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(Jurisdiction of Incorporation or Organization)
(P.O. Box 62117, Marshalltown, 2107)
South Africa
(Address of Principal Executive Offices)
E-mail: leatwell@anglogoldashanti.com, 76 Jeppe Street, Newtown, Johannesburg, 2001, South Africa
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Title of each class | Name of each exchange on which registered | |
American Depositary Shares | New York Stock Exchange | |
Ordinary Shares | New York Stock Exchange* | |
6.00 Percent Mandatory Convertible Subordinated Bonds due 2013 | New York Stock Exchange |
* | Not for trading, but only in connection with the registration of American Depositary Shares pursuant to the requirements of the Securities and Exchange Commission |
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
Ordinary Shares of 25 ZAR cents each | 381,204,080 | |||
E Ordinary Shares of 25 ZAR cents each | 2,806,126 | |||
A Redeemable Preference Shares of 50 ZAR cents each | 2,000,000 | |||
B Redeemable Preference Shares of 1 ZAR cent each | 778,896 |
(Check one): Large Accelerated Filerþ | Accelerated Filero | Non-Accelerated Filero |
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E pages | ||||||||
List of Subsidiaries | ||||||||
Certification of CEO | ||||||||
Certification of CFO | ||||||||
Certification | ||||||||
E&Y Consent | ||||||||
KPMG Consent | ||||||||
KMPG Consent | ||||||||
BDO Consent | ||||||||
Report on MSHA violations | ||||||||
EX-101 INSTANCE DOCUMENT | ||||||||
EX-101 SCHEMA DOCUMENT | ||||||||
EX-101 CALCULATION LINKBASE DOCUMENT | ||||||||
EX-101 LABELS LINKBASE DOCUMENT | ||||||||
EX-101 PRESENTATION LINKBASE DOCUMENT | ||||||||
EX-101 DEFINITION LINKBASE DOCUMENT |
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$, US$or dollar | United States dollars | |
ARS | Argentinean peso | |
A$or AUD | Australian dollars | |
BRL | Brazilian real | |
€ or Euro | European Euro | |
C$or CAD | Canadian dollars | |
GHC, cedi or ¢ | Ghanaian cedi | |
N$or NAD | Namibian dollars | |
Tsh | Tanzanian Shillings | |
ZAR, R or rand | South African rands |
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ADS | American Depositary Share | |
ADR | American Depositary Receipt | |
AIFR | All injury frequency rate | |
ASX | Australian Securities Exchange | |
Au | Contained gold | |
bn | Billion | |
capex | Capital expenditure | |
CDI | Chess Depositary Interests | |
CLR | Carbon Leader Reef | |
FCFA | Franc Communauté Financiére Africaine | |
FIFR | Fatal injury frequency rate | |
G or g | Grams | |
g/t | Grams per tonne | |
g/TEC | Grams per total employee costed | |
GhDS | Ghanaian Depositary Share | |
GhSE | Ghana Stock Exchange | |
GWh | Gigawatt hours | |
JORC | Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves | |
JIBAR | Johannesburg Interbank Agreed Rate | |
JSE | JSE Limited | |
King Code | South African King Code on Corporate Governance, 2009 (King III) | |
Kg or kg | Kilograms | |
Km or km | Kilometers | |
Lb/t | Pounds per tonne | |
LSE | London Stock Exchange | |
LIBOR | London Interbank Offer Rate | |
LOM | Life of mine | |
m2/TEC | Square meters per total employee costed | |
M or m | Meter or million, depending on the context | |
Moz | Million ounces | |
Mt | Million tonnes or tons | |
Mtpa | Million tonnes/tons per annum | |
NOSA | National Occupational Safety Association | |
NYSE | New York Stock Exchange | |
Oz or oz | Ounces (troy) | |
oz/t | Ounces per ton | |
RIFR | Reportable injury frequency rate per million hours worked | |
SAMREC | South African Code for the Reporting of Mineral Resources and Mineral Reserves 2007 Edition | |
SEC | United States Securities and Exchange Commission | |
SRP | South African Securities Regulation Panel | |
SOX | Sarbanes-Oxley Act of 2002 | |
T or t | Tons (short) or tonnes (metric) | |
Tpm or tpm | Tonnes/tons per month | |
Tpa or tpa | Tonnes/tons per annum | |
Tpd or tpd | Tonnes/tons per day | |
US/USA/United States | United States of America | |
VCR | Ventersdorp Contact Reef | |
VCT | Voluntary counseling and testing |
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Year ended December 31, | ||||||||||||||||||||
2006 | 2007(1) | 2008(2) | 2009 | 2010 | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
(in millions, except share and per share amounts) | ||||||||||||||||||||
Consolidated statement of income | ||||||||||||||||||||
Sales and other income | 2,715 | 3,095 | 3,730 | 3,954 | 5,402 | |||||||||||||||
Product sales(3) | 2,683 | 3,048 | 3,655 | 3,784 | 5,334 | |||||||||||||||
Interest, dividends and other | 32 | 47 | 75 | 170 | 68 | |||||||||||||||
Costs and expenses | 2,811 | 3,806 | 4,103 | 4,852 | 5,021 | |||||||||||||||
Operating costs(4) | 1,785 | 2,167 | 2,452 | 2,543 | 3,112 | |||||||||||||||
Royalties | 59 | 70 | 78 | 84 | 142 | |||||||||||||||
Depreciation, depletion and amortization | 699 | 655 | 615 | 615 | 720 | |||||||||||||||
Impairment of assets | 6 | 1 | 670 | 8 | 91 | |||||||||||||||
Interest expense | 77 | 75 | 72 | 123 | 151 | |||||||||||||||
Accretion expense | 13 | 20 | 22 | 17 | 22 | |||||||||||||||
(Profit)/loss on sale of assets, realization of loans, indirect taxes and other | (36 | ) | 10 | (64 | ) | 10 | (3 | ) | ||||||||||||
Non-hedge derivative loss and movement on bonds | 208 | 808 | 258 | 1,452 | 786 | |||||||||||||||
(Loss)/income from continuing operations before income tax and equity income in associates | (96 | ) | (711 | ) | (373 | ) | (898 | ) | 381 | |||||||||||
Taxation(expense)/benefit | (122 | ) | (118 | ) | (22 | ) | 33 | (255 | ) | |||||||||||
Equity income/(loss) in associates | 99 | 41 | (149 | ) | 88 | 40 | ||||||||||||||
Net (loss)/income from continuing operations | (119 | ) | (788 | ) | (544 | ) | (777 | ) | 166 | |||||||||||
Discontinued operations | 6 | 2 | 23 | — | — | |||||||||||||||
Net (loss)/income | (113 | ) | (786 | ) | (521 | ) | (777 | ) | 166 | |||||||||||
Less: Net income attributable to noncontrolling interests | (29 | ) | (28 | ) | (42 | ) | (48 | ) | (54 | ) | ||||||||||
Net (loss)/income — attributable to AngloGold Ashanti | (142 | ) | (814 | ) | (563 | ) | (825 | ) | 112 | |||||||||||
Net (loss)/income — attributable to AngloGold Ashanti | ||||||||||||||||||||
(Loss)/income from continuing operations | (148 | ) | (816 | ) | (586 | ) | (825 | ) | 112 | |||||||||||
Discontinued operations | 6 | 2 | 23 | — | — | |||||||||||||||
(142 | ) | (814 | ) | (563 | ) | (825 | ) | 112 | ||||||||||||
Basic (loss)/earnings per common share (in $)(5) | ||||||||||||||||||||
From continuing operations | (0.54 | ) | (2.93 | ) | (1.86 | ) | (2.30 | ) | 0.30 | |||||||||||
Discontinued operations | 0.02 | 0.01 | 0.07 | — | — | |||||||||||||||
(0.52 | ) | (2.92 | ) | (1.79 | ) | (2.30 | ) | 0.30 | ||||||||||||
Net income/(loss) — attributable to AngloGold Ashanti common stockholders | (0.52 | ) | (2.92 | ) | (1.79 | ) | (2.30 | ) | 0.30 | |||||||||||
Diluted (loss)/income per common share (in $)(5) | ||||||||||||||||||||
From continuing operations | (0.54 | ) | (2.93 | ) | (1.86 | ) | (2.30 | ) | 0.30 | |||||||||||
Discontinued operations | 0.02 | 0.01 | 0.07 | — | — | |||||||||||||||
(0.52 | ) | (2.92 | ) | (1.79 | ) | (2.30 | ) | 0.30 | ||||||||||||
Net income/(loss) — attributable to common stockholders | (0.52 | ) | (2.92 | ) | (1.79 | ) | (2.30 | ) | 0.30 | |||||||||||
Dividend per common share (cents) | 39 | 44 | 13 | 13 | 18 | |||||||||||||||
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2006 | 2007(1) | 2008(2) | 2009 | 2010 | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
(in millions, except share amounts) | ||||||||||||||||||||
Consolidated balance sheet data (as at period end) | ||||||||||||||||||||
Cash and cash equivalents and restricted cash | 482 | 514 | 585 | 1,112 | 585 | |||||||||||||||
Other current assets | 1,394 | 1,599 | 2,328 | 1,646 | 1,412 | |||||||||||||||
Property, plant and equipment and acquired properties, net | 6,266 | 6,807 | 5,579 | 6,285 | 6,762 | |||||||||||||||
Goodwill and other intangibles, net | 566 | 591 | 152 | 180 | 197 | |||||||||||||||
Materials on the leach pad (long-term) | 149 | 190 | 261 | 324 | 331 | |||||||||||||||
Other long-term assets, derivatives, deferred taxation assets and other long-term inventory | 656 | 680 | 546 | 1,115 | 1,101 | |||||||||||||||
Total assets | 9,513 | 10,381 | 9,451 | 10,662 | 10,388 | |||||||||||||||
Current liabilities | 2,467 | 3,795 | 3,458 | 4,475 | 1,004 | |||||||||||||||
Provision for environmental rehabilitation | 310 | 394 | 302 | 385 | 530 | |||||||||||||||
Deferred taxation liabilities | 1,275 | 1,345 | 1,008 | 1,171 | 1,200 | |||||||||||||||
Other long-term liabilities, and derivatives | 2,092 | 2,232 | 1,277 | 1,186 | 3,065 | |||||||||||||||
Equity(6) | 3,369 | 2,615 | 3,406 | 3,445 | 4,589 | |||||||||||||||
Total liabilities and equity | 9,513 | 10,381 | 9,451 | 10,662 | 10,388 | |||||||||||||||
Capital stock (exclusive of long-term debt and redeemable preferred stock) | 10 | 10 | 12 | 12 | 13 | |||||||||||||||
Number of common shares as adjusted to reflect changes in capital stock | 276,236,153 | 277,457,471 | 353,483,410 | 362,240,669 | 381,204,080 | |||||||||||||||
Net assets | 3,369 | 2,615 | 3,406 | 3,445 | 4,589 |
(1) | Includes the acquisition of 15 percent minority interest acquired in the Iduapriem and Teberebie mine with effect from September 1, 2007. See “Item 4A.: History and development of the company”. | |
(2) | 2008 results included the acquisition of the remaining 33 percent shareholding in the Cripple Creek and Victor Gold Mining Company with effect from July 1, 2008. In prior years, the investment was consolidated as a subsidiary. The 2008 treatment is therefore consistent with that of prior years. See “Item 4A.: History and development of the company”. | |
(3) | Product sales represent revenue from the sale of gold. | |
(4) | Operating costs include production costs, exploration costs, related party transactions, general and administrative, market development costs, research and development, employment severance costs and other. | |
(5) | The calculations of basic and diluted (loss)/earnings per common share are described in note 9 to the consolidated financial statements “Income/(loss) per common share”. Amounts reflected exclude E Ordinary shares. | |
(6) | Includes noncontrolling interests. |
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Interim | Final | Total | Interim | Final | Total | |||||||||||||||||||
Year ended December 31 | (South African cents per ordinary share) | (US cents per ordinary share(1)) | ||||||||||||||||||||||
2006 | 210 | 240 | 450 | 29.4 | 32.38 | 61.78 | ||||||||||||||||||
2007 | 90 | 53 | 143 | 12.44 | 6.60 | 19.04 | ||||||||||||||||||
2008 | 50 | 50 | 100 | 6.4490 | 4.9990 | 11.4480 | ||||||||||||||||||
2009 | 60 | 70 | 130 | 7.6553 | 9.4957 | 17.1510 | ||||||||||||||||||
2010 | 65 | 80 | 145 | 9.0034 | 11.2599 | 20.2633 | ||||||||||||||||||
(1) | 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. |
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Year ended December 31 | High | Low | Year end | Average(1) | ||||||||||||
2006(2) | 7.94 | 5.99 | 7.04 | 6.81 | ||||||||||||
2007(2) | 7.49 | 6.45 | 6.81 | 7.03 | ||||||||||||
2008(2) | 11.27 | 6.74 | 9.30 | 8.26 | ||||||||||||
2009(3) | 10.70 | 7.21 | 7.41 | 8.44 | ||||||||||||
2010(3) | 8.08 | 6.57 | 6.64 | 7.34 | ||||||||||||
2011(4) | 7.35 | 6.49 | — | 6.93 |
(1) | The average rate of exchange on the last business day of each month during the year. | |
(2) | Based on the noon buying rate in New York City for cable transfers as certified for customs purposes by the Federal Reserve Bank of New York. | |
(3) | Based on the interbank rate as reported by OANDA Corporation. | |
(4) | Through to May 24, 2011. |
Exchange rate information for the months of (1) | High | Low | ||||||
November 2010 | 7.17 | 6.71 | ||||||
December 2010 | 7.15 | 6.57 | ||||||
January 2011 | 7.19 | 6.49 | ||||||
February 2011 | 7.34 | 6.95 | ||||||
March 2011 | 7.19 | 6.79 | ||||||
April 2011 | 6.90 | 6.50 | ||||||
May 2011(2) | 7.05 | 6.51 |
(1) | Based on the interbank rate as reported by OANDA Corporation. | |
(2) | Through to May 24, 2011. |
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• | speculative positions taken by investors or traders in gold; | |
• | changes in the demand for gold as an investment; | |
• | changes in the demand for gold used in jewellery and for other industrial uses, including as a result of prevailing economic conditions; | |
• | changes in the supply of gold from production, disinvestment, scrap and hedging; | |
• | financial market expectations regarding the rate of inflation; | |
• | strength of the US dollar (the currency in which the gold price trades internationally) relative to other currencies; | |
• | changes in interest rates; | |
• | actual or expected sales or purchases of gold by central banks and the International Monetary Fund; | |
• | gold hedging and de-hedging by gold producers; | |
• | global or regional political or economic events; and | |
• | the cost of gold production in major gold producing countries. |
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• | the insolvency of key suppliers could result in a supply chain break-down; | |
• | other income and expense could vary materially from expectations depending on gains or losses realized on the sale or exchange of financial instruments and impairment charges may be incurred with respect to our investments; | |
• | AngloGold Ashanti’s defined benefit pension fund may not achieve expected returns on its investments, which could require the company to make substantial cash payments to fund any resulting deficits; and | |
• | a reduction in the availability of credit may make it more difficult for the company to obtain financing for its operations and capital expenditures or make that financing more costly. |
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• | future prices of gold, uranium, silver and other metals; | |
• | future currency exchange rates; | |
• | tonnage, grades and metallurgical characteristics of ore to be mined and processed; | |
• | anticipated recovery rates of gold, uranium, silver and other metals extracted from the ore; | |
• | anticipated capital expenditure and cash operating costs; and | |
• | the required return on investment. |
• | timing and cost of construction of mining and processing facilities, which can be considerable; | |
• | availability and cost of skilled labor, power, water and transportation; | |
• | availability and cost of appropriate smelting and refining arrangements; | |
• | requirement and time needed to obtain necessary environmental and other governmental permits; and | |
• | availability of funds to finance construction and development activities. |
• | future prices of metals and other commodities; | |
• | future foreign currency exchange rates; and | |
• | required return on investment as based on the cost and availability of capital. | |
Feasibility studies also include activities to estimate anticipated: | ||
• | tonnages, grades and metallurgical characteristics of the ore to be mined and processed; | |
• | recovery rates of gold, uranium and other metals from the ore; and | |
• | capital expenditure and cash operating costs. |
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• | environmental hazards, including discharge of metals, pollutants, radioactivity or hazardous chemicals; industrial accidents or accidents during transportation; | |
• | underground fires; | |
• | labor disputes; | |
• | loss of information integrity or data; | |
• | activities of illegal or artisanal miners; | |
• | mechanical breakdowns; | |
• | electrical power interruptions; | |
• | encountering unexpected geological formations; | |
• | unanticipated ground conditions; | |
• | water ingress; | |
• | process water shortages; | |
• | unanticipated increases in gold lock-up and inventory levels at heap-leach operations; | |
• | fall-of-ground accidents in underground operations; | |
• | failure of mining pit slopes, heap-leach facilities, water dams, waste stockpiles and tailings dam walls; | |
• | legal and regulatory restrictions and changes to such restrictions; | |
• | safety-related stoppages; | |
• | seismic activity; and | |
• | other natural phenomena, such as floods, droughts or inclement weather conditions, potentially exacerbated by climate change. |
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• | ex-mine workers who had never worked at that mine; or | |
• | ex-mine workers who used to work at the mine, but no longer work at the mine. |
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• | Formation of AngloGold Limited through the consolidation of East Rand Gold and Uranium Company Limited; Eastvaal Gold Holdings Limited; Southvaal Holdings Limited; Free State Consolidated Gold Mines Limited; Elandsrand Gold Mining Company Limited; H.J. Joel Gold Mining Company Limited and Western Deep Levels Limited into a single, focused, independent, gold mining company. Vaal Reefs Exploration and Mining Company Limited (Vaal Reefs), the vehicle for the consolidation, changed its name to AngloGold Limited and increased its authorized share capital, effective March 30, 1998; and | |
• | Acquisition of non-controlling shareholders interest in Driefontein Consolidated Limited (17 percent); Anmercosa Mining (West Africa) Limited (100 percent); Western Ultra Deep Levels Limited (89 percent); Eastern Gold Holdings Limited (52 percent); Erongo Mining and Exploration Company Limited (70 percent). |
• | Purchased Minorco’s gold interests in North and South America; and | |
• | Acquisition of Acacia Resources in Australia. |
• | a 40 percent interest in the Morila mine in Mali from Randgold Resources Limited; | |
• | a 50 percent interest in the Geita mine in Tanzania from Ashanti Goldfields Company Limited (Ashanti); and | |
• | a 25 percent interest in OroAfrica, South Africa’s largest manufacturer of gold jewellery. |
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• | AngloGold sold the Elandsrand and Deelkraal mines to Harmony Gold Mining Company Limited (Harmony); disposed of its interests in No. 2 Shaft Vaal River Operations to African Rainbow Minerals (ARM) and made an unsuccessful take-over bid for Normandy Mining Limited. |
• | Sold its Free State assets to ARM and Harmony; and | |
• | Acquired an additional 46.25 percent of the equity, as well as the total loan assignment, of Cerro Vanguardia SA from Pérez Companc International SA, thereby increasing its interest in Cerro Vanguardia to 92.5 percent. |
• | Disposed of its wholly owned Amapari project to Mineração Pedra Branca do Amapari; | |
• | Sold its 49 percent stake in the Gawler Craton joint venture, including the Tunkillia project located in South Australia to Helix Resources Limited; | |
• | Sold its interest in the Jerritt Canyon joint venture to Queenstake Resources USA Inc; | |
• | Disposed of its entire investments in East African Gold Mines Limited and in Randgold Resources Limited; and | |
• | Purchased a portion of the Driefontein mining area in South Africa from Gold Fields Limited. |
• | Sold its Western Tanami project to Tanami Gold NL in Australia; | |
• | Concluded the business combination with Ashanti Goldfields Company Limited, at which time, the company changed its name to AngloGold Ashanti Limited; | |
• | Acquired the remaining 50 percent interest in Geita as a result of the business combination; | |
• | AngloGold Holdings plc, a subsidiary of AngloGold, completed an offering of $1 billion principal amount 2.375 percent convertible bonds, due 2009, and guaranteed by AngloGold Ashanti; | |
• | Acquired a 29.8 percent stake in Trans-Siberian Gold plc; | |
• | Sold its Union Reefs assets to the Burnside joint venture, comprising subsidiaries of Northern Gold NL (50 percent) and Harmony (50 percent); | |
• | Sold its entire interest in Ashanti Goldfields Zimbabwe Limited to Mwana Africa Holdings (Proprietary) Limited; | |
• | Sold its 40 percent equity interest in Tameng Mining and Exploration (Pty) Limited of South Africa (Tameng) to Mahube Mining (Pty) Limited; and | |
• | Subscribed for a 12.3 percent stake in the expanded issued capital of Philippines explorer Red 5 Limited. |
• | Substantially restructured its hedge book in January 2005; | |
• | Signed a three-year $700 million revolving credit facility; | |
• | Disposed of exploration assets in the Laverton area in Australia; | |
• | Disposed of its La Rescatada project to ARUNANI SAC, a local Peruvian corporation; | |
• | Acquired an effective 8.7 percent stake in China explorer, Dynasty Gold Corporation; and | |
• | The Director-General of Minerals and Energy notified AngloGold Ashanti in August 2005 that its application for the new order mining rights in terms of the South African Mineral and Petroleum Resources Development Act had been granted. |
• | Raised $500 million through an equity offering; | |
• | Acquired two exploration companies, Amikan and AS APK, from TSG as part of the company’s initial contribution towards its strategic alliance with Polymetal; | |
• | Formed a new company with B2Gold (formerly Bema Gold) to jointly explore a select group of mineral opportunities located in northern Colombia, South America; | |
• | AngloGold Ashanti (USA) Exploration Inc, International Tower Hill Mines Ltd (ITH) and Talon Gold Alaska, Inc. (Talon), a wholly owned subsidiary of ITH, entered into an Asset Purchase and Sale and Indemnity Agreement whereby AngloGold Ashanti sold to Talon a 100 percent interest in six Alaskan mineral exploration properties and associated databases in return for an approximate 20 percent interest in ITH. AngloGold Ashanti has the option to increase or dilute its stake in these projects, subject to certain conditions; | |
• | Disposed of its entire business undertaking related to the Bibiani mine and Bibiani North prospecting permit to Central African Gold plc; | |
• | Entered into a 50:50 strategic alliance with Russian gold and silver producer, OAO Inter-Regional Research and Production Association Polymetal (Polymetal), in terms of which Polymetal and AngloGold Ashanti would co-operate in exploration and the acquisition and development of gold mining opportunities within the Russian Federation; and |
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• | Implemented an empowerment transaction with two components: the development of an employee share ownership plan (ESOP) and the acquisition by Izingwe Holdings (Proprietary) Limited (an empowerment company) of an equity interest in AngloGold Ashanti. |
• | Acquired the non-controlling interests, previously held by the Government of Ghana (5 percent) and the International Finance Corporation (10 percent), in the Iduapriem and Teberebie mines; | |
• | Anglo American plc sold 69,100,000 ordinary shares of AngloGold Ashanti, thereby reducing Anglo American’s shareholding in AngloGold Ashanti from 41.7 percent to 16.6 percent; and | |
• | Announced the successful closing of a $1.15 billion syndicated revolving credit facility. |
• | Issued 69,470,442 ordinary shares in a fully subscribed rights offer; | |
• | Announced significant exploration results at the 100 percent owned La Colosa; | |
• | Acquired Golden Cycle Gold Corporation through the issue of 3,181,198 ordinary shares, resulting in Cripple Creek & Victor becoming a wholly-owned subsidiary; | |
• | Sold entire holding in Nufcor International Limited and cancelled 1 million pounds of outstanding uranium contracts; | |
• | Acquired São Bento Gold Company Limited through the issue of 2,701,660 ordinary shares with the ultimate result of doubling production from the Córrego do Sítio project; | |
• | Entered into a $1 billion term facility agreement to be used to redeem the $1 billion convertible bonds due February 2009; and | |
• | AngloGold Ashanti implemented a hedge restructure program. |
• | Sold its 33.33 percent joint venture interest in the Boddington Gold Mine to Newmont Mining Corporation; | |
• | Entered into an agreement with Simmer & Jack Mines Limited to sell the Tau Lekoa Mine and adjacent project areas; | |
• | AngloGold Ashanti repaid its $1 billion convertible bonds issued in 2004; | |
• | Anglo American plc sold its remaining shareholding to Paulson & Co. Inc.; | |
• | Entered into a strategic alliance with Thani Dubai Mining Limited to explore, develop and operate mines across the Middle East and parts of North Africa; | |
• | AngloGold Ashanti issues $732.5 million, 3.5 percent convertible bonds, due 2014; | |
• | Issued 7,624,162 ordinary shares and raised a total of $284 million through an equity offering; | |
• | Acquired an effective 45 percent interest in the Kibali gold project in the Democratic Republic of the Congo; | |
• | Entered into a joint venture with the De Beers Group of Companies to explore for, and ultimately mine gold and other minerals and metals, excluding diamonds, on marine deposits; | |
• | Increased the holding in the Sadiola Gold Mine from 38 percent to 41 percent; and | |
• | AngloGold Ashanti continued to manage its hedge book in accordance with its hedge reduction program. |
• | Issued $700 million 5.375 percent bonds due 2020 and $300 million 6.5 percent bonds due 2040; | |
• | Finalized the sale of 100 percent interest in the Tau Lekoa mine and adjacent properties in South Africa to Simmer & Jack Mines Limited for R600 million; | |
• | Issued 18,140,000 ordinary shares and raised a total of $789 million through an equity offering; | |
• | Issued $789 million 6 percent mandatory convertible bond, due 2013; | |
• | Obtained a four-year syndicated revolving credit facility for $1 billion due 2014; | |
• | AngloGold Ashanti eliminated its hedge book, thereby gaining full exposure to spot gold price; | |
• | Sold entire shareholding in B2Gold and realized net proceeds of $68 million; and | |
• | Obtained a short-term facility with FirstRand Bank Limited of R1.5 billion. |
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• | Safety is our first value. | |
We place people first and correspondingly put the highest priority on safe and healthy practices and systems of work. We are responsible for seeking out new and innovative ways to ensure that our workplaces are free of occupational injury and illness. We live each day for each other and use our collective commitment, talents, resources and systems to deliver on our most important commitment ...to care. | ||
• | We treat each other with dignity and respect. | |
We believe that individuals who are treated with respect and who are entrusted to take responsibility respond by giving their best. We seek to preserve people’s dignity, their sense of self-worth in all our interactions, respecting them for who they are and valuing the unique contribution that they can make to our business success. We are honest with ourselves and others, and we deal ethically with all of our business and social partners. | ||
• | We value diversity. | |
We aim to be a global leader with the right people for the right jobs. We promote inclusion and team work, deriving benefit from the rich diversity of the cultures, ideas, experiences and skills that each employee brings to the business. |
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• | We are accountable for our actions and undertake to deliver on our commitments. | |
We are focused on delivering results and we do what we say we will do. We accept responsibility and hold ourselves accountable for our work, our behavior, our ethics and our actions. We aim to deliver high performance outcomes and undertake to deliver on our commitments to our colleagues, business and social partners, and our investors. | ||
• | The communities and societies in which we operate will be better off for AngloGold Ashanti having been there. | |
We uphold and promote fundamental human rights where we do business. We contribute to building productive, respectful and mutually beneficial partnerships in the communities in which we operate. We aim to leave host communities with a sustainable future. | ||
• | We respect the environment. | |
We are committed to continually improving our processes in order to prevent pollution, minimize waste, increase our carbon efficiency and make efficient use of natural resources. We will develop innovative solutions to mitigate environmental and climate risks. |
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• | Recognize that “People are the business” — organizational development is a strategic value driver for the group; | |
• | Maximize margins— manage both revenue and costs to ensure delivery and protection of returns throughout the economic cycle; | |
• | Manage the business as an asset portfolio— use capital deployment optimization approaches to support delivery of return targets; | |
• | Grow the business— have a definite strategy for both organic growth and growth by acquisition and be opportunistic in seeking value accretive targets; and | |
• | Embrace sustainability principles— understand and focus on creating value for both business and social partners to manage risk and opportunity. |
• | Mission, defines a clear view of the organization; | |
• | Vision, reflects a clear and consistent view of the organization’s future; | |
• | Values, recognizes that the process used to achieve results is as important as the results themselves; | |
• | Business Process Framework, defines the policy, standards and operating framework necessary to establish a flexible and responsive work model within which people have the opportunity to be creative and realize their potential; and | |
• | Organizational model, ensures that the right person, does the right work, in the right way and at the right time. |
• | Managing revenuesto ensure that full value is realized from its products by: |
• | managing product sales to realize premiums for the delivery of a superior quality product and by exploring other value adding initiatives; | ||
• | delivering products of a consistent quality, on time; and | ||
• | offering exposure to spot prices. |
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• | Managing coststo protect margins and returns on capital employed by: |
• | applying resource development strategies to maintain operating margins over the life cycle of the assets; | ||
• | protecting critical margins where appropriate; | ||
• | maintaining costs below the industry’s mean in order to minimize risks to cash flow and returns in a volatile price environment; and | ||
• | optimizing capital deployment by investing only in assets and growth opportunities which offer superior returns. |
• | ensuring safe work practices and a healthy workforce; | |
• | generating returns on capital of more than 15 percent through the cycle; | |
• | meeting production and cost targets; | |
• | managing costs to maximize margins and return on capital employed over the life cycle of all operations and projects; | |
• | maximizing revenues; and | |
• | implementing Project ONE to standardize all operating procedures and achieve key five-year goals. The five-year goals agreed in 2008 were: |
• | a 70 percent reduction in accident rates; | ||
• | a 30 percent improvement in overall productivity (in terms of ounces of gold produced per employee); | ||
• | a 60 percent reduction in reportable environmental incidents; | ||
• | a 20 percent increase in gold production; | ||
• | a 25 percent reduction in total cash costs per ounce (as calculated under IFRS); and | ||
• | to deliver an average return on capital of above 15 percent. |
• | Safety — an all injury frequency rate of less than 9 per million hours worked by 2015; | |
• | Productivity — 20 percent improvement in ounce/TEC by 2015; | |
• | Environment — 30 percent reduction in reportable incidents by 2015; | |
• | Production (attributable ounces produced) — between 5.4 million ounces and 5.6 million ounces, an improvement of 20 percent on base; | |
• | Total cash cost per ounce — a 20 percent improvement in real unit costs by 2015 (adjusted for mining inflation); and | |
• | Return on shareholders’ equity — 15 percent through the cycle to 2015. |
• | ensuring that individual assets and projects meet or exceed specified risk-adjusted rates of return; | |
• | identifying the strengths and weaknesses of the portfolio, with particular focus on portfolio risk; | |
• | implementing strategies to identify optimal orebody capability; | |
• | applying methods and design to ensure optimal operating performance; | |
• | ensuring the application of detailed planning and scheduling, together with the use of best-practice operating methods associated with each asset; | |
• | optimizing returns from existing assets and growth opportunities; and | |
• | selling those assets that no longer meet the company’s criteria at attractive valuations. |
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• | Exploration— leveraging its asset portfolio and landholdings through greenfield and brownfield exploration and development while targeting new opportunities; | |
• | Brownfield development— the development portfolio comprises board approved projects including: the Tropicana gold project in Australia; the Córrego do Sítio and Lamego projects in Brazil; the Mine Life Extension project at Cripple Creek & Victor in the United States; the Ventersdorp Contact Reef project at the Mponeng mine in South Africa; and others undergoing feasibility studies in Argentina, Brazil, Colombia, the Democratic Republic of the Congo, Mali, Namibia, South Africa and the United States; | |
• | New projects— by promoting organic growth and leveraging current positions; | |
• | Mergers and acquisitions— by selectively pursuing value accretive merger and acquisition opportunities; and | |
• | Logical incrementalism— by maximizing the value of other commodities within an existing and developing asset portfolio. |
• | Safety and health— ensuring that commitment to the welfare of people remains the company’s most important value; | |
• | Environment— by managing the impact on the environment, meeting commitments made to host communities and ensuring AngloGold Ashanti is the preferred development partner for mining projects; | |
• | Community relations— establishing relationships and developing strategies that support the creation of unique value for various community partners; | |
• | Institutional relations— working through the respective government and other local institutions, while respecting the values and traditions of each jurisdiction; and | |
• | Political relationships— managing relationships in a manner consistent with the company’s values. |
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1. | Exploration — Finding the orebody | |
AngloGold Ashanti’s exploration work is split into two functions. The company’s greenfield exploration team identifies and evaluates targets on its own or in conjunction with joint venture partners. The brownfield exploration team is responsible for identifying the limits of known deposits or finding additional deposits close to existing operations to facilitate organic growth. All discoveries undergo a well structured and intensive evaluation process aimed at improving confidence in the Mineral Resource and Ore Reserve estimates before developing or expanding the mine. | ||
2. | Development — Creating access to the orebody | |
Two types of mining are used to access orebodies: |
• | Underground mining: a vertical or decline (inclined) shaft is sunk deep into the ground to transport people and mining materials to underground levels from which the orebody is accessed through horizontal tunnels known as haulages and cross-cuts. Further development is then undertaken to open the orebody so mining can take place; and | ||
• | Open-pit mining: this method is employed when ore lies close to surface and can be exposed for mining by stripping overlying, barren material. |
3. | Mining — Removing the ore | |
In underground mining, holes are first drilled into the orebody, filled with explosives and blasted. The blasted ‘stopes’ or ‘faces’ are then cleaned and the ore released by blasting is then ready to be transported to surface. | ||
In open-pit mining, the material may be ‘free digging,’ although drilling and blasting is usually necessary to break the ore and waste prior to transportation. Excavators then load the material onto haul trucks which transport the material to the plant, ore stockpiles or waste dump facility. | ||
4. | Transportation — Moving broken material from mining face to the plant | |
Underground material is brought to surface by a combination of horizontal and vertical transport systems. Once on surface, ore is transported to the processing facilities by surface rail or overland conveyors and waste material is deposited on low grade dumps. | ||
In open-pit operations, haul trucks deliver ore directly to the processing facilities. | ||
5. | Processing — Treating the ore to recover the gold | |
Liberation is the first step in processing and involves breaking up ore, which is delivered as large rocks, into small particles so contained gold minerals are exposed and available for recovery. This is usually undertaken by a combination of multi- stage crushing and milling circuits with associated screening and classification processes to ensure that material of the correct size is removed promptly from the milling circuit. Coarse, liberated gold particles, which may not dissolve fully during the cyanide leach process, are removed by gravity concentration during milling with the resultant concentrate undergoing separate processing. |
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• | Free-milling: where gold is readily available for recovery by the cyanide leaching process; and | ||
• | Refractory ores: where gold is not readily available for leaching because it is locked within a sulfide mineral matrix (e.g. pyrite), extremely finely dispersed within the host rock (not yet exposed), or alloyed with other elements which retard or prevent leaching (e.g. tellurides). |
• | Silver, which is associated with the gold at some of our operations; | ||
• | Sulfuric acid, which is produced from the gases generated during sulfide roasting; and | ||
• | Uranium, which is recovered in a process which involves sulfuric acid leaching, followed by recovery of the leached uranium onto resin and subsequent stripping of the resin by sulfuric acid and precipitation of ammonium diurinate (yellow cake) using ammonia. Uranium oxide is then produced by calcination (heating) of the yellow cake. |
6. | Refining — Preparing the gold for market | |
The doré bars are transported to a precious metal refinery, where the gold is upgraded to a purity of 99.5 percent or greater, for sale to a range of final users. High-purity gold is referred to as ‘good delivery’, which means it meets the quality standards set by the London Bullion Market Association and gives the buyer assurance of its gold content and purity. |
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• | promote equitable access to the nation’s mineral resources by all the people of South Africa; | |
• | substantially and meaningfully expand opportunities for HDSAs, including women, to enter the mining and minerals industry and to benefit from the exploitation of the nation’s Mineral Resources; | |
• | use the industry’s existing skills base for the empowerment of HDSAs; | |
• | expand the skills base of HDSAs in order to serve the community; | |
• | promote employment and advance the social and economic welfare of mining communities and the major labor-sending areas; and | |
• | promote beneficiation of South Africa’s mineral commodities. |
• | make the Minister the responsible authority for implementing environmental matters in terms of the National Environmental Management Act, 1998 (NEMA) and specific environmental legislation as it relates to prospecting, mining, exploration, production and related activities incidental thereto on the prospecting, mining, exploration or production area; | |
• | align the MPRDA with the NEMA in order to provide for one environmental management system; | |
• | remove ambiguities in certain definitions; | |
• | add functions to the Regional Mining Development and Environmental Committee; | |
• | amend transitional arrangements so as to further afford statutory protection to certain existing old order rights; and | |
• | provide for matters connected therewith. |
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• | to extend the term of the mining lease relating to the Obuasi mine until 2054 on terms existing prior to the business combination; | |
• | to maintain, for a period of 15 years, the royalties payable by AngloGold Ashanti with respect to its mining operations in Ghana at a rate of 3 percent per annum of the total revenue from minerals obtained by AngloGold Ashanti from such mining operations; | |
• | to ensure the income tax rate would be 30 percent for a period of 15 years. The agreement was amended in December 2006 to make the tax rate equal to the prevailing corporate rate for listed companies; | |
• | that a sale of AngloGold Ashanti’s or any of its subsidiaries’ assets located in Ghana remains subject to the government’s approval; | |
• | to permit AngloGold Ashanti and any or all of its subsidiaries in Ghana to retain up to 80 percent of export proceeds in foreign currencies offshore, or if such foreign currency is held in Ghana, to guarantee the availability of such foreign currency; and | |
• | to retain its special rights (Golden Share) under the provisions of the Mining Act pertaining to the control of a mining company, in respect of AngloGold Ashanti’s assets and operations in Ghana. |
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• | the Government of Guinea holds a 15 percent free-carried or non- contributory interest; a royalty of 3 percent based on a spot gold price of less than $475 per ounce, and 5 percent based on a spot gold price above $475 per ounce, as fixed on the London Gold Bullion Market, is payable on the value of gold exported; | |
• | a local development tax of 0.4 percent is payable on gross sales revenue; | |
• | salaries of expatriate employees are subject to a 10 percent income tax; | |
• | mining goods imported into Guinea are exempt from all import taxes and duties for the first two years of commercial production; and | |
• | SAG is committed to adopt and progressively implement a plan for the effective rehabilitation of the mining areas disturbed or affected by operations. |
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• | prospecting licenses; | |
• | retention licenses; and | |
• | mining licenses. |
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• | a license for the exploration stage, valid for a period of up to three years, renewable once; and | |
• | a mining concession or mine manifest, valid for the life of the deposit. |
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• | the start of construction, as per an approved development plan, within six months of the issuance of the concession; | |
• | extracting solely the substances indicated in the concession; | |
• | communicating to the DNPM the discovery of a mineral substance not included in the concession title; | |
• | complying with environmental requirements; | |
• | restoring the areas degraded by mining; | |
• | refraining from interrupting exploitation for more than six months; and | |
• | reporting annually on operations. |
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a) | national parks; | |
b) | regional parks; | |
c) | protected forest reserves; | |
d) | paramus (included in the new law); and | |
e) | wetlands, according to the Ramsar Convention (included in the new laws). |
• | from 1 to 5 years: approximately $9.00 per hectare per year; and | |
• | for years 6 and after, approximately $11.00 per hectare per year. |
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• | South Africa — includes operations in South Africa; | |
• | Continental Africa — includes operations in Ghana, Guinea, Mali, Namibia and Tanzania; | |
• | Australasia — includes the operation in Australia; and | |
• | Americas — includes operations in Argentina, Brazil and the United States. |
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Attributable tonnes | Attributable gold | Total cash costs | Attributable Capital Expenditure | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
treated/milled (Mt) | Average grade recovered (g/t) | Production (000oz) | ($/oz) | ($m) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | 2010 | 2009 | 2008 | 2010 | 2009 | 2008 | 2010 | 2009 | 2008 | 2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||||||||||||||
SOUTH AFRICA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vaal River | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Great Noligwa | 0.7 | 0.9 | 1.4 | 5.99 | 5.73 | 7.33 | 132 | 158 | 330 | 894 | 791 | 458 | 24 | 24 | 26 | |||||||||||||||||||||||||||||||||||||||||||||
Kopanang | 1.6 | 1.6 | 1.6 | 6.13 | 6.74 | 6.82 | 305 | 336 | 362 | 613 | 408 | 348 | 61 | 58 | 47 | |||||||||||||||||||||||||||||||||||||||||||||
Moab Khotsong | 1.0 | 0.8 | 0.6 | 9.03 | 9.36 | 9.31 | 292 | 247 | 192 | 586 | 421 | 375 | 120 | 104 | 89 | |||||||||||||||||||||||||||||||||||||||||||||
Tau Lekoa | 0.6 | 1.2 | 1.2 | 3.32 | 3.32 | 3.58 | 63 | 124 | 143 | 905 | 718 | 524 | 10 | 17 | 18 | |||||||||||||||||||||||||||||||||||||||||||||
Surface operations | 10.2 | 9.7 | 7.9 | 0.54 | 0.53 | 0.36 | 179 | 164 | 92 | 486 | 378 | 446 | 3 | 3 | 1 | |||||||||||||||||||||||||||||||||||||||||||||
West Wits | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mponeng | 1.7 | 1.9 | 1.9 | 9.48 | 8.66 | 10.02 | 532 | 520 | 600 | 452 | 331 | 248 | 122 | 109 | 86 | |||||||||||||||||||||||||||||||||||||||||||||
Savuka | 0.1 | 0.2 | 0.3 | 5.30 | 5.45 | 6.28 | 22 | 30 | 66 | 1,136 | 1,133 | 424 | 9 | 13 | 11 | |||||||||||||||||||||||||||||||||||||||||||||
TauTona(1) | 1.1 | 1.5 | 1.6 | 7.01 | 7.29 | 8.66 | 259 | 218 | 314 | 699 | 532 | 373 | 75 | 57 | 60 | |||||||||||||||||||||||||||||||||||||||||||||
CONTINENTAL AFRICA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ghana | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Iduapriem | 3.4 | 3.4 | 3.5 | 1.70 | 1.72 | 1.76 | 185 | 190 | 200 | 778 | 658 | 625 | 17 | 28 | 54 | |||||||||||||||||||||||||||||||||||||||||||||
Obuasi(1) | 2.6 | 4.6 | 5.6 | 5.16 | 5.18 | 4.37 | 317 | 381 | 357 | 760 | 630 | 636 | 109 | 94 | 112 | |||||||||||||||||||||||||||||||||||||||||||||
Non-controlling interests and exploration(6) | — | — | — | — | — | — | — | — | — | — | — | — | 1 | 2 | 2 | |||||||||||||||||||||||||||||||||||||||||||||
Guinea | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Siguiri (85 percent) | 8.8 | 8.8 | 8.6 | 0.97 | 1.11 | 1.20 | 273 | 316 | 333 | 656 | 513 | 468 | 10 | 22 | 18 | |||||||||||||||||||||||||||||||||||||||||||||
Non-controlling interests and exploration(6) | — | — | — | — | — | — | — | — | — | — | — | — | 2 | 4 | 4 | |||||||||||||||||||||||||||||||||||||||||||||
Mali | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Morila (40 percent)(5) | 1.7 | 1.7 | 1.7 | 1.70 | 2.47 | 3.08 | 95 | 137 | 170 | 716 | 526 | 424 | 1 | 4 | 1 | |||||||||||||||||||||||||||||||||||||||||||||
Sadiola (41 percent)(4)(5) | 1.8 | 1.7 | 1.6 | 2.04 | 2.52 | 3.42 | 118 | 135 | 172 | 686 | 489 | 401 | 8 | 4 | 3 | |||||||||||||||||||||||||||||||||||||||||||||
Yatela (40 percent)(3)(5) | 1.2 | 1.1 | 1.1 | 1.23 | 3.62 | 2.66 | 60 | 89 | 66 | 817 | 326 | 621 | 2 | 1 | 3 | |||||||||||||||||||||||||||||||||||||||||||||
Namibia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Navachab | 1.5 | 1.3 | 1.5 | 1.8 | 1.58 | 1.43 | 86 | 65 | 68 | 721 | 677 | 559 | 14 | 20 | 12 | |||||||||||||||||||||||||||||||||||||||||||||
Tanzania | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Geita | 4.7 | 4.5 | 4.3 | 2.36 | 1.89 | 1.92 | 357 | 272 | 264 | 697 | 985 | 814 | 38 | 19 | 53 | |||||||||||||||||||||||||||||||||||||||||||||
Democratic Republic of Congo | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kibali (45 percent)(5) | — | — | — | — | — | — | — | — | — | — | — | — | 30 | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | — | — | — | — | — | — | — | — | 2 | — | — | |||||||||||||||||||||||||||||||||||||||||||||
AUSTRALASIA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Boddington (33.33 percent) | — | — | — | — | — | — | — | — | — | — | — | — | — | 146 | 419 | |||||||||||||||||||||||||||||||||||||||||||||
Sunrise Dam(2) | 3.6 | 3.9 | 3.8 | 3.22 | 2.87 | 3.46 | 396 | 401 | 433 | 692 | 631 | 559 | 29 | 31 | 19 | |||||||||||||||||||||||||||||||||||||||||||||
Tropicana (70 percent) | — | — | — | — | — | — | — | — | — | — | — | — | 10 | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Exploration and other | — | — | — | — | — | — | — | — | — | — | — | — | 1 | — | — | |||||||||||||||||||||||||||||||||||||||||||||
AMERICAS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Argentina | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent) | 1.0 | 0.9 | 0.9 | 6.11 | 6.51 | 5.44 | 194 | 192 | 154 | 366 | 359 | 617 | 38 | 17 | 15 | |||||||||||||||||||||||||||||||||||||||||||||
Non-controlling interests and exploration(6) | — | — | — | — | — | — | — | — | — | — | — | — | 3 | 1 | 1 | |||||||||||||||||||||||||||||||||||||||||||||
Brazil | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AGA Mineraçáo(1) | 1.6 | 1.5 | 1.4 | 7.21 | 7.02 | 7.62 | 338 | 329 | 320 | 444 | 347 | 322 | 142 | 84 | 69 | |||||||||||||||||||||||||||||||||||||||||||||
Serra Grande (50 percent) | 0.6 | 0.5 | 0.4 | 4.05 | 4.52 | 6.85 | 77 | 77 | 87 | 481 | 429 | 299 | 26 | 33 | 20 | |||||||||||||||||||||||||||||||||||||||||||||
Non-controlling interests and exploration(6) | — | — | — | — | — | — | — | — | — | — | — | — | 29 | 36 | 22 | |||||||||||||||||||||||||||||||||||||||||||||
United States of America | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cripple Creek & Victor(3) | 20.6 | 18.7 | 22.1 | 0.43 | 0.46 | 0.49 | 233 | 218 | 258 | 500 | 371 | 310 | 73 | 87 | 27 | |||||||||||||||||||||||||||||||||||||||||||||
(1) | The yields of TauTona, Obuasi and, AGA Mineraçáo represent underground operations; | |
(2) | The yield of Sunrise Dam represents open-pit operations; | |
(3) | The yields of Yatela and Cripple Creek & Victor reflect recoverable gold placed/tonnes placed from heap leach operations. The remaining 33 percent interest in Cripple Creek & Victor was acquired effective July 1, 2008; | |
(4) | Prior to December 29, 2009 AngloGold Ashanti’s shareholding in Sadiola was 38 percent; | |
(5) | Equity-accounted investments; | |
(6) | Non-controlling interest and exploration. |
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• | The Vaal River operations — Great Noligwa, Kopanang, Moab Khotsong and the surface sources operations. The fourth deep-level mine in this region, Tau Lekoa, was sold during the course of the year; and |
• | The West Wits operations — Mponeng, Savuka and TauTona. |
Together, these operations produced 1.78 million ounces of gold in 2010, or 39 percent of group production, and 1.46 million pounds of uranium as a by-product. The South African operations employed 35,660 people in 2010. |
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• | Vaal River operations |
• | The Vaal Reef contains approximately 85 percent of the reserve tonnage with mining grades between 10 and 20g/t and comprises a series of oligomictic conglomerates and quartzite packages developed on successive unconformities. Several distinct facies have been identified, each with its unique gold distribution and grade characteristic. |
• | The VCR has a lower grade than the Vaal Reef, and contains approximately 15 percent of the estimated reserves. The economic portion is mainly concentrated in the western part of the lease area and can take the form of a massive conglomerate, a pyritic sand unit with intermittent pebble layers or a thin conglomerate horizon. The reef is located at the contact between the overlying Kliprivierberg Lavas of the Ventersdorp SuperGroup and the underlying sediments of the Witwatersrand SuperGroup which creates a distinctive seismic reflector. The VCR is located up to one kilometer above the Vaal Reef. |
• | The “C” Reef is a thin, small pebble conglomerate with a carbon-rich basal contact, located approximately 270 meters above the Vaal Reef. It has less than 1 percent of the estimated reserves with grades similar to the Vaal Reef, but 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. |
East Gold | ||||||||||||||||||||
West Gold | Acid and | Noligwa | Mispah Gold | Kopanang | ||||||||||||||||
Plant | Float Plant | Gold Plant | Plant | Gold Plant | ||||||||||||||||
Gold plants | ||||||||||||||||||||
Capacity (000 tonnes/month) | 180 | 309 | 263 | 140 | 420 | |||||||||||||||
Uranium plants | ||||||||||||||||||||
Capacity (000 tonnes/month) | — | — | 263 | — | — | |||||||||||||||
Pyrite flotation plants | ||||||||||||||||||||
Capacity (000 tonnes/month) | — | 250 | 145 | — | — | |||||||||||||||
Sulfuric acid plants | ||||||||||||||||||||
Production (tonnes/month) | — | 7,500 | — | — | — | |||||||||||||||
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Vaal River | ||||||||||||||||||||
Moab | and West | |||||||||||||||||||
Great Noligwa | Kopanang | Khotsong | Tau Lekoa(3) | Wits surface | ||||||||||||||||
2010 | ||||||||||||||||||||
Pay limit (oz/t) | 0.36 | 0.41 | 0.49 | 0.01 | ||||||||||||||||
Pay limit (g/t) | 11.69 | 13.08 | 15.87 | 0.29 | ||||||||||||||||
Recovered grade (oz/t) | 0.175 | 0.179 | 0.263 | 0.016 | ||||||||||||||||
Recovered grade (g/t) | 5.99 | 6.13 | 9.03 | 3.32 | 0.54 | |||||||||||||||
Gold production (000 oz) | 132 | 305 | 292 | 63 | 179 | |||||||||||||||
Total cash costs ($/oz)(1) | 894 | 613 | 586 | 905 | 486 | |||||||||||||||
Total production costs ($/oz)(1) | 1,152 | 879 | 997 | 937 | 520 | |||||||||||||||
Capital expenditure ($ million) | 24 | 61 | 120 | 10 | 3 | |||||||||||||||
Employees(2) | 3,225 | 5,484 | 4,651 | 374 | ||||||||||||||||
Outside contractors(2) | 90 | 454 | 1,801 | — | ||||||||||||||||
All injury frequency rate | 21.63 | 21.86 | 19.72 | 5.99 | ||||||||||||||||
2009 | ||||||||||||||||||||
Pay limit (oz/t) | 0.43 | 0.40 | 0.60 | 0.21 | 0.007 | |||||||||||||||
Pay limit (g/t) | 14.90 | 13.85 | 20.57 | 7.27 | 0.225 | |||||||||||||||
Recovered grade (oz/t) | 0.167 | 0.197 | 0.273 | 0.097 | 0.015 | |||||||||||||||
Recovered grade (g/t) | 5.73 | 6.74 | 9.36 | 3.32 | 0.53 | |||||||||||||||
Gold production (000 oz) | 158 | 336 | 247 | 124 | 164 | |||||||||||||||
Total cash costs ($/oz)(1) | 791 | 408 | 421 | 718 | 378 | |||||||||||||||
Total production costs ($/oz)(1) | 994 | 598 | 749 | 766 | 390 | |||||||||||||||
Capital expenditure ($ million) | 24 | 58 | 104 | 17 | 3 | |||||||||||||||
Employees(2) | 4,612 | 5,612 | 4,334 | 2,700 | 228 | |||||||||||||||
Outside contractors(2) | 127 | 447 | 1,735 | 414 | 6 | |||||||||||||||
All injury frequency rate | 17.51 | 22.71 | 28.82 | 26.39 | 9.10 | |||||||||||||||
2008 | ||||||||||||||||||||
Pay limit (oz/t) | 0.29 | 0.32 | 0.69 | 0.17 | 0.007 | |||||||||||||||
Pay limit (g/t) | 10.07 | 11.07 | 23.51 | 5.70 | 0.206 | |||||||||||||||
Recovered grade (oz/t) | 0.214 | 0.199 | 0.271 | 0.104 | 0.011 | |||||||||||||||
Recovered grade (g/t) | 7.33 | 6.82 | 9.31 | 3.58 | 0.36 | |||||||||||||||
Gold production (000 oz) | 330 | 362 | 192 | 143 | 92 | |||||||||||||||
Total cash costs ($/oz)(1) | 458 | 348 | 375 | 524 | 446 | |||||||||||||||
Total production costs ($/oz)(1) | 564 | 500 | 641 | 720 | 478 | |||||||||||||||
Capital expenditure ($ million) | 26 | 47 | 89 | 18 | 1 | |||||||||||||||
Employees(2) | 5,472 | 5,620 | 2,914 | 2,650 | 227 | |||||||||||||||
Outside contractors(2) | 271 | 411 | 1,823 | 384 | 7 | |||||||||||||||
All injury frequency rate | 28.54 | 25.29 | 38.24 | 33.92 | 11.80 | |||||||||||||||
2010 | 2009 | 2008 | ||||||||||
Pay limit (lb/t) | 0.316 | 0.362 | 0.331 | |||||||||
Pay limit (g/t) | 0.143 | 0.164 | 0.150 | |||||||||
Recovered grade (lb/t) | 0.622 | 0.584 | 0.508 | |||||||||
Recovered grade (g/t) | 0.282 | 0.265 | 0.231 | |||||||||
Uranium production (000lbs) | 1,462 | 1,442 | 1,283 | |||||||||
Capital expenditure ($ million) | 12 | 5 | 6 | |||||||||
Employees(2) | 185 | 194 | 193 | |||||||||
Contractors(2) | 28 | 27 | 36 | |||||||||
(1) | Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”. | |
(2) | Average for the year. | |
(3) | Tau Lekoa was sold effective August 1, 2010. |
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• | Triest Training Centre; | |
• | Matlosana Hospice; | |
• | Evannah Old Age Home; | |
• | Dipapeng Disability Centre; | |
• | Klerksdorp Baby House; and | |
• | Stilfontein Welfare. |
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• | removing people from risk; | |
• | planning work; and | |
• | managing behavior. |
• | Stilfontein and Jouberton Anglican Church, specifically for the care of the elderly; | |
• | Kanana soup kitchen; | |
• | Bosasa Youth Development Centre; | |
• | Hoërskool Schoonspruit, a local high school; | |
• | SPCA; | |
• | Triest Training Centre; and | |
• | Youth Eagle Christian United Movement. |
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• | Vaal River Gold: Kopanang Gold Plant, West Gold Plant, East Gold and Archive Plant and Vaal River Tailings; | |
• | Vaal River Uranium: Noligwa Gold Plant, Mispah Plant, South Uranium Plant and Nufcor; | |
• | West Wits Metallurgy: Mponeng Plant (including a backfill plant), Savuka Plant, West Wits Tailings; and | |
• | Vaal River and West Wits Chemical Laboratories. |
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• | relining the No.2 Barren dam at South Uranium plant; | |
• | construction of lined areas and bund walls at Noligwa Gold plant to manage clean and dirty water; | |
• | construction of lined areas and bund walls at East Gold Acid Float (EGAF) plant to manage clean and dirty water; | |
• | lining of the process water trench from EGAF plant to Central Spillage; and | |
• | cleaning historical pyrite spills outside the Noligwa Gold plant. |
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• | West Wits operations |
Mponeng | Savuka | TauTona | ||||||||||
2010 | ||||||||||||
Pay limit (oz/t) | 0.28 | 0.56 | 0.60 | |||||||||
Pay limit (g/t) | 9.14 | 17.86 | 19.27 | |||||||||
Recovered grade (oz/t) | 0.276 | 0.155 | 02.04 | |||||||||
Recovered grade (g/t) | 9.48 | 5.30 | 7.01 | |||||||||
Gold production (000 oz) | 532 | 22 | 259 | |||||||||
Total cash costs ($/oz)(1) | 452 | 1,136 | 699 | |||||||||
Total production costs ($/oz)(1) | 580 | 1,409 | 996 | |||||||||
Capital expenditure ($ million) | 122 | 9 | 75 | |||||||||
Employees(2) | 5,732 | 952 | 4,137 | |||||||||
Outside contractors(2) | 46 | 29 | 472 | |||||||||
All injury frequency rate | 15.93 | 7.69 | 19.03 | |||||||||
2009 | ||||||||||||
Pay limit (oz/t) | 0.25 | 0.78 | 0.74 | |||||||||
Pay limit (g/t) | 8.53 | 26.74 | 25.33 | |||||||||
Recovered grade (oz/t) | 0.253 | 0.159 | 0.213 | |||||||||
Recovered grade (g/t) | 8.66 | 5.45 | 7.29 | |||||||||
Gold production (000 oz) | 520 | 30 | 218 | |||||||||
Total cash costs ($/oz)(1) | 331 | 1,133 | 532 | |||||||||
Total production costs ($/oz)(1) | 404 | 1,400 | 766 | |||||||||
Capital expenditure ($ million) | 109 | 13 | 57 | |||||||||
Employees(2) | 5,926 | 1,019 | 3,842 | |||||||||
Outside contractors(2) | 103 | 35 | 451 | |||||||||
All injury frequency rate | 14.31 | 13.23 | 15.84 | |||||||||
2008 | ||||||||||||
Pay limit (oz/t) | 0.22 | 0.43 | 0.44 | |||||||||
Pay limit (g/t) | 7.61 | 14.91 | 15.05 | |||||||||
Recovered grade (oz/t) | 0.292 | 0.183 | 0.253 | |||||||||
Recovered grade (g/t) | 10.02 | 6.28 | 8.66 | |||||||||
Gold production (000 oz) | 600 | 66 | 314 | |||||||||
Total cash costs ($/oz)(1) | 248 | 424 | 373 | |||||||||
Total production costs ($/oz)(1) | 327 | 515 | 519 | |||||||||
Capital expenditure ($ million) | 86 | 11 | 60 | |||||||||
Employees(2) | 5,482 | 1,179 | 3,849 | |||||||||
Outside contractors(2) | 203 | 45 | 774 | |||||||||
All injury frequency rate | 14.29 | 19.82 | 19.00 | |||||||||
(1) | Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs” | |
(2) | Average for the year. |
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• | Coordinating and hosting International Literacy Day with partners including the Mining Qualification Authority, the National Union of Mineworkers and other mining companies in the region. The event included more than 3,000 ABET learners, staff, representatives from the Department of Labor and other stakeholders; |
• | Providing learners with the opportunity to study for the national diploma (N1 and N2) courses at Wescol College; and |
• | Planning a library and resource centre for both AngloGold Ashanti’s ABET learners and members of the general community. This library will be an electronic learning centre. |
• | Winnie the Pooh Nursery School, Greenspark: shelter for the school’s sandpit, provision of storage space, new tables, chairs and mattresses, a sustainable vegetable garden to feed children and sell surplus produce to the community to supplement funds; | |
• | Old age centre, Greenspark: construction of shaded areas and provision of food parcels; | |
• | Nursery School, Kokosi: provision of coats for school children during the winter months; | |
• | Fochville Service centre: provision of food parcels; | |
• | Welfare, Fochville: hosting a Christmas party and presents; and | |
• | Fochville and Losberg Primary Schools, Fochville: provision of stationery for learners and other outreach projects. |
• | Hydrological and waste assessments — the purchasing and installation of flumes and flow meters in the east and west trenches to measure clean storm water discharge; |
• | Completion of a legal compliance audit and a polychlorinated biphenyls (PCB) assessment. (PCBs are a group of synthetic oil-like chemicals of the organochlorine family which have been shown to possess carcinogenic properties and damage reproductive, neurological and immune systems of wildlife and humans); | |
• | Coating and sealing of concrete-lined washing bays and waste transferring stations; | |
• | Collection and disposal of asbestos waste; | |
• | Eradication of alien and invader vegetation; | |
• | Purchasing of high pressure cleaners; and |
• | Sampling and analysis of water discharge to demonstrate continual improvement in monitoring and managing process water. An ISO 14001 first advancement assessment audit was conducted at Mponeng in August 2010, with the mine retaining its accreditation. No reportable environmental incidents were recorded during the year. |
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• | Carletonville Home Based Centre; | |
• | Avondgloor Old Age Home; | |
• | Suid-Afrikaanse Vroue Federasie (SAVF); and | |
• | Timber Twig Pre-Primary School. |
• | Upgrading of the waste separation area to improve waste handling and storage, thereby improving recycling capacity; |
• | The cleanup and removal of steel and redundant equipment which formed part of the backfill testing plant, in order to reduce the size of the mine’s footprint; and |
• | Relocation of the internal mine store and equipment from the ESKOM servitude, bringing TauTona in line with safety and legal requirements on power cabling running through the mine area. |
Additional focus areas with regard to environmental aspects included: |
• | Minimizing refrigeration gasses (R134a and R11) that are used in the refrigeration plants as refrigerant to supply cooling power to underground workings; |
• | Management of hazardous material and waste, specifically hydrocarbons, chemicals and fluorescent tube light bulbs; | |
• | The management of clean and dirty water at TauTona; and | |
• | Water and electricity usage. |
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• | Iduapriem and Obuasi in Ghana; | |
• | Siguiri in Guinea; | |
• | Morila, Sadiola and Yatela in Mali; | |
• | Navachab in Namibia; and | |
• | Geita in Tanzania. |
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OBUASI | ||||||||||||||||
Sulfide Treatment | Tailings Treatment | Oxide Treatment | IDUAPRIEM | |||||||||||||
Plant | Plant | Plant | PLANT | |||||||||||||
Capacity (000 tonnes/month) | 200 | 200 | 150 | 375 |
2010 | 2009 | 2008 | ||||||||||
Pay limit (oz/t) | 0.04 | 0.04 | 0.04 | |||||||||
Pay limit (g/t) | 1.47 | 1.45 | 1.43 | |||||||||
Recovered grade (oz/t) | 0.050 | 0.050 | 0.051 | |||||||||
Recovered grade (g/t) | 1.70 | 1.72 | 1.76 | |||||||||
Gold production (000 oz) 100 percent | 185 | 190 | 200 | |||||||||
Total cash costs ($/oz)(1) | 778 | 658 | 625 | |||||||||
Total production costs ($/oz)(1) | 1,027 | 795 | 740 | |||||||||
Capital expenditure ($ million) 100 percent | 17 | 28 | 54 | |||||||||
Employees(2) | 729 | 727 | 732 | |||||||||
Outside contractors(2) | 754 | 720 | 1,048 | |||||||||
All injury frequency rate | 9.73 | 12.26 | 13.95 |
(1) | Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”. | |
(2) | Average for the period. |
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• | quartz veins which consist mainly of quartz with free gold in association with lesser amounts of various metal sulfides such as iron, zinc, lead and copper. The gold particles are generally fine-grained and occasionally are visible to the naked eye. This ore type is generally non-refractory; and | |
• | sulfide ore which is characterized by the inclusion of gold in the crystal structure of a sulfide material. The gold in these ores is fine-grained and often locked in arsenopyrite. Higher gold grades tend to be associated with finer grained arsenopyrite crystals. Other prominent minerals include quartz, chlorite and sericite. Sulfide ore is generally refractory. |
2010 | 2009 | 2008 | ||||||||||
Pay limit (oz/t)(1) | 0.19 | 0.21 | 0.29 | |||||||||
Pay limit (g/t) | 6.60 | 7.26 | 9.35 | |||||||||
Recovered grade (oz/t)(1) | 0.150 | 0.151 | 0.127 | |||||||||
Recovered grade (g/t) | 5.16 | 5.18 | 4.37 | |||||||||
Gold production (000 oz) | 317 | 381 | 357 | |||||||||
Total cash costs ($/oz)(2) | 760 | 630 | 636 | |||||||||
Total production costs ($/oz)(2) | 1,003 | 848 | 863 | |||||||||
Capital expenditure ($ million) | 109 | 94 | 112 | |||||||||
Employees(3) | 4,225 | 4,408 | 4,259 | |||||||||
Outside contractors(3) | 1,497 | 1,351 | 1,463 | |||||||||
All injury frequency rate | 2.86 | 4.73 | 6.36 |
(1) | Pay limits and recovered grade refer to underground ore resources. | |
(2) | Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”. | |
(3) | Average for the period. |
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• | laterite or CAP mineralization which occurs as aprons of colluvial or as palaeo-channels of alluvial lateritic gravel adjacent to, and immediately above; and | |
• | in situ quartz-vein related mineralization hosted in meta-sediments with the better mineralization associated with vein stockworks that occurs preferentially in the coarser, brittle siltstones and sandstones. |
2010 | 2009 | 2008 | ||||||||||
Pay limit (oz/t) | 0.02 | 0.02 | 0.03 | |||||||||
Pay limit (g/t) | 0.66 | 0.71 | 0.93 | |||||||||
Recovered grade (oz/t) | 0.028 | 0.032 | 0.035 | |||||||||
