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
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.
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;
availability and cost of mining and processing equipment;
availability and cost of skilled labour, 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 demand
AngloGold Ashanti may prove unable to successfully develop the La Colosa and Gramalote projects in Colombia, as well as other potential exploration sites 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 11 March 2013, Cortolima, a regional environmental authority in Colombia, issued an injunction against AngloGold Ashanti’s Colombian subsidiary, AngloGold Ashanti Colombia S.A. (AGAC), alleging that the subsidiary was operating costwithout proper permits and capital expenditure estimates could fluctuate considerablywas 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 nearby community. AGAC’s subsequent request to have the injunction annulled was denied by the Director of Cortolima on 27 May 2013, and as a result, the injunction remains in place. Local residents of changesa near-by community, as well as, local and regional government voted in a non-binding referendum to prevent certain mining activities in the prices of commodities consumedPiedras municipality. Local authorities have attempted to introduce regulatory measures seeking to implement such preventative measures and AGAC has initiated legal proceedings challenging such measures. As a result, protracted litigation may ensue, which could adversely affect AngloGold Ashanti’s ability to conduct any mining equipment usedor related activities in the construction and operation of mining projects.
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.
Mining companies face uncertainty and risks in exploration, feasibility studies and other project evaluation activities.
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.
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 mineralizedmineralised 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 mineralizationmineralisation 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:environmental, 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.
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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, forecasts of commodity prices, 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 existing 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.
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 itsthe 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.
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;
ground and surface water pollution;
social 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;
labour 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.
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Seismic activity may also cause thea 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.
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 infrastructures 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 specialised 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 are, along with international and industry standards, designed to protect and improve the safety and health of employees.
From time to time, new or improvedupdated health and safety laws, regulations and regulationsstandards are introduced in jurisdictions inand may be more stringent than those to which AngloGold Ashanti operates.is currently subject. Should compliance with newthese laws, regulations and standards 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 continues to implement its enhanced safety programme, 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.
A working group comprised of the inspectorate, the mining industry and organised labour 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 and countries in which they operate.
As a result of public concern about the perceived ill effects of economic globalization,globalisation, 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.
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 minimizeminimise 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 compensation for any adverse impactlivelihoods of those impacted. In addition, AngloGold Ashanti is obliged to comply with the terms and conditions of all the mining operationrights it holds in South Africa. In this regard the Social and Labour plan provisions of our mining rights must make provision for local economic development (“LED”) programmes that take into account the social and economic conditions in areas in which their mines operate. The LED programmes must take into account the key economic activities of the area in which AngloGold Ashanti operates its mines, the impact its mines will have on the local and labour-sending communities, various infrastructure and poverty eradication projects its mines may continuebe supporting in connection with integrated development plans in the areas its mines operate and also must provide for measures that assist in addressing housing and living conditions of its employees.
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 organisations, community groups and institutional investors, have raised concerns and, in the case of some individuals in Obuasi, threatened or commenced litigation, relating to have uponair pollution or surface and ground water quality, among other issues, in the community. 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 three days, which contributed to the operation’s decline in production as compared to 2010. Delays in projects attributable to a lack of community support can translate directly into a decrease in the 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); water treatment and discharge; regulatory and community reporting; clean-up of contamination; community health; and the generation, transportation, storage and disposal of solid and hazardous wastes, such as reagents, radioactive materials, and mine tailings.
The cost of compliance with environmental laws and regulations is expected to continue to be significant to AngloGold Ashanti.
In addition, unknown environmental hazards may exist on the company’s properties which may have been caused by previous owners or operators. An incident at AngloGold Ashanti’s operations could lead to obligations to remediate environmental contamination and claims for property damage and personal injury from adjacent communities and other consequences. Incidents at AngloGold Ashanti operations and other companies’ operations could result in the tightening of regulatory requirements and restrictions on mining operations.
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.
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, brought legal proceedings against AngloGold Ashanti Colombia S.A. (AGAC) alleging that AGAC 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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For example, the use of sodium cyanide in metallurgical processing is under increasing environmental scrutiny and is prohibited in 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 certain cases, lead to community protest and ultimately to the withdrawal of community and government support for AngloGold Ashanti’s operations. A failure by the company to comply with water contamination rehabilitation directives may result in further, more stringent, directives being issued against the company, which may, in some cases, result in a temporary or partial shutdown of some of the company’s 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 was adversely affected by a severe drought from 2010 through 2013 when 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 our 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.
Mining companies are required by law to close their operations at the end of the mine life and rehabilitate the lands they mine.impacted areas. 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 infrastructure and facilities design 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 $728 million as at 31 December 2013, compared with $841 million as at 31 December 2012. The changes were a consequence of a number of factors, most notably an increase in the group discount rate used in the calculation of the obligation and changes in the timing of the future cash outflows relating to the obligation. The group discount rate increased as a result of adjustments to both country, e.g. South Africa, and company credit ratings. 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.
government, elected in late 2010,2013, has established an intensive processhowever announced its intention to gauge supportrepeal the tax, and shape debatethe Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 was introduced into the Federal Parliament on possible interventions, including introduction of a carbon price, to address climate-change impacts in Australia. Its stated intention is to achieve consensus and announce 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. AngloGold Ashanti may13 November 2013. There can be required under this scheme to purchase allowances for emissions possibly starting in 2011. The company is already required to report its GHG emissions to the Australian government under the National Greenhouse and Energy Reporting Act.
In February 2013, the timingSouth African Minister of this is uncertain.
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Compliance with ‘conflict minerals’ and ‘responsible gold’ legislation and standards could result in communitiessignificant costs.
More stringent standards relating to ‘conflict minerals’ and ‘responsible’ gold that include the: US Dodd-Frank Act; European Legislative proposal for conflict minerals; Organisation for Economic Cooperation and Development Due Diligence Guidelines for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas; World Gold Council Conflict Free Gold Standard; and London Bullion Market Association Responsible Gold Guidance have been introduced.
Any such legislation and standards may result in close proximitysignificant costs to its operations.
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.
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.
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. Although potential supply chain disruption in Mali, as a result of the coup d’état and the proliferation of armed combat in 2012 and 2013, has been avoided to date by well managed consumable stock holding, any return to instability or armed conflict in the country could present material supply chain difficulties. Moreover, although 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 minimised with the introduction of alternative transportation arrangements, such alternatives may not be available upon the occurrence of similar or more severe situations in the future. 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, capitalizescapitalises 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 may, 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, negative effects on our reported financial results, and adversely affect our reputation.
AngloGold Ashanti’s operations must comply with the United States Foreign Corrupt Practices Act and similar anti-corruption and anti-bribery laws of the jurisdictions in which AngloGold Ashanti operates. There has been a substantial increase in the global enforcement of these laws. Although AngloGold Ashanti has a compliance programme in place designed to reduce the likelihood of violations of such laws, any violation could result in significant criminal or civil sanctions. Since AngloGold Ashanti operates globally in multiple jurisdictions, including those with less developed political and regulatory environments, and within 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, negative effects on AngloGold Ashanti’s reported financial results 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.
The sophistication and magnitude of cybersecurity incidents are increasing and include: malicious software; attempts to gain unauthorised access to data and other electronic security and protected information breaches that could lead to production downtimes, operational delays, the compromising of confidential or otherwise protected information, destruction or corruption of data, other manipulation or improper use of AngloGold Ashanti systems and networks or financial losses from remedial actions.
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 itsdoes not have any gold hedging instruments andor long-term sales contracts, which exposesexposing the company to potential gains from subsequent commodity price increases but exposesexposing it entirely to subsequent commodity price decreases.
We removed the last of itsour 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 a rating agency on 17 October 2012. In July 2013, two ratings agencies lowered the company’s long-term credit rating. The reason for the latest reduction was given as agency concern that AngloGold Ashanti will generate negative free cash flow and would experience a more pronounced rise in debt with significantly lower gold prices than previously assumed.
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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Labour unrest, activism and disruptions (including protracted stoppages) 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 unionised. Trade unions, therefore, have a significant impact on the company’s labour 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 labour force is unionised or there is inter-union rivalry. Labour disruptions may be used to advocate labour, political or social goals in the future. For example, labour disruptions may occur in sympathy with retrenchments, strikes or labour unrest in other sectors of the economy and for political goals. Labour unrest in South Africa can also be fuelled by migrant labour conditions and mine worker debt levels. Furthermore, such labour 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 labour unrest.
In addition, the emergence of the Association of Mineworkers and Construction Union (“AMCU”), a relative newcomer with respect to AngloGold Ashanti’s South African operations and the gold sector as a whole, impacted productivity in 2013, as employees changed union affiliations and rivalry with the established National Union of Mineworkers increased. This was evidenced during the first half of 2013 by sporadic, unprotected work interruptions at some operations and some incidents of violence and intimidation.
Lower production and payroll increases resulting from the labour 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.
In South Africa, amendments to labour legislation have been proposed, which, if implemented, may have negative consequences for the company. For example, the proposed amendment with respect to labour brokers could mandate that labourers who are provided by labour brokers to perform certain services for us could be viewed as AngloGold Ashanti’s employees, which could increase its labour costs and reduce operational flexibility.
In South Africa, the restructuring of mining operations that result inlay-offs or redundancies are currently a highly contentious matter. While the Department of Minerals and Energy does not have any statutory right on the basis of existing labour legislation to intervene in any such restructuring process, it may intervene by placing external pressure on mining companies in respect of the renewal or cancellation of their mining rights.
On 10 February 2014 workers employed by a contractor at Sadiola and Yatela went on a five day strike demanding improved redundancy payments. On 25 March 2014, the company signed an agreement to increase workers social benefits for workers at these mines.
Increased labour costs could have a material adverse effect on AngloGold Ashanti’s results of operations and financial condition.
Labour 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 labour costs may have a material adverse effect on AngloGold Ashanti’s results of operations and financial condition. In 2013, the cost of salaries and wages increased by around 9 percent over 2012 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. In mid-July 2013, the Chamber of Mines of South Africa undertook wage negotiations on behalf of the gold sector. Wage negotiations were completed following the 48-hour strike at the company’s Vaal River operations and a wage agreement was extended to all employees irrespective of union affiliation. At present, the mining unions and gold mining companies in South Africa are in the first year of the latest two-year wage agreement, with the latest increases of up to 8 percent as well as increases in living-out allowances awarded to the majority of the workforce in September 2013. At the start of 2014, AMCU embarked upon protracted strike action in the platinum sector and served strike notices at three gold companies to challenge the extension of the 2013 Wage Agreement for AMCU members to obtain substantially higher wages. An interim interdict prohibiting the strike was granted to the Chamber of Mines by the Labour Court in Johannesburg in January 2014. AMCU must return to court on 14 March 2014 and explain why the interim interdict should not be made permanent. This was subsequently postponed to 5 June 2014.
As at 31 December 2013, approximately 59.4 percent of the company’s workforce, excluding contractors, were located in South Africa.
AngloGold Ashanti’s results may be further impaired if it incurs penalties for failing to meet standards set by labour laws regarding workers’ rights or incurs costs complying with new labour 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. See “Item 4B: Business Overview—The Regulatory Environment Enabling AngloGold Ashanti to Mine”. 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. Fornationalisation, 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 nationalised 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, authorisations, licences and permits are subject to expiry, limitations on renewal and various other risks and uncertainties. For example, Ashanti Goldfields Kilo SARL’s (“AGK”) licenses to mine the Mongbwalu concession in the Democratic Republic of the Congo (DRC) are up for renewal in 2014. AGK filed its renewal application in this regard in December 2012. AGK may not be successful in the renewal process or in retaining the license on the same terms. In addition, any dispute with governments or other stakeholders, including labour unions, involving an AngloGold Ashanti operation, as a result of rationalisation efforts or otherwise, could negatively affect AngloGold Ashanti’s relationship with such government or stakeholders in respect of other operations within the same country, which could result in adverse consequences, including unfavourable regulatory action, claims and labour disputes. Such adverse consequences could be exacerbated due to the holding company structure of AngloGold Ashanti’s subsidiaries in some of the countries in which it operates.
In October 2012, the DRC 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, reduce in a significant way the protections AngloGold Ashanti currently enjoys on its projects in the DRC, impose significant limitations on the company’s ability to retain and renew licences 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.
Moreover, AngloGold Ashanti’s mining rights in South Africa may be suspended or cancelled by the Minister of Mineral Resources, and we may be unable to obtain new mining rights if we breach our obligations under the MPRDA.
AngloGold Ashanti’s insurance does not cover most losses caused by the risks described above, see “– 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”.
If AngloGold Ashanti is not able to obtain or maintain necessary permits, authorizationsauthorisations 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 nationalizenationalise 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.
Moreover, amendments to the Mining Charter andlaws regulating mining in South Africa became effective on 7 June 2013. One of these amendments relates to the scorecard.
Title to the Minerals Industry (Code)company’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 Housingprecise area 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 implementationlocation 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 wouldcompany’s claims may 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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AngloGold Ashanti may experience unforeseen difficulties, delays or costs in successfully implementing its business strategy and itsprojects, including any cost-cutting initiatives, temporary or permanent shutdowns, divestments and other portfolio rationalisation 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; thecosts. 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, temporary or permanent shutdowns, divestments, 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, labour unrest, operating licence withdrawal, and potential knock-on effects to other company projects and jurisdictions. The risk is elevated in South Africa, given calls for withdrawal of mining licences for ‘mothballed shafts’ and hostile reaction to proposed mining industry retrenchments. The risk may also be elevated in Ghana, where AngloGold Ashanti is considering potential rationalisation or other plans for the mine, and also in the DRC as the company seeks to reduce its interest in the Mongbwalu project, see “– 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”.
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.
Expectations for and trends in the price of gold, combined with increased costs for project financing and exploration in certain regions, have led AngloGold Ashanti to increase its efforts to focus capital expenditure on its highest quality assets, while freeing up capital by curtailing capital expenditure or suspending operations at those projects that unforeseenthe company believes are of lower quality. AngloGold Ashanti may also consider finding partners or conducting asset sales relating to certain of its projects. With respect to dispositions, the company may not be able to obtain prices that it expects for the assets it seeks to dispose of or divest some of its activities as planned or to obtain all of the required approvals, and the divestitures that are carried out could have a negative impact on AngloGold Ashanti’s business, results of operations, financial condition and reputation.
AngloGold Ashanti may also prove unable to deliver on production targets, including in potentially critical areas as well as on the timely, cost-effective and successful execution, including ramping-up, of key capital projects, including at the Tropicana project in Australia, and the Kibali project in the DRC.
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.
gold in 2011, and 1.78 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. In 2013 however, AngloGold Ashanti produced 1.30 million ounces from its South African operations.
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, realising anticipated synergies and maximising 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 and reliability issues relating to ageing infrastructure are of concern at many operations, but 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 includedfeed-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 approximately 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, amongst other matters. 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 minimise 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 realise the anticipated benefits could result in increased costs, an inability to realise production or growth plans, or adversely affect its operational performance.
The level of AngloGold Ashanti’s indebtedness could adversely impact its business.
As at 31 December 31, 2010,2013, AngloGold Ashanti had gross borrowings (excluding the mandatory convertible bonds) of approximately $1.9 billion.
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, and in particular the gold price, 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.
Certain factors may affect AngloGold Ashanti’s ability to support the carrying amount of its property, plant and equipment, acquired properties, investmentsintangible assets and goodwill on the balance sheet. If the carrying amount of its assets is not recoverable, AngloGold Ashanti may be required to recognizerecognise 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 flowsa recoverable amount for each group of assets. Expected future cash flows are inherently uncertain, and could materially change over time. TheyRecoverable amounts 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.
If any of these uncertainties occur, either alone or in combination, management could be required to recognizerecognise an impairment, which could have a material adverse effect on the company’s financial condition and results of operations.
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AngloGold Ashanti’s existing Board-approvedboard-approved development projects and exploration initiatives will require significant funding. These include Tropicanainclude: Mponeng Below 120 Project in Australia,South Africa; the Cerro Vanguardia heap leachKibali project in Argentina, the Mponeng Ventersdorp Contact Reef Projects in South Africa, Córrego do Sítio and Lamego in BrazilDemocratic Republic of the Congo; and the mine life extension project (MLE1)(MLE2) at Cripple Creek & Victor in the US.
Potential future exploration projects, feasibility studies, and development projects will also require significant funding, if and when approved by the AngloGold Ashanti Board. These include the La Colosa and Gramalote projects in Colombia, the Kibali and Mongbwalu projects in the DRC, the Mponeng CLR and Zaaiplaats projects in South Africa, the Cerro Vanguardia underground mining project in Argentina, the Nova Lima Sul project in Brazil, the Sadiola Deeps project in Mali, Cripple Creek & Victor further mine life extension project (MLE2) in the US, as well as various other exploration projects and feasibility studies.
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, including volatile or sustained lower gold prices, 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 operated 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.
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,Furthermore, 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 realisation 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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Past experience demonstrates that face political, tax and economic and/or security risks.
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.
In many of the countries in which AngloGold Ashanti hasoperates, there is an on-going focus by governments seeking greater economic benefit and increased financial and social benefits from extractive industries and mining in particular. This entails the review of mining codes and stability agreements, which were in many cases designed under economic conditions, 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. The laws, policies and regulations are increasingly uncertain, changing and generally require progressively higher payments to governments, notably in the past experienced,form of increased royalties and in certain cases continue to experience, a difficult security environment as well as political instability.taxes, mandated beneficiation, export levies and increasing or retaining state or national ownership of resources. In particular, various illegal groups active in regions in whichchanges to the company are presentfiscal terms governing AngloGold Ashanti’s operations may pose a credible threat of terrorism, extortion and kidnapping, which could have an adverse effect on its operations in such regions. In the event that continued operations in these countries compromise the company’s security or business principles, AngloGold Ashanti may withdraw from these countries on a temporary or permanent basis. Furthermore, the company has at times experienced strained relationships with some of the communities in which it operates. This could have a material adverse impact on AngloGold Ashanti’sthe company’s results of operations.
For example on 9 September 2011, a new mining code for Democracy and Development, led by Moussa Dadis Camara, seized powerGuinea was enacted. The new mining code significantly increased the share of state ownership in Guinea after the deathmining industry, extending a 15 percent share of future mining projects to the country’s long-standing president Lasana Conte. On December 3, 2009, President Camara was shot and injured ingovernment, without financial compensation. The government also had the option to purchase up to an apparent assassination attempt and subsequently signed a transition agreement allowing for presidential elections and the transferadditional 20 percent of Guinea back to civilian rule. A 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, 2010 and ultimately Alpha Conde was sworn in as Guinea’s president on December 21, 2010. Some unrest and protest accompanied and followed the elections.each project. However, the elections were deemed successfulnew mining code was suspended in October 2012 due to unfavourable reception. On 8 April 2013, the Guinean parliament voted to amend the 2011 Mining Code. The amendment was promulgated shortly after by Presidential Decree on 17 April 2013. The new legislation provides that existing mining conventions will be amended through addenda which will contain various provisions, including provisions relating to taxation, state equity participation in mining companies and Conde was installed as Guinea’s first democratically elected president. In early 2011, Conde confirmed his commitmentother matters.
The government of Ghana amended its fiscal mining regime, increased its corporate taxation to 35 percent and royalty rates of 5 percent. Furthermore, the government of Ghana has constituted a review of allcommittee to review and re-negotiate stability agreements with 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 andcompanies. AngloGold Ashanti is currently unable to predictparticipating in negotiations with the timing andGhanaian review committee. The outcome of suchthese negotiations may have a material adverse effect on the company’s results of operations or financial condition.
AngloGold Ashanti Limited and other major mining companies are in talks with the Tanzanian 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. On April 26, 2011 it was announced by Reuters that a copyThe new mining legislation and the outcome of the new draftreview of the mining code includescontracts may have a compulsory 15material adverse impact on the company’s results of operations and financial condition. Recently, the Tanzanian Minister of Energy and Minerals increased the royalty rate levied on gold extracted in Tanzania by AngloGold Ashanti’s operations by 1 percent stake forand this has a direct impact on the revenues earned from the operations in Tanzania. Proposed Tanzanian regulations set out the requirement to sell shares to nationals, by way of a public offering and listing on the Dar es Salaam Stock Exchange that may apply to companies that carry out large scale mining operations.
In October 2012, the DRC 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 with an option to acquire an additional 20 percent. Also according to Reuters, included35 percent from the existing 5 percent, double royalties on some minerals, reduce in a significant way the protections AngloGold Ashanti currently enjoys on its projects in the draft mining code are provisions forDRC, impose significant limitations on the company’s ability to retain and renew licences and introduce a new “Local Empowerment Fund”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 1 July 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 mineral deposits and mining and exploration operations are located in countries that are experiencing social and political instability as well as economic uncertainty. For example, in South Africa, country risk has increased in light of the violent strike action, social unrest and protest. The risk of contagion from the tense industrial relations
environment in the platinum sector remains, despite the government’s efforts. The high levels of unemployment, poverty and inequality remain, further increasing the risk of social instability that will be funded fromcontinue to negatively impact the South African economy, business and the mining industry.
In December 2012, though the ruling African National Congress rejected the concept of wholesale nationalisation, a. ‘resource rent’ tax levies,on windfall profits has been discussed, and it is uncertain whether such a tax will become law. The MPRDA Amendment Bill of 2013, passed by the National Assembly of Parliament of the Republic of South Africa on 12 March 2014, could impact AngloGold Ashanti’s business by empowering the Minister of Mines to set developmental pricing conditions for certain minerals for beneficiation purposes, impose export permits on designated minerals and give the State an open-ended free carried interest and State participation.
In June 2013, the Brazilian government announced increased royalties of up to 4 percent and changes to exploration rights.
Mining is a long term activity and assets may be located in jurisdictions with elevated risk. Political instability and the price reference point used for tax purposes fromresulting unstable business environment in such countries in which companies operate may discourage future investment in those jurisdictions, and may have an adverse impact on the free-on-boardcompany’s ability to a rolling three-month average from the London Metals Exchange. access new assets, potentially reducing growth opportunities.
AngloGold Ashanti continuesis subject to monitoran 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 situation.
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 assessmentsFor example, AngloGold Ashanti calculates that overdue recoverable value added tax, fuel duties and unresolved tax disputes in a numberappeal deposits of countries, including Brazil, Argentina and Ghana. If the outstanding VAT input taxes$71 million are not received, the tax disputes are not resolved and assessments favorableowed to AngloGold Ashanti areand held by the Tanzanian government and it is not made, there could be an adverse effect upon the company’s results of operations and its financial condition.certain when AngloGold Ashanti may alsowill be impacted by the outcome of elections in jurisdictions in which it has operations and ancillary political processes leading up to elections. refunded this amount, if at all.
The company expects elections to occur in the DRC in 2011 and in South Africa in 2014.
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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, authorisations 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 the end of 2014 and that HDSAs must constitute 40 percent of all levels of management by 2014. In 2013, AngloGold Ashanti achieved all Mining Charter targets with the exception of senior management (33 percent versus the target of 40 percent) and in the procurement services area (57 percent versus the target of 60 percent).
While AngloGold Ashanti believes that it will be compliant with ownership targets to be achieved by the end of 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 the end of 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 (MPRDA), 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 organisation and funding of criminal activity around some of the company’s Continental African operations. This trend has stabilised, but in 2013, intrusions onto the company’s tenement and operational areas resulted in a marked increase in crime, specifically illegal mining related activities. Despite this negative trend, the ongoing efforts to implement the company’s ‘community enhanced’ security plan at all its operations and a more focused stakeholder engagement has yielded positive results. Despite the increase in illegal activity and confrontation in 2013, only three potential human rights violation incidents were recorded in 2013, compared with nine during 2012. This is mainly attributable to significant improvements at the Geita and Obuasi mines. The most significant security challenges remain 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 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 categorise threats as serious enough to require resorting 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 continues to experience strained relationships with certain of its host communities. AngloGold Ashanti employeesoperates in South Africa, Ghana, Guineaseveral 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. During 2013 there were a total of twenty one community opposition incidents that were of minor or moderate consequence, mostly at the company’s exploration projects, particularly at Mongbwalu and in Colombia. There were five protests during 2013 at Cerro Vanguardia, Obuasi, Siguiri and Iduapriem.
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,properties, which leads at times to interference with the company’s operations and 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 highly unionized. Trade unions, therefore,frequently attributed to formal mining activity, and it is often assumed that artisanally-mined gold is channelled through large-scale mining operators, even though artisanal and large-scale miners have a significantdistinct supply chains. These misconceptions impact negatively on the company’s labor relations climate, as well as on socialreputation of the industry.
The activities of the illegal miners, which include theft and political reforms, most notablyshrinkage, could cause damage to AngloGold Ashanti’s properties, including pollution, underground fires, or personal injury or death, for which AngloGold Ashanti could potentially be held responsible. Illegal mining could result in South Africa. There isthe depletion 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. Furthermore, in 2012, the company recorded an increase in the number and severity of security incidents, due to a risk that strikes or other typessteady migration of conflict with unions or employees may occur at anypeople into the areas and an increase in the level of organisation and funding of criminal activity around some of the company’s Continental African operations, particularlylikely encouraged by an escalating gold price at that time. The most significant security challenges have occurred in Tanzania and Ghana in areas where the labor forcethere is unionized. Labor disruptions may be used to advocate labor, political or social goalsendemic poverty and high levels of unemployment. Illegal mining and theft could also result in the future. For example, labor disruptions may occur 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.
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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.
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.
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 withby 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,labour, AngloGold Ashanti is required to achieve employment equity targets of participation by HDSAs in management and other positions.
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, the executive officers at each of its business divisions and general managers at its mines.
The loss of one or more members of the senior management teams, coupled with the reduced attractiveness of the gold mining sector, 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.
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.
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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.
In response to the effects of silicosis in labor sendinglabour-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.
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.
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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.
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 wherewhen 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.
This risk has increased recently as some of the mining operations adjacent to AngloGold Ashanti operations in South Africa have been closed. For example, in May 2013, Village Main Reef (VMR) announced its intention to wind down its Buffels (Hartebeesfontein and Buffelsfontein) operations adjacent to AngloGold Ashanti’s Vaal River operations, effectively transitioning their operations to closure. Water must continue to be pumped from one of the Buffels shafts until the end of Vaal River life-of-mine and, accordingly, we have advised VMR that AngloGold Ashanti will seek to enforce VMR’s obligations for such pumping under the directive issued by the Department of Water Affairs in 2005. In the West Wits district, the risk of impact to AngloGold Ashanti’s operations is greater due to volume of water and depth (2.5km) coupled with the short timeframe within which to respond should pumping by VMR cease. VMR’s West Wits operations at Blyvooruitzicht were placed in provisional liquidation in August 2013. AngloGold Ashanti has secured a court order for access rights to Blyvoor 4 and 6 shafts to keep pumping going. AngloGold Ashanti has instituted legal action against VMR demanding that the entity continue to pump and manage its own flooding risks.
The potential costs associated with the remediation and/orand prevention of groundwaterground water 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 ground water contamination plumes at certain of its operations that have occurred primarily as a result of seepage from surface operations and its financial condition.
Deep groundwater contamination is a significant issue in South Africa, where ground water 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 sulphide-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.
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 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 a significant number of notices 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. AngloGold Ashanti cannot predict whether or when more individual claims will be filed in the future or whether the classes described above or other classes will be certified. Should any such claims result in an adverse outcome for AngloGold Ashanti, or if AngloGold Ashanti is unsuccessful in otherwise favourably 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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In Colombia, the company is also involved in 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 favourably or to enforce its rights, this may have a material adverse impact on the company’s financial performance, cash flow and results of operations.
AngloGold Ashanti is implementing a single, global ERP system to support all the operations that it manages. The ERP system was planned for implementation over a three-and-a-half-year period which commenced in August 2011. The contemplated implementation and operationalisation of an ERP system on a global basis is inherently ahigh-risk initiative due to the potential for implementation cost and time overruns. In addition, such implementation could affect AngloGold Ashanti’s ability 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 the company’s results of operations and financial condition. The first sites went live during February 2013 and additional sites went live in May, August and November 2013. Recently, however, as part of the company’s efforts to maximise margins and rationalise capital expenditure in response to current operating conditions, it has again been considering the timing of the full implementation of the ERP system and the decision was made not to implement at Continental Africa operations immediately.
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 32.38 percent of AngloGold Ashanti’s ordinary shares as at 31 December 2013.
Poor returns, soaring costs, higher capital expenditure, ill-conceived corporate activity, rising geopolitical and labour 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, holdersHolders 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 articlesMemorandum of associationIncorporation allows 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.
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.
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.
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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 26 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
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.
Its registered office is at 76 Jeppe Street, Newtown, Johannesburg, South Africa, 2001.
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
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 | ||
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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 bid for Normandy Mining Limited.16.6 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 | ||
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The company acquired 100 percent of First Uranium (Proprietary) Limited for $335 million.
2013
Commissioning of two new gold projects – Tropicana and Kibali in the Gramalote Joint Venturesecond half of 2013.
| 4B. | BUSINESS OVERVIEW |
AngloGold Ashanti is a global gold mining and will become managerexploration company with a diverse portfolio of mining operations and projects on four continents, with more than 96% 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.
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PRODUCTS
By-products of our gold mining operations, often a much sought after sourcefunction 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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OPERATIONS
Following a dynamic operating and regulatory environment. These evaluations allow for tactical adjustments necessary to achieve the ultimate goal of becoming “the leading mining company”.
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The business segments comprise South Africa, Continental Africa, Americas and Australasia. South Africa comprises operations and assets in South Africa namely West Wits, Vaal River and surface operations, which includes First Uranium SA which owns Mine Waste Solutions (MWS). The company’s operating assets outside of South Africa are Continental Africa with operations in the balance derivedDRC, Ghana, Guinea, Mali, Namibia and Tanzania. Australasia which comprises two operations in Australia. Americas with operations in Argentina, Brazil and the United States. The Chief Operating Officer (South Africa) is accountable for the South African operations whilst the Chief Operating Officer (International) is accountable for operations in Continental Africa, Americas and Australasia. The support functions from salescorporate consist of silver, uranium oxidestrategy, finance, human resources, legal, sustainability, stakeholder relations and sulfuric acid. These products are soldplanning and technical. Planning and Technical focuses on international markets.
Despite the addition of two new mining operations, Kibali and Tropicana, which began production in the second half of 2013, the number of AngloGold Ashanti operations in 2013 remained unchanged at 21. Following the restructuring of the portfolio, Savuka is now reported together with TauTona and MWS is included in the reporting of Surface Operations as a separate cash generating unit.
On 10 February 2014 a binding agreement to sell Navachab was signed, subject to certain conditions.
EXPLORATION
AngloGold Ashanti’s mining operationsbrownfield and greenfield exploration programmes take place in both established and new gold producing regions through managed and non-managed joint ventures, strategic alliances and wholly-owned ground holdings. Greater emphasis is processed tobeing placed on brownfield exploration and a saleable formfew key greenfield opportunities carefully identified by management in Colombia, Guinea, and Australia.
GOLD MARKET
AngloGold Ashanti’s gold is refined at various precious metalsmetal refineries. Once gold isIn refined to thisand marketable form, (normally largegold normally takes the shape of bars, weighing aboutvarying in size from 12.5 kilograms and containing 99.5 percent gold, orkilogram to smaller bars of equal or greater purity weighing 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.
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The decline in the gold price was related to several factors, most notably a decision by the US Federal Reserve to start slowing its monetary stimulus, or quantitative easing programme, which together account for some 90 percent of total demand. The balance of gold supply ishad been used in dentistryto inject liquidity into financial markets and electronics.
Investment demand
Steady liquidation of gold held in exchange traded funds (ETFs) persisted throughout 2013. A total of 29Moz was sold from combined ETF holdings in 2013, more than the total invested in gold demand but consumers remained cautious given the rising price. Elevated prices, however, kept recycling at customary levels.
Despite these sales, largely by institutional investors, according to the World Gold Council (WGC), demand of 48Moz for 2010 was around 330 tonnes, in line with annual average growth rates since 2003. In 2009, however,bars and coins from the retail sector, more than matched supply of 26Moz from ETF holdings grew by 617 tonnes in a year that saw a 24 percent rise in the gold price. In 2010, ETF growth was significantly slower despite a 30 percent rise in the price of the metal. However, the value of the gold ETF market grew by 55 percent to $34 billion.
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Central banks periodically sell or addhave generally been a strong source of demand since 2010, the year in which they reversed decades of net selling. Official sector net purchases of 14.6Moz in 2011 rose to their gold reserves. Most central bank sales take place under so-called Central Bank Gold Agreements (CBGA), which compel signatories to sell17.2Moz 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.
Jewellery demand
In addition to the purchasedemand for bars and coins, the jewellery market was also robust, with Chinese and Indian jewellery markets absorbing much of the metal from ETF liquidation. Indian demand increased in 2013 despite tariffs imposed by the Reserve BankIndian government on gold imports in an attempt to curb a burgeoning current account deficit. In China, total demand for bars, coins and jewellery of 34Moz in 2013 compared with 26Moz in 2012. In India, demand for these categories totalled 31Moz in 2009 of roughly half the 403 tonnes offered, Mauritius, Sri Lanka2013 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.
RAW MATERIALS
AngloGold Ashanti has remained committed to growinguses chemicals including cyanide and lime in the production of gold. These chemicals are available from a large number of suppliers.
COMPETITION
As gold market.
INTELLECTUAL PROPERTY
AngloGold Ashanti, as a group, is not dependent on intellectual property for the bulkconduct of marketing expenditure. AngloGold Ashanti also remains involved in independent projectsits business as a whole.
SEASONALITY
Subject 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 designother factors and has become a well-recognized corporate marketing tool. See the competition website at www.goldauditions.com.
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STRATEGY
Our long-term objective is to climb throughout 2010, exceeding 500 million ounces at year end. This represents an increase of some 100 million ounces.create value for shareholders, employees and business and social partners by safely and responsibly exploring for and mining gold. In additionthe short- and medium-term, we aim to deliver sustainable improvements in cash flow and returns to all our stakeholders.
Strategic focus areas
AngloGold Ashanti’s five strategic focus areas are set out below:
Focus on people, safety and sustainability, people – employees and communities – are our business. We focus on employing, deploying and developing the significant ETF boost, GFMS estimated that silver coin minting rose 23 percent in 2010right people, and reports suggest continued robust physical demand for silver barson providing them with meaningful employment and coins in North America.
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Ensure financial flexibility, we continue to share best practices acrossoptimise our balance sheet by diversifying our sources of funding and reducing debt, if appropriate, so as to ensure the group.financial flexibility required to support our overall strategy.
Optimise overhead, costs and capital expenditure, we aim to optimise all spending – capital expenditure, operating costs, expensed exploration and overheads – to provide a competitive all-in sustaining cost of new projects takes into account closure and associated costsproduction in 2014. There is 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 (annually in the final three years of a mine’s life) or whenever significant changes are made, and take into account operational conditions, planning and legislative requirements, international protocols, technological developments and advances in practice. The interim plan becomes a final plandrive at least three years before closure is anticipated.
Improve portfolio quality, a key objective is to improve the quality and diversity of our portfolio. In 2014, we aim to achieve this by adding between 550,000oz and 600,000oz to production – from our new operations Tropicana and Kibali – at costs that are lower than the evaluationgroup average, and by optimising mine plans to remove marginal or loss-making production where sensible. Continuing business improvement initiatives will emphasise the quality rather the quantity of environmental liabilities is a complex process. This is particularly the caseounces produced.
Maintain long-term optionality, we will continue to invest in Brazil, Ghana and South Africa, where many of the long-life operations present environmental legaciesdevelop new technology 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, whichtransform access to deep-level underground Mineral Resources in South Africa. We will continue to seek cost-effective opportunities both around our existing gold mines and in new regions, for example, the company might wish to exploit should conditions, such asTropicana belt in Australia, Guinea’s Siguiri belt and a collection of highly prospective areas in Colombia.
Managing performance
The five strategic focus areas are reflected in the gold price, change.
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, labour standards and employment issues, occupational health, mine safety, toxic substances and wastes, 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.
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 1 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 became effective on 7 June 2013. 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.
45When the MPRDAA came into effect on 7 June 2013, only selected provisions became effective immediately. The MPRDAA contains the following provisions, among others:
Prohibition on any prospecting and mining, or conducting technical co-operation operations, reconnaissance operations or any incidental work without an environmental authorisation (from 7 December 2014), permit and at least 21 days’ written notice to the landowner or lawful occupier.
Historic residues: Provides that the definitions of “residue stockpile” and “residue deposit” now include an old order right. This provision is intended to make old order dumps subject to the MPRDA so that old order dumps which are part of a mining area covered by a new order mining right could only be treated by the holder of the new order rights. Old order dumps not covered by a new order mining right would be considered a residue deposit to which the Minister would have discretion to grant rights.
Applications: Provides that applicants for prospecting and mining rights must (after 7 December 2014) lodge an application for an environmental management programme/plan (EMP) simultaneously with the application for rights. The Department of Mineral Resources will no longer accept more than one application in respect of the same area and mineral.
Environmental Regulation: Provides that the Minister is the responsible authority for implementing environmental provisions in terms of the National Environmental Management Act (NEMA) as it relates to prospecting, mining, exploration, production or activities incidental thereto on a prospecting, mining, exploration or production area. An environmental authorisation issued by the Minister shall be a condition prior to the issuing of a permit or the granting of a right in terms of the MPRDA.
Closure Certificates: Provides that previous holders of old order rights or previous owners of works that have ceased to exist remain responsible for any environmental liability until the Minister issues a closure certificate.
On 27 December 2012, the Minister published the Draft Mineral and Petroleum Resources Development Bill, 2012 (2012 Bill) which sought to amend the MPRDA and invited the mining industry and interested and affected parties to comment on it by 8 February 2013. On 21 June 2013, a revised version of the Bill (2013 Bill) was introduced to the National Assembly. The 2013 Bill is now being considered by the South African Parliament.
The 2013 Bill seeks to amend the MPRDAA, to, amongst other things:
remove ambiguities;
provide for regulation of associated minerals; partitioning of rights, enhanced provisions on mineral beneficiation;
promote national energy security;
streamline administrative processes; and
enhance sanctions.
The 2013 Bill, as currently drafted, contains, among others, the following provisions:
Applications: The 2013 Bill proposes revising the application system by replacing the “first come, first served” system with a tender and allocation system. This would dramatically affect the way applications are made.
Beneficiation: The 2013 Bill extends the concept of beneficiation (which has been defined in the 2013 Bill as “transformation, value addition or downstream beneficiation of a mineral or mineral product (or a combination of minerals) to a higher value product, over baselines to be determined by the Minister, which can either be consumed locally or exported”) and would allow the Minister to prescribe the quantities, qualities and timelines at which certain designated commodities must be supplied to local beneficiators at a mine gate price or an agreed price. The reference to the mine gate price appears to suggest companies can recover costs, capital expenditure and make a profit. It is not clear whether the “agreed price” will have general application or whether it will be determined on a case-by-case basis. Another proposed amendment provides that written consent would have to be obtained before exporting of “designated minerals” if the producer or associated company has not offered minerals to local beneficiators. The Minister would have discretion to decide which minerals are to be designated.
Residue stockpiles: The MPRDAA’s inclusion of residue deposits and residue stockpiles in the definition of land, creating a “statutory accession” of movable dumps back to the land, is discussed above. The Bill would extend this definition to include historic mines and dumps created before the implementation of the MPRDA. The Bill also seeks to make these historic dumps subject to the MPRDA. This is to be achieved by making the working of these dumps subject to a mining right issued under the MPRDA. There is a transition period of two years to enable owners of these dumps to either apply for mining rights or incorporate them in existing mining rights.
Partitioning of rights and transfers of interests in companies: Section 11 of the MPRDA currently requires that transfer of a controlling interest in an unlisted company be consented to by the Minister. The 2013 Bill proposes amending the MPRDA so that transfer of a controlling interest in listed companies and transfer of any interest in unlisted companies must be consented to by the Minister. The 2013 Bill further proposes amending the MPRDA to allow for an application for ministerial consent to be made to transfer a part of a right.
Mine closure: The 2013 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 2013 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.
Legislative force of the Charter and Codes: The 2013 Bill proposes amending the definition of “this Act” in the MPRDA so that the MPRDA will include the Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry (the(Mining Charter), the Revised Mining Charter) sprungCharter and the Code of Good Practice for the South African Mineral Industry (Code). This would give these documents the force of law.
The 2013 Bill was passed by the National Assembly on 12 March 2014 and passed by the National Council of Provinces (NCOP) on 27 March 2014. The 2013 Bill will be sent to the President for assent.
The Mining Charter sprang from the MPRDA.MPRDA and also took effect on 1 May 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.
The objectives of the Mining Charter are to:
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 labour-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 13 September 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 organised labour, all of which must be achieved by 30 April 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 labour;
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 30 April 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.
On 29 April 29, 2009, as required by section 100(1)(b) of the MPRDA, the Minister published the Codes 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.
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.
AngloGold Ashanti appliedholds two prospecting rights and is currently applying for an additional prospecting right.
AngloGold Ashanti also holds a mining permit for the recovery of sand and has been grantedclay, which is in the process of being renewed.
AngloGold Ashanti holds a refining license and an import and export permit byfrom the South African Diamond and Precious Metals Regulator. The import and export permit is currently in the process of being renewed.
The BBBEE Amendment Act
The President of South Africa assented to the BBBEE Amendment Act on 27 January 2014. The BBBEE Amendment Act will 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 BBBEE Amendment Act 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;
amending 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.
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The Royalty Act
The Mineral and Petroleum Resources Royalty Act, 2008, or the Royalty Act, was promulgated on 24 November 2008 and came into operation on 1 March 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 2013 constituted less than 10 percent in value of the total composite mineral resources). The rate of royalty tax payable for 2013 was 0.9 percent of revenue of the company’s South African operations.
The President has appointed a committee to review the current mining tax regime.
CONTINENTAL AFRICA
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.
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 favorfavour of a mining title holder in the event that amendmentamendments to the DRC Mining Code would result in less favourable payment obligations.
On 1 January 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 1 January 2013, a withholding tax of 14 percent became effective. The tax is applicable to service fees payable to a non-resident service provider by a resident of the Mining Code resultsDRC.
On 18 July 2012 the Convention between the Government of the Republic of South Africa and the Government of the Democratic Republic of the 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
other income taxes, levied in less favorable payment obligations.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 enforcementon interest paid by companies resident in the DRC to companies resident in South Africa from 20 percent to 10 percent. A South African company must own at least 25 percent of rights acquired under an exploration ora relevant DRC entity’s outstanding shares in order to take advantage of the reduced rates.
In October 2012, the DRC Mines Minister announced a proposed overhaul of the DRC’s mining permit,code. The proposed laws seek to, among other things, increase the Mining Code provides, dependinggovernment stake in mining operations to 35 percent from the existing 5 percent, double royalties on some minerals, reduce in a significant way the protections AngloGold Ashanti currently enjoys on its projects in the DRC, impose significant limitations on the naturecompany’s ability to retain and renew licences 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 a dispute or threat, administrative, judicial and national or international arbitral recourses. operations in the DRC.
AngloGold Ashanti holds the majority stake and is the operator of Ashanti Goldfields Kilo (AGK), an exploration and mining joint venture with Société Miniére de Kilo-Moto (SOKIMO), a DRC governmental mining agency. AGK is engaged in exploration activities in the north eastern DRC.
AngloGold Ashanti also holds the majority stake and is the operator of Ashanti Goldfields Kilo (86.22 percent), an exploration and mining joint venture with Société Minière de Kilo-Moto (SOKIMO) (13.78 percent), a state-owned gold company.
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.
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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 isStability agreements are 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 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 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 if the rate was less than 30 percent; 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 included:
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.
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Following engagement with relevant stakeholders, the Bank of Ghana issued another notice clarifying that the transfer of foreign exchange to meet external payment obligations remains permissible for transactions such as:
| a. | redemptions and coupon payments on Bonds held by non-residents; |
| b. | investment income, technology and management transfer entitlements, expatriate emoluments, and other incentive packages and overseas commitments under provisions in various legislation and legislative instruments such as the Minerals and Mining Act, 2006 (Act 703), and the Technology Transfer Regulations ( L.I.1547 ); and |
| c. | other outward payments for imports of goods and services. |
The notice also stated that all balances in Foreign Currency Accounts (FCAs) and Foreign Exchange Accounts (FEAs) will continue to be held in foreign currency, and will not be converted into Ghana Cedis. However, except for travel purposes, withdrawals out of these accounts over the counter will be paid in Cedis at the existing exchange rate. External transfers of up to $10,000 per annum without documentation from FEA and FCA are still permitted. Balances held in FEAs and FCAs continue to remain available for all legitimate external transactions.
LocalizationLocalisation policy
Mining companies must submit a detailed program must be submittedprogramme for the recruitment and training of Ghanaians with a view to achieving ‘localization’“localisation”, 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.
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 5 March 5, 1994. It grants mining rights to land with an area of approximately 334 square kilometerskilometres 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 haskilometres was 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. kilometres.
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 23 October 23, 2008.
On 20 January 2014, AGAG submitted an application to the Minerals Commission to surrender approximately 289.34 square kilometres of the area to the government of Ghana. Upon issuance by the government of the certificate of surrender, the lease areas will be reduced to 185.66 square kilometres. The remaining parcel of land that will be subject to the mining lease is situated within various villages and Teberebie
Iduapriem
Iduapriem has title to a 33 square kilometerkilometre mining lease granted on 19 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
In Guinea, all mineral substances are the property of the state. Mining activities are primarilycurrently regulated by law L/2011/006/CNT dated 9 September 2011 (the “2011 Code”), as amended by law L/2013/053/CNT dated 8 April 2013 and promulgated by Decree D/2013/075/PRG/SGG dated 17 April 2013 (together the “New Mining Code, 1995. Code”).
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 group’s Guinea subsidiary, Société AngloGold Ashanti Goldfields de Guinée SA (SAG)(“SAG”), has title to the Siguiri mine in the form of a mining concession, areacovered by a mining convention which was entered into with the Republic of Guinea on 11 November 1993 (the “Convention de Base”). The mining concession was consequently redefined by virtue of Presidential Decree D/97/171/PRG/SGG dated 4 August 1997, granted on November 11, 1993to SAG following the execution of the Convention de Base. The Convention de Base was amended in 2005. The Convention de Base provides for a periodduration of 25 years. The agreement provides foryears, with 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 kilometerskilometres was reduced to a concession area of four blocks totalingtotalling 1,495 square kilometers.
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The Republic of 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;
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 subsidiarysubsidiary; or if SAG goes into voluntary liquidation or is placed into liquidation by a court of competent jurisdiction.
New Mining Code
Pursuant to the option agreement between UM and Golden Shamrock Mines Limited (GSM), a royalty on production may be payable to UM by ChevaningNew Mining Company Limited (CMC) or GSM, which payment obligation has been assigned to AngloGold Ashanti (Ghana) Limited, on a sliding scale of between 2.5 percent and 7.5 percent, basedCode, existing mining titles in effect on the spot gold price per ouncedate on which the New Mining Code came into force remain valid for their duration and for the substances for which they have been issued. The New Mining Code does not allow mining conventions to derogate from its provisions but for holders of validly signed and ratified conventions, the application of the Mining Code will take place by way of amendments to the relevant mining convention (in the case of SAG, the Convention de Base), which amendments are set out in an Addendum to be negotiated between $350 per ouncethe mining convention holder and $475 per ounce, subjectthe State (the “Addendum”). The Addendum is required to indexing from January 1, 1995,be approved by the Council of Ministers, signed by the Minister of Mines, transmitted to the Supreme Court for its opinion and then to the National Assembly for ratification. Mining companies must cooperate in view of the conclusion of the Addendum within a cumulative maximum24-month delay following the publication of $60 million. In addition, underthe New Mining Code. The 24-month delay period is expected to end on or shortly before June 2015. To that effect, the Government has established a Technical Committee, supported by a Strategic Committee, to conduct the renegotiations of all the mining contracts including the Convention de Base. Until ratification of the Addendum, the terms of the restructuring agreementcurrent Convention de Base apply.
The type of amendments expected to be contained in the Addendum, are categorised below by the method and timing of implementation:
| 1. | Provisions of immediate application which are non-negotiable relating to transparency, anti-corruption efforts, transfer of mining title interests, tax on capital gains, environmental protection, relationships with local communities, and worker health and safety (Mandatory Provisions); |
| 2. | Provisions of immediate application but which are subject to progressive implementation over a negotiated period of time not exceeding eight years relating to training, employment and preference to Guinean companies (Progressive Provisions); and |
| 3. | Other, negotiable provisions relating to taxation (other than capital gain) and customs, State participation in the capital of mining companies, State rights on transport and marketing and insurance and exchange control rules. |
Once signed and ratified, the provisions of the Convention de Base, as amended by the Addendum, will govern mining activities on the Siguiri concession. While the exact content of the Addendum will depend on the outcome of the negotiations with the IFC,Technical Committee, it can be anticipated that the Addendum will contain the Mandatory Provisions and will also provide a sliding scale royalty on production may be payabletime table for the implementation of the Progressive Provisions.
With respect to the IFC, calculatedMandatory Provisions, the New Mining Code provides that mining companies must adhere to the principles of the Extractive Industries Transparency Initiative (EITI). The EITI sets a global standard for oil, gas and mining companies to disclose payments to governments and for governments to disclose what they receive. The Mandatory Provisions also provide for the requirement to obtain ministerial consent in respect to any transfer of a mining right as well as any form of direct or indirect transfer of interest in a mining title of 5 percent or greater. In addition, the Mandatory Provisions also provide for a transfer tax regime entailing the payment of a 10 percent registration fee, in addition to capital gain tax on the same basis but at halfassignment of titles, on the rate payabletransfer of shares in the company holding the mining titles and on an acquisition of participation leading to UM,an indirect change of control of the title holder.
The Progressive Provisions require, among others, the implementation of a training and development plan contemplating a transfer of technology as well as preference for Guinea companies. The Progressive Provisions also establish fixed minimum quotas of Guinean personnel. These quotas depend on the stage of the project and the level of hierarchy. The Progressive Provisions further require that certain positions (General Manager, Deputy General Manager) be filled by Guinean citizens by certain deadlines. The Progressive Provisions provide for minimum quotas of contracts with SMEs, SMIs and businesses belonging to or controlled by Guineans to be complied with by title holders and their sub-contractors.
In addition, certain provisions introduced by the New Mining Code that were not otherwise covered by the previous mining legislation or are not covered by the Convention de Base are likely to apply to SAG, including a maximum of $7.8 million.limitation on tax stability. The royalty payablecurrent tax regime applicable to SAG is only guaranteed until November 2018.
The New Mining Code is to be accompanied and implemented by various implementation decrees. To date, decree D/2014/013/PRG/SGG dated 17 January 2014 relating to the IFC was fully discharged in January 2008,application of the financial provisions of the New Mining Code, decree D/2014/014/PRG/SGG on the adoption of a directive for the realisation of an environmental and the royalty payment payable to Umicore was fully discharged in December 2010.
Mali
Mineral rights in Mali are governed by Ordinancelaw n°2010-015 dated 27 February 2012 bearing Malian Mining Code (the “New Mining Code”), replacing ordinance No. 99-32/P- RM of 19 August 19, 1999 enacting the previous mining code, as amended by No. ordinance n°013/2000/P-RM of 10 February 10, 2000 and ratified by Law No. law n°00-011 of 30 May 30, 2000 (the “1999 Mining Code)Code”), and Decree No. 99-255/P-RM of 15 September 15, 1999 implementing the Mining Code.
Due to stabilisation clauses in the agreement defining the mining rights and obligations of AngloGold Ashanti entities in Mali (further described below), the mining operations carried out by the AngloGold Ashanti entities in Mali are subject to the provisions of the previous mining codes of 1970 and 1991 but also, for residual matters, expressly subject to the provisions of the 1999 Mining Code (see “Applicable mining regime” below). As a consequence the New Mining Code does not apply to the relevant mining operations.
Applicable mining regime
Prospecting activities are carried out under prospecting authorizations (authorizationauthorisations (authorisation de prospection), is an exclusive right for. The authorisations 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 without a reduction in the area ofcovered by the authorization. Researchauthorisation. Exploration activities may be carried out under researchexploration permits (permis de recherché)recherche). 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) is required to mine a deposit located within the area of a prospecting authorizationauthorisation 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 authorizationauthorisation and covers only the area coveredgoverned by the exploration permit or the prospecting authorization.authorisation. 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 State will have a 10 percent free carried interest.interest in the company. This interest will be converted into priority shares and the State’s participation will not be diluted in the case of increasing thean increase in capital.
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Applications for prospecting authorizationsauthorisations 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.
All mining titles mentioned above all require an establishment convention (convention d’etablissement) to be signed by the State 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,labour, protection of the environment, reclamation, safety, hygiene and settlement of disputes)dispute settlement).
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
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 programsprogrammes 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 as external companies (i.e. branches). 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. Mining companies (other than diamond mining companies) currently pay corporate tax at a rate of 37.5 percent, while a corporate tax of 32 percent applies to profits from non-mining activities. There is a 10 percent withholding tax on interest earned by foreigners and Namibian citizens on their deposits held with Namibian banks or unit trust schemes. Aside from withholding tax on interest, there is also a non-resident shareholder tax (“NRST”). The rate of the NRST is 10 percent if the beneficial owner of the shares is a company which holds directly or indirectly at least 25 percent of the capital of the company paying the dividends. In all other cases the rate is 20 percent. 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 licensecompanies, at the discretion of the Minister 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
TANZANIAMineral rights
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 programmes, 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;
gemstone prospecting license; and
retention license.
Licenses for Mining:
special mining license (if the proposed capital investment is equal to AngloGold Ashanti, are:at least US$100 million);
mining license (if the proposed capital investment is equal to between $100,000 and $100 million); and
51primary mining license (reserved for Tanzanian citizens).
Licenses for Ancillary Activities:
processing license;
smelting license; and
refining license.
For purposes of AngloGold Ashanti’s Geita Gold Mine, only prospecting, retention and special mining licenses are relevant.
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.
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.
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.
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.
AngloGold Ashanti has compliedconcluded a development agreement with allthe Ministry and was issued a mining license for a period of 25 years, which expires in 2023.
The Finance Act 2012 which was passed on 11 October 2012 introduced some important changes to the fiscal regime with effect from 1 July 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 payable by way of an initial instalment of 20 percent on the transfer, based on the notional gain that the seller would make where after a further instalment of the remaining 10 percent is due.
Prior to 2012 budgetary changes under the VAT Act 1997, mining companies were entitled to 100 percent VAT relief. This implied that no VAT was applicable requirements andon purchases made by mining companies. Following amendments to the VAT Act through the Finance Act 2012, the provision providing VAT relief to mining companies was repealed. As a result mining companies are no longer eligible for VAT relief.
Local Government Levies:
The local government for the area in which we mine charges a 0.3% service levy based on turnover generated in the relevant licenses, whichdistrict or a $200,000 local government levy for mining companies that have been issued for 25 years, expiring in 2023.
Potential regulatory changes
In 2013, the Tanzanian Commissioner for Minerals issued the first draft of the Mining (Minimum Shareholding and Public Offering) Regulations, 2013.
The regulations set out the requirement to sell shares to Tanzanian nationals, by way of a public offering and listing on the Dar es Salaam Stock Exchange, which will apply to companies that are carrying out large scale mining licenseoperations.
The listing requirement
The draft regulations require all existing holders of a special mining licence to list a minimum of 30 percent of their shares on either the Main Investment Market or the Enterprise Growth Market Segment of the Dar es Salaam Stock Exchange within two years of the regulations coming into force.
Companies that are issued with a new special mining licence after the date the draft regulations come into force are required to list 30 percent of their shares within one year of the date of the issue of their special mining licence.
The listing rules
The listing of shares on the Dar es Salaam Stock Exchange is then granted taking into accountto be done in accordance with the abilityexisting regulatory framework and listing rules, although the restrictions that would normally permit up to 60 percent of a company’s listed shares to be owned by foreign investors has been removed. The effect of this is that all shares of Tanzanian mining companies that are locally listed can only be purchased by either Tanzanian citizens or locally incorporated companies.
The listing rules require companies that are seeking to list their shares on the Main Investment Market to satisfy a number of criteria, including minimum share value requirements, profitability requirements, management incumbency requirements and financial disclosure requirements.
In the case of a listing on the Enterprise Growth Market Segment these requirements are substantially reduced or removed altogether.
The one year timeframe imposed by the draft regulations that applies to the listing of shares issued by the holder of a new special mining licence may conflict with the current requirement of the Main Investment Market for a management and profitability track record, however the draft regulations do not deal with this issue.
Failure to list
The regulations do contemplate the possibility that a company may proceed with a listing and fail to secure the minimum local shareholding. In such circumstances the Minister of Energy and Minerals may at the request of the company including itsand on the recommendation of the Capital Markets and Securities Authority grant a waiver to the minimum local shareholding requirement. However, it is not clear from the regulations whether the waiver may be general and so exempt the company from the requirement to list altogether or whether the waiver is in effect an extension of the timeframe in which the company must list.
Where a company fails to comply with the listing requirement in the regulations the Minister is empowered to revoke the special mining financial and technical capabilities, rehabilitation programs and payment of royalties. The relevant license was granted to Geita Gold Mine Ltd in respect of its mining in Tanzania. The current 25-year 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.
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.
Native Title legislation applies to certain mining tenuretenures within Australia. Australia recognizesrecognises 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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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.
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.
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 authorizedauthorised 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.
ARGENTINAAMERICAS
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 programme 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 authorisation 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, Fomento Minero de Santa Cruz S.A. (Fomicruz). On 27 December 1996, Fomicruz and in terms of the Usufruct Agreement signed between them andentered into a usufruct agreement whereby Cerro Vanguardia SA on December 27, 1996, the latter has theS.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 27 December 27, 2036.
In Brazil, there are two basic mining rights:
Recent and potential regulatory changes
On 30 September 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 on-going 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 some mining companies along with the Province of San Juan (which hosts large mining projects). Injunctions that had been granted by lower courts that had suspended the application of the law in that Province were lifted by the National Supreme Court of Justice of Argentina, that presides over the case, which is in its early stages. Although the injunction has been lifted, the language the Court used in the decision implies that until an inventory of glaciers is completed as mandated by the Law the case is moot, and therefore has no practical implications for the operations of CVSA.
On 26 October 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.
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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 programmes. 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 authorisations 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 authorisation from the inspecting entityFederal Government and for mining activities. Obligationswhich the mineral resources constitute property of the titleholder include:
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 authorisations 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 authorised 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.
Legally, the proposals would change the rules governing access to mining titles. While exploration authorisations 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.
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 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 organise 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.
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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National parks;
Regional parks;
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
Cannon fees are due.
0-2000 hectares, approximately $9.00 per hectare per year
2001-5000 hectares, approximately $18.00 per hectare per year
5001-10,000 hectares, approximately $27.00 per hectare per year
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 Federal government instituted the CONPES programme that will aid in promoting certain projects designated by the government as national projects of interest. This designation provides for great oversight from the Federal government. The La Colosa project was one such designated project. It is anticipated that the programme will be launched in 2014.
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 prospectiveutilised 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.
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 stabilisation 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 AngloGold Ashanti’s mines is ongoing planning for, and implementation of, concurrent rehabilitation, together with an estimate of associated liability costs and the placement of adequate financial provisions and assurances to cover these costs.
AngloGold Ashanti revised its group closure planning management standard in 2013 and all of its operations are life-of-minenow required to comply with the standard as their closure plans are reviewed and updated.
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 closure plan, which takes into account future closure and associated rehabilitation and other costs.
The closure plan is reviewed annually and updated every three years (annually in the final three years of a mine’s life) or whenever significant changes are made, 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 mining and other operations have taken place for more than fifty years.
A particular challenge is concurrent rehabilitation, which is carried out while a mine is still operational. This practice serves to decrease the ultimate liability and reduces the final rehabilitation and closure work that must be undertaken, but has the potential to sterilise 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 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) decreased from $841 million in 2012 to $728 million in 2013. This change relates to changes in discount rates due to changes in global economic assumptions and changes in mine plans resulting in a change in cash flows and changes in design of tailings storage facilities and in methodology following requests from the environmental regulatory authorities.
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 reagents, radioactive materials, and mine tailings. In addition, environmental laws and regulations, including the requirements contained in environmental permits, are generally becoming more restrictive. Significant EHS requirements, risks and trends affecting our mining and processing operations are described below.
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 damage; 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.
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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 supply, quality and usage are areas of concern globally, but are particularly significant for operations in the USA, 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 the company’s operations.
At AngloGold Ashanti’s South African operations, ongoing upgrades of process water containment infrastructure to reduce potential environmental discharges have led to a reduction in reportable incidents in 2013.
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-publicised failure of a third-party tailings facility and the potential impact of such failure also mean that these facilities are generally tightly regulated. An incident at the company’s 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 obligations 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 have 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, and threatened or commenced litigation, relating to air pollution or surface and groundwater quality, among other issues, in the areas 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 is implementing, as appropriate, additional responsive actions, such as remediation, engineering and operational changes at the mine sites and community outreach programmes.
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. 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.
In view of the limitation of current information for the accurate estimation of liabilities, no reliable estimate can be made for these obligations. The potential costs of remediation and prevention of groundwater contamination at AngloGold Ashanti’s operations could be significant and may have a material adverse impact on AngloGold Ashanti’s results of operations and 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 Bali Action Plan 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 regulatory regimes.
For example, the Australian government implemented a carbon trading scheme commencing in July 2012, with a carbon price applying to facilities which emit more than 25,000 t/yr, commencing at A$23/tCO2-e (for 2012 to 2013), increasing to A$25.40/tCO2-e for 2014-2015, followed by a floating price phase. The new government, elected in 2013, has announced its intention to repeal the tax and the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 was introduced into the Federal Parliament on 13 November 2013.
Also, in 2011, the South African government released a climate change response white paper and in 2013 a Carbon Tax Policy Paper. In February 2014, the South African Minister of Finance announced his intention to introduce a carbon tax in 2016. 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 ZAR120 (approximately $11) per tonne of CO2e emitted above certain thresholds. Under the proposal, the tax rate would increase by 10 percent a year, reaching ZAR193 (approximately US$18) 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 the National Climate Change Policy, which established a voluntary reduction target of 1.2 billion tonnes of CO2 below the projected emissions in 2020. The policy required the development of sector-specific plans in order to meet the target. Amongst other plans, it is intended to reduce deforestation in the Cerrado biome, where AngloGold Ashanti operates, by 40 percent compared to the average deforestation in 1999-2008 and expand renewable energy production and energy efficiency programmes. The policy also provided for a Brazilian GHG trading scheme, which is yet to be designed. While Brazil is not yet requiring mandatory GHG emissions reporting 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 its 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 AngloGold Ashanti operates, 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. The business has been exposed to safety stoppages which can, individually and/or in aggregate, have a material impact on operations. AngloGold Ashanti is also enhancing safety programmes, in line with the overall ONE initiative and industry Best Practice, which could result in a reduction of incidents and associated Section 54 safety stoppages.
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 occupational tuberculosis and silicosis in individuals exposed to silica dust. Silicosis has been particularly prevalent in South Africa and has also arisen at the company’s Continental Africa and Brazilian operations, albeit to a far 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. The South African government has indicated that it may also consider amendments to in the short-term to address shortcomings in ODMWA. COIDA provides for compensation payments to workers suffering permanent disabilities 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 or amendments to 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 23 November 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 29 April 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 judgement 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 a consolidated class action and individual claims related to silicosis and other OLD, and could be subject to similar claims in the future. AngloGold Ashanti has received notice of an application 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 programmes to help those infected with HIV and prevent new infections from spreading. Since 2001, the company has offered a voluntary counseling and HIV testing programme for employees in South Africa and, since 2003, has offered anti-retroviral therapy to HIV positive employees who meet 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 programmes. Malaria is a major cause of death in young children and pregnant women but also gives rise to deaths and absenteeism in adult men. Other conditions such as heart disease, chronic diseases and obesity are of increasing incidence and concern. All affected company operations have malaria control programmes in place.
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 programme 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
Operations
AMERICAS | CONTINENTAL AFRICA | AUSTRALASIA | EXPLORATION AND TECHNOLOGY | |||||||||||
| 1. | Argentina | 4. | Guinea | 10. | Australia | 12. | Australia | |||||||
| Cerro Vanguardia (92.5%) | Siguiri (85%) | Sunrise Dam | 13. | Colombia | ||||||||||
| 2. | Brazil | 5. | Mali | Tropicana (70%) | 14. | Guinea | ||||||||
| Serra Grande | Morila (40%)(1) | 15. | South Africa | |||||||||||
| AGA Mineração | Sadiola (41%) | SOUTH AFRICA | ||||||||||||
| 3. | United States | Yatela (40%) | 11. | South Africa | ||||||||||
| Cripple Creek & Victor (CC&V) | 6. | Ghana | Vaal River | |||||||||||
| Iduapriem | Great Noligwa | |||||||||||||
| Obuasi | Kopanang | |||||||||||||
| 7. | DRC | Moab Khotsong | ||||||||||||
| Kibali (45%)(1) | West Wits | |||||||||||||
| 8. | Tanzania | Mponeng | ||||||||||||
| Geita | TauTona(3) | |||||||||||||
| 9. | Namibia | Surface Operations (4) | ||||||||||||
| Navachab(2) | ||||||||||||||
Percentages indicate the ownership interest in AngloGold Ashanti, whether held directly or indirectly. All operations are 100%-owned unless otherwise indicated.
| (1) | Both Morila and Kibali are managed and operated by Randgold Resources Limited. |
| (2) | On 10 February 2014, AngloGold Ashanti announced that it had signed a binding agreement to sell Navachab, subject to certain conditions. |
| (3) | As from 1 January 2013, TauTona and Savuka were mined as one operation and accordingly combined under TauTona. |
| (4) | Includes MWS for purposes of this report. It is operated and managed as a separate cash generating unit. |
OPERATING PERFORMANCE
Group description
Headquartered in Johannesburg, South Africa, AngloGold Ashanti has 21 operations in 11 countries.
AngloGold Ashanti is a global gold mining and exploration company with 20a diverse portfolio of mining operations and projects on four continents, with more than 96% of the company’s revenue derived from the sale of gold produced at its operations located around the world. Working across the full spectrum of the mining value chain, the impact of the company’s operating activities on the local communities and environments remain at the core of the business.
Following a strategic review of AngloGold Ashanti’s asset portfolio at the start of 2013, particularly as it pertains to development and exploration projects, the company embarked on significant restructuring in response to current challenges in the gold sector, including increasing costs of production and a fall in gold prices.
Despite the addition of two new mining operations, Kibali and Tropicana, which began production in the second half of 2013, the number of AngloGold Ashanti operations in 2013 remained unchanged at 21. Following the restructuring of the portfolio, Savuka is now reported together with TauTona and MWS is included in the reporting of Surface Operations. Post year-end, a binding agreement was reached regarding the sale of the Navachab mine in Namibia, subject to certain conditions.
AngloGold Ashanti’s brownfield and greenfield exploration programmes take place in both established and new gold producing regions through managed and non-managed joint ventures, strategic alliances and wholly-owned ground holdings. Greater emphasis is being placed on brownfield exploration and a few key greenfield opportunities carefully identified by management in Colombia, Guinea, and Australia.
AngloGold Ashanti’s operations and joint ventures employed, 62,046on average, 66,434 people including contractors, and(including contractors) in 2013 (2012: 65,822).
Performance
In 2013, AngloGold Ashanti produced 4.52attributable 4.11 million ounces of gold in 2010.
Production of 4.11 Moz was achieved at a total cash cost of $830/oz compared to 3.94 Moz at $829/oz the Argentinean, South Africanprevious year.
The attributable Ore Reserve at 31 December 2013 was 67.9 Moz, down from 74.1 Moz at 2012. This decrease reflects the changes in economic assumptions due to the lower gold price which had the most significant impact at Geita and Brazilian operations respectively.
Capital expenditure, including equity accounted joint ventures, for the yearin 2013 amounted to $1,015$1,993 million (2009: $1,027(2012: $2,322 million).
56
Safety
Regrettably, there were 8 fatalities across the group’s operations in 2013. The all injury frequency rate improved to 7.33 per million hours worked compared to 7.72 in 2012 and 9.76 in 2011.
OPERATIONS AT A GLANCEfor the years ended 31 December 31
| Attributable tonnes | Attributable gold | Total cash costs | Attributable Capital Expenditure | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| treated/milled (Mt) | Average grade recovered (g/t) | Production (000oz) | ($/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(1) ($ per ounce) | All-in sustaining costs(2) ($/oz sold) | Attributable capital(1) expenditure ($m) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2013 | 2012 | 2011 | 2013 | 2012 | 2011 | 2013 | 2012 | 2011 | 2013 | 2012 | 2011 | 2013 | 2012 | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
SOUTH AFRICA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vaal River | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Great Noligwa | 0.4 | 0.5 | 0.5 | 6.15 | 5.72 | 5.58 | 83 | 84 | 94 | 1,100 | 1,226 | 1,194 | 1,305 | 1,530 | 13 | 27 | 29 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Kopanang | 1.0 | 0.9 | 1.5 | 5.23 | 5.40 | 6.47 | 178 | 164 | 307 | 918 | 1,015 | 681 | 1,255 | 1,497 | 52 | 94 | 92 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Moab Khotsong | 0.7 | 0.6 | 0.9 | 9.47 | 8.16 | 9.39 | 212 | 162 | 266 | 797 | 1,040 | 689 | 1,223 | 1,634 | 117 | 159 | 147 | |||||||||||||||||||||||||||||||||||||||||||||||||||
West Wits | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mponeng | 1.6 | 1.3 | 1.6 | 7.10 | 9.40 | 9.71 | 354 | 405 | 500 | 719 | 639 | 546 | 1,016 | 883 | 171 | 195 | 172 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Savuka(3) | 0.2 | 0.2 | 6.09 | 6.69 | 37 | 49 | 1,041 | 864 | 1,607 | 20 | 8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TauTona(3) | 1.0 | 0.8 | 1.0 | 7.34 | 7.63 | 7.55 | 235 | 189 | 244 | 920 | 924 | 818 | 1,149 | 1,316 | 59 | 73 | 79 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Surface Operations | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Surface Operations(4) | 34.5 | 17.9 | 10.7 | 0.22 | 0.30 | 0.48 | 240 | 172 | 164 | 883 | 943 | 660 | 969 | 754 | 39 | 15 | 5 | |||||||||||||||||||||||||||||||||||||||||||||||||||
CONTINENTAL AFRICA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ghana | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Iduapriem | 4.8 | 4.6 | 4.3 | 1.43 | 1.22 | 1.44 | 221 | 180 | 199 | 861 | 955 | 800 | 1,025 | 1,437 | 28 | 95 | 73 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Obuasi(5) | 1.7 | 2.1 | 2.0 | 4.94 | 4.79 | 4.82 | 239 | 280 | 313 | 1,406 | 1,187 | 862 | 2,214 | 2,021 | 196 | 185 | 132 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Guinea | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Siguiri (85%) | 10.2 | 10.1 | 9.7 | 0.82 | 0.76 | 0.79 | 268 | 247 | 249 | 918 | 938 | 849 | 1,085 | 1,105 | 25 | 28 | 15 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Mali | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Morila (40%) | 1.4 | 1.8 | 1.8 | 1.23 | 1.41 | 1.70 | 57 | 81 | 99 | 773 | 767 | 810 | 1,051 | 765 | 13 | 1 | 1 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Sadiola (41%) | 2.0 | 1.9 | 2.0 | 1.34 | 1.64 | 1.90 | 86 | 100 | 121 | 1,334 | 1,169 | 816 | 1,510 | 1,249 | 42 | 37 | 14 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Yatela (40%) | 1.0 | 1.1 | 1.1 | 0.93 | 1.06 | 1.04 | 27 | 29 | 29 | 1,530 | 1,758 | 1,530 | 1,653 | 1,888 | 3 | 2 | 1 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Namibia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Navachab(6) | 1.4 | 1.4 | 1.5 | 1.39 | 1.59 | 1.46 | 63 | 74 | 66 | 691 | 1,036 | 1,012 | 781 | 1,329 | 5 | 15 | 48 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Tanzania | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Geita | 4.0 | 4.8 | 3.9 | 3.54 | 3.47 | 3.98 | 459 | 531 | 494 | 515 | 427 | 350 | 833 | 816 | 154 | 216 | 206 | |||||||||||||||||||||||||||||||||||||||||||||||||||
DRC | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kibali (45%)(8) | 0.4 | 3.41 | 40 | 471 | 9,065 | 341 | 263 | 73 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AUSTRALASIA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sunrise Dam | 3.5 | 3.4 | 3.6 | 2.46 | 2.39 | 2.16 | 276 | 258 | 246 | 1,110 | 1,126 | 1,367 | 1,321 | 1,470 | 39 | 49 | 27 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Tropicana (70%)(8) | 0.9 | 2.40 | 66 | 568 | 1,113 | 241 | 315 | 73 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMERICAS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Argentina | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cerro Vanguardia (92.5%) | 2.3 | 1.7 | 1.0 | 6.58 | 6.48 | 6.23 | 241 | 219 | 196 | 622 | 576 | 368 | 912 | 935 | 64 | 88 | 81 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Brazil | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AGA Mineração(5) | 2.3 | 2.2 | 1.7 | 5.70 | 6.07 | 7.43 | 391 | 388 | 361 | 646 | 696 | 529 | 1,023 | 1,114 | 123 | 162 | 261 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Serra Grande(7) | 1.3 | 0.9 | 0.6 | 3.42 | 3.36 | 3.59 | 138 | 98 | 67 | 719 | 821 | 768 | 970 | 1,168 | 40 | 33 | 22 | |||||||||||||||||||||||||||||||||||||||||||||||||||
United States | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cripple Creek & Victor | 20.8 | 20.9 | 20.3 | 0.34 | 0.40 | 0.39 | 231 | 247 | 267 | 732 | 638 | 564 | 927 | 817 | 157 | 100 | 67 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | Restated for 2011 and 2012 in terms of the adoption of IFRIC 20. |
| (2) | All-in sustaining costs are available for 2012 and 2013 only. |
In 2013, Savuka and TauTona were combined under TauTona as one cash generating unit. |
| (4) | Includes MWS for purposes of this report. It is operated and managed as a separate cash generating unit. |
| (5) | The |
| (6) | A binding agreement to sell Navachab was signed on 10 February 2014, subject to certain conditions. |
| ||
| (8) | Commenced production in | |
57Rounding of figures may result in computational discrepancies.
AngloGold Ashanti’s South African operations comprise sixfive deep-level mines and one surface operation.production facilities. They are:
The Vaal River operations —– Great Noligwa, Kopanang and 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; and
The West Wits operations —– Mponeng Savuka and TauTona.
Surface operations.
| Gold production (000oz) | Average number of employees | |||||||
Operations |
| |||||||
1. South Africa | ||||||||
Vaal River | ||||||||
Great Noligwa | 83 | 2,731 | ||||||
Kopanang | 178 | 5,365 | ||||||
Moab Khotsong | 212 | 5,692 | ||||||
West Wits | ||||||||
Mponeng | 354 | 6,516 | ||||||
TauTona(1) | 235 | 5,256 | ||||||
Surface operations (2) | 240 | 2,142 | ||||||
From 1 January 2013, TauTona and Savuka were operated and managed as one operation and accordingly combined under TauTona. |
| (2) | Includes MWS for purposes of |
South Africa Key Statistics
| Unit | 2013 | 2012 | 2011 | |||||
Operation | ||||||||
Tonnes treated/milled | Mt | 39.2 | 22.2 | 16.4 | ||||
Pay limit(1) | oz/t | 0.36 | 0.40 | 0.54 | ||||
| g/t | 13.37 | 12.41 | 11.98 | |||||
Recovered grade(1) | oz/t | 0.204 | 0.219 | 0.232 | ||||
| g/t | 7.00 | 7.50 | 7.95 | |||||
Gold production | 000oz | 1,302 | 1,212 | 1,624 | ||||
Total cash costs(2) | $/oz | 850 | 873 | 694 | ||||
Total production costs(2) | $/oz | 1,070 | 1,097 | 910 | ||||
All-in sustaining costs(2)(3) | $/oz | 1,120 | 1,189 | |||||
Capital expenditure | $m | 451 | 583 | 532 | ||||
Safety | ||||||||
Number of fatalities | 6 | 11 | 9 | |||||
AIFR | Per million hours worked | 12.63 | 13.24 | 15.57 | ||||
People | ||||||||
Average no of employees: Total | 32,406 | 34,186 | 32,082 | |||||
Permanent employees | 28,526 | 29,740 | 28,176 | |||||
Contractors | 3,880 | 4,446 | 3,906 |
| (1) | Refers to underground operations |
| (2) | Total cash costs, total production costs and all-in sustaining costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A – Operating Results”. |
| (3) | Excludes stockpile impairments. |
Performance in the South Africa Region in 2013
Production
Overall production in the South Africa region rose by 7%, over 2012. During 2012 production in South Africa was negatively affected by industrial action. Increased output at Moab Khotsong was a result of the higher grade mined and reduced dilution owing to a decrease in 2010stoping widths. The improved grade and greater volumes treated at Surface Operations, following the optimisation of MWS’s processes and systems also were factors in the annual production increase in 2013. The South Africa region’s contribution to group attributable production remained stable at around 32%. The Vaal River operations produced 1.38Mlb of uranium as a by-product.
Despite increases in wages and electricity tariffs that exceeded inflation as well as expenditure incurred on improving overall safety standards, costs per ounce for the South Africa region declined. Projects were deferred and cost-saving initiatives to optimise energy consumption and underground locomotive fleets, as well as to reduce consumable expenditure, were implemented. Total cash costs improved, declining from $873/oz in 2012 to $850/oz in 2013. Total cash costs at Moab Khotsong in particular declined from $1,040/oz in 2012 to $797/oz in 2013.
Capital expenditure
Capital expenditure for the year totalled $451m, a decline of 23% on the previous year. This follows the scaling back of project investment as part of the cost-cutting initiatives across the portfolio. Capital expenditure in 2013 was $430predominantly on ore reserve development across all underground operations.
Safety
There were regrettably six fatalities during 2013 (2012: 11) – one at the Vaal River operations and five at the West Wits operations. The fatality at Vaal River’s Moab Khotsong in December ended a record run of 4.7 million (2009: $395 million)fatality free shifts (538 days) for the Vaal River Operations.
There was an overall improvement in safety performance. The all injury frequency rate (AIFR) for the South Africa region was 12.63 per million employee hours worked in 2013 compared to 13.24 in 2012, the best performance for AngloGold Ashanti’s operations in the region.
People
An average of 32,406 people were employed during 2013 by the South Africa region – 28,526 full-time employees and 3,880 contractors – as compared to 34,186 in 2012. The 5% decline in the number employed was a result of cost rationalisation initiatives implemented across the group. Productivity remained low at 4.47oz/TEC in 2013 (2012: 4.19oz/TEC).
Wage talks with organised labour, through the established gold sector’s centralised collective bargaining forum, overseen by the Chamber of Mines, were concluded with the majority of the trade unions after mediation and a 48-hour strike at the Vaal River operations.
Ore Reserve
At 31 December 2013, South Africa had a total attributable Ore Reserve of 30.90 million ounces (2012: 31.56 million ounces), equivalent to 45 percent of the group’s Ore Reserve.
Growth and improvement
TauTona is the leading test site for the new technology being developed by the AngloGold Ashanti Technology & Innovation Consortium (ATIC). Significant progress was made in three key areas of focus: geological drilling, reef boring and ultrahigh-strength backfill. The ultimate aim is the development of an automated mining method for deep-level underground operations in South Africa which will enable us to safely mine as much as possible of the gold on these large, deep ore bodies while lessening waste.
Project Zaaiplaats at the Moab Khotsong mine was temporarily halted while alternative development options for the project are evaluated. The deepening project at Mponeng was also slowed to optimise expenditure.
CONTINENTAL AFRICA
AngloGold Ashanti has nine mining operations in its Continental Africa region:
Kibali in the Democratic Republic of the Congo;
Iduapriem and Obuasi in Ghana;
Siguiri in Guinea;
Morila, Sadiola and Yatela in Mali;
Navachab in Namibia; and
Geita in Tanzania.
| Attributable gold production (000oz) | Average number of employees | |||||||
Operations | ||||||||
1. Democratic Republic of the Congo | ||||||||
Kibali 45%(1) | 40 | 158 | ||||||
2. Ghana | ||||||||
Iduapriem | 221 | 1,590 | ||||||
Obuasi | 239 | 5,194 | ||||||
3. Guinea | ||||||||
Siguiri 85% | 268 | 3,673 | ||||||
4. Mali | ||||||||
Morila 40% | 57 | 390 | ||||||
Sadiola 41% | 86 | 810 | ||||||
Yatela 40% | 27 | 367 | ||||||
5. Namibia | ||||||||
Navachab(2) | 63 | 938 | ||||||
6. Tanzania | ||||||||
Geita | 459 | 3,504 | ||||||
| (1) | Production at Kibali commenced in October 2013. |
| (2) | A binding agreement to sell Navachab was signed on 10 February 2014, subject to certain conditions. |
Continental Africa - Key Statistics
| Unit | 2013 | 2012 | 2011 | |||||
Operation | ||||||||
Tonnes treated/milled | Mt | 26.9 | 27.8 | 26.3 | ||||
Pay limit | oz/t | 0.049 | 0.041 | 0.036 | ||||
| g/t | 1.669 | 1.273 | 1.235 | |||||
Recovered grade | oz/t | 0.054 | 0.055 | 0.055 | ||||
| g/t | 1.69 | 1.70 | 1.87 | |||||
Gold production | 000oz | 1,460 | 1,521 | 1,570 | ||||
Total cash costs(1)(3) | $/oz | 869 | 830 | 698 | ||||
Total production costs(1)(3) | $/oz | 1,086 | 1,060 | 953 | ||||
All-in sustaining costs(1)(2) | $/oz | 1,202 | 1,235 | |||||
Capital expenditure(3) | $m | 839 | 925 | 569 | ||||
Safety | ||||||||
Number of fatalities | 2 | 5 | 3 | |||||
AIFR | Per million hours worked | 1.97 | 2.26 | 3.03 | ||||
People | ||||||||
Average no of employees: Total | 16,625 | 16,621 | 16,539 | |||||
Permanent employees | 10,778 | 10,014 | 9,783 | |||||
Contractors | 5,847 | 6,607 | 6,756 |
| (1) | Total cash costs, total production costs and all-in sustaining costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A – Operating Results”. |
| (2) | Excludes stockpile impairments. |
| (3) | Restated 2011 and 2012 in terms of the adoption of IFRIC 20. |
Production
Production declined overall for the year, a result of planned downtime at Geita during the first quarter for the replacement of the SAG mill and the transition at Obuasi of development from contractors to AngloGold Ashanti. While production has steadily increased since, this did not fully offset the initial decline early in the year. Kibali began production in October 2013, while other operations neared the end of their working lives, particularly Yatela, which will continue with closure and rehabilitation activities in 2014.
At Obuasi, the mine improvement process progressed during the year with a ramp up of production and mechanised development rates and a gradual reduction in employee numbers at the operation.
The region realised significant savings during the year. At Geita, an initiative to better align the asset’s exploration strategy and budget with its mine plan led to cost savings of more than $20m for the year. Furthermore, inventory optimisation initiatives, revised contracts and a reduction in regional corporate costs led to additional savings of $17m for the Continental Africa region.
Capital expenditure
Capital expenditures for the year totalled $839m, of which $341m was attributable to development of Kibali. Of the sustaining capital expenditure, which included ore reserve development, the bulk was spent on the decline project at Obuasi and the mill replacement at Geita.
Safety
There were two fatalities in the region during the year (2012: five), one at Iduapriem and one at Obuasi. Overall, the safety performance continued to improve with an all injury frequency rate of 1.97 per million hours recorded for the year (2012: 2.26). Siguiri, Geita and Yatela were lost-time injury free for the year.
People
A total of 16,625 people were employed on average by the Continental Africa region – 10,778 full time employees and 5,847 contractors – as compared with 16,621 in 2012, as the new Kibali mine was commissioned and began its production ramp up. Productivity for the region was 9.97oz/TEC as compared to 10.97oz/TEC in 2012.
Ore Reserve
The total attributable Continental Africa Region Ore Reserve is 24.41 million ounces (2012: 27.59 million ounces). This amounts to 36 percent of the group’s Ore Reserve.
Growth and improvement
The turnaround initiative at Obuasi and the production ramp up at Kibali continued through the end of the year. The downturn in the gold price early in the year 2013 and the resultant emphasis on cost efficiency has led to the revision of mine plans and a cut-back in growth plans at many of the other operations in the region in an effort to enable the company to maximise cash flow even in a weaker gold price environment.
Exploration work continued in 2013 on the Kounkoun trend in Guinea, one of three priority greenfield exploration targets.
AUSTRALASIA
| Attributable gold production (000oz) | Average number of employees | |||||||
Operations | ||||||||
Australia | ||||||||
1. Sunrise Dam | 276 | 457 | ||||||
2. Tropicana 70%(1) | 66 | 468 | ||||||
AngloGold Ashanti’s Australasian assets comprise the wholly owned Sunrise Dam and the 70 percent-owned Tropicana Gold mine, Australia’s newest gold mine.
Australasia - Key Statistics
| Unit | 2013 | 2012 | 2011 | |||||
Operation | ||||||||
Tonnes treated/milled | Mt | 4.3 | 3.4 | 3.6 | ||||
Pay limit | oz/t | 0.09 | 0.08 | 0.10 | ||||
| g/t | 2.82 | 2.42 | 3.00 | |||||
Recovered grade | oz/t | 0.072 | 0.070 | 0.063 | ||||
| g/t | 2.45 | 2.39 | 2.16 | |||||
Gold production | 000oz | 342 | 258 | 246 | ||||
Total cash costs(2)(3) | $/oz | 1,047 | 1,211 | 1,431 | ||||
Total production costs(2)(3) | $/oz | 1,333 | 1,358 | 1,622 | ||||
All-in sustaining costs(2)(4) | $/oz | 1,376 | 1,680 | |||||
Capital expenditure(3) | $m | 285 | 369 | 102 | ||||
Safety | ||||||||
Number of fatalities | 0 | 0 | 0 | |||||
AIFR | Per million hours worked | 7.68 | 6.33 | 18.11 | ||||
People | ||||||||
Average no of employees: Total | 925 | 494 | 509 | |||||
Permanent employees | 281 | 110 | 101 | |||||
Contractors | 644 | 384 | 408 |
| (1) | Production commenced in October 2013. |
| (2) | Total cash costs, total production costs and all-in sustaining costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A – Operating Results”. |
| (3) | Restated 2011 and 2012 in terms of the adoption of IFRIC 20. |
| (4) | Excludes stockpile impairments. |
Production
The start-up of Tropicana in September 2013 contributed to an increase in production for the Australasia region of 33% to 342,000oz compared to 258,000oz in 2012, production in the Australasia region was 8% of total group production in 2013.
Production at Sunrise Dam increased to 276,000oz as higher grade ore from the Crown Pillar in the base of the open pit was processed. Open pit mining was completed by year-end and, from 2014, Sunrise Dam will be solely an underground operation. During the year changes to underground grade control and mine design, combined with improved productivity, resulted in an improvement in underground mining costs.
The new Tropicana operation contributed an attributable 66,000oz to Australian production for the year. At year-end, the processing plant had achieved 90% availability. Mining started in mid-2012 and during the year, a third excavator and truck fleet was mobilised to site, bringing the mining fleet to full capacity.
Total cash costs declined year-on-year by 14% and all-in sustaining costs by 18%. Costs for the Australian region were positively affected by the start of production at Tropicana, and by productivity improvements and the treatment of higher grade ore at Sunrise Dam.
Capital expenditure
Capital expenditure for the region totalled $285m – $39m at Sunrise Dam, primarily on the plant expansion, and $241m at Tropicana on construction and commissioning, and $5m on other projects.
Safety
Safety performance continued to be an area of focus with no fatalities reported. The AIFR for the region was 7.68 per million hours worked (2012: 6.33).
People
A total of 925 people were employed on average by the Australia region – 281 full time employees and 644 contractors – as compared with 494 in 2012. Productivity in the Australia region was 49.64oz/TEC in 2013 (2012: 43.46oz/TEC), the highest in the group.
Ore Reserve
At the end of 2013, the total attributable Ore Reserve for the Australasia Region was 3.81 million ounces (2012: 3.91 million ounces). This makes up around 6 percent of the group’s Ore Reserve.
Growth and improvement
At Sunrise Dam the focus will remain on reducing underground mining costs through a multi-pronged project that is focusing on productivity improvements and an innovative approach to grade control and mine design based on a systematic reverse circulation drilling strategy. Potential for mine-life extensions at Sunrise Dam remains high, with mineralisation remaining open below a depth of 1,500m.
During 2013, drilling focused on the upper sections of the Vogue zone, which lies beneath the Cosmo and adjacent Dolly domains. Capital development is progressing into Vogue in order to undertake further drilling within this orebody and to establish the development levels required to bring Vogue ore into production in 2015.
The Tropicana joint venture has an extensive tenement holding in the Tropicana Belt, where there is believed to be good potential for further discoveries as systematic exploration continues. In 2014 there will be a focus on finding additional ore within trucking distance of the processing plant.
In late 2013, the Havana Deeps prefeasibility study, which considered the trade-off between open pit and underground mining of mineralisation below the Havana orebody, was completed. Drilling as part of this study confirmed the downplunge extent of the main high-grade shoots of the Havana orebody. The recommendations of the prefeasibility study being considered by the Tropicana joint venture partners early in 2014 include a phased-approach to an enhanced prefeasibility study, which would include targeted exploration of shoot repetitions north of the Havana Deeps’ Mineral Resource, in order to further improve the economics of the project.
THE AMERICAS
The Americas is an important growth area for AngloGold Ashanti with operations in Argentina, Brazil and the United States.
| ||||||||
| Attributable gold production (000oz) | Average number of employees | |||||||
| ||||||||
Operations | ||||||||
1. Argentina | ||||||||
Cerro Vanguardia 92.5% | 241 | 1,696 | ||||||
| ||||||||
2. Brazil | ||||||||
AGA Mineração | 391 | 4,377 | ||||||
Serra Grande | 138 | 1,469 | ||||||
| ||||||||
3. United States | ||||||||
Cripple Creek & Victor | 231 | 832 | ||||||
| ||||||||
Americas - Key Statistics
| Unit | 2013 | 2012 | 2011 | |||||||||||||||||||
Operation | ||||||||||||||||||||||
Tonnes treated/milled | Mt | 26.7 | 25.7 | 23.6 | ||||||||||||||||||
Pay limit | oz/t | 0.026 | 0.024 | 0.026 | ||||||||||||||||||
| g/t | 0.897 | 0.822 | 0.891 | |||||||||||||||||||
Recovered grade | oz/t | 0.036 | 0.034 | 0.034 | ||||||||||||||||||
| g/t | 1.20 | 1.16 | 1.15 | |||||||||||||||||||
Gold production | 000oz | 1,001 | 953 | 891 | ||||||||||||||||||
Total cash costs(1)(2) | $/oz | 671 | 669 | 569 | ||||||||||||||||||
Total production costs(1)(2) | $/oz | 886 | 907 | 834 | ||||||||||||||||||
All-in sustaining costs(1)(3) | $/oz | 970 | 1,006 | |||||||||||||||||||
Capital expenditure(2)(4) | $m | 391 | 387 | 433 | ||||||||||||||||||
Safety | ||||||||||||||||||||||
Number of fatalities | 0 | 1 | 2 | |||||||||||||||||||
AIFR | Per million hours worked | 3.58 | 4.34 | 6.33 | ||||||||||||||||||
People | ||||||||||||||||||||||
Average no of employees: Total | 8,374 | 7,896 | 7,389 | |||||||||||||||||||
Permanent employees | 5,979 | 5,509 | 5,273 | |||||||||||||||||||
Contractors | 2,395 | 2,387 | 2,116 | |||||||||||||||||||
| (1) | Total cash costs, total production costs and all-in sustaining costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A – Operating Results”. |
| (2) | Restated 2011 and 2012 in terms of the adoption of IFRIC 20. |
| (3) | Excludes stockpile impairments. |
| (4) | Capital expenditure is attributable expenditure and excludes Colombia. |
Production
Production from the Americas region increased by 5% from 953Koz in 2012 to 1Moz in 2013.
The higher level of regional production reflected the first full year of 100% ownership of Serra Grande and increased output from Cerro Vanguardia, which delivered higher tonnages and grades.
AGA Mineração also delivered a strong performance with increased tonnage and feed grades at both the Cuiabá and Córrego do Sítio complexes in the second half of the year.
The Americas region’s contribution to group attributable production remained stable at around 24%. In addition, the region produced 3.3Moz of silver as a by-product in 2013.
