RNS Number:4337H
Ashanti Goldfields Company Ld
13 February 2003
ASHANTI GOLDFIELDS COMPANY LIMITED
PRESS RELEASE
FOR IMMEDIATE RELEASE 13 FEBRUARY 2003
PRELIMINARY RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2002
HIGHLIGHTS
* Earnings before exceptional items of US$79.7 million - up 33%
as compared to last year
* Proven and probable reserves increased
* Expansion programmes in progress at three mine sites
* Debt refinanced on better terms and ahead of schedule
* Group gross debt level reduced further by US$69.0 million
* Rights of hedge counterparties to call for margin cancelled
* All mines achieved improved NOSA safety ratings
2002 2001
Restated
Financial (US$)
Total Turnover 552.2m 554.4m
Earnings before exceptional items 79.7m 59.9m
Earnings after exceptional items 56.2m 59.9m
Group EBITDA before exceptional items 156.2m 158.9m
Total EBITDA before exceptional items 186.2m 191.7m
Earnings per share before exceptional items 0.67 0.53
Earnings per share after exceptional items 0.47 0.53
Gold Production (ounces)
Obuasi 537,219 528,451
Bibiani 242,432 253,052
Iduapriem/Teberebie 185,199 205,130
Ayanfuri - 11,517
Siguiri 269,292 283,199
Freda-Rebecca 98,255 102,654
Geita (group share) 289,522 272,781
Total 1,621,919 1,656,784
Total Production Costs before exceptional items (US$ per ounce)
Cash operating costs 199 190
Royalties 9 8
Depreciation and amortisation 54 55
Total 262 253
Ore Reserves and Mineral Resources (million ounces)*
Proved and Probable Ore Reserves 27.8 26.1
Measured and Indicated Mineral Resources 46.4 44.0
*includes 100% of interest in mines
Chief Executive's Review
Overview
It is gratifying for me to report that 2002 was a good year for Ashanti. The
Group's finances were successfully restructured, our impressive safety record
was further strengthened, expansion projects were commenced at a number of our
operations, exploration efforts yielded interesting results and our
diversification into other precious metals took a small but significant step in
the Republic of South Africa. We laid a firm foundation for Ashanti's
renaissance.
Safety, Health and Environment
The Group improved its strong safety record with Lost Time Injury Frequency Rate
- at 0.37 injuries per 200,000 hours worked - far better than the previous
year's rate of 0.58 injuries per 200,000 hours worked, a world class
performance.
Bibiani was re-rated for National Occupational Safety Association of Africa's
(NOSA) Four Star Integrated System and has also won the ISO14001 certification
of Environmental Management. Obuasi and Iduapriem/Teberebie mines were re-rated
3 and 4 Star respectively, by NOSA during the year.
Refinancing
The Group's refinancing was completed ahead of schedule and on better terms than
originally announced with appreciable support from the Company's stakeholders,
especially the Ghana Government and Lonmin Plc, who injected US$75 million in
the form of Mandatorily Exchangeable Notes. We improved our financial
flexibility by raising a new US$200 million Revolving Credit Facility from our
banks and additional equity of US$41.8 million from early exercise of warrants.
Another significant milestone achieved as part of the refinancing was securing
the cancellation of rights of hedge counterparties to call for margin, affording
Ashanti ongoing margin free trading on its hedge book.
Financial Performance
Profitability and cash flow improved over prior year's performance due largely
to the higher gold price. Ashanti's 2002 earnings before exceptional items were
US$79.7 million, 33% higher than the US$59.9 million recorded in 2001. Earnings
per share before exceptional items increased to US$0.67 (2001: US$0.53 per
share).
We also reduced our Group gross debt level further by US$69 million from
US$325.9 million to US$256.9 million. During the year, Ashanti's hedge book was
simplified further and exposure to floating lease rates was reduced by 2.4
million ounces to 2.6 million ounces. The commitments reduced by a further 1.0
million ounces to 6.5 million ounces, taking the total reduction achieved in our
commitments since 31 December 1999 to 5.7 million ounces.
Operations
Total gold production of 1,621,919 ounces in 2002 was marginally lower than the
1,656,784 ounces produced in the previous year. Reduced gold production was due
to operational challenges at Iduapriem, Bibiani, Siguiri and Freda-Rebecca.
Although Obuasi also experienced operational difficulties during the year, it
made a turnaround in the fourth quarter producing its best quarterly production
since the second quarter of 2000.
Total cash operating costs were US$199 per ounce compared with US$190 per ounce
in the previous year. The US$9 increase was due primarily to lower production.
In 2002, we embarked on several capital projects, including the expansion of the
processing plants at Iduapriem and Geita, which are due to be completed in 2003.
We also continued a deep level exploration programme at Obuasi. At Siguiri,
feasibility studies have confirmed the viability of constructing a
Carbon-in-Pulp (CIP) plant, with completion expected in early 2004 at a cost of
approximately US$32 million.
Exploration
Our value creation strategy for exploration continues to focus on growth through
replacement of current production and addition of new quality ounces with
emphasis, in the near term, on properties in and around the mine sites.
We have previously reported on promising results being obtained from our
drilling at the Obuasi deeps, which continues to confirm the quality of that ore
body. A continued scoping study at Obuasi has confirmed the potentionl to
develop the resources defined by these very promising results.
We were also able to define substantial new reserves/resources at Nyankanga and
other pits in Geita, Tanzania, and at Bidini in Siguiri, Guinea.
At year end 2002, our exploration efforts had resulted in an increase in total
ore reserves to 27.8 million ounces, up 7% on last year.
Community Relations
Ashanti believes that mining ought to be done with a human face. That is why our
commitment to operating in harmony with the community remains unequivocal.
Growth Strategy
Our strategy is to pursue a three-pronged approach in our pursuit of growth. We
plan to pursue quality gold assets in Africa, with priority at and around our
mine sites and in the countries where we currently operate. We also plan to seek
attractive diversification opportunities in precious minerals in Africa,
building on our recent award of a Platinum Group Metal (PGM) exploration
interest in the Republic of South Africa, and we plan to participate in the
ongoing industry consolidation from a position of strength.
Employees
It is our policy to focus on harnessing the human resource we have, and we are
convinced that our local training programmes are among the best in the gold
industry. In line with our philosophy, our operations across Africa are managed
by a number of local nationals.
The dedication, commitment and loyalty of our employees is commendable. They
have made all our achievements possible and we owe them our greatest gratitude.
Outlook for 2003
Judging from the gold price trend, there has been a significant turnaround for
gold, with the investor community having demonstrated a renewed interest in the
metal. Ashanti welcomes this development from which we have been benefiting in
respect of the unhedged portion of our production.
Nevertheless, there are important challenges that we face in 2003. These include
maintaining our production level at 1.63 million ounces for the full year at a
cash operating cost of below US$210 per ounce amidst rising fuel prices,
increases in power costs and wages, depreciation of the US dollar in which our
revenues are denominated, the appreciation in currencies of countries from which
we source our major inputs and rising costs of reagents which will potentially
impact on our costs and ultimately our profitability, if these trends do not
reverse. However, we believe that your Company is well placed to face these
challenges.
S E Jonah
Chief Executive & Group Managing Director
Operations Review
OverviewAlthough 2002 was a testing year operationally, the Group produced 1.62
million ounces, exceeding the annual target of 1.58 million ounces. Geita had an
excellent year in production as well as the discovery of additional reserves.
Expansion projects were implemented at Iduapriem and Geita, and are in the
process of being implemented at Siguiri. The principal operational challenges
were in grade control and leaching kinetics at Siguiri, grade and process
control problems at the Obuasi Sulphide Treatment Plant (STP) in the second and
third quarters, and a fire at Iduapriem coupled with the implications of tying
in the Carbon-in-Leach (CIL) plant expansion. Reserves at the Group's mines
increased (after production depletion) by 1.7 million ounces to 27.8 million
ounces from 26.1 million ounces in 2001.
Obuasi
Obuasi produced 537,219 ounces from underground and tailings retreatment
operations and from a small open pit deposit on the Homase concession located
approximately 16 kilometres to the north. This compares with 528,451 ounces that
the mine produced from underground and tailings retreatment the previous year.
Cash operating costs were US$198 per ounce compared to US$192 per ounce in 2001.
The higher cost resulted from the mining and processing of a higher tonnage of
lower grade material.
Underground Mining
Underground mining operations produced 2,423,000 tonnes, 3% lower than the
2,507,000 tonnes hoisted in 2001. The grade for the year at 7.48 g/t was 5%
lower than the 7.90 g/t achieved in 2001 as a result of production from lower
grade bulk mining blocks. Underground capital project work in 2002 focused on
shaft upgrade at the Brown Sub-Vertical Shaft (BSVS) in preparation for the
commencement of equipping in 2003, raise boring of the 300 ventilation shaft and
support and tracking of the 41 level haulage.
Surface Mining
Surface mining operations recommenced with the development of the Homase
concession open pit in the first quarter of the year. A total of 368,000 tonnes
at 2.71 g/t were mined at a strip ratio of 5.8:1. Mining is being undertaken
using in-house resources whilst the haulage of ore from Homase to Obuasi is
being carried out by contractors.
Processing
A total of 4,627,000 tonnes were processed compared to 4,060,000 tonnes in 2001,
the increase resulting from the re-commissioning of the Oxide Treatment Plant
(OTP) in the third quarter to process ores from Homase and greater throughput at
the Tailings Treatment Plant (TTP).
