As filed with the Securities and Exchange Commission on 14 April 201431 March 2016
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
¨ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR 12(G) OF THE SECURITIES EXCHANGE ACT OF 1934 OR |
x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 OR |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 OR |
¨ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE FINANCIAL YEAR ENDED 31 December 20132015
Commission file number: 1-14846
AngloGold Ashanti Limited
(Exact Name of Registrant as Specified in its Charter)
Republic of South Africa
(Jurisdiction of Incorporation or Organisation)
76 JeppeRahima Moosa Street, Newtown, Johannesburg, 2001
(P.O. Box 62117, Marshalltown, 2107)
South Africa
(Address of Principal Executive Offices)
ME Sanz Perez, Company Secretary,Kandimathie Christine Ramon, Chief Financial Officer, Telephone: +27 11 6376306, Facsimile: +27 86 67501376376019
E-mail: rsanz@anglogoldashanti.com,cramon@anglogoldashanti.com, 76 JeppeRahima Moosa Street, Newtown, Johannesburg, 2001, South Africa
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Name of each exchange on which registered | |
American Depositary Shares | New York Stock Exchange | |
Ordinary Shares | New York Stock Exchange* | |
5.375% Notes due 2020 | New York Stock Exchange | |
8.500% Notes due 2020 | New York Stock Exchange | |
5.125% Notes due 2022 | New York Stock Exchange | |
6.50% Notes due 2040 | New York Stock Exchange |
* | Not for trading, but only in connection with the registration of American Depositary Shares pursuant to the requirements of the Securities and Exchange Commission |
Securities registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
Ordinary Shares of 25 ZAR cents each | ||||
| ||||
A Redeemable Preference Shares of 50 ZAR cents each | 2,000,000 | |||
B Redeemable Preference Shares of 1 ZAR cent each | 778,896 |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes x No ¨ |
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes ¨ No x |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No ¨ |
Indicate by check mark whether the registrant (1) has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files)*.
Yes ¨ No ¨ |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
(Check one): Large Accelerated Filer x | Accelerated Filer¨ | Non-Accelerated Filer ¨ |
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ¨ |
International Financial Reporting Standards as issued by the International Accounting Standards Boardx Other¨
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). | Yes ¨ No x |
* | This requirement does not apply to the registrant. |
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Item 1: | 11 | |||||||
Item 2: | 11 | |||||||
Item 3: | ||||||||
3A. | 11 | |||||||
3B. | 15 | |||||||
3C. | 15 | |||||||
3D. | 15 | |||||||
Item 4: | 47 | |||||||
4A. | 47 | |||||||
4B. | 49 | |||||||
4C. | 98 | |||||||
4D. | 99 | |||||||
Item 4A: | 124 | |||||||
Item 5: | 125 | |||||||
5A. | 126 | |||||||
5B. | 167 | |||||||
5C. | 174 | |||||||
5D. | 174 | |||||||
5E. | 174 | |||||||
5F. | 174 | |||||||
Item 6: | 175 | |||||||
6A. | 175 | |||||||
6B. | 182 | |||||||
6C. | 185 | |||||||
6D. | 189 | |||||||
6E. | 190 | |||||||
Item 7: | 197 | |||||||
7A. | 198 | |||||||
7B. | 199 | |||||||
7C. | 199 | |||||||
Item 8: | 200 | |||||||
8A. | Consolidated financial statements and other financial information | 200 | ||||||
200 | ||||||||
205 | ||||||||
8B. | 205 |
Item 9: | 206 | |||||
9A. | ||||||
9B. | ||||||
9C. | ||||||
9D. | ||||||
9E. | ||||||
9F. | ||||||
Item 10: | 208 | |||||
10A. | ||||||
10B. | ||||||
10C. | ||||||
10D. | ||||||
10E. | ||||||
10F. | ||||||
10G. | ||||||
10H. | ||||||
10I. | ||||||
Item 11: | ||||||
Item 12: | 236 | |||||
12A. | ||||||
12B. | ||||||
12C. | ||||||
12D. | 236 | |||||
Item 13: | ||||||
Item 14: | Material modifications to the rights of security holders and use of proceeds | |||||
Item 15: | ||||||
Item 16A: | ||||||
Item 16B: | ||||||
Item 16C: | ||||||
Item 16D: | ||||||
Item 16E: | Purchases of equity securities by the issuer and affiliated purchasers | |||||
Item 16F: | ||||||
Item 16G: | ||||||
Item 16H: | ||||||
Item 17: | ||||||
Item 18: | ||||||
Item 19 | E pages |
AngloGold Ashanti Limited
In this annual report on Form 20-F, unless the context otherwise requires, references to AngloGold, AngloGold Ashanti, AGA, the company, the Company and the group are references to AngloGold Ashanti Limited including, as appropriate, subsidiaries and associate companies of AngloGold Ashanti.
IFRS financial statements
As a company incorporated in the Republic of South Africa, AngloGold Ashanti has prepared and filed annual audited consolidated financial statements and unaudited consolidated quarterly financial statements in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) in the English language since 1998. These financial statements are distributed to shareholders and are submitted to the JSE Limited (JSE), as well as the London, New York, Australian and Ghana stock exchanges.
In previous years the IFRS financial statements were furnished to the US Securities and Exchange Commission (SEC) on Form 6-K. The annual consolidated financial statements contained in the Form 20-F for the years ended 31 December 2012 and prior were prepared in accordance with U.S. generally accepted accounting principles (US GAAP).
In 2013, AngloGold Ashanti has prepared the annual audited consolidated financial statements contained in this annual report on Form 20-F for the years ended 31 December 2013, 2012 and 2011 and as at 31 December 2013, 2012 and 2011 in accordance with IFRS as issued by the IASB. As a consequence of previously filing IFRS financial statements in our home country, we are not permitted to take advantage of any IFRS1 – “First-time Adoption of International Financial Reporting Standards” exceptions in this first filing of IFRS on Form 20-F. The company changed to reporting in accordance with IFRS in its Form 20-F to remove duplication, improve efficiencies as it reports in accordance with IFRS in its home country – South Africa and align with the majority of its peers. As this is a first time filing of IFRS on Form 20-F the financial statements include a reconciliation of IFRS to US GAAP for the 2012 and 2011 fiscal years. Refer: Item 18 Financial Statements – Note 42 – “Reconciliation between IFRS and US GAAP”.
Although this is a first filing of IFRS financial statements in the annual report on Form 20-F, we have highlighted the 2012 and 2011 years “restated” as they were restated as a result of the adoption of new accounting policies required in terms of IFRS in the Annual Financial Statements and Integrated Reports in our home country.
Currency
AngloGold Ashanti presents its consolidated financial statements in United States dollars.
In this annual report, references to rands, ZAR and R are to the lawful currency of the Republic of South Africa, references to US dollars, dollar or $ are to the lawful currency of the United States, references to€ and Euro are to the lawful currency of the European Union, references to C$ or CAD are to the lawful currency of Canada, references to ARS and Argentinean peso are to the lawful currency of Argentina, references to AUD and A$ are to the lawful currency of Australia, references to BRL are to the lawful currency of Brazil, reference to NAD and N$ are to the lawful currency of Namibia, referencereferences to Tsh or TZS isare to the lawful currency of the United Republic of Tanzania and references to GHC, cedi or ¢Gh¢ are to the lawful currency of Ghana.
See “Item 3A.:3A: Selected financial data – Exchange rate information” for historical information regarding the US dollar/South African rand exchange rate. On 2 April 2014,18 March 2016, the interbank US dollar/South African rand exchange rate as reported by OANDA Corporation was R10.56/R15.24/$1.00.
Non-GAAP financial measures
In this annual report on Form 20-F, AngloGold Ashanti presents the financial items “total cash costs”, “total cash costs per ounce”, “total production costs”, “total production costs per ounce”, “all-in sustaining costs” and, “all-in sustaining costs per ounce”, “all-in costs” and “all-in costs per ounce”, which have been determined using industry guidelines and practices and are not IFRS measures. An investor should not consider these items in isolation or as alternatives to production costs, profit/(loss) applicable to equity shareholders, profit/(loss) before taxation, cash flows from operating activities or any other measure of financial performance presented in accordance with IFRS. The
While the Gold Institute provided definitions for the calculation of total cash costs and total production costs and during June 2013 the World Gold Council published a Guidance Note on “all-in sustaining costs” and “all-in costs” metrics. Themetrics, the calculation of total cash costs, total cash costs per ounce, total production costs, total production costs per ounce, all-in sustaining costs, all-in sustaining costs per ounce, all-in costs and all-in sustaining costs per ounce may vary significantly among gold mining companies, and by themselves do not necessarily provide a basis for comparison with other gold mining companies. See “Glossary“—Glossary of selected terms – terms–Financial terms – terms–Total cash costs”, “—Glossary of selected terms–Financial terms–Total production costs”, “ —Glossary of selected terms–Financial terms–All-in sustaining costs” and “—Glossary of selected terms–Financial terms–All-in costs”. Nevertheless, AngloGold Ashanti believes that total cash costs, total production costs, all-in sustaining costs and all-in costs in total and per ounce are useful indicators to investors and management as they provide:
an indication of profitability, efficiency and cash flows;
the trend in costs as the mining operations mature over time on a consistent basis; and
an internal benchmark of performance to allow for comparison against other mines, both within the AngloGold Ashanti group and at other gold mining companies.
A reconciliation of both cost of sales and total cash costs as included in the company’s audited financial statements to total cash costs, total production costs, all-in sustaining costs and all-in costs for each of the three years ended 31 December 2013, 2014 and 2015 is presented herein. See “Item 5: Operating and Financial Review and Prospects—Total all-in sustaining costs, all-in costs and total cash costs and – Totaltotal production costs and – All-in sustaining costs”.
Shares and shareholders
In this annual report on Form 20-F, references to ordinary shares, ordinary shareholders, equity shareholders and shareholders/members, should be read as common stock, common stockholders and stockholders, respectively, and vice versa.
CERTAIN FORWARD-LOOKING STATEMENTS
Certain statements contained in this document, other than statements of historical fact, including, without limitation, those concerning the economic outlook for the gold mining industry, expectations regarding gold prices, production, total cash costs, all-in sustaining costs, all-in costs, cost savings and other operating results, return on equity, productivity improvements, growth prospects and outlook of AngloGold Ashanti’s operations, individually or in the aggregate, including the achievement of project milestones, the commencement and completion of commercial operations of certain of AngloGold Ashanti’s exploration and production projects and the completion of acquisitions, and dispositions or joint venture transactions, AngloGold Ashanti’s liquidity and capital resources and capital expenditures and the outcome and consequence of any potential or pending litigation or regulatory proceedings or environmental, health and safety issues, are forward-looking statements regarding AngloGold Ashanti’s operations, economic performance and financial condition.
These forward-looking statements or forecasts involve known and unknown risks, uncertainties and other factors that may cause AngloGold Ashanti’s actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied in these forward-looking statements. Although AngloGold Ashanti believes that the expectations reflected in such forward-looking statements and forecasts are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of among other factors, changes in economic, social and political and market conditions, the success of business and operating initiatives, changes in the regulatory environment and other government actions, including environmental approvals, and requirements, fluctuations in gold prices and exchange rates, the outcome of pending or future litigation proceedings and business and operational risk management and other factors as described in “Item 3D.:3D: Risk factors” and elsewhere in this annual report. These factors are not necessarily all of the important factors that could cause AngloGold Ashanti’s actual results to differ materially from those expressed in any forward-looking statements. Other unknown or unpredictable factors could also have material adverse effects on future results. Consequently, readers are cautioned not to place undue reliance on forward-looking statements.
AngloGold Ashanti undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this annual report or to reflect the occurrence of unanticipated events, except to the extent required by applicable law. All subsequent written or oral forward-looking statements attributable to AngloGold Ashanti or any person acting on its behalf are qualified by the cautionary statements herein.
The following explanations are not intended as technical definitions but should assist the reader in understanding terminology used in this annual report. Unless expressly stated otherwise, all explanations are applicable to both underground and surface mining operations.
All injury frequency rate:The total number of injuries and fatalities that occurs per million hours worked.
BIF:Banded Ironstone Formation. A chemically formed iron-rich sedimentary rock.
By-products:Any products that emanate from the core process of producing gold, including silver, uranium and sulphuric acid.
Calc-silicate rock:A metamorphic rock consisting mainly of calcium-bearing silicates such as diopside and wollastonite, and formed by metamorphism of impure limestone or dolomite.
Carbon-in-leach (CIL):Gold is leached from a slurry of gold ore with cyanide in agitated tanks and adsorbed on to activated carbon granules at the same time (i.e. when cyanide is introduced in the leach tank, there is already activated carbon in the tank and there is no distinction between leach and adsorption stages). The carbon granules are separated from the slurry and treated in an elution circuit to remove the gold.
Carbon-in-pulp (CIP): Gold is leached conventionally from a slurry of gold ore with cyanide in agitated tanks. The leached slurry then passes into the CIP circuit where activated carbon granules are mixed with the slurry and gold is adsorbed on to the activated carbon. The gold-loaded carbon is separated from the slurry and treated in an elution circuit to remove the gold.
CLR: Carbon leader reef.
Comminution:Comminution is the crushing and grinding of ore to make gold available for treatment. (See also “Milling”).
Contained gold:The total gold content (tons multiplied by grade) of the material being described.
Cut-off grade (surface mines):The minimum grade at which a unit of ore will be mined to achieve the desired economic outcome.
Depletion:The decrease in the quantity of ore in a deposit or property resulting from extraction or production.
Development:The process of accessing an orebody through shafts and/or tunneling in underground mining operations.
Diorite:An igneous rock formed by the solidification of molten material (magma).
Doré:Impure alloy of gold and silver produced at a mine to be refined to a higher purity.
Electro-winning:A process of recovering gold from solution by means of electrolytic chemical reaction into a form that can be smelted easily into gold bars.
Elution:Recovery of the gold from the activated carbon into solution before zinc precipitation or electro-winning.
Feasibility study:A comprehensive technical and economic study of the selected development option for a mineral project that includes appropriately detailed assessments of applicable Modifying Factors together with any other relevant operational factors and detailed financial analysis that are necessary to demonstrate at the time of reporting that extraction is reasonably justified (economically mineable). The results of the study may reasonably serve as the basis for a final decision by a proponent or financial institution to proceed with, or finance, the development of the project. The confidence level of the study will be higher than that of a Pre-Feasibility Study (JORC 2012).
Flotation:Concentration of gold and gold-hosting minerals into a small mass by various techniques (e.g. collectors, frothers, agitation, air-flow) that collectively enhance the buoyancy of the target minerals, relative to unwanted gangue, for recovery into an over-flowing froth phase.
Gold Produced:Refined gold in a saleable form derived from the mining process.
Grade:The quantity of gold contained within a unit weight of gold-bearing material generally expressed in ounces per short ton of ore (oz/t), or grams per metric tonne (g/t).
Greenschist:A schistose metamorphic rock whose green colour is due to the presence of chlorite, epidote or actinolite.
Leaching:Dissolution of gold from crushed or milled material, including reclaimed slime, prior to adsorption on to activated carbon or direct zinc precipitation.
Life of mine (LOM):Number of years for which an operation is planning to mine and treat ore, and is taken from the current mine plan.
Metallurgical plant:A processing plant constructed to treat ore and extract gold.
Metallurgical recovery factor (MetRF): A measure of the efficiency in extracting gold from the ore deposit.
Milling:A process of reducing broken ore to a size at which concentrating can be undertaken. (See also “Comminution”).
Mine call factor:The ratio, expressed as a percentage, of the total quantity of recovered and unrecovered mineral product after processing with the amount estimated in the ore based on sampling. The ratio of contained gold delivered to the metallurgical plant divided by the estimated contained gold of ore mined based on sampling.
Mineral deposit:A mineral deposit is a concentration (or occurrence) of material of possible economic interest in or on the earth’s crust.
Mineral Resource: A concentration or occurrence of solid material of economic interest in or on the earth’s crust is such form, grade (or quality), and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade (or quality), continuity and other geological characteristics of a mineral resourceMineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral resourcesResources are sub-divided in order of increasing geological confidence, into inferred, indicatedInferred, Indicated or measuredMeasured categories (JORC, 2012).
Modifying factors:Factors:Modifying Factors’ are considerations used to convert Mineral Resources to Ore Reserves. These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors.
Ore Reserve:That part of a mineral deposit which could be economically and legally extracted or produced at the time of the Ore Reserve determination.
Ounce (oz) (troy):Used in imperial statistics. A kilogram is equal to 32.1507 ounces. A troy ounce is equal to 31.1035 grams.
Pay limit:The grade of a unit of ore at which the revenue from the recovered mineral content of the ore is equal to the sum of total cash costs, closure costs, Ore Reserve development and stay-in-business capital. This grade is expressed as anin-situ value in grams per tonne or ounces per short ton (before dilution and mineral losses).
Precipitate:The solid product formed when a change in solution chemical conditions results in conversion of some pre-dissolved ions into solid state.
Probable Ore Reserve:Ore Reserve for which quantity and grade are computed from information similar to that used for Proven Reserves, but the sites for inspection, sampling, and measurement are further apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for Proven Reserves, is high enough to assume continuity between points of observation.
Productivity:An expression of labour productivity based on the ratio of ounces of gold produced per month to the total number of employees in mining operations.
Project capital:Capital expenditure to either bring a new operation into production; to materially increase production capacity; or to materially extend the productive life of an asset.
Proven Ore Reserve:A ‘Proven Ore Reserve’ is the economically mineable part of a Measured Mineral Resource. A Proven Ore Reserve implies a high degree of confidence in the Modifying Factors.
Project capital:Capital expenditure to either bring a new operation into production; to materially increase production capacity; or to materially extend the productive life of an asset.
Recovered grade:The recovered mineral content per unit of ore treated.
Reef:A gold-bearing sedimentary horizon, normally a conglomerate band that may contain economic levels of gold.
Refining:The final purification process of a metal or mineral.
Rehabilitation:The process of reclaiming land disturbed by mining to allow an appropriate post-mining use. Rehabilitation standards are defined by country-specific laws, including but not limited to the South African Department of Mineral Resources, the US Bureau of Land Management, the US Forest Service, and the relevant Australian mining authorities, and address among other issues, ground and surface water, topsoil, final slope gradient, waste handling and re-vegetation issues.
Seismic event:A sudden inelastic deformation within a given volume of rock that radiates detectable seismic energy.
Shaft:A vertical or subvertical excavation used for accessing an underground mine; for transporting personnel, equipment and supplies; for hoisting ore and waste; for ventilation and utilities; and/or as an auxiliary exit.
Short ton: Used in imperial statistics. Equal to 2,000 pounds.
Skarn:A rock of complex mineralogical composition, formed by contact metamorphism and metasomatism of carbonate rocks.
Smelting:A pyro-metallurgical operation in which gold precipitate from electro-winning or zinc precipitation is further separated from impurities.
Stope:Underground excavation where the orebody is extracted.
Stoping:The process of excavating ore underground.
Stripping ratio: The ratio of waste tonnes to ore tonnes mined calculated as total tonnes mined less ore tonnes mined divided by ore tonnes mined.
Syngenetic:Formed contemporaneously with the deposition of the sediment.
Tailings:Finely ground rock of low residual value from which valuable minerals have been extracted.
Tailings dam (slimes dam):Tonnage:Dam facilities designed to store discarded tailings.Quantity of material measured in tonnes or tons.
Tonne:Used in metric statistics. Equal to 1,000 kilograms.
Tonnage:Quantity of material measured in tonnes or tons.
Waste:Material that contains insufficient mineralisation for consideration for future treatment and, as such, is discarded.
Yield:The amount of valuable mineral or metal recovered from each unit mass of ore expressed as ounces per short ton or grams per metric tonne.
Zinc precipitation:Zinc precipitation is the chemical reaction using zinc dust that converts gold in solution to a solid form for smelting into unrefined gold bars.
Financial terms and Non-GAAP metrics
All-in costs:All-in costs are all-in sustaining costs including additional non-sustaining costs which reflect the varying costs of producing gold over the life-cycle of a mine. Non-sustaining costs are those costs incurred at new operations and costs related to ‘major projects’ at existing operations where these projects will materially increase production. All-in costs per ounce is arrived at by dividing the dollar value of the sum of these cost metrics, by the ounces of gold sold.
All-in sustaining costs:All-inDuring June 2013 the World Gold Council (WGC), an industry body, published a Guidance Note on “all-in sustaining costs incorporatecosts” metric, which gold mining companies can use to supplement their overall non-GAAP disclosure. “All-in sustaining costs” is an extension of the existing “total cash cost” metric and incorporates all costs related to sustaining production. Inproduction and in particular all-in sustaining costs recogniserecognises the sustaining capital expendituresexpenditure associated with developing and maintaining gold mines. In addition, this metric includes the cost associated with developing and maintaining gold mines. In addition, this metric includes the cost associated with corporate office structures that support these operations, the community and rehabilitation costs attendant with responsible mining and any exploration and evaluation costcosts associated with sustaining current operations. All-in sustaining costs per ounce areis arrived at by dividing the dollar value of the sum of these cost metrics, by the ounces of gold sold.
Average number of employees:The monthly average number of production and non-production employees and contractors employed during the year, where contractors are defined as individuals who have entered into a fixed-term contract of employment with a group company or subsidiary. Employee numbers of joint ventures represents the group’s attributable share.
Capital expenditure:Total capital expenditure on tangible and intangible assets which includes stay-in-business and project capital.assets.
Effective tax rate:Current and deferred taxation charge for the year as a percentage of profit before taxation.
OANDA Corporation:An internet-based provider of foreign exchange (forex)forex trading and currency information services.
Rated bonds:The $700 million 5.375 percent bonds due 2020, $300 million 6.5 percent bonds due 2040 and the $750 million 5.125 percent bonds due 2022 and the $1.25 billion 8.50 percent bonds due 2020.2022.
Region:Defines the business segmentsoperational management divisions within AngloGold Ashanti Limited, namely South Africa, Continental Africa (The Democratic Republic of the Congo (DRC),(DRC, Ghana, Guinea, Mali Namibia and Tanzania), Australasia, and the Americas (Argentina, Brazil and United States of America).
STRATE:Related party:Parties are considered related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions.
Significant influence:The ability, directly or indirectly, to participate in, but not exercise control over, the financial and operating policy decision of an entity so as to obtain economic benefit from its activities.
Strate:The licensed Central Securities Depository (CSD) for the electronic settlement of financial instruments in South Africa.
Total cash costs:Total cash costs include site costs for all mining, processing and administration, reduced by contributions from by-products and are inclusive of royalties and production taxes. Amortisation,Depreciation, depletion and amortisation, rehabilitation, corporate administration, retrenchment,employee severance costs, capital and exploration costs are excluded. Total cash costs per ounce are the attributable total cash costs divided by the attributable ounces of gold produced.
Total production costs:Total cash costs plus depreciation, depletion and amortisation, employee severance costs, rehabilitation and other non-cash costs. Corporate administration and exploration costs are excluded. Total production costs per ounce are the attributable total production costs divided by the attributable ounces of gold produced.
Weighted average number of ordinary shares:The number of ordinary shares in issue at the beginning of the year, increased by shares issued during the year, weighted on a time basis for the period during which they have participated in the income of the group, and increased by share options that are virtually certain to be exercised.
$, US$ or dollar | United States dollars | |||||
ARS | Argentinean peso | |||||
A$ or AUD | Australian dollars | |||||
BRL | Brazilian real | |||||
C$ or CAD | Canadian dollars | |||||
€ or Euro | European | |||||
GHC, cedi or ¢ | Ghanaian cedi | |||||
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Tsh | Tanzanian | |||||
ZAR, R or rand | South African rands |
ADR | American Depositary Receipt | |
ADS | American Depositary Share | |
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AIFR | All injury frequency rate | |
ASX | Australian Securities Exchange | |
Au | Contained gold | |
BBSY | Bank Bill Swap Bid Rate | |
BEE | Black Economic Empowerment | |
bn | Billion | |
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CDI | Chess Depositary Interests | |
CHESS | Clearing House Electronic Settlement System | |
CLR | Carbon Leader Reef | |
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DMTNP | Domestic medium-term notes programme | |
DRC | Democratic Republic of the Congo | |
ERP | Enterprise resource planning | |
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G or g | Grams | |
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GhDS | Ghanaian Depositary Share | |
GhSE | Ghana Stock Exchange | |
IASB | International Accounting Standards Board | |
IFRS | International Financial Reporting Standards as issued by the IASB | |
JIBAR | Johannesburg Interbank Agreed Rate | |
JORC | Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves | |
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JSE | JSE Limited (Johannesburg Stock Exchange) | |
King III |
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Kg or kg | Kilograms | |
Km or km | Kilometres | |
Km2 | Squared kilometres | |
Koz | Thousand ounces | |
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LIBOR | London Interbank Offer Rate | |
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M or m | Metre or million, depending on the context | |
Moz | Million ounces | |
Mt | Million tonnes or tons | |
Mtpa | Million tonnes/tons per annum | |
NYSE | New York Stock Exchange | |
Oz or oz | Ounces (troy) | |
oz/t | Ounces per ton | |
oz/TEC | Ounces per total employee costed | |
SAMREC | South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves | |
SEC | United States Securities and Exchange Commission | |
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| |
T or t | Tons (short) or tonnes (metric) | |
Tpa or tpa | Tonnes/tons per annum | |
US/USA/United States | United States of America | |
US GAAP | U.S. Generally Accepted Accounting Principles | |
VCR | Ventersdorp Contact Reef |
Note:Rounding of figures in this report may result in computational discrepancies.
ITEM 1: IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
Not applicable.
ITEM 2: OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
3A. |
The selected financial information set forth below for the years ended and as at 31 December 2013, 20122015, 2014 and 20112013 has been derived from, and should be read in conjunction with, the IFRS financial statements included under Item 18 of this annual report. The selected financial information for the years ended and as at 31 December 20092012 and 20102011 has been derived from the IFRS financial statements not included in this annual report. Financial statements for the
The comparative years ended and as at 31 December 2012 and 2011 have been restated to reflect changesseparate continuing operations from discontinued operations in accounting policies.
The financial statements have been prepared under IFRS.accordance with IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations”, as a consequence of the disposal of the Cripple Creek & Victor operations in the United States.
Year ended 31 December Consolidated income statement Revenue Gold income Cost of sales Gain (loss) on non-hedge derivatives and other commodity contracts Gross profit (loss) Corporate administration, marketing and other expenses Exploration and evaluation costs Other operating expenses Special items Operating (loss) profit Dividends received Interest received Exchange gain Finance costs and unwinding of obligations Fair value adjustment on $1.25bn bonds Fair value adjustment on option component of convertible bonds Fair value adjustment on mandatory convertible bonds Share of associates and joint ventures’ (loss) profit (Loss) profit before taxation Taxation (Loss) profit for the year Allocated as follows Equity shareholders Non-controlling interests Basic (loss) earnings per ordinary share (cents) Diluted (loss) earnings per ordinary share (cents) Dividend per ordinary share (cents) 2013 2012 (1) 2011 (1) 2010 (2) 2009 (2) $ $ $ $ $ (in millions, except share and per share amounts) 5,708 6,632 6,925 5,514 3,916 5,497 6,353 6,570 5,334 3,768 (4,146 ) (3,964 ) (3,892 ) (3,550 ) (2,813 ) 94 (35 ) (1 ) (702 ) (1,533 ) 1,445 2,354 2,677 1,082 (578 ) (201 ) (291 ) (278 ) (220 ) (164 ) (255 ) (395 ) (279 ) (198 ) (150 ) (19 ) (47 ) (31 ) (20 ) (8 ) (3,410 ) (402 ) 163 (126 ) 691 (2,440 ) 1,219 2,252 518 (209 ) 5 7 - - - 39 43 52 43 54 14 8 2 3 112 (296 ) (231 ) (196 ) (166 ) (139 ) (58 ) - - - - 9 83 84 (1 ) (33 ) 356 162 104 (55 ) - (162 ) (30 ) 72 63 94 (2,533 ) 1,261 2,370 405 (121 ) 333 (346 ) (737 ) (276 ) (147 ) (2,200 ) 915 1,633 129 (268 ) (2,230 ) 897 1,587 76 (320 ) 30 18 46 53 52 (2,200 ) 915 1,633 129 (268 ) (568 ) 232 411 20 (89 ) (631 ) 177 355 20 (89 ) 10 56 34 18 13
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Year ended 31 December | ||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
Restated | Restated | Restated | Restated | |||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
(in millions, except share and per share amounts) | ||||||||||||||||||||
Consolidated income statement | ||||||||||||||||||||
Revenue | 4,174 | 5,110 | 5,383 | 6,222 | 6,503 | |||||||||||||||
Gold income | 4,015 | 4,952 | 5,172 | 5,943 | 6,148 | |||||||||||||||
Cost of sales | (3,294 | ) | (3,972 | ) | (3,947 | ) | (3,765 | ) | (3,700 | ) | ||||||||||
(Loss) gain on non-hedge derivatives and other commodity contracts | (7 | ) | 13 | 94 | (36 | ) | - | |||||||||||||
Gross profit | 714 | 993 | 1,319 | 2,142 | 2,448 | |||||||||||||||
Corporate administration, marketing and other expenses | (78 | ) | (92 | ) | (201 | ) | (288 | ) | (277 | ) | ||||||||||
Exploration and evaluation costs | (132 | ) | (142 | ) | (250 | ) | (390 | ) | (279 | ) | ||||||||||
Other operating expenses | (96 | ) | (28 | ) | (19 | ) | (47 | ) | (31 | ) | ||||||||||
Special items | (71 | ) | (260 | ) | (2,951 | ) | (402 | ) | 163 | |||||||||||
Operating profit (loss) | 337 | 471 | (2,102 | ) | 1,015 | 2,024 | ||||||||||||||
Dividends received | - | - | 5 | 7 | - | |||||||||||||||
Interest received | 28 | 24 | 39 | 43 | 52 | |||||||||||||||
Exchange (loss) gain | (17 | ) | (7 | ) | 14 | 8 | 2 | |||||||||||||
Finance costs and unwinding of obligations | (245 | ) | (276 | ) | (293 | ) | (228 | ) | (194 | ) | ||||||||||
Fair value adjustment on issued bonds | 66 | (17 | ) | 307 | 245 | 188 | ||||||||||||||
Share of associates and joint ventures’ profit (loss) | 88 | (25 | ) | (162 | ) | (30 | ) | 72 | ||||||||||||
Profit (loss) before taxation | 257 | 170 | (2,192 | ) | 1,060 | 2,144 | ||||||||||||||
Taxation | (211 | ) | (225 | ) | 237 | (285 | ) | (822 | ) | |||||||||||
Profit (loss) after taxation from continuing operations | 46 | (55 | ) | (1,955 | ) | 775 | 1,322 | |||||||||||||
Discontinued operations | ||||||||||||||||||||
(Loss) profit from discontinued operations | (116 | ) | 16 | (245 | ) | 140 | 311 | |||||||||||||
(Loss) profit for the year | (70 | ) | (39 | ) | (2,200 | ) | 915 | 1,633 | ||||||||||||
Allocated as follows | ||||||||||||||||||||
Equity shareholders | ||||||||||||||||||||
- Continuing operations | 31 | (74 | ) | (1,985 | ) | 757 | 1,276 | |||||||||||||
- Discontinued operations | (116 | ) | 16 | (245 | ) | 140 | 311 | |||||||||||||
Non-controlling interests | ||||||||||||||||||||
- Continuing operations | 15 | 19 | 30 | 18 | 46 | |||||||||||||||
(70 | ) | (39 | ) | (2,200 | ) | 915 | 1,633 | |||||||||||||
Basic (loss) earnings per ordinary share (cents) | (20 | ) | (14 | ) | (568 | ) | 232 | 411 | ||||||||||||
Earnings (loss) per ordinary share from continuing operations | 8 | (18 | ) | (506 | ) | 196 | 331 | |||||||||||||
(Loss) earnings per ordinary share from discontinued operations | (28 | ) | 4 | (62 | ) | 36 | 80 | |||||||||||||
Diluted (loss) earnings per ordinary share (cents) | (20 | ) | (14 | ) | (631 | ) | 177 | 355 | ||||||||||||
Earnings (loss) per ordinary share from continuing operations | 8 | (18 | ) | (571 | ) | 144 | 281 | |||||||||||||
(Loss) earnings per ordinary share from discontinued operations | (28 | ) | 4 | (62 | ) | 33 | 74 | |||||||||||||
Dividend per ordinary share (cents) | - | - | 10 | 56 | 34 |
Consolidated balance sheet data ASSETS Non-current assets Tangible assets Intangible assets Investments in associates and joint ventures Other investments Inventories Trade and other receivables Derivatives Deferred taxation Cash restricted for use Other non-current assets Current assets Other investments Inventories Trade and other receivables Derivatives Current portion of other non-current assets Cash restricted for use Cash and cash equivalents Non-current assets held for sale Total assets EQUITY AND LIABILITIES Share capital and premium Accumulated losses and other reserves Shareholders’ equity Non-controlling interests Total equity Non-current liabilities Borrowings Environmental rehabilitation and other provisions Provision for pension and post-retirement benefits Trade, other payables and deferred income Derivatives Deferred taxation Current liabilities Borrowings Trade, other payables and deferred income Bank overdraft Derivatives Taxation Non-current liabilities held for sale Total liabilities Total equity and liabilities Number of ordinary shares as adjusted to reflect changes in share capital Share capital (exclusive of long-term debt and redeemable preference shares) Net assets As at 31 December 2013 2012(1) 2011(1) 2010(2) 2009(2) $ $ $ $ $ (in millions, except share and per share amounts) 4,815 7,776 6,545 6,180 5,819 267 315 210 194 177 1,327 1,047 691 622 640 131 167 186 237 175 586 610 410 345 337 29 79 76 152 106 - - - 1 5 177 97 79 20 61 31 29 23 33 53 41 7 9 9 8 7,404 10,127 8,229 7,793 7,381 1 - - - - 1,053 1,213 998 890 686 369 472 354 247 191 - - - - 330 - - - 1 - 46 35 35 10 12 648 892 1,112 575 1100 2,117 2,612 2,499 1,723 2,319 153 - 21 16 87 2,270 2,612 2,520 1,739 2,406 9,674 12,739 10,749 9,532 9,787 7,006 6,742 6,689 6,627 5,805 (3,927 ) (1,269 ) (1,706 ) (2,638 ) (2,905 ) 3,079 5,473 4,983 3,989 2,900 28 21 137 124 130 3,107 5,494 5,120 4,113 3,030 3,633 2,724 2,456 2,569 654 963 1,238 782 589 451 152 221 195 191 159 4 10 14 17 14 - 10 93 176 176 579 1,084 1,148 900 753 5,331 5,287 4,688 4,442 2,207 258 859 32 135 1,277 820 979 751 705 582 20 - - - - - - - - 2,525 81 120 158 134 159 1,179 1,958 941 974 4,543 57 - - 3 7 1,236 1,958 941 977 4,550 6,567 7,245 5,629 5,419 6,757 9,674 12,739 10,749 9,532 9,787 402,628,406 383,320,962 382,242,343 381,204,080 362,240,669 16 16 16 16 16 3,107 5,494 5,120 4,113 3,030
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As at 31 December | ||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
(in millions, except share and per share amounts) | ||||||||||||||||||||
Consolidated balance sheet data | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Non-current assets | ||||||||||||||||||||
Tangible assets | 4,058 | 4,863 | 4,815 | 7,776 | 6,545 | |||||||||||||||
Intangible assets | 161 | 225 | 267 | 315 | 210 | |||||||||||||||
Investments in associates and joint ventures | 1,465 | 1,427 | 1,327 | 1,047 | 691 | |||||||||||||||
Other investments | 91 | 126 | 131 | 167 | 186 | |||||||||||||||
Inventories | 90 | 636 | 586 | 610 | 410 | |||||||||||||||
Trade, other receivables and other assets | 13 | 20 | 29 | 79 | 76 | |||||||||||||||
Deferred taxation | 1 | 127 | 177 | 97 | 79 | |||||||||||||||
Cash restricted for use | 37 | 36 | 31 | 29 | 23 | |||||||||||||||
Other non-current assets | 18 | 25 | 41 | 7 | 9 | |||||||||||||||
5,934 | 7,485 | 7,404 | 10,127 | 8,229 | ||||||||||||||||
Current assets | ||||||||||||||||||||
Other investments | 1 | - | 1 | - | - | |||||||||||||||
Inventories | 646 | 888 | 1,053 | 1,213 | 998 | |||||||||||||||
Trade, other receivables and other assets | 196 | 278 | 369 | 472 | 354 | |||||||||||||||
Cash restricted for use | 23 | 15 | 46 | 35 | 35 | |||||||||||||||
Cash and cash equivalents | 484 | 468 | 648 | 892 | 1,112 | |||||||||||||||
1,350 | 1,649 | 2,117 | 2,612 | 2,499 | ||||||||||||||||
Non-current assets held for sale | - | - | 153 | - | 21 | |||||||||||||||
1,350 | 1,649 | 2,270 | 2,612 | 2,520 | ||||||||||||||||
Total assets | 7,284 | 9,134 | 9,674 | 12,739 | 10,749 | |||||||||||||||
EQUITY AND LIABILITIES | ||||||||||||||||||||
Share capital and premium | 7,066 | 7,041 | 7,006 | 6,742 | 6,689 | |||||||||||||||
Accumulated losses and other reserves | (4,636 | ) | (4,196 | ) | (3,927 | ) | (1,269 | ) | (1,706 | ) | ||||||||||
Shareholders’ equity | 2,430 | 2,845 | 3,079 | 5,473 | 4,983 | |||||||||||||||
Non-controlling interests | 37 | 26 | 28 | 21 | 137 | |||||||||||||||
Total equity | 2,467 | 2,871 | 3,107 | 5,494 | 5,120 | |||||||||||||||
Non-current liabilities | ||||||||||||||||||||
Borrowings | 2,637 | 3,498 | 3,633 | 2,724 | 2,456 | |||||||||||||||
Environmental rehabilitation and other provisions | 847 | 1,052 | 963 | 1,238 | 782 | |||||||||||||||
Provision for pension and post-retirement benefits | 107 | 147 | 152 | 221 | 195 | |||||||||||||||
Trade, other payables and deferred income | 5 | 15 | 4 | 10 | 14 | |||||||||||||||
Derivatives | - | - | - | 10 | 93 | |||||||||||||||
Deferred taxation | 514 | 567 | 579 | 1,084 | 1,148 | |||||||||||||||
4,110 | 5,279 | 5,331 | 5,287 | 4,688 | ||||||||||||||||
Current liabilities | ||||||||||||||||||||
Borrowings | 100 | 223 | 258 | 859 | 32 | |||||||||||||||
Trade, other payables and deferred income | 516 | 695 | 820 | 979 | 751 | |||||||||||||||
Bank overdraft | - | - | 20 | - | - | |||||||||||||||
Taxation | 91 | 66 | 81 | 120 | 158 | |||||||||||||||
707 | 984 | 1,179 | 1,958 | 941 | ||||||||||||||||
Non-current liabilities held for sale | - | - | 57 | - | - | |||||||||||||||
707 | 984 | 1,236 | 1,958 | 941 | ||||||||||||||||
Total liabilities | 4,817 | 6,263 | 6,567 | 7,245 | 5,629 | |||||||||||||||
Total equity and liabilities | 7,284 | 9,134 | 9,674 | 12,739 | 10,749 | |||||||||||||||
Number of ordinary shares as adjusted to reflect changes in share capital | 405,265,315 | 404,010,360 | 402,628,406 | 383,320,962 | 382,242,343 | |||||||||||||||
Share capital (exclusive of long-term debt and redeemable preference shares) | 16 | 16 | 16 | 16 | 16 | |||||||||||||||
Net assets | 2,467 | 2,871 | 3,107 | 5,494 | 5,120 |
Annual dividends
The table below sets forth the amounts of interim, final and total dividends declared in respect of the past five years in cents per ordinary share.
Year ended 31 December(1) | 2013 | 2012 | 2011 | 2010 | 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||
South African cents per ordinary share | ||||||||||||||||||||||||||||||||||||||||
First quarter | 50 | 200 | 80 | 70 | 50 | - | - | 50 | 200 | 80 | ||||||||||||||||||||||||||||||
Second quarter | 50 | 100 | - | - | - | - | - | 50 | 100 | - | ||||||||||||||||||||||||||||||
Third quarter | - | 100 | 90 | 65 | 60 | - | - | - | 100 | 90 | ||||||||||||||||||||||||||||||
Fourth quarter | - | 50 | 90 | - | - | - | - | - | 50 | 90 | ||||||||||||||||||||||||||||||
Total | 100 | 450 | 260 | 135 | 110 | - | - | 100 | 450 | 260 | ||||||||||||||||||||||||||||||
US cents per ordinary share(2) | ||||||||||||||||||||||||||||||||||||||||
First quarter | 5 | 26 | 11 | 9 | 5 | - | - | 5 | 26 | 11 | ||||||||||||||||||||||||||||||
Second quarter | 5 | 12 | - | - | - | - | - | 5 | 12 | - | ||||||||||||||||||||||||||||||
Third quarter | - | 12 | 12 | 9 | 8 | - | - | - | 12 | 12 | ||||||||||||||||||||||||||||||
Fourth quarter | - | 6 | 11 | - | - | - | - | - | 6 | 11 | ||||||||||||||||||||||||||||||
Total | 10 | 56 | 34 | 18 | 13 | - | - | 10 | 56 | 34 |
(1) | During quarter three of 2011, the Company changed the frequency of dividend payments from half-yearly to quarterly. During 2013, the Company changed the frequency of dividend payments to be dependent upon the board’s ongoing assessment of AngloGold Ashanti’s earnings. |
(2) | Dividends for these periods were declared in South African cents. US dollar cents per share figures have been calculated based on exchange rates prevailing on each of the respective payment dates. |
For further information on the company’s policy on dividend distributions, see “Item 8A: Consolidated financial statementsFinancial Statements and other information – Other Information—Dividends”.
Exchange rate information
The following table sets forth, for the periods and dates indicated, certain information concerning US dollar/South African rand exchange rates expressed in rands per $1.00. On 2 April 2014,18 March 2016, the interbank rate between South African rands and US dollars as reported by OANDA Corporation was R10.56/15.24/$1.00.
Year ended 31 December(2) | High | Low | Year end | Average (1) | High | Low | Year end | Average (1) | ||||||||||||||||||||||||
2009 | 10.70 | 7.21 | 7.41 | 8.44 | ||||||||||||||||||||||||||||
2010 | 8.08 | 6.57 | 6.64 | 7.34 | ||||||||||||||||||||||||||||
2011 | 8.60 | 6.49 | 8.14 | 7.27 | 8.60 | 6.49 | 8.14 | 7.27 | ||||||||||||||||||||||||
2012 | 8.95 | 7.46 | 8.47 | 8.20 | 8.95 | 7.46 | 8.47 | 8.20 | ||||||||||||||||||||||||
2013 | 10.51 | 8.47 | 10.49 | 9.63 | 10.51 | 8.47 | 10.49 | 9.63 | ||||||||||||||||||||||||
2014(3) | 11.25 | 10.47 | 10.56 | 10.84 | ||||||||||||||||||||||||||||
2014 | 11.69 | 10.28 | 11.60 | 10.84 | ||||||||||||||||||||||||||||
2015 | 15.87 | 11.36 | 15.53 | 12.77 | ||||||||||||||||||||||||||||
2016(3) | 16.81 | 15.19 | 15.89 |
(1) | The average rate of exchange on the last business day of each month during the year. |
(2) | Based on the interbank rate as reported by OANDA Corporation. |
(3) | Through to |
Exchange rate information for the months of (1) | High | Low | ||||||
October 2013 | 10.09 | 9.76 | ||||||
November 2013 | 10.39 | 9.97 | ||||||
December 2013 | 10.51 | 10.16 | ||||||
January 2014 | 11.25 | 10.47 | ||||||
February 2014 | 11.19 | 10.76 | ||||||
March 2014 | 10.89 | 10.57 | ||||||
April 2014(2) | 10.57 | 10.56 |
Exchange rate information for the months of (1) | High | Low | ||||||
September 2015 | 14.02 | 13.27 | ||||||
October 2015 | 13.87 | 13.06 | ||||||
November 2015 | 14.40 | 13.77 | ||||||
December 2015 | 15.87 | 14.34 | ||||||
January 2016 | 16.81 | 15.45 | ||||||
February 2016 | 16.20 | 15.19 | ||||||
March 2016(2) | 15.97 | 15.20 |
(1) | Based on the interbank rate as reported by OANDA Corporation. |
(2) | Through to |
3B. | CAPITALISATION AND INDEBTEDNESS |
Not applicable.
3C. | REASONS FOR THE OFFER AND USE OF PROCEEDS |
Not applicable.
3D. | RISK FACTORS |
This section describes many of the risks that could affect AngloGold Ashanti. There may, however, be additional risks unknown to AngloGold Ashanti and other risks, currently believed to be immaterial, that could turn out to be material. Additional risks may arise or become material subsequent to the date of this document. These risks, either individually or simultaneously, could significantly affect the group’s business, financial results and the price of its securities.
Risks related to AngloGold Ashanti’s results of operations and financial condition as a result of factors that impact the gold mining industry generally.
Commodity market price fluctuations could adversely affect the profitability of operations.
AngloGold Ashanti’s revenues are primarily derived from the sale of gold and, to a lesser extent, uranium, silver and sulphuric acid. The company’s current policy is to sell its products at prevailing market prices and not to enter into price hedging arrangements. The market prices for these commodities fluctuate widely. These fluctuations are caused by numerous factors beyond the company’s control. For example, the market price of gold may change for a variety of reasons, including:
speculative positions taken by investors or traders in gold;
monetary policies announced or implemented by central banks, including the USU.S. Federal Reserve;
changes in the demand for gold as an investment or as a result of leasing arrangements;
changes in the demand for gold used in jewellery and for other industrial uses, including as a result of prevailing economic conditions;
changes in the supply of gold from production, divestment, scrap and hedging;
financial market expectations regarding the rate of inflation;
the strength of the USU.S. dollar (the currency in which the gold price trades internationally) relative to other currencies;
changes in interest rates;
actual or anticipated sales or purchases of gold by central banks and the International Monetary Fund;Fund (IMF);
gold hedging and de-hedging by gold producers;
global or regional political or economic events; and
the cost of gold production in major gold producing countries.
The market price of gold has been and continues to be significantly volatile. During 2013,2015, the gold price traded from a low of $1,189$1,045 per ounce to a high of $1,691$1,306 per ounce, having fallen steadily from a peak of $1,900 per ounce since September 2011. Between 1 January 2016 and 18 March 2016, the gold price traded between a low of $1,060 per ounce and a high of $1,283 per ounce. On 2 April 2014,18 March 2016 the afternoon fixing price for gold on the London Bullion Market was $1,292$1,255 per ounce. TheIn addition to protracted declines such as the one experienced in recent years, the price of gold is also often subject to sharp, short-term changes; forchanges. For example, during the three-day period from Friday, 12 April 2013, through to Monday, 15 April 2013, the price of gold droppedfell by $228 per ounce. WhileAdditionally, the overall supplyspot price of gold fell by more than four percent to $1,086 per ounce in overnight trading on 20 July 2015 after traders sold 57 tonnes of gold in Shanghai and demand for gold can affect its market price, the considerable size of historical mined (i.e., above ground) stocks of the metal means that these factors typically do not affect the gold price in the same manner or degree compared to other commodities. In addition, the shift in demand from physical gold to investment and speculative purposes may exacerbate the volatility of the gold price.
During 2012 and 2013, a correlation existed between the central banks’ policies andNew York. By taking the price of gold withbelow $1,100 per ounce, the July 2015 sell-off triggered a high volume of stop-loss orders that had been put in place by traders to automatically sell when the gold price reached a predetermined level. This caused the gold price to drop further. Any sharp or prolonged fluctuations in the price falling atof gold can have a material adverse impact on the prospectcompany’s profitability and financial condition.
Central banks’ policies can affect the price of gold. If gold is treated as a safe alternative investment during economic downturns, the price of gold may fall when central banks end of quantitative easing in some of the main economies.or increase interest rates. For example, on 19 June 2013, Chairman Ben Bernanke of the Federal Reserve announced that the Federal Reserve may begin reducing its quantitative easing programme in 2013. During the course of the following week, the price of gold fell to $1,180 per ounce, its lowest level in 34 months. Effecting anyannual lows when the Chairman of the U.S. Federal Reserve announced a reduction in quantitative easing in June 2013, the Federal Reserve’send of the quantitative easing programme or anyin October 2014 and an increase in interest rates in December 2015. Any future announcements or proposals by the U.S. Federal Reserve, or any of its board members or regional presidents relating to any such reduction,or other similar officials in other major economies may materially and adversely affect the price of gold and, as a result, ourAngloGold Ashanti’s financial condition and results of operations.
Whilst overall supply and demand typically do not affect the gold price in the same manner or to the same degree as other commodities due to the considerable size of historical mined stocks of gold, events that affect supply and demand may nonetheless have an impact. According to the World Gold Council, demand for gold is generally driven by four main sectors, namely jewellery, investment, central banks and technology. The market for gold bullion bar, AngloGold Ashanti’s primary product, is generally limited to bullion banks, the number of which has declined in recent years. Demand for gold is also largely impacted by trends in China and India, which account for the highest gold consumption worldwide. Demand for gold may be particularly affected by government policies in these countries. For example, according to the World Gold Council, gold demand in China fell 38 percent in 2014 compared to 2013 and demand for gold bars and coins fell by 50 percent due in part to the government’s anti-corruption programme, which put limited pressure on demand for gold ornaments and so-called “gift bars”. Demand from China continued to fall during the first half of 2015 due to an economic slowdown and financial market turbulence. Additionally, over the course of 2013, the Indian Finance Ministry increased gold import duties from two percent to 10 percent, which also dampened global demand. Such increases, and any similar import duty increases or other adverse policies in India, China or other large gold importing countries, could adversely affect demand for, and consequently prices of, gold.
Furthermore, the shift in demand from physical gold to gold-related investments and speculative instruments may exacerbate the volatility of the gold price. For example, the Finance Ministry in India announced an offering of sovereign gold bonds as an alternative to the purchase of physical gold in March 2015 and conducted a second offering in January 2016. Slower consumption of physical gold in India, resulting from a move toward gold-tracking investments or otherwise, may have an adverse impact on global demand for, and prices of, bullion.
A sustained period of significant gold price volatility may adversely affect the company’s ability to evaluate the feasibility of undertaking new capital projects or the continuity of existing operations, or to meet ourits operational targets or to make other long-term strategic decisions. Lower and more volatile gold prices, together with other factors, have led usAngloGold Ashanti to alter ourits expansion and development strategy and consider ways to align ourits asset portfolio to take account of such expectations and trends. As a result, the company may decide to curtail or temporarily or permanently shut down certain of its exploration and production operations, which may be difficult and costly to effect. A further sustained decrease in the price of gold such as the decrease experienced in 2013, could also have a material adverse effect on AngloGold Ashanti’s financial condition and results of operations, as it may be unable to quickly adjust its cost structure to reflect the reduced gold price environment. DuringMines with marginal headroom may be subject to decreases in value that are other than temporary, which may result in impairment losses. For example, during 2013, AngloGold Ashantithe company reviewed the carrying value of its mining assets (including ore stockpiles), goodwill and intangibles and, based on revised forecast gold prices, booked a charge of $3,245 million in relation to impairments, derecognition and revaluation of net realisable value of its mining assets (including ore stockpiles), goodwill and intangiblesintangibles. The market value of $3,245 million.gold inventory may be reduced and marginal stockpile and heap leach inventories may be written down to net realisable value or may not be processed further as it may not be economically viable at lower gold prices. In addition, AngloGold Ashanti is obliged to meet certain financial covenants under the terms of its borrowing facilities and its ability to continue to meet these covenants could be adversely affected by a further sustained decrease in the price of gold. The use of lower gold prices in reserve calculationsOre Reserve estimates andlife-of-mine life of mine plans could also result in material impairments of the company’s investment in mining properties or a reduction in its Ore ReserveReserves estimates and corresponding restatements of its Ore Reserves and increased amortisation, reclamation and closure charges.
The spot price of uranium has been volatile in past years. During 2013,2015, the price varied between a low of approximately $34 per pound and a high of $44$40 per pound. On 2 April 2014,18 March 2016 the spot price of uranium was $34$29 per pound. Uranium prices can be affected by several factors, including demand for nuclear reactors, uranium production shortfalls and restocking by utilities. Events like those surrounding the earthquake and tsunami that occurred in Japan in 2011 can also have a material impact on the price of and demand for uranium.
The price of silver has also experienced significant fluctuations. Fromfluctuations in past years. During 2015, the price varied from a high of $32$18.30 per ounce in January 2013, the price declined2015 to a low of $18$13.70 per ounce by June 2013. Byin December 2013,2015. On 18 March 2016, the price had increased to approximately $20of silver was $16 per ounce.
Factors affecting the price of silver include investor demand, physical demand for silver bars, industrial and retail off-take, and silver coin minting. On 2 April 2014, the price of silver was $20 per ounce.
Furthermore, government policies, including taxes and duties, may affect the demand for gold. For example, over the course of 2013, the Indian Finance Ministry increased gold import duties from 2% to 10% with the most recent increase to 10% occurring in August 2013. In addition, at least a fifth of gold imported into India must be exported. Such increases, and any similar import duty increases in India or other large gold importing countries, could adversely affect demand for, and consequently prices of, gold.
If revenue from sales of gold, uranium, silver or sulphuric acid falls below their respective cost of production for an extended period, AngloGold Ashanti may experience losses and curtail or suspend some or all of its exploration projects and existing operations or sell underperforming assets. Declining commodities prices may also force a reassessment of the feasibility of a particular project or projects, which could cause substantial delays or interrupt operations until the reassessment can be completed.
Foreign exchange fluctuations could have a material adverse effect on AngloGold Ashanti’s results of operations and financial condition.
Gold is principally a USU.S. dollar-priced commodity and most of the company’s revenues are realised in, or linked to, USU.S. dollars, whilst production costs are largely incurred in the local currency where the relevant operation is located. Given the company’s global operations and local foreign exchange regulations, some of its funds are held in local currencies, such as the South African rand, Ghanaian cedi, Brazilian real, Argentinean peso and the Australian dollar. The weakness of the U.S. dollar against local currencies results in higher production costs in U.S. dollar terms. Conversely, the strengthening of the dollar lowers local production costs in U.S. dollar terms.
From time to time, AngloGold Ashanti may implement currency hedges intended to reduce exposure to changes in the foreign currency exchange. Such hedging strategies may not however be successful, and any of AngloGold Ashanti’sAshanti unhedged exchange payments will continue to be subject to market fluctuations.
Exchange rate movements may have a material impact on AngloGold Ashanti’s operating results. For example, the company estimates that a 1one percent strengthening of all of the South African rand, Brazilian real, the Argentinean peso or the Australian dollar against the USU.S. dollar will, other factors remaining equal, result in an increase in total cash costs of approximately $6 per ounce or approximately 1 percent of the company’s total cash costs.
The profitability of operations and the cash flows generated by these operations are significantly affected by fluctuations in input production prices, many of which are linked to the prices of oil and steel.
Fuel, energy and consumables, including diesel, heavy fuel oil, chemical reagents, explosives, tyres, steel and mining equipment consumed in mining operations form a relatively large part of the operating costs and capital expenditure of any mining company.
AngloGold Ashanti has no influence over the cost of these consumables, many of which are linked to some degree to the price of oil and steel. Whilst, from time to time, AngloGold Ashanti may implement diesel hedges intended to reduce exposure to changes in the oil price, such hedging strategies may not always be successful, and any of the company’s unhedged diesel consumption will continue to be subject to market fluctuations.
The price of oil has been volatile, fluctuating between $98$35 and $120$66 per barrel of Brent Crude in 2013.2015 and between $55 and $115 per barrel of Brent Crude in 2014. As of 2 April 2014,18 March 2016, the price of oil was at $104$39 per barrel of Brent Crude. AngloGold Ashanti estimates that for each USU.S. dollar per barrel rise or fall in the oil price, other factors remaining equal, the total cash costs of all its operations increaseschange by approximately $0.75$0.80 per ounce. The cash costs of certain of the company’s mines, particularly Sadiola, Siguiri, Geita, Navachab, Cripple Creek & Victor, and Tropicana are most sensitive to changes in the price of oil. Even when fuel prices are in decline, expected savings may be partly offset by increases in governments’ fixed fuel levies or the introduction by governments of new levies. For example, in Tanzania, the government introduced a levy charged at 1.5% of the fuel price including Cost, Insurance, and freight, earmarked for railway infrastructure development effective 01 July 2015, which is expected to result in an additional cost impact of approximately $2.7 million per annum at AngloGold Ashanti’s Geita mine.
Furthermore, the price of steel has also been volatile. Steel is used in the manufacture of most forms of fixed and mobile mining equipment, which is a relatively large contributor to the operating costs and capital expenditure of a mine. For example, in 2015 the price of flat hot rolled coil (North American Domestic FOB) steel traded between $570$391 per tonne as of 31 December 2015 and $683$608 per tonne in 2013.as of 1 January 2015. On 2 April 2014,18 March 2016, the price of flat hot rolled coil (North American Domestic FOB) was $634$411 per tonne.
Fluctuations in oil and steel prices have a significant impact on operating costs and capital expenditure estimates and, in the absence of other economic fluctuations, could result in significant changes in the total expenditure estimates for new mining projects or render certain projects non-viable.non-viable, which could have a material adverse impact on the company’s results of operations and financial condition.
Energy cost increases and power fluctuations and stoppages could adversely impact the company’s results of operations and financial condition.
Increasing global demand for energy, concerns about nuclear power and the limited growth of new supply are impacting the price and supply of energy. The transition of emerging markets to higher energy consumption, actual and proposed taxation of carbon taxationemissions as well as unrest and potential conflict in the Middle East, amongamongst other factors, could result in increased demand or constrained supply and sharply escalating oil and energy prices.
AngloGold Ashanti’s mining operations are substantially dependent upon electrical power generated by local utilities or by power plants situated at some of its operations. The unreliability of these local sources of power can have a material effect on the company’s operations, as large amounts of power are required for ventilation, exploration, development, extraction, processing and other mining activities on the company’s properties.
In South Africa, the company’s operations are dependent on electricity supplied by onea parastatal agency of Eskom, a state-owned power generation company, Eskom.company. Although other competitors in the renewable energy market have now entered the power supply market, the power supply is still channelled through the Eskom infrastructure. Electricity is used for most of our business and safety-critical operations, that includeincluding cooling, hoisting and dewatering. Loss of power can therefore impact production and employee safety, and prolonged outages could lead to flooding of workings and ore sterilisation. In 2008, Eskom and the South African government declared a national emergency and warned that they could no longer guarantee the availability of electricity due to a national supply shortage which at the time was blamed on coal supply shortages, heavy rain fall and unplanned generation-set outages as a result of maintenance backlog and asset age. The entire country went into a programme of rolling blackouts and AngloGold Ashanti and other mining companies operating in South Africa were forced in late January until mid-March of 2008 to temporarily suspend mining operations at their mines.operations.
In addition, lightning or other damage to power stations can result in power interruptions at our operations. In this regard, AngloGold Ashanti’s two main operational sites in the West Wits region in South Africa had all main power interrupted between 13 March 2013 and 15 March 2013 after a fire caused by lightning damaged a transformer at a main regional substation.
The power supply to AngloGold Ashanti’s South African operations may be curtailed or interrupted again in the future. A warning of the “very high” risk of blackouts was re-issuedreissued at the start of 2011 and each year since. On 20 February 2014, Eskom declared a power emergency pursuant to its regulatory protocols to protect the national electricity grid. The power emergency was caused by the loss of additional generating units, reduced importsa 1,500MW reduction in imported electricity resulting from the failure of power lines from Coharaat the Cahora Bassa hydro scheme in Mozambique and the extensive use of emergency reserves. Eskom alerted key industrial customers, including AngloGold Ashanti, asking them to reduce their load by a minimum of 10 percent during critical periods.
While Since February 2014, AngloGold Ashanti has reduced its electricity consumption in South Africa by more than 10 percent measured in Gigawatt hour usage. In November 2014, Eskom reintroduced a national energy conservation programme is in place,schedule of rolling blackouts, or “load shedding”. Eskom cannot guarantee that there will be no power interruptions in the future and is again facingfaced very tight supply reserve margins in 2014, which can be expected2015. Management expects these interruptions to continue for many years to come. The national energy conservation programme implemented by Eskom has proven to be insufficient to address the energy capacity shortfall resulting from a large backlog of infrastructure and equipment maintenance.
Furthermore, the power supply to the company’s South African operations has been and may be load curtailed or interrupted again in the future for other reasons. For example, lightning or other damage to power stations can also result in power interruptions at least until the new coal-fired Medupi Power Station startscompany’s operations. In this regard, AngloGold Ashanti’s two main operational sites in the West Wits region in South Africa experienced power reductions between 13 March 2013 and 15 March 2013 after a fire caused severe damage to come on line, which is scheduled for the second half of 2014.500MVA transformers situated close to the main road passing through the West Rand area.
Eskom and the National Energy Regulator of South Africa (NERSA) recognise the need to increase electricity supply capacity, and a series of tariff increases and proposals have been enacted to assist in the funding of this expansion. In 2010, NERSA originally approved an increase of 24.8 percent for 2010, 25.8 percent for 2011, 25.9 percent for 2012, and 16.0 percent for 2013. The actual increase implemented for 2012 was lowered to 16.09 percent after government intervention. In February 2013, NERSA announced that Eskom would be allowed to increase electricity tariffs for the five yearfive-year period that began in April 2013 at an average yearly increase of 8 percent, which iswas half of that sought by the utility in its application. However, in October 2014, NERSA granted a 12.69 percent increase in electricity prices with effect from April 2015. In early 2016, NERSA heard a second application from Eskom to increase tariffs and an increase of 9.4% was granted, effective 1 April 2016. Instability in the industry is further exacerbated by uncertainty around the approval, cost and continuation of a nuclear energy programme and additional delays expected in connection with the completion of the Medupi and Ingula coal power stations.
There can be no assurance as to the existence or nature of any government intervention with respect to tariff increases in the future. Other difficulties at Eskom, relating to a large financial deficit, may result in additional tariff increases. As energy represents a large proportion of the company’s operating costs in South Africa, these increases have had, and any future increases will have, a materially adverse impact on the cash costs of its South African operations.
The company has also identified a risk of energy shortages in Argentina, Ghana and the DRC.Brazil. All the company’s mining operations in Ghana depend on hydroelectric power supplied by the state-controlled Volta River Authority (VRA), which is supplemented by thermal power from the Takoradi plant and a smaller unit at Tema. Ghana has a major power generation deficit that has resulted in significant load shedding across the country. For example, the company experienced extended power interruptions in Ghana in the first quarter of 2014, which limited access to higher grade areas. During periods of below average inflows from the Volta reservoir, electricity supplies from the Akosombo Dam, the VRA’s primary generation source, may be curtailed as occurred in 1998, 2006 and 2007. During periods of limited electricity availability, the grid is subject to disturbances and voltage fluctuations which can damage equipment. Recent disruptions in natural gas supply from Nigeria, via the West Africa Gas Pipeline, has led to some reduction in thermal generation capacity and the use of more expensive light crude oil which is putting upward pressure on power tariffs. In the past, the VRA has obtained power from neighbouring Côte d’Ivoire, which has intermittently experienced political instability and civil unrest. AngloGold Ashanti negotiates rates directly with the VRA and the VRA may not agree to a satisfactory rate during future rounds of negotiations.
In Brazil, severe water shortages from low rainfall have been experienced in 2014 and 2015 and are expected to adversely affect hydro-electrical power generation.
The company’s mining operations in Guinea, Tanzania and Mali are dependent on power supplied by outside contractors and supplies of fuel are delivered by road. Power supplies have been disrupted in the past, resulting in production losses due to equipment failure.
Increased energy prices could negatively impact operating costs and cash flow of AngloGold Ashanti’s operations.
Global economic conditions could adversely affect the profitability of operations.
AngloGold Ashanti’s operations and performance depend significantly on worldwide economic conditions. TheDespite signs of economic recovery in certain geographic markets, global financial markets have experienced considerable volatility from uncertainty surrounding the level and sustainability of the sovereign debt of various countries. Concerns remain regarding the sustainability of the European Monetary Union and its common currency, the Euro, in their current form, as well as the negative impacts of the downgrade of the sovereign credit rating of the Republic of South Africa in 2012, 2013, 2014 and 2013. 2015. A rating agency has warned that weak South African economic growth and government bailouts of state-owned companies could lead to a downgrade of the sovereign credit rating of the Republic of South Africa below investment grade in 2016.
These conditions and other disruptions to international credit markets and financial systems caused a loss of investor confidence and resulted in widening credit spreads, a lack of price transparency, increased credit losses and tighter credit conditions. AggressiveAlthough aggressive measures taken by governments and central banks have only recently corresponded with some signs ofresulted in a modest economic recovery andsince 2012, any such recovery is slow andmay remain limited in geographic scope. A significant risk however,also remains that these measures may not preventthis recovery could be slow or that the global economy from fallingcould quickly fall back into an even deeper and longer lasting recession or even a depression. Recently, the credit ratings of some of the largest South African banks were downgraded by a major credit rating agency. Any significant weakening of the South African banking system could have a negative effect on the overall South African economy.
Continued or worsening globalGlobal economic turmoil, mayor the expectation that economic turmoil could worsen, could have follow-on effects on AngloGold Ashanti’s business that include inflationary cost pressures, interest rate fluctuations and commodity market fluctuations. Other effects that could negatively affect AngloGold Ashanti’s’Ashanti’s financial results and results of operations include, for example:
the insolvency of key suppliers or contractors, which could result in contractual breaches and a supply chain breakdown;
the insolvency of one or more joint venture partners, which could result in contractual breaches and disruptions at the operations of the company’s joint ventures;
changes in other income and expense, which could vary materially from expectations, depending on gains or losses realised on the sale or exchange of financial instruments and impairment charges that may be incurred with respect to investments;
the inability of AngloGold Ashanti’s defined benefit pension fund may notto achieve expected returns on its investments, which could require the company to make substantial cash payments to fund any resulting deficits;
a reduction in the availability of credit, which may make it more difficult for the company to obtain financing for its operations and capital expenditures or make that financing more costly; and
exposure to the liquidity and insolvency risks of the company’s lenders and customers; and
Uncertaintyimpairments.
In addition to the potentially adverse impact on the profitability of the company’s operations, any deterioration in or increased uncertainty regarding global economic conditions may increase volatility or negatively impact the market value of ourAngloGold Ashanti’s securities.
Inflation may have a material adverse effect on results of operations.
Many of AngloGold Ashanti’s operations are located in countries that have experienced high rates of inflation during certain periods. It is possible that significantly higher future inflation in the countries in which the company operates may result in an increase in operational costs in local currencies (without a concurrent devaluation of the local currency of operations against the dollar or an increase in the dollar price of gold). This could have a material adverse effect on the company’s results of operations and financial condition. Significantly higher and sustained inflation, with a consequent increase in operational costs, could result in the rationalisation (including closure) of higher cost mines or projects.
Of particular concern is the inflation rate in Argentina which increased from an average of 9.78 percent in 2011 to 16.8 percent in 2015. According to IMF research, future inflation expectations average between 25.60 percent for 2016 and 21.1 percent for 2020. Inflation is estimated to peak at 29.1 percent at the end of 2016 and fall back to 18.8 percent by the end of 2017. However, non-official inflation of 32.6 percent in 2016 and 19.5 percent in 2017 is expected. Significant inflation like that predicted by the IMF in Argentina could have an adverse effect on the company’s profitability and financial condition.
Mining companies face many risks related to the development of mining projects that may adversely affect the company’s results of operations and profitability.
The profitabilityDevelopment of mining companies depends partly on the actual costs of developing and operating mines, which may differ significantly from estimates determined at the time the relevant project was approved following completion of its feasibility study. Development ofAngloGold Ashanti’s mining projects may also be subject to unexpected problems and delays that could increase the development and operating costs of the relevant project.
AngloGold Ashanti’s decision In addition, a decrease in budgets relating to develop a mineral property is typically based on the results of a feasibility study. Feasibility studies estimate the expectedcurrent or anticipated economic returns from the project. These estimates are based on assumptions regarding:
future prices of gold, uranium, silvermedium-term exploration and other metals;
future currency exchange rates;
tonnage, gradesdevelopment could increase its development 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, tyres and steel, and also by credits from by-products, such as silver and uranium. They could also fluctuate considerably as a result of changes in the prices of mining equipment used in the construction and operation of mining projects.long-term.
There are a number of uncertainties inherent in the development and construction of a new mine or the extension of an existing mine. In addition to those discussed above, theseThese 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 under national and municipal laws 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, third-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 commencement of production.
For example, AngloGold Ashanti may prove unable to successfully develop the La Colosa and Gramalote projects and the Nuevo Chaquiro deposit that is part of the Quebradona project in Colombia, as well as other potential exploration sites due to difficulties that could arise in relation to, for example, social and community opposition, litigation and governmental regulatory or administrative proceedings, ore body grades, definition of adequate reservesOre Reserves and resources,Mineral Resources, and the time taken to prove project feasibility that could result in the expiry of 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 without proper permits and was 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 a near-by community, as well as, local and regional government voted in a non-binding referendum to prevent certain mining activities in the Piedras 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 or related activities in that area.Refer “Item 8A: Legal Proceedings – Colombia”.
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 anticipated or may be loss-making. The company’s operating results and financial condition are directly related to the success of its project developments. A failure in 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 nature. 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 it 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. Such activities often require substantial expenditure on exploration drilling to establish the presence, extent and grade (metal content) of mineralised 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 mineralisation is discovered, it may take several years to determine whether an adequate Ore 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 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.
These estimates depend on assumptions made on available data. Ore Reserve estimates are not precise calculations and depend on the interpretation of limited information on the location, shape and continuity of the mineral occurrence and on available sampling results. Further exploration and feasibility studies can result in new data becoming available that may change previous Ore Reserve estimates and impact the technical and economic viability of production from the project. Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reservesOre Reserves resulting in revisions to previous Ore Reserve estimates. These revisions could impact depreciation and amortisation rates, asset carrying amounts and/or provisions for closure, restoration and environmental rehabilitation costs.
AngloGold Ashanti undertakes annual revisions to its Ore Reserve estimates based upon asset sales and acquisitions, 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 Ore Reserve estimates, which could adversely affect 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 withDue to a declining rate of discovery of new gold Ore Reserve in recent years, has resulted in the accelerated depletion of the existing Ore Reserve 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 Reserve, development properties or 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 the 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 Reserve.
As a result of these uncertainties and declining grades, the company’s exploration and acquisitions by the company may not result in the expansion or replacement of current production or the maintenance of its existing Ore Reserve net of production or an increase in Ore Reserve. AngloGold Ashanti’s results of operations and financial condition are directly related to the success of its exploration and acquisition efforts and the ability to replace or increase the existing Ore Reserve.Reserve as it is depleted. If the company is not able to maintain or increase its Ore Reserve, its results of operations as well as its financial condition and prospects could be adversely affected.
Mining companies face many risks related to their 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,accidents or incidents during exploration, production or transportation resulting in injury, loss of life or damage to equipment;equipment or infrastructure;
air, 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;
changes to legal and regulatory restrictions and changes to such restrictions;requirements;
safety-related stoppages;
gold bullion or concentrate 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.
Any of these events could, individually or in the aggregate, have a material adverse effect on the company’s results of operations and financial condition.
Seismic activity is of particular concern in underground mining operations, particularly in South Africa due to the extent and extreme depth of mining, and also in Australia and Brazil due to the depth of mining and residual tectonic stresses. Despite modifications to mine layouts and support technology, as well as other technological improvements employed with a view to minimising the incidence and impact of seismic activity, seismic events have caused death and injury to employees and contractors and seismic activity may do so again in the future, and have in the past, and may again result, in concomitant safety-related stoppages.
Seismic activity may also cause a loss of mining equipment, damage to or destruction of mineral properties or production facilities, monetary losses, environmental damagedamages and potential legal liabilities. As a result, these events may have a material adverse effect on AngloGold Ashanti’s results of operations and financial condition. For example, in 2015, seismicity in South Africa caused fall-of-ground incidents that led to fatalities, and operations were constrained at Mponeng in the West Wits while a de-risk plan was implemented to address seismicity issues. In August 2014, mining operations at the Great Noligwa and Moab Khotsong mines were suspended following a magnitude 5.3 earthquake. Operations at Mine Waste Solutions were also suspended and the Kopanang mine was taken offline for a limited time as a safety precaution. In early 2011, mining of the Ventersdorp Contact Reef shaft pillar at Tau Tona was suspended following a significant seismic event. Newevent and new equipment had to be purchased andpurchased. In all cases, the shutdownshutdowns contributed to the decline in the operational output of the mineapplicable mines as compared to the previous year.
In the past, floods have also disrupted the operations of some of the company’s mines. For example, unprecedented heavy rains in February and March 2011 in Australia flooded the Sunrise Dam Gold Mine and forced a temporary shutdown of operations. The flood event impacted underground production for approximately four months and open pit production for approximately six months. Despite the shutdown, full costs were incurred as the mining contractors worked on remedial
activities to repair damage and rehabilitate flooded areas. The considerable remedial work required adversely impacted cash costs per ounce and the impact of the flood event and the pit wall failure together significantly reduced planned production at the plant.
Any seismic, flood or other similar events that occur in the future could have a material adverse effect on the company’s results of operations and financial condition.
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-operationcooperation 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.assets, which could have a material adverse effect on its financial condition.
Mining companies are subject to extensive health and safety laws and regulations.
GoldAngloGold Ashanti’s gold mining operations are subject to extensive health and safety laws and regulations in every jurisdiction they operate in.in which it operates. These laws and regulations are, along with international and industry standards, designed to protect and improve the safety and health of employees and require the company to undertake and fund extensive compliance measures.
From time to time, new or updated health and safety laws, regulations and standards are introduced and may be more stringent than those to which AngloGold Ashanti is currently subject. Should compliance with these 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 failure to comply with applicable regulations, the company’s results of operations and financial condition could be adversely affected. Furthermore, AngloGold Ashanti continues to implement its enhanced safety programme, which could result in additional costs for the company.
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. Certain of the company’s operations have been temporarily suspended for safety reasons in the past. In South Africa, in particular, so-called ‘Section“Section 54 safety stoppages’stoppages” have become a significant issue. In 2013, fiftyissue as an enforcement mechanism used by the Department of Mineral Resources Mining Inspectorate whose inspectors routinely issue such notices. For example, in 2015, 81 notices were issued that had a material adverse impact on production at thesethe company’s mines. While in 2013, partial mine stoppages rather than full mine stoppages were applied, in previous years, the Inspector of Mines ordered the shutdown of entire mines in cases of relatively minor violations, which had a material impact on production at these mines. In particular, the Inspector issued Kopanang eleven Section 54 notices during 2011. Each notice resulted in Kopanang suspending operations either fully or partially in order to comply with the inspector’s recommendations on safety. Safety-related stoppages resulted in the estimated direct loss of 72,900, 72,40032,800, 47,100 and 32,80078,887 ounces of gold production from the South AfricaAfrican region operations during 2011, 20122013, 2014 and 2013,2015 respectively.
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 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 operate in a sustainable manner and to provide benefits to affected communities. Failure to comply with these requirements can result in legal suits, additional operational costs to address violations or liabilities, investor divestment and loss of ‘social“social licence to operate’operate”, and could adversely impact mining companies’ financial condition.
As a result of public concern about the perceived ill effects of economic 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 whilewhilst they seek a satisfactory return on investment for shareholders, human rights are respected and other social partners, including employees, host communities 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 enhanced usage and scale of social media and other web-based tools to publish, share and discuss user-generated content further increases the potential spread and force of public scrutiny. The potential consequences of these pressures and the adverse publicity in cases where companies are believed not to be creating sufficient social and economic benefit may result in additional operating costs to address actual or perceived shortcomings, reputational damage, active community opposition, allegations of human rights abuses, legal suits and investor withdrawal.
Existing and proposed mining operations are often located at or near existing towns and villages, natural water courses and other infrastructure. As the impacts of dust generation, waste storage, water pollution or shortage, in particular, may be immediate and directly adverse to those communities, poor environmental management practices, or adverse changes in the supply or quality of water can result in community protest, regulatory sanctions or ultimately in the withdrawal of community and government support for company operations. For example, opposition to mining activity in the Tolima province of Colombia, which hosts the La Colosa deposit, has centeredcentred on the perception that large-scale mining activity will have a detrimental impact on the region’s river systems.
Mining operations must be designed to minimise their impact on such communities and the environment, either by changing mining plans to avoid such impact, by modifying operations or by relocating the affected people to an agreed location. Responsive measures may also include the full restoration of livelihoods of those impacted. In addition, AngloGold Ashanti is obliged to comply with the terms and conditions of all the mining rights it holds in South Africa.holds. In this regard the Social and Labour plan provisions of ourits mining rights in South Africa 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.(LED) programmes. 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 be 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 air pollution or surface and ground watergroundwater quality, amongamongst other issues, in the area surrounding the company’s Obuasi and Iduapriem mines in Ghana, including potential impacts to local rivers and wells used for water from heavy metals, arsenic and cyanide as well as sediment and mine rock waste.
Disputes with surrounding communities may also affect mining operations, particularly where they result in restrictions of access to supplies and to mining operations. The miners’ access to land may be subject to the rights or asserted rights of various community stakeholders, including indigenous people. Access to land and land use is of critical importance to the company for exploration and mining, as well as for ancillary infrastructure. In some cases, AngloGold Ashanti has had difficulty gaining access to new land because of perceived poor community compensation practices. For example, compensation remains a significant area of concern in Siguiri in Guinea. In 2011, a violent community protest interrupted operations for 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 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 could have an adverse impact on 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, in addition to international standards. These regulations and standards establish limits and conditions on a miner’s ability to conduct its operations and govern, amongamongst 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. AngloGold Ashanti could incur fines, penalties and other sanctions, clean-up costs and third-party claims for personal injury or property damage, suffer reputational damage, or be required to install costly pollution control equipment or to modify or suspend operations, as a result of actual or alleged violations of environmental laws and regulations or the terms of AngloGold Ashanti’s permits. For example, the Ghana Environmental Protection Agency (“Ghana EPA”)(Ghana EPA) permit for AngloGold Ashanti’s operations at Obuasi expired on 31 March 2014. AngloGold Ashanti filed its application for permit renewal in a timely fashion,September 2013, six months prior to the expiry date, as required by law, by submitting an Environment Management Plan (EMP), but the Ghana EPA hasdid not yet issuedissue a renewal permit.new permit before the expiry date, citing uncertainties about the future of the Obuasi operation. AngloGold Ashanti ishas been in communication with the Ghana EPA regarding this issue. Concurrently, as a result of the timingcomplex challenges faced by the Obuasi mine, the company has adopted a new approach to securing the long term future of the mine. As part of this effort, on 18 July 2014 it submitted an Amendment to Programme of Mining Operations (APMO), which details technical, environmental, financial and social details around the transition of its processingObuasi operation, to the Government of Ghana and key regulators, that was approved subject to certain conditions. An amended EMP to supersede the one submitted in September 2013 was submitted at the same time to the Ghana EPA but no response has as yet been received. The company can give no assurance that the EMP will be approved in the form submitted or at all.
In addition, if AngloGold Ashanti fails to demonstrate or realise its business case for the redevelopment of the Obuasi operation, including because the company is unable to finalise a joint venture or other agreement with a partner to make the substantial investments necessary for redevelopment, to obtain the required consents, approvals or agreements for continued operation or to reverse deteriorating security conditions following the withdrawal of state security protection in early 2016, AngloGold Ashanti may be forced to withdraw from the Obuasi mine on a long-term or permanent basis. See “—Illegal and artisanal mining occurs on AngloGold Ashanti’s properties, which can disrupt the company’s business and expose the company to liability.” Closure of the mine could trigger or accelerate obligations, including the conduct of environmental rehabilitation activities and/or to address historical impacts on environmental quality in the area surrounding the mine. Costs incurred by the company in excess of AngloGold Ashanti’s application and the scope and terms of any renewal permit, specifically as this matter relates toexisting provisions for such matters could have a material adverse impact on AngloGold Ashanti’s considerationresults of potential rationalisation or other plans for the mine, as well as the Obuasi operation’s continued maintenance of the environmental bond for future rehabilitation activities at the siteoperations and on-going obligations with respect to water quality management and treatment or disposal of dust piles.financial condition.
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 AshantiAshanti’s operations and other companies’ operations could result in the tightening of regulatory requirements and restrictions onapplicable to AngloGold Ashanti’s 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,EPA, constructed an interim tailings storage facility for tailings deposition for a year whilewhilst 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 the government and various 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”“Item 8A: Legal Proceedings”.
Environmental laws and regulations are continually changing and are generally becoming more 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 to estimate liabilities, standards or operating procedures, more stringent emission or pollution thresholds or controls, or the occurrence of unanticipated conditions, may require operations to be suspended or permanently closed, and could increase AngloGold Ashanti’s expenses and provisions. These expenses and provisions could adversely affect the company’s results of operations and financial condition.
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, amongamongst 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 ourAngloGold Ashanti’s operations could lead to, amongamongst 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 impacted areas. Estimates of the total ultimate closure, reclamation 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, are 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. For example, in South Africa, regulations that came into effect in 2014 require mining companies to make financial provisions for rehabilitation for at least 10 years. Such provisions may need to remain in place notwithstanding the issuance of a closure certificate for a particular mine. The costs required to comply with these obligations which couldand any similar ones enacted in other jurisdictions may have an adverse impact on AngloGold Ashanti’sthe company’s financial condition.
AngloGoldAnglogold Ashanti’s discounted closure liability was $728provisions for decommissioning and for restoration (excluding joint ventures) totalled $851 million as at 31 December 2013, compared with $841in 2014 and $683 million as at 31 December 2012. The changes were a consequencein 2015 (following the sale 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.CC&V). Costs associated with rehabilitating land disturbed by mining processes and addressing environmental, health and community issues are estimated and financial provision made based upon current available information. Estimates notably relate to discount rates, which may vary due to changes in global economic assumptions, and mine plans, which may change in line with variations in cash flows, designs of tailings storage facilities and methodologies used to compute liabilities (including as a result of a request from environmental regulatory authorities).
Estimates may, however, be insufficient and further costs may be identified at any 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. Further, sudden changes in a life of mine plan or the accelerated closure of a mine may give rise to the recognition of liabilities that are not anticipated.
Compliance with emerging climate change regulations could result in significant costs and climate change may present physical risks to a mining company’s operations.
Greenhouse gases (GHGs) are emitted directly by AngloGold Ashanti’s operations, as well as by external utilities from which AngloGold Ashanti purchases electricity. Currently, aA number of international and national measures to address or limit GHG emissions, including the 2007 Bali Action Plan and the Durban Platform,2009 Copenhagen Accord, which included a non-binding commitment to reduce GHG emissions, are in various phases of discussion or implementation in the countries in which the company operates. In particular,As a result of commitments made at the UN climate conference in Durban, Platform commits all partiesSouth Africa in December 2011, certain members of the international community negotiated a treaty at the December 2015 Conference of Parties in Paris. The Paris Agreement will require developed countries to set targets for emissions reductions if it is ratified prior to April 2017 by at least 55 countries that collectively produce more than half of the conference to develop a global mitigation regime which could take effect in 2020, withworld’s GHG emissions and is subsequently adopted by those individual countries within their respective national or federal law. Additional measures addressing GHG emissions may be implemented at the specific terms of that legally binding accord, including individual targets, to be finalised by 2015.national or international levels These, or future, measures could require AngloGold Ashanti to reduce its direct GHG emissions or energy use or to incur significant costs for GHG emissions permits or taxes or have these costs or taxes passed on by electricity utilities which supply the company’s operations. AngloGold Ashanti also could incur significant costs associated with capital equipment, GHG monitoring and reporting and other obligations to comply with applicable requirements. For example, in 2012, the Australian Government introduced a carbon tax on GHG emissions; the new
government, elected in 2013, has however 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. There can be no assurance that Australia’s carbon tax will be repealed.
In South Africa, a draft Carbon Tax Bill was published in November 2015. However, in February 2013,2016, following a consultation process, it was announced that the South African Minister of Finance announced the intention to introduce a carbon tax in 2016.draft bill would be revised. Other countries, including Brazil and the United States, have passed or are considering GHG trading or tax schemes, and/or other regulation of GHG emissions, although the precise impact on AngloGold Ashanti’s operations cannot yet be determined.
In addition, AngloGold Ashanti’s operations could be exposed to a number of physical risks from climate change, such as changes in rainfall rates, rising sea levels, reduced water availability, higher temperatures and extreme weather events. Events or conditions such as flooding or inadequate water supplies could disrupt mining and transport operations, mineral processing and rehabilitation efforts, create resource shortages or damage the company’s property or equipment and 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 around its mines, such as an increased risk of food insecurity, water scarcity and prevalence of disease.disease, all of which could have a material adverse effect on the company’s results of operations and financial condition.
Compliance with ‘conflict minerals’“conflict minerals” and ‘responsible gold’“responsible gold” legislation and standards could result in significant costs.
More stringentStringent standards relating to ‘conflict minerals’“conflict minerals” and ‘responsible’“responsible” gold that include the: USthe U.S. Dodd-Frank Act;Act, European Legislative proposal for conflict minerals;self-certification for importers of gold, Organisation for Economic Cooperation and Development Due Diligence Guidelines for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas;Areas, World Gold Council Conflict Free Gold Standard;Standard and London Bullion Market Association Responsible Gold Guidance have been introduced.
Any such legislation and standards may result in significant costs to ensure and demonstrate compliance (particularly where standards change rapidly or lack certainty due to court challenges), and difficulties inmay complicate the sale of gold emanating from certain areas. The complexities of the gold supply chain, especially as they relate to ‘scrap’“scrap” or recycled gold, and the fragmented and often unregulated supply of artisanal and small-scale mined gold are such that there may be significant uncertainties at each stage in the chain as to the provenance of the gold. As a result of the uncertainties in the process, the costs of due diligence and audit, or the reputational risks of defining their product or a constituent part as containing a ‘conflict mineral’ would“conflict mineral” may be too burdensome for the company’s customers. Accordingly, manufacturers may decide to switch supply sources or to substitute gold with other minerals not covered by the initiatives. This could have a material negative impact on the gold industry, including on AngloGold Ashanti’s financial results.
Mining operations and projects are vulnerable to supply chain disruption with 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.plant, as well as transportation delays. Import restrictions, such as those introducedimposed by the Argentine government infrom 2011 to 2015, 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 also experienced increased delivery times for these items. Shortages have resulted in unanticipated price increases and production delays and shortfalls, resulting in a rise in both operating costs and in the capital expenditure necessary to maintain and develop mining operations.
Individually, AngloGold Ashanti and other gold mining companies have limited influence over manufacturers and suppliers of these items. In certain cases there are a limited number of suppliers for certain strategic spares, critical consumables, mining equipment or metallurgical plant who command superior bargaining power relative to the company. The company could at times face limited supply or increased lead time in the delivery of such items. For example, during 2012, supply of caustic soda was delayed in the Continental Africa Region. In addition, the unreliability of oxygen and lime supply similarly affected production at the Vaal River and West Wits surface operations in South Africa throughout 2011 and poor availability of drill rigs, heavy machinery and fleet equipment hampered underground drilling and overall operational performance at the Serra Grande mine in Brazil in 2011.
The company’s procurement policy is to source mining and processing equipment and consumables from suppliers that meet its corporate values and ethical standards although risk remainsbut risks remain around the management of ethical supply chains. In certain locations, where a limited number of suppliers meet these standards, additional strain is placed on the supply chain, thereby increasing the cost of supply and delivery times.
Furthermore, supply chains and rates 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 2012 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 stock of spares and 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 might have to suspend some of its operations and its results of operations and financial condition could be adversely impacted.
The Siguiri mine was impacted as a result of the Ebola virus outbreak of 2014 in Western Africa, where certain crisis management measures were implemented. Whilst no employees have been infected and operations have continued despite the outbreak, nine people in the village at Siguiri have been infected since the outbreak started. These cases were detected by authorities and contained through a quarantine programme. In addition to an extensive education campaign, the mine conducted daily screenings at its entrances, including a daily questionnaire to check the status of staff and family members. Nevertheless, crisis management measures may be insufficient to contain current or future outbreaks. Furthermore, AngloGold Ashanti cannot guarantee that the supply chain and operations will not be adversely affected by the Ebola outbreak and that there will be no knock-on effects such as severe food shortages and social impact. Export restrictions could similarly adversely impact the company’s financial condition and results of operations.
Concerns about the integrity or reliability of the London Bullion Market Association (LBMA) Gold Price Benchmark could adversely affect investor interest in gold and confidence in the gold market
Historically, the gold market relied on prices and trades made relative to a benchmark known as the London Gold Fix (Fix), set by a group of five fixing banks that match buyers and sell orders. Following a series of allegations regarding the possible manipulation of the Fix by fixing banks, U.S., German and United Kingdom regulators undertook a review of the fixing process. While the US Commodity Futures Trading Commission and the German BaFin dismissed allegations of manipulation in 2013 and 2015, respectively, in 2014 Deutsche Bank withdrew from the fixing panels and the UK Financial Conduct Authority (FCA) fined one of the fixing banks. The FCA identified systems and control failures and conflicts of interest in relation to gold fixing over the nine years to 2013 and one instance of gold price manipulation in 2012. Separately, several lawsuits have been filed against fixing banks alleging that they have colluded to manipulate the gold benchmark price, including class actions instituted in the United States in 2014 and Canada in 2015.
Subsequent to this, the London Gold Fix was replaced by the LBMA Gold Price Benchmark in 2015 which is run and managed by the Intercontinental Exchange (ICE). ICE is completely independent of the gold market as it does not conduct any trading of gold.
Whilst AngloGold had no role in the operation of the Fix during the period under review and has no responsibility for the conduct of the market makers in the gold market, the gold market could still be affected if the integrity of the Gold Price Benchmark is undermined as a result of ongoing lawsuits, resulting in reduced demand for the company’s gold, greater volatility in gold prices and less liquidity in the gold market. Furthermore, in 2015 AngloGold Ashanti joined the new oversight committee for the LBMA Gold Price Benchmark which is now regulated by the FCA. If further allegations are made against the Gold Price Benchmark in future, AngloGold could be implicated more directly, which may have an adverse effect on its reputation.
Diversity in interpretation and application of accounting literature in the mining industry may impact reported financial results.
The mining industry has limited industry-specific accounting literature. As a result, there is diverse interpretation and application of accounting literature on mining specificmining-specific issues. AngloGold Ashanti, for example, capitalises drilling and costs related to defining and delineating a residual mineral deposit that has not been classified as a ‘Proven“Proven and Probable Reserve’Ore 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 ourAngloGold Ashanti’s reported financial results, and adversely affect ourits 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.laws and an increased focus on the actions of mining companies. Although AngloGold Ashanti has a compliance programmeprogram in place designed to reduce the likelihood of violations of such laws, any violation could result in significant criminal or civil sanctions. Conversely, in certain circumstances, strict compliance with anti-bribery laws may conflict with certain local customs and practices. Since AngloGold Ashantithe company 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 or customary practices.
AngloGold Ashanti’s Code of Business Principles and Ethics amongand Policy on Anti-Bribery and Anti-Corruption, amongst other policies, standards and guidance, and training thereon may not prevent instances of unethical or unlawful behaviour, including bribery or corruption, norcorruption. They also may not guarantee compliance with legal and regulatory requirements and may fail to enable management to detect breaches may not be detected by management.thereof.
Sanctions for failure by the company or others acting on its behalf to comply with these laws, regulations, standards and contractual obligations could include fines, penalties, imprisonment of officers, litigation, and loss of operating licences or permits, suspensions of operations and negative effects on AngloGold Ashanti’s reported financial results and may damage the company’sits 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 processviolations of data protection laws may adversely impact business activities.AngloGold Ashanti’s business.
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:include malicious software;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 AshantiAshanti’s 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.
The interpretation and application of consumer and data protection laws in South Africa, the United States and elsewhere are uncertain and evolving. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with AngloGold Ashanti’s data practices. Complying with these various laws is difficult and could cause the company to incur substantial costs or require it to change its business practices in a manner adverse to its business.
Risks related to AngloGold Ashanti’s results of operations and financial condition as a result of factors specific to the company and its operations
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 at least 15 of AngloGold Ashanti’s 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 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 distinct supply chains. These misconceptions impact negatively on the reputation of the industry.
The activities of the illegal miners, which include theft and shrinkage, could cause damage to AngloGold Ashanti’s properties, including pollution, underground fires, or personal injury or death, for which AngloGold Ashanti could potentially be held responsible. Illegal mining could result in the 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, the company recorded an increase in the number and severity of security incidents, due to a steady migration of people into the areas and an increase in the level of organisation and funding of criminal activity around some of the company’s Continental African operations, likely encouraged by an escalating gold price at that time. The most significant security challenges have occurred in Tanzania and Ghana in areas where there is endemic poverty and high levels of unemployment. For example, in February 2016, AngloGold Ashanti withdrew its employees performing non-essential functions from its idled Obuasi gold mine following the incursion of illegal miners inside the fenced areas of the site. An AngloGold Ashanti employee was killed in the incursions. If allowed to continue unchecked, illegal mining taking place on parts of the concession, and vandalism of property, could threaten the long-term viability of the mine and AngloGold Ashanti Ghana’s ability to continue its feasibility study and maintain critical services. More generally, illegal mining and theft could also result in lost gold Ore Reserves, mine stoppages, and have other material adverse effects on AngloGold Ashanti’s results of operations or financial condition.
