Ashanti Goldfields Company Limited Third Quarter Report 2001; Ashanti Records Another Quarter of Strong Financial 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)--Oct. 30, 2001 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. Highlights
- Quarter's earnings of US$14.5 million - up 93% on corresponding quarter in
2000
- Total quarterly gold production of 411,532 ounces at a cash operating cost of
US$189 per ounce
- Borrowings under the Revolving Credit Facility paid down by US$5 million
reducing it to US$65.0 million
- Hedge book mark-to-market positive at US$41 million based on a spot price of
US$291 per ounce at the quarter end
- Obuasi exploration yields high grade intersections at 62 level, the deepest
to-date
- Kimin concession expanded by 6,000 sq.kms.
3 months 3 months 9 months 9 months
to 30 to 30 to 30 to 30
Sept 2001 Sept 2000 Sept 2001 Sept 2000
--------- --------- --------- ---------
Financial (US$m)
Turnover 136.2 146.4 405.6 435.8
EBITDA 49.5 51.8 141.9 152.9
Profit before tax 16.2 9.8 41.8 25.3
Earnings 14.5 7.5 37.6 20.8
Earnings per share (US$) 0.13 0.07 0.33 0.18
Gold Production (ounces)
Total 411,532 448,208 1,247,567 1,299,108
Attributable 393,985 429,141 1,192,017 1,242,403
Gold Price (US$ per ounce)
Realized by Ashanti 331 327 325 335
Spot price 282 276 273 283
Production Costs
(US$ per ounce)
Cash operating costs 189 181 188 191
Royalties 8 8 8 8
Depreciation
and amortisation 61 65 61 69
Total production costs 258 254 257 268
The numbers for 2001 include our 50% share of Geita (2000:100%)
Overview Ashanti recorded quarterly earnings of US$14.5 million, an increase of 93% on the earnings of US$7.5 million recorded in the third quarter of last year. Continued good operating performance from Geita, together with lower depreciation and interest charges accounted for the increase. The quarter's earnings were US$0.4 million higher than those recorded in the previous quarter. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. earnings of US$37.6 million represents an 80% increase on year-to-date earnings of US$20.8 million recorded last year. Year-to-date earnings per share increased to 33 cents as compared to 18 cents recorded in 2000. The quarter's gold production of 411,532 ounces was lower than the 448,208 ounces produced in the corresponding quarter of last year, due to the commencement of closure of Ayanfuri, lower grades at Bibiani Bibiani is a town in Ghana. It is the capital of Bibiani Anhwiaso Bekwai district. and lock-up lock-up n (= prison) → cárcel f (= cell); jaula; (also: lock-up garage) → jaula, cochera lock-up arising from the implementation of cost-efficient Adj. 1. cost-efficient - productive relative to the cost cost-effective efficient - being effective without wasting time or effort or expense; "an efficient production manager"; "efficient engines save gas" processing methods 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. . Year-to-date gold production of 1,247,567 ounces was in line with the increased 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 of 1.6 million ounces. The Group Lost Time Injury Frequency Rate for the quarter was 0.53 injuries per 200,000 man hours worked and 0.63 for the year-to-date, maintaining the Group's strong safety record. Cash operating costs operating costs npl → gastos mpl operacionales for the third quarter were US$189 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. , an US$8 per ounce increase on the previous quarter and the corresponding quarter of last year due to lower production. Ashanti's year-to-date cash operating costs of US$188 per ounce were lower than the US$191 per ounce recorded last year and the current full year's target of US$195 per ounce. At the end of the quarter, Ashanti's hedge book had a positive mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. value of US$41 million based on a spot price of US$291 per ounce. The delta of the hedge book was 6.5 million ounces, which implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. that all other things being equal, the mark-to-market value of the hedge book would be neutral at a spot price of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. US$297 per ounce. During the quarter, Ashanti repaid US$5 million towards 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, reducing it to its lowest level of US$65 million. The Group's gross and net debt levels (excluding the Geita project finance loan) at the end of the quarter were lower than the previous quarter's at US$334.8 million and US$283.4 million respectively. Ashanti's management and its advisers are reviewing the Company's refinancing Refinancing An extension and/or increase in amount of existing debt. options. The majority of Exchangeable Noteholders has been identified and a dialogue with them has commenced. Exploration drilling at Obuasi intersected a high grade mineralized min·er·al·ize v. min·er·al·ized, min·er·al·iz·ing, min·er·al·iz·es v.tr. 1. To convert to a mineral substance; petrify. 2. To transform a metal into a mineral by oxidation. 3. zone grading 28 g/t (uncut 66 g/t) over a true width of 8 metres on the 62 level, the deepest ore grade Ore grade is a measure that describes the concentration of a valuable natural material (such as metals or minerals) in its surrounding ore. Ore grade is used to assess the economic feasibility of a mining operation: the cost of extracting a natural material from its ore is directly intercept intercept in mathematical terms the points at which a curve cuts the two axes of a graph. ever recorded at the mine at Obuasi. During the quarter, Ashanti expanded its Kimin 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. by 6,000 sq kms to 8,000 sq kms although exploration activity is yet to commence. 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 Production and costs. Obuasi mine produced 132,307 ounces at a cash operating cost of US$196 per ounce in the third quarter. This was on target for the quarter but 11.4% below gold production of 149,363 ounces in the same period last year. Obuasi's year-to-date gold production for the nine months is on target at 394,028 ounces at a cash operating cost of US$193 per ounce, compared with last year's 503,849 ounces at a cash operating cost of US$210 per ounce. Mining. 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. production in the third quarter was 648,000 tonnes at an average grade of 7.82 g/t, compared to 589,000 tonnes at an average grade of 8.36 g/t produced during the corresponding period in the previous year. Processing. Total ore milled in the third quarter was 1,043,000 tonnes compared with 1,136,000 tonnes milled in the same period last year. The average mill head grade of 5.36 g/t was lower than the 5.52 g/t achieved in the third quarter of 2000. Recoveries in the third quarter were 73.5%, compared with 74.1% in the same period last year. The lower recovery and head grade 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;. ") were due to increased lock up of around 4,000 ounces in the BIOX(R) as a result of higher concentrate grades from the new cleaner 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. cells. Cost reductions are expected in the future from the resulting lower reagent reagent /re·a·gent/ (re-a´jent) a substance used to produce a chemical reaction so as to detect, measure, produce, etc., other substances. re·a·gent n. consumptions. The closure of the Ayanfuri mine commenced during the quarter and the residual Residual See:Residual value ounces from Ayanfuri have been reported under Obuasi. Exploration The deep drilling programme at Obuasi continues to yield impressive results with a cut 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. of 28 g/t (uncut 66 g/t) over 8 metres true width at 62 level horizon (approximately 1900 metres below surface). This is the deepest intersection to date at Obuasi and further underscores the depth potential of the mine. Iduapriem/Teberebie Iduapriem mine produced 53,162 ounces of