At STP, a total of 2,352,000 tonnes of ore at a grade of 7.35 g/t and a
metallurgical recovery of 84.8% was processed compared to 2,394,000 tonnes at a
grade of 7.53 g/t and a metallurgical recovery of 83.5% in 2001. Gold production
in 2002 was 471,359 ounces compared to 482,982 ounces in 2001, the reduction
being due to the lower feed grade and processed tonnage. Plant throughput and
processing efficiency were affected by higher than planned maintenance downtime
on the SAG mill and persistent power outages. In the second and third quarters
the BIOX(R) section of the plant under performed when bacterial activity was
impaired following the use of old nutrients in April. In the fourth quarter, a
SAG mill, previously installed at the Pompora Treatment Plant was relocated to
STP to provide additional capacity and operational flexibility. Full
commissioning of this mill will take place in the first quarter of 2003.
OTP processed a total of 435,000 tonnes of Homase open pit ore and heap leach
tailings to produce 23,390 ounces.
Throughput at the TTP was 1,840,000 tonnes at 2.29 g/t compared to 1,666,000
tonnes at 2.46 g/t in 2001. Metallurgical recovery at 31.2% was a reduction on
the previous year's 32.7%. The lower feed grade and recovery resulted in the
production of 42,275 ounces compared to 42,999 ounces the previous year, a
reduction of 2%.
Exploration
As was the case in 2001, the main objectives of the underground diamond drilling
programme were the upgrading of the resource status across the mine and the
delineation of new resources in the south section above 41 level and below 50
level across the base of the mine between the Adansi shaft and BSVS. Drilling
below 50 level provided consistently good results across strike and showed that
mineralisation extended down to the deepest levels drilled. Several 20 plus g/t
intersections over mineable widths were made in quartz material down to 66 level
in the vicinity of the Kwesi Mensah Shaft (KMS). Intersections included 10.8 g/t
over 7.5 metres and 24.3 g/t over 2.0 metres on 30 level, 15.0 g/t over 6.5
metres and 17.0 g/t over 4.9 metres on 40 level, 21.2 g/t over 3.1 metres and
65.3 g/t over 8.7 metres at 54 level, 177.5 g/t over 2.1 metres at 56 level and
14.3 g/t over 9.0 metres at 66 level. The down dip extension of the orebody to
at least some 500 metres below 50 level (1,600 metres below surface, currently
the deepest level of the existing mine infrastructure, has been established.
Obuasi Deeps
In the fourth quarter, a review of the in-house scoping study of the Obuasi
deeps was undertaken by external consultants SRK. This included a review of the
mineral resource and reserve potential down to a depth of 3,000 metres, some
1,500 metres below the current base of the mine infrastructure, as well as
alternative production rates, infrastructure options and operating and capital
cost projections.
Iduapriem/Teberebie
Gold production by Iduapriem (80% equity)/Teberebie (90% equity) for 2002 was
185,199 ounces, compared to the previous years 205,130 ounces. The cash
operating costs increased to US$232 per ounce from US$214 per ounce in 2001 due
to the lower gold production.
At 4,393,000 tonnes, the ore mined in 2002 compared with 4,852,000 tonnes the
previous year, whilst the mined grade at 1.66 g/t was higher than the 1.58 g/t
achieved in 2001. The higher grade resulted from mining of the Teberebie ore
blocks. Waste mined was 15,019,000 tonnes, compared to 13,839,000 tonnes in
2001.
Gold production from the Carbon-in-Leach (CIL) plant reduced to 147,726 ounces
from 158,103 ounces in 2001, the reduction largely due to lower throughput and
metallurgical recovery. A fire in the second quarter which extensively damaged
the elution circuit and resulted in the silting up of three leach tanks,
persistent maintenance problems on the mills and pumps and power outages were
the main reasons for the lower throughput and recovery. Mill throughput, feed
grade and recovery in 2002 were 2,625,000 tonnes, 1.96 g/t and 89.3%
respectively compared to 2,731,000 tonnes, 1.92 g/t and 94.6% the previous year.
Metallurgical recovery was affected in the second half of the year when leach
tank capacity, circuit stability and gold in process were affected by the fire
and the commissioning activities on the CIL expansion project.
At the end of the year, the CIL plant expansion, from 2.8 million tonnes per
annum to 4.5 million tonnes per annum was at an advanced stage, with the second
SAG mill and all major equipment installed and in the process of being
commissioned and tied into the existing plant. It is expected that the full
capacity of the expansion will be achieved by the end of the first quarter 2003.
During the year, ore reserves increased from 2.1 million ounces to 2.7 million
ounces following additional drilling and re-engineering of the various pits to
take account of reduced unit costs through expansion of the CIL plant.
Heap leach gold production was 37,473 ounces compared to 47,027 ounces in 2001.
The lower heap leach gold production was due to the reduction in stacked tonnage
following the cessation of crushing and stacking operations at the Iduapriem
heap leach plant in 2001. A total of 1,127,000 tonnes were processed solely at
the Teberebie heap leach plant compared to 2,633,000 tonnes at the combined
facilities in 2001. Metallurgical recovery at 91.3% compares with 61.7% the
previous year reflecting the recovery of gold from ores stacked but not fully
leached at the Iduapriem pads during the previous year.
Bibiani
Bibiani produced 242,432 ounces at a cash operating cost of US$180 per ounce
during 2002 compared to 253,052 ounces at a cash operating cost of US$170 per
ounce the previous year. The reduction in gold production was due to harder ore
resulting in lower plant throughput and lower metallurgical recovery and in turn
this resulted in a higher cash operating cost per ounce produced. Costs were
also impacted by a water shortage in the first quarter.
Milled throughput for the year was 2,566,000 tonnes at a feed grade of 3.72 g/t
compared to 2,769,000 tonnes at 3.46 g/t the previous year. Metallurgical
recovery in 2002 decreased to 79.0% from 83.7% in 2001 due to the mining and
processing of more refractory ore types during the year.
During the year the evaluation of a trackless underground mining operation to
exploit extensions of the open pit resources at depth was completed. The report
concluded that the first phase of extending the mine should be via a ramp access
system developed from within the main pit to enable extraction of delineated
mineral resources within approximately 100 metres of the base of the ultimate
pit and to provide access for exploratory drilling that will target the deeper
levels.
Mining of the Mpasetia deposit, located to the north east of the Bibiani
concession, commenced in the first quarter of 2002 and contract haulage of the
ore to the Bibiani processing plant started during the second quarter of 2002.
Bibiani was awarded a NOSA four star integrated rating and received ISO 14001
accreditation.
Siguiri - Guinea (85% equity)
In 2002, Siguiri produced a total of 269,292 ounces at a cash cost of US$230 per
ounce compared with 283,199 ounces at US$220 per ounce in 2001. Production and
cash costs were impacted by lower than targeted gold production from the stacked
material during the year and higher mined tonnages.
A total of 9,464,000 tonnes of ore and 8,404,000 tonnes of waste were mined
compared to 8,517,000 tonnes and 5,268,000 tonnes respectively in 2001 whilst
the mined grade decreased from 1.34 g/t to 1.19 g/t. The heap leach plant
processed a total of 9,462,000 tonnes at 1.16 g/t compared with 9,064,000 tonnes
at 1.33 g/t the previous year. The plant throughput rates were maintained at 16%
above design capacity and there were no major mechanical problems during the
year.
Metallurgical recovery for the year increased to 76.3% from 73.1% in 2001.
However recovery was affected initially by rainy season solution dilution and
subsequently low leach rates linked to the recommencement of third layer
stacking.
In 2002 we concluded a feasibility study to provide for the processing of
predominantly saprolite (SAP) ores through a Carbon-in-Pulp (CIP) processing
plant. We expect the CIP facility to have a capacity of 9.0 million tonnes per
annum and to produce approximately 300,000 ounces of gold per year. The CIP
plant will consist of a primary crusher followed by a scrubber where the plus 10
mm fraction will be separated and re-directed to the heap leach agglomeration
plant.
Competitive tenders have been requested for the engineering design and
construction management of the project. The expansion is expected to cost
approximately US$32 million (excluding the cost of the new power plant which
will be owned and operated by a third party) and we are planning for it to be
operational by the end of the first quarter of 2004. We plan to fund the capital
costs out of cashflow from Siguiri and through corporate funding. Although we
expect cash operating costs to decrease at Siguiri as a result of this
expansion, the principal advantage of the CIP plant is that we will be able to
treat SAP ores alone.
Once the CIP plant is commissioned, heap leach processing will be reduced to
approximately 15% of the total tonnage processed, this tonnage representing the
coarser and harder fraction of the ore being screened for grinding and CIP
processing. We therefore expect production from the heap leach plant throughput
to reduce to around 1.5 million tonnes per year and gold production to be around
50,000 ounces per year.
Freda-Rebecca - Zimbabwe
Full year production in 2002 was 98,255 ounces at a cash operating cost of
US$214 per ounce compared to 102,654 ounces at US$222 per ounce in 2001.
Underground production for the year of 1,077,000 tonnes at a head grade of 2.99
g/t was 7% lower than the 1,156,000 tonnes at 3.56 g/t achieved in 2001. The
decrease in grade reflects the planned reduction in the mining rate from the
higher-grade Area 7 mining block. Surface mining contributed 110,000 tonnes of
oxide ore grading 2.26 g/t from the Phoenix Prince pit adjacent to the
processing plant.
Processed tonnage for the year was 1,155,000 tonnes at 3.22 g/t compared with
1,121,000 tonnes at 3.30 g/t in 2001. Plant recovery in 2002 was 82.2% compared
to 86.4% the previous year. Processing throughput and recovery were affected by
a series of mechanical problems on the SAG mills and the leach tank agitator
gearboxes during the year . A major plant maintenance programme was also
undertaken. In the fourth quarter mill throughput improved to an annualized rate
of 1,240,000 tonnes but a nationwide shortage of Liquid Petroleum Gas used in
the elution and smelting processes restricted recovery from carbon impacting on
recovery and production. The lower recovery and feed grade accounted for the
decrease in gold production relative to 2001.
