-UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
Report on Form 6-K dated March 27, 2020
Commission File Number 1-14846
AngloGold Ashanti Limited
(Name of registrant)
76 Rahima Moosa Street
Newtown, 2001
(P.O. Box 62117, Marshalltown, 2107)
South Africa
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of
Form 20-F or Form 40-F.
Form 20-F or Form 40-F.
Form 20-F X
Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(1):
Regulation S-T Rule 101(b)(1):
Yes
No X
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(7):
Regulation S-T Rule 101(b)(7):
Yes
No X
Indicate by check mark whether the registrant by furnishing the information contained in this
Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b)
under the Securities Exchange Act of 1934.
Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b)
under the Securities Exchange Act of 1934.
Yes
No X
Enclosure: Press release ANGLOGOLD ASHANTI LIMITED – ANNUAL FINANCIAL
STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019
STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019
2019
<AFS>
2019
<AFS>
SECTION 2
MANAGEMENT DISCUSSION
CONTENTS
To create value for our
shareholders, our employees and our
business and social partners by safely
and responsibly
exploring, mining and marketing our
products.
Audit and Risk Committee – Chairman’s letter
1
Chief Financial Officer’s Review
7
Our values and beliefs guide all
decision-making and activities
in the conduct of our business
to ensure we make a positive
in the conduct of our business
to ensure we make a positive
impact. They underpin our
environmental, social and
governance (ESG) performance.
Directors’ approval
17
Secretary’s certificate
17
Affirmation of financial statements
17
Directors’ report
18
Independent auditor’s report
25
Group financial statements
29
Company financial statements
87
Annexure A: Summary of significant accounting policies
109
Principal subsidiaries and operating entities
117
Shareholders’ information
118
Glossary of terms and abbreviations
119
Forward looking statements
122
Administrative and corporate information
123
SECTION 3
FINANCIAL STATEMENTS
SECTION 1
GOVERNANCE
SECTION 4
OTHER
VALUES
MISSION
PAGE 1
AUDIT AND RISK COMMITTEE – CHAIRMAN’S LETTER
It is my pleasure to present, on behalf of the Audit and Risk Committee (“the Committee”), an overview of the activities performed
during the 2019 financial year. This report is presented in accordance with the Company’s Memorandum of Incorporation (MOI),
the requirements of the Companies Act, No. 71 of 2008, as amended, (the Companies Act), Principle 8 and Principle 15 and the
recommended practices contained in the fourth King Report on Governance for South Africa (King IV), as well as the Committee’s
formally approved charter, which is in line with the JSE Listings Requirements and is reviewed and approved by the board on an
annual basis.
during the 2019 financial year. This report is presented in accordance with the Company’s Memorandum of Incorporation (MOI),
the requirements of the Companies Act, No. 71 of 2008, as amended, (the Companies Act), Principle 8 and Principle 15 and the
recommended practices contained in the fourth King Report on Governance for South Africa (King IV), as well as the Committee’s
formally approved charter, which is in line with the JSE Listings Requirements and is reviewed and approved by the board on an
annual basis.
ROLE AND FOCUS
The Committee is an independent statutory committee and all members were appointed by the AngloGold Ashanti shareholders at
the Annual General Meeting (AGM) held on 9 May 2019. The Committee has decision-making authority with regards to its statutory
duties and is accountable in this regard to both the shareholders and the board of AngloGold Ashanti.
the Annual General Meeting (AGM) held on 9 May 2019. The Committee has decision-making authority with regards to its statutory
duties and is accountable in this regard to both the shareholders and the board of AngloGold Ashanti.
It is the Committee’s principal regulatory duty to oversee the integrity of the group’s internal control environment and to ensure that
financial statements comply with International Financial Reporting Standards (IFRS) and fairly present the financial position of the
group and company and the results of their operations.
financial statements comply with International Financial Reporting Standards (IFRS) and fairly present the financial position of the
group and company and the results of their operations.
Management has established and maintains internal controls and procedures, which are reviewed by the Committee and reported
on through regular reports to the Board. These internal controls and procedures are designed to identify and manage, rather than
eliminate, the risk of control malfunction and aim to provide reasonable but not absolute assurance that these risks are well
managed and that material misstatements and/or loss will not materialise.
on through regular reports to the Board. These internal controls and procedures are designed to identify and manage, rather than
eliminate, the risk of control malfunction and aim to provide reasonable but not absolute assurance that these risks are well
managed and that material misstatements and/or loss will not materialise.
The Board assumes ultimate responsibility for the functions performed by the Committee, relating to the safeguarding of assets,
accounting systems and practices, internal control processes and preparation of financial statements in compliance with all
applicable legal and regulatory requirements and accounting standards.
accounting systems and practices, internal control processes and preparation of financial statements in compliance with all
applicable legal and regulatory requirements and accounting standards.
COMPOSITION, PROCEEDINGS AND PERFORMANCE REVIEW
The Committee comprises four independent non-executive directors who collectively possess the skills and knowledge to oversee
and assess the strategies and processes developed and implemented by management to manage the business within a diverse
and continually evolving business environment. I was again elected as chairman of the Committee and fulfilled this role at each of
the 5 meetings held during the 2019 financial year.
and assess the strategies and processes developed and implemented by management to manage the business within a diverse
and continually evolving business environment. I was again elected as chairman of the Committee and fulfilled this role at each of
the 5 meetings held during the 2019 financial year.
R Gasant - Chairman - BCompt (Hons), CA (SA), ACIMA, Executive Development Programme
R Ruston - MBA Business, BE (Mining)
M Richter - BA, Juris Doctor
A Ferguson - BSc Accountancy and Business Economics (University of Southampton);
CA (Institute of Chartered Accountants of Scotland)
CA (Institute of Chartered Accountants of Scotland)
MJ Kirkwood - AB, Economics & Industrial Engineering - Retired 18 March 2019
5/5
5/5
5/5
5/5
2/2
The Chief Executive Officer, Chief Financial Officer, Senior Vice President: Group Finance, Vice President: Finance, Group General
Counsel and Company Secretary, Senior Vice President: Group Internal Audit, Vice President: Global Taxation, Group Risk
Manager, Chief Information Officer, Group Compliance Officer, the External Auditors, as well as other assurance providers are
invited to attend committee meetings in an ex-officio capacity and provide responses to questions raised by committee members
during meetings. At every scheduled quarterly meeting the full Committee meets separately during closed sessions with
management, internal audit and external audit.
Counsel and Company Secretary, Senior Vice President: Group Internal Audit, Vice President: Global Taxation, Group Risk
Manager, Chief Information Officer, Group Compliance Officer, the External Auditors, as well as other assurance providers are
invited to attend committee meetings in an ex-officio capacity and provide responses to questions raised by committee members
during meetings. At every scheduled quarterly meeting the full Committee meets separately during closed sessions with
management, internal audit and external audit.
The Committee was subjected to an internal self-assessment during 2019 to assess its effectiveness. The results of the assessment
were discussed, actions taken and processes put in place to address areas identified for improvement.
were discussed, actions taken and processes put in place to address areas identified for improvement.
PAGE 2
DUTIES
The Committee’s duties as required by section 94(7) of the Companies Act, King IV, JSE Listing Requirements and board-approved
terms of reference is set out in the Audit and Risk Committees’ annual work plan. These duties were discharged as follows:
terms of reference is set out in the Audit and Risk Committees’ annual work plan. These duties were discharged as follows:
Financial Reporting
• reviewed half and full year results and trading and
market updates
• reviewed and assessed the Key Audit Matters raised
as part of the 2019 year-end audit
•
considered the integrity of the group’s Integrated
Report, Annual Financial Statements and the Form 20- F
and recommended these for approval to the Board
Report, Annual Financial Statements and the Form 20- F
and recommended these for approval to the Board
•
assessed accounting judgements, estimates and
impairments
impairments
•
reviewed tax provisions and contingencies
•
considered the Mineral Resource and Ore Reserve
Report 2019 as well as related feedback on this report
from the Investment Committee
Report 2019 as well as related feedback on this report
from the Investment Committee
•
assessed the going concern assumptions and
solvency/ liquidity requirements
solvency/ liquidity requirements
•
monitored the XBRL and i-XBRL filing processes
Governance
•
reviewed developments in reporting standards,
corporate governance best practice and legislation
corporate governance best practice and legislation
•
evaluated the comittee's effectiveness
•
reviewed and assessed the expertise, experience and
performance of the finance function, Chief Financial
Officer and Group Internal Audit
performance of the finance function, Chief Financial
Officer and Group Internal Audit
•
approved an updated whistle-blowing policy
•
assessed the feedback of an independent assessment
of the whistle-blowing process
of the whistle-blowing process
•
reviewed the terms of reference of the Audit and Risk
Committee
Committee
•
held separate meetings with the external and internal
auditors as well as management at each meeting
auditors as well as management at each meeting
Internal Control and Risk Management
•
assessed the systems to identify, manage and
monitor financial, non-financial and fraud risks
monitor financial, non-financial and fraud risks
•
reviewed the scope, resources and results of internal
audit
audit
•
approved the internal audit plan and monitored the
execution thereof
execution thereof
•
ensured that the combined assurance model was
further refined to provide a co-ordinated approach to
assurance activities
further refined to provide a co-ordinated approach to
assurance activities
•
reviewed significant whistle-blowing reports
•
monitored the governance of information technology
(IT), including cybersecurity
(IT), including cybersecurity
•
received a quarterly update on risk management within
the group
the group
•
received semi-annual updates on compliance related
matters
matters
External Auditors
•
assessed their effectiveness
•
assessed their suitability and that of the lead audit
partner and recommended the appointment of the
independent external auditors by the shareholders
partner and recommended the appointment of the
independent external auditors by the shareholders
•
approved their terms of engagement, remuneration and
integrated audit plan
integrated audit plan
•
pre-approved all non-audit services
•
assessed their independence and concluded that there
were no impediments on the external auditors’
independence
were no impediments on the external auditors’
independence
• approved the appointment to provide independent
limited assurance on certain sustainability indicators
included in the Sustainability Report
included in the Sustainability Report
HIGHLIGHTS OF 2019
In addition to the execution of the Audit and Risk Committee’s statutory duties, set out below are some highlights from 2019:
Focus area
Actions
Financial reporting
Market updates, half-
year and annual IFRS
year and annual IFRS
reports
Reviewed and recommended the trading and market updates, half-year and annual IFRS financial statements
to the board for approval and subsequent submission to the JSE, SEC and other stock exchanges as
applicable, after:
to the board for approval and subsequent submission to the JSE, SEC and other stock exchanges as
applicable, after:
• ensuring that complex accounting areas complied with IFRS;
• carefully evaluating significant accounting judgements, including but not limited to environmental
rehabilitation provisions, taxation provisions and the valuation of the portfolio of assets (including
impairments) and estimates;
• discussing the accounting treatment of significant accounting and auditing matters as well as non-routine
transactions with management and the external auditors including the accounting for the sale of the Mali
assets and the sale of the remaining South African producing assets and related liabilities;
• reviewing and assessing the disclosure of contingent liabilities, commitments and impact of outstanding
litigation in the financial reports;
• reviewing, assessing and approving adjusted and unadjusted audit differences reported by the external
auditors;
• reviewing and assessing management’s assessment of impairment indicators and identified impairments;
• reviewing the key audit matters communicated by the external auditors in their audit report in terms of
International Standard on Auditing 701;
• reviewing the dividend proposal submitted by management for recommendation to the Board;
• reviewing and approving the filing of the Form 20-F with the SEC;
• carefully evaluating significant accounting judgements, including but not limited to environmental
rehabilitation provisions, taxation provisions and the valuation of the portfolio of assets (including
impairments) and estimates;
• discussing the accounting treatment of significant accounting and auditing matters as well as non-routine
transactions with management and the external auditors including the accounting for the sale of the Mali
assets and the sale of the remaining South African producing assets and related liabilities;
• reviewing and assessing the disclosure of contingent liabilities, commitments and impact of outstanding
litigation in the financial reports;
• reviewing, assessing and approving adjusted and unadjusted audit differences reported by the external
auditors;
• reviewing and assessing management’s assessment of impairment indicators and identified impairments;
• reviewing the key audit matters communicated by the external auditors in their audit report in terms of
International Standard on Auditing 701;
• reviewing the dividend proposal submitted by management for recommendation to the Board;
• reviewing and approving the filing of the Form 20-F with the SEC;
PAGE 3
Focus area
Actions
• reviewing the representation letter that management was required to sign; and
• considering and approving management’s documented assessment of the company’s going concern status
including key assumptions.
• considering and approving management’s documented assessment of the company’s going concern status
including key assumptions.
New accounting
standards
standards
Considered the significance of new standards and interpretations and amendments to standards in issue that
are not yet adopted but are likely to affect the financial reporting in future years. During 2019, the Committee
focused on implementation of IFRS 16 - Leases which became effective 1 January 2019. The Committee
monitored management’s implementation plans and the changes made within the internal control environment
to ensure that the accounting requirements are embedded in the day-to-day operations.
are not yet adopted but are likely to affect the financial reporting in future years. During 2019, the Committee
focused on implementation of IFRS 16 - Leases which became effective 1 January 2019. The Committee
monitored management’s implementation plans and the changes made within the internal control environment
to ensure that the accounting requirements are embedded in the day-to-day operations.
Tax exposures
Tax, tax exposures,
effective tax rate, tax
related judgements
effective tax rate, tax
related judgements
Reviewed and approved the group's tax strategy and tax management policy. Received the quarterly update
on the management of the group’s tax exposures (including uncertain tax positions) with specific focus on:
on the management of the group’s tax exposures (including uncertain tax positions) with specific focus on:
• effective tax rates;
• impact that pending changes to legislation will have on fiscal duties; and
• pending litigation in terms of tax exposure and the appropriate accounting thereof.
• impact that pending changes to legislation will have on fiscal duties; and
• pending litigation in terms of tax exposure and the appropriate accounting thereof.
Mineral Resource and Ore Reserve Report
Annual Mineral
Resource and Ore
Reserve Report
Resource and Ore
Reserve Report
Reviewed and recommended for approval the annual Mineral Resource and Ore Reserve Report prepared in
accordance with the standards set out in the South African Code for the Reporting of Exploration Results,
Mineral Resources and Mineral Reserves (The SAMREC Code, 2016), after:
accordance with the standards set out in the South African Code for the Reporting of Exploration Results,
Mineral Resources and Mineral Reserves (The SAMREC Code, 2016), after:
• discussing the internal control environment associated with the Mineral Resource and Ore Reserve
estimation process;
• receiving confirmation that the Competent Persons appointed approved the Mineral Resource and Ore
Reserve;
• reviewing and assessing for reasonableness the year-on-year reconciliation of the Mineral Resource and
Ore Reserve; and
considering the work performed by the Investment Committee on the Mineral Resource and Ore Reserve
process.
estimation process;
• receiving confirmation that the Competent Persons appointed approved the Mineral Resource and Ore
Reserve;
• reviewing and assessing for reasonableness the year-on-year reconciliation of the Mineral Resource and
Ore Reserve; and
considering the work performed by the Investment Committee on the Mineral Resource and Ore Reserve
process.
Corporate governance
King IV
Ensured that the recommended practices underpinning the 16 Principles of King IV applicable to AngloGold
Ashanti remained intact, ensuring that an ethical culture is created that supports the effective control of the
organisation at all levels, measuring the performance of the organisation from an economical, societal and
environmental perspective ensuring a legitimate and sustainable business.
Ashanti remained intact, ensuring that an ethical culture is created that supports the effective control of the
organisation at all levels, measuring the performance of the organisation from an economical, societal and
environmental perspective ensuring a legitimate and sustainable business.
Subsidiary Audit and
Risk Committees
Risk Committees
Monitored the proceedings of relevant statutory subsidiary Audit and Risk Committees during each of its
meetings.
meetings.
Risk Management
Reviewed and approved the risk management policies, standards and processes; received and considered
reports from the Group Risk Manager in relation to the key strategic and operational risks facing the company;
and received presentations on the following emerging risks and topics to obtain an in-depth analysis and
understanding:
reports from the Group Risk Manager in relation to the key strategic and operational risks facing the company;
and received presentations on the following emerging risks and topics to obtain an in-depth analysis and
understanding:
• “Tailings risk”;
• “Critical Control Management”;
• “Brazilian Operations - Risks and Opportunities”; and
• “Critical Skills and Talent Management”.
• “Critical Control Management”;
• “Brazilian Operations - Risks and Opportunities”; and
• “Critical Skills and Talent Management”.
IT Governance and
Cyber Security
Cyber Security
The Committee received and reviewed detailed reports from the Chief Information Officer on the group’s
information and technology framework and had detailed discussions around cyber security including inherent
risks and vulnerabilities within the current AngloGold Ashanti landscape. The Committee considered the
current action plans in place to manage the associated risk exposure.
information and technology framework and had detailed discussions around cyber security including inherent
risks and vulnerabilities within the current AngloGold Ashanti landscape. The Committee considered the
current action plans in place to manage the associated risk exposure.
Combined Assurance
The Committee closely monitored the actions implemented by management during 2019 to further enhance
the AngloGold Ashanti combined assurance model and to ensure integration between the various in-house
assurance providers. The Committee considers the current model as effective and efficient in that it fully
integrates with the risk management function. It will, however, continue to monitor the combined assurance
model in light of the changing operational environment.
the AngloGold Ashanti combined assurance model and to ensure integration between the various in-house
assurance providers. The Committee considers the current model as effective and efficient in that it fully
integrates with the risk management function. It will, however, continue to monitor the combined assurance
model in light of the changing operational environment.
Sarbanes-Oxley
Compliance (SOX)
Compliance (SOX)
The Committee has overseen the SOX compliance efforts of management through receiving quarterly updates
on controls associated with financial reporting and assessed the final conclusion reached by the Chief
Executive Officer and Chief Financial Officer on the effectiveness of the internal controls over financial
reporting.
on controls associated with financial reporting and assessed the final conclusion reached by the Chief
Executive Officer and Chief Financial Officer on the effectiveness of the internal controls over financial
reporting.
Compliance
The Committee monitored the execution of the global compliance governance framework that allows for a
systematic risk-based approach for group, regions and operations to identify and monitor compliance to major
laws, regulations, standards and codes.
systematic risk-based approach for group, regions and operations to identify and monitor compliance to major
laws, regulations, standards and codes.
Litigation matters
The Committee received and considered reports on significant litigation matters and assessed the possible
impact thereof on the group financial results.
impact thereof on the group financial results.
INTERNAL AUDIT
Group Internal Audit is a key independent assurance business partner within AngloGold Ashanti under the leadership of the Senior
Vice President: Group Internal Audit who has direct access to the chairmen of both the Committee and the Board. The Senior Vice
President: Group Internal Audit reports functionally to the Audit and Risk Committee and administratively to the Chief Financial
Officer, is not a member of the Executive Committee but has a standing invitation to attend these meetings. As part of its mandated
Vice President: Group Internal Audit who has direct access to the chairmen of both the Committee and the Board. The Senior Vice
President: Group Internal Audit reports functionally to the Audit and Risk Committee and administratively to the Chief Financial
Officer, is not a member of the Executive Committee but has a standing invitation to attend these meetings. As part of its mandated
PAGE 4
responsibilities, the Committee has assessed the performance of the Senior Vice President: Group Internal Audit in terms of the
annually reviewed and approved internal audit charter and is satisfied that the internal audit function is independent and
appropriately resourced, and that the Senior Vice President: Group Internal Audit has fulfilled the obligations of the position by
reporting to the Committee on the assessment of:
annually reviewed and approved internal audit charter and is satisfied that the internal audit function is independent and
appropriately resourced, and that the Senior Vice President: Group Internal Audit has fulfilled the obligations of the position by
reporting to the Committee on the assessment of:
• ethical leadership and corporate citizenship within AngloGold Ashanti;
• the governance of risk within AngloGold Ashanti;
• the governance of Information Technology within AngloGold Ashanti;
• compliance with laws, rules, codes and standards within AngloGold Ashanti;
• the effectiveness of internal controls over financial reporting and internal controls in general; and
• the effectiveness of the Combined Assurance Framework for the group.
• the governance of risk within AngloGold Ashanti;
• the governance of Information Technology within AngloGold Ashanti;
• compliance with laws, rules, codes and standards within AngloGold Ashanti;
• the effectiveness of internal controls over financial reporting and internal controls in general; and
• the effectiveness of the Combined Assurance Framework for the group.
The Committee considered the internal control heat-map for AngloGold Ashanti as presented by Group Internal Audit and monitored
the implementation of significant audit recommendations through a formal tracking process.
the implementation of significant audit recommendations through a formal tracking process.
As Chairman, I meet with the Senior Vice President: Group Internal Audit in private before each meeting and on an ad-hoc basis
throughout the year.
throughout the year.
The Committee is of the opinion, having considered the written assurance statement provided by Group Internal Audit, that nothing
has come to its attention indicating that the group’s system of internal financial controls is not effective and does not provide
reasonable assurance that the financial records may be relied upon for the preparation of the annual financial statements.
has come to its attention indicating that the group’s system of internal financial controls is not effective and does not provide
reasonable assurance that the financial records may be relied upon for the preparation of the annual financial statements.
EXTERNAL AUDIT
The current auditors Ernst &Young are level 1 BBB-EE contributors. The audit cycle at AngloGold Ashanti is continuous as the
External Auditor performs half yearly reviews on the results of the group. During August 2019, the annual integrated audit plan, the
associated fees and the 2019 global engagement letter were tabled at the Committee for consideration and approval.
External Auditor performs half yearly reviews on the results of the group. During August 2019, the annual integrated audit plan, the
associated fees and the 2019 global engagement letter were tabled at the Committee for consideration and approval.
As Chairman, I meet with the primary engagement team members in private before each scheduled meeting where I am also briefed
on general matters relating to the accounting and auditing profession as it may impact on AngloGold Ashanti.
on general matters relating to the accounting and auditing profession as it may impact on AngloGold Ashanti.
As part of its ongoing assessment of the independence and effectiveness of the external auditors, the Committee has also
considered during its evaluation of the independence of Ernst & Young factors such as:
considered during its evaluation of the independence of Ernst & Young factors such as:
• the tenure of service;
• the quality of planning, delivery and execution of the audit;
• quality and knowledge of the audit team, specifically the senior management team, including the lead engagement partner;
• the results of the most recent IRBA and PCAOB regulator reviews and the responses of the firm on observations raised in these
reports;
• outcome of the quality assessment review performed during the first half of 2019; and
• the robustness of the audit, including the audit team’s ability to challenge management as well as demonstrate professional
scepticism and independence.
• the quality of planning, delivery and execution of the audit;
• quality and knowledge of the audit team, specifically the senior management team, including the lead engagement partner;
• the results of the most recent IRBA and PCAOB regulator reviews and the responses of the firm on observations raised in these
reports;
• outcome of the quality assessment review performed during the first half of 2019; and
• the robustness of the audit, including the audit team’s ability to challenge management as well as demonstrate professional
scepticism and independence.
In addition, when considering the re-appointment of the External Auditor at the AGM, the Committee satisfied itself that the External
Auditor is accredited on the JSE list of Auditors and Accounting Specialists, and that the individual auditor responsible for performing
the functions of the auditor, does not appear on the JSE list of disqualified individual auditors, as set out in Section 22.
Auditor is accredited on the JSE list of Auditors and Accounting Specialists, and that the individual auditor responsible for performing
the functions of the auditor, does not appear on the JSE list of disqualified individual auditors, as set out in Section 22.
To further safeguard auditor independence, a formal policy on the approval of all non-audit related services has been approved
and implemented. In terms of the policy the Audit and Risk Committee has established that the sum of the non-audit and tax fees
in a year must not exceed 40% of the sum of the audit and audit related fees in the year. The Committee received a quarterly
update on the tax and non-audit fees as a percentage of the total audit and audit related fees and is comfortable that the external
auditor’s independence has not been jeopardised.
and implemented. In terms of the policy the Audit and Risk Committee has established that the sum of the non-audit and tax fees
in a year must not exceed 40% of the sum of the audit and audit related fees in the year. The Committee received a quarterly
update on the tax and non-audit fees as a percentage of the total audit and audit related fees and is comfortable that the external
auditor’s independence has not been jeopardised.
During 2019, the external audit fees were made up of audit services $5.77m, audit related services $1.14m, tax services $0.07m
and non-audit services $0.09m.
and non-audit services $0.09m.
The Committee did not note any significant findings and considers the service provided by the external auditors to have been
independent, effective and robust.
independent, effective and robust.
FINANCE FUNCTION AND CHIEF FINANCIAL OFFICER
The Committee received feedback on an internal assessment conducted on the skills, expertise and resourcing of the finance
function and was satisfied with the overall adequacy and appropriateness of the function. The Committee further reviewed the
expertise and experience of the Chief Financial Officer, Christine Ramon, and was satisfied with the appropriateness thereof.
function and was satisfied with the overall adequacy and appropriateness of the function. The Committee further reviewed the
expertise and experience of the Chief Financial Officer, Christine Ramon, and was satisfied with the appropriateness thereof.
PAGE 5
As Chairman, I meet with the senior finance team in private before each scheduled meeting where I am also briefed on general
matters relating to the administration of the finance function, the effectiveness of the internal control environment associated with
financial reporting as well as any transactions that may require additional consideration in terms of accounting.
matters relating to the administration of the finance function, the effectiveness of the internal control environment associated with
financial reporting as well as any transactions that may require additional consideration in terms of accounting.
TAX GOVERNANCE AND STRATEGY
The Committee received and reviewed detailed reports from the Chief Financial Officer and Vice President: Global Taxation, jointly,
on the group’s tax position, including uncertain tax positions, tax provisions, status of the group’s tax compliance globally and
relevant global fiscal developments impacting the group.
on the group’s tax position, including uncertain tax positions, tax provisions, status of the group’s tax compliance globally and
relevant global fiscal developments impacting the group.
The Committee also approved the group’s tax strategy and tax management policy, which together, set out the group’s approach
to tax in areas such as tax efficiency, tax risk management and tax governance and oversight, which is more fully explained in the
Integrated Report.
to tax in areas such as tax efficiency, tax risk management and tax governance and oversight, which is more fully explained in the
Integrated Report.
WHISTLEBLOWING
The Committee received quarterly updates on AngloGold Ashanti’s whistleblowing process. Where appropriate, the Committee
has directly overseen the investigation of whistle-blowing reports. Considering the report of an independent assessor, the
Committee is comfortable that the whistle-blowing process is robust and that each report received is taken seriously and thoroughly
investigated.
has directly overseen the investigation of whistle-blowing reports. Considering the report of an independent assessor, the
Committee is comfortable that the whistle-blowing process is robust and that each report received is taken seriously and thoroughly
investigated.
During the year, 141 (2018: 180) reports were received. The decrease in the number of reports was expected given the smaller
footprint of the operations as a result of the sale of some South Africa assets.
footprint of the operations as a result of the sale of some South Africa assets.
Reports received and investigated did not reveal any malpractice relating to the accounting practices, internal financial controls,
internal audit function or the content of the company’s and group’s financial statements.
internal audit function or the content of the company’s and group’s financial statements.
STATEMENT OF INTERNAL CONTROL
The opinion of the Board on the effectiveness of the internal control environment is informed by the conclusion of the Audit and
Risk Committee.
Risk Committee.
The Audit and Risk Committee assessed the results of the formal documented review conducted by Group Internal Audit and other
identified assurance providers in terms of the evolving combined assurance model of the group’s system of internal controls and
risk management, including the design, implementation and effectiveness of the internal financial controls. The assessment, when
considered with information and explanations given by management and discussions with both the internal and external auditors
on the results of their audits, led to the conclusion that nothing has come to the attention of the Board that caused it to believe that
the company’s system of internal controls and risk management is not effective and that the internal financial controls do not form
a sound basis for the preparation of reliable financial statements.
identified assurance providers in terms of the evolving combined assurance model of the group’s system of internal controls and
risk management, including the design, implementation and effectiveness of the internal financial controls. The assessment, when
considered with information and explanations given by management and discussions with both the internal and external auditors
on the results of their audits, led to the conclusion that nothing has come to the attention of the Board that caused it to believe that
the company’s system of internal controls and risk management is not effective and that the internal financial controls do not form
a sound basis for the preparation of reliable financial statements.
ANNUAL FINANCIAL STATEMENTS
The Committee has evaluated the consolidated and separate annual financial statements for the year ended 31 December 2019
and concluded that they comply, in all material aspects, with the requirements of the Companies Act, International Financial
Reporting Standards, and JSE Listing Requirements. The Committee therefore recommended the approval of the annual financial
statements to the Board.
and concluded that they comply, in all material aspects, with the requirements of the Companies Act, International Financial
Reporting Standards, and JSE Listing Requirements. The Committee therefore recommended the approval of the annual financial
statements to the Board.
LOOKING FORWARD
The Committee realises that its work is increasingly broad and complex and as a committee we are required to stay on top of
developments impacting AngloGold Ashanti. During 2020, the Audit and Risk Committee will:
developments impacting AngloGold Ashanti. During 2020, the Audit and Risk Committee will:
• monitor the internal control environment in the light of ongoing restructuring given the recent sales;
• monitor the cyber environment and the group’s prevention and defense capabilities in terms of risk exposure;
• monitor the successful integration of the core technical engineering and mining disciplines into the combined assurance review
process, where so dictated by risk;
• further consider the group’s approach to Mandatory Audit Firm rotation that will be effective for the 2024 financial period at the
latest;
• assess the impact of the rule changes accepted by the Securities Exchange Commission around disclosures associated with
Mineral Resource and Ore Reserve; and
• monitor continuous improvement in the identification, mitigation and reporting of key risks facing the Group, including our risk
appetite and risk ranking methodology.
• monitor the cyber environment and the group’s prevention and defense capabilities in terms of risk exposure;
• monitor the successful integration of the core technical engineering and mining disciplines into the combined assurance review
process, where so dictated by risk;
• further consider the group’s approach to Mandatory Audit Firm rotation that will be effective for the 2024 financial period at the
latest;
• assess the impact of the rule changes accepted by the Securities Exchange Commission around disclosures associated with
Mineral Resource and Ore Reserve; and
• monitor continuous improvement in the identification, mitigation and reporting of key risks facing the Group, including our risk
appetite and risk ranking methodology.
PAGE 6
CONCLUSION
The Committee is satisfied that it has considered and discharged its responsibilities in accordance with its mandate, statutory
responsibilities and terms of reference during the year under review. In signing this report on behalf of the Committee, I would like
to thank my fellow committee members, the external auditors, internal auditors and management for their contributions to the
Committee during the year.
responsibilities and terms of reference during the year under review. In signing this report on behalf of the Committee, I would like
to thank my fellow committee members, the external auditors, internal auditors and management for their contributions to the
Committee during the year.
Rhidwaan Gasant
Chairman: Audit and Risk Committee
27 March 2020
27 March 2020
PAGE 7
CHIEF FINANCIAL OFFICER’S REVIEW
EXECUTIVE SUMMARY
(1)
2019 was a strong financial year for the business. Free cash flow, before growth capital, increased by
106% to $448m, while cash flow from operating activities increased by 22% to $1,047m. Measures have
been taken during the year to instil more financial discipline and follow a clear framework for allocating
capital. We have and will continue to prioritise the reduction of debt with excess cash as we believe that
maintaining lower debt will help us to be more sustainable through the cycle. We ended the year with
adjusted net debt to adjusted EBITDA improved to 0.91 times, well below our targeted level of 1 time
through the cycle.
106% to $448m, while cash flow from operating activities increased by 22% to $1,047m. Measures have
been taken during the year to instil more financial discipline and follow a clear framework for allocating
capital. We have and will continue to prioritise the reduction of debt with excess cash as we believe that
maintaining lower debt will help us to be more sustainable through the cycle. We ended the year with
adjusted net debt to adjusted EBITDA improved to 0.91 times, well below our targeted level of 1 time
through the cycle.
Reinvestment in our core asset base has enabled us to optimise output and plan for the future with Ore
Reserves outside of South Africa replenished. The rising cash flows from our operations has grown our
dividend by 57% to 11 US cents per share. Our dividend policy, which pays 10% of free cash flow, before
growth capital, at the discretion of the Board of Directors, reflects a discipline in our capital allocation
process: we carve out cash for shareholders before we look at growth options. Our investment in growth
has culminated in the historic pouring of first gold at Obuasi in December 2019, bringing Phase 1 of the
Redevelopment Project to a conclusion on time and within budget.
Reserves outside of South Africa replenished. The rising cash flows from our operations has grown our
dividend by 57% to 11 US cents per share. Our dividend policy, which pays 10% of free cash flow, before
growth capital, at the discretion of the Board of Directors, reflects a discipline in our capital allocation
process: we carve out cash for shareholders before we look at growth options. Our investment in growth
has culminated in the historic pouring of first gold at Obuasi in December 2019, bringing Phase 1 of the
Redevelopment Project to a conclusion on time and within budget.
Financial highlights of the year under review include:
• The group met 2019 full year guidance with production at 3.281Moz and All-in sustaining costs (AISC)
• The group met 2019 full year guidance with production at 3.281Moz and All-in sustaining costs (AISC)
of $998/oz (including $6/oz non-cash rehabilitation provision in Brazil as guided in the third quarter of
2019)
2019)
• Record production achieved at Kibali, Tropicana and Iduapriem, while Geita delivered the highest
production in 14 years
• Free cash flow, before growth capital, increased by 106% to $448m, while cash flow from operating
activities increased by 22% to $1,047m
• Adjusted net debt to Adjusted EBITDA improved to 0.91 times, with cash and cash equivalents at
$463m
• The company reached agreements to sell the remaining South African assets and the Sadiola mine in
Mali
• Dividend increased by 57% to approximately 11 US cents per share (165 ZAR cents per share up from
95 ZAR cents per share in the prior year).
Progress has been made on the sales processes announced. On 23 December 2019, the company
announced that it had reached an agreement to sell its interest in the Sadiola Mine, while on
12 February 2020, the company announced that it had reach an agreement with Harmony Gold to sell all
its remaining South African assets and related liabilities. In Argentina, the sales process related to Cerro
Vanguardia continues. The sales proceeds from these asset sales will be prioritised to debt reduction.
announced that it had reached an agreement to sell its interest in the Sadiola Mine, while on
12 February 2020, the company announced that it had reach an agreement with Harmony Gold to sell all
its remaining South African assets and related liabilities. In Argentina, the sales process related to Cerro
Vanguardia continues. The sales proceeds from these asset sales will be prioritised to debt reduction.
(1)
The information included in the Chief Financial Officer’s review are provided for the AngloGold Ashanti group (i.e. including
South Africa), unless otherwise indicated. Following the announcement of the South African asset sale, the South African
operations are recorded as discontinued operations in the financial results. Comparative results have been restated where
required.
operations are recorded as discontinued operations in the financial results. Comparative results have been restated where
required.
GROUP PERFORMANCE
AngloGold Ashanti’s cash flows and earnings showed further growth in 2019, and for the seventh consecutive year, production,
capital and all cost guidance metrics were met.
capital and all cost guidance metrics were met.
Cash flows from the business continue to improve, with free cash flow at $127m up 90% compared to 2018. Adjusted EBITDA in
2019 increased to $1,723m, versus $1,480m in 2018. Both metrics benefitted from the increased gold price received during 2019,
partly offset by lower gold output, increased taxes and royalties.
2019 increased to $1,723m, versus $1,480m in 2018. Both metrics benefitted from the increased gold price received during 2019,
partly offset by lower gold output, increased taxes and royalties.
All-in sustaining costs (AISC) of $998/oz in 2019, compared to $976/oz in 2018, was impacted by a $6/oz non-cash impact from
the revised rehabilitation provisions in Brazil, as required by new legislation promulgated during the third quarter of 2019. Excluding
this impact, AISC increased by 2% year-on-year.
the revised rehabilitation provisions in Brazil, as required by new legislation promulgated during the third quarter of 2019. Excluding
this impact, AISC increased by 2% year-on-year.
Basic loss for the year ended 31 December 2019 was $12m, or 3 US cents per share, compared with basic profit of $133m, or
32 US cents per share in 2018. Earnings were negatively impacted by the impairment of the South African assets associated with
their held for sale accounting treatment ($385m, net of tax), higher rehabilitation provisions in Brazil ($15m, net of tax) and higher
32 US cents per share in 2018. Earnings were negatively impacted by the impairment of the South African assets associated with
their held for sale accounting treatment ($385m, net of tax), higher rehabilitation provisions in Brazil ($15m, net of tax) and higher
PAGE 8
care and maintenance costs in South Africa and Ghana ($13m, net of tax). Excluding impairment charges, headline earnings were
$379m, or 91 US cents per share, compared with $220m, or 53 US cents per share in 2018.
$379m, or 91 US cents per share, compared with $220m, or 53 US cents per share in 2018.
The group ended the year with a robust balance sheet, with improved cash flows contributing towards continued debt reduction. At
the end of December 2019, the ratio of adjusted net debt to adjusted EBITDA was 0.91 times (1 times from continuing operations),
below the targeted level of 1 times through the cycle and at the lowest level since 2012.
the end of December 2019, the ratio of adjusted net debt to adjusted EBITDA was 0.91 times (1 times from continuing operations),
below the targeted level of 1 times through the cycle and at the lowest level since 2012.
As at 31 December 2019, liquidity remains strong with $1.42bn undrawn on the $1.62bn US Dollar RCF, approximately R4.65bn
available on the R5.65bn South African RCFs and other facilities, and cash and cash equivalents of $463m. Subsequent to year-
end, we drew down on the remainder of our US Dollar RCF to bolster our cash position as indicated later in the report.
available on the R5.65bn South African RCFs and other facilities, and cash and cash equivalents of $463m. Subsequent to year-
end, we drew down on the remainder of our US Dollar RCF to bolster our cash position as indicated later in the report.
The board approved a dividend of ZAR 165 cents per share (approximately 11 US cents per share), in line with the dividend policy
based on 10% of free cash flow, before growth capital expenditure. This compares to a dividend of ZAR 95 cents per share
(7 US cents per share) in 2018. The increase in the dividend reflects management's commitment to improving shareholder returns,
while maintaining disciplined capital allocation. The Board is satisfied that subsequent to the dividend declaration the company has
adequate balance sheet flexibility and sufficient funding facilities available to withstand market volatility.
based on 10% of free cash flow, before growth capital expenditure. This compares to a dividend of ZAR 95 cents per share
(7 US cents per share) in 2018. The increase in the dividend reflects management's commitment to improving shareholder returns,
while maintaining disciplined capital allocation. The Board is satisfied that subsequent to the dividend declaration the company has
adequate balance sheet flexibility and sufficient funding facilities available to withstand market volatility.
STRATEGIC PRIORITIES
Maintaining a reliable track record of consistent and prudent behaviour as custodians of shareholder capital continues to be central
to our approach. Capital allocation continues to remain disciplined and focused on improving value creation through effective
management and without placing undue financial or operating risk on the business. This approach does not prioritise scale but
rather focuses on sustainable margins and free cash flow growth to improve total returns to shareholders over time.
to our approach. Capital allocation continues to remain disciplined and focused on improving value creation through effective
management and without placing undue financial or operating risk on the business. This approach does not prioritise scale but
rather focuses on sustainable margins and free cash flow growth to improve total returns to shareholders over time.
Whilst noting the establishment of two global mega gold-producing entities after the mergers of Barrick/Randgold and
Newmont/Goldcorp, the group continues to favour organic opportunities to create value, over those available through acquisition.
The company’s equity remains an important asset that should be protected while efforts are undertaken to close the considerable
valuation gap that exists with global industry peers. We continue to jealously guard our equity and have focused on self-funding
growth projects over the last number of years with our ongoing capital needs not requiring the issue of additional equity. The last
significant issue of equity occurred in 2013 when we issued 18,140,000 shares to settle the remainder of the outstanding 6%
Mandatory Convertible Bonds.
Newmont/Goldcorp, the group continues to favour organic opportunities to create value, over those available through acquisition.
The company’s equity remains an important asset that should be protected while efforts are undertaken to close the considerable
valuation gap that exists with global industry peers. We continue to jealously guard our equity and have focused on self-funding
growth projects over the last number of years with our ongoing capital needs not requiring the issue of additional equity. The last
significant issue of equity occurred in 2013 when we issued 18,140,000 shares to settle the remainder of the outstanding 6%
Mandatory Convertible Bonds.
Within this framework of self-funding we continue to target a return of 15% through the cycle at a long term real gold price of
$1,200/oz on our new investments, using conservative discount rates that account for specific jurisdictional and operating risks.
$1,200/oz on our new investments, using conservative discount rates that account for specific jurisdictional and operating risks.
The integrity of the balance sheet is fundamental to the long-term health of the business and enforces disciplined decision-making
in allocating capital. This means that the company will continue to rank and prioritise its investments, assessing them not only on
their returns but also on their affordability with respect to maintaining leverage ratios at or around targeted levels. Importantly, the
company will weigh these competing priorities and consider the full suite of financing opportunities available when determining
whether or not to proceed with an investment.
in allocating capital. This means that the company will continue to rank and prioritise its investments, assessing them not only on
their returns but also on their affordability with respect to maintaining leverage ratios at or around targeted levels. Importantly, the
company will weigh these competing priorities and consider the full suite of financing opportunities available when determining
whether or not to proceed with an investment.
MARGIN IMPROVEMENT - An ongoing priority
As in prior years, we continued to focus our efforts on driving operational excellence and cost efficiencies across our business. Our
efforts in the current year were supported by a higher gold price environment.
efforts in the current year were supported by a higher gold price environment.
The group AISC margin improved to 28% in 2019 from 23% in 2018. For continuing operations, the margin has improved to 30%
in 2019 from 26% in 2018.
in 2019 from 26% in 2018.
PAGE 9
BALANCE SHEET STRATEGY TO ENFORCE CAPITAL DISCIPLINE
Our balance sheet strategy continues to enforce capital discipline, with adjusted net debt at $1.572bn, 5% lower than last year. Our
adjusted net debt to adjusted EBITDA ratio of 0.91 times (1 times from continuing operations) reflects ample headroom to our
3.5 times debt covenant.
adjusted net debt to adjusted EBITDA ratio of 0.91 times (1 times from continuing operations) reflects ample headroom to our
3.5 times debt covenant.
As at 31 December 2019, liquidity remains strong with $1.42bn undrawn on the $1.62bn US Dollar RCF, approximately R4.65bn
available on the R5.65bn South African RCFs and other facilities, and cash and cash equivalents of $463m. In South Africa, we
cancelled one of our South African RCFs totalling R1.4bn at the end of February 2020.
available on the R5.65bn South African RCFs and other facilities, and cash and cash equivalents of $463m. In South Africa, we
cancelled one of our South African RCFs totalling R1.4bn at the end of February 2020.
The company will continue targeting a lower adjusted net debt to adjusted EBITDA ratio of 1 times through the cycle. We believe
this target level is sustainable, even as we invest inward, service debt obligations and pay dividends to shareholders at the discretion
of the board of directors.
this target level is sustainable, even as we invest inward, service debt obligations and pay dividends to shareholders at the discretion
of the board of directors.
We remain strongly levered both to the gold price and currencies and we expect cash flow generation across the business to
continue to benefit from prevailing market conditions as well as from efficiency and operational improvements in our business.
continue to benefit from prevailing market conditions as well as from efficiency and operational improvements in our business.
Subsequent to year end, on 18 March 2020, the company drew $900m under the US Dollar RCF to fund the repayment of the
$700m 5.375% bonds maturing on 15 April 2020 and to support short-term liquidity in the event of continuing disruptions in the
global financial markets as a result of the recent outbreak of the Corona virus (COVID-19). In addition, a further $450m was drawn
down on the remainder of the US Dollar RCF and received on 27 March 2020.
$700m 5.375% bonds maturing on 15 April 2020 and to support short-term liquidity in the event of continuing disruptions in the
global financial markets as a result of the recent outbreak of the Corona virus (COVID-19). In addition, a further $450m was drawn
down on the remainder of the US Dollar RCF and received on 27 March 2020.
CONTINUED POSITIVE CASH FLOW MOMENTUM
We continue to follow a balanced approach, with a focus on positive free cash flow generation while reinvesting in our portfolio. Our
dividend policy remains to pay out 10% of free cash flow, before growth capital, at the discretion of the Board. Subject to this
discretion, our dividend policy represents a key element of our disciplined capital allocation.
dividend policy remains to pay out 10% of free cash flow, before growth capital, at the discretion of the Board. Subject to this
discretion, our dividend policy represents a key element of our disciplined capital allocation.
Free cash flow before growth capital was $448m (2018: $278m, after the adjustment for South African retrenchment payments of
$61m). The board has approved a dividend of 165 ZAR cents or approximately 11 US cents per share (2018: 95 ZAR cents or
7 US cents per share), representing a 57% increase in dollar terms.
$61m). The board has approved a dividend of 165 ZAR cents or approximately 11 US cents per share (2018: 95 ZAR cents or
7 US cents per share), representing a 57% increase in dollar terms.
The continuation of the dividend is a reflection of our capital discipline and commitment to improving shareholder returns on the
back of sustainable free cash flow generation. Importantly, we will maintain adequate balance sheet flexibility and utilise our cash
flows and available facilities to fund our ongoing capital and operational requirements.
back of sustainable free cash flow generation. Importantly, we will maintain adequate balance sheet flexibility and utilise our cash
flows and available facilities to fund our ongoing capital and operational requirements.
PAGE 10
1. Adjusted for bond redemption premium of $61m on part settlement of $1.25bn high-yield bonds; for Obuasi redundancy costs
of $210m; and the 2014 Rand Refinery loan of $44m.
2. Adjusted for bond redemption premium of $30m on settlement of remaining $1.25bn high-yield bonds.
3. Adjusted for SA retrenchment costs paid of c.$49m.
4. Adjusted for SA retrenchment costs paid of c.$61m.
3. Adjusted for SA retrenchment costs paid of c.$49m.
4. Adjusted for SA retrenchment costs paid of c.$61m.
DELIVERY AGAINST 2019 FINANCIAL AND OPERATIONAL OBJECTIVES
Objective met
Objective ongoing
1.
Continued focus on sustainable free cash flow generation
Free cash flow of $127m for the full year represents a 90% improvement year on year (2018: $67m and 2017: $1m). All the
group’s major operating mines were cash positive. Free cash flow was bolstered by higher gold prices which offset lower
production, higher capital expenditure, increased profit based taxes and the slower cash repatriation from Kibali in the DRC.
group’s major operating mines were cash positive. Free cash flow was bolstered by higher gold prices which offset lower
production, higher capital expenditure, increased profit based taxes and the slower cash repatriation from Kibali in the DRC.
Although we received $75m in dividends from Kibali for the year, our attributable share of cash balances in-country increased
to $202m as at 31 December 2019 (2018: $53m). Our joint venture partner, Barrick, who is the operator at Kibali, continues
to engage with the government of the DRC with regards the cash lock-up in-country.
to $202m as at 31 December 2019 (2018: $53m). Our joint venture partner, Barrick, who is the operator at Kibali, continues
to engage with the government of the DRC with regards the cash lock-up in-country.
2.
Improve margins
Our margins for total cash costs, AISC, and All-in Costs (AIC) on revenue from continuing operations were 46%, 30% and
17%, respectively. Except for AIC, the margins reflected increases from 2018 (total cash costs: 42%; AISC: 26%; and
AIC: 18%). Margins were positively affected by the higher gold price received during the year, with AIC marginally down year-
on-year as a result of the increased growth capital expenditure incurred during the year relating to the Obuasi redevelopment
project.
17%, respectively. Except for AIC, the margins reflected increases from 2018 (total cash costs: 42%; AISC: 26%; and
AIC: 18%). Margins were positively affected by the higher gold price received during the year, with AIC marginally down year-
on-year as a result of the increased growth capital expenditure incurred during the year relating to the Obuasi redevelopment
project.
3.
Maintain strict cost and capital discipline
The group’s total cash costs were largely steady with total cash costs of $776/oz in 2019, $3/oz higher than $773/oz achieved
in 2018. Total cash costs were favourably impacted by weaker currencies, which assisted in offsetting inflationary pressures
in the emerging economies that we operate in, particularly in Argentina and South Africa. The main cost drivers contributing
to inflationary pressures related to mining contractors, labour and consumables, which are all predominately indexed to
inflation.
in 2018. Total cash costs were favourably impacted by weaker currencies, which assisted in offsetting inflationary pressures
in the emerging economies that we operate in, particularly in Argentina and South Africa. The main cost drivers contributing
to inflationary pressures related to mining contractors, labour and consumables, which are all predominately indexed to
inflation.
Total cash costs were further adversely impacted by lower production, predominately grade impacts and lower planned by-
product revenue at Cerro Vanguardia. Operational efficiency improvements continue to be a key group focus to mitigate
operational cost pressures.
product revenue at Cerro Vanguardia. Operational efficiency improvements continue to be a key group focus to mitigate
operational cost pressures.
PAGE 11
AISC of $998/oz in 2019, were 2% higher than $976/oz achieved in 2018. AISC for 2019 include a non-cash $6/oz for
additional environmental rehabilitation obligations in Brazil pertaining to tailings facilities, under the new legislation enacted in
August 2019, following Vale’s Brumadinho failure in January 2019. Lower sustaining capital was largely offset by IFRS 16
lease costs, higher rehabilitation provisions and other non-cash costs.
additional environmental rehabilitation obligations in Brazil pertaining to tailings facilities, under the new legislation enacted in
August 2019, following Vale’s Brumadinho failure in January 2019. Lower sustaining capital was largely offset by IFRS 16
lease costs, higher rehabilitation provisions and other non-cash costs.
Total capital expenditure (including equity accounted investments) increased by 13% to $814m in 2019, compared to $721m
in 2018. This included project capital expenditure of $321m relating to Obuasi, Siguiri, Tropicana, Mponeng and Quebradona
in 2019, compared to $150m invested in growth projects in 2018. Sustaining capital expenditure decreased to $493m in 2019,
compared to $571m in 2018.
in 2018. This included project capital expenditure of $321m relating to Obuasi, Siguiri, Tropicana, Mponeng and Quebradona
in 2019, compared to $150m invested in growth projects in 2018. Sustaining capital expenditure decreased to $493m in 2019,
compared to $571m in 2018.
4.
Advance Obuasi for first production by the end of 2019
The Obuasi redevelopment project achieved its first pour of gold on 18 December 2019, signalling the successful
redevelopment of the mine into a modern, mechanised mining operation since mining activities were suspended five years
ago. At the end of 2019, the overall project was 77% complete. The Phase 1 ramp up is now in progress to achieve
2,000 tonnes per day.
redevelopment of the mine into a modern, mechanised mining operation since mining activities were suspended five years
ago. At the end of 2019, the overall project was 77% complete. The Phase 1 ramp up is now in progress to achieve
2,000 tonnes per day.
Phase 2 of the project, to achieve a capacity of 4,000 tonnes per day, is firmly on schedule and within budget. See <Regional
performance review> section in the Integrated Report for more detail on the project.
performance review> section in the Integrated Report for more detail on the project.
5.
Complete asset sale processes
Processes to sell assets in Mali, South Africa and Argentina progressed during the year. On 23 December 2019, the company
announced that it had reached an agreement to sell its interest in the Sadiola Mine to Allied Gold for an attributable cash
consideration of $52.5m.
announced that it had reached an agreement to sell its interest in the Sadiola Mine to Allied Gold for an attributable cash
consideration of $52.5m.
After the financial year end, on 12 February 2020, the company announced it had reached an agreement with Harmony Gold
to sell all its remaining South African producing assets and related liabilities with expected proceeds of around $300m, subject
to subsequent performance, and with additional proceeds if the West Wits assets are developed below current infrastructure.
to sell all its remaining South African producing assets and related liabilities with expected proceeds of around $300m, subject
to subsequent performance, and with additional proceeds if the West Wits assets are developed below current infrastructure.
Both the Mali and South African sales processes are expected to close in 2020.
Subsequent to the announcement of the sale of the South African assets, Moody's affirmed a credit-positive impact of the
sale citing another positive step in strategy to streamline the portfolio and lower the long-term cost structure of the business.
sale citing another positive step in strategy to streamline the portfolio and lower the long-term cost structure of the business.
In Argentina, the sales process related to Cerro Vanguardia continues. This process is at an advanced stage and we hope to
make a decision whether to accept a firm offer or to terminate the sales process in the second quarter of 2020. Cerro
Vanguardia continues to be a strong contributor to the group, with 225,000oz produced in 2019 at an AISC of $859/oz,
generating gross profits of $108m.
make a decision whether to accept a firm offer or to terminate the sales process in the second quarter of 2020. Cerro
Vanguardia continues to be a strong contributor to the group, with 225,000oz produced in 2019 at an AISC of $859/oz,
generating gross profits of $108m.
6.
Ongoing stakeholder engagement
The group’s strategy is underpinned by our overall objective, which is to deliver quality production, responsibly, with an
emphasis on widening margins, extending mine lives and improving the portfolio. This forms the basis of our continuing and
ongoing stakeholder engagement, whether with investors, governments, communities, or employees.
emphasis on widening margins, extending mine lives and improving the portfolio. This forms the basis of our continuing and
ongoing stakeholder engagement, whether with investors, governments, communities, or employees.
The global enhanced interest in environmental, sustainability and governance disciplines (ESG) for companies operating in
the extractive activities industries has become a focus for investors and it receives considerable attention from the group.
Maintaining and enhancing our licence to operate through effective ESG practices, is critical to achieving our objectives.
the extractive activities industries has become a focus for investors and it receives considerable attention from the group.
Maintaining and enhancing our licence to operate through effective ESG practices, is critical to achieving our objectives.
7.
Advance Colombian projects up the value curve
At Quebradona, the company continued with its feasibility study, after the declaration of a reserve at the end of 2018. It is
expected that the results of the feasibility study will be announced towards the end of 2020. During the year, drilling focused
on geotechnical programmes for site infrastructure, the tunnel trace, above the mine area and the crusher chamber.
expected that the results of the feasibility study will be announced towards the end of 2020. During the year, drilling focused
on geotechnical programmes for site infrastructure, the tunnel trace, above the mine area and the crusher chamber.
On 16 September 2019, the company announced that it had reached an agreement with B2Gold, its joint venture partner at
the Gramalote Project in Colombia, whereby B2Gold will fund an investment and exploration programme in 2020 to the value
of $13.9m, in order to earn back to a 50:50 joint venture and assume management of the project with effect from 1 January
2020. This agreement provides additional momentum to the Gramalote Project, one of AngloGold Ashanti’s two advanced
exploration projects in Colombia. At the time of the announcement, B2Gold owned a 48.3% stake, with AngloGold Ashanti
holding the remaining 51.7%. B2Gold and AngloGold Ashanti have agreed on a budget for the feasibility study on the
Gramalote Project of approximately $37m. As manager, B2Gold plans to continue the feasibility work with the goal of
completing a final feasibility study by the end of 2020.
the Gramalote Project in Colombia, whereby B2Gold will fund an investment and exploration programme in 2020 to the value
of $13.9m, in order to earn back to a 50:50 joint venture and assume management of the project with effect from 1 January
2020. This agreement provides additional momentum to the Gramalote Project, one of AngloGold Ashanti’s two advanced
exploration projects in Colombia. At the time of the announcement, B2Gold owned a 48.3% stake, with AngloGold Ashanti
holding the remaining 51.7%. B2Gold and AngloGold Ashanti have agreed on a budget for the feasibility study on the
Gramalote Project of approximately $37m. As manager, B2Gold plans to continue the feasibility work with the goal of
completing a final feasibility study by the end of 2020.
PAGE 12
REVIEW OF GROUP’S PROFITABILITY, LIQUIDITY AND STATEMENT OF FINANCIAL POSITION FOR 2019
The key financial and operational metrics for 2019, when compared to 2018 and 2017, are as follows:
2019
2018
(3)
2017
(3)
Profitability and returns
Headline earnings
$m
379
220
27
US cps
91
53
6
Profit (loss) attributable to equity shareholders - total
$m
(12)
133
(191)
Profit attributable to equity shareholders from continuing operations
$m
364
216
145
Loss attributable to equity shareholders from discontinued operations
$m
(376)
(83)
(336)
Profit (loss) attributable to equity shareholders - total
US cps
(3)
32
(46)
Profit attributable to equity shareholders from continuing operations
US cps
87
52
35
Loss attributable to equity shareholders from discontinued operations
US cps
(90)
(20) (81)
Return on net capital employed
(1)
%
11
8
3
Dividends declared per ordinary share
ZAR cps
165
95
70
US cps
~11
7
6
Liquidity, cash flow and net debt
Adjusted net debt at year end
Adjusted net debt at year end
(1)
Free cash flow
(1)
Adjusted earnings before interest, tax, depreciation and amortization
(Adjusted EBITDA) – total
(Adjusted EBITDA) – total
(1)(2)
$bn
$m
$bn
2019
2018
(3)
2017
(3)
1.6
127
1.7
1.7
67
1.5
2.0
1
1.5
Adjusted EBITDA – continuing operations
$bn
1.6
1.4
1.4
Adjusted net debt to adjusted EBITDA – total
(1)(2)
Times
0.9
1.1
1.4
Adjusted net debt to adjusted EBITDA – continuing operations
(1)(2)
Times
1.0
1.2
1.5
Operational metrics
Gold produced – total
Gold produced – total
Moz
3.28
3.40
3.76
Gold produced – continuing operations
Moz
2.86
2.91
2.85
Gold produced – discontinued operations
Moz
0.42
0.49
0.91
Average price received – total
$/oz
1,387
1,261
1,251
Average price received – continuing operations
Average price received – discontinued operations
Average price received – discontinued operations
$/oz
$/oz
$/oz
1,394
1,337
1,337
1,266
1,228
1,228
1,257
1,233
1,233
Total cash costs – total
(1)
$/oz
776
773
792
Total cash costs – continuing operations
(1)
$/oz
746
729
700
Total cash costs – discontinued operations
(1)
$/oz
981
1,032
1,084
All-in sustaining costs – total
(1)
$/oz
998
976
1,054
All-in sustaining costs – continuing operations
(1)
$/oz
978
942
993
All-in sustaining costs – discontinued operations
(1)
$/oz
1,132
1,182
1,251
All-in costs – total
(1)
$/oz
1,162
1,068
1,126
All-in costs – continuing operations
(1)
$/oz
All-in costs – discontinued operations
(1)
$/oz
1,151
1,240
1,034
1,077
1,272
1,284
All-in sustaining cost margin – continuing operations
(1)
%
30
26
21
(1)
Non-GAAP measures
(2)
The adjusted EBITDA calculation is based on the formula included in the Revolving Credit Facility Agreements for compliance with the debt covenant
formula
(3)
The results for 2017 and 2018 have been adjusted to reflect the effect of continuing and discontinued operations in terms of IFRS 5
PRODUCTION, PROFITABILITY AND RETURNS
Production for 2019 was 3.281Moz, 4% lower when compared to 2018. The company successfully navigated a challenging year,
largely due to operational challenges at Siguiri, Sunrise Dam, and Cerro Vanguardia, offset by exceptional performances at Geita,
Kibali, Tropicana and Iduapriem. Kibali, Tropicana and Iduapriem registered record production for 2019.
largely due to operational challenges at Siguiri, Sunrise Dam, and Cerro Vanguardia, offset by exceptional performances at Geita,
Kibali, Tropicana and Iduapriem. Kibali, Tropicana and Iduapriem registered record production for 2019.
Total cash costs were $776/oz, compared to $773/oz in 2018. AISC were $992/oz in 2019, excluding a $6/oz impact from revised
rehabilitation provisions in Brazil, as required by the new legislation promulgated during the third quarter of 2019. This cost
performance compared to AISC of $976/oz in 2018.
rehabilitation provisions in Brazil, as required by the new legislation promulgated during the third quarter of 2019. This cost
performance compared to AISC of $976/oz in 2018.
The Continental Africa region produced 1.538Moz at a total cash cost of $759/oz for the year ended 31 December 2019 compared
to 1.512Moz at a total cash cost of $773/oz for the year ended 31 December 2018. The region’s AISC were $896/oz for the year
ended 31 December 2019 compared to $904/oz for the year ended 31 December 2018.
to 1.512Moz at a total cash cost of $773/oz for the year ended 31 December 2018. The region’s AISC were $896/oz for the year
ended 31 December 2019 compared to $904/oz for the year ended 31 December 2018.