Regional costs were stable in 2013 compared with 2012, largely due to the higher level of production from Argentina, cost management initiatives and the depreciation of both the Brazilian real and Argentinian peso. Costs were contained despite the challenging inflationary environments in both countries. Higher costs at CC&V were driven by lower recoverable grades, the longer haulage distances and increased prices of component parts. Lower gold and silver prices resulted in reduced taxation and royalties at all operations.
Cost cutting initiatives designed to develop efficiencies and production improvements were implemented during the year. At Cerro Vanguardia this work included underground mine design optimisation and stabilisation of the carbon-in-leach and regeneration circuits.
Capital expenditure
Capital expenditure was contained in the region. This follows the group-wide review of costs and strategic priorities to realign the group with the lower gold price environment. Much of the expenditure in 2013 was on the expansion project at CC&V in 2013.
Safety
No fatalities were reported in the Americas and the AIFR for the region was 3.58 per million hours worked in 2013 (2012: 4.34).
People
A total of 8,374 people were employed on average by the Americas region in 2013 – 5,979 full-time employees and 2,395 contractors – as compared to 7,896 in 2012. Productivity for the region was 16.63oz/TEC as compared to 17.47oz/TEC in 2012.
Ore Reserve
At the end of 2013, the total attributable Ore Reserve for the Americas Region, was 8.82 million ounces (2012: 11.01 million ounces). This makes up around 13 percent of the group’s Ore Reserve.
Growth
CC&V’s expansion project (MLE2) progressed according to plan. The mill is scheduled to be commissioned by the end of 2014, with production due to begin in 2015.
Optimisation initiatives to improve efficiencies will continue at all operations. Savings initiatives covering labour, contractors, energy, consumables and working and stay-in-business capital were implemented and completion is expected by December 2014.
EXPLORATION REVIEW
The strategic review of the project development and exploration programmes resulted in significant realignment of the global exploration programme.
GREENFIELDS AND BROWNFIELDS EXPLORATION
Exploration at AngloGold Ashanti has two key processes aimed at adding significant value for the company:
Greenfields exploration, which aims to make large, high value gold discoveries leading directly to new mines.
Brownfields exploration, which is focused on delivering value through incremental additions to the Ore Reserve in existing mines as well as new discoveries in defined areas around existing operations.
Greenfield exploration
AngloGold Ashanti’s greenfields exploration business unit underwent significant re-organisation in 2013, with the refocusing of the group’s project portfolio to achieve cost savings. The global greenfields exploration footprint was rationalised by 26,000km2 but AngloGold Ashanti remains committed to its core greenfields projects and still retains over 23,000km2 of highly-prospective ground in three countries – Australia, Colombia and Guinea – while also maintaining small ground positions in Argentina and Brazil.
In 2013, advanced greenfields exploration activities were conducted in six countries with over 161km of diamond, reverse circulation and aircore drilling completed. Drilling programmes aimed to test new high-priority targets in Australia, Brazil, the DRC and the Solomon Islands, and continued to delineate existing discoveries in Guinea and Colombia. Withdrawal or divestment of projects related to restructuring of the group’s portfolio were conducted in the Solomon Islands, the DRC, the United States and the Middle East and North Africa region. In December 2013 and January 2014, AngloGold Ashanti signed agreements with Thani Alliance LLC to unwind their strategic alliance to conduct mining exploration development and operation of mines in the Middle East and North Africa region.
Brownfields exploration
In 2013, a total of $146m was spent on brownfields exploration. Brownfields exploration was undertaken around most operating mines and advanced projects. Over 590km of diamond, reverse circulation and aircore drilling was completed on brownfields projects.
South Africa
Exploration continued with a total of 10 surface holes being drilled during the year, comprising four at Mponeng’s Western Ultra-Deep Levels (WUDLs), three at Moab Khotsong, two at Project Zaaiplaats, and the completion of one shallower surface hole to the south west of Kopanang. A total of 9,476m was drilled.
GeologyMponeng (WUDLs): UD51 intersected a low-grade thin channel Ventersdorp Contact Reef at a depth of 3,837.5m in February 2013. A long deflection is currently being drilled to obtain a second cluster about 100m from the original intersection and targeting thicker reef channel. The deflection has advanced to 3,384.6m and is approximately 450m from reef. UD59 reached a depth of 3,645m when the drill rod string was dropped. This resulted in the bottom 2,100m of the original hole being abandoned. Re-drilling of the hole has advanced to 1,893.8m. Similar in-hole problems were experienced at UD60. Re-drill has advanced from 304.5m to 1,156.5m. Percussion drilling at UD58 began in December and reached a depth of 472m.
Moab Khotsong: MGR6 advanced to 2,416.9m before it was stopped in May 2013 as part of an effort to reduce capital expenditure. MHH2 intersected a poorly developed reef at 3,144.0m in April 2013. The intersection is an unusual development of Vaal Reef in a fault zone. Further plans to drill MHH3 were abandoned and the Hormah Prospecting Right that was due to expire in July 2013 was allowed to lapse. MCY6 was stopped at a depth of 3,039.4m in April 2013 after structural modeling showed that the Vaal Reef target blocks lie much deeper and further to the east, beyond the Mining Rights boundary.
Zaaiplaats: MMB6 was the first of two Project Zaaiplaats holes to be drilled. The surface hole diamond drilling was completed within one year. MMB6 intersected Vaal Reef at 3,309.7m, only 11.3m above the depth expected from the3-D seismic structural model. MMB7 the second of the Project Zaaiplaats holes intersected the Vaal Reef at 3,335.1m, 29m below the modelled reef position.
Kopanang: KGD12 was the final borehole in the Kopanang shallow-surface drilling programme. The hole was drilled to define the eastern margin of the high-grade VCR zone that was intersected in KGD8.
Continental Africa
Democratic Republic of the Congo
Total drilling for exploration at Kibali was 15,904m, with an additional 6,151m drilled on regional projects. Two areas were identified in the Karagba-Chauffeur-Durba (KCD) deposit as having a high potential for Mineral Resource conversion, 9000 Lode up-plunge and 5000 Lode down-plunge, which incorporated drilling of the 3000 Lode down-plunge. Drilling to test the 5000 Lode up-plunge of KCD was also completed in the Durba Hill area. Drilling was also undertaken at Mengu Hill, Ndala and Pakaka, with a review of historic data completed at the Gorumbwa deposit.
Results from the 9000 Lode confirmed the Mineral Resource potential, although the results indicate that drill-testing of the eastern portion up-plunge programme is of lower priority to targeting higher grades zones further up dip. Drilling of the 5000 and 3000 Lode down-plunge indicate that the 3000 Lode diminishes in grade and thickness down plunge from KCD but continued strong mineralisation is associated with the 5000 Lode, despite some structural complexity.
Drilling of the up-plunge continuation of the 5000 Lode into the Durba Hill area of the KCD deposit confirmed the continuation of mineralisation, but also supported previously interpreted thinning of the mineralisation towards Gorumbwa.
At Mengu Hill, drilling showed that while there was reduced thickness and grade up-plunge, the down-plunge zone was underestimated. Sampling of geotechnical holes was also completed at Mengu Hill where they intersected the mineralisation.
At the Gorumbwa Deposit, a detailed re-logging and selective sampling of all historical Moto and KGM holes was undertaken. Digital capturing of historic underground mine plans to develop a 3D wireframe of workings was completed. The results of limited drilling at Ndala were disappointingly low in tenor.
Ghana
At Obuasi, a total of 5,902m was drilled, with 5,127m underground exploration and 775m surface exploration. Underground drilling took place from 24S-383E, targeting the Sansu 3/Red Zone 9 area. Surface drilling was limited to infill at Gyabunsu North.
At Iduapriem, a total of 4,813m RC pre-collar and diamond tail drilling was completed in Blocks 7 and 8. In addition, four diamond drill holes were drilled in the Ajopa area for geotechnical purposes but the data will inform the geological and Mineral Resource model. Reconnaissance mapping and sampling was undertaken around blocks 1, 5, 7 & 8 Footwall, and Bankyim.
Guinea
At Siguiri, exploration activities concentrated on the Block 1 license area with a total of 86,200m drilled. Drilling focused on reconnaissance, Mineral Resource delineation and infill projects both for oxide and fresh-rock targets. Block 1 target generation programmes included induced polarisation (IP) and resistivity geophysical surveys over Komatiguiya NW, Niono and Seguelen. An updated geological map of the total Siguiri lease area was also completed during the year.
Sterilisation drilling of the new tailing storage facility (TSF) return water dam south of the main CIP plant was completed with no significant gold values reported.
Fresh-rock drilling focused on the mineralisation potential below the pits of Bidini, Kami and Seguelen, with limited fresh-rock drilling also at Eureka, Kossise South East, and the Komatiguiya target. At Bidini pit access and drilling issues led to the introduction of directional drilling capabilities on site. At Kami, several encouraging assay results have been received to date, along with frequent reports of visible gold in the drill core. Freshrock drilling at Seguelen tested the continuation of mineralisation in fresh rock below Seguelen Pushback 1 and 2. Drilling identified three sets of gold-bearing quartz-carbonate veins, with the mineralisation also showing a strong lithological control.
Greenfields exploration drilling continued to delineate significant oxide mineralisation on the Kounkoun trend, located within 50km of the Siguiri mine, in Block 3. To date, mineralisation has been defined through drilling over 6,300m and 1,900m strike lengths in the eastern and western zones, respectively. The oxidised zone is typically between 60m and 100m deep, below which mineralisation continues in fresh rock. In 2013, a total of over 7,000m of aircore, 35,000m of reverse circulation and 3,100m of diamond drilling was completed with drilling continuing to indicate further upside potential. Results from these drill programmes were very encouraging and included, but were not limited to (true widths), 38.4m @ 2.97g/t Au in KKRC373, 52.2m @ 2.11g/t Au in KKRC361 and 15.5m @ 5.58g/t Au in KKRC456. Within Block 2 and Block 4, reconnaissance drilling and ground geophysical surveying was completed.
Tanzania
At Geita, a total of 38,239m of drilling was completed. A significant portion of exploration effort was dedicated to infill drilling programmes in active open pits (Geita Hill, Nyankanga and Star & Comet), as well as on their respective extensions. Limited pre-resource drilling programmes were undertaken to test ‘blue sky’ targets.
Two holes were drilled at Nyankanga to test a revised geological model that indicates the potential for repetitions of the Nyankanga style of mineralisation at depth, beneath the current pit. Both drill holes intersected mineralisation, with one intersecting a mineralised Banded Ironstone Formation package at a depth of approximately 800m.
Non-drilling activities undertaken during the year included regional and target-scale mapping, target consolidation, pit mapping and geology modelling. Considerable advances have been made in the geological understanding at both deposit and regional scales.
Mali
A total of 40,220m of reverse circulation drilling was completed at Sadiola and Yatela, with the focus on Sadiola where 28,038m expensed drilling was completed at Sadiola NE, Sadiola FNE, Sadiola Strike Extension, Tambali, Voyager West, S12, and Timbabougouni. Capital drilling amounted to 9,134m of reverse circulation at FN3 and 2,264 reverse circulation metres dedicated to sterilisation of the North-East corner of the Sadiola Sulphide Project waste dumps.
At Sadiola work was completed on a number of oxide targets close to the FE3/4 complex, Tambali and Sadiola as well as further away along known mineralised extensions. At S12 prospect, further exciting drilling results were recorded with both oxide and sulphide potential. The prospect is however situated adjacent to the existing TSF and indications are that mining will impact on the integrity of the TSF. Positive results for follow up have also been achieved at Tambali targets. Infill drilling was completed at FN3 to improve confidence in the Mineral Resource and infill drilling at Tambali will be incorporated into the next Mineral Resource model.
Australasia
Australia
Drilling at Sunrise Dam included surface and underground diamond and reverse-circulation drilling totalling 52.9km. Drilling activities were largely focused on infill and extension targets following budget restructuring which resulted in the demobilising of all surface diamond rigs (for the MLE project) and all underground diamond rigs until late into the third quarter of the year. Most drilling at Sunrise Dam was conducted with underground reverse-circulation rigs (24.1km).
In Western Australia, greenfield exploration activities on the Tropicana project, in joint venture with Independence Group NL (AngloGold Ashanti interest 70%), progressed well through the year with over 72,000m of aircore, 4,800m of reverse circulation and 600m of diamond drilling completed. Encouraging results were returned from several prospects. Geophysical surveys were also completed over key prospects and included airborne EM and magnetics, ground-based IP and EM, and seismic surveying. Results from these surveys are currently being assessed and will be used to plan follow-up work in 2014. In New South Wales, a farm-in agreement was executed with Mungana Goldmines to explore for Au-Cu porphyries. During the year, ground gravity and induced polarisation geophysical surveying was progressed over key prospective areas to assist in delineating targets for diamond drill testing.
Americas
Argentina
At Cerro Vanguardia, a total of 60,688m were drilled in programmes designed for Mineral Resource expansion and extension. Follow-up drilling for vein extensions along strike and at depth, guided by geophysical surveys, identified additional mill feed material. Exploration and Mineral Resource modelling also successfully identified material to process at the heap leach facility.
Brazil
In the Iron Quadrangle, the Mineral Resource development drilling programmes (89,322m) continued at the Cuiabá and Lamego mines with a continued emphasis on support to long-term planning and Mineral Resource definition. The surface drilling programmes at the Córrego do Sítio mine continued to expand the oxide Mineral Resource, while underground drilling at Córrego do Sítio focused on developing the Sangue do Boi and São Bento Mineral Resource for production. Regional exploration programmes were conducted to test various near mine satellite projects.
At Serra Grande, drilling totalled 62,310m. The exploration focused on the newly identified Inga mineralised structure below the Pequizão ore body. Regional early phase exploration continued, with geophysical surveys and soil sampling campaigns continuing to be useful methods for target identification in preparation for surface drilling programmes in the district.
In Brazil, greenfields exploration progressed on the Graben project, in joint venture with Graben Mineração (AngloGold Ashanti interest 51%). Following the completion of high-resolution airborne radio/magnetics surveying and reconnaissance soil geochemistry, approximately 13,000m of aircore and 3,000m of diamond drilling were completed on priority targets within the highly prospective Juruena Belt.
Colombia
Quebradona: In Colombia, focused greenfields exploration efforts continued at the Nuevo Chaquiro target, part of the Quebradona project, in a joint venture with B2Gold (AngloGold Ashanti’s interest 84.6%) with over 12,000m of diamond drilling completed. The Nuevo Chaquiro target is a porphyry related, copper-gold mineralised stock work system, located within the Western Cordillera, where long intersections of copper mineralisation with gold credits were intersected during 2012. Diamond drilling in 2013 aimed to delineate the limits of this zone and define the presence of a higher-grade core. Results from the year’s drill programmes were very encouraging, and included, but were not limited to, 686m @ 0.72% Cu and 0.33g/t Au in CHA-039, 402m @ 0.53% Cu and 0.26g/t Au in CHA-032, and 430m @ 0.48% Cu and 0.22g/t Au in CHA-046.
Gramalote: Exploration (37,459m) in the Gramalote area was focused on infill drilling to support the updated Mineral Resource estimation for the Gramalote Central deposit. This programme included the drilling of a detailed grade-control spaced block. Drilling programmes were also conducted to expand the nearby Monjas West target. As part of the prefeasibility study, additional drill holes were completed to support high wall design and condemnation drilling for the proposed plant site, waste rock, and tailings storage facilities.
La Colosa: At La Colosa, the Mineral Resource development drilling (10,002m) continued at a slower pace compared to previous years as the emphasis was on other project related drilling which was expanded to support geotechnical, hydrological and site infrastructure studies. The geological model was updated during the year as part of the Mineral Resource addition that expanded the deposit to the north-west and at depth. The main deposit remains open to the north-west and drilling continues to explore the limits of the ore body.
United States
The Mineral Resource development drilling programme continued during the year at Cripple Creek & Victor. A total of 43,691m was completed. Infill drilling continued to improve definition of material within the current mine designs that will feed the mill facility currently under construction. Other drilling was directed toward identifying expansion opportunities for the current open pit operations through high wall laybacks. Selective drilling was also conducted to test deeper targets below or adjacent to planned open pit designs that may provide additional mill feed material.
TECHNOLOGY AND INNOVATION
Since 2010, the AngloGold Ashanti Technology & Innovation Consortium (ATIC), established by AngloGold Ashanti, has been looking for ways to leverage old technology in new ways, in an effort to not only extract additional gold from current depths of around 4,000m, but also to realise its long-term vision to reach depths of 5,000m and beyond.
In the current drill-and-blast paradigm used in deep-level gold and platinum hard rock mining, only drilling and cleaning is mechanical, while blasting makes use of explosives. This results in significant delays, as the mine has to be evacuated to blast and clear blast fumes. Additionally, blasting poses a significant seismicity risk, while this shift process does not allow for a continuous, 24-hour operation.
During 2013, the ATIC made progress in prototype development pertaining to the key technologies that are aimed at establishing the base to safely mine as much as possible of the gold available with less waste, at AngloGold Ashanti’s deep-level underground mining operations.
| 4C. | ORGANISATIONAL STRUCTURE |
GROUP STRUCTURE
AngloGold Ashanti’s operations are divided into the following regions:
South Africa – operations in Vaal River, West Wits and surface operations;
Continental Africa – operations in Ghana, Guinea, Namibia and Tanzania and joint venture operations in the DRC and Mali;
Australasia – operations 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.
Day-to-day management of the group is entrusted to AngloGold Ashanti’s executive committee, chaired by the Chief Executive Officer. See “Item 6.: Directors, senior 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. Specialised services directed from the centre but managed by local operations include mining, engineering, metallurgy, mineral resource management, safety and health, the environment, legal and human resources.
SUBSIDIARIES
AngloGold Ashanti Limited has investments in principal subsidiaries and joint venture interests, see “Item 19.: Exhibits – Exhibit 19.8 Principal subsidiaries and operating entities” 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-kilometersix kilometre thick sequence of inter-bedded argillaceous and arenaceous sediments that extend laterally for some 300 kilometerskilometres north-east/south-west and 100 kilometerskilometres 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 kilometerskilometres 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 metersmetres 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.
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.
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 kilometerkilometre above the Vaal Reef.
The “C” Reef is a thin, small pebble conglomerate with a carbon-rich basal contact, located approximately 270 metersmetres 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 | 260 | 140 | 420 | |||||||||||||||
Uranium plants | ||||||||||||||||||||
Capacity (000 tonnes/month) | – | – | 260 | – | – | |||||||||||||||
| 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 | |||||||||||||||
| 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 | |||||||||
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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.
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.
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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.
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.
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Description
63
Surface Operations
Surface Operations consists of 368,000 ounces in 2013.
Hard Rock Surface Sources
Description
Hard Rock Surface Sources extract gold from marginal ore dumps at Moab Khotsong.
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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 kilometres from Johannesburg approximately 8 kilometres 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.
MWS consists of 14 tailings dams, which extractare made up of deposits from three gold and uranium frommines that operated for 50 years.
The tailings dams are scattered over an area that stretches approximately 13.5 kilometres north to south and rock dumps at surface. This operating unit also produces backfill essential for mining operations.14 kilometres east to west. The producing divisions include:
The MWS gold plants will be modified to remove throughput restrictions to increase capacity.
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| construction | ||
The tailings dams are comprised of tailings material which originated from the third quarterprocessing of 2010underground ore from the now defunct Buffelsfontein Gold Mine (“BGM”) and Stilfontein Gold Mine (“SGM”). Both BGM and SGM predominately extracted gold from conglomerate reefs of the Witwatersrand Basin. The material contained in the tailings dams is operational.
67generally fine.
West Wits operations
Description:
The West Wits operations, Mponeng Savuka and TauTona, mines are situated on the West Wits Line near the townsouthwest 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.
| 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 | |||||||||
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Geology:
Two reef horizons are exploited at the West Wits operations, the Ventersdorp Contact Reef (VCR)VCR located at the top of the Central Rand Group and the Carbon Leader Reef (CLR)CLR near the base. The separation between the two reefs increases from east to west from 400 to 900 meters, owingmetres, due to unconformity in the VCR. TauTona and Savuka exploitexploits both reefs, whereas Mponeng only mines the VCR. The structure is relatively simple; faultsFaults of greater than 70 metersmetres are rare. The CLR consists of one or more conglomerate units and varies from several centimeterscentimetres to more than three metersmetres 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 centimeterscentimetres to more than three metersmetres in thickness.
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.
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70
West Wits – TauTona mine.
71
Description
72165,000 tonnes.
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| OBUASI | ||||||||||||||||
| Sulfide Treatment | Tailings Treatment | Oxide Treatment | IDUAPRIEM | |||||||||||||
| Plant | Plant | Plant | PLANT | |||||||||||||
| Capacity (000 tonnes/month) | 200 | 200 | 150 | 375 | ||||||||||||
| Obuasi | Iduapriem | |||||||||||||||
| Sulphide Treatment Plant | Tailings Treatment Plant | Alternate Ore Treatment Plant | Iduapriem Plant | |||||||||||||
Capacity (000 tonnes/month) | 195 | 180 | 120 | 388 | ||||||||||||
Ghana – Iduapriem
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 kilometerskilometres north of the coastal city of Takoradi and 10 kilometerskilometres 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 mineralizationmineralisation 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.
| 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 | |||||||||
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.
75
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 kilometerskilometres in a north-east/south-west trend insouth-western Ghana. Obuasi mineralizationmineralisation is shear-zone related and there are three main structural trends hosting gold mineralization:mineralisation: the Obuasi trend, the Gyabunsu trend and the Binsere trend.
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quartz veins which consist mainly of quartz with free gold in association with lesser amounts of various metal sulphides such as iron, zinc, lead and copper. The gold particles are generally fine-grained and occasionally are visible | ||
| 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 | |||||||||
sulphide ore which is characterised by the inclusion of the contractor.
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.
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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.
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 mineralisation (CAP) which occurs as aprons of colluvial or aspalaeo-channels of alluvial lateritic gravel adjacent to, and immediately above; and
in-situ quartz-vein related mineralisation hosted in meta-sediments with the better mineralisation associated with vein stockworks that occurs preferentially in the coarser, brittle siltstones and sandstones.
The mineralizedmineralised rocks have been deeply weathered to below 100 metersmetres in places to form saprolite or SAP mineralization.mineralisation (SAP). With the percentage of available CAP ore decreasing, a carbon-in-pulp (CIP)CIP plant is used to treat predominantly SAP ore.
| 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 | |||||||||
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MALI
80
Mali – Morila(attributable
Description
AngloGold Ashanti has an effective 40 percent)
The Morila mine has operated for 13 years and is situated some 180 kilometerskilometres 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 CIL 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 2.3 million tonnes per annum.
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. MineralizationMineralisation is characterizedcharacterised by silica-feldspar alteration and sulfide mineralizationsulphide mineralisation consists of arsenopyrite, pyrrhotite, pyrite and chalcopyrite.
| 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 | |||||||||
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Mali – Sadiola
Description
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 mineralizationmineralisation are marbles and greywackes which have been intensely weathered to a maximum depth of 200 meters.metres. A series of north-south trending faults occur that are the feeders to the Sadiola mineralization.mineralisation. 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,mineralisation, mainly with the marble where the porosity was greatest. The Sadiola Hill deposit generally consists of two zones, an upper oxidizedoxidised cap and an underlying sulfidesulphide zone. From 1996 until 2002, shallow saprolite2010, oxide and transitional ore from the Sadiola Hill pit was the primary ore source. Since 2002,source for the deeper saprolitic sulfide ore has been mined and in future will progressively replacemine while being increasingly supplemented from the depleting oxide reserves.
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| 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 | |||||||||
83transitional ore.
Mali – Yatela
Description
The Yatela mine which is a heap leach operation is situated in western Mali, some 25 kilometres north of Sadiola and approximately 50 kilometres south-southwest of the mine.
Geology:
Yatela mineralizationmineralisation 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,mineralisation, with an associated weakly mineralizedmineralised diorite intrusion. MineralizationMineralisation 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.
84
NAMIBIA
Namibia – Navachab
| 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 | |||||||||
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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.
Geology:
The Navachab deposit is hosted by Damaran greenschistam-phibolitegreenschist amphibolite 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 mineralizedmineralised zone forms a sheet-like body which plunges at an angle of approximately 20 degrees to the north-west. The mineralizationmineralisation 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.
| 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 | |||||||||
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TANZANIA
Tanzania – Geita
The Geita gold mine is located in the Lake Victoria goldfields of the Mwanza region of Tanzania, about 120 kilometerskilometres from Mwanza and 4 kilometers5 kilometres 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 5.25.1 million tonnes per annum CIL processing plant.
Geology
Geita is an Archaean mesothermal mainly BIF-hosted deposit. MineralizationMineralisation 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 mineralizationmineralisation can occur in the diorite as well (usually in association with BIF-hosted mineralization)mineralisation), and approximately 20 percent of the gold is hosted in the diorite.
DEMOCRATIC REPUBLIC OF THE CONGO
Kibali
Description
The Kibali Gold Mine is a Joint venture between AngloGold Ashanti (45 percent), Randgold Resources Limited (45 percent) with Société Miniere de Kilo-Moto (SOKIMO), a state-owned gold company owning the balance. Randgold Resources is the operator 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 | |||||||||
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The mine is located within 10 kilometres of the town of Watsa in the first quarter to 90,000 ouncesnorth east portion of the DRC in the second quarter. Output was hampered duringOrientale Province. Access to the third quarter asarea is available by gravel road from the Ugandan border town of Arua over a resultdistance of 180 kilometres. Power to the mine is self-generated.
The Kibali Gold Mine has 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 deliveredprocessing operation capable of producing an average grade of 3g/t.600koz of gold per annum by treating 6Mtpa throughput. The processing plant has a capability of process oxide and sulphide material. Once the project is completed, the mine will consist of:
An open pit generating a peak run of mine capacity of 7Mtpa;
Vertical shaft complex generating a peak run of mine capacity of 3Mtpa;
Decline underground development providing a run of mine capacity of 1.4Mtpa;
Tailings storage facilities with a total capacity of 75Mt; and
Associated infrastructure.
In October 2013, the year improved by 29 percentoxide circuit was commissioned. The sulphide circuit cold commissioning began in February 2014.
On the vertical shaft, winder installation was completed in October and the shaft depth at the end of December was 195.2 metres.
Geology
The Kibali Gold Mine is located within the Moto Greenstone Belt, which consists of Archean Kibalian volcano sedimentary rocks and ironstone-chert horizons that have been metamorphosed to $697 per ounce, mainly as a resultgreenschist facies.
The combined Karagba, Chauffeur and Durba (KCD) deposit is host to the majority of lower reagent costs,the currently defined Mineral Resource and Ore Reserve, as well as the current open pit and underground mining operations. KCD is hosted within a reduction in generalmineralised corridor that also hosts the Sessenge, Gorumbwa and engineering stores.
The known deposits of the constructionKibali project are hosted along a reactivated thrust plane that creates plunging lodes of mineralisation as exemplified by the KCD deposit. The majority of gold mineralisation identified to date is disseminated style, hosted within a re-designed run-of-mine pad to improve the ore-blending capabilitysequence of the plant. All planned performance parameters were achieved.
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AUSTRALASIA
AUSTRALIA
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Description
The mine consists of a large open pit which is now in its fourteenthsixteenth year of operation, and an underground mine which began in 2004. Mining is conducted by contractors and the ore is treated in a conventional gravity and CILcarbon-in-leach (CIL) processing plant, which is owner-managed.
90managed by AngloGold Ashanti. Power to the mine is self-generated. The CIL processing plant has a nameplate capacity of 2.5 million tonnes per annum, although the plant currently processes in excess of 3.5 million tonnes per annum. The mine is a fly-in fly-out operation with village facilities at the mine. The mine is also accessible by road which provides supplies for the operation.
Geology
| 2010 | 2009 | 2008 | ||||||||||
| Pay limit (oz/t) | 0.14 | 0.08 | 0.09 | |||||||||
| Pay limit (g/t) | 4.32 | 2.45 | 2.79 | |||||||||
Recovered grade (oz/t)(2) | 0.094 | 0.084 | 0.101 | |||||||||
Recovered grade (g/t)(2) | 3.22 | 2.87 | 3.46 | |||||||||
| Gold production (000 oz) | 396 | 401 | 433 | |||||||||
Total cash costs ($/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 | |||||||||
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Australia - Tropicana
Description
The project is located 330 kilometers east-northeast of the mining service centre, Kalgoorlie,mine was commissioned in Western Australia and 200 kilometers east of AngloGold Ashanti’s Sunrise Dam Gold Mine. The area is remote and infrastructure is limited.
Mining currently occurs from future discoveries.
Power for the mine is generated from diesel via a contractor operated powerhouse.
The mine is a fly in fly out operation, with a mine site village and aviation services operated from Perth and Kalgoorlie. A 220km private road and the public road network provide access for the delivery of supplies to the operation.
The Tropicana JV includes 10,500km2 of tenure over a water bore field,strike length of approximately 300km, with active exploration programmes seeking both satellite extensions to the Tropicana Gold Mine and standalone resource developments.
Geology
Gold mineralisation at Tropicana occurs in high metamorphic grade gneissic rocks, which dip gently to the south east. Mineralisation is structurally controlled and occurs within a sealed airstrip and an accommodation village.
THE AMERICAS
UNITED STATES OF AMERICA
United States 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.
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Description
93
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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 kilometerskilometres 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 thenin-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 tonorth-east. These structures acted as primary conduits for the late-stage gold mineralizingmineralising solutions. Higher grade pods of mineralizationmineralisation occur at structural intersections and/or as sheeted veins along zones of strike deflection. High-grade gold mineralizationmineralisation is associated with K-feldspar + pyrite +/
+/- carbonate alteration and occurs adjacent to the major structural and intrusive dyke zones. The broader zones of disseminated mineralizationmineralisation 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 metersmetres 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 mineralizationmineralisation can be encapsulated by iron and manganese oxides, pyrite, K-feldspar alteration and quartz.
Cripple Creek & Victor —– Summary of metallurgical 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 | |||||||||
Gold plants | ||
Capacity (000 tonnes/month) | ||
- crushed ore production | ||
- total ore production | 1,814 | |
- solution processed | 2,627 |
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ARGENTINA
Argentina – Cerro Vanguardia in Argentina and AngloGold Ashanti Córrego do Sítio Mineração (AGA Mineração) and Serra Grande in Brazil.
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.
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Geology
Gold and silver mineralizationmineralisation at Cerro Vanguardia occurs within a vertical range of about 150 metersmetres to 200 metersmetres 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 oxidizedoxidised to limonite. The veins show sharp contacts with the surrounding ignimbrite which hosts narrow stockwork zones that are weakly mineralizedmineralised and appear to have been cut by a sequence of north-east-trending faults that have southerly movement with no appreciable lateral displacement.
| 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 | |||||||||
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BRAZIL
Description
AngloGold Ashanti Córrego do Sítio Mineração (AGA Mineração)
The new company is called AngloGold Ashanti Córrego do Sítio Mineração (AGA Mineração).
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 Archaeanvolcano-sedimentary sequences andPre-Cambrian granitic complexes. The host to the gold mineralizationmineralisation 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 mineralizationmineralisation associated with sulfidessulphides 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 controlling mineralizationmineralisation 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). MineralizationMineralisation is due to the interaction of low salinity carbon dioxide rich fluids with the high-iron BIF, basalts and carbonaceous graphitic schists. Sulfide mineralizationSulphide mineralisation 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.mineralisation. 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 | |||||||||
| 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 | |||||||||
| Corrego do Sitio | Corrego do Sito | AngloGold Ashanti Mineração | Serra Grade | |||||||||||||||||
| Oxide | Sulphide | Cuiaba | Raposos | |||||||||||||||||
Capacity (000 tonnes/month) | 38 | 50 | 143 | 28 | 107 | |||||||||||||||
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.
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Description
Serra Grande is located in central Brazil, in the state of Goiás, about 5 kilometerskilometres 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.
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 mineralizationmineralisation is associated with massive sulfidessulphides 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 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 majornorth-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 tonorth-west-south-east basement block faults may have provided secondary fluid migration, and development of earlyanti-formal warps in the thrust sheets; these structures probably define thequasi-regular spacing of significant mineralizationmineralisation within the belt. The D1 thrust stack was gently folded bynon-cylindrical folds. Gold mineralizingmineralising fluids probably migrated during this event, with similarsouth-south-west tonorth-north-east migration, and focusing on bedding slip during folding. Gold mineralizationmineralisation 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.
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 | |||||||||
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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 mineralizedmineralised material at a mining operation. This mineralizedmineralised material is not necessarily economically viable.viable over the full extent of the operation. Exclusions on the grounds of safety (for example, stability pillars and shaft pillars) are then also 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 mineralizedmineralised 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 mineralizedmineralised material (with dilution)dilution and discounts) 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 assumedestimated values for gold price, operating costs and metallurgical recoveries. An optimizationoptimisation process is then applied to determine the combination of blocks within the model that make a positive contribution under these assumptions.estimations. 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 2010determining the 2013 and 2009 Reserves2012 Ore Reserve are 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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| 2013 (3 year average) | 2013 (Business Plan) | 2012 (3 year average) |
Units | |||||||||||||
Ore Reserve Gold Price | 1,550 | 1,100 | 1,488 | US$ per ounce | ||||||||||||
Exchange Rate – South Africa | 8.36 | 10.19 | 7.58 | ZAR/US$ | ||||||||||||
Ore Reserve Gold Price (South African rand per ounce) – South Africa | 12,864 | 11,582 | 11,345 | ZAR per ounce | ||||||||||||
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, 2012 edition) and the South African Code for Reporting of Exploration Results, Mineral Resources and OreMineral Reserves (SAMREC 2007)(The SAMREC Code, 2007 edition and amended July 2009). The SEC’s Industry Guide 7 does not recognizerecognise Mineral Resources. Accordingly, AngloGold Ashanti does not report estimates of Mineral ResourcesResource in this annual report on Form 20-F.
The AngloGold Ashanti Ore Reserve increaseddecreased from 68.1 million ounces in 2009 to 71.2 million ounces74.1Moz in December 2010. A year-on-year increase2012 to 67.9Moz in December 2013. This gross annual decrease of 8.7 million ounces occurred before6.2Moz includes depletion of 5.0Moz. The balance of 1.2Moz reductions in Ore Reserve, resulted from changes in economic assumptions between 2012 and 2013 which resulted in a reduction of 3.4Moz to the subtraction of 5.6 million ounces for depletion, resultingOre Reserve, while exploration and modelling changes resulted in an increase of 3.1 million ounces after the subtraction of depletion.2.2Moz. A gold price of $850$1,100 per ounce (ZAR7,404(ZAR11,582 per ounce) was used for Ore Reserve estimates (2009: $840(2012: $1,300 per ounce, ZAR6,636ZAR9,324 per ounce).
The principal changes in AngloGold Ashanti’s Ore Reserves as at 31 December 31, 20102013, compared with those published as at 31 December 31, 20092012 are as follows:
| Ore Reserve | Million oz | |||||
| Ore Reserve as at 31 December 2012 | 74.1 | |||||
Reductions | ||||||
Savuka | Depletions and | |||||
Moab Khotsong | ||||||
Sadiola | ||||||
Geita | Economic changes had a significant negative effect | (1.5) | ||||
CC&V | Lower gold price | (1.2) | ||||
Other | Total of non-significant changes | |||||
Additions | ||||||
Mponeng | ||||||
| 0.8 | ||||||
Other | Total of non-significant changes | 0.4 | ||||
Ore | ||||||
| 67.9 | ||||||
AngloGold Ashanti will continuestrives to pursue a strategy of increasing value-addingactively create value by growing its major asset – the Ore Reserves through expansion projects,Reserve. This drive is based on well-defined brownfields and greenfields exploration programme, innovation in both geological modeling and acquisitionmine planning and optimisation of new assets.
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.
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By-products
External reviews 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 at2013, the following AngloGold Ashanti operations were submitted forsubjected to external auditreviews in line with the policy that each operation / project will be reviewed by a number of international consulting companies:an independent third party on average once every three years:
Mineral Resource and Ore Reserve at Kopanang and Great Noligwa Mines
Mineral Resource and Ore Reserve at TauTona Mine
Ore Reserve at Kibali Mine
The company has been informed that the auditreviews identified no material shortcomings in the process by which AngloGold Ashanti’s grade models were evaluated. It isThe external reviews were conducted by the company’s intention to continue this process so that each of its operations will be audited, on average, every three years.
Competent Persons
The information in this report that relates torelating Ore Reserves is based on information compiled by or under the supervision of the Competent Persons.Persons as defined in the JORC or SAMREC Codes. All Competent Persons are employed by AngloGold Ashanti, unless stated otherwise, and have sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking. The Competent Persons consent to the inclusion of Exploration Results and Ore ReservesReserve information in this report, in the form and context in which it appears.
During the past decade, the company has developed and implemented a rigorous system of internal and external reviews aimed at providing assurance in respect of Exploration Results, Mineral Resources and Ore Reserves.Reserve estimates were completed by suitably qualified Competent Persons from within AngloGold Ashanti. A documented chain of responsibility exists from the Competent Persons at the operations to the company’s Mineral Resource and Ore Reserve Steering Committee. Accordingly, the Chairman of the Mineral Resource and Ore Reserve Steering Committee, VA Chamberlain, MSc (Mining Engineering), BSc Hons(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.
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| 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 31 December 2013 | |||||||||||||||||||||||||||
| 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) | (Moz)) | (million) | (oz/ton) | (Moz) | percent | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
South Africa | ||||||||||||||||||||||||||||
Vaal River(6) | ||||||||||||||||||||||||||||
Great Noligwa | 1.64 | 0.242 | 0.40 | 0.38 | 0.214 | 0.08 | 94.5 | |||||||||||||||||||||
Kopanang | 2.42 | 0.188 | 0.45 | 5.06 | 0.197 | 1.00 | 95.5 | |||||||||||||||||||||
Moab Khotsong(2) | 1.37 | 0.331 | 0.45 | 19.62 | 0.289 | 5.67 | 95.1-96.0(4) | |||||||||||||||||||||
West Wits | ||||||||||||||||||||||||||||
Mponeng(2) | 3.08 | 0.255 | 0.79 | 46.98 | 0.293 | 13.78 | 97.9-98.4(4) | |||||||||||||||||||||
Savuka(10) | 0.00 | 0.00 | 0.00 | 0.00 | 0.000 | 0.00 | 0.00 | |||||||||||||||||||||
TauTona | 0.69 | 0.273 | 0.19 | 4.56 | 0.263 | 1.20 | 97.3 | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Surface | ||||||||||||||||||||||||||||
Surface sources(6)(11) | 157.00 | 0.006 | 1.00 | 730.25 | 0.008 | 5.89 | 57.6-90(4) | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Continental Africa | ||||||||||||||||||||||||||||
Democratic Republic of the Congo | ||||||||||||||||||||||||||||
Kibali (45 percent)(2)(3) | 2.67 | 0.069 | 0.18 | 41.04 | 0.121 | 4.98 | 94.5-88.9(9) | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Ghana | ||||||||||||||||||||||||||||
Iduapriem | 15.04 | 0.032 | 0.47 | 30.40 | 0.049 | 1.50 | 95.0 | |||||||||||||||||||||
Obuasi(2) | 19.94 | 0.175 | 3.50 | 28.41 | 0.163 | 4.64 | 85.4 | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Guinea | ||||||||||||||||||||||||||||
Siguiri (85 percent)(3) | 37.17 | 0.018 | 0.68 | 57.88 | 0.020 | 1.17 | 88.0-90.0(4) | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Mali | ||||||||||||||||||||||||||||
Morila (40 percent)(3) | 0.00 | 0.000 | 0.00 | 0.63 | 0.070 | 0.04 | 88.8-91.0(4) | |||||||||||||||||||||
Sadiola (41 percent)(3) | 0.00 | 0.000 | 0.00 | 25.49 | 0.056 | 1.43 | 76.0-94.0(4) | |||||||||||||||||||||
Yatela (40 percent)(3) (10) | 0.00 | 0.000 | 0.00 | 0.00 | 0.000 | 0.00 | 0.00 | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Namibia | ||||||||||||||||||||||||||||
Navachab* | 0.00 | 0.000 | 0.00 | 51.08 | 0.038 | 1.92 | 88.6 | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Tanzania | ||||||||||||||||||||||||||||
Geita | 0.00 | 0.000 | 0.00 | 40.70 | 0.096 | 3.90 | 46.2-100.0 (4) | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Australasia | ||||||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||||||
Sunrise Dam | 16.47 | 0.032 | 0.54 | 6.83 | 0.094 | 0.64 | 85.5 | |||||||||||||||||||||
Tropicana (70 percent)(3) | 19.21 | 0.066 | 1.27 | 23.10 | 0.059 | 1.36 | 90.0 | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Americas | ||||||||||||||||||||||||||||
Argentina | ||||||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent)(3)(7) | 11.32 | 0.030 | 0.34 | 8.05 | 0.153 | 1.23 | 61.3-94.3(4) | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Brazil | ||||||||||||||||||||||||||||
AGA Mineraçáo(2)(8) | 5.49 | 0.148 | 0.81 | 8.66 | 0.134 | 1.16 | 88.0-93.0(4) | |||||||||||||||||||||
Serra Grande | 3.77 | 0.080 | 0.30 | 2.70 | 0.098 | 0.26 | 92.1 | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
United States of America | ||||||||||||||||||||||||||||
Cripple Creek & Victor | 134.49 | 0.025 | 3.31 | 66.85 | 0.021 | 1.40 | 43.0-95.0(4) | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Total | 431.77 | 0.034 | 14.68 | 1,198.70 | 0.044 | 53.26 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
| (1) | Ore |
| (2) | Proven and/or Probable Ore |
| (3) | Ore |
| (4) | Recovery factor varies according to ore type. |
| (5) | Tons refers to a short ton, which is equivalent to |
| (6) | The Vaal Reef Ore |
| (7) | The Ore Reserve contains |
| (8) | The Ore Reserve contains |
| (9) | ||
Open pit and underground mining, respectively. |
| (10) | No Ore Reserve is declared for 2013. |
| (11) |
|
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Rounding may result in computational differences.
| 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 | |||||||||
114
| Mine | Tons (millions) | Grade (ounces/ton) | Gold Content | |||||||
| (million ounces) | ||||||||||
Moab Khotsong | 15.46 | 0.268 | 4.14 | |||||||
Mponeng | 25.69 | 0.354 | 9.09 | |||||||
Kibali | 21.70 | 0.165 | 3.58 | |||||||
Obuasi | 3.30 | 0.382 | 1.26 | |||||||
AGA Mineração | 3.99 | 0.134 | 0.53 | |||||||
Total | 70.14 | 0.265 | 18.60 | |||||||
The Ore Reserve has been determined based on completed economic studies.
| 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 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
| Ore Reserve: Imperial | At 31 December 2012 | |||||||||||||||||||||||||||
| 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) | (Moz) | (million) | (oz/ton) | (Moz) | 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)(10) | 156.20 | 0.007 | 1.05 | 723.47 | 0.008 | 6.12 | 51.5-93(4) | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Continental Africa | ||||||||||||||||||||||||||||
Democratic Republic of the 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) | Ore |
| (2) | Proven and/or Probable Ore |
| (3) | Ore |
| (4) | Recovery factor varies according to ore type. |
| (5) | Tons refers to a short ton, which is equivalent to |
| (6) | The Vaal Reef Ore |
| (7) | The Ore Reserve contains |
| (8) |
|
| (9) | Open pit and underground mining, respectively. |
| (10) |
|
115Rounding may result in computational differences.
| 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 | 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 |
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 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
| Ore Reserve: Metric | At 31 December 2013 | |||||||||||||||||||||||||||
| Proven Ore Reserve(1)(2) | Probable Ore Reserve(1)(2) | Metallurgical | ||||||||||||||||||||||||||
| Tonnes(6) | Grade | Gold | Tonnes(6) | Grade | Gold | Recovery | ||||||||||||||||||||||
| Content | Content | factor | ||||||||||||||||||||||||||
| (million) | (g/t) | (tonnes) | (million) | (g/t) | (tonnes) | percent | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
South Africa | ||||||||||||||||||||||||||||
Vaal River(5) | ||||||||||||||||||||||||||||
Great Noligwa | 1.48 | 8.31 | 12.33 | 0.35 | 7.35 | 2.56 | 94.5 | |||||||||||||||||||||
Kopanang | 2.19 | 6.46 | 14.15 | 4.59 | 6.77 | 31.09 | 95.5 | |||||||||||||||||||||
Moab Khotsong(2) | 1.24 | 11.34 | 14.11 | 17.79 | 9.91 | 176.29 | 95.1-96.0 (4) | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
West Wits | ||||||||||||||||||||||||||||
Mponeng(2) | 2.80 | 8.73 | 24.44 | 42.62 | 10.06 | 428.63 | 97.9-98.4(4) | |||||||||||||||||||||
Savuka(10) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||
TauTona | 0.62 | 9.36 | 5.85 | 4.14 | 9.02 | 37.33 | 97.3 | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Surface | ||||||||||||||||||||||||||||
Surface sources(5)(11) | 142.43 | 0.22 | 31.18 | 662.48 | 0.28 | 183.18 | 57.6-90(4) | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Continental Africa | ||||||||||||||||||||||||||||
Democratic Republic of the Congo | ||||||||||||||||||||||||||||
Kibali (45 percent)(2)(3) | 2.43 | 2.36 | 5.71 | 37.23 | 4.16 | 154.98 | 94.5-88.9(9) | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Ghana | ||||||||||||||||||||||||||||
Iduapriem | 13.64 | 1.08 | 14.75 | 27.58 | 1.69 | 46.54 | 95.0 | |||||||||||||||||||||
Obuasi(2) | 18.09 | 6.02 | 108.87 | 25.77 | 5.60 | 144.36 | 85.4 | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Guinea | ||||||||||||||||||||||||||||
Siguiri (85 percent)(3) | 33.72 | 0.62 | 21.03 | 52.51 | 0.69 | 36.26 | 88.0-90.0(4) | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Mali | ||||||||||||||||||||||||||||
Morila (40 percent)(3) | 0.00 | 0.00 | 0.00 | 0.57 | 2.40 | 1.38 | 88.8-91.0(4) | |||||||||||||||||||||
Sadiola (41 percent)(3) | 0.00 | 0.00 | 0.00 | 23.13 | 1.93 | 44.53 | 76.0-94.0(4) | |||||||||||||||||||||
Yatela (40 percent)(3) (10) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Namibia | ||||||||||||||||||||||||||||
Navachab* | 0.00 | 0.00 | 0.00 | 46.34 | 1.29 | 59.65 | 88.6 | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Tanzania | ||||||||||||||||||||||||||||
Geita | 0.00 | 0.00 | 0.00 | 36.92 | 3.28 | 121.29 | 46.2-100.0 (4) | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Australasia | ||||||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||||||
Sunrise Dam | 14.94 | 1.11 | 16.65 | 6.20 | 3.22 | 19.97 | 85.5 | |||||||||||||||||||||
Tropicana (70 percent)(3) | 17.43 | 2.26 | 39.43 | 20.96 | 2.02 | 42.36 | 90.0 | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Americas | ||||||||||||||||||||||||||||
Argentina | ||||||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent)(3)(7) | 10.27 | 1.04 | 10.63 | 7.30 | 5.23 | 38.20 | 61.3-94.3(4) | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Brazil | ||||||||||||||||||||||||||||
AGA Mineraçáo(2)(8) | 4.98 | 5.08 | 25.33 | 7.85 | 4.58 | 35.97 | 88.0-93.0(4) | |||||||||||||||||||||
Serra Grande | 3.42 | 2.74 | 9.38 | 2.45 | 3.35 | 8.22 | 92.1 | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
United States of America | ||||||||||||||||||||||||||||
Cripple Creek & Victor | 122.01 | 0.84 | 102.83 | 60.65 | 0.72 | 43.67 | 43.0-95.0(4) | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Total | 391.70 | 1.17 | 456.65 | 1,087.44 | 1.52 | 1,656.45 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
| (1) | Ore |
| (2) | Proven and/or Probable Ore |
| (3) | Ore |
| (4) | Recovery factor varies according to ore type. |
| (5) | The Vaal Reef Ore |
| (6) | Tonnes refers to a metric tonne which is equivalent to 1000 kilograms. |
| (7) | The Ore Reserve contains |
| (8) | The Ore Reserve contains |
| (9) | ||
Open pit and underground mining, respectively. |
| (10) | No Ore Reserve is declared for 2013. |
| (11) |
|
117
Rounding may result in computational differences.
| 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 | |||||||||
118
| Mine | Tonnes (millions) | Grade (grams/tonne) | Gold Content (tonnes) | |||
Moab Khotsong | 14.03 | 9.18 | 128.75 | |||
Mponeng | 23.31 | 12.13 | 282.63 | |||
Kibali | 19.69 | 5.66 | 111.33 | |||
Obuasi | 2.99 | 13.11 | 39.23 | |||
AGA Mineração | 3.62 | 4.58 | 16.57 | |||
Total | 63.63 | 9.09 | 578.52 |
| 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 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
| Ore Reserve: Metric | At 31 December 2012 | |||||||||||||||||||||||||||
| 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 | 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)(10) | 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(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 | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
| (1) | Ore |
| (2) | Proven and/or Probable Ore |
| (3) | Ore |
| (4) | Recovery factor varies according to ore type. |
| (5) | The Vaal Reef Ore |
| (6) | Tonnes refers to a metric tonne which is equivalent to 1000 kilograms. |
| (7) | The Ore Reserve contains |
| (8) |
|
| (9) | Open pit and underground mining, respectively. |
| (10) | ||
Includes Mine Waste Solutions (MWS). |
119Rounding may result in computational differences.
| 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 | |||||||||
120
| 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 |
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 31 December 2013 | |||||||||||
| ||||||||||||
| Tons (million) | Grade (ounces/ton) | Gold content (million ounces) | ||||||||||
| ||||||||||||
South Africa | ||||||||||||
Surface sources(2) | 887.26 | 0.008 | 6.89 | |||||||||
| ||||||||||||
Continental Africa | ||||||||||||
Ghana | ||||||||||||
Iduapriem | 7.81 | 0.025 | 0.19 | |||||||||
Obuasi | 6.57 | 0.058 | 0.38 | |||||||||
| ||||||||||||
Guinea | ||||||||||||
Siguiri (85 percent)(1)(3) | 65.75 | 0.016 | 1.08 | |||||||||
| ||||||||||||
Mali | ||||||||||||
Morila (40 percent)(1) | 0.19 | 0.033 | 0.01 | |||||||||
Sadiola (41 percent)(1) | 2.91 | 0.032 | 0.09 | |||||||||
| ||||||||||||
Namibia | ||||||||||||
Navachab* | 14.62 | 0.021 | 0.31 | |||||||||
| ||||||||||||
Tanzania | ||||||||||||
Geita | 11.55 | 0.036 | 0.41 | |||||||||
| ||||||||||||
Australasia | ||||||||||||
Australia | ||||||||||||
Sunrise Dam | 16.47 | 0.032 | 0.54 | |||||||||
Tropicana (70 percent)(1) | 2.04 | 0.060 | 0.12 | |||||||||
| ||||||||||||
Americas | ||||||||||||
Argentina | ||||||||||||
Cerro Vanguardia (92.5 percent)(1) | 12.00 | 0.017 | 0.20 | |||||||||
| ||||||||||||
Brazil | ||||||||||||
Serra Grande | 0.20 | 0.048 | 0.01 | |||||||||
| ||||||||||||
United States of America | ||||||||||||
Cripple Creek & Victor | 0.71 | 0.032 | 0.02 | |||||||||
| ||||||||||||
| (1) | Ore |
| (2) |
|
| (3) | Spent heap included in Ore Reserve. | |
121* On 10 February 2014, AngloGold Ashanti announced that it had signed a binding agreement to sell Navachab subject to certain conditions.
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 31 December 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 |
| (2) |
|
| (3) | Spent heap included in Ore Reserve. | |
122
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 31 December 2013 | |||||||||||
| ||||||||||||
| Tonnes (million) | Grade (grams/tonne) | Gold content (tonnes) | ||||||||||
| ||||||||||||
South Africa | ||||||||||||
Surface sources(2) | 804.91 | 0.27 | 214.36 | |||||||||
| ||||||||||||
Continental Africa | ||||||||||||
Ghana | ||||||||||||
Iduapriem | 7.08 | 0.86 | 6.06 | |||||||||
Obuasi | 5.96 | 1.99 | 11.86 | |||||||||
| ||||||||||||
Guinea | ||||||||||||
Siguiri (85 percent)(1)(3) | 59.65 | 0.56 | 33.49 | |||||||||
| ||||||||||||
Mali | ||||||||||||
Morila (40 percent)(1) | 0.17 | 1.14 | 0.20 | |||||||||
Sadiola (41 percent)(1) | 2.64 | 1.11 | 2.92 | |||||||||
| ||||||||||||
Namibia | ||||||||||||
Navachab* | 13.26 | 0.73 | 9.66 | |||||||||
| ||||||||||||
Tanzania | ||||||||||||
Geita | 10.48 | 1.22 | 12.83 | |||||||||
| ||||||||||||
Australasia | ||||||||||||
Australia | ||||||||||||
Sunrise Dam | 14.94 | 1.11 | 16.65 | |||||||||
Tropicana (70 percent)(1) | 1.85 | 2.04 | 3.79 | |||||||||
| ||||||||||||
Americas | ||||||||||||
Argentina | ||||||||||||
Cerro Vanguardia (92.5 percent)(1) | 10.89 | 0.58 | 6.27 | |||||||||
| ||||||||||||
Brazil | ||||||||||||
Serra Grande | 0.19 | 1.65 | 0.31 | |||||||||
| ||||||||||||
United States of America | ||||||||||||
Cripple Creek & Victor | 0.64 | 1.09 | 0.70 | |||||||||
| ||||||||||||
| (1) | Ore |
| (2) |
|
| (3) | Spent heap included in Ore Reserve. | |
123* On 10 February 2014, AngloGold Ashanti announced that it had signed a binding agreement to sell Navachab subject to certain conditions.
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 31 December 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 | |||||||||
Tropicana (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 |
| (2) |
|
| (3) | Spent heap included in Ore Reserve. | |
124
In determining the Proven and Probable Ore Reserves,Reserve, AngloGold Ashanti applied the following drill hole spacings:
| Drill Hole Spacings | ||||
| Proven Ore Reserve | Probable Ore Reserve | |||
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 | ||||
Variable sampling strategies: Belt samplers, cross stream residue samplers and bulk sampling campaigns | Variable sampling strategies: Belt samplers, cross stream residue samplers | |||
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 328 x 246 feet | ||
Obuasi | 33 x 33 feet, 66 x 66 feet, 131 x 66 feet, 164 x 164 feet | 98 x 98 feet, | ||
197 x 197 feet | ||||
Guinea | ||||
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 | ||||
Morila | ||||
33 x 33 feet | 98 x 98 feet | |||
Sadiola | ||||
16 x 33 feet, 82 x 82 feet | 82 x | |||
Namibia | ||||
Navachab | ||||
16 x 33 feet, 33 x 33 feet | 82 x | |||
Tanzania | ||||
Geita | 16 x 33 feet | 66 x 66 feet, 131 x 66 feet, 131 x 131 feet, 164 x 164 feet | ||
Australasia | ||||
Australia | ||||
Sunrise Dam | 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 | ||||
Argentina | ||||
Cerro Vanguardia | 10 x 49 feet, 41 x 16 feet | 131 x 131 feet | ||
Brazil | ||||
AGA Mineraçáo | ||||
66 x 98 x 197 | 98 x | |||
Serra Grande | ||||
33 x 33 feet, 66 x 33 feet | 33 x 66 feet, 66 x 164 feet | |||
United States of America | ||||
Cripple Creek & Victor | <98 x 98 feet | 148 x | ||
125
In determining the Proven and Probable Ore Reserves,Reserve, AngloGold Ashanti applied the following table of drill hole spacings:
| Drill Hole Spacing | ||||||
| Proven Ore Reserve | Probable Ore Reserve | |||||
South Africa | ||||||
Underground sources | ||||||
Ore body opened up, developed and sampled on a 2 to 3 | From a 40 x 40 | |||||
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 | ||||||
Democratic Republic of the Congo | ||||||
Kibali | 10 x 5 metre | 40 x 40 metre | ||||
Ghana | ||||||
Iduapriem | 10 x 15 metre, 50 x 50 metre, 50 x 75 metre, 100 x 50 metre | 50 x 75 metre, 50 x 100 metre, 100 x 75 metre | ||||
Obuasi | 10 x 10 metre, 20 x 20 metre, 40 x 20 metre, 50 x 50 metre | 30 x 30 metre, 50 x 50 metre, 60 x 60 metre | ||||
Guinea | ||||||
Siguiri | 5 x 10 metre, 5 x 12 metre, 10 x 10 metre | 20 x 40 metre, 25 x 25 metre, 50 x 25 metre | ||||
Mali | ||||||
Morila | 10 x 10 metre | 30 x 30 metre | ||||
Sadiola | 5 x 10 metre, 25 x 25 metre | 25 x 25 metre, 50 x 25 metre | ||||
Namibia | ||||||
Navachab | 5 x 10 metre, 10 x 10 metre | 25 x 25 metre | ||||
Tanzania | ||||||
Geita | 5 x 10 metre | 20 x 20 metre, 40 x 20 metre, 40 x 40 metre, 50 x 50 metre | ||||
Australasia | ||||||
Australia | ||||||
Sunrise Dam | 25 x 25 metre | 20 x 20 metre, 40 x 40 metre | ||||
Tropicana | 10 x 12 metre, 25 x 25 metre | 50 x 50 | ||||
Americas | ||||||
Argentina | ||||||
Cerro Vanguardia | 3 x 15 metre, 12.5 x 5 | |||||
Brazil | ||||||
AGA Mineraçáo | 20 x 10 metre, 25 x 25 metre, 30 x 60 metre | 30 x 25 metre, 50 x 30 metre, 50 x 50 metre, 30 x 60 metre, 125 x 25 metre | ||||
Serra Grande | 10 x 10 metre, 20 x 10 metre | 10 x 20 metre, 20 x 50 metre | ||||
United States of America | ||||||
Cripple Creek & Victor | <30 x 30 | |||||
126
127
128
129
130
131
132
133
Not applicable.
134
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 GAAPIFRS for the three years ended and as at 31 December 31, 2010, 20092013, 2012 and 2008.
This item should be read in conjunction with the Company’scompany’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 31 December 2012 and 2013 and therefore in compliance with Regulation S-X Rule 2-05 the separate reports of the other auditors are included in Item 18.
Overview
AngloGold Ashanti 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 sulphuric acid as by-products. Revenue from the sale of by-products is recognised as a reduction of cost of sales in the consolidated statement of income. By-product revenue amounted to $149 million in 2013 (2012: $206 million; 2011: $224 million). See “Note 3 – Revenue” to the consolidated financial statements for additional information. 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 CompanyVaal River, West Wits and Surface 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 31 December 31, 20102013 the Companycompany had on an attributable basis, Proven and Probable Ore Reserves of approximately 71.267.9 million ounces (including joint ventures). For the year ended 31 December 31, 2010,2013, AngloGold Ashanti had an attributable gold production of approximately 4.524.11 million ounces (including joint ventures).
AngloGold Ashanti’s costs and expenses consist primarily of production costs, amortisation, royalties, corporate administration, marketing and depreciation, depletionother expenses and amortizationexploration and exploration.evaluation costs. Production costs include labor, mining contracts, fuel, lubricants, power, consumablesalaries and wages, stores whichand other consumables (which include explosives, timber and other consumablesconsumables), fuel, power and utilities.water, contractors’ costs and costs of environmental rehabilitation. The Company’scompany’s mining operations consist of deep-level underground mining methodsmines as well as open-pit operations, both of which are laborlabour intensive, therefore laborsalaries and wages is a significant component of production costs.
Outlook
Gold production for 2014 is forecast to be between 4.2 million and 4.5 million ounces. Capital expenditure is expected to be approximately between $1.35 billion and $1.45 billion in 2014 based on the following assumptions: R11.00/$, $0.85/A$, BRL2.45/$ and ARS peso 6.50/$; Brent crude at $100 per barrel (2013: $1.99 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, labour 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 on a global basis, and“Item 3D.: Risk factors”. See also “Note regarding forward-looking statements”. Furthermore the Company applies measures wherever appropriate and feasible, to reduce its exposure to these factors.
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| 5A. | OPERATING RESULTS |
INTRODUCTION
The gold price in future years.
The gold market suffered its largest two day fall in more than 30 years as the gold price fell by $228 per ounce on 12 and 15 April 2013, when the minutes from the FED’s March meeting reflected discussions regarding the efficacy of QE and exit strategy in respect of the current round of QE. AngloGold Ashanti believes the markets viewed this as proof of a reduction in risk, which would improve economic conditions and undercut the need for safe haven investments.
The gold market was then influenced by attempts to infer the timing of the tapering by scrutinising economic data releases. It appeared that economic data releases which beat consensus weighed heavily on the gold price as it steadily declined through the year. In September 2013, the FED surprised the market by not announcing any tapering of the QE, which corresponded with some short-term relief for the gold price. However the announcement in December 2013 which again surprised the market, saw gold trade sharply lower and break through the $1,200 per ounce level threatening to test the June low of $1,180 per ounce.
The average gold spot price for 2013 was $1,411 per ounce which was $257 per ounce lower than the average for 2012 and is the largest ever decline year on year. This price performance brought an end to more than a decade of rising annual gold prices.
In an otherwise poor year for the gold market, the shining light in 2013 was the consumer demand for the physical metal. Not only was there significant demand for bars and coins, but the jewellery market similarly. This demand was overwhelmingly from India and China.
This robust physical demand was despite the attempts by the Indian government to curb imports of gold into India. Prior to 2013, there were fewer impediments to importing gold into India, however, during the second half of 2013, the Indian government imposed various restrictions on gold imports which were effective in reducing of the demand from this traditional source.
These restrictions likely helped China become the largest consumer market for physical gold. According to the World Gold Council (WGC), China is also the largest global gold producer (437 tonnes in 2013) and it is estimated by the WGC that the Chinese imports of gold for 2013 amounted to between 1,000 tonnes and 1,100 tonnes.
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)(“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.
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 organizationsorganisations and private individuals.
Yearly average spot gold prices have changed during the three years under review as follows:
2011 - $1,572 per ounce
2012 - $1,668 per ounce
2013 - $1,411 per ounce
Since 2011, the company has been unhedged and thus fully exposed to the fluctuations in the gold price. In the first quarter of 2014, the average gold price was $1,292 per ounce. On 2 April 2014, the afternoon fixing price for gold on the London Bullion Market was $1,292 per ounce.
If revenueincome from gold sales falls for a substantialan extended period below the Company’s cost ofcompany’s production costs 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.
Production levels
In addition to gold prices, AngloGold Ashanti’s gold income in any year is also influenced by its level of gold production. Production levels are in turn influenced by grades, tonnages mined and processed through the plant, and metallurgical recoveries. Attributable gold production (including joint ventures) improved from 3.94 million ounces in 2012 to 4.11 million ounces in 2013. The increase in production levels is due to a variety of factors, as follows:
South Africa: 7 percent increase in production in 2013 primarily due to production from Mine Waste Solutions (“MWS”) (acquired July 2012) and fewer safety related stoppages.
Continental Africa: 4 percent decline primarily due to the mill shutdown at Geita Cripple Creek & Victor, Siguiriin Tanzania.
Australasia: 33 percent increase in production primarily due to production from Tropicana.
Americas: 5 percent increase in production from the Americas primarily due to the increase of the company’s ownership in Serra Grande to 100 percent, effective July 2012.
Grades from gold ore bodies tend to decline as they mature over time. With a view to reversing the grade decline, the company embarked on the following initiatives:
Short-term: Continued implementation of Project ONE aims to put in place optimum resources and Sadiola, which, being more dependentbusiness processes to restore stability, initially by minimising variations, and once stable, to further enhance productivity.
Medium-term: Active exploration programmes to replenish depletion in existing ore bodies by mine life extensions and new mines.
Long-term: Technology project in South Africa with a view to using reef boring.
Concurrently, AngloGold Ashanti also embarked on fuel,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 more sensitivelargely incurred in local currency where the relevant operation is located. US dollar denominated production costs and net income tend to changesbe adversely impacted by local currency strength and favourably 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 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.
136
Average annual exchange rates to the US dollar
| 2013
| 2012
| 2011
| |||||||||
South African Rand | 9.62 | 8.20 | 7.26 | |||||||||
Brazilian Real | 2.16 | 1.95 | 1.68 | |||||||||
Australian Dollar | 1.03 | 0.97 | 0.97 | |||||||||
Argentinian Peso | 5.48 | 4.55 | 4.13 | |||||||||
In 2013, the Brazilian real, the Argentinean peso and the Australian dollar. In 2010, the Companycompany derived 6662 percent (62(59 percent including joint ventures) of its revenues from these countriesSouth Africa, Brazil, Australia and Argentina, and incurred 6260 percent (58(56 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 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.
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, although 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”.
137
Production costs include salaries and wages, stores and other consumables (which include explosives, timber and other consumables), fuel, power and water, contractors’ costs and costs of environmental rehabilitation. 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 CompanyAshanti 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’scompany’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. Salaries and wages 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 31 December 2011, 2012 and 2013, 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 percentage changeprice of oil has recently been volatile, fluctuating between $97.99 and $120.09 per barrel of Brent crude in 2013. AngloGold Ashanti estimates that for each $1 per barrel rise in the rand/US dollar exchange rate, based uponoil price, other factors remaining equal, the average ratestotal cash costs of all its operations increases by about $0.75 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. 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) that exceeded 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 respectiveperiod.
Total group rehabilitation obligation (excluding joint ventures) decreased from $841 million in 2012 to $728 million in 2013. This change is attributable to changes in discount rates due to changes in global economic assumptions and changes in mine plans resulting in changes in cash flows and changes in design of tailings storage facilities and in methodology following requests from the environmental regulatory authorities.
Royalties, which are generally calculated as a percentage of revenue, varied over the past three years from $193 million incurred in 2011 to $164 million incurred in 2012 and $129 million in 2013, primarily due to the local annual inflation rate, as measured by the South African Producer Price Index (PPI), are set outvariations in the table below:
| 2010 | 2009 | 2008 | ||||||||||
| Year ended December 31 | percent | percent | percent | |||||||||
| The average South African rand/US$ 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 | ) | |||||||
Royalties are likely to continue to vary in the 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.
AcquisitionsExploration and dispositionsevaluation costs
The company has incurred exploration expenditure during the years ended 31 December 2011, 2012 and 2013 in order to replenish depleting gold reserves and bring new ore bodies into pre-feasibility or feasibility. The exploration costs incurred over the last three fiscal years amounted to $279 million in 2011, $395 million in 2012 and $255 million in 2013. Exploration expenditure was curtailed during 2013, with the company exiting thirteen locations across the globe.
Corporate administration, marketing and other expenses
In order to meet AngloGold Ashanti’s strategic objectives, management has incurred costs to build talent, capacity and expertise globally and in particular to support its Project ONE initiatives. The corporate administration, marketing and other expenses incurred over such period amounted to $278 million in 2011, $291 million in 2012 and $201 million in 2013. In addition, during 2013 the company embarked on cost optimisation review in order to reduce corporate costs.
Amortisation of tangible assets
Amortisation of tangible assets decreased during the 2011-2013 period, from $825 million to $775 million, largely due to impairment and derecognition of assets during 2013.
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. Alternatively, should any of these factors reverse then AngloGold Ashanti may have to reverse previously recognised impairments.
The impairment charges or reversals AngloGold Ashanti incurred on tangible and intangible assets amounted to a net reversal of $120 million in 2011, a charge of $346 million in 2012 and a charge of $3,029 million in 2013. See “Note 7 – Special Items”, “Note 15 – Tangible assets” and “Note 16 – Intangible assets” to the consolidated financial statements for a detailed description of impairments.
When reviewing goodwill and other tangible 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 real gold price, AngloGold Ashanti considers all available market information including current prices, historical averages, and forward pricing information and data. The long term real gold price of $1,269 per ounce in 2013 and $1,584 per ounce in 2012, were based on a range of economic and market conditions, which were, at that time, 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 $1,411 per ounce in 2013 and $1,668 per ounce in 2012. The gold price in 2014 has been subject to volatile short term swings and has averaged $1,292 per ounce in the first quarter of 2014 and closed at $1,292 per ounce on 2 April 2014.
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.
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, optimise costs and increase cash flows in respect of its mining assets.
Taxation
Taxation decreased significantly over the period 2011-2013 from an expense of $737 million in 2011 to a benefit of $333 million in 2013. The decreases in the tax charge is mainly due to lower taxable income as a result of the lower gold price as well as tax credits on impairment of assets.
Taxation is likely to continue to be volatile 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.
Business combinations
The global gold mining industry has experienced active consolidation and rationalization activitiesrationalisation 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 combinationcombinations and acquisition opportunities.
Acquisitions and dispositions are described in note 3Note 34 to the consolidated financial statements, “Acquisitions and disposals of businesses and assets”“Business combinations”. See also Note 40 to the consolidated financial statements, “Events subsequent to year end”. The consolidated financial statements reflect the operations and financial condition of AngloGold Ashanti, assuming thatgiving effect to the 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 Companycompany is subject to various economic, fiscal and monetary factors that affect South African companies generally.
Comparison of operating performance in 2010, 20092013, 2012 and 2008
The following table presents operating data for the AngloGold Ashanti group for the three year period ended 31 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 ($/oz) | 812 | 683 | 592 | |||||||||
| Production costs (million US dollars) | 2,656 | 2,229 | 2,159 | |||||||||
Capital expenditure (million US dollars)(1) | 1,015 | 1,027 | 1,239 | |||||||||
| — Consolidated entities | 973 | 1,019 | 1,232 | |||||||||
| — Equity accounted joint ventures | 42 | 8 | 7 | |||||||||
| Operating data for AngloGold Ashanti | Year ended 31 December | |||||||||||
| 2013 | 2012 | 2011 | ||||||||||
Total attributable gold production (thousand ounces) | 4,105 | 3,944 | 4,331 | |||||||||
Total attributable gold sold (thousand ounces)(1) | 4,093 | 3,953 | ||||||||||
All-in sustaining costs ($/oz)(2)(3) | 1,174 | 1,251 | ||||||||||
Total cost of sales (million US dollars) – per financial statements | 4,146 | 3,964 | 3,892 | |||||||||
Total cash costs ($/oz)(2) | 830 | 829 | 703 | |||||||||
Total production costs ($/oz)(2) | 1,054 | 1,054 | 938 | |||||||||
Total cash costs (million US dollars) – per financial statements | 3,297 | 3,135 | 2,916 | |||||||||
Capital expenditure (million US dollars) | 1,993 | 2,322 | 1,686 | |||||||||
- Consolidated entities | 1,582 | 2,019 | 1,597 | |||||||||
- Associates and equity accounted joint ventures | 411 | 303 | 89 | |||||||||
| (1) |
|
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| (2) | All-in sustaining costs, 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 all-in sustaining costs, cash costs and production costs”. |
| (3) | All-in sustaining costs has been calculated from 2012 onwards. |
Production in 2013
For the year ended 31 December 31, 2010,2013, AngloGold Ashanti’s total attributable gold production from continuing operations at 4.524.11 million ounces was 84,000160,000 ounces, or 24 percent, lowerhigher when compared to 2009the 2012 production of 4.63.94 million ounces.
InSouth Africa, gold production increased by 7 percent, or 90,000 ounces, in 2013 as compared to 2012. The increase in output was mainly due to increased production from MWS (acquired effective July 2012), non-recurring strike action in South Africa, fewer safety and associated stoppages, reduced dilution owing to decrease in stoping widths and higher grades mined at Moab Khotsong during 2013. The increase was partially offset by decreased production at Mponeng due to lower grades.
Production decreased by 4 percent, or 61,000 ounces, in 2013, as compared to 2012, inContinental Africa mainly due to the mill shutdown at Geita in 2013, lower recovered grades at Morila, Sadiola and Navachab and lower production at Obuasi due to underground mining challenges and backfill constraints. The decrease was partially offset by higher production at Iduapriem in Ghana and Siguiri in Guinea due to higher grades and production starting ahead of schedule at Kibali.
Production increased by 33 percent, or 84,000 ounces, in 2013, as compared with 2012, inAustralia mainly due to production starting ahead of schedule at Tropicana Gold Mine and higher grade ore from the Crown pillar in the base of the open pit at Sunrise Dam.
In theAmericas region, production increased by 5 percent, or 48,000 ounces in 2013, as compared with 2012. In Brazil the increase was mainly due the increase of the company’s ownership in of Serra Grande to 100 percent, effective July 2012. In Argentina at Cerro Vanguardia, the increase in production was mainly due to operational improvements giving rise to an increase in recoveries and grades. The increase was partially offset by lower production at Cripple Creek & Victor in North America due to lower recovered grades.
Production in 2012
For the year ended 31 December 2012, AngloGold Ashanti’s total attributable gold production at 3.94 million ounces was 390,000 ounces, or 9 percent, lower as compared to the 2011 production of 4.33 million ounces.
InSouth Africa, gold production decreased by 125 percent, or 412,000 ounces, in 2012 as compared to 2011. The lower output was mainly due to the unprotected strike action from 20 September 2012 to 25 October 2012 and the slow start-up thereafter as well as safety and associated stoppages during the year.
Production decreased by 3 percent, or 49,000 ounces, in 2012, as compared to 2011, 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 20102012, as compared to 2011, inAustralia as operations at Sunrise Dam recovered from flood related disruption the previous year.
In theAmericas region, production increased by 7 percent, or 62,000 ounces, in 2012, as compared to 2011. In Brazil the increase was mainly due to the increase in the company’s ownership in Serra Grande to 100 percent, effective July 2012, and the ramping up of production from the Córrego do Sítio sulphide 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.
Total all-in sustaining costs, total cash costs and total production costs
Comparison of all-in sustaining costs in 2013 with 2012
All-in sustaining costs per ounce in South Africa decreased in 2013 by $69 per ounce to $1,120 per ounce from $1,189 per ounce in 2012. The decrease was a result of an increase in gold sold in 2013 and the weakening of the rand.
In Continental Africa, all-in sustaining costs (excluding stockpile impairments) decreased by $33 per ounce, or 3 percent, to $1,202 per ounce in 2013 from $1,235 per ounce in 2012. This decrease was mainly due to a 13decrease in all-in sustaining costs adjusted for non-controlling interests of $110 million or 6 percent declinefrom $1,886 million in volumes mined and2012 to $1,776 million in 2013. This decrease was partially offset by a 9 percent decline65,000 ounce decrease in recovered grade at Kopanang andgold sold from 1,527,000 ounces in 2012 to 1,462,000 ounces in 2013.
In the sale of Tau Lekoa effective August 1, 2010.
In Australia, all-in sustaining costs decreased by $304 per ounce, or 18 percent, to above$1,376 per ounce in 2013 from $1,680 per ounce in 2012, mainly due to an increase in gold sold which was partially offset by an increase in costs. The increase in gold sold and costs are due to Tropicana Gold Mine starting production ahead of schedule.
Comparison of total cash costs in 2013 with 2012
The currencies of South Africa, Australia, Argentina and Brazil were, on average, weaker against the US dollar during 2013 as compared to 2012 which positively impacted total cash costs for 2013.
Total cash costs per ounce in South Africa, at Kopanang, 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 2009Great Noligwa, Tau Tona and the treatment of higher tonnes and higher grade material in 2010 at Geita (Continental Africa).
In Continental Africa, total cash costs increased by $39 per ounce, or 5 percent, to lower reef values and increased dilution.$869 per ounce in 2013 from $830 per ounce in 2012. The decrease over 2008 was also caused by lower production at Savuka due to a seismic incident in May 2009 that damaged the sub-shaft infrastructure.
Total cash costs at Geita, in gold producedTanzania, increased by 21 percent from $427 per ounce in 2012 to $515 per ounce in 2013. This was mainly as a result of decreased production and an increase in labour, consumables and contract labour costs.
In Mali, at most minesMorila, total cash costs increased by 1 percent in 2013 to $773 per ounce compared to $767 per ounce in 2012, mainly due to lower production which was partially offset by a decrease in inventory adjustments. At Sadiola, total cash costs increased by 14 percent from $1,169 per ounce in 2012 to $1,334 per ounce in 2013. This increase was primarily due to lower production. Total cash costs at Yatela decreased by 13 percent from $1,758 per ounce in 2012 to $1,530 per ounce in 2013 mainly due to a decrease in contract labour which was partially offset by lower production.
In Ghana, at Obuasi, total cash costs increased by 18 percent in 2013 to $1,406 per ounce compared to $1,187 per ounce in 2012 mainly due to the decline in production. At Iduapriem, in Ghana, total cash costs decreased by 10 percent to $861 per ounce in 2013 compared to $955 per ounce in 2012 mainly due to increased production which was partially offset by an increase in goldcontract labour costs. At Siguiri, in Guinea, total cash costs decreased by 2 percent to $918 per ounce in 2013 from $938 per ounce in 2012 mainly due to an increase in production which was partially offset by an increase in ore stockpile adjustments and increased costs related to labour.
In the DRC, at Moab Khotsong (South Africa),Kibali, total cash costs were $471 per ounce in 2013. Kibali began commercial production in October 2013.
In the surface operations (which mainly treat materialAmericas, total cash costs increased marginally to $671 per ounce in 2013 from the Great Noligwa waste rock dump$669 per ounce 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. This2012. The increase 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 Dumpan increase in the current year, which resulted in grades exceeding that of 2008 at the surface operations and higher recovered grades arising from improvements in the plant efficiency at Cerro Vanguardia.
In the United States, at Cripple Creek, total cash costs and total production costs in 2010 with 2009
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In Australia, total cash costs decreased by $164 per ounce, or 1714 percent, whento $1,047 per ounce in 2013 from $1,211 per ounce in 2012.
In Australia, at Sunrise Dam, total cash costs decreased in 2013 to $1,110 per ounce compared to $1,126 per ounce in 2012, mainly due to an increase in production and the previous year.weakening of the Australian Dollar. The decrease was partially offset by an increase in service related costs due to a reduction in recovery from settled insurance claims as compared with 2012 during which there was a reimbursement of costs relating to the pitwall failure at Sunrise Dam (Australia) in the amount of $30 million. At Tropicana Gold Mine total cash costs were $568 per ounce in 2013. Tropicana began commercial production in October 2013.
Overall the company’s total cash costs in 2013 increased marginally to $830 per ounce compared to $829 per ounce in 2012. Of this increase,these increased costs, inflation accounted for $46$51 per ounce and local currency strengthunfavourable inventory movements accounted for $45$10 per ounce.
Comparison of all-in sustaining costs in 2012 with 2011
No comparison of all-in sustaining costs in 2012 with 2011 is presented as all-in sustaining costs have been calculated from 2012 onwards.
Comparison of total cash costs and total production costs in 20092012 with 20082011
The local currencies (Southof South Africa, AustraliaArgentina and Brazil)Brazil were, on average, weaker against the US dollar during 20092012 compared to 2008, the trend in local currencies from early to the middle of the year started to strengthen as the US dollar was still2011 which positively 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.
Total cash costs at most of the operations situatedper ounce in South Africa increased by $179 per ounce, or 26 percent, to $873 per ounce in 2009 when compared to 2008. This was2012 from $694 per ounce in 2011, largely a result of lower production due to the reduced volumes mined, declining recovered grades, increased power tariffs, wage increasesunprotected strike action during September and input cost inflation.
In Continental Africa, total cash costs of 42increased by $132 per ounce, or 19 percent, from $617to $830 per ounce in 2008 to $3592012 from $698 per ounce in 2009,2011. The increase was mainly due to increased fuel prices, labour costs, contract labour costs, inventory adjustments and service related costs.
Total cash costs at Geita, in Tanzania, increased by 22 percent from $350 per ounce in 2011 to $427 per ounce in 2012. This was mainly as a result of an increase in volumesconsumables and grade, the decrease cost of mining supplies, as well as ancontract labour costs. This increase in by-product sales and ore stockpile movements.
In Mali, at Morila, total cash costs of $631decreased in 2012 by 5 percent to $767 per ounce for 2009 compared to $559$810 per ounce for 2008, a 13 percent increasein 2011, 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 inventory on hand allocations which was partially offset by lower production.
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In Ghana, at Obuasi, total costs including that of power, labor, fuel, taxes and maintenance services in 2009.
In the Americas, total cash costs from $814increased by $145 per ounce, or 28 percent, to $669 per ounce in 2008 to $9852012 from $524 per ounce in 2009.2011. This was mainly due to a 66 percentincreased commodity prices, labour costs and service related costs partially offset by an increase in reagentproduction.
In the United States, total cash 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,at Cripple Creek reported a $61 per ounce increaseincreased by 13 percent to $371$638 per ounce in 20092012 from $564 per ounce in 2011 due primarily to rising commodity prices (diesel fuel, in particular), increased labour costs and a decline in production. In Brazil at AngloGold Ashanti Córrego do Sítio Mineração, total cash costs increased by 32 percent to $696 per ounce in 2012 from $529 per ounce in 2011 driven largely by higher labour and operational development costs partially offset by higher production. At Serra Grande total cash costs increased by $53 per ounce to $821 per ounce in 2012 due to an increase in an increase in inventory on hand allocations and other service related costs which was partially offset by an increase in production of 31,000 ounces.
In Australia, total cash costs decreased in 2012 by 15 percent to $1,211 per ounce compared to $1,431 per ounce in 2011, mainly due to reduceda 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 resulting from poor alkalinity at depth impactingsettled insurance claims for the pH levels.
Overall the company’s total cash costs for 2009in 2012 increased by $69$126 per ounce, or 1518 percent, when compared to the primary causes being $8previous year. Of these increased costs, inflation accounted for $62 per ounce due to inflation, $22and lower production accounted for $101 per ounce. The weakening of local currencies accounted for $42 per ounce, partially offsetting the increase.
Reconciliation of all-in sustaining costs to lower grades, $17cost of sales per ouncethe financial statements
During June 2013 the World Gold Council (WGC), an industry body, published a Guidance Note on “all-in sustaining costs” and “all-in costs” metrics, which gold mining companies can use to lower volumessupplement their overall non-GAAP disclosure. The WGC worked closely with its members (including AngloGold Ashanti) to develop these non-GAAP measures which are intended to provide further transparency into the full cost associated with producing gold. It is expected that these new metrics, in particular the “all-in sustaining cost” metric which AngloGold Ashanti provides in the report, will be helpful to investors, governments, local communities 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 GAAPnon-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, depletionamortisation of tangible and amortization,intangible assets, rehabilitation costs employment severanceand other non-cash costs, retrenchment costs, corporate administration, marketing and other 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,amortisation, depreciation and rehabilitation costs.
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Total cash costs and total production costs should not be considered by investors in isolation or as alternatives to production costs, net income/profit/(loss) applicable to common stockholders, income/equity shareholders, profit/(loss) before income tax provision, nettaxation, cash provided byflows from operating activities or any other measure of financial performance presented in accordance with US GAAPIFRS 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;
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 productionboth cost of sales and total cash costs as included in the company’s audited financial statements to all-in sustaining costs, total cash costs and to total production costs for each of the three years in the period ended 31 December 31, 20102013 is presented below. In addition, the Companycompany has also provided below detail of the attributable ounces of gold produced by mine for each of those periods.
