Ashanti Goldfields Company Limited Second Quarter Report 2003; Ashanti Set to Improve upon First Two Quarters' Operational Performance.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)--July 30, 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 ): Highlights -- Quarter's earnings of US$14.8 million including exceptional gain of US$7.0 million -- Total gold production of 370,978 ounces, 8% lower than last year -- Cash operating cost of US$222 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. , up US$30 per ounce on last year, but marginally mar·gin·al adj. 1. Of, relating to, located at, or constituting a margin, a border, or an edge: the marginal strip of beach; a marginal issue that had no bearing on the election results. 2. better than first quarter 2003 -- Rights to Mampon concession CONCESSION. A grant. This word is frequently used in this sense when applied to grants made by the French and Spanish governments in Louisiana. sold for US$9.5 million consideration -- Amounts drawn under the Revolving Credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. Facility reduced by US$10.0 million -- Continued encouraging results from exploration at Obuasi Obuasi (ōbwä`sē), town (1984 pop. 60,617), S central Ghana. Highly concentrated gold ore is mined, and there are gold-extraction plants. Gold was mined in Obuasi by indigenous peoples as early as the 17th cent. and Geita -- Group's safety record improved further during the quarter
3 months 3 months 6 months 6 months
to to to to
30 June 30 June 30 June 30 June
03 02 03 02
Financial (US$m)
Total turnover 128.3 141.2 257.2 278.1
Earnings before
exceptional items 7.8 18.8 14.6 36.3
Earnings after
exceptional items 14.8 (3.7) 21.6 12.8
Total operating profit
before exceptional items 13.6 27.2 25.3 52.5
Group EBITDA before
exceptional items 28.4 44.1 54.7 84.0
Total EBITDA before
exceptional items 33.0 53.2 64.3 101.6
Earnings per share before
exceptional items (US$) 0.06 0.17 0.11 0.32
Earnings per share after
exceptional items (US$) 0.12 (0.03) 0.17 0.11
Gold Production (ounces)
Total 370,978 403,734 751,907 813,118
Attributable 352,795 385,907 716,135 777,743
Gold Price (US$ per ounce)
Realised by Ashanti 346 350 342 342
Spot price 349 315 350 304
Production Costs (US$ per ounce)
Cash operating costs 222 192 223 191
Royalties 11 9 11 9
Depreciation and amortisation 51 63 51 60
Total 284 264 285 260
Overview Total gold production in the second quarter was 370,978 ounces, 8% lower than the 403,734 ounces recorded in the second quarter of last year but in line with the previously announced lower production profile for the first half of 2003. Having successfully replaced the damaged mill pinion pinion rear section of a bird's wing; holds the flight feathers. at Obuasi, substantially completed the waste stripping in Nyankanga at Geita, and with the progress made on the plant expansion at Iduapriem, Ashanti believes it has laid the foundation to improve upon its first two quarters' operational performance. Cash operating costs operating costs npl → gastos mpl operacionales for the Group rose from US$192 to US$222 per ounce mainly as a result of lower gold production, the impact of increased wages and fuel prices, higher costs of other inputs and increased costs associated with the Nyankanga pit cut back at Geita. During the quarter, Ashanti completed the sale of its rights in the Mampon concession to Golden Star Resources Limited for US$9.5 million consideration. Ashanti's earnings (including an exceptional gain of US$7.0 million after tax of US$0.8 million arising from the sale of the Mampon property) were US$14.8 million. Earnings, excluding the exceptional gain and related tax, were US$7.8 million, down US$11.0 million on the corresponding period last year, but up US$1.0 million on the previous quarter. The reduction in earnings compared with last year was mainly in line with the previously announced lower production profile for the first half of 2003 and higher cash operating costs, offset partially by higher spot prices. Earnings per share before exceptional items for the quarter were US$0.06 (2002: US$0.17) and after exceptional items were US$0.12 (2002: loss US$0.03). During the quarter, Ashanti repaid US$10.0 million towards its Revolving Credit Facility reducing the amounts drawn under the facility from US$149.0 million to US$139.0 million. On the safety front, the Group maintained its strong safety standard with the Group's Lost Time Injury Frequency Rate (LTIFR LTIFR Lost Time Injury Frequency Rate ) of 0.24 injuries per 200,000 hours worked as compared to 0.38 for the corresponding period in 2002. Underground exploration at Obuasi continued to yield encouraging results both above and below 50 level. On 41 level, the three intersections from the 252 cross cut near the 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. returned 11.5 g/t over 8.2 metres, 11.2 g/t over 27.3 metres and 7.5 g/t over 15.38 metres. On 58 level, two intersections from 155 and 206 cross cuts yielded 41.9 g/t over 3.1 metres and 26.9 g/t over 6.6 metres respectively. At Geita, exploration drilling continued to yield good results at Nyankanga West and Geita Hill. Ashanti has been advised by the Government of 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. (the "Government") that it has appointed ap·point tr.v. ap·point·ed, ap·point·ing, ap·points 1. To select or designate to fill an office or a position: appointed her the chief operating officer of the company. 2. a consortium led by Societe-Generale to act as advisers to the Government as a shareholder, holder of the golden share in Ashanti and as a regulator regulator, n the mechanical part of a gas delivery system that controls gas pressure that allows a manageable flow of drug vapor to escape. regulator see reducing valve. of the mining industry in Ghana, and to assist the Government in arriving at a decision on the proposed merger 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. . Operations Review Ghana Obuasi Obuasi's gold production for the quarter was 125,447 ounces approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 10,000 ounces short of its annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. target, but 5,396 ounces above the 120,051 ounces achieved in the second quarter of 2002. 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 production was due to the lower than planned feed grade, 6.92 g/t compared to the target of 7.40 g/t, and low milled 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. 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$202 per ounce, the cash operating cost for the quarter was marginally below the US$205 per ounce achieved in the second quarter last year. Mining. Underground production of 600,000 tonnes was lower than the 609,000 tonnes reported in the second quarter of 2002 while the head grade at 7.26 g/t is a decrease on the 7.45 g/t reported for the same period last year. The decrease in mined grades reflects the higher proportion of the total mined tonnage now arising from the lower grade ore ore, metal-bearing mineral mass that can be profitably mined. Nearly all rock deposits contain some metallic minerals, but in many cases the concentration of metal is too low to justify mining the ore. blocks where bulk mining open stoping methods are being applied. Underground infrastructure. In June June: see month. , the development crews working on 50 level at the BSVS were 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 the 51 level loading box excavation excavation In archaeology, the exposure, recording, and recovery of buried material remains. The techniques employed vary by the type of site, but all forms of archaeological excavation require great skill and careful preparation. section of the shaft to complete excavation of the chamber ahead of civils work and shaft 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. Surface. A total of 152,000 tonnes grading 2.11 g/t was mined from the Homase, Kunka kunka caseous granules found in granulomatous lesions of habronemiasis. and T3 open pits during the quarter, compared with 29,000 tonnes at 2.48 g/t for the corresponding period in 2002. 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 582,000 tonnes, the same as that for the corresponding period of last year whilst the head grade increased to 6.92 g/t from 6.88 g/t. and recovery decreased to 83.2% from 84.6%. Gold production at STP was 107,710 ounces compared to 109,006 ounces in the second quarter of 2002. Production tonnage was affected by a damaged mill pinion 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 throughput rate Throughput rate is an obsolete term[1] in the terminology of automated chemical analysis. It may mean either:
