was $28.46 per share. The share price used in the payment of the second tranche in 2010 was $39.50 per share.
The award of share appreciation rights to employees
A summary of share appreciation rights showing movement from the beginning of the year to the end of the year, is presented below:
Number of Rights
(000)
Outstanding at January 1, 201075
Exercised(25)
Forfeited (terminations)(1)
Rights outstanding at December 31, 201049
Rights exercisable at December 31, 2010
         
  2010  2009 
  $  $ 
 
Compensation expense related to Ghana ESOP scheme recognized ($ millions)  2   2 
The liability recognized in the consolidated balance sheet in respect of unexercised rights was as follows  2   1 

F-91


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
29.SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION
AngloGold Ashanti Holdings plc (“IOMco”), a wholly-owned subsidiary of AngloGold Ashanti, has issued debt securities which are fully and unconditionally guaranteed by AngloGold Ashanti Limited (being the “Guarantor”). Refer to Note 19 and to Note 21. IOMco is an Isle of Man registered company that holds certain of AngloGold Ashanti’s operations and assets located outside South Africa (excluding certain operations and assets in the Americas and Australasia). The following is condensed consolidating financial information for the Company as of December 31, 2010 and 2009 and for the years ended December 31, 2010, 2009 and 2008, with a separate column for each of AngloGold Ashanti Limited as Guarantor, IOMco as Issuer and the other subsidiaries of the Company combined (the “Non-Guarantor Subsidiaries”). For the purposes of the condensed consolidating financial information, the Company carries its investments under the equity method. The following supplemental condensed consolidating financial information should be read in conjunction with the Company’s consolidated financial statements.

F-92


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
29.SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
ANGLOGOLD ASHANTI LIMITED
Condensed consolidating statements of income
FOR THE YEAR ENDED DECEMBER 31,

(In millions)
                     
  2010  2010  2010  2010  2010 
  $  $  $  $  $ 
  AngloGold Ashanti  IOMco  Other subsidiaries  Cons adjustments  Total 
  (the “Guarantor”)  (the “Issuer”)  (the “Non-Guarantor         
          Subsidiaries”)         
Sales and other income
  2,348   (2)  3,233   (177)  5,402 
                
Product sales  2,207      3,127      5,334 
Interest, dividends and other  141   (2)  106   (177)  68 
                
Costs and expenses
  4,130   1,120   2,818   (3,047)  5,021 
                
Production costs  1,091      1,565      2,656 
Exploration costs  14   12   180      206 
Related party transactions  (15)           (15)
General and administrative expenses  164   6   44   14   228 
Royalties paid  38      104      142 
Market development costs  7      7      14 
Depreciation, depletion and amortization  352      368      720 
Impairment of assets  73      18      91 
Interest expense  7   69   75      151 
Accretion expense  10      12      22 
Employment severance costs  19      4      23 
Loss/(profit) on sale of assets, realization of loans, indirect taxes and other  2,041   1,033   (16)  (3,061)  (3)
Non-hedge derivative loss, movement on bonds and other commodity contracts  329      457      786 
                
 
(Loss)/income before income tax provision
  (1,782)  (1,122)  415   2,870   381 
Taxation expense  (1)  (1)  (253)     (255)
Equity income/(loss) in associates  63   (23)        40 
Equity income/(loss) in subsidiaries  1,907   373      (2,280)   
                
Income/(loss) from continuing operations
  187   (773)  162   590   166 
Discontinued operations               
                
Income/(loss) after discontinued operations
  187   (773)  162   590   166 
Preferred stock dividends  (75)     (76)  151    
                
Net income/(loss)
  112   (773)  86   741   166 
Less: Net income attributable to noncontrolling interests        (54)     (54)
                
 
Net income/(loss) attributable to AngloGold Ashanti
  112   (773)  32   741   112 
                
The accompanying notes are an integral part of these Consolidated Financial Statements.

F-93


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
29.SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
ANGLOGOLD ASHANTI LIMITED
Condensed consolidating statements of income
FOR THE YEAR ENDED DECEMBER 31,

(In millions)
                     
  2009  2009  2009  2009  2009 
  $  $  $  $  $ 
  AngloGold Ashanti  IOMco  Other subsidiaries  Cons adjustments  Total 
  (the “Guarantor”)  (the “Issuer”)  (the “Non-Guarantor         
          Subsidiaries”)         
Sales and other income
  1,775   (38)  2,273   (56)  3,954 
                
Product sales  1,665      2,119      3,784 
Interest, dividends and other  110   (38)  154   (56)  170 
                
Costs and expenses
  2,073   625   2,777   (623)  4,852 
                
Production costs  862      1,367      2,229 
Exploration costs  6   14   130      150 
Related party transactions  (18)           (18)
General and administrative expenses/(recoveries)  96   (121)  149   34   158 
Royalties paid        84      84 
Market development costs  5      5      10 
Depreciation, depletion and amortization  277      338      615 
Impairment of assets  4      4      8 
Interest expense  4   67   52      123 
Accretion expense  6      11      17 
Employment severance costs  10      4      14 
Loss/(profit) on sale of assets, realization of loans, indirect taxes and other  12   665   (10)  (657)  10 
Non-hedge derivative loss, movement on bonds and other commodity contracts  809      643      1,452 
                
 
(Loss)/income before income tax provision
  (298)  (663)  (504)  567   (898)
Taxation benefit/(expense)  112   (2)  (77)     33 
Equity income/(loss) in associates  98   (10)        88 
Equity (loss)/income in subsidiaries  (673)  (383)     1,056    
                
(Loss)/income from continuing operations
  (761)  (1,058)  (581)  1,623   (777)
Discontinued operations               
                
(Loss)/income after discontinued operations
  (761)  (1,058)  (581)  1,623   (777)
Preferred stock dividends  (64)     (65)  129    
                
Net (loss)/income
  (825)  (1,058)  (646)  1,752   (777)
Less: Net income attributable to noncontrolling interests        (48)     (48)
                
 
Net (loss)/income — attributable to AngloGold Ashanti
  (825)  (1,058)  (694)  1,752   (825)
                
The accompanying notes are an integral part of these Consolidated Financial Statements.

F-94


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
29.SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
ANGLOGOLD ASHANTI LIMITED
Condensed consolidating statements of income
FOR THE YEAR ENDED DECEMBER 31,

(In millions)
                     
  2008  2008  2008  2008  2008 
  $  $  $  $  $ 
  AngloGold Ashanti  IOMco  Other subsidiaries  Cons adjustments  Total 
  (the “Guarantor”)  (the “Issuer”)  (the “Non-Guarantor         
          Subsidiaries”)         
Sales and other income
  1,562   2   2,260   (94)  3,730 
                
Product sales  1,466      2,189      3,655 
Interest, dividends and other  96   2   71   (94)  75 
                
Costs and expenses
  1,284   1,697   2,820   (1,698)  4,103 
                
Production costs  796   1   1,362      2,159 
Exploration costs  5      123   (2)  126 
Related party transactions  (10)           (10)
General and administrative expenses/(recoveries)  147   78   69   (158)  136 
Royalties paid        78      78 
Market development costs  7      6      13 
Depreciation, depletion and amortization  253      362      615 
Impairment of assets  16      654      670 
Interest expense  17   39   16      72 
Accretion expense  9      13      22 
Employment severance costs  9            9 
(Profit)/loss on sale of assets, realization of loans, indirect taxes and other  (31)  1,579   (74)  (1,538)  (64)
Non-hedge derivative loss, movement on bonds and other commodity contracts  66      211      277 
                
 
Income/(loss) before income tax provision
  278   (1,695)  (560)  1,604   (373)
Taxation (expense)/benefit  (55)  (4)  37      (22)
Equity loss in associates  (141)  (8)        (149)
Equity (loss)/income in subsidiaries  (623)  (623)     1,246    
                
(Loss)/income from continuing operations
  (541)  (2,330)  (523)  2,850   (544)
Discontinued operations  23            23 
                
(Loss)/income after discontinued operations
  (518)  (2,330)  (523)  2,850   (521)
Preferred stock dividends  (45)     (46)  91    
                
Net (loss)/income
  (563)  (2,330)  (569)  2,941   (521)
Less: Net income attributable to noncontrolling interests        (42)     (42)
                
 
Net (loss)/income — attributable to AngloGold Ashanti
  (563)  (2,330)  (611)  2,941   (563)
                
The accompanying notes are an integral part of these Consolidated Financial Statements.