AngloGold Ashanti’s Ore 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 and other 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 and disturbances, sabotage, 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, AngloGold 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 activities in Colombia.
Since 2009, the company has recorded an almost four-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, 2014 and 2015, intrusions onto the company’s tenement and operational areas resulted in a marked increase in crime, specifically illegal mining-related activities. The most significant security challenges remain in Tanzania and Ghana, in areas where there is endemic poverty and high levels of unemployment. See “—Illegal and artisanal mining occurs on AngloGold Ashanti’s properties, which can disrupt the company’s business and expose the company to liability.” 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. For example, the company relies on the army for support at its mining operations in Ghana. Incursions occurred at the Obuasi mine following withdrawal of such state security protection in February 2016. 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 operates in several regions where poverty, unemployment and the lack of access to alternative livelihoods mean that the creation and distribution of economic benefit from mining operations is a significant area of focus for community and government. For example, the especially high rate of unemployed youths resulted in a picket by members of the community in Khuma at the company’s Mine Waste Solutions site in November 2015. Additionally, AngloGold Ashanti has been involved in disputes with the Merafong City Local Municipality in South Africa over property valuations and water services surcharges. These matters have drawn public attention and have been discussed with the Minister of Mineral Resources.
In addition, infectious diseases are also a threat to the stability of some of the countries in which the company operates, where limited local health infrastructure weakens governments’ ability to manage and contain outbreaks effectively. For example, during August 2014, cases of Ebola virus disease (EVD) were reported in Siguiri, Guinea, which is located near AngloGold Ashanti’s Siguiri mine. EVD was also reported elsewhere in Guinea. The company has implemented certain restrictions on travel to and from the Siguiri mine as a precaution. As EVD caused significant disruptions in the company’s exploration activities, particularly relating to field mapping and geophysics, AngloGold Ashanti also suspended its brownfields work programme and greenfields field work in the middle of 2014. In the future the company may consider further safety measures which may negatively impact the operations at the Siguiri mine or its exploration projects in neighbouring areas.
AngloGold Ashanti does not have any gold hedging instruments or long-term sales contracts, exposing the company to potential gains from subsequent commodity price increases but exposingwhich exposes it entirely to subsequent commodity price decreases.
WeAngloGold Ashanti removed the last of ourits gold hedging instruments in October 2010 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. AThe sustained decline in the price of gold experienced since 2011 has had an adverse impact on the company’s financial condition and further deterioration could adverselyhave a material adverse impact on 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 financial condition.
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 AshantiAshanti’s employees in South Africa, Ghana, Guinea and Argentina are highly unionised.unionised and unions are active at some of its other operations. Trade unions, therefore, have a significant impact on the company’sgeneral labour relations as well as on socialenvironment, including labour relations at operational level. The extent of the unions’ influence also impacts the socio-economic and political reforms,socio-political operating environments, most notably in South Africa. There is aUnion involvement in wage negotiations and collective bargaining increases the 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 instrike action. 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.
For example, following a wave of labour unrest and unprotected strike action that took place throughout the South African mining, transport and agricultural sectors since early August 2012, workers from AngloGold Ashanti’s Kopanang mine, three West Wits mines and the Vaal River region’s other operations engaged in unprotected strikes in September 2012. More than 100,000 miners were involved in the strikes across the mining sector during the last four months of 2012. Workers at AngloGold Ashanti mines in South Africa have also staged sit-ins which prompted the company to suspend operations at some of its mines. These work stoppages pose significant safety risks and operating challenges. The protracted period of inactivity caused by the strike, coupled by the depth of the affected mines, has complicated the consequent ramping up of production following the termination of the strikes and has resulted in a lengthened ramp-up period to ensure employee safety. The unprotected strike action at the South African operations had an adverse impact on the company’s third quarter results and significantly adversely impacted its fourth quarter results. The company estimates that the unprotected strike action cost approximately 235,000 ounces in lost production due to the work stoppages and the slow ramp-up to full production. In late April 2013, a number of workers at Moab Khotsong and all workers at Mponeng failed to report for their shifts in a dispute over Saturday working arrangements but returned soon after. Subsequently around 600 workers were dismissed for disciplinary reasons after the strikes. Furthermore, AngloGold Ashanti experienced a 48-hour strike at its Vaal River operations in September 2013.
In addition, the emergence of the Association of Mineworkers andMining Construction Union (“AMCU”),(AMCU) challenging the dominance of the longstanding National Union of Mineworkers (NUM) lends itself to conflict, inter union rivalry and a relative newcomer with respectrisk of labour relations instability. Management expects that unions will continue to use their collective power and ability to withhold labour to advocate for improved conditions of employment, labour regulatory change, political and social goals in the future.
Under the prevailing unstable global economic climate in particular, unions could utilise disruptions, strikes and protest action to oppose restructuring and downscaling of the mining industry. In South Africa, a variety of legacy issues such as housing, migrant labour, poor service delivery and youth unemployment can lead to communities and unions working together to create instability in and around mining operations. As such, there is a risk to the safety of people and damage to company infrastructure and property.
The contagion effect of the wave of unprotected strike action and labour unrest which occurred in South Africa and particularly in the mining sector during 2012 led to a six-week unprotected strike at all of AngloGold Ashanti’s South African operations in September 2012. The strike action was fuelled by several issues, including the emergence of AMCU, expectations of higher wage increases, and the gold sector as a whole, impacted productivity in 2013, as employees changed union affiliationsgeneral social 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 similareconomic conditions. 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, amendmentsa three-year wage agreement was reached in 2015 with unions representing the majority of the company’s employees. This agreement was extended to all employees irrespective of their union affiliation. However, AMCU did not sign the agreement and challenged the extension of the agreement’s terms to its members. The success of challenges like these could have an adverse impact on the company’s financial condition as a result of increases in labour legislationcosts. See “—Increased labour costs could 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 asa material adverse effect on AngloGold Ashanti’s employees, which could increase its labour costsresults of operations and reduce operational flexibility.financial condition”.
In South Africa, the broader labour relations climate remains fragile. Unresolved issues emanating from the 2015 wage review could result in strike action. The labour relations climate is further exacerbated by a number of other issues such as (i) pressure building amongst all unions and employees regarding legislation reform affecting pensions and provident funds; (ii) demonstrations by the citizenry and students about public services and free education; (iii) public outcry relating to racism; and (iv) the effect of confrontations between political parties in the lead-up to elections, all of which may have repercussions in the workplace.
In South Africa, companies’ ability to undertake a restructuring of mining operations that could result inlay-offs layoffs or redundancies are currently a highly contentious matter. Whileis curtailed by governmental intervention. Going forward, management expects that the Department of Minerals and Energy does not have any statutory right on the basis of existing labour legislationwill invoke its powers to intervene in any such restructuring process it may intervene by placingand will be able to place external pressure on mining companies in respect ofdue to its control over the renewal orand cancellation of their mining rights.
On 10 February 2014 workers employed byAny future labour unrest and disruptions could have a contractor at Sadiolamaterial adverse effect on AngloGold Ashanti’s results of operations 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.financial condition.
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 itsoperationsin South African, GhanaianAfrica and Tanzanianthe America’s, constitute approximately 40 to 50 percent of the operations constitute the company’s single largest component of operating costs. Failing to obtainAbsent 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,
During 2015, approximately 60 percent of the cost of salaries and wages increased by around 9 percent over 2012 levels.
company’s workforce, excluding contractors, was located in South Africa. In South Africa, the establishedhistorical practice ishas been 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 formHowever, 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 a2015 wage agreement was extendednegotiated to all employees irrespectivecover a period of union affiliation. At present,three years. Nevertheless, AMCU, which did not sign 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 companiescontinues its efforts to challenge the extension of the 2013 Wage Agreement forwage
agreement to its members. To this effect, AMCU members to obtain substantially higher wages. An interim interdict prohibiting the strike was grantedhas applied to the ChamberEmployment Standards Commission for the Minister of Mines byLabour to declare the extension unlawful and to commission an investigation into low wages. Separately, in 2015 the Labour Court found in Johannesburgfavour of AMCU regarding the dismissal of 542 employees at Moab Khotsong in January 2014. AMCU must returnApril 2013. The relevant employees were re-instated and AngloGold Ashanti paid each employee an amount equivalent to court12 months’ basic pay, which had an adverse impact on 14 March 2014the company’s financial condition. As a result of AMCU’s challenges, the risk of potential strike action remains high 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 percentfurther adverse findings could increase labour costs of the company’s workforce, excluding contractors, were located in South Africa.company, which could have a material adverse impact on its financial condition.
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 newput in place an industrial relations system that includes ‘good“good faith bargaining’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 breaches in its obligations in respect of its mining rights.
AngloGold Ashanti’s right to own and exploit MineralOre 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 MineralOre 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 each of the countries in which AngloGold Ashanti operates, the formulation or implementation of government policies on certain issues may be unpredictable. This may include changes in laws relating to mineral rights and ownership of mining assets and the right to prospect and mine, and in extreme cases, nationalisation, expropriation or nullification of existing concessions, licenses, permits, agreements and contracts. In May 2012, for example, the 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 minein 2012 the Mongbwalu concessionDRC Mines Minister announced a reform of the DRC’s mining code that could have had a material adverse impact on the protections enjoyed by AngloGold Ashanti’s projects in the Democratic Republic ofDRC. While the Congo (DRC) are up for renewalreform plans were postponed in 2014. AGK filed its renewal application in this regard in December 2012. AGK mayFebruary 2016, there can be no assurance that the DRC Mines Minister will not be successfulundertake similar reforms in the renewal process or in retaining the license on the same terms. future.
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 stakeMoreover, 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,South Africa, AngloGold Ashanti’s mining rights in South Africa may be suspended or cancelled by the Minister of Mineral Resources, and wethe company may be unable to obtain new mining rights if we breach ourit breaches its obligations under the MPRDA.Mineral and Petroleum Resources Development Act (MPRDA). In particular, South Africa’s changing Black Economic Empowerment (BEE) policies may adversely affect both the terms of AngloGold Ashanti’s mining concessions, as well as its ability to conduct operations. Mining rights are linked to compliance with various obligations, including the Revised Mining Charter. Compliance with the Revised Mining Charter is measured using a designated scorecard relating to equity ownership and management control of mining companies by historically disadvantaged South Africans (HDSAs). The deadline for compliance was originally set for the end of 2014, at which time HDSAs had to constitute 40 percent of all levels of management.
Whilst AngloGold Ashanti believes that it is compliant with ownership targets that had to be achieved by the end of 2014, it has not yet received its scorecard from the government assessing its compliance with applicable requirements and it may need to 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.
The company will incur expenses in giving further effect to the Revised Mining 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 Revised Mining Charter has not gone far enough to achieve its underlying goals and therefore decide to expand the obligations of mining companies thereunder and the Minister of Mineral Resources may opt to disregard certain historical BEE transactions in connection with its review of new mining rights applications.
In March 2015, the Minister of Mineral Resources announced that the Department of Mineral Resources and the Chamber of Mines of South Africa had jointly agreed to submit certain matters relating to the interpretation of the Revised Mining Charter, including the qualification of certain historical BEE transactions for meeting the HDSA ownership thresholds, to the courts in South Africa for determination and clarification. On 9 March 2016, AngloGold Ashanti received a notice from the DMR stating that the company was not compliant with the 26 percent HDSA ownership requirement. The notice directed the company to remedy the non-compliance within 60 days. Failure to comply with the order would constitute an offence under the MPRDA and, as such, could negatively impact AngloGold Ashanti’s “Scorecard” assessment. AngloGold Ashanti has challenged the order. Should AngloGold Ashanti breach its obligations to comply with the MPRDA, Revised Mining Charter or any future amendments to the Revised Mining Charter, it may be compelled to conduct additional BEE transactions or 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 AngloGold Ashanti’s results of operations and financial condition.
In addition, and as discussed in more detail in “Item 4B: Business Overview – The Regulatory Environment Enabling AngloGold Ashanti to Mine”, South Africa recently enacted the BBBEE Amendment Act, which amended the Broad-based Black Economic Empowerment Act 53 of 2003. There are several areas of potential conflict between the BBBEE Amendment Act and the Revised Mining Charter. Absent any amendments to applicable law, the Amendment Act will trump the provisions of the Revised Mining Charter as from 24 October 2016.
AngloGold Ashanti’s insurance does not cover most losses caused by the risks described above,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, authorisations or agreements to prospect or mine or to implement planned projects, or continue its operations, or comply with all laws, regulations or requirements, or do so within time-framestimeframes 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 change materially, or should governments increase their ownership in the mines or nationalise them, AngloGold Ashanti’s results of operations and 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, the 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 predict and outside of the company’s control, and could therefore negatively affect the business results of new or existing projects. In Ghana in February 2012, the company negotiated the relocation of the Sansu Community, which lies within its local mining concession; the cost of this relocation was approximately $30 million. Where consultation with stakeholders is statutorily or otherwise mandated, relations may not remain amicable and disputes may lead to reduced access to properties or delays in operations.
Moreover, amendments to the laws regulating mining in South Africa became effective on 7 June 2013. One of these amendments relates to the possible “expropriation” of mine dumps that were created before the coming into effect of the Mineral and Petroleum Resources Development Act (“MPRDA”) on 1 May 2004. Although the legal position is not clear in this regard, it is possible that somepre-2004 mine dumps are now subject to the MPRDA and, as a result, the Minister of Mineral Resources may issue rights over such dumps to third parties.
Title to the 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 precise area and location of the company’s claims may be in doubt. Accordingly, AngloGold Ashanti’s mineral properties may be subject to prior unregistered liens, agreements, transfers or claims, including native land claims, and title may be affected by, amongamongst other things, undetected defects.
AngloGold Ashanti may experience unforeseen difficulties, delays or costs in successfully implementing its business strategy and projects, 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 many factors, including those outside its control. For example:example, the successful management of costs will depend on prevailing market prices for input costs. The ability to grow the business will depend on the successful implementation of the company’s existing and proposed project development initiatives and continued exploration success, as well as on the availability of attractive merger and acquisition opportunities, all of which are subject to the relevant mining and company specific risks as outlined in these risk factors.
AngloGold Ashanti is in the process of implementing initiatives relating to strategic alignment, portfolio review, restructuring and cost-cutting, temporary or permanent shutdowns, and 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’“mothballed shafts” and hostile reaction to proposed mining industry retrenchments.
The risk is also be significant in Ghana, where the restructuring and repositioning of the Obuasi mine have resulted in a substantial reduction in the mine’s existing operations and significant workforce redundancies. In 2014, these redundancies resulted in the company incurring $210 million in retrenchment costs. Furthermore, after entering into a conditional investment agreement with AngloGold Ashanti on 16 September 2015 for the purpose of redeveloping and operating the Obuasi mine, Randgold Resources Limited (Randgold) informed AngloGold Ashanti on 21 December 2015 that it wished to terminate the agreement, as the proposed investment did not meet Randgold’s investment criteria.
If AngloGold Ashanti fails to demonstrate or realise its business case for the redevelopment of the Obuasi operation, including because the company is unable to finalise a joint venture or other agreement with a partner to make the substantial investments necessary for redevelopment, to obtain the required consents, approvals or agreements for continued operation or to reverse deteriorating security conditions following the withdrawal of state security protection in early 2016, AngloGold Ashanti may be forced to withdraw from the Obuasi mine on a long-term or permanent basis.
Finally, the risk may also be elevated in Ghana, where AngloGold Ashanti is considering potential rationalisation or other plans for the mine, and alsohigh in the DRC aswhere the company seeks to reduce its interest inhas exited 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;planned, turn out to be less effective than anticipated;anticipated, only become effective later than anticipated;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, whilewhilst freeing up capital by curtailing capital expenditure or suspending operations at those projects that the 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.reputation including as a result of subsequent claims brought by acquirers in connection with divested assets.
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 may adversely affect the successful implementation of AngloGold Ashanti’s business strategy and projects, and such strategy and projects may not result in the anticipated benefits.projects. For example, in South Africa, the company experienced declining production rates (1.21(1.00 million ounces of gold in 2012,2015, compared with 1.621.22 million ounces of
gold in 2011,2014, and 1.781.30 million ounces in 2010)2013), principally due to continued safety and associated stoppages, mining flexibility constraints and overall falls in grades. The significant decreaseManagement estimates that stoppages in 2012 was also mainly attributable to2015 resulted in production loss of 113,000 oz. Unforeseen difficulties, delays or costs may adversely affect the industrial strike action atsuccessful implementation of the company’s South African mines, which resultedbusiness strategy and projects, and such strategy and projects may not result in the loss of production of 235,000 ounces of gold. In 2013 however, AngloGold Ashanti produced 1.30 million ounces fromanticipated benefits, which could have a material adverse effect on its South African operations.financial results and prospects.
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: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,Furthermore in Tanzania, 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. Production throughput in 2011 was one million tonnes lower than planned, as a result of mill downtime that included feed end replacement. The Geita gold mine produced approximately 531,000 ounces in 2012, with production throughput approximately 100,000 tonnes short of budget. 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 throughputAgeing infrastructure may have an adverse effect on the company’s results of operations and financial condition 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.the future.
Some of AngloGold Ashanti’s technologies are unproven and failure could adversely impact costs and production.
AngloGold Ashanti has created a Technology Innovation Consortium (ATIC) and teamed up with various specialists to engineer new solutions to environmental management, mine design, rock breakingmining technology and methods and underground logistics, amongst other matters. The company has invested in new technologies, including phyto-technologies to reduce seepage and address soil and ground watergroundwater 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 its South African mines.mines, including rock boring, different hammer configurations and dimensions for drilling, thermal spalling and an ultra-high strength backfill product and system.
Some aspects of these technologies are unproven and their eventual operational outcome or viability cannot be assessed with certainty. AngloGold Ashanti may be unable to successfully put into operation the technological step changes developed and proposed by ATIC. 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 companyThe company’s failure 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 2013,2015, AngloGold Ashanti had gross borrowings of $3.8$2.737 billion (2012: $3.0(2014: $3.721 billion), excluding all finance leases and fair value adjustments on bonds.
AngloGold Ashanti’s indebtedness could have a material adverse effect on its flexibility to conduct business. For example, the company may be required to use 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’sAngloGold Ashanti’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, andincluding in particular the gold price, certain of which are beyond the control of the company.its control.
Should the cash flow from operations be insufficient, AngloGold Ashanti could breach its financial and other covenants. 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 or sell assets. However, the company may be unable to sell assets on reasonable or profitable terms as and when necessary. Additionally, AngloGold Ashanti cannot be sure that it will be able to refinance its debt on commercially reasonable terms, if at all. The company’s ability to access the bank, public debt or equity capital markets on an efficient basis may be constrained by dislocation in the credit markets or capital and liquidity constraints in the banking, debt or equity markets at the time of issuance.
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, anticipated or unexpected 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 a deterioration of the company’s credit ratings. AngloGold Ashanti’s ratings are influenced inter alia, by the location of its domicile and its operations.
On 22 January 2016, a rating agency placed the ratings of 55 mining companies globally, including AngloGold Ashanti’s, on review for downgrade. This action reflects the agency’s global effort to recalibrate its ratings in the mining sector to align with the continued downside volatility observed in global commodities. The review will consider each mining company’s asset base, cost structure, cash flows and liquidity, as well as management’s strategy for coping with downside price volatility and the ability to execute on the same. While the rating agency affirmed the rating for the company in March 2016 and updated its outlook from negative to stable, there is no assurance that rating agencies will not conduct similar reviews in the future or that the company will not be downgraded as a result of such further assessments.
A second rating agency downgraded South Africa’s long-term foreign and local currency rating to ‘BBB-’ from ‘BBB’ and to ‘BBB’ from ‘BBB+’, respectively on 4 December 2015. Furthermore, the first agency’s government issuer rating for South Africa was affirmed but the outlook was changed to negative. A third rating agency warned that weak South African economic growth and government bailouts of state-owned companies could lead the country to be downgraded to sub-investment grade in 2016. Any downgrade of the government issuer rating for South Africa could have a material adverse impact on AngloGold Ashanti’s creditworthiness and could dampen investors’ interest in the company’s securities.
Any further downgrade by ratings agencies could further increase the company’s cost of capital, reduce its investor base and have a material adverse effect on AngloGold Ashanti’s business, results of operations and financial condition.
AngloGold Ashanti expects to have significant financing requirements.
AngloGold Ashanti’s existing board-approved development projects and exploration initiatives will require significant funding.
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 the current planned amounts.
As a result, new sources of capital may be needed to help meet the funding requirements of these developments, to fund ongoing business activities and to pay dividends. AngloGold Ashanti’s ability to further 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, amongst other factors. The company’s ability to raise further debt financing in the future and the cost of such financing will depend on, amongst 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 depressed 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 on reasonable terms, invest in existing and new projects, fund its ongoing business activities, exit projects and 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 financial condition.
Certain factors may affect AngloGold Ashanti’s ability to support the carrying amount of its property, plant and equipment, intangible assets and goodwill on the balance sheet. If the carrying amount of its assets is not recoverable, AngloGold Ashanti may be required to recognise 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 impairment may have occurred, AngloGold Ashanti prepares estimates of a recoverable amount for each group of assets. Expected future cash flows are inherently uncertain, and could materially change over time. Recoverable amounts are significantly affected by reserveOre Reserve and production estimates, together with economic factors such as spot and forward gold prices discount rates,and currency exchange rates, as well as discount rates and estimates of costs to produce reservesOre Reserves and future capital expenditure. Estimated rehabilitation and closure costs could also materially affect the company’s financial performance and could result in the need to recognise an impairment charge.
If any of these uncertainties occur, either alone or in combination, management could be required to recognise an impairment, which could have a material adverse effect on the company’s results of operations and financial condition. DuringFor example, during 2013, AngloGold Ashanti reviewed the carrying value of its mining assets (including ore stockpiles), goodwill and intangibles and, based on revised forecast gold prices, the company booked a charge of $3,245 million in relation to impairments, derecognition and revaluation of net realisable value of ourits mining assets (including ore stockpiles), goodwill and intangibles of $3,245 million.intangibles.
AngloGold Ashanti expects to have significant financing requirements.
AngloGold Ashanti’s existing board-approved development projects and exploration initiatives will require significant funding. These include: Mponeng Below 120 Project in South Africa; the Kibali project in the Democratic Republic of the Congo; and the mine life extension project (MLE2) at Cripple Creek & Victor in the United States.
Potential future exploration projects, feasibility studies, and development projects will also require significant funding, if and when approved by the AngloGold Ashanti board of directors.
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 the 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 cost of development of these and other projects as well as 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 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 financial condition.
AngloGold Ashanti does not have full management control over some of its significant joint venture projects and other interests. If the operators of these projects do not manage these effectively and efficiently, the company’s investment in these projects could be adversely affected and its reputation could be harmed.
AngloGold Ashanti’s joint ventures at Morila in Mali and at Kibali in the DRC are managed by the company’s joint venture partner Randgold Resources Limited (Randgold). In addition, certain of AngloGold Ashanti’s exploration ventures are managed by the relevant joint venture partner.
WhileWhilst 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 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. 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 Ashantithe company and its joint venture partners may lead to legal action, including litigation between AngloGold Ashanti and its 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 or strategic objectives relating to the joint ventures.
AngloGold Ashanti’s mineral deposits, MineralOre Reserve, 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.
Past experience demonstrates that political, tax and economic laws and policies in countries in which AngloGold Ashanti operates can change rapidly. Examples include the 2012 coup d’état and subsequent fighting in Mali and the recent changes to the foreign currency regulations that were imposed from 2011 to 2015 in Argentina. As mining assets are fixed, the adverse impacts of such changes may be unavoidable and immediate.
Any existing and new mining, exploration operations and projects that the company carries out are subject to various national and local laws, policies and regulations governing the ownership, prospecting, development and mining of mineral reserves,Ore 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 operates, there is an on-goingongoing 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 particular economic conditions, and the formulation or amendment of laws, policies and regulations relating to issues such as mineral rights and asset ownership, royalties, taxation and taxation disputes, ‘windfall’“windfall” or ‘super’“super” taxation, non-recovery of taxation refunds, import and export 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 form of increased royalties and taxes, mandated beneficiation, export levies and increasing or retaining state or national ownership of resources. In particular, changes to the fiscal terms governing AngloGold Ashanti’s operations may have a material adverse impact on the company’s results of operations or financial condition, threaten the viability of existing operations, and discourage future investments in certain jurisdictions. This may therefore have an adverse impact on the company’s ability to access new assets and potentially reducingreduce future growth opportunities.
For example, on 9 September 2011, a new mining code for Guinea was enacted. The new mining code significantly increased the share of state ownership in the mining industry, extending a 15 percent share of future mining projects to the government, without financial compensation. The government also had the option to purchase up to an additional 20 percent of each project. However, the new 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 afterthereafter 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 other matters. The scope of the amendments to AngloGold Ashanti’s existing mining convention will depend on the outcome of negotiations with the technical committee established by the Guinean government. Any material amendments could have an adverse effect on the company’s financial condition and profitability.
The
In 2012, the government of Ghana amended its fiscal mining regime, increasedincreasing its corporate taxation to 35 percent and royalty rates of 5five percent. Furthermore, the government of Ghana has constituted a review committee to review and re-negotiate stability agreements with mining companies. AngloGold Ashanti is currently participatingwaiting to be invited to participate in negotiations with the Ghanaian review committee. The outcome of these 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. The new mining legislation and the outcome of the review of the mining contracts may have a material adverse impact on the company’s results of operations and financial condition. Recently,In 2012, the Tanzanian Minister of Energy and Minerals increased the royalty rate levied on gold extracted in Tanzania by AngloGold Ashanti’s operations by 1one percent, and this haswhich had a direct impact on the revenues earned from the operations in Tanzania. ProposedThis change was ratified on 9 October 2014, together with the cancellation of a capital allowance previously applicable to unredeemed qualifying capital expenditure and a new levy payable to the Geita District Council. Tanzanian regulations proposed in 2013 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 Additionally, in 2015, a proposed overhaul30 percent capital gains tax on sales of the DRC’s mining code. The proposedshares and a new act cancelling VAT exemptions on company purchases came into force. These new 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 materialan adverse impact on the company’s results of operations in the DRC.Tanzania.
On 1 July 2012, Australia’s Minerals Resource Rent Tax (MRRT) came into effect after the legislation was passed in March 2012. The MRRT, applieswhich was repealed in 2014, applied only to the bulk commodities of coal and iron ore, and replaced the previously proposed Resource Super ProfitProfits 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’“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 continue 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 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 (and referred back to the National Assembly by the President on 16 January 2015), could impact AngloGold Ashanti’s business by empowering the Minister of MinesMineral Resources 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 andproposed changes to explorationthe mining legislation that are still being discussed in congress. The proposals could make the rules governing access to mining titles more discretionary and could shorten the duration of exploitation rights.
Mining is a long termlong-term activity and assets may be located in jurisdictions with elevated risk. Political instability and the resulting 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 company’s ability to access new assets, potentially reducing growth opportunities.
AngloGold Ashanti is subject to an 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 uncertain tax environment in some regions could limit AngloGold Ashanti’s ability to enforce its rights. As a global company, AngloGold Ashanti conducts its business in countries subject to complex tax rules, which may be interpreted in different ways. Further interpretations or developments of tax regimes may affect the company’s tax liability, return on investments and business operations. AngloGold Ashanti is regularly examined by tax authorities in theits various jurisdictions of operation.
In Guinea, Mali, DRC and Tanzania, AngloGold Ashanti is due refunds of input tax and fuel duties which remainhave remained outstanding for periods longer than those provided for in the respective statutes. For example, AngloGold Ashanti calculates that overdue recoverable value added tax, fuel duties and appeal deposits of $71$40 million are owed to AngloGold Ashanti and held by the Tanzanian government and it is not certain when AngloGold Ashanti will be refunded this amount, if at all.
The countries in which the company operates may also introduce strict exchange controls, impose restrictions to source materials and services locally, or impose other similar restrictions that hinder foreign companies’ operations within such countries. For example, the Argentine government introduced stricter exchange controls and related protracted approval processes from 2011 to 2015, which may limitlimited the company’s ability to repatriate dividends from its Argentine subsidiaries. In October 2011, the Argentina government has decreed that mining, oil and energy companies must repatriate export earnings. Additionally,earnings and additionally, the purchase of USU.S. dollars requiresrequired authorisation from the Argentine tax agencycentral bank and the purpose for which the currency willwould be used musthad to be stated. In May 2012, the Argentine Mining Secretariat issued new regulations requiring mining companies in Argentina to boost their domestic purchases of equipment and services. Miningservices and mining companies are nowwere required to resort exclusively to locally established suppliers for their export-related shipping and logistics operations. A separate norm requires companiesWhile the new government, elected in November 2015, started a process to ease these controls and return to an open an import substitution division which will be in chargeeconomy and free market, not all restrictions had been lifted as of submitting procurement plans to the Mining SecretariatMarch 2016, including restrictions on a quarterly basis. Such requirements are hindering the company’s operations within Argentina and these or similar requirements may continue to do so in the future and may have a material adverse effect on AngloGold Ashanti’s results of operations and financial condition.dividend payments.
If, in one or more 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 linkedtied to meetingcompliance with various obligations that include the broad-based socio-economic empowerment charter for the mining industry (the Revised Charter).Mining Charter. Compliance with the Revised CharterMining 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 deadline for compliance was originally set for the end of 2014, and thatat which time HDSAs musthad to 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).
WhileWhilst AngloGold Ashanti believes that it will beis compliant with ownershipthe targets that had to be achieved by the end of 2014, it musthas not yet received its “Scorecard” from the government assessing its compliance with applicable requirements and it may need to 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.development. See “Item 4B: Business Overview—The Regulatory Environment Enabling AngloGold Ashanti to Mine”.
The company will incur expenses in giving further effect to the Revised Mining 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 Revised Mining Charter has not gone far enough to achieve its underlying goals and therefore decide to expand the obligations of mining companies thereunder.thereunder and the Minister of Mineral Resources may opt to disregard certain historical BEE transactions in connection with its review of new mining rights applications. In March 2015, the Minister of Mineral Resources announced that the Department of Mineral Resources and the Chamber of Mines of South Africa had jointly agreed to submit certain matters relating to the interpretation of the Revised Mining Charter, including the qualification of certain historical BEE transactions for meeting the HDSA ownership thresholds, to the courts in South Africa for determination and clarification. On 9 March 2016, AngloGold Ashanti received a notice from the DMR stating that certain of the company’s operations were not compliant with the 26 percent HDSA ownership requirement. The notice directed the company to remedy the non-compliance within 60 days. Failure to comply with the order would constitute an offence under the MPRDA and, as such, could negatively impact AngloGold Ashanti’s “Scorecard” assessment. AngloGold Ashanti has challenged the order. Should AngloGold Ashanti breach its obligations in complyingto comply with the Mineral and Petroleum Resources Development Act (MPRDA),MPRDA, Revised Mining Charter or any future amendments to the Revised Mining Charter it may be compelled to conduct additional BEE transactions or, 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.See “Item 4B: Business Overview—The Regulatory Environment Enabling AngloGold Ashanti operates in several regions where poverty, unemployment and the lack of access to alternative livelihoods mean that the creation and distribution of economic benefit from mining operations is a significant area of focus for community and government. 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.Mine”.
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 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 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 distinct supply chains. These misconceptions impact negatively on the reputation of the industry.
The activities of the illegal miners, which include theft and shrinkage, could cause damage to AngloGold Ashanti’s properties, including pollution, underground fires, or personal injury or death, for which AngloGold Ashanti could potentially be held responsible. Illegal mining could result in the 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 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, likely encouraged by an escalating gold price at that time. The most significant security challenges have occurred in Tanzania and Ghana in areas where there is endemic poverty and high levels of unemployment. Illegal mining and theft could also result in lost gold reserves, mine stoppages, and have a material adverse effect on AngloGold Ashanti’s results of operations or financial condition.
The use of contractors at certain of the company’s operations may expose AngloGold Ashanti to delays or suspensions in mining activities and increases in mining costs.
AngloGold Ashanti uses contractors at certain of its operations to mine and deliver ore to processing plants 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 affected mines have financial difficulties, or if a dispute arises in renegotiating a contract, or if there is a delay in replacing an existing contractor and its operating equipment to meet business needs at expected cost levels. Increases in contract mining rates, in the absence of associated productivity increases, will also have an adverse impact on the company’s results of operations and financial condition. For example, on 13 October 2012, AngloGold Ashanti terminated the underground development contract with a third-party contractor at the Obuasi mine in Ghana. The costs of the termination amounted to $17 million. On 10 February 2014 workers employed by a contractor at Sadiola and Yatela went on a five dayfive-day strike demanding improved redundancy payments – see ‘Labourpayments. See “—Labour unrest, activism and disruptions could have a material adverse effect on AngloGold Ashanti’s results of operations and financial condition’condition”. Furthermore disagreements over costs with contractors at Siguiri in Guinea and Iduapriem in Ghana resulted in a dispute in 2015.
Contractor disputes can also arise after the termination of the contractual relationship or the sale of the applicable mine. For example, the company is currently involved in arbitration proceedings with contractors in Ghana with regard to its Obuasi mine and in the United States with regard to its former Cripple Creek & Victor mine. See “Item 8A: Legal Proceedings”
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 incurringcompany’s incurrence of liability to third parties due to the actions of contractors.
AngloGold Ashanti competes with mining and other companies for key human resources with critical skills and its inability to retain key personnel could have an adverse effect on its business.
AngloGold Ashanti competes on a global basis with mining and other companies to attract and retain key human resources at all levels with the appropriate technical skills and operating and managerial experience necessary to operate and supervise its business. This is exacerbated by the global shortage of keypersons with critical mining skills, including geologists, mining engineers, metallurgists and skilled artisans. Furthermore, the often remote locations of mining operations may make the mining industry unattractive to potential employees. Changes in taxation and the regulatory environment where AngloGold Ashanti operates may also impact the company’s ability to attract and retain key personnel, especially those from abroad.
The retention of staff is particularly challenging in South Africa, where, in addition to the impacts of global industry shortages of skilled labour, AngloGold Ashanti is required to achieve employment equity targets of participation by HDSAs in management and other positions. AngloGold Ashanti competes with all companies in South Africa to attract and retain a small but growing pool of HDSAs with the necessary skills and experience. AngloGold Ashanti has historically faced difficulty recruiting and retaining young graduates and qualified mid-level management in South Africa. Recruitment of skilled personnel has also been challenging in Continental Africa due to university offerings that are often not well-suited to the specific needs of the mining industry, as well as other factors such as language barriers and low literacy skills.
The recruitment of skilled workers is also highly competitive in South America as a result of a shortage of skills and intense competition between mining companies.
TheAdditionally, the company may incur significant costs to build talent, capacity and expertise across its global operations. Despite AngloGold Ashanti’s investments, the company may not be able to retain and attract sufficient skilled and experienced employees in all areas of the business. Should it fail to do so or lose any of its key personnel with critical skills, business and growth prospects may be harmed and this could have an adverse impact on AngloGold Ashanti’s results of operations and financial condition.
AngloGold Ashanti’s inability to retain its senior management may have an adverse effect on its business.
The company’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 other diseases and the potential costs and liabilities related thereto may have an adverse effect on the business and results of operations of AngloGold Ashanti.
The primary areas of focus in respect of occupational health of employees within the company’s operations are noise-induced hearing loss and occupational lung diseases (OLD), which include pulmonary diseases such as tuberculosis from various causes and 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 centerscentres and clinics and continues to improveruns preventative occupational hygiene initiatives, such as implementing various dust control measures and supplying itsthe company’s 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 AngloGold Ashanti’s results of operations and financial condition. Actual and alleged health and safety incidents or breaches of standards may also adversely impact the company’s reputation.
AngloGold Ashanti is currently subject to numerous claims, including class action litigation, with respect to alleged occupational lung diseases (see “– “—AngloGold Ashanti is subject to the risk of litigation, the causes and costs of which are not always known”). AngloGold Ashanti is calling forworking with the industry 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 thereofof any such solution may have a material adverse effect on AngloGold Ashanti’s financial condition. See “Item 8A: Legal Proceedings” and “Item 18: Note 35 – Contractual Commitments and Contingencies”.
In response to the effects of silicosis in labour-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 Occupational Diseases in Mines and Works Act (ODMWA) to affected communities.
AngloGold Ashanti also faces certain risks in dealing with HIV/AIDS, particularly at its South African operations, and with tropical disease outbreaks such as malaria, and other diseases which may have an adverse effect on the company’s results of operations and financial condition. AIDS and associated diseases remain one of the major health care challenges faced by AngloGold Ashanti’s South African operations. Workforce prevalence studies indicate that HIV prevalence rates amongamongst AngloGold Ashanti’s South African workforce may be as high as 30 percent.
Malaria and other tropical diseases pose significant health risks at all of the company’s operations in central, west and east Africa where such diseases may assume epidemic proportions because of ineffective national control programs.programmes. Malaria is a major cause of death in young children and pregnant women but also gives rise to fatalities and absenteeism in adult men. Other conditions such as heart disease, chronic diseases and obesity are of increasing incidence and concern.
Such diseases impair the health of workers and negatively affect productivity and profitability as a result of workers’ diminished focus or skill, absenteeism, treatment costs and allocated resources. Any current or future medical programprogramme may not be successful in preventing or reducing the infection rate amongamongst AngloGold Ashanti’s employees or in affecting consequent illness or mortality rates. AngloGold Ashanti may incur significant costs in addressing this issuethese issues in the future, which could also adversely impact the company’s results of operations and financial condition.
The costs and impacts associated with the pumping of water inflows from closed mines adjacent to the company’s operations could have an adverse effect on 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 when pumping operations at the adjacent closed mine are suspended. Such ingress could have an adverse effect on 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 on its results of operations and financial condition.
This risk has increased recently as someSome of the mining operations adjacent to AngloGold AshantiAshanti’s 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 oneAfter VMR ceased pumping of the Buffels shafts until the end of Vaal River life-of-mineunderground water at its Buffelsfontein and accordingly, we have advised VMR thatHartebeesfontein operations, AngloGold Ashanti will seekprepared plans to enforce VMR’s obligations for suchmanage underground water that it anticipated would eventually reach its operations. The infrastructure to pump this water out from underground was completed in December 2015, with an accelerated project plan. The water reached the company’s Great Noligwa boundary on 23 January 2016, and the pumping under the directive issued by the Department of Water Affairs in 2005. continues with added costs to AngloGold Ashanti.
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 wereGold Mining Company was 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 demandingalso incorporated Covalent Water Company, which has purchased rights of access, electricity etc. to the 4 and 6 shafts as well as the relevant infrastructure to continue pumping underground water. This has reduced the risk of flooding at the company’s West Wits Operations, but the company can provide no assurance that the entity continue to pumprisk of flooding will not materialise, which could have an adverse impact on its results of operations and manage its own flooding risks.financial condition.
The potential costs associated with the remediation and prevention of ground watergroundwater 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 on AngloGold Ashanti’s results of operations and financial condition.
AngloGold Ashanti has identified ground watergroundwater contamination plumes at certain of its operations that have occurred primarily as a result of seepage from surface operations and facilities, including tailings storage facilities and waste rock piles.
Deep groundwater contamination is a significant issue in South Africa, where ground watergroundwater 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. 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. 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.
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 oncovered under these insurance policies the company has in place.policies. Furthermore, AngloGold Ashanti’s insurance does not cover all potential risks associated with its business and may exclude certain parts of its business. 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 companyIn order to mitigate the cost of its insurance program, AngloGold Ashanti may not be able to obtain insurance coverage at acceptable premiums. The company believes negotiations with insurance providers have become more difficult forin some instances retain a number of reasons, including prevailing macroeconomic conditions and the risk profileportion of the mining industry. financial loss associated with an insurable event. These financial losses could be significant and have an adverse effect on its financial condition.
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 thisas a result of previous claims. This can result in higher premiums and periodically being unable to maintain the levels or types of insurance the company typically carries.
The failure to obtain adequate insurance could impair the company’s ability to continue to operate in the normal course or could result in the occurrence of events for which AngloGold Ashanti is not insured, either of whichits business. This could adversely impact its cash flows, 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, amongamongst 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, amongamongst 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.Africa.
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.
In particular, 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 –8A: Legal Proceedings – South Africa – Silicosis litigation”. It is possible that additional class actions and/or individual claims relating to silicosis and/or other OLD will be filed against AngloGold Ashanti in the future. AngloGold Ashanti will defend all and any subsequent claims as filed on their merits. Should AngloGold Ashanti cannot predict whether or when more individual claims will be filedunsuccessful in the future or whether the classes described above or other classes will be certified. Shoulddefending 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 anthe earlier decision by the Constitutional Court, of South Africa, such matters would have an adverse effect on its financial position, which could be material.
In Colombia, the company is also involved in class action lawsuits in relation to AGACAGAC’s 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. Please see “Item 8A: Legal Proceedings – Colombia”.
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.
The implementation of an integrated Enterprise Resource Planning (ERP) system could have an adverse effect on AngloGold Ashanti’s results of operations and financial condition.
AngloGold Ashanti is implementingcontinues to implement 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 an inherently ahigh-risk initiative due to the potential for implementation cost and time overruns. In addition, suchif AngloGold Ashanti experiences difficulties with the implementation could affect AngloGold Ashanti’sand operation of the system, the company’s ability to report and manage technical and financial information if difficulties in the implementation and operation of the system are experienced,could be compromised, 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
Any similar future problems with 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, operation or maintenance of the ERP system andcould have an adverse effect on the decision was made not to implement at Continental Africa operations immediately.
Sales of large quantities of AngloGold Ashanti‘sAshanti’s ordinary shares and 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 fourfive largest shareholders beneficially owned 32.3832.08 percent and the top 10 largest beneficially owned 49.58 percent of AngloGold Ashanti’s ordinary shares as at 31 December 2013.2015.
Poor returns, soaring costs, higher capital expenditure, ill-conceived corporate activity, rising geopolitical and labour risk, a material decrease in the price of gold 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. HoldersSubject to applicable securities laws, holders of the company‘scompany’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 placemarketplace that these offerings 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 USU.S. dollar value of these dividends, as well as of any other distributions paid by the relevant depositary to investors that holdholders of the company’s securities. This may reduce the value of these securities to investors.
Furthermore, AngloGold Ashanti’s Memorandum of Incorporation 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 USU.S. dollars, exchange rate movements will not affect the USU.S. 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 in the future, exchange rate movements will continue to affect the Australian dollar, British pound, Ghanaian cedi and USU.S. dollar value of these dividends and distributions. Furthermore,This may reduce the value of the company’s securities to investors. Additionally, the market value of AngloGold Ashanti’s securities as expressed in Australian dollars, British pounds, Ghanaian cedis, USU.S. 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 future.
AngloGold Ashanti pays cash dividends only if there are sufficient funds available for that purpose. Fund availability depends upon many factors that include the amount of cash available in relation to AngloGold Ashanti’s capital expenditure on existing infrastructure and exploration and other projects.
Under South African law, companies area company is entitled to pay a dividend or similar payment to its shareholders only if the company meets the solvency and liquidity tests set out in legislation and the company’s founding documents.
Given these factors, including the capital and investment needs of the company,AngloGold Ashanti, and the board of directors’ discretion to declare a dividend that includes(including the amount and timing thereof,thereof), cash dividends may not be paid in the future.
U.S. securities laws do not require AngloGold Ashanti to disclose as much information to investors as a U.S. issuer is required to disclose, and investors may receive less information about the company than they might otherwise receive from a comparable U.S. company.
AngloGold Ashanti is subject to the periodic reporting requirements of the SEC and the New York Stock Exchange that apply to “foreign private issuers”. The periodic disclosure required of foreign private issuers under applicable rules is more limited than the periodic disclosure required of U.S. issuers. For example, on 22 February 2016, AngloGold Ashanti announced that it would no longer voluntarily publish reviewed financial statements and analyses of operating and financial results for the quarters ended 31 March and 30 September each year. As a result of this transition to half-yearly reporting, investors will receive less information about AngloGold Ashanti than they have in previous years. They will also receive less timely financial reports than they otherwise might receive from a comparable U.S. company or from certain of the company’s peers in the industry. This may have an adverse impact on investors’ ability to make decisions about their investment in AngloGold Ashanti.
ITEM 4: INFORMATION ON THE COMPANY
4A. | HISTORY AND DEVELOPMENT OF THE COMPANY |
GROUP INFORMATION
AngloGold Limited was formed in June 1998 with the consolidation of the gold mining interests of Anglo American plc. AngloGold Ashanti Limited, as the company exists today, was formed on 26 April 2004 following the business combination between AngloGold and Ashanti Goldfields Company Limited.
CURRENT PROFILE
AngloGold Ashanti Limited is headquartered in Johannesburg, South Africa. The company (Registration number 1944/017354/06) was incorporated in the Republic of South Africa in 1944 under the name of Vaal Reefs Exploration and Mining Company Limited and operates under the South African Companies Act.Act, No. 71 of 2008, as amended (the Companies Act).
Its registered office is at 76 JeppeRahima Moosa Street, Newtown, Johannesburg, South Africa, 2001. Telephone: +27 11 6376000.
While AngloGold Ashanti’s primary listing is on the Johannesburg Stock Exchange (JSE), the company is also listed on the London Stock Exchange (LSE), the New York Stock Exchange (NYSE), the Ghana Stock Exchange (GhSE) and the Australian Securities Exchange (ASX).
HISTORY AND SIGNIFICANT DEVELOPMENTS
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 Gold Mining Company Limited and Western Deep Levels Limited into a single, focused, independent gold mining company. Vaal Reefs Exploration and Mining Company Limited (Vaal Reefs), the vehicle for the consolidation, changed its name to AngloGold Limited and increased its authorised share capital, effective 30 March 1998.
1998-2004
Expansion of AngloGold Limited’s operations outside of South Africa.
2004
ConcludedConclusion of the business combination with Ashanti Goldfields Company Limited, at which time the company changed its name to AngloGold Ashanti Limited.
2007
Sale by Anglo American plc soldof 69,100,000 ordinary shares of AngloGold Ashanti, thereby reducing Anglo American’s shareholding in AngloGold Ashanti from 41.7 percent to 16.6 percent.
2009
Sale by Anglo American plc soldof its remaining shareholding to Paulson & Co. Inc.
2010
Elimination of AngloGold Ashanti eliminated itsAshanti’s hedge book, thereby gaining full exposure to spot gold prices.
2012
AngloGold Ashanti acquiredAcquisition of the remaining 50 percent interest in Serra Grande in Brazil for $215 million.
The company acquiredAcquisition of 100 percent of First Uranium (Proprietary) Limited for $335 million.
2013
Commissioning of two new gold projects – Tropicana and Kibali – in the second half of 2013.
2015
Sale of the Cripple Creek & Victor gold mine in the USA for $819 million.
CAPITAL EXPENDITURE
For information concerning the company’s principal capital expenditures and divestitures currently in progress, including the distribution of these investments geographically and the method of financing, refer “Item 4B: Business Overview–AngloGold Ashanti Global Operations: 2015”, “Item 5A: Operating Results–Capital expenditure” and “Item 5B: Liquidity and Capital Resources”.
4B. | BUSINESS OVERVIEW |
AngloGold Ashanti, is a global gold mining and exploration company with a globally diverse, world-class portfolio of mining operations and projects, on four continents, with more than 96% ofis headquartered in Johannesburg, South Africa. AngloGold Ashanti is the company’s revenue derived fromthird largest gold mining company in the sale of gold produced at its operations located around the world. The company works acrossworld, measured by production.
Our business activities span the full spectrum of the mining value chain.chain and take into account the impact of our activities on the varied and many communities and environments in which we operate.
PRODUCTS
AngloGold Ashanti’s main product is gold. Once mined, the gold ore is processed into doré (unrefined gold bars) on site and then dispatched to precious metals refineries for refining to a purity of at least 99.5%, in accordance with the standards of ‘good delivery’ as determined by the London Bullion Market Association (LBMA). This refined gold is then sold directly to bullion banks.
By-products of our gold mining operations, often a function of local geological characteristics, include silver (Argentina),in Argentina, sulphuric acid (Brazil)in Brazil and uranium (South Africa).in South Africa.
OPERATIONS
AngloGold Ashanti’s 21Our portfolio of 17 mines in nine countries, comprises long-life, relatively low-cost assets with differing ore body types, located in key gold-producing regions. A number of these assets are strongly leveraged to energy costs and currencies.
Our operations are locatedgrouped regionally as follows:
South Africa (Vaal River, West Wits and Surface Operations)
Continental Africa (Democratic Republic of the Congo, Ghana, Guinea, Mali and Tanzania)
Americas (Argentina and Brazil)
Australasia (Australia)
These operating assets are supported by greenfield projects in 11 countries.Colombia and a focused exploration programme.
Following a strategic review of AngloGold Ashanti’s asset portfolio atGiven the start of 2013, particularly as it pertains to development and exploration projects, the company embarked on significant restructuring in response to current challengescontinued decline in the gold sector, including increasingprice, the company continued to focus on containing and reducing costs, of productionimproving margins and fallactively managing its portfolio in gold prices.2015. In line with this, the Cripple Creek & Victor (CC&V) mine in the United States was sold in August 2015, Obuasi remained on limited operations in 2015 and the closure process at Yatela continued.
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 DRC, 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. Thegroup support functions from corporate consist ofcover planning and technical, strategy, sustainability, finance, human resources, legal, sustainability,and stakeholder relations andrelations. The planning and technical. Planning and Technicaltechnical function focuses on the management of opportunities and the maintenance of long-term optionality in the business through a range of activities which includes brownfields and greenfields exploration, innovative research, the development and technical assurance of technology and a continuing focus on mining excellence.
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 brownfieldOur exploration programme is aimed at providing an organic growth pipeline through which to create significant value for the company.
Greenfields and greenfieldbrownfields exploration programmes taketakes place in both established and new gold producinggold-producing regions through managed and non-managed joint ventures, strategic alliances and wholly-owned ground holdings. Greater emphasis is being placed on brownfield explorationAngloGold Ashanti’s discoveries include La Colosa, Gramalote and a few key greenfield opportunities carefully identified by managementQuebradona (Nuevo Chaquiro) in Colombia Guinea, and Tropicana in Australia.
GOLD MARKET
AngloGold Ashanti’s gold is refined at various precious metal refineries. In refined and marketable form, gold normally takesSpeculation around the shapetiming of bars, varyinga possible increase in size from 12.5 kilogram to smaller bars weighing 1 kilogram or less, all of which contain 99.5 percent gold. Through the refineries the gold is sold directly to bullion banks. Bullion banks are registered commercial banks which deal in gold, distributing bullion bought from mining companies and refineries to markets worldwide. These banks hold consignment stocks in all major physical markets and finance these inventories from the margins they charge physical buyers.
The physical gold market is dominated by the jewellery and investment sectors. The gold price is a primary factor influencing AngloGold Ashanti’s financial performance. In 2013,US interest rates weighed on the gold price registeredduring 2015. When the US Federal Reserve’s Open Market Committee (FOMC) finally raised rates at its first annual decline in 12 years, with16 December 2015 meeting, the company receiving an average monthly gold price fell sharply, despite the fact that the increase had been widely anticipated. However as year-end approached, the gold price rose again due to heightened fears of $1,401/oz duringfurther global macro-economic risks. Further uncertainty regarding the state of China’s economy as well as that of Europe caused markets to reassess their projections of future interest rate increases in the United States, helping to underpin the gold price.
Physical gold demand differed in the first and second halves of 2015. The first half of the year compared with $1,664/oz in 2012.
The declinesaw very tepid demand. However, the fall in the gold price around mid-July saw demand return strongly in what is traditionally a slow period for physical offtake. Another sharp drop in the price in November had a similar effect in drawing out demand. Thus, although overall physical demand for 2015 was relateddown compared to several factors, most notably a decisionthe previous year, it reacted positively when prices fell, which helped to support the company’s performance during these periods.
Investment demand, as evidenced by the US Federal Reserve to start slowing its monetary stimulus, or quantitative easing programme, which had been used to inject liquidity into financial markets and mitigate the worst effects of the global financial crisis. This tapering which is predicted on the recovery of the US economy, first hinted at early in the second half of 2013, brought forward expectations of rising interest rates, which in turn corresponded with retracement of the gold price and a general investor exit from so-called ‘risk-assets.’ When the exit from this monetary easing started in December, the impact extended to emerging market currencies. As of 2 April 2014, the gold price was $1,292 per ounce.
Investment demand
Steady liquidation of gold held in exchange traded funds, (ETFs) persisted throughout 2013. Acontinued to wane through 2015 with a total liquidation of 29Moz119t recorded for the year. However, this outflow was sold from combined ETF holdings in 2013, moreslower than the total investedoutflows recorded for 2013 (903t) and 2014 (155t).
Official sector buying continued in 2015 as central banks sought to continue diversifying their reserve assets. In July, China revealed that Chinese gold ETFs in 2011reserves had grown 50% since 2006, taking holdings to 1,658t. Since this announcement, the People’s Bank of China has begun regular reporting updates on its gold holdings and 2012 combined. Mostthese indicate that the Chinese central bank continues to accumulate gold. Another notable buyer from the official sector was Russia, which announced a purchase of this liquidation occurred77t in the secondthird quarter, when approximately 14Moz were sold, coinciding withtaking its total tally for the largest fallfirst nine months of 2015 to 144t.
COMPETITION
As gold mining is a mature and regulated industry, and very significant volumes of gold and gold derivatives trade in the quarterly averageworld markets independent of gold pricemine supply, AngloGold Ashanti does not consider that competition for sales plays any role in its operations as a gold producer. For more information on a geographical analysis of $366/ozgold income by destination, refer “Item 18: Note 2 – Segmental Information”.
However, gold producers do compete against each other for 2013. Atacquisition of mining assets, exploration opportunities and human resources. See “Item 3D: Risk Factors”.
SEASONALITY
Subject to other factors and unforeseen circumstances, quarter one production is generally lower than production during the endrest of the year ETF gold holdings totalled 60Moz.
Despite these sales, largely by institutional investors, according to the World Gold Council (WGC), demand of 48Moz for bars and coins from the retail sector, more than matched supply of 26Moz from ETF liquidations.
Speculative selling of gold, as reported by the Commitment of Traders Report (COTR), however, re-emerged in 2013 after several years at a negligible level. Record short positions of between 16Moz and 17Moz were established during June and July of 2013.
Central banks have 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 17.2Moz in 2012. However, official sector net purchases for 2013 are estimated by the WGC to have declined to between 12Moz to 13Moz. Nevertheless, central banks remain an important source of demand, accounting for purchases of 12Moz in 2013.
Jewellery demand
In addition to the demand for bars and coins, the jewellery market was also robust, with Chinese and Indian jewellery markets absorbing muchresult of the metal from ETF liquidation. Indian demand increased in 2013 despite tariffs imposed by the Indian government on gold imports in an attempt to curb a burgeoning current account deficit. In China, total demand for bars, coins and jewelleryramp-up of 34Moz in 2013 compared with 26Moz in 2012. In India, demand for these categories totalled 31Moz in 2013 and 28Moz in 2012.operations after annual holiday production declines.
RAW MATERIALS
AngloGold Ashanti uses chemicals, including cyanide and lime, in the production of gold. These chemicals are available from a large number of suppliers.
COMPETITION
As gold mining issuppliers and do not represent a mature and regulated industry, and very significant volumes of gold and gold derivatives trade in the world markets independent of gold mine supply, AngloGold Ashanti does not consider that competition for sales plays any role in its operations as a gold producer. However, gold producers do compete against each other for acquisition of mining assets, exploration opportunities and human resources.
INTELLECTUAL PROPERTY
AngloGold Ashanti, as a group, is not dependent on intellectual property for the conduct of its business as a whole.
SEASONALITY
Subject to other factors and unforeseen circumstances, quarter one production is generally lower than production during the restmaterial portion of the year as a result of the ramp-up of operations after annual holiday production declines.company’s costs.
STRATEGY
Our long-term objectiveAngloGold Ashanti’s core strategic focus is to create value for shareholders, employees and business and social partners by safely and responsibly exploring for and mining gold. In the short- and medium-term, we aim to delivergenerate sustainable improvements infree cash flow by focusing on five key business objectives, namely: people, safety and returns tosustainability; ensuring financial flexibility; actively managing all expenditures; improving the quality of our stakeholders.portfolio; and maintaining long-term optionality.
Strategic focus areas
AngloGold Ashanti’s five strategic focus areas are set out below:
Focus on people, safety and sustainability, people – employees and communities –. People are the foundation of our business. We focus on employing, deploying and developing the right people, and on providing them with meaningful employment and career development opportunities. We aimOur business must operate according to structure the organisation to support operational excellence. Safety remains our first priority, and our aimvalues if it is to eliminate fatalities and injuries. We will earn our social licence to operate by addressing and mitigatingremain sustainable in the social, economic and environmental impacts of our operations, and by creating a positive sustainable legacy. We are mindful of the need to balance short-term financial objectives with long-term sustainability outcomes. We seek to leverage expertise and competitive advantage to achieve the best possible outcomes for the company and for our partners in government, labour, the communities and civil society.long term.
EnsurePromote financial flexibility, we continue to optimise. We must ensure our balance sheet by diversifyingalways remains able to meet our sources ofcore funding and reducing debt, if appropriate, so as to ensure the financial flexibility required to support our overall strategy.needs.
Optimise overhead costs and capital expenditure, we aim. All spending decisions must be thoroughly scrutinised to optimise all spending – capital expenditure, operating costs, expensed explorationensure they are optimally structured and overheads –necessary to provide a competitive all-in sustaining cost of production in 2014. There is a drive at all levels of the organisation to eliminate ‘cost creep,’ regardless of market conditions.fulfil our core business objective.
Improve portfolio quality,. We have a key objective isportfolio of assets that must be actively managed to improve the quality and diversityoverall mix of our portfolio. In 2014,production base as 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 group 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 ounces produced.strive for a competitive valuation as a business.
Maintain long-term optionality,. While we will continue to invest in and develop new technology that hasare focused on ensuring the potential to transform access to deep-level underground Mineral Resources in South Africa. We will continue to seek cost-effective opportunities both aroundmost efficient day-to-day operation of our existing gold mines and in new regions, for example, the Tropicana belt in Australia, Guinea’s Siguiri belt andbusiness we must keep an eye on creating a collectioncompetitive pipeline of highly prospective areas in Colombia.long-term opportunities.
Managing performanceINTELLECTUAL PROPERTY
The five strategic focus areas are reflected in
AngloGold Ashanti, as a group, is not dependent on intellectual property for the role descriptionsconduct of each executive and senior manager in the group.its business as a whole.
THE REGULATORY ENVIRONMENT ENABLING ANGLOGOLD ASHANTI TO MINE
AngloGold Ashanti’s rights to own and exploit mineral reservesOre Reserve 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 always 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, or transfer assets within the group, without the prior consent of the local government or minority shareholders involved. See “Item 10D.:10D: Exchange controls” for details.
For more information on the risks and uncertainties associated with AngloGold Ashanti’s mining rights, see “Item 3D.: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 licenseslicences or permits, negative effects on AngloGold Ashanti’s reported financial results, and loss ofadversely affect its reputation”, “Title to AngloGold Ashanti’s properties may be uncertain and subject to challenge”, “AngloGold Ashanti’s Mineralmineral deposits, Ore 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 MineralOre 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
The MPRDA and the Revised Mining Charter
The Mineral and Petroleum Resources Development Act (MPRDA) came into effect on 1 May 2004. The objectives of the MPRDA are, amongamongst 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 socioeconomic 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, amongamongst 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.
When the MPRDAA came into effect on 7 June 2013, only selected provisions became effective immediately. The MPRDAA contains the following provisions, amongamongst others:
ProhibitionEnvironmental authorisations: Provides for a prohibition on any prospecting and mining, or conducting technical co-operation operations, reconnaissance operations or any incidental work without an environmental authorisation (from(since 7 December 2014), permit and at least 21 days’ written notice to the landowner or lawful occupier.
Historic residues: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:Applications: Provides that applicants for prospecting and mining rights must (after(since 7 December 2014) lodge an application for an environmental management programme/plan (EMP)authorisation simultaneously with the application for rights. The Department of Mineral Resources willshould no longer accept more than one application in respect of the same area and mineral.
Environmental Regulation: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: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 byunderwent an extensive public participation process and extensive comments were received from the general public. Following a consultative process with the Department of Mineral Resources (DMR), the State Law Advisors and the general public, the Portfolio Committee on Mineral Resources (Portfolio Committee) introduced an amended version of the 2013 Bill to the South African Parliament.
The 2013 Bill seeks to amend the MPRDAA,MPRDA, to, amongst other things:
remove ambiguities;
provide for regulation of associated minerals;minerals, partitioning of rights, and enhanced provisions on mineral beneficiation;
promote national energy security;
streamline administrative processes; and
enhance sanctions.
The 2013 Bill, as currently drafted, contains, amongamongst others, the following provisions:
Applications: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: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: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 2013 Bill would extend this definition to include historic mines and dumps created before the implementation of the MPRDA. The 2013 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: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: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, any portion of the financial provision paid to the Minister in terms of section 41 of the MPRDA willmay be retained by the Minister for 20 years afterlatent and residual environmental impact which may become known in the granting offuture for such period as the closure certificate.Minister may determine having regard to the circumstances relating to the relevant operation, which portion and period must be determined in the prescribed manner.
Penalties: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: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 (Mining Charter), the Revised Mining Charter and(defined below), the Code of Good Practice for the South African Mineral Industry (Code). and the Housing and Living Conditions Standard. 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 bewas sent to the President of the Republic of South Africa (President) for assent. On 16 January 2015, the President referred the 2013 Bill back to the National Assembly to accommodate his reservations around the constitutionality of the 2013 Bill. The National Assembly has yet to reconsider the 2013 Bill in light of the President’s reservations around its constitutionality. Once the National Assembly considers the 2013 Bill and sends it back to the President for assent, the President will then either assent to the 2013 Bill or, if he thinks that his reservations around the constitutionality of the 2013 Bill have still not been addressed he can either assent to the 2013 Bill anyway (i.e. accept that the 2013 Bill should become law despite his reservations) or he can refer the 2013 Bill to the Constitutional Court of South Africa for a decision on its constitutionality.
The Mining Charter
The Mining Charter sprang from the 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. The Charter also sets targets for, amongamongst other things, the advancement 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 companies are required to devise plans to achieve these targets, must identify current levels of beneficiation and must indicate opportunities for growth.
The objectives of the Mining Charter are to:
promote equitable access to the nation’s mineral resourcesMineral 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;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, amongamongst 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 Mining Charter, the mining industry as a whole agreed to assist HDSA companies in securing finance to fund participation in an amount of RandZAR 100 billion ($10.9 billion) over the first five years. Beyond the RandZAR 100 billion commitment, HDSA participation willwas to 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)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 5five 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 sets out the requirements of the Charter in tabular form which allows the DMR to “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 rural development;
housing and living conditions;
ownership and joint ventures;
beneficiation; and
reporting.
The new Scorecard attached to the Revised Mining Charter makesmade provision for a phased-in approach for compliance with the above targets over the 5-yearfive-year period endingended on 30 April 2014. For measurement purposes, the Scorecard allocatesallocated 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 may prevent AngloGold Ashanti’s South African operations from obtaining any new mining rights. However, AngloGold Ashanti has not yet received its “Scorecard” from the government assessing its compliance with the requirements of the Charter.
In March 2015, the Minister of Mineral Resources announced that the Department of Mineral Resources and the Chamber of Mines of South Africa had jointly agreed to submit certain matters relating to the interpretation of the Revised Mining Charter, including the qualification of certain historical BBBEE transactions (defined below) for meeting the HDSA ownership thresholds, to the courts in South Africa for determination and clarification. Papers have been filed by the Chamber of Mines of South Africa and the DMR, the parties appeared in court on 15 March 2016 and we await the court’s judgement.
On 9 March 2016, AngloGold Ashanti received a notice from the DMR stating that the company was not compliant with the 26 percent HDSA ownership requirement. The notice directed the company to remedy the non-compliance within 60 days. Failure to comply with the order would constitute an offence under the MPRDA and, as such, could negatively impact AngloGold Ashanti’s “Scorecard” assessment. AngloGold Ashanti has challenged the order.
The Code
On 29 April 2009, as required by section 100(1)(b) of the MPRDA, the Minister published the 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.
Environmental laws relating to mining and prospecting
The MPRDAA repealed the sections in the MPRDA that dealt with environmental regulation of mining and prospecting operations. This was the first step in migrating the environmental regulation provisions from the MPRDA into NEMA. NEMA was amended by the National Environmental Management Amendment Act no. 62 of 2008 and then again by the National Environmental Management Laws Amendment Act 25 of 2014 which came into effect on 2 September 2014. NEMA now includes provisions to deal with environmental regulation of mining and prospecting which provisions are administered by the Minister of Mineral Resources. In addition, The Regulations Pertaining to the Financial Provision for Prospecting, Exploration, Mining or Production Operations were published in the government gazette on 20 November 2015 under GNR 1147 Notice 39425 (New Financial Provision Regulations), and now fall under NEMA.
While the New Financial Provision Regulations are similar to the previous provisions under the MPRDA, some of the significant changes are set forth below:
broadening the definition of “financial provision” to require making financial provision for the adverse impacts that might arise from operations rather than only those listed in the environmental management plan (EMP), as was previously the case;
requiring the holder to annually assess environmental liability and adjust the financial provision to the satisfaction of the Minister of Mineral Resources;
requiring the holder to submit an audit report to the Minister of Mineral Resources on the adequacy of the financial provision from an independent auditor. If the Minister of Mineral Resources is not satisfied with the assessment, he is entitled to appoint his own auditor;
requiring that a holder maintain and retain financial provision notwithstanding the issuance of a closure certificate. Furthermore, the Minister may retain such portion of the financial provision as may be required to rehabilitate the closed mining or prospecting operation in respect of latent, residual or any other environmental impacts, including the pumping of polluted or extraneous water, for a prescribed period. This is not only in respect of holders of rights, but also now in respect of holders of old order rights and holders of works;
before the coming in to effect of the New Financial Provision Regulations, holders could make financial provision for annual rehabilitation, final rehabilitation and post-closure residual impacts and water pumping by adding up the total amount for these three types of rehabilitation and making financial provision in one go using one or a mix of four methods: depositing cash in to the DMR bank account, keeping the amount in a rehabilitation trust in accordance with the Income Tax Act, 1962, obtaining a financial guarantee or a bank guarantee in respect of the amount, or using a method determined by the Director-General (this was not common in practice). Under the New Financial Provision Regulations, if the holder wishes to use a rehabilitation trust in accordance with the Income Tax Act, 1962, the amount in the trust can only relate to financial provision for post-closure residual impacts and water pumping. Holders can no longer make financial provision for annual and final closure through a trust fund;
a holder’s financial provision must be equal to the sum of actual costs of implementing all three broad classes of rehabilitation for at least 10 years; and
the financial provision liability associated with annual rehabilitation, final closure or latent or residual environmental impacts may not be deferred against assets at mine closure or mine infrastructure salvage value.
Failure to realign to the new system constitutes non-compliance with section 24P of NEMA, which would entitle the DMR to issue a directive and failure to comply with the directive is an offence under section 49A(g) of NEMA. A person convicted of an offence under section 49A(g) of NEMA is liable to a fine not exceeding ZAR10 million or to imprisonment for a period not exceeding 10 years, or to both.
Pursuant to section 24N(8) of NEMA, directors of a company are jointly and severally liable for any negative impact on the environment, whether advertently or inadvertently caused by the company they represent, including damage, degradation and pollution.
See also “Item 4B: Business Overview—Mine Site Rehabilitation and Closure” and “Item 4B: Business Overview—Environmental, Health and Safety Matters”.
AngloGold Ashanti’s rights and permits
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 seven mining rights in South Africa which have been successfully converted, executed and registered as new order mining rights at the Mineral and Petroleum Resources Titles Registration Office (MPRTO)(MPTRO).
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 holds two prospecting rights and is currently applying for an additionalone prospecting right.
AngloGold Ashanti also holds a mining permit for the recovery of sand and clay, which is in the process of being renewed.clay. A renewal application has been timely submitted and AngloGold Ashanti awaits renewal.
AngloGold Ashanti holds a refining licenselicence and an import and export permit from 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 2723 January 2014. The BBBEE Amendment Act will amendcame into effect on 24 October 2014 with the object of amending 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 (BBBEE Codes), 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;codes (Sector 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 DTIthe Department of Trade and Industry (DTI) may impose special requirements for specific industries.
TheBefore the BBBEE Amendment Act has not comecame into force and will do so on a date to be proclaimed byeffect, the President. The BBBEE Act providesprovided that in the event of a conflict between the BBBEE Act and any other law in force immediately prior to the commencement of the BBBEE Act, the BBBEE Act prevailswould prevail if the conflict specifically relates to a matter addressed in the BBBEE Act. The BBBEE Amendment Act inserted a new provision in the BBBEE Act whereby the BBBEE Act trumps the provisions of any other law in South Africa with which it conflicts, provided such conflicting law was in force immediately prior to the effective date of the BBBEE Amendment Act. The provision will be effective as from 24 October 2016.
On 27 October 2015, the Minister for Trade and Industry published Government Notice 1047 of Government Gazette 39350, which declared an exemption in favour of the DMR from applying the requirements contained in section 10(1) of the BBBEE Act for a period of 12 months. The exemption can be read as confirmation that the DTI sees the BBBEE Codes as “applicable” to the Mining Industry after the exemption is lifted on 27 October 2016.
Additionally, the revised BBBEE Codes of Good Practice (Revised BEE Codes) became effective on 01 May 2015. Both the BBBEE Amendment Act and the Revised BEE Codes expressly stipulate that where an economic sector in South Africa has a Sector Code in place for BEE purposes, companies in that sector must comply with the Sector Code. For purposes of the BBBEE Act, the Revised Mining Charter is not a Sector Code. It is not, at this stage, clear what the interplay between the
Revised Mining Charter and the BBBEE Act and Revised BEE Codes is. The government may designate the Revised Mining Charter as a Sector Code in which case it would be under the auspices of the BBBEE Act, but has not chosen to do so in its government gazette notice of 17 February 2016. Until such determination is made, if at all, the Revised Mining Charter remains a stand-alone document under the auspices of the MPRDA and may become subject to the trumping provision discussed above. This uncertainty might be resolved either by government clarification in this regard or by the matter receiving judicial attention.
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)silver) 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 5five 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 resourcesMineral Resources (such as uranium) constitute less than 10 percent in value of the total composite mineral resources,Mineral Resources, the royalty rate in respect of refined mineral resourcesMineral Resources may be used for all gross sales and a separate calculation of EBIT for each class of mineral resourcesMineral Resources is not required. For AngloGold Ashanti, this means that currently the company will pay a royalty based on refined mineral resourcesMineral Resources (as the unrefined mineral resourcesMineral Resources (such as uranium) for AngloGold Ashanti for 20132015 constituted less than 10 percent in value of the total composite mineral resources)Mineral Resources). The rate of royalty tax payable for 20132015 was 0.90.50 percent of revenue of the company’s South African operations.
The President has appointed a committee to review the current mining tax regime. The committee, which is undergoing a review not just of the mining tax regime but of the entire South African tax regime, is currently sitting. On 13 August 2015, the committee released for public comment the First Interim Report on Mining which was submitted on 01 July 2015 to the Minister of Finance. The committee has not proposed any changes to the royalty regime in this First Interim Report.
Some of the other preliminary recommendations of the committee have included the upfront capital expenditure write-off regime being discontinued and replaced with an accelerated capital expenditure depreciation regime, which is in parity with the write-off periods provided for in respect of the manufacturing (40/20/20/20) basis. Another recommendation has been to bring the taxation of newly established gold mines into line with the tax regime applicable to non-gold mining taxpayers (in so far as possible). The committee has recommended that the so called “gold formula” be retained for existing gold mines. Given the retention of the gold formula for existing gold mines, it will be necessary to retain ring fences in mines where the gold formula subsists. With regard to the additional capital allowances available to gold mines, the committee has recommended that such allowances should be phased out so as to bring the gold mining corporate income tax regime into parity with the tax system applicable to taxpayers as a whole.
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 Mining Regulations, promulgated in March 2003 (DRC Mining Code). The DRC Mining Code vests the Minister of Mines with the authority to grant, refuse, suspend and terminate mineral rights.rights, although such authority is to be exercised upon conditions set out in the Mining Code. Mineral rights may be granted in the form of exploration permits for an initial period of four years or 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 licenselicence or a small-scale mining permit. Mining permits are granted upon successful completion of exploration and satisfaction of certain requirements, including approval of a feasibility study, 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 such permit. Failure to do so may lead to forfeiture of the mining permit. A permit holder must comply with specific rules relating to, amongamongst others, protection of the environment, cultural heritage, health and safety, construction and infrastructure planning. Mining and exploration activities are required to be undertaken so as to affect as little as possible the interests of lawful occupants of land and surface rights holders, including their customary rights. The exercise of mineral rights by title holders which effectively deprives or interferes with the rights of occupants and surface rights holders requires payment of fair compensation by the mineral title holder.
To protect and enforce rights acquired under an exploration or mining permit, the DRC Mining Code provides, depending 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. It also provides for a level of fiscal stability, in that existing tax, customs, exchange and benefits applicable to the mining activities of a mining title holder are guaranteed to remain unchanged, for a period of 10 years in favouras from the date of a mining title holder in the event thatany amendments to the DRC Mining Code that 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 DRC.
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 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 5five percent and on 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 a 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 overhaulreform of the DRC’s mining code. The proposed laws seek to, among other things, increasereform, which would have increased royalties payable on certain minerals, boosted 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 introduceintroduced a 50 percent levy on certain profits. Shouldprofits, among other changes, was postponed in February 2016 in light of the adverse impact of the collapse in commodity prices on existing mining activities. However, 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.
AngloGold Ashanti holds a stake in the Kibali gold project located in north-eastern DRC. The project is operated by Randgold Resources and is owned by Randgold Resources (45 percent), AngloGold Ashanti (45 percent) and SOKIMO (10 percent), which latter share represents the interest of the DRC government in the Kibali gold project.
Kibali comprises 10 permits, 7 expiring in 2029 and 3 in 2030 and covering an area of 1,836 square kilometres in the Moto goldfields of the northeast DRC.
On 27 February, 2015 AngloGold Ashanti also holds the majoritysold its stake and is the operator ofin Ashanti Goldfields Kilo, (86.22 percent), an exploration and mining joint venture with Société Minière de Kilo-Moto SA UNISARL (SOKIMO) (13.78 percent), to Fimosa Capital.
AngloGold Ashanti remains invested in the DRC through the Kibali Gold Project which it holds through a state-owned gold company.joint venture with Randgold Resources and SOKIMO.
Ghana
The Constitution of Ghana as well as the Minerals and Mining Act, 2006 (Act 703) (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 reconnaissance, prospecting, recovery and associated land usage being granted under licenselicence or lease.
The grant of a mining lease by the Ghana Minister of MinesLands & Natural Resources (MOLNR) is normally subject to parliamentary ratification unless the mining lease falls into a class of transactions exempted by Parliament.
Control of mining companies
The Ghana Minister of MinesMOLNR has the power to object to a person becoming or remaining a shareholder controller a majority shareholder controller or an “indirect controller” of a company which has been granted a mining lease if the Minister believes, on reasonable grounds, that the public interest would be prejudiced by the person concerned becoming or remaining such a controller.
Stability agreement
The GMM Act provides for stability agreements as a mechanism to ensure that the incentivesguarantee certain terms and protection afforded by laws in force at the time of the stability agreementconditions, mainly fiscal, to which a company’s operations are guaranteedsubject for a period of 15 years. Stability agreements are subject to ratification by Parliament.
Prior to the business combination between AngloGold and Ashanti in April 2004, AngloGold and the governmentGovernment of Ghana agreed on the terms of a stability agreement (the “Ghana(Ghana Stability Agreement”)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 Ghana Stability Agreement necessitated the amendment of the Obuasi mining lease which had been ratified by Parliament.
Under the Ghana Stability Agreement, the governmentGovernment 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 income tax rate would be 30 percent for a period of 15 years. The agreement was amended in December 2006 to make the tax rate equal to the prevailing corporate rate for listed companies 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’sGovernment’s approval. Furthermore, the governmentGovernment 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 governmentGovernment 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.
The governmentGovernment of Ghana has constituted a review committee to review and renegotiate stability agreements with the mining companies.companies (Committee). Within the committee’sCommittee’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), and the preparation of guidelines to govern the granting of stability agreements in the mining industry. We are currently participatingAngloGold Ashanti Ghana is waiting to be invited to participate in negotiations with the Ghanaian review committee.
Tax laws
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 5five percent allowance on prior year additions. Prior to the 2012 amendment, the tax code granted an additional 5five 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 value of the assets. Pursuant to the Ghana Stability Agreement, this change will not affect AngloGold Ashanti until 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 Ghana Stability Agreement, this change will not affect AngloGold Ashanti until 2019.
WhileGolden Share
Under the Stability Agreement, protectsthe 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 fromoutside Ghana, nor to any new enactments that would impose obligations uponassets 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 Ghanaiandirect 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 authorised 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). |
Upon a return of assets in a winding-up or liquidation of AngloGold Ashanti (Ghana) Limited, the holder of the Golden Share is entitled to the sum of 0.10 cedis in priority to any payment to other members, but the Golden Share confers no further right to participate in the profits or assets of AngloGold Ashanti. The Golden Share carries no right to any dividend or any right to participate in any offer of securities to existing shareholders or in any capitalisation issue.
The holder of the Golden Share may require AngloGold Ashanti (Ghana) Limited to redeem the Golden Share at any time in consideration of the payment to such holder of 0.10 cedis.
VAT
In December 2013, the Parliament of Ghana has constituted(Parliament) passed an amendment to the Internal Revenue Act, 2000 (Act 592) known as the Internal Revenue (Amendment) (No. 2) Act 2013, (Act 871). This, amongst other changes, increased the withholding tax for goods and services supplied by non residents, payments to non-resident individuals and payment for management and technical services from 15 percent to 20 percent. A new Value Added Tax Act, (VAT) 2013 (Act 870) was also passed which increases the VAT payable on goods and services from 15 percent to 17.5 percent. The Value Added Tax 2013, (Act 870) extended the coverage of the tax to some business activities which were hitherto outside the tax net. These included the supply of financial services that are rendered for a teamfee, commission or a similar charge and the manufacture or supply of pharmaceuticals. The implementation of the charging of VAT in relation to renegotiate stability agreements withthese two services have however been suspended until further notice. These taxes do not have an adverse effect on the Company since they do not directly impact its operations.
Income taxes
In November 2015, Parliament passed the Income Tax Act, 2015 (Act 896) (ITA) which repealed the Internal Revenue Act, 2000, (Act 592), as amended. The ITA became effective from 01 January 2016 for the 2016 year of assessment. The ITA ring fences and taxes income derived from mining companies. A government committee has invitedoperations at the rate of 35 percent. For the purpose of ascertaining the income of a person for taxation, each separate mineral operation is treated as independent business and taxed accordingly. Pursuant to section 2.06 of the Stability Agreement, the ring fencing provision will not apply to AngloGold Ashanti until 2019 and until then the company’s tax exposure will not exceed 30 percent.
The ITA provides for discussionsthe carrying forward of losses for up to five years. Losses carried forward can only be used in the order in which they were generated or incurred. The ITA further provides that capital allowances calculated or granted shall be taken in that year and requested certain information. shall not be deferred.
The government may intendITA states that expenditure incurred in the course of reconnaissance or prospecting operations shall be placed in a single pool, and the balance in that pool is to reviewbe carried forward year to year until commencement of production. When production commences, the amount in the pool must be capitalized and the Commissioner-General of the Ghana Stability Agreement.Revenue Authority shall grant a capital allowance in respect thereof. The ITA also provides guidance on how costs incurred during the reconnaissance and exploration phase of a mine ought to be treated.
The ITA imposes a withholding tax on dividends paid by a person conducting mineral operations in Ghana at eight percent. This is regardless of the amount of shareholding a shareholder or shareholders may have in the entity paying the dividend. Under section 59 (3) of the ITA, an exemption from tax exists where the recipient of the dividend holds or controls directly or indirectly at least 25 percent of the voting power of the company paying the dividend.
The ITA also introduces some variation in the rates of withholding taxes. For example payments for the supply of services (Payments with a Source in Ghana to Persons Other Than Individuals) has been increased from 5 percent to 15 percent; the withholding tax on resident Directors’ remuneration has been increased from 10 percent to 20 percent; and withholding taxes on natural resource payments and royalties have been increased from 10 percent to 15 percent. This may have an indirect impact on AngloGold Ashanti’s operations as this rate will have a material impact on the margins of suppliers and possibly their working capital. Suppliers may therefore seek to pass this on to AngloGold Ashanti by increasing their fees and charges.
The ITA also abolishes the flat 15 percent rate of tax on capital gains. Capital gains are now to be included in business or investment income and taxed at the applicable income tax rate which, for persons engaged in mineral operations, is 35 percent.
Retention of foreign earnings
AngloGold Ashanti’s operations in Ghana are permitted to retain 80 percent of their foreign exchange 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 paymentsfulfill payment obligations to the company’s hedge counterparties which cannot be met from the cash resources of its treasury company. On 4 February 2014, the Bank of Ghana issued new directives as part of measures to streamline the collection and repatriation of export proceeds to Ghana. These directives included an instruction to all banks and authorised dealers to, within 5five working days of receipt of export proceeds, convert the proceeds into Ghana cedis based on the average Interbank Foreign Exchange Rate prevailing on the day of conversion with a spread not exceeding 200 percentage in points (pips). Exporters with retention accounts were to continue to operate these accounts in accordance with their retention agreements. Retention proceeds which were sold to the banks were to be converted into Ghana cedis based on the average Interbank Foreign Exchange Rate prevailing on the day of conversion with a spread not exceeding 200 pips. It further advised that offshore foreign exchange transactions by resident companies, including exporters, were strictly prohibited and exporters were to ensure that all export proceeds are repatriated in full. Failure to comply with the provisions attracts penalties including pecuniary sanctions, jail terms, suspension and revocation of the operating licence as applicable.
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.
The Bank of Ghana on 9 August 2014 further revised the rules on foreign exchange operations, effectively reversing the initial directives controlling transactions in foreign exchange. The details are as follows:
1. | The limit of $1000.00 on over-the-counter foreign exchange cash withdrawal is removed. |
2. | Exporters shall continue to repatriate in full export proceeds in accordance with the terms agreed between the trading parties. Such proceeds shall be credited to their FEAs and converted on a need basis. |
3. | FEAs and FCAs will continue to be opened and operated as they were before the Notices of February 4, 2014. |
4. | Except for transfers from FEA to FCA which are still prohibited, all other transfers between accounts are permitted. |
5. | For the avoidance of doubt: |
a. | FCAs shall be fed only with unrequited transfers such as transfers from abroad for investment or embassy transfers. |
b. | FEAs shall be fed with foreign exchange generated from activities in Ghana such as proceeds from exports of goods and services. |
6. | The threshold for transfers abroad without initial documentation remains at $50,000.00. Where documentation in respect of a transfer remains outstanding, any subsequent import transaction by an importer, irrespective of value, shall only be made on prior provision of documentation required for the current import transaction. |
7. | Importers who use non-cash instruments (plastic cards) may continue to load up to $50,000 to meet their legitimate needs abroad subject to the necessary documentation requirements. |
8. | Foreign currency denominated loans may be granted by resident banks to their customers subject to their own internal procedures and processes and in compliance with the risk management guidelines of the Bank of Ghana. |
9. | Cheques and cheque books may be issued by banks to holders of FEAs and FCAs. |
The Bank of Ghana reiterated that the Ghana cedi remains the sole legal tender in Ghana. Therefore, pricing, advertising, invoicing, receiving, and making payments for goods and services should be done in Ghana cedis, unless otherwise authorized by the Bank of Ghana.
Existing measures that were not amended by this Notice continue to remain in force.
In light of the recent clarifications, AGAAngloGold Ashanti maintains and operates its FCA, FEA and Retention Accounts in compliance with the directives.
Localisation policy
Mining companies must submit a detailed programme for the recruitment and training of Ghanaians with a view to achieving “localisation”, which is the replacement of expatriate personnel in a company’s Ghanaian operations by Ghanaian personnel. In addition, mining companies must give preference to Ghanaian products and personnel, to the maximum extent possible, consistent with safety, efficiency and economies. Recently passed Minerals and Mining (General) Regulations, 2012 (L.I. 2173) give further details on the localisation policy.
Except as otherwise provided in a specific mining lease, all immovable assets of the holder of the mining lease vest in the State upon 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 state 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.
Ground rent
In 2012, the Ghanaian Parliament passed the Fees and Charges Amendment Legislation 2012 (Ll 2191), which fixed mineral concession rent at Gh¢9,016 per square kilometre per annum as opposed to the previous rate of Gh¢0.50 per acre per annum. However, on 19 March 2014, the Office of the Administrator of Stool Lands informed the Ministry of Finance in writing that it has agreed with the Ghana Chamber of Mines to revise the fees to Gh¢15.0 per acre per annum. The Chamber has since 2 September 2014 instructed all mining companies to pay the agreed sum. The company has since paid the agreed ground rent for its Binsere Leases but paid $36 per km2 for the Obuasi lease as specifically provided for in the lease. The company also indicated to the Office of the Administrator of Stool Lands that by virtue of the Stability Agreement, the company is protected from the increase in the ground rent, and that the company’s payment of same cannot be deemed as a waiver of its rights under the Stability Agreement.
National Fiscal Stabilisation (Amendment) Act, 2014 (Act 882)
The National Fiscal Stabilisation (Amendment) Act has extended the application of the National Fiscal Stabilisation Levy to net profits before tax up to and including the 2017 year of assessment. In the past, AngloGold Ashanti has sought protection under the Stability Agreement and this has been granted. AngloGold Ashanti will therefore continue seeking the protection.
Special Import Levy Act, 2014 (Act 884)
The Special Import Levy Act has extended the application of the National Fiscal Stabilisation Levy to profits before tax up to and including the 2017 year of assessment.
Customs and Excise (Petroleum Taxes and Petroleum Related Levies) (Amendment) Act, 2014 (Act 886)
The Customs and Excise (Petroleum Taxes and Petroleum Related Levies) (Amendment) Act reversed the excise tax on petroleum products (petroleum, gas oil, residual fuel oil, unified gasoline, kerosene, liquefied petroleum gas and local marine gas) from ad valorem to specific tax.
Energy Sector Levies Act, 2015 (Act 899)
The Energy Sector Levies Act, which received assent on 24 December 2015, consolidates existing energy sector levies and imposes a new levy, the Price Stabilization and Recovery Levy. The Price Stabilization and Recovery Levy, which is to be collected by the National Petroleum Authority and paid into the Price Stabilisation and Recoveries Account, applies to petrol at a rate of 12 Ghana pesewas per litre, to diesel at a rate of 10 Ghana pesewas per litre, and to liquefied petroleum gas at a rate of 10 Ghana pesewas per kilogram.
Minerals and Mining (Amendment) Act 2015 (Act 900)
A Minerals and Mining (Amendment) Act was passed by Parliament and assented to by the President on 16 December 2015. It replaces the existing royalty provisions introduced by the Minerals and Mining Amendment Act, 2010 (Act 794) pursuant to which the rate of royalties was fixed by an Act of Parliament. Under the new regime, the Minister will prescribe the rate payable and the manner of payment by passing a Legislative Instrument or other subsidiary legislation. The existing royalty rate of five percent however remains the same until such time as the rate is altered in the manner prescribed. The Minerals and Mining (Amendment) Act 2015 also makes provision for the confiscation of the equipment of illegal miners.
Minerals Development Fund Bill, 2014
Parliament is also currently considering the Minerals Development Fund Bill, 2014. The purpose of the Bill is to establish a Minerals Development Fund to provide the legal basis for the distribution of 20 percent of mineral royalties received by Government which has been apportioned to specified bodies for their use. It also introduces the Mining Community Development Scheme to directly sponsor socio-economic development in communities in which mining operations take place or which are affected by mining operations.
Mining & Environmental Guidelines
In June 2014, the Ghana Environmental Protection Agency and the Minerals Commission circulated draft Mining and Environmental Guidelines to all mining companies for comment. The guidelines concern environmental management, reclamation, closure requirements and the proposed Mining Community Development Scheme discussed above. Although the guidelines are yet to be agreed upon by stakeholders, it is proposed that the scheme would be funded by said 20 percent of mineral royalties, additional contributions from the mining companies, donations and grants from other sources.
Rules regarding the export of gold and diamonds
The Bank of Ghana introduced new measures to regulate and monitor the export of gold and diamonds from Ghana. From 15 September 2015, all exports of gold and diamonds must be carried out through the Precious Minerals Marketing Company, except where the exporter is the holder of a licence that permits it to export directly, and the Ghana Revenue Authority (Customs Division) only permits gold to be exported by a licensed gold exporter who has a completed Form FEX A4 bearing Bank of Ghana’s embossment. The export measures do not apply to AngloGold Ashanti because the company holds a licence granted by the Minister for Land and Natural Resources to sell and export its production.
Budget Statements
In the November 2014 Budget Statement, a Special Petroleum Tax of 17.5 percent was proposed as part of a rationalisation of the VAT regime and change in the petroleum pricing structure.
Mining properties
The company is required to pay ground rent to the governmentGovernment 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 1994. It grants mining rightsconcessions to land with an area of approximately 334338 square kilometres 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, a mining lease over an adjacent 140 square kilometres was also granted, resulting in the total area under the mining lease increasing to 474 square 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 2008.
On 20 January 2014, AGAG submitted an application to3 March 2016, the Minerals Commission approved AngloGold Ashanti Ghana’s application to surrender approximately 289.34273.54 square kilometres of the area to the governmentGovernment of Ghana. Upon issuance by the government of the certificate of surrender,Ghana, reducing the lease areas will be reduced to 185.66201.46 square kilometres. The remaining parcel of land that will be subject to the mining lease is situated within various villages and townships in the region, but excludes the municipality of Obuasi.
Iduapriem
Iduapriem has title to a 3331 square kilometre mining lease granted on 19 April 1989 for a period of 30 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 48.34 square kilometres. In December 2011 the Minister of Lands and Natural Resources gave his consent for Teberebie’s title to a 25.83 square kilometre mining lease, granted in June 1992 for a period of 30 years, to be assigned to Iduapriem. While ownership of the lease has passed to Iduapriem, the registration of the transfer of the lease is still in process.
Guinea
In Guinea, all mineral substances are the property of the state.State. Mining activities are currently regulated by law L/2011/006/CNT dated 9 September 2011 (the “2011 Code”)(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 “NewNew Mining Code”)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,licence, exploration licence, mining prospecting license, mining licenselicence 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, covered by a mining convention which was entered into with the Republic of Guinea on 11 November 1993 (the “Convention(Convention de Base”)Base). The mining concession, granted to SAG following the execution of the Convention de Base, was consequently redefined by virtue of Presidential Decree D/97/171/PRG/SGG dated 4 August 1997, granted to SAG following the execution of the Convention de Base.1997. The Convention de Base was amended in 2005. The Convention de Base provides for a duration of 25 years, 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 kilometres was reduced to a concession area of four blocks totalling 1,495 square kilometres. SAG has the exclusive right to explore and mine in the remaining Siguiri concession area for the duration of the initial period of the Convention de Base.
Key elements of the Convention de Base are that:
The Republic of Guinea holds a 15 percent free-carried or non-contributory interest; is entitled to a royalty of 3three percent based on a spot gold price of less than $475 per ounce; and is owed 5five 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 it, if all project activities are voluntarily suspended for a continuous period of eight months or are permanently abandoned by AngloGold Ashanti’s subsidiary; or if SAG goes into voluntary liquidation or is placed into liquidation by a court of competent jurisdiction.
New Mining Code
Pursuant to the New Mining Code, existing mining titles in effect on the date 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 new 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 the mining convention holder and the State (the “Addendum”)(Addendum). The Addendum isThese amendments are required to 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. They are subject to final ratification by Presidential decree. Mining companies mustwere required to cooperate in view of the conclusion of the Addendumthese amendments within a 24-month delay following the publication of the New Mining Code. The 24-month delay periodCode: that is, expected to end onby or shortly before June 2015. However, the New Mining Code does not impose any consequence to this deadline not being met and the parties are invited to meet and discuss in order to reach, as soon as possible, an agreement on the amendments.
To that effect, the Government has established a Technical Committee, supported by a Strategic Committee, to conduct the renegotiationsrenegotiation of all the mining contracts including the Convention de Base. Until ratification of the Addendum,amendments, the terms of the current Convention de Base apply.
The type of amendments expected to be contained in the Addendum,made to a mining convention, 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. |
The exact scope of the amendments will depend on the outcome of the negotiations with the Technical Committee. 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 Technical Committee, it can be anticipated that the Addendum will contain the Mandatory Provisions and will also provide a time table for the implementation of the Progressive Provisions.
With respect to the Mandatory 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 assignment of titles, on the transfer of shares in the company holding the mining titles and on an acquisition of participation leading to 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 limitation on tax stability. The current 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/2014/012/PRG/SGG on the management of mining authorisation and titles, D/2014/013/PRG/SGG dated 17 January 2014 relating to the 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 social impact study for mining operations and decree D/2014/015/PRG/SGG adopting a model of mining convention, all dated 17 January 2014, have been adopted. In addition, decree D/2015/016/PRG/SGG on the government appointment of Guinean directors of mining companies, was adopted on 12 February 2015.