Recovered grade (g/t) | 0.97 | 1.11 | 1.20 | |||||||||
Gold production (000 oz) — 100 percent | 321 | 372 | 392 | |||||||||
Gold production (000 oz) — 85 percent | 273 | 316 | 333 | |||||||||
Total cash costs ($/oz)(1) | 656 | 513 | 468 | |||||||||
Total production costs ($/oz)(1) | 733 | 601 | 565 | |||||||||
Capital expenditure ($ million) — 100 percent | 12 | 26 | 22 | |||||||||
Capital expenditure ($ million) — 85 percent | 10 | 22 | 18 | |||||||||
Employees(2) | 1,531 | 1,492 | 1,489 | |||||||||
Outside contractors(2) | 1,639 | 1,481 | 1,444 | |||||||||
All injury frequency rate | 6.15 | 5.54 | 9.42 |
(1) | Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”. | |
(2) | Average for the period. |
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• | provide direction for the short- and long-term development of the mine; | |
• | address the 30 million tonnes a year treatment of saprolite ore from areas to the northwest and southeast of the current pits, as well as the overlying cap rock in those areas and the transitional and hard oxide deposits below the existing pits; and | |
• | conduct mining scenarios to provide cut-off grades that will feed into blue sky exploration drilling programs. |
• | health post (Kourouda); | |
• | Great Mosque of Kintinian; | |
• | Arabic school of Kintinian; | |
• | upgrading of rural roads within and between villages; | |
• | water drainage systems; | |
• | water boreholes; and | |
• | renovation of Siguiri Central police station and the airport. |
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2010 | 2009 | 2008 | ||||||||||
Pay limit (oz/t) | 0.02 | 0.04 | 0.06 | |||||||||
Pay limit (g/t) | 0.67 | 1.21 | 2.17 | |||||||||
Recovered grade (oz/t) | 0.050 | 0.072 | 0.090 | |||||||||
Recovered grade (g/t) | 1.70 | 2.47 | 3.08 | |||||||||
Gold production (000 oz) 100 percent | 238 | 342 | 425 | |||||||||
Gold production (000 oz) 40 percent | 95 | 137 | 170 | |||||||||
Total cash costs ($/oz)(1) | 716 | 526 | 424 | |||||||||
Total production costs ($/oz)(1) | 768 | 577 | 500 | |||||||||
Capital expenditure ($ million) 100 percent | 3 | 10 | 3 | |||||||||
Capital expenditure ($ million) 40 percent | 1 | 4 | 1 | |||||||||
Employees(2) | 476 | 518 | 605 | |||||||||
Outside contractors(2) | 415 | 535 | 1,098 |
(1) | Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”. | |
(2) | Average for the year. |
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2010 | 2009 | 2008 | ||||||||||
Pay limit (oz/t) | 0.04 | 0.04 | 0.07 | |||||||||
Pay limit (g/t) | 1.28 | 1.46 | 2.18 | |||||||||
Recovered grade (oz/t) | 0.060 | 0.074 | 0.100 | |||||||||
Recovered grade (g/t) | 2.04 | 2.52 | 3.42 | |||||||||
Gold production (000 oz) 100 percent | 287 | 354 | 453 | |||||||||
Gold production (000 oz) 41 percent(1) | 118 | 135 | 172 | |||||||||
Total cash costs ($/oz)(2) | 686 | 489 | 401 | |||||||||
Total production costs ($/oz)(2) | 737 | 585 | 587 | |||||||||
Capital expenditure ($ million) 100 percent | 20 | 10 | 8 | |||||||||
Capital expenditure ($ million) 41 percent(1) | 8 | 4 | 3 | |||||||||
Employees(3) | 790 | 705 | 634 | |||||||||
Outside contractors(3) | 981 | 827 | 876 | |||||||||
All injury frequency rate | 1.65 | 2.31 | 4.37 |
(1) | Effective December 29, 2009, the company increased its interest from 38 percent to 41 percent. | |
(2) | Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs” | |
(3) | Average for the year. |
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2010 | 2009 | 2008 | ||||||||||
Pay limit (oz/t) | 0.01 | 0.04 | 0.04 | |||||||||
Pay limit (g/t) | 0.45 | 1.52 | 1.34 | |||||||||
Recovered grade (oz/t) | 0.036 | 0.106 | 0.078 | |||||||||
Recovered grade (g/t) | 1.23 | 3.62 | 2.66 | |||||||||
Gold production (000 oz) 100 percent | 150 | 222 | 165 | |||||||||
Gold production (000 oz) 40 percent | 60 | 89 | 66 | |||||||||
Total cash costs ($/oz)(1) | 817 | 326 | 621 | |||||||||
Total production costs ($/oz)(1) | 883 | 416 | 636 | |||||||||
Capital expenditure ($ million) 100 percent | 5 | 3 | 8 | |||||||||
Capital expenditure ($ million) 40 percent | 2 | 1 | 3 | |||||||||
Employees(2) | 308 | 298 | 305 | |||||||||
Outside contractors(2) | 570 | 505 | 583 | |||||||||
All injury frequency rate | 2.28 | 5.54 | 6.13 |
(1) | Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”. | |
(2) | Average for the year. |
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Operating and production data for Navachab |
2010 | 2009 | 2008 | ||||||||||
Pay limit (oz/t) | 0.07 | 0.051 | 0.04 | |||||||||
Pay limit (g/t) | 2.53 | 1.55 | 1.29 | |||||||||
Recovered grade (oz/t) | 0.052 | 0.046 | 0.042 | |||||||||
Recovered grade (g/t) | 1.80 | 1.58 | 1.43 | |||||||||
Gold production (000 oz) | 86 | 65 | 68 | |||||||||
Total cash costs ($/oz)(1) | 721 | 677 | 559 | |||||||||
Total production costs ($/oz)(1) | 779 | 723 | 632 | |||||||||
Capital expenditure ($ million) | 14 | 20 | 12 | |||||||||
Employees(2) | 687 | 578 | 482 | |||||||||
Outside contractors(2) | — | — | — | |||||||||
All injury frequency rate | 25.60 | 26.30 | 20.63 |
(1) | Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”. | |
(2) | Average for the year. |
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2010 | 2009 | 2008 | ||||||||||
Pay limit (oz/t) | 0.07 | 0.09 | 0.10 | |||||||||
Pay limit (g/t) | 2.38 | 3.08 | 3.10 | |||||||||
Recovered grade (oz/t) | 0.069 | 0.055 | 0.056 | |||||||||
Recovered grade (g/t) | 2.36 | 1.89 | 1.92 | |||||||||
Gold production (000 oz) | 357 | 272 | 264 | |||||||||
Total cash costs ($/oz)(1) | 697 | 985 | 814 | |||||||||
Total production costs ($/oz)(1) | 874 | 1,191 | 1,004 | |||||||||
Capital expenditure ($ million) | 38 | 19 | 53 | |||||||||
Employees(2) | 1,874 | 1,990 | 2,130 | |||||||||
Outside contractors(2) | 1,391 | 1,196 | 986 | |||||||||
All injury frequency rate | 5.38 | 5.56 | 8.52 |
(1) | Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”. | |
(2) | Average for the year. |
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2010 | 2009 | 2008 | ||||||||||
Pay limit (oz/t) | 0.14 | 0.08 | 0.09 | |||||||||
Pay limit (g/t) | 4.32 | 2.45 | 2.79 | |||||||||
Recovered grade (oz/t)(2) | 0.094 | 0.084 | 0.101 | |||||||||
Recovered grade (g/t)(2) | 3.22 | 2.87 | 3.46 | |||||||||
Gold production (000 oz) | 396 | 401 | 433 | |||||||||
Total cash costs ($/oz)(1) | 692 | 631 | 559 | |||||||||
Total production costs ($/oz)(1) | 773 | 738 | 665 | |||||||||
Capital expenditure ($ million) | 29 | 31 | 19 | |||||||||
Employees(3) | 93 | 99 | 77 | |||||||||
Outside contractors(3) | 401 | 356 | 333 | |||||||||
All injury frequency rate | 13.65 | 8.94 | 15.85 | |||||||||
(1) | Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”. | |
(2) | Open-pit operations. | |
(3) | Average for the year. |
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Gold plants | ||||
Capacity (000 tonnes/month) | ||||
- crushed ore production | 1,739 | |||
- total ore production | 1,796 | |||
- solution processed | 2,371 | |||
2010 | 2009 | 2008(3) | ||||||||||
Pay limit (oz/t) | 0.007 | 0.005 | 0.01 | |||||||||
Pay limit (g/t) | 0.23 | 0.17 | 0.34 | |||||||||
Recovered grade (oz/t) | 0.013 | 0.013 | 0.014 | |||||||||
Recovered grade (g/t) | 0.43 | 0.46 | 0.49 | |||||||||
Gold production (000 oz) | 233 | 218 | 258 | |||||||||
Total cash costs ($/oz)(1) | 500 | 371 | 310 | |||||||||
Total production costs ($/oz)(1) | 901 | 743 | 643 | |||||||||
Capital expenditure ($ million) | 73 | 87 | 27 | |||||||||
Employees(2) | 403 | 367 | 350 | |||||||||
Outside contractors | 243 | 195 | 71 | |||||||||
All injury frequency rate | 12.26 | 15.80 | 30.19 |
(1) | Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”. | |
(2) | Average for the year. | |
(3) | Remaining 33 percent shareholding acquired effective July 1, 2008. |
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2010 | 2009 | 2008 | ||||||||||
Pay limit (oz/t) | 0.13 | 0.12 | 0.19 | |||||||||
Pay limit (g/t) | 4.36 | 4.17 | 6.39 | |||||||||
Recovered grade (oz/t) | 0.178 | 0.190 | 0.159 | |||||||||
Recovered grade (g/t) | 6.11 | 6.51 | 5.44 | |||||||||
Gold production (000 oz) 100 percent | 209 | 208 | 166 | |||||||||
Gold production (000 oz) 92.50 percent | 194 | 192 | 154 | |||||||||
Silver production (000 oz) 100 percent | 2.8 | 2.2 | 1.7 | |||||||||
Silver production (000 oz) 92.50 percent | 2.6 | 2.0 | 1.6 | |||||||||
Total cash costs ($/oz)(1) | 366 | 359 | 617 | |||||||||
Total production costs ($/oz)(1) | 521 | 495 | 747 | |||||||||
Capital expenditure ($ million) 100 percent | 41 | 18 | 16 | |||||||||
Capital expenditure ($ million) 92.50 percent | 38 | 17 | 15 | |||||||||
Employees(2) | 883 | 753 | 756 | |||||||||
Outside contractors(2) | 359 | 316 | 316 | |||||||||
All injury frequency rate | 8.08 | 9.34 | 9.72 | |||||||||
(1) | Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”. | |
(2) | Average for the year. |
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AngloGold Ashanti Mineração | ||||||||||||
Cuiabá | Raposos | Serra Grande | ||||||||||
Gold plants Capacity (000 tonnes/month) | 135 | 26 | 66 |
2010 | 2009 | 2008 | ||||||||||
Pay limit (oz/t) | 0.13 | 0.08 | 0.15 | |||||||||
Pay limit (g/t) | 4.40 | 2.69 | 5.16 | |||||||||
Recovered grade (oz/t)(1) | 0.210 | 0.205 | 0.222 | |||||||||
Recovered grade (g/t)(1) | 7.21 | 7.02 | 7.62 | |||||||||
Gold production (000 oz) | 338 | 329 | 320 | |||||||||
Total cash costs ($/oz)(2) | 444 | 347 | 322 | |||||||||
Total production costs ($/oz)(2) | 683 | 492 | 450 | |||||||||
Capital expenditure ($ million) | 142 | 84 | 69 | |||||||||
Employees(3) | 2,486 | 2,249 | 1,954 | |||||||||
Outside contractors(3) | 940 | 715 | 1,033 | |||||||||
All injury frequency rate | 2.62 | 4.19 | 5.79 |
(1) | Recovered grade represents underground operations. | |
(2) | Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A. Operating results — Total cash costs and total production costs”. | |
(3) | Average for the year. |
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2010 | 2009 | 2008 | ||||||||||
Pay limit (oz/t) | 0.09 | 0.11 | 0.11 | |||||||||
Pay limit (g/t) | 3.20 | 3.92 | 3.91 | |||||||||
Recovered grade (oz/t) | 0.118 | 0.132 | 0.200 | |||||||||
Recovered grade (g/t) | 4.05 | 4.52 | 6.85 | |||||||||
Gold production (000 oz) 100 percent | 155 | 154 | 174 | |||||||||
Gold production (000 oz) 50 percent | 77 | 77 | 87 | |||||||||
Total cash costs ($/oz)(1) | 481 | 429 | 299 | |||||||||
Total production costs ($/oz)(1) | 688 | 571 | 402 | |||||||||
Capital expenditure ($ million) 100 percent | 52 | 67 | 41 | |||||||||
Capital expenditure ($ million) 50 percent | 26 | 33 | 20 | |||||||||
Employees(2) | 965 | 864 | 725 | |||||||||
Outside contractors(2) | 303 | 425 | 383 | |||||||||
All injury frequency rate (per million hours worked) | 7.22 | 8.99 | 13.34 | |||||||||
(1) | Total cash costs and total production costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A.: Operating results — Total cash costs and total production costs”. | |
(2) | Average for the year. |
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2010 | 2010 | 2009 | ||||||||||||||
(3 year | (Business | (3 year | ||||||||||||||
average) | Plan) | average) | Units | |||||||||||||
Reserve Gold Price | 1,015 | 850 | 840 | US$/oz | ||||||||||||
Exchange Rate — South Africa | 8.00 | 8.71 | 7.90 | ZAR/US$ | ||||||||||||
Reserve Gold Price (South African rand per ounce) | 8,120 | 7,404 | 6,636 | ZAR/oz | ||||||||||||
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Ore Reserve | Million oz | |||||
Ore Reserves as at December 31, 2009 | 68.3 | |||||
Sale of Tau Lekoa | 0.2 | |||||
Restated 2009 Ore Reserves | 68.1 | |||||
Reductions | ||||||
Geita | Depletion and model changes | (0.9 | ) | |||
Obuasi | Depletions and refinements to Ore Reserve estimation | (0.7 | ) | |||
Siguiri | Remodeling in accordance with reconciliation and depletion | (0.7 | ) | |||
TauTona | Depletion and transfers to Mponeng, minor model changes | (0.7 | ) | |||
Other | Total of non-significant changes | (1.2 | ) | |||
Additions | ||||||
CC&V | Addition from Mine Life Extension Project | 1.4 | ||||
Mponeng | Successful conversion drilling and minor transfers from TauTona and Savuka | 1.2 | ||||
Tropicana | Tropicana Project reserve incorporated | 1.1 | ||||
Sadiola | Additions from the Deep Sulfide project | 0.8 | ||||
Other | Total of non-significant changes | 2.8 | ||||
Ore Reserves as at December 31, 2010 | 71.2 | |||||
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• | Geita | |
• | Obuasi | |
• | Siguiri | |
• | Sunrise Dam — Underground | |
• | Cripple Creek and Victor | |
• | Cerro Vanguardia | |
• | Serra Grande | |
• | AGA Mineração — Cuiabá |
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Ore Reserves: Imperial | At December 31, 2010 | |||||||||||||||||||||||||||
Proven Ore Reserves(1) | Probable Ore Reserves(1)(2) | |||||||||||||||||||||||||||
Gold | Gold | Metallurgical | ||||||||||||||||||||||||||
Tons(5) | Grade Content(1) | Tons(5) | Grade Content(1) | Recovery Factor | ||||||||||||||||||||||||
(mill) | (oz/ton) | (mill oz) | (mill) | (oz/ton) | (mill oz) | percent | ||||||||||||||||||||||
South Africa | ||||||||||||||||||||||||||||
Vaal River(6) | ||||||||||||||||||||||||||||
Great Noligwa | 4.44 | 0.225 | 1.00 | 1.98 | 0.210 | 0.42 | 96.0 | |||||||||||||||||||||
Kopanang | 1.37 | 0.230 | 0.31 | 14.71 | 0.190 | 2.79 | 95.6 | |||||||||||||||||||||
Moab Khotsong(2) | 2.03 | 0.305 | 0.62 | 18.57 | 0.370 | 6.87 | 95.4-95.6 | (4) | ||||||||||||||||||||
West Wits | ||||||||||||||||||||||||||||
Mponeng(2) | 4.58 | 0.234 | 1.07 | 43.96 | 0.292 | 12.83 | 97.4-98.2 | (4) | ||||||||||||||||||||
Savuka | 0.09 | 0.147 | 0.01 | 3.60 | 0.181 | 0.65 | 97.0 | |||||||||||||||||||||
TauTona(2) | 0.75 | 0.226 | 0.17 | 7.01 | 0.269 | 1.89 | 97.2 | |||||||||||||||||||||
Surface | ||||||||||||||||||||||||||||
Surface sources | — | — | — | 121.79 | 0.014 | 1.74 | 40-88 | (4) | ||||||||||||||||||||
Continental Africa | ||||||||||||||||||||||||||||
Democratic Republic of Congo | ||||||||||||||||||||||||||||
Kibali (45 percent)(3) | — | — | — | 36.86 | 0.123 | 4.52 | 84.5; 91.3 | (10) | ||||||||||||||||||||
Ghana | ||||||||||||||||||||||||||||
Iduapriem | 32.21 | 0.039 | 1.26 | 27.23 | 0.045 | 1.24 | 95.0 | |||||||||||||||||||||
Obuasi(2) | 16.30 | 0.195 | 3.18 | 27.12 | 0.212 | 5.75 | 85.0 | |||||||||||||||||||||
Guinea | ||||||||||||||||||||||||||||
Siguiri (85 percent)(3) | 43.05 | 0.018 | 0.78 | 74.34 | 0.021 | 1.60 | 90-95 | (4) | ||||||||||||||||||||
Mali | ||||||||||||||||||||||||||||
Morila (40 percent)(3) | 2.59 | 0.049 | 0.13 | 2.95 | 0.033 | 0.10 | 89.0 | |||||||||||||||||||||
Sadiola (41 percent)(3) | 2.57 | 0.086 | 0.22 | 38.88 | 0.053 | 2.08 | 76-96 | (4) | ||||||||||||||||||||
Yatela (40 percent)(3) | 0.31 | 0.023 | 0.01 | 1.36 | 0.052 | 0.07 | 75-85 | (4) | ||||||||||||||||||||
Namibia | ||||||||||||||||||||||||||||
Navachab | 15.73 | 0.030 | 0.47 | 32.78 | 0.042 | 1.38 | 69.5 : 86.5 | (9) | ||||||||||||||||||||
Tanzania | ||||||||||||||||||||||||||||
Geita | — | — | — | 45.10 | 0.093 | 4.21 | 46-89 | (4) | ||||||||||||||||||||
Australasia | ||||||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||||||
Sunrise Dam(3) | 7.93 | 0.050 | 0.40 | 7.38 | 0.133 | 0.98 | 85.5-86 | (4) | ||||||||||||||||||||
Tropicana (70 percent)(3) | 18.57 | 0.066 | 1.23 | 18.41 | 0.062 | 1.13 | 90.3 | |||||||||||||||||||||
Americas | ||||||||||||||||||||||||||||
Argentina | ||||||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent)(3)(7) | 10.51 | 0.036 | 0.37 | 9.45 | 0.155 | 1.47 | 95.0 | |||||||||||||||||||||
Brazil | ||||||||||||||||||||||||||||
AGA Mineraçáo(2)(8) | 5.45 | 0.197 | 1.07 | 6.70 | 0.160 | 1.07 | 93.0 | |||||||||||||||||||||
Serra Grande (50 percent)(3) | 2.17 | 0.100 | 0.22 | 1.45 | 0.121 | 0.18 | 90.9-94.9 | (4) | ||||||||||||||||||||
United States of America | ||||||||||||||||||||||||||||
Cripple Creek & Victor | 162.25 | 0.024 | 3.84 | 86.81 | 0.022 | 1.89 | 43-95 | (4) | ||||||||||||||||||||
Total | 332.90 | 0.049 | 16.34 | 628.45 | 0.087 | 54.86 | ||||||||||||||||||||||
(1) | Ore Reserves include marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining. | |
(2) | Probable Ore Reserves include Ore Reserves below infrastructure. See table below. | |
(3) | Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown. | |
(4) | Recovery factor varies according to ore type. | |
(5) | Tons refers to a short ton, which is equivalent to 2000lbs avoirdupois. | |
(6) | The Vaal Reef Ore Reserves include 47.6 million pounds of Uranium oxide by-products; this cannot be accounted for by individual mine as Great Noligwa, Kopanang and Moab Khotsong feed to a combination of plants. | |
(7) | The Ore Reserve contains 34.6 million ounces of silver to be recovered as a by-product. | |
(8) | The Ore Reserve contains 0.49 million tons of sulfur to be recovered as a by-product. | |
(9) | DMS plant and CIP plant, respectively. | |
(10) | Open pit and underground mining, respectively. | |
Rounding may result in computational differences. |
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Gold Content | ||||||||||||
Mine | Tons (millions) | Grade (ounces/ton) | (million ounces) | |||||||||
Mponeng | 34.06 | 0.311 | 10.58 | |||||||||
Moab Khotsong | 11.47 | 0.366 | 4.19 | |||||||||
Obuasi | 2.99 | 0.381 | 1.14 | |||||||||
AGA Mineração | 3.54 | 0.172 | 0.61 | |||||||||
Total | 52.06 | 0.317 | 16.53 | |||||||||
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Ore Reserves: Imperial | At December 31, 2009 | |||||||||||||||||||||||||||
Proven Ore Reserves(1) | Probable Ore Reserves(1)(2) | Metallurgical | ||||||||||||||||||||||||||
Gold | Gold | |||||||||||||||||||||||||||
Tons(5) | Grade Content(1) | Tons(5) | Grade Content(1) | Recovery Factor | ||||||||||||||||||||||||
(mill) | (oz/ton) | (mill oz) | (mill) | (oz/ton) | (mill oz) | percent | ||||||||||||||||||||||
South Africa | ||||||||||||||||||||||||||||
Vaal River(6) | ||||||||||||||||||||||||||||
Great Noligwa | 4.03 | 0.226 | 0.91 | 3.35 | 0.206 | 0.69 | 96.3 | |||||||||||||||||||||
Kopanang | 1.08 | 0.202 | 0.22 | 18.64 | 0.166 | 3.10 | 97.5 | |||||||||||||||||||||
Moab Khotsong(2) | 1.29 | 0.305 | 0.39 | 20.51 | 0.328 | 6.74 | 94.6-97.1 | (4) | ||||||||||||||||||||
Tau Lekoa | 0.66 | 0.116 | 0.08 | 0.76 | 0.116 | 0.09 | 97.4 | |||||||||||||||||||||
West Wits | ||||||||||||||||||||||||||||
Mponeng(2) | 2.45 | 0.241 | 0.59 | 39.46 | 0.307 | 12.12 | 98.0-98.5 | (4) | ||||||||||||||||||||
Savuka | 0.13 | 0.156 | 0.02 | 3.26 | 0.182 | 0.59 | 97.3 | |||||||||||||||||||||
TauTona(2) | 0.37 | 0.345 | 0.13 | 9.58 | 0.272 | 2.60 | 97.8 | |||||||||||||||||||||
Surface | ||||||||||||||||||||||||||||
Surface sources | — | — | — | 128.22 | 0.015 | 1.88 | 48 — 91 | (4) | ||||||||||||||||||||
Continental Africa | ||||||||||||||||||||||||||||
Democratic Republic of Congo | ||||||||||||||||||||||||||||
Kibali (45 percent)(3) | — | — | — | 31.65 | 0.131 | 4.14 | 84.5: 91.3 | (9) | ||||||||||||||||||||
Ghana | ||||||||||||||||||||||||||||
Iduapriem | 29.06 | 0.040 | 1.16 | 25.59 | 0.048 | 1.24 | 95.0 | |||||||||||||||||||||
Obuasi(2) | 15.35 | 0.208 | 3.19 | 30.97 | 0.208 | 6.46 | 35-83 | (4) | ||||||||||||||||||||
Guinea | ||||||||||||||||||||||||||||
Siguiri (85 percent)(3) | 33.98 | 0.019 | 0.63 | 96.84 | 0.025 | 2.44 | 88-93.5 | (4) | ||||||||||||||||||||
Mali | ||||||||||||||||||||||||||||
Morila (40 percent)(3) | 4.34 | 0.051 | 0.22 | 3.05 | 0.033 | 0.10 | 88.9-89 | (4) | ||||||||||||||||||||
Sadiola (41 percent)(3) | 4.52 | 0.072 | 0.33 | 17.86 | 0.063 | 1.13 | 80-100 | (4) | ||||||||||||||||||||
Yatela (40 percent)(3) | 1.33 | 0.033 | 0.04 | — | — | — | 84.8 | |||||||||||||||||||||
Namibia | ||||||||||||||||||||||||||||
Navachab | 10.86 | 0.027 | 0.29 | 35.72 | 0.037 | 1.33 | 88.0 | |||||||||||||||||||||
Tanzania | ||||||||||||||||||||||||||||
Geita | — | — | — | 52.21 | 0.097 | 5.07 | 46.2-89.3 | (4) | ||||||||||||||||||||
Australasia | ||||||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||||||
Sunrise Dam | 9.16 | 0.057 | 0.52 | 10.24 | 0.118 | 1.21 | 85-85.5 | (4) | ||||||||||||||||||||
Americas | ||||||||||||||||||||||||||||
Argentina | ||||||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent)(3)(7) | 11.86 | 0.040 | 0.48 | 10.63 | 0.132 | 1.40 | 95.0 | |||||||||||||||||||||
Brazil | ||||||||||||||||||||||||||||
AGA Mineraçáo(8) | 5.08 | 0.202 | 1.03 | 7.12 | 0.162 | 1.15 | 88 — 93 | (4) | ||||||||||||||||||||
Serra Grande (50 percent)(3) | 2.27 | 0.104 | 0.24 | 0.95 | 0.116 | 0.11 | 90.9-95.9 | (4 | ||||||||||||||||||||
United States of America | ||||||||||||||||||||||||||||
Cripple Creek & Victor | 110.03 | 0.027 | 2.97 | 51.14 | 0.026 | 1.32 | 50 — 77 | (4) | ||||||||||||||||||||
Total | 247.87 | 0.054 | 13.44 | 597.73 | 0.092 | 54.92 | ||||||||||||||||||||||
(1) | Ore Reserves include marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining. | |
(2) | Probable Ore Reserves include Ore Reserves below infrastructure. See table below. | |
(3) | Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown. | |
(4) | Recovery factor varies according to ore type. | |
(5) | Tons refers to a short ton, which is equivalent to 2000lbs avoirdupois. | |
(6) | The Vaal Reef Ore Reserves include 37.29 million pounds of Uranium by-products; this cannot be accounted for by individual mine as Great Noligwa, Kopanang and Moab Khotsong feed to a combination of plants. | |
(7) | The Ore Reserve contains 34.9 million ounces of silver to be recovered as a by-product. | |
(8) | 0.45 million tons of sulfur will be recovered from processing the Ore Reserve. | |
(9) | Open pit and underground mining, respectively. | |
Rounding may result in computational differences. |
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Gold Content | ||||||||||||
Mine | Tons (millions) | Grade (ounces/ton) | (million ounces) | |||||||||
TauTona | 0.53 | 0.406 | 0.22 | |||||||||
Mponeng | 27.58 | 0.345 | 9.53 | |||||||||
Moab Khotsong | 13.05 | 0.302 | 3.94 | |||||||||
Obuasi | 3.64 | 0.383 | 1.40 | |||||||||
AGA Mineração | 4.62 | 0.163 | 0.76 | |||||||||
Total | 49.42 | 0.32 | 15.85 | |||||||||
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Ore Reserves: Metric | At December 31, 2010 | |||||||||||||||||||||||||||
Proven Ore Reserves(1) | Probable Ore Reserves(1)(2) | |||||||||||||||||||||||||||
Tonnes(6) | Grade | Gold | Tonnes | Grade | Gold | Metallurgical | ||||||||||||||||||||||
Content | Content | Recovery factor | ||||||||||||||||||||||||||
(mill) | (g/t) | (tonnes) | (mill) | (g/t) | (tonnes) | percent | ||||||||||||||||||||||
South Africa | ||||||||||||||||||||||||||||
Vaal River(5) | ||||||||||||||||||||||||||||
Great Noligwa | 4.03 | 7.71 | 31.06 | 1.80 | 7.20 | 12.95 | 96.0 | |||||||||||||||||||||
Kopanang | 1.24 | 7.87 | 9.76 | 13.35 | 6.51 | 86.84 | 95.6 | |||||||||||||||||||||
Moab Khotsong(2) | 1.84 | 10.46 | 19.26 | 16.84 | 12.69 | 213.71 | 95.4-95.6 | (4) | ||||||||||||||||||||
West Wits | ||||||||||||||||||||||||||||
Mponeng(2) | 4.15 | 8.01 | 33.27 | 39.88 | 10.01 | 399.19 | 97.4-98.2 | (4) | ||||||||||||||||||||
Savuka | 0.08 | 5.05 | 0.42 | 3.27 | 6.20 | 20.29 | 97.0 | |||||||||||||||||||||
TauTona(2) | 0.68 | 7.73 | 5.29 | 6.36 | 9.23 | 58.66 | 97.2 | |||||||||||||||||||||
Surface | ||||||||||||||||||||||||||||
Surface sources | — | — | — | 110.49 | 0.49 | 54.10 | 40-88 | (4) | ||||||||||||||||||||
Continental Africa | ||||||||||||||||||||||||||||
Democratic Republic of Congo | ||||||||||||||||||||||||||||
Kibali (45 percent)(3) | — | — | — | 33.44 | 4.21 | 4.52 | 84.5: 91.3 | (10) | ||||||||||||||||||||
Ghana | ||||||||||||||||||||||||||||
Iduapriem | 29.22 | 1.34 | 39.09 | 24.70 | 1.56 | 38.49 | 95.0 | |||||||||||||||||||||
Obuasi(2) | 14.79 | 6.68 | 98.76 | 24.60 | 7.27 | 178.79 | 85.0 | |||||||||||||||||||||
Guinea | ||||||||||||||||||||||||||||
Siguiri (85 percent)(3) | 39.05 | 0.62 | 24.38 | 67.44 | 0.74 | 49.71 | 90-95 | (4) | ||||||||||||||||||||
Mali | ||||||||||||||||||||||||||||
Morila (40 percent)(3) | 2.35 | 1.68 | 3.93 | 2.68 | 1.14 | 3.04 | 89.0 | |||||||||||||||||||||
Sadiola (41 percent)(3) | 2.33 | 2.95 | 6.88 | 35.27 | 1.83 | 64.59 | 76-96 | (4) | ||||||||||||||||||||
Yatela (40 percent)(3) | 0.28 | 0.79 | 0.22 | 1.24 | 1.78 | 2.20 | 75-85 | (4) | ||||||||||||||||||||
Namibia | ||||||||||||||||||||||||||||
Navachab | 14.27 | 1.02 | 14.49 | 29.74 | 1.45 | 42.99 | 69.5 : 86.5 | (9) | ||||||||||||||||||||
Tanzania | ||||||||||||||||||||||||||||
Geita | — | — | — | 40.92 | 3.20 | 131.06 | 46-89 | (4) | ||||||||||||||||||||
Australasia | ||||||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||||||
Sunrise Dam | 7.20 | 1.71 | 12.30 | 6.69 | 4.56 | 30.53 | 85.5-86 | (4) | ||||||||||||||||||||
Tropicana (70 percent)(3) | 16.85 | 2.26 | 38.16 | 16.70 | 2.11 | 35.29 | 90.3 | |||||||||||||||||||||
Americas | ||||||||||||||||||||||||||||
Argentina | ||||||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent)(3)(7) | 9.54 | 1.22 | 11.63 | 8.57 | 5.32 | 45.62 | 95.0 | |||||||||||||||||||||
Brazil | ||||||||||||||||||||||||||||
AGA Mineraçáo(8) | 4.94 | 6.74 | 33.34 | 6.08 | 5.50 | 33.41 | 93.0 | |||||||||||||||||||||
Serra Grande (50 percent)(3) | 1.96 | 3.42 | 6.72 | 1.32 | 4.15 | 5.47 | 92.9-94.9 | (4) | ||||||||||||||||||||
United States of America | ||||||||||||||||||||||||||||
Cripple Creek & Victor | 147.19 | 0.81 | 119.37 | 78.76 | 0.75 | 58.76 | 43-95 | (4) | ||||||||||||||||||||
Total | 302.00 | 1.68 | 508.32 | 570.12 | 2.99 | 1,706.39 | ||||||||||||||||||||||
(1) | Ore Reserves include marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining. | |
(2) | Probable Ore Reserves include Ore Reserves below infrastructure. See table below. | |
(3) | Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown. | |
(4) | Recovery factor varies according to ore type. | |
(5) | The Vaal Reef Ore Reserves include 21.6 thousand tonnes of Uranium oxide by-products; this cannot be accounted for by individual mine as Great Noligwa, Kopanang andMoab Khotsong feed to a combination of plants. | |
(6) | Tonnes refers to a metric tonne which is equivalent to 1000 kilograms. | |
(7) | The Ore Reserve contains 1 078 tonnes of silver to be recovered as a by-product. | |
(8) | The Ore Reserve contains 0.44 million tonnes of sulfur to be recovered as a by-product. | |
(9) | DMS plant and CIP plant, respectively. | |
(10) | Open pit and underground mining, respectively. | |
Rounding may result in computational differences. |
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Mine | Tonnes (millions) | Grade (grams/tonne) | Gold Content (tonnes) | |||||||||
Mponeng | 30.90 | 10.65 | 329.13 | |||||||||
Moab Khotsong | 10.40 | 12.54 | 130.46 | |||||||||
Obuasi | 2.71 | 13.08 | 35.49 | |||||||||
AGA Mineração | 3.21 | 5.91 | 19.01 | |||||||||
Total | 47.22 | 10.89 | 514.09 | |||||||||
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At December 31, 2009 | ||||||||||||||||||||||||||||
Proven Ore Reserves(1) | Probable Ore Reserves(1)(2) | |||||||||||||||||||||||||||
Gold | Gold | Metallurgical | ||||||||||||||||||||||||||
Tonnes(6) | Grade | Content | Tonnes | Grade | Content | Recovery factor | ||||||||||||||||||||||
Ore Reserves: Metric | (mill) | (g/t) | (tonnes) | (mill) | (g/t) | (tonnes) | percent | |||||||||||||||||||||
South Africa | ||||||||||||||||||||||||||||
Vaal River(5) | ||||||||||||||||||||||||||||
Great Noligwa | 3.66 | 7.75 | 28.33 | 3.04 | 7.07 | 21.46 | 96.3 | |||||||||||||||||||||
Kopanang | 0.98 | 6.94 | 6.80 | 16.91 | 5.71 | 96.50 | 97.5 | |||||||||||||||||||||
Moab Khotsong(2) | 1.17 | 10.44 | 12.20 | 18.61 | 11.26 | 209.56 | 94.6-97.1 | (4) | ||||||||||||||||||||
Tau Lekoa | 0.60 | 3.98 | 2.37 | 0.69 | 3.98 | 2.75 | 97.4 | |||||||||||||||||||||
West Wits | ||||||||||||||||||||||||||||
Mponeng(2) | 2.22 | 8.27 | 18.39 | 35.79 | 10.54 | 377.12 | 98.0-98.5 | (4) | ||||||||||||||||||||
Savuka | 0.12 | 5.36 | 0.65 | 2.95 | 6.24 | 18.42 | 97.3 | |||||||||||||||||||||
TauTona(2) | 0.34 | 11.83 | 4.00 | 8.69 | 9.32 | 80.98 | 97.8 | |||||||||||||||||||||
Surface | ||||||||||||||||||||||||||||
Surface sources | — | — | — | 116.31 | 0.50 | 58.59 | 48-91 | (4) | ||||||||||||||||||||
Continental Africa | ||||||||||||||||||||||||||||
Democratic Republic of Congo | ||||||||||||||||||||||||||||
Kibali (45 percent)(3) | — | — | — | 28.71 | 4.48 | 128.65 | 84.5: 91.3 | (9) | ||||||||||||||||||||
Ghana | ||||||||||||||||||||||||||||
Iduapriem | 26.36 | 1.37 | 36.04 | 23.22 | 1.66 | 38.52 | 95.0 | ) | ||||||||||||||||||||
Obuasi(2) | 13.93 | 7.13 | 99.30 | 28.10 | 7.15 | 200.79 | 35.0-83.0 | (4) | ||||||||||||||||||||
Guinea | ||||||||||||||||||||||||||||
Siguiri (85 percent)(3) | 30.83 | 0.64 | 19.59 | 87.85 | 0.86 | 75.99 | 88-93.5 | (4) | ||||||||||||||||||||
Mali | ||||||||||||||||||||||||||||
Morila (40 percent)(3) | 3.94 | 1.74 | 6.85 | 2.76 | 1.14 | 3.14 | 88.9-89 | (4) | ||||||||||||||||||||
Sadiola (41 percent)(3) | 4.10 | 2.47 | 10.14 | 16.20 | 2.17 | 35.18 | 80-100 | (4) | ||||||||||||||||||||
Yatela (40 percent)(3) | 1.20 | 1.14 | 1.37 | — | — | — | 84.0 | |||||||||||||||||||||
Namibia | ||||||||||||||||||||||||||||
Navachab | 9.85 | 0.93 | 9.12 | 32.40 | 1.28 | 41.42 | 88.0 | |||||||||||||||||||||
Tanzania | ||||||||||||||||||||||||||||
Geita | — | — | — | 47.36 | 3.33 | 157.57 | 46.2-89.3 | (4) | ||||||||||||||||||||
Australasia | ||||||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||||||
Sunrise Dam | 8.31 | 1.94 | 16.16 | 9.29 | 4.05 | 37.59 | 85.0-85.5 | (4) | ||||||||||||||||||||
Americas | ||||||||||||||||||||||||||||
Argentina | ||||||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent)(3)(7) | 10.76 | 1.37 | 14.78 | 9.64 | 4.53 | 43.66 | 95.0 | |||||||||||||||||||||
Brazil | ||||||||||||||||||||||||||||
AGA Mineraçáo(8) | 4.61 | 6.94 | 32.00 | 6.46 | 5.55 | 35.85 | 88-93 | (4) | ||||||||||||||||||||
Serra Grande (50 percent)(3) | 2.06 | 3.58 | 7.38 | 0.86 | 3.99 | 3.43 | 90.9-95.9 | (4) | ||||||||||||||||||||
United States of America | ||||||||||||||||||||||||||||
Cripple Creek & Victor | 99.82 | 0.93 | 92.29 | 46.40 | 0.89 | 41.17 | 50-77 | (4) | ||||||||||||||||||||
Total | 224.87 | 1.86 | 417.77 | 542.25 | 3.15 | 1,708.35 | ||||||||||||||||||||||
(1) | Ore Reserves include marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining. | |
(2) | Probable Ore Reserves include Ore Reserves below infrastructure. See table below. | |
(3) | Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown. | |
(4) | Recovery factor varies according to ore type. | |
(5) | The Vaal Reef Ore Reserves include 16.9 thousand tonnes of Uranium by-products; this cannot be accounted for by individual mine as Great Noligwa, Kopanang and Moab Khotsong feed to a combination of plants. | |
(6) | Tonnes refers to a metric tonne which is equivalent to 1000 kilograms. | |
(7) | The Ore Reserve contains 1 175 tonnes of silver to be recovered as a by-product. | |
(8) | 0.41 million tonnes of sulfur will be recovered from processing the Ore Reserve. | |
(9) | Open pit and underground mining, respectively. |
Rounding may result in computational differences. |
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Mine | Tonnes (millions) | Grade (grams/tonne) | Gold Content (tonnes) | |||||||||
TauTona | 0.48 | 13.93 | 6.70 | |||||||||
Mponeng | 25.02 | 11.84 | 296.30 | |||||||||
Moab Khotsong | 11.84 | 10.35 | 122.56 | |||||||||
Obuasi | 3.3 | 13.14 | 43.41 | |||||||||
AGA Mineração | 4.19 | 5.6 | 23.49 | |||||||||
Total | 44.83 | 10.99 | 492.46 | |||||||||
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At December 31, 2010 | ||||||||||||
Gold content | ||||||||||||
Stockpiles | Tons (million) | Grade (ounces/ton) | (million ounces) | |||||||||
South Africa | ||||||||||||
Surface sources(2) | 121.79 | 0.014 | 1.74 | |||||||||
Continental Africa | ||||||||||||
Ghana | ||||||||||||
Iduapriem | 4.29 | 0.030 | 0.13 | |||||||||
Guinea | ||||||||||||
Siguiri (85 percent)(1)(3) | 67.22 | 0.016 | 1.08 | |||||||||
Mali | ||||||||||||
Morila (40 percent)(1) | 5.53 | 0.040 | 0.22 | |||||||||
Sadiola (41 percent)(1) | 2.57 | 0.086 | 0.22 | |||||||||
Yatela (40 percent)(1) | 0.26 | 0.019 | — | |||||||||
Namibia | ||||||||||||
Navachab | 9.05 | 0.022 | 0.20 | |||||||||
Tanzania | ||||||||||||
Geita | 7.57 | 0.032 | 0.24 | |||||||||
Australasia | ||||||||||||
Australia | ||||||||||||
Sunrise Dam | 7.26 | 0.049 | 0.35 | |||||||||
Americas | ||||||||||||
Argentina | ||||||||||||
Cerro Vanguardia (92.5 percent)(1) | 12.35 | 0.020 | 0.25 | |||||||||
Brazil | ||||||||||||
Serra Grande (50 percent)(1) | 0.03 | 0.083 | — | |||||||||
(1) | Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown. | |
(2) | Centralized operations treating material on surface that was previously generated by several underground operations. | |
(3) | Spent heap included in Ore Reserve. | |
The rounding of figures and converting from metric to imperial units may result in minor computational discrepancies. |
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At December 31, 2009 | ||||||||||||
Gold content | ||||||||||||
Stockpiles | Tons (million) | Grade (ounces/ton) | (million ounces) | |||||||||
South Africa | ||||||||||||
Surface | ||||||||||||
Vaal River Surface — SA MET(2) | 119.33 | 0.015 | 1.74 | |||||||||
West Wits Surface — SA MET(2) | 8.88 | 0.017 | 0.15 | |||||||||
Continental Africa | ||||||||||||
Ghana | ||||||||||||
Iduapriem | 3.05 | 0.032 | 0.10 | |||||||||
Obuasi | 5.62 | 0.058 | 0.33 | |||||||||
Guinea | ||||||||||||
Siguiri (85 percent)(1)(3) | 64.86 | 0.016 | 1.06 | |||||||||
Mali | ||||||||||||
Morila (40 percent)(1) | 7.40 | 0.043 | 0.32 | |||||||||
Sadiola (41 percent)(1) | 4.52 | 0.072 | 0.33 | |||||||||
Yatela (40 percent)(1) | 1.33 | 0.033 | 0.04 | |||||||||
Namibia | ||||||||||||
Navachab | 7.58 | 0.022 | 0.17 | |||||||||
Tanzania | ||||||||||||
Geita | 2.95 | 0.047 | 0.14 | |||||||||
Australasia | ||||||||||||
Australia | ||||||||||||
Sunrise Dam | 7.43 | 0.045 | 0.34 | |||||||||
Americas | ||||||||||||
Argentina | ||||||||||||
Cerro Vanguardia (92.5 percent)(1) | 14.45 | 0.018 | 0.26 | |||||||||
Brazil | ||||||||||||
Serra Grande (50 percent)(1) | 0.05 | 0.093 | 0.01 | |||||||||
(1) | Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown. | |
(2) | Centralized operations treating material on surface that was previously generated by several underground operations. | |
(3) | Spent heap included in Ore Reserve. | |
The rounding of figures and converting from metric to imperial units may result in minor computational discrepancies. |
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At December 31, 2010 | ||||||||||||
Gold content | ||||||||||||
Stockpiles | Tonnes (million) | Grade (grams/tonne) | (tonnes) | |||||||||
South Africa | ||||||||||||
Surface sources(2) | 110.49 | 0.49 | 54.10 | |||||||||
Continental Africa | ||||||||||||
Ghana | ||||||||||||
Iduapriem | 3.89 | 1.05 | 4.06 | |||||||||
Guinea | ||||||||||||
Siguiri (85 percent) (1)(3) | 60.98 | 0.55 | 33.62 | |||||||||
Mali | ||||||||||||
Morila (40 percent)(1) | 5.02 | 1.39 | 6.97 | |||||||||
Sadiola (41 percent)(1) | 2.33 | 2.95 | 6.88 | |||||||||
Yatela (40 percent)(1) | 0.23 | 0.66 | 0.15 | |||||||||
Namibia | ||||||||||||
Navachab | 8.21 | 0.77 | 6.31 | |||||||||
Tanzania | ||||||||||||
Geita | 6.87 | 1.09 | 7.51 | |||||||||
Australasia | ||||||||||||
Australia | ||||||||||||
Sunrise Dam | 6.58 | 1.67 | 11.02 | |||||||||
Americas | ||||||||||||
Argentina | ||||||||||||
Cerro Vanguardia (92.5 percent)(1) | 11.20 | 0.70 | 7.83 | |||||||||
Brazil | ||||||||||||
Serra Grande (50 percent)(1) | 0.03 | 2.83 | 0.08 | |||||||||
(1) | Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown. | |
(2) | Centralized operations treating material on surface that was previously generated by several underground operations. | |
(3) | Spent heap included in Ore Reserve. | |
The rounding of figures and converting from metric to imperial units may result in minor computational discrepancies. |
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At December 31, 2009 | ||||||||||||
Gold content | ||||||||||||
Stockpiles | Tonnes (million) | Grade (grams/tonne) | (tonnes) | |||||||||
South Africa | ||||||||||||
Vaal River Surface — SA MET(2) | 108.26 | 0.50 | 54.02 | |||||||||
West Wits Surface — SA MET(2) | 8.06 | 0.57 | 4.57 | |||||||||
Continental Africa | ||||||||||||
Ghana | ||||||||||||
Iduapriem | 2.77 | 1.08 | 2.99 | |||||||||
Obuasi | 5.10 | 2.01 | 10.23 | |||||||||
Guinea | ||||||||||||
Siguiri (85 percent) (1)(3) | 58.84 | 0.56 | 32.83 | |||||||||
Mali | ||||||||||||
Morila (40 percent)(1) | 6.71 | 1.49 | 9.99 | |||||||||
Sadiola (41 percent)(1) | 4.10 | 2.47 | 10.14 | |||||||||
Yatela (40 percent)(1) | 1.20 | 1.14 | 1.37 | |||||||||
Namibia | ||||||||||||
Navachab | 6.87 | 0.77 | 5.28 | |||||||||
Tanzania | ||||||||||||
Geita | 2.67 | 1.63 | 4.35 | |||||||||
Australasia | ||||||||||||
Australia | ||||||||||||
Sunrise Dam | 6.74 | 1.55 | 10.47 | |||||||||
Americas | ||||||||||||
Argentina | ||||||||||||
Cerro Vanguardia (92.5 percent)(1) | 13.11 | 0.62 | 8.14 | |||||||||
Brazil | ||||||||||||
Serra Grande (50 percent)(1) | 0.04 | 3.2 | 0.14 | |||||||||
(1) | Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown. | |
(2) | Centralized operations treating material on surface that was previously generated by several underground operations. | |
(3) | Spent heap included in Ore Reserve. | |
The rounding of figures and converting from metric to imperial units may result in minor computational discrepancies. |
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Drill Hole Spacings | ||||
Proven Ore Reserves | Probable Ore Reserves | |||
South Africa | ||||
Underground sources | Ore body opened up, developed and sampled on a 7 to 10 foot spacing on raise lines and on a 16 x 16 grid thereafter | From a 131 x 131 foot spacing up to 3281 x 3281 foot spacing | ||
Surface sources | Variable sampling strategies: Belt samplers, cross stream residue samplers and bulk sampling campaigns | Variable sampling strategies: Belt samplers, cross stream residue samplers | ||
Continental Africa | ||||
Ghana | ||||
Iduapriem | 164 x 164 feet, 328 x 164 feet | 246 x 164 feet, 328 x 246 feet | ||
Obuasi — Surface | 66 x 66 feet | 98 x 98 feet | ||
Obuasi — Underground | 66 x 66 feet | 197 x 197 feet | ||
Guinea | ||||
Siguiri | 16 x 33 feet | 66 x 131 feet, 82 x 82 feet | ||
Mali | ||||
Morila | 33 x 33 feet | 98 x 98 feet | ||
Sadiola | 66 x 66 feet, 82 x 82 feet | 82 x 164 feet | ||
Yatela | 33 x 33 feet, 82 x 82 feet | 115 x 148 feet | ||
Namibia | ||||
Navachab | 33 x 33 feet | 82 x 164 feet | ||
Tanzania | ||||
Geita | 16 x 33 feet, 33 x 33 feet | 131 x 131 feet | ||
Australasia | ||||
Australia | ||||
Sunrise Dam | 33 x 33 feet, 82 x 82 feet | 66 x 66 feet, 131 x 131 feet, 164 x 164 feet | ||
Americas | ||||
Argentina | ||||
Cerro Vanguardia | 41 x 41 feet | 131 x 131 feet | ||
Brazil | ||||
AGA Mineraçáo | 66 x 66 feet, 82 x 82 feet. Drilling pattern of 197 x 66 feet for Cuiabá Expansion Project. | 66 x 66 feet, 164 x 164 feet. | ||
Serra Grande | 33 x 33 feet, 66 x 33 feet | 33 x 66 feet, 66 x 164 feet | ||
(50 percent) | ||||
United States of America | ||||
Cripple Creek & Victor | <98 x 98 feet | >98 x 98 feet |
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Drill Hole Spacings | ||||
Proven Ore Reserves | Probable Ore Reserves | |||
South Africa | ||||
Underground sources | Ore body opened up, developed and sampled on a 2 to 3 meter spacing on raise lines and on a 5 x 5 grid thereafter | From a 40 x 40 meter spacing up to 1000 x 1000 meter spacing | ||
Surface sources | Variable sampling strategies: Belt samplers, cross stream residue samplers and bulk sampling campaigns | Variable sampling strategies: Belt samplers, cross stream residue samplers | ||
Continental Africa | ||||
Ghana | ||||
Iduapriem | 50 x 50 meter, 100 x 50 meter | 75 x 50 meter, 100 x 75 meter | ||
Obuasi — Surface | 20 x 20 meter | 30 x 30 meter | ||
Obuasi — Underground | 20 x 20 meter | 60 x 60 meter | ||
Guinea | ||||
Siguiri | 5 x 10 meter | 20 x 40 meter, 25 x 25 meter | ||
Mali | ||||
Morila | 10 x 10 meter | 30 x 30 meter | ||
Sadiola | 20 x 20 meter, 25 x 25 meter | 25 x 50 meter | ||
Yatela | 10 x 10 meter, 25 x 25 meter | 35 x 45 meter | ||
Namibia | ||||
Navachab | 10 x 10 meter | 25 x 25 meter | ||
Tanzania | ||||
Geita | 5 x 10 meter, 10 x 10 meter | 40 x 40 meter | ||
Australasia | ||||
Australia | ||||
Sunrise Dam | 10 x 10 meter, 25 x 25 meter | 20 x 20 meter, 40 x 40 meter, 50 x 50 meter | ||
Americas | ||||
Argentina | ||||
Cerro Vanguardia | 12.5 x 12.5 meter | 40 x 40 meter | ||
Brazil | ||||
AGA Mineraçáo | 20 x 20 meter, 25 x 25 meter. Drilling pattern of 60 x 20 for Cuiabá Expansion Project. | 20 x 20 meter, 50 x 50 meter. | ||
Serra Grande | 10 x 10 meter, 20 x 10 meter | 10 x 20 meter, 20 x 50 meter | ||
(50 percent) | ||||
United States of America | ||||
Cripple Creek & Victor | <30 x 30 meter | >30 x 30 meter |
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Key focus areas | Our context | |
Improving operational safety performance | Safety is our first value and the most important business consideration. We are committed to creating the safest possible environment for our employees and, over the longer term, to operating an injury-free business. | |
Managing health impacts that arise at our operations and in our communities | We do not accept ill health as a natural consequence of our business and believe that employees must be able to go home fit and well at the end of each working day. Our most material health risks relate to silicosis, noise-induced hearing loss, HIV/AIDS and malaria. | |
Operating with respect for human rights | Our concern for operating with respect for human rights stems from our aim to place people first in all aspects of the business. Human rights considerations cut across a range of disciplines at AngloGold Ashanti, including health, safety, security, community, environmental, human resources, legal and regulatory, governance and labor relations. Human rights considerations have been considered in developing policies in these areas, and we have focused in particular on embedding the Voluntary Principles on Security and Human Rights (VPSHR) into our security practices. We have not, however, had a company-wide human rights policy in place. This is an area of work which was initiated in 2010 and will be developed further in 2011, in alignment with progress that has been made in the UN in defining the responsibilities of business to respect human rights. | |
Relationships with the communities which host our operations | AngloGold Ashanti is developing a global sustainability strategy which aims to create value for all of its business and social partners. We operate in regions where communities are vulnerable. Transparency is therefore important in our interactions with governments and communities, and essential if they are to derive sustainable economic benefit from our operations. | |
A lifecycle approach — exploration and closure | We aim to leave host communities better off for our presence, which implies that, even at the exploration phase of a project, we need to take into account the fact that our mines will eventually close. Communities which have hosted our operations must be consulted on what we leave behind in terms of infrastructure and impacts. | |
Effective stewardship of the environment and of the natural resources that we use, primarily land, water and energy | Mining operations use increasingly scarce resources such as energy, water and land and can have substantial impacts on the environment, both positive and negative. Key concerns in this area relate to water, energy and greenhouse gas emissions, land, climate change, hazardous materials and air quality. In February 2010, operations at Iduapriem in Ghana were suspended for a period of two and a half months due to potentially adverse environmental impacts arising from the tailings storage facility at the operation. In conjunction with the Environmental Protection Agency of Ghana (EPA), an interim location for tailings storage was identified. Construction of a new storage facility to cater for life of mine tailings deposition is in progress and this new facility will become operational in the first half of 2011. |
Our 2009 commitments | Our progress in 2010 | |
Achieving a further 20 percent reduction in the all injury frequency rate with the long-term objective of operating an accident-free business | We achieved a reduction of 11 percent in our all injury frequency rate in 2010. Although this is short of our target for the year, we are pleased to be able to report a 45 percent improvement in the all injury frequency rate since 2007, from 20.95 in 2007 to 11.50 in 2010. Due to the transformational nature of our safety interventions, our expectation was that improvements would be achieved through a series of step changes. | |
Begin implementation of the Safety Transformation project | Implementation of the Safety Transformation project has begun — the project was launched in May 2010. Significant work was undertaken on integrating the project into the operating framework of the business. |
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• | completion of guidelines by mid-2011 to support roll out of the global safety standards; | |
• | implementation of a new model and process for accident investigation; | |
• | a review of organizational safety capabilities; and | |
• | development of operational safety plans to business unit teams. |
Our 2009 commitments | Our progress in 2010 | |
Elimination of new cases of silicosis after December 2013 among employees in South Africa with no occupational exposure prior to 2008 | We are working towards achievement of this industry milestone. Due to the latency period of the disease we are not yet able to provide a meaningful assessment of this group of employees. We have, however, met and exceeded industry milestones on silica dust exposure as one of the measures in place to combat this disease and have set lower internal benchmarks for exposure. | |
Intensify hearing conservation programs and continue to silence — to acceptable levels — all identified noise equipment in order to achieve the industry milestone of no deterioration in hearing greater than 10 percent among occupationally-exposed individuals at South African operations | We are working towards achievement of this industry milestone. It is still too early to provide a meaningful assessment of this group of employees due to the latent nature of this disability. We have been in compliance with the 2013 industry noise targets since 2008 and have now set lower internal benchmarks. | |
Maintain a rate of 80 percent of South African employees attending voluntary counseling and testing for HIV (VCT) during 2010, excluding current wellness clinic attendees | 74 percent of South African employees attended VCT during 2010. The uptake of VCT programs has been falling since 2008. Programs relating to the prevention of HIV/AIDS have been in place at AngloGold Ashanti since 2000 and numbers of employees presenting themselves for VCT are declining. Communications and awareness efforts continue, as does the provision of anti-retroviral therapy (ART) and wellness programs to affected employees. | |
Reduce by 50 percent the number of avoidable drop-outs from wellness programs in 2010 | Over 4,000 employees attended wellness programs in 2010 and ART continues to be supplied to approximately 2,500 employees for whom this treatment is clinically indicated. We have not been able to measure the number of drop-outs from wellness programs accurately, due to the difficulty of establishing the cause of an employee discontinuing treatment. | |
Reduce occupational tuberculosis (TB) incidence to 3 percent of all South African employees by 2010 | We have achieved this target. The incidence of TB among South African employees was reduced to 2.64 percent in 2010. | |
Successfully cure 85 percent of new TB cases in 2010 | Over 90 percent of new cases were successfully cured in 2009. Data for 2010 is not yet available as treatment programs for TB last between six and eight months. |
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• | continue progress towards the industry milestone of no new cases of silicosis among previously unexposed employees in South Africa (2008 onwards) after December 2013; | |
• | meet the industry milestone of no deterioration in hearing greater than 10 percent among occupationally-exposed individuals at South African operations; | |
• | roll out integrated malaria programs, drawing on the model implemented at Obuasi in Ghana, at operations in Mali, Tanzania and Guinea; and | |
• | in South Africa, continue efforts to reduce occupational tuberculosis (TB) incidence to 2.25 percent of all South African employees by 2015 and successfully cure 85 percent of new cases (our long-term target is the reduction of TB incidence to 1.5 percent of all South African employees by 2029). |
Our 2009 commitments | Our progress in 2010 | |
Zero violations of the Voluntary Principles on Security and Human Rights (VPSHR) in 2010 | In 2010, two violations of the VPSHR were recorded, details are provided in the group-level Sustainability Report. We are continuing efforts to embed the VPSHR into our security management systems and practices in order to effect the continuous improvement necessary to reach our target of zero VPSHR violations. We continue to encourage self reporting by security personnel of potential violations. | |
Develop a standard approach for all contracts with private and public security | A review of all contracts with private and public security is under way in order to achieve this target and is scheduled for completion by the end of 2011. |
• | complete implementation of the global security framework by the end of 2011; and | |
• | review all contracts with private and public security services worldwide in order to standardize contract requirements by the end of 2011. |
Our 2009 commitments | Our progress in 2010 | |
Final approval of management standards and associated guidance material that govern how the company interacts with communities | Standards have been developed and are scheduled for approval by the executive committee of the company in 2011. Work to develop guidance material will follow shortly after approval. | |
Incorporate community aspects into each operation’s ISO 14001 management system by 2012 | The ISO 14001 management system is in place at all operations and progress has been made towards incorporating community aspects. Further work is being done to support sites to meet the target date which is three years following approval of the management standards by the board. | |
Continue to embed the government relations function into decision-making processes, including through development of a management standard by 2011 | In 2010 progress was made in incorporating the government relations function into broader AngloGold Ashanti decision-making processes. The need for a management standard will be reviewed. | |
Roll-out of a pilot government engagement strategy model in South African and in a minimum of two other jurisdictions in 2011 | This pilot program remains work in progress in South Africa in 2011. Following its successful completion, we aim to extend the model to two other jurisdictions. | |
In South Africa, participate in the Mining Charter review | We participated actively in the Mining Charter review, including through the relevant industry structures. The reviewed Mining Charter was agreed and published. |
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Our 2009 commitments | Our progress in 2010 | |
Work on findings of review conducted in 2009 to address any site-level deficiencies in closure plans and ensure alignment with company management standard by 2011 | An internal multi-disciplinary committee continued to guide site-level closure planning to ensure alignment with the company standard by the end of 2011. A workshop was held in December 2010 to ensure alignment amongst environmental, social and accounting professionals within the company and to share best practices across the group. |
Our 2009 commitments | Our progress in 2010 | |
Continue work to improve energy and water performance including through the development of site-level objectives | Comprehensive energy maps have been developed for South Africa and are being progressed for all other operations. A more complete range of water performance indicators is being developed for key aspects of water performance. Site water balances are being refined. A global approach for quantifying the energy and water benefits from business improvement projects is also being progressed. | |
Audit the global energy and water security position for all operations | High level energy and water security reviews have been completed at 15 of our 19 relevant operations and the balance will be completed in 2011. Strategic frameworks have been developed for energy and water management. | |
Continue to address key climate change opportunities and risks | Preliminary preparations to understand site-specific climate change risks in greater detail have commenced. A project to install heat pumps at high-density residences in South Africa is almost complete and is expected to earn carbon credits. We are continuing to assess other opportunities for generating carbon credits, especially in the South Africa region where our energy consumption is 40 percent of the group total. | |
Final approval or development of management standards and associated guidance material that govern how the company interacts with the environment | Progress was made in agreeing a biodiversity management standard, which will be finalized in 2011. Guidance for the closure and rehabilitation management standard was finalized. |
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• | developing site-based targets and action plans from 2012 onwards; | |
• | continuing to refine energy metrics, performance measurement and reporting during 2011; and | |
• | quantifying the energy benefits of business improvement initiatives. |
• | finalizing high-level reviews of site energy security arrangements during 2011; and | |
• | commencing the development of site-based energy security strategies for life of mine. |
• | developing site-based targets and action plans from 2012 onwards; | |
• | continuing to refine key performance indicators, performance measurement and reporting during 2011; and | |
• | quantifying the water benefits of business improvement initiatives. |
• | finalizing high-level reviews of water security arrangements during 2011; | |
• | commencing the development of site-based water security strategies for life of mine; and | |
• | embedding integrated water management at all sites, and recognizing the value of managing water performance across entire site operations in a planned and coordinated manner. |
Our 2009 commitments | Our progress in 2010 | |
Continue with the roll out of the System for People (SP), including the global values survey | Significant progress was made during the year on implementation of the SP, with the development of a new delivery framework clearly defining corporate and regional roles. The global values survey was completed in 2010 and the results reviewed by the Executive Committee. The results will be fed back into the business in early 2011. | |
Review the wage negotiations strategy in Continental Africa and develop a model for conducting wage negotiations which can be applied throughout the company’s Continental African operations | A labor engagement model was developed and successful collective bargaining processes were concluded at the Siguiri mine in Guinea and Sadiola/Yatela mines in Mali. | |
Standardize, to the extent possible, the conditions of employment of senior managers to facilitate mobility within the company | A survey of conditions of employment with respect to senior and executive management was conducted by PwC on behalf of the company and the report submitted to the Remuneration Committee. This survey covered all the countries in which the company operates. The findings of this survey resulted in the formulation of the company’s Remuneration Policy that was approved by the shareholders at the annual general meeting held in May 2010. |
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2010 | 2009 | 2008 | ||||||||||
Year ended December 31 | percent | percent | percent | |||||||||
The average South African rand/US$ exchange rate (strengthened)/weakened by: | (12.9 | ) | 1.7 | 17.4 | ||||||||
PPI (inflation rate) increase/(decrease): | 5.8 | (0.1 | ) | 14.2 | ||||||||
Net effect | 18.7 | (1.8 | ) | (3.2 | ) | |||||||
Operating data for AngloGold Ashanti | Year ended December 31 | |||||||||||
2010 | 2009 | 2008 | ||||||||||
Total attributable gold production (thousand ounces) | 4,515 | 4,599 | 4,982 | |||||||||
Total cash costs ($/oz) | 627 | 534 | 465 | |||||||||
Total production costs ($/oz) | 812 | 683 | 592 | |||||||||
Production costs (million US dollars) | 2,656 | 2,229 | 2,159 | |||||||||
Capital expenditure (million US dollars)(1) | 1,015 | 1,027 | 1,239 | |||||||||
— Consolidated entities | 973 | 1,019 | 1,232 | |||||||||
— Equity accounted joint ventures | 42 | 8 | 7 | |||||||||
(1) | Including capital expenditure of Boddington in 2009 and 2008. |
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• | an indication of profitability, efficiency and cash flows; | |
• | the trend in costs as the mining operations mature over time on a consistent basis; and | |
• | an internal benchmark of performance to allow for comparison against other mines, both within the AngloGold Ashanti group and of other gold mining companies. |
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Great Noligwa | Kopanang | Moab Khotsong | Tau Lekoa | Mponeng | Savuka | TauTona | Surface operations | Corporate(6) | ||||||||||||||||||||||||||||
Production costs | 120 | 192 | 181 | 59 | 233 | 24 | 177 | 89 | 12 | |||||||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||
Production costs of equity accounted joint ventures(1) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||
Rehabilitation costs & other non-cash costs | (2 | ) | (5 | ) | (10 | ) | — | (5 | ) | — | (3 | ) | — | (8 | ) | |||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||
Inventory movement | (1 | ) | (1 | ) | (1 | ) | (1 | ) | — | — | — | — | — | |||||||||||||||||||||||
Royalties | 2 | 4 | 4 | — | 18 | 1 | 9 | — | — | |||||||||||||||||||||||||||
Related party transactions(2) | (1 | ) | (3 | ) | (3 | ) | (1 | ) | (5 | ) | — | (2 | ) | (2 | ) | — | ||||||||||||||||||||
Adjusted for: | ||||||||||||||||||||||||||||||||||||
Noncontrolling interests(3) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Non-gold producing companies and adjustments | — | — | — | — | — | — | — | — | (9 | ) | ||||||||||||||||||||||||||
Total cash costs | 118 | 187 | 171 | 57 | 241 | 25 | 181 | 87 | (5 | ) | ||||||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||
Depreciation, depletion and amortization | 27 | 73 | 108 | 1 | 58 | 5 | 71 | 6 | 15 | |||||||||||||||||||||||||||
Employee severance costs | 5 | 3 | 2 | 1 | 5 | 1 | 3 | — | — | |||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | 2 | 5 | 10 | — | 5 | — | 3 | — | 8 | |||||||||||||||||||||||||||
Adjusted for: | ||||||||||||||||||||||||||||||||||||
Noncontrolling interests(3) | — | — | — | — | — | — | — | — | (11 | ) | ||||||||||||||||||||||||||
Non-gold producing companies and adjustments | — | — | — | — | — | — | — | — | (5 | ) | ||||||||||||||||||||||||||
Total production costs | 152 | 268 | 291 | 59 | 309 | 31 | 258 | 93 | 2 | |||||||||||||||||||||||||||
Gold produced (000’ ounces)(4) | 132 | 305 | 292 | 63 | 532 | 22 | 259 | 179 | — | |||||||||||||||||||||||||||
Total cash costs per ounce(5) | 894 | 613 | 586 | 905 | 452 | 1,136 | 699 | 486 | — | |||||||||||||||||||||||||||
Total production costs per ounce(5) | 1,152 | 879 | 997 | 937 | 580 | 1,409 | 996 | 520 | — |
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(in $ millions, except as otherwise noted)
UNITED | ||||||||||||||||||||||||||||||||||||||||||||||||||||
GHANA | GUINEA | MALI | NAMIBIA | TANZANIA | AUSTRALIA | STATES OF AMERICA | ARGENTINA | BRAZIL | ||||||||||||||||||||||||||||||||||||||||||||
Cripple | AngloGold Ashanti | |||||||||||||||||||||||||||||||||||||||||||||||||||
Iduapriem | Obuasi | Siguiri | Morila | Sadiola | Yatela | Navachab | Geita | Sunrise Dam | Creek & Victor | Cerro Vanguardia | Mineracao | Serra Grande | ||||||||||||||||||||||||||||||||||||||||
Production costs | 151 | 238 | 184 | — | — | — | 57 | 256 | 261 | 114 | 63 | 169 | 76 | |||||||||||||||||||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Production costs of equity accounted joint ventures(1) | — | — | — | 61 | 5 | 43 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Rehabilitation costs & other non-cash costs | (20 | ) | (16 | ) | (1 | ) | — | (3 | ) | (2 | ) | 3 | (8 | ) | 1 | (13 | ) | (7 | ) | (18 | ) | — | ||||||||||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory movement | 6 | 7 | (1 | ) | — | 1 | 1 | (1 | ) | (12 | ) | — | 58 | — | (1 | ) | (2 | ) | ||||||||||||||||||||||||||||||||||
Royalties | 7 | 12 | 29 | 7 | 9 | 4 | 3 | 13 | 12 | 5 | 21 | — | 1 | |||||||||||||||||||||||||||||||||||||||
Related party transactions(2) | — | — | — | — | (1 | ) | 3 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Adjusted for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interests(3) | — | — | (32 | ) | — | — | — | — | — | — | — | (6 | ) | — | (38 | ) | ||||||||||||||||||||||||||||||||||||
Total cash costs | 144 | 241 | 179 | 68 | 81 | 49 | 62 | 249 | 274 | 164 | 71 | 150 | 37 | |||||||||||||||||||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation, depletion and amortization | 25 | 61 | 23 | 4 | 3 | 2 | 8 | 55 | 33 | 33 | 24 | 61 | 32 | |||||||||||||||||||||||||||||||||||||||
Employee severance costs | 1 | — | — | 1 | — | — | — | — | — | — | 1 | 2 | — | |||||||||||||||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | 20 | 16 | 1 | — | 3 | 2 | (3 | ) | 8 | (1 | ) | 13 | 7 | 18 | — | |||||||||||||||||||||||||||||||||||||
Adjusted for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interests(3) | — | — | (3 | ) | — | — | — | — | — | — | — | (2 | ) | — | (16 | ) | ||||||||||||||||||||||||||||||||||||
Total production costs | 190 | 318 | 200 | 73 | 87 | 53 | 67 | 312 | 306 | 210 | 101 | 231 | 53 | |||||||||||||||||||||||||||||||||||||||
Gold produced (000’ ounces)(4) | 185 | 317 | 273 | 95 | 118 | 60 | 86 | 357 | 396 | 233 | 194 | 338 | 77 | |||||||||||||||||||||||||||||||||||||||
Total cash costs per ounce(5) | 778 | 760 | 656 | 716 | 686 | 817 | 721 | 697 | 692 | (7) 500 | 366 | 444 | 481 | |||||||||||||||||||||||||||||||||||||||
Total production costs per ounce(5) | 1,027 | 1,003 | 733 | 768 | 737 | 883 | 779 | 874 | 773 | 901 | 521 | 683 | 688 |
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Total | ||||
Production costs per financial statements | 2,656 | |||
Plus: | ||||
Production costs of equity accounted joint ventures(1) | 179 | |||
Less: | ||||
Rehabilitation costs & other non-cash costs | (117 | ) | ||
Plus/(less): | ||||
Inventory movement | 52 | |||
Royalties | 161 | |||
Related party transactions(2) | (15 | ) | ||
Adjusted for: | ||||
Noncontrolling interests(3) | (76 | ) | ||
Non-gold producing companies and adjustments | (9 | ) | ||
Total cash costs | 2,831 | |||
Plus: | ||||
Depreciation, depletion and amortization | 728 | |||
Employee severance costs | 25 | |||
Rehabilitation and other non-cash costs | 117 | |||
Adjusted for: | ||||
Noncontrolling interests(3) | (32 | ) | ||
Non-gold producing companies and adjustments | (5 | ) | ||
Total production costs | 3,664 | |||
Gold produced (000’ ounces)(4) | 4,515 | |||
Total cash costs per ounce(5) | 627 | |||
Total production costs per ounce(5) | 812 | |||
(1) | Attributable production costs and related expenses of equity accounted joint ventures are included in the calculation of total cash costs per ounce and total production costs per ounce. | |
(2) | Relates solely to production costs as included in the Company’s consolidated financial statements and has, accordingly, been included in total production costs and total cash costs. | |
(3) | Adjusting for noncontrolling interest of items included in calculation, to disclose the attributable portions only. | |
(4) | Attributable production only. | |
(5) | In addition to the operational performances of the mines, total cash costs per ounce and total production costs per ounce are affected by fluctuations in the currency exchange rate. AngloGold Ashanti reports total cash costs per ounce and total production costs per ounce calculated to the nearest US dollar amount and gold produced in ounces. | |
(6) | Corporate includes non-gold producing subsidiaries. | |
(7) | Total cash costs per ounce calculation includes heap-leach inventory change. |
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Great Noligwa | Kopanang | Moab Khotsong | Tau Lekoa | Mponeng | Savuka | TauTona | Surface operations | Corporate(6) | ||||||||||||||||||||||||||||
Production costs | 127 | 141 | 107 | 88 | 178 | 34 | 119 | 64 | (26 | ) | ||||||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||
Production costs of equity accounted joint ventures(1) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||
Rehabilitation costs & other non-cash costs | — | (1 | ) | — | 2 | — | — | — | — | (15 | ) | |||||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||
Inventory movement | — | — | — | — | (1 | ) | — | (1 | ) | — | — | |||||||||||||||||||||||||
Royalties | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Related party transactions(2) | (2 | ) | (3 | ) | (3 | ) | (1 | ) | (5 | ) | — | (2 | ) | (2 | ) | — | ||||||||||||||||||||
Adjusted for: | ||||||||||||||||||||||||||||||||||||
Noncontrolling interests(3) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Non-gold producing companies and adjustments | — | — | — | — | — | — | — | — | 41 | |||||||||||||||||||||||||||
Total cash costs | 125 | 137 | 104 | 89 | 172 | 34 | 116 | 62 | — | |||||||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||
Depreciation, depletion and amortization | 29 | 61 | 80 | 7 | 37 | 8 | 49 | 2 | 13 | |||||||||||||||||||||||||||
Employee severance costs | 3 | 2 | 1 | 1 | 1 | — | 2 | — | — | |||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | — | 1 | — | (2 | ) | — | — | — | — | 15 | ||||||||||||||||||||||||||
Adjusted for: | ||||||||||||||||||||||||||||||||||||
Noncontrolling interests(3) | — | — | — | — | — | — | — | — | 8 | |||||||||||||||||||||||||||
Non-gold producing companies and adjustments | — | — | — | — | — | — | — | — | (3 | ) | ||||||||||||||||||||||||||
Total production costs | 157 | 201 | 185 | 95 | 210 | 42 | 167 | 64 | 33 | |||||||||||||||||||||||||||
Gold produced (000’ ounces)(4) | 158 | 336 | 247 | 124 | 520 | 30 | 218 | 164 | — | |||||||||||||||||||||||||||
Total cash costs per ounce(5) | 791 | 408 | 421 | 718 | 331 | 1,133 | 532 | 378 | — | |||||||||||||||||||||||||||
Total production costs per ounce(5) | 994 | 598 | 749 | 766 | 404 | 1,400 | 766 | 390 | — |
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GHANA | GUINEA | MALI | NAMIBIA | TANZANIA | AUSTRALIA | STATES OF AMERICA | ARGENTINA | BRAZIL | ||||||||||||||||||||||||||||||||||||||||||||||||