The Americas region produced 710,000oz at a total cash cost of $736/oz for the year ended 31 December 2019 compared to
776,000oz at a total cash cost of $624/oz for the year ended 31 December 2018. The region’s AISC were $1,032/oz for the year
ended 31 December 2019 compared to $855/oz for the year ended 31 December 2018. AISC increased largely due to lower ounces
sold, lower by-product revenue and inflation.
776,000oz at a total cash cost of $624/oz for the year ended 31 December 2018. The region’s AISC were $1,032/oz for the year
ended 31 December 2019 compared to $855/oz for the year ended 31 December 2018. AISC increased largely due to lower ounces
sold, lower by-product revenue and inflation.
PAGE 13
The Australia region produced 614,000oz at a total cash cost of $730/oz for the year ended 31 December 2019, compared to
625,000oz at a total cash cost of $762/oz for the year ended 31 December 2018. The region’s AISC were $990/oz for the year
ended 31 December 2019, compared to $1,038/oz for the year ended 31 December 2018.
625,000oz at a total cash cost of $762/oz for the year ended 31 December 2018. The region’s AISC were $990/oz for the year
ended 31 December 2019, compared to $1,038/oz for the year ended 31 December 2018.
The South African operations produced 419,000oz at a total cash cost of $981/oz for the year ended 31 December 2019 compared
to 436,000oz (excluding Moab Khotsong and the Kopanang operations which were sold in February 2018) at a total cash cost of
$1,002/oz on a comparative basis for the year ended 31 December 2018. This was largely due to limitations on face length
availability following high seismicity at Mponeng. AISC came in at $1,128/oz for the year ended 31 December 2019, compared to
$1,144/ oz for the year ended 31 December 2018 on a comparative basis. The year-on-year total cash cost decrease is attributable
to operating efficiencies as well as a weaker Rand/US Dollar exchange rate, partially offset by lower gold output.
to 436,000oz (excluding Moab Khotsong and the Kopanang operations which were sold in February 2018) at a total cash cost of
$1,002/oz on a comparative basis for the year ended 31 December 2018. This was largely due to limitations on face length
availability following high seismicity at Mponeng. AISC came in at $1,128/oz for the year ended 31 December 2019, compared to
$1,144/ oz for the year ended 31 December 2018 on a comparative basis. The year-on-year total cash cost decrease is attributable
to operating efficiencies as well as a weaker Rand/US Dollar exchange rate, partially offset by lower gold output.
The average gold price received in 2019 was $1,387/oz, a 10% increase over 2018 at $1,261/oz. The higher gold price helped
drive the improved financial performance year-on-year. The following margins on gold revenue (based on continuing operations)
were achieved for 2019 and 2018:
drive the improved financial performance year-on-year. The following margins on gold revenue (based on continuing operations)
were achieved for 2019 and 2018:
Margins on gold revenue (based on continuing operations)
2019
2018
On total cash costs
46%
42%
On all-in sustaining costs
30%
26%
On all-in costs
17%
18%
Total cash costs and AISC margins reflect increases mainly as a result of the increased gold price received. The All-in cost margin
remains flat since the benefit of the increase gold price received is offset by the non-sustaining project capital expenditure.
remains flat since the benefit of the increase gold price received is offset by the non-sustaining project capital expenditure.
Basic loss for the year ended 31 December 2019 was $12m, or 3 US cents per share, compared with basic profit of $133m, or
32 US cents per share in 2018. Earnings were negatively impacted by the impairment of the South African assets associated with
their held for sale accounting treatment ($385m, net of tax), higher rehabilitation provisions in Brazil ($15m, net of tax) and higher
care and maintenance costs in South Africa and Ghana ($13m, net of tax). Excluding impairment charges, headline earnings were
$379m, or 91 US cents per share, compared with $220m, or 53 US cents per share in 2018.
32 US cents per share in 2018. Earnings were negatively impacted by the impairment of the South African assets associated with
their held for sale accounting treatment ($385m, net of tax), higher rehabilitation provisions in Brazil ($15m, net of tax) and higher
care and maintenance costs in South Africa and Ghana ($13m, net of tax). Excluding impairment charges, headline earnings were
$379m, or 91 US cents per share, compared with $220m, or 53 US cents per share in 2018.
LIQUIDITY, CASH FLOW AND STATEMENT OF FINANCIAL POSITION
Cash flow from operating activities for the year ended 31 December 2019 increased by 22% to $1,047m in 2019 compared to
$857m in 2018. Free cash flow for the year improved by 90% to $127m in 2019, from $67m in the prior year, benefitting from an
improved received gold price which more than negated lower gold output, higher operating costs, taxes, royalties, working capital
lockups and the increased capital expenditure as the Obuasi Redevelopment Project progressed. For the year, free cash flow was
further impacted by the continued slow cash repatriation from the DRC relating to Kibali. Cumulative cash receipts from the DRC
for the year ended 31 December 2019 amounted to $75m, $23m of which was received in the fourth quarter of 2019, leaving an
attributable balance of $202m awaiting repatriation at the end of the year.
$857m in 2018. Free cash flow for the year improved by 90% to $127m in 2019, from $67m in the prior year, benefitting from an
improved received gold price which more than negated lower gold output, higher operating costs, taxes, royalties, working capital
lockups and the increased capital expenditure as the Obuasi Redevelopment Project progressed. For the year, free cash flow was
further impacted by the continued slow cash repatriation from the DRC relating to Kibali. Cumulative cash receipts from the DRC
for the year ended 31 December 2019 amounted to $75m, $23m of which was received in the fourth quarter of 2019, leaving an
attributable balance of $202m awaiting repatriation at the end of the year.
Cash flow from operating activities are reconciled to free cash flow as follows:
Year ended
December
2019
Year ended
December
2018
Net cash inflow from operating activities from continuing operations
958
856
Net cash inflow from operating activities from discontinued operations
89
1
Net cash inflow from operating activities
1,047
857
Capital expenditure and interest capitalised
(709)
(575)
Net cash from operating activities after capital expenditure
338
282
Repayment of lease liabilities
(42)
—
Finance costs accrued per income statement
(143)
(140)
Net cash flow after capital expenditure and interest
153
142
Other net cash inflow (outflow) from investing activities from continuing operations
22
12
Net cash inflow (outflow) from investing activities from discontinued operations
(54)
226
Credit facility transaction costs
—
(10)
Add backs:
Cash restricted for use
Cash restricted for use
—
6
Cash in subsidiary sold and transferred to held for sale
6
—
Proceeds on sale of Moab Khotsong and Kopanang assets
—
(309)
Free cash flow
127
67
Free cash flow for the year before growth capital increased by 106% to $448m in 2019 versus $217m in the prior year. In
September 2018, the Government of Argentina introduced the payment of export duties on exported goods. In terms of an existing
September 2018, the Government of Argentina introduced the payment of export duties on exported goods. In terms of an existing
PAGE 14
tax stability agreement, Cerro Vanguardia is entitled to a refund of these export duties. At 31 December 2019, $24m (2018: $14m)
was reflected as receivable and impacted free cash flow generated by the group.
was reflected as receivable and impacted free cash flow generated by the group.
In Tanzania, the group’s net indirect tax receivables balance increased by $35m to $119m (2018: $84m). No refunds were received
in cash in the current year, however claims relating to periods pre-July 2017, totalling $9m, have been offset against provisional
corporate tax payments in 2019 in accordance with legislation. These amounts were set off against VAT claims that had been
certified by an external advisor and verified by the Tanzania Revenue Authority (TRA). The TRA acknowledged the majority of the
offsets during December 2019. The remaining balance of the VAT receivable continues to impact free cash flow generated by the
group.
in cash in the current year, however claims relating to periods pre-July 2017, totalling $9m, have been offset against provisional
corporate tax payments in 2019 in accordance with legislation. These amounts were set off against VAT claims that had been
certified by an external advisor and verified by the Tanzania Revenue Authority (TRA). The TRA acknowledged the majority of the
offsets during December 2019. The remaining balance of the VAT receivable continues to impact free cash flow generated by the
group.
Total capital expenditure (including equity accounted investments) increased by 13% to $814m in 2019, compared to $721m in
2018. This included project capital expenditure of $321m relating to Obuasi, Siguiri, Tropicana, Mponeng and Quebradona in 2019,
compared to $150m invested in growth projects in the prior year. A further $89m was spent on exploration, of which $65m was
spent on Greenfields exploration and study costs, largely in Colombia and North America with $24m spent on non-sustaining
exploration drilling to improve mineral resources at current operations.
2018. This included project capital expenditure of $321m relating to Obuasi, Siguiri, Tropicana, Mponeng and Quebradona in 2019,
compared to $150m invested in growth projects in the prior year. A further $89m was spent on exploration, of which $65m was
spent on Greenfields exploration and study costs, largely in Colombia and North America with $24m spent on non-sustaining
exploration drilling to improve mineral resources at current operations.
Adjusted earnings before interest, tax, depreciation and amortisation (Adjusted EBITDA) rose 16% year-on-year to $1,723m in
2019, compared to $1,480m in 2018. Adjusted net debt decreased by 5% to $1.581bn ($1.572bn from continuing operations) at
31 December 2019, from $1.659bn at 31 December 2018. The ratio of Adjusted net debt to Adjusted EBITDA at the end of
December 2019 was 0.91 times compared with 1.12 times at the end of December 2018, below the targeted level of 1.0 times
through the cycle.
2019, compared to $1,480m in 2018. Adjusted net debt decreased by 5% to $1.581bn ($1.572bn from continuing operations) at
31 December 2019, from $1.659bn at 31 December 2018. The ratio of Adjusted net debt to Adjusted EBITDA at the end of
December 2019 was 0.91 times compared with 1.12 times at the end of December 2018, below the targeted level of 1.0 times
through the cycle.
As at 31 December 2019, liquidity remains strong with $1.42bn undrawn on the $1.62bn US Dollar RCF, approximately R4.65bn
available on the R5.65bn South African RCFs and other facilities, and cash and cash equivalents of $463m.
available on the R5.65bn South African RCFs and other facilities, and cash and cash equivalents of $463m.
The board approved a dividend of ZAR 165 cents per share (approximately 11 US cents per share), in line with the dividend policy
based on 10% of free cash flow, before capital growth expenditure. This compares to a dividend of ZAR 95 cents per share
(7 US cents per share) in 2018. The Board is satisfied that subsequent to the dividend declaration, the company has adequate
balance sheet flexibility and sufficient funding facilities available to withstand market volatility. The increase in the dividend reflects
management's commitment to improving shareholder returns, while maintaining disciplined capital allocation.
based on 10% of free cash flow, before capital growth expenditure. This compares to a dividend of ZAR 95 cents per share
(7 US cents per share) in 2018. The Board is satisfied that subsequent to the dividend declaration, the company has adequate
balance sheet flexibility and sufficient funding facilities available to withstand market volatility. The increase in the dividend reflects
management's commitment to improving shareholder returns, while maintaining disciplined capital allocation.
We remain subject to an uncertain tax environment. Across the group, we are due refunds for input tax and fuel duties for an amount
of $329m (2018: $276m; 2017: $252m), including attributable amounts of equity accounted joint ventures, which have remained
outstanding for periods longer than those provided for in the respective statutes. Considerable effort continues to be made to
recover these outstanding amounts.
of $329m (2018: $276m; 2017: $252m), including attributable amounts of equity accounted joint ventures, which have remained
outstanding for periods longer than those provided for in the respective statutes. Considerable effort continues to be made to
recover these outstanding amounts.
The normalised 2019 effective tax rate was 32%, unchanged from 2018. Deferred tax rate resets in Corporate South Africa (retained
operations), legislated tax rate changes in Argentina being postponed from 2020 to 2022, forex translation on non-monetary items
in South America and change in tax losses deductible during the expected tax holiday in Guinea had an impact on the tax charge
for the current year, while the prior year was influenced by legislated tax rate changes in Ghana and the tax holiday in Guinea.
operations), legislated tax rate changes in Argentina being postponed from 2020 to 2022, forex translation on non-monetary items
in South America and change in tax losses deductible during the expected tax holiday in Guinea had an impact on the tax charge
for the current year, while the prior year was influenced by legislated tax rate changes in Ghana and the tax holiday in Guinea.
In January 2020, the company entered into Asian style zero-cost collars for a total of 130,900 ounces (i.e. 70% of Cerro
Vanguardia’s annual gold production) for the period February 2020 to December 2020. The strike prices are $1,500/oz on the floor
and an average price of $1,701.34/oz on the cap.
Vanguardia’s annual gold production) for the period February 2020 to December 2020. The strike prices are $1,500/oz on the floor
and an average price of $1,701.34/oz on the cap.
In February 2020, the company entered into Asian style zero-cost collars for a total of approximately 342,000 barrels of Brent crude
oil for the period February 2020 to December 2020. The average strike prices are $45 per barrel on the floor and an average price
of $65 per barrel on the cap. In addition, the company entered into further Asian style zero-cost collars for a total of approximately
622,000 barrels of Brent crude oil for the period March 2020 to December 2020. The average strike prices are $44.50 per barrel on
the floor and an average price of $65 per barrel on the cap. These derivatives constitute one third of the group’s fuel consumption
for 2020.
oil for the period February 2020 to December 2020. The average strike prices are $45 per barrel on the floor and an average price
of $65 per barrel on the cap. In addition, the company entered into further Asian style zero-cost collars for a total of approximately
622,000 barrels of Brent crude oil for the period March 2020 to December 2020. The average strike prices are $44.50 per barrel on
the floor and an average price of $65 per barrel on the cap. These derivatives constitute one third of the group’s fuel consumption
for 2020.
More detailed notes and analyses of the group’s income statement, statement of financial position and statement of cash flow for
2019 are available in the group financial statements for 2019.
2019 are available in the group financial statements for 2019.
LOOKING AHEAD TO 2020
We have a number of key catalysts we intend to focus on in 2020. Our strong focus on ESG related matters is paying dividends
and we will specifically continue our focus and attention on improving our safety record. We have made good progress in
streamlining the portfolio and our continued focus in 2020 will be on the successful commissioning of Phase 2 of the Obuasi project
by the end of the year. Simultaneously, we expect that our planned increased Ore Reserve Development and Mineral Resource
Conversion over the course of 2020 and 2021 will provide positive results in the medium term. Our additional anticipated sustaining
capital spend for 2020 is estimated at $30/oz. We expect to close on all the ongoing, announced divestment processes.
and we will specifically continue our focus and attention on improving our safety record. We have made good progress in
streamlining the portfolio and our continued focus in 2020 will be on the successful commissioning of Phase 2 of the Obuasi project
by the end of the year. Simultaneously, we expect that our planned increased Ore Reserve Development and Mineral Resource
Conversion over the course of 2020 and 2021 will provide positive results in the medium term. Our additional anticipated sustaining
capital spend for 2020 is estimated at $30/oz. We expect to close on all the ongoing, announced divestment processes.
We expect to continue to improve cash flows, potentially resulting in further increases in our dividend pay-outs. Our leverage is
currently at the target level we would like to maintain through the cycle and, given the strong fundamentals in place currently, we
currently at the target level we would like to maintain through the cycle and, given the strong fundamentals in place currently, we
PAGE 15
expect further improvement on this leverage. We aim to achieve all of this while remaining disciplined in managing costs and capital
expenditure, thereby optimising current operating margins.
expenditure, thereby optimising current operating margins.
Sensitivities on key economic metrics based on budgeted economic assumptions for 2020 are as follows:
Cash from operating
activities before taxes for
Sensitivity*
AISC ($/oz)
2020 ($m)
10% change in the oil price
6
19
10% change in local currency
54
146
10% change in the gold price
5
401
50koz change in production
16
62
*
All the sensitivities based on $1,300/oz gold price and assumptions used for guidance.
Currency and commodity assumptions
2020
$/R exchange rate
15.00
A$/$ exchange rate
0.70
$/BRL exchange rate
3.95
$/ARS exchange rate
70.00
Oil ($/bbl)
65
COVID-19 virus pandemic, guidance and liquidity
At the date of the approval of these financial results, the COVID-19 virus outbreak continues to spread across the globe and
contributes to economic instability in global financial markets. The outbreak was declared a global pandemic on 11 March 2020 by
the World Health Organization (WHO) and since then has resulted in numerous governments and other organisations, including
AngloGold Ashanti, introducing a variety of measures to curb the spread of the virus. To date, we have taken a number of proactive
steps to protect our employees, our host communities and business, in line with the company’s values, guidelines and advice
provided by the WHO and within the requirements of the countries in which we operate. The health and wellbeing of our employees
and our host communities remains a key priority. Cases of the outbreak have been reported in all of the jurisdictions in which we
operate, and it may lead to a prolonged restriction on the movement of people and continued requirement for people to self-isolate
or be quarantined.
contributes to economic instability in global financial markets. The outbreak was declared a global pandemic on 11 March 2020 by
the World Health Organization (WHO) and since then has resulted in numerous governments and other organisations, including
AngloGold Ashanti, introducing a variety of measures to curb the spread of the virus. To date, we have taken a number of proactive
steps to protect our employees, our host communities and business, in line with the company’s values, guidelines and advice
provided by the WHO and within the requirements of the countries in which we operate. The health and wellbeing of our employees
and our host communities remains a key priority. Cases of the outbreak have been reported in all of the jurisdictions in which we
operate, and it may lead to a prolonged restriction on the movement of people and continued requirement for people to self-isolate
or be quarantined.
A cross-functional team, including operations, technical, finance, health, community, government relations and other support
disciplines, is helping to guide the response to the crisis. The company has for some time employed increased screening and
surveillance of employees, stopped non-essential travel, instituted mandatory quarantine for arriving travelers and increased
hygiene awareness across its operations, in addition to a range of other measures to mitigate the risks presented by the virus. It
has also worked with local communities to help bolster their responses to the outbreak. These initiatives have complemented
government responses in each of its operating jurisdictions.
disciplines, is helping to guide the response to the crisis. The company has for some time employed increased screening and
surveillance of employees, stopped non-essential travel, instituted mandatory quarantine for arriving travelers and increased
hygiene awareness across its operations, in addition to a range of other measures to mitigate the risks presented by the virus. It
has also worked with local communities to help bolster their responses to the outbreak. These initiatives have complemented
government responses in each of its operating jurisdictions.
As a precaution against the potential effects of the pandemic on our ability to secure spares and consumables, our supply chain
teams have proactively placed orders to build increased safety stocks on critical items at our operations. Specific inventories
depend on the level of risk identified in each region, lead time considerations, and storage capacity. In general, we are targeting
inventories of three to six months on primary consumables, while recognising we have the support of strategic partnerships with
key suppliers who themselves are maintaining inventories in the respective regions for many critical items.
teams have proactively placed orders to build increased safety stocks on critical items at our operations. Specific inventories
depend on the level of risk identified in each region, lead time considerations, and storage capacity. In general, we are targeting
inventories of three to six months on primary consumables, while recognising we have the support of strategic partnerships with
key suppliers who themselves are maintaining inventories in the respective regions for many critical items.
More specifically, the near-term supply chain outlook remains positive, while mid to long term uncertainty (i.e. 4 to 8 months) is
being actively managed as follows:
being actively managed as follows:
• We are pro-actively placing orders to increase safety stocks on critical consumable items at our operations.
• We have strong supplier relationships and a globally diversified supply base which minimises the risk of global interruptions.
• Potential supply chain risks are currently limited to base metals and steel sourced from China impacting grinding media required
at our operations. However, we do not rely solely on Chinese steel for our grinding media.
• Minimal risks have been identified thus far for the supply of mining equipment over the next 12 months, however, we are starting
to see lead times increasing.
• We have noted lead times extending for lower value protective gear and equipment, however, alternative sources for these
items have been identified.
• We have strong supplier relationships and a globally diversified supply base which minimises the risk of global interruptions.
• Potential supply chain risks are currently limited to base metals and steel sourced from China impacting grinding media required
at our operations. However, we do not rely solely on Chinese steel for our grinding media.
• Minimal risks have been identified thus far for the supply of mining equipment over the next 12 months, however, we are starting
to see lead times increasing.
• We have noted lead times extending for lower value protective gear and equipment, however, alternative sources for these
items have been identified.
We are proactively managing the gold shipments logistics through alternative flight routes and air charters due to cancellation of
flights by certain airlines and closure of ports in various jurisdictions in order to avoid shipment delays of gold doré bars to refineries.
flights by certain airlines and closure of ports in various jurisdictions in order to avoid shipment delays of gold doré bars to refineries.
Any self-imposed or government-mandated lockdowns may disrupt the company’s activities and operations and even lead to a full
or partial temporary suspension of the company’s mining operations in those jurisdictions. On 21 March 2020, following the
Argentinian government’s decision to impose a nationwide lockdown (quarantine) until 31 March 2020, including temporary travel
restrictions, border closings and suspension of most industries, Cerro Vanguardia S.A. (CVSA) was required to temporarily suspend
mining activities.
or partial temporary suspension of the company’s mining operations in those jurisdictions. On 21 March 2020, following the
Argentinian government’s decision to impose a nationwide lockdown (quarantine) until 31 March 2020, including temporary travel
restrictions, border closings and suspension of most industries, Cerro Vanguardia S.A. (CVSA) was required to temporarily suspend
mining activities.
PAGE 16
On 23 March 2020, the South African government announced a 21-day nationwide lockdown, effective from midnight on 26 March
2020, resulting in the temporary suspension of mining activities of the company’s South African operations particularly Mponeng,
and the partial suspension of mining activities at Mine Waste Solutions (MWS) and Surface Operations.
2020, resulting in the temporary suspension of mining activities of the company’s South African operations particularly Mponeng,
and the partial suspension of mining activities at Mine Waste Solutions (MWS) and Surface Operations.
On 26 March 2020, the State of Goiás, in Brazil, extended a set of restrictions on the operation of non-essential business to include
mining. These restrictions are set to run through 4 April 2020. Mineração Serra Grande S.A. will temporarily suspend its operations.
mining. These restrictions are set to run through 4 April 2020. Mineração Serra Grande S.A. will temporarily suspend its operations.
The current impact of all of the suspended operations is expected to be about 30,000oz to 40,000oz, or less than 2% of annual
production. In these countries, the suspension of mining activities will continue for the period during which the respective restrictions
remain in force.
production. In these countries, the suspension of mining activities will continue for the period during which the respective restrictions
remain in force.
The rest of AngloGold Ashanti’s mines in its diversified portfolio of 14 assets in nine countries, continue to operate. For the sites
where production has been suspended, plans for a safe and smooth ramp-up, and for safely regaining part of the delayed
production, are being developed.
where production has been suspended, plans for a safe and smooth ramp-up, and for safely regaining part of the delayed
production, are being developed.
The pandemic, if prolonged, would have a wide range of impacts, including the direct consequences of the virus on the health of
employees and communities, but also the consequent restrictions to travel and work put in place by governments to slow its spread.
There would also be indirect consequences, including the reduced ability to effectively move people, supplies and equipment to
sites. These may cause production interruptions through further suspensions of mining activities or delays to projects. We are in
the process of designing the necessary contingency plans to mitigate these risks.
employees and communities, but also the consequent restrictions to travel and work put in place by governments to slow its spread.
There would also be indirect consequences, including the reduced ability to effectively move people, supplies and equipment to
sites. These may cause production interruptions through further suspensions of mining activities or delays to projects. We are in
the process of designing the necessary contingency plans to mitigate these risks.
The company had a good start to the year, and notwithstanding the suspended production in South Africa and Argentina remains
well on track to meet its annual guidance. Nonetheless, given the uncertainties with respect to future developments, including
duration, severity and scope of the COVID-19 pandemic and the necessary government responses to limiting its spread, the board
has decided to withdraw its market guidance for 2020 published as part of its preliminary condensed consolidated financial results
on 21 February 2020, at this time.
well on track to meet its annual guidance. Nonetheless, given the uncertainties with respect to future developments, including
duration, severity and scope of the COVID-19 pandemic and the necessary government responses to limiting its spread, the board
has decided to withdraw its market guidance for 2020 published as part of its preliminary condensed consolidated financial results
on 21 February 2020, at this time.
We will continue to focus on the necessary steps to protect people, work to meet production targets and secure the longer-term
future of the business during this period of uncertainty.
future of the business during this period of uncertainty.
We are implementing cash conservation measures, including focused capital prioritisation and reducing non-essential spending
across the business.
across the business.
The company has drawn down $1.4bn on its US Dollar RCF to cater for the $700m bond redemption due mid-April 2020 and to
provide additional liquidity headroom. After the drawdowns, cash on hand is about $1.8bn (excluding cash lock-up positions at
Kibali and Sadiola, where AngloGold Ashanti’s combined share totals about $300m).
provide additional liquidity headroom. After the drawdowns, cash on hand is about $1.8bn (excluding cash lock-up positions at
Kibali and Sadiola, where AngloGold Ashanti’s combined share totals about $300m).
Management will continue to take a prudent and proactive approach to managing the group’s liquidity, which may include procuring
additional credit facilities or debt over and above its current facilities.
additional credit facilities or debt over and above its current facilities.
Summary
In summary, priorities for 2020 are:
• Continued focus on sustainability and safety improvements
• Target increased reserve conversion through additional investment in Ore Reserve Development and Mineral Resource
Conversion
• Aim to successfully complete divestment processes
• Obuasi phase 2 commissioning
• Optimise margins and cash conversion
• Enforce capital discipline in a rising gold price environment
• Proactively manage the emerging risks relating to the Corona virus pandemic from an operational, liquidity, working capital and
supply chain perspective
• Focus on cash conservation measures including reducing corporate costs and AISC
• Pursue optimal financing alternatives for the group to preserve liquidity
• Target increased reserve conversion through additional investment in Ore Reserve Development and Mineral Resource
Conversion
• Aim to successfully complete divestment processes
• Obuasi phase 2 commissioning
• Optimise margins and cash conversion
• Enforce capital discipline in a rising gold price environment
• Proactively manage the emerging risks relating to the Corona virus pandemic from an operational, liquidity, working capital and
supply chain perspective
• Focus on cash conservation measures including reducing corporate costs and AISC
• Pursue optimal financing alternatives for the group to preserve liquidity
ACKNOWLEDGEMENT
I wish to record my gratitude to the broader finance team across the group which includes the financial reporting, tax, treasury,
information management, global supply chain and internal audit functions. These functions work together seamlessly to ensure that
we proactively manage risk, ensuring that we have robust financial systems in place to maintain a strong internal control
environment whilst enabling relevant, timely financial reporting that inform business decisions. Our strong track record of achieving
our financial KPIs is testimony to the strong calibre of our financial team. I look forward to the year ahead with enthusiasm, focusing
on our strategic objectives and improving returns to our shareholders.
information management, global supply chain and internal audit functions. These functions work together seamlessly to ensure that
we proactively manage risk, ensuring that we have robust financial systems in place to maintain a strong internal control
environment whilst enabling relevant, timely financial reporting that inform business decisions. Our strong track record of achieving
our financial KPIs is testimony to the strong calibre of our financial team. I look forward to the year ahead with enthusiasm, focusing
on our strategic objectives and improving returns to our shareholders.
Warm regards
Christine Ramon
Chief Financial Officer
27 March 2020
27 March 2020
DIRECTORS’ APPROVAL
PAGE 17
In accordance with Section 30(3)(c) of the Companies Act, No. 71 of 2008, as amended, the annual financial statements for the year
ended 31 December 2019 were approved by the board of directors on 19 March 2020 and are signed on its behalf by:
ended 31 December 2019 were approved by the board of directors on 19 March 2020 and are signed on its behalf by:
DIRECTORS
SM Pityana
, Chairman
KPM Dushnisky
, Chief Executive Officer
KC Ramon
, Chief Financial Officer
R Gasant
, Chairman: Audit and Risk Committee
SECRETARY’S CERTIFICATE
In terms of Section 88(2)(e) of the Companies Act, No. 71 of 2008, as amended, I certify that the company has lodged with the
Companies and Intellectual Property Commission all such returns and notices as are required of a public company in terms of the
Act, and that all such returns and notices are true, correct and up-to-date.
Companies and Intellectual Property Commission all such returns and notices as are required of a public company in terms of the
Act, and that all such returns and notices are true, correct and up-to-date.
ME Sanz Perez
Company Secretary
Johannesburg
27 March 2020
Johannesburg
27 March 2020
AFFIRMATION OF FINANCIAL STATEMENTS
In accordance with Section 30(2) and 30(3) of the Companies Act, No. 71 of 2008, as amended, the annual financial statements
for AngloGold Ashanti Limited, registration number 1944/017354/06 (AngloGold Ashanti), for the year ended 31 December 2019,
have been audited by Ernst & Young Inc., the company’s independent external auditors, whose unqualified audit opinion can be
found under Independent Auditor’s Report, on page 25.
for AngloGold Ashanti Limited, registration number 1944/017354/06 (AngloGold Ashanti), for the year ended 31 December 2019,
have been audited by Ernst & Young Inc., the company’s independent external auditors, whose unqualified audit opinion can be
found under Independent Auditor’s Report, on page 25.
The financial statements have been prepared by the corporate reporting staff of AngloGold Ashanti, headed by Ian Kramer (CA (SA)),
the Senior Vice President: Finance. This process was supervised by Kandimathie Christine Ramon (CA (SA)), the group’s
Chief Financial Officer and Kelvin Dushnisky (B.SC (Honours); M.Sc; Juris Doctor), the group’s Chief Executive Officer.
the Senior Vice President: Finance. This process was supervised by Kandimathie Christine Ramon (CA (SA)), the group’s
Chief Financial Officer and Kelvin Dushnisky (B.SC (Honours); M.Sc; Juris Doctor), the group’s Chief Executive Officer.
DIRECTORS’ REPORT
PAGE 18
150,000,000
1,000,000
50,000
0
600,000,000 ordinary shares of 25 South African cents each
2,000,000 A redeemable preference shares of 50 South African cents each
5,000,000 B redeemable preference shares of 1 South African cent each
30,000,000 C redeemable preference shares of no par value
2,000,000 A redeemable preference shares of 50 South African cents each
5,000,000 B redeemable preference shares of 1 South African cent each
30,000,000 C redeemable preference shares of no par value
SA Rands
Currency and commodity assumptions
FOR THE YEAR ENDED 31 DECEMBER
NATURE OF BUSINESS
AngloGold Ashanti conducts mining operations in Africa, South America and Australia, and undertakes exploration activities in
these jurisdictions as well as North America. At certain of its operations, AngloGold Ashanti produces silver and sulphuric acid as
by-products in the course of producing gold.
these jurisdictions as well as North America. At certain of its operations, AngloGold Ashanti produces silver and sulphuric acid as
by-products in the course of producing gold.
A review of the unaudited performance of the various operations is available in the operational profiles on AngloGold Ashanti’s
annual report website www.aga-reports.com.
annual report website www.aga-reports.com.
SHAREHOLDERS HOLDING 10% OR MORE OF ANGLOGOLD ASHANTI’S ISSUED SHARE CAPITAL
As at 31 December 2019, no shareholder held 10% or more of the Company’s issued share capital. This does not take cognisance
of the shares held by the Bank of New York Mellon as depositary for the AngloGold Ashanti American Depository Receipt (ADR)
programme.
of the shares held by the Bank of New York Mellon as depositary for the AngloGold Ashanti American Depository Receipt (ADR)
programme.
SHARE CAPITAL
AUTHORISED
The authorised share capital of AngloGold Ashanti as at 31 December 2019 was made up as follows:
The following are the movements in the issued and unissued share capital from 1 January 2019 to 28 February 2020:
ISSUED
Ordinary shares
Number of
Shares
Value
SA Rands
Number of
Shares
Value
SA Rands
2019
2018
At 1 January
412,769,980
103,192,495
410,054,615
102,513,654
Exercise of options by participants in the AngloGold Ashanti
Share Incentive Scheme
2,531,235
632,809
2,715,365
678,841
At 31 December
(1)
415,301,215
103,825,304
412,769,980
103,192,495
At 31 December
(1)
415,301,215
103,825,304
Issued subsequent to year-end:
Exercise of options by participants in the AngloGold Ashanti
Share Incentive Scheme
Exercise of options by participants in the AngloGold Ashanti
Share Incentive Scheme
588,422
147,106
At 28 February 2020
415,889,637
103,972,410
(1
)
Share capital of $17m (2018: $16m) is translated at historical rates of exchange at the reporting dates. Refer to group financial statements note 25.
Redeemable preference shares
The A and B redeemable preference shares, all of which are held by the wholly owned subsidiary, Eastvaal Gold Holdings Limited,
may not be transferred. No further A and B redeemable preference shares will be issued. C redeemable preference shares which
may only be issued to AngloGold Ashanti Limited or its subsidiaries, have not been issued at 19 March 2020. The cancellation of
all A, B and C redeemable preference shares is in process.
may not be transferred. No further A and B redeemable preference shares will be issued. C redeemable preference shares which
may only be issued to AngloGold Ashanti Limited or its subsidiaries, have not been issued at 19 March 2020. The cancellation of
all A, B and C redeemable preference shares is in process.
Further details of the authorised and issued shares, as well as the share premium, are given in group financial statements note 25.
PAGE 19
UNISSUED ORDINARY SHARES
Number of ordinary shares
2019
2018
At 1 January
187,230,020
189,945,385
Issued during the year
(2,531,235)
(2,715,365)
At 31 December
184,698,785
187,230,020
Issues subsequent to year-end
(588,422)
At 28 February 2020
184,110,363
ORDINARY SHARES UNDER THE CONTROL OF THE DIRECTORS
Pursuant to the authority granted by shareholders at the Annual General Meeting held on 9 May 2019, 5% of the shares in issue
as at 19 March 2019 were placed under the control of the directors to allot and issue, for such purposes and on such terms as the
directors, in their discretion, may determine. The total number of shares placed under the control of the directors was 20,689,815.
No shares were issued during 2019 by the directors in terms of this authority, which will expire at the close of the next Annual
General Meeting, unless renewed.
as at 19 March 2019 were placed under the control of the directors to allot and issue, for such purposes and on such terms as the
directors, in their discretion, may determine. The total number of shares placed under the control of the directors was 20,689,815.
No shares were issued during 2019 by the directors in terms of this authority, which will expire at the close of the next Annual
General Meeting, unless renewed.
Shareholders will therefore be asked at the next Annual General Meeting to renew this authority by placing 5% of the number of
shares in issue under the control of the directors to allot and issue, for such purposes and on such terms as the directors, at their
discretion, may determine.
shares in issue under the control of the directors to allot and issue, for such purposes and on such terms as the directors, at their
discretion, may determine.
In terms of the Listings Requirements of the JSE, shareholders may, subject to certain conditions, authorise the directors to issue
the ordinary shares held under their control for cash other than by means of a rights offer to shareholders. To enable the directors
of the company to take advantage of favourable business opportunities which may arise for the issue of such ordinary shares for
cash, without restriction, for the benefit of the company, shareholders will be asked to consider an ordinary resolution to this effect
at the next Annual General Meeting.
the ordinary shares held under their control for cash other than by means of a rights offer to shareholders. To enable the directors
of the company to take advantage of favourable business opportunities which may arise for the issue of such ordinary shares for
cash, without restriction, for the benefit of the company, shareholders will be asked to consider an ordinary resolution to this effect
at the next Annual General Meeting.
Shareholders will also be asked to approve as a general authority, the acquisition by the company, or a subsidiary of the company,
of its own shares from its issued ordinary share capital for certain specific housekeeping reasons.
of its own shares from its issued ordinary share capital for certain specific housekeeping reasons.
DEPOSITARY INTERESTS
American Depositary Shares
At 31 December 2019, the company had in issue, through The Bank of New York Mellon as Depositary and listed on the New York
Stock Exchange (NYSE) 159,693,546 (2018: 183,174,711), American Depositary Shares (ADSs). Each ADS is equal to one
AngloGold Ashanti ordinary share. At 28 February 2020, there were 156,444,351 ADSs in issue and listed on the NYSE.
Stock Exchange (NYSE) 159,693,546 (2018: 183,174,711), American Depositary Shares (ADSs). Each ADS is equal to one
AngloGold Ashanti ordinary share. At 28 February 2020, there were 156,444,351 ADSs in issue and listed on the NYSE.
CHESS Depositary Interests
At 31 December 2019, the company had in issue, through the Clearing House Electronic Sub-register System (CHESS), and listed
on the Australian Securities Exchange (ASX), 91,091,555 (2018: 91,751,740) CHESS Depositary Interests (CDI). At
28 February 2020 there were 91,396,655 CDI’s in issue. Every five CDIs are equivalent to one AngloGold Ashanti ordinary share
and carry the right to one vote.
on the Australian Securities Exchange (ASX), 91,091,555 (2018: 91,751,740) CHESS Depositary Interests (CDI). At
28 February 2020 there were 91,396,655 CDI’s in issue. Every five CDIs are equivalent to one AngloGold Ashanti ordinary share
and carry the right to one vote.
Ghanaian Depositary Shares
At 31 December 2019, the company had in issue, through NTHC Limited as Depositary and listed on the Ghana Stock
Exchange (GhSE), 15,844,397 Ghanaian Depositary Shares (GhDSs) (2018: 15,959,100). At 28 February 2020 there were
15,844,800 GhDSs in issue. Every 100 GhDSs are equivalent to one underlying AngloGold Ashanti ordinary share and carry the
right to one vote.
Exchange (GhSE), 15,844,397 Ghanaian Depositary Shares (GhDSs) (2018: 15,959,100). At 28 February 2020 there were
15,844,800 GhDSs in issue. Every 100 GhDSs are equivalent to one underlying AngloGold Ashanti ordinary share and carry the
right to one vote.
ANGLOGOLD ASHANTI SHARE INCENTIVE SCHEME
AngloGold Ashanti operates a share incentive scheme through which Executive Directors, members of the Executive Committee
and other management groups of the company and its subsidiaries are given the opportunity to acquire shares in the company.
The intention of the incentive scheme is to ensure that the medium to long term interests of the executive and shareholders are
aligned, providing rewards to the executives and wealth creation opportunities to the shareholders when the strategic performance
drivers are achieved.
and other management groups of the company and its subsidiaries are given the opportunity to acquire shares in the company.
The intention of the incentive scheme is to ensure that the medium to long term interests of the executive and shareholders are
aligned, providing rewards to the executives and wealth creation opportunities to the shareholders when the strategic performance
drivers are achieved.
Non-Executive Directors are not eligible to participate in the share incentive scheme.
Employees participate in the share incentive scheme to the extent that they are granted options or rights to acquire shares and
accept them. All options or rights which have not been exercised within ten years from the date of grant, automatically expire.
accept them. All options or rights which have not been exercised within ten years from the date of grant, automatically expire.
The incentives offered by AngloGold Ashanti are reviewed periodically to ensure that they remain globally competitive, so as to
attract, reward and retain managers of the highest calibre. As a result, several types of incentives, each with their own issue and
vesting criteria, have been granted to employees. These are collectively known as the “AngloGold Ashanti Share Incentive Scheme”
or “Share Incentive Scheme”.
attract, reward and retain managers of the highest calibre. As a result, several types of incentives, each with their own issue and
vesting criteria, have been granted to employees. These are collectively known as the “AngloGold Ashanti Share Incentive Scheme”
or “Share Incentive Scheme”.
Although the Remuneration and Human Resources Committee has the discretion to incentivise employees through the issue of
shares, only options or awards have so far been granted.
shares, only options or awards have so far been granted.
PAGE 20
The type and vesting criteria of the options or awards granted are:
BONUS SHARE PLAN (BSP)
The granting of awards in terms of the BSP was approved by shareholders at the Annual General Meeting held on 29 April 2005.
The last BSP awards were granted in 2018 and it is not anticipated that further awards will be granted in future.
The last BSP awards were granted in 2018 and it is not anticipated that further awards will be granted in future.
LONG TERM INCENTIVE PLAN (LTIP)
The granting of awards in terms of the LTIP was approved by shareholders at the Annual General Meeting held on 29 April 2005.
No new LTIP awards were granted since 2018, and it is not anticipated that further LTIP awards will be granted in future. The 2016
and 2017 awards were granted as cash settled awards (CSLTIP).
No new LTIP awards were granted since 2018, and it is not anticipated that further LTIP awards will be granted in future. The 2016
and 2017 awards were granted as cash settled awards (CSLTIP).
CO-INVESTMENT PLAN (CIP)
To assist executives in meeting their Minimum Shareholding Requirements (MSR’s) with effect from February 2013 they were given
the opportunity, on a voluntary basis, to participate in the Co-Investment Plan (CIP). The last CIP awards were granted in 2018 and
it is not anticipated that CIP awards will be granted in future.
the opportunity, on a voluntary basis, to participate in the Co-Investment Plan (CIP). The last CIP awards were granted in 2018 and
it is not anticipated that CIP awards will be granted in future.
DEFERRED SHARE PLAN (DSP)
On 16 May 2017, the shareholders approved the introduction of the Deferred Share Plan to replace both the BSP and LTIP schemes
with effect from 1 January 2018. The DSP, designed with feedback from shareholders in mind, aims to better align the interests of
company management with those of shareholders by, among others rewarding decision-making that promotes the long term health
of the business by increasing the maximum vesting period of shares from two to five years, and introducing a claw-back provision;
reducing the impact of uncontrollable factors, like gold price and currency fluctuations, in determining remuneration; providing better
incentive for prudent, value-adding capital allocation; capping the number of shares that can be issued under the DSP in any given
year to 1% of total shares in issue; and providing greater incentives for excellence in the broad area of sustainability, which covers
the safety, environmental, governance, community relations and human capital disciplines.
with effect from 1 January 2018. The DSP, designed with feedback from shareholders in mind, aims to better align the interests of
company management with those of shareholders by, among others rewarding decision-making that promotes the long term health
of the business by increasing the maximum vesting period of shares from two to five years, and introducing a claw-back provision;
reducing the impact of uncontrollable factors, like gold price and currency fluctuations, in determining remuneration; providing better
incentive for prudent, value-adding capital allocation; capping the number of shares that can be issued under the DSP in any given
year to 1% of total shares in issue; and providing greater incentives for excellence in the broad area of sustainability, which covers
the safety, environmental, governance, community relations and human capital disciplines.
The first awards under this scheme, totalling 1,669,191 awards, were granted during 2019 for the 2018 performance year.
CHANGES IN OPTIONS AND AWARDS
In accordance with the JSE Listings Requirements and the rules of the AngloGold Ashanti Share Incentive Scheme, the changes
in options, awards and share units granted and the ordinary shares issued as a result of the vesting and/or exercise of options,
awards and share units during the period 1 January 2019 to 28 February 2020 are disclosed below:
in options, awards and share units granted and the ordinary shares issued as a result of the vesting and/or exercise of options,
awards and share units during the period 1 January 2019 to 28 February 2020 are disclosed below:
Bonus Share
Plan
Long Term
Incentive Plan
Cash-settled
Long Term
Incentive Plan
Deferred
Share Plan
Total Share
Incentive
Scheme
Scheme
At 1 January 2019
Movement during year
- Granted
Movement during year
- Granted
(1)
4,557,919
447,842
3,815,761
—
1,669,191
8,821,522
1,669,191
- Exercised/vested
(2,307,439)
(218,203)
(1,029,438)
(14,623)
(3,569,703)
- Lapsed/forfeited
(109,065)
—
(1,305,761)
(55,208)
(1,470,034)
At 31 December 2019
2,141,415
229,639
1,480,562
1,599,360
5,450,976
Subsequent to year-end
Exercised/vested
(423,934)
(9,314)
—
(152,158)
(585,406)
At 28 February 2020
1,717,481
220,325 1,480,562
(2)
1,447,202
4,865,570
(1)
Awards were granted at no cost to participants
(2)
Cash-settled Long Term Incentive Plan vested on 1 March 2020
DIVIDEND POLICY
Dividends are proposed by, and approved by the Board of Directors of AngloGold Ashanti, based on the Company’s financial
performance. The dividend policy provides for an annual dividend to be based on 10% of the free cash flow, before growth capital
expenditure, generated by the business for that financial year. Furthermore, this is subject to the board exercising its discretion on
an annual basis, after taking into consideration the prevailing market conditions, balance sheet flexibility and future capital
commitments of the group.
performance. The dividend policy provides for an annual dividend to be based on 10% of the free cash flow, before growth capital
expenditure, generated by the business for that financial year. Furthermore, this is subject to the board exercising its discretion on
an annual basis, after taking into consideration the prevailing market conditions, balance sheet flexibility and future capital
commitments of the group.
For the year ended 31 December 2019, the directors of AngloGold Ashanti declared a gross cash dividend per ordinary share of
165 South African cents (assuming an exchange rate of ZAR 15/$, the gross dividend payable per ADS is equivalent to
~11 US cents).
165 South African cents (assuming an exchange rate of ZAR 15/$, the gross dividend payable per ADS is equivalent to
~11 US cents).
The board is satisfied that subsequent to the dividend declaration, the Company has adequate balance sheet flexibility and sufficient
funding facilities available to withstand market volatility. The continuation of the dividend reflects capital discipline and
management's commitment to improving shareholder returns.
funding facilities available to withstand market volatility. The continuation of the dividend reflects capital discipline and
management's commitment to improving shareholder returns.
PAGE 21
Dematerialised shareholders on the South African share register will receive payment of their dividends electronically through their
Central Securities Depository Participant or broker. Certificated shareholders, who have made this election, will receive their
dividends electronically via an electronic funds transfer directly into their mandated bank accounts. Certificated shareholders who
have not yet elected to receive dividend payments electronically, are encouraged to mandate this method of payment for all future
dividends.
Central Securities Depository Participant or broker. Certificated shareholders, who have made this election, will receive their
dividends electronically via an electronic funds transfer directly into their mandated bank accounts. Certificated shareholders who
have not yet elected to receive dividend payments electronically, are encouraged to mandate this method of payment for all future
dividends.
WITHHOLDING TAX
Withholding tax of 20% on dividends and other distributions payable to shareholders are in effect from 1 March 2017.
BORROWINGS
The company’s borrowing powers are unlimited pursuant to the company’s Memorandum of Incorporation. As at
31 December 2019, the group’s gross borrowings (excluding lease liabilities) totalled $2,033m (2018: $2,050m).
31 December 2019, the group’s gross borrowings (excluding lease liabilities) totalled $2,033m (2018: $2,050m).
OTHER MATTERS
SIGNIFICANT EVENTS DURING THE YEAR UNDER REVIEW
AngloGold Ashanti starts process to review divestment options for South African assets - On 9 May 2019, AngloGold
Ashanti announced that it was embarking on a process to review divestment options for its remaining South African assets. This
process will consider all ownership options, with a view to maximising the value and future prospects of these assets.
Ashanti announced that it was embarking on a process to review divestment options for its remaining South African assets. This
process will consider all ownership options, with a view to maximising the value and future prospects of these assets.
Court approval of settlement of the silicosis and TB class action - On 26 July 2019, the Johannesburg High Court approved
the settlement of the silicosis and tuberculosis class action and the settlement agreement came into effect on 10 December 2019.
The settlement is between AngloGold Ashanti, African Rainbow Minerals, Anglo American SA, Gold Fields, Harmony and Sibanye
Stillwater; the settlement classes’ representatives and the settlement classes’ attorneys Richard Spoor Inc, Abrahams Kiewitz Inc
and the Legal Resources Centre.
the settlement of the silicosis and tuberculosis class action and the settlement agreement came into effect on 10 December 2019.
The settlement is between AngloGold Ashanti, African Rainbow Minerals, Anglo American SA, Gold Fields, Harmony and Sibanye
Stillwater; the settlement classes’ representatives and the settlement classes’ attorneys Richard Spoor Inc, Abrahams Kiewitz Inc
and the Legal Resources Centre.
B2Gold to earn management of Gramalote Project - On 16 September 2019, AngloGold Ashanti announced an agreement with
B2Gold, its joint venture partner at the Gramalote Project in Colombia, whereby B2Gold will fund an investment and exploration
programme in 2020 to the value of $13.9m, in order to earn back to a 50:50 partnership and assume management of the project
effective 1 January 2020.
B2Gold, its joint venture partner at the Gramalote Project in Colombia, whereby B2Gold will fund an investment and exploration
programme in 2020 to the value of $13.9m, in order to earn back to a 50:50 partnership and assume management of the project
effective 1 January 2020.
Obuasi Gold Mine pours first gold - On 18 December 2019, AngloGold Ashanti (Ghana), a wholly owned subsidiary of AngloGold
Ashanti, has achieved its first pour of gold from the Obuasi Gold Mine, signaling the successful redevelopment of the mine into a
modern, mechanized mining operation since mining activities were suspended five years ago.
Ashanti, has achieved its first pour of gold from the Obuasi Gold Mine, signaling the successful redevelopment of the mine into a
modern, mechanized mining operation since mining activities were suspended five years ago.
Sale interest in the Sadiola Mine - On 23 December 2019, AngloGold Ashanti announced that it together with its joint venture
partner, IAMGOLD Corporation (IAMGOLD), had agreed to sell their interests in Société d’Exploitation des Mines d’Or de Sadiola
S.A. (Sadiola) to Allied Gold Corp (Allied Gold). Sadiola's principal asset is the Sadiola Mine located in the Kayes region of Western
Mali. AngloGold Ashanti and IAMGOLD each hold a 41% interest in Sadiola with the remaining 18% interest held by the Government
of Mali.
partner, IAMGOLD Corporation (IAMGOLD), had agreed to sell their interests in Société d’Exploitation des Mines d’Or de Sadiola
S.A. (Sadiola) to Allied Gold Corp (Allied Gold). Sadiola's principal asset is the Sadiola Mine located in the Kayes region of Western
Mali. AngloGold Ashanti and IAMGOLD each hold a 41% interest in Sadiola with the remaining 18% interest held by the Government
of Mali.
The transaction is subject to the fulfillment, or waiver, of a number of conditions precedent, including the receipt of certain approvals
and releases from the Government of Mali. AngloGold Ashanti received approval from the South African Reserve Bank in early
2020. It is anticipated that all conditions precedent will be fulfilled or waived by the end of April 2020. Refer note 9.
and releases from the Government of Mali. AngloGold Ashanti received approval from the South African Reserve Bank in early
2020. It is anticipated that all conditions precedent will be fulfilled or waived by the end of April 2020. Refer note 9.
SIGNIFICANT EVENTS SUBSEQUENT TO YEAR-END
Sale of South African assets - On 12 February 2020, AngloGold Ashanti announced that it has reached an agreement to sell its
remaining South African producing assets and related liabilities to Harmony Gold Mining Company Limited. Consideration for the
transaction is in cash and deferred payments with expected proceeds of around $300m, subject to subsequent performance, and
with additional proceeds if the West Wits assets are developed below current infrastructure. Refer to note 9.
remaining South African producing assets and related liabilities to Harmony Gold Mining Company Limited. Consideration for the
transaction is in cash and deferred payments with expected proceeds of around $300m, subject to subsequent performance, and
with additional proceeds if the West Wits assets are developed below current infrastructure. Refer to note 9.
Geita underground mine permit - In March 2020, GGML received the consent of the Minister of Minerals to change the mining
method under our Special Mining License from open pit to underground method, subject to the requisite terms and conditions.
method under our Special Mining License from open pit to underground method, subject to the requisite terms and conditions.
COVID-19 pandemic - At the date of approval of these consolidated annual financial statements, the SARS-CoV-2 virus responsible
for COVID-19 continues to spread across the globe, contributing to a sharp decline in global financial markets and a significant
decrease in global economic activity. On 11 March 2020, the COVID-19 outbreak was declared a global pandemic by the World
Health Organization and has since then resulted in numerous governments and companies, including AngloGold Ashanti,
introducing a variety of measures to contain the spread of the virus. To date, we have taken a number of proactive steps to protect
our employees, our host communities and business, in line with the company’s values, guidelines and advice provided by the WHO
and with the requirements of the countries in which we operate. The health and wellbeing of our employees and our host
communities remains a key priority. Cases of the outbreak have been reported in all of the jurisdictions in which we operate, and it
may lead to a prolonged restriction on the movement of people and continued requirement for people to self-isolate or be
quarantined.
for COVID-19 continues to spread across the globe, contributing to a sharp decline in global financial markets and a significant
decrease in global economic activity. On 11 March 2020, the COVID-19 outbreak was declared a global pandemic by the World
Health Organization and has since then resulted in numerous governments and companies, including AngloGold Ashanti,
introducing a variety of measures to contain the spread of the virus. To date, we have taken a number of proactive steps to protect
our employees, our host communities and business, in line with the company’s values, guidelines and advice provided by the WHO
and with the requirements of the countries in which we operate. The health and wellbeing of our employees and our host
communities remains a key priority. Cases of the outbreak have been reported in all of the jurisdictions in which we operate, and it
may lead to a prolonged restriction on the movement of people and continued requirement for people to self-isolate or be
quarantined.
PAGE 22
Any self-imposed or government-mandated temporary lockdowns may disrupt the company’s activities and operations and even
lead to a full or partial temporary suspension of the company’s mining operations in those jurisdictions. On 21 March 2020, following
the Argentinian government’s decision to impose a nationwide lockdown (quarantine) until 31 March 2020, including temporary
travel restrictions, border closings and suspension of most industries, Cerro Vanguardia S.A. (CVSA) was required to temporarily
suspend mining activities.
lead to a full or partial temporary suspension of the company’s mining operations in those jurisdictions. On 21 March 2020, following
the Argentinian government’s decision to impose a nationwide lockdown (quarantine) until 31 March 2020, including temporary
travel restrictions, border closings and suspension of most industries, Cerro Vanguardia S.A. (CVSA) was required to temporarily
suspend mining activities.
On 23 March 2020, the South African government announced a 21-day nationwide lockdown, effective from midnight on 26 March
2020, resulting in the temporary suspension of mining activities of the company’s South African operations particularly Mponeng,
and the partial suspension of mining activities at Mine Waste Solutions (MWS) and Surface Operations.
2020, resulting in the temporary suspension of mining activities of the company’s South African operations particularly Mponeng,
and the partial suspension of mining activities at Mine Waste Solutions (MWS) and Surface Operations.
On 26 March 2020, the State of Goiás, in Brazil, extended a set of restrictions on the operation of non-essential business to include
mining. These restrictions are set to run through 4 April 2020. Mineração Serra Grande S.A. will temporarily suspend its operations.
mining. These restrictions are set to run through 4 April 2020. Mineração Serra Grande S.A. will temporarily suspend its operations.
The current impact of all of the suspended operations is expected to be about 30,000oz to 40,000oz, or less than 2% of annual
production. In these countries, the suspension of mining activities will continue for the period during which the respective restrictions
remain in force.
production. In these countries, the suspension of mining activities will continue for the period during which the respective restrictions
remain in force.
While minimal operational disruptions have occurred at the company’s other operations to date, the company may experience
temporary disruptions in supply chain and logistics across its operations in the coming months should the pandemic be prolonged.
Such disruptions, which include restrictions in travel and border access, may impact the company’s ability to source and transport
goods and services required to operate mines and to transport gold doré to refineries. Furthermore, should COVID-19 spread
among the company’s workforce, it may lead to a full or partial temporary suspension of the company’s operating mines in those
affected areas.
temporary disruptions in supply chain and logistics across its operations in the coming months should the pandemic be prolonged.
Such disruptions, which include restrictions in travel and border access, may impact the company’s ability to source and transport
goods and services required to operate mines and to transport gold doré to refineries. Furthermore, should COVID-19 spread
among the company’s workforce, it may lead to a full or partial temporary suspension of the company’s operating mines in those
affected areas.
Given the uncertainties with respect to future developments, including duration, severity and scope of the COVID-19 pandemic and
the necessary government responses to limiting its spread, the board has decided to withdraw its market guidance for 2020
published as part of its preliminary condensed consolidated financial results on 21 February 2020, at this time.
the necessary government responses to limiting its spread, the board has decided to withdraw its market guidance for 2020
published as part of its preliminary condensed consolidated financial results on 21 February 2020, at this time.
In anticipation of a prolonged negative impact from the COVID-19 pandemic, the company has drawn down $1.4bn on its US Dollar
RCF to cater for the $700m bond redemption due mid-April 2020 and to provide additional liquidity headroom. After the drawdowns,
cash on hand is about $1.8bn (excluding cash lock-up positions at Kibali and Sadiola, where AngloGold Ashanti’s combined share
totals about $300m).
RCF to cater for the $700m bond redemption due mid-April 2020 and to provide additional liquidity headroom. After the drawdowns,
cash on hand is about $1.8bn (excluding cash lock-up positions at Kibali and Sadiola, where AngloGold Ashanti’s combined share
totals about $300m).
Management will continue to take a prudent and proactive approach to managing the group’s liquidity, which may include procuring
additional credit facilities or debt over and above its current facilities.
additional credit facilities or debt over and above its current facilities.
MATERIAL CHANGE
There has been no material change in the financial results or trading position of the AngloGold Ashanti group since the publication
of the report for the six months and year ended 31 December 2019 on 21 February 2020 and the date of this report. The results for
the year ended 31 December 2019 were audited by Ernst & Young Inc., who issued an unqualified audit report on 27 March 2020.
of the report for the six months and year ended 31 December 2019 on 21 February 2020 and the date of this report. The results for
the year ended 31 December 2019 were audited by Ernst & Young Inc., who issued an unqualified audit report on 27 March 2020.
Subsequent events, included the Group Annual Financial Statements note 37, have been amended for additional details provided
on the impact of the Covid-19 pandemic on the group and proactive measures taken to mitigate the risks.
on the impact of the Covid-19 pandemic on the group and proactive measures taken to mitigate the risks.
ANNUAL GENERAL MEETING
At the 75
th
Annual General Meeting held on Wednesday, 9 May 2019, shareholders passed resolutions relating to the:
• Re-election of Maria Richter as a Director of the Board;
• Election of Kelvin Dushnisky, Alan Ferguson and Jochen Tilk as Directors of the Board;
• Appointment of the Audit and Risk Committee members being Rhidwaan Gasant, Rodney Ruston, Maria Richter and
Alan Ferguson;
• Re-appointment of Ernst & Young Inc. as External Auditors of the company;
• General authority to directors to allot and issue ordinary shares;
• Separate non-binding advisory endorsement of the AngloGold Ashanti remuneration policy and implementation report;
• Remuneration of non-executive directors, which remains unchanged from the previous year;
• General authority to acquire the company’s own shares;
• eneral authority to directors to issue for cash, those ordinary shares which the directors are authorised to allot and issue;
• General authority to provide financial assistance in terms of sections 44 and 45 of the Companies Act; and
• Directors’ authority to implement special and ordinary resolutions.
• Election of Kelvin Dushnisky, Alan Ferguson and Jochen Tilk as Directors of the Board;
• Appointment of the Audit and Risk Committee members being Rhidwaan Gasant, Rodney Ruston, Maria Richter and
Alan Ferguson;
• Re-appointment of Ernst & Young Inc. as External Auditors of the company;
• General authority to directors to allot and issue ordinary shares;
• Separate non-binding advisory endorsement of the AngloGold Ashanti remuneration policy and implementation report;
• Remuneration of non-executive directors, which remains unchanged from the previous year;
• General authority to acquire the company’s own shares;
• eneral authority to directors to issue for cash, those ordinary shares which the directors are authorised to allot and issue;
• General authority to provide financial assistance in terms of sections 44 and 45 of the Companies Act; and
• Directors’ authority to implement special and ordinary resolutions.
DIRECTORATE AND SECRETARY
During the period 1 January 2019 to 31 December 2019, the following changes occurred:
• On 28 May 2019, AngloGold Ashanti announced the appointment of Ms Maria Ramos as an independent non-executive director
to its Board of Directors, effective 1 June 2019. Ms Ramos serves as a member of the Investment Committee and the Social,
Ethics and Sustainability Committee.
• On 27 November 2019, AngloGold Ashanti appointed Mr Rhidwaan Gasant as lead independent director of the Company.
to its Board of Directors, effective 1 June 2019. Ms Ramos serves as a member of the Investment Committee and the Social,
Ethics and Sustainability Committee.