1. ^ International Union of Pure and Applied Chemistry. "throughput rate". . The mill pinion was 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. Gold production at 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 ) was 7,050 ounces whilst the 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. Treatment Plant produced 10,687 ounces in the quarter compared to 11,024 ounces for the corresponding period in 2002. Exploration. Underground exploration yielded good results both above and below 50 level. On 41 level, three intersections from the 252 crosscut in the vicinity of the BSVS returned 11.5 g/t over 8.2 metres, 11.2 g/t over 27.3 metres and 7.5 g/t over 15.38 metres; on 58 level, intersections of 41.9 g/t over 3.1 metres and 26.9 g/t over 6.6 metres were returned at the 155 and 206 crosscut positions respectively which are located near to the KMS KMS - Knowledge Management System section. Development was completed in the 19 south crosscut on 50 level which is located close to the Adansi Adansi is the name of two sub-national districts in Ghana - Adansi East and Adansi West. Adansi East has a population of 129,325 and area of 1,380 square kilometres. The capital is New Edubiase. Adansi West has a population of 235,680, and area 828 square kilometres. Its capital is Obuasi. shaft and a diamond drill rig will be relocated there in July July: see month. to commence testing the deeper levels in the north section of the mine. Iduapriem/Teberebie Second quarter gold production at Iduapriem was 57,090 ounces compared with 39,769 ounces produced in the second quarter last year when there was a fire in the elution elution /elu·tion/ (e-loo´shun) in chemistry, separation of material by washing; the process of pulverizing substances and mixing them with water in order to separate the heavier constituents, which settle out in solution, from the section of the plant. In June, 19,484 ounces were produced from the expanded 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. At the end of the quarter, most of the outstanding commissioning works on the expanded CIL plant were complete and the new and old circuits within the plant were largely integrated and performing to design specification. The first phase of 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 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. section of the upgrade was commissioned during the second quarter and work is ongoing to commission the second phase. The cash operating costs were US$225 per ounce compared to US$226 per ounce for the corresponding quarter last year. Cash operating costs should decrease once the second phase of the conveyor/crusher component of the project is completed eliminating the high interim ore re-handle costs. Relative to the same quarter last year, gold production from the 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. operation reduced from 8,559 ounces to 4,929 ounces because of lower recovery associated with harder feed material and lower tonnage throughput. Bibiani Bibiani is a town in Ghana. It is the capital of Bibiani Anhwiaso Bekwai district. Bibiani produced 52,867 ounces of gold from processing 623,000 tonnes of ore at 3.41 g/t. 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 was 77.4% and the cash operating cost was US$208 per ounce. Production for the corresponding period in 2002 was 61,219 ounces from 634,000 tonnes at 3.72 g/t and a metallurgical recovery of 80.8%, at US$183 per ounce. The lower tonnage, grade and metallurgical recovery resulted in the lower gold production. The increase in the cash operating cost reflects the lower gold production and the increased depth of the pit. Further progress was made on the underground decline and development to access the old levels below the final pit elevation elevation, vertical distance from a datum plane, usually mean sea level to a point above the earth. Often used synonymously with altitude, elevation is the height on the earth's surface and altitude, the height in space above the surface. was on schedule. The third deep exploration hole, drilled to a depth of 1,254 metres intersected mineralisation returning 4.9 g/t over 8.0 metres (including 13.2 g/t over 2.1 metres). A secondary deflection deflection /de·flec·tion/ (de-flek´shun) deviation or movement from a straight line or given course, such as from the baseline in electrocardiography. de·flec·tion n. 1. from the same hole intersected the shear shear: see strength of materials. Shear A straining action wherein applied forces produce a sliding or skewing type of deformation. zone at the predicted point returning 8.0 g/t over 1.3 metres. During the quarter, work commenced on removing the flotation flotation or froth flotation Most widely used process for extracting many minerals from their ores. The method separates and concentrates ores by altering their surfaces so that they are either repelled or attracted by water. plant and regrind mill from Obuasi and installing and re-commissioning this plant at Bibiani in the fourth quarter 2003. This is expected to improve recovery to approximately 85%. 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 64,130 ounces compared to 79,077 ounces achieved in the second 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 2.56 million tonnes from 2.47 million tonnes whilst the feed grade declined to 1.15 g/t from 1.18 g/t. The reduction in production was due to increased gold in process as the higher-grade ore was stacked towards the end of the quarter as well as the lower than planned feed grades and stacked tonnage in the first quarter. The cash operating cost for the quarter was US$274 per ounce compared to US$185 per ounce for the same period last year reflecting the lower production, an increased rate of cement cement, binding material used in construction and engineering, often called hydraulic cement, typically made by heating a mixture of limestone and clay until it almost fuses and then grinding it to a fine powder. consumption to cater for a higher SAP sap, fluid in plants consisting of water and dissolved substances. Cell sap refers to this fluid present in the large vacuole, or cell cavity, that occupies most of the central portion of mature plant cells. to CAP ore blend “Blending” redirects here. For alpha blending, see Alpha compositing. In linguistics, a blend is a word formed from parts of two other words. These parts are sometimes, but not always, morphemes. and increased fuel prices. The feasibility fea·si·ble adj. 1. Capable of being accomplished or brought about; possible: a feasible plan. See Synonyms at possible. 2. of the 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 expansion project is under review following recent difficulties with and termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of the construction contract. Discussions are currently underway with potential replacement contractors. Expenditure to date of approximately US$7.2 million continues to be capitalised pending the outcome of the project review. 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 9,560 ounces compared with 27,214 ounces in the second quarter of 2002. This was principally due to a shortfall in higher grade underground ore production resulting from low availability of loaders, haul trucks and blasthole drill rigs caused by a shortage of critical component spares. Mill throughput in the second quarter was 304,000 tonnes at 1.46 g/t compared to 287,000 tonnes at 3.48 g/t for the corresponding period in 2002. Metallurgical recovery was impacted by the low grades and frequent mill shut downs due to power interruptions and recovery decreased to 66.9% from the 86.9% achieved in the second quarter of 2002. Management continues to negotiate with the Central Bank and suppliers to secure foreign exchange and an adequate supply of spare parts Spare parts, also referred to as Service Parts is a term used to indicate extra parts available and in proximity to the mechanical item, such as a automobile, boat, engine, for which they might be used. Spare parts are also called “spares. in order to effect the production recovery plan. 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 123,767 ounces compared with 152,809 ounces produced in the second quarter of 2002. Plant feed for the quarter was 1.49 million tonnes at 2.82 g/t compared to 1.24 million tonnes at 4.10 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 and at the end of June, the mining face had reached the splays in the higher grade mineralised zone. By the middle of August the main high-grade High-grade Credit quality of AAA or AA. high-grade Of, relating to, or being a bond with little risk of default on the part of the issuer. High-grade is usually reserved for bonds rated AAA or AA by the rating services. zone should be exposed and third quarter gold production is therefore forecast to increase significantly. Cash operating costs rose to US$214 per ounce from US$156 per ounce in the corresponding second quarter as a result of the lower gold production and the increase in strip ratio, reflecting the cut back required for the enlarged optimised pit.