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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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| 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 | |||||||||||||||||||||||||||||||||||||||
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All-in sustaining costs | ||||||||||||||||||||||||||||||||||||||||
Cost of sales per financial statements | 103 | 215 | 240 | 347 | - | 262 | 226 | - | 1,393 | 1 | ||||||||||||||||||||||||||||||
Amortisation of tangible and intangible assets | (8 | ) | (43 | ) | (60 | ) | (82 | ) | - | (51 | ) | (9 | ) | (253 | ) | (9 | ) | |||||||||||||||||||||||
Adjusted for decomissioning amortisation | (1 | ) | 1 | 1 | - | - | - | - | - | 1 | (1 | ) | ||||||||||||||||||||||||||||
Inventory writedown to net realisable value | - | - | - | - | - | - | - | 1 | 1 | - | ||||||||||||||||||||||||||||||
Corporate administration and marketing related to current operations | - | - | - | - | - | - | - | 5 | 5 | 168 | ||||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of costs(2) | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Sustaining exploration and study costs | - | - | - | - | - | - | - | - | - | (1 | ) | |||||||||||||||||||||||||||||
Total sustaining capital expenditure | 14 | 50 | 78 | 95 | - | 59 | 16 | - | 312 | 9 | ||||||||||||||||||||||||||||||
All-in sustaining costs | 108 | 223 | 259 | 360 | - | 270 | 233 | 6 | 1,459 | 167 | ||||||||||||||||||||||||||||||
Adjusted for non-controlling interests(1) | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests | 108 | 223 | 259 | 360 | - | 270 | 233 | 6 | 1,459 | 167 | ||||||||||||||||||||||||||||||
Gold sold - oz (000)(3) | 83 | 178 | 212 | 354 | - | 235 | 240 | - | 1,302 | |||||||||||||||||||||||||||||||
All-in sustaining cost (excluding stockpile impairments) per unit- $/oz(4) | 1,305 | 1,255 | 1,223 | 1,016 | - | 1,149 | 969 | - | 1,120 | |||||||||||||||||||||||||||||||
Total cash costs | ||||||||||||||||||||||||||||||||||||||||
Total cash costs per financial statements | 91 | 163 | 169 | 255 | - | 216 | 213 | - | 1,107 | (7 | ) | |||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | - | - | - | - | - | - | 6 | ||||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of total cash costs(2) | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | 91 | 163 | 169 | 255 | - | 216 | 213 | - | 1,107 | (1 | ) | |||||||||||||||||||||||||||||
Retrenchment costs | 3 | 5 | 6 | 7 | - | 6 | - | - | 27 | - | ||||||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | 1 | 4 | 6 | 3 | - | (10 | ) | 3 | - | 7 | 1 | |||||||||||||||||||||||||||||
Amortisation of tangible assets | 7 | 41 | 57 | 77 | - | 47 | 8 | - | 237 | 5 | ||||||||||||||||||||||||||||||
Amortisation of intangible assets | 1 | 3 | 3 | 5 | - | 3 | - | - | 15 | 2 | ||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | - | - | - | - | - | - | (4 | ) | |||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of production costs(2) | - | - | - | - | - | - | - | - | - | 1 | ||||||||||||||||||||||||||||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 103 | 216 | 241 | 347 | - | 262 | 224 | - | 1,393 | 4 | ||||||||||||||||||||||||||||||
Gold produced – oz (000)(3) | 83 | 178 | 212 | 354 | - | 235 | 240 | - | 1,302 | - | ||||||||||||||||||||||||||||||
Total cash costs per unit – $/oz(4) | 1,100 | 918 | 797 | 719 | - | 920 | 883 | - | 850 | - | ||||||||||||||||||||||||||||||
Total production costs per unit – $/oz(4) | 1,252 | 1,210 | 1,138 | 978 | - | 1,117 | 933 | - | 1,070 | - | ||||||||||||||||||||||||||||||
Adjusting for non-controlling interest of items included in calculation, to disclose the attributable portions only. | ||||
Attributable |
| (3) | Attributable portion. |
| (4) | In addition to the operational performances of the mines, all-in sustaining cost per ounce, total cash costs per ounce and total production costs per ounce are affected by fluctuations in the currency exchange rate. AngloGold Ashanti reports all-in sustaining cost per ounce calculated to the nearest US dollar amount and gold sold in ounces. 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. |
| (5) | Corporate includes non-gold producing subsidiaries. |
| (6) | Total cash costs per ounce calculation includes heap-leach inventory change. |
| (7) | As from 1 January 2013, Tau Tona and Savuka were mined as one operation. |
For the year ended 31 December 2013
Operations in DRC, Ghana, Guinea, Mali, Namibia and Tanzania
(in $ millions, except as otherwise noted)
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All-in sustaining costs | ||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per financial statements | - | 226 | 425 | 324 | - | - | - | 49 | 346 | 23 | 1,393 | |||||||||||||||||||||||||||||||||
Amortisation of tangible and intangible assets | - | (30 | ) | (50 | ) | (27 | ) | - | - | - | (6 | ) | (120 | ) | (6 | ) | (239 | ) | ||||||||||||||||||||||||||
Adjusted for decomissioning amortisation | - | 1 | 1 | 3 | - | - | - | - | 1 | - | 6 | |||||||||||||||||||||||||||||||||
Inventory writedown to net realisable value | - | 83 | 4 | - | - | - | - | 24 | 66 | - | 177 | |||||||||||||||||||||||||||||||||
Abandonment of stockpiles | - | - | - | - | - | - | - | - | 23 | - | 23 | |||||||||||||||||||||||||||||||||
Corporate administration and marketing related to current operations | - | - | 1 | - | - | - | - | - | - | 2 | 3 | |||||||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of costs(2) | 21 | - | - | - | 47 | 134 | 46 | - | - | - | 248 | |||||||||||||||||||||||||||||||||
Sustaining exploration and study costs | - | 1 | 6 | 18 | - | 2 | - | 1 | 11 | - | 39 | |||||||||||||||||||||||||||||||||
Total sustaining capital expenditure | - | 22 | 154 | 27 | 13 | 11 | - | 5 | 146 | 1 | 379 | |||||||||||||||||||||||||||||||||
All-in sustaining costs | 21 | 303 | 541 | 345 | 60 | 147 | 46 | 73 | 473 | 20 | 2,029 | |||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests(1) | - | - | - | (52 | ) | - | - | - | - | - | (1 | ) | (53 | ) | ||||||||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests | 21 | 303 | 541 | 293 | 60 | 147 | 46 | 73 | 473 | 19 | 1,976 | |||||||||||||||||||||||||||||||||
Gold sold - oz (000)(3) | 40 | 215 | 242 | 272 | 57 | 86 | 28 | 63 | 461 | - | 1,462 | |||||||||||||||||||||||||||||||||
All-in sustaining cost (excluding stockpile impairments) per unit- $/oz(4) | 9,065 | 1,025 | 2,214 | 1,085 | 1,051 | 1,510 | 1,653 | 781 | 833 | - | 1,202 | |||||||||||||||||||||||||||||||||
Total cash costs | ||||||||||||||||||||||||||||||||||||||||||||
Total cash costs per financial statements | - | 190 | 336 | 290 | - | - | - | 44 | 237 | (3 | ) | 1,094 | ||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | (43 | ) | - | - | - | - | - | - | (43 | ) | |||||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of total cash costs(2) | 19 | - | - | - | 44 | 114 | 42 | - | - | - | 219 | |||||||||||||||||||||||||||||||||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | 19 | 190 | 336 | 247 | 44 | 114 | 42 | 44 | 237 | (3 | ) | 1,270 | ||||||||||||||||||||||||||||||||
Retrenchment costs | - | 5 | 30 | - | - | - | - | - | - | 3 | 38 | |||||||||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | - | 7 | 4 | 4 | - | - | - | (1 | ) | - | 7 | 21 | ||||||||||||||||||||||||||||||||
Amortisation of tangible assets | - | 30 | 50 | 27 | - | - | - | 6 | 105 | 18 | 236 | |||||||||||||||||||||||||||||||||
Amortisation of intangible assets | - | - | - | - | - | - | - | - | - | 4 | 4 | |||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | (5 | ) | - | - | - | - | - | - | (5 | ) | |||||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of production costs(2) | 9 | - | - | - | 4 | 5 | 4 | - | - | - | 22 | |||||||||||||||||||||||||||||||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 28 | 231 | 420 | 273 | 48 | 119 | 46 | 49 | 342 | 29 | 1,586 | |||||||||||||||||||||||||||||||||
Gold produced - oz (000)(3) | 40 | 221 | 239 | 268 | 57 | 86 | 27 | 63 | 459 | - | 1,460 | |||||||||||||||||||||||||||||||||
Total cash costs per unit – $/oz(4) | 471 | 861 | 1,406 | 918 | 773 | 1,334 | 1,530 | 691 | 515 | - | 869 | |||||||||||||||||||||||||||||||||
Total production costs per unit – $/oz(4) | 701 | 1,047 | 1,758 | 1,018 | 838 | 1,389 | 1,702 | 771 | 778 | - | 1,086 | |||||||||||||||||||||||||||||||||
For the year ended 31 December 2013
Operations in Australia, United States of America, Argentina and Brazil
(in $ millions, except as otherwise noted)
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All-in sustaining costs | ||||||||||||||||||||||||||||||||||||||||
Cost of sales per financial statements | 366 | 64 | 19 | 449 | 201 | 199 | 374 | 133 | 3 | 910 | ||||||||||||||||||||||||||||||
Amortisation of tangible and intangible assets | (67 | ) | (27 | ) | (3 | ) | (97 | ) | (21 | ) | (35 | ) | (103 | ) | (41 | ) | (1 | ) | (201 | ) | ||||||||||||||||||||
Adjusted for decomissioning amortisation | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Inventory writedown to net realisable value | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Corporate administration and marketing related to current operations | - | - | 1 | 1 | 15 | - | 6 | - | 1 | 22 | ||||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of costs(2) | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Sustaining exploration and study costs | 12 | 3 | 8 | 23 | 4 | 7 | 14 | 8 | - | 33 | ||||||||||||||||||||||||||||||
Total sustaining capital expenditure | 39 | 25 | 5 | 69 | 15 | 61 | 118 | 36 | - | 230 | ||||||||||||||||||||||||||||||
All-in sustaining costs | 350 | 65 | 30 | 445 | 214 | 232 | 409 | 136 | 3 | 994 | ||||||||||||||||||||||||||||||
Adjusted for non-controlling interests(1) | - | - | - | - | - | (18 | ) | - | - | - | (18 | ) | ||||||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests | 350 | 65 | 30 | 445 | 214 | 214 | 409 | 136 | 3 | 976 | ||||||||||||||||||||||||||||||
Gold sold - oz (000)(3) | 265 | 58 | - | 323 | 231 | 236 | 399 | 141 | - | 1,007 | ||||||||||||||||||||||||||||||
All-in sustaining cost (excluding stockpile impairments) per unit - $/oz(4) | 1,321 | 1,113 | - | 1,376 | 927 | 912 | 1,023 | 970 | - | 970 | ||||||||||||||||||||||||||||||
Total cash costs | ||||||||||||||||||||||||||||||||||||||||
Total cash costs per financial statements | 306 | 38 | 14 | 358 | 230 | 162 | 253 | 99 | 1 | 745 | ||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | - | (61 | ) | (12 | ) | - | - | - | (73 | ) | |||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of total cash costs(2) | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | 306 | 38 | 14 | 358 | 169 | 150 | 253 | 99 | 1 | 672 | ||||||||||||||||||||||||||||||
Retrenchment costs | - | - | 1 | 1 | - | 1 | 2 | - | - | 3 | ||||||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | (4 | ) | 2 | 1 | (1 | ) | (15 | ) | 1 | 7 | (4 | ) | 1 | (10 | ) | |||||||||||||||||||||||||
Amortisation of tangible assets | 67 | 27 | 4 | 98 | 21 | 35 | 101 | 40 | 1 | 198 | ||||||||||||||||||||||||||||||
Amortisation of intangible assets | - | - | - | - | - | - | 2 | - | 1 | 3 | ||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | - | 25 | (3 | ) | - | - | - | 22 | |||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of production costs(2) | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 369 | 67 | 20 | 456 | 199 | 185 | 364 | 136 | 4 | 888 | ||||||||||||||||||||||||||||||
Gold produced – oz (000)(3) | 276 | 66 | - | 342 | 231 | 241 | 391 | 138 | - | 1,001 | ||||||||||||||||||||||||||||||
Total cash costs per unit – $/oz(4) | 1,110 | 568 | - | 1,047 | 732 | (6) | 622 | 646 | 719 | - | 671 | |||||||||||||||||||||||||||||
Total production costs per unit – $/oz(4) | 1,341 | 1,018 | - | 1,333 | 864 | 767 | 931 | 991 | - | 886 | ||||||||||||||||||||||||||||||
For the year ended 31 December 2013
AngloGold Ashanti operations – Total
(in $ millions, except as otherwise noted)
Year ended December 2013 | ||||
| US Dollar million | ||||
All-in sustaining costs | ||||
Cost of sales per financial statements (refer Item 18 – Financial Statements, Note 4) | 4,146 | |||
Amortisation of tangible and intangible assets | (799 | ) | ||
Adjusted for decomissioning amortisation | 6 | |||
Inventory writedown to net realisable value | 201 | |||
Corporate administration and marketing related to current operations | 199 | |||
Associates and equity accounted joint ventures’ share of costs | 248 | |||
Sustaining exploration and study costs | 94 | |||
Total sustaining capital expenditure | 999 | |||
All-in sustaining costs | 5,094 | |||
Adjusted for non-controlling interests | (71 | ) | ||
All-in sustaining costs adjusted for non-controlling interests | 5,023 | |||
Gold sold - oz (000) | 4,093 | |||
All-in sustaining cost (excluding stockpile impairments) per unit — $/oz | 1,174 | |||
Total cash costs | ||||
Total cash costs per financial statements (refer Item 18 – Financial Statements, Note 4) | 3,297 | |||
Adjusted for non-controlling interests and non-gold producing companies | (110 | ) | ||
Associates and equity accounted joint ventures’ share of total cash costs | 219 | |||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | 3,406 | |||
Retrenchment costs | 69 | |||
Rehabilitation and other non-cash costs | 18 | |||
Amortisation of tangible assets | 775 | |||
Amortisation of intangible assets | 24 | |||
Adjusted for non-controlling interests and non-gold producing companies | 13 | |||
Associates and equity accounted joint ventures’ share of production costs | 23 | |||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 4,329 | |||
Gold produced – oz (000) | 4,105 | |||
Total cash cost per unit - $/oz | 830 | |||
Total production cost per unit - $/oz | 1,054 | |||
For the year ended 31 December 2012
Operations in South Africa
(in $ millions, except as otherwise noted)
 |  |  |  |  |  |
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All-in sustaining costs | ||||||||||||||||||||||||||||||||||||||||
Cost of sales per financial statements | 123 | 208 | 246 | 330 | 50 | 238 | 131 | - | 1,326 | (41 | ) | |||||||||||||||||||||||||||||
Amortisation of tangible and intangible assets | (21 | ) | (41 | ) | (89 | ) | (68 | ) | (11 | ) | (61 | ) | (11 | ) | - | (302 | ) | (8 | ) | |||||||||||||||||||||
Adjusted for decomissioning amortisation | - | - | - | - | - | - | - | 1 | 1 | - | ||||||||||||||||||||||||||||||
Inventory writedown to net realisable value | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Corporate administration and marketing related to current operations | - | - | - | - | - | - | - | 9 | 9 | 240 | ||||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of costs(2) | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Sustaining exploration and study costs | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Total sustaining capital expenditure | 26 | 79 | 107 | 96 | 20 | 71 | 11 | - | 410 | 34 | ||||||||||||||||||||||||||||||
All-in sustaining costs | 128 | 246 | 264 | 358 | 59 | 248 | 131 | 10 | 1,444 | 225 | ||||||||||||||||||||||||||||||
Adjusted for non-controlling interests(1) | - | - | - | - | - | - | - | - | - | (1 | ) | |||||||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests | 128 | 246 | 264 | 358 | 59 | 248 | 131 | 10 | 1,444 | 224 | ||||||||||||||||||||||||||||||
Gold sold - oz (000)(3) | 84 | 164 | 162 | 405 | 37 | 189 | 174 | - | 1,214 | - | ||||||||||||||||||||||||||||||
All-in sustaining cost (excluding stockpile impairments) per unit - $/oz(4) | 1,530 | 1,497 | 1,634 | 883 | 1,607 | 1,316 | 754 | - | 1,189 | - | ||||||||||||||||||||||||||||||
Total cash costs | ||||||||||||||||||||||||||||||||||||||||
Total cash costs per financial statements | 103 | 167 | 168 | 259 | 38 | 175 | 149 | - | 1,059 | (50 | ) | |||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | - | - | - | - | - | - | 50 | ||||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of total cash costs(2) | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | 103 | 167 | 168 | 259 | 38 | 175 | 149 | - | 1,059 | - | ||||||||||||||||||||||||||||||
Retrenchment costs | 1 | 2 | 1 | 1 | - | 1 | - | - | 6 | 1 | ||||||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | (1 | ) | (1 | ) | (12 | ) | 2 | - | 2 | (29 | ) | - | (39 | ) | 3 | |||||||||||||||||||||||||
Amortisation of tangible assets | 21 | 41 | 89 | 68 | 11 | 61 | 11 | - | 302 | 12 | ||||||||||||||||||||||||||||||
Amortisation of intangible assets | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | - | - | - | - | - | - | (6 | ) | |||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of production costs(2) | - | - | - | - | - | - | - | - | - | (1 | ) | |||||||||||||||||||||||||||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 124 | 209 | 246 | 330 | 49 | 239 | 131 | - | 1,328 | 9 | ||||||||||||||||||||||||||||||
Gold produced – oz (000)(3) | 84 | 164 | 162 | 405 | 37 | 189 | 172 | - | 1,212 | - | ||||||||||||||||||||||||||||||
Total cash costs per unit – $/oz(4) | 1,226 | 1,015 | 1,040 | 639 | 1,041 | 924 | 943 | - | 873 | - | ||||||||||||||||||||||||||||||
Total production costs per unit – $/oz(4) | 1,475 | 1,267 | 1,522 | 816 | 1,352 | 1,262 | 1,277 | - | 1,095 | - | ||||||||||||||||||||||||||||||
| (1) | Adjusting for |
| (2) | Attributable costs and related expenses of associates and equity accounted joint ventures are included in the calculation of total cash costs per ounce and total production costs per ounce. |
| (3) | Attributable portion. |
| (4) | In addition to the operational performances of the mines, all-in sustaining cost per ounce, total cash costs per ounce and total production costs per ounce are affected by fluctuations in the currency exchange rate. AngloGold Ashanti all-in sustaining cost per ounce reports calculated to the nearest US dollar amount and gold sold in ounces. 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. |
| (5) | Corporate includes non-gold producing subsidiaries. |
| (6) | Total cash costs per ounce calculation includes heap-leach inventory change. |
For the year ended 31 December 2012
Operations in DRC, Ghana, Guinea, Mali, Namibia and Tanzania
(in $ millions, except as otherwise noted)
 |  |
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All-in sustaining costs | ||||||||||||||||||||||||||||||||||||||||
Cost of sales per financial statements | 207 | 446 | 292 | - | - | - | 93 | 366 | 7 | 1,411 | ||||||||||||||||||||||||||||||
Amortisation of tangible and intangible assets | (24 | ) | (71 | ) | (24 | ) | - | - | - | (15 | ) | (134 | ) | (8 | ) | (276 | ) | |||||||||||||||||||||||
Adjusted for decomissioning amortisation | 1 | 1 | 2 | - | - | - | - | 1 | 1 | 6 | ||||||||||||||||||||||||||||||
Inventory writedown to net realisable value | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
Corporate administration and marketing related to current operations | - | - | 1 | - | - | - | - | - | 10 | 11 | ||||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of costs(2) | - | - | - | 61 | 118 | 51 | - | - | - | 230 | ||||||||||||||||||||||||||||||
Sustaining exploration and study costs | 4 | 12 | 13 | - | 3 | 2 | 5 | 16 | - | 55 | ||||||||||||||||||||||||||||||
Total sustaining capital expenditure | 75 | 181 | 19 | 1 | 6 | 1 | 15 | 195 | 2 | 495 | ||||||||||||||||||||||||||||||
All-in sustaining costs | 263 | 569 | 303 | 62 | 127 | 54 | 98 | 444 | 12 | 1,932 | ||||||||||||||||||||||||||||||
Adjusted for non-controlling interests(1) | - | - | (45 | ) | - | - | - | - | - | (1 | ) | (46 | ) | |||||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests | 263 | 569 | 258 | 62 | 127 | 54 | 98 | 444 | 11 | 1,886 | ||||||||||||||||||||||||||||||
Gold sold - oz (000)(3) | 183 | 281 | 233 | 81 | 101 | 28 | 73 | 546 | - | 1,527 | ||||||||||||||||||||||||||||||
All-in sustaining cost (excluding stockpile impairments) per unit - $/oz(4) | 1,437 | 2,021 | 1,105 | 765 | 1,249 | 1,888 | 1,329 | 816 | - | 1,235 | ||||||||||||||||||||||||||||||
Total cash costs | ||||||||||||||||||||||||||||||||||||||||
Total cash costs per financial statements | 172 | 332 | 272 | - | - | - | 76 | 227 | (7 | ) | 1,072 | |||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | (41 | ) | - | - | - | - | - | - | (41 | ) | ||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of total cash costs(2) | - | - | - | 62 | 117 | 51 | - | - | - | 230 | ||||||||||||||||||||||||||||||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | 172 | 332 | 231 | 62 | 117 | 51 | 76 | 227 | (7 | ) | 1,261 | |||||||||||||||||||||||||||||
Retrenchment costs | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | 8 | 41 | 12 | - | - | - | 2 | 7 | - | 70 | ||||||||||||||||||||||||||||||
Amortisation of tangible assets | 24 | 71 | 24 | - | - | - | 15 | 90 | 44 | 268 | ||||||||||||||||||||||||||||||
Amortisation of intangible assets | - | - | - | - | - | - | - | - | 4 | 4 | ||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | (5 | ) | - | - | - | - | - | - | (5 | ) | ||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of production costs(2) | - | �� | - | - | 3 | 2 | 3 | - | - | - | 8 | |||||||||||||||||||||||||||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 204 | 444 | 262 | 65 | 119 | 54 | 93 | 324 | 41 | 1,606 | ||||||||||||||||||||||||||||||
Gold produced - oz (000)(3) | 180 | 280 | 247 | 81 | 100 | 29 | 74 | 531 | - | 1,521 | ||||||||||||||||||||||||||||||
Total cash costs per unit - $/oz(4) | 955 | 1,187 | 938 | 767 | 1,169 | 1,758 | 1,036 | 427 | - | 830 | ||||||||||||||||||||||||||||||
Total production costs per unit - $/oz(4) | 1,134 | 1,590 | 1,065 | 798 | 1,185 | 1,874 | 1,262 | 694 | - | 1,060 | ||||||||||||||||||||||||||||||
For the year ended 31 December 2012
Operations in Australia, United States of America, Argentina and Brazil
(in $ millions, except as otherwise noted)
 | |
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 |  |  |  |  |  | |||||||||||||||||||||||||||||||
All-in sustaining costs | ||||||||||||||||||||||||||||||||||||
Cost of sales per financial statements | 324 | 24 | 348 | 201 | 183 | 401 | 133 | 2 | 920 | |||||||||||||||||||||||||||
Amortisation of tangible and intangible assets | (34 | ) | (2 | ) | (36 | ) | (41 | ) | (35 | ) | (113 | ) | (24 | ) | - | (213 | ) | |||||||||||||||||||
Adjusted for decomissioning amortisation | - | - | - | - | 1 | (1 | ) | - | - | - | ||||||||||||||||||||||||||
Inventory writedown to net realisable value | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Corporate administration and marketing related to current operations | - | 1 | 1 | 18 | - | 11 | - | 1 | 30 | |||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of costs(2) | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Sustaining exploration and study costs | 37 | 26 | 63 | 4 | 6 | 20 | 4 | - | 34 | |||||||||||||||||||||||||||
Total sustaining capital expenditure | 49 | 5 | 54 | 20 | 77 | 107 | 36 | 2 | 242 | |||||||||||||||||||||||||||
All-in sustaining costs | 376 | 54 | 430 | 202 | 232 | 425 | 149 | 5 | 1,013 | |||||||||||||||||||||||||||
Adjusted for non-controlling interests(1) | - | - | - | - | (17 | ) | - | (35 | ) | - | (52 | ) | ||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests | 376 | 54 | 430 | 202 | 215 | 425 | 114 | 5 | 961 | |||||||||||||||||||||||||||
Gold sold - oz (000)(3) | 257 | - | 257 | 247 | 229 | 382 | 97 | - | 955 | |||||||||||||||||||||||||||
All-in sustaining cost (excluding stockpile impairments) per unit - $/oz(4) | 1,470 | - | 1,680 | 817 | 935 | 1,114 | 1,168 | - | 1,006 | |||||||||||||||||||||||||||
Total cash costs | ||||||||||||||||||||||||||||||||||||
Total cash costs per financial statements | 290 | 22 | 312 | 225 | 136 | 270 | 108 | 3 | 742 | |||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | (67 | ) | (10 | ) | - | (27 | ) | - | (104 | ) | |||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of total cash costs(2) | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | 290 | 22 | 312 | 158 | 126 | 270 | 81 | 3 | 638 | |||||||||||||||||||||||||||
Retrenchment costs | - | - | - | - | 1 | 2 | - | - | 3 | |||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | 2 | - | 2 | 9 | 7 | 17 | (4 | ) | 2 | 31 | ||||||||||||||||||||||||||
Amortisation of tangible assets | 34 | 2 | 36 | 41 | 35 | 112 | 24 | - | 212 | |||||||||||||||||||||||||||
Amortisation of intangible assets | - | - | - | - | - | 1 | - | - | 1 | |||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | (9 | ) | (3 | ) | - | (8 | ) | - | (20 | ) | |||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of production costs(2) | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 326 | 24 | 350 | 199 | 166 | 402 | 93 | 5 | 865 | |||||||||||||||||||||||||||
Gold produced – oz (000)(3) | 258 | - | 258 | 247 | 219 | 388 | 98 | - | 953 | |||||||||||||||||||||||||||
Total cash costs per unit – $/oz(4) | 1,126 | - | 1,211 | 638 | (6) | 576 | 696 | 821 | - | 669 | ||||||||||||||||||||||||||
Total production costs per unit – $/oz(4) | 1,264 | - | 1,358 | 804 | 759 | 1,037 | 958 | - | 907 | |||||||||||||||||||||||||||
For the year ended 31 December 2012
AngloGold Ashanti operations – Total
(in $ millions, except as otherwise noted)
Year ended December 2012 | ||||
| US Dollar million | ||||
All-in sustaining costs | ||||
Cost of sales per financial statements (refer Item 18 – Financial Statements, Note 4) | 3,964 | |||
Amortisation of tangible and intangible assets | (835 | ) | ||
Adjusted for decomissioning amortisation | 7 | |||
Inventory writedown to net realisable value | - | |||
Corporate administration and marketing related to current operations | 290 | |||
Associates and equity accounted joint ventures’ share of costs | 229 | |||
Sustaining exploration and study costs | 152 | |||
Total sustaining capital expenditure | 1,236 | |||
All-in sustaining costs | 5,043 | |||
Adjusted for non-controlling interests | (99 | ) | ||
All-in sustaining costs adjusted for non-controlling interests | 4,944 | |||
Gold sold - oz (000) | 3,953 | |||
All-in sustaining cost (excluding stockpile impairments) per unit - $/oz | 1,251 | |||
Total cash costs | ||||
Total cash costs per financial statements (refer Item 18 – Financial Statements, Note 4) | 3,135 | |||
Adjusted for non-controlling interests and non-gold producing companies | (95 | ) | ||
Associates and equity accounted joint ventures’ share of total cash costs | 230 | |||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | 3,270 | |||
Retrenchment costs | 10 | |||
Rehabilitation and other non-cash costs | 67 | |||
Amortisation of tangible assets | 830 | |||
Amortisation of intangible assets | 5 | |||
Adjusted for non-controlling interests and non-gold producing companies | (31 | ) | ||
Associates and equity accounted joint ventures’ share of production costs | 7 | |||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 4,158 | |||
Gold produced – oz (000) | 3,944 | |||
Total cash cost per unit - $/oz | 829 | |||
Total production cost per unit - $/oz | 1,054 | |||
For the year ended 31 December 2011
Operations in South Africa
(in $ millions, except as otherwise noted)
| | | | | |  | |
| | |||||||||||||||||||||||||||||||
Total cash costs | ||||||||||||||||||||||||||||||||||||||||
Total cash costs per financial statements | 112 | 209 | 183 | 273 | 42 | 200 | 108 | - | 1,127 | (38 | ) | |||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | - | - | - | - | - | - | 39 | ||||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of total cash costs(2) | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | 112 | 209 | 183 | 273 | 42 | 200 | 108 | - | 1,127 | 1 | ||||||||||||||||||||||||||||||
Retrenchment costs | 1 | 2 | 1 | 2 | 1 | 2 | - | - | 9 | 1 | ||||||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | - | 2 | - | - | 1 | 1 | - | - | 4 | (2 | ) | |||||||||||||||||||||||||||||
Amortisation of tangible assets | 22 | 75 | 97 | 69 | 1 | 70 | 4 | - | 338 | 13 | ||||||||||||||||||||||||||||||
Amortisation of intangible assets | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | - | - | - | - | - | - | (6 | ) | |||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of production costs(2) | - | - | - | - | - | - | - | - | - | 1 | ||||||||||||||||||||||||||||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 135 | 288 | 281 | 344 | 45 | 273 | 112 | - | 1,478 | (8 | ) | |||||||||||||||||||||||||||||
Gold produced – oz (000)(3) | 94 | 307 | 266 | 500 | 49 | 244 | 164 | - | 1,624 | - | ||||||||||||||||||||||||||||||
Total cash costs per unit – $/oz(4) | 1,194 | 681 | 689 | 546 | 864 | 818 | 660 | - | 694 | - | ||||||||||||||||||||||||||||||
Total production costs per unit – $/oz(4) | 1,443 | 939 | 1,058 | 688 | 901 | 1,118 | 683 | - | 910 | - | ||||||||||||||||||||||||||||||
| (1) | Adjusting for non-controlling interest of items included in calculation, to disclose the attributable portions only. |
| (2) | Attributable costs and related expenses of associates and equity accounted joint ventures are included in the calculation of total cash costs per ounce and total production costs per ounce. |
| (3) | Attributable portion. |
| (4) | 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. |
Corporate includes non-gold producing subsidiaries. |
Total cash costs per ounce calculation includes heap-leach inventory change. |
145
| (7) | All-in sustaining costs has been calculated from 2012 onwards and excludes stockpile impairments. |
OerationsOperations in South AfricaGhana, Guinea, Mali, Namibia and Tanzania
(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 | — | |||||||||||||||||||||||||||
146
| |
|
|
|
|
| ||||||||||||||||||||||||||||||||||
|
| | | | |
| | |||||||||||||||||||||||||||||||||
Total cash costs | ||||||||||||||||||||||||||||||||||||||||
Total cash costs per financial statements | 159 | 269 | 248 | - | - | - | 67 | 173 | (7 | ) | 909 | |||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | (37 | ) | - | - | - | - | - | - | (37 | ) | ||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of total cash costs(2) | - | - | - | 81 | 98 | 44 | - | - | - | 223 | ||||||||||||||||||||||||||||||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | 159 | 269 | 211 | 81 | 98 | 44 | 67 | 173 | (7 | ) | 1,095 | |||||||||||||||||||||||||||||
Retrenchment costs | 1 | - | - | - | - | - | 1 | - | - | 2 | ||||||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | 21 | 77 | 14 | - | - | - | 1 | 15 | (2 | ) | 126 | |||||||||||||||||||||||||||||
Amortisation of tangible assets | 21 | 55 | 30 | - | - | - | 10 | 147 | 2 | 265 | ||||||||||||||||||||||||||||||
Amortisation of intangible assets | - | - | - | - | - | - | - | - | 2 | 2 | ||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | (7 | ) | - | - | - | - | - | - | (7 | ) | ||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of production costs(2) | - | - | - | 5 | 5 | 2 | - | - | - | 12 | ||||||||||||||||||||||||||||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 202 | 401 | 248 | 86 | 103 | 46 | 79 | 335 | (5 | ) | 1,495 | |||||||||||||||||||||||||||||
Gold produced – oz (000)(3) | 199 | 313 | 249 | 99 | 121 | 29 | 66 | 494 | - | 1,570 | ||||||||||||||||||||||||||||||
Total cash costs per unit – $/oz(4) | 800 | 862 | 849 | 810 | 816 | 1,530 | 1,012 | 350 | - | 698 | ||||||||||||||||||||||||||||||
Total production costs per unit – $/oz(4) | 1,021 | 1,285 | 1,001 | 863 | 855 | 1,609 | 1,188 | 678 | - | 953 | ||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||
147
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total cash costs | ||||||||||||||||||||||||||||||||||||
Total cash costs per financial statements | 337 | 15 | 352 | 192 | 78 | 190 | 104 | 2 | 566 | |||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | (41 | ) | (6 | ) | - | (52 | ) | - | (99 | ) | |||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of total cash costs(2) | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | 337 | 15 | 352 | 151 | 72 | 190 | 52 | 2 | 467 | |||||||||||||||||||||||||||
Retrenchment costs | - | - | - | - | 1 | 2 | - | - | 3 | |||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | 5 | - | 5 | 33 | 12 | 29 | 19 | 1 | 94 | |||||||||||||||||||||||||||
Amortisation of tangible assets | 41 | 1 | 42 | 33 | 27 | 76 | 32 | 1 | 169 | |||||||||||||||||||||||||||
Amortisation of intangible assets | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | (25 | ) | (3 | ) | - | (26 | ) | - | (54 | ) | |||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of production costs(2) | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 383 | 16 | 399 | 192 | 109 | 297 | 77 | 4 | 679 | |||||||||||||||||||||||||||
Gold produced – oz (000)(3) | 246 | - | 246 | 267 | 196 | 359 | 67 | - | 889 | |||||||||||||||||||||||||||
Total cash costs per unit – $/oz(4) | 1,367 | - | 1,431 | 564 | (6) | 368 | 529 | 768 | - | 524 | ||||||||||||||||||||||||||
Total production costs per unit – $/oz(4) | 1,553 | - | 1,622 | 720 | 555 | 828 | 1,150 | - | 764 | |||||||||||||||||||||||||||
AngloGold Ashanti operations —– Total
(in $ millions, except as otherwise noted)
Year ended December 2011 | |||||
Total cash costs | |||||
Total cash costs per financial statements | |||||
Adjusted for non-controlling interests and non-gold producing companies | ( | ) | |||
Associates and equity accounted joint ventures’ share of total cash costs | 223 | ||||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | |||||
Retrenchment costs | |||||
Rehabilitation and other non-cash costs | 227 | ||||
Amortisation of tangible assets | 827 | ||||
Amortisation of intangible assets | 2 | ||||
Adjusted for non-controlling interests and non-gold producing companies | ( | ) | |||
Associates and equity accounted joint ventures’ share of production costs | 13 | ||||
Total production costs adjusted for non-controlling interests | |||||
Gold produced – oz (000) | |||||
Total cash | |||||
Total production cost per unit - $/oz | |||||
148
| 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 | — | |||||||||||||||||||||||||||
149
| 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
| 938 |
151
Total capital expenditure of $1,015was $1,993 million was recorded in the year ended December 31, 20102013 compared to $1,027$2,322 million in the same period in 2009.2012. This represents a $12$329 million, or 114 percent, decrease from 2009. In Australia, total2012. The decreased capital expenditure during 2013 relates to reduced capital expenditure on existing operations of $237 million and decreased from $177capital expenditure of $91 million in 2009 to $40for growth related projects. Capital expenditure decreased at Tropicana by $74 million, in 2010South Africa region by $132 million following the scaling back of project investment as a resultpart of the sale of Boddington during 2009. Capital expenditure increasedcost-cutting initiatives across the South African asset portfolio, at Obuasithe Mongbwalu project by $27$77 million, at Iduapriem by $67 million, Geita by $62 million, AngloGold Ashanti Córrego do Sítio Mineração by $24 million, Geita by $22 million, Mponeng by $17 million, Moab Khotsong by $13$39 million and Cerro Vanguardia by $7$24 million.
Total capital expenditure of $1,027was $2,322 million was recorded in the year ended December 31, 20092012 compared to $1,239$1,686 million in the same period in 2008.2011. This represents a $212$636 million, or 1738 percent, decreaseincrease from 2008. In Australia, total2011. The increased capital expenditure decreased from $439during 2012 relates to higher capital expenditure on existing operations of $84 million in 2008 to $177and increased spending of $552 million in 2009. This is as a result offor growth related projects. Capital expenditure increased at Tropicana by $242 million, the sale of Boddington during 2009.
Comparison of financial performance on a segment basis for 2010, 20092013, 2012 and 2008
The Companycompany 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.
| 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 | ||||||||||||||||||
152
Gold income
| (in millions) | Year ended 31 December | |||||||||||||||||||||||
| 2013 | 2012 | 2011 | ||||||||||||||||||||||
| $ | percent | $ | percent | $ | percent | |||||||||||||||||||
Geographical analysis of gold income by origin is as follows: | ||||||||||||||||||||||||
South Africa | 1,810 | 33 | 2,013 | 32 | 2,560 | 39 | ||||||||||||||||||
Continental Africa | 2,111 | 38 | 2,609 | 41 | 2,530 | 38 | ||||||||||||||||||
Australasia | 441 | 8 | 426 | 7 | 385 | 6 | ||||||||||||||||||
Americas | 1,425 | 26 | 1,656 | 25 | 1,487 | 23 | ||||||||||||||||||
| 5,787 | 6,704 | 6,962 | ||||||||||||||||||||||
Less : Associates and equity accounted joint ventures included above | (290 | ) | (5 | ) | (351 | ) | (5 | ) | (392 | ) | (6 | ) | ||||||||||||
Gold income | 5,497 | 100 | 6,353 | 100 | 6,570 | 100 | ||||||||||||||||||
| 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) | Year ended 31 December | |||||||||||||||||||||||
| 2013 | 2012 | 2011 | ||||||||||||||||||||||
| $ | percent | $ | percent | $ | percent | |||||||||||||||||||
Geographical analysis of assets by origin is as follows: | ||||||||||||||||||||||||
South Africa | 2,325 | 24 | 3,082 | 24 | 2,148 | 20 | ||||||||||||||||||
Continental Africa | 3,391 | 35 | 4,846 | 38 | 4,234 | 40 | ||||||||||||||||||
Australasia | 1,108 | 11 | 1,045 | 8 | 736 | 7 | ||||||||||||||||||
Americas | 2,203 | 23 | 2,878 | 23 | 2,501 | 23 | ||||||||||||||||||
Other, including non-gold producing subsidiaries | 647 | 7 | 888 | 7 | 1,130 | 10 | ||||||||||||||||||
Total assets | 9,674 | 100 | 12,739 | 100 | 10,749 | 100 | ||||||||||||||||||
At 31 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 31 December 2012, 24 percent of AngloGold Ashanti’s total assets were located in South Africa compared with 20 percent at the end of 2011. The remaining operations collectively accounted for approximately 76 percent of AngloGold Ashanti’s total assets at 31 December 2012 compared to 80 percent at the end of the same period in 2011.
Comparison of financial performance in 2010, 20092013, 2012 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
| Financial performance of AngloGold Ashanti | Year ended 31 December | |||||||||||
| (in millions) | 2013 | 2012 | 2011 | |||||||||
Gold income | 5,497 | 6,353 | 6,570 | |||||||||
Cost and expenses | (7,868) | (5,062) | (4,272) | |||||||||
Share of associates and joint ventures’ (loss) profit | (162) | (30) | 72 | |||||||||
Taxation benefit (expense) | 333 | (346) | (737) | |||||||||
Net profit attributable to non-controlling interests | 30 | 18 | 46 | |||||||||
Net (loss) profit attributable to equity shareholders | (2,230) | 897 | 1,587 | |||||||||
RevenuesGold income
Gold income increaseddecreased by $1,447$856 million from $3,955$6,353 million in 20092012 to $5,402$5,497 million in 2010,2013, representing a 3713 percent increasedecrease over the period. This decrease was mainly due to the decrease in the average gold price received. The average spot price of gold was $1,411 per ounce during 2013, $257 per ounce, or 15 percent, lower than the average spot price of gold of $1,668 per ounce in 2012, which resulted in a decrease in gold income of approximately $1,014 million. The decrease was partially offset by the increase in production volume of 160,000 ounces, which resulted in an increase in gold income of approximately $226 million, mainly as a result of the production at Tropicana.
Gold income from the South African operations in 2013 decreased by $203 million to $1,810 million from $2,013 million in 2012, mainly as a result of the decrease in the average spot price of gold, which resulted in an decrease in gold income of approximately $312 million. This decrease was partially offset by the increase in production (1,302,000 ounces in 2013 compared to 1,212,000 ounces in 2012), which resulted in an increase of gold income of approximately $126 million. The increase in production was primarily due to production from MWS (acquired effective 20 July 2012) and the non-occurrence of the strike in South Africa.
Gold income from the Continental Africa operations in 2013 decreased by $498 million to $2,111 million from $2,609 million in 2012, mainly as a result of the decrease in the average spot price of gold, which resulted in an decrease in gold income of approximately $391 million. Gold income also decreased as a result of a decrease in production of 61,000 attributable ounces, primarily as a result of the mill shutdown at Geita, which resulted in a decrease in gold income of approximately $85 million.
Gold income from Australia increased from $426 million in 2012 to $441 million in 2013. The increase was mainly due to the increase in production of 84,000 ounces, of which 67,000 ounces were at Tropicana Gold Mine where operations started ahead of schedule, which resulted in an increase in gold income of approximately $118 million. This increase was partially offset by the decrease in the average spot price of gold, which resulted in a decrease in gold income of approximately $66 million.
Gold income from the Americas operations decreased from $1,656 million in 2012 to $1,425 million in 2013 mainly as a result of the decrease in the average spot price of gold, which resulted in a decrease in gold income of approximately $245 million. The decrease was partially offset by an increase in gold production from 953,000 attributable ounces in 2012 to 1,001,000 attributable ounces in 2013, which resulted in an increase in gold income of approximately $67 million. The increase in gold production was due to the increase in the company’s ownership in Serra Grande to 100 percent, effective July 2012 and higher grades recovered.
Cost and expenses
Production costs
Production costs increased from $3,212 million in 2012 to $3,384 million in 2013, which represents a $172 million, or 5 percent increase. The increase was primarily due to an increase in operational costs including labour, contractor costs and retrenchment costs.
Labour costs increased from $1,186 million in 2012 to $1,231 million in 2013, which represents $45 million, or 4 percent, increase. In particular, labour costs in Obuasi in Ghana, Siguiri in Guinea and Tropicana in Australia contributed to higher production costs. The increase in labour costs was primarily a result of annual salary increases and also an increase in employees in Australia due to Tropicana coming into production.
Contractor costs for the Group increased from $560 million in 2012 to $632 million in 2013, which represents a $72 million, or 13 percent increase. In particular, contractor costs in Australia and Iduapriem in Ghana contributed to higher production costs. The increase in contractor costs was primarily a result of annual salary increases.
Retrenchment costs increased to $69 million in 2013 from $10 million in 2012. Retrenchment costs recorded for the year ended 31 December 2013 resulted from the rationalisation of operations in South African, Americas and Continental Africa regions.
Production costs further increased by $30 million because of a reduction in recovery from settled insurance claims as compared with 2012 during which there was a reimbursement of costs relating to the pitwall failure at Sunrise Dam (Australia) in the amount of $30 million.
The increase in production costs was partially offset by the weakening of local currencies against the US dollar and a decrease in royalties paid by AngloGold Ashanti. Royalties decreased from $164 million in 2012 to $129 million in 2013, mainly due to the decrease in the average spot price of gold. Royalties recorded in South Africa decreased from $25 million in 2012 to $13 million in 2013. Royalties paid in Tanzania decreased from $33 million in 2012 to $25 million in 2013. Royalties paid in North America decreased from $11 million in 2012 to $5 million in 2013. Royalties in Argentina decreased from $33 million in 2012 to $29 million in 2013. In Argentina, royalties are payable to Formicruz, 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.
Exploration and evaluation costs
Exploration and evaluation costs decreased from $395 million in 2012 to $255 million in 2013 mainly due to lower prefeasibility expenditure at La Colosa in Colombia as well as at Sunrise Dam in Australia, together with a decrease in exploration expenditure at Tropicana in Australia, Mongbwalu in the Democratic Republic of the Congo, Solomon Islands and Geita in Tanzania. For a discussion of AngloGold Ashanti’s exploration activities in 2013, see “Item 4B.: Business overview – Global exploration”.
Amortisation of tangible and intangible assets
Amortisation of tangible and intangible assets expense decreased by $36 million or 4 percent, to $799 million in 2013 from $835 million in 2012, largely due to the impact on amortisation as a result of the impairment and derecognition of assets during 2013.
Impairment and derecognition of assets
In 2013, AngloGold Ashanti recorded impairments and derecognition of goodwill, tangible and intangible assets amounting to $3,029 million, compared to net impairments amounting to $346 million in 2012. This was partly due to the cash generating unit impairment of Moab Khotsong, in South Africa, of $293 million as a result of changes to the mine plan following revision of capital expenditure and from factors such as declining gold price and an increasing discount rate. Furthermore, as a result of declining gold price and an increasing discount rate, cash generating units were impaired at Iduapriem and Obuasi, in Ghana, in the amount of $74 million and $993 million, respectively, at Siguiri, in Guinea, in the amount of $25 million, at Geita, in Tanzania, in the amount of $555 million, in the Americas at Cripple Creek & Victor in the amount of $445 million, AngloGold Ashanti Mineração in the amount of $332 million and Cerro Vanguardia in the amount of $132 million. Assets not expected to generate future cash flows were derecognised at Vaal River Surface Operations, in South Africa, in the amount of $14 million and at Mongbwalu, in the Democratic Republic of the Congo, in the amount of $105 million See “Note 7 – Special items”, “Note 15 – Tangible assets” and “Note 16 – Intangible assets” to the consolidated financial statements for additional information.
Finance costs and unwinding of obligations
Finance costs (net of amounts capitalised) increased by $80 million to $247 million in 2013, compared to $167 million in 2012. The increase is mainly due to the new $1.25 billion 8.500 percent notes issued in July 2013, Australian dollar syndicated revolving credit facility related to the Tropicana project, increase related to the $750 million 5.125 percent notes issued in July 2012. The increases were offset by a decrease in the mandatory notes which were settled in September 2013 and a decrease in the convertible bond settled in August 2013 and November 2013. Unwinding of obligations expense of $49 million was recorded in 2013 compared with $64 million in 2012 and relates mainly to the unwinding of discounted future rehabilitation obligations to present values. See “Note 8 – Finance costs and unwinding of obligations” to the consolidated financial statements for additional information.
Share of associates and joint ventures’ loss
Share of associates and joint ventures’ loss increased from $30 million in 2012 to $162 million in 2013, mainly as a result of reduced operating profits due to lower production and the lower average spot price of gold in 2013. Net impairments recorded in 2013 were $164 million compared to $59 million in 2012. The impairments in 2013 mainly related to the carrying value of the investments in Sadiola, Morila and Trans-Siberian Gold as discussed in “Note 18 – Investments in associates and joint ventures” to the consolidated financial statements.
Taxation
A taxation benefit of $333 million was recorded in 2013, compared to an expense of $346 million in 2012. Charges for current tax in 2013 amounted to $134 million, compared to $414 million in 2012. The decrease in the current tax charge in 2013 was mainly due to lower taxable income as a result of the lower gold price. Charges for deferred tax in 2013 amounted to a net deferred tax benefit of $467 million compared to a net deferred tax benefit of $68 million in 2012. The decrease in the deferred tax charge in 2013 is mainly due to tax credits on impairments of assets and inventory write-downs offset by derecognitions of deferred taxation assets in Obuasi and Cripple Creek & Victor. Refer to “Note 12 – Taxation” of the consolidated financial statements for additional information.
Comparison of financial performance in 2012 with 2011
Gold income
Gold income decreased by $217 million from $6,570 million in 2011 to $6,353 million in 2012, representing a 3 percent decrease over the period. This decrease was mainly due to the decrease in production volume of 387,000 ounces, which resulted in a decrease in gold income of approximately $644 million, mainly as a result of the unprotected strike action at the South African operations. The decrease was partially offset by the increase in the average gold price received. The average spot price of gold was $1,227$1,668 per ounce during 2010, $2532012, $96 per ounce, or 266 percent, higher than $974$1,572 per ounce in 2009. In addition, included2011, which resulted in the 2009an increase in 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. The year on year increase in revenue was partially offset by reduced gold production of 84,000 ounces in 2010 when compared to 2009. The majority of product sales consisted of US dollar-denominated gold sales.
Gold income from the South African operations increaseddecreased by $589$547 million to $2,276$2,013 million from $1,687$2,560 million in 2009,2011, mainly as a result of the decrease in production (1,212,000 ounces in 2012 compared to 1,624,000 ounces in 2011), which resulted in a decrease of gold income of approximately $687 million. The decrease in production was primarily due to the unprotected strike action at our South African mines in 2012. This decrease was partially offset by the increase in the average spot price of gold. Thisgold, which resulted in an increase was offset by the reducedin gold production at the South African operations (1,785,000 ounces in 2010 compared to 1,797,000 ounces in 2009).
Gold income from the AmericasContinental Africa operations increased by $79 million to $2,609 million from $804$2,530 million in 2009 to $1,125 million in 20102011, mainly as a result of the increase in the average spot price of gold, andwhich resulted in an increase in gold producedincome of approximately $151 million. This increase was partially offset by the 49,000 attributable ounces decrease in production, primarily as a result of lower grades, which resulted in a decrease in gold income of approximately $82 million.
Gold income from 816,000the Australian operation at Sunrise Dam increased from $385 million in 2011 to $426 million in 2012. The increase was mainly due to the increase in production, as operations recovered from flood related disruptions from the previous year, from 246,000 attributable ounces in 20092011 to 842,000258,000 attributable ounces in 2010.
Gold income from the Continental AfricaAmericas operations increased by $420 million to $1,871 million from $1,451$1,487 million in 2009,2011 to $1,656 million in 2012 mainly as a result of the increase in the average spot price of gold, which resulted in an increase in gold income of approximately $86 million and the treatmentan increase in gold produced from 891,000 attributable ounces in 2011 to 953,000 attributable ounces in 2012, which resulted in an increase in gold income of higher tonnes and higher grade material at Geita.
Cost and expenses
Production costs
Production costs increased from $2,229$3,160 million in 20092011 to $2,656$3,212 million in 2010,2012, which represents a $427$52 million, or 192 percent increase. The production costs of most of the operations increased in 2010. The increase was mainly as a result ofprimarily due to an increase in operational costs including labor,labour, consumables and powerfuel.
Labour costs increased from $1,104 million in 2011 to $1,186 million in 2012, which represents $82 million, or 7 percent, increase. In particular, labour costs in Argentina, Brazil, Obuasi in Ghana and the increaseSiguiri in the rehabilitation provision.Guinea contributed to higher production costs. The increase in productionlabour costs was primarily a result of annual salary increases. Service related costs for the Group
increased, mainly due to consultancy costs for capacity building projects and costs saving initiatives, from $300 million in 2011 to $391 million in 2012, which represents a $91 million, or 30 percent, increase. In particular, increased service related costs in Obuasi in Ghana, South Africa, Córrego do Sítio Mineração in Brazil and Cerro Vanguardia in Argentina, contributed to higher production costs.
Contractor costs for the Group increased from $499 million in 2011 to $560 million in 2012, which represents a $61 million, or 12 percent increase. In particular, contractor costs at Sunrise dam in Australia and Geita in Tanzania contributed to higher production costs. The increase in contractor costs was primarily a result of annual salary increases. Fuel costs for the Group increased from $275 million in 2011 to $311 million in 2012, which represents a $36 million, or 13 percent, increase and electricity costs for the Group increased from $310 million in 2011 to $343 million in 2012, which represents a 33 million, or 11 percent, increase. In particular, 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. The increase in electricity and fuel costs was primarily a result of increased tariffs and increased hauling distances from satellite pits, respectively.
Retrenchment costs decreased to $10 million in 2012 from $15 million in 2011. Retrenchment costs recorded for the year ended 31 December 2012 resulted from the rationalisation of operations in South Africa, Americas and Continental Africa regions reflecting rationalisation of operations.
These increases were partially offset by the effects$30 million recovery from settled insurance claims during the third quarter of cost saving initiatives.
Royalties paid 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 of AngloGold Ashanti’s South African operations which currently account for approximately 40 percent of annual production. In 2010 power costs increased by $71 million of which $51 million was in South Africa.
154
Exploration and evaluation costs
Exploration and evaluation costs increased from $279 million in 2011 to $395 million in 2012 mainly due to higher prefeasibility expenditure at a fixed rate of 3 percent per annum based on revenue, as agreed to underLa Colosa in Colombia, additional exploration at Tropicana in Australia and Mongbwalu in the Stability Agreement entered into with AngloGold as partDemocratic Republic of the Congo, as well as increased exploration activities in Guinea. For a discussion of AngloGold Ashanti business combination. In Guinea, royalties are paid to the government, Union MiniereAshanti’s exploration activities in 2012, see “Item 4B.: Business overview – Global exploration”.
Amortisation of tangible and the International Finance Corporationintangible assets
Amortisation of tangible and are calculated as a percentage of revenues.
Impairment and amortization expense in South Africa, Tanzania (Continental Africa) and the Americas from $281 million, $53 million and $111 million, respectively, incurred in the year ended December 31, 2009 to $357 million, $55 million and $152 million, respectively, for the same period of 2010 mainly as a result of changes in estimated lives of assets, as well as stronger local currencies. This was partially offset by a decrease in 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.
In 2010,2012, AngloGold Ashanti recorded net impairments of tangible and intangible assets amounting to $346 million, compared to a reversal of impairments amounting to $91 million compared to $8$120 million in 2009. The increase2011. This was mainlypartly due to the impairment of Tau Lekoa (held for sale), Tau TonaGreat Noligwa and SavukaKopanang of $31 million and $14 million, respectively, in South Africa, during 2010, the write-off of assets at Iduapriem, Geita and Serra Grande in Brazil. Tau Tona and Savuka were impaired due to changes in the mine plan resulting in certain areas being abandonedabandoned. Furthermore, due to a change in the mine plan at Obuasi in Continental Africa, certain infrastructure, development and safety related concerns. Total impairment recognized for Tau Tonaassets have been impaired and Savuka during 2010 was $63written-off amounting to $296 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 Costs7 – Special items” ”, “Note 15 – Tangible assets” and expenses: Impairment of“Note 16 – Intangible assets” to the consolidated financial statements for additional information.
Interest expenseFinance costs and unwinding of obligations
Finance costs (net of amounts capitalised) increased by $28$26 million to $151$167 million in 2010,2012, compared to $123$141 million recorded in 2009.2011. The increase is mainly due to increases in the amortisation of borrowing fees and interest charges on the new $750 million rated bonds issued in July 2012 and mandatory convertible bonds, which was partially offset by lower interest paid due to the repayment of the 2009 Term Facilitysenior floating and $1.5 billion Revolving Credit Facility during 2010. Interest expensefixed rate notes (DMTNP) issued in October 2012. Finance costs recorded in the year ended 31 December 31, 20102012 includes $8$6 million related to accelerated amortizationamortisation of fees on debt facilities cancelled.
155 See “Note 8 – Finance costs and unwinding of obligations” to the consolidated financial statements for additional information.
Share of associates and joint ventures’ (loss) profit
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| 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 | ||||||
| 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. | ||||||||
Taxation expense/benefit
A net taxation expense of $255$346 million was recorded in 20102012, compared to a net tax benefitan expense of $33$737 million recorded in 2009.2011. Charges for current tax in 20102012 amounted to $117$414 million, compared to $166$407 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
158
159
| 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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| 5B. | LIQUIDITY AND CAPITAL RESOURCES |
In the board’s opinion, AngloGold Ashanti’s working capital is sufficient to reverse.
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2013
Cash flows from operating activities was $1,038were $1,246 million in 2010, significantly higher2013, lower than the 20092012 amount of $443$1,969 million. The increasedecrease in net cash flows provided by operations was mainly as a result of an increase in the gold price received during 2010.
Net cash outflow from operating working capital items amounted to $314$250 million in 2010,2013, compared with an outflow of $21$218 million in 2009.
2012
Cash flows from operating activities was $443were $1,969 million in 2009, significantly higher2012, lower than the 20082011 amount of $64$2,813 million. The increasedecrease in net cash flows provided by operations was mainly as a result of lower payments to suppliers, higher received gold pricecosts and lower cash utilized in hedge buy-backs in 2009.
Net cash outflow from operating working capital items amounted to $21$218 million in 2009,2012, compared with an outflow of $239$170 million in 2008.
Investing activities
2013
Investing activities in 20102013 resulted in a net cash outflow of $1,887$2,040 million, which is an increasea decrease of $1,619$735 million from an outflow of $268$2,775 million in 2009. Investing activities for non-hedge derivatives maturing resulted in an outflow of $9842012. Capital expenditure decreased to $1,501 million in the year ended December 31, 20102013 compared to an outflow of $18 million for the same period in 2009. Proceeds received from the sale of assets decreased from $1,142$1,925 million in 2009 to $69 million in 2010 due to the inclusion of the sale of Boddington 2009.
2012
Investing activities in 20092012 resulted in a net cash outflow of $268$2,775 million, an increase of $1,053 million from an outflow of $1,722 million in 2011. Capital expenditure increased to $1,925 million in 2012 compared to $1,551 million in 2011. The acquisition of First Uranium (Pty) Limited resulted in a cash outflow of $335 million in 2012.
Financing activities
2013
Cash flows from financing activities in the year ended 31 December 2013 amounted to an inflow of $560 million, which is a decrease of $1,325$31 million from an outflowinflow of $1,593$591 million in 2008 mainlythe year ended 31 December 2012. Cash inflows from proceeds from borrowings in 2013 amounted to $2,344 million and included $1.25 billion 8.500 percent notes due to2020 issued during July 2013, $432 million proceeds on the $990local borrowings facility and commercial paper in South Africa, $250 million draw down on the $1.0 billion four-year syndicated loan facility, $323 million drawn down on the A$600 million syndicated loan for general corporate purposes, principally on the Tropicana project, $72 million proceeds on the ZAR 750 million bonds issued during December 2013 and $15 million proceeds from short-term borrowings in Argentina.
Cash outflows from repayment of borrowings of $1,486 million during the year ended 31 December 2013 included the repayment of $250 million on the $1.0 billion four-year syndicated loan facility, $733 million on the early settlement of the convertible bonds due 2014, $27 million on the A$600 million syndicated loan, $458 million on local borrowings facility, commercial paper and finance leases in South Africa and normal scheduled loan repayments of $16 million.
Dividends paid decreased from $236 million in proceeds received from the sale of the 33.33 percent stake2012 to $62 million in Boddington which was offset in part2013. Dividends are proposed and approved by the $344 million acquisitionboard of an effective indirect 45 percent interest in the Kibali gold project.
2012 Cash flows from | |||
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Cash outflows from repayment of debtborrowings of $1,642$217 million during the year ended 31 December 31, 20102012 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 million towards the FirstRand Bank Limited loan facility, $120 million towardson the $1.0 billion four-year syndicated loan facility and normal scheduled loan repayments of $12$17 million.
Dividends paid increased from $56$169 million in 20092011 to $117$236 million in 2010.2012. 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.
Liquidity
AngloGold Ashanti’s revenues are derived primarily from the sale of gold produced at its mines. Cash generated byflows from 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’scompany’s operations and the cash flows generated by these operations. Earnings
There are no significant restrictions on the ability of joint ventures andthe group to obtain funds from its 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$628 million, (which includes $11net of a bank overdraft of $20 million, for held for sale assets) at 31 December 31, 20102013 compared with $1,100$892 million at 31 December 31, 2009.2012. 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 31 December 31, 2010, approximately 362013, 82 percent of the Company’scompany’s cash and cash equivalents werewas held in US dollars, 3111 percent werewas held in South African rands and 337 percent werewas held in other currencies.
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On April 20 2010,July 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 four yearfive-year unsecured revolving credit facility at an interest rate of Libor plus 1.750 percent, with a syndicate of lenders to replace thewhich replaced its existing $1.15$1.0 billion syndicated facility.facility that was scheduled to mature in April 2014. AngloGold Ashanti Limited, AngloGold Ashanti Holdings plcplc. and AngloGold Ashanti USA Inc. each guaranteed the obligations of the borrowers and other guarantors under the facility. Amounts may be repaid and reborrowedredrawn under the facility during its four yearfive-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 0.700.525 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, 2010,30 July 2012, the Company announced the pricing ofcompany completed an offering of a $700$750 million 10-year note and a $300 million 30-year note. The offering closed on April 28, 2010.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 are fully and unconditionally guaranteed by AngloGold Ashanti Limited.
During February 2013, the company entered into a syndicated bridge loan facility agreement (standby facility) pursuant to which a syndicate of banks agreed to make available $750 million to the group. The group guaranteed all payments and other obligations under the facility. The facility was cancelled during August 2013.
During July 2013, the company issued $1.25 billion aggregate principal amount of 8.500 percent notes at an issue price of 100 percent of the principal amount of the notes. The notes are unsecured and interest is payable semi-annuallyfully and unconditionally guaranteed by the group. The net proceeds from the offering of the notes were used for general corporate purposes, which included the repurchase of the 3.5 percent convertible bonds and the repayment of other indebtedness.
During July 2013, the company commenced a cash tender offer to purchase any and all of the outstanding $732.5 million 3.5 percent convertible bonds due May 2014 of the group at a ratepurchase price of 5.375$1,015 for each $1,000 principal amount of bonds validly tendered. The offer expired on 21 August 2013 and AngloGold Ashanti Holdings plc purchased $725.9 million in aggregate principal amount of the bonds, representing 99.1 percent onof the $700total issuance. During November 2013, the group completed the redemption of all of the remaining outstanding convertible bonds for $6.6 million, bondplus accrued and 6.50unpaid interest.
During September 2013, the group paid and settled the 6 percent on the $300 million bond. The bonds are payable in April 2020 and April 2040, respectively.
During December 2013, the group entered into a variable numberfive-year unsecured syndicated revolving credit facility (ZAR RCF) of shares ranging from 18,140,000R1.5 billion ($144 million) with Nedbank and ABSA Bank which is currently charged at a share price equalJIBAR plus 1.2 percent per annum. It is anticipated that this facility will be used 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 accordancefund the working capital and development costs associated with the formula set forthgroup’s mining operations within South Africa without eroding the group’s headroom under its other facilities and exposing the group to foreign exchange gains/losses each quarter. The facility matures in December 2018.
During December 2013, R750 million ($72 million) aggregate principal amount, unsecured notes were issued, due 2016 at JIBAR plus 1.75 percent. The objective of the indenture and subject to adjustment. ConcurrentZAR RCF in conjunction with the mandatory convertible bonds offering was an equity offering which resulted in the issue of 18,140,000 shares at an issue priceR750 million ($72 million) bonds was to provide a more permanent and reliable source of R308.37 per share. Total gross proceeds of $789 million were received from each of these offerings.
AngloGold Ashanti intends to finance its capital expenditure and debt repayment requirements in 20112014 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 debtCurrent borrowings
AngloGold Ashanti’s short-term debtcurrent borrowings decreased to $135$258 million at 31 December 31, 20102013 from $1,292$859 million at 31 December 31, 2009.2012. Included in the short-term debtcurrent borrowings at 31 December 31,2013, were:
$54 million payable under the Senior Floating Rate Notes (DMTNP) (interest charged at 5.992 percent per annum on $6 million and 5.967 percent per annum on $48 million; the notes are ZAR-based);
$62 million payable under the Senior Fixed Rate Notes (DMTNP) (interest charged at 5.342 percent per annum on $5 million and 5.942 percent per annum on 57 million; 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);
$12 million in interest payable under the $700 million 10-year and $300 million 30-year rated bonds issued April 2010 were:(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); and
$45 million under the $1.25 billion bonds issued on 30 July 2013 (interest charged at 8.50 percent per annum; the bonds mature on 30 July 2020 are US dollar-based).
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Unsecured loans:
$985 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);
$739 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);
$1,308 million outstanding under the $1.25 billion bonds issued on 30 July 2013 (interest charged at 8.50 percent per annum; the bonds mature on 30 July 2020 and are US dollar-based);
$72 million outstanding under the R750 million bonds issued on 9 December 2013 (interest charged at JIBAR plus 1.75 percent per annum; the bonds mature on 9 December 2016 and are ZAR-based); and
$489 million outstanding under the A$600 million syndicated revolving credit facility (interest charged at BBSY plus 2.6 percent per annum; the loan matures in December 2015 and is Australian dollar-based).
Secured capital leases:
$24 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);
$13 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
$1 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).
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| $ (million) | ||||
Unsecured | ||||
Secured | ||||
Total borrowings | ||||
Less: Short-term maturities | ||||
Total non-current borrowings | ||||
Amounts falling due are scheduled as follows:
| $ (million) | ||||
Within one year | 258 | |||
Between one and two years | 494 | |||
Between two and five years | 88 | |||
After five years | 3,051 | |||
Total | 3,891 | |||
| $ (million) | ||||
| 2011 | 135 | |||
| 2012 | 8 | |||
| 2013 | 877 | |||
| 2014 | 685 | |||
| 2015 | 2 | |||
| Thereafter | 1,030 | |||
Total | 2,737 | |||
At 31 December 31, 20102013, the currencies in which the borrowings were denominated were as follows:
| $ (million) | ||||
United States dollars | ||||
Australian dollars | ||||
South African rand | ||||
Brazilian real | ||||
Total | 3,891 | |||
At 31 December 31, 2010,2013, AngloGold Ashanti had the following undrawn amounts available under its borrowing facilities:
| $ (million) | ||||
Syndicated | ||||
Syndicated revolving credit facility (A$600 million) – Australian dollar | ||||
Syndicated revolving credit facility (R1.5 billion) – SA rand | ||||
FirstRand Bank Limited | ||||
Total undrawn facilities | ||||
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As of 31 December 31, 2010,2013, the Companycompany was in compliance with all debt covenants and provisions related to potential defaults.
AngloGold Ashanti, through its executive committee, reviews its short, mediumshort-, 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.
Contractual commitments and contingencies
For a detailed discussion of commitments and contingencies, see note 2136 to the consolidated financial statements “Commitments“Contractual commitments and contingencies”.
As at 31 December 31, 2010,2013, capital commitments(1) and contingencies can be summarizedsummarised 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 | |||||||||||||||
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| Expiration per period | ||||||||||||||||||||
Commitment
(in millions) | Total Amount $ | Less than 1 year $ | 1 – 3 Years $ | 4 – 5 Years $ | Over 5 $ | |||||||||||||||
Capital expenditure | ||||||||||||||||||||
(contracted and not yet contracted)(1) | 1,510 | 796 | 714 | - | - | |||||||||||||||
Guarantees | 10 | 10 | - | - | - | |||||||||||||||
Other commercial commitments(2) | 746 | 610 | 106 | 23 | 7 | |||||||||||||||
Total | 2,266 | 1,416 | 820 | 23 | 7 | |||||||||||||||
(1) Including commitments through contractual arrangements with equity accounted joint ventures of $185 million.
(2) Excludes commitments through contractual arrangements with equity accounted joint ventures.
In the normal course of its operations, the Companycompany is exposed to gold and other commodity price, currency, interest rate, liquidity and non-performance risk, which includes credit risk. The Companycompany is also exposed to certain by-product commodity price risk. In order to manage these risks, the Companycompany may enter into transactions which make use of derivatives. The Companycompany 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 Companycompany does not acquire, hold or issue derivatives for tradingspeculative purposes. During the year, 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 exchange risks. In order to provide 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 the hedge book contracts 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 1 January | ( | ) | ||
Option component of convertible bonds | ||||
Embedded derivatives | 1 | |||
Fair value of derivatives at 31 December | ||||
| 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 | ) | |||||||||||||
Recent developments
For a detailed discussion of recent developments, see note 3040 to the consolidated financial statements “Subsequent events”“Events subsequent to year end”.
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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 41 to the consolidated financial statements “Significant accounting“Accounting policies”. Recently adopted accounting policies are also described in note 21 to the consolidated financial statements “Accounting changes”. Recent pronouncementsstatements. Accounting standards, amendments to standards and new interpretations which are not yet mandatory and have not been adopted in the current year are also described in note 4.271 to the consolidated financial statements “Recent pronouncements”.
Critical accounting policies
AngloGold Ashanti’s accounting policies are described in note 41 to the consolidated financial statements “Significant accounting“Accounting policies”. The preparation of the Company’scompany’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’scompany’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 realizablerealisable 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 amortizationamortisation 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’scompany’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 mineralizationmineralisation uneconomic to mine. Further, availability of permits, changes in operating and capital costs, and other factors could materially and adversely affect Ore Reserves. The Companycompany 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 Companycompany reviews mining schedules, production levels and asset lives in the Company’scompany’s life-of-mine planning for all of the Company’scompany’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 Companycompany reviews its accounting estimates and adjusts depreciation, amortization,amortisation, 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’scompany’s results of operations and financial condition.
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| 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 | |||||||||
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Accounting 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 Companycompany assesses such contingent liabilities, which inherently involves the exercise of significant management judgmentjudgement and estimates of the outcome of future events. Also, see “Taxation” discussed below.
Impairment of long-livedtangible and intangible assets
AngloGold Ashanti’s long-lived assets include property, plant and equipment, acquired properties, goodwill and other tangibleintangible assets. In assessing the potential impairment of its long-lived assets held for use, the Companycompany 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 undiscounteddiscounted cash flows associated with these assets, an impairment charge is recognizedrecognised in the consolidated financial statements based on the fair value of the asset.statements. The Companycompany 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”15 - “Tangible assets”.
Taxation
AngloGold Ashanti follows the liability method of accounting for deferred taxation whereby the Company recognizescompany recognises 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 theseDeferred tax assets are not to be realized, an adjustmentonly recognised to the valuation allowance would be required, which would be charged to incomeextent that it is probable that the deductible temporary differences will reverse in the period thatforeseeable future and future taxable profit will be available against which the determination was 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 recognizescompany recognises 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.
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Heap leach inventory
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 realizablerealisable 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.
As at 31 December 31, 20102013 and 2009, $912012, $111 million and $40$128 million, respectively, of heap-leach inventory was classified as short-termcurrent as the Companycompany expects the related gold to be recovered within twelve months. The short-termcurrent 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-termcurrent portion of materials on the leach pad as at 31 December 31, 2010.2013. As at 31 December 31, 2010, $3312013, $479 million was classified as long-termnon-current compared with $324$436 million as at 31 December 31, 2009.
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Research and development expenditure included in the income statement amounted to $4 million, $3$9 million and $1 million during 2010, 20092013, 2012 and 20082011, respectively.
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.
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.
See note 2028 to the consolidated financial statements “Provision for environmental rehabilitation”“Environmental rehabilitation and other provisions”.
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As at 31 December 31, 20102013 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 | |||||||||||||||
Total $ | Less than 1 year $ | 1 – 3 Years $ | 3 – 5 Years $ | More than 5 years $ | ||||||||||||||||
Long-term debt obligations including interest(1) | 5,739 | 440 | 1,012 | 419 | 3,868 | |||||||||||||||
Capital lease obligations | 60 | 10 | 14 | 15 | 21 | |||||||||||||||
Operating lease obligations | 34 | 18 | 8 | 6 | 2 | |||||||||||||||
Purchase obligations | ||||||||||||||||||||
- Contracted capital expenditure(2) | 437 | 356 | 81 | - | - | |||||||||||||||
- Other purchase obligations(3) | 746 | 610 | 106 | 23 | 7 | |||||||||||||||
Environmental rehabilitation costs(4) | 4,651 | 32 | 94 | 127 | 4,398 | |||||||||||||||
Pensions and other post-retirement medical obligations(5) | 152 | 12 | 24 | 26 | 90 | |||||||||||||||
Total | 11,819 | 1,478 | 1,339 | 616 | 8,386 | |||||||||||||||
| (1) | Interest calculations are at the rate existing at the year end. Actual rates are set at floating rates for some of the |
| (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 |
| (5) | ||
Represents payments for unfunded plans or plans with insufficient funding. | ||
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ITEM 6: DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
Directors
AngloGold Ashanti has a unitary board structure which comprises two executive directors and eightseven non-executive directors. Certain information with respect to AngloGold Ashanti’s directors as at 31 December 31, 20102013 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) | |||
Srinivasan Venkatakrishnan | 48 | Executive director and chief executive officer | 2005 | |||
Richard N Duffy | 50 | Executive director and chief financial officer | 2013 | |||
Tito T Mboweni(3) | 54 | Independent non-executive director and Chairman | 2010 | |||
Rhidwaan Gasant(2) | 54 | Independent non-executive director | 2010 | |||
Nozipho January-Bardill (2) | 63 | Independent non-executive director | 2011 | |||
Michael J. Kirkwood(2) | 66 | Independent non-executive director | 2012 | |||
Lumkile W (Wiseman) Nkuhlu(2) | 69 | Independent non-executive director | 2006/2009 | |||
Sipho M Pityana(4) | 54 | Non-executive director | 2007 | |||
Rodney J. Ruston | 63 | Independent non-executive director | 2012 |
| (1) | ||
Directors | ||
| (2) | Member of the |
| (3) | Appointed as |
| (4) |
| |
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BA; MA (Development Economics)
Chairman and independent non-executiveIndependent Non-Executive Director
Tito Mboweni was appointed to the board and as chairmanChairman of AngloGold Ashanti on 1 June 1, 2010. Mr MboweniAs at 31 December 2013 he was a member of the Nominations; Investment; Remuneration and Human Resources; and the Financial Analysis Committees. He has a long and outstanding record of public service. As Labor Minister of Labour from 1994 to 1998, heMr Mboweni was the architect of South Africa’s post-apartheid laborlabour legislation which today continues to provide the basis for the mutually respectful laborlabour 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 the non-executive chairman of Nampak Limited, SacOil Holdings Limited, Accelerate Property Fund Limited, a member of the board of Discovery Limited and an international adviser to Goldman Sachs. Mr Mboweni is a founder member of Mboweni Brothers Investment Holdings. He is chairman of the Nominationsfund raising committee of the Nelson Mandela Children’s Hospital and a member of the Council of Advisors of the Thabo Mbeki Foundation. In December 2012, he was elected as a member of the National Executive Committee of the African National Congress.
EXECUTIVE DIRECTORS:
Mr S Venkatakrishnan (Venkat) (48)
BCom; ACA (ICAI)
Chief Executive Officer (CEO)
Venkat was appointed CEO on 8 May 2013, after holding the position of joint acting CEO since April of that year. He was previously Chief Financial Officer (CFO) at Ashanti Goldfields until its merger with AngloGold in May 2004, creating what is now AngloGold Ashanti. Venkat became CFO of the combined entity shortly after the merger and joined the board on 1 August 2005. He is the Chairman of the Executive Committee and also a member of the Risk and Information Integrity and Investment Committees. In his role as CFO, he oversaw funding for all of AngloGold Ashanti’s operating activities, giving him a detailed knowledge of all of our mines and operating jurisdictions. He is a member of the audit committee of the World Gold Council and is a member of the Investment, Financial AnalysisReporting Investigation Panel, an advisory panel of the JSE. He was the executive responsible for eliminating a 12Moz hedge book, generating significant value for the company, and Party Political Donations committees.
was the key executive behind rebuilding the balance sheet through a series of successful debt financings that introduced long-term tenor and more favourable funding terms to the company’s credit profile. During Venkat’s first year as CEO of AngloGold Ashanti, two new mines were commissioned on time and ahead of budget, the company achieved its best ever safety performance and a significant restructuring was undertaken of operating and overhead costs in order to focus the business on delivery of sustainable free cash flow and returns. Venkat has also previously been a Director of Corporate Reorganisation Services at Deloitte & Touche in London.
Mr RN Duffy (50)
BCom; MBA
Deputy chairman and independent non-executiveChief Financial Officer (CFO)
Richard Duffy was appointed to the board of AngloGold Ashanti on April 1 1998 and deputy chairman on May 1, 2002.
NON-EXECUTIVE DIRECTORS:
Mr SM Pityana (54)
BA (Hons) (Essex); MSc (London); Dtech (Honoris) (Vaal University of past president of the National Union of Mineworkers. HeTechnology)
Non-Executive Director
Sipho Mila Pityana is the executive chairman of TEBA Limited, a service organization primarily responsible for the recruitment of mineworkers for the South African mining industry.
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Mr Pityana has extensive business experience having served in both an executive and non-executive capacity on several JSE listed boards of companies as well as running his own company which he chairs, Izingwe Capital. He is chairman of the JSE listed Onelogix and of Munich Reinsurance of Africa. He also served on the boards of Bytes Technology Group, AFROX, SPESCOM and the Old Mutual Leadership Group. He previously worked as the Executive Director of Nedcor Investment Bank and Managing Director of Nedbank. He is also a director of a number of manufacturing companies including Scaw Metals and Aberdare Cables.
In addition to his private sector track record, Mr Pityana has extensive public sector experience and international exposure. He was the first Director General of Department of Labour in a democratic South Africa. As the Foreign Affairs Director General he represented South Africa in various international fora including the United Nations, African Union, Commonwealth and the International Labour Organisation. He was one of the founding members of the governing body of the Commission for Conciliation, Mediation and Arbitration (CCMA) and Convenor of the South African government delegation to the National Economic Development and Nominations Committees.
Prof LW Nkuhlu (66) (South African),BCom,(69)
BCom; CA (SA),; MBA (New York University)
Independent non-executiveNon-Executive Director
Wiseman Nkuhlu was first appointed to the board on 4 August 4, 2006.2006 and resigned on 30 April 2009. He has beenwas re-appointed to the chairmanboard on 1 June 2009 and appointed as Lead Independent Director on 17 February 2014. As at 31 December 2013 he was the 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 Nominations, Party Political Donations, Remuneration,Risk and Information Integrity; Safety, Health and Sustainable DevelopmentEnvironment; Nominations; Remuneration and RiskHuman Resources; Social, Ethics and Information Integrity,Transformation; and the Financial Analysis committees.
Mr R Gasant (54)
CA (SA)
Independent Non-Executive Director
Rhidwaan Gasant was appointed to the board of AngloGold Ashanti on 12 August 2010 and as at 31 December 2013 he was Chairman of the Investment Committee and a member of the Audit and Corporate Governance; Risk and Information Integrity; Nominations; and Financial Analysis Committees. He is the former Chief Executive Officer of Energy Africa Limited and sits on the boards of international companies in the MTN Group. 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 (63)
BA English; Philosophy and Certificate in Education (UBLS, Lesotho); MA Applied Linguistics (Essex UK); Diploma Human Resources Development (Damelin, SA)
Independent Non-Executive Director
Nozipho January-Bardill was appointed to the board of AngloGold Ashanti on 1 October 2011. As at 31 December 2013 she was the Chairman of the Social, Ethics and Transformation Committee and a member of the Audit and Corporate Governance; Safety, Health and Environment; and Nominations Committees. She was an Executive Director, Corporate Affairs and spokesperson of the MTN Group where she also served on the boards of a number of operations in the MTN footprint. She is a former South African Ambassador to Switzerland, Lichtenstein and the Financial Accounting Standards Board (FASB)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 DIRCO).
Mr SM Pityana (51) (South African),BA (Hons) (Essex), MSc (London), Dtech (Honoris) (VaalMJ Kirkwood (66)
AB, Stanford University, of Technology)
Economics & Industrial Engineering
Independent non-executiveNon-Executive Director
Michael Kirkwood joined the board of AngloGold Ashanti on February 13, 20071 June 2012 and assumedis the chairmanshipChairman of the Remuneration Committee on August 1, 2008. He is a member of the Safety, Health and Sustainable Development, Party Political Donations, Investment, Nominations, Transformation and Human Resources Development, RiskCommittee and Information Integrity and the Financial Analysis 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 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 director on the boards of several other South African companies.
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Mr F B Arisman who retired by rotation and Prof L W Nkuhlu who retired in terms of the company’s articles of association at the annual general meeting made themselves available for re-election and election respectively and were appointed by shareholders at the annual general meeting.
MBA; Business BE (Mining)
Independent Non-Executive Director
Rodney Ruston was appointed to the board sinceof AngloGold Ashanti on 1 January 2012 and is Chairman of the last annual general meeting,Risk and Information Integrity Committee. As at 31 December 2013 he was a member of the Investment; Safety, Health and Environment; Nominations; Social, Ethics and Transformation; and the Remuneration and Human Resources Committees. Rodney, a mining engineer, has over 35 years of experience in the resources industry. He is currently the Chief Executive Officer of County Coal Limited, an Australian listed company which he joined in July 2012. He was appointed as a Non-Executive Director of Cockatoo Coal Limited which was listed on the Australian Stock Exchange on 6 January 2014. 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 2013 and subsequent to year end
The following movements in the board of directors and the Executive Committee took place during the period 1 January 2013 to 31 December 2013, and subsequent to year-end:
Sipho Pityana was reclassified as a non-executive director with effect from 19 February 2013. Refer Item 7B.: “Related Party Transactions”;
Anthony O’Neill was appointed as an Executive Director to the Board of Directors with effect from 20 February 2013;
Mark Cutifani, Chief Executive Officer, resigned with effect from 31 March 2013;
Srinivasan Venkatakrishnan was appointed as Chief Executive Officer (CEO) with effect from 8 May 2013;
WA Nairn, FB Arisman and F Ohene-Kena retired from the board in termsof AngloGold Ashanti with effect from 13 May 2013;
Richard Duffy was appointed as Chief Financial Officer (CFO) with effect from 1 June 2013;
Michael MacFarlane, EVP – Strategy and Business Planning, resigned with effect from 30 June 2013;
Anthony O’Neill resigned as an Executive Director to the Board of Directors with effect from 19 July 2013;
Tito Mboweni stood down as Chairman of the company’s articlesBoard on 17 February 2014;
Sipho Pityana was elected as Chairman of association,the Board on 17 February 2014;
Prof Wiseman Nkuhlu was appointed as Lead Independent Director on 17 February 2014; and having made themselves available for election to the board, were
David Hodgson was 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.
EXECUTIVE COMMITTEE
Day-to-day management of the company’sgroup’s affairs and for executing the decisions of the board. The committee meets at least monthly and is actively involvedvested in the strategic review ofExecutive Committee, which is chaired by the company’s values, safety performance, operationChief Executive Officer and exploration profilescomprises 10 members. The committee’s work is supported by country and financial status.
In addition to Mr M CutifaniS Venkatakrishnan and Mr S Venkatakrishnan, the two executive directors,R Duffy, the following make uppeople are members of the Executive Committee. The business experienceCommittee:
Ms I Boninelli (57)
MA (Psychology); Post Graduate Diploma in Labour Relations
Executive Vice President: People and functions of the executive committee members ofOrganisational Development
Italia Boninelli joined AngloGold Ashanti on 15 October 2010 as atSenior Vice President: Human Resources, Strategy and Change Management and was appointed to the Executive Committee on 1 December 31, 2010 are as follows.
Dr CE Carter (48),
(51)
BA (Hons), DPhil,; DPhil; EDP
Executive Vice President —President: Strategy and Business Strategy andOrganizational EffectivenessDevelopment
Charles Carter has worked in the mining industry in South Africa and the USAmericas since 1991, in a range of corporate roles with Anglo American Corporation,plc, RFC Corporate Finance and AngloGold Ashanti. He was appointed Executive Vice President — Business Strategy in December 2007is currently accountable for group strategy, corporate finance and isbusiness development, investor relations and corporate communications. Prior to this he was responsible for corporate strategythe company’s business in Colombia and has also previously had executive accountability for 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 of Project ONE’s ongoingONE implementation and integration intocorporate HR. Charles is a director of Rand Refinery Limited and a past Chairman of the business.
179Denver Gold Group.
Mr GJ Ehm (57)
BSc Hons; MAusIMM; MAICD
Executive Vice
Graham Ehm has, since 1979,1977, gained diverse experience in mine operations and project management, covering the nickel, phosphate, copper, uranium and gold sectors. He was appointed General Manager Sunrise Dam Gold Mine in 2000, Regional Head —Head: Australia in 2006 and Executive Vice President —President: Australasia in December 2007. He assumed the role of Executive Vice President —President: Tanzania on 1 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 —President: Australasia.
Mr MP O’Hare (54)
BSc Engineering (Mining)
Chief Operating Officer: South Africa
Mike O’Hare joined Anglo American plc 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 Mine (1998), Great Noligwa Mine (2003), Head of Mining and Mineral Resource Management for Underground African Mines (2006), Vice President: Technical Support for African Mines (2008), Senior Vice President: Operations and Business Planning for South Africa Region (2010), and in 2011, was appointed as Executive Vice President: South Africa Region. Mike has the leadership role as Chief Operating Officer in the South African operations with responsibility for the underground and surface operations and leading three operating regions (West Wits, Vaal River and Surface Operations). He also leads the company’s technology project in South Africa.
Mr RW Largent (50),
(53)
BSc (Min. Eng),Eng.); MBA
Executive Vice President — AmericasChief Operating Officer: International
Ron Largent has been with AngloGold Ashanti since 1994.over 30 years of 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, he was appointed general managerHe joined the company in 1994 as Manager of theGold Operations for Cripple Creek & Victor Gold Mine(CC&V). He was named Vice President (VP) and took upGeneral Manager of the Jerritt Canyon Joint Venture in 2000 and VP and General Manager of CC&V in 2002. In January of 2004 he was named VP for the North America Region followed by his current role asappointment to the position of Executive Vice President —President: Americas in December of 2007.
Mr RL Lazare (54),BA, HED, DPLR, SMP
D Noko (56)
MBA; Senior Executive Programme; Post Graduate Diploma in Company Direction; Higher National Diploma (Engineering)
Executive Vice President: Sustainability
David Noko joined the group in June 2012 and assumed responsibility for social and sustainable development. David’s role includes Executive Vice President: Sustainability, which comprises the disciplines of Health, the Environment, Social and Community Affairs, Corporate Social Investment, Human Rights and Global Security and public affairs. In this role, he sets the company sustainability direction and strategy, positioning sustainability within the company as core to the business, as well as positioning the company externally as a leader within the global sustainability landscape.
As a member of the executive leadership team, David supports the CEO and two Chief Operating Officers in enabling the implementation of the company sustainability strategy, as well as on matters relating to AngloGold Ashanti’s involvement in country-based industry institutions and global institutions relating to sustainable development.
Prior to joining AngloGold Ashanti, David served as the Managing Director of CelaCorp (Pty) Ltd and as the Chief Executive Officer and Managing Director of De Beers Consolidated Mines Ltd. He was previously Vice President —of the Chamber of Mines South Africa,
sustainability issues.
Ms ME Sanz Perez (48)
BCom LLB; H Dip Tax; Admitted Attorney
Executive Vice President — BusinessPresident: Group General Counsel and Technical DevelopmentCompany Secretary
Maria (Ria) Sanz Perez joined AngloGold Ashanti in July 2008 asJune 2011 having worked in a number of industries and major corporate organisations. She has held legal roles at Investec Bank, Basil Read, Afrox and Sappi. She was also Group Head of Sustainability at Sappi. She was appointed Company Secretary in September 2012. Ria’s role is Executive Vice President — BusinessPresident: Group General Counsel and Technical Development, having consulted toCompany Secretary, with accountability for legal affairs, compliance, company secretarial, corporate cost reduction, and integrated reporting. She is also accountable for the company prior to this on its asset portfolio strategy. His extensive career in mining since 1978 included the roleslegal and commercial aspects of executive — operations at Newcrest Mining Limited and executive general manager for gold at Western Mining Corporation.
global procurement.
Ms YZ Simelane (48)
BA LLB; MAP; EMPM
Executive Vice President — Business SustainabilityPresident: Stakeholder Relations and Marketing
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There are no family relationships by blood, marriage or adoption among any of the stock exchanges on which AngloGold Ashanti is listed. She also advisesabove directors and executive committee members of AngloGold Ashanti. There is no arrangement or understanding between any of the board on their dutiesabove directors and responsibilitiesexecutive committee members and any other person pursuant to which he/she was selected as directors.
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)
(51)
MSc (Mining Engineering), BSc (Hons) (Geology), MAusIMM
Vaughan has 25 years28 years’ experience and holds a Bachelor of Science (Honors)(Honours) degree in Geology from the University of Natal and a MastersMaster’s 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 chairmanChairman of the Mineral Resources and Ore Reserves Steering Committee.
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| 6B. | COMPENSATION |
Remuneration Committee and Human Resources Committee (Rem&HR)
The Rem&HR 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.
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 at remunerationof the committee meetings during 2010 is2013 are reflected below:
Members
MJ Kirkwood (Chairman)
TT Mboweni
Prof LW Nkuhlu
SM Pityana
RJ Ruston
The following symbols are used to describe various aspects of meeting attendance:
Remuneration policy
The remuneration policy is deviseddesigned to support this business strategy.
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| 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 | % | ||||||||
Total reward
When determining remuneration AngloGold Ashanti considers all elements of short- and secondly to continued employmentlong-term fixed and variable pay and ensures that it is consistent with the group.
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Executive directors do not receive payment of directors’directors fees or committee feesfees.
Benchmarking
Our executives and travel allowances.
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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 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 | |||||||||||||||||||||||||
2013
| All figures in $000(1) |
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
M Cutifani | Full year | 31 March 2013 | 378 | - | 69 | 199 | 646 | 2,005 | 2,651 | |||||||||||||||||||||||||||
RN Duffy | Full year | 685 | 276 | 139 | 16 | 1,116 | - | 1,116 | ||||||||||||||||||||||||||||
AM O’Neil(5) | 20 February 2013 | 2 August 2013 | 1,066 | - | 15 | 537 | 1,618 | 1,914 | 3,532 | |||||||||||||||||||||||||||
S Venkatakrishnan | Full year | 1,365 | - | 281 | 220 | 1,866 | - | 1,866 | ||||||||||||||||||||||||||||
Total executive directors | 3,494 | 276 | 504 | 972 | 5,246 | 3,919 | 9,165 | |||||||||||||||||||||||||||||
Prescribed officers | ||||||||||||||||||||||||||||||||||||
I Boninelli | Full year | 540 | 384 | 57 | 6 | 987 | - | 987 | ||||||||||||||||||||||||||||
CE Carter | Full year | 671 | 232 | 71 | 51 | 1,025 | 317 | 1,342 | ||||||||||||||||||||||||||||
GJ Ehm | Full year | 764 | 461 | 24 | 8 | 1,257 | - | 1,257 | ||||||||||||||||||||||||||||
RW Largent | Full year | 1,043 | 453 | 173 | 275 | 1,944 | 307 | 2,251 | ||||||||||||||||||||||||||||
M MacFarlane(6) (7) | 30 June 2013 | 238 | - | 30 | 350 | 618 | - | 618 | ||||||||||||||||||||||||||||
DC Noko | Full year | 498 | 187 | 53 | 1 | 739 | - | 739 | ||||||||||||||||||||||||||||
MP O’Hare(8) | Full year | 696 | 283 | 141 | 12 | 1,132 | 54 | 1,186 | ||||||||||||||||||||||||||||
ME Sanz Perez | Full year | 505 | 371 | 54 | 6 | 936 | - | 936 | ||||||||||||||||||||||||||||
YZ Simelane | Full year | 402 | 94 | 82 | 22 | 600 | - | 600 | ||||||||||||||||||||||||||||
Total Prescribed Officers |
| 5,357 | 2,465 | 685 | 731 | 9,238 | 678 | 9,916 | ||||||||||||||||||||||||||||
Total executive director and management remuneration 2013 |
| 8,851 | 2,741 | 1,189 | 1,703 | 14,484 | 4,597 | 19,081 | ||||||||||||||||||||||||||||
2012
| All figures in $000(1) |
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
M Cutifani(9) | Full year | 1,713 | 359 | 351 | 57 | 2,480 | 2,800 | 5,280 | ||||||||||||||||||||||||||
S Venkatakrishnan(9)(10) | Full year | 1,063 | 314 | 209 | 522 | 2,108 | 2,283 | 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(9)(10) | Full year | 684 | 156 | 71 | 291 | 1,202 | 1,058 | 2,260 | ||||||||||||||||||||||||||
RN Duffy(10) | Full year | 755 | 106 | 148 | 326 | 1,335 | - | 1,335 | ||||||||||||||||||||||||||
GJ Ehm(10) | Full year | 688 | 119 | 62 | 175 | 1,044 | - | 1,044 | ||||||||||||||||||||||||||
RW Largent(10) | Full year | 827 | 177 | 191 | 356 | 1,551 | 1,711 | 3,262 | ||||||||||||||||||||||||||
RL Lazare(10)(11) | 31 March 2012 | 173 | 320 | 30 | 374 | 897 | 1,243 | 2,140 | ||||||||||||||||||||||||||
M MacFarlane(6) | 1 June 2012 | 379 | 42 | 27 | - | 448 | - | 448 | ||||||||||||||||||||||||||
DC Noko(12) | 15 June 2012 | 299 | 56 | 37 | 275 | 667 | - | 667 | ||||||||||||||||||||||||||
MP O’Hare | Full year | 687 | 126 | 134 | 48 | 995 | - | 995 | ||||||||||||||||||||||||||
AM O’Neill(10) | Full year | 1,453 | 328 | 39 | 257 | 2,077 | - | 2,077 | ||||||||||||||||||||||||||
ME Sanz Perez(13) | 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 | |||||||||||||||||||||||||||
| (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 |
| (2) | Salaries are disclosed only for the period from or to which office was held. The 2013 salaries for RN Duffy and AM O’Neill are inclusive of salaries as Prescribed Officers and Executive Directors. The salary of S Venkatakrishnan is inclusive of CFO, acting CEO and CEO roles. |
| (3) |
|
| (4) | Includes health care, separation payments, cash in lieu of dividends and personal | |
| (5) | Other benefits of AM O’ Neill include early retirement payments of a pro-rata retention bonus payment and pay in lieu of leave on separation. |
| (6) | M MacFarlane commuted between Canada and South Africa and the company carried the cost of flights and hotel accommodation in South Africa, these are excluded for reporting purposes. |
| (7) |
|
| (8) | MP O’ Hare had a once off pension payment in recognition of previous service paid into the AngloGold Ashanti Pension Fund to the value of R7.4m (less than $1m). This has not been included for reporting purposes. |
| (9) | These executives and prescribed officers applied all of the |
| (10) | Received retention bonus. |
| (11) | Cash paid in lieu of |
| (12) | Received a sign-on bonus. |
| (13) | Received the remainder of sign-on bonus in July 2012 (paid over 24 months). |
Rounding of figures may result in computational discrepancies.
187
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.
188
189
| 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 | ||||||||||||||||||||||||||||||||
| 2013 | 2012 | |||||||||||||||||||||||||||||||||||
| 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) | |||||||||||||||||||||||||||||||||||
S M Pityana (Chairman) | 17 Feb 2014 | 88 | 98 | – | 186 | 64 | 111 | – | 175 | |||||||||||||||||||||||||||
T T Mboweni | 17 Feb 2014 | 292 | 52 | – | 344 | 293 | 64 | – | 357 | |||||||||||||||||||||||||||
FB Arisman | 13 May 2013 | 60 | 51 | 9 | 120 | 85 | 130 | 36 | 251 | |||||||||||||||||||||||||||
R Gasant | 72 | 59 | – | 131 | 67 | 51 | – | 118 | ||||||||||||||||||||||||||||
NP January-Bardill | 70 | 70 | – | 140 | 67 | 79 | – | 146 | ||||||||||||||||||||||||||||
MJ Kirkwood | 1 June 2012 | 107 | 112 | 47 | 266 | 47 | 20 | 27 | 94 | |||||||||||||||||||||||||||
WA Nairn | 13 May 2013 | 39 | 32 | – | 71 | 64 | 114 | – | 178 | |||||||||||||||||||||||||||
Prof LW Nkuhlu | 72 | 112 | – | 184 | 60 | 118 | – | 178 | ||||||||||||||||||||||||||||
F Ohene-Kena | 13 May 2013 | 25 | 13 | 16 | 54 | 55 | 40 | 23 | 118 | |||||||||||||||||||||||||||
RJ Ruston | 83 | 121 | 47 | 251 | 81 | 63 | 45 | 189 | ||||||||||||||||||||||||||||
Total – non-executive directors | 908 | 720 | 119 | 1,747 | 883 | 790 | 131 | 1,804 | ||||||||||||||||||||||||||||
| (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 13 May |
| 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 | ||||||
| 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 | ||||||
Rounding may result in computational differences.
190
| 6C. | BOARD PRACTICES |
The Board of Directors
The following movements to the board’s independence criteria.
Executive directors
The board of AngloGold Ashanti announced the resignation of Chief Executive Officer, Mark Cutifani, effective 31 March 2013. The board further announced the appointment of the then current Chief Financial Officer, Srinivasan Venkatakrishnan, and Executive Vice President: Business & Technical Development, Tony O’Neill, as joint interim Chief Executive Officers.
On 18 February 2013, the board announced the appointment of Tony O’Neill as an executive director of the company with effect from 20 February 2013.
On 8 May 2013, the board announced the appointment of Srinivasan Venkatakrishnan (Venkat) as Chief Executive Officer (CEO) effective immediately.
On 21 May 2013, the board announced the appointment of Richard Duffy as Chief Financial Officer (CFO) with effect from 1 June 2013.
On 15 July 2013, the board announced the resignation of Tony O’Neill as an executive director of the company with effect from 19 July 2013.
Non-executive directors
The following directors retired at the Annual General Meeting held on 13 May 2013: Bill Nairn, Ferdinand Ohene-Kena and Frank Arisman.
Tito Mboweni stood down as independent non-executive chairman of the board on 17 February 2014. Sipho Pityana was unanimously appointed non-executive chairman of the board with effect from 17 February 2014.
Prof LW Nkuhlu was appointed as Lead Independent Director in terms of the recommendations of King III with effect from 17 February 2014.
On 25 March 2014, the board announced the appointment of David Hodgson as an independent, non-executive director with effect from 25 April 2014.
The company’s Memorandum of Incorporation does not set a 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 board retired atindividual director and after a rigorous assessment of the annual general meeting held on May 7, 2010 after servingdirector’s independence and performance.
Non-executive directors do not hold service contracts with 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, skills 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.
Appointment of directors
The board is authorizedauthorised 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. RetirementEligibility for appointment as a director is guided by the Director’s Fit and Proper Standards Policy, requirements of non-executivethe Companies Act, King III and best practice.
Non-executive directors receive fees for their services as directors which are approved by rotation follows a staggered process with one-third of non-executive directors retiringshareholders at least every three years at the annual general meeting. The curriculum vitae of each director standing for election or re-election is made available to shareholdersmeetings. Non-executive directors do not participate in the notice of meeting circulated to shareholders prior to the annual general meeting to assist in their decision-making.
Executive directors have contracts of employment with the company. Details on
Retirement by rotation
At every annual general meeting one-third of the remuneration of executive and non-directors, including executive directors, will retire by rotation, or if their number is not a multiple of three, then the number nearest to but not less than one third. Directors retiring by rotation are presentedeligible for re-election. The directors required to retire at every annual general meeting will be those who have been the longest in “Item 6.B.: Compensation.”
191
Independence of directors receive no further payments from the company.
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.
On 19 February 2013, Sipho Pityana’s status as an independent non-executive director was changed to non-executive director. 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 programme. 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,policy on director independence.
Lead Independent Director
In line with the policy was reviewed and its contents maintained. The policy determining the independencerecommendations of directors can be found at the company’s website atwww.anglogoldashanti.com.
Executive Committee
Day-to-day management of the group’s affairs is vested in the Executive Committee, which is chaired by the non-executive directors onChief Executive Officer and comprises 10 members including the board forms partChief Executive Officer. The committee’s work is supported by country and regional management teams.
On 21 May 2013, a major restructuring of the 2010 performance evaluation of the board.
192
In terms of Section 66(10), read together with regulation 38 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.
193
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). All recently updated Executive Committee contracts include details on participation in the Co-Investment plan and the applicable Minimum Shareholder Requirement (MSR).
South African executives (with the exception of the CEO who is remunerated 100% in South Africa) 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
A number of shareholders holding less than 35% of the company’s issued share capital consorting to gain a majority of the board held its six scheduled meetings and three special meetings to considermake management decisions; and
The contracts of Executive Committee members are either terminated or their role and employment conditions are curtailed.
In the appointmentevent of a new board chairman andchange of control becoming effective, the executive will in certain circumstances be subject to approve various financial transactions that were undertaken byboth the company. In addition, two sub-committee meetings were held to approve various corporate reports including the 2009 annual financial statementsnotice period and the annual report on Form 20-F (US GAAP Report for 2009).
Executive committee member |
| control | ||
Chief Executive Officer |
Chief Financial Officer | 6 months | 6 months | ||||||||||||||||
Other Executive Committee members | 6 months | |||||||||||||||||
194In appointing S Venkatakrishnan as the new CEO the Remuneration and Human Resources Committee increased his notice period from 9 months to 12 months in line with the previous CEO, Mark Cutifani’s, notice period. The Remuneration and Human Resources Committee however reduced the change of control from 24 months to 12 months.
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 2013
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 provide the required strategic leadership.
The following are some key actions and programmes undertaken and implemented by the board in 2013 in fulfilling its functions and responsibilities regarding strategic oversight:
Following the resignation of the former Chief Executive Officer with effect from 1 April 2013, ensured stability of executive management by putting in place interim leadership with the appointment of Messrs AM O’Neill and S Venkatakrishnan as joint group Chief Executive Officers.
Appointment of a new Chief Executive Officer in May 2013.
Appointment of a new Chief Financial Officer in June 2013.
Reviewed board committee structures and mandates to improve their effectiveness and efficiency.
Established a Technical Advisory Group, which will become operational in 2014, to advise the board and management on technical operational matters.
Reviewed the skills set of the board resulting in a decision to recruit an additional director with the requisite technical skills in 2014.
Monitored implementation of strategy by the Executive Committee and assessed progress against set objectives.
Evaluated and approved strategy and ensured business plans were aligned with needs of the business and stakeholders’ expectations.
