UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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 May 19, 2014

This Report on Form 6-K shall be incorporated by reference in

our automatic shelf Registration Statement on Form F-3 as amended (File No. 333-182712) and our Registration

Statements on Form S-8 (File Nos. 333-10990 and 333-113789) as amended, to the extent not superseded by

documents or reports subsequently filed by us under the Securities Act of 1933 or the Securities Exchange Act of

1934, in each case as amended

Commission file number: 1-14846

 

 

      AngloGold Ashanti Limited      

(Name of Registrant)

76 Jeppe Street

Newtown, Johannesburg, 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: 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):

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):

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.

Yes: ¨        No: x

 

Enclosures:		Unaudited condensed financial statements as of March 31, 2014 and for each of the three month periods ended March 31, 2014 and 2013, prepared in accordance with IFRS, and related management’s discussion.

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Report

for the quarter ended 31 March 2014

 

v

Production 1.06Moz improving 17% year-on-year

v

International operations see 34% rise in output to 765,000oz year-on-year

v

South Africa production down 11% to 290,0000z year-on-year

v

Tropicana contributes 84,0000z

v

Kibali contributes 51,000oz

v

Net cash flow from operating activities stable year-on-year at $350m, despite 21% lower gold price

 

				ended Mar 2014				Quarter     ended Dec 2013				ended Mar 2013				Year ended Dec 2013
								US dollar / Imperial
Operating review
Gold
Produced		- oz (000)			1,055				1,229				899				4,105
Sold		- oz (000)			1,097				1,191				927				4,093
Price received 1		- $/oz sold			1,290				1,271				1,636				1,401
All-in sustaining cost 2		- $/oz sold			993				1,015				1,275				1,174
Total cash costs 3		- $/oz produced			770				748				894				830
Financial review
Gold income		- $m			1,324				1,418				1,463				5,497
Cost of sales		- $m			(1,012)				(1,042)				(1,029)				(4,146)
Total cash costs 3		- $m			778				861				797				3,297
Production costs 4		- $m			806				866				814				3,384
Gross profit		- $m			296				404				434				1,445
Profit (loss) attributable to equity shareholders		- $m			39				(305)				239				(2,230)
		- cents/share			10				(75)				62				(568)
Headline earnings (loss) 5		- $m			38				(276)				259				78
		- cents/share			9				(68)				67				20
Dividends per ordinary share		- cents/share			-				-				5				5
Net cash flow from operating activities		- $m			350				431				356				1,246
Capital expenditure		- $m			274				477				512				1,993

 

Notes:		1.		Refer to note A “Non-GAAP disclosure” for the definition.
		2.		Refer to note B “Non-GAAP disclosure” for the definition.		$ represents US dollar, unless otherwise stated.
		3.		Refer to note C “Non-GAAP disclosure” for the definition.		Rounding of figures may result in computational discrepancies.
		4.		Refer to note 3 of notes for the quarter ended 31 March 2014
		5.		Refer to note 9 of notes for the quarter ended 31 March 2014

Certain statements contained in this document, other than statements of historical fact, including, without limitation, those concerning the economic outlook for the gold mining industry, expectations regarding gold prices, production, cash costs, all-in sustaining costs, cost savings and other operating results, return on equity, productivity improvements, growth prospects and outlook of AngloGold Ashanti’s operations, individually or in the aggregate, including the achievement of project milestones, commencement and completion of commercial operations of certain of AngloGold Ashanti’s exploration and production projects and the completion of acquisitions and dispositions, AngloGold Ashanti’s liquidity and capital resources and capital expenditures and the outcome and consequence of any potential or pending litigation or regulatory proceedings or environmental health and safety issues, are forward-looking statements regarding AngloGold Ashanti’s operations, economic performance and financial condition. These forward-looking statements or forecasts involve known and unknown risks, uncertainties and other factors that may cause AngloGold Ashanti’s actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied in these forward-looking statements. Although AngloGold Ashanti believes that the expectations reflected in such forward-looking statements and forecasts are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of, among other factors, changes in economic, social and political and market conditions, the success of business and operating initiatives, changes in the regulatory environment and other government actions, including environmental approvals, fluctuations in gold prices and exchange rates, 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 report on Form 20-F for the year ended 31 December 2013 which was filed with the United States Securities and Exchange Commission (“SEC”) on 14 April 2014. 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.

This communication may contain certain “Non-GAAP” financial measures. AngloGold Ashanti utilises certain Non-GAAP peformance 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.

 

 

		Quarter 1 2014

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Operations at a glance

for the quarter ended 31 March 2014

		Production												All-in sustaining costs1												Total cash costs 2
		oz (000)				Year-on-year % Variance 3				Qtr on Qtr % Variance 4				$/oz				Year-on-year % Variance 3				Qtr on Qtr % Variance 4				$/oz				Year-on-year % Variance 3				Qtr on Qtr % Variance 4
SOUTH AFRICA			290				(11	)			(14	)			975				(14	)			(3	)			797				(11	)			4
Vaal River Operations
Great Noligwa			17				(29	)			(15	)			1,200				(3	)			(7	)			1,123				1				9
Kopanang			29				(38	)			(26	)			1,320				7				2				1,074				15				18
Moab Khotsong			55				28				(18	)			802				(49	)			(10	)			646				(39	)			8
West Wits Operations
Mponeng			76				(18	)			(18	)			930				-				(3	)			709				-				8
TauTona			52				(10	)			(16	)			916				(31	)			8				774				(28	)			(4	)
Total Surface Operations			60				(5	)			3				1,000				20				(4	)			836				4				(9	)
INTERNATIONAL OPERATIONS
CONTINENTAL AFRICA			374				36				(19	)			1,042				(24	)			(8	)			808				(19	)			(4	)
DRC
Kibali - Attr. 45% 5			51				-				28				572				-				22				538				-				14
Ghana
Iduapriem			45				10				(33	)			898				(30	)			(22	)			716				(32	)			(26	)
Obuasi			53				8				(16	)			1,530				(41	)			(26	)			1,234				(29	)			(9	)
Guinea
Siguiri - Attr. 85%			70				13				(7	)			961				(18	)			(14	)			800				(20	)			(5	)
Mali
Morila - Attr. 40% 5			10				(33	)			(17	)			1,598				81				11				1,099				42				29
Sadiola - Attr. 41% 5			19				-				(21	)			1,404				7				(14	)			1,262				14				(16	)
Yatela - Attr. 40% 5			4				(60	)			(50	)			2,062				53				(7	)			1,804				37				(6	)
Namibia
Navachab			16				14				(11	)			785				(22	)			49				771				(14	)			47
Tanzania
Geita			106				61				(31	)			1,048				19				34				631				62				16
Non-controlling interests, exploration and other
AUSTRALASIA			155				154				(8	)			929				(50	)			22				779				(40	)			22
Australia
Sunrise Dam			71				16				(30	)			1,095				(37	)			36				1,066				(15	)			56
Tropicana - Attr. 70%			84				-				27				694				-				8				495				-				(13	)
Exploration and other
AMERICAS			236				1				(10	)			879				(5	)			(1	)			668				-				5
Argentina
Cerro Vanguardia - Attr. 92.50%			58				5				(5	)			800				(16	)			(6	)			644				10				(4	)
Brazil
AngloGold Ashanti Mineração			94				2				(22	)			805				(14	)			(10	)			619				(10	)			19
Serra Grande			32				-				(6	)			1,027				8				7				799				1				12
United States of America
Cripple Creek & Victor			52				(5	)			11				1,015				37				(6	)			699				9				(15	)
Non-controlling interests, exploration and other
OTHER
Sub-total			1,055				17				(14	)			993				(22	)			(2	)			770				(14	)			3

¹ Refer to note B under “Non-GAAP disclosure” for definition and the “Summary of Operations by Mine” section for additional information.

² Refer to note C under “Non-GAAP disclosure” for definition and the “Summary of Operations by Mine” section for additional information.

³ Variance March 2014 quarter on March 2013 quarter - increase (decrease).

⁴ Variance March 2014 quarter on December 2013 quarter - increase (decrease).

⁵ Equity accounted joint ventures.

Rounding of figures may result in computational discrepancies.

 

				1

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Financial and Operating Report

OVERVIEW FOR THE QUARTER

FINANCIAL AND CORPORATE REVIEW

Gold income decreased by $139 million from $1,463 million in the quarter ended 31 March 2013 to $1,324 million in the same period of 2014, representing a 10 percent decrease over the period. The decrease was mainly due to the $346 per ounce, or 21 percent, decrease in gold price received from $1,636 per ounce for the quarter ended 31 March 2013 to $1,290 per ounce for the same period in 2014. The decrease was partially offset by a 17 percent, or 160koz, increase in production from 0.9Moz for the quarter ended 31 March 2013 to 1.06Moz for the same period in 2014.

Production costs decreased from $814 million in the quarter ended 31 March 2013 to $806 million in the quarter ended 31 March 2014, which represents a $8 million, or 1 percent decrease. The decrease was primarily due to a decrease in operational costs including labour, contractor costs and the weakening of local currencies against the US dollar.

Labour costs decreased from $310 million in the quarter ended 31 March 2013 to $271 million in the same period of 2014, which represents a $39 million, or 13 percent, decrease. The decrease was mainly due to rationalisation across the group.

Contractor costs decreased from $162 million in the quarter ended 31 March 2013 to $139 million in the quarter ended 31 March 2014, which represents a $23 million, or 14 percent, decrease. The decrease in contractor costs was primarily a result of the engagement of a new contractor at Iduapriem in Ghana and the lower utilisation of mine contractors at Siquiri in Guinea.

The decrease in production costs was partially offset by an increase of $34 million, or 23 percent, in fuel, power and services costs from $145 million in the quarter ended 31 March 2013 to $179 million in the same period of 2014. Rehabilitation costs increased by $12 million in the quarter ended 31 March 2014 compared to the first quarter of 2013 due to changes in cash flows and discount rates.

Cost of sales amounted to $1,012 million for the quarter ended 31 March 2014 compared to $1,029 million for the same period in 2013. Included in cost of sales is amortisation of tangible and intangible assets and change in inventory, which decreased from $215 million in the quarter ended 31 March 2013 to $206 million in the same period of 2014.

Net profit attributable to equity shareholders for the quarter ended 31 March 2014 was $39m, compared to a net profit of $239m for the quarter ended 31 March 2013.

Operational performance for the first quarter was strong with both production and costs coming in better than market guidance. Production was 1,055koz at an average total cash cost of $770/oz, compared to 1,229koz at $748/oz the previous quarter and 899koz at $894/oz in the first quarter of 2013. Year-on-year costs benefited from higher output, weaker currencies and early indications are that a range of cost saving initiatives continue to gain traction.

“Our operators have delivered another strong performance and we continue to manage costs aggressively,” Srinivasan Venkatakrishnan, Chief Executive Officer of AngloGold Ashanti, said. “There’s still plenty of work to do, but with a strong team intact, a good foundation, and some significant wins under our belt, we remain focused on continuing to deliver positive results to our shareholders under tough market conditions.”

Production from most operating regions improved year-on-year, with the exception of the South Africa region, where marginal and loss-making ounces have been removed from the production profile. In addition, the region struggled with a slower-than-anticipated start-up after the Christmas break and interruptions from safety-related stoppages, following a challenging safety performance for the gold sector in general. South African operations saw an 11% year-on-year decline to 290koz; Continental Africa improved 36% to 374koz; the Americas gained 1% to 236koz; and Australia was up 154% to 155koz. Continental Africa and Australia both benefited from the inclusion of new mining operations at Kibali and Tropicana, respectively.

 

				2

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Total cash costs dropped $124/oz compared to the previous year, from $894/oz to $770/oz, reflecting significant improvements from a combination of cost saving initiatives, currency weakness, removal of some marginal and loss-making production and higher output in some areas. All-in sustaining costs (AISC) were $993/oz, a 22% improvement year-on-year, and 2% lower than the previous quarter. The year-on-year decline in AISC was due to lower sustaining capital expenditure, improved cash costs and further reductions in corporate costs ($40m) and sustaining exploration expense ($21m).

Total capital expenditure during the first quarter was $274m (including equity accounted joint ventures), compared with $477m the previous quarter and $512m in the first quarter of last year. This was due to a temporary decrease in expenditure at Kibali and Obuasi. Of the total capital spent, project capital expenditure during the quarter amounted to $115m.

As at 31 March 2014, total borrowings (including a bank overdraft) amounted to $3,826 million and cash and cash equivalents amounted to $525 million.

Summary of quarter-on-quarter operating and cost improvements:

 

Performance update		Q1 2014		Q1 2013		Year on year change
Gold price received ($/oz)		1,290 X		1,636		(21%)
Gold Production (Koz)		1,055  ü		899		17%
Total cash costs ($/oz)		770 ü		894		14%
Corporate and marketing costs* ($m)		25 ü		65		62%
Exploration and evaluation costs ($m)		30 ü		79		62%
Capital expenditure ($m)		274 ü		512		47%
All-in sustaining costs**($/oz)		993 ü		1,275		22%
Cash flow from operating activities ($m)		350 X		356		(2%)

     * including administration and other expenses.

     ** World Gold Council Standard, excludes stockpiles written off.

CORPORATE UPDATE

Addressing the underperformance at Obuasi remains a key objective for AngloGold Ashanti. The restructuring and repositioning of the Obuasi mine, which is subject to a number of consents, is likely to result in a substantial reduction in the mine’s existing operations and significant work force redundancies (which we currently estimate at approximately $220m). Fundamental changes aimed at systemically addressing legacies, infrastructure, development constraints and cash outflows are being implemented. This work includes initiatives to reduce the footprint of the operation and consolidate infrastructure, lower operating costs by introducing a mechanised mining approach in the future, together with the refurbishment and automation of the processing plant. AngloGold Ashanti is also considering other strategic alternatives for its Ghana business.

 

				3

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UPDATE ON CAPITAL PROJECTS

At the Kibali project, a joint venture between state-owned Sokimo (10%), AngloGold Ashanti (45%) and operator Randgold Resources (45%), steady production ramp-up progress is being made by Randgold Resources. The development work on the twin declines is progressing well with a total of 1,656 lateral metres achieved this quarter, exceeding plans by 12.5%. The major equipment on the sulphide circuit has been commissioned. The focus for the next quarter is the completion and handover of the metallurgical plant and the commissioning of the Nzoro hydro power station. The vertical shaft also continues to make good progress and is currently 5% ahead of plan. The vertical shaft depth at the end of March was 416.5m.

In the Americas, the Mine Life Extension project at CC&V is progressing in line with expectations. The mill schedule is expected for commissioning/production ramp up in the fourth quarter of 2014, with full production in 2016. The valley heap leach facility (VLF) and associated gold recovery plant is on schedule to commission mid-2016. The planned VLF2/ADR2 schedule is as follows:

 

•

2014: complete lining the pregnant solution pond area (triple lined area) and start filling the area for the ADR2 (the gold recovery plant) platform.

 

•

2015: complete the ADR2 pad, construct the ADR2 plant (the gold recovery plant), and start loading ore on the first phase VLF2.

 

•

2016: commission ADR2/VLF2 and start gold production.

As of 31 March 2014, overall project progress is 40% complete. The mill is largely on schedule to commission and we expect first gold production in the fourth quarter of 2014. Overall construction of the mill is 65% complete. To help facilitate the construction completion schedule, additional man-shifts, including nights and weekends, have been added to the work schedule. Mill concrete construction is 73% complete with 8.4k cubic-yards of concrete poured. A total of 1,150 tons of steel has been erected, which represents 35% of the total steel planned.

UPDATE ON COST OPTIMISATION AND PORTFOLIO REVIEW

Cost optimisation and portfolio review: A process remains underway to improve efficiency across the business, to identify long-term savings in the company’s direct and indirect cost base and to optimise capital expenditure. The previously announced Project 500 initiatives remain on track with the goal to realise approximately $500m of cost savings by the end of the year. Achievements resulting from these initiatives include:

 

—

In the South Africa region, savings of $56m were achieved during the first quarter through the deferment of capital expenditure, labour and contractor reductions, a decrease in consumables, the implementation of service optimisation strategies and a critical review of commodity as well as services related contracts.

 

—

Contract mining rates at Siguiri and Sadiola were reduced by between 16% and 14%, delivering an annual saving of $15m.

 

—

Negotiated a 32% lower Cyanide price for our West African operations, for an annual saving of roughly $10.5m. In addition, improved Cyanide control systems have further lowered costs at various sites, including Iduapriem, which has cut usage by 30%.

 

—

The number of global expatriates on mine sites has been reduced resulting in a saving of more than $10m at the end of March 2014.

 

—

Consumable stores inventory in Continental Africa has been reduced by $52m since July 2013.

 

—

Sunrise Dam has improved Jumbo development rates from 330m to 420m per month, coupled with a 10% improvement in trucking productivities over the same period. This has allowed the mine to demobilise two trucks and one loader.

 

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SA LABOUR UPDATE

The two-year wage agreement which was concluded in September 2013 was implemented and backdated to 1 July 2013. AMCU voluntarily participated in the negotiations but has not yet signed the wage agreement. However, the wage agreement was extended to all employees regardless of their respective union affiliations and as a result the AMCU members have all benefited from the resulting wage increase.

On 30 January 2014, the Labour Court declared a threatened AMCU strike unprotected, with an interim interdict for any possible strike. AMCU has since applied for a court hearing on a constitutional point which will be heard on 5 June 2014. The current interdict remains in place until the matter is finalised in the Labour Court.

TECHNOLOGY AND INNOVATION UPDATE

During the first quarter, the Technology Innovation Consortium has continued to make considerable progress in prototype development pertaining to certain key technologies that seek to establish the base for a safe, automated mining method intended selective for use at AngloGold Ashanti’s deep-level underground mining operations in South Africa.

Although achieving good results in several of the drilling aspects (skin-to-skin), the challenge to mine “All the Gold” with no dilution remains. In this respect, work is currently focused on drilling an overlapping hole configuration.