Cripple | AngloGold Ashanti | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Iduapriem | Obuasi | Siguiri | Morila | Sadiola | Yatela | Navachab | Geita | Boddington(8) | Sunrise Dam | Creek & Victor | Cerro Vanguardia | Brasil Mineracao | Serra Grande | |||||||||||||||||||||||||||||||||||||||||||
Production costs | 122 | 240 | 160 | — | — | — | 42 | 261 | — | 250 | 83 | 62 | 112 | 65 | ||||||||||||||||||||||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Production costs of equity accounted joint ventures(1) | — | — | — | 67 | 61 | 26 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rehabilitation costs & other non-cash costs | (2 | ) | (5 | ) | (7 | ) | (2 | ) | (1 | ) | (3 | ) | (1 | ) | (3 | ) | — | (6 | ) | 5 | (2 | ) | (4 | ) | (1 | ) | ||||||||||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory movement | — | (6 | ) | 7 | (1 | ) | (2 | ) | (1 | ) | 1 | 2 | — | (1 | ) | 54 | (1 | ) | 6 | — | ||||||||||||||||||||||||||||||||||||
Royalties | 5 | 11 | 30 | 8 | 8 | 5 | 2 | 8 | — | 10 | 2 | 16 | — | — | ||||||||||||||||||||||||||||||||||||||||||
Related party transactions(2) | — | — | — | — | — | 2 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Adjusted for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interests(3) | — | — | (28 | ) | — | — | — | — | — | — | — | — | (6 | ) | — | (31 | ) | |||||||||||||||||||||||||||||||||||||||
Total cash costs | 125 | 240 | 162 | 72 | 66 | 29 | 44 | 268 | — | 253 | 144 | 69 | 114 | 33 | ||||||||||||||||||||||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation, depletion and amortization | 24 | 76 | 26 | 5 | 12 | 5 | 2 | 53 | — | 37 | 23 | 24 | 44 | 20 | ||||||||||||||||||||||||||||||||||||||||||
Employee severance costs | — | 2 | — | — | — | — | — | — | — | — | — | 2 | — | — | ||||||||||||||||||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | 2 | 5 | 7 | 2 | 1 | 3 | 1 | 3 | — | 6 | (5 | ) | 2 | 4 | 1 | |||||||||||||||||||||||||||||||||||||||||
Adjusted for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interests(3) | — | — | (5 | ) | — | — | — | — | — | — | — | — | (2 | ) | — | (10 | ) | |||||||||||||||||||||||||||||||||||||||
Total production costs | 151 | 323 | 190 | 79 | 79 | 37 | 47 | 324 | — | 296 | 162 | 95 | 162 | 44 | ||||||||||||||||||||||||||||||||||||||||||
Gold produced (000’ ounces)(4) | 190 | 381 | 316 | 137 | 135 | 89 | 65 | 272 | — | 401 | 218 | 192 | 329 | 77 | ||||||||||||||||||||||||||||||||||||||||||
Total cash costs per ounce(5) | 658 | 630 | 513 | 526 | 489 | 326 | 677 | 985 | — | 631 | (7) 371 | 359 | 347 | 429 | ||||||||||||||||||||||||||||||||||||||||||
Total production costs per ounce(5) | 795 | 848 | 601 | 577 | 585 | 416 | 723 | 1,191 | — | 738 | 743 | 495 | 492 | 571 |
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Total | ||||
Production costs per financial statements | 2,229 | |||
Plus: | ||||
Production costs of equity accounted joint ventures(1) | 154 | |||
Plus: | ||||
Rehabilitation costs & other non-cash costs | (46 | ) | ||
(Less)/plus: | ||||
Inventory movement | 56 | |||
Royalties | 105 | |||
Related party transactions(2) | (16 | ) | ||
Adjusted for: | ||||
Noncontrolling interests(3) | (65 | ) | ||
Non-gold producing companies and adjustments | 41 | |||
Total cash costs | 2,458 | |||
Plus/(less): | ||||
Depreciation, depletion and amortization | 637 | |||
Employee severance costs | 14 | |||
Rehabilitation and other non-cash costs | 46 | |||
Adjusted for: | ||||
Noncontrolling interests(3) | (9 | ) | ||
Non-gold producing companies and adjustments | (3 | ) | ||
Total production costs | 3,143 | |||
Gold produced (000’ ounces)(4) | 4,599 | |||
Total cash costs per ounce(5) | 534 | |||
Total production costs per ounce(5) | 683 | |||
(1) | Attributable production costs and related expenses of equity accounted joint ventures are included in the calculation of total cash costs per ounce and total production costs per ounce. | |
(2) | Relates solely to production costs as included in the Company’s consolidated financial statements and has, accordingly, been included in total production costs and total cash costs. | |
(3) | Adjusting for noncontrolling interest of items included in calculation, to disclose the attributable portions only. | |
(4) | Attributable production only. | |
(5) | In addition to the operational performances of the mines, total cash costs per ounce and total production costs per ounce are affected by fluctuations in the currency exchange rate. AngloGold Ashanti reports total cash costs per ounce and total production costs per ounce calculated to the nearest US dollar amount and gold produced in ounces. | |
(6) | Corporate includes non-gold producing subsidiaries. | |
(7) | Total cash costs per ounce calculation includes heap-leach inventory change. | |
(8) | There was no production attributable to AngloGold Ashanti in 2009. AngloGold Ashanti sold the 33.33 percent joint venture interest it held in Boddington Gold Mine to Newmont Mining during 2009. |
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Great Noligwa | Kopanang | Moab Khotsong | Tau Lekoa | Mponeng | Savuka | TauTona | Surface operations | Corporate(6) | ||||||||||||||||||||||||||||
Production costs | 152 | 128 | 74 | 78 | 155 | 29 | 125 | 41 | 13 | |||||||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||
Production costs of equity accounted joint ventures(1) | — | — | — | — | — | — | — | — | 9 | |||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||
Rehabilitation costs & other non-cash costs | — | — | (1 | ) | (2 | ) | (2 | ) | (1 | ) | (7 | ) | — | 26 | ||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||
Inventory movement | — | — | — | — | (1 | ) | — | — | — | — | ||||||||||||||||||||||||||
Royalties | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Related party transactions(2) | (1 | ) | (2 | ) | (1 | ) | (1 | ) | (3 | ) | — | (1 | ) | — | — | |||||||||||||||||||||
Adjusted for: | ||||||||||||||||||||||||||||||||||||
Noncontrolling interests(3) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Non-gold producing companies and adjustments | — | — | — | — | — | — | — | — | (32 | ) | ||||||||||||||||||||||||||
Total cash costs | 151 | 126 | 72 | 75 | 149 | 28 | 117 | 41 | 16 | |||||||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||
Depreciation, depletion and amortization | 32 | 53 | 50 | 25 | 44 | 5 | 37 | 3 | 12 | |||||||||||||||||||||||||||
Employee severance costs | 3 | 2 | — | 1 | 1 | — | 2 | — | — | |||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | — | — | 1 | 2 | 2 | 1 | 7 | — | (26 | ) | ||||||||||||||||||||||||||
Adjusted for: | ||||||||||||||||||||||||||||||||||||
Noncontrolling interests(3) | — | — | — | — | — | — | — | — | (8 | ) | ||||||||||||||||||||||||||
Non-gold producing companies and adjustments | — | — | — | — | — | — | — | — | (3 | ) | ||||||||||||||||||||||||||
Total production costs | 186 | 181 | 123 | 103 | 196 | 34 | 163 | 44 | (9 | ) | ||||||||||||||||||||||||||
Gold produced (000’ ounces)(4) | 330 | 362 | 192 | 143 | 600 | 66 | 314 | 92 | — | |||||||||||||||||||||||||||
Total cash costs per ounce(5) | 458 | 348 | 375 | 524 | 248 | 424 | 373 | 446 | — | |||||||||||||||||||||||||||
Total production costs per ounce(5) | 564 | 500 | 641 | 720 | 327 | 515 | 519 | 478 | — |
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UNITED | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GHANA | GUINEA | MALI | NAMIBIA | TANZANIA | AUSTRALIA | STATES OF AMERICA | ARGENTINA | BRAZIL | ||||||||||||||||||||||||||||||||||||||||||||||||
Cripple | AngloGold Ashanti | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Iduapriem | Obuasi | Siguiri | Morila | Sadiola | Yatela | Navachab | Geita | Boddington(8) | Sunrise Dam | Creek & Victor | Cerro Vanguardia | Brasil Mineracao | Serra Grande | |||||||||||||||||||||||||||||||||||||||||||
Production costs | 118 | 227 | 157 | — | — | — | 37 | 268 | (1 | ) | 231 | 70 | 99 | 106 | 52 | |||||||||||||||||||||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Production costs of equity accounted joint ventures(1) | — | — | — | 65 | 60 | 34 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rehabilitation costs & other non-cash costs | 1 | — | (1 | ) | — | — | 1 | (1 | ) | 5 | 1 | — | (3 | ) | (5 | ) | 1 | — | ||||||||||||||||||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory movement | 1 | (9 | ) | (3 | ) | (2 | ) | — | 1 | — | (65 | ) | — | 1 | 63 | (4 | ) | (4 | ) | — | ||||||||||||||||||||||||||||||||||||
Royalties | 5 | 9 | 31 | 9 | 9 | 3 | 2 | 7 | — | 10 | 2 | 12 | — | — | ||||||||||||||||||||||||||||||||||||||||||
Related party transactions(2) | — | — | — | — | — | 2 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Adjusted for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interests(3) | — | — | (28 | ) | — | — | — | — | — | — | — | — | (7 | ) | — | (26 | ) | |||||||||||||||||||||||||||||||||||||||
Total cash costs | 125 | 227 | 156 | 72 | 69 | 41 | 38 | 215 | — | 242 | 132 | 95 | 103 | 26 | ||||||||||||||||||||||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation, depletion and amortization | 24 | 81 | 36 | 13 | 32 | 2 | 4 | 55 | — | 46 | 31 | 17 | 42 | 17 | ||||||||||||||||||||||||||||||||||||||||||
Employee severance costs | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Rehabilitation and other non-cash costs | (1 | ) | — | 1 | — | — | (1 | ) | 1 | (5 | ) | (1 | ) | — | 3 | 5 | (1 | ) | — | |||||||||||||||||||||||||||||||||||||
Adjusted for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interests(3) | — | — | (5 | ) | — | — | — | — | — | — | — | — | (2 | ) | — | (8 | ) | |||||||||||||||||||||||||||||||||||||||
Total production costs | 148 | 308 | 188 | 85 | 101 | 42 | 43 | 265 | (1 | ) | 288 | 166 | 115 | 144 | 35 | |||||||||||||||||||||||||||||||||||||||||
Gold produced (000’ ounces)(4) | 200 | 357 | 333 | 170 | 172 | 66 | 68 | 264 | — | 433 | 258 | 154 | 320 | 87 | ||||||||||||||||||||||||||||||||||||||||||
Total cash costs per ounce(5) | 625 | 636 | 468 | 424 | 401 | 621 | 559 | 814 | — | 559 | (7) 310 | 617 | 322 | 299 | ||||||||||||||||||||||||||||||||||||||||||
Total production costs per ounce(5) | 740 | 863 | 565 | 500 | 587 | 636 | 632 | 1,004 | — | 665 | 643 | 747 | 450 | 402 | ||||||||||||||||||||||||||||||||||||||||||
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Total | ||||
Production costs per financial statements | 2,159 | |||
Plus: | ||||
Production costs of equity accounted joint ventures(1) | 168 | |||
Less: | ||||
Rehabilitation costs & other non-cash costs | 12 | |||
Plus/(less): | ||||
Inventory movement | (22 | ) | ||
Royalties | 99 | |||
Related party transactions(2) | (7 | ) | ||
Adjusted for: | ||||
Noncontrolling interests(3) | (61 | ) | ||
Non-gold producing companies and adjustments | (32 | ) | ||
Total cash costs | 2,316 | |||
Plus: | ||||
Depreciation, depletion and amortization | 661 | |||
Employee severance costs | 9 | |||
Rehabilitation and other non-cash costs | (12 | ) | ||
Adjusted for: | ||||
Noncontrolling interests(3) | (23 | ) | ||
Non-gold producing companies and adjustments | (3 | ) | ||
Total production costs | 2,948 | |||
Gold produced (000’ ounces)(4) | 4,982 | |||
Total cash costs per ounce(5) | 465 | |||
Total production costs per ounce(5) | 592 | |||
(1) | Attributable production costs and related expenses of equity accounted joint ventures are included in the calculation of total cash costs per ounce and total production costs per ounce. | |
(2) | Relates solely to production costs as included in the Company’s consolidated financial statements and has, accordingly, been included in total production costs and total cash costs. | |
(3) | Adjusting for noncontrolling interest of items included in calculation, to disclose the attributable portions only. | |
(4) | Attributable production only. | |
(5) | In addition to the operational performances of the mines, total cash costs per ounce and total production costs per ounce are affected by fluctuations in the currency exchange rate. AngloGold Ashanti reports total cash costs per ounce and total production costs per ounce calculated to the nearest US dollar amount and gold produced in ounces. | |
(6) | Corporate includes non-gold producing subsidiaries. | |
(7) | Total cash costs per ounce calculation includes heap-leach inventory change. | |
(8) | There was no production attributable to AngloGold Ashanti in 2008. | |
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Year ended December 31 | ||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||
(in millions) | $ | percent | $ | percent | $ | percent | ||||||||||||||||||
Category of activity | ||||||||||||||||||||||||
Total revenues | ||||||||||||||||||||||||
Product sales | 5,334 | 3,784 | 3,655 | |||||||||||||||||||||
Interest, dividends and other | 68 | 170 | 75 | |||||||||||||||||||||
Total revenues | 5,402 | 3,954 | 3,730 | |||||||||||||||||||||
Geographical area data | ||||||||||||||||||||||||
Total revenues | ||||||||||||||||||||||||
South Africa | 2,276 | 42 | 1,687 | 43 | 1,521 | 41 | ||||||||||||||||||
Continental Africa | 1,871 | 34 | 1,451 | 36 | 1,406 | 37 | ||||||||||||||||||
Australasia | 468 | 9 | 239 | 6 | 282 | 8 | ||||||||||||||||||
Americas | 1,125 | 21 | 804 | 20 | 702 | 19 | ||||||||||||||||||
Other, including Corporate and Non-gold producing subsidiaries | (6 | ) | — | 129 | 3 | — | — | |||||||||||||||||
5,734 | 4,310 | 3,911 | ||||||||||||||||||||||
Less : Equity method investments included above | (332 | ) | (6 | ) | (355 | ) | (8 | ) | (181 | ) | (5 | ) | ||||||||||||
Total revenues | 5,402 | 100 | 3,955 | 100 | 3,730 | 100 | ||||||||||||||||||
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As at December 31 | ||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||
$ | percent | $ | percent | $ | percent | |||||||||||||||||||
Geographical area data | ||||||||||||||||||||||||
Total segment assets | ||||||||||||||||||||||||
South Africa | 3,370 | 32 | 3,354 | 31 | 2,497 | 26 | ||||||||||||||||||
Continental Africa | 4,093 | 39 | 4,055 | 38 | 3,582 | 38 | ||||||||||||||||||
Australasia | 534 | 5 | 496 | 5 | 1,279 | 14 | ||||||||||||||||||
Americas | 2,170 | 21 | 2,012 | 19 | 1,717 | 18 | ||||||||||||||||||
Other, including Corporate, Assets held for sale and Non-gold producing subsidiaries | 221 | 2 | 745 | 7 | 376 | 4 | ||||||||||||||||||
Total segment assets | 10,388 | 100 | 10,662 | 100 | 9,451 | 100 | ||||||||||||||||||
Financial performance of AngloGold Ashanti | Year ended December 31 | |||||||||||
(in millions) | 2010 | 2009 | 2008 | |||||||||
Revenue | 5,402 | 3,954 | 3,730 | |||||||||
Cost and expenses | (5,021 | ) | (4,852 | ) | (4,103 | ) | ||||||
Taxation (expense)/benefit | (255 | ) | 33 | (22 | ) | |||||||
Equity income/(loss) in associates | 40 | 88 | (149 | ) | ||||||||
Discontinued operations | — | — | 23 | |||||||||
Net income attributable to noncontrolling interests | (54 | ) | (48 | ) | (42 | ) | ||||||
Net income/(loss) | 112 | (825 | ) | (563 | ) | |||||||
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Year ended December 31, | ||||||||
2010 | 2009 | |||||||
(in US Dollars, million) | ||||||||
Loss on realized non-hedge derivatives | 2,975 | 543 | ||||||
(Gain)/loss on unrealized non-hedge derivatives | (2,273 | ) | 876 | |||||
Fair value loss on option component of convertible bonds | 1 | 33 | ||||||
Net loss | 703 | 1,452 | ||||||
Year ended December 31, | ||||||||
2010 | 2009 | |||||||
(in US Dollars, million) | ||||||||
Fair value loss on mandatory convertible bonds | 83 | — | ||||||
Fair value movements on the mandatory convertible bonds relate to the ex interest NYSE closing price of these bonds. |
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Year ended December 31, | ||||||||
2009 | 2008 | |||||||
(in US Dollars, million) | ||||||||
Loss on realized non-hedge derivatives | 543 | 1,243 | ||||||
Loss/(gain) on unrealized non-hedge derivatives | 876 | (985 | ) | |||||
Fair value loss on option component of convertible bonds | 33 | — | ||||||
Net loss | 1,452 | 258 | ||||||
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1. | The issue of two rated US dollar bonds maturing in 10 and 30 years aggregating $1.0 billion. The net proceeds of $983 million were applied to repay and cancel amounts drawn under the $1.15 billion syndicated loan facility and the 2009 Term Facility; | ||
2. | The entering of a four year unsecured Syndicated loan facility with a group of banks for $1.0 billion of which $950 million remained undrawn as at December 31, 2010; | ||
3. | The entering of a ZAR1.5 billion ($222 million) short-term loan from FirstRand Bank Limited, of which $107 million was drawn as at December 31, 2010, to part fund the closing of the hedge book; and | ||
�� | |||
4. | The raising of aggregate net proceeds of $1,562 billion in equal parts of a dual tranche capital raising |
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• | the amount outstanding of $107 million under the FirstRand Bank Limited loan facility due in May 2011; | |
• | $8 million in interest payable under the $700 million 10 year bond (interest charged at 5.375 percent per annum; the loan is repayable in April 2020 and is US dollar-based); and | |
• | $4 million in interest payable under the $300 million 10 year bond (interest charged at 6.50 percent per annum; the loan is repayable in April 2040 and is US dollar-based). |
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• | $994 million outstanding under the $700 million 10 year and $300 million 30 year rated bonds issued April 2010 (interest charged at 5.375 percent and 6.50 percent, respectively, per annum; the bonds are repayable in April 2020 and April 2040, respectively, and are US dollar-based). | |
• | The fair value of $872 million outstanding under the Mandatory Convertible Bonds issued September 2010 (quarterly coupons are paid at 6 percent per annum; the bonds are convertible into ADS until their maturity in September 2013 and are US dollar-based). The principal of this bond will be settled by the issue of shares as mentioned earlier and only the interest payments will be settled in cash. | |
• | $630 million outstanding under the convertible bonds issued on May 22, 2009 (interest charged at 3.50 percent per annum; the bonds are convertible, at holders’ option, into ADS up to May 2014 and are US dollar-based). | |
• | $50 million outstanding under the $1 billion Syndicated loan facility issued in April 2010 (interest charged at Libor plus 1.750 percent per annum; the loan is repayable in April 2014 and is US dollar-based). |
• | $39 million is repayable to Turbine Square Two (Proprietary) Limited for buildings financed (interest charged at an implied rate of 9.8 percent per annum, lease payments are payable in monthly installments terminating in March 2022, are rand-based and the buildings financed are used as security for these loans). | |
• | $10 million is repayable to Caterpillar Financial Services Corporation (Interest charged at an average rate of 5.46 percent per annum. Loans are repayable in monthly installments terminating in January 2015 and are US dollar-based. The equipment financed is used as security for these loans.) |
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$ (million) | ||||
Unsecured loans | 2,679 | |||
Secured capital leases | 58 | |||
Total | 2,737 | |||
Less: Short-term maturities | 135 | |||
Long-term debt | 2,602 | |||
$ (million) | ||||
2011 | 135 | |||
2012 | 8 | |||
2013 | 877 | |||
2014 | 685 | |||
2015 | 2 | |||
Thereafter | 1,030 | |||
Total | 2,737 | |||
$ (million) | ||||
United States dollars | 2,585 | |||
South African rands | 146 | |||
Brazilian real | 6 | |||
Total | 2,737 | |||
$ (million) | ||||
Syndicated Loan Facility ($1,0 billion) — US dollar | 950 | |||
FirstRand Bank Limited — US dollar | 50 | |||
Absa Bank Limited — US dollar | 42 | |||
FirstRand Bank Limited — rands | 139 | |||
Standard Bank of South Africa Limited — rands | 28 | |||
Nedbank Limited — rands | 18 | |||
Absa Bank Limited — rands | 5 | |||
Total undrawn | 1,232 | |||
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Expiration per Period | ||||||||||||||||||||
Total | Less than 1 | 1 - 3 | 4 - 5 | Over 5 | ||||||||||||||||
Commitment | amount | year | years | years | years | |||||||||||||||
(in millions) | $ | $ | $ | $ | $ | |||||||||||||||
Capital expenditure (contracted and not yet contracted)(1) | 1,164 | 837 | 327 | — | — | |||||||||||||||
Guarantees | 2,864 | 15 | 791 | 786 | 1,272 | |||||||||||||||
Other commercial commitments(2) | 538 | 398 | 81 | 41 | 18 | |||||||||||||||
Total | 4,566 | 1,250 | 1,199 | 827 | 1,290 | |||||||||||||||
(1) | Including commitments through contractual arrangements with equity accounted joint ventures of $12 million (2009: $6 million). | |
(2) | Excludes commitments through contractual arrangements with equity accounted joint ventures. |
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$ (million) | ||||
Fair value of derivatives at January 1, 2010 | (2,366 | ) | ||
Derivatives realized or otherwise settled during the year | 2,975 | |||
Fair value of other new contracts entered into during the year | — | |||
Change in fair value of derivatives during the year (1) | (780 | ) | ||
Option component of convertible bonds | (1 | ) | ||
Embedded derivatives | 1 | |||
Warrants on shares | (4 | ) | ||
Fair value of derivatives at December 31, 2010 | (175 | ) | ||
(1) | Net losses on revaluation of derivatives. |
$ (million) | ||||
Derivatives — current assets | 1 | |||
Derivatives — non-current assets | — | |||
Derivatives — current liabilities | — | |||
Derivatives — non-current liabilities | (176 | ) | ||
Derivatives — net liabilities | (175 | ) | ||
Fair value of derivatives at December 31 | ||||||||||||||||||||
Maturity | Maturity | Maturity | Maturity | |||||||||||||||||
less than | 1 - 3 | 4 - 5 | excess of | Total Fair | ||||||||||||||||
Source of fair value | 1 year | years | years | 5 years | value | |||||||||||||||
(in millions) | $ | $ | $ | $ | $ | |||||||||||||||
Prices actively quoted | — | — | — | — | — | |||||||||||||||
Prices provided by other external sources | — | — | �� | — | — | — | ||||||||||||||
Prices based on models and other valuation methods(1) | 1 | — | (176 | ) | — | (175 | ) | |||||||||||||
(1) | Fair value of volatility-based instruments (i.e. options) are calculated based on market prices, volatilities, credit risk and interest rates. |
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a. | There is a probable future benefit; | |
b. | AngloGold Ashanti can obtain the benefit and control access to it; and | |
c. | The transaction or event giving rise to it has already occurred. |
2010 | 2009 | 2008 | ||||||||||
Net income ($ millions) | 27 | 16 | 10 | |||||||||
Earnings per share (cents)(1) | 7 | 4 | 3 | |||||||||
Retained income — January 1 ($ millions) | 86 | 70 | 60 | |||||||||
Retained income — December 31 ($ millions) | 113 | 86 | 70 | |||||||||
(1) | Impact per basic and diluted earnings per common share. |
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• | Effects on results of operations |
• | Change in pension trends |
• | Sensitivity analysis |
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Less than | 1-3 | 3-5 | More than | |||||||||||||||||
Contractual Obligations | Total | 1 year | years | years | 5 years | |||||||||||||||
(in millions) | $ | $ | $ | $ | $ | |||||||||||||||
Long-term debt obligations including interest(1) | 3,935 | 252 | 1,146 | 829 | 1,708 | |||||||||||||||
Capital lease obligations | 92 | 10 | 19 | 15 | 48 | |||||||||||||||
Operating lease obligations | 27 | 18 | 8 | 1 | — | |||||||||||||||
Purchase obligations | ||||||||||||||||||||
- Contracted capital expenditure(2) | 176 | 176 | — | — | — | |||||||||||||||
- Other purchase obligations(3) | 538 | 398 | 81 | 41 | 18 | |||||||||||||||
Environmental rehabilitation costs(4) | 2,512 | 84 | 48 | 67 | 2,313 | |||||||||||||||
Derivatives(5) | 176 | — | — | 176 | — | |||||||||||||||
Pensions and other post retirement medical obligations(6) | 194 | 16 | 35 | 35 | 108 | |||||||||||||||
Uncertain taxes(7) | 52 | — | 46 | — | 6 | |||||||||||||||
Total | 7,702 | 954 | 1,383 | 1,164 | 4,201 | |||||||||||||||
(1) | Interest calculations are at the rate existing at the year end. Actual rates are set at floating rates for some of the debt (Refer Note 19 of Item 18). Certain of these obligations will be settled by the issue of equity, refer item 5B Liquity and capital resources. | |
(2) | Represents contracted capital expenditure for which contractual obligations exist. Amounts stated include commitments of equity accounted joint ventures. | |
(3) | Other purchase obligations represent contractual obligations for mining contract services, purchase of power, supplies, consumables, inventories, explosives and activated carbon. Amounts stated exclude purchase obligations of equity accounted joint ventures. | |
(4) | Operations of gold mining companies are subject to extensive environmental regulations in the various jurisdictions in which they operate. These regulations establish certain conditions on the conduct of operations by AngloGold Ashanti. Pursuant to environmental regulations, AngloGold Ashanti is also obligated to close their operations and reclaim and rehabilitate the lands upon which it conducted its mining and gold recovery operations. The present estimated closure costs at existing operating mines and mines in various stages of closure are reflected in this table. For more information of environmental rehabilitation obligations, see “Item 4B.: Business overview — Sustainable development : Environment, community and human rights”. Amounts stated include a total estimated liability of $54 million in respect of equity accounted joint ventures. | |
(5) | Estimated fair value of all derivatives. Also see “Item 5B.: Liquidity and capital resources — Derivatives accounted for at fair value”. Amounts stated include derivatives of equity accounted joint ventures. Warrants on shares of $1 million dollars not included in derivatives total. | |
(6) | Represents payments for unfunded plans or plans with insufficient funding. | |
(7) | Certain of the uncertain tax positions will prescribe in 2014. |
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Year first | ||||||||||
Name | Age | Position | appointed(1) | |||||||
Mark Cutifani | 52 | Executive director and chief executive officer | 2007 | |||||||
Srinivasan Venkatakrishnan | 45 | Executive director, and chief financial officer | 2005 | |||||||
Tito T Mboweni(3) | 51 | Independent non-executive director and chairman | 2010 | |||||||
Thokoana J. (James) Motlatsi(4)(5) | 59 | Independent non-executive director and deputy chairman | 1998 | |||||||
Frank B. Arisman(2) | 66 | Independent non-executive director | 1998 | |||||||
Rhidwaan Gasant(2) | 51 | Independent non-executive director | 2010 | |||||||
William (Bill) A Nairn | 66 | Independent non-executive director | 2001 | |||||||
Lumkile W (Wiseman) Nkuhlu(2) | 66 | Independent non-executive director | 2006/2009 | |||||||
Ferdinand Ohene-Kena | 74 | Independent non-executive director | 2010 | |||||||
Sipho M Pityana | 51 | Independent non-executive director | 2007 | |||||||
(1) | Directors who do not have a contract of employment with the company (non-executive directors) serve for a period of three years unless re-elected. At each annual general meeting, directors appointed since the previous annual general meeting are required to retire, but are eligible for re-election. In addition, one-third of the non-executive directors (rounded down to the next whole number), must retire according to seniority or by lot but may be re-elected. | |
(2) | Member of the audit and corporate governance committee. | |
(3) | Appointed as chairman with effect from June 1, 2010. | |
(4) | Appointed as deputy chairman with effect from May 1, 2002. | |
(5) | Resigned from the board effective February 17, 2011. |
BE (Min. Eng)
Chief executive officer
BCom, ACA (ICAI)
Chief financial officer
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BA, MA, (Development Economics)
Chairman and independent non-executive
Hon DSoc Sc (Lesotho)
Deputy chairman and independent non-executive
MSc (Finance)
Independent non-executive
CA (SA), ACIMA
Independent non-executive
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MSc Engineering, DIC, ACSM
Independent non-executive
BSc (Mining Engineering)
Independent non-executive
BCom, CA (SA), MBA (New York University)
Independent non-executive
BA (Hons) (Essex), MSc (London), Dtech (Honoris) (Vaal University of Technology)
Independent non-executive
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BA (Hons), DPhil, EDP
Executive Vice President — Business Strategy and
Organizational Effectiveness
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BCom, MBA
Executive Vice President — Continental Africa
BSc Hons, MAusIMM, MAICD
Executive Vice President — Australasia
BSc (Min. Eng), MBA
Executive Vice President — Americas
BA, HED, DPLR, SMP
Executive Vice President — South Africa
BSc (Mining Engineering), MBA
Executive Vice President — Business and Technical Development
FAE, BSc (Mech Eng)
Executive Vice President — Business Sustainability
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BA LLB, MAP, EXMPM
Senior Vice President — Corporate Affairs
FCIS, FCIBM
MSc (Mining Engineering), BSc (Hons) (Geology), MAusIMM
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√ | Director attended meeting. | |
X | Apologies received from director prior to meeting and leave of absence granted. | |
— | Attendance not required as director was not a member of the board or committee at the time of the meeting. |
Members | February 11 | March 9 | May 4 | August 5 | November 8 | |||||||||||||||
Mr SM Pityana (Chairman) | √ | √ | √ | √ | √ | |||||||||||||||
Mr FB Arisman | √ | √ | √ | √ | √ | |||||||||||||||
Mr RP Edey(1) | √ | √ | √ | — | — | |||||||||||||||
Dr TJ Motlatsi | X | √ | √ | √ | √ | |||||||||||||||
Prof LW Nkuhlu | √ | √ | √ | √ | √ | |||||||||||||||
By invitation | ||||||||||||||||||||
Mr M Cutifani | √ | √ | √ | √ | √ | |||||||||||||||
Mr TT Mboweni(2) | — | — | — | √ | √ | |||||||||||||||
(1) | Retired on May 7, 2010 | |
(2) | Appointed on August 1, 2010 |
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• | attract, reward and retain executives of the highest caliber; | |
• | align the behavior and performance of executives with the company’s strategic goals, in the overall interests of shareholders; | |
• | ensure the appropriate balance between short-, medium- and long-term rewards and incentives, with the latter being closely linked to structured company performance targets and strategic objectives that are in place from time to time; and | |
• | ensure that senior regional management is competitively rewarded within a global remuneration policy, which recognizes both local and global market practice. |
• | the remuneration packages for executive directors of the company including, but not limited to, basic salary, performance-based short- and long-term incentives, pensions, and other benefits; and | |
• | the design and operation of the company’s executive share option and other share incentive schemes. |
• | to attract, reward and retain executives of the highest caliber, executive remuneration is benchmarked against a comparator group of global and selected South African mining and multi-national companies. The most recent benchmarking exercise conducted by independent consultants, PWC, indicates that the total remuneration of the executive directors is above the median of the comparator group, but the remuneration of the executive vice presidents (EVP) lags that of the peer group. Specific cash-based retention plans (settled after a three-year period) have been put in place to address this issue. However, a systemic adjustment of the remuneration levels for executives and senior management is required to ensure that the company’s remuneration levels are consistent with global pay levels in the mining sector, and that the company can compete effectively in the global market; | |
• | to ensure the appropriate balance between short-, medium- and long-term incentives, annual remuneration is a combination of base pay and short- and long-term incentives, with salary comprising about 35 percent — 45 percent of annual remuneration if the bonus and LTIP targets are partially achieved. Full achievement of the BSP and LTIP targets results in salary comprising between 24 percent and 35 percent of total annual remuneration; and | |
• | to align the behavior and performance of executives with the company’s strategic goals, all incentive plans align performance targets with shareholder interests. The quantum of the short-term incentive and the related bonus shares are determined with respect to current performance and the vesting of the LTIP awards is determined with respect to company performance over the three years following the date of grant. |
• | Performance drivers on the STI (Short Term Incentive) scheme (BSP) and the LTI (Long Term Incentive) scheme (LTIP) are duplicated ie. EPS, resource to reserve conversion and safety. The duplicated drivers are key to success of the company and therefore, at least for now, the drivers will remain as is; | |
• | Executive contracts do not contain a shorter notice period in the event of dismissal; | |
• | AngloGold Ashanti does have compensation for executives in the event of severance as a result of a change in control. This is felt necessary in order to retain executives particularly during turbulent economic times and while the company undergoes significant change in numerous areas; and | |
• | AngloGold Ashanti does, in some countries, pay salaries which are on average above the median of the market. This is also felt necessary in order to retain the key skills already within the company and to attract talented individuals, particularly in those countries where there are shortages of critical skills. |
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• | Basic salary; | |
• | Pensions and risk benefits; | |
• | Other benefits; | |
• | Retention award; | |
• | Short-term incentive; and | |
• | Long-term incentive. |
• | Basic salaryis subject to annual review by the Remuneration Committee and is reviewed with reference to market data of a group of comparator companies in the South African and relevant international markets. The median of the comparator group is the primary point of reference for the remuneration policy. However, the transition from a primarily South African company to a global company has resulted in the actual remuneration of management below the executive director level, lagging significantly. The individual salaries of the executive management are reviewed annually in accordance with their own performance, experience, responsibility and company performance. | |
• | Pensions and risk benefits: There are a range of retirement funds to which the executive management belong, which is dependent on the country in which they work and the individual’s nationality. For example, the South African executive management belong to either the AngloGold Ashanti Pension Fund or the Evergreen Provident Fund. Executive management who are non-South African citizens but working in South Africa have the option of electing a retirement benefit in their country and currency of choice, in which case, the company contributes an amount equal to the contribution made for other AngloGold Ashanti executives. Death and disability cover reflects best practice amongst comparable employers in South Africa. | |
• | Other benefits: Executive management are members of an external medical aid scheme, which covers the individual and his/her immediate family. | |
• | Bonus Share Plan (BSP)is a short-term incentive plan under which award levels are determined with reference to the achievement of a set of stretched company and individual performance targets. For 2010, the company targets were based on performance measures including: |
• | earnings per share (EPS); | ||
• | gold production; | ||
• | cost control; and | ||
• | resource to reserve conversion. |
• | a cash bonus, which may not exceed 50 percent of the maximum bonus allocated per level, is payable at the end of the relevant financial year; and | |
• | an equity bonus to the equivalent value of the cash bonus, settled by way of BSP share awards, which together with the cash bonus, may not exceed the maximum bonus. |
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On target | ||||||||||||||||
BSP award | ||||||||||||||||
(face value | ||||||||||||||||
Maximum | On target | On target | at date of | |||||||||||||
Position | bonus | bonus | cash bonus | grant) | ||||||||||||
Chief executive officer | 160 | % | 80 | % | 40 | % | 40 | % | ||||||||
Executive directors | 140 | % | 70 | % | 35 | % | 35 | % | ||||||||
Executive management | 120 | % | 60 | % | 30 | % | 30 | % | ||||||||
Other management | 100 | % | 50 | % | 25 | % | 25 | % | ||||||||
• | EPS; | |
• | total shareholder return (TSR) against a comparator group of gold mining companies; | |
• | safety; and | |
• | resource generation. |
1. | Earnings per share(30 percent weighting) | |
EPS growth of at least 2 percent, net of US inflation per year over the three-year vesting period. Partial vesting occurs at 2 percent growth per year and full vesting at 5 percent growth per year. | ||
2. | Total shareholder returns(30 percent weighting) | |
TSR relative to a group of global peer gold mining companies. For vesting of the 2009 and 2010 LTIP awards to occur, the company’s TSR has to be at least equal to the third place performer from the comparator group for partial vesting, and second or better for full vesting. | ||
3. | Strategic target(40 percent weighting) The strategic target is divided into two parts: |
i) | Safety performance(20 percent weighting) | ||
The company’s safety performance has become the primary strategic target from an operating perspective and it is essential that the company’s performance shows significant improvement. The target is a 20 percent year-on-year improvement in fatal injuries (FIFR) and in lost-time injuries (LTIFR) during the period. For partial vesting a minimum of a 10 percent improvement per year must be achieved. | |||
ii) | Reserve and resource ounce generation(20 percent weighting) | ||
The target is at least 9 million ounces at the measured and indicated resource level, and 5 million ounces at the published reserves level for full vesting, and 7 million ounces and 3 million ounces respectively for partial vesting. |
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Maximum | ||||
Position | face value | |||
Chief executive officer | 120 | % | ||
Executive directors | 100 | % | ||
Executive management | 80 | % | ||
Other management | 80 | % | ||
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Pre-tax gain on share | ||||||||||||||||||||||||||||||||
Appointment(2) | Performance related | Pension scheme | Other | Encashed | options | |||||||||||||||||||||||||||
All figures in $000(1) | From/To | Salary | payments(3) | contributions(4) | Benefits(4) | leave(5) | exercised(6) | Total | ||||||||||||||||||||||||
Executive directors’ remuneration 2010 | ||||||||||||||||||||||||||||||||
M Cutifani | Full year | 1,567 | 1,170 | 286 | 47 | — | — | 3,070 | ||||||||||||||||||||||||
S Venkatakrishnan | Full year | 961 | 681 | 179 | 303 | — | — | 2,124 | ||||||||||||||||||||||||
2,528 | 1,851 | 465 | 350 | — | — | 5,194 | ||||||||||||||||||||||||||
Executive management (non-directors) — top three earners remuneration 2010 | ||||||||||||||||||||||||||||||||
Top earner 1 | Full year | 1,209 | 545 | 269 | 117 | — | — | 2,140 | ||||||||||||||||||||||||
Top earner 2 | Full year | 626 | 339 | 109 | 254 | — | 409 | 1,737 | ||||||||||||||||||||||||
Top earner 3 | Full year | 547 | 233 | 57 | 162 | — | 456 | 1,455 | ||||||||||||||||||||||||
2,382 | 1,117 | 435 | 533 | — | 865 | 5,332 | ||||||||||||||||||||||||||
Remainder of Executive management’s remuneration 2010 representing 5 executive managers | Full year | 2,627 | 1,501 | 360 | 720 | 19 | 389 | 5,616 | ||||||||||||||||||||||||
Total Remuneration 2010, comprising: | ||||||||||||||||||||||||||||||||
Executive directors and Executive management (incorporating Top-three earners and remaining executive management) | 7,537 | 4,469 | 1,260 | 1,603 | 19 | 1,254 | 16,142 | |||||||||||||||||||||||||
Executive directors’ remuneration 2009 | ||||||||||||||||||||||||||||||||
M Cutifani | Full year | 1,294 | 910 | 228 | 76 | — | — | 2,508 | ||||||||||||||||||||||||
S Venkatakrishnan | Full year | 785 | 512 | 143 | 232 | — | 313 | 1,985 | ||||||||||||||||||||||||
2,079 | 1,422 | 371 | 308 | — | 313 | 4,493 | ||||||||||||||||||||||||||
Executive management’s remuneration 2009 representing 10 executive management | Full year | 4,488 | 2,029 | 537 | 1,208 | 47 | 2,430 | 10,739 | ||||||||||||||||||||||||
Total executive directors, and executive management remuneration 2009 | 6,567 | 3,451 | 908 | 1,516 | 47 | 2,743 | 10,143 | |||||||||||||||||||||||||
(1) | Where directors’ compensation is paid in South African rands, for the purposes of this annual report on Form 20-F, the rand values have been converted to US dollar using the following year-to-date average rate of exchange R7.3028:$ (2009: R8.38510:$). | |
(2) | Salaries are disclosed only for the period from or to which office was held. | |
(3) | In order to more accurately disclose remuneration received/receivable by executive directors and executive management, the tables above include the performance related payments calculated on the year’s financial results. | |
(4) | Includes health care, personal travel and retention payments. | |
(5) | Pursuant to AngloGold Ashanti’s policy regarding the number of leave days that may be accrued, all surplus leave days accrued are compulsorily encashed. | |
(6) | In 2009,Mr Venkatakrishnan applied all of the proceeds after tax from the sale of his share options to acquire 5,130 ordinary shares (2008: 4,569) in AngloGold Ashanti. Of the 92,452 share options exercised by the executive management, the proceeds from the sale of 48,595 options were used to acquire 16,911 ordinary shares in AngloGold Ashanti (2008: of the 15,563 share options exercised by the executive management, the proceeds from the sale of 12,963 options were used to acquire 2,304 ordinary shares in AngloGold Ashanti). |
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1.1 | Non-Executive Directors’ fees for six board meetings per annum |
Current fee per | Increased fee per | |||||
1.1 | Board Meetings | annum | annum | |||
1.1.1 | South African resident Chairman | R1,520,300 | R1,672,330 | |||
1.1.2 | South African resident Deputy Chairman | R650,000 | R747,500 | |||
1.1.3 | South African resident directors | R270,000 | R310,500 | |||
1.1.4 | Non-South African resident directors who are resident in Africa | US$33,750 | US$42,188 | |||
1.1.5 | Non-South African resident directors who are resident in jurisdictions other than Africa | US$60,000 | US$66,000 |
1.2 | Allowance for attendance by non-executive directors at additional board meetings | |
Each non-executive director will be entitled to an allowance for each board meeting attended by such director, in addition to the six scheduled board meetings per annum, as follows: |
Current fee per | Increased fee per | |||||
1.2 | Additional Board Meetings | meeting | meeting | |||
1.2.1 | South African resident Chairman | R78,000 | R85,800 | |||
1.2.2 | South African resident Deputy Chairman | R32,400 | R37,260 | |||
1.2.3 | South African resident directors | R16,000 | R18,400 | |||
1.2.4 | Non-South African resident directors who are resident in Africa | US$2,000 | US$2,500 | |||
1.2.5 | Non-South African resident directors who are resident in jurisdictions other than Africa | US$3,000 | US$3,300 |
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1.3 | Travel allowance to be paid to non-executive directors who travel from outside South Africa to attend board meetings | |
Each non-executive director who is not in South Africa and who travels to attend board meetings will be entitled to receive a travel allowance on the basis set out below. In addition to the travel allowance payable, the company will cover all accommodation and sundry costs. The travel allowance for directors outside South Africa who attend board meetings is as follows: |
Current fee per | Increased fee per | |||||
1.3 | Additional Board Meetings | meeting | meeting | |||
1.3.1 | South African resident directors | Rnil | Rnil | |||
1.3.2 | Non-South African resident who are resident in Africa | US$6,000 | US$7,500 | |||
1.3.3 | Non-South African resident directors who are resident in jurisdictions other than Africa | US$8,000 | US$8,800 |
2.1 | Board committee fees payable to non-executive directors | |
The fee paid to each non-executive director in respect of such director’s membership of a committee of the board will be increased with effect from June 1, 2011 on the basis set out below: |
Current fee per | Increased fee per | |||||
2.1 | Board Committee Meetings | annum | annum | |||
Audit and Corporate Governance Committee | ||||||
2.1.1 | Chairman — South African resident | R160,000 | R184,000 | |||
2.1.2 | Member — South African resident | R135,000 | R155,250 | |||
2.1.3 | Member — Non-South African resident who are resident in Africa | US$16,875 | US$21,094 | |||
2.1.4 | Member — Non-South African resident who are resident in jurisdictions other than Africa | US$25,315 | US$27,847 | |||
Other Committees (being Investment, Remuneration, Safety, Health and Sustainable Development, Transformation and Human Resource Development, Risk and Information Integrity and such other committees of the board as may be established from time to time) | ||||||
2.1.5 | Chairman — South African resident | R130,000 | R149,500 | |||
2.1.6 | Chairman — Non-South African resident who is resident in Africa | US$16,250 | US$20,313 | |||
2.1.7 | Chairman — Non-South African resident who are resident in jurisdictions other than Africa | US$25,000 | US$27,500 | |||
2.1.8 | Member — South African resident | R110,000 | R126,500 | |||
2.1.9 | Member — Non-South African resident who is resident in Africa | US$13,750 | US$17,188 | |||
2.1.10 | Member — Non-South African resident who is resident in jurisdictions other than Africa | US$20,000 | US$22,000 |
2.2 | Fees payable to non-executive directors in respect of their attendance at meetings of committees of the board which meet on an ad hoc basis | |
Each non-executive director will be entitled to an allowance for each board committee meeting attended by such director in respect of those committees which meet on an ad hoc basis, including, the Financial Analysis committee, the Party Political Donations committee, the Nominations committee and any special purpose committee established by the board as follows: |
Current fee per | Increased fee per | |||||
2.2 | Board Committee and Special Purpose Committee | meeting | meeting | |||
2.2.1 | South African resident directors | R16,200 | R18,630 | |||
2.2.2 | Non-South African resident who are resident in Africa | US$2,025 | US$2,531 | |||
2.2.3 | Non-South African resident directors who are resident in jurisdictions other than Africa | US$3,000 | US$3,300 |
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Com- | Com- | |||||||||||||||||||||||||||||||||||||||
Directors’ | mittee | Directors’ | mittee | |||||||||||||||||||||||||||||||||||||
All figures stated to the | Appointment | fees(3) | fees | Travel(4) | Total | fees(3) | fees | Travel(4) | Total | |||||||||||||||||||||||||||||||
nearest $000(1) | From(2) | To(2) | 2010 | 2009 | ||||||||||||||||||||||||||||||||||||
RP Edey (outgoing Chairman) | May 7, 10 | 114 | 30 | 20 | 164 | 204 | 38 | 40 | 282 | |||||||||||||||||||||||||||||||
T T Mboweni (Chairman) | June 1, 10 | 121 | 14 | — | 136 | — | — | — | — | |||||||||||||||||||||||||||||||
Dr TJ Motlatsi (Deputy chairman) | 86 | 51 | — | 137 | 67 | 33 | — | 100 | ||||||||||||||||||||||||||||||||
FB Arisman | 51 | 86 | 32 | 169 | 40 | 36 | 26 | 102 | ||||||||||||||||||||||||||||||||
RE Bannerman | May 15, 09 | — | — | — | — | 14 | 8 | 10 | 32 | |||||||||||||||||||||||||||||||
R Gasant | Aug 12, 10 | 15 | 16 | — | 31 | — | — | — | — | |||||||||||||||||||||||||||||||
JH Mensah | May 15, 09 | — | — | — | — | 14 | 12 | 5 | 31 | |||||||||||||||||||||||||||||||
WA Nairn | 36 | 58 | — | 94 | 27 | 34 | — | 61 | ||||||||||||||||||||||||||||||||
Prof LW Nkuhlu(5) | 36 | 67 | — | 103 | 29 | 31 | — | 60 | ||||||||||||||||||||||||||||||||
F Ohene-Kena | June 1, 10 | 19 | 15 | 11 | 45 | — | — | — | — | |||||||||||||||||||||||||||||||
SM Pityana | 36 | 73 | — | 109 | 27 | 47 | — | 74 | ||||||||||||||||||||||||||||||||
Total — non-executive directors | 514 | 410 | 63 | 987 | 422 | 239 | 81 | 742 | ||||||||||||||||||||||||||||||||
(1) | Where non-executive directors’ compensation is paid in South African rands, for the purposes of this annual report on Form 20-F, the rand values have been converted to US dollars using the following yearly average rate of exchange: 2010: R7.30280:$1 and 2009: R8.38510:$1. | |
(2) | Fees are disclosed only for the period from or to which, office is held. | |
(3) | At the annual general meeting of shareholders held on May 7, 2010 shareholders approved an increase in directors’ fees with effect from June 1, 2010 as follows: |
For six | Additional | |||||||||||
meetings | per meeting | Travel(4) | ||||||||||
— Chairman | R1,520,300 | R78,000 | $ | 10,000 | ||||||||
— Deputy chairman | R650,000 | R32,400 | — | |||||||||
— South African resident directors | R270,000 | R16,000 | — | |||||||||
— Non-South African directors | ||||||||||||
— Living in Africa | $ | 33,750 | $ | 2,000 | $ | 6,000 | ||||||
— Living other than Africa | $ | 60,000 | $ | 3,000 | $ | 8,000 |
Audit | ||||||||||||
and Corporate | ||||||||||||
Governance | Other | Ad hoc | ||||||||||
committee | committees | committees | ||||||||||
(per annum) | (per annum) | (per meeting) | ||||||||||
— Chairman — South African resident | R160,000 | R130,000 | — | |||||||||
— Chairman — Living in Africa | — | $ | 16,250 | — | ||||||||
— Chairman — Living other than Africa | — | $ | 25,000 | — | ||||||||
— South African resident members | R135,000 | R110,000 | R16,200 | |||||||||
— Non-South African members | ||||||||||||
— Living in Africa | $ | 16,875 | $ | 13,750 | $ | 2,025 | ||||||
— Living other than Africa | $ | 25,315 | $ | 20,000 | $ | 3,000 |
(4) | A payment of a travel allowance, per board meeting, is paid to non-executive directors who travel internationally to attend board meetings. In addition, AngloGold Ashanti is liable for the payment of all travel costs. | |
(5) | Dr Motlatsi retired from the board effective February 17, 2011. |
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• | authority of the board; | |
• | composition of the board; | |
• | membership and appointment to the board; | |
• | role and responsibility of the board; | |
• | procedures of the board; | |
• | board committees; | |
• | matters reserved for board decision; | |
• | the board’s relationship with shareholders; | |
• | meeting procedures and proceedings; | |
• | share dealings by directors; | |
• | management of risks; | |
• | corporate governance; | |
• | remuneration issues; | |
• | evaluation of board performance and induction of new directors; and | |
• | declaration of interests. |
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1. | An independent director is a non-executive director of the board who: |
a. | Is not a representative or officer of a significant shareholder of the company. For purposes of this policy the term “significant shareholder” means a shareholder who owns, directly or indirectly, more than 5 percent of the company’s issued share capital or a shareholder who has the ability to influence the decisions of the board and/or management. The term “officer” shall mean a director or company secretary of the shareholder, any person identified as an officer according to the requirements of any relevant laws; any person who has the capacity to influence significant business and/or financial decisions of the shareholder (including decisions affecting the relationship with AngloGold Ashanti) or who is appointed to any capacity within the shareholder by its board or any of its board committees; |
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b. | Has not been employed in an executive capacity by the company or the group for the preceding three financial years. For purposes of this policy the term “executive capacity” means any employee whose appointment requires the approval of the Remuneration Committee, Nominations Committee or the Audit and Corporate Governance Committee of the board; | ||
c. | Has not been the auditor of the company for the preceding three financial years; | ||
d. | Is not a professional adviser to the company other than in his or her capacity as a director of the company; | ||
e. | Does not have a material interest in a contract with the company or is not employed by a company that has a material interest in a contract with the company. For purposes of this policy the term “material interest in a contract” means, as a guideline, any contract which is: |
(i) | The greater of 0.5 percent of AngloGold Ashanti’s total gross revenue in the preceding financial year or $20 million whichever is the greater; and | ||
(ii) | Even if the limit mentioned in (i) above is not exceeded, the board will consider whether the contract is deemed material to either contracting side taking into account all relevant facts including (but not limited to) the value of the contract relative to the total business of each party and the importance of the business relationship to the parties. |
f. | Is free of any other business or other relationship which could be perceived to materially interfere with the individual’s capacity to act independently of other board members, management or the individual’s own interests; | ||
g. | Receives remuneration for services as a director in the form of cash and shares (but not share options); and | ||
h. | Objectively conducts himself or herself in a manner displaying independence of thought, judgment and action. |
2. | For purposes of determining the independence of directors the criteria above will apply mutatis mutandis to the immediate family members of the director. For purposes of this policy the term “immediate family member” shall include any of the following persons who are related to the director in question: spouse, children and grandchildren; parents, parents-in-law and grandparents; siblings and the children, spouses and grandchildren of any of these siblings. | |
3. | The board will annually review which of its members are independent having regard to this policy and relevant facts. |
• | composition of the board; | |
• | setting of performance objectives; | |
• | board contribution to development of strategy; | |
• | board response to crisis; | |
• | board awareness of developments in regulatory and market environments; | |
• | composition of board committees; | |
• | effectiveness of board committees in fulfilling the mandate; |
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• | evaluation of the relationship between the board and management, shareholders and among members of the board itself; | |
• | board meetings and their effectiveness; | |
• | board succession; | |
• | corporate governance and legal issues facing the board/company; and | |
• | the performance evaluation of executive directors is conducted by the Remuneration Committee. |
√ | Director attended meeting. |
X | Apologies received from director prior to meeting and leave of absence granted. |
— | Attendance not required as director was not a member of the board or committee at the time of the meeting. |
▲ | Recused from meeting due to conflict of interest |
Feb 16 | Feb 22 | Apr 20 | May 5 | May 6 | Aug 10 | Sep 9 | Nov 9 | Nov 17 | ||||||||||
(quarterly | (special | (special | (quarterly | (strategy | (quarterly | (special | (quarterly | (budget | ||||||||||
Members | meeting) | meeting) | meeting) | meeting) | meeting) | meeting) | meeting) | meeting) | meeting) | |||||||||
Mr TT Mboweni(1) (Chairman) | — | — | — | — | √(6) | √ | √ | √ | √ | |||||||||
Mr RP Edey(2)(Chairman) | √ | √ | √ | √ | √ | — | — | — | — | |||||||||
Dr TJ Motlatsi(3) | X | √ | X | √ | √ | √ | X | √ | √ | |||||||||
Mr FB Arisman | √ | √ | √ | √ | √ | √ | √ | √ | √ | |||||||||
Mr R Gasant(4) | — | — | — | — | — | — | √ | √ | √ | |||||||||
Mr M Cutifani | √ | √ | X | √ | √ | √ | √ | √ | √ | |||||||||
Mr WA Nairn | √ | X | √ | √ | √ | √ | √ | √ | √ | |||||||||
Prof LW Nkuhlu | √ | √ | √ | √ | √ | √ | √ | √ | √ | |||||||||
Mr F Ohene-Kena(5) | — | — | — | — | — | √ | X | √ | √ | |||||||||
Mr SM Pityana | √ | ▲ | √ | √ | √ | √ | X | √ | √ | |||||||||
Mr S Venkatakrishnan | √ | √ | √ | √ | √ | √ | √ | √ | √ | |||||||||
(1) | Appointed to the board as chairman on June 1, 2010 | |
(2) | Retired from the board and as chairman on May 7, 2010 | |
(3) | Retired from the board on February 17, 2011 | |
(4) | Appointed to the board on August 12, 2010 | |
(5) | Appointed to the board on June 1, 2010 | |
(6) | Attended by invitation |
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• | selection and evaluation of external auditors and recommendation of their appointment to shareholders; | |
• | determination of the terms of engagement of the external auditor; | |
• | determination of the external auditors remuneration on an annual basis; | |
• | approval and implementation of policy procedures for approving the performance of non-audit work by the external auditors and the remuneration thereof; | |
• | ensuring the independence of the external auditors by putting in place measures to that effect and conducting an annual assessment of their independence; | |
• | reviewing the performance and independence of the internal auditor; | |
• | approving the internal audit charter; | |
• | approving the internal audit plan; | |
• | reviewing management’s half year and full year going concern statement; | |
• | submitting a report on its activities on an annual basis to shareholders; | |
• | overseeing the company’s integrated reporting and providing assurance to the board as to the integrity of information provided in the report. It also provides assurance to the board that the non-financial aspects of the sustainability review conforms to the financial information in terms of accuracy and consistency; | |
• | reviewing fraud prevention policies and processes. The investigations of the reports made through the “whistle blowing” process and the actions taken are reviewed and monitored by the committee on at least a quarterly basis; | |
• | ensuring a smooth and cordial working relationship between management and the external audit team; | |
• | ensuring that the compliance function is adequately resourced and is performing its functions adequately; | |
• | conducting an annual self-evaluation of its performance; | |
• | providing oversight role of the financial performance of relevant subsidiaries; | |
• | reporting annually to the stakeholders and the board as to the effectiveness of the company’s internal financial controls; and | |
• | reviews the annual financial statements and the integrated report of the company and recommends them to the board for approval. |
Members | February 11 | May 3 | August 10 | November 5 | ||||||||||||
Prof LW Nkuhlu (Chairman) | √ | √ | √ | √ | ||||||||||||
Mr FB Arisman | √ | √ | √ | √ | ||||||||||||
Mr RP Edey(1) | √ | √ | — | — | ||||||||||||
Mr R Gasant(2) | — | — | — | √ | ||||||||||||
By invitation | ||||||||||||||||
Mr M Cutifani | √ | √ | √ | X | ||||||||||||
Mr S Venkatakrishnan | √ | √ | √ | √ | ||||||||||||
(1) | Retired on May 7, 2010 | |
(2) | Appointed on August 12, 2010 |
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Members | February 15 | May 4 | August 5 | November 8 | ||||||||||||
Mr WA Nairn (Chairman) | √ | √ | √ | √ | ||||||||||||
Mr FB Arisman(1) | — | — | √ | √ | ||||||||||||
Mr M Cutifani | √ | √ | √ | √ | ||||||||||||
Dr TJ Motlatsi | X | √ | √ | √ | ||||||||||||
Prof LW Nkuhlu | √ | √ | √ | √ | ||||||||||||
Mr F Ohene-Kena(1) | — | — | √ | √ | ||||||||||||
Mr SM Pityana | √ | √ | √ | √ | ||||||||||||
By invitation | ||||||||||||||||
Mr FB Arisman | √ | √ | — | — | ||||||||||||
Mr RP Edey(2) | √ | √ | — | — | ||||||||||||
(1) | Appointed on August 1, 2010 | |
(2) | Retired on May 7, 2010 |
Members | February 11 | March 9 | May 4 | August 5 | November 8 | |||||||||||||||
Mr SM Pityana (Chairman) | √ | √ | √ | √ | √ | |||||||||||||||
Mr FB Arisman | √ | √ | √ | √ | √ | |||||||||||||||
Mr RP Edey(1) | √ | √ | √ | — | — | |||||||||||||||
Dr TJ Motlatsi | X | √ | √ | √ | √ | |||||||||||||||
Prof LW Nkuhlu | √ | √ | √ | √ | √ | |||||||||||||||
By invitation | ||||||||||||||||||||
Mr M Cutifani | √ | √ | √ | √ | √ | |||||||||||||||
Mr TT Mboweni(2) | — | — | — | √ | √ | |||||||||||||||
(1) | Retired on May 7, 2010 | |
(2) | Appointed on August 1, 2010 |
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Members | February 12 | February 15 | February 22 | August 5 | ||||
Mr RP Edey (Chairman)(1) | √ | √ | √ | — | ||||
Mr TT Mboweni (Chairman)(2) | — | — | — | √ | ||||
Mr FB Arisman | √ | √ | √ | √ | ||||
Mr R Gasant(3) | — | — | — | — | ||||
Dr JT Motlatsi | √ | √ | √ | √ | ||||
Mr WA Nairn | √ | √ | √ | √ | ||||
Prof LW Nkuhlu | √ | √ | √ | √ | ||||
Mr F Ohene-Kena(2) | — | — | — | √ | ||||
Mr SM Pityana | √ | √ | ▲ | √ | ||||
By invitation | ||||||||
Mr M Cutifani | — | — | √ | √ | ||||
Mr S Venkatakrishnan | — | √ | √ | √ | ||||
(1) | Retired on May 7, 2010 | |
(2) | Appointed on August 1, 2010 | |
(3) | Appointed on August 12, 2010 |
a. | Risk Management Policy; | |
b. | Risk Management Plan; and | |
c. | Risk Management Standard. |
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Members | February 15 | May 4 | August 5 | November 8 | ||||
Dr TJ Motlatsi (Chairman) | X | √ | √ | √ | ||||
Mr FB Arisman(1) | √ | √ | — | — | ||||
Mr M Cutifani | √ | √ | √ | √ | ||||
Mr WA Nairn | √ | √ | √ | √ | ||||
Mr F Ohene-Kena(2) | — | — | √ | √ | ||||
Mr SM Pityana | √ | √ | √ | √ | ||||
(1) | Resigned from committee on August 1, 2010 | |
(2) | Appointed on August 1, 2010 |
Members | February 11 | May 3 | August 6 | November 5 | ||||
Mr RP Edey (Chairman)(1) | √ | √ | — | — | ||||
Mr FB Arisman (Chairman)(2) | — | — | √ | √ | ||||
Mr M Cutifani | √ | √ | √ | √ | ||||
Mr TT Mboweni(3) | — | — | √ | √ | ||||
Mr WA Nairn | √ | √ | √ | √ | ||||
Mr SM Pityana | √ | X | √ | X | ||||
Mr S Venkatakrishnan | X | √ | √ | √ | ||||
By invitation | ||||||||
Mr FB Arisman | √ | √ | — | — | ||||
(1) | Retired on May 7, 2010 | |
(2) | Appointed chairman on August 1, 2010 | |
(3) | Appointed August 1, 2010 |
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Members | January 28 | April 20 | September 9 | November 5 | ||||
Mr FB Arisman (Chairman) | √ | √ | √ | √ | ||||
Mr RP Edey(1) | √ | √ | — | — | ||||
Mr R Gasant(2) | — | — | √ | √ | ||||
Mr TT Mboweni(3) | — | — | √ | √ | ||||
Prof LW Nkuhlu | √ | √ | √ | √ | ||||
Mr SM Pityana | √ | √ | X | ▲ | ||||
(1) | Retired on May 7, 2010 | |
(2) | Appointed on August 12, 2010 | |
(3) | Appointed on August 1, 2010 |
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2010 | 2009 | 2008 | ||||||||||
South Africa | 35,660 | 37,425 | 37,127 | |||||||||
Continental Africa | 15,761 | 15,267 | 15,644 | |||||||||
Australasia | 494 | 1,776 | 1,198 | |||||||||
Americas | 6,582 | 5,884 | 5,588 | |||||||||
Other, including corporate and non-gold producing subsidiaries | 3,549 | 3,012 | 3,338 | |||||||||
Total | 62,046 | 63,364 | 62,895 | |||||||||
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Beneficial | ||||||||
Direct | Indirect | |||||||
December 31, 2010 | ||||||||
Executive directors | ||||||||
M Cutifani | 10,000 | — | ||||||
S Venkatakrishnan | 10,351 | — | ||||||
Total | 20,351 | — | ||||||
Non-executive directors | ||||||||
FB Arisman | — | 4,984 | ||||||
LW Nkuhlu | — | 800 | ||||||
Total | — | 5,784 | ||||||
Grand total | 20,351 | 5,784 | ||||||
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Executive | Other | |||||||||||||||||||
manage- | manage- | Total | ||||||||||||||||||
M Cutifani | Venkat(1) | ment(2) | ment(2) | scheme(3) | ||||||||||||||||
Granted and outstanding at January 1, 2010 | ||||||||||||||||||||
Number | 100,127 | 82,184 | 394,814 | 2,650,559 | 3,227,684 | |||||||||||||||
Granted during the year(4) | ||||||||||||||||||||
Number | 77,694 | 40,617 | 142,873 | 1,181,596 | 1,442,780 | |||||||||||||||
Exercised during the year | ||||||||||||||||||||
Number | — | — | (28,241 | ) | (795,170 | ) | (823,411 | ) | ||||||||||||
Pre-tax gain at date of exercise (value) — R | — | — | 9,155,351 | 193,379,517 | 202,534,868 | |||||||||||||||
Lapsed during the year | ||||||||||||||||||||
Number | — | (5,781 | ) | (17,535 | ) | (278,981 | ) | (302,297 | ) | |||||||||||
Held at December 31, 2010 | ||||||||||||||||||||
Number | 177,821 | 117,020 | 491,911 | 2,758,004 | 3,544,756 | |||||||||||||||
Latest expiry date | Feb 23, 2020 | Feb 23, 2020 | Feb 23, 2020 | Feb 23, 2020 | Feb 23, 2020 | |||||||||||||||
(1) | Venkat refers to S Venkatakrishnan | |
(2) | As a result of the change in status, the movements to opening balances were made from executive management status to other managers — 91,119 options/awards | |
(3) | Of the 3,544,756 options/awards granted and outstanding at December 31, 2010, 929,029 options/awards are fully vested. | |
(4) | Awards granted since 2005 have been granted at NIL cost to participants. |
BSP | LTIP(1) | |||||||
M Cutifani | 25,086 | 60,940 | ||||||
S Venkatakrishnan | 14,462 | 32,098 | ||||||
Top 3 earners | 23,734 | 26,040 | ||||||
Other executive management | 31,962 | 64,700 | ||||||
(1) | The extent to which LTIPs vest is dependent upon performance criteria being met. |
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Long- | Total | |||||||||||||||||||||||
Perfor- | Bonus | Term | Share | Total | ||||||||||||||||||||
Time- | mance | Share | Incentive | Incentive | shares | |||||||||||||||||||
related | related | Plan(1) | Plan(1) | Scheme | issued | |||||||||||||||||||
At January 1, 2010 | 28,252 | 639,975 | 1,295,708 | 1,263,749 | 3,227,684 | 6,100,420 | ||||||||||||||||||
Movement during year | ||||||||||||||||||||||||
— Granted | — | — | 811,638 | 632,142 | 1,442,780 | |||||||||||||||||||
— Exercised | (27,611 | ) | (242,551 | ) | (468,327 | ) | (84,922 | ) | (823,411 | ) | 823,411 | |||||||||||||
— Lapsed — terminations | — | (5,492 | ) | (86,526 | ) | (211,279 | ) | (302,297 | ) | |||||||||||||||
At December 31, 2010 | 641 | 391,932 | 1,552,493 | 1,599,690 | 3,544,756 | 6,923,831 | ||||||||||||||||||
Average exercise/issue price per share | R194.00 | R241.96 | R283.39 | R172.03 | R241.96 | |||||||||||||||||||
(1) | BSP and LTIP awards granted at nil cost to participants. |
Details | Options/Awards | |||
Total number of options attributable to the scheme at December 31, 2010 | 17,000,000 | |||