Mali
Mineral rights in Mali are governed by law n°2010-015 dated 27 February 2012 bearing Malian Mining Code (the “New(New Mining Code”)Code), replacing ordinance No. 99-32/P- RMP-RM of 19 August 1999 enacting the previous mining code, as amended by ordinance n°013/2000/P-RM of 10 February 2000 and ratified by law n°00-011 of 30 May 2000 (the “1999(1999 Mining Code”)Code), and Decree No. 99-255/P-RM of 15 September 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 authorisations (authorisation(autorisation de prospection). 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 covered by the authorisation. Exploration activities may be carried out under exploration permits (permis de recherche). The latter are granted to corporate entities only by order of the Minister of Mines. Exploration permits are granted for a period of three years, renewable twice for additional three-year periods. Each renewal requires the permit holder 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 authorisation or an exploration permit. The exploitation permit grants an exclusive right to prospect, explore 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 authorisation and covers only the area governed by the exploration permit or the prospecting authorisation. An application must be submitted to the Minister of Mines and to the National Director of Mines.
As soon as the exploitation permit is granted, the permit holder must incorporate a company under the law of Mali. The permit holder will assign the permit for free to this company. The State will have a 10 percent free carried interest in the company. This interest will be converted into priority shares and the State’s participation will not be diluted in case of an increase in capital.
Applications for exploitation permits must contain various documents attesting to the financial and technical capacity of the applicant, a detailed environmental study in respect of the impact of the project on the environment, a feasibility study and a bank deposit. The permit is granted by decree of the Head of Government. Refusal to grant a permit may only be based on two grounds: insufficient evidence to support the exploitation of the deposit or the failure of the environmental study.
Applications for prospecting authorisations and exploration permits must contain various documents attesting to the financial and technical capacity of the applicant, a detailed works and costs program,programme, a map defining the area which is being requested and providing geographical coordinates, 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 of Mines to the applicant.
All mining titles mentioned above require an establishment convention (convention d’etablissement)d’établissement) 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 general provisions regarding exploration (work program,programme, fiscal and customs framework) and exploitation (formation of a local limited liability mining company, State interest, fiscal and customs framework governing construction and exploitation phases, exchange controls, marketing of the product, accounting regime, training programsprogrammes for local labour, protection of the environment, reclamation, safety, hygiene and 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 2024,2029, 2020 and 2024 respectively.
Namibia
The Minerals (Prospecting Morila’s Exploitation Permit covers approximately 200 square kilometres and Mining) Act 33 of 1992 (MPM Act) provides that all rights to minerals in the Republic of Namibia vest in the state. 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 undertakewas issued on 4 August 1999. Sadiola’s original prospecting and mining operations can only be acquired by virtue of one ofexploitation agreement was entered into on 15 April 1990. Yatela is implementing a closure plan in order to relinquish 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 for minerals, the Ministry of Mines and Energy may grant an Exclusive Prospecting License or a Non-exclusive Prospecting License. Upon application and presentation of a feasibility study, the Ministry then grants a Mining 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 its mining, financial and technical capabilities), projected rehabilitation programmes 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 objectives 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. Its current 15-year Mining License expires in October 2018. An application has been presented to the Ministry of Mines and Energy 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 have 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 increased 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 companies, 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 be exported and are of such a nature that their value can be increased by way of a practical and economical refining process that is available in Namibia.property.
Tanzania
Mineral rights
Mineral rights in the United Republic of Tanzania are principally governed by the Mining Act of 2010 (Tanzania Mining Act), and the Mining Regulations, 2010 (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 Environmental 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 on, in or under the land vest in the President of the United Republic of Tanzania. No person is allowed to prospect for minerals or carry on mining operations except pursuant to the authority of a mineral right licenselicence granted, or 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.licence. Upon presentation of a feasibility study, together with certain other environmental, social and financial assurances, the MEM may then grant a form of licenselicence 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 licenseslicences can be applied for under the Tanzania Mining Act:
LicensesLicences for Exploration:
prospecting license;licence;
gemstone prospecting license;licence; and
retention license.licence.
LicensesLicences for Mining:
special mining licenselicence (if the proposed capital investment is equal to at least US$100 million);
mining licenselicence (if the proposed capital investment is equal to between $100,000 and $100 million); and
primary mining licenselicence (reserved for Tanzanian citizens).
LicensesLicences for Ancillary Activities:
processing license;licence;
smelting license;licence; and
refining license.licence.
For purposes of AngloGold Ashanti’s Geita Gold Mine, only prospecting, retention and special mining licenseslicences are relevant.
A prospecting licenselicence grants the holder the exclusive right to prospect in the area covered by the licenselicence for all minerals within the class of minerals applied for. The classes that can be applied for include (amongst others):
metallic minerals;
energy minerals;
gemstones other than kimberlitic diamonds; and
kimberlitic diamonds.
An application for a prospecting licenselicence is made to the Commissioner for Minerals and the licenselicence is valid for a period of four years. Thereafter,After the licenseinitial term, the licence is renewable for three further periods – the first period being for three years and the second and third periods being for two years each. Upon each renewal, 50 percent of the area covered by the licenselicence must be relinquished. A company applying for a prospecting licenselicence must, amongamongst other things, state the financial and technical resources available to it.
If the holder of a prospecting licenselicence has identified a mineral deposit within the prospecting area that is potentially of commercial significance but that cannot be developed immediately because of technical constraints, adverse market conditions or other economic factors of a temporary character, it can apply for a retention license.licence. A retention licenselicence can also be requested from the Minister after the expiry of a prospecting licenselicence period, for reasons ranging from financial to technical considerations. A retention licenselicence is valid for a period not exceeding five years and is thereafter renewable for a single period of five years. The advantage of converting a prospecting licenselicence into a retention licenselicence is that the MEM may not revoke a retention licenselicence if the licenselicence holder fails to meet its obligations within the time frame agreed on application for the licenselicence (as would be the case with a prospecting license)licence).
Holders of prospecting or retention licenseslicences over a tenement will not automatically have first right to any mining licenselicence granted over that tenement. However, in practice, they will be best positioned to meet the requirements to be granted a form of licenselicence for mining. The holder of a retention licence may also apply for a special mining licence for the area under the retention licence while the retention licence subsists.
Mining is mainly carried out through either a mining licenselicence or a special mining license,licence, both of which confer on their holder the exclusive right to conduct mining operations in or on the area covered by the license.licence. A special mining licenselicence 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,licence, a mineral right may be freely transferred by its holder (in whole or in part) to another person or entity without requiring consent from the MEM. However, the Commissioner for Minerals must be notified of any transfer of a prospecting or retention licenselicence 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.licences. The assignment of a special mining licenselicence generally requires the prior consent of the MEM, such consent not to be unreasonably withheld or delayed. There are limited exceptions to the requirement for the Minister’s consent (such as transfers to an affiliate company of the licenselicence holder or to a financial institution or bank as security for any loan or guarantee in respect of mining operations).
Special mining licenseslicences have certain fiscal and other advantages over mining licenses,licences, as the holder of a special mining licenselicence may enter into a mining development agreement with the government 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 and a special mining licenselicence holder may, in certain circumstances, unilaterally amend the programme of the mining operations agreed with the MEM.
AngloGold Ashanti has concluded a development agreement with the Ministry and was issued a mining licensespecial licence covering approximately 196 square kilometres for a period of 25 years, which expires on 26 August 2024.
On 9 October 2014 an addendum to the development agreement was entered into ratifying the following prior changes:
An increase in 2023.the royalty rate from three percent to four percent with effect from 1 May 2012;
With effect from the financial year 2015, the capital allowance applicable to the unredeemed qualifying capital expenditure (15 percent per annum) referred to in section 18(a) of the Income Tax Act No 33 of 1973 shall no longer apply; and
With effect from 1 July 2014, Geita Gold Mining Limited is liable to pay the Geita District Council Levy at a rate of 0.3 percent on turnover (no longer capped at US$200,000 per annum).
The Fiscal Regime
The Finance Act, 20122015 which was passedassented to on 11 October 2012 introduced some important changes to the fiscal regime with effect from28 June 2015 and came into force on 1 July 2012 that impact upon AngloGold Ashanti, in particular:
Introduction of2015 contains a provision for a 30 percent capital gains tax on the sale of shares by an off-shore parent company. ChangesThis provision was introduced by the Finance Act, 2012 and in this legislation, additional 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 theThe Value Added Tax Act, 2014 (the VAT Act) which came into force on 1 July 2015 restricts VAT relief on purchases made by mining companies. The VAT Act 1997,is specific in that it provides that no purchase by companies is exempt or zero rated unless specified by the law. Previously mining companies were entitled to 100 percent VAT relief. This implied that no VAT was applicable on 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:Levies
TheAs mentioned above, following the signature of the addendum to the development agreement Geita Gold Mine is required to pay local government for the area in which we mine charges a 0.3% service levy based onof 0.3 percent of its gross annual turnover generated in the relevant district or a $200,000 local government levy for mining companies that have signed a mining development agreementline with the MinistryLocal Government Finance Act No.9 of Energy and Minerals, as well as, property tax based on the value of a premises.1982.
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 operations.
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 to be done in accordance with the existing 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 and 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 licence.
New labour law requirements
On 15 September 2015, the Non-Citizens (Employment Regulation) Act (the Non-Citizens Act), 2015 came into force. The Non-Citizens Act vests powers concerning work permit with the Labour Commissioner. Therefore non-citizens wishing to be employed in the country are required to apply and be granted a work permit before applying for a residence permit. Moreover, the Commissioner General of Immigration is required to take into consideration conditions of the work permit issued by the Labour Commissioner when granting a residence permit.
Previously, the issuance of a residence permit was inclusive of a work permit. The resident permit covered working and living in Tanzania.
Further, the Non-Citizens Act introduced the Short Term Permit (STP). The STP is granted to non-citizens who wish to work in the country for a period of not more than six months; foreigners intending to work in Tanzania for more than 3 months are required to apply for an STP. The application for STP is made to the Ministry of Labour and Employment.
AUSTRALASIA
Australia
In Australia, with a few exceptions, all onshore minerals are owned by the Crown. The respective Minister for each state and territory is responsible for administering the relevant mining legislation enacted by the states and territories.
Native Title legislation applies to certain mining tenures within Australia. Australia recognises and protects a form of Native Title that 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. Tenure may be granted subject to conditions relating to Native Title rights. In the mining context, Native Title matters are managed as part of the tenement grant process. If disputes arise in relation to the grant of a particular tenement, they can be referred to the National Native Title Tribunal, established under the Native Title Act, for resolution.
Other federal and state Aboriginal heritage laws operate in parallel to the Native Title legislation. They exist predominantly for the purposes of protecting Aboriginal sites and areas of significance from disturbance. To date, there has not been any significant impact on any of AngloGold Ashanti’s tenure due to Native Title or Aboriginal Heritage legislation.
AngloGold Ashanti’s operating properties are located in the state of Western Australia 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,licences, mining leases, miscellaneous licenseslicences and general purpose leases. In most Australian states, if the holder of an exploration licenselicence establishes indications of an economic mineral deposit in the area covered by the exploration licenselicence and complies with the conditions of the grant, the holder of the exploration licenselicence has a priority right against all others to be granted a mining lease which gives the holder exclusive mining rights with respect to minerals on the property. A general purpose lease may also be granted for one or more of a number of permitted purposes. These purposes include erecting, placing and operating machinery and plants in connection with mining operations, depositing or treating minerals or tailings and using the land for any other specified purpose directly connected with mining operations.
Mining tenures will be granted with conditions relating to protection of the environment. Exploration and mining operations may also require separate approval from the state, territory or federal environment minister, which may require completion of an environmental impact assessment pursuant to applicable protection legislation prior to commencement. Further, an operating licenselicence 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 an area of land and for another individual or entity to be granted the 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 state or territory’s minister responsible for mining rights. In Western Australia, mining leases can only be assigned with the prior written consent of the minister.
Government royalties are payable by 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 state or territory. 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 beis required to pay annual rent in respect of the tenure. In Western Australia there is a minimum annual expenditure requirement for prospecting and exploration licenseslicences and mining leases. Exemptions from the expenditure requirement can be obtained if certain conditions are satisfied.
AngloGold Ashanti 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 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 authorised 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. In particular, at Sunrise Dam, the deposit spans two mining leases covering approximately 1,429 hectares. Both leases are currently in good standing, with expiry dates in 2032 and 2016 respectively. The lease expiring in 2016 has a right to be renewed for a further term of up to 21 years and a renewal application will be lodged prior to the expiry date.
AMERICAS
Argentina
Land ownership & mining rights
The Argentinean Mining Code governs mining activity in the country. Special regimes exist for hydrocarbons and nuclear minerals. In the case of most minerals, the Argentinean Mining Code establishes that the owner of the land 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 new 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 limited in time and as to the extent of the exploration area, are subject to the 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 survey of the units requested for the new mine. The application and the legal survey may be opposed by third 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, the EIA 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 Argentinean Mining Code, and may include warnings, fines, suspension of quality certifications, restoration of the environment, temporary or permanent closure of activities, and withdrawal of authorisation to conduct mining-related activities.
Holders of mining concessions must comply with three main conditions: payment of an annual 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 concession, which would then revert back to the Province.
In the case of Cerro Vanguardia, AngloGold Ashanti’s operation in Argentina, the mining concession holder is AngloGold Ashanti’s partner, Fomento MineroFomentoMinero de Santa Cruz S.A. (Fomicruz). On 27 December 1996, Fomicruz entered into a usufruct agreement whereby Cerro Vanguardia S.A. was granted an irrevocable right to exploit the Cerro Vanguardia deposit (encompassing an area of approximately 543 square kilometres) for a 40-year period, which expires on 2726 December 2036. Cerro Vanguardia S.A. is an Argentinean company controlled by AngloGold Ashanti, with Fomicruz as minority shareholder.
In addition to the Argentinean Mining Code, between 1993 and 1995, Argentina implemented several federal laws to offer foreign companies attractive incentives for exploration and mining in Argentina, the Mining Investment Law (Law No. 24, 196, as amended, and related legal provisions) being the most important one. Such incentives include, amongamongst others, import duty exemptions, accelerated depreciation of fixed assets, a 3 percent cap on Provincial royalties, value added tax refunds for exploration-related expenses incurred by companies registered under the Mining Investment Law, and, subject to the filing of a feasibility study for the relevant mining project, a 30-year stability as to tax, customs and foreign exchange duties. Cerro Vanguardia S.A. obtained its tax, customs and foreign exchange stability certificate in 1996.
Recent and potential regulatory changes
On 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 in those areas 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 thatwhich 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.Argentina. Although the injunction hasinjunctions have been lifted, the language that 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 thereforemoot. Therefore, the case has no practical implications for the operations of CVSA.Cerro Vanguardia at this time.
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 operating 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.)Vanguardia); 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 Repatriation Decree, but appear to conflict with it, and such conflict may result, in some cases, in a violation of mining companies’ rights under the Mining Investment Law.
On 27 December 2011, the Argentinean National Congress passed Law 26,737 which implemented a set of rules restricting the ownership of rural land by foreigners (including foreign individuals or any kind of legal entity controlled by foreign individuals or legal entities). The main restrictions are as follows: (i) foreigners cannot own in the aggregate more than 15 percent of the entire rural land of Argentina, the same cap being applicable to each province and municipality; (ii) foreigners will not be allowed to purchase more than 1,000 hectares in the so-called “zona nùcleo”, which comprises the main agricultural areas of central Argentina or an “equivalent” surface depending on the location of the land and its productive potential; and (iii) foreigners will not be allowed to buy land that contains, or is adjacent to, relevant and permanent water bodies (such as rivers and lakes). Although exploration permits and mining concessions are not the subject matter of the restrictions placed by this law, certain rights granted to foreign mining companies under the Argentinean Mining Code may be restricted by this new law. For example, the right that holders of mining concessions currently have to force the surface owner to sell the land to the holder of the mining concession might be restricted if the concession holder is a foreign individual or a legal entity controlled by foreigners.
Ten provinces in whose territories the main mining projects of Argentina are located, signed a document with the Federal Government entitled Federal Mining Agreement (FMA). The purpose of the FMA is, amongamongst 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, amongamongst 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 National Government.
In Argentina, the current regulatory regime of royalty payments is expected to change and several different options and payment thresholds have been discussed. The Santa Cruz Province has changed the mining royalty from 1one percent to 3three 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 resourcesMineral Resources constitute property separate from the soil and belong to the Federal Union. Exploration and exploitation of such mineral resourcesMineral Resources may take place only with the Federal Union’s concession and in such a way as to protect the national interest. Federal law sets out penal 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”)(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”)(Minas Manifestadas), for which rights were acquired before 1934 and exist independently of any mining licenselicence or authorisation from the Federal Government and for which the mineral resourcesMineral Resources constitute property of the landowner and (ii) granted mines, which are those that rely on grants from the Federal Government for mineral exploration or exploitation (pursuant to the Constitution). AngloGold Ashanti’s operations in Brazil consist of both claimstake mines and granted mines.
At AGA Mineraçao, Cuiaba has a single concession covering a total area of 3,662 hectares, Lamego is covered by three geographically contiguous concessions totally 1,622 hectares and Corrego do Sitio is hosted by five geographically contiguous concessions covering a total area of 6,017 hectares. All of these are in good standing. At Serra Grande, the company has interests in or agreements over 61,500 hectares in Crixas Greentone belt, representing approximately 87 percent of the relevant tenements that correspond to all current exploration and mining activities. These have been held since 1987. Brazilian mining concessions remain valid up to the depletion of the Ore Reserve and Mineral Resource.
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”(TAH – Taxa Anual porAnualpor 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”(CFEM – Compensação Financeira pelaFinanceirapela 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 resourcesMineral 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.legislation, and those proposed changes were submitted in 2013 to the National Congress for discussion and consideration. 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 reservesOre Reserves, and (iv) encourage members of the industry to add value to mineral products.
The government’s proposals have institutional, 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 sector. They would also transform the DNPM into a regulatory agency with negotiation and inspection powers.
Legally, the proposals would change the rules governing access to mining titles. While exploration 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 1one percent on net invoicing to 2two percent on gross invoicing. They would also create new calculation methods and incidence hypotheses, notably with regard to transactions between related parties.
The MMEIn light of the November 2015 tailings dam collapse in Minas Gerais, there has suspended the grantingbeen discussion of new mining concessions until it promulgates changesincluding tougher requirements related to the mining legislation.tailings dams (e.g., mandatory insurance in case of environmental catastrophe).
Colombia
Land ownership and mining rights
In Colombia, all mineral substances are the property of the state of Colombia. The underlying principle of Colombian mining legislation is first-in-time, first-in-right.
Mining activities are regulated by the Mining Code, Act 685, 2001. Amendments to the Mining Code enacted in 2010 pursuant to Act 1382 were found unconstitutional. The Constitutional 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 2012, but has not yet presented any project of law to Congress.
The filing of an exploration and exploitation proposal triggers a right of preference to obtain rights over the targeted area, provided it is available. Such area cannot exceed 10,000 hectares. Upon receipt of a proposal, the relevant government agency determines whether another proposal or contract already governs the area. If there are no pre-existing claims, the government agency grants the applicant a “free zone”.
The concession contract
The government agency grants exclusive concession contracts for exploration and exploitation. Such concessions allow concessionaires to conduct the studies, works and installations necessary to 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 possiblethe costs associated with potential 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 proposed works and installations. An environmental impact study must also be filed and approved in order for the concessionaire to receive an environmental licenselicence prior to beginning construction and development.
The initial term of concessions is 30 years. To receive an extension, a concessionaire must file a request two years before the termination of the initial term, and must substantiate the application with economic, environmental and technical information. Because the extension is not automatic, the concessionaire must renegotiate the conditions of the grant. Any company holding a concession that wishes to obtain a renewal of the contract must be up to date in all its legal and contractual obligations and must present a new plan of works and installations to be executed after the contract is renewed. The term of a concession and all the contractual obligations that arise from it are deemed to take effect as of the date of registration of the contract at the National Mining Register.
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,authority has the discretion to declare the underlying concession void if AngloGold Ashanti Colombia S.A. (AGAC) breaches applicable environmental laws or regulations. If ANMthe mining authority were to exercise such discretion against AGAC, AGAC would be required to abandon the La Colosa projectits projects 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 in Colombia, which hold singularly or in concert with joint venture partners the majority of the company’s concession contracts in Colombia.
There are some areas where mining activity is prohibited. These areas are:
National parks;
Regional parks;
Protected forest reserves;
Paramus (included in Act 1382, introduced in 2010); and
Wetlands, pursuant to the Ramsar Convention.
Some forest reserves are not “protected”, but are set aside for active forestry purposes. Such forest reserves must be “extracted” after initial prospection, meaning that the concessionaire must obtain a specific permit to partially and temporarily change the use of the soil before pursuing exploration activities.
Cannon fees and royalties
Cannon fees are due from the moment the area is declared available for the company (rather than from the time the concession contract is signed). Such fees change based on the number of years thathectares held by the company has been a concessionaire, as follows:
0-2000 hectares, approximately $9.00one legal daily minimum wage (approximately $9.00) per hectare per year
2001-5000 hectares, approximately $18.00two legal daily minimum wages (approximately $18.00) per hectare per year
5001-10,000 hectares, approximately $27.00three legal daily minimum wages (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 consist of a percentage of the primary product and sub-products being exploited. For gold, the percentagegross monthly income is multiplied by 0.8, to be paidwhich a four percent royalty is 4 percent.applied.
Potential regulatory changesPINES programme
In 2013 the Federal government instituted the CONPESPINES programme that will aid in promoting certain projects designated by the government as national projects of interest. This designation provides for greatgreater oversight from the Federal government. The La Colosa project was oneand Gramalote projects are two such designated project. It is anticipatedprojects, and AngloGold Ashanti has requested that its Nuevo Chaquiro project be included in the programme will be launched in 2014.as well, and the government accepted this request. All of our three advanced exploration programmes are considered of national strategic interest.
United States of America
Land ownershipOn 03 August 2015, AngloGold Ashanti completed the sale of its Cripple Creek & mining rights
Mineral and surface rightsVictor mine in the United States are owned by private parties, state governments or the federal government. Although not the case at Cripple Creek & Victor Goldto Newmont Mining Company’s (CC&V) Cresson Project, the majority of land utilisedCorporation for precious metals exploration, development and mining$820 million in the western United States is owned by the federal government. The right to mine on such land is governed by the General Mining Law of 1872, as 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, andcash, subject to customary closing adjustments, plus a net smelter return royalty. The sale was originally announced on 8 June 2015. At the same permitting, environmental and reclamation laws and regulations as other private lands.
Individual states, including Colorado, typically follow a leasing 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. CC&V’s Cresson Project covers approximately 7,100 acres, the vast majority ofclosing, AngloGold Ashanti received $819.4 million in cash, which consists of owned, patented mining claims from former public lands, with a small percentage of private and state lands, some of which are critical to the Cresson Project, being leased. All of the Cresson Project’s current reserves are within the patented claims.
Permitting and reclamation
CC&V’s Cresson Project is subject to a number of state and local permitting requirements, including permitting requirements imposed by the Colorado Mined Land Reclamation Act (MLRA) and Teller County. Under the MLRA, the Colorado Mined Land Reclamation Board (MLRB) issues and enforces mining and reclamation permits for all non-coal minesfactors 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.estimated closing adjustments.
CC&V’s Cresson Project is currently operating under a permit generally referred to as mine life extension one (MLE1) issued by the MLRB 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 disturbed 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, where possible, 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 now 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 newNew projects includesinclude 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,Ore Reserves, which the company might wish to exploit should conditions, such as the gold price, change.
OurThe company’s 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,Previous employees may receive education and training so as to enable them to seek viable employment alternatives. Communities also require information on the Company’scompany’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 contaminatedmine 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 liabilitiesProvisions for decommissioning and for restoration (excluding joint ventures) decreased from $841$851 million in 20122014 to $728$683 million in 2013.2015. This change mainly relates to the sale of the CC&V mine in North America, changes in discount rates due to changes inbased on global economic assumptions and changes in mine plans resultingand in a change in cash flows and changes inthe 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. 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. In addition, unknown environmental hazards may exist on the company’s properties which may have been caused by previous owners or operators.
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,Brazil, 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.
Where feasible, the company operates a “closed loop” system which recycles the water used in its operations without discharging it to the environment. In some areas, however, such as Ghana, high levels of rainfall and surface water runoff mean that a closed loop system is not feasible and that discharges, after water treatment if necessary, must take place. During 2011, the company commissioned a reverse osmosis plant in the northern section of the Obuasi mine which functions in conjunction with complementary water treatment technologies to ensure that water released is compliant with Ghana’s water quality standards. At the southern section of the mine, a 250m3/hour water treatment plant was commissioned in early 2012 and another 500 m3/hour plant is under construction. At the Iduapriem mine, a water treatment plant was commissioned in 2010 to ensure that the operation can release excess water while meeting effluent discharge standards.
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 the company’s internal standards, 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 anAn 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 toon 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. The premature closure of neighbouring mines owned by another mining company in both areas has led to increased pumping obligations on AngloGold Ashanti and these are anticipated to increase in future, requiring additional permits and increased costs for the group.
For example, after Village Main Reef (VMR), now Heaven-Sent, ceased pumping of underground water at its Buffelsfontein and Hartebeesfontein operations, AngloGold Ashanti prepared plans to manage underground water that it anticipated would eventually reach its operations. The infrastructure to pump this water out from underground was completed in December 2015, with an accelerated project plan. The water reached the company’s Great Noligwa boundary on 23 January 2016, and the pumping continues with added costs to AngloGold Ashanti. The company has not released VMR from any environmental obligations as relates to such water infiltration, however, and it intends to enforce any rights that it has against VMR and Buffelsfontein, including under the directive issued by the Department of Water Affairs (now the Department of Water and Sanitation) in 2005.
In addition, in the West Wits district, after Blyvooruitzicht Gold Mining Company was placed in provisional liquidation in August 2013, AngloGold Ashanti secured a court order for access rights to Blyvoor 4 and 6 shafts to keep pumping going. AngloGold Ashanti has also incorporated Covalent Water Company, which has purchased rights of access, electricity etc. to the 4 and 6 shafts as well as the relevant infrastructure to continue pumping underground water. This has reduced the risk of flooding at the company’s West Wits Operations, but the company can provide no assurance that the risk of flooding will not materialise, which could have an adverse impact on its results of operations and financial condition.
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.electricity. 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,As a result of commitments made at the Australian government implementedUN climate conference in Durban, South Africa in December 2011, certain members of the international community negotiated a carbon trading scheme commencingtreaty at the December 2015 Conference of the Parties in July 2012, with a carbon price applyingParis (COP 21). The Paris Agreement will require countries to facilities which emitset targets for emissions reductions if it is ratified prior to April 2017 by at least 55 countries that collectively produce more than 25,000 t/yr, commencinghalf of the world’s GHG emissions and is subsequently adopted by those individual countries within their respective national or federal law. Additional measures addressing GHG emissions may be implemented at A$23/tCO2-e (for 2012the national or international levels. These, or future, measures could require AngloGold Ashanti to 2013), increasingreduce its direct GHG emissions or energy use or to A$25.40/tCO2-eincur significant costs for 2014-2015, followedGHG emissions permits or taxes or have these costs or taxes passed on by a floating price phase. The new government, elected in 2013, has announced its intentionelectricity utilities which supply the company’s operations. AngloGold Ashanti also could incur significant costs associated with capital equipment, GHG monitoring and reporting and other obligations to repeal the tax and the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 was introduced into the Federal Parliament on 13 November 2013.comply with applicable requirements.
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. The same Minister published a draft Carbon Tax Bill during 2015, providing some details on how the tax would be implemented, but delaying it to 2017. AngloGold Ashanti already pays a levy of ZAR0.035 per kilowatt hour of electricity that it purchases and is generated from fossil fuels. In February 2015, the Minister announced that the government was considering an increase in the levy to ZAR0.055 per kilowatt hour, though this was subsequently withdrawn.
The 2013 Budget Reviewdraft Carbon Tax Bill provides an indication of the expected levels of the carbon tax rate as beingstarting at ZAR120 (approximately $11)$8) per tonne of CO2e emitted above certain thresholds. UnderThe draft Bill allows discretion to the proposal,Minister of Finance to increase the tax rate would increase byannually, though previous proposals were for increases of 10 percent a year reaching ZAR193 (approximately US$18) per tonne by 2020. The end of the decade also marks the end offor the first phaseperiod of the carbon tax.four or five years (government communications are ambiguous). Depending on the nature of the emitter, a basic tax-free threshold of up60 to 6095 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. The most important of these for AngloGold Ashanti is Eskom, the state-owned electricity utility. The Minister committed to no net increase in the electricity price through the tax, though details of how this will be achieved were not available as of March 2016.
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.
After COP 21, there is a proposal to change the climate legislation in course at National Congress. The proposal foresees updated targets to reduce greenhouse gas emissions by 37% in 2025 and 43% in 2030 (based on the emissions of 2005) and to increase the use of renewable energy. There is still no reduction target for mining.
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, and a revised Group Safety strategy have been introduced. In South Africa in line withparticular the overall ONE initiative and industry Best Practice,work culminated in a revised “Safe Production Strategy” which could resultforms the basis of the work in the Region to ensure a highly effective compliant organisation, resulting in a reduction of incidentsin Section 54 stoppages and associated Section 54 safety stoppages.improved levels of performance with regard to fatalities, ultimately striving for Zero Harm.
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”)(NIHL) and occupational lung diseases (“OLD”)(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”)(ODMWA) that provides for compensation to miners who have OLD, and the Compensation for Occupational Injuries and Diseases Act (“COIDA”)(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)(i) ex-mine workers who had never worked at that mine; or (2)(ii) 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. All affected company operations have malaria control programmes in place.
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: 20132015
Operations and projects
AMERICAS | AMERICAS | CONTINENTAL AFRICA | AUSTRALASIA | EXPLORATION AND TECHNOLOGY | AMERICAS | CONTINENTAL AFRICA | SOUTH AFRICA | |||||||||||||||||
1. | Argentina | 4. | Guinea | 10. | Australia | 12. | Australia | Argentina | 4. | Guinea | 9. | South Africa | ||||||||||||
Cerro Vanguardia (92.5%) | Siguiri (85%) | Sunrise Dam | 13. | Colombia | Cerro Vanguardia (92.5%) | Siguiri (85%) | Vaal River | |||||||||||||||||
2. | Brazil | 5. | Mali | Tropicana (70%) | 14. | Guinea | Brazil | 5. | Mali | Kopanang | ||||||||||||||
Serra Grande | Morila (40%)(1) | 15. | South Africa | Serra Grande | Morila (40%)(1) | Moab Khotsong(2) | ||||||||||||||||||
AGA Mineração | Sadiola (41%) | SOUTH AFRICA | AGA Mineração | Sadiola (41%) | West Wits | |||||||||||||||||||
3. | United States | Yatela (40%) | 11. | South Africa | Colombia | 6. | Ghana | Mponeng | ||||||||||||||||
Cripple Creek & Victor (CC&V) | 6. | Ghana | Vaal River | Gramalote (51%) | Iduapriem | TauTona | ||||||||||||||||||
Iduapriem | Great Noligwa | La Colosa | Obuasi | Surface Operations(3) | ||||||||||||||||||||
Obuasi | Kopanang | Quebradona (92.42%) | 7. | DRC | ||||||||||||||||||||
7. | DRC | Moab Khotsong | Kibali (45%)(1) | |||||||||||||||||||||
AUSTRALASIA | AUSTRALASIA | 8. | Tanzania | |||||||||||||||||||||
10. | Australia | Geita | ||||||||||||||||||||||
Kibali (45%)(1) | West Wits | Sunrise Dam | ||||||||||||||||||||||
8. | Tanzania | Mponeng | Tropicana (70%) | |||||||||||||||||||||
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) |
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(3) |
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OPERATING PERFORMANCE
Group description
HeadquarteredAngloGold Ashanti, a gold mining company with a globally diverse, world-class portfolio of operations and projects, is headquartered in Johannesburg, South Africa, AngloGold Ashanti has 21 operations in 11 countries.
Africa. AngloGold Ashanti is a globalthe third largest gold mining and exploration company with a diversein the world, measured by production.
Our portfolio of mining17 operating mines in nine countries, comprises long-life, relatively lowcost assets with differing ore body types located in key gold-producing regions. A number of these assets are strongly leveraged to energy costs and currencies.
Our operations are grouped regionally as follows:
South Africa (Vaal River, West Wits and projects on four continents, with more than 96%Surface Operations)
Continental Africa (Democratic Republic 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’sCongo, Ghana, Guinea, Mali and Tanzania)
Americas (Argentina and Brazil)
Australasia (Australia)
These 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 explorationassets are supported by greenfield projects the company embarked on significant restructuring in response to current challenges in the gold sector, including increasing costs of productionColombia and a fall in gold prices.focused exploration programme.
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 restructuringIn 2015, active management of the portfolio Savuka is now reported together with TauTona and MWS is includedresulted in the reporting of Surface Operations. Post year-end, a binding agreement was reached regarding the sale of the NavachabCripple Creek & Victor (CC&V) mine in Namibia, subject to certain conditions.
AngloGold Ashanti’s brownfieldthe United States in August 2015 while Obuasi remained on limited operations during 2015 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.the closure process at Yatela continued.
AngloGold Ashanti’s operations and joint ventures employed, on average, 66,43452,266 people (including contractors) in 2013 (2012: 65,822)2015 (2014: 58,057).
Performance
In 2013,2015, AngloGold Ashanti produced attributable 4.113.9 million ounces of gold (2012: 3.94(2014: 4.4 million ounces) as well as 1.38 million931,000 pounds of uranium oxide, 3.304.1 million ounces of silver and 191197 tonnes of sulphuric acid as by-products.
ProductionContinuing production of 4.113.8 Moz was achieved at a total cashgroup all-in sustaining cost of $830/$910/oz compared to 3.94 Moz4.2Moz at $829/$1,020/oz the previous year.in 2014.
The attributable Ore Reserve at 31 December 20132015 was 67.951.7 Moz, down from 74.157.5 Moz at 2012.2014. This annual decrease reflectsof 5.8Moz includes depletion of 4.3Moz and the sale of CC&V (3.7Moz), which were partly offset by 2.2Moz of additions in Ore Reserve resulting from changes in economic assumptions due to the lower gold price which had the most significant impact at Geitabetween 2014 and CC&V.2015 (0.1Moz), exploration and modelling changes (1.6Moz) and other factors (0.5Moz).
Capital expenditure, including equity accounted joint ventures, in 20132015 amounted to $1,993$857 million (2012: $2,322(2014: $1,209 million).
Safety
Regrettably, there were 811 fatalities across the group’s operations in 2013.2015. The all injury frequency rate improved to 7.33was 7.18 per million hours worked compared to 7.727.36 in 2012 and 9.76 in 2011.2014.
OPERATIONS AT A GLANCEfor the years ended 31 December
Attributable tonnes treated/milled (Mt) | Average grade recovered (g/t) | Attributable gold production (000oz) | Total cash costs(1) ($ 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 |
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Rounding of figures may result in computational discrepancies.
SOUTH AFRICA
AngloGold Ashanti’s South African operations comprise five deep-level mines and surface production facilities. They are:
The Vaal River operations – Great Noligwa, Kopanang and Moab Khotsong;
The West Wits operations – Mponeng and TauTona; and
Surface operations.
Gold production (000oz) | Average number of employees | |||||||
Operations |
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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 | ||||||
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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 |
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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 stoping 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 predominantly 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 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 |
|
|
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 |
|
|
|
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 $341m was attributable to development of Kibali. Of the sustaining capital expenditure, which included ore reserve development, the bulk was spent on the decline project at Obuasi and the mill replacement at Geita.
Safety
There were two fatalities in the region during the year (2012: five), one at Iduapriem and one at Obuasi. Overall, the safety performance continued to improve with an all injury frequency rate of 1.97 per million hours recorded for the year (2012: 2.26). Siguiri, Geita and Yatela were lost-time injury free for the year.
People
A total of 16,625 people were employed on average by the Continental Africa region – 10,778 full time employees and 5,847 contractors – as compared with 16,621 in 2012, as the new Kibali mine was commissioned and began its production ramp up. Productivity for the region was 9.97oz/TEC as compared to 10.97oz/TEC in 2012.
Ore Reserve
The total attributable Continental Africa Region Ore Reserve is 24.41 million ounces (2012: 27.59 million ounces). This amounts to 36 percent of the group’s Ore Reserve.
Growth and improvement
The turnaround initiative at Obuasi and the production ramp up at Kibali continued through the end of the year. The downturn in the gold price early in the year 2013 and the resultant emphasis on cost efficiency has led to the revision of mine plans and a cut-back in growth plans at many of the other operations in the region in an effort to enable the company to maximise cash flow even in a weaker gold price environment.
Exploration work continued in 2013 on the Kounkoun trend in Guinea, one of three priority greenfield exploration targets.
Attributable production Total cash ($ per ounce) All-in costs SOUTH AFRICA Vaal River Great Noligwa(1) Kopanang Moab Khotsong(1) West Wits Mponeng TauTona(2) Surface Operations Surface Operations(3) Other(4) CONTINENTAL AFRICA Ghana Iduapriem Obuasi(5) Guinea Siguiri (85%) Mali Morila (40%) Sadiola (41%) Yatela (40%)(6) Namibia Navachab(7) Tanzania Geita DRC Kibali (45%)(8) AUSTRALASIA Australia Sunrise Dam Tropicana (70%)(8) AMERICAS Argentina Cerro Vanguardia (92.5%) Brazil AGA Mineração(5) Serra Grande United States Cripple Creek & Victor(9) From 1 January 2015, Great Noligwa and Moab Khotsong were combined under Moab Khotsong as one cash-generating unit. In 2013, Savuka and TauTona were combined under TauTona as one cash-generating unit. Includes MWS for purposes of this report. It is operated and managed as a separate cash-generating unit. Gold produced by treating material from multiple mine sources in South Africa. The grades from Obuasi and AGA Mineração represent those for their underground operations. Mine in closure mode from 1 January 2015. AngloGold Ashanti sold Navachab effective 30 June 2014. Commenced production in the second half of 2013. AngloGold Ashanti sold Cripple Creek & Victor effective 3 August 2015. Cripple Creek & Victor is reported as a discontinued operation. Rounding of figures may result in computational discrepancies. Attributable
tonnes
treated/
milled
(Mt) Average
grade
recovered
(g/t)
gold
(000oz)
costs
sustaining
($/oz sold) Attributable
capital
expenditure
($m) 2015 2014 2013 2015 2014 2013 2015 2014 2013 2015 2014 2013 2015 2014 2013 2015 2014 2013 0.4 0.4 6.44 6.15 78 83 1,074 1,100 1,185 1,305 7 13 0.7 0.8 1.0 5.43 5.55 5.23 117 140 178 1,014 1,023 918 1,226 1,256 1,255 21 26 52 0.9 0.7 0.7 8.50 11.04 9.47 254 234 212 798 685 797 1,018 903 1,223 47 45 117 0.8 1.1 1.6 8.44 8.99 7.10 219 313 354 874 746 719 1,170 981 1,016 85 97 171 0.8 0.9 1.0 8.46 8.21 7.34 209 232 235 883 882 920 1,044 1,059 1,149 28 35 59 33.6 34.5 34.5 0.18 0.20 0.22 193 223 240 912 941 883 1,006 1,153 969 17 46 39 12 3 - - - - 8 8 4.7 4.9 4.8 1.27 1.13 1.43 193 177 221 995 865 861 1,020 1,020 1,025 15 21 28 1.0 2.2 1.7 1.47 4.67 4.94 53 243 239 966 1,086 1,406 1,185 1,374 2,214 23 82 196 10.0 10.1 10.2 0.80 0.89 0.82 255 290 268 827 799 918 965 917 1,085 25 26 25 1.2 1.3 1.4 1.24 1.06 1.23 49 44 57 698 1,162 773 815 1,298 1,051 6 6 13 2.1 2.1 2.0 1.04 1.28 1.34 69 85 86 818 1,028 1,334 886 1,133 1,510 2 6 42 0.9 1.0 0.59 0.93 11 27 1,438 1,530 1,795 1,653 - 3 0.7 1.4 1.44 1.39 33 63 752 691 719 781 1 5 5.2 5.2 4.0 3.18 2.86 3.54 527 477 459 480 599 515 717 890 833 116 129 154 3.1 2.5 0.4 2.93 2.95 3.41 289 237 40 609 578 471 642 588 9,065 124 179 341 3.9 3.8 3.4 1.97 2.13 2.46 216 262 276 970 1,105 1,110 1,110 1,214 1,321 29 31 39 4.3 4.0 0.9 2.48 2.78 2.40 344 358 66 492 545 568 671 752 1,113 48 59 241 3.1 3.0 2.3 6.88 6.08 6.58 278 246 241 625 692 622 873 938 912 62 54 64 2.6 2.5 2.3 5.63 5.65 5.70 421 403 391 518 644 646 712 966 1,023 89 127 123 1.3 1.3 1.3 3.27 3.28 3.42 132 136 138 635 748 719 861 1,062 970 33 38 40 11.3 19.3 20.8 0.35 0.32 0.34 117 211 231 894 829 732 1,030 1,147 927 58 169 157 (1) (2) (3) (4) (5) (6) (7) (8) (9)
SOUTH AFRICA
AngloGold Ashanti’s South African operations comprise four deep-level mines and surface production facilities. They are:
The West Wits operations – Mponeng and TauTona;
The Vaal River operations – Kopanang and Moab Khotsong; and
Surface operations.
Gold production (000oz) | Average number of employees | |||||||
Operations |
| |||||||
South Africa | ||||||||
1. Vaal River | ||||||||
Kopanang | 117 | 4,052 | ||||||
Moab Khotsong(1) | 254 | 6,469 | ||||||
2. West Wits | ||||||||
Mponeng | 219 | 6,249 | ||||||
TauTona | 209 | 4,656 | ||||||
3. Surface operations (2) | 193 | 2,929 | ||||||
(1) |
|
(2) | Includes MWS for purposes of this report. It is operated and managed as a separate cash-generating unit. |
South Africa Key Statistics
Unit | 2015 | 2014 | 2013 | |||||
Operation | ||||||||
Tonnes treated/milled | Mt | 36.8 | 38.4 | 39.2 | ||||
Pay limit(1) | oz/t | 0.39 | 0.39 | 0.36 | ||||
g/t | 14.38 | 14.35 | 13.37 | |||||
Recovered grade(1) | oz/t | 0.225 | 0.239 | 0.204 | ||||
g/t | 7.70 | 8.19 | 7.00 | |||||
Gold production | 000oz | 1,004 | 1,223 | 1,302 | ||||
Total cash costs(2) | $/oz | 881 | 849 | 850 | ||||
Total production costs(2) | $/oz | 1,091 | 1,087 | 1,070 | ||||
All-in sustaining costs(2)(3) | $/oz | 1,088 | 1,064 | 1,120 | ||||
Capital expenditure | $m | 206 | 264 | 451 | ||||
Safety | ||||||||
Number of fatalities | 9 | 4 | 6 | |||||
AIFR | Per million hours worked | 10.81 | 11.85 | 12.63 | ||||
People | ||||||||
Average no of employees: Total | 28,325 | 29,511 | 32,406 | |||||
Permanent employees | 25,274 | 26,056 | 28,526 | |||||
Contractors | 3,051 | 3,455 | 3,880 |
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.
(1) |
|
(3) | Excludes stockpile impairments. |
Performance in the South Africa Region in 2015
Production and costs
Production for the year ended 31 December 2015 was 219,000oz, or 18 percent, lower than for the year ended 31 December 2014, predominantly due to safety related stoppages, with approximately 113,000oz lost as a result of these disruptions. Mponeng and Moab Khotsong were most affected. In addition to operational effects of the safety related stoppages, Mponeng also experienced delays to phase 1 of its below 120 level life extension project. The result of this is that mining flexibility was curtailed as production was undertaken on only three levels.
A derisking plan was implemented to address seismicity challenges and a decision was taken during the year to withdraw from some of those areas to improve safety, further reducing available mining areas and leading to lower mining intensity and productivity.
In addition to – and in some cases as a result of – the safety stoppages, production at the Vaal River operations was negatively affected by a deterioration in the mining mix as the anticipated move into higher-grade areas was delayed. Increased dilution resulted in a decline in head grades. Safety stoppages and lack of available face length and mining flexibility resulting from the premature halt to mining of low-grade areas affected production at Kopanang. More concentrated efforts were put in place to prioritise safe practices and plans are underway to increase available face length and Ore Reserve development.
At Surface Operations, a reduction in grades in the marginal ore dumps material impacted negatively on production.
At Mine Waste Solutions, the flotation and uranium plants were temporarily stopped during the latter part of the year as these units did not operate at expected efficiencies.
All-in sustaining costs of $1,088/oz for the year ended 31 December 2015 were two percent higher compared to the previous year. The negative cost impact was marginal, due mainly to the weaker rand relative to the US dollar. The performance was significantly adversely affected by the lower volumes mined as well as ongoing inflationary pressures in South Africa, which is fully exposed to above-inflation administered price increases for critical inputs like power and water, while gaining little benefit from a lower fuel price.
Capital expenditure
Capital expenditure declined by 22 percent, in line with the groupwide cost optimisation and rationalisation programme and cash flow constraints.
Safety
Regrettably, our safety performance was dominated by a significant regression in mine fatalities. Tragically, nine of our colleagues lost their lives in separate fatal accidents, compared with four in 2014. Five of the fatalities resulted from fall of ground incidents, while the other fatalities were due to an underground vehicle incident, carbon monoxide gas inhalation, a scraper winch incident and an electrical incident.
People
In 2015 employee numbers were slightly down year-on-year as a result of the restructuring undertaken in connection with the consolidation of certain mines in the region. However, there was a marginal increase in December relating to the hiring of employees with specific skills and the reinstatement of 456 employees who had previously been dismissed at Moab Khotsong. Wage negotiations took place from June through to October 2015. All unions participated in the central collective bargaining process with the Chamber of Mines representing the gold producers and a three year wage settlement was executed.
Ore Reserve
As at 31 December 2015, the total Ore Reserve for the South Africa region was 26.14Moz (2014: 27.45Moz). This is equivalent to around 51 percent of the group’s total attributable Ore Reserve.
Growth and improvement
Mponeng Phase 1 below 120 level was delayed, with key infrastructure to service Ore Reserve development lagging behind schedule by more than a year at the end of 2015. To address critical issues, a detailed system capability study was undertaken to determine ore handling and material supply capacity. A high-level revised schedule was completed, based on the system capability. The study prioritises capital infrastructure in order to support Ore Reserve development. The preliminary impact of this schedule indicates an approximate 15-18-month delay in the 120 level gold delivery profile.
Given the constraints experienced in phase 1, the approach to phase 2 is being reviewed. Co-extraction of the VCR from the same shaft deepening infrastructure platform is being considered rather than the decline development employed in phase 1. Phase 2 will consequently be delayed by as long as two years. Work on 126 level is expected to be completed on schedule. Consequently, the company does not expect there to be any gap in gold production in spite of other delays.
At Moab Khotsong, project Zaaiplaats remained on hold. Another study has been undertaken to determine the best technical and economically viable options for the project and is expected to recommend alternative investment opportunities. The purpose of this study will be to formulate mine designs to economically extract Zaaiplaats and contiguous blocks from Moab Khotsong shaft systems and to claw back value through potential schedule, cost and mining-volume gains by applying modern shaft designs and other associated technologies.
CONTINENTAL AFRICA
AngloGold Ashanti has seven mines in the region, six of which are producing mines and processing operations, and five of which AngloGold Ashanti manages. One mine is on limited operations. Closure is underway at Yatela.
Attributable gold production (000oz) | Average number of employees | |||||||
Operations | ||||||||
| ||||||||
1. Democratic Republic of the Congo | ||||||||
Kibali 45% | 289 | 2,061 | ||||||
2. Ghana | ||||||||
Iduapriem | 193 | 1,565 | ||||||
Obuasi | 53 | 856 | ||||||
3. Guinea | ||||||||
Siguiri 85% | 255 | 3,445 | ||||||
4. Mali | ||||||||
Morila 40% | 49 | 389 | ||||||
Sadiola 41% | 69 | 585 | ||||||
5. Tanzania | ||||||||
Geita | 527 | 3,041 |
Continental Africa - Key Statistics
Unit | 2015 | 2014 | 2013 | |||||
Operation | ||||||||
Tonnes treated/milled | Mt | 27.2 | 29.9 | 26.9 | ||||
Pay limit | oz/t | 0.036 | 0.039 | 0.049 | ||||
g/t | 1.233 | 1.345 | 1.669 | |||||
Recovered grade | oz/t | 0.053 | 0.054 | 0.054 | ||||
g/t | 1.64 | 1.66 | 1.69 | |||||
Gold production (attributable) | 000oz | 1,435 | 1,597 | 1,460 | ||||
Total cash costs(1) | $/oz | 678 | 783 | 869 | ||||
Total production costs(1) | $/oz | 900 | 977 | 1,086 | ||||
All-in sustaining costs(1)(2) | $/oz | 815 | 968 | 1,202 | ||||
Capital expenditure | $m | 315 | 454 | 839 | ||||
Safety | ||||||||
Number of fatalities | 1 | 0 | 2 | |||||
AIFR | Per million hours worked | 0.50 | 1.56 | 1.97 | ||||
People | ||||||||
Average no of employees: Total | 11,942 | 16,070 | 16,625 | |||||
Permanent employees | 5,061 | 8,739 | 10,778 | |||||
Contractors | 6,881 | 7,331 | 5,847 |
(1) | Total cash costs, total production |
(2) | Excludes stockpile impairments. |
Production and costs
Despite a decline in overall production for the region in 2015, Geita, Kibali and Iduapriem all recorded higher levels of production. Underground production at Kibali was successfully ramped up and Geita continued as the star performer, helping to make up some of the production lost due to Obuasi being on limited operations following the suspension of underground mining operations at the end of 2014.
Increased production at Geita was driven by an increase in recovered grade from ore sourced from Nyankanga Cut 7. Mining volumes were maintained despite abnormally heavy rainfall and a decline in plant throughput in the last quarter of the year due to planned maintenance.
At Kibali, the ramp up of plant operations to design capacity and increased plant availability, resulted in a 23 percent increase in tonnage throughput, and a 22 percent increase in gold produced. Production at Iduapriem improved given the increase in the recovered grade and the ramp up from limited operations the previous year.
Production at Morila was boosted by a 17 percent increase in recovered grade as higher grade tonnes were sourced from the satellite pit that was commissioned in the latter part of 2014. Reduced operational flexibility and a decline in the availability of higher-grade oxide ore contributed to reduced production from Sadiola.
Siguiri’s production was negatively impacted by a planned fall in recovered grade, driven by depletion of the higher grade ore in mined areas owing to delayed access to the Soloni pit. This was compounded by a decrease in tonnage throughput following unplanned maintenance that occurred during the year. Production however, started improving in the last quarter of the year as delays in accessing mining areas were resolved and the mine began processing ore from the Soloni pit.
Costs improved significantly, declining by 13 percent, in the case of total cash costs, and 16 percent, in the case of all-in sustaining costs. These improvements were the result of the cumulative benefits of the operating and cost management initiatives that have been implemented since 2013. Costs specifically benefitted from increased production and improved efficiencies at the larger operations. The Continental Africa operations were also able to take advantage of lower oil prices, which particularly benefitted the open pit operations which run large mining fleets and/ or generate all or part of their own power from diesel or heavy fuel oil.
In addition, the region was able to capitalise to some extent on exposure to weaker local currencies by in-country sourcing of goods, services and labour and by targeting operational efficiencies.
Capital expenditure
As anticipated, at Kibali, capital expenditure decreased by $55 million as construction of the plant was largely completed during 2014. Capital expenditure for 2015 decreased by $59 million at Obuasi, which was placed on limited mining operations.
Safety
Tragically, there was one fatality in the region, when an employee drowned at Obuasi. The overall safety performance in the region otherwise continued to improve.
People
The average number of people employed in the region declined from 16,070 in 2014 to 11,942 in 2015, largely as a result of the retrenchment process undertaken at Obuasi during 2014.
Ore Reserve
The total attributable Continental Africa Region Ore Reserve was 19.26 million ounces (2014: 18.93 million ounces). This amounts to 37 percent of the group’s Ore Reserve.
Growth and improvement
An extensive pipeline of project opportunities is planned, targeted mainly at energy cost savings and mine-life extensions. These opportunities include (i) progressing to underground mining at Geita’s Star & Comet ore body and (ii) accessing additional Mineral Resources at Iduapriem (to which end exploration work is to be conducted within the concession and the mine plan is to be revised) and at Siguiri, using heap leaching to supplement production.
Although the portion of hard sulphide ore tonnes milled at Geita remained high during the year, the plant nevertheless managed to process 5.2Mt as a result of the better quality of feed and improved fragmentation control.
At Kibali, sinking of the vertical shaft reached shaft bottom at a depth of 751.2m and equipping of the crusher and production levels was completed. Construction of Ambarau, the second hydropower station, was delayed following the failure of the temporary berm wall owing to high river flows. Repair work continues and the first phase is now expected to be completed in the second quarter of 2016, with full completion and commissioning of the power station scheduled for the latter part of the year. Once operational, Ambarau is expected to deliver 11MW. A third hydropower station, Azambi, also expected to generate 11MW, is planned to come on line in 2018.
At Siguiri, a range of projects is targeted at reducing energy costs, extending the mine life and implementing heap leaching to supplement production.
AUSTRALASIA
Attributable gold production (000oz) | Average number of employees | |||||||
Operations | ||||||||
Australia | ||||||||
1. Sunrise Dam | 216 | 400 | ||||||
2. Tropicana 70% | 344 | 436 |
AngloGold Ashanti’s Australasian assets comprise the wholly owned Sunrise Dam and the 70 percent-owned Tropicana Gold mine, Australia’s newest gold mine. Tropicana completed its second full year of production in 2015.
Australasia - Key Statistics
Unit | 2015 | 2014 | 2013 | |||||||||||||
Operation | ||||||||||||||||
Tonnes treated/milled | Mt | 8.2 | 7.8 | 4.3 | ||||||||||||
Pay limit | oz/t | 0.06 | 0.07 | 0.09 | ||||||||||||
g/t | 1.85 | 2.29 | 2.82 | |||||||||||||
Recovered grade | oz/t | 0.068 | 0.078 | 0.081 | ||||||||||||
g/t | 2.12 | 2.43 | 2.51 | |||||||||||||
Gold production (attributable) | 000oz | 560 | 620 | 342 | ||||||||||||
Total cash costs(1) | $/oz | 702 | 804 | 1,047 | ||||||||||||
Total production costs(1) | $/oz | 919 | 1,070 | 1,333 | ||||||||||||
All-in sustaining costs(1)(2) | $/oz | 875 | 986 | 1,376 | ||||||||||||
Capital expenditure | $m | 78 | 91 | 285 | ||||||||||||
Safety | ||||||||||||||||
Number of fatalities | 0 | 0 | 0 | |||||||||||||
AIFR | Per million hours worked | 8.56 | 10.73 | 7.91 | ||||||||||||
People | ||||||||||||||||
Average no of employees: Total | 836 | 832 | 925 | |||||||||||||
Permanent employees | 195 | 194 | 281 | |||||||||||||
Contractors | 641 | 638 | 644 |
(1) | Total cash costs, total production costs and |
(2) |
|
Production and costs
Total gold production for the Australasian region of 560,000oz in 2015 was 60,000oz, or 10 percent, lower than the previous year. This decline was largely due to an 18 percent decrease in production from Sunrise Dam.
Production at Sunrise Dam in 2015 was 46,000oz lower than in 2014, due primarily to lower mined grades. The lower grade of this ore was largely due to the nature and location of the zones mined, which were on the periphery of the main ore bodies and generally more variable than those mined in 2014.
Tropicana produced 491,000oz (of which 344,000oz constituted AngloGold Ashanti’s share), reaching its 1 millionth ounce on schedule, just over two years since pouring first gold. Production was 4 percent lower than in 2014 due to the decrease in the average head grade to 2.57 g/t, which is consistent with the grade streaming strategy that underpins the life of mine plan. The lower grades in 2015 were partially offset by an increase in throughput in the processing plant to 6.2Mt (2014: 5.7Mt).
Total cash costs for the year decreased by 13 percent compared to 2014, largely as a result of favourable currency movements. Costs and production remained within guidance and received the benefit of a weaker Australian dollar relative to the US dollar and also lower oil prices.
Capital expenditure
Capital expenditure in total decreased by $13m compared to 2014, largely as a result of favourable currency movements. Stay in business Ore Reserve development, decreased by $6m compared to 2014 while the project capital reduced by $7m, following completion of the Tropicana development.
Safety
Overall safety performance improved at both mines in the region, but particularly at Tropicana, which recorded its best performance to date. There were again no fatalities.
People
A total of 836 people were employed on average by the Australia region – 195 full time employees and 641 contractors.
Ore Reserve
At the end of 2015, the total attributable Ore Reserve for the Australasia Region was 3.09 million ounces (2014: 3.53 million ounces). This makes up around six percent of the group’s Ore Reserve.
Growth and improvement
At Sunrise Dam, work is being carried out to assess the viability of an underground crusher and conveyor system for haulage via a new decline at the northern end of the operation. The conveyor decline would also provide exploration drilling access to the northern parts of the ore body that have been difficult and costly to drill from surface due to the surface waste dumps and salt lake.
At Tropicana, studies are being carried out to assess an alternative, low-cost approach to mining the down-dip extensions of the Havana and Tropicana pits, along with extensions to the north and south.
The mining study is looking at the application of mine design techniques that are used more commonly in mining other commodities such as coal. The work is based on a starter pit followed by strip mining of a large cutback, then backfilling the mined out areas. This approach, which is aimed at extending the mine life, would reduce stripping costs substantially with in-pit dumping of waste and shorter haulage distances.
A substantive Mineral Resource definition programme is being carried out as part of this study, supported by data generated by 3D seismic surveys carried out in 2014 and 2015. This data has enabled the mineralised zones down-dip of the Tropicana ore bodies to be imaged, generating a structural model to help cost-effectively target deep drill holes. The first drill testing of these targets in 2015 returned encouraging results and confirmed the structural interpretation. It is expected that approximately 130,000m of drilling will be carried out at Tropicana in 2016.
Processing plant optimisation work is also underway at Tropicana to debottleneck the processing plant, maximise usage of the larger pieces of equipment, and increase throughput from annual nameplate capacity of 5.8Mt to between 7.0Mt and 7.5Mt through staged increases. The increase in throughput is expected to offset the production decline that will occur as grades decrease over time, as per the mine plan. Upgrade work will be conducted during 2016 with the benefits expected to be realised from 2017 onwards.
THE AMERICAS
TheAngloGold Ashanti has three mining operations – both open pit and deep level mining – in the Americas region. In addition, there is an important growth area for AngloGold Ashanti with operationsactive greenfields exploration programme underway in Argentina, Brazil and the United States.Colombia.
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Attributable gold production (000oz) | Average number of employees | Attributable gold production (000oz) | Average number of employees | |||||||||||||
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Operations | ||||||||||||||||
1. Argentina | ||||||||||||||||
Cerro Vanguardia 92.5% | 241 | 1,696 | 278 | 1,687 | ||||||||||||
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2. Brazil | ||||||||||||||||
AGA Mineração | 391 | 4,377 | 421 | 4,546 | ||||||||||||
Serra Grande | 138 | 1,469 | 132 | 1,446 | ||||||||||||
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3. United States | ||||||||||||||||
Cripple Creek & Victor | 231 | 832 | ||||||||||||||
3. Colombia – exploration programme | ||||||||||||||||
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Americas - Key Statistics (1)
Unit | 2013 | 2012 | 2011 | Unit | 2015 | 2014(5) | 2013(5) | |||||||||||||||||||||||||||||||||||||
Operation | ||||||||||||||||||||||||||||||||||||||||||||
Tonnes treated/milled | Mt | 26.7 | 25.7 | 23.6 | Mt | 7 | 6.8 | 5.9 | ||||||||||||||||||||||||||||||||||||
Pay limit | oz/t | 0.026 | 0.024 | 0.026 | oz/t | 0.098 | 0.092 | 0.096 | ||||||||||||||||||||||||||||||||||||
g/t | 0.897 | 0.822 | 0.891 | g/t | 3.351 | 3.152 | 3.294 | |||||||||||||||||||||||||||||||||||||
Recovered grade | oz/t | 0.036 | 0.034 | 0.034 | oz/t | 0.108 | 0.104 | 0.120 | ||||||||||||||||||||||||||||||||||||
g/t | 1.20 | 1.16 | 1.15 | g/t | 3.71 | 3.58 | 4.13 | |||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||
Gold production (Attributable) | 000oz | 831 | 785 | 770 | ||||||||||||||||||||||||||||||||||||||||
Silver (attributable) | Moz | 4.4 | 3.1 | 3.1 | ||||||||||||||||||||||||||||||||||||||||
Total cash costs(2) | $/oz | 576 | 676 | 653 | ||||||||||||||||||||||||||||||||||||||||
Total production costs(2) | $/oz | 845 | 918 | 892 | ||||||||||||||||||||||||||||||||||||||||
All-in sustaining costs(2)(3) | $/oz | 792 | 974 | 1,011 | ||||||||||||||||||||||||||||||||||||||||
Capital expenditure(4) | $m | 196 | 225 | 253 | ||||||||||||||||||||||||||||||||||||||||
Safety | ||||||||||||||||||||||||||||||||||||||||||||
Number of fatalities | 0 | 1 | 2 | 1 | 2 | 0 | ||||||||||||||||||||||||||||||||||||||
AIFR | Per million hours worked | 3.58 | 4.34 | 6.33 | Per million hours worked | 5.61 | 3.81 | 4.74 | ||||||||||||||||||||||||||||||||||||
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People | ||||||||||||||||||||||||||||||||||||||||||||
Average no of employees: Total | 8,374 | 7,896 | 7,389 | 7,679 | 8,588 | 8,374 | ||||||||||||||||||||||||||||||||||||||
Permanent employees | 5,979 | 5,509 | 5,273 | 5,492 | 5,944 | 5,979 | ||||||||||||||||||||||||||||||||||||||
Contractors | 2,395 | 2,387 | 2,116 | 2,187 | 2,644 | 2,395 | ||||||||||||||||||||||||||||||||||||||
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(1) | Key statistics are for the continuing operations in the region and exclude CC&V which was sold effective 3 August. “Operation” key statistic comparatives have been restated. |
(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 |
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(3) | Excludes stockpile impairments. |
(4) |
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Production and costs
Production fromin the Americas region increased by 5%46,000oz, or six percent, in 2015 compared to the previous year (excluding production from 953KozCC&V) due principally to a 13 percent increase in 2012 to 1Mozproduction at Cerro Vanguardia and a four percent increase in 2013.
The higher level of regional production reflected the first full year of 100% ownership of Serra Grande and increasedat AGA Mineração. These increases were partially offset by lower output from Serra Grande. The region also produced 4.4Moz of by-product silver.
Cerro Vanguardia which delivered higher tonnages and grades.
AGA Mineração also deliveredcontinued to deliver a strong performance with increasedrecord production driven by a planned improvement in grade with a greater proportion of mill feed coming from underground and better recoveries. Improved production at AGA Mineração was a result of higher tonnage and better feed grades atfrom both the Cuiabá and Córrego do Sítio complexesand Cuiabá complexes.
Teams in the second half of the year.
The Americas region’s contributionregion continued to group attributable production remained stable at around 24%. In addition, the region produced 3.3Moz of silver as a by-productfocus on limiting cost increases 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 theincreasingly challenging inflationary environments in both countries. Higher costs at CC&VArgentina and Brazil, by prioritising a range of operational improvements.
Cost control efforts were drivenaided by lower recoverable grades, the longer haulage distances and increased prices of component parts. Lowerhigher gold and silver prices resultedproduction levels, the removal of the higher cost CC&V production and local currency depreciation, given that the Brazilian real was on average 42 percent weaker in reduced taxation2015 than in 2014 and royalties at all operations.the Argentinian peso was on average 14 percent weaker in 2015 than in 2014 against the dollar. Efficiency initiatives covered a range of areas, including labour and contractor costs, energy, consumables and stay-in-business capital, as well as a drive to increase production.
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 stabilisationcontinued to implement phase II of the carbon-in-leachProject 500 efficiency initiative with a focus on optimising mill throughput, improving silver recovery, delivering more underground ore to the mill and regeneration circuits.improving the overall effectiveness of key administration areas such as procurement and warehousing.
In Brazil, the cost management programme that started in 2013 continued into its third year, yielding a range of productivity improvements including the optimisation of operational processes, reductions in the price of power and materials and decreases in administrative expenses. At Córrego do Sítio, higher grades contributed an additional 20,000oz from the Carvoaria ore body and increased development rates further aided cost improvements.
Capital expenditure
CapitalThe region’s capital expenditure of $196 million (including Colombia and excluding CC&V), was 13 percent lower than the previous year. While sharp currency devaluations had a negative effect on the purchase of imported items, they had a positive impact on expenditure relating to Ore Reserve development and locally produced items. Most of the capital expenditure was contained in the region. This follows the group-wide review of costson ore development 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.deferred stripping ($101 million) and general stay-in-business or maintenance capital ($89 million).
Safety
No fatalities wereTragically, one fatality was reported in the Americas and the AIFR for the region was 3.58 per million hours worked in 2013 (2012: 4.34).2015, when an employee died in a fall-of-ground incident at Lamego.
People
A total of 8,3747,679 people were employed on average by the Americas region in 2013 – 5,9792015, including 5,492 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 2012.2,187 contractors.
Ore Reserve
At the end of 2013,2015, the total attributable Ore Reserve for the Americas Region, was 8.823.21 million ounces (2012: 11.01(2014: 7.56 million ounces). This makes up around 13six percent of the group’s Ore Reserve.
Growth and improvement
CC&V’sAt Cerro Vanguardia, the expansion project (MLE2) progressed according to plan. increase underground production over the next five years is underway and remains on schedule. During 2015 an initiative to accelerate open pit and underground operations using an external contractor was approved in order to improve the production profile. Additional cost reductions are planned by further increasing plant throughput and recovery as well as optimising shift configuration and backfilling minedout pits with waste material to reduce haul distances. Additionally, mineral rights were acquired adjacent to Cerro Vanguardia, where exploration will be undertaken
The mill is scheduledfocus at Cuiabá remained on ventilation and transport projects to be commissioned bysupport mining at increased depth, as well as the end of 2014, withoverall drive to maintain stable production due to beginlevels in 2015.
Optimisationcoming years. Córrego do Sítio continued 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 completionproduction in the medium term, including development of the underground Mina I ore body, which is expected by Decemberto be the main contributor in 2016. Drilling programmes aimed at opening a new pit at Mina III and new underground sites at Mina II and São Bento Deep are underway.
At Serra Grande, underground diamond directional drilling proved the continuity of one of the Mina III high-grade gold-bearing quartz veins, from 900m to 1,150m at depth. Importantly, this vein appears to increase in both thickness and length along the strike. Palmeiras Sul targets were drilled in the mine’s tenements confirming the addition of a high-grade Mineral Resource. Surface and underground drilling continued to define the Inga ore body, expected to go into production in 2016. New open-pit potential was also confirmed, creating a pipeline of small pits to continue producing.
Colombia remains a key area of focus and its exploration programme continues to yield encouraging results. The Nuevo Chaquiro target is a porphyry-related, copper-gold mineralised stockwork system, located within the Western Cordillera, where long intersections of significant copper mineralisation with gold credits were intersected during 2013 and 2014. Diamond drilling was undertaken in 2015 to delineate the limits of the higher-grade core and increase confidence in the highest-grade portion of the ore body to support a small, phase I concept design. Advanced studies to complete the concept study phase are planned for 2016.
Gramalote exploration focused on regional exploration drilling as well as drilling to improve definition of the low-grade saprolite (oxide ore) Mineral Resource. Some peripheral exploration drilling was also done to define a small, underground Mineral Resource option for the artisanal and small-scale mining co-existence model. The Mineral Resource model was updated for the three Gramalote deposits: Gramalote Central, Monjas West and Trinidad, incorporating the latest drill-hole information, reviewed estimation parameters and changes in the geo-statistical methodology (localised uniform conditioning).
At the La Colosa project, drilling focused on data collection at infrastructure locations. No Mineral Resource drilling was conducted. In early 2015, geotechnical and hydrogeological drilling was initiated at the proposed tailings management facility and the waste rock facility. Mine planning continues, with the validation of current base-case opportunities and a small mine concept and several alternatives under evaluation. Metallurgical test work completed in 2015 was conducted to validate process opportunities, including an increase in recovery and plant throughput. A trade-off study is in progress and is expected to be finalised in early 2016.
EXPLORATION REVIEW
Our exploration is focused on creating value by providing long-term optionality and improving the portfolio quality. The strategic review of the project development and exploration programmes resulted in significant realignment of the global exploration programme.objectives are met by:
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 makediscover large, high valuehigh-value Mineral Resources that will eventually lead to the development of new gold mines. Our greenfields exploration team was recognised by a leading industry research group, in 2015 as the industry’s most successful in Mineral Resource discovery. The team has a proven track record that includes the discovery of world-class ore bodies at La Colosa, Gramalote, Tropicana and Nuevo Chaquiro. These discoveries leading directlyare attributed to new mines.our committed and professional team of geoscientists working on a portfolio of highly prospective and rigorously prioritised greenfields ground holdings.
Brownfields exploration, which is focusedfocuses on delivering value through incremental additions to theour Ore Reserve in existing mines as well as new discoveries in defined areas around existing operations. Brownfields exploration actively drives the creation of value by growing our Mineral Resource and Ore Reserve, our major assets. Our brownfields exploration programme is based on innovative geological modelling and mine planning and continual optimisation of our asset portfolio.
GreenfieldGreenfields exploration
AngloGold Ashanti’sOur 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 retainsprogramme has over 23,000km12,000km2 of highly-prospective ground in threetwo countries – Australia and Colombia – and Guinea – while also maintainingmaintains small ground positions in Argentina and Brazil.
In 2013, advanced greenfields exploration activities were conducted Expenditure was $22.4 million in six countries with2015, including over 161km50,000m of diamond, reverse circulation and aircore drilling completed. Drilling programmes aimed to test new high-priority targetsdrilling. This programme also included focused generative activities 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 agreementscountries 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 explorationoperational synergies.
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.
Mponeng (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 onat the Tropicana project, in joint venture with Independence Group NL (AngloGold Ashanti interest 70%)Ashanti: 70 percent), progressed well through the year with over 72,000mmore than 33,000m of aircore 4,800mdrilling, 8,500m of reverse circulation drilling and 600m2,200m of diamond drilling completed. EncouragingExcellent initial results were returned from several prospects. Geophysicalthe Madras prospect approximately 25km south of Tropicana. Significant drill intersections in shallow oxide material included 15m @ 5.08g/t Au from 45m, 25m @ 2.47g/t Au from 35m, and 17m @ 4.22g/t Au from 64m. To date, the Madras mineralisation has been found to be restricted in size and only well developed in the weathered (saprolite) zone.
Airborne geophysical surveys were also completed over key prospectsseveral new projects wholly owned by AngloGold Ashanti including Strawbridge, Pindabunna, and included airborne EMNeds Creek in Western Australia. Target generation and magnetics, ground-based IP and EM, and seismic surveying. Results fromfirst phase field work is continuing on these surveys are currently being assessed and will be used to plan follow-up work in 2014.projects. In New South Wales a farm-in agreement was executed with Mungana Goldminesat the Mullion Project (wholly-owned), 2,500m of diamond drilling were completed 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 delineatingfollow up bedrock 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 byidentified from geophysical surveys identified additional mill feed material. Exploration and Mineral Resource modelling also successfully identified material to process at the heap leach facility.
Brazilconducted in 2014. Although significant favourable alteration was intersected, only low tenor results were returned.
In Colombia, the Iron Quadrangle,Quebradona project was transferred to the Mineral Resource development drilling programmes (89,322m) continued atprojects team early in 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. Regionalyear. Greenfields exploration programmes were conducted to test various near mine satellite projects.
At Serra Grande, drilling totalled 62,310m. The explorationthen focused on the newly identified Inga mineralised structure below the Pequizão ore body. Regional early phase exploration continued,Guintar project west of Medellin where mapping outlined an extensive alteration system in sediments overlying a dioritic porphyry intrusion with geophysical surveysassociated coppergold and soil sampling campaigns continuing to be useful methods for target identification in preparation for surfaceepithermal gold occurrences. An eight-hole drilling programmesprogramme commenced in the district.third quarter, with 3,000m completed by year end. Drilling intersected hornfelsed sedimentary rocks and breccia zones with significant pyrrhotite and pyrite in fractures, stringers and fine stockworks returning anomalous geochemical values.
In Brazil, greenfields exploration progressedwas undertaken early in the year on the Graben project, in joint venture with Graben Mineração (AngloGold Ashanti interest 51%)Ashanti: 80 percent). Following the completionA programme of high-resolution airborne radio/magnetics surveying and reconnaissance soil geochemistry, approximately 13,000m of aircore and 3,000m1,800m of diamond drilling were completed on priority targets withinwas completed. Results did not meet expectations and the highly prospective Juruena Belt.joint venture was terminated. Project generation work in other areas in Brazil progressed for the rest of the year.
ColombiaBrownfields exploration
Brownfields exploration was carried out in 10 countries, in and around AngloGold Ashanti operations. A total of 469,818m of diamond and reverse circulation drilling was completed during the year.
South Africa: Four surface holes were drilled during the year – three are ongoing at Mponeng’s Western Ultra Deep Levels (WUDLs) and one was completed at the Vaal River operations – achieving a total drilled depth of 4,966m.
QuebradonaArgentina: In Colombia, focused greenfieldsAt Cerro Vanguardia, drilling programmes for Mineral Resource expansion and exploration efforts continued during the year. The focus was on delineating vein extensions along strike and at the Nuevo Chaquiro target,depth. Mapping, trenching and channel sampling continued as part of the Quebradona project, in a joint venture with B2Gold (AngloGold Ashanti’s interest 84.6%) with over 12,000m of diamondreconnaissance programme to identify new 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.targets.
GramaloteBrazil: In the Iron Quadrangle, the underground drilling programmes for Mineral Resource development continued at both the Cuiabá and Lamego mines. At Cuiabá, additional drilling was directed at satellite mineralisation that may be accessible from existing infrastructure. Surface drilling programmes at Córrego do Sítio continued to infill and expand the oxide Mineral Resource while the underground programme added extensions to several ore bodies, including the Inga ore body.
Colombia: Exploration (37,459m) in the Gramalote area was focused on infill drilling to support the updated Mineral Resource estimation forcontinued, with programmes in and around the Gramalote Central deposit. This programme included theLimited drilling of a detailed grade-control spaced block. Drilling programmes were also conducted to expandwithin 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.joint venture area.
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 relatedproject-related drilling which was expanded to supportcontinued, supporting 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 ResourceQuebradona project development drilling programme continued during the yearyear. The programme focus was directed at Cripple Creekinfill drilling in the higher grade, upper part of the deposit.
Tanzania: Drilling focused on Mineral Resource delineation, testing both strike and dip extent of current deposits as well as confirming underground potential (Matandani North, Geita Hill East and Star & Victor.Comet). Mineral Resource conversion infill-drilling programmes took place at Nyankanga Cut 7, Nyankanga Cut 8 and Star & Comet Cut 3. Pre-resource drilling programmes were undertaken to test targets at Star & Comet Deeps, Matandani North and Geita Hill East Deeps. Vertical seismic profiling and metallurgical test work drilling was conducted at Nyankanga, Geita Hill and Matandani respectively. In all, 50 holes (15,273m) were completed. A 2D ground seismic survey was conducted along two sectional lines across Nyankanga and Geita Hill to confirm the suitability of the geology and mineralisation in these deposits for 3D seismic modelling.
Guinea: A total of 43,691m46,007m was drilled at Siguiri during the year across a range of programmes including fresh rock projects at several pits and oxide reconnaissance drilling. In all, reverse circulation drilling totalled 35,080m plus limited (1,077m) aircore drilling, with the remainder being diamond drilling or RCDD drilling. The reverse circulation drilling included 4,416m of advanced grade control drilling in a test block within the Kami pit.
Ghana: No exploration was conducted at Obuasi. Exploration at Iduapriem during the first half of the year focused on Mineral Resource infill drilling at Block 5 to upgrade the Inferred Mineral Resource to Indicated. Reconnaissance exploration (soil geochemistry, mapping and limited trenching) was also completed over the Bankyem, Mile 5 and Ajopa northwest targets. In the latter half of the year, drilling was initiated at Bankyem, Block 4S and Mile 5. A total of 6,924m drilling was completed in 2015.
Democratic Republic of the Congo: Total diamond drilling for near-mine exploration at Kibali during 2015 totalled 15,883m, with an additional 1,760m drilled on regional projects. The exploration aims to fulfil three main objectives: Mineral Resource – Ore Reserve replacement, the discovery of potential oxide displacement ounces, and identification and development of new targets.
Mali: A total of 13,110m of exploration reverse circulation drilling focused on the Sadiola North area and Tabakoto in 2015.
Australia: Exploration activities in 2015 were primarily on the Mineral Resource expansion programme at Tropicana with a drilling campaign comprising more than 23,000m of aircore, 27,000m of reverse circulation and 38,000m of diamond drilling completed. InfillDrilling was focused on testing for extensions to mineralisation in the Tropicana, Swizzler, Havana and Havana South areas. An additional block of 3D seismic data was acquired at the southern end of the mine area to aid further exploration.
At Sunrise Dam, underground Mineral Resource development drilling continued throughout the year. Exploration diamond drilling focused primarily on extending the Inferred Mineral Resource as per the mine plan and underground grade control reverse circulation drilling continued to improve definitionfocus on converting the Indicated Mineral Resource into a mineable grade control block model for use in stope development designs. A start was made on the development of material withinkey diamond drilling platforms, which will be used over the currentlife of mine designs that will feedto drill test exploration targets along the mill facility currently under construction. Otherstrike length of the deposit. A lake aircore drilling programme of just over 9,000m of drilling was directed toward identifying expansion opportunitiescompleted at the Kraken Project, situated over the western extents of the Lake Carey playa salt lake system, approximately 10km east of Sunrise Dam. Several target areas were drill tested for the current open pit operations through high wall laybacks. Selective drilling was also conducted to test deepergold mineralisation. All targets below or adjacent to planned open pit designs that may provide additional mill feed material.are beneath lake cover sequences.
TECHNOLOGY AND INNOVATION
Since 2010, theTowards a new mining method for ultra-deep South African mines
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.
Inmade headway during 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 developmentyear, specifically pertaining to the development of key technologies that are aimed at establishingand the basemethodology employed in achieving the project’s core objectives: to safely“safely mine as much as possible ofall the gold, available with less waste,only the gold, all the time” from our deep-level underground mines, particularly those in the South Africa region. The latest generation reef-boring machine, the MK IV was successfully deployed at AngloGold Ashanti’sTauTona’s lower CLR shaft pillar. During 2015, reef-boring cycle times improved from 159 hours per hole to 82 hours per hole, which compares favourably to the 72 hours per hole targeted.
The ultra-high-strength backfill product has also been successfully developed to the stage where it can be pumped over the required distance of 1,000m, a pre-requisite for a full production mining cycle. This demonstrates progress on the work done that seeks to establish the basis for a safe, automated, deep-level underground mining operations.method at AngloGold Ashanti.
Reef boring
Test site
Since deployment and commissioning of the MKII machine in 2013, a total of 56 holes has been drilled to date. Having completed drilling of the available block of ground, this machine was decommissioned in the third quarter of 2015. The MKIV reef-boring machine was successfully installed and commissioned in September 2015 at the extended test site at TauTona, and had drilled seven holes by year-end. Due to challenges experienced in the collector bin, the machine was unable to drill. These constraints affected the operation of the collector bin, causing a shortage of material cars to transport chippings away from the hole. The collector bin has since been redesigned, modified and returned underground for further trials, which are expected to begin in the first half of 2016. Additional material cars have been sourced and delivered.
Prototype site – medium-range machines
Three machines were commissioned at the prototype sites and a total of 81 holes were drilled in 2015.
Drilling at Moab Khotsong’s prototype site, where five holes were drilled within that specific block of ground, was suspended owing to the machine’s incompatibility with that reef – the geological complexity of the block of ground where drilling took place hampered progress with only a low percentage extraction rate achieved. The machine was relocated to TauTona for drilling in the VCR plane. Geological drilling continued to determine the best way forward for either mechanical or conventional extraction at the sites identified at Moab Khotsong.
Prototype site – Small-range machines
The geotechnical complexity of the block of ground hampered drilling and only a low percentage extraction was achieved due to the faulty reef plane. Once it was established that the stage gate of 80 percent extraction could not be achieved, drilling was discontinued.
Mechanical development
This development opens and equips the tunnels in which the reef-boring machines drill. However, the methodology for the opening up of mining grids for continuous reef boring remained a significant technical challenge in 2015.
Ultra-high-strength backfill
Surface trials to reach a pumping distance of up to 1,000m were successful at a product temperature ranging between 30°C and 35°C. This temperature range simulated the underground product temperature range. A tailings drying plant was successfully constructed and commissioned on surface at TauTona and a VCR plant was successfully constructed on 68 level. Commissioning has begun.
The Savuka plant was successfully trialled by RULA, the company assisting with design and manufacturing.
Geological drilling
Despite delays experienced during the year, drilling conducted in the last quarter of the year aimed at resolving the accuracy and deflection constraints by testing different stabiliser configurations. A total of five wet holes were drilled and plotted and final analysis is expected to be reported on in the first half of 2016.
The new fit-for-purpose Bohrmeister drill rig is due to be delivered and commissioned for drilling in the first half of 2016.
4C. |
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.Brazil.
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,management team, chaired by the Chief Executive Officer. See “Item 6.:6: Directors, senior managementSenior Management and employees”Employees”.
Support is provided to the executive committeemanagement team 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.:19: Exhibits – Exhibit 19.8 Principal subsidiaries and operating entities” for details.
4D. |
For more information about AngloGold Ashanti’s mines, including as to the company’s mining rights and licences refer “Item 4B: Business Overview—The regulatory environment enabling AngloGold Ashanti to mine”.
AngloGold Ashanti’s operating mines are all accessible by road.
SOUTH AFRICA - GEOLOGY
The Witwatersrand Basin comprises a six kilometresix-kilometre thick sequence of inter-bedded argillaceous and arenaceous sediments that extend laterally for some 300 kilometres north-east/south-west and 100 kilometres 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 kilometres 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 metres thick, which 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. The 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.
Operations in the South Africa region are powered by electricity from Eskom Holdings Limited which supplies 95 percent of the electricity used in South Africa.
•Vaal River operations
Description
The Vaal River operations consist of Great Noligwa, Kopanang, Moab Khotsong as well as surface operations. The process of integrating Great Noligwa into Moab Khotsong began in 2014 and, from an accounting perspective, these operations were treated as one cash-generating unit starting on 1 January 2015. This integration process will continue in 2016.
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 8595-99 percent of the reserveOre Reserve tonnage with mining grades between 5 – 10 and 20g/g/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 kilometre above the Vaal Reef.
The “C” Reef is a thin, small pebble conglomerate with a carbon-rich basal contact, located approximately 270 metres above the Vaal Reef. It has less than 1one percent of the estimated reservesOre 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
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West Gold Plant | Noligwa Gold Plant | Mispah Gold Plant | Kopanang Gold Plant | |||||||||||||||||||||||||||||||||
West Gold Plant | East Gold Acid and Float Plant | Noligwa Gold Plant | Mispah Gold Plant | Kopanang Gold Plant |
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Gold plants | ||||||||||||||||||||||||||||||||||||
Capacity (000 tonnes/month) | 180 | 309 | 260 | 140 | 420 | 180 | 260 | 140 | 420 | |||||||||||||||||||||||||||
Uranium plants | ||||||||||||||||||||||||||||||||||||
Capacity (000 tonnes/month) | – | – | 260 | – | – | — | 260 | — | — | |||||||||||||||||||||||||||
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Vaal River – Great Noligwa
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 from a twin-shaft system over eight main levels at an average depth of 2,400 metres. Given the geological complexity of the orebody at Great Noligwa, a pillar mining method is employed.
The mine shares a milling and treatment circuit with Moab Khotsong and Kopanang.
Vaal River – Kopanang
Description
Kopanang is an underground operation located in the Free State province, roughly 170 kilometres southwest of Johannesburg and approximately 10 kilometres southeast of the town of Orkney on a lease area of 35km2. The operation, which started in 1984, is west of neighbour Great Noligwa (now part of Moab Khotsong) and bound to the south by the Jersey Fault. Gold is the primary output, with uranium oxide as a by-product from a single underground shaft system to a depth of 2,600 metres.
Kopanang almost exclusively exploits the Vaal Reef, although minor amounts of gold are also extracted from the secondary Crystalkop Reef. Given the geologically complex orebody, scattered mining is used.
Vaal River – Moab Khotsong
Description
Moab Khotsong is an underground mine that started operations in 2003 and is AGA’s newest gold mine in South Africa. It is situated near Orkney, Klerksdorp and Viljoenskroon, about 180 kilometres southwest of Johannesburg. Given the geological complexity of the Vaal Reef, scattered mining is employed. Great Noligwa mine was merged with Moab Khotsong in 2014 and operations are now collectively referred to as Moab Khotsong. Great Noligwa commenced production in 1968.
Surface Operations
Surface Operations consists of Hard Rock Surface Sources and Mine Waste Solutions (MWS).
Hard Rock Surface SourcesLow grade stockpiles
Description
Hard Rock Surface Sources extract gold from marginal ore dumps at variousThe Vaal River and West Wits operations extract gold from various low grade stockpiles where there is more metallurgical capacity than reef mined. Uranium is produced as a by-product at Vaal River South Uranium Plant. In addition, backfill product is produced and used as support in mining operations. The Hard Rock Surface Sources includes the rail transport infrastructure, the Vaal River and West Wits Laboratories and tailings management facilities.
Mine Waste Solutions (MWS)
Description
MWS is a gold and uranium tailings recovery operation located in the western portion of the Witwatersrand Basin, some 160 kilometres from Johannesburg, approximately 8eight 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 are made up of deposits from three gold and uranium mines that operated for 50 years.
The tailings dams are scattered over an area that stretches approximately 13.5 kilometres north to south and 14 kilometres east to west. The footprints of the 14 tailings dams cover an area of approximately 1,100 hectares.
The MWS gold plants have the capacity to treat tailings of 2.331.93 million tonnes per month. The uranium plant has a design capacity of 135,000100,000 tonnes per months and constructionmonth. The uranium plant was completed during Marchcommissioned in the fourth quarter of 2014.
The tailings dams are comprised of tailings material which originated from the processing of underground ore from the now defunct Buffelsfontein Gold Mine (“BGM”)(BGM) and Stilfontein Gold Mine (“SGM”)(SGM). Both BGM and SGM predominately extracted gold from conglomerate reefs of the Witwatersrand Basin. The material contained in the tailings dams is generally fine.
West Wits operations
Description
The West Wits operations, Mponeng and TauTona, are situated southwest of Johannesburg, on the border between Gauteng and North West Province. From 1 January 2013 the Savuka mine was incorporated into the TauTona mine to access Savuka’s remaining Ore ReservesReserve via TauTona’s infrastructure and Savuka and TauTona operate as a single mine.
AngloGold Ashanti holds a number of mining rights in the Vaal River Operation which have been successfully converted, executed and registered as new order mining rights at the Mineral and Petroleum Resources Titles Office (MPRTO).
Geology
Two reef horizons are exploited at the West Wits operations, the VCR located at the top of the Central Rand Group and the CLR near the base. The separation between the two reefs increases from east to west from 400 to 900 metres, due to unconformity in the VCR.VCR unconformity. TauTona exploits both reefs, whereas Mponeng only mines the VCR. Faults of greater than 70 metres are rare. The CLR consists of one or more conglomerate units and varies from several centimetres to more than three metres 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 centimetres to more than three metres in thickness.
West Wits – Mponeng
Description
Mponeng, in operation since 1986, is located between the towns of Carletonville and Fochville on the border between Gauteng and the North West Province, southwest of Johannesburg. The underground operation, the world’s deepest mine, extracts the VCR at depths between 2,4002,800 metres and 3,9003,400 metres through sequential-grid mining. In the future, the mining of the CLR from Mponeng will steadily increase. The Mponeng lease area is constrained to the north by the TauTona mine, to the east by Gold Fields’Sibanye’s Driefontein mine and to the west by Harmony’s Kusasalethu mine. Mponeng comprises a twin-shaft system housing two surface shafts and two sub-shafts. Ore is treated and smelted at the mine’s gold plant. The plant has a monthly capacity of 170,000 tonnes.
West Wits – TauTona
Description
TauTona, in operation since 1961, lies on the West Wits Line, just south of Carletonville in Gauteng, about 70 kilometres southwest of Johannesburg. MiningUnderground mining takes place at depths of between 1,8502,000 metres and 3,4503,640 metres. The mine has a three shaft system, supported by secondary and tertiary shafts and employs mainly sequential grid mining method to mine the CLR. Savuka, which is adjacent to and shared a processing plant with TauTona, was incorporated into TauTona following a study in 2012 that concluded that the optimal, most efficient means of accessing Savuka’s remaining resourcesMineral Resource would be through TauTona’s infrastructure. The merging of Savuka into TauTona early in 2013 was determined as the most efficient way of mining the remainder of Savuka’s lower grade reserves,Ore Reserve, while minimising operational and infrastructure maintenance costs. A link between the two mines reduces dependency on a single infrastructure system, including ore passes.
The gold plantTauTona and Mponeng reef material is processed through the Mponeng Gold Plant.
The Savuka Gold Plant has a monthly capacity of 165,000 tonnes.tonnes, processing mainly material from the Mponeng low grade stockpile.
CONTINENTAL AFRICA
GHANA - Summary of metallurgical operations
Obuasi | Iduapriem | |||||||||||||||
Sulphide Treatment Plant | Tailings Treatment Plant | Alternate Ore Treatment Plant | Iduapriem Plant | |||||||||||||
Capacity (000 tonnes/month) | 195 | 180 | 120 | 388 |
Obuasi | Iduapriem | |||||||||||||||
Sulphide Treatment Plant | Tailings Treatment Plant | Alternate Ore Treatment Plant | Iduapriem Plant | |||||||||||||
Capacity (000 tonnes/month) | 195 | 180 | 120 | 392 |
Ghana – Iduapriem
Description
Iduapriem, wholly owned by AngloGold Ashanti since September 2007, comprises the Iduapriem and Teberebie properties on a 110km105km2 concession. The mine, which began operations in 1992, is situated in the western region of Ghana, some 7085 kilometres north of the coastal city of Takoradi and 10eight kilometres southwest of Tarkwa.
Iduapriem is an open-pit mine and its processing facilities include a Carbon-in-pulp (CIP) plant.
Geology
The Iduapriem and Teberebie properties are located along the southern end of the Tarkwa basin. The mineralisation 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.
Ghana – Obuasi
Description
Obuasi, wholly owned by AngloGold Ashanti since 2004 and currently in a limited operating phase, is located in the Ashanti Region of Ghana, some 320 kilometres north-west of the capital Accra and approximately 60 kilometres south of Kumasi. Mining operations are primarily underground, to a depth of 1.5 kilometres. However, some surface mining in the form of open pit and tailings reclamation also occurs. Obuasi originally opened in 1897.
Geology
The gold deposits at Obuasi are part of a prominent gold belt of Proterozoic (Birimian) volcano-sedimentary and igneous formations which extend for a distance of approximately 300 kilometres in a north-east/south-west trend insouth-western Ghana. Obuasi mineralisation is shear-zone related and there are three main structural trends hosting gold mineralisation: the Obuasi trend, the Gyabunsu trend and the Binsere trend.
Two main ore types are mined:
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-grainedcoarse-grained and occasionally are visible to the naked eye. This ore type is generally non-refractory; and
sulphide ore which is characterised by the inclusion of gold in the crystal structure of a sulphide material. The gold in these ores is fine-grained and often locked in arsenopyrite. Higher gold grades tend to be associated with finer grained arsenopyrite crystals. Other prominent minerals include quartz, chlorite and sericite. Sulphide ore is generally refractory.
Power is supplied to the mines by the Volta River Authority.Authority and the transmission is done by the GridCo Company.
GUINEAAUSTRALASIA
DescriptionAustralia
Siguiri,Sunrise Dam
Tropicana (70%)(8)
AMERICAS
Argentina
Cerro Vanguardia (92.5%)
Brazil
AGA Mineração(5)
Serra Grande
United States
Cripple Creek & Victor(9)
(1) | From 1 January 2015, Great Noligwa and Moab Khotsong were combined under Moab Khotsong as one cash-generating unit. |
(2) | In 2013, Savuka and TauTona were combined under TauTona as one cash-generating unit. |
(3) | Includes MWS for purposes of this report. It is operated and managed as a separate cash-generating unit. |
(4) | Gold produced by treating material from multiple |
(5) | The grades from Obuasi and AGA Mineração represent those for their underground operations. |
(6) | Mine in closure mode from 1 January 2015. |
(7) | AngloGold |
(8) | Commenced production in the |
(9) | AngloGold Ashanti sold Cripple Creek & Victor effective 3 August 2015. Cripple Creek & Victor is reported as a discontinued operation. |
Rounding of figures may result in computational discrepancies.
