AngloGold Ashanti Q1 Earnings Double to $429m; Approves $1.9bn Growth Projects

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JOHANNESBURG, SOUTH AFRICA--(Marketwire -05/10/12)- AngloGold Ashanti (AU)

  • Growth projects worth $1.9bn approved -- CC&V, Kibali, Mongbwalu.
  • Adjusted headline earnings double year-on-year to $429m (111 US cents ashare).
  • Profit attributable to equity shareholders more than doublesyear-on-year to $563m.
  • EBITDA up 39% year-on-year to $800m compared to 22% average rise ingold price.
  • Q1 Dividend declared of 100 SA cents per share (~13 US cents pershare).
  • Total cash costs of $794/oz, better than guidance.
  • Production down 6% to 981,000oz due to safety stoppages in SouthAfrica.
  • All other operating regions met plans.
  • La Colosa resource increases by a further 48%, or 7.9Moz, to 24.15Moz.
  • Significant new resource potential emerging in Colombia, Guinea andDjibouti.
  • Agreed to buy Mine Waste Solutions for $335m in cash.

AngloGold Ashanti (AU) posted first-quarter adjusted headlineearnings of $429m, more than double the same period a year earlier, andapproved the development of three growth projects.

The company's board gave the go-ahead to invest $1.9bn over the coming fiveyears to expand the Cripple Creek & Victor mine in the US and develop theMongbwalu and Kibali projects in the Democratic Republic of Congo. Theprojects will be funded internally and are expected to contributeadditional annual production of more than 500,000 ounces to AngloGold.

AngloGold plans to increase production to between 5.4 million and 5.6million ounces by about 2014 from a combination of new projects in Africa,Australia and South America and through the expansion of some existingoperations. The growth is expected to be funded from internal sources. Thecompany, which eliminated its hedge book in 2010, has seen improvedearnings and cash flow in recent years from full exposure to a risingbullion price and improvements at key assets.

"The first quarter has shown that we continue to deliver the earnings andcash flow we need to drive our growth plans and further diversify ourportfolio,'' Chief Executive Officer Mark Cutifani said. "We're now able toinvest in our portfolio to deliver growth from an attractive suite ofprojects which are each of manageable size and carry relatively lowtechnical execution risk."

AngloGold expects to invest $982m for its 45% share of the development ofthe Kibali mine, a joint venture with Sokimo, the DRC's state-owned goldmining company (10%) and with Randgold Resources, the project manager andoperator, which also has a 45% stake. The mine is expected to pour itsfirst gold at the end of next year and to produce at an annual rate ofabout 600,000 ounces a year for the first decade of its life. At Mongbwalu,a joint venture in the DRC in which AngloGold has an 86.22% stake,AngloGold has made an initial investment of $345m which will deliveraverage annual production of about 130,000 ounces in each of its firstthree years. The company plans to quickly expand the operation as it addsmore gold resources in the area once first gold is produced, which isexpected to occur toward the end of next year.

At Cripple Creek, in the US state of Colorado, the expansion at a capitalcost of approximately $557m, to be invested over the next five years, isexpected to help boost the mine's production to more than 400,000 ounces.In tandem with a further mine-life extension project targeted for the endof the decade, AngloGold expects the mine to produce at that level until atleast 2025, after which production is anticipated to remain around at least350,000 ounces for approximately another 10 years. There is alsosignificant underground potential, which will be accessed for explorationas part of the current development project. The three new projectsannounced today complement the Tropicana project in Australia, which isexpected to start production at the end of next year, as well as theCórrego do Sítio mine in Brazil, which is currently commissioning.

First Quarter
Adjusted headline earnings in the three months to March 31 more thandoubled to $429m, or 111 US cents a share, compared with $203m, or 53 UScents the previous year. Production of 981,000 ounces at a total cash costof $794/oz compared with 1,039Moz at $706/oz in the same quarter of lastyear.

The operating result was negatively impacted with Section 54s and safetyrelated stoppages at the group's South African operations, while the otherthree operating regions delivered production according to plan.

Tragically, four employee fatalities were recorded at separate incidents atthe Moab Khotsong, Mponeng and Savuka mines in South Africa and at CerroVanguardia, in Argentina. The company remains committed to eliminatingfatalities at its mines through the continued implementation of its ProjectONE operating model and continual improvement of safety protocols. Successto date is evident in its all accident frequency rate, which at 8.17 permillion hours worked, is the lowest in the company's history.