Summary of production and cash
operating costs per ounce
Iduapriem/
Obuasi Teberebie Bibiani Siguiri
3 months to 30 June 2003
Production (ounces) 125,447 57,090 52,867 64,130
Cost per ounce (US$) 202 225 208 274
3 months to 30 June 2002
Production (ounces) 120,051 39,769 61,219 79,077
Cost per ounce (US$) 205 226 183 185
6 months to 30 June 2003
Production (ounces) 257,365 104,336 104,138 134,141
Cost per ounce (US$) 203 241 221 256
6 months to 30 June 2002
Production (ounces) 260,147 87,613 121,025 148,219
Cost per ounce (US$) 196 208 184 205
Freda- Total/
Rebecca Geita Average
3 months to 30 June 2003
Production (ounces) 9,560 61,884 370,978
Cost per ounce (US$) 262 214 222
3 months to 30 June 2002
Production (ounces) 27,214 76,404 403,734
Cost per ounce (US$) 224 156 192
6 months to 30 June 2003
Production (ounces) 26,505 125,422 751,907
Cost per ounce (US$) 264 208 223
6 months to 30 June 2002
Production (ounces) 50,300 145,814 813,118
Cost per ounce (US$) 225 151 191
Exploration East Africa Tanzania Geita During the quarter, exploration drilling continued at Nyankanga West and East and at Geita Hill. At Nyankanga West, positive results were reported from preliminary drilling undertaken to follow up on the earlier drilled high grade 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. reported from hole NYDD0097 (15 metres grading 20.16 g/t). Better follow up results included intersections of 5 metres grading 34.39 g/t from 179 metres in hole NYDD136; 23 metres @ 5.21 g/t from 113 metres in hole NYDD0138; and 18 metres @ 2.39 g/t from 136 metres in hole NYDD0139. This drilling confirms the presence of a relatively shallow This article or section may contain original research or unverified claims. Please help Wikipedia by adding references. See the for details. This article has been tagged since October 2007. Shallow means not very deep. (less than 200 metres), moderate to high grade zone of mineralisation immediately west of the currently designed Nyankanga pit margin. Additional follow up holes have been planned for the third quarter to further define the geometry geometry [Gr.,=earth measuring], branch of mathematics concerned with the properties of and relationships between points, lines, planes, and figures and with generalizations of these concepts. and extent of the mineralisation after which a preliminary resource estimation estimation In mathematics, use of a function or formula to derive a solution or make a prediction. Unlike approximation, it has precise connotations. In statistics, for example, it connotes the careful selection and testing of a function called an estimator. will be undertaken. Core drilling at Geita Hill continues to produce positive results. Continuity of mineralisation between the Geita Main and North East Extension deposits was proved with better intersections of 9 metres grading 3.4g/t from 216 metres in hole GHDD GHDD Ghosal Hematodiaphyseal Dysplasia 0114; 22 metres @ 2.1g/t from 273 metres in hole GHDD0115; and 18 metres @ 2.8g/t from 244 metres in hole GHDD0116. 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 results 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 are currently being followed up. D.R. Congo Congo, river, Africa Congo (kŏng`gō) or Zaïre (zī`ēr, zäēr`), great river of equatorial Africa, c. Ashanti considers the recent stationing of French troops in Bunia under the auspices aus·pi·ces 1 n. Plural of auspex. auspices Noun, pl under the auspices of with the support and approval of [Latin auspicium augury from birds] Noun of the United Nations as a positive step in the quest for Verb 1. quest for - go in search of or hunt for; "pursue a hobby" quest after, go after, pursue look for, search, seek - try to locate or discover, or try to establish the existence of; "The police are searching for clues"; "They are searching for the peace and stability in the general area. 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. Guinea At Siguiri, exploration drilling concentrated on the SEK SEK In currencies, this is the abbreviation for the Swedish Krona. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. area (the general 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) and 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 . Mali 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 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. results from the M'pebougoula and 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 Authorisations were disappointing with no anomalous a·nom·a·lous adj. 1. Deviating from the normal or common order, form, or rule. 2. Equivocal, as in classification or nature. areas for further follow up being defined. Sierra Leone Sierra Leone (sēĕr`ə lēō`nē, lēōn`; sēr`ə lēōn), officially Republic of Sierra Leone, republic (2005 est. pop. 6,018,000), 27,699 sq mi (71,740 sq km), W Africa. A low entry option agreement was signed with respect to AFCAN's Nimini Hills project in eastern Sierra Leone whereby Ashanti can earn a 80% equity interest. The area of interest is centred on a significant two square kilometre Square kilometre (U.S. spelling: square kilometer), symbol km², is a decimal multiple of the SI unit of surface area, the square metre, one of the SI derived units. 1 km² is equal to:
adj. Variant of Archean. Archaean Another spelling of Archean. Adj. 1. banded ironstone ironstone a natural ore which may contain significant amounts of fluorine and cause fluorosis in cattle grazing pastures in the vicinity of a factory which calcines the ore. formations. Initial fieldwork field·work n. 1. A temporary military fortification erected in the field. 2. Work done or firsthand observations made in the field as opposed to that done or observed in a controlled environment. 3. is being focused on verifying ver·i·fy tr.v. ver·i·fied, ver·i·fy·ing, ver·i·fies 1. To prove the truth of by presentation of evidence or testimony; substantiate. 2. this geochemical anomaly. Ghana In Ghana, stream and soil sampling and trenching continued on the Sefwi Asafo, Sefwi Sui, Sefwi Boako and Subriso prospecting licences. Shallow reverse circulation drilling commenced on the Subriso concession, 50 kilometres north of Bibiani at the end of the quarter. Cote d'Ivoire It is understood that during the second quarter, progress was made towards resolving the political and security situation in Cote d'Ivoire. It is expected that exploration field work will recommence Re`com`mence´ v. i. 1. To commence or begin again. 2. To begin anew to be; to act again as. He seems desirous enough of recommencing courtier. - Johnson. v. t. 1. To commence again or anew. during the second half of the year.