SOUTH AFRICA
AngloGold Ashanti’s South African operations comprise four deep-level mines and surface production facilities. They are:
The West Wits operations – Mponeng and TauTona;
The Vaal River operations – Kopanang and Moab Khotsong; and
Surface operations.
Gold production (000oz) | Average number of employees | |||||||
Operations |
| |||||||
South Africa | ||||||||
1. Vaal River | ||||||||
Kopanang | 117 | 4,052 | ||||||
Moab Khotsong(1) | 254 | 6,469 | ||||||
2. West Wits | ||||||||
Mponeng | 219 | 6,249 | ||||||
TauTona | 209 | 4,656 | ||||||
3. Surface operations (2) | 193 | 2,929 | ||||||
(1) | From 1 January 2015, Moab Khotsong and Great Noligwa were operated and managed as one operation and accordingly combined under Moab Khotsong. |
(2) | Includes MWS for purposes of this report. It is |
South Africa Key Statistics
Unit | 2015 | 2014 | 2013 | |||||
Operation | ||||||||
Tonnes treated/milled | Mt | 36.8 | 38.4 | 39.2 | ||||
Pay limit(1) | oz/t | 0.39 | 0.39 | 0.36 | ||||
g/t | 14.38 | 14.35 | 13.37 | |||||
Recovered grade(1) | oz/t | 0.225 | 0.239 | 0.204 | ||||
g/t | 7.70 | 8.19 | 7.00 | |||||
Gold production | 000oz | 1,004 | 1,223 | 1,302 | ||||
Total cash costs(2) | $/oz | 881 | 849 | 850 | ||||
Total production costs(2) | $/oz | 1,091 | 1,087 | 1,070 | ||||
All-in sustaining costs(2)(3) | $/oz | 1,088 | 1,064 | 1,120 | ||||
Capital expenditure | $m | 206 | 264 | 451 | ||||
Safety | ||||||||
Number of fatalities | 9 | 4 | 6 | |||||
AIFR | Per million hours worked | 10.81 | 11.85 | 12.63 | ||||
People | ||||||||
Average no of employees: Total | 28,325 | 29,511 | 32,406 | |||||
Permanent employees | 25,274 | 26,056 | 28,526 | |||||
Contractors | 3,051 | 3,455 | 3,880 |
(1) | Refers to underground operations only. |
(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 2015
Production and costs
Production for the year ended 31 December 2015 was 219,000oz, or 18 percent, lower than for the year ended 31 December 2014, predominantly due to safety related stoppages, with approximately 113,000oz lost as a result of these disruptions. Mponeng and Moab Khotsong were most affected. In addition to operational effects of the safety related stoppages, Mponeng also experienced delays to phase 1 of its below 120 level life extension project. The result of this is that mining flexibility was curtailed as production was undertaken on only three levels.
A derisking plan was implemented to address seismicity challenges and a decision was taken during the year to withdraw from some of those areas to improve safety, further reducing available mining areas and leading to lower mining intensity and productivity.
In addition to – and in some cases as a result of – the safety stoppages, production at the Vaal River operations was negatively affected by a deterioration in the mining mix as the anticipated move into higher-grade areas was delayed. Increased dilution resulted in a decline in head grades. Safety stoppages and lack of available face length and mining flexibility resulting from the premature halt to mining of low-grade areas affected production at Kopanang. More concentrated efforts were put in place to prioritise safe practices and plans are underway to increase available face length and Ore Reserve development.
At Surface Operations, a reduction in grades in the marginal ore dumps material impacted negatively on production.
At Mine Waste Solutions, the flotation and uranium plants were temporarily stopped during the latter part of the year as these units did not operate at expected efficiencies.
All-in sustaining costs of $1,088/oz for the year ended 31 December 2015 were two percent higher compared to the previous year. The negative cost impact was marginal, due mainly to the weaker rand relative to the US dollar. The performance was significantly adversely affected by the lower volumes mined as well as ongoing inflationary pressures in South Africa, which is fully exposed to above-inflation administered price increases for critical inputs like power and water, while gaining little benefit from a lower fuel price.
Capital expenditure
Capital expenditure declined by 22 percent, in line with the groupwide cost optimisation and rationalisation programme and cash flow constraints.
Safety
Regrettably, our safety performance was dominated by a significant regression in mine fatalities. Tragically, nine of our colleagues lost their lives in separate fatal accidents, compared with four in 2014. Five of the fatalities resulted from fall of ground incidents, while the other fatalities were due to an underground vehicle incident, carbon monoxide gas inhalation, a scraper winch incident and an electrical incident.
People
In 2015 employee numbers were slightly down year-on-year as a result of the restructuring undertaken in connection with the consolidation of certain mines in the region. However, there was a marginal increase in December relating to the hiring of employees with specific skills and the reinstatement of 456 employees who had previously been dismissed at Moab Khotsong. Wage negotiations took place from June through to October 2015. All unions participated in the central collective bargaining process with the Chamber of Mines representing the gold producers and a three year wage settlement was executed.
Ore Reserve
As at 31 December 2015, the total Ore Reserve for the South Africa region was 26.14Moz (2014: 27.45Moz). This is equivalent to around 51 percent of the group’s total attributable Ore Reserve.
Growth and improvement
Mponeng Phase 1 below 120 level was delayed, with key infrastructure to service Ore Reserve development lagging behind schedule by more than a year at the end of 2015. To address critical issues, a detailed system capability study was undertaken to determine ore handling and material supply capacity. A high-level revised schedule was completed, based on the system capability. The study prioritises capital infrastructure in order to support Ore Reserve development. The preliminary impact of this schedule indicates an approximate 15-18-month delay in the 120 level gold delivery profile.
Given the constraints experienced in phase 1, the approach to phase 2 is being reviewed. Co-extraction of the VCR from the same shaft deepening infrastructure platform is being considered rather than the decline development employed in phase 1. Phase 2 will consequently be delayed by as long as two years. Work on 126 level is expected to be completed on schedule. Consequently, the company does not expect there to be any gap in gold production in spite of other delays.
At Moab Khotsong, project Zaaiplaats remained on hold. Another study has been undertaken to determine the best technical and economically viable options for the project and is expected to recommend alternative investment opportunities. The purpose of this study will be to formulate mine designs to economically extract Zaaiplaats and contiguous blocks from Moab Khotsong shaft systems and to claw back value through potential schedule, cost and mining-volume gains by applying modern shaft designs and other associated technologies.
CONTINENTAL AFRICA
AngloGold Ashanti has seven mines in the region, six of which are producing mines and processing operations, and five of which AngloGold Ashanti manages. One mine is on limited operations. Closure is underway at Yatela.
Attributable gold production (000oz) | Average number of employees | |||||||
Operations | ||||||||
| ||||||||
1. Democratic Republic of the Congo | ||||||||
Kibali 45% | 289 | 2,061 | ||||||
2. Ghana | ||||||||
Iduapriem | 193 | 1,565 | ||||||
Obuasi | 53 | 856 | ||||||
3. Guinea | ||||||||
Siguiri 85% | 255 | 3,445 | ||||||
4. Mali | ||||||||
Morila 40% | 49 | 389 | ||||||
Sadiola 41% | 69 | 585 | ||||||
5. Tanzania | ||||||||
Geita | 527 | 3,041 |
Continental Africa - Key Statistics
Unit | 2015 | 2014 | 2013 | |||||
Operation | ||||||||
Tonnes treated/milled | Mt | 27.2 | 29.9 | 26.9 | ||||
Pay limit | oz/t | 0.036 | 0.039 | 0.049 | ||||
g/t | 1.233 | 1.345 | 1.669 | |||||
Recovered grade | oz/t | 0.053 | 0.054 | 0.054 | ||||
g/t | 1.64 | 1.66 | 1.69 | |||||
Gold production (attributable) | 000oz | 1,435 | 1,597 | 1,460 | ||||
Total cash costs(1) | $/oz | 678 | 783 | 869 | ||||
Total production costs(1) | $/oz | 900 | 977 | 1,086 | ||||
All-in sustaining costs(1)(2) | $/oz | 815 | 968 | 1,202 | ||||
Capital expenditure | $m | 315 | 454 | 839 | ||||
Safety | ||||||||
Number of fatalities | 1 | 0 | 2 | |||||
AIFR | Per million hours worked | 0.50 | 1.56 | 1.97 | ||||
People | ||||||||
Average no of employees: Total | 11,942 | 16,070 | 16,625 | |||||
Permanent employees | 5,061 | 8,739 | 10,778 | |||||
Contractors | 6,881 | 7,331 | 5,847 |
(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. |
Production and costs
Despite a decline in overall production for the region in 2015, Geita, Kibali and Iduapriem all recorded higher levels of production. Underground production at Kibali was successfully ramped up and Geita continued as the star performer, helping to make up some of the production lost due to Obuasi being on limited operations following the suspension of underground mining operations at the end of 2014.
Increased production at Geita was driven by an increase in recovered grade from ore sourced from Nyankanga Cut 7. Mining volumes were maintained despite abnormally heavy rainfall and a decline in plant throughput in the last quarter of the year due to planned maintenance.
At Kibali, the ramp up of plant operations to design capacity and increased plant availability, resulted in a 23 percent increase in tonnage throughput, and a 22 percent increase in gold produced. Production at Iduapriem improved given the increase in the recovered grade and the ramp up from limited operations the previous year.
Production at Morila was boosted by a 17 percent increase in recovered grade as higher grade tonnes were sourced from the satellite pit that was commissioned in the latter part of 2014. Reduced operational flexibility and a decline in the availability of higher-grade oxide ore contributed to reduced production from Sadiola.
Siguiri’s production was negatively impacted by a planned fall in recovered grade, driven by depletion of the higher grade ore in mined areas owing to delayed access to the Soloni pit. This was compounded by a decrease in tonnage throughput following unplanned maintenance that occurred during the year. Production however, started improving in the last quarter of the year as delays in accessing mining areas were resolved and the mine began processing ore from the Soloni pit.
Costs improved significantly, declining by 13 percent, in the case of total cash costs, and 16 percent, in the case of all-in sustaining costs. These improvements were the result of the cumulative benefits of the operating and cost management initiatives that have been implemented since 2013. Costs specifically benefitted from increased production and improved efficiencies at the larger operations. The Continental Africa operations were also able to take advantage of lower oil prices, which particularly benefitted the open pit operations which run large mining fleets and/ or generate all or part of their own power from diesel or heavy fuel oil.
In addition, the region was able to capitalise to some extent on exposure to weaker local currencies by in-country sourcing of goods, services and labour and by targeting operational efficiencies.
Capital expenditure
As anticipated, at Kibali, capital expenditure decreased by $55 million as construction of the plant was largely completed during 2014. Capital expenditure for 2015 decreased by $59 million at Obuasi, which was placed on limited mining operations.
Safety
Tragically, there was one fatality in the region, when an employee drowned at Obuasi. The overall safety performance in the region otherwise continued to improve.
People
The average number of people employed in the region declined from 16,070 in 2014 to 11,942 in 2015, largely as a result of the retrenchment process undertaken at Obuasi during 2014.
Ore Reserve
The total attributable Continental Africa Region Ore Reserve was 19.26 million ounces (2014: 18.93 million ounces). This amounts to 37 percent of the group’s Ore Reserve.
Growth and improvement
An extensive pipeline of project opportunities is planned, targeted mainly at energy cost savings and mine-life extensions. These opportunities include (i) progressing to underground mining at Geita’s Star & Comet ore body and (ii) accessing additional Mineral Resources at Iduapriem (to which end exploration work is to be conducted within the concession and the mine plan is to be revised) and at Siguiri, using heap leaching to supplement production.
Although the portion of hard sulphide ore tonnes milled at Geita remained high during the year, the plant nevertheless managed to process 5.2Mt as a result of the better quality of feed and improved fragmentation control.
At Kibali, sinking of the vertical shaft reached shaft bottom at a depth of 751.2m and equipping of the crusher and production levels was completed. Construction of Ambarau, the second hydropower station, was delayed following the failure of the temporary berm wall owing to high river flows. Repair work continues and the first phase is now expected to be completed in the second quarter of 2016, with full completion and commissioning of the power station scheduled for the latter part of the year. Once operational, Ambarau is expected to deliver 11MW. A third hydropower station, Azambi, also expected to generate 11MW, is planned to come on line in 2018.
At Siguiri, a range of projects is targeted at reducing energy costs, extending the mine life and implementing heap leaching to supplement production.
AUSTRALASIA
Attributable gold production (000oz) | Average number of employees | |||||||
Operations | ||||||||
Australia | ||||||||
1. Sunrise Dam | 216 | 400 | ||||||
2. Tropicana 70% | 344 | 436 |
AngloGold Ashanti’s Australasian assets comprise the wholly owned Sunrise Dam and the 70 percent-owned Tropicana Gold mine, Australia’s newest gold mine. Tropicana completed its second full year of production in 2015.
Australasia - Key Statistics
Unit | 2015 | 2014 | 2013 | |||||||||||||
Operation | ||||||||||||||||
Tonnes treated/milled | Mt | 8.2 | 7.8 | 4.3 | ||||||||||||
Pay limit | oz/t | 0.06 | 0.07 | 0.09 | ||||||||||||
g/t | 1.85 | 2.29 | 2.82 | |||||||||||||
Recovered grade | oz/t | 0.068 | 0.078 | 0.081 | ||||||||||||
g/t | 2.12 | 2.43 | 2.51 | |||||||||||||
Gold production (attributable) | 000oz | 560 | 620 | 342 | ||||||||||||
Total cash costs(1) | $/oz | 702 | 804 | 1,047 | ||||||||||||
Total production costs(1) | $/oz | 919 | 1,070 | 1,333 | ||||||||||||
All-in sustaining costs(1)(2) | $/oz | 875 | 986 | 1,376 | ||||||||||||
Capital expenditure | $m | 78 | 91 | 285 | ||||||||||||
Safety | ||||||||||||||||
Number of fatalities | 0 | 0 | 0 | |||||||||||||
AIFR | Per million hours worked | 8.56 | 10.73 | 7.91 | ||||||||||||
People | ||||||||||||||||
Average no of employees: Total | 836 | 832 | 925 | |||||||||||||
Permanent employees | 195 | 194 | 281 | |||||||||||||
Contractors | 641 | 638 | 644 |
(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. |
Production and costs
Total gold production for the Australasian region of 560,000oz in 2015 was 60,000oz, or 10 percent, lower than the previous year. This decline was largely due to an 18 percent decrease in production from Sunrise Dam.
Production at Sunrise Dam in 2015 was 46,000oz lower than in 2014, due primarily to lower mined grades. The lower grade of this ore was largely due to the nature and location of the zones mined, which were on the periphery of the main ore bodies and generally more variable than those mined in 2014.
Tropicana produced 491,000oz (of which 344,000oz constituted AngloGold Ashanti’s share), reaching its 1 millionth ounce on schedule, just over two years since pouring first gold. Production was 4 percent lower than in 2014 due to the decrease in the average head grade to 2.57 g/t, which is consistent with the grade streaming strategy that underpins the life of mine plan. The lower grades in 2015 were partially offset by an increase in throughput in the processing plant to 6.2Mt (2014: 5.7Mt).
Total cash costs for the year decreased by 13 percent compared to 2014, largely as a result of favourable currency movements. Costs and production remained within guidance and received the benefit of a weaker Australian dollar relative to the US dollar and also lower oil prices.
Capital expenditure
Capital expenditure in total decreased by $13m compared to 2014, largely as a result of favourable currency movements. Stay in business Ore Reserve development, decreased by $6m compared to 2014 while the project capital reduced by $7m, following completion of the Tropicana development.
Safety
Overall safety performance improved at both mines in the region, but particularly at Tropicana, which recorded its best performance to date. There were again no fatalities.
People
A total of 836 people were employed on average by the Australia region – 195 full time employees and 641 contractors.
Ore Reserve
At the end of 2015, the total attributable Ore Reserve for the Australasia Region was 3.09 million ounces (2014: 3.53 million ounces). This makes up around six percent of the group’s Ore Reserve.
Growth and improvement
At Sunrise Dam, work is being carried out to assess the viability of an underground crusher and conveyor system for haulage via a new decline at the northern end of the operation. The conveyor decline would also provide exploration drilling access to the northern parts of the ore body that have been difficult and costly to drill from surface due to the surface waste dumps and salt lake.
At Tropicana, studies are being carried out to assess an alternative, low-cost approach to mining the down-dip extensions of the Havana and Tropicana pits, along with extensions to the north and south.
The mining study is looking at the application of mine design techniques that are used more commonly in mining other commodities such as coal. The work is based on a starter pit followed by strip mining of a large cutback, then backfilling the mined out areas. This approach, which is aimed at extending the mine life, would reduce stripping costs substantially with in-pit dumping of waste and shorter haulage distances.
A substantive Mineral Resource definition programme is being carried out as part of this study, supported by data generated by 3D seismic surveys carried out in 2014 and 2015. This data has enabled the mineralised zones down-dip of the Tropicana ore bodies to be imaged, generating a structural model to help cost-effectively target deep drill holes. The first drill testing of these targets in 2015 returned encouraging results and confirmed the structural interpretation. It is expected that approximately 130,000m of drilling will be carried out at Tropicana in 2016.
Processing plant optimisation work is also underway at Tropicana to debottleneck the processing plant, maximise usage of the larger pieces of equipment, and increase throughput from annual nameplate capacity of 5.8Mt to between 7.0Mt and 7.5Mt through staged increases. The increase in throughput is expected to offset the production decline that will occur as grades decrease over time, as per the mine plan. Upgrade work will be conducted during 2016 with the benefits expected to be realised from 2017 onwards.
THE AMERICAS
AngloGold Ashanti has three mining operations – both open pit and deep level mining – in the Americas region. In addition, there is an active greenfields exploration programme underway in Colombia.
| ||||||||
Attributable gold production (000oz) | Average number of employees | |||||||
| ||||||||
Operations | ||||||||
1. Argentina | ||||||||
Cerro Vanguardia 92.5% | 278 | 1,687 | ||||||
| ||||||||
2. Brazil | ||||||||
AGA Mineração | 421 | 4,546 | ||||||
Serra Grande | 132 | 1,446 | ||||||
| ||||||||
3. Colombia – exploration programme | ||||||||
|
Americas - Key Statistics (1)
Unit | 2015 | 2014(5) | 2013(5) | |||||||||||||||||||
Operation | ||||||||||||||||||||||
Tonnes treated/milled | Mt | 7 | 6.8 | 5.9 | ||||||||||||||||||
Pay limit | oz/t | 0.098 | 0.092 | 0.096 | ||||||||||||||||||
g/t | 3.351 | 3.152 | 3.294 | |||||||||||||||||||
Recovered grade | oz/t | 0.108 | 0.104 | 0.120 | ||||||||||||||||||
g/t | 3.71 | 3.58 | 4.13 | |||||||||||||||||||
Gold production (Attributable) | 000oz | 831 | 785 | 770 | ||||||||||||||||||
Silver (attributable) | Moz | 4.4 | 3.1 | 3.1 | ||||||||||||||||||
Total cash costs(2) | $/oz | 576 | 676 | 653 | ||||||||||||||||||
Total production costs(2) | $/oz | 845 | 918 | 892 | ||||||||||||||||||
All-in sustaining costs(2)(3) | $/oz | 792 | 974 | 1,011 | ||||||||||||||||||
Capital expenditure(4) | $m | 196 | 225 | 253 | ||||||||||||||||||
Safety | ||||||||||||||||||||||
Number of fatalities | 1 | 2 | 0 | |||||||||||||||||||
AIFR | Per million hours worked | 5.61 | 3.81 | 4.74 | ||||||||||||||||||
| ||||||||||||||||||||||
People | ||||||||||||||||||||||
Average no of employees: Total | 7,679 | 8,588 | 8,374 | |||||||||||||||||||
Permanent employees | 5,492 | 5,944 | 5,979 | |||||||||||||||||||
Contractors | 2,187 | 2,644 | 2,395 | |||||||||||||||||||
|
(1) | Key statistics are for the continuing operations in the
|
(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. |
(4) | 100
|
Production and costs
Production in the Americas increased by 46,000oz, or six percent, in 2015 compared to the previous year (excluding production from CC&V) due principally to a 13 percent increase in production at Cerro Vanguardia and a four percent increase in production at AGA Mineração. These increases were partially offset by lower output from Serra Grande. The region also produced 4.4Moz of by-product silver.
Cerro Vanguardia continued to deliver a strong performance with record production driven by a planned improvement in grade with a greater proportion of mill feed coming from underground and better recoveries. Improved production at AGA Mineração was a result of higher tonnage and better feed grades from both the Córrego do Sítio and Cuiabá complexes.
Teams in the region continued to focus on limiting cost increases in increasingly challenging inflationary environments in both Argentina and Brazil, by prioritising a range of operational improvements.
Cost control efforts were aided by higher gold and silver production levels, the removal of the higher cost CC&V production and local currency depreciation, given that the Brazilian real was on average 42 percent weaker in 2015 than in 2014 and the Argentinian peso was on average 14 percent weaker in 2015 than in 2014 against the dollar. Efficiency initiatives covered a range of areas, including labour and contractor costs, energy, consumables and stay-in-business capital, as well as a drive to increase production.
Cerro Vanguardia continued to implement phase II of the Project 500 efficiency initiative with a focus on optimising mill throughput, improving silver recovery, delivering more underground ore to the mill and improving the overall effectiveness of key administration areas such as procurement and warehousing.
In Brazil, the cost management programme that started in 2013 continued into its third year, yielding a range of productivity improvements including the optimisation of operational processes, reductions in the price of power and materials and decreases in administrative expenses. At Córrego do Sítio, higher grades contributed an additional 20,000oz from the Carvoaria ore body and increased development rates further aided cost improvements.
Capital expenditure
The region’s capital expenditure of $196 million (including Colombia and excluding CC&V), was 13 percent lower than the previous year. While sharp currency devaluations had a negative effect on the purchase of imported items, they had a positive impact on expenditure relating to Ore Reserve development and locally produced items. Most of the capital expenditure was on ore development and deferred stripping ($101 million) and general stay-in-business or maintenance capital ($89 million).
Safety
Tragically, one fatality was reported in the Americas in 2015, when an employee died in a fall-of-ground incident at Lamego.
People
A total of 7,679 people were employed on average by the Americas region in 2015, including 5,492 full-time employees and 2,187 contractors.
Ore Reserve
At the end of 2015, the total attributable Ore Reserve for the Americas Region, was 3.21 million ounces (2014: 7.56 million ounces). This makes up around six percent of the group’s Ore Reserve.
Growth and improvement
At Cerro Vanguardia, the expansion project to increase underground production over the next five years is underway and remains on schedule. During 2015 an initiative to accelerate open pit and underground operations using an external contractor was approved in order to improve the production profile. Additional cost reductions are planned by further increasing plant throughput and recovery as well as optimising shift configuration and backfilling minedout pits with waste material to reduce haul distances. Additionally, mineral rights were acquired adjacent to Cerro Vanguardia, where exploration will be undertaken
The focus at Cuiabá remained on ventilation and transport projects to support mining at increased depth, as well as the overall drive to maintain stable production levels in coming years. Córrego do Sítio continued initiatives to improve production in the medium term, including development of the underground Mina I ore body, which is expected to be the main contributor in 2016. Drilling programmes aimed at opening a new pit at Mina III and new underground sites at Mina II and São Bento Deep are underway.
At Serra Grande, underground diamond directional drilling proved the continuity of one of the Mina III high-grade gold-bearing quartz veins, from 900m to 1,150m at depth. Importantly, this vein appears to increase in both thickness and length along the strike. Palmeiras Sul targets were drilled in the mine’s tenements confirming the addition of a high-grade Mineral Resource. Surface and underground drilling continued to define the Inga ore body, expected to go into production in 2016. New open-pit potential was also confirmed, creating a pipeline of small pits to continue producing.
Colombia remains a key area of focus and its exploration programme continues to yield encouraging results. The Nuevo Chaquiro target is a porphyry-related, copper-gold mineralised stockwork system, located within the Western Cordillera, where long intersections of significant copper mineralisation with gold credits were intersected during 2013 and 2014. Diamond drilling was undertaken in 2015 to delineate the limits of the higher-grade core and increase confidence in the highest-grade portion of the ore body to support a small, phase I concept design. Advanced studies to complete the concept study phase are planned for 2016.
Gramalote exploration focused on regional exploration drilling as well as drilling to improve definition of the low-grade saprolite (oxide ore) Mineral Resource. Some peripheral exploration drilling was also done to define a small, underground Mineral Resource option for the artisanal and small-scale mining co-existence model. The Mineral Resource model was updated for the three Gramalote deposits: Gramalote Central, Monjas West and Trinidad, incorporating the latest drill-hole information, reviewed estimation parameters and changes in the geo-statistical methodology (localised uniform conditioning).
At the La Colosa project, drilling focused on data collection at infrastructure locations. No Mineral Resource drilling was conducted. In early 2015, geotechnical and hydrogeological drilling was initiated at the proposed tailings management facility and the waste rock facility. Mine planning continues, with the validation of current base-case opportunities and a small mine concept and several alternatives under evaluation. Metallurgical test work completed in 2015 was conducted to validate process opportunities, including an increase in recovery and plant throughput. A trade-off study is in progress and is expected to be finalised in early 2016.
EXPLORATION REVIEW
Our exploration is focused on creating value by providing long-term optionality and improving the portfolio quality. The objectives are met by:
Greenfields exploration, which aims to discover large, high-value Mineral Resources that will eventually lead to the development of new gold mines. Our greenfields exploration team was recognised by a leading industry research group, in 2015 as the industry’s most successful in Mineral Resource discovery. The team has a proven track record that includes the discovery of world-class ore bodies at La Colosa, Gramalote, Tropicana and Nuevo Chaquiro. These discoveries are attributed to our committed and professional team of geoscientists working on a portfolio of highly prospective and rigorously prioritised greenfields ground holdings.
Brownfields exploration, which focuses on delivering value through incremental additions to our Ore Reserve in existing mines as well as new discoveries in defined areas around existing operations. Brownfields exploration actively drives the creation of value by growing our Mineral Resource and Ore Reserve, our major assets. Our brownfields exploration programme is based on innovative geological modelling and mine planning and continual optimisation of our asset portfolio.
Greenfields exploration
Our greenfields exploration programme has over 12,000km2 of highly-prospective ground in two countries – Australia and Colombia – and also maintains small ground positions in Argentina and Brazil. Expenditure was $22.4 million in 2015, including over 50,000m of diamond, reverse circulation and aircore drilling. This programme also included focused generative activities in countries with operational synergies.
In Western Australia, exploration activities at the Tropicana project, in joint venture with Independence Group NL (AngloGold Ashanti: 70 percent), progressed well through the year with more than 33,000m of aircore drilling, 8,500m of reverse circulation drilling and 2,200m of diamond drilling completed. Excellent initial results were returned from the Madras prospect approximately 25km south of Tropicana. Significant drill intersections in shallow oxide material included 15m @ 5.08g/t Au from 45m, 25m @ 2.47g/t Au from 35m, and 17m @ 4.22g/t Au from 64m. To date, the Madras mineralisation has been found to be restricted in size and only well developed in the weathered (saprolite) zone.
Airborne geophysical surveys were completed over several new projects wholly owned by AngloGold Ashanti including Strawbridge, Pindabunna, and Neds Creek in Western Australia. Target generation and first phase field work is continuing on these projects. In New South Wales at the Mullion Project (wholly-owned), 2,500m of diamond drilling were completed to follow up bedrock targets identified from geophysical surveys conducted in 2014. Although significant favourable alteration was intersected, only low tenor results were returned.
In Colombia, the Quebradona project was transferred to the projects team early in the year. Greenfields exploration then focused on the Guintar project west of Medellin where mapping outlined an extensive alteration system in sediments overlying a dioritic porphyry intrusion with associated coppergold and epithermal gold occurrences. An eight-hole drilling programme commenced in the third quarter, with 3,000m completed by year end. Drilling intersected hornfelsed sedimentary rocks and breccia zones with significant pyrrhotite and pyrite in fractures, stringers and fine stockworks returning anomalous geochemical values.
In Brazil, exploration was undertaken early in the year on the Graben project, in joint venture with Graben Mineração (AngloGold Ashanti: 80 percent). A programme of 1,800m of diamond drilling was completed. Results did not meet expectations and the joint venture was terminated. Project generation work in other areas in Brazil progressed for the rest of the year.
Brownfields exploration
Brownfields exploration was carried out in 10 countries, in and around AngloGold Ashanti operations. A total of 469,818m of diamond and reverse circulation drilling was completed during the year.
South Africa: Four surface holes were drilled during the year – three are ongoing at Mponeng’s Western Ultra Deep Levels (WUDLs) and one was completed at the Vaal River operations – achieving a total drilled depth of 4,966m.
Argentina: At Cerro Vanguardia, drilling programmes for Mineral Resource expansion and exploration continued during the year. The focus was on delineating vein extensions along strike and at depth. Mapping, trenching and channel sampling continued as part of the reconnaissance programme to identify new drilling targets.
Brazil: In the Iron Quadrangle, the underground drilling programmes for Mineral Resource development continued at both the Cuiabá and Lamego mines. At Cuiabá, additional drilling was directed at satellite mineralisation that may be accessible from existing infrastructure. Surface drilling programmes at Córrego do Sítio continued to infill and expand the oxide Mineral Resource while the underground programme added extensions to several ore bodies, including the Inga ore body.
Colombia: Exploration in the Gramalote area continued, with programmes in and around the Gramalote Central deposit. Limited drilling programmes were also conducted within the joint venture area.
At La Colosa, the emphasis on other project-related drilling continued, supporting geotechnical, hydrological and site infrastructure studies.
The Quebradona project development drilling programme continued during the year. The programme focus was directed at infill drilling in the higher grade, upper part of the deposit.
Tanzania: Drilling focused on Mineral Resource delineation, testing both strike and dip extent of current deposits as well as confirming underground potential (Matandani North, Geita Hill East and Star & Comet). Mineral Resource conversion infill-drilling programmes took place at Nyankanga Cut 7, Nyankanga Cut 8 and Star & Comet Cut 3. Pre-resource drilling programmes were undertaken to test targets at Star & Comet Deeps, Matandani North and Geita Hill East Deeps. Vertical seismic profiling and metallurgical test work drilling was conducted at Nyankanga, Geita Hill and Matandani respectively. In all, 50 holes (15,273m) were completed. A 2D ground seismic survey was conducted along two sectional lines across Nyankanga and Geita Hill to confirm the suitability of the geology and mineralisation in these deposits for 3D seismic modelling.
Guinea: A total of 46,007m was drilled at Siguiri during the year across a range of programmes including fresh rock projects at several pits and oxide reconnaissance drilling. In all, reverse circulation drilling totalled 35,080m plus limited (1,077m) aircore drilling, with the remainder being diamond drilling or RCDD drilling. The reverse circulation drilling included 4,416m of advanced grade control drilling in a test block within the Kami pit.
Ghana: No exploration was conducted at Obuasi. Exploration at Iduapriem during the first half of the year focused on Mineral Resource infill drilling at Block 5 to upgrade the Inferred Mineral Resource to Indicated. Reconnaissance exploration (soil geochemistry, mapping and limited trenching) was also completed over the Bankyem, Mile 5 and Ajopa northwest targets. In the latter half of the year, drilling was initiated at Bankyem, Block 4S and Mile 5. A total of 6,924m drilling was completed in 2015.
Democratic Republic of the Congo: Total diamond drilling for near-mine exploration at Kibali during 2015 totalled 15,883m, with an additional 1,760m drilled on regional projects. The exploration aims to fulfil three main objectives: Mineral Resource – Ore Reserve replacement, the discovery of potential oxide displacement ounces, and identification and development of new targets.
Mali: A total of 13,110m of exploration reverse circulation drilling focused on the Sadiola North area and Tabakoto in 2015.
Australia: Exploration activities in 2015 were primarily on the Mineral Resource expansion programme at Tropicana with a drilling campaign comprising more than 23,000m of aircore, 27,000m of reverse circulation and 38,000m of diamond drilling completed. Drilling was focused on testing for extensions to mineralisation in the Tropicana, Swizzler, Havana and Havana South areas. An additional block of 3D seismic data was acquired at the southern end of the mine area to aid further exploration.
At Sunrise Dam, underground Mineral Resource development drilling continued throughout the year. Exploration diamond drilling focused primarily on extending the Inferred Mineral Resource as per the mine plan and underground grade control reverse circulation drilling continued to focus on converting the Indicated Mineral Resource into a mineable grade control block model for use in stope development designs. A start was made on the development of key diamond drilling platforms, which will be used over the life of mine to drill test exploration targets along the strike length of the deposit. A lake aircore drilling programme of just over 9,000m of drilling was completed at the Kraken Project, situated over the western extents of the Lake Carey playa salt lake system, approximately 10km east of Sunrise Dam. Several target areas were drill tested for gold mineralisation. All targets are beneath lake cover sequences.
TECHNOLOGY AND INNOVATION
Towards a new mining method for ultra-deep South African mines
The AngloGold Ashanti Technology Innovation Consortium made headway during the year, specifically pertaining to the development of key technologies and the methodology employed in achieving the project’s core objectives: to “safely mine all the gold, only the gold, all the time” from our deep-level underground mines, particularly those in the South Africa region. The latest generation reef-boring machine, the MK IV was successfully deployed at TauTona’s lower CLR shaft pillar. During 2015, reef-boring cycle times improved from 159 hours per hole to 82 hours per hole, which compares favourably to the 72 hours per hole targeted.
The ultra-high-strength backfill product has also been successfully developed to the stage where it can be pumped over the required distance of 1,000m, a pre-requisite for a full production mining cycle. This demonstrates progress on the work done that seeks to establish the basis for a safe, automated, deep-level underground mining method at AngloGold Ashanti.
Reef boring
Test site
Since deployment and commissioning of the MKII machine in 2013, a total of 56 holes has been drilled to date. Having completed drilling of the available block of ground, this machine was decommissioned in the third quarter of 2015. The MKIV reef-boring machine was successfully installed and commissioned in September 2015 at the extended test site at TauTona, and had drilled seven holes by year-end. Due to challenges experienced in the collector bin, the machine was unable to drill. These constraints affected the operation of the collector bin, causing a shortage of material cars to transport chippings away from the hole. The collector bin has since been redesigned, modified and returned underground for further trials, which are expected to begin in the first half of 2016. Additional material cars have been sourced and delivered.
Prototype site – medium-range machines
Three machines were commissioned at the prototype sites and a total of 81 holes were drilled in 2015.
Drilling at Moab Khotsong’s prototype site, where five holes were drilled within that specific block of ground, was suspended owing to the machine’s incompatibility with that reef – the geological complexity of the block of ground where drilling took place hampered progress with only a low percentage extraction rate achieved. The machine was relocated to TauTona for drilling in the VCR plane. Geological drilling continued to determine the best way forward for either mechanical or conventional extraction at the sites identified at Moab Khotsong.
Prototype site – Small-range machines
The geotechnical complexity of the block of ground hampered drilling and only a low percentage extraction was achieved due to the faulty reef plane. Once it was established that the stage gate of 80 percent extraction could not be achieved, drilling was discontinued.
Mechanical development
This development opens and equips the tunnels in which the reef-boring machines drill. However, the methodology for the opening up of mining grids for continuous reef boring remained a significant technical challenge in 2015.
Ultra-high-strength backfill
Surface trials to reach a pumping distance of up to 1,000m were successful at a product temperature ranging between 30°C and 35°C. This temperature range simulated the underground product temperature range. A tailings drying plant was successfully constructed and commissioned on surface at TauTona and a VCR plant was successfully constructed on 68 level. Commissioning has begun.
The Savuka plant was successfully trialled by RULA, the company assisting with design and manufacturing.
Geological drilling
Despite delays experienced during the year, drilling conducted in the last quarter of the year aimed at resolving the accuracy and deflection constraints by testing different stabiliser configurations. A total of five wet holes were drilled and plotted and final analysis is expected to be reported on in the first half of 2016.
The new fit-for-purpose Bohrmeister drill rig is due to be delivered and commissioned for drilling in the first half of 2016.
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 and Tanzania and joint venture operations in the DRC and Mali;
Australasia – operations in Australia; and
Americas – operations in Argentina and Brazil.
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 management team, chaired by the Chief Executive Officer. See “Item 6: Directors, Senior Management and Employees”.
Support is provided to the executive management team in managing AngloGold Ashanti’s corporate activities at both the central and local levels.
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. |
|
For more information about AngloGold Ashanti’s mines, including as to the company’s mining rights and licences refer “Item 4B: Business Overview—The regulatory environment enabling AngloGold Ashanti to mine”.
AngloGold Ashanti’s operating mines are all accessible by road.
SOUTH AFRICA - GEOLOGY
The Witwatersrand Basin comprises a six-kilometre thick sequence of inter-bedded argillaceous and arenaceous sediments that extend laterally for some 300 kilometres north-east/south-west and 100 kilometres 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 kilometres 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 metres thick, which 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. The 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.
Operations in the South Africa region are powered by electricity from Eskom Holdings Limited which supplies 95 percent of the electricity used in South Africa.
•Vaal River operations
Description
The Vaal River operations consist of Kopanang, Moab Khotsong as well as surface operations. The process of integrating Great Noligwa into Moab Khotsong began in 2014 and, from an accounting perspective, these operations were treated as one cash-generating unit starting on 1 January 2015. This integration process will continue in 2016.
Geology
In order of importance, the reefs mined at the Vaal River operations are the Vaal Reef and the “C” Reef:
The Vaal Reef contains approximately 95-99 percent of the Ore Reserve tonnage with mining grades between 5 – 10 g/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 “C” Reef is a thin, small pebble conglomerate with a carbon-rich basal contact, located approximately 270 metres above the Vaal Reef. It has less than one percent of the estimated Ore 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
| ||||||||||||||||
West Gold Plant | Noligwa Gold Plant | Mispah Gold Plant | Kopanang Gold Plant | |||||||||||||
| ||||||||||||||||
Gold plants | ||||||||||||||||
Capacity (000 tonnes/month) | 180 | 260 | 140 | 420 | ||||||||||||
Uranium plants | ||||||||||||||||
Capacity (000 tonnes/month) | — | 260 | — | — | ||||||||||||
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Vaal River – Kopanang
Description
Kopanang is an underground operation located in the Free State province, roughly 170 kilometres southwest of Johannesburg and approximately 10 kilometres southeast of the town of Orkney on a lease area of 35km2. The operation, which started in 1984, is west of neighbour Great Noligwa (now part of Moab Khotsong) and bound to the south by the Jersey Fault. Gold is the primary output, with uranium oxide as a by-product from a single underground shaft system to a depth of 2,600 metres.
Kopanang almost exclusively exploits the Vaal Reef, although minor amounts of gold are also extracted from the secondary Crystalkop Reef. Given the geologically complex orebody, scattered mining is used.
Vaal River – Moab Khotsong
Description
Moab Khotsong is an underground mine that started operations in 2003 and is AGA’s newest gold mine in South Africa. It is situated near Orkney, Klerksdorp and Viljoenskroon, about 180 kilometres southwest of Johannesburg. Given the geological complexity of the Vaal Reef, scattered mining is employed. Great Noligwa mine was merged with Moab Khotsong in 2014 and operations are now collectively referred to as Moab Khotsong. Great Noligwa commenced production in 1968.
Surface Operations
Surface Operations consists of Hard Rock Surface Sources and Mine Waste Solutions (MWS).
Low grade stockpiles
Description
The Vaal River and West Wits operations extract gold from various low grade stockpiles where there is more metallurgical capacity than reef mined. Uranium is produced as a by-product at Vaal River South Uranium Plant. In addition, backfill product is produced and used as support in mining operations. The Hard Rock Surface Sources includes the rail transport infrastructure, the Vaal River and West Wits Laboratories and tailings management facilities.
Mine Waste Solutions (MWS)
Description
MWS is a gold and uranium tailings recovery operation located in the western portion of the Witwatersrand Basin, some 160 kilometres from Johannesburg, approximately eight 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 are made up of deposits from three gold and uranium mines that operated for 50 years.
The tailings dams are scattered over an area that stretches approximately 13.5 kilometres north to south and 14 kilometres east to west. The footprints of the 14 tailings dams cover an area of approximately 1,100 hectares.
The MWS gold plants have the capacity to treat tailings of 1.93 million tonnes per month. The uranium plant has a design capacity of 100,000 tonnes per month. The uranium plant was commissioned in the fourth quarter of 2014.
The tailings dams are comprised of tailings material which originated from the processing of underground 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 generally fine.
West Wits operations
Description
The West Wits operations, Mponeng and TauTona, are situated southwest of Johannesburg, on the border between Gauteng and North West Province. From 1 January 2013 the Savuka mine was incorporated into the TauTona mine to access Savuka’s remaining Ore Reserve via TauTona’s infrastructure and Savuka and TauTona operate as a single mine.
AngloGold Ashanti holds a number of mining rights in the Vaal River Operation which have been successfully converted, executed and registered as new order mining rights at the Mineral and Petroleum Resources Titles Office (MPRTO).
Geology
Two reef horizons are exploited at the West Wits operations, the VCR located at the top of the Central Rand Group and the CLR near the base. The separation between the two reefs increases from east to west from 400 to 900 metres, due to the VCR unconformity. TauTona exploits both reefs, whereas Mponeng only mines the VCR. Faults of greater than 70 metres are rare. The CLR consists of one or more conglomerate units and varies from several centimetres to more than three metres 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 centimetres to more than three metres in thickness.
West Wits – Mponeng
Description
Mponeng, in operation since 1986, is located between the towns of Carletonville and Fochville on the border between Gauteng and the North West Province, southwest of Johannesburg. The underground operation, the world’s deepest mine, extracts the VCR at depths between 2,800 metres and 3,400 metres through sequential-grid mining. In the future, the mining of the CLR from Mponeng will steadily increase. The Mponeng lease area is constrained to the north by the TauTona mine, to the east by Sibanye’s Driefontein mine and to the west by Harmony’s Kusasalethu mine. Mponeng comprises a twin-shaft system housing two surface shafts and two sub-shafts. Ore is treated and smelted at the mine’s gold plant. The plant has a monthly capacity of 170,000 tonnes.
West Wits – TauTona
Description
TauTona, in operation since 1961, lies on the West Wits Line, just south of Carletonville in Gauteng, about 70 kilometres southwest of Johannesburg. Underground mining takes place at depths of between 2,000 metres and 3,640 metres. The mine has a three shaft system, supported by secondary and tertiary shafts and employs mainly sequential grid mining method to mine the CLR. Savuka, which is adjacent to and shared a processing plant with TauTona, was incorporated into TauTona following a study in 2012 that concluded that the optimal, most efficient means of accessing Savuka’s remaining Mineral Resource would be through TauTona’s infrastructure. The merging of Savuka into TauTona early in 2013 was determined as the most efficient way of mining the remainder of Savuka’s lower grade Ore Reserve, while minimising operational and infrastructure maintenance costs. A link between the two mines reduces dependency on a single infrastructure system, including ore passes.
The TauTona and Mponeng reef material is processed through the Mponeng Gold Plant.
The Savuka Gold Plant has a monthly capacity of 165,000 tonnes, processing mainly material from the Mponeng low grade stockpile.
CONTINENTAL AFRICA
GHANA - Summary of metallurgical operations
Obuasi | Iduapriem | |||||||||||||||
Sulphide Treatment Plant | Tailings Treatment Plant | Alternate Ore Treatment Plant | Iduapriem Plant | |||||||||||||
Capacity (000 tonnes/month) | 195 | 180 | 120 | 392 |
Ghana – Iduapriem
Description
Iduapriem, wholly owned by AngloGold Ashanti since September 2007, comprises the Iduapriem and Teberebie properties on a 105km2 concession. The mine, which began operations in 1992, is situated in the western region of Ghana, some 85 kilometres north of the coastal city of Takoradi and eight kilometres southwest of Tarkwa.
Iduapriem is an open-pit mine and its processing facilities include a Carbon-in-pulp (CIP) plant.
Geology
The Iduapriem and Teberebie properties are located along the southern end of the Tarkwa basin. The mineralisation 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.
Ghana – Obuasi
Description
Obuasi, wholly owned by AngloGold Ashanti since 2004 and currently in a limited operating phase, is located in the Ashanti Region of Ghana, some 320 kilometres north-west of the capital Accra and approximately 60 kilometres south of Kumasi. Mining operations are primarily underground, to a depth of 1.5 kilometres. Obuasi originally opened in 1897.
Geology
The gold deposits at Obuasi are part of a prominent gold belt of Proterozoic (Birimian) volcano-sedimentary and igneous formations which extend for a distance of approximately 300 kilometres in a north-east/south-west trend insouth-western Ghana. Obuasi mineralisation is shear-zone related and there are three main structural trends hosting gold mineralisation: the Obuasi trend, the Gyabunsu trend and the Binsere trend.
Two main ore types are mined:
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 coarse-grained and occasionally visible to the naked eye. This ore type is generally non-refractory; and
sulphide ore which is characterised by the inclusion of gold in the crystal structure of a sulphide material. The gold in these ores is fine-grained and often locked in arsenopyrite. Higher gold grades tend to be associated with finer grained arsenopyrite crystals. Other prominent minerals include quartz, chlorite and sericite. Sulphide ore is generally refractory.
Power is supplied to the mines by the Volta River Authority and the transmission is done by the GridCo Company.
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 project manager.
Kibali comprises 10 permits covering an area of 1,836 km2 in the Moto goldfields of the north-east DRC.
The mine is located within 10 kilometres of the town of Watsa in the north east portion of the DRC in the Orientale Province. Access to the area is available by gravel road from the Ugandan border town of Arua over a distance of 180 kilometres. Power to the mine is self-generated.
The Kibali Gold Mine has a processing operation capable of producing an average of 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 oxide 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 greenschist facies.
The combined Karagba, Chauffeur and Durba (KCD) deposit is host to the majority of the currently defined Mineral Resource and Ore Reserve, as well as the current open pit and underground mining operations. KCD is hosted within a mineralised corridor that also hosts the Sessenge, Gorumbwa and Pakaka deposits and a number of exploration prospects.
The known deposits of the Kibali 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 sequence of coarse volcaniclastic and sedimentary rocks. The mineralisation is generally stratigraphically bound and associated with carbonate-silica-albite alteration with minor sulphide.
AUSTRALASIA
AUSTRALIAAustralia
Australia – Sunrise Dam
Tropicana (70%)(8)
Description
The Sunrise Dam Gold Mine is located in the northern goldfields of Western Australia, 220 kilometres northeast of Kalgoorlie and 55 kilometres south of Laverton.
The mine consists of a large open pit which is now in its sixteenth 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 carbon-in-leach (CIL) processing plant, which is managed by AngloGold Ashanti. Power to the mine is self-generated. The CIL processing plant has a nameplate capacity of 2.5 million tonnes per annum, 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
Gold ore at Sunrise Dam is structurally and lithologically controlled within gently dipping high strain shear zones (for example, Sunrise Shear) and steeply dipping brittle-ductile low strain shear zones (for example, Western Shear). Host rocks include andesitic volcanic rocks, volcanogenic sediments and magnetic shales.
Australia - Tropicana
Description
The Tropicana Gold Mine is located in Western Australia, 330 kilometres north north-east of Kalgoorlie and 200 kilometres east of Sunrise Dam. The Tropicana JV is an unincorporated joint venture between AngloGold Ashanti Australia (70%) and Independence Group (30%), with AngloGold the manager.
The mine was commissioned in 2013, with the first gold production on 28 September.
Mining currently occurs from two pits, Tropicana and Havana with a contractor mining fleet. Ore is processed in a relatively conventional CIL processing plant, which is managed and operated by AngloGold Ashanti. The plant has a nameplate capacity of 5.8mtpa on fresh rock ore.
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 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 preferred host unit within the gneissic package. Post mineralisation faulting has separated the once continuous ore zone, with the open pits developed on each of the fault bounded blocks.
THE AMERICAS
UNITED STATES OF AMERICAArgentina
Cerro Vanguardia (92.5%)
Brazil
AGA Mineração(5)
Serra Grande
United States of America –
Cripple Creek & Victor(9)
(1) |
|
(2) | In 2013, Savuka and TauTona were combined under TauTona as one cash-generating unit. |
(3) | Includes MWS for purposes of this report. It is operated and managed as a separate cash-generating unit. |
(4) | Gold produced by treating material from multiple mine sources in South Africa. |
(5) | The grades from Obuasi and AGA Mineração represent those for their underground operations. |
(6) | Mine in closure mode from 1 January 2015. |
(7) | AngloGold Ashanti |
(8) | Commenced production in the second half of 2013. |
(9) | AngloGold Ashanti sold Cripple Creek & Victor
Cripple Creek & Victor is reported as a discontinued operation. |
Rounding of figures may result in computational discrepancies.
SOUTH AFRICA
AngloGold Ashanti’s South African operations comprise four deep-level mines and surface production facilities. They are:
The West Wits operations – Mponeng and TauTona;
The Vaal River operations – Kopanang and Moab Khotsong; and
Surface operations.
Gold production (000oz) | Average number of employees | |||||||
Operations |
| |||||||
South Africa | ||||||||
1. Vaal River | ||||||||
Kopanang | 117 | 4,052 | ||||||
Moab Khotsong(1) | 254 | 6,469 | ||||||
2. West Wits | ||||||||
Mponeng | 219 | 6,249 | ||||||
TauTona | 209 | 4,656 | ||||||
3. Surface operations (2) | 193 | 2,929 | ||||||
(1) | From 1 January 2015, Moab Khotsong and Great Noligwa were operated and managed as one operation and accordingly combined under Moab Khotsong. |
(2) | Includes MWS for purposes of this report. It is operated and managed as a separate cash-generating unit. |
South Africa Key Statistics
Unit | 2015 | 2014 | 2013 | |||||
Operation | ||||||||
Tonnes treated/milled | Mt | 36.8 | 38.4 | 39.2 | ||||
Pay limit(1) | oz/t | 0.39 | 0.39 | 0.36 | ||||
g/t | 14.38 | 14.35 | 13.37 | |||||
Recovered grade(1) | oz/t | 0.225 | 0.239 | 0.204 | ||||
g/t | 7.70 | 8.19 | 7.00 | |||||
Gold production | 000oz | 1,004 | 1,223 | 1,302 | ||||
Total cash costs(2) | $/oz | 881 | 849 | 850 | ||||
Total production costs(2) | $/oz | 1,091 | 1,087 | 1,070 | ||||
All-in sustaining costs(2)(3) | $/oz | 1,088 | 1,064 | 1,120 | ||||
Capital expenditure | $m | 206 | 264 | 451 | ||||
Safety | ||||||||
Number of fatalities | 9 | 4 | 6 | |||||
AIFR | Per million hours worked | 10.81 | 11.85 | 12.63 | ||||
People | ||||||||
Average no of employees: Total | 28,325 | 29,511 | 32,406 | |||||
Permanent employees | 25,274 | 26,056 | 28,526 | |||||
Contractors | 3,051 | 3,455 | 3,880 |
(1) | Refers to underground operations only. |
(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 2015
Production and costs
Production for the year ended 31 December 2015 was 219,000oz, or 18 percent, lower than for the year ended 31 December 2014, predominantly due to safety related stoppages, with approximately 113,000oz lost as a result of these disruptions. Mponeng and Moab Khotsong were most affected. In addition to operational effects of the safety related stoppages, Mponeng also experienced delays to phase 1 of its below 120 level life extension project. The result of this is that mining flexibility was curtailed as production was undertaken on only three levels.
A derisking plan was implemented to address seismicity challenges and a decision was taken during the year to withdraw from some of those areas to improve safety, further reducing available mining areas and leading to lower mining intensity and productivity.
In addition to – and in some cases as a result of – the safety stoppages, production at the Vaal River operations was negatively affected by a deterioration in the mining mix as the anticipated move into higher-grade areas was delayed. Increased dilution resulted in a decline in head grades. Safety stoppages and lack of available face length and mining flexibility resulting from the premature halt to mining of low-grade areas affected production at Kopanang. More concentrated efforts were put in place to prioritise safe practices and plans are underway to increase available face length and Ore Reserve development.
At Surface Operations, a reduction in grades in the marginal ore dumps material impacted negatively on production.
At Mine Waste Solutions, the flotation and uranium plants were temporarily stopped during the latter part of the year as these units did not operate at expected efficiencies.
All-in sustaining costs of $1,088/oz for the year ended 31 December 2015 were two percent higher compared to the previous year. The negative cost impact was marginal, due mainly to the weaker rand relative to the US dollar. The performance was significantly adversely affected by the lower volumes mined as well as ongoing inflationary pressures in South Africa, which is fully exposed to above-inflation administered price increases for critical inputs like power and water, while gaining little benefit from a lower fuel price.
Capital expenditure
Capital expenditure declined by 22 percent, in line with the groupwide cost optimisation and rationalisation programme and cash flow constraints.
Safety
Regrettably, our safety performance was dominated by a significant regression in mine fatalities. Tragically, nine of our colleagues lost their lives in separate fatal accidents, compared with four in 2014. Five of the fatalities resulted from fall of ground incidents, while the other fatalities were due to an underground vehicle incident, carbon monoxide gas inhalation, a scraper winch incident and an electrical incident.
People
In 2015 employee numbers were slightly down year-on-year as a result of the restructuring undertaken in connection with the consolidation of certain mines in the region. However, there was a marginal increase in December relating to the hiring of employees with specific skills and the reinstatement of 456 employees who had previously been dismissed at Moab Khotsong. Wage negotiations took place from June through to October 2015. All unions participated in the central collective bargaining process with the Chamber of Mines representing the gold producers and a three year wage settlement was executed.
Ore Reserve
As at 31 December 2015, the total Ore Reserve for the South Africa region was 26.14Moz (2014: 27.45Moz). This is equivalent to around 51 percent of the group’s total attributable Ore Reserve.
Growth and improvement
Mponeng Phase 1 below 120 level was delayed, with key infrastructure to service Ore Reserve development lagging behind schedule by more than a year at the end of 2015. To address critical issues, a detailed system capability study was undertaken to determine ore handling and material supply capacity. A high-level revised schedule was completed, based on the system capability. The study prioritises capital infrastructure in order to support Ore Reserve development. The preliminary impact of this schedule indicates an approximate 15-18-month delay in the 120 level gold delivery profile.
Given the constraints experienced in phase 1, the approach to phase 2 is being reviewed. Co-extraction of the VCR from the same shaft deepening infrastructure platform is being considered rather than the decline development employed in phase 1. Phase 2 will consequently be delayed by as long as two years. Work on 126 level is expected to be completed on schedule. Consequently, the company does not expect there to be any gap in gold production in spite of other delays.
At Moab Khotsong, project Zaaiplaats remained on hold. Another study has been undertaken to determine the best technical and economically viable options for the project and is expected to recommend alternative investment opportunities. The purpose of this study will be to formulate mine designs to economically extract Zaaiplaats and contiguous blocks from Moab Khotsong shaft systems and to claw back value through potential schedule, cost and mining-volume gains by applying modern shaft designs and other associated technologies.
CONTINENTAL AFRICA
AngloGold Ashanti has seven mines in the region, six of which are producing mines and processing operations, and five of which AngloGold Ashanti manages. One mine is on limited operations. Closure is underway at Yatela.
Attributable gold production (000oz) | Average number of employees | |||||||
Operations | ||||||||
| ||||||||
1. Democratic Republic of the Congo | ||||||||
Kibali 45% | 289 | 2,061 | ||||||
2. Ghana | ||||||||
Iduapriem | 193 | 1,565 | ||||||
Obuasi | 53 | 856 | ||||||
3. Guinea | ||||||||
Siguiri 85% | 255 | 3,445 | ||||||
4. Mali | ||||||||
Morila 40% | 49 | 389 | ||||||
Sadiola 41% | 69 | 585 | ||||||
5. Tanzania | ||||||||
Geita | 527 | 3,041 |
Continental Africa - Key Statistics
Unit | 2015 | 2014 | 2013 | |||||
Operation | ||||||||
Tonnes treated/milled | Mt | 27.2 | 29.9 | 26.9 | ||||
Pay limit | oz/t | 0.036 | 0.039 | 0.049 | ||||
g/t | 1.233 | 1.345 | 1.669 | |||||
Recovered grade | oz/t | 0.053 | 0.054 | 0.054 | ||||
g/t | 1.64 | 1.66 | 1.69 | |||||
Gold production (attributable) | 000oz | 1,435 | 1,597 | 1,460 | ||||
Total cash costs(1) | $/oz | 678 | 783 | 869 | ||||
Total production costs(1) | $/oz | 900 | 977 | 1,086 | ||||
All-in sustaining costs(1)(2) | $/oz | 815 | 968 | 1,202 | ||||
Capital expenditure | $m | 315 | 454 | 839 | ||||
Safety | ||||||||
Number of fatalities | 1 | 0 | 2 | |||||
AIFR | Per million hours worked | 0.50 | 1.56 | 1.97 | ||||
People | ||||||||
Average no of employees: Total | 11,942 | 16,070 | 16,625 | |||||
Permanent employees | 5,061 | 8,739 | 10,778 | |||||
Contractors | 6,881 | 7,331 | 5,847 |
(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. |
Production and costs
Despite a decline in overall production for the region in 2015, Geita, Kibali and Iduapriem all recorded higher levels of production. Underground production at Kibali was successfully ramped up and Geita continued as the star performer, helping to make up some of the production lost due to Obuasi being on limited operations following the suspension of underground mining operations at the end of 2014.
Increased production at Geita was driven by an increase in recovered grade from ore sourced from Nyankanga Cut 7. Mining volumes were maintained despite abnormally heavy rainfall and a decline in plant throughput in the last quarter of the year due to planned maintenance.
At Kibali, the ramp up of plant operations to design capacity and increased plant availability, resulted in a 23 percent increase in tonnage throughput, and a 22 percent increase in gold produced. Production at Iduapriem improved given the increase in the recovered grade and the ramp up from limited operations the previous year.
Production at Morila was boosted by a 17 percent increase in recovered grade as higher grade tonnes were sourced from the satellite pit that was commissioned in the latter part of 2014. Reduced operational flexibility and a decline in the availability of higher-grade oxide ore contributed to reduced production from Sadiola.
Siguiri’s production was negatively impacted by a planned fall in recovered grade, driven by depletion of the higher grade ore in mined areas owing to delayed access to the Soloni pit. This was compounded by a decrease in tonnage throughput following unplanned maintenance that occurred during the year. Production however, started improving in the last quarter of the year as delays in accessing mining areas were resolved and the mine began processing ore from the Soloni pit.
Costs improved significantly, declining by 13 percent, in the case of total cash costs, and 16 percent, in the case of all-in sustaining costs. These improvements were the result of the cumulative benefits of the operating and cost management initiatives that have been implemented since 2013. Costs specifically benefitted from increased production and improved efficiencies at the larger operations. The Continental Africa operations were also able to take advantage of lower oil prices, which particularly benefitted the open pit operations which run large mining fleets and/ or generate all or part of their own power from diesel or heavy fuel oil.
In addition, the region was able to capitalise to some extent on exposure to weaker local currencies by in-country sourcing of goods, services and labour and by targeting operational efficiencies.
Capital expenditure
As anticipated, at Kibali, capital expenditure decreased by $55 million as construction of the plant was largely completed during 2014. Capital expenditure for 2015 decreased by $59 million at Obuasi, which was placed on limited mining operations.
Safety
Tragically, there was one fatality in the region, when an employee drowned at Obuasi. The overall safety performance in the region otherwise continued to improve.
People
The average number of people employed in the region declined from 16,070 in 2014 to 11,942 in 2015, largely as a result of the retrenchment process undertaken at Obuasi during 2014.
Ore Reserve
The total attributable Continental Africa Region Ore Reserve was 19.26 million ounces (2014: 18.93 million ounces). This amounts to 37 percent of the group’s Ore Reserve.
Growth and improvement
An extensive pipeline of project opportunities is planned, targeted mainly at energy cost savings and mine-life extensions. These opportunities include (i) progressing to underground mining at Geita’s Star & Comet ore body and (ii) accessing additional Mineral Resources at Iduapriem (to which end exploration work is to be conducted within the concession and the mine plan is to be revised) and at Siguiri, using heap leaching to supplement production.
Although the portion of hard sulphide ore tonnes milled at Geita remained high during the year, the plant nevertheless managed to process 5.2Mt as a result of the better quality of feed and improved fragmentation control.
At Kibali, sinking of the vertical shaft reached shaft bottom at a depth of 751.2m and equipping of the crusher and production levels was completed. Construction of Ambarau, the second hydropower station, was delayed following the failure of the temporary berm wall owing to high river flows. Repair work continues and the first phase is now expected to be completed in the second quarter of 2016, with full completion and commissioning of the power station scheduled for the latter part of the year. Once operational, Ambarau is expected to deliver 11MW. A third hydropower station, Azambi, also expected to generate 11MW, is planned to come on line in 2018.
At Siguiri, a range of projects is targeted at reducing energy costs, extending the mine life and implementing heap leaching to supplement production.
AUSTRALASIA
Attributable gold production (000oz) | Average number of employees | |||||||
Operations | ||||||||
Australia | ||||||||
1. Sunrise Dam | 216 | 400 | ||||||
2. Tropicana 70% | 344 | 436 |
AngloGold Ashanti’s Australasian assets comprise the wholly owned Sunrise Dam and the 70 percent-owned Tropicana Gold mine, Australia’s newest gold mine. Tropicana completed its second full year of production in 2015.
Australasia - Key Statistics
Unit | 2015 | 2014 | 2013 | |||||||||||||
Operation | ||||||||||||||||
Tonnes treated/milled | Mt | 8.2 | 7.8 | 4.3 | ||||||||||||
Pay limit | oz/t | 0.06 | 0.07 | 0.09 | ||||||||||||
g/t | 1.85 | 2.29 | 2.82 | |||||||||||||
Recovered grade | oz/t | 0.068 | 0.078 | 0.081 | ||||||||||||
g/t | 2.12 | 2.43 | 2.51 | |||||||||||||
Gold production (attributable) | 000oz | 560 | 620 | 342 | ||||||||||||
Total cash costs(1) | $/oz | 702 | 804 | 1,047 | ||||||||||||
Total production costs(1) | $/oz | 919 | 1,070 | 1,333 | ||||||||||||
All-in sustaining costs(1)(2) | $/oz | 875 | 986 | 1,376 | ||||||||||||
Capital expenditure | $m | 78 | 91 | 285 | ||||||||||||
Safety | ||||||||||||||||
Number of fatalities | 0 | 0 | 0 | |||||||||||||
AIFR | Per million hours worked | 8.56 | 10.73 | 7.91 | ||||||||||||
People | ||||||||||||||||
Average no of employees: Total | 836 | 832 | 925 | |||||||||||||
Permanent employees | 195 | 194 | 281 | |||||||||||||
Contractors | 641 | 638 | 644 |
(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. |
Production and costs
Total gold production for the Australasian region of 560,000oz in 2015 was 60,000oz, or 10 percent, lower than the previous year. This decline was largely due to an 18 percent decrease in production from Sunrise Dam.
Production at Sunrise Dam in 2015 was 46,000oz lower than in 2014, due primarily to lower mined grades. The lower grade of this ore was largely due to the nature and location of the zones mined, which were on the periphery of the main ore bodies and generally more variable than those mined in 2014.
Tropicana produced 491,000oz (of which 344,000oz constituted AngloGold Ashanti’s share), reaching its 1 millionth ounce on schedule, just over two years since pouring first gold. Production was 4 percent lower than in 2014 due to the decrease in the average head grade to 2.57 g/t, which is consistent with the grade streaming strategy that underpins the life of mine plan. The lower grades in 2015 were partially offset by an increase in throughput in the processing plant to 6.2Mt (2014: 5.7Mt).
Total cash costs for the year decreased by 13 percent compared to 2014, largely as a result of favourable currency movements. Costs and production remained within guidance and received the benefit of a weaker Australian dollar relative to the US dollar and also lower oil prices.
Capital expenditure
Capital expenditure in total decreased by $13m compared to 2014, largely as a result of favourable currency movements. Stay in business Ore Reserve development, decreased by $6m compared to 2014 while the project capital reduced by $7m, following completion of the Tropicana development.
Safety
Overall safety performance improved at both mines in the region, but particularly at Tropicana, which recorded its best performance to date. There were again no fatalities.
People
A total of 836 people were employed on average by the Australia region – 195 full time employees and 641 contractors.
Ore Reserve
At the end of 2015, the total attributable Ore Reserve for the Australasia Region was 3.09 million ounces (2014: 3.53 million ounces). This makes up around six percent of the group’s Ore Reserve.
Growth and improvement
At Sunrise Dam, work is being carried out to assess the viability of an underground crusher and conveyor system for haulage via a new decline at the northern end of the operation. The conveyor decline would also provide exploration drilling access to the northern parts of the ore body that have been difficult and costly to drill from surface due to the surface waste dumps and salt lake.
At Tropicana, studies are being carried out to assess an alternative, low-cost approach to mining the down-dip extensions of the Havana and Tropicana pits, along with extensions to the north and south.
The mining study is looking at the application of mine design techniques that are used more commonly in mining other commodities such as coal. The work is based on a starter pit followed by strip mining of a large cutback, then backfilling the mined out areas. This approach, which is aimed at extending the mine life, would reduce stripping costs substantially with in-pit dumping of waste and shorter haulage distances.
A substantive Mineral Resource definition programme is being carried out as part of this study, supported by data generated by 3D seismic surveys carried out in 2014 and 2015. This data has enabled the mineralised zones down-dip of the Tropicana ore bodies to be imaged, generating a structural model to help cost-effectively target deep drill holes. The first drill testing of these targets in 2015 returned encouraging results and confirmed the structural interpretation. It is expected that approximately 130,000m of drilling will be carried out at Tropicana in 2016.
Processing plant optimisation work is also underway at Tropicana to debottleneck the processing plant, maximise usage of the larger pieces of equipment, and increase throughput from annual nameplate capacity of 5.8Mt to between 7.0Mt and 7.5Mt through staged increases. The increase in throughput is expected to offset the production decline that will occur as grades decrease over time, as per the mine plan. Upgrade work will be conducted during 2016 with the benefits expected to be realised from 2017 onwards.
THE AMERICAS
AngloGold Ashanti has three mining operations – both open pit and deep level mining – in the Americas region. In addition, there is an active greenfields exploration programme underway in Colombia.
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Attributable gold production (000oz) | Average number of employees | |||||||
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Operations | ||||||||
1. Argentina | ||||||||
Cerro Vanguardia 92.5% | 278 | 1,687 | ||||||
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2. Brazil | ||||||||
AGA Mineração | 421 | 4,546 | ||||||
Serra Grande | 132 | 1,446 | ||||||
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3. Colombia – exploration programme | ||||||||
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Americas - Key Statistics (1)
Unit | 2015 | 2014(5) | 2013(5) | |||||||||||||||||||
Operation | ||||||||||||||||||||||
Tonnes treated/milled | Mt | 7 | 6.8 | 5.9 | ||||||||||||||||||
Pay limit | oz/t | 0.098 | 0.092 | 0.096 | ||||||||||||||||||
g/t | 3.351 | 3.152 | 3.294 | |||||||||||||||||||
Recovered grade | oz/t | 0.108 | 0.104 | 0.120 | ||||||||||||||||||
g/t | 3.71 | 3.58 | 4.13 | |||||||||||||||||||
Gold production (Attributable) | 000oz | 831 | 785 | 770 | ||||||||||||||||||
Silver (attributable) | Moz | 4.4 | 3.1 | 3.1 | ||||||||||||||||||
Total cash costs(2) | $/oz | 576 | 676 | 653 | ||||||||||||||||||
Total production costs(2) | $/oz | 845 | 918 | 892 | ||||||||||||||||||
All-in sustaining costs(2)(3) | $/oz | 792 | 974 | 1,011 | ||||||||||||||||||
Capital expenditure(4) | $m | 196 | 225 | 253 | ||||||||||||||||||
Safety | ||||||||||||||||||||||
Number of fatalities | 1 | 2 | 0 | |||||||||||||||||||
AIFR | Per million hours worked | 5.61 | 3.81 | 4.74 | ||||||||||||||||||
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People | ||||||||||||||||||||||
Average no of employees: Total | 7,679 | 8,588 | 8,374 | |||||||||||||||||||
Permanent employees | 5,492 | 5,944 | 5,979 | |||||||||||||||||||
Contractors | 2,187 | 2,644 | 2,395 | |||||||||||||||||||
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(1) | Key statistics are for the continuing operations in the region and exclude CC&V which was sold effective 3 August. “Operation” key statistic comparatives have been restated. |
(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. |
(4) | 100 percent, (not attributable) and includes Colombia |
Production and costs
Production in the Americas increased by 46,000oz, or six percent, in 2015 compared to the previous year (excluding production from CC&V) due principally to a 13 percent increase in production at Cerro Vanguardia and a four percent increase in production at AGA Mineração. These increases were partially offset by lower output from Serra Grande. The region also produced 4.4Moz of by-product silver.
Cerro Vanguardia continued to deliver a strong performance with record production driven by a planned improvement in grade with a greater proportion of mill feed coming from underground and better recoveries. Improved production at AGA Mineração was a result of higher tonnage and better feed grades from both the Córrego do Sítio and Cuiabá complexes.
Teams in the region continued to focus on limiting cost increases in increasingly challenging inflationary environments in both Argentina and Brazil, by prioritising a range of operational improvements.
Cost control efforts were aided by higher gold and silver production levels, the removal of the higher cost CC&V production and local currency depreciation, given that the Brazilian real was on average 42 percent weaker in 2015 than in 2014 and the Argentinian peso was on average 14 percent weaker in 2015 than in 2014 against the dollar. Efficiency initiatives covered a range of areas, including labour and contractor costs, energy, consumables and stay-in-business capital, as well as a drive to increase production.
Cerro Vanguardia continued to implement phase II of the Project 500 efficiency initiative with a focus on optimising mill throughput, improving silver recovery, delivering more underground ore to the mill and improving the overall effectiveness of key administration areas such as procurement and warehousing.
In Brazil, the cost management programme that started in 2013 continued into its third year, yielding a range of productivity improvements including the optimisation of operational processes, reductions in the price of power and materials and decreases in administrative expenses. At Córrego do Sítio, higher grades contributed an additional 20,000oz from the Carvoaria ore body and increased development rates further aided cost improvements.
Capital expenditure
The region’s capital expenditure of $196 million (including Colombia and excluding CC&V), was 13 percent lower than the previous year. While sharp currency devaluations had a negative effect on the purchase of imported items, they had a positive impact on expenditure relating to Ore Reserve development and locally produced items. Most of the capital expenditure was on ore development and deferred stripping ($101 million) and general stay-in-business or maintenance capital ($89 million).
Safety
Tragically, one fatality was reported in the Americas in 2015, when an employee died in a fall-of-ground incident at Lamego.
People
A total of 7,679 people were employed on average by the Americas region in 2015, including 5,492 full-time employees and 2,187 contractors.
Ore Reserve
At the end of 2015, the total attributable Ore Reserve for the Americas Region, was 3.21 million ounces (2014: 7.56 million ounces). This makes up around six percent of the group’s Ore Reserve.
Growth and improvement
At Cerro Vanguardia, the expansion project to increase underground production over the next five years is underway and remains on schedule. During 2015 an initiative to accelerate open pit and underground operations using an external contractor was approved in order to improve the production profile. Additional cost reductions are planned by further increasing plant throughput and recovery as well as optimising shift configuration and backfilling minedout pits with waste material to reduce haul distances. Additionally, mineral rights were acquired adjacent to Cerro Vanguardia, where exploration will be undertaken
The focus at Cuiabá remained on ventilation and transport projects to support mining at increased depth, as well as the overall drive to maintain stable production levels in coming years. Córrego do Sítio continued initiatives to improve production in the medium term, including development of the underground Mina I ore body, which is expected to be the main contributor in 2016. Drilling programmes aimed at opening a new pit at Mina III and new underground sites at Mina II and São Bento Deep are underway.
At Serra Grande, underground diamond directional drilling proved the continuity of one of the Mina III high-grade gold-bearing quartz veins, from 900m to 1,150m at depth. Importantly, this vein appears to increase in both thickness and length along the strike. Palmeiras Sul targets were drilled in the mine’s tenements confirming the addition of a high-grade Mineral Resource. Surface and underground drilling continued to define the Inga ore body, expected to go into production in 2016. New open-pit potential was also confirmed, creating a pipeline of small pits to continue producing.
Colombia remains a key area of focus and its exploration programme continues to yield encouraging results. The Nuevo Chaquiro target is a porphyry-related, copper-gold mineralised stockwork system, located within the Western Cordillera, where long intersections of significant copper mineralisation with gold credits were intersected during 2013 and 2014. Diamond drilling was undertaken in 2015 to delineate the limits of the higher-grade core and increase confidence in the highest-grade portion of the ore body to support a small, phase I concept design. Advanced studies to complete the concept study phase are planned for 2016.
Gramalote exploration focused on regional exploration drilling as well as drilling to improve definition of the low-grade saprolite (oxide ore) Mineral Resource. Some peripheral exploration drilling was also done to define a small, underground Mineral Resource option for the artisanal and small-scale mining co-existence model. The Mineral Resource model was updated for the three Gramalote deposits: Gramalote Central, Monjas West and Trinidad, incorporating the latest drill-hole information, reviewed estimation parameters and changes in the geo-statistical methodology (localised uniform conditioning).
At the La Colosa project, drilling focused on data collection at infrastructure locations. No Mineral Resource drilling was conducted. In early 2015, geotechnical and hydrogeological drilling was initiated at the proposed tailings management facility and the waste rock facility. Mine planning continues, with the validation of current base-case opportunities and a small mine concept and several alternatives under evaluation. Metallurgical test work completed in 2015 was conducted to validate process opportunities, including an increase in recovery and plant throughput. A trade-off study is in progress and is expected to be finalised in early 2016.
EXPLORATION REVIEW
Our exploration is focused on creating value by providing long-term optionality and improving the portfolio quality. The objectives are met by:
Greenfields exploration, which aims to discover large, high-value Mineral Resources that will eventually lead to the development of new gold mines. Our greenfields exploration team was recognised by a leading industry research group, in 2015 as the industry’s most successful in Mineral Resource discovery. The team has a proven track record that includes the discovery of world-class ore bodies at La Colosa, Gramalote, Tropicana and Nuevo Chaquiro. These discoveries are attributed to our committed and professional team of geoscientists working on a portfolio of highly prospective and rigorously prioritised greenfields ground holdings.
Brownfields exploration, which focuses on delivering value through incremental additions to our Ore Reserve in existing mines as well as new discoveries in defined areas around existing operations. Brownfields exploration actively drives the creation of value by growing our Mineral Resource and Ore Reserve, our major assets. Our brownfields exploration programme is based on innovative geological modelling and mine planning and continual optimisation of our asset portfolio.
Greenfields exploration
Our greenfields exploration programme has over 12,000km2 of highly-prospective ground in two countries – Australia and Colombia – and also maintains small ground positions in Argentina and Brazil. Expenditure was $22.4 million in 2015, including over 50,000m of diamond, reverse circulation and aircore drilling. This programme also included focused generative activities in countries with operational synergies.
In Western Australia, exploration activities at the Tropicana project, in joint venture with Independence Group NL (AngloGold Ashanti: 70 percent), progressed well through the year with more than 33,000m of aircore drilling, 8,500m of reverse circulation drilling and 2,200m of diamond drilling completed. Excellent initial results were returned from the Madras prospect approximately 25km south of Tropicana. Significant drill intersections in shallow oxide material included 15m @ 5.08g/t Au from 45m, 25m @ 2.47g/t Au from 35m, and 17m @ 4.22g/t Au from 64m. To date, the Madras mineralisation has been found to be restricted in size and only well developed in the weathered (saprolite) zone.
Airborne geophysical surveys were completed over several new projects wholly owned by AngloGold Ashanti including Strawbridge, Pindabunna, and Neds Creek in Western Australia. Target generation and first phase field work is continuing on these projects. In New South Wales at the Mullion Project (wholly-owned), 2,500m of diamond drilling were completed to follow up bedrock targets identified from geophysical surveys conducted in 2014. Although significant favourable alteration was intersected, only low tenor results were returned.
In Colombia, the Quebradona project was transferred to the projects team early in the year. Greenfields exploration then focused on the Guintar project west of Medellin where mapping outlined an extensive alteration system in sediments overlying a dioritic porphyry intrusion with associated coppergold and epithermal gold occurrences. An eight-hole drilling programme commenced in the third quarter, with 3,000m completed by year end. Drilling intersected hornfelsed sedimentary rocks and breccia zones with significant pyrrhotite and pyrite in fractures, stringers and fine stockworks returning anomalous geochemical values.
In Brazil, exploration was undertaken early in the year on the Graben project, in joint venture with Graben Mineração (AngloGold Ashanti: 80 percent). A programme of 1,800m of diamond drilling was completed. Results did not meet expectations and the joint venture was terminated. Project generation work in other areas in Brazil progressed for the rest of the year.
Brownfields exploration
Brownfields exploration was carried out in 10 countries, in and around AngloGold Ashanti operations. A total of 469,818m of diamond and reverse circulation drilling was completed during the year.
South Africa: Four surface holes were drilled during the year – three are ongoing at Mponeng’s Western Ultra Deep Levels (WUDLs) and one was completed at the Vaal River operations – achieving a total drilled depth of 4,966m.
Argentina: At Cerro Vanguardia, drilling programmes for Mineral Resource expansion and exploration continued during the year. The focus was on delineating vein extensions along strike and at depth. Mapping, trenching and channel sampling continued as part of the reconnaissance programme to identify new drilling targets.
Brazil: In the Iron Quadrangle, the underground drilling programmes for Mineral Resource development continued at both the Cuiabá and Lamego mines. At Cuiabá, additional drilling was directed at satellite mineralisation that may be accessible from existing infrastructure. Surface drilling programmes at Córrego do Sítio continued to infill and expand the oxide Mineral Resource while the underground programme added extensions to several ore bodies, including the Inga ore body.
Colombia: Exploration in the Gramalote area continued, with programmes in and around the Gramalote Central deposit. Limited drilling programmes were also conducted within the joint venture area.
At La Colosa, the emphasis on other project-related drilling continued, supporting geotechnical, hydrological and site infrastructure studies.
The Quebradona project development drilling programme continued during the year. The programme focus was directed at infill drilling in the higher grade, upper part of the deposit.
Tanzania: Drilling focused on Mineral Resource delineation, testing both strike and dip extent of current deposits as well as confirming underground potential (Matandani North, Geita Hill East and Star & Comet). Mineral Resource conversion infill-drilling programmes took place at Nyankanga Cut 7, Nyankanga Cut 8 and Star & Comet Cut 3. Pre-resource drilling programmes were undertaken to test targets at Star & Comet Deeps, Matandani North and Geita Hill East Deeps. Vertical seismic profiling and metallurgical test work drilling was conducted at Nyankanga, Geita Hill and Matandani respectively. In all, 50 holes (15,273m) were completed. A 2D ground seismic survey was conducted along two sectional lines across Nyankanga and Geita Hill to confirm the suitability of the geology and mineralisation in these deposits for 3D seismic modelling.
Guinea: A total of 46,007m was drilled at Siguiri during the year across a range of programmes including fresh rock projects at several pits and oxide reconnaissance drilling. In all, reverse circulation drilling totalled 35,080m plus limited (1,077m) aircore drilling, with the remainder being diamond drilling or RCDD drilling. The reverse circulation drilling included 4,416m of advanced grade control drilling in a test block within the Kami pit.
Ghana: No exploration was conducted at Obuasi. Exploration at Iduapriem during the first half of the year focused on Mineral Resource infill drilling at Block 5 to upgrade the Inferred Mineral Resource to Indicated. Reconnaissance exploration (soil geochemistry, mapping and limited trenching) was also completed over the Bankyem, Mile 5 and Ajopa northwest targets. In the latter half of the year, drilling was initiated at Bankyem, Block 4S and Mile 5. A total of 6,924m drilling was completed in 2015.
Democratic Republic of the Congo: Total diamond drilling for near-mine exploration at Kibali during 2015 totalled 15,883m, with an additional 1,760m drilled on regional projects. The exploration aims to fulfil three main objectives: Mineral Resource – Ore Reserve replacement, the discovery of potential oxide displacement ounces, and identification and development of new targets.
Mali: A total of 13,110m of exploration reverse circulation drilling focused on the Sadiola North area and Tabakoto in 2015.
Australia: Exploration activities in 2015 were primarily on the Mineral Resource expansion programme at Tropicana with a drilling campaign comprising more than 23,000m of aircore, 27,000m of reverse circulation and 38,000m of diamond drilling completed. Drilling was focused on testing for extensions to mineralisation in the Tropicana, Swizzler, Havana and Havana South areas. An additional block of 3D seismic data was acquired at the southern end of the mine area to aid further exploration.
At Sunrise Dam, underground Mineral Resource development drilling continued throughout the year. Exploration diamond drilling focused primarily on extending the Inferred Mineral Resource as per the mine plan and underground grade control reverse circulation drilling continued to focus on converting the Indicated Mineral Resource into a mineable grade control block model for use in stope development designs. A start was made on the development of key diamond drilling platforms, which will be used over the life of mine to drill test exploration targets along the strike length of the deposit. A lake aircore drilling programme of just over 9,000m of drilling was completed at the Kraken Project, situated over the western extents of the Lake Carey playa salt lake system, approximately 10km east of Sunrise Dam. Several target areas were drill tested for gold mineralisation. All targets are beneath lake cover sequences.
TECHNOLOGY AND INNOVATION
Towards a new mining method for ultra-deep South African mines
The AngloGold Ashanti Technology Innovation Consortium made headway during the year, specifically pertaining to the development of key technologies and the methodology employed in achieving the project’s core objectives: to “safely mine all the gold, only the gold, all the time” from our deep-level underground mines, particularly those in the South Africa region. The latest generation reef-boring machine, the MK IV was successfully deployed at TauTona’s lower CLR shaft pillar. During 2015, reef-boring cycle times improved from 159 hours per hole to 82 hours per hole, which compares favourably to the 72 hours per hole targeted.
The ultra-high-strength backfill product has also been successfully developed to the stage where it can be pumped over the required distance of 1,000m, a pre-requisite for a full production mining cycle. This demonstrates progress on the work done that seeks to establish the basis for a safe, automated, deep-level underground mining method at AngloGold Ashanti.
Reef boring
Test site
Since deployment and commissioning of the MKII machine in 2013, a total of 56 holes has been drilled to date. Having completed drilling of the available block of ground, this machine was decommissioned in the third quarter of 2015. The MKIV reef-boring machine was successfully installed and commissioned in September 2015 at the extended test site at TauTona, and had drilled seven holes by year-end. Due to challenges experienced in the collector bin, the machine was unable to drill. These constraints affected the operation of the collector bin, causing a shortage of material cars to transport chippings away from the hole. The collector bin has since been redesigned, modified and returned underground for further trials, which are expected to begin in the first half of 2016. Additional material cars have been sourced and delivered.
Prototype site – medium-range machines
Three machines were commissioned at the prototype sites and a total of 81 holes were drilled in 2015.
Drilling at Moab Khotsong’s prototype site, where five holes were drilled within that specific block of ground, was suspended owing to the machine’s incompatibility with that reef – the geological complexity of the block of ground where drilling took place hampered progress with only a low percentage extraction rate achieved. The machine was relocated to TauTona for drilling in the VCR plane. Geological drilling continued to determine the best way forward for either mechanical or conventional extraction at the sites identified at Moab Khotsong.
Prototype site – Small-range machines
The geotechnical complexity of the block of ground hampered drilling and only a low percentage extraction was achieved due to the faulty reef plane. Once it was established that the stage gate of 80 percent extraction could not be achieved, drilling was discontinued.
Mechanical development
This development opens and equips the tunnels in which the reef-boring machines drill. However, the methodology for the opening up of mining grids for continuous reef boring remained a significant technical challenge in 2015.
Ultra-high-strength backfill
Surface trials to reach a pumping distance of up to 1,000m were successful at a product temperature ranging between 30°C and 35°C. This temperature range simulated the underground product temperature range. A tailings drying plant was successfully constructed and commissioned on surface at TauTona and a VCR plant was successfully constructed on 68 level. Commissioning has begun.
The Savuka plant was successfully trialled by RULA, the company assisting with design and manufacturing.
Geological drilling
Despite delays experienced during the year, drilling conducted in the last quarter of the year aimed at resolving the accuracy and deflection constraints by testing different stabiliser configurations. A total of five wet holes were drilled and plotted and final analysis is expected to be reported on in the first half of 2016.
The new fit-for-purpose Bohrmeister drill rig is due to be delivered and commissioned for drilling in the first half of 2016.
4C. |
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 and Tanzania and joint venture operations in the DRC and Mali;
Australasia – operations in Australia; and
Americas – operations in Argentina and Brazil.
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 management team, chaired by the Chief Executive Officer. See “Item 6: Directors, Senior Management and Employees”.
Support is provided to the executive management team in managing AngloGold Ashanti’s corporate activities at both the central and local levels.
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. |
For more information about AngloGold Ashanti’s mines, including as to the company’s mining rights and licences refer “Item 4B: Business Overview—The regulatory environment enabling AngloGold Ashanti to mine”.
AngloGold Ashanti’s operating mines are all accessible by road.
SOUTH AFRICA - GEOLOGY
The Witwatersrand Basin comprises a six-kilometre thick sequence of inter-bedded argillaceous and arenaceous sediments that extend laterally for some 300 kilometres north-east/south-west and 100 kilometres 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 kilometres 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 metres thick, which 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. The 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.
Operations in the South Africa region are powered by electricity from Eskom Holdings Limited which supplies 95 percent of the electricity used in South Africa.
•Vaal River operations
Description
The Vaal River operations consist of Kopanang, Moab Khotsong as well as surface operations. The process of integrating Great Noligwa into Moab Khotsong began in 2014 and, from an accounting perspective, these operations were treated as one cash-generating unit starting on 1 January 2015. This integration process will continue in 2016.
Geology
In order of importance, the reefs mined at the Vaal River operations are the Vaal Reef and the “C” Reef:
The Vaal Reef contains approximately 95-99 percent of the Ore Reserve tonnage with mining grades between 5 – 10 g/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 “C” Reef is a thin, small pebble conglomerate with a carbon-rich basal contact, located approximately 270 metres above the Vaal Reef. It has less than one percent of the estimated Ore 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
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SOUTH AMERICA
ARGENTINA
Argentina – Cerro Vanguardia
Description
Gold plants Capacity (000 tonnes/month) Uranium plants Capacity (000 tonnes/month) 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. Shallow underground mining began in 2010 to access high-grade material and accounts for about 19 West Gold
Plant Noligwa Gold
Plant Mispah Gold
Plant Kopanang Gold
Plant 180 260 140 420 — 260 — —
Vaal River – Kopanang
Description
Kopanang is an underground operation located in the Free State province, roughly 170 kilometres southwest of Johannesburg and approximately 10 kilometres southeast of the town of Orkney on a lease area of 35km2. The operation, which started in 1984, is west of neighbour Great Noligwa (now part of Moab Khotsong) and bound to the south by the Jersey Fault. Gold is the primary output, with uranium oxide as a by-product from a single underground shaft system to a depth of 2,600 metres.
Kopanang almost exclusively exploits the Vaal Reef, although minor amounts of gold are also extracted from the secondary Crystalkop Reef. Given the geologically complex orebody, scattered mining is used.
Vaal River – Moab Khotsong
Description
Moab Khotsong is an underground mine that started operations in 2003 and is AGA’s newest gold mine in South Africa. It is situated near Orkney, Klerksdorp and Viljoenskroon, about 180 kilometres southwest of Johannesburg. Given the geological complexity of the Vaal Reef, scattered mining is employed. Great Noligwa mine was merged with Moab Khotsong in 2014 and operations are now collectively referred to as Moab Khotsong. Great Noligwa commenced production in 1968.
Surface Operations
Surface Operations consists of Hard Rock Surface Sources and Mine Waste Solutions (MWS).
Low grade stockpiles
Description
The Vaal River and West Wits operations extract gold from various low grade stockpiles where there is more metallurgical capacity than reef mined. Uranium is produced as a by-product at Vaal River South Uranium Plant. In addition, backfill product is produced and used as support in mining operations. The Hard Rock Surface Sources includes the rail transport infrastructure, the Vaal River and West Wits Laboratories and tailings management facilities.
Mine Waste Solutions (MWS)
Description
MWS is a gold and uranium tailings recovery operation located in the western portion of the Witwatersrand Basin, some 160 kilometres from Johannesburg, approximately eight 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 are made up of deposits from three gold and uranium mines that operated for 50 years.
The tailings dams are scattered over an area that stretches approximately 13.5 kilometres north to south and 14 kilometres east to west. The footprints of the 14 tailings dams cover an area of approximately 1,100 hectares.
The MWS gold plants have the capacity to treat tailings of 1.93 million tonnes per month. The uranium plant has a design capacity of 100,000 tonnes per month. The uranium plant was commissioned in the fourth quarter of 2014.
The tailings dams are comprised of tailings material which originated from the processing of underground 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 generally fine.
West Wits operations
Description
The West Wits operations, Mponeng and TauTona, are situated southwest of Johannesburg, on the border between Gauteng and North West Province. From 1 January 2013 the Savuka mine was incorporated into the TauTona mine to access Savuka’s remaining Ore Reserve via TauTona’s infrastructure and Savuka and TauTona operate as a single mine.
AngloGold Ashanti holds a number of mining rights in the Vaal River Operation which have been successfully converted, executed and registered as new order mining rights at the Mineral and Petroleum Resources Titles Office (MPRTO).
Geology
Two reef horizons are exploited at the West Wits operations, the VCR located at the top of the Central Rand Group and the CLR near the base. The separation between the two reefs increases from east to west from 400 to 900 metres, due to the VCR unconformity. TauTona exploits both reefs, whereas Mponeng only mines the VCR. Faults of greater than 70 metres are rare. The CLR consists of one or more conglomerate units and varies from several centimetres to more than three metres 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 centimetres to more than three metres in thickness.
West Wits – Mponeng
Description
Mponeng, in operation since 1986, is located between the towns of Carletonville and Fochville on the border between Gauteng and the North West Province, southwest of Johannesburg. The underground operation, the world’s deepest mine, extracts the VCR at depths between 2,800 metres and 3,400 metres through sequential-grid mining. In the future, the mining of the CLR from Mponeng will steadily increase. The Mponeng lease area is constrained to the north by the TauTona mine, to the east by Sibanye’s Driefontein mine and to the west by Harmony’s Kusasalethu mine. Mponeng comprises a twin-shaft system housing two surface shafts and two sub-shafts. Ore is treated and smelted at the mine’s gold plant. The plant has a monthly capacity of 170,000 tonnes.
West Wits – TauTona
Description
TauTona, in operation since 1961, lies on the West Wits Line, just south of Carletonville in Gauteng, about 70 kilometres southwest of Johannesburg. Underground mining takes place at depths of between 2,000 metres and 3,640 metres. The mine has a three shaft system, supported by secondary and tertiary shafts and employs mainly sequential grid mining method to mine the CLR. Savuka, which is adjacent to and shared a processing plant with TauTona, was incorporated into TauTona following a study in 2012 that concluded that the optimal, most efficient means of accessing Savuka’s remaining Mineral Resource would be through TauTona’s infrastructure. The merging of Savuka into TauTona early in 2013 was determined as the most efficient way of mining the remainder of Savuka’s lower grade Ore Reserve, while minimising operational and infrastructure maintenance costs. A link between the two mines reduces dependency on a single infrastructure system, including ore passes.
The TauTona and Mponeng reef material is processed through the Mponeng Gold Plant.
The Savuka Gold Plant has a monthly capacity of 165,000 tonnes, processing mainly material from the Mponeng low grade stockpile.
CONTINENTAL AFRICA
GHANA - Summary of metallurgical operations
Obuasi | Iduapriem | |||||||||||||||
Sulphide Treatment Plant | Tailings Treatment Plant | Alternate Ore Treatment Plant | Iduapriem Plant | |||||||||||||
Capacity (000 tonnes/month) | 195 | 180 | 120 | 392 |
Ghana – Iduapriem
Description
Iduapriem, wholly owned by AngloGold Ashanti since September 2007, comprises the Iduapriem and Teberebie properties on a 105km2 concession. The mine, which began operations in 1992, is situated in the western region of Ghana, some 85 kilometres north of the coastal city of Takoradi and eight kilometres southwest of Tarkwa.
Iduapriem is an open-pit mine and its processing facilities include a Carbon-in-pulp (CIP) plant.
Geology
The Iduapriem and Teberebie properties are located along the southern end of the Tarkwa basin. The mineralisation 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.
Ghana – Obuasi
Description
Obuasi, wholly owned by AngloGold Ashanti since 2004 and currently in a limited operating phase, is located in the Ashanti Region of Ghana, some 320 kilometres north-west of the capital Accra and approximately 60 kilometres south of Kumasi. Mining operations are primarily underground, to a depth of 1.5 kilometres. Obuasi originally opened in 1897.
Geology
The gold deposits at Obuasi are part of a prominent gold belt of Proterozoic (Birimian) volcano-sedimentary and igneous formations which extend for a distance of approximately 300 kilometres in a north-east/south-west trend insouth-western Ghana. Obuasi mineralisation is shear-zone related and there are three main structural trends hosting gold mineralisation: the Obuasi trend, the Gyabunsu trend and the Binsere trend.