• On 27 November 2019, AngloGold Ashanti appointed Mr Rhidwaan Gasant as lead independent director of the Company.
PAGE 23
• On 28 November 2019, AngloGold Ashanti also appointed Ms Nelisiwe Magubane as an independent non-executive director
to its board, which appointment became effective 1 January 2020. Ms Magubane currently serves as a member of the
Company's Investment Committee and the Social and Ethics and Sustainability Committee.
to its board, which appointment became effective 1 January 2020. Ms Magubane currently serves as a member of the
Company's Investment Committee and the Social and Ethics and Sustainability Committee.
On 19 February 2020 the board approved the following changes to its board committees:
• The appointment of Ms Maria Ramos as chair of the Social, Ethics and Sustainability Committee, effective 6 May 2020, following
the retirement of Mrs Nozipho January-Bardill (current chair) from the Board at the Company’s next Annual General Meeting
(AGM) which was scheduled on 6 May 2020. Ms Ramos will furthermore step down as a member of the Investment Committee
and be appointed as a member of the Remuneration and Human Resources Committee, effective 6 May 2020.
• The appointment of Mr Jochen Tilk as chair of the Investment Committee effective 6 May 2020, following the retirement of
Mr Rod Ruston (current chair) from the Board at the AGM scheduled on 6 May 2020.
the retirement of Mrs Nozipho January-Bardill (current chair) from the Board at the Company’s next Annual General Meeting
(AGM) which was scheduled on 6 May 2020. Ms Ramos will furthermore step down as a member of the Investment Committee
and be appointed as a member of the Remuneration and Human Resources Committee, effective 6 May 2020.
• The appointment of Mr Jochen Tilk as chair of the Investment Committee effective 6 May 2020, following the retirement of
Mr Rod Ruston (current chair) from the Board at the AGM scheduled on 6 May 2020.
The board has subsequently decided to postpone the AGM scheduled to take place on 6 May 2020, in light of the South African
nationwide lockdown enforced to combat the Covid-19 pandemic. However, the retirements of Mrs January-Bardill and Mr Ruston
remain effective from 6 May 2020.
nationwide lockdown enforced to combat the Covid-19 pandemic. However, the retirements of Mrs January-Bardill and Mr Ruston
remain effective from 6 May 2020.
Company Secretary
There was no change to the office of the Company Secretary during 2019. The name, business and postal address of the Company
Secretary are set out under Administrative Information on page 123.
Secretary are set out under Administrative Information on page 123.
In accordance with rule 3.59(b) of the JSE Listing Requirements, shareholders are advised that Ms Maria Sanz Perez, company
secretary, has given 6 months’ notice of the intention to resign, effective 26 March 2020, to pursue other business interests. The
exact departure date is still to be agreed. AngloGold Ashanti will commence with the process of identifying a suitable replacement
and update shareholders in due course.
secretary, has given 6 months’ notice of the intention to resign, effective 26 March 2020, to pursue other business interests. The
exact departure date is still to be agreed. AngloGold Ashanti will commence with the process of identifying a suitable replacement
and update shareholders in due course.
Directors’ and Prescribed Officers’ interests in AngloGold Ashanti shares
The interests of Directors, Prescribed Officers and their associates in the ordinary shares of the company at 31 December 2019,
individually did not exceed 1% of the company’s issued ordinary share capital and are disclosed in note 33 of the group financial
statements.
individually did not exceed 1% of the company’s issued ordinary share capital and are disclosed in note 33 of the group financial
statements.
Details of service contracts of Directors and Prescribed Officers
In accordance with Section 30(4)(e) of the Companies Act the salient features of the service contracts of Directors and Prescribed
Officers have been disclosed in the Remuneration Report, which is included in the Integrated Report 2019.
Officers have been disclosed in the Remuneration Report, which is included in the Integrated Report 2019.
ANNUAL FINANCIAL STATEMENTS
The financial statements set out fully the financial position, results of operations and cash flows of the group and the company for
the financial year ended 31 December 2019.
the financial year ended 31 December 2019.
The directors of AngloGold Ashanti are responsible for the maintenance of adequate accounting records and the preparation of the
annual financial statements and related information in a manner that fairly presents the state of affairs of the Company, in conformity
with the Companies Act and in terms of the JSE Listings Requirements.
annual financial statements and related information in a manner that fairly presents the state of affairs of the Company, in conformity
with the Companies Act and in terms of the JSE Listings Requirements.
The directors are also responsible for the maintenance of effective systems of internal control which are based on established
organisational structures and procedures. These systems are designed to provide reasonable assurance as to the reliability of the
annual financial statements, and to prevent and detect material misstatement and loss.
organisational structures and procedures. These systems are designed to provide reasonable assurance as to the reliability of the
annual financial statements, and to prevent and detect material misstatement and loss.
In preparing the annual financial statements, the group has complied with International Financial Reporting Standards (IFRS) and
used appropriate accounting policies supported by pragmatic judgements and estimates.
used appropriate accounting policies supported by pragmatic judgements and estimates.
AngloGold Ashanti, through its Executive Committee, reviews its short-, medium- and long-term funding, treasury and liquidity
requirements and positions monthly. The board of directors also reviews these on a quarterly basis at its meetings.
requirements and positions monthly. The board of directors also reviews these on a quarterly basis at its meetings.
Cash and cash equivalents, at 31 December 2019 amounted to $456m (2018: $329m), and together with cash budgeted to be
generated from operations in 2020 and the net incremental borrowing facilities available, are in management’s view, adequate to
fund operating, mine development, capital expenditure and financing obligations as they fall due for at least the next 12 months.
generated from operations in 2020 and the net incremental borrowing facilities available, are in management’s view, adequate to
fund operating, mine development, capital expenditure and financing obligations as they fall due for at least the next 12 months.
Taking these factors into account, the directors of AngloGold Ashanti have formed the judgement that, at the time of approving the
financial statements for the year ended 31 December 2019, it is appropriate to prepare these financial statements on a going
concern basis.
financial statements for the year ended 31 December 2019, it is appropriate to prepare these financial statements on a going
concern basis.
Based on the results of a formal documented review of the Company’s system of internal controls and risk management, covering
both the adequacy in design and effectiveness in implementation, performed by the internal audit function during the year 2019:
both the adequacy in design and effectiveness in implementation, performed by the internal audit function during the year 2019:
• information and explanations provided by line management;
• discussions held with the External Auditors on the results of the year-end audit; and
• the assessment by the Audit and Risk Committee,
• discussions held with the External Auditors on the results of the year-end audit; and
• the assessment by the Audit and Risk Committee,
PAGE 24
the board has concluded that nothing has come to its attention that caused it to believe that the company’s system of internal
controls and risk management are not effective and that the internal financial controls do not form a sound basis for the preparation
of reliable financial statements.
controls and risk management are not effective and that the internal financial controls do not form a sound basis for the preparation
of reliable financial statements.
The directors are of the opinion that these financial statements fairly present the financial position of the company and group at
31 December 2019 and the results of their operations, changes in equity and cash flow information for the year then ended in
accordance with IFRS.
31 December 2019 and the results of their operations, changes in equity and cash flow information for the year then ended in
accordance with IFRS.
The External Auditor, Ernst & Young Inc., is responsible for independently auditing and reporting on the financial statements in
conformity with International Standards on Auditing and the Companies Act of South Africa. Their unqualified opinion on these
financial statements appears in the Independent Auditor’s Report, on page 25 of this report.
conformity with International Standards on Auditing and the Companies Act of South Africa. Their unqualified opinion on these
financial statements appears in the Independent Auditor’s Report, on page 25 of this report.
The Company will file a set of financial statements in accordance with IFRS in its annual report on Form 20-F as must be filed with
the US Securities and Exchange Commission (SEC) by no later than 30 April 2020. The SEC maintains an internet site that contains
reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC
(http://www.sec.gov).
the US Securities and Exchange Commission (SEC) by no later than 30 April 2020. The SEC maintains an internet site that contains
reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC
(http://www.sec.gov).
INVESTMENTS
Particulars of the group’s principal subsidiaries and operating entities are presented in this report on page 117.
PAGE 25
INDEPENDENT AUDITOR’S REPORT
The Board of Directors and Shareholders of AngloGold Ashanti Limited
REPORT ON THE AUDIT OF THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
Opinion
We have audited the consolidated and separate financial statements of AngloGold Ashanti Limited and its subsidiaries (the group)
and company set out on pages 29 to 118, which comprise the consolidated and separate statements of financial position as at 31
December 2019, and the consolidated and separate income statement, consolidated and separate statement of comprehensive
income, consolidated and separate changes in equity and consolidated and separate cash flows for the year then ended, and notes
to the consolidated and separate financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated and separate financial statements present fairly, in all material respects, the
consolidated and separate financial position of the group and company as at 31 December 2019, and its consolidated and separate
financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial
Reporting Standards (IFRS) and the requirements of the Companies Act of South Africa.
and company set out on pages 29 to 118, which comprise the consolidated and separate statements of financial position as at 31
December 2019, and the consolidated and separate income statement, consolidated and separate statement of comprehensive
income, consolidated and separate changes in equity and consolidated and separate cash flows for the year then ended, and notes
to the consolidated and separate financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated and separate financial statements present fairly, in all material respects, the
consolidated and separate financial position of the group and company as at 31 December 2019, and its consolidated and separate
financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial
Reporting Standards (IFRS) and the requirements of the Companies Act of South Africa.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the consolidated and separate financial statements section of
our report. We are independent of the group and company in accordance with the sections 290 and 291 of the Independent
Regulatory Board for Auditors’ Code of Professional Conduct for Registered Auditors (Revised January 2018), parts 1 and 3 of the
Independent Regulatory Board for Auditors’ Code of Professional Conduct for Registered Auditors (Revised November 2018)
(together the IRBA Codes) and other independence requirements applicable to performing audits of financial statements of the
group and company and in South Africa. We have fulfilled our other ethical responsibilities, as applicable, in accordance with the
IRBA Codes and in accordance with other ethical requirements applicable to performing audits of the group and company and in
South Africa. The IRBA Codes are consistent with the corresponding sections of the International Ethics Standards Board for
Accountants’ Code of Ethics for Professional Accountants (IESBA code) and the International Ethics Standards Board for
Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards)
respectively. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
are further described in the Auditor’s Responsibilities for the Audit of the consolidated and separate financial statements section of
our report. We are independent of the group and company in accordance with the sections 290 and 291 of the Independent
Regulatory Board for Auditors’ Code of Professional Conduct for Registered Auditors (Revised January 2018), parts 1 and 3 of the
Independent Regulatory Board for Auditors’ Code of Professional Conduct for Registered Auditors (Revised November 2018)
(together the IRBA Codes) and other independence requirements applicable to performing audits of financial statements of the
group and company and in South Africa. We have fulfilled our other ethical responsibilities, as applicable, in accordance with the
IRBA Codes and in accordance with other ethical requirements applicable to performing audits of the group and company and in
South Africa. The IRBA Codes are consistent with the corresponding sections of the International Ethics Standards Board for
Accountants’ Code of Ethics for Professional Accountants (IESBA code) and the International Ethics Standards Board for
Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards)
respectively. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the consolidated
and separate financial statements of the current period. These matters were addressed in the context of the audit of the consolidated
and separate financial statements as a whole, and in forming the auditor’s opinion thereon, and we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
and separate financial statements of the current period. These matters were addressed in the context of the audit of the consolidated
and separate financial statements as a whole, and in forming the auditor’s opinion thereon, and we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the consolidated and separate financial
statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of
procedures designed to respond to our assessment of the risks of material misstatement of the consolidated and separate financial
statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the
basis for our audit opinion on the accompanying consolidated and separate financial statements.
statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of
procedures designed to respond to our assessment of the risks of material misstatement of the consolidated and separate financial
statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the
basis for our audit opinion on the accompanying consolidated and separate financial statements.
EY
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ey.com
PAGE 26
Key Audit Matter (KAM)
How the matter was addressed in the audit
Geita VAT recoverability (Consolidated KAM)
At 31 December 2019, the Company’s Geita mine has recorded
$119 million of VAT receivables due from the Tanzanian
Revenue Authority (TRA). $35 million has been classified as
current assets, and the remaining $84 million is classified as
non-current assets based on management’s estimate of when
the Geita mine will be able to offset the VAT receivables with
future taxes.
As disclosed in note 22 on page 62 to the consolidated financial
statements, an amendment, effective 20 July 2017, to
Tanzania’s mining legislation included an amendment to the
VAT Act 2015 to the effect that no input tax credit can be claimed
for expenses incurred in the production of raw minerals which
are to be exported, resulting in Geita’s VAT input claims being
disqualified since then by the Tanzania Revenue Authorities. In
the current year, an amendment issued by the Tanzanian
Ministry of Minerals, effective 22 February 2019, provided clarity
on the definition of raw minerals. This amendment has not yet
been accepted by the Tanzanian Revenue Authorities, resulting
in VAT input claims and offsets from 2017 still not being allowed.
The total of VAT input claims submitted since July 2017 is $134
million.
Auditing the recoverability of these receivables involved
significant judgement in assessing whether the TRA will accept
the definition of raw minerals and also assessing the timing of
when the VAT receivable balance will be recovered. As a result,
we required the involvement of our tax specialist, and a
significant amount of time was spent in assessing the position
put forward by management and their external legal counsel
whilst considering correspondence with the TRA received to
date.
At 31 December 2019, the Company’s Geita mine has recorded
$119 million of VAT receivables due from the Tanzanian
Revenue Authority (TRA). $35 million has been classified as
current assets, and the remaining $84 million is classified as
non-current assets based on management’s estimate of when
the Geita mine will be able to offset the VAT receivables with
future taxes.
As disclosed in note 22 on page 62 to the consolidated financial
statements, an amendment, effective 20 July 2017, to
Tanzania’s mining legislation included an amendment to the
VAT Act 2015 to the effect that no input tax credit can be claimed
for expenses incurred in the production of raw minerals which
are to be exported, resulting in Geita’s VAT input claims being
disqualified since then by the Tanzania Revenue Authorities. In
the current year, an amendment issued by the Tanzanian
Ministry of Minerals, effective 22 February 2019, provided clarity
on the definition of raw minerals. This amendment has not yet
been accepted by the Tanzanian Revenue Authorities, resulting
in VAT input claims and offsets from 2017 still not being allowed.
The total of VAT input claims submitted since July 2017 is $134
million.
Auditing the recoverability of these receivables involved
significant judgement in assessing whether the TRA will accept
the definition of raw minerals and also assessing the timing of
when the VAT receivable balance will be recovered. As a result,
we required the involvement of our tax specialist, and a
significant amount of time was spent in assessing the position
put forward by management and their external legal counsel
whilst considering correspondence with the TRA received to
date.
Our procedures to address this matter included, amongst others,
obtaining an understanding, evaluating the design and testing the
operating effectiveness of certain internal controls over the
Company’s assessment of tax law and the process to estimate the
recoverability of the VAT receivable.
We read correspondence between management, the TRA and the
Mining Commission, including of correspondence related to the tax
returns and assessments received during the year.
We read external legal counsel opinions obtained by management
to support their interpretation of the tax legislation for set offs of this
manner.
We involved our tax professionals with specialised skills and
knowledge to assist us to evaluate the recoverability of the VAT
receivable based on the above correspondence and their
interpretation of legislation, including historical payments and
offsets received to date for claims prior to July 2017.
We evaluated the classification of the VAT receivables as current
or non-current, based on management’s estimated scheduling of
setting off the VAT receivables. This scheduling is based on
management’s forecasts of available taxable income against which
set offs can be made.
We evaluated the VAT receivable disclosure in the consolidated
financial statements.
obtaining an understanding, evaluating the design and testing the
operating effectiveness of certain internal controls over the
Company’s assessment of tax law and the process to estimate the
recoverability of the VAT receivable.
We read correspondence between management, the TRA and the
Mining Commission, including of correspondence related to the tax
returns and assessments received during the year.
We read external legal counsel opinions obtained by management
to support their interpretation of the tax legislation for set offs of this
manner.
We involved our tax professionals with specialised skills and
knowledge to assist us to evaluate the recoverability of the VAT
receivable based on the above correspondence and their
interpretation of legislation, including historical payments and
offsets received to date for claims prior to July 2017.
We evaluated the classification of the VAT receivables as current
or non-current, based on management’s estimated scheduling of
setting off the VAT receivables. This scheduling is based on
management’s forecasts of available taxable income against which
set offs can be made.
We evaluated the VAT receivable disclosure in the consolidated
financial statements.
Rehabilitation and decommissioning provision
(Consolidated and Separate KAM)
At 31 December 2019 the rehabilitation and decommissioning
provision amounted to $730 million ($619 million classified as
non-current liabilities, $15 million classified as current liabilities
and $96 million transferred to assets and liabilities held for sale)
in the consolidated financial statements, and R900 million (R3
million classified as non-current liabilities and R897 million
transferred to assets and liabilities held for sale) in the separate
financial statements.
(Consolidated and Separate KAM)
At 31 December 2019 the rehabilitation and decommissioning
provision amounted to $730 million ($619 million classified as
non-current liabilities, $15 million classified as current liabilities
and $96 million transferred to assets and liabilities held for sale)
in the consolidated financial statements, and R900 million (R3
million classified as non-current liabilities and R897 million
transferred to assets and liabilities held for sale) in the separate
financial statements.
The Company incurs obligations to close, restore and
rehabilitate its mine sites. Auditing the Company’s rehabilitation
and decommissioning provision is complex due to the
significance as well as the high estimation uncertainty of the
provision. The determination of the provision is based on, among
other things, judgements and estimates of current damage
caused, nature, timing and amount of future costs to be incurred
to rehabilitate the mine sites, estimates of future inflation,
exchange rates and discount rates. These assumptions are
inherently judgemental and subject to continued mining activity
and rehabilitation, legislation and environmental changes, which
cannot be predicted with certainty.
For instance, in the current year the Brazilian Mining Agency
issued Resolution 13, which states that tailings storage facilities
(TSF) that were built based on the upstream method should be
decommissioned by 15 September 2022. The Serra Grande
mine in Brazil has one upstream TSF that was impacted by this
change in legislation, resulting in an increase in the provision.
The consolidated disclosures are included in Note 27 and 30,
and separate disclosures are included in Note 21.
rehabilitate its mine sites. Auditing the Company’s rehabilitation
and decommissioning provision is complex due to the
significance as well as the high estimation uncertainty of the
provision. The determination of the provision is based on, among
other things, judgements and estimates of current damage
caused, nature, timing and amount of future costs to be incurred
to rehabilitate the mine sites, estimates of future inflation,
exchange rates and discount rates. These assumptions are
inherently judgemental and subject to continued mining activity
and rehabilitation, legislation and environmental changes, which
cannot be predicted with certainty.
For instance, in the current year the Brazilian Mining Agency
issued Resolution 13, which states that tailings storage facilities
(TSF) that were built based on the upstream method should be
decommissioned by 15 September 2022. The Serra Grande
mine in Brazil has one upstream TSF that was impacted by this
change in legislation, resulting in an increase in the provision.
The consolidated disclosures are included in Note 27 and 30,
and separate disclosures are included in Note 21.
Our procedures to address this matter included, amongst others,
obtaining an understanding, evaluating the design and testing the
operating effectiveness of controls over the Company’s process to
estimate rehabilitation and decommissioning provisions. For
example, we tested controls over the determination of key inputs
such as life of mine reserves and production profile, discount rates,
inflation and exchange rates, and the nature, amount and timing of
future rehabilitation costs.
With the support of valuation specialists, we assessed
management’s macro-economic assumptions in their rehabilitation
models by comparing them to available market information. The
most significant of these macro-economic assumptions were the
risk-free interest rates, expected inflation and exchange rates.
We tested the mathematical accuracy of the valuation models.
We compared the timing of the expected cash flows with reference
to the life of mine plans for the respective mines.
We compared the current year cash flow assumptions to those of
the prior year and considered management’s explanations where
these have changed or deviated. We compared the cost rates used
by management to publicly available information, as well as
ongoing rehabilitation activities undertaken by the Company.
With the support of our environmental specialists we inquired of
operational management whether additional environmental
disturbance occurred since the prior year that would require
additional rehabilitation in the future and compared this information
to the current mine plan. We inspected reports of the Company’s
mine closure plans and assessments of the timing and
determination of costs to be incurred prepared by management’s
external and internal experts.
We, together with our specialists evaluated the reports prepared by
management’s internal experts and external experts, where these
had been engaged by management, to assist in the calculation of
the provision. We, together with our specialists evaluated the
scope, competency and objectivity of the external experts engaged
by management, including their professional qualifications,
experience, and use of industry accepted methodology
We evaluated the related disclosure in the consolidated and
separate financial statements.
obtaining an understanding, evaluating the design and testing the
operating effectiveness of controls over the Company’s process to
estimate rehabilitation and decommissioning provisions. For
example, we tested controls over the determination of key inputs
such as life of mine reserves and production profile, discount rates,
inflation and exchange rates, and the nature, amount and timing of
future rehabilitation costs.
With the support of valuation specialists, we assessed
management’s macro-economic assumptions in their rehabilitation
models by comparing them to available market information. The
most significant of these macro-economic assumptions were the
risk-free interest rates, expected inflation and exchange rates.
We tested the mathematical accuracy of the valuation models.
We compared the timing of the expected cash flows with reference
to the life of mine plans for the respective mines.
We compared the current year cash flow assumptions to those of
the prior year and considered management’s explanations where
these have changed or deviated. We compared the cost rates used
by management to publicly available information, as well as
ongoing rehabilitation activities undertaken by the Company.
With the support of our environmental specialists we inquired of
operational management whether additional environmental
disturbance occurred since the prior year that would require
additional rehabilitation in the future and compared this information
to the current mine plan. We inspected reports of the Company’s
mine closure plans and assessments of the timing and
determination of costs to be incurred prepared by management’s
external and internal experts.
We, together with our specialists evaluated the reports prepared by
management’s internal experts and external experts, where these
had been engaged by management, to assist in the calculation of
the provision. We, together with our specialists evaluated the
scope, competency and objectivity of the external experts engaged
by management, including their professional qualifications,
experience, and use of industry accepted methodology
We evaluated the related disclosure in the consolidated and
separate financial statements.
PAGE 27
Key Audit Matter (KAM)
How the matter was addressed in the audit
Planned disposal of the South African assets (Consolidated
and Separates KAM)
On 9 May 2019, management announced that it had
commenced a process to review divestment options for its
remaining South African assets.
Management performed an assessment of whether the planned
disposal of the remaining South African assets met the
requirements of IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations. The application of IFRS 5 is
subjective, particularly in determining whether the completion of
the sale is highly probable within 12 months. Management has
concluded that this threshold was met at 31 December 2019. On
12 February 2020, prior to the release of the annual financial
statements, management announced that a sale and purchase
agreement for disposal of the South African assets was signed.
Disclosure of this post balance sheet event is included in Note
37 to the consolidated financial statements and Note 32 to the
separate financial statements.
The planned disposal of the remaining South African assets
represents a significant change to the composition of the
Company’s South African operations, resulting in these assets
being reflected as discontinued operations. The results of these
businesses and operations, including the adjustment of the
carrying value to fair value less cost to sell have been separately
presented from continuing operations in the income statement
with comparative numbers restated accordingly.
Auditing management’s assessment of IFRS 5 is subjective. In
addition, the accounting for discontinued operations is complex
in terms of the identification and separation of the financial
effects (related income and expenditure) between continuing
and discontinued operations as well as identifying the specific
assets and liabilities including the tax effects included within the
scope of the divestiture.
The consolidated disclosures are included in Note 9, and
separate disclosures are included in Note 18.
and Separates KAM)
On 9 May 2019, management announced that it had
commenced a process to review divestment options for its
remaining South African assets.
Management performed an assessment of whether the planned
disposal of the remaining South African assets met the
requirements of IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations. The application of IFRS 5 is
subjective, particularly in determining whether the completion of
the sale is highly probable within 12 months. Management has
concluded that this threshold was met at 31 December 2019. On
12 February 2020, prior to the release of the annual financial
statements, management announced that a sale and purchase
agreement for disposal of the South African assets was signed.
Disclosure of this post balance sheet event is included in Note
37 to the consolidated financial statements and Note 32 to the
separate financial statements.
The planned disposal of the remaining South African assets
represents a significant change to the composition of the
Company’s South African operations, resulting in these assets
being reflected as discontinued operations. The results of these
businesses and operations, including the adjustment of the
carrying value to fair value less cost to sell have been separately
presented from continuing operations in the income statement
with comparative numbers restated accordingly.
Auditing management’s assessment of IFRS 5 is subjective. In
addition, the accounting for discontinued operations is complex
in terms of the identification and separation of the financial
effects (related income and expenditure) between continuing
and discontinued operations as well as identifying the specific
assets and liabilities including the tax effects included within the
scope of the divestiture.
The consolidated disclosures are included in Note 9, and
separate disclosures are included in Note 18.
Our procedures to address this matter included, amongst others,
obtaining an understanding, evaluating the design and testing the
operating effectiveness of controls over the Company’s processes
to approve and account for the transaction, including separation of
financial items between discontinued and continued operations.
Through discussions with management and inspection of minutes
of meetings, we assessed management’s plans to dispose of the
remaining South African assets. We inquired into the status of the
transaction at year-end, read the offer agreements from potential
buyers and considered whether the then conditions, including
ongoing sales negotiations met the ‘highly probable’ threshold of
IFRS 5 Non-Current Assets Held for Sale and Discontinued
Operations at year-end.
We considered management’s estimate of fair value less costs to
sell, including the determination of the deferred consideration
component, which included assessing the key assumptions applied
and evaluating the explanations provided by management through
comparing the key assumptions to market data, where available.
For example, we compared the future production volumes to the
mine plans and involved our specialists to assist with assessing the
discount rate applied by management.
We assessed management’s accounting policies and procedures
for accounting for discontinued operations under IFRS 5. We
considered management’s determination of the operations that
should be separated and presented as discontinued operations and
compared the assets and liabilities that were reclassified as held
for sale to those listed in the sales and purchase agreement. We
considered the impact of current and deferred taxes as it relates to
the disposal and reclassification of the assets and liabilities.
We evaluated the adequacy the disclosures in the financial
statements, including disclosure of the post-balance sheet events.
obtaining an understanding, evaluating the design and testing the
operating effectiveness of controls over the Company’s processes
to approve and account for the transaction, including separation of
financial items between discontinued and continued operations.
Through discussions with management and inspection of minutes
of meetings, we assessed management’s plans to dispose of the
remaining South African assets. We inquired into the status of the
transaction at year-end, read the offer agreements from potential
buyers and considered whether the then conditions, including
ongoing sales negotiations met the ‘highly probable’ threshold of
IFRS 5 Non-Current Assets Held for Sale and Discontinued
Operations at year-end.
We considered management’s estimate of fair value less costs to
sell, including the determination of the deferred consideration
component, which included assessing the key assumptions applied
and evaluating the explanations provided by management through
comparing the key assumptions to market data, where available.
For example, we compared the future production volumes to the
mine plans and involved our specialists to assist with assessing the
discount rate applied by management.
We assessed management’s accounting policies and procedures
for accounting for discontinued operations under IFRS 5. We
considered management’s determination of the operations that
should be separated and presented as discontinued operations and
compared the assets and liabilities that were reclassified as held
for sale to those listed in the sales and purchase agreement. We
considered the impact of current and deferred taxes as it relates to
the disposal and reclassification of the assets and liabilities.
We evaluated the adequacy the disclosures in the financial
statements, including disclosure of the post-balance sheet events.
Other Information
The directors are responsible for the other information. The other information comprises the information included in the 123 page
document titled AngloGold Ashanti Limited Annual Report for the year ended 31 December 2019, which includes the Audit and
Risk Committee – Chairman’s Letter, the Chief Financial Officer’s Review, the Company Secretary’s Certificate and the Directors’
Report as required by the Companies Act of South Africa. The other information does not include the consolidated and separate
financial statements and our auditor’s report thereon.
document titled AngloGold Ashanti Limited Annual Report for the year ended 31 December 2019, which includes the Audit and
Risk Committee – Chairman’s Letter, the Chief Financial Officer’s Review, the Company Secretary’s Certificate and the Directors’
Report as required by the Companies Act of South Africa. The other information does not include the consolidated and separate
financial statements and our auditor’s report thereon.
Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
form of assurance conclusion thereon.
In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
Responsibilities of the Directors for the Consolidated and Separate Financial Statements
The directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements in
accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa, and for
such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial
statements that are free from material misstatement, whether due to fraud or error.
accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa, and for
such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated and separate financial statements, the directors are responsible for assessing the group and
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the group and company or to cease operations, or have
no realistic alternative but to do so.
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the group and company or to cease operations, or have
no realistic alternative but to do so.
PAGE 28
Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis
of these consolidated and separate financial statements.
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis
of these consolidated and separate financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout
the audit. We also:
the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group and company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group and
company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the consolidated and separate financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the group and/or company to cease to continue as a going
concern.
• Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the
disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
group to express an opinion on the consolidated and separate financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group and company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group and
company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the consolidated and separate financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the group and/or company to cease to continue as a going
concern.
• Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the
disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
group to express an opinion on the consolidated and separate financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.
findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence,
and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the
consolidated and separate financial statements of the current period and are therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public interest benefits of such communication.
consolidated and separate financial statements of the current period and are therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
In terms of the IRBA Rule published in Government Gazette Number 39475, dated 04 December 2015, we report that Ernst &
Young Inc., and its predecessor firm, has been the auditor of AngloGold Ashanti Limited for seventy-six years. Ernst & Young Inc.
was appointed as auditor of Vaal Reefs Exploration and Mining Company Limited in 1944. In 1998 all of Anglo American’s other
individually listed gold mines, which were not audited by Ernst & Young Inc., or its predecessor firm, were merged into Vaal Reefs
Exploration and Mining Company Limited. Vaal Reefs Exploration and Mining Company Limited was renamed AngloGold Limited
in 1998, and in 2004 to AngloGold Ashanti Limited. Ernst & Young Inc. was retained as auditor of AngloGold Limited (and AngloGold
Ashanti Limited) and has been the auditor of the expanded Company for nineteen years. We confirm that we are independent in
accordance with the Independent Regulatory Board for Auditors’ Code of Professional Conduct for Registered Auditors and other
independence requirements applicable to the independent audit of AngloGold Ashanti Limited.
Young Inc., and its predecessor firm, has been the auditor of AngloGold Ashanti Limited for seventy-six years. Ernst & Young Inc.
was appointed as auditor of Vaal Reefs Exploration and Mining Company Limited in 1944. In 1998 all of Anglo American’s other
individually listed gold mines, which were not audited by Ernst & Young Inc., or its predecessor firm, were merged into Vaal Reefs
Exploration and Mining Company Limited. Vaal Reefs Exploration and Mining Company Limited was renamed AngloGold Limited
in 1998, and in 2004 to AngloGold Ashanti Limited. Ernst & Young Inc. was retained as auditor of AngloGold Limited (and AngloGold
Ashanti Limited) and has been the auditor of the expanded Company for nineteen years. We confirm that we are independent in
accordance with the Independent Regulatory Board for Auditors’ Code of Professional Conduct for Registered Auditors and other
independence requirements applicable to the independent audit of AngloGold Ashanti Limited.
Ernst & Young Inc.
Ernest Adriaan Lodewyk Botha - Director
Chartered Accountant (SA)
Registered Auditor
Johannesburg, South Africa
27 March 2020
Ernest Adriaan Lodewyk Botha - Director
Chartered Accountant (SA)
Registered Auditor
Johannesburg, South Africa
27 March 2020
GROUP – INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER
PAGE 29
US dollar millions
Notes
2019
2018
Restated
2017
Restated
Continuing operations
Revenue from product sales
Revenue from product sales
3
3,525
3,336
3,394
Cost of sales
4
(2,626)
(2,584)
(2,607)
Gain (loss) on non-hedge derivatives and other commodity contracts
5
(2)
—
Gross profit (loss)
2
904
750
787
Corporate administration, marketing and other expenses
5
(82)
(76)
(64)
Exploration and evaluation costs
(112)
(98)
(105)
Impairment, derecognition of assets and profit (loss) on disposal
(6)
(7)
(2)
Other (expenses) income
6
(83)
(79)
(150)
Operating profit (loss)
621
490
466
Interest income
14
8
8
Dividend received
—
2
—
Foreign exchange losses
(12)
(9)
(11)
Finance costs and unwinding of obligations
7
(172)
(168)
(157)
Share of associates and joint ventures' profit (loss)
8
168
122
22
Profit (loss) before taxation
619
445
328
Taxation
12
(250)
(212)
(163)
Profit (loss) after taxation from continuing operations
369
233
165
Discontinued operations
Profit (loss) from discontinued operations
9
(376)
(83)
(336)
Profit (loss) for the year
(7)
150
(171)
Allocated as follows:
Equity shareholders
Continuing operations
364
216
145
Discontinued operations
(376)
(83)
(336)
Non-controlling interests
Continuing operations
5
17
20
(7)
150
(171)
Basic earnings (loss) per ordinary share (cents)
13
(3)
32
(46)
Earnings (loss) per ordinary share from continuing operations
87
52
35
(Loss) earnings per ordinary share from discontinued operations
(90)
(20)
(81)
Diluted earnings (loss) per ordinary share (cents)
13
(3)
32
(46)
Earnings (loss) per ordinary share from continuing operations
87
52
35
(Loss) earnings per ordinary share from discontinued operations
(90)
(20)
(81)
GROUP – STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER
PAGE 30
US dollar millions
2019
2018
Restated
2017
Restated
Profit (loss) for the year
(7)
150
(171)
Items that will be reclassified subsequently to profit or loss:
4
(150)
148
Exchange differences on translation of foreign operations
4
(150)
123
Available-for-sale financial assets
—
25
Net gain (loss) on available-for-sale financial assets
—
20
Release on impairment of available-for-sale financial assets
—
3
Release on disposal of available-for-sale financial assets
—
(6)
Deferred taxation thereon
—
8
Items that will not be reclassified subsequently to profit or loss:
10
9
6
Net gain (loss) on equity investments
6
9
Actuarial gain (loss) recognised
2
5
8
Deferred taxation thereon
2
(5)
(2)
Other comprehensive income (loss) for the year, net of tax
14
(141)
154
Total comprehensive income (loss) for the year, net of tax
7
9
(17)
Allocated as follows:
Equity shareholders
Equity shareholders
Continuing operations
378
75
299
Discontinuing operations
Non-controlling interests
Continuing operations
(376)
5
(83)
17
(336)
20
7
9
(17)
GROUP – STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER
PAGE 31
US dollar millions
Notes
2019
2018
2017
ASSETS
Non-current assets
Tangible assets
15
2,592
3,381
3,742
Right of use assets
16
158
—
—
Intangible assets
17
123
123
138
Investments in associates and joint ventures
19
1,581
1,528
1,507
Other investments
20
76
141
131
Inventories
21
93
106
100
Trade, other receivables and other assets
22
122
102
67
Deferred taxation
29
105
—
4
Cash restricted for use
23
31
35
37
4,881
5,416
5,726
Current assets
Other investments
20
10
6
7
Inventories
21
632
652
683
Trade, other receivables and other assets
22
250
209
222
Cash restricted for use
23
33
31
28
Cash and cash equivalents
24
456
329
205
1,381
1,227
1,145
Assets held for sale
9
601
—
348
1,982
1,227
1,493
Total assets
6,863
6,643
7,219
EQUITY AND LIABILITIES
Share capital and premium
25
7,199
7,171
7,134
Accumulated losses and other reserves
(4,559)
(4,519)
(4,471)
Shareholders' equity
2,640
2,652
2,663
Non-controlling interests
36
42
41
Total equity
2,676
2,694
2,704
Non-current liabilities
Borrowings
26
1,299
1,911
2,230
Lease liabilities
16
126
—
—
Environmental rehabilitation and other provisions
27
697
827
942
Provision for pension and post-retirement benefits
28
100
100
122
Trade, other payables and provisions
30
15
3
3
Deferred taxation
29
241
315
363
2,478
3,156
3,660
Current liabilities
Borrowings
26
734
139
38
Lease liabilities
16
45
—
—
Trade, other payables and provisions
30
586
594
638
Taxation
31
72
60
53
1,437
793
729
Liabilities held for sale
9
272
—
126
1,709
793
855
Total liabilities
4,187
3,949
4,515
Total equity and liabilities
6,863
6,643
7,219
GROUP – STATEMENT OF CASH FLOW
FOR THE YEAR ENDED 31 DECEMBER
PAGE 32
US dollar millions
Notes
2019
2018
Restated
2017
Restated
Cash flows from operating activities
Receipts from customers
3,535
3,339
3,418
Payments to suppliers and employees
(2,433)
(2,408)
(2,351)
Cash generated from operations
32
1,102
931
1,067
Dividends received from joint ventures
77
91
6
Taxation refund
31
7
5
14
Taxation paid
31
(228)
(171)
(174)
Net cash inflow (outflow) from operating activities from continuing
operations
958
856
913
Net cash inflow (outflow) from operating activities from discontinued
operations
89
1
84
Net cash inflow (outflow) from operating activities
1,047
857
997
Cash flows from investing activities
Capital expenditure
- project capital
(336)
(170)
(132)
- stay-in-business capital
(367)
(405)
(543)
Interest capitalised and paid
(6)
—
—
Dividends from other investments
—
2
—
Proceeds from disposal of tangible assets
3
10
3
Other investments acquired
(9)
(13)
(8)
Proceeds from disposal of other investments
3
7
3
Investments in associates and joint ventures
(5)
(8)
(27)
Loans advanced to associates and joint ventures
(3)
(5)
(6)
Loans repaid by associates and joint ventures
23
22
—
Decrease (increase) in cash restricted for use
—
(6)
(8)
Interest received
14
5
7
Net cash inflow (outflow) from investing activities from continuing
operations
(683)
(561)
(711)
Net cash inflow (outflow) from investing activities from discontinued
operations
(54)
226
(151)
Cash in subsidiaries sold and transferred to held for sale
(6)
—
—
Net cash inflow (outflow) from investing activities
(743)
(335)
(862)
Cash flows from financing activities
Proceeds from borrowings
Proceeds from borrowings
168
753
815
Repayment of borrowings
(123)
(967)
(767)
Repayment of lease liabilities
(42)
—
—
Finance costs - borrowings
26
(128)
(130)
(138)
Finance costs - leases
(9)
—
—
Bond settlement premium, RCF and bond transaction costs
—
(10)
—
Dividends paid
(43)
(39)
(58)
Net cash inflow (outflow) from financing activities from continuing
operations
(177)
(393)
(148)
Net cash inflow (outflow) from financing activities from discontinued
operations
—
—
—
Net cash inflow (outflow) from financing activities
(177)
(393)
(148)
Net increase (decrease) in cash and cash equivalents
127
129
(13)
Translation
—
(5)
3
Cash and cash equivalents at beginning of year
329
205
215
Cash and cash equivalents at end of year
24
456
329
205
GROUP – STATEMENT OF CHANGES IN EQUITY
PAGE 33
FOR THE YEAR ENDED 31 DECEMBER
Equity holders of the parent
Share
Retained
Fair
Foreign
capital
Other
earnings
value
Available-
Actuarial
currency
Non-
for-sale
capital
(Accumulated
through
for-sale
gains
translation
controlling
Total
US dollar millions
premium
reserves
(1)
losses)
(2)
OCI
reserve
(losses)
reserve
Total
interests
equity
Balance at 31 December 2016
7,108
116
(3,119)
17
(21)
(1,386)
2,715
39
2,754
Profit (loss) for the year
—
—
(191)
—
—
—
(191)
20
(171)
Other comprehensive income (loss)
—
—
—
25
6
123
154
—
154
Total comprehensive income (loss)
—
—
(191)
25
6
123
(37)
20
(17)
Shares issued
26
—
—
—
—
—
26
—
26
Share-based payment for share
awards net of exercised
—
(1)
—
—
—
—
(1)
—
(1)
Dividends paid (note 14)
—
—
(39)
—
—
—
(39)
—
(39)
Dividends of subsidiaries
—
—
—
—
—
—
—
(19)
(19)
Translation —
9
(10)
1
(1)
—
(1)
1
—
Balance at 31 December 2017
7,134
124
(3,359)
—
43
(16)
(1,263)
2,663
41
2,704
Impact of adopting IFRS 9
—
—
10
33
(43)
—
—
—
—
—
Opening balance under IFRS 9
7,134
124
(3,349)
33
—
(16)
(1,263)
2,663
41
2,704
Profit (loss) for the year
—
—
133
—
—
—
133
17
150
Other comprehensive income (loss)
—
—
—
5
4
(150)
(141)
—
(141)
Total comprehensive income (loss)
—
—
133
5
4
(150)
(8)
17
9
Shares issued
37
—
—
—
—
—
37
—
37
Share-based payment for share
awards net of exercised
—
(17)
—
—
—
—
(17)
—
(17)
Dividends paid (note 14)
—
—
(24)
—
—
—
(24)
—
(24)
Dividends of subsidiaries
—
—
—
—
—
—
—
(15)
(15)
Transfer of gain on disposal of
equity investments
—
—
1
(1)
—
—
—
—
—
Translation —
(11)
12
—
—
—
1
(1)
—
Balance at 31 December 2018
7,171
96
(3,227)
37
(12)
(1,413)
2,652
42
2,694
Profit (loss) for the year
—
—
(12)
—
—
—
(12
5
(7
Other comprehensive income
(loss)
(loss)
—
—
—
8
2
4
14
—
14
Total comprehensive income (loss)
—
—
(12)
8
2
4
2
5
7
Shares issued
28
—
—
—
—
—
28
—
28
Share-based payment for share
awards net of exercised
awards net of exercised
—
(10)
—
—
—
—
(10)
—
(10)
Dividends paid (note 14)
—
—
(27)
—
—
—
(27)
—
(27)
Dividends of subsidiaries
—
—
—
—
—
—
—
(16)
(16)
Transactions with non-controlling
interests
interests
—
(4)
—
—
—
—
(4)
4
—
Translation
—
1
(2)
—
—
—
(1)
1
—
Balance at 31 December 2019
7,199
83
(3,268)
45
(10)
(1,409)
2,640
36
2,676
(1)
Other capital reserves include a surplus on disposal of company shares held by companies prior to the formation of AngloGold Ashanti Limited of $10m
(2018: $10m; 2017: $11m), surplus on equity transaction of joint venture of $36m (2018: $36m; 2017: $36m), equity items for share-based payments of
$39m (2018: $48m; 2017: $75m) and other reserves.
$39m (2018: $48m; 2017: $75m) and other reserves.
(2)
Included in accumulated losses are retained earnings totalling $378m (2018: $283m; 2017: $287m) arising at the equity accounted investments and certain
subsidiaries which may not be remitted without third party consent.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
PAGE 34
FOR THE YEAR ENDED 31 DECEMBER
1
ACCOUNTING POLICIES
STATEMENT OF COMPLIANCE
The consolidated and company financial statements are prepared in compliance with International Financial Reporting
Standards (IFRS) and Interpretations of those standards, as issued by the International Accounting Standards Board (IASB),
Financial Reporting Pronouncements as issued by Financial Reporting Standards Council, JSE Listings Requirements and in
the manner required by the South African Companies Act, 2008.
Standards (IFRS) and Interpretations of those standards, as issued by the International Accounting Standards Board (IASB),
Financial Reporting Pronouncements as issued by Financial Reporting Standards Council, JSE Listings Requirements and in
the manner required by the South African Companies Act, 2008.
NEW STANDARDS AND INTERPRETATIONS ISSUED
The financial statements have been drawn up on the basis of accounting standards, interpretations and amendments effective
at the beginning of the accounting period on 1 January 2019. The adoption of the new standards, interpretations and
amendments effective from 1 January 2019 had the following impact on the group:
at the beginning of the accounting period on 1 January 2019. The adoption of the new standards, interpretations and
amendments effective from 1 January 2019 had the following impact on the group:
IFRS 16 Leases
The group elected to apply IFRS 16 utilising the modified retrospective approach, no cumulative effect of initially applying
IFRS 16 was identified and recognised as an adjustment to the opening balance of retained earnings. The cumulative impact
on the adoption of IFRS 16 resulted in the recognition of right of use assets, lease liabilities and the resultant deferred tax.
Refer to Note 16 for the detail on the right of use assets and lease liabilities. Comparative information has not been restated.
The group elected to apply IFRS 16 utilising the modified retrospective approach, no cumulative effect of initially applying
IFRS 16 was identified and recognised as an adjustment to the opening balance of retained earnings. The cumulative impact
on the adoption of IFRS 16 resulted in the recognition of right of use assets, lease liabilities and the resultant deferred tax.
Refer to Note 16 for the detail on the right of use assets and lease liabilities. Comparative information has not been restated.
For contracts previously classified as leases under IAS 17 Leases, the group has reassessed whether the contract is or
contains a lease upon initial transition to the new standard and has also performed an assessment to identify significant
contracts which have not previously been classified as leases, but which may be a lease under the new standard.
contains a lease upon initial transition to the new standard and has also performed an assessment to identify significant
contracts which have not previously been classified as leases, but which may be a lease under the new standard.
The group applied the following practical expedients upon transition to IFRS 16:
Transition options:
• Leases with a remaining contract period of 12 months or less will not be recorded on the statement of financial position
and the lease payments will be expensed in the income statement on a straight-line basis.
• The right-of-use asset is based on the lease liability recognised.
and the lease payments will be expensed in the income statement on a straight-line basis.
• The right-of-use asset is based on the lease liability recognised.
Practical expedients:
• The short-term lease exemption - leases with a duration of one year or less will be expensed in the income statement on
a straight-line basis.
• The low value lease exemption - the group applied the low value exemption with a value of $10k for the individual leased
asset value and added an exception within its accounting policy to not capitalise leases with a net present value of $250k
based on an IAS 1 materiality assessment.
• Exclusion of initial direct costs for the measurement of the right of use asset at the date of initial application.
• Use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
a straight-line basis.
• The low value lease exemption - the group applied the low value exemption with a value of $10k for the individual leased
asset value and added an exception within its accounting policy to not capitalise leases with a net present value of $250k
based on an IAS 1 materiality assessment.
• Exclusion of initial direct costs for the measurement of the right of use asset at the date of initial application.
• Use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
The leases accounting policy applicable from 1 January 2019 is included under “Leases” in Annexure A.
CHANGE IN DISCLOSURE
Effective 1 July 2019, the group changed the disclosure of “Special Items” in the income statement. In prior years, the group
disclosed items that due to their size and/or nature, required separate disclosure on the face of the income statement as
Special Items. In addition, a disclosure category - “Other operating expenses” was reported to disclose expenses which were
not included in gross profit. Going forward these two categories of expenses and income will be disclosed as:
disclosed items that due to their size and/or nature, required separate disclosure on the face of the income statement as
Special Items. In addition, a disclosure category - “Other operating expenses” was reported to disclose expenses which were
not included in gross profit. Going forward these two categories of expenses and income will be disclosed as:
• Other expenses (income); and
• Separate line item(s) on the face of the income statement depending on materiality.
• Separate line item(s) on the face of the income statement depending on materiality.
The re-presentation provides more useful information by reporting material items separately. The change in presentation has
no impact on the reported totals, headline earnings per share or on amounts presented in the Statement of Financial Position.
no impact on the reported totals, headline earnings per share or on amounts presented in the Statement of Financial Position.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 35
As a result of the change, reclassifications in the income statement are as follows:
Income statement extract
(1)
2018
2018
2017
2017
US dollar millions
Previously
reported
Reclassified
Previously
reported
Reclassified
Gross profit (loss)
772
772
784
784
Corporate administration, marketing and other expenses
(76)
(76)
(64)
(64)
Exploration and evaluation costs
(102)
(102)
(114)
(114)
Impairment, derecognition of assets and profit (loss) on disposal
n/a
(124)
n/a
(293)
Other expenses (income)
(97)
(143)
(88)
(233)
Special items
(170)
n/a
(438)
n/a
Operating profit (loss)
327
327
80
80
(1)
Represents reclassification prior to the disclosure of Discontinued operations.
The significant accounting principles applied in the presentation of the group and company annual financial statements are
set out below. The accounting policies adopted are detailed in Annexure A: “Summary of significant accounting policies”.
set out below. The accounting policies adopted are detailed in Annexure A: “Summary of significant accounting policies”.
1.1
BASIS OF PREPARATION
The financial statements are prepared according to the historical cost convention, except for the revaluation of certain financial
instruments to fair value. The group’s accounting policies as set out below are consistent in all material respects with those
applied in the previous year except for the changes arising from the adoption of IFRS 16 as described in “New Standards and
Interpretations Issued” above.
instruments to fair value. The group’s accounting policies as set out below are consistent in all material respects with those
applied in the previous year except for the changes arising from the adoption of IFRS 16 as described in “New Standards and
Interpretations Issued” above.
The comparative periods have been restated to separate continuing operations from discontinued operations in accordance
with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, as a consequence of the classification of the sale
of the South African producing assets and related liabilities as a discontinued operation. The sale agreement was announced
on 12 February 2020.
with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, as a consequence of the classification of the sale
of the South African producing assets and related liabilities as a discontinued operation. The sale agreement was announced
on 12 February 2020.
The group financial statements are presented in US dollars.
Based on materiality, certain comparatives in the notes have been aggregated and comparatives have been restated to accord
with current year disclosures. All notes are from continuing operations unless otherwise stated.
with current year disclosures. All notes are from continuing operations unless otherwise stated.
The group financial statements incorporate the financial statements of the company, its subsidiaries and its interests in joint
ventures and associates. The financial statements of all material subsidiaries, the Environmental Rehabilitation Trust Fund,
joint ventures and associates, are prepared for the same reporting period as the holding company, using the same accounting
policies.
ventures and associates. The financial statements of all material subsidiaries, the Environmental Rehabilitation Trust Fund,
joint ventures and associates, are prepared for the same reporting period as the holding company, using the same accounting
policies.
Subsidiaries are all entities over which the group has control. The group controls an entity when it is exposed to, or has rights
to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the
entity. Control would generally exist where the group owns more than 50% of the voting rights, unless the group and other
investors collectively control the entity where they must act together to direct the relevant activities. In such cases, as no
investor individually controls the entity the investment is accounted for as an associate, joint venture or a joint operation.
Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from
the date on which control ceases. The group re-assesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control.
to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the
entity. Control would generally exist where the group owns more than 50% of the voting rights, unless the group and other
investors collectively control the entity where they must act together to direct the relevant activities. In such cases, as no
investor individually controls the entity the investment is accounted for as an associate, joint venture or a joint operation.
Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from
the date on which control ceases. The group re-assesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control.
Intra-group transactions, balances and unrealised gains and losses on transactions between group companies, including any
resulting tax effects are eliminated.
resulting tax effects are eliminated.
Subsidiaries are accounted for at cost and are adjusted for impairments, where appropriate, in the company financial
statements.
statements.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 36
1.2
SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
USE OF ESTIMATES
The preparation of the financial statements requires the group’s management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the reporting period. The determination of estimates
requires the exercise of judgement based on various assumptions and other factors such as historical experience, current
and expected economic conditions, and in some cases actuarial techniques. Actual results could differ from those estimates.
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the reporting period. The determination of estimates
requires the exercise of judgement based on various assumptions and other factors such as historical experience, current
and expected economic conditions, and in some cases actuarial techniques. Actual results could differ from those estimates.
The more significant areas requiring the use of management estimates and assumptions relate to Ore Reserve that are the
basis of future cash flow estimates and unit-of-production depreciation, depletion and amortisation calculations;
environmental, reclamation and closure obligations; asset impairments/reversals (including impairments of goodwill);
recoverability of indirect taxes and write-downs of inventory to net realisable value. Other estimates include employee benefit
liabilities and unrecognised tax positions.
basis of future cash flow estimates and unit-of-production depreciation, depletion and amortisation calculations;
environmental, reclamation and closure obligations; asset impairments/reversals (including impairments of goodwill);
recoverability of indirect taxes and write-downs of inventory to net realisable value. Other estimates include employee benefit
liabilities and unrecognised tax positions.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
expectations of future events that are believed to be reasonable under the circumstances.
The judgements that management has applied in the application of accounting policies, and the estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are discussed below.
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are discussed below.
Carrying value of tangible assets
Amortisation
The majority of mining assets are amortised using the units-of-production method where the mine operating plan calls for
production from a well-defined proved and probable Ore Reserve.
The majority of mining assets are amortised using the units-of-production method where the mine operating plan calls for
production from a well-defined proved and probable Ore Reserve.
For other tangible assets, the straight-line method is applied over the estimated useful life of the asset which does not exceed
the estimated mine life based on proved and probable Ore Reserve as the useful lives of these assets are considered to be
limited to the life of the relevant mine.
the estimated mine life based on proved and probable Ore Reserve as the useful lives of these assets are considered to be
limited to the life of the relevant mine.
The calculation of the units-of-production rate of amortisation could be impacted to the extent that actual production in the
future is different from current forecast production based on proved and probable Ore Reserve. This would generally arise
from the following factors:
future is different from current forecast production based on proved and probable Ore Reserve. This would generally arise
from the following factors:
• changes in proved and probable Ore Reserve;
• the grade of Ore Reserve may vary significantly from time to time;
• differences between actual commodity prices and commodity price assumptions;
• unforeseen operational issues at mine sites; and
• changes in capital, operating, mining, processing and reclamation costs, discount rates and foreign exchange rates.
• the grade of Ore Reserve may vary significantly from time to time;
• differences between actual commodity prices and commodity price assumptions;
• unforeseen operational issues at mine sites; and
• changes in capital, operating, mining, processing and reclamation costs, discount rates and foreign exchange rates.
Changes in proved and probable Ore Reserve could similarly impact the useful lives of assets amortised on the straight-line
method, where those lives are limited to the life of the mine.
method, where those lives are limited to the life of the mine.
Stripping Costs
The group has a number of surface mining operations that are in the production phase for which production stripping costs
are incurred. The benefits that accrue to the group as a result of incurring production stripping costs include (a) ore that can
be used to produce inventory and (b) improved access to further quantities of material that will be mined in future periods.
The group has a number of surface mining operations that are in the production phase for which production stripping costs
are incurred. The benefits that accrue to the group as a result of incurring production stripping costs include (a) ore that can
be used to produce inventory and (b) improved access to further quantities of material that will be mined in future periods.
The production stripping costs relating to improved access to further quantities of material in future periods are capitalised as
a stripping activity asset, if and only if, all of the following are met:
a stripping activity asset, if and only if, all of the following are met:
• It is probable that the future economic benefit (improved access to the orebody) associated with the stripping activity will
flow to the group;
• The group can identify the component of the orebody for which access has been improved; and
• The costs relating to the stripping activity associated with that component or components can be measured reliably.
flow to the group;
• The group can identify the component of the orebody for which access has been improved; and
• The costs relating to the stripping activity associated with that component or components can be measured reliably.
Components of the various orebodies at the operations of the group are determined based on the geological areas identified
for each of the orebodies and are reflected in the Ore Reserve reporting of the group. In determining whether any production
stripping costs should be capitalised as a stripping activity asset, the group uses three operational guidance measures; two
of which relate to production measures, while the third relates to an average stripping ratio measure.
for each of the orebodies and are reflected in the Ore Reserve reporting of the group. In determining whether any production
stripping costs should be capitalised as a stripping activity asset, the group uses three operational guidance measures; two
of which relate to production measures, while the third relates to an average stripping ratio measure.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 37
Once determined that any portion of the production stripping costs should be capitalised, the group determines the amount
of the production stripping costs that should be capitalised with reference to the average mine costs per tonne of the
component and the actual waste tonnes that should be deferred. Stripping activity assets are amortised on the units-of-
production method based on the Ore Reserve of the component or components of the orebody to which these assets relate.
of the production stripping costs that should be capitalised with reference to the average mine costs per tonne of the
component and the actual waste tonnes that should be deferred. Stripping activity assets are amortised on the units-of-
production method based on the Ore Reserve of the component or components of the orebody to which these assets relate.
This accounting treatment is consistent with that for stripping costs incurred during the development phase of a pit, before
production commences, except that stripping costs incurred during the development phase of a pit, before production
commences, are amortised on the units-of-production method based on the Ore Reserve of the pit.
production commences, except that stripping costs incurred during the development phase of a pit, before production
commences, are amortised on the units-of-production method based on the Ore Reserve of the pit.
Deferred stripping costs are included in ‘Mine development costs’, within tangible assets. These costs form part of the total
investment in the relevant cash-generating unit, which is reviewed for impairment if events or a change in circumstances
indicate that the carrying value may not be recoverable. Amortisation of stripping activity assets is included in operating costs.
investment in the relevant cash-generating unit, which is reviewed for impairment if events or a change in circumstances
indicate that the carrying value may not be recoverable. Amortisation of stripping activity assets is included in operating costs.
Impairment
The group reviews and tests the carrying value of tangible assets when events or changes in circumstances indicate that the
carrying amount may not be recoverable. Assets are grouped at the lowest level for which identifiable cash flows are largely
independent of cash flows of other assets, which is generally at the individual mine level. If there are indications that
impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected
future cash flows used to determine the value in use of goodwill and tangible assets are inherently uncertain and could
materially change over time and impact the recoverable amounts. The cash flows and value in use are significantly affected
by a number of factors including published reserves, resources, exploration potential and production estimates, together with
economic factors such as spot and future metal prices, discount rates, foreign currency exchange rates, estimates of costs to
produce reserves and future capital expenditure. At the reporting date the group assesses whether any of the indicators which
gave rise to previously recognised impairments have changed such that the impairment loss no longer exists or may have
decreased. The impairment loss is then assessed on the original factors for reversal and if indicated, such reversal is
recognised.
The group reviews and tests the carrying value of tangible assets when events or changes in circumstances indicate that the
carrying amount may not be recoverable. Assets are grouped at the lowest level for which identifiable cash flows are largely
independent of cash flows of other assets, which is generally at the individual mine level. If there are indications that
impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected
future cash flows used to determine the value in use of goodwill and tangible assets are inherently uncertain and could
materially change over time and impact the recoverable amounts. The cash flows and value in use are significantly affected
by a number of factors including published reserves, resources, exploration potential and production estimates, together with
economic factors such as spot and future metal prices, discount rates, foreign currency exchange rates, estimates of costs to
produce reserves and future capital expenditure. At the reporting date the group assesses whether any of the indicators which
gave rise to previously recognised impairments have changed such that the impairment loss no longer exists or may have
decreased. The impairment loss is then assessed on the original factors for reversal and if indicated, such reversal is
recognised.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.
recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.
The recoverable amount is estimated based on the positive indicators. If an impairment loss has decreased, the carrying
amount is recorded at the recoverable amount as limited in terms of IAS 36 Impairment of Assets.
amount is recorded at the recoverable amount as limited in terms of IAS 36 Impairment of Assets.
The carrying value of tangible assets at 31 December 2019 was $2,592m (2018: $3,381m; 2017: $3,742m). The impairment
and derecognition of tangible assets recognised in the consolidated financial statements for the year ended
31 December 2019 (including impairment of tangible assets transferred to held for sale) was $505m (2018: $104m;
2017: $288m).
and derecognition of tangible assets recognised in the consolidated financial statements for the year ended
31 December 2019 (including impairment of tangible assets transferred to held for sale) was $505m (2018: $104m;
2017: $288m).
Carrying value of goodwill and intangible assets
Where an investment in a subsidiary, joint venture or an associate is made, any excess of the consideration transferred over
the fair value of the attributable Mineral Resource including value beyond proved and probable Ore Reserve, exploration
properties and net assets is recognised as goodwill.
the fair value of the attributable Mineral Resource including value beyond proved and probable Ore Reserve, exploration
properties and net assets is recognised as goodwill.
Intangible assets that have an indefinite useful life and separately recognised goodwill are not subject to amortisation and are
tested annually for impairment and whenever events or changes in circumstance indicate that the carrying amount may not
be recoverable. Assets that are subject to amortisation are tested for impairment whenever events or changes in circumstance
indicate that the carrying amount may not be recoverable.
tested annually for impairment and whenever events or changes in circumstance indicate that the carrying amount may not
be recoverable. Assets that are subject to amortisation are tested for impairment whenever events or changes in circumstance
indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating
units).
recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating
units).