F-95


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
29SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
ANGLOGOLD ASHANTI LIMITED
Condensed consolidating balance sheets
AT DECEMBER 31,

(In millions)
                     
  2010  2010  2010  2010  2010 
  $  $  $  $  $ 
  AngloGold Ashanti  IOMco  Other subsidiaries  Cons adjustments  Total 
  (the “Guarantor”)  (the “Issuer”)  (the “Non-Guarantor         
          Subsidiaries”)         
ASSETS
                    
Current Assets
  1,169   2,265   3,869   (5,306)  1,997 
                
Cash and cash equivalents  152   114   309      575 
Restricted cash  1      9      10 
Receivables, inter-group balances and other current assets  1,016   2,151   3,551   (5,306)  1,412 
                
Property, plant and equipment, net
  2,197      3,729      5,926 
Acquired properties, net
  217      619      836 
Goodwill
        197   (17)  180 
Other intangibles, net
        17      17 
Other long-term inventory
        27      27 
Materials on the leach pad
        331      331 
Other long-term assets and deferred taxation assets
  3,328   736   914   (3,904)  1,074 
                
Total assets
  6,911   3,001   9,703   (9,227)  10,388 
                
LIABILITIES AND EQUITY
                    
Current liabilities including inter-group balances
  1,293   1,587   6,116   (7,992)  1,004 
Other non-current liabilities
  52      71   (54)  69 
Long-term debt
  39   1,044   1,519      2,602 
Derivatives
        176      176 
Deferred taxation liabilities
  720      471   9   1,200 
Provision for environmental rehabilitation
  176      354      530 
Other accrued liabilities
        38      38 
Provision for pension and other post-retirement medical benefits
  165      15      180 
Commitments and contingencies
               
Equity
  4,466   370   943   (1,190)  4,589 
                
Stock issued  13   4,587   897   (5,484)  13 
Additional paid in capital  8,670   363   219   (582)  8,670 
Accumulated deficit  (3,869)  (4,580)  (4,350)  8,930   (3,869)
Accumulated other comprehensive income and reserves  (348)     4,055   (4,055)  (348)
                
Total AngloGold Ashanti stockholders’ equity  4,466   370   821   (1,191)  4,466 
Noncontrolling interests        122   1   123 
                
 
Total liabilities and equity
  6,911   3,001   9,703   (9,227)  10,388 
                
The accompanying notes are an integral part of these Consolidated Financial Statements.

F-96


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
29.SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
ANGLOGOLD ASHANTI LIMITED
Condensed consolidating balance sheets
AT DECEMBER 31,

(In millions)
                     
  2009  2009  2009  2009  2009 
  $  $  $  $  $ 
  AngloGold Ashanti  IOMco  Other subsidiaries  Cons adjustments  Total 
  (the “Guarantor”)  (the “Issuer”)  (the “Non-Guarantor         
          Subsidiaries”)         
ASSETS
                    
Current Assets
  1,650   2,558   3,332   (4,782)  2,758 
                
Cash and cash equivalents  231   578   291      1,100 
Restricted cash  1      11      12 
Receivables, inter-group balances and other current assets  1,418   1,980   3,030   (4,782)  1,646 
                
Property, plant and equipment, net
  1,932      3,522      5,454 
Acquired properties, net
  205      626      831 
Goodwill
        425   (263)  162 
Other intangibles, net
        18      18 
Derivatives
        5      5 
Other long-term inventory
        26      26 
Materials on the leach pad
        324      324 
Other long-term assets and deferred taxation assets
  2,689   31   1,160   (2,796)  1,084 
                
Total assets
  6,476   2,589   9,438   (7,841)  10,662 
                
LIABILITIES AND EQUITY
                    
Current liabilities including inter-group balances
  2,058   1,824   6,686   (6,093)  4,475 
Other non-current liabilities
  149      84   (70)  163 
Long-term debt
  34      633      667 
Derivatives
        176      176 
Deferred taxation liabilities
  668      492   11   1,171 
Provision for environmental rehabilitation
  115      270      385 
Other accrued liabilities
        33      33 
Provision for pension and other post-retirement medical benefits
  135      12      147 
Commitments and contingencies
               
Equity
  3,317   765   1,052   (1,689)  3,445 
                
Stock issued  12   4,859   1,080   (5,939)  12 
Additional paid in capital  7,836   363   698   (1,061)  7,836 
Accumulated deficit  (3,914)  (4,457)  (3,397)  7,854   (3,914)
Accumulated other comprehensive income and reserves  (617)     2,544   (2,544)  (617)
                
Total AngloGold Ashanti stockholders’ equity  3,317   765   925   (1,690)  3,317 
Noncontrolling interests        127   1   128 
                
 
Total liabilities and equity
  6,476   2,589   9,438   (7,841)  10,662 
                
The accompanying notes are an integral part of these Consolidated Financial Statements.

F-97


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
29.SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
ANGLOGOLD ASHANTI LIMITED
Condensed consolidating statements of cash flows
FOR THE YEAR ENDED DECEMBER 31,

(In millions)
                     
  2010  2010  2010  2010  2010 
  $  $  $  $  $ 
  AngloGold Ashanti  IOMco  Other subsidiaries  Cons adjustments  Total 
  (the “Guarantor”)  (the “Issuer”)  (the “Non-Guarantor         
          Subsidiaries”)         
Net cash provided by/(used) in operating activities
  116   (1,129)  2,202   (151)  1,038 
                
Net income/(loss)  112   (773)  86   741   166 
Reconciled to net cash provided by/(used) in operations:                    
Loss/(profit) on sale of assets, realization of loans, indirect taxes and other  2,071   1,033   (21)  (3,061)  22 
Depreciation, depletion and amortization  352      368      720 
Impairment of assets  73      18      91 
Deferred taxation  119      19      138 
Cash utilized for hedge book settlements  (993)     (1,618)     (2,611)
Other non cash items  (1,522)  (1,973)  4,021   2,169   2,695 
Net increase in provision for environmental rehabilitation, pension and other post-retirement medical benefits  36      95      131 
Effect of changes in operating working capital items:                    
Net movement in inter-group receivables and payables  10   580   (590)      
Receivables  (27)  3   (129)     (153)
Inventories  (11)     (204)     (215)
Accounts payable and other current liabilities  (104)  1   157      54 
                
Net cash used in investing activities
  (943)  (42)  (902)     (1,887)
                
Increase in non-current investments     (42)  (116)     (158)
Proceeds on disposal of associate  1            1 
Net associates loans advanced  (3)           (3)
Additions to property, plant and equipment  (424)     (549)     (973)
Proceeds on sale of mining assets  60      9      69 
Proceeds on sale of investments        142      142 
Cash effects from hedge restructuring  (577)     (407)     (984)
Net loans receivable advanced        (6)     (6)
Change in restricted cash        25      25 
                
Net cash generated/(used) by financing activities
  729   707   (1,357)  151   230 
                
Net changes in short-term debt  126   (1,000)  (285)     (1,159)
Issuance of stock  798   310   (310)     798 
Share issue expenses  (20)           (20)
Net changes in long-term debt     1,044   789      1,833 
Debt issue costs     (13)  (26)     (39)
Cash effects from hedge restructuring  (49)     (1,017)     (1,066)
Dividends (paid)/received  (126)  366   (508)  151   (117)
                
Net decrease in cash and cash equivalents
  (98)  (464)  (57)     (619)
Effect of exchange rate changes on cash
  19      86      105 
Cash and cash equivalents — January 1,
  231   578   291      1,100 
                
Cash and cash equivalents — December 31,
  152   114   320      586 
                
The accompanying notes are an integral part of these Consolidated Financial Statements.