Less: | ||||
— Total number of options/awards granted and outstanding at December 31, 2010 | 3,544,756 | |||
— Total number of options/awards exercised: | ||||
— During the period October 15, to December 31, 2008 | (101,013 | ) | ||
— During the period January 1 to December 31, 2009 | (1,131,916 | ) | ||
— During the period January 1 to December 31, 2010 | (823,411 | ) | ||
Total options/awards available but unissued at December 31, 2010 | 11,398,904 | |||
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• | 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”). |
Title of class | Authorized | Issued | ||||||
Ordinary shares | 600,000,000 | 381,204,080 | ||||||
E-Ordinary shares | 4,280,000 | 2,806,126 | ||||||
A preference shares | 2,000,000 | 2,000,000 | ||||||
B preference shares | 5,000,000 | 778,896 | ||||||
Number of | Number of | Number of | ||||||||||||||||||||||
Shares | Rand | Shares | Rand | Shares | Rand | |||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||
At January 1 | 362,240,669 | 90,560,167 | 353,483,410 | 88,370,853 | 277,457,471 | 69,364,368 | ||||||||||||||||||
Issued during the year: | ||||||||||||||||||||||||
- Rights offer | — | — | — | — | 69,470,442 | 17,367,611 | ||||||||||||||||||
- Golden Cycle acquisition | — | — | — | — | 3,181,198 | 795,299 | ||||||||||||||||||
- São Bento acquisition | — | — | — | — | 2,701,660 | 675,415 | ||||||||||||||||||
- Equity offering to fund the initial 35 percent interest in the Kibali gold project | — | — | 7,624,162 | 1,906,041 | — | — | ||||||||||||||||||
- Equity raising — proceeds used to part fund the hedge elimination | 18,140,000 | 4,535,000 | — | — | — | — | ||||||||||||||||||
- Bokamoso ESOP on conversion of E ordinary shares | — | — | 1,181 | 295 | 94 | 24 | ||||||||||||||||||
- Exercise of options by participants in the AngloGold share Incentive Scheme | 823,411 | 205,853 | 1,131,916 | 282,979 | 672,545 | 168,136 | ||||||||||||||||||
381,204,080 | 95,301,020 | 362,240,669 | 90,560,167 | 353,483,410 | 88,370,853 | |||||||||||||||||||
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Number of | Number of | Number of | ||||||||||||||||||||||
Shares | Rand | Shares | Rand | Shares | Rand | |||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||
At January 1 | 3,794,998 | 948,749 | 3,966,941 | 991,735 | 4,140,230 | 1,035,057 | ||||||||||||||||||
Issued during the year: | ||||||||||||||||||||||||
- Cancelled in exchange for ordinary shares in terms of the cancellation formula | (988,872 | ) | (247,218 | ) | (171,943 | ) | (42,986 | ) | (173,289 | ) | (43,322 | ) | ||||||||||||
2,806,126 | 701,531 | 3,794,998 | 948,749 | 3,966,941 | 991,735 |
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Ordinary shares held at | December 31, 2010 | December 31, 2009 | December 31, 2008 | |||||||||||||||||||||
Number of | % Voting | Number of | % Voting | Number of | % Voting | |||||||||||||||||||
Shareholder* | Shares | Rights | Shares | Rights | Shares | Rights | ||||||||||||||||||
Paulson & Co., Inc | 41,000,000 | 10.76 | 42,849,864 | 11.83 | Not disclosed | |||||||||||||||||||
Allan Gray Unit Trust Management Limited | 31,668,339 | 8.31 | 36,689,809 | 10.13 | 42,865,757 | 12.13 | ||||||||||||||||||
Fidelity Management & Research | 28,383,749 | 7.45 | 12,862,911 | 3.55 | Not disclosed | |||||||||||||||||||
* | Shares may not necessarily reflect the beneficial shareholder |
At December 31 | 2010 | 2009 | 2008 | |||||||||||||||||||||
Purchases | Amounts | Purchases | Amounts | Purchases | ||||||||||||||||||||
(by)/from | owed to/ (by) | (by)/from | owed to/ (by) | (by)/from | ||||||||||||||||||||
related party | related party | related party | related party | related party | ||||||||||||||||||||
(in millions) | $ | $ | $ | $ | $ | |||||||||||||||||||
Purchases of goods and services (by)/from equity accounted joint ventures and associates | ||||||||||||||||||||||||
Margaret Water Company | 3 | — | 1 | — | 1 | |||||||||||||||||||
Société d’Exploitation des Mines d’Or de Sadiola S.A. | (8 | ) | (2 | ) | (10 | ) | (3 | ) | (5 | ) | ||||||||||||||
Société d’Exploitation des Mines d’Or de Yatela S.A. | (3 | ) | — | (3 | ) | — | (1 | ) | ||||||||||||||||
Société des Mines de Morila S.A. | (8 | ) | (1 | ) | (6 | ) | (1 | ) | (5 | ) | ||||||||||||||
Trans-Siberian Gold plc | 1 | — | — | (1 | ) | — | ||||||||||||||||||
(15 | ) | (3 | ) | (18 | ) | (5 | ) | (10 | ) | |||||||||||||||
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2010 | 2009 | |||||||
$ | $ | |||||||
AGA-Polymetal Strategic Alliance (joint venture) (1) | — | 3 | ||||||
Oro Group (Proprietary) Limited(2) | 2 | 2 | ||||||
AuruMar (Proprietary) Limited (joint venture)(3) | 5 | 2 | ||||||
Orpheo (Proprietary) Limited(3) | 1 | 1 | ||||||
(1) | The loan was written off during 2010. | |
(2) | The loan bears interest at a rate determined by the Oro Group (Proprietary) Limited’s board of directors and is repayable at their discretion. | |
(3) | Loans are unsecured, interest free and there are no fixed terms of repayment. |
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• | Incertain jurisdictions, including but not limited to Argentina and Brazil, the Company is dealing with numerous and varied tax claims. These claims are at various stages of resolution. |
• | A former employee,Mr Thembekile Mankayi, instituted a legal action against AngloGold Ashanti in October 2006, claiming approximately $360,000 for damages allegedly suffered as a result of silicosis. AngloGold Ashanti learnt of the death of Mr Mankayi on March 3, 2011 and wishes to offer condolences to his family and friends. In June 2008, judgment on an application was given in the company’s favor on the basis that mine employers are indemnified against claims by employees for damages relating to diseases compensated under existing legislation. An appeal by Mr Mankayi was dismissed by the Supreme Court of Appeal. In August 2010, the Constitutional Court of South Africa heard Mr Mankayi’s application for leave to appeal to the Constitutional Court. On March 3, 2011 the Constitutional Court granted the leave to appeal and simultaneously granted the Appeal. The effect thereof is that the executor of Mr Mankayi’s estate may return to the High Court to recover common law damages from AngloGold Ashanti and that they are not barred by legislation from doing so. AngloGold Ashanti has several defenses available to it, and it will continue to defend the action. As a result of the Constitutional Court decision, AngloGold Ashanti could be subject to numerous similar claims, including potentially by way of a class action or similar group claim. These too would be defended by the company and adjudicated by the by the Courts on their merits. |
• | Pamodzi Gold (Orkney) (Pty) Limited(Pamodzi) (in Provisional Liquidation) purchased Shafts 1 — 7 from Harmony Gold Mining Company. AngloGold Ashanti has provided various services to Shafts 1 — 7 since it sold the Shafts to ARM in 1998. Despite not having a written agreement with Pamodzi, AngloGold Ashanti provided services to Pamodzi on the same basis that it provided services to ARM and on the understanding that a new agreement would be entered into with Pamodzi once all of the commercial terms of such an agreement were finalized. On March 10, 2009, prior to AngloGold Ashanti and Pamodzi entering into a new services agreement, a creditor of Pamodzi applied to have Pamodzi placed under provisional liquidation. This application was granted by the North Gauteng High Court. At the time of being placed in provisional liquidation Pamodzi owed AngloGold Ashanti approximately R59 million (approximately $6.5 million) for services rendered by AngloGold Ashanti. The provisional liquidators of Pamodzi have entered into a contract with Aurora Empowerment Services. Aurora has agreed to operate the mines pending final liquidation and Aurora possibly purchasing the company in provisional liquidation or the assets. Pamodzi owes (in addition to the R59 million mentioned above) approximately R54 million (approximately $5.9 million) to AngloGold Ashanti for services rendered post the liquidation application being made. This R54 million is an administrative cost and will be a first charge against the estate. |
• | Action has been instituted by a group of AngloGold Ashanti pensioners (van der Post and others) against the company for introducing a CPIX cap to post retirement health care contributions by the company. The company maintains that its action is justifiable and fair given the circumstances and precedent. Summons has been issued by the plaintiffs demanding that AngloGold Ashanti restore the level of contributions to what pertained before the introduction of the cap. The matter has been referred to private arbitration which arbitration hearing is scheduled to take place in September 2011. |
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• | Plaintiff: USER ASSOCIATION OF THE LAND ADEQUATION DISTRICT OF COELLO AND CUCUANA RIVERS (USOCOELLO) | |
Defendant: MINISTRY OF THE ENVIRONMENT, HOUSING AND TERRITORIAL DEVELOPMENT. MINISTRY OF MINES, INGEOMINAS | ||
Claim:A class action law suit against the government seeking to ensure that the collective rights to a healthy environment, public health and food safety of USOCOELLO users and citizens of El Espinal, Coello and Guamo (Tolima) are protected. The suit asks that INGEOMINAS, MINISTRY OF ENVIRONMENT and MINISTRY OF MINES AND ENERGY be ordered not to declare theLa Colosamining project feasible, which implies disapproving the subtraction of the 515.75 hectares from the forest reserve as per the formulations made by the Office of the Attorney General of Colombia and CORTOLIMA. That the municipalities of El Espinal, Coello and Guamo, CORTOLIMA and the Office of the Environmental and Agrarian Attorney of Tolima Office be linked as parties to proceedings. That GGF-151 and EIG-163 mining concession contracts be suspended as a precautionary measure. The special conciliation hearing (Pacto de Cumplimiento) took place on April 27, 2011. No settlement was made and an evidence period will now commence. |
• | Penalty of the Ministry of Environment against AngloGold Ashanti Colombia S.A.:The Ministry opened an investigation against the company and brought a list of charges against the company for carrying out exploratory activities without having processed the subtraction of the area from the forest reserve. After the evidence period, the Environmental Ministry issued a fine against the company. AngloGold Ashanti commenced prejudicial conciliation proceedings, against the Environmental Ministry, as required. |
• | Westchester/Africore Limited and Ashanti Goldfields Company Limited: Westchester/Africore Limited instituted an action against Ashanti Goldfields Company Limited in the High Court in Accra claiming damages for breach of an Exploration and Option Agreement. A provision in the Agreement stated that the parties should settle the matter by arbitration under the Arbitration Act of Ghana. In February 2002, the court directed the plaintiffs to seek arbitration as stipulated in the Agreement. The plaintiffs requested arbitration under the International Chamber of Commerce (ICC). Ashanti raised jurisdictional objections, which the ICC supported. The plaintiffs subsequently applied to pursue the matter through arbitration in Ghana. AngloGold Ashanti nominated an arbitrator in August 2006 and notified the plaintiffs accordingly. The plaintiffs then unilaterally pulled out of the arbitration and filed a Notice to maintain the action in the High Court. Ashanti Goldfields filed its defence and the trial began on February 13, 2009. Plaintiff sought leave to amend their Statement of Claim. The Plaintiffs were claiming an amount of $20 million. They however later amended their Statement of Claim to specific damages of $9 million. After several adjournments, the court gave judgment in favor of the Plaintiffs on March 31, 2011 and awarded damages of $17.4 million and GHS 30,000 ($19,726) costs. The Company has instructed Counsel to file a Notice of Appeal and Stay of Execution on groundsinter aliathat the judgment is against the weight of the evidence given and that the trial judge unduly relied on the evidence of the Plaintiff’s expert witness. |
• | AngloGold Ashanti v National Labour Commission & 273 Others:In December 2006, Appiah Agyei Boateng and 272 others, claiming to be the employees of AngloGold Ashanti petitioned the National Labour Commission (NLC) for the payment of their gratuities. The basis of their claim was that they were at all material times employees of AngloGold Ashanti (Ghana) Limited and that they have been transferred to Mining and Building Contractors Limited (MBC), an independent construction firm, without their consent and have consequently suffered a diminution in their terms and conditions of service. They were therefore claiming redundancy payments from AngloGold Ashanti. On August 20, 2009 the NLC found in favor of the petitioners and ordered AngloGold Ashanti to pay the Petitioners redundancy payments totalling $4.7 million. AngloGold Ashanti then initiated proceedings in the High Court seeking to have the NLC decision set aside. The affected workers applied and secured an order from the court joining them to the suit. On April 7, 2011 the High Court gave judgment ruling in favor of the plaintiffs that the National Labour Commission had the power to determine the matter. By this judgment, the Company is to pay the award as given by the Labour Commission. We are reviewing the possibility of applying for leave of the court to file an appeal to the Labour Commission’s decision out of time. |
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• | National Labour Commission v AngloGold Ashanti (Early Retirees):The Company was requested by the National Labour Commission to provide its comments on a petition filed against the Company at the Commission. The thrust of their petition is that Management 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 claim they would have elected to exit by way of redundancy which was being done at the time. Specifically they are claiming against the company to pay to them the difference between what would have been their ‘redundancy’ packages and actual payments made to them under the retirement package. This has been computed to be the cedi equivalent of $1.8 million. On April 3, 2009, the National Labour Commission issued a decision on the matter. It ordered AngloGold Ashanti Ghana to calculate the difference between the Redundancy Package and the Early Retirement benefit in the case of each petitioner and the difference paid to each petitioner. Then AngloGold Ashanti refused to comply with the orders of the Commission, the Commission instituted action at the High Court to enforce their orders. On February 11, 2011 the High Court dismissed our Application for Stay of Execution pending appeal and ordered further that we pay the amount ordered to be paid to the petitioners into court within 14 days. Thereafter each of the petitioners, who are not parties to the suit should apply to the court to take out his or her entitlement upon providing satisfactory security. AngloGold Ashanti repeated its Application for Stay of Execution at the Court of Appeal. On March 14, 2011 the Court of Appeal granted the Company’s Application for Stay of Execution and directed that it should ensure that the Appeal would be ready for hearing within three months. The Company has written to the Registrar to complete the record of proceedings for onward transmission to the Court of Appeal. |
• | Jackson Manyelo & others vs. GGM Misc. Civil case no. 27/2007 (land case):The claimants allege that they have been affected by Katoma blasting and they have suffered damages in the amount of Tshs 9.6 billion ($7,161,446). Pre trial conference has been rescheduled. |
• | Anational claim recovery commissionput in place by the government has demanded from SAG the payment of the sum of $43 million as dividend and penalty which would have been due to the state for the accounting years 2004 — 2007. This claim is contested by SAG. The two parties have decided to submit their dispute to an independent audit firm which will be appointed by a common accord. |
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JSE | NYSE(1) | |||||||||||||||
High | Low | High | Low | |||||||||||||
Year ended December 31 | (South African cents per ordinary share) | (US dollars per ADS) | ||||||||||||||
Annual information | ||||||||||||||||
2006 | 38,700 | 24,700 | 62.20 | 35.58 | ||||||||||||
2007 | 35,899 | 25,400 | 49.42 | 33.80 | ||||||||||||
2008 | 34,900 | 15,011 | 51.35 | 13.37 | ||||||||||||
2009 | 34,679 | 28,630 | 47.52 | 36.05 | ||||||||||||
2010 | 36,631 | 26,640 | 52.86 | 34.11 | ||||||||||||
2009 | ||||||||||||||||
First quarter | 36,900 | 23,206 | 38.99 | 22.50 | ||||||||||||
Second quarter | 35,789 | 25,950 | 43.16 | 29.36 | ||||||||||||
Third quarter | 33,990 | 27,150 | 45.64 | 32.77 | ||||||||||||
Fourth quarter | 34,679 | 28,630 | 47.52 | 36.05 | ||||||||||||
2010 | ||||||||||||||||
First quarter | 33,000 | 26,640 | 44.68 | 34.11 | ||||||||||||
Second quarter | 34,150 | 27,649 | 45.25 | 37,52 | ||||||||||||
Third quarter | 33,946 | 28,650 | 47.75 | 38.55 | ||||||||||||
Fourth quarter | 36,631 | 31,165 | 52.86 | 44.22 | ||||||||||||
2011 | ||||||||||||||||
First quarter | 35,240 | 30,226 | 49.99 | 42.47 | ||||||||||||
October 2010 | 32,950 | 31,165 | 48.16 | 44.22 | ||||||||||||
November 2010 | 36,631 | 31,986 | 52.86 | 45.88 | ||||||||||||
December 2010 | 34,786 | 32,230 | 50.76 | 46.57 | ||||||||||||
January 2011 | 33,199 | 30,226 | 49.59 | 42.47 | ||||||||||||
February 2011 | 35,240 | 30,810 | 49.31 | 43.21 | ||||||||||||
March 2011 | 34,320 | 30,695 | 49.99 | 43.40 | ||||||||||||
April 2011 | 34,096 | 32,344 | 51.28 | 47.67 | ||||||||||||
May 2011(2) | 33,491 | 30,247 | 51.69 | 43.29 |
(1) | Each ADS represents one ordinary share. | |
(2) | Through May 24, 2011. |
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Issued | ||||||||||||
Title of Class | Authorized | May 24, 2011(1) | December 31, 2010 | |||||||||
Ordinary shares at par value of R0.25 each | 600,000,000 | 381,473,822 | 381,204,808 | |||||||||
E ordinary shares at par value of R0.25 each | 4,280,000 | 2,120,250 | 2,806,126 | |||||||||
A redeemable preference shares at par value of R0.50 each | 2,000,000 | 2,000,000 | 2,000,000 | |||||||||
B redeemable preference shares at par value of R0.01 each | 5,000,000 | 778,896 | 778,896 | |||||||||
(1) | Does not include additional shares to be issued in respect of the BEE Transaction approved by shareholders on May 11, 2011 of 48,923 ordinary shares and 1,370,634 E ordinary shares. |
Period to | Description | Number of Shares | ||||
December 31, 2007 | 277,457,471 | |||||
Ordinary shares issued during 2008 | AngloGold Share Incentive Scheme | 672,545 | ||||
Employee Share ownership program — on | ||||||
conversion of E ordinary shares | 94 | |||||
Acquisition of Golden Cycle Gold | ||||||
Corporation | 3,181,198 | |||||
Rights offer | 69,470,442 | |||||
Acquisition of São Bento Gold Company | ||||||
Limited | 2,701,660 | |||||
December 31, 2008 | 353,483,410 | |||||
Ordinary shares issued during 2009 | AngloGold Share Incentive Scheme | 1,131,916 | ||||
Employee Share ownership program — on | ||||||
conversion of E ordinary shares | 1,181 | |||||
Equity offering to fund the initial | ||||||
effective 35 percent interest in the | ||||||
Kibali gold project | 7,624,162 | |||||
December 31, 2009 | 362,240,669 | |||||
Ordinary shares issued during 2010 | AngloGold Share Incentive Scheme | 823,411 | ||||
Employee Share ownership program — on | ||||||
conversion of E ordinary shares | — | |||||
Equity raising — proceeds used to part | ||||||
fund the hedge elimination | 18,140,000 | |||||
December 31, 2010 | 381,204,080 | |||||
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Period to | Description | Number of Shares | ||||
December 31, 2007 | 4,140,230 | |||||
2008 E-ordinary shares movement | Cancelled and exchanged for ordinary shares | |||||
in accordance with the cancellation formula | (173,289 | ) | ||||
December 31, 2008 | 3,966,941 | |||||
2009 E-ordinary shares movement | Cancelled and exchanged for ordinary shares | |||||
in accordance with the cancellation formula | (171,943 | ) | ||||
December 31, 2009 | 3,794,998 | |||||
2010 E-ordinary shares movement | Cancelled and exchanged for ordinary shares | |||||
in accordance with the cancellation formula | (988,872 | ) | ||||
December 31, 2010 | 2,806,126 | |||||
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(i) | any arrangement for giving to any director any security or indemnity in respect of money lent by him to, or obligations undertaken by him for the benefit of, AngloGold Ashanti; |
(ii) | any arrangement for the giving by AngloGold Ashanti of any security to a third party in respect of a debt or obligation of AngloGold Ashanti which the director has himself guaranteed or secured; |
(iii) | any contract by a director to subscribe for or underwrite securities; or |
(iv) | any contract or arrangement with a company in which he is interested by reason only of being a director, officer, creditor or member of such company (and note that these prohibitions may at any time be suspended or relaxed to any extent either generally, or in respect of any particular contract or arrangement, by AngloGold Ashanti in general meeting). |
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• | increase its capital by any sum divided into shares of any amount; |
• | consolidate and divide all or any part of its share capital into shares of larger amounts or consolidate and reduce the number of any issued no par value shares; |
• | increase the number of any issued no par value shares without increasing its stated capital; |
• | cancel any shares which have not been subscribed for; |
• | sub-divide its shares or any of them into shares of smaller amounts than fixed by the memorandum of association; |
• | vary, modify or amend any rights attached to any shares whether issued or not, including the conversion of any shares into preference shares; and |
• | convert any of its shares whether issued or not into shares of another class. |
• | 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 and |
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• | the ordinary shares and E ordinary shares confer the equal rights to any surplus arising from the liquidation of all other assets of AngloGold Ashanti. |
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ADS holders must pay: | For: | |
$5.00 (or less) per 100 ADSs | Each issuance of an ADS, including as a result of a distribution of AngloGold Ashanti ordinary shares or rights or other property | |
Each cancellation of an ADS, including if the Deposit Agreement terminates | ||
$0.02 (or less) per ADS | Any cash payment | |
Registration or transfer fees | Transfer and registration of AngloGold Ashanti ordinary shares on the AngloGold Ashanti share register to or from the name of The Bank of New York Mellon or its agent when AngloGold Ashanti ordinary shares are deposited or withdrawn | |
$0.02 (or less) per ADS per year | Depositary services | |
Expenses of The Bank of New York Mellon | Conversion of non-US currency to US dollars | |
Cable, telex and facsimile transmission expenses | ||
Servicing the deposited securities | ||
Taxes and other governmental charges The Bank of New York Mellon or any custodian has to pay on any ADS or AngloGold Ashanti ordinary share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes | As necessary | |
A fee equivalent to the fee that would have been payable if the securities distributed had been ordinary shares deposited for issuance of ADSs | Distribution of securities distributed to holders of deposited securities that are distributed by The Bank of New York Mellon to ADS holders |
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If AngloGold Ashanti: | Then: | |
Changes the nominal or par value of the ordinary shares; Reclassifies, splits up or consolidates any of the deposited securities; | The cash, ordinary shares or other securities received by The Bank of New York Mellon will become deposited securities. Each ADS will automatically represent its equal share of the new deposited securities. | |
Distributes securities on the ordinary shares that are not distributed to holders of ADSs; or Recapitalizes, reorganizes, merges, liquidates, sells all or substantially all of AngloGold Ashanti’s assets, or takes any similar action. | The Bank of New York Mellon may, and will if AngloGold Ashanti asks it to, distribute some or all of the cash, AngloGold Ashanti ordinary shares or other securities it receives. It may also issue new ADSs or ask holders of ADSs to surrender their outstanding ADSs in exchange for new ADSs identifying the new deposited securities. | |
• | are only obligated to take the actions specifically set forth in the Deposit Agreement without negligence or bad faith; | |
• | are not liable if either of AngloGold Ashanti or The Bank of New York Mellon is prevented or delayed by law or circumstances beyond their control from performing their obligations under the Deposit Agreement; | |
• | are not liable if either of AngloGold Ashanti or The Bank of New York Mellon exercises discretion permitted under the Deposit Agreement; | |
• | are not liable for the inability of any holder of ADSs to benefit from any distribution on deposited securities that is not made available to holders of ADSs under the terms of the Deposit Agreement, or for any special, consequential or punitive damages for any breach of the terms of the Deposit Agreement; | |
• | have no obligation to become involved in a lawsuit or other proceeding related to the ADSs or the Deposit Agreement on behalf of the holders of ADSs or on behalf of any other party; | |
• | may rely on advice of or information from legal counsel, accountants, and any persons presenting AngloGold Ashanti’s ordinary shares for deposit, any registered holder or any other person believed by AngloGold Ashanti in good faith to be competent to give such advice or information; and | |
• | pursuant to the Deposit Agreement, AngloGold Ashanti and The Bank of New York Mellon agree to indemnify each other under certain circumstances. |
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• | payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any ordinary shares or other deposited securities; | |
• | production of satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and | |
• | compliance with regulations it may establish, from time to time, consistent with the Deposit Agreement, including presentation of transfer documents. |
• | when temporary delays arise because: (1) either AngloGold Ashanti or The Bank of New York Mellon have closed AngloGold Ashanti’s transfer books; (2) the transfer of the ordinary shares is blocked in connection with voting at a general meeting of shareholders; or (3) AngloGold Ashanti is paying a dividend on the ordinary shares; | |
• | when ADS holders seeking to withdraw the ordinary shares owe money to pay fees, taxes and similar charges; or | |
• | when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of the ordinary shares or other deposited securities. |
• | before or at the time of the pre-release, the person to whom the pre-release is being made must represent to The Bank of New York Mellon in writing that it or its customer: (a) owns the ordinary shares or ADSs to be remitted, (b) assigns all beneficial rights, title and interest in such ADSs or ordinary shares, as the case may be, to The Bank of New York Mellon in its capacity as the depositary and for the benefit of the ADS holders, and (c) will not take any action with respect to such ADSs or ordinary shares, as the case may be, that is consistent with the transfer of beneficial ownership (including, without the consent of The Bank of New York Mellon, disposing of such ADSs or ordinary shares, as the case may be) other than satisfaction of such pre-release; | |
• | the pre-release must be fully collateralized with cash, US government securities, or other collateral that The Bank of New York Mellon considers appropriate; and | |
• | the Bank of New York Mellon must be able to close out the pre-release on not more than five business days’ notice. Each pre-release will be subject to any further indemnities and credit regulations that The Bank of New York Mellon deems appropriate. The Bank of New York Mellon will normally limit the number of AngloGold Ashanti ordinary shares not deposited but represented by ADSs outstanding at any time as a result of pre-release so that they do not exceed 30 percent of the ordinary shares deposited, although The Bank of New York Mellon may disregard this limit from time to time, if it thinks it is appropriate to do so. |
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(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; | |
(v) | any disposal by AngloGold Ashanti (Ghana) Limited (other than any disposal in the ordinary course of business of AngloGold Ashanti) which, alone or when aggregated with any disposal or disposals forming part of, or connected with, the same or a connected transaction, constitutes a disposal of the whole or a material part of the assets of the AngloGold Ashanti group taken as a whole. For this purpose, a part of the AngloGold Ashanti group’s assets will be considered material if either (a) its book value (calculated by reference to the then latest audited consolidated accounts), or the total consideration to be received on its disposal, is not less than 25 percent of the book value of the net assets of the AngloGold Ashanti group or (b) the average profits attributable to it represent at least 25 percent of the average profits of the AngloGold Ashanti group for the last three years for which audited accounts are available (before deducting all charges, except taxation and extraordinary items). |
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The financial risk management activities objectives of the group are as follows: |
• | Safeguarding the group’s core earnings stream through the effective control and management of gold and other commodity price risk, foreign exchange risk and interest rate risk; | |
• | Effective and efficient usage of credit facilities through the adoption of reliable liquidity planning and procedures; | |
• | Ensuring that investment and hedging transactions are undertaken with creditworthy counterparts; and | |
• | Ensuring that all contracts and agreements related to financial risk management activities are co-ordinated and consistent throughout the group and comply where necessary with all relevant regulatory and statutory requirements. |
Daily | Treasurer | |
Monthly | Executive Committee | |
Quarterly | Audit and Corporate Governance Committee, Board of Directors and shareholder reports |
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• | Commodity based (“normal purchase or normal sale exempt”) contracts that meet the requirements of the FASB ASC guidance and are designated as such, are recognized in product sales when they are settled by physical delivery. They are not recorded in the financial statements between the dates that they are entered into and settled. | |
• | Contracts that meet the criteria for hedge accounting are designated as the hedging instruments hedging the variability of forecasted cash flows from the sale of production into the spot market and from capital expenditure denominated in a foreign currency and are classified as cash flow hedges under the FASB ASC guidance. The ineffective portion of matured and existing cash flow hedges recognized in loss on non-hedge derivatives in the income statement during the year was $nil million (2009: $5 million; 2008: $8 million). The Company does not have any open cash flow hedge contracts relating to product sales or forecasted capital expenditure as at December 31, 2010 (2009: $37 million; 2008: $123 million). Cash flow hedge losses pertaining to capital expenditure of $3 million as at December 31, 2010 (2009: $4 million; 2008: $nil million) are expected to be reclassified from accumulated other comprehensive income and recognized as an adjustment to depreciation expense until 2017. | |
• | All other derivatives are measured at their estimated fair value, with the changes in estimated fair value at each reporting date reported as gains or losses on derivatives in earnings in the period in which they occur. |
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2010 | 2009 | |||||||||||||||||||||||||||||||||||
Fixed rate | Floating rate | Fixed rate | Floating rate | |||||||||||||||||||||||||||||||||
investment amount | Effective | investment amount | Effective | investment amount | Effective | investment amount | Effective | |||||||||||||||||||||||||||||
Maturity date | Currency | (million) | rate % | (million) | rate % | (million) | rate % | (million) | rate % | |||||||||||||||||||||||||||
All less than one year | USD | 13 | 0.20 | 171 | 0.19 | 506 | 0.29 | 178 | 0.13 | |||||||||||||||||||||||||||
ZAR | 969 | 5.58 | 57 | 4.64 | 1,135 | 7.03 | 839 | 6.38 | ||||||||||||||||||||||||||||
AUD | 42 | 4.45 | 25 | 4.44 | — | — | 13 | 3.52 | ||||||||||||||||||||||||||||
EUR | — | — | 3 | 1.00 | — | — | 1 | 0.50 | ||||||||||||||||||||||||||||
CAD | — | — | 2 | 0.20 | — | — | 1 | 0.08 | ||||||||||||||||||||||||||||
HKD | — | — | — | — | — | — | 1 | 0.01 | ||||||||||||||||||||||||||||
BRL | — | — | 30 | 8.90 | — | — | 152 | 10.20 | ||||||||||||||||||||||||||||
ARS | — | — | 2 | 9.00 | — | — | 4 | 10.23 | ||||||||||||||||||||||||||||
NAD | 102 | 5.00 | 207 | 5.00 | — | — | — | — | ||||||||||||||||||||||||||||
Within one year | Between one and two years | Between Two and five years | After five years | Total | ||||||||||||||||||||||||||||||||
Borrowings | Effective | Borrowings | Effective | Borrowings | Effective | Borrowings | Effective | Borrowings | ||||||||||||||||||||||||||||
Amount | Rate | Amount | Rate | Amount | Rate | Amount | Rate | Amount | ||||||||||||||||||||||||||||
Currency | (million) | % | (million) | % | (million) | % | (million) | % | (million) | |||||||||||||||||||||||||||
$ | 26 | 4.7 | 5 | 5.5 | 1,560 | 4.9 | 994 | 5.7 | 2,585 | |||||||||||||||||||||||||||
ZAR | 703 | 6.4 | — | — | 20 | 9.8 | 237 | 9.8 | 960 | |||||||||||||||||||||||||||
BRL | 3 | 4.7 | 5 | 5.1 | 2 | 6.0 | — | — | 10 | |||||||||||||||||||||||||||
Fixed for less than one year | Fixed for between one and three years | Fixed for greater than three years | Total | |||||||||||||||||||||||||
Borrowings | Effective | Borrowings | Effective | Borrowings | Effective | Borrowings | ||||||||||||||||||||||
Amount | Rate | Amount | Rate | Amount | Rate | Amount | ||||||||||||||||||||||
Currency | (million) | % | (million) | % | (million) | % | (million) | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||||||||||||||
$ | 26 | 4.7 | 880 | 6.0 | 1,679 | 4.8 | 2,585 | |||||||||||||||||||||
ZAR | 703 | 6.4 | 7 | 9.8 | 250 | 9.8 | 960 | |||||||||||||||||||||
BRL | 3 | 4.7 | 7 | 5.3 | — | — | 10 | |||||||||||||||||||||
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December 31, | ||||
2010 | ||||
$ | ||||
Warrants on shares | 1 | |||
1 | ||||
December 31, 2010 | December 31, 2009 | |||||||||||||||
Carrying | Carrying | |||||||||||||||
Amount | Fair Value | Amount | Fair Value | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Cash and cash equivalents | 575 | 575 | 1,100 | 1,100 | ||||||||||||
Restricted cash | 43 | 43 | 65 | 65 | ||||||||||||
Short-term debt | (135 | ) | (135 | ) | (1,292 | ) | (1,292 | ) | ||||||||
Long-term debt | (1,730 | ) | (2,059 | ) | (667 | ) | (889 | ) | ||||||||
Long-term debt at fair value | (872 | ) | (872 | ) | — | — | ||||||||||
Derivatives | (175 | ) | (175 | ) | (2,366 | ) | (2,366 | ) | ||||||||
Marketable equity securities — available for sale | 124 | 124 | 111 | 111 | ||||||||||||
Marketable debt securities — held to maturity | 13 | 14 | 10 | 10 | ||||||||||||
Non-marketable assets — held to maturity | 2 | 2 | 2 | 2 | ||||||||||||
Non-marketable debt securities — held to maturity | 89 | 89 | 48 | 48 | ||||||||||||
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December 31, 2010 | ||||||||||||||||
Cash flow | ||||||||||||||||
hedge | Non-hedge | |||||||||||||||
accounted | accounted | Total | ||||||||||||||
Assets | Balance Sheet location | $ | $ | $ | ||||||||||||
Warrants on shares | Current assets - derivatives | — | 1 | 1 | ||||||||||||
Total derivatives | — | 1 | 1 |
December 31, 2010 | ||||||||||||||||
Cash flow | ||||||||||||||||
hedge | Non-hedge | |||||||||||||||
accounted | accounted | Total | ||||||||||||||
Liabilities | Balance Sheet location | $ | $ | $ | ||||||||||||
Option component of convertible bonds | Non-current liabilities - derivatives | — | (176 | ) | (176 | ) | ||||||||||
Total derivatives | — | (176 | ) | (176 | ) | |||||||||||
December 31, 2009 | ||||||||||||||||
Cash flow | ||||||||||||||||
hedge | Non-hedge | |||||||||||||||
accounted | accounted | Total | ||||||||||||||
Balance Sheet location | $ | $ | $ | |||||||||||||
Assets | ||||||||||||||||
Forward sales type agreements — commodity | Current assets - derivatives | — | 283 | 283 | ||||||||||||
Option contracts — commodity | Current assets - derivatives | — | 47 | 47 | ||||||||||||
Total hedging contracts | — | 330 | 330 | |||||||||||||
Warrants on shares | Non-current assets - derivatives | — | 5 | 5 | ||||||||||||
Total derivatives | — | 335 | 335 | |||||||||||||
Liabilities | ||||||||||||||||
Forward sales type agreements — commodity | Current liabilities - derivatives | (37 | ) | (441 | ) | (478 | ) | |||||||||
Option contracts — commodity | Current liabilities - derivatives | — | (2,034 | ) | (2,034 | ) | ||||||||||
Interest rate swaps — gold | Current liabilities - derivatives | — | (13 | ) | (13 | ) | ||||||||||
Total hedging contracts | (37 | ) | (2,488 | ) | (2,525 | ) | ||||||||||
Embedded derivatives | Non-current liabilities - derivatives | — | (1 | ) | (1 | ) | ||||||||||
Option component of convertible bonds | Non-current liabilities - derivatives | — | (175 | ) | (175 | ) | ||||||||||
Total derivatives | (37 | ) | (2,664 | ) | (2,701 | ) | ||||||||||
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Year ended December 31, 2010 | ||||||||
Location of gain/(loss) in income statement | $ | |||||||
Realized | ||||||||
Forward sales type agreements — commodity | Non-hedge derivative gain/(loss) and movement on bonds | (377 | ) | |||||
Option contracts — commodity | Non-hedge derivative gain/(loss) and movement on bonds | (2,573 | ) | |||||
Forward sales agreements — currency | Non-hedge derivative gain/(loss) and movement on bonds | (13 | ) | |||||
Option contracts — currency | Non-hedge derivative gain/(loss) and movement on bonds | 3 | ||||||
Interest rate swaps — Gold | Non-hedge derivative gain/(loss) and movement on bonds | (15 | ) | |||||
(2,975 | )(1) | |||||||
Unrealized | ||||||||
Forward sales type agreements — commodity | Non-hedge derivative gain/(loss) and movement on bonds | 265 | ||||||
Option contracts — commodity | Non-hedge derivative gain/(loss) and movement on bonds | 1,999 | ||||||
Interest rate swaps — Gold | Non-hedge derivative gain/(loss) and movement on bonds | 13 | ||||||
Option component of convertible bonds | Non-hedge derivative gain/(loss) and movement on bonds | (1 | ) | |||||
Embedded derivatives | Non-hedge derivative gain/(loss) and movement on bonds | 1 | ||||||
Warrants on shares | Non-hedge derivative gain/(loss) and movement on bonds | (5 | ) | |||||
2,272 | ||||||||
Loss on non-hedge derivatives | (703 | ) | ||||||
(1) | Includes $2,698 million loss related to the final tranche of the accelerated hedge buy-back. |
Year ended December 31, 2009 | ||||||||
Location of gain/(loss) in income statement | $ | |||||||
Realized | ||||||||
Forward sales type agreements — commodity | Non-hedge derivative gain/(loss) and movement on bonds | (535 | ) | |||||
Option contracts — commodity | Non-hedge derivative gain/(loss) and movement on bonds | (144 | ) | |||||
Forward sales agreements — currency | Non-hedge derivative gain/(loss) and movement on bonds | 107 | ||||||
Option contracts — currency | Non-hedge derivative gain/(loss) and movement on bonds | 12 | ||||||
Interest rate swaps — Gold | Non-hedge derivative gain/(loss) and movement on bonds | 16 | ||||||
(544 | )(1) | |||||||
Unrealized | ||||||||
Forward sales type agreements — commodity | Non-hedge derivative gain/(loss) and movement on bonds | (188 | ) | |||||
Option contracts — commodity | Non-hedge derivative gain/(loss) and movement on bonds | (648 | ) | |||||
Forward sales agreements — currency | Non-hedge derivative gain/(loss) and movement on bonds | (15 | ) | |||||
Option contracts — currency | Non-hedge derivative gain/(loss) and movement on bonds | (3 | ) | |||||
Interest rate swaps — Gold | Non-hedge derivative gain/(loss) and movement on bonds | (25 | ) | |||||
Option component of convertible bonds | Non-hedge derivative gain/(loss) and movement on bonds | (33 | ) | |||||
Embedded derivatives | Non-hedge derivative gain/(loss) and movement on bonds | (1 | ) | |||||
Warrants on shares | Non-hedge derivative gain/(loss) and movement on bonds | 5 | ||||||
(908 | ) | |||||||
Loss on non-hedge derivatives | (1,452 | ) | ||||||
(1) | Includes $797 million loss related to the accelerated hedge buy-back. |
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Year ended December 31, 2010 | ||||||||||||||||||||
Cash flow | ||||||||||||||||||||
hedges, before | Cash flow hedges removed from | |||||||||||||||||||
tax | equity, before tax | Hedge ineffectiveness, before tax | ||||||||||||||||||
$ | $ | $ | ||||||||||||||||||
Amount of | ||||||||||||||||||||
Gain/(loss) | Location of | (gain)/loss | ||||||||||||||||||
recognized in | (gain)/loss | reclassified from | Amount of | |||||||||||||||||
accumulated | reclassified from | accumulated other | (gain)/loss | |||||||||||||||||
other | accumulated other | comprehensive | recognized | |||||||||||||||||
comprehensive | comprehensive | income into | Location of (gain)/loss | in income | ||||||||||||||||
income (effective | income into income | income (effective | recognized in income | (ineffective | ||||||||||||||||
portion) | (effective portion) | portion) | (ineffective portion) | portion) | ||||||||||||||||
Forward sales type agreements - commodity | — | Product sales | 52 | Non-hedge derivatives gain/(loss) and movement on bonds | — | |||||||||||||||
— | 52 | — |
Year ended December 31, 2009 | ||||||||||||||||||||
Cash flow hedges, | Cash flow hedges removed from equity, | |||||||||||||||||||
before tax | before tax | Hedge ineffectiveness, before tax | ||||||||||||||||||
$ | $ | $ | ||||||||||||||||||
Amount of | ||||||||||||||||||||
Gain/(loss) | Location of | (gain)/loss | ||||||||||||||||||
recognized in | (gain)/loss | reclassified from | Amount of | |||||||||||||||||
accumulated | reclassified from | accumulated other | (gain)/loss | |||||||||||||||||
other | accumulated other | comprehensive | recognized | |||||||||||||||||
comprehensive | comprehensive | income into | Location of (gain)/loss | in income | ||||||||||||||||
income (effective | income into income | income (effective | recognized in income | (ineffective | ||||||||||||||||
portion) | (effective portion) | portion) | (ineffective portion) | portion) | ||||||||||||||||
Forward sales type agreements - commodity | (16 | ) | Product sales | 137 | Non-hedge derivatives gain/(loss) and movement on bonds | 5 | ||||||||||||||
Forward sales agreements - currency | (1 | ) | Depreciation | — | Non-hedge derivatives gain/(loss) and movement on bonds | — | ||||||||||||||
(17 | ) | 137 | 5 |
Accumulated other | Changes in fair | Accumulated other | ||||||||||||||
comprehensive income as | value recognized | Reclassification | comprehensive income | |||||||||||||
of January 1, 2010 | in 2010 | adjustments | as of December 31, 2010 | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Derivatives designated as Gold sales | (52 | ) | — | 52 | — | |||||||||||
Capital expenditure | (3 | ) | — | — | (3 | ) | ||||||||||
Before tax totals | (55 | ) | — | 52 | (3 | )(1) | ||||||||||
After tax totals | (22 | ) | — | 20 | (2 | ) | ||||||||||
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Accumulated other | Accumulated other | |||||||||||||||
comprehensive | Changes in fair | comprehensive income | ||||||||||||||
income as | value recognized | Reclassification | as of December 31, | |||||||||||||
of January 1, 2009 | in 2009 | adjustments | 2009 | |||||||||||||
$ | $ | $ | $ | |||||||||||||
| | | | | ||||||||||||||||
Derivatives designated as | ||||||||||||||||
Gold sales | (178 | ) | (16 | ) | 142 | (52 | ) | |||||||||
Capital expenditure | (2 | ) | (2 | ) | 1 | (3 | ) | |||||||||
Before tax totals | (180 | ) | (18 | ) | 143 | (55 | )(1) | |||||||||
After tax totals | (112 | ) | (13 | ) | 103 | (22 | ) | |||||||||
(1) | Includes adjustment for cumulative net translation differences of $nil million (2009: $18 million) resulting from the revaluation and settlement of non US dollar denominated cash flow hedge contracts. |
2010 | ||||||||||||
Total | Assets | Liabilities | ||||||||||
$ | $ | $ | ||||||||||
Amounts to mature within twelve months of balance sheet date | 1 | 1 | — | |||||||||
Amounts maturing between one and two years | — | — | — | |||||||||
Amounts maturing between two and five years (176) | 176 | — | (176 | ) | ||||||||
Total | (175 | ) | 1 | (176 | ) | |||||||
2009 | ||||||||||||
Total | Assets | Liabilities | ||||||||||
$ | $ | $ | ||||||||||
Amounts to mature within twelve months of balance sheet date | (2,195 | ) | 330 | (2,525 | ) | |||||||
Amounts maturing between one and two years | 5 | 5 | — | |||||||||
Amounts maturing between two and five years | (175 | ) | — | (175 | ) | |||||||
Amounts to mature thereafter | (1 | ) | — | (1 | ) | |||||||
Total | (2,366 | ) | 335 | (2,701 | ) | |||||||
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2010 | ||||||||||||||||
Cash flow | Total | |||||||||||||||
Change in | hedge | Non-hedge | change in | |||||||||||||
underlying | accounted | accounted | fair value | |||||||||||||
factor (+) | $ | $ | $ | |||||||||||||
Convertible bonds | ||||||||||||||||
AngloGold Ashanti Limited share price (US$) | Spot (+$1) | — | (10 | ) | (10 | ) | ||||||||||
Warrants on shares | ||||||||||||||||
B2Gold Corporation share price (C$) | Spot (+C$0.25) | — | 1 | 1 |
2010 | ||||||||||||||||
Cash flow | ||||||||||||||||
Change in | hedge | Non-hedge | Total change in | |||||||||||||
underlying | accounted | accounted | fair value | |||||||||||||
factor (-) | $ | $ | $ | |||||||||||||
Convertible bonds | ||||||||||||||||
AngloGold Ashanti Limited share price (US$) | Spot (-$1) | — | 9 | 9 | ||||||||||||
Warrants on shares | ||||||||||||||||
B2Gold Corporation share price (C$) | Spot (-C$0.25) | — | — | — |
2010 | ||||||||
Change in exchange rate | Change in borrowings total | |||||||
$ | ||||||||
Debt | ||||||||
ZAR denominated (R/$) | Spot (+R1) | (19 | ) | |||||
BRL denominated (BRL/$) | Spot (+BRL0.25) | (1 | ) |
2010 | ||||||||
Change in exchange rate | Change in borrowings total | |||||||
$ | ||||||||
Debt | ||||||||
ZAR denominated (R/$) | Spot (-R1) | 26 | ||||||
BRL denominated (BRL/$) | Spot (-BRL0.25) | 1 |
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AngloGold Ashanti’s American Depositary Shares, or ADSs, each representing one of AngloGold Ashanti’s ordinary shares, are traded on the New York Stock Exchange under the symbol “AU.” The ADSs are evidenced by American Depositary Receipts, or ADRs, issued by The Bank of New York Mellon, as Depositary under the Amended and Restated Deposit Agreement dated as of June 3, 2008, among AngloGold Ashanti Limited, The Bank of New York Mellon and owners and beneficial owners of from time to time of ADRs. ADS holders may have to pay the following service fees to the Depositary: |
Service | Fees (USD) | |
Issuance of ADSs | Up to 5 cents per ADS(1) | |
Cancellation of ADSs | Up to 5 cents per ADS(1) | |
Distribution of cash dividends or other cash distributions | Up to 2 cents per ADS(2) | |
Distribution of securities pursuant to | ||
• (i) stock dividends, free stock distributions or | ||
• (ii) exercises of rights to purchase additional ADSs | Up to 5 cents per ADS (2) | |
ADR Depositary Services fee | Up to 2 cents per year(2) |
(1) | These fees are typically paid to the Depositary by the brokers on behalf of their clients receiving the newly-issued ADSs from the Depositary and by the brokers on behalf of their clients delivering the ADSs to the Depositary for cancellation. The brokers in turn charge these transaction fees to their clients. | |
(2) | In practice, the Depositary has not collected these fees. If collected, such fees are offset against the related distribution made to the ADR holder. |
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(a) | Disclosure Controls and Procedures:As of December 31, 2010 (the “Evaluation Date”), the company, under the supervision and with the participation of its management, including the chief executive officer and chief financial officer has evaluated the effectiveness of the company’s disclosure controls and procedures (as defined in Rules 13(a) — 15(e) and 15(d) — 15(e) under the Securities Exchange Act of 1934, as amended (“the Exchange Act”). Based on such evaluation, the chief executive officer and chief financial officer have concluded that, as of the Evaluation Date, the company’s disclosure controls and procedures are effective, and are reasonably designed to ensure that information required to be disclosed by the company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. These disclosure controls and procedures include without limitation, controls and procedures designed to ensure that information required to be disclosed by the company in reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding disclosure. |
(b) | Management’s Annual Report on Internal Control over Financial Reporting:Management is responsible for establishing and maintaining adequate internal control over financial reporting for the company, as defined in the Exchange Act Rule 13(a) — 15(f) and 15(d) -15(f). The company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the company’s financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. |
The company’s internal control over financial reporting includes those policies and procedures that: |
• | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of the assets of the company; | ||
• | Provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and the Directors of the company; and | ||
• | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. |
(c) | Changes in Internal Control over Financial Reporting:There have been no changes in the company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rule 13(a) — 15 during the year ended December 31, 2010 that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting. | |
(d) | Attestation Report of the Registered Public Accounting Firm:The company’s independent registered accounting firm, Ernst & Young Inc., has issued an audit report on the effectiveness of the company’s internal control over financial reporting. This report appears below. |
/s/ M Cutifani | /s/ S Venkatakrishnan | |
Mark Cutifani | Srinivasan Venkatakrishnan | |
Chief Executive Officer | Chief Financial Officer |
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Registered Auditor
May 27, 2011
253
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• | Assessing the integrity of new appointees in the selection and promotion process; |
• | Adherence to the policy on the delegation of authority; |
• | Induction of directors and employees on the company’s values, policies and procedures; and |
• | Compliance with a strict disciplinary code of conduct. |
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2010 | 2009 | |||||||
(in millions) | $ | $ | ||||||
Audit fees(1) | 7.76 | 5.80 | ||||||
Audit-related fees(2) | 1.98 | 1.77 | ||||||
Tax fees(3) | 0.17 | 0.40 | ||||||
Total | 9.91 | 7.97 | ||||||
Rounding may result in computational differences. | ||
(1) | The Audit fees consist of fees billed for the annual audit services engagement and other audit services, which are those services that only the external auditor reasonably can provide, and include the Company audit; statutory audits; attest services; and assistance with and review of documents filed with the SEC. Included in the Audit Fees for 2010 and 2009 are fees paid to the external auditors in respect of SOX, which was implemented in 2006. | |
(2) | Audit-related fees consist of fees billed for assurance and related services and include consultations concerning financial accounting and reporting standard, comfort letters and consents. | |
(3) | Tax fees include fees billed for tax advice and tax compliance services. |
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Registered Auditor
May 27, 2011
259
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Registered Auditor
May 26, 2011
260
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Registered Auditor
May 4, 2009
261
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April 22, 2009
262
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(In millions, except share and per share information)
2010 | 2009 | 2008 | ||||||||||||||
Notes | $ | $ | $ | |||||||||||||
Sales and other income | 5,402 | 3,954 | 3,730 | |||||||||||||
Product sales | 5,334 | 3,784 | 3,655 | |||||||||||||
Interest, dividends and other | 68 | 170 | 75 | |||||||||||||
Costs and expenses | 5,021 | 4,852 | 4,103 | |||||||||||||
Production costs | 2,656 | 2,229 | 2,159 | |||||||||||||
Exploration costs | 206 | 150 | 126 | |||||||||||||
Related party transactions | 6 | (15 | ) | (18 | ) | (10 | ) | |||||||||
General and administrative | 228 | 158 | 136 | |||||||||||||
Royalties | 142 | 84 | 78 | |||||||||||||
Market development costs | 14 | 10 | 13 | |||||||||||||
Depreciation, depletion and amortization | 720 | 615 | 615 | |||||||||||||
Impairment of assets | 5 | 91 | 8 | 670 | ||||||||||||
Interest expense | 5 | 151 | 123 | 72 | ||||||||||||
Accretion expense | 5 | 22 | 17 | 22 | ||||||||||||
Employment severance costs | 5 | 23 | 14 | 9 | ||||||||||||
(Profit)/loss on sale of assets, realization of loans, indirect taxes and other | 5 | (3 | ) | 10 | (64 | ) | ||||||||||
Non-hedge derivative loss and movement on bonds | 5 | 786 | 1,452 | 258 | ||||||||||||
Other operating items | 5 | — | — | 19 | ||||||||||||
Income/(loss) from continuing operations before income tax and equity income in associates | 381 | (898 | ) | (373 | ) | |||||||||||
Taxation (expense)/benefit | 7 | (255 | ) | 33 | (22 | ) | ||||||||||
Equity income/(loss) in associates | 40 | 88 | (149 | ) | ||||||||||||
Net income/(loss) from continuing operations | 166 | (777 | ) | (544 | ) | |||||||||||
Discontinued operations | 8 | — | — | 23 | ||||||||||||
Net income/(loss) | 166 | (777 | ) | (521 | ) | |||||||||||
Less: Net income attributable to noncontrolling interests | (54 | ) | (48 | ) | (42 | ) | ||||||||||
Net income/(loss) — attributable to AngloGold Ashanti | 112 | (825 | ) | (563 | ) | |||||||||||
Net income/(loss) — attributable to AngloGold Ashanti | ||||||||||||||||
Income/(loss) from continuing operations | 112 | (825 | ) | (586 | ) | |||||||||||
Discontinued operations | — | — | 23 | |||||||||||||
112 | (825 | ) | (563 | ) | ||||||||||||
Earnings/(loss) per share attributable to AngloGold Ashanti common stockholders: (cents) | ||||||||||||||||
From continuing operations | 9 | |||||||||||||||
Ordinary shares | 30 | (230 | ) | (186 | ) | |||||||||||
E Ordinary shares | 15 | (115 | ) | (93 | ) | |||||||||||
Ordinary shares — diluted | 30 | (230 | ) | (186 | ) | |||||||||||
E Ordinary shares — diluted | 15 | (115 | ) | (93 | ) | |||||||||||
Discontinued operations | 9 | |||||||||||||||
Ordinary shares | — | — | 7 | |||||||||||||
E Ordinary shares | — | — | 4 | |||||||||||||
Ordinary shares — diluted | — | — | 7 | |||||||||||||
E Ordinary shares — diluted | — | — | 4 | |||||||||||||
Net income/(loss) | 9 | |||||||||||||||
Ordinary shares | 30 | (230 | ) | (179 | ) | |||||||||||
E Ordinary shares | 15 | (115 | ) | (89 | ) | |||||||||||
Ordinary shares — diluted | 30 | (230 | ) | (179 | ) | |||||||||||
E Ordinary shares — diluted | 15 | (115 | ) | (89 | ) | |||||||||||
Weighted average number of shares used in computation | 9 | |||||||||||||||
Ordinary shares | 368,688,159 | 357,355,126 | 313,157,584 | |||||||||||||
E Ordinary shares — basic and diluted | 3,182,662 | 3,873,169 | 4,046,364 | |||||||||||||
Ordinary shares — diluted | 370,257,765 | 357,355,126 | 313,157,584 | |||||||||||||
Dividend paid per ordinary share (cents) | 18 | 13 | 13 | |||||||||||||
Dividend paid per E ordinary share (cents) | 9 | 7 | 7 | |||||||||||||
The accompanying notes are an integral part of these Consolidated Financial Statements. |
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(In millions, except share information)
2010 | 2009 | |||||||||||
Notes | $ | $ | ||||||||||
ASSETS | ||||||||||||
Current Assets | 1,997 | 2,758 | ||||||||||
Cash and cash equivalents | 575 | 1,100 | ||||||||||
Restricted cash | 10 | 10 | 12 | |||||||||
Receivables | 298 | 206 | ||||||||||
Trade | 11 | 53 | 45 | |||||||||
Recoverable taxes, rebates, levies and duties | 156 | 82 | ||||||||||
Related parties | 3 | 5 | ||||||||||
Other | 11 | 86 | 74 | |||||||||
Inventories | 12 | 792 | 663 | |||||||||
Materials on the leach pad | 12 | 91 | 40 | |||||||||
Derivatives | 24 | 1 | 330 | |||||||||
Deferred taxation assets | 7 | 214 | 333 | |||||||||
Assets held for sale | 17 | 16 | 74 | |||||||||
Property, plant and equipment, net | 13 | 5,926 | 5,454 | |||||||||
Acquired properties, net | 14 | 836 | 831 | |||||||||
Goodwill | 15 | 180 | 162 | |||||||||
Other intangibles, net | 15 | 17 | 18 | |||||||||
Derivatives | 24 | — | 5 | |||||||||
Other long-term inventory | 12 | 27 | 26 | |||||||||
Materials on the leach pad | 12 | 331 | 324 | |||||||||
Other long-term assets | 16 | 1,073 | 1,022 | |||||||||
Deferred taxation assets | 7 | 1 | 62 | |||||||||
Total assets | 10,388 | 10,662 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||
Current liabilities | 1,004 | 4,475 | ||||||||||
Trade accounts payable | 404 | 340 | ||||||||||
Payroll and related benefits | 175 | 147 | ||||||||||
Other current liabilities | 18 | 153 | 120 | |||||||||
Derivatives | 24 | — | 2,525 | |||||||||
Short-term debt | 19 | 135 | 1,292 | |||||||||
Tax payable | 134 | 42 | ||||||||||
Liabilities held for sale | 17 | 3 | 9 | |||||||||
Other non-current liabilities | 18 | 69 | 163 | |||||||||
Long-term debt | 19 | 1,730 | 667 | |||||||||
Long-term debt at fair value | 19 | 872 | — | |||||||||
Derivatives | 24 | 176 | 176 | |||||||||
Deferred taxation liabilities | 7 | 1,200 | 1,171 | |||||||||
Provision for environmental rehabilitation | 5 / 20 | 530 | 385 | |||||||||
Provision for labor, civil, compensation claims and settlements | 38 | 33 | ||||||||||
Provision for pension and other post-retirement medical benefits | 26 | 180 | 147 | |||||||||
Commitments and contingencies | 21 | — | — | |||||||||
Equity | 4,589 | 3,445 | ||||||||||
Common stock | ||||||||||||
Share capital — 600,000,000 (2009 — 600,000,000) authorized common stock of 25 ZAR cents each. Stock issued 2010 — 381,204,080 (2009 — 362,240,669) | 13 | 12 | ||||||||||
Additional paid in capital | 8,670 | 7,836 | ||||||||||
Accumulated deficit | (3,869 | ) | (3,914 | ) | ||||||||
Accumulated other comprehensive income | (385 | ) | (654 | ) | ||||||||
Other reserves | 37 | 37 | ||||||||||
Total AngloGold Ashanti stockholders’ equity | 4,466 | 3,317 | ||||||||||
Noncontrolling interests | 123 | 128 | ||||||||||
Total liabilities and equity | 10,388 | 10,662 | ||||||||||
The accompanying notes are an integral part of these Consolidated Financial Statements. |
F-2
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(In millions)
2010 | 2009 | 2008 | ||||||||||||||
Notes | $ | $ | $ | |||||||||||||
Net cash provided by operating activities | 1,038 | 443 | 64 | |||||||||||||
Net income/(loss) | 166 | (777 | ) | (521 | ) | |||||||||||
Reconciled to net cash provided by operations: | ||||||||||||||||
Loss/(profit) on sale of assets, realization of loans, indirect taxes and other | 22 | 18 | (64 | ) | ||||||||||||
Depreciation, depletion and amortization | 720 | 615 | 615 | |||||||||||||
Impairment of assets | 91 | 8 | 670 | |||||||||||||
Deferred taxation | 138 | (199 | ) | (72 | ) | |||||||||||
Cash utilized for hedge book settlements | (2,611 | ) | (797 | ) | (1,113 | ) | ||||||||||
Movement in non-hedge derivatives and bonds | 2,544 | 1,689 | 511 | |||||||||||||
Equity (income)/loss in associates | (40 | ) | (88 | ) | 149 | |||||||||||
Dividends received from associates | 143 | 101 | 78 | |||||||||||||
Other non cash items | 48 | (125 | ) | 27 | ||||||||||||
Net increase in provision for environmental rehabilitation, pension and other post-retirement medical benefits | 131 | 19 | 24 | |||||||||||||
Effect of changes in operating working capital items: | ||||||||||||||||
Receivables | (153 | ) | (44 | ) | (7 | ) | ||||||||||
Inventories | (215 | ) | (169 | ) | (131 | ) | ||||||||||
Accounts payable and other current liabilities | 54 | 192 | (101 | ) | ||||||||||||
Net cash provided by continuing operations | 1,038 | 443 | 65 | |||||||||||||
Net cash used in discontinued operations | — | — | (1 | ) | ||||||||||||
Net cash used in investing activities | (1,887 | ) | (268 | ) | (1,593 | ) | ||||||||||
Increase in non-current investments | (114 | ) | (89 | ) | (93 | ) | ||||||||||
Associates and equity accounted joint ventures acquired | (44 | ) | (354 | ) | — | |||||||||||
Proceeds on disposal of associates | 1 | — | 48 | |||||||||||||
Associates loans advanced | (3 | ) | (2 | ) | (4 | ) | ||||||||||
Associates loans repaid | — | — | 4 | |||||||||||||
Additions to property, plant and equipment | (973 | ) | (1,019 | ) | (1,194 | ) | ||||||||||
Proceeds on sale of mining assets | 69 | 1,142 | 39 | |||||||||||||
Proceeds on sale of discontinued assets | — | — | 10 | |||||||||||||
Proceeds on sale of available for sale investments | 79 | 2 | 4 | |||||||||||||
Proceeds on redemption of held to maturity investments | 63 | 79 | 84 | |||||||||||||
Cash outflows from derivatives purchased | (984 | ) | (18 | ) | (485 | ) | ||||||||||
Loans receivable advanced | (6 | ) | — | — | ||||||||||||
Loans receivable repaid | — | 1 | — | |||||||||||||
Change in restricted cash | 25 | (10 | ) | (6 | ) | |||||||||||
Net cash generated by financing activities | 230 | 303 | 1,715 | |||||||||||||
Short-term debt repaid | (1,522 | ) | (1,867 | ) | (298 | ) | ||||||||||
Short-term debt raised | 363 | 1,014 | 110 | |||||||||||||
Issuance of stock | 798 | 306 | 1,722 | |||||||||||||
Share issue expenses | (20 | ) | (11 | ) | (54 | ) | ||||||||||
Long-term debt repaid | (120 | ) | (864 | ) | (316 | ) | ||||||||||
Long-term debt raised | 1,953 | 1,760 | 743 | |||||||||||||
Debt issue costs | (39 | ) | (14 | ) | — | |||||||||||
Cash outflows from derivatives with financing | (1,066 | ) | — | (134 | ) | |||||||||||
Cash inflows from derivatives with financing | — | 35 | — | |||||||||||||
Dividends paid to common stockholders | (67 | ) | (45 | ) | (41 | ) | ||||||||||
Dividends paid to noncontrolling interests | (50 | ) | (11 | ) | (17 | ) | ||||||||||
Net (decrease)/increase in cash and cash equivalents | (619 | ) | 478 | 186 | ||||||||||||
Effect of exchange rate changes on cash | 105 | 47 | (88 | ) | ||||||||||||
Cash and cash equivalents — January 1, | 1,100 | 575 | 477 | |||||||||||||
Cash and cash equivalents — December 31, | 586 | (1) | 1,100 | 575 | ||||||||||||
(1) | Includes cash and cash equivalents of held for sale assets of $11 million at December 31, 2010. | |
The accompanying notes are an integral part of these Consolidated Financial Statements. |
F-3
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(In millions, except share information)
AngloGold Ashanti stockholders | ||||||||||||||||||||||||||||||||
Accumulated other | ||||||||||||||||||||||||||||||||
Common | Additional paid | comprehensive | Accumulated | Other | Noncontrolling | |||||||||||||||||||||||||||
Common | stock | in capital | income* | deficit | reserves | interests | Total | |||||||||||||||||||||||||
stock | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Balance — January 1, 2008 | 276,544,061 | 10 | 5,607 | (625 | ) | (2,440 | ) | 63 | 2,615 | |||||||||||||||||||||||
Net (loss)/income | (563 | ) | 42 | (521 | ) | |||||||||||||||||||||||||||
Translation loss | (597 | ) | (8 | ) | (605 | ) | ||||||||||||||||||||||||||
Net loss on cash flow hedges removed from other comprehensive income and reported in income, net of tax | 157 | 3 | 160 | |||||||||||||||||||||||||||||
Net loss on cash flow hedges, net of tax | (61 | ) | (61 | ) | ||||||||||||||||||||||||||||
Hedge ineffectiveness on cash flow hedges, net of tax | 8 | 8 | ||||||||||||||||||||||||||||||
Net loss on available-for-sale financial assets arising during the period, net of tax | (29 | ) | (29 | ) | ||||||||||||||||||||||||||||
Release on disposal of available-for-sale financial assets during the period, net of tax | (1 | ) | (1 | ) | ||||||||||||||||||||||||||||
Other comprehensive loss | (528 | ) | ||||||||||||||||||||||||||||||
Comprehensive loss | (1,049 | ) | ||||||||||||||||||||||||||||||
Acquisition of subsidiary | 1 | 1 | ||||||||||||||||||||||||||||||
Stock issues as part of rights offer | 69,470,442 | 2 | 1,664 | 1,666 | ||||||||||||||||||||||||||||
Stock issues as part of Golden Cycle acquisition | 3,181,198 | — | 118 | 118 | ||||||||||||||||||||||||||||
Stock issues as part of Sao Bento acquisition | 2,701,660 | — | 70 | 70 | ||||||||||||||||||||||||||||
Stock issues as part of Share Incentive Scheme | 672,545 | — | 14 | 14 | ||||||||||||||||||||||||||||
Stock issues in exchange for E Ordinary shares cancelled | 94 | — | 3 | 3 | ||||||||||||||||||||||||||||
Stock issues transferred from Employee Share Ownership Plan to exiting employees | 57,761 | — | 2 | 2 | ||||||||||||||||||||||||||||
Stock based compensation expense | 24 | 24 | ||||||||||||||||||||||||||||||
Dividends | (41 | ) | (17 | ) | (58 | ) | ||||||||||||||||||||||||||
Balance — December 31, 2008 | 352,627,761 | 12 | 7,502 | (1,148 | ) | (3,044 | ) | 84 | 3,406 | |||||||||||||||||||||||
Net (loss)/income | (825 | ) | 48 | (777 | ) | |||||||||||||||||||||||||||
Translation gain | 320 | 6 | 326 | |||||||||||||||||||||||||||||
Net loss on cash flow hedges removed from other comprehensive income and reported in income, net of tax | 97 | 1 | 98 | |||||||||||||||||||||||||||||
Net loss on cash flow hedges, net of tax | (12 | ) | (12 | ) | ||||||||||||||||||||||||||||
Hedge ineffectiveness on cash flow hedges, net of tax | 5 | 5 | ||||||||||||||||||||||||||||||
Net gain on available-for-sale financial assets arising during the period, net of tax | 72 | 72 | ||||||||||||||||||||||||||||||
Realized loss in earnings on available-for-sale financial assets during the period, net of tax | 12 | 12 | ||||||||||||||||||||||||||||||
Other comprehensive income | 501 | |||||||||||||||||||||||||||||||
Comprehensive loss | (276 | ) | ||||||||||||||||||||||||||||||
Share of capital transaction at equity accounted joint venture | 37 | 37 | ||||||||||||||||||||||||||||||
Stock issues as part of equity offering | 7,624,162 | — | 280 | 280 | ||||||||||||||||||||||||||||
Stock issues as part of Share Incentive Scheme | 1,131,916 | — | 25 | 25 | ||||||||||||||||||||||||||||
Stock issues in exchange for E Ordinary shares cancelled | 1,181 | — | 3 | 3 | ||||||||||||||||||||||||||||
Stock issues transferred from Employee Share Ownership Plan to exiting employees | 189,787 | — | 7 | 7 | ||||||||||||||||||||||||||||
Stock based compensation expense | 19 | 19 | ||||||||||||||||||||||||||||||
Dividends | (45 | ) | (11 | ) | (56 | ) | ||||||||||||||||||||||||||
Balance — December 31, 2009 | 361,574,807 | 12 | 7,836 | (654 | ) | (3,914 | ) | 37 | 128 | 3,445 | ||||||||||||||||||||||
Net income | 112 | 54 | 166 | |||||||||||||||||||||||||||||
Translation gain | 229 | 5 | 234 | |||||||||||||||||||||||||||||
Net loss on cash flow hedges removed from other comprehensive income and reported in income, net of tax | 20 | 20 | ||||||||||||||||||||||||||||||
Net gain on available-for-sale financial assets arising during the period, net of tax | 74 | 74 | ||||||||||||||||||||||||||||||
Release on disposal of available-for-sale financial assets during the period, net of tax | (56 | ) | (56 | ) | ||||||||||||||||||||||||||||
Realized loss in earnings on available-for-sale financial assets during the period, net of tax | 2 | 2 | ||||||||||||||||||||||||||||||
Other comprehensive income | 274 | |||||||||||||||||||||||||||||||
Comprehensive loss | 440 | |||||||||||||||||||||||||||||||
Stock issues as part of equity offering | 18,140,000 | 1 | 772 | 773 | ||||||||||||||||||||||||||||
Stock issues as part of Share Incentive Scheme | 823,411 | — | 26 | 26 | ||||||||||||||||||||||||||||
Stock issues in exchange for E Ordinary shares cancelled | — | — | 12 | 12 | ||||||||||||||||||||||||||||
Stock issues transferred from Employee Share Ownership Plan to exiting employees | 230,921 | — | 10 | 10 | ||||||||||||||||||||||||||||
Stock based compensation expense | 14 | 14 | ||||||||||||||||||||||||||||||
Dividends | (67 | ) | (64 | ) | (131 | ) | ||||||||||||||||||||||||||
Balance — December 31, 2010 | 380,769,139 | 13 | 8,670 | (385 | ) | (3,869 | ) | 37 | 123 | 4,589 | ||||||||||||||||||||||
* | The cumulative translation loss included in accumulated other comprehensive income amounted to $536 million (2009: $765 million). The translation loss has no tax effect. The cumulative charge, net of deferred taxation of $1 million (2009: $33 million), included in accumulated other comprehensive income in respect of cash flow hedges amounted to $2 million (2009: $22 million). The cumulative gain, net of deferred taxation of $nil million (2009: $3 million), included in accumulated other comprehensive income in respect of available for sale financial assets amounted to $89 million (2009: $69 million). The cumulative gain included in accumulated other comprehensive income in respect of the hedge of a net investment in foreign entities amounted to $64 million (2009: $64 million). This gain is offset by $64 million (2009: $64 million) arising from translation of net investments in foreign entities. |
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(In millions, except share and per share information)
1. | NATURE OF OPERATIONS | |
AngloGold Ashanti Limited (the “Company”), as it conducts business today, was formed on April 26, 2004 following the Business Combination of AngloGold Limited (AngloGold) with Ashanti Goldfields Company Limited (Ashanti). AngloGold, formerly Vaal Reefs Exploration and Mining Company Limited, was incorporated in South Africa on May 29, 1944 and Ashanti was incorporated in Ghana on August 19, 1974. The Company conducts gold-mining operations in the following regions: South Africa; Continental Africa (Ghana, Guinea, Mali, Namibia and Tanzania); Australasia (Australia) and the Americas (Argentina, Brazil and United States of America). The Company also produces as by-product: silver, uranium oxide and sulfuric acid. | ||
2. | ACCOUNTING CHANGES | |
Disclosures about the credit quality of financing receivables and the allowance for credit losses | ||
In July 2010, the Financial Accounting Standards Board (“FASB”) issued guidance to address concerns about the sufficiency, transparency, and robustness of credit risk disclosures for financing receivables and the related allowance for credit losses. The guidance requires that entities disclose information at disaggregated levels. The expanded disclosures include information regarding the credit quality of receivables as of the end of a reporting period. | ||
The new disclosure requirements apply to all entities that have lending arrangements in the form of receivables or a lessor’s right to lease payments (other than operating leases), although disclosures for trade accounts receivable with a contractual maturity of one year or less are exempt. For public entities, the new disclosures are required for interim and annual periods ending on or after December 15, 2010. Except for disclosure changes, the adoption had no impact on the Company’s financial statements. | ||
The accounting standards codification | ||
In June 2009, the FASB established the accounting standards codification to become the source of authoritative U.S. GAAP. The codification will supersede all non-SEC accounting and reporting standards. It is effective for interim and annual periods ending after September 15, 2009. The adoption had no impact on the Company’s financial statements, other than the references to authoritative U.S. GAAP. | ||
Recognition and presentation of other-than-temporary impairments | ||
In April 2009, the FASB updated the Accounting Standards Codification (“the Codification” or “ASC”) guidance for recognition and presentation of other-than-temporary impairments which: (i) clarifies the factors that should be considered when determining whether a debt security is other than temporarily impaired, (ii) provides guidance on the amount recognized of an other-than-temporary impairment and (iii) expands the disclosures required. It is effective for interim and annual reporting periods ending after June 15, 2009. The adoption had no material impact on the Company’s financial statements. | ||
Interim disclosures about fair value of financial instruments | ||
In April 2009, the FASB updated the ASC guidance for interim disclosures about fair value of financial instruments which requires disclosures about fair value of financial instruments for interim reporting periods as well as in annual financial statements. It is effective for interim reporting periods ending after June 15, 2009. Except for presentation changes, the adoption had no impact on the Company’s financial statements. |
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2. | ACCOUNTING CHANGES(continued) | |
Assets and liabilities from contingencies in business combinations | ||
In April 2009, the FASB updated the ASC guidance for accounting for assets acquired and liabilities assumed in a business combination that arise from contingencies. The guidance addresses issues raised on initial recognition and measurement, subsequent measurement and accounting and disclosure of assets and liabilities arising from contingencies in a business combination. It is effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after January 1, 2009. The Company adopted the provisions to be applied to all future business combinations. | ||
Derivative instruments | ||
In March 2008, the FASB updated the ASC guidance for disclosures about derivative instruments and hedging activities. The guidance requires entities to provide enhanced disclosures about (i) how and why an entity uses derivative instruments, (ii) how derivative instruments and related hedged items are accounted for, and (iii) how derivative instruments and related hedged items affect an entity’s financial position, results of operations and cash flows. The Company adopted these provisions on January 1, 2009. Except for presentation changes, the adoption had no impact on the Company’s financial statements. | ||
Noncontrolling interests | ||
In December 2007, the FASB updated the ASC guidance for noncontrolling interests in consolidated financial statements to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. The guidance clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. The Company adopted the provisions on January 1, 2009. Except for presentation changes, the adoption had no impact on the Company’s financial statements. | ||
Business combinations | ||
In December 2007, the FASB updated the ASC guidance for business combinations, which requires the acquiring entity in a business combination to recognize all the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose information on the nature and financial effect of the business combination. The Company adopted the provisions on January 1, 2009 to be applied to all future business combinations. | ||
Post-retirement benefit plan assets | ||
In December 2008, the FASB updated the ASC guidance for employers’ disclosures about post-retirement benefit plan assets, which provides guidance on an employer’s disclosures about plan assets of a defined benefit pension or other post-retirement plan. It requires more detailed disclosures about employers’ plan assets, including employers’ investment strategies, major categories of plan assets, concentrations of risk within plan assets and valuation techniques used to measure the fair value of plan assets. The Company early adopted the provisions as of December 31, 2008. The adoption did not have a material impact on the Company’s financial statements. | ||
Disclosures about credit derivatives and certain guarantees | ||
In September 2008, the FASB updated the ASC guidance for disclosures about credit derivatives and certain guarantees, which requires disclosures by sellers of credit derivatives, including credit derivatives embedded in a hybrid instrument to provide certain disclosures for each credit derivative for each statement of financial position presented. It also requires an additional disclosure about the current status of the payment/performance risk of a guarantee. The Company does not have any credit derivatives. The Company adopted the disclosure requirements with regards to guarantees as of December 31, 2008. |
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2. | ACCOUNTING CHANGES(continued) | |
Employee benefit plans | ||
In September 2006, the FASB updated the ASC guidance for employers’ accounting for defined benefit pension and other post-retirement plans. The adoption of its requirement to measure the plan assets and benefit obligations as of December 31, 2008 did not have a material impact on the Company’s financial statements. | ||
Fair value measurements | ||
The Company adopted the FASB ASC guidance for fair value measurements for financial assets and financial liabilities on January 1, 2008. | ||
It provided enhanced guidance for using fair value to measure assets and liabilities. Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. It clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. It also requires that fair value measurements be separately disclosed by level within the fair value hierarchy. | ||
In February 2008, the FASB issued an update to the ASC guidance which provided a one year deferral until January 1, 2009 for certain non-financial assets and non-financial liabilities, except for those items that are recognized or disclosed at fair value on a recurring basis (at least annually). The Company adopted the provisions on January 1, 2009. | ||
In October 2008, the ASC guidance was updated for determining the fair value of a financial asset when the market for that asset is not active. The intent of this update was to provide guidance on how the fair value of a financial asset is to be determined when the market for that financial asset is not active. It is effective as of the issuance date and has not affected the valuation of the Company’s financial assets. | ||
In January 2010, the ASC guidance for disclosures about fair value measurements was updated, providing amendments to the guidance which requires entities to disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. The updated guidance further clarified the level of disaggregation required for assets and liabilities and the disclosures required for inputs and valuation techniques used to measure the fair value of assets and liabilities that fall in either Level 2 or Level 3. The disclosures related to Level 1 and Level 2 fair value measurements are effective for interim and annual reporting periods beginning after December 15, 2009. Except for disclosure changes, the adoption of the updated guidance had no material impact on the Company’s financial statements. |
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3. | ACQUISITIONS AND DISPOSALS OF BUSINESSES AND ASSETS |
• | Disposal of Tau Lekoa | ||
On February 17, 2009, AngloGold Ashanti announced the terms of the sale of its Tau Lekoa mine, together with the adjacent properties Weltevreden, Jonkerskraal and Goedgenoeg, to Simmer & Jack Mines Limited (“Simmers”). The sale was concluded effective August 1, 2010. The selling price of R600 million was payable in two tranches, R450 million ($64 million) was paid in cash on August 4, 2010 with the remaining R150 million (which was subject to certain offset adjustments) being settled on November 1, 2010. | |||
• | Disposal of B2Gold | ||
AngloGold Ashanti Limited realized net proceeds of $68 million from the sale of its entire holding of 31,556,650 shares in Vancouver-based gold producer B2Gold Corp (“B2Gold”). This stake, equivalent to about 10.17 percent of B2Gold’s outstanding shares, was sold on November 9, 2010. The Company acquired a 15.9 percent direct interest in B2Gold during 2008 as discussed in this note under 2008 disposals “Disposal of exploration interests in Colombia”. |
• | Acquisition of an effective 45 percent interest in the Kibali gold project | ||
With effect from December 22, 2009, AngloGold Ashanti and Randgold Resources Limited (“Randgold”) each hold an effective 45 percent interest in the Kibali gold project (formerly the Moto gold project), while L’Office des Mines d’Or de Kilo-Moto (“OKIMO”), a Congolese parastatal, holds the remaining 10 percent stake, thereby maintaining the continued vested interest of the Government of the Democratic Republic of the Congo (“the DRC”) in the Kibali gold project. The purchase price for the acquisition of AngloGold Ashanti’s initial interest of 35 percent in the Kibali gold project was funded by an offering of 7,624,162 ordinary shares at an issue price of $37.25 per ADS (or R288.32 per ordinary share) which represented an approximate 3 percent discount to the closing price of its ADS on the NYSE on August 31, 2009. The offering closed on September 8, 2009 and AngloGold Ashanti received total gross proceeds, before underwriting discounts and expenses, of approximately $284 million. Total consideration for the effective 45 percent interest acquired in the Kibali gold project amounted to $345 million. | |||
• | Acquisition of an additional interest in Sadiola | ||
On December 29, 2009, AngloGold Ashanti, together with IAMGOLD Corporation purchased from the International Finance Corporation (“IFC”), the IFC’s 6 percent stake in Société d’Exploitation des Mines d’or de Sadiola (“SEMOS”), which owns the Sadiola Gold Mine for $12 million (AngloGold Ashanti’s share being $6 million) to be followed by contingent payments not exceeding $3 million (of which AngloGold Ashanti’s share is $1.5 million). This transaction has resulted in AngloGold Ashanti and IAMGOLD each increasing their respective interest in Sadiola from 38 percent to 41 percent. |
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3. | ACQUISITIONS AND DISPOSALS OF BUSINESSES AND ASSETS(continued) |
• | Disposal of Boddington Gold Mine | ||
On January 28, 2009, AngloGold Ashanti announced that it had agreed to sell its 33.33 percent interest in the Boddington Gold Mine to Newmont Mining Corporation (“Newmont”). The transaction was completed on June 26, 2009. In terms of the agreement, the Company received payment of $750 million in cash during June 2009 and a further $240 million in December 2009. In addition, the Company is entitled to receive a royalty on any gold recovered or produced by the Boddington Gold Mine, where the gold price is in excess of Boddington Gold Mine’s cash costs plus $600 per ounce. The royalty commences on July 1, 2010 and is capped at a total amount of $100 million. All refunds and reimbursements between the Company and Newmont have been settled. |
• | Acquisition of noncontrolling interests in North America | ||
Effective July 1, 2008, AngloGold Ashanti acquired the remaining 33 percent shareholding in the Cripple Creek & Victor Gold Mining Company joint venture (“CC&V”) through the acquisition of 100 percent of Golden Cycle Gold Corporation (“GCGC”). The Company issued 3,181,198 AngloGold Ashanti shares (total value $118 million) pursuant to this transaction. The Company completed the purchase price allocation of fixed assets during the third quarter of 2008. The transaction was accounted for as a purchase business combination whereby identifiable assets acquired and liabilities assumed were recorded at their fair market values as of the date of acquisition. The excess of the purchase price over such fair value was recorded as goodwill and as such, the acquisition resulted in goodwill of $18 million being recorded, relating mainly to the premium paid to obtain the remaining interest in CC&V. The goodwill related to the acquisition is non-deductible for tax purposes. Details of the acquisition are as follows: |
2008 | ||||
Golden Cycle | ||||
acquisition | ||||
$ | ||||
Property, plant and equipment | 93 | |||
Goodwill | 18 | |||
Current assets | 7 | |||
Net value of assets acquired | 118 | |||
Purchase price paid | (118 | ) | ||
- Issuance of common stock | (118 | ) | ||
Gross value | (118 | ) | ||
Share issue expenses | — | |||
• Acquisition of São Bento mine | ||
On December 15, 2008, AngloGold Ashanti announced that it had completed the purchase of São Bento Gold Company Limited (“SBG”) and its wholly-owned subsidiary, São Bento Mineração S.A. (“SBMSA”) from Eldorado Gold Corporation (“Eldorado”) for a consideration of $70 million through the issuance of 2,701,660 AngloGold Ashanti shares. The transaction was accounted for as an asset acquisition. The purchase price was allocated to the underlying assets acquired. The purchase of SBG and SBMSA gave AngloGold Ashanti access to the São Bento mine, a gold operation situated in the immediate vicinity of AngloGold Ashanti’s Córrego do Sítio mine, located in the municipality of Santa Bárbara, Iron Quadrangle region of Minas Gerais State, Brazil. |
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3. | ACQUISITIONS AND DISPOSALS OF BUSINESSES AND ASSETS(continued) |
• | Disposal of exploration interests in Colombia | ||
On February 14, 2008, AngloGold Ashanti announced that it had entered into a binding memorandum of agreement (“MOA”) with B2Gold. B2Gold would acquire from AngloGold Ashanti, additional interests in certain mineral properties in Colombia. In exchange, B2Gold would issue to AngloGold Ashanti, 25 million common shares and 21.4 million common share purchase warrants in B2Gold. On May 16, 2008, AngloGold Ashanti announced that it had completed the transaction to acquire a 15.9 percent direct interest in B2Gold and increase B2Gold’s interest in certain Colombian properties, as stated. | |||
• | Disposal of equity interest in Nufcor International Limited | ||
During the quarter ended June 30, 2008, the Company disposed of its 50 percent interest held in Nufcor International Limited, a London based uranium marketing, trading and advisory business, to Constellation Energy Commodities Group for net proceeds of $48 million. |
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4. | SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation: The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The Company presents its consolidated financial statements in United States dollars. The functional currency of a significant portion of the group’s operations is the South African rand. Other main subsidiaries have functional currencies of US dollars and Australian dollars. The translation of amounts into US dollars is in accordance with the FASB ASC guidance on foreign currency translation. | ||
Use of estimates: The preparation of the financial statements requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The determination of estimates requires the exercise of judgment based on various assumptions and other factors such as historical experience, current and expected economic conditions, and in some cases actuarial techniques. The Company regularly reviews estimates and assumptions that affect the annual financial statements, however, actual results could differ from those estimates. | ||
The more significant areas requiring the use of management estimates and assumptions include mineral reserves that are the basis of future cash flow estimates and unit-of-production depreciation, depletion and amortization calculations; environmental, reclamation and closure obligations; estimates of recoverable gold and other materials in heap leach pads; asset impairments (including impairments of goodwill, long-lived assets, and investments); write-downs of inventory to net realizable value; post employment, post retirement and other employee benefit liabilities; valuation allowances for deferred taxation assets; reserves for contingencies and litigation; and the fair value and accounting treatment of financial instruments. | ||
The following are the accounting policies used by the Company which have been consistently applied: |
4.1 | Consolidation | ||
The consolidated financial information includes the financial statements of the Company and its subsidiaries. Where the Company has a direct or indirect controlling interest in an entity through a subsidiary, the entity is classified as a subsidiary. Interests in incorporated mining joint ventures in which the Company has joint control are accounted for by the equity method. | |||
The financial statements of subsidiaries and the Environmental Trust Fund (a rehabilitation trust under the Company’s control) are prepared for the same reporting period as the Company, using the same accounting policies, except for Rand Refinery Limited (a subsidiary of the Company) which reports on a three-month time lag. Adjustments are made to subsidiary financial results for material transactions and events in the intervening period. | |||
Subsidiaries are consolidated from the date on which control is transferred. They are de-consolidated from the date on which control ceases. | |||
All significant intercompany transactions and accounts are eliminated in consolidation. |
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4. | SIGNIFICANT ACCOUNTING POLICIES(continued) |
4.2 | Investments in equity investees (associates and incorporated joint ventures) | ||
An associate is an entity other than a subsidiary in which the Company has a material long-term interest and in respect of which the Company has the ability to exercise significant influence over operational and financial policies, normally owning between 20 percent and 50 percent of the voting equity. | |||
A joint venture is an entity in which the Company holds a long-term interest and which is jointly controlled by the Company and one or more external joint venture partners under a contractual arrangement that provides for strategic, financial and operating policy decisions relating to the activities requiring unanimous consent. | |||
Investments in associates and incorporated joint ventures are accounted for using the equity method. | |||
Goodwill relating to associates and incorporated joint ventures is included in the carrying value of the Company’s investment. The total carrying value of equity accounted investments in associates and incorporated joint ventures, including goodwill, is evaluated for impairment when conditions indicate that a decline in fair value below the carrying amount is other than temporary or at least annually. When an indicated impairment exists, the carrying value of the Company’s investment in those entities is written down to its fair value. The Company’s share of results of equity accounted investees, that have financial years within three months of the fiscal year-end of the Company, is included in the consolidated financial statements based on the results reported by those investees for their financial years. There were no significant adjustments required to be made in respect of equity accounted investees which have financial years that are different to those of the Company. | |||
Profits realized in connection with transactions between the Company and associated companies are eliminated in proportion to ownership. | |||
4.3 | Foreign currency transactions and foreign currency statements | ||
Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (the ‘functional currency’). | |||
Transactions and balances | |||
Transactions in foreign currencies are converted at the rates of exchange ruling at the date of these transactions. Monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange ruling at balance sheet date. Non-monetary items are translated at historic rates. Gains, losses and costs associated with foreign currency transactions are recognized in the income statement in the period to which they relate, except where hedge accounting is applied. These transactions are included in the determination of other income. | |||
Group companies | |||
The results and financial position of all group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows: |
• | share capital and premium are translated at historical rates of exchange; | ||
• | equity items other than profit attributable to equity shareholders are translated at the closing rate; | ||
• | assets and liabilities for each balance sheet presented are translated at the closing rate; | ||
• | income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and | ||
• | all resulting exchange differences are recognized as a separate component of equity and included within accumulated other comprehensive income. |
Exchange differences arising from the translation of the net investment in foreign operations, and of borrowings and other currency instruments designated as hedges of such investments, are taken to stockholders’ equity on consolidation. | |||
When a foreign operation is sold, cumulative exchange differences are recognized in the income statement as part of the gain or loss on sale. | |||
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate at each balance sheet date. |
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4. | SIGNIFICANT ACCOUNTING POLICIES(continued) |
4.4 | Segment reporting | ||
A segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other segments and are reported on a reporting segment basis using the management approach. This approach is based on the way management organizes segments within the Company for making operating decisions and assessing performance. The Chief Operating Decision Maker has determined that the Company operates primarily in the delivery of gold. | |||
4.5 | Cash and cash equivalents and restricted cash | ||
Cash and cash equivalents consist of cash balances and highly liquid investments with an original maturity of three months or less. Due to the short maturity of cash equivalents, their carrying amounts approximate their fair value. Restricted cash is reported separately in the consolidated balance sheets. Cash that is restricted as to withdrawal or use for other than current operations is classified as non-current. | |||
4.6 | Non-marketable debt securities | ||
Investments in non-marketable debt securities, for which the Company does not control or exercise significant influence, are classified as held to maturity and are subsequently measured at amortized cost. If there is evidence that held to maturity financial assets are impaired the carrying amount is reduced and the loss recognized in the income statement. | |||
4.7 | Marketable equity investments and debt securities | ||
Marketable equity investments and debt securities which are considered available-for-sale, are carried at fair value, and the unrealized gains and losses, net of tax, computed in marking these securities to market are reported within accumulated other comprehensive income in the period in which they arise. These amounts are removed from accumulated other comprehensive income and reported in income when the asset is derecognized or when there is evidence that the asset is impaired in accordance with the FASB ASC guidance on accounting for certain investments in debt and equity securities. AngloGold Ashanti considers several factors in determining other-than-temporary impairment losses: including the current and expected long-term business prospects of the issuer; the length of time and relative magnitude of the price decline and its ability and intent to hold the investment until the price recovers. | |||
Marketable debt securities that are classified as held to maturity are subsequently measured at amortized cost. | |||
4.8 | Inventories | ||
Inventories, including gold in process, gold on hand (doré/bullion), uranium oxide, sulfuric acid, ore stockpiles and supplies, are stated at the lower of cost or market value. Gold in process is valued at the average total production cost at the relevant stage of production as described below. The cost of gold, uranium oxide and sulfuric acid is determined principally by the weighted average cost method using related production costs. | |||
Ore stockpiles are valued at the average moving cost of mining the ore. Supplies are valued at the lower of weighted average cost or market value. Heap leach pad materials are measured on an average total production cost basis. | |||
The cost of inventory is determined using the full absorption costing method. Gold in process and ore stockpile inventory include all costs attributable to the stage of completion. Costs capitalized to inventory include amortization of property, plant and equipment and capitalized mining costs, direct and indirect materials, direct labor, shaft overhead expenses, repairs and maintenance, utilities, metallurgy costs, attributable production taxes and royalties, and directly attributable mine costs. Gold on hand (doré/bullion) includes all gold in process and refining costs. Ore is recorded in inventory when blasted underground, or when placed on surface stockpiles in the case of open-pit operations. | |||
The costs of materials currently contained on the leach pad are reported as a separate line item and classified as either short-term or long-term. Materials on the leach pad are classified as short-term if the Company expects the related gold to be recovered within twelve months. The short-term portion is determined by multiplying the average cost per ounce in inventory by the expected production ounces for the next twelve months. Heap leach pad inventory occurs in two forms: (1) gold recoverable but yet to be dissolved (i.e. gold still in the ore), and (2) gold recoverable from gold dissolved in solution within the leach pad (i.e. pore water). This estimate was used in determining the short-term portion of materials on the leach pad. |
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4. | SIGNIFICANT ACCOUNTING POLICIES(continued) |
4.9 | Development costs and stripping costs | ||
Development costs relating to major programs at existing mines are capitalized. Development costs consist primarily of expenditures to initially establish a mine and to expand the capacity of operating mines. | |||
Post production stripping costs are considered costs of the extracted minerals under a full absorption costing system and recognized as a component of inventory to be recognized in cost of sales in the same period as the revenue from the sale of the inventory. Additionally, capitalization of such costs only occurs to the extent inventory exists at the end of a reporting period. | |||
Costs associated with the opening of a new pit, are capitalized as mine development costs. | |||
4.10 | Depreciation, depletion and amortization | ||
Mine development costs, mine plant facilities and other fixed assets | |||
Mine development costs, mine plant facilities and other fixed assets are recorded at cost less accumulated amortization and impairments. Cost includes pre-production expenditure incurred during the development of a mine and the present value of future decommissioning costs. | |||
Capitalized mine development costs include expenditure incurred to develop new orebodies, to define further mineralization in existing orebodies and to expand the capacity of a mine. Where funds have been borrowed specifically to finance a project, the amount of interest capitalized represents the actual borrowing costs incurred. | |||
Depreciation, depletion and amortization of mine development costs are computed principally by the units-of-production method based on estimated proven and probable mineral reserves. Proven and probable mineral reserves reflect estimated quantities of economically recoverable reserves which can be recovered in the future from known mineral deposits. | |||
Mine plant facilities are amortized using the lesser of their useful life or units-of-production method based on estimated proven and probable mineral reserves. Main shafts are depleted using total proven and probable reserves as the shaft will be used over the life of the mine. Other infrastructure costs including ramps, stopes, laterals, etc. and ore reserve development are depleted using proven and probable reserves applicable to that specific area. When an area is vacated and there is no longer an intention to mine due to a change in mine plans, all costs that have not been depleted are written off. | |||
Other fixed assets comprising vehicles and computer equipment, are depreciated by the straight-line method over their estimated useful lives as follows: |
• | vehicles up to five years; and | ||
• | computer equipment up to three years. |
Acquired properties | |||
Acquired properties are carried at amortized cost. Purchased undeveloped mineral interests are acquired mineral rights and are recorded as tangible assets as part of acquired properties. The amount capitalized related to a mineral interest represents its fair value at the time it was acquired, either as an individual asset purchase or as a part of a business combination. “Brownfield” stage mineral interests represent interests in properties that are believed to potentially contain other mineralized material, such as measured, indicated or inferred mineral resources with insufficient drill spacing to qualify as proven and probable mineral reserves, that is in proximity to proven and probable mineral reserves and within an immediate mine structure. “Greenfield” stage mineral interests represent interests in properties that are other mine-related or greenfields exploration potential that are not part of measured or indicated resources and are comprised mainly of material outside of a mine’s infrastructure. The Company’s mineral rights are enforceable regardless of whether proven and probable mineral reserves have been established. The Company has the ability and intent to renew mineral rights where the existing term is not sufficient to recover all identified and valued proven and probable mineral reserves and/or undeveloped mineral interests. |
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4. | SIGNIFICANT ACCOUNTING POLICIES(continued) |
4.10 | Depreciation, depletion and amortization(continued) | ||
Brownfield properties are carried at acquired costs until such time as a mineral interest enters the production stage and are amortized using the unit-of-production method based on estimated proven and probable mineral reserves. | |||
Greenfield mineral interests are carried at acquired costs until such time as a mineral interest enters the production stage and are amortized using the unit-of-production method based on estimated proven and probable mineral reserves. | |||
Both Brownfield properties and Greenfield mineral interests are evaluated for impairment as held-for-use assets in accordance with the Company’s asset impairment accounting policy. See Note 4.13. | |||
4.11 | Other mining costs | ||
Other mining costs including repair and maintenance costs incurred in connection with major maintenance activities are charged to operations as incurred. | |||
4.12 | Goodwill | ||
Where an investment in a subsidiary, joint venture or an associate is made, any excess of the purchase price over the fair value of the attributable mineral reserves including value beyond proven and probable, acquired properties and other net assets is recognized as goodwill. | |||
Goodwill relating to subsidiaries is tested for impairment at least annually or when indicators of impairment exist and is carried at cost less accumulated impairment losses. Potential impairment is identified by comparing the fair value of a reporting unit with its carrying amount. The fair value of a reporting unit is determined using an expected present value technique. | |||
Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to reporting units for the purpose of impairment testing. | |||
Goodwill relating to incorporated joint ventures and associates is included within the carrying value of the investment in incorporated joint ventures and associates and tested for impairment when indicators exist. See Note 4.2. | |||
The allocation of goodwill to an individual operating mine will result in an eventual goodwill impairment due to the wasting nature of the mine reporting unit. The Company performs its annual impairment review of assigned goodwill during the fourth quarter of each year. | |||
4.13 | Asset impairment | ||
The Company evaluates its held-for-use long lived assets for impairment when events or changes in circumstances indicate that the related carrying amount may not be recoverable. If the sum of estimated future cash flows on an undiscounted basis is less than the carrying amount of the related asset, including goodwill, if any, an asset impairment is considered to exist. The related impairment loss is measured by comparing estimated future cash flows on a discounted basis to the carrying amount of the asset. Management’s estimate of future cash flows is subject to risk and uncertainties. It is therefore reasonably possible that changes could occur which may affect the recoverability of the group’s mining assets. The Company records a reduction of a group of assets to fair value as a charge to earnings if expected future cash flows are less than the carrying amount. The Company estimates fair value by discounting the expected future cash flows using a discount factor that is commensurate with the risks involved, considering the term of the expected cash flows and any asset specific and country risks. In addition, an asset impairment is considered to exist where the fair value less costs to sell of an asset held for sale is below its carrying amount. | |||
4.14 | Borrowing costs | ||
Interest on borrowings relating to the financing of major capital projects under construction is capitalized during the construction phase as part of the cost of the project. Such borrowing costs are capitalized over the period during which the asset is being acquired or constructed and borrowings have been incurred. Capitalization ceases when construction is interrupted for an extended period or when the asset is substantially complete. Other borrowing costs are expensed as incurred. |
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4. | SIGNIFICANT ACCOUNTING POLICIES(continued) |
4.15 | Leased assets | ||
Assets subject to finance leases are capitalized at the lower of fair value or present value of minimum lease payments with the related lease obligation recognized at the same amount. Capitalized leased assets are depreciated over the shorter of their estimated useful lives and the lease term. Finance lease payments are allocated using the effective interest rate method, between the lease finance cost, which is included in finance costs, and the capital repayment, which reduces the liability to the lessor. | |||
Operating lease rentals are charged against operating profits in a systematic manner related to the period the assets concerned will be used. | |||
4.16 | Provisions | ||
Provisions are recognized when the Company has a present obligation, whether legal or constructive, as a result of a past event for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. | |||
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the balance sheet date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. | |||
4.17 | Taxation | ||
Current and deferred taxation is recognized as income or expense and included in the profit or loss for the period, except to the extent that the tax arises from a transaction or event which is recognized, in the same or a different period directly in equity; or a business combination that is an acquisition. See Note 4.22. | |||
Current taxation is measured on taxable income at the applicable enacted statutory rates. | |||
The Company’s operation involves dealing with uncertainties and judgments in the application of complex tax regulations in multiple jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities and resolution of disputes arising from federal, state, and international tax audits. A tax position is recognized in the financial statements when it is ‘more-likely-than-not’ that the tax position will be sustained upon examination by the relevant taxing authority based on the technical merits. The Company recognizes tax liabilities for anticipated tax audit issues in tax jurisdictions based on its estimate of whether, and the extent to which, additional taxes will be due. The Company recognizes interest and penalties, if any, in the income statement as part of income tax expense. | |||
4.18 | Asset retirement obligations and rehabilitation costs | ||
The Company accounts for asset retirement obligations (“AROs”) in accordance with the FASB ASC guidance on accounting for asset retirement obligations. | |||
AROs also referred to as decommissioning costs, arise from the acquisition, development, construction and operation of mining property, plant and equipment, due to government controls and regulations that protect the environment on the closure and reclamation of mining properties. The fair value of a liability for an asset retirement obligation is recorded in the period in which it is incurred. When the liability is initially recorded, the cost is capitalized by increasing the carrying amount of the related long-lived asset. Over time, the liability is increased to reflect an interest element (accretion) considered in its initial measurement at fair value, and the capitalized cost is amortized over the useful life of the related asset. Where the obligation arises from activities that are operational in nature and does not give rise to future economic benefit, the capitalized cost is amortized in the period incurred. Upon settlement of the liability, a gain or loss will be recorded if the actual cost incurred is different from the liability recorded. | |||
Rehabilitation costs and related liabilities are based on the Company’s interpretation of current environmental and regulatory requirements. | |||
Based on current environmental regulations and known rehabilitation requirements, management has included its best estimate of these obligations in its rehabilitation accrual. However, it is reasonably possible that the Company’s estimates of its ultimate rehabilitation liabilities could change as a result of changes in regulations or cost estimates. | |||
Environmental liabilities other than rehabilitation costs which relate to liabilities from specific events are accrued when they are known, probable and reasonably estimable. |
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4. | SIGNIFICANT ACCOUNTING POLICIES(continued) |
4.19 | Product sales | ||
Revenue from product sales is recognized when: |
• | persuasive evidence of an arrangement exists; | ||
• | delivery has occurred or services have been rendered; | ||
• | the seller’s price to the buyer is fixed or determinable; and | ||
• | collectability is reasonably assured. |
The sales price, net of any taxes, is fixed on either the terms of gold sales contracts or the gold spot price. | |||
4.20 | Financial instruments | ||
Financial instruments recognized on the balance sheet include investments, loans receivable, trade and other receivables, cash and cash equivalents, borrowings, derivatives, and trade and other payables. Financial instruments are initially measured at cost, including transaction costs, when the Company becomes a party to the contractual arrangements. Subsequent measurement of derivative instruments is dealt with below. | |||
Derivatives | |||
The Company accounts for derivative contracts in accordance with the FASB ASC guidance on accounting for derivative instruments and hedging activities, which requires all contracts that meet the definition of a derivative to be recognized on the balance sheet as either assets or liabilities and recorded at fair value. Gains or losses arising from remeasuring derivatives to fair value at each reporting period are accounted for either in the income statement or in accumulated other comprehensive income, depending on the use and designation of the derivative and whether it qualifies for hedge accounting. The key criterion which must be met in order to qualify for hedge accounting, is that the derivative must be highly effective in offsetting the change in the fair value or cash flows of the hedged item. | |||
Contracts that meet the criteria for hedge accounting are designated as the hedging instruments hedging the variability of forecasted cash flows from capitalized expenditure and the sale of production into the spot market, and are classified as cash flow hedges. Where a derivative qualifies as the hedging instrument in a cash flow hedge, changes in fair value of the hedging instruments, to the extent effective, are deferred in accumulated other comprehensive income and reclassified to earnings as product sales or as an adjustment to depreciation expense pertaining to capital expenditure, when the hedged transaction occurs. The ineffective portion of changes in fair value of the cash flow hedging instruments is reported in earnings as gains or losses on non-hedge derivatives in the period in which they occur. | |||
All other contracts not meeting the criteria for the normal purchases and sales exemption or hedge accounting are recorded at their fair market value, with changes in value at each reporting period recorded in earnings as gains or losses on non-hedge derivatives. | |||
Cash flows from derivative instruments accounted for as cash flow hedges and non-hedge derivatives are included in net cash provided by operating activities in the statements of consolidated cash flows. Contracts that contain ‘off-market’ terms that result in the inflow of cash at inception are analogous to borrowing activities and, as such, are treated as financing activities. All current and future cash flows associated with such instruments are classified as financing activities within the consolidated cash flow statement. Contracts that contain ‘off-market’ terms that result in the outflow of cash at inception are analogous to lending activities and, as such, are treated as investing activities. All current and future cash flows associated with such instruments are classified within the investing activities of the consolidated statement of cash flows. | |||
The estimated fair values of derivatives are determined at discrete points in time based on relevant market information. These estimates are calculated with reference to the market rates using industry standard valuation techniques. | |||
Certain derivative instruments are designated as hedges of foreign currency denominated borrowings and investments in foreign entities. This designation is reviewed at least quarterly, or as borrowing and investment levels change. The hedge amounts (to the extent effective) are recorded as an offset to the translation gains/losses being hedged. |
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4. | SIGNIFICANT ACCOUNTING POLICIES(continued) |
4.21 | Employee benefits | ||
Pension obligations | |||
Group companies operate various pension schemes. The schemes are funded through payments to insurance companies or trustee administered funds, determined by annual actuarial calculations. The Company has both defined benefit and defined contribution plans. | |||
The current service cost in respect of defined benefit plans is recognized as an expense in the current year. Past service costs, experience adjustments, the effect of changes in actuarial assumptions and the effects of plan amendments in respect of existing employees are recognized as an expense or income as and when they arise. This method is applied consistently in each period end to all gains and losses. | |||
The asset/liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. | |||
The contributions on defined contribution plans are recognized as employee benefit expense when due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available. | |||
Other post-employment benefit obligations | |||
Some group companies provide post-retirement healthcare benefits. The expected costs of these benefits are accrued over the period of employment using an accounting methodology on the same basis as that used for defined benefit pension plans. These obligations are valued annually by independent qualified actuaries. Actuarial gains and losses arising in the plan are recognized as income or expense as and when they arise. | |||
Termination benefits | |||
The Company recognizes termination benefits when it is demonstrably committed to either: terminating the employment of current employees according to a detailed formal plan; or providing termination benefits as a result of an offer made to encourage voluntary redundancy based on the number of employees expected to accept the offer. Benefits falling due more than twelve months after balance sheet date are discounted to present value. | |||
4.22 | Deferred taxation | ||
The Company follows the liability method of accounting for deferred taxation whereby the Company recognizes the tax consequences of temporary differences by applying enacted tax rates applicable to future years to differences between financial statement amounts and the tax bases of certain assets and liabilities. Changes in deferred taxation assets and liabilities include the impact of any tax rate changes enacted during the year. Principal temporary differences arise from depreciation on property, plant and equipment, derivatives, provisions and tax losses carried forward. A valuation allowance is recorded to reduce the carrying amounts of deferred taxation assets if it is more likely than not that such assets will not be realized. | |||
4.23 | Dividends paid | ||
Dividends are recognized when declared by the board of directors. Dividends may be payable in Australian dollars, South African rands, United Kingdom pounds or Ghanaian cedis. Dividends declared to foreign stockholders are not subject to approval by the South African Reserve Bank in terms of South African foreign exchange control regulations. Dividends are freely transferable to foreign stockholders from both trading and non-trading profits earned in South Africa by publicly listed companies. Under South African law, the Company may declare and pay dividends from any reserves included in total shareholders’ equity (including share capital and premium) calculated in accordance with International Financial Reporting Standards (IFRS), subject to its solvency and liquidity. |
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4. | SIGNIFICANT ACCOUNTING POLICIES(continued) |
4.24 | Earnings per share | ||
Earnings and diluted earnings per share have been calculated, for each class of common stock outstanding, in accordance with the FASB ASC guidance on earnings per share, using the two class method which requires that basic net income (loss) per share is computed using the weighted average number of shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted average number of Ordinary shares and, if dilutive, potential common shares outstanding during the period. The computation of the diluted income (loss) per share of Ordinary shares assumes the conversion of E Ordinary shares. | |||
The rights, including the liquidation, voting and dividend rights, of holders of Ordinary shares and E Ordinary shares are identical. As a result, the undistributed earnings for each year are allocated based on the contractual participation rights of the Ordinary and E Ordinary shares as if the earnings for the year had been distributed. As only 50 percent of dividends are paid to E ordinary share holders in cash (the remaining 50 percent reduces the exercise price of the E ordinary shares), the undistributed earnings are allocated between E ordinary shares and ordinary shares based on this proportionate basis. Further, as the Company assumes the conversion of E Ordinary shares in the computation of the diluted net income (loss) per share of Ordinary shares, the undistributed earnings are equal to net income (loss) for the computation. | |||
4.25 | Exploration and evaluation costs | ||
The Company expenses all exploration costs until the directors conclude that a future economic benefit is more likely than not of being realized. In evaluating if expenditures meet this criterion to be capitalized, the directors utilize several different sources of information depending on the level of exploration. While the criteria for concluding that expenditure should be capitalized is always probable, the information that the directors use to make that determination depends on the level of exploration. |
• | Costs on greenfields sites, being those where the Company does not have any mineral deposits which are already being mined or developed, are expensed as incurred until the directors are able to demonstrate that future economic benefits are probable, which generally will be the establishment of proven and probable reserves at this location. | ||
• | Costs on brownfields sites, being those adjacent to mineral deposits which are already being mined or developed, are expensed as incurred until the directors are able to demonstrate that future economic benefits are probable, which generally will be the establishment of increased proven and probable reserves after which the expenditure is capitalized as a mine development cost. | ||
• | Costs relating to extensions of mineral deposits, which are already being mined or developed, including expenditure on the definition of mineralization of such mineral deposits, are capitalized as mine development costs. |
Costs relating to property acquisitions are capitalized within development costs. | |||
Drilling and related costs incurred on sites without an existing mine and on areas outside the boundary of a known mineral deposit that contain proven and probable reserves are recorded as exploration expenditures and are expensed as incurred. | |||
Drilling and related costs incurred to define and delineate a residual mineral deposit that has not been classified as proven and probable reserves at a development stage or production stage mine are capitalized when management determines that there is sufficient evidence that the expenditure will result in a future economic benefit to the Company in the accounting period when the expenditure is made. Management evaluates whether or not there is sufficient geologic and economic certainty of being able to convert a residual mineral deposit into a proven and probable reserve at a development stage or production stage mine, based on the known geologic and metallurgy, existing mining and processing facilities, operating permits and environmental programs. Therefore prior to capitalizing such costs, management determines that the following conditions have been met: |
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4. | SIGNIFICANT ACCOUNTING POLICIES(continued) |
4.25 | Exploration and evaluation costs(continued) |
a. | There is a probable future benefit; | ||
b. | AngloGold Ashanti can obtain the benefit and control access to it; and | ||
c. | The transaction or event giving rise to it has already occurred. |
The Company understands that there is diversity in practice within the mining industry, in that some companies expense the drilling and related costs incurred to define and delineate residual mineral deposits that have not been classified as proven and probable reserves at a development stage or production stage mine. Had AngloGold Ashanti expensed such costs as incurred, net income, earnings per share and retained earnings would have been lower by approximately the following amounts: |
2010 | 2009 | 2008 | ||||||||||
Net income ($ millions) | 27 | 16 | 10 | |||||||||
Earnings per share(1)(cents) | 7 | 4 | 3 | |||||||||
Retained income — January 1 ($ millions) | 86 | 70 | 60 | |||||||||
Retained income — December 31 ($ millions) | 113 | 86 | 70 |
(1) | Impact per basic and diluted earnings per common share. |
4.26 | Stock-based compensation plans | ||
The Company’s management awards certain employees stock options on a discretionary basis. | |||
The fair value of the stock-based payments is calculated at grant date using an appropriate model. For equity settled stock-based payments, the fair value is determined using a Black-Scholes method and expensed on a straight-line basis over the vesting period based on the group’s estimate of shares that will eventually vest. | |||
Option schemes which include non-market vesting conditions have been calculated using the Black-Scholes model. For all other stock-based payments to employees the fair value is determined by reference to the market value of the underlying stock at grant date adjusted for the effects of the relevant terms and conditions. | |||
For schemes with non-market related vesting conditions, the likelihood of vesting has been taken into account when determining the income statement charge. Vesting assumptions are reviewed during each reporting period. | |||
Stock options are subject to a three year vesting condition and their fair value is recognized as an employee benefit expense with a corresponding increase in Additional paid in capital over the vesting period. The proceeds received, net of any directly attributable transaction costs are credited to Common stock and Additional paid in capital when the options are exercised. |
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4. | SIGNIFICANT ACCOUNTING POLICIES(continued) |
4.27 | Recent pronouncements | ||
Business Combinations | |||
In December 2010, the FASB issued guidance for business combinations regarding how public entities disclose supplemental pro forma information for business combinations that occur during the current year. Under the amended guidance, a public entity that presents comparative financial statements must disclose the revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the prior annual reporting period. The guidance also requires public entities to provide a description of the nature and amount of any material, nonrecurring pro forma adjustments directly attributable to business combination(s) that are included in the reported pro forma revenue and earnings. The amended guidance is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted. The Company is currently assessing the impact of the guidance on the Company’s financial statements. | |||
Disclosures about the credit quality of financing receivables and the allowance for credit losses | |||
In July 2010, the FASB issued guidance for the disclosure of the allowance for credit losses and financing receivable modifications. The expanded disclosures include roll-forward schedules of the allowance for credit losses and enhanced disclosure of financing receivables that were modified during a reporting period and those that were previously modified and have re-defaulted. The new disclosure requirements are required for interim and annual periods beginning on or after December 15, 2010. The Company is currently assessing the impact of the guidance on the Company’s financial statements. | |||
Compensation — stock compensation | |||
In April 2010, the FASB issued guidance for stock compensation. The amendments clarify that a share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, such an award should not be classified as a liability if it otherwise qualifies as equity. The guidance also clarifies that disclosures currently required are applicable to a share-based payment award, including the nature and terms of share-based payment arrangements. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The amendments will be applied prospectively. A cumulative-effect adjustment will be calculated for all awards outstanding as of the beginning of the fiscal year in which the amendments are initially applied, as if the amendments had been applied consistently since the inception of the award. The cumulative-effect adjustment should be presented separately. The Company does not expect the adoption of this guidance to have a material impact on the Company’s financial statements. | |||
Fair value measurements | |||
In January 2010, the FASB ASC guidance for disclosures about fair value measurements was updated requiring level 3 disclosure details regarding separate information about purchases, sales, issuances, and settlements in the reconciliation of fair value measurements using significant unobservable inputs. The disclosures related to Level 3 fair value measurements are effective for interim and annual reporting periods beginning after December 15, 2010. The Company does not expect the adoption of this guidance to have a material impact on the Company’s financial statements. |
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5. | COSTS AND EXPENSES | |
Employment severance costs |
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
South Africa | 19 | 10 | 9 | |||||||||
Continental Africa | 1 | 3 | — | |||||||||
Americas | 3 | 1 | — | |||||||||
23 | 14 | 9 | ||||||||||
Employee severance costs were due to retrenchments reflecting downsizing and rationalization of operations resulting in a planned reduction in workforce. | ||
Interest expenses |
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Finance costs on rated bonds | 38 | — | — | |||||||||
Finance costs on convertible bonds(1) | 22 | 18 | 7 | |||||||||
Finance costs on mandatory convertible bonds | 13 | — | — | |||||||||
Finance costs on bank loans and overdrafts | 19 | 55 | 47 | |||||||||
Finance costs on corporate bond | — | — | 18 | |||||||||
Unwinding of discount on convertible bonds | 27 | 18 | 20 | |||||||||
Amortization of deferred loan fees | 20 | 31 | 2 | |||||||||
Capital lease charges | 5 | 3 | 3 | |||||||||
Discounting of non-current trade and other debtors | 6 | 6 | 1 | |||||||||
Other | 1 | 5 | 4 | |||||||||
151 | 136 | 102 | ||||||||||
Less : Amounts capitalized(2) | — | (13 | ) | (30 | ) | |||||||
151 | 123 | 72 | ||||||||||
(1) | The $1.0 billion 2.375 percent convertible bond (issued February 27, 2004) was repaid on February 27, 2009. On May 22, 2009, AngloGold Ashanti Holdings Finance plc,awholly-owned subsidiary of the Company, issued $732.5 million 3.5 percent guaranteed convertible bonds due May 2014, convertible into ADSs and guaranteed byAngloGold Ashanti Limited. Refer to Note 19. | |
(2) | Interest capitalized on qualifying assets. Refer to Note 13. |
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5. | COSTS AND EXPENSES(continued) | |
Impairment of assets Impairments are made up as follows: |
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
South Africa | ||||||||||||
Below 120 level at TauTona(1) | 47 | — | 16 | |||||||||
Impairment and write-off of Savuka(2) | 16 | — | — | |||||||||
Impairment of Tau Lekoa(3) | 8 | 4 | — | |||||||||
Continental Africa | ||||||||||||
Impairment of Iduapriem obsolete tailings storage facility(4) | 8 | — | — | |||||||||
Impairment of Geita mining assets(5) | 5 | — | 299 | |||||||||
Impairment of goodwill held in Geita mine(5) | — | — | 181 | |||||||||
Impairment and write-off of tailings treatment plant at Obuasi mine(6) | 3 | — | — | |||||||||
Impairment and write-off of oxide treatment plant at Obuasi mine(7) | — | 4 | — | |||||||||
Impairment of goodwill held in Obuasi mine(8) | — | — | 104 | |||||||||
Impairment of abandoned shaft infrastructure and reserve power plant at Obuasi mine(9) | — | — | 15 | |||||||||
Impairment of reserve power plant at Iduapriem mine(9) | — | — | 3 | |||||||||
Impairment of goodwill held in Iduapriem mine(10) | — | — | 14 | |||||||||
Impairment of exploration assets in the DRC(11) | — | — | 29 | |||||||||
Impairment of obsolete heap leach plant infrastructure at Siguiri mine | — | — | 7 | |||||||||
Americas | ||||||||||||
Write-off of mining assets at Serra Grande | 3 | — | — | |||||||||
Other | ||||||||||||
Impairment and write-off of various minor tangible assets and equipment | 1 | — | 2 | |||||||||
91 | 8 | 670 | ||||||||||
(1) | Due to a change in the mine plan resulting from safety related concerns following seismic activity, a portion of the below 120 level development has been abandoned and will not generate future cash flows. | |
(2) | Due to a change in the mine plan, the Savuka assets have been abandoned and will not generate future cash flows. | |
(3) | Following the classification of Tau Lekoa as held for sale in 2009, impairment testing was performed on the held for sale asset. As the estimated fair value less costs to sell did not support the carrying value, an impairment was recorded for held for sale assets. The sale of Tau Lekoa was concluded effective August 1, 2010. Refer to Note 17. | |
(4) | The use of the tailings storage facility was discontinued. | |
(5) | Impairment of mining assets in 2010 represents the write-off of vehicles and heavy mining equipment at Geita. In 2008, the annual impairment testing for goodwill was performed for Geita mine and it was determined that its goodwill was fully impaired. The impairment testing for mining assets was performed and the estimated fair value of the mining assets did not support the carrying values and as a result, an impairment of mining assets was recorded. The impairment at Geita mine was due to a combination of factors such as the lower forward gold curve price, higher discount rates and a change in the mine plan revised mainly due to a reduction in reserves resulting from resource model changes, grade factors and an increase in the cost of extraction. | |