Two main ore types are mined:
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 coarse-grained and occasionally visible to the naked eye. This ore type is generally non-refractory; and
sulphide ore which is characterised by the inclusion of gold in the crystal structure of a sulphide material. The gold in these ores is fine-grained and often locked in arsenopyrite. Higher gold grades tend to be associated with finer grained arsenopyrite crystals. Other prominent minerals include quartz, chlorite and sericite. Sulphide ore is generally refractory.
Power is supplied to the mines by the Volta River Authority and the transmission is done by the GridCo Company.
GUINEA
Description
Siguiri, a multiple open-pit oxide gold mine which opened in 1997, is AngloGold Ashanti’s sole operation in the Republic of Guinea. It is located in the district of Siguiri. The mine is located approximately 520 kilometres north-northeast of Conakry, 25 kilometres northwest of the town of Siguiri and 190 kilometres southeast of the Malian capital Bamako, near the Mali boarder. Conventional mining activities are performed by contractors in multiple open pits using conventional techniques. On surface, Siguiri’s gold processing plant treats about 998,000 tonnes per month. Power to the mine is self-generated.
AngloGold Ashanti holds an 85 percent interest in Siguiri and the balance of 15 percent is held by the government of Guinea.
Geology
This concession is dominated by Proterozoic Birimian rocks which consist of turbidite facies sedimentary sequences. The two main types of gold deposits which occur in the Siguiri basin and are mined are:
laterite mineralisation (CAP) which occurs as surficial aprons of colluvium or aspalaeo-channels of alluvial lateritic gravel adjacent to, and immediately above in-situ deposits; 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 mineralised rocks have been deeply weathered to below 100 metres in places to form saprolite mineralisation (SAP). With the percentage of available CAP ore decreasing, a CIP plant is used to treat predominantly SAP ore. A feasibility study to consider the exploitation of the fresh rock material was completed in December 2015. The project will upgrade the current plant and enable processing of a combination of oxides and fresh rock material. The plant throughput will remain at 12 Mtpa with a flexible design allowing up to 6Mtpa hard material to be processed. Targeted fresh rock pits include Kami, Bidini, Tubani, Sintroko, Seguelen and Sokuno. The feasibility study has been conditionally approved by AngloGold Ashanti subject to the successful negotiations with the Government of Guinea of the Convention de Base and access to the required areas.
MALI
AngloGold Ashanti has interests in three operations in Mali, namely, Sadiola, Yatela and Morila. It manages two of these operations, Sadiola and Yatela.
Mali – Morila
Description
AngloGold Ashanti has an effective 40 percent stake in Morila, as does Randgold Resources Limited (which manages the mine). The state of Mali owns the remaining 20 percent.
The Morila mine has operated since 2001 and is situated 280 kilometres southeast of Bamako, the capital of Mali. The operation treats low-grade stockpiles while the plant, which incorporates a conventional CIL process with an upfront gravity section to extract the free gold, has annual throughput capacity of 3.7 million tonnes. Since mining was concluded in 2009 with the depletion of the orebody, operations at Morila currently involve processing of the tailings which stood at 6.19 million tonnes (mineralised waste) as at year-end. Power is supplied by a subcontractor.
Geology
The Morila deposit is hosted in a flat lying fold structure which rises sharply to surface in the south and west. The deposit occurs within a sequence Birimian metal-arkoses of amphibolite metamorphic grade. Mineralisation is characterised by silica-feldspar alteration and sulphide mineralisation consists of arsenopyrite, pyrrhotite, pyrite and chalcopyrite.
Mali – Sadiola
Description
The Sadiola mine is situated in western Mali, 77 kilometres to the south of the regional capital of Kayes and about 440 kilometres north-west of the capital city of Bamako.The mine is a joint venture between AngloGold Ashanti (41 percent) and IAMGOLD (41 percent) and the government of Mali (18 percent). The Sadiola gold deposit is mined by the Société d’Exploitation des Mines d’Or de Sadiola S.A. (SEMOS) since 1996. Mining reduced considerably to adapt to the 2014 gold price decrease but continued predominantly in various satellite pits. On-site surface infrastructure includes a 4.9 million tonnes per annum CIP gold plant where the ore is eluted and smelted. Power to the Sadiola mine is self-generated.
Geology
The Sadiola deposit occurs within an inlier of greenschist facies metamorphosed Birimian rocks known as the Kenieba Window. The specific rocks which host the mineralisation are marbles and greywackes which have been intensely weathered to a maximum depth of 200 metres. 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 mineralisation, mainly with the marble where the porosity was greatest. The Sadiola Hill deposit generally consists of two zones, an upper oxidised cap and an underlying sulphide zone. From 1996 until 2010, oxide and transitional ore from the Sadiola Hill pit was the primary ore source for the mine while being increasingly supplemented from the outlying satellite pits during the latter years. From 2011 when the Sadiola Main pit was mined out, the satellite pits became the dominant source of oxide and transitional ore.
Mali – Yatela
Description
Yatela, operational since 2001, is 80 percent owned by the Sadiola Exploration Company Limited, a joint venture between AngloGold Ashanti and IAMGOLD, giving each a 40 percent stake in Yatela. The balance of 20 percent is owned by the state of Mali.
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 regional capital Kayes. Ore extraction ceased in September 2013 and processing of the stockpiles and heap leach pads is expected to continue until the end of 2016. The main activity at Yatela is the implementation of the closure plan in order to relinquish the property. Power to the Yatela operation is self-generated.
Geology
Yatela mineralisation occurs as a keel-shaped body in Birimian metacarbonates. The ‘keel’ is centered on a fault which was the feeder for the original mesothermal mineralisation, with an associated weakly mineralised diorite intrusion. Mineralisation 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.
TANZANIA
Tanzania – Geita
Description
The Geita gold mine is located in the Lake Victoria goldfields of the Mwanza region of Tanzania, about 120 kilometres west of Mwanza and four kilometres away from the town of Geita. It has been in operation since 1996.
The Geita gold mine is a multiple open pit operation with underground potential and is currently serviced by a 5.1 million tonnes per annum CIL processing plant. Power to the mine is self-generated.
Geology
Geita is a multi- open pit operation with the dominant ore sources being from the Nyankanga and Geita Hill pits. Historically, other pits such as Star and Comet, Matandani and Kukuluma have also contributed to the ore feed. The terrain is Archaean in age and generally characterised by Greenschist metamorphism, although amphibolitic metamorphism occurs in places. Ore zones are usually associated with Banded Iron Formation (BIF) or other iron rich rocks and typically when they are in contact with intrusive rocks such as diorites. These contacts have been deformed and act as fluid pathways for the mineralising fluids. Gold mineralisation is associated with alteration that includes sulphides such as pyrite and arsenopyrite, whilst other minerals such as hematite, magnetite, quartz, calcite, dolomite, biotite and chlorite also occur.
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 SA UNISARL (SOKIMO), a state-owned gold company owning the balance. Randgold Resources is the operator and project manager.
Kibali is located in the north-eastern part of the DRC near the international borders with Uganda and Sudan. The mine is located adjacent to the village of Doko, which is located in the west of the project area. Kibali is approximately 210 kilometres by road from Arua, on the Ugandan border and immediately north of the district capital of Watsa. The operations area falls within the administrative district of Haut Uélé in Orientale Province. Power to the mine is self-generated. Gold production began in the fourth quarter of 2013.
The Kibali Gold Mine has a processing operation capable of producing an average of 600koz of gold per annum by treating 7.2Mtpa throughput. The processing plant has a capability of process oxide and sulphide material. Once the project is completed, the mine is expected to 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 oxide circuit was commissioned. During 2014 the oxide plant was successfully ramped up. The sulphide circuit has been commissioned and ramped during the second quarter of 2014.
On the mining front, the development of the decline system continued. Blasting of the first stope took place in quarter four, hence the commencement of underground mining. On the vertical shaft, the final shaft depth at the end of December was 751.2 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 greenschist facies.
The combined Karagba, Chauffeur and Durba (KCD) deposit is host to the majority of the currently defined Mineral Resource and Ore Reserve, as well as the current open pit and underground mining operations. KCD is hosted within a mineralised corridor that also hosts the Sessenge, Gorumbwa and Pakaka deposits and a number of exploration prospects.
The known deposits of the Kibali 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 sequence of coarse volcaniclastic and sedimentary rocks. The mineralisation is generally stratigraphically bound and associated with carbonate-silica-albite alteration with minor sulphide.
AUSTRALASIA
AUSTRALIA
Australia – Sunrise Dam
Description
Sunrise Dam, which is wholly-owned, is located 220 kilometres northeast of Kalgoorlie and 55 kilometres south of Laverton in Western Australia. Mining of the Crown Pillar at the base of the 490m deep pit was completed in early 2014. Underground mining, which is conducted by a contract mining company, is the primary source of ore, with supplementary mill feed provided by stockpiles. Ore is treated via conventional gravity and carbon-in-leach (CIL) processing plant, with a nameplate capacity of 2.5Mt per annum, which is owner-managed.
Open pit production began in 1997 and has now been completed at a final depth of 500m below surface. Underground mining commenced in 2003 with a number of different mining methods being applied, depending on the style of mineralisation and grade of the geological domain.
Power at Sunrise Dam is self-generated and the mine uses natural gas supplied by APA Operations (Pty) Limited.
Geology
Gold ore at Sunrise Dam is structurally and lithologically controlled within gently dipping high strain shear zones and steeply dipping brittle-ductile low strain shear zones. Host rocks include andesitic volcanic rocks, volcanogenic sediments and magnetic shales.
Australia - Tropicana
Description
Tropicana, a joint venture between AngloGold Ashanti (70% and manager) and Independence Group NL (30%), is located 200 kilometres east of Sunrise Dam and 330 kilometres east-northeast of Kalgoorlie. First gold was poured ahead of schedule and on budget in September 2013, following development approval in November 2010. The open pit operation features a large scale, modern processing plant which uses conventional carbon-in-leach technology and includes high-pressure grinding rolls for energy-efficient comminution. Mining is carried out by a contract mining company and the plant, with a nameplate capacity of 5.8Mt per annum, is owner-managed.
The mine is a fly-in fly-out operation, with a mine site village and aviation services operated from Perth and Kalgoorlie. A 220 kilometres private road and the public road network provide access for the delivery of supplies to the operation.
The Tropicana JV includes approximately 2,863km2 of tenure in the prospective Tropicana belt, with active exploration programmes seeking both satellite extensions to the Tropicana Gold Mine and discoveries with standalone potential.
Power is supplied to the mine by on site gas and diesel power stations, natural gas is supplied by APA Operations (Pty) Limited.
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 preferred host unit within the gneissic package. Post mineralisation faulting has separated the once continuous ore zone, with the open pits developed on each of the fault bounded blocks.
THE AMERICAS
ARGENTINA
Argentina – Cerro Vanguardia
Description
AngloGold Ashanti has a 92.5 percent interest in Cerro Vanguardia with Fomicruz 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. Shallow underground mining began in 2010 to access high-grade material and accounts for about 23 percent of the mine’s production. The heap leaching operation started in 2012. The orebodies comprise a series of hydrothermal vein deposits containing gold and large quantities of silver, which is mined as a by-product. Ore is processed at the metallurgical plant which has a capacity of 3,150 tonnes per day and includes a cyanide recovery facility. Power for the mine is self-generated but operated by an external contractor. The mine has been operated by AngloGold Ashanti since 1998.
Geology
The oldest rocks in this part of Patagonia are metamorphics of the Precambrian-Cambrian age. These are overlain by Permian and Triassic continental clastic rocks which have been faulted into a series of horsts and grabens and are associated with both limited basaltic sills and dykes and with calc-alkaline granite and granodiorite intrusions. Thick andesite flows of Lower Jurassic age occur above these sedimentary units. A large volume of rhyolitic ignimbrites was emplaced during the Middle and Upper Jurassic age over an area of approximately 100,000 square kilometres. These volcanic rocks include the Chon Aike formation ignimbrite units that host the gold bearing veins at Cerro Vanguardia. Post-mineral units include Cretaceous and Tertiary rocks of both marine and continental origin, the Quaternary La Avenida formation, the Patagonia gravel and the overlying La Angelita basalt flows. These flows do not cover the area of the Cerro Vanguardia veins.
Gold and silver mineralisation at Cerro Vanguardia occurs within a vertical range of about 150 metres to 200 metres 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. 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 oxidised to limonite. The veins show sharp contacts with the surrounding ignimbrite which hosts narrow stockwork zones that are weakly mineralised and appear to have been cut by a sequence of north-east-trending faults that have southerly movement with no appreciable lateral displacement.
BRAZIL
Brazil – AngloGold Ashanti Córrego do Sítio Mineração (AGA Mineração)
Description
AngloGold Ashanti Córrego do Sítio Mineração (AGA Mineração) comprises two operational units, namely the Cuiabá and the Córrego do Sítio complexes.
The Cuiabá complex includes the Cuiabá and Lamego mines and the Cuiabá and Queiroz plants. In operation for 28 years,The Cuiabá and Lamego mines are located near Sabará, southeast and east respectively of the city of Belo Horizonte, the capital of Minas Gerais State, in the southeast of Brazil. The Cuiabá mine is a mix of sublevel benchcut-and-fill and cut-and-fill minelong hole stoping accessed by ramp and shaft. Lamego is a new mine developed to mine an underground sulphide ore. The first stage of the processing of the ore from Cuiabá and Lamego mines is in the gold plant at the Cuiabá complex, where concentrate is produced. The material is then transported 15 kilometres by aerial ropeway to the Queiroz plant where milling, flotation, roasting, leaching, precipitation and refining occur. Total capacity of the complete circuit is 1.7 million tonnes per year and recoveries of 93 percent are achieved. Power for the mine is both self-generated and supplied by Cemig a state owned company. The CuiabaCuiabá mine became operational in 1988 and the Lamego mine in 2009. However some of the older mines which are now closed have been operating since 1834.
The Córrego do Sítio operation(CdS) is located in the Municipality of Santa Bárbara, 60 kilometres east of the city of Belo Horizonte, the capital of Minas Gerais state. The southern portion of this mining complex is referred to as CdS I while the northern portion (formerly known as São Bento) has been renamed CdS II. CdS comprises one surface (oxide) and two sub-level stoping underground (sulphide) mines, as well as a heap leach pad and sulphide plant, the latter originally acquired from Eldorado late in 2008 was refurbished and brought into operation in January 2012. There are two metallurgical plants in CdS: the heap-leach plant for the oxide ore and the sulphide plant. The sulphide process consists of crushing, grinding and gravity concentration, flotation, thickening, acidulation, pressure oxidation (POX autoclave), CCD (counter current decantation), CIL extraction, elution, neutralisation, electro winning and tailings disposal. The plant and POX circuit have a capacity as of 600ktpy. The heap-leaching process consists of crushing, agglomeration, stacking, leaching, adsorption, elution and electro winning. Power is supplied to CdS by Cemig a state owned company.
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 mineralisation 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 mineralisation associated with sulphides and quartz veins in Banded Ironstone Formation (BIF) and
volcanic sequences. At this mine, structural control and fluids flow ascension are the most important factors for gold mineralisation with a common association between large-scale shear zones and their associated structures. Where BIF is mineralised the ore appears strongly stratiform due to the selective sulphidation of the iron rich layers. Steeply plunging shear zones tend to control the ore shoots, which commonly plunge parallel to intersections between the shears and other structures.
The controlling mineralisation 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). Mineralisation is due to the interaction of low salinity carbon dioxide rich fluids with the high-iron BIF, basalts and carbonaceous graphitic schists. Sulphide 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 mineralisation. Wallrock alteration is typically carbonate, potassic and silicic.
Brazil – Summary of metallurgical operations
Corrego do Sitio | Corrego do Sito | AngloGold Ashanti Mineração | Serra Grade | |||||||||||||||||
Oxide | Sulphide | Cuiaba | Raposos | |||||||||||||||||
Capacity (000 tonnes/month) | 38 | 50 | 143 | 28 | 107 |
Corrego do Sitio | Corrego do Sito | AngloGold Ashanti Mineração | Serra Grande | |||||||||||||||||
Oxide | Sulphide | Cuiaba | Raposos | |||||||||||||||||
Capacity (000 tonnes/month) | 38 | 50 | 147 | 28 | 108 |
Brazil – Serra Grande (100 percent effective 1 July 2012, previously 50 percent)
Description
Serra Grande is located in central Brazil, in the state of Goiás, about 5 kilometresfive kilometers from the city of Crixás. Serra Grande comprises three mechanised underground mines: Mina III (which includes orebody IV), Mina Nova (which includes the Pequizão orebody) and Palmeiras – and an open pit onin the outcrop of Mina III orebody.orebodies. A gold bearing quartz vein was identified just beneath Pequizão Orebody and a new decline is being developed from Mina III (orebody IV) to access and expose this new orebody named Ingá, which contains high grade ore. One dedicated metallurgical plant treats ore from these different sources. AnnualThe annual capacity of the processing circuit, which has grinding, leaching, filtration, precipitation and smelting facilities, is 1.281.3 million tonnes. PowerThe power for the mine is supplied and purchased onin the open market. The mine became operational in 1989 and has been operated by AngloGold Ashanti since 1999.
Geology
The gold ore deposits are located in the Rio Vermelho and Ribeirão das AntesAntas Formations of the Archaean Pilar de Goia’s Group which account 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, meta volcanics and carbonatesdolomites occurring in a typical greenstone belt structural setting. The host rocks are of the Pilar de Goiás Group of the Upper Archaean. Gold mineralisation is associated with massive sulphides and vein quartz material associated with graphiticcarbonaceous and sericitic schists and dolomites. The oreshoots plunge to the north-west with dips ofdipping between 6six and 35 degrees. The stratigraphy is overturned and thruststhrusted towards the east.east, being recognized different shear thrust structures that are stacked and controls the mineralisation, behaving as frontal and lateral ramps and horses.
The greenstone belt lithologies are surrounded by Archaean tonalitic gneiss and granodiorite.granodiorites of TTG suite. The metamorphosedmetamorphic sediments are primarily composed of quartz, chlorite, sericite, graphiticcarbonaceous material and garnetiferous schists. The carbonates have been metamorphosed to ferroan dolomite marble with development of siderite and ankerite veining in the surrounding wallrock, usually associated with quartz veining.veins. The basalts are relatively unaltered but do show pronounced stretching with elongation of pillow structures being evident.
The Crixás greenstone belt comprises a series of Archaean to Palaeoproterozoic metavulcanics, metasediments and basement granitoids stacked within a series of north to north-east transported thrust sheet. Thrusting (D1) was accompanied by significant F1 folding/foliation development and progressive alteration in a brittle-ductile regime. D1 thrusting was developed with irregular thrust ramp geometry, in part controlled by concealed early basin faults. The main Crixás orebodies are adjacent to a majornorth-north-westnorth-northwest 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-eastnorthwest-southeast 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 mineralisation within the belt. The D1 thrust stack was gently folded bynon-cylindrical folds. Gold mineralising fluids probably migrated during this event, with similarsouth-south-west tonorth-north-east migration, and focusing on bedding slip during folding. Gold mineralisation 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 Probable Ore Reserve of the group amounted to 67.951.7 million ounces as at 31 December 2013.2015.
Ore Reserve estimates are reported in accordance with the requirements of the SEC’s Industry Guide 7. Accordingly, as of the date of reporting, all Ore Reserves are planned to be mined out under the life-of-mine plans within the period of AngloGold Ashanti’s existing rights to mine, or within the renewal periods of AngloGold Ashanti’s rights to mine. In addition, as of the date of reporting, all Ore Reserves are covered by required mining permits. See “Item 4B.: Business overview – The regulatory environment enabling AngloGold Ashanti to mine”.permits or there is a high probability that these approvals will be secured.
AngloGold Ashanti has standard procedures for the estimation of Ore 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 mineralisedmineralized material at a mining operation. This mineralisedmineralized material is not necessarily economically 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-tonnage curves specific for each of the deposits, in conjunction with parameters such as the cost structure; yield;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 mineralisedmineralized 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 criteria and practical limitations of access and timing. If the review process is positive then the mineralisedmineralized material (with 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 ore body using estimated values for gold price, operating costs and metallurgical recoveries. An optimisation process is then applied to determine the combination of blocks within the model that make a positive contribution under these 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 Reserve. These blocks are scheduled with consideration being given to practical mining considerationsconstraints and limitations. Scheduled ore blocks that are classified as Proven or Probable constitute the Ore Reserve.
The gold price and exchange rate used for determining the 20132015 and 20122014 Ore Reserve are outlined in the following table.
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 |
The Ore Reserve has been determined using the company’s business plan assumptions - a gold price of $1,100 per ounce and a South African rand exchange rate of ZAR10.19 to the US dollar, which translates to a South African rand gold price of ZAR11,582 per ounce.
2015 (3 year average) | 2015 (Business Plan) | 2014 (3 year average) |
Units | |||||||||||||
Ore Reserve Gold Price | 1,278 | 1,100 | 1,448 | US$ per ounce |
As in prior years, the Ore Reserve determined from the planning process was 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 Reserve. This did not result in any changes. The resultant SEC compliant Proven and Probable Ore Reserve is shown in the following pages.
In Australia and South Africa, AngloGold Ashanti is legally required to publicly report Ore Reserve and Mineral Resource according to the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2012 edition) and the South African Code for Reporting of Exploration Results, Mineral Resources and Mineral Reserves (The SAMREC Code, 2007 edition and amended July 2009). The SEC’s Industry Guide 7 does not recogniserecognize Mineral Resources. Accordingly, AngloGold Ashanti does not report estimates of Mineral Resource in this annual report on Form 20-F.
The AngloGold Ashanti Ore Reserve decreased from 74.1Moz in57.5Moz as at 31 December 20122014 to 67.9Moz in51.7Moz as at 31 December 2013.2015. This gross annual decrease of 6.2Moz5.8Moz includes depletion of 5.0Moz. The balance4.3Moz and the sale of 1.2Moz reductionsCC&V (3.7Moz), which were partly offset by 2.2Moz of additions in Ore Reserve resultedresulting from changes in economic assumptions between 20122014 and 2013 which resulted in a reduction of 3.4Moz to the Ore Reserve, while exploration and modelling changes resulted in an increase of 2.2Moz. A gold price of $1,100 per ounce (ZAR11,582 per ounce) was used for Ore Reserve estimates (2012: $1,300 per ounce, ZAR9,324 per ounce).2015.
The principal changes in AngloGold Ashanti’s Ore Reserves as at 31 December 2013,2015, compared with those published as at 31 December 20122014, are as follows:
Ore Reserve as at 31 December | ||||||
Disposal – CC&V | -3.7 | |||||
Sub Total | 53.8 | |||||
Depletion | -4.3 | |||||
Sub Total | 49.5 | |||||
Additions | ||||||
Iduapriem | Exploration success and mine optimisation as well as the addition of new areas such as the spent heap leach and Block 5 | 0.8 | ||||
Obuasi | Updated Feasibility study and introduction of a revised mining method for narrow lodes and inclusion of Cote D’or | 0.5 | ||||
Other | Additions less than 0.3Moz | 1.4 | ||||
Sub Total | 52.2 | |||||
Reductions | ||||||
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Ore Reserve as at 31 December |
AngloGold Ashanti strives to actively create value by growing its major asset – the Ore Reserve. This drive is based on a well-defined brownfields and greenfields exploration programme, innovation in both geological modeling and mine planning and optimisation of its asset portfolio.
The Ore Reserve estimates in this document include the Ore Reserve below the current infrastructure of underground mines. These include mines in the case of certain South African, BrazilianAfrica, Ghana, DRC and Ghanaian underground mines which are in production.Brazil.
By-products
Several by-products are recovered as a result of the processingexploitation of gold Ore Reserve. TheseThe by-product Ore Reserves include 127.64118.38 million pounds (57.9 thousand tonnes) of uranium oxide from the South African operations, 0.420.32 million tons (0.38 million tonnes) of sulphur from Brazil and 29.5826.0 million ounces (920 tonnes) of silver from Argentina. Details of the by-product Ore Reserve are given in the Mineral Resource and Ore Reserve Report 2013, which is available on the corporate website.
External reviews of Mineral Resource and Ore Reserve Statement
During the course of 2013,2015, the following AngloGold Ashanti operations were subjected to external reviews in line with the policy that each operation / project will be reviewed by an independent third party on average once every three years:
Mineral Resource and Ore Reserve at Kopanang and Great Noligwa MinesTropicana
Mineral Resource and Ore Reserve at TauTona MineAGA Mineraçáo Cuiabá and Lamego
Mineral Resource and Ore Reserve at Kibali MineGeita
Mineral Resource and Ore Reserve at Siguiri
The company has been informed that the external reviews identified no material shortcomings in the process by which AngloGold Ashanti’sof evaluation of the grade models were evaluated.and estimation of the Ore Reserves. The external reviews were conducted by the following companies AMEC (Kopanang, Great Noligwacompanies: Golder Associates (Tropicana), Optiro (AGA Mineraçáo Cuiabá and TauTona)Lamego, Geita and Snowden (Kibali Mine)Siguiri).
Competent Persons
The information in this report relating Ore Reserves is based on information compiled by or under the supervision of the Competent Persons as defined in the JORC or SAMREC Codes. All Competent Persons are employed by AngloGold Ashanti, unless stated otherwise, and have sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking. The Competent Persons consent to the inclusion of Ore Reserve information in this report, in the form and context in which it appears. Details of the Competent Persons per operation are given in the Mineral Resource and Ore Reserve Report 2015, which is available on the corporate website. The legal tenure of each operation and project has been verified to the satisfaction of the accountable Competent Person and all Ore Reserves have been confirmed to be covered by the required mining permits or there is a high probability that these permits will be issued.
During the pastOver more than a decade, the company has developed and implemented a rigorous system of internal and external reviews aimed at providing assurance in respect of Ore 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) (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 Reserve: Imperial | At 31 December 2013 | At 31 December 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proven Ore Reserve(1)(2) | Probable Ore Reserve(1)(2) | Metallurgical | Proven Ore Reserve (1) (2) | Probable Ore Reserve (1) (2) | Metallurgical | Cut-off | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gold | Gold | Recovery | Tons(5) | Grade | Gold Content (1) | Tons(5) | Grade | Gold Content (1) | Recovery Factor | Grade (13) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Tons(5) | Grade Content (1) | Tons(5) | Grade Content (1) | Factor | (million) | (oz/ton) | (Moz) | (million) | (oz/ton) | (Moz) | percent | (oz/ton) | ||||||||||||||||||||||||||||||||||||||||||||||||
(million) | (oz/ton) | (Moz)) | (million) | (oz/ton) | (Moz) | percent |
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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 | 1.90 | 0.187 | 0.35 | 2.01 | 0.200 | 0.40 | 95.3-95.5 (4) | 0.278 | |||||||||||||||||||||||||||||||||||||||||||||
Moab Khotsong(2) | 1.37 | 0.331 | 0.45 | 19.62 | 0.289 | 5.67 | 95.1-96.0(4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Moab Khotsong (2) (10) | 2.82 | 0.238 | 0.67 | 15.79 | 0.291 | 4.59 | 96.0-96.3 (4) | 0.120-0.177 (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
West Wits | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mponeng(2) | 3.08 | 0.255 | 0.79 | 46.98 | 0.293 | 13.78 | 97.9-98.4(4) | 1.89 | 0.233 | 0.44 | 42.20 | 0.291 | 12.30 | 97.6-98.2(4) | 0.122-0.208 (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 | 0.74 | 0.287 | 0.21 | 3.82 | 0.220 | 0.84 | 97.0-97.3(4) | 0.228-0.232 (4) | |||||||||||||||||||||||||||||||||||||||||||||
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Surface sources(6)(11) | 157.00 | 0.006 | 1.00 | 730.25 | 0.008 | 5.89 | 57.6-90(4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Surface sources(6) (11) | 129.5 | 0.006 | 0.79 | 705.90 | 0.008 | 5.54 | 40.0-92.0 (4) | 0.006-0.015 (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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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) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Kibali (45 percent) (2) (3) | 2.01 | 0.053 | 0.11 | 37.61 | 0.124 | 4.66 | 84.5-88.9(9) | 0.044-0.073 (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Ghana | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Iduapriem | 15.04 | 0.032 | 0.47 | 30.40 | 0.049 | 1.50 | 95.0 | 3.68 | 0.023 | 0.09 | 54.28 | 0.040 | 2.18 | 94.5 | 0.024-0.027 (4) | |||||||||||||||||||||||||||||||||||||||||||||
Obuasi(2) | 19.94 | 0.175 | 3.50 | 28.41 | 0.163 | 4.64 | 85.4 | 0.00 | 0.000 | 0.00 | 21.55 | 0.267 | 5.74 | 86.9 | 0.128-0.146 (4) | |||||||||||||||||||||||||||||||||||||||||||||
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Guinea | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Siguiri (85 percent)(3) | 37.17 | 0.018 | 0.68 | 57.88 | 0.020 | 1.17 | 88.0-90.0(4) | 29.99 | 0.018 | 0.53 | 66.43 | 0.023 | 1.56 | 88.0-93.0(4) | 0.012-0.021 (4) | |||||||||||||||||||||||||||||||||||||||||||||
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Mali | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Morila (40 percent)(3) | 0.00 | 0.000 | 0.00 | 0.63 | 0.070 | 0.04 | 88.8-91.0(4) | 0.00 | 0.000 | 0.00 | 6.82 | 0.016 | 0.11 | 57.0-91.0(4) | 0.014-0.027 (4) | |||||||||||||||||||||||||||||||||||||||||||||
Sadiola (41 percent)(3) | 0.00 | 0.000 | 0.00 | 25.49 | 0.056 | 1.43 | 76.0-94.0(4) | 0.00 | 0.000 | 0.00 | 27.90 | 0.060 | 1.69 | 75.0-96.0(4) | 0.025-0.032 (4) | |||||||||||||||||||||||||||||||||||||||||||||
Yatela (40 percent)(3) (10) | 0.00 | 0.000 | 0.00 | 0.00 | 0.000 | 0.00 | 0.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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Namibia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Navachab* | 0.00 | 0.000 | 0.00 | 51.08 | 0.038 | 1.92 | 88.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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Tanzania | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Geita | 0.00 | 0.000 | 0.00 | 40.70 | 0.096 | 3.90 | 46.2-100.0 (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Geita(14) | 0.00 | 0.000 | 0.00 | 26.71 | 0.097 | 2.60 | 89.3-92.7(4) | 0.029-0.048 (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Australasia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sunrise Dam | 16.47 | 0.032 | 0.54 | 6.83 | 0.094 | 0.64 | 85.5 | 14.12 | 0.030 | 0.43 | 9.64 | 0.086 | 0.82 | 80.6 | 0.032 | |||||||||||||||||||||||||||||||||||||||||||||
Tropicana (70 percent)(3) | 19.21 | 0.066 | 1.27 | 23.10 | 0.059 | 1.36 | 90.0 | 14.48 | 0.049 | 0.71 | 19.50 | 0.058 | 1.13 | 90.3 | 0.015-0.020 (4) | |||||||||||||||||||||||||||||||||||||||||||||
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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) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent)(3) (7) | 8.03 | 0.028 | 0.22 | 8.42 | 0.119 | 1.00 | 61.3-95.4(4) | 0.014-0.131 (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
AGA Mineraçáo(2) (8) | 3.43 | 0.151 | 0.52 | 6.25 | 0.163 | 1.02 | 65.0-93.3(4) | 0.020-0.132 (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Serra Grande(2) | 2.14 | 0.084 | 0.18 | 2.70 | 0.090 | 0.24 | 88.0-94.0 (4) | 0.062 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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United States of America | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cripple Creek & Victor | 134.49 | 0.025 | 3.31 | 66.85 | 0.021 | 1.40 | 43.0-95.0(4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cripple Creek & Victor(12) | 0.00 | 0.000 | 0.00 | 0.00 | 0.000 | 0.00 | 0.0 | 0.000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Total | 431.77 | 0.034 | 14.68 | 1,198.70 | 0.044 | 53.26 | 214.46 | 0.024 | 5.25 | 1,057.55 | 0.044 | 46.42 | ||||||||||||||||||||||||||||||||||||||||||||||||
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(1) | Ore Reserve includes marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining. |
(2) | Proven and/or Probable Ore Reserve includes Ore Reserve below infrastructure. See table that follows. |
(3) | Ore Reserve attributable to AngloGold Ashanti’s percentage interest shown. |
(4) | Recovery factor |
(5) | Tons refers to a short ton, which is equivalent to 2000 pounds avoirdupois. |
(6) | The Vaal Reef Ore Reserve includes |
(7) | The Ore Reserve contains 26.01 million ounces of silver to be recovered as a by-product. |
(8) | The Ore Reserve contains 0.32 million tons of sulphur to be recovered as a by-product. |
(9) | Open pit and underground mining, respectively. |
(10) | Great Noligwa is reported under Moab Khotsong. |
(11) | Includes Mine Waste Solutions (MWS). |
(12) | Operation sold. |
(13) | In-situ cut-off grade. |
(14) | Refractory Stockpile removed from Ore Reserve. |
Rounding may result in computational differences.
The 2015 Proven and Probable Ore Reserve includes Ore Reserve below infrastructure in the case of the following underground mines currently in production:
Mine | Tons (millions) | Grade (ounces/ton) | Gold Content (million ounces) | |||
Moab Khotsong | 11.29 | 0.28 | 3.21 | |||
Mponeng | 29.63 | 0.29 | 8.56 | |||
Kibali | 16.19 | 0.17 | 2.73 | |||
Obuasi | 2.49 | 0.63 | 1.57 | |||
AGA Mineração | 1.79 | 0.16 | 0.29 | |||
Serra Grande | 0.78 | 0.12 | 0.09 | |||
Total | 62.18 | 0.26 | 16.45 |
The Ore Reserve has been determined based on completed economic studies.
South Africa Vaal River(6) Great Noligwa(10) Kopanang Moab Khotsong (2) West Wits Mponeng(2) TauTona Surface Surface sources(6) (11) Continental Africa DemocraticRepublic of the Congo Kibali (45 percent) (2) (3) Ghana Iduapriem Obuasi(2) Guinea Siguiri (85 percent)(3) Mali Morila (40 percent)(3) Sadiola (41 percent)(3) Namibia Navachab(12) Tanzania Geita Australasia Australia Sunrise Dam Tropicana (70 percent)(3) Americas Argentina Cerro Vanguardia (92.5 percent)(3) (7) Brazil AGA Mineraçáo(2) (8) Serra Grande(2) United States of America Cripple Creek & Victor(12) Total Ore Reserve: Imperial At 31 December 2014 Proven Ore Reserve (1) (2) Probable Ore Reserve (1) (2) Metallurgical Cut-off Tons(5) Grade Gold
Content (1) Tons(5) Grade Gold
Content (1) Recovery
Factor Grade (13) (million) (oz/ton) (Moz) (million) (oz/ton) (Moz) percent (oz/ton) 0.00 0.000 0.00 0.00 0.000 0.00 0.0 0.000 2.00 0.174 0.35 5.11 0.176 0.90 94.3 0.265-0.277 (4) 2.95 0.268 0.79 15.73 0.298 4.69 95.0-96.0(4) 0.133-0.161 (4) 2.39 0.252 0.60 44.02 0.280 12.33 97.7-98.1(4) 0.122-0.230 (4) 0.51 0.261 0.13 4.59 0.233 1.07 96.9 0.219-0.250 (4) 139.26 0.006 0.86 717.60 0.008 5.73 30.0-88.0 (4) 0.006-0.012 (4) 2.66 0.051 0.14 38.46 0.125 4.80 84.5-88.9(9) 0.044-0.070 (4) 11.23 0.034 0.38 27.10 0.049 1.32 92.0-95.0(4) 0.017-0.022 (4) 8.07 0.147 1.19 18.97 0.216 4.10 41.0-87.0(4) 0.125-0.152 (4) 27.59 0.018 0.49 77.24 0.023 1.75 88.0-93.1(4) 0.012-0.018 (4) 0.00 0.000 0.00 5.43 0.018 0.10 57.0-91.0(4) 0.014-0.027 (4) 0.00 0.000 0.00 25.95 0.061 1.57 75.0-96.0(4) 0.025-0.032 (4) 0.00 0.000 0.00 0.00 0.000 0.00 0.0 0.000 0.00 0.000 0.00 31.54 0.098 3.10 48.1-92.7(4) 0.029-0.069 (4) 15.18 0.031 0.47 8.46 0.096 0.81 80.0-82.5(4) 0.038 15.98 0.056 0.89 22.62 0.059 1.35 89.9 0.020 10.75 0.035 0.37 6.63 0.139 0.92 61.3-95.0(4) 0.014-0.131 (4) 4.90 0.147 0.72 6.89 0.158 1.09 85.0-93.3(4) 0.015-0.128 (4) 3.00 0.080 0.24 2.80 0.092 0.26 92.0-94.0(4) 0.050-0.059 (4) 118.73 0.023 2.72 64.01 0.019 1.24 53.0-83.2 (4) 0.007 365.20 0.028 10.35 1,123.14 0.042 47.12
(1) | Ore Reserve includes marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining. |
(2) | Proven and/or Probable Ore Reserve includes Ore Reserve below infrastructure. See table that follows. |
(3) | Ore Reserve attributable to AngloGold Ashanti’s percentage interest shown. |
(4) | Recovery factor and cut-off grade vary according to ore type. |
(5) | Tons refers to a short ton, which is equivalent to 2000 pounds avoirdupois. |
(6) | The Vaal Reef Ore Reserve includes 122.58 million pounds of Uranium oxide by-products; this cannot be accounted for by individual mine as Kopanang, Moab Khotsong and Surface sources in Vaal River feed to a combination of plants. |
(7) | The Ore Reserve contains 25.06 million ounces of silver to be recovered as a by-product. |
(8) | The Ore Reserve contains 0.35 million tons of sulphur to be recovered as a by-product. |
(9) | Open pit and underground mining, respectively. |
(10) | No Ore Reserve is declared for 2014 – Great Noligwa is reported under Moab Khotsong. |
(11) | Includes Mine Waste Solutions (MWS). |
(12) | Operation sold. |
(13) | In-situ cut-off grade. |
Rounding may result in computational differences.
The 2014 Proven and Probable Ore Reserve includes Ore Reserve below infrastructure in the case of the following underground mines currently in production:
Mine | Tons (millions) | Grade (ounces/ton) | Gold Content (million ounces) | |||
Moab Khotsong | 11.74 | 0.285 | 3.34 | |||
Mponeng | 30.46 | 0.280 | 8.54 | |||
Kibali | 18.65 | 0.169 | 3.15 | |||
Obuasi | 1.75 | 0.631 | 1.11 | |||
AGA Mineração | 3.49 | 0.156 | 0.54 | |||
Serra Grande | 0.71 | 0.098 | 0.07 | |||
Total | 66.81 | 0.251 | 16.75 |
The Ore Reserve has been determined based on completed economic studies.
South Africa Vaal River (5) Kopanang Moab Khotsong (2) (10) West Wits Mponeng (2) TauTona Surface Surface sources (5) (11) Continental Africa DemocraticRepublic of the Congo Kibali (45 percent) (2) (3) Ghana Iduapriem Obuasi (2) Guinea Siguiri (85 percent) (3) Mali Morila (40 percent) (3) Sadiola (41 percent) (3) Tanzania Geita(14) Australasia Australia Sunrise Dam Tropicana (70 percent) (3) Americas Argentina Cerro Vanguardia (92.5 percent) (3) (7) Brazil AGA Mineraçáo (2) (8) Serra Grande (2) United States of America Cripple Creek & Victor (12) Total Ore Reserve: Metric At 31 December 2015 Proven Ore Reserve (1) (2) Probable Ore Reserve (1) (2) Metallurgical Cut-off Tonnes(6) Grade Gold
Content Tonnes (6) Grade Gold
Content Recovery
Factor Grade(13) (million) (g/t) (tonnes) (million) (g/t) (tonnes) percent (g/t) 1.72 6.40 11.02 1.83 6.86 12.52 95.3-95.5 (4) 9.52 2.56 8.17 20.90 14.32 9.96 142.67 96.0-96.3(4) 4.12-6.08 (4) 1.71 7.98 13.66 38.29 9.99 382.53 97.6-98.2(4) 4.17-7.14 (4) 0.67 9.83 6.56 3.47 7.54 26.16 97.0-97.3(4) 7.83-7.96 (4) 117.25 0.21 24.70 640.39 0.27 172.20 40.0-92.0 (4) 0.21-0.51 (4) 1.82 1.83 3.34 34.12 4.25 145.07 84.5-88.9(9) 1.52-2.50 (4) 3.34 0.79 2.65 49.24 1.38 67.81 94.5 0.83-0.92 (4) 0.00 0.00 0.00 19.55 9.14 178.65 86.9 4.40-5.00 (4) 27.20 0.61 16.53 60.27 0.80 48.50 88.0-93.0(4) 0.42-0.72 (4) 0.00 0.00 0.00 6.19 0.56 3.45 57.0-91.0(4) 0.49-0.92 (4) 0.00 0.00 0.00 25.31 2.07 52.44 75.0-96.0(4) 0.85-1.10 (4) 0.00 0.00 0.00 24.23 3.33 80.74 89.3-92.7(4) 1.00–1.63 (4) 12.81 1.04 13.29 8.74 2.93 25.63 80.6 1.11 13.14 1.67 21.98 17.69 1.98 35.06 90.3 0.50-0.70 (4) 7.29 0.95 6.94 7.64 4.08 31.13 61.3-95.4(4) 0.47-4.50 (4) 3.11 5.17 16.07 5.67 5.59 31.67 65.0-93.3(4) 0.70-4.53 (4) 1.94 2.88 5.59 2.45 3.10 7.60 88.0-94.0 (4) 2.11 0.00 0.00 0.00 0.00 0.00 0.00 0.0 0.00 194.56 0.84 163.24 959.40 1.50 1,443.83
(1) | Ore Reserve includes marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining. |
(2) | Proven and/or Probable Ore Reserve includes Ore Reserve below infrastructure. See table that follows. |
(3) | Ore Reserve attributable to AngloGold Ashanti’s percentage interest shown. |
(4) | Recovery factor and cut-off grade vary according to ore type. |
(5) | The Vaal Reef Ore Reserve includes 53.7 thousand tonnes of Uranium oxide by-products; this cannot be accounted for by individual mine as Great Noligwa, Kopanang, Moab Khotsong and Surface sources in Vaal River feed to a combination of plants. |
(6) | 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) |
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(11) | Includes Mine Waste Solutions (MWS). |
* On 10 February 2014, AngloGold Ashanti announced that it had signed a binding agreement to sell Navachab subject to certain conditions.
(12) | Operation sold. |
(13) | In-situ cut-off grade. |
(14) | Refractory Stockpile removed from Ore Reserve. |
Rounding may result in computational differences.
The 20132015 Proven and Probable Ore Reserve includes Ore Reserve below infrastructure in the case of the following underground mines currently in production:
Mine | Tons (millions) | Grade (ounces/ton) | Gold Content | |||||||||||||
(million ounces) | Tonnes (millions) | Grade (grams/tonne) | Gold Content (tonnes) | |||||||||||||
Moab Khotsong | 15.46 | 0.268 | 4.14 | 10.24 | 9.75 | 99.89 | ||||||||||
Mponeng | 25.69 | 0.354 | 9.09 | 26.88 | 9.90 | 266.21 | ||||||||||
Kibali | 21.70 | 0.165 | 3.58 | 14.69 | 5.77 | 84.76 | ||||||||||
Obuasi | 3.30 | 0.382 | 1.26 | 2.26 | 21.57 | 48.72 | ||||||||||
AGA Mineração | 3.99 | 0.134 | 0.53 | 1.63 | 5.61 | 9.13 | ||||||||||
Serra Grande | 0.71 | 4.00 | 2.84 | |||||||||||||
Total | 70.14 | 0.265 | 18.60 | 56.41 | 9.07 | 511.55 |
The Ore Reserve has been determined based on completed economic studies.
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Ore Reserve: Imperial | At 31 December 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proven Ore Reserve(1) | Probable Ore Reserve(1)(2) | Metallurgical | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ore Reserve: Metric | At 31 December 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gold | Gold | Recovery | Proven Ore Reserve (1) (2) | Probable Ore Reserve (1) (2) | Metallurgical | Cut-off | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tons(5) | Grade Content (1) | Tons(5) | Grade Content (1) | Factor | Tonnes(6) | Grade | Gold Content | Tonnes (6) | Grade | Gold Content | Recovery Factor | Grade(13) | ||||||||||||||||||||||||||||||||||||||||||||||||
(million) | (oz/ton) | (Moz) | (million) | (oz/ton) | (Moz) | percent | (million) | (g/t) | (tonnes) | (million) | (g/t) | (tonnes) | percent | (g/t) | ||||||||||||||||||||||||||||||||||||||||||||||
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South Africa | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vaal River(6) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Great Noligwa | 1.33 | 0.255 | 0.34 | 0.21 | 0.239 | 0.05 | 95.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Vaal River(5) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Great Noligwa(10) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.0 | 0.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Kopanang | 0.96 | 0.229 | 0.22 | 5.54 | 0.211 | 1.17 | 96.4 | 1.81 | 5.98 | 10.83 | 4.64 | 6.04 | 28.00 | 94.3 | 9.08-9.49(4) | |||||||||||||||||||||||||||||||||||||||||||||
Moab Khotsong(2) | 1.80 | 0.317 | 0.57 | 20.81 | 0.290 | 6.04 | 95.8-96.0 (4) | 2.68 | 9.20 | 24.61 | 14.27 | 10.23 | 145.89 | 95.0-96.0 (4) | 4.55-5.51(4) | |||||||||||||||||||||||||||||||||||||||||||||
West Wits | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mponeng(2) | 2.55 | 0.259 | 0.66 | 44.31 | 0.297 | 13.15 | 98.1 | 2.16 | 8.64 | 18.71 | 39.94 | 9.60 | 383.43 | 97.7-98.1(4) | 4.17-7.89(4) | |||||||||||||||||||||||||||||||||||||||||||||
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 | 0.47 | 8.93 | 4.16 | 4.16 | 7.99 | 33.26 | 96.9 | 7.50-8.57(4) | |||||||||||||||||||||||||||||||||||||||||||||
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Surface | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Surface sources(6)(10) | 156.20 | 0.007 | 1.05 | 723.47 | 0.008 | 6.12 | 51.5-93(4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Surface sources(5)(11) | 126.33 | 0.21 | 26.89 | 651.00 | 0.27 | 178.13 | 30.0-88.0(4) | 0.19-0.41(4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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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) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Kibali (45 percent)(2)(3) | 2.41 | 1.76 | 4.25 | 34.89 | 4.28 | 149.44 | 84.5-88.9(9) | 1.52-2.40(4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Ghana | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Iduapriem | 24.87 | 0.039 | 0.96 | 27.40 | 0.046 | 1.25 | 95.0 | 10.19 | 1.15 | 11.74 | 24.58 | 1.67 | 41.11 | 92.0-95.0(4) | 0.58-0.77(4) | |||||||||||||||||||||||||||||||||||||||||||||
Obuasi(2) | 20.19 | 0.175 | 3.53 | 30.77 | 0.162 | 4.99 | 85.4 | 7.32 | 5.05 | 36.7 | 17.21 | 7.40 | 127.45 | 41.0-87.0(4) | 4.30-5.20(4) | |||||||||||||||||||||||||||||||||||||||||||||
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Guinea | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Siguiri (85 percent)(3) | 40.33 | 0.018 | 0.74 | 74.52 | 0.020 | 1.46 | 88.0-90.0 (4) | 25.03 | 0.61 | 15.16 | 70.07 | 0.77 | 54.29 | 88.0-93.1(4) | 0.42-0.62(4) | |||||||||||||||||||||||||||||||||||||||||||||
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Mali | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Morila (40 percent)(3) | - | - | - | 1.70 | 0.035 | 0.06 | 88.8-89.0 (4) | 0.00 | 0.00 | 0.00 | 4.92 | 0.63 | 3.11 | 57.0-91.0(4) | 0.49-0.92(4) | |||||||||||||||||||||||||||||||||||||||||||||
Sadiola (41 percent)(3) | 2.44 | 0.037 | 0.09 | 38.37 | 0.053 | 2.05 | 76.0-94.0(4) | 0.00 | 0.00 | 0.00 | 23.55 | 2.08 | 48.98 | 75.0-96.0(4) | 0.85-1.10(4) | |||||||||||||||||||||||||||||||||||||||||||||
Yatela (40 percent)(3) | 0.06 | 0.038 | 0.00 | 0.29 | 0.105 | 0.03 | 84.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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Namibia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Navachab | - | - | - | 57.10 | 0.037 | 2.10 | 88.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Navachab(12) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.0 | 0.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Tanzania | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Geita | - | - | - | 71.72 | 0.076 | 5.42 | 46.0-91.0(4) | 0.00 | 0.00 | 0.00 | 28.61 | 3.37 | 96.29 | 48.1-92.7(4) | 1.00-2.35(4) | |||||||||||||||||||||||||||||||||||||||||||||
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Australasia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sunrise Dam | 16.51 | 0.033 | 0.54 | 5.49 | 0.118 | 0.65 | 85.2-85.5(4) | 13.77 | 1.07 | 14.77 | 7.68 | 3.29 | 25.24 | 80.0-82.5(4) | 1.29 | |||||||||||||||||||||||||||||||||||||||||||||
Tropicana (70 percent)(3) | 20.01 | 0.066 | 1.33 | 24.06 | 0.058 | 1.40 | 90.0 | 14.50 | 1.92 | 27.79 | 20.52 | 2.04 | 41.85 | 89.9 | 0.70 | |||||||||||||||||||||||||||||||||||||||||||||
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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) | 9.76 | 1.18 | 11.55 | 6.01 | 4.78 | 28.73 | 61.3-95.0(4) | 0.47-4.50(4) | |||||||||||||||||||||||||||||||||||||||||||||
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Brazil | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AGA Mineraçáo(2)(8) | 5.16 | 0.174 | 0.90 | 10.52 | 0.136 | 1.43 | 88.0-93.0(4) | 4.45 | 5.05 | 22.48 | 6.25 | 5.42 | 33.86 | 85.0-93.3(4) | 0.50-4.39(4) | |||||||||||||||||||||||||||||||||||||||||||||
Serra Grande | 5.08 | 0.085 | 0.43 | 3.24 | 0.102 | 0.33 | 93.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Serra Grande(2) | 2.72 | 2.75 | 7.47 | 2.54 | 3.15 | 8.00 | 92.0-94.0(4) | 1.73-2.03(4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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United States of America | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cripple Creek & Victor | 170.65 | 0.024 | 4.06 | 90.78 | 0.020 | 1.83 | 43.0-95.0(4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cripple Creek & Victor(12) | 107.71 | 0.79 | 84.64 | 58.07 | 0.66 | 38.44 | 53.0-83.2(4) | 0.23 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Total | 482.50 | 0.034 | 16.34 | 1,290.52 | 0.045 | 57.74 | 331.30 | 0.97 | 322.03 | 1,018.90 | 1.44 | 1,465.51 | ||||||||||||||||||||||||||||||||||||||||||||||||
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(1) | Ore Reserve includes marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining. |
(2) | Proven and/or Probable Ore Reserve includes Ore Reserve below infrastructure. See table that follows. |
(3) | Ore Reserve attributable to AngloGold Ashanti’s percentage interest shown. |
(4) | Recovery factor |
(5) |
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The Vaal Reef Ore Reserve includes |
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Rounding may result in computational differences.
The 2012 Probable Ore Reserve includes Ore Reserves below infrastructure in the case of the following underground mines currently in production:
Mine | Tons (millions) | Grade (ounces/ton) | Gold Content (million ounces) | |||
Moab Khotsong | 14.95 | 0.280 | 4.18 | |||
Mponeng | 25.49 | 0.346 | 8.82 | |||
Obuasi | 3.56 | 0.385 | 1.37 | |||
AGA Mineração | 4.57 | 0.149 | 0.68 | |||
Total | 48.57 | 0.310 | 15.05 |
Rounding may result in computational differences.
South Africa Vaal River(5) Great Noligwa Kopanang Moab Khotsong(2) West Wits Mponeng(2) Savuka(10) TauTona Surface Surface sources(5)(11) Continental Africa Democratic Republic of the Congo Kibali (45 percent)(2)(3) Ghana Iduapriem Obuasi(2) Guinea Siguiri (85 percent)(3) Mali Morila (40 percent)(3) Sadiola (41 percent)(3) Yatela (40 percent)(3) (10) Namibia Navachab* Tanzania Geita Australasia Australia Sunrise Dam Tropicana (70 percent)(3) Americas Argentina Cerro Vanguardia (92.5 percent)(3)(7) Brazil AGA Mineraçáo(2)(8) Serra Grande United States of America Cripple Creek & Victor Total 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 1.48 8.31 12.33 0.35 7.35 2.56 94.5 2.19 6.46 14.15 4.59 6.77 31.09 95.5 1.24 11.34 14.11 17.79 9.91 176.29 95.1-96.0 (4) 2.80 8.73 24.44 42.62 10.06 428.63 97.9-98.4(4) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.62 9.36 5.85 4.14 9.02 37.33 97.3 142.43 0.22 31.18 662.48 0.28 183.18 57.6-90(4) 2.43 2.36 5.71 37.23 4.16 154.98 94.5-88.9(9) 13.64 1.08 14.75 27.58 1.69 46.54 95.0 18.09 6.02 108.87 25.77 5.60 144.36 85.4 33.72 0.62 21.03 52.51 0.69 36.26 88.0-90.0(4) 0.00 0.00 0.00 0.57 2.40 1.38 88.8-91.0(4) 0.00 0.00 0.00 23.13 1.93 44.53 76.0-94.0(4) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 46.34 1.29 59.65 88.6 0.00 0.00 0.00 36.92 3.28 121.29 46.2-100.0 (4) 14.94 1.11 16.65 6.20 3.22 19.97 85.5 17.43 2.26 39.43 20.96 2.02 42.36 90.0 10.27 1.04 10.63 7.30 5.23 38.20 61.3-94.3(4) 4.98 5.08 25.33 7.85 4.58 35.97 88.0-93.0(4) 3.42 2.74 9.38 2.45 3.35 8.22 92.1 122.01 0.84 102.83 60.65 0.72 43.67 43.0-95.0(4) 391.70 1.17 456.65 1,087.44 1.52 1,656.45
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(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 |
(11) | Includes Mine Waste Solutions (MWS). |
* On 10 February 2014, AngloGold Ashanti announced that it had signed a binding agreement to sell Navachab subject to certain conditions.
(12) | Operation sold. |
(13) | In-situ cut-off grade. |
Rounding may result in computational differences.
The 20132014 Proven and Probable Ore Reserve includes Ore Reserve below infrastructure in the case of the following underground mines currently in production:
Mine | Tonnes (millions) | Grade (grams/tonne) | Gold Content (tonnes) | |||
Moab Khotsong | 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 |
South Africa Vaal River(5) Great Noligwa Kopanang Moab Khotsong(2) West Wits Mponeng(2) Savuka TauTona Surface Surface sources(5)(10) Continental Africa Democratic Republic of the Congo Kibali (45 percent)(3) Ghana Iduapriem Obuasi(2) Guinea Siguiri (85 percent )(3) Mali Morila (40 percent)(3) Sadiola (41 percent)(3) Yatela (40 percent)(3) Namibia Navachab Tanzania Geita Australasia Australia Sunrise Dam Tropicana (70 percent)(3) Americas Argentina Cerro Vanguardia (92.5 percent)(3)(7) Brazil AGA Mineraçáo(8) Serra Grande United States of America Cripple Creek & Victor Total 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 1.21 8.77 10.60 0.19 8.62 1.62 95.5 0.87 7.92 6.89 5.03 7.25 36.44 96.4 1.63 10.83 17.61 18.88 9.95 187.87 95.8-96.0 (4) 2.31 8.88 20.54 40.20 10.17 408.91 98.1 0.26 5.78 1.50 3.03 5.08 15.40 97.3 0.74 11.19 8.25 4.80 8.96 43.04 97.5 141.70 0.23 32.63 656.32 0.29 190.30 51.5-93(4) 1.59 3.26 5.20 35.90 4.12 147.84 84.5; 91.3(9) 22.56 1.32 29.88 24.86 1.56 38.72 95.0 18.32 5.99 109.78 27.91 5.56 155.11 85.4 36.59 0.63 22.92 67.60 0.67 45.56 88.0-90.0(4) - - - 1.54 1.14 1.75 88.8-89.0(4) 2.21 1.29 2.86 34.81 1.83 63.64 76.0-94.0(4) 0.05 1.36 0.07 0.26 3.61 0.92 84.8 - - - 51.80 1.26 65.29 88.1 - - - 65.06 2.59 168.63 46.0-91.0(4) 14.98 1.12 16.74 4.98 4.03 20.07 85.2-85.5(4) 18.15 2.28 41.46 21.83 1.99 43.48 90.0 10.44 1.29 13.49 10.90 4.56 49.71 61.3-94.3(4) 4.68 5.99 28.07 9.54 4.66 44.41 88.8-93.0(4) 4.61 2.91 13.44 2.94 3.51 10.33 93.7 154.81 0.81 126.16 82.35 0.69 56.83 43.0-95.0(4) 437.72 1.16 508.11 1,170.74 1.53 1,795.90
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The |
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Rounding may result in computational differences.
The 2012 Probable Ore Reserve includes Ore Reserve below infrastructure in the case of the following underground mines currently in production:
Mine | Tonnes (millions) | Grade (grams/tonne) | Gold Content (tonnes) | |||
Moab Khotsong | 13.56 | 9.59 | 129.99 | |||
Mponeng | 23.12 | 11.87 | 274.40 | |||
Obuasi | 3.23 | 13.23 | 42.69 | |||
AGA Mineração | 4.15 | 5.07 | 21.04 | |||
Total | 44.06 | 10.62 | 468.12 |
Stockpiles: Imperial
Stockpiles are previously mined ore scheduled for future process plant feed. The Proven and Probable Ore Reserve includes the following stockpile material:
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Stockpiles | At 31 December 2013 | |||||||||||
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Tons (million) | Grade (ounces/ton) | Gold content (million ounces) | ||||||||||
| ||||||||||||
South Africa | ||||||||||||
Surface sources(2) | 887.26 | 0.008 | 6.89 | |||||||||
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Continental Africa | ||||||||||||
Ghana | ||||||||||||
Iduapriem | 7.81 | 0.025 | 0.19 | |||||||||
Obuasi | 6.57 | 0.058 | 0.38 | |||||||||
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Guinea | ||||||||||||
Siguiri (85 percent)(1)(3) | 65.75 | 0.016 | 1.08 | |||||||||
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Mali | ||||||||||||
Morila (40 percent)(1) | 0.19 | 0.033 | 0.01 | |||||||||
Sadiola (41 percent)(1) | 2.91 | 0.032 | 0.09 | |||||||||
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Namibia | ||||||||||||
Navachab* | 14.62 | 0.021 | 0.31 | |||||||||
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Tanzania | ||||||||||||
Geita | 11.55 | 0.036 | 0.41 | |||||||||
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Australasia | ||||||||||||
Australia | ||||||||||||
Sunrise Dam | 16.47 | 0.032 | 0.54 | |||||||||
Tropicana (70 percent)(1) | 2.04 | 0.060 | 0.12 | |||||||||
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Americas | ||||||||||||
Argentina | ||||||||||||
Cerro Vanguardia (92.5 percent)(1) | 12.00 | 0.017 | 0.20 | |||||||||
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Brazil | ||||||||||||
Serra Grande | 0.20 | 0.048 | 0.01 | |||||||||
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United States of America | ||||||||||||
Cripple Creek & Victor | 0.71 | 0.032 | 0.02 | |||||||||
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* On 10 February 2014, AngloGold Ashanti announced that it had signed a binding agreement to sell Navachab subject to certain conditions.has been determined based on completed economic studies.
Stockpiles: Imperial
Stockpiles are previously mined ore scheduled for future process plant feed. The Proven and Probable Ore Reserve includes the following stockpile material:
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Stockpiles | At 31 December 2012 | At 31 December 2015 | ||||||||||||||||||||||
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Tons (million) | Grade (ounces/ton) | Gold content (million ounces) | Tons (million) | Grade (ounces/ton) | Gold content (million ounces) | |||||||||||||||||||
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South Africa | ||||||||||||||||||||||||
Surface sources(2) | 879.66 | 0.008 | 7.17 | 835.15 | 0.008 | 6.33 | ||||||||||||||||||
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Continental Africa | ||||||||||||||||||||||||
Ghana | ||||||||||||||||||||||||
Iduapriem | 7.33 | 0.024 | 0.18 | 13.30 | 0.021 | 0.28 | ||||||||||||||||||
Obuasi | 0.12 | 0.130 | 0.02 | |||||||||||||||||||||
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Guinea | ||||||||||||||||||||||||
Siguiri (85 percent)(1)(3) | 67.63 | 0.017 | 1.12 | 65.21 | 0.017 | 1.09 | ||||||||||||||||||
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Mali | ||||||||||||||||||||||||
Morila (40 percent)(1) | 1.70 | 0.033 | 0.06 | 6.82 | 0.016 | 0.11 | ||||||||||||||||||
Sadiola (41 percent)(1) | 4.00 | 0.059 | 0.24 | 2.38 | 0.057 | 0.14 | ||||||||||||||||||
Yatela (40 percent)(1) | 0.06 | 0.041 | 0.00 | |||||||||||||||||||||
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Namibia | ||||||||||||||||||||||||
Navachab | 12.48 | 0.020 | 0.25 | |||||||||||||||||||||
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Tanzania | ||||||||||||||||||||||||
Geita | 12.26 | 0.036 | 0.44 | 7.41 | 0.033 | 0.24 | ||||||||||||||||||
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Australasia | ||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||
Sunrise Dam | 16.51 | 0.033 | 0.54 | 14.12 | 0.030 | 0.43 | ||||||||||||||||||
Tropicana (70 percent)(1) | 0.32 | 0.051 | 0.02 | 7.21 | 0.030 | 0.22 | ||||||||||||||||||
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Americas | ||||||||||||||||||||||||
Argentina | ||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent)(1) | 12.83 | 0.018 | 0.23 | 11.61 | 0.019 | 0.22 | ||||||||||||||||||
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Brazil | ||||||||||||||||||||||||
Serra Grande | 0.09 | 0.055 | 0.00 | 0.14 | 0.052 | 0.01 | ||||||||||||||||||
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United States of America | ||||||||||||||||||||||||
Cripple Creek & Victor(4) | 0.00 | 0.000 | 0.00 | |||||||||||||||||||||
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(1) | Ore Reserve attributable to AngloGold Ashanti’s percentage interest shown. |
(2) | Centralised operations treating material on surface that was previously generated by several underground operations. |
(3) | Spent heap included in Ore Reserve. |
(4) | Operation sold. |
Rounding may result in computational differences.
Stockpiles: MetricImperial
Stockpiles are previously mined ore scheduled for future process plant feed. The Proven and Probable Ore Reserve includes the following stockpile material:
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Stockpiles | At 31 December 2013 | At 31 December 2014 | ||||||||||||||||||||||
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Tonnes (million) | Grade (grams/tonne) | Gold content (tonnes) | Tons (million) | Grade (ounces/ton) | Gold content (million ounces) | |||||||||||||||||||
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South Africa | ||||||||||||||||||||||||
Surface sources(2) | 804.91 | 0.27 | 214.36 | 856.86 | 0.008 | 6.59 | ||||||||||||||||||
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Continental Africa | ||||||||||||||||||||||||
Ghana | ||||||||||||||||||||||||
Iduapriem | 7.08 | 0.86 | 6.06 | 4.30 | 0.025 | 0.11 | ||||||||||||||||||
Obuasi | 5.96 | 1.99 | 11.86 | 5.37 | 0.057 | 0.31 | ||||||||||||||||||
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Guinea | ||||||||||||||||||||||||
Siguiri (85 percent)(1)(3) | 59.65 | 0.56 | 33.49 | 62.81 | 0.017 | 1.04 | ||||||||||||||||||
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Mali | ||||||||||||||||||||||||
Morila (40 percent)(1) | 0.17 | 1.14 | 0.20 | 5.20 | 0.016 | 0.08 | ||||||||||||||||||
Sadiola (41 percent)(1) | 2.64 | 1.11 | 2.92 | 1.87 | 0.058 | 0.11 | ||||||||||||||||||
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Namibia | ||||||||||||||||||||||||
Navachab* | 13.26 | 0.73 | 9.66 | |||||||||||||||||||||
Navachab(4) | 0.00 | 0.000 | 0.00 | |||||||||||||||||||||
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Tanzania | ||||||||||||||||||||||||
Geita | 10.48 | 1.22 | 12.83 | 7.13 | 0.034 | 0.24 | ||||||||||||||||||
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Australasia | ||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||
Sunrise Dam | 14.94 | 1.11 | 16.65 | 15.18 | 0.031 | 0.47 | ||||||||||||||||||
Tropicana (70 percent)(1) | 1.85 | 2.04 | 3.79 | 4.17 | 0.027 | 0.11 | ||||||||||||||||||
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Americas | ||||||||||||||||||||||||
Argentina | ||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent)(1) | 10.89 | 0.58 | 6.27 | 12.10 | 0.020 | 0.24 | ||||||||||||||||||
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Brazil | ||||||||||||||||||||||||
Serra Grande | 0.19 | 1.65 | 0.31 | 0.32 | 0.052 | 0.02 | ||||||||||||||||||
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United States of America | ||||||||||||||||||||||||
Cripple Creek & Victor | 0.64 | 1.09 | 0.70 | 1.33 | 0.036 | 0.05 | ||||||||||||||||||
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(1) | Ore Reserve attributable to AngloGold Ashanti’s percentage interest shown. |
(2) | Centralised operations treating material on surface that was previously generated by several underground operations. |
(3) | Spent heap included in Ore Reserve. |
(4) | Operation sold. |
* On 10 February 2014, AngloGold Ashanti announced that it had signed a binding agreement to sell Navachab subject to certain conditions.Rounding may result in computational differences.
Stockpiles: Metric
Stockpiles are previously mined ore scheduled for future process plant feed. The Proven and Probable Ore Reserve includes the following stockpile material:
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Stockpiles | At 31 December 2012 | At 31 December 2015 | ||||||||||||||||||||||
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Tonnes (million) | Grade (grams/tonne) | Gold content (tonnes) | Tonnes (million) | Grade (grams/tonne) | Gold content (tonnes) | |||||||||||||||||||
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South Africa | ||||||||||||||||||||||||
Surface sources(2) | 798.01 | 0.28 | 222.93 | 757.64 | 0.26 | 196.90 | ||||||||||||||||||
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Continental Africa | ||||||||||||||||||||||||
Ghana | ||||||||||||||||||||||||
Iduapriem | 6.65 | 0.83 | 5.53 | 12.07 | 0.73 | 8.82 | ||||||||||||||||||
Obuasi | 0.11 | 4.28 | 0.49 | |||||||||||||||||||||
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Guinea | ||||||||||||||||||||||||
Siguiri (85 percent)(1)(3) | 61.35 | 0.57 | 34.98 | 59.16 | 0.57 | 33.83 | ||||||||||||||||||
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Mali | ||||||||||||||||||||||||
Morila (40 percent)(1) | 1.54 | 1.14 | 1.75 | 6.19 | 0.56 | 3.45 | ||||||||||||||||||
Sadiola (41 percent)(1) | 3.63 | 2.04 | 7.40 | 2.16 | 1.96 | 4.22 | ||||||||||||||||||
Yatela (40 percent)(1) | 0.05 | 1.36 | 0.07 | |||||||||||||||||||||
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Namibia | ||||||||||||||||||||||||
Navachab | 11.32 | 0.70 | 7.89 | |||||||||||||||||||||
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Tanzania | ||||||||||||||||||||||||
Geita | 11.12 | 1.23 | 13.67 | 6.72 | 1.12 | 7.51 | ||||||||||||||||||
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Australasia | ||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||
Sunrise Dam | 14.98 | 1.12 | 16.74 | 12.81 | 1.04 | 13.29 | ||||||||||||||||||
Tropicana (70 percent)(1) | 0.29 | 1.76 | 0.51 | 6.54 | 1.03 | 6.71 | ||||||||||||||||||
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Americas | ||||||||||||||||||||||||
Argentina | ||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent)(1) | 11.64 | 0.62 | 7.22 | 10.53 | 0.65 | 6.84 | ||||||||||||||||||
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Brazil | ||||||||||||||||||||||||
Serra Grande | 0.08 | 1.96 | 0.15 | 0.13 | 1.80 | 0.24 | ||||||||||||||||||
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United States of America | ||||||||||||||||||||||||
Cripple Creek & Victor(4) | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||
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|
(1) | Ore Reserve attributable to AngloGold Ashanti’s percentage interest shown. |
(2) | Centralised operations treating material on surface that was previously generated by several underground operations. |
(3) | Spent heap included in Ore Reserve. |
(4) | Operation sold. |
Rounding may result in computational differences.
Stockpiles: Metric
Stockpiles are previously mined ore scheduled for future process plant feed. The Proven and Probable Ore Reserve includes the following stockpile material:
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Stockpiles | At 31 December 2014 | |||||||||||
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Tonnes (million) | Grade (grams/tonne) | Gold content (tonnes) | ||||||||||
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South Africa | ||||||||||||
Surface sources(2) | 777.33 | 0.26 | 205.02 | |||||||||
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Continental Africa | ||||||||||||
Ghana | ||||||||||||
Iduapriem | 3.90 | 0.87 | 3.40 | |||||||||
Obuasi | 4.87 | 1.96 | 9.57 | |||||||||
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Guinea | ||||||||||||
Siguiri (85 percent)(1)(3) | 56.98 | 0.57 | 32.45 | |||||||||
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Mali | ||||||||||||
Morila (40 percent)(1) | 4.72 | 0.53 | 2.52 | |||||||||
Sadiola (41 percent)(1) | 1.70 | 2.00 | 3.39 | |||||||||
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Namibia | ||||||||||||
Navachab(4) | 0.00 | 0.00 | 0.00 | |||||||||
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Tanzania | ||||||||||||
Geita | 6.47 | 1.16 | 7.52 | |||||||||
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Australasia | ||||||||||||
Australia | ||||||||||||
Sunrise Dam | 13.77 | 1.07 | 14.77 | |||||||||
Tropicana (70 percent)(1) | 3.78 | 0.94 | 3.57 | |||||||||
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Americas | ||||||||||||
Argentina | ||||||||||||
Cerro Vanguardia (92.5 percent)(1) | 10.98 | 0.67 | 7.37 | |||||||||
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Brazil | ||||||||||||
Serra Grande | 0.29 | 1.79 | 0.52 | |||||||||
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United States of America | ||||||||||||
Cripple Creek & Victor(4) | 1.20 | 1.22 | 1.47 | |||||||||
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(1) | Ore Reserve attributable to AngloGold Ashanti’s percentage interest shown. |
(2) | Centralised operations treating material on surface that was previously generated by several underground operations. |
(3) | Spent heap included in Ore Reserve. |
(4) | Operation sold. |
Rounding may result in computational differences.
Drill hole spacing: Imperial
In determining the Proven and Probable Ore Reserve, AngloGold Ashanti applied the following drill hole spacing:
Drill Hole | ||||
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 foot grid thereafter
| From a 131 x 131 foot spacing up to 3281 x 3281 foot spacing | ||
Surface sources |
| |||
Continental Africa | ||||
Democratic Republic of the Congo | ||||
Kibali | 16 x 33 feet, 66 x | 131 x 131 feet, 262 x 262 feet | ||
Ghana | ||||
Iduapriem | 33 x 39 feet, 33 x 49 feet, 66 x 49 feet, 66 x 66 feet, 82 x 82 feet, 164 x 164 feet 164 x 246 feet, 328 x 164 feet | 164 x 164 feet, 164 x 246 feet, 164 x 328 feet, 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, 164 x 164 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, 164 x 328 feet | ||
Sadiola | 16 x 33 feet, 20 x 39 feet, 82 x 82 feet | 82 x 82 feet, 164 | ||
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Tanzania | ||||
Geita | 16 x 33 feet | 33 x 33 feet, 66 x 66 feet, 82 x 82 feet, 131 x 66 feet, 131 x 131 | ||
Australasia | ||||
Australia | ||||
Sunrise Dam |
| 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 |
| 131 x 131 feet | ||
Brazil | ||||
AGA Mineraçáo | 66 x 33 feet, 82 x 82 feet, 98 x 197 feet | 82 x 131 feet, 98 x 82 feet, 164 x 98 feet, 164 x 164 feet, 33 x 197 feet, 98 x 197 feet, 410 x 82 feet
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Serra Grande
| 33 x 33 feet, 66 x 33 feet
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Drill hole spacing: Metric
In determining the Proven and Probable Ore Reserve, AngloGold Ashanti applied the following table of drill hole spacing:
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 metre spacing on raise lines and on a 5 x 5 metre grid thereafter
| From a 40 x 40 metre spacing up to 1000 x 1000 metre spacing | ||
Surface sources |
| |||
Continental Africa | ||||
Democratic Republic of the Congo | ||||
Kibali | 5 x 10 metre, 20 x | 40 x 40 metre, 80 x 80 metre | ||
Ghana | ||||
Iduapriem | 10 x 12 metre, 10 x 15 metre, 20 x 15 metre, 20 x 20 metre, 25 x 25 metre, 50 x 50 metre, 50 x 75 metre, 100 x 50 metre | 50 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, 50 x 100 metre | ||
Sadiola | 5 x 10 metre, 6 x 12 metre, 25 x 25 metre | 25 x 25 metre, 50 | ||
| ||||
| ||||
Tanzania | ||||
Geita | 5 x 10 metre | 10 x 10 metre, 20 x 20 metre, 25 x 25 metre, 40 x 20 metre, 40 x
| ||
Australasia | ||||
Australia | ||||
Sunrise Dam | 20 x 20 metre, 40 x 40 metre | |||
Tropicana | 10 x 12 metre, 25 x 25 metre | 50 x 50 metre | ||
Americas | ||||
Argentina | ||||
Cerro Vanguardia | 40 x 40 metre | |||
Brazil | ||||
AGA Mineraçáo
| 20 x 10 metre, 25 x 25 metre, 30 x 60 metre
| 25 x 40 metre, 30 x 25 metre, 50 x 30 metre, 50 x 50 metre, 10 x 60 metre, 30 x 60 metre, 125 x 25 metre
| ||
Serra Grande
| 10 x 10 metre, 20 x 10 metre
|
|
|
ITEM 4A: UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 5: OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion provides information that management believes is relevant to an assessment and understanding of the consolidated financial condition and results of operations of AngloGold Ashanti Limited under IFRS for the three years ended and as at 31 December 2013, 20122015, 2014 and 2011.2013.
This item should be read in conjunction with the company’s consolidated financial statements and the notes thereto which are included under Item 18 of this annual report.
The principal accountant of AngloGold Ashanti has made reference to the work of other auditors in its 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$127 million in 2013 (2012: $2062015 (2014: $130 million; 2011: $2242013: $149 million) out of total revenue of $4,174 million in 2015 (2014: $5,110 million; 2013: $5,383 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 Vaal River, West Wits and Surface Operations)
Continental Africa (comprising Ghana, Guinea, Mali, Namibia (sold June 2014), the DRC and Tanzania operations)Tanzania)
Australasia (comprising Australia)
Americas (comprising Argentina, Brazil and United States of America)America (sold August 2015))
In particular, AngloGold Ashanti has 2117 operations in the four regions comprising open-pit and underground mines and surface metallurgical plants, which are supported by extensive, yet focused exploration activities. For more information on the company’s business and operations, see “Item 4B.:4B: Business Overview – Products, operations and geographical locations”Overview”.
As at 31 December 20132015 the company had on an attributable basis, Proven and Probable Ore Reserves of approximately 67.951.7 million ounces (including joint ventures). For the year ended 31 December 2013,2015, AngloGold Ashanti had an attributable gold production of approximately 4.113.9 million ounces (including joint ventures).
AngloGold Ashanti’s costs and expenses consist primarily of production costs, amortisation, royalties, corporate administration, marketing and other expenses and exploration and evaluation costs. 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 company’s mining operations consist of deep-level underground mines as well as open-pit operations, both of which are labour intensive, therefore salaries and wages isare a significant component of production costs.
Outlook
Gold production for 20142016 is forecast to be between 4.23.6 million and 4.53.8 million ounces. Capital expenditure is expected to be approximately between $1.35 billion$790 million and $1.45 billion$850 million in 20142016 based on the following assumptions: R11.00/R15.00/$, $0.85/$0.70/A$, BRL2.45/BRL4.00/$ and ARS peso 6.50/ARS14.90/$; Brent crude at $100$35 per barrel (2013: $1.99 billion).barrel.
AngloGold Ashanti’s results of operations, financial condition and prospects, as well as the company’s ability to meet its targets, may be adversely affected by a number of factors, 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. In 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 described in “Item 3D.:3D: Risk factors”. See also “Note regarding forward-looking statements”. Furthermore the forecast assumes no changes to the asset portfolio/operating mines.
INTRODUCTION
The gold price declined during 2015 primarily due to the strength of the US dollar. The US dollar appreciated steadily over the course of the year in 2013 appeared to be affected by expectationsanticipation of central banks monetary policy, specifically with respect to monetary easing employed by the United Statesnormalisation of interest rates. Following a meeting on 16 December 2015, the Federal Reserve System (“Open Market Committee (FOMC) announced an increase of 25 basis points in the FED”) better known as Quantitative Easing (“QE”).
The gold market suffered its largest two day fallFederal Funds rate. This was the first increase in more than 30 years asnine and a half years. Despite the fact that the majority of analysts had been expecting the move, the gold price fell by $228reacted negatively to the announcement. Following the rate increase, the price traded to a low of $1,047 per ounce on 12 and 15 April 2013, whenbefore strong physical demand stabilised the minutes fromprice. Towards the FED’s March meeting reflected discussions regarding the efficacy of QE and exit strategy in respectend of the current round of QE. AngloGold Ashanti believesyear further adverse economic developments highlighted broader global economic weaknesses and put into question 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 timingsustainability of the tapering by scrutinising economic data releases. It appeared that economic data releases which beat consensus weighed heavily onincrease in US interest rates.
Physical demand faced a number of challenges during the gold price as it steadily declined through the year. In September 2013, the FED surprised the market by not announcing any taperingfirst half 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 threatening2015 mainly due 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 consumeradverse weather conditions impacting jewellery 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 as well as an economic slowdown and financial market turbulence in 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 In the second half of 2013, the Indian government imposed various restrictions onyear, jewellery demand increased across the board as consumers purchased more affordable gold imports which were effectivejewellery (2,414 tonnes) and total coins & bars (1,011 tonnes).
Central banks’ demand for gold increased significantly in reducingthe second half of the demand from this traditional source.
These restrictions likely helped China becomeyear as a result of accelerated purchasing programmes as the largest consumer market for physical gold. According todiversification of foreign reserves remained a top priority. Russia led the World Gold Council (WGC), China is also the largest global gold producer (437way by purchasing approximately 200 tonnes while Chinese central bank buying was estimated at 103 tonnes in 2013)the second half of 2015.
Gold ETFs were net negative for 2015 (133 tonnes) although sales occurred at a slower pace than in 2014 (185 tonnes) and 2013 (915 tonnes).
During the year gold traded up to a high of $1,306 per ounce (on 22 January 2015) and down to a low of $1,045 per ounce (on 3 December 2015). The biggest intraday move was recorded on 20 July 2015 when the gold price decreased by four percent from $1,132 per ounce to $1,088 per ounce. The average gold price for the year was $1,159 per ounce and it is estimated byclosed the WGC thatyear at $1,060 per ounce, 10.2 percent lower than at the Chinese importsstart of gold2015.
In August 2015, AngloGold Ashanti completed its disposal of Cripple Creek & Victor (CC&V), its sole asset in North America, to Newmont Mining Corporation for 2013 amountedproceeds of $819.4 million. See “Item 18: Note 10–Discontinued operations” for details of the operating results at the date of disposal.
The financial results of CC&V have been presented as discontinued operations in the consolidated financial statements and the comparative statements of operations and the statement of cash flows have been presented as if CC&V had been discontinued from the start of the comparative periods. The discussion of financial results of AngloGold Ashanti in this Operating and Financial review and Prospects relates to between 1,000 tonnescontinuing operations only unless the context indicates otherwise.
The proceeds from the sale of CC&V were primarily used to execute a partial tender offer for the company’s long-term debt under its 8.50 percent bonds due 2020. See “Item 5B: Liquidity and 1,100 tonnes.Capital Resources”.
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 investment, jewellery and industrial demand (particularly in China and India), 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.
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 organisations and private individuals. As the global gold production in any single year constitutes a small portion of the total potential supply of gold, short term variations in current production do not necessarily have a significant impact on the supply of gold or on its price.
The market for gold bullion bar, the company’s primary product, is generally limited to the bullion banks. The number of these banks has declined over the last few years. Additionally, due to the diversity and depth of the total gold market, the bullion banks do not possess significant pricing power. Approximately 37 percent of the group’s total gold produced was sold to two customers of the group in 2015.
The price of gold is often subject to sharp, short-term changes. The shift in gold demand from physical demand to investment and speculative demand may exacerbate the volatility of gold prices.
Yearly average spot gold prices have changed during the three years under review as follows:
2011 - $1,572 per ounce
2012 - $1,668 per ounce
2013 - $1,411 per ounce
2014 - $1,266 per ounce
2015 - $1,159 per ounce
Since 2011,The average of the company has been unhedged and thus fully exposed to the fluctuations in the gold price. In the first quarter of 2014, the averagespot gold price from 1 January 2016 to 18 March 2016 was $1,292$1,175 per ounce. On 2 April 2014,18 March 2016, the afternoon fixing price for gold on the London Bullion Market was $1,292$1,255 per ounce.
If income from gold sales falls for an extended period below the company’s production costs at its operations, AngloGold Ashanti could determine that it is not economically feasible to continue production at some or all of its operations. Declining gold prices may also force a reassessment of the feasibility of a particular exploration or development project or projects, and could lead to the curtailment or suspension of such projects. A sustained decrease in gold prices may force the company to change its dividend payment policies, reduce expenditures and undertake measures to address its cost base. In addition, the use of lower gold prices in reserve calculationsOre Reserve estimates and life-of-mine plans could result in material write-downs of the company’s investment in mining properties and increase amortisation, rehabilitation and closure charges.
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) improveddecreased from 3.944.4 million ounces in 20122014 to 4.113.9 million ounces in 2013.2015. The increasedecrease in production levels is due to a variety of factors, as follows:
South Africa: 718 percent increasedecline in production in 20132015 primarily due to production from Mine Waste Solutions (“MWS”) (acquired July 2012) and fewer safety related stoppages.stoppages across the regional portfolio as well as lower volumes and grades mined.
Continental Africa: 410 percent decline in production primarily due to the mill shutdown at Geitatransitioning of Obuasi into a limited operations phase in Tanzania.2015.
Australasia: 3310 percent decline in production primarily due to lower grades mined at Sunrise Dam in 2015.
Americas: six percent increase in production primarily due to production from Tropicana.
Americas: 5 percenta 32,000oz increase in production from the Americas primarilyat Cerro Vanguardia due to the increase of the company’s ownership in Serra Grande to 100 percent, effective July 2012.higher tonnes treated and higher grades mined.
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 business 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 ways of increasing the tonnage mined and processed, and processing improvements to enhance metallurgical recoveries.
Foreign exchange fluctuations
Production costs in all business segments are largely incurred in local currency where the relevant operation is located. US dollar denominated production costs and net income tend to be adversely impacted by local currency strength and 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 South African Rand, Brazilian Real, Australian Dollar, and, to a lesser extent, the ArgentineanArgentinian Peso, Ghanaian Cedi and other local currencies. As set out below, during the year ended 31 December 2013,2015, the US dollar strengthened and the South African Rand, Australian dollar, Brazilian Real and Argentinean Peso weakened, which had a favourable impact on AngloGold Ashanti’s US Dollar denominated production costs.
Average annual exchange rates to the US dollar
| 2013
| 2012
| 2011
| 2015
| 2014
| 2013
| ||||||||||||||||||
South African Rand | 9.62 | 8.20 | 7.26 | 12.77 | 10.83 | 9.62 | ||||||||||||||||||
Brazilian Real | 2.16 | 1.95 | 1.68 | 3.33 | 2.35 | 2.16 | ||||||||||||||||||
Australian Dollar | 1.03 | 0.97 | 0.97 | 1.33 | 1.11 | 1.03 | ||||||||||||||||||
Argentinian Peso | 5.48 | 4.55 | 4.13 | 9.26 | 8.12 | 5.48 |
In 2013,2015, the company derived 6267 percent (59(60 percent including joint ventures) of its revenues from South Africa, Brazil, Australia and Argentina, and incurred 6067 percent (56(61 percent including joint ventures) of its production costs in these local currencies.South Africa, Brazil, Australia and Argentina. A one percent strengthening of these local currencies against the US dollar will result in an increase in total cash costs incurred of about $6 per ounce.
Certain exchange controls are currentlywere in force in most emerging markets in which the company operates during the period under review, including, for example, South Africa 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.:10D: Exchange controls”. Funds in bank accounts in Argentina were subject to regulatory approvals before such funds could be transmitted until a new government elected in November 2015 started the process of easing controls and returning to an open economy and free market. During 2015 the group was not able to remit funds from Argentina due to the absence of necessary approvals.
Production costs and effects of inflation
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 costs of inputs used in the production of gold, which leads to higher production costs reported by many gold producers.
AngloGold Ashanti is unable to control the prices at which it sells its gold. Accordingly, in the event of significant inflation in South Africa or, to a lesser extent, Brazil, Argentina or Australia, without a concurrent devaluation of the local currency or an increase in the price of gold, there could be a material adverse effect upon the company’s results and financial condition.
AngloGold Ashanti employs over 60,00052,000 people globally, most of whom are members of trade unions, particularly in South Africa, Continental Africa and the Americas. Salaries and wages accountsaccount 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 price of oil has recently been volatile, fluctuating between $97.99$35 and $120.09$66 per barrel of Brent crude in 2013.2015. AngloGold Ashanti estimates that for each $1 per barrel rise in the oil price, other factors remaining equal, the average total cash costs of all its operations increases by about $0.75$0.87 per ounce, with the cash costs of certain of the company’s mines, particularly Geita, Cripple Creek & Victor, Siguiri and Sadiola, which are more dependent on fuel, being more sensitive to changes in the price of oil. 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 pressuresFluctuations in oil and steel prices have adversely impacted net income during the period.a significant impact on operating costs and capital expenditure.
Total group rehabilitation obligationprovisions for decommissioning and for restoration (excluding joint ventures) decreased from $841totalled $851 million in 2012 to $7282014 and $683 million in 2013.2015. This change is attributable to the sale of Cripple Creek & Victor, which accounted for $116 million of this change, changes in discount rates due to changes inbased on global economic assumptions and changes in mine plans resultingand in changes in cash flows and changes inthe 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$124 million incurred in 20112013 to $164$129 million incurred in 20122014 and $129$100 million in 2013,2015, primarily due to the variations in the spot gold prices and production.
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.
Exploration and evaluation costs
The company has incurred exploration expenditure during the years ended 31 December 2011, 20122013, 2014 and 20132015 in order to replenish depleting gold reservesOre Reserves and bring new ore bodies into pre-feasibility or feasibility. The exploration costs incurred over the last three fiscal years amounted to $279$250 million in 2011, $3952013, $142 million in 20122014 and $255$132 million in 2013.2015. Exploration expenditure was curtailed during 2013,2014, with the company exiting thirteen locations across the globe.a significant cut back in greenfields exploration as well as prefeasibility studies.
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, $92 million in 2014 and $78 million in 2015. The costs were lower in 2015 due to reduced labour costs, consultancy and travel costs, aided by the company embarked on cost optimisation review in order to reduce corporate costs.effects of the weaker Rand.
Amortisation of tangible assets
Amortisation of tangible assets decreased during the 2011-20132013 – 2015 period, from $825$754 million to $775$737 million, largely due to impairmentthe safety stoppages in South Africa that severely impacted the production profile (thereby decreasing the depreciation charge), lower production and derecognitiongrades at Sunrise Dam and Tropicana and a reduction in capital expenditure at Obuasi following the impending move to limited operations, partly offset by higher amortisation at Geita due to higher production and a change in mining strategy, higher deferred stripping amortisation at Cerro Vanguardia due to increased Ore production and higher amortisation at Corrego do Sitio due to higher production, additional capital expenditure and lower Ore Reserves. The decrease was also aided by the weakening of assets during 2013.local currencies against the US dollar.
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 reserveOre 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 reservesOre 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$1,179 per ounce in 20132015 and $1,584$1,267 per ounce in 2012,2014, 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$1,159 per ounce in 20132015 and $1,668$1,266 per ounce in 2012.2014. The gold price in 20142016 has been subject to volatile short term swings and has averaged $1,292$1,175 per ounce in the first quarter of 2014from 1 January 2016 to 18 March 2016 and closed at $1,292$1,255 per ounce on 2 April 2014.18 March 2016.
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 significantlyincreased over the period 2011-20132013 - 2015 from a credit of $237 million in 2013 to an expense of $737$211 million in 2011 to a benefit of $333 million in 2013.2015. The decreasesincrease in the tax charge iswas mainly due to tax credits on impairment and disposal of assets in 2013, not being repeated in 2014 and 2015. Lower taxes were recorded in 2015 compared to 2014, mainly due to lower taxable income asearnings and a result of the lower gold price as well as tax credits on impairment of assets.price.
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 rationalisation in recent years. Accordingly, AngloGold Ashanti has been, and expects to continue to be, involved in assessing a number of acquisitions, dispositions and dispositionsjoint ventures as part of this global trend and to identify value-adding business combinations and acquisition opportunities.
Acquisitions and dispositions are described in Note 34 to the consolidated financial statements, “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, giving effect to the acquisitions and disposals on the effective date.
South African economic and other factors
AngloGold Ashanti is a company domiciled in South Africa with significant operations in South Africa. As a result, the company is subject to various economic, fiscal and monetary factors that affect South African companies generally.
For more information about the impact of governmental economic, fiscal, monetary or political policies or factors on our operations, see also “Item 3.D: Risk Factors” and “Item 4.B: Business Overview–The regulatory environment enabling AngloGold Ashanti to mine”.
Comparison of operating performance in 2013, 20122015, 2014 and 20112013
The following table presents operating data for the AngloGold Ashanti group for the three yearthree-year period ended 31 December 2013:2015:
Operating data for AngloGold Ashanti | Year ended 31 December | Year ended December 31 | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2015 | 2014 | 2013 | |||||||||||||||||||
Total attributable gold production (thousand ounces) | 4,105 | 3,944 | 4,331 | 3,947 | 4,436 | 4,105 | ||||||||||||||||||
Total attributable gold sold (thousand ounces) | 4,093 | 3,953 | 3,965 | 4,454 | 4,093 | |||||||||||||||||||
All-in sustaining costs ($/oz)(2)(3) | 1,174 | 1,251 | ||||||||||||||||||||||
All-in sustaining costs ($/oz)(3) | 910 | 1,020 | 1,195 | |||||||||||||||||||||
All-in costs ($/oz)(3) | 1,001 | 1,114 | 1,466 | |||||||||||||||||||||
Total cost of sales (million US dollars) – per financial statements | 4,146 | 3,964 | 3,892 | 3,294 | 3,972 | 3,947 | ||||||||||||||||||
Total cash costs ($/oz)(2) | 830 | 829 | 703 | |||||||||||||||||||||
Total production costs ($/oz)(2) | 1,054 | 1,054 | 938 | |||||||||||||||||||||
Total cash costs ($/oz)(3) | 712 | 785 | 836 | |||||||||||||||||||||
Total production costs ($/oz)(3) | 942 | 1,013 | 1,066 | |||||||||||||||||||||
Total cash costs (million US dollars) – per financial statements | 3,297 | 3,135 | 2,916 | 2,493 | 3,071 | 3,067 | ||||||||||||||||||
Production costs (million US dollars) – per financial statements | 2,494 | 3,161 | 3,169 | |||||||||||||||||||||
Capital expenditure (million US dollars) | 1,993 | 2,322 | 1,686 | 857 | 1,209 | 1,993 | ||||||||||||||||||
- Consolidated entities | 1,582 | 2,019 | 1,597 | 726 | 1,018 | 1,582 | ||||||||||||||||||
- Associates and equity accounted joint ventures | 411 | 303 | 89 | |||||||||||||||||||||
- Equity accounted investments | 131 | 191 | 411 | |||||||||||||||||||||
(1) | Including discontinued operations. |
(2) | Ounces of gold sold used in the calculation of all-in sustaining costs per ounce and all-in costs per ounce. |
All-in sustaining costs, all-in costs, total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item |
|
Attributable gold production
Production in 20132015
For the year ended 31 December 2013,2015, AngloGold Ashanti’s total attributable gold production at 4.11including discontinued operations of 3.95 million ounces was 160,000490,000 ounces, or 411 percent, higher when compared tolower than the 20122014 production of 3.944.44 million ounces.
InSouth Africa, gold production increaseddecreased by 718 percent, or 90,000219,000 ounces, in 20132015 as compared to 2012.2014. The increase in outputlower production 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 gradesthat affected the whole region. Furthermore, at Mponeng the lower area mined atprofile was affected by the de-risk plan. At Moab Khotsong, during 2013.the volumes milled and the yield recovered was lower than the previous year. At Kopanang the lower volumes mined and lower grade were as a result of mining in lower grade areas and lower grade tonnes coming from the Uranium-plant clean-up. The increasevolume decrease was partially offset by decreased production at Mponeng due to lower grades.the slow start-up after the safety related stoppages and limited mining flexibility.