F-98


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
29.SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
ANGLOGOLD ASHANTI LIMITED
Condensed consolidating statements of cash flows
FOR THE YEAR ENDED DECEMBER 31,

(In millions)
                     
  2009  2009  2009  2009  2009 
  $  $  $  $  $ 
  AngloGold Ashanti  IOMco  Other subsidiaries  Cons adjustments  Total 
  (the “Guarantor”)  (the “Issuer”)  (the “Non-Guarantor         
          Subsidiaries”)         
Net cash provided by/(used) in operating activities
  326   (481)  727   (129)  443 
                
Net (loss)/income  (825)  (1,058)  (646)  1,752   (777)
Reconciled to net cash provided by/(used) in operations:                    
Loss/(profit) on sale of assets, realization of loans, indirect taxes and other  12   665   (2)  (657)  18 
Depreciation, depletion and amortization  277      338      615 
Impairment of assets  4      4      8 
Deferred taxation  (141)     (58)     (199)
Cash utilized for hedge book settlements        (797)     (797)
Other non cash items  946   (1,685)  3,540   (1,224)  1,577 
Net (decrease)/increase in provision for environmental rehabilitation, pension and other post-retirement medical benefits  (3)     22      19 
Effect of changes in operating working capital items:                    
Net movement in inter-group receivables and payables  27   1,571   (1,598)      
Receivables  (5)  (3)  (36)     (44)
Inventories  (23)     (146)     (169)
Accounts payable and other current liabilities  57   29   106      192 
                
Net cash (used)/generated in investing activities
  (398)  (344)  474      (268)
                
Increase in non-current investments     (344)  (99)     (443)
Net associates loans advanced  (2)           (2)
Additions to property, plant and equipment  (386)     (633)     (1,019)
Proceeds on sale of mining assets        1,142      1,142 
Proceeds on sale of investments        81      81 
Cash effects from hedge restructuring  (11)     (7)     (18)
Net loans receivable repaid  1            1 
Change in restricted cash        (10)     (10)
                
Net cash generated/(used) by financing activities
  103   1,174   (1,103)  129   303 
                
Net changes in short-term debt     (764)  (89)     (853)
Issuance of stock  306   693   (693)     306 
Share issue expenses  (11)           (11)
Net changes in long-term debt     674   222      896 
Debt issue costs        (14)     (14)
Cash effects from hedge restructuring  (83)     118      35 
Dividends (paid)/received  (109)  571   (647)  129   (56)
                
Net increase in cash and cash equivalents
  31   349   98      478 
Effect of exchange rate changes on cash
  46      1      47 
Cash and cash equivalents — January 1,
  154   229   192      575 
                
Cash and cash equivalents — December 31,
  231   578   291      1,100 
                
The accompanying notes are an integral part of these Consolidated Financial Statements.

F-99


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
29.SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
ANGLOGOLD ASHANTI LIMITED
Condensed consolidating statements of cash flows
FOR THE YEAR ENDED DECEMBER 31,

(In millions)
                     
  2008  2008  2008  2008  2008 
  $  $  $  $  $ 
  AngloGold Ashanti  IOMco  Other subsidiaries  Cons adjustments  Total 
  (the “Guarantor”)  (the “Issuer”)  (the “Non-Guarantor         
          Subsidiaries”)         
Net cash (used) in/provided by operating activities
  (809)  (927)  1,891   (91)  64 
                
Net (loss)/income  (563)  (2,330)  (569)  2,941   (521)
Reconciled to net cash (used) in/provided by operations:                    
(Profit)/loss on sale of assets, realization of loans, indirect taxes and other  (31)  1,579   (74)  (1,538)  (64)
Depreciation, depletion and amortization  253      362      615 
Impairment of assets  16      654      670 
Deferred taxation  40      (112)     (72)
Cash utilized for hedge book settlements  (517)     (596)     (1,113)
Other non cash items  (109)  53   2,315   (1,494)  765 
Net increase/(decrease) in provision for environmental rehabilitation, pension and                    
other post-retirement medical benefits  25      (1)     24 
Effect of changes in operating working capital items:                    
Net movement in inter-group receivables and payables  10   (212)  202       
Receivables  6   (21)  8      (7)
Inventories  (1)     (130)     (131)
Accounts payable and other current liabilities  63   4   (168)     (101)
                
Net cash (used) in/provided by continuing operations  (808)  (927)  1,891   (91)  65 
Net cash used in discontinued operations  (1)           (1)
                
Net cash used in investing activities
  (562)     (1,031)     (1,593)
                
Increase in non-current investments        (93)     (93)
Proceeds on disposal of associate  46      2      48 
Additions to property, plant and equipment  (340)     (854)     (1,194)
Proceeds on sale of mining assets  1      38      39 
Proceed on sale of discontinued assets  10            10 
Proceeds on sale of investments        88      88 
Cash effects from hedge restructuring  (279)     (206)     (485)
Change in restricted cash        (6)     (6)
                
Net cash generated/(used) by financing activities
  1,392   1,116   (884)  91   1,715 
                
Net changes in short-term debt  (242)     54      (188)
Issuance of stock  1,722   1,241   (1,241)     1,722 
Share issue expenses  (54)           (54)
Net changes in long-term debt     (216)  643      427 
Cash effects from hedge restructuring  47      (181)     (134)
Dividends (paid)/received  (81)  91   (159)  91   (58)
                
Net increase/(decrease) in cash and cash equivalents
  21   189   (24)     186 
Effect of exchange rate changes on cash
  (55)     (33)     (88)
Cash and cash equivalents — January 1,
  188   40   249      477 
                
Cash and cash equivalents — December 31,
  154   229   192      575 
                
The accompanying notes are an integral part of these Consolidated Financial Statements.

F-100


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
30.SUBSEQUENT EVENTS
Restructuring of ESOP and Economic Empowerment Transaction
On April 14, 2011, AngloGold Ashanti Limited, the National Union of Mineworkers (NUM), Solidarity, The Union (UASA), Izingwe Holdings (Proprietary) Limited and the Bokamoso ESOP Board of Trustees announced the restructuring of the empowerment transactions concluded respectively between the company and the unions, and the company and Izingwe in 2006.
This restructuring was motivated by the fact that share price performance since the onset of the 2008 global financial crisis led to a situation where the first two tranches of E shares (otherwise known to participants as loan shares), which operate essentially as share appreciation rights, vested and lapsed at no additional value to Bokamoso ESOP beneficiaries and Izingwe.
In order to remedy this situation in a manner that would ensure an element of value accruing to participants, though at a reasonable incremental cost to AngloGold Ashanti shareholders, the scheme will be restructured as follows:
All lapsed loan shares that vested without value will bewere reinstated;

 Ÿ The

the strike (base) price will bewas fixed at R320R320.00 per share for the Bokamoso ESOP and R330R330.00 for Izingwe;

 Ÿ The

the notional interest charge will fallthat formed part of the original cancellation formula fell away;

 Ÿ As previously,

as before, 50 percent of any dividends declared will bewas used to reduce the strike price;

 Ÿ As previously,

as before, the remaining 50 percent is paid directly to participants under the empowerment transaction; and

 Ÿ The

the life span of the scheme will bewas extended by an additional one year, the last vesting being in 2014, instead of 2013. A minimum payout on vesting of the E ordinary shares has been set at R40R40.00 each and a maximum payout of R70R70.00 each per E Shareordinary share for Izingwe and R90R90.00 each for members of the Bokamoso ESOP (i.e. employees), plusincluding the impact of the 50 percent of dividend flow. While the floor price provides certainty to all beneficiaries of the empowerment transactions, the creation of a ceiling serves to limit the cost to AngloGold Ashanti Limited and its shareholders.