gold in the third quarter at a cash operating cost of US$222 per ounce compared with 52,588 ounces at US$215 in 2000. Total ore mined in the third quarter from both high grade Teberebie and low grade Iduapriem pits was 1,215,000 tonnes at 1.57 g/t. as against a total of 812,000 tonnes at a grade of 1.60 g/t produced in the same period last year. Total ore milled through the 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 in the quarter of 704,000 tonnes, grading 1.84 g/t yielded 38,168 ounces of gold, compared with 662,000 tonnes of ore at 1.69 g/t, which yielded 33,855 ounces of gold in the same period last year. Low-grade low-grade Of or relating to debt that has a credit rating of B or below. Low-grade debt offers an above-average yield but entails substantial risk because promised payments may not be made in a timely manner. ore 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. on 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. in the quarter of 861,000 tonnes at a grade of 0.97 g/t, yielded 14,994 ounces of gold, compared with 542,000 tonnes at 0.81g/t stacked in the same period last year, which yielded 9,033 ounces. Year-to-date production was 149,687 ounces at a cash operating cost of US$215 per ounce, compared with 147,175 ounces at US$224 per ounce in the same period last year. Production is well above target for the year-to-date, however costs are above target of US$200 per ounce. This was due to higher than planned equipment maintenance costs and refurbishment re·fur·bish tr.v. re·fur·bished, re·fur·bish·ing, re·fur·bish·es To make clean, bright, or fresh again; renovate. re·fur of Teberebie East 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 conveying con·vey tr.v. con·veyed, con·vey·ing, con·veys 1. To take or carry from one place to another; transport. 2. circuit. Bibiani Bibiani's third quarter production was 65,338 ounces at a cash operating cost of US$189 per ounce, compared with 69,040 ounces at US$140 per ounce for the same period in 2000. The lower production was due to lower grades, as expected, 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, of 82.2%, resulting from unexpected preg robbing ore in the feed. Bibiani's year-to-date production stands at 186,355 ounces at a cash operating cost of US$172 per ounce, both ahead of target, compared with 207,585 ounces at US$147 per ounce for the same period last year. 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.
The Siguiri mine produced 63,813 ounces of gold in the third quarter at a cash operating cost of US$185 per ounce, compared with 63,464 ounces of gold produced at a cash operating cost of US$206 per ounce for the same period in 2000. Total ore production in the quarter was 2,139,000 tonnes at an average grade of 1.26 g/t, compared with 2,235,000 tonnes at 1.28 g/t mined in the same period last year. A total of 1,827,000 ore grading 1.26g/t was stacked on the heap pads during the third quarter as against 1,754,000 tonnes at 1.40g/t stacked in the third quarter in 2000. Year-to-date production and costs at 220,648 ounces and US$207 per ounce are consistent with full year targets. 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 was 25,354 ounces at a cash operating cost of US$225 per ounce in the third quarter compared with 28,607 ounces at US$205 per ounce in the same period last year. The lower production was due to lower grades, and costs were adversely affected by the difficult economic conditions in Zimbabwe. A total of 327,000 tonnes of ore at an average grade of 3.34 g/t, compared with the corresponding period last year of 273,000 tonnes at a grade of 3.61 g/t, was mined. Freda-Rebecca's year-to-date gold production now stands at 81,594 ounces at a cash operating cost of US$217 per ounce as against 79,241 ounces at a cash operating cost of US$217 per ounce in 2000. The mine's production is on target for the year. Tanzania Tanzania (tăn'zənē`ə, –zăn`ēə, Swahili tänzänē`ä), officially United Republic of Tanzania, republic (2005 est. pop. Geita Gold production at Geita in the third quarter was 143,116 ounces compared with 75,036 ounces in the same period last year. The cash cost for the quarter was US$140 per ounce, compared with US$131 per ounce in the third quarter last year. Geita's year-to-date production was 407,476 ounces at a cash operating cost of US$139 per ounce, both well ahead of target. Ounces attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to Ashanti are 71,558 and 203,738 for the third quarter and year-to-date respectively. Exploration East Africa Tanzania At Geita, resource modelling of the Chipaka deposit, situated 6 kilometres northwest For names and places containing the slightly longer word 'northwestern' (or variants), see . Northwest or north west is the ordinal direction halfway between north and west on a compass. It is the opposite of southeast. of the plant, outlined an indicated resource of 4.5 million tonnes grading 2.2g/t, equivalent to 313,000 ounces of contained gold. Pit optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. of this near surface resource together with the resources at the Roberts and 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. prospects will be undertaken during the fourth quarter to delineate additional open pit reserves. Drilling down plunge The term Plunge has multiple meanings:
The process by which the body uses minerals to build bone structure. Mentioned in: Rickets mineralization, n the bioprecipitation of an inorganic substance. (39 metres grading 9.4 g/t from 90 metres) and will require follow-up follow-up, n the process of monitoring the progress of a patient after a period of active treatment. follow-up subsequent. follow-up plan . Ashanti continued its regional assessment of the Lake Victoria Goldfields during the quarter. During the quarter, Ashanti significantly increased its landholdings in the highly prospective Kilo-Moto gold district of northeast “Northeastern” redirects here. For the Boston college, see Northeastern University, Boston. Northeast or north east is the ordinal direction halfway between north and east. It is the opposite of southwest. See boxing the compass. Congo Congo, river, Africa Congo (kŏng`gō) or Zaïre (zī`ēr, zäēr`), great river of equatorial Africa, c. with the addition of another 6,000 square kilometres 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:
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 Exploration at Siguiri in the third quarter focused on defining resources on the Sintroko - Sokunu corridor, south of the main Siguiri operations. Saprolite sap·ro·lite n. Soft, partially decomposed rock rich in clay and remaining in its original place. saprolite resources below the Sintroko pit were estimated to total 0.4 million tonnes grading 4.4 g/t. An intersection of 17 metres at 10.8 g/t from 92 metres at Sintroko in fresh rock will require follow-up drilling. Cote d'Ivoire Geological ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. mapping, pitting and drill-site preparation was undertaken on four soil anomalies near Zaranou, Ehuasso, Bebou and M'Basso Agni Agni (ăg`nē): see Veda. Agni Hindu god of fire, second only to Indra in Vedic mythology. He is the fire of the sun, of lightning, and of the hearth of worship, and is the divine personification of the fire of sacrifice. within the Allangoua concession. The anomalies will be tested by Rotary Rotary can refer to:
Southern Africa
Zimbabwe At the RAN project near Freda-Rebecca, a resource of 2.8 million tonnes grading 2.6g/t and 0.42% copper was determined, a portion of which should be amenable AMENABLE. Responsible; subject to answer in a court of justice liable to punishment. to open pit mining. In addition, a small open pit 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. reserve has been delineated de·lin·e·ate tr.v. de·lin·e·at·ed, de·lin·e·at·ing, de·lin·e·ates 1. To draw or trace the outline of; sketch out. 2. To represent pictorially; depict. 3. at the Phoenix Prince prospect.