Discussed and approved management’s budget proposals.
Evaluated performance of the board, individual Non-Executive Directors and Committees.
Adopted a new constitutional document (Memorandum of Incorporation) and recommended it to shareholders for approval as required by the Companies Act No. 71 of 2008, as amended.
Kept abreast with material legal and regulatory developments in operational jurisdictions.
Reviewed and approved a revised group’s Delegation of Authority Policy to improve and facilitate decision-making.
Post year-end, appointed new board Chairman on the retirement of the former Chairman.
The board has established and delegated specific roles and responsibilities to nine10 standing committees and one management committee (the Executive 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 standingboard committees, except the Safety, Health and Environment Committee and the Nominations 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.
All committees meet quarterly in itsaccordance with their terms of reference, approved byexcept 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.
During 2013, of the two ad hoc committees, the chairman of each committee reports on a quarterly basis toFinancial Analysis Committee did not meet and the board on the committee’s deliberations, including decisions taken on behalfParty Political Donations Committee was dissolved and its mandate transferred and included with that of the board. In addition, approved minutes of committeeSocial, Ethics and Transformation Committee.
Attendance at meetings are included inby directors for the board’s meeting packs for information.
| Name of Director | Board | Audcom | Rem&HR | R&II | SHE | SE&T | Invcom | Nomcom | ||||||||||||||||||||||||||
TT Mboweni | 12/12 | – | 5/5 | – | – | – | 4/4 | 5/5 | ||||||||||||||||||||||||||
SM Pityana | 11/12 | – | 4/5 | 4/4 | 4/5 | 4/5 | 4/4 | 5/5 | ||||||||||||||||||||||||||
FB Arisman(1) | 3/4 | 4/5 | 2/3 | 1/2 | 2/3 | – | 1/2 | 2/3 | ||||||||||||||||||||||||||
M Cutifani(2) | 3/3 | – | – | 1/1 | 1/2 | 1/2 | 1/1 | – | ||||||||||||||||||||||||||
RN Duffy(3) | 7/7 | – | – | – | – | – | – | – | ||||||||||||||||||||||||||
R Gasant(4) | 12/12 | 9/10 | – | 4/4 | – | – | 1/1 | 5/5 | ||||||||||||||||||||||||||
NP January-Bardill | 11/12 | 9/10 | – | – | 5/5 | 5/5 | – | 5/5 | ||||||||||||||||||||||||||
MJ Kirkwood(5) | 11/12 | 7/7 | 5/5 | – | – | 5/5 | 4/4 | 5/5 | ||||||||||||||||||||||||||
AM O’Neill(6) | 4/5 | – | – | – | – | – | – | – | ||||||||||||||||||||||||||
WA Nairn(7) | 3/4 | – | 3/3 | 2/2 | 3/3 | 3/3 | 2/2 | 2/3 | ||||||||||||||||||||||||||
Prof LW Nkuhlu(8) | 12/12 | 10/10 | 5/5 | 4/4 | 5/5 | 5/5 | 1/1 | 4/5 | ||||||||||||||||||||||||||
F Ohene-Kena(9) | 3/4 | – | – | – | 1/3 | – | – | 1/3 | ||||||||||||||||||||||||||
RJ Ruston(10) | 11/12 | – | 2/2 | 4/4 | 5/5 | 5/5 | 4/4 | 5/5 | ||||||||||||||||||||||||||
S Venkatakrishnan | 12/12 | – | – | 4/4 | – | – | 4/4 | – | ||||||||||||||||||||||||||
| (1) | Mr Arisman retired from the board on 13 May 2013. |
| (2) | Mr Cutifani resigned as CEO and executive director on 31 March 2013. |
| (3) | Mr Duffy was appointed as CFO and executive director on 1 June 2013. |
| (4) | Mr Gasant was appointed a member and chairman of the Invcom with effect from 1 September 2013. |
| (5) | Mr Kirkwood was appointed to Audcom on 1 April 2013. |
| (6) | Mr O’Neill was appointed as executive director with effect from 20 February 2013 and resigned on 19 July 2013. |
| (7) | Mr Nairn retired from the board on 13 May 2013. |
| (8) | Prof Nkuhlu resigned from the Invcom with effect from 1 April 2013. |
| (9) | Mr Ohene-Kena retired from the board on 13 May 2013. |
| (10) | Mr Ruston was appointed a member of the Rem&HR with effect from 1 July 2013. |
| Key | ||
| Audcom: | Audit and Corporate Governance Committee | |
| Rem&HR: | Remuneration and Human Resources Committee | |
R&II: | Risk and Information Integrity Committee | |
SHE: | Safety, Health and Environment Committee | |
| SE&T: | Social, Ethics and Transformation Committee | |
Invcom: | Investment Committee | |
Nomcom: | Nominations Committee |
Audit and Corporate Governance Committee
The committee ensures the integrity of the Auditfinancial reporting and Corporate Governance Committee, including its chairman, comprises only independent non-executive directors,that appropriate governance processes are in complianceplace. In accordance with best practice recommendations of King III and the Sarbanes-Oxley Act of the United States, and the guidelines of King III. All three 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 functions.
195
196
197
Pursuant to the Companies Act, King III and best practice, in 2013 the committee, deliberatedamong other business:
Reviewed and assessed integrity of published financial statements to ensure their preparation was in accordance with relevant accounting standards and other requirements.
Considered and confirmed the independence of the external audit firm and recommended its re-appointment by shareholders.
Considered and approved the audit fees.
Considered and approved internal and external audit plans and monitored performance against these plans.
Ensured that the internal audit department had the required resources to deliver on its mandate.
Considered internal audit reports and monitored implementation of remedial action to address any adverse findings.
Reviewed and pre-approved non-audit services and related fees in accordance with policy on the strategiesapproval of non-audit services.
Evaluated and methodologiesconfirmed the competence and professionalism of the Chief Financial Officer in accordance with JSE Listing Requirements.
Evaluated the accounting issues that will enhanceimpacted the safetygroup and security of allcompany’s financial statements.
Reviewed major legal cases and disputes that impacted or could impact the company employees,financially.
Reviewed and recommended the Annual Integrated Report 2012, Annual Financial Statements 2012 and 2012 annual report on Form 20-F to the board for approval.
Held closed sessions with external and internal auditors, Group General Counsel and financial management to discuss any issues they may be facing in particular deliberated on the safety concerns faced by the company’s South African mines.
Remuneration and Human Resources Committee meetings — 2010
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.
198
199
Highlights of assets, capital expenditure and projects.
Considered and recommended implementation of a retention scheme for 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.then Chief Executive Officer.
Assisted the board in determining the remuneration of the companynew Chief Executive Officer appointed in May 2013.
Reviewed and approved corporate goals and objectives relevant to review and analyze issues and matters relating to aspectsthe compensation of the executive management.
Approved both short- and long-term executive compensation after evaluating executives’ performance against set targets and consideration of local and international executive remuneration trends.
Pro-actively explained the company’s financial management, including exchange and commodities markets,remuneration policy to major shareholders. At the hedge book management and its reduction strategies, operations cash flow requirements and asset sales.
200annual general meeting, 82% of shareholders voted to endorse the policy.
Appointed an external remuneration advisor to assist the committee in 2011 following Dr TJ Motlatsi’s retirement frombetter understanding trends in executive and non-executive remuneration, both locally and internationally, enabling the board.committee to make informed decisions on the subject.
Devised adjusted metrics for 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.
201shareholder interests.
| 6D. | EMPLOYEES |
202
| 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 | |||||||||
| 2013 | 2012 | 2011 | ||||||||||
South Africa | 32,406 | (1) | 34,186 | 32,082 | ||||||||
Continental Africa | 16,625 | 16,621 | 16,539 | |||||||||
Australasia | 925 | 494 | 509 | |||||||||
Americas | 8,374 | 7,896 | 7,389 | |||||||||
Other, including corporate and non-gold producing subsidiaries | 8,104 | (2) | 6,625 | 4,723 | ||||||||
Total | 66,434 | 65,822 | 61,242 | |||||||||
| * | The number of contractors employed on average during 2013 was 18,275. |
| (1) | The 5% decline in the number employed was a result of cost rationalisation initiatives implemented across the group. |
| (2) | Includes 3,249 employees at Kibali who are working on projects. |
LaborLabour relations and collective bargaining
AngloGold Ashanti recognizesrecognises 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 labororganised labour are founded on mutual respect, and wage negotiations are conducted in line with the company’s values.
Approximately 8393 percent of AngloGold Ashanti’s full-time employees are either members of a union or are otherwise catered for through collective bargaining agreements. Exceptions are the United States andIn Australia, where employees areunion membership is not members of unions,represented, 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 South Africa a two-yeartwo year wage settlementagreement (the 2013 Wage Agreement), through the established gold sector’s centralised collective bargaining forum, overseen by the Chamber of Mines, were successfully concluded with organised labour Unions representing the majority (72%) of employees in the industry after mediation and a 48-hour strike at the Vaal River operations. The terms and conditions were extended to all employees irrespective of union affiliation. The wage agreement included salary increases in the first year, effective 1 July 2013, of 8% for Category 4 and 5 employees (including rockdrill operators) and 7.5% for the balance of the workforce, a living-out allowance increase and an increase linked to South Africa’s rate of inflation in the second year.
Following unprotected and unlawful strike action at the Moab Khotsong mine some 539 employees were dismissed following duly convened disciplinary hearings. As a result litigation in the South Africa Labour Court is still pending.
The prevailing labour relations environment in the South Africa and in the mining industry in particular remains volatile. AngloGold Ashanti however, has built relationships with all unions including the new union AMCU (Association of Mineworkers and Construction Union). This union together with all unions have been integrated into all statutory and ad hoc committees dealing with labour relations and collective bargaining matters.
In Namibia, following the strike in 2012 at Navachab mine, an improvement in labour relations was reachedseen on site, with a number of outstanding issues being resolved and annual wage negotiations concluded amicably.
Union issues are driven by social plan negotiations due to the reduction of mining activities at Sadiola and Yatela. Successful wage negotiations were conducted in July 2009. 2013 with 3% agreed and implemented, and backdated 6 months for employees at these mines and the Bamako office.
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.
In response to the industrial relations environment and the sometimes volatile economic and political contextTanzania, in which the company operates in West Africa, an integrated strategy for collective bargaining is being implemented,2013, 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.
A pro-active approach to laborlabour 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 potentialcontinue to affect relations between the various laborlabour 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.
The increase of salaries for unionised employees in Argentina was finalised in February 2013. The agreement included an increase of 20 percent from February 2013 to June 2013 and 7 percent from July 2013 to January 2014.
In March 2013, CVSA recognised a group level,new union for white collar workers. This union will represent all managers, supervisors and support employees. During the last quarter, this organisation required, from the different companies, a list of issues of their enrolled people. The strategy of companies was to make a collective bargaining agreement through the national chamber of mine and CVSA is an active part of this.
Representation for our contractors (truckers and construction) is still a concern for CVSA, resulting in an undertakingstrikes and movements affecting all mine projects and sites in Santa Cruz. Meetings with the different general managers of the sites in Santa Cruz are being held to promote internationally accepted labor relationsaddress these issues.
In Brazil, AngloGold Ashanti negotiates with three different Unions: Nova Lima Union (which covers 100% of the Cuiaba, Lamego, Queiroz Plant, Rio de Peixe, Administrative and human resource practices at AngloGold Ashanti’s operations aroundMorro Velho employees), Santa Barbara Union (which covers 100% of the world, a global agreement was signed between the International Federation of Chemical, Energy,Corrego do Sitio Mine and General Workers’Plant employees) and Crixas Union (which covers 100% of the Serra Grande employees).
During March, of every year, Brazil operations agree with the different unions (ICEM)regarding the profit sharing for all employees and during August agrees upon the company. The agreement sets out the commitment of both partieswage collective agreements for most employees except senior management. Both negotiations are a legal requirement and subject to respect 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 is to enhance principles or practices established by local regulation and collective bargaining processes at operations managed directly by AngloGold Ashanti. Provision is also made in the agreement for ongoing dialogue between the company and the ICEM at a corporate level.
203renewal every year.
| 6E. | SHARE OWNERSHIP |
The interests of the directors and prescribed officers in the ordinary shares of the company at 31 December 31, 2010 are shown below. There have been no changes2013 which did not individually exceed 1 percent of the company’s issued ordinary share capital, were:
| ||||||||||||||||
| Beneficial | Beneficial | |||||||||||||||
| Direct | Indirect | Direct | Indirect | |||||||||||||
| ||||||||||||||||
| 31 December 2013 | 31 December 2012 | |||||||||||||||
| ||||||||||||||||
Non-executive directors | ||||||||||||||||
FB Arisman | - | - | - | 4,984 | ||||||||||||
MJ Kirkwood | 3,000 | - | - | - | ||||||||||||
LW Nkuhlu | - | 3,000 | - | 800 | ||||||||||||
RJ Ruston(1) | - | 1,000 | - | - | ||||||||||||
| ||||||||||||||||
Total | 3,000 | 4,000 | - | 5,784 | ||||||||||||
| ||||||||||||||||
Executive directors | ||||||||||||||||
RN Duffy | 1,180 | - | - | - | ||||||||||||
M Cutifani | - | - | 61,692 | - | ||||||||||||
AM O’Neil | - | - | - | 7,000 | ||||||||||||
S Venkatakrishnan | 78,437 | - | 52,508 | - | ||||||||||||
| ||||||||||||||||
Total | 79,617 | - | 114,200 | 7,000 | ||||||||||||
| ||||||||||||||||
Company Secretary | ||||||||||||||||
ME Sanz Perez | 1,135 | - | - | - | ||||||||||||
| ||||||||||||||||
Total | 1,135 | - | - | - | ||||||||||||
| ||||||||||||||||
Prescribed officers | ||||||||||||||||
I Boninelli | - | 1,284 | - | - | ||||||||||||
CE Carter | 36,500 | - | 25,078 | - | ||||||||||||
GJ Ehm(2) | 1,213 | - | - | - | ||||||||||||
MP O’Hare | 1,379 | - | - | - | ||||||||||||
RW Largent | 1,910 | - | - | - | ||||||||||||
DC Noko | 615 | - | - | - | ||||||||||||
| ||||||||||||||||
Total | 41,617 | 1,284 | 25,078 | - | ||||||||||||
| ||||||||||||||||
Grand total | 125,369 | 5,284 | 139,278 | 12,784 | ||||||||||||
| ||||||||||||||||
| (1) | Held on the Australian stock exchange as 5,000 CHESS Depository Receipts (5 CDIs are equivalent to 1 ordinary share). |
| (2) | Held on the Australian stock exchange as 6,067 CHESS Depository Receipts (5 CDIs are equivalent to 1 ordinary share). |
DIRECTORS’ INTERESTS IN E ORDINARY SHARES
SM Pityana, non-executive director of AngloGold Ashanti, 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 31 December 2013, Izingwe Holdings held 350,000 E ordinary shares in the issued capital of the company (2012: 700,000 E ordinary shares). This holding is unchanged at the date of this report.
A register detailing directors and prescribed officers’ interests since Decemberin contracts is available for inspection at the company’s registered and corporate office.
CHANGE IN DIRECTOR’S AND PRESCRIBED OFFICER’S INTERESTS IN ANGLOGOLD ASHANTI SHARES SINCE 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 | ||||||
| Date of transaction | Type of transaction | Number of shares | Direct/indirect beneficial holding | |||||||
Executive directors | ||||||||||
RN Duffy | 4 March 2014 | On market purchase of shares | 5,025 | Indirect | ||||||
S Venkatakrishnan | 28 February 2014 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | 2,572 | Direct | ||||||
Company Secretary | ||||||||||
ME Sanz Perez | 28 February 2014 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | 5,520 | Direct | ||||||
| 4 March 2014 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | 851 | Direct | |||||||
Prescribed officers | ||||||||||
GJ Ehm | 21 February 2014 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | 6,000 | Direct | ||||||
MP O’Hare | 28 February 2014 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | 695 | Direct | ||||||
| 5 March 2014 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | 461 | Direct | |||||||
I Boninelli | 28 February 2014 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | 963 | Indirect | ||||||
CE Carter | 28 February 2014 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | 1,287 | Direct | ||||||
DC Noko | 28 February 2014 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | 461 | Direct | ||||||
RW Largent | 24 February 2014 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | 6,600 | Direct | ||||||
YZ Simelane | 28 February 2014 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | 1,440 | Direct | ||||||
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.
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), and 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 11 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 11 May 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 9 June 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 presidentsExecutive Directors, members of the Executive Committee and other management groups of the company and its subsidiaries are given the opportunity to acquire shares in the company. The objective is to incentivizeincentivise such employees to identify themselves more closely with the fortunes of the group, andsupport its continued growth, and to promote the retention of such employees.
Non-Executive Directors are not eligible for participationto participate in the share incentive scheme.
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,of grant, automatically expire.
204
Although the Remuneration and Human Resources Committee has the discretion to incentivizeincentivise employees through the issue of shares, only options or rightsawards have so far been granted.
The type and vesting criteria of the options or rightsawards granted are:
Performance-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.
The granting of performance-related options was approved by shareholders at the annual general meetingAnnual General Meeting held on 30 April 30, 2002 and amended at the annual general meetingAnnual General Meeting held on 29 April 29, 2005 when it was agreed that no further performance relatedperformance-related options would be granted and allgranted. Performance-related options granted hereunder will terminate on 1 November 1, 2014, being the date on which the last options granted under this criteriahereunder may be exercised or they will expire.
Bonus Share Plan (BSP)
The granting of rightsawards in terms of the BSP was approved by shareholders at the annual general meetingAnnual General Meeting held on 29 April 29, 2005 and amended at the general meetingGeneral Meeting held on 6 May 6, 2008 when shareholders approved an increase in the maximum level of the bonus payable to eligible participants, as well as shortening of the vesting period. Executive directors, executive vice presidentsexecutives and other management groups 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 stillremains 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,thereafter, the vesting period has been shortened to two years, with 40 percent of awards granted vesting in year one and 60 percent in year two from the date of grant or, in the event that participants awards remain unexercised after three years from the exercisingoriginal grant date, an additional 20 percent will be granted.
Certain changes were approved at the Extraordinary General Meeting of awards only takes placeshareholders held on 11 March 2013. The 20 percent uplift for the retention of shares for three years fell away but was added to the initial 100 percent resulting in year three, thenan allocation of 120 percent share matching for all categories of awards granted will be available for exercising.
Long-Term Incentive Plan (LTIP)
The granting of rightsawards in terms of the LTIP was approved by shareholders at the annual general meetingAnnual General Meeting held on 29 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 the date of grant, to the extent that the stretchedset company performance targets, under which the rightsawards were granted,made, are met, and provided that the participant is stillremains in the employ of the company orat the date of vesting, unless an event, such as death, retirement or redundancy occurs, which may result in an earlier vesting date.
205
In 2013, the Remuneration and Human Resources Committee approved a new retention bonus scheme comprising both cash (40 percent of total base pay) and shares (60 percent of base pay) which was implemented on 1 March 2013 for the Executive Committee members. This was implemented over the short term to support a strategy of retaining the top management for a minimum period of 18 months to ensure delivery on key business imperatives, while the new Chief Executive Officer was 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 paid at the end of August 2014, based on the achievement of the performance conditions.
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 31 December 31, 20102013 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 1 January 2013 | Granted 2013 | Exercised 2013 | Pre-tax gains on share ($’000) | Lapsed 2013 | Balance as at 31 December 2013(1) | |||||||||||||||||||
Executive Directors | ||||||||||||||||||||||||
M Cutifani(3) | 271,891 | 5,429 | 88,594 | 2,005 | 188,726 | - | ||||||||||||||||||
RN Duffy | 109,648 | 65,193 | - | - | 8,298 | 166,543 | ||||||||||||||||||
AM O’Neill(4) | 150,113 | 124,961 | 129,284 | 1,914 | 145,790 | - | ||||||||||||||||||
S Venkatakrishnan | 136,395 | 99,043 | - | - | 15,045 | 220,393 | ||||||||||||||||||
| 668,047 | 294,626 | 217,878 | 3,919 | 357,859 | 386,936 | |||||||||||||||||||
Prescribed officers(2) | ||||||||||||||||||||||||
I Boninelli | 30,158 | 52,314 | - | - | - | 82,472 | ||||||||||||||||||
CE Carter | 66,331 | 66,929 | 13,609 | 317 | 7,262 | 112,389 | ||||||||||||||||||
GJ Ehm | 68,471 | 59,443 | - | - | 5,452 | 122,462 | ||||||||||||||||||
RW Largent | 56,206 | 76,865 | 12,537 | 306 | 7,461 | 113,073 | ||||||||||||||||||
MP O’Hare | 74,619 | 66,699 | 2,306 | 54 | 5,396 | 133,616 | ||||||||||||||||||
M MacFarlane | - | 42,765 | - | - | 42,765 | - | ||||||||||||||||||
D Noko | - | 45,334 | - | - | - | 45,334 | ||||||||||||||||||
ME Sanz Perez | 21,793 | 46,087 | - | - | - | 67,880 | ||||||||||||||||||
YZ Simelane | 42,969 | 36,218 | - | - | 5,152 | 74,035 | ||||||||||||||||||
Total prescribed officers | 360,547 | 492,654 | 28,452 | 677 | 73,488 | 751,261 | ||||||||||||||||||
Other management | 3,551,735 | 2,533,048 | 684,413 | 12,227 | 850,184 | 4,550,186 | ||||||||||||||||||
Total share incentive scheme | 4,580,329 | 3,320,328 | 930,743 | 16,823 | 1,281,531 | 5,688,383 | ||||||||||||||||||
| (1) | ||
| ||
| (2) | Pursuant to the South African Companies Act 71, of 2008, as amended, which came into effect on 1 May 2011, companies are required to identify and disclose the remuneration for the prescribed officers of the company. |
| (3) | No longer an Executive Director with effect from 31 March 2013. |
| (4) | No longer an Executive Director with effect 15 July 2013 and went on early retirement from 2 August 2013. |
Subsequent to year end and up to 28 February 2014, no options/awards have been exercised by Executive Directors and Prescribed Officers, except for: CE Carter who exercised 4,481 awards for a pre-tax gain of $89k; and RW Largent who exercised 4,790 awards for a pre-tax gain of $101k.
A total of 1,668,617 options/awards out of the 5,688,383 options/awards granted and outstanding at 31 December 2013 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.
Awards granted in 2011 to 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 | ||||||
| Number of awards issued in | Total(1) 2014 | Total(2) 2013 | Total(3) 2012 | |||||||||
Executive Directors | ||||||||||||
M Cutifani(5) | - | 5,429 | 112,183 | |||||||||
S Venkatakrishnan | 166,625 | 99,043 | 52,176 | |||||||||
RN Duffy | 92,361 | 65,193 | 27,790 | |||||||||
AM O’Neill(6) | - | 124,961 | 45,512 | |||||||||
Total executive directors | 258,986 | 294,626 | 237,661 | |||||||||
Prescribed officers | ||||||||||||
I Boninelli | 73,930 | 52,314 | 21,590 | |||||||||
CE Carter | 88,001 | 66,929 | 25,507 | |||||||||
GJ Ehm | 103,913 | 59,443 | 22,286 | |||||||||
RW Largent(4) | 161,509 | 76,865 | 26,083 | |||||||||
RL Lazare(7) | - | - | 1,901 | |||||||||
MP O’Hare | 95,877 | 66,699 | 22,809 | |||||||||
M MacFarlane | - | 42,765 | - | |||||||||
D Noko | 68,178 | 45,334 | - | |||||||||
ME Sanz Perez | 73,107 | 46,087 | 13,387 | |||||||||
TML Setiloane(8) | - | - | 1,263 | |||||||||
YZ Simelane | 39,091 | 36,218 | 13,350 | |||||||||
Total prescribed officers | 703,606 | 492,654 | 148,176 | |||||||||
Total awards to executive management | 962,592 | 787,280 | 385,837 | |||||||||
| (1) | Includes awards granted in respect of the 20% top-up for the 2011 BSP awards. |
| (2) | Includes awards granted in respect of the 20% top-up for the 2010 BSP awards, 2013 BSP matching awards and 2013 LTIP (inclusive of the 60% share retention bonus award; the 40% deferred cash portion will be reported in the year of payment, i.e. 2014). |
Includes awards granted in respect of the 20% top-up for the 2009 BSP awards. |
| (4) |
|
| (5) | No longer an executive director with effect from 31 March 2013. |
| (6) | No longer an executive director with effect from 2 August 2013. |
| (7) | No longer a prescribed officer with effect from 31 March 2012. |
| (8) | No longer a prescribed officer with effect from 31 August 2011. |
206
| 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 1 January 2013 | 92,967 | 2,156,456 | 2,330,906 | 4,580,329 | 8,759,065 | |||||||||||||||
Movement during year | ||||||||||||||||||||
– Granted | - | 1,300,968 | 2,019,360 | 3,320,328 | ||||||||||||||||
– Exercised | (370) | (645,735) | (284,638) | (930,743) | 930,743 | |||||||||||||||
– Lapsed – terminations | (35,715) | (212,802) | (1,033,014) | (1,281,513) | ||||||||||||||||
At 31 December 2013 | 56,882 | 2,598,887 | 3,032,614 | 5,688,383 | 9,689,808 | |||||||||||||||
Average exercise/issue price per share outstanding | ||||||||||||||||||||
Subsequent to year-end | ||||||||||||||||||||
– Granted | - | 1,924,042 | 2,167,474 | 4,091,516 | ||||||||||||||||
– Exercised | - | (171,324) | (44,975) | (216,299) | 216,299 | |||||||||||||||
– Lapsed – terminations | (14,093) | (8,742) | (285,651) | (308,486) | ||||||||||||||||
At 28 February 2014 | 42,789 | 4,342,863 | 4,869,462 | 9,255,114 | 9,906,107 | |||||||||||||||
| (1) | ||
BSP and LTIP awards granted at nil cost to participants. |
Following a change in the Schedule 14 of the JSE Listings Requirements (Share Incentive Schemes) on 15 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.
Also, effective October 15, 2008,as a result of the change to the JSE Listings Requirements, as aforementioned, 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 bya result of this Listings Requirements rule change:
| Details | Options/Awards | ||||
Total number of | 17,000,000 | ||||
Less: | |||||
– Total number of options/awards granted and outstanding at 31 December | |||||
– Total number of options/awards exercised: | |||||
– During the period 15 October | (101,013 | ) | |||
– During the period 1 January | (1,131,916 | ) | |||
– During the period 1 January | (823,411 | ) | |||
– During the period 1 January to 31 December 2011 | (889,593 | ) | |||
– During the period 1 January to 31 December 2012 | (945,641 | ) | |||
– During the period 1 January to 31 December 2013 | (930,743 | ) | |||
Total options/awards available but unissued at 31 December | |||||
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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”);
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 authorizedauthorised and issued share capital of AngloGold at 31 December 31, 2010,2013 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 | Authorised | Issued | ||||||
Ordinary shares | 600,000,000 | 402,628,406 | ||||||
E-Ordinary shares | 4,280,000 | 712,006 | ||||||
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 | |||||||||||||||||||
| 2013 | 2012 | 2011 | ||||||||||||||||||||||
At 1 January | 383,320,962 | 95,830,241 | 382,242,343 | 95,560,586 | 381,204,080 | 95,301,020 | ||||||||||||||||||
Issued during the year: | ||||||||||||||||||||||||
- Settlement of the outstanding 6 percent Mandatory Convertible Subordinated Bonds | 18,140,000 | 4,535,000 | – | – | – | – | ||||||||||||||||||
- Bokamoso ESOP on conversion of E ordinary shares | 145,018 | 36,254 | 84,446 | 21,112 | 60,695 | 15,174 | ||||||||||||||||||
- Izingwe on conversion of E ordinary shares | 91,683 | 22,921 | 48,532 | 12,133 | 39,052 | 9,763 | ||||||||||||||||||
- BEE transaction (as approved by shareholders on 11 May 2011) Bokamoso ESOP | 48,923 | 12,231 | ||||||||||||||||||||||
- Exercise of options by participants in the AngloGold share Incentive Scheme | 930,743 | 232,686 | 945,641 | 236,410 | 889,593 | 222,398 | ||||||||||||||||||
| 402,628,406 | 100,657,102 | 383,320,962 | 95,830,241 | 382,242,343 | 95,560,586 | |||||||||||||||||||
During the period 1 January 1, 20112014 to and including May 24, 2011, 269,7422 April 2014, 514,011 ordinary shares were issued at an average issue price of R279.77R176.35 per share, resulting in 269,742403,142,417 ordinary shares being in issue at May 24, 2011.2 April 2014. Of the 269,742514,011 ordinary shares issued during the period 1 January 1, 20112014 to and including May 24, 2011, no2 April 2014, 3,665 ordinary shares were issued on conversion and cancellation of 685,87614,110 E ordinary shares in accordance with the applicable conversion formula.
208
The following are the movements in the E ordinary issued share capital at 31 December:
| Number of Shares | Rand | Number of Shares | Rand | Number of Shares | Rand | |||||||||||||||||||
| 2013 | 2012 | 2011 | ||||||||||||||||||||||
At 1 January | 1,617,752 | 404,438 | 2,582,962 | 645,741 | 2,806,126 | 701,532 | ||||||||||||||||||
Reinstated | 1,329,164 | 332,291 | ||||||||||||||||||||||
Issued during the year: | ||||||||||||||||||||||||
- Cancelled in exchange for ordinary shares in terms of the cancellation formula | (905,746 | ) | (226,437 | ) | (965,210 | ) | (241,303 | ) | (1,552,328 | ) | (388,082) | |||||||||||||
| 712,006 | 178,001 | 1,617,752 | 404,438 | 2,582,962 | 645,741 | |||||||||||||||||||
On 11 December 11, 2006, shareholders in general meeting authorizedauthorised 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.
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 realizationrealisation 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.
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| 7A. | MAJOR SHAREHOLDERS |
| 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 | |||||||||||||||||||
| Ordinary shares held at | 31 December 2013 | 31 December 2012 | 31 December 2011 | |||||||||||||||||||
| Shareholder* | Number of Shares | percent Voting Rights | Number of Shares | percent Voting Rights | Number of Shares | percent Voting Rights | ||||||||||||||||
Investec Asset Management Pty Limited (South Africa) | 35,614,617 | 8.85 | 20,108,121 | 5.25 | ||||||||||||||||||
First Eagle Investment Management LLC | 33,159,762 | 8.24 | ||||||||||||||||||||
Paulson & Co., Inc | 31,424,135 | 7.80 | 28,607,495 | 7.46 | 32,570,668 | 8.52 | ||||||||||||||||
Public Investment Corp. of South Africa | 30,166,288 | 7.49 | 20,050,361 | 5.23 | ||||||||||||||||||
Van Eck Global | 21,842,177 | 5.42 | ||||||||||||||||||||
Allan Gray Unit Trust Management Limited | 20,510,646 | 5.35 | 24,710,806 | 6.46 | ||||||||||||||||||
* Shares may not necessarily reflect the beneficial shareholder
At 31 December 31, 2010,2013, a total of 182,168,922185,581,840 shares (or 47.7946.09 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.programme. Each American Depositary Share (ADS) is equivalent to one ordinary share. At 31 December 31, 2010,2013, the number of persons who were registered holders of ADSs was reported at 3,675.3,045. 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 31 December 31, 2010,2013, there were 9,04914,823 holders of record of AngloGold Ashanti ordinary shares. Of these holders 365428 had registered addresses in the United States and held a total of 69,99940,190,942 ordinary shares, approximately 0.018410 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, 2011,180,324,85031 March 2014, a total of 187,924,506 ADSs or approximately 47.2746.6 percent of the total issued ordinary share capital, were issued and outstanding and held of record by approximately 3,6042,975 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 |
The groupCompany had the following transactions with related parties during the yearsyear ended 31 December 31, 2010, 2009 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
| At 31 December | 2013 | |||||||
(in millions) | Purchases $ | Amounts $ | ||||||
| Purchases of goods and services (by)/from equity accounted joint ventures and associates | ||||||||
Margaret Water Company | 5 | - | ||||||
Société d’Exploitation des Mines d’Or de Sadiola S.A. | 11 | (3) | ||||||
Société d’Exploitation des Mines d’Or de Yatela S.A. | 2 | - | ||||||
Société des Mines d’Or Morila S.A. | 5 | - | ||||||
Trans-Siberian Gold plc | 2 | - | ||||||
| 25 | (3) | |||||||
As at 31 December 2013 there are no outstanding balances arising from purchases of goods and services owed to related parties.
AngloGold Ashanti entered into an agreement (“Agreement”) with Izingwe Property Managers (Pty) Limited (“Izingwe Property”) under which Izingwe Property assists AngloGold Ashanti in planning, design, development and construction of 200 units of housing in South Africa for employees of AngloGold Ashanti. Izingwe Property’s roles are those of development and project manager and main contractor. The terms of the Agreement, entered into on 19 February 2013, call for payments from AngloGold Ashanti to Izingwe Property in the amount of $5m in consideration for Izingwe Property’s services. To date $1.9m has been paid to Izingwe Property pursuant to the agreement. Mr Sipho Pityana, a non-executive director of the Company, is Chairman and a 44% shareholder in Izingwe Holdings (Pty) Limited (“Izingwe”), AngloGold Ashanti’s BEE partner. Izingwe Capital (Pty) Limited, an associate company of Izingwe is the majority shareholder of Izingwe Property.
Loans due by equity accounted joint ventures and associates for the years endedas at 31 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 | ||||||
2013 $ | ||||
Oro Group (Pty) Limited(1) | 1 | |||
| (1) | The loan bears a market related interest | |
As at 31 December 31, 2010 and 2009,2013 there are no outstanding balances arising from loans owed to related parties.
211
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 $62 million and $39 million, respectively (in each case, including estimated penalties and interest). In November 2006, the administrative council’s second chamber ruled in favour of MSG and fully cancelled the tax liability related to the first period. In July 2011, the administrative council’s second chamber ruled in favour of MSG and fully cancelled the tax liability related to the second period. The State of Goiás then 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 were remitted to the COMEX and the final ruling was in favour of the State of Goiás. MSG believes both assessments are in violation of federal legislation on sales taxes and is considering its options.
The State of Goiás v. Mineração Serra Grande S.A. (MSG): In 2013 the Goiás State Treasury filed claims that formal offenses had been committed by MSG regarding certain tax obligations, specifically the entering of information in certain tax years identifying incorrectly the state in which MSG mined gold. MSG, through a third-party vendor, inadvertently identified another state in the federation, not Goiás, as the production state. The State of Goiás alleges that such procedural errors resulted in an actual loss of revenue to the State, as the Federal government uses the information provided by the company to determine, in part, how much revenue is transferred to the State by the Federal government. The estimated value of the tax challenge is approximately $84 million. MSG filed an administrative challenge at the first level which was denied, and is preparing to file a second administrative challenge appealing the negative ruling.
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 $16 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 $109 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 $19 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 $19 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 and 2011 income tax returns. 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 requested that the tax authority reconsider its finding. The tax authority agreed to review the matter. This review is involved in, amongst other less material matters,anticipated to take twelve months, at the following cases:
SOUTH AFRICA:
Silicosis litigation
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’s favorSupreme Court of Appeal in 2010. In both instances judgement was awarded in favour 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). Mr. Mankayi then lodged a further appeal by Mr Mankayithat 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 3 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 judgement allows such qualifying employee to appeal and simultaneously grantedpursue a civil claim for damages against the Appeal. The effect thereof is thatemployer outside the executorprovisions of Mreither statute. Following the Constitutional Court judgement, 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 it will continue to defend the action. As a result ofMr. Mankayi’s estate agreed legal costs in January 2013.
Following the Constitutional Court decision, AngloGold Ashanti could behas become subject to numerous similarother claims relating to silicosis and other Occupational Lung Diseases (OLD), including potentiallypotential class actions and several individual claims.
Bangumzi Bennet Balakazi and others v. AngloGold Ashanti andBongani Nkala and others v. Harmony Gold Mining Company Ltd., AngloGold Ashanti, Free State Consolidated Gold Mines (Operations) Ltd. and others. On or about 21 August 2012, AngloGold Ashanti was served with an application instituted by wayBangumzi Bennet Balakazi and others in which the applicants sought 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 constituted members of a class for the purpose of proceedings for declaratory relief and claims for damages. On or about 8 January 2013, AngloGold Ashanti and its subsidiary Free State Consolidated Gold Mines (Operations) Limited, along with other mining companies operating in South Africa, were served with an application instituted by Bongani Nkala and others to certify another class consisting of (i) current and former mineworkers who have silicosis (whether or not accompanied by any other disease) and who work or have worked on certain specified gold mines at any time from 1 January 1965, to date; and (ii) the dependants of mineworkers who died as a result of silicosis (whether or not accompanied by any other disease) and who worked on these gold mines at any time after 1 January 1965. AngloGold Ashanti delivered notices of intention to defend against both applications.
On or about 21 August 2013, AngloGold Ashanti, along with several other South African gold mining companies, was served with an application to consolidate the two proposed class actions ofBangumzi Bennet Balakaziandothers v. AngloGold Ashanti andBongani Nkala and others v. Harmony Gold Mining Company Ltd. and others. At the same time, the respondent gold companies were also served with a request to amend the classes identified in these previous applications and to instead certify two classes consisting of (i) current and former mineworkers who have contracted silicosis, and the dependants of mineworkers who died of silicosis (whether or not accompanied by any other disease), where such mineworkers worked for at least two years on one or more of the respondent gold mines after 12 March 1956, whose claims are not amongst those which were determined in the arbitration ofBlom and others v. Anglo American South Africa Ltd. (AASA), and who are not named plaintiffs in another action instituted in the United Kingdom currently underway against AASA; and (ii) who have or similar group claim. These toohad contracted pulmonary tuberculosis, or are the dependants of deceased mineworkers who died of pulmonary tuberculosis (but excluding silico-tuberculosis), where such mineworkers worked for at least two years on one or more of the respondent gold mines after 12 March 1956. For each of the two proposed classes, the applicants alternatively propose the certification of distinct classes for each respondent gold mining company on the same terms. AngloGold Ashanti will defend against the request for certification of these classes in 2014. In the event the
class is certified, such class of workers would be defendedpermitted to institute actions against AngloGold Ashanti for amounts as yet unspecified. AngloGold Ashanti has also delivered a formal request for additional information that it requires to prepare its affidavits in respect of the allegations and the request for certification of a class. AngloGold Ashanti must file an answering affidavit to the certification proposal by 31 May 2014.
Individual claimants’ actions against AngloGold Ashanti. In October 2012, AngloGold Ashanti received a further 31 individual summonses and particulars of claim relating to silicosis and/or other OLD. The total amount claimed in the company31 summonses is R77 million (approximately $7 million). On 22 October 2012, AngloGold Ashanti filed a notice of intention to oppose these claims and adjudicated bytook legal exception to the bysummonses on the Courtsground that certain particulars of claim were unclear. On 4 April 2014, the High Court of South Africa dismissed these exceptions. AngloGold Ashanti intends to continue to defend these cases on their merits.
On or about 3 March 2014, AngloGold Ashanti received an additional 21 individual summonses and particulars of claim relating to silicosis and/or other OLD. The total amount claimed in the 21 summonses is R48 million (approximately $4.5 million). AngloGold Ashanti has filed a notice of intention to oppose these claims.
On or about 24 March 2014, AngloGold Ashanti received a further 686 individual summonses and particulars of claim relating to silicosis and/or other OLD. The total amount claimed in the 686 summonses is R1.1 billion (approximately $109 million). AngloGold Ashanti has filed a notice of intention to oppose these claims.
On or about 1 April 2014, AngloGold Ashanti received a further 518 individual summonses and particulars of claim relating to silicosis and/or other OLD. The total amount claimed in the 518 summonses is R943 million (approximately $90 million). AngloGold Ashanti has filed a notice of intention to oppose these claims.
AngloGold Ashanti cannot predict whether or when more individual claims will be filed in the future or whether the classes described above or other classes will be certified. Should any such claim result in an adverse outcome for AngloGold Ashanti, any such outcome would have an adverse effect on its financial position, which could be material.
AngloGold Ashanti v. Pamodzi Gold (Orkney) (Pty) Limited(Pamodzi) (in Provisional Liquidation) purchased Shafts 1 — 7 from Harmony Gold Mining Company.(Pamodzi): AngloGold Ashanti has provided various servicessold certain mine shafts to Shafts 1 — 7 since it soldanother mining company in 1998 but continued to service them pursuant to the Shafts to ARM in 1998. Despite not havingterms of a written agreement withservice contract. When Pamodzi later purchased the shafts, AngloGold Ashanti provided 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 10 March 10, 2009, prior to AngloGold Ashanti and 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 16 March 2012, Pamodzi (in provisional liquidation) and will be a first chargefour others issued summons against the estate.
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Chamber of Mines of South Africa acting in its own name and o.b.o. Harmony Gold Mining Company Ltd, AngloGold Ashanti Ltd and Sibanye Ltd v AMCU (First Respondent): At the start of 2014, the Association of Mineworkers and Construction Union (AMCU) embarked upon protracted strike action in the platinum sector after reaching deadlock during wage negotiations with Anglo Platinum, Impala Platinum and Lonmin respectively. In the Gold Sector following the extension of the 2013 Wage Agreement to all employees irrespective of their union affiliation AMCU on 20 January 2014 served strike notices at three gold companies to challenge the extension of the 2013 Wage Agreement to members of AMCU. An interim interdict was granted to the Chamber of Mines by the Labour Court in Johannesburg on 30 January 2014, declaring the intended strike unprotected and prohibiting unprotected strike action as well as any conduct that might encourage workers to embark on strike action. AMCU was ordered to return to court on 14 March 2014 to explain why the interim interdict should not be made permanent. This deadline was subsequently postponed to 5 June 2014. For details on the 2013 Wage Agreement, see “Item 6D.: Employees—Labour relations and collective bargaining”.
COLOMBIA
La 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 Hurtardo 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 9 September 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 27 April 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 11 March 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 22 March 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. On 27 May 2013, AGAC’s request to have the injunction order annulled was denied by the Director of Cortolima and, as a result, the injunction remains in place. AGAC has initiated legal proceedings to have the injunction lifted. AngloGold Ashanti anticipates that Cortolima may issue a formal sanction against AGAC. In response, AGAC has filed a disciplinary and criminal complaint against both the Director of Cortolima and its legal counsel based on its approval and issuing of the injunction that AngloGold Ashanti asserts exceeds Cortolima’s authority and is in violation of Colombian law. AGAC has asked the General (Federal) Public Attorney (Procuraduría General) (the “Public Attorney”) to assume control of the case, and has requested a new reconciliation hearing. The Public Attorney is currently investigating the matter. 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 29 April 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 of $75k against AGAC. The company has challenged the finding of the DoE.
As the parties were unable to reach an agreement at a conciliation meeting held on 30 May 2011, AGAC filed an action against the company.DoE in the Administrative Superior Court of the Cundinamarca District to annul the penalties. On 16 April 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, againstsubsidiaries operating in Colombia, which hold singularly or in concert with joint venture partners the Environmental Ministry, as required.
GHANADUBAI:
AngloGold Ashanti v National Labour Commission & 273 Others:v. Thani Investments LLC (TI): In September 2011, AGA made advances totalling $35 million under a loan agreement entered into with Thani Ashanti Alliance Limited (TAAL). The loan was secured inter alia by a guarantee by TI and matured on 31 December 2006, Appiah Agyei Boateng2012.
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 272 others, claiming to beother related parties. In February 2013, at the employeesrequest of AngloGold Ashanti, petitioneda Dubai court issued an order granting the National Labour Commission (NLC) forattachment of a bank account of TI in favour of AngloGold Ashanti. No funds could be recovered from the paymentbank account. On 26 February 2013, AngloGold Ashanti brought in a claim against TI under the guarantee in the Dubai courts. On 17 March 2013, AngloGold Ashanti also brought an action to liquidate TI.
In April 2013, TI lodged an application that objected to the attachment order we obtained with respect to a TI bank account in February 2013 and sought to have it postponed until the main proceedings had been determined. In June 2013, the court rejected TI’s objection and upheld our attachment order. In August 2013, a settlement agreement was concluded between AGA and TI wherein the parties agreed to settle all claims and disputes in relation to the loan and in terms of their gratuities. The basiswhich TI paid the loan amount plus interest back to AGA. AGA subsequently released all security that it held against repayment of their claim was that they were atthe loan and the parties withdrew all material times employees ofcases in the Dubai courts relation to this matter.
GHANA
Westchester Resources Limited (Westchester) / Africore Ghana Limited (Africore) vs. AngloGold Ashanti (Ghana) Limited (AGAG): Westchester and that they have been transferred to Mining and Building Contractors Limited (MBC), an independent construction firm, without their consent and have consequently suffered a diminution in their terms and conditions of service. They were therefore claiming redundancy payments from AngloGold Ashanti. On August 20, 2009Africore (together, the NLC found in favor of the petitioners and ordered AngloGold Ashanti to pay the Petitioners redundancy payments totalling $4.7 million. AngloGold Ashanti then initiated proceedings“plaintiffs”) commenced separate actions in the High Court seeking to haveof Ghana claiming that AGAG breached the NLC decision set aside.exploration agreement they respectively entered into with AGAG on 31 October 2000. The affected workers applied and secured an order from the court joining them to the suit. cases were consolidated.
On April 7,31 March 2011, the High Court gave judgment rulingjudgement in favorfavour of the plaintiffs that the National Labour Commission had the powerand awarded total damages of $17.4 million to determine the matter. By this judgment, the Company is to pay the award as given by the Labour Commission. We are reviewing the possibility of applyingWestchester and Africore jointly for leavebreach of the court to fileagreements and total costs of GHc30,000. On 4 April 2011, AGAG filed an appeal to the Labour Commission’sCourt of Appeal and subsequently applied to the trial court for an order for a stay of execution of the judgement 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 judgement 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 24 October 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 outby 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 time.
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On 3 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 14 March 2011, and allowed AGAG’s application for Staya stay of Executionexecution pending appeal. The records of appeal were settled and directed that it should ensure that the Appeal would be ready for hearing within three months.on 26 November 2012, AGAG filed its written submissions. The CompanyCourt has writtenfixed 30 May 2013, to the Registrar to complete the record of proceedings for onward transmission todeliver its judgement. On 30 May 2013, the Court of Appeal.Appeal upheld the Appeal of AGAG and overturned the judgement of the High Court as well as the decision of the NLC.
Abdul Waliyu and 152 others vs. AngloGold Ashanti (Ghana) Limited (AGAG): AGAG is involved in litigation relating to the Pompora Treatment Plant (PTP), which was decommissioned in 2000, near the Obuasi mine. On 2 April 2013 AGAG received a summons from Abdul Waliyu and 152 others in which the plaintiffs allege that they were or are residents of the Obuasi municipality or its suburbs and that their health has been adversely affected by emissions 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 entered notices of appearance and filed a motion to have the writ set aside for non-disclosure of the addresses of all the plaintiffs. The motion was scheduled to be heard on 20 May 2013, however AGAG was then informed in Court that the plaintiffs had filed an amended writ in which their respective addresses had been provided. AGAG therefore withdrew its motion subject to cost of GHS 1000 against the plaintiffs. We filed our defence to the amended writ on 16th July, 2013.
Frank Adjei Danso & 4 ORS v AGA
The plaintiffs, five executive members of the PTP (AGA) Smoke Effect Association (PASEA), sued AGAG on 24 February 2014 on behalf of themselves and their members (undisclosed number). The plaintiffs claim that they were residents of Tutuka, Sampsonkrom, Anyimadukrom, Korkortesua, Abompekrom, and PTP Residential Quarters, all suburbs of Obuasi, in close proximity to the now decommissioned Pompora Treatment Plant (PTP). The plaintiffs claim damages resulting from dermatological and respiratory problems as well as economic hardships in connection with current and/or historical operation of the PTP. Plaintiffs seek among other relief, an order for a medical screening of the residents within the catchment area and for assessment and payment of compensation. AGAG has filled an entry of appearance and a motion to set aside the writ based on the fact that the plaintiffs are not adequately identified.
Mining and Building Contractors Limited
On 11 October 2011, AngloGold Ashanti (Ghana) Limited (“AGAG”) terminated Mining and Building Contractors Limited’s (“MBC”) underground development agreement, construction on bulkheads agreement and diamond drilling agreement at Obuasi. The parties reached agreement on the terms of the separation and concluded a separation agreement on 8 November 2012.
On 23 July 2013, AGAG was served with a writ issued by MBC claiming a total of $97.4 million. AGA entered an appearance to defend and filed a motion to refer the action to arbitration in accordance with the separation agreements provisions of AGAGs contract with MBC. On 24 October 2013, MBC filed a motion to discontinue the action with liberty to reapply.
On 20 February 2014, AGAG was served with a new writ issued by MBC claiming a total of $97.4 million for breach of contract and other related claims. AGA filed conditional entry of appearance on 28 February 2014 and have filed a motion of stay of proceedings pending arbitration which will be moved on 2 April 2014. On 26 March 2014 MBC filed an affidavit in opposition to AGAG’s notice for stay of proceedings pending arbitration.
Ghanaian tax authorities v. AngloGold Ashanti (Ghana) Limited (AGAG): In Ghana, AGAG received tax assessments of $22.7 million in respect of the 2006-2008 and 2009-2011 tax years, following an audit by the tax authorities related to indirect taxes on various items. AGAG believes that the indirect taxes were not properly assessed and has lodged an objection to the assessment. AGAG has subsequently met with the Commissioner-General and provided its position in writing together with the relevant supporting documentation. AGAG has yet to receive a response from the Commissioner-General.
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 was scheduled to be heard in the Mwanza High Court on 25 April 2013 but the hearing was postponed. The next hearing date is set for 10 June 2014.
GUINEA
Government of Guinea (National Claim Commission) v. Société AngloGold Ashanti Goldfields de Guinée SA (SAG):
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 recognizedrecognised 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. However, in 2014, the company will revert to half-yearly dividend timetables.
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 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.
In general, 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 expenditure and long-term growth, cashcash/debt resources, compliance with the solvency and debt resources,liquidity requirements the Companies Act 2008, the amount of reserves available for a dividend using going concernbased on the going-concern assessment, andany restrictions placed on AngloGold Ashanti by the conditions of debt facilities, the convertible bondprotection of investment grade credit rating and other factors.
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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
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.
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| 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 31 December | High | Low | High | Low | ||||
| (South African cents per ordinary share) | (US dollars per ADS) | |||||||
Annual information | ||||||||
2009 | 36,900 | 23,206 | 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 | ||||
2013 | 26,500 | 11,401 | 31.88 | 11.14 | ||||
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 | ||||
Second quarter | 21,796 | 13,075 | 23.55 | 13.08 | ||||
Third quarter | 15,478 | 11,401 | 15.23 | 11.62 | ||||
Fourth quarter | 16,524 | 11,545 | 16.49 | 11.14 | ||||
2014 | ||||||||
First quarter | 20,952 | 12,187 | 19.53 | 11.36 | ||||
September 2013 | 14,469 | 12,320 | 14.50 | 12.39 | ||||
October 2013 | 16,300 | 12,508 | 16.49 | 12.45 | ||||
November 2013 | 16,524 | 13,226 | 16.12 | 12.97 | ||||
December 2013 | 13,795 | 11,545 | 13.45 | 11.14 | ||||
January 2014 | 16,980 | 12,187 | 14.73 | 11.36 | ||||
February 2014 | 19,850 | 15,789 | 18.48 | 14.23 | ||||
March 2014 | 20,952 | 17,791 | 19.53 | 16.58 | ||||
April 2014(2)
| 18,835 | 17,839 | 17.75 | 16.95 | ||||
| (1) | ||
Each ADS represents one ordinary share. |
| (2) | Through |
See “Item 7A.: Major shareholders” for the number of ADSs outstanding at 31 December 31, 2010.
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| 9C. | MARKETS |
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”.
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| 10A. | SHARE CAPITAL |
Authorised and Issued Shares
At the annual general meeting of shareholders held on 15 May 15, 2009, shareholders approved an increase in the company’s authorizedauthorised ordinary share capital. AngloGold Ashanti’s authorizedauthorised and issued share capital as of 31 December 31, 20102013 and May, 24, 20112 April 2014 (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 | |||||||||
| Title of Class | Authorised | Issued | ||||||||||
| 2 April 2014 | 31 December 2013 | |||||||||||
Ordinary shares at par value of R0.25 each | 600,000,000 | 403,142,417 | 402,628,406 | |||||||||
E ordinary shares at par value of R0.25 each | 4,280,000 | 697,896 | 712,006 | |||||||||
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 31 December 2010 through 31 December 2013.
| Period to | Description | Number of Shares | ||||
31 December 2010 | 381,204,080 | |||||
Ordinary shares issued during 2011 | AngloGold Share Incentive Scheme | 889,593 | ||||
| Employee Share ownership programme – on conversion of E ordinary shares | 99,747 | |||||
| BEE transaction Bokamoso ESOP | 48,923 | |||||
31 December 2011 | 382,242,343 | |||||
Ordinary shares issued during 2012 | AngloGold Share Incentive Scheme | 945,641 | ||||
| Employee Share ownership programme – on conversion of E ordinary shares | 132,978 | |||||
31 December 2012 | 383,320,962 | |||||
Ordinary shares issued during 2013 | AngloGold Share Incentive Scheme | 930,743 | ||||
| Employee Share ownership programme – on conversion of E ordinary shares | 236,701 | |||||
| Conversion of Mandatory Convertible Bond issued in 2010, matured on 15 September 2013 | 18,140,000 | |||||
31 December 2013 | 402,628,406 | |||||
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 11 December 2006, shareholders in general meeting authorised 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 11 May 2011, shareholders approved an amendment to the terms of the BEE transaction by authorising 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 authorised changes to the duration of the scheme.
On 9 June 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.
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| Period to | Description | Number of Shares | ||||||
31 December 2010 | 2,806,126 | |||||||
2011 E-ordinary shares movement | Re-instated | |||||||
| Cancelled and exchanged for ordinary shares | ||||||||
| in accordance with the cancellation formula | ||||||||
31 December | ||||||||
2012 E-ordinary shares movement | Cancelled and exchanged for ordinary shares | |||||||
| in accordance with the cancellation formula | ||||||||
31 December | ||||||||
2013 E-ordinary shares movement | Cancelled and exchanged for ordinary shares | |||||||
| in accordance with the cancellation formula | ||||||||
31 December | ||||||||
Unissued shares
In terms of a general authority from shareholders in annual general meeting, granted on 13 May 2013, the directors of the Company are cancelledauthorised 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 theauthorised but unissued share capital of the company.
| Authorised but unissued ordinary Shares under the control of the directors – amounting to 5 percent of issued shares from time to time | 20,131,420 | |||
| Authorised 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) | 12,177,683 | |||
| 10B. | MEMORANDUM OF INCORPORATION |
On 1 May 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.
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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 businessrequirement for specific “object and purpose” provisions to be included in an MoI and although the new MoI is now silent on the matter, 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 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 CompaniesJSE Listings Requirements, the Act 61 of 1973, as amended, which is referred to asand the Companies Regulations, 2011, promulgated under the Act (Regulations), which include the South African Securities Regulation Code on Take-Overs and Mergers and the JSE Listing 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.Takeover Regulations. 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.
DIRECTORS
The management and control of any business of AngloGold Ashanti is vested in the board of directors who, in addition(board). The authority of the board to their powers undermanage and direct the articlesbusiness and affairs of association, may exercise all powers and do all such acts and things as may be exercisedthe company is not limited, restricted or donequalified 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 RemovalRetirement of Directors
The shareholders of the company have the power to elect the directors, and shareholders are also entitled to elect one or more alternate directors, in accordance with the provisions of the MoI.
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 onlyon a temporary basis until the followingvacancy is filled by election by shareholders entitled to exercise voting rights in such an election.
The MoI authorises the chairman of the board, subject to the written approval of the majority of the directors, to appoint any person as a director provided that such appointment is approved by shareholders at the next shareholders’ meeting or annual general meeting and will then be eligible for re-election. The directors who retire at the 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.
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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.
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.
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Although the interests of directors are not dealt with in the director concerned have not been fairly disclosed.
Share Rights, Preferences and Restrictions
Allotment and Issue of Ordinary Shares
Subject to the JSE Listings Requirements, any unissued ordinary shares can be disposed of or dealt with in such manner as AngloGold Ashanti board 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.
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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. No larger dividend will be declared by shareholders in general meeting than is recommendedliquidity test as provided by the directors.Act and the board passing a resolution acknowledging that such test has been applied and has reasonably concluded that the company would satisfy such test immediately after completing the distribution. Dividends are payable to shareholders registered at a record date that is after the date of declaration.
Although not stated in the MoI, dividends may be declared in any currency at the discretion of the board of directors.board. Currently, dividends are declared in and paid in South African rands, and also paid in Australian dollars, South African rands, Ghanaian cedis or United Kingdom pounds. Dividends paid to registeredRegistered holders of AngloGold Ashanti ADSs are paid dividends 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”.
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. In additionand 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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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.
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.
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 JSE Listings Requirements of the JSE, holders of E ordinary shares will not be counted for categorizationcategorisation purposes in terms of section 9 of the JSE 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 similar 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.
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 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.
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The company is authorised 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:
The directors are authorised, 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.
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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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.
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 of3 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 FormF-6/A (FileNo. 333-133049) on 27 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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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 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.
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.interest on such amounts. 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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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 ADRADS to The Bank of New York Mellon for the purpose of exchanging such ADRADS for uncertificated ADSs. The Bank of New York Mellon will cancel that ADRADS 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 ADRADS 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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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 | ||||||||
| ADS holders must pay: |
| |||||||
$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 |
For: | ||||||||
$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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| If AngloGold Ashanti: | Then: | |||||||
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 Recapitalises, reorganises, 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. | |||||||
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 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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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;
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 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;
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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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.
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.
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.
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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.
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 authorizedauthorised 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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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).
On 20 July 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 2 April 2014, 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 20 July 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 utilisation 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. The group received consent to relax the ratio from 3.0:1 to a maximum of 4.5:1 on its facilities for two testing periods, being 31 December 2013 and 30 June 2014, after which this financial covenant will revert to 3.0:1.
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 19.4.4 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 (including capital flows into and out of the Common Monetary Area) 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.
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 byof 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
Voting rights
There are no limitations imposed by South African law or by the memorandum and articlesMemorandum of associationIncorporation of AngloGold Ashanti on the rights of non-South African shareholders to vote thetheir 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 anythe relevant conditions imposed by the SARB in connection with establishing such a subsidiary or in raising the debt by such subsidiary. For example, 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.
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.
The following discussion summarizessummarises 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 17 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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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.
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.
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.
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 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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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 recognizerecognise 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 recognizedrecognised 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 recognizerecognise 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 itemizesitemises 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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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
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 recognizerecognise 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 realizedrealised 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 realizedrealised 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 recognizerecognise 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 realizedrealised will be based on the exchange rate in effect betweenon the settlement date for the sale, and no exchange gain or loss will be recognizedrecognised 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.
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 recognizedrecognised 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 31 December 31, 20092013 or any prior taxable years and does not expect to become a PFIC in the foreseeable future. If AngloGold Ashanti were characterizedcharacterised as a PFIC for any taxable year, a US holder would suffer adverse tax consequences.
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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.
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.
| 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.
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TREASURY POLICY
Risk management activities within the group are the ultimate responsibility of the board of directors. The chief executive officerChief 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 from its major assets 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 in both the short- and long-term through the adoption of reliable liquidity management 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.
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 | ||
| Monthly | 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 group 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 group is also exposed to certain by-product commodity price risk. In order to manage these risks, the group 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 group 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, theThe group 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.
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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 | ||
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 related to these instruments designated as qualifying hedges are included in net cash provided by operating activitiesreflected in the statementsconsolidated statement of consolidated cash flows.Contracts that contain ‘off-market’ terms that result in the inflow ofsame category as the cash at inception are analogous to borrowing activities and, as such, are treated as financing activities. All current and futureflow 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.
As at 31 December 31, 20102013 and 2012 the Companygroup 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).
Foreign exchange price risk protection agreements
The Company entersgroup, 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’sgroup’s foreign currency hedging activities is to protect the Companygroup from the risk that the eventual cash flows resulting from transactions denominated in US dollars will be adversely affected by changes in exchange rates.
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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 Companygroup 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 minimizingminimising risks.
The Companygroup 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 | — | — | — | — | ||||||||||||||||||||||||||||
| 2013 | 2012 | |||||||||||||||||||||||||||||||||||
| 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 | $ | - | - | 432 | 0.10 | 1 | 2.50 | 611 | 0.30 | |||||||||||||||||||||||||||
| ZAR | 536 | 4.90 | 178 | 3.43 | 780 | 3.55 | 215 | 2.10 | ||||||||||||||||||||||||||||
| AUD | - | - | 32 | 3.00 | - | - | 29 | 3.00 | ||||||||||||||||||||||||||||
| BRL | - | - | 33 | 8.14 | - | - | 34 | 7.51 | ||||||||||||||||||||||||||||
| ARS | - | - | 9 | 18.00 | - | - | 73 | 15.00 | ||||||||||||||||||||||||||||
| NAD | - | - | - | - | - | - | 2 | 4.30 | ||||||||||||||||||||||||||||
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) | |||||||||||||||||||||||||||
| $ | 140 | 5.0 | 3 | 3.2 | 8 | 2.4 | 3,035 | 6.8 | 3,186 | |||||||||||||||||||||||||||
| ZAR | 1,221 | 5.9 | 14 | 9.8 | 827 | 7.2 | 161 | 9.8 | 2,223 | |||||||||||||||||||||||||||
| BRL | 3 | 9.6 | 1 | 4.7 | 2 | 4.7 | 1 | 4.5 | 7 | |||||||||||||||||||||||||||
| ARS | 130 | 22.7 | - | - | - | - | - | - | 130 | |||||||||||||||||||||||||||
| AUD | - | - | 549 | 5.1 | - | - | - | - | 549 | |||||||||||||||||||||||||||
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 | |||||||||||||||||||||
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Fixed for less than one year
| Fixed for between one and three years
| Fixed for greater than three years
| Total Borrowings amount (million) | |||||||||||||||||||||||||
| Currency | Borrowings amount (million) | Effective rate % | Borrowings amount (million) | Effective rate % | Borrowings amount (million) | Effective rate % | ||||||||||||||||||||||
| $ | 140 | 5.0 | 6 | 2.8 | 3,040 | 6.8 | 3,186 | |||||||||||||||||||||
| ZAR | 1,221 | 5.9 | 785 | 7.1 | 217 | 9.8 | 2,223 | |||||||||||||||||||||
| BRL | 3 | 9.6 | 1 | 4.8 | 3 | 4.5 | 7 | |||||||||||||||||||||
| ARS | 130 | 22.7 | - | - | - | - | 130 | |||||||||||||||||||||
| AUD | - | - | 549 | 5.1 | - | - | 549 | |||||||||||||||||||||
Realisation of contracts is dependent upon counterparts’ performance. The Companygroup 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 Companygroup spreads itits business over a number of financial and banking institutions to minimizeminimise 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.
The combined maximum credit risk exposure at balance sheet date amounts to $1$897 million (2009: $335(2012: $1,254 million). Credit risk exposure netted by open derivative positions with counterparts was $nil million (2009: $104 million)(2012: $nil). No set-off is applied to balance sheet amounts due to the different maturity profiles of assets and liabilities.
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’sgroup’s financial instruments, as measured at 31 December 31, 20102013 and 2009,2012, 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 | ||||||||||||
| 31 December 2013 | 31 December 2012 | |||||||||||||||
| (millions) | Carrying $ | Fair value $ | Carrying $ | Fair value $ | ||||||||||||
Cash and cash equivalents | 648 | 648 | 892 | 892 | ||||||||||||
Restricted cash | 77 | 77 | 64 | 64 | ||||||||||||
Short-term borrowings | (213) | (213) | (271) | (271) | ||||||||||||
Short-term borrowings at fair value | (45) | (45) | (588) | (588) | ||||||||||||
Long-term borrowings | (2,325) | (2,138) | (2,724) | (2,871) | ||||||||||||
Long-term borrowings at fair value | (1,308) | (1,308) | - | - | ||||||||||||
Derivatives | - | - | (10) | (10) | ||||||||||||
Listed investments - available for sale | 49 | 49 | 69 | 69 | ||||||||||||
Listed investments - held to maturity | 6 | 8 | 7 | 11 | ||||||||||||
Unlisted investments - available for sale | - | - | 2 | 2 | ||||||||||||
Unlisted investments - held to maturity | 77 | 77 | 89 | 89 | ||||||||||||
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.
Trade and other receivables and trade and other payables
The carrying amounts approximate fair value because of the short-term duration of these instruments.
Investments and other non-current assets
Listed equity investments classified as available-for-sale are carried at fair value while fixed income investments and other non-current assets are carried at amortised cost. The fair value of fixed income investments and other non-current assets has been calculated using market interest rates. The unlisted equity investments are carried at cost or fair value. Unlisted investments for which fair value can be reliably measured are carried at fair value while other unlisted investments for which there is no active market and the fair value cannot be reliably measured are carried at cost.
Borrowings
The $1.25bn 8.500% bonds due 2020 and the mandatory convertible bonds which were settled in September 2013 are carried at fair value. The fair value ofconvertible bonds, settled 99.1% in August 2013 and the convertiblebalance in November 2013, and rated bonds are showncarried at amortised cost and their quotedfair values are their closing market value. Other long-term debt re-pricesvalues at the reporting date. This is included in level 1 of the fair value hierarchy. The interest rate on the remaining borrowings is reset on a short-term floating rate basis, and accordingly the carrying amount approximatesis considered to approximate fair value.
243
Derivatives
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
| ||||||||||
| 31 December 2012 | ||||||||||
Liabilities
| ||||||||||
| (millions) | Balance Sheet location | Non-hedge $ | Total $ | |||||||
| ||||||||||
Option component of convertible bonds | Non-current liabilities - derivatives | (9 | ) | (9) | ||||||
Embedded derivatives | Non-current liabilities - derivatives | (1 | ) | (1) | ||||||
|
| |||||||||
Total derivatives | (10 | ) | (10) | |||||||
| ||||||||||
Gain (loss) on non-hedge derivatives and other commodity contracts recognised
| ||||||||
| Year ended 31 December | ||||||||
| 2013 | 2012 | |||||||
| (millions) | $ | $ | ||||||
| ||||||||
Unrealised | ||||||||
Other commodity contracts | 93 | (35) | ||||||
Embedded derivatives | 1 | - | ||||||
|
| |||||||
Gain (loss) on non-hedge derivatives and other commodity contracts | 94 | (35) | ||||||
|
| |||||||
245
| 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 | |||||||||||||||||
| 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
| ||||||||||||||||
| (millions) | Accumulated other $ | Changes in fair in 2013 $ | Reclassification $ |
Accumulated other $ | ||||||||||||
| ||||||||||||||||
Derivatives designated as | ||||||||||||||||
Capital expenditure | (3 | ) | 1 | - | (2 | ) | ||||||||||
|
| |||||||||||||||
Before tax totals | (3 | ) | 1 | - | (2 | ) | ||||||||||
|
| |||||||||||||||
After tax totals | (2 | ) | 1 | - | (1 | ) | ||||||||||
|
| |||||||||||||||
| ||||||||||||||||
| (millions) | Accumulated other as of 1 January 2012 $ | Changes in fair in 2012 $ | Reclassification $ |
Accumulated other $ | ||||||||||||
| ||||||||||||||||
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 | ) | |||||||||
| 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 | ) | |||||||
| ||||||||||||
| (millions) | 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) | |||||||||
|
| |||||||||||
$1.25bn bonds
The $1.25bn 8.500% bonds due 2020 valuation is primarily linked to market interest rates. A principal partchange of +0.5% and -0.5% in market interest rates will generally impact the fair value of the Company’s management of$1.25bn liability in a stable environment by -$28m and +$29m respectively.
Foreign exchange risk is to monitor the sensitivity of derivative positions
Foreign exchange risk arises on financial instruments that are denominated in the hedge book to changes in the underlying factors, including commodity prices,a 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.
247
| 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) | — | — | — | ||||||||||||
Change in exchange rate | Change in Total | ||||||||
| $M | |||||||||
Debt | |||||||||
ZAR denominated (R/$) | Spot (+R1.50) | (27) | |||||||
ARS denominated (ARS/$) | Spot (+ARS0.5) | (1) | |||||||
AUD denominated | Spot (+ | ||||||||
Change in exchange rate | Change in Total | ||||||||||||
| $M | |||||||||||||
Debt | |||||||||||||
ZAR denominated (R/$) | Spot (-R1.50) | 36 | |||||||||||
ARS denominated (ARS/$) | Spot (-ARS0.5) | 2 | |||||||||||
AUD denominated | Spot | ||||||||||||
248
| 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,
Service | Fees (USD) | |
Issuance of ADSs | ||
| Up 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”.
| 12D.4 | Depositary Payments for 2013 |
For the year ended 31 December 31, 2010,2013, The Bank of New York Mellon, as Depositary, has agreed to reimbursereimbursed AngloGold Ashanti an amount of $798,343 (2009:$1,208,174)$587,059 (2012: $24,220) mainly for contributions towards the company’s investor relations activities (including investor meetings, conferences and fees of investor relations service vendors).
249related expenses.
None.
None.
| (a) | Disclosure Controls and Procedures:As of 31 December |
| (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) |
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;
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 authorisations of management and the Directors of the company; and
Provide reasonable assurance regarding prevention or timely detection of unauthorised 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 OrganizationsOrganisations of the Treadway Commission (COSO) in Internal Control —– Integrated Framework.Framework release in 1992. 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.
On 14 May 2013, COSO released an updated version of Internal Control – Integrated Framework to reflect significant changes in business and operational environments that have occurred since the original framework was introduced in 1992. Although the components of internal control under the revised framework remain unchanged from the original framework, the update introduces 17 new principles that explicitly articulate and describe the components of internal control. Management will be transitioning the evaluation processes to the new framework in 2014.
| (c) | Changes in Internal Control over Financial Reporting: |
There have been no further 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 31 December 2013 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 |
252
Richard Duffy
Chief Financial Officer
Srinivasan Venkatakrishnan
Chief Executive Officer
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 31 December 31, 2010,2013, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) (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. 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 31 December 31, 2010,2013, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the 20102013 consolidated financial statements of AngloGold Ashanti Limited and our report dated May 27, 201114 April 2014 expressed an unqualified opinion thereon.
/s/Ernst & Young Inc.
Ernst & Young Inc.
Registered Auditor
Johannesburg, Republic of South AfricaMay 27, 2011
253
14 April 2014
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 1 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.
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 officerChief Executive Officer, Chief Financial Officer and senior financial officers,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:
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.
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.
254
Ernst & Young Inc. has served as AngloGold Ashanti’s independent public accountants for each of the financial years in the three-year period ended 31 December 31, 20102013, 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 20102013 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 | ||||||
| (in millions) | 2013 $ | 2012 $ | ||||||
Audit fees(1) | 7.97 | 6.83 | ||||||
Audit-related fees(2) | 4.72 | 4.17 | ||||||
Tax fees(3) | 0.48 | 0.39 | ||||||
Total | 13.17 | 11.39 | ||||||
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. | ||
| (2) | Audit-related fees consist of fees billed for assurance and related |
| (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 20102013 were reviewed and approved according to the procedures above. None of the services provided during 20102013 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.
Not applicable.
Neither the issuer nor any affiliate of the issuer purchased any of the company’s shares during 2010.
2552013.
Not applicable.
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 iswas chaired by the independent chairman of the board.
ITEM 16H: MINE SAFETY DISCLOSURE
The NYSE listing standards require that a majorityinformation concerning certain mine safety violations or other regulatory matters required pursuant to Section 1503(a) of the boardDodd-Frank Wall Street Reform and Consumer Protection Act and this Item 16H is included in Exhibit 19.16 to be comprised of independent directors, as such term is defined in the NYSE listing standards, and that the remunerations committee 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 defined in the JSE Listing Requirements, and the remuneration committee of the board is fully independent.
256this annual report on Form 20-F.
The board of directors and stockholders of AngloGold Ashanti Limited
We have audited the accompanying consolidated balance sheetsstatement of financial position of AngloGold Ashanti Limited (the “Company”(“the Company”) as of 31 December 31, 2010, 20092013, 2012 and 20082011, and the related consolidated statements of income, stockholders’comprehensive income, changes in equity and cash flows for each of the three years in the period ended 31 December 31, 2010.2013. 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 did not audit the financial statements of Société d’Exploitation des Mines d’Or de Sadiola S.A.Kibali (Jersey) Limited (“Sadiola”Kibali”), a corporation in which the Company has a 4145 percent (December 31, 2008: 38 percent) interest, have been audited by other auditors for the years ended December 31, 2010 and December 31, 2008 and for the periods then ended, whose reports 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.interest. In the consolidated financial statements, the Company’s investment in SadiolaKibali is stated at $99$1,241 million atand $797 million as of 31 December 31, 20102013 and $97 million at December 31, 2008, the2012, respectively. The Company’s equity in the net income of Kibali is stated at $35$26 million and $2 million for the yearyears ended 31 December 31, 2010,2013 and the Company’s equity in net loss is stated at $52 million for the year ended December 31, 2008.
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 reportsreport of the other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reportsreport of other auditors, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of AngloGold Ashanti Limited at 31 December 31, 2010, 20092013, 2012, and 2008,2011, and the consolidated results of its operations and its cash flows for each of the three years in the period ended 31 December 31, 20102013, in conformity with U.SInternational Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB”).
As discussed in Note 39 to the consolidated financial statements, the Company changed its method of accounting for production stripping costs as a result of the adoption of IFRIC 20 “Stripping Costs in the Production Phase of a Surface Mine”, applied retrospectively from 1 January 2011.
International Financial Reporting Standards as issued by the IASB, vary in certain respects from U.S. generally accepted accounting principles.
We also 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 31 December 31, 2010,2013, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) and our report dated May 27, 201114 April 2014 expressed an unqualified opinion thereon.
/s/ Ernst & Young Inc.
Registered Auditor
Johannesburg, Republic of South AfricaMay 27, 2011
259
14 April 2014
The Board of Directors and stockholders of Societe d’Exploitation des Mines d’Or de Sadiola S.A.:
We have audited the balance sheetaccompanying consolidated statements of Societe d’Exploitation des Mines d’Or de Sadiola S.A. (the company)financial position of Kibali (Jersey) Limited as of 31 December 31, 2010,2013, 2012 and 2011 and the relatedconsolidated statements of comprehensive income, consolidated statements of changes in stockholders’ equity, and consolidated statements of cash flows for each of the year then ended.three years in the period ended 31 December 2013. These financial statements are the responsibility of the Company’scompany’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. AnThe company is not required to have, nor were we engaged to perform, 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.
260
261
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Société des Mines de Morila S.A.Kibali (Jersey) Limited at 31 December 31, 20082013, 2012 and 2011, and the results of its operations and its cash flows for each of the year thenthree years in the period ended 31 December 2013, in conformity with International Financial Reporting Standards as issued by the IASB.
/s/ BDO Stoy Hayward LLP
262
London
United Kingdom
PAGE LEFT BLANK INTENTIONALLY
263
Group – income
FOR THE YEARS ENDED 31 DECEMBER 31, 2010, 20092013, 2012 and 2008(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
| Figures in million | Notes | 2013 | 2012 Restated | 2011 Restated | ||||||||||||
| US Dollars | ||||||||||||||||
Revenue | 3 | 5,708 | 6,632 | 6,925 | ||||||||||||
Gold income | 2,3 | 5,497 | 6,353 | 6,570 | ||||||||||||
Cost of sales | 4 | (4,146) | (3,964) | (3,892) | ||||||||||||
Gain (loss) on non-hedge derivatives and other commodity contracts | 37 | 94 | (35) | (1) | ||||||||||||
Gross profit | 2 | 1,445 | 2,354 | 2,677 | ||||||||||||
Corporate administration, marketing and other expenses | 5 | (201) | (291) | (278) | ||||||||||||
Exploration and evaluation costs | (255) | (395) | (279) | |||||||||||||
Other operating expenses | 6 | (19) | (47) | (31) | ||||||||||||
Special items | 7 | (3,410) | (402) | 163 | ||||||||||||
Operating (loss) profit | (2,440) | 1,219 | 2,252 | |||||||||||||
Dividends received | 3 | 5 | 7 | - | ||||||||||||
Interest received | 3 | 39 | 43 | 52 | ||||||||||||
Exchange gain | 14 | 8 | 2 | |||||||||||||
Finance costs and unwinding of obligations | 8 | (296) | (231) | (196) | ||||||||||||
Fair value adjustment on $1.25bn bonds | (58) | - | - | |||||||||||||
Fair value adjustment on option component of convertible bonds | 9 | 83 | 84 | |||||||||||||
Fair value adjustment on mandatory convertible bonds | 356 | 162 | 104 | |||||||||||||
Share of associates and joint ventures’ (loss) profit | 9 | (162) | (30) | 72 | ||||||||||||
(Loss) profit before taxation | (2,533) | 1,261 | 2,370 | |||||||||||||
Taxation | 12 | 333 | (346) | (737) | ||||||||||||
(Loss) profit for the year | (2,200) | 915 | 1,633 | |||||||||||||
Allocated as follows | ||||||||||||||||
Equity shareholders | (2,230) | 897 | 1,587 | |||||||||||||
Non-controlling interests | 30 | 18 | 46 | |||||||||||||
| (2,200) | 915 | 1,633 | ||||||||||||||
Basic (loss) earnings per ordinary share (cents) | 13 | (568) | 232 | 411 | ||||||||||||
Diluted (loss) earnings per ordinary share (cents) | 13 | (631) | 177 | 355 | ||||||||||||
F - 1
| 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
Group – statement of comprehensive income
| 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 | ||||||||||||
F-3
| Figures in million | 2013 | 2012 Restated | 2011 Restated | |||||||||||||||||
| US Dollars | ||||||||||||||||||||
(Loss) profit for the year | (2,200) | 915 | 1,633 | |||||||||||||||||
Items that will be reclassified subsequently to profit or loss: | ||||||||||||||||||||
Exchange differences on translation of foreign operations | (433) | (92) | (365) | |||||||||||||||||
Share of associates and joint ventures’ other comprehensive loss | - | - | (1) | |||||||||||||||||
Net loss on available-for-sale financial assets | (23) | (27) | (81) | |||||||||||||||||
Release on impairment of available-for-sale financial assets (note 7) | 30 | 16 | 21 | |||||||||||||||||
Release on disposal of available-for-sale financial assets | (1) | - | 1 | |||||||||||||||||
Cash flow hedges | 1 | - | - | |||||||||||||||||
Deferred taxation thereon | 2 | 6 | (8) | |||||||||||||||||
| 9 | (5) | (67) | ||||||||||||||||||
Items that will not be reclassified subsequently to profit or loss: | ||||||||||||||||||||
Actuarial gain (loss) recognised | 69 | (14) | (36) | |||||||||||||||||
Deferred taxation rate change thereon | - | (9) | - | |||||||||||||||||
Deferred taxation thereon | (20) | 3 | 13 | |||||||||||||||||
| 49 | (20) | (23) | ||||||||||||||||||
| �� | ||||||||||||||||||||
Other comprehensive loss for the year, net of tax | (375) | (117) | (456) | |||||||||||||||||
Total comprehensive (loss) income for the year, net of tax | (2,575) | 798 | 1,177 | |||||||||||||||||
Allocated as follows | ||||||||||||||||||||
Equity shareholders | (2,605) | 780 | 1,131 | |||||||||||||||||
Non-controlling interests | 30 | 18 | 46 | |||||||||||||||||
| (2,575) | 798 | 1,177 | ||||||||||||||||||
F - 2
Group – statement of stockholders’ equity
AS AT 31 DECEMBER 2013, 2012 and 2011
| Figures in million | Notes | 2013 | 2012 Restated | 2011 Restated | ||||||||||
| US Dollars | ||||||||||||||
ASSETS | ||||||||||||||
Non-current assets | ||||||||||||||
Tangible assets | 15 | 4,815 | 7,776 | 6,545 | ||||||||||
Intangible assets | 16 | 267 | 315 | 210 | ||||||||||
Investments in associates and joint ventures | 18 | 1,327 | 1,047 | 691 | ||||||||||
Other investments | 19 | 131 | 167 | 186 | ||||||||||
Inventories | 20 | 586 | 610 | 410 | ||||||||||
Trade and other receivables | 22 | 29 | 79 | 76 | ||||||||||
Deferred taxation | 30 | 177 | 97 | 79 | ||||||||||
Cash restricted for use | 23 | 31 | 29 | 23 | ||||||||||
Other non-current assets | 21 | 41 | 7 | 9 | ||||||||||
| 7,404 | 10,127 | 8,229 | ||||||||||||
Current assets | ||||||||||||||
Other investments | 19 | 1 | - | - | ||||||||||
Inventories | 20 | 1,053 | 1,213 | 998 | ||||||||||
Trade and other receivables | 22 | 369 | 472 | 354 | ||||||||||
Cash restricted for use | 23 | 46 | 35 | 35 | ||||||||||
Cash and cash equivalents | 24 | 648 | 892 | 1,112 | ||||||||||
| 2,117 | 2,612 | 2,499 | ||||||||||||
Non-current assets held for sale | 25 | 153 | - | 21 | ||||||||||
| 2,270 | 2,612 | 2,520 | ||||||||||||
Total assets | 9,674 | 12,739 | 10,749 | |||||||||||
EQUITY AND LIABILITIES | ||||||||||||||
Share capital and premium | 26 | 7,006 | 6,742 | 6,689 | ||||||||||
Accumulated losses and other reserves | (3,927) | (1,269) | (1,706) | |||||||||||
Shareholders’ equity | 3,079 | 5,473 | 4,983 | |||||||||||
Non-controlling interests | 28 | 21 | 137 | |||||||||||
Total equity | 3,107 | 5,494 | 5,120 | |||||||||||
Non-current liabilities | ||||||||||||||
Borrowings | 27 | 3,633 | 2,724 | 2,456 | ||||||||||
Environmental rehabilitation and other provisions | 28 | 963 | 1,238 | 782 | ||||||||||
Provision for pension and post-retirement benefits | 29 | 152 | 221 | 195 | ||||||||||
Trade, other payables and deferred income | 31 | 4 | 10 | 14 | ||||||||||
Derivatives | 37 | - | 10 | 93 | ||||||||||
Deferred taxation | 30 | 579 | 1,084 | 1,148 | ||||||||||
| 5,331 | 5,287 | 4,688 | ||||||||||||
Current liabilities | ||||||||||||||
Borrowings | 27 | 258 | 859 | 32 | ||||||||||
Trade, other payables and deferred income | 31 | 820 | 979 | 751 | ||||||||||
Bank overdraft | 24 | 20 | - | - | ||||||||||
Taxation | 32 | 81 | 120 | 158 | ||||||||||
| 1,179 | 1,958 | 941 | ||||||||||||
Non-current liabilities held for sale | 25 | 57 | - | - | ||||||||||
| 1,236 | 1,958 | 941 | ||||||||||||
Total liabilities | 6,567 | 7,245 | 5,629 | |||||||||||
Total equity and liabilities | 9,674 | 12,739 | 10,749 | |||||||||||
F - 3
ANGLOGOLD ASHANTI LIMITED
Group – statement of cash flows
FOR THE YEARS ENDED 31 DECEMBER 2013, 2012 and 2011
| Figures in million | �� Notes | 2013 | 2012 Restated | 2011 Restated | ||||||||||
| US Dollars | ||||||||||||||
Cash flows from operating activities | ||||||||||||||
Receipts from customers | 5,709 | 6,523 | 6,796 | |||||||||||
Payments to suppliers and employees | (4,317) | (4,173) | (3,715) | |||||||||||
Cash generated from operations | 33 | 1,392 | 2,350 | 3,081 | ||||||||||
Dividends received from joint ventures | 18 | 72 | 111 | |||||||||||
Taxation refund | 32 | 23 | 54 | 98 | ||||||||||
Taxation paid | 32 | (187) | (507) | (477) | ||||||||||
Net cash inflow from operating activities | 1,246 | 1,969 | 2,813 | |||||||||||
Cash flows from investing activities | ||||||||||||||
Capital expenditure | ||||||||||||||
- project capital | (594) | (779) | (459) | |||||||||||
- stay-in-business capital | (907) | (1,146) | (1,092) | |||||||||||
Interest capitalised and paid | (5) | (12) | - | |||||||||||
Expenditure on intangible assets | (68) | (79) | (16) | |||||||||||
Proceeds from disposal of tangible assets | 10 | 5 | 19 | |||||||||||
Other investments acquired | (91) | (97) | (147) | |||||||||||
Proceeds from disposal of other investments | 81 | 86 | 91 | |||||||||||
Investments in associates and joint ventures | (472) | (349) | (115) | |||||||||||
Proceeds from disposal of associates and joint ventures | 6 | 20 | - | |||||||||||
Loans advanced to associates and joint ventures | (41) | (65) | (25) | |||||||||||
Loans repaid by associates and joint ventures | 33 | 1 | - | |||||||||||
Dividends received | 5 | 7 | - | |||||||||||
Proceeds from disposal of subsidiary | 34 | 2 | 6 | 9 | ||||||||||
Cash in subsidiary acquired | 34 | - | 5 | - | ||||||||||
Cash in subsidiary disposed | 34 | - | (31) | (11) | ||||||||||
Reclassification of cash balances to held for sale assets | (2) | - | - | |||||||||||
Acquisition of subsidiary and loan | 34 | - | (335) | - | ||||||||||
Increase in cash restricted for use | (20) | (3) | (19) | |||||||||||
Interest received | 23 | 36 | 39 | |||||||||||
Loans advanced | - | �� | (45) | - | ||||||||||
Repayment of loans advanced | - | - | 4 | |||||||||||
Net cash outflow from investing activities | (2,040) | (2,775) | (1,722) | |||||||||||
Cash flows from financing activities | ||||||||||||||
Proceeds from issue of share capital | - | 2 | 10 | |||||||||||
Share issue expenses | - | - | (1) | |||||||||||
Proceeds from borrowings | 2,344 | 1,432 | 109 | |||||||||||
Repayment of borrowings | (1,486) | (217) | (268) | |||||||||||
Finance costs paid | (200) | (145) | (144) | |||||||||||
Acquisition of non-controlling interest | - | (215) | - | |||||||||||
Revolving credit facility and bond transaction costs | (36) | (30) | - | |||||||||||
Dividends paid | (62) | (236) | (169) | |||||||||||
Net cash inflow (outflow) from financing activities | 560 | 591 | (463) | |||||||||||
Net (decrease) increase in cash and cash equivalents | (234) | (215) | 628 | |||||||||||
Translation | (30) | (5) | (102) | |||||||||||
Cash and cash equivalents at beginning of year | 892 | 1,112 | 586 | |||||||||||
Cash and cash equivalents at end of year | 24 | 628 | 892 | 1,112 | ||||||||||
F - 4
ANGLOGOLD ASHANTI LIMITED
Group – statement of changes in equity
FOR THE YEARS ENDED 31 2010, 2009DECEMBER 2013, 2012 and 2008(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 | ||||||||||||||||||||||
| Figures in million | Equity holders of the parent | |||||||||||||||||||||||||||||||||||||||
| Share capital and premium | Other capital | Accumulated losses(2) | Cash flow hedge reserve (3) | Available- for-sale reserve (4) | Actuarial (losses) gains | Foreign currency translation reserve | Total | Non- controlling | Total equity | |||||||||||||||||||||||||||||||
US Dollars | ||||||||||||||||||||||||||||||||||||||||
Balance at 31 December 2010 as previously reported | 6,627 | 194 | (2,750) | (2) | 86 | (62) | (104) | 3,989 | 124 | 4,113 | ||||||||||||||||||||||||||||||
Restated for IFRIC 20 (note 39) | (83) | (83) | (83) | |||||||||||||||||||||||||||||||||||||
Restated for IAS 19 (note 39) | (2) | 2 | - | - | ||||||||||||||||||||||||||||||||||||
Balance at 31 December 2010 - restated | 6,627 | 194 | (2,835) | (2) | 86 | (60) | (104) | 3,906 | 124 | 4,030 | ||||||||||||||||||||||||||||||
Profit for the year | 1,587 | 1,587 | 46 | 1,633 | ||||||||||||||||||||||||||||||||||||
Other comprehensive loss | (1) | (67) | (23) | (365) | (456) | (456) | ||||||||||||||||||||||||||||||||||
Total comprehensive (loss) income | - | (1) | 1,587 | - | (67) | (23) | (365) | 1,131 | 46 | 1,177 | ||||||||||||||||||||||||||||||
Shares issued | 63 | 63 | 63 | |||||||||||||||||||||||||||||||||||||
Share issue expenses | (1) | (1) | (1) | |||||||||||||||||||||||||||||||||||||
Share-based payment for share awards net of exercised | 9 | 9 | 9 | |||||||||||||||||||||||||||||||||||||
Dividends paid (note 14) | (131) | (131) | (131) | |||||||||||||||||||||||||||||||||||||
Dividends of subsidiaries | - | (27) | (27) | |||||||||||||||||||||||||||||||||||||
Translation | (31) | 28 | (1) | 10 | 6 | (6) | - | |||||||||||||||||||||||||||||||||
Balance at 31 December 2011 - restated | 6,689 | 171 | (1,351) | (2) | 18 | (73) | (469) | 4,983 | 137 | 5,120 | ||||||||||||||||||||||||||||||
Profit for the year | 897 | 897 | 18 | 915 | ||||||||||||||||||||||||||||||||||||
Other comprehensive loss | (5) | (20) | (92) | (117) | (117) | |||||||||||||||||||||||||||||||||||
Total comprehensive income (loss) | - | - | 897 | - | (5) | (20) | (92) | 780 | 18 | 798 | ||||||||||||||||||||||||||||||
Shares issued | 53 | 53 | 53 | |||||||||||||||||||||||||||||||||||||
Share-based payment for share awards net of exercised | 15 | 15 | 15 | |||||||||||||||||||||||||||||||||||||
Acquisition of non-controlling interest(5) | (144) | (144) | (71) | (215) | ||||||||||||||||||||||||||||||||||||
Disposal of subsidiary(6) | - | (45) | (45) | |||||||||||||||||||||||||||||||||||||
Dividends paid (note 14) | (215) | (215) | (215) | |||||||||||||||||||||||||||||||||||||
Dividends of subsidiaries | - | (17) | (17) | |||||||||||||||||||||||||||||||||||||
Translation | (9) | 7 | 3 | 1 | (1) | - | ||||||||||||||||||||||||||||||||||
Balance at 31 December 2012 - restated | 6,742 | 177 | (806) | (2) | 13 | (90) | (561) | 5,473 | 21 | 5,494 | ||||||||||||||||||||||||||||||
Loss for the year | (2,230) | (2,230) | 30 | (2,200) | ||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | 1 | 8 | 49 | (433) | (375) | (375) | ||||||||||||||||||||||||||||||||||
Total comprehensive (loss) income | - | - | (2,230) | 1 | 8 | 49 | (433) | (2,605) | 30 | (2,575) | ||||||||||||||||||||||||||||||
Shares issued(7) | 264 | 264 | 264 | |||||||||||||||||||||||||||||||||||||
Share-based payment for share awards net of exercised(8) | (13) | (13) | (13) | |||||||||||||||||||||||||||||||||||||
Dividends paid (note 14) | (40) | (40) | (40) | |||||||||||||||||||||||||||||||||||||
Dividends of subsidiaries | - | (23) | (23) | |||||||||||||||||||||||||||||||||||||
Translation | (28) | 15 | (3) | 16 | - | - | ||||||||||||||||||||||||||||||||||
Balance at 31 December 2013 | 7,006 | 136 | (3,061) | (1) | 18 | (25) | (994) | 3,079 | 28 | 3,107 | ||||||||||||||||||||||||||||||
| (1) | Other capital reserves comprise a surplus on disposal of company shares held by companies prior to the formation of AngloGold Ashanti Limited of $14m (2012: $17m; 2011: $18m), surplus on equity transaction of joint venture of $36m (2012: $36m; 2011: $37m), share of associates and joint ventures’ other comprehensive loss of $2m (2012: $1m; 2011: $1m), equity items for share-based payments of $85m (2012: $123m; 2011: $115m) and other reserves. |
| (2) | ||
Included in accumulated losses are retained earnings totalling $83m (2012: $181m; 2011: $189m) arising at the joint venture operations which may not be remitted without third party consent and gains/losses on the convertible bonds of $709m (2012: $344m; 2011: $99m), which is included in |
| (3) | Cash flow hedge reserve represents the effective portion of |
| (4) | Available-for-sale reserve represents fair value gains or losses on available-for-sale financial assets. |
| (5) | On 28 June 2012, AngloGold Ashanti Limited acquired the remaining 50% shareholding in the Serra Grande mine from Kinross Gold Corporation for $220m less $5m for dividends declared and paid to minorities. |
| (6) | In early December 2012, AngloGold Ashanti Limited disposed of a |
| (7) | Includes share awards exercised and delivery of 18,140,000 shares to |
| (8) | Includes reassessment of |
F-4
F - 5
Notes to the consolidated financial statements
FOR THE YEARS ENDED 31 DECEMBER 31, 2010, 20092013, 2012 and 2008(In millions, except share2011
| 1 | ACCOUNTING POLICIES |
Statement of compliance
The consolidated financial statements are prepared in compliance with International Financial Reporting Standards (IFRS) and per share information)
During the current financial year, the following standards, interpretations and amendments were adopted:
| Regulatory publication | ||||
| Title | periods beginning on | |||
IFRS 7 | Amendment – Disclosures – Offsetting Financial Assets and Financial Liabilities | 1 January 2013 | ||
IFRS 10 | Consolidated Financial Statements | 1 January 2013 | ||
IFRS 11 | Joint Arrangements | 1 January 2013 | ||
IFRS 12 | Disclosure of | 1 January 2013 | ||
IFRS 13 | Fair Value Measurement | 1 January 2013 | ||
IFRSs | Annual Improvements 2009 – 2011 | 1 January 2013 | ||
IAS 1 | Amendment – Presentation of Items of Other Comprehensive Income | 1 July 2012 | ||
IAS 19 | Employee Benefits (revised) | 1 January 2013 | ||
IAS 27 | Separate Financial Statements (Revised 2011) | 1 January 2013 | ||
IAS 28 | Investments in Associates and (Revised 2011) | 1 January 2013 | ||
IAS 36 | Amendment - Recoverable Amount Disclosures for Non-Financial Assets | 1 January 2014 | ||
IFRIC 20 | Stripping Costs in the | |||
1 January 2013 | ||||
Circular 2/2013 | ||||
Headline Earnings | ||||
Annual periods ending | ||||
F-5The adoption of these standards, interpretations and amendments did not have any effect on the financial position or results of the group, except for IFRIC 20 and IAS 19. The adoption of IAS 1, IFRS 12 and IFRS 13 had an effect on disclosures by the group.