Production decreased by 410 percent, or 61,000162,000 ounces, in 2013,2015, as compared to 2012,2014, inContinental Africa mainly due to Obuasi moving into limited operations in 2015, the mill shutdown at Geitasale of in 2013,Namibia in June 2014 and lower recoveredtonnes and grades at Morila, Sadiola and Navachab and lower production at Obuasi due to underground mining challenges and backfill constraints.Siguiri. The decrease was partially offset by higher production at Iduapriem in Ghana and Siguiri in GuineaKibali due to higher gradestonnes treated and higher production starting ahead of schedule at Kibali.in Geita due to higher grades.
Production increaseddecreased by 3310 percent, or 84,00060,000 ounces, in 2013,2015, as compared with 2012,to 2014, 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 pitlower grades mined at Sunrise Dam.
In theAmericas region, production increased by 5six percent, or 48,00046,000 ounces in 2013,2015 as compared with 2012. In Brazil theto 2014. The increase was mainly due the increase of the company’s ownershipprincipally to increases in of Serra Grande to 100 percent, effective July 2012. In Argentinaproduction in Brazil at AGA Mineração and at Cerro Vanguardia the increase in production was mainly due to operational improvements giving rise to an increase in recoveriesresulting from increased tonnage and grades. The increase was partially offset by lower production at Cripple Creek & Victor in North America due to lower recoveredhigher feed grades.
Production in 20122014
For the year ended 31 December 2012,2014, AngloGold Ashanti’s total attributable gold production at 3.94including discontinued operations of 4.44 million ounces was 390,000330,000 ounces, or 98 percent, lower ashigher when compared to the 20112013 production of 4.334.11 million ounces.
InSouth Africa, gold production decreased by 25six percent, or 412,00079,000 ounces, in 20122014 as compared to 2011.2013. The lower outputproduction was mainly due largely to the unprotected strike action from 20 September 2012 to 25 October 2012 andearthquake near the slow start-up thereafterVaal River operations on 5 August 2014, which caused infrastructure damage, as well as safety and associatedrelated stoppages duringacross 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.regional portfolio. The decrease was partially offset by higher production at Geita where gold production increased by 37,000 ounces.Moab Khotsong arising from higher grade due to lower declared waste to reef tonnes.
Production increased by 5nine percent, or 12,000137,000 ounces, in 2012,2014, as compared to 2011,2013, inContinental Africa mainly due to Kibali’s full year of production in 2014, higher production at Siguiri in Guinea due to higher recovered grades and at Geita in Tanzania due to increased tonnage throughput. The strong results were achieved despite Navachab’s sale at the end of June 2014, the continued winding down of operations in Mali and the treatment of low grade stockpile during the current year at Iduapriem in Ghana.
Production increased by 81 percent, or 278,000 ounces, in 2014, as compared with 2013, inAustralia as operationsmainly due to Tropicana’s full year of production in 2014. Lower grades were mined at Sunrise Dam, recovered from flood related disruptionin line with the previous year.mine plan partially offsettting the increase in production in this segment.
In theAmericas region, production increaseddecreased by 7 percent, or 62,0005,000 ounces in 2012,2014, as compared with 2013. In North America at Cripple Creek & Victor production decreased due to 2011. Inore being placed further from the liner. This decrease and a further decrease at Serra Grande were partially offset by increases in production in Brazil theat AGA Mineração and at Cerro Vanguardia. The increase was mainly due to increased tonnage and feed grades at both the increase in the company’s ownership in Serra Grande to 100 percent, effective July 2012,Cuiabá and the ramping up of production from the Córrego do Sítio sulphide project commissioned in July 2011. In Argentinacomplexes. Development work improved and production began from the new orebody at Cerro Vanguardia,Córrego do Sítio (Sulphide II) and full production rates were achieved at 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.underground Mine l.
Total all-in sustaining costs, all-in costs and total cash costs and total production costs
Comparison of all-in sustaining costs in 20132015 with 20122014
All-in sustaining costs per ounce (excluding stockpile impairments) in South Africa decreasedincreased in 20132015 by $69$24 per ounce, or two percent, to $1,120$1,088 per ounce from $1,189$1,064 per ounce in 2012.2014. The decreaseincrease was a result of an increasea 218,000-ounce decrease in gold sold in 2013 and2015 over 2014. The increase was partially offset by the weakening of the rand.rand and a decrease of cost of sales.
In Continental Africa, all-in sustaining costs (excluding stockpile impairments) decreased by $33$153 per ounce, or 316 percent, to $1,202$815 per ounce in 20132015 from $1,235$968 per ounce in 2012.2014. This decrease was mainly due to a decrease in cost of sales and total sustaining capital expenditure. The decrease was partially offset by a 174,000-ounce decrease in gold sold.
In the Americas, all-in sustaining costs (excluding stockpile impairments) decreased by $182 per ounce, or 19 percent, to $792 per ounce in 2015 from $974 per ounce in 2014. This decrease was mainly due to a decrease in costs of sales and an increase of 41,000 ounces in gold sold in 2015.
In Australia, all-in sustaining costs decreased by $111 per ounce, or 11 percent, to $875 per ounce in 2015 from $986 per ounce in 2014, mainly due to a decrease in cost of sales in 2015, which was partially offset by a 47,000-ounce decrease in gold sold in 2015 and a decrease in amortisation.
Comparison of all-in costs in 2015 with 2014
All-in costs per ounce (excluding stockpile impairments) in South Africa increased by $24 per ounce, or two percent, to $1,131 per ounce in 2015 from $1,107 per ounce in 2014. The increase was a result of a 218,000-ounce decrease in gold sold in 2015 compared to 2014. The increase was partially offset by the weakening of the rand and a decrease in all-in sustaining costs.
In Continental Africa, all-in costs (excluding stockpile impairments) decreased by $148 per ounce, or 13 percent, to $957 per ounce in 2015 from $1,105 per ounce in 2014. This decrease was mainly due to a decrease in all-in sustaining costs adjusted for non-controlling interests of $110 million or 6 percent from $1,886 million in 2012 to $1,776 million in 2013. Thisand non-sustaining project capital expenditure. The decrease was partially offset by a 65,000 ounce174,000-ounce decrease in gold sold from 1,527,0001,615,000 ounces in 20122014 to 1,462,0001,441,000 ounces in 2013.2015 and an increase in care and maintenance costs.
In the Americas, all-in sustaining costs (excluding stockpile impairments) decreased by $36$223 per ounce, or 420 percent, to $970$885 per ounce in 20132015 from $1,006$1,108 per ounce in 2012.2014. This decrease was mainly due to ana decrease in all-in sustaining costs and non-sustaining exploration and study costs and a 41,000-ounce increase of 48,000 ounces, or 5 percent, in gold sold from 788,000 ounces in 2013.2014 to 829,000 ounces in 2015.
In Australia, all-in sustaining costs decreased by $304$112 per ounce, or 1811 percent, to $1,376$886 per ounce in 20132015 from $1,680$998 per ounce in 2012,2014, mainly due to an increasea decrease in gold soldall-in sustaining costs in 2015, which was partially offset by an increase in costs. The increasea 47,000-ounce decrease in gold sold and costs are due to Tropicana Gold Mine starting production ahead of schedule.in 2015.
Comparison of total cash costs in 20132015 with 20122014
The currencies of South Africa, Australia, Argentina and Brazil were, on average, weaker against the US dollar during 20132015 as compared to 20122014 which positively impacted total cash costs for 2015.
In South Africa, total cash costs increased by $32 per ounce, or four percent, to $881 per ounce in 2015 from $849 per ounce in 2014. The increase was mainly due to a 219,000-ounce decrease in production partially offset by a decrease in salaries and wages costs, power costs, service related costs and the weakening of the rand.
At Moab Khotsong, total cash costs increased by $16 per ounce, or 2 percent, to $798 per ounce in 2015 from $782 per ounce in 2014 (being the combined cost per ounce of the Moab Khotsong and Great Noligwa mines which are combined in 2015 as one cash-generating unit under Moab Khotsong). The increase was mainly due to a 58,000-ounce decrease in production partially offset by a decrease in salaries and wages costs, service related costs and the weakening of the rand.
At Mponeng, total cash costs increased by $128 per ounce, or 17 percent, to $874 per ounce in 2015 from $746 per ounce in 2014. The increase was mainly due to a 94,000-ounce decrease in production partially offset by a decrease in salaries and wage costs, service related costs and the weakening of the rand.
At Kopanang, total cash costs decreased by $9 per ounce, or one percent, to $1,014 per ounce in 2015 from $1,023 per ounce in 2014. The decrease was mainly due to a decrease in salaries and wages costs, service related costs and the weakening of the rand partially offset by a 24,000-ounce decrease in production.
At the Surface Operations, total cash costs decreased by $29 per ounce, or three percent, to $912 per ounce in 2015 from $941 per ounce in 2014. The decrease was mainly due to a decrease in service-related costs and the weakening of the rand, partially offset by a 30,000-ounce decrease in production.
In Continental Africa, total cash costs decreased by $105 per ounce, or 13 percent, to $678 per ounce in 2015 from $783 per ounce in 2014. The decrease was mainly due to a decrease in salaries and wages costs, stores and consumables costs, fuel costs and power costs partially offset by a 162,000-ounce decrease in production.
Total cash costs at Geita, in Tanzania, decreased by $119 per ounce, or 20 percent, to $480 per ounce in 2015 from $599 per ounce in 2014. The decrease was mainly due to a decrease in fuel costs and contractor costs and a 50,000-ounce increase in production.
In Mali, at Morila, total cash costs decreased by $464 per ounce, or 40 percent, to $698 per ounce in 2015 from $1,162 per ounce in 2014. The decrease was mainly due to a decrease in stores and consumables costs, fuel costs and contractor costs and a 5,000-ounce increase in production. At Sadiola, total cash costs decreased by 20 percent from $1,028 per ounce in 2014 to $818 per ounce in 2015. This decrease was primarily due to a decrease in fuel costs and service related costs partially offset by a 16,000-ounce decrease in production.
In Ghana, at Obuasi, total cash costs decreased by 11 percent in 2015 to $966 per ounce compared to $1,086 per ounce in 2014 mainly due to a decrease in all the costs due to the transition to a limited operating state. At Iduapriem, in Ghana, total cash costs increased by $130 per ounce, or 15 percent, to $995 per ounce in 2015 compared to $865 per ounce in 2014 mainly due to an increase in contractor costs, fuel costs and store costs partially offset by a 16,000-ounce increase in production. At Siguiri, in Guinea, total cash costs increased by four percent to $827 per ounce in 2015 from $799 per ounce in 2014 mainly due to a 35,000-ounce decrease in production partially offset by a decrease in consumable store costs, contractor costs, fuel costs and service related costs.
In the DRC, at Kibali, total cash costs increased by $31 per ounce, or five percent, to $609 per ounce in 2015 from $578 per ounce in 2014 mainly due to an increase in contractor and store costs, partially offset by a 52,000-ounce increase in production.
In the Americas, total cash costs decreased by $100 per ounce, or 15 percent, to $576 per ounce in 2015 from $676 per ounce in 2014. The decrease was mainly due to a decrease in all costs and a 46,000-ounce increase in production.
In Brazil, at AngloGold Ashanti Córrego do Sítio Mineração, total cash costs decreased by $126 per ounce, or 20 percent, to $518 per ounce in 2015 from $644 per ounce in 2014 primarily due to a 18,000-ounce increase in production and a decrease in all costs. At Serra Grande total cash costs decreased by 15 percent or $113 per ounce to $635 per ounce in 2015 as compared to $748 per ounce in 2014 due to a decrease in all costs partially offset by a 4,000 ounces decrease in production. In Argentina at Cerro Vanguardia, total cash costs decreased to $625 per ounce in 2015 from $692 per ounce in 2014 primarily due to a 32,000 ounces increase in production partially offset by higher salaries and wages costs.
In Australia, total cash costs decreased by $102 per ounce, or 13 percent, to $702 per ounce in 2015 from $804 per ounce in 2014 primarily due to a decrease in all costs due to the weakening of the Australian Dollar partially offset by a 59,000 ounces decrease in production.
In Australia, at Sunrise Dam, total cash costs decreased by $135 per ounce, or 12 percent, to $970 per ounce in 2015 compared to $1,105 per ounce in 2014, mainly due to a decrease in all costs and the weakening of the Australian Dollar partially offset by a 46,000-ounce decrease in production. At Tropicana total cash costs decreased by $53 per ounce, or 10 percent, to $492 per ounce in 2015 compared to $545 per ounce in 2014, mainly due to a decrease in fuel costs and the weakening of the Australian Dollar. The decrease was partially offset by a 14,000 ounces decrease in production.
Overall the company’s total cash costs decreased by $73 per ounce, or nine percent, to $712 per ounce in 2015 compared to $785 per ounce in 2014. Most of this decrease is due to, weaker local currencies of $90 per ounce and acquisitions and disposals of $17 per ounce, offset by higher inflation of $30 per ounce.
Comparison of all-in sustaining costs in 2014 with 2013
All-in sustaining costs per ounce (excluding stockpile impairments) in South Africa decreased by $56 per ounce, or five percent, to $1,064 per ounce in 2014 from $1,120 per ounce in 2013. The decrease was a result of a decrease in total sustaining capital expenditure and the weakening of the rand. The decrease was partially offset by a decrease in gold sold of 79,000 ounces in 2014 over 2013.
In Continental Africa, all-in sustaining costs (excluding stockpile impairments) decreased by $234 per ounce, or 19 percent, to $968 per ounce in 2014 from $1,202 per ounce in 2013. This decrease was mainly due to a decrease in cost of sales, total sustaining capital expenditure and a 153,000-ounce increase in gold sold from 1,462,000 ounces in 2013 to 1,615,000 ounces in 2014. The decrease was partially offset by an increase in associates and equity joint ventures’ share of costs and a decrease in amortisation.
In the Americas, all-in sustaining costs (excluding stockpile impairments) decreased by $37 per ounce, or four percent, to $974 per ounce in 2014 from $1,011 per ounce in 2013. This decrease was mainly due to an increase of 12,000 ounces, or two percent, in gold sold in 2014 partially offset by an increase in costs of sales.
In Australia, all-in sustaining costs decreased by $390 per ounce, or 28 percent, to $986 per ounce in 2014 from $1,376 per ounce in 2013, mainly due to an increase in gold sold which was partially offset by an increase in costs. This was mainly due to Tropicana’s ramp up for the full year of production in 2014.
Comparison of all-in costs in 2014 with 2013
All-in costs per ounce (excluding stockpile impairments) in South Africa decreased by $131 per ounce, or 11 percent, to $1,107 per ounce in 2014 from $1,238 per ounce in 2013. The decrease was a result of a decrease in all-in sustaining costs, non-sustaining project capex and the weakening of the rand. The decrease was partially offset by a decrease in gold sold of 79,000 ounces in 2014 over 2013.
In Continental Africa, all-in costs (excluding stockpile impairments) decreased by $433 per ounce, or 28 percent, to $1,105 per ounce in 2014 from $1,538 per ounce in 2013. This decrease was mainly due to a decrease in all-in sustaining costs, non-sustaining project capex, non-sustaining exploration and study costs and a 153,000-ounce increase in gold sold from 1,462,000 ounces in 2013 to 1,615,000 ounces in 2014.
In the Americas, all-in costs (excluding stockpile impairments) decreased by $104 per ounce, or nine percent, to $1,108 per ounce in 2014 from $1,212 per ounce in 2013.
In Australia, all-in costs decreased by $1,075 per ounce, or 52 percent, to $998 per ounce in 2014 from $2,073 per ounce in 2013, mainly due to an increase in gold sold which was partially offset by an increase in costs.
Comparison of total cash costs in 2014 with 2013
The currencies of South Africa, Australia, Argentina and Brazil were, on average, weaker against the US dollar during 2014 as compared to 2013 which positively impacted total cash costs for 2014.
Total cash costs per ounce in South Africa, at Kopanang, Moab Khotsong, Great Noligwa, Tau Tona and the surface operations, decreased by $23marginally to $849 per ounce or 3 percent, toin 2014 from $850 per ounce in 2013 from $873 per ounce in 2012.2013. The decrease was a result of an increase in production in 2013 and the weakening of the rand.rand partially offset by a decrease in production.
In Continental Africa, total cash costs increaseddecreased by $39$86 per ounce, or 510 percent, to $783 per ounce in 2014 from $869 per ounce in 2013 from $830 per ounce in 2012.2013. The increasedecrease was mainly due to the 61,000 ounces decreasea 137,000-ounce increase in production.
Total cash costs at Geita, in Tanzania, increased by 21$84 per ounce, or 16 percent, from $427 per ounce in 2012 to $515 per ounce in 2013.2013 to $599 per ounce in 2014. This was mainly as a resultdue to the utilisation of decreased production and an increase in labour, consumables and contract labour costs.higher cost ore stockpiles.
In Mali, at Morila, total cash costs increased by 1$389 per ounce, or 50 percent, to $1,162 per ounce in 20132014 compared to $773 per ounce compared to $767 per ounce in 2012,2013, mainly due to lower production which was partially offset by a decreaseand an increase in inventory adjustments.contractor costs. At Sadiola, total cash costs increaseddecreased by 14 percent from $1,169$306 per ounce, in 2012 toor 23 percent, from $1,334 per ounce in 2013.2013 to $1,028 per ounce in 2014. This increasedecrease was primarily due to lower production.a decrease in contractor costs. Total cash costs at Yatela decreased by 13$92 per ounce, or six percent, from $1,758 per ounce in 2012 to $1,530 per ounce in 2013 to $1,438 per ounce in 2014 mainly due to a decrease in contract labourall the costs which was partially offset by lower production.
In Ghana, at Obuasi, total cash costs increaseddecreased by 18$320 per ounce, or 23 percent, in 20132014 to $1,086 per ounce compared to $1,406 per ounce compared to $1,187 per ounce in 20122013 mainly due to a decrease in all the decline in production.costs due to the transition to a limited operating state. At Iduapriem, in Ghana, total cash costs decreased by 10 percentincreased marginally to $865 per ounce in 2014 compared to $861 per ounce in 2013 compared to $955 per ounce in 2012 mainly due to increaseddecreased production which was partially offset by an increasea decrease in contract laboursalaries, consumable store costs, power costs and contractor costs. At Siguiri, in Guinea, total cash costs decreased by 2$119 per ounce, or 13 percent, to $799 per ounce in 2014 from $918 per ounce in 2013 from $938 per ounce in 2012 mainly due to an increase in production which was partially offset by an increaseand a decrease in ore stockpile adjustmentsconsumable store costs, contractor costs and increased costsservice related to labour.costs.
In the DRC, at Kibali, total cash costs wereincreased by $107 per ounce, or 23 percent, to $578 per ounce in 2014 from $471 per ounce in 2013. Kibali began commercial2013 mainly due to an increase in all the costs partially offset by an increase in production. The increase in production and costs are due to Kibali’s ramp up to the full year of production in October 2013.2014.
In the Americas, total cash costs increased marginallyby $23 per ounce, or four percent, to $671$676 per ounce in 20132014 from $669$653 per ounce in 2012.2013. The increase was mainly due to an increase in commodity prices, labourconsumable store costs, and service relatedcontractor costs partially offset by ana 15,000-ounce increase in production.
In the United States, at Cripple Creek, total cash costs increased by 15 percent or $94 per ounce to $732 per ounce in 2013 from $638 per ounce in 2012 due primarily to a decline in production, rising commodity prices (stores, in particular) and increased labour costs. In Brazil, at AngloGold Ashanti Córrego do Sítio Mineração, total cash costs decreased by 7 percentmarginally to $644 per ounce in 2014 from $646 per ounce in 2013 from $696 per ounce in 2012 primarily due to a decreasehigher production partially offset by an increase in service related costs and higher production.consumable store costs. At Serra Grande total cash costs decreasedincreased by 12$29 per ounce, or four percent, or $102to $748 per ounce in 2014 as compared to $719 per ounce in 2013 as compareddue to $821an increase in service related costs and a decrease in production. In Argentina at Cerro Vanguardia, total cash costs increased by $70 per ounce, or 11 percent, to $692 per ounce in 20122014 from $622 per ounce in 2013 primarily due to a decreasean increase in contractor costs and service related and store costs.costs partially offset by higher production.
In Australia, total cash costs decreased by $164$243 per ounce, or 1423 percent, to $804 per ounce in 2014 from $1,047 per ounce in 2013 from $1,211 per ounce in 2012.2013.
In Australia, at Sunrise Dam, total cash costs decreased to $1,105 per ounce in 20132014 compared to $1,110 per ounce comparedin 2013, mainly due to $1,126the weakening of the Australian Dollar. The decrease was partially offset by a decrease in production. At Tropicana total cash costs decreased to $545 per ounce in 2012,2014 compared to $568 per ounce in 2013, mainly due to an increase in production and the weakening of the Australian Dollar. The decrease was partially offset by an increase in consumable store costs, power costs, contractor costs and service related costs. The increase in production and costs was mainly due to a reduction in recovery from settled insurance claims as compared with 2012 during which there was a reimbursement of costs relatingTropicana’s ramp up to the pitwall failure at Sunrise Dam (Australia) in the amountfull year of $30 million. At Tropicana Gold Mine total cash costs were $568 per ounce in 2013. Tropicana began commercial production in October 2013.2014.
Overall the company’s total cash costs in 2013 increased marginally to $830decreased by $51 per ounce, comparedor six percent, to $829$785 per ounce in 2012.2014 compared to $836 per ounce in 2013. Of these increased costs, inflationthis decrease, weaker local currencies accounted for $51$58 per ounce and unfavourable inventory movementsacquisitions and disposals accounted for $10$26 per ounce, offset by higher production and weaker local currencies.
Comparisoninflation 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 in 2012 with 2011
The local currencies of South Africa, Argentina and Brazil were, on average, weaker against the US dollar during 2012 compared to 2011 which positively impacted total cash costs for 2012.
Total cash costs$44 per ounce in South Africa increased by $179 per ounce, or 26 percent, to $873 per ounce in 2012 from $694 per ounce in 2011, largely a result of lower production due to the unprotected strike action during September and October 2012, partially offset by weakening of the rand.
In Continental Africa, total cash costs increased by $132 per ounce, or 19 percent, to $830 per ounce in 2012 from $698 per ounce in 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 consumables and contract labour costs. This increase was partially offset by increased production.
In Mali, at Morila, total cash costs decreased in 2012 by 5 percent to $767 per ounce compared to $810 per ounce in 2011, mainly due to a decrease in inventory on hand allocations which was partially offset by lower production. At Sadiola, total cash costs increased by 43 percent from $816 per ounce in 2011 to $1,169 per ounce in 2012. This increase was primarily driven by lower production, increases in fuel prices, mining contractor costs and inventory adjustments. The total cash costs at Yatela increased by 15 percent from $1,530 per ounce in 2011 to $1,758 per ounce in 2012, mainly due to an increase in inventory on hand allocations.
In Ghana, at Obuasi, total cash costs increased in 2012 by 38 percent to $1,187 per ounce compared to $862 per ounce in 2011, mainly due to the decline in production and an increase in the power tariff, other service related costs and labour costs. At Siguiri, in Guinea, total cash costs increased 10 percent to $938 per ounce in 2012 from $849 per ounce in 2011 mainly due to the decline in production, higher fuel prices, an increase in inventory on hand allocations and increased costs related to labour.
In the Americas, total cash costs increased by $145 per ounce, or 28 percent, to $669 per ounce in 2012 from $524 per ounce in 2011. This was mainly due to increased commodity prices, labour costs and service related costs partially offset by an increase in production.
In the United States, total cash costs at Cripple Creek increased by 13 percent to $638 per ounce in 2012 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 a 12,000 ounce increase in production as operations recovered from the flood related disruption the previous year and the effect of a $30 million recovery from settled insurance claims for the flood disruptions. The decrease was partially offset by the stronger Australian Dollar which negatively impacted cash costs per ounce.
Overall the company’s total cash costs in 2012 increased by $126 per ounce, or 18 percent, when compared to the previous year. Of these increased costs, inflation accounted for $62 per ounce and lower production accounted for $101 per ounce. The weakening of local currencies accounted for $42 per ounce, partially offsetting the increase.
Reconciliation of all-in sustaining costs and all-in costs to cost of sales per the 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 supplement 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” metricand “all-in cost” metrics which AngloGold Ashanti provides in thethis annual report on Form 20-F, will be helpful to investors, governments, local communities and other stakeholders in understanding the economics of gold mining. “All-in sustaining costs” is an extension of the existing “cash“total cash cost” metric and incorporates all costs related to sustaining production and in particular recognises the sustaining capital expenditures associated with developing and maintaining gold mines. In addition, this metric includes the cost associated with Corporate Office structures that support these operations, the community and rehabilitation costs attendant with responsible mining and any exploration and evaluation cost associated with sustaining current operations. “All-in sustaining $/oz”costs per ounce” is arrived at by dividing the dollar value of the sum of these cost metrics, by the ounces of gold sold. “All-in cost” includes additional costs which reflect the varying costs of producing gold over the life-cycle of a mine including costs incurred at new operations and costs related to major projects at existing operations, which are expected to increase production. “All-in cost per ounce” is arrived at by dividing the dollar value of the sum of these cost metrics, by the ounces of gold sold.
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 non-GAAP measures. The Gold Institute, which has been incorporated into the National Mining Association, is 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 amortisation of tangible and intangible assets, rehabilitation costs and 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 amortisation, depreciation and rehabilitation costs.
Total production costs as calculated and reported by AngloGold Ashanti include total cash costs, plus amortisation of tangible and intangible assets, retrenchment costs and rehabilitation and other non-cash costs. Total production costs per ounce are calculated by dividing attributable total production costs by attributable ounces of gold produced.
TotalAll-in sustaining costs, all-in sustaining costs per ounce, all-in costs, all-in costs per ounce, total cash costs, total cash costs per ounce, total production costs and total production costs per ounce should not be considered by investors in isolation or as alternatives to production costs, profit/(loss) applicable to equity shareholders, profit/(loss) before taxation, cash flows from operating activities or any other measure of financial performance presented in accordance with IFRS or as an indicator of the company’s performance. While the WGC has published guidance on how to define all-in sustaining costs and all-in costs and 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 ouncethese metrics 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 all-in sustaining costs, all-in costs, 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 changetrend 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 ofat other gold mining companies.
A reconciliation of both cost of sales and total cash costs as included in the company’s audited financial statements to all-in sustaining costs, all-in costs, total cash costs and total production costs for each of the three years in the period ended 31 December 20132015 is presented below. In addition, the company has provided below detail of the attributable ounces of gold produced and sold by mine for each of those periods.
For the year ended 31 December 20132015
Operations in South Africa
(in $ millions, except as otherwise noted)
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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 | - |
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All-in sustaining costs | ||||||||||||||||||||||||||||||||||||||||
Cost of sales per financial statements | 148 | 260 | 408 | 251 | 230 | 481 | 194 | - | 1,083 | (2 | ) | |||||||||||||||||||||||||||||
Amortisation of tangible and intangible assets | (24 | ) | (47 | ) | (71 | ) | (53 | ) | (40 | ) | (93 | ) | (17 | ) | - | (181 | ) | (9 | ) | |||||||||||||||||||||
Corporate administration and marketing related to current operations | - | - | - | - | - | - | - | - | - | 77 | ||||||||||||||||||||||||||||||
Inventory writedown to net realisable value and other stockpile adjustments | - | - | - | - | - | - | - | 1 | 1 | (1 | ) | |||||||||||||||||||||||||||||
Total sustaining capital expenditure | 21 | 46 | 66 | 59 | 28 | 87 | 17 | 8 | 178 | 3 | ||||||||||||||||||||||||||||||
All-in sustaining costs | 145 | 259 | 403 | 257 | 218 | 475 | 194 | 9 | 1,081 | 68 | ||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | - | - | - | - | - | - | - | - | - | 8 | ||||||||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 145 | 259 | 403 | 257 | 218 | 475 | 194 | 9 | 1,081 | 76 | ||||||||||||||||||||||||||||||
Adjusted for stockpile write-offs | - | - | - | - | - | - | - | (1 | ) | (1 | ) | - | ||||||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 145 | 259 | 403 | 257 | 218 | 475 | 194 | 8 | 1,080 | 76 | ||||||||||||||||||||||||||||||
All-in sustaining costs | 145 | 259 | 403 | 257 | 218 | 475 | 194 | 9 | 1,081 | 68 | ||||||||||||||||||||||||||||||
Non-sustaining project capital expenditure | - | 2 | 2 | 26 | - | 26 | - | - | 28 | - | ||||||||||||||||||||||||||||||
Technology improvements | - | - | - | - | - | - | - | 15 | 15 | - | ||||||||||||||||||||||||||||||
Non-sustaining exploration and study costs | - | - | - | - | - | - | - | - | - | 11 | ||||||||||||||||||||||||||||||
Corporate and social responsibility costs not related to current operations | - | - | - | - | - | - | - | - | - | 17 | ||||||||||||||||||||||||||||||
All-in costs | 145 | 261 | 405 | 283 | 218 | 501 | 194 | 24 | 1,124 | 96 | ||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | - | - | - | - | - | - | 8 | ||||||||||||||||||||||||||||||
All-in costs adjusted for non-controlling interests and non-gold producing companies | 145 | 261 | 405 | 283 | 218 | 501 | 194 | 24 | 1,124 | 104 | ||||||||||||||||||||||||||||||
Adjusted for stockpile write-offs | - | - | - | - | - | - | - | (1 | ) | (1 | ) | - | ||||||||||||||||||||||||||||
All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 145 | 261 | 405 | 283 | 218 | 501 | 194 | 23 | 1,123 | 104 | ||||||||||||||||||||||||||||||
Gold sold - oz (000)(3) | 118 | 254 | 371 | 219 | 209 | 428 | 193 | 13 | 1,005 | - | ||||||||||||||||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit - $/oz(4) | 1,226 | 1,018 | 1,084 | 1,170 | 1,044 | 1,108 | 1,006 | - | 1,088 | - | ||||||||||||||||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) - $/oz(4) | 1,226 | 1,024 | 1,088 | 1,290 | 1,044 | 1,170 | 1,006 | - | 1,131 | - |
Adjusting for non-controlling interest of items included in calculation, to disclose the attributable portions only. Other consists of heap leach inventory. |
(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, all-in 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 and all-in 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. |
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For the year ended 31 December 20132015
Operations in South Africa
(in $ millions, except as otherwise noted)
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Total cash costs | ||||||||||||||||||||||||||||||||||||||||
Total cash costs per financial statements | 119 | 202 | 322 | 191 | 185 | 376 | 176 | - | 874 | (9 | ) | |||||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | - | - | - | - | - | - | - | - | - | 9 | ||||||||||||||||||||||||||||||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | 119 | 202 | 322 | 191 | 185 | 376 | 176 | - | 874 | - | ||||||||||||||||||||||||||||||
Retrenchment costs | 2 | 3 | 4 | 2 | 1 | 3 | - | - | 7 | - | ||||||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | 3 | 8 | 11 | 5 | 4 | 9 | 1 | - | 21 | (1 | ) | |||||||||||||||||||||||||||||
Amortisation of tangible assets | 22 | 42 | 65 | 49 | 35 | 84 | 15 | - | 164 | 5 | ||||||||||||||||||||||||||||||
Amortisation of intangible assets | 2 | 4 | 7 | 4 | 4 | 8 | 2 | - | 17 | 3 | ||||||||||||||||||||||||||||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 148 | 259 | 409 | 251 | 229 | 480 | 194 | - | 1,083 | 7 | ||||||||||||||||||||||||||||||
Gold produced – oz (000)(3) | 117 | 254 | 371 | 219 | 209 | 428 | 193 | 12 | 1,004 | - | ||||||||||||||||||||||||||||||
Total cash costs per unit – $/oz(4) | 1,014 | 798 | 867 | 874 | 883 | 879 | 912 | - | 881 | - | ||||||||||||||||||||||||||||||
Total production costs per unit – $/oz(4) | 1,258 | 1,025 | 1,099 | 1,146 | 1,098 | 1,122 | 1,007 | - | 1,091 | - |
For the year ended 31 December 2015
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 |
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Cost of sales per financial statements | - | 219 | 64 | 280 | - | - | 404 | 2 | 969 | |||||||||||||||||||||||||||
Amortisation of tangible and intangible assets | - | (32 | ) | (22 | ) | (26 | ) | - | - | (148 | ) | (2 | ) | (230 | ) | |||||||||||||||||||||
Adjusted for decommissioning amortisation | - | - | 4 | 2 | - | - | 3 | - | 9 | |||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of costs(2) | 179 | - | - | - | 35 | 56 | - | - | 270 | |||||||||||||||||||||||||||
Inventory writedown to net realisable value and other stockpile adjustments | - | 2 | - | - | 2 | - | 3 | - | 7 | |||||||||||||||||||||||||||
Sustaining exploration and study costs | - | 1 | 16 | 6 | - | - | 7 | 1 | 31 | |||||||||||||||||||||||||||
Total sustaining capital expenditure | 7 | 15 | 3 | 29 | 5 | 4 | 116 | 1 | 180 | |||||||||||||||||||||||||||
All-in sustaining costs | 186 | 205 | 65 | 291 | 42 | 60 | 385 | 2 | 1,236 | |||||||||||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | - | - | - | (44 | ) | - | - | - | - | (44 | ) | |||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 186 | 205 | 65 | 247 | 42 | 60 | 385 | 2 | 1,192 | |||||||||||||||||||||||||||
Adjusted for stockpile write-offs | - | (12 | ) | - | - | (2 | ) | - | (3 | ) | - | (17 | ) | |||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 186 | 193 | 65 | 247 | 40 | 60 | 382 | 2 | 1,175 | |||||||||||||||||||||||||||
All-in sustaining costs | 186 | 205 | 65 | 291 | 42 | 60 | 385 | 2 | 1,236 | |||||||||||||||||||||||||||
Non-sustaining project capital expenditure | 117 | - | 20 | - | - | (2 | ) | - | - | 135 | ||||||||||||||||||||||||||
Non-sustaining exploration and study costs | 1 | - | - | 1 | - | - | - | - | 2 | |||||||||||||||||||||||||||
Care and maintenance costs | - | - | 67 | - | - | - | - | - | 67 | |||||||||||||||||||||||||||
Corporate and social responsibility costs not related to current operations | - | - | 1 | - | - | - | - | - | 1 | |||||||||||||||||||||||||||
All-in costs | 304 | 205 | 153 | 292 | 42 | 58 | 385 | 2 | 1,441 | |||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | (44 | ) | - | - | - | - | (44 | ) | |||||||||||||||||||||||||
All-in costs adjusted for non-controlling interests and non-gold producing companies | 304 | 205 | 153 | 248 | 42 | 58 | 385 | 2 | 1,397 | |||||||||||||||||||||||||||
Adjusted for stockpile write-offs | - | (12 | ) | - | - | (2 | ) | - | (3 | ) | - | (17 | ) | |||||||||||||||||||||||
All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 304 | 193 | 153 | 248 | 40 | 58 | 382 | 2 | 1,380 | |||||||||||||||||||||||||||
Gold sold – oz (000)(3) | 290 | 190 | 56 | 256 | 49 | 69 | 531 | - | 1,441 | |||||||||||||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit – $/oz(4) | 642 | 1,020 | 1,185 | 965 | 815 | 886 | 717 | - | 815 | |||||||||||||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) – $/oz(4) | 1,051 | 1,020 | 2,750 | 969 | 815 | 852 | 717 | - | 957 |
For the year ended 31 December 20132015
Operations in DRC, Ghana, Guinea, Mali and Tanzania
(in $ millions, except as otherwise noted)
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Total cash costs | ||||||||||||||||||||||||||||||||||||
Total cash costs per financial statements | - | 192 | 51 | 248 | - | - | 253 | (1 | ) | 743 | ||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | - | - | - | (37 | ) | - | - | - | - | (37 | ) | |||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of total cash costs(2) | 176 | - | - | - | 34 | 57 | - | - | 267 | |||||||||||||||||||||||||||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | 176 | 192 | 51 | 211 | 34 | 57 | 253 | (1 | ) | 973 | ||||||||||||||||||||||||||
Retrenchment costs | - | - | - | - | - | - | - | 1 | 1 | |||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | - | (4 | ) | (12 | ) | (1 | ) | - | - | (3 | ) | 1 | (19 | ) | ||||||||||||||||||||||
Amortisation of tangible assets | - | 32 | 22 | 26 | - | - | 148 | - | 228 | |||||||||||||||||||||||||||
Amortisation of intangible assets | - | - | - | - | - | - | - | 2 | 2 | |||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies(1) | - | - | - | (4 | ) | - | - | - | - | (4 | ) | |||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of total cash costs(2) | 90 | - | - | - | 11 | 10 | - | - | 111 | |||||||||||||||||||||||||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 266 | 220 | 61 | 232 | 45 | 67 | 398 | 3 | 1,292 | |||||||||||||||||||||||||||
Gold produced - oz (000)(3) | 289 | 193 | 53 | 255 | 49 | 69 | 527 | - | 1,435 | |||||||||||||||||||||||||||
Total cash costs per unit - $/oz(4) | 609 | 995 | 966 | 827 | 698 | 818 | 480 | - | 678 | |||||||||||||||||||||||||||
Total production costs per unit - $/oz(4) | 920 | 1,142 | 1,159 | 912 | 924 | 959 | 756 | - | 900 |
For the year ended 31 December 2015
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 |
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All-in sustaining costs | ||||||||||||||||||||||||||||||||||||
Cost of sales per financial statements | 239 | 266 | 20 | 525 | 244 | 335 | 137 | 3 | 719 | |||||||||||||||||||||||||||
Amortisation of tangible and intangible assets | (25 | ) | (88 | ) | (4 | ) | (117 | ) | (58 | ) | (125 | ) | (57 | ) | - | (240 | ) | |||||||||||||||||||
Adjusted for decommissioning amortisation | - | 3 | - | 3 | 1 | - | - | - | 1 | |||||||||||||||||||||||||||
Corporate administration and marketing related to current operations | - | - | - | - | - | 1 | - | - | 1 | |||||||||||||||||||||||||||
Inventory writedown to net realisable value and other stockpile adjustments | - | - | - | - | - | 1 | 3 | 1 | 5 | |||||||||||||||||||||||||||
Sustaining exploration and study costs | 1 | 8 | 6 | 15 | 3 | 2 | 2 | 9 | 16 | |||||||||||||||||||||||||||
Total sustaining capital expenditure | 29 | 48 | 1 | 78 | 67 | 89 | 33 | 1 | 190 | |||||||||||||||||||||||||||
All-in sustaining costs | 244 | 237 | 23 | 504 | 257 | 303 | 118 | 14 | 692 | |||||||||||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | - | - | - | - | (19 | ) | - | - | (9 | ) | (28 | ) | ||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 244 | 237 | 23 | 504 | 238 | 303 | 118 | 5 | 664 | |||||||||||||||||||||||||||
Adjusted for stockpile write-offs | - | - | - | - | - | (1 | ) | (4 | ) | - | (5 | ) | ||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 244 | 237 | 23 | 504 | 238 | 302 | 114 | 5 | 659 | |||||||||||||||||||||||||||
All-in sustaining costs | 244 | 237 | 23 | 504 | 257 | 303 | 118 | 14 | 692 | |||||||||||||||||||||||||||
Non-sustaining project capital expenditure | - | - | - | - | - | - | - | 6 | 6 | |||||||||||||||||||||||||||
Non-sustaining exploration and study costs | - | - | 6 | 6 | - | 2 | - | 41 | 43 | |||||||||||||||||||||||||||
Corporate and social responsibility costs not related to current operations | - | - | - | - | - | 7 | - | 1 | 8 | |||||||||||||||||||||||||||
All-in costs | 244 | 237 | 29 | 510 | 257 | 312 | 118 | 62 | 749 | |||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | - | (19 | ) | - | - | - | (19 | ) | |||||||||||||||||||||||||
All-in costs adjusted for non-controlling interests and non-gold producing companies | 244 | 237 | 29 | 510 | 238 | 312 | 118 | 62 | 730 | |||||||||||||||||||||||||||
Adjusted for stockpile write-offs | - | - | - | - | - | (1 | ) | (4 | ) | - | (5 | ) | ||||||||||||||||||||||||
All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 244 | 237 | 29 | 510 | 238 | 311 | 114 | 62 | 725 | |||||||||||||||||||||||||||
Gold sold – oz (000)(3) | 221 | 354 | - | 575 | 273 | 423 | 133 | - | 829 | |||||||||||||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit – $/oz(4) | 1,110 | 671 | - | 875 | 873 | 712 | 861 | - | 792 | |||||||||||||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) – $/oz(4) | 1,110 | 671 | - | 886 | 874 | 733 | 865 | - | 885 |
For the year ended 31 December 20132015
Operations in Australia, Argentina and Brazil
(in $ millions, except as otherwise noted)
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Total cash costs | ||||||||||||||||||||||||||||||||||||
Total cash costs per financial statements | 210 | 169 | 14 | 393 | 188 | 218 | 84 | 2 | 492 | |||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | - | - | - | - | (14 | ) | - | - | - | (14 | ) | |||||||||||||||||||||||||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | 210 | 169 | 14 | 393 | 174 | 218 | 84 | 2 | 478 | |||||||||||||||||||||||||||
Retrenchment costs | - | - | - | - | 1 | 2 | - | - | 3 | |||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | 1 | 3 | - | 4 | 1 | (10 | ) | (6 | ) | - | (15 | ) | ||||||||||||||||||||||||
Amortisation of tangible assets | 25 | 88 | 4 | 117 | 58 | 113 | 52 | - | 223 | |||||||||||||||||||||||||||
Amortisation of intangible assets | - | - | 1 | 1 | - | 12 | 5 | - | 17 | |||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies(1) | - | - | - | (5 | ) | - | - | - | (5 | ) | ||||||||||||||||||||||||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 236 | 260 | 19 | 515 | 229 | 335 | 135 | 2 | 701 | |||||||||||||||||||||||||||
Gold produced – oz (000)(3) | 216 | 344 | - | 560 | 278 | 421 | 132 | - | 831 | |||||||||||||||||||||||||||
Total cash costs per unit – $/oz(4) | 970 | 492 | - | 702 | 625 | 518 | 635 | - | 576 | |||||||||||||||||||||||||||
Total production costs per unit – $/oz(4) | 1,089 | 755 | - | 919 | 825 | 796 | 1,025 | - | 845 |
For the year ended 31 December 2015
AngloGold Ashanti operations – Total
(in $ millions, except as otherwise noted)
| ||||
All-in sustaining costs | ||||
Cost of sales per financial statements | ||||
Amortisation of tangible and intangible assets | ( | ) | ||
Adjusted for | ||||
| ||||
Corporate administration and marketing related to current operations | ||||
Associates and equity accounted joint ventures’ share of costs | ||||
Inventory writedown to net realisable value and other stockpile adjustments | 12 | |||
Sustaining exploration and study costs | ||||
Total sustaining capital expenditure | ||||
All-in sustaining costs | ||||
Adjusted for non-controlling interests and non-gold producing companies | ( | ) | ||
All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | ||||
Adjusted for stockpile write-offs | (23 | ) | ||
All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 3,494 | |||
All-in sustaining costs | 3,581 | |||
Non-sustaining project capital expenditure | 169 | |||
Technology improvements | 16 | |||
Non-sustaining exploration and study costs | 62 | |||
Care and maintenance costs | 67 | |||
Corporate and social responsibility costs not related to current operations | 26 | |||
All-in costs | 3,921 | |||
Adjusted for non-controlling interests and non-gold producing companies | (55 | ) | ||
All-in costs adjusted for non-controlling interests and non-gold producing companies | 3,866 | |||
Adjusted for stockpile write-offs | (23 | ) | ||
All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 3,843 | |||
Gold sold | ||||
All-in sustaining cost (excluding stockpile | ||||
All-in cost per unit (excluding stockpile write-offs) – $/oz | 1,001 |
For the year ended 31 December 2015
AngloGold Ashanti operations – Total
(in $ millions, except as otherwise noted)
TOTAL | ||||
Total cash costs | ||||
Total cash costs per financial statements | ||||
Adjusted for non-controlling interests, | ( | ) | ||
Associates and equity accounted joint ventures’ share of total cash costs | ||||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | ||||
Retrenchment costs | ||||
Rehabilitation and other non-cash costs | ) | |||
Amortisation of tangible assets | ||||
Amortisation of intangible assets(2) | ||||
Adjusted for non-controlling interests, | ) | |||
Associates and equity accounted joint ventures’ share of | ||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | ||||
Gold produced – oz (000) | ||||
Total cash | ||||
Total production |
For the year ended 31 December 20122014
Operations in South Africa
(in $ millions, except as otherwise noted)
| ||||||||||||||||||||||||||||||||||||||||
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 | - |
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All-in sustaining costs | ||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per financial statements | 94 | 201 | 217 | 512 | 313 | 268 | 581 | 231 | - | 1,324 | - | |||||||||||||||||||||||||||||||||
Amortisation of tangible and intangible assets | (8 | ) | (50 | ) | (50 | ) | (107 | ) | (71 | ) | (58 | ) | (129 | ) | (22 | ) | 1 | (258 | ) | (7 | ) | |||||||||||||||||||||||
Adjusted for decommissioning amortisation | 1 | - | - | 1 | - | - | - | 1 | (2 | ) | - | - | ||||||||||||||||||||||||||||||||
Corporate administration and marketing related to current operations | - | - | - | - | - | - | - | - | 1 | 1 | 85 | |||||||||||||||||||||||||||||||||
Inventory writedown to net realisable value and other stockpile adjustments | - | - | - | - | - | - | - | - | 1 | 1 | 1 | |||||||||||||||||||||||||||||||||
Total sustaining capital expenditure | 7 | 26 | 44 | 76 | 65 | 35 | 100 | 46 | 7 | 230 | 5 | |||||||||||||||||||||||||||||||||
All-in sustaining costs | 94 | 177 | 211 | 482 | 307 | 245 | 552 | 256 | 8 | 1,298 | 84 | |||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | - | - | - | - | - | - | - | - | - | - | 6 | |||||||||||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 94 | 177 | 211 | 482 | 307 | 245 | 552 | 256 | 8 | 1,298 | 90 | |||||||||||||||||||||||||||||||||
Adjusted for stockpile write-offs | - | - | - | - | - | - | - | - | (1 | ) | (1 | ) | - | |||||||||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 94 | 177 | 211 | 482 | 307 | 245 | 552 | 256 | 7 | 1,297 | 90 | |||||||||||||||||||||||||||||||||
All-in sustaining costs | 94 | 177 | 211 | 482 | 307 | 245 | 552 | 256 | 8 | 1,298 | 84 | |||||||||||||||||||||||||||||||||
Non-sustaining project capital expenditure | - | - | 2 | 2 | 32 | - | 32 | - | - | 34 | - | |||||||||||||||||||||||||||||||||
Technology improvements | - | - | - | - | - | - | - | - | 19 | 19 | - | |||||||||||||||||||||||||||||||||
Non-sustaining exploration and study costs | - | - | - | - | - | - | - | - | - | - | 5 | |||||||||||||||||||||||||||||||||
Corporate and social responsibility costs not related to current operations | - | - | - | - | - | - | - | - | - | - | 7 | |||||||||||||||||||||||||||||||||
All-in costs | 94 | 177 | 213 | 484 | 339 | 245 | 584 | 256 | 27 | 1,351 | 96 | |||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | - | - | - | - | - | - | - | 6 | |||||||||||||||||||||||||||||||||
All-in costs adjusted for non-controlling interests and non-gold producing companies | 94 | 177 | 213 | 484 | 339 | 245 | 584 | 256 | 27 | 1,351 | 102 | |||||||||||||||||||||||||||||||||
Adjusted for stockpile write-offs | - | - | - | - | - | - | - | - | (1 | ) | (1 | ) | - | |||||||||||||||||||||||||||||||
All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 94 | 177 | 213 | 484 | 339 | 245 | 584 | 256 | 26 | 1,350 | 102 | |||||||||||||||||||||||||||||||||
Gold sold - oz (000)(3) | 78 | 140 | 234 | 452 | 313 | 232 | 544 | 223 | 3 | 1,223 | - | |||||||||||||||||||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit – $/oz(4) | 1,185 | 1,256 | 903 | 1,061 | 981 | 1,059 | 1,014 | 1,153 | - | 1,064 | - | |||||||||||||||||||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) – $/oz(4) | 1,185 | 1,256 | 909 | 1,064 | 1,085 | 1,059 | 1,074 | 1,153 | - | 1,107 | - |
(1) | Adjusting for non-controlling interest of items included in calculation, to disclose the attributable portions only. Other consists of heap leach inventory. |
(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, all-in 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 |
(5) | Corporate includes non-gold producing subsidiaries. |
|
For the year ended 31 December 20122014
Operations in South Africa
(in $ millions, except as otherwise noted)
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Total cash costs | ||||||||||||||||||||||||||||||||||||||||||||
Total cash costs per financial statements | 84 | 144 | 160 | 388 | 233 | 205 | 438 | 210 | (1) | 1,035 | (8 | ) | ||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | - | - | - | - | - | - | - | - | - | - | 7 | |||||||||||||||||||||||||||||||||
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 | 84 | 144 | 160 | 388 | 233 | 205 | 438 | 210 | (1 | ) | 1,035 | (1 | ) | |||||||||||||||||||||||||||||||
Retrenchment costs | 2 | 5 | 3 | 9 | 4 | 3 | 7 | - | (1 | ) | 16 | - | ||||||||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | 1 | 3 | 4 | 8 | 4 | 3 | 8 | - | 1 | 16 | - | |||||||||||||||||||||||||||||||||
Amortisation of tangible assets | 6 | 47 | 46 | 100 | 65 | 54 | 119 | 20 | 1 | 239 | 5 | |||||||||||||||||||||||||||||||||
Amortisation of intangible assets | 1 | 2 | 4 | 8 | 5 | 4 | 9 | 2 | 1 | 19 | 3 | |||||||||||||||||||||||||||||||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 94 | 201 | 217 | 513 | 311 | 269 | 581 | 232 | 1 | 1,325 | 7 | |||||||||||||||||||||||||||||||||
Gold produced - oz (000)(3) | 78 | 141 | 234 | 453 | 313 | 232 | 544 | 223 | 3 | 1,223 | - | |||||||||||||||||||||||||||||||||
Total cash costs per unit – $/oz(4) | 1,074 | 1,023 | 685 | 857 | 746 | 882 | 804 | 941 | - | 849 | - | |||||||||||||||||||||||||||||||||
Total production costs per unit – $/oz(4) | 1,208 | 1,431 | 928 | 1,132 | 1,001 | 1,159 | 1,068 | 1,040 | - | 1,087 | - |
For the year ended 31 December 2014
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 | - | 192 | 303 | 314 | - | - | - | 26 | 403 | 5 | 1,243 | |||||||||||||||||||||||||||||||||
Amortisation of tangible and intangible assets | - | (24 | ) | (19 | ) | (32 | ) | - | - | - | - | (99 | ) | (4 | ) | (178 | ) | |||||||||||||||||||||||||||
Adjusted for decommissioning amortisation | - | - | 1 | 4 | - | - | - | - | 2 | (1 | ) | 6 | ||||||||||||||||||||||||||||||||
Corporate administration and marketing related to current operations | - | - | - | - | - | - | - | - | - | 1 | 1 | |||||||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of costs(2) | 133 | - | - | - | 51 | 89 | 20 | - | - | 1 | 294 | |||||||||||||||||||||||||||||||||
Inventory writedown to net realisable value and other stockpile adjustments | - | - | - | - | - | - | 8 | - | - | - | 8 | |||||||||||||||||||||||||||||||||
Sustaining exploration and study costs | - | - | 13 | 2 | - | 1 | - | - | 2 | (1 | ) | 17 | ||||||||||||||||||||||||||||||||
Total sustaining capital expenditure | 3 | 21 | 43 | 30 | 6 | 6 | - | 1 | 129 | 1 | 240 | |||||||||||||||||||||||||||||||||
All-in sustaining costs | 136 | 189 | 341 | 318 | 57 | 96 | 28 | 27 | 437 | 2 | 1,631 | |||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | - | - | - | (48 | ) | - | - | - | - | - | - | (48 | ) | |||||||||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 136 | 189 | 341 | 270 | 57 | 96 | 28 | 27 | 437 | 2 | 1,583 | |||||||||||||||||||||||||||||||||
Adjusted for stockpile write-offs | - | - | - | - | - | - | (8 | ) | (2 | ) | (9 | ) | - | (19 | ) | |||||||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 136 | 189 | 341 | 270 | 57 | 96 | 20 | 25 | 428 | 2 | 1,564 | |||||||||||||||||||||||||||||||||
All-in sustaining costs | 136 | 189 | 341 | 318 | 57 | 96 | 28 | 27 | 437 | 2 | 1,631 | |||||||||||||||||||||||||||||||||
Non-sustaining project capital expenditure | 176 | - | 38 | - | - | - | - | - | - | - | 214 | |||||||||||||||||||||||||||||||||
Non-sustaining exploration and study costs | 2 | - | - | 5 | - | - | - | - | - | - | 7 | |||||||||||||||||||||||||||||||||
All-in costs | 314 | 189 | 379 | 323 | 57 | 96 | 28 | 27 | 437 | 2 | 1,852 | |||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | (48 | ) | - | - | - | - | - | - | (48 | ) | |||||||||||||||||||||||||||||||
All-in costs adjusted for non-controlling interests and non-gold producing companies | 314 | 189 | 379 | 275 | 57 | 96 | 28 | 27 | 437 | 2 | 1,804 | |||||||||||||||||||||||||||||||||
Adjusted for stockpile write-offs | - | - | - | - | - | - | (8 | ) | (2 | ) | (9 | ) | - | (19 | ) | |||||||||||||||||||||||||||||
All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 314 | 189 | 379 | 275 | 57 | 96 | 20 | 25 | 428 | 2 | 1,785 | |||||||||||||||||||||||||||||||||
Gold sold - oz (000)(3) | 233 | 185 | 248 | 294 | 44 | 85 | 11 | 34 | 481 | - | 1,615 | |||||||||||||||||||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit – $/oz(4) | 588 | 1,020 | 1,374 | 917 | 1,298 | 1,133 | 1,795 | 719 | 890 | - | 968 | |||||||||||||||||||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) – $/oz(4) | 1,351 | 1,020 | 1,530 | 933 | 1,298 | 1,133 | 1,795 | 719 | 890 | - | 1,105 |
For the year ended 31 December 2014
Operations in DRC, Ghana, Guinea, Mali and Tanzania
(in $ millions, except as otherwise noted)
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Total cash costs | ||||||||||||||||||||||||||||||||||||||||||||
Total cash costs per financial statements | - | 153 | 264 | 273 | - | - | - | 25 | 286 | - | 1,001 | |||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | - | - | - | (41 | ) | - | - | - | - | - | - | (41 | ) | |||||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of total cash costs(2) | 137 | - | - | - | 51 | 87 | 16 | - | - | - | 291 | |||||||||||||||||||||||||||||||||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | 137 | 153 | 264 | 232 | 51 | 87 | 16 | 25 | 286 | - | 1,251 | |||||||||||||||||||||||||||||||||
Retrenchment costs | - | - | - | - | - | - | - | - | 1 | - | 1 | |||||||||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | - | 6 | 15 | 5 | - | - | - | - | 7 | - | 33 | |||||||||||||||||||||||||||||||||
Amortisation of tangible assets | - | 24 | 19 | 32 | - | - | - | - | 99 | - | 174 | |||||||||||||||||||||||||||||||||
Amortisation of intangible assets | - | - | - | - | - | - | - | - | - | 4 | 4 | |||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies(1) | - | - | - | (6 | ) | - | - | - | - | - | - | (6 | ) | |||||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of total cash costs(2) | 67 | - | - | - | 8 | 25 | 4 | - | - | - | 104 | |||||||||||||||||||||||||||||||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 204 | 183 | 298 | 263 | 59 | 112 | 20 | 25 | 393 | 4 | 1,561 | |||||||||||||||||||||||||||||||||
Gold produced - oz (000)(3) | 237 | 177 | 243 | 290 | 44 | 85 | 11 | 33 | 477 | - | 1,597 | |||||||||||||||||||||||||||||||||
Total cash costs per unit - $/oz(4) | 578 | 865 | 1,086 | 799 | 1,162 | 1,028 | 1,438 | 752 | 599 | - | 783 | |||||||||||||||||||||||||||||||||
Total production costs per unit - $/oz(4) | 860 | 1,035 | 1,223 | 909 | 1,343 | 1,329 | 1,760 | 756 | 821 | - | 977 |
For the year ended 31 December 2014
Operations in Australia, Argentina and Brazil
(in $ millions, except as otherwise noted)
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All-in sustaining costs | ||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per financial statements | ||||||||||||||||||||||||||||||||||||||||||||||||
Amortisation of tangible and intangible assets | ( | ) | ( | ) | ( | ) | (150 | ) | (33 | ) | (107 | ) | (49 | ) | (1 | ) | (190 | ) | ||||||||||||||||||||||||||||||
Adjusted for decommissioning amortisation | - | 3 | - | 3 | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| 1 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||
Corporate administration and marketing related to current operations | - | - | - | - | 1 | 1 | ||||||||||||||||||||||||||||||||||||||||||
Inventory writedown to net realisable value and other stockpile adjustments | - | - | - | - | - | 1 | - | - | 1 | |||||||||||||||||||||||||||||||||||||||
Sustaining exploration and study costs | - | 3 | 6 | 9 | 2 | 8 | 1 | 10 | 21 | |||||||||||||||||||||||||||||||||||||||
Total sustaining capital expenditure | 31 | 59 | 1 | 91 | 58 | 127 | 38 | 1 | 224 | |||||||||||||||||||||||||||||||||||||||
All-in sustaining costs | 328 | 263 | 22 | 613 | 249 | 392 | 146 | 16 | 803 | |||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | - | - | - | - | (19 | ) | - | - | (16 | ) | (35 | ) | ||||||||||||||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 328 | 263 | 22 | 613 | 230 | 392 | 146 | - | 768 | |||||||||||||||||||||||||||||||||||||||
Adjusted for stockpile write-offs | - | - | - | - | - | (1 | ) | - | - | (1 | ) | |||||||||||||||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 328 | 263 | 22 | 613 | 230 | 391 | 146 | - | 767 | |||||||||||||||||||||||||||||||||||||||
All-in sustaining costs | 328 | 263 | 22 | 613 | 249 | 392 | 146 | 16 | 803 | |||||||||||||||||||||||||||||||||||||||
Non-sustaining project capital expenditure | - | - | - | - | - | - | - | 1 | ||||||||||||||||||||||||||||||||||||||||
| - | - | 7 | 7 | - | 1 | - | 71 | 72 | |||||||||||||||||||||||||||||||||||||||
Corporate and social responsibility costs not related to current operations | - | - | - | - | - | 1 | 17 | |||||||||||||||||||||||||||||||||||||||||
| 328 | 263 | 29 | 620 | 249 | 407 | 148 | 89 | 893 | |||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and | - | - | - | ) | - | - | ) | (20 | ) | |||||||||||||||||||||||||||||||||||||||
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| 263 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted for | - | - | - | - | - | (1 | ) | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||
All-in | 328 | 263 | ||||||||||||||||||||||||||||||||||||||||||||||
Gold sold - oz (000)(3) | - | |||||||||||||||||||||||||||||||||||||||||||||||
| - | |||||||||||||||||||||||||||||||||||||||||||||||
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| - | 938 | 966 | 1,062 | - | |||||||||||||||||||||||||||||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) - $/oz(4) | 1,214 | |||||||||||||||||||||||||||||||||||||||||||||||
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| 938 | - | ||||||||||||||||||||||||||||||||||||||||||||||
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For the year ended 31 December 20122014
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 |
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Total cash costs | ||||||||||||||||||||||||||||||||||||
Total cash costs per financial statements | 289 | 195 | 14 | 498 | 184 | 260 | 102 | (1) | 545 | |||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | - | - | - | - | (14 | ) | - | - | - | (14 | ) | |||||||||||||||||||||||||
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 | 289 | 195 | 14 | 498 | 170 | 260 | 102 | (1 | ) | 531 | ||||||||||||||||||||||||||
Retrenchment costs | - | - | 1 | 1 | 2 | 3 | - | 1 | 6 | |||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | 4 | 9 | - | 13 | 5 | (7 | ) | - | 6 | 4 | ||||||||||||||||||||||||||
Amortisation of tangible assets | 47 | 98 | 4 | 149 | 32 | 101 | 48 | 1 | 182 | |||||||||||||||||||||||||||
Amortisation of intangible assets | - | - | 1 | 1 | - | 6 | 1 | - | 7 | |||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies(1) | - | - | - | (3 | ) | - | - | (6 | ) | (9 | ) | |||||||||||||||||||||||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 340 | 302 | 20 | 662 | 206 | 363 | 151 | 1 | 721 | |||||||||||||||||||||||||||
Gold produced - oz (000)(3) | 262 | 358 | - | 620 | 246 | 403 | 136 | - | 785 | |||||||||||||||||||||||||||
Total cash costs per unit - $/oz(4) | 1,105 | 545 | - | 804 | 692 | 644 | 748 | - | 676 | |||||||||||||||||||||||||||
Total production costs per unit - $/oz(4) | 1,301 | 845 | - | 1,070 | 842 | 902 | 1,113 | - | 918 |
For the year ended 31 December 20122014
AngloGold Ashanti operations – Total
(in $ millions, except as otherwise noted)
| ||||
All-in sustaining costs | ||||
Cost of sales per financial statements | ||||
Amortisation of tangible and intangible assets | ( | ) | ||
Adjusted for | ||||
| ||||
Corporate administration and marketing related to current operations | ||||
Associates and equity accounted joint ventures’ share of costs | ||||
Inventory writedown to net realisable value and other stockpile adjustments | 11 | |||
Sustaining exploration and study costs | ||||
Total sustaining capital expenditure | ||||
All-in sustaining costs | ||||
Adjusted for non-controlling interests and non-gold producing companies | ( | ) | ||
All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | ||||
Adjusted for stockpile write-offs | (22 | ) | ||
All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 4,330 | |||
All-in sustaining costs | 4,429 | |||
Non-sustaining project capital expenditure | 249 | |||
Technology improvements | 19 | |||
Non-sustaining exploration and study costs | 91 | |||
Care and maintenance costs, Corporate and social responsibility costs not related to current operations | 24 | |||
All-in costs | 4,812 | |||
Adjusted for non-controlling interests and non-gold producing companies | (62 | ) | ||
All-in costs adjusted for non-controlling interests and non-gold producing companies | 4,750 | |||
Adjusted for stockpile write-offs | (22 | ) | ||
All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 4,728 | |||
Gold sold - oz (000) | ||||
All-in sustaining cost (excluding stockpile | ||||
All-in cost per unit (excluding stockpile write-offs) - $/oz | 1,114 |
For the year ended 31 December 2014
AngloGold Ashanti operations – Total
(in $ millions, except as otherwise noted)
TOTAL | ||||
Total cash costs | ||||
Total cash costs per financial statements | ||||
Adjusted for non-controlling interests, | ( | ) | ||
Associates and equity accounted joint ventures’ share of total cash costs | ||||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | ||||
Retrenchment costs | ||||
Rehabilitation and other non-cash costs | ||||
Amortisation of tangible assets | ||||
Amortisation of intangible assets(2) | ||||
Adjusted for non-controlling interests, | ( | ) | ||
Associates and equity accounted joint ventures’ share of | ||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | ||||
Gold produced | ||||
Total cash | ||||
Total production |
For the year ended 31 December 20112013
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 | - |
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All-in sustaining costs | ||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per financial statements | 103 | 215 | 240 | 558 | 347 | 262 | 609 | 226 | - | 1,393 | 1 | |||||||||||||||||||||||||||||||||
Amortisation of tangible and intangible assets | (8 | ) | (43 | ) | (60 | ) | (111 | ) | (82 | ) | (51 | ) | (133 | ) | (9 | ) | - | (253 | ) | (9 | ) | |||||||||||||||||||||||
Adjusted for decommissioning amortisation | (1 | ) | 1 | 1 | 1 | - | - | - | - | - | 1 | (1 | ) | |||||||||||||||||||||||||||||||
Corporate administration and marketing related to current operations | - | - | - | - | - | - | - | - | 5 | 5 | 168 | |||||||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of costs(2) | - | - | - | - | - | - | - | - | - | - | 2 | |||||||||||||||||||||||||||||||||
Inventory writedown to net realisable value and other stockpile adjustments | - | - | - | - | - | - | - | - | 1 | 1 | (1 | ) | ||||||||||||||||||||||||||||||||
Sustaining exploration and study costs | - | - | - | - | - | - | - | - | - | - | (1 | ) | ||||||||||||||||||||||||||||||||
Total sustaining capital expenditure | 14 | 50 | 78 | 142 | 95 | 59 | 154 | 16 | - | 312 | 9 | |||||||||||||||||||||||||||||||||
All-in sustaining costs | 108 | 223 | 259 | 590 | 360 | 270 | 630 | 233 | 6 | 1,459 | 168 | |||||||||||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 108 | 223 | 259 | 590 | 360 | 270 | 630 | 233 | 6 | 1,459 | 168 | |||||||||||||||||||||||||||||||||
Adjusted for stockpile write-offs | - | - | - | - | - | - | - | - | (1 | ) | (1 | ) | 1 | |||||||||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 108 | 223 | 259 | 590 | 360 | 270 | 630 | 233 | 5 | 1,458 | 169 | |||||||||||||||||||||||||||||||||
All-in sustaining costs | 108 | 223 | 259 | 590 | 360 | 270 | 630 | 233 | 6 | 1,459 | 168 | |||||||||||||||||||||||||||||||||
Non-sustaining project capital expenditure | - | 1 | 39 | 40 | 76 | 1 | 77 | 23 | (1 | ) | 139 | (1 | ) | |||||||||||||||||||||||||||||||
Technology improvements | - | - | - | - | - | - | - | - | 14 | 14 | - | |||||||||||||||||||||||||||||||||
Non-sustaining exploration and study costs | - | - | - | - | - | - | - | - | - | - | 6 | |||||||||||||||||||||||||||||||||
Corporate and social responsibility costs not related to current operations | - | - | - | - | - | - | - | - | - | - | 16 | |||||||||||||||||||||||||||||||||
All-in costs | 108 | 224 | 298 | 630 | 436 | 271 | 707 | 256 | 19 | 1,612 | 189 | |||||||||||||||||||||||||||||||||
All-in costs adjusted for non-controlling interests and non-gold producing companies | 108 | 224 | 298 | 630 | 436 | 271 | 707 | 256 | 19 | 1,612 | 189 | |||||||||||||||||||||||||||||||||
Adjusted for stockpile write-offs | - | - | - | - | - | - | - | - | (1 | ) | (1 | ) | 1 | |||||||||||||||||||||||||||||||
All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 108 | 224 | 298 | 630 | 436 | 271 | 707 | 256 | 18 | 1,611 | 190 | |||||||||||||||||||||||||||||||||
Gold sold - oz (000)(3) | 83 | 178 | 212 | 472 | 354 | 235 | 589 | 240 | - | 1,302 | - | |||||||||||||||||||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit - $/oz(4) | 1,305 | 1,255 | 1,223 | 1,249 | 1,016 | 1,149 | 1,069 | 969 | - | 1,120 | - | |||||||||||||||||||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) - $/oz(4) | 1,305 | 1,262 | 1,406 | 1,334 | 1,230 | 1,152 | 1,199 | 1,064 | - | 1,238 | - |
(1) | Adjusting for non-controlling interest of items included in calculation, to disclose the attributable portions only. Other consists of heap leach inventory. |
(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, all-in 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 and all-in 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. |
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For the year ended 31 December 20112013
Operations in South Africa
(in $ millions, except as otherwise noted)
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Total cash costs | ||||||||||||||||||||||||||||||||||||||||||||
Total cash costs per financial statements | 91 | 163 | 169 | 423 | 255 | 216 | 471 | 213 | - | 1,107 | (7 | ) | ||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | - | - | - | - | - | - | - | - | - | - | 6 | |||||||||||||||||||||||||||||||||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | 91 | 163 | 169 | 423 | 255 | 216 | 471 | 213 | - | 1,107 | (1 | ) | ||||||||||||||||||||||||||||||||
Retrenchment costs | 3 | 5 | 6 | 14 | 7 | 6 | 13 | - | - | 27 | - | |||||||||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | 1 | 4 | 6 | 11 | 3 | (10 | ) | (7 | ) | 3 | - | 7 | (1 | ) | ||||||||||||||||||||||||||||||
Amortisation of tangible assets | 7 | 41 | 57 | 105 | 77 | 47 | 124 | 8 | - | 237 | 6 | |||||||||||||||||||||||||||||||||
Amortisation of intangible assets | 1 | 3 | 3 | 7 | 5 | 3 | 8 | - | - | 15 | 2 | |||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies(1) | - | - | - | - | - | - | - | - | - | - | (1 | ) | ||||||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of costs(2) | - | - | - | - | - | - | - | - | - | - | 1 | |||||||||||||||||||||||||||||||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 103 | 216 | 241 | 560 | 347 | 262 | 609 | 224 | - | 1,393 | 6 | |||||||||||||||||||||||||||||||||
Gold produced - oz (000)(3) | 83 | 178 | 212 | 472 | 354 | 235 | 589 | 240 | - | 1,302 | - | |||||||||||||||||||||||||||||||||
Total cash costs per unit - $/oz(4) | 1,100 | 918 | 797 | 895 | 719 | 920 | 800 | 883 | - | 850 | - | |||||||||||||||||||||||||||||||||
Total production costs per unit - $/oz(4) | 1,252 | 1,210 | 1,138 | 1,185 | 978 | 1,117 | 1,034 | 933 | - | 1,070 | - |
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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| ||||||||||||||||||||||||||||||||||||||
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 |
. | ||||||||||||||||||||||||||||||||||||||||||||
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 decommissioning amortisation | - | 1 | 1 | 3 | - | - | - | - | 1 | - | 6 | |||||||||||||||||||||||||||||||||
Corporate administration and marketing related to current operations | - | - | 1 | - | - | - | - | - | - | 2 | 3 | |||||||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of costs(2) | 21 | - | - | - | 47 | 118 | 46 | - | - | - | 232 | |||||||||||||||||||||||||||||||||
Inventory writedown to net realisable value and other stockpile adjustments | - | 83 | 4 | - | - | 16 | - | 24 | 89 | - | 216 | |||||||||||||||||||||||||||||||||
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 and non -gold producing companies(1) | - | - | - | (52 | ) | - | - | - | - | - | (1 | ) | (53 | ) | ||||||||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 21 | 303 | 541 | 293 | 60 | 147 | 46 | 73 | 473 | 19 | 1,976 | |||||||||||||||||||||||||||||||||
Adjusted for stockpile write-offs | - | (83 | ) | (4 | ) | - | - | (16 | ) | - | (24 | ) | (89 | ) | - | (216 | ) | |||||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 21 | 220 | 537 | 293 | 60 | 131 | 46 | 49 | 384 | 19 | 1,760 | |||||||||||||||||||||||||||||||||
All-in sustaining costs | 21 | 303 | 541 | 345 | 60 | 147 | 46 | 73 | 473 | 20 | 2,029 | |||||||||||||||||||||||||||||||||
Non-sustaining project capital expenditure | 341 | 5 | 42 | 3 | - | 31 | 2 | - | 8 | 28 | 460 | |||||||||||||||||||||||||||||||||
Non-sustaining exploration and study costs | 1 | - | - | 9 | - | - | - | - | - | 30 | 40 | |||||||||||||||||||||||||||||||||
All-in costs | 363 | 308 | 583 | 357 | 60 | 178 | 48 | 73 | 481 | 78 | 2,529 | |||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | (54 | ) | - | - | - | - | - | (9 | ) | (63 | ) | ||||||||||||||||||||||||||||||
All-in costs adjusted for non-controlling interests and non-gold producing companies | 363 | 308 | 583 | 303 | 60 | 178 | 48 | 73 | 481 | 69 | 2,466 | |||||||||||||||||||||||||||||||||
Adjusted for stockpile write-offs | - | (83 | ) | (4 | ) | - | - | (16 | ) | - | (24 | ) | (89 | ) | - | (216 | ) | |||||||||||||||||||||||||||
All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 363 | 225 | 579 | 303 | 60 | 162 | 48 | 49 | 392 | 69 | 2,250 | |||||||||||||||||||||||||||||||||
Gold sold - oz (000)(3) | 40 | 215 | 242 | 272 | 57 | 86 | 28 | 63 | 461 | - | 1,462 | |||||||||||||||||||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit - $/oz(4) | 9,065 | 1,025 | 2,214 | 1,085 | 1,051 | 1,510 | 1,653 | 781 | 833 | - | 1,202 | |||||||||||||||||||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) - $/oz(4) | 9,168 | 1,049 | 2,388 | 1,122 | 1,051 | 1,875 | 1,734 | 781 | 851 | - | 1,538 |
For the year ended 31 December 20112013
Operations in DRC, Ghana, Guinea, Mali, Namibia and Tanzania
(in $ millions, except as otherwise noted)
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Total cash costs | ||||||||||||||||||||||||||||||||||||||||||||
Total cash costs per financial statements | - | 190 | 336 | 290 | - | - | - | 44 | 237 | (3 | ) | 1,094 | ||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(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, non-gold producing companies(1) | - | - | - | (5 | ) | - | - | - | - | - | - | (5 | ) | |||||||||||||||||||||||||||||||
Associates and equity accounted joint ventures’ share of total cash costs(2) | 9 | - | - | - | 4 | 5 | 4 | - | - | - | 22 | |||||||||||||||||||||||||||||||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 28 | 232 | 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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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 |
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All-in sustaining costs | ||||||||||||||||||||||||||||||||||||
Cost of sales per financial statements | 366 | 64 | 19 | 449 | 199 | 374 | 133 | 3 | 709 | |||||||||||||||||||||||||||
Amortisation of tangible and intangible assets | (67 | ) | (27 | ) | (3 | ) | (97 | ) | (35 | ) | (103 | ) | (41 | ) | (1 | ) | (180 | ) | ||||||||||||||||||
Corporate administration and marketing related to current operations | - | - | 1 | 1 | - | 6 | - | 1 | 7 | |||||||||||||||||||||||||||
Sustaining exploration and study costs | 12 | 3 | 8 | 23 | 7 | 14 | 8 | - | 29 | |||||||||||||||||||||||||||
Total sustaining capital expenditure | 39 | 25 | 5 | 69 | 61 | 118 | 36 | - | 215 | |||||||||||||||||||||||||||
All-in sustaining costs | 350 | 65 | 30 | 445 | 232 | 409 | 136 | 3 | 780 | |||||||||||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | - | - | - | - | (18 | ) | - | - | - | (18 | ) | |||||||||||||||||||||||||
All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 350 | 65 | 30 | 445 | 214 | 409 | 136 | 3 | 762 | |||||||||||||||||||||||||||
All-in sustaining costs | 350 | 65 | 30 | 445 | 232 | 409 | 136 | 3 | 780 | |||||||||||||||||||||||||||
Non-sustaining project capital expenditure | - | 216 | - | 216 | 8 | 5 | 4 | 15 | 32 | |||||||||||||||||||||||||||
Non-sustaining exploration and study costs | - | - | 9 | 9 | - | 6 | - | 114 | 120 | |||||||||||||||||||||||||||
Corporate and social responsibility costs not related to current operations | - | - | - | - | 1 | 7 | (3 | ) | - | 5 | ||||||||||||||||||||||||||
All-in costs | 350 | 281 | 39 | 670 | 241 | 427 | 137 | 132 | 937 | |||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | - | - | - | - | (18 | ) | - | - | - | (18 | ) | |||||||||||||||||||||||||
All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 350 | 281 | 39 | 670 | 223 | 427 | 137 | 132 | 919 | |||||||||||||||||||||||||||
Gold sold - oz (000)(3) | 265 | 58 | - | 323 | 236 | 399 | 141 | - | 776 | |||||||||||||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit - $/oz(4) | 1,321 | 1,113 | - | 1,376 | 912 | 1,023 | 970 | - | 1,011 | |||||||||||||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) - $/oz(4) | 1,321 | 4,850 | - | 2,073 | 947 | 1,069 | 971 | - | 1,212 | |||||||||||||||||||||||||||
` |
For the year ended 31 December 20112013
Operations in Australia, Argentina and Brazil
(in $ millions, except as otherwise noted)
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Total cash costs | ||||||||||||||||||||||||||||||||||||
Total cash costs per financial statements | 306 | 38 | 14 | 358 | 162 | 253 | 99 | 1 | 515 | |||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | - | - | - | - | (12) | - | - | - | (12) | |||||||||||||||||||||||||||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | 306 | 38 | 14 | 358 | 150 | 253 | 99 | 1 | 503 | |||||||||||||||||||||||||||
Retrenchment costs | - | - | 1 | 1 | 1 | 2 | - | - | �� | 3 | ||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | (4) | 2 | 1 | (1) | 1 | 7 | (4) | 3 | 7 | |||||||||||||||||||||||||||
Amortisation of tangible assets | 67 | 27 | 4 | 98 | 35 | 101 | 40 | 1 | 177 | |||||||||||||||||||||||||||
Amortisation of intangible assets | - | - | - | - | - | 2 | - | 1 | 3 | |||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies(1) | - | - | - | (3) | - | - | (2) | (5) | ||||||||||||||||||||||||||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | 369 | 67 | 20 | 456 | 184 | 365 | 135 | 4 | 688 | |||||||||||||||||||||||||||
Gold produced – oz (000)(3) | 276 | 66 | - | 342 | 241 | 391 | 138 | - | 770 | |||||||||||||||||||||||||||
Total cash costs per unit – $/oz(4) | 1,110 | 568 | - | 1,047 | 622 | 646 | 719 | - | 653 | |||||||||||||||||||||||||||
Total production costs per unit – $/oz(4) | 1,341 | 1,018 | - | 1,333 | 767 | 931 | 991 | - | 892 |
For the year ended 31 December 2013
AngloGold Ashanti operations –- Total
(in $ millions, except as otherwise noted)
TOTAL | ||||
| ||||
Cost of sales per financial statements | 3,947 | |||
Amortisation of tangible and intangible assets | (778 | ) | ||
Adjusted for decommissioning amortisation | 6 | |||
Corporate administration and marketing related to current operations | 184 | |||
Associates and equity accounted joint ventures’ share of costs | 234 | |||
Inventory writedown to net realisable value and other stockpile adjustments | 216 | |||
Sustaining exploration and study costs | 90 | |||
Total sustaining capital expenditure | 984 | |||
All-in sustaining costs | 4,883 | |||
Adjusted for non-controlling interests and non-gold producing companies | (71 | ) | ||
All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 4,812 | |||
Adjusted for stockpile write-offs | (216 | ) | ||
All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 4,596 | |||
All-in sustaining costs | 4,883 | |||
Non-sustaining project capital expenditure | 846 | |||
Technology improvements | 14 | |||
Non-sustaining exploration and study costs | 175 | |||
Corporate and social responsibility costs not related to current operations | 21 | |||
All-in costs | 5,939 | |||
Adjusted for non-controlling interests and non-gold producing companies | (81 | ) | ||
All-in costs adjusted for non-controlling interests and non-gold producing companies | 5,858 | |||
Adjusted for stockpile write-offs | (216 | ) | ||
All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 5,642 | |||
Gold sold - oz (000) | 3,862 | |||
All-in sustaining cost (excluding stockpile write-offs) per unit - $/oz | 1,195 | |||
All-in cost per unit (excluding stockpile write-offs) - $/oz | 1,466 |
For the year ended 31 December 2013
AngloGold Ashanti operations - Total
(in $ millions, except as otherwise noted)
Total cash costs | ||||
Total cash costs per financial statements | ||||
Adjusted for non-controlling interests, | ( | ) | ||
Associates and equity accounted joint ventures’ share of total cash costs | ||||
Total cash costs adjusted for non-controlling interests and non-gold producing companies | ||||
Retrenchment costs | ||||
Rehabilitation and other non-cash costs | ||||
Amortisation of tangible assets | ||||
Amortisation of intangible assets(2) | ||||
Adjusted for non-controlling interests, | ( | ) | ||
Associates and equity accounted joint ventures’ share of | ||||
Total production costs adjusted for non-controlling interests and non-gold producing companies | ||||
Gold produced | ||||
Total cash | ||||
Total production |
Capital expenditure Update
Total capital expenditure was $1,993$857 million in 20132015 compared to $2,322$1,209 million in 2012.2014. This represents a $329$352 million, or 1429 percent, decrease from 2012.2014. The decreaseddecrease in capital expenditure during 20132015 relates to reduced capital expenditure on existing operations ($177 million) and growth related projects ($175 million). Capital expenditure decreased at Cripple Creek & Victor by $111 million due to the mine being sold in August 2015, at Córrego do Sitió by $38 million due to capital savings mainly related to the Cuiaba tailings dam, at Obuasi by $59 million due to current operations reduced to limited operation status, at Kibali by $55 million due to the completion of $237the sulphide plant and infrastructure in 2014 and in the South Africa region by $58 million due to regulatory stoppages limiting access to working areas, Phase 1 project operational delays, deferral of equipment deliveries and slower than anticipated mechanised support installation. Capital expenditure also decreased due to the weakening of local currencies.
Total capital expenditure was $1,209 million in 2014 compared to $1,993 million in 2013. This represents a $784 million, or 39 percent, decrease from 2013. The decreased capital expenditure of $91 million forduring 2014 relates to reduced capital expenditure on existing operations ($184 million) and growth related projects.projects ( $600 million). Capital expenditure decreased at Tropicana by $74$182 million with the project being completed during 2013, in the South Africa region by $132$187 million followingdue to timing of actual project spend and at Mponeng, a scheduled slippage occurred in the scaling backsecondary support installation and consequent movement of construction activities and at Moab Khotsong, where the Zaaiplaats Phase 2 project investment as partwas halted and the development contract was terminated. Capital expenditure also decreased at Kibali by $162 million with the completion of the cost-cutting initiatives acrossinitial phase of the South African asset portfolio,project during 2013, at the Mongbwalu project by $77$26 million with the project being in closure mode, at Iduapriem by $67 million,Sadiola and Geita by $62 million, AngloGold Ashanti Mineração by $39$36 million and Cerro Vanguardia by $24 million. The decrease was partially offset by increased capital$25 million, respectively, due to the timing of the expenditure of $78 millionand at the Kibali joint venture and $57 million at Cripple Creek & Victor.
Total capital expenditure was $2,322 million in 2012 compared to $1,686 million in 2011. This represents a $636 million, or 38 percent, increase from 2011. The increased capital expenditure during 2012 relates to higher capital expenditure on existing operations of $84 million and increased spending of $552 million for growth related projects. Capital expenditure increased at Tropicana by $242 million, the Kibali joint venture by $190 million, infrastructure spend at the Mongbwalu project by $76 million, Obuasi by $53$114 million Cripple Creek & Victor by $33 million, Geita by $10 million, Sadiola by $23 million, Mponeng by $23 million and Iduapriem by $22 million.due to the revised strategy where the decline is completed while the current operations are reduced to limited operation status.
Comparison of financial performance on a segment basis for 2013, 20122015, 2014 and 20112013
The company produces gold as its primary product and does not have distinct divisional segments in terms of principal business activity, but manages its business on the basis of different geographic segments. Therefore, information regarding separate geographic segments is provided.
Gold income
(in millions) | Year ended 31 December | Year ended 31 December | ||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||||||
$ | percent | $ | percent | $ | percent | $ | percent | $ | percent | $ | percent | |||||||||||||||||||||||||||||||||||||
Geographical analysis of gold income by origin is as follows: | ||||||||||||||||||||||||||||||||||||||||||||||||
South Africa | 1,810 | 33 | 2,013 | 32 | 2,560 | 39 | 1,132 | 27 | 1,527 | 29 | 1,810 | 33 | ||||||||||||||||||||||||||||||||||||
Continental Africa | 2,111 | 38 | 2,609 | 41 | 2,530 | 38 | 1,724 | 42 | 2,105 | 40 | 2,111 | 38 | ||||||||||||||||||||||||||||||||||||
Australasia | 441 | 8 | 426 | 7 | 385 | 6 | 666 | 16 | 785 | 15 | 441 | 8 | ||||||||||||||||||||||||||||||||||||
Americas | 1,425 | 26 | 1,656 | 25 | 1,487 | 23 | 967 | 23 | 1,004 | 19 | 1,100 | 20 | ||||||||||||||||||||||||||||||||||||
5,787 | 6,704 | 6,962 | 4,489 | 5,421 | 5,462 | |||||||||||||||||||||||||||||||||||||||||||
Less : Associates and equity accounted joint ventures included above | (290 | ) | (5 | ) | (351 | ) | (5 | ) | (392 | ) | (6 | ) | (474 | ) | (11 | ) | (469 | ) | (8 | ) | (290 | ) | (5 | ) | ||||||||||||||||||||||||
Gold income | 5,497 | 100 | 6,353 | 100 | 6,570 | 100 | ||||||||||||||||||||||||||||||||||||||||||
Continuing operations | 4,015 | 4,952 | 5,172 | |||||||||||||||||||||||||||||||||||||||||||||
Discontinued operations | 137 | 3 | 266 | 5 | 325 | 6 | ||||||||||||||||||||||||||||||||||||||||||
4,152 | 100 | 5,218 | 100 | 5,497 | 100 |
Assets
(in millions) | Year ended 31 December | Year ended 31 December | ||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||||||
$ | percent | $ | percent | $ | percent | $ | percent | $ | percent | $ | percent | |||||||||||||||||||||||||||||||||||||
Geographical analysis of assets by origin is as follows: | ||||||||||||||||||||||||||||||||||||||||||||||||
South Africa | 2,325 | 24 | 3,082 | 24 | 2,148 | 20 | 1,629 | 22 | 2,124 | 23 | 2,325 | 24 | ||||||||||||||||||||||||||||||||||||
Continental Africa | 3,391 | 35 | 4,846 | 38 | 4,234 | 40 | 3,121 | 43 | 3,239 | 36 | 3,391 | 35 | ||||||||||||||||||||||||||||||||||||
Australasia | 1,108 | 11 | 1,045 | 8 | 736 | 7 | 837 | 12 | 906 | 10 | 1,108 | 11 | ||||||||||||||||||||||||||||||||||||
Americas | 2,203 | 23 | 2,878 | 23 | 2,501 | 23 | 1,341 | 18 | 2,409 | 26 | 2,203 | 23 | ||||||||||||||||||||||||||||||||||||
Other, including non-gold producing subsidiaries | 647 | 7 | 888 | 7 | 1,130 | 10 | 356 | 5 | 456 | 5 | 647 | 7 | ||||||||||||||||||||||||||||||||||||
Total assets | 9,674 | 100 | 12,739 | 100 | 10,749 | 100 | 7,284 | 100 | 9,134 | 100 | 9,674 | 100 |
At 31 December 2013, 242015, 22 percent of AngloGold Ashanti’s total assets were located in South Africa compared with 23 percent at the end of 2014. The remaining operations collectively accounted for approximately 78 percent of AngloGold Ashanti’s total assets at 31 December 2015 compared to 77 percent at the end of the same period in 2014.
At 31 December 2014, 23 percent of AngloGold Ashanti’s total assets were located in South Africa compared with 24 percent at the end of 2012.2013. The remaining operations collectively accounted for approximately 7677 percent of AngloGold Ashanti’s total assets at 31 December 20132014 compared to 76 percent at the end of the same period in 2012.
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 2011.2013.
Comparison of financial performance in 2013, 20122015, 2014 and 20112013
Financial performance of AngloGold Ashanti | Year ended 31 December | Year ended 31 December | ||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | 2015 | 2014 | 2013 | ||||||||||||||||||
Gold income | 5,497 | 6,353 | 6,570 | 4,015 | 4,952 | 5,172 | ||||||||||||||||||
Cost and expenses | (7,868) | (5,062) | (4,272) | (3,846 | ) | (4,757 | ) | (7,202 | ) | |||||||||||||||
Share of associates and joint ventures’ (loss) profit | (162) | (30) | 72 | |||||||||||||||||||||
Taxation benefit (expense) | 333 | (346) | (737) | |||||||||||||||||||||
Share of associates and joint ventures’ profit (loss) | 88 | (25 | ) | (162 | ) | |||||||||||||||||||
Taxation (expense) benefit | (211 | ) | (225 | ) | 237 | |||||||||||||||||||
Net profit attributable to non-controlling interests | 30 | 18 | 46 | 15 | 19 | 30 | ||||||||||||||||||
Net (loss) profit attributable to equity shareholders | (2,230) | 897 | 1,587 | |||||||||||||||||||||
Net profit (loss) attributable to equity shareholders - Continuing operations | 31 | (74 | ) | (1,985 | ) | |||||||||||||||||||
Net (loss) profit attributable to equity shareholders - Discontinued operations | (116 | ) | 16 | (245 | ) |
Comparison of financial performance in 20132015 with 20122014
Gold income
Gold income decreased by $856$937 million, or 19 percent, from $6,353$4,952 million in 20122014 to $5,497$4,015 million in 2013, representing a 13 percent decrease over the period.2015. This decrease was mainly due to the 395,000-ounce 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,production from continuing operations, which resulted in a decrease in gold income of approximately $1,014 million.$458 million, and the decrease in the average spot price of gold of $107 per ounce, or eight percent, from $1,266 per ounce during 2014 to $1,159 per ounce in 2015. The decrease was partially offset byin the increase in production volumeprice of 160,000 ounces, whichgold resulted in an increasea decrease in gold income of approximately $226 million, mainly as a result of the production at Tropicana.$452 million.
Gold income from the South African operations in 20132015 decreased by $203$395 million, or 26 percent, to $1,810$1,132 million from $2,013$1,527 million in 2012,2014, mainly as a result of the decrease in production of 219,000 attributable ounces, primarily as a result of safety related stoppages across the regional portfolio as well as lower volumes and grade mined, which accounted for $253 million of the decrease in gold income. Gold income further decreased as a result of the decrease in the average spot price of gold, which resulted in ana decrease in gold income of approximately $312$131 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(including associates and equity accounted joint ventures) decreased by $498$381 million, or 18 percent, to $2,111 million from $2,609$1,724 million in 2012,2015 from $2,105 million in 2014, mainly as a result of the decrease in production of 163,000 attributable ounces, which resulted in a decrease of gold income of approximately $188 million. The decrease in production was mainly due to Obuasi moving into a limited operations phase in 2015. Gold income further decreased as a result of the decrease in the average spot price of gold, which resulted in ana decrease in gold income of approximately $391$171 million.
Gold income alsofrom Australia decreased as a result of aby $119 per ounce, or 15 percent, from $785 million in 2014 to $666 million in 2015. The decrease was due to the 59,000-ounce decrease in production of 61,000 attributable ounces, primarily as a result of the mill shutdown at Geita,in 2015, which resulted in a decrease in gold income of approximately $85$69 million.
The decrease in production was mainly as a result of lower grades mined at Sunrise Dam. Gold income from Australia increased from $426 million in 2012 to $441 million in 2013. The increase was mainly due to the increase in productionfurther decreased as a result 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 by $37 per ounce, or four percent, from $1,656$1,004 million in 20122014 to $1,425$967 million in 2015 mainly as a result of the decrease in the average spot price of gold, which resulted in a decrease in gold income of approximately $84 million. The decrease was partially offset by an increase in production of 46,000 attributable ounces, which resulted in an increase in gold income of approximately $53 million. The increase in production was mainly due to higher tonnes treated and higher grades mined at Cerro Vanguardia.
Cost and expenses
Production costs
Production costs decreased from $3,161 million in 2014 to $2,494 million in 2015, which represents a $667 million, or 21 percent decrease. The decrease was primarily due to a decrease in salaries and wages costs, stores and other consumables costs, fuel and power costs, contractor costs, service related costs, retrenchment costs and rehabilitation costs.
Labour costs decreased from $1,048 million in 2014 to $869 million in 2015, which represents $179 million, or 17 percent, decrease. In particular, labour costs decreased by $78 million at Obuasi in Ghana following the move to limited operations and by $66 million at the South African operations due to labour profile reduction and completion of Savuka integration project.
Consumable stores decreased from $607 million in 2014 to $519 million in 2015, which represents an $88 million, or 14 percent, decrease. The decrease was mainly due to the scaling down of operations at Obuasi in Ghana and cost saving initiatives.
Fuel and power costs decreased from $609 million in 2014 to $443 million in 2015, which represents a $166 million, or 27 percent, decrease. The decrease was mainly due to decreased mining at Obuasi following the move to limited operations during the first quarter of 2015 and the decrease in fuel prices.
Contractor costs for the group decreased from $505 million in 2014 to $460 million in 2015, which represents a $45 million, or nine percent, decrease. The decrease in contractor costs was primarily a result of the completion of open pit mining at Sunrise Dam in Australia and the weakening of the Australian dollar against the US dollar which resulted in a decrease of $32 million.
Service related costs decreased from $255 million in 2014 to $184 million in 2015, which represents a $71 million, or 28 percent, decrease. This decrease was mainly due to a decrease of services costs at the South African operations, at Obuasi, Serra Grande and Corrego do Sitio and other production costs at the South African operations and Australia. The decrease was partially offset by a reduction of Capital Ore Reserve Development credits at the South African operations and Obuasi in Ghana.