An individual operating mine is not a typical going-concern business because of the finite life of its reserves. The allocation of
goodwill to an individual mine will result in an eventual goodwill impairment due to the wasting nature of the mine reporting
unit. In accordance with the provisions of IAS 36, the group performs its annual impairment review of assigned goodwill during
the fourth quarter of each year.
goodwill to an individual mine will result in an eventual goodwill impairment due to the wasting nature of the mine reporting
unit. In accordance with the provisions of IAS 36, the group performs its annual impairment review of assigned goodwill during
the fourth quarter of each year.
The carrying value of goodwill in the consolidated financial statements at 31 December 2019 was $116m (2018: $116m;
2017: $127m). The impairment of goodwill recognised in the consolidated financial statements for the year ended
31 December 2019 was nil (2018: nil; 2017: $9m).
2017: $127m). The impairment of goodwill recognised in the consolidated financial statements for the year ended
31 December 2019 was nil (2018: nil; 2017: $9m).
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 38
Income taxes
The group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the worldwide
provision for income taxes due to the complexity of legislation. There are many transactions and calculations for which the
ultimate tax determination is uncertain during the ordinary course of business. The group recognises liabilities for anticipated
tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is
different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions
in the period in which such determination is made.
provision for income taxes due to the complexity of legislation. There are many transactions and calculations for which the
ultimate tax determination is uncertain during the ordinary course of business. The group recognises liabilities for anticipated
tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is
different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions
in the period in which such determination is made.
The group tax reconciliation between tax expense and the product of accounting profit multiplied by the applicable tax rate,
prepared in accordance with IAS 12 Income Taxes, applies the South African corporate tax rate of 28%.
prepared in accordance with IAS 12 Income Taxes, applies the South African corporate tax rate of 28%.
The group recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the
deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax
assets requires the group to make significant estimates related to expectations of future taxable income. Estimates of future
taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction.
To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the group to realise
the net deferred tax assets recorded at the reporting date could be impacted.
deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax
assets requires the group to make significant estimates related to expectations of future taxable income. Estimates of future
taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction.
To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the group to realise
the net deferred tax assets recorded at the reporting date could be impacted.
Additionally, future changes in tax laws in the jurisdictions in which the group operates could limit the ability of the group to
obtain tax deductions in future periods.
obtain tax deductions in future periods.
Carrying values of the group at 31 December 2019:
• deferred tax asset: $105m (2018: nil; 2017: $4m);
• deferred tax liability: $241m (2018: $315m; 2017: $363m);
• taxation liability: $72m (2018: $60m; 2017: $53m); and
• taxation asset: $10m (2018: $6m; 2017: $3m), included in trade, other receivables and other assets.
• deferred tax liability: $241m (2018: $315m; 2017: $363m);
• taxation liability: $72m (2018: $60m; 2017: $53m); and
• taxation asset: $10m (2018: $6m; 2017: $3m), included in trade, other receivables and other assets.
Unrecognised value of deferred tax assets: $389m (2018: $501m; 2017: $470m).
Provision for environmental rehabilitation obligations
The group’s mining and exploration activities are subject to various laws and regulations governing the protection of the
environment. The group recognises management’s best estimate for decommissioning and restoration obligations in the
period in which they are incurred. Future changes to environmental laws and regulations, life of mine estimates, inflation rates,
foreign currency exchange rates and discount rates could affect the carrying amount of this provision.
environment. The group recognises management’s best estimate for decommissioning and restoration obligations in the
period in which they are incurred. Future changes to environmental laws and regulations, life of mine estimates, inflation rates,
foreign currency exchange rates and discount rates could affect the carrying amount of this provision.
The carrying amount of the rehabilitation obligations (including held for sale rehabilitation obligations) for the group at
31 December 2019 was $730m (2018: $637m; 2017: $724m).
31 December 2019 was $730m (2018: $637m; 2017: $724m).
Stockpiles and metals in process
Costs that are incurred in or benefit the production process are accumulated in stockpiles and metals in process values. Net
realisable value tests are performed at least annually and represent the estimated future sales price of the product, based on
prevailing and long-term metals prices, less estimated costs to complete production and bring the product to sale.
realisable value tests are performed at least annually and represent the estimated future sales price of the product, based on
prevailing and long-term metals prices, less estimated costs to complete production and bring the product to sale.
Surface and underground stockpiles and metals in process are measured by estimating the number of tonnes added and
removed from the stockpile, the number of contained ounces based on assay data, and the estimated recovery percentage
based on the expected processing method. Stockpile ore tonnages are verified by periodic surveys.
removed from the stockpile, the number of contained ounces based on assay data, and the estimated recovery percentage
based on the expected processing method. Stockpile ore tonnages are verified by periodic surveys.
Although the quantities of recoverable metal are reconciled by comparing the grades of ore to the quantities of metals actually
recovered (metallurgical balancing), the nature of the process inherently limits the ability to precisely monitor recoverability
levels. As a result, the metallurgical balancing process is constantly monitored and engineering estimates are refined based
on actual results over time.
recovered (metallurgical balancing), the nature of the process inherently limits the ability to precisely monitor recoverability
levels. As a result, the metallurgical balancing process is constantly monitored and engineering estimates are refined based
on actual results over time.
Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in
write-downs to net realisable value are accounted for on a prospective basis.
write-downs to net realisable value are accounted for on a prospective basis.
The carrying value of inventories (excluding finished goods and mine operating supplies) for the group at 31 December 2019
was $377m (2018: $404m; 2017: $424m).
was $377m (2018: $404m; 2017: $424m).
Recoverable tax, rebates, levies and duties
In a number of countries, particularly in Continental Africa, AngloGold Ashanti is due refunds of indirect tax which remain
outstanding for periods longer than those provided for in the respective statutes.
outstanding for periods longer than those provided for in the respective statutes.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 39
In addition, AngloGold Ashanti has unresolved non-income tax disputes in a number of countries, particularly in Continental
Africa and in Brazil and Argentina. If the outstanding input taxes are not received and these disputes are not resolved in a
manner favourable to AngloGold Ashanti, it could have a material adverse effect upon the carrying value of these assets and
our results of operations.
Africa and in Brazil and Argentina. If the outstanding input taxes are not received and these disputes are not resolved in a
manner favourable to AngloGold Ashanti, it could have a material adverse effect upon the carrying value of these assets and
our results of operations.
The net carrying value of recoverable tax, rebates, levies and duties for the group at 31 December 2019 was $227m
(2018: $194m; 2017: $174m).
(2018: $194m; 2017: $174m).
Post-retirement obligations
The determination of AngloGold Ashanti’s obligation and expense for post-retirement liabilities depends on the selection of
certain assumptions used by actuaries to calculate amounts. These assumptions include, among others, the discount rate,
the expected long-term rate of return of plan assets, health care inflation costs, rates of increase in compensation costs and
the number of employees who reach retirement age before the mine reaches the end of its life. While AngloGold Ashanti
believes that these assumptions are appropriate, significant changes in the assumptions may materially affect post-retirement
obligations as well as future expenses, which may result in an impact on earnings in the periods that the changes in these
assumptions occur.
certain assumptions used by actuaries to calculate amounts. These assumptions include, among others, the discount rate,
the expected long-term rate of return of plan assets, health care inflation costs, rates of increase in compensation costs and
the number of employees who reach retirement age before the mine reaches the end of its life. While AngloGold Ashanti
believes that these assumptions are appropriate, significant changes in the assumptions may materially affect post-retirement
obligations as well as future expenses, which may result in an impact on earnings in the periods that the changes in these
assumptions occur.
The carrying value of the post-retirement obligations at 31 December 2019 was $100m (2018: $100m; 2017: $122m).
Ore Reserve estimates
An Ore Reserve estimate is an estimate of the amount of product that can be economically and legally extracted from the
group’s properties. In order to calculate the Ore Reserve, estimates and assumptions are required about a range of geological,
technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs,
transport costs, commodity demand, commodity prices and exchange rates.
group’s properties. In order to calculate the Ore Reserve, estimates and assumptions are required about a range of geological,
technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs,
transport costs, commodity demand, commodity prices and exchange rates.
Estimating the quantity and/or grade of the Ore Reserve requires the size, shape and depth of orebodies to be determined by
analysing geological data such as the logging and assaying of drill samples. This process may require complex and difficult
geological judgements and calculations to interpret the data.
analysing geological data such as the logging and assaying of drill samples. This process may require complex and difficult
geological judgements and calculations to interpret the data.
The group is required to determine and report its Ore Reserve in accordance with the minimum standards described by the
South African Code for the reporting of Exploration Results, Mineral Resources and Mineral Reserves (The SAMREC Code,
2016 Edition).
South African Code for the reporting of Exploration Results, Mineral Resources and Mineral Reserves (The SAMREC Code,
2016 Edition).
Because the economic assumptions used to estimate changes in the Ore Reserve from period to period, and because
additional geological data is generated during the course of operations, estimates of the Ore Reserve may change from period
to period. Changes in the reported Ore Reserve may affect the group’s financial results and financial position in a number of
ways, including the following:
additional geological data is generated during the course of operations, estimates of the Ore Reserve may change from period
to period. Changes in the reported Ore Reserve may affect the group’s financial results and financial position in a number of
ways, including the following:
• asset carrying values may be affected due to changes in estimated future cash flows;
• depreciation, depletion and amortisation charged in the income statement may change where such charges are
determined by the units-of-production method, or where the useful economic lives of assets change;
• overburden removal costs, including production stripping activities, recorded on the statement of financial position or
charged in the income statement may change due to changes in stripping ratios or the units-of-production method of
depreciation;
• decommissioning site restoration and environmental provisions may change where changes in the estimated Ore Reserve
affect expectations about the timing or cost of these activities; and
• the carrying value of deferred tax assets may change due to changes in estimates of the likely recovery of the tax benefits.
• depreciation, depletion and amortisation charged in the income statement may change where such charges are
determined by the units-of-production method, or where the useful economic lives of assets change;
• overburden removal costs, including production stripping activities, recorded on the statement of financial position or
charged in the income statement may change due to changes in stripping ratios or the units-of-production method of
depreciation;
• decommissioning site restoration and environmental provisions may change where changes in the estimated Ore Reserve
affect expectations about the timing or cost of these activities; and
• the carrying value of deferred tax assets may change due to changes in estimates of the likely recovery of the tax benefits.
Development expenditure
Development activities commence after project sanctioning by the appropriate level of management. Judgement is applied by
management in determining when a project has reached a stage at which economically recoverable reserves exist such that
development may be sanctioned. In exercising this judgement, management is required to make certain estimates and
assumptions similar to those described in the accounting policy for exploration and evaluation assets. Any such estimates
and assumptions may change as new information becomes available. If, after having started the development activity, a
judgement is made that a development asset is impaired, the appropriate amount will be written off to the income statement.
management in determining when a project has reached a stage at which economically recoverable reserves exist such that
development may be sanctioned. In exercising this judgement, management is required to make certain estimates and
assumptions similar to those described in the accounting policy for exploration and evaluation assets. Any such estimates
and assumptions may change as new information becomes available. If, after having started the development activity, a
judgement is made that a development asset is impaired, the appropriate amount will be written off to the income statement.
Provision for silicosis
Significant judgement is applied in estimating the costs that will be incurred to settle the silicosis class action claims and
related expenditure. The final costs may differ from current cost estimates. The provision is based on actuarial assumptions
including:
related expenditure. The final costs may differ from current cost estimates. The provision is based on actuarial assumptions
including:
• silicosis prevalence rates;
• estimated settlement per claimant;
• benefit take-up rates;
• disease progression rates;
• timing of cashflows; and
• discount rate.
• estimated settlement per claimant;
• benefit take-up rates;
• disease progression rates;
• timing of cashflows; and
• discount rate.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 40
Management believes the assumptions are appropriate, however changes in the assumptions may materially affect the
provision and final costs of settlement.
provision and final costs of settlement.
The carrying value of the silicosis provision at 31 December 2019 was $65m (2018: $63m; 2017: $63m).
Identification and classification of discontinued operations
During 2019, the decision to sell the remaining South African operations was made, judgement was applied regarding
classification of the disposal group as held for sale at year end, and whether the disposal group should be classified as a
discontinued operation. The South African asset sale was assessed as a major geographical area of operations and part of
a single co-ordinated plan to dispose of a major geographical area of operations and accordingly, it was classified as a
discontinued operation. The sale was announced on 12 February 2020.
classification of the disposal group as held for sale at year end, and whether the disposal group should be classified as a
discontinued operation. The South African asset sale was assessed as a major geographical area of operations and part of
a single co-ordinated plan to dispose of a major geographical area of operations and accordingly, it was classified as a
discontinued operation. The sale was announced on 12 February 2020.
Contingencies
By their nature, contingencies will only be resolved when one or more future events occur or fail to occur. The assessment of
such contingencies inherently involves the exercise of significant judgement and estimates of the outcome of future events.
Such contingencies include, but are not limited to environmental obligations, litigation, regulatory proceedings, tax matters
and losses resulting from other events and developments.
such contingencies inherently involves the exercise of significant judgement and estimates of the outcome of future events.
Such contingencies include, but are not limited to environmental obligations, litigation, regulatory proceedings, tax matters
and losses resulting from other events and developments.
When a loss is considered probable and reasonably estimable, a liability is recorded in the amount of the best estimate for
the ultimate loss. The likelihood of a loss with respect to a contingency can be difficult to predict and determining a meaningful
estimate of the loss or a range of loss may not always be practicable based on the information available at the time and the
potential effect of future events and decisions by third parties that will determine the ultimate resolution of the contingency. It
is not uncommon for such matters to be resolved over many years, during which time relevant developments and new
information is continuously evaluated to determine both the likelihood of any potential loss and whether it is possible to
reasonably estimate a range of possible losses. When a loss is probable but a reasonable estimate cannot be made,
disclosure is provided.
the ultimate loss. The likelihood of a loss with respect to a contingency can be difficult to predict and determining a meaningful
estimate of the loss or a range of loss may not always be practicable based on the information available at the time and the
potential effect of future events and decisions by third parties that will determine the ultimate resolution of the contingency. It
is not uncommon for such matters to be resolved over many years, during which time relevant developments and new
information is continuously evaluated to determine both the likelihood of any potential loss and whether it is possible to
reasonably estimate a range of possible losses. When a loss is probable but a reasonable estimate cannot be made,
disclosure is provided.
In determining the threshold for disclosure on a qualitative and quantitative basis, management considers the potential for a
disruptive effect on the normal functioning of the group and/or whether the contingency could impact investment decisions.
Such qualitative matters considered are reputational risks, regulatory compliance issues and reasonable investor
considerations. For quantitative purposes, an amount of $18m has been considered.
disruptive effect on the normal functioning of the group and/or whether the contingency could impact investment decisions.
Such qualitative matters considered are reputational risks, regulatory compliance issues and reasonable investor
considerations. For quantitative purposes, an amount of $18m has been considered.
As a global company, the group is exposed to numerous legal risks. The outcome of currently pending and future proceedings
cannot be predicted with certainty. Litigation and other judicial proceedings as a rule raise difficult and complex legal issues
and are subject to uncertainties and complexities including, but not limited to, the facts and circumstances of each particular
case, issues regarding the jurisdiction in which each suit is brought and differences in applicable law. Upon resolution of any
pending legal matter, the group may be forced to incur charges in excess of the presently established provisions and related
insurance coverage. It is possible that the financial position, results of operations or cash flows of the group could be materially
affected by the unfavourable outcome of litigation.
cannot be predicted with certainty. Litigation and other judicial proceedings as a rule raise difficult and complex legal issues
and are subject to uncertainties and complexities including, but not limited to, the facts and circumstances of each particular
case, issues regarding the jurisdiction in which each suit is brought and differences in applicable law. Upon resolution of any
pending legal matter, the group may be forced to incur charges in excess of the presently established provisions and related
insurance coverage. It is possible that the financial position, results of operations or cash flows of the group could be materially
affected by the unfavourable outcome of litigation.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 41
2
SEGMENTAL INFORMATION
AngloGold Ashanti Limited's operating segments are reported based on the financial information provided to the Chief
Executive Officer and the Executive Committee, collectively identified as the Chief Operating Decision Maker (CODM). The
group 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 (including equity accounted investments).
Individual members of the Executive Committee are responsible for geographic regions of the business.
Executive Officer and the Executive Committee, collectively identified as the Chief Operating Decision Maker (CODM). The
group 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 (including equity accounted investments).
Individual members of the Executive Committee are responsible for geographic regions of the business.
Group analysis by origin is as follows:
Gold income
US dollar millions
2019
2018
2017
Geographical analysis of gold income by origin is as follows:
Continental Africa
(1)
2,203
1,983
1,895
Australia
851
780
709
Americas
1,000
1,021
1,104
4,054
3,784
3,708
Equity-accounted investments included above
(615)
(581)
(453)
Continuing operations
3,439
3,203
3,255
Discontinued operations - South Africa
554
602
1,101
3,993
3,805
4,356
Foreign countries included in the above and considered material are:
Australia
851
780
709
Argentina
387
399
Brazil
679
705
Guinea
489
Tanzania
849
715
664
DRC
504
468
Geographical analysis of gold income by destination is as follows:
South Africa
981
946
946
North America
486
450
456
Australia
851
780
709
Europe
329
387
399
United Kingdom
1,407
1,221
1,198
4,054
3,784
3,708
Equity-accounted investments included above
(615)
(581)
(453)
Continuing operations
3,439
3,203
3,255
Discontinued operations - South Africa
554
602
1,101
3,993
3,805
4,356
By-product revenue
US dollar millions
2019
2018
2017
Continental Africa
(1)
Australia
Americas
Americas
3
3
3
81
4
2
2
128
3
2
2
135
87
134
140
Equity-accounted investments included above
(1)
(1)
(1)
Continuing operations
86
133
139
Discontinued operations - South Africa
1
6
15
87
139
154
The group's revenue is mainly derived from gold income. Approximately 34% of the group's total gold produced is sold to two
customers of the group. Due to the diversity and depth of the total gold market, the bullion banks do not possess significant
pricing power.
customers of the group. Due to the diversity and depth of the total gold market, the bullion banks do not possess significant
pricing power.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
2 SEGMENTAL
INFORMATION
CONTINUED
PAGE 42
Gross profit (loss)
(2)
US dollar millions
2019
2018
2017
Continental Africa
(1)
605
380
386
Australia
221
160
159
Americas
(1)
265
310
253
Corporate and other
1
2
2
1,092
852
800
Equity-accounted investments included above
(188)
(102)
(13)
Continuing operations
904
750
787
Discontinued operations - South Africa
79
22
(3)
983
772
784
Cost of sales
US dollar millions
2019
2018
2017
Continental Africa
(1)
1,601
1,607
1,513
Australia
632
622
551
Americas
(1)
822
838
987
Corporate and other
(1)
(3)
(3)
3,054
3,064
3,048
Equity-accounted investments included above
(428)
(480)
(441)
Continuing operations
2,626
2,584
2,607
Discontinued operations - South Africa
479
589
1,129
3,105
3,173
3,736
Amoritisation
US dollar millions
2019
2018
2017
Continental Africa
(1)
367
379
421
Australia
173
149
130
Americas
(1)
177
192
273
Corporate and other
3
3
2
720
723
826
Equity-accounted investments included above
(137)
(165)
(136)
Continuing operations
583
558
690
Discontinued operations - South Africa
61
72
133
644
630
823
Total assets
(1)(3)(4)
US dollar millions
2019
2018
2017
South Africa
697
1,106
1,734
Continental Africa
3,514
3,135
3,153
Australia
972
888
929
Americas
1,427
1,286
1,258
Corporate and other
253
228
145
6,863
6,643
7,219
Non-current assets
(5)
US dollar millions
2019
2018
2017
Non-current assets considered material, by country are:
South Africa
25
1,005
1,295
Foreign entities
4,644
4,234
4,259
DRC
1,506
1,439
1,423
Ghana
758
550
533
Tanzania
379
369
422
Australia
817
718
764
Brazil
625
615
632
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
2
SEGMENTAL INFORMATION
CONTINUED
PAGE 43
Capital expenditure
US dollar millions
2019
2018
2017
Continental Africa
(1)
410
313
409
Australia
149
156
153
Americas
(1)
195
176
234
Corporate and other
—
—
2
Continuing operations
754
645
798
Discontinued operations - South Africa
60
76
155
814
721
953
Equity-accounted investments
(51)
(69)
(123)
763
652
830
(1)
Includes equity-accounted investments.
(2)
The group's segmental profit measure is gross profit (loss), which excludes the results of associates and joint ventures. For the reconciliation of
gross profit (loss) to profit before taxation, refer to the group income statement.
(3)
Total assets include allocated goodwill of $108m (2018: $108m; 2017: $119m) for Australia and $8m (2018: $8m; 2017: $8m) for Americas (note 17).
The South African segment includes assets held for sale of $581m (2018: nil; 2017: $348m) and the Continental Africa segment includes assets
held for sale of $20m (2018: nil; 2017:nil).
held for sale of $20m (2018: nil; 2017:nil).
(4)
In 2019, pre-tax impairments and derecognition of assets of $556m were accounted for in South Africa (2018: $98m; 2017: $294m), Continental
Africa $2m (2018: $5m; 2017: nil) and the Americas $1m (2018: $1m; 2017: nil).
(5)
Non-current assets exclude financial instruments and deferred tax assets.
3
REVENUE FROM PRODUCT SALES
US dollar millions
2019
2018
2017
Revenue consists of the following principal categories:
Gold income (note 2)
3,439
3,203
3,255
By-products (note 2)
86
133
139
Revenue from product sales
3,525
3,336
3,394
4
COST OF SALES
Cash operating costs
Royalties
Other cash costs
Total cash costs
Retrenchment costs
Rehabilitation and other non-cash costs
Amortisation of tangible assets (notes 32 and 36)
Amortisation of right of use assets
Royalties
Other cash costs
Total cash costs
Retrenchment costs
Rehabilitation and other non-cash costs
Amortisation of tangible assets (notes 32 and 36)
Amortisation of right of use assets
(1)
(notes 32 and 36)
Amortisation of intangible assets (notes 32 and 36)
Inventory change
Inventory change
(1)
Amortisation relating to right of use assets as recognised in accordance with IFRS 16 Leases.
5
CORPORATE ADMINISTRATION, MARKETING AND OTHER COSTS
Corporate administration expenses
Share scheme and related costs
Share scheme and related costs
6
OTHER EXPENSES (INCOME)
(1)
Care and maintenance (note 36)
47
39
62
Governmental fiscal claims, cost of old tailings operations and other
expenses
21
14
15
Guinea public infrastructure contribution
8
—
—
Pension and medical defined benefit provisions
9
10
9
Royalties received
(3)
(10)
(18)
Brazilian power utility legal settlement
(16)
—
—
Retrenchment and related costs
3
6
6
Legal fees and project costs
11
16
74
Other indirect taxes
3
4
2
83
79
150
(1)
Change in disclosure from prior years. Refer note 1.
1,831
1,850
1,756
137
133
111
13
13
14
1,981
1,996
1,881
4
4
6
53
17
16
538
553
685
42
—
—
3
5
5
5
9
14
2,626
2,584
2,607
63
19
19
60
16
16
52
16
16
82
76
64
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 44
7
FINANCE COSTS AND UNWINDING OF OBLIGATIONS
Finance costs
Finance costs on bonds, corporate notes, bank loans and other
Amortisation of fees
Lease finance charges
Less: interest capitalised
Finance costs on bonds, corporate notes, bank loans and other
Amortisation of fees
Lease finance charges
Less: interest capitalised
Unwinding of obligations
Total finance costs and unwinding of obligations (notes 32 and 36)
Total finance costs and unwinding of obligations (notes 32 and 36)
8
SHARE OF ASSOCIATES AND JOINT VENTURES’ PROFIT (LOSS)
Revenue
Operating costs and other expenses
Net interest received (paid)
Profit (loss) before taxation
Taxation
Profit (loss) after taxation
Impairment reversal of investments in associates
Operating costs and other expenses
Net interest received (paid)
Profit (loss) before taxation
Taxation
Profit (loss) after taxation
Impairment reversal of investments in associates
(1)
Impairment reversal of investments in joint ventures (note 19)
Share of associates and joint ventures’ profit (loss) (note 32)
Share of associates and joint ventures’ profit (loss) (note 32)
(1)
Based on the results and financial position of Rand Refinery (Pty) Limited, an impairment reversal was recognised.
9
DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES HELD FOR SALE
South African asset sale
On 12 February 2020, AngloGold Ashanti announced that it has reached an agreement to sell its remaining South African
producing assets and related liabilities to Harmony Gold Mining Company Limited. Consideration for the transaction is in cash
and deferred payments with expected proceeds of around $300m subject to subsequent performance, and with additional
proceeds if the West Wits assets are developed below current infrastructure.
producing assets and related liabilities to Harmony Gold Mining Company Limited. Consideration for the transaction is in cash
and deferred payments with expected proceeds of around $300m subject to subsequent performance, and with additional
proceeds if the West Wits assets are developed below current infrastructure.
The transaction includes the following assets and liabilities:
• The Mponeng mine and its associated assets and liabilities;
• The Tau Tona and Savuka mines and associated rock-dump and tailings storage facility reclamation sites, mine
rehabilitation and closure activities located in the West Wits region and their associated assets and liabilities;
• First Uranium (Pty) Limited which owns Mine Waste Solutions (Pty) Limited and Chemwes (Pty) Limited as well as
associated tailings assets and liabilities;
• Covalent Water Company (Pty) Limited, AngloGold Security Services (Pty) Limited and Masakhisane Investments (Pty)
Limited; and
• Certain rock-dump reclamation, mine rehabilitation and closure activities located in the Vaal River region and their
associated assets and liabilities.
• The Tau Tona and Savuka mines and associated rock-dump and tailings storage facility reclamation sites, mine
rehabilitation and closure activities located in the West Wits region and their associated assets and liabilities;
• First Uranium (Pty) Limited which owns Mine Waste Solutions (Pty) Limited and Chemwes (Pty) Limited as well as
associated tailings assets and liabilities;
• Covalent Water Company (Pty) Limited, AngloGold Security Services (Pty) Limited and Masakhisane Investments (Pty)
Limited; and
• Certain rock-dump reclamation, mine rehabilitation and closure activities located in the Vaal River region and their
associated assets and liabilities.
The consideration comprises three elements:
• US$200m in cash payable at closing; and
• Two components of deferred consideration, payable as follows:
• Two components of deferred consideration, payable as follows:
1. US$260 per ounce payable on all underground production sourced within the West Wits mineral rights (comprising
the Mponeng, Savuka and Tau Tona mines) in excess of 250,000 ounces per annum for 6 years commencing
1 January 2021; and
1 January 2021; and
2. US$20 per ounce payable on underground production sourced within the West Wits mineral rights (comprising the
Mponeng, Savuka and Tau Tona mines) below the datum of current infrastructure.
The agreement provides for terms customary in agreements of this nature and is subject to customary conditions precedent.
Key conditions precedent include:
Key conditions precedent include:
• Approval from the South African Competition Authorities pursuant to the South African Competition Act No 89 of 1998;
and
• Section 11 approval from the Minister of Mineral Resources and Energy pursuant to the MPRDA in relation to West Wits
Mineral Right.
and
• Section 11 approval from the Minister of Mineral Resources and Energy pursuant to the MPRDA in relation to West Wits
Mineral Right.
AngloGold Ashanti and Harmony have committed to engage with the relevant authorities and other stakeholders in order to
ensure the conditions precedent are fulfilled as soon as possible with earliest closing anticipated on or about 30 June 2020.
ensure the conditions precedent are fulfilled as soon as possible with earliest closing anticipated on or about 30 June 2020.
2017
2018
2019
US dollar millions
135
128
131
4
7
4
10
5
6
(6)
—
—
143
140
141
29
28
16
172
168
157
616
582
454
(452)
(472)
(471)
10
(8)
1
174
102
(16)
(35)
(9)
23
139
93
7
23
15
13
6
14
2
168
122
22
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
9
DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES HELD FOR SALE CONTINUED
PAGE 45
South African asset sale CONTINUED
As at 31 December 2019, AngloGold Ashanti had received offers from potential buyers regarding the sale of the South African
assets. The announced transaction on 12 February 2020 resulted in an expected consideration of around $300m which forms
the basis for the fair value less costs to sell value of the South Africa disposal group. The non-recurring fair value measurement
for the South Africa disposal group is included in level 3 of the fair value hierarchy. The fair value is based on unobservable
market offers from potential buyers for the South Africa disposal group.
assets. The announced transaction on 12 February 2020 resulted in an expected consideration of around $300m which forms
the basis for the fair value less costs to sell value of the South Africa disposal group. The non-recurring fair value measurement
for the South Africa disposal group is included in level 3 of the fair value hierarchy. The fair value is based on unobservable
market offers from potential buyers for the South Africa disposal group.
The held for sale assets and liabilities related to the transaction are reported in the South Africa segment. The South African
asset sale is treated as a discontinued operation.
asset sale is treated as a discontinued operation.
In terms of the transaction the silicosis obligation of $65m and the post-retirement medical obligation of $93m relating to South
African employees are retained by AngloGold Ashanti.
African employees are retained by AngloGold Ashanti.
Sale interest in the Sadiola Mine
On 23 December 2019, AngloGold Ashanti announced that it together with its joint venture partner, IAMGOLD Corporation
(IAMGOLD), had agreed to sell their interests in Société d’Exploitation des Mines d’Or de Sadiola S.A. (Sadiola) to Allied Gold
Corp (Allied Gold). Sadiola's principal asset is the Sadiola Mine located in the Kayes region of Western Mali. AngloGold
Ashanti and IAMGOLD each hold a 41% interest in Sadiola with the remaining 18% interest held by the Government of Mali.
(IAMGOLD), had agreed to sell their interests in Société d’Exploitation des Mines d’Or de Sadiola S.A. (Sadiola) to Allied Gold
Corp (Allied Gold). Sadiola's principal asset is the Sadiola Mine located in the Kayes region of Western Mali. AngloGold
Ashanti and IAMGOLD each hold a 41% interest in Sadiola with the remaining 18% interest held by the Government of Mali.
In terms of the agreement, AngloGold Ashanti and IAMGOLD will sell their collective interests in Sadiola to Allied Gold for a
cash consideration of US$105m, payable as follows:
cash consideration of US$105m, payable as follows:
• US$50m (US$25m each to AngloGold Ashanti and IAMGOLD) upon the fulfillment or waiver of all conditions precedent
and closing of the transaction;
• Up to a further US$5m (US$2.5m each to AngloGold Ashanti and IAMGOLD), payable 8 days after closing, to the extent
that the cash balance of Sadiola at closing is greater than an agreed amount;
• US$25m (US$12.5m each to AngloGold Ashanti and IAMGOLD) upon the production of the first 250,000 ounces from the
Sadiola Sulphides Project (SSP); and
• US$25m (US$12.5m each to AngloGold Ashanti and IAMGOLD) upon the production of a further 250,000 ounces from
the SSP.
and closing of the transaction;
• Up to a further US$5m (US$2.5m each to AngloGold Ashanti and IAMGOLD), payable 8 days after closing, to the extent
that the cash balance of Sadiola at closing is greater than an agreed amount;
• US$25m (US$12.5m each to AngloGold Ashanti and IAMGOLD) upon the production of the first 250,000 ounces from the
Sadiola Sulphides Project (SSP); and
• US$25m (US$12.5m each to AngloGold Ashanti and IAMGOLD) upon the production of a further 250,000 ounces from
the SSP.
The transaction is subject to the fulfillment, or waiver, of a number of conditions precedent, including the receipt of certain
approvals and releases from the Government of Mali. AngloGold Ashanti received approval from the South African Reserve
Bank in early 2020. It is anticipated that all conditions precedent will be fulfilled or waived by the end of April 2020.
approvals and releases from the Government of Mali. AngloGold Ashanti received approval from the South African Reserve
Bank in early 2020. It is anticipated that all conditions precedent will be fulfilled or waived by the end of April 2020.
This transaction offer represents the most significant unobservable input in determining the non-recurring fair value
measurement of the Sadiola investment; accordingly, the fair value is included in level 3 of the fair value hierarchy.
measurement of the Sadiola investment; accordingly, the fair value is included in level 3 of the fair value hierarchy.
The carrying value of the Sadiola held for sale asset of $20m (which is lower than fair value less costs to sell) is included in
the Continental Africa segment; it was previously disclosed as an investment in joint venture on the Statement of Financial
Position.
the Continental Africa segment; it was previously disclosed as an investment in joint venture on the Statement of Financial
Position.
Discontinued operations
The results of the South Africa disposal group for the year ended 31 December are presented below:
US dollar millions
2019
2018
2017
Revenue from product sales
555
608
1,116
Cost of sales
(479)
(589)
(1,129)
Gain (loss) on non-hedge derivatives and other commodity contracts
3
3
10
Gross profit (loss)
79
22
(3)
Other expenses
(44)
(72)
(97)
Derecognition of assets, impairments and profit on disposal of assets
(3)
(118)
(256)
Impairment loss recognised on remeasurement to fair value less costs to
sell
(549)
(35)
Profit (loss) before taxation
(517)
(168)
(391)
Normal taxation and deferred taxation on operations
(23)
38
(14)
Deferred tax on impairment loss, derecognition and profit on disposal of
assets
164
47
69
Profit (loss) from discontinued operations
(376)
(83)
(336)
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
9
DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES HELD FOR SALE CONTINUED
PAGE 46
Assets and liabilities held for sale
The major classes of assets and liabilities of the South African disposal group as at 31 December 2019, are as follows:
US dollar millions
2019
Tangible assets and right of use assets
429
Other investments
84
Inventories
37
Trade, other receivables and other assets
4
Deferred taxation
15
Cash and cash restricted for use
12
Assets held for sale
581
Lease liabilities
3
Environmental rehabilitation and other provisions
211
Trade and other payables
58
Liabilities held for sale
272
Net assets held for sale
309
Total assets held for sale include:
Sadiola
Sadiola
20
South Africa
581
601
601
The discontinued operations' net cash flows are reflected in the Statement of Cash Flows.
Impairment of South African assets
Following the classification of the South African disposal group as held for sale, an impairment of $549m (tangible assets of
$495m and non-current inventories of $54m) and taxation on impairment of $164m (i.e. $385m, net of tax) was recognised to
reduce the carrying amount of the assets in the disposal group to their fair value less costs to sell.
$495m and non-current inventories of $54m) and taxation on impairment of $164m (i.e. $385m, net of tax) was recognised to
reduce the carrying amount of the assets in the disposal group to their fair value less costs to sell.
10
EMPLOYEE BENEFITS
US dollar millions
2019
2018
2017
Employee benefits including Executive Directors' and Prescribed Officers'
salaries and other benefits
680
797
1,024
Health care and medical scheme costs
- current medical expenses
29
39
58
- defined benefit post-retirement medical expenses
8
9
10
Pension and provident plan costs
- defined contribution
29
37
53
Retrenchment costs
7
30
92
Share-based payment expense (note 11)
42
35
33
Included in cost of sales, other expenses (income) and corporate
administration, marketing and other expenses of continuing and
discontinued operations
795
947
1,270
11
SHARE-BASED PAYMENTS
Equity-settled share incentive schemes
Bonus Share Plan (BSP)
Deferred Share Plan (DSP)
Other
Bonus Share Plan (BSP)
Deferred Share Plan (DSP)
Other
6
13
2
20
—
2
26
—
—
—
21
22
26
Cash-settled share incentive scheme
Cash-settled Long Term Incentive Plan (CSLTIP)
21
13
7
Total share-based payment expense (note 10)
42
35
33
Equity-settled incentive schemes
Equity schemes include the Bonus Share Plan (BSP), Deferred Share Plan (DSP); Long term incentive Plan (LTIP) and Co-
investment Plan (CIP).
investment Plan (CIP).
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
11
SHARE-BASED PAYMENTS CONTINUED
PAGE 47
Award date (unvested awards and awards vested during the year)
2015
Bonus Share Plan (BSP)
Award date (unvested awards and awards vested during the year)
2019
2018
2017
Calculated fair value
R119.14 7
R152.87
Vesting date 50%
22 Feb 2019
1 Mar 2018
Vesting date 50%
22 Feb 2020
1 Mar 2019
Expiry date
22 Feb 2028
1 Mar 2027
Number of shares
2019
2018
2017
Awards outstanding at beginning of year
4,557,919
4,479,679
4,198,285
Awards granted during the year
2,492,584
1,926,549
Awards lapsed during the year
(109,065)
(359,343)
(218,601)
Awards exercised during the year
(2,307,439)
(2,055,001)
(1,426,554)
Awards outstanding at end of year
2,141,415
4,557,919
4,479,679
Awards exercisable at end of year
1,207,936
1,588,512
1,904,021
Cash awards granted under the bonus share plan, outstanding at year end 31 December 2019 amount to 12,295
(2018: 33,046; 2017: 23,666) and an amount of 20,751 cash awards vested and are deemed settled for the year ended
31 December 2019 (2018: 15,209; 2017: 6,754).
(2018: 33,046; 2017: 23,666) and an amount of 20,751 cash awards vested and are deemed settled for the year ended
31 December 2019 (2018: 15,209; 2017: 6,754).
Deferred Share Plan (DSP)
The Deferred Share Plan (DSP) was implemented with effect from 1 January 2018, with the first awards for the scheme
allocated in March 2019. This represents a single scheme under which share awards will be allocated to certain employees
from 2019 onwards, vesting equally over a period of 2,3 and 5 years depending on the level of seniority of the participant.
allocated in March 2019. This represents a single scheme under which share awards will be allocated to certain employees
from 2019 onwards, vesting equally over a period of 2,3 and 5 years depending on the level of seniority of the participant.
Award date (unvested awards and awards vested during the year)
2019
Calculated fair value
R204.42
DSP 2 year
Vesting date 50%
Vesting date 50%
Vesting date 50%
Vesting date 50%
21 Feb 2020
21 Feb 2021
21 Feb 2021
DSP 3 year
Vesting date 33%
Vesting date 33%
Vesting date 34%
Vesting date 33%
Vesting date 33%
Vesting date 34%
21 Feb 2020
21 Feb 2021
21 Feb 2022
21 Feb 2021
21 Feb 2022
DSP 5 year
Vesting date 20%
Vesting date 20%
Vesting date 20%
Vesting date 20%
Vesting date 20%
Vesting date 20%
Vesting date 20%
Vesting date 20%
Vesting date 20%
Vesting date 20%
21 Feb 2020
21 Feb 2021
21 Feb 2022
21 Feb 2023
21 Feb 2024
21 Feb 2021
21 Feb 2022
21 Feb 2023
21 Feb 2024
Expiry date
21 Feb 2029
Number of shares
2019
Awards outstanding at beginning of year
Awards granted during the year
Awards granted during the year
1,669,191
Awards lapsed during the year
(55,208)
Awards exercised during the year
(14,623)
Awards outstanding at end of year
1,599,360
Long Term Incentive Plan (LTIP)
Calculated fair value
R129.94
Vesting date
3 Mar 2018
Expiry date
3 Mar 2025
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
11
SHARE-BASED PAYMENTS CONTINUED
PAGE 48
Long Term Incentive Plan (LTIP) CONTINUED
Number of shares
2019
2018
2017
Awards outstanding at beginning of year
447,842
2,466,357
4,363,330
Awards lapsed during the year
—
(1,186,330)
(1,512,857)
Awards exercised during the year
(218,203)
(832,185)
(384,116)
Awards outstanding at end of year
229,639
447,842
2,466,357
Awards exercisable at end of year
229,639
447,842
455,914
Co-Investment Plan (CIP)
Number of shares
2019
2018
2017
Awards outstanding at beginning of year
112,578
95,378
97,651
Awards granted during the year
80,809
112,105
Awards lapsed during the year
(16,500)
(11,633)
(62,775)
Awards matched during the year
(72,151)
(51,976)
(51,603)
Awards outstanding at end of year
23,927
112,578
95,378
Cash-Settled Long Term Incentive Plan (CSLTIP)
There were no changes to rules or practices within the CSLTIP scheme, and no awards during 2018 and 2019.
Award date (unvested awards and awards vested during the year)
2017
2016
Vesting date
1 March 2020
1 March 2019
Number of units
2019
2018
2017
Share units outstanding at beginning of year
3,815,761
4,469,618
2,464,630
Share units granted during the year
2,572,437
Share units lapsed during the year
(1,305,761)
(611,265)
(507,597)
Share units exercised during the year
(1,029,438)
(42,592)
(59,852)
Share units outstanding at end of year
1,480,562
3,815,761
4,469,618
The closing share price at 31 December 2019 is R316.50 (2018: R 181.75; 2017: R 128.62).
12 TAXATION
US dollar millions
2019
2018
2017
South African taxation
Normal taxation
—
—
1
Prior year (over) under provision
—
(2)
—
Deferred taxation
Other temporary differences
(18)
(27)
(42)
Change in estimated deferred tax rate
(14)
7
10
(32)
(22)
(31)
Foreign taxation
Normal taxation
299
243
201
Prior year (over) under provision
(1)
1
(26)
Deferred taxation
Temporary differences
(28)
(6)
19
Prior year (over) under provision
1
4
2
Change in estimate
9
(7)
—
Change in statutory tax rate
2
(1)
(2)
282
234
194
250
212
163
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
12 TAXATION
CONTINUED
PAGE 49
US dollar millions
2019
2018
2017
Reconciliation to South African statutory rate
Implied tax charge at 28%
173
125
92
Increase (decrease) due to:
Expenses not tax deductible
(1)
28
28
25
Share of associates and joint ventures' (profit) loss
(47)
(34)
(6)
Tax rate differentials
(2)
39
25
29
Exchange variations, translation and accounting adjustments
11
24
6
Current year tax losses not recognised (recognised) in deferred tax assets:
Obuasi mine
14
13
18
AngloGold Ashanti Holdings plc
(3)
29
36
—
North America
6
6
—
Tax exempt entities:
AngloGold Ashanti Holdings plc
(3)
—
—
31
Other
(2)
(1)
—
Change in planned utilisation of deferred tax assets and impact of estimated
deferred tax rate change
(5)
—
10
Tax effect of retained SA items
3
(10)
(13)
Tax allowances
(1)
(2)
(3)
Impact of statutory tax rate change
2
(1)
(2)
Adjustment in respect of prior years
—
3
(24)
Income tax expense
250
212
163
(1)
Includes corporate and other costs, transfer pricing and British Virgin Isle group losses.
(2)
Due to different tax rates in various jurisdictions.
(3)
During 2018, AngloGold Ashanti Holdings plc changed its tax jurisdiction from the Isle of Man (taxed at 0% in 2017) to the United Kingdom (taxed
at 19% in 2018 and 2019).
US dollar millions
2019
2018
2017
Analysis of unrecognised deferred tax assets
Tax losses available to be utilised against future profits
- utilisation required within one year
—
48
—
- utilisation required between one and two years
85
187
48
- utilisation required between two and five years
356
300
333
- utilisation required between five and twenty years
973
1,229
1,210
- utilisation in excess of twenty years
73
26
1
1,487
1,790
1,592
At the statutory tax rates the unrecognised value of deferred tax assets are: $389m (2018: $501m; 2017: $470m), mainly
relating to tax losses incurred in the United Kingdom, North America, Ghana and Colombia.
relating to tax losses incurred in the United Kingdom, North America, Ghana and Colombia.
Income tax uncertainties
AngloGold Ashanti operates in numerous countries around the world and accordingly is subject to, and pays annual income
taxes under, the various income tax regimes in the countries in which it operates. Some of these tax regimes are defined by
contractual agreements with local government, and others are defined by the general corporate income tax laws of the country.
The group has historically filed, and continues to file, all required income tax returns and to pay the taxes reasonably
determined to be due. In some jurisdictions, tax authorities are yet to complete their assessments for previous years. The tax
rules and regulations in many countries are highly complex and subject to interpretation. From time to time, the group is
subject to a review of its historic income tax filings and in connection with such reviews, disputes can arise with the tax
authorities over the interpretation or application of certain rules in respect of the group’s business conducted within the country
involved. Significant judgement is required in determining the worldwide provisions for income taxes due to the complexity of
legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the
ordinary course of business.
taxes under, the various income tax regimes in the countries in which it operates. Some of these tax regimes are defined by
contractual agreements with local government, and others are defined by the general corporate income tax laws of the country.
The group has historically filed, and continues to file, all required income tax returns and to pay the taxes reasonably
determined to be due. In some jurisdictions, tax authorities are yet to complete their assessments for previous years. The tax
rules and regulations in many countries are highly complex and subject to interpretation. From time to time, the group is
subject to a review of its historic income tax filings and in connection with such reviews, disputes can arise with the tax
authorities over the interpretation or application of certain rules in respect of the group’s business conducted within the country
involved. Significant judgement is required in determining the worldwide provisions for income taxes due to the complexity of
legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the
ordinary course of business.
The IFRS Interpretations Committee issued IFRIC23, which clarifies how the recognition and measurement requirements of
income taxes are applied where there is uncertainty over income tax treatments. IFRIC 23 was adopted by the group on
1 January 2019.
income taxes are applied where there is uncertainty over income tax treatments. IFRIC 23 was adopted by the group on
1 January 2019.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
12
TAXATION CONTINUED
PAGE 50
Income tax uncertainties CONTINUED
Irrespective of whether potential economic outflows of matters have been assessed as probable or possible, individually
significant matters are included below, to the extent that disclosure does not prejudice the group.
significant matters are included below, to the extent that disclosure does not prejudice the group.
Argentina - Cerro Vanguardia SA
The Argentina Tax Authority has challenged the deduction of certain hedge losses, with tax and penalties amounting to $10m
(2018: $14m; 2017: $27m). Management has appealed this matter which has been heard by the Tax Court, with final evidence
submitted in 2017. The matter is pending and judgement is expected in the next 24 months. Management is of the opinion
that the hedge losses were claimed correctly and no provision has therefore been made.
(2018: $14m; 2017: $27m). Management has appealed this matter which has been heard by the Tax Court, with final evidence
submitted in 2017. The matter is pending and judgement is expected in the next 24 months. Management is of the opinion
that the hedge losses were claimed correctly and no provision has therefore been made.
Brazil - AGA Mineração and Serra Grande
The Brazil Tax Authority has challenged various aspects of the Companies’ tax returns for periods from 2003 to 2016 which
individually and in aggregate are not considered to be material. Based on the engagement with the Tax Authority, certain
amounts have been allowed and assessments reduced, whilst objections have been lodged against the remainder of the
findings. In December 2019, Serra Grande received a tax assessment of approximately $25m relating to the amortisation of
goodwill on the acquisition of mining interests, which is permitted as a tax deduction when the acquirer is a domiciled entity.
Management is of the opinion that the Tax Authority is unlikely to succeed in this matter. This is supported by external legal
advice and therefore no provision has been made.
individually and in aggregate are not considered to be material. Based on the engagement with the Tax Authority, certain
amounts have been allowed and assessments reduced, whilst objections have been lodged against the remainder of the
findings. In December 2019, Serra Grande received a tax assessment of approximately $25m relating to the amortisation of
goodwill on the acquisition of mining interests, which is permitted as a tax deduction when the acquirer is a domiciled entity.
Management is of the opinion that the Tax Authority is unlikely to succeed in this matter. This is supported by external legal
advice and therefore no provision has been made.
Colombia - La Colosa and Gramalote
The tax treatment of exploration expenditure has been investigated by the Colombian Tax Authority which resulted in claims
for taxes and penalties of $88m
for taxes and penalties of $88m
(1)
(2018: $144m; 2017: $150m) pertaining to the 2010 to 2014 tax years.
These assessments were appealed in 2016 (in the case of La Colosa) and resulted in an adverse judgement on
22 October 2018, in the Administrative Court of Cundinamarca. An appeal was lodged and all arguments submitted to the
Council of State on 21 August 2018, with an expected judgement in the next 12 to 18 months. The deduction of exploration
costs is prohibited from 2017 onwards following a change in legislation. Subsequent to this date, exploration costs have been
treated in accordance with the amended legislation. In July 2019, the Supreme Administrative Court issued a ruling that
duplicate penalties may not be charged. The impact of the ruling is that certain penalties will be waived, which reduces the
overall exposure by $76m. The matter is pending and may take two to four years to be resolved. Management is of the opinion
that the Colombian Tax Authority is unlikely to succeed in this matter and therefore no provision is made.
22 October 2018, in the Administrative Court of Cundinamarca. An appeal was lodged and all arguments submitted to the
Council of State on 21 August 2018, with an expected judgement in the next 12 to 18 months. The deduction of exploration
costs is prohibited from 2017 onwards following a change in legislation. Subsequent to this date, exploration costs have been
treated in accordance with the amended legislation. In July 2019, the Supreme Administrative Court issued a ruling that
duplicate penalties may not be charged. The impact of the ruling is that certain penalties will be waived, which reduces the
overall exposure by $76m. The matter is pending and may take two to four years to be resolved. Management is of the opinion
that the Colombian Tax Authority is unlikely to succeed in this matter and therefore no provision is made.
(1)
Includes reduction of overall exposure by $76m as described above.
Guinea - Siguiri
The Guinea Tax Authority has challenged various aspects of the Companies’ tax returns for periods of 2010, and 2014 to
2016 totalling $12m (attr.) (2018: $8m (attr.); 2017: $8m (attr.)). Management has objected to these assessments but has
provided for a portion of the total claims amounting to $2m (attr.) (2018: $2m (attr.); 2017: $2m (attr.)).
2016 totalling $12m (attr.) (2018: $8m (attr.); 2017: $8m (attr.)). Management has objected to these assessments but has
provided for a portion of the total claims amounting to $2m (attr.) (2018: $2m (attr.); 2017: $2m (attr.)).
Mali - Sadiola, Yatela, Morila
The Mali Tax Authority has challenged various aspects of the Companies’ tax returns for periods of 2012 to 2018 totalling
$26m (attr.) (2018: $16m (attr.); 2017: $16m (attr)). This includes an assessment of $10m (attr.) received in late
December 2019. Management has objected to these assessments and is of the opinion that the Tax Authority is unlikely to
succeed in this matter and therefore no provision has been made.
$26m (attr.) (2018: $16m (attr.); 2017: $16m (attr)). This includes an assessment of $10m (attr.) received in late
December 2019. Management has objected to these assessments and is of the opinion that the Tax Authority is unlikely to
succeed in this matter and therefore no provision has been made.
Tanzania - Geita Gold Mine
The Tanzania Revenue Authority has raised audit findings on various tax matters for years from 2009 to 2018 amounting to
$164m (2018: $163m; 2017: $113m). Management has objected and appealed through various levels of the legislative
processes and has provided for a portion of the total claims amounting to $2m (2018: $2m; 2017: $2m). Management is of
the opinion that for the remainder of the claims the Tax Authority is unlikely to succeed and therefore no provision has been
made.
$164m (2018: $163m; 2017: $113m). Management has objected and appealed through various levels of the legislative
processes and has provided for a portion of the total claims amounting to $2m (2018: $2m; 2017: $2m). Management is of
the opinion that for the remainder of the claims the Tax Authority is unlikely to succeed and therefore no provision has been
made.
In addition to the above, it should be noted that amendments passed to legislation in 2017 amended the 2010 Mining Act and
new Finance Act. Effective from 1 July 2017, the gold mining royalty rate increased to 6% (from 4%) and further a 1% clearing
fee on the value of all minerals exported was imposed. The group has been paying the higher royalty and clearing fees since
this date, under protest and is of the view that this is in contravention of its Mining Development Agreement.
new Finance Act. Effective from 1 July 2017, the gold mining royalty rate increased to 6% (from 4%) and further a 1% clearing
fee on the value of all minerals exported was imposed. The group has been paying the higher royalty and clearing fees since
this date, under protest and is of the view that this is in contravention of its Mining Development Agreement.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
US dollar millions
2019
2018
2017
PAGE 51
13
EARNINGS (LOSS) PER ORDINARY SHARE
Basic earnings (loss) per ordinary share
(3)
32
(46)
Continuing operations
87
52
35
The calculation of basic earnings (loss) per ordinary share is based on profits
(losses) attributable to equity shareholders of $364m (2018: $216m;
2017: $145m) and 418,349,777 (2018: 417,122,155; 2017: 415,440,077)
shares being the weighted average number of ordinary shares in issue during
the financial year.
(losses) attributable to equity shareholders of $364m (2018: $216m;
2017: $145m) and 418,349,777 (2018: 417,122,155; 2017: 415,440,077)
shares being the weighted average number of ordinary shares in issue during
the financial year.
Discontinued operations
(90)
(20)
(81)
The calculation of basic earnings (loss) per ordinary share is based on profits
(losses) attributable to equity shareholders of ($376m) (2018: ($83m);
2017: ($336m)) and 418,349,777 (2018: 417,122,155; 2017: 415,440,077)
shares being the weighted average number of ordinary shares in issue during
the financial year.
(losses) attributable to equity shareholders of ($376m) (2018: ($83m);
2017: ($336m)) and 418,349,777 (2018: 417,122,155; 2017: 415,440,077)
shares being the weighted average number of ordinary shares in issue during
the financial year.
Diluted earnings (loss) per ordinary share
(3)
32
(46)
Continuing operations
87
52
35
The calculation of diluted earnings (loss) per ordinary share is based on
profits (losses) attributable to equity shareholders of $364m (2018: $216m;
2017: $145m) and 418,349,777 (2018: 417,379,405; 2017: 415,440,077)
profits (losses) attributable to equity shareholders of $364m (2018: $216m;
2017: $145m) and 418,349,777 (2018: 417,379,405; 2017: 415,440,077)
shares being the diluted number of ordinary shares.
Discontinued operations
(90)
(20)
(81)
The calculation of diluted earnings (loss) per ordinary share is based on
profits (losses) attributable to equity shareholders of ($376m) (2018: ($83m);
2017: ($336m)) and 418,349,777 (2018: 417,379,405; 2017: 415,440,077)
shares being the weighted average number of ordinary shares in issue during
the financial year.
profits (losses) attributable to equity shareholders of ($376m) (2018: ($83m);
2017: ($336m)) and 418,349,777 (2018: 417,379,405; 2017: 415,440,077)
shares being the weighted average number of ordinary shares in issue during
the financial year.
In calculating the basic and diluted number of ordinary shares outstanding for the year, the following were taken into
consideration:
Number of shares
2019
2018
2017
Ordinary shares
414,407,622
411,412,947
409,265,471
Fully vested options and currently exercisable
(1)
3,942,155
5,709,208
6,174,606
Weighted average number of shares
418,349,777
417,122,155
415,440,077
Dilutive potential of share options
(2)
—
257,250
—
Fully diluted number of ordinary shares
418,349,777
417,379,405
415,440,077
(1)
Employee compensation awards are included in basic earnings per share from the date that all necessary conditions have been satisfied and it is
virtually certain that shares will be issued as a result of employees exercising their options.
(2)
The number of share options that could potentially dilute basic earnings in the future were not included as the effect was anti-dilutive were 517,186
(2018: nil; 2017:576,426)
Headline earnings (loss)
The profit (loss) attributable to equity shareholders was adjusted by the
following to arrive at headline earnings (loss):
Profit (loss) attributable to equity shareholders from continuing and
discontinued operations
Net impairment (impairment reversal) and derecognition of assets
Net (profit) loss on disposal of assets
Taxation thereon
The profit (loss) attributable to equity shareholders was adjusted by the
following to arrive at headline earnings (loss):
Profit (loss) attributable to equity shareholders from continuing and
discontinued operations
Net impairment (impairment reversal) and derecognition of assets
Net (profit) loss on disposal of assets
Taxation thereon
Basic headline earnings (loss) per share
The calculation of basic headline earnings (loss) per ordinary share is based
on basic headline earnings (losses) of $379m (2018: $220m; 2017: $27m)
and 418,349,777 (2018: 417,122,155; 2017: 415,440,077) shares being the
weighted average number of ordinary shares in issue during the year.
Diluted headline earnings (loss) per share
The calculation of diluted headline earnings (loss) per ordinary share is based
on diluted headline earnings (losses) of $379m (2018: $220m; 2017: $27m)
and 418,349,777 (2018: 417,379,405; 2017: 415,440,077) shares being the
weighted average number of ordinary shares in issue during the year.
The calculation of basic headline earnings (loss) per ordinary share is based
on basic headline earnings (losses) of $379m (2018: $220m; 2017: $27m)
and 418,349,777 (2018: 417,122,155; 2017: 415,440,077) shares being the
weighted average number of ordinary shares in issue during the year.
Diluted headline earnings (loss) per share
The calculation of diluted headline earnings (loss) per ordinary share is based
on diluted headline earnings (losses) of $379m (2018: $220m; 2017: $27m)
and 418,349,777 (2018: 417,379,405; 2017: 415,440,077) shares being the
weighted average number of ordinary shares in issue during the year.
US dollar millions
(12)
133
(191)
559
102
298
(3)
32
(8)
(165)
(47)
(72)
379
220
27
Cents
91
53
6
91
53
6
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
US dollar millions
2019
2018
2017
PAGE 52
14
DIVIDENDS
Ordinary shares
Dividend number 118 of 130 SA cents per share was declared on
21 February 2017 and paid on 7 April 2017 (10 US cents per share).
Dividend number 119 of 70 SA cents per share was declared on
20 February 2018 and paid on 6 April 2018 (6 US cents per share).
Dividend number 120 of 95 SA cents per share was declared on
19 February 2019 and paid on 8 April 2019 (7 US cents per share)
Dividend number 118 of 130 SA cents per share was declared on
21 February 2017 and paid on 7 April 2017 (10 US cents per share).
Dividend number 119 of 70 SA cents per share was declared on
20 February 2018 and paid on 6 April 2018 (6 US cents per share).
Dividend number 120 of 95 SA cents per share was declared on
19 February 2019 and paid on 8 April 2019 (7 US cents per share)
27
39
24
27
24
39
15
TANGIBLE ASSETS
US dollar millions
Mine
Mineral
rights
Exploration
and
Assets
development
Mine infra-
and
evaluation
under
Land and
costs
structure
(2)
dumps
assets
construction
buildings
(3)(4)
Total
Cost
Balance at 1 January 2017
5,943
4,576
919
5
450
82
11,975
Additions
- project capital
28
3
—
—
125
—
156
- stay-in-business capital
371
37
—
—
257
—
665
Disposals
(1)
(20)
—
—
—
—
(21)
Transfers and other movements
(1)
(168)
(21)
(27)
—
(291)
1
(506)
Transfer to assets and liabilities held
for sale
for sale
(785)
(281)
(7)
—
(72)
(3)
(1,148)
Translation
174
88
7
—
21
3
293
Balance at 31 December 2017
5,562
4,382
892
5
490
83
11,414
Accumulated amortisation and
impairments
impairments
Balance at 1 January 2017
4,163
2,792
868
3
26
12
7,864
Amortisation for the year
553
272
3
—
—
1
829
Impairment and derecognition of
assets
assets
(5)
182
62
8
—
1
—
253
Disposals (1)
(20)
—
—
—
—
(21)
Transfers and other movements
(1)
(326)
(163)
(27)
—
—
—
(516)
Transfer to assets and liabilities held
for sale
(685)
(169)
(4)
—
(1)
—
(859)
Translation 93
22
5
—
—
2
122
Balance at 31 December 2017
3,979
2,796
853
3
26
15
7,672
Net book value at
31 December 2017
1,583
1,586
39
2
464
68
3,742
Cost
Balance at 1 January 2018
5,562
4,382
892
5
490
83
11,414
Additions
- project capital
2
—
—
—
175
—
177
- stay-in-business capital
294
20
3
—
149
1
467
Disposals (5)
(30)
—
(1)
—
(3)
(39)
Transfers and other movements
(1)
60
(41)
—
—
(270)
1
(250)
Translation (239)
(119)
(7)
—
(32)
(5)
(402)
Balance at 31 December 2018
5,674
4,212
888
4
512
77
11,367
Accumulated amortisation and
impairments
impairments
Balance at 1 January 2018
3,979
2,796
853
3
26
15
7,672
Amortisation for the year
397
233
2
1
—
1
634
Impairment and derecognition of
assets
assets
(5)
—
104
—
—
—
—
104
Disposals
(5)
(27)
—
(1)
—
(2)
(35)
Transfers and other movements
(1)
(52)
(153)
—
—
—
—
(205)
Translation
(135)
(42)
(6)
—
1
(2)
(184)
Balance at 31 December 2018
4,184
2,911
849
3
27
12
7,986
Net book value at
31 December 2018
1,490
1,301
39
1
485
65
3,381
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
15
TANGIBLE ASSETS CONTINUED
PAGE 53
US dollar millions
Mine
development
costs
Mine infra-
structure
(2)
Mineral
rights
and
dumps
Exploration
and
evaluation
assets
Assets
under
construction
Land and
buildings
(3)(4)
Total
Cost
Balance at 1 January 2019
Balance at 1 January 2019
5,674
4,212
888
4
512
77
11,367
Additions
- project capital
- project capital
43
—
—
1
281
14
339
- stay-in-business capital
208
25
1
2
188
—
424
Finance costs capitalised
—
—
—
—
6
—
6
Disposals
(1)
(16)
—
—
—
—
(17)
Transfers and other movements
(1)
(259)
219
1
—
(489)
(16)
(544)
Transfer to assets and liabilities held
for sale
for sale
(660)
(663)
(9)
—
(90)
(9)
(1,431)
Translation
(4)
(1)
—
—
(3)
—
(8)
Balance at 31 December 2019
5,001
3,776
881
7
405
66
10,136
Accumulated amortisation and
impairments
Balance at 1 January 2019
impairments
Balance at 1 January 2019
4,184
2,911
849
3
27
12
7,986
Amortisation for the year
392
215
1
1
—
—
609
Impairment and derecognition of
assets
assets
(5)
243
172
—
—
90
—
505
Disposals
(1)
(15)
—
—
—
—
(16)
Transfers and other movements
(1)
(455)
(53)
1
—
(3)
(12)
(522)
Transfer to assets and liabilities held
for sale
for sale
(488)
(422)
(5)
—
(88)
—
(1,003)
Translation
(9)
(5)
—
—
(1)
—
(15)
Balance at 31 December 2019
3,866
2,803
846
4
25
—
7,544
Net book value at
31 December 2019
31 December 2019
1,135
973
35
3
380
66
2,592
(1)
Transfers and other movements include amounts from deferred stripping, changes in estimates of decommissioning assets, asset reclassifications
and derecognition of assets.