Progress on various aspects of the Tau Tona project are as follows:

Reef Boring (Stoping): In the first quarter, four single-pass (660mm) holes were drilled. In line with our efforts to test and extract all the gold, holes 18, 19 and 20 have been drilled directly adjacent to (‘skin-to-skin’) previously drilled and backfilled holes. The overall results proved to be successful and the data gathered together with the knowledge of the ground conditions will be applied to enhance drilling of new holes. In addition, the production drilling sequence is also being tested and the results obtained will be applied to the production site once drilling commences. Hole 21 was drilled as the first hole in this sequence.

Site Equipping: Site equipping, opening up and development of the 2014 production sites is progressing according to schedule. The first production site at TauTona mine will go live in the second quarter, followed by a site at Great Noligwa and a second site at TauTona, during the second quarter.

Potential drilling sites for 2015 production have been identified. Labour recruitment, development and equipping are in progress.

Machine Manufacturing: The medium reef (width 40-80cm) Atlantis Mark 3 machine was delivered at the TauTona mine to align with the production start-up schedule in the second quarter. Machine manufacturing is continuing with the next machines to be delivered in accordance with the respective production start-up schedules at the other business units.

Ultra High Strength Backfill (UHSB): Construction of the underground backfill plant is in progress and is on schedule to coincide with the start-up of the first production site in the second quarter at TauTona mine. A replica of the underground production site mixers have been constructed on surface to confirm the mixing cycles and also to gather information to automate the underground plant to ensure operational readiness.

Ore body Knowledge and Exploration: Trial 4, aimed at achieving a hole depth of 150m at 8m/hr, was completed during the quarter and a total of 5 holes were drilled. The results obtained were promising as they reached the required depth and speed. Surveying of the holes has commenced where the Gyro will be tested for hole deflection, the camera for geological structure and lastly the Gamma for reef intersection.

 

				5

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The strategy for the second quarter of 2014 is to test a different drilling technique (rotary percussion drilling) using the same drilling system with the aim to compare the speed and accuracy of results. In the latter part of the year, we expect the team will continue with reverse circulation tests incorporating a new high pressure compressor with the objective of achieving a hole depth of 300m at 8m/hr.

SAFETY

The All-Injury Frequency Rate (AIFR) improved 3% compared to the first quarter of 2013. The safety focus continues on Major Hazard Management through identification and monitoring of critical controls and High Potential Incidents (HPIs) with a view of enhancing organisational learning and institutionalising change in order to improve our safety record progress going forward. Given that the occurrence of HPIs in the past correlates with fatal incidents experienced by the business, they used as learning opportunities to prevent future occurrences.

Kopanang made history on 10 March 2014 as it became the first AngloGold Ashanti mine in South Africa to achieve three million fatality-free shifts.

Tragically, however, two incidents resulted in three fatalities during the quarter. There was one fatality at the Mponeng project in South Africa, and two contractor employees lost their lives at a single incident at the Cuiabá mine in Brazil whilst renovating the vent shaft.

OPERATING HIGHLIGHTS

The South African operations produced 290koz during the first quarter at a total cash cost of $797/oz, compared to 327koz at a total cash cost of $896/oz, the same quarter a year ago. The region was negatively impacted by safety-related disruptions, which resulted in lost production of approximately 19koz, coupled with the slow ramp-up to production subsequent to the year-end break. The all-in sustaining costs for the region at $975/oz during the quarter reflects a 14% improvement compared to $1,129/oz during the same period a year ago. Overall performance of Ore Reserve Development (ORD) from the region was impacted during the quarter as a result of the stoppages, particularly at Mponeng and Kopanang.

At the West Wits operations, the first quarter performance was adversely affected by a continued increase in seismic activity and safety stoppages. Production for the first quarter was 128koz compared to 151koz achieved a year ago. The 13% decrease in cash costs for the West Wits operations is testimony to the vigorous cost optimisation measures that have been implemented. Mponeng reflected a 29% rise in yield compared to the same quarter last year as a result of targeting reduced stope-widths and reduced intake of waste tonnages, which increased overall grade.

Vaal River operations saw a decrease in production in the first quarter to 102koz compared to the 114koz a year ago. Kopanang was hardest hit as production was severely impacted by safety stoppages by the regulator on the back of engineering constraints and a power outage from the Eskom main substation. Moab Khotsong once again saw an increase in average recovered grade. This favourable yield was achieved through a reduction in dilution due to a decrease in stope width and higher average reef grade being mined. Despite the decline in production, costs were closely managed. Moab Khotsong was the lowest cost producer for the South African region at a total cash cost of $646/oz and all-in sustaining cost of $802/oz.

Production at Surface operations in the first quarter was 60koz at a total cash cost of $836/oz, compared to 63koz at $805/oz a year ago. The operations were negatively affected by severe rainfalls and load shedding by Eskom. Grades reflected minimal improvement specifically at Mine Waste Solutions where operations shifted to reclamation sites with lower gold recovery rates. Inclement weather conditions, logistical and safety challenges were encountered with the commissioning of the uranium circuit at Mine Waste Solutions, which will not only allow uranium production, but also improve gold recovery rates. The commissioning is now scheduled to be completed in the second quarter of 2014.

 

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The Continental Africa Region production during the first quarter was 374koz at a total cash cost $808/oz, with production 36% higher than the same quarter last year (17% higher excluding Kibali). The all-in sustaining costs for the region were $1,042/oz.

In Ghana, Obuasi’s production was 53koz at a total cash cost of $1,234/oz, compared to 49koz at a total cash cost of $1,742/oz a year ago reflecting an improvement in tonnage throughput. Operations during the quarter experienced extended power interruptions which limited access to higher grade areas. Total cash costs saw the benefit of cost savings, particularly on labour rationalisation.

Iduapriem’s production was 45koz at a total cash cost of $716/oz, compared to 41koz a year ago. Total cash costs decreased by 32% to $716/oz compared to $1,052 in the same quarter a year ago, mainly due to lower volumes being mined and an increase in the processing of stockpiled ore.

At Geita, in Tanzania, production in the first quarter was 106koz compared to 66koz in the same quarter a year ago, when production was affected by the replacement of the SAG mill. While production was, however, impacted by downtime associated with SAG and Ball mill relining work, this work was done in less time than anticipated, allowing for strong reported tonnage throughput together with consistent high recovery and feed grade. Total cash costs at $631/oz benefited from lower mining contractor costs.

In the Republic of Guinea, Siguiri’s production was 70koz at a total cash cost of $800/oz compared to 62koz at $998/oz in the same quarter a year ago. The operation has achieved its ninth consecutive quarter of exceeding planned quarterly production targets as it continues to focus on improved planning to increase volumes and achieve further cost savings resulting from improved operating efficiencies.

In the DRC, Kibali’s production was 51koz at a total cash cost of $538/oz. Production is 28% higher than the previous quarter as a result of a 51% increase in tonnage throughput as the operation continues to ramp up to capacity after commissioning in the previous quarter.

In the Americas, production during the first quarter was 236koz, at total cash cost of $668/oz compared to 234koz at a total cash costs of $668/oz a year ago. In Brazil, AngloGold Ashanti Mineração production was 94koz at a total cash cost of $619/oz in the first quarter of 2014 compared to 92koz at $689/oz in the same quarter a year ago. At Cuiabá, which is a part of the AngloGold Ashanti Mineração complex, higher grades helped to offset the lower tonnage rates that were a result of fleet availability constraints and disruptions following the fatal accident at the mine. Total cash costs benefited from lower cost of equipment maintenance and general expenses as a result of work associated with Project 500. Serra Grande maintained production at 32koz at a total cash cost of $799/oz compared to a year ago.

Production at Cripple Creek & Victor, in the US, was 52koz at a total cash costs of $699/oz compared to 55koz at a total cash cost of $643/oz a year ago. The lower production and higher costs can be attributed to lower grades and a slight decrease in the strip ratio. Stockpiling continues at the operation with both leach grade and mill grade material, to ensure that production can commence at the mill as soon as it is online. Approximately 383k tons of ~0.06oz/t has been stockpiled year to date for the mill.

In Argentina, Cerro Vanguardia´s production was 58koz at total cash cost of $644/oz compared to 55koz at $583/oz in the same quarter a year ago. Costs at the operation have benefitted from lower service and maintenance costs and lower consumption of chemicals and other materials; however this was more than offset by lower by-product credits and an increase in local inflation.

The Australasia region produced 155koz at a total cash cost of $779/oz compared to 61koz at a total cash cost of $1,302/oz a year ago significantly benefitting from the Tropicana ramp-up. At Sunrise Dam, production was 71koz at a total cash cost of $1,066/oz compared to 61koz at $1,247/oz a year ago. The quarter experienced favourable mill throughput and recovery rates, with the mine now operating exclusively underground. A total of 168m of underground capital development and 2,347m of operational development were completed during the quarter. Four RC rigs were operating underground, producing positive results to support a large bulk-mining opportunity of approximately 3g/t, for 2014 and beyond; two stopes of approximately 200,000t and 175,000t were identified. The underground ore production for the month of March was 211,000t, surpassing 200,000t for the first time, whilst mill throughput averaged 10,156 t/day, with a recovery rate of 87.2%.

 

				7

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At Tropicana, despite wet weather conditions, production progressed well, delivering 84koz at a total cash cost of $495/oz. As planned, production was 27% higher than the 66koz produced in the previous quarter, with commensurate cost benefit. The processing plant achieved the commissioning ramp-up target of 95% availability at design ore throughput levels within six months, as planned. Major rainfall flooded a portion of the mine access road during the quarter, but alternative road access was arranged without any loss of production. Tropicana is a joint venture between 70% AngloGold Ashanti and 30% Independence Group NL.

EXPLORATION

Exploration and evaluation costs during the quarter ended 31 March 2014 were $30 million compared to $79 million during the same period in 2013. Greenfields exploration activities were undertaken in three countries; Australia, Colombia and Guinea, while minor work was also completed in Brazil.

In Colombia, exploration continued at the Nuevo Chaquiro target, Quebradona project, in joint venture with B2Gold (AngloGold Ashanti 86.2%). In January drilling was restarted with a single diamond drilling rig, continuing to deepen CHA-48 to a final depth of 1500m. A significant zone of mineralisation was intersected over 800m downhole with intense disseminations and veins of chalcopyrite associated with an early quartz diorite intrusive. Hole CHA-49 drilled in the opposite direction on another target intersected over 400m of less intense mineralisation. A second diamond rig has been mobilised to site to test the northwest extension of the mineralised zone intersected in hole CHA-48. Regional evaluations and reconnaissance continues on AGA’s large tenement package in Colombia.

In Australia, airborne EM surveys were completed early in the first quarter at the Tropicana JV (AngloGold Ashanti 70%), the results of which have identified two priority bedrock conductors which will be followed up with ground EM and drilling. Further encouraging results were returned from the first pass diamond drilling at Madras prospect approximately 25km south of the Tropicana Gold Mine. Follow-up RC, diamond and aircore drilling programs are being designed for execution in the second quarter 2014. At the Nyngan JV (AngloGold Ashanti 70% of earnings), induced polarisation (IP) geophysical surveying was completed over a third target area during the quarter. Processing and interpretation of the IP results is now complete for the three targets surveyed to date. Access negotiations with local land owners continue ahead of planned ground geophysics (IP) scheduled for the second quarter.

In South Africa, four deep surface drilling sites were in operation during the quarter, one on the Moab Khotsong Mine and three at Mponeng (WUDLs). Percussion drilling commenced for MZA10 and the hole is currently at 402m. This hole is targeted to provide value information in the lower reaches of the early gold portion of Project Zaaiplaats.

At UD51, the long deflection design to intersect the VCR was completed and intersected thin VCR. Short deflection drilling has commenced. Redrill at UD59 has advanced to 2,349.8m and at UD60 to 1,412.7m. Pilot drilling (656m) has been completed at UD58 and site establishment has started with rigging commencing early in the next quarter.

In Tanzania at the Geita Gold Mine drilling focused on infill drilling programs for Nyankanga Cut 8, Geita Hill West and Geita Hill East. A total of 6,292m were drilled. A series of very thick high grade intersection were obtained from Matandani area and work is ongoing to understand the full upside implications of these intersections.

In Guinea, exploration work continued in Blocks 2,3 and 4 (AngloGold Ashanti 85%) with 3,269m of reverse circulation drilling and 73.8 km of IP surveying completed at Kounkoun (Block 3) and 1,237m of reconnaissance diamond drilling completed at Kouremale (Block 4). At Kounkoun, drilling aimed to test the continuity of mineralisation between KK1 and KK2 along the turbidite/chlorite-magnetite-shale contact. The drilling in this KK1-KK2 Gap showed significant encouraging results. At Kouremale, drilling tested north-striking structural features delineated by IP and geochemical surveys. The results at Kouremale were disappointing and no further work will be required on those targets. Field work on Block 2 consisted of surface mapping of a newly discovered gold occurrence.

 

				8

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  Group income statement

 

				Quarter ended March 2014				Quarter ended December 2013				Quarter ended March 2013				Year  ended  December  2013
US Dollar million		Notes		Reviewed				Reviewed				Reviewed				Audited
Revenue		2			1,359				1,474				1,518				5,708
Gold income		2			1,324				1,418				1,463				5,497
Cost of sales		3			(1,012)				(1,042)				(1,029)				(4,146)
(Loss) gain on non-hedge derivatives and other commodity contracts					(16)				28				-				94
Gross profit					296				404				434				1,445
Corporate administration, marketing and other expenses					(25)				(37)				(65)				(201)
Exploration and evaluation costs					(30)				(41)				(79)				(255)
Other operating expenses		4			(5)				(1)				(1)				(19)
Special items		5			(7)				(90)				(25)				(3,410)
Operating profit (loss)					229				235				264				(2,440)
Dividends received		2			-				-				5				5
Interest received		2			6				15				6				39
Exchange (loss) gain					(6)				4				(4)				14
Finance costs and unwinding of obligations		6			(71)				(75)				(64)				(296)
Fair value adjustment on $1.25bn bonds					(70)				(12)				-				(58)
Fair value adjustment on option component of convertible bonds					-				-				9				9
Fair value adjustment on mandatory convertible bonds					-				-				137				356
Share of associates and joint ventures’ profit (loss)		7			19				4				(7)				(162)
Profit (loss) before taxation					107				171				346				(2,533)
Taxation		8			(62)				(426)				(98)				333
Profit (loss) for the period					45				(255)				248				(2,200)
Allocated as follows:
Equity shareholders					39				(305)				239				(2,230)
Non-controlling interests					6				50				9				30
					45				(255)				248				(2,200)
Basic earnings (loss) per ordinary share (cents) (1)					10				(75)				62				(568)
Diluted earnings (loss) per ordinary share (cents) (2)					10				(75)				27				(631)
(1) Calculated on the basic weighted average number of ordinary shares.    (2) Calculated on the diluted weighted average number of ordinary shares.
Rounding of figures may result in computational discrepancies.

The reviewed financial statements for the three months ended 31 March 2014 have been prepared by the corporate accounting staff of AngloGold Ashanti Limited headed by Mr John Edwin Staples, the Group’s Chief Accounting Officer. This process was supervised by Mr Richard Duffy, the Group’s Chief Financial Officer and Mr Srinivasan Venkatakrishnan, the Group’s Chief Executive Officer. The financial statements for the quarter ended 31 March 2014 were reviewed, but not audited, by the Group’s statutory auditors, Ernst & Young Inc. A copy of their unmodified review report is available for inspection at the company’s head office.

 

				9

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  Group statement of comprehensive income

 

				Quarter						Quarter						Quarter						Year
				ended						ended						ended						ended
				March						December						March						December
				2014						2013						2013						2013
US Dollar million				Reviewed						Reviewed						Reviewed						Audited
Profit (loss) for the period					45						(255)						248						(2,200)
Items that will be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations					(8)						(85)						(149)						(433)
Share of associates and joint ventures other comprehensive income					1						-						-						-
Net gain (loss) on available-for-sale financial assets					9						-						(14)						(23)
Release on impairment of available-for-sale financial assets (note 5)					-						1						12						30
Release on disposal of available-for-sale financial assets					-						-						-						(1)
Cash flow hedges					-						1						-						1
Deferred taxation thereon					(4)						-						2						2
					5						2						-						9
Items that will not be reclassified subsequently to profit or loss:
Actuarial gain recognised					10						52						-						69
Deferred taxation thereon					(2)						(15)						-						(20)
					8						37						-						49
Other comprehensive income (loss) for the period, net of tax					6						(46)						(149)						(375)
Total comprehensive income (loss) for the period, net of tax					51						(301)						99						(2,575)
Allocated as follows:
Equity shareholders					45						(351)						90						(2,605)
Non-controlling interests					6						50						9						30
					51						(301)						99						(2,575)
Rounding of figures may result in computational discrepancies.

 

				10

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  Group statement of financial position

 

				As at				As at				As at
				March				December				March
				2014				2013				2013
US Dollar million		Notes		Reviewed				Audited				Reviewed
ASSETS
Non-current assets
Tangible assets					4,885				4,815				7,743
Intangible assets					269				267				321
Investments in associates and joint ventures					1,391				1,327				1,172
Other investments					141				131				147
Inventories					617				586				647
Trade and other receivables					25				29				48
Deferred taxation					169				177				93
Cash restricted for use					37				31				29
Other non-current assets					50				41				7
					7,584				7,404				10,207
Current assets
Other investments					1				1				-
Inventories					1,016				1,053				1,196
Trade and other receivables					380				369				466
Cash restricted for use					14				46				34
Cash and cash equivalents					525				648				680
					1,936				2,117				2,376
Non-current assets held for sale		15			158				153				-
					2,094				2,270				2,376
TOTAL ASSETS					9,678				9,674				12,583
EQUITY AND LIABILITIES
Share capital and premium		11			7,024				7,006				6,752
Accumulated losses and other reserves					(3,884	)			(3,927	)			(1,204)
Shareholders’ equity					3,140				3,079				5,548
Non-controlling interests					35				28				21
Total equity					3,175				3,107				5,569
Non-current liabilities
Borrowings					3,569				3,633				2,844
Environmental rehabilitation and other provisions					1,013				963				1,174
Provision for pension and post-retirement benefits					152				152				205
Trade, other payables and deferred income					14				4				2
Derivatives					-				-				1
Deferred taxation					579				579				1,063
					5,327				5,331				5,289
Current liabilities
Borrowings					235				258				662
Trade, other payables and deferred income					793				820				929
Bank overdraft					22				20				-
Taxation					67				81				134
					1,117				1,179				1,725
Non-current liabilities held for sale		15			59				57				-
					1,176				1,236				1,725
Total liabilities					6,503				6,567				7,014
TOTAL EQUITY AND LIABILITIES					9,678				9,674				12,583
Rounding of figures may result in computational discrepancies.