(6) | Due to safety related concerns the use of the tailings treatment plant was discontinued. | |
(7) | Due to damage suffered by the leach tanks of the treatment plant its use was discontinued in 2009. | |
(8) | In 2008, the annual impairment testing for goodwill was performed for Obuasi mine and it was determined that its goodwill was fully impaired. The goodwill impairment was the result of factors such as the lower forward gold curve price, higher discount rates and a revised mine plan which incorporated changes in the cost of extraction due to the higher power costs experienced in Ghana. | |
(9) | The reserve power plant had been placed on care and maintenance during 2008 and was handed over to the Volta Regional Authority in 2009. Both Obuasi mine and Iduapriem mine contributions to the capital cost of the reserve power plant were impaired as the mines would not derive further economic benefit. | |
(10) | In 2008, the annual impairment testing for goodwill was performed for Iduapriem mine and it was determined that its goodwill was fully impaired. The goodwill impairment was the result of factors such as the lower forward gold curve price, higher discount rates and a revised mine plan which incorporated changes in the cost of extraction due to the higher power costs experienced in Ghana. | |
(11) | In terms of the volatile political situation in the DRC in 2008, commercial exploitation appeared unlikely and the mineral right value was impaired. |
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5. | COSTS AND EXPENSES(continued) | |
The following estimates and assumptions were used by management when reviewing goodwill and long-lived assets for impairment: |
• | the gold price assumption represented management’s best estimate of the future price of gold. In arriving at the estimated long-term gold price, management considered all available market information including current prices, historical averages, and forward pricing curves. The long-term gold price is based on a range of economic and market conditions that will exist over the remaining useful life of the assets; (1) | ||
• | proven and probable ore reserves as well as value beyond proven and probable reserves estimates. For these purposes proven and probable ore reserves of approximately 71.2 million ounces (including joint ventures) as at December 31, 2010 were determined; | ||
• | the real pre-tax discount rate is commensurate with the risks involved which is consistent with the basis used in 2009. The risk factors considered were country risk as well as asset risk for cash flows relating to mines that are not yet in production and deep level mining projects. The country risk factor was based on the Company’s internal assessment of country risk relative to the issues experienced in the countries in which it operates and explores; | ||
• | foreign currency cash flows were translated at estimated forward exchange rates and then discounted using appropriate discount rates for that currency; and | ||
• | cash flows used in impairment calculations were based on life of mine plans. | ||
Estimates and assumptions used by management included the following: |
2010 | 2009 | 2008 | ||||||||||
$ per ounce | $ per ounce | $ per ounce | ||||||||||
(1) Long-term real gold price | 1,113 | 906 | 817 |
The real pre-tax discount rates applied in the 2010 impairment calculations on reporting units with significant assigned goodwill were as follows: |
Percentage | ||||
Australasia | ||||
Sunrise Dam | 11.1 | % | ||
Americas | ||||
Cripple Creek | 6.5 | % |
In addition to the gold price and discount rate assumptions described above, the factors affecting the estimates include: |
• | changes in proven and probable ore reserves as well as value beyond proven and probable reserves; | ||
• | the grade of ore reserves as well as value beyond proven and probable reserves may vary significantly from time to time; | ||
• | differences between actual commodity prices and commodity price assumptions; | ||
• | unforeseen operational issues; and | ||
• | changes in capital, operating mining, processing and reclamation costs and foreign exchange rates. |
The real pre-tax discount rates applied in the 2008 impairment calculations to determine reporting unit’s fair value were as follows: |
Discount rate | ||||
Continental Africa | ||||
Geita | 11.5 | % | ||
Obuasi | 9.0 | % | ||
Iduapriem | 8.8 | % |
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5. | COSTS AND EXPENSES(continued) | |
Environmental rehabilitation obligations | ||
Long-term environmental obligations comprising decommissioning and restoration are based on the Company’s environmental management plans, in compliance with the current environmental and regulatory requirements. |
$ | ||||
The following is a reconciliation of the total liabilities for asset retirement obligations: | ||||
Balance as at December 31, 2009 | 385 | |||
Additions to liabilities | 26 | |||
Liabilities settled | (6 | ) | ||
Accretion expense | 22 | |||
Change in assumptions | 76 | (1) | ||
Other movements | 2 | |||
Translation | 25 | |||
Balance as at December 31, 2010 | 530 | |||
(1) | Revisions relate to changes in laws and regulations governing the protection of the environment and factors relating to rehabilitation estimates, cost escalations and a change in the quantities of material in reserves and a corresponding change in the life of mine plan. These liabilities are anticipated to unwind beyond the end of the life of mine. | |
These liabilities mainly relate to obligations at the Company’s active and inactive mines to perform reclamation and remediation activities in order to meet applicable existing environmental laws and regulations. | ||
Certain amounts have been contributed to a rehabilitation trust and environmental protection bond under the Company’s control. The monies in the trust and bond are invested primarily in interest bearing debt securities and cash and are included in Other long-term assets in the Company’s consolidated balance sheet. Cash balances held in the trust and bond are classified as restricted cash in the Company’s consolidated balance sheets. As at December 31, the carrying amounts and estimated fair values of balances held in the trust and bond were as follows: |
December 31, 2010 | December 31, 2009 | |||||||||||||||
Carrying | Carrying | |||||||||||||||
amount | Fair value | amount | Fair value | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Securities | 117 | 118 | 69 | 69 | ||||||||||||
Cash | 32 | 32 | 53 | 53 | ||||||||||||
149 | 150 | 122 | 122 | |||||||||||||
Operating lease charges | ||
Operating lease rentals are charged against income in a systematic manner related to the period the leased property will be used. Lease charges relate mainly to the hire of plant and machinery and other land and buildings. | ||
Operating leases for plant and machinery are for contracts entered into with mining contractors. The contracts are for specified periods and include escalation clauses. Renewals are at the discretion of the respective operating mine. Certain contracts include the provision of penalties payable on early exiting or cancellation. | ||
Rental expense(1) |
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Comprising of: | ||||||||||||
Minimum rentals | 23 | 33 | 30 | |||||||||
(1) | Included in production costs for each period presented. |
Future minimum rental payments are: | ||||
2011 | 18 | |||
2012 | 7 | |||
2013 | 1 | |||
2014 | 1 | |||
Thereafter | — | |||
27 | ||||
F-25
Table of Contents
5. | COSTS AND EXPENSES(continued) | |
(Profit)/loss on sale of assets, realization of loans, indirect taxes and other |
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Mandatory convertible bonds underwriting and professional fees | 26 | — | — | |||||||||
Loss on disposal of land, equipment and assets, mineral rights and exploration properties(1) | 19 | 13 | 2 | |||||||||
Indirect tax expenses and legal claims(2) | 17 | 29 | (18 | ) | ||||||||
Impairment of other receivables | 9 | 7 | — | |||||||||
Loss on sale of Tau Lekoa Gold mine(3) | 7 | — | — | |||||||||
Impairment of investments(4) | 2 | 12 | 6 | |||||||||
Mining contractor termination costs | 1 | — | 1 | |||||||||
Profit on disposal of investments(5) | (52 | ) | — | — | ||||||||
Net insurance claim recovery(6) | (19 | ) | (7 | ) | — | |||||||
Royalties received(7) | (8 | ) | — | — | ||||||||
(Recovery)/loss on consignment inventory | (5 | ) | 12 | — | ||||||||
Profit on disposal of joint venture interest in Boddington Gold mine in Australia(8) | — | (56 | ) | — | ||||||||
Profit on disposal of certain exploration interests in Colombia to B2Gold Corporation | — | — | (33 | ) | ||||||||
Certain royalty and production related payment interests in the United States of America sold to Royal Gold Inc. | — | — | (14) | |||||||||
Deferred income on sale of La Rescatada exploration interest recognized in Peru | — | — | (8 | ) | ||||||||
Recovery of exploration costs previously expensed in South Africa and Peru | — | — | (4 | ) | ||||||||
Contributions by other members to Nufcor Uranium Trust situated in South Africa | — | — | (3 | ) | ||||||||
Profit on disposal of the Company’s equity interest held in Nufcor International Limited | — | — | (2 | ) | ||||||||
Costs relating to the issue of rights granted to E ordinary shareholders | — | — | 9 | |||||||||
(3 | ) | 10 | (64 | ) | ||||||||
(1) | Refers to the disposal and derecognition of land, equipment and assets, mineral rights and exploration properties in South Africa, Continental Africa and the Americas. | |
(2) | Indirect taxes and legal claims are in respect of: |
South Africa | 1 | |||||||||||
Tanzania | 6 | 25 | (15 | ) | ||||||||
Guinea | 10 | 7 | (3 | ) | ||||||||
Brazil | (3 | ) |
(3) | The sale of Tau Lekoa Gold mine was concluded effective August 1, 2010. Refer to Note 17. | |
(4) | Impairment of investments include the following (refer to Note 16): |
Corvus Gold Incorporated (United States of America) | 2 | |||||||||||
B2Gold Corporation shares (Colombia) | 12 | |||||||||||
Red 5 Limited shares (Australia) | 4 | |||||||||||
Dynasty Gold Corporation shares (China) | 2 |
(5) | Profit on disposal of investments include: |
B2Gold Corporation (Colombia) | (45 | ) | ||||||
Red 5 Limited (Australia) | (7 | ) |
(6) | Includes business interruption insurance following a seismic event which resulted in the suspension of operations at Savuka Gold mine (in South Africa) during 2009. The Company has recovered $46 million to date from its insurers. Amounts received included: |
Business interruption recoveries | (19 | ) | (11 | ) | ||||
Reimbursement of costs (included in Production costs) | (16 | ) |
(7) | Royalties received are mainly from Newmont Mining Corporation in connection with the 2009 sale of the joint venture interest in Boddington Gold mine and Simmers & Jack Mines Limited in connection with the 2010 sale of Tau Lekoa Gold mine. | |
(8) | Included $31 million foreign exchange transaction loss. |
F-26
Table of Contents
5. | COSTS AND EXPENSES(continued) | |
Non-hedge derivative loss and movement on bonds | ||
Non-hedge derivative loss |
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Loss on non-hedge derivatives | 703 | 1,452 | 258 |
The net loss recorded for the year ended December 31, 2010 relates to the accelerated hedge book settlement, normal realized losses on non-hedge derivatives, the fair value movements of the conversion features of convertible bonds amounting to $1 million (2009: $33 million) (as described in note 19), the revaluation of non-hedge derivatives resulting from changes in the prevailing spot gold price, exchange rates, interest rates and volatilities during the year. | ||
During 2010, the Company eliminated its gold hedge book. The loss of scheduled hedge book maturities during 2010 was $277 million. Loss on non-hedge derivatives includes a realized loss of $2,698 million relating to the final tranche of the accelerated hedge buy-back that commenced in September 2010 and was concluded on October 7, 2010. The final phase of the hedge restructuring was funded with proceeds from the equity offering (refer to Note 22) and the three-year mandatory convertible bonds (refer to Note 19) issued in September, as well as cash from internal sources and debt facilities. | ||
During July 2009, the Company embarked on a hedge buy back that resulted in the accelerated settlement of both non-hedge and forward gold contracts qualifying for the normal purchases and sales exemption (which permits the Company to not record such amounts in its financial statements until the maturity date of the contract) under which the Company had committed to deliver a specified quantity of gold at a future date in exchange for an agreed price. These effects are reflected in the table below. | ||
Effects of the accelerated hedge settlements |
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Accelerated hedge settlement of non-hedge derivatives | 2,698 | 797 | 1,088 | |||||||||
Previously designated NPSE contracts | 405 | 580 | — | |||||||||
Other non-hedge derivative contracts | 2,293 | 217 | 1,088 |
In addition to the accelerated hedge settlement during 2008, the Company recognized a loss of $150 million on forward gold contracts previously qualifying for the normal sale exemption, due to the inability of a single counterpart to accept physical delivery of gold for the forward contracts that had matured. Accordingly, the remaining contracts with this counterpart for future periods were accounted for at fair value on balance sheet, with changes in fair value reflected in the income statement. | ||
The hedge buy-back and re-designation of contracts effected in 2009 resulted in an increase in current non-hedge derivative liabilities and a consequential loss on non-hedge derivatives. During 2010, all the contracts that were previously designated as normal purchase and sale exempted (“NPSE”) were closed out and recorded as a non-hedge derivative loss. | ||
As a result of the accelerated cash settlement of the NPSE contracts during July 2009, the FASB ASC guidance on derivatives and hedging necessitated a review of the continuing designation of, and accounting treatment for, the remaining NPSE contracts that were not part of the accelerated settlement. Management concluded, in accordance with the provisions of the FASB ASC guidance, to re-designate all remaining NPSE contracts as non-hedge derivatives and to account for such contracts at fair value on the balance sheet with changes in fair value accounted for in the income statement. | ||
The effect of the NPSE re-designation in July 2009 and subsequent accounting for these contracts is stated below. |
2010 | 2009 | |||||||
$ | $ | |||||||
Liability at beginning of period | 556 | — | ||||||
Non-hedge derivative losses recognized in respect of NPSE re-designation | — | 543 | ||||||
Fair value movements (recorded in non-hedge derivative loss) | 131 | 143 | ||||||
Realized settlements | (687 | ) | (130 | ) | ||||
Liability as at December 31 | — | 556 | ||||||
F-27
Table of Contents
5. | COSTS AND EXPENSES(continued) | |
Movement on bonds |
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Fair value loss on mandatory convertible bonds | 83 | — | — |
Fair value movements on the mandatory convertible bonds relate to the ex interest NYSE closing price as further discussed in Note 19. | ||
Other operating items |
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Comprising of: | ||||||||||||
Realized loss on other commodity contracts | — | — | 32 | |||||||||
Provision reversed on loss on future deliveries of other commodities | — | — | (5 | ) | ||||||||
Unrealized gain on other commodity physical borrowings | — | — | (8 | ) | ||||||||
— | — | 19 | ||||||||||
F-28
Table of Contents
December 31, 2010 | December 31, 2009 | December 31, 2008 | ||||||||||||||||||
Amounts | Amounts owed | Purchases | ||||||||||||||||||
Purchases (by)/from | owed to/(by) | Purchases (by)/from | to/(by) related | (by)/from | ||||||||||||||||
related party | related party | related party | party | related party | ||||||||||||||||
(in millions) | $ | $ | $ | $ | $ | |||||||||||||||
Purchases of goods and services (by)/from equity accounted joint ventures and associates | ||||||||||||||||||||
Margaret Water Company | 3 | — | 1 | — | 1 | |||||||||||||||
Societe d’Exploitation des Mines d’Or de Sadiola S.A. | (8 | ) | (2 | ) | (10 | ) | (3 | ) | (5 | ) | ||||||||||
Societe d’Exploitation des Mines d’Or de Yatela S.A. | (3 | ) | — | (3 | ) | — | (1 | ) | ||||||||||||
Societe des Mines de Morila S.A. | (8 | ) | (1 | ) | (6 | ) | (1 | ) | (5 | ) | ||||||||||
Trans-Siberian Gold plc | 1 | — | — | (1 | ) | — | ||||||||||||||
(15 | ) | (3 | ) | (18 | ) | (5 | ) | (10 | ) | |||||||||||
2010 | 2009 | |||||||
$ | $ | |||||||
| | | ||||||||
AGA-Polymetal Strategic Alliance (joint venture) (1) | — | 3 | ||||||
Oro Group (Proprietary) Limited (2) | 2 | 2 | ||||||
AuruMar (Proprietary) Limited (joint venture) (3) | 5 | 2 | ||||||
Orpheo (Proprietary) Limited (3) | 1 | 1 |
(1) | The loan was written off during 2010. The write-off is included in equity income in associates. | |
(2) | The loan bears interest at a rate determined by the Oro Group (Proprietary) Limited’s board of directors and is repayable at their discretion. | |
(3) | Loans are unsecured, interest free and there are no fixed terms of repayment. | |
There are no allowances for credit losses relating to the loans described above. Credit quality of loans is monitored on an ongoing basis. | ||
As at December 31, 2010 and 2009, there are no outstanding balances arising from loans owed to related parties. |
F-29
Table of Contents
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Income/(loss) from continuing operations before income tax and equity income in associates was derived from the following jurisdictions: | ||||||||||||
South Africa | 203 | (340 | ) | 251 | ||||||||
Continental Africa | 391 | (249 | ) | (714 | ) | |||||||
Australasia | (149 | ) | (147 | ) | (69 | ) | ||||||
Americas | 282 | (19 | ) | 200 | ||||||||
Other, including Corporate and Non-gold producing subsidiaries(1) | (346 | ) | (143 | ) | (41 | ) | ||||||
381 | (898 | ) | (373 | ) | ||||||||
(1) | The increase in the loss is due to fair value movements on the mandatory convertible bonds and finance charges on the mandatory convertible and rated bonds as well as exploration expenses. |
Benefit/(charge) for income taxes attributable to continuing operations is as follows: | ||||||||||||
Current: | ||||||||||||
South Africa(1) | 106 | (36 | ) | (20 | ) | |||||||
Continental Africa(2) | (81 | ) | (38 | ) | (32 | ) | ||||||
Australasia(3) | (36 | ) | (34 | ) | 3 | |||||||
Americas(4) | (106 | ) | (54 | ) | (34 | ) | ||||||
Other | — | (4 | ) | (11 | ) | |||||||
Total current | (117 | ) | (166 | ) | (94 | ) | ||||||
(1) | The tax benefit in 2010 is mainly related to tax benefits on losses relating to the early hedge settlement and tax benefits relating to prior years. The increase in the tax charge in 2009 is mainly due to higher income as a result of the higher gold price. The lower tax charge in 2008 is mainly related to the tax benefit on losses relating to the settlement of non-hedge derivative contracts. | |
(2) | The increase in the tax charge in 2010 is mainly related to higher earnings at Siguiri and Iduapriem from an improved gold price as well as lower capital expenditure. | |
(3) | The increase in the tax charge in 2010 is due to higher taxable earnings from an improved gold price. The increase in the tax charge in 2009 is mainly due to capital gains tax on the sale of the Boddington Gold Mine. In 2008, Sunrise Dam’s taxable income reduced considerably following the completion of the mining in the megapit during the year. | |
(4) | The increase in the tax charge mainly relates to higher earnings in line with the improved gold price and higher production. |
Deferred: | ||||||||||||
South Africa(1) | (119 | ) | 141 | (40 | ) | |||||||
Continental Africa(2) | (19 | ) | 27 | 122 | ||||||||
Australasia(3) | (1 | ) | 49 | (4 | ) | |||||||
Americas | (1 | ) | (18 | ) | (16 | ) | ||||||
Other | 2 | — | 10 | |||||||||
Total deferred | (138 | ) | 199 | 72 | ||||||||
Total income and mining tax (expense)/benefit | (255 | ) | 33 | (22 | ) | |||||||
(1) | The increase in the tax charge in 2010 related mainly to the reversal of deferred tax on unrealized non-hedge derivative losses. The increase in deferred tax credits in 2009 is mainly due to unrealized non-hedge derivative losses arising from an improved gold price and the remaining NPSE contracts being re-designated as non-hedge derivatives and recorded on the balance sheet, following the hedge buy-back in July 2009. | |
(2) | The increase in the tax charge is mainly due to the tax benefits at Geita in 2009 not recurring in 2010. The 2008 deferred tax benefit was due to the continuing net increase in the capital allowances at Obuasi as a result of the high capital expenditure and the benefit relating to the impairment of mining assets at Geita. | |
(3) | The deferred tax benefit in 2009 relates to the reversal of timing differences on the sale of Boddington. |
F-30
Table of Contents
2010 | 2009 | 2008 | ||||||||||
Maximum anticipated deferred taxation rate | 38 | % | 39 | % | 38 | % | ||||||
Minimum anticipated deferred taxation rate | 35 | % | 36 | % | 36 | % |
Year ended December 31 | ||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||
Per basic and | ||||||||||||||||||||||||
diluted common | Per basic and diluted | Per basic and diluted | ||||||||||||||||||||||
Impact | share(a)(b) | Impact | common share(a)(b) | Impact | common share(a)(b) | |||||||||||||||||||
$ | cents | $ | cents | $ | cents | |||||||||||||||||||
Net (benefit)/expense | (8 | ) | (2 | ) | (21 | ) | (6 | ) | 4 | 1 | ||||||||||||||
(a) | Per basic and diluted ordinary and E ordinary shares. | |
(b) | The calculation of diluted earnings per common share did not assume the effect of the following number of shares as their effects are anti-dilutive. |
2010 | 2009 | 2008 | ||||||||||
Issuable upon the exercise of convertible bonds | 33,524,615 | 15,384,615 | 15,384,615 | |||||||||
Issuable upon the exercise of stock incentive options | 1,234,858 | 872,373 |
2010 $ | 2009 $ | 2008 $ | ||||||||||
Unutilized tax losses (1) | 1,200 | 1,032 | 841 |
(1) | Increase in unutilized operating loss carryforwards over 2009 are mainly due to losses from the early hedge settlement in 2010, offset partially by a reduction at Cripple Creek & Victor gold mine. |
Within one year | 716 | |||
Within one and two years | 125 | |||
Within two and five years | 120 | |||
In excess of five years | 239 | |||
1,200 | ||||
F-31
Table of Contents
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Corporate income tax at statutory rates | 133 | (314 | ) | (131 | ) | |||||||
Formula variation in mining taxation rate | — | (21 | ) | (1 | ) | |||||||
Disallowable expenditure(1) | 83 | 292 | 47 | |||||||||
Effect of income tax rates of other countries | 46 | 38 | 118 | |||||||||
Impact of change in estimated deferred taxation rate | (8 | ) | (21 | ) | 4 | |||||||
Other | 1 | (7 | ) | (15 | ) | |||||||
Total income and mining tax expense/(benefit) | 255 | (33 | ) | 22 | ||||||||
(1) | Disallowable expenditure includes the impact of hedge losses in non-taxable jurisdictions and share expense costs. In 2009, the losses on the hedge settlements were mainly in non-tax effective entities. |
2010 | 2009 | |||||||
$ | $ | |||||||
Deferred tax liabilities: | ||||||||
Depreciation, depletion and amortization | 1,555 | 1,471 | ||||||
Product inventory not taxed | 15 | 15 | ||||||
Unrealized non-hedge derivatives | 1 | 8 | ||||||
Other | 34 | 4 | ||||||
Total | 1,605 | 1,498 | ||||||
Deferred tax assets: | ||||||||
Provisions, including rehabilitation accruals | (363 | ) | (175 | ) | ||||
Derivatives | (1 | ) | (14 | ) | ||||
Unrealized non-hedge derivatives | — | (415 | ) | |||||
Other | (5 | ) | (6 | ) | ||||
Tax loss carry forwards | (364 | ) | (298 | ) | ||||
Total | (733 | ) | (908 | ) | ||||
Less: Valuation allowances | 125 | 194 | ||||||
Total | (608 | ) | (714 | ) | ||||
Disclosed as follows: | ||||||||
Long-term portion deferred taxation assets | 1 | 62 | ||||||
Short-term portion deferred taxation assets | 214 | 333 | ||||||
Long-term portion deferred taxation liabilities | 1,200 | 1,171 | ||||||
Short-term portion classified as other current liabilities. Refer to Note 18. | 12 | 8 |
2010 | 2009 | |||||||
South Africa | ||||||||
Losses ($ millions) | 508 | 4 | ||||||
Deferred tax at the anticipated tax rate to be utilized (percent) | 33 | 37 |
F-32
Table of Contents
2010 | 2009 | |||||||
$ | $ | |||||||
Unremitted earnings as at December 31 | 1,519 | 624 |
Balance at beginning | Balance at end of | |||||||||||
of period | Movement | period | ||||||||||
$ | $ | $ | ||||||||||
Year ended December 31, 2010 | ||||||||||||
- Valuation allowance | 194 | (69 | ) | 125 | ||||||||
Year ended December 31, 2009 | ||||||||||||
- Valuation allowance | 226 | (32 | ) | 194 | ||||||||
Year ended December 31, 2008 | ||||||||||||
- Valuation allowance | 98 | 128 | 226 |
F-33
Table of Contents
2010 | 2009 | |||||||
$ | $ | |||||||
Balance at January 1, | 149 | 106 | ||||||
Additions for tax positions of prior years | 8 | 14 | ||||||
Reductions for tax position of prior years | (113 | ) | — | |||||
Translation | 8 | 29 | ||||||
Balance at December 31, (1) | 52 | 149 | ||||||
(1) | Unrecognized tax benefits which, if recognized, would affect the Company’s effective tax rate. |
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Interest recognized | 2 | 9 | 6 | |||||||||
Interest accrued as at December 31 | 8 | 53 | 34 |
F-34
Table of Contents
2008 | ||||||||||||
$ | (cents)(1)(3) | (cents)(2)(3) | ||||||||||
Revenue | — | — | — | |||||||||
Costs, expenses and recoveries | 1 | — | — | |||||||||
Gain on disposal | 27 | 8 | 5 | |||||||||
Pre-tax profit | 28 | 8 | 5 | |||||||||
Taxation expense | (5 | ) | (1 | ) | (1 | ) | ||||||
Net profit attributable to discontinued operations | 23 | 7 | 4 | |||||||||
(1) | Per basic and diluted ordinary shares. | |
(2) | Per basic and diluted E ordinary shares. | |
(3) | Basic and diluted earnings per common share. |
2008 | ||||
Issuable upon the exercise of convertible bonds | 15,384,615 | |||
Issuable upon the exercise of stock incentive options | 872,373 |
F-35
Table of Contents
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
The following table sets forth the computation of basic and diluted income/(loss) per share (in millions, except per share data): | ||||||||||||
Numerator | ||||||||||||
Net income/(loss) — attributable to AngloGold Ashanti | ||||||||||||
Income/(loss) from continuing operations | 112 | (825 | ) | (586 | ) | |||||||
Discontinued operations | — | — | 23 | |||||||||
Net income/(loss) | 112 | (825 | ) | (563 | ) | |||||||
Less Dividends: | ||||||||||||
Ordinary shares | 67 | 45 | 41 | |||||||||
E Ordinary shares | — | — | — | |||||||||
Undistributed income/(losses) | 45 | (870 | ) | (604 | ) | |||||||
Ordinary shares undistributed income/(losses) | 45 | (865 | ) | (600 | ) | |||||||
E Ordinary shares undistributed losses | — | (5 | ) | (4 | ) | |||||||
Total undistributed income/(losses) | 45 | (870 | ) | (604 | ) | |||||||
Denominator for basic income/(loss) per ordinary share | ||||||||||||
Ordinary shares | 367,664,700 | 356,563,773 | 312,610,124 | |||||||||
Fully vested options(1) | 1,023,459 | 791,353 | 547,460 | |||||||||
Weighted average number of ordinary shares | 368,688,159 | 357,355,126 | 313,157,584 | |||||||||
Effect of dilutive potential ordinary shares | ||||||||||||
Dilutive potential of stock incentive options(2) | 1,569,606 | — | — | |||||||||
Dilutive potential of convertible bonds(3) | — | — | — | |||||||||
Dilutive potential of E Ordinary shares(4) | — | — | — | |||||||||
Denominator for diluted income/(loss) per share — adjusted weighted average number of ordinary shares and assumed conversions | 370,257,765 | 357,355,126 | 313,157,584 | |||||||||
Weighted average number of E Ordinary shares used in calculation of basic and diluted income/(loss) per E Ordinary share | 3,182,662 | 3,873,169 | 4,046,364 | |||||||||
Income/(loss) per share attributable to AngloGold Ashanti common stockholders (cents) | ||||||||||||
From continuing operations | ||||||||||||
Ordinary shares | 30 | (230 | ) | (186 | ) | |||||||
E Ordinary shares | 15 | (115 | ) | (93 | ) | |||||||
Ordinary shares — diluted | 30 | (230 | ) | (186 | ) | |||||||
E Ordinary shares — diluted | 15 | (115 | ) | (93 | ) | |||||||
Discontinued operations | ||||||||||||
Ordinary shares | — | — | 7 | |||||||||
E Ordinary shares | — | — | 4 | |||||||||
Ordinary shares — diluted | — | — | 7 | |||||||||
E Ordinary shares — diluted | — | — | 4 | |||||||||
Net income/(loss) | ||||||||||||
Ordinary shares | 30 | (230 | ) | (179 | ) | |||||||
E Ordinary shares | 15 | (115 | ) | (89 | ) | |||||||
Ordinary shares — diluted | 30 | (230 | ) | (179 | ) | |||||||
E Ordinary shares — diluted | 15 | (115 | ) | (89 | ) | |||||||
(1) | Compensation awards are included in the calculation of basic income/(loss) per common share from when the necessary conditions have been met, and it is virtually certain that shares will be issued as a result of employees exercising their options. | |
The calculation of diluted income/(loss) per common share did not assume the effect of the following number of shares as their effects are anti-dilutive: |
(2) Issuable upon the exercise of stock incentive options | 1,234,858 | 872,373 | ||||||||||
(3) Issuable upon the exercise of convertible bonds | 33,524,615 | 15,384,615 | 15,384,615 | |||||||||
(4) The calculation of diluted loss per common share for 2009 and 2008 did not assume the effect of conversion of E Ordinary shares as the Company recorded a loss from continuing operations during these periods. |
2010 | 2009 | |||||||
$ | $ | |||||||
Cash classified as restricted for use comprise of the following: | ||||||||
Cash restricted by prudential solvency requirements | 8 | 8 | ||||||
Cash balances held by the Tropicana project | 1 | 3 | ||||||
Other | 1 | 1 | ||||||
10 | 12 | |||||||
F-36
Table of Contents
2010 | 2009 | |||||||
$ | $ | |||||||
Trade debtors are net of: | ||||||||
Provision for doubtful debt | 19 | 12 | ||||||
Other receivables include: | ||||||||
Prepayments and accrued income | 60 | 52 | ||||||
Interest receivable | 9 | 2 | ||||||
Exploration debtors | 11 | — | ||||||
Deferred loan fees | — | 15 | ||||||
Other debtors | 6 | 5 | ||||||
86 | 74 | |||||||
2010 | 2009 | |||||||
$ | $ | |||||||
Short-term: | ||||||||
Metals in process | 184 | 115 | ||||||
Gold on hand (doré/bullion) | 77 | 75 | ||||||
Ore stockpiles | 324 | 227 | ||||||
Uranium oxide and sulfuric acid | 43 | 34 | ||||||
Supplies | 255 | 252 | ||||||
883 | 703 | |||||||
Less: Heap leach inventory(1) | (91 | ) | (40 | ) | ||||
792 | 663 | |||||||
(1) | Short-term portion relating to heap leach inventory classified separately, as materials on the leach pad. |
Metals in process | 331 | 324 | ||||||
Ore stockpiles | 27 | 25 | ||||||
Supplies | — | 1 | ||||||
358 | 350 | |||||||
Less: Heap leach inventory(1) | (331 | ) | (324 | ) | ||||
27 | 26 | |||||||
(1) | Long-term portion relating to heap leach inventory classified separately, as materials on the leach pad. |
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Inventory write-downs (included in production costs) | 21 | 48 | 60 |
2010 | 2009 | |||||||
$ | $ | |||||||
Mine development | 6,590 | 5,604 | ||||||
Buildings and mine infrastructure | 3,263 | 2,957 | ||||||
Mineral rights and other | 1,045 | 1,053 | ||||||
Assets under construction(1) | 502 | 251 | ||||||
Land | 37 | 30 | ||||||
11,437 | 9,895 | |||||||
Accumulated depreciation, depletion and amortization | (5,511 | ) | (4,441 | ) | ||||
Net book value December 31, | 5,926 | 5,454 | ||||||
(1) Interest capitalized during the year (See Note 5) amounted to: | — | 13 | ||||||
Net book value of mining assets encumbered by capital leases (See Note 19) | 48 | 50 |
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2010 | 2009 | |||||||
$ | $ | |||||||
Acquired properties, at cost | 2,168 | 2,053 | ||||||
Accumulated amortization | (1,332 | ) | (1,222 | ) | ||||
Net book value December 31, | 836 | 831 | ||||||
Continental | ||||||||||||||||
Americas | Australasia | Africa | Total | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Balance at January 1, 2009 | 18 | 103 | 11 | 132 | ||||||||||||
Translation | — | 30 | — | 30 | ||||||||||||
Balance at December 31, 2009 | 18 | 133 | 11 | 162 | ||||||||||||
Translation | — | 18 | — | 18 | ||||||||||||
Balance at December 31, 2010 | 18 | 151 | 11 | 180 | ||||||||||||
Net carrying amount of goodwill as at December 31, 2010 and 2009 is reconciled as follows: | ||||||||||||||||
- Gross carrying amount | 18 | 151 | 310 | 479 | ||||||||||||
- Accumulated impairment losses | — | — | (299 | ) | (299 | ) | ||||||||||
Net carrying amount as at December 31, 2010 | 18 | 151 | 11 | 180 | ||||||||||||
- Gross carrying amount | 18 | 133 | 310 | 461 | ||||||||||||
- Accumulated impairment losses | — | — | (299 | ) | (299 | ) | ||||||||||
Net carrying amount as at December 31, 2009 | 18 | 133 | 11 | 162 |
2010 | 2009 | |||||||
$ | $ | |||||||
Royalty rate concession agreement(1) | ||||||||
Gross carrying value | 30 | 29 | ||||||
Accumulated amortization | (13 | ) | (11 | ) | ||||
17 | 18 | |||||||
(1) | The government of Ghana agreed to a concession on royalty payments at a fixed rate of 3 percent per year for a period of fifteen years from 2004. |
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Amortization expense | 2 | 2 | 2 |
2011 | 2 | |||||||||||
2012 | 2 | |||||||||||
2013 | 2 | |||||||||||
2014 | 2 | |||||||||||
2015 | 2 | |||||||||||
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2010 | 2009 | |||||||
$ | $ | |||||||
Investments in associates — unlisted | 7 | 6 | ||||||
Investments in associates — listed | 3 | 2 | ||||||
Investments in equity accounted joint ventures | 601 | 659 | ||||||
Carrying value of equity method investments | 611 | 667 | ||||||
Investment in marketable equity securities — available for sale | 124 | 111 | ||||||
Investment in marketable debt securities — held to maturity | 13 | 10 | ||||||
Investment in non-marketable assets — held to maturity | 2 | 2 | ||||||
Cost method investment | 9 | 4 | ||||||
Investment in non-marketable debt securities — held to maturity | 89 | 48 | ||||||
Restricted cash | 33 | 53 | ||||||
Other non-current assets | 192 | 127 | ||||||
1,073 | 1,022 | |||||||
Investments in associates |
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
percentage held | percentage held | |||||||
Unlisted | ||||||||
South Africa | ||||||||
Oro Group (Proprietary) Limited(1) | 25.00 | 25.00 | ||||||
Margaret Water Company | 33.33 | 33.33 | ||||||
Orpheo (Proprietary) Limited(1) | 50.00 | 33.33 | ||||||
Wonder Wise Holdings Limited(2) | — | 25.00 | ||||||
Listed | ||||||||
Other | ||||||||
Trans-Siberian Gold plc(1)(3)(4) | 30.70 | 29.74 |
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
(1)Results are included for the twelve months ended September 30, 2010, adjusted for material transactions. | ||||||||||||
(2)Investment disposed of during 2010. | ||||||||||||
(3)Market value of the Company’s investment in Trans-Siberian Gold plc as at December 31 | 33 | 12 | 5 | |||||||||
(4)Impairment losses recorded during the years ended December 31 | — | — | 8 |
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
percentage held | percentage held | |||||||
South Africa | ||||||||
AuruMar (Proprietary) Limited | 50.00 | 50.00 | ||||||
Continental Africa | ||||||||
Sadiola | 41.00 | 41.00 | ||||||
Morila | 40.00 | 40.00 | ||||||
Yatela | 40.00 | 40.00 | ||||||
Kibali Goldmines s.p.r.l. | 45.00 | 45.00 | ||||||
Other | ||||||||
AGA — Polymetal Strategic Alliance(1) | 50.00 | 50.00 |
(1) | Results are included for the twelve months ended September 30, 2010, adjusted for material transactions. The AGA-Polymetal Strategic Alliance consists of the AGA-Polymetal Strategic Alliance Management Company, Amikan Holdings Limited (“Amikan”), AS APK Holdings Limited, Imizoloto Holdings Limited and Yeniseiskaya Holdings Limited. |
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2010 | 2009 | |||||||
$ | $ | |||||||
Investment in marketable equity securities — available for sale | ||||||||
Available for sale investments in marketable equity securities consists of investments in ordinary shares. | ||||||||
Cost | 35 | 39 | ||||||
Gross unrealized gains | 89 | 72 | ||||||
Gross unrealized losses | — | — | ||||||
Fair value (net carrying value) | 124 | 111 | ||||||
Other-than-temporary impairments recognized (1) | 2 | 12 | ||||||
See “Note 5 - Costs and expenses: (Profit)/loss on sale of assets, realization of loans, indirect taxes and other” for additional information. In addition to these investments, the Company holds various equities as strategic investments in gold exploration companies. Three of the strategic investments are in an unrealized loss position and the Company has the intent and ability to hold these investments until the losses are recovered. | ||||||||
The following tables present the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by length of time that the individual securities have been in a continuous unrealized loss position: |
More than 12 | ||||||||||||
Less than 12 months | months | Total | ||||||||||
$ | $ | $ | ||||||||||
2010 | ||||||||||||
Aggregate fair value of investments with unrealized losses | 4 | — | 4 | |||||||||
Aggregate unrealized losses | — | — | — | |||||||||
2009 (2) | ||||||||||||
Aggregate fair value of investments with unrealized losses | — | — | — | |||||||||
Aggregate unrealized losses | — | — | — |
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
(1)Impairments relating to available for sale investments in marketable equity securities recorded during the years ending December 31, included: | ||||||||||||
Corvus Gold Incorporated shares (United States of America) | 2 | — | — | |||||||||
B2Gold Corporation shares (Colombia) | — | 12 | — | |||||||||
Red 5 Limited shares (Australia) | — | — | 4 | |||||||||
Dynasty Gold Corporation shares (China) | — | — | 2 | |||||||||
The impairments resulted in a transfer of fair value adjustments previously included in accumulated other comprehensive income to the income statement. | ||||||||||||
(2)In aggregate, the fair value of strategic investments in an unrealized loss position, as well as the aggregate unrealized losses amount to less than $1 million, respectively. |
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2010 | 2009 | |||||||
$ | $ | |||||||
Investment in marketable debt securities — held to maturity | 13 | 10 | ||||||
Investments in marketable debt securities represent held to maturity government bonds held by the Environmental Rehabilitation Trust Fund with a total fair value of $14 million (2009: $10 million) and gross unrealized gains of $1 million (2009: nil). | ||||||||
Investment in non-marketable assets — held to maturity | 2 | 2 | ||||||
Investments in non-marketable assets represent secured loans and receivables secured by pledge of assets. | ||||||||
Cost method investment | 9 | 4 | ||||||
The cost method investment mainly represent shares held in XDM Resources Limited. (1) | ||||||||
Investment in non-marketable debt securities — held to maturity | 89 | 48 | ||||||
Investments in non-marketable debt securities represent the held to maturity fixed-term deposits required by legislation for the Environmental Rehabilitation Trust Fund and Nufcor Uranium Trust Fund. | ||||||||
As of December 31, 2010 the contractual maturities of debt securities were as follows: | ||||||||
Marketable debt securities | ||||||||
Up to three years | 2 | |||||||
Three to seven years | 11 | |||||||
13 | ||||||||
Non-marketable debt securities | ||||||||
Less than one year | 89 | |||||||
Restricted cash | 33 | 53 | ||||||
Restricted cash mainly represent cash balances held by the Environmental Rehabilitation Trust Fund and Environmental Protection Bond. | ||||||||
Other non-current assets | ||||||||
Unsecured | ||||||||
Other loans and assets (2) | 9 | 8 | ||||||
Non-current debtors | ||||||||
Prepayments and accrued income | 31 | 27 | ||||||
Recoverable tax, rebates, levies and duties | 82 | 56 | ||||||
Unamortized issue costs of long-term debt, bonds and revolving credit facility | 32 | 13 | ||||||
Other debtors | 38 | 23 | ||||||
192 | 127 | |||||||
(1) | The fair value is not estimated as there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment and it is not practicable to estimate the fair value of the investment. | |
(2) | Other comprises the following: |
Loans and receivables measured at amortized cost | 6 | 1 | ||||||
Post-retirement assets measured according to the employee benefits accounting policy. | 3 | 7 |
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2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Statements of income for the period | ||||||||||||
Sales and other income | 823 | 880 | 464 | |||||||||
Costs and expenses | (528 | ) | (508 | ) | (726 | ) | ||||||
Taxation | (126 | ) | (120 | ) | (97 | ) | ||||||
Net income/(loss) | 169 | 252 | (359 | ) | ||||||||
Balance sheets at December 31, | ||||||||||||
Non-current assets | 1,205 | 1,166 | ||||||||||
Current assets | 550 | 523 | ||||||||||
1,755 | 1,689 | |||||||||||
Long-term liabilities | (126 | ) | (111 | ) | ||||||||
Loans from shareholders | (4 | ) | (5 | ) | ||||||||
Current liabilities | (260 | ) | (169 | ) | ||||||||
Net assets | 1,365 | 1,404 | ||||||||||
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2010 | 2009 | |||||||
$ | $ | |||||||
Effective November 3, 2010, ISS International Limited (“ISSI”) in South Africa was classified as held for sale. AngloGold Ashanti entered into a memorandum of understanding with The Institute of Mine Seismology (“IMS”) relating to the disposal of ISSI. The transaction closed on February 28, 2011 and the proceeds from disposal amounted to $13 million. At December 31, 2009, net assets of ISSI amounted to $9 million. | 12 | — | ||||||
Effective December 2007, Rand Refinery Limited in South Africa (a subsidiary of the Company) transferred parts of its premises that were no longer utilized (previously recognized as a tangible asset), to held for sale. On April 1, 2008, a sale agreement was concluded, subject to achievement of the suspensive condition regarding rezoning of the land and transfer of title deeds. Rand Refinery Limited is currently awaiting the rezoning transfer notification from the municipal and deeds office in order to conclude the sales transaction. | 1 | 1 | ||||||
On February 17, 2009, AngloGold Ashanti announced the terms of the sale of its Tau Lekoa mine together with the adjacent properties of Weltevreden, Jonkerskraal and Goedgenoeg (“Tau Lekoa”) in South Africa to Simmer & Jack Mines Limited (“Simmers”). Tau Lekoa was previously recognized as a combination of tangible assets, current assets and current and long-term liabilities. The sale was concluded effective August 1, 2010, following the transfer of the mineral rights of Tau Lekoa to Buffelsfontein Gold Mines Limited, a wholly-owned subsidiary of Simmers on July 20, 2010. The Company recorded a loss on disposal of $7 million on the sale. Refer to “Note 5 — Costs and expenses: Profit/loss on sale of assets, realization of loans, indirect taxes and other”. | ||||||||
Following the effective date of the disposal, Simmers will treat all ore produced from the assets at its own processing facilities. As a result, AngloGold Ashanti will have increased processing capacity available at its Vaal River plants, allowing for the processing of additional material from its surface sources and the other Vaal River mines. | ||||||||
The additional treatment capacity will ensure significant continuing direct cash flows from the same gold commodity in an active market. Consequently, due to the migration of cash flows and in accordance with the FASB ASC guidance on discontinued operations, Tau Lekoa was not classified as a discontinued operation. | ||||||||
Tau Lekoa was classified as held for sale in the balance sheet as at December 31, 2009. | — | 64 | ||||||
Following the classification of Tau Lekoa as held for sale, the Company recognized impairment losses of $8 million (2009: $4 million) in earnings to reduce the carrying amount of Tau Lekoa to fair value less costs to sell. Refer to “Note 5 — Costs and expenses: Impairment of assets”. |
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2010 | 2009 | |||||||
$ | $ | |||||||
As at December 31, 2010 and 2009 the carrying amounts of major classes of assets and liabilities classified as held for sale included: | ||||||||
Cash and cash equivalents | 11 | — | ||||||
Trade and other receivables | 2 | — | ||||||
Inventories | 1 | 3 | ||||||
Property, plant and equipment | 2 | 70 | ||||||
Acquired properties | — | 1 | ||||||
Trade and other payables | (3 | ) | (3 | ) | ||||
Provision for environmental rehabilitation | — | (6 | ) | |||||
Net assets | 13 | 65 | ||||||
Deferred income | 10 | 13 | ||||||
Deferred taxation. Refer to Note 7. | 12 | 8 | ||||||
Pension and other post-retirement medical benefits. Refer to Note 26. | 14 | 14 | ||||||
Accrual for power | 42 | 18 | ||||||
Other (including accrued liabilities) | 75 | 67 | ||||||
153 | 120 | |||||||
Deferred income | 7 | 5 | ||||||
Taxation. Refer to Note 7. | 52 | 149 | ||||||
Other creditors | 10 | 9 | ||||||
69 | 163 | |||||||
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2010 | 2009 | |||||||
$ | $ | |||||||
Unsecured | ||||||||
Debt carried at fair value | ||||||||
Mandatory convertible bonds — issued September 2010(1) | 874 | — | ||||||
Quarterly coupon of 6 percent per annum. The bonds are convertible into ADS’s in September 2013 and are US dollar-based. The bonds are convertible into a variable number of shares as set forth in the indenture | ||||||||
Accrued interest included in short-term debt | (2 | ) | — | |||||
Long-term debt at fair value | 872 | — | ||||||
Debt carried at amortized cost | ||||||||
Rated bonds — issued April 2010(2) | 1,006 | — | ||||||
The rated bonds have two components, $700 million 10-year bonds and $300 million 30-year bonds. Semi-annual coupons of 5.375 percent per annum on $700 million 10-year bonds and 6.5 percent per annum on $300 million 30-year bonds. The $700 million 10-year bonds are repayable in April 2020 and the $300 million 30-year bonds are repayable in April 2040. The bonds are US dollar-based | ||||||||
Syndicated loan facility ($1.0 billion)(3) | 50 | — | ||||||
Interest charged at LIBOR plus 1.75 percent per annum. The loan is repayable in April 2014 and is US dollar-based | ||||||||
Syndicated loan facility ($1.15 billion)(4) | — | 1,025 | ||||||
Interest charged at LIBOR plus 0.4 percent per annum. Loan was repaid in June 2010 and was US dollar-based | ||||||||
3.5% Convertible bonds(5) | 633 | 609 | ||||||
Semi-annual coupon of 3.5 percent per annum. The bonds are convertible, at the holders’ option, into ADSs up to May 2014 and are US dollar-based. The bonds are convertible at an initial conversion price of $47.6126 per ADS | ||||||||
FirstRand Bank Limited loan facility (R1.5 billion) | 107 | — | ||||||
Interest charged at JIBAR plus 0.95 percent per annum. Loan is repayable in May 2011 and is ZAR-based | ||||||||
2009 Term Facility(6) | — | 252 | ||||||
Interest charged at a margin of 4.25 percent per annum over the higher of the applicable LIBOR and the lenders’ cost of funds (subject to a cap of LIBOR plus 1.25 percent per annum). Loan was repaid in May 2010 and was US dollar-based | ||||||||
Grupo Santander Brasil | 5 | 8 | ||||||
Interest charged at LIBOR plus 1.45 percent per annum. Loan is repayable in quarterly installments terminating in September 2011 and is US dollar-based | ||||||||
Grupo Santander Brasil | 4 | 6 | ||||||
Interest charged at 6 percent per annum. Loans are repayable in monthly installments terminating in November 2013 and April 2014 and are Brazilian real-based |
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2010 | 2009 | |||||||
$ | $ | |||||||
Secured | ||||||||
Capital leases | ||||||||
Turbine Square Two (Proprietary) Limited(7) | 39 | 35 | ||||||
The leases are capitalized at an implied interest rate of 9.8 percent per annum. Lease payments are due in monthly installments terminating in March 2022 and are ZAR-based. The buildings financed are used as security for these loans. Refer to Note 13 | ||||||||
Caterpillar Financial Services Corporation(7) | 13 | 16 | ||||||
Interest charged at an average rate of 5.46 percent per annum. Loans are repayable in monthly installments terminating in January 2015 and are US dollar-based. The equipment financed is used as security for these loans. Refer to Note 13 | ||||||||
Mazuma Capital Corporation(7) | 4 | 7 | ||||||
Interest charged at an average rate of 5.6 percent per annum. Loans are repayable in monthly installments terminating in November 2012 and are US dollar-based. The equipment financed is used as security for these loans. Refer to Note 13 | ||||||||
CSI Latina Arrendamento Mercantil S.A.(7) | 2 | 1 | ||||||
Interest charged at a rate of 3.3 percent per annum. Loans are repayable in monthly installments terminating in June 2013 and are Brazilian real-based. The equipment financed is used as security for these loans. Refer to Note 13 | ||||||||
Total debt at amortized cost | 1,863 | 1,959 | ||||||
Current maturities included in short-term debt | (133 | ) | (1,292 | ) | ||||
Long-term debt at amortized cost | 1,730 | 667 | ||||||
Certain long-term debt facilities are subject to debt covenant arrangements for which no breaches have occurred | ||||||||
Scheduled minimum total debt maturities are: | ||||||||
2011 | 135 | |||||||
2012 | 8 | |||||||
2013 | 877 | |||||||
2014 | 685 | |||||||
2015 | 2 | |||||||
Thereafter | 1,030 | |||||||
2,737 | ||||||||
The currencies in which the borrowings are denominated are as follows: | ||||||||
United States dollars | 2,585 | 1,917 | ||||||
South African rands | 146 | 35 | ||||||
Brazilian real | 6 | 7 | ||||||
2,737 | 1,959 | |||||||
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2010 | 2009 | |||||||
$ | $ | |||||||
Undrawn borrowing facilities as at December 31 are as follows: | ||||||||
Syndicated loan facility ($1.0 billion) — US dollar | 950 | — | ||||||
Syndicated loan facility ($1.15 billion) — US dollar | — | 125 | ||||||
Standard Chartered PLC (2009 Revolving Credit Facility) — US dollar | — | 250 | ||||||
FirstRand Bank Limited — US dollar | 50 | 50 | ||||||
Absa Bank Limited — US dollar | 42 | 42 | ||||||
Nedbank Limited — US dollar | — | 2 | ||||||
FirstRand Bank Limited — rands | 139 | 30 | ||||||
Standard Bank of South Africa Limited — rands | 28 | 25 | ||||||
Nedbank Limited — rands | 18 | 14 | ||||||
Absa Bank Limited — rands | 5 | 4 | ||||||
1,232 | 542 | |||||||
(1) | Mandatory convertible bonds In September 2010, the Company issued mandatory convertible bonds at a coupon rate of 6 percent due in September 2013. The conversion of the mandatory convertible bonds into ADSs was subject to shareholder approval, which was granted in October 2010. These bonds are convertible into a variable number of ADSs, ranging from 18,140,000 at a share price equal to or lesser than $43.50, to 14,511,937 at a share price equal to or greater than $54.375, each as calculated in accordance with the formula set forth in the indenture and subject to adjustment. | |
The mandatory convertible bonds contain certain embedded derivatives relating to change in control and anti-dilution protection provisions. The FASB ASC guidance contains an election for the Company to record the entire instrument at fair value as opposed to separating the embedded derivatives from the instrument. The shareholders have authorized that the convertible bonds will be settled in equity and not have any cash settlement potential except if a fundamental change or conversion rate adjustment causes the number of ADSs deliverable upon conversion to exceed the number of shares reserved for such purpose, among other circumstances provided in the indenture, and therefore the Company has chosen to recognize the instrument, in its entirety, at fair value. Depending on the final calculated share price on the date of conversion, the liability recognized may differ from the principal amount. | ||
Other convertible bonds that have been issued by the Company will only be settled in equity if future events, outside of the control of the Company, result in equity settlement and thus have a potential cash settlement at maturity that will not exceed the principal amount, in those circumstances the liabilities are recognized at amortized cost. | ||
In determining the fair value liability of the mandatory convertible bonds, the Company has measured the effect based on the ex interest NYSE closing price on the reporting date. The ticker code used by the NYSE for the mandatory convertible bonds is AUPRA. The accounting policy of the Company is to recognize interest expense separately from the fair value adjustments in the income statement. Interest is recognized at a quarterly coupon rate of 6 percent per annum. Fair value adjustments are included in Non-hedge derivative loss and movement on bonds in the income statement — refer to Note 5. | ||
The contractual principal amount of the mandatory convertible bonds is $789 million, provided the calculated share price of the Company is within the range of $43.50 to $54.375. If the calculated share price is below $43.50, the Company will recognize a gain on the principal amount and above $54.375 a loss. As at December 30, 2010, the actual share price was $49.23. | ||
The mandatory convertible bonds were issued by AngloGold Ashanti Holdings Finance plc, a finance company wholly-owned by AngloGold Ashanti Limited. AngloGold Ashanti Limited has fully and unconditionally guaranteed the mandatory subordinated convertible bonds issued by AngloGold Ashanti Holdings Finance plc. There are no significant restrictions on the ability of AngloGold Ashanti Limited to obtain funds from its subsidiaries by dividend or loan. |
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2010 | 2009 | |||||||
$ | $ | |||||||
(2)Rated bonds | ||||||||
Senior unsecured fixed rate bonds | 1,000 | — | ||||||
Less: Unamortized discount | (6 | ) | — | |||||
Add: Accrued interest | 12 | — | ||||||
1,006 | — | |||||||
On April 22, 2010, the Company announced the pricing of an offering of 10-year and 30-year notes. The offering closed on April 28, 2010. The notes were issued by AngloGold Ashanti Holdings plc, a wholly-owned subsidiary of AngloGold Ashanti Limited, and are fully and unconditionally guaranteed by AngloGold Ashanti Limited. The notes are unsecured and interest is payable semi-annually | ||||||||
(3)Syndicated loan facility ($1.0 billion) | ||||||||
Drawn down | 50 | — | ||||||
Add: Accrued interest | — | — | ||||||
50 | — | |||||||
On April 20, 2010, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Inc., each a wholly-owned subsidiary of AngloGold Ashanti Limited, as borrowers, and AngloGold Ashanti Limited entered into a $1.0 billion four year revolving credit facility with a syndicate of lenders to replace the existing $1.15 billion syndicated facility. AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Inc. each guaranteed the obligations of the borrowers and other guarantors under the facility. Amounts may be repaid and reborrowed under the facility during its four year term. A commitment fee of 0.70 percent is payable quarterly in arrears on the undrawn portion of the facility | ||||||||
(4)Syndicated loan facility ($1.15 billion) | ||||||||
Drawn down | — | 1,025 | ||||||
— | 1,025 | |||||||
In December 2007, the Company entered into a three year $1.15 billion unsecured syndicated borrowing facility, at a margin of 0.4 percent over LIBOR. On April 20, 2010, the Company entered into a $1.0 billion four year revolving credit facility to replace the $1.15 billion syndicated loan facility. During the second quarter of 2010, the Company applied proceeds from the rated bonds issued in April 2010, to repay the $1.15 billion syndicated facility | ||||||||
During the year ended December 31, 2010, the Company drew down and repaid the following amounts: | ||||||||
Amount drawn down under the $1.15 billion facility | 35 | |||||||
Amount repaid under the $1.15 billion facility | 1,060 |
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2010 | 2009 | |||||||
$ | $ | |||||||
(5)3.5% Convertible bonds | ||||||||
Senior unsecured fixed rate bonds | 630 | 607 | ||||||
Add: Accrued interest | 3 | 2 | ||||||
633 | 609 | |||||||
The issue of convertible bonds in the aggregate principal amount of $732.5 million at an interest rate of 3.5 percent was concluded on May 22, 2009. These bonds are convertible into ADSs at an initial conversion price of $47.6126. The conversion price is subject to standard weighted average anti-dilution protection. The convertible bonds were issued by AngloGold Ashanti Holdings Finance plc, a finance company wholly-owned by AngloGold Ashanti Limited. AngloGold Ashanti Limited has fully and unconditionally guaranteed the convertible bonds issued by AngloGold Ashanti Holdings Finance plc. There are no significant restrictions on the ability of AngloGold Ashanti Limited to obtain funds from its subsidiaries by dividend or loan | ||||||||
The convertible bonds mature on May 22, 2014. However, at any time on or after June 12, 2012 the Company has the right, but not the obligation, to redeem all (but not part) of the convertible bonds at their principal amount together with accrued interest if the volume weighted average price of the ADSs that would be delivered by the Company on the conversion of a convertible bond of a principal amount of $100,000 exceeds $130,000 on each of at least 20 consecutive dealing days ending not earlier than five days prior to the date that the Company gives notice of the redemption | ||||||||
Upon the occurrence of a change of control of the Company, each convertible bond holder will have the right to require the Company to redeem its convertible bonds at their principal amount plus accrued interest thereon. If the convertible bond holder elects to convert its convertible bonds in connection with such change of control, the Company will pay a “make whole” premium to such convertible bond holder in connection with such conversion | ||||||||
The Company is separately accounting for the conversion features of the convertible bonds at fair value as a derivative liability with subsequent changes in fair value recorded in earnings each period. The total fair value of the derivative liability on May 22, 2009 (date of issue) amounted to $142.2 million. The difference between the initial carrying value and the stated value of the convertible bonds is being accreted to interest expense using the effective interest method over the 5 year term of the bonds | ||||||||
The associated derivative liability (which has been accounted for separately) are summarized as follows: | ||||||||
Convertible bond derivative liability | ||||||||
Balance at beginning of period | 175 | 142 | ||||||
Fair value movements on conversion features of convertible bonds | 1 | 33 | ||||||
Balance at end of period | 176 | 175 | ||||||
(6)2009 Term Facility | ||||||||
Drawn down | — | 250 | ||||||
Add: Accrued interest | — | 2 | ||||||
— | 252 | |||||||
On November 20, 2008, AngloGold Ashanti Holdings plc entered into a $1.0 billion term loan facility agreement (the “Term Facility”) | ||||||||
During 2009, the Company completed an amendment to the Term Facility by prepaying an amount of $750 million and, as a result, the balance of the Term Facility was converted into a new term loan of $250 million (the “2009 Term Facility”) and a new revolving credit facility of $250 million was made available (the “2009 Revolving Credit Facility”) | ||||||||
During the second quarter of 2010, the Company applied proceeds from the rated bonds issued in April 2010, to repay the 2009 Term Facility and to cancel the 2009 Revolving Credit Facility. The cancellation of these debt facilities in the June quarter resulted in a once-off charge to earnings of $8 million related to accelerated amortization of fees |
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(7) | Capital leases | |
Capital leases are for specific periods, with terms of renewal but no purchase options. Renewals are at the discretion of the entity that holds the lease. | ||
Property, plant and equipment, allocated to Buildings and mine infrastructure, includes the following assets under capital leases: |
2010 | 2009 | |||||||||||||||
Accumulated | Accumulated | |||||||||||||||
Cost | depreciation | Cost | depreciation | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Turbine Square Two (Proprietary) Limited | 37 | 9 | 33 | 6 | ||||||||||||
Caterpillar Financial Services Corporation | 15 | 2 | 16 | — | ||||||||||||
Mazuma Capital Corporation | 8 | 2 | 7 | 1 | ||||||||||||
CSI Latina Arrendamento Mercantil S.A. | 3 | 2 | 2 | 1 | ||||||||||||
63 | 15 | 58 | 8 | |||||||||||||
2010 | ||||
$ | ||||
2011 | 10 | |||
2012 | 11 | |||
2013 | 8 | |||
2014 | 9 | |||
2015 | 6 | |||
Thereafter | 48 | |||
Total minimum lease payments | 92 | |||
Less interest | 34 | |||
Present value of net minimum lease payments | 58 | |||
Less current portion | 6 | |||
Long-term capital lease obligation | 52 | |||
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2010 | 2009 | |||||||
$ | $ | |||||||
Accrued environmental rehabilitation costs | 530 | 385 | ||||||
Long-term environmental obligations comprising decommissioning and restoration are based on the Company’s environmental management plans, in compliance with the current environmental and regulatory requirements. | ||
While the ultimate amount of rehabilitation is uncertain, the Company has estimated that the total cost for mine rehabilitation and closure, on an undiscounted basis, will be $2,512 million which includes a total estimated liability of $54 million in respect of equity accounted joint ventures. AngloGold Ashanti USA has posted reclamation bonds with various federal and governmental agencies to cover environmental rehabilitation obligations. Refer to Note 21. | ||
The Company intends to finance the ultimate rehabilitation costs from the monies invested with the rehabilitation trust fund, the environmental protection bond as well as the proceeds on sale of assets and gold from plant clean-up at the time of mine closure. |
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2010 | 2009 | |||||||
$ | $ | |||||||
Capital expenditure commitments(1) | ||||||||
Contracts for capital expenditure | 176 | 131 | ||||||
Authorized by the directors but not yet contracted for | 988 | 1,683 | ||||||
1,164 | 1,814 | |||||||
Allocated for: | ||||||||
Project expenditure | ||||||||
- within one year | 433 | 264 | ||||||
- thereafter | 107 | 594 | ||||||
540 | 858 | |||||||
Stay in business expenditure | ||||||||
- within one year | 404 | 705 | ||||||
- thereafter | 220 | 251 | ||||||
624 | 956 | |||||||
(1)Including commitments through contractual arrangements by equity accounted joint venturesamounting to: | 12 | 6 | ||||||
Other contractual purchase obligations(2) | ||||||||
- within one year | 398 | 346 | ||||||
- thereafter | 140 | 96 | ||||||
538 | 442 | |||||||
(2) | Other purchase obligations represent contractual obligations for the purchase of mining contract services, power, supplies, consumables, inventories, explosives and activated carbon. Amounts exclude purchase obligations of equity accounted joint ventures. |
Average contracted | ||||||||
Year | lbs (000)(1) | price ($/lbs) | ||||||
2011 | 494 | 33.97 | ||||||
2012 | 494 | 34.35 | ||||||
2013 | 494 | 34.74 |
(1) | Certain contracts allow the buyer to adjust the purchase quantity within a specified range. |
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21. | COMMITMENTS AND CONTINGENCIES(continued) |
2010 | 2009 | |||||||||
$ | $ | |||||||||
Contingent liabilities | ||||||||||
Groundwater pollution (1) | — | — | ||||||||
Deep groundwater pollution — South Africa (2) | — | — | ||||||||
Sales tax on gold deliveries — Brazil (3) | 89 | 76 | ||||||||
Other tax disputes — Brazil (4) | 34 | 25 | ||||||||
Indirect taxes — Ghana (5) | 11 | 9 | ||||||||
Occupational Diseases in Mines and Works Act (“ODMWA”) litigation (6) | — | — | ||||||||
Contingent assets | ||||||||||
Royalty — Boddington Gold Mine (7) | — | — | ||||||||
Royalty — Tau Lekoa Gold Mine (8) | — | — | ||||||||
Financial guarantees | ||||||||||
Oro Group surety (9) | 15 | 13 | ||||||||
AngloGold Ashanti USA reclamation bonds (10) | 88 | 84 | ||||||||
AngloGold Ashanti environmental guarantees (11) | 172 | 134 | ||||||||
Guarantee provided for revolving credit facility (12) | 50 | — | ||||||||
Guarantee provided for rated bonds (13) | 1,012 | — | ||||||||
Guarantee provided for convertible bonds (14) | 736 | 735 | ||||||||
Guarantee provided for mandatory convertible bonds (15) | 791 | — | ||||||||
Guarantee provided for term loan facility and revolving credit facility (16) | — | 252 | ||||||||
Guarantee provided for syndicated loan facility (17) | — | 1,025 | ||||||||
Hedging guarantees | ||||||||||
Gold delivery guarantees (18) | — | 370 | ||||||||
Ashanti Treasury Services Limited (“ATS”) hedging guarantees (19) | — | 443 | ||||||||
Geita Management Company Limited (“GMC”) hedging guarantees (20) | — | 432 | ||||||||
2,998 | 3,598 | |||||||||
The Company assesses the credit quality of counterparts at least on a quarterly basis. As of December 31, 2010, the probability of non-performance is considered minimal. | ||||||||||
(1) | Ground water pollution | |||||||||
The Company has identified groundwater contamination plumes at certain of its operations, which have occurred primarily as a result of seepage from mine residue stockpiles. Numerous scientific, technical and legal studies have been undertaken to assist in determining the magnitude of the contamination and to find sustainable remediation solutions. The Company has instituted processes to reduce future potential seepage and it has been demonstrated that Monitored Natural Attenuation (MNA) by the existing environment will contribute to improvement in some instances. Furthermore, literature reviews, field trials and base line modeling techniques suggest, but are not yet proven, that the use of phyto-technologies can address the soil and groundwater contamination. Subject to the completion of trials and the technology being a proven remediation technique, no reasonable estimate can be made for the obligation. |