Gold Production Summary
3 months 3 months 6 months 6 months
to to to to
30 June 30 June 30 June 30 June
2003 2002 2003 2002
Obuasi
Underground Mining
Ore production (000 tonnes) 600 609 1,183 1,199
Ore grade (g/t) 7.26 7.45 7.60 7.47
Surface Mining (Homase)
Ore production (000 tonnes) 152 29 324 29
Ore grade (g/t) 2.11 2.48 2.39 2.48
Waste mined (000 tonnes) 430 72 1,303 72
Strip ratio 2.8 2.5 4.0 2.5
Sulphide Treatment Plant
Ore processed (000 tonnes) 582 582 1,162 1,165
Head grade (g/t) 6.92 6.88 6.95 7.44
Recovery (%) 83.2 84.6 83.9 85.9
Gold produced (ounces) 107,710 109,006 217,945 239,432
Pompora Treatment Plant
Ore processed (000 tonnes) - - - -
Head grade (g/t) - - - -
Recovery (%) - - - -
Gold produced (ounces) - 21 - 195
Oxide Treatment Plant
Ore processed (000 tonnes) 162 - 390 -
Head grade (g/t) 1.90 - 1.84 -
Recovery (%) 71.2 - 78.2 -
Gold produced (ounces) 7,050 - 18,047 -
Tailings Treatment Plant
Ore processed (000 tonnes) 452 433 952 873
Head grade (g/t) 2.30 2.38 2.22 2.31
Recovery (%) 32.0 33.2 31.5 31.7
Gold produced (ounces) 10,687 11,024 21,373 20,520
Obuasi Total Processed
Ore processed (000 tonnes) 1,197 1,015 2,505 2,038
Head grade (g/t) 4.49 4.96 4.35 5.24
Recovery (%) 72.6 74.0 73.6 75.8
Total gold produced (ounces) 125,447 120,051 257,365 260,147
Obuasi Production Distribution
Obuasi underground (ounces) 107,710 109,027 217,945 239,627
Obuasi surface (ounces) 7,050 - 18,047 -
Obuasi tailings (ounces) 10,687 11,024 21,373 20,520
Obuasi total (ounces) 125,447 120,051 257,365 260,147
Iduapriem
Mining
Ore production (000 tonnes) 956 1,161 1,843 2,101
Ore grade (g/t) 1.87 1.63 1.81 1.62
Waste mined (000 tonnes) 3,994 4,062 7,469 8,260
Strip ratio 4.2 3.5 4.1 3.9
CIL Plant
Ore processed (000 tonnes) 911 642 1,755 1,298
Head grade (g/t) 1.97 1.85 1.84 1.93
Recovery (%) 90.4 81.6 89.5 91.1
Gold produced (ounces) 52,161 31,210 92,948 69,501
Heap Leach (Iduapriem/Teberebie)
Ore stacked (000 tonnes) 271 306 578 805
Head grade (g/t) 1.55 1.09 1.33 1.09
Recovery (%) 36.5 79.8 46.1 64.2
Gold produced 4,929 8,559 11,388 18,112
Iduapriem total (ounces) 57,090 39,769 104,336 87,613
Gold Production Summary
3 months 3 months 6 months 6 months
to to to to
30 June 30 June 30 June 30 June
2003 2002 2003 2002
Bibiani
Mining
Ore production (000 tonnes) 859 707 1,520 1,051
Ore grade (g/t) 3.13 3.85 3.51 3.68
Waste mined (000 tonnes) 1,288 3,000 3,416 6,003
Strip ratio 1.5 4.2 2.2 5.7
CIL Plant
Ore processed (000 tonnes) 623 634 1,234 1,211
Head grade (g/t) 3.41 3.72 3.38 3.60
Recovery (%) 77.4 80.8 77.7 81.9
Gold produced (ounces) 52,867 61,219 104,138 121,025
Siguiri
Mining
Ore production (000 tonnes) 2,325 2,483 4,859 4,396
Ore grade (g/t) 1.17 1.21 1.16 1.22
Waste mined (000 tonnes) 1,392 1,788 3,669 4,018
Strip ratio 0.6 0.7 0.8 0.9
Heap Leach
Ore stacked (000 tonnes) 2,554 2,465 5,030 4,855
Head grade (g/t) 1.15 1.18 1.11 1.17
Recovery (%) 68.2 84.8 74.7 81.2
Gold produced (ounces) 64,130 79,077 134,141 148,219
Freda-Rebecca
Underground Mining
Ore production (000 tonnes) 98 285 268 548
Ore grade (g/t) 2.55 2.96 2.57 3.09
Surface Mining
Ore production (000 tonnes) 24 66 42 110
Ore grade (g/t) 1.91 2.61 1.86 2.52
Processing
Ore processed (000 tonnes) 304 287 648 570
Head grade (g/t) 1.46 3.48 1.17 3.33
Recovery (%) 66.9 86.9 74.4 84.2
Gold produced (ounces) 9,560 27,214 26,505 50,300
Geita
Surface Mining
Ore mined (000 tonnes) 1,316 1,023 2,353 2,839
Grade (g/t) 2.88 3.63 2.94 3.49
Waste mined (000 tonnes) 15,697 9,684 28,160 15,234
Strip ratio 11.0 9.5 12.2 5.4
Processing
CIL Plant
Ore processed (000 tonnes) 1,493 1,240 2,890 2,438
Head grade (g/t) 2.82 4.10 2.95 4.00
Recovery (%) 91.5 93.3 91.5 92.3
Gold produced (ounces) 123,767 152,809 250,844 291,628
Ashanti's 50% share (ounces) 61,884 76,404 125,422 145,814
Group Summary
Managed gold production (ounces) 309,094 327,330 626,485 667,304
Geita JV 50% 61,884 76,404 125,422 145,814
Sub-total 370,978 403,734 751,907 813,118
Less minority interests 18,183 17,827 35,772 35,375
Group Attributable Total (ounces) 352,795 385,907 716,135 777,743
Financial Review Earnings Ashanti's earnings for the second quarter were US$14.8 million. This included an exceptional gain after tax of US$7.0 million, arising from the sale of the Mampon property. Earnings for the second quarter (excluding the exceptional gain and related tax) were US$7.8 million, down US$11.0 million on the corresponding period last year, but up US$1.0 million on the previous quarter. The reduction in earnings compared to last year is as a result of the previously announced lower production profile for the first half of 2003 and higher cash operating costs, offset partially by higher spot prices. Earnings per share before exceptional items for the second quarter were US$0.06 (2002: US$0.17) and after exceptional items US$0.12 (2002: loss US$0.03). Earnings before exceptional items for the six months to 30 June 2003 were US$14.6 million compared to US$36.3 million in 2002. Earnings after exceptional items of US$7.0 million were US$21.6 million (2002: US$12.8 million). Revenue Total spot revenue for the quarter was US$129.4 million, equivalent to US$349 per ounce (2002: US$315 per ounce). Total hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. income for the quarter was negative US$1.1 million, comprising US$3.2 million of deferred hedging income and US$4.3 million of net cash payments in respect of maturing