IAS 1 amendments were adopted which requires an entity to group other comprehensive income items by those that will be subsequently reclassified and those that will not be subsequently reclassified to profit and loss. The amendment affected presentation and had no impact on the group’s financial position or performance.
IFRIC 20 clarifies when an entity should recognise waste removal costs that are incurred in surface mining activity during the production phase of the mine (“production stripping costs”) as an asset. The interpretation impacts the way in which the group accounts for production stripping costs (refer change in accounting policies Note 39).
F - 6
IAS 19 includes a number of amendments to the accounting for defined benefit plans, including actuarial gains and losses that are now recognised in other comprehensive income (OCI) and permanently excluded from profit and loss; expected returns on plan assets that are no longer recognised in profit or loss, instead, there is a requirement to recognise interest on the net defined benefit liability (asset) in profit or loss, calculated using the discount rate used to measure the defined benefit obligation; and unvested past service costs are now recognised in profit or loss at the earlier of when the amendment occurs or when the related restructuring or termination costs are recognised. Other amendments include new disclosures. In the case of the group, the transition to IAS 19 had no impact on the net defined benefit plan obligations due to the difference in accounting for interest on plan assets (refer change in accounting policies Note 39).
IFRS 10 replaces the guidance on control and consolidation in IAS 27 “Consolidated and Separate Financial Statements”, and SIC-12 “Consolidation – Special Purpose Entities”. In accordance with IFRS 10, the group re-assessed the control conclusion for its investees at 1 January 2013 and concluded that the adoption of IFRS 10 did not result in any change in the consolidation status of its subsidiaries.
Under IFRS 11, joint arrangements are classified as either joint operations or joint ventures depending upon the contractual rights and obligations each investor has rather than the legal structure of the joint arrangement. The group has assessed the nature of its joint arrangements and identified the joint ventures and the joint operations at 1 January 2013 and concluded that the adoption of IFRS 11 did not result in any change in the method of accounting for its joint arrangements. Under IFRS 11, the group is required to account for its joint ventures using the equity method. Joint operations are accounted for by recognition of the joint operator’s interest in the assets, liabilities, revenues and expenses in accordance with the IFRSs applicable to the particular assets, liabilities, revenues and expenses.
The IAS 36 amendments remove the unintended consequences of IFRS 13 on the disclosures required under IAS 36. In addition, these amendments require disclosure of the recoverable amounts for the assets or CGUs for which impairment loss has been recognised or reversed during the period. These amendments are effective retrospectively for annual periods beginning on or after 1 January 2014 with earlier application permitted, provided IFRS 13 is also applied. The group has early adopted these amendments to IAS 36 as it has adopted IFRS 13 and these amendments impact the adoption consequences.
The following accounting standards, amendments to standards and new interpretations (as at 11 March 2014, the last practicable date), which are not yet mandatory, have not been adopted in the current year:
Standard or Interpretation | Title | periods beginning on or after | ||
IFRS 9 | Financial Instruments: Classification and Measurement | 1 January 2015 | ||
IAS 32 | Amendment – Offsetting Financial Assets and Financial Liabilities | 1 January 2014 | ||
IFRS 9 and IFRS 7 | Mandatory Effective Date of IFRS 9 and Transition Disclosures | 1 January 2015 | ||
IFRS 10, 12 and IAS 27 | Investment Entities | 1 January 2014 | ||
IAS 39 | Amendment – Novation of Derivatives and Continuation of Hedge Accounting | 1 January 2014 | ||
IFRIC 21 | Levies | 1 January 2014 | ||
IFRS 14 | Regulatory Deferral Accounts | 1 January 2016 | ||
The group is in the process of assessing the significance of these new standards, amendments to standards and new interpretations.
| 1.1 | ||
BASIS OF PREPARATION |
F-6The financial statements are prepared according to the historical cost convention, except for the revaluation of certain financial instruments to fair value. The group’s accounting policies as set out below are consistent in all material respects with those applied in the previous year, except for the adoption of the new and revised standards and interpretations mentioned above.
The group financial statements are presented in US dollars.
The group financial statements incorporate the financial statements of the company, its subsidiaries and its interests in joint ventures and associates. The financial statements of all material subsidiaries, the Environmental Rehabilitation Trust Fund, joint ventures and associates, are prepared using the same accounting policies as the holding company.
F - 7
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Control would generally exist where the group owns more than 50% of the voting rights, unless the group and other investors collectively control the entity where they must act together to direct the relevant activities. In such cases, as no investor individually controls the entity the investment is accounted for as an equity method investment or a joint operation. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are de-consolidated from the date on which control ceases. The group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the group obtains control over the subsidiary and ceases when the group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the date the group gains control until the date the group ceases to control the subsidiary.
The acquisition of non-controlling interests is reflected as an equity transaction. The entire difference between the cost of the additional interest and the non-controlling interests’ share at the date of acquisition is reflected as a transaction between owners.
Disclosures for non-controlling interests are assessed by reference to consolidated non-controlling interest.
Intra-group transactions, balances and unrealised gains and losses on transactions between group companies, including any resulting tax effect are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
| 1.2 | SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES | |
Use of estimates
The preparation of the financial statements requires the group’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 judgement based on various assumptions and other factors such as historical experience, current and expected economic conditions, and in some cases actuarial techniques. Actual results could differ from those estimates.
The more significant areas requiring the use of management estimates and assumptions relate to Ore Reserve that are the basis of future cash flow estimates and unit-of-production depreciation, depletion and amortisation calculations; environmental, reclamation and closure obligations; estimates of recoverable gold and other materials in heap leach pads; asset impairments/ reversals (including impairments of goodwill); and write-downs of inventory to net realisable value. Other estimates include post-employment, post-retirement and other employee benefit liabilities and deferred taxation.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
As a global company, the group is exposed to numerous legal risks. The outcome of currently pending and future proceedings cannot be predicted with certainty. Thus, an adverse decision in a lawsuit could result in additional costs that are not covered, either wholly or partly, under insurance policies and that could significantly influence the business and results of operations.
The judgements that management has applied in the application of accounting policies, and the estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.
Carrying value of goodwill and tangible assets
The majority of mining assets are amortised using the units-of-production method where the mine operating plan calls for production from a well-defined proven and probable Ore Reserve.
For mobile and other equipment, the straight-line method is applied over the estimated useful life of the asset which does not exceed the estimated mine life based on proven and probable Ore Reserve as the useful lives of these assets are considered to be limited to the life of the relevant mine.
F - 8
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
The calculation of the units-of-production rate of amortisation could be impacted to the extent that actual production in the future is different from current forecast production based on proven and probable Ore Reserve. This would generally arise when there are significant changes in any of the factors or assumptions used in estimating Ore Reserve.
These factors could include:
changes in proven and probable Ore Reserve;
the grade of Ore Reserve may vary significantly from time to time;
differences between actual commodity prices and commodity price assumptions;
unforeseen operational issues at mine sites; and
changes in capital, operating, mining, processing and reclamation costs, discount rates and foreign exchange rates.
Changes in proven and probable Ore Reserve could similarly impact the useful lives of assets amortised on the straight-line method, where those lives are limited to the life of the mine.
The group has a number of surface mining operations that are in the production phase for which production stripping costs are incurred. The benefits that accrue to the group as a result of incurring production stripping costs include (a) ore that can be used to produce inventory and (b) improved access to further quantities of material that will be mined in future periods.
The production stripping costs relating to improved access to further quantities in future periods are capitalised as a stripping activity asset, if and only if, all of the following are met:
It is probable that the future economic benefit (improved access to the ore body) associated with the stripping activity will flow to the group;
The group can identify the component of the ore body for which access has been improved; and
The costs relating to the stripping activity associated with that component or components can be measured reliably.
Components of the various ore bodies at the operations of the group are determined based on the geological areas identified for each of the ore bodies and are reflected in the Ore Reserve reporting of the group. In determining whether any production stripping costs should be capitalised as a stripping activity asset, the group uses three operational guidance measures; two of which relate to production measures, while the third relates to an average stripping ratio measure.
Once determined that any portion of the production stripping costs should be capitalised, the group uses the average stripping ratio of the component or components to which the production stripping costs relate to determine the amount of the production stripping costs that should be capitalised. Stripping activity assets are amortised on the units-of-production method based on the Ore Reserve of the component or components of the ore body to which these assets relate.
This accounting treatment is consistent with that for stripping costs incurred during the development phase of a mine, before production commences, except that stripping costs incurred during the development phase of a mine, before production commences, are amortised on the units-of-production method based on the Ore Reserve of the life of the mine as a whole.
Deferred stripping costs are included in ‘Mine development costs’, within tangible assets. These costs form part of the total investment in the relevant cash-generating unit, which is reviewed for impairment if events or a change in circumstances indicate that the carrying value may not be recoverable. Amortisation of stripping activity assets is included in operating costs.
An individual operating mine is not a typical going-concern business because of the finite life of its reserves. The allocation of goodwill to an individual mine will result in an eventual goodwill impairment due to the wasting nature of the mine reporting unit. In accordance with the provisions of IAS 36 “Impairment of Assets”, the group performs its annual impairment review of assigned goodwill during the fourth quarter of each year.
The group reviews and tests the carrying value of tangible assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected future cash flows used to determine the value in use of goodwill and tangible assets are inherently uncertain and could materially change over time and impact the recoverable amounts. The cash flows and value in use are significantly affected by a number of factors including published reserves, resources, exploration potential and production estimates, together with economic factors such as spot and future gold prices, discount rates, foreign currency exchange rates, estimates of costs to produce reserves and future capital expenditure. Refer note 15 for estimates and assumptions used to calculate recoverable amounts. In addition the group considers the reversal of previously recognised impairments at each reporting date. At the reporting date the group assesses whether any of the indicators which gave rise to previously recognised impairments have changed such that the impairment loss no longer exists or may have decreased. The impairment loss is then assessed on the original factors for reversal and if indicated, such reversal is recognised.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
The recoverable amount is estimated based on the positive indicators. If an impairment loss has decreased, the carrying amount is recorded at the recoverable amount as limited in terms of IAS 36.
The carrying amount of goodwill in the consolidated financial statements at 31 December 2013 was $154m (2012: $195m; 2011: $179m). The carrying amount of tangible assets at 31 December 2013 was $4,815m (2012: $7,776m; 2011: $6,545m). The impairment and derecognition of goodwill and tangible assets recognised in the consolidated financial statements for the year ended 31 December 2013 were $15m (2012: $nil; 2011: $nil) and $2,978m (2012: $356m; 2011: $15m) respectively. No reversals of impairment were recognised during 2013, (2012: nil; 2011:$135m).
Production start date
The group assesses the stage of each mine construction project to determine when a mine moves into the production stage. The criteria used to assess the start date are determined by the unique nature of each mine construction project and include factors such as the complexity of a plant and its location. The group considers various relevant criteria to assess when the mine is substantially complete and ready for its intended use and moves into the production stage. Some of the criteria would include but are not limited to the following:
the level of capital expenditure compared to the construction cost estimates;
completion of a reasonable period of testing of the mine plant and equipment;
ability to produce gold in saleable form (within specifications and the de minimis rule); and
ability to sustain ongoing production of gold.
When a mine construction project moves into the production stage, the capitalisation of certain mine construction costs ceases and costs are either regarded as inventory or expensed, except for capitalisable costs related to mining asset additions or improvements, underground mine development, deferred stripping activities, or Ore Reserve development.
Income taxes
The group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the worldwide provision for income taxes due to the complexity of legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
The group recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets requires the group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the group to realise the net deferred tax assets recorded at the reporting date could be impacted.
Additionally, future changes in tax laws in the jurisdictions in which the group operates could limit the ability of the group to obtain tax deductions in future periods.
Carrying values of the group at 31 December 2013:
deferred tax asset: $177m (2012: $97m; 2011: $79m);
deferred tax liability: $579m (2012: $1,084m; 2011: $1,148m);
taxation liability: $81m (2012: $120m; 2011: $158m); and
taxation asset: $51m (2012: $54m; 2011: $39m).
Unrecognised value of deferred tax assets: $414m (2012: $89m; 2011: $51m).
Provision for environmental rehabilitation obligations
The group’s mining and exploration activities are subject to various laws and regulations governing the protection of the environment. The group recognises management’s best estimate for decommissioning and restoration obligations in the period in which they are incurred. Actual costs incurred in future periods could differ materially from the estimates.
F - 10
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
Additionally, future changes to environmental laws and regulations, life of mine estimates, inflation rates, foreign currency exchange rates and discount rates could affect the carrying amount of this provision.
The carrying amount of the rehabilitation obligations for the group at 31 December 2013 was $728m (2012: $841m; 2011: $747m).
Stockpiles, metals in process and ore on leach pad
Costs that are incurred in or benefit the production process are accumulated as stockpiles, metals in process and ore on leach pads. Net realisable value tests are performed at least annually and represent the estimated future sales price of the product, based on prevailing and long-term metals prices, less estimated costs to complete production and bring the product to sale.
Stockpiles and underground metals in process are measured by estimating the number of tonnes added and removed from the stockpile and from underground, the number of contained gold ounces based on assay data, and the estimated recovery percentage based on the expected processing method. Stockpile and underground ore tonnages are verified by periodic surveys.
Estimates of the recoverable gold on the leach pads are calculated from the quantities of ore placed on the pads based on measured tonnes 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.
Although the quantities of recoverable metal are reconciled by comparing the grades of ore to the quantities of gold actually recovered (metallurgical balancing), the nature of the process inherently limits the ability to precisely monitor recoverability levels. As a result, the metallurgical balancing process is constantly monitored and engineering estimates are refined based on actual results over time.
Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realisable value are accounted for on a prospective basis.
The carrying amount of inventories (excluding finished goods and mine operating supplies) for the group at 31 December 2013 was $1,125m (2012: $1,309m; 2011: $994m).
Recoverable tax, rebates, levies and duties
In a number of countries, particularly in Continental Africa, AngloGold Ashanti Limited is due refunds of indirect tax which remain outstanding for periods longer than those provided for in the respective statutes.
In addition, AngloGold Ashanti Limited has unresolved tax disputes in a number of countries, particularly in Continental Africa and in Brazil. If the outstanding input taxes are not received and the tax disputes are not resolved in a manner favourable to AngloGold Ashanti Limited, it could have an adverse effect upon the carrying value of these assets.
The carrying value of recoverable tax, rebates, levies and duties for the group at 31 December 2013 was $229m (2012: $243m; 2011: $188m).
Pension plans and post-retirement medical obligations
The determination of AngloGold Ashanti Limited’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 include, among others, the discount rate, the expected long-term rate of return of plan assets, health care inflation costs, rates of increase in compensation costs and the number of employees who reach retirement age before the mine reaches the end of its life. While AngloGold Ashanti Limited 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 these assumptions occur.
The carrying value of the defined benefit plans (including the net asset position disclosed under non-current assets) at 31 December 2013 was $111m (2012: $221m; 2011: $192m).
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
Ore Reserve estimates
An Ore Reserve estimate is an estimate of the amount of product that can be economically and legally extracted from the group’s properties. In order to calculate the Ore Reserve, estimates and assumptions are required about a range of geological, technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity demand, commodity prices and exchange rates.
Estimating the quantity and/or grade of the Ore Reserve requires the size, shape and depth of ore bodies to be determined by analysing geological data such as the logging and assaying of drill samples. This process may require complex and difficult geological judgements and calculations to interpret the data.
The group is required to determine and report its Ore Reserve in accordance with the SAMREC code.
Because the economic assumptions used to estimate changes in the Ore Reserve from period to period, and because additional geological data is generated during the course of operations, estimates of the Ore Reserve may change from period to period. Changes in the reported Ore Reserve may affect the group’s financial results and financial position in a number of ways, including the following:
asset carrying values may be affected due to changes in estimated future cash flows;
depreciation, depletion and amortisation charged in the income statement may change where such charges are determined by the units-of-production method, or where the useful economic lives of assets change;
overburden removal costs, including production stripping activities, recorded on the statement of financial position or charged in the income statement may change due to changes in stripping ratios or the units-of-production method of depreciation;
decommissioning site restoration and environmental provisions may change where changes in the estimated Ore Reserve affect expectations about the timing or cost of these activities; and
the carrying value of deferred tax assets may change due to changes in estimates of the likely recovery of the tax benefits.
Development expenditure
Development activities commence after project sanctioning by the appropriate level of management. Judgement is applied by management in determining when a project has reached a stage at which economically recoverable reserves exist such that development may be sanctioned. In exercising this judgement, management is required to make certain estimates and assumptions similar to those described above for capitalised exploration and evaluation expenditure. Any such estimates and assumptions may change as new information becomes available. If, after having started the development activity, a judgement is made that a development asset is impaired, the appropriate amount will be written off to the income statement.
Share-based payments
The group issues equity-settled share-based payments to certain employees and third parties outside the group. 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 as services are rendered over the vesting period, based on the group’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 option-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 behavioural considerations.
The income statement charge for the year was $30m (2012: $66m; 2011: $61m).
Contingencies
By their nature, contingencies will only be resolved when one or more future events occur or fail to occur. The assessment of such contingencies inherently involves the exercise of significant judgement and estimates of the outcome of future events. Such contingencies include, but are not limited to environmental obligations, litigation, regulatory proceedings, tax matters and losses resulting from other events and developments.
Firstly, when a loss is considered probable and reasonably estimable, a liability is recorded in the amount of the best estimate for the ultimate loss. The likelihood of a loss with respect to a contingency can be difficult to predict and determining a meaningful estimate of the loss or a range of loss may not always be practicable based on the information
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
available at the time and the potential effect of future events and decisions by third parties that will determine the ultimate resolution of the contingency. It is not uncommon for such matters to be resolved over many years, during which time relevant developments and new information is continuously evaluated to determine both the likelihood of any potential loss and whether it is possible to reasonably estimate a range of possible losses. When a loss is probable but a reasonable estimate cannot be made, disclosure is provided.
In determining the threshold for disclosure on a qualitative and quantitative basis, management considers the potential for a disruptive effect on the normal functioning of the group and/or whether the contingency could impact investment decisions. Such qualitative matters considered are reputational risks, regulatory compliance issues and reasonable investor considerations. For quantitative purposes an amount of $20m, has been considered.
Litigation and other judicial proceedings as a rule raise difficult and complex legal issues and are subject to uncertainties and complexities including, but not limited to, the facts and circumstances of each particular case, issues regarding the jurisdiction in which each suit is brought and differences in applicable law. Upon resolution of any pending legal matter, the group may be forced to incur charges in excess of the presently established provisions and related insurance coverage. It is possible that the financial position, results of operations or cash flows of the group could be materially affected by the unfavourable outcome of litigation.
| 1.3 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Equity-accounted investments
Joint ventures
A joint venture is an entity in which the group holds a long-term interest and which the group and one or more other ventures jointly control under a contractual arrangement, that provides for strategic, financial and operating policy decisions relating to the activities requiring unanimous consent of the parties sharing control. The group’s interests in joint arrangements classified as joint ventures are accounted for using the equity method.
Profits and losses realised in connection with transactions between the group and joint ventures are eliminated in proportion to share ownership. Such profits and losses are deducted from the group’s equity and related statement of financial position amount and released in the group accounts when the assets are effectively realised outside the group. Dividends received from joint ventures are included in operating activities in the cash flow statement.
Associates
The equity method of accounting is used for an investment over which the group exercises significant influence and normally owns between 20% and 50% of the voting equity. Associates are equity-accounted from the effective date of acquisition to the effective date of disposal. If necessary, impairment losses on the equity value are reported under share of profit and loss from investments accounted for using the equity method.
Profits and losses realised in connection with transactions between the group and associated companies are eliminated in proportion to share ownership. Such profits and losses are deducted from the group’s equity and related statement of financial position amount and released in the group accounts when the assets are effectively realised outside the group. Dividends received from associates are included in investing activities in the cash flow statement.
As the group only has significant influence, it is unable to obtain reliable information at reporting period on a timely basis. The results of associates are equity-accounted from their most recent audited annual financial statements or unaudited interim financial statements, all within three months of the year end of the group. Adjustments are made to the associates’ financial results for material transactions and events in the intervening period.
Joint ventures and associates
Any losses of equity-accounted investments are brought to account in the consolidated financial statements until the investment in such investments is written down to zero. Thereafter, losses are accounted for only insofar as the group is committed to providing financial support to such investees.
The carrying value of equity-accounted investments represents the cost of each investment, including goodwill, balance outstanding on loans advanced if the loan forms part of the net investment in the investee, any impairment losses recognised, the share of post-acquisition retained earnings and losses, and any other movements in reserves. The carrying value of equity-accounted investments is reviewed when indicators arise and if any impairment in value has occurred; it is recognised in the period in which the impairment arose.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
Business combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. Acquisition-related costs are expensed as incurred and included in administrative expenses. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the gain is recognised in profit or loss.
Unincorporated joint ventures – joint operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the use of assets and obligations for the liabilities of the arrangement. The group accounts for activities under joint operations by recognising in relation to the joint operation, the assets it controls and the liabilities it incurs, the expenses it incurs and the revenue from the sale or use of its share of the joint operations output.
Foreign currency translation
Functional currency
Items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic environment in which the entity operates (the ‘functional currency’).
Transactions and balances
Foreign currency transactions are translated into the functional currency using the approximate exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at the reporting period exchange rate of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except for hedging derivative balances that are within the scope of IAS 39 “Financial Instruments: Recognition and Measurement”. Translation differences on these balances are reported as part of their fair value gain or loss.
Translation differences on non-monetary items, such as equities classified as available-for-sale financial assets, are included in other comprehensive income within equity.
Group companies
The results and financial position of all group entities (none of which has the currency of a hyperinflationary economy) 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 at the reporting date;
retained earnings are converted at historical average exchange rates;
assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;
income and expenses for each income statement presented are translated at monthly 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 rates prevailing at the date of the transaction);
all resulting exchange differences are recognised in other comprehensive income and presented as a separate component of equity (foreign currency translation); and
other reserves, other than those translated above, are converted at the closing rate at each reporting date. These resulting exchange differences are recognised in retained earnings.
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 other comprehensive income on consolidation. For the company, the exchange differences on such monetary items are reported in the company income statement.
When a foreign operation is sold, such exchange differences are recognised in the income statement as part of the gain or loss on sale.
Goodwill and fair value adjustments arising from the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
Segment reporting
An operating segment is a business activity whose results are regularly reviewed by the chief operating decision maker in order to make decisions about resources to be allocated to it and to assess its performance and for which discrete financial information is available. The chief operating decision maker has been determined to be the Executive Committee.
Tangible assets
Tangible assets are recorded at cost less accumulated amortisation and impairments/reversals. Cost includes pre-production expenditure incurred during the development of a mine and the present value of related future decommissioning costs.
Interest on borrowings relating to the financing of major capital projects under construction is capitalised during the construction phase as part of the cost of the project. Such borrowing costs are capitalised over the period during which the asset is being acquired or constructed and borrowings have been incurred. Capitalisation ceases when construction is interrupted for an extended period or when the asset is substantially complete. Other borrowing costs are expensed as incurred.
If there is an indication that the recoverable amount of any of the tangible assets is less than the carrying value, the recoverable amount is estimated and an allowance is made for the impairment in value.
Subsequent costs are included in the asset’s carrying amount only when it is probable that future economic benefits associated with the asset will flow to the group, and the cost of the addition can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.
To the extent a legal or constructive obligation to a third party exists, the acquisition cost includes estimated costs of dismantling and removing the asset and restoring the site. A change in estimated expenditures for dismantling, removal and restoration is added to and/or deducted from the carrying value of the related asset. To the extent that the change would result in a negative carrying amount, this effect is recognised as income. The change in depreciation charge is recognised prospectively.
For assets amortised on the units-of-production method, amortisation is calculated to allocate the cost of each asset to its residual value over its estimated useful life.
For those assets not amortised on the units-of-production method, amortisation is calculated over their estimated useful life as follows:
buildings up to life of mine;
plant and machinery up to life of mine;
equipment and motor vehicles up to five years;
computer equipment up to three years; and
leased assets over the shorter of the period of the lease and the useful life.
Major renovations are depreciated over the remaining useful life of the related asset or to the date of the next major renovation, whichever is sooner.
Assets are amortised to residual values. Residual values and useful lives are reviewed, and adjusted if appropriate, at the beginning of each financial year.
Gains and losses on disposals are determined by comparing net sale proceeds with the carrying amount. These are included in the income statement.
Mine development costs
Capitalised mine development costs include expenditure incurred to develop new ore bodies, to define further mineralisation in existing ore bodies and, to expand the capacity of a mine. Mine development costs include acquired proven and probable Ore Reserve at cost at the acquisition date. These costs are amortised from the date on which commercial production begins.
Depreciation, depletion and amortisation of mine development costs are computed by the units-of-production method based on estimated proven and probable Ore Reserve. The proven and probable Ore Reserve reflects estimated quantities of reserves which can be recovered economically in the future from known mineral deposits.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
Capitalised mine development costs also include stripping activity assets relating to production stripping activities incurred in the production phase of open-pit operations of the group. Once determined that any portion of the production stripping costs should be capitalised, the group uses the average stripping ratio and the average mine costs per tonne of the component to which the production stripping costs relate to determine the amount of the production stripping costs that should be capitalised. Stripping activity assets are amortised on a units-of-production method based on the Ore Reserve of the component of the ore body to which these assets relate.
The average stripping ratio is calculated as the number of tonnes of waste material expected to be removed during the life of the component per tonne of ore mined from the component or components. The average mine cost per tonne of the component is calculated as the total expected costs to be incurred to mine the relevant component of the ore body, divided by the number of tonnes expected to be mined from the component. The average mine stripping ratio and the average mine cost per tonne of the component to which the stripping activity asset relates are recalculated annually in the light of additional knowledge and changes in estimates.
Mine infrastructure
Mine plant facilities, including decommissioning assets, are amortised using the lesser of their useful life or units-of-production method based on estimated proven and probable Ore Reserve. Other tangible assets comprising vehicles and computer equipment are depreciated by the straight-line method over their estimated useful lives.
Land and assets under construction
Land and assets under construction are not depreciated and are measured at historical cost less impairments.
Mineral rights and dumps
Mineral rights are amortised using the units-of-production method based on the estimated proven and probable Ore Reserve. Dumps are amortised over the period of treatment.
Exploration and evaluation assets
All exploration costs are expensed until it is concluded that a future economic benefit will more likely than not be realised. In evaluating if expenditures meet this criterion to be capitalised, several different sources of information are used depending on the level of exploration. While the criterion for concluding that expenditure should be capitalised is always probable, the information used to make that determination depends on the level of exploration.
Costs on greenfields sites, being those where the group does not have any mineral deposits which are already being mined or developed, are expensed as incurred until the group is able to demonstrate that future economic benefits are probable, which generally will be the establishment of proven and probable Ore Reserve 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 group is able to demonstrate that future economic benefits are probable, which generally will be the establishment of increased proven and probable Ore Reserve after which the expenditure is capitalised 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 mineralisation of such mineral deposits, are capitalised as a mine development cost.
Costs relating to property acquisitions are capitalised within development costs.
Intangible assets
Acquisition and goodwill arising thereon
Where an investment in a subsidiary, joint venture or an associate is made, any excess of the consideration transferred over the fair value of the attributable Mineral Resource including value beyond proven and probable, exploration properties and net assets is recognised as goodwill. Goodwill in respect of subsidiaries is disclosed as goodwill. Goodwill relating to equity-accounted joint ventures and associates is included within the carrying value of the investment which is tested for impairment when indicators exist.
Goodwill relating to subsidiaries is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units for the purpose of impairment testing.
F - 16
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
Royalty rate concession
The royalty rate concession with the government of Ghana was capitalised at fair value at agreement date. Fair value represents a present value of future royalty rate concessions over 15 years. The royalty rate concession has been assessed to have a finite life and is amortised on a straight-line method over a period of 15 years, the period over which the concession runs. The related amortisation expense is charged through the income statement. This intangible asset is tested for impairment when there is an indicator of impairment.
Software
Software purchased, including direct costs associated with customisation and installation of the software, is capitalised.
Internally-developed software is capitalised when it meets the criteria for capitalisation. Other software development expenditure is charged to the income statement when incurred. Software is amortised on a straight-line basis over its useful life which is determined to be the lesser of the licence period of the software; the manufacturer’s announced upgrade that management intends to implement; or 3 years. Useful lives are reviewed, and adjusted if appropriate, at the beginning of each financial year.
Impairment of assets
Intangible assets that have an indefinite useful life and separately recognised goodwill are not subject to amortisation and are tested annually for impairment and whenever events or changes in circumstance indicate that the carrying amount may not be recoverable. Assets that are subject to amortisation are tested for impairment whenever events or changes in circumstance indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
Impairment calculation assumptions include life of mine plans based on prospective reserves and resources, management’s estimate of the future gold price, based on current market price trends, foreign exchange rates, and a pre-tax discount rate adjusted for country and project risk. It is therefore reasonably possible that changes could occur which may affect the recoverability of tangible and intangible assets.
Leased assets
Assets subject to finance leases are capitalised at the lower of their fair value or the present value of minimum lease payments measured at inception of the lease with the related lease obligation recognised at the same amount. Capitalised leased assets are depreciated over the shorter of their estimated useful lives and the lease term. Finance lease payments are allocated using the rate implicit in the lease, 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.
Non-current assets held for sale
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as having been met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell.
Exploration and research expenditure
Pre-licence costs are recognised in profit or loss as incurred. Exploration and research expenditure is expensed in the year in which it is incurred. These expenses include: geological and geographical costs, labour, Mineral Resource and exploratory drilling costs.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
Inventories
Inventories are valued at the lower of cost and net realisable value after appropriate allowances for redundant and slow moving items. Cost is determined on the following bases:
metals in process are valued at the average total production cost at the relevant stage of production;
gold doré/bullion is valued on an average total production cost method;
ore stockpiles are valued at the average moving cost of mining and stockpiling the ore. Stockpiles are classified as a non-current asset where the stockpile exceeds current processing capacity;
by-products, which include uranium oxide and sulphuric acid, are valued using an average total production cost method. By-products are classified as a non-current asset where the by-products on hand exceed current processing capacity;
mine operating supplies are valued at average cost; and
heap leach pad materials are measured on an average total production cost basis. The cost of materials on the leach pad from which metals are expected to be recovered in a period longer than 12 months is classified as a non-current asset.
A portion of the related depreciation, depletion and amortisation charge is included in the cost of inventory.
Provisions
Provisions are recognised when the group has a present obligation, whether legal or constructive, because 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. Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement is recognised only when the reimbursement is virtually certain. The amount to be reimbursed is recognised as a separate asset. Where the group has a joint and several liability with one or more other parties, no provision is recognised to the extent that those other parties are expected to settle part or all of the obligation.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the obligation at the reporting 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.
Litigation and administrative proceedings are evaluated on a case-by-case basis considering the information available, including that of legal counsel, to assess potential outcomes. Where it is considered probable that an obligation will result in an outflow of resources, a provision is recorded for the present value of the expected cash outflows if these are reasonably measurable. These provisions cover the estimated payments to plaintiffs, court fees and the cost of potential settlements.
AngloGold Ashanti Limited does not recognise a contingent liability on its statement of financial position except in a business combination where the contingent liability represents a possible obligation. A contingent liability is disclosed when the possibility of an outflow of resources embodying economic benefits is not remote.
Employee benefits
Pension obligations
Group companies operate various pension schemes. The schemes are funded through payments to insurance companies or trustee-administered funds, determined by periodic actuarial calculations. The group has both defined benefit and defined contribution plans. A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.
A defined contribution plan is a pension scheme under which the group pays fixed contributions into a separate entity. The group has no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in current and prior periods. The contributions are recognised as employee benefit expenses when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future contribution payments is available.
The asset/liability recognised in the statement of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the reporting date less the fair value of plan assets, together with adjustments for past service costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The value of any defined benefit asset recognised is restricted to the sum of any past service cost and the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.
F - 18
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are immediately recorded in other comprehensive income.
Other post-employment benefit obligations
Some group companies provide post-retirement health care benefits to their retirees. The entitlement to these benefits is usually conditional on the employee remaining in service up to retirement age and completion of a minimum service period. 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. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recorded in other comprehensive income immediately. These obligations are valued annually by independent qualified actuaries.
Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. An entity shall recognise a liability and expense for termination benefits at the earlier of the following dates: (a) when the entity can no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is within the scope of IAS 37 and involves the payment of termination benefits. The group recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; 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 12 months after reporting date are discounted to present value.
Profit-sharing and bonus plans
The group recognises a liability and an expense for bonuses and profit-sharing, based on a formula that takes into consideration the profit attributable to the group’s shareholders after certain adjustments. The group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
Share-based payments
The group’s management awards certain employee bonuses in the form of equity-settled share-based payments on a discretionary basis.
The fair value of the equity instruments granted is calculated at measurement date, for transactions with employees this is at grant date. For transactions with employees, fair value is based on market prices of the equity instruments granted, if available, taking into account the terms and conditions upon which those equity instruments were granted. If market prices of the equity instruments granted are not available, the fair value of the equity instruments granted is estimated using an appropriate valuation model. Vesting conditions, other than market conditions, are not taken into account when estimating the fair value of shares or share options at measurement date.
Over the vesting period, the fair value at measurement date is recognised as an employee benefit expense with a corresponding increase in other capital reserves based on the group’s estimate of the number of instruments that will eventually vest. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. Vesting assumptions for non-market conditions are reviewed at each reporting date to ensure they reflect current expectations.
When options are exercised or share awards vest, the proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium.
Where the terms of an equity settled award are modified, as a minimum, an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification which increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of the modification.
Environmental expenditure
The group has long-term remediation obligations comprising decommissioning and restoration liabilities relating to its past operations which are based on the group’s environmental management plans, in compliance with current environmental and regulatory requirements. Provisions for non-recurring 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
F - 19
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
range of possible outcomes. The 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 prior experience in remediation of contaminated sites.
Contributions for the South African operations are made to Environmental Rehabilitation Trust Funds, created in accordance with local statutory requirements where applicable, to fund the estimated cost of rehabilitation during and at the end of the life of a mine. The amounts contributed to the trust funds are accounted for as non-current assets in the company. Interest earned on monies paid to rehabilitation trust funds is accrued on a time proportion basis and is recorded as interest income. For group purposes, the trusts are consolidated.
Decommissioning costs
The provision for decommissioning represents the cost that will arise from rectifying damage caused before production commences. Accordingly, a provision and a decommissioning asset is recognised and included within mine infrastructure.
Decommissioning costs are provided at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices. The unwinding of the decommissioning obligation is included in the income statement. Estimated future costs of decommissioning obligations are reviewed regularly and adjusted as appropriate for new circumstances or changes in law or technology. Changes in estimates are capitalised or reversed against the relevant asset. Estimates are discounted at a pre-tax rate that reflects current market assessments of the time value of money.
Gains or losses from the expected disposal of assets are not taken into account when determining the provision.
Restoration costs
The provision for restoration represents the cost of restoring site damage after the start of production. Changes in the provision are recorded in the income statement as a cost of production.
Restoration costs are estimated at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices and adjusted for risks specific to the liability. The estimates are discounted at a pre-tax rate that reflects current market assessments of the time value of money.
Revenue recognition
Revenue is recognised at the fair value of the consideration received or receivable to the extent that it is probable that economic benefits will flow to the group and revenue and costs can be reliably measured. The following criteria must also be present:
the sale of mining products is recognised when the significant risks and rewards of ownership of the products are transferred to the buyer;
dividends and royalties are recognised when the right to receive payment is established;
interest is recognised on a time proportion basis, taking account of the principal outstanding and the effective rate over the period to maturity, when it is determined that such income will accrue to the group; and
where a by-product is not regarded as significant, revenue is credited against cost of sales, when the significant risks and rewards of ownership of the products are transferred to the buyer.
Taxation
Deferred taxation is provided on all qualifying temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax assets are only recognised to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future and future taxable profit will be available against which the temporary difference can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date.
Deferred tax assets and liabilities are measured at future anticipated tax rates, which have been enacted or substantively enacted at the reporting date.
Current and deferred tax is recognised as income or expense and included in profit or loss for the period, except to the extent that the tax arises from a transaction or event which is recognised, in the same or a different period in other comprehensive income or directly in equity, or a business combination that is an acquisition.
F - 20
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
Current tax is measured on taxable income at the applicable statutory rate enacted or substantively enacted at the reporting date.
Special items
Items of income and expense that are material and require separate disclosure, in accordance with IAS 1.97, are classified as special items on the face of the income statement. Special items that relate to the underlying performance of the business are classified as operating special items and include impairment charges and reversals. Special items that do not relate to underlying business performance are classified as non-operating special items and are presented below operating profit (loss) on the income statement.
Dividend distribution
Dividend distribution to the group’s shareholders is recognised as a liability in the group’s financial statements in the period in which the dividends are declared by the board of directors of AngloGold Ashanti Limited.
Financial instruments
Financial instruments are initially measured at fair value when the group becomes a party to their contractual arrangements. Transaction costs are included in the initial measurement of financial instruments, except financial instruments classified as at fair value through profit or loss. The subsequent measurement of financial instruments is dealt with below.
A financial asset is derecognised when the right to receive cash flows from the asset has expired or the group has transferred its rights to receive cash and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.
On derecognition of a financial asset, the difference between the proceeds received or receivable and the carrying amount of the asset is included in profit or loss.
On derecognition of a financial liability, the difference between the carrying amount of the liability extinguished or transferred to another party and the amount paid is included in profit or loss.
Regular way purchases and sales of all financial assets and liabilities are accounted for at settlement date.
Derivatives and hedge accounting
The group enters into derivatives to ensure a degree of price certainty and to guarantee a minimum revenue on a portion of future planned gold production. In addition, the group enters into derivatives to manage interest rate and currency risk.
The method of recognising fair value gains and losses depends on whether derivatives are classified as held for trading or are designated as hedging instruments, and if the latter, the nature of the risks being hedged. The group designates derivatives as either hedges of the variability in highly probable future cash flows attributable to a recognised asset or liability, or a forecast transaction (cash flow hedges); or hedges of the fair value of recognised asset or liability or a firm commitment (fair value hedges).
For cash flow hedges, the effective portions of fair value gains or losses are recognised in other comprehensive income until the hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting or when the hedge transactions affect earnings. Any cumulative gain or loss existing in equity at that time remains in equity until the forecast transaction is recognised in the income statement. If a hedge of a forecast transaction subsequently results in the recognition of a non-financial asset or liability, the associated cumulative gains and losses that were recognised directly in other comprehensive income are reclassified into earnings in the same periods during which the asset acquired or the liability assumed affects earnings for the period.
When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in other comprehensive income is immediately transferred to the income statement. The ineffective portion of fair value gains and losses is reported in earnings in the period to which they relate. For fair value hedges, the gain or loss from changes in fair value of the hedged item is reported in earnings, together with the offsetting gains and losses from changes in fair value of the hedging instrument.
F - 21
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
All other derivatives are classified as held for trading and are subsequently measured at their estimated fair value, with the changes in estimated fair value in the statement of financial position as either a derivative asset or derivative liability, including translation differences, at each reporting date being reported in earnings in the period to which it relates. Fair value gains and losses on these derivatives are included in gross profit in the income statement.
Commodity-based (normal purchase or normal sale) derivative contracts that meet the requirements of IAS 39 are recognised in earnings when they are settled by physical delivery.
The estimated fair values of derivatives are determined at discrete points in time based on the relevant market information. These estimates are calculated with reference to the market rates using industry standard valuation techniques.
Other investments
Listed equity investments and unlisted equity investments, other than investments in subsidiaries, joint ventures, and associates, are classified as available-for-sale financial assets and subsequently measured at fair value. Listed investments’ fair values are calculated by reference to the quoted selling price at the close of business on the reporting date. Fair values for unlisted equity investments are estimated using methods reflecting the economic circumstances of the investee. Equity investments for which fair value cannot be measured reliably are recognised at cost less impairment. Changes in fair value are recognised in other comprehensive income in the period in which they arise. These amounts are removed from equity and reported in income when the asset is derecognised or when there is objective evidence that the asset is impaired based on a significant or prolonged decrease in the fair value of the equity instrument below its cost.
Investments which management has the intention and ability to hold to maturity are classified as held-to-maturity financial assets and are subsequently measured at amortised cost using the effective interest rate method. If there is evidence that held-to-maturity financial assets are impaired, the carrying amount of the assets is reduced and the loss recognised in the income statement.
Other non-current assets
Loans and receivables are subsequently measured at amortised cost using the effective interest rate method. If there is evidence that loans and receivables are impaired, the carrying amount of the assets is reduced and the loss recognised in the income statement.
Post-retirement assets are measured according to the employee benefits policy.
Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less accumulated impairment. Impairment of trade and other receivables is established when there is objective evidence as a result of a loss event that the group will not be able to collect all amounts due according to the original terms of the receivables. Objective evidence includes failure by the counterparty to perform in terms of contractual arrangements and agreed terms. The amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Impairments relate to specific accounts whereby the carrying amount is directly reduced. The impairment is recognised in the income statement.
Cash and cash equivalents
Cash and cash equivalents are defined as cash on hand, demand deposits and short-term, highly liquid investments which are readily convertible to known amounts of cash and subject to insignificant risk of changes in value. They are measured at amortised cost which is deemed to be fair value as they have a short-term maturity.
Cash restricted for use
Cash which is subject to legal or contractual restrictions on use is classified separately as cash restricted for use.
Financial liabilities
Financial liabilities, other than derivatives and liabilities classified as at fair value through profit or loss, are subsequently measured at amortised cost, using the effective interest rate method.
F - 22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
Financial liabilities permitted to be designated on initial recognition as being at fair value through profit or loss are recognised at fair value, with transaction costs being recognised in profit or loss, and are subsequently measured at fair value. Gains and losses on financial liabilities that are designated as at fair value through profit or loss are recognised in profit or loss as they arise. Fair value of a financial liability that is quoted in an active market is the |
Financial guarantee contracts are accounted for |
Convertible bonds |
Convertible bonds, except equity components, are accounted for |
Treasury shares |
The group’s own equity instruments, which are reacquired or held by subsidiary companies (treasury shares), are deducted from equity. No gain or loss is recognised in profit or loss on the | |
Fair value measurements | ||
The | ||
For the | |
Accounting for BEE transactions |
Where equity instruments are issued | |
Any difference between the fair value of |
A restriction on the BEE party to transfer the equity instrument subsequent to its vesting is not | ||
F-7
F - 23
SEGMENTAL INFORMATION |
AngloGold Ashanti | |||
Group analysis by | |||
F-8
| Figures in million | Net operating assets | Total assets(2)(3) | ||||||||||||||||||||||
| US Dollars | 2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||
South Africa(1) | 1,941 | 2,619 | 1,834 | 2,325 | 3,082 | 2,148 | ||||||||||||||||||
Continental Africa(4) | 1,339 | 3,184 | 3,083 | 3,391 | 4,846 | 4,234 | ||||||||||||||||||
Australasia(1) | 776 | 684 | 340 | 1,108 | 1,045 | 736 | ||||||||||||||||||
Americas(1) | 1,627 | 2,315 | 2,068 | 2,203 | 2,878 | 2,501 | ||||||||||||||||||
Other, including non-gold producing subsidiaries(5) | 39 | 60 | 60 | 647 | 888 | 1,130 | ||||||||||||||||||
| 5,722 | 8,862 | 7,385 | 9,674 | 12,739 | 10,749 | |||||||||||||||||||
Non-current assets considered material, by country are: | ||||||||||||||||||||||||
South Africa | 2,101 | 2,790 | 1,930 | |||||||||||||||||||||
DRC | 1,241 | |||||||||||||||||||||||
Ghana | 1,410 | 1,500 | ||||||||||||||||||||||
Tanzania | 1,058 | 970 | ||||||||||||||||||||||
Australia | 878 | |||||||||||||||||||||||
Brazil | 714 | 1,047 | 990 | |||||||||||||||||||||
| Figures in million | Amortisation | Capital expenditure | ||||||||||||||||||||||
| US Dollars | 2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||
South Africa | 253 | 302 | 338 | 451 | 583 | 532 | ||||||||||||||||||
Continental Africa(2) | 254 | 285 | 276 | 839 | 925 | 569 | ||||||||||||||||||
Australasia | 98 | 36 | 42 | 285 | 369 | 102 | ||||||||||||||||||
Americas(2) | 201 | 213 | 169 | 410 | 409 | 466 | ||||||||||||||||||
Other, including non-gold producing subsidiaries | 8 | 9 | 11 | 8 | 36 | 17 | ||||||||||||||||||
| 814 | 845 | 836 | 1,993 | 2,322 | 1,686 | |||||||||||||||||||
Equity-accounted investments included above | (15) | (10) | (9) | (411) | (303) | (89) | ||||||||||||||||||
| 799 | 835 | 827 | 1,582 | 2,019 | 1,597 | |||||||||||||||||||
F - 24
|
| Gold production (attributable) (000oz) | ||||||||||||
| 2013 | 2012 | 2011 | ||||||||||
South Africa | 1,302 | 1,212 | 1,624 | |||||||||
Continental Africa | 1,460 | 1,521 | 1,570 | |||||||||
Australasia | 342 | 258 | 246 | |||||||||
Americas | 1,001 | 953 | 891 | |||||||||
| 4,105 | 3,944 | 4,331 | ||||||||||
| Figures in million | Gold income | |||||||||||
| US Dollars | 2013 | 2012 | 2011 | |||||||||
Geographical analysis of gold income by origin is as follows: | ||||||||||||
South Africa | 1,810 | 2,013 | 2,560 | |||||||||
Continental Africa(2) | 2,111 | 2,609 | 2,530 | |||||||||
Australasia | 441 | 426 | 385 | |||||||||
Americas | 1,425 | 1,656 | 1,487 | |||||||||
| 5,787 | 6,704 | 6,962 | ||||||||||
Equity-accounted investments included above | (290) | (351) | (392) | |||||||||
(note 3) | 5,497 | 6,353 | 6,570 | |||||||||
Foreign countries included in the above and considered material are: | ||||||||||||
Brazil | 758 | 851 | 767 | |||||||||
Ghana | 642 | 772 | 802 | |||||||||
Tanzania | 640 | 906 | 754 | |||||||||
Geographical analysis of gold income by destination is as follows: | ||||||||||||
South Africa | 2,944 | 3,600 | 2,620 | |||||||||
North America | 1,064 | 1,197 | 1,022 | |||||||||
Australia | 435 | 426 | 378 | |||||||||
Asia | 399 | 387 | 478 | |||||||||
Europe | 355 | 404 | 630 | |||||||||
United Kingdom | 590 | 690 | 1,834 | |||||||||
| 5,787 | 6,704 | 6,962 | ||||||||||
Equity-accounted investments included above | (290) | (351) | (392) | |||||||||
(note 3) | 5,497 | 6,353 | 6,570 | |||||||||
| Figures in million | Gross profit (loss)(6) | |||||||||||
| US Dollars | 2013 | 2012 | 2011 | |||||||||
South Africa | 510 | 651 | 1,083 | |||||||||
Continental Africa(2) | 475 | 959 | 987 | |||||||||
Australasia | (9) | 78 | (13) | |||||||||
Americas(2) | 516 | 736 | 748 | |||||||||
Corporate and other | - | 41 | 27 | |||||||||
| 1,492 | 2,465 | 2,832 | ||||||||||
Equity-accounted investments included above | (47) | (111) | (155) | |||||||||
| 1,445 | 2,354 | 2,677 | ||||||||||
| |||
| |||
| (3) | ||||
During the year, pre-tax impairments, derecognition of goodwill, tangible assets and | ||||
| $3,029m were accounted for in South Africa ($311m), Continental Africa ($1,776m) and the Americas ($942m) | ||||
| (4) |
| |
| (5) | As at 31 December |
| (6) | The group’s segment profit measure is gross profit, which excludes the |
F-9 Comparative years have been restated for the adoption of IFRIC 20 and IAS 19. Refer note 39 for details.
F - 25
F-10
| Figures in million | 2013 | 2012 | 2011 | |||||||||||||||
| US Dollars | ||||||||||||||||||
3 | REVENUE | |||||||||||||||||
| Revenue consists of the following principal categories: | ||||||||||||||||||
| Gold income (note 2) | 5,497 | 6,353 | 6,570 | |||||||||||||||
| By-products (note 4) | 149 | 206 | 224 | |||||||||||||||
| - silver income | 80 | 95 | 99 | |||||||||||||||
| - uranium income | 54 | 90 | 99 | |||||||||||||||
| - sulphuric acid income | 13 | 19 | 22 | |||||||||||||||
| - other | 2 | 2 | 4 | |||||||||||||||
| Dividends received | 5 | 7 | - | |||||||||||||||
| Royalties received (note 7) | 18 | 23 | 79 | |||||||||||||||
| Interest received (note 33) | 39 | 43 | 52 | |||||||||||||||
| - loans and receivables(1) | 23 | 13 | 14 | |||||||||||||||
| - available-for-sale and held-to-maturity investments | 8 | 5 | 7 | |||||||||||||||
| - cash and cash equivalents | 8 | 25 | 31 | |||||||||||||||
| 5,708 | 6,632 | 6,925 | ||||||||||||||||
(1) Interest received from loans and receivables comprises: | ||||||||||||||||||
- related parties | 1 | 1 | - | |||||||||||||||
- unwinding of long-term receivables | 5 | 4 | 12 | |||||||||||||||
- other loans | 17 | 8 | 2 | |||||||||||||||
| 23 | 13 | 14 | ||||||||||||||||
4 | COST OF SALES | |||||||||||||||||
| Cash operating costs(1) | 3,247 | 3,129 | 2,871 | |||||||||||||||
| Insurance reimbursement | - | (30) | - | |||||||||||||||
| By-products revenue (note 3) | (149) | (206) | (224) | |||||||||||||||
| 3,098 | 2,893 | 2,647 | ||||||||||||||||
| Royalties | 129 | 164 | 193 | |||||||||||||||
| Other cash costs | 43 | 35 | 30 | |||||||||||||||
| Share scheme and related costs | 27 | 43 | 46 | |||||||||||||||
| Total cash costs | 3,297 | 3,135 | 2,916 | |||||||||||||||
| Retrenchment costs | 69 | 10 | 15 | |||||||||||||||
| Rehabilitation and other non-cash costs | 18 | 67 | 229 | |||||||||||||||
| Production costs | 3,384 | 3,212 | 3,160 | |||||||||||||||
| Amortisation of tangible assets (notes 15 and 33) | 775 | 830 | 825 | |||||||||||||||
| Amortisation of intangible assets (notes 16 and 33) | 24 | 5 | 2 | |||||||||||||||
| Total production costs | 4,183 | 4,047 | 3,987 | |||||||||||||||
| Inventory change | (37) | (83) | (95) | |||||||||||||||
| 4,146 | 3,964 | 3,892 | ||||||||||||||||
(1) Cash operating costs comprise: | ||||||||||||||||||
- salaries and wages | 1,231 | 1,186 | 1,104 | |||||||||||||||
- stores and other consumables | 747 | 746 | 684 | |||||||||||||||
- fuel, power and water | 641 | 670 | 598 | |||||||||||||||
- contractors | 632 | 560 | 499 | |||||||||||||||
- other | (4) | (33) | (14) | |||||||||||||||
| 3,247 | 3,129 | 2,871 | ||||||||||||||||
| Comparative years have been restated for the adoption of IFRIC 20. Refer note 39 for details. | ||||||||||||||||||
| The comparatives have also been amended to separately disclose share scheme and related costs from cash operating costs for improved disclosure. | ||||||||||||||||||
5 | CORPORATE ADMINISTRATION, MARKETING AND OTHER EXPENSES | |||||||||||||||||
| Corporate administration expenses | 183 | 236 | 232 | |||||||||||||||
| Marketing expenses | 6 | 10 | 9 | |||||||||||||||
| Share scheme and related costs | 12 | 45 | 37 | |||||||||||||||
| 201 | 291 | 278 | ||||||||||||||||
F - 26
| Figures in million | 2013 | 2012 | 2011 | |||||||||||||
| US Dollars | ||||||||||||||||
6 | OTHER OPERATING EXPENSES | |||||||||||||||
| Pension and medical defined benefit provisions | 14 | 37 | 10 | |||||||||||||
| Claims filed by former employees in respect of loss of employment, work-related accident injuries and diseases, governmental fiscal claims and care and maintenance of old tailings operations | 5 | 10 | 21 | |||||||||||||
| 19 | 47 | 31 | ||||||||||||||
| Comparative years have been restated for the adoption of IAS 19. Refer note 39 for details. | ||||||||||||||||
7 | SPECIAL ITEMS | |||||||||||||||
| Impairment (reversal) and derecognition of goodwill, tangible and intangible assets (notes 13, 15 and 16) | 3,029 | 346 | (120) | |||||||||||||
| Impairment of other investments (note 13) | 30 | 16 | 21 | |||||||||||||
| Impairment (reversal) of other receivables | - | 1 | (1) | |||||||||||||
| Write-down of stockpiles and heap leach to net realisable value and other stockpile adjustments (note 20) | 216 | - | - | |||||||||||||
| Net inventory write-off at Geita due to fire(1) | 1 | - | - | |||||||||||||
| Write-off of a loan (Sokimo) | 7 | - | - | |||||||||||||
| Net (profit) loss on disposal and derecognition of land, mineral rights, tangible assets and exploration properties (note 13) | (2) | 15 | 8 | |||||||||||||
| Profit on disposal of subsidiary ISS International Limited (note 13) | - | - | (2) | |||||||||||||
| Profit on partial disposal of Rand Refinery Limited (note 13) | - | (14) | - | |||||||||||||
| BEE transaction modification costs for Izingwe (Pty) Limited (Izingwe) (note 11) | - | - | 7 | |||||||||||||
| Insurance claim recovery on capital items (note 13) | - | - | (3) | |||||||||||||
| Costs on early settlement of convertible bonds and transaction costs on the $1.25bn bonds and standby facility(2) | 61 | - | - | |||||||||||||
| Contract termination and settlement costs(3) | 19 | 21 | - | |||||||||||||
| Indirect tax expenses and legal claims(4) | 43 | 40 | 6 | |||||||||||||
| Retrenchment and related costs | 24 | - | - | |||||||||||||
| Royalties received (note 3)(5) | (18) | (23) | (79) | |||||||||||||
| 3,410 | 402 | (163) | ||||||||||||||
Comprises inventory write-off of $14m and insurance proceeds received on the inventory claim of $13m. | |||
| (2) | Includes costs on early settlement of convertible bonds of $41m and transaction costs on the | ||
| (3) | Contract termination and settlement costs include the | ||
- the | |||
- contract settlement costs of nil (2012: $4m; and 2011: nil) at Siguiri; |
- Mongbwalu termination costs of $15m (2012: nil; 2011: nil); and |
- other movements of $3m (2012: nil; 2011: nil). |
| (4) | Indirect tax expenses and legal claims include the following: |
- net impairment for non-recovery of VAT and fuel duties in Argentina, Colombia, Guinea and Tanzania of $43m (2012: $29m; 2011: $1m); and |
- the Westchester/Africore Limited legal claim in Ghana of nil (2012: $11m; 2011: $5m). |
| (5) | Includes the Boddington royalty of $13m (2012: $18m; 2011: $38m) and other royalties of $5m (2012: $5m; 2011: $6m). In 2011, royalties received included the sale of Ayanfuri royalty to Franco Nevada Corporation for a pre-taxation amount of $35m. |
F-11
F - 27
| Figures in million | 2013 | 2012 | 2011 | |||||||||||||
| US Dollars | ||||||||||||||||
8 | FINANCE COSTS AND UNWINDING OF OBLIGATIONS | |||||||||||||||
| Finance costs | ||||||||||||||||
| Finance costs on rated bonds and corporate notes | 148 | 74 | 56 | |||||||||||||
| Finance costs on convertible bonds | 18 | 27 | 25 | |||||||||||||
| Finance costs on bank loans and overdrafts | 43 | 18 | 10 | |||||||||||||
| Finance costs on mandatory convertible bonds | 26 | 37 | 38 | |||||||||||||
| Amortisation of fees | 10 | 15 | 7 | |||||||||||||
| Finance lease charges | 5 | 6 | 5 | |||||||||||||
| Other finance costs | 2 | 2 | 3 | |||||||||||||
| 252 | 179 | 144 | ||||||||||||||
| Amounts capitalised (note 15) | (5) | (12) | (3) | |||||||||||||
| Total finance costs | 247 | 167 | 141 | |||||||||||||
| Unwinding of obligations, accretion of convertible bonds and other discounts | ||||||||||||||||
| Unwinding of decommissioning obligation (note 28) | 13 | 11 | 12 | |||||||||||||
| Unwinding of restoration obligation (note 28) | 14 | 17 | 15 | |||||||||||||
| Unwinding of other provisions (note 28) | 2 | 1 | - | |||||||||||||
| Accretion of convertible bonds discount | 20 | 30 | 28 | |||||||||||||
| Discounting of long-term trade and other receivables | - | 5 | - | |||||||||||||
| Total unwinding of obligations, accretion of convertible bonds and other discounts | 49 | 64 | 55 | |||||||||||||
| Total finance costs, unwinding of obligations, accretion of convertible bonds and other discounts (note 33) | 296 | 231 | 196 | |||||||||||||
9 | SHARE OF ASSOCIATES AND JOINT VENTURES’ (LOSS) PROFIT | |||||||||||||||
| Revenue | 334 | 383 | 409 | |||||||||||||
| Operating costs, special items and other expenses | (315) | (326) | (289) | |||||||||||||
| Net interest received (paid) | 4 | 2 | (1) | |||||||||||||
| Profit before taxation | 23 | 59 | 119 | |||||||||||||
| Taxation | (21) | (30) | (51) | |||||||||||||
| Profit after taxation | 2 | 29 | 68 | |||||||||||||
| Impairment of investments in associates (notes 13 and 18) | (14) | (20) | (5) | |||||||||||||
| Impairment of investments in joint ventures (notes 13 and 18) | (181) | (39) | (11) | |||||||||||||
| Loss on disposal of loan to joint venture (notes 13 and 18) | - | (2) | - | |||||||||||||
| Reversal of impairment in associate (notes 13 and 18) | - | 2 | - | |||||||||||||
| Reversal of impairment in joint venture (notes 13, 18 and 25)(1) | 31 | - | 20 | |||||||||||||
| (note 33) | (162) | (30) | 72 | |||||||||||||
During 2013, a loan of $31m was recovered which was impaired in | |||
| 2012. | |||
F-12Comparative years have been restated for the adoption of IFRIC 20. Refer note 39 for details.
F - 28
| Figures in million | 2013 | 2012 | 2011 | |||||||||||||
| US Dollars | ||||||||||||||||
10 | EMPLOYEE BENEFITS | |||||||||||||||
| Employee benefits including Executive Directors’ and Prescribed Officers’ salaries and other benefits | 1,321 | 1,298 | 1,232 | |||||||||||||
| Health care and medical scheme costs | ||||||||||||||||
| - current medical expenses | 72 | 77 | 78 | |||||||||||||
| - defined benefit post-retirement medical expenses | 13 | 36 | 14 | |||||||||||||
| Pension and provident plan costs | ||||||||||||||||
| - defined contribution | 64 | 69 | 64 | |||||||||||||
| - defined benefit pension plans | 11 | 9 | 6 | |||||||||||||
| Retrenchment costs | 82 | 10 | 15 | |||||||||||||
| Share-based payment expense (note 11) | 30 | 66 | 54 | |||||||||||||
| Included in cost of sales, other operating expenses, special items and corporate administration, marketing and other expenses | 1,593 | 1,565 | 1,463 | |||||||||||||
| Actuarial defined benefit plan expense analysis | ||||||||||||||||
| Defined benefit post-retirement medical | ||||||||||||||||
| - current service cost | 1 | 1 | 1 | |||||||||||||
| - interest cost | 12 | 13 | 14 | |||||||||||||
| - interest income | - | - | (1) | |||||||||||||
| - recognised past service cost | - | 22 | - | |||||||||||||
| 13 | 36 | 14 | ||||||||||||||
| Defined benefit pension plans | ||||||||||||||||
| - current service cost | 6 | 7 | 7 | |||||||||||||
| - interest cost | 24 | 27 | 25 | |||||||||||||
| - interest income | (21) | (25) | (26) | |||||||||||||
| - recognised past service cost | 2 | - | - | |||||||||||||
| 11 | 9 | 6 | ||||||||||||||
| Actual return on plan assets | ||||||||||||||||
| - defined benefit pension and medical plans | 64 | 45 | 23 | |||||||||||||
F-13
F - 29
| Figures in million | 2013 | 2012 | 2011 | |||||||||||||
| US Dollars | ||||||||||||||||
11 | SHARE-BASED PAYMENTS | |||||||||||||||
| Share incentive schemes | ||||||||||||||||
| Two new share incentive schemes as well as amendments to the rules of the BSP and LTIP plans were approved by the shareholders of AngloGold Ashanti Limited during the current financial year. New awards were made under the amended BSP and LTIP plans. Additional ESOP awards were granted in terms of the April 2011 modification. The total cost relating to employee share incentive schemes was $30m (2012: $66m; 2011: $54m) and is made up as follows: | ||||||||||||||||
| Employee Share Ownership Plan (ESOP) - Free shares | 3 | 4 | 5 | |||||||||||||
| Employee Share Ownership Plan (ESOP) - E ordinary shares to employees | 2 | 4 | 7 | |||||||||||||
| Bonus Share Plan (BSP) | 24 | 37 | 30 | |||||||||||||
| Long-Term Incentive Plan (LTIP) | (1) | 21 | 12 | |||||||||||||
| Share Retention Bonus Scheme | 2 | - | - | |||||||||||||
| Total employee compensation cost excluding associates and joint ventures (note 10) | 30 | 66 | 54 | |||||||||||||
| Black economic empowerment transaction modification cost for Izingwe defined in note 7. | - | - | 7 | |||||||||||||
| Total share-based payment expense | 30 | 66 | 61 | |||||||||||||
| Included in: | ||||||||||||||||
| - cost of sales | 18 | 33 | 32 | |||||||||||||
| - corporate administration, marketing and other expenses | - | 33 | 22 | |||||||||||||
| - special items | 12 | - | 7 | |||||||||||||
| 30 | 66 | 61 | ||||||||||||||
Share based payments for comparative periods have been reclassified between cost of sales and corporate administration, marketing and other expenses
Equity-settled share incentive schemes
Employee Share Ownership Plan (ESOP)
On 12 December 2006, AngloGold Ashanti Limited announced the finalisation of the Bokamoso Employee Share Ownership Plan (Bokamoso ESOP) with the National Union of Mineworkers (NUM), Solidarity and United Association of South Africa (UASA). The Bokamoso ESOP creates an opportunity for AngloGold Ashanti Limited and the unions to ensure a closer alignment of the interest between South African-based employees and the company, and the seeking of shared growth solutions to build partnerships in areas of shared interest. Participation is restricted to those employees not eligible for participation in any other South African share incentive plan.
The company also undertook an empowerment transaction with a BEE investment vehicle, Izingwe, in 2006.
In order to facilitate this transaction the company established a trust to acquire and administer the ESOP shares. AngloGold Ashanti Limited 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 created, allotted and issued E ordinary shares to Izingwe. The key terms of the E ordinary shares are:
AngloGold Ashanti Limited will have the right to cancel the E ordinary shares, or a portion of them, in accordance with the ESOP and Izingwe cancellation formulae, respectively;
the E ordinary shares will not be listed;
the E ordinary shares which are not cancelled will be converted into ordinary shares; and
the E ordinary shares will each be entitled to receive a 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 strike price calculation.
F-14On 14 April 2011, AngloGold Ashanti Limited, NUM, Solidarity, UASA, Izingwe and the Bokamoso ESOP Board of Trustees announced the modification of the empowerment transactions concluded between the company and the unions, and the company and Izingwe respectively in 2006.
This modification 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 ordinary shares vested and lapsed at no additional value to Bokamoso ESOP beneficiaries and Izingwe.
F - 30
|
Equity-settled share incentive schemes (continued)
Employee Share Ownership Plan (ESOP) (continued)
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 Limited shareholders, the scheme was modified as follows:
all lapsed E ordinary shares that vested without value were reinstated;
the strike (base) price was fixed at R320.00 per share for the Bokamoso ESOP and R330.00 for Izingwe;
the notional interest charge that formed part of the original cancellation formula fell away;
as previously, 50% of any dividends declared was used to reduce the strike price;
as previously, the remaining 50% is paid directly to participants under the empowerment transaction; and
the life span of the scheme was 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 R40.00 each and a maximum payout of R70.00 each per E ordinary share for Izingwe and R90.00 each for members of the Bokamoso ESOP (i.e. employees), including the impact of the 50% 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.
F-15The 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 $12m in 2011 to earnings as a result of the modification.
The award of free ordinary shares to employees
The fair value of each free share awarded on 1 November each year was as follows:
| Award date | 2006 | 2007 | 2008 | 2011 | ||||||||||||
Calculated fair value | R320.00 | R305.99 | R188.48 | R306.99 | ||||||||||||
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 the expiry date of 1 November 2014.
Accordingly, for the awards issued, the following information is available:
Number of shares | Weighted average exercise price ZAR | Number of shares | Weighted average exercise price ZAR | Number of shares | Weighted average exercise price ZAR | |||||||||||||||||||
| 2013 | 2012 | 2011 | ||||||||||||||||||||||
Awards outstanding at beginning of year | 154,757 | - | 326,906 | - | 434,941 | - | ||||||||||||||||||
Awards granted during the year | - | - | - | - | 48,923 | - | ||||||||||||||||||
Awards reallocated during the year | 726 | - | 10,311 | - | 15,878 | - | ||||||||||||||||||
Awards lapsed during the year | (726) | - | (10,311) | - | (15,878) | - | ||||||||||||||||||
Awards exercised during the year | (149,586) | - | (172,149) | - | (156,958) | - | ||||||||||||||||||
Awards outstanding at end of year | 5,171 | - | 154,757 | - | 326,906 | - | ||||||||||||||||||
Awards exercisable at end of year | - | - | - | - | - | - | ||||||||||||||||||
During 2013, the rights to a total of 726 (2012: 10,311; 2011: 15,878) shares were surrendered by the participants. A cumulative total of 9,720 (2012: 10,968; 2011: 21,562) shares were allotted to deceased, retired or retrenched employees. The income statement charge for the year was $3m (2012: $4m; 2011: $5m).
The award of E ordinary shares to employees
Before the modification of the ESOP scheme the average fair value per share of the E ordinary shares awarded to employees on 1 November each year was as follows:
| Award date | 2006 | 2007 | 2008 | |||||||||
Calculated fair value | R105.00 | R79.00 | R13.40 | |||||||||
After the modification of the ESOP scheme during April 2011, 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 they 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 that tranche will be converted to ordinary shares for the benefit of employees.
F - 31
|
Equity-settled share incentive schemes (continued)
The award of E ordinary shares to employees (continued)
Accordingly, for the E ordinary shares issued, the following information is available:
Number of shares | Weighted average exercise price ZAR | Number of shares | Weighted average exercise price ZAR | Number of shares | Weighted average exercise price ZAR | |||||||||||||||||||
| 2013 | 2012 | 2011 | ||||||||||||||||||||||
Awards outstanding at beginning of year | 917,752 | 313.31 | 1,532,962 | 315.31 | 1,686,126 | 366.30 | ||||||||||||||||||
Awards granted during the year | - | - | - | - | 769,164 | 320.00 | ||||||||||||||||||
Awards reallocated during the year | 2,664 | 310.30 | 32,064 | 312.97 | 61,978 | 332.74 | ||||||||||||||||||
Awards lapsed during the year | (2,664) | 310.30 | (32,064) | 312.97 | (61,978) | 332.74 | ||||||||||||||||||
Awards cancelled during the year | - | - | - | - | (408,332) | 320.39 | ||||||||||||||||||
Awards converted during the year | (555,746) | 312.57 | (615,210) | 313.39 | (513,996) | 315.35 | ||||||||||||||||||
Awards outstanding at end of year | 362,006 | 312.56 | 917,752 | 313.31 | 1,532,962 | 315.31 | ||||||||||||||||||
F-16The weighted average exercise price is calculated as the initial grant price of R288.00 plus an interest factor less dividend apportionment up to April 2011. After that date the exercise price is calculated at the modified price of R320.00 less dividend apportionment. The income statement charge for the year was $2m (2012: $4m; 2011: $7m).
During 2013, the rights to a total of 2,664 (2012: 32,064; 2011: 61,978) shares were surrendered by participants. A total of 555,746 (2012: 615,210; 2011: 513,996) E ordinary shares were converted into 145,018 (2012: 84,446; 2011: 60,695) ordinary shares during the year. A total of nil (2012: nil; 2011: 408,332) shares were cancelled as the result of the exercise price exceeding the share price on conversion date.
The award of E ordinary shares to Izingwe
Before the modification of the scheme the average fair value of the E ordinary shares granted to Izingwe on 13 December 2006 was R90.00 per share. After the modification the average fair value of the E ordinary shares granted to Izingwe was R44.61 per share. Dividends declared in respect of the E ordinary shares will accrue and be paid to Izingwe, 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 award, the company will cancel the relevant number of E ordinary shares as stipulated by a cancellation formula. Any E ordinary shares remaining in that tranche will be converted to ordinary shares for the benefit of Izingwe.
Accordingly, for the awards issued, the following information is available:
Number of shares | Weighted average exercise price ZAR | Number of shares | Weighted average exercise price ZAR | Number of shares | Weighted average exercise price ZAR | |||||||||||||||||||
| 2013 | 2012 | 2011 | ||||||||||||||||||||||
E ordinary shares outstanding at beginning of year | 700,000 | 323.31 | 1,050,000 | 325.31 | 1,120,000 | 366.30 | ||||||||||||||||||
E ordinary shares granted during the year | - | - | - | - | 560,000 | 330.00 | ||||||||||||||||||
E Ordinary shares converted during the year | (350,000) | 322.56 | (350,000) | 323.31 | (350,000) | 325.31 | ||||||||||||||||||
E ordinary shares cancelled during the year | - | - | - | - | (280,000) | 326.21 | ||||||||||||||||||
E ordinary shares outstanding at end of year | 350,000 | 322.56 | 700,000 | 323.31 | 1,050,000 | 325.31 | ||||||||||||||||||
The weighted average exercise price is calculated as the initial grant price of R288.00 plus an interest factor less dividend apportionment up to April 2011. After that date the exercise price is calculated at the modified price of R330.00 less dividend apportionment. During 2011, the income statement charge for the period due to the modification of the empowerment transaction was $7m and was included in special items (note 7), $19m was expensed at inception of the scheme in 2006.
A total of 350,000 (2012: 350,000; 2011: 350,000) E ordinary shares were converted into 91,683 (2012: 48,532; 2011: 39,052) ordinary shares during the year. A total of nil (2012: nil; 2011: 280,000) shares were cancelled as the result of the exercise price exceeding the share price on conversion date.
The fair value of each share granted for the ESOP and Izingwe schemes was 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 share price volatility. Expected volatility is based on the historical volatility of AngloGold Ashanti Limited’s shares. These estimates involve inherent uncertainties and the application of management judgement. In addition, the company is required to estimate the expected forfeiture rate and only recognise expenses for those options expected to vest. As a result, if other assumptions had been used, the recorded share-based compensation expense could have been different from that reported.
F - 32
|
Equity-settled share incentive schemes (continued)
The award of E ordinary shares to Izingwe (continued)
The Black-Scholes option-pricing model used the following assumptions, at grant date:
| 2006 | 2007 | 2008 | 2011 | |||||||||||||
Risk-free interest rate | 7.00% | 7.00% | 7.00% | 6.63% | ||||||||||||
Dividend yield | 2.30% | 2.06% | 1.39% | 0.99% | ||||||||||||
Volatility factor of market share price | 36.00% | 33.00% | 35.00% | 33.50% | ||||||||||||
F-17Bonus 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 AngloGold Ashanti Limited, any subsidiary of AngloGold Ashanti Limited or a company under the control of AngloGold Ashanti Limited, 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 BSP awards granted between 2008 and 2012, 40% will vest after one year and the remaining 60% will vest after two years. An additional 20% of the original award will be granted to employees if the full award remains unexercised after three years. For BSP awards granted from 2013, 50% will vest after one year and the remaining 50% will vest after two years. The additional 20% retention award for holding the shares for 36 months falls away, and is replaced by the matching shares being a 120% as opposed to a 100%. For executives, the same principal will apply but the matching will be at 150%.
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 AngloGold Ashanti Limited’s shares on the JSE on the last business day prior to the date of grant. AngloGold Ashanti Limited’s Remuneration Committee has at its discretion the right to pay dividends, or dividend equivalents, to the participants of the BSP. Having no history of any discretionary dividend payments, the fair value includes dividends and was used to determine the income statement expense.
Accordingly, for the awards issued, the following information is available:
Award date (unvested awards and awards vested during the year) | 2010 | 2011 | 2012 | 2013 | ||||||||||||
Calculated fair value | R280.90 | R340.00 | R 328.59 | R 226.46 | ||||||||||||
Vesting date 50% (2010, 2011, 2012 at 40%) | 24 Feb 2011 | 21 Feb 2012 | 21 Feb 2013 | 13 Mar 2014 | ||||||||||||
Vesting date 50% (2010, 2011, 2012 at 60%) | 24 Feb 2012 | 21 Feb 2013 | 21 Feb 2014 | 13 Mar 2015 | ||||||||||||
Vesting date (conditional 20%) | 24 Feb 2013 | 21 Feb 2014 | 21 Feb 2015 | - | ||||||||||||
Expiry date | 23 Feb 2020 | 20 Feb 2021 | 20 Feb 2022 | 12 Mar 2023 | ||||||||||||
Number of shares | Weighted average exercise price ZAR | Number of shares | Weighted average exercise price ZAR | Number of shares | Weighted average exercise price ZAR | |||||||||||||||||||
| 2013 | 2012 | 2011 | ||||||||||||||||||||||
Awards outstanding at beginning of year | 2,156,456 | - | 1,825,378 | - | 1,552,493 | - | ||||||||||||||||||
Awards granted during the year | 1,300,968 | - | 993,146 | - | 820,847 | - | ||||||||||||||||||
Awards lapsed during the year | (212,802) | - | (104,026) | - | (81,113) | - | ||||||||||||||||||
Awards exercised during the year | (645,735) | - | (558,042) | - | (466,849) | - | ||||||||||||||||||
Awards outstanding at end of year | 2,598,887 | - | 2,156,456 | - | 1,825,378 | - | ||||||||||||||||||
Awards exercisable at end of year | 1,217,468 | - | 880,774 | - | 681,166 | - | ||||||||||||||||||
During 2013, the rights to a total of 212,802 (2012: 104,026; 2011: 81,113) shares were surrendered by the participants. A cumulative total of 158,408 (2012: 22,835; 2011: 30,478) shares were allotted to deceased, retired or retrenched employees. The income statement charge for the year was $24m (2012: $37m; 2011: $30m).
Long-Term Incentive Plan (LTIP)
The LTIP is 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 and selected senior management of participating companies. Participating companies include AngloGold Ashanti Limited, any subsidiary of AngloGold Ashanti Limited or a company under the control of AngloGold Ashanti Limited, unless the board excludes such a company.
An award in terms of the LTIP may be granted at any date during the year that the board of AngloGold Ashanti Limited 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 AngloGold Ashanti Limited’s shares on the JSE on the last business day prior to the date of grant. AngloGold Ashanti Limited’s Remuneration Committee has at its discretion the right to pay dividends, or dividend equivalents, to the participants of the LTIP. Having no history of any discretionary dividend payments, the fair value includes dividends and was used to determine the income statement expense.
F - 33
|
Equity-settled share incentive schemes (continued)
Long-Term Incentive Plan (LTIP) (continued)
The main performance conditions in terms of the LTIP issued in 2012, 2011 and 2010 are:
up to 30% of an award will be determined by the performance of total shareholder returns (TSR) compared with that of a group of comparative gold-producing companies;
up to 30% of an award will be determined by real growth (above US inflation) in adjusted earnings per share over the performance period;
up to 40% of an award will be dependent on the achievement of strategic performance measures which will be set by the Remuneration Committee; and
three-years’ service is required.
F-18The main performance conditions in terms of the LTIP issued in 2013 are:
up to 50% of an award will be determined by the performance of total shareholder returns (TSR) compared with that of a group of comparative gold-producing companies;
up to 35% of an award will be dependent on the achievement of strategic performance measures that has been set by the Remuneration Committee;
up to 15% of an award will be dependent on meeting the free cash flow generated from operations (before project capital) budget; and
three-years’ service is required.
Accordingly, for the awards made, the following information is available:
Award date (unvested awards and awards vested during the year) | 2010 | 2011 | 2012 | 2013 | ||||||||||||
Calculated fair value | R280.90 | R340.00 | R328.59 | R 226.46 | ||||||||||||
Vesting date | 24 Feb 2013 | 21 Feb 2014 | 21 Feb 2015 | 13 Mar 2016 | ||||||||||||
Expiry date | 23 Feb 2020 | 20 Feb 2021 | 20 Feb 2022 | 12 Mar 2023 | ||||||||||||
Number of shares | Weighted average exercise price ZAR | Number of shares | Weighted average exercise price ZAR | Number of shares | Weighted average exercise price ZAR | |||||||||||||||||||
| 2013 | 2012 | 2011 | ||||||||||||||||||||||
Awards outstanding at beginning of year | 2,330,906 | - | 1,982,060 | - | 1,599,690 | - | ||||||||||||||||||
Awards granted during the year | 1,815,497 | - | 983,554 | - | 686,305 | - | ||||||||||||||||||
Awards lapsed during the year | (998,091) | - | (294,216) | - | (102,620) | - | ||||||||||||||||||
Awards exercised during the year | (275,682) | - | (340,492) | - | (201,315) | - | ||||||||||||||||||
Awards outstanding at end of year | 2,872,630 | - | 2,330,906 | - | 1,982,060 | - | ||||||||||||||||||
Awards exercisable at end of year | 357,880 | - | 250,932 | - | 242,145 | - | ||||||||||||||||||
The income statement credit for the year was $1m (2012: expense of $21m; 2011: expense of $12m).
Share Retention Bonus Scheme
This award is specifically to address the retention of executive management. Executives will receive an additional ad-hoc incentive comprising an LTIP award in March 2013 and a deferred cash portion to be delivered in August 2014. The scheme is a performance-based share award, equivalent to 60% of the executives’ base pay as at 1 January 2013. Subject to performance criteria, these shares will vest during August 2014. The cash portion will be 40% of the executives’ base pay (80% for the CFO based on the January 2013 total base pay (inclusive of off-shore payments where applicable). The scheme will be subject to delivery on key business imperatives and on delivery of adjusted headline earnings above a threshold of 50% of the approved targeted adjusted headline earnings over the performance period. Failure to meet any of the performance criteria will result in the forfeiture of the retention bonus.
F - 34
| 11 | SHARE-BASED PAYMENTS(continued) |
Equity-settled share incentive schemes (continued)
Share Retention Bonus Scheme (continued)
Accordingly, for the awards made, the following information is available:
| Award date (unvested awards and awards vested during the year) | ||||
Calculated fair value | R 226.46 | |||
Vesting date | Aug 2014 | |||
Expiry date | Aug 2014 |
Number of shares | ||||||||
Weighted average exercise price | ||||||||
F-19
ZAR
| 2010 | 2009 | 2008 | ||||||||||
| Net income ($ 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 | |||||||||
F-20
F-21
| 2010 | 2009 | 2008 | ||||||||||
| $ | $ | $ | ||||||||||
| South Africa | 19 | 10 | 9 | |||||||||
| Continental Africa | 1 | 3 | — | |||||||||
| Americas | 3 | 1 | — | |||||||||
| 23 | 14 | 9 | ||||||||||
| 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 | ||||||||||
F-22
| 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 | ||||||||||
F-23
| 2010 | 2009 | 2008 | ||||||||||
| $ per ounce | $ per ounce | $ per ounce | ||||||||||
(1) Long-term real gold price | 1,113 | 906 | 817 | |||||||||
Awards outstanding at beginning of year | ||||||||
| - | - | |||||||
Awards granted during the year | ||||||||
| - | ||||||||
Awards lapsed during the year | ||||||||
| (34,923) | - | ||||
Awards exercised during the year(1) | |||||
| - | |||||
Awards outstanding at end of year | |||||
F-24
| 159,984 | - | ||||
Awards exercisable at end of year | |||||
| - |
The income statement charge for the year was $2m (2012: nil; 2011: nil).
| (1) | Mr AM O’Neill exercised his awards during the year which partially vested due to his early retirement. |
Co-Investment Executive Share Plan (CIP)
To assist executives in meeting their Minimum Shareholding Requirements (MSR’s) with effect from February 2013, they were given the opportunity, on a voluntary basis, to participate in the Co-Investment Plan (CIP), and this has been adopted on the conditions below:
Executives will be allowed to take up to 50% 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%, with vesting over a two-year period in two equal tranches.
Accordingly, for the awards made, the following information is available:
| Award date (unvested awards and awards vested during the year) | 2013 | |||
Calculated fair value | R 226.46 | |||
Vesting date | 2014 & 2015 | |||
Expiry date | 2023 | |||
Number of shares | ||||||||
| December 31, 2010 | December 31, 2009 | |||||||||||||||
| Carrying | Carrying | |||||||||||||||
| amount | Fair value | amount | Fair value | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Securities | 117 | 118 | 69 | 69 | ||||||||||||
| Cash | 32 | 32 | 53 | 53 | ||||||||||||
| 149 | 150 | 122 | 122 | |||||||||||||
| 2010 | 2009 | 2008 | ||||||||||
| $ | $ | $ | ||||||||||
| Comprising of: | ||||||||||||
| Minimum rentals | 23 | 33 | 30 | |||||||||
| Future minimum rental payments are: | ||||
| 2011 | 18 | |||
| 2012 | 7 | |||
| 2013 | 1 | |||
| 2014 | 1 | |||
| Thereafter | — | |||
| 27 | ||||
F-25
Weighted
average
exercise
price
ZAR
| 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 | ) | ||||||||
South Africa | 1 | |||||||||||
Tanzania | 6 | 25 | (15 | ) | ||||||||
Guinea | 10 | 7 | (3 | ) | ||||||||
Brazil | (3 | ) |
Business interruption recoveries | (19 | ) | (11 | ) | ||||
Reimbursement of costs (included in Production costs) | (16 | ) |
F-26
| 2010 | 2009 | 2008 | ||||||||||
| $ | $ | $ | ||||||||||
| Loss on non-hedge derivatives | 703 | 1,452 | 258 | |||||||||
| 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 | |||||||||
| 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 | ||||||
F-27
| 2010 | 2009 | 2008 | ||||||||||
| $ | $ | $ | ||||||||||
| Fair value loss on mandatory convertible bonds | 83 | — | — | |||||||||
| 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
| 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 | ) | |||||||||||
| 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 | ||||||
F-29
| 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 | ) | ||||||||
| 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 | ) | ||||||
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 | ) | |||||||
F-30
| 2010 | 2009 | 2008 | ||||||||||
| Maximum anticipated deferred taxation rate | 38 | % | 39 | % | 38 | % | ||||||
| Minimum anticipated deferred taxation rate | 35 | % | 36 | % | 36 | % | ||||||
| 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 | ||||||||||||||
| 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 | ||||||||||
| 2010 $ | 2009 $ | 2008 $ | ||||||||||
Unutilized tax losses (1) | 1,200 | 1,032 | 841 | |||||||||
Awards outstanding at beginning of year | - | - | |||||||
Awards granted during the year | 20,810 | - | |||||||
Awards lapsed during the year(2) | (677) | - | |||||||
Awards exercised during the year | - | - | |||||||
Awards outstanding at end of year | 20,133 | - | |||||||
Awards exercisable at end of year | - | - | |||||||
F-31The income statement charge for the year was less than $1m (2012: nil; 2011: nil).
| (2) | Mr M MacFarlane’s awards lapsed during the year due to his early retirement. |
Performance-related share-based remuneration scheme - 1 May 2003
The options, if vested, may be exercised at the end of a three-year period commencing 1 May 2003. The share options were granted at an exercise price of R221.90. The performance condition applicable to these options was that the US dollar EPS must increase by at least 6% in real terms, after inflation, over the next three years, in order to vest. As none of the performance criteria were met in the initial three years, the grantor decided to roll the scheme forward on a ‘roll over reset’ basis, in February 2006, to be reviewed annually. The performance criteria of these options was achieved during 2006. An employee would only be able to exercise his options after the date upon which he receives written notification from the directors that the previously specified performance criteria have been fulfilled.
F - 35
| 11 | SHARE-BASED PAYMENTS(continued) |
Equity-settled share incentive schemes (continued)
Performance-related share-based remuneration scheme - 1 May 2003 (continued)
Number of shares | Weighted average exercise price ZAR | Number of shares | Weighted average exercise price ZAR | Number of shares | Weighted average exercise price ZAR | |||||||||||||||||||
| 2013 | 2012 | 2011 | ||||||||||||||||||||||
Options outstanding at beginning of year | 34,831 | 216.91 | 53,563 | 217.13 | 112,960 | 217.49 | ||||||||||||||||||
Options lapsed during the year | (34,461) | 216.81 | (1,500) | 221.90 | - | - | ||||||||||||||||||
Options exercised during the year | (370) | 221.90 | (17,232) | 217.15 | (59,397) | 217.82 | ||||||||||||||||||
Options expired during the year | - | - | - | - | - | - | ||||||||||||||||||
Options outstanding at end of year | - | - | 34,831 | 216.91 | 53,563 | 217.13 | ||||||||||||||||||
Options exercisable at end of year | - | - | 34,831 | 216.91 | 53,563 | 217.13 | ||||||||||||||||||
There was no income tax and statutory income tax isstatement charge for the year 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 | ||||||||
| 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 | ||||||
Performance-related share-based remuneration scheme - 1 November 2004
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 providedoptions, if vested, may be exercised at the anticipated tax rateend of a three-year period commencing 1 November 2004. The share options were granted at an exercise price of R228.00. The performance condition applicable to these options was that US dollar EPS must increase from the 2004 year by at least 6% in real terms, i.e. after inflation, over the following three years in order to vest. The performance criteria was met during 2006. The remaining weighted average contractual life of options granted is 0.83 years. 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 criteria have been fulfilled.
Number of shares | Weighted average exercise price ZAR | Number of shares | Weighted average exercise price ZAR | Number of shares | Weighted average exercise price ZAR | |||||||||||||||||||
| 2013 | 2012 | 2011 | ||||||||||||||||||||||
Options outstanding at beginning of year | 56,882 | 221.49 | 78,134 | 221.89 | 150,770 | 221.51 | ||||||||||||||||||
Options lapsed during the year | - | - | - | - | - | - | ||||||||||||||||||
Options exercised during the year | - | - | (21,252) | 222.96 | (72,636) | 221.11 | ||||||||||||||||||
Options expired during the year | - | - | - | - | - | - | ||||||||||||||||||
Options outstanding at end of year | 56,882 | 221.49 | 56,882 | 221.49 | 78,134 | 221.89 | ||||||||||||||||||
Options exercisable at end of year | 56,882 | 221.49 | 56,882 | 221.49 | 78,134 | 221.89 | ||||||||||||||||||
There was no income statement charge for the year as the total compensation cost of $3m was expensed up to the date of vesting in 2007.
There is currently an equity-settled share incentive scheme that falls outside the transitional provisions of IFRS 2, as the options were granted prior to 7 November 2002. The details are as follows:
Performance-related share-based remuneration scheme - 1 May 2002
The share options were granted at an exercise price of R299.50 per share. The performance condition applicable to these options was that US dollar EPS must increase by 7.5% for each of the three succeeding years. On 24 December 2002, the company underwent a share split on a 2:1 basis. The EPS target was reduced accordingly. As none of the performance criteria was met in the initial three years, AngloGold Ashanti Limited decided to roll the scheme forward on a ‘roll over reset’ basis, to be utilized are noted as follows:
| 2010 | 2009 | |||||||
South Africa | ||||||||
| Losses ($ millions) | 508 | 4 | ||||||
| Deferred tax at the anticipated tax rate to be utilized (percent) | 33 | 37 | ||||||
Number of shares | Weighted average exercise price ZAR | Number of shares | Weighted average exercise price ZAR | Number of shares | Weighted average exercise price ZAR | |||||||||||||||||||
| 2013 | 2012 | 2011 | ||||||||||||||||||||||
Options outstanding at beginning of year | 1,254 | 229.00 | 39,447 | 283.37 | 128,202 | 286.18 | ||||||||||||||||||
Options lapsed during the year | (1,254) | 229.00 | (29,570) | 298.18 | - | - | ||||||||||||||||||
Options exercised during the year | - | - | (8,623) | 240.49 | (88,755) | 287.43 | ||||||||||||||||||
Options expired during the year | - | - | - | - | - | - | ||||||||||||||||||
Options outstanding at end of year | - | - | 1,254 | 229.00 | 39,447 | 283.37 | ||||||||||||||||||
Options exercisable at end of year | - | - | 1,254 | 229.00 | 39,447 | 283.37 | ||||||||||||||||||
F-32
F - 36
Figures in million | 2013 | 2012 | 2011 | |||||||||
| US Dollars | ||||||||||||
12 TAXATION | ||||||||||||
South African taxation | ||||||||||||
Mining tax | 7 | 54 | 113 | |||||||||
Non-mining tax(1) | 1 | 18 | 12 | |||||||||
(Over) under provision prior year | (26) | (3) | 4 | |||||||||
Deferred taxation | ||||||||||||
Temporary differences(2) | (39) | 65 | 221 | |||||||||
Unrealised non-hedge derivatives and other commodity contracts | 25 | (10) | - | |||||||||
Change in estimated deferred tax rate(3) | - | (9) | 9 | |||||||||
Change in statutory tax rate(1) (4) | - | (131) | - | |||||||||
| (32) | (16) | 359 | ||||||||||
Foreign taxation | ||||||||||||
Normal taxation | 160 | 354 | 275 | |||||||||
(Over) under provision prior year | (8) | (9) | 3 | |||||||||
Deferred taxation | ||||||||||||
Temporary differences(2) | (453) | (21) | 100 | |||||||||
Change in statutory tax rate(1) | - | 38 | - | |||||||||
| (301) | 362 | 378 | ||||||||||
| (333) | 346 | 737 | ||||||||||
Tax rate reconciliation | ||||||||||||
A reconciliation of the effective tax rate in the income statement to the prevailing estimated corporate tax rate is set out in the following table: | ||||||||||||
| % | % | % | ||||||||||
Effective tax rate | 13 | 27 | 31 | |||||||||
Disallowable items | ||||||||||||
Derivative and other commodity contracts losses and fair value gains | (3) | 6 | 3 | |||||||||
Transaction and finance costs | - | - | (1) | |||||||||
Share of associates and joint ventures’ (loss) profit | 2 | (1) | 1 | |||||||||
Exploration, corporate and other disallowable expenses | 7 | (11) | (3) | |||||||||
Foreign income tax allowances and rate differentials | (2) | (6) | 2 | |||||||||
Exchange variation and translation adjustments | - | (1) | (2) | |||||||||
Derecognition of deferred tax assets | 13 | - | - | |||||||||
Current unrecognised tax assets | (1) | 1 | 4 | |||||||||
Change in estimated deferred tax rate(3) | - | 1 | - | |||||||||
Change in statutory tax rate(1) (4) | - | 8 | - | |||||||||
Other | (1) | 4 | - | |||||||||
Estimated corporate tax rate(1) | 28 | 28 | 35 | |||||||||
| (1) | The South African and Ghanaian statutory tax rates are as follows: |
TAXATIONSouth Africa
(continued)Non-mining statutory tax rate 28% (2012: 28%; 2011: 35%); and
Maximum statutory mining tax rate 34% (2012: 34%; 2011: 43%) - refer mining formula in footnote 4.