Summary of production and cash operating costs per ounce
Obuasi Obuasi Obuasi Obuasi
Underground Surface Tailings Total
----------- ------- -------- ------
3 months to 30 September 2001
Production (ounces) 121,746 - 10,561 132,307
Cost per ounce (US$) 202 - 122 196
3 months to 30 September 2000
Production (ounces) 132,290 6,213 10,860 149,363
Cost per ounce (US$) 191 542 108 195
9 months to 30 September 2001
Production (ounces) 360,676 - 33,352 394,028
Cost per ounce (US$) 200 - 113 193
9 months to 30 September 2000
Production (ounces) 369,354 102,598 31,897 503,849
Cost per ounce (US$) 204 263 118 210
Ayanfuri Iduapriem Bibiani Siguiri
-------- --------- ------- -------
3 months to 30 September 2001
Production (ounces) - 53,162 65,338 63,813
Cost per ounce (US$) - 222 189 185
3 months to 30 September 2000
Production (ounces) 10,110 52,588 69,040 63,464
Cost per ounce (US$) 226 215 140 206
9 months to 30 September 2001
Production (ounces) 11,517 149,687 186,355 220,648
Cost per ounce (US$) 243 215 172 207
9 months to 30 September 2000
Production (ounces) 29,955 147,175 207,585 239,737
Cost per ounce (US$) 224 224 147 181
Summary of production and cash operating costs per ounce (cont.)
Freda- Total/
Rebecca Geita Average
------- ------ --------
3 months to 30 September 2001
Production (ounces) 25,354 71,558 411,532
Cost per ounce (US$) 225 140 189
3 months to 30 September 2000
Production (ounces) 28,607 75,036 448,208
Cost per ounce (US$) 205 131 181
9 months to 30 September 2001
Production (ounces) 81,594 203,738 1,247,567
Cost per ounce (US$) 217 139 188
9 months to 30 September 2000
Production (ounces) 79,241 91,566 1,299,108
Cost per ounce (US$) 217 129 191
Gold Production Summary
3 months 3 months 9 months 9 months
to 30 to 30 to 30 to 30
Sept 2001 Sept 2000 Sept 2001 Sept 2000
--------- --------- --------- ---------
Obuasi
Underground Mining
Ore production ('000 tonnes) 648 589 1,889 1,760
Ore grade (g/t) 7.82 8.36 7.82 7.90
Surface Mining
Ore production ('000 tonnes) - 28 - 891
Ore grade (g/t) - 3.87 - 4.20
Waste mined ('000 tonnes) - 1,132 - 8,907
Strip ratio - 39.8 - 10.0
Sulphide Treatment Plant
Ore processed ('000 tonnes) 629 636 1,784 1,866
Head grade (g/t) 7.27 7.90 7.51 5.90
Recovery (%) 82.8 84.1 83.3 81.0
Gold produced (ounces) 121,675 135,549 358,518 287,982
Pompora Treatment Plant
Ore processed ('000 tonnes) - - - 787
Head grade (g/t) - - - 8.01
Recovery (%) - - - 82.4
Gold produced (ounces) 71 - 2,158 167,287
Oxide Treatment Plant
Ore processed ('000 tonnes) - 52 - 245
Head grade (g/t) - 2.92 - 2.85
Recovery (%) - 57.4 - 74.2
Gold produced (ounces) - 2,823 - 16,683
Tailings Treatment Plant
Ore processed ('000 tonnes) 414 449 1,236 1,366
Head grade (g/t) 2.47 2.47 2.50 2.37
Recovery (%) 32.1 30.4 33.5 30.6
Gold produced (ounces) 10,561 10,860 33,352 31,897
Obuasi Total Processed
Ore processed ('000 tonnes) 1,043 1,136 3,020 4,264
Head grade (g/t) 5.36 5.52 5.46 4.98
Recovery (%) 73.5 74.1 74.4 73.9
Total Gold
produced (ounces) 132,307 149,363 394,028 503,849
Obuasi
Production Distribution
Obuasi underground (ounces) 121,746 132,290 360,676 369,354
Obuasi surface (ounces) - 6,213 - 102,598
Obuasi tailings (ounces) 10,561 10,860 33,352 31,897
Obuasi total (ounces) 132,307 149,363 394,028 503,849
Gold Production Summary (cont.)
