Ashanti Goldfields Company Announces First Quarter Earnings.Business Editors ACCRA Accra (əkrä`, ăk`rə), city (1984 pop. 867,459), capital of Ghana, a port on the Gulf of Guinea. It is Ghana's largest city and its administrative, communications, and economic center. , Ghana--(BUSINESS WIRE)--June 17, 2003 Ashanti Ashanti (äshän`tē) or Asante (äsän`tē), historic and modern administrative region, central Ghana, W Africa. The region is the source of much of Ghana's cocoa. Goldfields n. 1. A small slender woolly annual (Lasthenia chrysostoma) with very narrow opposite leaves and branches bearing solitary golden-yellow flower heads; it grows from Southwestern Oregon to Baja California and Arizona; - it is often cultivated. Company Limited (NYSE NYSE See: New York Stock Exchange :ASL ASL - Algebraic Specification Language )-- -0-
FIRST QUARTER REPORT 2003
Earnings Impacted by Lower Production and Higher Cash Operating Costs
Highlights
-- Quarter's earnings of US$6.8 million, 59% lower than first
quarter of 2002
-- Total gold production of 380,929 ounces, 7% lower than last
year
-- Cash operating cost of US$224 per ounce, up US$34 per ounce on
last year
-- Ashanti hedge book restructured further
-- Exploration at Obuasi and Geita continues to yield encouraging
results
3 months to 3 months to 12 months to
31 Mar 03 31 Mar 02 31 Dec 02
Financial (US$m)
Total turnover 128.9 136.9 552.2
Total EBITDA 31.3 47.4 162.7
Operating Profit 11.7 24.3 74.3
Profit before tax 7.0 18.3 51.7
Earnings 6.8 16.5 56.2
Earnings per share (US$) 0.05 0.15 0.47
Gold Production (ounces)
Total 380,929 409,384 1,621,919
Attributable 363,341 391,836 1,553,745
Gold Price (US$ per ounce)
Realised by Ashanti 338 334 340
Spot price 351 301 312
Total Production Costs before
exceptional items (US$ per ounce)
Cash operating costs 224 190 199
Royalties 11 8 9
Depreciation and amortisation 51 56 54
Total 286 254 262
Overview First quarter production of 380,929 ounces was 7% lower than last year's 409,384 ounces primarily due to a delay in commissioning of the plant expansion at Iduapriem/Teberebie, lower mined grades as waste stripping to access higher grade ore continued at Geita and lower grades and recovery at Obuasi Obuasi (ōbwä`sē), town (1984 pop. 60,617), S central Ghana. Highly concentrated gold ore is mined, and there are gold-extraction plants. Gold was mined in Obuasi by indigenous peoples as early as the 17th cent. and Bibiani Bibiani is a town in Ghana. It is the capital of Bibiani Anhwiaso Bekwai district. . Total cash operating costs operating costs npl → gastos mpl operacionales rose from US$190 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. to US$224 per ounce. This was as a result of lower gold production, the impact of fuel prices, one off costs associated with the clean up of the Bibiani pit wall slip, lower grades during the period of the Geita Nyankanga pit cut-back and interim crushing crushing deaths of newborn animals, especially those in litters, caused by the mother lying on them accidentally. Contributed to by weakness of the neonate or awkward accommodation. A problem in piglets and puppies. Called also overlying. and mill feed arrangements at Iduapriem which necessitated a higher than normal amount of ore re-handling. Earnings for the quarter of US$6.8 million were 59% lower than the US$16.5 million recorded in 2002. Earnings per share were US$0.05 (2002: US$0.15). The reduced earnings were due to lower production and higher cash operating costs, partially mitigated mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. by higher spot prices. The realised gold price of US$338 per ounce was lower than the average spot price of US$351 per ounce, due to commitments in the Ashanti and Geita hedge books. Group gross and net debt levels were broadly unchanged during the quarter at US$255.9 million and US$215.0 million respectively. Higher spot prices and gold volatility helped Ashanti to effect some restructurings to its hedge book during the quarter. These restructurings have improved the average committed price per ounce over the life of the Ashanti hedge book by US$11, from US$346 to US$357. Drilling at Obuasi below 50 Level continued to yield encouraging results with significant drill intercepts of principally quartz quartz, one of the commonest of all rock-forming minerals and one of the most important constituents of the earth's crust. Chemically, it is silicon dioxide, SiO2. , with visible gold. These intercepts included 11.1 metres at 30.1g/t; 7.4 metres at 29.8g/t and 5.8 metres at 32.4g/t respectively between 54 level and 59 level. Operations Review Ghana Ghana, country, Africa Ghana, officially Republic of Ghana, republic (2005 est. pop. 21,030,000), 92,099 sq mi (238,536 sq km), W Africa, on the Gulf of Guinea, an arm of the Atlantic Ocean. The capital and largest city is Accra. Obuasi Obuasi's gold production for the quarter was 131,918 ounces approximately 2,000 ounces ahead of target, but 8,178 ounces below the 140,096 ounces achieved in the first quarter of 2002. The decrease in production was due to the lower feed grade, 6.99 g/t compared to 8.01 g/t, and lower metallurgical met·al·lur·gy n. 1. The science that deals with procedures used in extracting metals from their ores, purifying and alloying metals, and creating useful objects from metals. 2. recovery, 84.6% compared to 87.0%, at the Sulphide sulphide: see sulfide. Treatment Plant (STP STP or standard temperature and pressure, standard conditions for measurement of the properties of matter. The standard temperature is the freezing point of pure water, 0°C; or 273.15°K;. ). At US$205 per ounce, the cash operating cost for the quarter was on target but represented an 8% increase on the US$189 per ounce achieved in the first quarter of 2002. Mining. Underground production of 583,000 tonnes was lower than the 591,000 tonnes reported in the first quarter of 2002 while the head grade at 7.05 g/t is a decrease on the 7.50 g/t reported for the same prior period. The reduction in grade was expected with a higher tonnage TONNAGE, mar. law. The capacity of a ship or vessel. 2. The act of congress of March 2, 1799, s. 64, 1 Story's L. U. S. 630, directs that to ascertain the tonnage of any ship or vessel, the surveyor, &c. mined from the lower grade bulk mining open stopes Stopes , Marie Carmichael 1880-1958. British social reformer who opened England's first birth control clinic (1924) in London and later promoted family planning in east Asia. scheduled for the period. The tonnage reduction was due to lower than plan mining fleet equipment availability in February February: see month. . During the quarter further initiatives were undertaken to enhance grade control procedures and to upgrade the mine and processing plant feed tonnage/grade reconciliation systems. Underground infrastructure. Development continued on 50 level BSVS BSVS Back-up Secure Voice System shaft shaft (shaft) a long slender part, such as the diaphysis of a long bone. shaft n. 1. An elongated rodlike structure, such as the midsection of a long bone. 2. whilst procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. of the steelwork steel·work n. 1. Something made of steel. 2. steelworks (used with a sing. verb) A plant where steel is made; a foundry. steel was progressed in preparation for equipping e·quip tr.v. e·quipped, e·quip·ping, e·quips 1. a. To supply with necessities such as tools or provisions. b. , which is scheduled to commence in the fourth quarter. Raiseboring of the 300 ventilation shaft Noun 1. ventilation shaft - a shaft in a building; serves as an air passage for ventilation air duct, air passage, airway - a duct that provides ventilation (as in mines) shaft - a vertical passageway through a building (as for an elevator) was completed and civil work for conventional sinking of the collar area commenced. Surface mining. Open pit production from the Homase deposit was 172,000 tonnes grading 2.65 g/t during the quarter. The ore was trucked to the Oxide oxide, chemical compound containing oxygen and one other chemical element. Oxides are widely and abundantly distributed in nature. Water is the oxide of hydrogen. Silicon dioxide is the major component of sand and quartz. Treatment Plant (OTP (1) (One Time Programmable) Refers to programming content or logic into chips such as EPROMs and EEPROMs, which cannot be reversed. See antifuse. (2) (One Time P ) at Obuasi and blended with reclaimed re·claim tr.v. re·claimed, re·claim·ing, re·claims 1. To bring into or return to a suitable condition for use, as cultivation or habitation: reclaim marshlands; reclaim strip-mined land. heap leach leach v. leached, leach·ing, leach·es v.tr. 1. To remove soluble or other constituents from by the action of a percolating liquid. 