Unremitted earnings of foreign subsidiaries and foreign incorporated joint venturesGhana
Statutory company tax rate 35%, however limited to the Company without being subject to income or withholding taxes. No provision is made for the income30% as AngloGold Ashanti Limited has a special 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 | ||||||
| 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 | |||||||||
F-33
| (2) | Included in temporary differences in South African taxation is a tax credit on the impairment, derecognition and disposal of tangible assets of $86m (2012: $16m; 2011: $11m). Included in temporary differences of foreign taxation is a net tax credit on the impairment and disposal of tangible assets of $499m and write-down of inventories of $68m (2012: tax credit of $90m; 2011: tax charge of $42m). |
| (3) | In South Africa, the mining operations are taxed on a variable rate that increases as profitability increases. The tax rate used to calculate deferred tax is based on the group’s current estimate of future profitability when temporary differences will reverse. Depending on the profitability of the operations, the tax rate can consequently be significantly different from year to year. The change in the estimated deferred tax rate at which the temporary differences will reverse amounts to a tax credit of nil (2012: tax credit of $9m; 2011: tax charge of $9m). |
| (4) | Mining tax on mining income in South Africa is determined according to a formula based on profit and revenue from mining operations. |
F - 37
| 12 | TAXATION (continued) |
All mining capital expenditure is deducted to the beginningextent that it does not result in an assessed loss and ending amount of unrecognized tax benefits, recorded as a liability in other non-current liabilities (refer to Note 18),depreciation 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 | ||||||
| 2010 | 2009 | 2008 | ||||||||||
| $ | $ | $ | ||||||||||
| Interest recognized | 2 | 9 | 6 | |||||||||
| Interest accrued as at December 31 | 8 | 53 | 34 | |||||||||
The formula for determining the South African mining tax rate is:
Y = 34 - 170/X (2012: Y = 34 - 170/X; 2011: Y = 43 - 215/X)
where Y is the percentage rate of tax payable and X is the ratio of mining profit net of any redeemable capital expenditure to mining revenue system is based onexpressed as a self-assessment process, all tax filings due by December 31, 2010percentage.
Comparative years have been filed, and the self-assessed position recorded in the consolidated financial statements. The legislation of individual jurisdictions provides for different periodsrestated for the authorities to review the filings with specified expiry dates. adoption of IFRIC 20 and IAS 19. Refer note 39 for details.
| Figures in million | 2013 | 2012 | 2011 | |||||||||
| US Dollars | ||||||||||||
Analysis of unrecognised tax losses | ||||||||||||
Tax losses available to be utilised against future profits | ||||||||||||
- utilisation required within one year | - | 5 | - | |||||||||
- utilisation required between two and five years | 171 | - | 5 | |||||||||
- utilisation in excess of five years | 1,221 | 263 | 149 | |||||||||
| 1,392 | 268 | 154 | ||||||||||
Unrecognised tax losses utilised | ||||||||||||
Assessed losses utilised during the year | - | - | 236 | |||||||||
13 (LOSS) EARNINGS PER ORDINARY SHARE | US Cents | |||||||||||
Basic (loss) earnings per ordinary share | ||||||||||||
The calculation of basic (loss) earnings per ordinary share is based on (losses) profits attributable to equity shareholders of ($2,230m) (2012: $897m; 2011: $1,587m) and 392,625,264 (2012: 386,766,345; 2011: 385,961,613) shares being the weighted average number of ordinary shares in issue during the financial year. | (568) | 232 | 411 | |||||||||
Diluted (loss) earnings per ordinary share | ||||||||||||
The calculation of diluted (loss) earnings per ordinary share is based on (losses) profits attributable to equity shareholders of ($2,560m) (2012: $747m; 2011: $1,493m) and 405,546,908 (2012: 422,131,159; 2011: 421,058,243) shares being the diluted number of ordinary shares. | (631) | 177 | 355 | |||||||||
In calculating the basic and diluted number of ordinary shares outstanding for the year, the following were taken into consideration: | Number of shares | |||||||||||
Ordinary shares | 389,184,639 | 382,757,790 | 381,621,687 | |||||||||
E ordinary shares(1) | 1,460,705 | 2,392,316 | 2,950,804 | |||||||||
Fully vested options(2) | 1,979,920 | 1,616,239 | 1,389,122 | |||||||||
Weighted average number of shares | 392,625,264 | 386,766,345 | 385,961,613 | |||||||||
Dilutive potential of share options | - | 1,840,199 | 1,572,015 | |||||||||
Dilutive potential of convertible bonds | 12,921,644 | 33,524,615 | 33,524,615 | |||||||||
Diluted number of ordinary shares | 405,546,908 | 422,131,159 | 421,058,243 | |||||||||
| Figures in million | US Dollars | |||||||||||
In calculating the diluted (loss) earnings attributable to equity shareholders, the following were taken into consideration: | ||||||||||||
(Loss) profit attributable to equity shareholders | (2,230) | 897 | 1,587 | |||||||||
Interest expense of convertible bonds, where dilutive | 26 | 63 | 63 | |||||||||
Amortisation of issue cost and discount of convertible bonds | - | 32 | 31 | |||||||||
Fair value adjustment on convertible bonds included in income | (356) | (245) | (188) | |||||||||
(Loss) profit attributable to equity shareholders used to calculate diluted earnings per share | (2,560) | 747 | 1,493 | |||||||||
The Company is disputing assessments received in some jurisdictions where it operates and these argumentsmandatory convertible bonds issued during 2010 (note 27) 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
| 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 | |||||||||
| (1) | As E ordinary shares participate in the profit available to ordinary shareholders, these shares were included in basic earnings per share. |
| (2) | ||||
| ||||
F-35
| 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 | ) | |||||||
(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. | ||||||||||||
| 2010 | 2009 | |||||||
| $ | $ | |||||||
| Cash classified as restricted for use comprise of the following: | ||||||||
| Cash restricted by prudential solvency requirements | 8 | 8 | ||||||
| Cash balances held by the Tropicana project | 1 | 3 | ||||||
| Other | 1 | 1 | ||||||
| 10 | 12 | |||||||
F-36
F - 38
| 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 | |||||||
| 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 | |||||||
| Metals in process | 331 | 324 | ||||||
| Ore stockpiles | 27 | 25 | ||||||
| Supplies | — | 1 | ||||||
| 358 | 350 | |||||||
Less: Heap leach inventory(1) | (331 | ) | (324 | ) | ||||
| 27 | 26 | |||||||
| 2010 | 2009 | 2008 | ||||||||||
| $ | $ | $ | ||||||||||
| Inventory write-downs (included in production costs) | 21 | 48 | 60 | |||||||||
| 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
| 2010 | 2009 | |||||||
| $ | $ | |||||||
| Acquired properties, at cost | 2,168 | 2,053 | ||||||
| Accumulated amortization | (1,332 | ) | (1,222 | ) | ||||
| Net book value December 31, | 836 | 831 | ||||||
| Figures in million | 2013 | 2012 | 2011 | |||||||||||||
| US Dollars | ||||||||||||||||
13 (LOSS) EARNINGS PER ORDINARY SHARE (continued) | ||||||||||||||||
Headline (loss) earnings | ||||||||||||||||
The (loss) profit attributable to equity shareholders was adjusted by the following to arrive at headline earnings: | ||||||||||||||||
(Loss) profit attributable to equity shareholders | (2,230) | 897 | 1,587 | |||||||||||||
Impairment (reversal) and derecognition of goodwill, tangible and intangible assets (notes 7, 15 and 16) | 3,029 | 346 | (120) | |||||||||||||
Tax on item above | (915) | (103) | 36 | |||||||||||||
Net amount | 2,114 | 243 | (84) | |||||||||||||
Net (profit) loss on disposal and derecognition of land, mineral rights, tangible assets and exploration properties (note 7) | (2) | 15 | 8 | |||||||||||||
Tax on item above | - | (4) | (5) | |||||||||||||
Net amount | (2) | 11 | 3 | |||||||||||||
Impairment of other investments (notes 7 and 19) | 30 | 16 | 21 | |||||||||||||
Profit on disposal of subsidiary ISS International Limited (note 7) | - | - | (2) | |||||||||||||
Profit on partial disposal of Rand Refinery Limited (note 7) | - | (14) | - | |||||||||||||
Impairment of investments in associates and joint ventures (notes 9 and 18) | 195 | 59 | 16 | |||||||||||||
Reversal of impairment in associates and joint ventures (notes 9, 18 and 25) | (31) | (2) | (20) | |||||||||||||
Loss on disposal of loan to joint venture (notes 9 and 18) | - | 2 | - | |||||||||||||
Special items of associates and joint ventures | 2 | (4) | - | |||||||||||||
Insurance claim recovery on capital items (note 7) | - | - | (3) | |||||||||||||
Tax on item above | - | - | 1 | |||||||||||||
Net amount | - | - | (2) | |||||||||||||
| 78 | 1,208 | 1,519 | ||||||||||||||
Headline earnings is calculated in accordance with Circular 2/2013 (2012: Circular 3/2012; 2011: Circular 3/2009) issued by the South African Institute of Chartered Accountants (SAICA). | ||||||||||||||||
Headline earnings is a requirement of the JSE Limited and is not a recognised measure under IFRS. Headline earnings as defined in Circular 2/2013 issued by SAICA, separates from earnings all separately identifiable remeasurements. It is not necessarily a measure of sustainable earnings. | ||||||||||||||||
| US Cents | ||||||||||||||||
Basic headline earnings per share | ||||||||||||||||
The calculation of basic headline earnings per ordinary share is based on basic headline earnings of $78m (2012: $1,208m; 2011: $1,519m) and 392,625,264 (2012: 386,766,345; 2011: 385,961,613) shares being the weighted average number of ordinary shares in issue during the year. | 20 | 312 | 394 | |||||||||||||
Diluted headline (loss) earnings per share | ||||||||||||||||
The calculation of diluted headline (loss) earnings per ordinary share is based on diluted headline (losses) profits of ($252m) (2012: $1,058m; 2011: $1,425m) and 405,546,908 (2012: 422,131,159; 2011: 421,058,423) shares being the weighted average number of ordinary shares in issue during the year. | (62) | 251 | 338 | |||||||||||||
| US Dollars | ||||||||||||||||
In calculating diluted headline earnings, the following were taken into consideration: | ||||||||||||||||
Headline earnings | 78 | 1,208 | 1,519 | |||||||||||||
Interest expense of convertible bonds, where dilutive | 26 | 63 | 63 | |||||||||||||
Amortisation of issue cost and discount of convertible bonds | - | 32 | 31 | |||||||||||||
Fair value adjustment on convertible bonds included in income | (356) | (245) | (188) | |||||||||||||
Diluted headline (loss) earnings | (252) | 1,058 | 1,425 | |||||||||||||
Comparative years have been restated for the adoption of goodwill by reporting unit as of December 31, 2010IFRIC 20 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 | ||||||||||||
| 2010 | 2009 | |||||||
| $ | $ | |||||||
Royalty rate concession agreement(1) | ||||||||
| Gross carrying value | 30 | 29 | ||||||
| Accumulated amortization | (13 | ) | (11 | ) | ||||
| 17 | 18 | |||||||
| 2010 | 2009 | 2008 | ||||||||||
| $ | $ | $ | ||||||||||
| Amortization expense | 2 | 2 | 2 | |||||||||
| 2011 | 2 | |||||||||||
| 2012 | 2 | |||||||||||
| 2013 | 2 | |||||||||||
| 2014 | 2 | |||||||||||
| 2015 | 2 | |||||||||||
F-38
F - 39
| 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 | |||||||||
| 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 | ||||||
F-39
| Figures in million | 2013 | 2012 | 2011 | ||||||||||||||
| US Dollars | |||||||||||||||||
14 DIVIDENDS | |||||||||||||||||
Ordinary shares | |||||||||||||||||
No. 109 of 80 SA cents per share was declared on 15 February 2011 and paid on 18 March 2011 (11 US cents per share). | - | - | 43 | ||||||||||||||
No. 110 of 90 SA cents per share was declared on 2 August 2011 and paid on 9 September 2011 (12 US cents per share). | - | - | 46 | ||||||||||||||
No. 111 of 90 SA cents per share was declared on 7 November 2011 and paid on 9 December 2011 (11 US cents per share). | - | - | 42 | ||||||||||||||
No. 112 of 200 SA cents per share was declared on 14 February 2012 and paid on 16 March 2012 (26 US cents per share). | - | 101 | - | ||||||||||||||
No. 113 of 100 SA cents per share was declared on 8 May 2012 and paid on 8 June 2012 (12 US cents per share). | - | 45 | - | ||||||||||||||
No. 114 of 100 SA cents per share was declared on 3 August 2012 and paid on 14 September 2012 (12 US cents per share). | - | 47 | - | ||||||||||||||
No. 115 of 50 SA cents per share was declared on 6 November 2012 and paid on 14 December 2012 (6 US cents per share). | - | 22 | - | ||||||||||||||
No. 116 of 50 SA cents per share was declared on 18 February 2013 and paid on 28 March 2013 (5 US cents per share). | 21 | - | - | ||||||||||||||
No. 117 of 50 SA cents per share was declared on 10 May 2013 and paid on 14 June 2013 (5 US cents per share). | 19 | - | - | ||||||||||||||
E ordinary shares | |||||||||||||||||
No. E9 of 40 SA cents per share was declared on 15 February 2011 and paid on 18 March 2011 (5.5 US cents per share). | - | - | - | ||||||||||||||
No. E10 of 45 SA cents per share was declared on 2 August 2011 and paid on 9 September 2011 (6 US cents per share). | - | - | - | ||||||||||||||
No. E11 of 45 SA cents per share was declared on 7 November 2011 and paid on 9 December 2011 (5.5 US cents per share). | - | - | - | ||||||||||||||
No. E12 of 100 SA cents per share was declared on 14 February 2012 and paid on 16 March 2012 (13 US cents per share). | - | - | - | ||||||||||||||
No. E13 of 50 SA cents per share was declared on 8 May 2012 and paid on 8 June 2012 (6 US cents per share). | - | - | - | ||||||||||||||
No. E14 of 50 SA cents per share was declared on 3 August 2012 and paid on 14 September 2012 (6 US cents per share). | - | - | - | ||||||||||||||
No. E15 of 25 SA cents per share was declared on 6 November 2012 and paid on 14 December 2012 (3 US cents per share). | - | - | - | ||||||||||||||
No. E16 of 25 SA cents per share was declared on 18 February 2013 and paid on 28 March 2013 (2.5 US cents per share). | - | - | - | ||||||||||||||
No. E17 of 25 SA cents per share was declared on 10 May 2013 and paid on 14 June 2013 (2.5 US cents per share). | - | - | - | ||||||||||||||
| 40 | 215 | 131 | |||||||||||||||
F - 40
| 15 | TANGIBLE ASSETS |
| Figures in million | Mine development costs | Mine infra- structure | Mineral rights dumps | Exploration and evaluation assets | Assets under construction | Land and buildings | Total | |||||||||||||||||||||||
| US Dollars | ||||||||||||||||||||||||||||||
Cost | ||||||||||||||||||||||||||||||
Balance at 1 January 2011 - restated | 7,211 | 3,222 | 1,065 | 34 | 502 | 74 | 12,108 | |||||||||||||||||||||||
Additions | ||||||||||||||||||||||||||||||
- project capital | 74 | 2 | - | - | 377 | 3 | 456 | |||||||||||||||||||||||
- stay-in-business capital | 660 | 279 | - | - | 182 | 3 | 1,124 | |||||||||||||||||||||||
Disposals | (7) | (20) | - | - | - | - | (27) | |||||||||||||||||||||||
Transfers and other movements(1) | 193 | 276 | - | - | (493) | - | (24) | |||||||||||||||||||||||
Finance costs capitalised (note 8)(2) | - | - | - | - | 3 | - | 3 | |||||||||||||||||||||||
Translation | (699) | (156) | (15) | - | (40) | (8) | (918) | |||||||||||||||||||||||
Balance at 31 December 2011 - restated | 7,432 | 3,603 | 1,050 | 34 | 531 | 72 | 12,722 | |||||||||||||||||||||||
Accumulated amortisation and impairments | ||||||||||||||||||||||||||||||
Balance at 1 January 2011 - restated | 3,719 | 1,678 | 532 | 31 | 58 | 9 | 6,027 | |||||||||||||||||||||||
Amortisation for the year (notes 4 and 33) | 586 | 227 | 9 | 1 | - | 2 | 825 | |||||||||||||||||||||||
Impairment and derecognition of assets (notes 7 and 13)(3) | 9 | 6 | - | - | - | - | 15 | |||||||||||||||||||||||
Impairment reversal (notes 7 and 13)(3) | (76) | - | (59) | - | - | - | (135) | |||||||||||||||||||||||
Disposals | (6) | (19) | - | - | - | - | (25) | |||||||||||||||||||||||
Transfers and other movements(1) | (12) | (27) | - | - | - | - | (39) | |||||||||||||||||||||||
Translation | (391) | (82) | (8) | - | (9) | (1) | (491) | |||||||||||||||||||||||
Balance at 31 December 2011 - restated | 3,829 | 1,783 | 474 | 32 | 49 | 10 | 6,177 | |||||||||||||||||||||||
Net book value at 31 December 2011 - restated | 3,603 | 1,820 | 576 | 2 | 482 | 62 | 6,545 | |||||||||||||||||||||||
Cost | ||||||||||||||||||||||||||||||
Balance at 1 January 2012 - restated | 7,432 | 3,603 | 1,050 | 34 | 531 | 72 | 12,722 | |||||||||||||||||||||||
Additions | ||||||||||||||||||||||||||||||
- project capital | 133 | 51 | - | - | 601 | 6 | 791 | |||||||||||||||||||||||
- stay-in-business capital | 624 | 328 | - | 2 | 192 | 3 | 1,149 | |||||||||||||||||||||||
Acquisition of subsidiary (note 34) | - | 603 | 8 | - | - | 5 | 616 | |||||||||||||||||||||||
Disposals | (1) | (26) | - | - | - | - | (27) | |||||||||||||||||||||||
Disposal of subsidiary (note 34) | - | (72) | - | - | - | (3) | (75) | |||||||||||||||||||||||
Transfers and other movements(1) | 111 | 243 | (110) | - | (239) | (1) | 4 | |||||||||||||||||||||||
Finance costs capitalised (note 8)(2) | - | - | - | - | 12 | - | 12 | |||||||||||||||||||||||
Translation | (165) | (53) | (3) | (1) | (13) | (2) | (237) | |||||||||||||||||||||||
Balance at 31 December 2012 - restated | 8,134 | 4,677 | 945 | 35 | 1,084 | 80 | 14,955 | |||||||||||||||||||||||
Accumulated amortisation and impairments | ||||||||||||||||||||||||||||||
Balance at 1 January 2012 - restated | 3,829 | 1,783 | 474 | 32 | 49 | 10 | 6,177 | |||||||||||||||||||||||
Amortisation for the year (notes 4 and 33) | 541 | 279 | 8 | - | - | 2 | 830 | |||||||||||||||||||||||
Impairment and derecognition of assets (notes 7 and 13)(3) | 254 | 87 | - | - | 15 | - | 356 | |||||||||||||||||||||||
Disposals | (1) | (25) | - | - | - | - | (26) | |||||||||||||||||||||||
Disposal of subsidiary (note 34) | - | (22) | - | - | - | - | (22) | |||||||||||||||||||||||
Transfers and other movements(1) | 32 | (8) | (41) | - | - | - | (17) | |||||||||||||||||||||||
Translation | (95) | (19) | (2) | (1) | (1) | (1) | (119) | |||||||||||||||||||||||
Balance at 31 December 2012 - restated | 4,560 | 2,075 | 439 | 31 | 63 | 11 | 7,179 | |||||||||||||||||||||||
Net book value at 31 December 2012 - restated | 3,574 | 2,602 | 506 | 4 | 1,021 | 69 | 7,776 | |||||||||||||||||||||||
F - 41
OTHER LONG-TERM ASSETSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 15 | TANGIBLE ASSETS(continued) |
| Figures in million | Mine development costs | Mine infra- structure | Mineral rights dumps | Exploration and evaluation assets | Assets under construction | Land and buildings | Total | |||||||||||||||||||||||
| US Dollars | �� | |||||||||||||||||||||||||||||
Cost | ||||||||||||||||||||||||||||||
Balance at 1 January 2013 | 8,134 | 4,677 | 945 | 35 | 1,084 | 80 | 14,955 | |||||||||||||||||||||||
Additions | ||||||||||||||||||||||||||||||
- project capital | 60 | 61 | - | - | 483 | 9 | 613 | |||||||||||||||||||||||
- stay-in-business capital | 530 | 255 | - | - | 119 | 3 | 907 | |||||||||||||||||||||||
Disposals | (2 | ) | (57 | ) | - | - | (82 | ) | - | (141 | ) | |||||||||||||||||||
Transfers and other movements(1) | (494 | ) | 310 | 17 | - | (748 | ) | (1 | ) | (916 | ) | |||||||||||||||||||
Finance costs capitalised (note 8)(2) | - | - | - | - | 5 | - | 5 | |||||||||||||||||||||||
Translation | (800 | ) | (280 | ) | (24 | ) | (1 | ) | (112 | ) | (8 | ) | (1,225 | ) | ||||||||||||||||
Balance at 31 December 2013 | 7,428 | 4,966 | 938 | 34 | 749 | 83 | 14,198 | |||||||||||||||||||||||
Accumulated amortisation and impairments | ||||||||||||||||||||||||||||||
Balance at 1 January 2013 | 4,560 | 2,075 | 439 | 31 | 63 | 11 | 7,179 | |||||||||||||||||||||||
Amortisation for the year (notes 4 and 33) | 483 | 282 | 8 | - | - | 2 | 775 | |||||||||||||||||||||||
Impairment and derecognition of assets (notes 7 and 13)(3) | 1,357 | 964 | 451 | - | 196 | 10 | 2,978 | |||||||||||||||||||||||
Disposals | (1 | ) | (31 | ) | - | - | - | - | (32 | ) | ||||||||||||||||||||
Transfers and other movements(1) | (885 | ) | 79 | 12 | - | (126 | ) | (3 | ) | (923 | ) | |||||||||||||||||||
Translation | (496 | ) | (75 | ) | (14 | ) | 1 | (7 | ) | (3 | ) | (594 | ) | |||||||||||||||||
Balance at 31 December 2013 | 5,018 | 3,294 | 896 | 32 | 126 | 17 | 9,383 | |||||||||||||||||||||||
Net book value at 31 December 2013 | 2,410 | 1,672 | 42 | 2 | 623 | 66 | 4,815 | |||||||||||||||||||||||
Included in the Margaret Water Companyamounts for mine infrastructure are assets held under finance leases with a net book value of nil (2012: $40m; 2011: $45m). Included in the amounts for land and AGA — Polymetal Strategic Alliance. An impairment lossbuildings are assets held under finance leases with a net book value of $24 million (net$14m (2012: $19m; 2011: $22m).
The majority of taxthe leased assets are pledged as security for the related finance leases.
No assets are encumbered by project finance.
Comparative years have been restated for the adoption of $nil million) was recognizedIFRIC 20. Refer note 39 for details.
| (1) | Transfers and other movements include amounts from deferred stripping, change in estimates of decommissioning assets, asset reclassifications and amounts written off. |
Transfers to non-current asset held for sale comprise assets with a net book value of $80m relating to Navachab which were transferred to non-current assets held for sale. |
| (2) | The weighted average capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation was 5.06% (2012: 6.54%; 2011: 6.86%). Interest capitalised relates to the Tropicana project in Australia. |
F - 42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| Figures in millions | 2013 | 2012 | 2011 | |||||||||||
| US Dollars | ||||||||||||||
15 TANGIBLE ASSETS (continued) | ||||||||||||||
(3) Impairment and derecognition of assets and impairment reversal include the following: | ||||||||||||||
Impairment of cash generating units | ||||||||||||||
South Africa | ||||||||||||||
Moab Khotsong | 293 | - | - | |||||||||||
The Moab cash generating unit impairment is the result of changes to the mine plan following a revision to capital expenditure and from factors such as declining gold price, an increasing discount rate and reduction in market capitalisation. As a result, Moab’s recoverable amount did not support its carrying value in 2013 and an impairment loss was recognised for mine development of $290m and for mine infrastructure of $3m. The recoverable amount was determined using a real pre-tax discount rate of 11.2% and was based on the impairment assumptions detailed below. | ||||||||||||||
Great Noligwa | - | 31 | - | |||||||||||
In 2012, the Great Noligwa cash generating unit impairment resulted from a revised mine plan. Factors such as reduction in Ore Reserve resulting from resource model changes, abandonment of certain areas, grade factors and an increase in the cost of extraction affected the mine plan. As a result, Great Noligwa’s recoverable amount did not support its carrying value and an impairment loss was recognised for mine development of $25m and mine infrastructure of $6m. The recoverable amount was determined using a real pre-tax discount of 13% and was based on the impairment assumptions detailed overleaf. | ||||||||||||||
Ghana | ||||||||||||||
Iduapriem | 74 | - | - | |||||||||||
The Iduapriem cash generating unit impairment is the result of factors such as declining gold price, an increasing discount rate and reduction in market capitalisation. As a result, Iduapriem’s recoverable amount did not support its carrying value in 2013 and an impairment loss was recognised for mine development of $74m. The recoverable amount was determined using a real pre-tax discount rate of 9.6% and was based on the impairment assumptions detailed below. | ||||||||||||||
Obuasi | 993 | - | - | |||||||||||
The Obuasi cash generating unit impairment is the result of factors such as declining gold price, an increasing discount rate and reduction in market capitalisation. As a result, Obuasi’s recoverable amount did not support its carrying value in 2013 and an impairment loss was recognised for mine development of $377m, mine infrastructure of $383m, mineral rights and dumps of $231m and assets under construction of $2m. The recoverable amount was determined using a real pre-tax discount rate of 8% and was based on the impairment assumptions detailed below. | ||||||||||||||
Guinea | ||||||||||||||
Siguiri | 25 | - | - | |||||||||||
The Siguiri cash generating unit impairment is the result of factors such as declining gold price, an increasing discount rate and reduction in market capitalisation. As a result, Siguiri’s recoverable amount did not support its carrying value in 2013 and an impairment loss was recognised for mine development of $25m. The recoverable amount was determined using a real pre-tax discount rate of 18.1% and was based on the impairment assumptions detailed below. | ||||||||||||||
Tanzania | ||||||||||||||
Geita | 555 | - | - | |||||||||||
The Geita cash generating unit impairment is the result of factors such as declining gold price, an increasing discount rate and reduction in market capitalisation. As a result, Geita’s recoverable amount did not support its carrying value in 2013 and an impairment loss was recognised for mine development of $187m, mine infrastructure of $153m and mineral rights and dumps of $215m. The recoverable amount was determined using a real pre-tax discount rate of 13.4% and was based on the impairment assumptions detailed in this note. | ||||||||||||||
F - 43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| Figures in millions | 2013 | 2012 | 2011 | |||||||||||
| US Dollars | ||||||||||||||
15 TANGIBLE ASSETS (continued) | ||||||||||||||
Impairment of cash generating units (continued) | ||||||||||||||
Americas | ||||||||||||||
Cripple Creek and Victor | 445 | - | - | |||||||||||
The Cripple Creek and Victor cash generating unit impairment is the result of factors such as declining gold price, an increasing discount rate and reduction in market capitalisation. As a result, Cripple Creek and Victor’s recoverable amount did not support its carrying value in 2013 and an impairment loss was recognised for mine development of $203m, mine infrastructure of $122m, mineral rights and dumps of $5m, assets under construction of $105m and land $10m. The recoverable amount was determined using a real pre-tax discount rate of 6.2% and was based on the impairment assumptions detailed below. | ||||||||||||||
AngloGold Ashanti Mineração | 332 | - | - | |||||||||||
The AngloGold Ashanti Mineração cash generating unit impairment is the result of factors such as declining gold price, an increasing discount rate and reduction in market capitalisation. As a result, AngloGold Ashanti Mineração’s recoverable amount did not support its carrying value in 2013 and an impairment loss was recognised for mine development of $150m and mine infrastructure of $182m. The recoverable amount was determined using a real pre-tax discount rate of 9.1% and was based on the impairment assumptions detailed below. | ||||||||||||||
Cerro Vanguardia | 132 | - | - | |||||||||||
The Cerro Vanguardia cash generating unit impairment is the result of factors such as declining gold price, an increasing discount rate and reduction in market capitalisation. As a result, Cerro Vanguardia’s recoverable amount did not support its carrying value in 2013 and an impairment loss was recognised for mine development of $45m, mine infrastructure of $86m and assets under construction of $1m. The recoverable amount was determined using a real pre-tax discount rate of 13.5% and was based on the impairment assumptions detailed below. | ||||||||||||||
Derecognition of assets | ||||||||||||||
South Africa | ||||||||||||||
Vaal River Surface operations - mine infrastructure and assets under construction | 14 | - | - | |||||||||||
In 2013, due to changes in the mine plan the SX Replacement Project (South Uranium Plant) has been abandoned and will not generate future cash flows resulting in the derecognition of mine infrastructure of $10m and assets under construction of $4m. | ||||||||||||||
Kopanang - mine development costs | - | 14 | - | |||||||||||
In 2012, due to changes in the mine plan, certain areas were abandoned and were not expected to generate future cash flows. | ||||||||||||||
TauTona VCR shaft pillar and ore pass - mine development costs and mine infrastructure | ||||||||||||||
In 2011, due to a change in the mine plan resulting from safety-related concerns following seismic activity, the VCR shaft pillar and ore pass development were abandoned. | - | - | 9 | |||||||||||
Savuka - mine development costs | ||||||||||||||
In 2011, due to a change in the mine plan, the Savuka assets were abandoned. | - | - | 1 | |||||||||||
Guinea | ||||||||||||||
Siguiri - mine development costs | - | 14 | - | |||||||||||
In 2012, due to depleted reserves in Sintroko, Kozan and Kintinia pits, exploration and pit dewatering costs previously capitalised were not expected to generate future economic value. Certain areas were also abandoned due to safety-related concerns. | ||||||||||||||
Ghana | ||||||||||||||
Obuasi - mine development costs, mine infrastructure, mineral rights and dumps and assets under construction | - | 296 | - | |||||||||||
In 2012, due to a change in the mine plan, certain areas were abandoned mainly due to depletion of reserves and assets in poor physical condition or considered obsolete were also derecognised. A loss was recognised for mine development of $201m, mine infrastructure $80m and assets under construction $15m. | ||||||||||||||
F - 44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| Figures in millions | 2013 | 2012 | 2011 | |||||||||||
| US Dollars | ||||||||||||||
15 TANGIBLE ASSETS (continued) | ||||||||||||||
Derecognition of assets (continued) | ||||||||||||||
Democratic Republic of the Congo | ||||||||||||||
Mongbwalu - mine infrastructure and assets under construction | 105 | - | - | |||||||||||
In 2013, the Mongbwalu project in the Democratic Republic of the Congo was discontinued and will not generate future cash flows. A loss was recognised for mine infrastructure of $21m and assets under construction $84m. | ||||||||||||||
Other | ||||||||||||||
Derecognition of other mine development and mine infrastructure. | 10 | 1 | 5 | |||||||||||
| 2,978 | 356 | 15 | ||||||||||||
Impairment reversal of cash generating unit | ||||||||||||||
Tanzania | ||||||||||||||
Geita mine - cash generating unit | - | - | 135 | |||||||||||
In 2011, the Geita mine impairment recognised in 2008 was reversed. The impairment reversal was largely due to an increase in the long-term real gold price, improved production, higher grades and lower unit costs, resulting in increased future discounted cash flows. The recoverable amount was determined using a real pre-tax discount rate of 12.3% and was based on the impairment assumptions detailed below. | ||||||||||||||
Impairment calculation assumptions - tangible assets and goodwill
Management assumptions for the value in use of tangible assets and goodwill include:
the gold price assumption represents management’s best estimate of the future price of gold. In arriving at the estimated long-term gold price, management considered all available market information, including current prices, historical averages, and forward-pricing curves. A long-term real gold price of $1,269/oz (2012: $1,584/oz; 2011: $1,530/oz) is based on a range of economic and market conditions that are expected to exist over the remaining useful life of the assets.
Annual life of mine plans take into account the following:
proven and probable Ore Reserve;
value beyond proven and probable reserves (including exploration potential) determined using the gold price assumption referred to above;
In determining the impairment, lossthe real pre-tax discount rate, per cash generating unit ranged from 6.2% to 18.1% which was derived from the group’s weighted average cost of capital (WACC) and risk factors consistent with the basis used in 2012 and 2011. At 31 December 2013, the group WACC was 7.3% (real post-tax) which is reflected204 basis points higher than in equity income2012 of 5.3% (2011: 5.3%), and is based on the average capital structure of the group and three major gold companies considered to be appropriate peers. In determining the WACC for each cash generating unit, sovereign and mining risk factors are considered to determine country specific risks. The country risk factor is based on the group’s internal assessment of country risk relative to the issues experienced in the countries in which it operates and explores. Project risk has been applied to cash flows relating to certain mines that are deep level underground mining projects below infrastructure in South Africa and Continental Africa region;
foreign currency cash flows translated at estimated forward exchange rates and then discounted using appropriate discount rates for that currency;
cash flows used in impairment calculations are based on life of mine plans which range from 3 years to 47 years; and
variable operating cash flows are increased at local Consumer Price Index rates.
The group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. In addition, goodwill is tested on an annual basis for impairment. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each cash generating unit. Expected future cash flows used to determine the value in use of goodwill and tangible assets are inherently uncertain and could materially change over time. The cash flows are significantly affected by a number of factors including reserves and production estimates, together with economic factors such as spot gold prices, discount rates, foreign currency exchange rates, estimates of costs to produce reserves and future capital expenditure.
Should management’s estimate of the future not reflect actual events, further impairments may be identified. Factors affecting the estimates include:
changes in proven and probable Ore Reserve as well as value beyond proven and probable reserves;
the grade of Ore Reserve 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 at mine sites; and
changes in capital, operating mining, processing and reclamation costs and foreign exchange rates.
There were no impairment indicators for cash generating units during 2011.
F - 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 16 | INTANGIBLE ASSETS |
| Figures in million | Goodwill | Software and licences | Royalty, tax rate concession and other | Total | ||||||||||||
| US Dollars | ||||||||||||||||
Cost | ||||||||||||||||
Balance at 1 January 2011 | 433 | - | 50 | 483 | ||||||||||||
Additions | - | 16 | - | 16 | ||||||||||||
Translation | 2 | - | - | 2 | ||||||||||||
Balance at 31 December 2011 | 435 | 16 | 50 | 501 | ||||||||||||
Accumulated amortisation and impairments | ||||||||||||||||
Balance at 1 January 2011 | 256 | - | 33 | 289 | ||||||||||||
Amortisation for the year (notes 4 and 33) | - | - | 2 | 2 | ||||||||||||
Balance at 31 December 2011 | 256 | - | 35 | 291 | ||||||||||||
Net book value at 31 December 2011(1) | 179 | 16 | 15 | 210 | ||||||||||||
Cost | ||||||||||||||||
Balance at 1 January 2012 | 435 | 16 | 50 | 501 | ||||||||||||
Additions | - | 78 | 1 | 79 | ||||||||||||
Acquisition of subsidiary (note 34) | 14 | - | - | 14 | ||||||||||||
Transfers and other movements | - | - | 7 | 7 | ||||||||||||
Translation | 2 | (2) | - | - | ||||||||||||
Balance at 31 December 2012 | 451 | 92 | 58 | 601 | ||||||||||||
Accumulated amortisation and impairments | ||||||||||||||||
Balance at 1 January 2012 | 256 | - | 35 | 291 | ||||||||||||
Amortisation for the year (notes 4 and 33) | - | - | 5 | 5 | ||||||||||||
Impairment reversal (notes 7 and 13)(2) | - | - | (10) | (10) | ||||||||||||
Balance at 31 December 2012 | 256 | - | 30 | 286 | ||||||||||||
Net book value at 31 December 2012(1) | 195 | 92 | 28 | 315 | ||||||||||||
Cost | ||||||||||||||||
Balance at 1 January 2013 | 451 | 92 | 58 | 601 | ||||||||||||
Additions | - | 67 | 1 | 68 | ||||||||||||
Disposals | - | - | (1) | (1) | ||||||||||||
Transfers and other movements | - | (3) | 2 | (1) | ||||||||||||
Transfer to asset held for sale | (2) | (2) | - | (4) | ||||||||||||
Translation | (33) | (13) | - | (46) | ||||||||||||
Balance at 31 December 2013 | 416 | 141 | 60 | 617 | ||||||||||||
Accumulated amortisation and impairments | ||||||||||||||||
Balance at 1 January 2013 | 256 | - | 30 | 286 | ||||||||||||
Amortisation for the year (notes 4 and 33) | - | 19 | 5 | 24 | ||||||||||||
Impairment (notes 7 and 13) | 15 | 33 | 3 | 51 | ||||||||||||
Disposals | - | - | (1) | (1) | ||||||||||||
Transfer and other movements | - | - | 1 | 1 | ||||||||||||
Transfer to asset held for sale | (2) | - | - | (2) | ||||||||||||
Translation | (7) | (2) | - | (9) | ||||||||||||
Balance at 31 December 2013 | 262 | 50 | 38 | 350 | ||||||||||||
Net book value at 31 December 2013(1) | 154 | 91 | 22 | 267 | ||||||||||||
F - 46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| Figures in millions | 2013 | 2012 | 2011 | |||||||||||
| US Dollars | ||||||||||||||
16 INTANGIBLE ASSETS (continued) | ||||||||||||||
(1) Net book value of goodwill allocated to each of the cash generating units (CGUs): | ||||||||||||||
- Sunrise Dam | 136 | 159 | 156 | |||||||||||
- AngloGold Ashanti Córrego do Sitío Mineração(3) | - | 15 | 15 | |||||||||||
- First Uranium (Pty) Limited | 10 | 13 | - | |||||||||||
- Serra Grande | 8 | 8 | 8 | |||||||||||
(note 2) | 154 | 195 | 179 | |||||||||||
Real pre-tax discount rates applied in impairment calculations on CGUs for which the carrying amount of goodwill is significant are as follows: | ||||||||||||||
Sunrise Dam(4) | 7.1 | % | 6.1 | % | 8.4 | % | ||||||||
| (2) | As part of the stability agreement entered into in 2004, the Government of Ghana agreed to a concession on the royalty payments by maintaining a rate of 3% for 15 years from 2004. The impairment reversal during 2012 relates to the corporate tax rate concession which was granted at a rate of 30% for the Ashanti business combination in 2004. During 2005, the corporate tax rate in Ghana decreased to 25% and the tax rate concession, which expires in 2019, was fully impaired. During 2012, the corporate tax rate on mining companies was increased from 25% to 35% resulting in an impairment reversal. |
| (3) | Goodwill has been allocated to its respective CGU’s where it is tested for impairment as part of the CGU (note 15). The group reviews and tests the carrying value of goodwill on an annual basis for impairment. Following the impairment review, goodwill to the value of $15m at AngloGold Ashanti Córrego do Sitío Mineração was impaired utilising a real pre-tax discount rate of 9.1% during 2013. |
| (4) | The discount rates for 2013 were determined on a basis consistent with the 2012 and 2011 discount rates. The value in use recoverable amount of the CGU is $476m (2012: $1,543m; 2011: $821m). |
F - 47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 17 | MATERIAL PARTLY-OWNED SUBSIDIARIES |
| Name | Non-controlling interest % holding | Country of incorporation and operation | ||||||||||||||
| 2013 | 2012 | �� | 2011 | |||||||||||||
Cerro Vanguardia S.A. (CVSA) | 7.50 | 7.50 | 7.50 | Argentina | ||||||||||||
Société AngloGold Ashanti de Guinée S.A. (Siguiri) | 15.00 | 15.00 | 15.00 | Republic of Guinea | ||||||||||||
Mineração Serra Grande S.A. (MSG)(1) | - | - | 50.00 | Brazil | ||||||||||||
Rand Refinery Limited (Rand Refinery) (2) | - | - | 46.97 | South Africa | ||||||||||||
| (1) | On 28 June 2012, AngloGold Ashanti Limited acquired the remaining 50% stake in the Serra Grande mine. |
| (2) | In early December 2012, AngloGold Ashanti Limited disposed of a 5% interest in Rand Refinery Limited, with the remaining interest being accounted for as an associate (note 18). |
Financial information of subsidiaries that have material non-controlling interests are provided below:
| Figures in millions | 2013 | 2012 | 2011 | |||||||||||
| US Dollars | ||||||||||||||
Profit allocated to material non-controlling interest | ||||||||||||||
Cerro Vanguardia S.A. | 1 | 12 | 10 | |||||||||||
Société AngloGold Ashanti de Guinée S.A. | 6 | 8 | 15 | |||||||||||
Mineração Serra Grande S.A. | - | 9 | 13 | |||||||||||
Rand Refinery Limited | - | 16 | 9 | |||||||||||
Accumulated balances of material non-controlling interests | ||||||||||||||
Cerro Vanguardia S.A. | 7 | 15 | 14 | |||||||||||
Société AngloGold Ashanti de Guinée S.A. | 24 | 31 | 30 | |||||||||||
Mineração Serra Grande S.A. | - | - | 63 | |||||||||||
Rand Refinery Limited | - | - | 30 | |||||||||||
Summarised financial information of material partly-owned subsidiaries is as follows. The information is based on amounts including inter-company balances.
| Figures in millions | CVSA | Siguiri | MSG | Rand Refinery | ||||||||||||||
| US Dollars | ||||||||||||||||||
Statement of profit or loss for 2013 | ||||||||||||||||||
Revenue | 425 | 452 | - | - | ||||||||||||||
Profit for the year | 14 | 39 | - | - | ||||||||||||||
Other comprehensive income for the year, net of tax | - | - | - | - | ||||||||||||||
Total comprehensive income for the year, net of tax | 14 | 39 | - | - | ||||||||||||||
Attributable to non-controlling interests | 1 | 6 | - | - | ||||||||||||||
Dividends paid to non-controlling interests | (8) | (14) | - | - | ||||||||||||||
Statement of profit or loss for 2012 | ||||||||||||||||||
Revenue | 485 | 457 | 108 | 2 | ||||||||||||||
Profit (loss) for the year | 150 | 72 | 19 | (14) | ||||||||||||||
Other comprehensive income for the year, net of tax | - | - | - | 1 | ||||||||||||||
Total comprehensive income (loss) for the year, net of tax | 150 | 72 | 19 | (13) | ||||||||||||||
Attributable to non-controlling interests | 12 | 8 | 9 | 16 | ||||||||||||||
Dividends paid to non-controlling interests | (10) | (6) | (5) | - | ||||||||||||||
Statement of profit or loss for 2011 | ||||||||||||||||||
Revenue | 385 | 479 | 203 | 3 | ||||||||||||||
Profit for the year | 130 | 98 | 25 | 18 | ||||||||||||||
Other comprehensive income for the year, net of tax | - | - | - | - | ||||||||||||||
Total comprehensive income for the year, net of tax | 130 | 98 | 25 | 18 | ||||||||||||||
Attributable to non-controlling interests | 10 | 15 | 13 | 9 | ||||||||||||||
Dividends paid to non-controlling interests | (7) | (14) | (17) | - | ||||||||||||||
F - 48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 17 | MATERIAL PARTLY-OWNED SUBSIDIARIES (continued) |
Summarised financial information of subsidiaries is as follows. The information is based on amounts before inter-company eliminations.
| Figures in million | CVSA | Siguiri | MSG | Rand Refinery | ||||||||||||||
| US Dollars | ||||||||||||||||||
| Statement of financial position as at 31 December 2013 | ||||||||||||||||||
| Non-current assets | 192 | 151 | - | - | ||||||||||||||
| Current assets | 175 | 165 | - | - | ||||||||||||||
| Non-current liabilities | (74 | ) | (76 | ) | - | - | ||||||||||||
| Current liabilities | (181 | ) | (51 | ) | - | - | ||||||||||||
| Total equity | 112 | 189 | - | - | ||||||||||||||
| Statement of financial position as at 31 December 2012 | ||||||||||||||||||
| Non-current assets | 298 | 181 | - | - | ||||||||||||||
| Current assets | 207 | 211 | - | - | ||||||||||||||
| Non-current liabilities | (102 | ) | (86 | ) | - | - | ||||||||||||
| Current liabilities | (181 | ) | (66 | ) | - | - | ||||||||||||
| Total equity | 222 | 240 | - | - | ||||||||||||||
| Statement of financial position as at 31 December 2011 | ||||||||||||||||||
| Non-current assets | 237 | 180 | 180 | 36 | ||||||||||||||
| Current assets | 117 | 179 | 42 | 47 | ||||||||||||||
| Non-current liabilities | (83 | ) | (82 | ) | (49 | ) | (6 | ) | ||||||||||
| Current liabilities | (76 | ) | (69 | ) | (43 | ) | (14 | ) | ||||||||||
| Total equity | 195 | 208 | 130 | 63 | ||||||||||||||
| Statement of cash flows for the year ended 31 December 2013 | ||||||||||||||||||
| Cash inflow from operating activities | 116 | 94 | - | - | ||||||||||||||
| Cash outflow from investing activities | (69 | ) | (30 | ) | - | - | ||||||||||||
| Cash outflow from financing activities | (107 | ) | (92 | ) | - | - | ||||||||||||
| Net decrease in cash and cash equivalents | (60 | ) | (28 | ) | - | - | ||||||||||||
| Statement of cash flows for the year ended 31 December 2012 | ||||||||||||||||||
| Cash inflow from operating activities | 300 | 72 | 26 | 49 | ||||||||||||||
| Cash outflow from investing activities | (137 | ) | (33 | ) | (14 | ) | (54 | ) | ||||||||||
| Cash outflow from financing activities | (123 | ) | (40 | ) | (1 | ) | - | |||||||||||
| Net increase (decrease) in cash and cash equivalents | 40 | (1 | ) | 11 | (5 | ) | ||||||||||||
| Statement of cash flows for the year ended 31 December 2011 | ||||||||||||||||||
| Cash inflow from operating activities | 119 | 132 | 64 | 4 | ||||||||||||||
| Cash outflow from investing activities | (87 | ) | (18 | ) | (43 | ) | (8 | ) | ||||||||||
| Cash (outflow) inflow from financing activities | (63 | ) | (89 | ) | (40 | ) | 1 | |||||||||||
| Net (decrease) increase in cash and cash equivalents | (31 | ) | 25 | (19 | ) | (3 | ) | |||||||||||
F - 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| Figures in millions | 2013 | 2012 | 2011 | |||||||||||
| US Dollars | ||||||||||||||
18 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES | ||||||||||||||
Carrying value | ||||||||||||||
Investments in associates | 62 | 92 | 47 | |||||||||||
Investments in joint ventures | 1,265 | 955 | 644 | |||||||||||
| 1,327 | 1,047 | 691 | ||||||||||||
Investments in associates for 2010.
| Name | Effective % | Description | Country of incorporation and operation | |||||||||||||
| 2013 | 2012 | 2011 | ||||||||||||||
Listed associates | ||||||||||||||||
Trans-Siberian Gold plc | 31.17 | 31.17 | 30.90 | Exploration and mine development | United Kingdom operating in Russia | |||||||||||
Unlisted associates | ||||||||||||||||
Rand Refinery Limited(2) | 42.43 | 48.03 | - | Smelting and refining of gold | South Africa | |||||||||||
| Figures in millions | 2013 | 2012 | 2011 | |||||||||||
| US Dollars | ||||||||||||||
Carrying value of associates | ||||||||||||||
Trans-Siberian Gold plc(1) | 7 | 22 | 35 | |||||||||||
Rand Refinery Limited (note 34) | 46 | 57 | - | |||||||||||
Other | 9 | 13 | 12 | |||||||||||
| 62 | 92 | 47 | ||||||||||||
Equity accounting of Trans-Siberian Gold plc is based on results to 30 September. | ||||||||||||||
Equity accounting of Rand Refinery is based on results from the management accounts to 30 November. | ||||||||||||||
Net impairment of investments in associates | ||||||||||||||
Trans-Siberian Gold plc | (13) | (17) | (2) | |||||||||||
Other | (1) | (1) | (3) | |||||||||||
(Notes 9 and 13) | (14) | (18) | (5) | |||||||||||
The impairment indicators considered the quoted share price where available, current financial position and operating results. Impairments of understanding with Polyholding Limited$14m (2012: $20m; 2011: $5m) were recorded and an impairment reversal of nil (2012: $2m; 2011: nil) was recognised in the income statement relating to Trans-Siberian Gold plc due to the disposalincrease in the listed share price.
| (1) | At 31 December 2013, the fair value of the group’s investment in Trans-Siberian Gold plc was $14m (2012: $22m; 2011: $35m). |
| (2) | During the year the group disposed of 5.6% of Rand Refinery Limited for an amount of $6m. |
F - 50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 18 | INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued) |
Summarised financial information of associates is as follows (not attributable): | ||||||||
| Figures in million | Trans-Siberian Gold plc | Rand Refinery Limited | ||||||
| US Dollars | ||||||||
Statement of profit or loss for 2013 | ||||||||
Revenue | - | 84 | ||||||
Operating costs and expenses | 1 | (67) | ||||||
Finance costs and unwinding of obligations | (7) | - | ||||||
Interest received | - | 1 | ||||||
Taxation | (2) | (4) | ||||||
(Loss) profit for the year | (8) | 14 | ||||||
Other comprehensive income for the year, net of tax | - | - | ||||||
Total comprehensive (loss) income for the year, net of tax | (8) | 14 | ||||||
Statement of profit or loss for 2012 | ||||||||
Revenue | 33 | - | ||||||
Operating costs and expenses | (19) | - | ||||||
Finance costs and unwinding of obligations | (2) | - | ||||||
Taxation | 2 | - | ||||||
Profit for the year | 14 | - | ||||||
Other comprehensive loss for the year, net of tax | - | (1) | ||||||
Total comprehensive income (loss) for the year, net of tax | 14 | (1) | ||||||
Statement of profit or loss for 2011 | ||||||||
Revenue | - | - | ||||||
Operating costs and expenses | (3) | - | ||||||
Taxation | (1) | - | ||||||
Loss for the year | (4) | - | ||||||
Other comprehensive income for the year, net of tax | - | - | ||||||
Total comprehensive loss for the year, net of tax | (4) | - | ||||||
| Figures in millions | 2013 | 2012 | 2011 | |||||||||
| US Dollars | ||||||||||||
Aggregate statement of profit or loss for immaterial associates (attributable) | ||||||||||||
Revenue | 7 | 13 | 13 | |||||||||
Operating costs and expenses | (8) | (14) | (13) | |||||||||
Loss for the year | (1) | (1) | - | |||||||||
Other comprehensive income for the year, net of tax | - | - | - | |||||||||
Total comprehensive loss for the year, net of tax | (1) | (1) | - | |||||||||
Dividends received from associates | - | 1 | - | |||||||||
F - 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 18 | INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued) |
Summarised financial information of associates is as follows (not attributable): |
| |||||||
| Figures in million | Trans-Siberian Gold plc | Rand Refinery Limited | ||||||
| US Dollars | ||||||||
Statement of financial position as at 31 December 2013 | ||||||||
Non-current assets | 104 | 73 | ||||||
Current assets | 21 | 19 | ||||||
Cash and cash equivalents | - | 19 | ||||||
Total assets | 125 | 111 | ||||||
Non-current financial liabilities | 1 | - | ||||||
Other non-current liabilities | - | 6 | ||||||
Current financial liabilities | 36 | - | ||||||
Other current liabilities | - | 18 | ||||||
Total liabilities | 37 | 24 | ||||||
Net assets | 88 | 87 | ||||||
Group’s share of net assets | 27 | 37 | ||||||
Goodwill | - | 9 | ||||||
Impairment of investment in associate | (19) | - | ||||||
Other | (1) | - | ||||||
Carrying amount of interest in associates | 7 | 46 | ||||||
Statement of financial position as at 31 December 2012 | ||||||||
Non-current assets | 120 | 57 | ||||||
Current assets | 15 | 35 | ||||||
Cash and cash equivalents | 4 | 31 | ||||||
Total assets | 139 | 123 | ||||||
Non-current financial liabilities | 24 | - | ||||||
Other non-current liabilities | - | 7 | ||||||
Current financial liabilities | 22 | 23 | ||||||
Total liabilities | 46 | 30 | ||||||
Net assets | 93 | 93 | ||||||
Group’s share of net assets | 29 | 45 | ||||||
Goodwill | - | 12 | ||||||
Impairment of investment in associate | (6) | - | ||||||
Other | (1) | - | ||||||
Carrying amount of interest in associates | 22 | 57 | ||||||
Statement of financial position as at 31 December 2011 | ||||||||
Non-current assets | 129 | - | ||||||
Current assets | 4 | - | ||||||
Cash and cash equivalents | 3 | - | ||||||
Total assets | 136 | - | ||||||
Non-current financial liabilities | 53 | - | ||||||
Current financial liabilities | 7 | - | ||||||
Total liabilities | 60 | - | ||||||
Net assets | 76 | - | ||||||
Group’s share of net assets | 23 | - | ||||||
Goodwill | 8 | - | ||||||
Other | 4 | - | ||||||
Carrying amount of interest in associates | 35 | - | ||||||
F - 52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 18 | INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued) |
Investments in joint ventures include: | ||||||||||||||||
| Name | Effective % | Description | Country of incorporation and operation | |||||||||||||
| 2013 | 2012 | 2011 | ||||||||||||||
Kibali Goldmines s.p.r.l.(1) | 45 | 45 | 45 | Exploration and mine development | The Democratic Republic of the Congo | |||||||||||
Société des Mines de Morila S.A. (Morila) | 40 | 40 | 40 | Commercial exploitation of gold | Mali | |||||||||||
Société d’Exploitation des Mines d’Or de Sadiola S.A. (Sadiola) | 41 | 41 | 41 | Commercial exploitation of gold | Mali | |||||||||||
(1) AngloGold Ashanti Limited has a 50% interest in the Kibali (Jersey) Limited (Kibali) which holds our effective 45% interest in Kibali Goldmines s.p.r.l. | ||||||||||||||||
| Figures in millions | 2013 | 2012 | 2011 | |||||||||
| US Dollars | ||||||||||||
Carrying value of joint ventures | ||||||||||||
Kibali | 1,241 | 797 | 497 | |||||||||
Morila | 8 | 19 | 41 | |||||||||
Sadiola | - | 136 | 85 | |||||||||
Immaterial joint ventures | 16 | 3 | 21 | |||||||||
| 1,265 | 955 | 644 | ||||||||||
(Impairment) reversal of investments in joint ventures | ||||||||||||
Sadiola | (166) | - | - | |||||||||
Morila | (13) | - | - | |||||||||
Other | (2) | (39) | 9 | |||||||||
| (181) | (39) | 9 | ||||||||||
Loss on disposal of loan to joint venture | - | (2) | - | |||||||||
Recovery of a loan previously impaired | 31 | - | - | |||||||||
(Notes 9 and 13) | (150) | (41) | 9 | |||||||||
The impairment indicators considered the current financial position and operating results. Impairments of Amikan. Amikan holds mining$181m (2012: $39m; 2011: $11m) were recorded 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 lossreversal of $9 million (net$31m (2012: nil; 2011: $20m) was recognised in the income statement. During 2011, the AGA-Polymetal Strategic Alliance impairment of tax of $nil million) on Amikan$20m was reversed to reduceincrease the carrying amount of the investment to fair value. value less costs to sell (note 25).
Comparative years have been restated for the adoption of IFRIC 20. Refer to changes in accounting policies (note 39) for details.
The impairment loss was reflected in equity income in associatesunrecognised share of losses of the joint ventures for 2009.
Summarised financial information 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. | ||||||||||||
F-40
| Figures in millions | Kibali | Morila | Sadiola | |||||||||
| US Dollars | ||||||||||||
Statement of profit or loss for 2013 | ||||||||||||
Revenue | 109 | 199 | 295 | |||||||||
Other operating costs and expenses | (44) | (113) | (344) | |||||||||
Amortisation of tangible and intangible assets | (15) | (4) | (5) | |||||||||
Finance costs and unwinding of obligations | (1) | (1) | (1) | |||||||||
Interest received | 4 | - | 1 | |||||||||
Taxation | 5 | (34) | (14) | |||||||||
Profit (loss) for the year | 58 | 47 | (68) | |||||||||
Other comprehensive income for the year, net of tax | - | - | - | |||||||||
Total comprehensive income (loss) for the year, net of tax | 58 | 47 | (68) | |||||||||
Dividends received from joint ventures | - | 45 | - | |||||||||
F - 53
| 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 | |||||||
| 18 | ||
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued) |
F-41
Summarised financial information of associates is as follows (not attributable):
| Figures in million | Kibali | Morila | Sadiola | |||||||||
| US Dollars | ||||||||||||
Statement of profit or loss for 2012 | ||||||||||||
Revenue | - | 337 | 411 | |||||||||
Other operating costs and expenses | (2) | (156) | (297) | |||||||||
Amortisation of tangible and intangible assets | (2) | (10) | (6) | |||||||||
Finance costs and unwinding of obligations | - | (1) | (2) | |||||||||
Interest received | 1 | - | - | |||||||||
Taxation | - | (44) | (29) | |||||||||
(Loss) profit for the year | (3) | 126 | 77 | |||||||||
Other comprehensive income for the year, net of tax | - | - | - | |||||||||
Total comprehensive (loss) income for the year, net of tax | (3) | 126 | 77 | |||||||||
Dividends received from joint ventures | - | 180 | 41 | |||||||||
Statement of profit or loss for 2011 | ||||||||||||
Revenue | - | 392 | 460 | |||||||||
Other operating income (costs and expenses) | 1 | (205) | (265) | |||||||||
Amortisation of tangible and intangible assets | (2) | (11) | (5) | |||||||||
Finance costs and unwinding of obligations | - | (1) | (2) | |||||||||
Interest received | 1 | - | - | |||||||||
Taxation | - | (60) | (63) | |||||||||
Profit for the year | - | 115 | 125 | |||||||||
Other comprehensive income for the year, net of tax | - | - | - | |||||||||
Total comprehensive income for the year, net of tax | - | 115 | 125 | |||||||||
Dividends received from joint ventures | - | 190 | 87 | |||||||||
| Figures in million | 2013 | 2012 | 2011 | |||||||||
| US Dollars | ||||||||||||
Aggregate statement of profit or loss for immaterial joint ventures (attributable) | ||||||||||||
Revenue | 42 | 55 | 50 | |||||||||
Other operating costs and expenses | (87) | (110) | (77) | |||||||||
Amortisation of tangible and intangible assets | (2) | (3) | (1) | |||||||||
Taxation | (2) | - | (1) | |||||||||
Loss for the year | (49) | (58) | (29) | |||||||||
Other comprehensive income for the year, net of tax | - | - | - | |||||||||
Total comprehensive loss for the year, net of tax | (49) | (58) | (29) | |||||||||
| Figures in million | Kibali | Morila | Sadiola | |||||||||
| US Dollars | ||||||||||||
Statement of financial position as at 31 December 2013 | ||||||||||||
Non-current assets | 2,353 | 39 | 360 | |||||||||
Current assets | 258 | 70 | 165 | |||||||||
Cash and cash equivalents | 5 | 3 | 4 | |||||||||
Total assets | 2,616 | 112 | 529 | |||||||||
Non-current financial liabilities | 54 | 5 | - | |||||||||
Other non-current liabilities | 8 | 12 | 67 | |||||||||
Current financial liabilities | 6 | - | 182 | |||||||||
Other current liabilities | 91 | 44 | 105 | |||||||||
Total liabilities | 159 | 61 | 354 | |||||||||
Net assets | 2,457 | 51 | 175 | |||||||||
Group’s share of net assets | 1,229 | 20 | 72 | |||||||||
Loans advanced to the joint venture | - | - | 74 | |||||||||
Impairment of investment in the joint venture | - | (12) | (166) | |||||||||
Other | 12 | - | 20 | |||||||||
Carrying amount of interest in joint ventures | 1,241 | 8 | - | |||||||||
F - 54
| 18 | INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (continued) |
Summarised financial statementsinformation of the joint ventures which have been equity accounted areassociates is as follows (100 percent shown)(not attributable):
| 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 | ||||||||||
| Figures in million | Kibali | Morila | Sadiola | |||||||||
| US Dollars | ||||||||||||
Statement of financial position as at 31 December 2012 | ||||||||||||
Non-current assets | 1,599 | 27 | 311 | |||||||||
Current assets | 83 | 57 | 133 | |||||||||
Cash and cash equivalents | 12 | 23 | 29 | |||||||||
Total assets | 1,694 | 107 | 473 | |||||||||
Non-current financial liabilities | 53 | 5 | - | |||||||||
Other non-current liabilities | 5 | 12 | 64 | |||||||||
Current financial liabilities | 18 | - | 88 | |||||||||
Other current liabilities | 50 | 41 | 77 | |||||||||
Total liabilities | 126 | 58 | 229 | |||||||||
Net assets | 1,568 | 49 | 244 | |||||||||
Group’s share of net assets | 784 | 19 | 100 | |||||||||
Loans advanced to the joint venture | - | - | 36 | |||||||||
Other | 13 | - | - | |||||||||
Carrying amount of interest in joint ventures | 797 | 19 | 136 | |||||||||
Statement of financial position as at 31 December 2011 | ||||||||||||
Non-current assets | 978 | 31 | 213 | |||||||||
Current assets | 12 | 77 | 140 | |||||||||
Cash and cash equivalents | 2 | 63 | 4 | |||||||||
Total assets | 992 | 171 | 357 | |||||||||
Non-current financial liabilities | - | 5 | - | |||||||||
Other non-current liabilities | - | 14 | 60 | |||||||||
Current financial liabilities | 9 | - | - | |||||||||
Other current liabilities | 7 | 49 | 90 | |||||||||
Total liabilities | 16 | 68 | 150 | |||||||||
Net assets | 976 | 103 | 207 | |||||||||
Group’s share of net assets | 488 | 41 | 85 | |||||||||
Other | 9 | - | - | |||||||||
Carrying amount of interest in joint ventures | 497 | 41 | 85 | |||||||||
F-42
F - 55
| 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”. | ||||||||
F-43
| Figures in millions | 2013 | 2012 | 2011 | |||||||||
| US Dollars | ||||||||||||
19 OTHER INVESTMENTS | ||||||||||||
Non-current investments | ||||||||||||
Listed investments | ||||||||||||
Available-for-sale | ||||||||||||
Balance at beginning of year | 69 | 82 | 124 | |||||||||
Additions | 9 | 6 | 47 | |||||||||
Acquisition of subsidiary (note 34) | - | 3 | - | |||||||||
Disposals | (2) | - | (2) | |||||||||
Fair value adjustments | 4 | (12) | (59) | |||||||||
Impairments (notes 7 and 13)(1) | (26) | (8) | (21) | |||||||||
Transfer to current investments | (1) | - | - | |||||||||
Translation | (5) | (2) | (7) | |||||||||
Balance at end of year | 48 | 69 | 82 | |||||||||
The available-for-sale non-current investments consist of ordinary shares and collective investment schemes and primarily comprise: | ||||||||||||
International Tower Hill Mines Limited (ITH) | 4 | 24 | 43 | |||||||||
Corvus Gold Corporation | 13 | 9 | 2 | |||||||||
Various listed investments held by Environmental Rehabilitation Trust Fund | 22 | 22 | 18 | |||||||||
Other | 9 | 14 | 19 | |||||||||
| 48 | 69 | 82 | ||||||||||
(1) Impairment of investments due to a significant decline in fair value | ||||||||||||
International Tower Hill Mines Limited | 21 | - | - | |||||||||
Corvus Gold Corporation | 2 | - | - | |||||||||
First Uranium Corporation | - | 5 | 19 | |||||||||
Other | 3 | 3 | 2 | |||||||||
| 26 | 8 | 21 | ||||||||||
Current investments | ||||||||||||
Listed investments | ||||||||||||
Available-for-sale | ||||||||||||
Balance at beginning of year | - | - | - | |||||||||
Transfer from non-current investments | 1 | - | - | |||||||||
Balance at end of year | 1 | - | - | |||||||||
The available-for-sale current investments consist of ordinary shares and collective investment schemes and primarily comprise: | ||||||||||||
RoxGold Inc. | 1 | - | - | |||||||||
The group’s listed available-for-sale equity investments are susceptible to market price risk arising from uncertainties about the future values of the investments.
At the reporting date, the majority of equity investments were listed on the Toronto Stock Exchange and the JSE.
Based on the share price of ITH over the past year and carrying value at 31 December 2013 of $4m, if ITH achieved the high that it achieved during 2013 of C$2.48 per share, other comprehensive income (OCI) would increase by $21m. If it achieved the low of C$0.31 per share, OCI would decrease by $1m. If the decrease was significant or prolonged, an impairment would be recorded.
F - 56
| 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 | ||||||
| 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 | |||||||
| Deferred income | 7 | 5 | ||||||
| Taxation. Refer to Note 7. | 52 | 149 | ||||||
| Other creditors | 10 | 9 | ||||||
| 69 | 163 | |||||||
F-44
| 19 | OTHER INVESTMENTS(continued) |
Based on the share price of Corvus Gold Corporation over the past year and carrying value at 31 December 2013 of $13m, if Corvus Gold Corporation achieved the high that it achieved during 2013 of C$1.70 per share, other comprehensive income (OCI) would increase by $6m. If it achieved the low of C$0.51 per share, OCI would decrease by $7m. If the decrease was significant or prolonged, an impairment would be recorded.
The exposure to listed shares held by the Environmental Rehabilitation Trust Fund at fair value on the JSE was $22m. An analysis based on the assumption that the equity index (ALSI on the JSE) had increased/decreased by 10% with all other variables held constant and all the group’s JSE listed equity investments moved according to the ALSI, would impact OCI by $2.2m. If the decrease was significant or prolonged, an impairment would be recorded.
| Figures in millions | 2013 | 2012 | 2011 | |||||||||
| US Dollars | ||||||||||||
Non-current investments | ||||||||||||
Listed investments | ||||||||||||
Held-to-maturity | ||||||||||||
Balance at beginning of year | 7 | 8 | 13 | |||||||||
Additions | 5 | - | - | |||||||||
Maturities | (6 | ) | - | (3 | ) | |||||||
Amortisation of bonds | 1 | - | - | |||||||||
Translation | (1 | ) | (1 | ) | (2 | ) | ||||||
Balance at end of year | 6 | 7 | 8 | |||||||||
The held-to-maturity investment consists of government bonds held by the Environmental Rehabilitation Trust Fund administered by RMB Private Bank. | ||||||||||||
The market value of bonds held-to-maturity is $8m (2012: $11m; 2011: $11m) and has a sensitivity of less than $1m (2012: less than $1m; 2011: $1m) for a 1% change in interest rates. | ||||||||||||
Book value of listed investments | 55 | 76 | 90 | |||||||||
Market value of listed investments | 57 | 80 | 93 | |||||||||
Non-current investments | ||||||||||||
Unlisted investments | ||||||||||||
Available-for-sale | ||||||||||||
Balance at beginning of year | 2 | 9 | 9 | |||||||||
Impairment (notes 7 and 13) | (2 | ) | (7 | ) | - | |||||||
Balance at end of year | - | 2 | 9 | |||||||||
Held-to-maturity | ||||||||||||
Balance at beginning of year | 89 | 87 | 91 | |||||||||
Additions | 77 | 91 | 101 | |||||||||
Maturities | (72 | ) | (85 | ) | (87 | ) | ||||||
Translation | (17 | ) | (4 | ) | (18 | ) | ||||||
Balance at end of year | 77 | 89 | 87 | |||||||||
F - 57
| 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 | ||||||||
F-45
| Figures in millions | 2013 | 2012 | 2011 | |||||||||
| US Dollars | ||||||||||||
19 OTHER INVESTMENTS (continued) | ||||||||||||
Non-current investments (continued) | ||||||||||||
Held-to-maturity investments (continued) | ||||||||||||
Unlisted investments | ||||||||||||
The held-to-maturity investments include: | ||||||||||||
Negotiable Certificates of Deposit - Environmental Rehabilitation Trust Fund administered by RMB Private Bank | 71 | 81 | 80 | |||||||||
Nufcor Uranium Trust Fund | 3 | 5 | 5 | |||||||||
Other | 3 | 3 | 2 | |||||||||
| 77 | 89 | 87 | ||||||||||
Book value of unlisted investments | 77 | 91 | 96 | |||||||||
Fair value of unlisted investments (2) | 77 | 91 | 87 | |||||||||
Total book value of other investments (note 37) | 132 | 167 | 186 | |||||||||
Total fair value of other investments (note 37)(2) | 134 | 171 | 180 | |||||||||
| 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 | |||||||
F-46
| 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 | |||||||
| (2) | In 2011, there was no market for the | |
F-47
F - 58
| 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
| 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
| Figures in millions | 2013 | 2012 | 2011 | |||||||||
| US Dollars | ||||||||||||
20 INVENTORIES | ||||||||||||
Non-current | ||||||||||||
Raw materials | ||||||||||||
- heap-leach inventory | 479 | 436 | 386 | |||||||||
- ore stockpiles(1) | 107 | 174 | 24 | |||||||||
Total metal inventories | 586 | 610 | 410 | |||||||||
Current | ||||||||||||
Raw materials | ||||||||||||
- ore stockpiles | 335 | 432 | 394 | |||||||||
- heap-leach inventory | 111 | 128 | 99 | |||||||||
Work in progress | ||||||||||||
- metals in process | 93 | 139 | 91 | |||||||||
Finished goods | ||||||||||||
- gold doré/bullion | 87 | 91 | 94 | |||||||||
- by-products | 8 | 11 | 24 | |||||||||
Total metal inventories | 634 | 801 | 702 | |||||||||
Mine operating supplies | 419 | 412 | 296 | |||||||||
| 1,053 | 1,213 | 998 | ||||||||||
Total inventories(2) | 1,639 | 1,823 | 1,408 | |||||||||
| (1) | Includes non-current ore stockpiles of |
| (2) | The amount of the | |
| 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 | |||||||||||||
Comparative years have been restated for the adoption of IFRIC 20. Refer 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 | |||
F-50
| Figures in millions | 2013 | 2012 | 2011 | |||||||||
| US Dollars | ||||||||||||
21 OTHER NON-CURRENT ASSETS | ||||||||||||
Post-retirement medical scheme for Rand Refinery employees (note 29) | - | - | 2 | |||||||||
Ashanti Retired Staff Pension Fund (note 29) | - | - | 1 | |||||||||
AngloGold Ashanti Limited Pension Fund (note 29) | 41 | - | - | |||||||||
Loans and receivables | ||||||||||||
Loan receivable bearing interest at 8% per annum | - | 6 | 6 | |||||||||
Other non-interest bearing loans and receivables - receivable on various dates | - | 1 | - | |||||||||
| 41 | 7 | 9 | ||||||||||
F - 59
| 2010 | 2009 | |||||||
| $ | $ | |||||||
| Accrued environmental rehabilitation costs | 530 | 385 | ||||||
| Figures in millions | 2013 | 2012 | 2011 | |||||||||
| US Dollars | ||||||||||||
22 TRADE AND OTHER RECEIVABLES | ||||||||||||
Non-current | ||||||||||||
Prepayments and accrued income | 10 | 31 | 22 | |||||||||
Recoverable tax, rebates, levies and duties(1) | 14 | 20 | 14 | |||||||||
Reclamation sites trust fund | - | 22 | 30 | |||||||||
Deferred loan fees | 5 | 6 | 9 | |||||||||
Other receivables | - | - | 1 | |||||||||
| 29 | 79 | 76 | ||||||||||
Current | ||||||||||||
Trade and loan receivables | 73 | 149 | 46 | |||||||||
Prepayments and accrued income | 73 | 86 | 80 | |||||||||
Recoverable tax, rebates, levies and duties | 215 | 223 | 174 | |||||||||
Amounts due from related parties | - | 2 | 3 | |||||||||
Interest receivable | - | 1 | 3 | |||||||||
Royalties receivable | - | - | 14 | |||||||||
Deferred loan fees | 2 | 2 | 5 | |||||||||
Other receivables | 6 | 9 | 29 | |||||||||
| 369 | 472 | 354 | ||||||||||
Total trade and other receivables | 398 | 551 | 430 | |||||||||
Current trade and loan receivables are generally on terms less than 90 days. | ||||||||||||
There is no concentration of credit risk with respect to trade receivables, as the group has a large number of internationally dispersed customers. | ||||||||||||
There is a concentration of risk in respect of recoverable value added tax, fuel duties and appeal deposits from the Tanzanian government. | ||||||||||||
The recoverable value added tax, fuel duties and appeal deposits are summarised as follows: | ||||||||||||
Recoverable value added tax | 49 | 16 | ||||||||||
Recoverable fuel duties(2) | 18 | 35 | ||||||||||
Appeal deposits | 4 | 4 | ||||||||||
| (1) | The outstanding amounts have been discounted to their present value at a rate of 7.92%. | |
| (2) | Fuel duty claims are required to be submitted after consumption of the | |
F-51Comparative years have been restated for the adoption of IFRIC 20. Refer note 39 for details.
| Figures in millions | 2013 | 2012 | 2011 | |||||||||
| US Dollars | ||||||||||||
23 CASH RESTRICTED FOR USE | ||||||||||||
Non-current | ||||||||||||
Cash restricted by prudential solvency requirements | 1 | 1 | 1 | |||||||||
Cash balances held by Environmental Rehabilitation Trust Funds | 30 | 28 | 22 | |||||||||
| 31 | 29 | 23 | ||||||||||
Current | ||||||||||||
Cash restricted by prudential solvency requirements | 11 | 11 | 9 | |||||||||
Cash balances held by the Tropicana joint venture | 34 | 23 | 22 | |||||||||
Other | 1 | 1 | 4 | |||||||||
| 46 | 35 | 35 | ||||||||||
Total cash restricted for use (notes 37 and 38) | 77 | 64 | 58 | |||||||||
F - 60
| 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 | |||||||
| Average contracted | ||||||||
| Year | lbs (000)(1) | price ($/lbs) | ||||||
| 2011 | 494 | 33.97 | ||||||
| 2012 | 494 | 34.35 | ||||||
| 2013 | 494 | 34.74 | ||||||
F-52
Figures in millions | 2013 | 2012 | 2011 | |||||||||||
| US Dollars | ||||||||||||||
24 CASH AND CASH EQUIVALENTS | ||||||||||||||
Cash and deposits on call | 431 | 595 | 499 | |||||||||||
Money market instruments | 217 | 297 | 613 | |||||||||||
(notes 37 and 38) | 648 | 892 | 1,112 | |||||||||||
For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise the following: | ||||||||||||||
Cash and deposits on call | 431 | 595 | 499 | |||||||||||
Money market instruments | 217 | 297 | 613 | |||||||||||
Bank overdraft | (20 | ) | - | - | ||||||||||
| 628 | 892 | 1,112 | ||||||||||||
25 NON-CURRENT ASSETS AND LIABILITIES HELD FOR SALE | ||||||||||||||
Navachab gold mine | ||||||||||||||
Effective 30 April 2013, AngloGold Ashanti announced its plan to sell the Navachab mine in Namibia. The Navachab gold mine is situated close to Karibib, about 170 kilometres northwest of the Namibian capital, Windhoek. It is included in the Continental Africa reporting segment. The open-pit mine, which began operations in 1989, has a processing plant that handles 120,000 metric tons a month. The mine produced 63,000 ounces of gold in 2013 (2012: 74,000 ounces). | ||||||||||||||
On 10 February 2014, AngloGold Ashanti announced that it signed a binding agreement to sell Navachab to a wholly-owned subsidiary of QKR Corporation Ltd (QKR). The agreement provides for an upfront consideration based on an enterprise value of $110 m which will be adjusted to take into account Navachab’s net debt and working capital position on the closing date of the transaction. The upfront consideration is payable in cash on the closing date. In addition, AngloGold Ashanti will receive deferred consideration in the form of a net smelter return (NSR). The NSR is to be paid quarterly for a period of seven years following the second anniversary of the closing date and will be determined at 2% of ounces sold by Navachab during a relevant quarter subject to a minimum average gold price of US$1,350 per ounce being achieved and capped at a maximum of 18,750 ounces sold per quarter. The transaction is subject to fulfilment of a number of conditions precedent, including Namibian and South African regulatory and third party approvals, which are expected to be obtained over the next several months. Navachab is not a discontinued operation and is not viewed as part of the core assets of the company. | ||||||||||||||
The carrying amount of major classes of assets and liabilities of Navachab include: | ||||||||||||||
Tangible assets | 72 | - | - | |||||||||||
Intangible assets | 2 | - | - | |||||||||||
Inventories | 75 | - | - | |||||||||||
Trade and other receivables | 2 | - | - | |||||||||||
Cash and cash equivalents | 2 | - | - | |||||||||||
Non-current assets held for sale (note 2) | 153 | - | - | |||||||||||
Borrowings | 10 | - | - | |||||||||||
Provisions | 4 | - | - | |||||||||||
Deferred taxation | 35 | - | - | |||||||||||
Trade and other payables | 8 | - | - | |||||||||||
Non-current liabilities held for sale | 57 | - | - | |||||||||||
Net non-current assets held for sale | 96 | - | - | |||||||||||
F - 61
| 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. | ||||||||||
F-53
Figures in millions | 2013 | 2012 | 2011 | |||||||||||
| US Dollars | ||||||||||||||
25 NON-CURRENT ASSETS AND LIABILITIES HELD FOR SALE (continued) | ||||||||||||||
Rand Refinery Limited | - | - | 1 | |||||||||||
Effective December 2007, Rand Refinery allocated parts of its premises that were no longer utilised, to assets held for sale. On 1 April 2008, a sale agreement was concluded subject to the suspensive condition regarding rezoning of the land and transfer of title deeds. | ||||||||||||||
AGA-Polymetal Strategic Alliance | - | - | 20 | |||||||||||
Effective 2 December 2011, 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 were classified as held for sale. AngloGold Ashanti Holdings plc, a wholly owned subsidiary entered into a contractual agreement with Polyholding Limited relating to the disposal of these entities. A reversal of previous impairment losses recognised of $20m was recognised in share of associates and joint ventures’ profit to increase the carrying amount of the investment to fair value less costs to sell (notes 9, 13 and 18). The transaction was completed on 8 February 2012. | ||||||||||||||
Total non-current assets held for sale | 96 | - | 21 | |||||||||||
F - 62
Figures in millions | 2013 | 2012 | 2011 | |||||||||||
| US Dollars | ||||||||||||||
26 SHARE CAPITAL AND PREMIUM | ||||||||||||||
Share capital | ||||||||||||||
Authorised | ||||||||||||||
600,000,000 ordinary shares of 25 SA cents each | 23 | 23 | 23 | |||||||||||
4,280,000 E ordinary shares of 25 SA cents each | - | - | - | |||||||||||
2,000,000 A redeemable preference shares of 50 SA cents each | - | - | - | |||||||||||
5,000,000 B redeemable preference shares of 1 SA cent each | - | - | - | |||||||||||
| 23 | 23 | 23 | ||||||||||||
Issued and fully paid | ||||||||||||||
402,628,406 (2012: 383,320,962; 2011: 382,242,343) ordinary shares of 25 SA cents each | 16 | 16 | 16 | |||||||||||
712,006 (2012: 1,617,752; 2011: 2,582,962) E ordinary shares of 25 SA cents each | - | - | - | |||||||||||
2,000,000 (2012: 2,000,000; 2011: 2,000,000) A redeemable preference shares of 50 SA cents each | - | - | - | |||||||||||
778,896 (2012: 778,896; 2011: 778,896) B redeemable preference shares of 1 SA cent each | - | - | - | |||||||||||
| 16 | 16 | 16 | ||||||||||||
Treasury shares held within the group: | ||||||||||||||
2,778,896 (2012: 2,778,896; 2011: 2,778,896) A and B redeemable preference shares | - | - | - | |||||||||||
5,171 (2012: 154,757; 2011: 326,906) ordinary shares | - | - | - | |||||||||||
362,006 (2012: 917,752; 2011: 1,532,962) E ordinary shares | - | - | - | |||||||||||
| 16 | 16 | 16 | ||||||||||||
Share premium | ||||||||||||||
Balance at beginning of year | 6,805 | 6,766 | 6,718 | |||||||||||
Ordinary shares issued(1) | 259 | 46 | 57 | |||||||||||
E ordinary shares issued and cancelled | (6 | ) | (7 | ) | (9 | ) | ||||||||
| 7,058 | 6,805 | 6,766 | ||||||||||||
Less: held within the group | ||||||||||||||
Redeemable preference shares | (53 | ) | (53 | ) | (53 | ) | ||||||||
Ordinary shares | (6 | ) | (10 | ) | (17 | ) | ||||||||
E ordinary shares | (9 | ) | (16 | ) | (23 | ) | ||||||||
Balance at end of year | 6,990 | 6,726 | 6,673 | |||||||||||
Share capital and premium | 7,006 | 6,742 | 6,689 | |||||||||||
Includes share awards exercised and delivery of 18,140,000 shares to settle the outstanding 6% Mandatory Convertible Subordinated Bonds. |
The rights and restrictions applicable to the A and B redeemable preference shares:
A redeemable preference shares are entitled to:
an annual dividend, after payment in full of the annual dividend on the B preference shares, equivalent to the balance of after tax profits from mining the Moab Mining Right Area; and
| 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. | ||||||||||
on redemption, the nominal value of the shares and a premium per share equal to the balance of the net proceeds from disposal of assets relating to the Moab Mining Right Area, after redemption in full of the B preference shares and payment of the nominal value of the A preference shares.
F-54B redeemable preference shares are entitled to:
an annual dividend limited to a maximum of 5% of their issue price from the period that profits are generated from the Moab Mining Right Area; and
on redemption, the nominal value of the shares and a premium of up to R249.99 per share provided by the net proceeds from disposal of the assets relating to the Moab Mining Right Area.
The Moab Mining Right Area consists of the Moab Khotsong mine operations.
The B preference shares will only be redeemed from any net proceeds remaining after the disposal of the Moab Mining Right Area following permanent cessation of mining activities. The maximum redemption price will be R250 per share.
In the event of any surplus remaining after the redemption in full of the B preference shares, the A preference shares will be redeemable at such value as would cover the outstanding surplus.
F - 63
| 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
Figures in millions | 2013 | 2012 | 2011 | |||||||||||
| US Dollars | ||||||||||||||
27 BORROWINGS | ||||||||||||||
Non-current | ||||||||||||||
Unsecured | ||||||||||||||
Debt carried at fair value | ||||||||||||||
Mandatory convertible bonds - issued September 2010 (note 38)(1) | - | 588 | 760 | |||||||||||
Quarterly coupons were paid at 6% per annum and the conversion of the mandatory convertible bonds into ADSs was subject to shareholder approval, which was granted in October 2010. The bonds were US dollar-based. | ||||||||||||||
On 16 September 2013, AngloGold Ashanti Holdings Finance plc paid and discharged the 6% mandatory convertible bonds (which matured on 15 September 2013) by delivering 18,140,000 American Depository Shares, or ADSs, which represent an equivalent number of shares of the company’s common stock, and the cash equivalent of 177,859 shares of AngloGold Ashanti Limited as determined in the manner set out in the indenture governing the mandatory convertible bonds. | ||||||||||||||
$1.25bn bonds - issued July 2013(2) | 1,353 | - | - | |||||||||||
Semi-annual coupons are paid at 8.5% per annum. The bonds were issued on 30 July 2013, and unless the company redeems the bonds earlier they are repayable on 30 July 2020 and are US dollar-based. | ||||||||||||||
Debt carried at amortised cost | ||||||||||||||
Rated bonds - issued July 2012(3) | 755 | 753 | - | |||||||||||
Semi-annual coupons are paid at 5.125% per annum. The bonds were issued on 30 July 2012, are repayable on 1 August 2022 and are US dollar-based. | ||||||||||||||
Rated bonds - issued April 2010(4) | 997 | 996 | 996 | |||||||||||
Semi-annual coupons are paid at 5.375% per annum on $700m 10-year bonds and at 6.5% per annum on $300m 30-year bonds. The $700m bonds are repayable in April 2020 and the $300m bonds are repayable in April 2040. The bonds are US dollar-based. | ||||||||||||||
3.5% Convertible bonds - issued May 2009(5) | - | 685 | 652 | |||||||||||
Semi-annual coupons were paid at 3.5% per annum. The bonds were convertible into ADSs up to May 2014 and are US dollar-based. | ||||||||||||||
On 25 July 2013, AngloGold Ashanti Holdings plc commenced a cash tender offer to purchase any and all of the outstanding $732.5m 3.5% convertible bonds due May 2014 of AngloGold Ashanti Holdings Finance plc at a purchase price of $1,015 for each $1,000 principal amount of bonds validly tendered. The offer expired on 21 August 2013 and AngloGold Ashanti Holdings plc purchased $725.9m in aggregate principal amount of the bonds, representing 99.1% of the total issuance. In addition, holders received, in respect of their bonds that were accepted for purchase, accrued and unpaid interest on such bonds up to, but excluding, the settlement date of the tender offer. On 8 November 2013, AngloGold Ashanti Holdings Finance plc completed the redemption of all its outstanding 3.5% convertible bonds. | ||||||||||||||
Syndicated revolving credit facility(A$600m)(6) | 489 | 261 | - | |||||||||||
Interest charged at BBSY plus 2.6% per annum. The applicable margin is subject to a ratings grid. Loan is repayable in December 2015 and is Australian dollar-based. The loan is subject to debt covenant arrangements for which no default event occurred. | ||||||||||||||
R750m bonds - issued December 2013(7) | 72 | - | - | |||||||||||
Quarterly coupons are paid at 3 month JIBAR plus 1.75% on R750m bonds and they are repayable on 9 December 2016. The bonds are SA rand-based. | ||||||||||||||
Group Santander Brasil | - | 1 | 2 | |||||||||||
Interest charged at 8.11% per annum. Loans are repayable in monthly instalments terminating in April 2014 and are Brazilian real-based. | ||||||||||||||
Brazilian Economic and Social Development Bank | - | 1 | 1 | |||||||||||
Interest charged at a rate of 2.3% plus delta exchange rate on individual instalments per annum. Loans are repayable in monthly instalments terminating in April 2014 and are Brazilian real-based. | ||||||||||||||
Banco de Desenvolvimento de Minas Gerais | 2 | 1 | 1 | |||||||||||
Interest charged at a rate of 4.5% per annum. Loans are repayable in monthly instalments terminating in June 2020 and are Brazilian real-based. | ||||||||||||||
F - 64
| 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. | ||||||||||
F-56
Figures in millions | 2013 | 2012 | 2011 | |||||||||||
| US Dollars | ||||||||||||||
27 BORROWINGS (continued) | ||||||||||||||
Non-current (continued) | ||||||||||||||
Secured | ||||||||||||||
Finance leases | ||||||||||||||
Turbine Square Two (Pty) Limited | 25 | 31 | 33 | |||||||||||
The leases are capitalised at an implied interest rate of 9.8% per annum. Lease payments are due in monthly instalments terminating in March 2022 and are SA rand-based. The buildings financed are used as security for these loans (note 38). | ||||||||||||||
Caterpillar Financial Services Corporation | 4 | 8 | 10 | |||||||||||
Interest charged at an average rate of 5.5% per annum. Loans are repayable in monthly instalments terminating in 2015 and are US dollar-based. The equipment financed is used as security for these loans. | ||||||||||||||
Mazuma Capital Corporation | - | - | 2 | |||||||||||
Interest charged at an average rate of 5.6% per annum. Loans were repaid in monthly instalments and terminated in November 2012 and were US dollar-based. The equipment financed was used as security for these loans. | ||||||||||||||
CSI Latina Arrendamento Mercantil S.A. | 1 | 1 | 2 | |||||||||||
Interest charged at a rate of 10.4% per annum. Loans are repayable by December 2016 and are Brazilian real-based. The equipment financed is used as security for these loans. | ||||||||||||||
Navachab Lewcor Mining Contract | - | 22 | 29 | |||||||||||
Interest charged at a rate of 8.4% per annum. Loans are repayable by April 2015 and are Namibian dollar-based. The equipment financed is used as security for these loans. Navachab has been reclassified as held for sale during 2013. | ||||||||||||||
California First National Bank | 16 | 11 | - | |||||||||||
Interest charged at an average rate of 2.4% per annum. Loans are repayable in monthly instalments terminating in December 2019 and are US dollar-based. The equipment financed is used as security for these loans. | ||||||||||||||
Total non-current borrowings including current portion | 3,714 | 3,359 | 2,488 | |||||||||||
Current portion of non-current borrowings included in current liabilities | (81 | ) | (635 | ) | (32 | ) | ||||||||
Total non-current borrowings | 3,633 | 2,724 | 2,456 | |||||||||||
Current | ||||||||||||||
Current portion of non-current borrowings included above | 81 | 635 | 32 | |||||||||||
Unsecured | ||||||||||||||
Senior floating rate notes - DMTNP | 54 | 84 | - | |||||||||||
Senior fixed rate notes - DMTNP | 62 | 36 | - | |||||||||||
FirstRand Bank Limited demand facility | - | 59 | - | |||||||||||
Standard Bank Argentina | 15 | - | - | |||||||||||
Other loans | 46 | 45 | - | |||||||||||
Total current borrowings | 258 | 859 | 32 | |||||||||||
Total borrowings (notes 37 and 38) | 3,891 | 3,583 | 2,488 | |||||||||||
Amounts falling due | ||||||||||||||
Within one year | 258 | 859 | 32 | |||||||||||
Between one and two years | 494 | 699 | 773 | |||||||||||
Between two and five years | 88 | 277 | 672 | |||||||||||
After five years | 3,051 | 1,748 | 1,011 | |||||||||||
(notes 37 and 38) | 3,891 | 3,583 | 2,488 | |||||||||||
F - 65
| 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
Figures in millions | 2013 | 2012 | 2011 | |||||||||||
| US Dollars | ||||||||||||||
27 BORROWINGS (continued) | ||||||||||||||
Currency | ||||||||||||||
The currencies in which the borrowings are denominated are as follows: | ||||||||||||||
US dollar | 3,186 | 3,086 | 2,420 | |||||||||||
Australian dollar | 489 | 261 | - | |||||||||||
SA rand | 213 | 210 | 33 | |||||||||||
Brazilian real | 3 | 4 | 6 | |||||||||||
Namibian dollar | - | 22 | 29 | |||||||||||
(notes 37 and 38) | 3,891 | 3,583 | 2,488 | |||||||||||
Undrawn facilities | ||||||||||||||
Undrawn borrowing facilities as at 31 December are as follows: | ||||||||||||||
Syndicated revolving credit facility ($1bn) - US dollar | 1,000 | 1,000 | 1,000 | |||||||||||
Syndicated revolving credit facility (A$600m) - Australian dollar | 45 | 359 | 617 | |||||||||||
Syndicated revolving credit facility (R1.5bn) - SA rand | 144 | - | - | |||||||||||
FirstRand Bank Limited - US dollar | - | - | 50 | |||||||||||
Absa Bank Limited - US dollar | - | - | 42 | |||||||||||
Nedbank Limited - US dollar | - | - | 2 | |||||||||||
FirstRand Bank Limited - SA rand | 48 | 30 | 14 | |||||||||||
Standard Bank of South Africa Limited - SA rand | - | - | 23 | |||||||||||
Nedbank Limited - SA rand | - | - | 13 | |||||||||||
Absa Bank Limited - SA rand | - | - | 4 | |||||||||||
| 1,237 | 1,389 | 1,765 | ||||||||||||
(1) Mandatory convertible bonds - issued September 2010 | ||||||||||||||
Senior unsecured fixed-rate bonds | - | 586 | 758 | |||||||||||
Accrued interest | - | 2 | 2 | |||||||||||
| - | 588 | 760 | ||||||||||||
(2) $1.25bn bonds - issued July 2013 | ||||||||||||||
Senior unsecured fixed-rate bonds | 1,308 | - | - | |||||||||||
Accrued interest | 45 | - | - | |||||||||||
| 1,353 | - | - | ||||||||||||
(3) Rated bonds - issued July 2012 | ||||||||||||||
Senior unsecured fixed-rate bonds | 750 | 750 | - | |||||||||||
Unamortised discount and bond issue costs | (11) | (13) | - | |||||||||||
| 739 | 737 | - | ||||||||||||
Accrued interest | 16 | 16 | - | |||||||||||
| 755 | 753 | - | ||||||||||||
(4) Rated bonds - issued April 2010 | ||||||||||||||
Senior unsecured fixed-rate bonds | 1,000 | 1,000 | 1,000 | |||||||||||
Unamortised discount and bond issue costs | (15) | (15) | (16) | |||||||||||
| 985 | 985 | 984 | ||||||||||||
Accrued interest | 12 | 11 | 12 | |||||||||||
| 997 | 996 | 996 | ||||||||||||
(5) 3.5% Convertible bonds - issued May 2009 | ||||||||||||||
Senior unsecured fixed-rate bonds | - | 733 | 733 | |||||||||||
Unamortised discount and bond issue costs | - | (51) | (84) | |||||||||||
| - | 682 | 649 | ||||||||||||
Accrued interest | - | 3 | 3 | |||||||||||
| - | 685 | 652 | ||||||||||||
F - 66
| 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 | — | — |
F-58
Figures in millions | 2013 | 2012 | 2011 | |||||||||||||
| US Dollars | ||||||||||||||||
27 | BORROWINGS (continued) | |||||||||||||||
| (6) | Syndicated revolving credit facility (A$600m) | |||||||||||||||
| Drawn down | 492 | 266 | - | |||||||||||||
| Unamortised loan issue costs | (3) | (5) | - | |||||||||||||
| 489 | 261 | - | ||||||||||||||
| (7) | R750 ZAR Bonds - issued December 2013 | |||||||||||||||
| Senior unsecured floating-rate bonds | 72 | - | - | |||||||||||||
| Unamortised discount and bond issue costs | - | - | - | |||||||||||||
| 72 | - | - | ||||||||||||||
| Accrued interest | - | - | - | |||||||||||||
| 72 | - | - | ||||||||||||||
The group has received consent from its banking syndicates to relax the net debt to EBITDA ratio from 3.0:1 to a maximum of 4.5:1 on its facilities for the next testing period, being 30 June 2014, after which this financial covenant will revert to 3.0:1.