 

				11

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  Group statement of cash flows

 

		Quarter						Quarter						Quarter						Year
		ended						ended						ended						ended
		March						December						March						December
		2014						2013						2013						2013
US Dollar million		Reviewed						Reviewed						Reviewed						Audited
Cash flows from operating activities
Receipts from customers			1,288						1,479						1,492						5,709
Payments to suppliers and employees			(905)						(1,039)						(1,084)						(4,317)
Cash generated from operations			383						440						408						1,392
Dividends received from joint ventures			-						-						8						18
Taxation refund			37						22						-						23
Taxation paid			(70)						(31)						(60)						(187)
Net cash inflow from operating activities			350						431						356						1,246
Cash flows from investing activities
Capital expenditure			(220)						(372)						(384)						(1,501)
Interest capitalised and paid			-						-						(4)						(5)
Expenditure on intangible assets			-						(17)						(13)						(68)
Proceeds from disposal of tangible assets			-						2						-						10
Other investments acquired			(26)						(18)						(32)						(91)
Proceeds from disposal of other investments			24						15						27						81
Investments in associates and joint ventures			(40)						(78)						(150)						(472)
Proceeds from disposal of associates and joint ventures			-						-						5						6
Loans advanced to associates and joint ventures			(4)						(14)						-						(41)
Loans repaid by associates and joint ventures			-						-						-						33
Dividends received			-						-						5						5
Proceeds from disposal of subsidiary			-						-						1						2
Reclassification of cash balances to held for sale assets			(1)						3						-						(2)
Decrease (increase) in cash restricted for use			26						(13)						-						(20)
Interest received			4						10						4						23
Net cash outflow from investing activities			(237)						(482)						(541)						(2,040)
Cash flows from financing activities
Proceeds from borrowings			15						238						146						2,344
Repayment of borrowings			(171)						(260)						(95)						(1,486)
Finance costs paid			(81)						(42)						(37)						(200)
Revolving credit facility and bond transaction costs			-						(2)						(5)						(36)
Dividends paid			-						(11)						(26)						(62)
Net cash (outflow) inflow from financing activities			(237)						(77)						(17)						560
Net decrease in cash and cash equivalents			(124)						(128)						(202)						(234)
Translation			(1)						(5)						(10)						(30)
Cash and cash equivalents at beginning of period			628						761						892						892
Cash and cash equivalents at end of period (1)			503						628						680						628
Cash generated from operations
Profit (loss) before taxation			107						171						346						(2,533)
Adjusted for:
Movement on non-hedge derivatives and other commodity contracts			16						(28)						-						(94)
Amortisation of tangible assets			175						202						213						775
Finance costs and unwinding of obligations			71						75						64						296
Environmental, rehabilitation and other expenditure			8						(37)						(8)						(66)
Special items			6						88						30						3,399
Amortisation of intangible assets			9						9						2						24
Fair value adjustment on $1.25bn bonds			70						12						-						58
Fair value adjustment on option component of convertible bonds			-						-						(9)						(9)
Fair value adjustment on mandatory convertible bonds			-						-						(137)						(356)
Interest received			(6)						(15)						(6)						(39)
Share of associates and joint ventures’ (profit) loss			(19)						(4)						7						162
Other non-cash movements			13						7						4						25
Movements in working capital			(67)						(40)						(98)						(250)
			383						440						408						1,392
Movements in working capital
Increase in inventories			(10)						(26)						(39)						(142)
(Increase) decrease in trade and other receivables			(36)						20						18						69
Decrease in trade, other payables and deferred income			(21)						(34)						(77)						(177)
			(67)						(40)						(98)						(250)
(1) The cash and cash equivalents balance at 31 March 2014 includes a bank overdraft included in the statement of financial position as part of current liabilities of $22m (31 December 2013 : $20m)   Rounding of figures may result in computational discrepancies.

 

				12

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Group statement of changes in equity

 

  Rounding of figures may result in computational discrepancies.

 

				13

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Segmental reporting

AngloGold Ashanti’s operating segments are being 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). Individual members of the Executive Committee are responsible for geographic regions of the business.

 

 

(1)

During the 2013 year, pre tax impairments, derecognition of goodwill, tangible assets and intangible assets of $3,029m were accounted for in South Africa ($311m), Continental Africa ($1,776m) and the Americas ($942m).

Rounding of figures may result in computational discrepancies.

 

				14

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Notes

for the quarter ended 31 March 2014

 

1.	Basis of preparation

The financial statements in this quarterly report have been prepared in accordance with the historic cost convention except for certain financial instruments which are stated at fair value. The group’s accounting policies used in the preparation of these financial statements are consistent with those used in the annual financial statements for the year ended 31 December 2013 except for the adoption of new standards and interpretations effective 1 January 2014 (note 14).

The financial statements of AngloGold Ashanti Limited have been prepared in compliance with IAS 34, IFRS as issued by the International Accounting Standards Board, the South African Institute of Chartered Accountants Financial Reporting Guides as issued by the Accounting Practices Committee, 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 (as amended) for the preparation of financial information of the group for the quarter ended 31 March 2014.

 

2.

Revenue

 

						Quarter ended								Year ended
		Mar 2014				Dec 2013				Mar 2013				Dec 2013
		Reviewed				Reviewed				Reviewed				Audited
		US Dollar million
Gold income			1,324				1,418				1,463				5,497
By-products (note 3)			29				39				34				149
Dividends received			-				-				5				5
Royalties received (note 5)			1				1				10				18
Interest received			6				15				6				39
			1,359				1,474				1,518				5,708

 

3.	Cost of sales

 

						Quarter ended								Year ended
		Mar 2014				Dec 2013				Mar 2013				Dec 2013
		Reviewed				Reviewed				Reviewed				Audited
		US Dollar million
Cash operating costs			762				858				785				3,274
By-products revenue (note 2)			(29)				(39)				(34)				(149)
			733				819				751				3,125
Royalties			37				32				37				129
Other cash costs			8				10				9				43
Total cash costs			778				861				797				3,297
Retrenchment costs			6				16				6				69
Rehabilitation and other non-cash costs			22				(11)				11				18
Production costs			806				866				814				3,384
Amortisation of tangible assets			175				202				213				775
Amortisation of intangible assets			9				9				2				24
Total production costs			990				1,077				1,029				4,183
Inventory change			22				(35)				-				(37)
			1,012				1,042				1,029				4,146

 

4.	Other operating expenses

 

						Quarter ended								Year ended
		Mar 2014				Dec 2013				Mar 2013				Dec 2013
		Reviewed				Reviewed				Reviewed				Audited
		US Dollar million
Pension and medical defined benefit provisions			2				(1	)			4				14
Claims filed by former employees in respect of loss of employment, work-related accident injuries and diseases, governmental fiscal claims and care and maintenance of old tailings operations			3				2				(3	)			5
			5				1				1				19

Rounding of figures may result in computational discrepancies.

 

				15

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5.	Special items

 

		Mar 2014           Reviewed				Quarter ended Dec 2013   Reviewed				Mar 2013   Reviewed				Year ended Dec 2013   Audited
		US Dollar million
Net impairment and derecognition of goodwill, tangible assets and intangible assets (note 9)			-				36				1				3,029
Impairment of other investments (note 9)			-				1				12				30
Net loss (profit) on disposal and derecognition of land, mineral rights, tangible assets and exploration properties (note 9)			2				-				1				(2)
Royalties received (note 2)			(1)				(1)				(10)				(18)
Indirect tax expenses and legal claims			-				7				3				43
Inventory write-off due to fire at Geita			-				-				14				14
Insurance proceeds on Geita claim			-				(13)				-				(13)
Legal fees and other costs related to contract termination and settlement costs			6				16				4				19
Write-down of stockpiles and heap leach to net realisable value and other stockpile adjustments			-				38				-				216
Retrenchment and related costs			-				4				-				24
Write-off of a loan			-				-				-				7
Costs on early settlement of convertible bonds and transaction costs on the $1.25bn bond and standby facility			-				2				-				61
			7				90				25				3,410

For the quarter ended 31 March 2014, no asset impairments were recognised. During the year ended 31 December 2013, impairment, derecognition of assets and write-down of inventories to net realisable value and other stockpile adjustments include the following:

The group reviews and tests the carrying value of its mining assets (including ore-stock piles) when events or changes in circumstances suggest that the carrying amount may not be recoverable.

During June 2013, consideration was given to a range of indicators including a decline in gold price, increase in discount rates and reduction in market capitalisation. As a result, certain cash generating units’ recoverable amounts, including Obuasi and Geita in Continental Africa, Moab Khotsong in South Africa and CC&V and AGA Mineração in the Americas, did not support their carrying values and impairment losses were recognised during 2013. The impairment for these cash generating units represents 80% of the total impairment and range between $200m and $700m per cash generating unit on a post taxation basis.

The indicators were re-assessed as at 31 December 2013 as part of the annual impairment assessment cycle and the conditions that arose in June 2013 were largely unchanged and no further cash generating unit impairments arose.

 

		Goodwill impairment				Tangible asset impairment				Intangible asset impairment				Asset derecognition(1)				Investments in equity- accounted associates and joint ventures impairment				Inventory write-down and other stockpile adjustments				Pre- tax sub total				Taxation thereon				Post- tax total
		US Dollar million
South Africa			-				308				-				3				-				1				312				(86)				226
Continental Africa			-				1,651				20				105				179				200				2,155				(564)				1,591
Americas			15				910				16				1				-				15				957				(333)				624
Corporate and other			-				-				-				-				16				-				16				-				16
			15				2,869				36				109				195				216				3,440				(983)				2,457

 

(1)	The Mongbwalu project in the Democratic Republic of the Congo was discontinued.

Impairment calculation assumptions as at 31 December 2013 – 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 $1,269/oz (2012: $1,584/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, the real pre-tax rate, per cash generating unit ranged from 6.21% to 18.07% which was derived from the group’s weighted average cost of capital (WACC) and risk factors consistent with the basis used in 2012. At 31 December 2013, the group WACC was 7.30% (real post-tax) which is 204 basis points higher than in 2012 of 5.26%, and is based on the average capital structure of the group and three major gold companies considered to be appropriate peers. In determining the WACC for each cash generating unit, sovereign and mining risk factors are considered to determine country specific risks. Project risk has been applied to cash flows relating to certain mines that are deep level underground mining projects below infrastructure in South Africa and Continental Africa region;

—

foreign currency cash flows translated at estimated forward exchange rates and then discounted using appropriate discount rates for that currency;

—

cash flows used in impairment calculations are based on life of mine plans which range from 3 years to 47 years; and

—

variable operating cash flows are increased at local Consumer Price Index rates.

Rounding of figures may result in computational discrepancies.

 

				16

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Impairment calculation assumptions – Investments in equity-accounted associates and joint ventures

The impairment indicators considered the quoted share price, current financial position and decline in anticipated operating results. Included in share of equity-accounted investments’ loss of $162m for the year ended 31 December 2013 is an impairment of $195m and an impairment reversal of $31m.

Net realisable value calculation assumptions as at 31 December 2013 – Inventory

Impairments of $178m were raised at 30 June 2013 to net realisable value based on a spot price of $1,200. Additional impairments of $38m were raised at 31 December 2013 due to stockpile abandonments and other specific adjustments. The practice of writing down inventories to the lower of cost or net realisable value is consistent with the view that assets should not be carried in excess of amounts expected to be realised from their sale or use.

 

6.	Finance costs and unwinding of obligations

 

		Mar 2014           Reviewed				Quarter ended Dec 2013   Reviewed				Mar 2013   Reviewed				Year ended Dec 2013   Audited
		US Dollar million
Finance costs			64				67				49				247
Unwinding of obligations, accretion of convertible bonds and other discounts			7				8				15				49
			71				75				64				296

 

7.	Share of associates and joint ventures’ profit (loss)

 

		Mar 2014           Reviewed				Quarter ended Dec 2013   Reviewed				Mar 2013   Reviewed				Year ended Dec 2013   Audited
		US Dollar million
Revenue			117				117				80				334
Operating costs, special items and other expenses			(99)				(111)				(71)				(315)
Net interest received			2				1				-				4
Profit before taxation			20				7				9				23
Taxation			(1)				(2)				(9)				(21)
Profit after taxation			19				5				-				2
Net impairment of investments in associates and joint ventures (note 9)			-				(1)				(7)				(164)
			19				4				(7)				(162)

 

8.

Taxation

 

		Mar 2014				Quarter ended Dec 2013				Mar 2013				Year ended Dec 2013
		Reviewed				Reviewed				Reviewed				Audited
		US Dollar million
South African taxation
Mining tax			14				1				17				7
Non-mining tax			(3)				-				-				1
Prior year over provision			(2)				(25)				(1)				(26)
Deferred taxation
Temporary differences			(20)				13				10				(39)
Unrealised non-hedge derivatives and other commodity contracts			(4)				8				-				25
			(15)				(3)				25				(32)
Foreign taxation
Normal taxation			46				96				54				160
Prior year over provision			(3)				-				-				(8)
Deferred taxation(1)
Temporary differences			33				333				17				(453)
			77				429				72				(301)
			62				426				98				(333)

 

(1)

Included in temporary differences under Foreign taxation in 2013, is a tax credit relating to impairments, derecognition of assets of $915m and write-down of inventories of $68m. In addition, in quarter four of 2013, deferred tax assets of $270m and $60m were derecognised in Obuasi and CC&V respectively.

 

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9.	Headline earnings (loss)

 

		Mar 2014				Quarter ended  Dec 2013				Mar 2013				Year ended   Dec 2013
		Reviewed				Reviewed				Reviewed				Audited
		US Dollar million
The profit (loss) attributable to equity shareholders has been adjusted by the following to arrive at headline (loss) earnings:
Profit (loss) attributable to equity shareholders			39				(305)				239				(2,230)
Net impairment and derecognition of goodwill, tangible assets and intangible assets (note 5)			-				36				1				3,029
Net loss (profit) on disposal and derecognition of land, mineral rights, tangible assets and exploration properties (note 5)			2				-				1				(2)
Impairment of other investments (note 5)			-				1				12				30
Net impairment of investments in associates and joint ventures (note 7)			-				1				7				164
Special items of associates and joint ventures			-				2				-				2
Taxation - current portion			-				1				-				-
Taxation - deferred portion			(3)				(12)				(1)				(915)
			38				(276)				259				78
Headline earnings (loss) per ordinary share (cents) (1)			9				(68)				67				20
Diluted headline earnings (loss) per ordinary share (cents)			9				(68)				32				(62)

 

(1)	Calculated on the basic weighted average number of ordinary shares.

 

10.	Number of shares

 

		Mar 2014				Quarter ended   Dec 2013				Mar 2013				Year ended Dec 2013
		Reviewed				Reviewed				Reviewed				Audited
Authorised number of shares:
Ordinary shares of 25 SA cents each			600,000,000				600,000,000				600,000,000				600,000,000
E ordinary shares of 25 SA cents each			4,280,000				4,280,000				4,280,000				4,280,000
A redeemable preference shares of 50 SA cents each			2,000,000				2,000,000				2,000,000				2,000,000
B redeemable preference shares of 1 SA cent each			5,000,000				5,000,000				5,000,000				5,000,000
Issued and fully paid number of shares:
Ordinary shares in issue			403,087,362				402,628,406				383,626,668				402,628,406
E ordinary shares in issue			697,896				712,006				1,610,376				712,006
Total ordinary shares:			403,785,258				403,340,412				385,237,044				403,340,412
A redeemable preference shares			2,000,000				2,000,000				2,000,000				2,000,000
B redeemable preference shares			778,896				778,896				778,896				778,896
In calculating the basic and diluted number of ordinary shares outstanding for the period, the following were taken into consideration:
Ordinary shares			402,785,093				402,462,266				383,423,554				389,184,639
E ordinary shares			704,108				1,062,510				1,613,092				1,460,705
Fully vested options			2,477,845				1,477,629				2,038,229				1,979,920
Weighted average number of shares			405,967,046				405,002,405				387,074,875				392,625,264
Dilutive potential of share options			1,185,208				-				1,210,482				-
Dilutive potential of convertible bonds			-				-				18,140,000				12,921,644
Diluted number of ordinary shares			407,152,254				405,002,405				406,425,357				405,546,908

 

11.	Share capital and premium

 

		Mar 2014				As at Dec 2013				Mar 2013
		Reviewed				Audited				Reviewed
		US Dollar Million
Balance at beginning of period			7,074				6,821				6,821
Ordinary shares issued			13				259				11
E ordinary shares issued and cancelled			-				(6)				-
Sub-total			7,087				7,074				6,832
Redeemable preference shares held within the group			(53)				(53)				(53)
Ordinary shares held within the group			-				(6)				(11)
E ordinary shares held within the group			(10)				(9)				(16)
Balance at end of period			7,024				7,006				6,752

Rounding of figures may result in computational discrepancies.

 

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12.	Exchange rates

 

		Mar 2014		Dec 2013		Mar   2013
		Unaudited		Unaudited		Unaudited
ZAR/USD average for the year to date		10.82		9.62		8.91
ZAR/USD average for the quarter		10.82		10.12		8.91
ZAR/USD closing		10.52		10.45		9.21
AUD/USD average for the year to date		1.12		1.03		0.96
AUD/USD average for the quarter		1.12		1.08		0.96
AUD/USD closing		1.08		1.12		0.96
BRL/USD average for the year to date		2.36		2.16		2.00
BRL/USD average for the quarter		2.36		2.27		2.00
BRL/USD closing		2.26		2.34		2.01
ARS/USD average for the year to date		7.60		5.48		5.01
ARS/USD average for the quarter		7.60		6.07		5.01
ARS/USD closing		8.00		6.52		5.12

 

13.	Capital commitments

 

		Mar 2014		Dec 2013		Mar   2013
		Reviewed		Audited		Reviewed
		US Dollar Million
Orders placed and outstanding on capital contracts at the prevailing rate of exchange (1)		379		437		1,210

 

(1)	Includes capital commitments relating to associates and joint ventures.