The total incremental fair value of awards granted was R29.14 per share and will be included in earnings up to the vesting date in 2014. The Company recorded a charge of $12 million in 2011 to earnings as a result of the restructuring.

F - 92


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

27.

ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued)

The award of free ordinary shares to employees

The fair value of each free ordinary share awarded in 2011 was R306.99 (2008: R188, 2007: R306 and 2006: R320). The fair value is equal to the market value at the date-of-grant. Dividends declared and paid to the trust will accrue and be paid to ESOP members, pro rata to the number of shares allocated to them. An equal number of shares vests from 2009, and each subsequent year up to expiry date of November 1, 2013.

A summary of time related equity settled compensation scheme showing movement from the beginning of the year to the end of the year, is presented below:

   

Awards

(000)

Outstanding at January 1, 2012

327 

Reallocated

10 

Exercised

(172)

Forfeited (terminations)

(10)

Outstanding at December 31, 2012

155 

Exercisable at December 31, 2012

A summary of the salient features of the award of free ordinary shares under ESOP to employees is presented below:

   2012  2011 2010 

Total intrinsic value of awards outstanding at period end (R millions)

  41  112 142 

Intrinsic value of awards exercised (R millions)

  50  51 72 

Weighted average remaining contractual term (years)

  1  1 

F - 93


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

27.

ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued)

The award of E ordinary shares to employees:

Before the restructuring of the ESOP scheme during April 2011, the average fair value of the E ordinary shares awarded to employees in 2008 was R13 (2007: R79 and 2006: R105) per share. After the restructuring of the scheme the average fair value per share of the E Ordinary shares was R49.57. Dividends declared in respect of the E ordinary shares will firstly be allocated to cover administration expenses of the trust, whereafter it will accrue and be paid to ESOP members, pro rata to the number of shares allocated to them. At each anniversary over a six year period commencing on the third anniversary of the original 2006 award, the Company will cancel the relevant number of E ordinary shares as stipulated by a cancellation formula. Any E ordinary shares remaining in the tranche will be converted to ordinary shares for the benefit of the employees.

The value of each share granted is estimated on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires the input of subjective assumptions, including the expected term of the option award and stock price volatility. These estimates involve inherent uncertainties and the application of judgment. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those options expected to vest. As a result, if other assumptions had been used, the Company’s recorded compensation expense could have been different from that reported.

The Black-Scholes option-pricing model used the following assumptions, at grant date:

   2011 2008 2007 2006

Risk-free interest rate

 6.63% 7.00% 7.00% 7.00%

Dividend yield

 0.99% 1.39% 2.06% 2.30%

Volatility factor of market share price

 33.50% 35.00% 33.00% 36.00%

 

A summary of E ordinary shares, awarded to employees, showing movement from the beginning of the year to the end of the year, is presented below:

   Options
(000)
  

Weighted-
average
exercise price

R

Outstanding at January 1, 2012

 1,533  315 

Reallocated

 32  313 

Forfeited (terminations)

 (32)  313 

Converted

 (615)  313 
 

 

 

Outstanding at December 31, 2012

 918  313 
 

 

 

Exercisable at December 31, 2012

 -  
 

 

A summary of the salient features of the award of E ordinary shares to employees is presented below:

   2012  2011 2010   

Total intrinsic value of options outstanding at period end (R millions) (1)

  31  43 - 

Intrinsic value of options exercised (R millions)

  21  6 -  (2) 

Weighted average remaining contractual term (years)

  1  1 1 

(1)

The total incremental accounting costoptions outstanding at December 31, 2010 had no intrinsic value as the share price at year end was lower than the weighted average exercise price.

(2)

Less than R1 million.

F - 94


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

27.

ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued)

      2012     2011     2010 

Compensation expense related to the ESOP scheme recognized ($ millions)

     8      12      12 

As at December 31, the unrecognized compensation cost related to unvested awards of the ESOP scheme amounted to ($ millions)

     3      9      8 

Unrecognized compensation cost is expected to be recognized over the remaining scheme term (years)

     1      3      3 

Weighted average exercise price is calculated as the initial grant price of R288 plus interest factor less dividend apportionment up to April 2011. After that date the exercise price is calculated at the restructured price of R320 less dividend apportionment.

Cash Settled Share Incentive Scheme

Ghana Employee Share Ownership Plan (“Ghana ESOP”)

A memorandum of understanding was signed with the Ghanaian employees on April 28, 2009 to introduce the Ghana ESOP under defined rules.

In terms of the rules of the scheme, every eligible employee is entitled to 20 AngloGold Ashanti Limited share appreciation rights (“phantom shares”), which will be paid out in four equal tranches, commencing May 2009 and ending in May 2012.

The value of the rights are equal to the value of AngloGold Ashanti Limited American Depositary receipts (“ADR’s”) as listed on the New York Stock Exchange, converted into Ghanaian Cedis at the prevailing US dollar exchange rate.

The share price on the day of issue as of April 29, 2009 was $32.15, whilst the share price used in the payment of the fourth tranche was $33.55 per share (third tranche in 2011: 49.24 per share, second tranche in 2010: $39.50 per share, first tranche in 2009: $28.46 per share).

The award of share appreciation rights to employees

A summary of share appreciation rights showing movement from the beginning of the year to the end of the year, is presented below:

Number of

rights

(000)

Outstanding at January 1, 2012

24 

Exercised

(24)

Forfeited (terminations)

(1)

Reallocated

Rights outstanding at December 31, 2012

Rights exercisable at December 31, 2012

      2012   2011   2010  
      $  $  $ 

Compensation expense related to Ghana ESOP scheme recognized ($ millions)

     -  (1)   -  (1)   2 

The liability recognized in the consolidated balance sheet in respect of unexercised rights was as follows

     -   1   2 

(1)

Less than $1 million.

F - 95


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

28.

SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

AngloGold Ashanti Holdings plc (“IOMco”), a 100 percent wholly-owned subsidiary of AngloGold Ashanti, has issued debt securities which are fully and unconditionally guaranteed by AngloGold Ashanti Limited (being the “Guarantor”). See Note 18 and Note 20. IOMco is an Isle of Man registered company that holds certain of AngloGold Ashanti’s operations and assets located outside South Africa (excluding certain operations and assets in the United States of America and Namibia). The following is condensed consolidating financial information for the Company as of December 31, 2012 and 2011 and for the years ended December 31, 2012, 2011 and 2010, with a separate column for each of AngloGold Ashanti Limited as Guarantor, IOMco as Issuer and the other subsidiaries of the Company combined (the “Non-Guarantor Subsidiaries”). For the purposes of the condensed consolidating financial information, the Company carries its investments under the equity method. The following supplemental condensed consolidating financial information should be read in conjunction with the Company’s consolidated financial statements.

F - 96


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

28.

SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)

ANGLOGOLD ASHANTI LIMITED

Condensed consolidating statements of income

FOR THE YEAR ENDED DECEMBER 31,

(In millions)

 

 
  2012    2012    2012    2012    2012   
  $   $   $   $   $  
  AngloGold Ashanti   IOMco   Other subsidiaries   

          Consolidation
adjustments

 

   

Total

  

 

 
  (the “Guarantor”)   (the “Issuer”)   (the “Non-Guarantor
Subsidiaries”)
          

Sales and other income

 2,158     4,463   (195)  6,428  

Product sales

 1,972     4,381     6,353  

Interest, dividends and other

 186     82   (195)  75  

Costs and expenses

 2,802   79   3,457   (1,121)  5,217  

Production costs

 1,080     2,102     3,183  

Exploration costs

 19   16   353     388  

Related party transactions

 (14)        (14)  

General and administrative expenses/(recoveries)

 239   (16)  78   (2)  299  

Royalties paid

 25     139     164  

Market development costs

         10  

Depreciation, depletion and amortization

 305     489     794  

Impairment of assets

 57     310     367  

Interest expense

   90   118     213  

Accretion expense

 11     22     33  

Employment severance costs

         10  

Loss/(profit) on sale of assets, realization of loans, indirect taxes and other

 1,065   (12)  101   (1,119)  35  

Non-hedge derivative gain and movement on bonds

     (265)    (265) 
               

(Loss)/income before income tax provision

 (644)  (77)  1,006   926   1,211  

Taxation benefit/(expense)

 40   (5)  (375)    (340) 

Equity (loss)/income in associates

 (27)        (23) 

Equity income/(loss) in subsidiaries

 1,502   360     (1,862)   

Income/(loss) from continuing operations

 871   282   631   (936)  848  

Preferred stock dividends

 (42)    (42)  84    

Net income/(loss)

 829   282   589   (852)  848  

Less: Net income attributable to noncontrolling interests

     (19)    (19) 

 

Net income/(loss) attributable to AngloGold Ashanti

 829   282   570   (852)  829  

 

Comprehensive income

 733   274   622   (879)  750  

Comprehensive income attributable to noncontrolling interests

     (17)    (17) 

Comprehensive income attributable to AngloGold Ashanti

 733   274   605   (879)  733 

The accompanying notes are an integral part of these Consolidated Financial Statements.

F - 97


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

28.

SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)

ANGLOGOLD ASHANTI LIMITED

Condensed consolidating statements of income

FOR THE YEAR ENDED DECEMBER 31,

(In millions)

 

 
  

2011 

$

AngloGold Ashanti

   

2011 

$

IOMco

   

2011 

$

Other subsidiaries

   

2011 

$

         Consolidation
adjustments

 

   

2011 

$

Total

  

 

 
  (the “Guarantor”)   (the “Issuer”)   (the “Non-Guarantor
Subsidiaries”)
          

Sales and other income

 2,709     4,108   (176)  6,642  

Product sales

 2,561     4,009     6,570  

Interest, dividends and other

 148     99   (176)  72  

Costs and expenses

 2,417   99   1,453   552   4,521  

Production costs

 1,115     1,862     2,977  

Exploration costs

 19   18   242     279  

Related party transactions

 (12)        (12) 

General and administrative expenses/(recoveries)

 249   27   32   (21)  287  

Royalties paid

 73     120     193  

Market development costs

          

Depreciation, depletion and amortization

 354     435     789  

Impairment of assets

 14         17  

Interest expense

   69   104     178  

Accretion expense

 12     16     28  

Employment severance costs

         15  

Loss/(profit) on sale of assets, realization of loans, indirect taxes and other

 574   (15)  (1,175)  573   (43) 

Non-hedge derivative gain and movement on bonds

     (196)    (196) 
               

Income/(loss) before income tax provision

 292   (98)  2,655   (728)  2,121  

Taxation expense

 (333)  (2)  (370)    (705) 

Equity income/(loss) in associates

 62   (3)      59  

Equity income/(loss) in subsidiaries

 1,465   808     (2,273)   

Income/(loss) from continuing operations

 1,486   705   2,285   (3,001)  1,475  

Preferred stock dividends

 (61)    (61)  122    

Net income/(loss)

 1,425   705   2,224   (2,879)  1,475  

Less: Net income attributable to noncontrolling interests

     (50)    (50) 

 

Net income/(loss) attributable to AngloGold Ashanti

 1,425   705   2,174   (2,879)  1,425  

 

Comprehensive income

 978   704   2,217   (2,877)  1,022  

Comprehensive income attributable to noncontrolling interests

     (44)    (44) 

Comprehensive income attributable to AngloGold Ashanti

 978   704   2,173   (2,877)  978  

The accompanying notes are an integral part of these Consolidated Financial Statements.

F - 98


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

28.

SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)

ANGLOGOLD ASHANTI LIMITED

Condensed consolidating statements of income

FOR THE YEAR ENDED DECEMBER 31,

(In millions)

   

2010

$

    AngloGold Ashanti

     

2010

$

IOMco

     

2010

$

        Other subsidiaries

     

2010

$
        Consolidation
adjustments

     

2010

$

        Total

 
  (the “Guarantor”)        (the “Issuer”)    (the “Non-Guarantor
Subsidiaries”)
           

Sales and other income

  2,348    (2   3,233    (177   5,402 

Product sales

  2,207    -    3,127    -    5,334 

Interest, dividends and other

  141    (2   106    (177   68 

Costs and expenses

  4,130    1,120    2,818    (3,047   5,021 

Production costs

  1,091    -    1,565    -    2,656 

Exploration costs

  14    12    180    -    206 

Related party transactions

  (15   -    -    -    (15

General and administrative expenses

  164    6    44    14    228 

Royalties paid

  38    -    104    -    142 

Market development costs

  7    -    7    -    14 

Depreciation, depletion and amortization

  352    -    368    -    720 

Impairment of assets

  73    -    18    -    91 

Interest expense

  7    69    75    -    151 

Accretion expense

  10    -    12    -    22 

Employment severance costs

  19    -    4    -    23 

Loss/(profit) on sale of assets, realization of loans, indirect taxes and other

  2,041    1,033    (16   (3,061   (3

Non-hedge derivative loss and movement on bonds

  329    -    457    -    786 
                        

(Loss)/income before income tax provision

  (1,782   (1,122   415    2,870    381 

Taxation expense

  (1   (1   (253   -    (255

Equity income/(loss) in associates

  63    (23   -    -    40 

Equity income/(loss) in subsidiaries

  1,907    373    -    (2,280   - 

Income/(loss) from continuing operations

  187    (773   162    590    166 

Preferred stock dividends

  (75   -    (76   151    - 

Net income/(loss)

  112    (773   86    741    166 

Less: Net income attributable to noncontrolling interests

  -    -    (54   -    (54

 

Net income/(loss) attributable to AngloGold Ashanti

  112    (773   32    741    112 

 

Comprehensive income

  381    (773   290    542    440 

Comprehensive income attributable to noncontrolling interests

  -    -    (59   -    (59

Comprehensive income attributable to AngloGold Ashanti

  381    (773   231    542    381 

The accompanying notes are an integral part of these Consolidated Financial Statements.

F - 99


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

28

SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)

ANGLOGOLD ASHANTI LIMITED

Condensed consolidating balance sheets

AT DECEMBER 31,

(In millions)

   

2012

$

    AngloGold Ashanti

     

2012

$

IOMco

     

2012

$

        Other subsidiaries

     

2012

$

        Consolidation
adjustments

     

2012

$

        Total

 
  (the “Guarantor”)        (the “Issuer”)    (the “Non-Guarantor
Subsidiaries”)
           

ASSETS

         

Current Assets

  1,178     3,128     3,764     (5,280   2,790  

Cash and cash equivalents

  98     537     257     -     892  

Restricted cash

  1     -     34     -     35  

Receivables, inter-group balances and other current assets

  1,079     2,591     3,473     (5,280   1,863  

Property, plant and equipment, net

  2,046     -     5,189     -     7,235  

Acquired properties, net

  141     -     607     -     748  

Goodwill

  -     -     209     (16   193  

Other intangibles, net

  53     -     59     -     112  

Other long-term inventory

  -     -     180     -     180  

Materials on the leach pad

  -     -     445     -     445  

Other long-term assets and deferred taxation assets

  4,875     4,506     1,098     (9,080   1,399  

Total assets

  8,293     7,634     11,551     (14,376   13,102  

LIABILITIES AND EQUITY

         

Current liabilities including inter-group balances

  1,510     1,614     4,586     (5,751   1,959  

Other non-current liabilities

  53     -     342     (16   379  

Long-term debt

  31     1,739     980     -     2,750  

Derivatives

  -     -     10     -     10  

Deferred taxation liabilities

  520     -     635     2     1,157  

Provision for environmental rehabilitation

  157     -     601     -     758  

Other accrued liabilities

  -     -     32     -     32  

Provision for pension and other post-retirement medical benefits

  196     -     13     -     209  

Commitments and contingencies

  -     -     -     -     -  

Equity

  5,826     4,281     4,352     (8,611   5,848  

Stock issued

  13     5,059     937     (5,996   13  

Additional paid in capital

  8,808     540     231     (771   8,808  

Accumulated deficit

  (2,103   (1,318   (1,164   2,482     (2,103

Accumulated other comprehensive income and reserves

  (892   -     4,327     (4,327   (892

Total AngloGold Ashanti stockholders’ equity

  5,826     4,281     4,331     (8,612   5,826  

Noncontrolling interests

  -     -     21     1     22  
                        

Total liabilities and equity

  8,293     7,634     11,551     (14,376   13,102  

The accompanying notes are an integral part of these Consolidated Financial Statements.

F - 100


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

28.

SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)

ANGLOGOLD ASHANTI LIMITED

Condensed consolidating balance sheets

AT DECEMBER 31,

(In millions)

 

 
   

2011 

$

AngloGold Ashanti

      

2011 

$

IOMco

      

2011 

$

Other subsidiaries

      

2011 

$

Consolidation
adjustments

      

2011 

$

Total

 

 

 
   (the “Guarantor”)      (the “Issuer”)      (the “Non-Guarantor
Subsidiaries”)
               

  ASSETS

                  

  Current Assets

   833        2,469        3,486        (4,157)       2,631   

  Cash and cash equivalents

   388        458        266               1,112   

  Restricted cash

                 34               35   

  Receivables, inter-group balances and other current assets

   444        2,011        3,186        (4,157)       1,484   

  Property, plant and equipment, net

   1,940               4,183               6,123   

  Acquired properties, net

   167               612               779   

  Goodwill

                 198        (16)       182   

  Other intangibles, net

                 22               31   

  Other long-term inventory

                 31               31   

  Materials on the leach pad

                 393               393   

  Other long-term assets and deferred taxation assets

   4,362        3,558        815        (7,720)       1,015   

  Total assets

   7,311        6,027        9,740        (11,893)       11,185   

  LIABILITIES AND EQUITY

                  

  Current liabilities including inter-group balances

   889        1,550        2,992        (4,512)       919   

  Other non-current liabilities

   49               46        (32)       63   

  Long-term debt

   33        994        1,446               2,473   

  Derivatives

                 93               93   

  Deferred taxation liabilities

   641               596               1,242   

  Provision for environmental rehabilitation

   147               506               653   

  Other accrued liabilities

                 35               35   

  Provision for pension and other post-retirement medical benefits

   170               15               185   

  Commitments and contingencies

                                 

  Equity

   5,382        3,483        4,011        (7,354)       5,522   

  Stock issued

   13        5,269        897        (6,166)       13   

  Additional paid in capital

   8,740        435        219        (654)       8,740   

  Accumulated deficit

   (2,575)       (2,220)       (3,521)       5,741        (2,575)  

  Accumulated other comprehensive income and reserves

   (796)       (1)       6,277        (6,276)       (796)  

  Total AngloGold Ashanti stockholders’ equity

   5,382        3,483        3,872        (7,355)       5,382   

  Noncontrolling interests

                 139               140   
                                 

  Total liabilities and equity

   7,311        6,027        9,740        (11,893)       11,185   

The accompanying notes are an integral part of these Consolidated Financial Statements.

F - 101


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

28.

SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)

ANGLOGOLD ASHANTI LIMITED

Condensed consolidating statements of cash flows

FOR THE YEAR ENDED DECEMBER 31,

(In millions)

 

 
   

2012 

$

AngloGold Ashanti

   

2012 

$

IOMco

   

2012 

$

Other subsidiaries

   

2012 

$
Consolidation
adjustments

   

2012 

$

Total

 

 

 
   (the “Guarantor”)   (the “Issuer”)   (the “Non-Guarantor
Subsidiaries”)
         

 Net cash provided by/(used) in operating activities

   280      (641)     2,145      (84)     1,700   

 Net income/(loss)

   829      282      589      (852)     848   

 Reconciled to net cash provided by/(used) in operations:

           

Loss/(profit) on sale of assets, realization of loans, indirect taxes and other

   1,065      (12)     101      (1,119)     35   

Depreciation, depletion and amortization

   305           489           794   

Impairment of assets

   57           310           367   

Deferred taxation

   (85)          11           (74)  

Other non cash items

   (2,033)     (356)     392      1,887      (110)  

Net (decrease)/increase in provision for environmental rehabilitation, pension and other post-retirement medical benefits

   (24)          59           35   

 Effect of changes in operating working capital items:

           

Net movement in inter-group receivables and payables

   224      (578)     354             

Receivables

   (16)          (101)          (117)  

Inventories

   (35)          (289)          (324)  

Accounts payable and other current liabilities

   (7)     23      230           246   

 Net cash used in investing activities

   (490)     (289)     (1,872)          (2,651)  

 Increase in non-current investments

   (2)     (310)     (134)          (446)  

 Acquisition of subsidiary and loan

   (335)                    (335)  

 Additions to property, plant and equipment

   (542)          (1,216)          (1,758)  

 Interest capitalized and paid

             (12)          (12)  

 Expenditure on intangible assets

   (44)          (35)          (79)  

 Proceeds on sale of mining assets

                         

 Proceeds on sale of investments

             86           86   

 Proceeds on disposal of associates and equity accounted

 joint ventures

        20                20   

 Proceeds on disposal of subsidiary

   433           (427)            

 Net loans receivable advanced

             (45)          (45)  

 Net associates and equity accounted joint ventures

 loans advanced

             (65)          (64)  

 Net cash of subsidiary disposed

             (26)          (26)  

 Change in restricted cash

             (3)          (3)  

 Net cash (used)/generated by financing activities

   (82)     1,009      (275)     84      736   

 Net changes in short-term debt

   175      45      (2)          218   

 Issuance of stock

        (105)     107             

 Net changes in long-term debt

        750      247           997   

 Debt issue costs

        (22)     (8)          (30)  

 Acquisition of noncontrolling interest

             (215)          (215)  

 Dividends (paid)/received

   (257)     341      (404)     84      (236)  

 

 

 Net (decrease)/increase in cash and cash equivalents

   (292)     79      (2)          (215)  

 Effect of exchange rate changes on cash

             (7)          (5)  

 Cash and cash equivalents - January 1,

   388      458      266           1,112   

 

 

 Cash and cash equivalents - December 31,

   98      537      257           892   

 

 

 The accompanying notes are an integral part of these Consolidated Financial Statements.

F - 102


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

28.

SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)

ANGLOGOLD ASHANTI LIMITED

Condensed consolidating statements of cash flows

FOR THE YEAR ENDED DECEMBER 31,

(In millions)

   

2011

$

AngloGold Ashanti

  

2011

$

IOMco

  

2011

$

Other subsidiaries

  

2011

$

Consolidation
adjustments

  

2011

$

    Total

 
  (the “Guarantor”)  (the “Issuer”)  (the “Non-Guarantor
Subsidiaries”)
       

 

Net cash provided by/(used) in operating activities

  1,158    11    1,503    (122  2,550  

Net income/(loss)

  1,425    705    2,224    (2,879  1,475  

Reconciled to net cash provided by/(used) in operations:

      

Loss/(profit) on sale of assets, realization of loans, indirect taxes and other

  577    (15  (1,108  573    27  

Depreciation, depletion and amortization

  354    -    435    -    789  

Impairment of assets

  14    -    3    -    17  

Deferred taxation

  212    -    87    -    299  

Other non cash items

  (1,709  (789  199    2,184    (115

Net increase in provision for environmental rehabilitation, pension and other post-retirement medical benefits

  36    -    153    -    189  

Effect of changes in operating working capital items:

      