Outlook
Full year(1) 2012 production remains 4.3Moz-4.4Moz at a total cash cost of$780/oz-$805/oz. For the second quarter(2), production is expected to bearound 1.04Moz at a total cash cost of $840/oz to $845/oz.

(1) Assuming an exchange rate of R7.40/$ and an oil price of $110/barrel forthe year.
(2) Assuming an exchange rate of R7.70/$ and an oil price of $125/barrel.
AngloGold Ashanti may not be able to reach the goals or meet theexpectations set out in this report. Refer to the disclaimer in thiscommunication or to the "Risk Factors" section in the current 2011 AnnualReport on Form 20-F.

About AngloGold Ashanti
AngloGold Ashanti is a global gold mining company and the world's thirdlargest gold producer. Headquartered in Johannesburg, South Africa,AngloGold Ashanti has 20 operations on four continents and one of the goldindustry's most successful exploration teams which work across both theestablished and new gold producing regions of the world. This includes landpositions in Colombia, Egypt, Guinea, Australia and the Solomon Islands,among others. AngloGold Ashanti employed 61,242 people, includingcontractors, in 2011 and produced 4.33Moz of gold, generating $6.6bn ingold income. Capital expenditure in 2011 amounted to $1.5bn. As at 31December 2011, AngloGold Ashanti's Ore Reserve totalled 75.6Moz.

The primary listing of the company's ordinary shares is on the JSE Limited(JSE). Its ordinary shares are also listed on stock exchanges in London andGhana, as well as being quoted in New York in the form of AmericanDepositary Shares (ADSs), in Australia, in the form of CHESS DepositaryInterests (CDIs) and in Ghana, in the form of Ghanaian Depositary Shares(GhDSs).

Disclaimer

 
Certain statements made in this communication, other than statements of
historical fact, including, without limitation, those concerning the
economic outlook for the gold mining industry, expectations regarding
gold prices, production, cash costs and other operating results, growth
prospects and outlook of AngloGold Ashanti's operations, individually or in
the aggregate, including the completion and commencement of commercial
operations of certain of AngloGold Ashanti's exploration and production
projects and the completion of acquisitions and dispositions, AngloGold
Ashanti's liquidity and capital resources and capital expenditure and the
outcome and consequence of any potential or pending litigation or
regulatory proceedings or environmental issues, are forward-looking
statements regarding AngloGold Ashanti's operations, economic performance
and financial condition. These forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause AngloGold
Ashanti's actual results, performance or achievements to differ materially
from the anticipated results, performance or achievements expressed or
implied in these forward-looking statements. Although AngloGold Ashanti
believes that the expectations reflected in such forward-looking statements
are reasonable, no assurance can be given that such expectations will prove
to have been correct. Accordingly, results could differ materially from
those set out in the forward-looking statements as a result of, among other
factors, changes in economic and market conditions, success of business and
operating initiatives, changes in the regulatory environment and other
government actions including environmental approvals and actions,
fluctuations in gold prices and exchange rates, and business and
operational risk management. For a discussion of certain of these and other
factors, refer to AngloGold Ashanti's annual report for the year ended 31
December 2011, which was distributed to shareholders on 4 April 2012 and
the company's 2011 annual report on Form 20-F, which was filed with the
Securities and Exchange Commission in the United States on 23 April 2012.
These factors are not necessarily all of the important factors that could
cause AngloGold Ashanti's actual results to differ materially from those
expressed in any forward-looking statements. Other unknown or unpredictable
factors could also have material adverse effects on future results.
Consequently, stakeholders are cautioned not to place undue reliance on
forward-looking statements. AngloGold Ashanti undertakes no obligation to
update publicly or release any revisions to these forward-looking
statements to reflect events or circumstances after today's date or to
reflect the occurrence of unanticipated events, except to the extent
required by applicable law. All subsequent written or oral forward-looking
statements attributable to AngloGold Ashanti or any person acting on its
behalf are qualified by the cautionary statements herein.

This communication may contain certain "Non-GAAP" financial measures.
AngloGold Ashanti utilises certain Non-GAAP performance measures and ratios
in managing its business. Non-GAAP financial measures should be viewed in
addition to, and not as an alternative for, the reported operating results
or cash flow from operations or any other measures of performance prepared
in accordance with IFRS. In addition, the presentation of these measures
may not be comparable to similarly titled measures other companies may use.

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