2. tailings Tailings (also known as tailings pile, tails, leach residue, or slickens[1]) are the materials left over[2] after the process of separating the valuable fraction from the worthless fraction of an ore. . Processing. Throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. at STP was 580,000 tonnes, similar to the 582,000 tonnes treated in the corresponding period of last year. The head grade decreased to 6.99 g/t from 8.01 g/t and recovery decreased to 84.6% from 87.0%. This resulted in gold production being 110,235 ounces compared to 130,246 ounces in the first quarter of 2002. Plant throughput was affected by a damaged mill pinion pinion rear section of a bird's wing; holds the flight feathers. on the SAG (1) A momentary drop in voltage from the power source. Contrast with spike. (2) (SAG) (SQL Access Group) See CLI. mill which necessitated operating the mill at a reduced feed rate. The mill pinion will be changed and the girth GIRTH., A girth or yard is a measure of length. The word is of Saxon origin, taken from the circumference of the human body. Girth is contracted from girdeth, and signifies as much as girdle. See Ell. gear turned at the end of the second quarter. An additional SAG mill which was relocated re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. to STP from Pompora Treatment Plant (PTP (1) See peer-to-peer. (2) (Picture Transfer Protocol) An ISO standard for transferring photos from a digital camera to a computer or photo printer. ) was successfully re-commissioned during the first quarter and will provide security of capacity and production flexibility. Gold production at OTP was 10,997 ounces. The Tailings Treatment Plant produced 10,686 ounces in the first quarter compared to 9,496 ounces for the corresponding period in 2002. Tailings throughput increased to 500,000 tonnes compared with the previous year's 440,000 tonnes and recovery increased to 31% from 30%. Exploration. Underground exploration yielded good results with three intersections from the 131 crosscut on 50 level: 30.1 g/t over 11.0 metres, 29.8 g/t over 7.4 metres and 32.4 g/t over 5.8 metres at 54 level, 57 level and 59 level horizons respectively. In the south section of the mine drilling from 41 level provided 13.6 g/t over 6.4 metres and from 38 level intersections included 23.5 g/t over 9.4 metres and 26.0 g/t over 6.0 metres. In the north of the mine an intersection intersection /in·ter·sec·tion/ (-sek´shun) a site at which one structure crosses another. intersection a site at which one structure crosses another. from 12 level was made on a previously undeveloped shoot on the Ashanti reef showing 98.0 g/t over 4.7 metres. Surface drilling of the north extension of mineralisation at the Homase deposit was completed and the resource model is currently being finalised. Iduapriem/Teberebie First quarter gold production at Iduapriem was 47,246 ounces, slightly below the 47,844 ounces produced in the first quarter last year. The mill and leach tank component of the Carbon-in-Leach (CIL (Common Intermediate Language) The ECMA version of the Microsoft Intermediate Language (MSIL). See CLI. 1. (project) CIL - Component Integration Laboratories. 2. (language) CIL - Common Intermediate Language. ) plant expansion was largely completed during the quarter with outstanding work relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc new carbon screens. Integrating the new mill, classification and leach tank circuits with the original plant and balancing the circuits to provide optimum recovery provided a series of unanticipated challenges resulting in metallurgical recovery for the quarter being below expectation. Progress is being made in these areas and completion testing is ongoing. The overland o·ver·land adj. Accomplished, traversing, or passing over the land instead of the ocean: an overland journey; an overland route. adv. conveyor Conveyor A horizontal, inclined, declined, or vertical machine for moving or transporting bulk materials, packages, or objects in a path predetermined by the design of the device and having points of loading and discharge fixed or selective. and primary crushing section of the upgrade will be commissioned in two phases during the second and third quarters respectively. The cash operating costs were US$260 per ounce compared to US$193 per ounce for the corresponding quarter last year. The high cost reflects the higher tonnage milled and the low recovery achieved during the period as well as high ore re-handle costs associated with the temporary crushing and mill feed arrangements being utilised whilst the overland conveyor and primary crusher crusher, machine used to reduce materials such as ore, coal, stone, and slag to particle sizes that are convenient for their intended uses. Crushers operate by slowly applying a large force to the material to be reduced. elements of the upgrade project are being implemented. Relative to the same quarter last year, gold production from the heap leach operation reduced from 9,553 ounces to 6,459 ounces because of lower recovery associated with harder less permeable permeable /per·me·a·ble/ (per´me-ah-b'l) not impassable; pervious; permitting passage of a substance. per·me·a·ble adj. That can be permeated or penetrated, especially by liquids or gases. feed material and lower tonnage throughput. Bibiani Bibiani produced 51,271 ounces at a cash operating cost of US$234 per ounce from processing 610,000 tonnes of ore at 3.35 g/t. Production for the corresponding period in 2002 was 59,806 ounces at US$186 per ounce from 577,000 tonnes at 3.90 g/t. Metallurgical recovery reduced to 80.3% from 82.2% relative to the first quarter of 2002 due to the more refractory refractory Material that is not deformed or damaged by high temperatures, used to make crucibles, incinerators, insulation, and furnaces, particularly metallurgical furnaces. nature of the ores being processed. The lower grade and metallurgical recovery resulted in the lower gold production. The increase in the cash operating cost reflects the lower gold production, the increased depth of the pit and the clean up work on the footwall foot·wall n. Geology 1. The mass of rock underlying a mineral deposit in a mine. 2. The underlying block of a fault having an inclined fault plane. slip which occurred in October October: see month. 2002. Good progress was made on the underground decline access and the portal has now been fully established for accelerated development and exploration activities. The first deep exploration hole, drilled to a depth of 1,060 metres, intersected the shear shear: see strength of materials. Shear A straining action wherein applied forces produce a sliding or skewing type of deformation. zone but mineralisation was low grade, 1.9 metres at 1.8 g/t. The second hole was at 800 metres depth at the end of the quarter. These holes are targeted to intersect In a relational database, to match two files and produce a third file with records that are common in both. For example, intersecting an American file and a programmer file would yield American programmers. the mineralised zone at depths well below the deepest underground workings. Recent metallurgical test work aimed at improving recovery from the refractory component of the ore has indicated that a flotation process flotation process, in mineral treatment and mining, process for concentrating the metal-bearing mineral in an ore. Crude ore is ground to a fine powder and mixed with water, frothing reagents, and collecting reagents. with concentrate regrind and intense cyanide cyanide (sī`ənīd'), chemical compound containing the cyano group, -CN. Cyanides are salts or esters of hydrogen cyanide (hydrocyanic acid, HCN) formed by replacing the hydrogen with a metal (e.g., sodium or potassium) or a radical (e.g. leaching leaching, method of extraction in which a solvent is passed through a mixture to remove some desired substance from it. A simple example is the passage of boiling water through ground coffee to dissolve and carry out the chemicals necessary for producing the beverage. will enhance the economics of processing these ores. The possibility of utilising redundant plant from the Obuasi PTP for this purpose is being investigated. Guinea Guinea, archaic term for Africa's west coast Guinea (gĭn`ē), an archaic term for the west coast of Africa. In its widest sense it has been applied to the region from Angola to Senegal. Siguiri Siguiri is a city in northeastern Guinea on the River Niger. It is known for its goldsmiths and as the birthplace of Sekouba Bambino Diababé. It also has a former French fort, built in 1888, and an airport.
Siguiri gold production of 70,011 ounces was similar to the 69,142 ounces achieved in the first quarter of 2002. Stacked Stacked is an American television sitcom that premiered on Fox on April 13, 2005. On May 18, 2006, Stacked was cancelled, leaving five episodes unaired in the United States. The last episode aired on January 11, 2006. tonnage increased to 2.48 million tonnes from 2.39 million tonnes whilst the feed grade declined to 1.16 g/t from 1.23 g/t. Low excavator ex·ca·va·tor n. An instrument, such as a sharp spoon or curette, used in scraping out pathological tissue. excavator (eks´k availability affected mining operations resulting in a loss of production flexibility and access to higher grade material scheduled for mining. A fire which started in the ventilation system ventilation system Public health An air system designed to maintain negative pressure and exhaust air properly, to minimize the spread of TB and other respiratory pathogens in a health care facility caused extensive damage to the assay ASSAY. A chemical examination of metals, by which the quantity of valuable or precious metal contained in any mineral or metallic mixture is ascertained. 2. By the acts of Congress of March 3, 1823, 3 Story's L. U. S. 1924; of June 25, 1834, 4 Shars. cont. Story's L. U. S. laboratory operated by SGS SGS Société Générale de Surveillance SGS Symantec Gateway Security (appliance) SGS School of Graduate Studies SGS Subgrid Scale SGS Singapore Government Securities SGS Shell Global Solutions and severely constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. grade control operations in the pits and the ability to mine at planned grades during the quarter. The laboratory has been repaired and was back to full capacity by the end of April. The cash operating costs increased to US$239 per ounce from US$228 per ounce, reflecting increased mined volumes and higher fuel prices. Engineering design, procurement, site mobilisation n. 1. Mobilization. Noun 1. mobilisation - act of marshaling and organizing and making ready for use or action; "mobilization of the country's economic resources" mobilization and civil preparation work for the new CIP (1) (Common Isochronous Packet) The packet format used in time-based (real time) FireWire transmission. See FireWire, IEC 61883 and mLAN. (2) (Common Industrial P plant progressed throughout the first quarter. However, Ashanti has, by mutual agreement with the contractor, terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: the Siguiri CIP lump sum Lump sum A large one-time payment of money. contract due to irreconcilable differences The existence of significant differences between a married couple that are so great and beyond resolution as to make the marriage unworkable, and for which the law permits a Divorce. . Ashanti is reviewing the situation and assessing alternative options, which will impact on project timetable “Schedule” redirects here. For other uses, see Schedule (disambiguation). A timetable or schedule is an organized list or schedule, usually set out in tabular form, providing information about a series of arranged events: in particular, the time at which and costs. Zimbabwe Zimbabwe, ruined city, Zimbabwe Zimbabwe (zĭmbäb`wā) [Bantu,=stone houses], ruined city, SE Zimbabwe, near Fort Victoria. It was discovered by European explorers c. Freda-Rebecca Freda-Rebecca gold production for the quarter was 16,945 ounces compared with 23,086 ounces in the first quarter of 2002. Despite an increase in mill throughput to 344,000 tonnes from 283,000 tonnes, gold production decreased because of the lower feed grade and metallurgical recovery. Blasthole drilling operations were impacted by a lack of foreign exchange to procure To cause something to happen; to find and obtain something or someone. Procure refers to commencing a proceeding; bringing about a result; persuading, inducing, or causing a person to do a particular act; obtaining possession or control over an item; or making a person drill spares resulting in low underground ore production and the need to feed the plant with a high tonnage of low grade surface stockpile stock·pile n. A supply stored for future use, usually carefully accrued and maintained. tr.v. stock·piled, stock·pil·ing, stock·piles To accumulate and maintain a supply of for future use. material. Alternative supply positions are being investigated and a plan has been drawn up to replenish re·plen·ish v. re·plen·ished, re·plen·ish·ing, re·plen·ish·es v.tr. 1. To fill or make complete again; add a new stock or supply to: replenish the larder. 2. the drilled reserve during the second quarter. During this period the shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. in underground production tonnage will be replaced by low grade open pit ore and further draw down of the medium/low grade surface stockpiles. Negotiations with the Central Bank and suppliers have taken place but the release of hard currency is slow and could impact on the production recovery plan. The lower gold production and inflationary in·fla·tion·ar·y adj. Of, associated with, or tending to cause inflation: inflationary prices; inflationary policies. Adj. 1. pressures in Zimbabwe are reflected in the increase in cash operating costs for the quarter to US$266 per ounce from US$226 per ounce for the same period last year. Tanzania Tanzania (tăn'zənē`ə, –zăn`ēə, Swahili tänzänē`ä), officially United Republic of Tanzania, republic (2005 est. pop. Geita (50% owned) Gold production at Geita was 127,077 ounces compared with 138,819 ounces produced in the first quarter of 2002. Plant throughput for the quarter was 1.4 million tonnes at 3.10 g/t compared to 1.2 million at 4.00 g/t for the corresponding period last year. Mining activities were concentrated on the Nyankanga cut 3 waste strip in order to access higher grade ore early in the third quarter. The upgrade of the crushing circuit was successfully commissioned during the first quarter and initial results indicate that the targeted upgrade milling capacity of 5.5 million tonnes per year will be achieved. Cash operating costs rose to US$203 per ounce from US$146 per ounce largely as a result of lower grades and production.
Summary of production and cash operating costs per ounce
Freda- Total/
Obuasi Iduapriem Bibiani Siguiri Rebecca Geita Average
3 months to
31 March
2003
Production
(ounces) 131,918 47,246 51,271 70,011 16,945 63,538 380,929
Cost per
ounce (US$) 205 260 234 239 266 203 224
3 months to
31 March
2002
Production
(ounces) 140,096 47,844 59,806 69,142 23,086 69,410 409,384
Cost per
ounce (US$) 189 193 186 228 226 146 190
12 months to
31 December
2002
Production
(ounces) 537,219 185,199 242,432 269,292 98,255 289,522 1,621,919
Cost per
ounce (US$) 198 232 180 230 214 163 199
Outlook As announced on 26 March 2003, Ashanti anticipates its second quarter production to be in the region of 375,000 ounces. This is due to the delay in commissioning the expansion at Iduapriem/Teberebie and the ongoing Nyankanga pit cut-back at Geita. Damage to the SAG mill pinion at Obuasi, lower mined and stacked grades at Siguiri and power outages This is a list of famous wide-scale power outages. 1965
As also announced on 26 March 2003, rising fuel prices, increases in power cost 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 will impact adversely on our cash operating costs this year. We are taking steps to minimise this impact but it is still likely that cash operating costs will increase by approximately 10% this year. The reduced production level anticipated for the second quarter will also have a consequential con·se·quen·tial adj. 1. Following as an effect, result, or conclusion; consequent. 2. Having important consequences; significant: adverse impact on our unit cash operating costs for the second quarter as compared to the annualised level. Exploration East Africa Tanzania Geita During the quarter exploration drilling continued at Nyankanga West and East, Star and Comet comet [Gr.,=longhaired], a small celestial body consisting mostly of dust and gases that moves in an elongated elliptical or nearly parabolic orbit around the sun. Comets visible from the earth can be seen for periods ranging from a few days to several months. and at Geita Hill. At Nyankanga, step out drilling testing strike and depth extensions both east and west of the current resource continued. A high grade intersection of 20 metres grading 15.3 g/t was intersected in borehole bore·hole n. A hole that is drilled into the earth, as in exploratory well drilling or in building construction. NYDD0097 at 190 metres, some 300 metres west along strike from the main Nyankanga ore body. At Star and Comet, hole SCDD SCDD State Council on Development Disabilities SCDD Same Crap, Different Day 002, one of two holes drilled targeting the projected high grade fold nose mineralisation at depth, intersected 9 metres grading 19.5 g/t from 267 metres down the hole. Tanzania Regional Stream sediment sediment, mineral or organic particles that are deposited by the action of wind, water, or glacial ice. These sediments can eventually form sedimentary rocks (see rock). sampling continued on the Kigosi reconnaissance  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. licence in the south western part of the Lake Victoria Goldfields. D.R. Congo Congo, river, Africa Congo (kŏng`gō) or Zaïre (zī`ēr, zäēr`), great river of equatorial Africa, c. Continued unrest Unrest is a sociological phenomenon, for instance:
West Africa West Africa A region of western Africa between the Sahara Desert and the Gulf of Guinea. It was largely controlled by colonial powers until the 20th century. West African adj. & n. Burkino Faso The Youga Exploitation Permit was ratified rat·i·fy tr.v. rat·i·fied, rat·i·fy·ing, rat·i·fies To approve and give formal sanction to; confirm. See Synonyms at approve. by the Government on 8 April 2003. Cote d'Ivoire Some progress was made towards resolving the stalemate stale·mate n. 1. A situation in which further action is blocked; a deadlock. 2. A drawing position in chess in which the king, although not in check, can move only into check and no other piece can move. tr.v. between the Government and rebel forces during the quarter but no resumption RESUMPTION. To reassume; to promise again; as, the resumption of payment of specie by the banks is general. It also signifies to take things back; as the government has resumed the possession of all the lands which have not been paid for according to the requisitions of the law, and the of exploration activities was undertaken. Guinea Exploration drilling, concentrated on the area surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. the Bidini, Eureka Hill, Sanu Tinti and Tubani pits, defined several small resources in both laterite laterite Soil layer rich in iron oxide and sometimes aluminum, derived from a wide variety of rocks by leaching. It forms in tropical and subtropical regions where the climate is humid. and saprolite sap·ro·lite n. Soft, partially decomposed rock rich in clay and remaining in its original place. saprolite . Several intersections from the Kalamagna Prospect, including 57 metres grading 1.21 g/t from surface, 34 metres at 1.56 g/t from 27 metres and 16 metres of 2.06 g/t from 52 metres were made during the quarter. Mali Broad spaced reconnaissance pits were used to test the regolith reg·o·lith n. The layer of loose rock resting on bedrock, constituting the surface of most land. Also called mantle rock. [Greek rh profile in the M'pebougoula JV Exploration Authorisation that abuts the southern limit of the Morila Exploitation Permit. Auger auger (ô`gər): see drill. auger Tool (or bit) used with a carpenter's brace for drilling holes, usually in wood. It looks like a corkscrew and produces extremely clean holes, almost regardless of how large the bit is. drilling and geophysical surveying Geophysical survey refers to the systematic collection of geophysical data for spatial studies. Geophysical surveys may use a great variety of sensing instruments, and data may be collected from above or below the Earth's surface or from aerial or marine platforms. of these areas is in progress. Similar work has commenced on the Bala and Ngolopene Authorisations north of the inactive in·ac·tive adj. 1. Not active or tending to be active. 2. a. Not functioning or operating; out of use: inactive machinery. b. Syama Mine. Initial pits dug in the Koumantou Koumantou is the capital of a rural commune of Mali, in the Cercle of Bougouni in the Sikasso Region. It is located near the Ivorian border. The commune includes 38 villages spread over 1268 km² and counting 35,104 people. Exploration Authorisation suggest that only the eastern portion of permit is prospective for gold. Geochemical sampling and mapping is in progress. Southern Africa
South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. Application for the prospecting licence on the M'phatlele's Location PGM PGM Program PGM Pragmatic General Multicast PGM Phosphoglucomutase PgM Program Manager PGM Platinum Group Metal PGM Pagemaker (software) PGM Portable Gray Map PGM Precision Guided Munition project was submitted during the quarter.