Net movement in inter-group receivables and payables

  146    108    (254  -    -  

Receivables

  14    -    (27  -    (13

Inventories

  23    -    (267  -    (244

Accounts payable and other current liabilities

  66    2    58    -    126  

Net cash used in investing activities

  (552  (103  (948  -    (1,603

Increase in non-current investments

  (32  (98  (132  -    (262

Additions to property, plant and equipment

  (529  -    (864  -    (1,393

Expenditure on intangible assets

  (10  -    (6  -    (16

Proceeds on sale of mining assets

  6    -    13    -    19  

Proceeds on sale of investments

  -    -    91    -    91  

Proceeds on disposal of subsidiary

  9    -    -    -    9  

Net loans receivable repaid

  4    -    -    -    4  

Net associates and equity accounted joint ventures loans advanced

  -    (5  (20  -    (25

Cash of subsidiary disposed

  -    -    (11  -    (11

Change in restricted cash

  -    -    (19  -    (19

Net cash (used)/generated by financing activities

  (282  436    (595  122    (319

Net changes in short-term debt

  (99  -    (10  -    (109

Issuance of stock

  10    202    (202  -    10  

Share issue expenses

  (1  -    -    -    (1

Net changes in long-term debt

  -    (50  -    -    (50

Dividends (paid)/received

  (192  284    (383  122    (169
                     

Net increase/(decrease) in cash and cash equivalents

  324    344    (40  -    628  

Effect of exchange rate changes on cash

  (88  -    (14  -    (102

Cash and cash equivalents - January 1,

  152    114    320    -    586  

Cash and cash equivalents - December 31,

  388    458    266    -    1,112  

  The accompanying notes are an integral part of these Consolidated Financial Statements.

F - 103


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

28.

SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)

ANGLOGOLD ASHANTI LIMITED

Condensed consolidating statements of cash flows

FOR THE YEAR ENDED DECEMBER 31,

(In millions)

   

2010

$

AngloGold Ashanti

  

2010

$

IOMco

  

2010

$

Other subsidiaries

  

2010

$

Consolidation
adjustments

  

2010

$

        Total

 
  (the “Guarantor”)  (the “Issuer”)  (the “Non-Guarantor
Subsidiaries”)
       

 

Net cash provided by/(used) in operating activities

  116    (1,129  2,202    (151  1,038  

Net income/(loss)

  112    (773  86    741    166  

Reconciled to net cash provided by/(used) in by operations:

      

Loss/(profit) on sale of assets, realization of loans, indirect taxes and other

  2,071    1,033    (21  (3,061  22  

Depreciation, depletion and amortization

  352    -    368    -    720  

Impairment of assets

  73    -    18    -    91  

Deferred taxation

  119    -    19    -    138  

Cash utilized for hedge book settlements

  (993  -    (1,618  -    (2,611

Other non cash items

  (1,522  (1,973  4,021    2,169    2,695  

Net increase in provision for environmental rehabilitation, pension and other post-retirement medical benefits

  36    -    95    -    131  

Effect of changes in operating working capital items:

      

Net movement in inter-group receivables and payables

  10    580    (590  -    -  

Receivables

  (27  3    (129  -    (153

Inventories

  (11  -    (204  -    (215

Accounts payable and other current liabilities

  (104  1    157    -    54  

Net cash used in investing activities

  (943  (42  (902  -    (1,887

Increase in non-current investments

  -    (42  (116  -    (158

Additions to property, plant and equipment

  (424  -    (549  -    (973

Proceeds on sale of mining assets

  60    -    9    -    69  

Proceeds on sale of investments

  -    -    142    -    142  

Proceeds on disposal of associate

  1    -    -    -    1  

Cash effects from hedge restructuring

  (577  -    (407  -    (984

Net loans receivable advanced

  -    -    (6  -    (6

Net associates and equity accounted joint ventures loans advanced

  (3  -    -    -    (3

Change in restricted cash

  -    -    25    -    25  

Net cash generated/(used) by financing activities

  729    707    (1,357  151    230  

Net changes in short-term debt

  126    (1,000  (285  -    (1,159

Issuance of stock

  798    310    (310  -    798  

Share issue expenses

  (20  -    -    -    (20

Net changes in long-term debt

  -    1,044    789    -    1,833  

Debt issue costs

  -    (13  (26  -    (39

Cash effects from hedge restructuring

  (49  -    (1,017  -    (1,066

Dividends (paid)/received

  (126  366    (508  151    (117
                     

Net decrease in cash and cash equivalents

  (98  (464  (57  -    (619

Effect of exchange rate changes on cash

  19    -    86    -    105  

Cash and cash equivalents - January 1,

  231    578    291    -    1,100  

Cash and cash equivalents - December 31,

  152    114    320    -    586  

  The accompanying notes are an integral part of these Consolidated Financial Statements.

F - 104


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)

29.

SUBSEQUENT EVENTS

Syndicated bridge loan facility agreement

In February 2013, AngloGold Ashanti Limited entered into a syndicated bridge loan facility agreement pursuant to which a syndicate of banks agreed to make available $750 million to AngloGold Ashanti Holdings plc. In the event AngloGold Ashanti Limited chooses to draw on the loan, the proceeds are to be applied towards the repayment of the $732.5 million, 3.5 percent Convertible bonds due in May 2014.

Amendments to the rules of BSP and LTIP plans

On March 11, 2013 the shareholders approved the following:

Ÿ

an amendment to the Companyrules to the BSP Share Scheme. In terms of this transactionthe new rules granted awards will vest 50 percent after 12 months and 50 percent after 24 months. The additional 20 percent retention award for holding the shares for 36 months has been removed. The amended rules apply to new grants and have no impact on existing grants under the scheme.

Ÿ

A new retention bonus scheme (under the LTIP) comprising both cash (40 percent of 2013 total base pay) and shares (60 percent of base pay). The share award will be approximately $18 million.a performance-based award. This scheme has no impact on existing awards.

F-101
Ÿ

A new Co-Investment Executive Share Plan which is aimed at assisting executives in meeting their Minimum Shareholding Requirements (“MSR’s”). Executives will be allowed to take up to 50 percent of their after tax cash bonus to participate in the scheme by purchasing shares in AngloGold Ashanti, and the company will grant shares equivalent to 150 percent of their purchased shares with vesting over a two-year period in two equal tranches.

Disposal of additional interest in Rand Refinery Limited

On March 19, 2013, the Company disposed of an additional 4.24 percent interest in Rand Refinery Limited for a cash consideration of $5 million reducing its shareholding to 43.79 percent. The disposal resulted in a loss of less than $1 million.

Agreement with Izingwe Property Managers (Proprietary) Limited

AngloGold Ashanti has entered into an agreement (“Agreement”) with Izingwe Property Managers (Proprietary) Limited (“Izingwe Property”) under which Izingwe Property will assist AngloGold Ashanti in the planning, design, development and construction of 200 units of housing in South Africa for employees of AngloGold Ashanti. Izingwe Property’s roles will be those of development and project manager and main contractor. The terms of the Agreement call for payments from AngloGold Ashanti to Izingwe Property in the amount of $6.7 million in consideration for Izingwe Property’s services. Mr. Sipho Pityana, a non-executive director of the Company, is Chairman and a 44 percent shareholder of Izingwe Holdings (Proprietary) Limited (“Izingwe”), AngloGold Ashanti’s BEE partner. Izingwe Capital (Proprietary) Limited, an associate company of Izingwe is the majority shareholder of Izingwe Property.

 

F - 105


SIGNATURES

SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that isit has duly caused and authorisedauthorized the undersigned to sign this annual report on its behalf.

