SOURCE: AngloGold Ashanti

AngloGold Ashanti

May 03, 2011 07:00 ET

AngloGold Ashanti Limited -- First Quarter 2011 Market Update

JOHANNESBURG, SOUTH AFRICA--(Marketwire - May 3, 2011) - AngloGold Ashanti (NYSE: AU) will publish detailed first-quarter earnings on 11 May 2011. Given that this is the first reporting period in the company's history without the effects of its hedge book, which was eliminated on 7 October 2010, the company deems it prudent to release this market update in advance of its earnings.

AngloGold Ashanti is pleased to report that strong performances from its operations in Continental Africa and the Americas during the first quarter helped claw back much of the 20,000oz of production lost due to unprecedented rainfall at its Sunrise Dam mine in Australia.

First quarter production, therefore, remains on track with original guidance of 1.039Moz announced on 17 February 2011. Total cash costs will be around $706/oz compared with original guidance of $675/oz to $700/oz, given the combination of higher-than-anticipated oil prices and rising royalties on the back of record gold prices.

Earnings attributable to equity shareholders are anticipated to be around $241m for the quarter, higher than the $56m recorded during the previous quarter. After eliminating fair value adjustments of the two convertible bonds, adjusted headline earnings(1) are expected to be around $203m for the quarter. Further details on a per share basis are provided in the table below.

Improved cash flow per ounce of production, following the elimination of all hedge contracts, has also made possible a further 15% reduction in Net Debt(3) during the quarter from $1.3bn to $1.1bn.

                                                Quarter ended
                                  Quarter ended   December    Quarter ended
(All amounts in US cents per       March 2011       2010       March 2010
 share) (2)                       (Anticipated)   (Actual)      (Actual)
                                  ------------- ------------  -------------
Earnings per share attributable
 to Equity Shareholders                      62           15             43
                                  ------------- ------------  -------------
Headline Earnings per share                  62           21             46
                                  ------------- ------------  -------------
Adjusted Headline Earnings /
 (Loss) per share(1)                         53         (199)            17
                                  ------------- ------------  -------------

The above information has not been reviewed or reported upon by the company's external auditors.

Non-GAAP Measures: 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 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 cash flow from operations 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. For further details, including reconciliation to GAAP measures, please refer to AngloGold Ashanti's quarterly and annual reports.

1. Adjusted headline earnings is intended to illustrate earnings after
   adjusting for:
   --  The unrealised fair value change in contracts that were still open 
       at reporting dates, as well as, the unwinding of the historic
       marked-to-market value of the position settled in the period;
   --  Investment in hedge restructure transaction: During the hedge
       restructure in December 2004 and March 2005 quarters, $83m and $69m
       in cash was injected respectively into the hedge book in these
       quarters to increase the value of long-dated contracts. The entire
       investment in long-dated derivatives (certain of which have now
       matured), for the purposes of the adjustment to earnings, will only
       be taken into account when the realised portion of long-dated
       non-hedge derivatives are settled, and not when the short-term
       contracts were settled;
   --  The unrealised fair value change on the option component of the
       convertible bonds;
   --  The unrealised fair value change of the warrants on shares and the
       embedded derivative.

During 2010 the Group completed the elimination of its hedge book which has resulted in full exposure to prevailing spot gold prices.

2. Calculated on the basic weighted average number of ordinary shares.

3. Net Debt excludes Mandatory Convertible bonds issued in 2010.

Certain statements made in this communication, including, without
limitation, those concerning the economic outlook for the gold mining
industry, expectations regarding gold prices, production, cash costs and
other operating results, growth prospects and outlook of AngloGold
Ashanti's operations, individually or in the aggregate, including the
completion and commencement of commercial operations of certain of
AngloGold Ashanti's exploration and production projects, the completion of
announced mergers and acquisitions transactions, AngloGold Ashanti's
liquidity and capital resources, and expenditure and the outcome and
consequences of any litigation proceedings or environmental issues, contain
certain forward-looking statements regarding AngloGold Ashanti's
operations, economic performance and financial condition. Although
AngloGold Ashanti believes that the expectations reflected in such
forward-looking statements 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 and
market conditions, success of business and operating initiatives, changes
in the regulatory environment and other government actions including
environmental approvals and actions, fluctuations in gold prices and
exchange rates, and business and operational risk management. For a
discussion of certain of these factors, refer to AngloGold Ashanti's
annual report for the year ended 31 December 2010, which was distributed
to shareholders on 29 March 2011.  The company's 2009 annual report on
Form 20-F, was filed with the Securities and Exchange Commission in the
United States on April 19, 2010 and as amended on May 18, 2010. AngloGold
Ashanti undertakes no obligation to update publicly or release any
revisions to these forward-looking statements to reflect events or
circumstances after today's date or to reflect the occurrence of
unanticipated events.  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.

AngloGold Ashanti posts information that is important to investors on
the main page of its website at  and under the
"Investors" tab on the main page.  This information is updated regularly.
Investors should visit this website to obtain important information about
AngloGold Ashanti.

Contact Information

  • Contacts

    Alan Fine
    Tel: +27 (0) 11 637- 6383 /+27 (0) 83 250 0757
    E-mail: Email Contact

    Mike Bedford
    Tel: +27 (0) 11 637 6273 / +27 (0) 82 3748820
    E-mail: Email Contact

    Stewart Bailey
    Tel: +1 212 836 4303 / +1 646 338 4337
    E-mail: Email Contact