3 months 3 months 9 months 9 months
to 30 to 30 to 30 to 30
Sept 2001 Sept 2000 Sept 2001 Sept 2000
--------- --------- --------- ---------
Ayanfuri
Mining
Ore production ('000 tonnes) - 212 332 652
Ore grade (g/t) - 1.54 1.50 1.52
Waste mined ('000 tonnes) - 805 1,059 2,407
Strip ratio - 3.8 3.2 3.7
Heap Leach
Ore stacked ('000 tonnes) - 306 329 917
Head grade (g/t) - 1.24 1.20 1.26
Recovery (%) - 82.9 90.8 80.6
Gold produced (ounces) - 10,110 11,517 29,955
Iduapriem
Mining
Ore production ('000 tonnes) 1,215 812 3,441 3,772
Ore Grade (g/t) 1.57 1.60 1.61 1.16
Waste mined ('000 tonnes) 3,460 3,841 10,127 11,316
Strip ratio 2.8 3.1 2.9 3.0
CIL Plant
Ore processed ('000 tonnes) 704 662 2,045 1,997
Head grade (g/t) 1.84 1.69 1.88 1.51
Recovery (%) 94.2 93.4 94.5 93.4
Gold produced (ounces) 38,168 33,855 116,743 92,243
Heap Leach (Iduapriem/Teberebie)
Ore stacked ('000 tonnes) 861 542 1,995 1,837
Head grade (g/t) 0.97 0.81 0.90 0.76
Recovery (%) 55.8 64.0 57.4 71.3
Gold produced (ounces) 14,994 18,733 32,944 54,932
Iduapriem Total (ounces) 53,162 52,588 149,687 147,175
Bibiani
Mining
Ore production ('000 tonnes) 796 675 1,748 1,703
Ore Grade (g/t) 3.24 3.45 3.56 3.25
Waste mined ('000 tonnes) 3,151 4,813 10,964 11,578
Strip ratio 4.0 7.2 6.3 6.8
CIL Plant
Ore processed ('000 tonnes) 714 729 618 2,051
Head grade (g/t) 3.27 3.58 3.87 3.83
Recovery (%) 82.2 82.4 81.4 87.3
Gold produced (ounces) 65,338 69,040 186,355 207,585
Gold Production Summary (cont.)
3 months 3 months 9 months 9 months
to 30 to 30 to 30 to 30
Sept 2001 Sept 2000 Sept 2001 Sept 2000
--------- --------- --------- ---------
Siguiri
Mining
Ore production ('000 tonnes) 2,139 2,235 6,512 7,783
Ore grade (g/t) 1.26 1.28 1.32 1.35
Waste mined ('000 tonnes) 422 3,402 3,531 3,505
Strip ratio 0.2 0.5 0.5 0.5
Heap Leach
Ore stacked ('000 tonnes) 1,827 1,754 6,894 6,517
Head grade (g/t) 1.26 1.40 1.32 1.35
Recovery (%) 86.2 80.4 75.4 84.8
Gold produced (ounces) 63,813 63,464 220,648 239,737
Freda-Rebecca
Underground Mining
Ore production ('000 tonnes) 327 273 913 726
Ore Grade (g/t) 3.34 3.61 3.52 3.63
Processing
Ore processed ('000 tonnes) 277 252 844 737
Head grade (g/t) 3.24 3.51 3.43 3.67
Recovery (%) 88.0 90.30 87.7 89.8
Gold produced (ounces) 25,354 28,607 81,594 79,241
Geita
Surface Mining
Ore production ('000 tonnes) 966 672 3,123 693
Grade (g/t) 4.07 2.98 3.82 4.98
Waste mined ('000 tonnes) 7,517 5,699 20,021 6,311
Strip ratio 7.8 8.7 6.4 9.1
Processing
Ore processed
CIL ('000 tonnes) 1,067 785 3,389 980
Head grade (g/t) 4.50 3.12 4.02 3.12
Recovery (%) 93.0 95.2 93.0 93.0
Gold produced (ounces) 143,116 75,036 407,476 91,566
Ashanti 50%/100% 71,558 75,036 203,738 91,566
Group Summary
Managed gold
production (ounces) 339,974 448,208 1,043,829 1,299,108
Geita JV 50% (ounces) 71,558 - 203,738 -
Sub-total (ounces) 411,532 448,208 1,247,567 1,299,108
Less minority
interests (ounces) 17,546 19,067 55,550 56,705
Group Attributable
Total (ounces) 393,985 429,141 1,192,017 1,242,403
Financial Review Earnings Earnings for the third quarter were US$14.5 million (US$0.13 per share), an increase of US$0.4 million on the previous quarter and US$7.0 million on the corresponding period last year. For the year-to-date, earnings were US$37.6 million, an increase of US$16.8 million (80%) on last year due principally to lower depreciation and interest charges. Year-to-date earnings per share increased to 33 cents as compared to 18 cents recorded last year. Revenue Gold production for the quarter of 411,532 ounces generated spot revenue of U$116.2 million, equivalent to US$282 per ounce, US$ 8 per ounce higher than the second quarter. 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 US$20.0 million, of which US$6.4 million was realized from the close out of regular hedges and US$13.6 million was released from deferred hedging income to give a realized price of US$331 per ounce for the quarter and US$325 per ounce year to date. Hedging As at 30 September September: see month. 2001, Ashanti had 5.4 million ounces protected at an average rate of US$361 per ounce with commitments to deliver gold of 8.4 million ounces. The mark-to-market value of the hedge book was positive US$41 million based on a spot price of US$291 per ounce. The delta of the hedge book was 6.5 million ounces which implied that other things being equal, the hedge book would be neutral at a spot price of approximately US$297 per ounce. Ashanti's share of the Geita hedge book at 30 September was negative US$14.5 million. Full details of the Ashanti and Geita hedge books are set out below. Operating Costs Total cash operating costs for the quarter were US$189 per ounce, a US$8 per ounce increase on the previous quarter and the corresponding quarter last year due to lower production. Year-to-date total cash operating costs were US$188 per ounce (2000: US$ 191 per ounce). 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 was US$24.1 million (2000: US$22.4 million) and US$65.3 million (2000: US$60.9 million) year-to-date. Exploration expenditure was US$0.5 million lower than the previous quarter at US$1.1 million, bringing the year-to-date to US$4.3 million. Corporate administration costs for the quarter were unchanged from the previous quarter at US$4.9 million, bringing the year-to-date to US$15.0 million. Net interest payable for the quarter was US$7.9 million (2000: US$12.6 million) and year-to-date US$23.5 million (2000: US$35.6 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 third quarter was US$25.1 million (2000: US$36.0 million) and year-to-date US$66.6 million (2000: US$99.8 million). Cash outflows during the quarter included US$12.9 million for capital expenditure and US$8.3 million for interest which included US$6.0 million paid in September on the Exchangeable Notes. During the quarter, Ashanti repaid a further US$5.0 million towards the Revolving Credit Facility, reducing it to US$65.0 million, a US$23.8 million reduction since the beginning of the year. Gross debt at the quarter end was US$334.8 million (30 June June: see month. 2001: US$342.6 million) and net debt was US$283.4 million (30 June 2001: US$287.3 million) excluding Ashanti's share of the US$135.0 million non-recourse Geita project finance loan. Ashanti's management and its advisers are reviewing refinancing options, have identified majority of the Exchangeable Noteholders and have commenced dialogue with them.