ANGLOGOLD ASHANTI LIMITED

/S/ Srinivasan Venkatakrishnan

Name

 

:

    

Srinivasan Venkatakrishnan

ANGLOGOLD ASHANTI LIMITED

Title

 

:

    /s/ Srinivasan Venkatakrishnan  
Name   : Srinivasan Venkatakrishnan 
Title    :

Chief Financial Officer
Date    : May 27, 2011

E-1


Date

 

:

    

April 26, 2013

Exhibits to Form 20-F

Exhibit Number

  

Description

  

Remarks

Exhibit Number19.1

  DescriptionRemarks
Exhibit 19.1

Memorandum and Articles of AssociationIncorporation of AngloGold Ashanti Limited as in effect on May 15, 2009March 27, 2013

  

Incorporated by reference to Exhibit 3.1 of AngloGold’s automatic shelf registration statementAngloGold Ashanti’s report on Form F-3 filed withform 6-K furnished to the Securities and Exchange Commission on August 31, 2009April 10, 2013

Exhibit 19.2.1

  

Indenture for guaranteed debt securities among AngloGold Ashanti Holdings plc, as issuer, AngloGold Ashanti Limited, as guarantor, and The Bank of New York Mellon, as trustee, dated as of April 28, 2010

  

Incorporated by reference to Exhibit 4.2 to AngloGold Ashanti’s registration statement on Form F-3 (No. 333-182712) filed July 17, 2012

Exhibit 19.4.1.119.2.2

  

Form of 5.375% Notes due 2020 and related Guarantee

Incorporated by reference to Exhibit 99(C) to AngloGold Ashanti Limited and AngloGold Ashanti Holdings plc’s Registration Statement on Form 8-A (Nos. 001-14846 and 001-34725) filed on April 28, 2010

Exhibit 19.2.3

Form of 6.50% Notes due 2040 and related Guarantee

Incorporated by reference to Exhibit 99(C) to AngloGold Ashanti Limited and AngloGold Ashanti Holdings plc’s Registration Statement on Form 8-A (Nos. 001-14846 and 001-34725) filed on April 28, 2010

Exhibit 19.2.4

Form of 5.125% Notes due 2022 and related Guarantee

Incorporated by reference to Exhibit 4.1 to AngloGold Ashanti’s report on Form 6-K furnished to the Securities and Exchange Commission on July 30, 2012

Exhibit 19.2.5

Indenture for guaranteed debt securities among AngloGold Ashanti Holdings Finance plc, as issuer, AngloGold Ashanti Limited, as guarantor, and The Bank of New York Mellon, as trustee, dated as of September 22, 2010

Incorporated by reference to Exhibit 99(D) to AngloGold Ashanti Limited and AngloGold Ashanti Holdings Finance plc’s Registration Statement on Form 8-A (Nos. 001-14846 and 001-34881) filed on September 22, 2010

Exhibit 19.2.6

First Supplemental Indenture for guaranteed debt securities among AngloGold Ashanti Holdings Finance plc, as issuer, AngloGold Ashanti Limited, as guarantor, and The Bank of New York Mellon, as trustee, dated as of September 22, 2010

Incorporated by reference to Exhibit 99(E) to AngloGold Ashanti Limited and AngloGold Ashanti Holdings Finance plc’s Registration Statement on Form 8-A (Nos. 001-14846 and 001-34881) filed on September 22, 2010

Exhibit 19.2.7

Second Supplemental Indenture for guaranteed debt securities among AngloGold Ashanti Holdings Finance plc, as issuer, AngloGold Ashanti Limited, as guarantor, and The Bank of New York Mellon, as trustee, dated as of October 18, 2010

Incorporated by reference to Exhibit 4.8 to AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc and AngloGold Ashanti Holdings Finance plc’s Registration Statement on Form F-3 (No. 333-182712) filed July 17, 2012

Exhibit Number

Description

Remarks

Exhibit 19.2.8

Form of 6.00% Mandatory Convertible Subordinated Notes due 2013 and related Guarantee

Incorporated by reference to Exhibit 99(C) to AngloGold Ashanti Limited and AngloGold Ashanti Holdings Finance plc’s Registration Statement on Form 8-A (Nos. 001-14846 and 001-34881) filed on September 22, 2010

Exhibit 19.2.9

Trust Deed for guaranteed debt securities among AngloGold Ashanti Holdings Finance plc, as issuer, AngloGold Ashanti Limited, as guarantor, and The Law Debenture Trust Corporation p.l.c., as trustee, dated as of May 22, 2009

Incorporated by reference to Exhibit 99.1 to AngloGold Ashanti’s registration statement on Form F-3 (No. 333-182712) filed July 17, 2012

Exhibit 19.4.1.1

AngloGold Limited Share Incentive Scheme in effect April 4, 2003

  

Incorporated by reference to Exhibit 19.4(c) of AngloGold’s annual report on Form 20-F filed with the Securities and Exchange Commission on June 28, 2002

Exhibit 19.4.1.2

  
Exhibit 19.4.1.2

Bonus Share Plan in effectas amended on May 6, 2008March 27, 2013

  

Incorporated by reference to Exhibit 19.4.1.2 of AngloGold’s annualAngloGold Ashanti’s report on Form 20-F filed withform 6-K furnished to the Securities and Exchange Commission on May 19, 2008April 10, 2013

Exhibit 19.4.1.3

  
Exhibit 19.4.1.3

Long-Term Incentive Plan in effect April 29, 2005as amended on March 27, 2013

  

Incorporated by reference to Exhibit 19.4.1.3 of AngloGold Ashanti’s annual report on Form 20-F filed withform 6-K furnished to the Securities and Exchange Commission on March 20, 2006April 10, 2013

Exhibit 19.4.4

  
Exhibit 19.4.1.6Sale and Purchase

Syndicated Loan Facility Agreement dated January 27, 2009July 20, 2012, by and among AngloGold Ashanti AustraliaHoldings plc and AngloGold Ashanti USA Incorporated, as borrowers, AngloGold Ashanti Limited, AngloGold Ashanti Limited, Saddleback Investments Pty Ltd, Newmont Boddington Pty Ltd, Newmont Mining Corporation, Newmont Australia LimitedHoldings plc and BGM Management Company Pty Ltd.AngloGold Ashanti USA Incorporated, as guarantors, Barclays Bank plc, as facility agent, and the financial institutions party thereto as lenders

  Incorporated by reference to Exhibit 19.4.1.6 of AngloGold’s annual report on Form 20-F filed with the Securities and Exchange Commission on May 5, 2009

Filed herewith

Exhibit 19.4.5

  

Syndicated Bridge Loan Facility Agreement dated February 18, 2013, by and among AngloGold Ashanti Holdings plc, as borrowers, AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Incorporated, as guarantors, Citibank International plc, as facility agent, and the financial institutions parties thereto as lenders

  

Filed herewith

Exhibit 19.6

  

Statement regarding how loss/earnings per
share information was calculated

  

See note 98 to the consolidated financial statements

Exhibit 19.8

  
Exhibit 19.8

List of AngloGold Ashanti Limited subsidiaries

  

Exhibit Number

  

Description

  

Remarks

Exhibit 19.12.1

  

Certification of Mark Cutifani,Tony O’Neill and Srinivasan Venkatakrishnan as joint Chief Executive OfficerOfficers of AngloGold Ashanti Limited, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

  

Exhibit 19.12.2

  
Exhibit 19.12.2

Certification of Srinivasan Venkatakrishnan, Chief Financial Officer of AngloGold Ashanti Limited, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

  

Exhibit 19.13

  
Exhibit 19.13

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

  

Exhibit 19.15.1

  
Exhibit 19.15.1

Consents of Ernst & Young Inc., independent registered public accounting firm

  

E-2


Exhibit 19.15.2

  
Exhibit NumberDescriptionRemarks
Exhibit 19.15.2

Consent of KPMG Inc., independent registered public accounting firm

  

Exhibit 19.15.3

  
Exhibit 19.15.3Consent of KPMG, independent registered public accounting firm
Exhibit 19.15.4

Consent of BDO Stoy Hayward LLP, independent registered public accounting firm

  

Exhibit 19.16

  
Exhibit 19.16

Report on MSHA violations in terms of the Dodd-Frank Act 2010

  

E-3

E-4