Whilst the group does not anticipate requiring this additional headroom on the financial covenant, it believes this prudent move will provide the group with greater flexibility to address any volatile market and operating conditions in the short-term.
F - 67
| Figures in millions | 2013 | 2012 | 2011 | |||||||||||
| US Dollars | ||||||||||||||
28 | ENVIRONMENTAL REHABILITATION AND OTHER PROVISIONS | |||||||||||||
| Environmental rehabilitation obligations | ||||||||||||||
| Provision for decommissioning | ||||||||||||||
| Balance at beginning of year | 306 | 240 | 213 | |||||||||||
| Change in estimates(1) | (28) | 53 | 32 | |||||||||||
| Transfer of liability to asset held for sale | (2) | - | - | |||||||||||
| Acquisition of subsidiary (note 34) | - | 6 | - | |||||||||||
| Unwinding of decommissioning obligation (note 8) | 13 | 11 | 12 | |||||||||||
| Transfer of decommissioning obligation to a third party(2) | (5) | - | - | |||||||||||
| Utilised during the year | (3) | - | - | |||||||||||
| Translation | (25) | (4) | (17) | |||||||||||
| Balance at end of year | 256 | 306 | 240 | |||||||||||
| Provision for restoration | ||||||||||||||
| Balance at beginning of year | 535 | 507 | 338 | |||||||||||
| Charge to income statement | 1 | 18 | 8 | |||||||||||
| Change in estimates(1) | (40) | (16) | 180 | |||||||||||
| Transfer of liability to asset held for sale | (2) | - | - | |||||||||||
| Acquisition of subsidiary (note 34) | - | 34 | - | |||||||||||
| Unwinding of restoration obligation (note 8)(3) | 14 | 18 | 17 | |||||||||||
| Transfer of restoration liability to a third party(2) | (16) | - | - | |||||||||||
| Utilised during the year | (10) | (21) | (18) | |||||||||||
| Translation | (10) | (5) | (18) | |||||||||||
| Balance at end of year | 472 | 535 | 507 | |||||||||||
| Other provisions | ||||||||||||||
| Balance at beginning of year | 397 | 35 | 38 | |||||||||||
| Charge to income statement | 7 | 45 | 21 | |||||||||||
| Change in estimates | (70) | (2) | - | |||||||||||
| Acquisition of subsidiary (note 34) | - | 346 | - | |||||||||||
| Transfer from (to) trade and other payables | 5 | (4) | (5) | |||||||||||
| Unwinding of other provisions (note 8) | 2 | 1 | - | |||||||||||
| Utilised during the year | (39) | (10) | (15) | |||||||||||
| Translation | (67) | (14) | (4) | |||||||||||
| Balance at end of year | 235 | 397 | 35 | |||||||||||
| Other provisions comprise the following: | ||||||||||||||
| - provision for labour, environmental, tax and civil court settlements(4) | 25 | 32 | 34 | |||||||||||
| - provision for employee compensation claims in Australasia | - | - | 1 | |||||||||||
| - commodity contract(5) | 210 | 365 | - | |||||||||||
| 235 | 397 | 35 | ||||||||||||
| Total environmental rehabilitation and other provisions | 963 | 1,238 | 782 | |||||||||||
| (1) | ||||
The change in | ||||
| (2) | Transferred during 2013 to | |
| 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 | ) | ||||||||||||
| (3) | Included in unwinding of restoration obligation is nil (2012: $1m; 2011: $2m) which is recoverable from a third party. The | |
| (4) | Comprises claims filed by former employees in respect of loss of employment, work-related accident injuries and diseases, governmental fiscal claims relating to levies, surcharges and environmental legal disputes and shareholder claim related to stamp duties. The |
| (5) | Chemwes (Pty) Limited, a subsidiary of First Uranium (Pty) Limited acquired by AngloGold Ashanti Limited during 2012, agreed to sell 25% of its production, capped at 312,500oz from 1 January 2012, to Franco-Nevada (Barbados) Corporation. Franco Nevada is required to pay $400/oz which inflates at 1% compounded annually from 2013. These factors were considered in | |
F-59
F - 68
| Total | ||||||||||||||||||||
| Fair value | Level 1 | Level 2 | Level 3 | gain/(loss) | ||||||||||||||||
| Description | $ | $ | $ | $ | $ | |||||||||||||||
| Long-lived assets abandoned | — | (83 | ) | |||||||||||||||||
| Long-lived assets held for sale | 61 | 61 | (8 | ) | ||||||||||||||||
| Associates and equity accounted joint ventures | — | (24 | ) | |||||||||||||||||
| 61 | — | 61 | — | (115 | ) | |||||||||||||||
F-60
| Figures in millions | 2013 | 2012 | 2011 | |||||||||||||
| US Dollars | ||||||||||||||||
29 | PROVISION FOR PENSION AND POST-RETIREMENT BENEFITS | |||||||||||||||
| Defined benefit plans | ||||||||||||||||
| The group has made provision for pension, provident and medical schemes covering substantially all employees. The retirement schemes consist of the following: | ||||||||||||||||
| AngloGold Ashanti Limited Pension Fund | (41) | 24 | 23 | |||||||||||||
| Post-retirement medical scheme for AngloGold Ashanti Limited South African employees | 137 | 183 | 157 | |||||||||||||
| Other defined benefit plans(1) | 15 | 14 | 12 | |||||||||||||
| Sub-total | 111 | 221 | 192 | |||||||||||||
| Transferred to other non-current assets (note 21): | ||||||||||||||||
| - Post-retirement medical scheme for Rand Refinery employees | - | - | 2 | |||||||||||||
| - Ashanti Retired Staff Pension Plan | - | - | 1 | |||||||||||||
| - AngloGold Ashanti Limited Pension Fund | 41 | - | - | |||||||||||||
| 152 | 221 | 195 | ||||||||||||||
| (1) | Other defined benefit plans comprise the following: | |||||||||||||||
| - Ashanti Retired Staff Pension Plan (asset) | - | - | (1) | |||||||||||||
| - Obuasi Mines Staff Pension Scheme | 12 | 11 | 11 | |||||||||||||
| - Post-retirement medical scheme for Rand Refinery employees (asset) | - | - | (2) | |||||||||||||
| - Retiree Medical Plan for North American employees | 2 | 2 | 3 | |||||||||||||
| - Supplemental Employee Retirement Plan (SERP) for North America (USA) Inc. employees | 1 | 1 | 1 | |||||||||||||
| 15 | 14 | 12 | ||||||||||||||
| AngloGold Ashanti Limited Pension Fund | ||||||||||||||||
The plan is evaluated by independent actuaries on an annual basis as at 31 December of each year. The valuation as at 31 December 2013 was completed at the beginning of 2014 using the projected unit credit method. In arriving at their conclusions, the actuaries took into account reasonable long-term estimates of inflation, increases in wages, salaries and pensions, as well as returns on investments. | ||||||||||||||||
| A formal statutory valuation is required by legislation every three years. The statutory valuation effective 31 December 2011 was completed in May 2012. The next statutory valuation of the Fund will have an effective date of no later than 31 December 2014 and is expected to be submitted to the Registrar of Pension Funds during 2015. | ||||||||||||||||
| All South African pension funds are governed by the Pension Funds Act of 1956 as amended. | ||||||||||||||||
| Information with respect to the AngloGold Ashanti Limited Pension Fund is as follows: | ||||||||||||||||
| Benefit obligation | ||||||||||||||||
| Balance at beginning of year | 328 | 307 | 334 | |||||||||||||
| Current service cost | 6 | 7 | 7 | |||||||||||||
| Interest cost | 23 | 26 | 25 | |||||||||||||
| Participants’ contributions | 1 | 1 | 2 | |||||||||||||
| Actuarial (gain) loss | (23) | 22 | 22 | |||||||||||||
| Benefits paid | (38) | (18) | (19) | |||||||||||||
| Translation | (61) | (17) | (64) | |||||||||||||
| Balance at end of year | 236 | 328 | 307 | |||||||||||||
F - 69
| Figures in millions | 2013 | 2012 | 2011 | |||||||||||
| US Dollars | ||||||||||||||
29 | PROVISION FOR PENSION AND POST-RETIREMENT BENEFITS (continued) | |||||||||||||
| AngloGold Ashanti Limited Pension Fund (continued) | ||||||||||||||
| Plan assets | ||||||||||||||
| Balance at beginning of year | 304 | 284 | 334 | |||||||||||
| Interest income | 21 | 25 | 26 | |||||||||||
| Return on plan assets net of interest income | 6 | 6 | 4 | |||||||||||
| Actuarial gain (loss) | 38 | 14 | (6) | |||||||||||
| Company contributions | 7 | 7 | 7 | |||||||||||
| Participants’ contributions | 1 | 1 | 2 | |||||||||||
| Benefits paid | (38) | (18) | (19) | |||||||||||
| Translation | (62) | (15) | (64) | |||||||||||
| Fair value of plan assets at end of year | 277 | 304 | 284 | |||||||||||
| Funded (unfunded) status at end of year | 41 | (24) | (23) | |||||||||||
| Net amount recognised | 41 | (24) | (23) | |||||||||||
| Components of net periodic benefit cost | ||||||||||||||
| Interest cost | 23 | 26 | 25 | |||||||||||
| Current service cost | 6 | 7 | 7 | |||||||||||
| Interest income | (21) | (25) | (26) | |||||||||||
| Net periodic benefit cost | 8 | 8 | 6 | |||||||||||
| Assumptions | ||||||||||||||
| Assumptions used to determine benefit obligations at the end of the year are as follows: | ||||||||||||||
| Discount rate | 9.00% | 8.25% | 8.75% | |||||||||||
| Rate of compensation increase(1) | 8.25% | 8.00% | 8.00% | |||||||||||
| Expected long-term return on plan assets(2) | 10.46% | 10.53% | 11.20% | |||||||||||
| Pension increase | 5.63% | 5.40% | 5.40% | |||||||||||
| Plan assets (3) | ||||||||||||||
| AngloGold Ashanti Limited’s pension plan asset allocations at the end of the year, by asset category, are as follows: | ||||||||||||||
| Equity securities | 62% | 56% | 56% | |||||||||||
| Debt securities | 34% | 38% | 37% | |||||||||||
| Other | 4% | 6% | 7% | |||||||||||
| 100% | 100% | 100% | ||||||||||||
The short-term compensation rate increase is 6.4% (2012: 5.5%; 2011: 7.5%) and the | |||
| (2) | ||
F-61
(continued)
F-62
| 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 | — | — | — | — | ||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||
F-63
| 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 | ||||||||||||
F-64
| 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
| 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 | ) | ||||||||||
F-66
F-67
| 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 | |||||||||||||
F-68
| 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 | ) | |||||||||
| 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
| 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
| 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
| 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 | |||||||||
F-72
| 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 | % | ||||||
F-73
| The expected long-term return on plan assets is determined using the after tax |
| 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 | % | |||||
| (3) | The plan assets | |
| 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 | ||||||||||||||
F-74
F - 70
PROVISION FOR PENSION AND |
AngloGold Ashanti Limited Pension Fund (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.
Number of shares | Percentage of total assets | Fair value | Number of shares | Percentage of total assets | Fair value | Number of shares | Percentage of total assets | Fair value | ||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||
| US Dollars million | 2013 | 2012 | 2011 | |||||||||||||||||||||||||||||||||
Related parties | ||||||||||||||||||||||||||||||||||||
| Investments held in related parties are summarised as follows: | ||||||||||||||||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||||||||||||
AngloGold Ashanti Limited | 360,776 | 1.5 | % | 4 | 184,432 | 1.9 | % | 6 | 100,079 | 1.5 | % | 4 | ||||||||||||||||||||||||
| Other investments exceeding 5% of total plan assets | ||||||||||||||||||||||||||||||||||||
Bonds | ||||||||||||||||||||||||||||||||||||
| IFM Corporate Bond Unit Trust | 291,175,811 | 10.2 | % | 28 | 271,680,384 | 11.4 | % | 35 | 287,226,346 | 12.7 | % | 36 | ||||||||||||||||||||||||
| Allan Gray Orbis Global Equity Fund | 224,509 | 14.5 | % | 40 | 224,509 | 9.5 | % | 29 | 242,110 | 9.5 | % | 27 | ||||||||||||||||||||||||
| Contrarius Global Equity Fund | 1,151,413 | 15.2 | % | 42 | 1,151,413 | 9.2 | % | 28 | 1,251,535 | 9.1 | % | 26 | ||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
| 110 | 92 | 89 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Cash flows | ||
Contributions | ||
AngloGold Ashanti Limited expects to contribute $3m to its pension plan in | ||
| 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 | |||||||||||||||||||||||
| $ | ||||
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 | |||
| Figures in millions | 2013 | |||
| ||||
| US Dollars | ||||
Estimated future benefit payments | ||||
The following pension benefit payments, which reflect the expected future service, as appropriate, are expected to be paid: | ||||
2014 | 19 | |||
2015 | 19 | |||
2016 | 20 | |||
2017 | 20 | |||
2018 | 21 | |||
Thereafter | 137 | |||
F-75
F - 71
| 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 | |||
| Figures in millions | 2013 | 2012 | 2011 | |||||||||||
| ||||||||||||||
| US Dollars | ||||||||||||||
| 29 | PROVISION FOR PENSION AND POST-RETIREMENT BENEFITS (continued) | |||||||||||||
| Post-retirement medical scheme for AngloGold Ashanti Limited South African employees | ||||||||||||||
| 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 valuation was performed as at 31 December 2013. | ||||||||||||||
| Information with respect to the defined benefit liability is as follows: | ||||||||||||||
| Benefit obligation | ||||||||||||||
| Balance at beginning of year | 183 | 157 | 176 | |||||||||||
| Current service cost | 1 | 1 | 1 | |||||||||||
| Recognition of past service cost | - | 22 | - | |||||||||||
| Interest cost | 12 | 13 | 13 | |||||||||||
| Benefits paid | (12) | (15) | (13) | |||||||||||
| Actuarial (gain) loss | (12) | 13 | 11 | |||||||||||
| Translation | (35) | (8) | (31) | |||||||||||
| Balance at end of year | 137 | 183 | 157 | |||||||||||
| Unfunded status at end of year | (137) | (183) | (157) | |||||||||||
| Net amount recognised | (137) | (183) | (157) | |||||||||||
| Components of net periodic benefit cost | ||||||||||||||
| Current service cost | 1 | 1 | 1 | |||||||||||
| Interest cost | 12 | 13 | 13 | |||||||||||
| Recognition of past service cost | - | 22 | - | |||||||||||
| Net periodic benefit cost | 13 | 36 | 14 | |||||||||||
| Assumptions | ||||||||||||||
| Assumptions used to determine benefit obligations at the end of the year are as follows: | ||||||||||||||
| Discount rate | 8.76% | 7.75% | 8.75% | |||||||||||
| Expected increase in health care costs | 7.25% | 7.00% | 7.50% | |||||||||||
| Assumed health care cost trend rates at 31 December: | ||||||||||||||
| Health care cost trend assumed for next year | 7.25% | 7.00% | 7.50% | |||||||||||
| Rate to which the cost trend is assumed to decline (the ultimate trend rate) | 7.25% | 7.00% | 7.50% | |||||||||||
| Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. A 1% point change in assumed health care cost trend rates would have the following effect: | | 1% point increase | | |||||||||||
| Effect on total service and interest cost | 1 | |||||||||||||
| Effect on post-retirement benefit obligation | 12 | |||||||||||||
| | 1% point decrease | | ||||||||||||
| Effect on total service and interest cost | (1) | |||||||||||||
| Effect on post-retirement benefit obligation | (11) | |||||||||||||
F-76
F - 72
| 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 | |||||||||
| $ | ||||
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 | |||
| Figures in millions | 2013 | 2012 | 2011 | |||||||||||||||
| ||||||||||||||||||
| US Dollars | ||||||||||||||||||
| 29 | PROVISION FOR PENSION AND POST-RETIREMENT BENEFITS (continued) | |||||||||||||||||
| Post-retirement medical scheme for AngloGold Ashanti Limited South African employees (continued) | ||||||||||||||||||
| Cash flows | ||||||||||||||||||
| Contributions | ||||||||||||||||||
| AngloGold Ashanti Limited expects to contribute $10m to the post-retirement medical plan in 2014. | ||||||||||||||||||
| Estimated future benefit payments | ||||||||||||||||||
| The following medical benefit payments, which reflect the expected future service, as appropriate, are expected to be paid: | ||||||||||||||||||
| 2014 | 10 | |||||||||||||||||
| 2015 | 11 | |||||||||||||||||
| 2016 | 11 | |||||||||||||||||
| 2017 | 12 | |||||||||||||||||
| 2018 | 12 | |||||||||||||||||
| Thereafter | 81 | |||||||||||||||||
|
| |||||||||||||||||
| 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 North American employees, the Employee Retirement Plan for North America (USA) Inc. employees and the Retiree Medical Plan for Nufcor South Africa employees. | ||||||||||||||||||
Information in respect of other defined benefit plans for the year ended 31 December 2013 has been aggregated in the tables of change in benefit obligations, change in plan assets and components of net periodic benefit cost and is as follows: | ||||||||||||||||||
| Benefit obligation | ||||||||||||||||||
| Balance at beginning of year | 18 | 21 | 22 | |||||||||||||||
| Recognition of past service cost | 2 | - | - | |||||||||||||||
| Interest cost | 1 | 1 | 1 | |||||||||||||||
| Actuarial loss | 5 | 1 | - | |||||||||||||||
| Disposal of subsidiary (note 34) | - | (2) | - | |||||||||||||||
| Benefits paid | (4) | (2) | (2) | |||||||||||||||
| Translation | - | (1) | - | |||||||||||||||
| Balance at end of year | 22 | 18 | 21 | |||||||||||||||
| Plan assets | ||||||||||||||||||
| Fair value of plan assets at beginning of year | 4 | 9 | 10 | |||||||||||||||
| Return on plan assets | - | - | 1 | |||||||||||||||
| Company contributions | 2 | - | - | |||||||||||||||
| Disposal of subsidiary (note 34) | - | (4) | - | |||||||||||||||
| Translation | 1 | (1) | (2) | |||||||||||||||
| Fair value of plan assets at end of year | 7 | 4 | 9 | |||||||||||||||
| Net amount recognised analysed as follows: | (15) | (14) | (12) | |||||||||||||||
| - funded plans | - | - | 2 | |||||||||||||||
| - unfunded plans | (15) | (14) | (14) | |||||||||||||||
| Components of net periodic benefit cost | ||||||||||||||||||
| Recognition of past service cost | 2 | - | - | |||||||||||||||
| Interest cost | 1 | 1 | 1 | |||||||||||||||
| Expected return on plan assets | - | - | (1) | |||||||||||||||
| Net periodic benefit cost | 3 | 1 | - | |||||||||||||||
F-77
F - 73
| Figures in millions | ||||||||||
| ||||||||||
| 29 | PROVISION FOR PENSION AND POST-RETIREMENT BENEFITS (continued) | |||||||||
| Other defined benefit plans (continued) | ||||||||||
| Cash flows | ||||||||||
| The other retirement defined benefit plans are all closed to new members and current members are either retired or deferred members. | ||||||||||
| Estimated future benefit payments | ||||||||||
| The following pension benefit payments, which reflect the expected future service, as appropriate, are expected to be paid: | ||||||||||
| 2014 | 1 | |||||||||
| 2015 | 1 | |||||||||
| 2016 | 1 | |||||||||
| 2017 | 1 | |||||||||
| 2018 | 1 | |||||||||
| Thereafter | 10 | |||||||||
F - 74
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 29 | PROVISION FOR PENSION AND | |
| 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 | ||||||||||
Defined contribution funds |
Contributions to the various retirement schemes are fully expensed during the |
South Africa |
AngloGold Ashanti | ||
| South Africa |
F-78
Continental Africa |
AngloGold Ashanti Limited’s mines in Ghana (Iduapriem and Obuasi) contribute to provident plans for their employees which are defined contribution plans. The funds are administered by Boards of Trustees and invest mainly in Ghana government treasury instruments, fixed term deposits and other investments. The cost of these contributions was $6m (2012: $10m; 2011: $3m). |
AngloGold Ashanti Limited’s mine in Guinea (Siguiri) contributes to a provident plan for their employees which is a defined contribution plan. The fund is administered by a Board of Trustees and invested mainly in Guinea government treasury instruments, fixed term deposits and other investments. A portion paid by Siguiri is currently lodged at Ecobank as a fixed term deposit which generates interest. The cost of these contributions was $2m (2012: $2m; 2011: $2m). |
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. The cost to the group of these contributions amounted to $1m (2012: $2m; 2011: $2m). |
AngloGold Ashanti Limited’s mine in Tanzania (Geita) contributes to pension plans for their employees which are defined contribution plans. There are two main Pension Funds (the Parastatal Provident Fund (PPF) and the National Social Security Fund (NSSF)) each established by an enacted law and managed by Boards of Trustees appointed to that effect. At the time of employment, an employee is at liberty to choose which pension fund to join, thereafter movements between the funds are prohibited by law. The funds invest mainly in Tanzania government treasury instruments, fixed term deposits and other investments. In 2005, Geita Gold Mine established its own supplementary provident scheme whereby all national employees may voluntarily join. 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. |
Australasia |
AngloGold Ashanti Limited’s operations 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. 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. The cost to the group of these contributions amounted to $7m (2012: $6m; 2011: $5m). |
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% of their salary, of which up to 5% is matched at a rate of 150% by AngloGold Ashanti Limited USA. AngloGold Ashanti Limited USA’s contributions were $3m (2012: $2m; 2011: $2m). |
AngloGold Ashanti Limited’s mines in Brazil (AngloGold Ashanti Córrego do Sitío Mineração and Serra Grande) operate defined contribution arrangements for their employees. These arrangements are funded by the operations (basic plan) and operations/employees (optional supplementary plan). A PGBL (Plano Gerador de Benefićio Livre) fund, similar to the American 401(k) type of plan was started in December 2001. Administered by Bradesco Vida e Previdência (which assumes the risk for any eventual actuarial liabilities), this is the only private pension plan sponsored by the group. Contributions amounted to $4m (2012: $1m; 2011: $2m). |
AngloGold Ashanti Limited’s mine in 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% of their salaries towards the Régimen Previsional Público fund and the company makes a contribution of 17% of an employee’s salary to the same fund. |
AngloGold Ashanti Limited’s operations in Colombia offer a Voluntary Pension Fund to their employees. The fund is administered by Porvenier. The employees can contribute up to 10% of their salary and the company contributes 50% of this amount. On termination of employment the participant may apply to withdraw from the fund. |
F - 75
| Year ended December 31 | ||||||||||||
| 2010 | 2009 | 2008 | ||||||||||
| Business segment data | $ | $ | $ | |||||||||
Revenues | ||||||||||||
| Revenues from product sales: | ||||||||||||
| South Africa | 875 | 1,374 | 986 | |||||||||
| Continental Africa | 1,038 | 1,242 | 905 | |||||||||
| Australasia | 206 | 291 | 214 | |||||||||
| Americas | 571 | 692 | 493 | |||||||||
| 2,690 | 3,599 | 2,598 | ||||||||||
| Less: Equity method investments included above | (331 | ) | (358 | ) | (186 | ) | ||||||
| Plus: Loss on realized non-hedge derivatives included above | 2,975 | 543 | 1,243 | |||||||||
| Total revenues from product sales | 5,334 | 3,784 | 3,655 | |||||||||
Depreciation and amortization expense | ||||||||||||
| South Africa | 357 | 281 | 256 | |||||||||
| Continental Africa | 185 | 207 | 251 | |||||||||
| Australasia | 35 | 38 | 47 | |||||||||
| Americas | 152 | 111 | 107 | |||||||||
| 729 | 637 | 661 | ||||||||||
| Less: Equity method investments included above | (9 | ) | (22 | ) | (46 | ) | ||||||
| Total depreciation and amortization expense | 720 | 615 | 615 | |||||||||
| Figures in millions | 2013 | 2012 | 2011 | |||||||||||
| US Dollars | ||||||||||||||
30 | DEFERRED TAXATION | |||||||||||||
Deferred taxation relating to temporary differences is made up as follows: | ||||||||||||||
Liabilities | ||||||||||||||
Tangible assets | 840 | 1,568 | 1,549 | |||||||||||
Inventories | 38 | 64 | 20 | |||||||||||
Derivatives | - | 2 | 8 | |||||||||||
Other | 23 | 15 | 4 | |||||||||||
| 901 | 1,649 | 1,581 | ||||||||||||
Assets | ||||||||||||||
Provisions | 320 | 512 | 406 | |||||||||||
Derivatives | 1 | 1 | 1 | |||||||||||
Tax losses | 73 | 109 | 82 | |||||||||||
Other | 105 | 40 | 23 | |||||||||||
| 499 | 662 | 512 | ||||||||||||
Net deferred taxation liability | 402 | 987 | 1,069 | |||||||||||
Included in the statement of financial position as follows: | ||||||||||||||
Deferred tax assets | 177 | 97 | 79 | |||||||||||
Deferred tax liabilities | 579 | 1,084 | 1,148 | |||||||||||
Net deferred taxation liability | 402 | 987 | 1,069 | |||||||||||
The movement on the deferred tax balance is as follows: | ||||||||||||||
Balance at beginning of year | 987 | 1,069 | 855 | |||||||||||
Taxation of items included in income statement | (467) | (68) | 330 | |||||||||||
Taxation on items included in other comprehensive income | 18 | - | (5) | |||||||||||
Acquisition of subsidiary (note 34) | - | 8 | - | |||||||||||
Disposal of subsidiary (note 34) | - | (2) | - | |||||||||||
Transfer to liabilities held for sale | (39) | - | - | |||||||||||
Translation | (97) | (20) | (111) | |||||||||||
Balance at end of year | 402 | 987 | 1,069 | |||||||||||
F-79Provision 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. Unrecognised taxable temporary differences pertaining to undistributed earnings totalled $305m (2012: $450m; 2011: $417m).
Comparative years have been restated for the adoption of IFRIC 20 and IAS 19. Refer note 39 for details.
F - 76
| Business segment data | Year ended December 31 | |||||||||||
| 2010 | 2009 | 2008 | ||||||||||
| $ | $ | $ | ||||||||||
Segment income/(loss) | ||||||||||||
| South Africa | 675 | 574 | 480 | |||||||||
| Continental Africa | 493 | 199 | (579 | ) | ||||||||
| Australasia | 158 | (15 | ) | (22 | ) | |||||||
| Americas | 508 | 335 | 240 | |||||||||
| Other, including Corporate and Non-gold producing subsidiaries | (179 | ) | (133 | ) | (89 | ) | ||||||
| Total segment income | 1,655 | 960 | 30 | |||||||||
| The following are included in segment income/(loss): | ||||||||||||
Interest revenue | ||||||||||||
| South Africa | 27 | 30 | 48 | |||||||||
| Continental Africa | 3 | 3 | 4 | |||||||||
| Australasia | 2 | 12 | 3 | |||||||||
| Americas | 10 | 8 | 8 | |||||||||
| Other, including Corporate and Non-gold producing subsidiaries | 1 | 1 | 3 | |||||||||
| Total interest revenue | 43 | 54 | 66 | |||||||||
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 | |||||||||
| Total interest expense | 151 | 123 | 72 | |||||||||
Equity income/(loss) in associates | ||||||||||||
| South Africa | (1 | ) | (2 | ) | 2 | |||||||
| Continental Africa | 69 | 102 | (139 | ) | ||||||||
| Other, including Corporate and Non-gold producing subsidiaries | (28 | ) | (12 | ) | (12 | ) | ||||||
| Total equity income/(loss) in associates | 40 | 88 | (149 | ) | ||||||||
Reconciliation of segment income to Net income/(loss) - attributable to AngloGold Ashanti | ||||||||||||
| Segment total | 1,655 | 960 | 30 | |||||||||
| Exploration costs | (206 | ) | (150 | ) | (126 | ) | ||||||
| General and administrative expenses | (228 | ) | (158 | ) | (136 | ) | ||||||
| Market development costs | (14 | ) | (10 | ) | (13 | ) | ||||||
| Non-hedge derivative loss | (786 | ) | (1,452 | ) | (258 | ) | ||||||
| Other operating items | — | — | (19 | ) | ||||||||
| Taxation (expense)/benefit | (255 | ) | 33 | (22 | ) | |||||||
| Discontinued operations | — | — | 23 | |||||||||
| Noncontrolling interests | (54 | ) | (48 | ) | (42 | ) | ||||||
| Net income/(loss) — attributable to AngloGold Ashanti | 112 | (825 | ) | (563 | ) | |||||||
F-80
| Figures in millions | 2013 | 2012 | 2011 | |||||||||||
| US Dollars | ||||||||||||||
| 31 | TRADE, OTHER PAYABLES AND DEFERRED INCOME | |||||||||||||
| Non-current | ||||||||||||||
| Accruals | 1 | 9 | 9 | |||||||||||
| Deferred income | - | 1 | 3 | |||||||||||
| Other payables | 3 | - | 2 | |||||||||||
| 4 | 10 | 14 | ||||||||||||
| Current | ||||||||||||||
| Trade payables | 487 | 590 | 473 | |||||||||||
| Accruals | 294 | 325 | 257 | |||||||||||
| Deferred income | - | 3 | 6 | |||||||||||
| Other payables | 39 | 61 | 15 | |||||||||||
| 820 | 979 | 751 | ||||||||||||
| Total trade, other payables and deferred income | 824 | 989 | 765 | |||||||||||
| Current trade and other payables are non-interest bearing and are normally settled within 60 days. | ||||||||||||||
| 32 | TAXATION | |||||||||||||
| Balance at beginning of year | 66 | 119 | 107 | |||||||||||
| Refunds during the year | 23 | 54 | 98 | |||||||||||
| Payments during the year | (187) | (507) | (477) | |||||||||||
| Taxation of items included in the income statement | 134 | 414 | 407 | |||||||||||
| Disposal of subsidiary (note 34) | - | (4) | - | |||||||||||
| Translation | (6) | (10) | (16) | |||||||||||
| Balance at end of year | 30 | 66 | 119 | |||||||||||
| Included in the statement of financial position as follows: | ||||||||||||||
| Taxation asset included in trade and other receivables | 51 | 54 | 39 | |||||||||||
| Taxation liability | 81 | 120 | 158 | |||||||||||
| 30 | 66 | 119 | ||||||||||||
| Comparative years have been restated for the adoption of IFRIC 20. Refer to change in accounting policies (note 39) for details. | ||||||||||||||
| 33 | CASH GENERATED FROM OPERATIONS | |||||||||||||
| (Loss) profit before taxation | (2,533) | 1,261 | 2,370 | |||||||||||
| Adjusted for: | ||||||||||||||
| Movement on non-hedge derivatives and other commodity contracts (note 37) | (94) | 35 | 1 | |||||||||||
| Amortisation of tangible assets (notes 4 and 15) | 775 | 830 | 825 | |||||||||||
| Finance costs and unwinding of obligations (note 8) | 296 | 231 | 196 | |||||||||||
| Environmental, rehabilitation and other expenditure | (66) | (17) | 171 | |||||||||||
| Special items | 3,399 | 402 | (93) | |||||||||||
| Amortisation of intangible assets (notes 4 and 16) | 24 | 5 | 2 | |||||||||||
| Fair value adjustment on $1.25bn bonds | 58 | - | - | |||||||||||
| Fair value adjustment on option component of convertible bonds | (9) | (83) | (84) | |||||||||||
| Fair value adjustment on mandatory convertible bonds | (356) | (162) | (104) | |||||||||||
| Interest received (note 3) | (39) | (43) | (52) | |||||||||||
| Share of associates and joint ventures’ loss (profit) (note 9) | 162 | 30 | (72) | |||||||||||
| Other non-cash movements | 25 | 79 | 91 | |||||||||||
| Movements in working capital | (250) | (218) | (170) | |||||||||||
| 1,392 | 2,350 | 3,081 | ||||||||||||
| Movements in working capital: | ||||||||||||||
| Increase in inventories | (142) | (324) | (236) | |||||||||||
| Decrease (increase) in trade and other receivables | 69 | (110) | - | |||||||||||
| (Decrease) increase in trade, other payables and deferred income | (177) | 216 | 66 | |||||||||||
| (250) | (218) | (170) | ||||||||||||
Comparative years have been restated for the adoption of IFRIC 20 and IAS 19. Refer change in accounting policies (note 39) for details.
F - 77
| 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 | |||||||||
ISS International Limited | 15 | — | — | |||||||||
Rand Refinery Limited | 1 | 1 | 1 | |||||||||
Tau Lekoa | — | 73 | — |
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 | |||||||||
F-81
| 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 | ||||||||||
Long-lived assets(2) | ||||||||||||
| South Africa | 2,458 | 2,176 | 1,668 | |||||||||
| Ghana | 1,924 | 1,887 | 1,863 | |||||||||
| Tanzania | 584 | |||||||||||
| United States of America | 719 | 671 | ||||||||||
| Brazil | 768 | 689 | 598 |
F-82
| Figures in millions | |||
| 2010 | 2009 | 2008 | ||||||||||
| $ | $ | $ | ||||||||||
| Compensation cost recognized | 59 | 41 | 40 | |||||||||
F-83
| 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 | ||||||
| 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 | |||||||||
F-84
| 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 | ||||||
| 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 | |||||||||
F-85
| 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 | |||||||||||||
| 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 | ||||||||||||
F-86
| US Dollars | ||||||
| BUSINESS COMBINATIONS | ||||||
| Acquisition of First Uranium (Pty) Limited | ||||||
On 20 July 2012, AngloGold Ashanti Limited 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, 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, for an aggregate cash consideration of $335m. The transaction was funded from cash reserves and debt facilities. The acquisition has been accounted for using the acquisition method. | ||||||
The fair value of the identifiable assets and liabilities of First Uranium (Pty) Limited as at | ||||||
| Assets | ||||||
| Tangible assets (note 15) | ||||||
| Other investments (note 19) | 3 | |||||
| Deferred tax (note 30) | 52 | |||||
| Inventories | 134 | |||||
| Trade and other receivables | 2 | |||||
| Cash restricted for use | 3 | |||||
| Cash and cash equivalents | 5 | |||||
| 815 | ||||||
| Liabilities | ||||||
| Environmental rehabilitation and other provisions (note 28) | 386 | |||||
| Loans from group companies | 204 | |||||
| Deferred tax (note 30) | 60 | |||||
| Trade and other payables | 48 | |||||
| 698 | ||||||
| Total identifiable net assets at fair value | 117 | |||||
| Purchase consideration | 131 | |||||
| Goodwill recognised on acquisition (note 16) | 14 | |||||
| Analysis of cash flows on acquisition: | ||||||
| Net cash acquired with the subsidiary | 5 | |||||
| Cash paid - share capital acquired | (131) | |||||
| Cash paid - loan acquired | (204) | |||||
| (330) | ||
| 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 | |||||||||
F-87Since acquisition, First Uranium (Pty) Limited has contributed $41m of revenue and a profit of less than $1m to the net profit before tax of the group. If the combination had taken place at the beginning of the year, applying the group accounting policies, the group’s profit for the 2012 year would have been $920m and revenue would have been $6,697m.
The transaction costs of $3m have been expensed and are included in administrative expenses in the income statement and are part of operating activities in the statement of cash flows.
The goodwill of $14m arising from the acquisition consists largely of the expected synergies arising from the immediate proximity of AngloGold Ashanti Limited’s own tailings facilities to the Mine Waste Solutions plant that will allow processing of AngloGold Ashanti Limited’s Vaal River tailings without having to build additional processing facilities. The processing of AngloGold Ashanti Limited’s tailings will reduce the environmental liability associated with those tailings. In addition, the company is able to utilise its recently developed processes and recovery technology for tailings which will increase the ore recovery rates from both AngloGold Ashanti Limited and First Uranium (Pty) Limited tailings alike.
None of the goodwill recognised is expected to be deductible for income tax purposes. There have been no significant movements in goodwill or provisions except for the fair value movements related to the commodity contract since the date of acquisition.
Financial assets acquired includes trade and other receivables with a fair value of $2m. All trade and other receivables are expected to be collectible.
F - 78
| 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 | ||||||||||||
| Figures in millions | |||
| US Dollars | ||||||
| BUSINESS COMBINATIONS (continued) | ||||||
| Part disposal of Rand Refinery Limited | ||||||
| In early December 2012, AngloGold Ashanti Limited disposed of a 5% interest in Rand Refinery Limited (Rand Refinery) for a total cash consideration of $6m. At 31 December 2012, AngloGold Ashanti Limited held a remaining interest of 48.03% and this interest was accounted for as an associate. | ||||||
| The carrying value of the identifiable assets and liabilities of Rand Refinery as at | ||||||
| Assets | ||||||
| Tangible assets (note 15) | ||||||
| Other non-current assets (note 21) | 2 | |||||
| Non-current assets held for sale | 1 | |||||
| Inventories | 22 | |||||
| Trade and other receivables | 13 | |||||
| Cash and cash equivalents | 31 | |||||
| 122 | ||||||
| Liabilities | ||||||
| Deferred tax (note 30) | 2 | |||||
| Trade and other payables | 22 | |||||
| Taxation (note 32) | 4 | |||||
| 28 | ||||||
| Total identifiable net assets | 94 | |||||
| Consideration received | 6 | |||||
| Fair value of residual value of investment (note 18) | 57 | |||||
| Non-controlling interest | 45 | |||||
| Less: Net assets disposed | (94) | |||||
| Total gain on disposal | 14 | |||||
| Total gain on disposal | 14 | |||||
| Realised gain | 5 | |||||
| Unrealised gain | ||||||
| 2010 | 2009 | 2008 | ||||||||||
| Total intrinsic value of awards outstanding at period end (R millions) | 522 | 387 | 250 | |||||||||
| Intrinsic value of awards exercised (R millions) | 26 | 22 | 11 | |||||||||
| Weighted average remaining contractual term (years) | 7 | 7 | 8 | |||||||||
| Compensation expense related to BSP and LTIP awards recognized ($ millions) | 45 | 27 | 20 | |||||||||
| As at December 31, the unrecognized compensation cost related to unvested awards of the BSP and LTIP plans amounted to ($ millions) | 23 | 18 | 12 | |||||||||
Unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately (years) | 2 | 2 | 2 | |||||||||
F-88
F - 79
| 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 | |||||||||
F-89
| Figures in million | 2013 | 2012 | 2011 | |||||||||||||
| US Dollars | ||||||||||||||||
| 35 | RELATED PARTIES | |||||||||||||||
| Material related party transactions were as follows (not attributable): | ||||||||||||||||
| Sales and services rendered to related parties | ||||||||||||||||
| Joint ventures | 18 | 18 | 18 | |||||||||||||
| Purchases and services acquired from related parties | ||||||||||||||||
| Associates | 7 | 4 | 6 | |||||||||||||
| Outstanding balances arising from sale of goods and services due by related parties | ||||||||||||||||
| Joint ventures | 3 | 2 | 3 | |||||||||||||
| Amounts owed to/due by related parties above are unsecured and non-interest bearing. | ||||||||||||||||
| Loans advanced to associates | ||||||||||||||||
| Oro Group (Pty) Limited | 1 | 2 | 1 | |||||||||||||
| The loan bears a market related interest rate determined by the Oro Group (Pty) Limited’s board of directors and is repayable at its discretion. | ||||||||||||||||
| Trans-Siberian Gold plc | - | - | 3 | |||||||||||||
| The loan was unsecured, carried interest at 8% per annum and was converted into ordinary shares during 2012. | ||||||||||||||||
| Loans advanced to joint ventures | ||||||||||||||||
| Société d’Exploitation des Mines d’Or de Sadiola S.A.(1) | - | 36 | - | |||||||||||||
| The loan was repayable on demand with interest at LIBOR plus 2% per annum. The loan was fully impaired during 2013. | ||||||||||||||||
| Société d’Exploitation des Mines d’Or de Yatela S.A. | - | - | - | |||||||||||||
| A loan repayable on demand and bears interest at LIBOR plus 2% per annum. The loan was fully impaired during 2012. | ||||||||||||||||
| AuruMar (Pty) Limited | - | 2 | 5 | |||||||||||||
| The loan was interest free and had no fixed terms of repayment. The loan was repaid during 2013. | ||||||||||||||||
| Thani Ashanti Alliance Limited | - | - | 20 | |||||||||||||
| Interest was charged at JIBAR plus 0.95% per annum. The loan was fully impaired during 2012 and fully recovered during August 2013. | ||||||||||||||||
| Loans advanced to associates and joint ventures are included in the carrying value of investments in associates and joint ventures (note 17). | ||||||||||||||||
| (1) During the year a loan of $39m was granted to Sadiola and subsequently impaired. | ||||||||||||||||
| Details of guarantees to related parties are included in note 36. | ||||||||||||||||
| Agreement with Izingwe Property Managers (Pty) Limited | ||||||||||||||||
AngloGold Ashanti entered into an agreement (“Agreement”) with Izingwe Property Managers (Pty) Limited (“Izingwe Property”) under which Izingwe Property assists AngloGold Ashanti in planning, design, development and construction of 200 units of housing in South Africa for employees of AngloGold Ashanti. Izingwe Property’s roles are those of development and project manager and main contractor. The terms of the Agreement, entered into on 19 February 2013, call for payments from AngloGold Ashanti to Izingwe Property in the amount of $5m in consideration for Izingwe Property’s services. To date $1.9m has been paid to Izingwe Property pursuant to the agreement. Mr Sipho Pityana, a Non-Executive Director of the Company, is Chairman and a 44% shareholder in Izingwe Holdings (Pty) Limited (“Izingwe”), AngloGold Ashanti’s BEE partner. Izingwe Capital (Pty) Limited, an associate company of Izingwe is the majority shareholder of Izingwe Property. | ||||||||||||||||
F - 80
| 35 | RELATED PARTIES (continued) |
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). All recently updated Executive Committee contracts include details on participation in the Co-Investment plan and the applicable Minimum Shareholder Requirement (MSR).
South African executives (with the exception of the CEO who is remunerated 100% in South Africa) have dual contracts which reflect the percentage of their time focused on offshore business requirements.
The executive contracts are reviewed annually and currently continue to include a change of control provision. The change of control is subject to the following triggers:
The acquisition of all or part of AngloGold Ashanti; or
A number of shareholders holding less than 35% of the company’s issued share capital consorting to gain a majority of the board 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 period and the change of control contract terms. The notice period applied per category of executive and the change of control periods as at 31 December 2013 were as follows:
| 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 | % | ||||||
| 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 | — | — | ||||||
| 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 | |||||||||
| Change of control | ||||||||
Chief Executive Officer | 12 months | 12 months | ||||||
Chief Financial Officer | 6 months | 6 months | ||||||
Other Executive Committee members | 6 months | 6 months | ||||||
F-90In appointing Venkat as the new CEO the Remuneration and Human Resources Committee increased his notice period from 9 months to 12 months in line with the previous CEO, Mark Cutifani’s, notice period. The Remuneration and Human Resources Committee however reduced the change of control from 24 months to 12 months.
F - 81
RELATED PARTIES (continued) | ||
| 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
Directors and other key management personnel
Details relating to Directors’ and Prescribed Officers’ emoluments and shareholdings in the company are disclosed below:
Executive Directors’ and Prescribed Officers’ remuneration
| Appointed with effect from | Resigned/ retired with effect from | Salary (1) | Performance related payments(2) | Pension scheme benefits | Other benefits and encashed leave(3) | Sub total | Pre-tax gain on share options | Total | Total | |||||||||||||||||||||||||||||||||
| Figures in thousands | 2013 | SA Rands | US Dollars (4) | |||||||||||||||||||||||||||||||||||||||
Executive Directors | ||||||||||||||||||||||||||||||||||||||||||
M Cutifani | 31-Mar-13 | 3,639 | - | 664 | 1,915 | 6,218 | 19,293 | 25,511 | 2,651 | |||||||||||||||||||||||||||||||||
RN Duffy | Full year | 6,589 | 2,659 | 1,341 | 152 | 10,741 | - | 10,741 | 1,116 | |||||||||||||||||||||||||||||||||
AM O’ Neill(7) | 2-Aug-13 | 10,256 | - | 145 | 5,171 | 15,572 | 18,421 | 33,993 | 3,532 | |||||||||||||||||||||||||||||||||
S Venkatakrishnan | Full year | 13,135 | - | 2,704 | 2,117 | 17,956 | - | 17,956 | 1,866 | |||||||||||||||||||||||||||||||||
| 33,619 | 2,659 | 4,854 | 9,355 | 50,487 | 37,714 | 88,201 | 9,165 | |||||||||||||||||||||||||||||||||||
Prescribed Officers | ||||||||||||||||||||||||||||||||||||||||||
I Boninelli | Full year | 5,200 | 3,691 | 553 | 58 | 9,502 | - | 9,502 | 987 | |||||||||||||||||||||||||||||||||
CE Carter | Full year | 6,457 | 2,234 | 686 | 487 | 9,864 | 3,048 | 12,912 | 1,342 | |||||||||||||||||||||||||||||||||
GJ Ehm | Full year | 7,349 | 4,433 | 232 | 85 | 12,099 | - | 12,099 | 1,257 | |||||||||||||||||||||||||||||||||
RW Largent | Full year | 10,037 | 4,358 | 1,662 | 2,647 | 18,704 | 2,952 | 21,656 | 2,251 | |||||||||||||||||||||||||||||||||
M MacFarlane(5) (8) | 30-Jun-13 | 2,292 | - | 284 | 3,367 | 5,943 | - | 5,943 | 618 | |||||||||||||||||||||||||||||||||
DC Noko | Full year | 4,792 | 1,802 | 509 | 10 | 7,113 | - | 7,113 | 739 | |||||||||||||||||||||||||||||||||
MP O’ Hare(6) | Full year | 6,697 | 2,719 | 1,363 | 117 | 10,896 | 517 | 11,413 | 1,186 | |||||||||||||||||||||||||||||||||
ME Sanz Perez | Full year | 4,864 | 3,573 | 517 | 53 | 9,007 | - | 9,007 | 936 | |||||||||||||||||||||||||||||||||
YZ Simelane | Full year | 3,865 | 909 | 787 | 214 | 5,775 | - | 5,775 | 600 | |||||||||||||||||||||||||||||||||
| 51,553 | 23,719 | 6,593 | 7,038 | 88,903 | 6,517 | 95,420 | 9,916 | |||||||||||||||||||||||||||||||||||
Total Executive Directors’ and Prescribed Officers’ remuneration ZAR | 85,172 | 26,378 | 11,447 | 16,393 | 139,390 | 44,231 | 183,621 | 19,081 | ||||||||||||||||||||||||||||||||||
Total Executive Directors’ and Prescribed Officers’ remuneration USD | 8,851 | 2,741 | 1,189 | 1,703 | 14,484 | 4,597 | 19,081 | |||||||||||||||||||||||||||||||||||
| Appointed with effect from | Resigned/ retired with effect from | Salary (1) | Performance related payments(2) | Pension scheme benefits | Other benefits and encashed leave(3) | Sub total | Pre-tax gain on share options | Total | Total | |||||||||||||||||||||||||||||||||
| Figures in thousands | 2012 | SA Rands | US Dollars (4) | |||||||||||||||||||||||||||||||||||||||
Executive Directors | ||||||||||||||||||||||||||||||||||||||||||
M Cutifani(9) | Full year | 14,041 | 2,939 | 2,879 | 466 | 20,325 | 22,946 | 43,271 | 5,279 | |||||||||||||||||||||||||||||||||
S Venkatakrishnan (9)(10) | Full year | 8,708 | 2,577 | 1,711 | 4,277 | 17,273 | 18,713 | 35,986 | 4,391 | |||||||||||||||||||||||||||||||||
| 22,749 | 5,516 | 4,590 | 4,743 | 37,598 | 41,659 | 79,257 | 9,670 | |||||||||||||||||||||||||||||||||||
Prescribed Officers | ||||||||||||||||||||||||||||||||||||||||||
I Boninelli | Full year | 4,841 | 965 | 505 | 27 | 6,338 | - | 6,338 | 773 | |||||||||||||||||||||||||||||||||
CE Carter(9)(10) | Full year | 5,601 | 1,281 | 584 | 2,388 | 9,854 | 8,674 | 18,528 | 2,261 | |||||||||||||||||||||||||||||||||
RN Duffy(10) | Full year | 6,191 | 869 | 1,211 | 2,669 | 10,940 | - | 10,940 | 1,335 | |||||||||||||||||||||||||||||||||
GJ Ehm(10) | Full year | 5,641 | 977 | 510 | 1,435 | 8,563 | - | 8,563 | 1,045 | |||||||||||||||||||||||||||||||||
RW Largent(10) | Full year | 6,779 | 1,447 | 1,565 | 2,920 | 12,711 | 14,022 | 26,733 | 3,262 | |||||||||||||||||||||||||||||||||
RL Lazare(10) (11) | 31-Mar-12 | 1,419 | 2,626 | 245 | 3,067 | 7,357 | 10,184 | 17,541 | 2,140 | |||||||||||||||||||||||||||||||||
M MacFarlane(5) | 1-Jun-12 | 3,108 | 346 | 219 | 2 | 3,675 | - | 3,675 | 448 | |||||||||||||||||||||||||||||||||
DC Noko(12) | 15-Jun-12 | 2,446 | 455 | 306 | 2,256 | 5,463 | - | 5,463 | 667 | |||||||||||||||||||||||||||||||||
MP O’Hare | Full year | 5,634 | 1,035 | 1,101 | 391 | 8,161 | - | 8,161 | 996 | |||||||||||||||||||||||||||||||||
AM O’Neill(10) | Full year | 11,911 | 2,686 | 318 | 2,101 | 17,016 | - | 17,016 | 2,076 | |||||||||||||||||||||||||||||||||
ME Sanz Perez(13) | Full year | 3,945 | 830 | 411 | 789 | 5,975 | - | 5,975 | 729 | |||||||||||||||||||||||||||||||||
YZ Simelane | Full year | 3,496 | 594 | 684 | 111 | 4,885 | - | 4,885 | 596 | |||||||||||||||||||||||||||||||||
| 61,012 | 14,111 | 7,659 | 18,156 | 100,938 | 32,880 | 133,818 | 16,328 | |||||||||||||||||||||||||||||||||||
Total Executive Directors’ and Prescribed Officers’ remuneration ZAR | 83,761 | 19,627 | 12,249 | 22,899 | 138,536 | 74,539 | 213,075 | 25,998 | ||||||||||||||||||||||||||||||||||
Total Executive Directors’ and Prescribed Officers’ remuneration USD | 10,220 | 2,395 | 1,494 | 2,794 | 16,903 | 9,095 | 25,998 | |||||||||||||||||||||||||||||||||||
F - 82
RELATED PARTIES (continued) | ||
Directors and other key management personnel (continued)
Executive directors’ and prescribed officers’ remuneration (continued)
| Appointed with effect from | Resigned/ retired with effect from | Salary (1) | Performance related payments (2) | Pension scheme benefits | Other benefits and encashed leave(3) | Sub total | Pre-tax gain onshare options | Total | Total | |||||||||||||||||||||||||||||||||
| Figures in thousands | 2011 | SA Rands | US Dollars (4) | |||||||||||||||||||||||||||||||||||||||
Executive Directors | ||||||||||||||||||||||||||||||||||||||||||
M Cutifani | Full year | 12,591 | 8,345 | 2,298 | 4,602 | 27,836 | - | 27,836 | 3,836 | |||||||||||||||||||||||||||||||||
S Venkatakrishnan (10) | Full year | 7,792 | 4,420 | 1,185 | 2,982 | 16,379 | - | 16,379 | 2,257 | |||||||||||||||||||||||||||||||||
| 20,383 | 12,765 | 3,483 | 7,584 | 44,215 | - | 44,215 | 6,093 | |||||||||||||||||||||||||||||||||||
Prescribed Officers |
| |||||||||||||||||||||||||||||||||||||||||
I Boninelli | 01-Nov-11 | 749 | 2,346 | 78 | 6 | 3,179 | - | 3,179 | 438 | |||||||||||||||||||||||||||||||||
CE Carter(10) | Full year | 5,112 | 2,407 | 547 | 1,459 | 9,525 | 2,562 | 12,087 | 1,666 | |||||||||||||||||||||||||||||||||
RN Duffy(10) | Full year | 5,168 | 2,434 | 1,070 | 1,609 | 10,281 | 1,246 | 11,527 | 1,589 | |||||||||||||||||||||||||||||||||
GJ Ehm(10) | Full year | 4,251 | 2,027 | 604 | 2,369 | 9,251 | 6,042 | 15,293 | 2,107 | |||||||||||||||||||||||||||||||||
RW Largent(10) | Full year | 4,871 | 2,268 | 308 | 1,881 | 9,328 | - | 9,328 | 1,285 | |||||||||||||||||||||||||||||||||
RL Lazare(10) (11) | Full year | 5,134 | 4,601 | 1,001 | 4,116 | 14,852 | 7,261 | 22,113 | 3,047 | |||||||||||||||||||||||||||||||||
MP O’Hare | 01-Jun-11 | 2,594 | 2,084 | 518 | 3,877 | 9,073 | 2,060 | 11,133 | 1,534 | |||||||||||||||||||||||||||||||||
AM O’Neill(10) | Full year | 11,670 | 4,530 | 955 | 1,096 | 18,251 | - | 18,251 | 2,515 | |||||||||||||||||||||||||||||||||
ME Sanz Perez | 13-Jun-11 | 1,687 | 1,428 | 176 | 767 | 4,058 | - | 4,058 | 559 | |||||||||||||||||||||||||||||||||
TML Setiloane | 31-Aug-11 | 2,817 | 1,165 | 304 | 1,426 | 5,712 | - | 5,712 | 787 | |||||||||||||||||||||||||||||||||
YZ Simelane | Full year | 3,192 | 1,408 | 605 | 168 | 5,373 | 5,227 | 10,600 | 1,461 | |||||||||||||||||||||||||||||||||
| 47,245 | 26,698 | 6,166 | 18,774 | 98,883 | 24,398 | 123,281 | 16,988 | |||||||||||||||||||||||||||||||||||
Total Executive Directors’ and Prescribed Officers’ remuneration ZAR | 67,628 | 39,463 | 9,649 | 26,358 | 143,098 | 24,398 | 167,496 | 23,081 | ||||||||||||||||||||||||||||||||||
Total Executive Directors’ and Prescribed Officers’ remuneration USD | 9,319 | 5,438 | 1,330 | 3,632 | 19,719 | 3,362 | 23,081 | |||||||||||||||||||||||||||||||||||
| (1) | Salaries are disclosed only for the period from or to which office is held. The 2013 salaries for RN Duffy and AM O’Neill are inclusive of salaries as Prescribed Officers and Executive Directors roles. The salary for S Venkatakrishnan is inclusive of CFO, acting CEO and CEO roles. |
| (2) | The performance related payments are calculated on the year’s financial results. |
| (3) | Includes health care, separation payments, cash in lieu of dividends and personal travel. Surplus leave days accrued are automatically encashed unless work requirements allow for carry over. |
| (4) | Values have been converted using the average annual exchange rate for 2013 of R9.6231:$1 (2012: R8.1961:$1; 2011:R7.2569:$1). |
| (5) | M MacFarlane commuted between Canada and South Africa and the company carried the cost of flights and hotel accommodation in South Africa; these are excluded for reporting purposes. |
| (6) | MP O’ Hare had a once off pension payment in recognition of previous service paid into the AngloGold Ashanti |
| (7) | Other benefits of AM O’ Neill include early retirement payments of a |
| (8) | Other benefits of M MacFarlane include separation payments of a severance package and pay in lieu of leave. |
| (9) | These executives and prescribed officer applied all of the after tax proceeds from the sale of their options to acquire ordinary shares in AngloGold Ashanti |
| (10) | Received retention bonus. |
| (11) | Cash paid in lieu of LTIP for 2012. |
| (12) | Received a sign-on bonus. |
| (13) | Received the |
F-92
F - 83
| 35 | RELATED PARTIES (continued) |
Directors and other key management personnel (continued)
Number of incomeFOR 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 | ||||||||||||||
Balance at 1 January 2013 | Granted during 2013 | Exercised during 2013 | Pre-tax gains on share options exercised ($000) | Lapsed during 2013 | Balance as at 31 December 2013 (1) | |||||||||||||||||||
Executive Directors | ||||||||||||||||||||||||
M Cutifani(3) | 271,891 | 5,429 | 88,594 | 2,005 | 188,726 | - | ||||||||||||||||||
RN Duffy | 109,648 | 65,193 | - | - | 8,298 | 166,543 | ||||||||||||||||||
AM O’Neill(4) | 150,113 | 124,961 | 129,284 | 1,914 | 145,790 | - | ||||||||||||||||||
S Venkatakrishnan | 136,395 | 99,043 | - | - | 15,045 | 220,393 | ||||||||||||||||||
| 668,047 | 294,626 | 217,878 | 3,919 | 357,859 | 386,936 | |||||||||||||||||||
Prescribed Officers(2) | ||||||||||||||||||||||||
I Boninelli | 30,158 | 52,314 | - | - | - | 82,472 | ||||||||||||||||||
CE Carter | 66,331 | 66,929 | 13,609 | 317 | 7,262 | 112,389 | ||||||||||||||||||
GJ Ehm | 68,471 | 59,443 | - | - | 5,452 | 122,462 | ||||||||||||||||||
RW Largent | 56,206 | 76,865 | 12,537 | 306 | 7,461 | 113,073 | ||||||||||||||||||
MP O’Hare | 74,619 | 66,699 | 2,306 | 54 | 5,396 | 133,616 | ||||||||||||||||||
M MacFarlane | - | 42,765 | - | - | 42,765 | - | ||||||||||||||||||
D Noko | - | 45,334 | - | - | - | 45,334 | ||||||||||||||||||
ME Sanz Perez | 21,793 | 46,087 | - | - | - | 67,880 | ||||||||||||||||||
YZ Simelane | 42,969 | 36,218 | - | - | 5,152 | 74,035 | ||||||||||||||||||
| 360,547 | 492,654 | 28,452 | 677 | 73,488 | 751,261 | |||||||||||||||||||
Other management | 3,551,735 | 2,533,048 | 684,413 | 12,227 | 850,184 | 4,550,186 | ||||||||||||||||||
Total share incentive scheme | 4,580,329 | 3,320,328 | 930,743 | 16,823 | 1,281,531 | 5,688,383 | ||||||||||||||||||
Balance at 1 January 2012 | Granted during 2012 | Exercised during 2012 | Pre-tax gains on share options exercised ($000) | Lapsed during 2012 | Balance as at 31 December 2012(1) | |||||||||||||||||||
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(2) | ||||||||||||||||||||||||
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(7) | 41,573 | 1,901 | 34,279 | 1,243 | 9,195 | - | ||||||||||||||||||
MP O’Hare | 54,281 | 22,809 | - | - | 2,471 | 74,619 | ||||||||||||||||||
M MacFarlane(5) | - | - | - | - | - | - | ||||||||||||||||||
AM O’Neill | 108,544 | 45,512 | - | - | 3,943 | 150,113 | ||||||||||||||||||
D Noko(6) | - | - | - | - | - | - | ||||||||||||||||||
ME Sanz Perez | 8,406 | 13,387 | - | - | - | 21,793 | ||||||||||||||||||
YZ Simelane | 32,008 | 13,350 | - | - | 2,389 | 42,969 | ||||||||||||||||||
| 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 | ||||||||||||||||||
F-93
F - 84
| 35 | RELATED PARTIES (continued) |
Directors and other key management personnel (continued)
Number of incomeFOR THE YEAR ENDED DECEMBERoptions and awards granted (continued)
| Balance at 1 January 2011 | Granted during 2011 | Exercised during 2011 | Pre-tax gains on share options exercised (R000) | Lapsed during 2011 | Balance as at 31 December 2011(1) | |||||||||||||||||||
Executive Directors | ||||||||||||||||||||||||
M Cutifani | 177,821 | 86,789 | - | - | 6,400 | 258,210 | ||||||||||||||||||
S Venkatakrishnan | 117,020 | 47,943 | - | - | 3,997 | 160,966 | ||||||||||||||||||
| 294,841 | 134,732 | - | - | 10,397 | 419,176 | |||||||||||||||||||
Prescribed Officers(2) | ||||||||||||||||||||||||
I Boninelli | - | 8,568 | - | - | - | 8,568 | ||||||||||||||||||
CE Carter | 69,089 | 23,300 | 14,011 | 2,562 | 1,751 | 76,627 | ||||||||||||||||||
RN Duffy | 75,595 | 21,950 | 10,400 | 1,246 | 1,751 | 85,394 | ||||||||||||||||||
GJ Ehm | 53,616 | 18,702 | 21,989 | 6,042 | 1,484 | 48,845 | ||||||||||||||||||
RW Largent | 67,229 | 22,730 | - | - | 1,628 | 88,331 | ||||||||||||||||||
RL Lazare | 72,894 | - | 29,279 | 7,261 | 2,042 | 41,573 | ||||||||||||||||||
MP O’Hare | 58,268 | 12,852 | 15,617 | 2,060 | 1,222 | 54,281 | ||||||||||||||||||
AM O’Neill | 69,413 | 41,528 | - | - | 2,397 | 108,544 | ||||||||||||||||||
ME Sanz Perez | - | 8,406 | - | - | - | 8,406 | ||||||||||||||||||
TML Setiloane | 44,836 | 5,357 | - | - | 1,751 | 48,442 | ||||||||||||||||||
YZ Simelane | 39,239 | 12,085 | 17,856 | 5,227 | 1,460 | 32,008 | ||||||||||||||||||
| 550,179 | 175,478 | 109,152 | 24,398 | 15,486 | 601,019 | |||||||||||||||||||
Other management | 2,699,736 | 1,196,942 | 780,441 | 229,530 | 157,850 | 2,958,387 | ||||||||||||||||||
Total share incentive scheme | 3,544,756 | 1,507,152 | 889,593 | 253,928 | 183,733 | 3,978,582 | ||||||||||||||||||
| (1) | The latest expiry date of all options/awards granted and outstanding at 31 December 2013 is 13 March 2023 (2012: 21 February 2022; 2011: 21 February 2021). |
| (2) | Pursuant to the Companies Act, which came into effect on 1 May 2011, companies are required to identify and disclose the remuneration for the prescribed officers of the company. |
| (3) | No longer an executive director with effect from 31 March 2013. |
| (4) | No longer an executive director with effect 15 July 2013 and went on early retirement from 2 August 2013. |
| (5) | M MacFarlane was appointed to the Executive Committee with effect from 1 June 2012 and therefore had no holdings/grants in 2012. |
| (6) | D Noko was appointed to the Executive Committee with effect from 15 June 2012 and therefore had no holdings/grants in 2012. |
| (7) | No longer a prescribed officer with effect from 31 March 2012. |
Subsequent to year end and up to 28 February 2014, no options/awards have been exercised by Executive Directors and Prescribed Officers, except for CE Carter who exercised 4,481 awards for a pre-tax gain of $89k; and RW Largent who exercised 4,790 awards for a pre-tax gain of $101k.
A total of 1,668,617 (2012: 1,264,872; 2011: 1,143,194) options/awards out of the 5,688,383 (2012: 4,580,329; 2011: 3,978,582) options/awards granted and outstanding at 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 | ) | |||||||||||
F-94Awards granted since 2005 have been granted at no cost to participants.
Non-Executive Directors are not eligible to participate in the share incentive scheme.
F - 85
| 35 | RELATED PARTIES (continued) |
Directors and other key management personnel (continued)
Awards granted in respect of incomeFOR 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 | ) | |||||||||||
| Total(1) | Value ($000) (3) | Total(2) | Value ($000) (3) | Total(4) | Value ($000) (3) | |||||||||||||||||||
| Issued in | 2014 | 2013 | 2012 | |||||||||||||||||||||
Executive Directors | ||||||||||||||||||||||||
M Cutifani(6) | - | - | 5,429 | 148 | 112,183 | 4,481 | ||||||||||||||||||
S Venkatakrishnan | 166,625 | 3,471 | 99,043 | 2,736 | 52,176 | 2,079 | ||||||||||||||||||
RN Duffy | 92,361 | 1,918 | 65,193 | 1,801 | 27,790 | 1,106 | ||||||||||||||||||
AM O’Neill(7) | - | - | 124,961 | 3,452 | 45,512 | 1,821 | ||||||||||||||||||
| 258,986 | 5,389 | 294,626 | 8,137 | 237,661 | 9,487 | |||||||||||||||||||
Prescribed Officers | ||||||||||||||||||||||||
I Boninelli | 73,930 | 1,523 | 52,314 | 1,445 | 21,590 | 866 | ||||||||||||||||||
CE Carter | 88,001 | 1,832 | 66,929 | 1,849 | 25,507 | 1,016 | ||||||||||||||||||
GJ Ehm | 103,913 | 2,158 | 59,443 | 1,642 | 22,286 | 889 | ||||||||||||||||||
RW Largent(5 | 161,509 | 3,323 | 76,865 | 2,124 | 26,083 | 1,038 | ||||||||||||||||||
RL Lazare(8) | - | - | - | - | 1,901 | 68 | ||||||||||||||||||
MP O’Hare | 95,877 | 1,985 | 66,699 | 1,843 | 22,809 | 912 | ||||||||||||||||||
M MacFarlane | - | - | 42,765 | 1,182 | - | - | ||||||||||||||||||
D Noko | 68,178 | 1,403 | 45,334 | 1,253 | - | - | ||||||||||||||||||
ME Sanz Perez | 73,107 | 1,504 | 46,087 | 1,273 | 13,387 | 537 | ||||||||||||||||||
TML Setiloane(9) | - | - | - | - | 1,263 | 45 | ||||||||||||||||||
YZ Simelane | 39,091 | 816 | 36,218 | 1,001 | 13,350 | 532 | ||||||||||||||||||
| 703,606 | 14,544 | 492,654 | 13,612 | 148,176 | 5,903 | |||||||||||||||||||
Total awards to executive management | 962,592 | 19,933 | 787,280 | 21,749 | 385,837 | 15,390 | ||||||||||||||||||
| (1) | Includes awards granted in respect of the 20% top-up for the 2011 BSP awards. |
| (2) | Includes awards granted in respect of the 20% top-up for the 2010 BSP awards, 2013 BSP matching awards and 2013 LTIP (inclusive of the 60% share retention bonus award; the 40% deferred cash portion will be reported in the year of payment, i.e. 2014). |
| (3) | The 2014; 2013 and 2012 values have been converted using an average exchange rates of R9.6231:$1 (2012: R8.1961: $1; 2011: R7.2569: $1). |
| (4) | Includes awards granted in respect of the 20% top-up for the 2009 BSP awards. |
| (5) | Received a cash payment in lieu of the 2010 BSP top-up due to US tax restrictions. |
| (6) | No longer an executive director with effect from 31 March 2013. |
| (7) | No longer an executive director with effect from 2 August 2013. |
| (8) | No longer a prescribed officer with effect from 31 March 2012. |
| (9) | No longer a prescribed officer with effect from 31 August 2011. |
Non-Executive Director remuneration
The accompanying notes are an integral parttable below details the fees and allowances paid to Non-Executive Directors:
Non-Executive Directors’ fees and allowances
| Figures in thousands(1) | Director fees | Committee fees | Travel allowance | Total | Total | Total | ||||||||||||||||||
| US Dollars | 2013 | 2012 | 2011 | |||||||||||||||||||||
SM Pityana (chairman) | 88 | 98 | - | 186 | 175 | 137 | ||||||||||||||||||
TT Mboweni | 292 | 52 | - | 344 | 357 | 302 | ||||||||||||||||||
TJ Motlatsi (retired 17 February 2011) (2) | - | - | - | - | - | 36 | ||||||||||||||||||
FB Arisman | 60 | 51 | 9 | 120 | 251 | 258 | ||||||||||||||||||
R Gasant | 72 | 59 | - | 131 | 118 | 102 | ||||||||||||||||||
NP January-Bardill | 70 | 70 | - | 140 | 146 | 17 | ||||||||||||||||||
MJ Kirkwood | 107 | 112 | 47 | 266 | 94 | - | ||||||||||||||||||
WA Nairn | 39 | 32 | - | 71 | 178 | 146 | ||||||||||||||||||
LW Nkuhlu | 72 | 112 | - | 184 | 178 | 135 | ||||||||||||||||||
F Ohene-Kena | 25 | 13 | 16 | 54 | 118 | 111 | ||||||||||||||||||
RJ Ruston | 83 | 121 | 47 | 251 | 189 | - | ||||||||||||||||||
Total(2) | 908 | 720 | 119 | 1,747 | 1,804 | 1,244 | ||||||||||||||||||
| (1) | Directors’ compensation is disclosed in US dollars, the amounts reflected are the values calculated using the exchange rate of R9.6231:$1 (2012: R8.1961: $1; 2011: 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 13 May 2013, shareholders approved an increase in directors’ fees with effect from 1 June 2013. 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 the Chairman or a member of the committee. |
Non-Executive Directors do not hold service contracts with the company. Executive Directors do not receive payment of these Consolidated Financial Statements.
F-95
F - 86
| 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 | ||||||||||||||
F-96
Figures in million | 2013 | 2012 | 2011 | |||||||||
| US Dollars | ||||||||||||
| 36 CONTRACTUAL COMMITMENTS AND CONTINGENCIES | ||||||||||||
Operating leases | ||||||||||||
At 31 December 2013, the group was committed to making the following payments in respect of operating leases for, amongst others, the hire of plant and equipment and land and buildings. Certain contracts contain renewal options and escalation clauses for various periods of time. | ||||||||||||
Expiry: | ||||||||||||
- within one year | 18 | 22 | 23 | |||||||||
- between one and two years | 8 | 3 | 1 | |||||||||
- between two and five years | 6 | 4 | 1 | |||||||||
- after five years | 3 | 3 | - | |||||||||
| 35 | 32 | 25 | ||||||||||
Finance leases |
The group has finance leases for plant and equipment and buildings. The leases for plant and equipment and buildings have terms of renewal but no purchase options. Future minimum lease payments under finance lease contracts together with the present value of the net minimum lease payments are as follows: |
Minimum payments | Present value of payments | Minimum payments | Present value of payments | Minimum payments | Present value of payments | |||||||||||||||||||
US Dollars million | 2013 | 2012 | 2011 | |||||||||||||||||||||
Within one year | 10 | 7 | 20 | 15 | 20 | 14 | ||||||||||||||||||
After one year but not more than five years | 29 | 20 | 44 | 32 | 50 | 35 | ||||||||||||||||||
More than five years | 21 | 19 | 32 | 26 | 35 | 27 | ||||||||||||||||||
Total minimum lease payments | 60 | 46 | 96 | 73 | 105 | 76 | ||||||||||||||||||
Amounts representing finance charges | (14 | ) | - | (23 | ) | - | (29 | ) | - | |||||||||||||||
Present value of minimum lease payments | 46 | 46 | 73 | 73 | 76 | 76 | ||||||||||||||||||
Figures in million | 2013 | 2012 | 2011 | |||||||||||||||||||||
| US Dollars | ||||||||||||||||||||||||
Capital commitments | ||||||||||||||||||||||||
Acquisition of tangible assets | ||||||||||||||||||||||||
Contracted for | 437 | 1,075 | 202 | |||||||||||||||||||||
Not contracted for | 1,073 | 2,242 | 1,128 | |||||||||||||||||||||
Authorised by the directors | 1,510 | 3,317 | 1,330 | |||||||||||||||||||||
Allocated to: | ||||||||||||||||||||||||
Project capital | ||||||||||||||||||||||||
-within one year | 431 | 1,092 | 832 | |||||||||||||||||||||
-thereafter | 714 | 1,708 | 46 | |||||||||||||||||||||
| 1,145 | 2,800 | 878 | ||||||||||||||||||||||
Stay-in-business capital | ||||||||||||||||||||||||
-within one year | 365 | 517 | 421 | |||||||||||||||||||||
-thereafter | - | - | 31 | |||||||||||||||||||||
| 365 | 517 | 452 | ||||||||||||||||||||||
Share of underlying capital commitments of joint ventures included above |
| 185 | 749 | 14 | ||||||||||||||||||||
Purchase obligations | ||||||||||||||||||||||||
Contracted for | ||||||||||||||||||||||||
-within one year | 610 | 643 | 334 | |||||||||||||||||||||
-thereafter | 136 | 102 | 129 | |||||||||||||||||||||
| 746 | 745 | 463 | ||||||||||||||||||||||
F - 87
| 36 | CONTRACTUAL COMMITMENTS AND CONTINGENCIES (continued) |
Purchase obligations (continued)
Purchase obligations represent contractual obligations for the purchase of mining contract services, power, supplies, consumables, inventories, explosives and activated carbon.
To service these capital commitments, purchase obligations and other operational requirements, the group is dependent on existing cash resources, cash generated from operations and borrowing facilities.
Cash generated from operations is subject to operational, market and other risks. Distributions from operations may be subject to foreign investment, exchange control laws and regulations, and the quantity of foreign exchange available in offshore countries. In 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 notescredit facilities and other finance arrangements contain financial covenants and other similar undertakings. To the extent that external borrowings are an integral partrequired, the group’s covenant performance indicates that existing financing facilities will be available to meet the commitments detailed above. To the extent that any of the financing facilities mature in the near future, the group believes that sufficient measures are in place to ensure that these Consolidated Financial Statements.
F-97Contingencies
| Guarantees and contingencies | Liabilities included in the statement of financial position | Guarantees and contingencies | Liabilities included in the statement of financial position | Guarantees and contingencies | Liabilities included in the statement of financial position | |||||||||||||||||||
US Dollars million | 2013 | 2012 | 2011 | |||||||||||||||||||||
Contingent liabilities | ||||||||||||||||||||||||
Groundwater pollution(1) | - | - | - | - | - | - | ||||||||||||||||||
Deep groundwater pollution - Africa(2) | - | - | - | - | - | - | ||||||||||||||||||
Indirect taxes - Ghana(3) | 28 | - | 23 | - | 12 | - | ||||||||||||||||||
Litigation - Ghana(4)(5)(6) | 97 | - | - | - | - | - | ||||||||||||||||||
Occupational Diseases in Mines and Works Act (ODMWA) litigation (7) | 211 | - | - | - | - | - | ||||||||||||||||||
Other tax disputes - AngloGold Ashanti Brasil Mineração Ltda(8) | 38 | - | 38 | - | 29 | - | ||||||||||||||||||
Sales tax on gold deliveries - Mineração Serra Grande S.A.(9) | 101 | - | 156 | - | 88 | - | ||||||||||||||||||
Other tax disputes - Mineração Serra Grande S.A.(10) | 16 | - | 19 | - | 9 | - | ||||||||||||||||||
Tax dispute - AngloGold Ashanti Colombia S.A.(11) | 188 | - | 161 | - | - | - | ||||||||||||||||||
Tax dispute - Cerro Vanguardia S.A.(12) | 63 | - | - | - | - | - | ||||||||||||||||||
Contingent assets | ||||||||||||||||||||||||
Indemnity - Kinross Gold Corporation(13) | (60 | ) | (90 | ) | - | |||||||||||||||||||
Royalty - Tau Lekoa Gold Mine(14) | - | - | - | |||||||||||||||||||||
Guarantees | ||||||||||||||||||||||||
Financial guarantees | ||||||||||||||||||||||||
Oro Group (Pty) Limited(15) | 10 | - | 12 | - | 12 | - | ||||||||||||||||||
Hedging guarantees | ||||||||||||||||||||||||
AngloGold South America(16) | - | - | - | - | - | - | ||||||||||||||||||
AngloGold USA Trading Company(16) | - | - | - | - | - | - | ||||||||||||||||||
Cerro Vanguardia S.A.(16) | - | - | - | - | - | - | ||||||||||||||||||
| 692 |
| - |
| 319 | - | 150 | - | |||||||||||||||||
F - 88
| 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 | |||||||||||||||
F-98
| 36 | CONTRACTUAL COMMITMENTS AND CONTINGENCIES (continued) |
Contingent liabilities |
| (1) | Groundwater pollution - AngloGold Ashanti Limited has identified groundwater contamination plumes at certain of its operations, which have occurred primarily as a result of seepage. Numerous scientific, technical and legal studies have been undertaken to assist in determining the magnitude of the contamination and to find sustainable remediation solutions. The group has instituted processes to reduce future potential seepage and it has been demonstrated that Monitored Natural Attenuation (MNA) by the existing environment will contribute to improvements in some instances. Furthermore, literature reviews, field trials and base line modelling techniques suggest, but 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 reliable estimate can be made for the obligation. |
| (2) | Deep groundwater pollution - The group has identified a flooding and future pollution risk posed by deep groundwater in certain underground mines in Africa. Various studies have been undertaken by AngloGold Ashanti 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 now involved in the development of a “Regional Mine Closure Strategy”. In view of the limitation of current information for the accurate estimation of a liability, no reliable estimate can be made for the obligation. |
| (3) | Indirect taxes - AngloGold Ashanti (Ghana) Limited (AGAG) received a tax assessment for the 2006 to 2008 and for the 2009 to 2011 tax years following audits by the tax authorities which related to various indirect taxes amounting to $28m (2012: $23m; 2011: $12m). Management is of the opinion that the indirect taxes were not properly assessed and the company has lodged an objection. |
| (4) | Litigation - On 11 October 2011, AGAG terminated its commercial arrangements with Mining and Building Contractors Limited (MBC) relating to certain underground development, construction on bulkheads and diamond drilling services provided by MBC in respect of the Obuasi mine. On 8 November 2012, as a result of this termination, AGAG and MBC concluded a separation agreement that specified the terms on which the parties agreed to sever their commercial relationship. On 23 July 2013, MBC commenced proceedings against AGAG in the High Court of Justice (Commercial Division) in Accra, Ghana, and served a writ of summons that claimed a total of approximately $97m in damages. MBC asserts various claims for damages, including, among others, as a result of the breach of contract, non-payment of outstanding historical indebtedness by AGAG and the demobilisation of equipment, spare parts and material acquired by MBC for the benefit of AGAG in connection with operations at the Obuasi mine in Ghana. MBC has also asserted various labour claims on behalf of itself and certain of its former contractors and employees at the Obuasi mine. On 9 October 2013, AGAG filed a motion in court to refer the action or a part thereof to arbitration. This motion was set to be heard on 25 October 2013, however, on 24 October 2013, MBC filed a motion to discontinue the action with liberty to reapply. On 20 February 2014, AGAG was served with a new writ for approximately $97m, as previously claimed. AGAG filed its appearance to defend on 28 February 2014. |
| (5) | Litigation – AGAG received a summons on 2 April 2013 from Abdul Waliyu and 152 others in which the plaintiffs allege that they were or are residents of the Obuasi municipality or its suburbs and that their health has been adversely affected by emission and/or other environmental impacts arising in connection with the current and/or historical operations of the Pompora Treatment Plant (PTP) which was decommissioned in 2000. The claim is to award general damages, special damages for medical treatment and punitive damages, as well as several orders relating to the operation of the PTP. The plaintiffs subsequently amended their writ to include their respective addresses. AGA filed a defence to the amended writ on 16 July 2013 and are awaiting the plaintiffs to apply for directions. In view of the limitation of current information for the accurate estimation of a liability, no reliable estimate can be made for the obligation. |
| (6) | Litigation – five executive members of the PTP (AGA) Smoke Effect Association (PASEA) sued AGAG on 24 February 2014 in their personal capacity and on behalf of the members of PASEA. The plaintiffs claim that they were residents of Tutuka, Sampsonkrom, Anyimadukrom, Kortkortesua, Abomperkrom, and PTP Residential Quarters, all suburbs of Obuasi, in close proximity to the now decommissioned Pompara Treatment Plant (PTP). The plaintiffs claim they have been adversely affected by the operations of the PTP. |
| (7) | Occupational Diseases in Mines and Works Act (ODMWA) litigation – On 3 March 2011, in Mankayi vs. AngloGold Ashanti, the Constitutional Court of South Africa held that section 35(1) of the Compensation for Occupational Injuries and Diseases Act, 1993 does not cover an “employee” who qualifies for compensation in respect of “compensable diseases” under the Occupational Diseases in Mines and Works Act, 1973 (ODMWA). This judgement allows such qualifying employee to pursue a civil claim for damages against the employer. Following the Constitutional Court decision, AngloGold Ashanti has become subject to numerous claims relating to silicosis and other Occupational Lung Diseases (OLD), including several potential class actions and individual claims. |
For example, on or about 21 August 2012, AngloGold Ashanti was served with an application instituted by Bangumzi Bennet Balakazi (“the Balakazi Action”) and others in which the applicants seek an order declaring that all mine workers (former or current) who previously worked or continue to work in specified South African gold mines for the period owned by AngloGold Ashanti and who have silicosis or other OLD constitute members of a class for the purpose of proceedings for declaratory relief and claims for damages. In the event the class is certified, such class of workers would be permitted to institute actions by way of a summons against AngloGold Ashanti for amounts as yet unspecified. On 4 September, 2012, AngloGold Ashanti delivered its notice of intention to defend this application. AngloGold Ashanti also delivered a formal request for additional information that it requires to prepare its affidavits in respect to the allegations and the request for certification of a class. |
F - 89
| 36 | CONTRACTUAL COMMITMENTS AND CONTINGENCIES (continued) |
Contingent liabilities (continued)
| 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 | |||||||||||||||
F-99
In addition, on or about 8 January 2013, AngloGold Ashanti and its subsidiary Free State Consolidated Gold Mines (Operations) Limited, alongside other mining companies operating in South Africa, were served with another application to certify a class (“the Nkala Action”). The applicants in the case seek to have the court certify two classes namely: (i) current and former mineworkers who have silicosis (whether or not accompanied by any other disease) and who work or have worked on certain specified gold mines at any time from 1 January 1965 to date; and (ii) the dependants of mineworkers who died as a result of silicosis (whether or not accompanied by any other disease) and who worked on these gold mines at any time after 1 January 1965. AngloGold Ashanti filed a notice of intention to oppose the application. |
On 21 August 2013, an application was served on AngloGold Ashanti, for the consolidation of the Balakazi Action and the Nkala Action, as well as a request for an amendment to change the scope of the classes the court was requested to certify in the previous applications that were brought. The applicants now request certification of two classes (the “silicosis class” and the “tuberculosis class”). The silicosis class which the applicants now request the court to certify would consist of certain current and former mineworkers who have contracted silicosis, and the dependants of certain deceased mineworkers who have died of silicosis (whether or not accompanied by any other disease). The tuberculosis class would consist of certain current and former mineworkers who have or had contracted pulmonary tuberculosis and the dependants of certain deceased mineworkers who died of pulmonary tuberculosis (but excluding silico-tuberculosis). AngloGold Ashanti will defend the request for certification of these classes in 2014. |
In October 2012, AngloGold Ashanti received a further 31 individual summonses and particulars of claim relating to silicosis and/or other OLD. The total amount claimed in the 31 summonses is approximately $7 million. On 22 October 2012, AngloGold Ashanti filed a notice of intention to oppose these claims and took legal exception to the summonses on the ground that certain particulars of claim were unclear. On 4 April 2014, the High Court of South Africa dismissed these exceptions. AngloGold Ashanti intends to continue to defend these cases on their merits. |
On or about 3 March 2014, AngloGold Ashanti received an additional 21 individual summonses and particulars of claim relating to silicosis and/or other OLD. The total amount claimed in the 21 summonses is approximately $4.5 million. AngloGold Ashanti has filed a notice of intention to oppose these claims. |
On or about 24 March 2014, AngloGold Ashanti received a further 686 individual summonses and particulars of claim relating to silicosis and/or other OLD. The total amount claimed in the 686 summonses is approximately $109 million. AngloGold Ashanti has filed a notice of intention to oppose these claims. |
On or about 1 April 2014, AngloGold Ashanti received a further 518 individual summonses and particulars of claim relating to silicosis and/or other OLD. The total amount claimed in the 518 summonses is approximately $90 million. AngloGold Ashanti has filed a notice of intention to oppose these claims. |
It is possible that additional class actions and/or individual claims relating to silicosis and/or other OLD will be filed against AngloGold Ashanti in the future. AngloGold Ashanti will defend all current and subsequently filed claims on their merits. Should AngloGold Ashanti be unsuccessful in defending any such claims, or in otherwise favourably resolving perceived deficiencies in the national occupational disease compensation framework that were identified in the earlier decision by the Constitutional Court, such matters would have an adverse effect on its financial position, which could be material. The company is unable to reasonably estimate its share of the amounts claimed. |
| (8) | Other tax disputes - In November 2007, the Departamento Nacional de Produção Mineral (DNPM), a Brazilian federal mining authority, issued a tax assessment against AngloGold Ashanti Brazil Mineração Ltda (AABM) in the amount of $19m (2012: $21m; 2011: $21m) relating to the calculation and payment by AABM of the financial contribution on mining exploitation (CFEM) in the period from 1991 to 2006. AngloGold Ashanti Limited’s subsidiaries in Brazil are involved in various other disputes with tax authorities. These disputes involve federal tax assessments including income tax, royalties, social contributions and annual property tax. The amount involved is approximately $19m (2012: $17m; 2011: $8m). Management is of the opinion that these taxes are not payable. |
| (9) | Sales tax on gold deliveries - In 2006, Mineração Serra Grande S.A. (MSG), received two tax assessments from the State of Goiás related to payments of state sales taxes at the rate of 12% on gold deliveries for export from one Brazilian state to another during the period from February 2004 to the end of May 2006. The first and second assessments are approximately $62m (2012: $96m; 2011: attributable share $54m) and $39m (2012: $60m; 2011: attributable share $34m) respectively. In November 2006, the administrative council’s second chamber ruled in favour of MSG and fully cancelled the tax liability related to the first period. In July 2011, the administrative council’s second chamber ruled in favour of MSG and fully cancelled the tax liability related to the second period. The State of Goiás has appealed to the full board of the State of Goiás tax administrative council. In November 2011 (first case) and June 2012 (second case), the administrative council’s full board approved the suspension of proceedings and the remittance of the matter to the Department of Supervision of Foreign Trade (COMEX) for review and verification. On 28 May 2013, the Full Board of the State of Goiás Tax Administrative Council ruled in favour of the State of Goiás, however reduced the penalties of the two tax assessments from 200% to 80%. The company is considering legal options available in this matter, since it believes that both assessments are in violation of federal legislation on sales taxes. MSG will be required to provide a bank guarantee to the tax authorities to proceed with legal discussion at the judiciary level. |
| (10) | Other tax disputes - MSG received a tax assessment in October 2003 from the State of Minas Gerais related to sales taxes on gold. The tax administrators rejected the company’s appeal against the assessment. The company is now appealing the dismissal of the case. The assessment is approximately $16m (2012: $19m; 2011: attributable share $9m). |
F - 90
| 36 | CONTRACTUAL COMMITMENTS AND CONTINGENCIES (continued) |
Contingent liabilities (continued)
| 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 | |||||||||||||||
F-100
| (11) | Tax dispute – AngloGold Ashanti Colombia S.A. (AGAC) received notice from the Colombian Tax Office (DIAN) that it disagreed with the company’s tax treatment of certain items in the 2011 and 2010 income tax returns. On 23 October 2013 AGAC received the official assessments from the DIAN which established that an estimated additional tax of $35m will be payable if the tax returns are amended. Penalties and interest for the additional taxes are expected to be $153m, based on Colombian tax law. The company believes that it has applied the tax legislation correctly. AGAC requested that DIAN reconsider its decision and the company has been officially notified that DIAN will review its earlier ruling. This review is anticipated to take twelve months, at the end of which AGAC may file suit if the ruling is not reversed. |
| (12) | Tax dispute - On 12 July 2013, Cerro Vanguardia S.A. received a notification from the Argentina Tax Authority requesting corrections to the 2007, 2008 and 2009 income tax returns of about $18m relating to the non-deduction of tax losses previously claimed on hedge contracts. Penalties and interest on the disputed amounts are estimated at a further $45m. Management is of the opinion that the taxes are not payable and is preparing a response. |
Contingent assets
| (13) | Indemnity - As part of the acquisition by AngloGold Ashanti Limited of the remaining 50% interest in MSG during June 2012, Kinross Gold Corporation (Kinross) has provided an indemnity to a maximum amount of BRL255m against the specific exposures discussed in items 8 and 9 above. At 31 December 2013, the company has estimated that the maximum contingent asset is $60m (2012: $90m; 2011: nil). |
| (14) | Royalty - As a result of the sale of the interest in the Tau Lekoa Gold Mine during 2010, the group is entitled to receive a royalty on the production of a total of 1.5Moz by the Tau Lekoa Gold Mine and in the event that the average monthly rand price of gold exceeds R180,000/kg (subject to an inflation adjustment). Where the average monthly rand price of gold does not exceed R180,000/kg (subject to an inflation adjustment), the ounces produced in that quarter do not count towards the total 1.5Moz upon which the royalty is payable. The royalty is determined at 3% of the net revenue (being gross revenue less state royalties) generated by the Tau Lekoa assets. Royalties on 413,246oz (2012: 304,643oz; 2011: 219,005oz) produced have been received to date. |
Guarantees
| (15) | Provision of surety - The company has provided surety in favour of a lender on a gold loan facility with its associate Oro Group (Pty) Limited and one of its subsidiaries to a maximum value of $10m (2012: $12m; 2011: $12m). The probability of the non-performance under the suretyships is considered minimal. The suretyship agreements have a termination notice period of 90 days. |
| (16) | The group has issued gold delivery guarantees to several counterparty banks in 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. As at 31 December 2013, 2012 and 2011, the group had no open gold hedge contracts. |
F - 91
FINANCIAL RISK MANAGEMENT ACTIVITIES |
In the normal course of its operations, the group is exposed to gold price, other commodity price, foreign exchange, interest rate, liquidity, equity price and credit risks. In order to manage these risks, the group may enter into transactions which make use of both on- and off-balance sheet derivatives. The group does not acquire, hold or issue derivatives for speculative purposes. The group has developed a comprehensive 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, counterparty limits and controlling and reporting structures.
Managing risk in the group
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 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 the group’s counterparties.
The financial risk management objectives of the group are defined as follows:
safeguarding the group’s core earnings stream from its major assets through the effective control and management of gold price risk, other commodity risk, foreign exchange risk and interest rate risk;
effective and efficient usage of credit facilities in both the short and long-term through the adoption of reliable liquidity management planning and procedures;
ensuring that investment and hedging transactions are undertaken with creditworthy counterparties; and
ensuring that all contracts and agreements related to risk management activities are co-ordinated, consistent throughout the group and that they comply where necessary with all relevant regulatory and statutory requirements.