Group Profit and Loss Account
3 months to 3 months to
30 Sept 2001 30 Sept 2000
Interest
in joint
Group venture Total
Note US$m US$m US$m US$m
-------------------------------------------------------
Turnover 2 116.4 19.8 136.2 146.4
Operating costs 2 (73.6) (10.0) (83.6) (91.0)
Royalties (2.5) (0.6) (3.1) (3.6)
Depreciation
and
amortisation (22.2) (3.2) (25.4) (29.4)
------------------------------------------------
Total costs (98.3) (13.8) (112.1) (124.0)
------------------------------------------------
Operating
profit 2 18.1 6.0 24.1 22.4
Share of
operating
profit
of joint
venture 6.0 -
------------
Total operating
profit 24.1 22.4
Net interest
payable:
Group (5.5) (12.6)
Joint venture (2.4) -
------------
Profit before
taxation 16.2 9.8
Taxation (1.7) (2.3)
------------
Profit after
taxation 14.5 7.5
Minority
interests - -
------------
Profit
attributable
to
shareholders 14.5 7.5
Dividends - -
Retained profit
for the
period 14.5 7.5
------------
Earnings per
share (US$) 0.13 0.07
9 months to 9 months to
30 Sept
30 Sept 2001 2000
Interest
in joint
Group venture Total
Note US$m US$m US$m US$m
---- ------- ----------- ------- ------
Turnover 2 348.8 56.8 405.6 435.8
Operating costs 2 (225.7) (28.4) (254.1) (272.4)
Royalties (7.9) (1.7) (9.6) (10.5)
Depreciation
and
amortisation (67.5) (9.1) (76.6) (92.0)
------------------------------------------------
Total costs (301.1) (39.2) (340.3) (374.9)
------------------------------------------------
Operating
profit 2 47.7 17.6 65.3 60.9
Share of
operating
profit
of joint
venture 17.6 -
------------ ------------
Total operating
profit 65.3 60.9
Net interest
payable:
Group (17.1) (35.6)
Joint venture (6.4) -
------------ ------------
Profit before
taxation 41.8 25.3
Taxation (4.2) (3.8)
------------ ------------
Profit after
taxation 37.6 21.5
Minority
interests - (0.7)
------------ ------------
Profit
attributable
to
shareholders 37.6 20.8
Dividends - -
Retained profit
for the
period 37.6 20.8
------------ ------------
Earnings per
share (US$) 0.33 0.18
Group Balance Sheet
As at 30 As at As at
Sept 2001 30 Sept 31 Dec
Interest 2000 2000
in
joint
Group venture Total
US$m US$m US$m US$m US$m
------ -------- ------ ------- -------
Fixed assets
Intangible
assets 19.5 60.4 79.9 142.5 21.5
Tangible assets 612.9 106.9 719.8 1,056.9 645.8
Investments
- Geita joint
venture 80.5 (80.5) - - 69.3
- Loans to
joint venture
and other
investments 32.6 - 32.6 - 32.6
745.5 832.3 1,199.4 769.2
Current assets
Stocks 77.4 6.2 83.6 87.1 77.8
Debtors 15.2 4.3 19.5 39.1 15.6
Cash 51.4 18.3 69.7 86.9 73.6
144.0 28.8 172.8 213.1 167.0
Creditors:
amounts
falling due
within one
year
Creditors (161.3) (45.9) (207.2) (167.3) (169.0)
Borrowings (10.0) (9.7) (19.7) (230.4) (7.2)
(171.3) (55.6) (226.9) (397.7) (176.2)
Net current
liabilities (27.3) (26.8) (54.1) (184.6) (9.2)
Total assets
less current
liabilities 718.2 140.5 778.2 1,014.8 760.0
Creditors:
amounts
falling due
over one year
Creditors (49.2) - (49.2) (120.9) (98.2)
Borrowings (324.8) (57.9) (382.7) (455.1) (358.5)
Provisions for
liabilities
and charges (26.9) (2.1) (29.0) (24.7) (24.5)
317.3 317.3 414.1 278.8
Capital and
reserves
Stated capital 545.2 544.3 544.3
Reserves (232.0) (132.3) (269.6)
Equity
shareholders'
funds 313.2 412.0 274.7
Equity minority
interests 4.1 2.1 4.1
---------- ------------------------
317.3 414.1 278.8
---------- ------------------------
Group Cash Flow Statement
3 months 3 months 9 months 9 months
to 30 to 30 to 30 to 30
Sept 2001 Sept 2000 Sept 2001 Sept 2000
US$m US$m US$m US$m
--------- --------- --------- ---------
Cash inflow
from operating activities 25.1 36.0 66.6 99.8
Returns on investments
and servicing of finance
Interest received 0.4 0.8 2.1 3.2
Interest paid (8.3) (18.7) (21.5) (45.4)
Net cash outflow from
returns on investments
and servicing of finance (7.9) (17.9) (19.4) (42.2)
Taxation
Corporate tax paid (0.2) (1.7) (2.8) (4.0)
Capital expenditure
and financial investments
Purchase of
tangible fixed assets (12.9) (35.9) (35.0) (121.8)
Net cash outflow
from capital expenditure
and financial investments (12.9) (35.9) (35.0) (121.8)
Acquisitions and disposals - 4.6 - -
Cash inflow/(outflow)
before financing 4.1 (14.9) 9.4 (68.2)
Financing
Loans drawn down - 19.0 - 75.0
Loan repayments (8.0) (3.1) (31.6) (9.6)
Net cash (outflow)/inflow
from financing (8.0) 15.9 (31.6) 65.4
(Decrease)/increase in cash (3.9) 1.0 (22.2) (2.8)