Rounding of figures may result in computational discrepancies.

Liquidity and capital resources

To service the above capital commitments and other operational requirements, the group is dependent on existing cash resources, cash generated from operations and borrowing facilities.

Cash generated from operations is subject to operational, market and other risks. Distributions from operations may be subject to foreign investment, exchange control laws and regulations and the quantity of foreign exchange available in offshore countries. In 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 above commitments. 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.

 

14.	Change in accounting policies

The following accounting standards, amendments to standards and new interpretations have been adopted with effect from 1 January 2014:

 

 

15.	Non-current assets and liabilities held for sale

Effective 30 April 2013, AngloGold Ashanti announced its plan to sell the Navachab mine in Namibia. The Navachab gold mine is situated close to Karibib, about 170 kilometres northwest of the Namibian capital, Windhoek. It is included in the Continental Africa reporting segment. The open-pit mine, which began operations in 1989, has a processing plant that handles 120,000 metric tons a month. The mine produced 63,000 ounces of gold in 2013 (2012: 74,000 ounces).

On 10 February 2014, AngloGold Ashanti announced that it signed a binding agreement to sell Navachab to a wholly-owned subsidiary of QKR Corporation Ltd (QKR). The agreement provides for an upfront consideration based on an enterprise value of US$110 million which will be adjusted to take into account Navachab’s net debt and working capital position on the closing date of the transaction. The upfront consideration is payable in cash on the closing date. In addition, AngloGold Ashanti will receive deferred consideration in the form of a net smelter return (NSR). The NSR is to be paid quarterly for a period of seven years following the second anniversary of the closing date and will be determined at 2% of ounces sold by Navachab during a relevant quarter subject to a minimum average gold price of US$1,350 per ounce being achieved and capped at a maximum of 18,750 ounces sold per quarter.

The transaction is subject to fulfilment of a number of conditions precedent, including Namibian and South African regulatory and third party approvals, which are expected to be obtained over the next several months. Navachab is not a discontinued operation and is not viewed as part of the core assets of the company.

 

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16.	Financial risk management activities

Borrowings

The $1.25bn bonds and the mandatory convertible bonds settled in September 2013, are carried at fair value. The convertible bonds, settled 99.1% in August 2013 and in full in November 2013, and rated bonds are carried at amortised cost and their fair values are their closing market values at the reporting date. The interest rate on the remaining borrowings is reset on a short-term floating rate basis, and accordingly the carrying amount is considered to approximate fair value.

 

Derivatives

The fair value of derivatives is estimated based on ruling market prices, volatilities, interest rates and credit risk and includes all derivatives carried in the statement of financial position.

Embedded derivatives and the conversion features of convertible bonds are included as derivatives on the statement of financial position.

The following inputs were used in the valuation of the conversion features of the convertible bonds:

 

The option component of the convertible bonds is calculated as the difference between the price of the bonds including the option component (bond price) and the price excluding the option component (bond floor price).

Derivative assets (liabilities) comprise the following:

 

The group uses the following hierarchy for determining and disclosing the fair value of financial instruments:

 

 

The following tables set out the group’s financial assets and liabilities measured at fair value by level within the fair value hierarchy:

Type of instrument

 

Rounding of figures may result in computational discrepancies.

 

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17.	Contingencies

AngloGold Ashanti’s material contingent liabilities and assets at 31 March are detailed below:

 

 

(1)

Groundwater pollution - AngloGold Ashanti Limited has identified groundwater contamination plumes at certain of its operations, which have occurred primarily as a result of seepage. Numerous scientific, technical and legal studies have been undertaken to assist in determining the magnitude of the contamination and to find sustainable remediation solutions. The group has instituted processes to reduce future potential seepage and it has been demonstrated that Monitored Natural Attenuation (MNA) by the existing environment will contribute to improvements in some instances. Furthermore, literature reviews, field trials and base line modelling techniques suggest, but have not yet proven, that the use of phyto-technologies can address the soil and groundwater contamination. Subject to the completion of trials and the technology being a proven remediation technique, no reliable estimate can be made for the obligation.

 

(2)

Deep groundwater pollution - The group has identified a flooding and future pollution risk posed by deep groundwater in certain underground mines in Africa. Various studies have been undertaken by AngloGold Ashanti Limited since 1999. Due to the interconnected nature of mining operations, any proposed solution needs to be a combined one supported by all the mines located in these gold fields. As a result, in South Africa, the 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.

 

(3)

Indirect taxes - AngloGold Ashanti (Ghana) Limited (AGAG) received a tax assessment for the 2006 to 2008 and for the 2009 to 2011 tax years following audits by the tax authorities which related to various indirect taxes amounting to $29m (2013: $25m). Management is of the opinion that the indirect taxes were not properly assessed and the company has lodged an objection.

 

(4)

Litigation - On 11 October 2011, AGAG terminated its commercial arrangements with Mining and Building Contractors Limited (MBC) relating to certain underground development, construction on bulkheads and diamond drilling services provided by MBC in respect of the Obuasi mine. On 8 November 2012, as a result of this termination, AGAG and MBC concluded a separation agreement that specified the terms on which the parties agreed to sever their commercial relationship. On 23 July 2013, MBC commenced proceedings against AGAG in the High Court of Justice (Commercial Division) in Accra, Ghana, and served a writ of summons that claimed a total of approximately $ 97m in damages. MBC asserts various claims for damages, including, among others, as a result of the breach of contract, non-payment of outstanding historical indebtedness by AGAG and the demobilisation of equipment, spare parts and material acquired by MBC for the benefit of AGAG in connection with operations at the Obuasi mine in Ghana. MBC has also asserted various labour claims on behalf of itself and certain of its former contractors and employees at the Obuasi mine. On 9 October 2013, AGAG filed a motion in court to refer the action or a part thereof to arbitration. This motion was set to be heard on 25 October 2013, however, on 24 October 2013, MBC filed a motion to discontinue the action with liberty to reapply. On 20 February 2014, AGAG was served with a new writ for approximately $97m, as previously claimed. On 5 May 2014, the court dismissed AGAG’s application for stay of proceedings pending arbitration and ordered AGAG to file its statement of defence within 14 days. AGAG intends to appeal this ruling.

 

(5)

Litigation – AGAG received a summons on 2 April 2013 from Abdul Waliyu and 152 others in which the plaintiffs allege that they were or are residents of the Obuasi municipality or its suburbs and that their health has been adversely affected by emission and/or other environmental impacts arising in connection with the current and/or historical operations of the Pompora Treatment Plant (PTP) which was decommissioned in 2000. The claim is to award general damages, special damages for medical treatment and punitive damages, as well as several orders relating to the operation of the PTP. The plaintiffs subsequently amended their writ to include their respective addresses. AGAG filed a defence to the amended writ on 16 July 2013 and are awaiting the plaintiffs to apply for directions. In view of the limitation of current information for the accurate estimation of a liability, no reliable estimate can be made for the obligation.

 

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(6)

Litigation – five executive members of the PTP (AGA) Smoke Effect Association (PASEA) sued AGAG on 24 February 2014 in their personal capacity and on behalf of the members of PASEA. The plaintiffs claim that they were residents of Tutuka, Sampsonkrom, Anyimadukrom, Kortkortesua, Abomperkrom, and PTP Residential Quarters, all suburbs of Obuasi, in close proximity to the now decommissioned Pompara Treatment Plant (PTP). The plaintiffs claim they have been adversely affected by the operations of the PTP. In view of the limitation of current information for the accurate estimation of a liability, no reliable estimate can be made for the obligation.

 

(7)

Occupational Diseases in Mines and Works Act (ODMWA) litigation – On 3 March 2011, in Mankayi vs. AngloGold Ashanti, the Constitutional Court of South Africa held that section 35(1) of the Compensation for Occupational Injuries and Diseases Act, 1993 does not cover an “employee” who qualifies for compensation in respect of “compensable diseases” under the Occupational Diseases in Mines and Works Act, 1973 (ODMWA). This judgement allows such qualifying employee to pursue a civil claim for damages against the employer. Following the Constitutional Court decision, AngloGold Ashanti has become subject to numerous claims relating to Silicosis and other Occupational Lung Diseases (OLD), including several potential class actions and individual claims.

For example, on or about 21 August 2012, AngloGold Ashanti was served with an application instituted by Bangumzi Bennet Balakazi (“the Balakazi Action”) and others in which the applicants seek an order declaring that all mine workers (former or current) who previously worked or continue to work in specified South African gold mines for the period owned by AngloGold Ashanti and who have silicosis or other OLD constitute members of a class for the purpose of proceedings for declaratory relief and claims for damages. In the event the class is certified, such class of workers would be permitted to institute actions by way of a summons against AngloGold Ashanti for amounts as yet unspecified. On 4 September 2012, AngloGold Ashanti delivered its notice of intention to defend this application. AngloGold Ashanti also delivered a formal request for additional information that it requires to prepare its affidavits in respect to the allegations and the request for certification of a class.

In addition, on or about 8 January 2013, AngloGold Ashanti and its subsidiary Free State Consolidated Gold Mines (Operations) Limited, alongside other mining companies operating in South Africa, were served with another application to certify a class (“the Nkala Action”). The applicants in the case seek to have the court certify two classes namely: (i) current and former mineworkers who have silicosis (whether or not accompanied by any other disease) and who work or have worked on certain specified gold mines at any time from 1 January 1965 to date; and (ii) the dependants of mineworkers who died as a result of silicosis (whether or not accompanied by any other disease) and who worked on these gold mines at any time after 1 January 1965. AngloGold Ashanti filed a notice of intention to oppose the application.

On 21 August 2013, an application was served on AngloGold Ashanti for the consolidation of the Balakazi Action and the Nkala Action, as well as a request for an amendment to change the scope of the classes the court was requested to certify in the previous applications that were initiated. The applicants now request certification of two classes (the “silicosis class” and the “tuberculosis class”). The silicosis class would consist of certain current and former mineworkers who have contracted silicosis, and the dependants of certain deceased mineworkers who have died of silicosis (whether or not accompanied by any other disease). The tuberculosis class would consist of certain current and former mineworkers who have or had contracted pulmonary tuberculosis and the dependants of certain deceased mineworkers who died of pulmonary tuberculosis (but excluding silico-tuberculosis). AngloGold Ashanti will defend against the request for certification of these classes in 2014.

In October 2012, AngloGold Ashanti received a further 31 individual summonses and particulars of claim relating to silicosis and/or other OLD. The total amount claimed in the 31 summonses is approximately $7 million. On 22 October 2012, AngloGold Ashanti filed a notice of intention to oppose these claims and took legal exception to the summonses on the ground that certain particulars of claim were unclear. On 4 April 2014, the High Court of South Africa dismissed these exceptions and on 25 April 2014, Anglogold Ashanti filed its plea in this matter. The company will continue to defend these cases on their merits.

On or about 3 March 2014, AngloGold Ashanti received an additional 21 individual summonses and particulars of claim relating to silicosis and/or other OLD. The total amount claimed in the 21 summonses is approximately $4.5 million. AngloGold Ashanti has filed a notice of intention to oppose these claims. On 2 May 2014 AngloGold Ashanti filed a notice taking legal exception to the summonses on the ground that certain particulars of claim were unclear. The court date has not yet been set to hear the exceptions.

On or about 24 March 2014, AngloGold Ashanti received a further 686 individual summonses and particulars of claim relating to silicosis and/or other OLD. The total amount claimed in the 686 summonses is approximately $109 million. AngloGold Ashanti has filed a notice of intention to oppose these claims. On 15 May 2014 AngloGold Ashanti filed a notice taking legal exception to the summonses on the ground that certain particulars of claim were unclear. The court date has not yet been set to hear the exceptions.

On or about 1 April 2014, AngloGold Ashanti received a further 518 individual summonses and particulars of claim relating to silicosis and/or other OLD. The total amount claimed in the 518 summonses is approximately $90 million. AngloGold Ashanti has filed a notice of intention to oppose these claims. On 15 May 2014 AngloGold Ashanti filed a notice taking legal exception to the summonses on the ground that certain particulars of claim were unclear. The court date has not yet been set to hear the exceptions.

It is possible that additional class actions and/or individual claims relating to silicosis and/or other OLD will be filed against AngloGold Ashanti in the future. AngloGold Ashanti will defend all current and subsequently filed claims on their merits. Should AngloGold Ashanti be unsuccessful in defending any such claims, or in otherwise favourably resolving perceived deficiencies in the national occupational disease compensation framework that were identified in the earlier decision by the Constitutional Court, such matters would have an adverse effect on its financial position, which could be material. The company is unable to reasonably estimate its share of the amounts claimed.

 

(8)

Other tax disputes - In November 2007, the Departamento Nacional de Produção Mineral (DNPM), a Brazilian federal mining authority, issued a tax assessment against AngloGold Ashanti Brazil Mineração Ltda (AABM) in the

 

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amount of $20m (2013: $21m) relating to the calculation and payment by AABM of the financial contribution on mining exploitation (CFEM) in the period from 1991 to 2006. AngloGold Ashanti Limited’s subsidiaries in Brazil are involved in various other disputes with tax authorities. These disputes involve federal tax assessments including income tax, royalties, social contributions and annual property tax. The amount involved is approximately $18m (2013: $19m). Management is of the opinion that these taxes are not payable.

 

(9)

Sales tax on gold deliveries - In 2006, Mineração Serra Grande S.A. (MSG), received two tax assessments from the State of Goiás related to payments of state sales taxes at the rate of 12% on gold deliveries for export from one Brazilian state to another during the period from February 2004 to the end of May 2006. The first and second assessments are approximately $66m (2013: $99m) and $41m (2013: $62m) respectively. In November 2006, the administrative council’s second chamber ruled in favour of MSG and fully cancelled the tax liability related to the first period. In July 2011, the administrative council’s second chamber ruled in favour of MSG and fully cancelled the tax liability related to the second period. The State of Goiás has appealed to the full board of the State of Goiás tax administrative council. In November 2011 (first case) and June 2012 (second case), the administrative council’s full board approved the suspension of proceedings and the remittance of the matter to the Department of Supervision of Foreign Trade (COMEX) for review and verification. On 28 May 2013, the Full Board of the State of Goiás Tax Administrative Council ruled in favour of the State of Goiás, however reduced the penalties of the two tax assessments from 200% to 80%. The company is considering legal options available in this matter, since it believes that both assessments are in violation of federal legislation on sales taxes. MSG will be required to provide a bank guarantee to the tax authorities to proceed with legal discussion at the judiciary level. A decree has been signed by the Governor of the State of Goias which will enable companies to settle outstanding tax assessments. The implementing regulations are currently being drafted and MSG will be considering the options that may be open to it under the decree and implementing regulations which may result in the contingent liability referred to above being settled. Until the regulations are published and assessed by MSG it is not possible to determine any settlement value.

 

(10)

Other tax disputes - MSG received a tax assessment in October 2003 from the State of Minas Gerais related to sales taxes on gold. The tax administrators rejected the company’s appeal against the assessment. The company is now appealing the dismissal of the case. The assessment is approximately $17m (2013: $19m).

 

(11)

Tax dispute – AngloGold Ashanti Colombia S.A. (AGAC) received notice from the Colombian Tax Office (DIAN) that it disagreed with the company’s tax treatment of certain items in the 2011 and 2010 income tax returns. On 23 October 2013 AGAC received the official assessments from the DIAN which established that an estimated additional tax of $36m (2013: $25m) will be payable if the tax returns are amended. Penalties and interest for the additional taxes are expected to be $155m (2013: $131m), based on Colombian tax law. The company believes that it has applied the tax legislation correctly. AGAC requested that DIAN reconsider its decision and the company has been officially notified that DIAN will review its earlier ruling. This review is anticipated to take twelve months, at the end of which AGAC may file suit if the ruling is not reversed.

 

(12)

Tax dispute - On 12 July 2013, Cerro Vanguardia S.A. received a notification from the Argentina Tax Authority requesting corrections to the 2007, 2008 and 2009 income tax returns of about $15m relating to the non-deduction of tax losses previously claimed on hedge contracts. Penalties and interest on the disputed amounts are estimated at a further $37m. Management is of the opinion that the taxes are not payable and is preparing a response.

 

(13)

Tax dispute – on 7 April 2014 AngloGold Ashanti Limited received notification from the South African Revenue Service that certain corporate expenses have been disallowed. The total amount including penalties and interest is estimated at $8m and the company will be appealing against this decision.

 

(14)

Indemnity - As part of the acquisition by AngloGold Ashanti Limited of the remaining 50% interest in MSG during June 2012, Kinross Gold Corporation (Kinross) has provided an indemnity to a maximum amount of BRL255m against the specific exposures discussed in items 8 and 9 above. At 31 December 2013, the company has estimated that the maximum contingent asset is $64m (2013: $93m).

 

(15)

Royalty - As a result of the sale of the interest in the Tau Lekoa Gold Mine during 2010, the group is entitled to receive a royalty on the production of a total of 1.5Moz by the Tau Lekoa Gold Mine and in the event that the average monthly rand price of gold exceeds R180,000/kg (subject to an inflation adjustment). Where the average monthly rand price of gold does not exceed R180,000/kg (subject to an inflation adjustment), the ounces produced in that quarter do not count towards the total 1.5Moz upon which the royalty is payable. The royalty is determined at 3% of the net revenue (being gross revenue less state royalties) generated by the Tau Lekoa assets. Royalties on 435,986oz (2013: 331,558oz) produced have been received to date.