Gold price and foreign exchange risk
Gold price risk arises from the risk of an adverse effect on current or future earnings resulting from fluctuations in the price of gold. The group has transactional foreign exchange exposures, which arise from sales or purchases by an operating unit in currencies other than the unit’s functional currency. The gold market is predominately priced in US dollars which exposes the group to the risk that fluctuations in the SA rand/US dollar, Brazilian real/US dollar, Argentinean peso/US dollar and Australian dollar/US dollar exchange rates may also have an adverse effect on current or future earnings. The group is also exposed to certain by-product commodity price risk.
Cash flow hedges
The group’s cash flow hedges consist of a foreign exchange forward contract that is used to protect against exposures to variability in future foreign exchange and capital expenditure cash flows. The amounts and timing of future cash flows are projected for each portfolio of financial assets and liabilities on the basis of their contractual terms and other relevant factors, including estimates of prepayments and defaults. The contractual cash flows across all portfolios over time form the basis for identifying gains and losses on the effective portions of derivatives designated as cash flow hedges of forecast transactions. Gains and losses are initially recognised directly in other comprehensive income and reclassified to earnings as an adjustment to depreciation expense pertaining to capital expenditure, when the forecast transactions affect the income statement.
The group does not have any cash flow hedge contracts relating to product sales as at 31 December 2013. Cash flow hedge losses pertaining to capital expenditure of $2m as at 31 December 2013 (2012: $3m; 2011: $3m) are expected to be reclassified from accumulated other comprehensive income and recognised as an adjustment to depreciation expense until 2022.
The gains and losses on ineffective portions of such derivatives are recognised in the income statement. During the years 31 December 2013, 2012 and 2011, no gains or losses were recognised on non-hedge derivatives and other commodity contracts in the income statement due to hedge ineffectiveness.
F - 92
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| Figures in million | 2013 | 2012 | 2011 | |||||||||
| US Dollars | ||||||||||||
37 FINANCIAL RISK MANAGEMENT ACTIVITIES (continued) | ||||||||||||
Non-hedge derivatives | ||||||||||||
Gain (loss) on non-hedge derivatives and other commodity contracts is summarised as follows: | ||||||||||||
Gain (loss) on unrealised non-hedge derivatives and other commodity contracts | 94 | (35) | (1) | |||||||||
Gain (loss) on non-hedge derivatives and other commodity contracts per the income statement | 94 | (35) | (1) | |||||||||
The gain (loss) on non-hedge derivatives and other commodity contracts was mainly as a result of normal revaluation of commodity contracts resulting from changes in the prevailing forward gold price, exchange rates, interest rates and volatilities.
Net open hedge position as at 31 December 2013
The group had no outstanding commitments against future production potentially settled in cash.
Interest rate and liquidity risk
Fluctuations in interest rates impact on the value of short-term cash investments and financing activities, giving rise to interest rate risk.
In the ordinary course of business, the group 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 minimising risks. The group is able to actively source financing at competitive rates. The counterparties are financial and banking institutions and their credit ratings are regularly monitored.
The group has sufficient undrawn borrowing facilities available to fund working capital requirements (notes 27 and 38).
The following are the contractual maturities of financial liabilities, including interest payments
Financial liabilities
| Within one year | Between one and two years | Between two and five years | After five years | Total | ||||||||||||||||||||||||||||||||||||||||
| 2013 | million | Effective rate % | million | Effective rate % | million | Effective rate % | million | Effective rate % | million | |||||||||||||||||||||||||||||||||||
Financial guarantees(1) | 10 | - | - | - | 10 | |||||||||||||||||||||||||||||||||||||||
Trade and other payables | 797 | - | - | - | 797 | |||||||||||||||||||||||||||||||||||||||
Borrowings | 440 | 727 | 704 | 3,868 | 5,739 | |||||||||||||||||||||||||||||||||||||||
- In USD | 266 | 6.7 | 206 | 6.8 | 614 | 6.8 | 3,849 | 6.8 | 4,935 | |||||||||||||||||||||||||||||||||||
- AUD in USD equivalent | 25 | 5.1 | 511 | 5.1 | - | - | 536 | |||||||||||||||||||||||||||||||||||||
- ZAR in USD equivalent | 127 | 7.1 | 9 | 7.7 | 89 | 8.3 | 18 | 9.8 | 243 | |||||||||||||||||||||||||||||||||||
- BRL in USD equivalent | 1 | 6.5 | 1 | 5.0 | 1 | 4.5 | 1 | 4.5 | 4 | |||||||||||||||||||||||||||||||||||
- ARS in USD equivalent | 21 | 22.7 | - | - | - | 21 | ||||||||||||||||||||||||||||||||||||||
2012 | ||||||||||||||||||||||||||||||||||||||||||||
Derivatives | - | - | - | 1 | 1 | |||||||||||||||||||||||||||||||||||||||
Financial guarantees(1) | 12 | - | - | - | 12 | |||||||||||||||||||||||||||||||||||||||
Trade and other payables | 949 | - | - | - | 949 | |||||||||||||||||||||||||||||||||||||||
Borrowings | 1,008 | 876 | 585 | 2,477 | 4,946 | |||||||||||||||||||||||||||||||||||||||
- In USD | 793 | 5.1 | 848 | 4.9 | 293 | 5.5 | 2,450 | 5.5 | 4,384 | |||||||||||||||||||||||||||||||||||
- AUD in USD equivalent | 13 | 5.1 | 13 | 5.1 | 273 | 5.1 | - | 299 | ||||||||||||||||||||||||||||||||||||
- ZAR in USD equivalent | 189 | 6.3 | 4 | 9.8 | 15 | 9.8 | 27 | 9.8 | 235 | |||||||||||||||||||||||||||||||||||
- BRL in USD equivalent | 3 | 8.0 | 1 | 7.5 | - | - | 4 | |||||||||||||||||||||||||||||||||||||
- NAD in USD equivalent | 10 | 8.4 | 10 | 8.4 | 4 | 8.4 | - | 24 | ||||||||||||||||||||||||||||||||||||
2011 | ||||||||||||||||||||||||||||||||||||||||||||
Derivatives | - | - | - | 1 | 1 | |||||||||||||||||||||||||||||||||||||||
Financial guarantees(1) | 12 | - | - | - | 12 | |||||||||||||||||||||||||||||||||||||||
Trade and other payables | 753 | - | - | - | 753 | |||||||||||||||||||||||||||||||||||||||
Borrowings | 152 | 928 | 949 | 1,625 | 3,654 | |||||||||||||||||||||||||||||||||||||||
- In USD | 136 | 5.2 | 911 | 5.1 | 921 | 5.5 | 1,590 | 5.7 | 3,558 | |||||||||||||||||||||||||||||||||||
- ZAR in USD equivalent | 4 | 9.8 | 4 | 9.8 | 14 | 9.8 | 35 | 9.8 | 57 | |||||||||||||||||||||||||||||||||||
- BRL in USD equivalent | 2 | 5.4 | 2 | 5.3 | 2 | 4.6 | - | 6 | ||||||||||||||||||||||||||||||||||||
- NAD in USD equivalent | 10 | 8.4 | 11 | 8.4 | 12 | 8.4 | - | 33 | ||||||||||||||||||||||||||||||||||||
Not included in the statement of financial position. |
F - 93
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 37 | FINANCIAL RISK MANAGEMENT ACTIVITIES (continued) |
Credit risk
Credit risk arises from the risk that a counterparty may default or not meet its obligations timeously. The group minimises credit risk by ensuring that credit risk is spread over a number of counterparties. These counterparties are financial and banking institutions. Counterparty credit limits and exposures are reviewed by the Audit and Corporate Governance Committee. Where possible, management ensures that netting agreements are in place. No set-off is applied to the statement of financial position due to the different maturity profiles of assets and liabilities.
The combined maximum credit risk exposure of the group is as follows:
Figures in million | 2013 | 2012 | 2011 | |||||||||||
| US Dollars | ||||||||||||||
Other investments | 83 | 96 | 95 | |||||||||||
Other non-current assets | - | 7 | 6 | |||||||||||
Trade and other receivables | 79 | 183 | 126 | |||||||||||
Cash restricted for use (note 23) | 77 | 64 | 58 | |||||||||||
Cash and cash equivalents (note 24) | 648 | 892 | 1,112 | |||||||||||
Total financial assets | 887 | 1,242 | 1,397 | |||||||||||
Financial guarantees | 10 | 12 | 12 | |||||||||||
Total | 897 | 1,254 | 1,409 | |||||||||||
In addition, the group has guaranteed the hedging commitments of several subsidiary companies as disclosed in note 36. The non-performance risk is insignificant.
Trade and other receivables that are past due but not impaired totalled $94m (2012: $84m; 2011: $30m). Other receivables that are impaired totalled nil (2012: $1m; 2011: $14m) and other investments that are impaired totalled $30m (2012: $16m; 2011: $21m). No other financial assets are past due but not impaired.
Trade receivables mainly comprise banking institutions purchasing gold bullion. Normal market settlement terms are two working days. No impairment was recognised as the principal receivables continue to be in a sound financial position.
The group does not generally obtain collateral or other security to support financial instruments subject to credit risk, but monitors the credit standing of counterparties.
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 value of the group’s financial instruments as at 31 December are as follows:
Type of instrument
| Figures in million | Carrying amount | Fair value | Carrying amount | Fair value | Carrying amount | Fair value | ||||||||||||||||||||
| US Dollars | 2013 | 2012 | 2011 | |||||||||||||||||||||||
Financial assets | ||||||||||||||||||||||||||
Other investments (note 19) | 132 | 134 | 167 | 171 | 186 | 180 | ||||||||||||||||||||
Other non-current assets | - | - | 7 | 7 | 6 | 6 | ||||||||||||||||||||
Trade and other receivables | 79 | 79 | 183 | 183 | 126 | 126 | ||||||||||||||||||||
Cash restricted for use (note 23) | 77 | 77 | 64 | 64 | 58 | 58 | ||||||||||||||||||||
Cash and cash equivalents (note 24) | 648 | 648 | 892 | 892 | 1,112 | 1,112 | ||||||||||||||||||||
Financial liabilities | ||||||||||||||||||||||||||
Borrowings (note 27) | 3,891 | 3,704 | 3,583 | 3,730 | 2,488 | 2,647 | ||||||||||||||||||||
Trade and other payables | 797 | 797 | 949 | 949 | 753 | 752 | ||||||||||||||||||||
Derivatives | - | - | 10 | 10 | 93 | 93 | ||||||||||||||||||||
The amounts in the table above do not necessarily agree with the totals in the notes as only financial assets and financial liabilities are shown.
F - 94
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 37 | FINANCIAL RISK MANAGEMENT ACTIVITIES (continued) |
Fair value of financial instruments (continued)
Type of instrument (continued)
The following methods and assumptions were used to estimate the fair value of each class of financial instrument:
Cash restricted for use and cash and cash equivalents
The carrying amounts approximate fair value because of the short-term duration of these instruments.
Trade and other receivables and trade and other payables
The carrying amounts approximate fair value because of the short-term duration of these instruments.
Investments and other non-current assets
Listed equity investments classified as available-for-sale are carried at fair value while fixed income investments and other non-current assets are carried at amortised cost. The fair value of fixed income investments and other non-current assets has been calculated using market interest rates. The unlisted equity investments are carried at cost or fair value. Unlisted investments for which fair value can be reliably measured are carried at fair value while other unlisted investments for which there is no active market and the fair value cannot be reliably measured are carried at cost.
Borrowings
The $1.25bn bonds and the mandatory convertible bonds settled in September 2013, are carried at fair value. The convertible bonds, with 99.1% aggregate principal amount thereof settled in August 2013 and in full in November 2013, and rated bonds are carried at amortised cost and their fair values are their closing market values at the reporting date. This is included in level 1 of the fair value hierarchy. The interest rate on the remaining borrowings is reset on a short-term floating rate basis, and accordingly the carrying amount is considered to approximate fair value.
Mandatory convertible bonds carried at fair value
In September 2010, the group issued mandatory convertible bonds at a coupon rate of 6% due in September 2013. The conversion of the mandatory convertible bonds into ADSs was subject to shareholder approval, which was granted in October 2010.
The mandatory convertible bonds contain certain embedded derivatives relating to change in control and anti-dilution protection provisions. The shareholders have authorised that the convertible bonds will be settled in equity and do 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 group has chosen to recognise the instrument, in its entirety, at fair value. Depending on the final calculated share price on the date of conversion, the liability recognised may differ from the principal amount.
In determining the fair value liability of the mandatory convertible bonds, the group 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 group is to recognise interest expense separately from the fair value adjustments in the income statement. Interest is recognised on the yield to maturity basis determined at the date of issue, which was 4.55%.
On 16 September, 2013, AngloGold Ashanti Holdings Finance plc paid and discharged the 6% mandatory convertible bonds (which matured on 15 September 2013) by delivering 18,140,000 American Depository Shares, or ADSs, which represent an equivalent number of shares of the group’s common stock, and the cash equivalent of 177,859 shares of AngloGold Ashanti Limited as determined in the manner set out in the indenture governing the mandatory convertible bonds.
The total fair value of the mandatory convertible bonds on 15 September 2010 (date of issue) amounted to $819m. A bond issue discount of $30m was recognised in special items in the income statement. 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 - 95
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 37 | FINANCIAL RISK MANAGEMENT ACTIVITIES (continued) |
Fair value of financial instruments (continued)
$1.25 billion bonds carried at fair value
On 30 July, 2013, the group issued $1.25bn aggregate principal amount of 8.5% notes (the $1.25bn bonds). The notes were issued by AngloGold Ashanti Holdings plc, a wholly owned subsidiary of the group, at an issue price of 100% of the principal amount of the notes. The net proceeds from the offering were $1.233bn, after deducting expenses. The notes are unsecured and fully and unconditionally guaranteed by AngloGold Ashanti Limited. There are no significant restrictions on the ability of AngloGold Ashanti Limited to obtain funds from its subsidiaries by dividend or loan.
These bonds contain certain embedded derivatives relating to early settlement provisions as described below. IFRS contains an election for the group to record the entire instrument at fair value as opposed to separating the embedded derivatives from the instrument.
The bonds mature on 30 July, 2020. However, at any time prior to 30 July, 2016, the group or AngloGold Ashanti Holdings plc may redeem the notes, in whole or in part, at a redemption price based on a ‘‘make whole’’ premium, plus accrued interest, if any, to the redemption date. At any time after 30 July, 2016, the group or AngloGold Ashanti Holdings plc may redeem the notes, in whole or in part, at the redemption prices set forth in the indenture. In addition, at any time prior to 30 July, 2016, the group or AngloGold Ashanti Holdings plc may redeem up to 35% of the original principal amount of the notes with the net proceeds from certain equity offerings by the group, at a price of 108.5% of the aggregate principal amount thereof, plus accrued interest, if any, to the redemption date, if at least 65% of the principal amount of the notes remains outstanding.
Upon the occurrence of both a change of control of the group and certain ratings downgrade, within a specified period, of the notes by each of Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services, AngloGold Ashanti Holdings plc will be required to make an offer to purchase the notes at a price equal to 101 percent of its principal amount plus accrued interest, if any, to the date of repurchase. The notes were issued in denominations of $1,000 and integral multiples of $1,000 in excess thereof.
In determining the fair value liability of the $1.25 billion bonds, the group has measured the effect based on the ex interest NYSE closing price on the reporting date. The ISIN bond code used by the NYSE for the $1.25bn bonds is US03512TAD37. The accounting policy of the group is to recognise interest expense separately from the fair value adjustments in the income statement. Interest is recognised at a semi-annual coupon rate of 8.5% per annum.
Derivatives
The fair value of derivatives is estimated based on ruling market prices, volatilities, interest rates and credit risk as at 31 December 2013 and includes all derivatives carried in the statement of financial position.
Embedded derivatives and the conversion features of convertible bonds are included as derivatives on the statement of financial position.
The following inputs were used in the valuation of the conversion features of convertible bonds which were settled in full during 2013:
| 2013 | 2012 | 2011 | ||||||||||
Market quoted bond price (percent) | - | 103.9 | 111.5 | |||||||||
Fair value of bonds excluding conversion feature (percent) | - | 102.6 | 98.9 | |||||||||
Fair value of conversion feature (percent) | - | 1.3 | 12.6 | |||||||||
Total issued bond value ($ million) | - | 732.5 | 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).
F - 96
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 37 | FINANCIAL RISK MANAGEMENT ACTIVITIES (continued) |
Fair value of financial instruments (continued)
Derivative assets (liabilities) comprise the following:
| Figures in million | Assets non- hedge accounted | Liabilities non- hedge accounted | Assets non- hedge accounted | Liabilities non- hedge accounted | Assets non- hedge accounted | Liabilities non- hedge accounted | ||||||||||||||||||
| US Dollars | 2013 | 2012 | 2011 | |||||||||||||||||||||
Embedded derivatives | - | - | - | (1 | ) | - | (1 | ) | ||||||||||||||||
Option component of convertible bonds | - | - | - | (9 | ) | - | (92 | ) | ||||||||||||||||
Total derivatives | - | - | - | (10 | ) | - | (93 | ) | ||||||||||||||||
The group uses the following hierarchy for determining and disclosing the fair value of financial instruments:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The following table sets out the group’s financial assets and liabilities measured at fair value by level within the fair value hierarchy as at 31 December:
Type of instrument
Assets measured at fair value on a recurring basis
| Figures in millions | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| US Dollars | 2013 | |||||||||||||||
Available-for-sale financial assets | ||||||||||||||||
Equity securities | 49 | - | - | 49 | ||||||||||||
| US Dollars | 2012 | |||||||||||||||
Available-for-sale financial assets | ||||||||||||||||
Equity securities | 69 | 2 | - | 71 | ||||||||||||
| US Dollars | 2011 | |||||||||||||||
Available-for-sale financial assets | ||||||||||||||||
Equity securities | 82 | - | - | 82 | ||||||||||||
| Liabilities measured at fair value on a recurring basis | ||||||||||||||||
| Figures in millions | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| US Dollars | 2013 | |||||||||||||||
Financial liabilities at fair value through profit or loss | ||||||||||||||||
$1.25bn bonds | 1,353 | - | - | 1,353 | ||||||||||||
| US Dollars | 2012 | |||||||||||||||
Financial liabilities at fair value through profit or loss | ||||||||||||||||
Option component of convertible bonds | - | 9 | - | 9 | ||||||||||||
Embedded derivatives | - | 1 | - | 1 | ||||||||||||
Mandatory convertible bonds | 588 | - | - | 588 | ||||||||||||
| US Dollars | 2011 | |||||||||||||||
Financial liabilities at fair value through profit or loss | ||||||||||||||||
Option component of convertible bonds | - | 92 | - | 92 | ||||||||||||
Embedded derivatives | - | 1 | - | 1 | ||||||||||||
Mandatory convertible bonds | 760 | - | - | 760 | ||||||||||||
F - 97
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 37 | FINANCIAL RISK MANAGEMENT ACTIVITIES (continued) |
Fair value of financial instruments (continued)
Type of instrument (continued)
Sensitivity analysis
Derivatives
The group monitors the sensitivity of the convertible bonds (which were settled in full during 2013) to changes in the AngloGold Ashanti Limited’s share price which is disclosed in the table below.
| Change in underlying factor | Change infair value | Change in underlying factor | Change infair value | Change in underlying factor | Change value | |||||||||||||||||||||
US Dollars million | 2013 | 2012 | 2011 | |||||||||||||||||||||||
Convertible bonds | ||||||||||||||||||||||||||
AngloGold Ashanti Limited share price (US$) | Spot (+$5) | - | Spot (+$5) | (14) | Spot (+$3) | (23) | ||||||||||||||||||||
AngloGold Ashanti Limited share price (US$) | Spot (-$5) | - | Spot (-$5) | 7 | Spot (-$3) | 21 | ||||||||||||||||||||
$1.25bn bonds
The $1.25bn bonds valuation is primarily linked to market interest. A change of +0.5% and -0.5% in market interest rates will generally impact the fair value of the $1.25bn liability in a stable environment by -$28m and +$29m respectively.
Interest rate risk on other financial assets and liabilities (excluding derivatives)
The group also monitors interest rate risk on other financial assets and liabilities. The following table shows the approximate interest rate sensitivities of other financial assets and liabilities at 31 December 2013 (actual changes in the timing and amount of the following variables may differ from the assumed changes below). As the sensitivity is the same (linear) for both increases and decreases in interest rates only absolute numbers are presented.
Change in interest % | Change in interest in currency million | Change in interest US dollars million | ||||||||||||
| 2013 | ||||||||||||||
| Financial assets | ||||||||||||||
USD denominated | 1.00 | 4 | 4 | |||||||||||
ZAR denominated(3) | 1.50 | 3 | - | |||||||||||
BRL denominated | 2.50 | 1 | - | |||||||||||
| Financial liabilities | ||||||||||||||
ZAR denominated(3) | 1.50 | 20 | 2 | |||||||||||
AUD denominated | 1.00 | 5 | 5 | |||||||||||
ARS denominated | 2.00 | 3 | - | |||||||||||
Change in interest % | Change in interest in currency million | Change in interest US dollars million | ||||||||||||
| 2012 | ||||||||||||||
| Financial assets | ||||||||||||||
USD denominated | 1.00 | 6 | 6 | |||||||||||
ZAR denominated(3) | 1.50 | 3 | - | |||||||||||
BRL denominated | 2.50 | 1 | - | |||||||||||
NAD denominated | 1.50 | - | - | |||||||||||
| Financial liabilities | ||||||||||||||
AUD denominated | 1.00 | 3 | 3 | |||||||||||
F - 98
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 37 | FINANCIAL RISK MANAGEMENT ACTIVITIES (continued) |
Sensitivity analysis (continued) | |||
Change in interest % | Change in interest in currency million | Change in interest US dollars million | ||||||||||||
| 2011 | ||||||||||||||
Financial assets | ||||||||||||||
USD denominated | 1.00 | 5 | 5 | |||||||||||
ZAR denominated(3) | 1.50 | 2 | - | |||||||||||
BRL denominated | 2.50 | 1 | 1 | |||||||||||
NAD denominated | 1.50 | 2 | - | |||||||||||
Financial liabilities | ||||||||||||||
AUD denominated | 1.00 | - | - | |||||||||||
This is the only interest rate risk for the company. |
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 borrowings at 31 December 2013 (actual changes in the timing and amount of the following variables may differ from the assumed changes below).
| Change in exchange rate | Change in borrowings total | Change in exchange rate | Change in borrowings total | Change in exchange rate | Change in borrowings total | |||||||||||
| 2013 | 2012 | 2011 | ||||||||||||||
Borrowings | ||||||||||||||||
USD denominated (R/$) | Spot (+R1.50) | - | Spot (+R1) | - | Spot (+R1) | - | ||||||||||
ZAR denominated (R/$) | Spot (+R1.50) | (27 | ) | Spot (+R1) | (22) | Spot (+R1) | (4) | |||||||||
BRL denominated (BRL/$) | Spot (+BRL0.30) | - | Spot (+BRL0.25) | - | Spot (+BRL0.25) | (1) | ||||||||||
NAD denominated (N/$) | Spot (+NAD1.50) | - | Spot (+NAD1) | (2) | Spot (+NAD1) | (3) | ||||||||||
AUD denominated (AUD/$) | Spot (+AUD0.1) | (40 | ) | Spot (+AUD0.05) | (13) | Spot (+AUD0.05) | - | |||||||||
ARS denominated (ARS/$) | Spot (+ARS0.5) | (1 | ) | Spot (+ARS0.05) | - | Spot (+ARS0.05) | - | |||||||||
USD denominated (R/$) | Spot (-R1.5) | - | Spot (-R1) | - | Spot (-R1) | - | ||||||||||
ZAR denominated (R/$) | Spot (-R1.5) | 36 | Spot (-R1) | 28 | Spot (-R1) | 5 | ||||||||||
BRL denominated (BRL/$) | Spot (-BRL0.3) | - | Spot (-BRL0.25) | 1 | Spot (-BRL0.25) | 1 | ||||||||||
NAD denominated (N/$) | Spot (-NAD1.5) | - | Spot (-NAD1) | 3 | Spot (-NAD1) | 4 | ||||||||||
AUD denominated (AUD/$) | Spot (-AUD0.1) | 48 | Spot (-AUD0.05) | 14 | Spot (-AUD0.05) | - | ||||||||||
ARS denominated (ARS/$) | Spot (-ARS0.5) | 2 | Spot (-ARS0.05) | - | Spot (-ARS0.05) | - | ||||||||||
The borrowings total in the denominated currency will not be influenced by a movement in its exchange rate.
F - 99
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 38 | CAPITAL MANAGEMENT |
The primary objective of managing the group’s capital is to ensure that there is sufficient capital available to support the funding requirements of the group, including capital expenditure, in a way that optimises the cost of capital, maximises shareholders’ returns and ensures that the group remains in a sound financial position.
The group manages and makes adjustments to the capital structure as opportunities arise in the market place, as and when borrowings mature or as and when funding is required. This may take the form of raising equity, market or bank debt or hybrids thereof.
Save from the issue of shares to settle the 6% Mandatory Convertible Bonds in September 2013, the group had no major issuance of equity during the year.
During April 2011 AngloGold Ashanti Limited registered a R10bn Domestic Medium Term Note Programmeme (DMTNP) with the JSE. The DMTNP permits the group to access the South African debt capital market for funding required. The group has utilised the commercial paper under its R10bn DMTNP throughout the year, to provide for funding requirements of the South Africa region.
During December 2011, the group entered into a four-year unsecured syndicated revolving credit facility of A$600m ($535m) with a group of banks which is currently charged at 260 basis points above BBSY. The interest margin will reduce should the group’s credit rating improve from its current BB+/Baa3 status and increase should its credit rating worsen. This facility will be used to fund the working capital and development costs associated with the group’s mining operations within Australia without eroding the group’s headroom under its other facilities and exposing the group to foreign exchange gains/losses each quarter. The facility matures in December 2015.
During July 2012, the group completed the following key financing transactions:
a $1bn five-year revolving credit facility with a syndicate of lenders which replaced its existing $1bn syndicated facility maturing in April 2014. Amounts may be repaid and reborrowed under the facility during its five-year term and the facility bears interest at LIBOR plus 1.5%; and
an offering of $750m aggregate principal amount, unsecured notes due 2022 at 5.125%. The notes were issued at a price of 99.398%. The notes are fully and unconditionally guaranteed by the group.
During February 2013, the group entered into a syndicated bridge loan facility agreement (standby facility) pursuant to which a syndicate of banks agreed to make available $750 million to the group. The group guaranteed all payments and other obligations under the facility. The facility was cancelled during August 2013.
During July 2013, the group completed the following financing transactions:
$1.25 billion aggregate principal amount of 8.5% notes were issued at an issue price of 100% of the principal amount of the notes. The notes are unsecured and fully and unconditionally guaranteed by the group. There are no significant restrictions on the ability of the group to obtain funds from its subsidiaries by dividend or loan. The net proceeds from the offering of the notes were used for general corporate purposes, which included the repurchase of the 3.5% convertible bonds and the repayment of other indebtedness.
the commencement of a cash tender offer to purchase any and all of the outstanding $732.5 million 3.5% convertible bonds due May 2014 of the group at a purchase price of $1,015 for each $1,000 principal amount of bonds validly tendered. The offer expired on 21 August 2013 and AngloGold Ashanti Holdings plc purchased $725.9 million in aggregate principal amount of the bonds, representing 99.1% of the total issuance. During November 2013, the group completed the redemption of all of its outstanding convertible bonds for $6.6 million, plus accrued, and unpaid interest.
During September 2013, the group paid and discharged the 6% mandatory convertible bonds (which matured on 15 September 2013) by delivering 18,140,000 American Depository Shares, or ADSs, which represent an equivalent number of shares of the group’s common stock, and the cash equivalent of 177,859 shares of AngloGold Ashanti Limited as determined in the manner set out in the indenture governing the mandatory convertible bonds.
F - 100
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 38 | CAPITAL MANAGEMENT (continued) |
During December 2013:
the group entered into a five-year unsecured syndicated revolving credit facility (ZAR RCF) of R1.5bn ($144m) with Nedbank and ABSA Bank which is currently charged at JIBAR plus 1.2% per annum. This facility will be used to fund the working capital and development costs associated with the group’s mining operations within South Africa without eroding the group’s headroom under its other facilities and exposing the group to foreign exchange gains/losses each quarter. The facility matures in December 2018; and
an offering of R750m ($72m) aggregate principal amount, unsecured notes due 2016 at JIBAR plus 1.75%.
The objective of the ZAR RCF in conjunction with the issue of R750m ($72m) bonds was to provide a more permanent and reliable source of funds for the South African region as a result of the risk that the market will not always be available to roll or reissue paper upon future maturities.
Amounts are converted to US dollars at year end exchange rates.
Gearing ratio (Net debt to EBITDA)
Figures in million | 2013 | 2012 | 2011 | |||||||||
| US Dollars | ||||||||||||
Net debt | ||||||||||||
Borrowings (note 27) | 3,891 | 3,583 | 2,488 | |||||||||
Mandatory convertible bonds (note 27)(1) | - | (588) | (760) | |||||||||
Corporate office lease (note 27) | (25) | (31) | (33) | |||||||||
Unamortised portion of the convertible and rated bonds | 2 | 53 | 85 | |||||||||
Fair value adjustment on $1.25bn bonds | (58) | - | - | |||||||||
Cash restricted for use (note 23) | (77) | (64) | (58) | |||||||||
Cash and cash equivalents (note 24) | (648) | (892) | (1,112) | |||||||||
Bank overdraft | 20 | - | - | |||||||||
Net debt | 3,105 | 2,061 | 610 | |||||||||
(1) For the purposes of this note, the mandatory convertible bonds are treated as equity and excluded from borrowings in line with the banking agreement. The mandatory convertible bonds matured on 15 September 2013. | ||||||||||||
EBITDA | ||||||||||||
Operating (loss) profit | (2,440) | 1,219 | 2,252 | |||||||||
Retrenchment costs (note 4) | 69 | 10 | 15 | |||||||||
Amortisation of tangible assets (note 4) | 775 | 830 | 825 | |||||||||
Amortisation of intangible assets (note 4) | 24 | 5 | 2 | |||||||||
Impairment (reversal) and derecognition of goodwill, tangible and intangible assets (note 7) | 3,029 | 346 | (120) | |||||||||
Impairment of other investments (note 7) | 30 | 16 | 21 | |||||||||
Net (profit) loss on disposal and derecognition of assets (note 7) | (2) | 15 | 8 | |||||||||
(Gain) loss on unrealised non-hedge derivatives and other commodity contracts | (94) | 35 | 1 | |||||||||
Write-down of stockpiles and heap leach to net realisable value and other stockpile adjustments (note 7) | 216 | - | - | |||||||||
Write-off of a loan (note 7) | 7 | - | - | |||||||||
Share of equity-accounted associates and joint ventures’ EBITDA | 53 | 67 | 135 | |||||||||
Profit on partial disposal of Rand Refinery Limited (note 7) | - | (14) | - | |||||||||
Profit on disposal of subsidiary ISS International Limited (note 7) | - | - | (2) | |||||||||
Insurance claim recovery on capital items (note 7) | - | - | (3) | |||||||||
EBITDA | 1,667 | 2,529 | 3,134 | |||||||||
Gearing ratio (Net debt to EBITDA) | 1.86:1 | 0.81:1 | 0.19:1 | |||||||||
Comparative years have been restated for the adoption of IFRIC 20 and IAS 19. Refer to change in accounting policies (note 39) for details.
F - 101
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 39 | CHANGE IN ACCOUNTING POLICIES |
| 39.1 | IFRIC 20 “Stripping Costs in the Production Phase of a Surface Mine” |
Prior to the issuance of IFRIC 20, the accounting for production stripping costs have been based on general IFRS principles and the Framework, as IFRS had no specific guidance.
Previously for group accounting purposes stripping costs incurred in open-pit operations during the production phase to remove additional waste were either capitalised to mine development costs or charged to operating costs on the basis of the average life of mine stripping ratio and the average life of mine costs per tonne. The cost of stripping in any period reflected the average stripping rates for the ore body as a whole.
IFRIC 20 provides specific guidance for accounting of production stripping costs in the production phase of a surface mine. IFRIC 20 differs from the life of mine average strip ratio approach as follows:
The level at which production stripping costs are to be assessed, i.e. at a component level rather than a life of mine level; and
The way in which any stripping activity assets are to be depreciated.
In addition, specific transitional rules are provided to deal with any opening deferred stripping balances the group may have recognised under its previous accounting policy. The impact as a consequence of moving from a life of mine strip ratio to a strip ratio applicable to a component of an ore body is as follows:
Transition
IFRIC 20 has been applied retrospectively to production stripping costs incurred on or after the beginning of the earliest period presented, which for the group, for the year ended 31 December 2013, is 1 January 2011. Any previously recognised asset balance(s) that resulted from stripping activity is to be reclassified as part of an existing asset to which the stripping activity related, to the extent that there remains an identifiable component of the ore body with which the predecessor stripping asset can be associated.
If there is no identifiable component of the ore body to which the predecessor asset relates, the asset is written off via opening accumulated losses at the beginning of the earliest periods presented, i.e. 1 January 2011.
Impact of IFRIC 20
For purposes of the annual results, the adoption of IFRIC 20 at the transition date of 1 January 2011, had the following impact on accumulated losses as at 1 January 2011:
| Figures in million | 1 January 2011 | |||||||||||||
| US Dollars | | As previously reported | | | IFRIC 20 adjustments(1) | | | Adjusted balance | | |||||
| Accumulated losses | ||||||||||||||
| Opening balance | (2,750) | - | (2,750) | |||||||||||
| Derecognise deferred stripping balances not meeting the requirements of IFRIC 20 | - | (99) | (99) | |||||||||||
| Effect on equity accounted investments’ loss | - | (10) | (10) | |||||||||||
| Tax effect | - | 26 | 26 | |||||||||||
| Non-controlling interests | - | - | - | |||||||||||
| Adjusted opening accumulated losses(2) | (2,750) | (83) | (2,833) | |||||||||||
The IFRIC 20 adjustments including transition adjustments; reversal of | |||
Adjusted opening accumulated losses before the impact of |
F - 102
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 39 | CHANGE IN ACCOUNTING POLICIES (continued) |
IFRIC 20 “Stripping Costs in the Production Phase of a Surface Mine” (continued)
Impact on the comparative information
The adoption of IFRIC 20 had the following impact on the comparative information presented:
| Figures in million | ||||||||||||||
| US Dollars | | As previously reported | | | IFRIC 20 adjustments(1) | | | Adjusted balance | | |||||
| Tangible assets | ||||||||||||||
| Opening balance – 1 January 2011 | 6,180 | (99) | 6,081 | |||||||||||
| Reversals of deferred stripping movements under previous approach | (18) | 18 | - | |||||||||||
| Production stripping costs capitalised in terms of IFRIC 20 | - | 158 | 158 | |||||||||||
| Amortisation of deferred stripping assets | - | (57) | (57) | |||||||||||
| Other movements in tangible assets | 363 | - | 363 | |||||||||||
| Adjusted closing balance – 31 December 2011 | 6,525 | 20 | 6,545 | |||||||||||
| Reversals of deferred stripping movements under previous approach | 11 | (11) | - | |||||||||||
| Production stripping costs capitalised in terms of IFRIC 20 | - | 154 | 154 | |||||||||||
| Amortisation of deferred stripping assets | - | (37) | (37) | |||||||||||
| Other movements in tangible assets | 1,112 | 2 | 1,114 | |||||||||||
| Adjusted closing balance – 31 December 2012 | 7,648 | 128 | 7,776 |
| (1) | The |
| Figures in million | 31 December 2011 | 31 December 2012 | ||||||||||||||||||||||||
| US Dollars | | As previously reported | | | IFRIC 20 adjustments(1) | | | Adjusted balance | | | As previously reported | | | IFRIC 20 adjustments(1) | | | Adjusted balance | | ||||||||
| Inventory | ||||||||||||||||||||||||||
| Closing balance | 1,064 | - | 1,064 | 1,287 | - | 1,287 | ||||||||||||||||||||
| Adjustment to inventory valuation as a result of deferred stripping asset adjustments | - | (66) | (66) | - | (74) | (74) | ||||||||||||||||||||
| Adjusted closing balance | 1,064 | (66) | 998 | 1,287 | (74) | 1,213 | ||||||||||||||||||||
| (1) | The IFRIC 20 adjustments include the effect on the inventory valuation of the reversal of historical accounting for deferred stripping and the accounting for deferred stripping in line with the requirements of IFRIC 20. |
F - 103
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 39 | CHANGE IN ACCOUNTING POLICIES (continued) |
IFRIC 20 “Stripping Costs in the Production Phase of a Surface Mine” (continued)
| Figures in million | 31 December 2011 | 31 December 2012 | ||||||||||||||||||||||||
| US Dollars | | As previously reported | | | IFRIC 20 adjustments(1) | | | Adjusted balance | | | As previously reported | | | IFRIC 20 adjustments(1) | | | Adjusted balance | | ||||||||
| Profit or loss | ||||||||||||||||||||||||||
| Profit before taxation | 2,321 | - | 2,321 | 1,171 | - | 1,171 | ||||||||||||||||||||
| Decrease (increase) in cash costs included in cost of sales due to: | - | 110 | 110 | - | 135 | 135 | ||||||||||||||||||||
- Reversals of deferred stripping movements under previous approach | - | 18 | 18 | - | (11) | (11) | ||||||||||||||||||||
- Production stripping costs capitalised in terms of IFRIC 20 | - | 158 | 158 | - | 154 | 154 | ||||||||||||||||||||
- Adjustment to inventory valuation as a result of deferred stripping asset adjustments | - | (66) | (66) | - | (8) | (8) | ||||||||||||||||||||
| Increase in cost of sales due to amortisation of capitalised production stripping costs in terms of IFRIC 20 | - | (57) | (57) | - | (37) | (37) | ||||||||||||||||||||
| Effect on equity-accounted investments’ losses | - | (1) | (1) | - | (2) | (2) | ||||||||||||||||||||
| Sub-total | 2,321 | 52 | 2,373 | 1,171 | 96 | 1,267 | ||||||||||||||||||||
| Taxation | (723) | (15) | (738) | (322) | (26) | (348) | ||||||||||||||||||||
- Normal taxation | (407) | - | (407) | (413) | (1) | (414) | ||||||||||||||||||||
- Deferred taxation | (316) | (15) | (331) | 91 | (25) | 66 | ||||||||||||||||||||
| Adjusted profit | 1,598 | 37 | 1,635 | 849 | 70 | 919 | ||||||||||||||||||||
| (1) | The IFRIC 20 adjustments include transition adjustments; reversal of historical accounting for deferred stripping; and the accounting for deferred stripping in line with the requirements of IFRIC 20. |
| Figures in million | 31 December 2011 | 31 December 2012 | ||||||||||||||||||||||||
| US Dollars | | As previously reported | | | IFRIC 20 adjustments(1) | | | Adjusted balance | | | As previously reported | | | IFRIC 20 adjustments(1) | | | Adjusted balance | | ||||||||
| Other comprehensive income | ||||||||||||||||||||||||||
| Profit as previously reported | 1,598 | - | 1,598 | 849 | - | 849 | ||||||||||||||||||||
| Adjustment to profit as a result of deferred stripping asset adjustments | - | 37 | 37 | - | 70 | 70 | ||||||||||||||||||||
| Other movements in other comprehensive income | (458) | - | (458) | (122) | 1 | (121) | ||||||||||||||||||||
| Adjusted total comprehensive income for the period, net of tax | 1,140 | 37 | 1,177 | 727 | 71 | 798 | ||||||||||||||||||||
| (1) | The IFRIC 20 adjustments include transition adjustments; reversal of historical accounting for deferred stripping; and the accounting for deferred stripping in line with the requirements of IFRIC 20. |
F - 104
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 39 | CHANGE IN ACCOUNTING POLICIES (continued) |
| 39.2 | Employee benefits |
The group operates defined benefit pension plans, which require contributions to be made to separately administered funds.
IAS 19 (revised) has been applied retrospectively from 1 January 2011. As a result, expected returns on plan assets of defined benefit plans are not recognised in profit or loss. Instead, interest on net defined benefit obligation is recognised in profit or loss, calculated using the discount rate used to measure the net pension obligation or asset.
Impact of transition to IAS 19
No impact was recorded in the statement of financial position on the defined benefit plan obligations nor on total shareholders’ equity as the impact only affected the pension cost recorded in the income statement and the consequential effect on actuarial gains and losses recognised in OCI.
The impact on the adjusted opening accumulated losses, the statement of comprehensive income and the statement of changes in equity (note 39.2) are set out below:
| Figures in million | 31 December 2011 | 31 December 2012 | ||||||||
| US Dollars | ||||||||||
| Total equity as previously reported | 5,166 | 5,469 | ||||||||
| Effect of IFRIC 20 adjustments per 39.1 | (46) | 25 | ||||||||
| Adjustment to accumulated losses due to the requirements of IAS 19 | (5) | (8) | ||||||||
| Adjustment to actuarial (losses) gain due to the requirements of IAS 19 | 5 | 8 | ||||||||
| Adjusted total equity | 5,120 | 5,494 | ||||||||
| Figures in million | | Year ended 31 December 2011 | | | Year ended 31 December 2012 | | ||||
| US Dollars | ||||||||||
| Total comprehensive income | ||||||||||
| Opening balance per 39.1 | 1,177 | 798 | ||||||||
| Decrease in profit and loss due to the recognition of interest on net defined benefit obligation instead of expected return on plan assets in terms of IAS 19 | (4) | (6) | ||||||||
| Deferred tax thereon | 1 | 2 | ||||||||
| Decrease in other comprehensive loss due to the decrease in actuarial loss as a result of the recognition of interest on net defined benefit obligation instead of expected return on plan assets in terms of IAS 19 | 4 | 6 | ||||||||
| Deferred tax thereon | (1) | (2) | ||||||||
| Adjusted total comprehensive income | 1,177 | 798 |
There was no impact on the group’s consolidated statement of cash flows.
F - 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 39 | CHANGE IN ACCOUNTING POLICIES (continued) |
| 39.3 | Effect of Accounting Policy changes on earnings per share and headline earnings per share |
| Figures in million | Year ended 31 December | Year ended 31 December | ||||||
US Cents | ||||||||
Basic earnings per ordinary share | ||||||||
Previously reported basic earnings per ordinary share (cents) | 402 | 215 | ||||||
Increase in basic earnings per ordinary share (cents) | 9 | 17 | ||||||
Restated basic (loss) earnings per ordinary share (cents) | 411 | 232 | ||||||
Diluted earnings per ordinary share | ||||||||
Previously reported diluted earnings per ordinary share (cents) | 346 | 161 | ||||||
Increase in diluted earnings per ordinary share (cents) | 9 | 16 | ||||||
Restated diluted earnings per ordinary share (cents) | 355 | 177 | ||||||
Headline earnings per ordinary share | ||||||||
Previously reported headline earnings per ordinary share (cents) | 384 | 296 | ||||||
Increase in headline earnings per ordinary share (cents) | 10 | 16 | ||||||
Restated headline earnings per ordinary share (cents) | 394 | 312 | ||||||
Diluted headline earnings per ordinary share | ||||||||
Previously reported diluted headline earnings per ordinary share (cents) | 330 | 236 | ||||||
Increase in diluted headline earnings per ordinary share (cents) | 8 | 15 | ||||||
Restated diluted headline earnings per ordinary share (cents) | 338 | 251 | ||||||
| 40 | EVENTS SUBSEQUENT TO YEAR END |
On 10 February 2014, AngloGold Ashanti announced that it signed a binding agreement to sell Navachab mine subject to a number of conditions precedent (refer note 25).
F - 106
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 41. | 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 37 and Note 38. 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 31 December 2013, 2012 and 2011 and for the years ended 31 December 2013, 2012 and 2011, 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 - 107
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 41. | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued) |
| Figures in million (US dollars) | 2013 | 2013 | 2013 | 2013 | 2013 | |||||||||||||||
| Condensed consolidating income statement | ||||||||||||||||||||
AngloGold Ashanti
(the “Guarantor”) | IOMco
(the “Issuer”) | Other subsidiaries Subsidiaries”) | Consolidation adjustments | Total | ||||||||||||||||
Revenue |
|
1,762 |
|
|
3 |
|
|
3,945 |
|
|
(2) |
|
|
5,708 |
| |||||
Gold income | 1,747 | - | 3,864 | (114) | 5,497 | |||||||||||||||
Cost of sales | (1,302) | - | (2,844) | - | (4,146) | |||||||||||||||
Gain on non-hedge derivatives and other commodity contracts | - | - | 94 | - | 94 | |||||||||||||||
Gross profit | 445 | - | 1,114 | (114) | 1,445 | |||||||||||||||
Corporate administration, marketing and other (expenses) income | (51) | 6 | (102) | (54) | (201) | |||||||||||||||
Exploration and evaluation costs | (21) | (7) | (227) | - | (255) | |||||||||||||||
Other operating expenses | (11) | (4) | (5) | 1 | (19) | |||||||||||||||
Special items | (1,754) | (1,590) | (2,511) | 2,445 | (3,410) | |||||||||||||||
Operating loss | (1,392) | (1,595) | (1,731) | 2,278 | (2,440) | |||||||||||||||
Dividends received | 7 | - | - | (2) | 5 | |||||||||||||||
Interest received | 4 | 2 | 33 | - | 39 | |||||||||||||||
Exchange gain | 10 | 1 | 3 | - | 14 | |||||||||||||||
Finance costs and unwinding of obligations | (23) | (155) | (118) | - | (296) | |||||||||||||||
Fair value adjustment on $1.25bn bonds | - | (58) | - | - | (58) | |||||||||||||||
Fair value adjustment on option component of convertible bonds | - | - | 9 | - | 9 | |||||||||||||||
Fair value adjustment on mandatory convertible bonds | - | - | 356 | - | 356 | |||||||||||||||
Share of associates and joint ventures’ loss | (143) | (19) | - | - | (162) | |||||||||||||||
Equity loss in subsidiaries | (689) | (1,287) | - | 1,976 | - | |||||||||||||||
Loss before taxation | (2,226) | (3,111) | (1,448) | 4,252 | (2,533) | |||||||||||||||
Taxation | 53 | (6) | 286 | - | 333 | |||||||||||||||
Loss | (2,173) | (3,117) | (1,162) | 4,252 | (2,200) | |||||||||||||||
Preferred stock dividends |
|
(57) |
|
|
- |
|
|
(57) |
|
|
114 |
|
|
- |
| |||||
Loss for the year | (2,230) | (3,117) | (1,219) | 4,366 | (2,200) | |||||||||||||||
Allocated as follows | ||||||||||||||||||||
Equity shareholders | (2,230) | (3,117) | (1,249) | 4,366 | (2,230) | |||||||||||||||
Non-controlling interests | - | - | 30 | - | 30 | |||||||||||||||
| (2,230) | (3,117) | (1,219) | 4,366 | (2,200) | ||||||||||||||||
Comprehensive income |
|
(2,605) |
|
|
(3,170) |
|
|
(1,271) |
|
|
4,471 |
|
|
(2,575) |
| |||||
Comprehensive income attributable to non-controlling interests | - | - | (30) | - | (30) | |||||||||||||||
Comprehensive income attributable to AngloGold Ashanti | (2,605) | (3,170) | (1,301) | 4,471 | (2,605) | |||||||||||||||
F - 108
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 41. | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued) |
| Figures in million (US dollars) | 2012 | 2012 | 2012 | 2012 | 2012 | |||||||||||||||
| Condensed consolidating income statement | ||||||||||||||||||||
AngloGold Ashanti
(the “Guarantor”) | IOMco
(the “Issuer”) | Other subsidiaries Subsidiaries”) | Consolidation adjustments | Total | ||||||||||||||||
Revenue |
|
2,093 |
|
|
3 |
|
|
4,537 |
|
|
(1) |
|
|
6,632 |
| |||||
Gold income | 2,014 | - | 4,423 | (84) | 6,353 | |||||||||||||||
Cost of sales | (1,323) | - | (2,641) | - | (3,964) | |||||||||||||||
Loss on non-hedge derivatives and other commodity contracts | - | - | (35) | - | (35) | |||||||||||||||
Gross profit | 691 | - | 1,747 | (84) | 2,354 | |||||||||||||||
Corporate administration, marketing and other (expenses) income | (147) | 15 | (70) | (89) | (291) | |||||||||||||||
Exploration and evaluation costs | (26) | (16) | (353) | - | (395) | |||||||||||||||
Other operating expenses | (37) | - | (10) | - | (47) | |||||||||||||||
Special items | (1,111) | (8) | (402) | 1,119 | (402) | |||||||||||||||
Operating (loss) profit | (630) | (9) | 912 | 946 | 1,219 | |||||||||||||||
Dividends received | 8 | - | - | (1) | 7 | |||||||||||||||
Interest received | 14 | 3 | 26 | - | 43 | |||||||||||||||
Exchange gain | 23 | - | 4 | (19) | 8 | |||||||||||||||
Finance costs and unwinding of obligations | (16) | (90) | (125) | - | (231) | |||||||||||||||
Fair value adjustment on option component of convertible bonds | - | - | 83 | - | 83 | |||||||||||||||
Fair value adjustment on mandatory convertible bonds | - | - | 162 | - | 162 | |||||||||||||||
Share of associates and joint ventures’ loss | (17) | (13) | - | - | (30) | |||||||||||||||
Equity income in subsidiaries | 1,529 | 460 | - | (1,989) | - | |||||||||||||||
Profit before taxation | 911 | 351 | 1,062 | (1,063) | 1,261 | |||||||||||||||
Taxation | 28 | (5) | (369) | - | (346) | |||||||||||||||
Profit | 939 | 346 | 693 | (1,063) | 915 | |||||||||||||||
Preferred stock dividends |
|
(42) |
|
|
- |
|
|
(42) |
|
|
84 |
|
|
- |
| |||||
Profit for the year | 897 | 346 | 651 | (979) | 915 | |||||||||||||||
Allocated as follows | ||||||||||||||||||||
Equity shareholders | 897 | 346 | 633 | (979) | 897 | |||||||||||||||
Non-controlling interests | - | - | 18 | - | 18 | |||||||||||||||
| 897 | 346 | 651 | (979) | 915 | ||||||||||||||||
Comprehensive income |
|
780 |
|
|
342 |
|
|
673 |
|
|
(997) |
|
|
798 |
| |||||
Comprehensive income attributable to non-controlling interests | - | - | (18) | - | (18) | |||||||||||||||
Comprehensive income attributable to AngloGold Ashanti | 780 | 342 | 655 | (997) | 780 | |||||||||||||||
F - 109
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 41. | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued) |
| Figures in million (US dollars) | 2011 | 2011 | 2011 | 2011 | 2011 | |||||||||||||||
Condensed consolidating income statement | ||||||||||||||||||||
AngloGold Ashanti
(the “Guarantor”) | IOMco
(the “Issuer”) | Other subsidiaries Subsidiaries”) | Consolidation adjustments | Total | ||||||||||||||||
Revenue | 2,690 | 1 | 4,234 | - | 6,925 | |||||||||||||||
Gold income | 2,622 | - | 4,070 | (122) | 6,570 | |||||||||||||||
Cost of sales | (1,482) | - | (2,410) | - | (3,892) | |||||||||||||||
Loss on non-hedge derivatives and other commodity contracts | - | - | (1) | - | (1) | |||||||||||||||
Gross profit | 1,140 | - | 1,659 | (122) | 2,677 | |||||||||||||||
Corporate administration, marketing and other expenses | (198) | (27) | (20) | (33) | (278) | |||||||||||||||
Exploration and evaluation costs | (19) | (18) | (242) | - | (279) | |||||||||||||||
Other operating expenses | (11) | - | (20) | - | (31) | |||||||||||||||
Special items | (586) | 15 | 1,307 | (573) | 163 | |||||||||||||||
Operating profit (loss) | 326 | (30) | 2,684 | (728) | 2,252 | |||||||||||||||
Interest received | 19 | 1 | 32 | - | 52 | |||||||||||||||
Exchange gain (loss) | 5 | - | (3) | - | 2 | |||||||||||||||
Finance costs and unwinding of obligations | (17) | (69) | (110) | - | (196) | |||||||||||||||
Fair value adjustment on option component of convertible bonds | - | - | 84 | - | 84 | |||||||||||||||
Fair value adjustment on mandatory convertible bonds | - | - | 104 | - | 104 | |||||||||||||||
Share of associates and joint ventures’ profit | 57 | 15 | - | - | 72 | |||||||||||||||
Equity income in subsidiaries | 1,609 | 897 | - | (2,506) | - | |||||||||||||||
Profit before taxation | 1,999 | 814 | 2,791 | (3,234) | 2,370 | |||||||||||||||
Taxation | (351) | (2) | (384) | - | (737) | |||||||||||||||
Profit | 1,648 | 812 | 2,407 | (3,234) | 1,633 | |||||||||||||||
Preferred stock dividends | (61) | - | (61) | 122 | - | |||||||||||||||
Profit for the year | 1,587 | 812 | 2,346 | (3,112) | 1,633 | |||||||||||||||
Allocated as follows | ||||||||||||||||||||
Equity shareholders | 1,587 | 812 | 2,300 | (3,112) | 1,587 | |||||||||||||||
Non-controlling interests | - | - | 46 | - | 46 | |||||||||||||||
| 1,587 | 812 | 2,346 | (3,112) | 1,633 | ||||||||||||||||
Comprehensive income | 1,131 | 811 | 2,326 | (3,091) | 1,177 | |||||||||||||||
Comprehensive income attributable to non-controlling interests | - | - | (46) | - | (46) | |||||||||||||||
Comprehensive income attributable to AngloGold Ashanti | 1,131 | 811 | 2,280 | (3,091) | 1,131 | |||||||||||||||
F - 110
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 41. | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued) |
| Figures in million (US dollars) | 2013 | 2013 | 2013 | 2013 | 2013 | |||||||||||||||
Condensed consolidating statement of financial position | ||||||||||||||||||||
AngloGold Ashanti
(the “Guarantor”) | IOMco
(the “Issuer”) | Other subsidiaries Subsidiaries”) | Consolidation adjustments | Total | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Non-current assets | ||||||||||||||||||||
Tangible assets | 1,457 | - | 3,358 | - | 4,815 | |||||||||||||||
Intangible assets | 52 | - | 218 | (3) | 267 | |||||||||||||||
Investments in associates and joint ventures | 2,581 | 3,401 | 1,153 | (5,808) | 1,327 | |||||||||||||||
Other investments | 2 | 6 | 129 | (6) | 131 | |||||||||||||||
Inventories | - | - | 586 | - | 586 | |||||||||||||||
Trade and other receivables | - | 5 | 24 | - | 29 | |||||||||||||||
Deferred taxation | - | - | 177 | - | 177 | |||||||||||||||
Cash restricted for use | - | - | 31 | - | 31 | |||||||||||||||
Other non-current assets | 41 | - | - | - | 41 | |||||||||||||||
| 4,133 | 3,412 | 5,676 | (5,817) | 7,404 | ||||||||||||||||
Current assets | ||||||||||||||||||||
Other investments | - | - | 1 | - | 1 | |||||||||||||||
Inventories, trade and other receivables, intergroup balances and other current assets | 492 | 2,391 | 1,703 | (3,164) | 1,422 | |||||||||||||||
Cash restricted for use | 1 | - | 45 | - | 46 | |||||||||||||||
Cash and cash equivalents | 39 | 409 | 200 | - | 648 | |||||||||||||||
| 532 | 2,800 | 1,949 | (3,164) | 2,117 | ||||||||||||||||
Non-current assets held for sale | 5 | - | 153 | (5) | 153 | |||||||||||||||
| 537 | 2,800 | 2,102 | (3,169) | 2,270 | ||||||||||||||||
Total assets | 4,670 | 6,212 | 7,778 | (8,986) | 9,674 | |||||||||||||||
EQUITY AND LIABILITIES | ||||||||||||||||||||
Share capital and premium | 7,006 | 5,994 | 805 | (6,799) | 7,006 | |||||||||||||||
(Accumulated losses) retained earnings and other reserves | (3,927) | (2,990) | 1,431 | 1,559 | (3,927) | |||||||||||||||
Shareholders’ equity | 3,079 | 3,004 | 2,236 | (5,240) | 3,079 | |||||||||||||||
Non-controlling interests | - | - | 28 | - | 28 | |||||||||||||||
Total equity | 3,079 | 3,004 | 2,264 | (5,240) | 3,107 | |||||||||||||||
Non-current liabilities | 648 | 3,032 | 1,653 | (2) | 5,331 | |||||||||||||||
Bank overdraft | - | 20 | - | 20 | ||||||||||||||||
Current liabilities including intergroup balances | 943 | 176 | 3,784 | (3,744) | 1,159 | |||||||||||||||
Non-current liabilities held for sale | - | - | 57 | - | 57 | |||||||||||||||
Total liabilities | 1,591 | 3,208 | 5,514 | (3,746) | 6,567 | |||||||||||||||
Total equity and liabilities | 4,670 | 6,212 | 7,778 | (8,986) | 9,674 | |||||||||||||||
F - 111
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 41. | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued) |
| Figures in million (US dollars) | 2012 | 2012 | 2012 | 2012 | 2012 | |||||||||||
Condensed consolidating statement of financial position | ||||||||||||||||
|
| AngloGold Ashanti
(the “Guarantor” |
) |
| IOMco
(the “Issuer” |
) | Other subsidiaries(the “Non-Guarantor Subsidiaries”) |
Consolidation adjustments |
|
Total |
| ||||||
ASSETS | ||||||||||||||||
Non-current assets | ||||||||||||||||
Tangible assets | 2,018 | - | 5,758 | - | 7,776 | |||||||||||
Intangible assets | 53 | - | 265 | (3) | 315 | |||||||||||
Investments in associates and joint ventures | 4,577 | 4,391 | 882 | (8,803) | 1,047 | |||||||||||
Other investments | 6 | 6 | 173 | (18) | 167 | |||||||||||
Inventories | - | - | 610 | - | 610 | |||||||||||
Trade and other receivables | 22 | 7 | 50 | - | 79 | |||||||||||
Deferred taxation | - | - | 97 | - | 97 | |||||||||||
Cash restricted for use | - | - | 29 | - | 29 | |||||||||||
Other non-current assets | - | 1 | 6 | - | 7 | |||||||||||
| 6,676 | 4,405 | 7,870 | (8,824) | 10,127 | ||||||||||||
Current assets | ||||||||||||||||
Inventories, trade and other receivables, intergroup balances and other current assets | 1,012 | 2,542 | 3,338 | (5,207) | 1,685 | |||||||||||
Cash restricted for use | 1 | - | 34 | - | 35 | |||||||||||
Cash and cash equivalents | 98 | 537 | 257 | - | 892 | |||||||||||
| 1,111 | 3,079 | 3,629 | (5,207) | 2,612 | ||||||||||||
Non-current assets held for sale | 1 | - | - | (1) | - | |||||||||||
| 1,112 | 3,079 | 3,629 | (5,208) | 2,612 | ||||||||||||
Total assets | 7,788 | 7,484 | 11,499 | (14,032) | 12,739 | |||||||||||
EQUITY AND LIABILITIES | ||||||||||||||||
Share capital and premium | 6,742 | 5,599 | 805 | (6,404) | 6,742 | |||||||||||
(Accumulated losses) retained earnings and other reserves | (1,269 | ) | (1,451 | ) | 3,339 | (1,888) | (1,269 | ) | ||||||||
Shareholders’ equity | 5,473 | 4,148 | 4,144 | (8,292) | 5,473 | |||||||||||
Non-controlling interests | - | - | 21 | - | 21 | |||||||||||
Total equity | 5,473 | 4,148 | 4,165 | (8,292) | 5,494 | |||||||||||
Non-current liabilities | 827 | 1,722 | 2,752 | (14) | 5,287 | |||||||||||
Current liabilities including intergroup balances | 1,488 | 1,614 | 4,582 | (5,726) | 1,958 | |||||||||||
Total liabilities | 2,315 | 3,336 | 7,334 | (5,740) | 7,245 | |||||||||||
Total equity and liabilities | 7,788 | 7,484 | 11,499 | (14,032) | 12,739 | |||||||||||
F - 112
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 41. | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued) |
| Figures in million (US dollars) | 2011 | 2011 | 2011 | 2011 | 2011 | |||||||||||
| Condensed consolidating statement of financial position | ||||||||||||||||
|
| AngloGold Ashanti
(the “Guarantor” |
) |
| IOMco
(the “Issuer” |
) | Other subsidiaries (the “Non-Guarantor Subsidiaries”) |
Consolidation adjustments |
|
Total |
| ||||||
ASSETS | ||||||||||||||||
Non-current assets | ||||||||||||||||
Tangible assets | 1,927 | - | 4,618 | - | 6,545 | |||||||||||
Intangible assets | 9 | - | 205 | (4) | 210 | |||||||||||
Investments in associates and joint ventures | 4,011 | 3,308 | 599 | (7,227) | 691 | |||||||||||
Other investments | 13 | 6 | 201 | (34) | 186 | |||||||||||
Inventories | - | - | 410 | - | 410 | |||||||||||
Trade and other receivables | 30 | 5 | 41 | - | 76 | |||||||||||
Deferred taxation | - | - | 79 | - | 79 | |||||||||||
Cash restricted for use | - | - | 23 | - | 23 | |||||||||||
Other non-current assets | - | 1 | 8 | - | 9 | |||||||||||
| 5,990 | 3,320 | 6,184 | (7,265) | 8,229 | ||||||||||||
Current assets | ||||||||||||||||
| Inventories, trade and other receivables, intergroup balances and other current assets | 403 | 2,011 | 3,070 | (4,132) | 1,352 | |||||||||||
Cash restricted for use | 1 | - | 34 | 35 | ||||||||||||
Cash and cash equivalents | 388 | 458 | 266 | - | 1,112 | |||||||||||
| 792 | 2,469 | 3,370 | (4,132) | 2,499 | ||||||||||||
Non-current assets held for sale | 2 | 20 | - | (1) | 21 | |||||||||||
| 794 | 2,489 | 3,370 | (4,133) | 2,520 | ||||||||||||
Total assets | 6,784 | 5,809 | 9,554 | (11,398) | 10,749 | |||||||||||
EQUITY AND LIABILITIES | ||||||||||||||||
Share capital and premium | 6,689 | 5,704 | 752 | (6,456) | 6,689 | |||||||||||
(Accumulated losses) retained earnings and other reserves | (1,706 | ) | (2,429 | ) | 2,857 | (428) | (1,706 | ) | ||||||||
Shareholders’ equity | 4,983 | 3,275 | 3,609 | (6,884) | 4,983 | |||||||||||
Non-controlling interests | - | - | 136 | 1 | 137 | |||||||||||
Total equity | 4,983 | 3,275 | 3,745 | (6,883) | 5,120 | |||||||||||
Non-current liabilities | 913 | 983 | 2,819 | (27) | 4,688 | |||||||||||
Current liabilities including intergroup balances | 888 | 1,551 | 2,990 | (4,488) | 941 | |||||||||||
Total liabilities | 1,801 | 2,534 | 5,809 | (4,515) | 5,629 | |||||||||||
Total equity and liabilities | 6,784 | 5,809 | 9,554 | (11,398) | 10,749 | |||||||||||
F - 113
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 41. | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued) |
| Figures in million (US dollars) | 2013 | 2013 | 2013 | 2013 | 2013 | |||||||||||||||
| Condensed consolidating statement of cash flow | ||||||||||||||||||||
AngloGold Ashanti
(the “Guarantor”) | IOMco
(the “Issuer”) | Other subsidiaries Subsidiaries”) | Consolidation adjustments | Total | ||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
| Cash generated from (used) by operations | 391 | (126) | 997 | 130 | 1,392 | |||||||||||||||
| Net movement in intergroup receivables and payables | 140 | (1,593) | 1,512 | (59) | - | |||||||||||||||
| Dividends received from joint ventures | - | 18 | - | - | 18 | |||||||||||||||
| Taxation refund | 13 | - | 10 | - | 23 | |||||||||||||||
| Taxation paid | (13) | (1) | (173) | - | (187) | |||||||||||||||
| Net cash inflow (outflow) from operating activities | 531 | (1,702) | 2,346 | 71 | 1,246 | |||||||||||||||
| Cash flows from investing activities | ||||||||||||||||||||
| Capital expenditure | (397) | - | (1,104) | - | (1,501) | |||||||||||||||
| Interest capitalised and paid | - | - | (5) | - | (5) | |||||||||||||||
| Expenditure on intangible assets | (26) | - | (42) | - | (68) | |||||||||||||||
| Proceeds from disposal of tangible assets | - | - | 10 | - | 10 | |||||||||||||||
| Other investments acquired | - | - | (91) | - | (91) | |||||||||||||||
| Proceeds from disposal of other investments | - | - | 81 | - | 81 | |||||||||||||||
| Investments in associates and joint ventures | - | (420) | (52) | - | (472) | |||||||||||||||
| Proceeds from disposal of associates and joint ventures | 6 | - | - | - | 6 | |||||||||||||||
| Net loans advanced to associates and joint ventures | (1) | (39) | - | 32 | (8) | |||||||||||||||
| Dividends received | 7 | - | - | (2) | 5 | |||||||||||||||
| Proceeds from disposal of subsidiary | 2 | - | - | - | 2 | |||||||||||||||
| Reclassification of cash balances to held for sale assets | - | - | (2) | - | (2) | |||||||||||||||
| Acquisition of subsidiary and loan | (168) | - | - | 168 | - | |||||||||||||||
| Increase in cash restricted for use | - | - | (20) | - | (20) | |||||||||||||||
| Interest received | 4 | 2 | 17 | - | 23 | |||||||||||||||
| Net cash outflow from investing activities | (573) | (457) | (1,208) | 198 | (2,040) | |||||||||||||||
| Cash flows from financing activities | ||||||||||||||||||||
| Proceeds from issue of share capital | - | 147 | 20 | (167) | - | |||||||||||||||
| Proceeds from borrowings | 504 | 1,500 | 340 | - | 2,344 | |||||||||||||||
| Repayment of borrowings | (458) | (250) | (778) | - | (1,486) | |||||||||||||||
| Finance costs paid | (12) | (103) | (85) | - | (200) | |||||||||||||||
| Revolving credit facility and bond transaction costs | - | (36) | - | - | (36) | |||||||||||||||
| Dividends paid | (40) | - | (22) | - | (62) | |||||||||||||||
| Intergroup dividends received (paid) | - | 773 | (773) | - | - | |||||||||||||||
| Net cash (outflow) inflow from financing activities | (6) | 2,031 | (1,298) | (167) | 560 | |||||||||||||||
| Net decrease in cash and cash equivalents | (48) | (128) | (160) | 102 | (234) | |||||||||||||||
| Translation | (11) | - | 83 | (102) | (30) | |||||||||||||||
| Cash and cash equivalents at beginning of year | 98 | 537 | 257 | - | 892 | |||||||||||||||
| Cash and cash equivalents at end of year(1) | 39 | 409 | 180 | - | 628 | |||||||||||||||
| (1) | Cash and cash equivalents are net of a bank overdraft of $20 million. |
F - 114
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 41. | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued) |
| Figures in million (US dollars) | 2012 | 2012 | 2012 | 2012 | 2012 | |||||||||||||||
| Condensed consolidating statement of cash flow | ||||||||||||||||||||
AngloGold Ashanti
(the “Guarantor”) | IOMco
(the “Issuer”) | Other subsidiaries Subsidiaries”) | Consolidation adjustments | Total | ||||||||||||||||
| Cash flows from operating activities | ||||||||||||||||||||
| Cash generated from operations | 658 | - | 1,628 | 64 | 2,350 | |||||||||||||||
| Net movement in intergroup receivables and payables | (32) | (529) | 585 | (24) | - | |||||||||||||||
| Dividends received from joint ventures | - | 89 | - | (17) | 72 | |||||||||||||||
| Taxation refund | - | - | 54 | - | 54 | |||||||||||||||
| Taxation paid | (82) | (2) | (423) | - | (507) | |||||||||||||||
| Net cash inflow (outflow) from operating activities | 544 | (442) | 1,844 | 23 | 1,969 | |||||||||||||||
| Cash flows from investing activities | ||||||||||||||||||||
| Capital expenditure | (542) | - | (1,383) | - | (1,925) | |||||||||||||||
| Interest capitalised and paid | - | - | (12) | - | (12) | |||||||||||||||
| Expenditure on intangible assets | (45) | - | (34) | - | (79) | |||||||||||||||
| Proceeds from disposal of tangible assets | - | - | 5 | - | 5 | |||||||||||||||
| Other investments acquired | - | (2) | (95) | - | (97) | |||||||||||||||
| Proceeds from disposal of other investments | - | - | 86 | - | 86 | |||||||||||||||
| Investments in associates and joint ventures | (2) | (308) | (39) | - | (349) | |||||||||||||||
| Proceeds from disposal of associates and joint ventures | - | 20 | - | - | 20 | |||||||||||||||
| Net loans advanced to associates and joint ventures | (1) | (48) | - | (15) | (64) | |||||||||||||||
| Dividends received | 7 | - | - | - | 7 | |||||||||||||||
| Proceeds from disposal of subsidiary | 433 | - | - | (427) | 6 | |||||||||||||||
| Net cash in subsidiary disposed | - | - | (26) | - | (26) | |||||||||||||||
| Acquisition of subsidiary and loan | (673) | - | - | 338 | (335) | |||||||||||||||
| Increase in cash restricted for use | - | - | (3) | - | (3) | |||||||||||||||
| Interest received | 12 | 2 | 22 | - | 36 | |||||||||||||||
| Loans advanced | - | - | (45) | - | (45) | |||||||||||||||
| Net cash outflow from investing activities | (811) | (336) | (1,524) | (104) | (2,775) | |||||||||||||||
| Cash flows from financing activities | ||||||||||||||||||||
| Proceeds from issue of share capital | 2 | 330 | 7 | (337) | 2 | |||||||||||||||
| Redemption of preference shares | - | (435) | - | 435 | - | |||||||||||||||
| Proceeds from borrowings | 174 | 995 | 263 | - | 1,432 | |||||||||||||||
| Repayment of borrowings | - | (200) | (17) | - | (217) | |||||||||||||||
| Finance costs paid | (4) | (64) | (77) | - | (145) | |||||||||||||||
| Acquisition of non-controlling interest | - | - | (215) | - | (215) | |||||||||||||||
| Revolving credit facility and bond transaction costs | - | (22) | (8) | - | (30) | |||||||||||||||
| Dividends paid | (215) | - | (21) | - | (236) | |||||||||||||||
| Intergroup dividends received (paid) | 18 | 253 | (255) | (16) | - | |||||||||||||||
| Net cash (outflow) inflow from financing activities | (25) | 857 | (323) | 82 | 591 | |||||||||||||||
| Net (decrease) increase in cash and cash equivalents | (292) | 79 | (3) | 1 | (215) | |||||||||||||||
| Translation | 2 | - | (6) | (1) | (5) | |||||||||||||||
| Cash and cash equivalents at beginning of year | 388 | 458 | 266 | - | 1,112 | |||||||||||||||
| Cash and cash equivalents at end of year | 98 | 537 | 257 | - | 892 | |||||||||||||||
F - 115
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 41. | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued) |
| Figures in million (US dollars) | 2011 | 2011 | 2011 | 2011 | 2011 | |||||||||||||||
| Condensed consolidating statement of cash flow | ||||||||||||||||||||
AngloGold Ashanti
(the “Guarantor”) | IOMco
(the “Issuer”) | Other subsidiaries Subsidiaries”) | Consolidation adjustments | Total | ||||||||||||||||
| Cash flows from operating activities | ||||||||||||||||||||
| Cash generated from (used) by operations | 1,186 | (30) | 1,833 | 92 | 3,081 | |||||||||||||||
| Net movement in intergroup receivables and payables | 145 | 109 | (263) | 9 | - | |||||||||||||||
| Dividends received from joint ventures | - | 111 | - | - | 111 | |||||||||||||||
| Taxation refund | 74 | - | 24 | - | 98 | |||||||||||||||
| Taxation paid | (102) | (1) | (374) | - | (477) | |||||||||||||||
| Net cash inflow from operating activities | 1,303 | 189 | 1,220 | 101 | 2,813 | |||||||||||||||
| Cash flows from investing activities | ||||||||||||||||||||
| Capital expenditure | (529) | - | (1,022) | - | (1,551) | |||||||||||||||
| Expenditure on intangible assets | (10) | - | (6) | - | (16) | |||||||||||||||
| Proceeds from disposal of tangible assets | 6 | - | 13 | - | 19 | |||||||||||||||
| Other investments acquired | (30) | (5) | (112) | - | (147) | |||||||||||||||
| Proceeds from disposal of other investments | - | - | 91 | - | 91 | |||||||||||||||
| Investments in associates and joint ventures | (1) | (94) | (20) | - | (115) | |||||||||||||||
| Net loans advanced to associates and joint ventures | - | (5) | - | (20) | (25) | |||||||||||||||
| Proceeds from disposal of subsidiary | 9 | - | - | - | 9 | |||||||||||||||
| Cash in subsidiary disposed | - | - | (11) | - | (11) | |||||||||||||||
| Acquisition of subsidiary and loan | (202) | (1) | 1 | 202 | - | |||||||||||||||
| Increase in cash restricted for use | - | - | (19) | - | (19) | |||||||||||||||
| Interest received | 19 | 1 | 19 | - | 39 | |||||||||||||||
| Loans advanced | (15) | - | - | 19 | 4 | |||||||||||||||
| Net cash outflow from investing activities | (753) | (104) | (1,066) | 201 | (1,722) | |||||||||||||||
| Cash flows from financing activities | ||||||||||||||||||||
| Proceeds from issue of share capital | 10 | 202 | - | (202) | 10 | |||||||||||||||
| Share issue expenses | (1) | - | - | - | (1) | |||||||||||||||
| Proceeds from borrowings | - | 100 | 9 | - | 109 | |||||||||||||||
| Repayment of borrowings | (99) | (150) | (19) | - | (268) | |||||||||||||||
| Finance costs paid | (5) | (65) | (74) | - | (144) | |||||||||||||||
| Dividends paid | (131) | - | (38) | - | (169) | |||||||||||||||
| Intergroup dividends received (paid) | - | 172 | (172) | - | - | |||||||||||||||
| Net cash (outflow) inflow from financing activities | (226) | 259 | (294) | (202) | (463) | |||||||||||||||
| Net increase (decrease) in cash and cash equivalents | 324 | 344 | (140) | 100 | 628 | |||||||||||||||
| Translation | (88) | - | 86 | (100) | (102) | |||||||||||||||
| Cash and cash equivalents at beginning of year | 152 | 114 | 320 | - | 586 | |||||||||||||||
| Cash and cash equivalents at end of year | 388 | 458 | 266 | - | 1,112 | |||||||||||||||
F - 116
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 42. | RECONCILIATION BETWEEN IFRS AND US GAAP |
The consolidated financial statements of AngloGold Ashanti Limited and its subsidiaries included in this annual report on Form 20-F have been prepared in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”), which differs in certain significant respects from accounting principles generally accepted in the United States (“US GAAP”). AngloGold Ashanti’s prior reports on Form 20-F were prepared in terms of US GAAP. The principal differences between IFRS as issued by the IASB and US GAAP that affect consolidated net income for the years ended 31 December 2012 and 2011, and total shareholders’ equity as at 31 December 2012 and 2011, are presented below.
| Figures in million (US dollars) | Notes | 2012 | 2011 | |||||||
| Income statement for the year ended 31 December | ||||||||||
Net income under US GAAP | 829 | 1,425 | ||||||||
Reconciling items | ||||||||||
Environmental rehabilitation | (1) | 11 | (51) | |||||||
Deferred stripping | (2) | 116 | 39 | |||||||
Impairments - long-lived assets and goodwill | (3) | 16 | (5) | |||||||
Impairments - reversals | (3) | (27) | 155 | |||||||
Pension and other post-retirement benefits - actuarial gains/(losses) on pensions | (4) | 19 | 39 | |||||||
Pension and other post-retirement benefits - employee benefits | (4) | (6) | (4) | |||||||
Amortisation expense | (5) | (4) | 19 | |||||||
Onerous contract - First Uranium (Pty) Limited | (6) | (45) | - | |||||||
Other reconciling items | (7) | (8) | 4 | |||||||
Taxation | (8) | (4) | (34) | |||||||
Net income as per IFRS(1) | 897 | 1,587 | ||||||||
| (1) | Presented as profit for the year attributable to equity shareholders per group – income statement. |
| Figures in million (US dollars) | Notes | 2012 | 2011 | |||||||
| Balance sheet 31 December | ||||||||||
Stockholders’ equity per US GAAP | 5,848 | 5,522 | ||||||||
Reconciling items | ||||||||||
Environmental rehabilitation | (1) | (60) | (67) | |||||||
Deferred stripping | (2) | 278 | 163 | |||||||
Impairments - long-lived assets and goodwill | (3) | 11 | (7) | |||||||
Impairments - reversals | (3) | 156 | 185 | |||||||
Pension and other post-retirement benefits | (4) | - | 2 | |||||||
Amortisation expense | (5) | (760) | (773) | |||||||
Onerous contract - First Uranium (Pty) Limited | (6) | (46) | - | |||||||
Other reconciling items | (7) | (10) | (5) | |||||||
Taxation | (8) | 77 | 100 | |||||||
Stockholders’ equity per IFRS(2) | 5,494 | 5,120 | ||||||||
| (2) | Presented as total equity per group – statement of financial position. |
F - 117
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 42. | RECONCILIATION BETWEEN IFRS AND US GAAP(continued) |
Statement of cash flows
AngloGold Ashanti Limited prepares its consolidated statement of cash flows for all periods presented in the annual report on Form 20-F in accordance with IAS 7, as amended, as such we have not presented a reconciliation of our statement of cash flows.
Earnings per share
As previously disclosed in AngloGold Ashanti Limited’s annual report on Form 20-F, earnings per share attributable to AngloGold Ashanti ordinary shareholders under US GAAP were (in cents):
| Figures in million (US dollars) | 2012 | 2011 | ||||||
Ordinary shares | 215 | 371 | ||||||
E Ordinary shares | 108 | 185 | ||||||
Ordinary shares - diluted | 161 | 317 | ||||||
E Ordinary shares - diluted | 84 | 160 | ||||||
Notes to the reconciliation:
| (1) | Environmental rehabilitation |
Under US GAAP, rehabilitation liabilities are not re-measured for changes in fair value at each reporting period. Rather, the credit adjusted risk-free discount rate used to recognise the provision, is used for all subsequent reductions in the estimated gross future cash flows. However, the credit adjusted risk-free discount rate is adjusted to the then current credit adjusted risk free rate if the estimated gross future cash flows increase, creating a ‘‘layered” liability. Under IFRS, a discount rate that reflects the current market assessment at each balance sheet date is used to revalue the entire obligation.
Long-term environmental obligations comprising decommissioning and restoration (collectively rehabilitation) are based on AngloGold Ashanti’s environmental management plans, in compliance with the current environmental and regulatory requirements. Decommissioning costs represent costs from rectifying damage caused before production commenced and arise from the acquisition, development, construction and operation of a mining property. Restoration represents costs of restoring site damage after the commencement of production through the normal operation of the asset. Environmental liabilities other than rehabilitation costs which relate to liabilities from specific events are accrued when they are known, probable and reasonably estimable and are not included in the scope of the GAAP difference discussed above.
| (2) | Deferred stripping |
Under US GAAP, production stripping costs are considered under a full absorption costing system and recognised as a component of inventory and expensed as cost of sales when product sales are recognised.
With effect from 1 January 2013, AngloGold Ashanti, under IFRS, adopted the IFRS Interpretations Committee (“IFRIC”) 20 in relation to capitalisation of qualifying deferred stripping costs and amortising the same with appropriate componentisation. IFRIC 20 has been applied retrospectively to production stripping costs incurred on or after 1 January 2011. Any previously recognised asset balance(s) that resulted from stripping activity was reclassified as part of an existing asset to which the stripping activity related, to the extent that there remains an identifiable component of the ore body with which the predecessor stripping asset can be associated.
F - 118
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 42. | RECONCILIATION BETWEEN IFRS AND US GAAP(continued) |
| (3) | Impairments - long-lived assets and goodwill |
Impairment adjustments are summarised as follows:
| Figures in million (US dollars) | 2012 | 2011 | ||||||
Impairments - long-lived assets | 16 | (5 | ) | |||||
Impairments - goodwill | - | - | ||||||
Total | 16 | (5 | ) | |||||
Long-lived assets
Impairment of an asset is recognised in the income statement if the carrying value of an asset exceeds the recoverable amount. Recoverable amounts are estimated for individual assets or, where an individual asset cannot generate cash flows independently, the recoverable amount is determined for the larger cash-generating unit or asset group to which the asset belongs.
Under US GAAP, the recoverable amount is estimated as the future undiscounted net cash flows of the asset or group of assets. If an asset or asset group is considered to be impaired, the impairment is measured as the amount by which the carrying amount of the asset held for use or group of assets held for use exceeds the fair value of that asset or group.
Under IFRS, the recoverable amount is estimated as the asset’s value in use or its fair value less costs to sell. If an asset or cash generating unit is considered to be impaired, the impairment which is recognised is measured as the amount by which the carrying amount of the asset or group of assets exceeds the asset’s value in use or its fair value less costs to sell.
Due to different carrying values for IFRS and US GAAP and different recoverable amount measurement criteria, impairment charges and amortisation of the long - lived assets that are impaired will differ.
Goodwill
Under US GAAP, a separate test of goodwill impairment is performed. Similar to IFRS the recoverable amount of the reporting unit is compared to the carrying value, when impairment exists the impairment is allocated to goodwill and the other assets under IFRS, but under US GAAP the implied fair value of the goodwill has to be calculated in a so called “step two” analysis. The implied fair value of goodwill is determined in a similar manner as the amount of goodwill recognised in a business combination is determined. That is, an entity shall allocate the fair value of a reporting unit to all of the assets and liabilities of that unit (including any unrecognised intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the price paid to acquire the reporting unit. The excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill.
Impairments reversals
Impairment reversals are summarised as follows:
| Figures in million (US dollars) | 2012 | 2011 | ||||||
Impairment reversals - investments | (37) | 18 | ||||||
Impairment reversals - long-lived assets | - | 137 | ||||||
Impairment reversals - intangible assets | 10 | - | ||||||
Total | (27) | 155 | ||||||
Under IFRS, previously recognised impairment for long-lived assets and inventory may be reversed, excluding goodwill, in so far as estimates change as a result of an event occurring after the impairment was recognised. An impairment is reversed only to the extent that the asset’s carrying value does not exceed the carrying value that would have been determined had no impairment been recognised. A reversal of impairment is recognised in the income statement. US GAAP does not allow reversals of impairment charges.
F - 119
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 42. | RECONCILIATION BETWEEN IFRS AND US GAAP(continued) |
In 2010, an equity investment was fully impaired for both IFRS and US GAAP. In 2011, AngloGold Ashanti Limited renegotiated the purchase agreement. The renegotiated purchase price exceeded the carrying value which triggered an impairment reversal for IFRS. US GAAP only allows for the reversal of impairment when proceeds for the sale of the asset are realised. In 2012, the sale was finalised and the purchase consideration realised, resulting in $20 million being recognised as the profit on the disposal under US GAAP.
In 2010, AngloGold Ashanti under IFRS reversed an impairment of $19 million in a listed associate which was not recognised under US GAAP, resulting in a lower carrying value for US GAAP purposes. In 2011 and 2012, the share price of the associate decreased further resulting in a decline in the fair value of the investment below cost and the investment was impaired under IFRS for both years. These impairments were not recognised under US GAAP due to a lower US GAAP carrying value.
As part of the AngloGold Ashanti business combination in 2004, the government of Ghana agreed to a concession wherein income tax will not exceed a rate of 30 percent for a period of fifteen years, resulting in a recognised intangible asset upon acquisition. During 2005, the corporate tax rate in Ghana decreased to 25 percent and the tax rate concession, which expires in 2019, was fully impaired under both IFRS and US GAAP. During 2012, the corporate tax rate on mining companies was increased from 25 percent to 35 percent resulting in an intangible asset impairment reversal under IFRS, which was not recognised for US GAAP.
| (4) | Pension and other post-retirement medical benefits - actuarial gains/(losses) on pensions |
Under US GAAP, in terms of AngloGold Ashanti’s accounting policies, actuarial gains and losses are recognised through profit or loss when they occur. Under IFRS, in terms of IAS19 (revised) which was adopted on 1 January 2013 and applied retrospectively from 1 January 2011, AngloGold Ashanti records unrecognised actuarial gains and losses through other comprehensive income and are not subsequently recycled through profit or loss. The difference quantified above represents the period’s actuarial loss recognised through reserves under IFRS.
Pension and other post-retirement medical benefits - employee benefits
Expected return on plan assets under US GAAP is calculated using the fair value of plan assets, the expected long-term rate of return on those assets and is recognised on the US GAAP income statement as a current period expense. Under IFRS, in terms of IAS19 (revised) which was adopted on 1 January 2013, and applied retrospectively from 1 January 2011, expected returns on plan assets of defined benefit plans are not recognised in profit or loss. Instead, interest on the net defined benefit obligation is recognised in profit or loss, calculated using the discount rate used to measure the net pension obligation or asset.
| (5) | Amortisation expense |
Amortisation adjustments are summarised as follows:
| Figures in million (US dollars) | 2012 | 2011 | ||
Amortisation of assets not recognised under IFRS | 6 | 10 | ||
Amortisation of assets acquired from Ashanti in 2004 | 1 | 4 | ||
Amortisation of assets relating to derivatives | 8 | 9 | ||
Amortisation of assets in GCGC transaction | 3 | 3 | ||
Amortisation relating to impairments and impairment reversals | (23) | (10) | ||
Other amortisation differences | 1 | 3 | ||
Total | (4) | 19 |
F - 120
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 42. | RECONCILIATION BETWEEN IFRS AND US GAAP(continued) |
Amortisation differences between US GAAP and IFRS arise from corporate activities which include the following:
Assets and fair value adjustments not recognised under IFRS -Under IFRS, at the formation of AngloGold on 29 June 1998, the acquisition was accounted for using the “uniting of interest” method. The uniting of interest method under IFRS at the time required that assets and liabilities brought together recognised at book value. This is similar to the “pooling of interests” method under US GAAP. Under US GAAP, at the time, the original formation of AngloGold did not qualify as a “pooling of interest”, due to specific tests, and therefore the transaction was accounted for as a business combination where assets and liabilities acquired were recorded at fair value. This resulted in differences in the book values of the respective assets and liabilities, and as a result continues to account for accounting differences between IFRS and US GAAP. As at 31 December 2012 and 2011, the carrying amount of these assets amounted to $141 million and $167 million, respectively.
Acquisition of Ashanti in 2004 - The primary accounting difference related to the different acquisition dates for IFRS and US GAAP, since at the time of the acquisition, the acquisition date under IFRS was the date that control was obtained whilst under US GAAP the date of the announcement was used. Since this was an equity settled transaction, different transaction dates translated into different purchase considerations. As a result, different fair values had to be attributed (including the value of goodwill allocated) to some of the assets and liabilities.
Accounting for derivatives -At acquisition date, qualifying derivatives that were acquired as part of the Ashanti acquisition in 2004 were classified as speculative derivatives under US GAAP whereas for IFRS these were classified as normal purchase and sale exempted (“NPSE”) contracts, i.e. accounted for off-balance sheet. Under US GAAP, the offset of the “off-balance sheet” derivatives is not permitted and amortisation is calculated on the gross value of the mining assets acquired whereas under IFRS, amortisation is calculated on the net amount of the mining assets acquired. AngloGold Ashanti completed the elimination of its hedge book during 2010.
Golden Cycle minorities acquired - 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”) on 1 July 2008. Under US GAAP, this transaction was accounted for as a purchase business combination whereby identifiable assets acquired and liabilities assumed were recorded at their fair values as of the date of acquisition. Under IFRS this transaction was accounted for as an equity transaction where the difference between the purchase consideration and the carrying value of the non-controlling interest was recognised in equity
Intangibles and goodwill
Both IFRS and US GAAP require purchase consideration to be allocated to the net assets acquired at their fair value on the date of acquisition. Under IFRS any excess of the purchase price over the fair value of the attributable mineral reserves and net assets is recognised as goodwill. Under both IFRS and US GAAP goodwill is tested annually for impairment, or when other indicators of impairment exist.
Although the principle of impairment is similar for IFRS and US GAAP, the measurement of impairment of long-lived assets and goodwill differ due to different methods to determine whether an impairment exists. Furthermore, due to different book values for IFRS and US GAAP, impairment charges can differ having an impact on subsequent amortisation.
F - 121
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
| 42. | RECONCILIATION BETWEEN IFRS AND US GAAP(continued) |
| (6) | Onerous contract - First Uranium (Pty) Limited |
On acquisition, the fair value of the onerous commodity contract was the same under both IFRS and US GAAP. A GAAP difference exists in the subsequent measurement of the onerous commodity contract. Under IFRS, the commodity contract is considered an onerous contract and measured at fair value, whilst under US GAAP, the contract is recognised on acquisition as a loss making executory contract, which is amortised as the delivery of the commodity occurs, through the income statement.
| (7) | Other reconciling items |
Other reconciling items consist of other miscellaneous adjustments between IFRS and US GAAP that are considered insignificant to be quantified individually.
| (8) | Taxation |
Taxation differences can be summarised as follows:
| Figures in million (US dollars) | 2012 | 2011 | ||||||
Taxation adjustments on reconciling items | (22) | (12) | ||||||
Uncertain tax positions | 1 | - | ||||||
Translation differences on deferred tax | - | (23) | ||||||
Tax rate adjustments impact on historical balances | 17 | 1 | ||||||
Total | (4) | (34) | ||||||
Accounting differences relating to income taxes, including deferred taxes, relate to the tax effect of other accounting differences as well as the differences in historical book values under the two GAAPs. Furthermore, the accounting recognition and measurement for uncertain tax positions differ for both IFRS and US GAAP. In addition, under US GAAP, foreign non-monetary carrying amounts are translated at their historical rates of exchange, while under IFRS, carrying amounts used in the computation of deferred tax are translated from into the local currency at a closing rate of exchange.
F - 122
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 authorised the undersigned to sign this annual report on its behalf.
ANGLOGOLD ASHANTI LIMITED
/s/ Richard Duffy | ||||
Name | : | Richard Duffy | ||
Title | ||||
: | ||||
Chief Financial Officer | ||||
E-1
Date | : | 14 April 2014 |
Exhibits to Form 20-F
Exhibit Number | Description | Remarks | ||
Exhibit | ||||
Memorandum | Incorporated by reference to | |||
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 28 April 2010 | Incorporated by reference to Exhibit 4.2 to AngloGold Ashanti’s registration statement on Form F-3 (No. 333-182712) filed 17 July 2012 | ||
Exhibit | 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 28 April 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 28 April 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 30 July 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 22 September 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 22 September 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 22 September 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 22 September 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 18 October 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 17 July 2012 | ||
Exhibit Number | Description | Remarks | ||
Exhibit 19.2.8 | Form of 8.500% Notes due 2020 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 30 July 2013 | ||
Exhibit 19.4.1.1 | AngloGold Limited Share Incentive Scheme in effect 4 April | 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 28 June | ||
Exhibit 19.4.1.2 | ||||
Bonus Share Plan | Incorporated by reference to AngloGold Ashanti’s report on form 6-K furnished to the Securities and Exchange Commission on 10 April 2013 | |||
Exhibit 19.4.1.3 | Long-Term Incentive Plan as amended on 27 March 2013 | Incorporated by reference to AngloGold Ashanti’s report on form 6-K furnished to the Securities and Exchange Commission on 10 April 2013 | ||
Exhibit 19.4.4 | Syndicated Loan Facility Agreement dated 20 July 2012, by and among AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Incorporated, as borrowers, AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc and 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 | ||
Exhibit 19.4.5 | Employment contract of Srinivasan Venkatakrishnan – Chief Executive Officer with effect from 8 May 2013 | |||
Incorporated by reference to | ||||
Exhibit 19.4.5.1 | Employment contract of Richard Duffy – Chief Financial Officer with effect from 1 June 2013 | |||
Incorporate by reference to | ||||
Exhibit 19.6 | ||||
Statement regarding how loss/earnings per | See note | |||
Exhibit 19.8 | ||||
List of AngloGold Ashanti Limited subsidiaries | ||||
Exhibit 19.12.1 | ||||
Certification of | ||||
Exhibit Number | Description | Remarks | ||
Exhibit 19.12.2 | Certification of | |||
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 | ||||
Consent of Ernst & Young Inc., independent registered public accounting firm | ||||
E-2
Exhibit 19.15.2 | ||||
Consent of BDO | ||||
Exhibit 19.16 | ||||
Report on MSHA violations in terms of the Dodd-Frank Act | ||||
E-3
E-4