Notes to the Financial Information 1. Basis of Preparation The unaudited results for the nine months ended 30 September 2001 have been prepared 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 the accounting policies set out in the Annual Report and Accounts for the year ended 31 December December: see month. 2000. The Group currently has over US$100 million of undrawn un·draw tr.v. un·drew , un·drawn , un·draw·ing, un·draws To draw to one side, as a curtain. Adj. 1. undrawn - not represented in a drawing undelineated - not represented accurately or precisely committed facilities Committed Facility A credit facility whereby terms and conditions are clearly defined by the lending institution and imposed upon the borrowing company. Notes: In committed facilities, the borrowing companies must meet specific requirements set forth by the lending which are available to be drawn by the Group during 2001 subject to the Group complying with the covenants contained in the Revolving Credit Facility. The Group is required under the terms of the Revolving Credit Facility and the margin free trading arrangements it has with its hedging counterparties Counterparties The parties on either side of an interest rate swap or a currency, equity or commodity swap, or to an options or futures position. to submit a refinancing plan to its banks and hedge counterparties by no later than 31 January January: see month. 2002. If this plan is objected to by the banks or the hedge counterparties, the Group is obliged o·blige v. o·bliged, o·blig·ing, o·blig·es v.tr. 1. To constrain by physical, legal, social, or moral means. 2. to deliver a revised refinancing plan. If the latest revised refinancing plan is objected to by the banks by 30 June 2002, or if the Group breaches other covenants contained in either the Revolving Credit Facility or the margin free trading letter, then the bank facilities may be withdrawn and become repayable re·pay v. re·paid , re·pay·ing, re·pays v.tr. 1. To pay back: repaid a debt. 2. early and the margin free trading arrangements may also be withdrawn. With effect from 31 December 2001 all undrawn facilities will be cancelled can·cel v. can·celed also can·celled, can·cel·ing also can·cel·ling, can·cels also can·cels v.tr. 1. To cross out with lines or other markings. See Synonyms at erase. 2. and the Group will be required to make repayments under its facilities commencing 31 March 2002. The Group will need to meet its repayments, which fall due in 2002, from operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. and hedge close outs or otherwise seek replacement facilities. The sufficiency of the cash flows and the availability of these facilities in 2002, will depend to a large extent on the gold price at that time and the Group maintaining its operational efficiencies. Based on the Group's current cash flow projections A Cash Flow Projection is an attempt to forecast the cash flows that will be generated by an asset, often a company, over a specified time frame. Methodology Projections can be made with varying levels of detail, but any cash flow projection for a business entails and the other options available to the Group there is reasonable expectation that the Group will continue in operational existence for at least the next 12 months. Consequently, Directors have formed the judgement, at the time of approving the financial information, that it is appropriate to continue to use the going concern basis in preparing the financial information.
2. Operating Profit Analysis by Business Area
9 months to 30 September 2001
Idua-
Obuasi Ayanfuri priem Bibiani
------- -------- -------- --------
Production ounces 394,028 11,517 149,687 186,355
US$ million
Revenue - spot 106.4 3.1 40.4 50.2
- hedging - - - -
106.4 3.1 40.4 50.2
Operating costs (76.1) (2.8) (32.2) (32.0)
Royalties (3.1) (0.1) (1.2) (1.5)
EBITDA 27.2 0.2 7.0 16.7
Depreciation and amortisation (29.7) (0.4) (4.1) (10.7)
Operating profit 30.9.2001 (2.5) (0.2) 2.9 6.0
30.9.2000 (9.5) (2.2) 4.7 11.8
9 months to 30 September 2001
Freda- Hedging Explora-
Siguiri Rebecca income tion
------- ------- ------- --------
Production ounces 220,648 81,594 - -
US$ million
Revenue - spot 59.4 26.2 - -
- hedging - - 63.1 -
59.4 26.2 63.1 -
Operating costs (45.6) (17.7) - (4.3)
Royalties (2.0) - - -
EBITDA 11.8 8.5 63.1 (4.3)
Depreciation and amortisation (17.2) (4.4) - (0.1)
Operating profit 30.9.2001 (5.4) 4.1 63.1 (4.4)
30.9.2000 9.1 (2.0) 68.6 (9.4)
9 months to 30 September 2001
Corp.