The shortage of foreign exchange, fixed exchange rate and high inflation in
Zimbabwe continued to pose problems for the management team particularly in
respect of procurement activities.
Geita (50% J.V.) - Tanzania
Geita mine produced a record total of 579,043 ounces (50% Ashanti) at a cash
operating cost of US$163 per ounce, compared to 545,562 ounces at US$143 per
ounce in 2001. As planned, gold production in the fourth quarter, at 122,742
ounces, was lower than the previous quarters of the year as mining in the
Nyankanga pit moved into lower grade pits. This trend will continue for the
first half of 2003, at which time, higher-grade ores should become available for
extraction.
A total of 5,399,000 tonnes of ore grading 3.52 g/t were mined at a strip ratio
of 7.4:1. This compares to 4,520,000 tonnes at 3.80 g/t and a strip ratio of
6.0:1 the previous year. At the beginning of the year, the mining contractor or
was changed and the annualised ore and waste excavation rate was successfully
ramped up from 2,500,000 tonnes per month to around 4,000,000 tonnes per month
to meet future requirements for the expanded Nyankanga open pit. Production from
the Kukuluma open pit commenced in the second quarter of the year.
In 2002 a total of 4,979,000 tonnes were processed at a grade of 3.92 g/t with a
metallurgical recovery of 92.3% compared to 4,582,000 tonnes at 3.91 g/t and a
recovery of 93.0% in 2001. During the year an upgrade of the crushing and leach
tank sections of the processing plant was completed and following commissioning
in the first quarter of 2003, the capacity of the plant will increase to between
5.5 million tonnes and 6.0 million tonnes per annum.
Exploration
Ashanti's exploration effort continued to focus on and around its existing
mining operations. A total of US$17.6 million was spent on exploration at its
mine sites and greenfields projects and resulted in the generation of an
additional 4.0 million ounces of reserves and 5.4 million ounces of measured and
indicated resources before mining depletion. This includes 100% of Geita's
reserves and resources. This equates to an exploration cost of only US$4.4 per
reserve ounce and US$3.3 per resource ounce. This remains one of the lowest in
the industry and demonstrates Ashanti's reserve upside potential at its mine
sites and its focused, cost effective exploration programmes.
East Africa
Tanzania - At Geita, the exploration objective during 2002 was to convert the
existing large resource base into additional reserves. This was achieved with
reserves increasing by 22% after mining depletion to 9.4 million ounces (70.4
million tonnes grading 4.2 g/t). Over 88,000 metres of drilling was undertaken
during the year, targeting mainly the depth extent of Nyankanga and the gap area
between Geita Hill and Lone Cone. This demonstrated a 5 kilometre long zone of
gold mineralisation from Nyankanga to Geita Hill. Reserves at Geita Hill
increased by 46% to 2.0 million ounces (20.2 million tonnes grading 3.1 g/t) and
by 16% to 5.7 million ounces (33.5 million tonnes grading 5.3 g/t) at Nyankanga.
Infill drilling was also completed at Star and Comet (part of the original
Nyamulilima licence block) during the last quarter. Significant intersections at
Star and Comet included 7 metres grading 8.36 g/t from 76 metres, 6 metres at 10
g/t from 122 metres and 19 metres of 17.3 g/t from 113 metres. Updating of the
Star and Comet Mineral Resource model generated indicated resources of 4.6
million tonnes grading 4.6 g/t, equivalent to 0.7 million ounces of gold.
Preliminary pit optimisation of this resource was undertaken and resulted in 3
million tonnes grading 5.5 g/t within the pit shell.
Elsewhere in Tanzania, Ashanti continued its regional assessment of the Lake
Victoria Goldfields and by year end had been granted the 2,075 square kilometre
Kigosi permit in the south of the Lake Victoria Goldfields.
West Africa
Guinea - Exploration at Siguiri was mainly targeted at locating and defining
additional SAP resources. A new discovery at Bidini, in close proximity to
Eureka Hill and Tubani was made by mid-year with measured and indicated
resources of 322,000 ounces (7.3 million tonnes grading 1.4 g/t) being outlined.
Cote d'Ivoire - Regional geochemical soil anomalies were outlined on the
Korokaha and Bondoukou permits during the first half of the year. However, no
follow up was undertaken as a result of the political/ security situation in the
country.
Mali - A reappraisal of south eastern Mali identified a number of target areas
and by year end, five additional permits had been obtained for ground follow up.
Ghana - Exploration and assessment continued on a number of prospects on and in
the vicinity of the Bibiani, Iduapriem and Obuasi operations.
Central Africa
D.R.Congo - In mid year, Ashanti made plans to commence exploration on its
prospective 8,000 square kilometre Kilo-Moto mining concession in northeastern
Congo. However, during the third quarter, the security situation deteriorated
which delayed the commencement of exploration activities.
Southern Africa
Zimbabwe - Exploration at Freda-Rebecca continued on the optioned RAN claims,
located approximately five kilometers from the Freda-Rebecca processing plant,
as well as on the extensions of the Freda ore bodies up dip and to the west of
previously drilled areas. Feasibility studies on the RAN copper/gold ores are
ongoing and a final decision on the possible exploitation of this deposit will
be made in 2003.
South Africa - During the third quarter, Tameng Mining & Exploration (Pty)
Limited in which Ashanti has a 40% equity interest, was awarded through
competitive bidding, PGM mineral exploration rights on the farm M'phatlele's
Location 457KS in the northeastern limb of the Bushveld Igneous Complex. The
sub-outcrop of the Merensky and UG2 Reefs which are the principal mineralized
horizons for PGM's in the Bushveld Complex, have been mapped on M'phatlele's
Location over a strike length of 8 kilometres.
Summary of production and cash operating costs per ounce
Obuasi Ayanfuri Iduapriem Bibiani
Twelve months to 31 Dec 2002
Production (ounces) 537,219 - 185,199 242,432
Cost per ounce (US$) 198 - 232 180
Twelve months to 31 Dec 2001
Production (ounces) 528,451 11,517 205,130 253,052
Cost per ounce (US$) 192 243 214 170
Freda- Total/
Siguiri Rebecca Geita Average
Twelve months to 31 Dec 2002
Production (ounces) 269,292 98,255 289,522 1,621,919
Cost per ounce (US$) 230 214 163 199
Twelve months to 31 Dec 2001
Production (ounces) 283,199 102,654 272,781 1,656,784
Cost per ounce (US$) 220 222 143 190
Gold Production Summary 2002
4th Quarter 4th Quarter 12 months to 12 months to
2002 2001 31 Dec 2002 31 Dec 2001
Obuasi
Underground Mining
Ore production ('000 tonnes) 596 619 2,423 2,507
Ore grade (g/t) 7.35 8.10 7.48 7.90
Surface Mining
Ore production ('000 tonnes) 176 - 368 -
Ore grade (g/t) 2.69 - 2.71 -
Waste mined ('000 tonnes) 1,029 - 2,165 -
Strip ratio 5.8 - 5.8 -
Sulphide Treatment Plant
Ore processed ('000 tonnes) 594 610 2,352 2,394
Head grade (g/t) 7.70 7.59 7.35 7.53
Recovery (%) 84.9 84.0 84.8 83.5
Gold produced (ounces) 124,830 124,464 471,359 482,982
Pompora Treatment Plant
Ore processed ('000 tonnes) - - - -
Head grade (g/t) - - - -
Recovery (%) - - - -
Gold produced (ounces) - 312 195 2,470
Oxide Treatment Plant
Ore processed ('000 tonnes) 251 - 435 -
Head grade (g/t) 2.11 - 2.06 -
Recovery (%) 82.2 - 81.2 -
Gold produced (ounces) 13,991 - 23,390 -
Tailings Treatment Plant
Ore processed ('000 tonnes) 514 430 1,840 1,666
Head grade (g/t) 2.29 2.32 2.29 2.46
Recovery (%) 31.7 30.2 31.2 32.7
Gold produced (ounces) 12,000 9,647 42,275 42,999
Obuasi Total Processed
Ore processed ('000 tonnes) 1,359 1,040 4,627 4,060
Head grade (g/t) 4.62 5.41 4.84 5.45
Recovery (%) 75.1 74.3 74.8 74.3
Gold produced (ounces) 150,821 134,423 537,219 528,451
Distribution of Obuasi Production
(ounces)
Underground 124,830 124,776 471,554 485,452
Surface 13,991 - 23,390 -
Tailings 12,000 9,647 42,275 42,999
Total 150,821 134,423 537,219 528,451
Ayanfuri
Mining
Ore production ('000 tonnes) - - - 332
Ore grade (g/t) - - - 1.50
Waste mined ('000 tonnes) - - - 1,059
Strip ratio - - - 3.2
Heap Leach
Ore stacked ('000 tonnes) - - - 329
Head grade (g/t) - - - 1.20
Recovery (%) - - - 90.8
Gold produced (ounces) - - - 11,517
Iduapriem
Mining
Ore production ('000 tonnes) 1,054 1,411 4,393 4,852
Ore grade (g/t) 1.76 1.49 1.66 1.58
Waste mined ('000 tonnes) 3,098 3,712 15,019 13,839
Strip ratio 2.9 2.6 3.4 2.9
CIL Plant
Ore processed ('000 tonnes) 660 686 2,625 2,731
Head grade (g/t) 1.98 2.03 1.96 1.92
Recovery (%) 87.5 95.0 89.3 94.6
Gold produced (ounces) 36,781 41,360 147,726 158,103
4th Quarter 4th Quarter 12 months to 12 months to
2002 2001 31 Dec 2002 31 Dec 2001
Iduapriem (continued)
Heap Leach
Ore stacked ('000 tonnes) 427 638 1,127 2,633
Head grade (g/t) 1.18 0.87 1.13 0.91
Recovery (%) 55.3 77.0 91.3 61.7
Gold produced (ounces) 8,962 14,722 37,473 47,027
Total Gold Produced (ounces) 45,743 55,444 185,199 205,130
Bibiani
Mining
Ore production ('000 tonnes) 735 811 2,608 2,560
Ore grade (g/t) 3.40 3.24 3.53 3.58
Waste mined ('000 tonnes) 2,334 3,017 11,054 13,981
Strip ratio 3.2 3.7 4.2 5.5
CIL Plant
Ore processed ('000 tonnes) 675 688 2,566 2,769
Head grade (g/t) 3.64 3.89 3.72 3.46
Recovery (%) 76.2 81.4 79.0 83.7
Gold produced (ounces) 60,215 66,697 242,432 253,052
Siguiri
Mining
Ore production ('000 tonnes) 2,854 2,006 9,464 8,517
Ore grade (g/t) 1.21 1.39 1.19 1.34
Waste mined ('000 tonnes) 2,325 1,737 8,404 5,268
Strip ratio 0.8 0.9 0.9 0.6
Heap Leach
Ore stacked ('000 tonnes) 2,506 2,170 9,462 9,064
Head grade (g/t) 1.19 1.36 1.16 1.33
Recovery (%) 62.7 65.9 76.3 73.1
Gold produced (ounces) 60,133 62,551 269,292 283,199
Freda-Rebecca
Underground Mining
Ore production ('000 tonnes) 244 243 1,077 1,156
Ore grade (g/t) 2.92 3.68 2.99 3.56
Surface Mining
Ore processed ('000 tonnes) - 51 110 56
Ore grade (g/t) - 2.13 2.26 2.10
Processing
Ore processed ('000 tonnes) 311 277 1,155 1,121
Head grade (g/t) 2.87 2.89 3.22 3.30
Recovery (%) 80.8 81.6 82.2 86.4
Gold produced (ounces) 23,190 21,060 98,255 102,654
Geita
Mining
Ore production ('000 tonnes) 1,093 1,399 5,399 4,520
Ore grade (g/t) 3.20 3.74 3.52 3.80
Waste mined ('000 tonnes) 12,226 7,194 39,729 27,215
Strip ratio 11.2 5.1 7.4 6.0
CIL Plant
Ore processed ('000 tonnes) 1,261 1,193 4,979 4,582
Head grade (g/t) 3.36 3.89 3.92 3.91
Recovery (%) 90.1 93.0 92.3 93.0
Gold produced (ounces) 122,742 138,085 579,043 545,562
Ashanti's share (ounces) 61,371 69,043 289,522 272,781
Group Summary (ounces)
Managed gold production 340,102 340,174 1,332,397 1,384,003
Geita JV 50% (ounces) 61,371 69,043 289,522 272,781
Total gold production 401,473 409,217 1,621,919 1,656,784
Less minority interests 15,881 17,699 68,174 73,249
Total Attributable (ounces) 385,592 391,518 1,553,745 1,583,535
Financial Review
Summary
* Earnings before exceptional items of US$79.7 million - up 33% as compared
to last year
* Balance sheet strengthened by refinancing of debt -completed both on
better terms than previously announced and ahead of schedule
* Rights of hedge counterparties to call for margin cancelled
* Ashanti's hedge book simplified further; hedging commitments and exposure
to floating lease rates reduced
* Group gross debt level reduced by US$69.0 million.
Earnings
Ashanti's 2002 earnings before exceptional items were 33% higher at
US$79.7million (2001: US$59.9million). The improvement in earnings as compared
to last year was principally due to higher spot prices, lower interest charges
and tax credits. Earnings per share before exceptional items for the year, after
taking into account the warrants that were exercised as part of the refinancing,
were US$0.67 (2001:US$0.53).
Earnings after charging exceptional refinancing and restructuring costs of
US$23.5 million (2001: nil) were US$56.2 million (2001: US$59.9 million).
Revenue
Higher spot prices enabled Ashanti to achieve total revenue of US$552.2 million
(2001: US$554.4 million) despite lower production and the anticipated fall in
the release of deferred hedging income. The average gold price realised during
the year was higher at US$340 per ounce (2001:US$335 per ounce).
Spot revenue amounted to US$506.4 million (2001: US$455.8 million). Hedging
income was lower at US$45.8 million (2001: US$98.6 million) due both to higher
spot prices and a reduction in deferred hedging income released. Cash generated
during 2002 from close-outs of maturing hedge contracts amounted to US$11.5
million (2001: US$41.6 million) and US$34.3 million (2001: US$57.0 million) was
released from previously closed-out hedging contracts (deferred hedging income).
As at 31 December 2002 the deferred hedging income balance stood at US$27.8
million, of which US$14.7million and US$13.1million will be credited to the
profit and loss account during 2003 and 2004 respectively.
Hedging
As at 31 December 2002, Ashanti's hedge book had 5.0 million ounces of
protection at an average price of US$358 per ounce and 6.5 million ounces of
commitments at an average price of US$346 per ounce. Lease rate notional ounces
stood at 2.75 million ounces with a maximum of 2.58 million ounces floating at
any one time. As at 31December 2002, Ashanti had 48% of its forecast production
over the life of the hedge book committed and 37% protected (excluding
production for Geita for the 2003-2007 period of the project financing.
As at 31 December 2002, Ashanti's hedge book had a negative mark-to-market value
of US$150.0 million based on a spot price of US$345 per ounce (2001: US$88.8
million positive based on a spot price of US$277 per ounce). The decrease in the
mark-to-market value was primarily due to high spot prices partially offset by
lower US interest rates. As at 31 December 2002, Ashanti's share of the Geita
hedge book was mark-to-market negative at US$44.3 million (2001: US$2.4 million
negative). Neither the Ashanti nor the Geita hedge book is subject to margin
calls.
During the year the principal restructurings of the hedge book included:
* The conversion of all convertible structures into vanilla options
resulting in a simpler structure and additional protection of 128,000 ounces
at a strike price of US$350 per ounce
* 150,000 ounces of sold puts with strikes at US$270 per ounce were removed
from the hedge book
* Exposure to floating lease rates was reduced from a total of 5.0 million
ounces to 2.6 million ounces.
There has been a significant reduction in commitments over the year, through
maturing deals and the acceleration of the commitment profile. Ashanti's
protection level however has remained broadly intact. The table below shows
changes in the Ashanti hedge book's protection, commitments and floating lease
rate exposure during the year:
31 December 31 December Reduction
2001 2002 achieved
oz m oz m oz m
Protection 5.1 5.0 0.1
(Average (Average price:
price:
US$362/oz) US$358/oz)
Commitments 7.5 6.5 1.0
(Average (Average price:
price:
US$347/oz) US$346/oz)
Lease rates 5.0 2.6 2.4
Mark-to-market US$88.8m US$150.0m
Positive Negative
Spot price US$277/oz US$345/oz
Details of the Ashanti and Geita hedge portfolios are set out below.
Cash Operating Costs
Cash operating costs were US$199 per ounce, US$9 per ounce higher than US$190
per ounce recorded in 2001 due to the challenging operating environment outlined
in the Operations Review.
As indicated in the Chief Executive's Review we anticipate our 2003 cost
performance to be challenged by rising costs of certain inputs including fuel,
power, wages and reagents.
Exploration and Corporate Administration
Exploration expenditure expensed during the year was lower at US$3.8 million
(2001: US$6.5 million) due to the termination of Ashanti's involvement in Pangea
Goldfield's concession in Tanzania. Corporate administration expenditure for the
year was also lower at US$16.5 million (2001: US$21.1 million).
The Group's exploration and corporate administration budgets for 2003 are
estimated at approximately US$6.0 million and US$20.0 million respectively and
includes projects to improve efficiency at the Group's operations and additional
exploration expenditure in respect of the Democratic Republic of Congo and South
Africa.
Depreciation
Total depreciation and amortisation charges amounted to US$88.4million, and
lower than the US$94.9million recorded in 2001 primarily due to lower
production.
Total Costs
Total costs before exceptional items, but including depreciation and
amortisation, amounted to US$457.7 million (2001: US$457.6 million). Total costs
per ounce increased by US$16 per ounce, from US$276 per ounce in 2001 to US$282
per ounce in 2002 mainly due to the increase in cash operating costs referred to
above.
Other Income
Other income of US$3.3 million relates to additional consideration received in
respect of the sale, in 1999, of Ashanti's interest in the Golden Pride mine.
This consideration crystallised in 2002 following the gold price rally. No
further consideration is due under the terms of the sale agreement.
Exceptional Items
Exceptional items, which have been identified separately in the profit and loss
account, comprised the following:
* Refinancing and restructuring costs of US$23.5 million. These include
professional fees and financing costs for both the proposed note
restructuring, which was later withdrawn, and the cash redemption
alternative outlined below, which was implemented in June 2002.
* As provided for in the sale and purchase agreement entered into in 2000 in
respect of the Geita mine, AngloGold transferred the Ridge8 property to
Geita during the year. The consideration of US$17.6 million will be left
outstanding until the project finance loans are fully repaid by Geita.
AngloGold has transferred to Ashanti for no consideration, its 50% share
which resulted in an exceptional gain of US$8.8 million. In line with
Ashanti's accounting policy on exploration costs the cost of this property
has been expensed, thereby recording a compensating exceptional loss of
US$8.8 million.
Financing Costs
Total interest charges fell by 23% from US$29.4million in 2001 to US$22.6
million due to reduced debt levels and lower borrowing costs.
Taxation
During 2002, Ashanti implemented Financial Reporting Standard 19 - Deferred Tax
("FRS 19"). Previously deferred tax was to be provided only to the extent that a
liability was expected to crystallise. Adoption of FRS 19, which requires
deferred tax to be provided for on a full provision basis, resulted in a prior
period adjustment. The deferred tax liability of US$1.9 million at 31December
2001 has been restated to a deferred tax asset of US$6.9 million. The
comparative results and balances have been restated in the 2002 annual accounts,
giving rise to an increase in the tax charge of US$2.8 million in 2001.
Taxation for the year was a credit of US$3.7million. This comprised a tax charge
for the Group of US$3.0 million and a tax credit of US$6.7 million in respect of
the Geita joint venture.
Dividends
The Group continues to strengthen its financial position. However, both the
Group and the Company have significant negative profit and loss account reserves
at 31 December 2002.
The Ghana Companies Code, 1963, prohibits the payment of dividends where there
are no positive balances in distributable reserves. In the light of the above,
no dividend is proposed for 2002. Management will continue to explore ways of
restoring the dividend paying ability of the Group.
Cash Flow
Higher spot prices contributed to the increased net cash inflow from operating
activities before exceptional items of US$117.5million (2001: US$95.4million).
The net cash inflow from operating activities after meeting refinancing and
restructuring costs of US$22.3million was US$95.2 million.
Net interest paid was US$18.8 million (2001: US$22.4 million) and capital
expenditure was US$64.5 million (2001:US$49.6 million).
Capital Expenditure
Ashanti's capital investment in its operations increased from US$49.6 million in
2001 to US$64.5 million in 2002. The additional investment in 2002 focused on:
* CIL plant expansion at Iduapriem and Teberebie to increase processing
capacity from 2.8million tonnes per annum to 4.5 million tonnes per annum
* Mining and processing equipment, and upgrade of shafts at the Obuasi mine
* Mining equipment, plant and tailings dam at the Freda-Rebecca mine.
As indicated in the Operations Review, Ashanti's capital expenditure for 2003 is
expected to be higher due to the planned construction of a Carbon-in-pulp plant
at the Siguiri mine (estimated cost - US$32.0 million) and the first phase of
the proposed underground development at the Bibiani mine (estimated cost -
US$7.0 million).
Refinancing and Debt Levels
During 2002, Ashanti successfully overcame its two major financial challenges
of:
* refinancing its then outstanding revolving credit facility and the 5 1/2%
guaranteed exchangeable notes due 2003, and
* extending, on an ongoing basis, margin free trading arrangements on its
hedge book.
On 28 June 2002, Ashanti announced that it had withdrawn the proposed
restructuring of its exchangeable notes and that it had effected a refinancing
of the then outstanding revolving credit facility and the early redemption of
the exchangeable notes using the proceeds arising from the Cash Redemption
Alternative, which consisted of:
* an enlarged US$200 million, five year revolving credit facility;
* the early exercise of warrants amounting to approximately US$41.8 million;
and
* the issue of US$75.0 million mandatorily exchangeable notes, (MENs), which
were issued at par and for cash.
The above proceeds were used to effect an early redemption of US$219 million of
the exchangeable notes, retire US$48 million of the then outstanding revolving
credit facility and meet refinancing costs, with the balance being used to fund
ongoing operations. In addition, Ashanti announced that, following completion of
the Cash Redemption Alternative, it intends to undertake a rights issue by
December 2003. The US$75 million of MENs will convert into equity on completion
of a rights issue by Ashanti. Any funds raised from the Rights Issue, which is
not part of the Cash Redemption Alternative, will be available as additional
working capital for the Ashanti Group.
As part of this refinancing, the rights of hedge counterparties to call for
margin were cancelled, thereby providing Ashanti with ongoing margin free
trading on its hedge book.
During the year, the Group's gross debt level was reduced by US$69.0 million,
from US$325.9 million to US$256.9million. The Group's gross debt analysis as at
31 December 2002, excluding the 50% share of the non-recourse Geita project
finance loan, was as follows:
US$
million
US$200 million Revolving Credit Facility
("RCF") 149.0
Iduapriem/Teberebie project finance loans 23.4
Other loans and overdrafts 14.0
Less: deferred loan fees (4.5)
181.9
Mandatorily Exchangeable Notes ("MENs") 75.0
Ashanti Group's gross debt as at
31 December 2002 256.9
The Group's net debt level as at 31 December 2002 was also lower at US$215.6
million (2001: US$270.7 million).
As at 31 December 2002, Ashanti had headroom of US$51.0 million under its US$200
million Revolving Credit Facility.
Other Matters
Ashanti has been informed by the US Securities and Exchange Commission that it
has no further comments on its Forms 20-F for the years ended 31 December 2000
and 2001.
Group Profit and Loss Account
For the year ended 31 December
2002
Group
Before After Interest
exceptional Exceptional exceptional in joint
items items items venture
Note US$m US$m US$m US$m
Turnover 2 467.5 - 467.5 84.7
Cash operating costs 3 (275.9) - (275.9) (47.2)
Other costs 3 (26.8) - (26.8) (4.8)
Royalties 3 (11.9) - (11.9) (2.7)
Depreciation and amortisation 3 (75.1) - (75.1) (13.3)
Exceptional cost 5 - (23.5) (23.5) (8.8)
Total costs 4 (389.7) (23.5) (413.2) (76.8)
Other income 5 3.3 8.8 12.1 -
Operating profit/(loss) 81.1 (14.7) 66.4 7.9
Share of operating profit of
joint venture 16.7 (8.8) 7.9
Total operating profit/(loss) 3 97.8 (23.5) 74.3
Net interest payable: group (17.5) - (17.5)
Net interest payable: joint (5.1) - (5.1)
venture
Profit before taxation 75.2 (23.5) 51.7
Taxation: group (3.0) - (3.0)
Taxation joint venture 6.7 - 6.7
Profit after taxation 78.9 (23.5) 55.4
Minority interests 0.8 - 0.8
Profit attributable to 79.7 (23.5) 56.2
shareholders
Dividends - - -
Retained profit for the period 79.7 (23.5) 56.2
Earnings per share (US$) 7 0.67 (0.20) 0.47
2001
Interest
Group in joint
Total Restated* venture Total
Note US$m US$m US$m US$m
Turnover 2 552.2 477.7 76.7 554.4
Cash operating costs 3 (323.1) (276.3) (38.9) (315.2)
Other costs 3 (31.6) (31.7) (2.8) (34.5)
Royalties 3 (14.6) (10.8) (2.2) (13.0)
Depreciation and amortisation 3 (88.4) (82.3) (12.6) (94.9)
Exceptional cost 5 (8.8) (32.3) - -
Total costs (490.0) (401.1) (56.5) (457.6)
Other income 5 12.1 - - -
Operating profit/(loss) 74.3 76.6 20.2 96.8
Share of operating profit of
joint venture 20.2
Total operating profit/(loss) 3 96.8
Net interest payable: group (21.6)
Net interest payable: joint (7.8)
venture
Profit before taxation 67.4
Taxation: group (9.6)
Taxation: joint venture -
Profit after taxation 57.8
Minority interests 2.1
Profit attributable to 59.9
shareholders
Dividends -
Retained profit for the period 59.9
Earnings per share (US$) 7 0.53
*The Group profit and loss account for the year ended 31 December 2001 has been
restated for the adoption of FRS 19 - Deferred Tax.
Group Balance Sheet
As at 31 December
2002
Interest
in joint
Group venture Total
US$m US$m US$m
Fixed assets
Intangible assets 17.3 54.8 72.1
Tangible assets 602.7 103.5 706.2
Investments
Investments - Geita joint venture 91.2 (91.2) -
Investments - Loans to joint venture and other
investments 32.6 - 32.6
743.8 810.9
Current assets
Stocks 76.6 11.2 87.8
Debtors due within one year 14.0 21.2 35.2
Debtors due after more than one year 8.8 - 8.8
Cash 41.3 14.4 55.7
140.7 46.8 187.5
Creditors: amounts falling after more than one year
Creditors (131.1) (19.7) (150.8)
Borrowings (2.7) (10.8) (13.5)
(133.8) (30.5) (164.3)
Net current assets/(liabilities) 6.9 16.3 23.2
Total assets less current liabilities 750.7 834.1
Creditors: amounts falling due after more than one year
Creditors (24.0) (39.9) (63.9)
Borrowings (254.2) (40.6) (294.8)
Provisions for liabilities and charges (25.0) (2.9) (27.9)
447.5 447.5
Capital and reserves
Stated capital 588.2
Reserves (141.9)
Equity shareholders' funds 446.3
Equity minority interests 1.2
447.5
2001
Interest
Group in joint
Restated* venture Total
US$m US$m US$m
Fixed Assets
Intangible assets 18.8 59.2 78.0
Tangible assets 612.9 103.4 716.3
Investments
Investments - Geita joint venture 81.7 (81.7) -
Investments - Loans to joint venture and other
investments 32.6 - 32.6
746.0 826.9
Current assets
Stocks 73.5 8.8 82.3
Debtors due within one year 23.0 9.6 32.6
Debtors due after more than one year - - -
Cash 55.2 9.2 64.4
151.7 27.6 179.3
Creditors: amounts falling due within one year
Creditors (155.0) (13.1) (168.1)
Borrowings (25.3) (10.8) (36.1)
(180.3) (23.9) (204.2)
Net current assets/(liabilities) (28.6) 3.7 (24.9)
Total assets less current liabilities 717.4 802.0
Creditors: amounts falling due over one year
Creditors (49.8) (31.1) (80.9)
Borrowings (300.6) (51.3) (351.9)
Provisions for liabilities and charges (17.9) (2.2) (20.1)
349.1 349.1
Capital and reserves
Stated capital 545.2
Reserves (198.1)
Equity shareholders' funds 347.1
Equity minority interests 2.0
349.1
*The Group balance sheet as at 31 December 2001 has been restated for the
adoption of FRS 19 - Deferred Tax.
Group Cash Flow Statement
For the year ended 31 December
2002 2001
US$m US$m
Cash inflow from operating activities 95.2 95.4
Returns on investments and servicing of finance
Interest received 0.8 2.0
Interest paid (19.6) (24.4)
Net cash outflow from returns on investments and
servicing of finance (18.8) (22.4)
Taxation
Tax paid (2.0) (2.9)
Capital expenditure and financial investment
Purchase of tangible fixed assets (64.5) (49.6)
Net cash outflow from capital expenditure and financial (64.5) (49.6)
investment
Cash inflow before use of liquid resources and 9.9 20.5
financing
Management of liquid resources 6.0 9.7
Cash inflow before financing 15.9 30.2
Financing
Issue of ordinary shares 41.8 -
Decrease in debt (61.0) (40.6)
Net cash outflow from financing (19.2) (40.6)
Decrease in cash (3.3) (10.4)
Reconciliation of net cash flow to movement in net debt
Decrease in cash (3.3) (10.4)
Decrease in liquid resources (6.0) (9.7)
(9.3) (20.1)
Cash outflow from decrease in debt 61.0 40.6
Other 3.4 0.9
Movement in net debt 55.1 21.4
Net debt at 1 January (270.7) (292.1)
Net debt at 31 December (215.6) (270.7)
Group Profit and Loss Account
For the 3 months to 31 December
2002
Interest
in joint
Group venture Total
Note US$m US$m US$m
Turnover 6 123.8 17.7 141.5
Cash operating costs 6 (74.3) (12.4) (86.7)
Other costs 6 (4.4) (2.4) (6.8)
Royalties 6 (3.2) (0.6) (3.8)
Depreciation and amortisation 6 (21.0) (3.4) (24.4)
Total costs (102.9) (18.8) (121.7)
Other income 1.1 - 1.1
Operating profit/(loss) 6 22.0 (1.1) 20.9
Share of operating (loss)/profit of joint (1.1)
venture
Total operating profit 20.9
Net interest payable: group (3.4)
Net interest payable: joint venture (1.5)
Profit before taxation 16.0
Taxation: group (3.0)
Taxation: joint venture 6.7
Profit after taxation 19.7
Minority interests 1.2
Profit attributable to shareholders 20.9
Dividends -
Retained profit for the period 20.9
Earnings per share (US$) 0.18
2001
Interest
Group in joint
Restated* venture Total
Note US$m US$m US$m
Turnover 6 128.9 19.9 148.8
Cash operating costs 6 (69.9) (10.5) (80.4)
Other costs 6 (12.4) (2.8) (15.2)
Royalties 6 (2.9) (0.5) (3.4)
Depreciation and amortisation 6 (14.8) (3.5) (18.3)
Total costs (100.0) (17.3) (117.3)
Other income - - -
Operating profit/(loss) 6 28.9 2.6 31.5
Share of operating (loss)/profit of joint 2.6
venture
Total operating profit/(loss) 31.5
Net interest payable: group (4.5)
Net interest payable: joint venture (1.4)
Profit before taxation 25.6
Taxation: group (5.4)
Taxation: joint venture -
Profit after taxation 20.2
Minority interests 2.1
Profit attributable to shareholders 22.3
Dividends -
Retained profit for the period 22.3
Earnings per share (US$) 0.20
*The Group profit and loss account for the three months ended 31 December 2001
has been restated for the adoption of FRS 19 - Deferred Tax.
Group Cashflow Statement
For the 3 months to 31 December
2002 2001
US$m US$m
Cash inflow from operating activities 37.0 28.8
Returns on investments and servicing of finance
Interest received 0.3 -
Interest paid (1.6) (3.0)
Net cash outflow from returns on investments and service of finance (1.3) (3.0)
Taxation
Tax paid (0.3) (0.1)
Capital expenditure and financial investment
Purchase of tangible fixed assets (18.4) (14.6)
Net cash outflow from capital expenditure and financial investment (18.4) (14.6)
Cash inflow before use of liquid resources and financing 17.0 11.1
Management of liquid resources (7.4) 9.7
Cash inflow before financing 9.6 20.8
Financing
Decrease in debt (9.0) (9.0)
Net cash outflow from financing (9.0) (9.0)
Increase in cash 0.6 11.8
Reconciliation of net cash flow to movement in net debt
Increase in cash 0.6 11.8
Increase/(decrease) in liquid resources 7.4 (9.7)
8.0 2.1
Cash outflow from decrease in debt 9.0 9.0
Other (0.3) 1.6
Movement in net debt 16.7 12.7
Net debt at 1 October (232.3) (283.4)
Net debt at 31 December (215.6) (270.7)
Notes
1 Basis of Preparation
The unaudited results for the year ended 31 December 2002 have been prepared in
accordance with the accounting policies used in preparing the financial
statements and are consistent with those used by the Group in its financial
statements for the year ended 31 December 2001 except for deferred tax following
the implementation of FRS 19 "Deferred Tax''.
2 Turnover
2002 2001
US$m US$m
Bullion revenue 416.3 381.7
Cash realised on maturing hedging contracts 16.9 39.0
Deferred hedging income 34.3 57.0
467.5 477.7
Share of turnover of joint venture 84.7 76.7
552.2 554.4
3 Operating profit analysis by business area before exceptional items
12 months to 31 December 2002
Obuasi Iduapriem Bibiani Siguiri
Production ozs 537,219 185,199 242,432 269,292
Revenue - spot 167.8 57.8 76.1 83.9
Revenue - hedging - - - -
167.8 57.8 76.1 83.9
Cash operating costs (106.4) (43.0) (43.6) (61.9)
Other costs (0.5) (0.9) (0.3) (4.8)
Royalties (5.0) (1.7) (2.3) (2.9)
Other income - - - -
EBITDA 55.9 12.2 29.9 14.3
Depreciation and amortisation (33.0) (7.6) (11.7) (17.7)
Operating profit/(loss)
2002 22.9 4.6 18.2 (3.4)
2001 (1.0) 4.4 7.5 (6.8)
Freda- Hedging Explor- Corp.
Rebecca Income ation Admin.
Production ozs 98,255 - - -
Revenue - spot 30.7 - - -
Revenue - hedging - 51.2 - -
30.7 51.2 - -
Cash operating costs (21.0) - - -
Other costs - - (3.8) (16.5)
Royalties - - - -
Other income - - - 3.3
EBITDA 9.7 51.2 (3.8) (13.2)
Depreciation and amortisation (3.7) - (0.1) (1.3)
Operating profit/(loss)
2002 6.0 51.2 (3.9) (14.5)
2001 7.3 96.0 (8.4) (22.4)
Geita
Group (50%) Total
Production ozs 1,332,397 289,522 1,621,919
Revenue - spot 416.3 90.1 506.4
Revenue - hedging 51.2 (5.4) 45.8
467.5 84.7 552.2
Cash operating costs (275.9) (47.2) (323.1)
Other costs (26.8) (4.8) (31.6)
Royalties (11.9) (2.7) (14.6)
Other income 3.3 - 3.3
EBITDA 156.2 30.0 186.2
Depreciation and amortisation (75.1) (13.3) (88.4)
Operating profit/(loss)
2002 81.1 16.7 97.8
2001 76.6 20.2 96.8
4 Reconciliation of total costs
12 months to 31 December
2002 2001
US$m US$m
Cash operating costs
Obuasi 106.4 101.4
Iduapriem 43.0 44.0
Bibiani 43.6 43.1
Ayanfuri - 2.8
Siguiri 61.9 62.2
Freda-Rebecca 21.0 22.8
Geita 47.2 38.9
Total cash operating costs 323.1 315.2
Corporate administration costs 16.5 21.2
Exploration costs 3.8 6.5
Other 11.3 6.8
Total operating costs 354.7 349.7
Royalties 14.6 13.0
Depreciation and amortisation 88.4 94.9
Exceptional costs 32.3 -
Total costs 490.0 457.6
5 Exceptional items
2002 2001
US$m US$m
Refinancing and restructuring costs (note a.) (23.5) -
Share of operating loss of joint venture (note (8.8) -
b.)
Other income (note b.) 8.8 -
(23.5) -
a. Costs incurred in refinacing the Group's debt during 2002.
b. As provided for in the sale and purchase agreement entered into in 2000 in respect of the Geita mine, AngloGold
transferred the neighbouring Ridge 8 property to Geita during the year. The consideration of US$17.6million will
be left outstanding until the project finance loans are fully repaid by Geita. AngloGold has transferred to
Ashanti for no consideration, its 50% share of the receivable which resulted in an exceptional gain of
US$8.8million. In line with Ashanti's accounting policy on exploration costs the cost of this property has been
expensed, thereby recording an exceptional loss of US$8.8 million.
6 Operating profit analysis by business area before exceptional items
3 months to 31 December 2002
Obuasi Iduapriem Bibiani Siguiri
Production ozs 150,821 45,743 60,215 60,133
Revenue - spot 49.3 14.9 19.9 19.6
Revenue - hedging - - - -
49.3 14.9 19.9 19.6
Cash operating costs (28.7) (13.9) (9.5) (17.7)
Other costs (0.5) (0.2) - (1.5)
Royalties (1.5) (0.4) (0.6) (0.7)
Other income - - - -
EBITDA 18.6 0.4 9.8 (0.3)
Depreciation andamortisation (6.1) (4.8) (2.4) (4.6)
Operating profit/(loss)
2002 12.5 (4.4) 7.4 (4.9)
2001 1.7 1.5 1.5 (1.4)
Freda- Hedging Explor- Corp.
Rebecca Income ation Admin.
Production ozs 23,190 - - -
Revenue - spot 7.5 - - -
Revenue - hedging - 12.6 - -
7.5 12.6 - -
Cash operating costs (4.5) - - -
Other costs - - (0.4) (1.8)
Royalties - - - -
Other income - - - 1.1
EBITDA 3.0 12.6 (0.4) (0.7)
Depreciation andamortisation (2.7) - (0.1) (0.3)
Operating profit/(loss)
2002 0.3 12.6 (0.5) (1.0)
2001 3.2 32.9 (4.0) (6.5)
Geita
Group (50%) Total
Production ozs 340,102 61,371 401,473
Revenue - spot 111.2 19.8 131.0
Revenue - hedging 12.6 (2.1) 10.5
123.8 17.7 141.5
Cash operating costs (74.3) (12.4) (86.7)
Other costs (4.4) (2.4) (6.8)
Royalties (3.2) (0.6) (3.8)
Other income 1.1 - 1.1
EBITDA 43.0 2.3 45.3
Depreciation andamortisation (21.0) (3.4) (24.4)
Operating profit/(loss)
2002 22.0 (1.1) 20.9
2001 28.9 2.6 31.5
7 Earnings per share
The calculation of earnings per share is based on earnings after tax and
minority interests and the weighted average number of shares outstanding during
the year of 119.1 million (2001: 112.1 million). Earnings per share has been
shown before and after exceptional items in order to show the impact of the
exceptional items on the underlying results of the business.
8 Ore Reserves and Mineral Resources
Measured and Indicated Mineral Resources as at 31 December 2002
Measured Indicated
Tonnes Grade Tonnes Grade
Location (million) (g/t) (million) (g/t)
Obuasi
Underground 22.1 11.1 35.9 9.6
Surface 17.8 3.0 1.4 2.8
Tailings 14.5 2.0 5.0 2.2
Sub Total 54.4 6.0 42.3 8.5
Other Locations
Iduapriem (80%)/Teberebie (90%) 48.4 1.6 33.4 1.6
Bibiani underground - - 2.2 5.4
Bibiani surface 1.9 1.8 4.2 3.1
Bibiani tailings 4.4 1.1 0.4 0.9
Siguiri (85%) 26.7 1.1 56.0 1.2
Freda-Rebecca 12.4 2.5 3.8 2.4
Geita (50%) 40.3 3.5 68.0 4.3
Youga (45%) - - 7.4 3.0
Sub Total 134.1 2.2 175.4 2.6
Total 188.5 3.3 217.7 3.8
2001 Total 204.3 3.2 197.9 3.6
Total Gold Equity
Tonnes Grade Ounces Ounces
Location (million) (g/t) (million) (million)
Obuasi
Underground 58.0 10.2 19.0 19.0
Surface 19.2 3.0 1.9 1.9
Tailings 19.5 2.0 1.2 1.2
Sub Total 96.7 7.1 22.1 22.1
Other Locations
Iduapriem (80%)/Teberebie (90%) 81.8 1.6 4.2 3.4
Bibiani underground 2.2 5.4 0.4 0.4
Bibiani surface 6.1 2.7 0.5 0.5
Bibiani tailings 4.8 1.1 0.2 0.2
Siguiri (85%) 82.7 1.2 3.1 2.6
Freda-Rebecca 16.2 2.5 1.3 1.3
Geita (50%) 108.3 4.0 13.9 7.0
Youga (45%) 7.4 3.0 0.7 0.3
Sub Total 309.5 2.4 24.3 15.7
Total 406.2 3.6 46.4 37.8
2001 Total 402.2 3.4 44.0 36.6
Proved and Probable Ore Reserves as at 31 December 2002
Proven Probable
Tonnes Grade Tonnes Grade
Location (million) (g/t) (million) (g/t)
Obuasi
Underground 4.6 7.4 35.9 8.1
Surface 0.9 6.1 - -
Tailings 14.5 2.0 4.9 2.2
Sub Total 20.0 3.4 40.8 7.4
Other Locations
Iduapriem (80%)/Teberebie (90%) 35.1 1.7 13.9 1.7
Bibiani underground - - 1.2 4.6
Bibiani surface 1.9 1.8 3.5 3.3
Bibiani tailings 4.4 1.1 0.4 1.0
Siguiri (85%) 19.1 1.2 36.3 1.2
Freda-Rebecca 3.8 2.5 1.0 2.5
Geita (50%) 30.8 3.7 39.6 4.6
Youga (45%) - - 4.8 3.3
Sub Total 95.1 2.3 100.7 2.8
Total 115.1 2.4 141.5 4.1
2001 Total 121.4 2.5 123.2 4.2
Total Gold Equity
Tonnes Grade Ounces Ounces
Location (million) (g/t) (million) (million)
Obuasi
Underground 40.5 8.0 10.4 10.4
Surface 0.9 6.1 0.2 0.2
Tailings 19.4 2.0 1.3 1.3
Sub Total 60.8 6.1 11.9 11.9
Other Locations
Iduapriem (80%)/Teberebie (90%) 49.0 1.7 2.7 2.1
Bibiani underground 1.2 4.6 0.2 0.2
Bibiani surface 5.4 2.8 0.5 0.5
Bibiani tailings 4.8 1.1 0.1 0.1
Siguiri (85%) 55.4 1.2 2.1 1.8
Freda-Rebecca 4.8 2.5 0.4 0.4
Geita (50%) 70.4 4.2 9.4 4.7
Youga (45%) 4.8 3.3 0.5 0.2
Sub Total 195.8 2.5 15.9 10.1
Total 256.6 3.4 27.8 22.0
2001 Total 244.6 3.3 26.1 21.3
Reconciliation for the year ending 31 December 2002
Measured and Indicated Mineral Resources
(Ounces million)
Net
Opening (Depletion)/ Closing
Location 31 Dec 2001 Additions 31 Dec 2002
Obuasi 21.9 0.2 22.1
Iduapriem (80%)/Teberebie (90%) 5.0 (0.8) 4.2
Bibiani 1.0 0.1 1.1
Siguiri (85%) 3.1 - 3.1
Freda-Rebecca 1.2 0.1 1.3
Geita (50%) 11.1 2.8 13.9
Youga (45%) 0.7 - 0.7
Total 44.0 2.4 46.4
Proved and Probable Ore Reserves
(Ounces million)
Net
Opening (Depletion)/ Closing
Location 31 Dec 2001 Additions 31 Dec 2002
Obuasi 12.4 (0.5) 11.9
Iduapriem (80%)/Teberebie (90%) 2.1 0.6 2.7
Bibiani 0.9 (0.1) 0.8
Siguiri (85%) 2.1 - 2.1
Freda-Rebecca 0.4 - 0.4
Geita (50%) 7.7 1.7 9.4
Youga (45%) 0.5 - 0.5
Total 26.1 1.7 27.8
Notes on the Ore Reserves and Mineral Resources Statement
1. This Ore Reserve and Mineral Resource statement is classified according to
the Australasian Code for the Reporting of Identified Mineral Resources and Ore
Reserves issued by the Joint Committee for the Australasian Institute of
Geoscientists and the Australian Mining Industry Council (JORC).
2. All Identified Mineral Resources are reported as in situ or contained
resources utilising JORC guidelines and are inclusive of the stated Ore Reserve.
3. The Proved and Probable Ore Reserves contained within the Identified Mineral
Resources has been estimated using guidelines of the JORC code and are reported
as recoverable ore reserves to which appropriate factors have been applied to
allow for mining loss and dilution.
4. For economic studies and the determination of cut-off grades, a gold price of
US$300 per ounce was assumed.
5. At a gold price of US$275 per ounce, it is estimated that the ore reserves
will decrease by approximately 5 per cent and at a gold price of US$325 per
ounce, it is estimated that the ore reserves will increase by approximately 2
per cent.
6. The Ore Reserves and Identified Mineral Resources reported represent 100 per
cent of the Ore Reserves and Mineral Resources at the respective properties and
no allowance has been made for joint venture or minority interests. Ashanti's
percentage interest is shown inbrackets for properties where Ashanti has less
than 100 per cent ownership and the corresponding entity ounces are disclosed
accordingly.
7. The competent persons who have overseen the estimation of the Ore Reserves
and Identified Mineral Resources are listed as follows:
Mine Resources Reserves
Obuasi J Amanor J Chamberland
Iduapriem/Tebererie K Osei SNdede
Bibiani C de Vente C de Vente/JSeaward
Siguiri A Pardey A Pardey
Freda-Rebecca S Hlabangana G Chitumbura
Geita R Adofo/J Hill D Purdey
Youga D Bansah T Obiri-Yeboah
8. Identified Inferred Resources are not reported in the statement.
9. Data may not compute exactly due to rounding.
9 Hedging
The following table sets out Ashanti's hedge portfolio as at 31 December 2002.
2003 2004 2005 2006
Forward Sales (ounces) 899,392 529,992 520,996 410,000
Forward Sales (US$/ounce) 344 352 347 355
Puts:
Bought (ounces) 50,000 111,200 111,200 111,200
Bought (US$/ounce) 354 370 370 370
Calls:
Sold (ounces) 640,692 628,972 425,528 312,056
Sold (US$/ounce) 337 339 344 376
Bought (ounces) 240,000 280,000 60,000 172,996
Bought (US$/ounce) 429 444 380 418
Subtotal (ounces) 400,692 348,972 365,528 139,060
Lease Rate Swap ounces due 430 - - -
(ounces)
Summary:
Protected (ounces) 948,962 641,192 632,196 521,200
Committed (ounces) 1,299,654 878,964 886,524 549,060
Lease Rate Swap (ounces) 2,367,000 2,587,000 2,251,000 1,915,000
Total committed ounces as
a percentage of total
forecast
production (excluding
Geita
for the period of the
project
financing ie 2003 - 2007)
Deferred
Hedging Income (US$m) 15 13 - -
2007 2008 2009 2010
Forward Sales (ounces) 340,000 279,125 334,250 304,250
Forward Sales (US$/ounce) 357 367 358 367
Puts:
Bought (ounces) 111,200 79,200 79,200 79,200
Bought (US$/ounce) 370 378 378 378
Calls:
Sold (ounces) 391,076 349,535 123,970 84,250
Sold (US$/ounce) 372 374 383 384
Bought (ounces) 172,996 - - -
Bought (US$/ounce) 418 - - -
Subtotal (ounces) 218,080 349,535 123,970 84,250
Lease Rate Swap ounces due - - - -
(ounces)
Summary:
Protected (ounces) 451,200 358,325 413,450 383,450
Committed (ounces) 558,080 628,660 458,220 388,500
Lease Rate Swap (ounces) 1,579,000 1,318,000 982,000 646,000
Total committed ounces as
a percentage of total
forecast
production (excluding
Geita
for the period of the
project
financing ie 2003 - 2007)
Deferred
Hedging Income (US$m) - - - -
2011 2012 2013 Total
Forward Sales (ounces) 268,250 215,313 186,500 4,288,068
Forward Sales (US$/ounce) 367 374 365 355
Puts:
Bought (ounces) - - - 732,400
Bought (US$/ounce) - - - 371
Calls:
Sold (ounces) 84,250 77,188 28,000 3,145,517
Sold (US$/ounce) 384 387 401 357
Bought (ounces) - - - 925,992
Bought (US$/ounce) - - - 427
Subtotal (ounces) 84,250 77,188 28,000 2,219,525
Lease Rate Swap ounces due (ounces) - - - 430
Summary:
Protected (ounces) 268,250 215,313 186,500 5,020,038
Committed (ounces) 352,500 292,500 214,500 6,507,162
Lease Rate Swap (ounces) 310,000 130,000 - 2,587,000
Total committed ounces as a 48%
percentage of total forecast
production (excluding Geita
for the period of the project
financing ie 2003 - 2007)
Deferred
Hedging Income (US$m) - - - 28
Details of Hedging Contracts outstanding at 31 December 2002 Forward Sales:
A total of 4.29 million ounces have been sold forward at an average price of
US$355 per ounce.
Put Options:
Ashanti has purchased 732,400 ounces of put options that give Ashanti the right,
but not the obligation, to sell gold at certain strike prices. The average
strike price is US$371 per ounce.
Call Options:
Ashanti has sold 3.15 million ounces of call options at an average strike price
of US$357 per ounce. As a partial offset, Ashanti has bought 0.93 million ounces
of call options at an average strike price of US$427 per ounce.
Gold Lease Rate Swaps:
As of 31 December 2002, a maximum of 2.59 million ounces of Ashanti's hedged
production will be exposed to the floating 3 month lease rate at any one time.
The lease rate swaps can be broken down into the following types (under all of
these contracts Ashanti receives a certain lease rate income, which can be
regarded as compensation for the lease rate exposure that Ashanti takes on).
Fixed Rate Volume
Description (%) (ounces)
Ashanti pays a quarterly floating rate and receives a weighted average quarterly 1.81 2,412,000
fixed rate of 1.81%
Ashanti pays a quarterly floating rate and receives a fixed amount of dollars at
maturity.
The quarterly amount is rolled until maturity of each forward contract. The fixed
amount for each
contract is calculated using the formula: Volume*YearsToMaturity*302*2.00%.
The next rate set is in 2004. 2.00 360,000
Total 2,772,000
Mark-to-Market Valuations
On 31 December 2002, the portfolio had a negative mark-to-market value of
US$150.0 million. This valuation was based on a spot price of US$345 per ounce
and the then prevailing applicable US interest rates, gold forward rates and
volatilities. The delta at that time was 5.9 million ounces. This implies that a
US$1 increase in the price of gold would have a US$5.9 million negative impact
(approximate) on the mark-to-market valuation of the hedge book. Movements in US
interest rates, gold lease rates, volatilities and time will also have a
sizeable impact on the mark-to-market. All these variables can change
significantly over short time periods and can consequently materially affect the
mark-to-market valuation.
The approximate breakdown by type of the mark-to-market valuation at 31 December
2002, was as follows:
US$m
Forward contracts (56.0)
European Put options (net bought) 24.9
European Call options (net sold) (102.7)
Lease rate swaps (16.2)
(150.0)
Geita Hedging
The table below shows Ashanti's portion of hedging commitments for Geita as at
31 December 2002. This represents half of Geita's hedge commitments.
2003 2004 2005
Forward Sales (ounces) 379,195 391,116 349,655
Forward Sales (US$/ounce) 285 289 294
Puts:
Bought (ounces) 53,470 51,172 48,700
Bought (US$/ounce) 291 291 291
Lease Rate Proceeds (ounces) 800 - -
Summary:
Protected (ounces) 431,865 442,288 398,355
Committed (ounces) 379,195 391,116 349,655
Lease Rate Swap (ounces) 378,395 233,548 152,601
2006 2007 Total
Forward Sales (ounces) 189,152 241,876 1,550,994
Forward Sales (US$/ounce) 296 298 291
Puts:
Bought (ounces) 36,230 46,780 236,352
Bought (US$/ounce) 291 292 291
Lease Rate Proceeds (ounces) - - 800
Summary:
Protected (ounces) 225,382 288,656 1,786,546
Committed (ounces) 189,152 241,876 1,550,194
Lease Rate Swap (ounces) 82,840 - -
Mark-to-Market Valuation
On 31 December 2002 the Geita portfolio had a negative mark-to-market value of
US$88.6 million (Ashanti's portion: US$44.3 million). This valuation was based
on a spot price of US$345 and the then prevailing US interest rates, gold
forward rates, volatilities and guidelines provided by the Risk Management
Committee of the Board.
10 Accounts
The preliminary results are unaudited. The financial information for the twelve
months to 31 December 2001 is derived from the statutory accounts for that year
as restated for the adoption of FRS 19 - Deferred Taxation.
Forward Looking Statements
This report contains a number of statements relating to plans, forecasts and
future results of Ashanti Goldfields Company Limited ("Ashanti") that are
considered "forward looking statements" as defined in the Private Securities
Litigation Reform Act 1995 of the United States of America including but not
limited to those related to future working capital, future production levels,
operating costs and plans for diversification. Ashanti may also make written or
oral forward-looking statements in its presentations, periodic reports and
filings with the various regulatory authorities, in its annual report to
shareholders, in its offering circulars and prospectuses, in press releases and
other written materials and in oral statements made by its officers, directors
or employees to third parties. These forward looking statements include
statements about our beliefs, hopes, projections and expectations, and may
include statements regarding future plans, objectives or goals, anticipated
production or construction commencement dates, construction completion dates,
working capital, expected costs, production output, the anticipated productive
life of mines, projected cashflows, debt levels, and mark-to-market values of
and cashflows from the hedgebook.
Such statements are based on current plans, information, intentions, estimates
and projections and certain external factors which may be beyond the control of
Ashanti and, therefore, undue reliance should not be placed on them. These
statements are subject to risks and uncertainties that could cause actual
occurrences to differ materially from the forward looking statements, such as
the risks that Ashanti may not be able to achieve the levels of production and
operating costs it has projected. Additional risk factors affecting Ashanti are
set out in Ashanti's filing with the US Securities and Exchange Commission.
Ashanti can give no assurances that such results, including the actual
production or commencement dates, construction completion dates, costs or
production output or anticipated life of the projects and mines, projected
cashflows, debt levels, and marked-to-market values of and cashflows from the
hedgebook, will not differ materially from the forward seeking statements
contained in this report. Such forward looking statements are not guarantees of
future performance and involve known and unknown risks, uncertainties and other
factors collectively referred to as "Risk Factors", many of which are beyond the
control of Ashanti, which may cause actual results to differ materially from
those expressed in the statements contained in this report. These Risk Factors
include leverage, gold price volatility, changes in interest rates, hedging
operations, reserves estimates, exploration and development, mining, yearly
output, power supply, Ghanaian political risks, environmental regulation, labour
relations, general political risks, control by principal shareholders, Ghanaian
statutory provisions, dividend flows and litigation. For example, future
revenues from projects or mines described herein will be based in part upon the
market price of gold, which may vary significantly from current levels. Such
variations, if materially adverse, may impact the timing or feasibility of the
developments of a particular project or the expansion of specified mines.
Other factors that may affect the actual construction or production commencement
dates, costs or production output and anticipated lives of mines include the
ability to produce profitably and transport gold extracted therefrom to
applicable markets, the impact of foreign currency exchange rates, the impact of
any increase in the costs of inputs, and activities by governmental authorities
where such projects or mines are being explored or developed, including
increases in taxes, changes in environmental and other regulations and political
uncertainty. Likewise the cashflows from and marked-to-market values of the
hedgebook can be affected by, inter alia, gold price volatility, US interest
rates, gold lease rates and active management of the hedgebook.
Forward looking statements speak only as of the date they are made, and except
as required by law, or unless required to do so by the Listing Rules of the UK
Listing Authority, Ashanti undertakes no obligation to update publicly any of
them in light of new information or future events.
Enquiries
Ashanti Goldfields Company Limited
Srinivasan Venkatakrishnan
Chief Financial Officer
Telephone: (+44) 20 7256 9938
Ernest Abankroh
Company Secretary
Telephone: (+44) 20 7256 9938
UK Contact
Corinne Gaisie
Telephone: (+44) 20 7256 9938
North American Contact
Allan Jordan
Golin Harris
Telephone: (+1-212) 697 9191
website: www.ashantigold.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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