hedge contracts for both the Ashanti and Geita hedge books. Total realised price for the quarter was US$346 per ounce (2002: US$350 per ounce). Based on year to date total revenue of US$257.2 million (2002: US$278.1 million) the realised gold price equates to US$342 per ounce (2002: US$342 per ounce). Hedging At 30 June 2003 Ashanti had 4.5 million ounces protected at an average price of US$360 per ounce, with commitments of 6.4 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 Ashanti hedge book at 30 June 2003 was negative US$108 million based on a spot price of US$346 per ounce. Ashanti's 50% share of Geita's hedge book was negative US$39 million. Cash Operating Costs Total cash operating costs for the second quarter were US$222 per ounce, up US$30 per ounce on last year and similar to the previous quarter. Costs, as in the first quarter, were mainly impacted by lower production, increased wages and fuel prices, higher costs of other inputs, increased costs associated with the Nyankanga pit cut-back at Geita and higher ore rehandling at Iduapriem. Profit Total 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. before exceptional items for the quarter was US$13.6 million (2002: US$27.2 million). Non-mine site exploration expenditure written off in the second quarter was US$0.9 million bringing year to date to US$1.6 million. Corporate administration expenditure for the quarter was US$6.3 million and year to date US$12.3million. Interest charge for the quarter of US$4.6 million was US$1.7 million lower than last year following the refinancing Refinancing An extension and/or increase in amount of existing debt. in June 2002 and lower interest rates. Exceptional Item In June 2003 Ashanti sold its interest in the Mampon property near Obuasi to Bogoso Gold Limited and Golden Star Resources Limited for a cash consideration of US$9.5 million resulting in a profit on sale before taxes of US$7.8 million. Tax The tax charge for the quarter was US$1.8 million and comprised US$0.8 million tax on the sale of the Mampon property, US$0.8 million in respect of Geita's profits subject to United Kingdom tax and other tax of US$0.2 million. 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 for the quarter was US$15.3million (2002: US$21.8 million) and US$32.1 million for the year to date (2002: US$45.0 million). Net interest payments in the quarter were US$2.2 million compared to US$5.1 million last year, which included the final interest payment on the exchangeable notes. Capital expenditure for the quarter of US$20.5 million (2002: US$15.7 million) included US$8.6 million at Obuasi, US$4.3 million at Iduapriem and US$5.9 million at Siguiri. In May, US$6.6 million was raised from the exercise of a further 2.18 million warrants. As a result the stated capital stated capital See legal capital. increased to 130.8 million shares (31 December December: see month. 2002: 127.5 million shares) and 2.5 million warrants remain outstanding. During the quarter, Ashanti paid down US$10.0 million of its Revolving Credit Facility, reducing the amounts drawn to US$139.0 million. At the quarter end, the Group's gross debt level (excluding the 50% share of the non-recourse Geita project finance loan) was lower at US$245.7 million (31 March 2003:US$255.9 million) analysed as follows:
US$m
US$200 million Revolving Credit Facility ("RCF") 139.0
Iduapriem/Teberebie project finance loans 22.1
Other loans (net of deferred loan fees) 9.6
170.7
Mandatorily Exchangeable Notes ("MENs") 75.0
Ashanti Group's gross debt as at 30 June 2003 245.7
Other Matters Ashanti has been advised by the Government of Ghana (the "Government") that it has appointed a consortium led by Societe-Generale, to act as financial advisers to the Government as a shareholder, holder of the golden share in Ashanti and as a regulator of the mining industry in Ghana, and to assist the Government in arriving at a decision on the proposed merger of Ashanti and AngloGold. In Zimbabwe, Temple Assets (Private) Limited has been appointed as the 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. , in replacement of Deloitte & Touche Executor executor n. the person appointed to administer the estate of a person who has died leaving a will which nominates that person. Unless there is a valid objection, the judge will appoint the person named in the will to be executor. & Trust Company (Private) Limited, to hold the Ashanti ordinary shares on behalf of holders of the Zimbabwe Depositary Receipts depositary receipt A negotiable certificate that represents a company's publicly traded debt or equity. Depositary receipts are created when a company's shares or bonds are delivered to a depositary's custodian bank, which instructs the depositary to issue . This change took effect from 1 June 2003. Independent Review Report to Ashanti Goldfields Company Limited Introduction We have been instructed by the company to review the financial information for the six months ended 30 June 2003 which comprises the profit and loss account, the balance sheets, the cash flow statement and related notes 1 to 3 and we have read the other information contained in the second quarter report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report is made solely to the company in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Bulletin 1999/4 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose.To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the company, for our review work, for this report, or for the conclusions we have formed. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the United Kingdom Financial Services Authority The Financial Services Authority ("FSA") is an independent non-departmental public body and quasi-judicial body that regulates the financial services industry in the United Kingdom. Its main office is based in Canary Wharf, London, with another office in Edinburgh. which requires that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). . Review work performed We conducted our review in accordance with guidance contained in United Kingdom Bulletin 1999/4 issued by the United Kingdom Auditing Practices Board. A review consists principally of making enquiries of group management and applying analytical procedures Analytical Procedures is one of financial audit skill which help an auditor understand the client's business and changes in the business, to identify potential risk areas and to plan other audit procedures. to the financial information and underlying financial data and based thereon there·on adv. 1. On or upon this, that, or it. 2. Archaic Following that immediately; thereupon. Adv. 1. thereon - on that; "text and commentary thereon" on it, on that , assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification See verify. verification - The process of determining whether or not the products of a given phase in the life-cycle fulfil a set of established requirements. of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 June 2003. Deloitte &Touche - Accra Chartered Accountants char·tered accountant n. Chiefly British Abbr. CA A member of one of the institutes of accountants granted a royal charter. 29 July 2003
Group Profit and Loss Account
Unaudited
3 months 3 months
to to
30 June 30 June
2003 2002
Interest
in joint
Group venture Total Group
Note US$m US$m US$m US$m
Turnover 2 109.0 19.3 128.3 118.7
Cash operating costs 2 (69.2) (13.2) (82.4) (65.5)
Other costs (8.1) (0.9) (9.0) (6.1)
Exceptional costs - - - (22.5)
Royalties (3.3) (0.6) (3.9) (3.0)
Depreciation and
amortisation (17.2) (2.2) (19.4) (22.8)
Total costs (97.8) (16.9)(114.7)(119.9)
Operating profit/(loss) 2 11.2 2.4 13.6 (1.2)
Share of operating profit of
joint venture 2.4 5.9
Total operating profit 13.6 4.7
Exceptional profit on sale of investment 7.8 -
Profit before interest and taxation 21.4 4.7
Net interest payable:
group (3.4) (5.2)
joint venture (1.2) (1.1)
Profit/(loss) before taxation 16.8 (1.6)
Tax:
group (1.0) (2.1)
joint venture (0.8) -
Profit/(loss)after taxation 15.0 (3.7)
Minority interests (0.2) -
Profit/(loss)attributable to shareholders 14.8 (3.7)
Dividends - -
Retained profit/(loss) for the period 14.8 (3.7)
Earnings per share (US$):
before exceptionals 0.06 0.17
after exceptionals 0.12 (0.03)
Group Profit and Loss Account
Unaudited
6 months 6 months
to to
30 June 30 June
2003 2002
Interest
in joint
Group venture Total Group
US$m US$m US$m US$m
Turnover 218.6 38.6 257.2 235.6
Cash operating costs (141.7) (26.1)(167.8)(133.3)
Other costs (15.5) (1.7) (17.2) (12.5)
Exceptional costs - - - (23.5)
Royalties (6.7) (1.2) (7.9) (5.8)
Depreciation and amortisation (34.5) (4.5) (39.0) (42.8)
Total costs (198.4) (33.5)(231.9)(217.9)
Operating profit/(loss) 20.2 5.1 25.3 17.7
Share of operating profit of
joint venture 5.1 11.3
Total operating profit 25.3 29.0
Exceptional profit on sale of investment 7.8 -
Profit before interest and taxation 33.1 29.0
Net interest payable:
group (7.0) (10.1)
joint venture (2.3) (2.2)
Profit/(loss) before taxation 23.8 16.7
Tax:
group (1.0) (3.9)
joint venture (0.8) -
Profit/(loss)after taxation 22.0 12.8
Minority interests (0.4) -
Profit/(loss)attributable to shareholders 21.6 12.8
Dividends - -
Retained profit/(loss) for the period 21.6 12.8
Earnings per share (US$):
before exceptionals 0.11 0.32
after exceptionals 0.17 0.11
Group Balance Sheet
Unaudited
As at As at
As at 30 30 June 31 Dec
June 2002 2002
2003
Interest
in joint
Group venture Total Group Group
US$m US$m US$m US$m US$m
Fixed assets
Intangible assets 16.0 53.3 69.3 18.0 17.3
Tangible assets 607.0 109.0 716.0 601.0 602.7
Investments
- Geita joint venture 93.2 (93.2) - 90.8 91.2
- Loans to joint venture and other
investments 31.1 - 31.1 32.6 32.6
747.3 816.4 742.4 743.8
Current assets
Stocks 72.9 10.2 83.1 72.9 76.6
Debtors due within one year 9.3 17.1 26.4 20.9 14.0
Debtors due after more than one
year 12.5 - 12.5 - 8.8
Cash 39.2 8.6 47.8 78.5 41.3
133.9 35.9 169.8 172.3 140.7
Creditors: amounts falling due
within one year
Creditors (116.5) (15.8)(132.3)(148.3)(131.1)
Borrowings (7.8) (10.8) (18.6) (12.9) (2.7)
(124.3) (26.6)(150.9)(161.2)(133.8)
Net current assets 9.6 9.3 18.9 11.1 6.9
Total assets less current
liabilities 756.9 835.3 753.5 750.7
Creditors: amounts falling due
after more than one year
Creditors (15.0) (39.9) (54.9) (47.4) (24.0)
Borrowings (237.9) (35.2)(273.1)(291.0)(254.2)
Provisions for liabilities and
charges (24.3) (3.3) (27.6) (20.2) (25.0)
479.7 479.7 394.9 447.5
Capital and reserves
Stated capital 598.4 587.0 588.2
Reserves (120.3) (194.1)(141.9)
Equity shareholders' funds 478.1 392.9 446.3
Equity minority interests 1.6 2.0 1.2
479.7 394.9 447.5
The financial information for the second quarter and six months ended
30 June 2003 were approved by the Board of directors on 29 July 2003