 

(16)

Provision of surety - The company has provided surety in favour of a lender on a gold loan facility with its associate Oro Group (Pty) Limited and one of its subsidiaries to a maximum value of $10m (2013: $11m). The probability of the non-performance under the surety ships is considered minimal. The suretyship agreements have a termination notice period of 90 days.

 

18.	Concentration of tax risk

There is a concentration of tax risk in respect of recoverable value added tax, fuel duties and appeal deposits from the Tanzanian government.

The recoverable value added tax, fuel duties and appeal deposits are summarised as follows:

 

 

(1)

Fuel duty claims are required to be submitted after consumption of the related fuel and are subject to authorisation by the Customs and Excise authorities.

 

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19.	Borrowings

AngloGold Ashanti’s borrowings are interest bearing.

 

20.	Subsequent events

In February 2014, Cerro Vanguardia Sociedad Anonima (a 92.5% held subsidiary of AngloGold Ashanti Limited) entered into a sale agreement with Franco Nevada Corporation, subject to certain conditions, related to the 2.0% NSR royalty on Yamana’s Gold Inc.’s Cerro Moro project located in Argentina for a cash consideration equal to the Argentine peso equivalent of US$23.5 million (as determined at the official Argentine peso/US$ exchange rate on closing). The conditions were met and the transaction closed on 24 April 2014.

 

21.	Announcements

AMCU Strike Notice: On 20 January 2014, AngloGold Ashanti confirmed that the Association of Mineworkers and Construction Union (AMCU) had served notice that it intended to call a strike by its members at the company’s South Africa operations, starting Thursday, 23 January 2014.

Threatened strike by AMCU declared unprotected: On 30 January 2014, AngloGold Ashanti announced that South Africa’s Labour Court had ruled that a strike threatened by AMCU at the company’s South Africa mines would be unprotected, and that employees should continue to proceed to work. Also, on 30 January 2014, the court granted an interim interdict and ruled that AMCU must return to court on 14 March 2014 to explain why the interim interdict should not be made permanent.

On 14 March 2014, a postponement was requested and a new court date was set for 5 June 2014. The interim interdict will remain in force until 5 June 2014.

AngloGold Ashanti enters into agreement to sell Navachab mine: On 10 February 2014, AngloGold Ashanti announced that it had signed a binding agreement, subject to certain conditions, to sell its entire interest in AngloGold Ashanti Namibia (Proprietary) Limited, a wholly owned subsidiary which owns the Navachab Gold Mine, to a wholly-owned subsidiary of QKR Corporation Limited. The agreement provided for an upfront consideration based on an enterprise value of US$110 million which will be adjusted to take into account the mine’s net debt and working capital position on the closing date of the transaction and is subject to a number of conditions precedent.

Changes to the Board of Directors: On 17 February 2014, AngloGold Ashanti announced that as a result of his increasing portfolio of professional commitments, Mr TT Mboweni had decided not to stand for re-election as an independent Non-Executive Director at the Annual General Meeting to be held on 14 May 2014. Mr Mboweni also stood down as Chairman on the same date. Mr SM Pityana was elected unanimously by the board to take over from Mr Mboweni. Prof LW Nkuhlu was also appointed Lead Independent Director.

AngloGold Ashanti announces new board appointment: on 25 March 2014 AngloGold Ashanti announced the appointment of Mr David L Hodgson as an independent non-executive director to its Board of Directors, with effect from 25 April 2014.

 

22.	Supplemental condensed consolidating financial information

AngloGold Ashanti Holdings plc (“IOMco”), a 100 percent wholly-owned subsidiary of AngloGold Ashanti, has issued debt securities which are fully and unconditionally guaranteed by AngloGold Ashanti Limited (being the “Guarantor”). IOMco is an Isle of Man registered company that holds certain of AngloGold Ashanti’s operations and assets located outside South Africa (excluding certain operations and assets in the United States of America and Namibia). The following is condensed consolidating financial information for the company as of 31 March 2014, 31 December 2013 and 31 March 2013 and for the three months ended 31 March 2014, 31 December 2013, 31 March 2013 and for the year ended 31 December 2013, with a separate column for each of AngloGold Ashanti Limited as Guarantor, IOMco as Issuer and the other subsidiaries of the company combined (the “Non-Guarantor Subsidiaries”). For the purposes of the condensed consolidating financial information, the company carries its investments under the equity method. The following supplemental condensed consolidating financial information should be read in conjunction with the company’s consolidated financial statements.

 

				24

---

  Condensed consolidating income statement for the quarter ended 31 March 2014

 

US Dollar million		AngloGold Ashanti (the “Guarantor”)				IOMco (the “Issuer”)				Other subsidiaries (the  “Non-Guarantor Subsidiaries”)				Consolidation adjustments				Total
Revenue			357				1				1,001				-				1,359
Gold income			347				-				977				-				1,324
Cost of sales			(291)				-				(721)				-				(1,012)
Gain on non-hedge derivatives and other commodity contracts			-				-				(16)				-				(16)
Gross profit			56				-				240				-				296
Corporate administration, marketing and other (expenses) income			(20)				29				(26)				(8)				(25)
Exploration and evaluation costs			(5)				-				(25)				-				(30)
Other operating expenses			(2)				-				(3)				-				(5)
Special items			-				(11)				5				(1)				(7)
Operating profit			29				18				191				(9)				229
Interest received			-				1				5				-				6
Exchange gain (loss)			13				-				(19)				-				(6)
Finance costs and unwinding of obligations			(5)				(52)				(14)				-				(71)
Fair value adjustment on $1.25bn bonds			-				(70)				-				-				(70)
Share of associates and joint ventures’ profit			-				-				19				-				19
Equity (loss) gain in subsidiaries			(1)				42				-				(41)				-
Profit (loss) before taxation			36				(61)				182				(50)				107
Taxation			3				(2)				(63)				-				(62)
Profit (loss) for the period			39				(63)				119				(50)				45
Allocated as follows:
Equity shareholders			39				(63)				113				(50)				39
Non-controlling interests			-				-				6				-				6
			39				(63)				119				(50)				45
Comprehensive income			45				(51)				137				(80)				51
Comprehensive income attributable to non-controlling interests			-				-				(6)				-				(6)
Comprehensive income attributable to AngloGold Ashanti			45				(51)				131				(80)				45

 

				25

---

  Condensed consolidating income statement for the quarter ended 31 December 2013

 

US Dollar million		AngloGold Ashanti (the “Guarantor”)				IOMco (the “Issuer”)				Other subsidiaries (the  “Non-Guarantor Subsidiaries”)				Consolidation adjustments				Total
Revenue			418				1				1,057				(2)				1,474
Gold income			422				-				1,046				(50)				1,418
Cost of sales			(295)				-				(747)				-				(1,042)
Gain on non-hedge derivatives and other commodity contracts			-				-				28				-				28
Gross profit			127				-				327				(50)				404
Corporate administration, marketing and other income (expenses)			15				(9)				(38)				(5)				(37)
Exploration and evaluation costs			(7)				(5)				(29)				-				(41)
Other operating income (expenses)			5				(4)				(3)				1				(1)
Special items			(1,473)				(63)				403				1,043				(90)
Operating (loss)/profit			(1,333)				(81)				660				989				235
Dividends received			2				-				-				(2)				-
Interest received			1				1				13				-				15
Exchange gain			-				1				3				-				4
Finance costs and unwinding of obligations			(6)				(54)				(15)				-				(75)
Fair value adjustment on $1.25bn bonds			-				(12)				-				-				(12)
Share of associates and joint ventures’ (loss) income			(1)				(2)				4				3				4
Equity gain in subsidiaries			1,045				145				-				(1,190)				-
(Loss) profit before taxation			(292)				(2)				665				(200)				171
Taxation			12				(2)				(436)				-				(426)
(Loss) profit before taxation			(280)				(4)				229				(200)				(255)
Preferred stock dividends			(25)				-				(25)				50				-
(Loss) profit for the period			(305)				(4)				204				(150)				(255)
Allocated as follows:
Equity shareholders			(305)				(4)				154				(150)				(305)
Non-controlling interests			-				-				50				-				50
			(305)				(4)				204				(150)				(255)
Comprehensive income			(351)				(7)				193				(136)				(301)
Comprehensive income attributable to non-controlling interests			-				-				(50)				-				(50)
Comprehensive income attributable to AngloGold Ashanti			(351)				(7)				143				(136)				(351)

 

				26

---

  Condensed consolidating income statement for the quarter ended 31 March 2013

 

US Dollar million		AngloGold Ashanti (the “Guarantor”)				IOMco (the “Issuer”)				Other subsidiaries (the  “Non-Guarantor Subsidiaries”)				Consolidation adjustments				Total
Revenue			493				-				1,025				-				1,518
Gold income			486				-				995				(18)				1,463
Cost of sales			(330)				-				(699)				-				(1,029)
Gross profit			156				-				296				(18)				434
Corporate administration, marketing and other (expenses) income			(45)				8				(17)				(11)				(65)
Exploration and evaluation costs			(4)				(1)				(74)				-				(79)
Other operating (expenses) income			(4)				-				3				-				(1)
Special items			2				(1)				(22)				(4)				(25)
Operating profit			105				6				186				(33)				264
Dividends received			5				-				-				-				5
Interest received			1				-				5				-				6
Exchange gain (loss)			2				(1)				(5)				-				(4)
Finance costs and unwinding of obligations			(5)				(27)				(32)				-				(64)
Fair value adjustment on option component of convertible bonds			-				-				9				-				9
Fair value adjustment on mandatory convertible bonds			-				-				137				-				137
Share of associates and joint ventures’ loss			-				(9)				(1)				3				(7)
Equity gain in subsidiaries			167				52				-				(219)				-
Profit before taxation			275				21				299				(249)				346
Taxation			(27)				(1)				(70)				-				(98)
Profit			248				20				229				(249)				248
Preferred stock dividends			(9)				-				(9)				18				-
Profit for the period			239				20				220				(231)				248
Allocated as follows:
Equity shareholders			239				20				211				(231)				239
Non-controlling interests			-				-				9				-				9
			239				20				220				(231)				248
Comprehensive income			90				21				216				(228)				99
Comprehensive income attributable to non-controlling interests			-				-				(9)				-				(9)
Comprehensive income attributable to AngloGold Ashanti			90				21				207				(228)				90

 

				27

---

  Condensed consolidating income statement for the year ended 31 December 2013

 

US Dollar million		AngloGold Ashanti (the “Guarantor”)				IOMco (the “Issuer”)				Other subsidiaries (the “Non-Guarantor Subsidiaries”)				Consolidation adjustments				Total
Revenue			1,762				3				3,945				(2)				5,708
Gold income			1,747				-				3,864				(114)				5,497
Cost of sales			(1,302)				-				(2,844)				-				(4,146)
Gain on non-hedge derivatives and other commodity contracts			-				-				94				-				94
Gross profit			445				-				1,114				(114)				1,445
Corporate administration, marketing and other (expenses) income			(51)				6				(102)				(54)				(201)
Exploration and evaluation costs			(21)				(7)				(227)				-				(255)
Other operating expenses			(11)				(4)				(5)				1				(19)
Special items			(1,754)				(1,590)				(2,511)				2,445				(3,410)
Operating loss			(1,392)				(1,595)				(1,731)				2,278				(2,440)
Dividends received			7				-				-				(2)				5
Interest received			4				2				33				-				39
Exchange gain			10				1				3				-				14
Finance costs and unwinding of obligations			(23)				(155)				(118)				-				(296)
Fair value adjustment on $1.25bn bonds			-				(58)				-				-				(58)
Fair value adjustment on option component of convertible bonds			-				-				9				-				9
Fair value adjustment on mandatory convertible bonds			-				-				356				-				356
Share of associates and joint ventures’ loss			(143)				(19)				-				-				(162)
Equity loss in subsidiaries			(689)				(1,287)				-				1,976				-
Loss before taxation			(2,226)				(3,111)				(1,448)				4,252				(2,533)
Taxation			53				(6)				286				-				333
Loss			(2,173)				(3,117)				(1,162)				4,252				(2,200)
Preferred stock dividends			(57)				-				(57)				114				-
Loss for the year			(2,230)				(3,117)				(1,219)				4,366				(2,200)
Allocated as follows
Equity shareholders			(2,230)				(3,117)				(1,249)				4,366				(2,230)
Non-controlling interests			-				-				30				-				30
			(2,230)				(3,117)				(1,219)				4,366				(2,200)
Comprehensive income			(2,605)				(3,170)				(1,271)				4,471				(2,575)
Comprehensive income attributable to non-controlling interests			-				-				(30)				-				(30)
Comprehensive income attributable to AngloGold Ashanti			(2,605)				(3,170)				(1,301)				4,471				(2,605)

 

				28

---

  Condensed consolidating statement of financial position as at 31 March 2014

 

US Dollar million				AngloGold Ashanti (the “Guarantor”)				IOMco (the “Issuer”)				Other subsidiaries (the “Non-Guarantor Subsidiaries”)				Consolidation adjustments				Total
ASSETS
Non-current assets
Tangible assets					1,427				-				3,458				-				4,885
Intangible assets					47				-				225				(3)				269
Investments in associates and joint ventures					2,587				3,972				1,213				(6,381)				1,391
Other investments					3				5				138				(5)				141
Inventories					-				-				617				-				617
Trade and other receivables					-				4				21				-				25
Deferred taxation					-				-				169				-				169
Cash restricted for use					-				-				37				-				37
Other non-current assets					50				-				-				-				50
					4,114				3,981				5,878				(6,389)				7,584
Current assets
Other investments					-				-				1				-				1
Inventories, trade and other receivables, intergroup balances and other current assets					510				2,508				1,610				(3,232)				1,396
Cash restricted for use					1				-				13				-				14
Cash and cash equivalents					70				251				204				-				525
					581				2,759				1,828				(3,232)				1,936
Non-current assets held for sale					5				-				158				(5)				158
					586				2,759				1,986				(3,237)				2,094
Total assets					4,700				6,740				7,864				(9,626)				9,678
EQUITY AND LIABILITIES
Share capital and premium					7,024				5,994				805				(6,799)				7,024
(Accumulated losses) retained earnings and other reserves					(3,885)				(2,514)				1,545				970				(3,884)
Shareholders’ equity					3,139				3,480				2,350				(5,829)				3,140
Non-controlling interests					-				-				35				-				35
Total equity					3,139				3,480				2,385				(5,829)				3,175
Non-current liabilities					643				3,102				1,585				(3)				5,327
Bank overdraft					5				-				17				-				22
Current liabilities including intergroup balances					913				158				3,818				(3,794)				1,095
Non-current liabilities held for sale					-				-				59				-				59
Total liabilities					1,561				3,260				5,479				(3,797)				6,503
Total equity and liabilities					4,700				6,740				7,864				(9,626)				9,678

 

				29

---

  Condensed consolidating statement of financial position as at 31 December 2013

 

US Dollar million				AngloGold Ashanti (the “Guarantor”)				IOMco (the “Issuer”)				Other subsidiaries (the “Non-Guarantor Subsidiaries”)				Consolidation adjustments				Total
ASSETS
Non-current assets
Tangible assets					1,457				-				3,358				-				4,815
Intangible assets					52				-				218				(3)				267
Investments in associates and joint ventures					2,581				3,401				1,153				(5,808)				1,327
Other investments					2				6				129				(6)				131
Inventories					-				-				586				-				586
Trade and other receivables					-				5				24				-				29
Deferred taxation					-				-				177				-				177
Cash restricted for use					-				-				31				-				31
Other non-current assets					41				-				-				-				41
					4,133				3,412				5,676				(5,817)				7,404
Current assets
Other investments					-				-				1				-				1
Inventories, trade and other receivables, intergroup balances and other current assets					492				2,391				1,703				(3,164)				1,422
Cash restricted for use					1				-				45				-				46
Cash and cash equivalents					39				409				200				-				648
					532				2,800				1,949				(3,164)				2,117
Non-current assets held for sale					5				-				153				(5)				153
					537				2,800				2,102				(3,169)				2,270
Total assets					4,670				6,212				7,778				(8,986)				9,674
EQUITY AND LIABILITIES
Share capital and premium					7,006				5,994				805				(6,799)				7,006
(Accumulated losses) retained earnings and other reserves					(3,927)				(2,990)				1,431				1,559				(3,927)
Shareholders’ equity					3,079				3,004				2,236				(5,240)				3,079
Non-controlling interests					-				-				28				-				28
Total equity					3,079				3,004				2,264				(5,240)				3,107
Non-current liabilities					648				3,032				1,653				(2)				5,331
Bank overdraft					-				-				20				-				20
Current liabilities including intergroup balances					943				176				3,784				(3,744)				1,159
Non-current liabilities held for sale					-				-				57				-				57
Total liabilities					1,591				3,208				5,514				(3,746)				6,567
Total equity and liabilities					4,670				6,212				7,778				(8,986)				9,674

 

				30

---

  Condensed consolidating statement of financial position as at 31 March 2013

 

US Dollar million				AngloGold Ashanti (the “Guarantor”)				IOMco (the “Issuer”)				Other subsidiaries (the  “Non-Guarantor Subsidiaries”)				Consolidation adjustments				Total
ASSETS
Non-current assets
Tangible assets					1,879				-				5,864				-				7,743
Intangible assets					55				-				269				(3)				321
Investments in associates and joint ventures					4,765				4,596				1,022				(9,211)				1,172
Other investments					4				6				154				(17)				147
Inventories					-				-				647				-				647
Trade and other receivables					-				8				40				-				48
Deferred taxation					-				-				93				-				93
Cash restricted for use					-				-				29				-				29
Other non-current assets					-				-				7				-				7
					6,703				4,610				8,125				(9,231)				10,207
Current assets
Inventories, trade and other receivables, intergroup balances and other current assets					1,621				2,732				3,375				(6,066)				1,662
Cash restricted for use					1				-				33				-				34
Cash and cash equivalents					36				356				288				-				680
					1,658				3,088				3,696				(6,066)				2,376
Total assets					8,361				7,698				11,821				(15,297)				12,583
EQUITY AND LIABILITIES
Share capital and premium					6,752				5,649				802				(6,451)				6,752
(Accumulated losses) retained earnings and other reserves					(1,204)				(1,297)				3,568				(2,271)				(1,204)
Shareholders’ equity					5,548				4,352				4,370				(8,722)				5,548
Non-controlling interests					-				-				21				-				21
Total equity					5,548				4,352				4,391				(8,722)				5,569
Non-current liabilities					752				1,723				2,827				(13)				5,289
Current liabilities including intergroup balances					2,061				1,623				4,603				(6,562)				1,725
Total liabilities					2,813				3,346				7,430				(6,575)				7,014
Total equity and liabilities					8,361				7,698				11,821				(15,297)				12,583

 

				31

---

  Condensed consolidating statement of cash flow for the quarter ended 31 March 2014

 

US Dollar million		AngloGold Ashanti (the “Guarantor”)				IOMco (the “Issuer”)				Other subsidiaries (the  “Non-Guarantor Subsidiaries”)				Consolidation adjustments				Total
Cash flows from operating activities
Cash generated from operations			91				19				277				(4)				383
Net movement in intergroup receivables and payables			(16)				(118)				130				4				-
Taxation refund			-				-				37				-				37
Taxation paid			-				-				(70)				-				(70)
Net cash inflow (outflow) from operating activities			75				(99)				374				-				350
Cash flows from investing activities
Capital expenditure			(42)				-				(178)				-				(220)
Other investments acquired			-				-				(26)				-				(26)
Proceeds from disposal of other investments			-				-				24				-				24
Investments in associates and joint ventures			-				(37)				(3)				-				(40)
Net loans advanced to associates and joint ventures			-				(4)				-				-				(4)
Reclassification of cash balances to held for sale assets			-				-				(1)				-				(1)
Increase in cash restricted for use			-				-				26				-				26
Interest received			-				1				3				-				4
Net cash outflow from investing activities			(42)				(40)				(155)				-				(237)
Cash flows from financing activities
Proceeds from borrowings			-				-				15				-				15
Repayment of borrowings			(5)				-				(166)				-				(171)
Finance costs paid			(3)				(70)				(8)				-				(81)
Intergroup dividends received (paid)			-				54				(54)				-				-
Net cash outflow from financing activities			(8)				(16)				(213)				-				(237)
Net increase (decrease) in cash and cash equivalents			25				(155)				6				-				(124)
Translation			1				-				(2)				-				(1)
Cash and cash equivalents at beginning of year			39				409				180				-				628
Cash and cash equivalents at end of year(1)			65				254				184				-				503

⁽¹⁾ Cash and cash equivalents are net of a bank overdraft of $22 million.