Production
3 months 3 months 12 months
to to to
31 March 31 March 31 Dec
2003 2002 2002
Obuasi
Underground Mining
Ore ('000 tonnes) 583 591 2,423
Grade (g/t) 7.05 7.50 7.48
Surface Mining
Ore ('000 tonnes) 172 - 368
Grade (g/t) 2.65 - 2.71
Waste Mined ('000 tonnes) 872 - 2,165
Strip Ratio 5.1 - 5.8
Sulphide Treatment Plant
Ore processed ('000 tonnes) 580 582 2,352
Head grade (g/t) 6.99 8.01 7.35
Recovery (%) 84.6 87.0 84.8
Gold produced (ounces) 110,235 130,426 471,359
Pompora Treatment Plant Clean up
Gold produced (ounces) - 174 195
Oxide Treatment Plant
Ore Processed ('000 tonnes) 228 - 435
Head grade (g/t) 1.80 - 2.06
Recovery (%) 81.8 - 81.2
Gold produced (ounces) 10,997 - 23,390
Tailings Treatment Plant
Ore processed ('000 tonnes) 500 440 1,840
Head grade (g/t) 2.15 2.23 2.29
Recovery (%) 31.0 30.0 31.2
Gold produced (ounces) 10,686 9,496 42,275
Obuasi Total Processed
Ore processed ('000 tonnes) 1,309 1,022 4,627
Head grade (g/t) 4.24 5.52 4.84
Recovery (%) 74.1 77.2 74.8
Gold produced (ounces) 131,918 140,096 537,219
Distribution of Obuasi Production
(ounces)
Obuasi underground 110,235 130,600 471,554
Obuasi surface 10,997 - 23,390
Obuasi tailings 10,686 9,496 42,275
Obuasi total 131,918 140,096 537,219
Iduapriem
Mining
Ore ('000 tonnes) 886 940 4,393
Grade (g/t) 1.74 1.60 1.66
Waste mined ('000 tonnes) 3,474 4,128 15,019
Strip ratio 3.9 4.5 3.4
CIL Plant
Ore processed ('000 tonnes) 844 656 2,625
Head grade (g/t) 1.69 2.00 1.96
Recovery (%) 89.4 94.4 89.3
Gold produced (ounces) 40,787 38,291 147,726
Heap Leach
Ore stacked ('000 tonnes) 306 355 1,127
Head grade (g/t) 1.14 1.10 1.13
Recovery (%) 57.9 76.1 91.3
Gold produced (ounces) 6,459 9,553 37,473
Total gold produced (ounces) 47,246 47,844 185,199
3 months 3 months 12 months
to to to
31 March 31 March 31 Dec
2003 2002 2002
Bibiani
Mining
Ore ('000 tonnes) 661 344 2,608
Grade (g/t) 3.51 3.70 3.53
Waste mined ('000 tonnes) 2,128 3,004 11,054
Strip ratio 3.2 8.7 4.2
CIL Plant
Ore processed ('000 tonnes) 610 577 2,566
Head grade (g/t) 3.35 3.90 3.72
Recovery (%) 80.3 82.2 79.0
Gold produced (ounces) 51,271 59,806 242,432
Siguiri
Mining
Ore ('000 tonnes) 2,533 1,913 9,464
Grade (g/t) 1.16 1.23 1.19
Waste mined ('000 tonnes) 2,277 2,230 8,404
Strip ratio 0.9 1.2 0.9
Heap Leach
Ore stacked ('000 tonnes) 2,476 2,390 9,462
Head grade (g/t) 1.07 1.16 1.16
Recovery (%) 82.2 77.5 76.3
Gold produced (ounces) 70,011 69,142 269,292
Freda-Rebecca
Underground Mining
Ore ('000 tonnes) 168 262 1,077
Grade (g/t) 2.61 3.83 2.99
Surface Mining
Ore ('000 tonnes) 18 44 110
Grade (g/t) 1.9 2.19 2.26
CIL Plant
Ore processed ('000 tonnes) 344 283 1,155
Head grade (g/t) 1.92 3.36 3.22
Recovery (%) 79.7 75.6 82.2
Gold produced (ounces) 16,945 23,086 98,255
Geita
Mining
Ore ('000 tonnes) 1,037 1,192 5,399
Grade (g/t) 3.03 3.30 3.52
Waste mined ('000 tonnes) 11,426 5,550 39,729
Strip ratio 11.0 4.7 7.4
CIL Plant
Ore processed ('000 tonnes) 1,397 1,198 4,979
Head grade (g/t) 3.10 4.00 3.92
Recovery (%) 92.0 92.1 92.3
Gold produced (ounces) 127,077 138,819 579,043
Ashanti's 50% share (ounces) 63,538 69,410 289,522
Group Summary (ounces)
Managed gold production 317,391 339,974 1,332,397
Geita JV 50% 63,538 69,410 289,522
Total production 380,929 409,384 1,621,919
Less minority interests 17,589 17,548 68,174
Total Attributable (ounces) 363,341 391,836 1,553,745
Financial Review Earnings Earnings for the first quarter were US$6.8 million, down US$9.7 million on the corresponding period last year. The reduction in earnings was due to lower production and higher cash operating costs offset partially by higher spot prices. Earnings per share were US$0.05 (2002: US$0.15). Revenue Gold production for the quarter of 380,929 ounces (2002: 409,384 ounces) generated spot revenue of US$133.6 million (2002: US$123.4 million), equivalent to US$351 per ounce (2002: US$301 per ounce). Total hedging income for the quarter was negative US$4.7 million, comprising deferred hedging income of US$3.2 million and net cash payments on maturing hedging contracts, due to the high spot prices during the quarter, of US$7.9 million. Total revenue for the quarter was US$128.9 million (2002: US$136.9 million), equivalent to US$338 per ounce (2002:US$334 per ounce). Hedging Higher spot prices and gold volatility levels since 31 December December: see month. 2002 allowed Ashanti to make the following principal changes to its hedge book during the quarter: -- 660,000 ounces of bought call options with strike prices greater than US$430 per ounce were re-struck lower to 232,652 ounces of bought call options with strike prices of US$320 per ounce and US$330 per ounce; -- Protected ounces were increased by 50,400 with strike prices of US$354 per ounce and US$375 per ounce; and -- 401,000 ounces of sold call options were re-struck lower to match 682,400 ounces of bought put options, thereby converting the put and call options into forward sales forward sales npl → ventas fpl a término . Value generated through this restructure was used to purchase a further 232,666 ounces of call options with a strike price of US$330 per ounce. Although the total number of bought call ounces has been reduced, the above restructurings have the following advantages: Owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de the lower strike prices, the cashflow effect from the new bought call structure is comparably beneficial to Ashanti up to gold prices of approximately US$500 per ounce with respect to these contracts; -- The bought call options now have strike prices and value dates that match individual sold call options or forward sales; -- Converting bought put and sold call options into forward sales simplifies the management of the hedge book; -- The number of protected ounces has increased by 50,400 at favourable strike prices; -- The average committed price over the life of the book has improved by US$11 per ounce from US$346 per ounce to US$357 per ounce; and -- Commitments for 2003 have been reduced allowing more participation in higher spot prices: as at 31 March 2003 commitments stood at 879,072 ounces, which is a reduction of 420,582 ounces (32%) as compared to the position as at 31 December 2002 of 1,299,654 ounces. There were no significant changes to lease rate swap ounces or the Geita hedge book, apart from maturing contracts. At the quarter end Ashanti had 4.8 million ounces of protection at an average price of US$359 per ounce with commitments of 6.6 million ounces. The mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. valuation of the hedge book at quarter end was negative US$93.2 million based on a spot price of US$336 per ounce. Ashanti's share of the mark-to-market valuation of the Geita hedge book was negative US$36.3 million. Cash Operating Costs Total cash operating costs rose from US$190 to US$224 per ounce. This was as a result of lower gold production, the impact of increased fuel prices, one off costs associated with the clean up of the Bibiani pit wall slip, the Geita Nyankanga pit cut-back and interim crushing and mill feed arrangements at Iduapriem which necessitated a higher than normal amount of ore re-handling. Profit Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. for the quarter, including Geita, was US$11.7 million (2002: US$24.3 million). Exploration expenditure was US$0.3 million lower than last year at US$0.7 million while corporate administration costs were up US$1.4 million on last year at US$6.0 million. Depreciation at US$19.6 million was down from US$23.1 million last year due to lower production. Net interest payable for the quarter was US$4.7 million, down US$1.3 million on last year due to lower debt levels and interest rates. Cash Flows and Balance Sheet Cash inflow in·flow n. 1. The act or process of flowing in or into: an inflow of water; an inflow of information. 2. from operating activities was US$16.8 million (2002: US$23.2 million). Net interest payments were US$2.4 million, US$5.6 million lower than last year. Capital expenditure was US$17.1 million (2002: US$14.9 million) and includes expenditure of US$7.7 million at Obuasi, US$4.8 million in respect of the CIP project at Siguiri and US$2.5 million on the plant expansion at Iduapriem/Teberebie. A further US$3.6 million was raised from the exercise of warrants. Of the total 19,835,001 warrants issued in January January: see month. 2000, 15,155,031 warrants have been exercised and 4,679,970 warrants remained outstanding as at 31 March 2003. Gross and net debt at quarter end were US$255.9 million and US$215.0 million respectively, broadly unchanged from previous year end. Other Matters subsequent to 31 March 2003 The boards of Ashanti and AngloGold AngloGold was a gold mining company based in South Africa and majority-owned by the Anglo American group. In 2004 it merged with the Ashanti Goldfields Corporation to create the world's second-largest gold producer, AngloGold Ashanti. Limited ("AngloGold") are in discussions regarding a proposed merger of the two companies at a ratio of 26 AngloGold shares for every 100 Ashanti ordinary shares or global depositary DEPOSITARY, contracts. He with whom a deposit is confided or made. 2. It is, the essence of the contract of deposits that it should be gratuitous on the part 'of the depositary. 9 M. R. 470. securities. These discussions and the related discussions with certain stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. may or may not lead to a proposal being made for the entire issued share capital of Ashanti. As Ashanti announced on 13 June June: see month. 2003, the Government of Ghana is to hold consultations and take appropriate professional advice in considering the proposed merger. In view of these discussions, the proposed rights issue has been delayed. If the proposed merger is formally announced, it is not Ashanti's intention to proceed with the rights issue. On 30 May 2003 a further 2,183,144 warrants were exercised at US$3 per warrant raising US$6.5 million. As a result the stated capital stated capital See legal capital. now stands at 130.8 million shares (31 December 2002:127.5 million shares) and 2.5 million warrants remain outstanding.
Group Profit and Loss Account
Unaudited
3 months to 31 Mar 2003
Interest
in
Group joint Total
venture
Note US$m US$m US$m
Turnover 2 109.6 19.3 128.9
Cash operating costs 2 (72.5) (12.9) (85.4)
Other costs (7.4) (0.8) (8.2)
Exceptional cost - - -
Royalties (3.4) (0.6) (4.0)
Depreciation and amortisation (17.3) (2.3) (19.6)
Total costs 3 (100.6) (16.6) (117.2)
Other income - - -
Operating profit 2 9.0 2.7 11.7
Share of operating profit of
joint venture 2.7
Total operating profit 11.7
Net interest payable: group (3.6)
joint venture (1.1)
Profit before taxation 7.0
Taxation: group -
joint venture -
Profit after taxation 7.0
Minority interests (0.2)
Profit attributable to
shareholders 6.8
Dividends -
Retained profit for the period 6.8
Earnings per share (US$) 0.05
3 months to 31 Mar 2002 12
months
to
Interest 31 Dec
in 2002
Group joint Total Total
venture
US$m US$m US$m US$m
Turnover 116.9 20.0 136.9 552.2
Cash operating costs (67.8) (10.1) (77.9) (323.1)
Other costs (6.4) (0.8) (7.2) (31.6)
Exceptional cost (1.0) - (1.0) (32.3)
Royalties (2.8) (0.6) (3.4) (14.6)
Depreciation and amortisation (20.0) (3.1) (23.1) (88.4)
Total costs (98.0) (14.6) (112.6) (490.0)
Other income - - - 12.1
Operating profit 18.9 5.4 24.3 62.2
Share of operating profit of
joint venture 5.4 -
Total operating profit 24.3 74.3
Net interest payable: group (4.9) (17.5)
joint venture (1.1) (5.1)
Profit before taxation 18.3 51.7
Taxation: group (1.8) (3.0)
joint venture - 6.7
Profit after taxation 16.5 55.4
Minority interests - 0.8
Profit attributable to
shareholders 16.5 56.2
Dividends - -
Retained profit for the period 16.5 56.2
Earnings per share (US$) 0.15 0.47
Group Balance Sheet
Unaudited
As at 31 Mar 2003 As at As at
Interest 31 Mar 31 Dec
in 2002 2002
Group joint Total Group Group
venture
US$m US$m US$m US$m US$m
Fixed assets
Intangible assets 16.0 54.0 70.0 18.0 17.3
Tangible assets 598.3 106.0 704.3 607.8 602.7
Investments
- Geita joint venture 92.8 (92.8) - 86.2 91.2
- Loans to joint venture and other
investments 32.3 - 32.3 32.6 32.6
739.4 806.6 744.6 743.8
Current assets
Stocks 73.7 10.0 83.7 71.6 76.6
Debtors due within one year 10.7 21.6 32.3 19.8 14.0
Debtors due after more than one
year 12.4 - 12.4 - 8.8
Cash 40.9 14.4 55.3 42.9 41.3
137.7 46.0 183.7 134.3 140.7
Creditors: amounts falling due
within one year
Creditors (123.2) (18.8)(142.0)(137.5)(131.1)
Borrowings (2.3) (10.8) (13.1)(279.8) (2.7)
(125.5) (29.6)(155.1)(417.3)(133.8)
Net current assets/(liabilities) 12.2 16.4 28.6 (283.0) 6.9
Total assets less current
liabilities 751.6 835.2 461.6 750.7
Creditors: amounts falling due
after more than one year
Creditors (15.0) (39.9) (54.9) (50.4) (24.0)
Borrowings (253.6) (40.6)(294.2) (34.3)(254.2)
Provisions for liabilities and
charges (24.9) (3.1) (28.0) (20.1) (25.0)
458.1 458.1 356.8 447.5
Capital and reserves
Stated capital 591.8 545.2 588.2
Reserves (135.1) (190.4)(141.9)
Equity shareholders' funds 456.7 354.8 446.3
Equity minority interests 1.4 2.0 1.2
458.1 356.8 447.5
Group Cash Flow Statement
Unaudited
3 3 12
months months months
to to to
31 Mar 31 Mar 31 Dec
2003 2002 2002
US$m US$m US$m
Cash inflow from operating activities 16.8 23.2 95.2
Returns on investments and servicing of finance
Interest received 0.1 0.1 0.8
Interest paid (2.5) (8.1) (19.6)
Net cash outflow from returns on investments and
service of finance (2.4) (8.0) (18.8)
Taxation
Corporate tax paid - (0.6) (2.0)
Capital expenditure and financial investments
Purchase of tangible fixed assets (17.1) (14.9) (64.5)
Net cash outflow from capital expenditure and
financial investment (17.1) (14.9) (64.5)
Cash (outflow)/inflow before use of liquid
resources and financing (2.7) (0.3) 9.9
Management of liquid resources 6.0 6.7 6.0
Cash inflow before financing 3.3 6.4 15.9
Financing
Loans drawn down - - 265.0
Loan repayments (0.9) (9.6)(326.0)
Issue of shares 3.6 - 41.8
Net cash inflow/(outflow) from financing 2.7 (9.6) (19.2)
Increase/(decrease) in cash 6.0 (3.2) (3.3)
Reconciliation of net cash flow to movement in
net debt
Increase/(decrease) in cash 6.0 (3.2) (3.3)
Decrease in liquid resources (6.0) (6.7) (6.0)
- (9.9) (9.3)
Cash outflow from decrease in debt 0.9 9.6 61.0
Other (0.3) (0.2) 3.4
Movement in net debt 0.6 (0.5) 55.1
Net debt at beginning of period (215.6)(270.7)(270.7)
Net debt at end of period (215.0)(271.2)(215.6)
Notes to the Financial Information
1. Basis of Preparation
The unaudited results for the three months ended 31 March 2003
have been prepared in accordance with the accounting policies set out
in the Annual Report and Accounts for the year ended 31 December 2002.
2. Operating Profit Analysis by Business Area
3 months to 31 March 2003
Idua-
Obuasi priem Bibiani Siguiri
Production ounces 131,918 47,246 51,271 70,011
US$million
Revenue - spot 46.3 16.5 18.0 24.6
Revenue - hedging - - - -
46.3 16.5 18.0 24.6
Operating costs (27.0) (12.3) (12.0) (16.7)
Other costs - (0.3) (0.1) (0.3)
Royalties (1.6) (0.5) (0.5) (0.8)
EBITDA 17.7 3.4 5.4 6.8
Depreciation and
amortisation (7.9) (1.3) (2.3) (4.0)
Operating profit
31.3.2003 9.8 2.1 3.1 2.8
Operating profit
31.3.2002 4.5 3.4 2.7 (0.9)
Freda- Hedging Explora- Corp.
Rebecca income tion Admin
Production ounces 16,945 - - -
US$million
Revenue - spot 5.9 - - -
Revenue - hedging - (1.7) - -
5.9 (1.7) - -
Operating costs (4.5) - - -
Other costs - - (0.7) (6.0)
Royalties - - - -
EBITDA 1.4 (1.7) (0.7) (6.0)
Depreciation and
amortisation (1.5) - - (0.3)
Operating profit
31.3.2003 (0.1) (1.7) (0.7) (6.3)
Operating profit
31.3.2002 2.3 13.8 (1.0) (5.9)
Group Geita Total
Production ounces 317,391 63,538 380,929
US$million
Revenue - spot 111.3 22.3 133.6
Revenue - hedging (1.7) (3.0) (4.7)
109.6 19.3 128.9
Operating costs (72.5) (12.9) (85.4)
Other costs (7.4) (0.8) (8.2)
Royalties (3.4) (0.6) (4.0)
EBITDA 26.3 5.0 31.3
Depreciation and
amortisation (17.3) (2.3) (19.6)
Operating profit
31.3.2003 9.0 2.7 11.7
Operating profit
31.3.2002 18.9 5.4 24.3
3 months to 31 March 2002
Idua-
Obuasi Ayanfuri priem Bibiani
Production ounces 140,096 - 47,844 59,806
US$million
Revenue - spot 41.1 - 14.1 17.6
Revenue - hedging - - - -
41.1 - 14.1 17.6
Operating costs (26.5) - (9.2) (11.1)
Other costs - - (0.2) (0.1)
Refinancing and
restructuring costs - - - -
Royalties (1.2) - (0.4) (0.5)
EBITDA 13.4 - 4.3 5.9
Depreciation and
amortisation (8.9) - (0.9) (3.2)
Operating profit
31.3.2002 4.5 - 3.4 2.7
Operating profit
31.3.2001 (1.7) 0.1 0.2 2.4
Freda- Hedging Explora-
Siguiri Rebecca income tion
Production ounces 69,142 23,086 - -
US$million
Revenue - spot 20.2 10.1 - -
Revenue - hedging - - 13.8 -
20.2 10.1 13.8 -
Operating costs (15.8) (5.2) - -
Other costs (0.5) - - (1.0)
Refinancing and
restructuring costs - - - -
Royalties (0.7) - - -
EBITDA 3.2 4.9 13.8 (1.0)
Depreciation and
amortisation (4.1) (2.6) - -
Operating profit
31.3.2002 (0.9) 2.3 13.8 (1.0)
Operating profit
31.3.2001 (4.4) (0.5) 23.6 (1.6)
Corp.
Admin Group Geita Total
Production ounces - 339,974 69,410 409,384
US$million
Revenue - spot - 103.1 20.3 123.4
Revenue - hedging - 13.8 (0.3) 13.5
- 116.9 20.0 136.9
Operating costs - (67.8) (10.1) (77.9)
Other costs (4.6) (6.4) (0.8) (7.2)
Refinancing and
restructuring costs (1.0) (1.0) - (1.0)
Royalties - (2.8) (0.6) (3.4)
EBITDA (5.6) 38.9 8.5 47.4
Depreciation and
amortisation (0.3) (20.0) (3.1) (23.1)
Operating profit
31.3.2002 (5.9) 18.9 5.4 24.3
Operating profit
31.3.2001 (5.5) 12.6 4.4 17.0
3 3
months months
to to
31 31
March March
3. Reconciliation of Total Costs 2003 2002
US$m US$m
Cash operating costs
Obuasi 27.0 26.5
Iduapriem 12.3 9.2
Bibiani 12.0 11.1
Siguiri 16.7 15.8
Freda-Rebecca 4.5 5.2
Geita (50%) 12.9 10.1
Total cash operating costs 85.4 77.9
Corporate administration costs 6.0 4.6
Exploration costs 0.7 1.0
Other costs 1.5 1.6
Royalties 4.0 3.4
Depreciation and amortisation 19.6 23.1
Exceptional costs - 1.0
Total costs 117.2 112.6
Hedging Commitments
The table below shows all forward and option positions that
Ashanti had as at 31 March 2003:
2003 2004 2005 2006
Forward Sales
(ounces) 628,997 657,992 648,996 538,000
(US$/ounce) 345 355 352 359
Calls:
Sold (ounces) 378,025 496,180 498,728 210,256
Sold (US$/ounce) 341 341 350 366
Bought (ounces) 127,950 101,880 134,000 49,432
Bought (US$/ounce) 348 359 352 370
Subtotal (ounces) 250,075 394,300 364,728 160,824
Summary:
Protected (ounces) 628,997 657,992 648,996 538,000
Committed (ounces) 879,072 1,052,292 1,013,724 698,824
Lease Rate Swap (ounces) 2,367,000 2,587,000 2,251,000 1,915,000
Deferred Hedging Income (US$m) 10 11
2007 2008 2009 2010
Forward Sales
(ounces) 451,200 358,325 413,450 383,450
(US$/ounce) 360 370 362 366
Calls:
Sold (ounces) 291,076 260,535 70,970 28,250
Sold (US$/ounce) 363 365 368 350
Bought (ounces) 125,396 - - -
Bought (US$/ounce) 370 - - -
Subtotal (ounces) 165,680 260,535 70,970 28,250
Summary:
Protected (ounces) 451,200 358,325 413,450 383,450
Committed (ounces) 616,880 618,860 484,420 411,700
Lease Rate Swap (ounces) 1,579,000 1,318,000 982,000 646,000
Deferred Hedging Income (US$m)
2011 2012 2013 Totals
Forward Sales
(ounces) 268,250 215,313 186,500 4,750,473
(US$/ounce) 367 374 365 359
Calls:
Sold (ounces) 84,250 77,188 28,000 2,423,458
Sold (US$/ounce) 384 387 401 355
Bought (ounces) - - - 538,658
Bought (US$/ounce) - - - 358
Subtotal (ounces) 84,250 77,188 28,000 1,884,800
Summary:
Protected (ounces) 268,250 215,313 186,500 4,750,473
Committed (ounces) 352,500 292,500 214,500 6,635,272
Total committed ounces as a
percentage of total forecast
production (excluding Geita
production for the period of
the project finance, 2003-2007) 50%
Lease Rate Swap (ounces) 310,000 130,000 -
Deferred Hedging Income (US$m) 21
Forward Sales: A total of 4.75 million ounces have been sold forward at an average price of US$359 per ounce. Call Options: Ashanti has sold 2.42 million ounces of call options at an average strike price of US$355 per ounce. As a partial offset, Ashanti has bought 0.54 million ounces of call options at an average strike price of US$358 per ounce. Gold Lease Rate Swaps: As of 31 March 2003, 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).
Volume Fixed Rate Description
(ozs)
Ashanti pays a quarterly floating rate and
receives a quarterly weighted average fixed
2,412,000 1.80% rate of 1.80%.
Ashanti pays a quarterly floating rate and
receives a fixed amount of dollars at maturity.
360,000 2.00% 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.
Total
2,772,000
Marked-to-market Marked-to-market An arrangement whereby the profits or losses on a futures contract are settled each day. valuations: On 31 March 2003, the portfolio had a negative marked-to-market value of US$93.2 million. This valuation was based on a spot price of US$336 and the then prevailing applicable US interest rates, gold forward rates, volatilities and guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. provided by the Risk Management Committee of the Board. The delta at that time was 5.5 million ounces. This implies that a US$1 increase in the price of gold would have a US$5.5 million negative impact (approximate) on the marked-to-market valuation of the hedge book. Movements in US interest rates, gold lease rates, volatilities and time will also have a sizeable impact on the marked-to-market. All these variables can change significantly over short time periods and can consequently materially affect the marked-to-market valuation. The approximate breakdown by type of the marked-to-market valuation at 31 March 2003 was as follows:
US$m
Forward contracts (32.7)
European Call options (net sold) (64.2)
Lease rate swaps 3.7
(93.2)
Geita Hedging
The table below shows Ashanti's portion of hedging commitments for
Geita as at 31 March 2003. This represents half of Geita's hedge
commitments.
2003 2004 2005
Forward Sales (ounces) 141,270 195,558 174,828
Forward Sales (US$/ounce) 286 289 294
Puts:
Bought (ounces) 18,715 25,586 24,350
Bought (US$/ounce) 291 291 291
Summary:
Protected (ounces) 159,985 221,144 199,178
Committed (ounces) 141,270 195,558 174,828
Lease Rate Swap 156,301 116,774 76,301
Geita Hedging (continued)
2006 2007 Total
Forward Sales (ounces) 94,576 120,938 727,170
Forward Sales (US$/ounce) 296 298 292
Puts:
Bought (ounces) 18,115 23,390 110,156
Bought (US$/ounce) 291 292 291
Summary:
Protected (ounces) 112,691 144,328 837,326
Committed (ounces) 94,576 120,938 727,170
Lease Rate Swap 41,420 - -
Marked-to-market valuation: On 31 March 2003, the Geita portfolio had a negative marked-to-market value of US$72.5 million (Ashanti's portion: negative US$36.25 million). This valuation was based on a spot price of US$336 per ounce and the then prevailing US interest rates, gold forward rates, volatilities and guidelines provided by the Risk Management Committee of the Board. 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 The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 1995 of the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, including but not limited to those related to future working capital, future production levels, operating costs and plans for diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. . Ashanti may also make written or oral forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. in its presentations, periodic reports and filings with the various regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities , in its annual report to shareholders, in its offering circulars Offering Circular An abbreviated prospectus for a new security listing. Delivered to individuals and brokerage houses, these documents are issued to arouse interest in the new issue. Notes: An offering circular allows investors to access information regarding a new issue. 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 marked-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 labour relations (US), labor relations npl → relations fpl dans l'entreprise labour relations labour npl → Beziehungen pl , general political risks, control by principal shareholders, Ghanaian statutory provisions, dividend flows and litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called 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 fea·si·ble adj. 1. Capable of being accomplished or brought about; possible: a feasible plan. See Synonyms at possible. 2. 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 there·from adv. From that place, time, or thing. Adv. 1. therefrom - from that circumstance or source; "atomic formulas and all compounds thence constructible"- W.V. 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 [Latin, Among other things.] A phrase used in Pleading to designate that a particular statute set out therein is only a part of the statute that is relevant to the facts of the lawsuit and not the entire statute. , 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. |
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