and signed on its behalf by:
S E Jonah S Venkatakrishnan
Director Director
Group Cash Flow Statement
Unaudited
3 months 3 months 6 months 6 months
to to to to
30 June 30 June 30 June 30 June
2003 2002 2003 2002
US$m US$m US$m US$m
Cash inflow from operating
activities 15.3 21.8 32.1 45.0
Returns on investments and
servicing of finance
Interest received 0.2 0.2 0.3 0.3
Interest paid (2.4) (5.3) (4.9) (13.4)
Net cash outflow from returns on
investments and service
of finance (2.2) (5.1) (4.6) (13.1)
Taxation
Corporate tax paid - (1.1) - (1.7)
Capital expenditure and financial
investments
Purchase of tangible fixed assets (20.5) (15.7) (37.6) (30.6)
Sale of investment 9.5 - 9.5 -
Net cash outflow from capital
expenditure and
financial investment (11.0) (15.7) (28.1) (30.6)
Cash inflow/(outflow) before use
of liquid resources and financing 2.1 (0.1) (0.6) (0.4)
Management of liquid resources 2.5 4.9 8.5 11.6
Cash inflow before financing 4.6 4.8 7.9 11.2
Financing
Loans drawn down - 265.0 - 265.0
Loan repayments (11.4) (270.8) (12.3) (280.4)
Issue of shares 6.6 41.8 10.2 41.8
Net cash (outflow)/inflow
from financing (4.8) 36.0 (2.1) 26.4
(Decrease)/increase in cash (0.2) 40.8 5.8 37.6
Reconciliation of net cash flow to
movement in net debt
(Decrease)/increase in cash (0.2) 40.8 5.8 37.6
Decrease in liquid resources (2.5) (4.9) (8.5) (11.6)
(2.7) 35.9 (2.7) 26.0
Cash outflow from decrease in debt 11.4 5.8 12.3 15.4
Other (0.2) 4.1 (0.5) 3.9
Movement in net debt 8.5 45.8 9.1 45.3
Net debt at beginning of period (215.0) (271.2) (215.6) (270.7)
Net debt at end of period (206.5) (225.4) (206.5) (225.4)
Notes to the Financial Information
1. Basis of Preparation
The unaudited results for the six months ended 30 June 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
6 months to 30 June 2003 Idua-
Obuasi priem Bibiani Siguiri
Production ounces 257,365 104,336 104,138 134,141
US$ million
Revenue - spot 90.0 36.4 36.6 47.0
Revenue - hedging - - - -
90.0 36.4 36.6 47.0
Operating costs (52.3) (25.1) (23.0) (34.3)
Other costs - (0.6) (0.2) (0.8)
Royalties (3.0) (1.1) (1.1) (1.5)
EBITDA 34.7 9.6 12.3 10.4
Depreciation and amortisation (15.4) (2.9) (4.7) (7.8)
Operating profit/(loss) 30.6.2003 19.3 6.7 7.6 2.6
Operating profit/(loss) 30.6.2002 7.5 5.3 5.8 3.8
6 months to 30 June 2003 Freda- Hedging Explora- Corp.
Rebecca income tion Admin
Production ounces 26,505 - - -
US$ million
Revenue - spot 9.2 - - -
Revenue - hedging - (0.6) - -
9.2 (0.6) - -
Operating costs (7.0) - - -
Other costs - - (1.6) (12.3)
Royalties - - - -
EBITDA 2.2 (0.6) (1.6) (12.3)
Depreciation and amortisation (3.1) - - (0.6)
Operating profit/(loss) 30.6.2003 (0.9) (0.6) (1.6) (12.9)
Operating profit/(loss) 30.6.2002 3.6 27.1 (2.3) (33.1)*
(*) Includes refinancing and restructuring costs
of US$23.5 million.
6 months to 30 June 2003
Group Geita Total
Production ounces 626,485 125,422 751,907
US$ million
Revenue - spot 219.2 43.8 263.0
Revenue - hedging (0.6) (5.2) (5.8)
218.6 38.6 257.2
Operating costs (141.7) (26.1) (167.8)
Other costs (15.5) (1.7) (17.2)
Royalties (6.7) (1.2) (7.9)
EBITDA 54.7 9.6 64.3
Depreciation and amortisation (34.5) (4.5) (39.0)
Operating profit/(loss) 30.6.2003 20.2 5.1 25.3
Operating profit/(loss) 30.6.2002 17.7 11.3 29.0
3 months to 30 June 2003 Idua-
Obuasi priem Bibiani Siguiri
Production ounces 125,447 57,090 52,867 64,130
US$ million
Revenue - spot 43.7 19.9 18.6 22.4
Revenue - hedging - - - -
43.7 19.9 18.6 22.4
Operating costs (25.3) (12.8) (11.0) (17.6)
Other costs - (0.3) (0.1) (0.5)
Royalties (1.4) (0.6) (0.6) (0.7)
EBITDA 17.0 6.2 6.9 3.6
Depreciation and amortisation (7.5) (1.6) (2.4) (3.8)
Operating profit/(loss) 30.6.2003 9.5 4.6 4.5 (0.2)
Operating profit/(loss) 30.6.2002 3.0 1.9 3.1 4.7
3 months to 30 June 2003 Freda- Hedging Explora- Corp.
Rebecca income tion Admin
Production ounces 9,560 - - -
US$ million
Revenue - spot 3.3 - - -
Revenue - hedging - 1.1 - -
3.3 1.1 - -
Operating costs (2.5) - - -
Other costs - - (0.9) (6.3)
Royalties - - - -
EBITDA 0.8 1.1 (0.9) (6.3)
Depreciation and amortisation (1.6) - - (0.3)
Operating profit/(loss) 30.6.2003 (0.8) 1.1 (0.9) (6.6)
Operating profit/(loss) 30.6.2002 1.3 13.3 (1.3) (27.2)*
3 months to 30 June 2003
Group Geita Total
Production ounces 309,094 61,884 370,978
US$ million
Revenue - spot 107.9 21.5 129.4
Revenue - hedging 1.1 (2.2) (1.1)
109.0 19.3 128.3
Operating costs (69.2) (13.2) (82.4)
Other costs (8.1) (0.9) (9.0)
Royalties (3.3) (0.6) (3.9)
EBITDA 28.4 4.6 33.0
Depreciation and amortisation (17.2) (2.2) (19.4)
Operating profit/(loss) 30.6.2003 11.2 2.4 13.6
Operating profit/(loss) 30.6.2002 (1.2) 5.9 4.7
3 months 3 months 6 months 6 months
to to to to
3. Reconciliation of 30 June 30 June 30 June 30 June
Total Costs 2003 2002 2003 2002
US$m US$m US$m US$m
Cash operating costs
Obuasi 25.3 24.6 52.3 51.1
Iduapriem 12.8 9.0 25.1 18.2
Bibiani 11.0 11.2 23.0 22.3
Siguiri 17.6 14.6 34.3 30.4
Freda-Rebecca 2.5 6.1 7.0 11.3
Geita (50%) 13.2 11.9 26.1 22.0
Total cash operating costs 82.4 77.4 167.8 155.3
Corporate administration costs 6.3 4.3 12.3 8.9
Exploration costs 0.9 1.3 1.6 2.3
Other costs 1.8 1.3 3.3 2.9
Royalties 3.9 3.7 7.9 7.1
Depreciation and amortisation 19.4 26.0 39.0 49.1
Exceptional costs - 22.5 - 23.5
Total costs 114.7 136.5* 231.9 249.1*
(*) Includes Geita's costs of US$16.6 million for three months to 30
June 2002 and US$31.2 million for the six months to 30 June 2002.