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21. | COMMITMENTS AND CONTINGENCIES(continued) |
2010 | 2009 | |||||||||
$ | $ | |||||||||
(2) | Deep ground water pollution — South Africa | |||||||||
The Company has identified a flooding and future pollution risk posed by deep groundwater in the Klerksdorp and Far West Rand gold fields. Various studies have been undertaken by AngloGold Ashanti since 1999. Due to the interconnected nature of mining operations, any proposed solution needs to be a combined one supported by all the mines located in these gold fields. As a result, the Department of Mineral Resources and affected mining companies are involved in the development of a “Regional Mine Closure Strategy”. In view of the limitation of current information for the estimation of a liability, no reasonable estimate can be made for the obligation. | ||||||||||
(3) | Sales tax on gold deliveries — Brazil | |||||||||
Mineração Serra Grande S.A. (“MSG”) received two tax assessments from the State of Goiás related to payments of sales taxes on gold deliveries for export. AngloGold Ashanti Córrego do Sitío Mineração S.A. manages the operation. In November 2006, the administrative council’s second chamber ruled in favor of MSG and fully cancelled the tax liability related to the first period. The State of Goiás has appealed to the full board of the State of Goiás tax administrative council. The second assessment was issued by the State of Goiás in October 2006 on the same grounds as the first assessment. The Company believes both assessments are in violation of federal legislation on sales taxes. | ||||||||||
The Company’s attributable share of the assessments are as follows: | ||||||||||
First assessment | 55 | 47 | ||||||||
Second assessment | 34 | 29 | ||||||||
89 | 76 | |||||||||
(4) | Other tax disputes — Brazil | |||||||||
MSG received a tax assessment in October 2003 from the State of Minas Gerais related to sales taxes on gold. The tax administrators rejected the Company’s appeal against the assessment. The Company is now appealing the dismissal of the case. The Company’s attributable share of the assessment is approximately: | 10 | 8 | ||||||||
Subsidiaries of the Company in Brazil are involved in various disputes with tax authorities. These disputes involve federal tax assessments including income tax, royalties, social contributions and annual property tax. The amount involved is approximately: | 24 | 17 | ||||||||
34 | 25 | |||||||||
(5) | Indirect taxes — Ghana | |||||||||
AngloGold Ashanti (Ghana) Limited received a tax assessment during September 2009 in respect of the 2006, 2007 and 2008 tax years following an audit by the tax authorities related to indirect taxes on various items. Management is of the opinion that the indirect taxes are not payable and the Company has lodged an objection. | ||||||||||
The assessment is approximately: | 11 | 9 | ||||||||
(6) | ODMWA litigation | |||||||||
The case of Mr Thembekile Mankayi was heard in the High Court of South Africa in June 2008, and an appeal heard in the Supreme Court of Appeals in 2010. In both instances judgment was awarded in favor of AngloGold Ashanti Limited. A further appeal that was lodged by Mr Mankayi was heard in the Constitutional Court in 2010. Judgment in the Constitutional Court was handed down on March 3, 2011. | ||||||||||
Following the judgment, Mr Mankayi’s executor may proceed with his case in the High Court. This will comprise, amongst others, providing evidence showing that Mr Mankayi contracted silicosis as a result of negligent conduct on the part of AngloGold Ashanti. | ||||||||||
The Company will defend the case and any subsequent claims on their merits. Should other individuals or groups lodge similar claims, these too would be defended by the Company and adjudicated by the Courts on their merits. In view of the limitation of current information for the estimation of a possible liability, no reasonable estimate can be made for this possible obligation. |
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21. | COMMITMENTS AND CONTINGENCIES(continued) |
2010 | 2009 | |||||||||
$ | $ | |||||||||
(7) | Royalty — Boddington Gold Mine | |||||||||
As a result of the sale of the interest in the Boddington Gold Mine during 2009, the Company is entitled to receive a royalty on any gold recovered or produced by the Boddington Gold Mine, where the gold price is in excess of Boddington Gold Mine’s cash costs plus $600 per ounce. The royalty is payable in each quarter from and after the second quarter in 2010, within forty five days of reporting period close and is capped at a total of $100 million. | ||||||||||
Details of the royalty are as follows: | ||||||||||
Royalties received during the year ended December 31. See Note 5. | 4 | — | ||||||||
Royalties received subsequent to December 31, 2010 | 6 | — | ||||||||
(8) | Royalty — Tau Lekoa Gold Mine | |||||||||
As a result of the sale of the Tau Lekoa Gold Mine during 2010, the Company is entitled to receive a royalty on the production of a total of 1.5 million ounces by the Tau Lekoa Gold Mine and in the event that the average monthly rand price of gold exceeds R180,000 per kilogram (subject to an inflation adjustment). Where the average monthly rand price of gold does not exceed R180,000 per kilogram (subject to an inflation adjustment), the ounces produced in that quarter do not count towards the total 1.5 million ounces upon which the royalty is payable. The royalty will be determined at 3 percent of the net revenue (being gross revenue less state royalties) generated by the Tau Lekoa assets. | ||||||||||
Royalties received during the year ended December 31. See Note 5. | 3 | — | ||||||||
(9) | Oro Group surety | 15 | 13 | |||||||
The Company has provided surety in favor of a lender on a gold loan facility with its associate Oro Group (Proprietary) Limited and one of its subsidiaries. The Company has a total maximum liability, in terms of the suretyships, of R100 million. The probability of the non-performance under the suretyships is considered minimal. | ||||||||||
(10) | AngloGold Ashanti USA reclamation bonds | 88 | 84 | |||||||
Pursuant to US environmental and mining requirements, gold mining companies are obligated to close their operations and rehabilitate the lands that they mine in accordance with these requirements. AngloGold Ashanti USA has posted reclamation bonds with various federal and state governmental agencies to cover potential rehabilitation obligations. The Company has provided a guarantee for these obligations which would be payable in the event of AngloGold Ashanti USA not being able to meet its rehabilitation obligations. The obligations will expire upon completion of such rehabilitation and release of such areas by the applicable federal and/or state agency. AngloGold Ashanti is not indemnified by third parties for any of the amounts that may be paid by AngloGold Ashanti under its guarantee. | ||||||||||
(11) | AngloGold Ashanti environmental guarantees | 172 | 134 | |||||||
Pursuant to South African mining laws, mining companies are obligated to close their operations and rehabilitate the lands that they mine in accordance with these laws. In order to cover against premature closure costs, the Company has secured bank guarantees to cover potential rehabilitation obligations of certain mines in South Africa. The Company has provided a guarantee for these obligations which would be payable in the event of the South African mines not being able to meet such rehabilitation obligations. The obligations will expire upon compliance with all provisions of the environment management program in terms of South African mining laws. AngloGold Ashanti is not indemnified by third parties for any of the amounts that may be paid by AngloGold Ashanti under its guarantee. | ||||||||||
(12) | Guarantee provided for revolving credit facility | |||||||||
AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc and AngloGold Ashanti USA Incorporated, as guarantors, have each guaranteed all payments and other obligations of the borrowers and the other guarantors under the $1.0 billion four year revolving credit facility. | ||||||||||
The total amount outstanding under this facility as at December 31 amounted to: | 50 | — |
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21. | COMMITMENTS AND CONTINGENCIES(continued) |
2010 | 2009 | |||||||||
$ | $ | |||||||||
(13) | Guarantee provided for rated bonds | 1,012 | — | |||||||
AngloGold Ashanti Limited has fully and unconditionally guaranteed all payments and other obligations of AngloGold Ashanti Holdings plc regarding the issued $700 million 5.375 percent rated bonds due 2020 and the issued $300 million 6.5 percent rated bonds due 2040. | ||||||||||
(14) | Guarantee provided for convertible bonds | 736 | 735 | |||||||
AngloGold Ashanti Limited has fully and unconditionally guaranteed all payments and other obligations of AngloGold Ashanti Holdings Finance plc regarding the issued $732.5 million 3.5 percent convertible bonds due 2014. | ||||||||||
(15) | Guarantee provided for mandatory convertible bonds | 791 | — | |||||||
AngloGold Ashanti Limited has fully and unconditionally guaranteed all payments and other obligations of AngloGold Ashanti Holdings Finance plc regarding the issued $789 million 6 percent mandatory convertible bonds due 2013. | ||||||||||
(16) | Guarantee provided for term loan facility and revolving credit facility | — | 252 | |||||||
AngloGold Ashanti Limited, AngloGold Ashanti USA Incorporated and AngloGold Ashanti Australia Limited, as guarantors, had each guaranteed all payments and other obligations of AngloGold Ashanti Holdings plc and the other guarantors under the 2009 Term Facility and the 2009 Revolving Credit Facility. During the second quarter of 2010, the Company repaid the 2009 Term Facility and cancelled the 2009 Revolving Credit Facility. | ||||||||||
(17) | Guarantee provided for syndicated loan facility | — | 1,025 | |||||||
AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc, AngloGold Ashanti USA Incorporated and AngloGold Ashanti Australia Limited, as guarantors, had each guaranteed all payments and other obligations of the borrowers and the other guarantors under the $1.15 billion syndicated loan facility. During the second quarter of 2010, the Company repaid and cancelled the $1.15 billion syndicated loan facility. | ||||||||||
(18) | Gold delivery guarantees | — | 370 | |||||||
The Company has issued gold delivery guarantees to several counterpart banks pursuant to which it guarantees the due performance of its subsidiaries AngloGold (USA) Trading Company, AngloGold South America Limited and Cerro Vanguardia S.A. under their respective gold hedging agreements. At December 31, 2010 the Company had no open gold hedge contracts. | ||||||||||
(19) | ATS hedging guarantees | — | 443 | |||||||
The Company together with its wholly-owned subsidiary AngloGold Ashanti Holdings plc has provided guarantees to several counterpart banks for the hedging commitments of its wholly-owned subsidiary ATS. The maximum potential amount of future payments is all moneys due, owing or incurred by ATS under or pursuant to the hedging agreements. At December 31, 2010 the Company had no open gold hedge contracts. |
(20) | GMC hedging guarantees | — | 432 | |||||||
The Company and its wholly-owned subsidiary AngloGold Ashanti Holdings plc have issued hedging guarantees to several counterpart banks in which they have guaranteed the due performance by GMC of its obligations under or pursuant to the hedging agreements entered into by GMC, and to the payment of all money owing or incurred by GMC as and when due. The maximum potential amount of future payments is all moneys due, owing or incurred by GMC under or pursuant to the hedging agreements. At December 31, 2010 the Company had no open gold hedge contracts. |
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21. | COMMITMENTS AND CONTINGENCIES(continued) |
2010 | 2009 | |||||||||
$ | $ | |||||||||
Vulnerability from concentrations | ||||||||||
The majority of AngloGold Ashanti’s 62,046 employees (2009: 63,364, 2008: 62,895) are subject to collective bargaining agreements. These agreements are established in negotiations between the Chamber of Mines, the body that represents the gold mining industry in South Africa, and representative groups of labor. The agreements have a two-year validity period. The most recent settlement negotiation was completed in July 2009, when the parties reached an agreement covering the period from July 1, 2009 to June 30, 2011. | ||||||||||
There is a concentration of risk in respect of recoverable value added tax and fuel duties from the Tanzanian government. The outstanding amounts have been discounted to their present value at a rate of 7.82 percent. | ||||||||||
The recoverable value added tax and fuel duties are summarized as follows: | ||||||||||
Recoverable value added tax due to the Company | 49 | 36 | ||||||||
Recoverable fuel duties due to the Company (1) | 62 | 48 | ||||||||
(1) | Fuel duty claims are required to be submitted after consumption of the related fuel and are subject to authorization by the Customs and Excise authorities. |
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22. | STOCKHOLDERS’ EQUITY |
On May 15, 2009, shareholders approved the increase in the authorized common stock from 400,000,000 shares of common stock to 600,000,000 shares of common stock of 25 ZAR cents each. |
No of shares | ||||
At the annual general meeting of shareholders held on May 7, 2010, shareholders approved, as a general authority, authorization to the board of directors to allot and issue, in their discretion, and for such purpose and on such terms as they may in their discretion determine, up to a maximum of 5 percent of the total number of common stock of 25 ZAR cents each in the issued share capital of the Company from time to time. Shareholders will be asked to renew this authority at the forthcoming annual general meeting to be held on May 11, 2011. At December 31, 2010, the number of shares of common stock placed under the control of the directors, after stock issued pursuant to the equity offering completed in September 2010, amounted to: | 920,204 | |||
The Company’s redeemable preference shares, held within the group, consist of the following: | ||||
A redeemable preference shares issued | 2,000,000 | |||
B redeemable preference shares issued | 778,896 | |||
A and B redeemable preference shares issued which are held by a wholly-owned subsidiary Eastvaal Gold Holdings Limited, may not be transferred and are redeemable from the realization of the assets relating to the Moab Lease area after cessation of mining operations in the area. The shares carry the right to receive dividends equivalent to the profits (net of royalty, ongoing capital expenditure and taxation) from operations in the area. No further A and B redeemable preference shares will be issued. |
The issues of common stock and the cancellations of E shares of common stock resulted in the following year-on-year movements in share capital and premium: |
2010 | 2009 | 2008 | ||||||||||||||||||||||
Number of | Number of | Number of | ||||||||||||||||||||||
$ | shares | $ | shares | $ | shares | |||||||||||||||||||
Stock issued as part of equity offering completed on September 15, 2010 | 773 | 18,140,000 | — | — | — | — | ||||||||||||||||||
Stock issued on the exercise of options/awards granted in terms of the share incentive scheme | 26 | 823,411 | 25 | 1,131,916 | 14 | 672,545 | ||||||||||||||||||
E shares cancelled and stock issued in accordance with the cancellation formula pertaining to the Employee Share Ownership Plan and Izingwe Holdings (1) | 12 | — | 3 | 1,181 | 3 | 94 | ||||||||||||||||||
Stock issued as part of equity offering, the funds of which were applied to initial 35 percent interest in the Kibali gold project | — | — | 280 | 7,624,162 | — | — | ||||||||||||||||||
Stock issued as part of rights offer completed on July 11, 2008, the funds of which were applied to reduce the hedge book | — | — | — | — | 1,666 | 69,470,442 | ||||||||||||||||||
Stock issued to acquire the remaining 33 percent shareholding in the Cripple Creek & Victor mine from Golden Cycle Gold Corporation | — | — | — | — | 118 | 3,181,198 | ||||||||||||||||||
Stock issued to purchase São Bento Gold Company Limited | — | — | — | — | 70 | 2,701,660 | ||||||||||||||||||
Stock transferred from the Employee Share Ownership Plan to exiting employees pursuant to the rules of the scheme | 10 | 230,921 | 7 | 189,787 | 2 | 57,761 | ||||||||||||||||||
821 | 19,194,332 | 315 | 8,947,046 | 1,873 | 76,083,700 | |||||||||||||||||||
(1) E Shares of common stock cancelled — Employee Share Ownership Plan | 708,872 | 171,943 | 173,289 | |||||||||||||||||||||
E Shares of common stock cancelled — Izingwe Holdings | 280,000 | — | — |
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23. | FAIR VALUE MEASUREMENTS | |
The FASB ASC guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: |
Level 1 - | Quoted prices in active markets for identical assets or liabilities. | |||
Level 2 - | Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |||
Level 3 - | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
The Company utilizes the market approach to measure fair value. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. | ||
The following table sets out the Company’s financial assets and (liabilities) measured on a recurring basis at fair value, by level within the hierarchy as at December 31, 2010 (in US Dollars, millions): | ||
Items measured at fair value on a recurring basis |
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Cash and cash equivalents | 575 | 575 | ||||||||||||||
Marketable equity securities | 124 | 124 | ||||||||||||||
Mandatory convertible bonds | (872 | ) | (872 | ) | ||||||||||||
Warrants on shares | 1 | 1 | ||||||||||||||
Option component of convertible bonds | (176 | ) | (176 | ) | ||||||||||||
The Company’s cash equivalents are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The cash instruments that are valued based on quoted market prices in active markets are primarily money market securities. Due to the short maturity of cash, carrying amounts approximate fair values. | ||
The Company’s marketable equity securities (refer to Note 16) are included in Other long-term assets in the Company’s consolidated balance sheet. They consist of investments in ordinary shares and are valued using quoted market prices in active markets and as such are classified within Level 1 of the fair value hierarchy. The fair value of the marketable equity securities is calculated as the quoted market price of the marketable equity security multiplied by the quantity of shares held by the Company. | ||
The Company’s mandatory convertible bonds (refer to Note 19) are included in Long-term debt at fair value in the Company’s consolidated balance sheet. The bonds are valued using quoted market prices in an active market and as such are classified within Level 1 of the fair value hierarchy. The fair value of the bonds is calculated as the quoted market price of the bond multiplied by the quantity of bonds issued by the Company. | ||
Options associated with marketable equity securities and the conversion features of convertible bonds are included as derivatives on the balance sheet. Such instruments are typically classified within Level 2 of the fair value hierarchy. | ||
The following inputs were used in the valuation of the conversion features of convertible bonds as at December 31: |
2010 | ||||
Market quoted bond price (percent) | 125.625 | |||
Fair value of bond excluding conversion feature (percent) | 101.600 | |||
Fair value of conversion feature (percent) | 24.025 | |||
Total issued bond value ($ million) | 732.5 | |||
The option component of the convertible bonds is calculated as the difference between the price of the bond including the option component (bond price) and the price excluding the option component (bond floor price). |
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23. | FAIR VALUE MEASUREMENTS(continued) | |
Items measured at fair value on a non-recurring basis |
2010 | ||||
$ | ||||
During 2010, the Company fully impaired and wrote-off various assets in South Africa, Continental Africa and the Americas, amongst others. This resulted in loss, which is included in earnings for the period, of: | 83 | |||
Long-lived assets of Tau Lekoa were written down to fair value less costs to sell as at June 30, 2010. Fair values of these assets were based on sales agreements with third parties and as such are classified within Level 2 of the fair value hierarchy. This resulted in a loss which is included in earnings of: | 8 | |||
Tau Lekoa was sold during the third quarter of 2010. | ||||
See “Note 5 — Costs and expenses: Impairment of assets” for additional information. | ||||
In 2010, the Company fully impaired its equity method investments in the Margaret Water Company and AGA — Polymetal Strategic Alliance. Refer to Note 16. This resulted in a loss, which is included in equity income in associates, of: | 24 |
The above items are summarized as follows: |
Total | ||||||||||||||||||||
Fair value | Level 1 | Level 2 | Level 3 | gain/(loss) | ||||||||||||||||
Description | $ | $ | $ | $ | $ | |||||||||||||||
Long-lived assets abandoned | — | (83 | ) | |||||||||||||||||
Long-lived assets held for sale | 61 | 61 | (8 | ) | ||||||||||||||||
Associates and equity accounted joint ventures | — | (24 | ) | |||||||||||||||||
61 | — | 61 | — | (115 | ) | |||||||||||||||
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24. | FINANCIAL RISK MANAGEMENT ACTIVITIES | |
In the normal course of its operations, the Company is exposed to gold and other commodity price, currency, interest rate, equity price, liquidity and non-performance risk, which includes credit risk. The Company is also exposed to certain by-product commodity price risk. In order to manage these risks, the Company may enter into transactions which make use of derivatives. The Company has developed a risk management process to facilitate, control and monitor these risks. The board has approved and monitors this risk management process, inclusive of documented treasury policies, counterpart limits, controlling and reporting structures. The Company does not acquire, hold or issue derivatives for speculative purposes. Although all derivative transactions executed by the Company serve to economically manage the Company’s risk to the market factors discussed above, not all such derivatives qualify for hedge accounting treatment, including instances whereby management has elected to not designate such derivatives as part of a qualifying hedge accounting relationship. | ||
The financial risk management activities objectives of the Company are as follows: |
• | Safeguarding the Company’s core earnings stream through the effective control and management of gold and other commodity price risk, foreign exchange risk and interest rate risk; | ||
• | Effective and efficient usage of credit facilities through the adoption of liquidity planning procedures; | ||
• | Ensuring that investment and hedging transactions are undertaken with creditworthy counterparts; and | ||
• | Ensuring that contracts and agreements related to risk management activities are coordinated, consistent throughout the Company and comply where necessary with relevant regulatory and statutory requirements. |
A number of products, including derivatives are used to satisfy these objectives. Contracts that meet the criteria for hedge accounting are designated as the hedging instruments hedging the variability of forecasted cash flows from the sale of production into the spot market and from capital expenditure denominated in a foreign currency and are classified as cash flow hedges under the FASB ASC guidance on derivatives and hedging. Cash flows related to these instruments designated as qualifying hedges are reflected in the consolidated statement of cash flows in the same category as the cash flow from the items being hedged. Accordingly, cash flows relating to the settlement of forward sale commodity derivatives contracts hedging the forecasted sale of production into the spot market as well as the forward sale currency derivative contracts hedging the forecasted capital expenditure, have been reflected upon settlement as a component of operating cash flows. The ineffective portion of cash flow hedges recognized in loss on non-hedge derivatives in the income statement during the year was $nil million (2009: $5 million; 2008: $8 million). The Company does not have any open cash flow hedge contracts relating to product sales or forecasted capital expenditure as at December 31, 2010 (2009: $37 million; 2008: $123 million). Cash flow hedge losses pertaining to capital expenditure of $3 million as at December 31, 2010 (2009: $4 million; 2008: $nil million) are expected to be reclassified from accumulated other comprehensive income and recognized as an adjustment to depreciation expense until 2017. | ||
A loss on non-hedge derivatives of $703 million was recorded in 2010 (2009: $1,452 million; 2008: $258 million). See “Note 5 — Cost and expenses: Non-hedge derivative loss and movement on bonds” for additional information. | ||
Gold price risk management activities | ||
Gold price risk arises from the risk of an adverse effect of current or future earnings resulting from fluctuations in the price of gold. During the year the Company utilized derivatives as part of its hedging of the risk. In order to provide financial exposure to the rising spot price of gold and the potential for enhanced cash-flow generation the Company completed its final tranche of the hedge buy-back program and settled all forward gold and foreign exchange contracts that had been used by the Company in the past to manage those risks. At year end there were no net forward sales contracts (2009: 571kg; 2008: 39,990kg), net call options sold (2009: 120,594kg; 2008: 146,542kg) and net put options sold (2009: 27,071kg; 2008: 16,963kg). | ||
The fair value of early termination options as at December 31, 2010 amounted to $nil million (2009: $nil million; 2008: $498 million) as these options were part of the hedge buy-back effected during July 2009. | ||
The mix of derivative instruments, the volume of production hedged and the tenor of the hedge book is continuously reviewed in light of changes in operational forecasts, market conditions and the Company’s hedging policy as set by the board of directors. |
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24. | FINANCIAL RISK MANAGEMENT ACTIVITIES(continued) |
Elimination of hedge book | ||
During 2008, the Company communicated a board approved strategy to begin reducing its outstanding gold derivatives position in order to be more exposed to spot gold prices. During 2010, the Company completed the final phase of this strategy and eliminated its gold hedge book. See “Note 5 — Cost and expenses: Non-hedge derivative loss and movement on bonds” for additional information relating to the final 2010 hedge book elimination and the 2008 and 2009 hedge buy-back transactions, including the impact thereof on the 2008, 2009 and 2010 consolidated financial statements. | ||
The results of operations and cash flows for 2008, 2009 and 2010 were adversely impacted given the early cash settlement of non-hedge derivatives and previously designated NPSE contracts with low contracted sales prices, respectively, committed ounces have been fully eliminated as at December 31, 2010 (December 31, 2009: 3.90 million committed ounces; December 31, 2008: 5.99 million committed ounces). The Company now has full exposure to the spot price of gold. | ||
Net delta open hedge position as at December 31, 2010 | ||
As at December 31, 2010 the Company had no outstanding commitments against future production as a result of the elimination of the hedge book. | ||
As of December 31, 2009, the hedge book reflected a net delta tonnage position of 3.49 million ounces (108 tonnes). | ||
At December 31, 2009, the marked-to-market value of all derivatives, irrespective of accounting designation, making up the hedge position was negative $2.18 billion based on a gold price of $1,102 per ounce, exchange rates of $1 = R7.4350 and A$1 = $0.8967 and the market interest rates and volatilities prevailing at that date. | ||
These marked-to-market valuations are not predictive of the future value of the hedge position, nor of the future impact on the revenue of the Company. The valuation represents the theoretical cost of exiting all hedge contracts at the time of valuation, at market prices and rates available at that time. | ||
Foreign exchange price risk protection agreements | ||
The Company enters into currency forward exchange and currency option contracts to hedge certain anticipated transactions denominated in foreign currencies. The objective of the Company’s foreign currency hedging activities is to protect the Company from the risk that the eventual cash flows resulting from transactions denominated in US dollars will be adversely affected by changes in exchange rates. | ||
As at December 31, 2010 and 2009, the Company had no open forward exchange or currency option contracts in its currency hedge position. |
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24. | FINANCIAL RISK MANAGEMENT ACTIVITIES(continued) |
Interest rate and liquidity risk | ||
Fluctuations in interest rates impacts interest paid and received on the short-term cash investments and financing activities, giving rise to interest rate risk. | ||
In the ordinary course of business, the Company receives cash from the proceeds of its gold sales and is required to fund working capital requirements. This cash is managed to ensure surplus funds are invested in a manner to achieve market related returns while minimizing risks. | ||
The Company is able to actively source financing at competitive rates. The counterparts are financial and banking institutions and their credit ratings are regularly monitored by the Company. |
Cash and loans advanced maturity profile |
2010 | 2009 | |||||||||||||||||||||||||||||||||||
Fixed rate | Floating rate | Fixed rate | Floating rate | |||||||||||||||||||||||||||||||||
Investment | Investment | Investment | Investment | |||||||||||||||||||||||||||||||||
Amount | Effective | Amount | Effective | Amount | Effective | Amount | Effective | |||||||||||||||||||||||||||||
Maturity date | Currency | (million) | rate % | (million) | rate % | (million) | rate % | (million) | rate % | |||||||||||||||||||||||||||
All less than one year | USD | 13 | 0.20 | 171 | 0.19 | 506 | 0.29 | 178 | 0.13 | |||||||||||||||||||||||||||
ZAR | 969 | 5.58 | 57 | 4.64 | 1,135 | 7.03 | 839 | 6.38 | ||||||||||||||||||||||||||||
AUD | 42 | 4.45 | 25 | 4.44 | — | — | 13 | 3.52 | ||||||||||||||||||||||||||||
EUR | — | — | 3 | 1.00 | — | — | 1 | 0.50 | ||||||||||||||||||||||||||||
CAD | — | — | 2 | 0.20 | — | — | 1 | 0.08 | ||||||||||||||||||||||||||||
HKD | — | — | — | — | — | — | 1 | 0.01 | ||||||||||||||||||||||||||||
BRL | — | — | 30 | 8.90 | — | — | 152 | 10.20 | ||||||||||||||||||||||||||||
ARS | — | — | 2 | 9.00 | — | — | 4 | 10.23 | ||||||||||||||||||||||||||||
NAD | 102 | 5.00 | 207 | 5.00 | — | — | — | — | ||||||||||||||||||||||||||||
Borrowings maturity profile |
Between | Between | |||||||||||||||||||||||||||||||||||
Within one year | one and two years | two and five years | After five years | Total | ||||||||||||||||||||||||||||||||
Borrowings | Effective | Borrowings | Effective | Borrowings | Effective | Borrowings | Effective | Borrowings | ||||||||||||||||||||||||||||
Amount | Rate | Amount | Rate | Amount | Rate | Amount | Rate | Amount | ||||||||||||||||||||||||||||
Currency | (million) | % | (million) | % | (million) | % | (million) | % | (million) | |||||||||||||||||||||||||||
$ | 26 | 4.7 | 5 | 5.5 | 1,560 | 4.9 | 994 | 5.7 | 2,585 | |||||||||||||||||||||||||||
ZAR | 703 | 6.4 | — | — | 20 | 9.8 | 237 | 9.8 | 960 | |||||||||||||||||||||||||||
BRL | 3 | 4.7 | 5 | 5.1 | 2 | 6.0 | — | — | 10 | |||||||||||||||||||||||||||
Interest rate risk |
Fixed for between one and three | Fixed for greater than three | |||||||||||||||||||||||||||
Fixed for less than one yearthree years | years | years | Total | |||||||||||||||||||||||||
Borrowings | Effective | Borrowings | Effective | Borrowings | Effective | Borrowings | ||||||||||||||||||||||
Amount | Rate | Amount | Rate | Amount | Rate | amount | ||||||||||||||||||||||
Currency | (million) | % | (million) | % | (million) | % | (million) | |||||||||||||||||||||
$ | 26 | 4.7 | 880 | 6.0 | 1,679 | 4.8 | 2,585 | |||||||||||||||||||||
ZAR | 703 | 6.4 | 7 | 9.8 | 250 | 9.8 | 960 | |||||||||||||||||||||
BRL | 3 | 4.7 | 7 | 5.3 | — | — | 10 | |||||||||||||||||||||
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24. | FINANCIAL RISK MANAGEMENT ACTIVITIES(continued) | |
Non-performance risk | ||
Realization of contracts is dependent upon counterparts’ performance. The Company has not obtained collateral or other security to support to financial instruments subject to non-performance risk, but the credit standing of counterparts was monitored on regular basis throughout the year. The Company spreads it business over a number of financial and banking institutions to minimize the risk of potential non-performance risk. Furthermore, the approval process of counterparts and the limits applied to each counterpart were monitored by the board of directors. Where possible, ISDA netting agreements were put into place by management. | ||
The combined maximum credit risk exposure at balance sheet date amounts to $1 million (2009: $335 million). Credit risk exposure netted by open derivative positions with counterparts was $nil million (2009: $104 million). No set-off is applied to balance sheet amounts due to the different maturity profiles of assets and liabilities. | ||
The combined maximum credit risk exposure of the Company as at December 31, 2010 is as follows. |
December 31, | ||||
2010 | ||||
$ | ||||
Warrants on shares | 1 | |||
1 | ||||
The fair value of derivative assets and liabilities reflects non-performance risk relating to the counterparts and the Company, respectively. | ||
Fair value of financial instruments | ||
The estimated fair values of financial instruments are determined at discrete points in time based on relevant market information. The estimated fair values of the Company’s financial instruments, as measured at December 31, 2010 and 2009, are as follows (assets (liabilities)): |
December 31, 2010 | December 31, 2009 | |||||||||||||||
Carrying | Carrying | |||||||||||||||
amount | Fair value | amount | Fair value | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Cash and cash equivalents | 575 | 575 | 1,100 | 1,100 | ||||||||||||
Restricted cash | 43 | 43 | 65 | 65 | ||||||||||||
Short-term debt | (135 | ) | (135 | ) | (1,292 | ) | (1,292 | ) | ||||||||
Long-term debt | (1,730 | ) | (2,059 | ) | (667 | ) | (889 | ) | ||||||||
Long-term debt at fair value | (872 | ) | (872 | ) | — | — | ||||||||||
Derivatives | (175 | ) | (175 | ) | (2,366 | ) | (2,366 | ) | ||||||||
Marketable equity securities — available for sale | 124 | 124 | 111 | 111 | ||||||||||||
Marketable debt securities — held to maturity | 13 | 14 | 10 | 10 | ||||||||||||
Non-marketable assets — held to maturity | 2 | 2 | 2 | 2 | ||||||||||||
Non-marketable debt securities — held to maturity | 89 | 89 | 48 | 48 |
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24. | FINANCIAL RISK MANAGEMENT ACTIVITIES(continued) | |
The following methods and assumptions were used to estimate the fair value of each class of financial instrument: | ||
Cash restricted for use, cash and cash equivalents and short-term debt | ||
The carrying amounts approximate fair value because of the short-term duration of these instruments. | ||
Long-term debt | ||
The mandatory convertible bonds are carried at fair value. The fair value of the convertible and rated bonds are shown at their quoted market value. Other long-term debt re-prices on a short-term floating rate basis, and accordingly the carrying amount approximates to fair value. | ||
Derivatives | ||
The fair value of volatility-based instruments (i.e. options) are estimated based on market prices, volatilities, credit risk and interest rates for the periods under review. The Company used the Black-Scholes option pricing formula to value commodity option contracts. The fair value of forward sales and purchases were estimated based on the quoted market prices and credit risk for the contracts at December 31, 2009. | ||
Investments | ||
Marketable equity securities classified as available-for-sale are carried at fair value. Marketable debt securities classified as held to maturity are measured at amortized cost. Non-marketable assets classified as held to maturity are measured at amortized cost. The fair value of marketable debt securities and non-marketable assets has been calculated using market interest rates. Investments in non-marketable debt securities classified as held to maturity are measured at amortized cost. The cost method investment is carried at cost. There is no active market for the investment and the fair value cannot be reliably measured. | ||
The following is the fair value of the derivative (liabilities)/assets split by accounting designation: |
December 31, 2010 | ||||||||||||||||
Assets | ||||||||||||||||
Cash flow | ||||||||||||||||
Hedge | Non-hedge | |||||||||||||||
Balance Sheet location | accounted | accounted | Total | |||||||||||||
$ | $ | $ | ||||||||||||||
Warrants on shares | Current assets — derivatives | — | 1 | 1 | ||||||||||||
Total derivatives | — | 1 | 1 | |||||||||||||
December 31, 2010 | ||||||||||||||||
Liabilities | ||||||||||||||||
Cash flow | ||||||||||||||||
Hedge | Non-hedge | |||||||||||||||
Balance Sheet location | accounted | accounted | Total | |||||||||||||
$ | $ | $ | ||||||||||||||
Option component of convertible bonds | Non-current liabilities — derivatives | — | (176 | ) | (176 | ) | ||||||||||
Total derivatives | — | (176 | ) | (176 | ) | |||||||||||
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24. | FINANCIAL RISK MANAGEMENT ACTIVITIES(continued) |
December 31, 2009 | ||||||||||||||||
Assets | ||||||||||||||||
Cash flow | ||||||||||||||||
Hedge | Non-hedge | |||||||||||||||
Balance Sheet location | accounted | accounted | Total | |||||||||||||
$ | $ | $ | ||||||||||||||
Forward sales type agreements — commodity | Current assets — derivatives | — | 283 | 283 | ||||||||||||
Option contracts — commodity | Current assets — derivatives | — | 47 | 47 | ||||||||||||
Total hedging contracts | — | 330 | 330 | |||||||||||||
Warrants on shares | Non-current assets — derivatives | — | 5 | 5 | ||||||||||||
Total derivatives | — | 335 | 335 | |||||||||||||
December 31, 2009 | ||||||||||||||||
Liabilities | ||||||||||||||||
Cash flow | ||||||||||||||||
Hedge | Non-hedge | |||||||||||||||
Balance Sheet location | accounted | accounted | Total | |||||||||||||
$ | $ | $ | ||||||||||||||
Forward sales type agreements — commodity | Current liabilities — derivatives | (37 | ) | (441 | ) | (478 | ) | |||||||||
Option contracts — commodity | Current liabilities — derivatives | — | (2,034 | ) | (2,034 | ) | ||||||||||
Interest rate swaps — Gold | Current liabilities — derivatives | — | (13 | ) | (13 | ) | ||||||||||
Total hedging contracts | (37 | ) | (2,488 | ) | (2,525 | ) | ||||||||||
Embedded derivatives | Non-current liabilities — derivatives | — | (1 | ) | (1 | ) | ||||||||||
Option component of convertible bonds | Non-current liabilities — derivatives | — | (175 | ) | (175 | ) | ||||||||||
Total derivatives | (37 | ) | (2,664 | ) | (2,701 | ) | ||||||||||
At December 31, 2010 the Company had no open derivative positions in its hedge book. The impact of credit risk adjustment totaled $150 million at December 31, 2009. |
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24. | FINANCIAL RISK MANAGEMENT ACTIVITIES(continued) | |
Non-hedge derivative gain/(loss) recognized |
Year ended December 31, 2010 | ||||||||
Location of gain/(loss) in income statement | $ | |||||||
Realized | ||||||||
Forward sales type agreements — commodity | Non-hedge derivative gain/(loss) and movement on bonds | (377 | ) | |||||
Option contracts — commodity | Non-hedge derivative gain/(loss) and movement on bonds | (2,573 | ) | |||||
Forward sales agreements — currency | Non-hedge derivative gain/(loss) and movement on bonds | (13 | ) | |||||
Option contracts — currency | Non-hedge derivative gain/(loss) and movement on bonds | 3 | ||||||
Interest rate swaps — Gold | Non-hedge derivative gain/(loss) and movement on bonds | (15 | ) | |||||
(2,975 | )(1) | |||||||
Unrealized | ||||||||
Forward sales type agreements — commodity | Non-hedge derivative gain/(loss) and movement on bonds | 265 | ||||||
Option contracts — commodity | Non-hedge derivative gain/(loss) and movement on bonds | 1,999 | ||||||
Interest rate swaps — Gold | Non-hedge derivative gain/(loss) and movement on bonds | 13 | ||||||
Option component of convertible bonds | Non-hedge derivative gain/(loss) and movement on bonds | (1 | ) | |||||
Embedded derivatives | Non-hedge derivative gain/(loss) and movement on bonds | 1 | ||||||
Warrants on shares | Non-hedge derivative gain/(loss) and movement on bonds | (5 | ) | |||||
2,272 | ||||||||
Loss on non-hedge derivatives | (703 | ) | ||||||
(1) | Includes $2,698 million loss related to the final tranche of the accelerated hedge buy-back. |
Year ended December 31, 2009 | ||||||||
Location of gain/(loss) in income statement | $ | |||||||
Realized | ||||||||
Forward sales type agreements — commodity | Non-hedge derivative gain/(loss) and movement on bonds | (535 | ) | |||||
Option contracts — commodity | Non-hedge derivative gain/(loss) and movement on bonds | (144 | ) | |||||
Forward sales agreements — currency | Non-hedge derivative gain/(loss) and movement on bonds | 107 | ||||||
Option contracts — currency | Non-hedge derivative gain/(loss) and movement on bonds | 12 | ||||||
Interest rate swaps — Gold | Non-hedge derivative gain/(loss) and movement on bonds | 16 | ||||||
(544 | )(1) | |||||||
Unrealized | �� | |||||||
Forward sales type agreements — commodity | Non-hedge derivative gain/(loss) and movement on bonds | (188 | ) | |||||
Option contracts — commodity | Non-hedge derivative gain/(loss) and movement on bonds | (648 | ) | |||||
Forward sales agreements — currency | Non-hedge derivative gain/(loss) and movement on bonds | (15 | ) | |||||
Option contracts — currency | Non-hedge derivative gain/(loss) and movement on bonds | (3 | ) | |||||
Interest rate swaps — Gold | Non-hedge derivative gain/(loss) and movement on bonds | (25 | ) | |||||
Option component of convertible bonds | Non-hedge derivative gain/(loss) and movement on bonds | (33 | ) | |||||
Embedded derivatives | Non-hedge derivative gain/(loss) and movement on bonds | (1 | ) | |||||
Warrants on shares | Non-hedge derivative gain/(loss) and movement on bonds | 5 | ||||||
(908 | ) | |||||||
Loss on non-hedge derivatives | (1,452 | ) | ||||||
(1) | Includes $797 million related to the accelerated hedge buy-back. | |
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24. | FINANCIAL RISK MANAGEMENT ACTIVITIES(continued) | |
Other comprehensive income |
Year ended December 31, 2010 | ||||||||||||
Cash flow | ||||||||||||
hedges, before | Cash flow hedges removed from | |||||||||||
tax | equity, before tax | Hedge ineffectiveness, before tax | ||||||||||
$ | $ | $ | ||||||||||
Amount of | ||||||||||||
Gain/(loss) | Location of | (gain)/loss | ||||||||||
recognized in | (gain)/loss | reclassified from | Amount of | |||||||||
accumulated | reclassified from | accumulated other | (gain)/loss | |||||||||
other | accumulated other | comprehensive | recognized | |||||||||
comprehensive | comprehensive | income into | Location of (gain)/loss | in income | ||||||||
income (effective | income into income | income (effective | recognized in income | (ineffective | ||||||||
portion) | (effective portion) | portion) | (ineffective portion) | portion) | ||||||||
Forward sales type agreements — commodity | — | Product sales | 52 | Non-hedge derivatives gain/ (loss) and movement on bonds | — | |||||||
— | 52 | — | ||||||||||
Year ended December 31, 2009 | ||||||||||||||||
Cash flow | ||||||||||||||||
hedges, before | Cash flow hedges removed from | |||||||||||||||
tax | equity,before tax | Hedge ineffectiveness, before tax | ||||||||||||||
$ | $ | $ | ||||||||||||||
Amount of | ||||||||||||||||
Gain/(loss) | Location of | (gain)/loss | ||||||||||||||
recognized in | (gain)/loss | reclassified from | Amount of | |||||||||||||
accumulated | reclassified from | accumulated other | (gain)/loss | |||||||||||||
other | accumulated other | comprehensive | recognized | |||||||||||||
comprehensive | comprehensive | income into | Location of (gain)/loss | in income | ||||||||||||
income (effective | income into income | income (effective | recognized in income | (ineffective | ||||||||||||
portion) | (effective portion) | portion) | (ineffective portion) | portion) | ||||||||||||
Forward sales type agreements — commodity | Non-hedge derivatives gain/(loss) and movement on bonds | |||||||||||||||
(16 | ) | Product sales | 137 | 5 | ||||||||||||
Forward sales agreements - currency | Non-hedge derivatives gain/(loss) and movement on bonds | |||||||||||||||
(1 | ) | Depreciation | — | — | ||||||||||||
(17 | ) | 137 | 5 | |||||||||||||
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Other comprehensive income | |||||||||||||||||
Accumulated other | Accumulated other | ||||||||||||||||
comprehensive income | Changes in fair | comprehensive income | |||||||||||||||
as of January 1, | value recognized | Reclassification | as of December 31, | ||||||||||||||
2010 | in 2010 | adjustments | 2010 | ||||||||||||||
$ | $ | $ | $ | ||||||||||||||
Derivatives designated as | |||||||||||||||||
Gold sales | (52 | ) | — | 52 | — | ||||||||||||
Capital expenditure | (3 | ) | — | — | (3 | ) | |||||||||||
Before tax totals | (55 | ) | — | 52 | (3 | )(1) | |||||||||||
After tax totals | (22 | ) | — | 20 | (2 | ) | |||||||||||
Accumulated other | ||||||||||||||||
Accumulated other | Changes in fair | comprehensive income | ||||||||||||||
comprehensive income | value recognized | Reclassification | as of December 31, | |||||||||||||
as of January 1, 2009 | in 2009 | adjustments | 2009 | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Derivatives designated as | ||||||||||||||||
Gold sales | (178 | ) | (16 | ) | 142 | (52 | ) | |||||||||
Capital expenditure | (2 | ) | (2 | ) | 1 | (3 | ) | |||||||||
Before tax totals | (180 | ) | (18 | ) | 143 | (55 | )(1) | |||||||||
After tax totals | (112 | ) | (13 | ) | 103 | (22 | ) | |||||||||
(1) | Includes adjustment for cumulative net translation differences of $nil million (2009: $18 million) resulting from the revaluation and settlement of non US dollar denominated cash flow hedge contracts. |
2010 | ||||||||||||
Total | Assets | Liabilities | ||||||||||
$ | $ | $ | ||||||||||
Amounts to mature within twelve months of balance sheet date | 1 | 1 | — | |||||||||
Amounts maturing between one and two years | — | — | — | |||||||||
Amounts maturing between two and five years | (176 | ) | — | (176 | ) | |||||||
Total | (175 | ) | 1 | (176 | ) | |||||||
Total | Assets | Liabilities | ||||||||||
$ | $ | $ | ||||||||||
Amounts to mature within twelve months of balance sheet date | (2,195 | ) | 330 | (2,525 | ) | |||||||
Amounts maturing between one and two years | 5 | 5 | — | |||||||||
Amounts maturing between two and five years | (175 | ) | — | (175 | ) | |||||||
Amounts to mature thereafter | (1 | ) | — | (1 | ) | |||||||
Total | (2,366 | ) | 335 | (2,701 | ) | |||||||
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24. | FINANCIAL RISK MANAGEMENT ACTIVITIES(continued) | |
Sensitivity analysis | ||
Derivatives | ||
A principal part of the Company’s management of risk is to monitor the sensitivity of derivative positions in the hedge book to changes in the underlying factors, including commodity prices, foreign exchange rates and interest rates under varying scenarios. There are no open hedge positions as a result of the hedge book elimination during 2010. Additionally the Company’s management of risk is to monitor the sensitivity of the convertible bonds to changes in AngloGold Ashanti Limited’s share price and warrants on shares. | ||
The following table discloses the approximate sensitivities, in US dollars, of the warrants on shares and the convertible bonds to key underlying factors at December 31, 2010 (actual changes in the timing and amount of the following variables may differ from the assumed changes below). |
2010 | ||||||||||||||||
Cash flow | ||||||||||||||||
Change in | hedge | Non-hedge | Total change in | |||||||||||||
underlying | accounted | accounted | fair value | |||||||||||||
factor (+) | $ | $ | $ | |||||||||||||
Convertible bonds | ||||||||||||||||
AngloGold Ashanti Limited share price (US$) | Spot (+$1) | — | (10 | ) | (10 | ) | ||||||||||
Warrants on shares | ||||||||||||||||
B2Gold Corporation share price (C$) | Spot (+C$0.25) | — | 1 | 1 | ||||||||||||
2010 | ||||||||||||||||
Cash flow | ||||||||||||||||
Change in | hedge | Non-hedge | Total change in | |||||||||||||
underlying | accounted | accounted | fair value | |||||||||||||
factor (-) | $ | $ | $ | |||||||||||||
Convertible bonds | ||||||||||||||||
AngloGold Ashanti Limited share price (US$) | Spot (-$1) | — | 9 | 9 | ||||||||||||
Warrants on shares | ||||||||||||||||
B2Gold Corporation share price (C$) | Spot (-C$0.25) | — | — | — | ||||||||||||
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24. | FINANCIAL RISK MANAGEMENT ACTIVITIES(continued) | |
Mandatory convertible bonds | ||
The mandatory convertible bond valuation is primarily linked to the AngloGold Ashanti Limited share price traded on the New York Stock Exchange (NYSE) and fluctuates with reference to the NYSE share price and market interest rates. A change of $1 in the AngloGold Ashanti Limited share price will generally impact the value of the mandatory convertible bond price in a stable interest environment by $0.83. | ||
Foreign exchange risk | ||
Foreign exchange risk arises on financial instruments that are denominated in a foreign currency. The following table discloses the approximate foreign exchange risk sensitivities of debt at December 31, 2010 (actual changes in the timing and amount of the following variables may differ from the assumed changes below). |
2010 | ||||||||
Change in | ||||||||
borrowings | ||||||||
Change in | total | |||||||
exchange rate | $ | |||||||
Debt | ||||||||
ZAR denominated (R/$) | Spot (+R1) | (19 | ) | |||||
BRL denominated (BRL/$) | Spot (+BRL0.25) | (1 | ) | |||||
2010 | ||||||||
Change in | ||||||||
borrowings | ||||||||
Change in | total | |||||||
exchange rate | $ | |||||||
Debt | ||||||||
ZAR denominated (R/$) | Spot (-R1) | 26 | ||||||
BRL denominated (BRL/$) | Spot (-BRL0.25) | 1 | ||||||
25. | ADDITIONAL CASH FLOW INFORMATION |
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Reported in the consolidated statements of cash flows: | ||||||||||||
Interest paid | 115 | 111 | 93 | |||||||||
Taxation paid | 188 | 147 | 125 | |||||||||
Non-cash investing and financing items not reported in the consolidated statements of cash flows: | ||||||||||||
Shares issued as part of Golden Cycle Gold Corporation acquisition | — | — | 118 | |||||||||
Shares issued to acquire São Bento Gold Company Limited | — | — | 70 | |||||||||
Exercise of share entitlements | 43 | 20 | 16 | |||||||||
Non-cash operating items not reported in the consolidated statements of cash flows: | ||||||||||||
Foreign exchange transaction gain(1) | 2 | 103 | 7 | |||||||||
(1) Foreign exchange transaction gain included in Interest, dividends and other amounts to: | 3 | 112 | 4 |
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26. | PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS | |
The provision for pension and post-retirement medical funding represents the provision for health care and pension benefits for employees, retired employees and their dependants. | ||
Defined benefit plans | ||
The retirement schemes as at December 31, 2010, 2009 and 2008, consist of the following which reflects the following provision values: |
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
AngloGold Ashanti Pension Fund (asset)/liability | — | (5 | ) | 11 | ||||||||
Post-retirement medical scheme for AngloGold Ashanti South Africa employees | 179 | 149 | 115 | |||||||||
Other defined benefit plans | 12 | 10 | 11 | |||||||||
Sub total | 191 | 154 | 137 | |||||||||
Transferred to other non-current assets. Refer to Note 16. | ||||||||||||
AngloGold Ashanti Pension Fund | — | 5 | — | |||||||||
Post-retirement medical scheme for Rand Refinery employees | 3 | 2 | 2 | |||||||||
Short-term portion transferred to other current liabilities. Refer to Note 18. | (14 | ) | (14 | ) | (13 | ) | ||||||
Total provision classified as a non-current liability | 180 | 147 | 126 | |||||||||
South Africa defined benefit pension fund | ||
The plan is evaluated by independent actuaries on an annual basis as at December 31. The valuation as at December 31, 2010 was completed at the beginning of 2011. The most recent regulatory valuation effective December 31, 2008 was completed in March 2010. The next regulatory valuation will have an effective date no later than December 31, 2011. | ||
All South African pension funds are governed by the Pension Funds Act of 1956 as amended. |
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26. | PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS(continued) | |
Information with respect to the defined benefit fund, which includes benefits for AngloGold Ashanti employees, for the year ended December 31, is set forth in the table below: |
Pension benefits | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Change in benefit obligation | ||||||||||||
Benefit obligation at January 1, | 269 | 199 | 257 | |||||||||
Service cost | 7 | 6 | 6 | |||||||||
Interest cost | 25 | 16 | 17 | |||||||||
Plan participants’ contributions | 2 | 2 | 2 | |||||||||
Actuarial loss/(gain) | 21 | (2 | ) | 16 | ||||||||
Benefits paid | (28 | ) | (8 | ) | (24 | ) | ||||||
Translation | 38 | 56 | (75 | ) | ||||||||
Benefit obligation at December 31, | 334 | 269 | 199 | |||||||||
Change in plan assets | ||||||||||||
Fair value of plan assets at January 1, | 274 | 188 | 293 | |||||||||
Actual return on plan assets | 40 | 32 | (7 | ) | ||||||||
Company contributions | 8 | 5 | 5 | |||||||||
Plan participants’ contributions | 2 | 2 | 2 | |||||||||
Benefits paid | (28 | ) | (8 | ) | (24 | ) | ||||||
Translation | 38 | 55 | (81 | ) | ||||||||
Fair value of plan assets at December 31, | 334 | 274 | 188 | |||||||||
Funded/(Unfunded) status at end of year | — | 5 | (11 | ) | ||||||||
Net amount recognized | — | 5 | (11 | ) | ||||||||
Components of net periodic benefit cost | ||||||||||||
Service cost | 7 | 6 | 6 | |||||||||
Interest cost | 25 | 16 | 17 | |||||||||
Actuarial gains and losses | 10 | (14 | ) | 49 | ||||||||
Expected return on assets | (29 | ) | (20 | ) | (26 | ) | ||||||
Net periodic benefit cost | 13 | (12 | ) | 46 | ||||||||
Accumulated benefit obligation at December 31, | 290 | 230 | 170 | |||||||||
Assumptions | ||||||||||||
Weighted-average assumptions used to determine benefit obligations at December 31, | ||||||||||||
Discount rate | 8.50 | % | 9.25 | % | 7.25 | % | ||||||
Rate of compensation increase | 7.25 | % | 7.50 | % | 5.25 | % | ||||||
Weighted-average assumptions used to determine the net periodic benefit cost for the years ended December 31, | ||||||||||||
Discount rate | 8.50 | % | 9.25 | % | 7.25 | % | ||||||
Expected long-term return on plan assets | 9.99 | % | 10.63 | % | 9.28 | % | ||||||
Rate of compensation increase(1) | 7.25 | % | 7.50 | % | 5.25 | % | ||||||
Pension increase | 4.73 | % | 4.95 | % | 3.60 | % | ||||||
(1)Short-term compensation rate increase | 7.50 | % | 7.00 | % | 10.00 | % | ||||||
Long-term compensation rate increase | 7.25 | % | 7.50 | % | 5.25 | % |
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26. | PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS(continued) | |
The expected long-term return on plan assets is determined using the after tax return of RSA Government long bond yields as a guide. |
Pension benefits | ||||||||
2010 | 2009 | |||||||
% | % | |||||||
Plan assets | ||||||||
AngloGold Ashanti’s pension plan asset allocations at December 31, 2010 and 2009, by asset category are as follows: | ||||||||
Asset category | ||||||||
Equity securities | 60 | % | 60 | % | ||||
Debt securities | 36 | % | 32 | % | ||||
Other | 4 | % | 8 | % | ||||
100 | % | 100 | % | |||||
Fair value of plan assets | ||
The following table sets out the Company’s plan assets measured at fair value, by level within the hierarchy as at December 31, 2010 (in US Dollars, millions): |
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Domestic equity security | 150 | 150 | ||||||||||||||
Foreign equity securities | 50 | 50 | ||||||||||||||
Domestic fixed interest bonds | 95 | 95 | ||||||||||||||
Foreign fixed interest bonds | 13 | 13 | ||||||||||||||
Real estate investment trust | 4 | 4 | ||||||||||||||
Cash | 11 | 11 | ||||||||||||||
Unlisted specialized credit | 11 | 11 | ||||||||||||||
Fair value of level 1 plan assets is based on quoted market prices. | ||
Fair value of level 2 plan assets is based on market interest rates (for fixed rate investments) accrued interest and credit risk ratings. |
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26. | PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS(continued) | |
Investment policy | ||
The Trustees have adopted a long-term horizon in formulating the Fund’s investment strategy, which is consistent with the term of the Fund’s liabilities. The investment strategy aims to provide a reasonable return relative to inflation across a range of market conditions. | ||
The Trustees have adopted different strategic asset allocations for the assets backing pensioner and active member liabilities. The strategic asset allocation defines what proportion of the Fund’s assets should be invested in each major asset class. The Trustees have then selected specialist investment managers to manage the assets in each asset class according to specific performance mandates instituted by the Trustees. | ||
The Trustees have also put in place a detailed Statement of Investment Principles that sets out the Fund’s overall investment philosophy and strategy. | ||
Fund returns are calculated on a monthly basis, and the performance of the managers and Fund as a whole is formally reviewed by the Fund’s Investment Sub-Committee at least every six months. |
2010 | 2009 | |||||||||||||||||||||||
No. of | Percentage of | Fair Value | No. of | Percentage of | Fair Value | |||||||||||||||||||
Shares | total assets | $ | Shares | total assets | $ | |||||||||||||||||||
Related parties | ||||||||||||||||||||||||
Investments held in related parties are summarized as follows: | ||||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||
AngloGold Ashanti Limited | 119,758 | 1.8 | % | 6 | 296,410 | 4.5 | % | 12 | ||||||||||||||||
Other investments exceeding 5% of total plan assets | ||||||||||||||||||||||||
Equities | ||||||||||||||||||||||||
Sasol Limited | — | — | — | 424,680 | 6.2 | % | 17 | |||||||||||||||||
SABMiller Plc | — | — | — | 759,600 | 8.0 | % | 22 | |||||||||||||||||
Bonds | ||||||||||||||||||||||||
IFM Corporate Bond Unit Trust | 267,975,059 | 12.2 | % | 41 | 158,630,977 | 7.3 | % | 20 | ||||||||||||||||
Allan Gray Orbis Global Equity Fund | 243,210 | 9.0 | % | 30 | 312,715 | 13.0 | % | 36 | ||||||||||||||||
71 | 95 | |||||||||||||||||||||||
Cash flows |
$ | ||||
Contributions | ||||
Expected Company contribution to its pension plan in 2011 | 7 | |||
Estimated future benefit payments | ||||
The following pension benefit payments, which reflect the expected future service, as appropriate, are expected to be paid: | ||||
2011 | 25 | |||
2012 | 25 | |||
2013 | 25 | |||
2014 | 26 | |||
2015 | 26 | |||
2016 — 2020 | 133 |
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26. | PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS(continued) | |
South Africa post-retirement medical benefits | ||
The provision for post-retirement medical funding represents the provision for health care benefits for employees and retired employees and their registered dependants. The post-retirement benefit costs are assessed in accordance with the advice of independent professionally qualified actuaries. The actuarial method used is the projected unit credit funding method. This scheme is unfunded. The last actuarial valuation was performed at December 31, 2010. | ||
Information with respect to the defined benefit liability, which includes post-retirement medical benefits for AngloGold Ashanti South Africa employees, for the year ended December 31, is set forth in the table below: |
Other benefits | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Change in benefit obligation | ||||||||||||
Benefit obligation at January 1, | 149 | 115 | 168 | |||||||||
Service cost | 1 | — | 1 | |||||||||
Interest cost | 13 | 9 | 11 | |||||||||
Benefits paid | (14 | ) | (10 | ) | (11 | ) | ||||||
Actuarial loss/(gain) | 10 | 4 | (8 | ) | ||||||||
Translation | 20 | 31 | (46 | ) | ||||||||
Benefit obligation at December 31, | 179 | 149 | 115 | |||||||||
Unfunded status at end of year | (179 | ) | (149 | ) | (115 | ) | ||||||
Net amount recognized | (179 | ) | (149 | ) | (115 | ) | ||||||
Components of net periodic benefit cost | ||||||||||||
Service cost | 1 | — | 1 | |||||||||
Interest cost | 13 | 9 | 11 | |||||||||
Actuarial gains and losses | 10 | 4 | (8 | ) | ||||||||
24 | 13 | 4 | ||||||||||
The assumptions used in calculating the above amounts are: | ||||||||||||
Discount rate | 8.50 | % | 9.25 | % | 7.25 | % | ||||||
Expected increase in health care costs | 7.60 | % | 7.00 | % | 5.50 | % | ||||||
Assumed health care cost trend rates at December 31, | ||||||||||||
Health care cost trend assumed for next year | 7.60 | % | 7.00 | % | 5.50 | % | ||||||
Rate to which the cost trend is assumed to decline (ultimate trend rate) | 7.60 | % | 7.00 | % | 5.50 | % | ||||||
Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. A one percentage-point change in assumed health care cost trend rates would have the following effect: |
1-percentage point | 1-percentage point | |||||||
increase | decrease | |||||||
Effect on total service and interest cost | 2 | (2 | ) | |||||
Effect on post-retirement benefit obligation | 22 | (19 | ) |
Cash flows | $ | |||
Contributions | ||||
Expected Company contributions to the post-retirement medical plan in 2011 | 14 | |||
Estimated future benefit payments | ||||
The following medical benefit payments, which reflect the expected future service, as appropriate, are expected to be paid: | ||||
2011 | 14 | |||
2012 | 16 | |||
2013 | 16 | |||
2014 | 16 | |||
2015 | 16 | |||
2016 — 2020 | 85 |
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26. | PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS(continued) | |
Other defined benefit plans | ||
Other defined benefit plans include the Ashanti Retired Staff Pension Plan, the Obuasi Mines Staff Pension Scheme, the Post-retirement medical scheme for Rand Refinery employees, the Retiree Medical Plan for the United States of America employees, the Supplemental Employee Retirement Plan for North America (USA) Inc. employees and the Nuclear Fuels South Africa (NUFCOR) — Retiree Medical Plan for Nufcor South African employees. | ||
Information in respect of other defined benefit plans for the years ended December 31, 2010, 2009 and 2008 have been aggregated in the tables of change in benefit obligations, change in plan assets and components of net periodic benefit cost as follows: | ||
Aggregated information in respect of the other defined benefit plans, for the year ended December 31, is set forth in the table below: |
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Change in benefit obligations | ||||||||||||
Balance at January 1, | 18 | 17 | 18 | |||||||||
Interest cost | 1 | — | — | |||||||||
Actuarial loss | 5 | — | — | |||||||||
Benefits paid | (2 | ) | (1 | ) | (1 | ) | ||||||
Translation | — | 2 | — | |||||||||
Balance at December 31, | 22 | 18 | 17 | |||||||||
Change in plan assets | ||||||||||||
Fair value of plan assets at January 1, | 8 | 6 | 9 | |||||||||
Actual return on plan assets | 2 | — | (1 | ) | ||||||||
Benefits paid | (1 | ) | — | — | ||||||||
Translation | 1 | 2 | (2 | ) | ||||||||
Fair value of plan assets at December 31, | 10 | 8 | 6 | |||||||||
Unfunded status at end of year | (12 | ) | (10 | ) | (11 | ) | ||||||
Net amount recognized | (12 | ) | (10 | ) | (11 | ) | ||||||
Components of net periodic benefit cost | ||||||||||||
Interest cost | 1 | — | — | |||||||||
Actuarial gains and losses | (1 | ) | — | 1 | ||||||||
— | — | 1 | ||||||||||
Accumulated benefit obligation at December 31, | 12 | 10 | 10 |
Cash flows | ||
The other retirement defined benefit plans are all closed to new members and current members are either retired or deferred members. The Company does not make a contribution to these plans. |
$ | ||||
Estimated future benefit payments | ||||
The following pension benefit payments, which reflect the expected future service, as appropriate, are expected to be paid: | ||||
2011 | 2 | |||
2012 | 2 | |||
2013 | 2 | |||
2014 | 2 | |||
2015 | 2 | |||
2016 — 2020 | 8 |
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26. | PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS(continued) | |
Defined contribution funds The following table sets forth the cost of providing retirement benefits. |
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Australia (Sunrise Dam) (1) | 4 | 4 | 3 | |||||||||
Namibia (Navachab) (2) | 1 | 1 | 1 | |||||||||
Tanzania (Geita) (3) | — | — | — | |||||||||
United States of America (Cripple Creek & Victor) (4) | 2 | 2 | 2 | |||||||||
Argentina and Brazil (AngloGold Ashanti Córrego do Sitío Mineração, Cerro Vanguardia and Serra Grande) (5) | 4 | 1 | 3 | |||||||||
Ghana and Guinea (Iduapriem, Obuasi and Siguiri) (6) | 5 | 4 | 4 | |||||||||
South Africa (Great Noligwa, Kopanang, Moab Khotsong, Mponeng, Savuka and TauTona) (7) | 48 | 41 | 36 | |||||||||
64 | 53 | 49 | ||||||||||
Contributions to the various retirement schemes are fully expensed during the year. |
(1) | Contributions are to various approved superannuation funds for the provision of benefits to employees and their dependants on retirement, disability or death. The fund is a multi-industry national fund with defined contribution arrangements. Contribution rates by the operation on behalf of employees varies, with minimum contributions meeting compliance requirements under the Superannuation Guarantee legislation. The contributions by the operation are legally enforceable to the extent required by the Superannuation Guarantee legislation and relevant employment agreements. Contributions in 2008 included Boddington. | |