Retrenchment costs included in the production costs decreased from $24 million in 2014 to $11 million in 2015, which represents a $13 million, or 54 percent, decrease. Retrenchment costs recorded for the year ended 31 December 2015 resulted from the rationalisation of operations in the South African, Americas, Australia and Continental Africa regions.
Rehabilitation costs decreased from $66 million in 2014 to a credit of $10 million in 2015, which represents a $76 million decrease. The decrease was due to changes to cash flows, inflation rates and discount rates compared to 2014.
The weakening of local currencies against the US dollar further contributed to a decrease in production costs.
Exploration and evaluation costs
Exploration and evaluation costs decreased from $142 million in 2014 to $132 million in 2015, which represents a $10 million, or seven percent, decrease, mainly due to a decrease in prefeasibility expenditure at La Colosa in Colombia. For a discussion of AngloGold Ashanti’s exploration activities in 2015, see “Item 4B: Business Overview–Exploration review”.
Amortisation of tangible and intangible assets
Amortisation of tangible and intangible assets expense decreased by $6 million, or one percent, to $777 million in 2015 from $783 million in 2014. Amortisation of tangible assets decreased by $12 million largely due to lower amortisation at the South African operations following fatalities and safety stoppages that impacted the production profile and depreciation charge, as well as lower production at Sunrise Dam and Tropicana. The decrease was partly offset by higher amortisation at Geita due to higher production and higher deferred stripping amortisation resulting from a change in mining strategy, higher deferred stripping amortisation at Cerro Vanguardia due to increased ore production, higher amortisation at Corrego do Sitio due to higher production, additional capital expenditure and lower Ore Reserves and higher amortisation at Iduapriem due to higher production. Amortisation of intangible assets is $6 million higher than 2014 due to the amortisation of software and licenses across the Brazilian operations.
Impairment and derecognition of assets
In 2015, AngloGold Ashanti recorded impairments and derecognition of goodwill, tangible and intangible assets amounting to $5 million, compared to net impairments amounting to $10 million in 2014. The $5 million related to the derecognition of assets not expected to generate cash flows at the South African operations. See “Item 18: Note 16–Tangible assets” and “Item 18: Note 17–Intangible assets”.
Finance costs and unwinding of obligations
Finance costs (net of amounts capitalised) decreased by $28 million, or 11 percent, to $223 million in 2015, compared to $251 million in 2014. The decrease was mainly due to a reduction of $17 million of interest attributable to the partially redeemed $1.25 billion 8.500 percent notes issued in July 2013 and $11 million attributable to interest on bank debt due to AngloGold Ashanti Australia Limited settling an existing A$600 million four-year revolving credit facility and entering into a new A$500 million five-year revolving credit facility during July 2014. Unwinding of obligations expense of $22 million was recorded in 2015 compared with $25 million in 2014 and relates mainly to the decrease in the decommissioning obligation in Australia and the restoration obligation in Ghana. See “Item 18: Note 8–Finance costs and unwinding of obligations”.
Other expenses
Expenses during 2015 include care and maintenance expenditure incurred at Obuasi in Ghana which was incurred when the mine transitioned to limited operations. During 2014, prior to transition, retrenchment costs of $210m were incurred at Obuasi.
The $1.25bn bonds which were partially redeemed during 2015 incurred a settlement premium of $61m and a fair value movement on the bonds of $83m was recognised in the income statement.
Share of associates and joint ventures’ profit (loss)
Share of associates and joint ventures’ profit (loss) changed from a loss of $25 million in 2014 to a profit of $88 million in 2015, mainly as a result of the increase in operating profits due to lower operating costs partially offset by a decrease in revenue due to lower production and gold price received. Net impairments decreased from a charge of $5 million in 2014 to a reversal of $24 million in 2015. Refer “Item 18: Note 9–Share of associates and joint ventures’ profit (loss)”.
Taxation
A taxation expense of $211 million was recorded in 2015, compared to an expense of $225 million in 2014. Charges for current tax in 2015 amounted to $192 million, compared to $170 million in 2014. The increase in the current tax charge in 2015 was mainly due to higher tax provisions in Geita, Brazil and Australia due to higher profits. Charges for deferred tax in 2015 amounted to a net deferred tax expense of $19 million compared to a net deferred tax expense of $55 million in 2014. The decrease in the deferred tax charge in 2015 is mainly due to lower deferred tax in South Africa (related to the change in estimated deferred tax rate and the weakening of the Rand) and First Uranium. Refer “Item 18: Note 13–Taxation”.
Discontinued operations
A loss of $116 million was recorded in 2015, compared to a profit of $16 million in 2014. The Cripple Creek & Victor operation in the United States has been accounted for as a discontinued operation. Refer “Item 18: Note 10–Discontinued operations”.
Comparison of financial performance in 2014 with 2013
Gold income
Gold income decreased by $220 million from $5,172 million in 2013 to $4,952 million in 2014, representing a four percent decrease over the period. This decrease was mainly due to the decrease in the average gold price received. The average spot price of gold was $1,266 per ounce during 2014, $145 per ounce, or 10 percent, lower than the average spot price of gold of $1,411 per ounce in 2013, which resulted in a decrease in gold income of approximately $562 million. The decrease was partially offset by the increase in production volume of 350,000 ounces from continuing operations, which resulted in an increase in gold income of approximately $444 million, mainly as a result of the production at Tropicana and Kibali.
Gold income from the South African operations in 2014 decreased by $283 million to $1,527 million from $1,810 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$189 million. Gold income further decreased as a result of a decrease in production of 79,000 attributable ounces, primarily as a result of the earthquake near the Vaal River operations on 5 August 2014 and safety related stoppages across the regional portfolio, which resulted in a decrease of gold income of approximately $100 million.
Gold income from the Continental Africa operations (including associates and equity accounted joint ventures) in 2014 decreased by $6 million to $2,105 million from $2,111 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 $212 million. This decrease was partially offset by the increase in production of 137,000 attributable ounces, which resulted in an increase of gold income of approximately $173 million. The increase in production is mainly due to Kibali’s full year of production in 2014, higher production at Siguiri in Guinea due to higher recovered grades and at Geita in Tanzania due to increased tonnage throughput.
Gold income from Australia increased from $441 million in 2013 to $785 million in 2014. The increase was mainly due to the increase in production of 277,000 ounces, of which 291,000 ounces were at Tropicana Gold Mine due to the operations’ full year of production in 2014, which resulted in an increase in gold income of approximately $351 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 $50 million.
Gold income from the Americas operations decreased from $1,100 million in 2013 to $1,004 million in 2014 mainly as a result of the decrease in the average spot price of gold, which resulted in a decrease in gold income of approximately $112 million. The decrease was partially offset by an increase in gold income as a result of an increase in production from 953,000of 15,000 attributable ounces, in 2012 to 1,001,000 attributable ounces in 2013, which resulted in an increasea decrease in gold income of approximately $67$19 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 increaseddecreased from $3,212 million in 2012 to $3,384$3,169 million in 2013 to $3,161 million in 2014, which represents a $172 million, or 5 percent increase.$8 million. The increase was primarily due to an increase in operationalrehabilitation costs, including labour, contractorpower costs and service related costs. The increase was partially offset by a decrease in retrenchment costs, labour costs, consumable stores and contractor costs.
LabourRehabilitation costs increased from $1,186 million in 2012 to $1,231$33 million in 2013 to $66 million in 2014, which represents $45a $33 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 was due to changes in labourcash flows, inflation rates and lower discount rates.
Power costs increased from $590 million in 2013 to $609 million in 2014. The increase was primarily a result of annual salary increases and also an increase in employees in Australia due to Tropicana coming intoincreased production.
ContractorService related costs for the Group increased from $560by $287 million to $255 million in 2012 to $6322014 from a credit of $32 million in 2013, which represents a $722013. This increase was mainly due to Capital Ore Reserve Development credits reducing by $104 million or 13 percent increase. In particular, contractor costsat the South African operations and ore stockpile adjustments of $124 million in Australia andContinental Africa at Geita in Tanzania, Iduapriem in Ghana contributed to higher production costs. The increaseand Navachab in contractor costs was primarily a result of annual salary increases.Namibia (sold June 2014).
Retrenchment costs increasedincluded in the production costs decreased to $24 million in 2014 from $69 million in 2013 from $10 million in 2012.2013. Retrenchment costs recorded for the year ended 31 December 20132014 resulted from the rationalisation of operations in South African, Americas, Australia and Continental Africa regions.
ProductionLabour costs further increaseddecreased from $1,182 million in 2013 to $1,048 million in 2014, which represents $134 million, or 11 percent, decrease. In particular, labour costs at Obuasi in Ghana decreased by $30$43 million because offollowing the move to limited operations and by $75 million at the South African operations due to rationalisation and restructuring.
Consumable stores decreased from $681 million in 2013 to $607 million in 2014, which represents a reduction in recovery from settled insurance claims as compared with 2012 during which there$74 million, or 11 percent decrease. The decrease was a reimbursement of costs relatingdue to the pitwall failuresale of Navachab in Namibia, the scaling down of operations at Obuasi in Ghana, lower stores usage at Geita in Tanzania and cost saving initiatives.
Contractor costs for the group decreased from $608 million in 2013 to $505 million in 2014, which represents a $103 million, or 17 percent decrease. The decrease in contractor costs was primarily a result of the scaling down of operations at Obuasi in Ghana, completion of open pit mining at Sunrise Dam (Australia) in the amountAustralia, new contractor rates at Iduapriem in Ghana and termination of $30 million.contractor from May 2014 at Geita in Tanzania.
The increase in production costs was partially offset by the weakening of local currencies against the US dollar and further attributed to 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.production costs.
Exploration and evaluation costs
Exploration and evaluation costs decreased from $395$250 million in 20122013 to $255$142 million in 20132014 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, the Colombian Region, Brazil, Mongbwalu in the Democratic Republic of the Congo, Solomon Islands, Siguiri and Geita in Tanzania. For a discussion of AngloGold Ashanti’s exploration activities in 2013,2014, see “Item 4B.:4B: Business overview – Global exploration”Overview–Exploration review”.
Amortisation of tangible and intangible assets
Amortisation of tangible and intangible assets expense increased by $5 million or one percent, to $783 million in 2014 from $778 million in 2013. Amortisation of tangible assets decreased by $36$5 million or 4 percent, to $799 million in 2013 from $835 million in 2012, largely due to the impact onreduction in capital expenditure at Obuasi following the impending winding down of operations; lower amortisation as a resultat Geita following the impairment of assets in June 2013 and the reset of the impairmentamortisation lives; lower production at Sunrise Dam, partly offset by higher amortisation at Tropicana since production started in the fourth quarter of 2013. Amortisation of intangible assets is $10 million higher than 2013 due to the amortisation of software and derecognition of assets during 2013.licenses across South African and Americas operations.
Impairment and derecognition of assets
In 2013,2014, AngloGold Ashanti recorded impairments and derecognition of goodwill, tangible and intangible assets amounting to $3,029$10 million, compared to net impairments amounting to $346$2,585 million in 2012. This was partly due2013. The $10 million related to the cash generating unit impairmentderecognition 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. Assetsassets not expected to generate future cash flows were derecognised at Vaal River Surface Operations, in South Africa, in the amount of $14 millionObuasi ($3 million) and at Mongbwalu, in the Democratic RepublicSouth African operations ($1 million). As part of the Congo,stability agreement entered into in 2004, the amountGovernment of $105Ghana agreed to a corporate tax rate concession which was granted at a rate of 30 percent for the Ashanti business combination for 15 years from 2004. The 2014 business plan indicates that no tax payments are expected to be paid to the Government until 2019. As a result the tax rate concession of $6 million was fully impaired during 2014. See “Note 7 – Special items”, “Note 15 – “Item 18: Note 16–Tangible assets” and “Note 16 – “Item 18: Note 17–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$4 million to $247$251 million in 2013,2014, compared to $167$246 million in 2012.2013. 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 which went into production during September 2013, and a net increase related toin the $750 million 5.125 percent notes issued in July 2012.South Africa borrowings comprising finance costs on commercial papers and revolving credit facilities. 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$25 million was recorded in 20132014 compared with $64$47 million in 20122013 and relates mainly to the unwinding of discounted future rehabilitation obligations to present values.the convertible bond settled in August 2013 and November 2013. See “Note 8 – “Item 18: 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 increaseddecreased 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$25 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 $1,668 per ounce during 2012, $96 per ounce, or 6 percent, higher than $1,572 per ounce in 2011, which resulted in an increase in gold income of approximately $416 million.
Gold income from the South African operations decreased by $547 million to $2,013 million from $2,560 million in 2011,2014, 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, which resulted in an increase in gold income of approximately $156 million.
Gold incomenet impairments from the Continental Africa operations increased by $79 million to $2,609 million from $2,530 million in 2011, mainly as a result of the increase in the average spot price of gold, which resulted in an increase in gold income 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 the 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 2011 to 258,000 attributable ounces in 2012, which resulted in an increase in gold income of approximately $20 million and the increase in the average spot price of gold, which resulted in an increase in gold income of approximately $24 million.
Gold income from the Americas operations increased from $1,487 million in 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 an 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 approximately $103 million. The increase in attributable ounces was due to the 100 percent ownership of Serra Grande effective July 2012 and higher grades recovered.
Cost and expenses
Production costs
Production costs increased from $3,160 million in 2011 to $3,212 million in 2012, which represents a $52 million, or 2 percent increase. The increase was primarily due to an increase in operational costs including labour, consumables and fuel.
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 Siguiri in Guinea contributed to higher production costs. The increase in labour 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 $30 million recovery from settled insurance claims during the third quarter of 2012 for the reimbursement of costs relating to the pitwall failure at Sunrise Dam (Australia) during 2011 and by the weakening of local currencies against the US dollar.
Royalties paid by AngloGold Ashanti decreased from $193 million in 2011 to $164 million in 2012, mainly due2013 to $5 million in 2014.
During the year, Rand Refinery (Pty) Limited (Rand Refinery) identified a decreaseshortfall in payments of royalties under the South African Mineralcommodities that it warehouses for third parties and Petroleum Resources Act, which wasrecognised the consequential expense in fulfilling its obligations to its depositors resulting in Rand Refinery financial results reporting a negative balance on shareholder’s equity. As a result AngloGold Ashanti recognised its equity portion of this reported loss of $51 million, reducing its equity investment to nil. In order to fund the unprotected strike actionfulfilment of Rand Refinery’s obligation to its depositors, the shareholders entered into a loan agreement. AngloGold Ashanti’s share was $44 million and this was assessed for recoverability given the subsequent decrease in revenue. Royalties recorded by the South African mines decreased from $73 million in 2011 to $25 million in 2012. Royalties in Argentina increased from $27 million in 2011 to $33 million in 2012 primarily as a result of higher average spot prices of gold and higher production. In Argentina, royalties are payable to Formicruz, a state owned companynegative shareholders balance in the Santa Cruz Province, being the minority shareholderreported results of the Cerro Vanguardia operation and are calculated as a percentageRand Refinery. An impairment loss of revenues. Royalties paid in Tanzania increased to $33 million in 2012 compared to $23 million in 2011 primarily due to the higher production and the higher gold price.
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 La Colosa in Colombia, additional exploration at Tropicana in Australia and Mongbwalu in the Democratic Republic of the Congo, as well as increased exploration activities in Guinea. For a discussion of AngloGold Ashanti’s exploration activities in 2012, see “Item 4B.: Business overview – Global exploration”.
Amortisation of tangible and intangible assets
Amortisation of tangible and intangible assets expense increased by $8 million or 1 percent, to $835 million in 2012 when compared to $827 million recorded in 2012.
Impairment and derecognition of assets
In 2012, AngloGold Ashanti recorded net impairments of tangible and intangible assets amounting to $346 million, compared to a reversal of impairments amounting to $120 million in 2011. This was partly due to the impairment of Great Noligwa and Kopanang of $31 million and $14 million, respectively, in South Africa, due to changes in the mine plan resulting in certain areas being abandoned. Furthermore, due to a change in the mine plan at Obuasi in Continental Africa, certain infrastructure, development and assets have been impaired and written-off amounting to $296 million. See “Note 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 $26 million to $167 million in 2012, compared to $141 million in 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 senior floating and fixed rate notes (DMTNP) issued in October 2012. Finance costs recorded in the year ended 31 December 2012 includes $6 million related to accelerated amortisation of fees on the syndicated revolving credit facility ($1 billion) cancelled in August 2012. Unwinding of obligations expense of $64$21 million was recorded in 2012 compared with $55 million in 2011 and mainly relateson the loan. External audit procedures performed subsequent to year end confirmed the unwinding of discounted future rehabilitation obligations to present values and increases in the reclamation obligations to its future estimated payout. See “Note 8 – Finance costs and unwinding of obligations” to the consolidated financial statements forgold gap at Rand Refinery has not increased. Therefore any additional information.
Share of associates and joint ventures’ (loss) profit
Share of associates and joint ventures’ (loss) profit decreasedloan funding requirements from a profit of $72 million in 2011 to a loss of $30 million in 2012, mainly as a result of reduced margins due to lower production and increased costs offset by a higher average gold price. The decreaseshareholders was partially offset by the increase in the average spot price of gold for 2012. Net impairments in 2012 were $59 million compared to a net reversal of $4 million in 2011. The impairments recorded in 2012 mainly related to the carrying value of the investment in Trans-Siberian Gold and a loan of $37 million to Thani Ashanti Alliance Limited as discussed in “Note 18 – not envisaged at that stage. Refer “Item 18: Note 19–Investments in associates and joint ventures” to the consolidated financial statements..
Taxation
A taxation expense of $346$225 million was recorded in 2012,2014, compared to an expensea benefit of $737$237 million in 2011.2013. Charges for current tax in 20122014 amounted to $414$170 million, compared to $407$133 million in 2011.2013. The increase in the current tax charge in 20122014 was mainly due to the higher taxable incomeprofit to revenue ratio in South Africa as a result of the higher gold price, while 2011 was lower due to the utilisation of tax losses. This was partially offset by lower taxes at the South African operations as a result of safety stoppages and the unprotected strike action.capital spend in 2014. Charges for deferred tax in 20122014 amounted to a net deferred tax expense of $55 million compared to a net deferred tax benefit of $68 million compared to a net deferred tax expense of $330$370 million in 2011.2013. The decreaseincrease in the deferred tax charge in 20122014 is mainly due to the lower enacted statutoryutilisation of tax rateslosses in South Africa,Australia as well as tax credits on impairments at Obuasi and corporate restructuringfrom impairment of Serra Grande, partially offset byassets in 2013 not repeated in 2014. Refer “Item 18: Note 13–Taxation”.
Discontinued operations
A profit of $16 million was recorded in 2014, compared to a loss of $245 million in 2013. The Cripple Creek & Victor operation in the higher enacted statutory tax rates in Ghana.United States has been accounted for as a discontinued operation. Refer to “Note 1210 – Taxation”Discontinued operations” of the consolidated financial statements for additional information.
5B. | LIQUIDITY AND CAPITAL RESOURCES |
In the board’s opinion, AngloGold Ashanti’s working capital is sufficient to meet the company’s present requirements.
Operating activities
20132015
Cash flows from operating activities were $1,246$1,139 million in 2013,2015, $81 million, or seven percent, lower than the 20122014 amount of $1,969$1,220 million. The decrease in cash flows provided by operations was mainly due to lower revenues from a lower gold price and production.
Net cash inflow from operating working capital items amounted to $89 million in 2015, compared with an inflow of $6 million in 2014.
2014
Cash flows from operating activities were $1,220 million in 2014, lower than the 2013 amount of $1,246 million. The decrease in cash flows provided by operations was mainly as a result of higher costs and lower revenues.revenues from a lower gold price which more than offset the increase of 8 percent in production.
Net cash outflowinflow from operating working capital items amounted to $250$6 million in 2013,2014, compared with an outflow of $218$224 million in 2012.
2012
Cash flows from operating activities were $1,969 million in 2012, lower than the 2011 amount of $2,813 million. The decrease in cash flows provided by operations was mainly as a result of higher costs and lower revenues.
Net cash outflow from operating working capital items amounted to $218 million in 2012, compared with an outflow of $170 million in 2011.2013.
Investing activities
20132015
Investing activities in 20132015 resulted in a net cash inflow of $80 million, an increase of $1,023 million from an outflow of $943 million in 2014. Capital expenditure decreased to $664 million in 2015 compared to $844 million in 2014. Capital expenditure decreased at the South African region by $58 million due regulatory stoppages, deferral of equipment deliveries as well as the slower than anticipated mechanised support installations and lower capital expenditure at Mine Waste Solutions. Capital expenditure decreased by $59 million at Obuasi due to the mine transitioning to limited operations. The change in mine strategy resulted in a decrease of $13 million in capital expenditure at Geita in Tanzania. Capital expenditure also decreased by $38 million at Corrego do Sitio due to capital savings mainly related to the Cuiaba tailings dam. Capital expenditure further decreased due to the weakening of local currencies against the US dollar. Proceeds from the sale of Cripple Creek & Victor, sold effective 3 August 2015, amounted to $819 million.
2014
Investing activities in 2014 resulted in a net cash outflow of $2,040$943 million, a decrease of $735$1,097 million from an outflow of $2,775$2,040 million in 2012.2013. Capital expenditure decreased to $1,501$844 million in 2014 compared to $1,363 million in 2013. Capital expenditure decreased at Tropicana by $182 million with the project being completed during 2013, South Africa region by $187 million due to timing of actual project spend and at Mponeng, a scheduled slippage occurred in the secondary support installation and consequent movement of construction activities and at Moab Khotsong, the Zaaiplaats Phase 2 project was halted and the development contract was terminated. Capital expenditure also decreased by $114 million at Obuasi due to the revised strategy where the decline is completed and the mine transitioned to limited operations. Funding provided to associates and joint ventures decreased to $65 million in 2014 from $472 million in 2013 comparedlargely due to $1,925 million in 2012.
2012
Investing activities in 2012 resulted in a net cash outflowthe completion of $2,775 million, an increase of $1,053 million from an outflow of $1,722 million in 2011. Capital expenditure increasedthe work 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.establish operations at the Kibali joint venture operation.
Financing activities
20132015
Cash flows from financing activities in the year ended 31 December 20132015 amounted to an inflowa net outflow of $560$1,186 million, which is a decreasean increase of $31$765 million from an inflowoutflow of $591$421 million in the year ended 31 December 2012.2014. Cash inflows from proceeds from borrowings in 20132015 amounted to $2,344$421 million and included $1.25 billion 8.500 percent notes due 2020 issued during July 2013, $432a $300 million proceeds on the local borrowings facility and commercial paper in South Africa, $250 million draw downdrawdown on the $1.0 billion four-year syndicated loan facility $323and $120 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 millionin proceeds from short-term borrowingsthe local borrowing facilities in Argentina.South Africa.
Cash outflows from repayment of borrowings of $1,486$1,288 million during the year ended 31 December 20132015 included the repayment of $250$779 million onof the $1.0$1.25 billion four-year8.500 percent bonds due 2020, $200 million of the US$1.0 billion syndicated loan facility, $733$112 million on the early settlement of the convertible bonds due 2014, $27local borrowing facility, $135 million onof the A$600 million syndicated loan, $458$14 million of the R10bn Domestic Medium Term Note Programme (DMTNP) and $45 million in connection with other loans.
Bond settlement premium, RCF and bond transaction costs increased from $9 million in the year ended 31 December 2014 to $61 million in the year ended 31 December 2015. The increase was due to the premium and fees on local borrowings facility, commercial paper and finance leases in South Africa and normal scheduled loan repaymentsthe partial redemption of $16 million.the $1.25 billion bonds 8.500 percent bonds due 2020.
Dividends paid to non-controlling interests decreased from $236$17 million in 20122014 to $62$5 million in 2013.2015. Dividends are proposed and approved by the board of directors of AngloGold Ashanti, based on the company’s financial performance.
20122014
Cash flows from financing activities in the year ended 31 December 20122014 amounted to an inflowoutflow of $591$421 million, which is an increasea decrease of $1,054$981 million from an outflowinflow of $463$560 million in the year ended 31 December 2011.2013. Cash inflows from proceeds from borrowings in 20122014 amounted to $1,432$611 million and included $200$157 million drawnproceeds on the local borrowings facility and commercial paper in South Africa, $100 million draw down on the $1.0 billion four-year syndicated loan facility, $750$315 million 5.125 percent notes due 2022 issued in July 2012 to fund ongoing capital projects as well as $261 million drawndraw down on the A$600500 million syndicated loan for general corporate purposes, principally on the Tropicana project.$10 million proceeds from short-term borrowings in Argentina and $9 million normal proceeds from various short term borrowings.
Cash outflows from repayment of borrowings of $217$755 million during the year ended 31 December 20122014 included the repayment of $200$547 million on the $1.0 billion four-yearA$600 million syndicated loan, $171 million on the local borrowings facility, commercial paper and finance leases in South Africa, $25 million on short-term borrowings in Argentina and normal scheduled loan repaymentspayments of $17 million. Cash outflows for the acquisition of the remaining 50 percent stake of Serra Grande mine in Brazil amounted to $215$12 million.
Dividends paid increasedto non-controlling interests decreased from $169$62 million in 20112013 to $236$17 million in 2012.2014. Dividends are proposed and approved by the board of directors of AngloGold Ashanti, based on the company’s financial performance.
Liquidity
AngloGold Ashanti’s revenues are derived primarily from the sale of gold produced at its mines. Cash flows from operating activities isare therefore the function of gold produced sold at a specific price. The market price of gold can fluctuate widely, which impacts the profitability of the company’s operations and the cash flows generated by these operations.
There are no significantsome restrictions on the ability of the group to obtain funds from its subsidiaries by dividend or loan. As at 31 December 2015 the group had $48 million (2014: $8 million) in bank accounts in Argentina subject to regulatory approvals before such funds could be transmitted in the form of dividends or loan repayments. During 2015 the group was not able to remit funds from Argentina but subsequent to year-end has been able to remit $6 million.
AngloGold Ashanti’s cash and cash equivalents decreasedincreased to $628 million, net of a bank overdraft of $20$484 million at 31 December 20132015 compared with $892$468 million at 31 December 2012.2014. 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 2013, 822015, 80 percent of the company’s cash and cash equivalents waswere held in US dollars, 11eight percent waswere held in South African rands and 712 percent waswere held in other currencies.
On 22During 2015 AngloGold Ashanti Australia entered into a long-term contract with APA Group to construct a pipeline for the delivery of natural gas to Sunrise Dam gold mine and to Tropicana gold mine. The contract contains embedded leases, which have been determined to incur interest at 6.75 percent, have maturities of 10 or 12 years and are Australian dollar-based.
During July 2015, the group entered into a five-year unsecured syndicated revolving credit facility (ZAR RCF II) of R1.4 billion with Nedbank and ABSA Bank which is currently charged at JIBAR plus 1.65 percent per annum. It is anticipated that 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. At 31 December 2011,2015 the facility was undrawn. The facility matures in 2020.
During July 2014, AngloGold Ashanti Australia Limited a wholly-owned subsidiary of AngloGold Ashanti Limited,settled an existing A$600 million four-year revolving credit facility and entered into a fournew A$500 million five year revolving credit facility of A$600 million with a syndication of banks. Interest is currently charged at BBSYBBSP plus 2.62 percent per annum. Each of AngloGold Ashanti Limited and AngloGold Ashanti Holdings plc has guaranteed all payments and other obligations of AngloGold Ashanti Australia Limited under the facility. Amounts may be repaid and redrawn under the facility during its four year term. No draw down was made during 2011 under the facility. An amount of $261 million was drawn down during the year ended 31 December 2012 and $489 million was drawn down during the year ended 31 December 2013 under the facility. A commitment fee of 501 percent of the applicable margin (i.e. 1 percent) is payable quarterly in arrears on the undrawn portion of the facility. An amount of $96 million was drawn down as at 31 December 2015. This facility will be used to fund general working capital requirements.
On 20During July 2012,2014, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Inc., each a wholly-owned subsidiary of AngloGold Ashanti Limited, as borrowers, and AngloGold Ashanti Limited entered into a $1.0 billion five-year unsecured revolving credit facility with a syndicate of lenders which replaced its existing $1.0 billion syndicatedrevolving credit facility that was scheduledentered into in July 2012. Amounts repaid and reborrowed under the facility during its five-year term and the facility bears interest at LIBOR plus an initial margin of 1.5 percent per annum. The margin will subsequently be calculated by reference to mature in April 2014.the long term debt rating of the Parent. If the current status of BB+/Baa3 improves the interest margin will reduce and if the current rating worsens then the interest margin will increase.
During December 2014 the company drew down $100 million on the above facility. AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc. and AngloGold Ashanti USA Inc. each guaranteed the obligations of the borrowers under the facility. Amounts may be repaid and redrawn under the facility during its five-year term. Amounts outstanding under the facility bear interest at LIBOR plus a margin that varies based on the credit rating of AngloGold Ashanti Limited. No draw down was made during 2012 under the facility. A commitment fee of 0.525 percent is payable quarterly in arrears on the undrawn portion of the facility.
On 30 July 2012, the company completed an offering of $750 million aggregate principal amount of 5.125 percent notes due 2022. The notes were issued by AngloGold Ashanti Holdings plc, a wholly-owned subsidiary of the company. The notes are unsecured and fully and unconditionally guaranteed by AngloGold Ashanti Limited.
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 fully 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,September 2015 the company commenced a cash tender offer to purchase any and allpartially redeemed $779m of the outstanding $732.5 million 3.5 percent 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 percent of the total issuance. During November 2013, the group completed the redemption of all of the remaining outstanding convertible bonds for $6.6 million, plus accrued and unpaid interest.its $1.25bn bonds.
During September 2013, the group paid and settled the 6 percent 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.
During December 2013, the group entered into a five-year unsecured syndicated revolving credit facility (ZAR RCF) of R1.5 billion ($144 million) with Nedbank and ABSA Bank which is currently charged at JIBAR plus 1.2 percent per annum. It is anticipated that 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. At 31 December 2015 an amount of $65 million was drawn down. The facility matures in December 2018.
During December 2013, R750 million ($7265 million) aggregate principal amount, unsecured notes were issued, due 2016 at JIBAR plus 1.75 percent. The objective of the ZAR RCF in conjunction with the issue of R750 million ($7265 million) bonds was to provide a more permanent and reliable source of funds for AngloGold Ashanti’s South African operations and mitigate refinancing risk.
AngloGold Ashanti intends to finance its capital expenditure and debt repayment requirements in 20142016 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.
Current borrowings
AngloGold Ashanti’s current borrowings decreased to $258$100 million at 31 December 20132015 from $859$223 million at 31 December 2012.2014. Included in the current borrowings at 31 December 2013,2015, were:
$544 million payable under the Senior Floating Rate Notes (DMTNP)Australian Gas Pipeline lease (interest charged at 5.9926.75 percent per annum on $6 million and 5.967 percent per annum on $48 million; the notes are ZAR-based)annum);
$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);
$1615 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);
$49 million payable under the R750 million bonds issued December 2013 (interest charged at 3 month JIBAR plus 1.75 percent and is SA rand-based);
$12 million in interest payable 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); and
$4518 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).
Non-current borrowings
AngloGold Ashanti’s non-current borrowings increaseddecreased to $3,633$2,637 million at 31 December 20132015 compared to $2,724$3,498 million at 31 December 2012.2014. As at 31 December 2013,2015, the company’s non-current borrowings included:
Unsecured loans:
$985987 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);
$739741 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);
$1,308480 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);
$7264 million outstanding under the R750 million bonds issued on 9 December 2013R1.5 billion syndicated loan facility (interest charged at JIBAR plus 1.751.2 percent per annum; the bonds mature on 9 December 2016annum and are ZAR-based)is SA rand-based); and
$48996 million outstanding under the A$600500 million syndicated revolving credit facility (interest charged at BBSY plus 2.62.0 percent per annum; the loan matures in December 2015July 2019 and is Australian dollar-based); and
$194 million outstanding under the $1 billion syndicated loan facility (interest charged at LIBOR plus 1.5 percent per annum; the facility matures on 17 July 2019 and is US dollar-based).
Secured capital leases:
$2414 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 installmentsinstalments terminating in March 2022, are SA rand-based and the buildings financed are used as security for these loans); and
$1362 million is repayable to California First National Bankunder the Australian Gas Pipeline leases (Interest charged at an average rate of 2.46.75 percent per annum. Loans commenced in November and December 2015 and have maturities of 10 and 12 years, respectively. Loans are repayable in monthly installments terminating in December 2019instalments 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 USAustralian dollar-based. The equipment financed is used as security for these loans).
As at 31 December 2013,2015, AngloGold Ashanti’s total non-current borrowings, including the short-term portion maturing within 2013,2016, was made up as follows:
$ (million) | ||||
Unsecured borrowings | ||||
Secured finance leases | ||||
Total borrowings | ||||
Less: Short-term maturities | ||||
Total non-current borrowings |
Amounts falling due are scheduled as follows:
$ (million) | ||||
Within one year | ||||
Between one and two years | ||||
Between two and five years | ||||
After five years | ||||
Total |
At 31 December 2013,
At 31 December 2015 the currencies in which the borrowings were denominated were as follows:
$ (million) | ||||
United States dollars | ||||
Australian dollars | ||||
South African rand | ||||
| ||||
Total |
At 31 December 2013,
At 31 December 2015, AngloGold Ashanti had the following undrawn amounts available under its borrowing facilities:
$ (million) | ||||
Syndicated revolving credit facility ($1.0 billion) – US dollar (entered into in July 2014) | ||||
Syndicated revolving credit facility (A$ | ||||
Syndicated revolving credit facility (R1.5 billion) – SA rand | ||||
Syndicated revolving credit facility (R1.4 billion) – SA rand | 91 | |||
FirstRand Bank Limited – SA rand | ||||
Total undrawn facilities |
AngloGold Ashanti had no other committed lines of credit as of 31 December 2013.2015.
As of 31 December 2013,2015, the company was in compliance with all debt covenants and provisions related to potential defaults.
See “Item 18: Note 37–Capital Management” and “Item 10C: Material Contracts”.
AngloGold Ashanti, through its executive committee, reviews its short-, medium- and long-term funding, treasury and liquidity requirements and positions monthly. The Audit 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 3635 to the consolidated financial statements “Contractual commitments and contingencies”.
As at 31 December 2013,2015, capital commitments(1) can be summarised over the periods shown below as follows:
Expiration per period | Expiration per period | |||||||||||||||||||||||||||||||||||||||
Commitment
(in millions) | Total Amount $ | Less than 1 year $ | 1 – 3 Years $ | 4 – 5 Years $ | Over 5 $ | Total amount $ | Less than 1 year $ | 1 – 3 years $ | 4 – 5 years $ | Over 5 years $ | ||||||||||||||||||||||||||||||
Capital expenditure | ||||||||||||||||||||||||||||||||||||||||
(contracted and not yet contracted)(1) | 1,510 | 796 | 714 | - | - | |||||||||||||||||||||||||||||||||||
Guarantees | 10 | 10 | - | - | - | |||||||||||||||||||||||||||||||||||
Capital expenditure (contracted and not yet contracted)(1) | 917 | 383 | 534 | - | - | |||||||||||||||||||||||||||||||||||
Other commercial commitments(2) | 746 | 610 | 106 | 23 | 7 | 656 | 568 | 68 | 18 | 2 | ||||||||||||||||||||||||||||||
Total | 2,266 | 1,416 | 820 | 23 | 7 | 1,573 | 951 | 602 | 18 | 2 |
(1) Including commitments through contractual arrangements with equity accounted joint ventures of $185 million.$27 million; and
(2) Excludes commitments through contractual arrangements with equity accounted joint ventures.
Derivatives accounted for at fair valueRecent developments
Subsequent events disclosed in “Item 18: Note 38–Subsequent events” include the following details:
Silicosis litigation
In the normal courseperiod from October 2012 to April 2014, AngloGold Ashanti received 1,256 individual summonses and particulars of its operations,claim relating to silicosis and/or other Occupational Lung Disease. All of these claims were filed in the company is exposedSouth Gauteng High Court, Johannesburg, but were subsequently referred to goldarbitration on 9 October 2014.
On 4 March 2016, AngloGold Ashanti and other commodity price, currency, interest rate, liquidityAnglo American South Africa (“AASA”) entered into a settlement agreement with claimants’ counsel for the full and non-performance risk,final settlement with no admission of liability of all individual claims brought against AngloGold Ashanti and 4,388 individual claims brought against AASA.
An independent trust has been set up to administer the allocation of the settlement amount on the basis of claimants’ employment and medical histories. AngloGold Ashanti and AASA will contribute in stages, toward a total amount of up to R464m (approximately $30m as at 31 December 2015), which includes credit risk. will be placed in the independent trust.
The company is also exposedsettlement agreement relates solely to certain by-product commodity price risk. In order to manage these risks, the company may enter into transactions which make use of derivatives. The company has developed a risk management process to facilitate, controlindividual claims and monitor these risks. The board approves and monitors this risk management process, inclusive of documented treasury policies, counterpart limits, controlling and reporting structures. The company does not acquire, hold or issue derivatives for speculative purposes.
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:
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Recent developments
For a detailed discussion of recent developments, see note 40 to the consolidated financial statements “Events subsequent to year end”.cover class actions.
Related party transactions
For a detailed discussion of related party transactions, see “Item 7B.:7B: Related party transactions”Party Transactions”.
Recently adopted accounting policies and pending adoption of new accounting standards
AngloGold Ashanti’s accounting policies are described in note 1 to the consolidated financial statements “Accounting policies”. Recently adopted accounting policies are also described in note 1 to the consolidated financial statements. 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 1 to the consolidated financial statements.
Critical accounting policies
AngloGold Ashanti’s accounting policies are described in note 1 to the consolidated financial statements “Accounting policies”. The preparation of the company’s financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. The following are considered to be the accounting policies that are most critical to the company’s results of operations, financial condition and cash flows.
Use 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 Ore Reserves, recoverable ounces 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 realisable 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 amortisation 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 reservesReserve and life-of-mines
AngloGold Ashanti estimates on an annual basis its Ore ReservesReserve at its mining operations. There are a number of uncertainties inherent in estimating quantities of reserves,Ore Reserves, including many factors beyond the company’s control. Estimates of Ore ReservesReserve 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 reservesOre Reserves containing relatively lower grades of mineralisation uneconomic to mine. Further, availability of permits, changes in operating and capital costs, and other factors could materially and adversely affect the Ore Reserves.Reserve. The company uses its estimates of Ore ReservesReserve to determine the unit basis for mine depreciation and closure rates, and to evaluate mine asset impairments. Changes in estimates of Ore ReservesReserve could significantly affect these items. At least annually, the company reviews mining schedules, production levels and asset lives in the company’s life-of-mine planning for all of the company’s operating and development properties. Significant changes in the life-of-mine plans may occur as a result of mining experience, new ore discoveries, changes in mining methods and rates, process changes, investment in new equipment and technology and gold prices. Based on the life-of-mine analysis the company reviews its accounting estimates and adjusts depreciation, 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’s results of operations and financial condition.
Contingencies
Accounting for contingencies 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 judgmentsjudgements to determine the amount to be recorded in the financial statements. By their nature, contingencies will only be resolved when one or more future events occur or fail to occur, and typically, those events will occur a number of years into the future. The company assesses such contingent liabilities, which inherently involves the exercise of significant management judgement and estimates of the outcome of future events.
Impairment of tangible and intangible assets
AngloGold Ashanti’s long-lived assets include property, plant and equipment, goodwill and other intangible assets. In assessing the potential impairment of its long-lived assets held for use, the company must make assumptions regarding estimated future cash flows and other factors relating to the respective assets. To the extent that the carrying value of the long-lived asset as recorded in the consolidated financial statements exceeds the discounted cash flows associated with these assets, an impairment charge is recognised in the consolidated financial statements. The company performs impairment tests for goodwill at least annually during the fourth quarter and whenever certain indicators of impairment exist. Impairment calculation assumptions are included in notes to the consolidated financial statements – Note 15 - “Tangible assets”.
Taxation
AngloGold Ashanti follows the liability method of accounting for deferred taxation whereby the company 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. 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.
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 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 MineralOre 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.
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. The decrease also includes the impact of weaker local currencies.
Heap leach inventory
The recovery of gold from certain oxide ores is achieved through the heap-leaching process. Under this method, ore is placed on leach pads where it is permeated with a chemical solution, which dissolves the gold contained in the ore. The resulting “pregnant” solution is further processed in a process plant where the gold is recovered. For accounting purposes, costs are added to leach pads based on current mining costs, including applicable depreciation, depletion and amortisation relating to mining operations. Costs are removed from the leach pad as ounces are recovered in circuit at the leach plant based on the average cost per recoverable ounce of gold on the leach pad.
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 dependent 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 realisable 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 2013 and 2012, $111 million and $128 million, respectively, of heap-leach inventory was classified as current as the company expects the related gold to be recovered within twelve months. The current 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 current portion of materials on the leach pad as at 31 December 2013. As at 31 December 2013, $479 million was classified as non-current compared with $436 million as at 31 December 2012.
5C. | RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC. |
Research and development expenditure included in the income statement amounted to $18 million, $21 million and $4 million $9 millionduring 2015, 2014 and $1 million during 2013, 2012 and 2011, respectively.
5D. | TREND INFORMATION |
For a discussion of trends affecting AngloGold Ashanti’s business and operations, see “Item 5A.:5A: Operating Results – Key factors affecting results”.
5E. | OFF-BALANCE SHEET ARRANGEMENTS |
AngloGold Ashanti does not engage in off-balance sheet financing activities, and does not have any off-balance sheet debt obligations, special purpose entities or unconsolidated associates. The most significant off-balance sheet item is the unaccrued future rehabilitation obligations.
See note 28 to the consolidated financial statements “Environmental rehabilitation and other provisions”.
5F. | TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS |
As at 31 December 20132015 AngloGold Ashanti had the following known contractual obligations:
Total $ | Less than 1 year $ | 1 – 3 Years $ | 3 – 5 Years $ | More than 5 years $ | ||||||||||||||||||||||||||||||||||||
(in millions) | Total $ | Less than 1 year $ | 1 – 3 years $ | 4 – 5 years $ | More than 5 years $ | |||||||||||||||||||||||||||||||||||
Long-term debt obligations including interest(1) | 5,739 | 440 | 1,012 | 419 | 3,868 | 3,923 | 212 | 478 | 1,651 | 1,582 | ||||||||||||||||||||||||||||||
Capital lease obligations | 60 | 10 | 14 | 15 | 21 | 133 | 11 | 23 | 23 | 76 | ||||||||||||||||||||||||||||||
Operating lease obligations | 34 | 18 | 8 | 6 | 2 | 11 | 5 | 2 | 4 | - | ||||||||||||||||||||||||||||||
Purchase obligations | ||||||||||||||||||||||||||||||||||||||||
- Contracted capital expenditure(2) | 437 | 356 | 81 | - | - | 61 | 61 | - | - | - | ||||||||||||||||||||||||||||||
- Other purchase obligations(3) | 746 | 610 | 106 | 23 | 7 | 656 | 568 | 68 | 18 | 2 | ||||||||||||||||||||||||||||||
Environmental rehabilitation costs(4) | 4,651 | 32 | 94 | 127 | 4,398 | 831 | 85 | 109 | 138 | 499 | ||||||||||||||||||||||||||||||
Pensions and other post-retirement medical obligations(5) | 152 | 12 | 24 | 26 | 90 | 108 | 9 | 20 | 20 | 59 | ||||||||||||||||||||||||||||||
Total | 11,819 | 1,478 | 1,339 | 616 | 8,386 | 5,723 | 951 | 700 | 1,854 | 2,218 |
(1) | Interest calculations are at the rate existing at the year end. Actual rates are set at floating rates for some of the borrowings (Refer Note 27 of the consolidated financial statements). |
(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 its operations and reclaim and rehabilitate the lands upon which it conducted its mining and gold recovery operations. The present estimated closure costs at existing operating mines and mines in various stages of closure are reflected in this table. They are calculated using undiscounted real cash flows, not nominal cash flows. The amount will change from year to year depending on rehabilitation work undertaken, changes in design and methodology and new occurrences. For more information of environmental rehabilitation obligations, see “Item |
(5) | Represents payments for unfunded plans or plans with insufficient funding. |
ITEM 6: DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
6A. | DIRECTORS AND SENIOR MANAGEMENT |
Directors
As at 31 March 2016, AngloGold Ashanti has a unitary board structure which comprisescomprising 11 directors – nine independent non-executive directors and two executive directors and seven non-executive directors. Certain information with respect to AngloGold Ashanti’s directors as at 31 December 2013 is set forth below:
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 |
Name | Age | Position | Year first appointed(1) | |||
Srinivasan Venkatakrishnan | 51 | Executive director and chief executive officer | 2005 | |||
Christine Ramon | 48 | Executive director and chief financial officer | 2014 | |||
Sipho Pityana(2) | 56 | Independent non-executive director and chairman | 2007 | |||
Nozipho January-Bardill | 65 | Independent non-executive director | 2011 | |||
Albert Garner | 60 | Independent non-executive director | 2015 | |||
Rhidwaan Gasant | 56 | Independent non-executive director | 2010 | |||
Dave Hodgson | 68 | Independent non-executive director | 2014 | |||
Michael J. Kirkwood | 68 | Independent non-executive director | 2012 | |||
Lumkile W (Wiseman) Nkuhlu | 72 | Independent non-executive director | 2009 | |||
Maria Richter | 61 | Independent non-executive director | 2015 | |||
Rodney J. Ruston | 65 | Independent non-executive director | 2012 |
(1) | Directors serve for a period of three years unless re-elected. At each annual general meeting, directors appointed since the previous annual general meeting are required to retire, but are eligible for re-election. In addition, one-third of the directors |
(2) |
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Appointed as Chairman with effect from |
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NON-EXECUTIVE CHAIRMAN:
Mr TT Mboweni (54)
BA; MA (Development Economics)
Independent Non-Executive Director
Tito Mboweni was appointed to the board and as Chairman of AngloGold Ashanti on 1 June 2010. As 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 Minister of Labour from 1994 to 1998, Mr Mboweni was the architect of South Africa’s post-apartheid labour legislation which today continues to provide the basis for the mutually respectful labour relationships central to AngloGold Ashanti’s operational approach in South Africa. He was the eighth Governor of the South African Reserve Bank from 1999 to 2009, and 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 fund 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 Financial Reporting 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 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
Chief Financial Officer (CFO)
Richard Duffy was appointed to the board of AngloGold Ashanti on 1 June 2013. He has 27 years of global mining industry experience, initially with Anglo American plc, from 1987 and then AngloGold Ashanti, from its inception in 1998. At AngloGold Ashanti, he has worked across a number of key areas. He was appointed Executive Officer: Business Planning in 2004 during which time he also deputised for the role of CFO. From 2004 to 2008, Richard was Executive Vice President: Business Development, accountable for mergers and acquisition activities as well as greenfields exploration. He was appointed Executive Vice President: Africa in June 2008 and Executive Vice President: Continental Africa in February 2010.
NON-EXECUTIVE DIRECTORS:
Mr SMSipho Pityana (54)(56)
BA (Hons) (Essex);, MSc, (London); Dtech (Honoris) (Vaal University of Technology)
Independent non-executive chairman
Non-Executive Director
Sipho Mila Pityana is aAppointed: A director having joined the board of AngloGold Ashanti inon 13 February 2007. As at 31 December 2013 he was the2007 and Chairman of the Safety, Health and Environment and the Nominations Committees, and a member of the following committees: Remuneration and Human Resources; Social, Ethics and Transformation; Risk and Information Integrity; Investment; and Financial Analysis Committees. He was previously the chairman of the Board’s Remuneration and Human Resources Committee.Board on 17 February 2014
Mr
Board committee memberships: | • Nominations Committee (Chairman) | |
• Remuneration and Human Resources Committee | ||
• Social, Ethics and Sustainability Committee |
Sipho 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 companycompanies, Izingwe Capital and Izingwe Holdings, which he chairs, Izingwe Capital.chairs. He is chairman of the JSE listedJSE-listed Onelogix Group and of Munich Reinsurance of Africa.Africa and a director of a number of companies including Aberdare Cables and Powertech Systems Integrators. He also served on the boards of Bytes Technology Group, AFROX,Afrox, SPESCOM the Scaw Metals and the Old Mutual Leadership Group. He previously worked as the Executive Directoran executive director of Nedcor Investment Bank and Managing Directormanaging 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 PityanaSipho has extensive public sector experience and international exposure. He was the first Director General of the Department of Labour in a democratic South Africa.the former President Mandela’s Government. 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.Organization. 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 Labour Council (NEDLAC).
Prof LW Nkuhlu (69)
BCom; CA (SA); MBA (New York University)
Independent Non-Executive Director
Wiseman Nkuhlu was first appointed to the board on 4 August 2006 and resigned on 30 April 2009.Council. He was re-appointed to the board 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 and also serves asis a member of the Risk and Information Integrity; Safety, Health and Environment; Nominations; Remuneration and Human Resources; Social, Ethics and Transformation; and Financial Analysis Committees. Advisory Council of the Council for the Advancement of the South African Constitution as well as Millennium Labour Council.
Wiseman Nkuhlu (72)
BCom, CA(SA), MBA
Deputy chairman
Appointed: 1 June 2009
Board committee memberships: | • Audit and Risk Committee | |
• Investment Committee | ||
• Nominations Committee | ||
• Remuneration and Human Resources Committee |
Prof Nkuhlu, a respected South African academic, educationist, professional and business leader, served as Economic Adviser to the former President of South Africa, Mr Thabo Mbeki, and as Chief Executivechief executive of the Secretariat of the New Partnership for Africa’s Development (NEPAD) from 2000 to 2005. From 1989 to 2000, heDevelopment. He served as a director on a number of major South African companies or subsidiaries, including Standard Bank, South African Breweries, Old Mutual, Tongaat, Hulett BMW and JCI.BMW. Prof Nkuhlu was Presidentalso president of the South African Institute of Chartered Accountants, from 1998 to 2000principal and Principal and Vice Chancellorvice chancellor of the University of Transkei from 1987 to 1991.and president of the Geneva-based International Organisation of Employees. He is currently a member of the Boardboards of the Ethics Institute of South Africa, Datatec Limited, the Nepad Business Foundation, and the Chartered Director Governing body of the Institute of Directors in South Africa. He was elected PresidentAfrica and the chairman of the Geneva-based International Organisation of Employees (IOE) in May 2008 and served for two years.Rothschild (SA). Lastly, he is a trustee of the International Financial Reporting Standards Foundation which provides oversight of the accounting standard setting operations of the International Accounting Standards Board.
Srinivasan Venkatakrishnan (Venkat) (51)
BCom, ACA (ICAI)
Chief executive officer and executive director
Appointed: 1 August 2005 and as CEO on 8 May 2013
Board committee memberships: | • Social, Ethics and Sustainability Committee |
Since Venkat’s appointment as CEO in May 2013, AngloGold Ashanti has successfully brought two mines into production, collectively reduced overhead and operating costs by almost half and used internally generated funds to cut debt levels by a third, despite the sharply lower gold price. During this period overall safety trends have improved and the company has sharpened its focus on improving sustainable free cash flow and returns.
Venkat was previously CFO at AngloGold Ashanti, a post he also held at Ashanti Goldfields, before its merger with AngloGold in 2004. In his role as CFO, he oversaw funding for both companies’ operating activities, giving him detailed knowledge of all mines and operating jurisdictions, with a unique perspective of both risks and opportunities. During this time he also bore responsibility for eliminating AngloGold Ashanti’s 12Moz of legacy hedge positions. Venkat has extensive experience of gold- and other capital markets.
Prior to joining Ashanti Goldfields, Venkat was a director of corporate reorganisation services at Deloitte & Touche in London.
Christine Ramon (48)
BCompt, BCompt (Hons), CA(SA), Senior Executive Programme (Harvard)
Chief financial officer and executive director
Appointed: 1 October 2014
Board committee memberships: | • Investment Committee |
Christine has held senior financial management and executive positions in various companies, in particular as chief financial officer and executive director of Sasol Limited from 2006 to 2013. Prior to this, she was chief executive officer of Johnnic Holdings Limited, having previously served as its financial director. Christine has served on the boards of Transnet SOC Limited and Johnnic Communications Limited. She is currently a non-executive director on the boards of MTN Group Limited and Lafarge (France).
Christine is also a member of the South African Institute of Chartered Accountants and the Association for the Advancement of Black Accountants of South Africa. She served previously as a member of the Standing Advisory Committee to the International Accounting Standards Board (IASB).and currently serves as Deputy Chair of the Financial Reporting Standards Council of South Africa. Christine is also the chairperson of the CFO Forum of South Africa.
Mr R Gasant (54)Albert Garner (60)
CA (SA)BSE, Aerospace and Mechanical Sciences
Independent Non-Executive Directornon-executive director
Appointed: 1 January 2015
Board committee memberships: | • Audit and Risk Committee • Investment Committee |
Albert Garner has extensive experience in capital markets, corporate finance and mergers and acquisitions having worked with Lazard Frères & Co., LLC for 37 years in various leadership positions. He is one of the most senior bankers at Lazard, currently leading their special committee practice and chairing their fairness opinion committee. He formerly led Lazard’s corporate finance practice. Albert became a general partner in 1989 and is now Vice Chair – US Investment Banking. Over the past 10 years he has advised and acted as lead adviser to more than 50 companies and their boards of directors on transformative transactions.
Rhidwaan Gasant (56)
BCompt (Hons), CA (SA), ACIMA, Executive Development Programme
Independent non-executive director
Appointed: 12 August 2010
Board committee memberships: | • Audit and Risk Committee (Chairman) • Investment Committee |
Rhidwaan Gasant was appointed topreviously 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.Limited. He is currently the Chief Executive Officer of Rapid African Energy Holdings, a start-up oil and gas exploration company, focused on Africa. He also serves as a director and chairs the Audit and Risk Committees of international companies in the MTN Group.
His other directorship include MTN (Dubai) Limited, Scancom Limited t/a MTN Ghana, MTN Nigeria Communications Limited, Rapid African Energy (Pty) Limited, Rapid African Energy Zambia, RAE Zambia Limited and RAE Uganda Limited.
Mrs NP January-Bardill (63)Dave Hodgson (68)
BA English; Philosophy and Certificate in Education (UBLS, Lesotho); MA Applied Linguistics (Essex UK); Diploma Human Resources Development (Damelin, SA)BSc (Civil Engineering), BSc (Mining) (Hons), BComm, AMP(Harvard)
Independent Non-Executive Directornon-executive director
Appointed: 25 April 2014
Board committee memberships: | • Investment Committee • Social, Ethics and Sustainability Committee |
Dave Hodgson formerly held a series of senior and executive positions over three decades with the Anglo American and De Beers group of companies, and also held the post of Chief Operating Officer of AngloGold Ashanti from November 2001 through to his retirement in April 2005. In addition, he has held non-executive directorships at Moto Gold Mines Limited, Uranium One Inc., Goliath Gold Mining Limited, Auryx Gold Corporation, Montero Mining and Exploration Limited, and Acacia Mining.
Nozipho January-Bardill (64)
BA, MA Applied Linguistics, Dipl Human Resources Development
Appointed: 1 October 2011
Board committee memberships: | • Social, Ethics and Sustainability Committee (Chairman) • Remuneration and Human Resources Committee |
Ambassador Nozipho January-Bardill has extensive experience in both the local and international public and private sectors. Besides AngloGold Ashanti, she also serves as an independent non-executive director on the boards of Credit Suisse Securities and Mercedes Benz South Africa, and as senior adviser to the United Nations Women’s Organisation and the United Nations Environment Programme. Before serving as a director of companies Nozipho was appointed to the boardMTN Group as head 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 Affairscorporate affairs and spokesperson, of the MTN Group where she alsoand served on themultiple boards of a number of operations in the MTN footprint. She is a former South AfricanFootprint. Prior to MTN she was the Ambassador toof Switzerland, Lichtenstein and the Holy See (Vatican) and former Deputy Director General, Human Capital Management and Headthe deputy director of the Foreign Service Institutehuman capital management in the thenSouth African Department of Foreign Affairs (now DIRCO). She is currently the founderhas worked in leadership positions in a number of non-governmental organisations and Executive Directorrecently completed 12 years of Bardill & Associates, a consulting company focusingservice on strategic communications, high-level government relations and stakeholder management. She serves on the boards of Credit Suisse Securities, Johannesburg, the Health and Welfare SETA which she chairs, and the State Information and Technology Agency. She is also a member of the United Nations Expert Committee on the Elimination of Racial Discrimination; Xenophobia and Related Intolerances for the period 2012-2016;elimination of racial discrimination. Human rights, social justice, sustainable development and was recently appointed Interim Chiefethical governance remain a central interest in every aspect of Staff of UN Women in New York.Nozipho’s life.
Mr MJMichael Kirkwood (66)(68)
AB, Stanford University, Economics & Industrial Engineering
Independent Non-Executive Directornon-executive director
Michael Kirkwood joined the board of AngloGold Ashanti onAppointed: 1 June 2012 and is the Chairman of the Remuneration and Human Resources Committee and is a member of the Audit and Corporate Governance; Investment; Social, Ethics and Transformation; and Nominations Committees. He
Board committee memberships: | • Remuneration and Human Resources Committee (Chairman) | |
• Audit and Risk Committee | ||
• Nominations Committee |
Michael Kirkwood is a highly experienced and respected former international banker, having worked at the highest levels of Citigroup during his 30 year30-year career with the bank. He is currently chairmanSenior Adviser (former chairman) of Ondra Partners LLP, Chairman of Circle Holdings PLC and a non-executive director of London Scottish International Limited. He formerly served on the boards of Kidde plc, UK Financial Investments Ltd, Eros International plc and as deputy chairman on PwC’s Advisory Board. During his career in finance, he held appointments as Chairman of British American Business Inc., as President and a Fellow of The Chartered Institute of Bankers and as deputy chairman of the British Bankers Association.
Maria Richter (61)
BA, Juris Doctor
Independent non-executive director
Appointed: 1 January 2015
Board committee memberships: | • Audit and Risk Committee | |
• Remuneration and Human Resources Committee |
Maria Richter is an experienced FTSE 100 non-executive director who has served on a diverse range of UK and International boards. She previously served on the board of National Grid plc in the UK from 2003 to July 2014 where she was the chairperson of the finance committee and member of the audit and nominations committees. She currently sits on the boards of UK Financial Investments LtdRexel Group, France, a global leader in the professional distribution of energy products and Eros International plc,services, and Bessemer Trust, a US wealth management company, and is Senior Advisor (former Chairman)a member of Ondra Partners LLP.the audit and compensation committees of Rexel and the remuneration committee of Bessemer Trust. She also serves on the board of Pro Mujer International, a women’s microfinance network and is chairman of the board of trustees of Pro Mujer UK. Maria’s professional career spanned 1980 to 2002 during which time she served in various positions at the former Dewey Ballantine, Prudential, Salomon Brothers Inc. and Morgan Stanley & Co.
Mr RJRodney Ruston (63)(65)
MBA;MBA Business, BE (Mining)
Independent Non-Executive Directornon-executive director
Rodney Ruston was appointed to the board of AngloGold Ashanti onAppointed: 1 January 2012
Board committee memberships: | • Investment Committee (Chairman) | |
• Audit and Risk Committee |
Rodney Ruston holds a degree in mining engineering and is Chairman of the Riskan MBA 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 business experience during which he has led private and publicly-listed companies in the resources, industry. Heoil and gas and construction industries. His international experience as the chief executive of a heavy construction supply contractor coupled with chief executive roles with operating resource companies provides the board with a broad based director, who can provide insight and advice on the full range of domestic and international activities in the AngloGold Ashanti business. Rodney is currently the Chief Executive Officerchief executive of County Coal Limited, ana start-up 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 Officerchief executive officer and President of North American Energy Partners Inc., a large Canadian mining and construction contracting company, listedwhich he took public with a listing on the NYSE and the TSX. Prior to that he was managing director of Ticor Ltd, an Australian-based titanium producer with operations in Australia and South Africa.
Board and Executive Committee movements during 20132015 and subsequent to year end
The following movements inchanges to the board of directors and the Executive Committee took place during the period from 1 January 20132015 to 31 December 2013,2015 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 8following directors retired at the Annual General Meeting on 6 May 2013;
WA Nairn, FB Arisman2015 and F Ohene-Kena retired frombeing eligible for re-election were re-elected by the board of 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 Board on 17 February 2014;
Sipho Pityana was elected as Chairman of the Board on 17 February 2014;
shareholders: Prof Wiseman Nkuhlu, was appointed as Lead Independent DirectorNozipho January-Bardill and Rodney Ruston.
In terms of the company’s Memorandum of Incorporation, the following directors will retire at the Annual General Meeting to be held on 17 February 2014;4 May 2016: Srinivasan Venkatakrishnan, Michael Kirkwood, Rhidwaan Gasant and
David Hodgson, was appointed as an independent, non-executive director with effect from 25 April 2014.and are eligible for re-election.
EXECUTIVE COMMITTEE
Day-to-dayAngloGold Ashanti’s executive management team (Executive Committee) comprises nine members of whom two are executive directors. This committee oversees the day-to-day management of the group’s affairs is vested in the Executive Committee, which is chaired by the Chief Executive Officeractivities and comprises 10 members. The committee’s work is supported by country and regional management teams.teams as well as by group corporate functions.
In addition to Mr SSrinivasan Venkatakrishnan and Mr R Duffy,Christine Ramon, the following people are members of the Executive Committee:
Ms IChris Sheppard (56)
BSc (Min. Eng.)
Chief Operating Officer – South Africa
As the Chief Operations Officer – South Africa, Chris’ portfolio includes three operating areas (West Wits, Vaal River and Surface Operations). He also leads the company’s innovative technology project in South Africa.
Chris, a mining engineer by profession, was most recently Managing Director of Murray & Roberts Cementation, one of Africa’s largest mining contractors and a division of South Africa’s largest publicly traded engineering & construction group.
Prior to that, Chris held positions as head of both mining and technical services at Lonmin Plc for four years, following six years at Anglo American Platinum Ltd., where he most recently held the post of Head Mining Technical Services. Chris is also an alumnus of Anglo American Plc’s Gold & Uranium Division and AngloGold Ltd., where he served latterly as general manager of deep gold mining operations in the Free State between 1997 and 2001. Chris holds a Bsc in Mining Engineering from the University of the Witwatersrand, and also completed an Advanced Management Programme at Harvard Business School.
Italia Boninelli (57)(60)
MA (Psychology);, Post Graduate Diploma in Labour Relations
Executive Vice President:President – People and Organisational Development
Italia Boninelli joined AngloGold Ashanti on 15 October 2010 as Senior Vice President:Holding the portfolio of Human Resources, Strategy and Change Management and was appointed to the Executive Committee on 1 December 2011 where sheItalia is responsible for the company’sglobal people strategy transformationat AngloGold Ashanti where it is well recognised that ‘people are the business, and change management initiatives. Sheour business is now Executive Vice President: People & Organisational Development, with accountability for the company’s System for People, Human Resources, corporate services and organisational redesign. Italia haspeople’. With more than 2530 years’ experience in human resources marketing communications, customer relationship management and business transformation, inacross a variety of industries, including mining, manufacturing, healthcare and banking.banking, Italia brings a wealth of knowledge, particularly in the labour field, which is crucial to domestic and international operations. She joined the group in 2010 and is responsible for building a registered industrial psychologist with the Health Professions Council of South Africa, holds a master’s degree in psychologyhighly engaged and a postgraduate diploma in labour relations.productive workforce.
Dr CECharles Carter (51)(54)
BA (Hons); DPhil; EDP, DPhil
Executive Vice President:President – Strategy and Business Development
Charles Carteris responsible for group strategy, business development, corporate finance, investor relations and communications portfolios. He has worked in the mining industry in South Africa and the Americas since 1991, infor more than 24 years and has had responsibility for a range of corporate roles with Anglo American plc, RFC Corporate Financeadditional portfolios that include human resources, risk management, business planning and AngloGold Ashanti. He is currently accountable for group strategy, corporate finance and business development, investor relations and corporate communications. Prior to this he was responsibleexecutive responsibility for the company’s business in Colombia and has also previously had executive accountability for business planning, risk management Project ONE implementation and corporate HR. Charles is a director of Rand Refinery Limited and a past Chairman of the Denver Gold Group.Colombia.
Mr GJGraham Ehm (57)(59)
BSc Hons; MAusIMM;Hons, MAusIMM, MAICD
Executive Vice President:President – Group Planning and Technical
Graham, Ehmwho has since 1977, gained diversemulti-commodity experience, has held senior leadership positions in mine operationsAngloGold Ashanti in Tanzania 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: Australia in 2006 and Executive Vice President: Australasia in December 2007. He assumed the role of Executive Vice President: Tanzania on 1 June 2009 and during August 2010, resumed the position of Executive Vice President: Australasia. In May 2013, he was appointed Executive Vice President: Planning and Technical, which includes oversight over safety,Australia. His current portfolio entails business planning asset optimisation,and portfolio optimization, capital investment optimisation, and monitoring (includingof projects, studies and exploration), Project ONE, risk managementexploration, and other technical disciplines and related centres of excellence.
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,non-managed joint ventures. In 2014 he was appointed as Executive Vice President: South Africa Region. Mike has the leadership role as Chief Operating Officer in the South African operations with responsibilityalso assigned accountability for the undergroundclosure and surface operations and leading three operating regions (West Wits, Vaal River and Surface Operations). He also leadsredevelopment of the company’s technology project in South Africa.Obuasi Gold Mine.
Mr RWRon Largent (53)(55)
BSc (Min. Eng.);, MBA
Chief Operating Officer:Officer – International
Ron Largent has overmore than 30 years ofyears’ experience in theinternational mining industry in both domesticoperations and international operations as well as project management. He has served on the Board of Directors of the Colorado Mining Association, the Nevada Mining Association and the California Mining Association. He joined the companyorganisation in 1994 as Manager, of Gold Operations for Cripple Creek & Victor, (CC&V).and was promoted to Executive Vice President – Americas in 2007. He was named Vice President (VP)subsequently promoted to Chief Operations Officer – International in 2013, and General Manager ofhis portfolio was extended to include Continental Africa. Effective January 2014, Australia was also included in his remit. He is currently accountable for overall strategic and operational responsibilities for production at the Jerritt Canyon Joint Venture in 2000company’s mining operations across four continents 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 appointment to the position of Executive Vice President: Americas in December of 2007. In June 2013, Ron was appointed Chief Operating Officer for the non-South African operations.nine countries.
Mr DDavid Noko (56)(58)
MBA;MBA, Senior Executive Programme;Programme, Post Graduate Diploma in Company Direction;Directorships, Engineering Higher National Diploma (Engineering)
Executive Vice President: SustainabilityPresident – Sustainable Development
David Noko joinedis a member of the group in June 2012 and assumed responsibility for social and sustainable development. David’s role includescompany’s Executive Committee. His portfolio as Executive Vice President: Sustainability, whichSustainable Development comprises the disciplines of Safety, Health, the Environment, Social and Community Affairs, Corporate Social Investment, Human Rights and Global Security, and public affairs. In this role, heGovernment Relations.
David sets the company sustainability strategy and direction, guiding the company’s performance 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 sustainabilitysustainable development landscape.
As a member of He also ensures the executive leadership team, David supports the CEOenablement and two Chief Operating Officers in enabling thefull implementation of the company sustainabilitycompany’s strategy as well asparticularly on matters relating to AngloGold Ashanti’sthe company’s involvement in country-based industry institutionshost countries and global institutions relatingwith respect to sustainable development.
Prior to joining AngloGold Ashanti, DavidHe previously served as the Managing Directorin several executive roles and directorships of CelaCorp (Pty) Ltdother leading mining and as the Chief Executive Officer and Managing Director ofmanufacturing companies in De Beers, Consolidated Mines Ltd. He was previously Vice President ofPepsi Cola, SAB, AstraPak, Harmony Gold and Royal Bafokeng Platinum and the Chamber of Mines in South Africa, and is a member of the Institute of Directors. He has held a host of other directorships, including the position of Deputy Chairman of the Board at Harmony Gold Mining Company Ltd. David has strong experience in business leadership and in the sustainable development function in other mining organisations and has developed his skills across a broad platform of technical, environmental and sustainability issues.
Ms MEMaria Sanz Perez (48)(50)
BCom LLB; H Dip Tax;LLB, Higher Diploma in Tax, AMP (Harvard), Admitted Attorney
Executive Vice President: Group General CounselPresident - Legal, Commercial and Governance and Company Secretary
Maria (Ria) Sanz Perez joinedpartners with the company’s business leaders to ensure AngloGold Ashanti in June 2011 having worked in a number of industries and major corporate organisations. She has heldcomplies with 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: Group General Counsel and Company Secretary, with accountability for legal affairs,requirements across the group. Other responsibilities are compliance, company secretarial corporate cost reduction,functions and integrated reporting. She is also accountable for the legal and commercial aspects of global procurement. Maria has been with the group since 2011 and has worked in similar positions for leading South African companies in her career including Investec, Sappi and Afrox.
Ms YZ Simelane (48)Executive Committee movements subsequent to year end
BA LLB; MAP; EMPM
Tirelo Sibisi who has over twenty years’ experience in human resources, has been appointed as Executive Vice President: Stakeholder RelationsPeople and Marketing
Yedwa Simelane joined AngloGold in November 2000 as Managing Secretary toOrganisational Development. She has replaced the board and Executive Committee. Prior to joining AngloGoldincumbent Italia Boninelli who retires at the end of March 2016. Tirelo’s appointment was effective 18 January 2016 at which point she was in financial services and has experience in the retirement funding industry. She was appointed an executive officer in May 2004 and Vice President: Government Relations in July 2008. In November 2009, she was appointed Senior Vice President: Corporate Affairs responsible for Government Relations, Corporate Communications, Marketing and the Sustainability Report. Yedwa is now Executive Vice President: Stakeholder Relations and Marketing, with accountability for stakeholder and government relations, marketing and sustainability reporting. She will also support the Chairman and CEOs offices in relation to government relations and the company’s involvement in multilateral organisations and the World Gold Council.
There are no family relationships by blood, marriage or adoption among anybecame a member of the above directors andCompany’s executive committee memberscommittee. Italia will support Tirelo until the end of AngloGold Ashanti. There is no arrangement or understanding between any of the above directors and executive committee members and any other person pursuantMarch 2016 to which he/she was selected asensure an executive member.orderly handover.
COMPETENT PERSONS
As part of its suite of annual reports, AngloGold Ashanti produces a Mineral Resource and Ore Reserve statementStatement and all the information in this report that relates to Exploration Results, Mineral Resources and Ore Reserve 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 aimed at providing assurance in respect of Exploration Results,Ore Reserve and Mineral Resources and Ore Reserves.Resource estimates. 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 AngloGold Ashanti Mineral ResourcesResource and Ore Reserve Steering Committee, Mr VA 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.responsibilities.
VA Chamberlain (51)(53)
MSc (Mining Engineering), BSc (Hons) (Geology), FAusIMM
Vaughan has 28 years’ experience and holds a Bachelor of Science (Honours) degree in Geology from the University of Natal and a Master’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: Geology and MetallurgyStrategic Technical Group and is Chairman of the AngloGold Ashanti Mineral ResourcesResource and Ore ReservesReserve Steering Committee.
6B. | COMPENSATION |
REMUNERATION AND HUMAN RESOURCES COMMITTEE
Remuneration Committee and Human Resources Committee (Rem&HR)(Remco)
The Rem&HR CommitteeRemco comprises non-executive directors and the purpose of the committee is to discharge the responsibilities of the board relating to all compensation, including all salary and equity compensation of the company’s executives. The committee establishes and administers the company’s executive remuneration with the broad objective of aligning executive remuneration with company performance and shareholder interests, setting remuneration standards aimed at attracting, retainingmotivating and motivatingretaining a competent executive team, linking individual pay with operational and company performance in relation to strategic objectives;objectives and evaluating compensation of executives including approval of salary, equity and incentive based awards. With respect to its mandate on human resources the committee has oversight to all strategic aspects of people development and human resource issues. The committee also considers and makes recommendations to shareholders on non-executive director’s fees.
The performance of the executive team, including the executive directors, is considered relative to the prevailing business climate and market conditions, as well as to annual evaluations of the achievement of key performance objectives. Bonuses paid to the executives are a reflection of performance of each of the executives and the company as a whole.
The members of the committee during 20132015 are reflected below:
Members
MJ Kirkwood (Chairman)
TT Mboweni
Prof LW Nkuhlu
SM Pityana
RJ RustonNP January-Bardill
MDC Richter
The meetings of the committee are attended by the Chief Executive Officer, Chief Financial Officer and Executive Vice President: People and Organisational Development, except when their own remuneration or benefits are being discussed.
Remuneration policy
The remuneration policy is designed to allow us to compete in a global market where we strive to retain and remunerate our employees using fair, robust and appropriate remuneration and reward for their contributions. Recognising that cost and shareholder value are fundamental drivers of the policy delivery, remain a focus.
Linking pay and performance for our executives is important and by having a large portion of executive pay defined as at risk pay, we are ensuring executive compensation is aligned with the overall performance of the company, the regions and the business units and that the executives have an overriding focus on safety, as a large percentage of their variable pay is directly linked to keeping our employees safe.
Total reward
When determining remuneration AngloGold Ashanti considers all elements of short- and long-term fixed and variable pay and ensures that it is consistent with the strategic direction of the organisation and the performance of the organisation and the individuals. For a description of share-based compensation and awards see “Item 6E: Share Ownership”.
Executive directors do not receive payment of directors fees or committee fees.
Benchmarking
Our executives and non-executives are benchmarked against a global group of competitors. AngloGold Ashanti’s size and complexity as well as each individual executive’s role and personal performance are reviewed against the benchmark group from a base pay, benefits, guaranteed pay and variable pay perspective. The 20132015 bespoke benchmark survey was completed by Mercer Consulting (South Africa) (Pty) LimitedMercer.
Our salary benchmarks are targeted at the market median;median of a global market; where there is a shortage of specialist and/or key technical skills higher than the benchmark median is paid, typically targeting the 75th percentile.paid.
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, Co-investment executive share plan and benefits)employee benefits and allowances) is analysed and compared with the benchmarks and the overall package is reviewed accordingly.
Retirement benefits/pension
Retirement benefits are granted to all executives. All new executives and employees receive retirement benefits under defined contribution plans. LegacyThere are no longer any executives in the legacy defined benefit plans remain in place for some executives.plans. Contributions vary from those prescribed by the USA 401(k) defined contribution fund, to the legacy defined benefit plan.fund.
EXECUTIVE DIRECTORS’ AND EXECUTIVE MANAGEMENT REMUNERATION
20132015
All figures in $000(1) |
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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) |
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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 |
All figures in $000(4) |
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S Venkatakrishnan(5) | Full year | 940 | 598 | 233 | 135 | 1,905 | - | 1,905 | ||||||||||||||||||||||||||
KC Ramon | Full year | 583 | 363 | 73 | 5 | 1,024 | - | 1,024 | ||||||||||||||||||||||||||
Total executive directors | 1,523 | 961 | 305 | 140 | 2,929 | - | 2,929 | |||||||||||||||||||||||||||
Prescribed officers | ||||||||||||||||||||||||||||||||||
I Boninelli | Full year | 477 | 240 | 51 | 63 | 830 | - | 830 | ||||||||||||||||||||||||||
CE Carter(6) | Full year | 677 | 361 | 20 | 458 | 1,515 | 391 | 1,906 | ||||||||||||||||||||||||||
GJ Ehm(7) | Full year | 617 | 442 | 26 | 206 | 1,290 | 114 | 1,404 | ||||||||||||||||||||||||||
RW Largent(8) | Full year | 1,187 | 628 | 220 | 504 | 2,540 | 333 | 2,873 | ||||||||||||||||||||||||||
DC Noko(9) | Full year | 477 | 330 | 51 | 118 | 976 | - | 976 | ||||||||||||||||||||||||||
MP O’ Hare(10) | 30 Sept 2015 | 460 | - | 94 | 443 | 997 | 18 | 1,016 | ||||||||||||||||||||||||||
ME Sanz Perez | Full year | 475 | 239 | 50 | 58 | 823 | - | 823 | ||||||||||||||||||||||||||
CB Sheppard(11) | 1 Jun 2015 | 274 | 121 | 34 | 80 | 510 | - | 511 | ||||||||||||||||||||||||||
Total prescribed officers | 4,645 | 2,361 | 547 | 1,930 | 9,482 | 856 | 10,339 | |||||||||||||||||||||||||||
Total executive director and management remuneration 2015 | 6,168 | 3,322 | 852 | 2,070 | 12,412 | 856 | 13,268 |
(1) |
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Salaries are disclosed only for the period from or to which office |
(2) | The performance related payments are calculated on the year’s financial results. |
(3) | Includes health care, |
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Other benefits of |
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Rounding of figures may result in computational discrepancies.
Executive Directors’ and Prescribed Officers’ once-off Retention Bonus Payment
During 2014 the Executive Directors’ and Prescribed Officers received a once-off retention bonus payment. In total the bonus amounted to $1.9m cash and 150,300 long term incentive plan share awards. S Venkatakrishnan’s cash portion of $0,6m was delivered in 61,738 deferred restricted shares during 2015.
NON-EXECUTIVE DIRECTORS’ COMPENSATION
The fees of non-executive directors are fixed by shareholders at the annual general meeting and, other than the fees they receive for their participation on board committees and allowances for traveling 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.
NON-EXECUTIVE DIRECTORS’ REMUNERATION
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 |
Director fees(1) | Committee fees(1) | Travel allowance(1) | Total | |||||||||||||
US Dollars | 2015 | |||||||||||||||
SM Pityana | 332,500 | 72,500 | 6,250 | 411,250 | ||||||||||||
R Gasant | 130,500 | 58,500 | 6,250 | 195,250 | ||||||||||||
NP January-Bardill | 130,500 | 52,500 | 6,250 | 189,250 | ||||||||||||
MJ Kirkwood | 130,500 | 75,000 | 36,250 | 241,750 | ||||||||||||
LW Nkuhlu | 174,000 | 80,000 | 6,250 | 260,250 | ||||||||||||
RJ Ruston | 134,000 | 56,000 | 36,250 | 226,250 | ||||||||||||
DL Hodgson | 130,500 | 43,500 | 6,250 | 180,250 | ||||||||||||
AH Garner | 134,000 | 43,500 | 26,250 | 203,750 | ||||||||||||
MDC Richter | 130,500 | 40,000 | 33,750 | 204,250 | ||||||||||||
Total(2) | 1,427,000 | 521,500 | 163,750 | 2,112,250 |
(1) | Directors’ compensation is disclosed in US dollars, the amounts reflected are the values calculated using the exchange rate of |
(2) | Fees are disclosed only for the period from or to which, office is held. |
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Rounding may result in computational differences.Non-Executive Directors do not hold service contracts with the company. Executive Directors do not receive payment of directors’ fees or committee fees.
6C. | BOARD PRACTICES |
The Board of Directors
The strategic leadership of AngloGold Ashanticompany is the responsibility ofgoverned by a unitary board comprising two executiveof directors, the composition of which promotes the balance of authority and sixprecludes any one director from dominating decision-making. Our board membership at year-end comprised eleven directors, nine independent non-executive directors and two executive directors.
The board is supported by its committees and has delegated certain functions to these committees without abdicating any of its own responsibilities. This process of formal delegation involves approved and documented terms of reference, which are reviewed annually.
Refer Item 6A: “Directors and Senior Management” for information about the composition of the Board and directors’ term of office and year of appointment.
Appointment and rotation of directors
Several factors including the requirements of relevant legislation, best practice recommendations, qualifications and skills of a prospective board member and the requirements of the Director’s Fit and Proper Standards of the company, as well as regional demographics are considered in appointing board members. New directors are appointed pursuant to the recommendations of the Nominations Committee, which conducts a rigorous assessment of the credentials of each candidate. Newly appointed directors are elected at the next annual general meeting following their appointment and to stand for approval by shareholders.
In terms of the company’s Memorandum of Incorporation (MOI), one non-executive asthird of the directors are required to retire at 31 December 2013.each Annual General Meeting and if they are eligible and available for re-election, will be put forward for re-election by the shareholders. The board has delegated some of its responsibilitiesdetermined that the directors to its subcommittees but reserves certain areas of responsibility solelystand for itself.
The following movements to the board of directors took place during the period from 1 January 2013 to 31 December 2013 and subsequent to year-end.
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,re-election in 2016 are Srinivasan Venkatakrishnan, Michael Kirkwood, Rhidwaan Gasant 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.Hodgson.
The company’s Memorandum of Incorporation does not set a mandatory retirement age for non-executive directors. However, in accordance with recommendations of King III and the requirements of the Sarbanes Oxley Act, directors are requiredIII—any independent non-executive director serving more than nine years should be subjected to step down from the board after nine consecutive years of service. Nevertheless, the board has discretion to extend this period with the consent of the individual director and after a rigorous assessmentreview of the director’shis independence and performance.
Non-executive directors do not hold service contracts with the company.
Appointment of directors
The board is authorisedperformance by the company’s Memorandum of Incorporation to appoint new directors based on recommendations by the Nominations Committee. Newly appointed directors are required to retire at the next annual general meeting following their appointment and stand for election by shareholders. Eligibility for appointment as a director is guided by the Director’s Fit and Proper Standards Policy, requirements of the Companies Act, King III and best practice.board.
Service contracts
Non-Executive Directors
Non-executive directors receive fees for their services as directors which are approved by shareholders at annual general meetings. Non-executive directors do not participate in the company’s share incentive scheme.
ExecutiveNon-executive directors havedo not hold service contracts of employment with the company.
Retirement by rotation
At every annual general meeting one-third of the 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 eligible for re-election. The directors required to retire at every annual general meeting will be those who have been the longest in office since their last election. The following directors will retire at the Annual General Meeting to be held on 14 May 2014: Rhidwaan Gasant, Sipho Pityana, Tito Mboweni and Richard Duffy, and are eligible for re-election. Tito Mboweni has decided not to make himself eligible for re-election.
Independence of directors
Determination of independence is guided by King III, the Companies Act, the requirements of the JSE and the New York Stock Exchange’s rules on independence as well as best practice. The board complies, at all times, with the requirement to consist of a majority of independent directors.
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 policy on director independence.
Lead Independent Director
In line with the recommendations of King III, the board appointed the Chairman of the Audit and Corporate Governance Committee as Lead Independent Director (LID). The principal role of the LID is to act when the board chairman is not present or is unable to perform his duties for other reasons, including a conflict of interests. The LID also serves as liaison between the Non-Executive Directors and the board chairman.
Executive Committee
Day-to-day management of the group’s affairs is vested in the Executive Committee, which is chaired by the Chief Executive Officer and comprises 10 members including the Chief Executive Officer. The committee’s work is supported by country and regional management teams.
On 21 May 2013, a major restructuring of the Executive Committee was undertaken to position the team to address the strategy and current imperatives of the company. The Executive Committee was restructured from 13 to 10 members including the appointment of two Chief Operating Officers, one for the South African Region and the second for the International Operations comprising Continental Africa, Australasia and Americas regions.
In terms of Section 66(10), read together with regulation 38 of the Companies Act, AngloGold Ashanti has determined that all members of the Executive Committee are prescribed officers.
Executive contracts
All members of the Executive CommitteeManagement team 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).Plan. All recently updated Executive Committeeexecutive contracts include details on participation in the Co-Investment plan and the applicable Minimum Shareholder Requirement (MSR).Plan.
Some South African executives (with the exception of(excluding the CEO whoand CFO for 2015) are paid offshore remuneration which is remunerated 100% in South Africa) have dual contracts which reflectdetailed under a separate contract. This reflects the percentage of their time focused on offshore business requirements. The payment under this contract has been extended in 2016 to include all South African based executives (including CEO and CFO) and increased to a maximum cap of 20 percent of base pay due to a review of the amount of time spent outside South Africa on the offshore responsibilities of each executive team member. Where practical, the offshore portion is now pensionable.
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%thirty-five percent 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 20132015 were as follows:
Executive committee member | Change of control | |||
Chief Executive Officer | 12 months | 12 months | ||
Chief Financial Officer | 6 months | 6 months | ||
Other Executive | 6 months | 6 months |
In appointing S VenkatakrishnanKey activities of the board and committees during 2015
The activities of the board and committees during 2015 were aimed at promoting the economic stability of the business. This entailed ensuring that its operations were conducted with due regard to the expectations and needs of stakeholders, the safety and health of employees and communities, and the development of systems to ensure proper access to and dissemination of credible information.
Board and committee meeting attendance
The composition of the board and committees at the date of this report and attendance at meetings during 2015 are disclosed in the table below:
Board | Audit and Risk | Investment | Remuneration and Human Resources | Social, Ethics and Sustainability | Nomination | |||||||||||||||||||
No of Meetings in 2015 | 10 | 6 | 5 | 4 | 5 | 4 | ||||||||||||||||||
SM Pityana | 10 | n/a | n/a | 4 | 5 | 4 | ||||||||||||||||||
LW Nkuhlu | 10 | 6 | 4 | 4 | n/a | 4 | ||||||||||||||||||
R Gasant | 10 | 6 | 5 | n/a | n/a | n/a | ||||||||||||||||||
DL Hodgson | 10 | n/a | 5 | n/a | 5 | n/a | ||||||||||||||||||
NP January-Bardill | 10 | n/a | n/a | 4 | 5 | n/a | ||||||||||||||||||
MJ Kirkwood | 10 | 6 | n/a | 4 | n/a | 4 | ||||||||||||||||||
AH Garner | 10 | 6 | 5 | n/a | n/a | n/a | ||||||||||||||||||
RJ Ruston | 10 | 6 | 5 | n/a | n/a | n/a | ||||||||||||||||||
MDC Richter | 10 | 6 | n/a | 4 | n/a | n/a | ||||||||||||||||||
S Venkatakrishnan | 10 | n/a | n/a | n/a | 5 | n/a | ||||||||||||||||||
KC Ramon | 10 | n/a | 5 | n/a | n/a | n/a |
Audit and Risk Committee
The Audit and Risk Committee comprises six independent Non-Executive Directors who collectively possess the skills and knowledge to oversee and assess the strategies and processes developed and implemented by management to manage the business within a continually evolving mining environment.
The Audit and Risk Committee’s duties as required by section 94(2) of the new CEOCompanies Act, King III and JSE Listing requirements are set out in its board-approved terms of reference which is reviewed and updated annually. These duties were discharged as follows:
confirmed the Remunerationintegrity of the group’s integrated reporting and Human Resources Committee increased his notice period from 9 months to 12 monthsannual financial statements;
nominated, for appointment by the shareholders, the independent external auditors;
reviewed and approved the terms of engagement as contained in the engagement letter of the external auditors;
approved the remuneration of the external auditors;
pre-approved all non-audit services in line with a formal policy on non-audit services;
assessed the previous CEO, Mark Cutifani’s, notice period. The Remunerationinternal and Human Resources Committee however reducedexternal auditors’ independence;
assessed 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 Chairmaneffectiveness of the board,group’s internal and external audit function;
approved the Chairmaninternal audit plan and subsequent changes to the approved plan;
reviewed the expertise, experience and performance of the finance function and Chief Financial Officer;
ensured that a combined assurance model is applied to provide a coordinated approach to all assurance activities;
reviewed developments in reporting standards, corporate governance and best practice;
reviewed the adequacy and effectiveness of the Group’s enterprise wide risk management policies, processes and mitigating strategies;
monitored the governance of information technology (IT) and the effectiveness of the Group’s information systems; and
evaluated the effectiveness of the committee through a self-assessment.
Proceedings and Performance Review
During 2015, the Audit and Corporate GovernanceRisk 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.formally met six times.
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.
Board committees
The board has established and delegated specific roles and responsibilities to 10 standing committees to assist it in discharging its duties and responsibilities. The terms of reference of each committee are approved by the board and reviewed annually or as necessary.
All board committees, except the Safety, Health and Environment Committee and the Nominations Committee are chaired by independent non-executive directors and the following committees comprise non-executive directors only – Audit and Corporate Governance, Nominations, Remuneration and Financial Analysis.
All committees meet quarterly in accordance with their terms of reference, except the Nominations and Financial Analysis committees which meet on a need-to basis and the Executive Committee which meets monthly or as often as required. Members of the Executive Committee and other management attend meetings of the various committees as and when required. During 2013, all committees held the minimum number of meetings as required and discharged their duties as prescribed by the respective terms of reference.
During 2013, of the two ad hoc committees, the Financial Analysis Committee did not meet and the Party Political Donations Committee was dissolved and its mandate transferred and included with that of the Social, Ethics and Transformation Committee.
Attendance at meetings by directors for the year ended 31 December 2013
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 | – |
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Audit and Corporate Governance Committee
The committee ensures the integrity of financial reporting and that appropriate governance processes are in place. In accordance with best practice recommendations of King III and the Sarbanes-Oxley Act of the United States, membership of this committee comprises four independent non-executive directors. Several members of the executive team and management, including the Chief Executive Officer, the Chief Financial Officer, the Chief Accounting Officer, Group General Counsel and Company Secretary, Vice President Treasury, Senior Vice PresidentPresident: Group Internal Audit, Financial Controllers atGroup Tax Manager, Group Risk Manager, Chief Information Officer, the regional operationsexternal auditors, as well as other assurance providers are invited to attend committee meetings in an ex officio capacity and provide responses to questions raised by committee members during meetings. The CEO and CFO meet with the external auditors attendedbefore the committee’s quarterly meetings as invitees. Membersmeeting and attend a debrief session with the Audit and Risk Committee.
The Audit and Risk Committee assessed its effectiveness through the completion of the committee regularly engage with key members of the financial management team for discussion on matters relevant to the committee’s role.
Pursuant to the Companies Act, King IIIa self-assessment process, results were discussed, actions taken and best practice,processes put in 2013 the committee, among 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 actionplace to address any adverse findings.
Reviewed and pre-approved non-audit services and related fees in accordance with policy on the approval of non-audit services.
Evaluated and confirmed the competence and professionalism of the Chief Financial Officer in accordance with JSE Listing Requirements.
Evaluated the accounting issues that impacted the group and company’s financial statements.
Reviewed major legal cases and disputes that impacted or could impact the company financially.
Reviewed and recommended the Annual Integrated Report 2012, Annual Financial Statements 2012 and 2012 annual report on Form 20-F to the boardareas identified for approval.refinement.
Held closed sessions with external and internal auditors, Group General Counsel and financial management to discuss any issues they may be facing in executing their responsibilities and advised accordingly.
Remuneration and Human Resources Committee
The Remuneration and Human Resources Committee assistsactivities are governed by the boardTerms of Reference (these were recently reviewed and approved during November 2015). The purpose of the Committee is to assist the Board in discharging its oversight responsibilities relating to executiveall compensation, including annual base salary, annual incentive compensation, long-term incentive compensation, employment, severance pay and non-executive directors’ feesongoing perquisites or special benefit items and equity compensation of the Company’s executives, including the Chief Executive Officer as well as retention strategies, design and application of material compensation programmes and share ownership guidelines.
With respect to its mandate on human resources, the Committee has strategic oversight of matters relating to the development of the company’sCompany’s human resources.resources with the main objective of creating a competitive human resource for the Group.
Highlights ofThe Committee operates in an independent role, operating as an overseer with accountability to the committee’s activities in 2013 include, amongst others:Board.
This is accomplished by:
ConsideredReviewing and recommended implementation of a retention scheme for executive management following the resignation of the then Chief Executive Officer.
Assisted the board in determining the remuneration of the new Chief Executive Officer appointed in May 2013.
Reviewed and approvedapproving corporate goals and objectives relevant to the compensation of the executive management.Executive Management team;
Approved both short-Evaluating the performance of the Executive Management team in light of these goals and long-term executiveobjectives annually and setting each executive’s compensation after evaluating executives’ performance against set targets and consideration of local and international executive remuneration trends.based on such evaluation;
Pro-actively explainedEnsuring that the mix of fixed and variable pay, in base pay, shares and other elements of compensation meets the company’s remuneration policy to major shareholders. At the annual general meeting, 82% of shareholders voted to endorse the policy.requirements and strategic objectives;
Reviewed market trends on non-executive directorsLinking individual pay with operational and made recommendationscompany performance in relation to strategic objectives;
Considering the board regardingsentiments and views of the board fee proposalcompany’s investors;
Overseeing and reviewing all aspects of any share option scheme operated by or to be presented to shareholders for approval.established by the company;
Appointed an externalRegularly reviewing incentive schemes to ensure continued contribution to shareholder value and ensure that these are administered in terms of the rules; and
Regularly reviewing human resources strategy aimed at ensuring the supply and retention of sufficient skilled resources to achieve the company’s objectives.
The current members of the Committee are:
Remuneration and Human Resource Committee Members | MJ Kirkwood (Chairman and independent NED) | |
NP January-Bardill (Independent NED) | ||
Prof LW Nkuhlu (Independent NED) | ||
SM Pityana (Board Chairman) M Richter (Independent NED) | ||
Number of meetings held from January to December 2015 | Four | |
Other individuals who regularly attended meetings | S Venkatakrishnan (CEO) | |
I Boninelli (EVP: People and Organisational Development) | ||
M Hopkins representing PwC (Independent Advisor to the Committee) | ||
C van Dyk (VP: Remuneration and Benefits and Secretary to the Committee) |
NED | – Non-Executive Director |
Remuneration Consultants
Where appropriate, the Committee obtains advice from independent remuneration advisorconsultants. The consultants are employed directly by the Committee and engage directly with them to assist the committee in better understanding trends inensure independence.
The Committee has appointed PwC to provide specialist, independent remuneration advice on all forms of executive and non-executive remuneration,pay.