(2)
Included in the amounts for mine infrastructure are assets held under finance leases with a net book value of nil (2018 :$45m; 2017: $56m).
(3)
Included in the amounts for land and buildings are assets held under finance leases with a net book value of nil (2018: $3m; 2017: $6m).
(4)
Assets of $9m (2018: $10m; 2017: $11m) have been pledged as security.
(5)
Impairment and derecognition of assets is assessed as follows:
Impairment calculation assumptions as at 31 December 2019 - goodwill, tangible and intangible assets
Management assumptions for the value in use of tangible assets and goodwill include:
• the gold price assumption represents management’s best estimate of the future price of gold. A long-term real gold price
of $1,300/oz (2018: $1,239/oz) is based on a range of economic and market conditions that will exist over the remaining
useful life of the assets.
of $1,300/oz (2018: $1,239/oz) is based on a range of economic and market conditions that will exist over the remaining
useful life of the assets.
Annual life of mine plans take into account the following:
• proved and probable Ore Reserve;
• value beyond proved and probable reserves (including exploration potential) determined using the gold price assumption
referred to above;
• In determining the impairment for each cash generating unit, the real pre-tax rate was derived from the weighted average
cost of capital (WACC) using the Capital Asset Pricing Model (CAPM) to determine the required return on equity with risk
factors consistent with the basis used in 2018. At 31 December 2019, the derived group WACC was 8.1% (real post-tax)
which is 20 basis points lower than in 2018 of 8.3%, and is based on the industry average capital structure of the major
gold companies considered to be appropriate peers. In determining the WACC for each cash generating unit, sovereign
and mining risk factors are considered to determine country specific risks. In certain instances, a specific risk premium
was added to large projects being undertaken or the turnaround nature of a specific mine to address uncertainties in the
forecast of the cash flows;
• foreign currency cash flows translated at estimated forward exchange rates and then discounted using appropriate
discount rates for that currency;
• cash flows used in impairment calculations are based on life of mine plans which range from 1 years to 39 years; and
• variable operating cash flows are increased at local Consumer Price Index rates.
• value beyond proved and probable reserves (including exploration potential) determined using the gold price assumption
referred to above;
• In determining the impairment for each cash generating unit, the real pre-tax rate was derived from the weighted average
cost of capital (WACC) using the Capital Asset Pricing Model (CAPM) to determine the required return on equity with risk
factors consistent with the basis used in 2018. At 31 December 2019, the derived group WACC was 8.1% (real post-tax)
which is 20 basis points lower than in 2018 of 8.3%, and is based on the industry average capital structure of the major
gold companies considered to be appropriate peers. In determining the WACC for each cash generating unit, sovereign
and mining risk factors are considered to determine country specific risks. In certain instances, a specific risk premium
was added to large projects being undertaken or the turnaround nature of a specific mine to address uncertainties in the
forecast of the cash flows;
• foreign currency cash flows translated at estimated forward exchange rates and then discounted using appropriate
discount rates for that currency;
• cash flows used in impairment calculations are based on life of mine plans which range from 1 years to 39 years; and
• variable operating cash flows are increased at local Consumer Price Index rates.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
15
TANGIBLE ASSETS CONTINUED
PAGE 54
Carrying
value
Value in use
US dollar millions
Impairment calculation assumptions as at 31 December 2019 - goodwill, tangible and intangible assets
CONTINUED
CONTINUED
Impairments and derecognitions of tangible assets
For the year ended 31 December, the following impairments and derecognitions of tangible assets were recognised:
US dollar millions
2019
(1)
2018
2017
First Uranium - Mine Waste Solutions
89
93
13
TauTona
—
—
79
Kopanang
—
—
35
Surface Operations
18
1
9
Moab Khotsong
—
—
112
Mponeng
384
4
2
Covalent
11
—
—
Obuasi
—
5
—
Siguiri
2
—
—
AGA Mineração
1
—
—
Other
—
1
3
505
104
253
(1)
Includes impairment of the South African asset disposal group, measured at fair value less costs to sell and disclosed in Discontinued operations.
Refer to note 9.
Impairment of cash generating units
The group reviews and tests the carrying value of its mining assets when events or changes in circumstances suggest that
the carrying amount may not be recoverable.
the carrying amount may not be recoverable.
On 12 February 2020, AngloGold Ashanti announced the sale of its remaining South African producing assets and related
liabilities to Harmony Gold Mining Company Limited for cash and deferred payments with expected proceeds of around
$300m, subject to conditions. The South African assets were accordingly transferred to held for sale and written down to fair
value less cost to sell. Refer to note 9.
liabilities to Harmony Gold Mining Company Limited for cash and deferred payments with expected proceeds of around
$300m, subject to conditions. The South African assets were accordingly transferred to held for sale and written down to fair
value less cost to sell. Refer to note 9.
Cash generating units with marginal headroom
Based on an analysis carried out by the group in 2019, the carrying value and value in use of the most sensitive cash
generating unit (CGU) are:
generating unit (CGU) are:
Kibali
(1)(2)
1,506
1,628
(1)
It is estimated that a decrease of the long-term real gold price of $1,300/oz by 4.2%, would cause the receivable amount of Kibali to equal its carrying
amount. The sensitivity analysis has been provided on the basis that the key assumption changes without a change in the other assumptions.
However, for a change in each of the assumptions used, it is impracticable to disclose the consequential effect of changes on the other variables
used to measure the recoverable amount because these assumptions and others used in impairment testing are inextricably linked.
However, for a change in each of the assumptions used, it is impracticable to disclose the consequential effect of changes on the other variables
used to measure the recoverable amount because these assumptions and others used in impairment testing are inextricably linked.
(2)
Equity accounted investment, included in investments in associates and joint ventures in the Statement of Financial Position.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 55
16 RIGHT OF USE ASSETS AND LEASE LIABILITIES
The group leases various assets including buildings, plant and equipment and vehicles. Some of the group’s lease obligations
are secured by the lessors’ title to the leased assets for such leases.
are secured by the lessors’ title to the leased assets for such leases.
RIGHT OF USE ASSETS
US dollar millions
Mine
infrastructure
Land and
buildings
buildings
Total
Cost
Impact of adopting IFRS 16 - 1 January 2019
119
9
128
Additions
- stay-in-business capital
32
—
32
Transfers and other movements
(1)
58
15
73
Transfer to non-current assets and liabilities held for sale
—
(1)
(1)
Translation
—
1
1
Balance at 31 December 2019
209
24
233
Accumulated amortisation and impairments
Balance at 1 January 2019
Balance at 1 January 2019
—
—
—
Amortisation for the year
40
2
42
Transfers and other movements
(1)
21
21
33
Balance at 31 December 2019
61
14
75
Net book value at 31 December 2019
148
10
158
(1)
Relates to contracts previously classified as leases under IAS 17 which the group has reassessed upon initial transition as leases under
IFRS 16 as of 1 January 2019.
LEASE EXPENSES
US dollar millions
2019
Amounts recognised in the income statement
Amortisation expense on right of use assets
Amortisation expense on right of use assets
42
Interest expense on lease liabilities
10
Expenses on short term leases
83
Expenses on variable lease payments not included in the lease liabilities
220
Expenses on leases of low value assets
2
These expenses are allocated to cost of sales and corporate, administration and other costs.
Total cash outflow for leases during the period amounted to $51m, consisting of repayments of liabilities of $42m and finance
costs paid of $9m.
costs paid of $9m.
LEASE LIABILITIES
US dollar millions
2019
Lease liabilities
Non-current
Non-current
126
Current
45
Total
171
US dollar millions
2019
Reconciliation of lease liabilities
A reconciliation of the lease liabilities included in the statement of financial position is set out in the following
table:
A reconciliation of the lease liabilities included in the statement of financial position is set out in the following
table:
Opening balance
Lease liabilities recognised
Repayment of lease liabilities
Finance costs paid on lease liabilities
Interest charged to the income statement
Reclassification of finance leases from borrowings
Change in estimate
Translation
Closing balance
Lease finance costs paid included in the statement of cash flows
Lease liabilities recognised
Repayment of lease liabilities
Finance costs paid on lease liabilities
Interest charged to the income statement
Reclassification of finance leases from borrowings
Change in estimate
Translation
Closing balance
Lease finance costs paid included in the statement of cash flows
—
160
(42)
(9)
10
60
60
(5)
(3)
(3)
171
9
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 56
16
RIGHT OF USE ASSETS AND LEASE LIABILITIES CONTINUED
LEASE LIABILITIES CONTINUED
US dollar millions
2019
Maturity analysis of lease liabilities
Undiscounted cash flows
Less than and including 1 year
Undiscounted cash flows
Less than and including 1 year
52
Between 1 and 5 years
89
Five years and more
57
Total
198
US dollar millions
2019
Reconciliation between IFRS 16 lease liabilities and lease commitments as at 31 December 2018
Lease liabilities at 1 January 2019
Lease liabilities at 1 January 2019
128
Discounting of lease liabilities
16
Non-qualifying leases
(1)
121
Lease commitments at 31 December 2018
265
(1)
Non-qualifying leases include leases that are short term in nature, low value items, or where the contractual repayment structures are variable in
nature only, as well as the service components of qualifying contracts, not capitalised as part of the initial cost of the right of use assets.
The company does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored within
the company’s treasury function.
the company’s treasury function.
All lease contracts contain market review clauses in the event that AngloGold Ashanti exercises its option to renew.
Certain of the group’s contracts have a payment structure that is variable in nature and hence do not qualify for IFRS 16 lease
accounting. These contracts consist of mostly mining and drilling contracts. The variable nature of these contracts is to allow
equal sharing of pain and gain between the group and its contractors. The cash flows are not disclosed as their variability
does not permit reliable forecasts. Short-term, low value and variable contracts continue to be recognised within cost of sales.
accounting. These contracts consist of mostly mining and drilling contracts. The variable nature of these contracts is to allow
equal sharing of pain and gain between the group and its contractors. The cash flows are not disclosed as their variability
does not permit reliable forecasts. Short-term, low value and variable contracts continue to be recognised within cost of sales.
The weighted average incremental borrowing rate at the date of initial application is 4.72%.
17
INTANGIBLE ASSETS
US dollar millions
Goodwill
Other
Total
Cost
Balance at 1 January 2017
Balance at 1 January 2017
379
185
564
Additions
—
1
1
Transfer to assets and liabilities held for sale
—
(17)
(17)
Transfers and other movements
(1)
(263)
(1)
(264)
Translation
11
4
15
Balance at 31 December 2017
127
172
299
Accumulated amortisation and impairments
Balance at 1 January 2017
Balance at 1 January 2017
253
166
419
Amortisation for the year
6
6
Impairment
9
—
9
Transfer to assets and liabilities held for sale
—
(15)
(15)
Transfers and other movements
(1)
(263)
(1)
(264)
Translation
1
5
6
Balance at 31 December 2017
—
161
161
Net book value at 31 December 2017
127
11
138
Cost
Balance at 1 January 2018
127
172
299
Additions
—
1
1
Disposals
—
(3)
(3)
Transfers and other movements
(1)
—
4
4
Translation
(11)
(7)
(18)
Balance at 31 December 2018
116
167
283
Accumulated amortisation and impairments
Balance at 1 January 2018
Balance at 1 January 2018
—
161
161
Amortisation for the year
5
5
Disposals
—
(3)
(3)
Transfers and other movements
(1)
—
4
4
Translation
—
(7)
(7)
Balance at 31 December 2018
—
160
160
Net book value at 31 December 2018
116
7
123
(1)
Transfers and other movements include amounts from asset reclassifications and amounts written off.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 57
Value in use
Carrying value
2019
US dollar millions
17
INTANGIBLE ASSETS CONTINUED
US dollar millions
Goodwill
Other
Total
Cost
Balance at 1 January 2019
Balance at 1 January 2019
116
167
283
Transfer to assets and liabilities held for sale
—
(26)
(26)
Transfers and other movements
(1)
—
3
3
Balance at 31 December 2019
116
144
260
Accumulated amortisation and impairments
Balance at 1 January 2019
Balance at 1 January 2019
—
160
160
Amortisation for the year
3
3
Transfer to assets and liabilities held for sale
—
(26)
(26)
Balance at 31 December 2019
—
137
137
Net book value at 31 December 2019
116
7
123
(1)
Transfers and other movements include amounts from asset reclassifications and amounts written off.
Impairment calculation assumptions for goodwill
Based on an analysis carried out by the group in 2019, the carrying value and value in use of cash generating units (CGUs)
with goodwill that were most sensitive is:
with goodwill that were most sensitive is:
Sunrise Dam
220
363
As at 31 December 2019, the recoverable amount of Sunrise Dam exceeded its carrying amount by $143m. The Sunrise Dam
CGU had $108m goodwill at that date.
CGU had $108m goodwill at that date.
It is estimated that a decrease of the long-term real gold price of $1,300/oz by 5%, would cause the recoverable amount of
this CGU to equal its carrying amount. The sensitivity analysis has been provided on the basis that the key assumption
changes without a change in the other assumptions. However, for a change in each of the assumptions used, it is
impracticable to disclose the consequential effect of changes on the other variables used to measure the recoverable amount
because these assumptions and others used in impairment testing of goodwill are inextricably linked.
this CGU to equal its carrying amount. The sensitivity analysis has been provided on the basis that the key assumption
changes without a change in the other assumptions. However, for a change in each of the assumptions used, it is
impracticable to disclose the consequential effect of changes on the other variables used to measure the recoverable amount
because these assumptions and others used in impairment testing of goodwill are inextricably linked.
Therefore it is possible that outcomes within the next financial year that are different from the assumptions used in the
impairment testing process for goodwill could require a material adjustment to the carrying amounts in future periods.
impairment testing process for goodwill could require a material adjustment to the carrying amounts in future periods.
Net book value of goodwill allocated to each of the CGUs:
US dollar millions
2019
2018
2017
- Sunrise Dam
108
108
119
- Serra Grande
8
8
8
116
116
127
Real pre-tax discount rates applied in impairment calculations on CGUs for
which the carrying amount of goodwill is significant are as follows:
- Sunrise Dam
(1)
10.8%
8.3%
8.3%
Goodwill has been allocated to its respective CGUs where it is tested for impairment as part of the CGU. The group reviews
and tests the carrying value of goodwill on an annual basis for impairment. The discount rates for 2019 were determined on
a basis consistent with the 2018 discount rates.
and tests the carrying value of goodwill on an annual basis for impairment. The discount rates for 2019 were determined on
a basis consistent with the 2018 discount rates.
(1)
The value in use of the CGU is $363m in 2019 (2018: $750m; 2017: $402m).
18
MATERIAL PARTLY-OWNED SUBSIDIARIES
Name Non-controlling
interest %
holding
holding
Country of incorporation and
operation
operation
2019
2018
2017
Cerro Vanguardia S.A. (CVSA)
7.5
7.5
7.5 Argentina
Société AngloGold Ashanti de Guinée S.A. (Siguiri)
15.0
15.0
15.0 Republic of Guinea
Financial information of subsidiaries that have material non-controlling interests are provided below:
US dollar millions
2019
2018
2017
Profit (loss) allocated to material non-controlling interests
CVSA
5
9
7
Siguiri
—
8
13
Accumulated balances of material non-controlling interests
CVSA
13
14
13
Siguiri
23
32
32
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 58
US dollar millions
CVSA
Siguiri
18
MATERIAL PARTLY-OWNED SUBSIDIARIES CONTINUED
Summarised financial information of subsidiaries is as follows. The information is based on amounts including inter-company
balances.
balances.
Statement of profit or loss for 2019
Revenue
Revenue
390
349
Profit (loss) for the year
68
1
Total comprehensive income (loss) for the year, net of tax
68
1
Attributable to non-controlling interests
5
—
Dividends paid to non-controlling interests
(7)
(9)
Statement of profit or loss for 2018
Revenue
Revenue
498
365
Profit (loss) for the year
119
56
Total comprehensive income (loss) for the year, net of tax
119
56
Attributable to non-controlling interests
9
8
Dividends paid to non-controlling interests
(7)
(8)
Statement of profit or loss for 2017
Revenue
Revenue
517
489
Profit (loss) for the year
96
88
Total comprehensive income (loss) for the year, net of tax
96
88
Attributable to non-controlling interests
7
13
Dividends paid to non-controlling interests
(9)
(10)
Statement of financial position as at 31 December 2019
Non-current assets
Non-current assets
177
245
Current assets
202
170
Non-current liabilities
Current liabilities
Current liabilities
(120)
(82)
(141)
(121)
(121)
Total equity
177
153
Statement of financial position as at 31 December 2018
Non-current assets
Non-current assets
176
257
Current assets
215
157
Non-current liabilities
(112)
(64)
Current liabilities
(78)
(137)
Total equity
201
213
Statement of financial position as at 31 December 2017
Non-current assets
Non-current assets
193
206
Current assets
171
189
Non-current liabilities
(103)
(101)
Current liabilities
(84)
(82)
Total equity
177
212
Statement of cash flows for the year ended 31 December 2019
Cash inflow (outflow) from operating activities
Cash inflow (outflow) from investing activities
Cash inflow (outflow) from financing activities
Cash inflow (outflow) from operating activities
Cash inflow (outflow) from investing activities
Cash inflow (outflow) from financing activities
107
46
(30)
(47)
(47)
(22)
(30)
(30)
Net increase (decrease) in cash and cash equivalents
30
(6)
Statement of cash flows for the year ended 31 December 2018
Cash inflow (outflow) from operating activities
Cash inflow (outflow) from operating activities
179
84
Cash inflow (outflow) from investing activities
(36)
(96)
Cash inflow (outflow) from financing activities
(140)
(6)
Net increase (decrease) in cash and cash equivalents
3
(18)
Statement of cash flows for the year ended 31 December 2017
Cash inflow (outflow) from operating activities
Cash inflow (outflow) from operating activities
189
152
Cash inflow (outflow) from investing activities
(55)
(82)
Cash inflow (outflow) from financing activities
(118)
(58)
Net increase (decrease) in cash and cash equivalents
16
12
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 59
2017
2018
2019
Country of incorporation and operation
Description
Effective %
Name
19
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
US dollar millions
2019
2018
2017
Carrying value
Investments in associates
40
36
36
Investments in joint ventures
1,541
1,492
1,471
1,581
1,528
1,507
Detailed disclosures are provided for the years in which investments in associates and joint ventures are considered to be
material.
material.
Summarised financial information of immaterial associates is as follows:
US dollar millions
2019
2018
2017
Aggregate statement of profit or loss for associates (attributable)
Revenue
20
19
21
Operating (expenses) income
(1)
3
(4)
(11)
Taxation
—
(1)
2
Profit (loss) for the year
23
14
12
Total comprehensive profit (loss) for the year, net of tax
23
14
12
(1)
Includes share of associate profit
Investments in material joint ventures comprise:
45.0
45.0
Exploration and mine
development
development
The Democratic Republic of the Congo
(1)
AngloGold Ashanti Limited has a 50% interest in Kibali (Jersey) Limited (Kibali) which holds our effective 45% interest in Kibali Goldmines S.A.
US dollar millions
2019
2018
2017
Carrying value of joint ventures
Kibali
Immaterial joint ventures
Kibali
Immaterial joint ventures
1,506
35
1,439
1,423
53
48
1,541
1,492
1,471
Reversal (impairment) of investments in joint ventures
Sadiola (note 8)
Sadiola (note 8)
6
14
2
The cumulative unrecognised share of losses of the joint ventures:
Morila
Yatela
Morila
Yatela
8
2
2
8
3
3
7
2
2
45.0
Kibali Goldmines S.A.
(1)
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 60
19
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES CONTINUED
Summarised financial information of joint ventures is as follows (not attributable):
Kibali
US dollar millions
2019
2018
2017
Statement of profit or loss
Revenue
1,123
1,098
755
Other operating costs and expenses
(479)
(539)
(530)
Amortisation of tangible and intangible assets
(282)
(330)
(264)
Finance costs and unwinding of obligations
(4)
(4)
(5)
Interest received
4
3
4
Taxation
(62)
(16)
54
Profit for the year
300
212
14
Total comprehensive income for the year, net of tax
300
212
14
Dividends received from joint venture (attributable)
75
89
—
Statement of financial position
Non-current assets
2,522
2,659
2,834
Current assets
183
205
166
Cash and cash equivalents
453
124
3
Total assets
3,158
2,988
3,003
Non-current financial liabilities
45
29
41
Other non-current liabilities
26
24
23
Current financial liabilities
11
11
7
Other current liabilities
66
64
107
Total liabilities
148
128
178
Net assets
3,010
2,860
2,825
Group's share of net assets
1,505
1,430
1,413
Other
1
9
10
Carrying amount of interest in joint venture
1,506
1,439
1,423
US dollar millions
2019
2018
2017
Aggregate statement of profit or loss for immaterial joint ventures
(attributable)
Revenue
111
112
113
Other operating costs and expenses
(94)
(92)
(94)
Amortisation of tangible and intangible assets
(7)
(15)
(16)
Taxation
(7)
(2)
(2)
Profit (loss) for the year
3
3
1
Total comprehensive income (loss) for the year, net of tax
3
3
1
20
OTHER INVESTMENTS
US dollar millions
2019
2018
2017
Listed investments
(1)
Non-current investments
Equity investments at fair value though profit and loss (FVTPL)
Balance at beginning of year
Balance at beginning of year
19
26
Additions
1
2
Disposals
(1)
(2)
Fair value adjustments
1
(3)
Transfer to non-current assets and liabilities held for sale
(21)
—
Translation
1
(4)
Balance at end of year
—
19
Equity investments at fair value though OCI (FVTOCI)
Balance at beginning of year
Balance at beginning of year
63
47
Additions
9
13
Disposals
—
(7)
Fair value adjustments
—
10
Balance at end of year
72
63
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 61
20
OTHER INVESTMENTS CONTINUED
US dollar millions
2019
2018
2017
The group reclassified its listed investments as FVTPL and FVTOCI on
adoption of IFRS 9 on 1 January 2018.
The non-current equity investments consist of ordinary shares and collective
investment schemes and primarily comprise:
International Tower Hill Mines Limited (ITH)
—
—
7
Corvus Gold Corporation
41
43
25
Various listed investments held by Environmental Rehabilitation Trust Fund
—
16
22
Pure Gold Mining
31
18
11
Other
—
5
8
72
82
73
Investments at amortised cost – non-current
Balance at beginning of year
12
4
6
Additions
11
15
—
Disposals
(9)
(6)
(2)
Transfer to non-current assets and liabilities held for sale
(15)
—
—
Translation
1
(1)
—
Balance at end of year
—
12
4
The amortised cost investment consists of government bonds held by the
Environmental Rehabilitation Trust Fund administered by Ashburton
Investments.
Current investments
Listed investments – FVTOCI
(2)
10
6
7
Book value of listed investments
82
100
84
Unlisted investments
Non-current investments
Balance at beginning of year
47
54
73
Additions
45
48
81
Maturities
(44)
(45)
(73)
Transfer to non-current assets and liabilities held for sale
(48)
—
(32)
Fair value adjustments- FVTOCI
2
—
—
Other
—
(2)
—
Translation
2
(8)
5
Balance at end of year
4
47
54
The unlisted investments include:
—
4
Negotiable Certificates of Deposit - Environmental Rehabilitation Trust Fund
administered by Ashburton Investments.
administered by Ashburton Investments.
46
53
Other
1
1
4
47
54
Book value of unlisted investments
4
47
54
Non-current other investments
76
141
131
Total book value of other investments
86
147
138
(1)
The group’s listed equity investments are susceptible to market price risk arising from uncertainties about the future values of the investments. At
the reporting date, the FVTOCI equity investments were listed on the Toronto Stock Exchange.
(2)
During 2019 a fair value adjustment of $4m to the Sandstorm investment was recognised.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 62
21
INVENTORIES
Non-current
Raw materials - ore stockpiles
Raw materials - ore stockpiles
Current
Raw materials
Raw materials
- ore stockpiles
- heap-leach inventory
- heap-leach inventory
Work in progress
- metals in process
Finished goods
- gold doré/bullion
- by-products
- by-products
Total metal inventories
Mine operating supplies
Mine operating supplies
Total inventories
(1)
(1)
The amount of the write-down of ore stockpiles, metals in process, by-products and mine operating supplies to net realisable value, and recognised
as an expense in other expenses and cost of sales is $4m (2018: $19m; 2017: $17m).
22
TRADE, OTHER RECEIVABLES AND OTHER ASSETS
Non-current
Prepayments
Recoverable tax, rebates, levies and duties
Prepayments
Recoverable tax, rebates, levies and duties
15
107
18
84
84
17
50
50
122
102
67
Current
Trade and loan receivables
47
33
27
Prepayments
61
42
62
Recoverable tax, rebates, levies and duties
130
116
127
Other receivables
12
18
6
250
209
222
Total trade, other receivables and other assets
372
311
289
There is a concentration of risk in respect of amounts due from Revenue
Authorities for recoverable tax, rebates, levies and duties from subsidiaries in
the Continental Africa segment. These values are summarised as follows:
Recoverable value added tax
167
126
106
Recoverable fuel duties
43
41
38
Appeal deposits
10
10
10
Geita Gold Mine
Geita Gold Mine (GGM) in Tanzania net indirect tax receivables balance increased by $35m to $119m (2018: $84m;
2017: $67m).
2017: $67m).
No refunds were received in cash in the current year, however claims relating to periods pre July 2017 totalling $9m have
been offset against provisional corporate tax payments in 2019 in accordance with legislation. These amounts were set off
against VAT claims that have been certified by an external advisor and verified by the Tanzania Revenue Authority (“TRA”).
The TRA acknowledged the majority of the offsets during December 2019. The remaining disputed balance was objected to
as GGM believe that the claims have been correctly set off pursuant to Tanzanian law.
been offset against provisional corporate tax payments in 2019 in accordance with legislation. These amounts were set off
against VAT claims that have been certified by an external advisor and verified by the Tanzania Revenue Authority (“TRA”).
The TRA acknowledged the majority of the offsets during December 2019. The remaining disputed balance was objected to
as GGM believe that the claims have been correctly set off pursuant to Tanzanian law.
An amendment, effective 20 July 2017, to Tanzania's mining legislation included an amendment to the Value Added Tax Act,
2014 (No. 5) (2015 VAT Act) to the effect that no input tax credit can be claimed for the exportation of “raw minerals”. The
Written Laws (Miscellaneous Amendments) (No. 2) Act, 2019, issued during 2019, provides a definition for "raw minerals".
However, GGM has received notices from the TRA it is are not eligible for VAT relief from July 2017 onwards on the basis
that all production constitutes “raw minerals” for this purpose.
2014 (No. 5) (2015 VAT Act) to the effect that no input tax credit can be claimed for the exportation of “raw minerals”. The
Written Laws (Miscellaneous Amendments) (No. 2) Act, 2019, issued during 2019, provides a definition for "raw minerals".
However, GGM has received notices from the TRA it is are not eligible for VAT relief from July 2017 onwards on the basis
that all production constitutes “raw minerals” for this purpose.
The basis for dispute of the disqualifications is on the interpretation of the legislation. Management's view is that the definition
of "raw minerals" provided in the Written Laws (Miscellaneous Amendments) (No. 2) Act. 2019 excludes gold doré. Gold
bearing ore is mined from the open pit and underground mining operations, where it is further crushed and milled to maximise
the gold recovery process, producing gold doré exceeding 80% purity as well as beneficiated products (concentrate). On this
basis the mined doré and concentrate do not constitute “raw minerals” and accordingly the VAT claims are valid. We have
obtained legal opinion that supports our view that doré does not constitute a “raw mineral”.
of "raw minerals" provided in the Written Laws (Miscellaneous Amendments) (No. 2) Act. 2019 excludes gold doré. Gold
bearing ore is mined from the open pit and underground mining operations, where it is further crushed and milled to maximise
the gold recovery process, producing gold doré exceeding 80% purity as well as beneficiated products (concentrate). On this
basis the mined doré and concentrate do not constitute “raw minerals” and accordingly the VAT claims are valid. We have
obtained legal opinion that supports our view that doré does not constitute a “raw mineral”.
2017
2018
2019
US dollar millions
93
106
100
229
251
261
4
3
5
51
44
58
42
57
59
1
—
5
327
355
388
305
297
295
632
652
683
725
758
783
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 63
22
TRADE, OTHER RECEIVABLES AND OTHER ASSETS CONTINUED
The total VAT claims submitted since July 2017 amount to $134m (of the total, $56m of claims were submitted in 2019). All
disqualifications received from the TRA have been objected to in accordance with the provisions and time frames set out in
the Tax Administration Act, 2015 (No. 10).
disqualifications received from the TRA have been objected to in accordance with the provisions and time frames set out in
the Tax Administration Act, 2015 (No. 10).
CVSA
On September 4, 2018, a decree was published by the Argentinian Government, which reintroduced export duties for products
exported from Argentina and which will be in force until 31 December 2020. The export duty rate is 12% on the freight on
board (FOB) value of goods exported, including gold, paid in country. The duty is limited so as not to exceed ARS $4 per USD
exported. On 14 December 2019, the Government of Argentina announced that the cap of ARS $4 for each dollar exported,
would be replaced by a flat rate of 12% for 2020. In terms of the Stability Agreement between CVSA and the Government of
Argentina, CVSA has a right of refund or offset of these amounts paid as established by its Stability Agreement, which provides
for a 30% taxation cap on annual taxes and duties paid by CVSA. As a result of the taxation cap, export duty receivables
amount to $25m (2018: $14m).
exported from Argentina and which will be in force until 31 December 2020. The export duty rate is 12% on the freight on
board (FOB) value of goods exported, including gold, paid in country. The duty is limited so as not to exceed ARS $4 per USD
exported. On 14 December 2019, the Government of Argentina announced that the cap of ARS $4 for each dollar exported,
would be replaced by a flat rate of 12% for 2020. In terms of the Stability Agreement between CVSA and the Government of
Argentina, CVSA has a right of refund or offset of these amounts paid as established by its Stability Agreement, which provides
for a 30% taxation cap on annual taxes and duties paid by CVSA. As a result of the taxation cap, export duty receivables
amount to $25m (2018: $14m).
23
CASH RESTRICTED FOR USE
US dollar millions
2019
2018
2017
Non-current
31
35
37
Current
Cash restricted by prudential solvency requirements and other
27
24
18
Cash balances held by the Tropicana - joint operation
6
7
10
33
31
28
Total cash restricted for use (note 35 and 36)
64
66
65
24
CASH AND CASH EQUIVALENTS
Cash and deposits on call
Money market instruments
Total cash and cash equivalents (notes 35 and 36)
Money market instruments
Total cash and cash equivalents (notes 35 and 36)
25
SHARE CAPITAL AND PREMIUM
Share capital
Authorised
600,000,000 ordinary shares of 25 SA cents each
23
23
23
2,000,000 A redeemable preference shares of 50 SA cents each
—
—
—
5,000,000 B redeemable preference shares of 1 SA cent each
—
—
—
30,000,000 C redeemable preference shares of no par value
—
—
—
23
23
23
Issued and fully paid
415,301,215 (2018: 412,769,980; 2017: 410,054,615) ordinary shares of
25 SA cents each
17
16
16
2,000,000 A redeemable preference shares of 50 SA cents each
—
—
—
778,896 B redeemable preference shares of 1 SA cent each
—
—
—
17
16
16
Treasury shares held within the group:
2,778,896 A and B redeemable preference shares
—
—
—
17
16
16
Share premium
Balance at beginning of year
7,208
7,171
7,145
Ordinary shares issued – share premium
27
37
26
7,235
7,208
7,171
Less: held within the group
Redeemable preference shares
(53)
(53)
(53)
Balance at end of year
7,182
7,155
7,118
Share capital and premium
7,199
7,171
7,134
The rights and restrictions applicable to the A, B and C redeemable preference shares were unchanged during 2019. The
cancellation of all redeemable preference shares is in process.
cancellation of all redeemable preference shares is in process.
417
39
312
170
17
35
456
329
205
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
US dollar millions
2019
2018
2017
PAGE 64
26
BORROWINGS
Unsecured
Debt carried at amortised cost
Rated bonds - issued July 2012
Semi-annual coupons are paid at 5.125% per annum. The bonds were issued
on 30 July 2012, are repayable on 1 August 2022 and are US dollar-based.
Rated bonds - issued July 2012
Semi-annual coupons are paid at 5.125% per annum. The bonds were issued
on 30 July 2012, are repayable on 1 August 2022 and are US dollar-based.
762
761
759
Rated bonds - issued April 2010
Semi-annual coupons are paid at 5.375% per annum on $700m 10-year
bonds and at 6.5% per annum on $300m 30-year bonds. The $700m bonds
are repayable in April 2020 and the $300m bonds are repayable in April 2040.
The bonds are US dollar-based.
Semi-annual coupons are paid at 5.375% per annum on $700m 10-year
bonds and at 6.5% per annum on $300m 30-year bonds. The $700m bonds
are repayable in April 2020 and the $300m bonds are repayable in April 2040.
The bonds are US dollar-based.
1,003
1,002
1,001
Syndicated revolving credit facility ($1bn)
32
The facility was issued on 17 July 2014 and cancelled during October 2018.
Replaced with a $1.4bn multi-currency facility.
Replaced with a $1.4bn multi-currency facility.
Syndicated revolving credit facility (A$500m)
The loan was cancelled in October 2018 and replaced by a $1.4bn multi-
currency facility which is capped at A$500m.
The loan was cancelled in October 2018 and replaced by a $1.4bn multi-
currency facility which is capped at A$500m.
163
Multi-currency syndicated revolving credit facility ($1.4bn multi-currency
RCF)
RCF)
15
—
The Facility consists of a US dollar-based facility with interest charged at a
margin of 1.45% above LIBOR and an Australian dollar based facility capped
at $500m with a margin of 1.45%above BBSY. The applicable margin is
subject to a ratings grid. The facility was issued on 23 October 2018 and is
available until 23 October 2023.
margin of 1.45% above LIBOR and an Australian dollar based facility capped
at $500m with a margin of 1.45%above BBSY. The applicable margin is
subject to a ratings grid. The facility was issued on 23 October 2018 and is
available until 23 October 2023.
Syndicated revolving credit facility (R2.5bn)
Quarterly interest paid at JIBAR plus 1.8% per annum. The facility was issued
on 12 December 2017 and is available until 12 December 2022. The loan is
SA rand-based.
Quarterly interest paid at JIBAR plus 1.8% per annum. The facility was issued
on 12 December 2017 and is available until 12 December 2022. The loan is
SA rand-based.
—
—
56
Syndicated loan facility (R1.4bn)
Quarterly interest paid at JIBAR plus 1.65% per annum. The facility was
issued on 7 July 2015 and is available until 7 July 2020. The loan is SA rand-
based. The facility was cancelled on 19 February 2020.
Quarterly interest paid at JIBAR plus 1.65% per annum. The facility was
issued on 7 July 2015 and is available until 7 July 2020. The loan is SA rand-
based. The facility was cancelled on 19 February 2020.
—
28
81
Syndicated loan facility (R1bn)
Quarterly interest paid at JIBAR plus 1.3% per annum. The facility was issued
on 3 November 2017 and is available until 3 November 2022. The loan is
SA rand-based.
Quarterly interest paid at JIBAR plus 1.3% per annum. The facility was issued
on 3 November 2017 and is available until 3 November 2022. The loan is
SA rand-based.
72
35
81
Siguiri revolving credit facilities ($65m)
67
—
—
Interest paid at 8% above LIBOR. The facility was issued on 23 August 2016,
is available until 27 February 2022 and is US dollar-based.
is available until 27 February 2022 and is US dollar-based.
Geita revolving credit facility ($150m)
Multi-currency RCF consisting of Tanzanian shilling component which is
capped at the equivalent of US$45m. This component bears interest at
12.5%. The remaining USD component of the facility bears interest at LIBOR
plus 6.7%. The facility matures on 6 April 2021.
Multi-currency RCF consisting of Tanzanian shilling component which is
capped at the equivalent of US$45m. This component bears interest at
12.5%. The remaining USD component of the facility bears interest at LIBOR
plus 6.7%. The facility matures on 6 April 2021.
114
60
—
Revolving credit facilities ($100m)
During 2019 the loans were refinanced and included in the Geita and Siguiri
revolving credit facilities.
During 2019 the loans were refinanced and included in the Geita and Siguiri
revolving credit facilities.
103
16
Other
Interest charged at various rates from 2.5% plus delta exchange rate on
individual instalments per annum to 4.5% per annum. Repayments terminate
in June 2023. All loans are Brazilian real-based.
Interest charged at various rates from 2.5% plus delta exchange rate on
individual instalments per annum to 4.5% per annum. Repayments terminate
in June 2023. All loans are Brazilian real-based.
—
—
1
The loans are subject to debt covenant arrangements for which no default
event occurred.
event occurred.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
US dollar millions
26
BORROWINGS CONTINUED
2019
2017
2018
PAGE 65
Secured
Finance leases
(1)
Turbine Square Two (Pty) Limited
9
15
The lease is capitalised at an implied interest rate of 9.8% per annum. Lease
payments are due in monthly instalments terminating in March 2022 and are
SA rand-based. The buildings financed are used as security for these loans.
Australian Gas Pipeline
48
58
The contract with the supplier of gas contains embedded leases which have
been determined to bear interest at an average of 6.75% per annum. The
embedded leases commenced in November and December 2015 and are for
a 10 and 12 year duration, respectively. The leases are repayable in monthly
instalments and are Australian dollar-based. The equipment related to the
embedded leases is used as security for these loans.
Other
4
5
Various loans with interest rates ranging from 2.5% to 14.7% per annum.
These loans are repayable from 2016 to 2041. Some of these loans are
secured by the financed assets.
Total borrowings (note 35)
2,033
2,050
2,268
Current portion of borrowings (note 36)
(734)
(139)
(38)
Total non-current borrowings (note 36)
1,299
1,911
2,230
Amounts falling due
Within one year
734
139
38
Between one and two years
110
734
219
Between two and five years
898
860
1,687
After five years
291
317
324
(note 35)
2,033
2,050
2,268
(1)
The finance leases have been included in the lease liabilities from 1 January 2019 (refer to note16).
Currency
The currencies in which the borrowings are denominated are as follows:
US dollar
1,893
1,896
1,807
Australian dollar
21
48
221
SA rand
72
75
237
Tanzanian shillings
47
29
—
Brazilian real
—
2
3
(note 35)
2,033
2,050
2,268
Undrawn facilities
Undrawn borrowing facilities as at 31 December are as follows:
Syndicated revolving credit facility ($1bn) - US dollar
965
Syndicated revolving credit facility (A$500m) - Australian dollar
226
Syndicated revolving credit facility (R2.5bn) - SA rand
179
174
146
Syndicated revolving credit facility (R1.4bn) - SA rand
100
70
32
FirstRand Bank Limited (R750m) - SA rand
54
52
61
Revolving credit facilities ($100m) - US dollar
85
Revolving credit facility (R1bn) - SA rand
—
35
—
Multi-currency syndicated revolving credit facility ($1.4bn) - US Dollar
1,379
1,400
Revolving credit facility - $150m
40
57
1,752
1,788
1,515
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
US dollar millions
26
BORROWINGS CONTINUED
2019
2017
2018
PAGE 66
Change in liabilities arising from financing activities:
Reconciliation of total borrowings
A reconciliation of the total borrowings included in the statement of financial
position is set out in the following table:
Opening balance
2,050
2,268
2,178
Proceeds from borrowings
168
753
815
Repayment of borrowings
(123)
(967)
(767)
Finance costs paid on borrowings
(122)
(117)
(125)
Deferred loan fees
(7)
—
—
Interest charged to the income statement
127
127
130
Reclassification of finance leases to lease liabilities
(60)
—
—
Translation
—
(14)
37
Closing balance
2,033
2,050
2,268
Reconciliation of finance costs paid:
A reconciliation of the finance cost paid included in the statement of cash
flows is set out in the following table:
Finance costs paid on borrowings
122
117
125
Capitalised finance cost
(6)
—
—
Commitment fees, utilisation fees and other borrowing costs
12
13
13
Total finance costs paid
128
130
138
27 ENVIRONMENTAL REHABILITATION AND OTHER PROVISIONS
Environmental rehabilitation obligations
Provision for decommissioning
Balance at beginning of year
237
286
279
Charge to income statement
—
1
2
Change in estimates
(1)
29
(47)
4
Unwinding of decommissioning obligation
10
12
12
Transfer to assets and liabilities held for sale
(81)
—
(20)
Utilised during the year
(1)
(1)
(2)
Translation
2
(14)
11
Balance at end of year
196
237
286
Provision for restoration
Balance at beginning of year
385
409
426
Charge to income statement
(1)
2
8
Change in estimates
(1)
50
(28)
(17)
Unwinding of restoration obligation
9
12
10
Transfer to assets and liabilities held for sale
(15)
—
(3)
Transfer to current portion
—
—
(17)
Utilised during the year
(5)
(3)
(4)
Translation
—
(7)
6
Balance at end of year
423
385
409
Other provisions
(2)
Balance at beginning of year
205
247
172
Charge to income statement
39
24
17
Change in estimates
27
18
15
Additions
—
—
64
Transfer to assets and liabilities held for sale
(115)
—
—
Transfer to trade and other payables
(73)
(26)
(6)
Unwinding of other provisions
6
7
1
Utilised during the year
(16)
(35)
(35)
Translation
5
(30)
19
Balance at end of year
78
205
247
Total environmental rehabilitation and other provisions
697
827
942
(1)
The change in estimates is attributable to changes in discount rates due to changes in global economic assumptions and changes in mine plans
resulting in a change in cash flows and changes in design of tailings storage facilities and in methodology following requests from the environmental
regulatory authorities. These provisions are expected to unwind beyond the end of the life of mine.
regulatory authorities. These provisions are expected to unwind beyond the end of the life of mine.
(2)
Other provisions include the long-term provision for the silicosis class action litigation of $54m (2018: $47m; 2017: $63m), the short-term portion of
$11m (2018; $16m; 2017: nil) has been included in trade and other payables.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
US dollar millions
2019
2017
2018
PAGE 67
28
PROVISION FOR PENSION AND POST-RETIREMENT BENEFITS
Defined benefit plans
The retirement schemes consist of the following:
Post-retirement medical scheme for AngloGold Ashanti's South African
employees
Other defined benefit plans
The retirement schemes consist of the following:
Post-retirement medical scheme for AngloGold Ashanti's South African
employees
Other defined benefit plans
Post-retirement medical scheme for AngloGold Ashanti's South African
employees
The provision for post-retirement medical funding represents the provision for
health care benefits for employees and retired employees and their registered
dependents.
employees
The provision for post-retirement medical funding represents the provision for
health care benefits for employees and retired employees and their registered
dependents.
The post-retirement benefit costs are assessed in accordance with the advice
of independent professionally qualified actuaries. The actuarial method used
is the projected unit credit funding method. This scheme is unfunded. The last
valuation was performed as at 31 December 2019.
of independent professionally qualified actuaries. The actuarial method used
is the projected unit credit funding method. This scheme is unfunded. The last
valuation was performed as at 31 December 2019.
Information with respect to the defined benefit liability is as follows:
Benefit obligation
Balance at beginning of year
Interest cost
Benefits paid
Actuarial (gain) loss
Translation
Balance at end of year
Less: transfer to non-current assets and liabilities held for sale
Net amount recognised
Benefit obligation
Balance at beginning of year
Interest cost
Benefits paid
Actuarial (gain) loss
Translation
Balance at end of year
Less: transfer to non-current assets and liabilities held for sale
Net amount recognised
Components of net periodic benefit cost
Interest cost
Net periodic benefit cost
Interest cost
Net periodic benefit cost
Assumptions
Assumptions used to determine benefit obligations at the end of the year are
as follows:
Discount rate
Expected increase in health care costs
Assumptions used to determine benefit obligations at the end of the year are
as follows:
Discount rate
Expected increase in health care costs
Assumed health care cost trend rates at 31 December:
Health care cost trend assumed for next year
Rate to which the cost trend is assumed to decline (the ultimate trend rate)
Health care cost trend assumed for next year
Rate to which the cost trend is assumed to decline (the ultimate trend rate)
Assumed health care cost trend rates have a significant effect on the amounts
reported for health care plans. A 1% point change in assumed health care
cost trend rates would have the following effect:
Effect on total service and interest cost - 1% point increase
Effect on post-retirement benefit obligation - 1% point increase
reported for health care plans. A 1% point change in assumed health care
cost trend rates would have the following effect:
Effect on total service and interest cost - 1% point increase
Effect on post-retirement benefit obligation - 1% point increase
Effect on total service and interest cost - 1% point decrease
Effect on post-retirement benefit obligation 1% point decrease
Effect on post-retirement benefit obligation 1% point decrease
93
7
93
7
114
8
100
100
122
93
115
109
8
9
10
(8)
(10)
(9)
(2)
(5)
(8)
2
(16)
13
93
93
115
—
—
(1)
93
93
114
8
9
10
8
9
10
9.15%
9.57%
9.29%
7.25%
7.35%
7.75%
7.25%
7.35%
7.75%
7.25%
7.35%
7.75%
1
1
1
7
7
10
(1)
(1)
(1)
(6)
(7)
(8)
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
US dollar millions
2019
2017
2018
PAGE 68
9
9
9
9
9
9
9
10
47
47
28
PROVISION FOR PENSION AND POST-RETIREMENT BENEFITS CONTINUED
Post-retirement medical scheme for AngloGold Ashanti's South African
employees CONTINUED
employees CONTINUED
Cash flows
Contributions
AngloGold Ashanti Limited expects to contribute $9m to the post-retirement
medical plan in 2020.
Contributions
AngloGold Ashanti Limited expects to contribute $9m to the post-retirement
medical plan in 2020.
Estimated future benefit payments
The following medical benefit payments, which reflect the expected future
service, as appropriate, are expected to be paid:
2020
2021
2022
2023
2024
Thereafter
The following medical benefit payments, which reflect the expected future
service, as appropriate, are expected to be paid:
2020
2021
2022
2023
2024
Thereafter
29
DEFERRED TAXATION
Deferred taxation relating to temporary differences is made up as follows:
Liabilities
Tangible assets (owned)
370
521
604
Right-of-use assets
48
Inventories
24
37
33
Other
9
5
15
451
563
652
Assets
Provisions
209
218
229
Lease liabilities
52
Tax losses
45
24
60
Other
9
6
4
315
248
293
Net deferred taxation liability
136
315
359
Included in the statement of financial position as follows:
Deferred tax assets
105
—
4
Deferred tax liabilities
241
315
363
Net deferred taxation liability
136
315
359
The movement on the deferred tax balance is as follows:
Balance at beginning of year
315
359
492
Taxation of items included in income statement from continuing and
discontinued operations
(189)
(30)
(68)
Taxation on items included in other comprehensive income
(2)
5
(6)
Transfer to non-current assets and liabilities held for sale
15
—
(73)
Translation
(3)
(19)
14
Balance at end of year
136
315
359
Provision has been made for South African income tax or foreign taxes that may result from future remittances of undistributed
earnings of foreign subsidiaries or foreign corporate joint ventures, where the group is able to assert that the undistributed
earnings are not permanently reinvested. In all other cases, the foreign subsidiaries reinvest the undistributed earnings into
future capital expansion projects, maintenance capital and ongoing working capital funding requirements. Unrecognised
taxable temporary differences pertaining to undistributed earnings totalled $444m (2018: $413m; 2017: $384m).
earnings of foreign subsidiaries or foreign corporate joint ventures, where the group is able to assert that the undistributed
earnings are not permanently reinvested. In all other cases, the foreign subsidiaries reinvest the undistributed earnings into
future capital expansion projects, maintenance capital and ongoing working capital funding requirements. Unrecognised
taxable temporary differences pertaining to undistributed earnings totalled $444m (2018: $413m; 2017: $384m).
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
US dollar millions
2019
2017
2018
PAGE 69
30
TRADE, OTHER PAYABLES AND PROVISIONS
Non-current
Other payables
Other payables
Current
Trade payables
Accruals
Trade payables
Accruals
(1)
Short-term provisions
Derivatives
Other payables
Derivatives
Other payables
Total trade, other payables and provisions
Current trade and other payables are non-interest bearing and are normally
settled within 60 days.
Current trade and other payables are non-interest bearing and are normally
settled within 60 days.
(1)
Includes accrual for silicosis of $11m in 2019 (2018: $16m; 2017: nil).
31
TAXATION
Balance at beginning of year
Refunds during the year
Payments during the year
Taxation of items included in the income statement
Offset of VAT and other taxes
Transfer from tax receivable relating to North America
Translation
Balance at end of year
Refunds during the year
Payments during the year
Taxation of items included in the income statement
Offset of VAT and other taxes
Transfer from tax receivable relating to North America
Translation
Balance at end of year
Included in the statement of financial position as follows:
Taxation asset included in trade, other receivables and other assets
Taxation liability
Taxation asset included in trade, other receivables and other assets
Taxation liability
32
CASH GENERATED FROM OPERATIONS
Profit (loss) before taxation
619
445
328
Adjusted for:
Movement on non-hedge derivatives and other commodity contracts
(6)
6
1
Amortisation of tangible assets and right of use assets (note 4)
580
553
685
Finance costs and unwinding of obligations (note 7)
172
168
157
Environmental, rehabilitation and other expenditure
(6)
(23)
(26)
Impairment, derecognition of assets and profit (loss) on disposal
3
5
(1)
Other expenses (income)
41
28
89
Amortisation of intangible assets (note 4)
3
5
5
Interest income
(14)
(8)
(8)
Share of associates and joint ventures' (profit) loss (note 8)
(168)
(122)
(22)
Other non-cash movements
43
(4)
(4)
Movements in working capital
(165)
(122)
(137)
1,102
931
1,067
Movements in working capital:
(Increase) decrease in inventories
(67)
(2)
(67)
(Increase) decrease in trade, other receivables and other assets
(138)
(74)
(86)
Increase (decrease) in trade, other payables and deferred income
40
(46)
16
(165)
(122)
(137)
15
3
3
363
350
358
167
186
228
53
20
22
—
9
—
3
29
30
586
594
638
601
597
641
54
50
97
7
5
14
(228)
(171)
(174)
298
242
190
(50)
(63)
(78)
(10)
—
—
(9)
(9)
1
62
54
50
(10)
(6)
(3)
72
60
53
62
54
50
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
US dollar millions
2019
2017
2018
PAGE 70
Change in
control
Notice
Period
Executive Committee member
33
RELATED PARTIES
Material related party transactions were as follows (not attributable):
Sales and services rendered to related parties
Associates
Associates
19
—
—
Joint ventures
7
10
12
Purchases and services acquired from related parties
Associates
12
19
16
Joint ventures
1
—
3
Outstanding balances arising from sale of goods and services due by
related parties
related parties
Associates
19
19
7
Joint ventures
1
—
2
Amounts owed to/due by related parties above are unsecured and non-
interest bearing.
interest bearing.
Loans advanced to joint ventures and associates
Loans advanced to associates and joint ventures are included in the carrying
value of investments in associates and joint ventures (note 19).
value of investments in associates and joint ventures (note 19).
Executive contracts
All members of the Executive Management team have permanent employment contracts which entitle them to standard group
benefits as defined by their specific region and participation in the company’s Deferred Share Plan (DSP).
benefits as defined by their specific region and participation in the company’s Deferred Share Plan (DSP).
South African-based executives are paid a portion of their remuneration offshore, which is detailed under a separate contract.
This reflects global roles and responsibilities and takes account of offshore business requirements.
This reflects global roles and responsibilities and takes account of offshore business requirements.
The executive contracts are reviewed annually and currently continue to include a change in control provision. The change in
control is subject to the following triggers:
control is subject to the following triggers:
• The acquisition of all or part of AngloGold Ashanti; or
• A number of shareholders holding less than thirty-five percent of the company’s issued share capital consorting to gain a
majority of the board and make management decisions; and
• The contracts of Executive Committee members are either terminated or their role and employment conditions are
curtailed.
• A number of shareholders holding less than thirty-five percent of the company’s issued share capital consorting to gain a
majority of the board and make management decisions; and
• The contracts of Executive Committee members are either terminated or their role and employment conditions are
curtailed.
In the event of a change in control becoming effective, the executive management team will in certain circumstances be
subject to both the notice period and the change in control contract terms. The notice period applied per category of executive
and the change in control periods as at 31 December 2019 were as follows:
subject to both the notice period and the change in control contract terms. The notice period applied per category of executive
and the change in control periods as at 31 December 2019 were as follows:
CEO
12 months
12 months
CFO
6 months
6 months
Other Executive Management team members
6 months
6 months
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
33
RELATED PARTIES CONTINUED
PAGE 71
Directors and other key management personnel
Executive directors’ and prescribed officers’ remuneration
The tables below illustrate the single total figure of remuneration and the total cash equivalent received reconciliation of Executive Directors and Prescribed Officers as prescribed by King IV.
It comprises an overview of all the pay elements available to the executive management team for the year ended 31 December 2019.
It comprises an overview of all the pay elements available to the executive management team for the year ended 31 December 2019.
The following are definitions of terminology used in the adoption of the reporting requirements under King IV.
Reflected
In respect of the DSP and LTIP plans, remuneration is reflected when performance conditions have been met during the reporting period.
Settled
This refers to remuneration that has been included in prior reporting periods and has now become payable (but may not yet have been paid) to the executive in the current period.
Single total figure
remuneration
remuneration
Base Salary
Pension
scheme
benefits
scheme
benefits
ZAR '000
Once-off
relocation
costs
ZAR '000
Cash in
lieu of
dividends
ZAR '000
Other
benefits
(2)
ZAR '000
Awards earned during the period
Single total figure of remuneration
reflected but not yet settled
ZAR
denominated
portion
ZAR '000
USD/AUD
denominated
portion
(1)
ZAR '000
DSP
2019
awards
(3)
ZAR '000
CSLTIP
2017
awards
(4)
ZAR '000
Sign-on
awards
granted
(5)
ZAR '000
2019
ZAR '000
USD '000
(8)
2018
USD '000
(8)
2017
USD '000
(8)
Executive directors
KPM Dushnisky
—
18,608
4,648
2,726
142
2,578
61,842
— — 90,544
6,268
7,570 —
KC Ramon
5,585
3,981
779
—
194
893
29,135
33,064 — 73,631
5,097
3,547 2,190
Total executive
directors 5,585
22,589
5,427
2,726
336
3,471
90,977 33,064
— 164,175
11,365 11,117 2,190
Prescribed officers
SD Bailey
3,879
2,560
—
—
37
1,160
18,087
5,917 — 31,640
2,190
— —
CE Carter
(6)
—
2,791
5,524 — —
2,277
—
— — 10,592
733
3,719 2,322
PD Chenard
(7)
2,933
3,900
—
1,270 —
1,729
18,362
— 19,356
47,550
3,292
— —
GJ Ehm
—
9,074
251
—
163
611
25,329
33,064 — 68,492
4,742
3,286 2,096
L Eybers
1,377
7,945
251
1,135
64
2,310
25,054
29,160 — 67,296
4,659
2,511 1,680
DC Noko
(6)
869
396
117
—
17
1,110
—
— — 2,509
174
2,846 1,642
S Ntuli
4,607
2,871
631
—
36
343
21,041
7,526 — 37,055
2,565
— —
ME Sanz Perez
4,481
3,184
958
—
169
68
20,567
26,447 — 55,874
3,868
2,833 1,637
CB Sheppard
(6)
1,159
528
160
—
169
830
—
— — 2,846
197
2,961 1,413
TR Sibisi
4,944
2,337
910
—
158
61
19,638
22,713 — 50,761
3,514
2,699 1,126
Total prescribed officers
24,249
35,586
8,802
2,405
813
10,499
148,078
124,827
19,356
374,615
25,934 20,855 11,916
Notes:
(1)
Salary denominated in USD/AUD for global roles and responsibilities converted to ZAR on payment date.
(2)
Other benefits include health care, group personal accident, disability, funeral cover, accommodation allowance, airfare and surplus leave encashed. Surplus leave days accrued are automatically encashed unless work requirements allow for carry
over.
(3)
The fair value of the DSP comprises of a cash bonus and share awards for the year ended 31 December 2019 with the cash bonus payable in February 2020 and the share awards allocated in February 2020, vesting over a 5-year period in equal
tranches.
(4)
The fair value of the CSLTIP granted in 2017 with a 3-year performance period ended 31 December 2019. The awards vested on 1 March 2020.
(5)
PD Chenard was awarded a sign-on award of ZAR19.36m at start date,1 April 2019, of which ZAR6.33m will be settled in cash with 50% payable upfront, the balance on 1 April 2020 and ZAR13.03m will be settled in shares to vest over a 2 year
period in equal tranches in accordance with the JSE Listing requirements.
(6)
All salary payments (including salary, performance related payments, pension and other benefits) for CE Carter (retired 28 March 2019), DC Noko (retired 28 February 2019) and CB Sheppard (retired 15 March 2019) are pro-rated in accordance with
their retirement dates.
(7)
All salary payments (including salary, performance related payments, pension and other benefits) for PD Chenard are pro-rated in accordance with his start date, 1 April 2019.
(8)
Convenience conversion to USD at the year-to-date average exchange rate of $1:R14.445 (2018: $1:R13.247; 2017: $1:R13.301).
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
33
RELATED PARTIES CONTINUED
PAGE 72
Directors and other key management personnel
CONTINUED
Total cash
equivalent received
reconciliation
equivalent received
reconciliation
Single total
figure
remuneration
ZAR '000
Awards earned during the period
reflected but not yet settled
DSP
2018
cash
cash
portion
settled
settled
ZAR '000
BSP, CIP and LTIP share awards
Sign-on cash settled
Sign-on shares settled
Total cash equivalent received reconciliation
settled
DSP
2019
awards
(1)
ZAR '000
CSLTIP
2017
awards
(2)
ZAR '000
Sign-on
awards
granted
awards
granted
(3)
ZAR '000
Grant fair
value
(4)
ZAR '000
Market
movement
since grant
since grant
date
(4)
ZAR '000
Vesting
fair
value
(4)
ZAR '000
Grant fair
value
(4)
ZAR '000
Currency
movement
since grant
since grant
date
(4)
ZAR '000
Settlement
fair value
fair value
(4)
ZAR '000
Grant fair
value
(4)
ZAR '000
Market
movement
since grant
since grant
date
(4)
ZAR '000
Vesting
fair
value
(4)
ZAR '000
ZAR '000
2019
USD '000
(5)
2018
USD '000
(5)
USD
2017
'000
(5)
Executive directors
KPM Dushnisky
90,544
(61,842) — —
7,119 — —
—
17,616 (1,010) 16,606
20,188 18,357 38,545
90,972
6,298
550 —
KC Ramon
73,631
(29,135) (33,064)
—
8,378 21,504 2,849
24,353
— — —
— — —
44,163
3,057
1,936 1,515
Total executive
directors
164,175
(90,977) (33,064)
— 15,497 21,504
2,849 24,353 17,616
(1,010)
16,606 20,188 18,357 38,545
135,135
9,355
2,486 1,515
Prescribed officers
SD Bailey
31,640
(18,087) (5,917)
— 2,613 4,066 724
4,789
— — —
— — —
15,038
1,041
— —
CE Carter
10,592
— — —
8,778
26,276 3,913
30,188
— — —
— — —
49,558
3,431
1,967 1,907
PD Chenard
47,550
(18,362) —
(16,191) — — —
—
— — —
— — —
12,997
900
— —
GJ Ehm
68,492
(25,329) (33,064)
—
7,113 19,622 (198)
19,424
— — —
— — —
36,636
2,536
1,751 1,758
L Eybers
67,296
(25,054) (29,160)
—
6,701
7,463 2,825
10,289
— — —
— — —
30,072
2,082
1,233 1,101
DC Noko
2,509
— — —
5,851
24,906 4,316
29,222
— — —
— — —
37,582
2,602
1,436 1,381
S Ntuli
37,055
(21,041) (7,526)
— 3,269 3,956 1,046
5,002
— — —
— — —
16,759
1,160
— —
ME Sanz Perez
55,874
(20,567) (26,447)
—
5,864 18,839 1,460
20,299
— — —
— — —
35,023
2,425
1,399 1,350
CB Sheppard
2,846
— — —
6,186
25,446 4,338
29,783
— — —
— — —
38,815
2,687
1,146 887
TR Sibisi
50,761
(19,638) (22,713)
—
5,495 17,709 876
18,585
— — —
— — —
32,490
2,249
886 674
Total prescribed
officers
374,615
(148,078) (124,827) (16,191)
51,870 148,283 19,300
167,581
— — —
— — —
304,970
21,113
9,818 9,058
Notes:
(1)
The fair value of the DSP comprises of a cash bonus and share awards for the year ended 31 December 2019 with the cash bonus payable in February 2020 and the share awards allocated in February 2020, vesting over a 5-year
period in equal tranches.
(2)
The fair value of the CSLTIP granted in 2017 with a 3-year performance period ended 31 December 2019. The awards vested on 1 March 2020.
(3)
PD Chenard was awarded a sign-on award of ZAR19.36m at start date,1 April 2019, of which ZAR6.33m will be settled in cash with 50% payable upfront, the balance on 1 April 2020 and ZAR13.03m will be settled in shares to vest
over a 2 year period in equal tranches in accordance with the JSE Listing requirements.
(4)
Reflects the sum of all the grant fair value, the sum of all the share price movements since grant to vesting date and the sum of all the vesting fair value for the vested CSLTIP 2016, vested BSP 2017 and 2018, vested CIP 2017
and 2018 vested sign-on share awards and difference in the currency movements for the vested sign-on cash settled award. These values include awards vested early for CE Carter, DC Noko and CB Sheppard in accordance with
their retirement dates as per as per scheme rules.
their retirement dates as per as per scheme rules.
(5)
Convenience conversion to USD at the year-to-date average exchange rate of $1:R14.445 (2018: $1:R13.247; 2017: $1:R13.301).
Details of the share incentive scheme awards are included below.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
33
RELATED PARTIES CONTINUED
Directors and other key management personnel CONTINUED
PAGE 73
Balance at
Vested,
Balance at
Fair value
Fair value
Fair value of
unvested awards
Balance at
Vested,
Balance at
Fair value
Fair value
Fair value of
unvested awards
BSP awards
1 January
deemed
Forfeited /
31 December
of granted
of vested
at 31 December
2019
Granted settled Lapsed
2019
awards
(1)
awards
(2)
2019
(3)
ZAR'000
ZAR'000
ZAR'000
Executive Directors
KPM Dushnisky
KPM Dushnisky
—
—
—
—
—
—
—
—
KC Ramon
77,073
—
49,256
—
27,817
—
10,034
8,804
Total executive directors
77,073
—
49,256
—
27,817
—
10,034
8,804
Prescribed officers
SD Bailey
SD Bailey
22,549
—
14,243
—
8,306
—
2,903
2,629
CE Carter
(4)
67,173
—
58,055
9,118
—
—
1,664
—
PD Chenard
—
—
—
—
—
—
—
—
GJ Ehm
62,783
—
39,786
—
22,997
—
8,109
7,279
L Eybers
53,626
—
31,338
—
22,288
—
6,419
7,054
DC Noko
(4)
52,531
—
44,415
8,116
—
—
9,070
—
S Ntuli
28,221
—
17,584
—
10,637
—
3,587
3,367
ME Sanz Perez
52,842
—
33,770
—
19,072
—
6,879
6,036
CB Sheppard
(4)
55,534
—
47,374
8,160
—
—
9,584
—
TR Sibisi
47,221
—
9,516
—
17,705
—
6,021
5,604
Total prescribed officers
442,480
—
316,081
25,394
101,005
—
64,236
31,969
Other Management
2,482,900
—
1,595,362
70,586
816,952
—
321,706
258,565
Total BSP awards
3,002,453
—
1,960,699
95,980
945,774
—
395,976
299,338
Notes
(1)
The fair value of granted awards represents the value of awards, calculated using a five-business day volume weighted average share price prior
to grant date. Closed scheme, no awards granted in 2019.
(2)
The fair value of vested awards represents the value deemed received on settlement date.
(3)
The fair value of unvested awards is calculated using the closing share price as at 31 December.
(4)
Includes awards vested early and lapsed for CE Carter, DC Noko and CB Sheppard in accordance with their retirement dates as per scheme rules.
LTIP awards
1 January
deemed
Forfeited /
31 December
of granted
of vested
at 31 December
2019
Granted settled Lapsed
2019
awards
(1)
awards
(2)
2019
(3)
ZAR'000
ZAR'000
ZAR'000
Executive directors
KPM Dushnisky
KPM Dushnisky
—
—
—
—
—
—
—
—
KC Ramon
230,595
—
56,760
63,240
110,595
—
11,315
35,003
Total executive directors
230,595
—
56,760
63,240
110,595
—
11,315
35,003
Prescribed officers
SD Bailey
SD Bailey
39,793
—
9,460
10,540
19,793
—
1,886
6,264
CE Carter
(4)
230,595
—
93,205
137,390
—
—
18,349
—
PD Chenard
—
—
—
—
—
—
—
—
GJ Ehm
230,595
—
56,760
63,240
110,595
—
11,315
35,003
L Eybers
117,535
—
9,460
10,540
97,535
—
1,886
30,870
DC Noko
(4)
208,850
—
85,036
123,814
—
—
17,178
—
S Ntuli
40,173
—
7,095
7,905
25,173
—
1,414
7,967
ME Sanz Perez
208,463
—
56,760
63,240
88,463
—
11,315
27,999
CB Sheppard
(4)
213,928
—
87,220
126,708
—
—
17,344
—
TR Sibisi
195,971
—
56,760
63,240
75,971
—
11,315
24,045
Total prescribed officers
1,485,903
—
461,756
606,617
417,530
—
92,002
132,148
Other Management
2,099,263
—
510,922
635,904
952,437
—
101,852
301,446
Total LTIP awards
3,815,761
—
1,029,438
1,305,761
1,480,562
—
205,169
468,597
Notes
(1)
The fair value of granted awards represents the value of awards, calculated using a five-business day volume weighted average share price prior
to grant date. Closed scheme, no awards granted in 2019.
(2)
The fair value of vested awards represents the value deemed received on settlement date.
(3)
The fair value of unvested awards is calculated using the closing share price as at 31 December.
(4)
Includes awards vested early and lapsed for CE Carter, DC Noko and CB Sheppard in accordance with their retirement dates as per scheme rules
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
33
RELATED PARTIES CONTINUED
Directors and other key management personnel CONTINUED
PAGE 74
Balance at
Vested,
Balance at
Fair value
Fair value
Fair value of
unvested awards
CIP matched awards
Balance at
Fair value
Notes
(1)
The fair value of granted awards represents the value of awards, calculated using the original investment share price on purchase date. Closed
scheme, no awards granted in 2019.
(2)
The fair value of matched awards represents the value received on settlement dates.
(3)
The fair value of unvested awards is calculated using the closing share price as at 31 December.
(4)
These awards lapsed for GJ Ehm in line with the scheme rules.
(5)
Includes awards vested early for DC Noko and CB Sheppard in accordance with their retirement dates as per scheme rules.
Sign-on share awards
1 January
deemed
Forfeited /
31 December
of granted
of vested
at 31 December
2019
Granted
settled
Lapsed
2019
awards
(1)
awards
(2)
2019
(3)
ZAR'000
ZAR'000
ZAR'000
Executive directors
KPM Dushnisky
KPM Dushnisky
351,755
—
175,877
—
175,878
—
38,545
55,665
Total executive directors
351,755
—
175,877
—
175,878
—
38,545
55,665
Prescribed officers
PD Chenard
PD Chenard
—
64,951
—
—
64,951
13,026
—
20,557
Total prescribed officers
—
64,951
—
—
64,951
13,026
—
20,557
Total Sign-on share awards
351,755
64,951
175,877
—
240,829
13,026
38,545
76,222
Notes
(1)
The fair value of granted awards represents the value of awards, calculated using a five-business day volume weighted average share price prior
to grant date. The share awards were granted on start date and will vest over a 2-year period in equal tranches in accordance with the JSE Listing
requirements.
requirements.
(2)
The fair value of KPM Dushnisky's vested awards represents the value received on settlement dates, 20 and 21 February 2019.
(3)
The fair value of unvested awards is calculated using the closing share price as at 31 December.
Balance at
Fair value
of
Fair value of
unvested matched
1 January
Forfeited /
31 December
of granted
matched
at 31 December
2019
Granted
Matched
Lapsed
2019
awards
(1)
awards
(2)
2019
(3)
ZAR'000
ZAR'000
ZAR'000
Executive directors
KPM Dushnisky
—
—
—
—
—
—
—
—
KC Ramon
23,270
—
14,795
—
8,475
—
3,004
2,682
Total
executive
directors
23,270
—
14,795
—
8,475
—
3,004
2,682
Prescribed officers
SD Bailey
—
—
—
—
—
—
—
—
CE Carter
949
—
949
—
—
—
175
—
PD Chenard
—
—
—
—
—
—
—
GJ Ehm
(4)
16,500
—
—
16,500
—
—
—
—
L Eybers
16,788
—
10,198
—
6,590
—
1,983
2,086
DC Noko
(5)
15,370
—
15,370
—
—
—
2,974
—
S Ntuli
—
—
—
—
—
—
—
—
ME Sanz Perez
16,039
—
10,297
—
5,742
—
2,104
1,817
CB Sheppard
(5)
14,358
—
14,358
—
—
—
2,855
—
TR Sibisi
9,304
—
6,184
—
3,120
—
1,249
987
Total prescribed officers
89,308
—
57,356
16,500
15,452
—
11,340
4,890
Other Management
—
—
—
—
—
—
—
—
Total CIP awards
112,578
—
72,151
16,500
23,927
—
14,344
7,572
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
33
RELATED PARTIES CONTINUED
Directors and other key management personnel CONTINUED
PAGE 75
Balance at
Vested,
Balance at
Fair value
Fair value
Fair value of
unvested awards
DSP awards
Subsequent to year end and up to the date of this report, the following DSP awards were granted to executive directors and
prescribed officers:
prescribed officers:
1 January
deemed
Forfeited /
31 December
of granted
of vested
at 31 December
2019
Granted
settled
Lapsed
2019
awards
(1)
awards
(2)
2019
(3)
ZAR'000
ZAR'000
ZAR'000
Executive directors
KPM Dushnisky
KPM Dushnisky
—
67,742
—
—
67,742
13,848
—
21,440
KC Ramon
—
89,782
—
—
89,782
18,353
—
28,416
Total
executive
directors
—
157,524
—
—
157,524
32,201
—
49,856
Prescribed officers
SD Bailey
SD Bailey
—
19,196
—
—
19,196
3,924
—
6,076
CE Carter
—
98,451
—
—
98,451
20,125
—
31,160
PD Chenard
—
—
—
—
—
—
—
—
GJ Ehm
—
82,037
—
—
82,037
16,770
—
25,965
L Eybers
—
77,380
—
—
77,380
15,818
—
24,491
DC Noko
—
67,548
—
—
67,548
13,808
—
21,379
S Ntuli
—
24,006
—
—
24,006
4,907
—
7,598
ME Sanz Perez
—
67,712
—
—
67,712
13,842
—
21,431
CB Sheppard
—
71,409
—
—
71,409
14,597
—
22,601
TR Sibisi
—
63,424
—
—
63,424
12,965
—
20,074
Total prescribed officers
—
571,163
—
—
571,163
116,756
—
180,775
Other Management
—
940,504
14,623
55,208
870,673
192,258
4,269
275,568
Total DSP awards
—
1,669,191
14,623
55,208
1,599,360
341,215
4,269
506,199
Notes
(1)
The fair value of granted awards represents the value of awards, calculated using a five-business day volume weighted average share price prior
to grant date, 21 February 2019.
(2)
The fair value of vested awards represents the value deemed received on settlement date.
(3)
The fair value of unvested awards is calculated using the closing share price as at 31 December.
Non-Executive Director remuneration
The table below details the fees and allowances paid to Non-Executive Directors:
Non-Executive Directors' fees and allowances
Figures in
Figures in
thousands
(1)
thousands
(1)
Director fees
Committee fees
Travel allowance
Total
Total
Total
US dollar
(1)
2019
2018
2017
SM Pityana (Chairman)
303,000
73,750
10,000
386,750
441
372
AH Garner
123,500
37,000
35,000
195,500
200
201
AM Ferguson
(2)
123,500
50,500
42,500
216,500
52
—
DL Hodgson
(3)
33,500
13,500
—
47,000
190
167
JE Tilk
(2)
123,500
47,000
60,000
230,500
—
—
M Ramos
(4)
70,000
30,500
6,250
106,750
—
—
MDC Richter
123,500
71,750
35,000
230,250
235
203
MJ Kirkwood
(3)
33,500
22,250
6,250
62,000
247
231
NP January-Bardill
123,500
56,000
6,250
185,750
198
180
R Gasant
123,500
63,500
6,250
193,250
229
182
RJ Ruston
123,500
56,000
38,750
218,250
261
212
Total Fees For 2019
1,304,500
521,750
246,250
2,072,500
2,053
1,748
(1)
Directors' compensation is disclosed in US dollars.
(2)
Director's travel allowance includes travel for site induction.
(3)
Directors resigned effective 9 May 2019.
(4)
Director joined on 1 June 2019.
Non-Executive Directors do not hold service contracts with the company. Executive Directors do not receive payment of
directors’ fees or committee fees.
directors’ fees or committee fees.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
33
RELATED PARTIES CONTINUED
PAGE 76
Directors’ and Prescribed Officers’ interests in AngloGold Ashanti shares
The interests of directors, prescribed officers and their associates in the ordinary shares of the company at 31 December,
which individually did not exceed 1% of the company’s issued ordinary share capital, were:
which individually did not exceed 1% of the company’s issued ordinary share capital, were:
Non-Executive directors
SM Pityana
MDC Richter
SM Pityana
MDC Richter
(1)
AH Garner
(1)
RJ Ruston
(2)
31 December 2019
Beneficial holding
Direct
Indirect
31 December 2018
Beneficial holding
Direct
Indirect
31 December 2017
Beneficial holding
Direct
Indirect
2,990
9,300
9,300
17,500
—
—
—
—
—
—
1,000
2,990
9,300
9,300
17,500
—
—
—
—
—
—
1,000
2,990
7,300
7,500
7,300
7,500
—
—
—
—
—
—
1,000
Total
29,790
1,000
29,790
1,000
17,790
1,000
Executive directors
KPM Dushnisky
KPM Dushnisky
(1)
KC Ramon
131,730
59,124
—
—
50,000
51,062
—
—
—
28,265
—
—
Total
190,854
—
101,062
—
28,265
—
Company Secretary
ME Sanz Perez
ME Sanz Perez
31,815
16,368
26,204
16,368
13,994
16,368
Total
31,815
16,368
26,204
16,368
13,994
16,368
Prescribed officers
SD Bailey
SD Bailey
(1)
GJ Ehm
(2)
L Eybers
TR Sibisi
TR Sibisi
1,190
35,058
18,164
13,283
18,164
13,283
—
16,213
—
—
—
—
35,058
17,207
17,207
9,914
—
16,213
—
—
—
—
30,319
4,812
4,085
4,085
—
16,213
—
—
—
Total
67,695
16,213
62,179
16,213
39,216
39,216
Grand total
320,154
33,581
219,235
33,581
92,265
33,581
(1)
Held on the New York stock exchange as American Depositary Shares (ADSs) (1 ADS is equivalent to 1 ordinary share)
(2)
Held on the Australian stock exchange as CHESS Depositary Receipts (5 CDIs are equivalent to 1 ordinary share)
A register detailing Directors and Prescribed Officers’ interests in contracts is available for inspection at the company’s
registered and corporate office.
registered and corporate office.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
33
RELATED PARTIES CONTINUED
PAGE 77
Directors’ and Prescribed Officers’ interests in AngloGold Ashanti shares CONTINUED
Changes in Directors' and Prescribed Officers' interests in AngloGold Ashanti shares, excluding options and awards granted
in terms of the group’s BSP and LTIP schemes, after 31 December 2019 include:
in terms of the group’s BSP and LTIP schemes, after 31 December 2019 include:
Date of
transaction
transaction
Type of transaction
Number of
shares
Direct/Indirect
beneficial
holding
Executive Directors
KPM Dushnisky
26 February 2020
On-market purchase in respect of the sign-on award
87,939
Direct
26 February 2020
On-market sale of ordinary shares to settle tax costs
47,488
Direct
KC Ramon
27 February 2020
On-market purchase of ordinary shares pursuant to the
AngloGold Ashanti Co-Investment Plan
AngloGold Ashanti Co-Investment Plan
8,475
Direct
28 February 2020
On-market sale of ordinary shares to settle tax costs
3,857
Direct
2 March 2020
On-market purchase of ordinary shares pursuant to the
AngloGold Ashanti Long Term Incentive Plan
AngloGold Ashanti Long Term Incentive Plan
52,234
Direct
On-market sale of ordinary shares to settle tax costs
24,027
Direct
Company Secretary
ME Sanz Perez
27 February 2020
On-market purchase of ordinary shares pursuant to the
AngloGold Ashanti Co-Investment Plan
AngloGold Ashanti Co-Investment Plan
5,742
Direct
28 February 2020
On-market sale of ordinary shares to settle tax costs
2,613
Direct
2 March 2020
On-market purchase of ordinary shares pursuant to the
AngloGold Ashanti Long Term Incentive Plan
AngloGold Ashanti Long Term Incentive Plan
41,781
Direct
On-market sale of ordinary shares to settle tax costs
19,219
Direct
Prescribed officers
Direct
SD Bailey
2 March 2020
On-market purchase of ordinary shares pursuant to the
AngloGold Ashanti Long Term Incentive Plan
AngloGold Ashanti Long Term Incentive Plan
9,348
Direct
On-market sale of ordinary shares to settle tax costs
4,300
Direct
GJ Ehm
2 March 2020
On-market purchase of ordinary shares pursuant to the
AngloGold Ashanti Long Term Incentive Plan
AngloGold Ashanti Long Term Incentive Plan
52,234
Direct
On-market sale of ordinary shares to settle tax costs
24,027
Direct
L Eybers
2 March 2020
On-market purchase of ordinary shares pursuant to the
AngloGold Ashanti Long Term Incentive Plan
AngloGold Ashanti Long Term Incentive Plan
46,065
Direct
3 March 2020
On-market sale of ordinary shares to settle tax costs
21,190
Direct
9 March 2020
On-market purchase of ordinary shares pursuant to the
AngloGold Ashanti Co-Investment Plan
AngloGold Ashanti Co-Investment Plan
6,590
Direct
On-market sale of ordinary shares to settle tax costs
2,999
Direct
S Ntuli
2 March 2020
On-market purchase of ordinary shares pursuant to the
AngloGold Ashanti Long Term Incentive Plan
AngloGold Ashanti Long Term Incentive Plan
11,889
Direct
On-market sale of ordinary shares to settle tax costs
5,468
Direct
TR Sibisi
2 March 2020
On-market purchase of ordinary shares pursuant to the
AngloGold Ashanti Long Term Incentive Plan
AngloGold Ashanti Long Term Incentive Plan
35,881
Direct
On-market sale of ordinary shares to settle tax costs
16,505
Direct
On-market purchase of ordinary shares pursuant to the
AngloGold Ashanti Co-Investment Plan
AngloGold Ashanti Co-Investment Plan
3,120
Direct
On-market sale of ordinary shares to settle tax costs
1,420
Direct
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 78
34
CONTRACTUAL COMMITMENTS AND CONTINGENCIES
Capital commitments
Acquisition of tangible assets
Contracted for
Not contracted for
Acquisition of tangible assets
Contracted for
Not contracted for
161
426
426
99
792
87
113
Authorised by the directors
(1)
587
891
200
Allocated to:
Project capital
- within one year
288
446
104
- thereafter
162
308
—
450
754
104
Stay-in-business capital
- within one year
117
125
84
- thereafter
20
12
12
137
137
96
Share of underlying capital commitments of joint ventures included above
2
91
21
Purchase obligations
(2)
Contracted for
- within one year
506
305
274
- thereafter
579
658
424
1,085
963
698
(1)
Includes $59m (2018: $90m; 2017: $54m) relating to discontinued operations.
(2)
Includes $8m (2018: $25m; 2017: $54m) relating to discontinued operations.
Purchase obligations
Purchase obligations represent contractual obligations for the purchase of mining contract services, power, supplies,
consumables, inventories, explosives and activated carbon.
consumables, inventories, explosives and activated carbon.
To service these capital commitments, purchase obligations and other operational requirements, the group is dependent on
existing cash resources, cash generated from operations and borrowing facilities.
existing cash resources, cash generated from operations and borrowing facilities.
Cash generated from operations is subject to operational, market and other risks. Distributions from operations may be subject
to foreign investment, exchange control laws and regulations, and the quantity of foreign exchange available in offshore
countries. In addition, distributions from joint ventures are subject to the relevant board approval.
to foreign investment, exchange control laws and regulations, and the quantity of foreign exchange available in offshore
countries. In addition, distributions from joint ventures are subject to the relevant board approval.
The credit facilities and other finance arrangements contain financial covenants and other similar undertakings. To the extent
that external borrowings are required, the group's covenant performance indicates that existing financing facilities will be
available to meet the commitments detailed above. To the extent that any of the financing facilities mature in the near future,
the group believes that sufficient measures are in place to ensure that these facilities can be refinanced.
that external borrowings are required, the group's covenant performance indicates that existing financing facilities will be
available to meet the commitments detailed above. To the extent that any of the financing facilities mature in the near future,
the group believes that sufficient measures are in place to ensure that these facilities can be refinanced.
Contingencies
US dollar millions
2019
2018
2017
Contingent liabilities
Litigation - Ghana
(1)(2)
97
97
97
Litigation - North America
(3)
—
—
—
Groundwater pollution
(4)
—
—
—
Deep groundwater pollution - Africa
(5)
—
—
—
97
97
97
Litigation claims
(1)
Litigation - On 11 October 2011, AngloGold Ashanti (Ghana) Limited (AGAG) terminated Mining and Building Contractors
Limited’s (MBC) underground development agreement, construction on bulkheads agreement and diamond drilling
agreement at Obuasi mine. The parties reached agreement on the terms of the separation and concluded a separation
agreement on 8 November 2012. On 20 February 2014, AGAG was served with a demand issued by MBC claiming a
total of $97m. In December 2015, the proceedings were stayed in the High Court pending arbitration. In February 2016,
MBC submitted the matter to arbitration. The arbitration panel has been constituted and on 26 Jul 2019 held an arbitration
management meeting to address initial procedural matters.
agreement at Obuasi mine. The parties reached agreement on the terms of the separation and concluded a separation
agreement on 8 November 2012. On 20 February 2014, AGAG was served with a demand issued by MBC claiming a
total of $97m. In December 2015, the proceedings were stayed in the High Court pending arbitration. In February 2016,
MBC submitted the matter to arbitration. The arbitration panel has been constituted and on 26 Jul 2019 held an arbitration
management meeting to address initial procedural matters.
2017
2018
2019
US dollar millions
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 79
34
CONTRACTUAL COMMITMENTS AND CONTINGENCIES CONTINUED
(2)
Litigation - AGAG received a summons on 2 April 2013 from Abdul Waliyu and 152 others in which the plaintiffs allege
that they were or are residents of the Obuasi municipality or its suburbs and that their health has been adversely affected
by emission and/or other environmental impacts arising in connection with the current and/or historical operations of the
Pompora Treatment Plant (PTP), which was decommissioned in 2000. The plaintiffs’ alleged injuries include respiratory
infections, skin diseases and certain cancers. The plaintiffs subsequently did not timely file their application for directions.
On 24 February 2014, executive members of the PTP (AGAG) Smoke Effect Association (PASEA), sued AGAG by
themselves and on behalf of their members (undisclosed number) on grounds similar to those discussed above, as well
as economic hardships as a result of constant failure of their crops. This matter has been adjourned indefinitely. In view
of the limitation of current information for the accurate estimation of a liability, no reliable estimate can be made for AGAG’s
obligation in either matter.
by emission and/or other environmental impacts arising in connection with the current and/or historical operations of the
Pompora Treatment Plant (PTP), which was decommissioned in 2000. The plaintiffs’ alleged injuries include respiratory
infections, skin diseases and certain cancers. The plaintiffs subsequently did not timely file their application for directions.
On 24 February 2014, executive members of the PTP (AGAG) Smoke Effect Association (PASEA), sued AGAG by
themselves and on behalf of their members (undisclosed number) on grounds similar to those discussed above, as well
as economic hardships as a result of constant failure of their crops. This matter has been adjourned indefinitely. In view
of the limitation of current information for the accurate estimation of a liability, no reliable estimate can be made for AGAG’s
obligation in either matter.
(3)
Litigation - On 19 October 2017, Newmont Mining Co. filed a lawsuit in the United States District Court for the Southern
District of New York against AngloGold Ashanti and certain related parties, alleging that AngloGold Ashanti and such
parties did not provide Newmont with certain information material to its purchase of the Cripple Creek & Victor Gold Mining
Company in 2015 during the negotiation- and-sale process. During November 2019, the AngloGold Ashanti defendants
filed two motions for summary judgement with the Court, requesting the dismissal of all causes of actions against all
defendants. On 18 March 2020, the Court granted the motions, dismissed all causes of actions and ordered the case to
be closed. Newmont Mining Co. has 30 days from the date of the order to file an appeal to the Court’s decision.
parties did not provide Newmont with certain information material to its purchase of the Cripple Creek & Victor Gold Mining
Company in 2015 during the negotiation- and-sale process. During November 2019, the AngloGold Ashanti defendants
filed two motions for summary judgement with the Court, requesting the dismissal of all causes of actions against all
defendants. On 18 March 2020, the Court granted the motions, dismissed all causes of actions and ordered the case to
be closed. Newmont Mining Co. has 30 days from the date of the order to file an appeal to the Court’s decision.
Tax claims
For a discussion on tax claims and tax uncertainties refer to note 12.
Other
(4)
Groundwater pollution - AngloGold Ashanti 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 group has instituted processes to reduce future potential seepage and it has been
demonstrated that Monitored Natural Attenuation (MNA) by the existing environment will contribute to improvements in
some instances. Furthermore, literature reviews, field trials and base line modelling techniques suggest, but have not yet
proven, that the use of phyto-technologies can address the soil and groundwater contamination. Subject to the completion
of trials and the technology being a proven remediation technique, no reliable estimate can be made for the obligation.
legal studies have been undertaken to assist in determining the magnitude of the contamination and to find sustainable
remediation solutions. The group has instituted processes to reduce future potential seepage and it has been
demonstrated that Monitored Natural Attenuation (MNA) by the existing environment will contribute to improvements in
some instances. Furthermore, literature reviews, field trials and base line modelling techniques suggest, but have not yet
proven, that the use of phyto-technologies can address the soil and groundwater contamination. Subject to the completion
of trials and the technology being a proven remediation technique, no reliable estimate can be made for the obligation.
(5)
Deep groundwater pollution - The group has identified potential water ingress and future pollution risk posed by deep
groundwater in certain underground mines in Africa. Various studies have been undertaken by AngloGold Ashanti since
1999 to understand this potential risk. In South Africa, 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
Mineral and Petroleum Resources Development Act (MPRDA) requires that the affected mining companies develop a
Regional Mine Closure Strategy to be approved by the Department of Mineral Resources. In view of the limitation of
current information for the accurate estimation of a liability, no reliable estimate can be made for the obligation.
1999 to understand this potential risk. In South Africa, 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
Mineral and Petroleum Resources Development Act (MPRDA) requires that the affected mining companies develop a
Regional Mine Closure Strategy to be approved by the Department of Mineral Resources. In view of the limitation of
current information for the accurate estimation of a liability, no reliable estimate can be made for the obligation.
35
FINANCIAL RISK MANAGEMENT STATEMENTS
In the normal course of its operations, the group is exposed to gold price, other commodity price, foreign exchange, interest
rate, liquidity, equity price (deemed to be immaterial) and credit risks. In order to manage these risks, the group may enter
into transactions which make use of both on- and off-balance sheet derivatives. The group does not acquire, hold or issue
derivatives for speculative purposes. The group has developed a comprehensive risk management process to facilitate,
control and monitor these risks. The board has approved and monitors this risk management process, inclusive of documented
treasury policies, counterparty limits and controlling and reporting structures.
rate, liquidity, equity price (deemed to be immaterial) and credit risks. In order to manage these risks, the group may enter
into transactions which make use of both on- and off-balance sheet derivatives. The group does not acquire, hold or issue
derivatives for speculative purposes. The group has developed a comprehensive risk management process to facilitate,
control and monitor these risks. The board has approved and monitors this risk management process, inclusive of documented
treasury policies, counterparty limits and controlling and reporting structures.
Managing risk in the group
Risk management activities within the group are the ultimate responsibility of the board of directors. The Chief Financial
Officer is responsible to the board of directors for the design, implementation and monitoring of the risk management plan.
The Audit and Risk Committee is responsible for overseeing risk management plans and systems, as well as financial risks
which include a review of treasury activities and the group’s counterparties.
Officer is responsible to the board of directors for the design, implementation and monitoring of the risk management plan.
The Audit and Risk Committee is responsible for overseeing risk management plans and systems, as well as financial risks
which include a review of treasury activities and the group’s counterparties.
The financial risk management objectives of the group are defined as follows:
• safeguarding the group's core earnings stream from its major assets through the effective control and management of
gold price risk, other commodity risk, foreign exchange risk and interest rate risk;
• effective and efficient usage of credit facilities in both the short and long-term through the adoption of reliable liquidity
management planning and procedures;
• ensuring that investment and hedging transactions are undertaken with creditworthy counterparties; and
• ensuring that all contracts and agreements related to risk management activities are co-ordinated, consistent throughout
the group and that they comply where necessary with all relevant regulatory and statutory requirements.
gold price risk, other commodity risk, foreign exchange risk and interest rate risk;
• effective and efficient usage of credit facilities in both the short and long-term through the adoption of reliable liquidity
management planning and procedures;
• ensuring that investment and hedging transactions are undertaken with creditworthy counterparties; and
• ensuring that all contracts and agreements related to risk management activities are co-ordinated, consistent throughout
the group and that they comply where necessary with all relevant regulatory and statutory requirements.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
35
FINANCIAL RISK MANAGEMENT STATEMENTS CONTINUED
PAGE 80
Gold price and foreign exchange risk
Gold price risk arises from the risk of an adverse effect on current or future earnings resulting from fluctuations in the price of
gold. The group has transactional foreign exchange exposures, which arise from sales or purchases by an operating unit in
currencies other than the unit's functional currency. The gold market is predominately priced in US dollars which exposes the
group to the risk that fluctuations in the SA rand/US dollar, Brazilian real/US dollar, Argentinean peso/US dollar and Australian
dollar/US dollar exchange.
gold. The group has transactional foreign exchange exposures, which arise from sales or purchases by an operating unit in
currencies other than the unit's functional currency. The gold market is predominately priced in US dollars which exposes the
group to the risk that fluctuations in the SA rand/US dollar, Brazilian real/US dollar, Argentinean peso/US dollar and Australian
dollar/US dollar exchange.
Net open hedge position as at 31 December 2019
The group had no commitments against future production potentially settled in cash.
Interest rate and liquidity risk
The group manages liquidity risk by ensuring that there is sufficient committed borrowing and banking facilities after taking
into consideration the actual and forecast cash flows, in order to meet the group's short, medium and long term funding and
liquidity management requirements.
into consideration the actual and forecast cash flows, in order to meet the group's short, medium and long term funding and
liquidity management requirements.
In the ordinary course of business, the group receives cash from the proceeds of its gold sales and is required to fund its
working capital and capital expenditure requirements. This cash is managed to ensure surplus funds are invested in a manner
to achieve market-related returns whilst minimising risks. The group is able to actively source financing at competitive rates.
The counter parties are financial and banking institutions and their credit ratings are regularly monitored.
working capital and capital expenditure requirements. This cash is managed to ensure surplus funds are invested in a manner
to achieve market-related returns whilst minimising risks. The group is able to actively source financing at competitive rates.
The counter parties are financial and banking institutions and their credit ratings are regularly monitored.
The group has sufficient undrawn borrowing facilities available to fund its working capital and capital requirements (notes 26
and 36).
and 36).
The following are the contractual maturities of financial liabilities, including interest payments
Financial liabilities
2018
Trade and other payables
Trade and other payables
562
—
—
—
562
Gold and oil derivative contracts
9
—
—
—
9
Borrowings
133
836
1,120
663
2,752
-
In
USD
112
5.8
790
5.8
1,025
6.0
622
6.5
2,549
- AUD in USD equivalent
7
6.8
7
6.8
23
6.8
26
6.8
63
- TZS in USD equivalent
5
12.5
3
12.5
29
12.5
—
—
37
- ZAR in USD equivalent
9
9.0
36
9.0
43
9.7
15
14.7
103
2017
Trade and other payables
Trade and other payables
615
—
—
—
615
Borrowings
137
343
1,912
695
3,087
- In USD
- AUD in USD equivalent
- ZAR in USD equivalent
- AUD in USD equivalent
- ZAR in USD equivalent
98
5.4
145
5.4
1,643
5.5
641
6.5
2,527
16
5.1
174
5.1
25
6.8
38
6.8
253
23
8.9
24
8.9
244
9.1
16
15.5
307
With the implementation of IFRS 16 effective 1 January 2019 the finance lease liabilities historically included in borrowings
have been reallocated to lease liabilities. The table below provides a breakdown of the contractual maturities including interest
payments of the lease liabilities.
have been reallocated to lease liabilities. The table below provides a breakdown of the contractual maturities including interest
payments of the lease liabilities.
Within
one year
Between
one and
two years
Between
two and
five years
After five
years
Total
2019
$ millions
51
Effective
rate %
$ millions
33
Effective
rate %
$ millions
54
Effective
rate %
$ millions
56
Effective
rate %
$ millions
194
Lease liabilities
- In USD
22
7.0
4
7.0
8
7.0
1
7.0
35
- AUD in USD equivalent
22
3.5
22
3.5
42
3.5
55
3.5
141
- BRL in USD equivalent
3
6.8
3
6.8
3
6.8
—
—
9
- ZAR in USD equivalent
4
9.8
4
9.8
1
9.8
—
—
9
Within
one year
Between
one and
two years
Between
two and
five years
After five
years
Total
2019
$ millions
Effective
rate %
$ millions
15
185
Effective
rate %
$ millions
—
1,012
Effective
rate %
$ millions
—
602
Effective
rate %
$ millions
601
2,601
Trade and other payables
586
802
802
Borrowings
- In USD
790
5.8
132
6.0
913
6.1
602
6.5
2,437
- AUD in USD equivalent
—
2.3
—
2.3
22
2.3
—
—
22
- TZS in USD equivalent
6
12.5
47
12.5
—
—
—
—
53
- ZAR in USD equivalent
6
8.1
6
8.1
77
8.1
—
—
89
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
35
FINANCIAL RISK MANAGEMENT STATEMENTS CONTINUED
PAGE 81
Credit risk
Credit risk arises from the risk that a counterparty may default or not meet its obligations timeously. The group minimises
credit risk by ensuring that credit risk is spread over a number of counterparties. These counterparties are financial and
banking institutions. Counterparty credit limits and exposures are reviewed by the Audit and Risk Committee. Where possible,
management ensures that netting agreements are in place. No set-off is applied to the statement of financial position due to
the different maturity profiles of assets and liabilities.
credit risk by ensuring that credit risk is spread over a number of counterparties. These counterparties are financial and
banking institutions. Counterparty credit limits and exposures are reviewed by the Audit and Risk Committee. Where possible,
management ensures that netting agreements are in place. No set-off is applied to the statement of financial position due to
the different maturity profiles of assets and liabilities.
The combined maximum credit risk exposure of the group is as follows:
US dollar millions
2019
2018
2017
Other investments
(1)
67
59
58
Trade and other receivables
57
41
33
Cash restricted for use (note 23)
64
66
65
Cash and cash equivalents (note 24)
456
329
205
Total financial assets
644
495
361
Trade and other receivables, that are past due but not impaired totalled $15m (2018: $6m; 2017: $10m). Other investments
that are impaired totalled $1m (2018: nil; 2017: $3m).
that are impaired totalled $1m (2018: nil; 2017: $3m).
Trade receivables mainly comprise banking institutions purchasing gold bullion. Normal market settlement terms are two
working days.
working days.
The group does not generally obtain collateral or other security to support financial instruments subject to credit risk, but
monitors the credit standing of counterparties.
monitors the credit standing of counterparties.
Fair value of financial instruments
The estimated fair values of financial instruments are determined at discrete points in time based on relevant market
information.
information.
The estimated fair value of the group's other investments and borrowings as at 31 December are as follows:
Type of instrument
Carrying
amount
2019
Fair value
Carrying
amount
2018
Fair value
Carrying
amount
2017
Fair value
Financial assets
Other investments
(1)
170
170
147
147
138
140
Financial liabilities
Borrowings (note 26)
2,033
2,135
2,050
2,084
2,268
2,377
(1)
Included in other investments are amounts transferred to held for sale
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, trade, other receivables and other assets and trade and other payables
The carrying amounts approximate fair value due to their short-term nature.
Investments and other non-current assets
Listed equity investments classified as FVTOCI and FVTPL are carried at fair value in level 1 of the fair value hierarchy while
fixed income investments and other non-current assets are carried at amortised cost.
fixed income investments and other non-current assets are carried at amortised cost.
Borrowings
The rated bonds are carried at amortised cost and their fair values are their closing market values at the reporting date (fair
value hierarchy - level 1). The interest rate on the remaining borrowings is set on a short-term floating rate basis, and
accordingly the carrying amount is considered to approximate fair value
value hierarchy - level 1). The interest rate on the remaining borrowings is set on a short-term floating rate basis, and
accordingly the carrying amount is considered to approximate fair value
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
35
FINANCIAL RISK MANAGEMENT STATEMENTS CONTINUED
PAGE 82
Fair value hierarchy
The group uses the following hierarchy for determining and disclosing the fair value of financial instruments:
Level 1:
Level 1:
quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2:
inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices); and
(as prices) or indirectly (derived from prices); and
Level 3:
inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The following table sets out the group's financial assets measured at fair value by level within the fair value hierarchy as at
31 December:
31 December:
Type of instrument
Assets measured at fair value on a recurring basis
US dollar millions
US dollar millions
Level 1
Level 2
Level 3
Total
2019
Equity securities - FVTPL
(1)
21
—
—
21
Equity securities - FVTOCI
82
—
—
82
2018
Equity securities - FVTPL
19
—
—
19
Equity securities - FVTOCI
69
—
—
69
2017
Equity securities - available-for-sale
80
—
—
80
(1)
Included in equity securities - FVTPL are amounts transferred to held for sale.
Environmental obligations
Pursuant to environmental regulations in the countries in which we operate, we are obligated to close our operations and
rehabilitate the lands which we mine in accordance with these regulations. As a consequence, AngloGold Ashanti is required
in some circumstances to provide either reclamations bonds issued by third party entities, establish independent trust funds
or provide guarantees issued by the operation, to the respective environmental protection agency or such other government
department with responsibility for environmental oversight in the respective country to cover the potential environmental
rehabilitation obligation in specified amounts.
rehabilitate the lands which we mine in accordance with these regulations. As a consequence, AngloGold Ashanti is required
in some circumstances to provide either reclamations bonds issued by third party entities, establish independent trust funds
or provide guarantees issued by the operation, to the respective environmental protection agency or such other government
department with responsibility for environmental oversight in the respective country to cover the potential environmental
rehabilitation obligation in specified amounts.
In most cases, the environmental obligations will expire on completion of the rehabilitation although in some cases we are
required to potentially post bonds for events unknown that may arise after the rehabilitation has been completed.
required to potentially post bonds for events unknown that may arise after the rehabilitation has been completed.
In Australia, since 2014, the group has paid an amount of AUD $6.8m into a Mine Rehabilitation Fund for a current carrying
value of the liability of AUD $137.9m. At Iduapriem the group has provided a bond comprised of a cash component of $9.99m
with a further bond guarantee amounting to $36.6m issued by Ecobank Ghana Limited, United Bank for Africa (Ghana) Limited
and Barclays Ghana Limited for a current carrying value of the liability of $46.3m. At Obuasi the group has provided a bond
comprised of a cash component of $20.6m with a further bank guarantee amounting to $30m issued by Nedbank Limited for
a current carrying value of the liability of $186.3m. In some circumstances, the group may be required to post further bonds
in future years which will have a consequential income statement charge for the fees charged by the providers of the
reclamation bonds.
value of the liability of AUD $137.9m. At Iduapriem the group has provided a bond comprised of a cash component of $9.99m
with a further bond guarantee amounting to $36.6m issued by Ecobank Ghana Limited, United Bank for Africa (Ghana) Limited
and Barclays Ghana Limited for a current carrying value of the liability of $46.3m. At Obuasi the group has provided a bond
comprised of a cash component of $20.6m with a further bank guarantee amounting to $30m issued by Nedbank Limited for
a current carrying value of the liability of $186.3m. In some circumstances, the group may be required to post further bonds
in future years which will have a consequential income statement charge for the fees charged by the providers of the
reclamation bonds.
In South Africa, AngloGold Ashanti has established a trust fund which has assets of ZAR 1.156bn and guarantees of
ZAR 0.549bn issued by various banks, for a current carrying value of the liability of ZAR 0.897bn. The fund, guarantees and
liability form part of the South African disposal group and have been transferred to held for sale. Refer to note 9.
ZAR 0.549bn issued by various banks, for a current carrying value of the liability of ZAR 0.897bn. The fund, guarantees and
liability form part of the South African disposal group and have been transferred to held for sale. Refer to note 9.
Sensitivity analysis
Interest rate risk on other financial assets and liabilities (excluding derivatives)
The group also monitors interest rate risk on other financial assets and liabilities.
The following table shows the approximate interest rate sensitivities of other financial assets and liabilities at 31 December
(actual changes in the timing and amount of the following variables may differ from the assumed changes below). As the
sensitivity is the same (linear) for both increases and decreases in interest rates only absolute numbers are presented.
(actual changes in the timing and amount of the following variables may differ from the assumed changes below). As the
sensitivity is the same (linear) for both increases and decreases in interest rates only absolute numbers are presented.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
35
FINANCIAL RISK MANAGEMENT STATEMENTS CONTINUED
Sensitivity analysis CONTINUED
PAGE 83
Interest rate risk on other financial assets and liabilities (excluding derivatives) CONTINUED
Change in
interest rate
basis points
basis points
Change in
interest
amount in
currency
millions
Change in
interest
amount
amount
US dollar
millions
2019
Financial assets
USD denominated
USD denominated
100
1
1
AUD denominated
150
1
1
Financial liabilities
TZS denominated
TZS denominated
250
2,704
1
ZAR denominated
(2)
150
15
1
USD denominated
100
1
1
Change in
Change in
interest
amount in
Change in
interest
amount
amount
interest rate
basis points
currency
millions
US dollar
millions
2018
Financial assets
USD denominated
USD denominated
100
1
1
AUD denominated
150
1
1
BRL denominated
250
2
1
Financial liabilities
TZS denominated
TZS denominated
250
1,680
1
ZAR denominated
(2)
150
14
1
AUD denominated
100
1
1
Change in
Change in
interest
amount in
Change in
interest
amount
amount
interest rate
basis points
currency
millions
US dollar
millions
2017
Financial assets
USD denominated
100
1
1
ZAR denominated
(1)(2)
150
2
—
Financial liabilities
ZAR denominated
ZAR denominated
(2)
150
41
3
USD denominated
100
3
2
(1)
A change of 100 basis points in financial assets results in less than a $1m change in the interest amount.
(2)
This is the only interest rate risk for the company.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
35
FINANCIAL RISK MANAGEMENT STATEMENTS CONTINUED
Sensitivity analysis CONTINUED
PAGE 84
Foreign exchange risk
Foreign exchange risk arises on financial instruments that are denominated in a foreign currency.
The following table discloses the approximate foreign exchange risk sensitivities of borrowings at 31 December (actual
changes in the timing and amount of the following variables may differ from the assumed changes below).
changes in the timing and amount of the following variables may differ from the assumed changes below).
Change in
borrowings
Change in
total
exchange rate
$m
Change in
exchange rate
Change in
borrowings
total
$m
Change in
exchange rate
Change in
borrowings
total
$m
2019
2018
2017
Borrowings
ZAR denominated (R/$)
TZS denominated (TZS/$)
AUD denominated (AUD/$)
ZAR denominated (R/$)
TZS denominated (TZS/$)
AUD denominated (AUD/$)
Spot (+R1.50)
(7)
Spot (+TZS250)
(5)
Spot (+AUD0.1)
(1)
Spot (+R1.50)
Spot (+TZS250)
Spot (+AUD0.1)
Spot (+AUD0.1)
(7)
(3)
(3)
(3)
(3)
Spot (+R1.50)
Spot (+AUD0.1)
(26)
(16)
ZAR denominated (R/$)
TZS denominated (TZS/$)
AUD denominated (AUD/$)
TZS denominated (TZS/$)
AUD denominated (AUD/$)
Spot (-R1.50)
9
Spot (-TZS250)
6
Spot (-AUD0.1)
1
Spot (-R1.50)
Spot (-TZS250)
Spot (-AUD0.1)
Spot (-AUD0.1)
9
4
4
4
4
Spot (-R1.50)
Spot (-AUD0.1)
33
19
The borrowings total in the denominated currency will not be influenced by a movement in its exchange rate.
36
CAPITAL MANAGEMENT
The primary objective of managing the group's capital is to ensure that there is sufficient capital available to support the
funding requirements of the group, including capital expenditure, in a way that optimises the cost of capital, maximises
shareholders' returns and ensures that the group remains in a sound financial position.
funding requirements of the group, including capital expenditure, in a way that optimises the cost of capital, maximises
shareholders' returns and ensures that the group remains in a sound financial position.
The capital structure of the group consists of net debt (borrowings as detailed in note 26, offset by cash and bank balances
detailed in note 24) and equity of the group (comprising share capital and premium and accumulated reserves and non-
controlling interests).
detailed in note 24) and equity of the group (comprising share capital and premium and accumulated reserves and non-
controlling interests).
The group manages and makes adjustments to the capital structure as opportunities arise in the market place, as and when
borrowings mature, or as and when funding is required. This may take the form of raising equity, market or bank debt or
hybrids thereof.
borrowings mature, or as and when funding is required. This may take the form of raising equity, market or bank debt or
hybrids thereof.
The group manages capital using various financial metrics including the ratio of net debt to Adjusted EBITDA (gearing). Both
the calculation of net debt and Adjusted EBITDA are based on the formula included in the Revolving Credit Agreements. The
loan covenant ratio of net debt to Adjusted EBITDA should not exceed 3.5 times. The facility also makes provision for the
ability of the group to have a leverage ratio of greater than 3.5 times but less than 4.5 times, subject to certain conditions, for
one measurement period not exceeding six months, during the tenor of the facility.
the calculation of net debt and Adjusted EBITDA are based on the formula included in the Revolving Credit Agreements. The
loan covenant ratio of net debt to Adjusted EBITDA should not exceed 3.5 times. The facility also makes provision for the
ability of the group to have a leverage ratio of greater than 3.5 times but less than 4.5 times, subject to certain conditions, for
one measurement period not exceeding six months, during the tenor of the facility.
The group had no major issuance of equity during the year.
During January 2019 the $35m Geita revolving credit facility, entered into in August 2016 was combined with the existing
$115m Geita revolving credit facility. The combined $150m revolving credit facility with Nedbank Ltd consists of a US dollar
and Tanzanian Shilling facility. Facility A is a US dollar-based facility with interest charged at a margin of 6.7% above LIBOR
and facility B is a Tanzanian Shilling facility capped at the equivalent of $45m with interest charged at a margin of 5% plus a
reference rate as determined by the lending agent.
$115m Geita revolving credit facility. The combined $150m revolving credit facility with Nedbank Ltd consists of a US dollar
and Tanzanian Shilling facility. Facility A is a US dollar-based facility with interest charged at a margin of 6.7% above LIBOR
and facility B is a Tanzanian Shilling facility capped at the equivalent of $45m with interest charged at a margin of 5% plus a
reference rate as determined by the lending agent.
During February 2019 the $65m Siguiri revolving credit facility entered into in August 2016 was renewed for a further 3 years
and matures on 27 February 2022. The facility bears interest at 8% above LIBOR, subject to a ratings grid and is US dollar-
based.
and matures on 27 February 2022. The facility bears interest at 8% above LIBOR, subject to a ratings grid and is US dollar-
based.
A full analysis of the borrowings as presented on the statement of financial position in included in note 26. In addition, the
following details are also relevant to the borrowings at 31 December 2019:
following details are also relevant to the borrowings at 31 December 2019:
The $750m, $700m and $300m rated bonds are fully and unconditionally guaranteed by the group.
The interest margin on the five-year unsecured multi-currency syndicated revolving credit facility of $1.4bn with a group of
banks will reduce should the group’s credit rating improve from its current BB+/Baa3 status and should increase if its credit
rating worsens. The A$500m portion of this facility will be used to fund the working capital and development costs associated
with the group's mining operations within Australia without eroding the group's headroom under its other facilities and exposing
the group to foreign exchange gains/losses each quarter.
banks will reduce should the group’s credit rating improve from its current BB+/Baa3 status and should increase if its credit
rating worsens. The A$500m portion of this facility will be used to fund the working capital and development costs associated
with the group's mining operations within Australia without eroding the group's headroom under its other facilities and exposing
the group to foreign exchange gains/losses each quarter.
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 85
36
CAPITAL MANAGEMENT CONTINUED
The R1bn, R1.4bn and R2.5bn unsecured syndicated revolving credit facilities will be used to fund the working capital and
development costs associated with the group's operations within South Africa without eroding the group's headroom under its
other facilities and exposing the group to foreign exchange gains/losses each quarter.
development costs associated with the group's operations within South Africa without eroding the group's headroom under its
other facilities and exposing the group to foreign exchange gains/losses each quarter.
Amounts are converted to US dollars at year end exchange rates.
Gearing ratio (Adjusted net debt to Adjusted EBITDA)
US dollar millions
2019
2018
2017
Adjusted net debt from continuing operations
Borrowings- non-current portion (note 26)
1,299
1,911
2,230
Lease liabilities - non-current portion (note 16)
126
—
—
Borrowings - current portion (note 26)
734
139
38
Lease liabilities - current portion (note 16)
45
—
—
Total borrowings
2,204
2,050
2,268
Less cash and cash equivalents (note 24)
(456)
(329)
(205)
Net debt
1,748
1,721
2,063
Adjustments:
IFRS16 lease adjustments
(119)
—
—
Corporate office lease
—
(9)
(15)
Unamortised portion of borrowing costs
16
13
18
Cash restricted for use (note 23)
(64)
(66)
(65)
Adjusted net debt
1,581
1,659
2,001
The Adjusted EBITDA calculation included in this note is based on the
formula included in the Revolving Credit Agreements for compliance with
the debt covenant formula.
Adjusted EBITDA from continuing operations
Profit before taxation
619
445
328
Add back:
Finance costs and unwinding of obligations (note 7)
172
168
157
Interest income
(14)
(8)
(8)
Amortisation of tangible, intangible and right of use assets (note 4)
583
558
690
Other amortisation
6
11
3
Associates and joint ventures’ adjustments for amortisation, interest,
taxation and other
149
158
117
EBITDA
1,515
1,332
1,287
Adjustments:
Foreign exchange losses
12
9
11
Dividend income
—
(2)
—
Retrenchment and related costs
7
4
9
Care and maintenance costs (note 6)
47
39
62
Impairment, derecognition of assets and (profit) loss on disposal
6
7
2
(Gain) loss on non-hedge derivatives and other commodity contracts
(5)
2
—
Associates and joint ventures’ share of costs
(2)
(3)
(2)
Adjusted EBITDA (as defined in the Revolving Credit Agreements)
1,580
1,388
1,369
Gearing ratio (Adjusted net debt to Adjusted EBITDA)
1.00:1
1.20:1
1.46:1
Maximum debt covenant ratio allowed per agreement
3.5:1
3.5:1
3.5:1
37
SUBSEQUENT EVENTS
Sale of South African assets - On 12 February 2020, AngloGold Ashanti announced that it has reached an agreement to
sell its remaining South African producing assets and related liabilities to Harmony Gold Mining Company Limited.
Consideration for the transaction is in cash and deferred payments with expected proceeds of around $300m, subject to
subsequent performance and with additional proceeds if the West Wits assets are developed below current infrastructure.
Refer to note 9.
sell its remaining South African producing assets and related liabilities to Harmony Gold Mining Company Limited.
Consideration for the transaction is in cash and deferred payments with expected proceeds of around $300m, subject to
subsequent performance and with additional proceeds if the West Wits assets are developed below current infrastructure.
Refer to note 9.
Dividend declaration - On 21 February 2020, the directors of AngloGold Ashanti declared a gross cash dividend per ordinary
share of 165 South African cents (assuming an exchange rate of ZAR 15/$, the gross dividend payable per ADS is equivalent
to ~11 US cents).
share of 165 South African cents (assuming an exchange rate of ZAR 15/$, the gross dividend payable per ADS is equivalent
to ~11 US cents).
PAGE 86
GROUP – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
37
SUBSEQUENT EVENTS CONTINUED
COVID-19 pandemic - At the date of approval of these consolidated annual financial statements, the SARS-CoV-2 virus
responsible for COVID-19 continues to spread across the globe, contributing to a sharp decline in global financial markets
and a significant decrease in global economic activity. On 11 March 2020, the COVID-19 outbreak was declared a global
pandemic by the World Health Organization and has since then resulted in numerous governments and companies, including
AngloGold Ashanti, introducing a variety of measures to contain the spread of the virus. To date, we have taken a number of
proactive steps to protect our employees, our host communities and business, in line with the company’s values, guidelines
and advice provided by the WHO and with the requirements of the countries in which we operate. The health and wellbeing
of our employees and our host communities remains a key priority. Cases of the outbreak have been reported in all of the
jurisdictions in which we operate, and it may lead to a prolonged restriction on the movement of people and continued
requirement for people to self-isolate or be quarantined.
responsible for COVID-19 continues to spread across the globe, contributing to a sharp decline in global financial markets
and a significant decrease in global economic activity. On 11 March 2020, the COVID-19 outbreak was declared a global
pandemic by the World Health Organization and has since then resulted in numerous governments and companies, including
AngloGold Ashanti, introducing a variety of measures to contain the spread of the virus. To date, we have taken a number of
proactive steps to protect our employees, our host communities and business, in line with the company’s values, guidelines
and advice provided by the WHO and with the requirements of the countries in which we operate. The health and wellbeing
of our employees and our host communities remains a key priority. Cases of the outbreak have been reported in all of the
jurisdictions in which we operate, and it may lead to a prolonged restriction on the movement of people and continued
requirement for people to self-isolate or be quarantined.
Any self-imposed or government-mandated temporary lockdowns may disrupt the company’s activities and operations and
even lead to a full or partial temporary suspension of the company’s mining operations in those jurisdictions. On 21 March
2020, following the Argentinian government’s decision to impose a nationwide lockdown (quarantine) until 31 March 2020,
including temporary travel restrictions, border closings and suspension of most industries, Cerro Vanguardia S.A. (CVSA)
was required to temporarily suspend mining activities.
even lead to a full or partial temporary suspension of the company’s mining operations in those jurisdictions. On 21 March
2020, following the Argentinian government’s decision to impose a nationwide lockdown (quarantine) until 31 March 2020,
including temporary travel restrictions, border closings and suspension of most industries, Cerro Vanguardia S.A. (CVSA)
was required to temporarily suspend mining activities.
On 23 March 2020, the South African government announced a 21-day nationwide lockdown, effective from midnight on 26
March 2020, resulting in the temporary suspension of mining activities of the company’s South African operations particularly
Mponeng, and the partial suspension of mining activities at Mine Waste Solutions (MWS) and Surface Operations.
March 2020, resulting in the temporary suspension of mining activities of the company’s South African operations particularly
Mponeng, and the partial suspension of mining activities at Mine Waste Solutions (MWS) and Surface Operations.
On 26 March 2020, the State of Goiás, in Brazil, extended a set of restrictions on the operation of non-essential business to
include mining. These restrictions are set to run through 4 April 2020. Mineração Serra Grande S.A. will temporarily suspend
its operations.
include mining. These restrictions are set to run through 4 April 2020. Mineração Serra Grande S.A. will temporarily suspend
its operations.
The current impact of all of the suspended operations is expected to be about 30,000oz to 40,000oz, or less than 2% of annual
production. In these countries, the suspension of mining activities will continue for the period during which the respective
restrictions remain in force.
production. In these countries, the suspension of mining activities will continue for the period during which the respective
restrictions remain in force.
While minimal operational disruptions have occurred at the company’s other operations to date, the company may experience
temporary disruptions in supply chain and logistics across its operations in the coming months should the pandemic be
prolonged. Such disruptions, which include restrictions in travel and border access, may impact the company’s ability to source
and transport goods and services required to operate mines and to transport gold doré to refineries. Furthermore, should
COVID-19 spread among the company’s workforce, it may lead to a full or partial temporary suspension of the company’s
operating mines in those affected areas.
temporary disruptions in supply chain and logistics across its operations in the coming months should the pandemic be
prolonged. Such disruptions, which include restrictions in travel and border access, may impact the company’s ability to source
and transport goods and services required to operate mines and to transport gold doré to refineries. Furthermore, should
COVID-19 spread among the company’s workforce, it may lead to a full or partial temporary suspension of the company’s
operating mines in those affected areas.
Given the uncertainties with respect to future developments, including duration, severity and scope of the COVID-19 pandemic
and the necessary government responses to limiting its spread, the board has decided to withdraw its market guidance for
2020 published as part of its preliminary condensed consolidated financial results on 21 February 2020, at this time.
and the necessary government responses to limiting its spread, the board has decided to withdraw its market guidance for
2020 published as part of its preliminary condensed consolidated financial results on 21 February 2020, at this time.
In anticipation of a prolonged negative impact from the COVID-19 pandemic, the company has drawn down $1.4bn on its US
Dollar RCF to cater for the $700m bond redemption due mid-April 2020 and to provide additional liquidity headroom. After the
drawdowns, cash on hand is about $1.8bn (excluding cash lock-up positions at Kibali and Sadiola, where AngloGold Ashanti’s
combined share totals about $300m).
Dollar RCF to cater for the $700m bond redemption due mid-April 2020 and to provide additional liquidity headroom. After the
drawdowns, cash on hand is about $1.8bn (excluding cash lock-up positions at Kibali and Sadiola, where AngloGold Ashanti’s
combined share totals about $300m).
Management will continue to take a prudent and proactive approach to managing the group’s liquidity, which may include
procuring additional credit facilities or debt over and above its current facilities.
procuring additional credit facilities or debt over and above its current facilities.
COMPANY – INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER
PAGE 87
The company annual financial statements represent the South African operations and corporate office.
These company annual financial statements are a statutory requirement and are accordingly presented in South African rands only.
The functional currency of the company is South African rands.
SA Rands millions
Notes
2019
2018
Restated
Continuing operations
Revenue
Revenue
1
62
46
Cost of sales
2
(35)
(32)
Gross profit (loss)
27
14
Corporate administration, marketing and other expenses
3
(763)
(222)
Exploration and evaluation costs
—
(1)
Impairment, derecognition of assets and profit (loss) on disposal
5
(33)
Other (expenses) income
4
(138)
(141)
Operating profit (loss)
(869)
(383)
Interest income
39
6
Dividends received
630
322
Impairment reversal on investment in associate
12
—
68
Net inter-company management fees and interest
110
259
Other gains (losses)
38
(210)
Finance costs and unwinding of obligations
5
(224)
(211)
Profit (loss) before taxation
(276)
(149)
Taxation
7
463
314
Profit (loss) for the period from continuing operations
187
165
Discontinued operations
Profit (loss) from discontinued operations
Profit (loss) from discontinued operations
18
(5,736)
(24)
Profit (loss) for the year
(5,549)
141
COMPANY – STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER
PAGE 88
SA Rands millions
Notes
2019
2018
Restated
Profit (loss) for the year
(5,549)
141
Items that will not be reclassified subsequently to profit or loss:
20
55
Net gain (loss) on equity investments
(11)
9
Actuarial gain (loss) recognised
22
34
67
Deferred taxation thereon
(3)
(21)
Other comprehensive income (loss) for the year, net of tax
20
55
Total comprehensive income (loss) for the year, net of tax
(5,529)
196
COMPANY – STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER
PAGE 89
SA Rands millions
Notes
2019
2018
ASSETS
Non-current assets
Tangible assets
Non-current assets
Tangible assets
9
36
8,961
Right of use assets
10
32
—
Intangible assets
11
10
9
Investment in associate
12
146
385
Investments in subsidiaries
13
42,315
43,162
Other investments
18
28
Inventories
16
—
8
Investment in Environmental Rehabilitation Trust Fund
14
—
294
Trade and other receivables
15
3
3
Deferred taxation asset
23
1,461
—
44,021
52,850
Current assets
Inventories
Inventories
16
76
462
Trade and other receivables
15
193
284
Intra-group balances
17
438
2,377
Cash and cash equivalents
173
105
880
3,228
Assets held for sale
18
4,701
—
5,581
3,228
Total assets
49,602
56,078
EQUITY AND LIABILITIES
Share capital and premium
Share capital and premium
19
51,931
51,538
Accumulated losses and other reserves
(12,352)
(6,282)
Total equity
39,579
45,256
Non-current liabilities
Borrowings
Borrowings
20
999
1,002
Lease liabilities
10
63
—
Environmental rehabilitation and other provisions
21
788
1,702
Provision for post-retirement benefits
22
1,308
1,344
Deferred taxation liability
23
—
512
3,158
4,560
Current liabilities
Borrowings
Borrowings
20
9
38
Lease liabilities
10
41
—
Trade and other payables
24
2,202
2,819
Intra-group balances
17
3,338
3,381
Taxation
25
19
24
5,609
6,262
Liabilities held for sale
18
1,256
—
6,865
6,262
Total liabilities
10,023
10,822
Total equity and liabilities
49,602
56,078
COMPANY – STATEMENT OF CASH FLOW
FOR THE YEAR ENDED 31 DECEMBER
PAGE 90
SA Rands millions
Notes
2019
2018
Restated
Cash flows from operating activities
Receipts from customers
Receipts from customers
900
510
Payments to suppliers and employees
(1,800)
(1,328)
Cash generated from (utilised by) operations
26
(900)
(818)
Net cash inflow (outflow) from operating activities from continuing operations
(900)
(818)
Net cash inflow (outflow) from operating activities from discontinued operations
859
(292)
Net cash inflow (outflow) from operating activities
(41)
(1,110)
Cash flows from investing activities
Capital expenditure
Capital expenditure
(1)
(5)
Expenditure on intangible assets
(1)
(4)
Dividends received
630
322
Associate loans repaid
238
131
Additional investment in subsidiaries
(224)
—
Repayment of intra-group loans advanced
567
548
Interest received
39
6
Net cash inflow (outflow) from investing activities from continuing operations
1,248
998
Net cash inflow (outflow) from investing activities from discontinued operations
(662)
2,368
Net cash inflow (outflow) from investing activities
586
3,366
Cash flows from financing activities
Proceeds from borrowings
Proceeds from borrowings
1,848
5,413
Repayment of borrowings
(1,748)
(7,260)
Repayment of lease liabilities
(33)
—
Finance costs paid
20
(135)
(145)
Lease finance cost
(12)
—
Dividends paid
8
(393)
(288)
Net cash inflow (outflow) from financing activities from continuing operations
(473)
(2,280)
Net cash inflow (outflow) from financing activities from discontinued operations
(4)
(6)
Net cash inflow (outflow) from financing activities
(477)
(2,286)
Net increase (decrease) in cash and cash equivalents
68
(30)
Cash and cash equivalents at beginning of year
105
135
Cash and cash equivalents at end of year
173
105
COMPANY – STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER
PAGE 91
Balance at 31 December 2017
51,041
1,056
(6,913)
1
(112)
45,073
Profit (loss) for the year
141
141
Other comprehensive income (loss)
9
46
55
Total comprehensive income (loss)
—
—
141
9
46
196
Shares issued
497
497
Share-based payments for share awards net of exercised
(222)
(222)
Dividends paid (note 8)
(288)
(288)
Balance at 31 December 2018
51,538
834
(7,060)
10
(66)
45,256
Profit (loss) for the year
Other comprehensive income (loss)
(5,549)
(5,549)
(11)
31
20
Total comprehensive income (loss)
—
—
(5,549)
(11)
31
(5,529)
Shares issued
393
393
Share-based payments for share awards net of exercised
(148)
(148)
Dividends paid (note 8)
(393)
(393)
Balance at 31 December 2019
51,931
686
(13,002)
(1)
(35)
39,579
(1)
Other capital reserves comprise a surplus on disposal of company shares held by companies prior to the formation of AngloGold Ashanti Limited
of R141m (2018: R141m) and equity items for share-based payments of R545m (2018: R693m).
Total
equity
Actuarial
gains
(losses)
Fair value
through
OCI
Retained
earnings
(accumulated
losses)
Other
capital
reserves
(1)
Share
capital
and
premium
SA Rands millions
COMPANY – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 92
1
REVENUE
Revenue - Group services
62
46
2
COST OF SALES
Cash operating costs
Total cash costs
Amortisation of tangible and intangible assets (note 26)
Amortisation of right of use assets
Total cash costs
Amortisation of tangible and intangible assets (note 26)
Amortisation of right of use assets
(1)
(notes 10 and 26)
(1)
Amortisation relating to right of use assets as recognised in accordance with IFRS 16 Leases
3
CORPORATE ADMINISTRATION, MARKETING AND OTHER EXPENSES
Corporate administration expenses
Share scheme and related costs
Share scheme and related costs
4
OTHER EXPENSES (INCOME)
(1)
Pension and medical defined benefit provisions
Royalties received
Retrenchment and related costs
Legal fees and project costs
Royalties received
Retrenchment and related costs
Legal fees and project costs
(1)
Change in disclosure from prior years. Refer note 31.
5
FINANCE COSTS AND UNWINDING OF OBLIGATIONS
Finance costs
Lease finance costs
Finance costs on corporate notes, bank loans and other
Other finance costs and amortisation of fees
Lease finance costs
Finance costs on corporate notes, bank loans and other
Other finance costs and amortisation of fees
Unwinding of obligations
Total finance costs and unwinding of obligations (note 26)
Total finance costs and unwinding of obligations (note 26)
6
EMPLOYEE BENEFITS
Employee benefits including Executive Directors' and Prescribed Officers' salaries and other
benefits
benefits
3,259
3,846
Health care and medical scheme costs
current medical expenses
179
292
defined benefit post-retirement medical expenses
118
123
Pension and provident plan costs
defined contribution
212
280
Retrenchment costs
33
336
Share-based payment expense
(1)
334
281
Included in cost of sales, other expenses (income) and corporate administration, marketing
and other expenses
and other expenses
4,135
5,158
Refer to group note 33 for details of Directors' and Prescribed Officers' emoluments.
(1)
Details of the equity-settled share-based payment arrangements of the group have been disclosed in group note 11. These arrangements consist
of awards by the company to employees of various group companies. The income statement expense of R334m (2018: R281m) for the company
is only in respect of awards made to employees of the company.
is only in respect of awards made to employees of the company.
2018
2019
SA Rands millions
—
(7)
—
(7)
21
39
14
—
35
32
537
226
226
61
161
763
222
118
123
(46)
(35)
22
21
44
32
138
141
12
16
136
119
3
5
151
140
73
71
224
211
COMPANY – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 93
7
TAXATION
Current taxation (note 25)
Prior year under (over) provision
Prior year under (over) provision
Deferred taxation
Other temporary differences
Change in estimated deferred tax rate
Change in estimated deferred tax rate
(2)
Reconciliation to South African statutory rate
Implied tax credit at statutory tax rate of 28%
(1)
Increase (decrease) due to:
Expenses not tax deductible
Expenses not tax deductible
(2)
Impairment reversal on investment in associate
Rate adjustment to reflect the actual realised company tax rate
Non taxable dividend income
Guarantee fees
Tax effect of retained SA items
Change in planned utilisation of deferred tax assets and impact of estimated deferred tax rate
change
Rate adjustment to reflect the actual realised company tax rate
Non taxable dividend income
Guarantee fees
Tax effect of retained SA items
Change in planned utilisation of deferred tax assets and impact of estimated deferred tax rate
change
(3)
Tax allowances
Adjustments in respect of prior years
Income tax per income statement
Adjustments in respect of prior years
Income tax per income statement
(1)
The South African statutory rates are as follows: Non-
mining statutory tax rate 28% (2018: 28%); and
Maximum statutory mining tax rate 34% (2018: 34%).
Maximum statutory mining tax rate 34% (2018: 34%).
(2)
Includes corporate and other costs, and transfer pricing.
(3)
The mining operations are taxed on a variable rate that increases as profitability increases. The tax rate used to calculate deferred tax is based on
the company's current estimate of future profitability when temporary differences will reverse. Depending on the profitability of the operations, the
tax rate can consequently be significantly different from year to year.
tax rate can consequently be significantly different from year to year.
8
DIVIDENDS
Ordinary shares
Dividend number 119 of 70 SA cents per share was declared on 20 February 2018
and paid on 6 April 2018.
Dividend number 120 of 95 SA cents per share was declared on 19 February 2019
and paid on 8 April 2019.
Dividend number 119 of 70 SA cents per share was declared on 20 February 2018
and paid on 6 April 2018.
Dividend number 120 of 95 SA cents per share was declared on 19 February 2019
and paid on 8 April 2019.
393
288
393
288
2018
2019
SA Rands millions
(5)
(16)
(260)
(397)
(198)
99
(458)
(298)
(463)
(314)
(77)
(42)
9
50
—
(19)
1
—
(177)
(82)
(62)
(174)
47
(130)
(198)
99
(1)
—
(5)
(16)
(463)
(314)
COMPANY – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 94
9
TANGIBLE ASSETS
SA Rands millions
Mine
Mine
Mineral
development
costs
infra-
structure
rights and
dumps
Assets under
construction
Land and
buildings
(2)
Total
Cost
Balance at 1 January 2018
8,483
3,021
69
2,664
263
14,500
Additions
project capital
—
—
—
61
—
61
stay-in-business capital
550
91
—
49
—
690
Disposals —
—
—
—
(40)
(40)
Transfers and other movements
(1)
(574)
(426)
—
(58)
—
(1,058)
Balance at 31 December 2018
8,459
2,686
69
2,716
223
14,153
Accumulated amortisation and
impairments
Balance at 1 January 2018
3,625
1,526
44
—
181
5,376
Amortisation for the year
609
173
1
—
16
799
Disposals —
—
—
—
(29)
(29)
Impairment and derecognition of assets
(3)
—
86
—
—
—
86
Transfers and other movements
(1)
(578)
(462)
—
—
—
(1,040)
Balance at 31 December 2018
3,656
1,323
45
—
168
5,192
Net book value at 31 December 2018
4,803
1,363
24
2,716
55
8,961
Cost
Balance at 1 January 2019
Balance at 1 January 2019
8,459
2,686
69
2,716
223
14,153
Additions
project capital
—
—
—
38
—
38
stay-in-business capital
546
91
—
69
3
709
Transfer to assets and liabilities held for
sale
(9,502)
(3,067)
(69)
(1,231)
(12)
(13,881)
Transfers and other movements
(1)
497
477
—
(1,592)
(214)
(832)
Balance at 31 December 2019
—
187
—
—
—
187
Accumulated amortisation and
impairments
Balance at 1 January 2019
impairments
Balance at 1 January 2019
3,656
1,323
45
—
168
5,192
Amortisation for the year
528
197
1
—
—
726
Impairment and derecognition of assets
(3)
3,466
1,091
—
1,231
—
5,788
Transfer to assets and liabilities held for
sale
(7,105)
(2,376)
(46)
(1,231)
—
(10,758)
Transfers and other movements
(1)
(545)
(84)
—
—
(168)
(797)
Balance at 31 December 2019
—
151
—
—
—
151
Net book value at 31 December 2019
—
36
—
—
—
36
(1)
Transfers and other movements include amounts from change in estimates of decommissioning assets, asset reclassifications
and derecognition of assets.
(2)
Included in the amounts for land and buildings are assets held under finance leases with a net book value of nil (2018: R46m).
(3)
Impairment and derecognition of assets include the following:
For the impairment calculation assumptions as well as further detail on the impairment of the South African cash generating
units, as at 31 December 2019, refer group note 15 on tangible assets.
units, as at 31 December 2019, refer group note 15 on tangible assets.
For the year ended 31 December, the following impairments and derecognition of tangible assets were recognised:
SA Rands millions
2019
2018
Mponeng
5,534
65
Other
2
—
Surface Operations
252
21
5,788
86
COMPANY – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 95
10 RIGHT OF USE ASSETS AND LEASE LIABILITIES
SA Rands millions
Land and
buildings
(1)
Cost
Impact of adopting IFRS 16 - 1 January 2019
Impact of adopting IFRS 16 - 1 January 2019
—
Additions
project capital
—
stay-in-business capital
—
Transfer to non-current assets and liabilities held for sale
—
Disposals
—
Transfers and other movements
(1)
214
Balance at 31 December 2019
214
Accumulated amortisation and impairments
Impact of adopting IFRS 16 - 1 January 2019
Impact of adopting IFRS 16 - 1 January 2019
—
Amortisation for the year (note 2)
14
Disposals
—
Impairment and derecognition of assets
—
Transfer to non-current assets and liabilities held for sale
—
Transfers and other movements
(1)
168
Balance at 31 December 2019
182
Net book value at 31 December 2019
32
(1)
Relates to contracts previously classified as leases under IAS 17 which the company has reassessed upon initial transition as leases
under IFRS 16 as of January 2019.
Amounts recognised in the income statement
SA Rands
millions
Amortisation expense on right of use assets (note 2)
14
Interest expense on lease liabilities
12
Expenses on short term leases
1
Expenses on variable lease payments not included in the lease liabilities
115
Expenses on leases of low value assets
33
These expenses are allocated to cost of sales and corporate, administration and other costs.
Total cash outflow for leases during the period amounted to R45m, consisting of repayments of liabilities of R33m and finance
costs paid of R12m.
costs paid of R12m.
Lease liability reconciliation
SA Rands
millions
Balance at 1 January 2019
—
Lease liability recognised
—
Repayment of lease liabilities
(33)
Finance costs paid on lease liabilities
(12)
Interest charged to the income statement
12
Reclassification of finance leases from borrowings
137
Balance at 31 December 2019
104
SA Rands millions
2019
Lease liabilities
Non-current
Non-current
63
Current
41
Total
104
Maturity analysis of lease liabilities
SA Rands
millions
Undiscounted cash flows
Less than and including 1 year
Less than and including 1 year
49
Between 1 and 5 years
67
Five years and more
—
Total
116
The company does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored within
the company’s treasury function.
the company’s treasury function.
All lease contracts contain market review clauses in the event that AngloGold Ashanti exercises its option to renew.
The weighted average incremental borrowing rate at the date of initial application is 9.84%.
COMPANY �� NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 96
The fund is managed by Ashburton Investments and invested mainly in equities, government
bonds and other fixed-term deposits. The fair value of the Environmental Trust Fund is
R1,156m (2018: R1,074m).
bonds and other fixed-term deposits. The fair value of the Environmental Trust Fund is
R1,156m (2018: R1,074m).
(1)
294
—
11
INTANGIBLE ASSETS
Software and licences
Cost
Balance at beginning of year
Additions
Derecognition of assets
Transfer to assets and liabilities held for sale
Balance at end of year
Cost
Balance at beginning of year
Additions
Derecognition of assets
Transfer to assets and liabilities held for sale
Balance at end of year
Accumulated amortisation and impairment
Balance at beginning of year
Amortisation for the year
Impairment and derecognition of assets
Transfer to assets and liabilities held for sale
Balance at end of year
Balance at beginning of year
Amortisation for the year
Impairment and derecognition of assets
Transfer to assets and liabilities held for sale
Balance at end of year
Net book value at end of year
12
INVESTMENT IN ASSOCIATE
Carrying value of investment in associate
Investment in associate
Investment in associate
385
Investment in associate comprises:
Carrying value
Name Effective
%
Description
(SA Rands
millions)
2019
2018
2019
2018
Unlisted associate
Rand Refinery (Pty) Limited
Rand Refinery (Pty) Limited
42.4
42.4
Smelting and refining of gold
146
385
Impairment reversal
—
68
Rand Refinery (Pty) Limited redeemed R239m (2018: R131m) of the preference shares. During 2018, an impairment reversal
of R68m was recognised through profit and loss.
of R68m was recognised through profit and loss.
13
INVESTMENT IN SUBSIDIARIES
Shares at cost:
Advanced Mining Software Limited
AGRe Insurance Company Limited
AngloGold Ashanti Holdings plc
AngloGold Ashanti USA Incorporated
Eastvaal Gold Holdings Limited
First Uranium (Pty) Limited
Advanced Mining Software Limited
AGRe Insurance Company Limited
AngloGold Ashanti Holdings plc
AngloGold Ashanti USA Incorporated
Eastvaal Gold Holdings Limited
First Uranium (Pty) Limited
14
INVESTMENT IN ENVIRONMENTAL REHABILITATION TRUST FUND
(1)
The investment in Environmental Rehabilitation Trust Fund has been transferred to assets held for sale.
2018
2019
SA Rands millions
146
501
500
1
4
—
(3)
(381)
—
121
501
492
492
—
4
—
(4)
(381)
—
111
492
10
9
2
2
149
149
40,074
40,074
1,173
949
917
917
—
1,071
42,315
43,162
COMPANY – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 97
15
TRADE AND OTHER RECEIVABLES
Non-current
Other receivables and deferred loan fees
Current
Trade receivables
Prepayments and accrued income
Recoverable tax, rebates, levies and duties
Other receivables
Other receivables and deferred loan fees
Current
Trade receivables
Prepayments and accrued income
Recoverable tax, rebates, levies and duties
Other receivables
Total trade and other receivables
16
INVENTORIES
Non-current
Raw materials - ore stockpiles
Current
Raw materials
Raw materials - ore stockpiles
Current
Raw materials
- ore stockpiles
Work in progress
- metals in process
Finished goods
- gold doré/bullion
Total metal inventories
Mine operating supplies
Mine operating supplies
Total inventories
(1)
(1)
The amount of the write-down of metals in process and by-products to net realisable value, and recognised as an expense is nil (2018: R7m).
17
INTRA-GROUP BALANCES
Intra-group receivables
AngloGold Ashanti Australia Limited
AngloGold Ashanti Australia Limited
74
71
AngloGold Ashanti Colombia S.A.
42
42
AngloGold Ashanti Córrego do Sitío Mineração S.A.
20
20
AngloGold Ashanti (Ghana) Limited
34
27
AngloGold Ashanti Holdings plc
1
201
AngloGold Ashanti (Iduapriem) Limited
18
14
AngloGold Ashanti Mali Holdings
—
45
AngloGold Ashanti North America Inc
40
27
Cerro Vanguardia S.A.
28
21
Chemwes (Pty) Limited
(1)
—
1,692
Geita Gold Mining Limited
48
25
Mineração Serra Grande S.A.
7
8
Covalent Water Company (Pty) Limited
(1)
—
167
Société Ashanti Goldfields de Guinée S.A.
124
17
AGRe Insurance Company
2
—
438
2,377
Intra-group payables
Advanced Mining Software Limited
Advanced Mining Software Limited
9
9
AngloGold Ashanti Australia Limited
5
4
AngloGold Ashanti Colombia S.A.
2
1
AngloGold Ashanti (Ghana) Limited
2
2
AngloGold Ashanti Health (Pty) Limited
13
11
AngloGold Ashanti Holdings plc
1,068
1,097
AngloGold Ashanti North America Inc
—
7
AngloGold South America Limited
411
422
Eastvaal Gold Holdings Limited
1,828
1,828
3,338
3,381
Included in the statement of financial position as follows:
Current assets (note 29)
Current assets (note 29)
438
2,377
Current liabilities (note 29)
(3,338)
(3,381)
(2,900)
(1,004)
Intra-group balances are interest free and are payable on demand.
(1)
Transferred to assets held for sale
2018
2019
SA Rands millions
3
3
82
136
57
53
43
88
11
7
193
284
196
287
—
8
—
28
—
93
—
21
—
142
76
320
76
462
76
470
COMPANY – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 98
18
DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES HELD FOR SALE
South African asset sale
On 12 February 2020, AngloGold Ashanti announced that it has reached an agreement to sell its remaining South African
producing assets and related liabilities to Harmony Gold Mining Company Limited. For details, refer to group note 9 on
discontinued operations and assets and liabilities held for sale.
producing assets and related liabilities to Harmony Gold Mining Company Limited. For details, refer to group note 9 on
discontinued operations and assets and liabilities held for sale.
In terms of the transaction the silicosis obligation of R904m and the post-retirement medical obligation of R1,308m relating to
South African employees are retained by AngloGold Ashanti.
South African employees are retained by AngloGold Ashanti.
SA Rands millions
2019
2018
DISCONTINUED OPERATIONS
Revenue from product sales
6,305
6,506
Cost of sales
(5,431)
(6,399)
Gain (loss) on non-hedge derivatives and other commodity contracts
24
(51)
Gross profit (loss)
898
56
Other expenses
(706)
(940)
Derecognition of assets, impairments and profit on disposal of assets
(49)
144
Impairment loss recognised on remeasurement to fair value less costs to sell
(7,396)
—
(Loss) profit before taxation
(7,253)
(740)
Normal and deferred taxation on operations
(261)
467
Deferred tax on impairment loss, derecognition and profit on disposal of assets
1,778
249
(Loss) profit from discontinued operations
(5,736)
(24)
The major classes of assets and liabilities of the South African disposal group as at 31 December 2019, are as follows:
SA Rands millions
2019
Tangible assets
3,123
Investment in First Uranium (Pty) Ltd including intra-group balance
820
Inventories
427
Investment in Environmental Rehabilitation Trust Fund
294
Other intra-group balances
37
Assets held for sale
4,701
Environmental rehabilitation and other provisions
897
Trade, other payables and provisions
359
Liabilities held for sale
1,256
Net assets held for sale
3,445
19
SHARE CAPITAL AND PREMIUM
SA Rands millions
2019
2018
Share capital
Authorised
600,000,000 ordinary shares of 25 SA cents each
Authorised
600,000,000 ordinary shares of 25 SA cents each
150
150
2,000,000 A redeemable preference shares of 50 SA cents each
1
1
5,000,000 B redeemable preference shares of 1 SA cent each
—
—
30,000,000 C redeemable preference shares of no par value
—
—
151
151
Issued and fully paid
415,301,215 (2018: 412,769,980) ordinary shares of 25 SA cents each
415,301,215 (2018: 412,769,980) ordinary shares of 25 SA cents each
103
102
2,000,000 A redeemable preference shares of 50 SA cents each
1
1
778,896 B redeemable preference shares of 1 SA cent each
—
—
104
103
Share premium
Balance at beginning of year
Balance at beginning of year
51,435
50,938
Ordinary shares issued
392
497
Balance at end of year
51,827
51,435
Share capital and premium
51,931
51,538
The rights and restrictions applicable to the A, B and C redeemable preference shares are detailed in group note 25.
COMPANY – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 99
20
BORROWINGS
Unsecured
Syndicated revolving credit facility (R1.4bn)
Interest charged at JIBAR plus 1.65% per annum. The facility was issued on 7 July 2015 and
is available until 7 July 2020. The facility was cancelled on 19 February 2020.
Interest charged at JIBAR plus 1.65% per annum. The facility was issued on 7 July 2015 and
is available until 7 July 2020. The facility was cancelled on 19 February 2020.
Revolving credit facility (R1bn)
Interest charged at JIBAR plus 1.3% per annum. The facility was issued on 3 November 2017
and is available until 3 November 2022.
Interest charged at JIBAR plus 1.3% per annum. The facility was issued on 3 November 2017
and is available until 3 November 2022.
The loans are subject to debt covenant arrangements for which no default event occurred.
Secured
Finance Lease
Finance Lease
(1)
Turbine Square Two (Pty) Limited
The lease is capitalised at an implied interest rate of 9.8% per annum. Lease payments are
due in monthly instalments terminating in March 2022 and are SA rand -based. The building
financed is used as security for this loan.
The lease is capitalised at an implied interest rate of 9.8% per annum. Lease payments are
due in monthly instalments terminating in March 2022 and are SA rand -based. The building
financed is used as security for this loan.
Total non-current borrowings including current portion
Current portion of non-current borrowings included in current liabilities
Total non-current borrowings
Current portion of non-current borrowings included in current liabilities
Total non-current borrowings
Current portion of non-current borrowings included above
Unsecured
FirstRand Bank Limited demand facility
Total current borrowings
FirstRand Bank Limited demand facility
Total current borrowings
Total borrowings
Amounts falling due
Within one year
Between two and five years
Within one year
Between two and five years
Undrawn facilities
Undrawn borrowing facilities as at 31 December are as follows:
Syndicated revolving credit facility (R2.5bn) - SA rand
Syndicated revolving credit facility (R1.4bn) - SA rand
Syndicated revolving credit facility (R1bn) - SA rand
FirstRand Bank Limited (R750m) - SA rand
Undrawn borrowing facilities as at 31 December are as follows:
Syndicated revolving credit facility (R2.5bn) - SA rand
Syndicated revolving credit facility (R1.4bn) - SA rand
Syndicated revolving credit facility (R1bn) - SA rand
FirstRand Bank Limited (R750m) - SA rand
(1)
Finance leases were transferred to lease liabilities with effect 1 January 2019. Refer note 10.
Change in liabilities arising from financing activities:
Reconciliation of total borrowings
A reconciliation of the total borrowings included in the statement of financial position is set out
in the following table:
Opening balance
Proceeds from borrowings
Repayment of borrowings
Repayment of interest
Interest charged to income statement
Reclassification of finance lease to lease liabilities
Deferred loan fees
Closing balance
Reconciliation of total borrowings
A reconciliation of the total borrowings included in the statement of financial position is set out
in the following table:
Opening balance
Proceeds from borrowings
Repayment of borrowings
Repayment of interest
Interest charged to income statement
Reclassification of finance lease to lease liabilities
Deferred loan fees
Closing balance
Reconciliation of finance costs paid:
A reconciliation of the finance cost paid included in the statement of cash flows is set out in
the following table:
Interest paid on borrowings
Commitment fees, utilisation fees and other borrowing costs
Total finance costs paid
A reconciliation of the finance cost paid included in the statement of cash flows is set out in
the following table:
Interest paid on borrowings
Commitment fees, utilisation fees and other borrowing costs
Total finance costs paid
2018
2019
SA Rands millions
—
402
1,008
500
136
1,008
1,038
(9)
(36)
999
1,002
9
36
—
2
9
38
1,008
1,040
9
38
999
1,002
1,008
1,040
2,500
2,500
1,400
1,000
—
500
750
750
4,650
4,750
1,040
2,895
1,848
5,413
(1,748)
(7,260)
(103)
(109)
105
100
(136)
2
1
1,008
1,040
103
109
32
36
135
145
COMPANY – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 100
21
ENVIRONMENTAL REHABILITATION AND OTHER PROVISIONS
Provision for decommissioning
Balance at beginning of year
Change in estimates
Balance at beginning of year
Change in estimates
(1)
Transfer to assets and liabilities held for sale
Utilised during the year
Unwinding of decommissioning obligation
Balance at end of year
Utilised during the year
Unwinding of decommissioning obligation
Balance at end of year
Provision for restoration
Balance at beginning of year
Change in estimates
Balance at beginning of year
Change in estimates
(1)
Transfer to assets and liabilities held for sale
Unwinding of restoration obligation
Balance at end of year
Unwinding of restoration obligation
Balance at end of year
Other provisions
(2)
Balance at beginning of year
Charge to income statement
Change in estimates
Transfer to trade and other payables
Transfer to assets and liabilities held for sale
Utilised during the year
Unwinding of other provisions
Balance at end of year
Charge to income statement
Change in estimates
Transfer to trade and other payables
Transfer to assets and liabilities held for sale
Utilised during the year
Unwinding of other provisions
Balance at end of year
Total environmental rehabilitation and other provisions
(1)
The change in estimates is attributable to changes in discount rates due to changes in global economic assumptions and changes in mine plans
resulting in a change in cash flows.
(2)
Included in other provisions is the provision for settlement of silicosis class action litigation.
22
PROVISION FOR POST-RETIREMENT BENEFITS
The retirement schemes consist of the following:
Post-retirement medical scheme for AngloGold Ashanti's South African employees
Post-retirement medical scheme for AngloGold Ashanti's South African employees
1,308
1,344
Post-retirement medical scheme for AngloGold Ashanti's South African employees
The provision for post-retirement medical funding represents the provision for health care
benefits for employees and retired employees and their registered dependants.
The post-retirement benefit costs are assessed in accordance with the advice of independent
professionally qualified actuaries. The actuarial method used is the projected unit credit funding
method. This scheme is unfunded. The last valuation was performed as at 31 December 2019.
benefits for employees and retired employees and their registered dependants.
The post-retirement benefit costs are assessed in accordance with the advice of independent
professionally qualified actuaries. The actuarial method used is the projected unit credit funding
method. This scheme is unfunded. The last valuation was performed as at 31 December 2019.
Information with respect to the defined benefit liability is as follows:
Benefit obligation
Balance at beginning of year
Benefit obligation
Balance at beginning of year
1,344
1,421
Current service cost
2
3
Interest cost
116
120
Benefits paid
(120)
(133)
Actuarial gain
(34)
(67)
Balance at end of year
1,308
1,344
Components of net periodic benefit cost
Current service cost
Current service cost
2
3
Interest cost
116
120
Net periodic benefit cost
118
123
Assumptions
Assumptions used to determine benefit obligations at the end of the year are as follows:
Discount rate
Assumptions used to determine benefit obligations at the end of the year are as follows:
Discount rate
9.15%
9.57%
Expected increase in health care costs
7.25%
7.35%
Assumed health care cost trend rates at 31 December:
Health care cost trend assumed for next year
Health care cost trend assumed for next year
7.25%
7.35%
Rate to which the cost trend is assumed to decline (the ultimate trend rate)
7.25%
7.35%
2018
2019
SA Rands millions
666
676
28
(52)
(736)
—
(17)
(18)
59
60
—
666
130
127
23
(8)
(161)
—
11
11
3
130
906
934
244
175
(12)
45
(391)
(270)
(35)
—
—
(48)
73
70
785
906
788
1,702
COMPANY – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 101
SA Rands millions
2019
2018
22
PROVISION FOR POST-RETIREMENT BENEFITS CONTINUED
Post-retirement medical scheme for AngloGold Ashanti's South African employees
CONTINUED
Assumed health care cost trend rates have a significant effect on the amounts reported for
health care plans. A 1% point change in assumed health care cost trend rates would have the
following effect:
health care plans. A 1% point change in assumed health care cost trend rates would have the
following effect:
Effect on total service and interest cost - 1% point increase
9
11
Effect on post-retirement benefit obligation - 1% point increase
99
107
Effect on total service and interest cost - 1% point decrease
(8)
(10)
Effect on post-retirement benefit obligation - 1% point decrease
(87)
(94)
Cash flows
Contributions
The company expects to contribute R122m to the post-retirement medical plan in 2020.
Contributions
The company expects to contribute R122m to the post-retirement medical plan in 2020.
Estimated future benefit payments
The following medical benefit payments, which reflect the expected future service, as
appropriate, are expected to be paid:
2020
The following medical benefit payments, which reflect the expected future service, as
appropriate, are expected to be paid:
2020
122
2021
126
2022
129
2023
131
2024
134
Thereafter
666
23
DEFERRED TAXATION
Deferred taxation
Deferred taxation relating to temporary differences is made up as follows:
Liabilities
Liabilities
Tangible assets (owned)
Right-of-use assets
Prepayments
Right-of-use assets
Prepayments
Assets
Provisions
Lease liabilities
Tax losses
Derivatives
Other
Lease liabilities
Tax losses
Derivatives
Other
Net deferred taxation (asset) liability
The movement on the deferred tax balance is as follows:
Balance at beginning of year
Taxation on items included in income statement from continuing and discontinued operations
Taxation on items included in other comprehensive income
Balance at end of year
Balance at beginning of year
Taxation on items included in income statement from continuing and discontinued operations
Taxation on items included in other comprehensive income
Balance at end of year
24
TRADE AND OTHER PAYABLES
Trade payables
477
599
Accruals, financial guarantees and other
(1)
1,488
2,169
Short-term provisions
237
—
Derivatives (note 29)
—
51
2,202
2,819
Trade and other payables are non-interest bearing and are normally settled within 60 days.
(1)
Includes accruals for silicosis and retrenchments of R151m (2018: R233m) and nil (2018: R9m) respectively.
—
1,579
9
—
7
2
16
1,581
1,017
876
29
—
372
179
—
14
59
—
1,477
1,069
(1,461)
512
512
508
(1,976)
(17)
3
21
(1,461)
512
COMPANY – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 102
25
TAXATION
Balance at beginning of year
Refunds during the year
Taxation of items included in income statement (note 7)
Balance at end of year
Refunds during the year
Taxation of items included in income statement (note 7)
Balance at end of year
26
CASH GENERATED FROM (UTILISED BY) OPERATIONS
Profit (loss) before taxation
Adjusted for:
Amortisation of tangible assets (note 2)
Amortisation of right of use assets (note 2)
Finance costs and unwinding of obligations (note 5)
Environmental, rehabilitation and other expenditure
Impairment, derecognition of assets and profit / loss on disposal
Other expenses (income)
Impairment reversal on investment in associate
Interest income
Dividends received
Foreign currency translation on intergroup loans
Other non-cash movements
Movements in working capital
Adjusted for:
Amortisation of tangible assets (note 2)
Amortisation of right of use assets (note 2)
Finance costs and unwinding of obligations (note 5)
Environmental, rehabilitation and other expenditure
Impairment, derecognition of assets and profit / loss on disposal
Other expenses (income)
Impairment reversal on investment in associate
Interest income
Dividends received
Foreign currency translation on intergroup loans
Other non-cash movements
Movements in working capital
Movements in working capital:
(Increase) decrease in inventories
(Increase) decrease in trade and other receivables
Increase (decrease) in trade and other payables
(Increase) decrease in inventories
(Increase) decrease in trade and other receivables
Increase (decrease) in trade and other payables
27
RELATED PARTIES
Material related party transactions were as follows:
Sales and services rendered to related parties
Subsidiaries
Subsidiaries
(1)
3,081
2,778
Purchases and services acquired from related parties
Subsidiaries
Subsidiaries
(1)
188
566
Outstanding balances arising from sale of goods and services due by related parties
Subsidiaries
Subsidiaries
438
2,377
Outstanding balances arising from purchases of goods and services and other loans
owed to related parties
Subsidiaries
Subsidiaries
3,338
3,381
Investment in Environmental Rehabilitation Trust Fund
(2)
—
294
Amounts owed to/due by related parties above are unsecured and non-interest bearing.
In 2019, AngloGold Ashanti received a dividend of R406m from AngloGold Ashanti Holdings
plc (2018: 294m).
Management fees, royalties, interest and net dividends from subsidiaries amounts to R2m
(2018: R1m).
Details of guarantees to related parties are included in note 28.
Refer to page 117 for the list of principal subsidiaries and operating entities.
Directors and other key management personnel
Details relating to directors' and prescribed officers' emoluments and shareholdings in the
company are disclosed in group note 33.
(1)
Includes VAT where applicable.
(2)
Transferred to assets held for sale.
2018
2019
SA Rands millions
24
37
—
3
(5)
(16)
19
24
(276)
(149)
21
39
14
—
224
211
(286)
(118)
(5)
30
118
123
—
(68)
(39)
(6)
(630)
(322)
(37)
208
49
(451)
(53)
(315)
(900)
(818)
(30)
—
62
(38)
(85)
(277)
(53)
(315)
COMPANY – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 103
28
CONTRACTUAL COMMITMENTS AND CONTINGENCIES
Capital commitments
Acquisition of tangible assets
Contracted for
Not contracted for
Acquisition of tangible assets
Contracted for
Not contracted for
93
734
110
1,182
Authorised by the directors
827
1,292
Allocated to:
Project capital
Project capital
- within one year
29
135
- thereafter
—
34
29
169
Stay-in-business capital
- within one year
537
958
- thereafter
261
165
798
1,123
Purchase obligations
Contracted for
Contracted for
- within one year
78
183
Purchase obligations represent contractual obligations for the purchase of mining contract services, supplies, consumables,
inventories, explosives and activated carbon.
inventories, explosives and activated carbon.
To service these capital commitments, purchase obligations and other operational requirements, the company is dependent
on existing cash resources, cash generated from operations and borrowing facilities.
on existing cash resources, cash generated from operations and borrowing facilities.
Cash generated from operations is subject to operational, market and other risks. Distributions from operations may be
subject to foreign investment, exchange control laws and regulations and the quantity of foreign exchange available in offshore
countries. In addition, distributions from joint ventures are subject to the relevant board approval.
subject to foreign investment, exchange control laws and regulations and the quantity of foreign exchange available in offshore
countries. In addition, distributions from joint ventures are subject to the relevant board approval.
The credit facilities and other finance arrangements contain financial covenants and other similar undertakings. To the extent
that external borrowings are required, the company's covenant performance indicates that existing financing facilities will be
available to meet the commitments detailed above. To the extent that any of the financing facilities mature in the near future,
the company believes that sufficient measures are in place to ensure that these facilities can be refinanced.
that external borrowings are required, the company's covenant performance indicates that existing financing facilities will be
available to meet the commitments detailed above. To the extent that any of the financing facilities mature in the near future,
the company believes that sufficient measures are in place to ensure that these facilities can be refinanced.
Contingencies
Contingent liabilities
Groundwater pollution
Groundwater pollution
(1)
—
—
Deep groundwater pollution
(2)
—
—
Contingent asset
Royalty - Tau Lekoa Gold Mine
Royalty - Tau Lekoa Gold Mine
(3)
—
—
Guarantees
Financial guarantees
Rated bonds
Financial guarantees
Rated bonds
(4)
24,489
25,107
Revolving credit facilities - $100m
(5)
1,435
Performance guarantee
Mine Waste Solutions
Mine Waste Solutions
(6)
—
—
24,489
26,542
Contingent liabilities
(1)
Groundwater pollution - The company has identified groundwater contamination plumes at its South African 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 improvements in some instances. Furthermore, literature reviews,
field trials and base line modelling techniques suggest, but have not yet proven, that the use of phyto-technologies can address
the soil and groundwater contamination at all South African operations. Subject to the completion of trials and the technology
being a proven remediation technique, no reliable estimate can be made for the obligation.
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 improvements in some instances. Furthermore, literature reviews,
field trials and base line modelling techniques suggest, but have not yet proven, that the use of phyto-technologies can address
the soil and groundwater contamination at all South African operations. Subject to the completion of trials and the technology
being a proven remediation technique, no reliable estimate can be made for the obligation.
2018
2019
SA Rands millions
COMPANY – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 104
28
CONTRACTUAL COMMITMENTS AND CONTINGENCIES CONTINUED
Contingent liabilities CONTINUED
(2)
Deep groundwater pollution - The company has identified potential water ingress and future pollution risk posed by deep
groundwater in certain underground mining areas in South Africa. Various studies have been undertaken by AngloGold Ashanti
since 1999 to understand this potential risk. 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 Mineral and Petroleum Resources
Development Act (MPRDA) requires that the affected mining companies develop a Regional Mine Closure Strategy to be
approved by the Department of Mineral Resources. In view of the limitation of current information for the accurate estimation of a
liability, no reliable estimate can be made for the obligation.
since 1999 to understand this potential risk. 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 Mineral and Petroleum Resources
Development Act (MPRDA) requires that the affected mining companies develop a Regional Mine Closure Strategy to be
approved by the Department of Mineral Resources. In view of the limitation of current information for the accurate estimation of a
liability, no reliable estimate can be made for the obligation.
Contingent asset
(3)
Royalty - As a result of the sale of the interest in the Tau Lekoa Gold Mine during 2010, the company is entitled to receive a
royalty on the production of a total of 1.5Moz by the Tau Lekoa Gold Mine and in the event that the average monthly rand price
of gold exceeds R180,000/kg (subject to inflation adjustment). Where the average monthly rand price of gold does not exceed
R180,000/kg (subject to inflation adjustment), the ounces produced in that quarter do not count towards the total 1.5Moz upon
which the royalty is payable. The royalty is determined at 3% of the net revenue (being gross revenue less state royalties)
generated by the Tau Lekoa assets. Royalties on 895,954oz (2018: 825,791oz) produced have been received to date.
of gold exceeds R180,000/kg (subject to inflation adjustment). Where the average monthly rand price of gold does not exceed
R180,000/kg (subject to inflation adjustment), the ounces produced in that quarter do not count towards the total 1.5Moz upon
which the royalty is payable. The royalty is determined at 3% of the net revenue (being gross revenue less state royalties)
generated by the Tau Lekoa assets. Royalties on 895,954oz (2018: 825,791oz) produced have been received to date.
Guarantees
(4)
The company has fully and unconditionally guaranteed all payments and other obligations of AngloGold Ashanti Holdings plc
regarding the issued $700m 5.375% rated bonds due 15 April 2020, the issued $300m 6.5% rated bonds due 15 April 2040 and
the $750m 5.125% rated bonds issued during July 2012, due 1 August 2022.
the $750m 5.125% rated bonds issued during July 2012, due 1 August 2022.
(5)
The company has fully and unconditionally guaranteed all payments and other obligations under the $100m, 3 year revolving
credit facilities entered into during 2016. During 2019, the loans were refinanced and included in Geita and Siguiri revolving credit
facilities.
facilities.
(6)
As part of the acquisition by the company of First Uranium (Pty) Limited during 2012, the owner of Mine Waste Solutions, the
company agreed to guarantee the observance and performance of existing delivery obligations of a wholly owned subsidiary of
Mine Waste Solutions to sell to an existing customer at a pre-agreed price, 25% of the gold produced at a gold recovery plant
located in northwest South Africa, subject to a cap of 312,500oz over the life of the contract. As at 31 December 2019, 118,195oz
(2018: 144,518oz) remain to be delivered against the guarantee over the life of the contract. The guarantee is included in the
South African assets sale as described in note 9.
Mine Waste Solutions to sell to an existing customer at a pre-agreed price, 25% of the gold produced at a gold recovery plant
located in northwest South Africa, subject to a cap of 312,500oz over the life of the contract. As at 31 December 2019, 118,195oz
(2018: 144,518oz) remain to be delivered against the guarantee over the life of the contract. The guarantee is included in the
South African assets sale as described in note 9.
29
FINANCIAL RISK MANAGEMENT ACTIVITIES
In the normal course of its operations, the company is exposed to gold price, other commodity price, foreign exchange, interest
rate, liquidity, equity price and credit risks. In order to manage these risks, the company may enter into transactions which
make use of both on- and off-balance sheet derivatives. The company does not acquire, hold or issue derivatives for
speculative purposes. The company has developed a comprehensive risk management process to facilitate, control and
monitor these risks. The board has approved and monitors this risk management process, inclusive of documented treasury
policies, counterparty limits and controlling and reporting structures.
rate, liquidity, equity price and credit risks. In order to manage these risks, the company may enter into transactions which
make use of both on- and off-balance sheet derivatives. The company does not acquire, hold or issue derivatives for
speculative purposes. The company has developed a comprehensive risk management process to facilitate, control and
monitor these risks. The board has approved and monitors this risk management process, inclusive of documented treasury
policies, counterparty limits and controlling and reporting structures.
Managing risk in the company
Risk management activities within the company are the ultimate responsibility of the board of directors. The Chief Financial
Officer is responsible to the board of directors for the design, implementation and monitoring of the risk management plan.
The Audit and Risk Committee is responsible for overseeing risk management plans and systems, as well as financial risks
which include a review of treasury activities and the company's counterparties.
Officer is responsible to the board of directors for the design, implementation and monitoring of the risk management plan.
The Audit and Risk Committee is responsible for overseeing risk management plans and systems, as well as financial risks
which include a review of treasury activities and the company's counterparties.
The financial risk management objectives of the company are defined as follows:
• safeguarding the company's core earnings stream from its major assets through the effective control and management of
gold price risk, other commodity risk, foreign exchange risk and interest rate risk;
• effective and efficient usage of credit facilities in both the short and long term through the adoption of reliable liquidity
management planning and procedures;
• ensuring that investment and hedging transactions are undertaken with creditworthy counterparties; and
• ensuring that all contracts and agreements related to risk management activities are coordinated, consistent throughout
the company and that they comply where necessary with all relevant regulatory and statutory requirements.
gold price risk, other commodity risk, foreign exchange risk and interest rate risk;
• effective and efficient usage of credit facilities in both the short and long term through the adoption of reliable liquidity
management planning and procedures;
• ensuring that investment and hedging transactions are undertaken with creditworthy counterparties; and
• ensuring that all contracts and agreements related to risk management activities are coordinated, consistent throughout
the company and that they comply where necessary with all relevant regulatory and statutory requirements.
COMPANY – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 105
29
FINANCIAL RISK MANAGEMENT ACTIVITIES CONTINUED
Gold price and foreign exchange risk
Gold price risk arises from the risk of an adverse effect on current or future earnings resulting from fluctuations in the price of
gold. The gold market is predominately priced in US dollars which exposes the company to the risk that fluctuations in the
SA rand/US dollar exchange rate may also have an adverse effect on current or future earnings. The company is also exposed
to certain by-product commodity price risk.
gold. The gold market is predominately priced in US dollars which exposes the company to the risk that fluctuations in the
SA rand/US dollar exchange rate may also have an adverse effect on current or future earnings. The company is also exposed
to certain by-product commodity price risk.
Net open hedge position as at 31 December 2019
The company had no outstanding commitments against future production.
Interest rate and liquidity risk
Refer note 35 in the group financial statements. At each of the financial years ended 31 December 2019 and 2018, the
company was in a net current liability position. The company will fund current liabilities from operating cash flows and
borrowings.
company was in a net current liability position. The company will fund current liabilities from operating cash flows and
borrowings.
The following are the contractual maturities of financial liabilities, including interest payments:
Financial liabilities
SA Rands
Within one year
Effective rate
Between
one and two years
Effective rate
Between
two and five years
Effective rate
After five years
Effective rate
Total
2019
millions
%
millions
%
millions
%
millions
%
millions
Financial guarantees
9,796
—
10,495
4,198
24,489
Borrowings
82
8.1
82
8.1
1,076
8.1
—
1,240
Lease liability
(2)
49
9.8
53
9.8
14
9.8
—
116
Trade and other payables (note 24)
2,202
—
—
—
2,202
Intra-group balances (note 17)
3,338
—
—
—
3,338
2018
Financial guarantees
1,435
10,043
10,760
4,304
26,542
Borrowings
127
8.8
508
8.7
602
8.6
—
1,237
Trade and other payables (note 24)
2,768
—
—
—
2,768
Derivatives (note 24)
51
—
—
—
51
Intra-group balances (note 17)
3,381
(1)
—
—
—
3,381
(1)
Effective rate less than 0.1%.
(2)
Effective 1 January 2019, finance lease liabilities are no longer included in total borrowings but disclosed separately as part of lease liabilities.
Financial guarantees and their related amounts included in the statement of financial position include:
Guarantee
Included in
statement of
financial
position
Guarantee
Included in
statement of
financial
position
SA Rands millions
2019
2018
Rated bonds
24,489
990
25,107
1,212
Revolving Credit Facilities - $100m
1,435
—
24,489
990
26,542
1,212
COMPANY – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 106
29
FINANCIAL RISK MANAGEMENT ACTIVITIES CONTINUED
The following are the contractual maturities of financial liabilities, including interest payments CONTINUED
Credit risk
Refer group note 35.
The combined maximum credit risk exposure of the company is as follows:
SA Rands millions
2019
2018
Other investments
14
13
Trade and other receivables
96
146
Intra-group balances (note 17)
438
2,377
Cash and cash equivalents
173
105
Total financial assets
721
2,641
Financial guarantees (note 28)
24,489
26,542
The company has trade and other receivables that are past due totalling R50m (2018: R85m). Trade and other receivables
arise mainly due to intergroup transactions. Receivables from intergroup transactions are considered to be low credit risk.
Credit risk for these assets has not been increased significantly since initial recognition. During 2019, the business activities
of one of the wholly owned subsidiaries of the company changed and the intergroup loan of the subsidiary was fully impaired
by R25m (2018: R30m).
arise mainly due to intergroup transactions. Receivables from intergroup transactions are considered to be low credit risk.
Credit risk for these assets has not been increased significantly since initial recognition. During 2019, the business activities
of one of the wholly owned subsidiaries of the company changed and the intergroup loan of the subsidiary was fully impaired
by R25m (2018: R30m).
Fair value of financial instruments
The estimated fair values of financial instruments are determined at discrete points in time based on relevant market
information. The estimated fair value of the company's other investments and borrowings as at 31 December are as follows:
information. The estimated fair value of the company's other investments and borrowings as at 31 December are as follows:
Type of instrument
Carrying
amount
Fair value
Carrying
amount
Fair value
SA Rands millions
2019
2018
Financial assets
Other investments
18
18
28
28
Financial liabilities
Borrowings (note 20)
1,008
1,008
1,040
1,040
The following methods and assumptions were used to estimate the fair value borrowings:
Borrowings
The interest rate on the borrowings is reset on a short-term floating rate basis, and accordingly the carrying amount is
considered to approximate fair value.
considered to approximate fair value.
Fair value of financial instruments
The company uses the following hierarchy for determining and disclosing the fair value of financial instruments:
Level 1:
Level 1:
quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2:
inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices); and
prices) or indirectly (derived from prices); and
Level 3:
inputs for the asset or liability that are not based on observable market data (unobservable inputs).
COMPANY – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 107
29
FINANCIAL RISK MANAGEMENT ACTIVITIES CONTINUED
The following are the contractual maturities of financial liabilities, including interest payments CONTINUED
The following table sets out the company's financial assets and liabilities measured at fair value by level within the fair value
as at 31 December.
as at 31 December.
Type of instrument
Assets measured at fair value on a recurring basis
SA Rands millions
SA Rands millions
Level 1
Level 2
Level 3
Total
Equity securities - FVTOCI
2019
4
—
—
4
2018
Equity securities - FVTOCI
15
—
—
15
Environmental obligations
Pursuant to environmental regulations in South Africa, we are obligated to close our operations and rehabilitate the lands
which we mine in accordance with these regulations. As a consequence, AngloGold Ashanti is required in some circumstances
to establish independent trust funds or provide guarantees issued by the operation, to the Department of Mineral Resources
to cover the potential environmental rehabilitation obligation in specified amounts. AngloGold Ashanti has established a trust
fund which has assets of ZAR 1.156bn and guarantees of ZAR 0.549bn issued by various banks, for a current carrying value
of the liability of ZAR 0.897bn. The fund, guarantees and liability form part of the South African disposal group and have been
transferred to held of sale. Refer note 18.
which we mine in accordance with these regulations. As a consequence, AngloGold Ashanti is required in some circumstances
to establish independent trust funds or provide guarantees issued by the operation, to the Department of Mineral Resources
to cover the potential environmental rehabilitation obligation in specified amounts. AngloGold Ashanti has established a trust
fund which has assets of ZAR 1.156bn and guarantees of ZAR 0.549bn issued by various banks, for a current carrying value
of the liability of ZAR 0.897bn. The fund, guarantees and liability form part of the South African disposal group and have been
transferred to held of sale. Refer note 18.
Sensitivity analysis
Interest rate risk on other financial assets and liabilities (excluding derivatives)
Refer note 35 in the group financial statements.
30
CAPITAL MANAGEMENT
Capital is managed on a group basis only and not on a company basis. Refer to note 36 in the group financial statements.
31
NEW AND AMENDED STANDARDS ADOPTED BY THE COMPANY
AngloGold Ashanti adopted IFRS 16 Leases.
As a result of adopting IFRS 16 Leases, the company has changed its accounting policy. The impact of adopting IFRS 16
Leases is disclosed in note 10. The new accounting policy is disclosed in Annexure A “Summary of significant accounting
policies - Leases”.
Leases is disclosed in note 10. The new accounting policy is disclosed in Annexure A “Summary of significant accounting
policies - Leases”.
CHANGE IN DISCLOSURE
Effective 1 January 2019, the company changed the disclosure of “Special Items” in the income statement. In prior periods,
the company disclosed items that due to their size and/or nature, required separate disclosure on the face of the income
statement, in accordance with IAS 1.97 as Special Items. In addition, a disclosure category - “Other operating expenses” was
reported to disclose expenses which were not included in gross profit. Going forward these two categories of expenses and
income will be disclosed as:
the company disclosed items that due to their size and/or nature, required separate disclosure on the face of the income
statement, in accordance with IAS 1.97 as Special Items. In addition, a disclosure category - “Other operating expenses” was
reported to disclose expenses which were not included in gross profit. Going forward these two categories of expenses and
income will be disclosed as:
• Other expenses (income); and
• Separate line item(s) on the face of the income statement depending on materiality.
• Separate line item(s) on the face of the income statement depending on materiality.
The representation provides more useful information by reporting material items separately. The change in presentation has
no impact on the reported totals, or on amounts presented in the Statement of Financial Position.
no impact on the reported totals, or on amounts presented in the Statement of Financial Position.
COMPANY – NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
PAGE 108
2018
Reclassification
2018
Previously reported
Income statement extract
SA Rands millions
SA Rands millions
31
NEW AND AMENDED STANDARDS ADOPTED BY THE COMPANY CONTINUED
CHANGE IN DISCLOSURE CONTINUED
As a result of the change, reclassifications in the income statement are as follows:
Gross profit (loss)
70
70
Corporate administration, marketing and other expenses
(224)
(224)
Exploration and evaluation costs
(53)
(53)
Impairment, derecognition of assets and profit (loss) on disposal
n/a
141
Other expenses (income)
(603)
(975)
Special items
(231)
n/a
Operating profit (loss)
(1,041)
(1,041)
32
SUBSEQUENT EVENTS
Sale of South African assets - On 12 February 2020, AngloGold Ashanti announced that it has reached an agreement to
sell its remaining South African producing assets and related liabilities to Harmony Gold Mining Company Limited.
Consideration for the transaction is in cash and deferred payments with expected proceeds of around $300m, subject to
subsequent performance and with additional proceeds if the West Wits assets are developed below current infrastructure.
Refer to note 18 and group note 9.
sell its remaining South African producing assets and related liabilities to Harmony Gold Mining Company Limited.
Consideration for the transaction is in cash and deferred payments with expected proceeds of around $300m, subject to
subsequent performance and with additional proceeds if the West Wits assets are developed below current infrastructure.
Refer to note 18 and group note 9.
Dividend declaration - On 21 February 2020, the directors of AngloGold Ashanti declared a gross cash dividend per ordinary
share of 165 South African cents (assuming an exchange rate of ZAR 15/$, the gross dividend payable per ADS is equivalent
to ~11 US cents).
share of 165 South African cents (assuming an exchange rate of ZAR 15/$, the gross dividend payable per ADS is equivalent
to ~11 US cents).
COVID-19 pandemic - For a discussion of the impact of the COVID-19 pandemic, refer group note 37.
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ANNEXURE A
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
EQUITY-ACCOUNTED INVESTMENTS
Joint ventures
A joint venture is an entity in which the group holds a long term interest and which the group and one or more other ventures jointly
control under a contractual arrangement, that provides for strategic, financial and operating policy decisions relating to the activities
requiring unanimous consent of the parties sharing control. The group’s interests in joint arrangements classified as joint ventures
are accounted for using the equity method.
control under a contractual arrangement, that provides for strategic, financial and operating policy decisions relating to the activities
requiring unanimous consent of the parties sharing control. The group’s interests in joint arrangements classified as joint ventures
are accounted for using the equity method.
Profits and losses realised in connection with transactions between the group and joint ventures are eliminated in proportion to
share ownership. Such profits and losses are deducted from the group’s equity and related statement of financial position amount
and released in the group accounts when the assets are effectively realised outside the group. Dividends received from joint
ventures are included in operating activities in the cash flow statement.
share ownership. Such profits and losses are deducted from the group’s equity and related statement of financial position amount
and released in the group accounts when the assets are effectively realised outside the group. Dividends received from joint
ventures are included in operating activities in the cash flow statement.
Joint ventures are accounted for at cost and are adjusted for impairments where appropriate in the company financial statements.
Associates
The equity method of accounting is used for investments over which the group exercises significant influence and normally owns
between 20% and 50% of the voting equity. Associates are equity-accounted from the effective date of acquisition to the effective
date of disposal.
between 20% and 50% of the voting equity. Associates are equity-accounted from the effective date of acquisition to the effective
date of disposal.
Profits and losses realised in connection with transactions between the group and associated companies are eliminated in
proportion to share ownership. Such profits and losses are deducted from the group’s equity and related statement of financial
position amount and released in the group accounts when the assets are effectively realised outside the group. Dividends received
from associates are included in investing activities in the cash flow statement.
proportion to share ownership. Such profits and losses are deducted from the group’s equity and related statement of financial
position amount and released in the group accounts when the assets are effectively realised outside the group. Dividends received
from associates are included in investing activities in the cash flow statement.
Associates are accounted for at cost and are adjusted for impairments where appropriate in the company financial statements.
Joint ventures and associates
If necessary, impairment losses on loans and equity are reported under share of joint ventures and associates profit and loss.
Any losses of equity-accounted investments are accounted for in the consolidated financial statements until the investment in such
investments is written down to zero. Thereafter, losses are accounted for only insofar as the group is committed to providing financial
support to such investees.
investments is written down to zero. Thereafter, losses are accounted for only insofar as the group is committed to providing financial
support to such investees.
The carrying value of equity-accounted investments represents the cost of each investment, including goodwill, balance outstanding
on loans advanced if the loan forms part of the net investment in the investee, any impairment losses recognised, the share of post-
acquisition retained earnings and losses, and any other movements in reserves. The carrying value of equity-accounted
investments is reviewed when indicators arise and if any impairment in value has occurred; it is recognised in the period in which
the impairment arose.
on loans advanced if the loan forms part of the net investment in the investee, any impairment losses recognised, the share of post-
acquisition retained earnings and losses, and any other movements in reserves. The carrying value of equity-accounted
investments is reviewed when indicators arise and if any impairment in value has occurred; it is recognised in the period in which
the impairment arose.
In determining materiality for the disclosure requirements of IFRS 12 Disclosure of Interest in Other Entities, management has
assessed that amounts representing the carrying value of at least 90% of the investments in associates and joint ventures balances,
reported in the statement of financial position, constitute quantitative materiality.
assessed that amounts representing the carrying value of at least 90% of the investments in associates and joint ventures balances,
reported in the statement of financial position, constitute quantitative materiality.
UNINCORPORATED JOINT OPERATIONS
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the use of
assets and obligations for the liabilities of the arrangement. The group accounts for activities under joint operations by recognising
in relation to the joint operation, the assets it controls and the liabilities it incurs, the expenses it incurs and the revenue from the
sale or use of its share of the joint operations output.
assets and obligations for the liabilities of the arrangement. The group accounts for activities under joint operations by recognising
in relation to the joint operation, the assets it controls and the liabilities it incurs, the expenses it incurs and the revenue from the
sale or use of its share of the joint operations output.
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FOREIGN CURRENCY TRANSLATION
Functional currency
Items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic
environment in which the entity operates (the ‘functional currency’). The functional currency of the parent company is South African
Rands.
environment in which the entity operates (the ‘functional currency’). The functional currency of the parent company is South African
Rands.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the approximate exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and
from the translation at the reporting period exchange rate of monetary assets and liabilities denominated in foreign currencies are
recognised in the income statement.
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and
from the translation at the reporting period exchange rate of monetary assets and liabilities denominated in foreign currencies are
recognised in the income statement.
Group companies
The results and financial position of all group entities (none of which has the currency of a hyperinflationary economy) that have a
functional currency different from the presentation currency are translated into the presentation currency as follows:
functional currency different from the presentation currency are translated into the presentation currency as follows:
• share capital and premium are translated at historical rates of exchange at the reporting date;
• retained earnings are converted at historical average exchange rates;
• assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that
statement of financial position;
• income and expenses for each income statement presented are translated at monthly average exchange rates (unless this
average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the rates prevailing at the date of the transaction); and
• all resulting exchange differences are recognised in other comprehensive income and presented as a separate component of
equity (foreign currency translation reserve, or FCTR).
• retained earnings are converted at historical average exchange rates;
• assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that
statement of financial position;
• income and expenses for each income statement presented are translated at monthly average exchange rates (unless this
average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the rates prevailing at the date of the transaction); and
• all resulting exchange differences are recognised in other comprehensive income and presented as a separate component of
equity (foreign currency translation reserve, or FCTR).
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 accounted for as other comprehensive income on consolidation. On
repayment or realisation, permanent loans and investments are recycled from FCTR to the income statement. For the company,
the exchange differences on such monetary items are reported in the company income statement.
instruments designated as hedges of such investments, are accounted for as other comprehensive income on consolidation. On
repayment or realisation, permanent loans and investments are recycled from FCTR to the income statement. For the company,
the exchange differences on such monetary items are reported in the company income statement.
SEGMENT REPORTING
An operating segment is a business activity whose results are regularly reviewed by the chief operating decision maker (CODM) in
order to make decisions about resources to be allocated to it and to assess its performance and for which discrete financial
information is available. The chief executive officer and the executive committee are collectively identified as the CODM.
order to make decisions about resources to be allocated to it and to assess its performance and for which discrete financial
information is available. The chief executive officer and the executive committee are collectively identified as the CODM.
TANGIBLE ASSETS
Tangible assets are recorded at cost less accumulated amortisation and impairments/reversals. Cost includes pre-production
expenditure incurred during the development of a mine and the present value of related future decommissioning costs.
expenditure incurred during the development of a mine and the present value of related future decommissioning costs.
Interest on borrowings relating to the financing of major capital projects under construction is capitalised during the construction
phase as part of the cost of the project. Such borrowing costs are capitalised over the period during which the asset is being
acquired or constructed and borrowings have been incurred. Capitalisation ceases when construction is interrupted for an extended
period or when the asset is substantially complete. Other borrowing costs are expensed as incurred.
phase as part of the cost of the project. Such borrowing costs are capitalised over the period during which the asset is being
acquired or constructed and borrowings have been incurred. Capitalisation ceases when construction is interrupted for an extended
period or when the asset is substantially complete. Other borrowing costs are expensed as incurred.
When there is an indication that the recoverable amount of any of the tangible assets is less than the carrying value, the recoverable
amount is estimated and the difference is recognised as an impairment.
amount is estimated and the difference is recognised as an impairment.
Subsequent costs are included in the asset’s carrying amount only when it is probable that future economic benefits associated
with the asset will flow to the group, and the cost of the addition can be measured reliably. All other repairs and maintenance are
charged to the income statement during the financial period in which they are incurred.
with the asset will flow to the group, and the cost of the addition can be measured reliably. All other repairs and maintenance are
charged to the income statement during the financial period in which they are incurred.
To the extent a legal or constructive obligation to a third party exists, the acquisition cost includes estimated costs of dismantling
and removing the asset and restoring the site. A change in estimated expenditures for dismantling, removal and restoration is added
to or deducted from the carrying value of the related asset. To the extent that the change would result in a negative carrying amount
of the related asset, this effect is recognised as income. The change in depreciation charge is recognised prospectively.
and removing the asset and restoring the site. A change in estimated expenditures for dismantling, removal and restoration is added
to or deducted from the carrying value of the related asset. To the extent that the change would result in a negative carrying amount
of the related asset, this effect is recognised as income. The change in depreciation charge is recognised prospectively.
For assets amortised on the units-of-production method, amortisation is calculated to allocate the cost of each asset to its residual
value over its estimated useful life. For assets not amortised on the units-of-production method, amortisation is calculated over their
estimated useful life as follows:
value over its estimated useful life. For assets not amortised on the units-of-production method, amortisation is calculated over their
estimated useful life as follows:
• buildings up to life of mine;
• plant and machinery up to life of mine;
• equipment and motor vehicles up to five years;
• computer equipment up to three years; and
• leased assets over the shorter of the period of the lease and the useful life of the leased asset.
• plant and machinery up to life of mine;
• equipment and motor vehicles up to five years;
• computer equipment up to three years; and
• leased assets over the shorter of the period of the lease and the useful life of the leased asset.
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Major renovations are depreciated over the remaining useful life of the related asset or to the date of the next major renovation,
whichever is sooner.
whichever is sooner.
Assets are amortised to residual values. Residual values and useful lives are reviewed, and adjusted if appropriate, at the beginning
of each financial year.
of each financial year.
Gains and losses on disposals are determined by comparing net sale proceeds with the carrying amount at the date of sale. These
are included in the income statement.
are included in the income statement.
Mine development costs
Capitalised mine development costs include expenditure incurred to develop new orebodies, to define further mineralisation in
existing orebodies and to expand the capacity of a mine. Mine development costs include acquired proved and probable Ore
Reserve at cost at the acquisition date. These costs are amortised from the date on which commercial production begins.
existing orebodies and to expand the capacity of a mine. Mine development costs include acquired proved and probable Ore
Reserve at cost at the acquisition date. These costs are amortised from the date on which commercial production begins.
Depreciation, depletion and amortisation of mine development costs are computed by the units-of-production method based on
estimated proved and probable Ore Reserve. The proved and probable Ore Reserve reflects estimated quantities of reserves which
can be recovered economically in the future from known mineral deposits.
estimated proved and probable Ore Reserve. The proved and probable Ore Reserve reflects estimated quantities of reserves which
can be recovered economically in the future from known mineral deposits.
Capitalised mine development costs also include stripping activity assets relating to production stripping activities incurred in the
production phase of open-pit operations of the group. Once determined that any portion of the production stripping costs should be
capitalised, the group determines the average mine costs per tonne of the component and the waste tonnes to which the production
stripping costs relate to determine the amount of the production stripping costs that should be capitalised. Stripping activity assets
are amortised on a units-of-production method based on the Ore Reserve of the component of the orebody to which these assets
relate.
production phase of open-pit operations of the group. Once determined that any portion of the production stripping costs should be
capitalised, the group determines the average mine costs per tonne of the component and the waste tonnes to which the production
stripping costs relate to determine the amount of the production stripping costs that should be capitalised. Stripping activity assets
are amortised on a units-of-production method based on the Ore Reserve of the component of the orebody to which these assets
relate.
The average mine cost per tonne of the component is calculated as the total expected costs to be incurred to mine the relevant
component of the orebody, divided by the number of tonnes expected to be mined from the component. The average mine cost per
tonne of the component to which the stripping activity asset relates are recalculated annually in the light of additional knowledge
and changes in estimates.
component of the orebody, divided by the number of tonnes expected to be mined from the component. The average mine cost per
tonne of the component to which the stripping activity asset relates are recalculated annually in the light of additional knowledge
and changes in estimates.
Mine infrastructure
Mine plant facilities, including decommissioning assets, are amortised using the lesser of their useful life or units-of-production
method based on estimated proved and probable Ore Reserve.
method based on estimated proved and probable Ore Reserve.
Land and assets under construction
Land and assets under construction are not depreciated and are measured at historical cost less impairments.
Mineral rights and dumps
Mineral rights are amortised using the units-of-production method based on the estimated proved and probable Ore Reserve.
Dumps are amortised over the period of treatment.
Dumps are amortised over the period of treatment.
Exploration and evaluation assets
All pre-license and exploration costs, including geological and geographical costs, labour, Mineral Resource and exploratory drilling
cost, are expensed as incurred, until it is concluded that a future economic benefit will more likely than not be realised. In evaluating
if expenditures meet this criterion to be capitalised, several different sources of information are used depending on the level of
exploration. While the criterion for concluding that expenditure should be capitalised is always probable, the information used to
make that determination depends on the level of exploration:
cost, are expensed as incurred, until it is concluded that a future economic benefit will more likely than not be realised. In evaluating
if expenditures meet this criterion to be capitalised, several different sources of information are used depending on the level of
exploration. While the criterion for concluding that expenditure should be capitalised is always probable, the information used to
make that determination depends on the level of exploration:
• Costs on greenfields sites, being those where the group does not have any mineral deposits which are already being mined or
developed under the planned method of extraction, are expensed as incurred until the group is able to demonstrate that future
economic benefits are probable, which generally will be the establishment of proved and probable Ore Reserve at this location;
• Costs on brownfields sites, being those adjacent to mineral deposits which are already being mined or developed under the
planned method of extraction, are expensed as incurred until the group is able to demonstrate that future economic benefits
are probable, which generally will be the establishment of increased inclusive proved and probable Ore Reserve, after which
the expenditure is capitalised as a mine development cost; and
• Costs relating to extensions of mineral deposits, which are already being mined or developed, including expenditure on the
definition of mineralisation of such mineral deposits, are capitalised as a mine development cost.
developed under the planned method of extraction, are expensed as incurred until the group is able to demonstrate that future
economic benefits are probable, which generally will be the establishment of proved and probable Ore Reserve at this location;
• Costs on brownfields sites, being those adjacent to mineral deposits which are already being mined or developed under the
planned method of extraction, are expensed as incurred until the group is able to demonstrate that future economic benefits
are probable, which generally will be the establishment of increased inclusive proved and probable Ore Reserve, after which
the expenditure is capitalised as a mine development cost; and
• Costs relating to extensions of mineral deposits, which are already being mined or developed, including expenditure on the
definition of mineralisation of such mineral deposits, are capitalised as a mine development cost.
Costs relating to property acquisitions are capitalised within mine development costs.
LEASES
The group assesses whether a contract is or contains a lease at inception of a contract. The group recognises a right-of-use asset
and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined
as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the group recognises the lease
payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more
representative of the time pattern in which economic benefits from the leased asset are consumed. The lease liability is initially
and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined
as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the group recognises the lease
payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more
representative of the time pattern in which economic benefits from the leased asset are consumed. The lease liability is initially
PAGE 112
measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate
implicit in the lease. If this rate cannot be readily determined, the group uses its incremental borrowing rate. The group applies the
IFRS 16 portfolio approach in determining the discount rate for leases. As such a single discount rate has been used for contracts
that share similar characteristics. The group has determined that contracts that are denominated in the same currency will use a
single discount rate. This rate has been determined using various factors including in-country borrowings as well as other sources
of finance. Contracts may contain both lease and non-lease components. The group allocates the consideration in the contract to
the lease and non-lease components based on their relative stand-alone prices.
implicit in the lease. If this rate cannot be readily determined, the group uses its incremental borrowing rate. The group applies the
IFRS 16 portfolio approach in determining the discount rate for leases. As such a single discount rate has been used for contracts
that share similar characteristics. The group has determined that contracts that are denominated in the same currency will use a
single discount rate. This rate has been determined using various factors including in-country borrowings as well as other sources
of finance. Contracts may contain both lease and non-lease components. The group allocates the consideration in the contract to
the lease and non-lease components based on their relative stand-alone prices.
Lease payments included in the measurement of the lease liability comprise:
• fixed lease payments (including in-substance fixed payments), less any lease incentives;
• variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
• the amount expected to be payable by the lessee under residual value guarantees;
• the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
• payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
• variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
• the amount expected to be payable by the lessee under residual value guarantees;
• the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
• payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is presented separately in the consolidated statement of financial position, allocated to non-current and current
liabilities.
liabilities.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the
effective interest method) and by reducing the carrying amount to reflect the lease payments made.
effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
• the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease
liability is remeasured by discounting the revised lease payments using a revised discount rate.
• the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual
value, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate
(unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
• a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability
is remeasured by discounting the revised lease payments using a revised discount rate.
liability is remeasured by discounting the revised lease payments using a revised discount rate.
• the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual
value, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate
(unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
• a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability
is remeasured by discounting the revised lease payments using a revised discount rate.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the
commencement day, any initial direct costs and restoration costs as described below. They are subsequently measured at cost
less accumulated depreciation and impairment losses.
commencement day, any initial direct costs and restoration costs as described below. They are subsequently measured at cost
less accumulated depreciation and impairment losses.
The lease term is determined as the non-cancellable period of a lease, together with:
• Periods covered by an option to extend the lease if AngloGold Ashanti is reasonably certain to make use of that option; and/or
• Periods covered by an option to terminate the lease, if AngloGold Ashanti is reasonably certain not to make use of that option.
• Periods covered by an option to terminate the lease, if AngloGold Ashanti is reasonably certain not to make use of that option.
Whenever the group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located
or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and
measured under IAS 37 Provisions, Contingent Liabilities and Contingent Assets. The costs are included in the related right-of-use
asset, unless those costs are incurred to produce inventories.
or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and
measured under IAS 37 Provisions, Contingent Liabilities and Contingent Assets. The costs are included in the related right-of-use
asset, unless those costs are incurred to produce inventories.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers
ownership of the underlying asset or the cost of the right-of-use asset reflects that the group expects to exercise a purchase option,
the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the
commencement date of the lease.
ownership of the underlying asset or the cost of the right-of-use asset reflects that the group expects to exercise a purchase option,
the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the
commencement date of the lease.
The right-of-use assets are presented as a separate line in the consolidated statement of financial position.
The group applies IAS 36 Impairment of Assets to determine whether a right-of-use asset is impaired and accounts for any identified
impairment loss accordingly.
impairment loss accordingly.
NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through
a sale transaction rather than through continuing use. This condition is regarded as having been met only when the sale is highly
probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed
to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
a sale transaction rather than through continuing use. This condition is regarded as having been met only when the sale is highly
probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed
to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their carrying amount and fair
value less costs to sell.
value less costs to sell.
Tangible assets, right of use assets and intangible assets are not depreciated once classified as held for sale.
PAGE 113
A disposal group qualifies as a discontinued operation if it is a component of an entity that either has been disposed of, or is
classified as held for sale, and:
classified as held for sale, and:
• Represents a separate major line of business or geographical area of operations;
• Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or
• Is a subsidiary acquired exclusively with a view to resale.
• Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or
• Is a subsidiary acquired exclusively with a view to resale.
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or
loss after tax from discontinued operations in the statement of profit or loss.
loss after tax from discontinued operations in the statement of profit or loss.
INVENTORIES
Inventories are valued at the lower of cost and net realisable value after appropriate allowances for redundant and obsolete items.
Cost is determined on the following bases:
Cost is determined on the following bases:
• metals in process are valued at the average total production cost at the relevant stage of production;
• gold doré/bullion is valued on an average total production cost method;
• ore stockpiles are valued at the average moving cost of mining and stockpiling the ore. Stockpiles are classified as a non-
current asset where the stockpile exceeds current processing capacity;
• by-products, which include uranium oxide, silver and sulphuric acid, are valued using an average total production cost method;
• mine operating supplies are valued at average cost; and
• heap leach pad materials are measured on an average total production cost basis.
• gold doré/bullion is valued on an average total production cost method;
• ore stockpiles are valued at the average moving cost of mining and stockpiling the ore. Stockpiles are classified as a non-
current asset where the stockpile exceeds current processing capacity;
• by-products, which include uranium oxide, silver and sulphuric acid, are valued using an average total production cost method;
• mine operating supplies are valued at average cost; and
• heap leach pad materials are measured on an average total production cost basis.
A portion of the related depreciation, depletion and amortisation charge is included in the cost of inventory. Impairments resulting
from a decrease in prices are disclosed in other expenses, all other impairments are included in cost of sales.
from a decrease in prices are disclosed in other expenses, all other impairments are included in cost of sales.
PROVISIONS
Provisions are recognised when the group has a present obligation, whether legal or constructive, because of a past event for which
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. Where some or all of the expenditure required to settle a provision is expected
to be reimbursed by another party, the reimbursement is recognised only when the reimbursement is virtually certain. The amount
to be reimbursed is recognised as a separate asset. Where the group has a joint and several liability with one or more other parties,
no provision is recognised to the extent that those other parties are expected to settle part or all of the obligation.
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. Where some or all of the expenditure required to settle a provision is expected
to be reimbursed by another party, the reimbursement is recognised only when the reimbursement is virtually certain. The amount
to be reimbursed is recognised as a separate asset. Where the group has a joint and several liability with one or more other parties,
no provision is recognised to the extent that those other parties are expected to settle part or all of the obligation.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the obligation at
the reporting date. The discount rate used to determine the present value reflects current market assessments of the time value of
money and the risks specific to the liability.
the reporting date. The discount rate used to determine the present value reflects current market assessments of the time value of
money and the risks specific to the liability.
Litigation and administrative proceedings are evaluated on a case-by-case basis considering the information available, including
that of legal counsel, to assess potential outcomes. Where it is considered probable that an obligation will result in an outflow of
resources, a provision is recorded for the present value of the expected cash outflows if these are reasonably measurable. These
provisions cover the estimated payments to plaintiffs, court fees and the cost of potential settlements.
that of legal counsel, to assess potential outcomes. Where it is considered probable that an obligation will result in an outflow of
resources, a provision is recorded for the present value of the expected cash outflows if these are reasonably measurable. These
provisions cover the estimated payments to plaintiffs, court fees and the cost of potential settlements.
EMPLOYEE BENEFITS
Other post-employment benefit obligations
Some group companies provide post-retirement health care benefits to their retirees. The entitlement to these benefits is usually
conditional on the employee remaining in service up to retirement age and completion of a minimum service period. The expected
costs of these benefits are accrued over the period of employment using an accounting methodology on the same basis as that
used for defined benefit pension plans. Actuarial gains and losses arising from experience adjustments and changes in actuarial
assumptions are recorded in other comprehensive income immediately. These obligations are valued annually by independent
qualified actuaries.
conditional on the employee remaining in service up to retirement age and completion of a minimum service period. The expected
costs of these benefits are accrued over the period of employment using an accounting methodology on the same basis as that
used for defined benefit pension plans. Actuarial gains and losses arising from experience adjustments and changes in actuarial
assumptions are recorded in other comprehensive income immediately. These obligations are valued annually by independent
qualified actuaries.
Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts
voluntary redundancy in exchange for these benefits. The group recognises a liability and expense for termination benefits at the
earlier of the following dates: (a) when the entity can no longer withdraw the offer of those benefits; and (b) when the entity
recognises costs for a restructuring that is within the scope of IAS 37 Provisions, Contingent Liabilities and Contingent Assets and
involves the payment of termination benefits. The group recognises termination benefits when it is demonstrably committed to either
terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or providing
termination benefits as a result of an offer made to encourage voluntary redundancy based on the number of employees expected
to accept the offer. Benefits falling due more than 12 months after reporting date are discounted to present value.
voluntary redundancy in exchange for these benefits. The group recognises a liability and expense for termination benefits at the
earlier of the following dates: (a) when the entity can no longer withdraw the offer of those benefits; and (b) when the entity
recognises costs for a restructuring that is within the scope of IAS 37 Provisions, Contingent Liabilities and Contingent Assets and
involves the payment of termination benefits. The group recognises termination benefits when it is demonstrably committed to either
terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or providing
termination benefits as a result of an offer made to encourage voluntary redundancy based on the number of employees expected
to accept the offer. Benefits falling due more than 12 months after reporting date are discounted to present value.
PAGE 114
Share-based payments
The group’s management awards certain employee bonuses in the form of equity-settled share-based payments on a discretionary
basis.
basis.
The fair value of the equity instruments granted is calculated at grant date. For transactions with employees, fair value is based on
market prices of the equity instruments granted, if available, taking into account the terms and conditions upon which those equity
instruments were granted. If market prices of the equity instruments granted are not available, the fair value of the equity instruments
granted is estimated using an appropriate valuation model. Vesting conditions, other than market conditions, are not taken into
account when estimating the fair value of shares or share options at measurement date.
market prices of the equity instruments granted, if available, taking into account the terms and conditions upon which those equity
instruments were granted. If market prices of the equity instruments granted are not available, the fair value of the equity instruments
granted is estimated using an appropriate valuation model. Vesting conditions, other than market conditions, are not taken into
account when estimating the fair value of shares or share options at measurement date.
Over the vesting period, the fair value at measurement date is recognised as an employee benefit expense with a corresponding
increase in other capital reserves based on the group’s estimate of the number of instruments that will eventually vest. The income
statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of
that period. Vesting assumptions for non-market conditions are reviewed at each reporting date to ensure they reflect current
expectations.
increase in other capital reserves based on the group’s estimate of the number of instruments that will eventually vest. The income
statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of
that period. Vesting assumptions for non-market conditions are reviewed at each reporting date to ensure they reflect current
expectations.
When options are exercised or share awards vest, the proceeds received, net of any directly attributable transaction costs, are
credited to share capital (nominal value) and share premium.
credited to share capital (nominal value) and share premium.
Where the terms of an equity settled award are modified, as a minimum, an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any modification which increases the total fair value of the share-based payment
arrangement, or is otherwise beneficial to the employee, as measured at the date of the modification.
modified. In addition, an expense is recognised for any modification which increases the total fair value of the share-based payment
arrangement, or is otherwise beneficial to the employee, as measured at the date of the modification.
In addition, the group’s management awards certain employee bonuses in the form of a cash settled scheme, whereby awards
granted are linked to the performance of the company’s share price. A liability is recognised based upon the grant date fair value
and is subsequently remeasured to the closing share price at each reporting date up to the date of vesting. Remeasurements to
fair value are recognised in the income statement.
granted are linked to the performance of the company’s share price. A liability is recognised based upon the grant date fair value
and is subsequently remeasured to the closing share price at each reporting date up to the date of vesting. Remeasurements to
fair value are recognised in the income statement.
In the company financial statements, share-based payment arrangements with employees of other group entities are recognised
by charging that entity its share of the expense and a corresponding increase in other capital reserves. When options are exercised
or share awards vest, the proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal
value) and share premium.
by charging that entity its share of the expense and a corresponding increase in other capital reserves. When options are exercised
or share awards vest, the proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal
value) and share premium.
ENVIRONMENTAL EXPENDITURE
The group has long-term remediation obligations comprising decommissioning and restoration liabilities relating to its past
operations which are based on the group’s environmental management plans, in compliance with current environmental and
regulatory requirements. Provisions for non-recurring remediation costs are made when there is a present obligation, it is probable
that expenditure on remediation work will be required and the cost can be estimated within a reasonable range of possible
outcomes. The costs are based on currently available facts, technology expected to be available at the time of the clean-up, laws
and regulations presently or virtually certain to be enacted and prior experience in remediation of contaminated sites.
operations which are based on the group’s environmental management plans, in compliance with current environmental and
regulatory requirements. Provisions for non-recurring remediation costs are made when there is a present obligation, it is probable
that expenditure on remediation work will be required and the cost can be estimated within a reasonable range of possible
outcomes. The costs are based on currently available facts, technology expected to be available at the time of the clean-up, laws
and regulations presently or virtually certain to be enacted and prior experience in remediation of contaminated sites.
Decommissioning costs
The provision for decommissioning represents the cost that will arise from rectifying damage caused before production commences.
Accordingly, a provision and a decommissioning asset is recognised and included within mine infrastructure.
Accordingly, a provision and a decommissioning asset is recognised and included within mine infrastructure.
Decommissioning costs are provided at the present value of the expenditures expected to settle the obligation, using estimated
cash flows based on current prices. The unwinding of the decommissioning obligation is included in the income statement.
Estimated future costs of decommissioning obligations are reviewed regularly and adjusted as appropriate for new circumstances
or changes in law or technology. Changes in estimates are capitalised or reversed against the relevant asset. Estimates are
discounted at a pre-tax rate that reflects current market assessments of the time value of money.
cash flows based on current prices. The unwinding of the decommissioning obligation is included in the income statement.
Estimated future costs of decommissioning obligations are reviewed regularly and adjusted as appropriate for new circumstances
or changes in law or technology. Changes in estimates are capitalised or reversed against the relevant asset. Estimates are
discounted at a pre-tax rate that reflects current market assessments of the time value of money.
Gains or losses from the expected disposal of assets are not taken into account when determining the provision.
Restoration costs
The provision for restoration represents the cost of restoring site damage after the start of production. Changes in the provision are
recorded in the income statement as a cost of production.
recorded in the income statement as a cost of production.
Restoration costs are estimated at the present value of the expenditures expected to settle the obligation, using estimated cash
flows based on current prices and adjusted for risks specific to the liability. The estimates are discounted at a pre-tax rate that
reflects current market assessments of the time value of money.
flows based on current prices and adjusted for risks specific to the liability. The estimates are discounted at a pre-tax rate that
reflects current market assessments of the time value of money.
PAGE 115
REVENUE RECOGNITION
Revenue is recognised when control of the goods passes to the customer and the performance obligations of transferring control
have been met. The amount of revenue recognised reflects the consideration to which the entity is entitled in exchange for the
goods transferred.
have been met. The amount of revenue recognised reflects the consideration to which the entity is entitled in exchange for the
goods transferred.
Revenue from product sales comprises sales of:
• refined gold;
• by-products including silver and sulphuric acid; and
• doré bars.
• by-products including silver and sulphuric acid; and
• doré bars.
Revenue from product sales is recognised at a point in time.
TAXATION
Deferred taxation is recognised on all qualifying temporary differences at the reporting date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
liabilities and their carrying amounts for financial reporting purposes.
Deferred tax assets are only recognised to the extent that it is probable that the deductible temporary differences will reverse in the
foreseeable future and future taxable profit will be available against which the temporary difference can be utilised.
foreseeable future and future taxable profit will be available against which the temporary difference can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date.
Deferred tax assets and liabilities are measured at future anticipated tax rates, which have been enacted or substantively enacted
at the reporting date.
at the reporting date.
Current and deferred tax is recognised as income or expense and included in profit or loss for the period, except to the extent that
the tax arises from a transaction or event which is recognised, in the same or a different period, in other comprehensive income or
directly in equity, or a business combination that is an acquisition.
the tax arises from a transaction or event which is recognised, in the same or a different period, in other comprehensive income or
directly in equity, or a business combination that is an acquisition.
Current tax is measured on taxable income at the applicable statutory rate enacted or substantively enacted at the reporting date.
Interest and penalties, if any, are recognised in the income statement as part of taxation expense.
Interest and penalties, if any, are recognised in the income statement as part of taxation expense.
OTHER EXPENSES AND INCOME
Items of income and expense, not included in gross profit, that are:
• material either quantitatively or qualitatively, or both;
• not directly related to current operating or financing activities; and
• not disclosed separately on the face of the income statement,
• not directly related to current operating or financing activities; and
• not disclosed separately on the face of the income statement,
are classified as Other (expenses) income on the face of the income statement.
FINANCIAL INSTRUMENTS
Financial instruments are initially recognised at fair value when the group becomes a party to their contractual arrangements.
Transaction costs directly attributable to the instrument’s acquisition or issue are included in the initial measurement of financial
assets and financial liabilities, except financial instruments classified as at fair value through profit or loss (FVTPL). The subsequent
measurement of financial instruments is dealt with below.
Transaction costs directly attributable to the instrument’s acquisition or issue are included in the initial measurement of financial
assets and financial liabilities, except financial instruments classified as at fair value through profit or loss (FVTPL). The subsequent
measurement of financial instruments is dealt with below.
Financial liabilities
Financial liabilities are classified as measured at amortised cost.
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. The group also
derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different.
In this case a new financial liability based on the modified terms is recognised at fair value.
derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different.
In this case a new financial liability based on the modified terms is recognised at fair value.
Financial assets
On initial recognition, a financial asset is classified as measured at:
• amortised cost;
• Fair value through other comprehensive income (FVTOCI) - equity instruments; or
• FVTPL.
• Fair value through other comprehensive income (FVTOCI) - equity instruments; or
• FVTPL.
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at FVTPL,
transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried
at FVTPL, are expensed.
transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried
at FVTPL, are expensed.
PAGE 116
A financial asset is measured at amortised cost if it is held within the business model whose objective is to hold assets to collect
contractual cash flows and its contractual terms give rise, on specified dates, to cash flows that are solely payments of principal
and interest on the principal amount outstanding. Interest income from these financial assets is included in finance income using
the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in
other gains or losses, together with foreign exchange gains or losses. Impairment losses are presented in the statement of profit or
loss. A gain or loss on a debt investment that is subsequently measured at FVTPL is recognised in profit or loss and presented net
within other gains or losses in the period in which it arises. On derecognition of a financial asset, the difference between the
proceeds received or receivable and the carrying amount of the asset is included in profit or loss.
contractual cash flows and its contractual terms give rise, on specified dates, to cash flows that are solely payments of principal
and interest on the principal amount outstanding. Interest income from these financial assets is included in finance income using
the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in
other gains or losses, together with foreign exchange gains or losses. Impairment losses are presented in the statement of profit or
loss. A gain or loss on a debt investment that is subsequently measured at FVTPL is recognised in profit or loss and presented net
within other gains or losses in the period in which it arises. On derecognition of a financial asset, the difference between the
proceeds received or receivable and the carrying amount of the asset is included in profit or loss.
Equity instruments
Listed equity investments which are held to meet rehabilitation liabilities are classified as FVTPL. Listed equity investments held for
other purposes are classified as FVTOCI.
Listed equity investments which are held to meet rehabilitation liabilities are classified as FVTPL. Listed equity investments held for
other purposes are classified as FVTOCI.
The group subsequently measures all equity investments at fair value. Where the group’s management has elected to present fair
value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit
or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss
as other income when the group’s right to receive payments is established. Residual values in OCI are reclassified to retained
earnings (accumulated losses) on derecognition of the related FVTOCI instruments. Changes in the fair value of financial assets at
FVTPL are recognised in other gains or losses in the statement of profit or loss as applicable.
value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit
or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss
as other income when the group’s right to receive payments is established. Residual values in OCI are reclassified to retained
earnings (accumulated losses) on derecognition of the related FVTOCI instruments. Changes in the fair value of financial assets at
FVTPL are recognised in other gains or losses in the statement of profit or loss as applicable.
Trade receivables
Trade receivables mainly comprise receivable owing from banking institutions purchasing gold bullion. Normal market settlement
terms are two working days.
Trade receivables mainly comprise receivable owing from banking institutions purchasing gold bullion. Normal market settlement
terms are two working days.
Impairment of financial assets
Financial assets at amortised cost consist of trade receivables, loans, cash and cash equivalents and debt instruments. Impairment
losses are assessed using the forward-looking expected credit loss (ECL) approach. An allowance is recorded for all loans and
other debt financial assets not held at FVTPL. The impairment methodology applied depends on whether there has been a
significant increase in credit risk. Trade receivable loss allowances are measured at an amount equal to lifetime ECL’s. Loss
allowances are deducted from the gross carrying amount of the assets. Debt securities that are determined to have a low credit risk
at the reporting date and bank balances, for which credit risk has not increased significantly since initial recognition, are measured
at an amount equal to 12-month ECL.
Financial assets at amortised cost consist of trade receivables, loans, cash and cash equivalents and debt instruments. Impairment
losses are assessed using the forward-looking expected credit loss (ECL) approach. An allowance is recorded for all loans and
other debt financial assets not held at FVTPL. The impairment methodology applied depends on whether there has been a
significant increase in credit risk. Trade receivable loss allowances are measured at an amount equal to lifetime ECL’s. Loss
allowances are deducted from the gross carrying amount of the assets. Debt securities that are determined to have a low credit risk
at the reporting date and bank balances, for which credit risk has not increased significantly since initial recognition, are measured
at an amount equal to 12-month ECL.
Fair value measurements
The group measures financial instruments at fair value at each reporting date where relevant. Fair value is the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in their economic best interest.
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in their economic best interest.
For the purpose of fair value disclosures, the group has determined classes of assets and liabilities on the basis of the nature,
characteristics and risks of the asset or liability and the level of the fair value hierarchy. The group uses valuation techniques that
are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant
observable inputs and minimising the use of unobservable inputs.
characteristics and risks of the asset or liability and the level of the fair value hierarchy. The group uses valuation techniques that
are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant
observable inputs and minimising the use of unobservable inputs.
PRINCIPAL SUBSIDIARIES AND OPERATING ENTITIES
PAGE 117
FOR THE YEAR ENDED 31 DECEMBER
Principal subsidiaries are those subsidiaries that hold material contracts and/or act as borrowers and/or guarantors of such material
contracts or operating mines.
contracts or operating mines.
Shares held
Holding
Percentage held
2019
2018
2019
2018
Principal subsidiaries and controlled operating
entities
(1)
AngloGold Ashanti Australia Limited
(2)
2
257,462,077
257,462,077
I
100
100
AngloGold Ashanti Holdings plc
6
5,326,550,917
5,326,550,917
D
100
100
AngloGold Ashanti USA Incorporated
10
235
235
D
100
100
100
Operating entities
AngloGold Ashanti Córrego do Sítio Mineração S.A.
3
4,167,084,999
4,167,084,999
I
100
AngloGold Ashanti (Ghana) Limited
(3)
4
132,419,584
132,419,584
I
100
100
AngloGold Ashanti (Iduapriem) Limited
4
66,270
66,270
I
100
100
Cerro Vanguardia S.A.
1
13,875,000
13,875,000
I
92.50
92.50
Geita Gold Mining Limited
9
123,382,772
123,382,772
I
100
100
Mineração Serra Grande S.A.
3
1,999,999
1,999,999
I
100
100
Societé AngloGold Ashanti de Guinée S.A.
5
3,486,134
3,486,134
I
85
85
Joint venture operating entities
Kibali (Jersey) Limited
(4)
7
2,324
2,324
I
50
50
Société des Mines de Morila S.A.
8
400
400
I
40
40
Société d'Exploitation des Mines d'Or de Sadiola S.A.
(5)
8
41,000
41,000
I
41
41
Unincorporated joint operation
Tropicana joint operation
2
n/a
n/a
I
70
70
D - Direct Holding
I - Indirect Holding
I - Indirect Holding
(1)
All the operations in South Africa, namely, Mine Waste Solutions and Mponeng are held by the parent company, AngloGold Ashanti Limited.
An agreement for the sale of the South African operations was announced on 12 February 2020.
(2)
Owner of the Sunrise Dam operation and the Tropicana joint operation in Australia.
(3)
Operates the Obuasi mine in Ghana.
(4)
Owner of Kibali Goldmines S.A. which operates the Kibali mine in the Democratic Republic of the Congo.
(5)
An agreement for the sale of Sadiola was announced on 23 December 2019, subject to conditions precedent.
1
Argentina
6
Isle of Man
2
Australia
7
Jersey
3
Brazil
8
Mali
4
Ghana
9
Tanzania
5
Republic of Guinea
10
United States of America
SHAREHOLDERS’ INFORMATION
PAGE 118
Number of
% of total
shares held
shareholders
% of total
shares in
shares in
issue
Number of
shareholders
Class of shareholder
AT 31 DECEMBER
According to information available to the directors, the following are the only shareholders whose holdings, directly or indirectly, are
in excess of 5% of the ordinary issued share capital of the company:
in excess of 5% of the ordinary issued share capital of the company:
Shareholders or their subsidiaries directly or indirectly
holding >5% of AngloGold Ashanti’s capital
holding >5% of AngloGold Ashanti’s capital
Ordinary shares held
2019
2018
Number
%
Number
%
Black Rock Inc.
41,236,154
9.93
32,926,713
7.98
Public Investment Corporation of South Africa
30,439,075
7.33
25,395,823
6.15
Van Eck Global
27,375,511
6.59
52,402,004
12.70
The Bank of New York Mellon holds 159,694,660 shares representing a holding of 38% (2018: 183,174,711 shares, a 44% holding)
through various custodians in respect of ADSs issued by the Bank, as AngloGold Ashanti’s ADS custodian.
through various custodians in respect of ADSs issued by the Bank, as AngloGold Ashanti’s ADS custodian.
Shareholder spread as at 31 December 2019:
Public shareholders
11,825
99.90%
414,773,830
99.87%
Non-Public
Directors
Directors
11
0.09%
353,735
0.09%
Strategic holdings (Government of Ghana)
1
0.01%
173,650
0.04%
Total
11,837
100.00%
415,301,215
100.00%
A redeemable preference shares
All redeemable preference shares are held by a
B redeemable preference shares
wholly-owned subsidiary company.
ANNUAL REPORTS
Should you wish to receive a printed copy of AngloGold Ashanti’s Annual Financial Statements 2019, please request same from the
contact persons listed at the end of this report, or from the company’s website, or from companysecretary@anglogoldashanti.com, or
PO Box 62117, Marshalltown, Johannesburg, 2107.
contact persons listed at the end of this report, or from the company’s website, or from companysecretary@anglogoldashanti.com, or
PO Box 62117, Marshalltown, Johannesburg, 2107.
GLOSSARY OF TERMS AND ABBREVIATIONS
PAGE 119
GLOSSARY OF TERMS AND NON-GAAP METRICS
During June 2013 the World Gold Council (WGC), an industry body, published a Guidance
Note on ‘all-in sustaining costs’ metric, which gold mining companies can use to supplement
their overall non-GAAP disclosure. ‘All-in sustaining costs’ is an extension of the existing
‘total cash cost’ metric and incorporates all costs related to sustaining production and in
particular recognising the sustaining capital expenditure associated with developing and
maintaining gold mines. In addition, this metric includes the cost associated with developing
and maintaining gold mines. This metric also includes the cost associated with corporate
office structures that support these operations, the community and rehabilitation costs
attendant with responsible mining and any exploration and evaluation costs associated with
sustaining current operations. All-in sustaining costs per ounce is arrived at by dividing the
dollar value of the sum of these cost metrics, by the ounces of gold sold.
Note on ‘all-in sustaining costs’ metric, which gold mining companies can use to supplement
their overall non-GAAP disclosure. ‘All-in sustaining costs’ is an extension of the existing
‘total cash cost’ metric and incorporates all costs related to sustaining production and in
particular recognising the sustaining capital expenditure associated with developing and
maintaining gold mines. In addition, this metric includes the cost associated with developing
and maintaining gold mines. This metric also includes the cost associated with corporate
office structures that support these operations, the community and rehabilitation costs
attendant with responsible mining and any exploration and evaluation costs associated with
sustaining current operations. All-in sustaining costs per ounce is arrived at by dividing the
dollar value of the sum of these cost metrics, by the ounces of gold sold.
All-in costs are all-in sustaining costs including additional non-sustaining costs which reflect
the varying costs of producing gold over the life-cycle of a mine.
the varying costs of producing gold over the life-cycle of a mine.
Non-sustaining costs are those costs incurred at new operations and costs related to ‘major
projects’ at existing operations where these projects will materially increase production.
projects’ at existing operations where these projects will materially increase production.
All-in costs per ounce is arrived at by dividing the dollar value of the sum of these cost
metrics, by the ounces of gold sold.
metrics, by the ounces of gold sold.
Any products that emanate from the core process of producing gold, including silver and
sulphuric acid.
sulphuric acid.
Total capital expenditure on tangible and intangible assets.
Profit (loss) before taxation, amortisation of tangible, intangible and right of use assets,
retrenchment costs at the operations, interest and dividend income, other gains (losses),
care and maintenance costs, finance costs and unwinding of obligations, impairment and
derecognition of assets, impairment of investments, profit (loss) on disposal of assets and
investments, gain (loss) on unrealised non-hedge derivatives and other commodity
contracts, fair value adjustments, repurchase premium and costs on settlement of issued
bonds, write-off of stockpile and heap leach inventories to net realisable value, and the share
of associates’ EBITDA.
retrenchment costs at the operations, interest and dividend income, other gains (losses),
care and maintenance costs, finance costs and unwinding of obligations, impairment and
derecognition of assets, impairment of investments, profit (loss) on disposal of assets and
investments, gain (loss) on unrealised non-hedge derivatives and other commodity
contracts, fair value adjustments, repurchase premium and costs on settlement of issued
bonds, write-off of stockpile and heap leach inventories to net realisable value, and the share
of associates’ EBITDA.
The Adjusted EBITDA calculation is based on the formula included in the Revolving Credit
Facility Agreements for compliance with the debt covenant formula.
Facility Agreements for compliance with the debt covenant formula.
The Adjusted EBITDA calculation is based on the formula included in the Revolving Credit
Facility Agreements for compliance with the debt covenant formula.
Facility Agreements for compliance with the debt covenant formula.
Current and deferred taxation as a percentage of profit before taxation.
Cash inflow from operating activities, less cash outflow from investing activities and after
finance costs, adjusted to exclude once-off acquisitions and disposals and movements in
restricted cash.
finance costs, adjusted to exclude once-off acquisitions and disposals and movements in
restricted cash.
Fair value changes on derivatives that are not designated as hedges in accordance with
IFRS 9 - Financial Instruments, and other commodity contracts.
IFRS 9 - Financial Instruments, and other commodity contracts.
Refined gold in a saleable form derived from the mining process.
Borrowings (excluding the Turbine Square Two (Pty) Limited lease), adjusted for the
unamortised portion of the rated bonds, and cumulative fair value adjustment on issued
bonds; less cash restricted for use and cash and cash equivalents.
unamortised portion of the rated bonds, and cumulative fair value adjustment on issued
bonds; less cash restricted for use and cash and cash equivalents.
Total equity adjusted for other comprehensive income, actuarial gain (loss) and deferred
taxation plus interest-bearing borrowings, less cash and cash equivalents and adjusted for
capital expenditure incurred on assets not yet in production. Where average net capital
employed is referred to, this is the average of the figures at the beginning and the end of the
financial year.
taxation plus interest-bearing borrowings, less cash and cash equivalents and adjusted for
capital expenditure incurred on assets not yet in production. Where average net capital
employed is referred to, this is the average of the figures at the beginning and the end of the
financial year.
Net cash inflow from operating activities less stay-in-business capital expenditure.
All-in sustaining costs:
All-in costs:
By-products:
Capital expenditure:
Adjusted EBITDA:
Effective tax rate:
Free cash flow:
Gain (loss) on non-hedge
derivatives and other
commodity contracts:
derivatives and other
commodity contracts:
Gold produced:
Net debt:
Net capital employed:
Operating cash flow:
PAGE 120
Capital expenditure to either bring a new operation into production; to materially increase
production capacity; or to materially extend the productive life of an asset.
production capacity; or to materially extend the productive life of an asset.
Defines the operational management divisions within AngloGold Ashanti, namely
South Africa, Continental Africa (Democratic Republic of the Congo, Ghana, Guinea, Mali
and Tanzania), Australia (Australia and surrounding areas), and the Americas (Argentina,
Brazil and Colombia).
South Africa, Continental Africa (Democratic Republic of the Congo, Ghana, Guinea, Mali
and Tanzania), Australia (Australia and surrounding areas), and the Americas (Argentina,
Brazil and Colombia).
The process of reclaiming land disturbed by mining to allow an appropriate post-mining use.
Rehabilitation standards are defined by country-specific laws, including but not limited to the
South African Department of Mineral Resources, the US Bureau of Land Management, the
US Forest Service, and the relevant Australian mining authorities, and address among other
issues, ground and surface water, topsoil, final slope gradient, waste handling and re-
vegetation issues.
Rehabilitation standards are defined by country-specific laws, including but not limited to the
South African Department of Mineral Resources, the US Bureau of Land Management, the
US Forest Service, and the relevant Australian mining authorities, and address among other
issues, ground and surface water, topsoil, final slope gradient, waste handling and re-
vegetation issues.
Capital expenditure to extend useful lives of existing production assets. This includes
replacement of vehicles, plant and machinery, Ore Reserve development, deferred stripping
and capital expenditure related to financial benefit initiatives, safety, health and the
environment.
replacement of vehicles, plant and machinery, Ore Reserve development, deferred stripping
and capital expenditure related to financial benefit initiatives, safety, health and the
environment.
Total capital expenditure less any capital expenditure that relates to project capital
expenditure and new investment/projects at all of our mines, whether they are in production
or development stage.
expenditure and new investment/projects at all of our mines, whether they are in production
or development stage.
Total cash costs include site costs for all mining, processing and administration, and are
inclusive of royalties and production taxes. Amortisation, rehabilitation, corporate
administration, retrenchment, capital and exploration costs are excluded.
inclusive of royalties and production taxes. Amortisation, rehabilitation, corporate
administration, retrenchment, capital and exploration costs are excluded.
Total cash costs per ounce are the attributable total cash costs divided by the attributable
ounces of gold produced.
ounces of gold produced.
The number of ordinary shares in issue at the beginning of the year, increased by shares
issued during the year, weighted on a time basis for the period during which they have
participated in the income of the group, and increased by share options that are virtually
certain to be exercised.
issued during the year, weighted on a time basis for the period during which they have
participated in the income of the group, and increased by share options that are virtually
certain to be exercised.
Project capital:
Region:
Rehabilitation:
Stay-in-business capital:
Sustaining capital:
Total cash costs:
Weighted average number of
ordinary shares:
ordinary shares:
PAGE 121
ABBREVIATIONS
United States dollars
Australian dollars
American Depositary Share
American Depositary Receipt
All-in costs
All-in sustaining costs
Australian Securities Exchange
Bank bill swap bid rate
Brazilian real
Billion
CHESS Depositary Interests
Clearing House Electronic Settlement System
The South African Companies Act, No. 71 of 2008, as amended
Ghanaian Depositary Share
Ghana Stock Exchange
International Accounting Standards Board
International Financial Reporting Standards
inline eXtensible Business Reporting Language
Johannesburg Interbank Agreed Rate
JSE Limited
London Interbank Offer Rate
Million, depending on the context
Million ounces
New York Stock Exchange
Ounces (troy)
Revolving Credit Facility
South African rands
United States Securities and Exchange Commission
South Africa’s Central Securities Depositary
Tanzanian Shillings
United States of America
eXtensible Business Reporting Language
$ or USD
A$ or AUD
ADS
ADR
AIC
AISC
ASX
BBSY
BRL
bn
CDI
CHESS
Companies Act
GhDS
GhSE
IASB
IFRS
i-XBRL
JIBAR
JSE
LIBOR
M or m
Moz
NYSE
oz
RCF
R, ZAR or Rand
SEC
Strate
TZS
US/USA
XBRL
FORWARD LOOKING STATEMENTS
PAGE 122
Certain statements contained in this document, other than statements of historical fact, including, without limitation, those
concerning the economic outlook for the gold mining industry, expectations regarding gold prices, production, total cash costs, all-
in sustaining costs, all-in costs, cost savings and other operating results, productivity improvements, growth prospects and outlook
of AngloGold Ashanti’s operations, individually or in the aggregate, including the achievement of project milestones,
commencement and completion of commercial operations of certain of AngloGold Ashanti’s exploration and production projects
and the completion of acquisitions, dispositions or joint venture transactions, AngloGold Ashanti’s liquidity and capital resources
and capital expenditures and the outcome and consequence of any potential or pending litigation or regulatory proceedings or
environmental health and safety issues, are forward-looking statements regarding AngloGold Ashanti’s operations, economic
performance and financial condition. These forward-looking statements or forecasts involve known and unknown risks, uncertainties
and other factors that may cause AngloGold Ashanti’s actual results, performance or achievements to differ materially from the
anticipated results, performance or achievements expressed or implied in these forward-looking statements. Although AngloGold
Ashanti believes that the expectations reflected in such forward-looking statements and forecasts are reasonable, no assurance
can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out
in the forward-looking statements as a result of, among other factors, changes in economic, social and political and market
conditions, (including as a result of the COVID-19 pandemic), the success of business and operating initiatives, changes in the
regulatory environment and other government actions, including environmental approvals, fluctuations in gold prices and exchange
rates, (including as a result of the COVID-19 pandemic), the outcome of pending or future litigation proceedings, and business and
operational risk management. For a discussion of such risk factors, refer to AngloGold Ashanti’s annual reports on Form 20-F filed
with the United States Securities and Exchange Commission. These factors are not necessarily all of the important factors that
could cause AngloGold Ashanti’s actual results to differ materially from those expressed in any forward-looking statements. Other
unknown or unpredictable factors could also have material adverse effects on future results. Consequently, readers are cautioned
not to place undue reliance on forward-looking statements. AngloGold Ashanti undertakes no obligation to update publicly or release
any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence
of unanticipated events, except to the extent required by applicable law.
concerning the economic outlook for the gold mining industry, expectations regarding gold prices, production, total cash costs, all-
in sustaining costs, all-in costs, cost savings and other operating results, productivity improvements, growth prospects and outlook
of AngloGold Ashanti’s operations, individually or in the aggregate, including the achievement of project milestones,
commencement and completion of commercial operations of certain of AngloGold Ashanti’s exploration and production projects
and the completion of acquisitions, dispositions or joint venture transactions, AngloGold Ashanti’s liquidity and capital resources
and capital expenditures and the outcome and consequence of any potential or pending litigation or regulatory proceedings or
environmental health and safety issues, are forward-looking statements regarding AngloGold Ashanti’s operations, economic
performance and financial condition. These forward-looking statements or forecasts involve known and unknown risks, uncertainties
and other factors that may cause AngloGold Ashanti’s actual results, performance or achievements to differ materially from the
anticipated results, performance or achievements expressed or implied in these forward-looking statements. Although AngloGold
Ashanti believes that the expectations reflected in such forward-looking statements and forecasts are reasonable, no assurance
can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out
in the forward-looking statements as a result of, among other factors, changes in economic, social and political and market
conditions, (including as a result of the COVID-19 pandemic), the success of business and operating initiatives, changes in the
regulatory environment and other government actions, including environmental approvals, fluctuations in gold prices and exchange
rates, (including as a result of the COVID-19 pandemic), the outcome of pending or future litigation proceedings, and business and
operational risk management. For a discussion of such risk factors, refer to AngloGold Ashanti’s annual reports on Form 20-F filed
with the United States Securities and Exchange Commission. These factors are not necessarily all of the important factors that
could cause AngloGold Ashanti’s actual results to differ materially from those expressed in any forward-looking statements. Other
unknown or unpredictable factors could also have material adverse effects on future results. Consequently, readers are cautioned
not to place undue reliance on forward-looking statements. AngloGold Ashanti undertakes no obligation to update publicly or release
any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence
of unanticipated events, except to the extent required by applicable law.
All subsequent written or oral forward-looking statements attributable to AngloGold Ashanti or any person acting on its behalf are
qualified by the cautionary statements herein.
qualified by the cautionary statements herein.
Non-GAAP financial measures
This communication may contain certain “Non-GAAP” financial measures. AngloGold Ashanti utilises certain Non-GAAP
performance measures and ratios in managing its business. Non-GAAP financial measures should be viewed in addition to, and
not as an alternative for, the reported operating results or cash flow from operations or any other measures of performance prepared
in accordance with IFRS. In addition, the presentation of these measures may not be comparable to similarly titled measures other
companies may use.
performance measures and ratios in managing its business. Non-GAAP financial measures should be viewed in addition to, and
not as an alternative for, the reported operating results or cash flow from operations or any other measures of performance prepared
in accordance with IFRS. In addition, the presentation of these measures may not be comparable to similarly titled measures other
companies may use.
ADMINISTRATIVE AND CORPORATE INFORMATION
PAGE 123
AngloGold Ashanti Limited
Registration No. 1944/017354/06
Incorporated in the Republic of South Africa
Incorporated in the Republic of South Africa
Share codes:
ISIN: ZAE000043485
JSE: ANG
NYSE: AU
ASX: AGG
GhSE:(Shares) AGA
GhSE: (GhDS) AAD
JSE: ANG
NYSE: AU
ASX: AGG
GhSE:(Shares) AGA
GhSE: (GhDS) AAD
JSE Sponsor:
The Standard Bank of South Africa Limited
The Standard Bank of South Africa Limited
Auditors: Ernst & Young Inc.
Offices
Registered and Corporate
76 Rahima Moosa Street
Newtown 2001
(PO Box 62117, Marshalltown 2107)
South Africa
Telephone: +27 11 637 6000
Fax: +27 11 637 6624
76 Rahima Moosa Street
Newtown 2001
(PO Box 62117, Marshalltown 2107)
South Africa
Telephone: +27 11 637 6000
Fax: +27 11 637 6624
Australia
Level 23, AMP Building,
140 St George’s Terrace
Perth, WA 6000
(PO Box Z5046, Perth WA 6831)
Australia
Telephone: +61 8 9425 4602
Fax: +61 8 9425 4662
Level 23, AMP Building,
140 St George’s Terrace
Perth, WA 6000
(PO Box Z5046, Perth WA 6831)
Australia
Telephone: +61 8 9425 4602
Fax: +61 8 9425 4662
Ghana
Gold House
Patrice Lumumba Road
(PO Box 2665)
Accra
Ghana
Telephone: +233 303 773400
Fax: +233 303 778155
Gold House
Patrice Lumumba Road
(PO Box 2665)
Accra
Ghana
Telephone: +233 303 773400
Fax: +233 303 778155
Directors
Executive
KPM Dushnisky
KPM Dushnisky
§
(Chief Executive Officer)
KC Ramon
^
(Chief Financial Officer)
Non-Executive
SM Pityana^ (Chairman)
AM Ferguson*
AH Garner#
R Gasant^
NP January-Bardill^
NVB Magubane^
M Ramos^
MDC Richter#
RJ Ruston~
JE Tilk
SM Pityana^ (Chairman)
AM Ferguson*
AH Garner#
R Gasant^
NP January-Bardill^
NVB Magubane^
M Ramos^
MDC Richter#
RJ Ruston~
JE Tilk
§
* British § Canadian #American
~ Australian ^South African
~ Australian ^South African
Officers
ME Sanz Perez
Executive Vice President
General Counsel, Compliance and Company
Secretary
ME Sanz Perez
Executive Vice President
General Counsel, Compliance and Company
Secretary
Investor Relations contacts
Sabrina Brockman
Telephone: +1 646 880 4526
Mobile: +1 646 379 2555
E-mail: sbrockman@anglogoldashanti.com
Telephone: +1 646 880 4526
Mobile: +1 646 379 2555
E-mail: sbrockman@anglogoldashanti.com
Yatish Chowthee
Telephone: +27 11 637 6273
Mobile: +27 78 364 2080
E-mail: yrchowthee@anglogoldashanti.com
Telephone: +27 11 637 6273
Mobile: +27 78 364 2080
E-mail: yrchowthee@anglogoldashanti.com
Fundisa Mgidi
Telephone: +27 11 637 6763
Mobile: +27 82 821 5322
E-mail: fmgidi@anglogoldashanti.com
Telephone: +27 11 637 6763
Mobile: +27 82 821 5322
E-mail: fmgidi@anglogoldashanti.com
AngloGold Ashanti website
www.anglogoldashanti.com
www.anglogoldashanti.com
Share Registrars
South Africa
Computershare Investor Services (Pty) Limited
Rosebank Towers, 15 Biermann Avenue,
Rosebank, 2196
(Private Bag X9000, Saxonwold, 2132)
South Africa
Telephone: 0861 100 950 (in SA)
Fax: +27 11 688 5218
E-mail: queries@computershare.co.za
Website : www.computershare.com
Computershare Investor Services (Pty) Limited
Rosebank Towers, 15 Biermann Avenue,
Rosebank, 2196
(Private Bag X9000, Saxonwold, 2132)
South Africa
Telephone: 0861 100 950 (in SA)
Fax: +27 11 688 5218
E-mail: queries@computershare.co.za
Website : www.computershare.com
Australia
Computershare Investor Services Pty Limited
Level 11, 172 St George's Terrace
Perth, WA 6000
(GPO Box D182 Perth, WA 6840)
Australia
Telephone: +61 8 9323 2000
Telephone: 1300 55 2949 (Australia only)
Fax: +61 8 9323 2033
Computershare Investor Services Pty Limited
Level 11, 172 St George's Terrace
Perth, WA 6000
(GPO Box D182 Perth, WA 6840)
Australia
Telephone: +61 8 9323 2000
Telephone: 1300 55 2949 (Australia only)
Fax: +61 8 9323 2033
Ghana
NTHC Limited
Martco House
Off Kwame Nkrumah Avenue
PO Box K1A 9563 Airport
Accra
Ghana
Telephone: +233 302 235814/6
Fax: +233 302 229975
NTHC Limited
Martco House
Off Kwame Nkrumah Avenue
PO Box K1A 9563 Airport
Accra
Ghana
Telephone: +233 302 235814/6
Fax: +233 302 229975
ADR Depositary
BNY Mellon (BoNY)
BNY Shareowner Services
PO Box 30170
College Station, TX 77842-3170
United States of America
Telephone: +1 866-244-4140 (Toll free in USA) or
BNY Mellon (BoNY)
BNY Shareowner Services
PO Box 30170
College Station, TX 77842-3170
United States of America
Telephone: +1 866-244-4140 (Toll free in USA) or
+1 201 680 6825 (outside USA)
E-mail:
shrrelations@cpushareownerservices.com
Website: www.mybnymdr.com
shrrelations@cpushareownerservices.com
Website: www.mybnymdr.com
Global BuyDIRECT
SM
BoNY maintains a direct share purchase and
dividend reinvestment plan for ANGLOGOLD
ASHANTI.
Telephone: +1-888-BNY-ADRS
dividend reinvestment plan for ANGLOGOLD
ASHANTI.
Telephone: +1-888-BNY-ADRS
--
-
ANGLOGOLD ASHANTI
www.anglogoldashanti.com
www.aga-reports.com
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
AngloGold Ashanti Limited
Date: March 27, 2020
By:
/s/ M E SANZ PEREZ
Name:
M E Sanz Perez
Title:
EVP: Group Legal, Commercial & Governance