(2) | Navachab employees are members of a defined contribution provident fund. The fund is administered by the Old Mutual Assurance Company (Namibia) Limited. Both the Company and the employees contribute to this fund. | |
(3) | Geita does not have a retirement scheme for employees. Tanzanian nationals contribute to the National Social Security Fund (NSSF) or the Parastatal Provident Fund (PPF), depending on the employee’s choice, and the Company also makes a contribution on the employee’s behalf to the same fund. On leaving the Company, employees may withdraw their contribution from the fund. From July 2005, the Company has set up a supplemental provident fund which is administered by the PPF with membership available to permanent national employees on a voluntary basis. The Company makes no contribution towards any retirement schemes for contracted expatriate employees. The Company contributes to the NSSF on behalf of expatriate employees. On termination of employment the Company may apply for a refund of contributions from the NSSF. | |
(4) | AngloGold Ashanti USA sponsors a 401(k) savings plan whereby employees may contribute up to 60 percent of their salary, of which up to 5 percent is matched at a rate of 150 percent by AngloGold Ashanti USA. | |
(5) | AngloGold Ashanti Limited operates defined contribution arrangements for their employees in Argentina and Brazil. These arrangements are funded by the operations (basic plan) and operations/employees (optional supplementary plan). A PGBL (Plano Gerador de Beneficio Livre) fund, similar to the American 401 (k) type of plan was started in December 2001. Administered by Bradesco Previdencia e Seguros (which assumes the risk for any eventual actuarial liabilities), this is the only private pension plan sponsored by the Company in Brazil. Employees in Argentina contribute 11 percent of their salaries towards the Argentinean government pension fund. The Company makes a contribution of 17 percent of an employee’s salary on behalf of employees to the same fund. | |
(6) | The Company’s mines in Ghana and Guinea contribute to provident plans for their employees which are defined contribution plans. The funds are administered by Boards of Trustees and invested mainly in Ghana and Guinea government treasury instruments, fixed term deposits and other investments. | |
(7) | South Africa contributes to various industry-based pension and provident retirement plans which cover substantially all employees and are defined contribution plans. These plans are all funded and the assets of the schemes are held in administrated funds separately from the Company’s assets. |
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27. | SEGMENT AND GEOGRAPHICAL INFORMATION | |
The Company produces gold as its primary product and does not have distinct divisional segments in terms of principal business activity, but manages its business on the basis of different geographic segments. During 2010, the Company’s Chief Operating Decision Maker, defined as the Executive Management team, changed the basis of segment reporting as a result of a re-alignment of the management reporting structure. Navachab which was previously included with Southern Africa forms part of Continental Africa, and North and South America have been combined into the Americas. Southern Africa (previously South Africa and Navachab) has been renamed to South Africa. The Australasia segment remains unchanged. Where applicable, the corresponding items of segment information for prior periods presented have been restated to reflect this. |
Year ended December 31 | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Business segment data | $ | $ | $ | |||||||||
Revenues | ||||||||||||
Revenues from product sales: | ||||||||||||
South Africa | 875 | 1,374 | 986 | |||||||||
Continental Africa | 1,038 | 1,242 | 905 | |||||||||
Australasia | 206 | 291 | 214 | |||||||||
Americas | 571 | 692 | 493 | |||||||||
2,690 | 3,599 | 2,598 | ||||||||||
Less: Equity method investments included above | (331 | ) | (358 | ) | (186 | ) | ||||||
Plus: Loss on realized non-hedge derivatives included above | 2,975 | 543 | 1,243 | |||||||||
Total revenues from product sales | 5,334 | 3,784 | 3,655 | |||||||||
Depreciation and amortization expense | ||||||||||||
South Africa | 357 | 281 | 256 | |||||||||
Continental Africa | 185 | 207 | 251 | |||||||||
Australasia | 35 | 38 | 47 | |||||||||
Americas | 152 | 111 | 107 | |||||||||
729 | 637 | 661 | ||||||||||
Less: Equity method investments included above | (9 | ) | (22 | ) | (46 | ) | ||||||
Total depreciation and amortization expense | 720 | 615 | 615 | |||||||||
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27. | SEGMENT AND GEOGRAPHICAL INFORMATION(continued) |
Business segment data | Year ended December 31 | |||||||||||
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Segment income/(loss) | ||||||||||||
South Africa | 675 | 574 | 480 | |||||||||
Continental Africa | 493 | 199 | (579 | ) | ||||||||
Australasia | 158 | (15 | ) | (22 | ) | |||||||
Americas | 508 | 335 | 240 | |||||||||
Other, including Corporate and Non-gold producing subsidiaries | (179 | ) | (133 | ) | (89 | ) | ||||||
Total segment income | 1,655 | 960 | 30 | |||||||||
The following are included in segment income/(loss): | ||||||||||||
Interest revenue | ||||||||||||
South Africa | 27 | 30 | 48 | |||||||||
Continental Africa | 3 | 3 | 4 | |||||||||
Australasia | 2 | 12 | 3 | |||||||||
Americas | 10 | 8 | 8 | |||||||||
Other, including Corporate and Non-gold producing subsidiaries | 1 | 1 | 3 | |||||||||
Total interest revenue | 43 | 54 | 66 | |||||||||
Interest expense | ||||||||||||
South Africa | 7 | 4 | 17 | |||||||||
Continental Africa | 7 | 4 | 1 | |||||||||
Australasia | 1 | 2 | 5 | |||||||||
Americas | 3 | 12 | 10 | |||||||||
Other, including Corporate and Non-gold producing subsidiaries | 133 | 101 | 39 | |||||||||
Total interest expense | 151 | 123 | 72 | |||||||||
Equity income/(loss) in associates | ||||||||||||
South Africa | (1 | ) | (2 | ) | 2 | |||||||
Continental Africa | 69 | 102 | (139 | ) | ||||||||
Other, including Corporate and Non-gold producing subsidiaries | (28 | ) | (12 | ) | (12 | ) | ||||||
Total equity income/(loss) in associates | 40 | 88 | (149 | ) | ||||||||
Reconciliation of segment income to Net income/(loss) - attributable to AngloGold Ashanti | ||||||||||||
Segment total | 1,655 | 960 | 30 | |||||||||
Exploration costs | (206 | ) | (150 | ) | (126 | ) | ||||||
General and administrative expenses | (228 | ) | (158 | ) | (136 | ) | ||||||
Market development costs | (14 | ) | (10 | ) | (13 | ) | ||||||
Non-hedge derivative loss | (786 | ) | (1,452 | ) | (258 | ) | ||||||
Other operating items | — | — | (19 | ) | ||||||||
Taxation (expense)/benefit | (255 | ) | 33 | (22 | ) | |||||||
Discontinued operations | — | — | 23 | |||||||||
Noncontrolling interests | (54 | ) | (48 | ) | (42 | ) | ||||||
Net income/(loss) — attributable to AngloGold Ashanti | 112 | (825 | ) | (563 | ) | |||||||
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27. | SEGMENT AND GEOGRAPHICAL INFORMATION(continued) |
Business segment data | Year ended December 31 | |||||||||||
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Segment assets | ||||||||||||
South Africa(1) | 3,370 | 3,354 | 2,497 | |||||||||
Continental Africa(2) | 4,093 | 4,055 | 3,582 | |||||||||
Australasia(3) | 534 | 496 | 1,279 | |||||||||
Americas | 2,170 | 2,012 | 1,717 | |||||||||
Other, including Corporate, and Non-gold producing subsidiaries | 221 | 745 | 376 | |||||||||
Total segment assets | 10,388 | 10,662 | 9,451 | |||||||||
(1) | Includes the following which have been classified as assets held for sale: |
ISS International Limited | 15 | — | — | |||||||||
Rand Refinery Limited | 1 | 1 | 1 | |||||||||
Tau Lekoa | — | 73 | — |
(2) | Includes an effective 45 percent interest acquired during 2009 in Kibali Goldmines in the Democratic Republic of the Congo. | |
(3) | Included assets held for sale of Boddington of $781 million in 2008. |
Expenditure for additions to long-lived assets | ||||||||||||
South Africa | 430 | 395 | 347 | |||||||||
Continental Africa | 232 | 196 | 260 | |||||||||
Australasia | 40 | 177 | 439 | |||||||||
Americas | 309 | 257 | 191 | |||||||||
Other, including Corporate and Non-gold producing subsidiaries | 4 | 2 | 2 | |||||||||
1,015 | 1,027 | 1,239 | ||||||||||
Less: Equity method investments included above | (42 | ) | (8 | ) | (7 | ) | ||||||
Total expenditure for additions to long-lived assets | 973 | 1,019 | 1,232 | |||||||||
Geographical area data | ||||||||||||
Total revenues | ||||||||||||
South Africa | 899 | 1,395 | 1,041 | |||||||||
Continental Africa | 1,043 | 1,243 | 902 | |||||||||
Australasia | 208 | 308 | 217 | |||||||||
Americas | 573 | 691 | 508 | |||||||||
Other, including Corporate and Non-gold producing subsidiaries | 37 | 129 | — | |||||||||
2,760 | 3,766 | 2,668 | ||||||||||
Less: Equity method investments included above | (333 | ) | (355 | ) | (181 | ) | ||||||
Plus: Loss on realized non-hedge derivatives included above | 2,975 | 543 | 1,243 | |||||||||
Total revenues | 5,402 | 3,954 | 3,730 | |||||||||
Long-lived assets by area | ||||||||||||
South Africa | 2,701 | 2,393 | 1,832 | |||||||||
Continental Africa(1) | 3,437 | 3,405 | 2,954 | |||||||||
Australasia | 373 | 342 | 294 | |||||||||
Americas | 1,808 | 1,678 | 1,399 | |||||||||
Other, including Corporate and Non-gold producing subsidiaries | 72 | 86 | 59 | |||||||||
Total long-lived assets | 8,391 | 7,904 | 6,538 | |||||||||
(1) | Includes an effective 45 percent interest acquired during 2009 in Kibali Goldmines in the Democratic Republic of the Congo. |
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27. | SEGMENT AND GEOGRAPHICAL INFORMATION(continued) |
Year ended December 31 | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Business segment data | $ | $ | $ | |||||||||
Entity-wide disclosures | ||||||||||||
Revenues(1) | ||||||||||||
South Africa | 2,207 | 1,665 | 1,466 | |||||||||
Ghana | 566 | 513 | 511 | |||||||||
Brazil | 599 | 437 |
(1) | Material revenues are attributed to countries based on location of production. |
Long-lived assets(2) | ||||||||||||
South Africa | 2,458 | 2,176 | 1,668 | |||||||||
Ghana | 1,924 | 1,887 | 1,863 | |||||||||
Tanzania | 584 | |||||||||||
United States of America | 719 | 671 | ||||||||||
Brazil | 768 | 689 | 598 |
(2) | Material long-lived assets excluding goodwill and other intangibles, financial instruments and deferred taxation assets. |
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28. | ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS | |
Employee share incentive scheme | ||
At a general meeting held on June 4, 1998, shareholders approved the introduction of the AngloGold Limited Share Incentive Scheme (“Share Incentive Scheme”) for the purpose of providing an incentive to executive directors and senior employees of the Company and its subsidiaries to identify themselves more closely with the fortunes of the Company and also to promote the retention of such employees by giving them an opportunity to acquire shares in the Company. Employees participate in the scheme to the extent that they are granted options and accept them. | ||
At a general meeting held on April 30, 2002, it was approved that the rules of the Share Incentive Scheme be amended to provide for the exercise of options to be based on conditions, related to the performance of the Company, as determined by the directors and which will be objective and specified. An employee would only be able to exercise his options after the date upon which he has received written notification from the directors that the previously specified performance conditions have been fulfilled or waived. The options granted prior to May 1, 2002 remained subject to the conditions under which they were granted. Although there are no automatically convertible unsecured debentures currently in issue under the rules of the Share Incentive Scheme, consequential amendments were approved to the rules of the scheme which effectively made the conversion of debentures subject to the same terms as the exercise of options. | ||
At the annual general meeting held on May 7, 2010, shareholders authorized that 17,000,000 shares may be allocated for the purposes of the scheme. Prior to this authorization, the maximum number of shares attributable to the scheme was 2.75 percent of the total number of ordinary shares in issue at any time. The maximum aggregate number of shares which may be acquired by any one participant in the scheme is 5 percent of the shares attributable to the scheme or 850,000 ordinary shares per employee could be issued in aggregate (2009: 498,080). | ||
Ordinary shares issued in terms of the Share Incentive Scheme shall, subject to the provisions of the Share Incentive Scheme, rankpari passuwith issued shares in all respects, including participation in dividends. | ||
Non-executive directors are not eligible for participation in the Share Incentive Scheme. | ||
Total plan employee costs | ||
On December 31, 2010, the Company had six stock based compensation plans which are described below. Total compensation cost charged against income for these plans were as follows: |
2010 | 2009 | 2008 | ||||||||||
$ | $ | $ | ||||||||||
Compensation cost recognized | 59 | 41 | 40 |
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28. | ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued) | |
Options | ||
An option may only be granted to an employee to purchase a certain number of shares, specified by the directors, at the option price payable in accordance with the rules of the Share Incentive Scheme. | ||
The Share Incentive Scheme provides for the granting of options based on two separate criteria: |
• | Time related options |
Time related options may be exercised over a five year period from date of grant, and may be exercised in tranches of 20 percent each in years 2, 3 and 4 and 40 percent in year five. | ||
No further options will be granted under this plan which will terminate on February 1, 2012, being the date on which the last options granted under this plan, may be exercised or will expire. | ||
Resulting from the rights offer made to ordinary shareholders, which was finalized during July 2008, additional options were awarded to existing option holders in terms of the anti-dilution provision of the original grant. As the employees did not receive any benefit in excess of the original grant value, no additional compensation cost was recognized. Approximately one option was awarded for every four held at an exercise price of R194. | ||
A summary of time related options showing movement from the beginning of the year to the end of the year, is presented below: |
Weighted- | ||||||||
average | ||||||||
Options | exercise price | |||||||
(000) | R | |||||||
Outstanding at January 1, 2010 | 28 | 146 | ||||||
Exercised | (27 | ) | 145 | |||||
Outstanding at December 31, 2010 | 1 | 194 | ||||||
Exercisable at December 31, 2010 | 1 | 194 | ||||||
2010 | 2009 | 2008 | ||||||||||
Total intrinsic value of options outstanding at period end (R millions) | — | (1) | 5 | 13 | ||||||||
Intrinsic value of options exercised (R millions) | 5 | 15 | 15 | |||||||||
Weighted average remaining contractual term (years) | 1 | 1 | 2 |
(1) | Less than R1 million. |
There was no income statement charge for 2010, 2009 and 2008, as the total compensation cost was expensed up to date of vesting in 2007. |
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28. | ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued) |
• | Performance related options |
Performance related options granted vest in full, three years after date of grant, provided that the conditions on which the options were granted, namely related to the performance of the Company (growth in an adjusted earnings per share) as determined by the directors, are met. If the performance conditions are not met at the end of the first three year period, then performance is re-tested each year over the ten year life of the option on a rolling three year basis. Options are normally exercisable, subject to satisfaction of the performance conditions, between three and ten years from date of grant. | ||
The performance related options’ compensation expense is fixed at grant date and recorded when it is probable that the performance criteria will be met. | ||
Resulting from the rights offer made to ordinary shareholders, which was finalized during July 2008, additional options were awarded to existing option holders in terms of the anti-dilution provision of the original grant. As the employees did not receive any benefit in excess of the original grant value, no additional compensation cost was recognized. Approximately one option was awarded for every four held at an exercise price of R194. | ||
No further performance related options will be granted and all options granted hereunder will terminate on November 1, 2014, being the date on which the last options granted under these criteria may be exercised or will expire. | ||
A summary of performance related options showing movement from the beginning of the year to the end of the year, is presented below: |
Weighted- | ||||||||
average | ||||||||
exercise | ||||||||
Options | price | |||||||
(000) | R | |||||||
Outstanding at January 1, 2010 | 640 | 241 | ||||||
Exercised | (244 | ) | 240 | |||||
Forfeited (terminations) | (4 | ) | 288 | |||||
Outstanding at December 31, 2010 | 392 | 242 | ||||||
Exercisable at December 31, 2010 | 392 | 242 | ||||||
A summary of the salient features of the performance related options is presented below: |
2010 | 2009 | 2008 | ||||||||||
Total intrinsic value of options outstanding at period end (R millions) | 33 | 42 | 18 | |||||||||
Intrinsic value of options exercised (R millions) | 17 | 49 | 3 | |||||||||
Weighted average remaining contractual term (years) | 3 | 4 | 5 |
All options which have not been exercised within ten years from the date on which they were granted automatically expire. | ||
There was no income statement charge for 2010, 2009 and 2008, as the total compensation cost was expensed up to date of vesting in 2007. | ||
During 2010, a total of 271,162 common shares were issued under the share incentive scheme in terms of time-based and performance awards. | ||
As at December 31, 2010, there was no unrecognized compensation cost related to unvested stock options. |
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28. | ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued) | |
The weighted average of all options outstanding as at December 31, 2010, is as follows: |
Range of exercise | Quantity of options | Weighted average | Weighted average | |||||||||||||
prices | within range | exercise price | contractual life | |||||||||||||
R | (000) | R | Years | |||||||||||||
144 — 211 | 62 | 194 | 2.8 | |||||||||||||
212 — 300 | 331 | 251 | 1.3 | |||||||||||||
393 | (1) | 242 | 1.4 | |||||||||||||
(1) | Represents a total of 641 time related options and 391,932 performance related options outstanding. |
No options expired during the year ended December 31, 2010. | ||
Since December 31, 2010 to and including April 30, 2011, 24,822 options (granted in respect of time and performance related options) have been exercised. | ||
Bonus Share Plan (“BSP”) and Long-Term Incentive Plan (“LTIP”) | ||
At the annual general meeting held on April 29, 2005, shareholders approved the introduction of the BSP and LTIP and the discontinuation of the previous share incentive scheme. Options granted under the previous share incentive scheme will remain subject to the conditions under which they were originally granted. | ||
Bonus Share Plan (“BSP”) | ||
The BSP is intended to provide effective incentives to eligible employees. An eligible employee is one who devotes substantially the whole of his working time to the business of the Company, any subsidiary of the Company or a company under the control of AngloGold Ashanti. An award in terms of the BSP may be made at any date at the discretion of the board, the only vesting condition being three years’ service for awards granted prior to 2008. For all BSP awards granted from 2008, 40 percent will vest after one year and the remaining 60 percent will vest after two years. An additional 20 percent of the original award will be granted to employees if the full award remains unexercised after three years. The board is required to determine a BSP award value and this will be converted to a share amount based on the closing price of the Company shares on the JSE on the last business day prior to the date of grant. | ||
During 2010 a total of 468,327 common shares were issued in terms of the BSP rules. | ||
During 2008, additional BSP awards were made to all scheme participants as a result of the rights offer to ordinary shareholders. The award was made in terms of the anti-dilution provision of the original grant. Employees did not receive any benefit in excess of the original grant value and no additional compensation cost was recognized. | ||
For awards made, the following information is presented: |
Award date (unvested awards and awards vested during the year) | 2010 | 2009 | 2008 | 2007 | ||||||||||||
Calculated fair value (R per share) | 280.90 | 293.99 | 267.05 | 322.00 | ||||||||||||
Vesting date (100%) | — | — | — | January 1, 2010 | ||||||||||||
Vesting date (40%) | February 24, 2011 | February 18, 2010 | January 1, 2009 | — | ||||||||||||
Vesting date (60%) | February 24, 2012 | February 18, 2011 | January 1, 2010 | — | ||||||||||||
Vesting date (conditional 20%) | February 24, 2013 | February 18, 2012 | January 1, 2011 | — | ||||||||||||
Expiry date | February 23, 2020 | February 17, 2019 | December 31, 2017 | December 31, 2016 |
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28. | ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued) | |
A summary of time related equity settled compensation scheme showing movement from the beginning of the year to the end of the year, is presented below: |
Awards | ||||
(000) | ||||
Outstanding at January 1, 2010 | 1,296 | |||
Granted | 812 | |||
Exercised | (468 | ) | ||
Forfeited (terminations) | (88 | ) | ||
Outstanding at December 31, 2010 | 1,552 | |||
Exercisable at December 31, 2010 | 451 | |||
BSP awards are issued with no exercise price. | ||
A summary of the salient features of the BSP is presented below: |
2010 | 2009 | 2008 | ||||||||||
Total intrinsic value of awards outstanding at period end (R millions) | 508 | 397 | 238 | |||||||||
Intrinsic value of awards exercised (R millions) | 146 | 75 | 28 | |||||||||
Weighted average remaining contractual term (years) | 7 | 7 | 8 |
Long-Term Incentive Plan (“LTIP”) | ||
The LTIP is an equity settled share-based payment arrangement, intended to provide effective incentives for executives to earn shares in the Company based on the achievement of stretched Company performance conditions. Participation in the LTIP will be offered to executive directors, executive officers/management and selected members of senior management. An award in terms of the LTIP may be granted at any date during the year that the board of the Company determine and may even occur more than once a year. The board is required to determine an LTIP award value and this will be converted to a share amount based on the closing price of the Company shares on the JSE on the last business day prior to the date of grant. | ||
The main performance conditions in terms of the LTIP issued in 2007 are: |
• | up to 40 percent of an award will be determined by the performance of total shareholder returns compared with that of a group of comparative gold-producing companies; | ||
• | up to 30 percent of an award will be determined by an adjusted earnings per share compared to a planned adjusted earnings per share over the performance period; | ||
• | up to 30 percent of an award will be dependent on the achievement of strategic performance measures which will be set by the Remuneration Committee; and | ||
• | three year’s service is required. |
The main performance conditions in terms of the LTIP issued in 2008, 2009 and 2010 are: |
• | up to 30 percent of an award will be determined by the performance of total shareholder returns compared with that of a group of comparative gold-producing companies; | ||
• | up to 30 percent of an award will be determined by real growth (above US inflation) in adjusted earnings per share over the performance period; | ||
• | up to 40 percent of an award will be dependent on the achievement of strategic performance measures which will be set by the Remuneration Committee; and | ||
• | three-year’s service is required. |
During 2010 a total of 84,922 common shares were issued in terms of the LTIP rules. | ||
During 2008, additional LTIP awards were made to all scheme participants as a result of the rights offer to ordinary shareholders. The award was made in terms of the anti-dilution provision of the original grant. Employees did not receive any benefit in excess of the original grant value and no additional compensation cost was recognized. |
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28. | ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued) | |
For awards made, the following information is presented: |
Award date (unvested awards and awards vested during the year) | 2010 | 2009 | 2008 | 2007 | ||||||||||||
Calculated fair value (Rand per share) | 280.90 | 293.99 | 267.05 | 322.00 | ||||||||||||
Vesting date | February 24, 2013 | February 18, 2012 | January 1, 2011 | January 1, 2010 | ||||||||||||
Expiry date | February 23, 2020 | February 17, 2019 | December 31, 2017 | December 31, 2016 |
A summary of time and performance related equity settled compensation scheme showing movement from the beginning of the year to the end of the year, is presented below: |
Awards | ||||
(000) | ||||
Outstanding at January 1, 2010 | 1,264 | |||
Granted | 632 | |||
Exercised | (85 | ) | ||
Forfeited (terminations) | (211 | ) | ||
Outstanding at December 31, 2010 | 1,600 | |||
Exercisable at December 31, 2010 | 85 | |||
LTIP awards are issued with no exercise price. | ||
A summary of the salient features of the LTIP is presented below: |
2010 | 2009 | 2008 | ||||||||||
Total intrinsic value of awards outstanding at period end (R millions) | 522 | 387 | 250 | |||||||||
Intrinsic value of awards exercised (R millions) | 26 | 22 | 11 | |||||||||
Weighted average remaining contractual term (years) | 7 | 7 | 8 | |||||||||
Compensation expense related to BSP and LTIP awards recognized ($ millions) | 45 | 27 | 20 | |||||||||
As at December 31, the unrecognized compensation cost related to unvested awards of the BSP and LTIP plans amounted to ($ millions) | 23 | 18 | 12 | |||||||||
Unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately (years) | 2 | 2 | 2 |
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28. | ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued) | |
Employee Share Ownership Plan (“ESOP”) | ||
On December 12, 2006, AngloGold Ashanti announced the finalization of the Bokamoso Employee Share Ownership Plan (Bokamoso ESOP) for employees of the South African operations. The Bokamoso ESOP creates an opportunity for AngloGold Ashanti and the unions to ensure a closer alignment of the interest between South African based employees and the Company. Participation is restricted to those employees not eligible for participation in any other South African share incentive plan. | ||
In order to facilitate these transactions the Company established a trust to acquire and administer the ESOP shares. AngloGold Ashanti allotted and issued free ordinary shares to the trust and also created, allotted and issued E ordinary shares to the trust for the benefit of employees. The Company also undertook an empowerment transaction with a Black Economic Empowerment investment vehicle, Izingwe Holdings (Proprietary) Limited (“Izingwe”) during 2006 and created, allotted and issued E ordinary shares to Izingwe. The key terms of the E ordinary share are: |
• | AngloGold Ashanti will have the right to cancel the E ordinary shares, or a portion of them, in accordance with the ESOP and Izingwe cancellation formula, respectively; | ||
• | the E ordinary shares will not be listed; | ||
• | the E ordinary shares which are not cancelled will be converted into ordinary shares; and | ||
• | the E ordinary shares will each be entitled to receive a cash dividend equal to one-half of the dividend per ordinary share declared by the Company from time to time and a further one-half is included in the calculation of the strike price calculation. |
The award of free ordinary shares to employees | ||
The fair value of each free ordinary share awarded in 2008 was R188 (2007: R306 and 2006: R320). The fair value is equal to the market value at the date-of-grant. Dividends declared and paid to the trust will accrue and be paid to ESOP members, pro rata to the number of shares allocated to them. An equal number of shares vests from 2009, and each subsequent year up to expiry date of November 1, 2013. | ||
A summary of time related equity settled compensation scheme showing movement from the beginning of the year to the end of the year, is presented below: |
Awards | ||||
(000) | ||||
Outstanding at January 1, 2010 | �� | 666 | ||
Reallocated | 21 | |||
Exercised | (231 | ) | ||
Forfeited (terminations) | (21 | ) | ||
Outstanding at December 31, 2010 | 435 | |||
Exercisable at December 31, 2010 | — | |||
A summary of the salient features of the award of free ordinary shares under ESOP to employees is presented below: |
2010 | 2009 | 2008 | ||||||||||
Total intrinsic value of awards outstanding at period end (R millions) | 142 | 204 | 216 | |||||||||
Intrinsic value of awards exercised (R millions) | 72 | 58 | 14 | |||||||||
Weighted average remaining contractual term (years) | 1 | 2 | 3 |
The Company awarded the right to acquire approximately one AngloGold Ashanti ordinary share for every four free ordinary shares held in the rights offer finalized during July 2008. The benefit to employees was in terms of the anti-dilutive provision of the original grant and no additional compensation cost was recognized. |
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28. | ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued) | |
The award of E ordinary shares to the employees: | ||
The average fair value of the E ordinary shares awarded to employees in 2008 was R13 (2007: R79 and 2006: R105) per share. Dividends declared in respect of the E ordinary shares will firstly be allocated to cover administration expenses of the trust, whereafter it will accrue and be paid to ESOP members, pro rata to the number of shares allocated to them. At each anniversary over a five year period commencing on the third anniversary of the original 2006 award, the Company will cancel the relevant number of E ordinary shares as stipulated by a cancellation formula. Any E ordinary shares remaining in the tranche will be converted to ordinary shares for the benefit of the employees. All unexercised awards will be cancelled on May 1, 2014. | ||
The value of each share granted is estimated on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires the input of subjective assumptions, including the expected term of the option award and stock price volatility. These estimates involve inherent uncertainties and the application of management judgment. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those options expected to vest. As a result, if other assumptions had been used, the Company’s recorded compensation expense could have been different from that reported. | ||
The Black-Scholes option-pricing model used the following assumptions, at grant date: |
2008 | 2007 | 2006 | ||||||||||
Risk-free interest rate | 7.00 | % | 7.00 | % | 7.00 | % | ||||||
Dividend yield | 1.39 | % | 2.06 | % | 2.30 | % | ||||||
Volatility factor of market share price | 35.00 | % | 33.00 | % | 36.00 | % |
A summary of E ordinary shares, awarded to employees, showing movement from the beginning of the year to the end of the year, is presented below: |
Weighted- | ||||||||
average | ||||||||
Options | exercise price | |||||||
(000) | R | |||||||
Outstanding at January 1, 2010 | 2,395 | 347 | ||||||
Reallocated | 69 | 361 | ||||||
Forfeited (terminations) | (69 | ) | 354 | |||||
Cancelled | (709 | ) | 354 | |||||
Outstanding at December 31, 2010 | 1,686 | 366 | ||||||
Exercisable at December 31, 2010 | — | — | ||||||
A summary of the salient features of the award of E ordinary shares to employees is presented below: |
2010 | 2009 | 2008 | ||||||||||
Total intrinsic value of awards outstanding at period end (R millions) (1) | — | — | — | |||||||||
Intrinsic value of awards exercised (R millions) (2) | — | — | — | |||||||||
Weighted average remaining contractual term (years) | 1 | 2 | 3 | |||||||||
Compensation expense related to the ESOP scheme recognized ($ millions) | 12 | 12 | 14 | |||||||||
As at December 31, the unrecognized compensation cost related to unvested awards of the ESOP scheme amounted to ($ millions) | 8 | 16 | 14 | |||||||||
Unrecognized compensation cost is expected to be recognized over the remaining scheme term of (years) | 3 | 4 | 5 |
(1) | The options outstanding at December 31, 2010, 2009 and 2008 had no intrinsic value as the share price at year end was lower than the weighted average exercise price. | |
(2) | Less than R1 million. |
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28. | ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued) | |
Weighted average exercise price is calculated as the initial grant price of R288 plus interest factor less dividend apportionment. This value will change on a monthly basis. | ||
In addition to the above share scheme expenses relating to the Bokamoso ESOP plan, the Company awarded the right to acquire approximately one AngloGold Ashanti ordinary share for every four E ordinary shares held in the rights offer finalized during July 2008. The benefit to employees was in excess of the anti-dilution provision of the original grant and additional compensation cost was recognized. The fair value at grant date of these rights awarded to Bokamoso was calculated at R76 per right. The income statement charge relating to the rights offer to Bokamoso participants was $6 million in 2008. As the rights were issued as fully vested, the expense was recorded immediately. | ||
Cash Settled Share Incentive Scheme | ||
Ghana Employee Share Ownership Plan (“Ghana ESOP”) | ||
A memorandum of understanding was signed with the Ghanaian employees on April 28, 2009 to introduce the Ghana ESOP under defined rules. | ||
In terms of the rules of the scheme, every eligible employee is entitled to 20 AngloGold Ashanti Limited share appreciation rights (“phantom shares”), which will be paid out in four equal tranches, commencing May 2009 and ending in May 2012. | ||
The value of the rights are equal to the value of AngloGold Ashanti Limited American Depositary receipts (“ADR’s”) as listed on the New York Stock Exchange, converted into Ghanaian Cedis at the prevailing US dollar exchange rate. | ||
The share price on the day of issue as of April 29, 2009 was $32.15, whilst the share price used in the payment of the first tranche was $28.46 per share. The share price used in the payment of the second tranche in 2010 was $39.50 per share. | ||
The award of share appreciation rights to employees | ||
A summary of share appreciation rights showing movement from the beginning of the year to the end of the year, is presented below: |
Number of Rights | ||||
(000) | ||||
Outstanding at January 1, 2010 | 75 | |||
Exercised | (25 | ) | ||
Forfeited (terminations) | (1 | ) | ||
Rights outstanding at December 31, 2010 | 49 | |||
Rights exercisable at December 31, 2010 | — | |||
2010 | 2009 | |||||||
$ | $ | |||||||
Compensation expense related to Ghana ESOP scheme recognized ($ millions) | 2 | 2 | ||||||
The liability recognized in the consolidated balance sheet in respect of unexercised rights was as follows | 2 | 1 |
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29. | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION | |
AngloGold Ashanti Holdings plc (“IOMco”), a wholly-owned subsidiary of AngloGold Ashanti, has issued debt securities which are fully and unconditionally guaranteed by AngloGold Ashanti Limited (being the “Guarantor”). Refer to Note 19 and to Note 21. IOMco is an Isle of Man registered company that holds certain of AngloGold Ashanti’s operations and assets located outside South Africa (excluding certain operations and assets in the Americas and Australasia). The following is condensed consolidating financial information for the Company as of December 31, 2010 and 2009 and for the years ended December 31, 2010, 2009 and 2008, with a separate column for each of AngloGold Ashanti Limited as Guarantor, IOMco as Issuer and the other subsidiaries of the Company combined (the “Non-Guarantor Subsidiaries”). For the purposes of the condensed consolidating financial information, the Company carries its investments under the equity method. The following supplemental condensed consolidating financial information should be read in conjunction with the Company’s consolidated financial statements. |
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Condensed consolidating statements of income
FOR THE YEAR ENDED DECEMBER 31,
(In millions)
2010 | 2010 | 2010 | 2010 | 2010 | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
AngloGold Ashanti | IOMco | Other subsidiaries | Cons adjustments | Total | ||||||||||||||||
(the “Guarantor”) | (the “Issuer”) | (the “Non-Guarantor | ||||||||||||||||||
Subsidiaries”) | ||||||||||||||||||||
Sales and other income | 2,348 | (2 | ) | 3,233 | (177 | ) | 5,402 | |||||||||||||
Product sales | 2,207 | — | 3,127 | — | 5,334 | |||||||||||||||
Interest, dividends and other | 141 | (2 | ) | 106 | (177 | ) | 68 | |||||||||||||
Costs and expenses | 4,130 | 1,120 | 2,818 | (3,047 | ) | 5,021 | ||||||||||||||
Production costs | 1,091 | — | 1,565 | — | 2,656 | |||||||||||||||
Exploration costs | 14 | 12 | 180 | — | 206 | |||||||||||||||
Related party transactions | (15 | ) | — | — | — | (15 | ) | |||||||||||||
General and administrative expenses | 164 | 6 | 44 | 14 | 228 | |||||||||||||||
Royalties paid | 38 | — | 104 | — | 142 | |||||||||||||||
Market development costs | 7 | — | 7 | — | 14 | |||||||||||||||
Depreciation, depletion and amortization | 352 | — | 368 | — | 720 | |||||||||||||||
Impairment of assets | 73 | — | 18 | — | 91 | |||||||||||||||
Interest expense | 7 | 69 | 75 | — | 151 | |||||||||||||||
Accretion expense | 10 | — | 12 | — | 22 | |||||||||||||||
Employment severance costs | 19 | — | 4 | — | 23 | |||||||||||||||
Loss/(profit) on sale of assets, realization of loans, indirect taxes and other | 2,041 | 1,033 | (16 | ) | (3,061 | ) | (3 | ) | ||||||||||||
Non-hedge derivative loss, movement on bonds and other commodity contracts | 329 | — | 457 | — | 786 | |||||||||||||||
(Loss)/income before income tax provision | (1,782 | ) | (1,122 | ) | 415 | 2,870 | 381 | |||||||||||||
Taxation expense | (1 | ) | (1 | ) | (253 | ) | — | (255 | ) | |||||||||||
Equity income/(loss) in associates | 63 | (23 | ) | — | — | 40 | ||||||||||||||
Equity income/(loss) in subsidiaries | 1,907 | 373 | — | (2,280 | ) | — | ||||||||||||||
Income/(loss) from continuing operations | 187 | (773 | ) | 162 | 590 | 166 | ||||||||||||||
Discontinued operations | — | — | — | — | — | |||||||||||||||
Income/(loss) after discontinued operations | 187 | (773 | ) | 162 | 590 | 166 | ||||||||||||||
Preferred stock dividends | (75 | ) | — | (76 | ) | 151 | — | |||||||||||||
Net income/(loss) | 112 | (773 | ) | 86 | 741 | 166 | ||||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | (54 | ) | — | (54 | ) | |||||||||||||
Net income/(loss) attributable to AngloGold Ashanti | 112 | (773 | ) | 32 | 741 | 112 | ||||||||||||||
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Condensed consolidating statements of income
FOR THE YEAR ENDED DECEMBER 31,
(In millions)
2009 | 2009 | 2009 | 2009 | 2009 | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
AngloGold Ashanti | IOMco | Other subsidiaries | Cons adjustments | Total | ||||||||||||||||
(the “Guarantor”) | (the “Issuer”) | (the “Non-Guarantor | ||||||||||||||||||
Subsidiaries”) | ||||||||||||||||||||
Sales and other income | 1,775 | (38 | ) | 2,273 | (56 | ) | 3,954 | |||||||||||||
Product sales | 1,665 | — | 2,119 | — | 3,784 | |||||||||||||||
Interest, dividends and other | 110 | (38 | ) | 154 | (56 | ) | 170 | |||||||||||||
Costs and expenses | 2,073 | 625 | 2,777 | (623 | ) | 4,852 | ||||||||||||||
Production costs | 862 | — | 1,367 | — | 2,229 | |||||||||||||||
Exploration costs | 6 | 14 | 130 | — | 150 | |||||||||||||||
Related party transactions | (18 | ) | — | — | — | (18 | ) | |||||||||||||
General and administrative expenses/(recoveries) | 96 | (121 | ) | 149 | 34 | 158 | ||||||||||||||
Royalties paid | — | — | 84 | — | 84 | |||||||||||||||
Market development costs | 5 | — | 5 | — | 10 | |||||||||||||||
Depreciation, depletion and amortization | 277 | — | 338 | — | 615 | |||||||||||||||
Impairment of assets | 4 | — | 4 | — | 8 | |||||||||||||||
Interest expense | 4 | 67 | 52 | — | 123 | |||||||||||||||
Accretion expense | 6 | — | 11 | — | 17 | |||||||||||||||
Employment severance costs | 10 | — | 4 | — | 14 | |||||||||||||||
Loss/(profit) on sale of assets, realization of loans, indirect taxes and other | 12 | 665 | (10 | ) | (657 | ) | 10 | |||||||||||||
Non-hedge derivative loss, movement on bonds and other commodity contracts | 809 | — | 643 | — | 1,452 | |||||||||||||||
(Loss)/income before income tax provision | (298 | ) | (663 | ) | (504 | ) | 567 | (898 | ) | |||||||||||
Taxation benefit/(expense) | 112 | (2 | ) | (77 | ) | — | 33 | |||||||||||||
Equity income/(loss) in associates | 98 | (10 | ) | — | — | 88 | ||||||||||||||
Equity (loss)/income in subsidiaries | (673 | ) | (383 | ) | — | 1,056 | — | |||||||||||||
(Loss)/income from continuing operations | (761 | ) | (1,058 | ) | (581 | ) | 1,623 | (777 | ) | |||||||||||
Discontinued operations | — | — | — | — | — | |||||||||||||||
(Loss)/income after discontinued operations | (761 | ) | (1,058 | ) | (581 | ) | 1,623 | (777 | ) | |||||||||||
Preferred stock dividends | (64 | ) | — | (65 | ) | 129 | — | |||||||||||||
Net (loss)/income | (825 | ) | (1,058 | ) | (646 | ) | 1,752 | (777 | ) | |||||||||||
Less: Net income attributable to noncontrolling interests | — | — | (48 | ) | — | (48 | ) | |||||||||||||
Net (loss)/income — attributable to AngloGold Ashanti | (825 | ) | (1,058 | ) | (694 | ) | 1,752 | (825 | ) | |||||||||||
F-94
Table of Contents
Condensed consolidating statements of income
FOR THE YEAR ENDED DECEMBER 31,
(In millions)
2008 | 2008 | 2008 | 2008 | 2008 | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
AngloGold Ashanti | IOMco | Other subsidiaries | Cons adjustments | Total | ||||||||||||||||
(the “Guarantor”) | (the “Issuer”) | (the “Non-Guarantor | ||||||||||||||||||
Subsidiaries”) | ||||||||||||||||||||
Sales and other income | 1,562 | 2 | 2,260 | (94 | ) | 3,730 | ||||||||||||||
Product sales | 1,466 | — | 2,189 | — | 3,655 | |||||||||||||||
Interest, dividends and other | 96 | 2 | 71 | (94 | ) | 75 | ||||||||||||||
Costs and expenses | 1,284 | 1,697 | 2,820 | (1,698 | ) | 4,103 | ||||||||||||||
Production costs | 796 | 1 | 1,362 | — | 2,159 | |||||||||||||||
Exploration costs | 5 | — | 123 | (2 | ) | 126 | ||||||||||||||
Related party transactions | (10 | ) | — | — | — | (10 | ) | |||||||||||||
General and administrative expenses/(recoveries) | 147 | 78 | 69 | (158 | ) | 136 | ||||||||||||||
Royalties paid | — | — | 78 | — | 78 | |||||||||||||||
Market development costs | 7 | — | 6 | — | 13 | |||||||||||||||
Depreciation, depletion and amortization | 253 | — | 362 | — | 615 | |||||||||||||||
Impairment of assets | 16 | — | 654 | — | 670 | |||||||||||||||
Interest expense | 17 | 39 | 16 | — | 72 | |||||||||||||||
Accretion expense | 9 | — | 13 | — | 22 | |||||||||||||||
Employment severance costs | 9 | — | — | — | 9 | |||||||||||||||
(Profit)/loss on sale of assets, realization of loans, indirect taxes and other | (31 | ) | 1,579 | (74 | ) | (1,538 | ) | (64 | ) | |||||||||||
Non-hedge derivative loss, movement on bonds and other commodity contracts | 66 | — | 211 | — | 277 | |||||||||||||||
Income/(loss) before income tax provision | 278 | (1,695 | ) | (560 | ) | 1,604 | (373 | ) | ||||||||||||
Taxation (expense)/benefit | (55 | ) | (4 | ) | 37 | — | (22 | ) | ||||||||||||
Equity loss in associates | (141 | ) | (8 | ) | — | — | (149 | ) | ||||||||||||
Equity (loss)/income in subsidiaries | (623 | ) | (623 | ) | — | 1,246 | — | |||||||||||||
(Loss)/income from continuing operations | (541 | ) | (2,330 | ) | (523 | ) | 2,850 | (544 | ) | |||||||||||
Discontinued operations | 23 | — | — | — | 23 | |||||||||||||||
(Loss)/income after discontinued operations | (518 | ) | (2,330 | ) | (523 | ) | 2,850 | (521 | ) | |||||||||||
Preferred stock dividends | (45 | ) | — | (46 | ) | 91 | — | |||||||||||||
Net (loss)/income | (563 | ) | (2,330 | ) | (569 | ) | 2,941 | (521 | ) | |||||||||||
Less: Net income attributable to noncontrolling interests | — | — | (42 | ) | — | (42 | ) | |||||||||||||
Net (loss)/income — attributable to AngloGold Ashanti | (563 | ) | (2,330 | ) | (611 | ) | 2,941 | (563 | ) | |||||||||||
F-95
Table of Contents
Condensed consolidating balance sheets
AT DECEMBER 31,
(In millions)
2010 | 2010 | 2010 | 2010 | 2010 | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
AngloGold Ashanti | IOMco | Other subsidiaries | Cons adjustments | Total | ||||||||||||||||
(the “Guarantor”) | (the “Issuer”) | (the “Non-Guarantor | ||||||||||||||||||
Subsidiaries”) | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current Assets | 1,169 | 2,265 | 3,869 | (5,306 | ) | 1,997 | ||||||||||||||
Cash and cash equivalents | 152 | 114 | 309 | — | 575 | |||||||||||||||
Restricted cash | 1 | — | 9 | — | 10 | |||||||||||||||
Receivables, inter-group balances and other current assets | 1,016 | 2,151 | 3,551 | (5,306 | ) | 1,412 | ||||||||||||||
Property, plant and equipment, net | 2,197 | — | 3,729 | — | 5,926 | |||||||||||||||
Acquired properties, net | 217 | — | 619 | — | 836 | |||||||||||||||
Goodwill | — | — | 197 | (17 | ) | 180 | ||||||||||||||
Other intangibles, net | — | — | 17 | — | 17 | |||||||||||||||
Other long-term inventory | — | — | 27 | — | 27 | |||||||||||||||
Materials on the leach pad | — | — | 331 | — | 331 | |||||||||||||||
Other long-term assets and deferred taxation assets | 3,328 | 736 | 914 | (3,904 | ) | 1,074 | ||||||||||||||
Total assets | 6,911 | 3,001 | 9,703 | (9,227 | ) | 10,388 | ||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||
Current liabilities including inter-group balances | 1,293 | 1,587 | 6,116 | (7,992 | ) | 1,004 | ||||||||||||||
Other non-current liabilities | 52 | — | 71 | (54 | ) | 69 | ||||||||||||||
Long-term debt | 39 | 1,044 | 1,519 | — | 2,602 | |||||||||||||||
Derivatives | — | — | 176 | — | 176 | |||||||||||||||
Deferred taxation liabilities | 720 | — | 471 | 9 | 1,200 | |||||||||||||||
Provision for environmental rehabilitation | 176 | — | 354 | — | 530 | |||||||||||||||
Other accrued liabilities | — | — | 38 | — | 38 | |||||||||||||||
Provision for pension and other post-retirement medical benefits | 165 | — | 15 | — | 180 | |||||||||||||||
Commitments and contingencies | — | — | — | — | — | |||||||||||||||
Equity | 4,466 | 370 | 943 | (1,190 | ) | 4,589 | ||||||||||||||
Stock issued | 13 | 4,587 | 897 | (5,484 | ) | 13 | ||||||||||||||
Additional paid in capital | 8,670 | 363 | 219 | (582 | ) | 8,670 | ||||||||||||||
Accumulated deficit | (3,869 | ) | (4,580 | ) | (4,350 | ) | 8,930 | (3,869 | ) | |||||||||||
Accumulated other comprehensive income and reserves | (348 | ) | — | 4,055 | (4,055 | ) | (348 | ) | ||||||||||||
Total AngloGold Ashanti stockholders’ equity | 4,466 | 370 | 821 | (1,191 | ) | 4,466 | ||||||||||||||
Noncontrolling interests | — | — | 122 | 1 | 123 | |||||||||||||||
Total liabilities and equity | 6,911 | 3,001 | 9,703 | (9,227 | ) | 10,388 | ||||||||||||||
F-96
Table of Contents
Condensed consolidating balance sheets
AT DECEMBER 31,
(In millions)
2009 | 2009 | 2009 | 2009 | 2009 | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
AngloGold Ashanti | IOMco | Other subsidiaries | Cons adjustments | Total | ||||||||||||||||
(the “Guarantor”) | (the “Issuer”) | (the “Non-Guarantor | ||||||||||||||||||
Subsidiaries”) | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current Assets | 1,650 | 2,558 | 3,332 | (4,782 | ) | 2,758 | ||||||||||||||
Cash and cash equivalents | 231 | 578 | 291 | — | 1,100 | |||||||||||||||
Restricted cash | 1 | — | 11 | — | 12 | |||||||||||||||
Receivables, inter-group balances and other current assets | 1,418 | 1,980 | 3,030 | (4,782 | ) | 1,646 | ||||||||||||||
Property, plant and equipment, net | 1,932 | — | 3,522 | — | 5,454 | |||||||||||||||
Acquired properties, net | 205 | — | 626 | — | 831 | |||||||||||||||
Goodwill | — | — | 425 | (263 | ) | 162 | ||||||||||||||
Other intangibles, net | — | — | 18 | — | 18 | |||||||||||||||
Derivatives | — | — | 5 | — | 5 | |||||||||||||||
Other long-term inventory | — | — | 26 | — | 26 | |||||||||||||||
Materials on the leach pad | — | — | 324 | — | 324 | |||||||||||||||
Other long-term assets and deferred taxation assets | 2,689 | 31 | 1,160 | (2,796 | ) | 1,084 | ||||||||||||||
Total assets | 6,476 | 2,589 | 9,438 | (7,841 | ) | 10,662 | ||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||
Current liabilities including inter-group balances | 2,058 | 1,824 | 6,686 | (6,093 | ) | 4,475 | ||||||||||||||
Other non-current liabilities | 149 | — | 84 | (70 | ) | 163 | ||||||||||||||
Long-term debt | 34 | — | 633 | — | 667 | |||||||||||||||
Derivatives | — | — | 176 | — | 176 | |||||||||||||||
Deferred taxation liabilities | 668 | — | 492 | 11 | 1,171 | |||||||||||||||
Provision for environmental rehabilitation | 115 | — | 270 | — | 385 | |||||||||||||||
Other accrued liabilities | — | — | 33 | — | 33 | |||||||||||||||
Provision for pension and other post-retirement medical benefits | 135 | — | 12 | — | 147 | |||||||||||||||
Commitments and contingencies | — | — | — | — | — | |||||||||||||||
Equity | 3,317 | 765 | 1,052 | (1,689 | ) | 3,445 | ||||||||||||||
Stock issued | 12 | 4,859 | 1,080 | (5,939 | ) | 12 | ||||||||||||||
Additional paid in capital | 7,836 | 363 | 698 | (1,061 | ) | 7,836 | ||||||||||||||
Accumulated deficit | (3,914 | ) | (4,457 | ) | (3,397 | ) | 7,854 | (3,914 | ) | |||||||||||
Accumulated other comprehensive income and reserves | (617 | ) | — | 2,544 | (2,544 | ) | (617 | ) | ||||||||||||
Total AngloGold Ashanti stockholders’ equity | 3,317 | 765 | 925 | (1,690 | ) | 3,317 | ||||||||||||||
Noncontrolling interests | — | — | 127 | 1 | 128 | |||||||||||||||
Total liabilities and equity | 6,476 | 2,589 | 9,438 | (7,841 | ) | 10,662 | ||||||||||||||
F-97
Table of Contents
Condensed consolidating statements of cash flows
FOR THE YEAR ENDED DECEMBER 31,
(In millions)
2010 | 2010 | 2010 | 2010 | 2010 | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
AngloGold Ashanti | IOMco | Other subsidiaries | Cons adjustments | Total | ||||||||||||||||
(the “Guarantor”) | (the “Issuer”) | (the “Non-Guarantor | ||||||||||||||||||
Subsidiaries”) | ||||||||||||||||||||
Net cash provided by/(used) in operating activities | 116 | (1,129 | ) | 2,202 | (151 | ) | 1,038 | |||||||||||||
Net income/(loss) | 112 | (773 | ) | 86 | 741 | 166 | ||||||||||||||
Reconciled to net cash provided by/(used) in operations: | ||||||||||||||||||||
Loss/(profit) on sale of assets, realization of loans, indirect taxes and other | 2,071 | 1,033 | (21 | ) | (3,061 | ) | 22 | |||||||||||||
Depreciation, depletion and amortization | 352 | — | 368 | — | 720 | |||||||||||||||
Impairment of assets | 73 | — | 18 | — | 91 | |||||||||||||||
Deferred taxation | 119 | — | 19 | — | 138 | |||||||||||||||
Cash utilized for hedge book settlements | (993 | ) | — | (1,618 | ) | — | (2,611 | ) | ||||||||||||
Other non cash items | (1,522 | ) | (1,973 | ) | 4,021 | 2,169 | 2,695 | |||||||||||||
Net increase in provision for environmental rehabilitation, pension and other post-retirement medical benefits | 36 | — | 95 | — | 131 | |||||||||||||||
Effect of changes in operating working capital items: | ||||||||||||||||||||
Net movement in inter-group receivables and payables | 10 | 580 | (590 | ) | — | — | ||||||||||||||
Receivables | (27 | ) | 3 | (129 | ) | — | (153 | ) | ||||||||||||
Inventories | (11 | ) | — | (204 | ) | — | (215 | ) | ||||||||||||
Accounts payable and other current liabilities | (104 | ) | 1 | 157 | — | 54 | ||||||||||||||
Net cash used in investing activities | (943 | ) | (42 | ) | (902 | ) | — | (1,887 | ) | |||||||||||
Increase in non-current investments | — | (42 | ) | (116 | ) | — | (158 | ) | ||||||||||||
Proceeds on disposal of associate | 1 | — | — | — | 1 | |||||||||||||||
Net associates loans advanced | (3 | ) | — | — | — | (3 | ) | |||||||||||||
Additions to property, plant and equipment | (424 | ) | — | (549 | ) | — | (973 | ) | ||||||||||||
Proceeds on sale of mining assets | 60 | — | 9 | — | 69 | |||||||||||||||
Proceeds on sale of investments | — | — | 142 | — | 142 | |||||||||||||||
Cash effects from hedge restructuring | (577 | ) | — | (407 | ) | — | (984 | ) | ||||||||||||
Net loans receivable advanced | — | — | (6 | ) | — | (6 | ) | |||||||||||||
Change in restricted cash | — | — | 25 | — | 25 | |||||||||||||||
Net cash generated/(used) by financing activities | 729 | 707 | (1,357 | ) | 151 | 230 | ||||||||||||||
Net changes in short-term debt | 126 | (1,000 | ) | (285 | ) | — | (1,159 | ) | ||||||||||||
Issuance of stock | 798 | 310 | (310 | ) | — | 798 | ||||||||||||||
Share issue expenses | (20 | ) | — | — | — | (20 | ) | |||||||||||||
Net changes in long-term debt | — | 1,044 | 789 | — | 1,833 | |||||||||||||||
Debt issue costs | — | (13 | ) | (26 | ) | — | (39 | ) | ||||||||||||
Cash effects from hedge restructuring | (49 | ) | — | (1,017 | ) | — | (1,066 | ) | ||||||||||||
Dividends (paid)/received | (126 | ) | 366 | (508 | ) | 151 | (117 | ) | ||||||||||||
Net decrease in cash and cash equivalents | (98 | ) | (464 | ) | (57 | ) | — | (619 | ) | |||||||||||
Effect of exchange rate changes on cash | 19 | — | 86 | — | 105 | |||||||||||||||
Cash and cash equivalents — January 1, | 231 | 578 | 291 | — | 1,100 | |||||||||||||||
Cash and cash equivalents — December 31, | 152 | 114 | 320 | — | 586 | |||||||||||||||
F-98
Table of Contents
Condensed consolidating statements of cash flows
FOR THE YEAR ENDED DECEMBER 31,
(In millions)
2009 | 2009 | 2009 | 2009 | 2009 | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
AngloGold Ashanti | IOMco | Other subsidiaries | Cons adjustments | Total | ||||||||||||||||
(the “Guarantor”) | (the “Issuer”) | (the “Non-Guarantor | ||||||||||||||||||
Subsidiaries”) | ||||||||||||||||||||
Net cash provided by/(used) in operating activities | 326 | (481 | ) | 727 | (129 | ) | 443 | |||||||||||||
Net (loss)/income | (825 | ) | (1,058 | ) | (646 | ) | 1,752 | (777 | ) | |||||||||||
Reconciled to net cash provided by/(used) in operations: | ||||||||||||||||||||
Loss/(profit) on sale of assets, realization of loans, indirect taxes and other | 12 | 665 | (2 | ) | (657 | ) | 18 | |||||||||||||
Depreciation, depletion and amortization | 277 | — | 338 | — | 615 | |||||||||||||||
Impairment of assets | 4 | — | 4 | — | 8 | |||||||||||||||
Deferred taxation | (141 | ) | — | (58 | ) | — | (199 | ) | ||||||||||||
Cash utilized for hedge book settlements | — | — | (797 | ) | — | (797 | ) | |||||||||||||
Other non cash items | 946 | (1,685 | ) | 3,540 | (1,224 | ) | 1,577 | |||||||||||||
Net (decrease)/increase in provision for environmental rehabilitation, pension and other post-retirement medical benefits | (3 | ) | — | 22 | — | 19 | ||||||||||||||
Effect of changes in operating working capital items: | ||||||||||||||||||||
Net movement in inter-group receivables and payables | 27 | 1,571 | (1,598 | ) | — | — | ||||||||||||||
Receivables | (5 | ) | (3 | ) | (36 | ) | — | (44 | ) | |||||||||||
Inventories | (23 | ) | — | (146 | ) | — | (169 | ) | ||||||||||||
Accounts payable and other current liabilities | 57 | 29 | 106 | — | 192 | |||||||||||||||
Net cash (used)/generated in investing activities | (398 | ) | (344 | ) | 474 | — | (268 | ) | ||||||||||||
Increase in non-current investments | — | (344 | ) | (99 | ) | — | (443 | ) | ||||||||||||
Net associates loans advanced | (2 | ) | — | — | — | (2 | ) | |||||||||||||
Additions to property, plant and equipment | (386 | ) | — | (633 | ) | — | (1,019 | ) | ||||||||||||
Proceeds on sale of mining assets | — | — | 1,142 | — | 1,142 | |||||||||||||||
Proceeds on sale of investments | — | — | 81 | — | 81 | |||||||||||||||
Cash effects from hedge restructuring | (11 | ) | — | (7 | ) | — | (18 | ) | ||||||||||||
Net loans receivable repaid | 1 | — | — | — | 1 | |||||||||||||||
Change in restricted cash | — | — | (10 | ) | — | (10 | ) | |||||||||||||
Net cash generated/(used) by financing activities | 103 | 1,174 | (1,103 | ) | 129 | 303 | ||||||||||||||
Net changes in short-term debt | — | (764 | ) | (89 | ) | — | (853 | ) | ||||||||||||
Issuance of stock | 306 | 693 | (693 | ) | — | 306 | ||||||||||||||
Share issue expenses | (11 | ) | — | — | — | (11 | ) | |||||||||||||
Net changes in long-term debt | — | 674 | 222 | — | 896 | |||||||||||||||
Debt issue costs | — | — | (14 | ) | — | (14 | ) | |||||||||||||
Cash effects from hedge restructuring | (83 | ) | — | 118 | — | 35 | ||||||||||||||
Dividends (paid)/received | (109 | ) | 571 | (647 | ) | 129 | (56 | ) | ||||||||||||
Net increase in cash and cash equivalents | 31 | 349 | 98 | — | 478 | |||||||||||||||
Effect of exchange rate changes on cash | 46 | — | 1 | — | 47 | |||||||||||||||
Cash and cash equivalents — January 1, | 154 | 229 | 192 | — | 575 | |||||||||||||||
Cash and cash equivalents — December 31, | 231 | 578 | 291 | — | 1,100 | |||||||||||||||
F-99
Table of Contents
Condensed consolidating statements of cash flows
FOR THE YEAR ENDED DECEMBER 31,
(In millions)
2008 | 2008 | 2008 | 2008 | 2008 | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
AngloGold Ashanti | IOMco | Other subsidiaries | Cons adjustments | Total | ||||||||||||||||
(the “Guarantor”) | (the “Issuer”) | (the “Non-Guarantor | ||||||||||||||||||
Subsidiaries”) | ||||||||||||||||||||
Net cash (used) in/provided by operating activities | (809 | ) | (927 | ) | 1,891 | (91 | ) | 64 | ||||||||||||
Net (loss)/income | (563 | ) | (2,330 | ) | (569 | ) | 2,941 | (521 | ) | |||||||||||
Reconciled to net cash (used) in/provided by operations: | ||||||||||||||||||||
(Profit)/loss on sale of assets, realization of loans, indirect taxes and other | (31 | ) | 1,579 | (74 | ) | (1,538 | ) | (64 | ) | |||||||||||
Depreciation, depletion and amortization | 253 | — | 362 | — | 615 | |||||||||||||||
Impairment of assets | 16 | — | 654 | — | 670 | |||||||||||||||
Deferred taxation | 40 | — | (112 | ) | — | (72 | ) | |||||||||||||
Cash utilized for hedge book settlements | (517 | ) | — | (596 | ) | — | (1,113 | ) | ||||||||||||
Other non cash items | (109 | ) | 53 | 2,315 | (1,494 | ) | 765 | |||||||||||||
Net increase/(decrease) in provision for environmental rehabilitation, pension and | ||||||||||||||||||||
other post-retirement medical benefits | 25 | — | (1 | ) | — | 24 | ||||||||||||||
Effect of changes in operating working capital items: | ||||||||||||||||||||
Net movement in inter-group receivables and payables | 10 | (212 | ) | 202 | — | — | ||||||||||||||
Receivables | 6 | (21 | ) | 8 | — | (7 | ) | |||||||||||||
Inventories | (1 | ) | — | (130 | ) | — | (131 | ) | ||||||||||||
Accounts payable and other current liabilities | 63 | 4 | (168 | ) | — | (101 | ) | |||||||||||||
Net cash (used) in/provided by continuing operations | (808 | ) | (927 | ) | 1,891 | (91 | ) | 65 | ||||||||||||
Net cash used in discontinued operations | (1 | ) | — | — | — | (1 | ) | |||||||||||||
Net cash used in investing activities | (562 | ) | — | (1,031 | ) | — | (1,593 | ) | ||||||||||||
Increase in non-current investments | — | — | (93 | ) | — | (93 | ) | |||||||||||||
Proceeds on disposal of associate | 46 | — | 2 | — | 48 | |||||||||||||||
Additions to property, plant and equipment | (340 | ) | — | (854 | ) | — | (1,194 | ) | ||||||||||||
Proceeds on sale of mining assets | 1 | — | 38 | — | 39 | |||||||||||||||
Proceed on sale of discontinued assets | 10 | — | — | — | 10 | |||||||||||||||
Proceeds on sale of investments | — | — | 88 | — | 88 | |||||||||||||||
Cash effects from hedge restructuring | (279 | ) | — | (206 | ) | — | (485 | ) | ||||||||||||
Change in restricted cash | — | — | (6 | ) | — | (6 | ) | |||||||||||||
Net cash generated/(used) by financing activities | 1,392 | 1,116 | (884 | ) | 91 | 1,715 | ||||||||||||||
Net changes in short-term debt | (242 | ) | — | 54 | — | (188 | ) | |||||||||||||
Issuance of stock | 1,722 | 1,241 | (1,241 | ) | — | 1,722 | ||||||||||||||
Share issue expenses | (54 | ) | — | — | — | (54 | ) | |||||||||||||
Net changes in long-term debt | — | (216 | ) | 643 | — | 427 | ||||||||||||||
Cash effects from hedge restructuring | 47 | — | (181 | ) | — | (134 | ) | |||||||||||||
Dividends (paid)/received | (81 | ) | 91 | (159 | ) | 91 | (58 | ) | ||||||||||||
Net increase/(decrease) in cash and cash equivalents | 21 | 189 | (24 | ) | — | 186 | ||||||||||||||
Effect of exchange rate changes on cash | (55 | ) | — | (33 | ) | — | (88 | ) | ||||||||||||
Cash and cash equivalents — January 1, | 188 | 40 | 249 | — | 477 | |||||||||||||||
Cash and cash equivalents — December 31, | 154 | 229 | 192 | — | 575 | |||||||||||||||
F-100
Table of Contents
30. | SUBSEQUENT EVENTS | |
Restructuring of ESOP and Economic Empowerment Transaction | ||
On April 14, 2011, AngloGold Ashanti Limited, the National Union of Mineworkers (NUM), Solidarity, The Union (UASA), Izingwe Holdings (Proprietary) Limited and the Bokamoso ESOP Board of Trustees announced the restructuring of the empowerment transactions concluded respectively between the company and the unions, and the company and Izingwe in 2006. | ||
This restructuring was motivated by the fact that share price performance since the onset of the 2008 global financial crisis led to a situation where the first two tranches of E shares (otherwise known to participants as loan shares), which operate essentially as share appreciation rights, vested and lapsed at no additional value to Bokamoso ESOP beneficiaries and Izingwe. | ||
In order to remedy this situation in a manner that would ensure an element of value accruing to participants, though at a reasonable incremental cost to AngloGold Ashanti shareholders, the scheme will be restructured as follows: |
• | All lapsed loan shares that vested without value will be reinstated; | ||
• | The strike (base) price will be fixed at R320 per share for the Bokamoso ESOP and R330 for Izingwe; | ||
• | The notional interest charge will fall away; | ||
• | As previously, 50 percent of any dividends declared will be used to reduce the strike price; | ||
• | As previously, the remaining 50 percent is paid directly to participants under the empowerment transaction; and | ||
• | The life span of the scheme will be extended by an additional one year, the last vesting being in 2014, instead of 2013. A minimum payout on vesting of the E shares has been set at R40 each and a maximum payout of R70 each per E Share for Izingwe and R90 each for members of the Bokamoso ESOP (i.e. employees), plus the impact of the 50 percent of dividend flow. While the floor price provides certainty to all beneficiaries of the empowerment transactions, the creation of a ceiling serves to limit the cost to AngloGold Ashanti and its shareholders. |
The total incremental accounting cost to the Company of this transaction will be approximately $18 million. |
Table of Contents
ANGLOGOLD ASHANTI LIMITED | ||||
/s/ Srinivasan Venkatakrishnan | ||||
Name : Srinivasan Venkatakrishnan | ||||
Title : Chief Financial Officer Date : May 27, 2011 |
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Table of Contents
Exhibit Number | Description | Remarks | ||
Exhibit 19.1 | Memorandum and Articles of Association of AngloGold Limited as in effect on May 15, 2009 | Incorporated by reference to Exhibit 3.1 of AngloGold’s automatic shelf registration statement on Form F-3 filed with the Securities and Exchange Commission on August 31, 2009 | ||
Exhibit 19.4.1.1 | AngloGold Limited Share Incentive Scheme in effect April 4, 2003 | Incorporated by reference to Exhibit 19.4(c) of AngloGold’s annual report on Form 20-F filed with the Securities and Exchange Commission on June 28, 2002 | ||
Exhibit 19.4.1.2 | Bonus Share Plan in effect on May 6, 2008 | Incorporated by reference to Exhibit 19.4.1.2 of AngloGold’s annual report on Form 20-F filed with the Securities and Exchange Commission on May 19, 2008 | ||
Exhibit 19.4.1.3 | Long-Term Incentive Plan in effect April 29, 2005 | Incorporated by reference to Exhibit 19.4.1.3 of AngloGold Ashanti’s annual report on Form 20-F filed with the Securities and Exchange Commission on March 20, 2006 | ||
Exhibit 19.4.1.6 | Sale and Purchase Agreement dated January 27, 2009 among AngloGold Ashanti Australia Limited, AngloGold Ashanti Limited, Saddleback Investments Pty Ltd, Newmont Boddington Pty Ltd, Newmont Mining Corporation, Newmont Australia Limited and BGM Management Company Pty Ltd. | Incorporated by reference to Exhibit 19.4.1.6 of AngloGold’s annual report on Form 20-F filed with the Securities and Exchange Commission on May 5, 2009 | ||
Exhibit 19.6 | Statement regarding how loss/earnings per share information was calculated | See note 9 to the consolidated financial statements | ||
Exhibit 19.8 | List of AngloGold Ashanti Limited subsidiaries | |||
Exhibit 19.12.1 | Certification of Mark Cutifani, Chief Executive Officer of AngloGold Ashanti Limited, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||
Exhibit 19.12.2 | Certification of Srinivasan Venkatakrishnan, Chief Financial Officer of AngloGold Ashanti Limited, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||
Exhibit 19.13 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||
Exhibit 19.15.1 | Consents of Ernst & Young, independent registered public accounting firm |
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Exhibit Number | Description | Remarks | ||
Exhibit 19.15.2 | Consent of KPMG, independent registered public accounting firm | |||
Exhibit 19.15.3 | Consent of KPMG, independent registered public accounting firm | |||
Exhibit 19.15.4 | Consent of BDO Stoy Hayward LLP, independent registered public accounting firm | |||
Exhibit 19.16 | Report on MSHA violations in terms of the Dodd-Frank Act 2010 |
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