Mercer performs an independent bespoke executive survey and its advice is primarily around salary benchmarking for both locallyexecutive and internationally, enabling the committee to make informed decisions on the subject.non-executive pay.
Devised adjusted metrics for the 2014 bonus share and long-term incentive plans to reflect the company’s revised priorities and to improve alignment with shareholder interests.
6D. | EMPLOYEES |
The average number of attributable employees (including contractors) in the AngloGold Ashanti group over the last 3three financial years was:
2013 | 2012 | 2011 | 2015 | 2014 | 2013 | |||||||||||||||||||
South Africa | 32,406 | (1) | 34,186 | 32,082 | 28,325 | 29,511 | 32,406 | |||||||||||||||||
Continental Africa | 16,625 | 16,621 | 16,539 | 11,942 | 16,070 | 16,625 | ||||||||||||||||||
Australasia | 925 | 494 | 509 | 836 | 832 | 925 | ||||||||||||||||||
Americas | 8,374 | 7,896 | 7,389 | 8,432 | 8,588 | 8,374 | ||||||||||||||||||
Other, including corporate and non-gold producing subsidiaries | 8,104 | (2) | 6,625 | 4,723 | 2,731 | 3,056 | 8,104 | |||||||||||||||||
Total | 66,434 | 65,822 | 61,242 | |||||||||||||||||||||
Total* | 52,266 | 58,057 | 66,434 |
* | The number of contractors employed on average during |
(1) |
|
|
Labour relations and collective bargaining
At AngloGold Ashanti, recognises the fundamental right of freedom of association of all employees and contractors, and adhereshave the right to collective bargaining, agreements with due regardwhich we recognise and apply according to the relevant legislationapplicable laws and regulations in each of the countries in which it operates. Relations with organised labour are founded on mutual respect, andwe operate. Only our Australasian operations do not have collective bargaining, as this is not recognised in Australia.
In the South African region, wage negotiations are conductedtook place from June through to October 2015. All unions participated in linethe central collective-bargaining process with the company’s values.
Approximately 93 percent of AngloGold Ashanti’s full-time employees are members of a union or are otherwise catered for through collective bargaining agreements. In Australia, union membership is not represented, but 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 year wage agreement (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 gold producers. Notwithstanding the challenging negotiations, a three-year wage settlement was agreed, without any strike action or loss of production. AngloGold Ashanti signed its agreement with NUM, Solidarity and UASA. Regrettably, AMCU did not sign but as the unions that did sign represented the majority (72%) of employees, in the industry after mediation and a 48-hour strike at the Vaal River operations. The terms and conditions werewage agreement was extended to all employees irrespective of union affiliation. The wage agreement included salary increases
At Geita in the first year, effective 1 July 2013, of 8% for Category 4Tanzania, Siguiri in Guinea 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 seen on site, with a number of outstanding issues being resolved andour Malian operations, annual wage negotiations were successfully concluded amicably.with final wage agreements being signed with the respective unions. In Mali, these negotiations also involved a review of the existing collective bargaining agreement, which is still under-way.
In Ghana, bilateral wage negotiations with the Ghana Mineworkers Union issues are driven by social planbegan at Iduapriem in October 2015. These negotiations continue. The decrease in number of employees in this region compared to 2014 was largely due to the reductionretrenchment of mining activitiesthe entire workforce of 4,312 fulltime employees at Sadiola and Yatela. Successfulthe Obusai mine in Ghana during 2014.
In the Americas region, annual wage negotiations were conducted in 2013 with 3% agreedboth Brazil and implemented, and backdated 6 months for employees at these mines and the Bamako office.
In Ghana, a two year wage agreement wasArgentina were successfully concluded forand agreements signed in the 2012 and 2013 wage period.
In Guinea a one year wage agreement was successfully concluded for 2013.
In Tanzania, in 2013, Geita Gold Mine management signed a revised access agreement with the Tanzania Mine & Construction Workers Union (TAMICO) following which a recognition agreement was concluded for the purposes of communication and consultation.
A pro-active approach to labour relations, integrated with other management initiatives, has been adopted at AngloGold Ashanti’s operations in Argentina, where the uncertain political and economic climate continue to affect relations between the various labour 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 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 activelatter part of this.
Representation for our contractors (truckers and construction) is still a concern for CVSA, resulting in strikes 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 address 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 Morro Velho employees), Santa Barbara Union (which covers 100% of the Corrego do Sitio Mine and 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 regarding the profit sharing for all employees and during August agrees upon the wage collective agreements for most employees except senior management. Both negotiations are a legal requirement and subject to renewal every year.2015.
6E. | SHARE OWNERSHIP |
DIRECTORS’ AND PRESCRIBED OFFICERS’ INTERESTS IN ORDINARY SHARES
The interests of directors and prescribed officers in the ordinary shares of the company at 31 December 20132015 which individually did not individually exceed 1 percent of the company’s issued ordinary share capital, were:
|
| Beneficial | ||||||||||||||||||||||
Beneficial | Beneficial | Direct | Indirect | |||||||||||||||||||||
Direct | Indirect | Direct | Indirect | 31 December 2015 | ||||||||||||||||||||
| ||||||||||||||||||||||||
31 December 2013 | 31 December 2012 | |||||||||||||||||||||||
| ||||||||||||||||||||||||
Non-executive directors | ||||||||||||||||||||||||
FB Arisman | - | - | - | 4,984 | ||||||||||||||||||||
MJ Kirkwood | 3,000 | - | - | - | ||||||||||||||||||||
Non-Executive Directors | ||||||||||||||||||||||||
SM Pityana | 2,000 | - | ||||||||||||||||||||||
MDC Richter(1) | 7,300 | - | ||||||||||||||||||||||
DL Hodgson | 1,500 | - | ||||||||||||||||||||||
MJ Kirkwood(1) | 15,000 | - | ||||||||||||||||||||||
LW Nkuhlu | - | 3,000 | - | 800 | 3,000 | - | ||||||||||||||||||
RJ Ruston(1) | - | 1,000 | - | - | ||||||||||||||||||||
| ||||||||||||||||||||||||
RJ Ruston(2) | - | 1,000 | ||||||||||||||||||||||
Total | 3,000 | 4,000 | - | 5,784 | 28,800 | 1,000 | ||||||||||||||||||
| ||||||||||||||||||||||||
Executive directors | ||||||||||||||||||||||||
RN Duffy | 1,180 | - | - | - | ||||||||||||||||||||
M Cutifani | - | - | 61,692 | - | ||||||||||||||||||||
AM O’Neil | - | - | - | 7,000 | ||||||||||||||||||||
Executive Directors | ||||||||||||||||||||||||
S Venkatakrishnan | 78,437 | - | 52,508 | - | 205,939 | - | ||||||||||||||||||
| ||||||||||||||||||||||||
KC Ramon | 3,104 | - | ||||||||||||||||||||||
Total | 79,617 | - | 114,200 | 7,000 | 209,043 | - | ||||||||||||||||||
| ||||||||||||||||||||||||
Company Secretary | ||||||||||||||||||||||||
ME Sanz Perez | 1,135 | - | - | - | 10,471 | 8,860 | ||||||||||||||||||
| ||||||||||||||||||||||||
Total | 1,135 | - | - | - | 10,471 | 8,860 | ||||||||||||||||||
| ||||||||||||||||||||||||
Prescribed officers | ||||||||||||||||||||||||
Prescribed Officers | ||||||||||||||||||||||||
I Boninelli | - | 1,284 | - | - | 5,728 | 13,204 | ||||||||||||||||||
CE Carter | 36,500 | - | 25,078 | - | 39,560 | - | ||||||||||||||||||
GJ Ehm(2) | 1,213 | - | - | - | 22,532 | - | ||||||||||||||||||
MP O’Hare | 1,379 | - | - | - | ||||||||||||||||||||
RW Largent | 1,910 | - | - | - | ||||||||||||||||||||
RW Largent(1) | 28,570 | - | ||||||||||||||||||||||
DC Noko | 615 | - | - | - | 17,086 | - | ||||||||||||||||||
| ||||||||||||||||||||||||
Total | 41,617 | 1,284 | 25,078 | - | 113,476 | 13,204 | ||||||||||||||||||
| ||||||||||||||||||||||||
Grand total | 125,369 | 5,284 | 139,278 | 12,784 | 361,790 | 23,064 | ||||||||||||||||||
|
(1) | Held on the |
(2) | Held on the Australian stock exchange as |
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 directorsDirectors and prescribed officers’Prescribed Officers’ interests in 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 DECEMBER 20132015
Date of transaction | Type of transaction | Number of shares | Direct/ beneficial | |||||||
Executive directors | ||||||||||
| ||||||||||
S Venkatakrishnan | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | Direct | ||||||||
24 February 2016 | On-market sale of ordinary shares to settle tax costs | 5,418 | Direct | |||||||
KC Ramon | 26 February 2016 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | 6,902 | Direct | ||||||
7 March 2016 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | 2,328 | Direct | |||||||
Company Secretary | ||||||||||
ME Sanz Perez | On-market sale of ordinary shares | 4,951 | Direct | |||||||
26 February 2016 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | Direct | ||||||||
26 February 2016 | On-market | Direct | ||||||||
Prescribed officers | ||||||||||
| 26 February | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | Direct | |||||||
| 1,804 | Direct | ||||||||
7 March 2016 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | Direct | ||||||||
8 March | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | Direct | ||||||||
| 10 March 2016 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | ||||||||
10 March 2016 | On-market sale of ordinary shares to settle tax costs | 2,469 | Direct | |||||||
CE Carter | 24 February | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | Direct | |||||||
25 February 2016 | On-market sale of ordinary shares to settle tax costs | 1,811 | Direct | |||||||
| On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | Direct | ||||||||
| 2 March 2016 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | Direct | |||||||
| On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | Direct | ||||||||
DC Noko | 3 March 2016 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | 8,921 | Direct | ||||||
3 March 2016 | On-market sale of ordinary shares to settle tax costs | 3,747 | Direct | |||||||
7 March 2016 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | 2,104 | Direct | |||||||
7 March 2016 | On-market sale of ordinary shares to settle tax costs | 884 | Direct | |||||||
9 March 2016 | On-market purchase of ordinary shares pursuant to the AngloGold Ashanti Co-Investment Plan | 4,535 | 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, 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 beis 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.
The table below summarises each director and executive committee member’s accomplishment of the MSR:
Executive | Target Achievement Date | MSR holding as at 31 Dec 2015 as % of net base pay | MSR Target Percentage as at 3 year Achievement Date | ||||||||||||
Executive Directors | |||||||||||||||
S Venkatakrishnan | March 2016 | 887 | % | 100 | % | ||||||||||
KC Ramon(1) | March 2018 | 10 | % | 100 | % | ||||||||||
Prescribed Officers | |||||||||||||||
I Boninelli | March 2016 | 460 | % | 75 | % | ||||||||||
CE Carter | March 2016 | 193 | % | 75 | % | ||||||||||
GJ Ehm | March 2016 | 342 | % | 75 | % | ||||||||||
RW Largent (2) | March 2016 | 96 | % | 75 | % | ||||||||||
DC Noko | March 2016 | 191 | % | 75 | % | ||||||||||
ME Sanz Perez | March 2016 | 345 | % | 75 | % | ||||||||||
C Sheppard(3) | March 2019 | 0 | % | 75 | % |
(1) | The Executive Director joined the company 1 October 2014 and the 3 year MSR achievement is only due in March 2018. |
(2) | RW Largent required to sell shares in order to pay for tax on vesting in US, resulting in reduced shareholding. |
(3) | The Prescribed Officer joined the company 1 June 2015 and the 3 year MSR achievement is only due in March 2019. |
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 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: 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, 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 objectiveintention of the incentive scheme is to incentivise such employeesensure that the medium to identify themselves more closely with the fortuneslong term interests of the group, support its continued growth,executive and shareholders are aligned, providing rewards to promote the retention of such employees.executives and wealth creation opportunities to the shareholders when the strategic performance drivers are achieved.
Non-Executive Directors are not eligible to 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 of grant, automatically expire.
The incentives offered by AngloGold Ashanti are reviewed periodically to ensure that they remain globally competitive, so as to attract, reward and retain managers of the highest caliber.calibre. As a result, several types of incentives, each with their own issue and vesting criteria, have been granted to employees. These are collectively known as the “AngloGold Share Incentive Scheme” or “Share Incentive Scheme”.
Although the Remuneration and Human Resources Committee has the discretion to incentivise employees through the issue of shares, only options or awards have so far been granted.
The type and vesting criteria of the options or awards granted are:
Performance-related options
The granting of performance-related options was approved by shareholders at the Annual General Meeting held on 30 April 2002 and amended at the Annual General Meeting held on 29 April 2005 when it was agreed that no further performance-related options would be granted. Performance-related options granted will terminate on 1 November 2014, being the date on which the last options granted hereunder may be exercised or they will expire.
Bonus Share Plan (BSP)
The granting of awards in terms of the BSP was approved by shareholders at the Annual General Meeting held on 29 April 2005 and amended at the General Meeting held on 6 May 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, executives 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 remains 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 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 original grant date, an additional 20 percent will be granted.
Certain changes were approved at the Extraordinary General Meeting of shareholders 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 an allocation of 120 percent deferred share matchingallocation for all categories of management. The Executive Committee members received an increased allocation from 120 percent to 150 percent. The vesting period has been shortened to two years with 50 percent vesting 12 months after the date of issue and the remaining 50 percent vesting 24 months after the date of issue.
Due to a shortage of shares the BSP deferred share allocation can be delivered in cash and/ or shares. The Share Incentive Scheme does not have sufficient shares under its control to meet awards based on previous criteria. Accordingly the criteria under the scheme are under review as well as considerations for obtaining shareholder approval for increasing the number of shares under the control of the scheme.
Long-TermLong Term Incentive Plan (LTIP)
The granting of awards in terms of the LTIP was approved by shareholders at the Annual General Meeting held on 29 April 2005. Executive directors 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 set company performance targets, under which the awards were made, are met, and provided that the participant remains 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 a pro-rata allocation of awards and an earlier vesting date.
In 2013,The LTIP is currently under review with 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 shortexpectation that longer 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 awardvesting periods 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.introduced.
PARTICIPATION BY EXECUTIVE DIRECTORS, EXECUTIVE MANAGEMENT AND OTHER MANAGERS IN THE ANGLOGOLD SHARE INCENTIVE SCHEME
Details of the options and rights to subscribe for ordinary shares in the company granted to, and exercised by, executive directors, executive management and other managers on an aggregate basis during the year to 31 December 20132015 and subsequent to year-end are set out in the table below.
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) | Balance at 1 January | Granted during 2015 | Exercised during 2015 | Pre-tax gains on share options exercised ($000) | Lapsed during 2015 | Balance as at 31 December 2015(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 | 366,859 | 332,021 | - | - | 22,391 | 676,489 | ||||||||||||||||||||||||||||||||||||
KC Ramon | 50,201 | 131,261 | - | - | - | 181,462 | ||||||||||||||||||||||||||||||||||||||||||
668,047 | 294,626 | 217,878 | 3,919 | 357,859 | 386,936 | 417,060 | 463,282 | - | - | 22,391 | 857,951 | |||||||||||||||||||||||||||||||||||||
Prescribed officers(2) | ||||||||||||||||||||||||||||||||||||||||||||||||
Prescribed Officers(2) | ||||||||||||||||||||||||||||||||||||||||||||||||
I Boninelli | 30,158 | 52,314 | - | - | - | 82,472 | 151,577 | 132,345 | - | - | 9,047 | 274,875 | ||||||||||||||||||||||||||||||||||||
CE Carter | 66,331 | 66,929 | 13,609 | 317 | 7,262 | 112,389 | 156,835 | 167,361 | 38,873 | 391 | 49,839 | 235,484 | ||||||||||||||||||||||||||||||||||||
GJ Ehm | 68,471 | 59,443 | - | - | 5,452 | 122,462 | 213,699 | 171,241 | 11,174 | 114 | 9,469 | 364,297 | ||||||||||||||||||||||||||||||||||||
RW Largent | 56,206 | 76,865 | 12,537 | 306 | 7,461 | 113,073 | 260,608 | 309,994 | 33,882 | 333 | 10,919 | 525,801 | ||||||||||||||||||||||||||||||||||||
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 | 113,512 | 131,028 | - | - | - | 244,540 | ||||||||||||||||||||||||||||||||||||
MP O’ Hare(3) | 224,359 | 1,268 | 2,022 | 18 | 96,701 | 126,904 | ||||||||||||||||||||||||||||||||||||||||||
ME Sanz Perez | 21,793 | 46,087 | - | - | - | 67,880 | 135,708 | 131,327 | - | - | 5,661 | 261,374 | ||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||
CB Sheppard(4) | - | 17,400 | - | - | - | 17,400 | ||||||||||||||||||||||||||||||||||||||||||
1,256,298 | 1,061,964 | 85,951 | 856 | 181,636 | 2,050,675 | |||||||||||||||||||||||||||||||||||||||||||
Other | 5,746,819 | 4,157,622 | 1,169,004 | 10,823 | 791,335 | 7,944,102 | ||||||||||||||||||||||||||||||||||||||||||
Total share incentive scheme | 4,580,329 | 3,320,328 | 930,743 | 16,823 | 1,281,531 | 5,688,383 | 7,420,177 | 5,682,868 | 1,254,955 | 11,679 | 995,362 | 10,852,728 |
(1) | The latest expiry date of all options/awards granted and outstanding at 31 December |
(2) | Pursuant to the |
(3) | No longer |
(4) |
|
Subsequent to year end and up to 28 February 2014, no18 March 2016, options/awards have been exercised by Executive Directors and Prescribed Officers, except for: CEare for Charles Carter who exercised 4,48121,764 awards for a pre-tax gain of $89k; and RW Largent$270,377; Italia Boninelli who exercised 4,79040,270 awards for a pre-tax gain of $101k.$523,276; Graham Ehm who exercised 40,145 awards for a pre-tax gain of $465,810; Ria Sanz Perez who exercised 56,945 awards for a pre-tax gain of $726,027 and Ronald Largent who exercised 82,174 awards for a pre-tax gain of $1,014,464.
A total of 1,668,6172,248,613 (2014: 1,902,542; 2013: 1,668,617) options/awards out of the 5,688,38310,852,728 (2014:7,420,177; 2013: 5,688,383) options/awards granted and outstanding at 31 December 20132015 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 respect of the previous year’s2014 financial results:
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 |
BSP 15 awards granted(7) | ||||||||||||||||
Total | Value ($000) | Total(2) | Value ($000)(1) | |||||||||||||
2015 | 2015 | |||||||||||||||
Executive Directors | ||||||||||||||||
S Venkatakrishnan | 98,456 | 957 | 233,565 | 2,670 | ||||||||||||
C Ramon | 16,624 | 162 | 114,637 | 1,288 | ||||||||||||
RN Duffy(3) | �� | - | - | 1,481 | 42 | |||||||||||
115,080 | 1,119 | 349,683 | 3,999 | |||||||||||||
Prescribed Officers | ||||||||||||||||
I Boninelli | 37,154 | �� | 361 | 95,191 | 1,094 | |||||||||||
CE Carter | 44,994 | 438 | 122,367 | 1,374 | ||||||||||||
GJ Ehm | 50,772 | 494 | 120,469 | 1,374 | ||||||||||||
RW Largent(4) | 96,976 | 943 | 213,018 | 2,393 | ||||||||||||
MP O’ Hare(5) | - | - | 1,268 | 36 | ||||||||||||
D Noko | 37,185 | 362 | 93,843 | 1,054 | ||||||||||||
ME Sanz Perez | 37,023 | 360 | 94,304 | 1,074 | ||||||||||||
CB Sheppard(6) | 17,400 | 169 | - | - | ||||||||||||
321,504 | 3,127 | 740,460 | 8,399 | |||||||||||||
Total awards to executive management | 436,584 | 4,246 | 1,090,143 | 12,399 |
(1) |
|
(2) |
|
(3) |
|
(4) | Received a cash payment in lieu of the 2010 BSP top-up due to US tax restrictions. |
(5) | No longer |
(6) |
|
(7) |
|
|
Number of time-related, performance-related, BSP and LTIP awards granted
In accordance with the JSE Listings Requirements and the rules of the AngloGold Share Incentive Scheme, the changes in options and awards granted and the ordinary shares issued as a result of the exercise of options and awards during the period 1 January 20132015 to 2829 February 20142016 are disclosed below:
Performance related | Bonus Share Plan(1) | Long-Term Incentive Plan(1) | Total Share Incentive Scheme | Total shares issued | Bonus Share Plan(1) | Long-Term Incentive Plan(1) | Total Share Incentive Scheme | |||||||||||||||||||||||||
At 1 January 2013 | 92,967 | 2,156,456 | 2,330,906 | 4,580,329 | 8,759,065 | |||||||||||||||||||||||||||
At 1 January 2015 | 3,305,515 | 4,114,662 | 7,420,177 | |||||||||||||||||||||||||||||
Movement during year | ||||||||||||||||||||||||||||||||
– Granted | - | 1,300,968 | 2,019,360 | 3,320,328 | 2,562,313 | 3,120,555 | 5,682,868 | |||||||||||||||||||||||||
– Exercised | (370) | (645,735) | (284,638) | (930,743) | 930,743 | (994,023 | ) | (260,932 | ) | (1,254,955 | ) | |||||||||||||||||||||
– Lapsed – terminations | (35,715) | (212,802) | (1,033,014) | (1,281,513) | (165,006 | ) | (830,356 | ) | (995,362 | ) | ||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||
At 31 December 2015 | 4,708,799 | 6,143,929 | 10,852,728 | |||||||||||||||||||||||||||||
Subsequent to year-end | ||||||||||||||||||||||||||||||||
– Granted | - | 1,924,042 | 2,167,474 | 4,091,516 | ||||||||||||||||||||||||||||
– Exercised | - | (171,324) | (44,975) | (216,299) | 216,299 | (815,764 | ) | (197,349 | ) | (1,013,113 | ) | |||||||||||||||||||||
– Lapsed – terminations | (14,093) | (8,742) | (285,651) | (308,486) | (27,582 | ) | (19,769 | ) | (47,351 | ) | ||||||||||||||||||||||
At 28 February 2014 | 42,789 | 4,342,863 | 4,869,462 | 9,255,114 | 9,906,107 | |||||||||||||||||||||||||||
At 29 February 2016 | 3,865,453 | 5,926,811 | 9,792,264 |
(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 2008 the maximum number of shares attributable to the 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 which may be acquired by any one participant in the scheme is 5 percent of the shares attributable to the scheme, being 850,000 ordinary shares in aggregate.
Also, 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. This has resulted in a diminishing pool of shares. At the Annual General Meeting held on 6 May 2015 a request was made for an additional 3,000,000 shares and this was approved. However, due to the ongoing practice in terms of not recycling shares, the low share price, salary increases and the impact of the foreign exchange rate, AngloGold Ashanti will again be requesting additional shares. This will be addressed with the shareholders at the Annual General Meeting of 4 May 2016.
To manage this challenge, a cap on the LTIP allocations has been implemented for 2016 to limit the number of shares available for allocation to share scheme participants. The cap is to a maximum of 1.25 percent of issued share capital of AngloGold Ashanti.
The table below reflects the total number of options/awards that are unissuedavailable for issue in terms of the share incentive scheme, as a result of this rule change:
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2015 Awards | 2014 Awards | |||||||
At 1 January | 3,679,584 | 6,489,300 | ||||||
Increase in allotment approved by shareholders at AGM | 3,000,000 | - | ||||||
6,679,584 | 6,489,300 | |||||||
Bonus Share Plan awards granted | (2,562,313 | ) | (1,983,469 | ) | ||||
Long Term Incentive Plan awards granted | (3,120,555 | ) | (2,217,675 | ) | ||||
Lapsed/Forfeited Bonus Share Plan | 165,006 | 408,491 | ||||||
Long Term Incentive Plan | 830,356 | 916,790 | ||||||
Retention Plan | - | 9,684 | ||||||
Time Related Plan | - | 56,463 | ||||||
At 31 December | 1,992,078 | 3,679,584 |
ITEM 7: SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
OVERVIEW
DESCRIPTION OF ANGLOGOLD ASHANTI’S SHARE CAPITAL
AngloGold Ashanti’s share capital consists of fourthree 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 authorised and issued share capital of AngloGold at 31 December 20132015 is set out below:
Title of class | Authorised | Issued | Authorised | Issued | ||||||||||||
Ordinary shares | 600,000,000 | 402,628,406 | 600,000,000 | 405,265,315 | ||||||||||||
E-Ordinary shares | 4,280,000 | 712,006 | ||||||||||||||
A preference shares | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | ||||||||||||
B preference shares | 5,000,000 | 778,896 | 5,000,000 | 778,896 | ||||||||||||
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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.:10B: Memorandum of Incorporation”. A Special Resolution to cancel the E ordinary shares was approved by the shareholders at the Annual General Meeting on 6 May 2015.
The following are the movements in the ordinary issued share capital at 31 December:
Ordinary shares
Number of Shares | Rand | Number of Shares | Rand | Number of Shares | Rand | Number of Shares | Rand | Number of Shares | Rand | Number of Shares | Rand | |||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||||||
At 1 January | 383,320,962 | 95,830,241 | 382,242,343 | 95,560,586 | 381,204,080 | 95,301,020 | 404,010,360 | 101,002,590 | 402,628,406 | 100,657,102 | 383,320,962 | 95,830,241 | ||||||||||||||||||||||||||||||||||||
Issued during the year: | ||||||||||||||||||||||||||||||||||||||||||||||||
- Settlement of the outstanding 6 percent Mandatory Convertible Subordinated Bonds | 18,140,000 | 4,535,000 | – | – | – | – | – | – | – | – | 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 | – | – | 154,299 | 38,575 | 145,018 | 36,254 | ||||||||||||||||||||||||||||||||||||
- Izingwe on conversion of E ordinary shares | 91,683 | 22,921 | 48,532 | 12,133 | 39,052 | 9,763 | – | – | 149,733 | 37,433 | 91,683 | 22,921 | ||||||||||||||||||||||||||||||||||||
- 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 | 1,254,955 | 313,739 | 1,077,922 | 269,480 | 930,743 | 232,686 | ||||||||||||||||||||||||||||||||||||
402,628,406 | 100,657,102 | 383,320,962 | 95,830,241 | 382,242,343 | 95,560,586 | 405,265,315 | 101,316,329 | 404,010,360 | 101,002,590 | 402,628,406 | 100,657,102 |
During the period 1 January 20142016 to and including 2 April 2014, 514,01118 March 2016, 1,884,055 ordinary shares were issued at an average issue price of R176.35R212.55 per share, resulting in 403,142,417407,149,370 ordinary shares being in issue at 2 April 2014. Of the 514,011 ordinary shares issued during the period 1 January 2014 to and including 2 April 2014, 3,665 ordinary shares were issued on conversion and cancellation of 14,110 E ordinary shares in accordance with the applicable conversion formula.
E ordinary shares
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 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, the BEE transaction).
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.
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. Therefore, they do not form part of the unissued share capital of the company.18 March 2016.
Redeemable preference shares
The A and B redeemable preference shares, all of which are held by wholly owned subsidiary, Eastvaal Gold Holdings Limited, a wholly owned subsidiary of AngloGold Ashanti, may not be transferred and are redeemable from the realisation 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.
7A. | MAJOR SHAREHOLDERS |
According to information available to the directors, the following are the only shareholders holding, directly or indirectly, in excess of 5 percent of the ordinary issued share capital of the company:
Ordinary shares held at | 31 December 2013 | 31 December 2012 | 31 December 2011 | 31 December 2015 | 31 December 2014 | 31 December 2013 | ||||||||||||||||||||||||||||||||||||||
Shareholder* | Number of Shares | percent Voting Rights | Number of Shares | percent Voting Rights | Number of Shares | percent Voting Rights | 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 | ||||||||||||||||||||||||||||||||||||||||||
Investec Asset Management (Pty) Limited (South Africa) | 31,185,069 | 7.69 | 28,576,916 | 7.07 | 35,614,617 | 8.85 | ||||||||||||||||||||||||||||||||||||||
Van Eck Global | 26,941,752 | 6.65 | 24,759,780 | 6.13 | 21,842,177 | 5.42 | ||||||||||||||||||||||||||||||||||||||
Public Investment Corp. of South Africa | 25,936,314 | 6.40 | 31,854,515 | 7.88 | 30,166,288 | 7.49 | ||||||||||||||||||||||||||||||||||||||
Paulson & Co., Inc | 31,424,135 | 7.80 | 28,607,495 | 7.46 | 32,570,668 | 8.52 | 25,027,300 | 6.18 | 26,205,400 | 6.49 | 31,424,135 | 7.80 | ||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||
Dimensional Fund Advisors | 20,901,571 | 5.16 |
* Shares may not necessarily reflect the beneficial shareholder
At 31 December 2013,2015, a total of 185,581,840198,617,090 shares (or 46.0949 percent of issued ordinary share capital) were held by The Bank of New York Mellon, as Depositary for the company’s American Depositary Receipt programme. Each American Depositary Share (ADS) is equivalent to one ordinary share. At 31 December 2013,2015, the number of persons who were registered holders of ADSs was reported at 3,045.2,732. 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 2013,2015, there were 14,8238,479 holders ofon record of AngloGold Ashanti ordinary shares. Of these holders 428223 had registered addresses in the United States and held a total of 40,190,94238,444,526 ordinary shares, approximately 10 percent of the total outstanding ordinary shares. In addition, certain accounts ofon 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 3118 March 2014,2016, a total of 187,924,506196,171,686 ADSs or approximately 46.648 percent of total issued ordinary share capital were issued and outstanding and held ofon record by approximately 2,9752,715 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 Company had the following transactions with related parties during the year ended 31 December 2013:2015:
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) |
At 31 December | 2015 | |||
(in millions) | Purchases (by)/from related party $ | |||
Purchases of goods and services (by)/from equity accounted joint ventures and associates | ||||
Margaret Water Company | 6 | |||
Rand Refinery (Pty) Limited | 2 | |||
Société d’Exploitation des Mines d’Or de Sadiola S.A. | (4 | ) | ||
Société des Mines d’Or Morila S.A. | (1 | ) | ||
3 |
Amounts due by joint ventureventures and associate related partiesassociates arising from purchases of goods and services are unsecured and non-interest bearing.
As at 31 December 20132015 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 associates as at 31 December
(in millions) | $ | |||
|
(1) |
|
As at 31 December 20132015 there are no outstanding balances arising from loans owed to related parties.
7C. | INTERESTS OF EXPERTS AND COUNSEL |
Not applicable.
ITEM 8: |
8A. | CONSOLIDATED FINANCIAL STATEMENTS AND OTHER INFORMATION |
See “Item 18: Financial statements”.
There is no material proceeding in which a director, officer or affiliate of AngloGold Ashanti is either a party adverse or has 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 the payments of state sales taxes at the rate of 12 percent12% 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) areassessments were approximately $62 million and $39 million respectively (in each case, including estimated penalties and interest). In November 2006,as at 31 December 2013, respectively. Various legal proceedings have taken place over the administrative council’s second chamber ruled in favour of MSG and fully cancelled the tax liability relatedyears with respect 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 ofthis matter, as previously disclosed. On 5 May 2014, the State of Goiás published a law which enables companies to settle outstanding tax administrative council. In November 2011, with respect toassessments of this nature. Under this law, MSG settled the First Assessment,two assessments in May 2014 by paying $14 million in cash and June 2012, with respect to the Second Assessment, the administrative council’s full board approved the suspensionby utilising $29 million of proceedings and the remittanceexisting VAT credits. The utilisation 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 rulingVAT credits was in favour ofconfirmed by the State of Goiás. MSG believes both assessments are in violations during the third quarter of federal legislation on sales taxes and is considering its options.2015. The cash settlement was further set off by an indemnity from Kinross of $6 million.
The State of Goiás v. Mineração Serra Grande S.A. (MSG): In 2013, the Goiás State Treasury filed claims in the tax administration council 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.$92 million as of the May 2014 settlement date. MSG filed an administrative challenge at the first level which was denied,denied. Utilising the same settlement law described in the proceeding above, MSG negotiated a settlement in May 2014 with the State of Goiás by paying approximately $2.8 million in cash and is preparing to file a second administrative challenge appealingby utilising approximately $2.0 million of tax credits. The utilisation of the negative ruling.VAT credits was confirmed by the State of Goiás during the third quarter of 2015.
The State of Minas Gerais v. Mineração Serra Grande S.A. (MSG):In Brazil, MSG received a tax assessment in October 2003 from the State of Minas Gerais related to sales taxesVAT on gold.gold bullion transfers. The tax administrators rejected all MSG’s appealsthe company’s appeal against the assessment, reaching its closure underassessment. The company is now appealing the Administrative Court in 2003. In 2005,dismissal of the case to the State Court of Minas Gerais began the Judicial Foreclosure of the assessment which is yet to be sentenced.Gerais. The assessment is approximately $16$11 million.
As part of the acquisition by AngloGold 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 Brazilian federal mining authority, issued a tax assessment against AABM in the amount of $19$11 million relating to the calculation and payment by AABM of the financial contribution on mining exploitation in the period from 1991 to 2006.
The matter has been dormant since 2007. AngloGold Ashanti’sAshanti 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 $19$11 million.
Notice from the Colombian Tax Office (DIAN) to AngloGold Ashanti Colombia S.A. (AGAC):AGAC received notice in January 2013 from the DIAN that DIANit disagreed with the company’s tax treatment of certain items in AGAC’sthe 2010 and 2011 income tax returns. On 23 October 2013, AGAC received the official assessments from the DIAN has requestedwhich established 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 anticipated to take twelve months, at the end of which AGAC may file suit if the ruling is not reversed. Anan estimated additional tax of $35$20 million will be payable if the tax returns are amended. Penalties and interest for the additional taxtaxes are expected to be $153$108 million. The company believes that the DIAN has applied the tax legislation incorrectly. AGAC subsequently challenged the DIAN’s ruling by filing lawsuits in March 2015 and April 2015, before the Administrative Tribunal of Cundinamarca (the trial court for tax litigation).
Argentina Tax Authority (AFIP) and Cerro Vanguardia S.A. (CVSA): On 12 July 2013, CVSA received a notification from the AFIP requesting corrections to the 2007, 2008 and 2009 income tax returns of about $8 million basedrelating to the non-deduction of tax losses previously claimed on Colombian tax law.hedge contracts. The AFIP is of the view that the financial derivatives could not be considered as hedge contracts, as hedge contract losses could only be offset against gains derived from the same kind of hedging contracts. Penalties and interest on the disputed amounts are estimated at a further $24 million. CVSA and AFIP have corresponded on this issue over the past several years, and the government continues to assert its position regarding the use of the financial derivatives. CVSA filed an appeal with the Tax Court on 19 June 2015.
SOUTH AFRICA
Silicosis litigation
Silicosis litigation:On 03 March 2011, inMankayi vs. AngloGold Ashanti, the Constitutional Court of South Africa held that section 35(1) of the Compensation for Occupational Injuries and Diseases Act, 1993 In November 2014, Anglo American South Africa, AngloGold Ashanti, Gold Fields, Harmony and Sibanye formed an industry Working Group on OLD to address issues relating to compensation and medical care for occupational lung disease in the gold mining industry in South Africa. The Working Group now also includes African Rainbow Minerals. The companies believe that fairness and sustainability are crucial elements of any solution and have embarked on an extensive engagement process with all stakeholders to work together to design and implement a comprehensive solution that is both fair to past, present and future gold mining employees, and also sustainable for the sector. The companies are among respondent companies in a number of lawsuits related to OLD. The companies do not believe that they are liable in respect of The companies active in Mankayi v. AngloGold Ashanti. In October 2006, a former employee, Mr. Thembekile Mankayi, instituted a legal action in the Witwatersrand Local Division High Court of South Africa against AngloGold Ashanti, claiming approximately R2.6 million (approximately $0.3 million) for damages allegedly suffered as a result of silicosis. Mr. Mankayi’s case was heard in the High Court of South Africa in June 2008, and an appeal was heard in the Supreme Court of Appeal in 2010. In both instances judgement was awarded in favour of AngloGold Ashanti on the basis that an employer is indemnified against such a claim for damages by section 35• (COIDA). Mr. Mankayi then lodged a further appeal that was heard in the Constitutional Court of South Africa (Constitutional Court). On 3 March 2011, the Constitutional Court held that section 35 of COIDA 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.“compensable diseases” under the Occupational Diseasesclaims brought, and they are defending these. They do, however, believe that they should work together to seek a solution to this South African mining industry legacy issue.Mines and Workers Act, 1973 (ODMWA). This judgement allows such qualifying employeegold mining have been working for many years to pursue a civil claim for damages againsttry to eliminate the employer outside the provisionsincidence of either statute. Following the Constitutional Court judgement, Mr. Mankayi’s estate may proceed with his case in the High Court. Without paying any amount in settlement of the claim, AngloGold Ashanti paid to Mr. Mankayi’s estate agreed legal costs in January 2013.
Following the Constitutional Court decision, AngloGold Ashanti has become subject to other claims relating to silicosis and other Occupational Lung Diseases (OLD), including potential class actions and several individual claims.OLD. These efforts continue.
Bangumzi Bennet Balakazi and others v. The Class Actions
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 Bangumzi 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 inincluding Anglo American South Africa, ARM, Gold Fields, Harmony, DRDGold, Village Main Reef, Randgold and Exploration, and Sibanye, were served with a consolidated class action application on 21 August 2013, as well as a request for an application institutedamendment to alter the scope of the classes previously proposed by Bongani Nkalathese representatives. The applicants requested certification of two industry-wide classes: a Silicosis Class and others to certify another class consisting of (i)a Tuberculosis Class, which each cover current and former underground mineworkers who have silicosis (whether or not accompanied by any other disease)worked on the mines from 12 March 1965 and who work or have worked on certain specified gold mines at any time from 1 January 1965, to date; and (ii)contracted the dependantsrespective diseases (or the dependents of mineworkers who died asof those diseases). The applicants envisage a result of silicosis (whether or not accompanied by any other disease)two-stage process in the class action. The first stage is to resolve common issues and who worked on these gold mines at any time after 1 January 1965. AngloGold Ashanti delivered notices of intentionthe second stage allows the individuals to defendopt in to the class to make their claims 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 amining companies.
If the Court declines to certify the Silicosis and Tuberculosis Classes, then the applicants request to amendthat the Court certify 32 distinct classes identified– one for each respondent mining company named in these previous applications and to instead certify two classes consistingthe application – composed of (i)the current and former mineworkers who have contracted silicosis andor tuberculosis (or the dependantsdependents 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 determineddiseases).
Arguments in the arbitration ofBlomclass action certification were heard in October 2015, and others v. Anglo American South Africa Ltd. (AASA), and who are not named plaintiffs in another action instituted inwe await the United Kingdom currently underway against AASA; and (ii) who have or had 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. Court’s judgement.
The Individual Claims
In the event the
class is certified, such class of workers would be permittedperiod from October 2012 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,April 2014, AngloGold Ashanti received a further 311,256 individual summonses and particulars of claim relating to silicosis and/or other OLD. TheAll of these claims were filed in the South Gauteng High Court, Johannesburg, but were subsequently referred to arbitration on 9 October 2014.
On 4 March 2016, AngloGold Ashanti and Anglo American South Africa (AASA) entered into a settlement agreement with claimants’ counsel for the full and final settlement with no admission of liability of all individual claims brought against AngloGold Ashanti and 4,388 individual claims brought against AASA.
An independent trust has been set up to administer the allocation of the settlement amount on the basis of claimants’ employment and medical histories. AngloGold Ashanti and AASA will contribute, in stages, toward a total amount claimedof up to R464 million (approximately $30 million as at 31 December 2015), which will be placed in the 31 summonses is R77 million (approximately $7 million). On 22 October 2012, AngloGold Ashanti filed a notice of intentionindependent trust.
The settlement agreement relates solely to oppose theseindividual claims and took legal exception todoes not cover the summonses on the groundclass actions mentioned above.
It is possible 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 additional class actions and/or about 3 March 2014, AngloGold Ashanti received an additional 21 individual summonses and particulars of claimclaims 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 claimsOLD will be filed against AngloGold Ashanti in the future or whether the classes described above or other classesfuture. AngloGold Ashanti will defend all current and subsequently filed claims on their merits. Should AngloGold Ashanti be certified. Shouldunsuccessful in defending any such claim resultclaims, or in an adverse outcome for AngloGold Ashanti, anyotherwise favourably resolving perceived deficiencies in the national occupational disease compensation framework that were identified in the earlier decision by the Constitutional Court, such outcomematters would have an adverse effect on its financial position, which could be material.
Given the inherent legal and factual uncertainties with respect to the pending claims and other claims not yet filed against the company, AngloGold Ashanti v. Pamodzi Gold (Orkney) (Pty) Limited (in Provisional Liquidation) (Pamodzi): AngloGold Ashanti sold certain mine shaftsis unable to another mining company in 1998 but continued to service them pursuant to the terms of a service contract. When Pamodzi later purchased the shafts, AngloGold Ashanti provided services to Pamodzi on the same basis that it had provided services to the previous owner, on the understanding that a new agreement would be entered into once all of the commercial terms ofreasonably estimate its potential liability for any such an agreement were finalized. On 10 March 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.
AngloGold Ashanti alleges thatclaims at the time it was placed in provisional liquidation, Pamodzi owed AngloGold Ashanti approximately R59 million (approximately $6 million) for services rendered. AngloGold Ashanti also alleges that Pamodzi owes AngloGold Ashanti approximately R54 million (approximately $6 million) for services rendered subsequent to the liquidation application being made. The date of the final liquidation order has not yet been set.
On 16 March 2012, Pamodzi (in provisional liquidation) and four others issued summons against AngloGold Ashanti in the North Gauteng High Court, Pretoria, demanding the return of approximately R89.5 million (approximately $10 million) paid by Pamodzi to AngloGold Ashanti less than six months prior to the winding-up of Pamodzi. Plaintiffs further allege that AngloGold Ashanti took possession of some 26.9 kilograms of gold owned by Pamodzi in March 2009 and demand either that the gold be returned or that reimbursement be provided in the amount of R7.1 million (approximately $0.8 million). Pamodzi entered final liquidation and withdrew its claim against AngloGold Ashanti on 16 May 2013.this time.
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 detailsOn 23 June 2014, the Labour Court upheld the interim interdict. AMCU appealed this ruling to the Labour Appeal Court, and on 24 March 2016, the 2013 Wage Agreement, see “Item 6D.: Employees—Labour relations and collective bargaining”.Appeal Court also upheld the interdict.
COLOMBIA
La Colosa class action lawsuits: The following twoFour (4) class action lawsuits are currently pending before different Colombian state and federal courts in relation to AngloGold Ashanti Colombia S.A. (AGAC)’s Santa Maria-Montecristo and La Colosa project,projects, which is currentlyare in itstheir 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).
phase. Each lawsuit aims to stop exploration and mining in certain restricted areas affected by the La Colosa projectprojects 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,In one of these lawsuits, the court granted the plaintiff a preliminary injunction, suspending the mining concession contracts of the Santa Maria-Montecristo project in September 2011. The injunction remains in place and has soughtbeen challenged by AGAC; however, it is not a critical path item for the dismissalproject.
While plaintiffs in all cases have petitioned the court to cancel concession contracts for the mining projects, the company believes that courts and judges in Colombia do not have the authority to order such cancellations. Such power, by law, vests solely in the mining authority, which has the discretion to declare concessions void if a contractor breaches applicable environmental laws or regulations. To date, the company is not aware of mostthe Colombian government having ever declared a concession void for these reasons. AGAC continues to oppose, through a variety of integrated legal and political strategies, 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 class 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 are cancelled, 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. The request to annul the injunction was denied by the Director of Cortolima, and AGAC is continuing with its plans to challenge the injunction through a variety of legal actions. On 31 August 2013, AGAC presented before the State Council the claim for the annulment and rights re-establishment. This matter is pending.
Department of the Environment, Housing and Territorial Development (DoE) v. AngloGold Ashanti Colombia S.A. (AGAC): In Resolution No. 785 ofOn 29 April 2009, the DoE opened an investigation against AGAC and brought a list of charges against it for carrying out exploratory activities at the La Colosa project without having obtained the applicable 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 Code 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 cutting down of trees. In 2010, while conducting its investigation against AGAC, the DoE also proceeded to update the existing 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, theThe 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$70,000 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,company. AGAC subsequently filed an action against the DoE in the Administrative Superior Court of the Cundinamarca District to annul the penalties. On 16 April 2012,fine but paid the action was submitted tofine while awaiting the court officeresults 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 onactions. On 27 March 2015, the tutela action has not yet been scheduled.
Administrative Superior Court annulled the fine. The DoE appealed this ruling. If the annulment is upheld, the $70,000 payment will be refunded to AGAC. Should the DoE’s fine ultimately be upheld by the courts, Ingeominasthe mining authority would then have the discretion to terminate AGAC’s three core mining concession contracts relating to the La Colosa project.
Piedras: In 2013 the eventCouncil for the city of such termination,Piedras, near the La Colosa project, issued a referendum attempting to ban all mining activities in Piedras. This referendum does not have an immediate impact on the La Colosa project, however, AGAC would be requiredbelieves this referendum is in violation of federal law. The referendum was subsequently validated by the local administrative court in Tolima (the Department in which Piedras is located). AGAC subsequently filed a request for annulment of the referendum with the Second Administrative Court of Ibaque and a tutela (a legal action alleging a violation of AGAC’s constitutional rights) with the State Council (Supreme Court for administrative purposes). On 21 August 2014, the State Council dismissed the tutela action for lack of standing, which AGAC appealed to abandonthe Constitutional Court (highest authority on administrative litigation). On 11 December 2014, the Constitutional Court affirmed the lower court’s dismissal on the grounds that AGAC did not have mining tenements in Piedras. However, in the same ruling the court recognised that Piedras did not follow the correct procedure when it issued the 2013 referendum.
La Colosa Human Rights Litigation: In November 2014, the Personero (Ombudsman) of Ibaque filed suit against the Colombian government in the Inter-American Court of Human Rights. This Court is an autonomous judicial institution whose purpose is the application and interpretation of the American Convention on Human Rights (Colombia, along with many other Central and South American countries, has ratified this Convention). The suit alleges that the government has failed to protect the interests of the peoples of Ibaque by issuing permits for the La Colosa project and allby failing to resolve the class actions that have been pending for an extended period of AGAC’s other existing mining concession contracts and pending proposalstime. Although AGAC is not a party to the suit, it is important to the development of the La Colosa project. The first step in the litigation process is for new mining concession contracts would also be cancelled. In addition, AGAC would be banned from doing business withthe Court to decide whether to accept the case. If the case is accepted, the Colombian government for a period of five years. As a result, AGAC wouldwill have to defend itself against the lawsuit and will 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 partnersbound by the majority of AngloGold Ashanti’s concession contracts in Colombia.
DUBAI
AngloGold Ashanti 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 2012.
Paymentfindings of the loan plus interest was not made at maturity which gave rise to an event of default under the loan agreement. AngloGold Ashanti sent notices of demand to TI and other related parties. In February 2013, at the request of AngloGold Ashanti, a Dubai court issued an order granting the attachment of a bank account of TI in favour of AngloGold Ashanti. No funds could be recovered from the bank 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.Court.
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 which TI paid the loan amount plus interest back to AGA. AGA subsequently released all security that it held against repayment of the loan and the parties withdrew all cases in the Dubai courts relation to this matter.
GHANA
Westchester Resources Limited (Westchester) / Africore Ghana Limited (Africore) vs. AngloGold Ashanti (Ghana) Limited (AGAG): This matter arises from two identical exploration agreements concluded between each of Westchester Resources Limited (“Westchester”) and Africore Ghana Limited (“Africore”) (together referred to as “the Plaintiffs”) and AngloGold Ashanti (Ghana) Limited (“AGAG”) on 31 October 2000. In each agreement, the “plaintiffs”)Plaintiffs, the holders of a prospecting license from the Minerals Commission, granted to AGAG the right to explore the concession for a year. The Plaintiffs commenced separate actions in the High Court of Ghana claiming that AGAG breached the exploration agreement they respectively entered into with AGAG on 31 October 2000.agreements. The cases were consolidated.
consolidated and heard as such. On 31 March 2011, the High Court, gaveAccra, issued a judgement in favour of the plaintiffsPlaintiffs and awarded total$17,400,000 damages of $17.4 million to Westchester and Africore jointlyagainst AGAG for breach of the agreements and total costs of GHc30,000. On 4 April 2011,agreements. AGAG filed an appealappealed to the Court of Appeal and subsequently applied to the trial courtHigh Court for an order for ato stay of execution of the judgement pending the hearing and determination of the appeal.judgement. 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 Appealsubsequently altered the High Court’sCourt decision by ordering AGAG to pay each Plaintiff the sum of $1 million (rather than $3 million) to each plaintiff and deposit an additional $4 million total with the Registrar for investment pending the determination of the appeal. On 20 December 2012, the Court of Appeal affirmed the judgement of the High Court and dismissed AGAG’s appeal. AGAG subsequently filed an appeal towith the Supreme Court. On 11 November 2015, the Supreme Court contestingruled in favour of AGAG, declaring null all the decision ofproceedings that emanated from the High Court and an application for directions. In a ruling on 27 March 2013, the Court upheld the respondents’ objection to the application for directions and orderedordering that AGAG file its notice of appeal before the Court of Appeal and file a subsequent application for stay of execution. Also on 27 March 2013, the plaintiffs by an ex parte motion to seek an order for the release of the $4 million which had been placed with the Registrar, which was granted and the monies subsequently releaseddiscussed above ($6 million) be refunded to AGAG. The Supreme Court also directed the parties without noticeback to AGAG. AGAG applied to have the decision of the high court set aside, which was denied. AGAG simultaneously applied to the Supreme Court for a certiorari to quash the decision of the High Court. On 19 December 2013, the Supreme Court refused the application of AGAG on grounds that the hearing of the substantive appeal was far advanced and any interlocutory orders would delay the process. However the plaintiffs subsequently applied for the rectification of records of proceedings which was granted on 17 January 2014. This had the effect of restarting the Appeal Process. AGAG was therefore served with a new Form 6 and re-filed its statement of case on 3 March 2014. The Plaintiffs were to file their reply by 24 March 2014. AGA has filed a search to confirm if the reply has been filed, failing which AGA will apply for judgement in default of a reply.
National Labour Commission (NLC) v. AngloGold Ashanti (Ghana) Limited (in re early retirees): In March 2008, petitioners alleged to the NLC that AGAG had misrepresented to them that they could opt for an early retirement and receive enhanced benefits by way of their unpaid salaries and social security contributions. They claimed that, but for AGAG’s misrepresentation, they would have elected to exit by way of redundancy. They demanded that AGAG pay them the difference between what would have been their redundancy packages and the actual payments made to them under the retirement package. The total amount of the claim is the Ghanaian currency equivalent of $1.8 million.
On 3 April 2009, the NLC ordered AGAG to pay each petitioner the difference between the redundancy package and the early retirement benefit. The High Court upheld the order, but the Court of Appeal reversed the order on 14 March 2011, and allowed AGAG’s application for a stay of execution pending appeal. The records of appeal were settled and on 26 November 2012, AGAG filed its written submissions. The Court has fixed 30 May 2013, to deliver its judgement. On 30 May 2013, the Court of Appeal upheld the Appeal of AGAG and overturned the judgement of the High Court as well asfor directions to submit the decision of the NLC.
Abdul Waliyu and 152 others vs. AngloGold Ashanti (Ghana) Limited (AGAG):matter to arbitration. AGAG is involved in litigation relatingthe process of executing the Court’s judgement to recover the monies.
Pompora Treatment Plant (PTP), which was decommissioned in 2000, near the Obuasi mine. Litigation: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’Pompora Treatment Plant (PTP), which was decommissioned in 2000. The plaintiffs’ alleged injuries include respiratory infections, skin diseases and certain cancers.
The writ asks the courtplaintiffs subsequently did not timely file their application for directions but AGAG intends to award general damages, special damages for medical treatment and punitive damages, as well as several orders relatingallow some time to operation of the PTP. AGAG entered notices of appearance and filed a motionpass prior to applying to have the writ set asidematter dismissed for non-disclosurewant 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, fiveprosecution. On 24 February 2014, executive members of the PTP (AGA)(AGAG) Smoke Effect Association (PASEA) (Frank Adjei Danso and five others), sued AGAG on 24 February 2014by themselves and 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 on grounds similar to the now decommissioned Pompora Treatment Plant (PTP). The plaintiffs claim damages resulting from dermatological and respiratory problemsthose discussed above, as well as economic hardships resulting from the failure of their crops. This matter is set for hearing 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.July 2016.
Mining and Building Contractors Limited
Limited:On 11 October 2011, AngloGold Ashanti (Ghana) Limited (“AGAG”)AGAG terminated Mining and Building Contractors Limited’s (“MBC”) underground development agreement, construction on bulkheads agreement and diamond drilling agreement at Obuasi. The partiesParties reached agreement on the terms of the separation and concluded a separation agreement on 8 November 2012.
On 23 July 2013,20 February 2014, AGAG was served with a writ issued by MBC claiming a total of $97.4$97 million. AGA entered an appearanceIn December 2015, the proceedings were stayed in the High Court pending arbitration. In February 2016, MBC submitted the matter 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.arbitration.
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$28 million as of 31 December 2013 in respect of the 2006-2008 and 2009-2011 tax years, following an audit by the tax authorities related to indirectwithholding taxes on various items.payments to non-resident persons. AGAG believes that the indirectwithholding taxes were not properly assessed and has lodged an objection to the assessment. In 2012, 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. Nonetheless, in 2015 the tax authorities again raised the issue of paying withholding taxes as part of their findings covering the 2012 – 2014 tax years.
GUINEA
Government of Guinea (National Claim Commission) v. Société AngloGold Ashanti Goldfields de Guinée SA (SAG): A national claim recovery commission established by the government has demanded that SAG pay $43 million in dividends and penalties that would allegedly have been owed to the government for the accounting years 2004 – 2007. SAG opposes the claim. The two parties had originally decided to submit their dispute to an independent audit firm to be appointed by a common accord; however, the independent audit firm was never appointed. In December 2010, the national claim recovery commission was disbanded and the matter was turned over to the Inspector General of the Ministry of Finance. This matter has been dormant since it was handed over to the Inspector General.
NORTH AMERICA
Designated Matters under the Stock Purchase Agreement between AngloGold Ashanti and Newmont: On 3 August 2015, AngloGold Ashanti and Newmont Mining (“Newmont”) concluded the sale of the Cripple Creek & Victor Gold Mine (“CC&V”) in Colorado to Newmont. As part of the negotiated transaction, the parties agreed to a cost/recovery sharing arrangement relative to cost claims asserted for or against CC&V based on work performed by contractors during the design and manufacture of the High Grade Mill. Under the agreement, AGA has the right to manage any negotiation, settlement, or legal proceedings associated with each cost claim. The maximum total value of the cost claims asserted against CC&V, by two contractors, is $20 million. Similarly, CC&V has cost claims against the mill design contractor. On 25 September 2015, AGA filed on behalf of CC&V a demand for arbitration against all contractors. Negotiations with all parties continue and the arbitration processes are ongoing.
TANZANIA
Jackson Manyelo & others vs. Geita Gold Mining Limited (GGM): In January 2007, the plaintiffs filed a suit against GGM in the Mwanza High Court alleging that they were affected by blasting activities in the Katoma area carried out by GGM and had suffered damages in the amount of Tshs9.6 billion (approximately $6 million). The parties then attemptedOn 30 April 2015, the High Court issued a judgement in favour of GGM. Plaintiffs have appealed to solvethe Court of Appeal, where 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): A national claim recovery commission established by the government has demanded that SAG pay $43 million in dividends and penalties that would allegedly have been owed to the government for the accounting years 2004 – 2007. SAG opposes the claim. The two parties had originally decided to submit their dispute to an independent audit firm to be appointed by a common accord; however, the independent audit firm was never appointed. In December 2010, the national claim recovery commission was disbanded and the matter was turned over to the Inspector General of the Ministry of Finance.pending.
Dividends are proposed by and approved by the board of directors of AngloGold Ashanti, based on the company’s financial performance. Dividends are recognised when declared by the board of directors of AngloGold Ashanti. During the third quarter of 2011, the Companycompany changed itsthe timing of dividend paymentsdividends to quarterly rather than half-yearly.half-yearly payments. However, in 2014, the company will revertCompany reverted to a half-yearly dividend timetables.timetable.
Dividends may be declared in any currency at the discretion of the AngloGold Ashanti board or AngloGold Ashanti shareholders at a general meeting. Currently, dividends are declared in South African rands and paid in Australian dollars, South African rands British pounds and Ghanaian cedis. Dividends paid to registered holders of AngloGold Ashanti ADSs are paid in US dollars converted from South African rands by The Bank of New York Mellon, as depositary, in accordance with the deposit agreement. Exchange rate fluctuations may therefore affect the value of the dividends received by registered shareholders and distributions paid by the relevant depositary to investors holding AngloGold Ashanti securities. Moreover, fluctuations in the exchange rates of the US dollar may affect the US dollar price of the ADSs on the NYSE. For details on taxation and exchange controls applicable to holders of ordinary shares or ADSs, see “Item 10D.:10D: Exchange controls”Controls”, “Item 10E: Taxation–South African Taxation—Taxation of dividends” and “Item 10E.: Taxation – 10E: Taxation–United States Taxation—Taxation of dividends”.
Dividends declared (in the ordinary course from trading and non-trading profits) 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. Dividends in specie or special dividends may require SARB approval prior to declaration and payment to foreign shareholders.
In general, AngloGold Ashanti has not declared dividends since the first quarter of 2013. While it expects to continue to payresume paying dividends, although there can be no assurance that dividends will be paid in the future or as to the particular amounts that will be paid from year to year. The payment of future dividends will be dependentdepend upon the board’s ongoing assessment of AngloGold Ashanti’s earnings, after providing for long-term growth, cash/debt resources, compliance with the solvency and liquidity requirements of the Companies Act, 2008, the amount of reserves available for a dividend, based on the going-concern assessment, any restrictions placed on AngloGold Ashanti by the conditions of debt facilities, the protection of investment gradeexisting credit rating and other factors.
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.
Dividends are payable to shareholders registered at a record date that is after the date of declaration. Dematerialised shareholders on the South African share register will receive payment of their dividends electronically, as provided for by STRATE. Certificated shareholders, who have elected to receive their dividends electronically, will be paid via the company’s electronic funds transmission service. Certificated shareholders who have not yet elected to receive dividend payments electronically are encouraged to mandate this method of payment for all future dividends.
Withholding tax
South Africa currently imposes a Dividend 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 5five percent of the gross amount of the dividends if a corporate US holder (it must be a corporate) holds directly at least 10 percent of the voting 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 are attributable to such permanent establishment or fixed base. Moreover, if the dividends tax rate is reduced under the auspices of an applicable double tax treaty, there are certain South African compliance requirements that must be met in order to access the double tax treaty relief.
8B. | SIGNIFICANT CHANGES |
None.Refer “Item 18: Note 38—Subsequent Events”.
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) | JSE | NYSE(1) | |||||||||||||
Year ended 31 December | High | Low | High | Low | High | Low | High | Low | ||||||||
(South African cents per ordinary share) | (US dollars per ADS) | (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 | 39,182 | 27,333 | 51.69 | 38.97 | ||||||||
2012 | 36,500 | 25,199 | 47.17 | 29.51 | 36,500 | 25,199 | 47.17 | 29.51 | ||||||||
2013 | 26,500 | 11,401 | 31.88 | 11.14 | 27,048 | 11,401 | 31.88 | 11.14 | ||||||||
2014 | 20,952 | 8,836 | 19.53 | 7.45 | ||||||||||||
2015 | 14,999 | 7,159 | 13.12 | 5.64 | ||||||||||||
2012 | ||||||||||||||||
2014 | ||||||||||||||||
First quarter | 36,500 | 28,001 | 47.17 | 36.06 | 20,952 | 12,187 | 19.53 | 11.36 | ||||||||
Second quarter | 31,979 | 25,250 | 38.31 | 30.70 | 19,599 | 15,779 | 18.79 | 15.32 | ||||||||
Third quarter | 30,530 | 25,199 | 36.93 | 30.56 | 20,005 | 13,360 | 18.69 | 11.95 | ||||||||
Fourth quarter | 30,495 | 25,500 | 35.89 | 29.51 | 13,659 | 8,836 | 12.22 | 7.45 | ||||||||
2013 | ||||||||||||||||
2015 | ||||||||||||||||
First quarter | 27,048 | 21,031 | 31.88 | 23.08 | 14,999 | 9,838 | 13.12 | 8.41 | ||||||||
Second quarter | 21,796 | 13,075 | 23.55 | 13.08 | 14,253 | 10,609 | 11.80 | 8.43 | ||||||||
Third quarter | 15,478 | 11,401 | 15.23 | 11.62 | 11,754 | 7,159 | 8.97 | 5.64 | ||||||||
Fourth quarter | 16,524 | 11,545 | 16.49 | 11.14 | 13,472 | 8,647 | 9.95 | 6.20 | ||||||||
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 | ||||||||||||
September 2015 | 11,704 | 9,303 | 8.60 | 6.83 | ||||||||||||
October 2015 | 13,472 | 10,776 | 9.95 | 7.94 | ||||||||||||
November 2015 | 12,020 | 8,647 | 8.68 | 6.24 | ||||||||||||
December 2015 | 11,572 | 8,830 | 7.54 | 6.20 | ||||||||||||
January 2016 | 14,861 | 10,700 | 9.00 | 7.09 | ||||||||||||
February 2016 | 20,426 | 13,550 | 13.03 | 8.37 | ||||||||||||
March 2016(2) | 22,360 | 18,851 | 14.31 | 12.13 |
(1) | Each ADS represents one ordinary share. |
(2) | Through |
See “Item 7A.:7A: Major shareholders”Shareholders” for the number of ADSs outstanding at 31 December 2013.2015.
9B. |
Not applicable.
9C. |
NATURE OF TRADING MARKET
The principal trading markets for AngloGold Ashanti’s ordinary shares are the New York Stock Exchange, in the form of ADSs, under the symbol “AU” and the JSE Limited, in the form of ordinary shares, under the symbol “ANG”.
AngloGold Ashanti’s ordinary shares are also listed on the London Stock Exchange under the symbol “AGD” and the Ghana Stock Exchange under the symbol “AGA”. Its ordinary shares are also listed on, the Australian Securities 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”.
9D. |
Not applicable.
9E. |
Not applicable.
9F. |
Not applicable.
ITEM 10:ADDITIONAL INFORMATION
For a discussion of options on AngloGold Ashanti’s ordinary shares available to executive officers from time to time, see “Item 6E: Share Ownership–Share Ownership of Executive Officers/Executive Management”.
10A. |
Authorised and Issued Shares
At the annual general meeting of shareholders held on 15 May 2009, shareholders approved an increase in the company’s authorised ordinary share capital. AngloGold Ashanti’s authorised and issued share capital as of 31 December 20132015 and 2 April 201418 March 2016 (being the latest practicable date prior to the publication of this document) is set out below:
Title of Class | Authorised | Issued | Authorised | Issued | ||||||||||||||||||||
2 April 2014 | 31 December 2013 | 18 March 2016 | 31 December 2015 | |||||||||||||||||||||
Ordinary shares at par value of R0.25 each | 600,000,000 | 403,142,417 | 402,628,406 | 600,000,000 | 407,149,370 | 405,265,315 | ||||||||||||||||||
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 | 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 | 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 20102012 through 31 December 2013.2015.
Period to | Description | Number of Shares | ||||
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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 | |||||
Ordinary shares issued during 2014 | AngloGold Share Incentive Scheme | 304,032 | ||||
Employee Share ownership programme – on conversion of E ordinary shares | 1,077,922 | |||||
31 December 2014 | 404,010,360 | |||||
Ordinary shares issued during 2015 | AngloGold Share Incentive Scheme | 1,254,955 | ||||
31 December 2015 | 405,265,315 |
Shares held by AngloGold Ashanti or by its Subsidiaries
See “Item 18: Note 26 – Share capital and premium” for more information.
A and B Redeemable Preferencepreference shares
All of the A redeemable preference shares and B redeemable preference shares are held by Eastvaal Gold Holdings Limited, one of AngloGold Ashanti’s wholly-owned subsidiary. AngloGold Ashanti’s Memorandum of Incorporation 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, the BEE transaction). The E ordinary shares willwere not be listed.
At a general meeting held on 11 May 2011, shareholders approved an amendment toAll 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 ESOPhave vested 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 amended cancellation formula.
formula during the 2014 financial year. As at 31 December 2014 there were no E ordinary share capital amountingshares in issue. A Special Resolution to R51,842,313 in respect of 688,332 vested, unconverted and cancelledcancel the E ordinary shares was transferred to ordinary share premium during 2011. Prior toapproved by the amendment ofshareholders at 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 payableAnnual General Meeting 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.6 May 2015.
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 the company.
The table below details changes in the E-ordinary issued share capital of AngloGold Ashanti since 31 December 2010 through 31 December 2013.
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Unissued shares
In terms of a general authority from shareholders in annual general meeting, granted on 136 May 2013,2015, the directors of the Company are authorised to allot and issue, for such purposes and on such terms as they may, in their discretion, determine, ordinary shares of 25 SA cents each (shares) in the authorised but unissued share capital of the Company up to a maximum of 5 percent of the number of shares in issue from time to time.at the date of the ordinary resolution dated 6 May 2015. The directors annually seek renewal of such authority at the annual general meeting, and the next renewal will be requested at the annual general meeting to be held on 144 May 2014.2016.
Authorised but unissued ordinary Shares under the control of the directors – amounting to 5 percent of | ||||
Authorised but unissued ordinary shares attributable to the share incentive scheme (balance of – |
10B. | MEMORANDUM OF INCORPORATION |
On 1 May 2011, the South African Companies Act 71 of 2008 (as amended) (the Companies Act) came into effect. In terms of the Companies Act, companies were granted a two year period to amend their constitutional documents (previously referred to as the Memorandum and Articles of Association, but known under the Companies Act as a Memorandum of Incorporation (MoI)), in order to harmonise such constitutional documents with the Companies Act or adopt a new MoI. At a general meeting held on 27 March 2013, shareholders voted to adopt a new MoI for AngloGold Ashanti. The MoI was subsequently amended by special resolutions of shareholders passed at the annual general meetings held on 14 May 2014 and 6 May 2015. The 2015 amendment cancelled and removed the E ordinary shares from AngloGold Ashanti’s authorised share capital following completion of the underlying BEE transaction. See “Item 10A: Share Capital—E ordinary shares”.
At the annual general meeting to be held on 4 May 2016, AngloGold Ashanti will be seeking approval from the shareholders to create a new class of preference shares in the share capital of the company, to be known as ‘C preference shares’. The terms of the C preference shares would generally be the same as those of the existing B preference shares. However, the C preference shares would rank after the B preference shares for purposes of dividends and payments upon redemption. The summary below does not reflect the impact of the proposed changes.
REGISTRATION
AngloGold Ashanti is incorporated under the laws of the Republic of South Africa and registered with the Companies and Intellectual Property Commission under registration number 1944/017354/06. The Companies Act has abolished the requirement 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’s MoI is available for inspection as set out in “Item 10H.: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 pertaining to the rights of holders of AngloGold Ashanti’s ordinary shares and is qualified in its entirety by reference to the laws of South Africa and AngloGold Ashanti’s governing corporate documents. As well as being governed by the provisions of the MoI, the rights of holders of AngloGold Ashanti’s ordinary shares are governed by the JSE Listings Requirements, the Companies Act and the Companies Regulations, 2011, promulgated under the Companies Act (Regulations), which include the 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 Rights, Preferences and Restrictions – “Item 10C: Material Contracts–The Deposit Agreement”.
The Companies Act provides that shares will no longer have a par or nominal value and hence no new shares having a nominal or par value may be authorised. However any shares which have a nominal or par value authorised prior to the effective date of the Companies Act continue to have that nominal or par value and can be issued as such for so long as there are par value shares in the company’s authorised share capital.
DIRECTORS
The management and control of any business of AngloGold Ashanti is vested in the board of directors (board). The authority of the board to manage and direct the business and affairs of the company is not limited, restricted or qualified by the MoI.
Appointment and Retirement 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 who satisfies the requirements for election as a director to fill any vacancy and serve as a director on a temporary basis until the vacancy 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.
At every annual general meeting one-third of the 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. The directors so to retire at every annual general meeting will be those who have been the longest in office since their last election. Directors retiring by rotation are eligible for re-election. Directors who voluntarily decide not to make themselves available for re-election may be counted towards the one-third of directors required to retire at the relevant annual general meeting.
The MoI contains no provision for directors to hold qualification shares. The MoI does not impose an age limit for the retirement of directors.
Remuneration
In accordance with the Companies Act, the MoI provides that the directors are entitled to such remuneration for their services as directors as AngloGold Ashanti’s shareholders may approve by special resolution in a general meeting or annual general meeting within the previous two years of the date of payment of such remuneration. If a director is employed in any other capacity, or holds an executive office or performs services that, in the opinion of the board, are outside the scope of the ordinary duties of a director, he may be paid such extraadditional remuneration as a disinterested quorum of directors may reasonably determine.
Interests of Directors and Restriction on Voting
Although the interests of directors are not dealt with in the MoI, the provisions of the Companies Act in this regard are unalterable and will automatically apply, together with the applicable common law. Under the Companies Act, the procedures to deal with the personal financial interests of directors also apply to prescribed officers (i.e. persons who exercise general executive control over and management of the whole, or a significant portion, of the business and activities of the company or regularly participate to a material degree in the exercise of general executive control over and management of the whole, or a significant portion, of the business and activities of the company, irrespective of the office held or function performed by such persons) and any person who is a member of a committee of the board of the company, whether or not that person is also a member of the company’s board. The Companies Act provides that a director or such other person with a personal financial interest must disclose this to the board and cannot vote on or, after having made the disclosures to the meeting as prescribed by the Companies Act, remain present during the meeting when the matter in which he has interest is being discussed but will be counted as present for the purposes of a quorum.
Share Rights, Preferences and Restrictions
Allotment and Issue of Ordinary Shares
Subject to the JSE Listings Requirements, the Companies Act and/or with approval of shareholders in general meeting, unissued ordinary shares must be offered to existing ordinary shareholders, pro rata to their shareholdings, unless they are issued for the acquisition of assets. The shareholders in general meeting may authorise the AngloGold Ashanti board to issue 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 at a general meeting or annual general meeting.shares.
Dividends, Rights and Distributions
The ordinary shares participate fully in all dividends, other distributions and entitlements as and when declared by AngloGold Ashanti in respect of fully paid ordinary shares. Under South African law, AngloGold Ashanti may declare and pay dividends, subject to the company satisfying the solvency and liquidity test as provided by the Companies 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 after the date of declaration of the dividend.
Although not stated in the MoI, dividends may be declared in any currency at the discretion of the board. Currently,In the past, dividends arehave been declared in and paid in South African rands, and also paid in Australian dollars, Ghanaian cedis or United Kingdom pounds. Registered holders of AngloGold Ashanti ADSs are paid dividends in US dollars by The Bank of New York Mellon as depositary, in accordance with the Deposit Agreement. See “The“Item 10C: Material Contracts – The Deposit Agreement”.
Holders of E ordinary shares are entitled to receive a dividend equal to 50 percent of the dividend per ordinary share and the residual 50 percent of the dividend 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.
Although not stated in the MoI, but subject to the JSE Listings Requirements, any dividend may be paid and satisfied, either wholly or in part, by the distribution of specific assets, or in paid-up securities of AngloGold Ashanti or of any other company, or in cash, or in any one or more of such ways as the directors may at the time of declaring the dividend determine and direct.
All dividends remaining unclaimed for a period of not less than three years from the date on which they became payable, may, 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 instructing Chess Depository Nominees and NTHC Limited as depositary, respectively, how to vote their shares.
There are no limitations on the right of non-South African registered shareholders to hold or exercise voting rights attaching to any of the ordinary shares.
Holders of E ordinary shares have the right to vote at all general meetings and are entitled to appoint a proxy to attend, speak and vote at any meeting on their behalf and the proxy need not be a shareholder. 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 holders of E ordinary shares will not be counted for categorisation 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 Listings Requirements.
The A redeemable preference shares have similar voting rights to those of ordinary shares. The B redeemable preference shares have limited voting rights exceptonly in the event that a dividend on this class of share has not been paid and remains unpaid for six months or more, or in connection with resolutions directly affecting these preference shares or in limited circumstances affecting 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 AngloGold Ashanti at which the holders of the ordinary shares, A redeemable preference shares, and B redeemable preference shares are present and entitled to vote on a poll, each holder of the A redeemable preference shares shall be entitled to 50 votes for every A redeemable preference share held, each holder of the ordinary shares is entitled to 50 votes for every ordinary share held and each holder of the B redeemable preference shares is entitled to one vote for every B redeemable preference share held.
The MoI specifies that the rights relating to any class of shares may be modified or abrogated with the sanction of a resolution passed as if it were a special resolution of the holders of shares in that class at a separate general meeting. The MoI also specifies that the holders of the A and B preference shares may provide written consents to the modification of their rights.
Increase and Reduction of Capital
The company is authorised to issue the shares specified in the MoI and all such shares are required to be issued as fully paid up in accordance with the applicable approval and/or other requirements of the JSE Listings Requirements.
The directors are authorised, subject to any requirements of the JSE Listings Requirements and the MoI, to increase or decrease the number of authorised shares of any class of shares, reclassify any shares that have been authorised but not issued, classify any unclassified shares that have been authorised but not issued, and determine the preferences, rights, limitations or other terms of any class of authorised shares or amend any preferences, rights, limitations or other terms as determined. TheHowever, such capital amendments require an amendment to the MoI and the JSE howeverListings Requirements currently does not allow the MoI to be amended to give effect to such capital amendments without the approval of ordinary shareholders by special resolution.
Rights Upon Liquidation
In the event of the winding up of AngloGold Ashanti:
the B redeemable preference shares confer the right, in priority to any payment in respect of the ordinary shares or the A preference shares in the capital of AngloGold Ashanti, to receive only so much of the net proceeds from the disposal of the assets relating to the Moab Lease Area as is available for distribution, but not exceeding a return for each B redeemable preference share of the capital paid up on that share and any share premium paid on the issue of the B redeemable preference shares outstanding at that time;
the A redeemable preference shares confer the right, in priority to any payment in respect of the ordinary shares but after any payment in respect of the B preference shares, to receive only so much of the net proceeds from the disposal of the assets relating to the Moab Lease Area as is then available for distribution;
the A redeemable preference and B redeemable preference shares do not confer the right to participation in the surplus funds of AngloGold Ashanti arising in any other manner; and
the ordinary shares and E ordinary shares confer the equal rightsright to participate equally in 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.
Shareholders’ meetings
The directors may convene meetings of AngloGold Ashanti shareholders. Subject to the provisions of the Companies Act, the shareholders may requisition for the convening of a meeting.
Notice of each AngloGold Ashanti annual general meeting and general meeting of AngloGold Ashanti shareholders must be delivered at least 15 business days before that shareholders’ meeting is to begin. In accordance with the Companies Act, business days are calculated by excluding the first day, including the last day and excluding Saturdays, Sundays and any public holiday in the Republic of South Africa. In terms of the MoI, all shareholders are entitled to attend shareholders’ meetings.
In the case of a class meeting of the A or B preference shares, the sole holder of such shares shall constitute a quorum. Save as aforesaid, the quorum of a shareholders’ meeting to begin is sufficient persons present, in person or by proxy, at the meeting to exercise, in aggregate, at least 25 percent of all of the voting rights that are entitled to be exercised in respect of at least one matter to be decided at the meeting and a quorum must remain present for the continuation of that shareholders meeting, provided that at least three shareholders must be present at the meeting. Such quorum requirement also applies for the consideration of any matter to be decided at the meeting. If the meeting is not quorate within 30 minutes after the appointed time for the meeting to begin (or such longer or shorter period as the chairperson may determine), it will be postponed, without motion, vote or further notice, for 1 week and the shareholders present, in person or by proxy, at the postponed meeting will constitute a quorum. For an ordinary resolution to be approved by shareholders, it must be supported by more than 50 percent of the voting rights exercised on the resolution. For a special resolution to be approved by shareholders, it must be supported by at least 75 percent of the voting rights exercised on the resolution.
Disclosure of Interest in Shares
Under South African law, a person 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 five percent, 10 percent, 15 percent or any further whole multiple of five 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 five 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 securities unless the notice concerned a disposition of less than one percent of the class of securities.
If the securities of AngloGold Ashanti are registered in the name of a person who is not the holder of the beneficial interest in all of the securities in AngloGold Ashanti held by that person, that registered holder of the securities must disclose the identity of the person on whose behalf that security is held and the identity 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 by one person for the beneficial interest of another may by notice in writing require either of those persons to confirm 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 interests equal to or in excess of five 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 or director may, under certain circumstances, seek relief from the court if he has been unfairly prejudiced by any act or omission of the company or a related person, by the conduct of the business of the company or a related person in a particular manner, the exercise of the powers of the directors of the company or a related person in a particular manner. There may also be personal and derivative actions available to a shareholder of a company.
Pursuant to the Companies Act, a shareholder may petition a South African court for relief from the actions or omissions or, business conduct of the company or the actions of the company’s directors or officers that is oppressive or unfairly prejudicial to, or unfairly disregards the interest of the shareholder. In addition, a shareholder who voted against a resolution to amend the company’s MoI, or to approve a fundamental transaction, (and complied with other requirements set out in the Companies Act) may exercise its appraisal right to demand that the company pay to it the fair value for all the shares of the company held by that shareholder.
Description of ADSs
The Bank of New York Mellon issues AngloGold Ashanti’s American Depositary Shares, or ADSs. Please see “Item 10C: Material Contracts”.
10C. | MATERIAL CONTRACTS |
Revolving Credit Facilities
General
On 17 July 2014, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Incorporated, as borrowers, entered into a credit agreement (the US$ Revolving Credit Agreement) with The Bank of Nova Scotia, as facility agent, and certain financial institutions party thereto as lenders. The US$ Revolving Credit Agreement provides for a $1.0 billion revolving credit facility (the US$ Revolving Credit Facility) available for drawing in US dollars. As of 18 March 2016, we have drawn $50 million under the US$ Revolving Credit Facility.
On 25 July 2014, AngloGold Ashanti Australia Limited entered into a credit agreement (the A$ Revolving Credit Agreement), as borrower with Commonwealth Bank of Australia, as facility agent, and certain financial institutions party thereto as lenders. The A$ Revolving Credit Agreement provides for a A$0.5 billion revolving credit facility (the A$ Revolving Credit Facility) available for drawing in Australian dollars. As of 18 March 2016, we have drawn A$105 million under the A$ Revolving Credit Facility.
On 3 December 2013, AngloGold Ashanti Limited entered into a credit agreement (the ZAR Revolving Credit Agreement), as borrower with Nedbank Limited as facility agent who in conjunction with ABSA Bank Limited constitute the lenders. This ZAR Revolving Credit Agreement was subsequently amended on 9 September 2014 to align it with both the US$ and A$ Revolving Credit Agreements. The ZAR Revolving Credit Agreement provides for a ZAR 1.5 billion revolving credit facility (the ZAR Revolving Credit Facility) available for drawing in South African Rands. As of 18 March 2016, we have drawn ZAR792 million under the ZAR Revolving Credit Facility.
On 7 July 2015, AngloGold Ashanti Limited entered into a credit agreement (the ZAR Revolving Credit Agreement II), as borrower with Nedbank Limited as facility agent, who in conjunction with ABSA Bank Limited constitute the lenders. This ZAR Revolving Credit Agreement II is aligned with the other ZAR, US$ and A$ Revolving Credit Agreements. The ZAR Revolving Credit Agreement II provides for ZAR 1.4 billion revolving credit facility (ZAR Revolving Credit Facility II) available for drawing in South African Rands. As of 18 March 2016, we have zero drawn under ZAR Revolving Credit Facility II.
Guarantees
The US$ 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 US$ 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.
The A$ Revolving Credit Facility is guaranteed by AngloGold Ashanti Limited and AngloGold Ashanti Holdings plc. The guarantees constitute unconditional obligations of the guarantors and rank at least pari passu with all other future unsecured obligations of the guarantors, except for obligations mandatorily preferred by law.
Security
The obligations under all the Revolving Credit Agreements are unsecured.
Amount and repayment of borrowings
Loans under the US$ Revolving Credit Facility must be for a minimum of $10 million (or for the balance of the undrawn total commitments at the time of the drawing), and no more than 1 loan may be outstanding at any time. Each loan must be repaid on the last day of the loan’s interest period, which can be a period of one, two, three or six months or any other period agreed by AngloGold Ashanti Holdings plc, in its capacity as obligors’ agent, and the lenders. All loans must be repaid in full on the final maturity date. The final maturity date is17 July 2019.
Loans under the A$ Revolving Credit Facility must be for a minimum of A$10 million (or for the balance of the undrawn total commitments at the time of the drawing), and no more than 10 loans may be outstanding at any time. Each loan must be repaid on the last day of the loan’s interest period, which can be a period of one, two, three or six months or any other period agreed by AngloGold Ashanti Australia Limited. All loans must be repaid in full on the final maturity date. The final maturity date is 25 July 2019
Loans under the ZAR Revolving Credit Facility must be for a minimum of ZAR 100 million (or for the balance of the undrawn total commitments at the time of the drawing), and no more than 14 loans may be outstanding at any time. Each loan must be repaid on the last day of the loan’s interest period, which can be a period of one, two, three or six months or any other period agreed by AngloGold Ashanti Limited. All loans must be repaid in full on the final maturity date. The final maturity date is 3 December 2018.
Interest rates and fees
The annual interest rate on loans drawn under the US$ Revolving Credit Facility is calculated based on LIBOR, plus a margin that varies between 0.95 percent and 2.20 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 annual interest rate on loans drawn under the A$ Revolving Credit Facility is calculated based on BBSY, plus a margin that varies between 1.50 percent and 2.50 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 annual interest rate on loans drawn under the ZAR Revolving Credit Facility is calculated based on JIBAR, plus a margin of 1.20 percent per annum 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 under the US$ Revolving Credit Facility 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 0.15 percent per annum (if the aggregate outstanding loans are less than one third of the total commitments then in effect), 0.30 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 0.45 percent per annum (if the aggregate outstanding loans are equal to or greater than two thirds of the total commitments then in effect).
The borrower under the A$ Revolving Credit Facility is required to pay a commitment fee equal to 50 percent of the then applicable margin per annum on the undrawn and uncancelled amount of each lender’s commitment during the commitment period.
The borrower under the ZAR Revolving Credit Facility is required to pay a commitment fee equal to 0.45 percent of 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 applicable to all Revolving Credit Facilities (RCF)
The Revolving Credit Agreements include 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 Agreements) does not at any time exceed 3.50 to 1.00, with the proviso that this ratio may exceed 3.50 to 1.00 once during the life of the Revolving Credit Agreement, for one six month period subject to certain criteria. Refer Item 18: note 37 “Capital Management” for the formulae used in terms of the RCF’s to test compliance with the covenants.
Change of control
If a lender so requires, the commitment of such lender under a 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 applicable to all Revolving Credit Agreements
The Revolving Credit Agreements contain negative pledge 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 Agreements also contain, 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 applicable to all Revolving Credit Agreements
The Revolving Credit Agreements contain 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 any 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 Agreements, 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 Agreements and the other loan documents.
The above description is only a summary of certain provisions of the Revolving Credit Agreements and is qualified in its entirety by reference to the provisions of the Revolving Credit Agreements, a copy of each is attached hereto as Exhibit 19.4.4 and is incorporated herein by reference.
Notes
2013 Notes
On 30 July, 2013, AngloGold Ashanti Holdings plc (“AGAH”), issued $1,250 million 8.500% Notes due 2020 (the “2013 Notes”). The interest on the 2013 Notes is payable semi-annually on 15 January and 15 January of each year, commencing on 15 January, 2014. AGAH may on any one or more occasions redeem all or part of the 2013 Notes at a redemption price based on a “make-whole” premium. At any time and from time to time on or after 30 July 30, 2016, AGAH may redeem the 2013 Notes, in whole or in part, at redemption prices varying based on the period during which the redemption occurs. In addition, at any time and from time to time prior to 30 July, 2016, AGAH may redeem up to 35% of the original principal amount of the 2013 Notes with the net proceeds from certain equity offerings by AngloGold Ashanti Limited, at a price of 108.500% of the aggregate principal amount thereof, plus accrued and unpaid interest. AGAH has agreed to pay certain additional amounts in respect of any withholdings or deductions for certain types of taxes in certain jurisdictions on payments to holders of the 2013 Notes. The 2013 Notes are unsecured and unsubordinated and are fully and unconditionally guaranteed by AngloGold Ashanti Limited.
AGAH has agreed to observe certain covenants with respect to the 2013 Notes restricting, subject to certain limitations, the ability of AngloGold Ashanti Limited and AGAH to amalgamate, reconstruct, consolidate or merge with another company or other legal entity and the ability of AngloGold Ashanti Limited and its restricted subsidiaries to pledge certain of their respective material assets to secure certain borrowings, create or incur liens on certain of their material property, engage in sale and leaseback transactions and incur indebtedness. In case of a change of control of the guarantor and a rating downgrade, within a specified period, of the 2013 Notes by two rating agencies, holders of the 2013 Notes have the right to require the issuer to repurchase all or any part of their 2013 Notes in cash for a value equal to 101% of the aggregate principal amount of 2013 Notes repurchased, plus accrued and unpaid interest, if any, on the 2013 Notes repurchased to the date of purchase.
The offering of the 2013 Notes was registered under the Securities Act. The 2013 Notes were listed on the New York Stock Exchange.
2012 Notes
On 30 July, 2012, AGAH, issued $750 million 5.125% Notes due 2022 (the “2012 Notes”). The interest on the 2012 Notes is payable semi-annually on 1 February and 1 August of each year, commencing on 1 February, 2013. AGAH may on any one or more occasions redeem all or part of the 2012 Notes, at a redemption price equal to the greater of (1) 100% of the principal amount of the 2012 Notes to be redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the 2012 Notes (excluding any portion of such payments of interest accrued or unpaid as of the date of redemption) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate, plus 50 basis points, plus accrued and unpaid interest, if any, to the date of redemption. AGAH has agreed to pay certain additional amounts in respect of any withholdings or deductions for certain types of taxes in certain jurisdictions on payments to holders of the 2012 Notes. The 2012 Notes are unsecured and unsubordinated and are fully and unconditionally guaranteed by AngloGold Ashanti Limited.
AGAH has agreed to observe certain covenants with respect to the 2012 Notes restricting, subject to certain limitations, the ability of AngloGold Ashanti Limited and AGAH to amalgamate, reconstruct, consolidate or merge with another company or other legal entity, and the ability of AngloGold Ashanti Limited and its restricted subsidiaries to pledge their assets to secure certain borrowings, create or incur liens on certain of their property or to engage in sale and leaseback transactions. In case of a change of control of the guarantor and a downgrade, within a specified period, of the 2012 Notes below an investment grade rating by two rating agencies, holders of the 2012 Notes have the right to require the issuer to repurchase all or any part of their 2012 Notes in cash for a value equal to 101% of the aggregate principal amount of 2012 Notes repurchased, plus accrued and unpaid interest, if any, on the 2012 Notes repurchased to the date of purchase.
The offering of the 2012 Notes was registered under the Securities Act. The 2012 Notes were listed on the New York Stock Exchange.
2010 Notes
On 28 April, 2010, AGAH, issued $700 million 5.375% Notes due 2020 and $300 million 6.500% Notes due 2040 (together, the “2010 Notes”). The interest on the 2010 Notes is payable semi-annually on 15 April and 15 October of each year, commencing on 15 October, 2010. AGAH may on any one or more occasions redeem all or part of the 2010 Notes, at a redemption price equal to the greater of (1) 100% of the principal amount of the 2010 Notes to be redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the 2010 Notes (excluding any portion of such payments of interest accrued or unpaid as of the date of redemption) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate, plus 25 basis points with respect to the 2010 Notes maturing in 2020 and 30 basis points with respect to the 2010 Notes maturing in 2040, plus accrued and unpaid interest, if any, to the date of redemption. AGAH has agreed to pay certain additional amounts in respect of any withholdings or deductions for certain types of taxes in certain jurisdictions on payments to holders of the 2010 Notes. The 2010 Notes are unsecured and unsubordinated and are fully and unconditionally guaranteed by AngloGold Ashanti Limited.
AGAH has agreed to observe certain covenants with respect to the 2010 Notes restricting, subject to certain limitations, the ability of AngloGold Ashanti Limited and AGAH to amalgamate, reconstruct, consolidate or merge with another company or other legal entity, and the ability of AngloGold Ashanti Limited and its restricted subsidiaries to pledge their assets to secure certain borrowings, create or incur liens on certain of their property or to engage in sale and leaseback transactions. In case of a change of control of the guarantor and a downgrade, within a specified period, of a series of 2010 Notes below an investment grade rating by two rating agencies, holders of the 2010 Notes have the right to require the issuer to repurchase all or any part of their 2010 Notes in cash for a value equal to 101% of the aggregate principal amount of 2010 Notes repurchased, plus accrued and unpaid interest, if any, on the 2010 Notes repurchased to the date of purchase.
The offering of the 2010 Notes was registered under the Securities Act. The 2010 Notes were listed on the New York Stock Exchange.
For further information, see “Note 27: Borrowings” to our Annual Financial Statements included in Item 18 of this Annual Report, “Item 5B.: Liquidity and Capital Resources” and “Item 19: Exhibits to Form 20-F”.
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 3 June 2008 with The Bank of New York Mellon as depositary and the owners and beneficial owners of American Depositary Receipts (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 Form 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 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”. 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.
AngloGold Ashanti will not treat ADS holders as its shareholders and ADS holders do not have shareholder rights. South African law governs shareholder rights. The Bank of New York Mellon is the holder of the shares underlying the ADSs. Registered holders of ADSs have ADS holder rights. The Deposit Agreement sets out ADS holder rights as well as the rights and obligations of The Bank of New York Mellon. New York law governs the Deposit Agreement and the ADSs.
Dividends and Other Distributions
The Bank of New York Mellon has agreed to pay to holders of ADSs the cash dividends or other distributions it or a custodian receives on AngloGold Ashanti ordinary shares or other deposited securities after deducting any fees and expenses and any applicable withholding taxes. Holders of ADSs will receive these distributions in proportion to the number of AngloGold Ashanti’s ordinary shares that their ADSs represent.
Cash
The Bank of New York Mellon will convert any cash dividend or other cash distribution (in South African rands) that AngloGold Ashanti pays on ordinary shares into US dollars (unless AngloGold Ashanti pays such dividend or cash distribution in US dollars) and distribute to registered holders of ADSs.… . If that is no longer possible or if any approval from any government is needed and cannot be obtained, The Bank of New York Mellon may distribute non-US currency only to those ADS holders to whom it is possible to make this type of distribution.
The Bank of New York Mellon may hold the non-US currency it cannot convert for the account of holders of ADSs who for one reason or the other have not been paid. It will not invest the non-US currency, and it will not be liable for 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 such 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.
US securities laws may restrict the sale, deposit, cancellation and transfer of the ADSs issued after the exercise of rights. For example, holders of ADSs may not be able to trade the ADSs freely in the United States. In this case, The Bank of New York Mellon may deliver ADSs which are “restricted securities” within the meaning of Rule 144 which will have the same provisions as the ADSs described here, except for the changes needed to put the restrictions in place.
Other Distributions
The Bank of New York Mellon will send to holders of ADSs any other distributions that AngloGold Ashanti makes on deposited securities by any means it thinks is legal, fair and practical. If it cannot make the distribution in that way, The Bank of New York Mellon may decide to sell what AngloGold Ashanti distributes, and then distribute the net proceeds in the same way as it distributes cash, or it may decide to hold what AngloGold Ashanti distributes, in which case the outstanding ADSs will also represent the newly distributed property. However, The Bank of New York Mellon is not required to distribute any securities (other than ADSs) to ADS holders unless it receives satisfactory evidence from AngloGold Ashanti that it is legal to make that distribution. The Bank of New York Mellon may sell a portion of the distributed securities or property sufficient to pay its fees and expenses in connection with that distribution.
The Bank of New York Mellon is not responsible if, based on available information, it decides that it is unlawful or impractical to make a distribution available to any ADS holders. AngloGold Ashanti has no obligation to register ADSs, AngloGold Ashanti ordinary shares, rights or other securities under the US Securities Act of 1933. AngloGold Ashanti also has no obligation to take any other action to permit the distribution of ADSs, AngloGold Ashanti ordinary shares, or any 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. 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, 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 ADS to The Bank of New York Mellon for the purpose of exchanging such ADS for uncertificated ADSs. The Bank of New York Mellon will cancel that ADS 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 ADS 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.
The Bank of New York Mellon will try, as far as practical, to vote or to have its agents vote the ordinary shares or other deposited securities as holders of ADSs instruct, but this is subject to South African law, the provisions of AngloGold Ashanti’s MoI and of the deposited securities and any applicable rule of the JSE. The Bank of New York Mellon will only vote or attempt to vote as such holders of ADSs instruct.
AngloGold Ashanti cannot assure the holders of ADSs that they will receive the voting materials in time for them to instruct The Bank of New York Mellon to vote their ordinary shares. In addition, The Bank of New York Mellon and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that holders of ADSs may not be able to exercise their right to vote and there may be nothing they can do if their ordinary shares are not voted as they requested.