Admin Group Geita Total
------- ------- ------- -------
Production ounces - 1,043,829 203,738 1,247,567
US$ million
Revenue - spot - 285.7 54.8 340.5
- hedging - 63.1 2.0 65.1
- 348.8 56.8 405.6
Operating costs (15.0) (225.7) (28.4) (254.1)
Royalties - (7.9) (1.7) (9.6)
EBITDA (15.0) 115.2 26.7 141.9
Depreciation and amortisation (0.9) (67.5) (9.1) (76.6)
Operating profit 30.9.2001 (15.9) 47.7 17.6 65.3
30.9.2000 (17.0) 54.1 6.8 60.9
The numbers for 2001 include our 50% share of Geita (2000:100%)
3. Hedging commitments
The table below shows all forward and option positions that Ashanti
had as at 30 September 2001:
2001 2002 2003 2004
------- ------- ------- -------
Forward Sales
(ounces) 235,627 597,500 718,746 529,996
(US$/ounce) 344.10 335.40 344.61 353.34
Puts:
Bought (ounces) 46,787 270,000 50,000 -
(US$/ounce) 318.09 349.54 354.00 -
Sold (ounces) 12,500 50,000 50,000 50,000
(US$/ounce) 270.00 270.00 270.00 270.00
Subtotal (ounces) 34,287 220,000 - -50,000
Calls:
Sold (ounces) 296,426 700,700 629,492 575,092
(US$/ounce) 321.22 336.24 337.24 343.30
Bought (ounces) 55,000 60,000 240,000 280,000
(US$/ounce) 378.73 380.00 429.13 444.43
Subtotal(ounces) 241,426 640,700 389,492 295,092
Convertible Structures:
Put Protection (ounces) - - - 79,200
(US$/ounce) - - - 377.50
Forward Commitment
(ounces) - - - -
(US$/ounce) - - - -
Call Commitment
(ounces) - - - 79,200
(US$/ounce) - - - 380.00
Summary:
Protected (ounces) 269,914 817,500 718,746 559,196
Committed
(ounces) 532,053 1,238,200 1,108,238 904,288
Total committed ounces as
a percentage of total
forecast production
(excluding Geita
production for the
period of the project
finance, ie 2001-2007)
Lease Rate Swap (ounces) 882,500 4,981,625 5,044,125 4,466,400
Amortising Volume
2005 2006 2007 2008
------- ------- ------- -------
Forward Sales
(ounces) 464,996 248,000 190,000 205,000
(US$/ounce) 353.12 349.35 345.93 349.80
Puts:
Bought (ounces) - - - -
(US$/ounce) - - - -
Sold (ounces) - - - -
(US$/ounce) - - - -
Subtotal (ounces) - - - -
Calls:
Sold (ounces) 305,900 315,620 287,840 287,840
(US$/ounce) 357.32 361.25 366.48 366.48
Bought (ounces) 60,000 173,000 173,000 -
(US$/ounce) 380.00 418.44 418.44 -
Subtotal(ounces) 245,900 142,620 114,840 287,840
Convertible Structures:
Put Protection (ounces) 79,200 179,200 179,200 179,200
(US$/ounce) 377.50 390.47 390.47 390.47
Forward Commitment
(ounces) - 200,000 200,000 189,000
(US$/ounce) - 400.75 400.75 400.75
Call Commitment
(ounces) 79,200 79,200 79,200 79,200
(US$/ounce) 380.00 380.00 380.00 380.00
Summary:
Protected (ounces) 544,196 427,200 369,200 384,200
Committed
(ounces) 790,096 669,820 584,040 761,040
Total committed ounces
as a percentage of total
forecast production
(excluding Geita
production for the
period of the project
finance, ie 2001-2007)
Lease Rate Swap
(ounces) 3,765,200 3,089,400 2,470,375 1,941,675
Amortising Volume
2009 2010 2011 2012
------- ------- ------- -------
Forward Sales
(ounces) 180,000 140,000 140,000 120,000
(US$/ounce) 345.33 346.86 346.86 348.00
Puts:
Bought (ounces) - - - -
(US$/ounce) - - - -
Sold (ounces) - - - -
(US$/ounce) - - - -
Subtotal (ounces) - - - -
Calls:
Sold (ounces) 96,220 56,500 56,500 56,500
(US$/ounce) 362.38 350.00 350.00 350.00
Bought (ounces) - - - -
(US$/ounce) - - - -
Subtotal(ounces) 96,220 56,500 56,500 56,500
Convertible Structures:
Put Protection (ounces) 179,200 179,200 100,000 100,000
(US$/ounce) 390.47 390.47 400.75 400.75
Forward Commitment
(ounces) 100,000 100,000 100,000 100,000
(US$/ounce) 400.75 400.75 400.75 400.75
Call Commitment
(ounces) 135,200 135,200 56,000 56,000
(US$/ounce) 388.59 388.59 400.75 400.75
Summary:
Protected (ounces) 359,200 319,200 240,000 220,000
Committed
(ounces) 511,420 431,700 352,500 332,500
Total committed ounces
as a percentage of
total forecast production
(excluding Geita
production for the
period of the project
finance, ie 2001-2007)
Lease Rate Swap (ounces) 1,427,650 1,014,470 695,250 408,750
Amortising Volume
2013 Totals
------- --------
Forward Sales
(ounces) 120,000 3,889,865
(US$/ounce) 348.00 346.42
Puts:
Bought (ounces) - 366,787
(US$/ounce) - 346.13
Sold (ounces) - 162,500
(US$/ounce) - 270.00
Subtotal (ounces) - 204,287
Calls:
Sold (ounces) 56,500 3,721,130
(US$/ounce) 350.00 346.35
Bought (ounces) - 1,041,000
(US$/ounce) - 421.36
Subtotal(ounces) 56,500 2,680,130
Convertible Structures:
Put Protection (ounces) 50,000 1,304,400
(US$/ounce) 401.00 390.88
Forward Commitment
(ounces) 50,000 1,039,000
(US$/ounce) 401,00 400.76
Call Commitment
(ounces) 28,000 806,400
(US$/ounce) 401.00 386.49
Summary:
Protected (ounces) 170,000 5,398,552
Committed
(ounces) 254,500 8,415,395
Total committed ounces
as a percentage of
total forecast production
(excluding Geita
production for the
period of the project
finance, ie 2001-2007) 75%
Lease Rate Swap (ounces) 161,000 882,500
Amortising Volume 5,044,125
Forward Sales forward sales npl → ventas fpl a término : A total of 3.89 million ounces have been sold forward at an average price of US$346.42 per ounce. Put Options: Ashanti has purchased 366,787 ounces of put options that give Ashanti the right, but not the obligation, to sell gold at certain strike prices. The average strike price is US$346.13 per ounce. Ashanti has also sold 162,500 ounces of put options at an average strike price of US$270 per ounce. Call Options: Ashanti has sold 3.7 million ounces of call options at an average strike price of US$346.35 per ounce. As a partial offset, Ashanti has bought 1,041,000 ounces of call options at an average strike price of US$421.36per ounce which start maturing in 2001. Convertible Structures: The portfolio contains 3 types of convertible structures: 1. Ashanti has sold 554,400 ounces of call options at a strike price of US$380 per ounce for the period March 2004 to December 2010. These call options convert to bought put options (with a strike price of US$377.50 per ounce) if gold trades below predetermined pre·de·ter·mine v. pre·de·ter·mined, pre·de·ter·min·ing, pre·de·ter·mines v.tr. 1. To determine, decide, or establish in advance: barrier levels on 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. dates starting from 2002. The average barrier level is US$347. 2. Ashanti owns 300,000 ounces of put options for the period March 2006 to December 2008 with strike prices of US$401 per ounce. Each option has a conversion level and a strip of conversion dates associated with it. If the conversion occurs the put options convert into 589,000 ounces of forward sales at the same strike price. 3. Ashanti owns 450,000 ounces of put options for the period March 2009 to December 2013 with strike prices of US$401 per ounce. Each option has a conversion level and a strip of conversion dates associated with it. If the conversion occurs each put option converts into 1 ounce of forward sales and 0.56 ounces of (sold) call options The average conversion level for convertibles 2 and 3 is US$362.50. The hedge table breaks the above structures into protected and committed ounces. The "Put Protection" represents the amount of ounces that may be sold should gold continue trading at current levels. Under certain conditions (given above) these puts may cease to exist and may be replaced by forward sales and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. calls sold ("Forward Commitment" and "Call Commitment"). Notes Gold Lease Rate Swaps: As of 30 September 2001, a maximum of 4.9 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 1, 3 and 6 month lease rate at any one time (August 2002). The maximum quantity in 2001 at any one time is 882,500 ounces. 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 (ounces) Fixed Rate Description
27,500 2.00% Ashanti pays a monthly floating rate
and receives a monthly fixed rate of
2.00%
396,000 1.9% Ashanti pays a semi-annual floating
rate and receives a semi-annual fixed
rate of 1.9.%
1,150,000 1.9% Ashanti pays a semi-annual floating
rate and receives a semi-annual fixed
rate of 1.9%.
1,920,000 1.80% Ashanti pays a quarterly floating rate
and receives a quarterly fixed rate of
1.80%. The fixed amount of ounces is
converted to dollars at a fixed spot
price of US$300.
920,000 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*Years To
Maturity*302*2.00%. The next rate set
is in 2002.
640,000 1.75% Ashanti pays a quarterly floating rate
and receives a fixed rate ranging from
1.75% to 0% depending on where gold
fixes.
Gold Fix Fixed Rate Received
Spot <US$345 1.75%
US$345<Spot<US$400 Linearly
interpolated
between 1.75% and 0%
US$400<Spot 0%
240,000 2.25% Ashanti pays a quarterly floating rate
and receives a fixed rate ranging from
2.25% to 0% depending on where gold
fixes.
Gold Fix Fixed Rate Received
Spot <US$360 2.25%
US$360<Spot<US$400 Linearly
interpolated
between 2.25% and 0%
US$400<Spot 0%
Total
5,293,500
Mark-to-Market Valuations On 30 September 2001 the portfolio had a positive mark-to-market value of US$40.8 million. This valuation was based on a spot price of US$291 and the then prevailing 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. The delta at that time was 6.5 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$6.5 million negative impact (approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. ) on the mark-to-market valuation of the hedge book. Movements in US interest rates, gold lease rates, volatilities and time will also have a sizeable impact on the mark-to-market. All these variables can change significantly over short time periods and can consequently materially affect the mark-to-market valuation. The approximate breakdown breakdown /break·down/ (brak´doun) 1. the act or process of ceasing to function. 2. an often sudden collapse in health. 3. loss of self-control. by type of the mark-to-market valuation at 30 September 2001 was as follows:
US$m
Forward contracts 99.7
European Put options (net bought) 18.5
European Call options (net sold) (60.0)
Convertible structures 36.6
Lease rate swaps (54.0)
40.8
Projected Realized Prices:
The following summary table shows, as at 30 September 2001, the
ounces delivered and average prices achieved at the assumed spot price
indicated. A quarterly lease rate of 2.0% is assumed throughout.
Average Price
Spot Price Ounces delivered US$ per Ounce
US$250 5.4 million US$360
US$300 5.7 million US$354
US$350 6.6 million US$344
US$400 9.4 million US$349
The number of ounces delivered in this table indicates how many
ounces Ashanti would sell through forward sales, as well as calls and
puts, bought and sold, which would be exercised under the various
assumed spot prices. The effects off all lease rate swap rate-sets (at
2.0%) have been included in the average price calculation.
Geita Hedging Commitments
The table below shows Ashanti's portion of hedging commitments for
Geita as at 30 September 2001. This represents half of Geita's hedge
commitments.
2001 2002 2003 2004
------ ------ ------ ------
Forward Sales (ounces) 36,222 225,350 228,781 195,598
(US$/ounce) 290.69 282.07 286.11 288.53
Puts:
Bought (ounces) 6,180 25,170 26,735 25,586
(US$/ounce) 294.28 291.03 291.19 291.29
Summary:
Protected (ounces) 42,402 250,520 255,516 221,184
Commited (ounces) 36,222 225,350 228,781 195,598
Total committed ounces
as a percentage of
total forecast production
Lease Rate Swap 154,323 229,370 200,964 156,301
Amortising Volume
2005 2006 2007 Total
------ ------ ------ -------
Forward Sales (ounces) 125,744 94,576 120,938 1,027,209
(US$/ounce) 294.33 296.05 298.49 289.23
Puts:
Bought (ounces) 24,350 18,115 23,390 149,526
(US$/ounce) 291.19 291.03 291.66 291.36
Summary:
Protected (ounces) 150,094 112,691 144,328 1,176,735
Commited (ounces) 125,744 94,576 120,938 1,027,209
Total committed ounces
as a percentage of
total forecast production 60%
Lease Rate Swap 116,774 76,301 41,420 154,323
Amortising Volume 229,370
Mark-to-Market Valuation On 30 September 2001, the Geita portfolio had a negative mark-to-market value of US$29 million (Ashanti's portion - US$14.5 million). This valuation was based on a spot price of US$291 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 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. This report contains a number of statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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, . Ashanti may also make written or oral forward-looking statements in its 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, projections and expectations, and may include statements regarding future plans, objectives or goals, anticipated production or construction commencement dates, construction completion dates, expected costs, production output, the anticipated productive life of mines, projected cashflows, debt levels, and mark-to-market values of and cashflows from the hedgebook. Such statements are based on current plans, 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. 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 mark-to-market values of and cashflows from the hedgebook, discussed will not differ materially from the 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 liquidity, 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 , hedging operations, reserves estimates, exploration and development, mining, yearly output, infrastructure, 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 life 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 mark-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 Ashanti undertakes no obligation to update publicly any of them in light of new information or future events. |
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