 

				32

---

  Condensed consolidating statement of cash flow for the quarter ended 31 December 2013

 

US Dollar million		AngloGold Ashanti (the “Guarantor”)				IOMco (the “Issuer”)				Other subsidiaries (the  “Non-Guarantor Subsidiaries”)				Consolidation adjustments				Total
Cash flows from operating activities
Cash generated from operations			112				406				332				(410)				440
Net movement in intergroup receivables and payables			31				(509)				48				430				-
Taxation refund			12				-				10				-				22
Taxation paid			-				(1)				(30)				-				(31)
Net cash inflow (outflow) from operating activities			155				(104)				360				20				431
Cash flows from investing activities
Capital expenditure			(90)				-				(282)				-				(372)
Expenditure on intangible assets			(8)				-				(9)				-				(17)
Proceeds from disposal of tangible assets			-				-				2				-				2
Other investments acquired			-				-				(18)				-				(18)
Proceeds from disposal of other investments			-				-				15				-				15
Investments in associates and joint ventures			-				(71)				(7)				-				(78)
Net loans advanced to associates and joint ventures			-				(14)				-				-				(14)
Dividends received			2				-				-				(2)				-
Reclassification of cash balances to held for sale assets			-				-				3				-				3
Acquisition of subsidiary and loan			(39)				-				-				39				-
Increase in cash restricted for use			-				-				(13)				-				(13)
Interest received			1				1				8				-				10
Net cash outflow from investing activities			(134)				(84)				(301)				37				(482)
Cash flows from financing activities
Proceeds from issue of share capital			-				35				1				(36)				-
Proceeds from borrowings			204				-				34				-				238
Repayment of borrowings			(222)				-				(38)				-				(260)
Finance costs paid			(2)				(30)				(10)				-				(42)
Revolving credit facility and bond transaction costs			-				(2)				-				-				(2)
Dividends paid			-				-				(11)				-				(11)
Intergroup dividends received (paid)			-				97				(97)								-
Net cash (outflow) inflow from financing activities			(20)				100				(121)				(36)				(77)
Net increase (decrease) in cash and cash equivalents			1				(88)				(62)				21				(128)
Translation			(1)				-				17				(21)				(5)
Cash and cash equivalents at beginning of year			39				497				225				-				761
Cash and cash equivalents at end of year(1)			39				409				180				-				628

⁽¹⁾ Cash and cash equivalents are net of a bank overdraft of $20 million.

 

				33

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  Condensed consolidating statement of cash flow for the quarter ended 31 March 2013

 

US Dollar million		AngloGold Ashanti (the “Guarantor”)				IOMco (the “Issuer”)				Other subsidiaries (the  “Non-Guarantor Subsidiaries”)				Consolidation adjustments				Total
Cash flows from operating activities
Cash generated from operations			91				-				286				31				408
Net movement in intergroup receivables and payables			91				(182)				87				4				-
Dividends received from joint ventures			-				8				-				-				8
Taxation paid			-				-				(60)				-				(60)
Net cash inflow (outflow) from operating activities			182				(174)				313				35				356
Cash flows from investing activities
Capital expenditure			(96)				-				(288)				-				(384)
Interest capitalised and paid			-				-				(4)				-				(4)
Expenditure on intangible assets			(7)				-				(6)				-				(13)
Other investments acquired			-				-				(32)				-				(32)
Proceeds from disposal of other investments			-				-				27				-				27
Investments in associates and joint ventures			-				(134)				(16)				-				(150)
Proceeds from disposal of associates and joint ventures			5				-				-				-				5
Dividends received			5				-				-				-				5
Proceeds from disposal of subsidiary			1				-				-				-				1
Acquisition of subsidiary and loan			(66)				-				-				66				-
Interest received			1				1				2				-				4
Net cash outflow from investing activities			(157)				(133)				(317)				66				(541)
Cash flows from financing activities
Proceeds from issue of share capital			-				52				15				(67)				-
Proceeds from borrowings			35				-				111				-				146
Repayment of borrowings			(91)				-				(4)				-				(95)
Finance costs paid			(3)				(20)				(14)				-				(37)
Revolving credit facility and bond transaction costs			-				(5)				-				-				(5)
Dividends paid			(21)				-				(5)				-				(26)
Intergroup dividends received (paid)			-				99				(99)				-				-
Net cash (outflow) inflow from financing activities			(80)				126				4				(67)				(17)
Net decrease in cash and cash equivalents			(55)				(181)				-				34				(202)
Translation			(7)				-				31				(34)				(10)
Cash and cash equivalents at beginning of year			98				537				257				-				892
Cash and cash equivalents at end of year			36				356				288				-				680

 

				34

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  Condensed consolidating statement of cash flow for the year ended 31 December 2013

 

US Dollar million		AngloGold Ashanti (the “Guarantor”)				IOMco (the “Issuer”)				Other subsidiaries (the “Non-Guarantor Subsidiaries”)				Consolidation adjustments				Total
Cash flows from operating activities
Cash generated from (used) by operations			391				(126)				997				130				1,392
Net movement in intergroup receivables and payables			140				(1,593)				1,512				(59)				-
Dividends received from joint ventures			-				18				-				-				18
Taxation refund			13				-				10				-				23
Taxation paid			(13)				(1)				(173)				-				(187)
Net cash inflow (outflow) from operating activities			531				(1,702)				2,346				71				1,246
Cash flows from investing activities
Capital expenditure			(397)				-				(1,104)				-				(1,501)
Interest capitalised and paid			-				-				(5)				-				(5)
Expenditure on intangible assets			(26)				-				(42)				-				(68)
Proceeds from disposal of tangible assets			-				-				10				-				10
Other investments acquired			-				-				(91)				-				(91)
Proceeds from disposal of other investments			-				-				81				-				81
Investments in associates and joint ventures			-				(420)				(52)				-				(472)
Proceeds from disposal of associates and joint ventures			6				-				-				-				6
Net loans advanced to associates and joint ventures			(1)				(39)				-				32				(8)
Dividends received			7				-				-				(2)				5
Proceeds from disposal of subsidiary			2				-				-				-				2
Reclassification of cash balances to held for sale assets			-				-				(2)				-				(2)
Acquisition of subsidiary and loan			(168)				-				-				168				-
Increase in cash restricted for use			-				-				(20)				-				(20)
Interest received			4				2				17				-				23
Net cash outflow from investing activities			(573)				(457)				(1,208)				198				(2,040)
Cash flows from financing activities
Proceeds from issue of share capital			-				147				20				(167)				-
Proceeds from borrowings			504				1,500				340				-				2,344
Repayment of borrowings			(458)				(250)				(778)				-				(1,486)
Finance costs paid			(12)				(103)				(85)				-				(200)
Revolving credit facility and bond transaction costs			-				(36)				-				-				(36)
Dividends paid			(40)				-				(22)				-				(62)
Intergroup dividends received (paid)			-				773				(773)				-				-
Net cash (outflow) inflow from financing activities			(6)				2,031				(1,298)				(167)				560
Net decrease in cash and cash equivalents			(48)				(128)				(160)				102				(234)
Translation			(11)				-				83				(102)				(30)
Cash and cash equivalents at beginning of year			98				537				257				-				892
Cash and cash equivalents at end of year(1)			39				409				180				-				628

⁽¹⁾ Cash and cash equivalents are net of a bank overdraft of $20 million.

 

				35

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By order of the Board

 

S M PITYANA		S VENKATAKRISHNAN
Chairman		Chief Executive Officer
12 May 2014

 

				36

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Non-GAAP disclosure

From time to time AngloGold Ashanti Limited may publicly disclose certain “Non-GAAP” financial measures in the course of its financial presentations, earnings releases, earnings conference calls and otherwise.

The financial items “price received”, “price received per ounce”, “total cash costs”, “total cash costs per ounce”, “total production costs”, “total production costs per ounce”, “all-in sustaining costs” and “all-in sustaining costs per ounce” which have been determined using industry guidelines and practices and these are not measures under IFRS. An investor should not consider these items in isolation or as alternatives to production costs, profit/(loss) applicable to equity shareholders, profit/(loss) before taxation, cash flows from operating activities or any other measure of financial performance presented in accordance with IFRS.

The Gold Institute provided definitions for the calculation of total cash costs and total production costs and during June 2013 the World Gold Council published a Guidance Note on “all-in sustaining costs”. The calculation of total cash costs, total cash costs per ounce, total production costs, total production costs per ounce, all-in sustaining costs and all-in sustaining costs per ounce may vary significantly among gold mining companies, and by themselves do not necessarily provide a basis for comparison with other gold mining companies. However, we believe that total cash costs, total production costs and all-in sustaining costs in total by mine and per ounce by mine are useful indicators to investors and management of a mine’s performance because they provide:

 

•

an indication of a mine’s profitability, efficiency and cash flows;

 

•

the trend in costs as the mine matures over time on a consistent basis; and

 

•

an internal benchmark of performance to allow for comparison against other mines, both within the AngloGold  Ashanti group and of other gold

Price received gives an indication of revenue earned per unit of gold sold and includes gold income and realised non–hedge derivatives in its calculation and serves as a benchmark of performance against the spot price of gold.

The group uses certain Non-GAAP performance measures and ratios in managing the business and may provide users of this financial information with additional meaningful comparisons between current results and results in prior operating periods. Non-GAAP financial measures should be viewed in addition to, and not as an alternative to, the reported operating results or any other measure of performance prepared in accordance with IFRS. In addition, the presentation of these measures may not be comparable to similarly titled measures that other companies use.

 

A				Price received
						Quarter ended												Year ended
						Mar 2014				Dec 2013				Mar 2013				Dec 2013
						Unaudited				Unaudited				Unaudited				Unaudited
										US Dollar million / Imperial
				Gold income (note 2)			1,324				1,418				1,463				5,497
				Adjusted for non-controlling interests			(20	)			(15	)			(22	)			(77	)
							1,304				1,403				1,441				5,420
				Realised loss on other commodity contracts			5				6				7				26
				Associates and joint ventures’ share of gold income including realised non-hedge derivatives			106				105				69				290
				Attributable gold income including realised non-hedge derivatives			1,415				1,514				1,517				5,736
				Attributable gold sold - oz (000)			1,097				1,191				927				4,093
				Price received per unit - $/oz			1,290				1,271				1,636				1,401
				Rounding of figures may result in computational discrepancies.
						Quarter ended												Year ended
						Mar 2014				Dec 2013				Mar 2013				Dec 2013
						Unaudited				Unaudited				Unaudited				Unaudited
										US Dollar million / Imperial
B				All-in sustaining costs
				Cost of sales (note 3)			1,012				1,042				1,029				4,146
				Amortisation of tangible and intangible assets (note 3)			(184	)			(211	)			(215	)			(799	)
				Adjusted for decommissioning amortisation			2				2				2				6
				Inventory writedown to net realisable value and other stockpile adjustments (note 5)			-				38				-				216
				Corporate administration and marketing related to current operations			25				36				65				199
				Associates and joint ventures’ share of costs			68				90				47				234
				Sustaining exploration and study costs			10				16				31				94
				Total sustaining capex			174				253				243				999
				All-in sustaining costs			1,107				1,265				1,202				5,095
				Adjusted for non-controlling interests and non-gold producing companies			(17	)			(16	)			(19	)			(71	)
				All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies			1,090				1,249				1,183				5,024
				Adjusted for stockpile write-offs			-				(38	)			-				(216	)
				All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs			1,090				1,211				1,183				4,808
				Gold sold - oz (000)			1,097				1,191				927				4,093
				All-in sustaining cost (excluding stockpile write-offs) per unit - $/oz			993				1,015				1,275				1,174
C				Total costs
				Total cash costs (note 3)			778				861				797				3,297
				Adjusted for non-controlling interests, non-gold producing companies and other			(34	)			(20	)			(39	)			(110	)
				Associates and joint ventures’ share of total cash costs			68				79				46				219
				Total cash costs adjusted for non-controlling interests and non-gold producing companies			812				920				804				3,406
				Retrenchment costs (note 3)			6				16				6				69
				Rehabilitation and other non-cash costs (note 3)			22				(11	)			11				18
				Amortisation of tangible assets (note 3)			175				202				213				775
				Amortisation of intangible assets (note 3)			9				9				2				24
				Adjusted for non-controlling interests and non-gold producing companies			(4	)			17				(6	)			14
				Equity-accounted associates and joint ventures’ share of production costs			22				17				1				23
				Total production costs adjusted for non-controlling interests and non-gold producing companies			1,042				1,170				1,031				4,329
				Gold produced - oz (000)			1,055				1,229				899				4,105
				Total cash cost per unit - $/oz			770				748				894				830
				Total production cost per unit - $/oz			988				952				1,147				1,054
				Rounding of figures may result in computational discrepancies.

 

				37

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Summary of Operations by Mine

For the three months ended 31 March 2014

Operations in South Africa

(in $ millions, except as otherwise noted)

 

All-in sustaining costs
Cost of sales per financial statements			22				53				49				74				58				56				-				312				1
Amortisation of tangible and intangible assets			(2)				(20)				(12)				(17)				(17)				(5)				1				(72)				(3)
Adjusted for decomissioning amortisation			-				-				-				-				-				-				-				-				-
Inventory writedown to net realisable value and other stockpile adjustments			-				-				-				-				-				-				-				-				-
Corporate administration and marketing related to current operations			-				-				-				-				-				-				-				-				23
Associates and equity accounted joint ventures’ share of costs(2)			-				-				-				-				-				-				-				-				(1)
Sustaining exploration and study costs			-				-				-				-				-				-				-				-				-
Total sustaining capital expenditure			1				5				7				14				6				9				-				42				-
All-in sustaining costs			21				38				44				71				47				60				1				282				20
Adjusted for non-controlling interests(1)			-				-				-				-				-				-				-				-				3
All-in sustaining costs adjusted for non-controlling interests			21				38				44				71				47				60				1				282				23
Gold sold - oz (000)(3)			17				29				55				76				52				60				-				290
All-in sustaining cost (excluding stockpile impairments) per unit - $/oz(4)			1,200				1,320				802				930				916				1,000				-				975
Total cash costs
Total cash costs per financial statements			19				32				35				54				40				50				1				231				(1)
Adjusted for non-controlling interests, non-gold producing companies and other (1)			-				-				-				-				-				-				-				-				2
Associates and equity accounted joint ventures’ share of total cash costs (2)			-				-				-				-				-				-				-				-				(1)
Total cash costs adjusted for non-controlling interests and non-gold producing companies			19				32				35				54				40				50				1				231				-
Retrenchment costs			-				1				1				2				1				-				-				5				-
Rehabilitation and other non-cash costs			-				1				1				1				1				1				-				5				(2)
Amortisation of tangible assets			1				19				11				16				16				5				(1)				67				1
Amortisation of intangible assets			-				-				1				1				1				1				1				5				1
Adjusted for non-controlling interests and non-gold producing companies (1)			-				-				-				-				-				-				-				-				-
Associates and equity accounted joint ventures’ share of production costs(2)			-				-				-				-				-				-				-				-				1
Total production costs adjusted for non-controlling interests and non-gold producing companies			20				53				49				74				59				57				1				313				1
Gold produced – oz (000) (3)			17				29				55				76				52				60				-				290				-
Total cash costs per unit – $/oz (4)			1,123				1,074				646				709				774				836				-				797				-
Total production costs per unit – $/oz (4)			1,258				1,802				888				974				1,125				934				-				1,077				-

 

(1)

Adjusting for non-controlling interest of items included in calculation, to disclose the attributable portions only. Other consists of heap leach inventory.

(2)

Attributable costs and related expenses of associates and equity accounted joint ventures are included in the calculation of total cash costs per ounce and total production costs per ounce.

(3)

Attributable portion.

(4)

In addition to the operational performances of the mines, all-in sustaining cost per ounce, total cash costs per ounce and total production costs per ounce are affected by fluctuations in the currency exchange rate. AngloGold Ashanti reports all-in sustaining cost per ounce calculated to the nearest US dollar amount and gold sold in ounces. AngloGold Ashanti reports total cash costs per ounce and total production costs per ounce calculated to the nearest US dollar amount and gold produced in ounces.

(5)

Corporate includes non-gold producing subsidiaries.

(6)

Total cash costs per ounce calculation includes heap-leach inventory change.

 

				38

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For the three months ended 31 March 2014

Operations in DRC, Ghana, Guinea, Mali, Namibia and Tanzania

(in $ millions, except as otherwise noted)

 

All-in sustaining costs
Cost of sales per financial statements			-				52				71				78				-				-				-				14				109				1				325
Amortisation of tangible and intangible assets			-				(5)				(4)				(7)				-				-				-				-				(18)				(1)				(35)
Adjusted for decomissioning amortisation			-				-				-				1				-				-				-				-				-				-				1
Inventory writedown to net realisable value and other stockpile adjustments			-				-				-				-				-				-				-				-				-				-				-
Abandonment of stockpiles			-				-				-				-				-				-				-				-				-				-				-
Corporate administration and marketing related to current operations			-				-				-				-				-				-				-				-				-				1				1
Associates and equity accounted joint ventures’ share of costs(2)			28				-				-				-				11				23				7				-				-				-				69
Sustaining exploration and study costs			-				-				-				1				-				-				-				-				-				-				1
Total sustaining capital expenditure			2				4				14				9				4				1				-				-				36				-				70
All-in sustaining costs			30				51				81				82				15				24				7				14				127				1				432
Adjusted for non-controlling interests(1)			-				-				-				(12)				-				-				-				-				-				-				(12)
All-in sustaining costs adjusted for non-controlling interests			30				51				81				70				15				24				7				14				127				1				420
Gold sold - oz (000)(3)			51				57				53				71				10				17				4				17				122				-				401
All-in sustaining cost (excluding stockpile impairments) per unit - $/oz(4)			572				898				1,530				961				1,598				1,404				2,062				785				1,048				-				1,042
Total cash costs
Total cash costs per financial statements			-				32				66				66				-				-				-				13				67				(1)				243
Adjusted for non-controlling interests, non-gold producing companies and other (1)			-				-				-				(10)				-				-				-				-				-				-				(10)
Associates and equity accounted joint ventures’ share of total cash costs (2)			28				-				-				-				11				24				6				-				-				-				69
Total cash costs adjusted for non-controlling interests and non-gold producing companies			28				32				66				56				11				24				6				13				67				(1)				302
Retrenchment costs			-				-				-				-				-				-				-				-				1				-				1
Rehabilitation and other non-cash costs			-				1				2				1				-				-				-				-				3				-				7
Amortisation of tangible assets			-				5				4				7				-				-				-				-				18				1				35
Amortisation of intangible assets			-				-				-				-				-				-				-				-				-				1				1
Adjusted for non-controlling interests and non-gold producing companies (1)			-				-				-				(1)				-				-				-				-				-				-				(1)
Associates and equity accounted joint ventures’ share of production costs(2)			14				-				-				-				1				6				-				-				-				-				21
Total production costs adjusted for non-controlling interests and non-gold producing companies			42				38				72				63				12				30				6				13				89				1				366
Gold produced – oz (000) (3)			51				45				53				70				10				19				4				16				106				-				374
Total cash costs per unit – $/oz (4)			538				716				1,234				800				1,099				1,262				1,804				771				631				-				808
Total production costs per unit – $/oz (4)			806				857				1,346				907				1,215				1,591				1,889				780				832				-				977

 

				39

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For the three months ended 31 March 2014

Operations in Australia, United States of America, Argentina and Brazil

(in $ millions, except as otherwise noted)

 

All-in sustaining costs
Cost of sales per financial statements					89				62				6				157				43				56				81				37				-			217
Amortisation of tangible and intangible assets					(8)				(22)				-				(30)				-				(8)				(26)				(10)				-			(44)
Adjusted for decomissioning amortisation					-				1				-				1				-				-				-				-				-			-
Inventory writedown to net realisable value and other stockpile adjustments					-				-				-				-				-				-				-				-				-			-
Corporate administration and marketing related to current operations					-				-				1				1				-				-				-				-				-			-
Associates and equity accounted joint ventures’ share of costs(2)					-				-				-				-				-				-				-				-				-			-
Sustaining exploration and study costs					-				-				2				2				-				-				2				1				4			7
Total sustaining capital expenditure					9				18				0				27				4				7				17				7				-			35
All-in sustaining costs					90				59				9				158				47				55				74				35				4			215
Adjusted for non-controlling interests(1)					-				-				-				-				-				(4)				-				-				(4)			(8)
All-in sustaining costs adjusted for non-controlling interests					90				59				9				158				47				51				74				35				-			207
Gold sold - oz (000)(3)					83				86				-				168				47				65				92				34				-			237
All-in sustaining cost (excluding stockpile impairments) per unit - $/oz(4)					1,095				694				-				929				1,015				800				805				1,027				-			879
Total cash costs
Total cash costs per financial statements					75				42				4				121				60				41				58				25				-			184
Adjusted for non-controlling interests, non-gold producing companies and other (1)					-				-				-				-				(23)				(3)				-				-				-			(26)
Associates and equity accounted joint ventures’ share of total cash costs (2)					-				-				-				-				-				-				-				-				-			-
Total cash costs adjusted for non-controlling interests and non-gold producing companies					75				42				4				121				37				38				58				25				-			158
Retrenchment costs					-				-				-				-				-				-				-				-				-			-
Rehabilitation and other non-cash costs					-				-				1				1				8				2				-				-				1			11
Amortisation of tangible assets					8				22				-				30				-				8				24				10				-			42
Amortisation of intangible assets					-				-				-				-				-				-				1				-				1			2
Adjusted for non-controlling interests and non-gold producing companies (1)					-				-				-				-				(2)				(1)				-				-				-			(3)
Associates and equity accounted joint ventures’ share of production costs(2)					-				-				-				-				-				-				-				-				-			-
Total production costs adjusted for non-controlling interests and non-gold producing companies					83				64				5				152				43				47				83				35				2			210
Gold produced – oz (000) (3)					71				84				-				155				52				58				94				32				-			236
Total cash costs per unit – $/oz (4)					1,066				495				-				779				699(6)				644				619				799				-			668
Total production costs per unit – $/oz (4)					1,180				751				-				979				826				804				895				1,134				-			890

 

				40

---

For the three months ended 31 December 2013

Operations in South Africa

(in $ millions, except as otherwise noted)

 

All-in sustaining costs
Cost of sales per financial statements
			24				49				56				82				-				50				61				-				322			(5)
Amortisation of tangible and intangible assets			(2)				(10)				(12)				(19)				-				(13)				(6)								(62)			(2)
Adjusted for decomissioning amortisation			-				-				-				-				-				-				-				-				-			-
Inventory writedown to net realisable value and other stockpile adjustments			-				-				-				-				-				-				-				-				-			(2)
Corporate administration and marketing related to current operations			-				-				-				-				-				-				-				2				2			31
Associates and equity accounted joint ventures’ share of costs(2)			-				-				-				-				-				-				-				-				-			-
Sustaining exploration and study costs			-				-				-				-				-				-				-				-				-			-
Total sustaining capital expenditure			4				12				16				26				-				16				6				-				80			3
All-in sustaining costs			26				51				60				89				-				53				61				2				342			25
Adjusted for non-controlling interests(1)			-				-				-				-				-				-				-				-				-			-
All-in sustaining costs adjusted for non-controlling interests			26				51				60				89				-				53				61				2				342			25
Gold sold - oz (000)(3)			20				39				67				93				-				62				59				-				340
All-in sustaining cost (excluding stockpile impairments) per unit - $/oz(4)			1,294				1,296				890				963				-				852				1,039				-				1,005
Total cash costs
Total cash costs per financial statements			20				36				40				61				-				50				53				-				260			(8)
Adjusted for non-controlling interests, non-gold producing companies and other (1)			-				-				-				-				-				-				-				-				-			8
Associates and equity accounted joint ventures’ share of total cash costs (2)			-				-				-				-				-				-				-				-				-			-
Total cash costs adjusted for non-controlling interests and non-gold producing companies			20				36				40				61				-				50				53				-				260			-
Retrenchment costs			1				2				1				2				-				-				-				-				6			(1)
Rehabilitation and other non-cash costs			1				2				3				-				-				(13)				1				(2)				(8)			-
Amortisation of tangible assets			2				9				11				18				-				12				6				-				58			1
Amortisation of intangible assets			-				1				1				2				-				1				-				-				5			1
Adjusted for non-controlling interests and non-gold producing companies (1)			-				-				-				-				-				-				-				-				-			1
Associates and equity accounted joint ventures’ share of production costs(2)			-				-				-				-				-				-				-				-				-			-
Total production costs adjusted for non-controlling interests and non-gold producing companies			24				50				56				83				-				50				60				(2)				321			2
Gold produced – oz (000) (3)			20				39				67				93				-				62				58				-				339			-
Total cash costs per unit – $/oz (4)			1,032				910				596				656				-				809				915				-				767			-
Total production costs per unit – $/oz (4)			1,198				1,239				835				885				-				809				1,035				-				946			-

(1)

Adjusting for non-controlling interest of items included in calculation, to disclose the attributable portions only. Other consists of heap leach inventory of Cripple Creek & Victor.

(2)

Attributable costs and related expenses of associates and equity accounted joint ventures are included in the calculation of total cash costs per ounce and total production costs per ounce.

(3)

Attributable portion.

(4)

In addition to the operational performances of the mines, all-in sustaining cost per ounce, total cash costs per ounce and total production costs per ounce are affected by fluctuations in the currency exchange rate. AngloGold Ashanti reports all-in sustaining cost per ounce calculated to the nearest US dollar amount and gold sold in ounces. AngloGold Ashanti reports total cash costs per ounce and total production costs per ounce calculated to the nearest US dollar amount and gold produced in ounces.

(5)

Corporate includes non-gold producing subsidiaries.

(6)

Total cash costs per ounce calculation includes heap-leach inventory change.

(7)

As from 1 January 2013, Tau Tona and Savuka were mined as one operation.

 

				41

---

For the three months ended 31 December 2013

Operations in DRC, Ghana, Guinea, Mali, Namibia and Tanzania

(in $ millions, except as otherwise noted)

 

All-in sustaining costs
Cost of sales per financial statements					-				72				94				76				-				-				-				8				98				5			353
Amortisation of tangible and intangible assets					-				(8)				(2)				(8)				-				-				-				-				(33)				-			(51)
Adjusted for decomissioning amortisation					-				-				-				1				-				-				-				-				-				1			2
Inventory writedown to net realisable value and other stockpile adjustments					-				-				-				-				-				17				-				-				23				-			40
Corporate administration and marketing related to current operations					-				-				-				-				-				-				-				-				-				(2)			(2)
Associates and equity accounted joint ventures’ share of costs(2)					19				-				-				-				11				41				18				-				-				1			90
Sustaining exploration and study costs					-				-				-				5				-				1				-				-				1				-			7
Total sustaining capital expenditure					-				6				37				10				6				(1)				-				1				50				-			109
All-in sustaining costs					19				70				129				84				17				58				18				9				139				5			548
Adjusted for non-controlling interests(1)					-				-				-				(13)				-				-				-				-				-				1			(12)
All-in sustaining costs adjusted for non-controlling interests					19				70				129				71				17				58				18				9				139				6			536
Gold sold - oz (000)(3)					40				62				62				64				12				24				8				17				147				-			437
All-in sustaining cost (excluding stockpile impairments) per unit - $/oz(4)					469				1,153				2,069				1,116				1,434				1,639				2,226				526				784				-			1,129
Total cash costs
Total cash costs per financial statements					-				65				86				75				-				-				-				9				83				-			318
Adjusted for non-controlling interests, non-gold producing companies and other (1)					-				-				-				(11)				-				-				-				-				-				-			(11)
Associates and equity accounted joint ventures’ share of total cash costs (2)					19				-				-				-				10				36				15				-				-				(1)			79
Total cash costs adjusted for non-controlling interests and non-gold producing companies					19				65				86				64				10				36				15				9				83				(1)			386
Retrenchment costs					-				5				1				-				-				-				-				-				-				3			9
Rehabilitation and other non-cash costs					-				6				6				3				-				-				-				(1)				(1)				1			14
Amortisation of tangible assets					-				7				2				8				-				-				-				-				33				-			50
Amortisation of intangible assets					-				-				-				-				-				-				-				-				-				1			1
Adjusted for non-controlling interests and non-gold producing companies (1)					-				-				-				(2)				-				-				-				-				-				-			(2)
Associates and equity accounted joint ventures’ share of production costs(2)					9				-				-				-				2				4				3				-				-				(1)			17
Total production costs adjusted for non-controlling interests and non-gold producing companies					28				83				95				73				12				40				18				8				115				3			476
Gold produced – oz (000) (3)					40				67				63				75				12				24				8				18				154				-			460
Total cash costs per unit – $/oz (4)					471				966				1,354				844				853				1,506				1,923				524				543				-			839
Total production costs per unit – $/oz (4)					694				1,240				1,492				967				982				1,673				2,255				485				755				-			1,034

 

				42

---

For the three months ended 31 December 2013

Operations in Australia, United States of America, Argentina and Brazil

(in $ millions, except as otherwise noted)

 

All-in sustaining costs
Cost of sales per financial statements					97				64				1				162				40				46				91				32				1			210
Amortisation of tangible and intangible assets					(27)				(27)				(2)				(56)				-				(7)				(22)				(10)				(1)			(40)
Adjusted for decomissioning amortisation					-				-				-				-				-				-				-				-				-			-
Inventory writedown to net realisable value and other stockpile adjustments					-				-				-				-				-				-				-				-				-			-
Corporate administration and marketing related to current operations					-				-				-				-				3				-				2				-				-			5
Associates and equity accounted joint ventures’ share of costs(2)					-				-				-				-				-				-				-				-				-			-
Sustaining exploration and study costs					-				-				2				2				1				-				4				2				-			7
Total sustaining capital expenditure
					6				-				1				7				8				11				37				9				(11)			54
All-in sustaining costs					76				37				2				115				52				50				112				33				(11)			236
Adjusted for non-controlling interests(1)					-				-				-				-				-				(4)				-				-				-			(4)
All-in sustaining costs adjusted for non-controlling interests					76				37				2				115				52				46				112				33				(11)			232
Gold sold - oz (000)(3)					94				58				-				152				48				54				126				34				-			262
All-in sustaining cost (excluding stockpile impairments) per unit - $/oz(4)					804				640				-				763				1,076				852				891				956				-			887
Total cash costs
Total cash costs per financial statements					70				38				-				108				52				44				62				24				1			183
Adjusted for non-controlling interests, non-gold producing companies and other (1)					-				-				-				-				(13)				(3)				-				-				(1)			(17)
Associates and equity accounted joint ventures’ share of total cash costs (2)					-				-				-				-				-				-				-				-				-			-
Total cash costs adjusted for non-controlling interests and non-gold producing companies					70				38				-				108				39				41				62				24				-			166
Retrenchment costs					-				-				1				1				-				-				-				-				1			1
Rehabilitation and other non-cash costs					-				2				-				2				(19)				-				2				(3)				1			(19)
Amortisation of tangible assets					27				27				1				55				-				7				21				10				-			38
Amortisation of intangible assets					-				-				-				-				-				-				1				-				1			2
Adjusted for non-controlling interests and non-gold producing companies (1)					-				-				-				-				20				(1)				-				-				(1)			18
Associates and equity accounted joint ventures’ share of production costs(2)					-				-				-				-				-				-				-				-				-			-
Total production costs adjusted for non-controlling interests and non-gold producing companies					97				67				2				166				40				47				86				31				2			206
Gold produced – oz (000) (3)					102				66				-				169				47				61				120				34				-			262
Total cash costs per unit – $/oz (4)					685				569				-				640				825(6)				672				518				712				-			634
Total production costs per unit – $/oz (4)					945				1,016				-				985				846				784				720				928				-			787

 

				43

---

For the three months ended 31 March 2013

Operations in South Africa

(in $ millions, except as otherwise noted)

 

All-in sustaining costs
Cost of sales per financial statements			28				54				60				87				-				71				54				-				354			4
Amortisation of tangible and intangible assets			(2)				(11)				(18)				(22)				-				(11)				(5)								(69)			-
Adjusted for decomissioning amortisation			-				-				-				-				-				-				-				-				-			1
Inventory writedown to net realisable value and other stockpile adjustments			-				-				-				-				-				-				-				-				-			-
Corporate administration and marketing related to current operations			-				-				-				-				-				-				-				1				1			55
Associates and equity accounted joint ventures’ share of costs(2)			-				-				-				-				-				-				-				-				-			2
Sustaining exploration and study costs			-				-				-				-				-				-				-				-				-			-
Total sustaining capital expenditure			3				12				21				20				-				14				-				(1)				69			3
All-in sustaining costs			29				55				63				85				-				74				49				-				355			65
Adjusted for non-controlling interests(1)			-				-				-				-				-				-				-				-				-			-
All-in sustaining costs adjusted for non-controlling interests			29				55				63				85				-				74				49				-				355			65
Gold sold - oz (000)(3)			23				45				40				91				-				56				60				-				314
All-in sustaining cost (excluding stockpile impairments) per unit - $/oz(4)			1,243				1,228				1,564				929				-				1,319				832				-				1,129
Total cash costs
Total cash costs per financial statements			26				44				45				66				-				61				50				1				293			3
Adjusted for non-controlling interests, non-gold producing companies and other (1)			-				-				-				-				-				-				-				-				-			(3)
Associates and equity accounted joint ventures’ share of total cash costs (2)			-				-				-				-				-				-				-				-				-			-
Total cash costs adjusted for non-controlling interests and non-gold producing companies			26				44				45				66				-				61				50				1				293			-
Retrenchment costs			1				-				-				-				-				-				1				-				2			1
Rehabilitation and other non-cash costs			-				1				1				1				-				1				-				-				4			(1)
Amortisation of tangible assets			2				11				18				22				-				11				5				-				69			-
Amortisation of intangible assets			-				-				-				-				-				-				-				-				-			1
Adjusted for non-controlling interests and non-gold producing companies (1)			-				-				-				-				-				-				-				-				-			(1)
Associates and equity accounted joint ventures’ share of production costs(2)			-				-				-				-				-				-				-				-				-			(1)
Total production costs adjusted for non-controlling interests and non-gold producing companies			29				56				64				89				-				73				56				1				368			(1)
Gold produced – oz (000) (3)			24				47				43				93				-				57				63				-				327			-
Total cash costs per unit – $/oz (4)			1,108				932				1,052				707				-				1,070				805				-				896			-
Total production costs per unit – $/oz (4)			1,220				1,193				1,496				950				-				1,280				892				-				1,123			-

(1)

Adjusting for non-controlling interest of items included in calculation, to disclose the attributable portions only. Other consists of heap leach inventory of Cripple Creek & Victor.

(2)

Attributable costs and related expenses of associates and equity accounted joint ventures are included in the calculation of total cash costs per ounce and total production costs per ounce.

(3)

Attributable portion.

(4)

In addition to the operational performances of the mines, all-in sustaining cost per ounce, total cash costs per ounce and total production costs per ounce are affected by fluctuations in the currency exchange rate. AngloGold Ashanti reports all-in sustaining cost per ounce calculated to the nearest US dollar amount and gold sold in ounces. AngloGold Ashanti reports total cash costs per ounce and total production costs per ounce calculated to the nearest US dollar amount and gold produced in ounces.

(5)

Corporate includes non-gold producing subsidiaries.

(6)

Total cash costs per ounce calculation includes heap-leach inventory change.

(7)

As from 1 January 2013, Tau Tona and Savuka were mined as one operation.

 

				44

---

For the three months ended 31 March 2013

Operations in DRC, Ghana, Guinea, Mali, Namibia and Tanzania

(in $ millions, except as otherwise noted)

 

All-in sustaining costs
Cost of sales per financial statements					-				55				123				91				-				-				-				17				71				4				361
Amortisation of tangible and intangible assets					-				(7)				(23)				(6)				-				-				-				(4)				(29)				(2)				(71)
Adjusted for decomissioning amortisation					-				-				-				1				-				-				-				-				-				-				1
Inventory writedown to net realisable value and other stockpile adjustments					-				-				-				-				-				-				-				-				-				-				-
Corporate administration and marketing related to current operations					2				-				-				-				-				-				-				-				-				2				4
Associates and equity accounted joint ventures’ share of costs(2)					-				-				-				-				12				19				13				-				-				1				45
Sustaining exploration and study costs					-				-				2				5				-				1				-				-				2				-				10
Total sustaining capital expenditure					-				7				47				8				1				3				-				1				31				-				98
All-in sustaining costs					2				55				149				99				13				23				13				14				75				5				448
Adjusted for non-controlling interests(1)					-				-				-				(15)				-				-				-				-				-				-				(15)
All-in sustaining costs adjusted for non-controlling interests					2				55				149				84				13				23				13				14				75				5				433
Gold sold - oz (000)(3)					-				43				57				72				15				18				10				14				86				-				315
All-in sustaining cost (excluding stockpile impairments) per unit - $/oz(4)					-				1,286				2,608				1,172				883				1,317				1,350				1,005				878				-				1,376
Total cash costs
Total cash costs per financial statements					-				43				86				73				-				-				-				12				26				-				240
Adjusted for non-controlling interests, non-gold producing companies and other (1)					-				-				-				(11)				-				-				-				-				-				-				(11)
Associates and equity accounted joint ventures’ share of total cash costs (2)					-				-				-				-				12				21				13				-				-				-				46
Total cash costs adjusted for non-controlling interests and non-gold producing companies					-				43				86				62				12				21				13				12				26				-				275
Retrenchment costs					-				-				2				-				-				-				-				-				-				-				2
Rehabilitation and other non-cash costs					-				1				2				1				-				-				-				-				1				-				5
Amortisation of tangible assets					-				7				23				6				-				-				-				4				29				1				70
Amortisation of intangible assets					-				-				-				-				-				-				-				-				-				1				1
Adjusted for non-controlling interests and non-gold producing companies (1)					-				-				-				(1)				-				-				-				-				-				-				(1)
Associates and equity accounted joint ventures’ share of production costs(2)					-				-				-				-				1				-				1				-				-				-				2
Total production costs adjusted for non-controlling interests and non-gold producing companies					-				51				113				68				13				21				14				16				56				2				354
Gold produced – oz (000) (3)					-				41				49				62				15				19				10				14				66				-				276
Total cash costs per unit – $/oz (4)					-				1,052				1,742				998				772				1,103				1,316				896				389				-				994
Total production costs per unit – $/oz (4)					-				1,235				2,290				1,087				841				1,124				1,377				1,221				839				-				1,278

 

				45

---

For the three months ended 31 March 2013

Operations in Australia, United States of America, Argentina and Brazil

(in $ millions, except as otherwise noted)

 

All-in sustaining costs
Cost of sales per financial statements			87				-				4				91				44				45				97				32				1			219
Amortisation of tangible and intangible assets			(13)				-				(1)				(14)				(11)				(10)				(30)				(9)				(1)			(61)
Adjusted for decomissioning amortisation			-				-				-				-				-				-				-				-				-			-
Inventory writedown to net realisable value and other stockpile adjustments			-				-				-				-				-				-				-				-				-			-
Corporate administration and marketing related to current operations			-				-				-				-				4				-				1				-				-			5
Associates and equity accounted joint ventures’ share of costs(2)			-				-				-				-				-				-				-				-				-			-
Sustaining exploration and study costs			7				1				3				11				1				3				4				2				-			10
Total sustaining capital expenditure			19				-				-				19				1				18				21				7				7			54
All-in sustaining costs			100				1				6				107				39				56				93				32				7			227
Adjusted for non-controlling interests(1)			-				-				-				-				-				(4)				-				-				-			(4)
All-in sustaining costs adjusted for non-controlling interests			100				1				6				107				39				52				93				32				7			223
Gold sold - oz (000)(3)			58				-				-				58				53				54				99				34				-			241
All-in sustaining cost (excluding stockpile impairments) per unit - $/oz(4)			1,727				-				-				1,857				743				955				933				952				-			924
Total cash costs
Total cash costs per financial statements			76				-				3				79				58				35				63				25				1			182
Adjusted for non-controlling interests, non-gold producing companies and other (1)			-				-				-				-				(23)				(3)				-				-				1			(25)
Associates and equity accounted joint ventures’ share of total cash costs (2)			-				-				-				-				-				-				-				-				-			-
Total cash costs adjusted for non-controlling interests and non-gold producing companies			76				-				3				79				35				32				63				25				2			157
Retrenchment costs			-				-				-				-				-				-				1				-				-			1
Rehabilitation and other non-cash costs			-				-				-				-				1				1				-				-				1			3
Amortisation of tangible assets			13				-				1				14				11				10				30				9				-			60
Amortisation of intangible assets			-				-				-				-				-				-				-				-				-			-
Adjusted for non-controlling interests and non-gold producing companies (1)			-				-				-				-				(3)				(1)				-				-				-			(4)
Associates and equity accounted joint ventures’ share of production costs(2)			-				-				-				-				-				-				-				-				-			-
Total production costs adjusted for non-controlling interests and non-gold producing companies			89				-				4				93				44				42				94				34				3			217
Gold produced – oz (000) (3)			61				-				-				61				55				55				92				32				-			234
Total cash costs per unit – $/oz (4)			1,247				-				-				1,302				643(6)				583				689				789				-			668
Total production costs per unit – $/oz (4)			1,460				-				-				1,525				803				783				1,028				1,082				-			926

 

				46

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For the year ended 31 December 2013

Operations in South Africa

(in $ millions, except as otherwise noted)

 

All-in sustaining costs
Cost of sales per financial statements			103				215				240				347				-				262				226				-				1,393			1
Amortisation of tangible and intangible assets			(8)				(43)				(60)				(82)				-				(51)				(9)								(253)			(9)
Adjusted for decomissioning amortisation			(1)				1				1				-				-				-				-				-				1			(1)
Inventory writedown to net realisable value and other stockpile adjustments			-				-				-				-				-				-				-				1				1			(1)
Corporate administration and marketing related to current operations			-				-				-				-				-				-				-				5				5			168
Associates and equity accounted joint ventures’ share of costs(2)			-				-				-				-				-				-				-				-				-			2
Sustaining exploration and study costs			-				-				-				-				-				-				-				-				-			(1)
Total sustaining capital expenditure			14				50				78				95				-				59				16				-				312			9
All-in sustaining costs			108				223				259				360				-				270				233				6				1,459			168
Adjusted for non-controlling interests(1)			-				-				-				-				-				-				-				-				-			-
All-in sustaining costs adjusted for non-controlling interests			108				223				259				360				-				270				233				6				1,459			168
Gold sold - oz (000)(3)			83				178				212				354				-				235				240				-				1,302
All-in sustaining cost (excluding stockpile impairments) per unit - $/oz(4)			1,305				1,255				1,223				1,016				-				1,149				969				-				1,120
Total cash costs
Total cash costs per financial statements			91				163				169				255				-				216				213				-				1,107			(7)
Adjusted for non-controlling interests, non-gold producing companies and other (1)			-				-				-				-				-				-				-				-				-			6
Associates and equity accounted joint ventures’ share of total cash costs (2)			-				-				-				-				-				-				-				-				-			-
Total cash costs adjusted for non-controlling interests and non-gold producing companies			91				163				169				255				-				216				213				-				1,107			(1)
Retrenchment costs			3				5				6				7				-				6				-				-				27			-
Rehabilitation and other non-cash costs			1				4				6				3				-				(10)				3				-				7			1
Amortisation of tangible assets			7				41				57				77				-				47				8				-				237			6
Amortisation of intangible assets			1				3				3				5				-				3				-				-				15			2
Adjusted for non-controlling interests and non-gold producing companies (1)			-				-				-				-				-				-				-				-				-			(3)
Associates and equity accounted joint ventures’ share of production costs(2)			-				-				-				-				-				-				-				-				-			1
Total production costs adjusted for non-controlling interests and non-gold producing companies			103				216				241				347				-				262				224				-				1,393			6
Gold produced – oz (000) (3)			83				178				212				354				-				235				240				-				1,302			-
Total cash costs per unit – $/oz (4)			1,100				918				797				719				-				920				883				-				850			-
Total production costs per unit – $/oz (4)			1,252				1,210				1,138				978				-				1,117				933				-				1,070			-

(1)

Adjusting for non-controlling interest of items included in calculation, to disclose the attributable portions only. Other consists of heap leach inventory of Cripple Creek & Victor.

(2)

Attributable costs and related expenses of associates and equity accounted joint ventures are included in the calculation of total cash costs per ounce and total production costs per ounce.

(3)

Attributable portion.

(4)

In addition to the operational performances of the mines, all-in sustaining cost per ounce, total cash costs per ounce and total production costs per ounce are affected by fluctuations in the currency exchange rate. AngloGold Ashanti reports all-in sustaining cost per ounce calculated to the nearest US dollar amount and gold sold in ounces. AngloGold Ashanti reports total cash costs per ounce and total production costs per ounce calculated to the nearest US dollar amount and gold produced in ounces.

(5)

Corporate includes non-gold producing subsidiaries.

(6)

Total cash costs per ounce calculation includes heap-leach inventory change.

(7)

As from 1 January 2013, Tau Tona and Savuka were mined as one operation.

 

				47

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For the year ended 31 December 2013

Operations in DRC, Ghana, Guinea, Mali, Namibia and Tanzania

(in $ millions, except as otherwise noted)

 

All-in sustaining costs
Cost of sales per financial statements			-				226				425				324				-				-				-				49				346				23			1,393
Amortisation of tangible and intangible assets			-				(30)				(50)				(27)				-				-				-				(6)				(120)				(6)			(239)
Adjusted for decomissioning amortisation			-				1				1				3				-				-				-				-				1				-			6
Inventory writedown to net realisable value and other stockpile adjustments			-				83				4				-				-				16				-				24				89				-			216
Corporate administration and marketing related to current operations			-				-				1				-				-				-				-				-				-				2			3
Associates and equity accounted joint ventures’ share of costs(2)			21				-				-				-				47				118				46				-				-				-			232
Sustaining exploration and study costs			-				1				6				18				-				2				-				1				11				-			39
Total sustaining capital expenditure			-				22				154				27				13				11				-				5				146				1			379
All-in sustaining costs			21				303				541				345				60				147				46				73				473				20			2,029
Adjusted for non-controlling interests(1)			-				-				-				(52)				-				-				-				-				-				(1)			(53)
All-in sustaining costs adjusted for non-controlling interests			21				303				541				293				60				147				46				73				473				19			1,976
Gold sold - oz (000)(3)			40				215				242				272				57				86				28				63				461				-			1,462
All-in sustaining cost (excluding stockpile impairments) per unit - $/oz(4)			529				1,025				2,214				1,085				1,051				1,510				1,653				781				833				-			1,202
Total cash costs
Total cash costs per financial statements			-				190				336				290				-				-				-				44				237				(3)			1,094
Adjusted for non-controlling interests, non-gold producing companies and other (1)			-				-				-				(43)				-				-				-				-				-				-			(43)
Associates and equity accounted joint ventures’ share of total cash costs (2)			19				-				-				-				44				114				42				-				-				-			219
Total cash costs adjusted for non-controlling interests and non-gold producing companies			19				190				336				247				44				114				42				44				237				(3)			1,270
Retrenchment costs			-				5				30				-				-				-				-				-				-				3			38
Rehabilitation and other non-cash costs			-				7				4				4				-				-				-				(1)				-				7			21
Amortisation of tangible assets			-				30				50				27				-				-				-				6				105				18			236
Amortisation of intangible assets			-				-				-				-				-				-				-				-				-				4			4
Adjusted for non-controlling interests and non-gold producing companies (1)			-				-				-				(5)				-				-				-				-				-				-			(5)
Associates and equity accounted joint ventures’ share of production costs(2)			9				-				-				-				4				5				4				-				-				-			22
Total production costs adjusted for non-controlling interests and non-gold producing companies			28				231				420				273				48				119				46				49				342				29			1,586
Gold produced – oz (000) (3)			40				221				239				268				57				86				27				63				459				-			1,460
Total cash costs per unit – $/oz (4)			471				861				1,406				918				773				1,334				1,530				691				515				-			869
Total production costs per unit – $/oz (4)			701				1,047				1,758				1,018				838				1,389				1,702				771				778				-			1,086

 

				48

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For the year ended 31 December 2013

Operations in Australia, United States of America, Argentina and Brazil

(in $ millions, except as otherwise noted)

 

All-in sustaining costs
Cost of sales per financial statements			366				64				19				449				201				199				374				133				3			910
Amortisation of tangible and intangible assets			(67)				(27)				(3)				(97)				(21)				(35)				(103)				(41)				(1)			(201)
Adjusted for decomissioning amortisation			-				-				-				-				-				-				-				-				-			-
Inventory writedown to net realisable value and other stockpile adjustments			-				-				-				-				-				-				-				-				-			-
Corporate administration and marketing related to current operations			-				-				1				1				15				-				6				-				1			22
Associates and equity accounted joint ventures’ share of costs(2)			-				-				-				-				-				-				-				-				-			-
Sustaining exploration and study costs			12				3				8				23				4				7				14				8				-			33
Total sustaining capital expenditure			39				25				5				69				15				61				118				36				-			230
All-in sustaining costs			350				65				30				445				214				232				409				136				3			994
Adjusted for non-controlling interests(1)			-				-				-				-				-				(18)				-				-				-			(18)
All-in sustaining costs adjusted for non-controlling interests			350				65				30				445				214				214				409				136				3			976
Gold sold - oz (000)(3)			265				58				-				323				231				236				399				141				-			1,007
All-in sustaining cost (excluding stockpile impairments) per unit - $/oz(4)			1,321				1,113				-				1,376				927				912				1,023				970				-			970
Total cash costs
Total cash costs per financial statements			306				38				14				358				230				162				253				99				1			745
Adjusted for non-controlling interests, non-gold producing companies and other (1)			-				-				-				-				(61)				(12)				-				-				-			(73)
Associates and equity accounted joint ventures’ share of total cash costs (2)			-				-				-				-				-				-				-				-				-			-
Total cash costs adjusted for non-controlling interests and non-gold producing companies			306				38				14				358				169				150				253				99				1			672
Retrenchment costs			-				-				1				1				-				1				2				-				-			3
Rehabilitation and other non-cash costs			(4)				2				1				(1)				(15)				1				7				(4)				1			(10)
Amortisation of tangible assets			67				27				4				98				21				35				101				40				1			198
Amortisation of intangible assets			-				-				-				-				-				-				2				-				1			3
Adjusted for non-controlling interests and non-gold producing companies (1)			-				-				-				-				25				(3)				-				-				-			22
Associates and equity accounted joint ventures’ share of production costs(2)			-				-				-				-				-				-				-				-				-			-
Total production costs adjusted for non-controlling interests and non-gold producing companies			369				67				20				456				199				185				364				136				4			888
Gold produced – oz (000) (3)			276				66				-				342				231				241				391				138				-			1,001
Total cash costs per unit – $/oz (4)			1,110				568				-				1,047				732(6)				622				646				719				-			671
Total production costs per unit – $/oz (4)			1,341				1,018				-				1,333				864				767				931				991				-			886

 

				49

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Administrative information

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

						AngloGold Ashanti Limited
Date:		May 19, 2014				By:  /s/  ME SANZ
						Name:		ME Sanz

						Title:		Group General Counsel
								and Company Secretary