Hedging Commitments
The table below shows all forward and option positions that
Ashanti had as at 30 June 2003:
2003 2004 2005 2006
Forward Sales
(ounces) 413,636 657,992 648,996 538,000
(US$/ounce) 347 355 352 359
Calls:
Sold (ounces) 305,350 496,180 498,728 210,256
Sold (US$/ounce) 343 341 350 366
Bought (ounces) 101,100 101,880 134,000 49,432
Bought (US$/ounce) 345 359 352 370
Subtotal (ounces) 204,250 394,300 364,728 160,824
Summary:
Protected (ounces) 413,636 657,992 648,996 538,000
Committed (ounces) 617,886 1,052,292 1,013,724 698,824
Total committed ounces as a
percentage of total forecast
production (excluding Geita
production for the period of
the project finance,
2003-2007)
Lease Rate Swap (ounces) 2,367,000 2,587,000 2,251,000 1,915,000
Deferred Hedging Income (US$m) 6 11
2007 2008 2009 2010
Forward Sales
(ounces) 451,200 358,325 413,450 383,450
(US$/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
Total committed ounces as a
percentage of total forecast
production (excluding Geita
production for the period of
the project finance,
2003-2007)
Lease Rate Swap (ounces) 1,579,000 1,318,000 982,000 646,000
Deferred Hedging Income (US$m)
2011 2012 2013 Totals
Forward Sales
(ounces) 268,250 215,313 186,500 4,535,112
(US$/ounce) 367 374 365 360
Calls:
Sold (ounces) 84,250 77,188 28,000 2,350,783
Sold (US$/ounce) 384 387 401 355
Bought (ounces) - - - 511,808
Bought (US$/ounce) - - - 358
Subtotal (ounces) 84,250 77,188 28,000 1,838,975
Summary:
Protected (ounces) 268,250 215,313 186,500 4,535,112
Committed (ounces) 352,500 292,501 214,500 6,374,087
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) 17
Forward Sales forward sales npl → ventas fpl a término : A total of 4.54 million ounces have been sold forward at an average price of US$360 per ounce. Call Options: Ashanti has sold 2.35 million ounces of call options at an average strike price of US$355 per ounce. As a partial offset, Ashanti has bought 0.51 million ounces of call options at an average strike price of US$358 per ounce. Gold Lease Rate Swaps: As of 30 June 2003, a maximum of 2.59 million ounces of Ashanti's hedged hedge n. 1. A row of closely planted shrubs or low-growing trees forming a fence or boundary. 2. A line of people or objects forming a barrier: a hedge of spectators along the sidewalk. 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)
2,402,000 1.80% Ashanti pays a quarterly floating rate and
receives a quarterly weighted average fixed rate
of 1.90%.
360,000 2.00% 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.
Total 2,762,000
Mark-to-market valuations On 30 June 2003, the portfolio had a negative marked-to-market Marked-to-market An arrangement whereby the profits or losses on a futures contract are settled each day. value of US$108.2 million. This valuation was based on a spot price of US$346 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 5.3 million ounces. This implies (logic) implies - (=> or a thin right arrow) A binary Boolean function and logical connective. A => B is true unless A is true and B is false. The truth table is A B | A => B ----+------- F F | T F T | T T F | F T T | T It is surprising at first that A => that a US$1 increase in the price of gold would have a US$5.3 million negative impact (approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. ) on the marked-to-market valuation of the hedge book. Movements in US interest rates, gold lease rates, volatilities and time will also have a sizeable impact on the marked-to-market. All these variables can change significantly over short time periods and can consequently materially affect the marked-to-market valuation. The approximate breakdown breakdown /break·down/ (brak´doun) 1. the act or process of ceasing to function. 2. an often sudden collapse in health. 3. loss of self-control. by type of the marked-to-market valuation at 30 June 2003 was as follows:
US$m
Forward contracts (53.2)
European Call options (net sold) (65.3)
Lease rate swaps 10.3
(108.2)
Geita Hedging
The table below shows Ashanti's portion of hedging commitments for
Geita as at 30 June 2003. This represents half of Geita's hedge
commitments.
2003 2004 2005
Forward Sales (ounces) 101,625 195,558 174,828
(US$/ounce) 284 289 294
Puts:
Bought (ounces) 10,694 25,586 24,350
(US$/ounce) 292 291 291
Summary:
Protected (ounces) 112,319 221,144 199,178
Committed (ounces) 101,625 195,558 174,828
Lease Rate Swap 156,301 116,774 76,301
2006 2007 Total
Forward Sales (ounces) 94,576 120,938 687,525
(US$/ounce) 296 298 292
Puts:
Bought (ounces) 18,115 23,390 102,135
(US$/ounce) 291 292 291
Summary:
Protected (ounces) 112,691 144,328 789,660
Committed (ounces) 94,576 120,938 687,525
Lease Rate Swap 41,420 - -
Marked-to-market valuation: On 30 June 2003, the Geita portfolio had a negative marked-to-market value of US$78.8 million (Ashanti's portion: negative US$39.4 million). This valuation was based on a spot price of US$346 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 relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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 filings 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 looking 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 Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the , 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 of the developments of a particular project or the expansion of specified spec·i·fy tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. 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. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion