UNITED STATES SECURITIES AND EXCHANGE COMMISSION
  
 FORM 20-F
 
  REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR 12(G) OF THE SECURITIES EXCHANGE ACT OF
  1934 OR
 
 FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2009
  
 AngloGold Ashanti Limited
  
 Republic of South Africa
  
 76 Jeppe Street, Newtown, Johannesburg, 2001
 (P.O. Box 62117, Marshalltown, 2107)
 South Africa
  
 Lynda Eatwell, Company Secretary, Telephone: +27 11 6376128, Facsimile: +27 11 6376677
 E-mail: leatwell@anglogoldashanti.com, 76 Jeppe Street, Newtown, Johannesburg, 2001, South Africa
  
 Securities registered pursuant to Section 12(b) of the Act:
         
 Securities registered pursuant to Section 12(g) of the Act:
  Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
  Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report:  Ordinary Shares of 25 ZAR cents each
        
 
 
   
 
  Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


2
 
  TABLE OF CONTENTS
      Presentation of information
   Certain forward-looking statements
   Glossary of selected terms
    
    
    
    
   Part I:
    Item 1:
    Item 2:
    Item 3:
    
     
     
     
     Item 4:
    
     
     
     
     Item 4A:
    Item 5:
    
     
     
     
     
     
     Item 6:
    
     
     
     
     
     Item 7:


3
 
 
 
 Item 8:
   
 
    
 
    
 
    
 
    
 Item 9:
   
 
    
 
    
 
    
 
 
  
 
    
 
    
 Item 10
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
    
 Item 11
   
 Item 12
   
 
 
  
 
 
  
 
 
  
 
 
   
 
    
 
  
  
 Part II:Item 13
 Defaults, dividend arrearages and delinquencies
   
 Item 14
   
 Item 15
   
 Item 16A
   
 Item 16B:
   
 Item 16C
   
 Item 16D:
   
 Item 16E:
   
 Item 16F:
   
 Item 16G:
   
 Part III:Item 17:
 Financial statements
   
 Item 18.
   
 Item 19.


PRESENTATION OF INFORMATION AngloGold Ashanti LimitedIn  this  annual  report  on  Form  20-F,  unless  the  context  otherwise  requires,  references  to  AngloGold  or  AngloGold Ashanti, the company and the group, are references to AngloGold Ashanti Limited or, as appropriate, subsidiaries and associate companies of AngloGold Ashanti. US GAAP financial statements The  audited  consolidated  financial  statements  contained  in  this  annual  report  on  Form 20-F  for  the  years  ended December 31, 2009, 2008 and 2007 and as at December 31, 2009 and 2008 have been prepared in accordance with U.S. generally accepted accounting principles (US GAAP).
 IFRS financial statements
 As  a  company  incorporated  in  the  Republic  of  South  Africa,  AngloGold  Ashanti  also  prepares  annual  audited consolidated  financial  statements  and  unaudited  consolidated  quarterly  financial  statements  in  accordance  with International  Financial  Reporting  Standards  (IFRS).  These  financial  statements  (referred  to  as  IFRS  statements)  are distributed to shareholders and are submitted to the JSE Limited (JSE), as  well as  the London, New York, Australian and  Ghana  stock  exchanges  and  Paris  and  Brussels  bourses  and  are  furnished  to  the  US Securities  and  Exchange Commission (SEC) on Form 6-K.
 Currency
 AngloGold Ashanti presents its consolidated financial statements in United States dollars.  In  this  annual  report,  references  to  rands,  ZAR  and  R  are  to  the  lawful  currency  of  the  Republic  of  South  Africa, references  to  US dollars,  dollar  or  $  are  to  the  lawful  currency  of  the  United  States,  references  to  €   are  to  the  lawful currency of the European Union, references to C$ or CAD are to the lawful currency of Canada, references to ARS and peso  are  to  the  lawful  currency  of  Argentina,  references  to  AUD  and  A$  are  to  the  lawful  currency  of  Australia, references to BRL are to the lawful currency of Brazil, NAD and N$ are the lawful currency of Nambia, reference to Tsh is to the lawful currency of the United Republic of Tanzania and references to GHC, cedi or ¢ are to the lawful currency of Ghana.
  See  “Item  3A.:  Selected  financial  data  –  Exchange  rate  information”  for  historical  information  regarding  the US dollar/South African rand exchange rate. On April 14 as reported by OANDA Corporation was R7.3019/$1.00.   Non-GAAP financial measures In this annual report on Form 20-F, AngloGold Ashanti presents the financial items “total cash costs”, “total cash costs per ounce”, “total production costs” and “total production costs per ounce” which have been determined using industry guidelines  and  practices  promulgated  by  the  Gold  Institute  and  are  not  US  GAAP  measures.  An  investor  should  not consider  these  items  in  isolation  or  as  alternatives  to  production  costs,  net  income/(loss)  applicable  to  common shareholders, income/(loss) before income tax provision, net cash provided by operating activities or any other measure of financial performance presented in accordance with US GAAP. While the Gold Institute has provided definitions for the  calculation  of  total  cash  costs  and  total  production  costs,  the  calculation  of  total  cash  costs,  total  cash  costs  per ounce, total production costs and total production costs per ounce may vary significantly among gold mining companies, and by themselves do not necessarily provide a basis for comparison with other gold mining companies. See “Glossary of selected terms – Financial terms – Total cash costs” and –“Total production costs” and “Item 5A.: Operating results – Total cash costs and total production costs”.   Shares and shareholders In  this annual report on Form  20-F, references to ordinary  shares, ordinary shareholders and shareholders/members, should be read as common stock, common stockholders and stockholders, respectively, and vice versa.


CERTAIN FORWARD-LOOKING STATEMENTSCertain  statements  contained  in  this  document,  other  than  statements  of  historical  fact,  contain  forward-looking statements  regarding AngloGold Ashanti's operations, economic  performance  or financial condition,  including, without limitation,  those  concerning:  AngloGold  Ashanti  Limited’s  (AngloGold  Ashanti)  strategy  to  reduce  its  gold  hedging position  including  the  extent  and  effect  of  the  hedge  reduction,  the  economic  outlook  for  the  gold  mining  industry, expectations  regarding  spot  and  received  gold  prices,  production,  cash  costs  and  other  operating  results,  growth prospects,  the  resumption  of production  at  AngloGold  Ashanti’s  mines  in  Ghana,  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 consequences of any pending litigation proceedings or environmental issues.   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 by 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  be  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,  business  and  operational  risk management  and  other  factors  as  determined  in  “Item 3D.: Risk  factors”  and  elsewhere  in  this  annual  report.  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.
  AngloGold  Ashanti  undertakes  no  obligation  to  update  publicly  or  release  any  revisions  to  these  forward-looking statements  to  reflect  events  or  circumstances  after  the  date  of  the  annual  report  or  to  reflect  the  occurrence  of unanticipated events. 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.


GLOSSARY OF SELECTED TERMSThe  following  explanations  are  not  intended  as  technical  definitions  but  should  assist  the  reader  in  understanding terminology  used  in  this  annual  report.  Unless  expressly  stated  otherwise,  all  explanations  are  applicable  to  both underground and surface mining operations.
 Mining terms
  BIFBanded Ironstone Formation.  A chemically formed iron-rich sedimentary rock.
 By-productsAny products that emanate from the core process of producing gold, including silver, uranium and sulfuric acid.
 Calc-silicate rockA  metamorphic  rock  consisting  mainly  of  calcium-bearing  silicates  such  as  diopside  and  wollastonite,  and  formed  by metamorphism of impure limestone or dolomite.
 Carbon-in-leach (CIL)Gold is leached from a slurry of gold ore with cyanide in agitated tanks and adsorbed on to carbon granules in the same circuit. The carbon granules are separated from the slurry and treated in an elution circuit to remove the gold.
 Carbon-in-pulp (CIP)Gold is leached conventionally from a slurry of gold ore with cyanide in agitated tanks.  The leached slurry then passes into  the  CIP  circuit  where  carbon  granules  are  mixed  with  the  slurry  and  gold  is  adsorbed  on  to  the  carbon.  The granules are separated from the slurry and treated in an elution circuit to remove the gold.
 ComminutionComminution is the crushing and grinding of ore to make gold available for treatment. (See also ‘Milling’).
 Contained goldThe total gold content (tons multiplied by grade) of the material being described.
 Cut-off Grade (Surface Mines)The minimum grade at which a unit of ore will be mined and treated to achieve a desired economic outcome.
 DepletionThe decrease in quantity of ore in a deposit or property resulting from extraction or production.
 DevelopmentThe process of accessing an orebody through shafts and/or tunneling in underground mining operations.
 DioriteAn igneous rock formed by the solidification of molten material (magma).
 DoréImpure alloy of gold and silver produced at a mine to be refined to a higher purity, usually consisting of 85 percent gold on average.
 Electro-winningA process of recovering gold from solution by means of electrolytic chemical reaction into a form that can be smelted easily into gold bars.
 ElutionRecovery of the gold from the activated carbon into solution before zinc precipitation or electro-winning.
 GradeThe quantity of gold contained within a unit weight of gold-bearing material generally expressed in ounces per short ton of ore (oz/t), or grams per metric tonne (g/t). GreenschistA schistose metamorphic rock whose green color is due to the presence of chlorite, epidote or actinolite. Gold ProducedRefined gold in a saleable form derived from the mining process.
 
 LeachingDissolution of gold from crushed or milled material, including reclaimed slime, prior to adsorption on to activated carbon.


Life-of-mine (LOM)Number of years that the operation is planning to mine and treat ore, and is taken from the current mine plan. Metallurgical plantA processing plant erected to treat ore and extract gold. MillingA process of reducing broken ore to a size at which concentrating can be undertaken. (See also ‘Comminution’). Mine call factorThe  ratio,  expressed  as  a  percentage,  of  the  total  quantity  of  recovered  and  unrecovered  mineral  product  after processing  with  the  amount  estimated  in  the  ore  based  on  sampling.  The  ratio  of  contained  gold  delivered  to  the metallurgical plant divided by the estimated contained gold of ore mined based on sampling.  Mineral depositA mineral deposit is a concentration (or occurrence) of material of possible economic interest in or on the Earth’s crust. Ore ReserveThat  part  of  a  mineral  deposit  which  could  be  economically  and  legally  extracted  or  produced  at  the  time  of  the  Ore Reserve determination.
 
 Ounce (oz) (troy)Used in imperial statistics.  A kilogram is equal to 32.1507 ounces.  A troy ounce is equal to 31.1035 grams. Pay limitThe grade of a unit of ore at which the revenue from the recovered mineral content of the ore is equal to the total cash cost,  including  that  of  Ore  Reserve  development  and  stay-in-business  capital.    This  grade  is  expressed  as  an  in-situ value in grams per tonne or ounces per short ton (before dilution and mineral losses). PrecipitateThe solid product of chemical reaction by fluids such as the zinc precipitation referred to below. Probable ReserveOre Reserves for which quantity and grade are computed from information similar to that used for Proven Reserves, but the  sites  for  inspection,  sampling,  and  measurement  are  further  apart  or  are  otherwise  less  adequately  spaced.  The degree  of  assurance,  although  lower  than  that  for  Proven  Reserves,  is  high  enough  to  assume  continuity  between points of observation.
 
 ProductivityAn  expression  of  labor  productivity  based  on  the  ratio  of  grams  of  gold  produced  per  month  to  the  total  number  of employees in mining operations. Proven ReserveOre Reserves for which the (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes;  grade  is  computed  from  the  results  of  detailed  sampling  and  (b)  the  sites  for  inspection,  sampling  and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of the Ore Reserves are well established.  Project capitalCapital  expenditure  to  either  bring  a  new  operation  into  production;  to  materially  increase  production  capacity;  or  to materially extend the productive life of an asset. ReclamationIn  the  South  African  context,  reclamation  describes  the  process  of  reclaiming  slimes  (tailings)  dumps  using  high-pressure water cannons to form slurry which is pumped back to the metallurgical plants for processing.Recovered gradeThe recovered mineral content per unit of ore treated. Reef A gold-bearing sedimentary horizon, normally a conglomerate band that may contain economic levels of gold.
 
 RefiningThe final purification process of a metal or mineral. RehabilitationThe process of reclaiming  land disturbed by  mining to allow an appropriate post-mining  use.  Rehabilitation standards are defined by country-specific laws including, but not limited to the South African Department of Mineral Resource, the US Bureau  of Land Management, the US Forest Service, and the relevant Australian mining  authorities, and address among other issues, ground and surface water, topsoil, final slope gradient, waste handling and re-vegetation issues.Seismic eventA sudden inelastic deformation within a given volume of rock that radiates detectable seismic energy.


ShaftA  vertical  or  sub-vertical  excavation  used  for  accessing  an  underground  mine;  for transporting  personnel,  equipment and supplies; for hoisting ore and waste; for ventilation and utilities; and/or as an auxiliary exit. SkarnA rock of complex mineralogical composition, formed by contact metamorphism and metasomatism of carbonate rocks.SmeltingA pyro-metallurgical operation in which gold is further separated from impurities.StopeUnderground excavation where the orebody is extracted.StopingThe process of excavating ore underground.Stripping ratioThe ratio of waste tonnes to ore tonnes mined calculated as total tonnes mined less ore tonnes mined divided by ore tonnes mined.SyngeneticFormed contemporaneously with the deposition of the sediment.TailingsFinely ground rock of low residual value from which valuable minerals have been extracted.
 Tailings dam (slimes dam)Dam facilities designed to store discarded tailings.TonneUsed in metric statistics. Equal to 1,000 kilograms.TonUsed in imperial statistics. Equal to 2,000 pounds. Referred to as a short ton.TonnageQuantity of material measured in tons or tonnes.WasteMaterial that contains insufficient mineralization for consideration for future treatment and, as such, is discarded.YieldThe amount of valuable mineral or metal recovered from each unit mass of ore expressed as ounces per short ton or grams per metric tonne.Zinc precipitationZinc precipitation is the chemical reaction using zinc dust that converts gold in solution to a solid form for smelting into unrefined gold bars.


Financial terms
 Average number of employeesThe monthly average number of production and non-production employees and contractors employed during the year, where contractors are defined as individuals who have entered into a fixed-term contract of employment with a group company or subsidiary. Employee numbers of joint ventures represents the group’s attributable share.
 
 Capital expenditureTotal capital expenditure on tangible assets.
 
 Discontinued operationsA component of an entity that, pursuant to a single plan, has been disposed of or abandoned or is classified as held for sale until conditions precedent to the sale have been fulfilled. Effective tax rateCurrent and deferred taxation as a percentage of profit before taxation.Monetary assetAn asset which will be settled in a fixed or easily determinable amount of money.RegionDefines  the operational  management  divisions  within  AngloGold  Ashanti  and  these  are  Southern  Africa  (South  Africa and Namibia), Continental Africa (Ghana, Guinea, Mali, and Tanzania), Australasia (Australia), North America (United States of America) and South America (Argentina and Brazil).Related partyParties are considered related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions.Significant influenceThe  ability,  directly  or  indirectly,  to  participate  in,  but  not  exercise  control  over,  the  financial  and  operating  policy decisions of an entity so as to obtain economic benefit from its activities.Total cash costsTotal cash costs  include site costs for all mining, processing and  onsite  administration, reduced by contributions from by-products  and  are  inclusive  of  royalties  and  production  taxes.  Depreciation,  depletion,  amortization,  rehabilitation, corporate administration, employee severance costs, capital and exploration costs are excluded.  Total cash costs per ounce are the attributable total cash costs divided by the attributable ounces of gold produced.Total production costs Total cash costs plus depreciation, depletion and amortization, employee severance costs, rehabilitation and other non-cash  costs.  Corporate  administration  and  exploration  costs  are  excluded.    Total  production  costs  per  ounce  are  the attributable total production costs divided by the attributable ounces of gold produced.Weighted average number of ordinary sharesThe  number  of  ordinary  shares  in  issue  at  the  beginning  of  the  year,  increased  by  shares  issued  during  the  year, weighted on a time basis for the period during which they have participated in the income of the group and increased by share options that are virtually certain to be exercised.
 Currencies
 $, US$ or dollar


10
 
 Abbreviations
 
 ADS
 American Depositary Share
 ADR
 American Depositary Receipt
 ASX
 Australian Securities Exchange
 Au
 Contained gold
 bn
 Billion
 capex
 Capital expenditure
 CDI
 Chess Depositary Interests
 CLR
 Carbon Leader Reef
 FCFA
 Francs Communauté Financiére Africaine
 FIFR
 Fatal injury frequency rate per million hours worked
 G or g
 Grams
 g/t
 Grams per tonne
 g/TEC
 Grams per total employee costed
 GhDS
 Ghanaian Depositary Share
 GhSE
 Ghana Stock Exchange
 JORC
 Australasian Code for Reporting Exploration results, Mineral Resources and Ore Reserves
 JIBAR
 Johannesburg Interbank Agreed Rate
 JSE
 JSE Limited (the stock exchange in Johannesburg, South Africa)
 King Code
 the South African King Code on Code of Corporate Governance 2002 (King II) or the South African King Code on Corporate Governance 2009 (King III)
 Kg
 Kilograms
 LSE
 London Stock Exchange
 LIBOR
 London Interbank Offer Rate
 LOM
 Life-of-mine
 LTIFR
 Lost-time injury frequency rate per million hours worked
 (1)
 
 m2/TEC
 Square meters per total employee costed
 M or m
 Meter or million, depending on the context
 Moz
 Million ounces
 Mt
 Million tonnes or tons
 Mtpa
 Million tonnes/tons per annum
 NOSA
 National Occupational Safety Association
 NPSE
 Normal Purchase Normal Sales Exemption
 NYSE
 New York Stock Exchange
 Oz
 Ounces (troy)
 oz/t
 Ounces per ton
 RIFR
 Reportable injury frequency rate per million hours worked
 SAMREC
 South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves 2007 Edition
 SEC
 United States Securities and Exchange Commission
 SRP
 South African Securities Regulation Panel
 SOX
 Sarbanes-Oxley Act of 2002
 T
 Tons (short) or tonnes (metric)
 Tpm or tpm
 Tonnes/tons per month
 Tpa or tpa
 Tonnes/tons per annum
 Tpd or tpd
 Tonnes/tons per day
 VCR
 Ventersdorp Contact Reef
 VCT
 Voluntary counseling and testing
 
 (1)
 Note that AngloGold Ashanti utilizes the strictest definition in reporting Lost-Time Injuries in that it includes all Disabling Injuries (where an individual is unable to return to his place of regular  work the next calendar day after the injury) and Restricted  Work  Cases  (where  the  individual  may  be  at  work,  but  unable  to  perform  full  or  regular  duties  on  the  next calendar day after the injury) within this definition.
 
 Rounding of figures in this report may result in computational discrepancies.


PART I
 
 ITEM 1: IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
   ITEM 2: OFFER STATISTICS AND EXPECTED TIMETABLE
 Not applicable.
 ITEM 3: KEY INFORMATION
 3A.
 SELECTED FINANCIAL DATA
 
 The selected financial  information set  forth below for  the years  ended December 31, 2007, 2008 and 2009  and  as  at December 31, 2008 and 2009 has been derived from, and should be read in conjunction with, the US GAAP financial statements  included  under  Item 18  of  this  annual  report.    The  selected  financial  information  for  the  years  ended December 31,  2005  and  2006  and  as  at  December 31,  2005,  2006  and  2007  has  been  derived  from  the  US  GAAP financial statements not included in this annual report.


12
 
 
   
   
 Year ended December 31,
 
  
   
   
   
      
   
  
   
  
   
 2005
 
 2006
 
 
 2007
 (1)
 
 
 2008
 (2)
 
 
 2009
 
 
  
  
   
 $
 
 
 
 $
 
 
 $
 
 $
 
 
 
 $
 
 
 
 
  
  
   
 (in millions, except share and per share amounts)
 
 
 
  
 Consolidated statement of income
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
   
   
   
      
   
  
   
  (3)
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  (4)
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
 (Profit)/loss  on  sale  of  assets,  realization  of loans, indirect taxes and other
 
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
 Loss from continuing operations before income tax, equity income in affiliates and cumulative effect of accounting change
  
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
 Net loss from continuing operations before cumulative effect of accounting change
 
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
 Less: Net income attributable to noncontrolling interests
 
   
   
   
      
   
  
   
  
   
   
   
      
   
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
   
   
   
      
   
  
   
  
   
   
  
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  (5)
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
 Net loss - attributable to AngloGold Ashanti common stockholders
 
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  (5)
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
  
   
   
   
      
   
  
   
 Net loss - attributable to AngloGold Ashanti common stockholders


13
 
 
 2005
 2006
 2007
  2008
  2009
 
 
 Consolidated balance sheet data (as at period end)
  
 
  
 
  
 
 
  
 
  
  
 
  
  
 
 
  
 
  
 
 
  
 
  
  
 
  Cash and cash equivalents and restricted cash
  204
  
 482
 514
 619
  
 1,165
  
  
 
  Other current assets
  1,197
  
 1,394
 1,599
 2,328
  
 1,646
  
  
 
  Property,  plant  and  equipment,  ,  and  acquired properties, net
  6,439
  
 6,266
 6,807
 5,579
  
 6,285
  
  
 
  Goodwill and other intangibles, net
  550
  
 566
 591
 152
  
 180
  
  
 
  Materials on the leach pad (long-term)
  116
  
 149
 190
 261
  
 324
  
  
 
  Other  long-term  assets,  derivatives,  deferred taxation assets and other long-term inventory
  607
  
 656
 680
 512
  
 1,062
  
  
 
  
  
 
 
 
 
  
 
  
 
 
  
 
  
  
 
  Total assets
  9,113
  
 9,513
 10,381
 9,451
  
 10,662
  
  
 
  Current liabilities
  1,874
  
 2,467
 3,795
 3,458
  
 4,475
  
  
 
  Provision for environmental rehabilitation
  325
  
 310
 394
 302
  
 385
  
  
 
  Deferred taxation liabilities
  1,152
  
 1,275
 1,345
 1,008
  
 1,171
  
  
 
  Other long-term liabilities, and derivatives
  2,539
  
 2,092
 2,232
 1,277
  
 1,186
  
  
 
  Equity
  3,223
  
 3,369
 2,615
 3,406
  
 3,445
  
  
 
  
  
 
  
 
  
 
 
  
 
  
  
 
  Total liabilities and equity
  9,113
  
 9,513
 10,381
 9,451
  
 10,662
  
  
 
  
  
 
  
 
  
 
 
  
 
  
 
  Capital  stock  (exclusive  of  long-term  debt  and redeemable preferred stock)
  10
  
 10
 10
 12
  
 12
  
 
  Number  of  common  shares  as  adjusted  to  reflect changes in capital stock
  264,938,432
  
 276,236,153
 277,457,471
 353,483,410
  
 362,240,669
  
 
  Net assets
  3,223
  
 3,369
 2,615
 3,406
  
 3,445
  
 
  
  
 
 
  
 
  
 
 
  
 
  
 
  
  
 
  
 
  
 
 
  
 
  
 
  
  
 
  
 
  
 
 
  
 
  
 (1)
 
 Includes  the  acquisition  of  15  percent  minority  interest  acquired  in  the  Iduapriem  and  Teberebie  mine  with  effect  from  September  1,  2007.  See  “Item  4A.:  History  and development of the company”.
 
 
 (2)
 
 2008 results include the acquisition of the remaining 33 percent shareholding in the Cripple Creek and Victor Gold Mining Company with effect from July 1, 2008.  In prior years, the investment was consolidated as a subsidiary.  The 2008 treatment is therefore consistent with that of prior years. See “Item 4A: History and development of the company”.
 
 
 (3)
 
 Product sales represent revenue from the sale of gold.
 (4)
 
 Operating costs  include  production costs, exploration costs, related party transactions,  general  and administrative, market development costs, research  and  development, employment severance costs and other.
 
 
 (5)
 
 The calculations of basic and diluted earnings/(loss) per common share are described in note 9 to the consolidated financial statements “Loss per common share”. Amounts reflected exclude E Ordinary shares.
 
 (6)
 Includes noncontrolling interests.


Annual dividendsThe table below sets forth the amounts of interim, final and total dividends paid in respect of the past five years in cents per ordinary share. In respect of 2009, AngloGold Ashanti’s board of directors declared an interim dividend of 60 South African  cents  per  ordinary  share  on  July 29,  2009,  with  a  record  date  of  August  21,  2009,  and  a  payment  date  of August 28, 2009, and a final dividend of 70 South African cents per ordinary share on February 16, 2010, with a record date of March 12, 2010 and a payment date of March 19, 2010.
 
  
 
 
 Interim
 Final
 Total
 Interim
 Final
 Total
 
 
 Year ended December 31
 (South African cents per ordinary share)
 (US cents per ordinary share
 (1)
 )
 
     
         
         
         
         
         
           
  (1)
 Dividends for these periods were declared in South African cents.  US dollar cents per share figures have been calculated based
 on exchange rates prevailing on each of the respective payment dates.
 
 Dividends are proposed and approved by the board of directors of AngloGold Ashanti, based on the interim and year-end  financial  statements.    Dividends  are  recognized  when  declared  by  the  board  of  directors  of  AngloGold  Ashanti.  AngloGold Ashanti expects to continue to pay dividends, although there can be no assurance that dividends will be paid in the future or as to the particular amounts that will be paid from year to year.  The payment of future dividends will be dependent  upon  the  board’s  ongoing  assessment  of  AngloGold  Ashanti’s  cash  flow,  earnings,  planned  capital expenditures,  financial  condition  and  other  factors.  AngloGold  Ashanti  will  continue  to  manage  capital  expenditure  in line  with  profitability  and  cash  flow,  and  its  approach  to  the  dividend  on  the  basis  of  prudent  financial  management. Under South African law, AngloGold Ashanti may declare and pay dividends from any capital and reserves included in total  shareholders’  equity  calculated  in  accordance  with  IFRS,  subject  to  its  solvency  and  liquidity.  Dividends  are payable to shareholders registered at a record date that is after the date of declaration. Dividends  may  be  declared  in  any  currency  at  the  discretion  of  the  AngloGold  Ashanti  board  or  AngloGold  Ashanti shareholders  at  a  general  meeting.  Currently,  dividends  are  declared  in  South  African  rands  and  paid  in  Australian dollars,  South  African  rands,  British  pounds  and  Ghanaian  cedis.  Dividends  paid  to  registered  holders  of  AngloGold Ashanti  ADSs  are  paid  in  US dollars  converted  from  South  African  rands  by  The  Bank  of  New  York  Mellon,  as depositary, in accordance with the deposit agreement. Exchange rate fluctuations may therefore affect the value of the dividends  received  by  registered  shareholders  and  distributions  paid  by  the  relevant  depositary  to  investors  holding AngloGold Ashanti securities.   Moreover, fluctuations in the exchange rates of the British pound and the US dollar may have affected and are likely to affect the US dollar price of the ADSs on the NYSE and the US dollar equivalents of the United Kingdom pound price of the ordinary shares on the London Stock Exchange (LSE). For details on taxation and exchange controls applicable to holders  of  ordinary  shares  or  ADSs,  see  “Item 10D.:  Exchange  controls”  and  “Item 10E.:  Taxation –  Taxation  of dividends”. On February 21, 2007, the South African government announced a proposal to replace Secondary Tax on Companies with  a  10 percent  withholding  tax  on  dividends  and  other  distributions  payable  to  shareholders.    This  proposal  is expected to be implemented in 2010.  Although this may reduce the tax payable by the South African operations of the group thereby increasing distributable earnings, the withholding tax will generally reduce the amount of dividends and other distributions received by AngloGold Ashanti shareholders. Exchange rate information The  following  table  sets  forth,  for  the  periods  and  dates  indicated,  certain  information  concerning  US dollar/South African rand exchange rates expressed in rands per $1.00. On April 14, 2010, the interbank rate between South African rands and US dollars as reported by OANDA Corporation was R7.3019/$1.00.


15
 
 
 
 Year ended December 31
 High
 Low
 Year end
 Average
 (1)
 
 2005
  
 6.92
 5.64
 6.33
 6.35
 2006
  
 7.94
 5.99
 7.04
 6.81
 2007
  
 7.49
 6.45
 6.81
 7.03
 2008
  
 11.27
 6.74
 9.30
 8.26
 2009
  
 10.70
 7.21
 7.41
 8.44
 2010
  
 7.37
 7.17
 -
 7.28
 
 (1)
 The average rate of exchange on the last business day of each month during the year
 (2)
 Based on the noon buying rate in New York City for cable transfers as certified for customs purposes by the Federal Reserve Bank of New York
 (3)
 Based on the interbank rate as reported by OANDA Corporation
 (4)
 Through to April 14, 2010 based on the interbank rate as reported by OANDA Corporation
 
 
 
 
 
  Exchange rate information for the months of
 (1)
 
 
 
 High
 Low
 
 October 2009
 
  7.8636
 7.2120
 
 November 2009
 
  8.2035
 7.3076
 
 December 2009
 
  7.7692
 7.2649
 
 January 2010
 
  7.6662
 7.2289
 
 February 2010
 
  7.8939
 7.4183
 
 March 2010
 
  7.7131
 7.2129
 
 April 2010
  
 
  7.3795
 7.1731
 
 
  
 
  
 
 (1)
 Based on the interbank rate as reported by OANDA Corporation
 
 (2)
 Through April 14, 2010  based on the interbank rate as reported by OANDA Corporation


3B.     CAPITALIZATION AND INDEBTEDNESS Not applicable.3C. REASONS FOR THE OFFER AND USE OF PROCEEDS Not applicable.3D. RISK FACTORS
  The following  sections  describe  many  of  the  risk factors  that  could  affect  AngloGold  Ashanti.  However,  there  may  be additional risks unknown to AngloGold Ashanti and other risks, currently believed to be immaterial, that could turn out to be  material.  These  risks,  either  individually  or  simultaneously,  could  significantly  affect  the  group’s  business  and financial results.
   The  risk  factors  highlight  the  group’s  exposure  to  risk  without  explaining  how  these  exposures  are  managed  and mitigated or how some of the risks are also potential opportunities.
 Risks related to AngloGold Ashanti’s results of operations and its financial condition as a result of factors that impact the gold mining industry generally.
 Commodity market price fluctuations could adversely affect the profitability of AngloGold Ashanti's operations.
   AngloGold  Ashanti’s  revenues  are  primarily  derived from  the  sale of  gold  and,  to  a  lesser  extent,  uranium, silver  and sulfuric  acid.  The  market  prices  for  these  commodities  fluctuate  widely.  These  fluctuations  are  caused  by  numerous factors  beyond  AngloGold  Ashanti's  control.  For  example,  the  market  price  of  gold  may  fluctuate  for  a  variety  of reasons, including:
  •
 speculative positions taken by investors or traders in gold;
  changes in the demand for gold as an investment;
  changes in the demand for gold used in jewellery and for other industrial uses, including as a result of prevailing
 economic conditions;
  changes in the supply of gold from production, disinvestment, scrap and hedging;
  financial market expectations regarding the rate of inflation;
  strength of the US dollar (the currency in which the gold price trades internationally) relative to other currencies;
  changes in interest rates;
  actual or expected sales or purchases of gold by central banks and the International Monetary Fund;
  gold hedging and de-hedging by gold producers;
  global or regional political or economic events; and
  the cost of gold production in major gold producing countries.
   The market price of gold has recently experienced significant volatility. During 2009, the gold price traded from a record high of $1,226.10 per ounce to a low of $801.65 per ounce. On April 14, 2010, the afternoon fixing price of gold on the London Bullion Market was $1,153.75 per ounce.
   The  price  of  gold  is  often  subject  to  sharp,  short-term  changes  resulting  from  speculative  activities. While  the  overall supply of and demand for gold can affect its market price, because of the considerable size of above-ground stocks of the metal in comparison to other commodities, these factors typically do not affect the gold price in the same manner or degree that the supply of and demand for other commodities tends to affect their market price. In addition, the recent shift in gold demand from physical demand to investment and speculative demand may exacerbate the volatility of gold prices.


17
 
 A  sustained  period  of  significant  gold  price  volatility  may  adversely  affect  AngloGold  Ashanti's  ability  to  evaluate  the feasibility  of  undertaking  new  capital  projects  or  continuing  existing  operations  or  to  make  other  long-term  strategic decisions.
 
 If revenue from gold sales falls below the cost of production for an extended period, AngloGold Ashanti may experience losses  and  be  forced  to  curtail  or  suspend some  or  all  of  its  capital  projects  or  existing  operations,  particularly  those operations having operating costs that are flexible to such short- to medium-term curtailment or closure, or change its dividend payment policies. In addition, it would have to assess the economic impact of low gold prices on its ability to recover any losses that may be incurred during that period and on its ability to maintain adequate cash reserves.
 
 
 Foreign exchange fluctuations could have a material adverse effect on AngloGold Ashanti's operational results and financial condition.
 
 
 Gold  is  principally  a  dollar-priced  commodity,  and  most  of AngloGold  Ashanti's  revenues  are  realized  in,  or  linked  to, dollars  while  production  costs  are  largely  incurred  in  the  local  currency  where  the  relevant  operation  is  located.  As  a result  of  its  global  operations and  local  foreign  exchange  regulations,  some  of  AngloGold  Ashanti's funds  are  held  in local  currencies,  such  as  the  South  African  rand  and  the  Australian  dollar.  The  weakening  of  the  dollar,  without  a corresponding increase in the dollar price of gold against these local currencies, results in lower revenues and higher production costs  in dollar  terms. Conversely, the  strengthening  of the  dollar, without a  corresponding decrease in the dollar  price  of  gold  against  these  local  currencies,  yields  significantly  higher  revenues  and  lower  production  costs  in dollar  terms.  Exchange  rate  movements  may  have  a  material  effect  on  AngloGold  Ashanti's  operating  results.  For example, a 1 percent strengthening of the South African rand, Brazilian real, the Argentinean peso and the Australian dollar  against  the  US  dollar  will,  other  factors  remaining  equal,  result  in  an  increase  in  total  cash  costs  under International Financial Reporting Standards (IFRS) incurred of nearly $4 per ounce, or 1 percent.
 
 The  profitability  of  AngloGold  Ashanti's  operations,  and  the  cash  flows  generated  by  these  operations,  are significantly  affected by  fluctuations  in  input  production  prices,  many  of which  are  linked  to  the  prices  of  oil and steel.
 
 
 Fuel, energy and consumables, including diesel,  heavy  fuel  oil, chemical reagents,  explosives, tires, steel and mining equipment consumed in mining operations form a relatively large part of the operating costs and/or capital expenditures of  any mining company.  AngloGold  Ashanti has no influence  over the cost of  these consumables, many of which are linked to some degree to the price of oil and steel.
 
 
 The price of oil has recently been volatile, reaching a high of $79.43 per barrel and a low of $38.87 per barrel in 2009 as compared to an all-time high oil price of $145.11 per barrel on July 11 ,2008. AngloGold Ashanti has estimated that for each  $1  per  barrel  rise  in  the  oil  price,  other  factors  remaining  equal,  the  average  cash  costs  under  IFRS  of  all  its operations  increases  by  about  $0.41 per  ounce  with  the  cash  costs  of  certain  of  its  mines,  particularly  Geita,  Cripple Creek & Victor, Siguiri and Sadiola, which, being more dependent on fuel, are more sensitive to changes in the price of oil. Furthermore, the price of steel which is used in the manufacture of most forms of fixed and mobile mining equipment is also  a  relatively large contributor  to the operating costs and capital  expenditure of a mining  company and  has  also been volatile recently. For example, the price of flat HRC (North American Domestic FOB) steel reached a high of $656 per ton and a low of $410 per ton in 2009 as compared to an all time high price of $1,240 per ton during May 2008.
 
 
 Fluctuations in the price of oil and steel have a significant impact upon operating cost and capital expenditure estimates and, in the absence of other economic fluctuations, could result in significant changes in the total expenditure estimates for new mining projects or render certain projects non-viable.
 
 
 Energy  cost  increases,  and  power  fluctuations  and  stoppages,  could  adversely  affect  AngloGold  Ashanti's results of operations and its financial condition.
 
 
 AngloGold  Ashanti's  mining  operations  are  dependent  upon  electrical  power  generated  by  local  utilities  or  by  power plants situated at some of its operations.


18
 
 In South Africa, AngloGold Ashanti’s operations are substantially dependent on electricity supplied by Eskom, the state-owned utility. Eskom and the National Energy Regulator of South Africa, or the NERSA, continue to recognize the need for new  supply capacity and a series of  tariff increases  and  proposals have been tabled. In  the third  quarter of 2009, Eskom applied to NERSA for a tariff review to obtain an additional 45 percent increase annually for the next three years, which was later reduced to 35 percent annually for three years. On February 24, 2010, NERSA approved an increase of about  25 percent  per  year  for  three  years  and  as  energy  prices  represent  a  large  portion  of  AngloGold  Ashanti’s operating  costs  in  South  Africa,  the  resulting  increases  will  have  an  adverse  impact  on  the  cash  costs  of  its  South African operations.
 
 
 In addition, generating capacity was severely impaired in 2008 when Eskom warned that it could no longer guarantee the availability of its supply of electrical power to the South African mining industry. Consequently, AngloGold Ashanti, along with other mining companies with South African operations, was forced temporarily to suspend mining operations at its South African mines. AngloGold Ashanti’s South African mines continue to work within a constraint of 90 percent of average capacity.
 
 
 AngloGold Ashanti cannot give assurance that power supply to its South African operations will not experience future interruptions as the South African economic situation further improves, thereby potentially increasing the demand on the national grid system in South Africa.
 
 
 In Ghana, AngloGold Ashanti’s operations depend on hydroelectric power supplied by the Volta River Authority, or the VRA, an entity controlled by the government of Ghana which is supplemented by thermal power from the Takoradi plant as  well  as  the  smaller  unit  recently  commissioned  at  Tema.  The  VRA’s  principal  electricity  generating  facility  is  the Akosombo  Dam  and  during  periods  of  below  average  inflows  from  the  Volta  reservoir,  electricity  supplies  from  the Akosombo Dam may be curtailed,  as  occurred in 1998, 2006 and the first half of 2007. In  addition, during periods  of limited  electricity  availability,  the  national  power  system  is  subject  to  system  disturbances  and  voltage  fluctuations, which  can  damage  AngloGold  Ashanti's  equipment.  The  VRA  has  in  the  past  also  obtained  power  from  neighboring Côte d’Ivoire, which has intermittently experienced some political instability and civil unrest.
 
 
 From January 2009, and after negotiation, Ghana increased electricity charges at Obuasi from 9.2 to 9.3 US cents per kilowatt  hour and at Iduapriem from 9.2  to 10.2  US cents per kilowatt hour. Even though these rates are expected  to remain at these levels in the short term, they could be impacted by any significant spike in the crude oil price given the country’s dependence on light crude oil for firing the thermal power plants.
 
 
 AngloGold  Ashanti's  mining  operations  in  Guinea,  Tanzania  and  Mali  are  dependent  on  power  supplied  by  outside contractors and supplies of fuel being delivered by road. AngloGold Ashanti's power supply has been disrupted in the past and it has suffered resulting production losses as a result of equipment failure.
 
 
 Global economic conditions could adversely affect the profitability of AngloGold Ashanti's operations.
 
 
 AngloGold Ashanti's operations and performance depend significantly on worldwide economic conditions. During 2009, following  the  global  financial  crisis  that  had  severe  negative  impacts  upon  banking  systems,  financial  institutions  and financial  and  credit  markets  in  the  latter  half  of  2008,  general  economic  indicators  continued  to  deteriorate,  including declining  consumer  sentiment  and  business  confidence,  increased  unemployment,  reduced  levels  of  capital expenditure, ongoing disruption in financial and credit markets and uncertainty regarding corporate earnings. In recent months, certain indices and economic data have shown some signs of improvement and stabilization. However, there can be no assurance that these improvements will be broad-based or sustainable and how they will affect the markets relevant for AngloGold Ashanti remains uncertain.


19
 
 A  continuation  of  the  global  economic  downturn  may  have  follow-on  effects  on  AngloGold  Ashanti's  business.  For example:
 
 •
  •
   •
  sale  or  exchange  of financial  instruments  and  impairment  charges  may  be  incurred  with  respect  to  AngloGold Ashanti's investments;
 •
   •
   •
   
 
 In  addition,  uncertainty  regarding  global  economic conditions  may  also  increase  the  volatility  or  negatively  impact  the value of the market value of AngloGold Ashanti's securities.
 
 
 Inflation may have a material adverse effect on AngloGold Ashanti's operational results.
 
 
 Most  of  AngloGold  Ashanti's  operations  are  located  in  countries  that  have  experienced  high  rates  of  inflation  during certain periods.
 
 
 Since  AngloGold  Ashanti  is  unable  to  influence  the  market  price  at  which  it  sells  gold  it  is  possible  that  significantly higher  future  inflation  in  the  countries  in  which  AngloGold  Ashanti  operates  may  result  in  an  increase  in  future operational  costs  in  local  currencies  (without a  concurrent devaluation of  the  local  currency  of  operations against  the dollar  or  an  increase  in  the  dollar  price  of  gold). This could  have  a  material  adverse effect  upon  AngloGold  Ashanti's results of operations and its financial condition.
 
 
 While none of AngloGold Ashanti's operations are currently materially adversely affected by inflation, significantly higher and sustained  inflation in the future, with  a  consequent  increase in operational costs, could result in operations being reduced or rationalized at higher cost mines.
 
 
 AngloGold Ashanti faces many risks related to the development of its mining projects that may adversely affect its results of operations and profitability.
 
 
 The  profitability  of  mining  companies  depends,  in  part,  on  the  actual  costs of  developing  and  operating  mines,  which may  differ  significantly  from  estimates  determined  at  the  time  a  relevant  mining  project  was  approved  following  the completion  of  the  relevant feasibility  studies.  The  development  of  mining  projects  may  also  be  subject  to  unexpected problems and delays that could increase the cost of development and the ultimate operating cost of the relevant project.
 
 AngloGold Ashanti's decision to develop a mineral property is typically based, in the case of an extension or, in the case of  a  new  development,  on  the  results  of  a  feasibility  study.  Feasibility  studies  estimate  the  expected  or  anticipated project economic returns. These estimates are based on assumptions regarding:
 
 •
  •
  •
  •
  •
  •
  
 
 Actual  cash  operating  costs,  production  and  economic  returns  may  differ  significantly  from  those  anticipated  by  such studies  and  estimates.  Operating  costs  and  capital  expenditure  are  driven  to  a  significant  extent  by  the  costs  of  the commodity  inputs,  including  the  cost  of  fuel,  chemical  reagents,  explosives,  tires  and  steel,  consumed  in  mining activities and credits from by products, such as silver and uranium.


20
 
  There are a number of uncertainties inherent in the development and construction of an extension to an existing mine, or  in  the  development  and  construction  of  any  new  mine.  In  addition  to  those  discussed  above,  these  uncertainties include the:
 •
 timing and cost of the construction of mining and processing facilities, which can be considerable;
 •
 availability and cost of skilled labor, power, water and transportation facilities;
 •
 availability and cost of appropriate smelting and refining arrangements;
 •
 need  to  obtain  necessary  environmental  and  other  governmental  permits  and  the  time  to  obtain  such  permits;
   •
 availability of funds to finance construction and development activities.
 
 The cost, timing and complexities of mine development and construction can increase because of the remote location of many  mining  properties.  New  mining  operations  could  experience  unexpected  problems  and  delays  during development,  construction  and  mine  start-up.  In  addition,  delays  in  the  commencement  of  mineral  production  could occur. Finally, operating cost and capital expenditure  estimates could fluctuate  considerably  as  a result of changes in the prices of commodities consumed in the construction and operation of mining projects.
 
 Accordingly,  AngloGold  Ashanti's  future  development  activities  may  not  result  in  the  expansion  or  replacement  of current  production  with  new  production,  or  one  or  more  new  production  sites  or  facilities  may  be  less  profitable  than currently anticipated or may not be profitable at all. AngloGold Ashanti’s operating results and financial conditions are directly  related  to  the  success  of  its  project  developments.  A  failure  in  AngloGold  Ashanti’s  ability  to  develop  and operate mining projects in accordance with, or in excess of, expectations could negatively affect its results of operations and its financial condition and prospects.AngloGold  Ashanti  faces  uncertainty  and  risks  in  its  exploration,  feasibility  studies  and  other  project evaluation activities. Exploration activities are speculative in nature and feasibility studies and other project evaluation activities necessary to determine whether a viable mining operation exists or can be developed are often unproductive. These activities also often require substantial expenditure to establish the presence, and to quantify the extent and grades (metal content), of mineralized  material  through  exploration  drilling.  AngloGold  Ashanti  undertakes  feasibility  studies  to  estimate  the technical  and  economic  viability  of  mining  projects,  including  the  determination  of  appropriate  mining  methods  and metallurgical  recovery  processes  to  mine  and  extract  gold  from  the  ore.  These  activities  are  undertaken  in  order  to estimate the Ore Reserve.
  Once mineralization is discovered it can take several years to determine whether adequate ore reserves exist. During this time, the economic feasibility of production may change owing to fluctuations in factors that affect revenue, as well as cash and other operating costs, including: •  •  •  Feasibility studies also include activities to estimate: •   •  •  These estimates depend upon the data available and the assumptions made at the time the relevant estimate is made. Ore  Reserve  estimates  are  not  precise  calculations  and  depend  on  the  interpretation  of  limited  information  on  the location,  shape  and  continuity  of  the  occurrence  and  on  the  available  sampling  results.  Further  exploration  and feasibility studies can result in new  data becoming  available that may change previous Ore  Reserve estimates which will impact upon both the technical and economic viability of production from the relevant mining project. Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves  resulting  in  revisions  to  previous  Ore  Reserve  estimates.  These  revisions  could  impact  depreciation  and amortization rates, asset-carrying values provisions for closedown, restoration and environmental clean-up costs.


21
 
  AngloGold  Ashanti  undertakes  annual  revisions  to  its  Ore  Reserve  estimates  based  upon  actual  exploration  and production results, depletion, new information on geology and fluctuations in production, operating and other costs and economic  assumptions.  These  factors  may  result  in  reductions  in  its  Ore  Reserve  estimates,  which  could  adversely affect  the life-of-mine plans and  consequently the  total value  of AngloGold Ashanti's mining  asset base. Ore Reserve restatements  could  negatively  affect  AngloGold  Ashanti’s  results,  financial  condition  and  prospects,  as  well  as  its reputation.
  The  increased  demand  for  gold  and  other  commodities,  combined  with  a  declining  rate  of  discovery,  has  resulted  in existing  reserves  being  depleted  at  an  accelerated  rate  in  recent  years.  AngloGold  Ashanti  therefore  faces  intense competition  for  the  acquisition  of  attractive  mining  properties.  From  time  to  time,  AngloGold  Ashanti  evaluates  the acquisition  of  Ore  Reserve,  development  properties  and  operating  mines,  either  as  stand-alone  assets  or  as  part  of companies.  AngloGold  Ashanti’s  decisions  to  acquire  these  properties  have  historically  been  based  on  a  variety  of factors including historical operating results, estimates of and assumptions regarding the extent of Ore Reserve, cash and other operating costs, gold prices and projected economic returns and evaluations of existing or potential liabilities associated  with  the  relevant  property  and  its  operations  and  how  these  factors  may  change  in  the future.  Other  than historical operating results, all of these factors are uncertain and could have an impact upon revenue, cash and other operating issues, as well as the uncertainties related to the process used to estimate Ore Reserve. As a result of these uncertainties, the exploration programs and acquisitions engaged in by AngloGold Ashanti may not result  in  the  expansion  or  replacement  of  the  current  production  with  new  Ore  Reserve  or  operations.  AngloGold Ashanti’s operating results  and financial condition  are directly related to  the success of its exploration  and acquisition efforts  and  its  ability  to  replace  or  increase  existing  Ore  Reserve.  If  AngloGold  Ashanti  is  not  able  to  maintain  or increase its reserves, its results of operations and its financial condition and prospects could be adversely affected. AngloGold  Ashanti  faces  many  risks  related  to  its  operations  that  may  adversely  affect  its  cash  flows  and overall profitability. Gold  mining  is  susceptible  to  numerous  events  that  may  have  an  adverse  impact  on  a  mining  business,  its  ability  to produce gold and meet its production targets. These events include, but are not limited to:
 •
  •
  •
  •
  •
  •
  •
  •
  •
  •
  •
  •
  •
  •
  •
  •
  •
  •
   Seismic activity is of particular concern in underground mining operations, particularly in South Africa due to the extent and extreme depth of mining, and also in Australia and Brazil due to the depth of mining and residual tectonic stresses. Despite  the  implementation  of  technology  and  modifications  to  mine  layouts  and  support  technology  with  a  view  to minimizing the incidence and impact of seismic activity, seismic events have in the past, and may in the future, cause the death of, or injury to, employees and contractors.


22
 
 Seismic  activity  may  also  cause  the  loss  of  mining  equipment,  damage  to,  or  destruction  of,  mineral  properties  or production  facilities,  monetary  losses,  environmental  damage  and  potential  legal  liabilities  in  South  Africa  and elsewhere  where  seismic  activity  may  be  a  factor.  As  a  result,  these  events  may  have  a  material  adverse  effect  on AngloGold Ashanti's results of operations and its financial condition. AngloGold Ashanti is subject to extensive health and safety laws and regulations. Gold  mining  operations  are  subject  to a  variety  of  industry-specific health and  safety  laws  and  regulations  depending upon the jurisdiction in which they are located. These laws and regulations are designed to improve and to protect the safety and health of employees.
  From time to time, new health and safety laws and regulations, or amendments to existing health and safety laws and regulations,  are  introduced  in  the  jurisdictions  in  which  AngloGold  Ashanti  operates.  Should  compliance  with  new standards require a material increase in expenditure or material interruptions to its operations or production, including as a result of any temporary failure to comply with applicable regulations, AngloGold Ashanti's results of operations and its  financial  condition  could  be  adversely  affected.  For  example,  in  South  Africa  the  government  has  introduced compulsory shutdowns of operations to enable investigations into the  cause  of accidents that have occurred at those operations and certain of AngloGold Ashanti’s operations have been temporarily suspended for this reason in the past. In  addition,  AngloGold  Ashanti’s  reputation  as  a  responsible  company  and  employer  could  be  damaged  by  any significant governmental investigation or enforcement of health and safety standards. Any of these factors could have a material adverse effect on AngloGold Ashanti’s results of operations and financial condition. Mining  companies  are  increasingly  required  to  consider  and  ensure  the  sustainable  development  of,  and provide  benefits  to,  the  communities  and  countries  in  which  they  operate,  and  are  subject  to  extensive environmental laws and regulations. As  a  result  of  public  concern  about  the  perceived  ill  effects  of  economic  globalization,  business  generally  and  large multinational corporations, such as AngloGold Ashanti, in particular, face increasing public scrutiny of their activities. These businesses are under pressure to demonstrate that, as they seek to generate satisfactory returns on investment to  shareholders,  other  stakeholders,  including  employees,  communities  surrounding  operations  and  the  countries  in which  they  operate,  benefit  and  will  continue  to  benefit  from  their  commercial  activities.  Such  pressures  tend  to  be particularly  focused  on  companies  whose  activities  are  perceived  to  have  a  high  impact  on  their  social  and  physical environment.  The  potential  consequences  of  these  pressures  include  reputational  damage,  legal  suits  and  social spending obligations.
  The location of existing and proposed mining operations often coincides with the location of existing towns and villages, natural water courses and other infrastructure. Mining operations must therefore be designed to minimize their impact on such communities and the  environment, either by changing mining plans to avoid impacts,  modifying mining plans and operations, or relocating the relevant people to an agreed location. These measures may include agreed levels of compensation  for  any  adverse  impact  the  mining  operation  may  continue  to  have  upon  the  community.  The  cost  of these  measures  could  increase  capital  and  operating  costs  and  therefore  could  have  an  adverse  impact  upon  the results of operations.
  AngloGold Ashanti  is subject to the above factors at certain of  its existing and proposed mining  sites and  at all of its exploration sites. Mining companies are also subject to extensive environmental laws and regulations in the various jurisdictions in which they  operate.  These  regulations  establish  limits  and  conditions  on  producers'  ability  to  conduct  their  operations.  The cost of AngloGold Ashanti's compliance with environmental laws and regulations has been, and is expected to continue to be, significant. For example, during the first quarter of 2010, following discussions with the Environmental Protection Agency of Ghana in relation to potentially adverse environmental impacts arising from the current tailings storage facility at Iduapriem and pending a revised water management strategy at  Obuasi, AngloGold Ashanti’s Iduapriem mine and gold processing at the Obuasi mine in Ghana have been suspended.  In 2009, Iduapriem and Obuasi mines produced 190,000 ounces and 381,000 ounces of gold respectively and together accounted for some 12% of AngloGold Ashanti’s global production.


23
 
 Environmental laws and regulations are continually changing and are generally becoming more restrictive. If AngloGold Ashanti's  environmental  compliance  obligations  alter  as  a  result  of  changes  in  laws  and  regulations,  or  in  certain assumptions it makes to estimate liabilities, or if unanticipated conditions arise at its operations, including any temporary failure  to  comply  with  regulations,  standards  or  operating  procedures  requiring  its  operations  to  be  suspended,  its expenses  and  provisions  would  increase  and  its  rate  of  production  and  revenue  could  be  adversely  impacted.  If material,  these  expenses  and  provisions  could  adversely  affect  AngloGold  Ashanti's  results  of  operations  and  its financial condition.
 
 Mining companies are required by law to close their operations and rehabilitate the lands that they mine at the end of the  life  of  the  mine.  Estimates  of  the  total  ultimate  closure  and  rehabilitation  costs  for  gold  mining  operations  are significant  and  based  principally  on  current  legal  and  regulatory  requirements  that  may  change  materially. Environmental  liabilities  are  accrued  when  they  become  known,  probable  and  can  be  reasonably  estimated. Increasingly,  regulators  are  seeking  security  in  the  form  of  cash  collateral  or  bank  guarantees  in  respect  of environmental obligations, which could have an adverse effect on AngloGold Ashanti's financial condition.
 
 Costs associated with rehabilitating land disturbed by the mining processes and addressing the environmental, health and  community  issues  are  estimated  and  financial  provision  made  based  upon  information  available  currently. Estimates  may  however  be  insufficient  and  further  costs  may  be  identified  at  any  stage.  Any  underestimated  or unidentified  rehabilitation  costs  would  reduce  earnings  and could  materially  and  adversely  affect  AngloGold  Ashanti's asset values, earnings and cash flows.
 
 Compliance with  emerging  climate  change  regulation  could  result  in  significant  costs  to  AngloGold  Ashanti, and climate change may present physical risks to the company’s operations.
 
 Greenhouse gases,  or GHGs, are  emitted directly by AngloGold Ashanti’s operations and indirectly  as  a result of the consumption  of  electricity  purchased  from  external  utilities.  Emissions  from  electricity  consumption  are  indirectly attributable to the company’s operations. Currently, a number of international and national measures to address or limit GHG  emissions,  including  the  Kyoto  Protocol  and  the  Copenhagen  Accord,  are  in  various  phases  of  discussion  or implementation  in  the  countries  in  which  the  company  operates.  These  measures  could  result  in  requirements  for AngloGold Ashanti to reduce its direct and indirect GHG emissions. For example:
 •
  Scheme,  which  would  cap  national  emissions  and  require  certain  companies  whose  emissions  exceed  the agreed threshold to obtain allowances to emit GHGs. AngloGold Ashanti may be required under this scheme to purchase  allowances  for  emissions  starting  in 2011.  The  company  is  already  required  to  report  its  GHG emissions to the Australian government under the National Greenhouse and Energy Reporting Act;
 •
  a white paper in late 2010, with GHG legislation likely to be enacted in 2011. It is possible this legislation will cap national  emissions  and  introduce  a  trading  scheme  for  GHG  emission  allowances  and/or  extend  the  current carbon tax;
 •
  the company remains unclear, as no legislation has yet been finalized. In December 2009, the US Environmental Protection Agency finalized a GHG endangerment finding under the US Clean Air Act, from which initiatives to curb or regulate GHGs emitted from a number of industries may arise; and
 •
  the  main  cause  of  Brazil’s  GHG  emissions.  While  Brazil  is  not  yet  formally  regulating  GHG  emissions  at  the national  level,  some  state  environmental  agencies  request  companies  to  voluntarily  submit  GHG  emissions management plans.
 
 
 Some of these measures already result in increased compliance costs for AngloGold Ashanti’s power suppliers, and are passed  through  to  the  company  in  the  form  of  price  increases.  For  instance,  in  South  Africa  since  2009,  AngloGold Ashanti pays a levy of ZAR0.02 per kilowatt hour for electricity generated from fossil fuels. These levies may increase over time and additional levies may be introduced in the future in South Africa or other countries, which could result in a significant increase in the company’s costs.
 
 In addition, AngloGold Ashanti’s operations could be exposed to a number of physical risks from climate change, such as increased rainfall, reduced water availability, higher temperatures and extreme weather events. Events or conditions such  as  flooding  or  inadequate  water  supplies  could  disrupt  the  company’s  mining  and  transport  operations,  mineral processing  and  rehabilitation  efforts,  and  could  increase  health  and  safety  risks  onsite.  In  addition,  such  events  or conditions could have adverse effects such as increased disease prevalence in AngloGold Ashanti’s workforce and in communities in close proximity to the company’s operations.


Mining operations and projects are vulnerable to supply chain disruption and AngloGold Ashanti’s operations and  development  projects  could  be  adversely  affected  by  shortages  of,  as  well  as  lead  times  to  deliver, strategic spares, critical consumables, mining equipment or metallurgical plant.
  
 AngloGold Ashanti's operations and development projects could be adversely affected by shortages of, as well as lead times  to  deliver,  strategic  spares,  critical  consumables,  mining  equipment  and  metallurgical  plant.  In  the  past, AngloGold Ashanti  and  other gold  mining companies  have experienced shortages in critical consumables,  particularly as production capacity in the global mining industry has expanded in response to increased demand for commodities, and AngloGold Ashanti has experienced increased delivery times for these items. These shortages have also resulted in  unanticipated  increases  in  the  price  of  certain  of  these  items.  Shortages  of  strategic  spares,  critical  consumables, mining  equipment  or  metallurgical  plant,  which  could  occur  in  the  future,  could  result  in  production  delays  and production shortfalls, and increases in prices result in an increase in both operating costs and the capital expenditure to maintain and develop mining operations.
 
 AngloGold  Ashanti  and  other  gold  mining  companies,  individually,  have  limited  influence  over  manufacturers  and suppliers  of  these  items.  In  certain  cases  there  are  only  limited  suppliers  for  certain  strategic  spares,  critical consumables, mining equipment or metallurgical plant who command superior bargaining power relative to AngloGold Ashanti, or AngloGold Ashanti could at times face limited supply or increased lead time in the delivery of such items.
 
 AngloGold Ashanti’s procurement policy is to only source its mining and processing equipment and consumables from suppliers that meet its corporate values and ethical standards. In certain locations where a limited number of suppliers meet these standards, this places further strain  upon  its supply chain, thereby increasing AngloGold Ashanti’s cost  of supply and time of delivery.
 
 If  AngloGold  Ashanti  experiences  shortages,  or  increased  lead  times  in  delivery  of  strategic  spares,  critical consumables,  mining  equipment  or  processing  plant,  its  results  of  operations  and  its  financial  condition  could  be adversely affected.
 
 Diversity in interpretation and application of accounting literature in the mining industry may impact AngloGold Ashanti's reported financial results.
  
 The mining industry  has  limited industry-specific accounting  literature. As a  result, diversity exists in the  interpretation and application of accounting literature to mining specific issues. For example, AngloGold Ashanti capitalizes the drilling and related costs incurred to define and delineate a residual mineral deposit that has not been classified as proved and probable reserves at a development stage or production stage mine, whereas some companies expense such costs. As and  when  diversity  in  interpretation  and  application  is  addressed,  it  may  impact  AngloGold  Ashanti's  reported  results should the adopted interpretation differ from the position followed by AngloGold Ashanti.
 
 Risks  related  to  AngloGold  Ashanti’s  results  of  operations  and  its  financial  condition  as  a  result  of  factors specific to AngloGold Ashanti and its operations.
 
 AngloGold  Ashanti  also  faces  many  specific  risks  related  to  its  operations  that  may  affect  its  cash  flows  and  overall profitability.
 
 AngloGold Ashanti uses gold hedging instruments and have entered into long-term sales contracts, which may prevent the company from realizing potential gains from subsequent commodity price increases.
   AngloGold Ashanti has used gold hedging instruments to hedge the selling price of some of its anticipated production. The use of such instruments prevents full participation in subsequent increases in the market price for the commodity with respect to covered production. Since 2001, AngloGold Ashanti has been reducing its hedge commitments through hedge buy-backs (limited to non-hedge derivatives until 2008), deliveries into contracts and restructuring in order to 
 provide greater participation in a rising gold price environment. As a result of these measures, AngloGold Ashanti has, 
 and expects to continue to have, substantially less protection against declines in the market price of gold as compared 
 with previous years.
  AngloGold Ashanti continues to use gold hedging instruments to hedge the selling price of a portion of its anticipated gold production and to protect revenues against unfavorable gold price and exchange rate movements. While the use of these  instruments  may  protect  against  a  drop  in  gold  prices  and  exchange  rate  movements,  it  will  do  so  for  only  a limited  period of time and only to the extent  that  the hedge remains in  place.  The use of these instruments may  also prevent AngloGold Ashanti from fully realizing the positive impact on income from any subsequent favorable increase in the  price  of  gold  on  the  portion  of  production  covered  by  the  hedge  and  of  any  subsequent  favorable  exchange  rate movements.


25
 
 During  2009,  AngloGold  Ashanti  continued  to  execute  its  strategy  to  reduce  its  outstanding  gold  derivatives  position which  resulted  in  the  decision  to  accelerate  the  settlement  of  certain  outstanding  gold  derivative  positions.  These accelerated settlements, together with the normal scheduled deliveries and maturities of other gold derivatives positions during  2009,  reduced  the  total  committed  ounces  from  5.99 million  ounces  as  at  December 31,  2008  to  3.90 million ounces as at December 31, 2009.
 
 
 Although  the  hedge  restructurings  and  reductions  referred  to  above  have  significantly  reduced  AngloGold  Ashanti’s hedge book, a rising gold price may result in a gap between the spot price and the received price of gold for ounces still hedged, which would prevent AngloGold Ashanti from fully realizing the positive impact on income from the higher gold price, and this may continue as the company closes out its existing hedge positions.
 
 
 AngloGold  Ashanti's  mining  rights  in  the  countries  in  which  it  operates  could  be  altered,  suspended  or cancelled  for  a  variety  of  reasons,  including  if  AngloGold  Ashanti  breaches  its  obligations  in  respect  of  its mining rights.
 
 
 AngloGold Ashanti's rights to own and exploit mineral reserves and deposits are governed by the laws and regulations of the jurisdictions in which the mineral properties are located. Currently, a significant portion of its mineral reserves and deposits  are  located  in  countries  where  mining  rights  could  be  suspended  or  cancelled  should  AngloGold  Ashanti breach its obligations in respect of the acquisition of these rights.
 
 
 In all of the countries where AngloGold Ashanti operates, the formulation or implementation of government policies may be unpredictable on certain issues, including changes in laws relating to mineral rights and ownership of mining assets and the rights to prospect and mine and in extreme cases, nationalization. Any existing and new mining and exploration operations  and  projects  AngloGold  Ashanti  carries  are  subject  to  various  national  and  local  laws,  policies  and regulations  governing  the  ownership  and  the  right  to  prospect  or  mine  or  develop  proposed  projects.  If  AngloGold Ashanti  is  not  able  to  obtain  or  maintain  necessary  permits,  authorizations  or  agreements  to  prospect  or  mine  or  to implement  planned projects, or  continue  its operations  under  conditions,  or  within  time  frames,  that  make  such  plans and operations economically viable, or if the laws impacting AngloGold Ashanti’s ownership of its mineral rights, or its right  to  prospect  or  mine  were  to  change  materially,  its  results  of  operations  and  its  financial  condition  could  be adversely affected.
 
 
 In  South  Africa, mining  rights are linked to meeting various obligations  that include the Broad-Based Socio-Economic Empowerment  Charter  for  the  South  African  Mining  Industry,  or  the  Mining  Charter.  Compliance  with  the  Mining Charter, measured using a designated scorecard, requires that every mining company achieve 15 percent ownership by historically disadvantaged South Africans, or HDSAs, of its South African mining assets by May 2009, and 26 percent ownership by May 2014, and achieves participation by HDSAs in various other aspects of management.
 
 
 AngloGold  Ashanti  believes  that  it  has  made  significant  progress  towards  meeting  the  requirements  of  the  Mining Charter,  the  scorecard and  its  own  undertakings  in  terms  of  human  resource  development,  employment  equity,  mine community and rural development, housing and living conditions, procurement and beneficiation. AngloGold Ashanti will incur  expenses  in  giving  further  effect  to  the  Mining  Charter  and  the  scorecard.  The  Mining  Charter  provides  that  it should  be  reviewed  five  years  after  becoming  law.  The  review  process  being  conducted  in  consultation  between  the government  and  mining  companies  took  place  during  2009.  The  outcome  is  expected  shortly  and  might  impose  new conditions on mining companies operating in South Africa.
 
 
 The Mineral and Petroleum Resources Development Act, or the MPRDA, required the Minister of Mineral Resources to develop  a  Code  of  Good  Practice  for  the  Minerals  Industry,  or  the  Code,  and  the  Housing  and  Living  Conditions Standard,  or  the  Standard,  by  April 30,  2009,  both  of  which  were  published  in  the  Government  Gazette  of  April 29, 2009. The Code was developed to create principles which would facilitate the effective implementation of minerals and mining  legislation  and  enhance  the  implementation  of  the  Mining  Charter  applicable  to  the  mining  industry.  The Standard aims to include the provision of housing as an integral part of infrastructure during the development of a mine. Both the Code and the Standard provide that non-compliance equates to non-compliance with the MPRDA.
 
 
 It is unclear whether non-compliance with the Code or the Standard would lead to the cancellation or suspension of a mining  right or whether they  would be considered legislation under the MPRDA. Subsequent to the  publication of the Code  and  the  Standard,  representatives  of  the  Department  of  Mineral  Resources,  organized  labor  and  the  South African mining industry have engaged in discussions in an effort to address the concerns of the mining industry and to possibly  amend  the  Code  and  the  Standard.  Furthermore,  discussions  related  to  the  Code  and  Standard  have  also become  related  to  the  review  of  the  Mining  Charter.  It  is  anticipated  that  the  contents  of  the  Code  and  Standard  will ultimately be amended in line with amendments that will be made to the Mining Charter, details of which are currently uncertain.


26
 
 AngloGold Ashanti’s mining rights in South Africa can be suspended or cancelled by the Minister of Mineral Resources if,  upon  notice  of  a  breach  from  the  Minister,  the  entity  breaches  its  obligations  in  complying  with  the  MPRDA.  The MPRDA  also  imposes  additional  responsibilities  on  mining  companies  relating  to  environmental  management  and  to environmental damage, degradation or pollution resulting from their prospecting or mining activities. AngloGold Ashanti has a policy of evaluating, minimizing and addressing the environmental consequences of its activities and, consistent with this policy and the MPRDA, conducts an annual review of the environmental costs and liabilities associated with its South African operations in light of applicable requirements.
 
 
 AngloGold  Ashanti  may  experience  unforeseen  difficulties,  delays  or  costs  in  successfully  implementing  its business strategy, and its strategy may not result in the anticipated benefits.
 
 
 The successful implementation of AngloGold Ashanti's business strategy depends upon a number of factors, including factors  that  are  outside  its  control.  For  example,  the  successful  management  of  costs  will  depend  upon  prevailing market  prices  for  input  costs  and  the  ability  to  grow  the  business  will  depend  on  the  successful  implementation  of AngloGold Ashanti's existing and proposed project development initiatives and continued exploration success as well as on the availability of attractive merger and acquisition opportunities, all of which are subject to the relevant mining and company  specific  risks  as  outlined  in  these  risk  factors.  AngloGold  Ashanti  cannot  give  assurance  that  unforeseen difficulties,  delays  or  costs  will  not  adversely  affect  the  successful  implementation  of  its  business  strategy,  or  that  its strategy will result in the anticipated benefits.
 
 AngloGold Ashanti's level of indebtedness could adversely affect its business.
 
 As  at  December 31,  2009,  AngloGold  Ashanti  had  gross  borrowings  of  approximately  $1.959 billion.  This  level  of indebtedness  could  have  adverse  effects  on  its  flexibility  to  do  business.  For  example,  AngloGold  Ashanti  may  be required  to  utilize  a  large  portion  of  its  cash  flow  to  pay  the  principal  and  interest  on  its  debt  which  will  reduce  the amount  of  funds  available  to  finance  existing  operations,  the  development  of  new  organic  growth  opportunities  and further acquisitions. In addition, under the terms of its borrowing facilities from its banks, AngloGold Ashanti is obliged to meet certain financial and other covenants. AngloGold Ashanti's ability to continue to meet these covenants will depend upon  its  future  financial  performance  which  will  be  affected  by  its  operating  performance  as  well  as  by  financial  and other factors, certain of which are beyond its control.
 
 Should the cash flow from operations be insufficient, AngloGold Ashanti could breach its financial and other covenants and may be required to refinance all or part of its existing debt, use existing cash balances, issue additional equity or sell assets. AngloGold Ashanti cannot be sure that it will be able to do so on commercially reasonable terms, if at all.
 
 During 2010,  approximately  $1.3 billion  of  AngloGold  Ashanti’s  debt  is  scheduled  to  mature,  consisting  mainly  of $1.0 billion under its $1.15 billion syndicated loan facility that matures on December 13, 2010 and $250 million under its revolving credit facility that matures on August 24, 2010 (but which is extendable, at the option of AngloGold Ashanti, to August 24,  2011).  AngloGold  Ashanti  intends  to  refinance  these  facilities  before  they  mature,  which  may  include accessing  the  debt  capital  markets.  AngloGold  Ashanti  cannot  give  assurance  that  it  will  be  able  to  do  so  on commercially reasonable terms, if at all.
 
 AngloGold Ashanti expects to have significant financing requirements.
 
 The development of potential future projects including the Mponeng Carbon Leader Reef and Ventersdorp Contact Reef Projects in South Africa, Córrego do Sítio and Lamego in Brazil, the mine life extension project at Cripple Creek & Victor in the United States (amongst other existing projects), and, if approved, the development of Tropicana in Australia, La Colosa in Columbia, the Kibali gold project and the AGK project in the Democratic Republic of the Congo (DRC) and the Mponeng CLR project and project Zaaiplaats in South Africa, as well as various greenfields and brownfields exploration projects will require significant funding. AngloGold Ashanti’s operating cash flow and credit facilities may be insufficient to meet all of these expenditures, depending on the timing  and costs of development of these and other projects and feasibility  studies.  As  a  result,  new  sources  of  capital  may  be  needed  to  meet  the  funding  requirements  of  these developments, to fund ongoing business activities and to pay dividends. AngloGold Ashanti’s ability to raise and service significant  new  sources  of  capital  will  be  a  function  of  macroeconomic  conditions,  future  gold  prices,  AngloGold Ashanti’s operational performance and operating cash flow and debt position, among other factors. AngloGold Ashanti intends to raise long-term debt financing in the capital markets but cannot provide assurance that it will be able to do so on acceptable terms, if at all. AngloGold Ashanti’s ability to raise long-term debt financing and the cost of such financing will  depend  on,  among  other  factors,  its  prevailing  credit  rating,  which  may  be  affected  by  the  company’s  ability  to maintain  its  outstanding  debt  and  financial  ratios  at  levels  acceptable  to  the  credit  ratings  agencies,  its  business prospects or other factors. As a result, in the event of lower gold prices, unanticipated operating or financial challenges, or new funding limitations, AngloGold Ashanti’s ability to pursue new business opportunities, invest in existing and new projects,  fund  its  ongoing  business  activities,  retire  or  service  all  outstanding  debt  and  pay  dividends  could  be significantly  constrained,  all  of  which  could  adversely  affect  AngloGold  Ashanti’s  results  of  operations  and  its  finance condition.


27
 
 AngloGold  Ashanti  does  not  operate  two  of  its  significant  joint  venture  projects.  If  the  operators  of  these projects do not perform effectively and efficiently, AngloGold Ashanti's investment in these projects could be adversely affected and/or its reputation could be harmed.
 
 AngloGold Ashanti's joint ventures at Morila in Mali and at Kibali in the DRC are operated by its joint venture partners. While AngloGold Ashanti provides strategic management and operational advice to its joint venture partners in respect of these projects, AngloGold Ashanti cannot ensure that these projects are operated in compliance with the standards that AngloGold Ashanti applies in its other operations. If these joint ventures are not operated effectively or efficiently, including as a result of weaknesses in the policies, procedures and controls implemented by the joint venture partners, AngloGold  Ashanti's  investment  in  the  relevant  project  could  be  adversely  affected.  In  addition,  negative  publicity associated with ineffective and inefficient operatorship, particularly relating to any resulting accidents or environmental incidents, could harm AngloGold Ashanti’s reputation.
 
 AngloGold  Ashanti's  mineral  reserves,  deposits  and  mining  operations  are  located  in  countries  that  face political, economic and/or security risks.
 
 Some of AngloGold Ashanti's mineral deposits and mining and exploration operations are located in countries that have experienced political instability and economic uncertainty. In all of the countries where AngloGold Ashanti operates, the formulation  or  implementation  of  government  policies  may  be  unpredictable  on  certain  issues  including  regulations which impact its operations and changes in laws relating to issues such as mineral rights and asset ownership, taxation, royalties,  import  and  export  duties,  currency  transfers,  restrictions  on  foreign  currency  holdings  and  repatriation  of earnings.
 
 Any existing and new mining and exploration operations and projects AngloGold Ashanti carries out in these countries are,  and  will  be  subject  to,  various  national  and  local  laws,  policies  and  regulations  governing  the  ownership, prospecting, development and mining of mineral reserves, taxation and royalties, exchange controls, import and export duties and restrictions, investment approvals, employee and social/community relations and other matters.
 
 If,  in  one  or  more  of  these  countries,  AngloGold  Ashanti  was  not  able  to  obtain  or  maintain  necessary  permits, authorizations or agreements to implement planned projects or continue its operations under conditions or within time frames that make such plans and operations economic, or if legal, ownership, fiscal (including all royalties and duties), exchange  control,  employment,  environmental  and  social  laws  and  regimes,  or  the  governing  political  authorities change  materially,  resulting  in  changes  to  such  laws  and  regimes,  its  results  of  operations  and  its  financial  condition could be adversely affected.
 
 Certain of the countries in which AngloGold Ashanti has mineral deposits or mining or exploration operations, including the DRC and Colombia, have in the past experienced, and in certain cases continue to experience, a difficult security environment  as  well  as  political  instability.  In  particular,  various  illegal  groups  active  in  regions  in  which  AngloGold Ashanti is present may pose a credible threat of terrorism, extortion and kidnapping, which could have an adverse effect on  AngloGold  Ashanti's  operations  in  such  regions.  In  the  event  that  continued  operations  in  these  countries compromise AngloGold Ashanti's security or business principles, it may withdraw from these countries on a temporary or permanent basis.
 
 In December 2008, the National Council for Democracy and Development, or CNDD, seized power in Guinea after the death  of  the  country’s  long-standing  president,  Lasana  Conte.  Moussa  Dadis  Camara,  president  of  the  CNDD, announced on December 27, 2008 the creation of a committee to examine and revise all existing mining agreements in Guinea. The committee’s review process has not yet commenced and AngloGold Ashanti is currently unable to predict the timing and outcome of the committee’s examination. Pursuant to the direction of President Moussa Dadis Camara or  his  ministers,  production  at  AngloGold  Ashanti’s  Siguiri  mine  in  Guinea  and  the  export  of  gold  from  Guinea  were temporarily interrupted during 2009. At the end of June 2009, following an embargo on the export of gold from Guinea and discussions with the government of Guinea centered on the nature and protocols of an environmental fund related to  AngloGold  Ashanti's  existing  $27 million  provision  for  environmental  rehabilitation  of  Siguiri  as  of  June 30,  2009, AngloGold  Ashanti  agreed  and  made  an  advance  payment  of  $10 million  to  the  government  of  Guinea  in  respect  of AngloGold  Ashanti's  environmental  rehabilitation  provision,  subject  to  an  undertaking  from  the  government  of  Guinea that the funds be used solely for the environmental rehabilitation of Siguiri and that the payment be offset against the balance of its future environmental liabilities related to Siguiri. AngloGold Ashanti cannot give any assurance that future stoppages of this nature may not occur, or that further payments in advance of future liabilities will not be demanded by the government of Guinea. Such stoppages, if prolonged, could have a material adverse effect on the Siguiri mine. On December 3,  2009,  President  Moussa  Dadis  Camara  was  shot  in  an  apparent  assassination  attempt  and  on January 15, 2010, president Moussa Dadis Camara signed a transition agreement allowing for the end of military rule, presidential elections and the transfer of Guinea back to civilian rule. A new transitional government was appointed on February 15, 2010 and is charged with organizing presidential elections by July 2010. President Moussa Dadis Camara has ruled himself out of running in future presidential elections and the key figures in Guinea’s military hierarchy have all publicly  vowed  their  support  for  the  end  to  military  rule.  It  is  not  certain  what  impact  any  future  political  instability  in Guinea  may  have  on  AngloGold  Ashanti’s  ability  to  manage  and  operate  its  mining  operations  in  Guinea.


28
 
 In  Mali  and  Tanzania,  AngloGold  Ashanti  is  due  refunds  of  input  tax  and  fuel  duties  which  remain  outstanding  for periods  longer  than  those  provided  for  in  the  respective  statutes.  In  addition,  AngloGold  Ashanti  has  outstanding assessments and unresolved tax disputes in a number of countries. If the outstanding VAT input taxes are not received, the tax disputes are not resolved and assessments are not made in a manner favorable to AngloGold Ashanti, it could have an adverse effect upon its results of operations and its financial condition.
 
 
 Labor disruptions and/or increased labor costs could have an adverse effect on AngloGold Ashanti's results of operations.
 
 
 AngloGold  Ashanti's  employees  in  South  Africa,  some  South  American  countries,  Ghana  and  Guinea  are  highly unionized. Trade unions therefore have a significant impact on AngloGold Ashanti's labor relations climate, as well as on social and political reforms, most  notably  in South Africa. There is a risk that strikes or other types of  conflict  with unions  or  employees  may  occur  at  any  of  AngloGold  Ashanti's  operations,  particularly  where  the  labor  force  is unionized. It is uncertain whether labor disruptions will be used to advocate labor, political or social goals in the future. Material  labor  disruptions  could  have  an adverse  effect  on AngloGold  Ashanti's  results  of  operations  and  its financial condition.
 
 
 As  at  December 31,  2009,  approximately  67 percent  of  AngloGold  Ashanti’s  workforce  excluding  contractors,  or approximately  59 percent  of  AngloGold  Ashanti’s  total  workforce,  was  located  in  South  Africa.  In  South  Africa,  it  has become established practice to negotiate wages and conditions of employment with the unions every two years through the Chamber of Mines of South Africa. An agreement was signed with the unions in July 2009, following negotiations among the National Union of Mineworkers, the United Associations of South Africa, or UASA, on behalf of some clerical and junior management staff and Solidarity (on behalf  of a small number of miners) and the Chamber of Mines. This two-year  wage  agreement  was  reached  without  resort  to  any  industrial  action.  AngloGold  Ashanti  has  agreed  to  an increase that has a 9.7 percent impact on payroll costs for its South African operations in the first year and 1 percent above  inflation,  with a  guaranteed  minimum  of  7.5 percent, in  the second  year.  These  wage  increases  were effective July 1,  2009.  The  next  round  of  negotiations  is  expected  to  take  place  in  2011.  AngloGold  Ashanti  cannot  give assurance that it will be able to renegotiate this agreement on satisfactory terms when it expires in July 2011.
 
 
 As  at  December 31,  2009,  approximately  11 percent  of  AngloGold  Ashanti’s  workforce  excluding  contractors,  or approximately 12 percent of AngloGold Ashanti’s total workforce, was located in Ghana. In Ghana, a three-year wage agreement  for  the  years  2009  to  2011,  effective  from  January 1,  2009,  was  reached  towards  the  end  of  2009. AngloGold Ashanti has agreed to increases that have a 10 percent, 12 percent and 12 percent impact on payroll costs for its Ghanaian operations for 2009, 2010 and 2011, respectively. The next round of negotiations is expected to take place in 2011. AngloGold Ashanti cannot give assurance that it will be able to renegotiate this agreement on satisfactory terms when it expires at the end of December 2011.
 
 
 Labor  costs  represent  a  substantial  proportion  of  AngloGold  Ashanti's  total  operating  costs,  and  in  many  operations, including  its  South  African,  Ghanaian  and  Tanzanian  operations,  is  its  single  largest  operating  cost  component.  Any increases in labor costs have to be off-set by greater productivity efforts by all operations and employees.
 
 
 Certain factors may affect AngloGold Ashanti's ability to support the carrying amount of its property, plant and equipment,  acquired  properties,  investments  and  goodwill  on  its  balance  sheet.  If  the  carrying  amount  of  its assets is not recoverable, AngloGold Ashanti may be required to recognize an impairment charge, which could be significant.
 
 AngloGold Ashanti reviews and tests the carrying value of its assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. AngloGold Ashanti values individual mining assets at the lowest level for which identifiable cash flows are identifiable as independent of cash flows of other mining assets and liabilities.
 
 
 If there are indications that impairment may have occurred, AngloGold  Ashanti prepares estimates of expected future cash flows for each group of assets. Expected future cash flows are inherently uncertain, and could materially change over time. They are significantly affected by reserve and production estimates, together with economic factors such as spot  and  forward  gold  prices,  discount  rates,  currency  exchange  rates,  estimates  of  costs  to  produce  reserves  and future capital expenditure.
 
 
 If  any  of  these  uncertainties  occur  either  alone  or  in  combination,  it  could  require  management  to  recognize  an impairment, which could adversely affect AngloGold Ashanti's financial condition.


29
 
 
 The  use  of  mining  contractors  at  certain  of  AngloGold  Ashanti's  operations  may  expose  it  to  delays  or suspensions in mining activities and increases in mining costs.
 
 
 AngloGold  Ashanti  uses  mining  contractors  at  certain  of  its  operations  to  mine  and  deliver  ore  to  processing  plants. Consequently,  at  these  mines,  AngloGold  Ashanti  does  not  own  all  of  the  mining  equipment,  and  contracting  costs represent a significant proportion of the total operating costs of these operations. AngloGold Ashanti’s operations could be  disrupted,  resulting  in  additional  costs  and  liabilities,  if  the  mining  contractors  at  these  mines  have  financial difficulties, or should there be a dispute in renegotiating a mining contract, or a delay in replacing an existing contractor. Increases in contract mining rates, in the absence of associated productivity increases, will also have an adverse impact on AngloGold Ashanti's results of operations and financial condition.
 
 
 AngloGold Ashanti competes with mining and other companies for key human resources.
 
 
 AngloGold  Ashanti  competes  with  mining  and  other  companies  on  a  global  basis  to  attract  and  retain  key  human resources at all levels with appropriate technical skills and operating and managerial experience necessary to continue to  operate its business. This  is further exacerbated in the current environment  of increased mining activity across  the globe,  combined  with  the  global  shortage  of  key  mining  industry  human  resource  skills,  including  geologists,  mining engineers, metallurgists and skilled artisans.
 
 The  retention  of  staff  is  particularly  challenging  in  South  Africa,  where,  in  addition  to  the  impacts  of  global  industry shortages of skilled labor, AngloGold Ashanti is also required to achieve employment equity targets of participation by HDSAs in management and other positions.
 
 AngloGold Ashanti competes with all companies in South Africa to attract and retain a small but growing pool of HDSAs with the necessary skills and experience.
 
 There  can  be  no  assurance  that  AngloGold  Ashanti  will  attract  and  retain  skilled  and  experienced  employees  and, should it fail to do so or lose any of its key personnel, its business and growth prospects may be harmed and its results of operations and its financial condition could be adversely affected.
 
 The treatment of occupational health diseases and the potential liabilities related thereto may have an adverse effect upon the results of AngloGold Ashanti's operations and its financial condition.
 
 
 The  primary  areas  of  focus  in  respect  of  occupational  health  within  AngloGold  Ashanti's  operations  in  terms  of employee  welfare  are  noise  induced  hearing  loss,  or  NIHL,  occupational  lung  diseases,  or  OLD,  which  includes pulmonary and tuberculosis, or TB, in silica dust exposed individuals. AngloGold Ashanti provides occupational health services  to  its  employees  at  its  occupational  health  centers  and  it  continues  to  improve  preventative  occupational hygiene initiatives. If the costs associated with providing such occupational health services increase, the increase could have an adverse effect on AngloGold Ashanti's results of operations and its financial condition.
 
 The  South  African  government,  by  way  of  a  cabinet  resolution  in  1999,  has  proposed  a  possible  combination  and alignment  of  benefits  of  the  Occupational  Diseases  in  Mines  and  Works  Act,  or  ODMWA,  that  provides  for compensation to miners who have OLD, TB and combinations thereof, and the Compensation for Occupational Injuries and Diseases Act, or COIDA, that provides for compensation to non-miners who have OLD. It appears less likely that the  proposed  combination  of  the  two  acts  will  occur  but  some  alignment  of  benefits  may  be  considered.    COIDA provides  for  compensation  payments  to  workers  suffering  permanent  disabilities  from  OLD,  which  are  classified  as pension liabilities if the permanent disability is above a certain threshold, or a lump sum compensation payment if the permanent  disability  is  below  a  certain  threshold.  ODMWA  only  provides  for  a  lump  sum  compensation  payment  to workers suffering from OLD. The capitalized value of a pension liability (in accordance with COIDA) is usually greater than  that  of  a  lump  sum  compensation  payment  (under  ODMWA).  In  addition,  under  COIDA  compensation  becomes payable at a lower threshold of permanent disability than under ODMWA. It is estimated that under COIDA about two to three  times  more  of  AngloGold  Ashanti's  employees  would  be  compensated  as  compared  with  those  eligible  for compensation under ODMWA.
  If the proposed combination of COIDA and ODMWA were to occur, this could further increase the level of compensation claims AngloGold Ashanti could be subject to and consequently could have an adverse effect on its financial condition.


30
 
  Mr. Thembekile Mankayi instituted a legal action against AngloGold Ashanti in October 2006 in the South Gauteng High Court. Mr. Mankayi claimed approximately ZAR2.6 million for damages allegedly suffered by him as a result of silicosis allegedly contracted while working on mines now owned by AngloGold Ashanti. The case was heard and a judgment in the  exception action was rendered on June 26, 2008  in favor of  AngloGold  Ashanti on the basis that mine employers are insured under ODMWA and COIDA against compensable diseases, which precludes common law delictual claims by  employees  against  employers.  The  appeal  of  Mr Mankayi  to  the  Supreme  Court  of  Appeal  of  South  Africa  was dismissed.  Mr Mankayi may not elect to approach the Constitutional Court of South Africa for relief.  The Constitutional Court  had  previously  found  in  another  case  that  COIDA  compensation  is  constitutional.    If  AngloGold  Ashanti  is ultimately  unsuccessful  in  defending  this  suit,  it  could  be  subject  to  numerous  similar  claims  which  could  have  an adverse effect on its financial condition.
 
 In response to the effects of silicosis in labor sending communities, a number of mining companies (under the auspices of the Chamber of Mines), together with the NUM, which is the largest union in the mining sector and the national and regional  departments  of  health  have  embarked  on  a  project  to  assist  in  the  delivery  of  compensation  and  relief  by mining companies under the ODMWA to communities that have been affected.
 
 AngloGold Ashanti faces certain risks in dealing with HIV/AIDS, particularly at its South African operations, and with tropical disease outbreaks such as malaria, which may have an adverse effect on its results of operations.
 
 
 AIDS  and  associated  diseases  remain  the  major  health  care  challenge  faced  by  AngloGold  Ashanti's  South  African operations. Accurate prevalence data for AIDS is not available owing to doctor-patient confidentiality. The South African workforce prevalence studies indicate that the percentage of AngloGold Ashanti's South African workforce that may be infected  by  HIV  may  be  as  high  as  30 percent.  AngloGold  Ashanti  is  continuing  to  develop  and  implement  various programs  aimed  at  helping  those  who  have  been  infected  with  HIV  and  preventing  new  infections.  Since 2001, AngloGold Ashanti has offered a voluntary counseling and HIV testing program for employees in South Africa. In 2002, AngloGold  Ashanti  began  to  offer  anti-retroviral  therapy,  or  ART,  to  HIV  positive  employees  who  met  the  current medical criteria for the initiation of ART. From April 2003, AngloGold Ashanti commenced a rollout of the treatment to all eligible employees desiring it. In all, 4,325 employees have attended the wellness clinics in the last six months, and as of December 2009, approximately 2,216 employees were receiving treatment using anti-retroviral drugs.
 
 AngloGold Ashanti does not expect the cost that it will incur related to the prevention of HIV infection and the treatment of  AIDS  to  materially  and  adversely  affect  its  results  of  operations.  Nevertheless,  it  is  not  possible  to  determine  with certainty the costs that AngloGold Ashanti may incur in the future in addressing this issue, and consequently its results of operations and its financial condition could be adversely affected.
 
 Malaria  and  other  tropical  diseases  pose  significant  health  risks  at  all  of  AngloGold  Ashanti's  operations  in  Central, West and  East  Africa  where such  diseases  may  assume  epidemic  proportions  because of  ineffective  national  control programs. Malaria is a major cause of death in young children and pregnant women but also gives rise to fatalities and absenteeism  in  adult  men.  Consequently,  if  uncontrolled,  the  disease  could  have  an adverse  effect  upon  productivity and profitability levels of AngloGold Ashanti's operations located in these regions.
 
 The  costs  associated  with  the  pumping  of water  inflows  from  closed  mines  adjacent  to  AngloGold  Ashanti's operations could have an adverse effect upon its results of operations.
 
 
 Certain  of  AngloGold  Ashanti's  mining  operations  are  located  adjacent  to  the  mining  operations  of  other  mining companies. The closure of a mining operation may have an impact upon continued operations at the adjacent mine if appropriate  preventative  steps  are  not  taken.  In  particular,  this  can  include  the  ingress  of  underground  water  where pumping operations at the adjacent closed mine are suspended. Such ingress could have an adverse effect upon any one of  AngloGold  Ashanti's  mining operations as a result  of property damage,  disruption to  operations  and  additional pumping costs and consequently could have an adverse impact upon AngloGold Ashanti’s results of operations and its financial condition.


31
 
 
 Proposed regulation of over the counter (OTC) derivatives may adversely affect AngloGold Ashanti’s financial condition and results of operations.
 
 
 There  are  proposals  in  the  European  Union  and  the  United  States  to  introduce  laws  and  regulations  that  affect  OTC derivatives, including rules that would increase collateralization and push many so-called standardized OTC derivatives into central clearing. These proposals, if enacted and depending on their terms, could:
 
 •
   •
  •
  •
  uneconomical the use of derivatives for hedging purposes thereby exposing non-financial firms to unhedgeable risks.
 
 
 AngloGold  Ashanti  makes  use  of  financial  derivatives  in  its  treasury  activities,  particularly  for  gold,  interest  rate  and foreign exchange hedging, and as a result any of the foregoing could adversely affect its financial condition and results of operations.
 
 The occurrence of events for which AngloGold Ashanti is not insured or for which its insurance is inadequate may adversely affect its cash flows and overall profitability.
 
 
 AngloGold  Ashanti  maintains  insurance  to  protect  only  against  catastrophic  events  which  could  have  a  significant adverse  effect  on  its  operations  and  profitability.  This  insurance  is  maintained  in  amounts  that  AngloGold  Ashanti believes  to  be  reasonable  depending  upon  the  circumstances  surrounding  each  identified  risk.  However,  AngloGold Ashanti's insurance does not cover all potential risks associated with its business. In addition, AngloGold Ashanti may elect  not  to  insure  certain  risks,  due  to  the  high  premiums  associated  with  insuring  those  risks  or  for  various  other reasons, including an assessment that the risks are remote.
 
 AngloGold Ashanti may not be able to obtain insurance coverage at acceptable premiums. The availability and cost of insurance coverage can vary considerably from year to year as a result of events beyond AngloGold Ashanti’s control or from  claims,  and  this  can  result  in  higher  premiums  and  periodically  being  unable  to  maintain  the  levels  or  types  of insurance carried.
 
 The occurrence of events for which it  is not insured  may adversely affect AngloGold Ashanti's cash flows and overall profitability and its financial condition.
 
 Risks related to AngloGold Ashanti's ordinary shares and AngloGold Ashanti’s ADSs
  The proposal by the South African Government to replace the Secondary Tax on Companies with a withholding tax on dividends and other distributions may impact the amount of dividends or other distributions received by the holders of AngloGold Ashanti ordinary shares and holders of AngloGold Ashanti ADSs.
 
 On February 21, 2007, the South African Government announced a proposal to replace Secondary Tax on Companies with  a  10 percent  withholding  tax  on  dividends  and  other  distributions  payable  to  shareholders  of  South  African companies.
 
 The new tax was expected to be implemented in 2010 but no implementation date has been announced yet. Although this may reduce the tax payable by the South African operations of AngloGold Ashanti thereby increasing distributable earnings, the withholding tax will generally reduce the amount of dividends or other distributions received by holders of AngloGold Ashanti ordinary shares and ADSs.
 
 Fluctuations in the exchange rate of currencies may reduce the market value of AngloGold Ashanti's securities, as well as the market value of any dividends or distributions paid by AngloGold Ashanti. AngloGold Ashanti has historically declared all dividends in South African rands. As a result, exchange rate movements may  have  affected and  may continue to affect the Australian  dollar, the British pound,  the Ghanaian cedi and the US dollar value of these dividends, as well as of any other distributions paid by the relevant depositary to investors that hold AngloGold Ashanti's securities. This may reduce the value of these securities to investors.


32
 
  AngloGold  Ashanti's  memorandum  and articles  of association  allows  for  dividends  and  distributions  to  be  declared  in any currency at the discretion of AngloGold Ashanti's board of directors, or its shareholders at a general meeting. If, and to  the extent that AngloGold Ashanti opts to declare dividends and distributions in dollars, exchange  rate movements will not affect the US dollar value of any dividends or distributions, nevertheless, the value of any dividend or distribution in Australian dollars, British pounds, Ghanaian cedis or South African rands will continue to be affected. If, and to the extent that dividends and distributions are declared in South African rands, exchange rate movements will continue to affect  the  Australian  dollar,  British  pound,  Ghanaian  cedi  and  US  dollar  value  of  these  dividends  and  distributions. Furthermore,  the  market  value  of  AngloGold  Ashanti's  securities  as  expressed  in  Australian  dollars,  British  pounds, Ghanaian  cedis,  US  dollars  and  South  African rands  will  continue  to fluctuate  in  part  as  a  result  of  foreign  exchange fluctuations.Sales of large quantities of AngloGold Ashanti's ordinary shares and ADSs, or the perception that these sales may occur, could adversely affect the prevailing market price of such securities. The  market  price  of  AngloGold  Ashanti's  ordinary  shares  or  ADSs  could  fall  if  large  quantities  of  ordinary  shares  or ADSs are sold in the public market, or there is the perception in the marketplace that such sales could occur. Subject to applicable securities laws, holders of AngloGold Ashanti's ordinary shares or ADSs may decide to sell them at any time. The  market  price  of  AngloGold  Ashanti's  ordinary  shares  or  ADS  could  also  fall  as  a  result  of  any  future  offerings  it makes  of  ordinary  shares,  ADSs,  or  securities  exchangeable  or  exercisable  for  its  ordinary  shares  or  ADSs,  or  the perception in the marketplace that these sales might occur. AngloGold Ashanti may make such offerings of additional ADS rights, share rights or similar securities at any time or from time to time in the future.


ITEM 4: INFORMATION ON THE COMPANY
  
 GROUP INFORMATION
 
 
 AngloGold Limited was founded in June 1998 through the consolidation of the gold mining interests of Anglo American. The  company,  AngloGold  Ashanti  as  it  is  now,  was  formed  on  April 26,  2004  following  the  business  combination between  AngloGold  and  Ashanti  Goldfields  Company  Limited.  AngloGold  Ashanti  is  currently  the  third  largest  gold producing mining company in the world by ounces sold.
 
 
  
 Current profile AngloGold Ashanti Limited, headquartered in Johannesburg, South Africa, is a global gold company with a portfolio of long-life,  relatively  low-cost  assets  and  differing  orebody  types  in  key  gold  producing  regions.  The  company's 21 operations  are  located  in  10  countries  (Argentina,  Australia,  Brazil,  Ghana,  Guinea,  Mali,  Namibia,  South  Africa, Tanzania  and  the  United  States  of  America)  and  are  supported  by  extensive  exploration  activities.  The  combined Proved and Probable Ore Reserves of the group amounted to 68.3 million ounces as at December 31, 2009.  The primary listing of the company's ordinary shares is on the JSE Limited (JSE) in South Africa. Its ordinary shares are also  listed  on  stock  exchanges  in  London,  Paris  and  Ghana,  as  well  as  being  quoted  in  Brussels  in  the  form  of International Depositary Receipts (IDRs), in New York in the form of American Depositary Shares (ADSs), in Australia, in the form of Clearing House Electronic Sub-register System (CHESS) Depositary Interests (CDIs) and in Ghana, in the form of Ghanaian Depositary Shares (GhDSs).
  AngloGold Ashanti Limited (Registration number 1944/017354/06) was incorporated in the Republic of South Africa in 1944  under  the  name  of  Vaal  Reefs  Exploration  and  Mining  Company  Limited  and  operates  under  the  South  African Companies  Act  61  of  1973,  as  amended.  Its  registered  office  is  at 76,  Jeppe  Street,  Newtown,  Johannesburg,  South Africa, 2001.4A. HISTORY AND DEVELOPMENT OF THE COMPANY HISTORY AND SIGNIFICANT DEVELOPMENTS OF THE COMPANYBelow are highlights of key corporate activities of the company from its formation in 1998: 1998
   Company Limited; Eastvaal Gold Holdings Limited; Southvaal Holdings Limited; Free State Consolidated Gold Mines Limited; Elandsrand Gold Mining Company Limited; H.J. Joel Gold Mining Company Limited and Western Deep Levels Limited into a single, focused, independent, gold mining company. Vaal Reefs Exploration and Mining Company Limited (Vaal Reefs), the vehicle for the consolidation, changed its name to AngloGold Limited and increased its authorized share capital, effective March 30, 1998
   (West  Africa)  Limited  (100 percent);  Western  Ultra  Deep  Levels  Limited  (89 percent);  Eastern  Gold  Holdings Limited (52 percent); Erongo Mining and Exploration Company Limited (70 percent)
 1999


2000Acquired:
       2001
   interests in No. 2 Shaft Vaal River Operations to African Rainbow Minerals (ARM) and made  an  unsuccessful take-over bid for Normandy Mining Limited
 2002
      2003
            2004
                       2005
             the new order mining rights in terms of  the South African Mineral and  Petroleum Resources Development Act had been granted


2006
 
           (Talon), a wholly-owned subsidiary of ITH, entered into an Asset Purchase and Sale and Indemnity Agreement whereby  AngloGold  Ashanti  sold  to  Talon  a  100 percent  interest  in  six  Alaskan  mineral  exploration  properties and  associated  databases  in  return  for  an  approximate  20 percent  interest  in  ITH.  AngloGold  Ashanti  has  the option to increase or dilute its stake in these projects, subject to certain conditions
      Production  Association  Polymetal  (Polymetal),  in  terms  of  which  Polymetal  and  AngloGold  Ashanti  would  co-operate  in  exploration  and  the  acquisition  and  development  of  gold  mining  opportunities  within  the  Russian Federation
   ownership  plan  (ESOP)  and  the  acquisition  by  Izingwe  Holdings  (Proprietary)  Limited  (an  empowerment company) of an equity interest in AngloGold Ashanti
 
 2007
 
         
 2008
 
                  
 2009


The following  announcements  regarding significant  developments  were  made  by  AngloGold  Ashanti  during  2009 and subsequent to year-end:Sale  of  interest  in  the  Boddington  Gold  Mine:On  January 28,  2009,  AngloGold  Ashanti  announced  that  it  had agreed to sell to Newmont Mining Corporation, its 33.33 percent joint venture interest in the Boddington Gold Mine. The transaction  was  completed  on  June 26,  2009.  All  refunds  and  reimbursements  between  the  company  and  Newmont were settled. Sale of the Tau Lekoa Mine:On February 17, 2009, AngloGold Ashanti announced that it had agreed to sell with effect from  January 1,  2010,  the  Tau  Lekoa  mine,  together  with  the  adjacent  Weltevreden,  Jonkerskraal  and  Goedgenoeg project areas, to Simmer & Jack Mines Limited (Simmers). On November 25, 2009, AngloGold Ashanti announced that the closing of the sale may be delayed pending approval of the South African Department of Mineral Resources (DMR), of  the  transfer  of  the  mining  rights,  the  only  remaining  condition  to  the  sale.  AngloGold  Ashanti  and  Simmers  have subsequently agreed to extend the deadline for the completion of the transaction from March 31, 2010 to September 30, 2010,  to  allow  for  a  further  possible  delay  in  closing  pending  the  approval  of  the  DMR.  Closing  of  the  transaction  is anticipated to occur before September 30, 2010. Issue of $732.5m, 3.50 percent guaranteed convertible bonds due May 2014:On May 18, 2009, AngloGold Ashanti launched an offering of convertible bonds issued by its wholly-owned subsidiary, AngloGold Ashanti Holdings Finance plc,  unconditionally  and  irrevocably  guaranteed  by  AngloGold  Ashanti  Limited.  Bonds  totaling  $732.5 million  were issued  at  an  interest  coupon  rate  of  3.50 percent  per  annum,  payable  on  May 22,  and  November 22,  each  year,  are convertible into AngloGold Ashanti ADRs at a conversion price of $47.6126 per ADR and are due on May 22, 2014. On July 30, 2009, shareholders approved a special resolution placing 15,384,615 ordinary shares under the control of the directors to be issued upon the conversion of the $732.5 million convertible bonds. Formation  of  a  strategic  alliance  with  Thani  Dubai  Mining  Limited:On  June 10,  2009,  AngloGold  Ashanti  and Thani  Dubai  Mining  Limited  announced  the  formation  of  a  strategic  alliance  to  explore,  develop  and  operate  mines across the Middle East and parts of North Africa. Each company will have a 50 percent interest in the alliance which will explore for gold, precious and base metals. Acquisition  of  an  effective  45 percent  interest  in  the  Kibali  gold  project:With  effect  from  December 22,  2009, AngloGold Ashanti and Randgold Resources Limited (Randgold) each hold an effective 45 percent interest in the Kibali gold  project  (formerly  the  Moto  gold  project),  while  L’Office  des  Mines  d’Or  de  Kilo-Moto  (OKIMO),  a  Congolese parastatal, holds the remaining 10 percent stake, thereby maintaining the continued vested interest of the Government of the Democratic Republic of the Congo (the DRC) in the Kibali gold project.Issue  of  7,624,162  AngloGold  Ashanti  ordinary  shares:On  August 31,  2009,  AngloGold  Ashanti  announced  the launch  of  an  equity  offering  to  fund  a  portion  of  its  acquisition  of  the  Kibali  gold  project.  This  was  followed  by  an announcement on September 1, 2009 detailing the placing of 7,624,162 AngloGold Ashanti ordinary shares at an issue price  of  $37.25  per  American  Depositary  Share  (ADR)  (or  R288.32  per  ordinary  share)  which  price  represented  an approximate  3 percent discount  to  the  closing  price  of  an  AngloGold  Ashanti  ADR  on  the  NYSE  on  August 31, 2009. The offering closed on September 8, 2009 and total proceeds of approximately $284m were received. Formation of a joint venture with De Beers Group of Companies:On October 5, 2009, AngloGold Ashanti and the De Beers Group of Companies announced the formation of a joint venture (AuruMar) to explore for, and ultimately mine, gold  and  other  minerals  and  metals,  excluding  diamonds,  on  marine  deposits  located  in,  or  adjacent  to,  the  area between the high water mark and the edge of the continental shelf on a worldwide basis.Acquisition of an additional interest in Sadiola:On December 29, 2009, AngloGold Ashanti, together with IAMGOLD Corporation  purchased  from  the  International  Finance  Corporation  (IFC),  the  IFC’s  6 percent  stake  in  Société d’Exploitation des Mines d’or de Sadiola, which owns the Sadiola Gold Mine. This transaction has resulted in AngloGold Ashanti  and  IAMGOLD  each  increasing  their respective interest in  Sadiola from 38 percent to  41 percent. In  addition, AngloGold  Ashanti  and  IAMGOLD  have  extended  an  offer  to  the  Republic  of  Mali  to  take  up  its  proportionate entitlement of 19.15 percent of the 6 percent sale interest, by acquiring an equal 0.574 percent interest in SEMOS from each of  them, on or before March 31, 2010.   The Mali Government has requested an extension  to consider this offer until end June 2010.


Temporary suspension of operations at Iduapriem and Obuasi mines:On February 19, 2010, AngloGold Ashanti announced that following discussions with the Environmental Protection Agency of Ghana (EPA), the Iduapriem mine in Ghana had been temporarily suspended to address potentially adverse environmental impacts arising from the current tailings storage facility.  On March 31, 2010 AngloGold Ashanti announced that it had suspended the operation of gold processing  at  the  Obuasi  mine  pending  the  implementation  of  a  revised  water  management  strategy  to  reduce contaminants contained in its discharge.
 Appointment  of  chairman:Mr  Tito  Mboweni,  the  former  Governor  of  the  South  African  Reserve  Bank  has  been appointed, with effect from June 1, 2010, as Chairman of AngloGold Ashanti, to succeed Mr Russell Edey following his retirement as Chairman and from the board at the conclusion of the annual general meeting to be held on May 7, 2010.
 AngloGold  Ashanti  assigned  investment  grade  ratings:On  April 9,  2010,  AngloGold  Ashanti  noted  the  following investment grade ratings assigned to it:


4B.
 BUSINESS OVERVIEW
 
 PRODUCTS
  The gold market in 2009 product  sales  is  derived  from  sales  of  silver,  uranium  oxide  and  sulfuric  acid.  AngloGold  Ashanti  sells  its products on international markets.
 
 metals  refineries.  Once  refined –  generally  large  bars  weighing  approximately  12.5 kilograms  and  containing 99.5 percent gold, or smaller bars weighing 1 kilogram or less, with a gold content of 99.5 percent and more – the metal is sold either through the refineries' marketing and distribution channels or directly to bullion banks and the proceeds paid to the company.
 
  and  selling  gold  and  distribute  physical  gold  bullion  bought  from  mining  companies  and  refineries  to  markets worldwide. Bullion banks hold consignment stocks in all major physical markets and finance these consignment stocks from the margins charged by them to physical buyers, over and above the amounts paid by such banks to mining companies for the gold.
 
  distribution channels at the refinery are used. In this case, the refinery does not sell the metal on the company's behalf, but instead delivers the finished gold bars to the bullion bank with which the group's forward contract is held. The physical delivery to the counterparty bank of the appropriate amount of gold fulfils AngloGold Ashanti's obligations under the forward contract, and AngloGold Ashanti is paid for this gold by the relevant bullion bank, at the price fixed under the forward contract, rather than at the spot price of the day.
 
 Gold market characteristics
 
  fluctuations, interest rate changes or global or regional political events that are anticipated to impact on the world economy.  Gold  has  historically  played  a  role  as  a  store  of  value  in  times  of  price  inflation  and  economic uncertainty. This factor, together with the presence of significant gold holdings above ground, tends to dampen the impact of supply and demand fundamentals on the market. Trade in physical gold is, however, still important in determining a floor price and physical gold, either in the form of bars or high-caratage jewellery, is still a major investment vehicle in the emerging markets of India, China and the Middle East.
 
   
 Physical gold demand
 
   
  market  has  largely  taken  up  available  supply.  However,  in  value  terms  gold  jewellery  consumption  has increased.  Investment  in  physical  gold  includes  bar  hoarding,  coins,  medals  and  other  retail  investment instruments  as  well  as  exchange  traded  funds  (ETFs),  which  have  since  their  inception  in  2002  become  well established  as  a  vehicle  for  both  retail  and  institutional  investors.  In  2009,  ETF  investment  activity  was  once again very notable with holdings growing by almost 600 tonnes.


supply. Due to its high value, gold is rarely destroyed and some 161,000 tonnes of gold (approximately 65 years
  of new mine supply at current levels) is estimated to exist  in the form of  jewellery,  official sector gold holdings
  (central bank reserves) and private investment.
      (1)
  market  was  greatly  affected  by  the  global financial  crisis.  Due  to  the  high  price  of gold  and  the  global  liquidity crisis,  scrap  levels  of  gold  rose  by  around  27 percent  to  an  all  time  high.  However,  the  official  sector,  which includes  central banks, sold 90 percent  less gold. The greatest market shift  to have occurred  in 2009 was the shift  away  from  jewellery  demand  to  investment  demand.  In  the  United  States,  total  gold  investment  demand exceeded jewellery demand for the first time since gold reached then-record highs of $850 per ounce in 1980.
  
 (1) Source: GFMS
  
 Gold demand by sector
 Jewellery demand
 
 prices  led to a 23 percent decline in  gold jewellery  manufacture. The negative  trends were evident in all major
  gold jewellery markets except for China, which bucked the global trend and showed modest growth in 2009. therefore serves a strong investment purpose in addition to adornment. This is also true for the markets of India and the Middle East but in 2009 the investment appeal of gold jewellery was strongest in China. The high price of gold in absolute terms deterred consumers in India and the Middle East. In many markets last year the high price of gold was magnified by the dollar weakening against local currencies, which led to a decline in both sales and in manufacturing. over 40 percent and jewellery demand declining by 38 percent. The rupee price of gold rose by 14 percent year-on-year  and  this  price  dampened  the  investment  appeal  of  jewellery,  with  consumers  generally  limiting themselves  to  essential  wedding  and  gifting  occasions.  Due  to  the  higher  price  of  gold,  consumers  with unchanged budgets were forced to buy less gold on auspicious, “compulsory” buying occasions. While it was not the case that people stopped buying gold in India, as has  been the case in  some first world  markets, they  did buy less. market in the world to show an increase in both jewellery and investment demand in 2009. The investment case for traditional 24 carat jewellery bolstered demand for that product, while 18 carat jewellery suffered a decline in sales of approximately 10 percent. China’s jewellery offtake exceeded investment demand by four to one. important difference is the exceptionally high per capita ownership of gold in some of the countries of that region. In the United Arab Emirates, for example, consumption per capita is traditionally 30 times that in the US or the UK and 50 times higher than in India. However, 2009 was also a difficult year for the Middle Eastern jewellery market with  jewellery manufacturing falling by a third. In Turkey, local currency appreciation against the dollar, the  high  price  of  gold  and  the  ongoing  recession  dampened  jewellery  consumption.  The  markets  of  Egypt, United Arab Emirates and the Kingdom of Saudi Arabia, were all faced with similar challenges. fourth place as the global financial crisis intensified. However, US investment demand grew rapidly in 2009 and more  than  offset  the  loss  in  jewellery  demand.  The  high  price  of  gold  once  again  had  a  negative  impact  on jewellery  sales  and  many  manufacturers  reduced  the  weight  of  gold  jewellery  in  an  attempt  to  maintain  more reasonable price points. Since the cost of inventories was high, many retailers held less gold jewellery.


Investment demand world investment exceeding 1,800 tonnes, representing more than double 2008 demand. The increased demand was prompted by a combination of investors seeking a safe haven and speculation on expectation of continued price  increases.  This  investment  demand  took  different  forms  in  different  markets.  In  the  US,  the  majority  of purchases  took  the  form  of  ETFs,  while  in  the  Eastern  markets  of  India,  China  and  the  Middle  East,  retail investment was primarily realized through coins and bars. increasing  by  465 tonnes  on  fears  of  a  global  financial  meltdown.  As  the  global  economy  stabilized  from  the second  quarter  onwards,  the  primary  reason  for  investment  shifted  toward  price  speculation  as  the  gold  price rose to successive record highs to peak at $1,212.50 per ounce on December 3, 2009. Central bank holdings, sales and purchases the  Central  Bank  Gold  Agreements  (CBGA),  which  compel  signatories  to  sell  their  gold  in  a  stable  and responsible  fashion  ensuring  minimal  price  impact.  The  third  of  these  agreements  came  into  effect  on September 27,  2009  and  limits  signatories  to  annual  sales  of  20 percent  less  than  the  second  agreement. Central bank sales in the final year of the second agreement reached only 157 tonnes, far less than the quota of 500 tonnes available under the agreement. This illustrates that central bank dishoarding is slowing and at times has even reversed, with a number of central banks becoming net buyers of gold. of global commentators, the Indian Central Bank bought 200 tonnes of the IMF supply. This is perhaps the most significant single  official  gold  market  transaction  of  the  last  decade.  The  Indian  Central Bank  paid  an  average price  of  $1,045 per ounce  for  their  gold  and  news  of  the purchase  may  well  have  assisted  in  providing  a  new floor for the advancing gold price.
  Breakdown of gold consumption in 2009
         
 Data source: World Gold Council
 
 AngloGold Ashanti's marketing investment    expenditure.  The  company  remains  involved  in  independent  projects  to  grow  jewellery  demand  in  partnership with  companies  such  as  Tanishq  (a  subsidiary  of  the  Tata  Group)  in  India.  AuDITIONS,  the  company's  own global  gold  jewellery  design  competition,  promotes  improved  gold  jewellery  design  and  has  become  a  well-recognized corporate marketing tool. The uranium market in 2009   3 8 price of $53 per pound, then trended down during the beginning of the year to a low of $41.50 per pound early in April, before rebounding to a range of $42 per pound to $50 per pound in the second half of the year. By the end of 2009, the spot price for U 3 8


3 8 did not show the same fluctuations as spot prices but the decline reflects the spot prices decline over 2008 and
  some of 2009. building  stabilized  at  around  $42 per  pound,  with  significant  volumes  bought  by  Chinese  and  Indian  utilities.
  Although  longer  term  forward  prices  have  softened,  spot-price  support  has  been  partly  driven  by  utilities
  purchasing now for deferred use.    Energy inventory, were absorbed at the lower end of the price band. That said, the price recovery experienced in
  October  appears  to  have  been  driven  by  unplanned  production  outages  at  a  large  facility,  which  had  still  to
  regain  full  operation  by  the  end  of  2009  and  which  may  result  in  a  small  tightening  of  supply  in  the  short  to
  medium term. production at existing facilities, especially with Kazakhstan aiming to continue its production expansion. Further
  supply  increases  are  likely  to  come  from  new  discoveries  and  the  development  of  several  significant  new
  concessions. the  end  of  the  highly  enriched  uranium  deal,  together  with  Chinese  and  Indian  nuclear  expansion.  Chinese utilities were the largest buyer of material in 2009, and this trend can be expected to continue in 2010 given the country commenced construction of nine reactors in 2009, taking the total under construction to 20. The silver market in 2009 sometimes  more  volatile.  The  silver  price  achieved  a  48 percent  return  over  2009  compared  with  gold’s
  24 percent return.
 GOLD PRODUCTIONAngloGold  Ashanti’s  core  business  is  the  production  of  gold  by  exploring  for,  and  mining  and  processing  gold orebodies.The process of producing goldThe process of producing gold can be divided into six main activities:
  1.            The process applies to both underground and surface operations.


Finding the orebody
 
  exploration  on  its  own  or  in  conjunction  with  joint  venture  partners.  Worthwhile  discoveries  undergo  a  well structured and intensive evaluation process before a decision is made to proceed with developing the mine.
 2.
 Creating access to the orebody
 
   Underground mining: a vertical or decline (inclined) shaft is sunk deep into the ground to transport people and  mining  materials  to  underground  levels  from  which  the  orebody  is  accessed  through  horizontal tunnels known as haulages and cross-cuts. Further on-reef development is then undertaken to open up the orebody so that mining can take place.
  Open-pit  mining:  in  this  situation  the  ore  lies  close  to  surface  and  can  be  exposed  for  mining  by “stripping” the overlying barren material.
 3.
 Removing the ore by mining the orebody
   In  underground  mining,  holes  are  drilled  into  the  orebody,  filled  with  explosives  and  then  blasted.  The blasted  ‘stopes’  or  ‘faces’  are  then  cleaned  and  the  ore  released  is  then  ready  to  be  transported  to surface.
  In open-pit mining, drilling and blasting may also be necessary to break the ore; excavators then load the material onto the ore transport system which is predominantly haul trucks.
 4.
 Transporting the broken material from the mining face to the plants for treatment
   Underground ore is brought to the surface by a combination of horizontal and vertical transport systems. Once  on  surface,  the  ore  is  usually  transported  to  the  processing  facilities  by  surface  rail  or  overland conveyors.
   5.
 Processing
 
  rocks,  into  small  particles  so  that  the  contained  gold  minerals  are  exposed  and  available  for  recovery.  This  is usually undertaken by a combination of multi-stage crushing and milling circuits with associated screening and classification  processes  to  ensure  that  material  at  the  correct  size  is  removed  promptly  from  the  comminution circuit.
 
        refractory ores, where  the gold  is not readily available  for leaching because it is locked within  a sulfide mineral matrix (e.g. pyrite), extremely finely dispersed within the host rock (and hence not yet exposed) or alloyed with other elements which retard or prevent leaching (e.g. tellurides).
 Free milling and oxidized refractory ores are processed for gold recovery by leaching the ore in agitated (stirred) tanks in  an  alkaline  cyanide  leach  solution.  This  is  generally  followed  by  adsorption  of  the  gold  cyanide  complex  onto activated carbon-in-pulp (CIP).
  Refractory  ores  undergo  pre-treatment  to  make  them  more  amenable  to  cyanide  leaching.  This  commonly  takes  the form of separating  the gold  bearing  sulfide  materials from  the  barren  gangue  material  by  using flotation  to  produce a high-grade  sulfide  concentrate.  The  sulfide  concentrate  is  then  oxidized  by  either  roasting  as  at  AngloGold  Ashanti Brasil Mineração or bacterial oxidation (BIOX) as at Obuasi. This oxidation destroys the sulfide matrix and exposes the gold particles thereby making them amenable to recovery by the cyanidation process.


An alternative process is the heap-leach process. This process is generally considered applicable to high-tonnage, low-grade  ore  deposits,  but  it  can  be  successfully  applied  to  medium-grade  deposits  where smaller  ore  deposit tonnages cannot economically justify constructing a capital intensive process plant. In this process, ore is crushed and heaped on an impervious or lined leach pad. Low strength alkaline cyanide solution is applied, generally as a drip, to the top of the heap for periods of up to three months. The dissolved gold bearing solution is collected from the base of the heap and transferred to carbon-in-solution (CIS) columns where the gold cyanide complex is adsorbed onto activated carbon. The barren solution is refreshed and recycled to the top of the heaps.
  Gold which has loaded (adsorbed) on to activated carbon is recovered by a process of re-dissolving the gold from the activated  carbon  (elution), followed  by  precipitation  in  electrowinning  cells  and  subsequent  smelting  of  the  precipitate into doré bars that are then shipped to gold refineries for further processing.
  At  some  AngloGold  Ashanti  operations,  valuable  by-products  are  generated  at  the  same  time  as  the  gold  recovery process. These by products are:
       leached uranium onto resin and subsequent stripping of the resin by ammonium hydroxide and precipitation of uranium oxide as “yellow cake”.
 
  
  Refining
 
   upgraded to a purity of 99.5 percent or greater for sale to a range of final users. High purity gold is referred to as “good delivery” which means that it meets the quality standards set by the London Bullion Markets Association and gives the final buyer assurance that the bar contains the quantity and purity of gold as stamped on the bar.
 
 MINE SITE REHABILITATION AND CLOSUREAs mining is a finite operation, a mining enterprise must develop acceptable plans to be adopted when the mineralized material  is  exhausted.  For  AngloGold  Ashanti,  an  integral  aspect  of  operating  its  mines  is  ongoing  mine  closure planning, together with the associated estimates of liability costs and the assurance of adequate financial provisions to cover these costs. AngloGold Ashanti’s environmental and community policies were integrated into a single Environment and Community Policy  during  2009.    The  policy  commits  the  company,  amongst  others,  to  ensuring  that  “financial  resources  are available  to  meet  its  disclosure  obligations”.    One  of  the  company’s  values  is  that  “the  communities  and  societies  in which it operates will be better off for AngloGold Ashanti having been there”.
  In order to ensure that operating staff and the company’s stakeholders understand clearly what these statements mean in  practice  and  to  set  a common  benchmark  across  the  company,  a  closure  and rehabilitation  management standard was  finalized  during  2009.    Operations  have  been  given  two  years  (i.e.  by  mid-July  2011)  to  achieve full  compliance with  the  standard.    The  International  Council  on  Mining  and  Metals  (ICMM)  published  an  integrated  mine  closure planning toolkit.   This, together with other  national and international reference, was consulted in  preparing AngloGold Ashanti’s standard to ensure that it was aligned with current good practice.  The evaluation of new projects takes into account closure and associated costs. For many of the older mines, closure planning and the evaluation of environmental liabilities is a more complex process. This  is  particularly  the  case  in  Brazil,  Ghana  and  South  Africa,  where  many  of  the  long-life  operations  present environmental legacies that may have developed over a century or more.  The AngloGold Ashanti standard requires that closure plans be reviewed and updated every three years (annually in the final  three  years  of  a  mine’s  life)  or  whenever  significant  changes  are  made,  and  take  into  account  operational conditions, planning and legislative requirements, international protocols, technological developments and advances in good practice.


A  particular  challenge  is  concurrent  rehabilitation,  which  is  carried  out  while  a  mine  is  still  operating.    This  practice serves to decrease the current  liability and reduces the final rehabilitation and closure  work  that  must be  undertaken, but has the potential to sterilize reserves, which the company might wish to exploit should conditions, such as the gold price, change.
  An assessment of closure liabilities is undertaken annually.THE REGULATORY ENVIRONMENT ENABLING ANGLOGOLD ASHANTI TO MINE  AngloGold Ashanti's rights to own and exploit Mineral Reserves and deposits are governed by the laws and regulations of the jurisdictions in which the mineral properties on which these reserves and deposits are situated.  In  several  of  the  countries  in  which  AngloGold  Ashanti  operates  there  are,  in  some  cases,  certain  restrictions  on  the group's ability to independently move assets out of these countries and/or transfer assets within the group, without the prior consent of the local government or minority shareholders involved.  Southern Africa South Africa In  October  2002,  the  President  of  South  Africa  assented  to  the  Mineral  and  Petroleum  Resources  Development  Act (MPRDA), which had been passed by the Parliament of South Africa in June 2002 and came into effect on May 1, 2004. The  objects  of  the  MPDRA  are,  among  other  things,  to  allow  for  state  sovereignty  over  all  mineral  and  petroleum resources  in  the  country,  to  promote  economic  growth  and  the  development  of  these  resources  and  to  expand opportunities  for  the  historically  disadvantaged.  The  object  is  also  to  ensure  security  of  tenure  for  the  respective operations concerning prospecting, exploration, mining and production. By virtue of the provisions of the MPRDA, the state ensures that holders of mining and prospecting rights contribute to the socio-economic development of the areas in which they are operating.
  The  Broad-Based  Socio-Economic  Empowerment  Charter  for  the  South  African  Mining  Industry  (the  Mining  Charter) developed  out  of  the  MPRDA.  The  Mining  Charter  committed  all  stakeholders  in  the  mining  industry  to  transfer ownership of 26 percent of their assets to black or historically disadvantaged South Africans (HDSAs) within 10 years. In  addition,  the  government  indicated  that  it  would  issue  a  Mining  Charter  Scorecard  (Scorecard)  against  which companies could gauge their empowerment credentials as well as engineering innovative ways of assisting business to meet the empowerment criteria. The fact that the Mining Charter enjoyed the full support of the mining houses, South African government and the unions, gives it great credibility and improves its chances for success in the long run.The objectives of the Mining Charter are to:
  •                The Scorecard was envisaged to function as an administrative tool only and not as a legislative one. The objective of the Scorecard was to find a practical framework for the Minister to assess whether a company actually measured up to what was intended by the MPRDA and the Mining Charter.On April 29, 2009, as required by section 100(1)(b) of the MPRDA, the Minister published the Codes of Good Practice for  the  South  African  Mineral  Industry  (the  Code).  The  purpose  of  the  Code  is  to  set  out  administrative  principles  in order to enhance the implementation of the Mining Charter and the MPRDA. The Code is to be read in combination with the Mining Charter and other legislation relating to the measurement of the socio-economic transformation in the South African mining industry.




AngloGold Ashanti currently holds ten mining rights in South Africa, seven of which have been successfully converted, executed and registered as new order mining rights at the Mineral and Petroleum Titles Office (MPRTO). Two old order mining  rights  are  still  awaiting  conversion  by  the  Department  of  Mineral  Resources  (DMR),  and  one  right  has  been executed, awaiting registration in the MPRTO. The deadline for the conversion process from old to new order rights was the end of April 2009.
  AngloGold  Ashanti  also  holds  one  prospecting  right  for  which  a  renewal  application  is  pending.  Three  pending prospecting  right  applications have  been  submitted  to  the  DMR  and  one  application  has been successfully  executed, registration of which at the MPRTO is currently awaited. AngloGold Ashanti is also in the process of preparing a mining permit application for the recovery of sand which will be submitted to the DMR. A  prospecting  right  will  be  granted to a  successful  applicant for a  period  not  exceeding five  years.  Prospecting  rights may only be renewed once for a period not exceeding three years. Furthermore, the MPRDA provides for a retention period after prospecting of up to three years with one renewal up to two years, subject to certain conditions. A mining right will be granted to a successful applicant for a period which may not exceed 30 years. Mining rights may be renewed for additional periods, each of which may not exceed 30 years at a time. The  MPRDA  Amendment  Act  has  been  signed  by  the  State  President,  and  published,  but  is  not  yet  in  effect.  The purpose of the Act is to amend the MPRDA so as to make the Minister the responsible authority for the implementing of environmental  matters  in  terms  of  the  National  Environmental  Management  Act,  1998  (NEMA)  and  specific environmental  legislation  as  it  relates  to  prospecting,  mining,  exploration,  production  and  related  activities  incidental thereto on the prospecting, mining, exploration or production area; to align the MPRDA Act with the NEMA in order to provide for one environmental management system; to remove ambiguities in certain definitions; to add functions to the Regional  Mining  Development  and  Environmental  Committee;  to  amend  transitional  arrangements  so  as  to  further afford statutory protection to certain existing old order rights; and to provide for matters connected therewith. AngloGold  Ashanti  applied for  and  has  been  granted a  Refining  License  at  the  South  African  Diamond  and  Precious Metals Regulator.Namibia Mineral rights in Namibia vest in the State. In order to prospect or mine, the Ministry of Mines and Energy initially grants an exclusive prospecting license and on presentation of a feasibility study, a mining license is then granted taking into account the ability of the company, including its mining, financial and technical capabilities, rehabilitation programs and payment  of  royalties.  The  relevant  license  was  granted  to  AngloGold  Namibia  (Pty)  Ltd  in  respect  of  its  mining  and prospecting activities in Namibia. The current 15-year mining license expires in October 2018. Continental Africa Democratic Republic of the Congo The mining industry in the Democratic Republic of the Congo (DRC) is regulated primarily by the Mining Code enacted in July 2002 and its ancillary regulations, the Mining Regulations promulgated in March 2003. The Mining Code, which repealed  the  Mining  Code  of  April  1981,  vests  the  Minister  of  Mines  with  the  authority  for  the  granting,  refusal, suspension and termination of mineral rights. Mineral rights may be granted in the form of exploration permits which are granted  for  an  initial  period  of  four  years  and  mining  permits  which  are  granted  for  an  initial  period  of  30  years.  An exploration permit may, at any time before expiry, be transformed partially into a mining license or a small scale mining permit.  Exploitation  permits  are  granted  following  successful  completion  of  exploration  and  satisfaction  of  the requirements  necessary  for  the  grant  of  such  permit  including  approval  of  an  environmental  impact  study  and  an environmental  management  plan.  The  holder  of  a  mining  permit  is  required  to  commence  development  and  mine construction within three years of the grant of a mining permit, and failure of which may lead to forfeiture or payment of penalties. A permit holder must comply with specific rules relating to, among other things, protection of the environment, cultural heritage, health and safety, construction and infrastructure planning. Mining and exploration activities are required to be undertaken so as to affect, as little as possible, the interests of lawful occupants  of  land  and  surface  rights  holders  including  their  customary  rights.  The  exercise  of  mineral  rights  by  title holders  which  effectively  deprives  and/or  interferes  with  the  rights  of  occupants  and  surface  rights  holders  requires payment of fair compensation by the mineral title holder.


The  Mining  Code  provides  for  the  taxes,  charges,  royalties  and  other  fees  payable  to  the  treasury  by  a  mining  title holder  in  respect  of  its  activities.  The  Mining  Code  also  provides  for  a  level  of  fiscal  stability.  Existing  tax,  customs, exchange and benefits applicable to mining activities are guaranteed to remain unchanged for a period of 10 years in favor  of  a  mining  title  holder  in  the  event  that  amendment  of  the  Mining  Code  results  in  less  favorable  payment obligations.
  Regarding  protection  and  enforcement  of  rights  acquired  under  an  exploration  or  mining  permit,  the  Mining  Code provides,  depending  on  the  nature  of  a  dispute  or  threat,  administrative,  judicial  and  national  or  international arbitrational recourses.
  AngloGold  Ashanti  holds  the  majority  stake  and  is  the  operator  of  Ashanti  Goldfields  Kilo  (AGK),  an  exploration  and mining joint venture with Offices des Mines d’or de Kilo – Moto (OKIMO), a DRC governmental mining agency, AGK is engaged in exploration activities in the north eastern DRC. Following  a  review  undertaken  by  a  commission  appointed  by  the  DRC  government  to  review  all  mining  contracts entered into by mining companies with DRC parastatal mining agencies, AngloGold Ashanti and its joint venture partner OKIMO have secured certain undertakings and commitments from the Government of the DRC in respect of the AGK project, including security of tenure as long as AGK is in compliance with DRC mining legislation and for such time as the  AGK  project  is  in  commercial  production,  as  well  as  the  existing  DRC  mining  legislation  and  fiscal  regime  under which  the  AGK  project  with  operate.    In  addition,  the  DRC  government  has  agreed  to  the  transfer  of  the  exploitation permit  transfer  deeds  from  OKIMO  to  AGK  and  the  termination  of  the  existing  amodiation  agreement  which  will  be effective upon the transfer of the exploitation permits. Ghana The Constitution of Ghana as well as the Minerals and Mining Act, 2006 (Act 703) (the Act) provide that all minerals in Ghana in their natural state are the property of the State and title to them is vested in the President on behalf of and in trust  for  the  people  of  Ghana,  with  rights  of  prospecting,  recovery  and  associated  land  usage  being  granted  under license or lease.
  The grant of a mining lease by the Minister of Mines is normally subject to parliamentary ratification unless the mining lease falls into a class of transactions exempted by Parliament. Control of mining companiesThe Minister of Mines has the power to object to a person becoming or remaining a '’shareholder controller'’, a '’majority shareholder controller'’ or an '’indirect controller'’ of a company which has been granted a mining lease if he considers that the public interest would be prejudiced by the person concerned becoming or remaining such a controller. The Act provides for stability agreements as a mechanism to ensure that the incentives and protection afforded by laws in force at the time of the stability agreement are guaranteed for 15 years. A stability agreement is subject to ratification by Parliament.
  Prior  to  the  business  combination  between  AngloGold  and  Ashanti  in  April  2004,  AngloGold  and  the  government  of Ghana agreed the terms of a stability agreement to govern certain aspects of the fiscal and regulatory framework under which  AngloGold  Ashanti  would  operate  in  Ghana  following  the  implementation  of  the  business  combination.  The stability agreement necessitated the amendment of the Obuasi Mining Lease which had been ratified by Parliament. Under the stability agreement, the government of Ghana agreed:
  •        operations in Ghana at a rate of 3 percent per annum of the total revenue from minerals obtained by AngloGold  Ashanti from such mining operations;


exportation proceeds in foreign currencies offshore, or if such foreign currency is  held  in  Ghana, to guarantee the availability of such foreign currency; and
    Further, the Government of Ghana agreed that AngloGold Ashanti's Ghanaian operations will not be adversely affected by  any  new  enactments  or orders, or  by  changes  to  the  level  of  payments  of any  customs  or  other  duties  relating  to mining  operations,  taxes,  fees  and  other  fiscal  imports  or  laws  relating  to  exchange  control,  transfer  of  capital  and dividend remittance for a period of 15 years after the completion of the business combination. For fiscal years 2009 and 2010, the government, through the National Fiscal Stabilization Act 2009 (Act 785), has imposed a 5 percent levy on all profits  before  tax  for  mining  companies  as  a  temporary  measure  to  raise  additional  revenue  to  meet  critical expenditures,  while  maintaining  government’s fiscal  objectives.    AngloGold  Ashanti  is  taking  the  position  that  it  is  not subject to this levy.Retention of foreign earnings  AngloGold  Ashanti's  operations  in  Ghana  are  permitted  to  retain  80  percent  of  their  foreign  exchange  earnings.    In addition, the company has permission from the Bank of Ghana to retain and use, outside of Ghana, dollars required to meet  payments  to  the  company's  hedge  counterparts  which  cannot  be  met  from  the  cash  resources  of  its  treasury company.Localization policy  A  detailed  program  must  be  submitted  for  the  recruitment  and  training  of  Ghanaians  with  a  view  to  achieving 'localization', which is the replacement of expatriate personnel by Ghanaian personnel. In addition, the holder must give preference to Ghanaian products and personnel, to the maximum extent possible, consistent with safety, efficiency and economies.
  Except as otherwise provided in a specific mining lease, all immovable assets of the holder under the mining lease vest in the State on termination, as does all moveable property that is fully depreciated for tax purposes. Moveable property that  is  not  fully  depreciated  is  to  be  offered  to  the  State  at  the  depreciated  cost.  The  holder  must  exercise  his  rights subject to such limitations relating to surface rights as the Minister of Mines may prescribe. Mining properties Obuasi The  current  mining  lease  for  the  Obuasi  area  was  granted by  the  Government  of  Ghana  on  March 5,  1994.  It  grants mining  rights  to  land  with  an  area  of  approximately  334  square  kilometers  in  the  Amansie  East  and  Adansi  West districts  of the  Ashanti region for a term of 30 years from  the date of the  agreement.  In addition, the application for a mining  lease over the adjacent  140 square  kilometers has also been granted, resulting in  the total area under mining lease  conditions  increasing  to  474  square  kilometers,  (the  Lease  Area).  The  company  is  required  to  pay  rent  to  the Government of Ghana (subject to review every five years, when the rent  may be increased by up to  20 percent)  at a rate of approximately $5 per square kilometer and such royalties as are prescribed by legislation, including royalties on timber felled within the Lease Area. The Government of Ghana agreed to extend the term of the mining lease relating to the Obuasi mine until 2054. The mining lease was formally ratified by Parliament on October 23, 2008. Iduapriem and Teberebie Iduapriem has title to a 33 square kilometer mining lease granted on April 19, 1989 for a period of 30 years. The terms and conditions of the lease are consistent with similar leases granted in respect of the Obuasi mining lease. Teberebie has two leases, one granted in February 1998 for a term of 30 years, and another granted in June 1992 for a term of 26 years.


Guinea In  Guinea, all mineral substances are the property of the state. Mining  activities are  primarily regulated by the Mining Code,  1995.  The  right  to  undertake  mining  operations  can  only  be  acquired  by  virtue  of  one  of  the  following  mining titles: surveying permit, small-scale mining license, mining prospecting license, mining license or mining concession. The holders of mining titles are guaranteed the right to dispose freely of their assets and to organize their enterprises as they wish, the freedom to engage and discharge staff in accordance with the regulations in force, free movement of their staff and their products throughout Guinea and freedom to dispose of their products in international markets. The  group's  Guinea  subsidiary,  Société  Ashanti  Goldfields  de  Guinée  SA  (SAG),  has  title  to  the  Siguiri  mining concession  area  which  was  granted on  November 11,  1993  for a  period  of 25  years.  The  agreement  provides for  an eventual  extension/renegotiation  after  23  years  for  such  periods  as  may  be  required  to  exhaust  the  economic  Ore Reserve.
  At Siguiri, the original area granted of 8,384 square kilometers was reduced to a concession area of four blocks totaling 1,495 square kilometers.
  SAG  has  the  exclusive  right  to  explore  and  mine  in  the  remaining  Siguiri  concession  area  for  an  additional  22-year period  from  November 11,  1996  under  conditions  detailed  in  a  Convention  de  Base  which  predates  the  new  Guinea Mining Code.
  Key elements of the Convention de Base are that:
  • the  Government  of  Guinea  holds  a  15  percent  free-carried  or  non-contributory  interest;  a  royalty  of  3  percent
             based  on  a  spot  gold  price  of  less  than  $475  per  ounce,  and  5  percent  based  on  a  spot  gold  price  above
             $475 per ounce, as fixed on the London Gold Bullion Market, is payable on the value of gold exported; a local
             development tax of 0.4 percent is payable on gross sales revenue; salaries of expatriate employees are subject
             to a 10 percent income tax; mining goods imported into Guinea are exempt from all import taxes and duties for
             the first two years of commercial production; and SAG is committed to adopt and progressively implement a plan for the effective rehabilitation of the mining areas
            disturbed or affected by operations.The Convention de Base is subject to early termination if both parties formally and expressly agree to do so, if all project activities  are  voluntarily  suspended  for  a  continuous  period  of  eight  months  or  are  permanently  abandoned  by  our subsidiary or if SAG goes into voluntary liquidation or is placed into liquidation by a court of competent jurisdiction. Mali Mineral  rights  in  Mali  are  governed  by  Ordinance  No.  99-32/P-RM  of  August 19,  1999  enacting  the  mining  code,  as amended by 013/2000/P-RM of February 10, 2000 and ratified by Law No. 00-011 of May 30, 2000 (the Mining Code), and Decree No. 99-255/P-RM of September 15, 1999 implementing the Mining Code. Prospecting  activities  may  be  carried  out  under  prospecting  authorizations  (authorization  de  prospection)  which  is  an exclusive right  for an  individual or corporate  entity to carry  out prospecting activities  over a given  area for a period  of three years renewable without a reduction in the area of the authorization. Research activities may be carried out under research  permits  (permis  de  recherché).  The  latter  are  granted  to  corporate  entities  only  by  order  of  the  Minister  in charge  of  Mines.  Research  permits  are  granted for  a period  of  three  years,  renewable  twice  for additional  three-year periods.  Each  renewal  of  the  research  permit  requires  a  relinquishment  of  50  percent  of  the  area  covered  by  such permit. The entity applying for such a permit must provide proof of technical and financial capabilities. An  exploitation  permit  (permis  d'exploitation)  is  required  to  mine  a  deposit  located  within  the  area  of  a  prospecting authorization  or  a  research  permit.  The  exploitation  permit  grants  exclusive  title  to  prospect,  research  and  exploit  the named substances for a maximum period of 30 years renewable three times for an additional 10 years. The exploitation permit is granted only to the holder of an exploration permit or of a prospecting authorization and covers only the area covered by the exploration permit or the prospecting authorization. An application must be submitted to the Minister in charge of Mines and to the National Director of Mines.


As soon as the exploitation permit is granted, the holder of the exploitation permit  must incorporate a company under the law of Mali. The holder of the permit will assign the permit for free to this company. The State will have a 10 percent free carry interest. This interest will be converted into priority shares and the State's participation will not be diluted in the case of increasing the capital. 
  Applications for exploitation permits must contain various documents attesting to the financial and technical capacity of the  applicant,  a  detailed  environmental  study  in  respect  of  the  impact  of  the  project  on  the  environment,  a  feasibility study, and a bank deposit. The permit is granted by decree of the Head of Government. A refusal to grant a permit may only  be  based  on  two  grounds:  insufficient  evidence  to  support  the  exploitation  of  the  deposit  and/or  a  failure  of  the environmental study.
  Applications  for  prospecting  authorizations  and  research  permits  must  contain  various  documents  attesting  to  the financial and technical capacity of the applicant, a detailed works and cost program, a map defining the area which is being requested and the geographical coordinates thereof, the exact details relating to the identity of the applicant and evidence of the authority of the signatory of the application. Such titles are granted by ministerial order. Any refusal to grant such titles shall be notified by letter from the Minister in charge of Mines to the applicant. The mining titles mentioned above all require an establishment convention (convention d'etablissement) to be signed by the State and the titleholder defining their rights and obligations. A standard form of such establishment convention has been approved by decree of the Head of Government.
  AngloGold Ashanti has interests in Morila, Sadiola and Yatela, all of which are governed by establishment conventions covering  exploration,  mining,  treatment  and  marketing  in  a  comprehensive  document.  These  documents  include  the general conditions with regard to exploration (work program, fiscal and customs regime) and exploitation (formation of a local  limited  liability  company  and  mining  company,  state  shareholdings,  the  fiscal  and  customs  regime  during construction  and  exploitation  phases,  exchange  controls,  marketing  of  the  product,  accounting  regime,  training programs for local labor, protection of the environment, reclamation, safety, hygiene and settlement of disputes). As  the  establishment  conventions  contain  stabilization  clauses,  the  mining  operations  carried  out  by  the  AngloGold Ashanti  entities  in  Mali  are  subjected  to  the  provisions  of  the  previous  mining  codes  of  1970  and  1991  but  also,  for residual matters, to the provisions of the Mining Code of 1999. AngloGold  Ashanti  has  complied  with  all  applicable  requirements  and  the  relevant  permits  have  been  issued. Morila, Sadiola and Yatela have 30-year permits which expire in 2029, 2024 and 2030, respectively. Tanzania Mineral  rights  in  the  United  Republic  of  Tanzania  are  governed  by  the  Mining  Act  of  1998  (the  Act),  and  the  Mining Regulations, 1999 and property and control over minerals are vested in the United Republic of Tanzania. Prospecting for the mining of minerals, except petroleum, may only be conducted under authority of a mineral right granted by the Ministry of Energy and Minerals under this Act.
  The three types of mineral rights most often encountered, which are also those applicable to AngloGold Ashanti, are:
  •      A prospecting license grants the holder thereof the exclusive right to prospect in the area covered by the license for all minerals, other than building materials and gemstones, for a period of three years. Thereafter, the license is renewable for two further periods of renewal of two years each. On each renewal of a prospecting license, 50 percent of the area covered  by  the  license  must  be  relinquished.  Before  application  is  made  for  a  prospecting  license  with  an  initial prospecting  period  (a  prospecting  license),  a  prospecting  license  with  a  reconnaissance  period  (a  prospecting reconnaissance)  may  be  applied  for  a  maximum  area  of  5,000  square  kilometers.  This  is  issued  for  a  period  of  two years  after  which a three-year prospecting license is applied  for. A company applying for a prospecting license must, inter alia, state the financial and technical resources available to it. A retention license can also be requested from the minister, after the expiry of a prospecting license period, for reasons ranging from funds to technical considerations.


Mining  is  carried  out  through  either  a  mining  license  or  a  special  mining  license,  both  of  which  confer  on  the  holder thereof the  exclusive  right to  conduct mining operations in or on the  area covered by the  license. A mining  license is granted for a period of 10 years and is renewable for a further period of 10 years. A special mining license is granted for a period of 25 years or for the estimated life of the orebody, whichever is shorter, and is renewable for a further period of 25 years. If the holder of a prospecting license has identified a mineral deposit within the prospecting area, which is potentially  of  commercial  significance  but  cannot  be  developed  immediately  for  reasons  of  technical  constraints, adverse market conditions or other economic factors of a temporary character, it can apply for a retention license which will entitle the holder thereof to apply for a special mining license when it sees fit to proceed with mining operations. A  retention  license  is  valid  for  a  period  of  five  years  and  is  thereafter  renewable  for  a  single  period  of  five  years.  A mineral right may be freely assigned by the holder thereof to another person or entity by notifying the Commissioner for Minerals,  except  for  a  mining  license,  which  must  have  the  approval  of  the  Ministry  to  be  assigned.  However,  this approval requirement for the assignment of a mining license will not apply if the mining license is assigned to an affiliate company  of  the  holder  or  to  a  financial  institution  or  bank  as  security  for  any  loan  or  guarantee  in  respect  of  mining operations.
  A holder of a mineral right may enter into a development agreement with the Ministry to guarantee the fiscal stability of a long-term mining project and make special provision for the payment of royalties, taxes, fees and other fiscal imposts. AngloGold Ashanti has complied with all applicable requirements and the relevant licenses, which have been issued for 25 years, expiring in 2024.Australasia Australia In  Australia,  with  few  exceptions,  all  onshore  mineral  rights  are  reserved  by  the  government  of  the  relevant  state  or territory.
  Exploration for and mining of minerals is regulated by general mining legislation and controlled by the mining ministry of each respective state or territory.  Where native title has not been extinguished, native title legislation may apply to the grant of tenure and some subsequent administrative processes.  Federal and state Aboriginal heritage legislation  also operates to protect special sites and areas from disturbance, although to date there has not been any adverse impact on any of AngloGold Ashanti's operating properties. AngloGold  Ashanti's  operating  properties  are  located  in  the  state  of  Western  Australia.  The  most  common  forms  of tenure are exploration and prospecting licenses, mining leases, miscellaneous licenses and general purpose leases. In most Australian states, if the holder of an exploration license establishes indications of an economic mineral deposit and complies with the conditions of the grant, the holder of the exploration license has a priority right against all others to apply for a mining lease which gives the holder exclusive mining rights with respect to minerals on the property.It is possible for an individual or entity to own the surface of the property and for another individual or entity to own the mineral rights. Typically, the maximum initial term of a mining lease is 21 years, and the holder has the right to renew the  lease  for  an  additional  21  years.  Subsequent  renewals  are  granted  at  the  discretion  of  the  respective  state  or territory's  minister  responsible  for  mining  rights.  Mining  leases  can  only  be  assigned  with  the  consent  of  the  relevant minister.
  Government royalties are  payable as specified in the relevant  legislation in  each  state or territory. A  general purpose lease  may  also  be  granted  for  one  or  more  of  a  number  of  permitted  purposes.  These  purposes  include  erecting, placing  and  operating  machinery  and  plant  in  connection  with  mining  operations,  depositing  or  treating  minerals  or tailings and using the land for any other specified purpose directly connected with mining operations. AngloGold Ashanti owns the mineral rights and has 21-year term mining leases with rights of renewal to all of its mining areas  in  Australia,  including  its  proportionate  share  of  joint  venture  operations.  Both  the  group  and  its  joint  venture partners are fully authorized to conduct operations in accordance with relevant laws and regulations. The mining leases and rights of renewal cover the current life-of-mine at AngloGold Ashanti's operations in Australia.


North America United States of America
 
 Mineral rights, as well as surface rights, in the United States are owned by private parties, state governments and the federal  government. Most  land  prospective  for  precious  metals  exploration,  development and  mining  is  owned  by  the federal  government  and  is  obtained  through  a  system  of  self-initiated  mining  claim  location  pursuant  to  the  General Mining  Law  of  1872,  as  amended.  Individual  states  typically  follow  a  lease  system  for  state-owned  minerals.  Private parties have the right to sell, lease or enter into other agreements, such as joint ventures, with respect to minerals that they own or control. All mining activities, regardless of whether they are situated on privately- or publicly-owned lands, are  regulated  by  a  myriad  of  federal,  state  and  local  laws,  regulations,  rules  and  ordinances,  which  address  various matters including environmental protection, mitigation and rehabilitation.
 
 Authorizations  and  permits setting  forth  the activities and  restrictions  pertaining  thereto  are  issued  by  the  responsible governmental agencies for all phases of mining activities.
 
 Cripple  Creek  &  Victor  Gold  Mining  Company’s  Cresson  Project  consists  almost  entirely  of  owned,  patented  mining claims from public lands, with  a small percentage of private  and state lands being leased. The total area of control is approximately  7,100  acres.  Patented  claims  vest  ownership  in  the  holder,  including  the right  to  mine  for  an  indefinite tenure. All life-of-mine reserves are within these property controls. The mining and rehabilitation permits issued by the State of Colorado are life-of-mine permits.
 
 South America
  Argentina
  
 According  to Argentinean  mining legislation,  mines  are the private  property  of the  nation or a province, depending on where  they  are  located.  Individuals  are  empowered  to  explore  for  and  to  exploit  and  dispose  of  mines  as  owners  by means of a legal license granted by a competent authority under the provisions of the Argentine Mining Code. The legal licenses granted for the exploitation of mines are valid for an undetermined period, provided that the mining title holder complies with the obligations settled in the Argentine Mining Code. In Argentina, the usual ways of transferring a right over a mining license are: to sell the license; to lease such a license; or to assign the right under such a license by a beneficial  interest  or  Usufruct  Agreement.  In  the  case  of  Cerro  Vanguardia –  AngloGold  Ashanti's  operation  in Argentina –  the  mining  title  holder  is  its  partner,  Fomicruz,  and  in  terms  of  the  Usufruct  Agreement  signed  between them  and  Cerro  Vanguardia  SA  on  December 27,  1996,  the  latter  has  the  irrevocable  right  to  the  exploitation  of  the deposit for a period of 40 years. This agreement expires on December 27, 2036.
 
 Brazil
  
 In Brazil, there are two basic mining rights:
  •    In  general, exploration licenses are  granted on a first-come, first-served  basis.  Mining concessions are  granted to  the holders of exploration licenses that manage to prove the existence of a Mineral Resource and have been licensed by the competent environmental authority.
  Mine manifests (mining titles granted in 1936) and mining concessions (mining titles presently granted through an order signed by  the  Secretary  of  Mines of  the Ministry  of  Mines  and  Energy)  are  valid  for  an  undetermined  period  until  the depletion  of  reserves,  provided  that  the  mining  title  holder  complies  with  current  Brazilian  mining  and  environmental legislation, as well as with those requirements set out by the National Department of Mineral Production (DNPM) which acts as the inspecting entity for mining activities. Obligations of the titleholder include:
  •  the  start  of  construction,  as  per  an  approved  development  plan,  within  six  months  of  the  issuance  of  the  concession;


The  difference  between  a  mine  manifest  and  a  mining  concession  lies  in  the  legal  nature  of  these  two  mining  titles, since it is much more difficult and complicated for the public administration to withdraw a mine manifest than a mining concession.
  Although, in practice, it is possible for a manifest to be cancelled or to become extinct if the abandonment of the mining operation is formally proven. All of AngloGold Ashanti's operations in Brazil have indefinite mining licenses. Colombia The underlying principle of Colombian mining legislation is: first in time, first in right. The process starts with a proposal, the presentation of which gives a right of preference, if the area is free, to obtain the area.    The  maximum  extent  of  an  area  covered  by  such  a  proposal  is  10,000  hectares.  Once  a  proposal  has  been received, the relevant government agency undertakes an investigation to determine whether another proposal has been received regarding the area concerned or whether an existing contract for the area is already in place. The government agency grants a “free zone” when the proposal made has a right of preference. The new law includes the possibility for the government to reserve some areas to offer in a beat process. The concession contract The  government  agency  grants  an  exclusive  concession  contract for exploration  and  exploitation.  Such  a concession allows  the  concessionaire  to  conduct  the  studies,  works  and  installations  necessary  for  establishing  the  existence  of minerals  and  their  exploitation.  The  total  term  of  such  a  concession  is  30  years.  The  extension  of  the  concession contract was changed, it is not automatic, and it is for an additional 20 years. To get the extension the concessionaire must  ask  for  the  extension  2  years  before  the  termination  of  the  initial  30  years,  and  has  to  present  economical, environmental and technical information.
  Because the extension is not automatic, the concessionaire has to re-negotiate the new conditions of the extension. According to the new law the exploration period has been extended until 11 years, to get the extension, every two years the concessionaire must present a technical report and explain the activities for the next two years. Once  the  concessionaire  has  completed  its  exploration  program,  a  proposed  plan  of  works  and  installations  of exploitation and a study of the environmental impact must be completed in order to receive an environmental license, without which it is not possible to start the development program necessary to begin mining. The terms of the concession start from the date of registration of the contract at the National Mining Register; similarly, all obligations begin at that date. Once a mining concession has been awarded, the operating entity must take out an insurance policy to cover any possible environmental damage and its mining obligations. There  are  some  areas  where  mining  activity  is  prohibited.  These  areas  are:  a)  national  parks;  b)  regional  parks,  c) protected forest reserves; d) Paramus (included in the new law) and f) wetlands, according to the Ramsar Convention (included in the new laws).
  For the forest reserves (that are not protective forest reserves) it is necessary to subtract this area to start any mining activity.Surface fee  During exploration and construction of the infrastructure for the Mine: The new law changes the payments of the cannon fees. Without taking into consideration the extension of the areas, as it was before, the amount of the cannon changes according to the number of years:
•


Royalty The royalty paid to the Colombian government is equivalent to a percentage of the exploited primary product, the object of the mining title, and its sub-products. For gold, the percentage of the royalty to be paid is 4 percent. The system of royalty payments and adjustments to such payments apply from the date the concession contract comes into force and for the entire period of its validity. Any official changes to the laws governing the payment of royalties will only apply to contracts granted and completed after these laws have been promulgated. REVIEW OF OPERATIONS  ANGLOGOLD ASHANTI GLOBAL OPERATIONS AND EXPLORATION : 2009 AngloGold  Ashanti  is  a  global  leader  within  the  gold  mining  business  and  conducts  a  focused,  worldwide  exploration program. In the course of mining and processing the ore mined, silver, uranium oxide and sulfuric acid are produced as by-products at the Argentinean, South African and Brazilian operations. OPERATING PERFORMANCEAngloGold Ashanti has 21 operations in 10 countries on four continents. These operations are managed on a regional basis,  namely  Southern  Africa  (South  Africa  and  Namibia),  Continental  Africa  (Ghana,  Guinea,  Mali  and  Tanzania), Australasia (Australia), North America (United States of America), and South America (Argentina and Brazil).


In 2009, AngloGold Ashanti produced 4.599 million ounces of gold, a decrease of 8 percent on the 4.982 million ounces produced in 2008.  The year-on-year decline in production was a result of:
             SafetyFor  AngloGold  Ashanti,  people  come  first  and  consequently,  safety  remained  the  highest  priority  for  the  company. AngloGold  Ashanti  will  continue  to  strive  to  improve  its  safety  performance  across  its  global  asset  base.  AngloGold Ashanti’s focus  on  safety  continued  in  2009.    The  company’s  approach  to  managing  risk  and  enabling  employees  to work safely in a supportive work environment is based on a new conversational culture, where many voices participate and  make  a  meaningful  contribution  to  designing  the  way  in  which  the  company  works  and  protects  itself  from  both known  and  unexpected risks.  The success of  this approach  depends on four key factors - leadership;  engagements; systems and learning.  For these factors to be effective, they need to occur in an enabling environment.  The focus on safety  transformation  process  is  on  moving  the  organization  towards  a  culture  of  engagement  and  learning  that stimulates awareness of the nature of risk.
  It  is  with  much  regret  that  the  company  reports  that  16 employees  lost  their  lives  in  work  related  accidents  in  2009 (2008: 14  fatalities).    While  it  is  particularly  disappointing  that  this  figure  indicates  a  relapse  from  the  prior  year, AngloGold Ashanti remains focused on decreasing the long-term trend of fatal accidents. Expressed  in  terms  of  safety  performance  statistics,  the  fatal  injury  frequency  rate  (FIFR)  was  0.10 per  million  hours worked, compared with 0.09 in 2008 and 0.21 in 2007.  The lost-time injury frequency rate (LTIFR) in 2009 was 6.57 per million hours worked compared with 7.32 in 2008 and 8.24 in 2007.  Operational reviewGiven the focus on optimizing operational  performance  and  maintaining  costs,  AngloGold  Ashanti continued  to invest significantly  in  capital  expenditure.    Capital  expenditure  for  the  year  amounted  to  $1,027 million  (2008: $1,239 million).


55
 
 
 
  
 Attributable tonnes
 Average grade
 Attributable gold
 Total cash costs
 
 
  
   treated/milled (Mt)
 recovered (g/t)
 production (000oz)
 ($/oz)
 
 
   
   
              
 SOUTHERN AFRICA
 
  
 
 1,862    
  2,167    2,408
 
 
  South Africa
  
   Vaal River
 
  
 
 
   
  
   
   
              
   
   
              
   
   
              
   
   
              
  West Wits
 
   
  
   
   
    
         
   
   
         
    
   (1)
   
              
  Namibia
 
  
 
 
 
   
   
              
 CONTINENTAL AFRICA
 
   
 1,520  1,562  1,575
  
  Ghana
 
  
 
 
 
   (2)(3)
   
              
   (1)
   
              
  Guinea
 
  
 
 
 
   (2)
   
              
  Mali
 
  
 
 
 
   
   
              
   
   
              
   (4)
   
              
  Tanzania
 
  
 
 
 
   
   
              
 AUSTRALASIA
 
  
 
 401
 433
 600
 
 
 
 Australia
 
 
 
 
 
 
   (2)
   
              
 NORTH AMERICA
 
  
 
 218
 258
 282
 
 
 
 United States of America
 
 
 
 
 
 
   (4)
   
              
 SOUTH AMERICA
 
   
 598
 562
 612
  
  Argentina
 
  
 
 
 
     
   
              
  Brazil
 
  
 
  
   (1)
   
              
   (1)
  
              
 AngloGold Ashanti
 
  
 
 4,599  4,982  5,477
 534
 465
 367
 
 
  
 
  
 
 
             (1)
 
 The yield of TauTona, Brasil Mineraçáo, Serra Grande and Obuasi represents underground operations.
 
 (2)
 
 The yield of Sunrise Dam, Iduapriem and Siguiri represents open-pit operations.
 
 (3)
 
 The noncontrolling shareholdings of the International Finance Corporation (10 percent) and Government of Ghana (5 percent) were acquired
 effective September 1, 2007, and Iduapriem is now wholly-owned by AngloGold Ashanti.
 
 (4)
 
 The yield of Yatela and Cripple Creek & Victor Joint Venture reflects recoverable gold placed/tonnes placed.  The remaining 33 percent interest in
 Cripple Creek & Victor was acquired effective July 1, 2008.


SOUTHERN AFRICA
 
 AngloGold Ashanti’s Southern Africa region includes the company’s operations in South Africa and Namibia.  In 2009, the Southern Africa region produced 1.862 million ounces (2008: 2.167 million ounces) of gold, equivalent to 40 percent of total production.SOUTH AFRICAAngloGold Ashanti’s South African operations comprise seven deep-level mines and one surface  operation. They are Great Noligwa, Kopanang, Tau Lekoa, Moab Khotsong and the surface operation, which make up the Vaal River region, and  Mponeng,  Savuka  and  TauTona,  which  make  up  the  West  Wits  region.  Together,  these  operations  contributed 39 percent to group production in 2009.Location:AngloGold Ashanti’s South Africa region includes seven underground operations located in two geographic areas on the Witwatersrand Basin.  These are: · Vaal River area  · West Wits area
 Geology:  The  Witwatersrand  Basin  comprises  a  six-kilometer  thick  sequence  of  inter-bedded  argillaceous  and arenaceous  sediments  that  extend  laterally  for  some  300  kilometers  north-east/south-west  and  100  kilometers  north-west/south-east on the Kaapvaal Craton.  The upper portion of the basin, which contains the orebodies, crops out at its northern  extent  near  Johannesburg.  Further  west,  south  and  east  the  basin  is  overlain  by  up  to  four  kilometers  of Archaean, Proterozoic and Mesozoic volcanic and sedimentary rocks. The Witwatersrand Basin is late Archaean in age and is considered to be in the order of 2.7 to 2.8 billion years old.


Gold occurs in laterally extensive quartz pebble conglomerate horizons or reefs, generally less than two meters thick, and  are  widely  considered  to  represent  laterally  extensive  braided  fluvial  deposits.    Separate  fan  systems  were developed at different entry points and these are preserved as distinct goldfields.  There is still much debate about the origin  of  the  gold  mineralization  in  the  Witwatersrand  Basin.  Gold  was  generally  considered  to  have  been  deposited syngenetically with the conglomerates, but increasingly an epigenetic origin theory is being supported. Nonetheless, the most  fundamental  control  to  the  gold  distribution  in  the  Basin  remains  the  sedimentary  features,  such  as  facies variations  and  channel  directions.  Gold  generally  occurs  in  native  form  often  associated  with  pyrite  and  carbon,  with quartz being the main gangue mineral.Safety:    Tragically,  there  were  13  fatalities  (2008:  11  fatalities)  at  the  South  African  operations  during  the  year  in 938 accidents. The FIFR for 2009 was 0.14 per million hours worked (2008: 0.12 and 2007: 0.29), while the LTIFR was 10.40 per  million  hours  worked  (2008:11.24  and  2007:12.72).  AngloGold  Ashanti  remains  focused  on  eliminating  all workplace injuries across the operations and are encouraged by the improvement in the LTIFR, which has fallen for the third  consecutive  year  to  the  lowest  level  ever  recorded  by  the  group.  In  all,  95  full  production  shifts  and  73  partial production shifts were lost at the South African operations due to safety related stoppages.A  number  of  initiatives  were  implemented  in  2009  to  help  achieve  the  company’s  aim  of  eliminating  safety  incidents. With  “Safety  is  our  First  Value”  as  the  cornerstone  of  this  effort,  the  South  Africa  operations  continued  to  push  the “White Flag Day” initiative to signify injury-free days at each operation. The company also initiated the “It’s OK to Stop!”program  to encourage  employees  at  all  levels  to  call  work  to  a  halt  in  unsafe  conditions.  The  “5-TEEN”process  was developed to focus on analyzing the activities of the crews in the worst 15 percent of safety performers, and providing support  to  effect  rapid  improvement.  An  analysis  of  those  teams  was  conducted  in  three  phases  during  August  and December 2009 and January 2010.
  In addition, a three-tier approach to investigation and recovery from fatal accidents was adopted in South Africa, starting with  the  mandatory  on-site  inspection  and followed  by  a  peer  review  by  an  independent  team  and a  technical  review which included representation from both the company’s executive and the state’s mine inspectorate. This new structure is designed to adapt and change safety processes and policies where necessary. These  initiatives  were  underpinned  by  the  use  of  a  new  risk  management  system  software  application  which  was installed during the course of the year and is expected to be fully functional during the first quarter of 2010. The South African  operations  successfully  passed  their  OHSAS  18001:  2007,  First  Advance  Part  2  assessments,  a  crucial  step toward both strengthening existing protocols and establishing common Health and Safety Management systems. Taken together, these programs form part of AngloGold Ashanti’s Safety Transformation. Safety  Transformation  is an ongoing program designed  to deliver  on  AngloGold  Ashanti‘s  safety values. It addresses the company’s approach to managing risk through the development of an organizational culture based on engagement and learning, facilitated by effective leadership and underpinned by enabling and sustaining systems. Rollout will begin at three global pilot sites during April 2010, following a global launch on April 20, 2010 in South Africa.
  Operating  review:  Gold  production  for  South  Africa  totaled  1.797 million  ounces  in  2009,  a  decline  on  the  previous year’s  production  of  2.099 million  ounces.  This  decline  was  mainly  a  result  of  a  10 percent  reduction  in  underground recovered grade and decreased volume due to:
  •
 More rigorous policing  of safety regulations  by company management and state mine inspectors which caused longer and more frequent stoppages, both following accidents and as a pre-emptive safety measure.
  A  seismic  event  in  May  that  caused  significant  damage  to  the  underground  infrastructure  at  Savuka,  requiring mining activity to be suspended while repairs were made.
  An  eight-week  suspension  of  mining  at  TauTona  to  conduct  a  thorough  inspection  and  repair  of  all  shaft steelwork following an incident in October when a length of steel dislodged from the shaft wall.
    Total  cash  costs  at  of  the  South  African  operations  increased  from  2008,  as  a  result  of  a  decline  in  production  and increased costs driven largely by annual wage increases, higher power tariffs and inflation on input costs, being offset by the contributions from uranium sales.


Bi-annual South African wage negotiations were successfully concluded in the third quarter, with AngloGold Ashanti and its partners in local trade unions agreeing to an increase that had a 9.7 percent impact on payroll costs for the South African operations in the first year starting July 1, 2009. In the second year, the impact will be 1 percent above inflation, with a guaranteed minimum of 7.5 percent. This settlement, which AngloGold Ashanti believes is fair to all parties, was concluded after a constructive, three-month interaction.
 
 Power  tariffs  levied  by  Eskom,  the  state-owned  power  utility,  increased  by  31.3 percent  in  2009,  placing  additional pressure on cash costs.
  Uranium is a by-product of gold mining at South Africa’s Vaal River operations. In 2009, total uranium production was 1.4 million pounds, 8 percent more than the previous year’s 1.3 million pounds, due to improved recoveries.
  Capital expenditure in South Africa in 2009 totaled $395 million (2008: $347 million).
  Community  and  environment:The  South  African  operations  manage  community  and  environmental  matters  within integrated  programs  that  ensure  compliance  with  legislation  and  also  fulfillment  of  all  obligations  to  stakeholders, including  host  communities  and  the  Department  of  Mineral  Resources  (DMR).  Both  the  Vaal  River  and  West  Wits operations  have  a  detailed  Social  and  Labor  Plan  (SLP)  and  Environmental  Management  Plan  (EMP),  developed  in accordance with relevant legislation. SLP reports, which detail progress made against firm targets, are submitted to the DMR  annually  along  with  EMP  audits.  Both  plans  are  drawn  up  after  interactions  with  both  host  communities  and government agencies.
  No  significant  issues  were  raised  by  either  communities  or  government  on  sustainability  issues  during  the  year.  The EMPs are certified to the ISO 14001 environmental management system standard.  All of the South African operations are fully compliant with the International Cyanide Management Code (Cyanide Code).
    Vaal River operations
 Description:  The  Great  Noligwa,  Kopanang,  Moab  Khotsong  and  Tau  Lekoa  mines  are  situated  near  the  towns  of Klerksdorp  and  Orkney  on  the  border  of  North  West  Province  and  the  Free  State.  The  Vaal  River  operations  have among  them  four  gold  plants,  one  uranium  plant  and  one  sulfuric  acid  plant.  Combined,  the  Vaal  River  operations, which include the surface division, produced 32.025 kilograms or 1.029 million ounces of gold (2008: 34.785 kilograms or  1.119 million  ounces),  which  is  55 percent  of  the  South  African  division’s  production  and  22 percent  of  group production.Geology:  In  order  of  importance,  the  reefs  mined  at  the  Vaal  River  operations  are  the  Vaal  Reef,  the  VCR  and  the “C” Reef:    20g/t  and  comprises  a  series  of  oligomictic  conglomerates  and  quartzite  packages  developed  on  successive  unconformities.  Several  distinct  facies  have  been  identified,  each  with  its  unique  gold  distribution  and  grade  characteristic.    reserves.  The economic portion is mainly concentrated in the western part of the lease area and can take the  form  of  a  massive  conglomerate,  a  pyritic  sand  unit  with  intermittent  pebble  layers  or  a  thin  conglomerate  horizon.    The  reef  is  located  at  the  contact  between  the  overlying  Kliprivierberg  Lavas  of  the  Ventersdorp  SuperGroup and the underlying sediments of the Witwatersrand SuperGroup which creates a distinctive seismic  reflector.  The VCR is located up to one kilometer above the Vaal Reef.    270 meters above the Vaal Reef.  It has less than 1 percent of the estimated reserves with grades similar to the  Vaal  Reef,  but  more  erratic.    The  most  significant  structural  features  are  the  north-east  striking  normal  faults  which dip to the north-west and south-east, resulting in zones of fault loss.


59
 
 
 
 
 Vaal River – Summary of metallurgical operations
 
 
 
 
 
 
 West Gold
 Plant
 East Gold
 Acid and
 Float Plant
 
 Noligwa
 Gold Plant
 Mispah Gold
 Plant
 Kopanang
 Gold Plant
 
 Gold plants
 
 
 Capacity (000 tonnes/month)
 180
 309
 263
 140
 420
 
 Uranium plants
 
 
 Capacity (000 tonnes/month)
 –
 –
 263
 –
 –
 
 Pyrite flotation plants
 
 
 Capacity (000 tonnes/month)
 –
 250
 145
 –
 –
 
 Sulfuric acid plants
 
 
 Production (tonnes/month)
 –
 7,500
 –
 –
 –
 
 
  
 
 
 
 
 
 
  Operating and production data for Vaal River operations
 
 
  
 
  
 
  
 
 
 
 
 
  
 
  
 
 Great
 Noligwa
 Kopanang
 
 Moab
 Khotsong
 Tau Lekoa Vaal River
 surface
 
  
 2009
  
 
 
 
 
  
 Pay limit (oz/t)
  
 
 0.43
 0.40
 0.60
 0.21
 0.007
 
  
 Pay limit (g/t)
  
 
 14.90
 13.85
 20.57
 7.27
 0.225
 
  
 Recovered grade (oz/t)
  
 
 0.167
 0.197
 0.273
 0.097
 0.015
 
  
 Recovered grade (g/t)
  
 
 5.73
 6.74
 9.36
 3.32
 0.53
 
  
 Gold production (000 oz)
  
 
 158
 336
 247
 124
 164
 
  
 Total cash costs ($/oz)
  
 
 791
 408
 421
 718
 378
 
  
 Total production costs ($/oz)
  
 
 994
 598
 749
 766
 390
 
  
 Capital expenditure ($ million)
  
 
 24
 58
 104
 17
 3
 
  
 Employees
  
 
 4,612
 5,612
 4,334
 2,700
 228
 
  
 Outside contractors
  
 
 127
 447
 1,735
 414
 6
 
  
 2008
  
 
 
 
 
  
 Pay limit (oz/t)
  
 
 0.29
 0.32
 0.69
 0.17
 0.007
 
  
 Pay limit (g/t)
  
 
 10.07
 11.07
 23.51
 5.70
 0.206
 
  
 Recovered grade (oz/t)
  
 
 0.214
 0.199
 0.271
 0.104
 0.011
 
  
 Recovered grade (g/t)
  
 
 7.33
 6.82
 9.31
 3.58
 0.36
 
  
 Gold production (000 oz)
  
 
 330
 362
 192
 143
 92
 
  
 Total cash costs ($/oz)
  
 
 458
 348
 375
 524
 446
 
  
 Total production costs ($/oz)
  
 
 564
 500
 641
 720
 478
 
  
 Capital expenditure ($ million)
  
 
 26
 47
 89
 18
 1
 
  
 Employees
  
 
 5,472
 5,620
 2,914
 2,650
 227
 
  
 Outside contractors
  
 
 271
 411
 1,823
 384
 7
 
  
 2007
  
 
 
 
 
  
 Pay limit (oz/t)
  
 
 0.34
 0.36
 1.52
 0.16
 0.008
 
  
 Pay limit (g/t)
  
 
 11.69
 12.18
 52.12
 5.39
 0.245
 
  
 Recovered grade (oz/t)
  
 
 0.220
 0.211
 0.232
 0.106
 0.014
 
  
 Recovered grade (g/t)
  
 
 7.54
 7.24
 7.94
 3.62
 0.49
 
  
 Gold production (000 oz)
  
 
 483
 418
 67
 165
 125
 
  
 Total cash costs ($/oz)
  
 
 404
 306
 672
 473
 304
 
  
 Total production costs ($/oz)
  
 
 513
 400
 1,254
 752
 328
 
  
 Capital expenditure ($ million)
  
 
 37
 52
 89
 16
 1
 
  
 Employees
  
 
 5,908
 5,470
 1,986
 2,506
 211
 
  
 Outside contractors
  
 
 726
 465
 1,548
 345
 11
 
 
  
  
 
  
 
 
 
 
 
  Total  cash  costs  and  total  production  costs  are  non-GAAP  measures.    For  further  information  on  these  non-GAAP  measures,  see  “Item  5A.:
 Operating results – Total cash costs and total production costs”.
 
  Average for the year.


Great NoligwaDescription: Great Noligwa adjoins Kopanang and Moab Khotsong and is located close to the town of Orkney on the Free  State  side  of  the  Vaal  River.  The  Vaal  Reef,  the  primary  reef,  and  the  Crystalkop  Reef,  a  secondary  reef,  are mined here. This mining  operation consists of a twin-shaft system and operates over  eight  main levels  at an average depth of 2,400 meters below surface.
  Given  the  geological  complexity  of  the  orebody  at  Great  Noligwa,  a  scattered  mining  method  is  employed.  The  mine shares a  milling and treatment circuit with  Moab Khotsong and  Kopanang  Mine, which applies conventional crushing, screening, SAG grinding and carbon-in-leach (CIL) processes to treat the ore and extract gold. Safety:  The mine achieved its first ever two million fatality-free shifts on July 16 2009 while the vertical transport and SV3  sections  received  one  million  fatality-free  shift  awards  during  the  year.  Safety,  as  measured  by  the  LTIFR, improved significantly with 10.90 per million hours worked recorded for the year (2008: 14.66). The mine achieved the benchmarks  for  all  safety  indices  in  2009.  There  was  one  fatality  in  2009,  caused  by  a  fall  of  ground  (2008:  1).  The “White Flag Day Every Day”and “It’s OK to Stop”campaigns were the two major contributors to improved safety. Other safety initiatives include daily shaft-based communication and visibility tours by both management and union leadership. Management-initiated  safety  stoppages  also  had  a  positive  impact  on  physical  conditions  underground  and  on  the improved safety performance.  Great Noligwa maintained its OHSAS 18001:2007 and ISO 14001 certification in 2009. Operating review:Gold production fell to 158,000 ounces in 2009 from 330,000 ounces in 2008. The decline in output was due mainly to the transfer of the high-grade SV4 section of the mine to the Moab Khotsong upper mine from July 2008, as well as an underground fire in March and various safety-related stoppages including those requested by both the  DMR  and  mine  management.    In  addition,  about  33  panels  were  affected  by  the  intersection  of  complex, unexpected geological structures, which limited mining flexibility and development. Yield declined by 22 percent, mainly because of the transfer of the high-grade SV4 section to Moab Khotsong and the lower grades mined due to the limited flexibility.
  Total  cash costs  for  the  year  rose  to  $791 per  ounce  (2008:  $458 per ounce).  This  increase  was  mainly  the  result  of lower production volumes and inflationary pressures on wages and power tariffs.Capital expenditure of $24 million (2008: $26 million) was spent. Growth prospects: Given that Great Noligwa is a mature operation, it is in the process of converting from conventional scattered mining to pillar and/or remnant mining for the remainder of its operational life. The Vaal Reef, which has been the  most  economically  viable  reef  at  Great  Noligwa,  is  being  depleted  and  the  less  economical  Crystalkop  Reef  is increasingly  being  exploited  together  with  the  economically  viable  pillars  and  remnants  containing  the  Vaal  Reef. Growth opportunities  are therefore limited to the possible inclusion of a few Vaal and Crystalkop Reef safety haulage pillars that are not currently part of the reserve. A feasibility study is currently being conducted to determine the viability of establishing alternate routes for men, material, ore and ventilation, to replace these haulages. Should that prove to be successful, these pillars may be mined and will then be included in the 2011 Business Plan.   KopanangDescription: Kopanang adjoins Great Noligwa and is located close to the town of Orkney on the Free State side of the Vaal River. The major reef mined at Kopanang is the Vaal Reef, while a secondary reef, the Crystalkop Reef, is mined on a smaller scale. Mining operations are conducted at depths ranging from 1,280 meters to 2,240 meters.  The  Kopanang  operation  comprises  a  single  shaft  system.  Given  the  geologically  complex  orebody  occurring  at Kopanang, a scattered mining method is used with the orebody being accessed mainly via footwall tunneling, raised on the  dip  of  the  reef  and  stoped  on  strike.  Kopanang  has  a  gold  processing  plant  that  uses  both  conventional  semi-autogenous  grinding  and carbon-in-pulp  technology.  There  are  two  streams  of  ore  into  the  plant,  one  of  which  is fed mainly by Vaal Reef ore while the other is fed exclusively by Ventersdorp Contact Reef ore from Tau Lekoa.  As  the  ore  mined  at  Kopanang  also  contains  uranium  as  a  by-product,  about  40 percent  of  the  Vaal  Reef  ore  mined here is sent to the gold plant at Great Noligwa for uranium extraction. Safety: There was one fatality at Kopanang in 2009, the result of a fall of ground related accident (2008: 2). The overall safety  performance  improved  during  the  year  with  an  LTIFR  of  11.46  per  million  hours  worked  (2008:  12.86),  and  a


FIFR  of  0.07  per  million  hours  worked  (2008:  0.14).  The  mine  achieved  two  significant  safety  milestones  in  2009: 1.5 million  fatality-free  shifts  in  March  2009  and  750,000  fatality-free  shifts  in  November  2009.  Kopanang  ended  the year  at  954,410  fatality-free  shifts.    Mitigation  strategies  were  implemented  to  improve  safety  performance,  to ameliorate  risks  associated  with  falls  of  ground  and  to  improve  support  standards  used  in  development,  horizontal transport  and  cooling  of  the  work  environment.    Kopanang  won  the  Safety  Shield;  Horizontal  Transport  and  Vertical Transport competitions. The mine retained its OHSAS 18001:2007 certification. Operating review: Gold production fell to 336,000 ounces in 2009 less than 2008’s production of 362,000 ounces. An 8 percent decline in volumes  mined was the major contributor to the decline. Safety-related work stoppages, complex geological structures and insufficient available face length all contributed to the lower volumes. Total cash costs increased to $408 per ounce (2008: $348 per ounce). This was as a result of lower production as well as inflationary pressures on wages and power tariffs. The capital expenditure totaled $58m for the year compared to $47m in 2008.  Growth prospects: Four  brownfield projects have been  identified which could  extend the life of  Kopanang: Gencor 1 East extension, Crystalkop Reef, the shaft fault area and the ground below current infrastructure on 68 Level. Moab KhotsongDescription:   Moab Khotsong, which began commercial production in January 2006, is located south and south-east of  Great  Noligwa  and  Kopanang  in  the  Free  State  province.  The  mine  was  developed  principally  to  exploit  the  Vaal Reef. The first phase of this operation included development of a main shaft system, a subsidiary ventilation shaft and three main production levels between 2,600 meters and 3,054 meters below surface. The SV4 section transferred from Great Noligwa in 2008 and renamed Top Mine, was included in Moab Khotsong’s 2009 results.Given the known geological complexity of the Vaal Reef, a scattered mining method is employed with haulages, cross cuts and raises pre-developed in a grid system.Safety: The safety performance at Moab Khotsong deteriorated in 2009. Four fatalities were recorded during the year, three  as  a  result  of  falls-of-ground  and  the  other  a  backfill  accident.  The  LTIFR  was  14.16  per  million  hours  worked (2008: 11.98) and the FIFR per million hours worked was 0.29 (2008: 0.08). A safety audit of the entire operation was conducted by external and internal auditors to measure compliance with stoping, and development support standards, as well as the operation of trucks, tramming and explosive controls. The results of these audits were applied to make improvements.  Encouragingly, the mine achieved 500,000 fatality free shifts in September 2009, 750,000 fatality-free shifts in November 2009 and ended the year with 907,376 fatality free shifts.  The 5-TEENprocess was implemented to monitor  the  worst  15 percent  of  safety  performers.  Additional  training  was  provided  to  refocus  attention  on  the prevention of accidents and the importance of working to established safety standards. Quarterly safety presentations were  also  held  to  reinforce  overall  compliance  with  group-wide  safety  protocols.  By  year-end,  all  employees  had received risk assessment training.  Moab Khotsong received eight Section 54 directives from the Department of Mineral Resources during the course of the year, resulting in the loss of 26 production shifts. The mine successfully completed part one of the OHSAS first advance assessment in January 2009 with the second part conducted in  July 2009. The mine also successfully maintained its ISO 14001 certification after a re-assessment audit was conducted by DQS during July 2009.Operating review: Great Noligwa’s SV4 section was incorporated into Moab Khotsong as the Top Mine from July 2008 and  combined  with  a  ramp-up  in  Middle  Mine  production  resulted  in  an  increase  in  production  to  247,000 ounces  in 2009  from  192,000 ounces  in  2008.    The  grades  mined  increased  by  1 percent  to  9.36g/t  and  volumes  treated increased  by  28 percent,  due  mainly  to  the  Top  Mine’s  inclusion  as  well  as  ramp-up  activities  in  the  Middle  Mine. Production was, however, hampered by safety, and mining, related stoppages and unexpected geological occurrences which  affected  production  at  the  Middle  Mine.  The  latest  geological  modeling  indicates  that  more  Ore  Reserve development will be necessary to access the orebody. Total cash costs increased to $421 per ounce due to higher labor and power costs, partially offset by higher production (2008: $375 per ounce).
  Capital expenditure for the year totaled $104 million (2008: $89 million).


Growth prospects: The feasibility study for the optimal extraction of the orebody within the lower mine area of Moab Khotsong, beneath the farm Zaaiplaats, is complete. The project extends the mine’s life and involves its deepening from 101 to 115 level. This project is estimated to access 160,000 kilograms (5.14Moz) and is expected to go to the board for approval during 2010 and a development start date in 2011. Tau LekoaDescription: Tau Lekoa is one of four mining operations in the Vaal River area. It is close to the town of Orkney on the North West Province side of the Vaal River. Unlike the other Vaal River operations, the major reef mined at Tau Lekoa is the Ventersdorp Contact Reef. Mining operations are conducted at depths ranging from 800 meters to 1,743 meters, making this one of the shallower AngloGold Ashanti mines in South Africa. The  Tau  Lekoa  operation  comprises  a  twin-shaft  system.  Because  of  its  geologically  complex  orebody,  a  scattered mining  method  is  used  at Tau  Lekoa  with  the  orebody  being  accessed via footwall  tunneling.  Stoping  takes  place  on strike.  There  are  currently  seven  shaft  levels  with  an  average  of  70  panels  in  operation.  Tau  Lekoa  employs  hydro-power as its primary source of energy. Ore mined at Tau Lekoa is processed and treated in preparation for gold extraction at the Kopanang gold plant. On February 17,  2009, AngloGold Ashanti announced that it had agreed to  sell, with effect from  January 1,  2010, the Tau  Lekoa  mine,  together  with  the  adjacent Weltevreden, Jonkerskraal  and  Goedgenoeg  project  areas,  to  Simmer  & Jack Mines Limited (Simmers). On November 25, 2009, AngloGold Ashanti announced that the closing of the sale may be  delayed  pending  approval  by  the  South  African  Department  of  Mineral  Resources  (DMR)  of  the  transfer  of  the applicable mining rights, the only remaining condition to the sale. AngloGold Ashanti and Simmers have subsequently agreed  to  extend  the  deadline  for  the  completion  of  the  transaction  from  March 31,  2010  to  September 30,  2010,  to allow for a further possible delay in closing pending the approval of the DMR. Closing of the transaction is anticipated to occur before September 30, 2010.Safety:There were two fatalities at Tau Lekoa (2008: 0), one caused by a locomotive accident and the other a seismic fall  of  ground.    Consequently,  the  FIFR  per  million  hours  worked  deteriorated  to  0.25  while  the  LTIFR  improved  to 15.68 per million hours worked (2008: 16.57). The mine achieved a million fatality-free shifts on February 3, 2009 for the first  time  ever  in  its  24-year  history.  Tau  Lekoa  continued with  its  “Pathway  to  Success”campaign  to enhance  safety performance  with  an  emphasis  on  AngloGold  Ashanti’s  four  key  strategic  safety  areas.  Seven  Section  54  directives were issued by the DMR, each lasting two days. Section 54 of South Africa’s Mine Health and Safety Amendment Act 2008 orders the closure of a shaft or mining area deemed unsafe. These stoppages related to various factors including appropriate  entry  examinations  for  miners,  temporary  and  permanent  support  standards,  signaling  devices  and geological features. Tau Lekoa retained its OHSAS 18001 and ISO 14001 certification. Operating review:Gold production declined from 143,000 ounces in 2008 to 124,000 ounces in 2009. This was largely attributable to grade recovery which decreased to 3.32g/t, a consequence of mining activities being focused towards the lower grade boundary.
  Total  cash  costs  rose  to  $718 per  ounce  from  $524 per  ounce  in  2008.  This  was  mainly  attributable  to  the  lower production as well as inflationary pressures on wages and consumables. Capital expenditure for the year totaled $17 million (2008: $18 million). Growth prospects: On February 17, 2009, AngloGold Ashanti announced that it had agreed to sell the Tau Lekoa mine to Simmer & Jack Mines Limited.Vaal River SurfaceDescriptionThe resources of AngloGold Ashanti South Africa’s surface operation include the waste rock dumps and tailings storage facilities. Dedicated surface-source treatment plants together with spare capacity at the primary gold plants in the area are used to treat material from the waste rock dumps and tailings storage facilities. These dedicated surface plants are the Mispah Gold Plant, which treats material from the Great Noligwa waste rock dump, and the East Gold Acid & Float Plant which treats material from the sulfur pay dam.  As at December 31, 2009, surface Ore Reserve totaled 1.9 million ounces.


Safety:The  LTIFR  increased  during  the  year  from  1.18  per  million  hours  worked  in  2008  to  1.73  in  2009.  OHSAS 18001 and ISO 14001 re-certifications were obtained during 2009. A total of 307 “white flag days” was achieved during 2009. A white flag day signifies an injury-free, 24-hour period on an individual operation. Six plants achieved more than 200 consecutive white flag days. Ten plants have currently achieved more than the benchmark of 31 consecutive white flag days. The principles of the “It’s OK to Stop’’ working in a workplace considered unsafe were communicated to all employees of the division during the year. Work was stopped 34 times. Operating review:Gold production increased from 92,000 ounces in 2008  to 164,000 ounces in 2009. Reduced reef deliveries from the mines, as well as the decision to operate the plant over public holidays, resulted in greater volumes of waste rock being treated.Total cash costs decreased from $446 in 2008 to $378 per ounce, mainly a result of the increased production. This was partially offset by inflationary pressures on labor, consumables and power.Capital expenditure for the year at the surface operations totaled $3 million (2008: $1 million).• West Wits operations Description: The Mponeng, Savuka and TauTona mines are situated on the West Wits Line, near the town of Merafong (formerly  Carletonville),  straddling  the  border  of  Gauteng  and  North  West  Province.  Mponeng  has  its  own  gold processing plant, while the Savuka and TauTona operations share a plant.Together the West Wits operations produced 768,000 ounces (2008: 980,000 ounces) of gold, equivalent to 42 percent of the Southern Africa region’s production and 17 percent of group production
  
 
 
 Operating and production data for West Wits operations
 
 
 
 
 
 
 
 
 
 
 
 
 
  
   
 Mponeng
 Savuka
 TauTona
 
 2009
 
    
  
      
  
      
  
      
  
      
  
      
  (1)
      
  (1)
      
  
      
  (2)
      
  (2)
      
 2008
 
    
  
      
  
      
  
      
  
      
  
      
  (1)
      
  (1)
      
  
      
  (2)
      
  (2)


Mponeng
 Savuka
 TauTona
 
 2007
 
    
  
      
  
      
  
      
  
      
  
      
  (1)
      
  (1)
      
  
      
  (2)
      
  (2)
      
 
 
 
 
 
 
 
 
 
 
 (1)   
  Total cash costs and total production costs are non-GAAP measures.  For further information on these non-GAAP measures, see “Item 5A.:
 Operating results – Total cash costs and total production costs”.
 
 (2)  Average for the year.
 
 
 
 
 
 
 
 
 MponengDescription: Mponeng is situated between the towns of Merafong and Fochville on the border between Gauteng and North  West  Province,  southwest  of  Johannesburg.  The  mine  exploits  the  Ventersdorp  Contact  Reef  (VCR)  at  depths varying  between  2,400 meters  and  3,600 meters  below  surface,  where  a  sequential  grid  mining  method  is  employed. Access  to  the  reef  is  from  the  main  haulage  and  return  airway  development,  with  cross-cuts  developed  every 212 meters  to  the  reef  horizon.  Raises  are  then  developed  on-reef  to  the  level  immediately  above  and  the  reef  is stoped-out  on  strike.  The  Mponeng  lease  area  is constrained  to  the  north  by  the  TauTona  and  Savuka  mines,  to  the east by Gold Fields Limited’s Driefontein mine and to the west by Harmony Gold Mining Company Limited’s Elandsrand mine. No mining takes place to the south. Mponeng comprises a twin-shaft system housing two vertical shafts and two service shafts. Ore is treated and smelted at the mine’s gold plant which has a monthly capacity of 160,000t. The plant uses two semi-autogenous (SAG) mills to process the ore and the gold is extracted by means of carbon-in-pulp (CIP) technology.Geology: Two reef horizons are exploited at the West Wits operations, the Ventersdorp Contact Reef (VCR) located at the top of the Central Rand Group and the Carbon Leader Reef (CLR) near the base. The separation between the two reefs  increases  from  east  to  west  from  400  to  900  meters,  owing  to  unconformity  in  the  VCR.  TauTona  and  Savuka exploit  both  reefs  whereas  Mponeng  only  mines  the  VCR.  The  structure  is  relatively  simple;  faults  of  greater  than 70 meters are rare. The CLR consists of one or more conglomerate units and varies from several centimeters to more than  three  meters  in  thickness.  Regionally,  the  VCR  dips  at  approximately  21  degrees  but  may  vary  between  5  and 50 degrees, accompanied by changes in thickness of  the conglomerate units. Where the conglomerate has the attitude of  the  regional  dip,  it  tends  to  be  thick,  well-developed  and  accompanied  by  higher  gold  accumulations.  Where  the attitude departs significantly from the regional dip, the reef is thin, varying from several centimeters to more than three meters in thickness.Safety:There  were  three  fatalities  at  Mponeng  during  the  year  (2008:  2),  one  caused  by  a  locomotive  accident,  the second  by  a  fall  of  ground  and  the  third  a  snatch-block  incident.  The  FIFR  for  the  year  was  0.20  per  million  hours worked (2008: 0.14) and the LTIFR 11.44 (2008: 11.44).  The mine embarked on a number of parallel safety initiatives in  2009,  including  “Goldsafe  days”;  team-based  processes;  mass  open-air  meetings;  monthly  miner,  artisan,  team leader  and  safety  representative  meetings;  and  the  ongoing  reinforcement  of  the  “It’s  OK  to  Stop”principle  to  all employees.  Mponeng was closed  twice after the issue  of Section 54 directives  by the DMR. In both cases, the mine was re-opened after three days following close consultation between management and the DMR.  Occupational health and  safety  assessments  for  OHSAS  18001  certification  were  conducted  in  January  and  July  2009,  with  Mponeng retaining accreditation on both occasions.Operating review: Mponeng’s gold production decreased from 600,000 ounces in 2008 to 520,000 ounces in 2009. A 14 percent decline in grade contributed to the lower output and resulted from the variability of VCR grade, changes to the mining mix and a 4 percent reduction in face length.


Total cash costs rose to $331 per ounces (2008: $248 per ounce) as a result of lower gold production and the impact of inflation  on  power,  labor,  support  and  stores.  In  addition,  Mponeng  utilized  excess  labor  from  Savuka  for  backlog equipping, following the seismic incident during May 2009. Total capital expenditure for the year totaled $109 million (2008: $86 million). Growth prospects: There are currently two growth projects under way at Mponeng.  Carbon  Leader  Reef  Project  below  120:This  project  involves  accessing  the  Carbon  Leader  Reef  (CLR)  about 900 meters below the VCR which is currently being mined. It will also access the VCR below the current infrastructure on levels 126 to 141.  Further work on this project is ongoing and was not presented for formal approval to the board in July 2009 as previously reported, as additional geological drilling was deemed necessary to reduce risk.  The estimated capital expenditure for this project has increased to R17 billion and production forecasts increased to around 14 million ounces of gold with the inclusion of the VCR area below 126 level into this project. The project is to be presented to the board for approval in November 2010 and if approved development could begin in June 2011.
  Ventersdorp Contact Reef (VCR) below 120 Project:Development is ahead of schedule and in line with the project plan.  Ongoing progress on this project resulted in Mponeng becoming the deepest mine in the world in January 2009. The estimated completion date for the project is 2013 with full production planned for 2015. The project is anticipated to recover 2.87Moz of gold at a cost of $250 million.
  SavukaDescription  Savuka  is  situated  on  the West Wits  line  in  the  province  of  Gauteng,  approximately  70km  southwest  of Johannesburg, and lies close to the town of Merafong in North West Province. This operation currently extracts both the Carbon  Leader  Reef  (CLR)  at  between  3,137 meters  and  3,457 meters  below  surface  and  the  Ventersdorp  Contact Reef (VCR) at 1,808m below surface.  The Savuka lease area is constrained to the north and northwest by DRDGOLD Limited’s Blyvooruitzicht Mine, to the east by TauTona, to the west by Harmony’s Elandsrand mine and to the south by Mponeng.Safety: There was one fatality during the year as a result of seismic activity (2008: 1). The FIFR increased year-on-year to  0.40 per million hours worked (2008: 0.33), while  there was an encouraging improvement in  the LTIFR to 7.62 per million  hours  worked  in  2009 (2008:  15.20).    Following  the fatal  accident,  the  mine  received  one  Section 54 directive which  was  lifted  three  days  later.    The  mine  continued  with  the  implementation  of  the  parallel  safety  initiatives  which commenced  in 2008, including “Goldsafe”days; team-based processes; mass open air meetings; and monthly  miner, artisan, team  leader and safety representative  meetings. Savuka also participated in the successful rollout of the “It’s OK to Stop”campaign. In addition, various internal safety audits were conducted to enable management to address and mitigate the risks identified in the process.  OHSAS 18001 assessments were conducted in January and July 2009, with Savuka retaining its certification on both occasions. Operating review:  Savuka’s operations for the year were severely hampered by a seismic event in May 2009 which resulted  in  production  being  suspended  for  the  remainder  of  the  year.  As  a  consequence,  gold  output  declined  to 30,000 ounces in 2009 from 66,000 ounces in 2008.
  Total  cash  costs  rose  to  $1,133 per  ounce  (2008: $424 per  ounce),  due  primarily  to  the  decrease  in  production  and repairs  to  damaged  underground  infrastructure.  An  insurance  claim,  which  includes  normal  business  interruption  and material  damage,  has  been  lodged  and  is  expected  to  be  processed  in  2010.  Savuka  produced  432 kilograms (14,000 ounces) during the first quarter of 2009, the last quarter of full production before the seismic event occurred. Capital expenditure increased to $13 million in 2009 (2008: $11 million)  Growth  prospects:  Once  access  to  the  CLR  horizon  has  been  re-established  in  the  second  quarter  of  2010, exploration and drilling programs will continue to determine the extent and accessibility of the extensive resource to the west of current mining activities and to identify potential mining prospects.


TauTona
 
 Description:TauTona  lies  on  the  West  Wits  line,  just  south  of  Merafong  in  North  West  Province  and  about 70 kilometers  southwest  of  Johannesburg.  Mining  at  TauTona  takes  place  at  depths  ranging  from  1,850 meters  to 3,450 meters. The mine has a three-shaft system and is in the process of converting from long wall mining to scattered grid mining. TauTona consists of a main shaft system supported by secondary and tertiary shafts.
 
 TauTona shares a processing plant with Savuka, which currently has a modularized monthly capacity of 180,000t. The plant uses conventional milling to crush the ore and a CIP plant to treat the ore. Once the carbon has been removed from the ore it is transported to the gold plant at Mponeng for elution electro-winning, smelting and the final recovery of the gold.
 
 Safety:  One fatality occurred at TauTona during the year (2008: 4), which was the result of a shaft accident. The FIFR per  million hours worked decreased to  0.10 from 0.35  in 2008,  while the LTIFR  per million  hours worked  improved  to 13.04  from  13.46  in  2008.  TauTona  has  implemented  measures  such  as  the  “5-TEEN”campaign  and  adopted  the Mining  Industry  Occupational  Safety  and  Health  (MOSH)  system  to  enhance  safety  performance  at  the  mine. Operationally, the mine upgraded infrastructure and changed from long wall mining to sequential grid mining to address safety  considerations.  The  mine  continued  with  the  implementation  of  the  parallel  safety  initiatives  begun  in  2008, including,  among  others,  the  ongoing  rollout  of  the  “It’s  OK  to  Stop”principle  to  all  employees,  the  “White  Flag  Day”drive,  the  “Laduma  for  Safety”campaign  and  wellness  days.  During  October,  management  completed  a  full  risk assessment of the entire shaft system and emergency escape routes to neighboring Mponeng and Savuka mines. All escape  routes  were  declared  safe  and  found  to  be  in  order.  Emergency  escape  and  refuge  bay  procedures  were updated.  TauTona has demonstrated continued improvements regarding OHSAS 18001 and maintained its certification following audits conducted in January and September 2009.  TauTona also achieved one year free of fatalities caused by falls of ground and was the winner of the AngloGold Ashanti fall-of-ground competition.
 
 Operating  performance:Production  at  TauTona  for  2009  was  affected  largely  by  closure  of  the  shaft  due  to  a  risk assessment of the entire shaft system and emergency escape routes in October 2009. This resulted in the cessation of production activities until January 2010 while underground infrastructure was inspected and repaired where necessary. As  a  consequence,  gold  production  declined  to  218,000 ounces  in  2009  compared  with  314,000 ounces  in  2008.  In addition,  the  decision  to  stop  mining  the  Carbon  Leader  Reef  shaft  pillar  before  its  scheduled  conclusion  and  the suspension of mining at two long walls, owing to the geological nature of the area, contributed further to the decline.
 
 Total cash costs increased to $532 per ounce in 2009 from $373 per ounce in 2008 as a result of reduced production and inflationary pressures on wages, power and consumable costs.
  
  
 Growth prospects:  CLR Below 120 level project:The project scope has been revised and now entails the 
 development of a single decline  to  123  level  to  access  250,000 ounces  of  gold.  If  approved  by  the  board  in  November  2010,
  development  will  commence in 2011, with first production in 2015.NAMIBIAAngloGold  Ashanti  has  one  mining  operation  in  Namibia,  Navachab,  which  produced  65,000 ounces  of  gold  in  2009, equivalent to 3 percent of the Southern Africa region’s production and 1 percent of group production. Description:  Navachab  Gold  Mine  is  situated  near  the  town  of  Karibib,  some  170km  northwest  of  the  capital Windhoek, and 171 kilometers inland on the southwest coast of Africa. Navachab, which began operations in 1989, is an  open-pit  mine  with  a  processing  plant  which  includes  mills,  carbon-in-pulp  and  electro-winning  facilities,  with  a monthly capacity of 120,000 tonnes. Geology:  The  Navachab  deposit  is  hosted  by  Damaran  greenschistam-phibolite  facies,  calc-silicates,  marbles  and volcanoclastics.  The  rocks  have  been  intruded  by  granites,  pegmatites  and  (quartz-porphyry  dykes)  aplite  and  have also  been  deformed  into  a  series  of  alternating  dome  and  basin  structures.  The  mineralized  zone  forms  a  sheet-like body  which  plunges  at  an  angle  of  approximately  20 degrees  to  the  north-west.  The  mineralization  is  predominantly hosted in a sheeted vein set (±60 percent) and a replacement skarn body (±40 percent). The gold is very fine-grained and  associated  with  pyrrhotite,  and  minor  to  trace  amounts  of  pyrite,  chalcopyrite,  maldonite  and  bismuthinite. Approximately 80 percent of the gold is free milling.


67
 
 
 Safety:  Navachab experienced its first fatal accident since the start of operations when a drill-rig operator  was fatally injured in a tramming accident on June 2, 2009. Contractor drilling operations were halted for a month to ensure all risk and  safety  aspects  of  the  operation  were  thoroughly  addressed.  As  a  result  of  the  review,  drilling  contractors  will  be required  to  use  only  rigs  with  enclosed  cabs  to  prevent  a  reoccurrence  of  this  incident.  Two  safety  interventions involving  the  entire  workforce  were  held  during  the  year  to  ensure  improved  performance.    The  FIFR  for  2009  was 0.67 per million hours worked (2008: 0) with an LTIFR for the year of 2.02 (2008: 0).  OHSAS 18001 assessments were conducted in July and December 2009, with Navachab retaining its certification on both occasions. Operating review: Gold production at Navachab declined from 68,000 ounces in 2008 to 65,000 ounces in 2009. The decline in production was a result of the 14 percent decrease in tonnes treated, caused by harder footwall material. Total cash costs rose to $677 ounce from $559 per ounce in 2008, as a result of higher labor, power costs and rising contractor fees. This was compounded by the decline in gold production. Capital expenditure for the year totaled $20 million (2008: $12 million). Growth prospects: Construction of the DMS plant remained on schedule and the training of operators was completed. Commissioning  of  the  plant  is  scheduled  for  the  first  quarter  of  2010,  and  will  result  in  improved  production  by increasing  grade.    Long-lead  items  for  the  filtration  plant  were  ordered  in  2009  and  construction  of  the  new  filtration plant will begin in 2010 to provide the second tailings storage facility (TSF) ahead of 2011, when the existing TSF is due to reach capacity. The filtration plant will ensure cost savings on detoxification chemicals and will allow for the additional recovery of water from the plant. The plant will also negate the inherent safety, health and environment risks associated with  a  TSF.    Optimization  work  on  the  western  pushback  continues  in  order  to  maintain  annual  gold  production  of between  100,000 ounces  to  120,000 ounces.  Evaluation  of  a  further  expansion  to  add  700,000 ounces  of  gold  to reserves is at the scoping stage. The exploration strategy has also been adjusted to optimize the sequence of mining.
 
 
 Operating and production data for Navachab
 
 
 
 
 
 
 
 
 
 
 
  
 
  
 
 
 
 
 
 
 
 
 
 
 2009
 2008
 2007
 
 Pay limit (oz/t)
  
 
  0.051
 0.04
 0.04
 
 Pay limit (g/t)
  
 
  1.55
 1.29
 1.22
 
 Recovered grade (oz/t)
  
 
  0.046
 0.042
 0.046
 
 Recovered grade (g/t)
  
 
  1.58
 1.43
 1.56
 
 Gold production (000 oz) 100  percent
  
 
  65
 68
 80
 
 Total cash costs ($/oz)
  
 
  677
 559
 475
 
 Total production costs ($/oz)
   
 
  723
 632
 525
 
 Capital expenditure ($ million) 100  percent
  
 
  20
 12
 6
 
 Employees
  
 
  578
 482
 409
 Outside contractors
   
 
  -
 -
 -
 
  
 
  
 
  Total cash costs and total production costs are non-GAAP measures.  For further information on these non-GAAP measures, see “Item 5A.: Operating results – Total cash costs and total production costs”.
 
 Average for the year.


CONTINENTAL AFRICA
 
 
 AngloGold Ashanti has seven mining operations in its Continental Africa region:        In addition, AngloGold Ashanti has had an active greenfields exploration programme in the Democratic Republic of the Congo  (DRC),  with  the  most  promising  prospects  being  the  Mongbwalu  concession  and  the  Kibali  joint  venture  with Randgold  Resources  and  the  DRC  government.  This  is  in  addition  to  the  brownfields  exploration  being  conducted  in and around its existing operations.Combined attributable  production  from these operations declined by 3 percent to 1.52 million  ounces of gold in 2009, equivalent to 33 percent of group production (2008: 1.56 million ounces). In all, they employed 14,689 people, including contractors, 473 less than in 2008. Total attributable capital expenditure for the region was $176 million, a decrease of 29 percent on the $248 million spent in 2008. The bulk of this was spent at the Ghanaian operations and at Obuasi in particular.
 OBUASI
  Sulfide
 Treatment Plant
 Tailings
 Treatment Plant
 Oxide Treatment
 Plant
 Iduapriem


IduapriemDescription:  The  Iduapriem  mine,  wholly  owned  by  AngloGold  Ashanti  since  September  2007,  comprises  the Iduapriem  and  Teberebie  properties.  The  Iduapriem  mine  is  situated  in  the  western  region  of  Ghana,  some 70 kilometers  north  of  the  coastal  city  of  Takoradi  and  10 kilometers  southwest  of  Tarkwa.  Iduapriem  is  an  open-pit mine and its processing facilities include a carbon-in-pulp (CIP) plant. Geology:    The  Iduapriem  and  Teberebie  gold  mines  are  located  along  the  southern  end  of  the  Tarkwa  basin.    The mineralization  is  contained  in  the  Banket  Series  of  rocks  within  the  Tarkwaian  System  of  Proterozoic  age.    The outcropping Banket Series of rocks in the mine area form prominent, arcuate ridges extending southwards from Tarkwa, westwards through Iduapriem and northwards towards Teberebie.  Safety:The LTIFR of 1.32 per million hours worked improved from the 1.63 reported in 2008. Iduapriem maintained its OHSAS 18001 certification after a successful surveillance audit in January 2009. Safety interventions initiated in 2009 included  additional  risk  assessment  training,  safety  leadership  training,  near-miss  reporting,  the  introduction  of management-led safety observation tours and the promotion of an interdependent safety culture.
  Operating  review:Gold  production  declined  to  190,000 ounce  in  2009  from  the  200,000 ounces  in  2008.  This  was mainly a result of downtime associated with the breakdown of the SAG2 mill, as well as flooding of the Block 7 and 8 pits, after excessive rainfall. This was countered by the commissioning of a new crusher plant at Teberebie, the addition of  a  second  ball  mill  and  a  new  thickener  which  contributed  positively  to  production.    The  grade  mined  declined  by 2 percent  as  flooding  in  the  pits  limited  access  to  certain  high-grade  areas.  Plant  recoveries  improved  by  2 percent, mainly  as  a  result  of  the  installation  of  a  multi-mix,  oxygen-injection  system  and  an  upgraded  oxygen  plant.    The expansion project to increase annual plant capacity to 4.3Mt was commissioned at the end of April 2009.
  Total cash costs increased from $625 per ounce in 2008 to $658 per ounce in 2009, despite decreases in power tariffs and the price of fuel. The benefits of these price declines were offset by an increase in mining contractor costs, which was a consequence of higher volumes of waste mined.
  Total capital expenditure for the year was $28 million (2008: $54 million).  Growth prospects:While the mine has limited growth prospects on surface, the recent surge in the gold price has led to renewed interest in evaluating the considerable low-grade mineralized material in the Tarkwaian conglomerates that extend below the economic limits of the existing pits. Work is currently under way to determine if there is an economic justification to support underground mining.Community  and  environment:Community  and  environmental  concerns  remain  priorities  at  Iduapriem,  especially regarding the relocation of villages and people. Maintenance of the existing tailings storage facility (TSF) is of particular concern.  The  failure of a section of a  retaining wall at  the existing  TSF has emphasized the importance of managing these concerns correctly and extensive engagement has taken place with the community on the matter. Operations at the Iduapriem mine have, from February 11, 2010, been temporarily suspended to allow for completion of discussions with  governmental  agencies  to  finalize  permitting  for  the  construction  of  a  new  tailings  facility  as  a  particular  priority, following  a  directive  from  the  Environmental  Protection  Agency  to  decommission  the  existing  TSF  in  early  2010. Iduapriem  maintained  its  ISO  14001  certification.  The  mine  applied  to  the  ICMI  for  temporary  withdrawal  from certification to the cyanide code due to a single instance of non-compliance related to the cyanide mixing and storage facility. A new cyanide storage facility  is planned for construction in 2010. A new application will be made to the ICMI during  the  middle  of  2010,  once  a  contractor  has  been  appointed  to  build  the  new  facility.  Iduapriem’s  alternative community livelihood program has been commended by local authorities.


Operating and production data for Iduapriem
 
  
 
 
  
   
 
  
   
   
   
 
 
 
  
 
 2009
 2008
 2007
 (4)
  
 
  
   
    
 
  
   
    
 
  (1)
   
    
 
  (1)
   
    
 
  
   
    
 
  (4)
   
    
 
  (2)
   
    
 
  (2)
   
    
 
  
   
    
 
  (4)
   
    
 
  (3)
   
    
 
  (3)
   
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (1)  
  Recovered grade represents open pit operations.
 
 
 
 
 
 
 
 
 
 
 
 (2)  
  Total cash costs and total production costs are non-GAAP measures.  For further information on these non-GAAP measures, see “Item 5A.:
 Operating results – Total cash costs and total production costs”.
 
 (3)  Average for the period.
 
 
 
 
 
 
 
 
 
 
 
 (4)  100 percent owned effective September 1, 2007.  Prior to this date, the effective holding was 85 percent.
 
 ObuasiDescription:  Obuasi,  wholly  owned  by  AngloGold  Ashanti,  is  located  in  the  Ashanti  region  of  southern  Ghana, approximately  60 kilometer  south  of  Kumasi.  It  is  primarily  an  underground  mine,  operating  at  depths  of  up  to 1,500 meters, though some  surface mining  does  occur. Historically,  three treatment plants have processed the ore: a sulphide  plant  treats  the  ore from  underground; a  tailings  plant  undertakes tailings  reclamation;  and an oxide  plant  is used to batch treat remnant open-pit ore and stockpiles.
  Geology: The gold deposits at Obuasi are part of a prominent gold belt of Proterozoic (Birimian) volcano-sedimentary and igneous formations which extend for a distance of approximately 300 kilometers in a north-east/south-west trend in south-western Ghana.  Obuasi  mineralization  is  shear-zone related  and there are  three  main  structural  trends  hosting gold mineralization: the Obuasi trend, the Gyabunsu trend and the Binsere trend.  Two main ore types are mined:    sulfides such as iron, zinc, lead and copper. The gold particles are generally fine-grained and occasionally are  visible to the naked eye. This ore type is generally non-refractory; and    in  these  ores  is  fine-grained  and  often  locked  in  arsenopyrite.    Higher  gold  grades  tend to  be  associated  with  finer grained arsenopyrite crystals. Other prominent minerals include quartz, chlorite and sericite. Sulfide ore is  generally refractory. Safety:There  was  one  fatality  during  the  year  (2008:  2)  caused  by  an  accident  involving  machinery.  The  FIFR improved  to  0.04  per  million  hours  worked  from  0.1  in  2008.  The  LTIFR  rose  to  2.91  per  million  hours  worked  from 2.10 in  2008.    Obuasi  has  drawn  up  a  strategy  to  improve  safety  performance  focused  on  four  interlinked  goals; processes that ensure accountability and drive performance; effective employee dialogue and engagement; improving health and safety systems; and a health and safety support function that fits the needs of the organization. This strategy will be implemented in 2010.


Operating  review:    Gold  production  improved  to  381,000 ounces  from  357,000 ounces  in  2008,  due  largely  to improved  grade  control  which  led  to  an  increase  in  head  grade  to  5.85g/t  from  5.65g/t.  This  was  complemented  by better  recoveries  resulting  from  the  turnaround  initiatives  implemented  in  the  plant.  The  increase  in  production  was achieved despite extensive flooding of the underground workings in July 2009 and the collapse of two main leach tanks at the oxide treatment plant earlier in the year. Ore Reserve development meters declined by 5 percent as a result of flooding underground and the poor availability of contractor equipment. This reduced mining flexibility in the latter part of the  year  affected  delivery  of  the  required  throughput  to  the  sulfide  treatment  plant.    Progress  was  made  with  the implementation  of  the turnaround  project  which  is  aimed  at  stabilizing  and  returning  the operation  to  profitability.  The number of mining areas was consolidated and the mine development contractor included in discussions on improving safety and efficiency and the introduction of mechanized development crews in selected areas. Mining  methods have been  changed  to  reduce  waste  and  increase  stope  length  and  minimize  capital  expenditure  over  the  life  of  the operation.    The  tailings/sulfide  treatment  plant  was  commissioned,  using  tailings  from  the  existing  plant.  This  has increased monthly flotation treatment capacity by 180,000t.
 
 
 Total cash costs remained steady at $630 per ounce (2008: $636 per ounce). The main contributor was the saving in power tariffs, which was partially offset by increases in labor costs and the once-off settlement of historical claims.
 
 
  
 
 Growth  prospects:The  TSP  flotation  plant  was  commissioned  towards  the  end  of  2009.  The  re-commissioning  of SAG2 to increase tonnes is planned for the end of July 2010.  Further, the Deeps development on level 50 for both the Kwesi Mensah and Brown Sub-Vertical Shaft and the exploration drilling on level 50 platform, were suspended because of  the  flooding  in  July  2009.  These  activities  are  to  be  resumed  in  the  early  part  of  the  fourth  quarter  of  2010.    The transformation  strategy  for  Obuasi  is  ongoing  with  the  objective  of  stabilizing  the  current  production  levels  and assessing  the growth potential between  2012 and 2020. This strategy includes increasing tonnage from underground and throughput of the South Treatment Plant.
 
 Community  and  environment:The  mine  successfully  completed  a  socio-economic  study  of  the  Obuasi  mining community with the assistance of a consortium of consultants. The aim of the study was to determine past and future impacts  on  the  community  in  order  to  improve  the  management  of  these  impacts  and  to  develop  better  community engagement  strategies.    The  company’s  highly  acclaimed  malaria  control  program,  which  has  led  to  a  74 percent reduction  in  the  incidence  of  malaria  within  the  environs  of  Obuasi,  received another  major  boost  with  the signing,  in December, of an agreement to provide funding of up to $130 million with a Swiss-based global fund to roll out a similar program  in  40  other  districts  within  Ghana.    The  company  also  successfully  maintained  its  ISO  14001  conformity assessment  certification following  a  comprehensive compliance  audit  conducted  in  December  2009. Obuasi  withdrew from the Cyanide Code owing to infrastructure  modifications needed  to meet Code  requirements.  The mine will rejoin the Code as soon as possible.  On March 30, 2010, AngloGold Ashanti suspended the operation of gold processing at Obuasi, pending the implementation of a revised water management strategy to reduce contaminants contained in its discharge.   Details of the strategy have been submitted to the EPA.
  Operating and production data for Obuasi
 
  
 
 
     
   
     
 
  
 
 2009
 2008
 2007
 
  (1)
   
      
   
      (1)
   
      
   
      
   
      (2)
   
      (2)
   
      
   
      (3)
   
      (3)
   
    
 
 
 
 
 
 
 
 
 
 
 (1)  Pay limits and recovered grade refer to underground ore resources.
 
 (2)  Total  cash  costs  and  total  production  costs  are  non-GAAP  measures.    For  further  information  on  these  non-GAAP  measures,  see  “Item  5A.:
 Operating results – Total cash costs and total production costs”.
 
 (3)  Average for the period.


GUINEA AngloGold Ashanti has one gold mining operation, Siguiri, in the Republic of Guinea.  SIGUIRI
  Description:  AngloGold  Ashanti  has  an  85 percent  interest  in  Siguiri,  with  the  government  of  Guinea  holding  a 15 percent stake. The Siguiri mine is a conventional open-pit operation situated in the Siguiri district in the northeast of the Republic of Guinea, West Africa, about 850 kilometer from the capital city of Conakry. All mining is undertaken by a contractor  and  the  ore  is  processed  using  a  carbon-in-pulp  (CIP)  process.  Siguiri  hosts  structurally  controlled mineralization within a deeply weathered saprolite profile.Geology:  This  concession  is  dominated  by  Proterozoic  Birimian  rocks  which  consist  of  turbidite  facies  sedimentary sequences.  The two main types of gold deposits which occur in the Siguiri basin and are mined are:
       The  mineralized  rocks  have  been  deeply  weathered  to  below  100 meters  in  places  to  form  saprolite  or  SAP mineralization.    With  the  percentage  of  available  CAP  ore  decreasing,  a  carbon-in-pulp  (CIP)  plant  is  used  to  treat predominantly SAP ore.Safety:There was one fatality at the mine during the year, as a result of a machinery accident. Safety remained a key priority at Siguiri during 2009 with an LTIFR of 0.47 per million hours worked being recorded (2008:0.42) and a FIFR of 0.16  (2008:  0).  Total  injuries  reflected  a  48 percent  improvement  year-on-year.  ‘Safety  is  our  First  Value’was  re-launched to focus the attention of workers on all matters related to their welfare. Production breaks were implemented across the entire operation to acknowledge all those injured. The safety flagging system introduced in 2008 continued to prove  useful  in  promoting  and  communicating  safety  information.  The  baseline  risk  assessment  was  revised  in accordance  with  OHSAS  18001  standards  during  the  year  and  an  OHSAS  surveillance  audit  is  scheduled  for  early 2010.Operating  review:    Attributable  gold  production declined  to  316,000 ounces  compared  to  the  record  333,000 ounces produced in 2008. The decline in output in 2009 was a consequence of the lower grade areas mined following depletion of  the high-grade Santchoro and Bidini pits during the  year. Production was  also affected by  the  loss  of nine  days  of operation following various stoppages during the year ordered by the Government of Guinea and certain issues raised by the community. The CIP plant maintained its excellent performance with the volumes treated by the mill increasing from 10.1 million tonnes in 2008 to 10.4 million tonnes in 2009. The reduced recovery rate resulted from the processing of transitional ore stockpiles, sourced from the bottom of the exhausted pits, which were of a higher grade but had lower recoveries.
  Total cash costs rose to $513 per ounce from $468 per ounce in 2008, due to higher labor and consumable costs. Attributable capital expenditure for the year totaled $22 million (2008: $18 million). Growth  prospects:Brownfield  exploration  targets  identified  outside  the  current  mining  blocks  will  be  drilled  during 2010 and 2011 to enable Siguiri to maintain current mining volumes and increase reserves. Drilling is also under way to target fresh ore below the bottom of most of the active pits and is scheduled for completion by the end of 2011, after which metallurgical testing and a feasibility study will be conducted to investigate ways of processing this hard, sulfidic ore. Should this study confirm the positive results of the plant expansion conceptual study completed in 2009, annual production throughput could increase by up to 3Mt, yielding a further 150,000 ounces (attributable) by 2013. Additional greenfields exploration in the outer blocks will continue in coming years and is expected to be completed by 2013.


Community  and  environment:Community  and  government  relations  were  more  challenging  in  2009  than  in  2008, following  the  change  in  the  country’s  leadership  in  December  2008.  Of  the  various  community  issues,  the  most significant was a two-day demonstration by residents of Siguiri town following electricity supply interruptions caused by a faulty circuit breaker.  The Government of Guinea placed a temporary embargo on the export of gold which, following submissions to the relevant authorities, was lifted at the end of June 2009, when normal shipments resumed. A month’s worth  of production was  shipped from the  country during the first week of  July alone. During the period  of the  export embargo, production at Siguiri continued uninterrupted.  At the end of June, the company agreed with the Government of Guinea on the nature and protocols of an environmental fund related to the mine’s existing $27 million provision for environmental  rehabilitation  of  the  Siguiri  mine.  The  company  agreed  to  an  advance  payment  of  $10 million  of  its existing  provision  after  receiving  an  undertaking  from  the  government  that  the  funds  be  used  solely  for  the environmental  rehabilitation  of  the  Siguiri  mine  and  that  the  payment  be  offset  against  the  balance  of  AngloGold Ashanti’s future environmental liabilities. Siguiri retained its ISO 14001 certification. The mine was audited against the Cyanide Code during 2009 and was awaiting notification of its certification status at the time of publication.
  Operating and production data for Siguiri
 
  
   
     
 
  
 
 2009
 2008
 2007
 
  
   
      
   
      (1)
   
      (1)
   
      
   
      
   
      (2)
   
      (2)
   
      
   
      
   
      (3)
   
      (3)
   
      
   
     (1)  Recovered grade represents open pit operations.
 
 
 
 
 
 
 
 
 (2)  Total  cash  costs  and  total  production  costs  are  non-GAAP  measures.    For  further  information  on  these  non-GAAP  measures,  see  “Item  5A.:
 Operating results – Total cash costs and total production costs”.
 
 (3)  Average for the period.
 
 
 
 
 
 
 
 
 MALIAngloGold Ashanti has interests in three gold mining operations in Mali, namely, Sadiola, Yatela and Morila. It manages two of these operations, Sadiola and Yatela.Morila (attributable 40 percent) Description:The Morila mine is situated some  180 kilometer southeast of Bamako, the capital of Mali. Mining of the single open pit was completed in April 2009. The operation is currently treating low-grade stockpiles and will continue to do so until 2013. The plant at Morila, which incorporates a conventional carbon-in-leach (CIL) process with an upfront gravity section to extract the free gold, has throughput capacity of 4.2Mtpa which has been enhanced to 4.3 Mtpa. The Morila  mine  is  80 percent  owned  by  Morila  Limited,  a  joint  venture  in  which  AngloGold  Ashanti  and  Randgold Resources Limited each have a 50 percent stake giving AngloGold Ashanti an effective stake of 40 percent in Morila. The Government of Mali owns the remaining 20 percent. Randgold Resources manages the Morila mine. Geology:   Morila  is  a  mesothermal flat lying shear-zone hosted  deposit which, apart from rising to the surface in the west  against  steep  faulting,  lies  flat.  The  deposit  occurs  within  a  sequence  Birimian  metal-arkoses  of  amphibolite metamorphic  grade.  Mineralization  is  characterized  by  silica-feldspar  alteration  and  sulfide  mineralization  consists  of arsenopyrite, pyrrhotite, pyrite and chalcopyrite.  Safety:  The safety statistics are reported by Randgold Resources, the operators of the mine.


Operating review:  Gold production in 2009 declined to 137,000 attributable ounces from 170,000 attributable ounces in  2008,  due  mainly  to  an 81 percent drop  in  volumes  mined following  depletion  of  the  open-pit  resource  during  April and the subsequent treatment of low-grade stockpiles.   Total cash costs increased by from $424 per ounce in 2008 to $526 per ounce, due to the lower level of gold production and  significant  increases  in  reagent  costs  and  metallurgical  stores.  Overheads  at  Morila  reduced  by  20 percent. Employee  numbers  at  the  operation  declined  because  of  the  cessation  of  mining  and  the  replacement  of  the  mining contractor  with  a  stockpile  re-handling  contractor.  To  ameliorate  the  impact  of  the  job  losses  at  the  mine,  Morila collaborated with a micro-finance company to develop and implement a program to provide capital for those affected by the reduction of the workforce.
  Morila  invested  $10 million  ($4 million  attributable)  of  stay-in-business  capital  in  2009  (2008: $3 million  or  $1 million attributable).Growth prospects:From 2010 to the end of the mine’s life, Morila will continue to treat only low-grade ore. Attributable production is expected therefore to decrease.Community  and  environment:No  significant  environmental  incidents  were  reported  during  the  year.  The  mine  was recertified to ISO 14001 during the year.  The bridge over the Bama Koni River, which serves as the main passageway for  all  communities  between  Koumantou  and  Sanso,  was  renovated  by  the  Morila  joint  venture  during  the  year.  In recognition of this project, the Minister of Mines and the Minister of Infrastructure presided over its opening. Anti-malaria spraying  of  the  mine  camp  and  surrounding  villages continued  during  the  year  as  part  of the  ongoing  malaria  control program.
  Operating and production data for Morila
 
  
 
 
    
 
  
 
 
    
 
  
 
 2009
 2008
 2007
 
  
   
      
   
      
   
      
   
      
   
      
   
      (1)
   
      (1)
   
      
   
      
   
      (2)
   
      (2)
   
    
 
 
 
 
 
 
 
 
 
 
 (1)  Total  cash  costs  and  total  production  costs  are  non-GAAP  measures.    For  further  information  on  these  non-GAAP  measures,  see  “Item  5A.:
 Operating results – Total cash costs and total production costs”.
 
 (2)  Average for the year.
 
 
 
 
 
 
 
 
 Sadiola (attributable 38 percent and effective December 29, 2009 41 percent) Description:  Sadiola  is  located  in  the  far  southwest  of  the  country  of  Mali,  77 kilometer  to  the  south  of  the  regional capital, Kayes. Sadiola is  a  joint venture operation in which, just prior to year-end, AngloGold  Ashanti and IAMGOLD each  had  a  38 percent  interest,  the  Government  of  Mali,  18 percent,  and  the  International  Finance  Corporation, 6 percent.  On  December 29,  2009,  AngloGold  Ashanti  and  IAMGOLD  purchased  the  6 percent  stake  held  by  the International  Finance  Corporation,  increasing  their  respective  stakes  in  Sadiola  to  41 percent  each.  However, AngloGold Ashanti’s effective stake in Sadiola for the 2009 financial year was 38 percent. Mining at Sadiola takes place in  five  open  pits  and  the  ore  mined  is  treated  and  processed  in  a  carbon-in-pulp  (CIP)  gold  plant  with  a  monthly processing capacity of 363,000t.


Geology: The Sadiola deposit occurs within an inlier of greenschist facies metamorphosed Birimian rocks known as the Kenieba  Window.  The  specific  rocks  which  host  the  mineralization  are  marbles  and  greywackes  which  have  been intensely  weathered  to  a  maximum  depth  of  200 meters.  A  series  of  north-south  trending  faults  occur  that  are  the feeders to the Sadiola mineralization. As a result of an east-west regional compression event, deformation occurs along a  north-south  striking  marble-greywacke  contact,  increasing  the  porosity  of  this  zone.  North-east  striking  structures which intersect the north-south contact have introduced mineralization, mainly with the marble where the porosity was greatest.  The  Sadiola  Hill  deposit  generally  consists  of  two  zones,  an  upper  oxidized  cap  and  an  underlying  sulfide zone.  From  1996 until  2002,  shallow  saprolite  oxide  ore  from  the  Sadiola  Hill  pit  was  the  primary  ore  source. Since 2002, the deeper saprolitic sulfide ore has been mined and in future will progressively replace the depleting oxide reserves.
 
 Safety:There was an improvement in the safety performance at Sadiola in 2009. There were no fatalities and just one lost-time  injury,  giving  a  much  improved  LTIFR  for  the  year  of  0.21  per  million  hours  worked  (2008:  0.87).  Sadiola received  its  OHSAS  18001:2007  certification  in  June  2009.  The  safety  non-conformities  reporting  system  was  fully implemented and there was a reduction in the number of serious accidents involving vehicles and heavy machinery.
  
 Operating review:Attributable production decreased from 172,000 ounces in 2008 to 135,000 ounces in 2009 mainly as a result of a decline in the head grade. The decrease in grade was a result of the depletion of the Sadiola main pit reserves and  a shift in mining to the lower grade satellite  pits. Grade is  expected to continue to  decline in 2010 after which it will stabilize. The gravity circuit in the process plant added value to the recovery of difficult high-grade sulfide ore and was also used to treat oxide material. Recoveries of oxide ores improved markedly with soft oxide recoveries reaching 95 percent compared to 93 percent previously. Plans are in place to implement a second gravity circuit in early 2010. Employee numbers increased after recruitment by  the exploration and analytical services department, following implementation of an aggressive exploration campaign.
 
 Total cash costs rose from $401 per ounce in 2008 to $489 per ounce in 2009, owing mainly to a decline in production because of the lower grade feed supplied to the process plant and increased mining volumes.
 
 Total  capital  expenditure  for  the  year  was  $10 million  or  $4 million  attributable  (2008: $8 million  or  $3 million attributable).
 
 Growth  prospects:Sadiola’s  future  growth  is  dependent  on  the  success  of  the  deep  sulfide  project,  for  which  a feasibility study  is currently being undertaken. The decision to proceed from  pre-feasibility to  the feasibility stage  was approved by the board in October 2009 with the feasibility study scheduled for completion by October 2010. This project could  potentially  add  2.9M ounces  to  Sadiola’s  current  life-of-mine  production  profile,  of  which  1.19 million  ounces would be attributable.
 
 Community  and  environment:During  2009,  there  were  no  significant  environmental  or  community  related  issues. Furthermore, the surrounding communities in the adjacent villages expressed their acknowledgement of the contribution made by Sadiola and neighboring mines during the official ceremonies held by the regional and local authorities at the opening of the water dams which had been financed by Sadiola and Yatela through the Integrated Development Action Plan  (IDAP).  Sadiola  retained  its  ISO  14001  certification.  It  was  certified  in  significant  compliance  with  the  Cyanide Code.
 
  Operating and production data for Sadiola
 
   
 
  
 
 
    
 
  
 
 2009
 2008
 2007
 
  
   
      
   
      
   
      
   
      
   
      
   
      (1)
   
      (1)
   
      
   
      
   
      (2)
   
      (2)
   
      
   
   (1)  Total  cash  costs  and  total  production  costs  are  non-GAAP  measures.    For  further  information  on  these  non-GAAP  measures,  see  “Item  5A.:
 Operating results – Total cash costs and total production costs”.
 (2)  Average for the year


Yatela (attributable 40 percent) Description:  The  Yatela  mine  is  situated  some  25 kilometer  north  of  Sadiola  and  approximately  50 kilometer  south-southwest of Kayes. Ore extraction is conducted from the Yatela main pit as well as from a satellite pit at Alamoutala. The ore mined is treated by a heap-leach process  and  the carbon loaded on site. The carbon is  then eluted and the gold  smelted  at  nearby  Sadiola.    Yatela  is  80 percent  owned  by  the  Sadiola  Exploration  Company  Limited,  a  joint venture in which AngloGold Ashanti and IAMGOLD each have an interest of 50 percent, giving AngloGold Ashanti an effective stake of 40 percent in Yatela. The Government of Mali owns the remaining 20 percent stake in the mine. Geology:  Yatela mineralization occurs as a keel-shaped body in Birimian metacarbonates.  The ‘keel’ is centered on a fault  which  was  the  feeder  for  the  original  mesothermal  mineralization,  with  an  associated  weakly  mineralized  diorite intrusion. Mineralization occurs as a layer along the sides and in the bottom of the ‘keel’.  The ore dips almost vertically on the west limb and more gently towards the west on the east limb, with tight closure to the south.  Safety:Yatela had an exceptional year in terms of safety performance and recorded zero fatalities and zero lost-time injuries which resulted in an LTIFR of 0 per million hours worked for the year (2008: 1.15). This achievement was mainly due to a combined team effort from the whole workforce focusing on the basic safety as well as the full implementation and adherence to the safety system.  OHSAS 18001:2007 certification was achieved in June 2009. Operating review:  Attributable gold production in 2009 rose to 89,000 ounces from 66,000 ounces in 2008, due mainly to a marked increase in the head grade of stacked ore. The high-grade ore came from the targeted areas at the bottom of push-back 7. This phase of the mine will be fully depleted early in 2010.
  Total cash costs declined by from $621 per ounce in 2008 to $326 per ounce in 2009, a result of the significant rise in gold  production  and  improved  grades,  lower  fuel  prices  and  a  decrease  in  mining  contractor  costs  resulting  from  the renegotiation of the contract and the appointment of a new contractor as from July 2008. Total capital expenditure of $3 million ($1 million attributable) in 2009 (2008: $8 million or $3 million attributable). Growth prospects:An extensive exploration program was undertaken during 2009 to investigate ways to extend the life of the mine. Early indications are that additional reserves have been found at both Alamoutala and Yatela which will enable the continuation of the mining operation.Community  and  environment:There  were  no  significant  environmental  or  community  issues.  Furthermore,  the surrounding  communities  of  the  Sekotoko,  Kourouketo  and  Alamoutala  villages  expressed  their  acknowledgement  of the  contribution  made  by  the  Sadiola  and  Yatela  mines  during  the  official  ceremonies  held  by  the  regional  and  local authorities  at  the  opening  of  the  water  dams  which  had  been  financed  by  both  operations  through  the  Integrated Development  Action  Plan  (IDAP).    Yatela  obtained  full  ICMI  accreditation  in  terms  of  the  international  cyanide management code in August 2009 and retained its ISO 14001 accreditation in November 2009.
  Operating and production data for Yatela
 
  
 
 
     
   
     
 
  
 
 2009
 2008
 2007
 
  
   
      
   
      
   
      
   
      
   
      
   
      (1)
   
      (1)
   
      
   
      
   
      (2)
   
      (2)
   
      
   
     (1)  Total cash costs and total production costs are non-GAAP measures.  For further information on these non-GAAP measures, see “Item 5A.:
 Operating results – Total cash costs and total production costs”.
 
 (2)  Average for the year.


TANZANIA AngloGold Ashanti has one gold mining operation in Tanzania, the Geita gold mine.Geita
  Description:The Geita gold mine is  located in  the Lake Victoria  goldfields of the Mwanza region of Tanzania, about 120 kilometer from Mwanza and 4 kilometer west of Geita Town. The mine is wholly owned and managed by AngloGold Ashanti.  The Geita gold deposit is an Archaean mesothermal orebody, largely hosted in a banded ironstone formation. It is a multiple open-pit operation with underground potential and is currently serviced by a 5.2Mt per annum carbon-in-leach (CIL) processing plant.Geology:    Geita  is  an  Archaean  mesothermal  mainly  BIF-hosted  deposit.  Mineralization  is  located  where  auriferous fluids,  which  are  interpreted  to  have  moved  along  shears  often  on  BIF-diorite  contacts,  reacted  with  the  BIF.    Some lower-grade mineralization can occur in the diorite as well (usually  in association with BIF-hosted  mineralization), and approximately 20 percent of the gold is hosted in the diorite.Safety:Safety performance improved at Geita during 2009 with no fatalities being recorded during the year. The LTIFR for 2009 was 0.10 (2008: 0.86) per million hours worked, significantly better than the previous year.  A high degree of focus  was  maintained  on  safety  with  specific  emphasis  on  hazard  identification  and  reporting.  Further,  a  motivation scheme was launched which led to a significant decrease in accidents and damage.  Geita also maintained its OHSAS 18001 certification.Operating  review:Production  at  Geita  increased  to  272,000  ounces  of  gold  in  2009  from  264,000 ounces  in  2008. Significant  quarterly  improvements  were  achieved  during  the  course  of  the  year  with  gold  production  rising  from 44,000 ounces in the first quarter, when output was hampered by a mill breakdown and a general maintenance backlog, to  81,000 ounces  in  the  fourth  quarter  of  the  year.  Improved  mining  performance  yielded  access  to  higher-grade orebodies in the second half of the year, resulting in an average annual yield of 1.89g/t.  Process-plant throughput was still very low at the beginning of the year as a result of the failure in January 2009 of the SAG mill gearbox, together with several  other  breakdowns  in  the  plant.  A  focus  on  asset  integrity  and  the  overarching  maintenance  strategy  led  to improved  plant  availability  during  the  year.  While  Geita  continued  with  owner  mining,  Ausdrill  Tanzania  Limited  was awarded the drilling-and-blasting contract from July 2009 in order to improve productivity and quality.
  A  year-on-year  increase  in  total  cash  costs  from  $814 per  ounce  in  2008  to  $985 per  ounce  in  2009  was  a  result  of increases in the cost of key inputs, including that of reagents and mining contractors, as well as unfavorable movements in ore stock piles. These increases were partially offset by a decline in fuel costs.  Various turnaround initiatives were implemented at Geita which included the overarching Project ONE, as well as the Business Process Framework (BPF) and  Systems  for  People  (SP).  The  focus  on  good  operating  practice  and  systems  has  resulted  in  enhancements  to mining,  geological  modeling  and  processing  productivity  and  efficiency.  The  improvements  in  mining  productivity together with a review of the mining plan have led to a planned rationalization and reduction in the fleet which will be implemented throughout 2010. Growth prospects:Exploration drilling activities during 2009 focused on increasing confidence in the geology of the current operating pits.  Infill drilling occurred at Star  and Comet (Cut 2), Nyankanga (Cuts 5, 6, and 7), and Geita Hill. The  Star  and  Comet  grade  model  was  updated  in  June  2009  with  the  new  information  adding  approximately 70,000 ounces.  The  Nyankanga  resource  model  was  updated  in  September  2009  and  confirmed  the  current  grade estimates. Another update of the Nyankanga grade model is scheduled for the first quarter of 2010 and will incorporate the  remaining  Cut  7  infill  information,  the  Geita  Hill  grade  model  will  also  be  updated.    In  addition  to  the  above,  an airborne geophysics survey was undertaken in the existing areas covered by Geita’s licences and adjacent prospecting rights. A total of 41 targets were delineated. The top 10 priority aero-TEM targets were surveyed using the ground EM (Max-Min) method. The results of this initiative are pending. Community  and  environment:No  major  environmental  incidents  occurred  and  Geita  maintained  its  ISO  14001 certification.  Geita  was  temporarily  withdrawn  from  the  Cyanide  Code owing  to  infrastructure  modifications needed  to meet Code requirements. Geita will rejoin the Code as soon as possible. Close dialogue was maintained with the local Geita community and areas of concern were addressed. The resolution of land compensation matters is progressing.


Operating and production data for Geita
 
   
      
 
 
      
  2009
 2008
 2007
 
  
       
       
       
       
       (1)
       (1)
       
       (2)
       (2)
       
   
    
 (1)  Total cash costs and total production costs are non-GAAP measures.  For further information on these non-GAAP measures, see “Item
 5A.: Operating results – Total cash costs and total production costs”.
 
 (2)  Average for the year.
 
 
 
 
 
 
 
 
 AUSTRALASIA
 
  AngloGold Ashanti’s sole operating asset in Australasia is Sunrise Dam.The  group  also  has  an  extensive  exploration  program  underway  in  Australasia,  the  most  advanced  of  which  is Tropicana,  a  joint  venture  in  which  AngloGold  Ashanti  holds  70 percent  and  the  Independence  Group  NL  has


30 percent.  Tropicana  is  managed  by  AngloGold  Ashanti  and  covers  13,500 square kilometers  of  tenements.  This project is the focus of the group’s exploration activities in Australasia.  Exploration  in  the  Australasia  region  is  also  currently  being  conducted  in  the  Philippines  and  the  Solomon  Islands. Further information on the progress being made here is presented in the Exploration review of this report. In January 2009, AngloGold Ashanti agreed to sell its 33.33 percent interest in the Boddington project in Australia to its joint venture partner, Newmont Mining Corporation. This project is therefore not covered in this report.  The Australasian operation produced 401,000 ounces of gold in 2009, equivalent to 9 percent of total group production.AUSTRALIA
  SUNRISE DAM
  Description:The  Sunrise  Dam  gold  mine  is  located  in  the  northern  goldfields  of  Western  Australia,  220 kilometer northeast  of  Kalgoorlie  and  55 kilometer  south  of  Laverton.  The  mine  consists  of a  large  open  pit  which  is  now  in  its thirteenth  year  of  operation,  and  an  underground  mine  which  began  operations  in  2004. Mining  at  both  operations  is conducted by contractors  and  the ore mined is treated in a conventional gravity and carbon-in-leach (CIL) processing plant which is owner-managed.Geology:  Gold  ore  at  Sunrise  Dam  is  structurally  and  lithologically  controlled  within  gently  dipping  high  strain  shear zones  (for  example,  Sunrise  Shear)  and  steeply  dipping  brittleductile  low  strain  shear  zones  (for  example,  Western Shear). Host rocks include andesitic volcanic rocks, volcanogenic sediments and magnetic shales.  Safety:Safety  performance  at  Sunrise  Dam  continued  to  improve  during  2009  with  an  LTIFR  for  2009  of  1.19  per million hours worked (2008: 1.83).  Safety leadership training has been the main strategy for both the exploration group and Sunrise Dam over the course of 2009.  In addition other strategies being developed are: risk management; values-based  safety  leadership;  role  clarity  and  personal  accountability;  open,  transparent  and  learning  safety  culture  and safety systems.
  Sunrise  Dam  is  compliant  with  OHSAS  18001.  The  mine  won  the  2009  Chamber  of  Minerals  and  Energy  Surface Emergency Response competition as well as receiving a number of awards in the Underground Emergency Response competition later in the year.Operating  review:Production  for  2009  decreased  from  433,000 ounces  in  2008,  to  401,000 ounces  in  2009.  The decline reflects the lower average annual grade of ore processed given that the high-grade Mega pit was completed in 2008.  Following the cessation of operations at the Mega Pit, open pit mining continued in the North Wall Cutback as planned. The ore was sourced from a combination of underground and open pit operations with the use of lower grade stockpiles  to  supplement  the  ore  feed  to  the  plant.  Plant  productivity  initiatives,  which  resulted  in  an  increase  in processing throughput from 3.8Mt to 3.9Mt, helped partially offset the decline in grades. Underground  tonnage  expanded  at  a  greater  than  anticipated  rate,  increasing  by  15 percent,  or  103,000 tonnes,  to 781,000 tonnes. Mill feed from underground ore yielded approximately 111,000 ounces, contributing 28 percent to total mine production compared with 17 percent, or 73,000 ounces, the previous year.  The conversion of the mine's diesel power station to liquified natural gas (LNG) was completed in the first quarter of 2009, enabling Sunrise Dam to benefit for a large part of the year from reduced power costs. Total cash costs increased to $631 per ounce in 2009 from $559 per ounce in 2008. This rise was broadly in line with expectations and primarily as a result of the lower production base and the cash costs associated with inventory draw down and costs.
  Capital expenditure for the year amounted to $31 million compared to $19 million in 2008. Growth  prospects:The  North  Wall  Cutback  will  continue  to  supply  ore  to  the  plant  until  mid-2011.  Ore  from  the cutback will be blended with stockpiled ore and ore from the underground mine.  Production from the underground mine is expected to continue to increase and as a result a paste fill plant has been constructed to enable larger stopes to be extracted. In addition, continued exploration and advances in geological understanding have resulted in further growth in underground Ore Reserves which increased to 1.2 million ounces (after depletion).  The mine’s total Ore Reserve at year-end was 1.73 million ounces.


Community  and  environment:Sunrise  Dam  continues  to  support  the  Laverton  community  through  its  involvement with the Laverton Mining Liaison Committee and Shire Council, representation on the Laverton Leonora Cross Cultural Association (LLCCA) and the Mt Margaret Mission and Laverton School lunch programs. In support of the development of  local  indigenous  business,  Sunrise  Dam  committed  to  a  new  contract  during  the  year  with  Carey  Mining,  an indigenous-owned  mining  contractor.    Sunrise  Dam  continues  to  maintain  its  certification  to  ISO  14001  and  the International Cyanide Code. A mine closure plan is currently in place and waste dumps and paddock tailings dams are progressively rehabilitated in line with this plan.
    Operating and production data for Sunrise Dam
 
  
 
 
     
   
     
 
  
 
 2009
 2008
 2007
 
  
   
      
   
      (2)
   
      (2)
   
      
   
      (1)
   
      (1)
   
      
   
      (3)
   
      (3)
   
      
   
    
 (1)  Total  cash  costs  and  total  production  costs  are  non-GAAP  measures.    For  further  information  on  these  non-GAAP  measures,  see  “Item  5A.:
 Operating results – Total cash costs and total production costs”.
 
 (2)  Open-pit operations.
 
 
 
 
 
 
 
 
 (3)  Average for the year.
 
 
 
 
 
 
 
 
 Tropicana
 
 Description:The Tropicana joint venture comprises more than 13,500 square kilometers of tenements stretched along more than 300 kilometers of the ancient collision zone between the Yilgarn Craton and the Albany Fraser Province in Western  Australia.  The  Tropicana  Gold  Project  is  located  330  kilometers  east-north-east  of  Kalgoorlie  within  the northern part of the joint venture area. AngloGold Ashanti holds a 70 percent interest in the Tropicana joint venture and Independence Group NL holds a 30 percent interest.
 
 Geology:      The  Tropicana  deposit  comprises  two  known  mineralized  zones,  the  Tropicana  zone  to  the  north  and Havana  zone  to  the  south.    Together  the  known  mineralized  zones  define  a  system  that  extends  over  a  4 kilometer strike length. The lenses have been tested to a vertical depth of 350 meters to 400 meters, and are open down dip.  The Tropicana  and  Havana  zones  are  grossly  “stratiform”  within  the  preferred  gneissic  host  sequence.    Havana  zone consists of multiple stacked lenses, whereas Tropicana comprises one main mineralized lens.
 
 Operating review and  growth prospects: The pre-feasibility  study for the Tropicana Gold Project was  completed  in July 2009 with the joint venture partners approving the start of a feasibility study which is scheduled for completion by September  2010.    This  study  considered  a  wide  range  of  project  options  and  defined  a  preferred  project  with  the following specifications:
 
  Open  pit  mining  of  the  Tropicana  and  Havana  deposits  via  a  conventional  drill-and-blast,  truck-and-excavator operation;
  Ore processing at a rate of 5.5Mt to 6Mt a year, based on a comminution circuit comprising two-stage crushing, high pressure grinding rolls and ball milling, along with a conventional CIL circuit;
  Development of considerable supporting infrastructure, including construction of 220 kilometer of new roads as well as power infrastructure and communications capacity; and
   
 The  key  development  issues  to  be  addressed  in  the  feasibility  study  are  owner  versus  contract  mining,  and  diesel versus  gas  power,  using  a  third  party  power  purchase  agreement.  The  feasibility  study  will  also  focus  on  mine  and resource development options to optimize project economics.


The Environmental Impact Assessment was issued for an eight-week Public Environmental Review in September 2009. Issues  raised  through  submissions  received  from  government  agencies  and  interested  stakeholders  were  being addressed  by  the  Tropicana  joint  venture  late  in  2009.  It  is  anticipated  that  the  Public  Environmental  Review  will  be completed  by  mid-2010  and  this,  in  addition  to  other  approvals  required,  will  enable  the  commencement  of  project development  in  the  second  half  of  2010.    If  approved,  development  would  take  about  two  years  and  commissioning would  begin  in  2013.    There  is  potential  to  increase  mine  life  through  additional  drilling  in  the  lease  area  and  other nearby prospects.  Drilling down-dip indicates that mineralization extends deeper than 800 meters below the open pit. Further  drilling  and  conceptual  level  studies  are  required  to  evaluate  the  deeper  underground  mine  development potential.
 
 NORTH AMERICA AngloGold Ashanti has one mining operation in North America, Cripple Creek & Victor (CC&V) in the state of Colorado in the United States. In 2009, CC&V produced equivalent to 5 percent of group production. UNITED STATES OF AMERCIACripple Creek & Victor Gold Mining Company (CC&V) is AngloGold Ashanti's sole active operation in the United States.Cripple Creek & Victor Description: Located  in  the  State  of  Colorado  in  the  United  States,  CC&V's  Cresson  mine  is  an  open-pit  operation  which
  treats extracted  ore  on  one  of  the  largest  heap-leach  pads  in  the  world.  Production  at  this  operation  began  in  1994.  AngloGold Ashanti holds a 100 percent interest in CC&V, following the successful acquisition, effective July 1, 2008, of a 33 percent stake from Golden Cycle Gold Corporation.   In  2009,  construction  began  on  the  mine-life  extension  (MLE)  project  that  will  provide  four  additional  years  of  mine production to the heap-leach pad. Total expenditure associated with this project is expected to be $204 million.


Geology:  The  district  of  Cripple  Creek  is  centered  on  an  intensely  altered  alkaline,  Tertiary-aged,  diatreme-volcanic, intrusive  complex,  approximately  circular  in  shape  covering  18.4  square  kilometers  and  surrounded  by  Precambrian rocks.  The Precambrian rocks consist of biotite gneiss, granodiorite and quartz monzonite and granite.  The intersection of these four units and regional tectonic events formed an area of regional dilation which subsequently facilitated  the  formation  of  the  volcanic  complex.    The  majority  of  the  complex  then  in-filled  with  the  eruptive  phase Cripple Creek Breccia host rock.  This complex was subsequently intruded by a series of intrusive dykes and sills that include  syenites,  phonolites,  phonotephrites  and  lamprophyres.    These  intrusives  occupy  all  of  the  dominant  district structural orientations.   District structures are  generally near vertical and strike north-north-west to  north-east.   These structures acted as primary conduits for the late-stage gold mineralizing solutions.  Higher grade pods of mineralization occur  at  structural  intersections  and/or  as  sheeted  veins  along  zones  of  strike  deflection.    High-grade  gold mineralization is associated with K-feldspar + pyrite +/- carbonate alteration and occurs adjacent to the major structural and  intrusive  dyke  zones.    The  broader  zones  of  disseminated  mineralization  occur  primarily  as  micro-fracture  halos around the stronger alteration zones in the more permeable Cripple Creek Breccia wall rocks.  The  average  depth  of  oxidation  is  120 meters  and  is  also  developed  along  major  structural  zones  to  even  greater depths.  Individual orebodies can be tabular, pipe-like, irregular or massive. Individual gold particles are generally less than 20 microns in size and occur as native gold with pyrite or native gold after gold-silver tellurides. Gold occurs within hydrous  iron  and  manganese  oxides  and  as  gold-silver  tellurides.    Silver  is  present  but  is  economically  unimportant.  Gold mineralization can be encapsulated by iron and manganese oxides, pyrite, K-feldspar alteration and quartz.  Safety:CC&V  continued  to  report an excellent  safety  performance.  The  LTIFR for  2009  declined to  4.39  per  million hours worked (2008: 4.83). CC&V has maintained a fatality-free record since it was acquired by AngloGold Ashanti in 1998.    Various  safety  programs  have  been  implemented  on  the  mine,  such  as:  The  DuPont  Safety  Training  (STOP) program  instituted  in  2003;  the  risk-based  safety  management  system  in  2005;  an  extension  of  the  STOP  program; Train the Trainers in 2007; the SAFEmap International competency-based safety training (CBS) program in 2008-2009; and  the  Safety  Transformation  Program  in  2009.  The  programs  have  been  implemented  to  ensure  continued improvement in safety performance at CC&V. Project ONE was rolled out in 2009. More positive results are expected over the two-year implementation process.Operating review: In 2009, gold production at CC&V fell to 218,000 ounces, from 258,000 ounces produced in 2008. A total of 18.7Mt (2008: 22.1Mt) of ore was placed on the heap-leach pad. The anticipated decline in production was a result of lower ore tonnes and grades mined and the slower percolation of gold bearing solution through the leach pad. This was partially due to the greater distance over which the solution had to flow from the higher stacked ore to the leach-pad lining and was compounded by a lack of higher alkalinity in deeper parts of the pad. The latter issue, identified during the 2008 pad drilling program, results in dissolved gold precipitating from  the  pregnant  solution  at  depth.  An  initiative  to  raise  alkalinity  by  adding  additional  lime  to  the  pad  began  in  the second  half  of  2008  and  continued  through  2009.  The  recovery  of  the  precipitated  gold  is  expected  to  continue  for several years, given the size of the pad.
  Total  cash  costs  increased  to  $371 per  ounce  (2008:  $310 per  ounce),  driven  mainly  by  lower  gold  production, additional fuel, lime, cyanide, blasting agents and power consumption, more maintenance and certified rebuilds, as well as the adjustment for the lower recoverable heap leach inventory ounces.   Capital expenditure for the year was $87 million (2008: $27 million), mainly for the MLE project and related extensions to the heap-leach facility and mining fleet.Growth prospects:In 2008, CC&V was granted permits from the State of Colorado and Teller County for a mine-life extension that includes the development of new sources of ore and an extension to the heap-leach facility. The permits extend the operation of the expanded valley leach facility and the rinsing of the pad to ensure water quality is compliant with all applicable standards.  Development drilling continues to define areas of interest for which engineering analysis and permitting requirements are being evaluated for a second mine-life extension project (MLE 2).


Community  and  environment:CC&V  was  recognized  by  the  Center  for  Non-Profit  Excellence  at  the  10th  annual Partners in Philanthropy Awards as the Outstanding Corporate Philanthropic Program. The awards are given to honor local  organizations  and  individuals  for  their  extraordinary  philanthropic  contributions.  The  Court  Appointed  Special Advocates honored CC&V with their Corporate Partner Award, recognizing CC&V’s volunteer program and community contributions programs.CC&V continued to be recognized as a Gold Leader in the State of Colorado’s Environmental Leadership Program, the first mine in Colorado to attain that level of recognition. In addition,  CC&V’s Environmental Management System  was recommended  for  re-certification under the  ISO  14001 standard  and  the operation continued under  its Cyanide Code certification.
  Cripple Creek & Victor – Summary of metallurgical operations
 
  
 
  Gold plants
            
  Operating and production data for Cripple Creek & Victor operations
 
  
 
 
 
 
 2009
 2008
 (3)
 
 2007
 
  
   
      
   
      
   
      
   
      
   
      (1)
   
      (1)
   
      
   
      (2)
   
      
   
      
   
     (1)  Total cash costs and total production costs are non-GAAP measures.  For further information on these non-GAAP measures, see “Item 5A.: Operating
 results – Total cash costs and total production costs”.
 
 (2)  Average for the year.
 
 
 
 
 
 
    (3)  Remaining 33 percent shareholding acquired effective July 1, 2008.


SOUTH AMERICA AngloGold  Ashanti  has  three  operations  in  South  America  -  Cerro  Vanguardia  in  Argentina  and  AngloGold  Ashanti Brasil Mineração (Brasil Mineração) and Serra Grande in Brazil. Combined, these operations produced 598,000 ounces of  gold  in  2009,  equivalent  to  13 percent  of  group  production  and  6 percent  more  than  in  2008.  They  employed 5,322 people, including contractors, which was 155 more than in 2008.  AngloGold Ashanti has had an active exploration program in Colombia for some years, with the most favorable of the prospects being in the La Colosa district. The exploration programs in Argentina and Brazil were recently expanded.ARGENTINA CERRO VANGUARDIA Description:AngloGold Ashanti has a 92.5 percent interest in Cerro Vanguardia and Fomicruz (the province of Santa Cruz),  owns  the  remaining  7.5 percent.  Located  to  the northwest  of  Puerto  San  Julian  in  the  province of  Santa  Cruz, Cerro  Vanguardia currently  consists  of  multiple,  small,  open  pits  with  high stripping  ratios.  The  orebodies  comprise a series of hydrothermal-vein deposits containing gold and large quantities of silver, which is produced as a by-product. Ore is processed at the metallurgical plant which has a daily capacity of 2,800t and includes a cyanide recovery plant. Technology at the plant is based on a conventional leaching process in tanks and carbon-in-leach (CIL) with a tailings dam incorporated in a closed circuit. The final recovery of gold and silver is achieved using the Merryl-Crowe method with metallic zinc.


Geology: The oldest rocks in this part of Patagonia are metamorphics of the Precambrian-Cambrian age.  These are overlain by Permian and Triassic continental clastic rocks which have been faulted into a series of horsts and grabens and are associated with both limited basaltic sills and dykes and with calc-alkaline granite and granodiorite intrusions.  Thick andesite flows of Lower Jurassic age occur above these sedimentary units.  A large volume of rhyolitic ignimbrites was  emplaced  during  the  Middle  and  Upper  Jurassic  age  over  an  area  of  approximately  100,000  square  kilometers.  These  volcanic  rocks  include  the  Chon  Aike  formation  ignimbrite  units  that  host  the  gold  bearing  veins  at  Cerro Vanguardia.  Post-mineral  units  include  Cretaceous  and  Tertiary  rocks  of  both  marine  and  continental  origin,  the Quaternary La Avenida formation, the Patagonia gravel and the overlying La Angelita basalt flows. These flows do not cover the area of the Cerro Vanguardia veins.   Gold and silver mineralization at Cerro Vanguardia occurs within a vertical range of about 150 to 200 meters in a series of  narrow,  banded  quartz  veins  that  occupy  structures  within  the  Chon  Aike  ignimbrites.  These  veins  form  a  typical structural pattern related to major north-south (Concepcion) and east-west (Vanguardia) shears. Two sets of veins have formed in response to this shearing - one set strikes about N40W and generally dips 65 to 90 degrees to the east; while the other set strikes about N75W and the veins dip 60 to 80 degrees to the south.   The  veins  are  typical  of  epithermal,  low-temperature,  adularia-sericite  character  and  consist  primarily  of  quartz  in several forms: as massive quartz, banded chalcedonic quartz, and quartz-cemented breccias.  Dark bands in the quartz are  due  to finely  disseminated  pyrite,  now  oxidized  to  limonite.    The  veins  show  sharp  contacts  with  the  surrounding ignimbrite which hosts narrow stockwork zones that are weakly mineralized and appear to have been cut by a sequence of north-east-trending faults that have southerly movement with no appreciable lateral displacement. Safety:Cerro  Vanguardia’s  safety  performance  improved  markedly  during  the  year  under  review,  with  the  LTIFR reducing  to 2.46  per million  hours worked  (2008: 3.98). No fatalities were recorded for the  seventh consecutive year. The  results  of  the  root  cause  analysis  of  2008  indicated  that  most  safety-related  incidents  were  caused  by  unsafe behavior  as  opposed  to  unsafe  conditions.  Safety  campaigns  during  the  year,  therefore,  focused  on  improving  safety awareness  and  instilling  safe behavior  practices.    Other  campaigns  comprised  workshops  around  “Safety  is  our  First Value”,  and  on  a  program  called  “Safety  Reflections”  which  focused  on  presenting  strong  safety  and  accident prevention thoughts  at the beginning of each working day.  At the same time a  safety mascot,  named Prudencio,  was introduced during the year. Operating review:Attributable gold production increased from the 154,000 ounces in 2008 to 192,000 ounces in 2009. This was equivalent to 4 percent of group production. This followed the resolution of technical difficulties associated with reduced tonnages, poor grades and the sedimentation problems experienced in 2008. Consequences of the corrective action  were  reduced  ore  dilution  at  the  mine  and  higher  tonnages  through  the  mill.  Dilution  control  reduced  the  clay content  in  the  ore  material  and  contributed  to  better  plant  availability  and  a  20 percent  improvement  in  recovered grades.
  Efficiencies and improvements in several areas including maintenance, fuel consumption and technical consulting led to a  decrease  in  total  cash  costs  from  $617 per  ounce  in  2008  to  $359 per  ounce  in  2009.  Increased  silver  production (from 1.6 million ounces attributable in 2008 to 2 million ounces attributable in 2009), together with higher prices for the metal, resulted in a significantly greater by-product  credit. The decline in costs was also helped by the  devaluation  of the Argentine peso from 3.4 to 3.8 per dollar, though the benefits of this were partially offset by a higher rate of inflation and increased royalties paid.  The latter was a function of the increase in production and prices received. Attributable capital expenditure was $17 million (2008: $15 million). Growth projectsThe completion of a four-year brownfields exploration program resulted in the identification of additional gold and silver deposits.


development started in December 2009 and production is scheduled to begin in mid-2010. The project has the potential  to  increase  production  from  open-pit  activities  to  613,000 ounces  of  gold  and  6.1 million  ounces  of silver. Similar mining changes will be considered at other pits in the future.
    leaching  operation,  was  completed  and  capital  expenditure  of  $31 million  has  been  approved  for  the development of the project. Basic and detailed engineering is being developed and plans are in place to begin stacking ore in the last quarter of 2010. The feasibility study indicated that the heap leach could increase annual gold production by 20,000 ounces, with approximately 3,000 ounces expected in late 2010. Cerro Vanguardia’s marginal-grade ores, below the cut-off grade of the current plant process, range from 0.35g/t to 1.5g/t.
  Cerro Vanguardia will begin another brownfields exploration program in 2010 to develop the remaining under-explored quartz vein. This has the potential to define high-grade mineralized material south of the Luciana-Natalia-Vibora trend as well as other targets like Aguila and the El Trío vein.  Potential underground deposits at the Luciana, Mangas and Osvaldo Diez veins will also be investigated and a drilling program will be conducted to a depth of 650 meters below surface.  The  mineralized  material  in  the  shallow,  low-grade  quartz  veins  will  be  bulk  mineable  and  heap-leachable material. A regional prospecting program is also being developed to identify additional deposits. Community  and  environment:Cerro  Vanguardia  actively  engages  with  the  local  community  and  NGOs on  several areas  of  mutual  interest  and  no  significant  issues  of  concern  were  raised  during  the  year.  Cerro  Vanguardia’s environmental management system is certified to ISO 14001.  Cerro Vanguardia temporarily withdrew from the Cyanide Code  owing  to  infrastructure  modifications  needed  to  meet  Code  requirements.  During  2009,  the  first  pre-verification compliance audit (gap analysis) was conducted  at Cerro Vanguardia for the  Code.  This was the first step towards its obtaining its Cyanide Code certification. A second pre-verification compliance audit is expected to be conducted in late 2010 with the final audit to follow in early 2011.
    Operating and production data for Cerro Vanguardia
 
   
      
 
 
  
      
 
 
 2009
 2008
 2007
 
  
       
       
       
       
       
       (1)
       (1)
       
       
       (2)
       (2)
      
 
 
  
     
 (1)  Total  cash  costs  and  total  production  costs  are  non-GAAP  measures.    For  further  information  on  these  non-GAAP  measures,  see  “Item  5A.:
 Operating results – Total cash costs and total production costs”.
 
 (2)  Average for the year.


BRAZILThe two AngloGold Ashanti assets in Brazil are AngloGold Ashanti Brasil Mineração and Serra Grande. In 2009, these operations together produced an attributable 406,000 ounces of gold, equivalent to 9 percent of group production. AngloGold Ashanti Brasil Mineração Description:The wholly owned Brasil Mineração mining complex is located in southeastern Brazil in the state of Minas Gerais,  close  to  the  city  of  Belo  Horizonte,  in  the  municipalities  of  Nova  Lima,  Sabará  and  Santa  Bárbara.    Ore  is sourced from the Cuiabá and Lamego underground mines and then processed at the Cuiabá and Queir ounces plants, and from the Córrego do Sitío heap-leach operation.Geology:  The  area  in  which  Brasil  Mineração  is  located  is  known  as  the  Iron Quadrangle  and  is  host to historic  and current gold mining operations, as well as a number of open-pit limestone and iron ore operations. The geology of the Iron Quadrangle is composed of Proterozoic and Archaean volcano-sedimentary sequences and Pre-Cambrian granitic complexes. The host to the gold mineralization is the volcano-sedimentary Nova Lima Group (NLG) that occurs at the base of the Rio das Velhas SuperGroup (RDVS). The upper sequence of the RDVS is the meta-sedimentary Maquiné Group. Cuiabá mine, located at Sabara Municipality, has gold mineralization associated with sulfides and quartz veins in Banded Ironstone Formation (BIF) and volcanic sequences. At this mine, structural control and fluids flow ascension are the most important factors for gold mineralization with a common association between large-scale shear zones and their associated structures. Where BIF is mineralized the ore appears strongly stratiform due to the selective sulfidation of the iron rich layers. Steeply plunging shear zones tend to control the ore shoots, which commonly plunge parallel to intersections between the shears and other structures.The controlling mineralization structures are the apparent intersection of thrust faults with tight isoclinal folds in a ductile environment.  The  host  rocks  at  Brasil  Mineração  are  BIF,  Lapa  Seca  and  mafic  volcanics  (principally  basaltic). Mineralization  is  due  to  the  interaction  of  low  salinity  carbon  dioxide  rich  fluids  with  the  high-iron  BIF,  basalts  and carbonaceous  graphitic  schists.  Sulfide  mineralization  consists  of  pyrrhotite  and  pyrite  with  subordinate  pyrite  and chalcopyrite; the latter tends to occur as a late-stage fracture fill and is not associated with gold mineralization. Wallrock alteration is typically carbonate, potassic and silicic.
  Brazil – Summary of metallurgical operations
 
 
 
      
 AngloGold Ashanti Mineração
 Serra Grande
 
 
 
 Cuiabá
 Raposos
 
 
 Gold plants
 
       
 
     Safety:A significantly improved safety performance resulted in an LTIFR of 1.64 per million hours worked for the year (2008: 3.06).  There  were  no  fatalities  at  Brasil  Mineração  in  2009.  This  result  followed  a  number  of  safety  initiatives including  the  “Do  it  only  if  it  is  safe  to  do”  campaign,  which  aims  to  prevent  injuries  and  fatalities  by  encouraging employees  to actively  identify and  manage  workplace risks.  Other workplace initiatives implemented included  a traffic control  workshop;  a  rock  mechanics  refresher  course;  and  the  formation  of  an  ergonomic  committee  and  training program.  In line with the AngloGold Ashanti’s corporate directives, the safety team’s integrated strategic plan is based on optimizing technology to reduce workers’ exposure to risks in the production process and on introducing controls that account for human fallibility in overall safety performance. Operating review: Gold production increased by 3 percent to 329,000 ounces, compared to 320,000 ounces in 2008. Daily  tonnages  mined  at  Cuiabá  improved  to  more  than  300t  in  the  second  half  of  the  year  as planned,  while  higher development rates contributed to greater mining flexibility.   As part of the pre-feasibility study for the Cuiabá Future Project, which is investigating ways of sustaining performance in the longer term, further strategic action was taken to enhance production from the area’s narrow veins and to study alternative  mining  methods.  To  support  this  strategy,  the  geotechnical  parameters  of  the  massive  orebodies  were reviewed and revised and construction of a refrigeration plant began. Completion is scheduled for the end of 2010.


The maintenance management program, which was restructured in 2008, continued its focus on optimizing costs and fleet availability. Further productivity improvements are expected from Project ONE.
  Total cash costs increased from $322 per ounce in 2008 to $347 per ounce in 2009, driven largely by the appreciation of the Brazilian real against the US dollar and lower revenue from the sale of sulfuric acid, which is a by-product of the Cuiabá operation. The onset of the global economic crisis in late 2008 caused a sharp decline in sulfuric acid prices in 2009.
  Capital expenditure was $84 million (2008: $69 million). Growth  projects:An  exploration  program  is  currently  under  way  on  the  former  São  Bento  property,  which  was acquired  in  December  2008 from  Eldorado  Gold.  The  property  adjoins  AngloGold  Ashanti’s  existing  Córrego  do  Sítio mine which, together with São Bento, has since been renamed Córrego do Sítio Mineração. Operational parameters for the  feasibility  study  for  Phase  1  of  the  Córrego  do  Sítio  project  have  been  confirmed  and  cover  the  Cachorro  Bravo, Laranjeiras and Carvoaria Velha orebodies, with trial mining of Cachorro Bravo already completed. The feasibility study for this first phase was finalised and will be tabled for approval by the board early in 2010. Estimates for this first phase are  for  the  production  of  5.4Mt  of  milled  ore  to  produce  90,000 ounces  of  gold  annually.  The  second  phase  of  this project  has  the  potential  to  effectively  double  the  size  of  the  operation  by  adding  mineral  potential  and  world-class infrastructure.
  
 The Lamego project feasibility study was approved in September 2008 and is currently being implemented. Production from the mine was 18,000 ounces in 2009 with full production in 2011.  A feasibility study on the Nova Lima Sul Project is being prepared for submission to the board at the beginning of 2011. If approved, development will take place in 2011 and 2012 with production scheduled to begin in 2012/13.
 
 
 Community and environment:Sustainable development of host communities in Brazil remains an overriding priority for Brasil Mineração as illustrated by the ongoing engagement with community representatives and non-governmental organisations  (NGOs).  Brasil  Mineração  continued  its  constructive  interaction  with  environmental  NGOs,  which  have increased  their vigilance  in the Atlantic Forest and Cerrado ecosystems. This  includes  the areas of Serra da Piedade around the Cuiabá mine; Serra do Caraça, near Córrego do Sítio; and Serra da Calçada, where AngloGold Ashanti has mineral  rights.  Stricter  legislation  aimed  at  enhancing  the  preservation  of  biodiversity,  especially  in  the  Atlantic  forest biome, may affect the clearance process for exploration licenses. Brasil Mineração retained its ISO 14001 certification. Cyanide is used at the Córrego do Sítio mine and the Queir ounces gold plant, which both received certification for full compliance with the Cyanide Code in 2009.
 
   
 
  
 
 2009
 2008
 2007
 
  
   
      
   
      (1)
   
      (1)
   
      
   
      (2)
   
      (2)
   
      
   
      (3)
   
      (3)
   
      
   
     (1)  Recovered grade represents underground operations.
 
 
 
 
 
 
 
  (2)  Total  cash  costs  and  total  production  costs  are  non-GAAP  measures.    For  further  information  on  these  non-GAAP  measures,  see  “Item  5A.:
 Operating results – Total cash costs and total production costs”.
 
 (3)  Average for the year.


Serra Grande (attributable 50 percent) Description:    Serra  Grande  is  located  in  central  Brazil,  in  the  state  of  Goiás,  5 kilometer  from  the  city  of  Crixás. AngloGold  Ashanti  and  Kinross  Gold  Corporation  are  equal  partners  in  this  operation.  In  terms  of  the  shareholders’ agreement,  AngloGold  Ashanti  manages  the  operation  and  has  the  right  to  access  a  maximum  of  50 percent  of  the earnings accrued and dividends paid by Serra Grande.
  Serra Grande currently comprises three underground mines, Mina III, Mina Nova and Palmeiras, and an open pit above Mina  III.  The  Palmeiras  mine,  where  the  main  development  began  in  May  2008,  started  production  in  2009  from  the primary  development  works.  Annual  capacity  of  the  processing  circuit,  which  has  grinding,  leaching,  filtration, precipitation  and  smelting  facilities,  was  expanded  from  about  0.8Mt  to  1.15Mt.  This  expansion  was  completed  in February 2009.Geology: The deposits occur in the Rio Vermelho and Ribeirão das Antes Formations of the Archaean Pilar de Goia’s Group which together account for a large proportion of the Crixás Greenstone Belt in central Brazil.  The stratigraphy  of  the  belt  is  dominated  by  basics  and  ultrabasics  in  the  lower sequences  with  volcano sedimentary units forming the upper successions.
  The gold deposits are hosted in a sequence of schists, volcanics and carbonates occurring in a typical greenstone belt structural  setting.    The  host  rocks  are  of  the  Pilar  de  Goiás  Group  of  the  Upper  Archaean.    Gold  mineralization  is associated with massive sulfides and vein quartz material associated with graphitic and sericitic schists and dolomites.  The  oreshoots  plunge  to  the  north-west  with  dips  of  between  6  and  35 degrees.  The  stratigraphy  is  overturned  and thrusts towards the east.
  The  greenstone  belt  lithologies  are  surrounded  by  Archaean  tonalitic  gneiss  and  granodiorite.  The  metamorphosed sediments are primarily composed of quartz, chlorite, sericite, graphitic and garnetiferous schists. The carbonates have been metamorphosed to ferroan dolomite marble with development of siderite and ankerite veining in the surrounding wallrock, usually associated with quartz veining. The basalts are relatively unaltered but do show pronounced stretching with elongation of pillow structures evident.
  The  Crixás  greenstone  belt  comprises  a  series  of  Archaean  to  Palaeoproterozoic  metavulcanics,  metasediments  and basement  granitoids  stacked  within  a  series  of  north  to  north-east  transported  thrust  sheet.  Thrusting (D1)  was accompanied  by  significant  F1  folding/foliation  development  and  progressive  alteration  in  a  brittle-ductile  regime. D1 thrusting developed with irregular thrust ramp geometry, in part controlled by concealed early basin faults. The main Crixás  orebodies  are  adjacent  to  a  major  north-north-west  structural  corridor,  and  up  the  main  fault  ramp/corner,  to become  dispersed  to  the  east  and  north  in  zones  of foreland  thrust flats.  Fluid  alteration  also  diminished  to  the  west away from the main fault corner. A series of concealed east-west to north-west-south-east basement block faults may have  provided  secondary  fluid  migration,  and  development  of  early  anti-formal  warps  in  the  thrust  sheets;  these structures probably define the quasi-regular spacing of significant mineralization within the belt. The D1 thrust stack was gently  folded  by  non-cylindrical  folds.    Gold  mineralizing  fluids  probably  migrated  during  this  event,  with  similar south-south-west to north-north-east migration, and focusing on bedding slip during folding. Gold mineralization became minor and dispersed to  the north  and east along the formal  thrust flat  zone. Concentrations of gold along the  case  of quartz vein may be due to the damming of fluids migrating upward along layering. Safety:Safety  performance at  Serra  Grande  improved  in  2009  with  an  LTIFR  for  the  year  of  1.08  per  million  hours worked  (2008:  1.29)  recorded  for  the  year  and  no  fatalities  (2008:1).    Safety  remained  the  highest  priority  during  the year, with a multi-faceted strategy applied to ensure continuous improvement.  A safety survey was conducted during the  year  to  assess  attitudes  toward  safety,  identify  areas  for  improvement  and  inform  the  design  of  an  integrated strategic  safety  program  aimed  at  further  improving  performance  and  reinforcing  awareness  of  the  importance  of working  safely.  The  safety  program  calls  for  technological  improvements  and  the  increased  use  of  appropriate technology  to  reduce  employees’  exposure  to  risks  in  the production  process.  This  plan  introduced  controls  that  take into account human factors in safety performance.  These efforts were complemented by the “Do it only if it is safe to do”campaign  which  encourages  employees  to  increase  their  individual  safety  efforts  by  identifying  and  managing workplace  risks.  All  employees  were  encouraged  to  use  the  booklet  on  Preliminary  Hazard  Analysis  to  improve  risk assessment  standards.    The  introduction  of  the  basic  principles  of  Failure  Mode  and  Effect  Analysis  into  the maintenance  area  proved  beneficial,  giving  greater  emphasis  to  measuring  and  mitigating  occupational  health  and safety risks.


Operating review:   Attributable  production  in 2009 declined from 87,000 ounces in 2008 to 77,000 ounces. This  was largely due to the mining of quartz veins as well as rock mechanic problems at Mina III. The net result of these factors was lower overall grades. The operation also faced a decline in recoveries, caused by the reduced residence time at the leaching tanks. To manage the operating challenges while improving productivity and countering the reduction in gold grade, several initiatives were implemented, including:
                Total cash costs increased to $429 per ounce from $299 per ounce in 2008, due largely to inflation, the exchange rate and lower production. The appreciation in the value of the local currency versus the US dollar affected 80 percent of the total cost base, including power, labor, fuel, taxes and maintenance services.
  Capital expenditure amounted to $67 million (2008: $41 million).
  Growth  prospects:A  total  of  20,500 meters  was  drilled  in  the  2009  exploration  program,  which  focused  on  the Pequizão, Palmeiras and Cajueiro targets and a review of the exploration database to generate new targets. Pequizão is  being  drilled  both  down-plunge  and  down-strike,  and  results  continue  to  indicate  the  potential  for  increased mineralized  material.  The  potential  of  the  Palmeiras  target  was  confirmed  after  work  on  the  underground  mine  had started and the drilling campaign continued to confirm down-plunge continuity. Following the encouraging results of the 2008  drilling  campaign  at  Cajueiro,  the  2009  program  aimed  to  define  the  geological  control.  The  evaluation  of  the Orebody V open pit added 18,000 ounces.
  The  Votorantim  Metais  Limitada  joint  venture  agreement  was  signed  during  the  year,  contributing  an  additional 46,000ha in exploration tenements. Work is progressing on a number of targets, including the Mina Nova Extension and Structure IV, to define additional potential.Community and environment:Environmental management remains an overriding priority at Serra Grande and work progressed on securing the permits needed to raise the tailings dam walls. Work was planned and implemented on the Chamada  Pública  de  Projetos,  a  social  development  program  in  the  Crixas  area  which  promotes community  projects related to health, education, employment and income generation. Serra Grande continued to work with local institutions in  support  of  cultural,  educational  and  social  events.    Serra  Grande  retained  its  ISO  14001  certification  and  received certification for full compliance with the Cyanide Code during 2009.
 
  Operating and production data for Serra Grande
 
  
 
 
     
   
     
 
  
 
 2009
 2008
 2007
 
  
   
      
   
      
   
      
   
      
   
      
   
      (1)
   
      (1)
   
      
   
      
   
      (2)
   
      (2)
   
      
   
    
 (1)  Total  cash  costs  and  total  production  costs  are  non-GAAP  measures.    For  further  information  on  these  non-GAAP  measures,  see  “Item  5A.:
 Operating results – Total cash costs and total production costs”.
 
 (2)  Average for the year.


GLOBAL EXPLORATION
 
 Greenfield explorationGreenfield exploration activities were undertaken in Australia, China, North and South America, Democratic Republic of the Congo (DRC), Middle East and North Africa (MENA), Russia, Sub-Saharan Africa and South East Asia during 2009. A total of 183,481 meters of diamond, reverse circulation, and aircore drilling was completed in testing existing priority targets and in the delineation of new targets in Australia, Colombia, the DRC and Canada.Greenfield activities in Russia, China, Sub-Saharan Africa, MENA and South East Asia were undertaken predominantly through  joint  ventures  and  strategic  alliances.  The  principal  objective  of  the  greenfield  exploration  team  is  value creation,  including  the  discovery  of  new  long-life,  low-cost  mines  that  maximize  shareholder  value.  Discoveries  and ground positions that do not meet certain investment criteria will be joint-ventured or divested to maximize the return on investment in exploration.
 
 Country
 Greenfield exploration
 expenditure 2009 (percent)
 Meters drilled 2009 (m)
 
 
 
                            Total
 100
 183,481


In  2010,  total  exploration  expenditure  of  some  $270 million  is  planned,  with  $86 million  to  be  spent  on  greenfield exploration  and  $78 million  allocated  to  a  pre-feasibility  studies  at  La  Colosa  in  Colombia,  and  feasibility  studies  at Tropicana in Australia and the Central Mongbwalu deposit in the DRC and associated expenditures. Of the remaining balance,  $91 million  is  planned  to  be  spent  on  brownfields  exploration  and  $15 million  in  terms  of  the  De  Beers  joint venture focusing on exploration on the continental shelf.Strategic contextAngloGold  Ashanti’s  greenfield  exploration  strategy  is  based  around  building,  growing  and  maintaining  a  pipeline  of projects  that  are  progressed  through  the  stages  of  exploration,  from  initial  ground  selection  to  discovery,  reserve definition  and  drill-out.  Exploration  is  conducted  by  AngloGold  Ashanti  in  its  own  right  (100 percent),  through  joint ventures  and  strategic  alliances.    Important  components  for  new  discoveries  and  effective  resource  targeting  include securing new search spaces, strategic landholdings and a balanced project portfolio.The current portfolio lies within the target range of 10-20 percent of the exploration investment in frontier terranes, 60-70 percent in emerging terranes, with the remainder invested into terranes of known gold endowment. The  estimated  breakdown  for  2009  is  68 percent  emerging  frontiers,  20 percent  frontiers  and  12 percent  known exploration terranes.Achievements Significant achievements for 2009 include the successful completion of the pre-feasibility study of the Tropicana-Havana deposit and board approval for a full feasibility study. Regional exploration was advanced over the large Tropicana joint venture and  wholly  owned  AngloGold  Ashanti project  in  the  Tropicana Fold  Belt.   Significant  advances  were  made  in diversifying the geopolitical and terrane risk of  AngloGold  Ashanti’s  greenfield exploration  portfolio  in 2009.  Entry  into new jurisdictions was achieved during the course of the year with rapid progress made in the delineation of exploration targets and their advancement to the license application or drill target definition stage in several countries. Expansion The  global  footprint  of  greenfield  exploration  activity  underwent  significant  change  in  2009.  During  the  course  of  the year, AngloGold Ashanti entered into a number of new joint ventures and strategic alliances in Canada, Brazil, Gabon, the Middle East and North Africa, while downsizing in China and Russia. These new ventures include the Superior joint venture with Laurentian Goldfields and the Baffin Island joint venture with Commander Resources in Canada; the Thani Ashanti strategic alliance in the Middle East and North Africa with Thani Investments; and the Sub-Saharan Africa Kele & Mase joint ventures  with XDM Resources in  the Solomon Islands.  AngloGold  Ashanti has also  re-entered  the Sub-Saharan  Africa  region  via  a  joint  venture  with  Dome  Ventures  in  Gabon.  An  exploration  alliance  was signed  in  Brazil with Horizonte Minerals to explore the Santana and Campestre projects.ImpedimentsA number of targets for greenfield exploration were missed in 2009, especially those relating to drilling and prefeasibility studies at  La  Colosa  and  Gramalote  in Colombia and at Central Mongbwalu in the DRC. The  total number  of meters drilled in 2009  was significantly  lower  than in  2008, a result  of delays  in the  approval of the necessary  environmental permits  in  Colombia,  the  requirement  to  renegotiate  the  joint  venture  terms  for  the  mineral  license  in  the  DRC,  the withdrawal from projects in Russia and the rejection of mineral applications in China. 2009 initiatives Initiatives  to  enhance  the  success  of  the  greenfields  exploration  team  included  a  rigorous  assessment  of the existing exploration portfolio. The work focused on establishing what AngloGold Ashanti consider the right percentage balance between  frontier,  emerging  and  known  geologic  terranes.  As  a  consequence  the  team  is  well  positioned  to  increase meters drilled on both existing and new projects that are close to and at drill ready stage in 2010. To  further  improve  the  decision  making  processes  in  project  and  portfolio  management,  the  company  is  moving  to  a uniform global portfolio management process that will encompass both technical and commercial gating elements.


Colombia Greenfield  exploration  was  completed  by  AngloGold  Ashanti  and  its  joint  venture  partners  B2Gold,  Glencore International  and  Mineros  S.A.  During  2009  systematic  regional  exploration  for  precious  and  base  metals  was undertaken over an area of 10,211 square kilometers. During the year, 110 new targets were field generated with two drilled. Since 2004, the investment in exploration has generated 714 new exploration targets, of which 39 were brought to  drill  stage  and  24  drill  tested.  Two  of  these  targets  are  now  projects  at  advanced  study  stages  and  contain  initial JORC compliant resources of 14.4 million ounces of gold. At  Gramalote  (51 percent  B2Gold,  49 percent  AngloGold  Ashanti),  the  joint  venture  partners  are  presently  in discussions to define the future of the project. At the wholly owned La Colosa project; AngloGold Ashanti received a resolution on October 20, 2009 from the Ministry of  Environment  and  Territorial  Development,  which  allowed  initiation  of  exploration  permitting  procedures  before  the regional  environmental  authority  Cortolima.  Once  permits  are  in  place,  drilling  and  pre-feasibility  development  will  be undertaken. Drill preparation work is in progress and further infill and step-out drilling as part of ongoing pre-feasibility studies is scheduled to begin in 2010.
  In all, 119 targets were generated by systematic exploration in an area covering 12,110 square kilometers, on 19,366  square kilometers of mineral tenement contracts and applications in 2009. Three targets were drilled and 21 remain to be drill tested in Colombia.CanadaAngloGold  Ashanti  initiated  greenfield  exploration  in  several  areas  of  Canada  in  2009,  both  on  its  own  and  in  joint ventures  with  two  Canadian  mineral  exploration  companies,  Laurentian  Goldfields  and  Commander  Resources.  Brief details of each project and its targets are given below. Superior joint venture(AngloGold Ashanti/Laurentian Goldfields) – the Laurentian Goldfields Superior Province alliance is  active  in  several  areas  of  eastern  Canada.  Early  stage  fieldwork  is  being  undertaken  by  Laurentian  on  regions considered prospective for gold mineralization with drilling expected on new targets in 2010 or 2011.


Baffin  Island  joint  venture(AngloGold  Ashanti/Commander  Resources)  –  AngloGold  Ashanti  is  earning  into  a  joint venture on Commander’s Baffin Island properties. Field work completed during 2009 returned encouraging results, on which drilling programs will be planned for 2010.BrazilAngloGold Ashanti initiated new greenfield exploration programs in Brazil in 2009 and signed a joint venture agreement with a junior mineral exploration company, Horizonte Minerals, to explore two specific areas of the country. Democratic Republic of the CongoExploration  activities  were  undertaken  on  the  7,443 square  kilometers  Concession  40  (AngloGold  Ashanti 86.22 percent/OKIMO 13.78 percent) mineral claim  that covers a significant portion of the  Kilo greenstone  belt, which remains largely unexplored by modern methods. This work comprised mainly regional mapping, soil sampling and data compilation while renegotiation of the joint venture agreement with the government of the DRC and OKIMO continued. It is anticipated that the revised joint venture agreement will be executed in early 2010, following which transfer of titles to the exploration licenses to the joint venture company, Ashanti Goldfields Kilo, will be completed.
  All  drill  holes  from  the  Mongbwalu  resource  were  re-logged  and  the  resource  remodeled  in  preparation  for  a  pre-feasibility  study  based  on  an  underground  mining  scenario.  A  detailed  review  of  the  historical  data  in  the  general Mongbwalu area was undertaken to assist with future exploration targeting. In  early  2009  assay  results  were  received  from  all  drilling  completed  at  Mongbwalu  Central  and  Adidi  South  in  late 2008. The best intersections received are tabled below.
 Interval (m)
 Grade (g/t Au)
 
 From (m)


Drilling  recommenced  in  November  and  a  total  of  1,108m  in  10  diamond  holes  was  completed  for  metallurgical  test work at the Mongbwalu Resource area. Field mapping continued along strike from the Mongbwalu Resource. Field work for the regional greenfields projects recommenced in November 2009 and consisted predominantly of soil sampling and trenching.
  Field work was carried out at Lodjo, Camp 3, Petsi and Pluto North. A total of 1,878 soil samples, 195 rock chip and 452 trench and pit samples were collected for the year. RussiaThe dissolution of the joint venture (Zoloto Taigi joint venture) with Polymetal is in progress with divestment of the two exploration and four mining licenses under way. This includes completion of the sale of Veduga, subject to conditions precedent.
  AngloGold  Ashanti  expects  that  the  Asacha  Mine  in  Kamchatka,  held  by  AIM  listed  Trans  Siberian  Gold  in  which AngloGold Ashanti has a 29.74 percent stake, will start production in the first quarter of 2011. A final round of financing for the last phase of construction (tailings facility, plant assembly, ore development) had almost been completed by the owners at the time of publication.Gabon In  Gabon,  AngloGold  Ashanti  and  its  joint  venture  partners  have  collectively  secured  approximately  16,501 square kilometers of tenements in an under-explored region considered prospective for gold mineralization. During 2009, a joint venture  was entered  into  with  Dome  ventures over  its  Mevang  and  Ndjole  licenses,  representing  a  combined  area  of some 4,000 square kilometers. 
  AngloGold  Ashanti  holds  the  Ogooue  prospection  permit  covering  an  area  of  8,295km 2 Koumaneyoung licences were acquired through acquisition of Amiga SARL from Swala Resources.


Middle East and North Africa (MENA) In June 2009, AngloGold Ashanti and Thani Investments, a privately held UAE-based company, entered into a strategic alliance to explore for and develop precious and base metal deposits in the Arabian Nubian Shield and other parts of the Middle East and North Africa.
  The business development and project generation activities of the Thani Ashanti strategic alliance are conducted from Dubai.  During  2009,  work  has  focused  on  project  generation  and  exploration  over  specific  regions  of  the  highly prospective  Arabian  Nubian  Shield  within  Egypt,  Eritrea  and  Saudi  Arabia.  Exploration  conducted  by  the  alliance  has commenced on two exploration licenses in Egypt.South East Asia In the Solomon Islands, AngloGold Ashanti has entered into two joint venture agreements with XDM Resources.   The  Kele  and  Mase  joint  venture  agreements  cover  an  area  of  738 square  kilometers  and  to  date  in  excess  of  18 mineralized  prospect  areas  have  been  identified.  Five  of  these  have  returned  significant  widths  of  ore-grade mineralization  from  trenches  and  drill  holes.    Exploration  activities  including  field  mapping,  auger  soil  and  rock  chip sampling, spectral and petrological studies, have commenced in preparation for drilling in the first quarter of 2010. China In  China,  AngloGold  Ashanti’s  exploration  activities  are  now  limited  to  the  cooperative  joint  venture  over  the Jinchanggou group of properties in the province of Gansu, located in western China. Limited trenching over a specific target  and  detailed  infill  soil  sampling  of  the  tenements  was  completed  in  late  2009.  The  results  are  currently  under review. Elsewhere in China, AngloGold Ashanti continues to evaluate exploration opportunities.


Australia At  the  Tropicana  joint  venture  (AngloGold  Ashanti  70 percent,  Independence  Group  NL  30 percent),  the  start  of  the Tropicana feasibility study was approved by the joint venture partners in July 2009.  The  joint  venture  focused  on  exploration  targets  near  the  Tropicana-Havana  deposits.  During  the  year  a  total  of 3,171 aircore  holes  were  drilled  for  127,562 meters,  281  reverse  circulation  holes  for  36,888 meters  and  46  diamond holes  for  7,220 meters.  Systematic  surface  auger  sampling  of  30,276  samples  were  collected  and  nearly  7,928  line kilometers  of  aeromagnetic  and  radiometric  surveying,  256  line  kilometers  of  IP  surveying  and  71  line  kilometers  of down-hole IP surveying was undertaken.
  The  best  results  for  the  year  came  from  diamond  drilling  intercepts  approximately  550m  northeast  of  the  proposed Tropicana  pit,  including  7 meters  @  2.1g/t  Au  from  141 meters  and  14 meters  @  3.49g/t  Au  from  176 meters. Significantly, these intersections from the same hole may represent the faulted northern continuation of the Tropicana orebody.  Encouraging  results were also obtained to  the south of the proposed Havana pit at  the Havana South zone and  Crouching  Tiger  prospects.  In  Havana  South,  significant  intersections  included  13 meters  @  2.37g/t  gold  from 317 meters and 21 meters @ 2.50g/t gold from 202 meters. Reverse circulation drilling at Crouching Tiger intersected 8 meters @ 2.83g/t gold from 134 meters.
  In more regional exploration, significant aircore results were returned from Black Dragon, 30 kilometers northeast of the Tropicana–Havana resource, including 4 meters @ 0.6g/t gold from 40 meters. At Tumbleweed, 10 kilometers north of Tropicana,  aircore  drilling  returned  8 meters  @  0.81g/t  gold  from  56 meters.  These  results  confirm  the  anomalous zones  identified  by  previous  significant  aircore  intersections  and  extend  the  size  potential  of  the  targets.  At  Voodoo Child, 50 kilometers north of Tropicana, aircore drilling intersected 17 meters @ 2.25g/t gold from 3 meters. Infill aircore drilling and follow-up reverse circulation drilling are planned for these prospects in 2010.


In addition to the Tropicana joint venture area, which totals approximately 13,788 square kilometers, AngloGold Ashanti holds  100 percent of a substantial  land package (11,040 square  kilometers  in the Viking  area, including  6,200 square kilometers of granted exploration licenses). Viking is southwest of the Tropicana joint venture within the Albany-Fraser foreland  tectonic  setting  that  hosts  the  Tropicana  deposit.    Surface  geochemical  sampling  continued  throughout  the year  for  a  total  of  10,390  samples  and  an  airborne  magneticradiometric  survey  was  completed  for  38,909  line kilometers.
  The  Tropicana  joint  venture  and  the  Viking  project  extend  over  600 kilometer  of  strike  parallel  to  the  Albany  Fraser orogen, located at the boundary of the Yilgarn and Mawsom Cratons. The 5 million ounces Tropicana discovery, as well as numerous prospects identified by AngloGold Ashanti suggest that the Tropicana belt is emerging as a significant new gold province.
  AngloGold  Ashanti  completed  the  purchase  of  the  interests  and  rights  of  Anglo  American  Exploration  Australia  in  the 830km 2 airborne  magnetic-radiometric  (7,436  line  kilometers)  and  infill  SQUID  electromagnetic  (37  line  kilometers)  surveying
  was completed to assist drill target definition.AngloGold Ashanti-De Beers joint venture AngloGold  Ashanti  Limited  and  the  De  Beers  Group  of  Companies  announced  the  formation  of  a  joint  venture  to undertake  initial  exploration  and  to ultimately  mine  for  gold  and  other  minerals  and  metals  from  the  ocean floor.  This excludes diamonds, unless these occur together with other target minerals and metals. The joint venture’s activities will focus  on  marine  deposits  located  in,  or  adjacent  to,  the  area  between  the  high  water  mark  and  the  edge  of  the continental shelf on a worldwide basis.
  The establishment of this joint venture will allow AngloGold Ashanti to take advantage of the opportunity of partnering with  a  world  leader  in  the  field  of  marine  exploration  and  mining  with  a  view  to  exploring  and  mining  of  the  target minerals from deposits located on the continental shelf. The  joint  venture  has  established  a  technical  services  company  (AuruMar)  to  be  jointly  owned  by  AngloGold  Ashanti and  De  Beers  Marine.  AngloGold  Ashanti’s  commitment  under  the  agreement  is  to  sole  fund  the  joint  venture  and AuruMar until the completion of an initial exploration period of at least three consecutive sampling seasons as approved and budgeted for prior to December 31, 2012, or the date upon which AngloGold Ashanti has funded a total amount of $40m,  whichever  is  achieved  first.  Upon  conclusion  of  this  period,  AngloGold  Ashanti  will  have  earned  equivalent interests to De Beers in all the sub-joint venture opportunities pursued under the joint venture. AngloGold Ashanti and De Beers will seek to secure majority interests for the joint venture in any sub-joint venture that involves a third party. Initial  work  continues  in  New  Zealand  to  complete  the  sonic  drill  rig  and  the  launch  and  recovery  system  (LARS)  as assets of AuruMar. Drilling scheduled to start in the first quarter of 2010. Initial drilling will target potential gold deposits off the west coast of the South Island, New Zealand. Pre-feasibility and feasibility studies Australia The  pre-feasibility  study  on  the  Tropicana  Gold  Project  in  Australia  was  completed  during  June  2009  and  a  decision was taken by AngloGold Ashanti and its joint venture partner to proceed with a full bankable study. AngloGold Ashanti is  currently  undertaking  this  study  and  seeking  environmental  approvals  for  open  pit  mining  on  behalf  of  the  joint venture partner.
  Tropicana  represents  a  significant  new  discovery  in  a  new  gold  district,  about  300km  east  of  Kalgoorlie.  Should development  of  the  project  proceed,  the  mine  is  expected  to  produce  an  average  of  between  330,000 ounces  and 410,000 ounces a year, at a total cash cost of between A$590 per ounce Au and A$710 per ounce Au, over a 10-year initial life. There is potential to increase the mineralized material and mine life through additional drilling at the nearby Havana South and other prospects.


Drilling  and  an  update  of  the  grade  model  as  part  of  the  feasibility  study  has  been  completed  and  the  estimate  is currently  being  internally  and  independently  reviewed  and  audited.  A  close-spaced  drilling  program  was  completed within the Havana Mineral Resource to simulate grade control drilling. Results from this drilling confirm the interpreted continuity of  mineralization. The  data will  be  further analyzed to validate the  Mineral Resource model and to optimize grade control and mining selectivity.
  Work on updating the pit designs, mining schedules and reserve for the feasibility study has commenced. Tendering for contract mining is in progress, with owner mining costs to be updated. A  comprehensive  metallurgical  test  work  program  for  the  feasibility  study  has  been  substantially  completed.  Results confirm  the  processing  flowsheet  selected  from  the  pre-feasibility  study  of  primary  and  secondary  crushing,  high pressure  grinding  rolls  followed  by  conventional  carbon-in-leach.  A  number  of  engineering  studies  have  been undertaken  to  optimize  the  plant,  operating  and  capital  costs,  and  operating  performance.  The  major  aspects  of  the plant design and engineering will occur in early 2010. Geotechnical studies for the mine access road and tailings storage facility are in progress and will be utilized as inputs for refining designs and developing feasibility-level cost estimates. Feasibility The  eight-week  public  review  period  for  the  Tropicana  Gold  Project  environmental  impact  assessment  closed  in  late November 2009 with a limited number of submissions received. The Tropicana joint venture is currently consulting with the  organizations  that  made  submissions  and  is  developing  a  formal  response  to  the  submissions,  which  will  be provided to the office of the Environmental Protection Authority. The Environmental Protection Authority will provide a recommendation  on  the  project  approval  and  conditions  to  the  Western  Australia  Minister  for  the  Environment.  The approval and conditions are subject to public appeal. Brownfields exploration Brownfields  exploration,  was  undertaken  around  the  globe  at  most  current  operations,  with  the  most  success  having been achieved in South Africa, Mali, Guinea and the United States. The brownfields exploration program for 2009 was aimed at replacing ounces at current operations.Argentina At Cerro Vanguardia, the exploration program continued with delineation drilling and reconnaissance drilling. Significant drilling  was  completed  on  underground  targets  and  a full  underground  study  is  currently  under  way.  In  the  El  Volcan project  area,  initial  exploration  started  with  sampling,  mapping  and  geological  reconnaissance  work  completed.  A detailed aeromagnetic survey of the sector started in the last quarter, with some interesting structural trends identified. The survey was delayed by an unfortunate helicopter incident which damaged the probe. Australia At  the  Sunrise  Dam,  exploration  focused  on  infill  drilling  within  the  existing  Mega  Pit  and  continuing  to  extend  the underground Ore Reserve. The in-pit drilling confirmed that mineralization beneath the Sunrise shear and Midway shear zones  continues  up-dip  and may  provide  the opportunity  for  an  internal  cutback  on  the  eastern  side  of  the  Mega  Pit. Further underground drilling has identified extensions to the high-grade Cosmo, Astro, Dolly and GQ lodes. Additional investigations  on  the  extensions  to  high-grade  gold  mineralization,  that  lie  open  below  1km  vertical,  continues.  In addition, exploration for satellite pits in the surrounding district continued at Golden Delicious, the paleochannel, Neville and Wilga (Chalice 100 percent; AngloGold Ashanti earning 75 percent) prospects. Brazil At  the  Córrego  do  Sítio  Sulfide  Project,  drilling  continued  with  6,505m  drilled  from  surface  and  15,682m  drilled  from underground.  The  drilling  was  aimed  at  defining  and  converting  the  three  main  ore  zones.  A  total  of  4,718m  of underground  development  was  completed.  For  extensions  of  Córrego  do  Sítio  into  São  Bento,  a  further  23,426m  of surface drilling was completed. At the Lamego project, 19,838m of surface drilling and 3,000m underground drilling was completed. A total of 4,368m of underground development was completed.


At Serra Grande, the main targets for 2009 were Pequizão, Fiuca, Cajuerio and Palmeiras. The Devidrill system, which allows many deflections to be drilled off a single hole without the use of steel wedges, was successfully tested. The use of  this  system  is  expected  to  save  drilling  meters  and  reduce  the  environmental  damage  by  restricting  drill  site clearance.Ghana At Obuasi, drilling for the Deeps project below 50 level continued with the areas below KMS and Adansi Shafts being targeted from 50 level. This drilling was stopped in the third quarter as the results of flooding. The drill sites on 50 level are still to be rehabilitated. Active exploration continued above 50 level. At Iduapriem, drilling for the year consisted of Mineral Resource Conversion drilling at Ajopa and it was completed in the first quarter.Guinea At Siguiri in Guinea, exploration focused on in-fill drilling within the area of the central pits. During the year all the central deposits  were  built  into  a  combined  geological  and  grade  model  and  exploration  was  initiated  to  prove  up  potential economic  extensions.  This  drilling  took  place  adjacent  to  and  between  the  Bidini,  Sanu-Tinti,  Sorofe,  Tubani, Kalamagna, Kozan and Kami pits.
  Diamond drilling continued to investigate the fresh rock potential below the Kosise, Bidini, Sanu Tinti and Kami pits. Extension  drilling  to  the  Sintroko  Project,  based  on  anomalous  soil  sampling  and  previous  drilling,  was  done  to  the north, east and west of the main deposit.
  Geochemical soil sampling continued in Block 1 to the north and north-east of current mining operations and east of the Sintroko. The Komatigiuya target, a 1,000m soil anomaly, was discovered by the sampling and represents a significant new discovery.
  IP Geophysical equipment arrived on site and a test self-potential survey over Sintroko South was completed. Results are promising with IP anomalies co-incident with known mineralization. Future surveys will include Toubani and the rest of the Sintroko area.Mali At  Morila,  exploration  stopped  in  the  second  quarter  after  follow-up  drilling  based  on  the  revised  geological  model proved unsuccessful.
  At Sadiola, exploration activity focused on drilling the area around the FE4 pit where mineralization was extended along strike and into the gap between FE3 and FE4. The Sadiola Deeps infill drilling recommenced in December 2009. A high-resolution aeromagnetic and radiometric survey was completed over the Sadiola and Yatela mining lease areas. At Yatela, an intensive program aimed at extending the mining into 2010 continued during the year. Significant success was achieved along the edges of the Yatela Main pit, Yatela North and Alamoutala. Drilling will continue in 2010. Namibia At Navachab, Mineral Resource conversion drilling was completed at Gecko. Further Mineral Resource conversion and extension  drilling  was  completed  around  the  Main  pit,  the  hanging  wall  sheeted  vein  system  and  North  Pit  2  footwall veins.
  Regional exploration continued with drilling in the Gecko Valley, which is targeted at joining the Central and Southern areas.
  Drilling was also started on the Klipspringer, Steenbok and Starling targets. A gradient IP survey was completed over the Anomaly 16 prospect. The results indicate the potential for significant sulfide mineralization.


South Africa In  South  Africa,  surface  drilling  continued  in  the  Project  Zaaiplaats  area.  MMB5  continued  drilling  for  the  entire  year. Deflection 7 is now being drilled to intersect the Vaal Reef. MZA9 continued drilling and is currently drilling deflection 23. The  first  reef  intersection  is  now  expected  in  the  second  quarter  of  2010.  The  long  deflection  from  MGR6  continued drilling  and  the  hole  is  currently  at  a  depth  of  2,397 meters.  The  Vaal  Reef  is  expected  to  be  intersected  in  the  third quarter of 2010. Progress on MGR8 was slowed by poor ground conditions. The hole is currently at 3,020 meters and a reef intersection is anticipated in the first quarter of 2010. In the Western Ultra Deep Levels area, UD51 started drilling in the first quarter and intersected a partly artesian fracture system which has significantly reduced the advance. The hole is currently at a depth of 2,796 meters and a Ventersdorp Contact Reef intersection is expected in the second quarter of 2010. Tanzania At Geita, for the first two quarters extension and infill drilling continued at Star and Comet, Chipaka and Kalondwa Hill. Initial  aircore  drilling  was  conducted  over  Matandani  NW  and  Nyamalembo.  Regional  target  generation  work  was completed and 41 targets identified for follow up.
  In  the  third  quarter,  the  focus  of  the  exploration  activities  was  revised  and  concentrated  on  three  activities:  ground geophysical surveys, a core re-logging program of the Central Thrust Ramp ore zones and the infill drilling programme for Nyankanga Cut 7 and Geita Hill. The infill drilling program at Nyankanga Cut 7 was completed in December. A total of 16,727 meters was drilled. Logging and sampling will be completed in first quarter of 2010. United States At Cripple Creek & Victor, extension drilling at Squaw Gulch and North Cresson continued during the year. Drilling and studies continued to quantify the potential of the high grade mineralized material particularly in the east of the Cresson deposit. Metallurgical testing of high grade material is underway and further metallurgical test drilling has been planned. ORE RESERVES Ore Reserve estimates are reported in accordance with the requirements of the SEC’s Industry Guide 7.  Accordingly, as of the date of reporting, all Ore Reserves are planned to be mined out under the life-of-mine plans within the period of AngloGold Ashanti’s existing rights to mine, or within the renewal periods of AngloGold Ashanti’s rights to mine.  In addition,  as  of  the  date  of  reporting,  all  Ore  Reserves  are  covered  by  required  permits  and  governmental  approvals.  See “Item 4B.: Business overview”.
  AngloGold Ashanti has standard procedures for the estimation of Ore Reserves.  These standard procedures are performed by technical personnel at the mining operations and reviewed by regional and corporate competent persons.In the case of its underground mines, the procedure is as follows: Firstly, gold content and tonnage are estimated for in-situ  mineralized  material  at  a  mining  operation.  This  mineralized  material  is  not  necessarily  economically  viable.  Exclusions on the grounds of safety (for example, stability pillars and, shaft pillars) are then defined. Grade and tonnage curves specific for each of the deposits, in conjunction with parameters such as the cost structure, yield, mine call factor and, gold price estimates are used to determine an optimal mining mix.  This process facilitates the determination of the average grade to be mined  by each  operation. This  grade is then applied  to the  grade-tonnage curves,  which  in turn facilitates the determination of the cut-off grade and Ore Reserve tonnage for the operation. A full mine design is carried out on the blocks of mineralized material, excluding large mining areas that do not meet the cut-off grade criterion. This mining plan is reviewed to ensure that it satisfies the economic criterion and practical limitations of access and timing.  If the review process is positive then the mineralized material (with dilution) included in the mining plan is declared and published as the Ore Reserve for that operation.


In the case of open-pit mines the procedure is as follows: revenue and costs are calculated for each mining block within a  three-dimensional  model  of  the  orebody  using  assumed  values  for  gold  price,  operating  costs  and  metallurgical recoveries.  An optimization process is then applied to determine the combination of blocks within the model that make a  positive  contribution  under  these  assumptions.    Block  selection  is  within  a  shell  whose  limits  are  defined  by  the planned slope angles of the pit.  Within this process, a cut-off grade is applied which determines the ore blocks to be treated  and  included  in  the  Ore  Reserves.  These  blocks  are  scheduled  with  consideration  being  given  to  practical mining  considerations  and  limitations.    Scheduled  ore  blocks  that  are  classified  as  Proven  or  Probable  constitute  the Ore Reserve.
     
  
 
       2009
 2009
 2008
 
 
  (3 year
 average)
 (Business
 Plan)
 
 (3 Year
 average)
 Units
 
 
       
       
      
 The  Ore  Reserves  determined  from  the  planning  process  were  then  tested  for  economic  viability  at  the  three-year historical average gold price and currency exchange rates shown in the above table for determining SEC compliant Ore Reserves.  The resultant SEC compliant Proven and Probable Ore Reserves are shown in the following pages.
  
 In  Australia  and  South  Africa,  AngloGold  Ashanti  is  legally  required  to  publicly  report  Ore  Reserves  and  Mineral Resources according to the Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC 2004) and the South African Code for Reporting of Mineral Resources and Ore Reserves (SAMREC 2000).  The SEC’s Industry Guide 7 does not  recognize  Mineral Resources. Accordingly, AngloGold Ashanti does not report estimates of  Mineral Resources in this annual report on Form 20-F.
   The restated 2009 Ore Reserve increased by 4.3 million ounces before the subtraction of depletion. After a depletion of 5.2  million  ounces,  the  net decrease  is  1.0  million  ounces  to  give  a  total  Ore  Reserve  of  68.3  million  ounces.  A gold price of $840 per ounce was used for Ore Reserve estimates (2008: $730 per ounce).
  
 The principal changes in AngloGold Ashanti’s Ore Reserves as at December 31, 2009 compared with those published as at December 31, 2008 are as follows:
  
 
 Ore Reserve
 Million oz
 
 Ore Reserves as at December 31, 2008
 73.5
 
 Sale of Boddington
  
 Acquisition of Kibali
  
 Restated 2008 Ore Reserves
  
 Reductions
     Northern  portion  of  mine  was  removed  from  plan  to ensure profitability
    Reduction  due  to  mine  design  changes  plus  slightly lower  Mine  Call  Factor,  also  changes  in  geological structure, facies and evaluation model.
            
 Additions
 
 
       Deep  Sulfide  Ore  Reserve  included  and  attributable ownership increased from 38% to 41%.
      
 Ore Reserves as at  December 31, 2009
 68.3
 
 Rounding may result in computational differences.


AngloGold  Ashanti  will  continue  to  pursue  a  strategy  of  increasing  value-adding  Ore  Reserves  through  expansion projects, brownfields and greenfields exploration and acquisition of new assets.  The Ore Reserve estimates in this document include Ore Reserves below current infrastructure in the case of certain South African,  Brazilian  and  Ghanaian  underground  mines  which  are  in  production.  These  Ore  Reserves  have  been  determined based upon completed economic studies.BY-PRODUCTSSeveral  by-products  are  recovered  as  a  result  of  the  processing  of  gold  Ore  Reserves.    These  include  37.3 million pounds  of  uranium  oxide  from  the  South  African  operations,  0.45 million  tonnes  of  sulfur  from  Brazil  and  34.9 million ounces  of silver  from  Argentina.  Details  of  by-product Mineral  Resources and Ore  Reserves  are  given  in  the  Mineral Resource and Ore Reserve Report 2009, which is available on the corporate website. EXTERNAL AUDIT OF MINERAL RESOURCE AND ORE RESERVE STATEMENT
   During the course of the year and as part of the rolling audit program, AngloGold Ashanti’s 2009 grade models for the following operations were submitted for external audit:
                   The company has been informed that the audit identified no material shortcomings in the process by which AngloGold Ashanti's  grade  models  were  evaluated.  It  is  the  company's  intention  to  continue  this  process  so  that  each  of  its operations will be audited every three years on average.
 
 
 COMPETENT PERSONS
   The information in this report that relates to Ore Reserves is based on information compiled by the Competent Persons. The  Competent  Persons  consent  to  the  inclusion  of  Exploration  Results,  Mineral  Resources  and  Ore  Reserves information in this report, in the form and context in which it appears.
    During  the  past  decade,  the  company  has  developed  and  implemented  a  rigorous  system  of  internal  and  external reviews of Exploration Results, Mineral Resources or Ore Reserves. A chain of responsibility exists from the Competent Persons at the operations to the company's Mineral Resource and Ore Reserve Steering Committee. Accordingly, the Chairman of the Mineral Resource and Ore Reserve Steering Committee, VA Chamberlain, MSc (Mining Engineering), BSc Hons  (Geology),  MAusIMM,  assumes  responsibility  for  the  Mineral  Resource  and  Ore  Reserve  processes  for AngloGold Ashanti and is satisfied that the Competent Persons have fulfilled their responsibilities.


104
 
 
 
 
  Ore Reserves: Imperial
 
 
 
 
 At December 31, 2009
 
  
 
 
 
 
 Proven Ore Reserves
 (1)
 
 
 
 Probable Ore Reserves
 (1)(2)
 
 
 
 Metallurgical
 
 
  
 
 
 
 
 Tons
 (5)
 Grade
 Gold
 Content
 (1)
 Tons
 (5)
 Grade
 Gold
 Content
 (1)
 Recovery
 Factor
 
 
  
 
 
 
 
 (mill)
 (oz/ton)
 (mill oz)
 (mill)
 (oz/ton)
 (mill oz)
 percent
 
 
  Southern Africa
 
 
 
 
 
   
 Vaal River
 (6)
 
 
 
 
 
  
 Great Noligwa
  
 
  4.03
 0.226
 0.91
 3.35
 0.206
 0.69
 96.3
 
   
 Kopanang
  
 
  1.08
 0.202
 0.22
 18.64
 0.166
 3.10
 97.5
 
   
 Moab Khotsong
  
 
  1.29
 0.305
 0.39
 20.51
 0.328
 6.74
 94.6 – 97.1
  
   
 Tau Lekoa
  
 
  0.66
 0.116
 0.08
 0.76
 0.116
 0.09
 97.4
 
   
 West Wits
 
 
 
 
 
   
 Mponeng
  
 
  2.45
 0.241
 0.59
 39.46
 0.307
 12.12
 98.0 – 98.5
  
   
 Savuka
  
 
  0.13
 0.156
 0.02
 3.26
 0.182
 0.59
 97.3
 
   
 TauTona
  
 
  0.37
 0.345
 0.13
 9.58
 0.272
 2.60
 97.8
 
   
 Surface
 
 
 
 
 
 
  
 Surface sources
  
 
  -
 -
 -
 128.22
 0.015
 1.88
 48 – 91
  
   South Africa
  
 
  
   
 Namibia
 
 
 
 
 
   
 Navachab
  
 
  10.86
 0.027
 0.29
 35.72
 0.037
 1.33
 88.0
  
   Continental Africa
  
 
  
   
 Democartic Republic of the Congo
 
 
 
 
 
   
 Kibali (45 percent)
  
 
  -
 -
 -
 31.65
 0.131
 4.14
 84.5 –  91.3
 
   
 Ghana
 
 
 
 
 
   
 Iduapriem
  
 
  29.06
 0.040
 1.16
 25.59
 0.048
 1.24
 95.0
  
   
 Obuasi
  
 
  15.35
 0.208
 3.19
 30.97
 0.208
 6.46
 35.0 – 83.0
  
   
 Guinea
 
 
 
 
 
   
 Siguiri (85 percent)
  
 
  33.98
 0.019
 0.63
 96.84
 0.025
 2.44
 88.0 – 93.5
  
   
 Mali
 
 
 
 
 
   
 Morila (40 percent)
  
 
  4.34
 0.051
 0.22
 3.05
 0.033
 0.10
 88.9 – 89.0
  
   
 Sadiola (41 percent)
  
 
  4.52
 0.072
 0.33
 17.86
 0.063
 1.13
 80.0 – 100.0
  
   
 Yatela (40 percent)
  
 
  1.33
 0.033
 0.04
 -
 -
 -
 84.8
  
   
 Tanzania
 
 
 
 
 
   
 Geita
  
 
  -
 -
 -
 52.21
 0.097
 5.07
 46.2-89.3
  
   Australasia
 
 
 
 
 
   
 Australia
 
 
 
 
 
   
 Sunrise Dam
  
 
  9.16
 0.057
 0.52
 10.24
 0.118
 1.21
 85 – 85.5
  
   North America
 
 
 
 
 
   
 United States of America
 
 
 
 
 
   
 Cripple Creek & Victor
  
 
  110.03
 0.027
 2.97
 51.14
 0.026
 1.32
 50 – 77
  
   South America
  
 
  
   
 Argentina
 
 
 
 
 
   
 Cerro Vanguardia (92.5 percent)
 
 
 
 
 95.0
  
   
 
  
 
  11.86
 0.040
 0.48
 10.63
 0.132
 1.40
 
  
 
   
 Brazil
 
 
 
 
 
   
 Brasil Mineraçáo
  
 
  5.08
 0.202
 1.03
 7.12
 0.162
 1.15
 88 – 93
  
   
 Serra Grande (50 percent)
  
 
  2.27
 0.104
 0.24
 0.95
 0.116
 0.11
 90.9 – 95.9
 
   Total
 
 
 
 
 247.87
 0.054
 13.44
 597.73
 0.092
 54.92
 
 
  
  
 
  
  
 
  
 
  
 
  
  
 
  
 
  
 
  
  
 
  Ore Reserves include marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining.
 Probable Ore Reserves include Ore Reserves below infrastructure.See table below.
 Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown.
 Recovery factor varies according to ore type.
 Tons refers to a short ton, which is equivalent to 2000lbs avoirdupois.
 The Vaal Reef Ore Reserves include 37.29 million pounds of Uranium oxide by-products; this can not be accounted for by individual mine as Great  Noligwa, Kopanang and Moab Khotsong feed to a combination of plants.
 The Ore Reserve contains 34.9 million ounces of silver to be recovered as a by-product.
 0.45 million tons of sulfur will be recovered from processing the Ore Reserve.
 
  
  
 
  
  
 
  
 
  
 
  
  
 
  
 
  
 
  
  
 
   Rounding may result in computational differences.


The 2009 Probable Ore Reserves include Ore Reserves below infrastructure in the case of the following underground mines currently in production:
       Gold Content
 
 Mine
 Tons (millions)
 Grade (ounces/ton)
 (million ounces)
 
                                   
  Rounding may result in computational differences.


106
 
 
 
 
  Ore Reserves: Imperial
 
 
 
 
 At December 31, 2008
 
  
 
 
 
 
 Proven Ore Reserves
 (1)
 
 
 
 Probable Ore Reserves
 (1)(2)
 
 
 
 Metallurgical
 
 
  
 
 
 
 
 Tons
 (5)
 Grade
 Gold
 Content
 (1)
 Tons
 (5)
 Grade
 Gold
 Content
 (1)
 Recovery
 Factor
 
 
  
 
 
 
 
 (mill)
 (oz/ton)
 (mill oz)
 (mill)
 (oz/ton)
 (mill oz)
 percent
 
 
  Southern Africa
 
 
 
 
 
   Vaal River
 (6)
 
 
 
 
 
  Great Noligwa
  
 
  6.65
 0.210
 1.39
 5.54
 0.197
 1.09
 96.1
 
   Kopanang
  
 
  1.24
 0.267
 0.33
 16.61
 0.221
 3.67
 97.8
 
   Moab Khotsong
  
 
  2.05
 0.295
 0.60
 21.09
 0.319
 6.72
 96.7– 97.2
  
   Tau Lekoa
  
 
  0.66
 0.116
 0.08
 0.76
 0.116
 0.09
 97.4
 
   West Wits
 
 
 
 
 
   Mponeng
  
 
  2.72
 0.268
 0.73
 38.94
 0.315
 12.27
 98.2 – 98.7
  
   Savuka
  
 
  0.06
 0.185
 0.01
 3.90
 0.192
 0.75
 97.5
 
   TauTona
  
 
  0.45
 0.284
 0.13
 10.68
 0.276
 2.95
 97.8
 
   Surface
 
 
 
 
 
 
  Surface sources
  
 
  -
 -
 -
 120.77
 0.015
 1.83
 48 – 91
  
   Southern Africa
  
 
  
   Namibia
 
 
 
 
 
   Navachab
  
 
  7.94
 0.026
 0.21
 30.40
 0.037
 1.13
 72 – 94
  
   Continental Africa
  
 
  
   Ghana
 
 
 
 
 
   Iduapriem
  
 
  33.32
 0.040
 1.33
 25.50
 0.048
 1.23
 94.5 – 97
  
   Obuasi
  
 
  29.34
 0.219
 6.42
 14.66
 0.221
 3.25
 47 – 83
  
   Guinea
 
 
 
 
 
   Siguiri (85 percent)
  
 
  61.87
 0.016
 1.01
 73.97
 0.030
 2.24
 93 – 96
  
   Mali
 
 
 
 
 
   Morila (40 percent)
  
 
  6.06
 0.059
 0.36
 3.03
 0.033
 0.10
 89 – 91.5
  
   Sadiola (38 percent)
  
 
  2.68
 0.060
 0.16
 3.43
 0.075
 0.26
 78 – 93
  
   Yatela (40 percent)
  
 
  1.50
 0.026
 0.04
 0.88
 0.142
 0.12
 75 – 85
  
   Tanzania
 
 
 
 
 
   Geita
  
 
  -
 -
 -
 49.43
 0.097
 4.78
 51.5 – 92.8
  
   Australasia
 
 
 
 
 
   Australia
 
 
 
 
 
   Boddington (33.33 percent)
  
 
  62.75
 0.026
 1.65
 228.84
 0.022
 5.03
 80.4
 
   Sunrise Dam
  
 
  12.01
 0.062
 0.74
 7.61
 0.152
 1.16
 76 – 94
  
   North America
 
 
 
 
 
   United States of America
 
 
 
 
 
   Cripple Creek & Victor
  
 
  124.09
 0.027
 3.36
 61.40
 0.025
 1.56
 50 – 77
  
   South America
  
 
  
   Argentina
 
 
 
 
 
   Cerro Vanguardia (92.5 percent)
 
 
 
 
 65.5 – 94.0
  
   
  
 
  11.01
 0.041
 0.45
 13.54
 0.103
 1.39
 
  
 
   Brazil
 
 
 
 
 
   Brasil Mineraçáo
  
 
  6.30
 0.214
 1.35
 6.91
 0.176
 1.21
 88 – 93
  
   Serra Grande (50 percent)
  
 
  2.26
 0.116
 0.26
 0.85
 0.119
 0.10
 95.0
 
   Total
 
 
 
 
 374.97
 0.055
 20.61
 738.72
 0.072
 52.93
 
 
  
  
 
  
  
 
  
 
  
 
  
  
 
  
 
  
 
  
  
 
  Ore Reserves include marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining.
 Probable Ore Reserves include Ore Reserves below infrastructure. See table below.
 Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown.
 Recovery factor varies according to ore type.
 Tons refers to a short ton, which is equivalent to 2000lbs avoirdupois.
 The Vaal Reef Ore Reserves include 42.33 million pounds of Uranium by-products; this cannot be accounted for by individual mine as Great Noligwa,  Kopanang and Moab Khotsong feed to a combination of plants.
 The Ore Reserve contains 35.7 million ounces of silver to be recovered as a by-product.
 The Ore Reserve contains 639 million pounds of copper.
 0.44 million tons of sulfur will be recovered from processing the Ore Reserve.
 
  
  
 
  
  
 
  
 
  
 
  
  
 
  
 
  
 
  
  
 
   Rounding may result in computational differences.


The 2008 Probable Ore Reserves include Ore Reserves below infrastructure in the case of the following underground mines currently in production:
       Gold Content
 
 Mine
 Tons (millions)
 Grade (ounces/ton)
 (million ounces)
 
                                   
  Rounding may result in computational differences.


108
 
 
   
 Ore Reserves: Metric
 
  
 
 At December 31, 2009
 
 
  
 
 
 
   
 Proven Ore Reserves
 (1)
   
 Probable Ore Reserves
 (1)(2)
   
 Metallurgical
  
 
 
 
   
 Tonnes
 (6)
  
 Grade
 Gold
 
 Tonnes
 Grade
 Gold
 
 Recovery factor
  
 
 
 
  
 
  
  Content
 
  
 
 Content
 
  
 
  
   
 (mill)
 
 (g/t)
 (tonnes)
 
 (mill)
 (g/t)
 (tonnes)
 
 percent
 
 
 
 Southern Africa
 
   
  
   
   
   
  
  
 
 
 Vaal River
 (5)
   
  
   
   
   
  
  
 
 
  
   
  
   
  
   
  
 
 
  
   
  
   
  
   
  
 
 
  (2)
   
  
   
  
   
  (4)
 
 
 
  
   
  
   
  
   
  
 
 
 West Wits
 
   
  
   
   
   
  
  
 
 
  (2)
   
  
   
  
   
  (4)
 
 
 
  
   
  
   
  
   
  
 
 
  (2)
   
  
   
  
   
  
 
 
 Surface
 
   
  
  
  
  
 
 
 
  
   
  
   
  
   
  (4)
 
 
 
 Southern Africa
 
   
  
   
   
   
  
   
   
   
  
  
 
 
 Namibia
 
   
  
   
   
   
  
  
 
 
  
   
  
   
  
   
  (4)
 
 
 
 Continental Africa
 
   
  
   
   
   
  
   
   
   
  
  
 
 
 Democratic Republic of the Congo
 
   
  
  
  
  
 
 
 
  (3)
   
  
   
  
   
  
 
 
 Ghana
 
   
  
   
   
   
  
  
 
 
  
   
  
   
  
   
  (4)
 
 
 
  (2)
   
  
   
  
   
  (4)
 
 
 
 Guinea
 
   
  
  
  
  
 
 
 
  (3)
   
  
   
  
   
  (4)
 
 
 
 Mali
 
   
  
  
  
  
 
 
 
  (3)
   
  
   
  
   
  (4)
 
 
 
  (3)
   
  
   
  
   
  (4)
 
 
 
  (3)
   
  
   
  
   
  (4)
 
 
 
 Tanzania
 
   
  
   
   
   
  
  
 
 
  
   
  
   
  
   
  (4)
 
 
 
 Australasia
 
   
  
   
   
   
  
  
 
 
 Australia
 
 
  
  
   
   
   
  
  
 
 
  
   
  
   
  
   
  (4)
 
 
 
 North America
 
   
  
   
   
   
  
   
   
   
  
  
 
 
 United States of America
 
 
  
  
   
   
   
  
  
 
 
  
   
  
   
  
   
  (4)
 
 
 
 South America
 
   
  
   
   
   
  
   
   
   
  
  
 
 
 Argentina
 
   
  
   
   
   
  
  
 
 
 
 
 
  
  
   
   
   
  (4)
 
 
 
  (3)(7)
   
  
   
  
   
  
 
 
 Brazil
 
   
  
   
   
   
  
  
 
 
  (8)
   
  
   
  
   
  (4)
 
 
 
  (3)
   
  
   
  
   
  
 
 
 Total
 
   
  
   
  
   
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 (1) Ore Reserves include marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining.
 (2) Probable Ore Reserves include Ore Reserves below infrastructure.  See table below.
 (3) Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown.
 (4) Recovery factor varies according to ore type.
 (5) The Vaal Reef Ore Reserves include 16.9 thousand tonnes of Uranium by-products; this can not be accounted for by individual mine as Great Noligwa,
        Kopanang and Moab Khotsong feed to a combination of plants.
 (6) Tonnes refers to a metric tonne which is equivalent to 1000 kilograms.
 (7) The Ore Reserve contains 1175 tonnes of silver to be recovered as a by-product.
 (8) 0.41 million tonnes of sulfur will be recovered from processing the Ore Reserve.
  
 
  
 Rounding may result in computational differences.


The 2009 Probable Ore Reserves include Ore Reserves below infrastructure in the case of the following underground mines currently in production:
       Mine
 Tonnes  (millions)
 Grade  (grams/tonne)
 Gold Content  (tonnes)
 
                                   
  Rounding may result in computational differences.


110
 
 
 
 
  Ore Reserves: Metric
  
 
  At December 31, 2008
  
 
   
  
 
  Proven Ore Reserves
  
 
  Probable Ore Reserves
  
 
  Metallurgical
 
   
  
 
  Tonnes
  
  Grade
 Gold
  Tonnes
 Grade
 Gold
  Recovery factor
 
   
 
 
 
 
 
  
 Content
 
 
  
 Content
  
   
  
 
  (mill)
  (g/t)
 (tonnes)
  (mill)
 (g/t)
 (tonnes)
  percent
 
   Southern Africa
  
 
  
  
 
  
 
  
 
  
  
 
   Vaal River
 (5)
 
 
 
 
  
 
  
 
  
 
  
  
 
   Great Noligwa
  
 
  6.03
  7.19
 43.34
  5.02
  6.76
 33.95
  96.1
 
   Kopanang
  
 
  1.12
  9.16
 10.30
  15.07
  7.58
 114.22
  97.8
 
   Moab Khotsong
  
 
  1.86
  10.13
 18.80
  19.13
  10.93
 209.01
  96.7 – 97.2
  
   Tau Lekoa
  
 
  0.60
  3.98
 2.37
  0.69
  3.98
 2.75
  97.4
 
   West Wits
  
 
  
  
 
  
 
  
 
  
  
 
   Mponeng
  
 
  2.47
  9.17
 22.66
  35.32
  10.80
 381.49
  98.2 – 98.7
  
   Savuka
  
 
  0.06
  6.35
 0.36
  3.54
  6.60
 23.35
  97.5
 
   TauTona
  
 
  0.41
  9.75
 3.98
  9.69
  9.47
 91.72
  97.8
 
   Surface
  
 
  
  
  
  
  
 
  Surface sources
  
 
  -
  -
 -
  109.56
  0.52
 56.78
  48 – 91
  
   Southern Africa
  
 
  
  
 
  
 
  
 
  
  
 
  
 
  
 
  
  
 
   Namibia
  
 
  
  
 
  
 
  
 
  
  
 
   Navachab
  
 
  7.21
  0.89
 6.39
  27.58
  1.28
 35.19
  72 – 94
  
   Continental Africa
  
 
  
  
 
  
 
  
 
  
  
 
  
 
  
 
  
  
 
   Ghana
  
 
  
  
 
  
 
  
 
  
  
 
   Iduapriem
  
 
  30.23
  1.37
 41.32
  23.13
  1.65
 38.14
  94.5 – 97
  
   Obuasi
  
 
  26.62
  7.50
 199.57
  13.30
  7.59
 100.96
  47 – 83
  
   Guinea
  
 
  
  
  
  
  
   Siguiri (85 percent)
  
 
  56.13
  0.56
 31.48
  67.11
  1.04
 69.64
  93 – 96
  
   Mali
  
 
  
  
  
  
  
   Morila (40 percent)
  
 
  5.50
  2.02
 11.10
  2.75
  1.14
 3.13
  89 – 91.5
  
   Sadiola (38 percent)
  
 
  2.43
  2.06
 5.00
  3.11
  2.59
 8.04
  78 – 93
  
   Yatela (40 percent)
  
 
  1.36
  0.90
 1.23
  0.79
  4.86
 3.86
  75 – 85
  
   Tanzania
  
 
  
  
 
  
 
  
 
  
  
 
   Geita
  
 
  -
  -
 -
  44.84
  3.32
 148.75
  51.5 – 92.8
  
   Australasia
  
 
  
  
 
  
 
  
 
  
  
 
   Australia
  
 
  
  
 
  
 
  
 
  
  
 
   Boddington (33.33 percent)
  
 
  56.93
  0.90
 51.45
  207.60
  0.75
 156.50
  80.4
 
   Sunrise Dam
  
 
  10.89
  2.12
 23.09
  6.90
  5.23
 36.07
  76 – 94
  
   North America
  
 
  
  
 
  
 
  
 
  
  
 
  
 
  
 
  
  
 
   United States of America
  
 
  
  
 
  
 
  
 
  
  
 
   Cripple Creek & Victor
  
 
  112.57
  0.93
 104.60
  55.70
  0.87
 48.59
  50 – 77
  
   South America
  
 
  
  
 
  
 
  
 
  
  
 
  
 
  
 
  
  
 
   Argentina
  
 
  
  
 
  
 
  
 
  
  
 
   Cerro Vanguardia (92.5 percent)
  
 
  
  
 
  
 
  
 
  
  
 
   
  
 
  9.99
  1.39
 13.90
  12.29
  3.52
 43.24
  65.5 – 94.0
 
   Brazil
  
 
  
  
 
  
 
  
 
  
  
 
   Brasil Mineraçáo
  
 
  5.71
  7.33
 41.91
  6.27
  6.03
 37.77
  88 – 93
  
   Serra Grande (50 percent)
  
 
  2.05
  3.96
 8.12
  0.77
  4.07
 3.13
  95.0
 
   Total
  
 
  340.17
  1.88
 640.97
  670.16
  2.46
 1,646.28
  
  
 
   
  
 
  
  
 
  
 
  
 
  
  
 
  
 
  
 
  
  
 
  Ore Reserves include marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining.
 Probable Ore Reserves include Ore Reserves below infrastructure.  See table below.
 Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown.
 Recovery factor varies according to ore type.
 The Vaal Reef Ore Reserves include 19.2 thousand tonnes of Uranium by-products; this can not be accounted for by individual mine as Great Noligwa,  Kopanang and Moab Khotsong feed to a combination of plants.
 Tonnes refers to a metric tonne which is equivalent to 1000 kilograms.
 The Ore Reserve contains 1 109 tonnes of silver to be recovered as a by-product.
 The Ore Reserve contains 0.29 million tonnes of copper.
 0.44 million tonnes of sulfur will be recovered from processing the Ore Reserve.
 
   
 
 Rounding may result in computational differences.


The 2008 Probable Ore Reserves include Ore Reserves below infrastructure in the case of the following underground mines currently in production:
       Mine
 Tonnes  (millions)
 Grade  (grams/tonne)
 Gold Content  (tonnes)
 
                                   
  Rounding may result in computational differences.


112
 
 
 
 
  Stockpiles:  Imperial
  
 
  
 
 
 
  
  
 
  
 
 
 
  Stockpiles are previously mined ore scheduled for future process plant feed. The Proven and Probable Ore Reserves
 include the following stockpile material:
 
  
  
 
  
 
 
 
  Stockpiles
 
 
 
 
 At December 31, 2009
 
  
 
 
 Gold content
 
  
 
 
 
 Tons (million)
 Grade (ounces/ton)
 (million ounces)
 
  Southern Africa
 
 
 
 
 
  Vaal River
 
 
 
 
 
  Great Noligwa
  
 
  -
 -
 -
 
  Kopanang
  
 
  -
 -
 -
 
  Moab Khotsong
  
 
  -
 -
 -
 
  Tau Lekoa
  
 
  -
 -
 -
 
  West Wits
 
 
 
 
 
  Mponeng
  
 
  -
 -
 -
 
  Savuka
  
 
  -
 -
 -
 
  TauTona
  
 
  -
 -
 -
 
  Surface
 
 
 
 
 
  Vaal River Surface – SA MET
  
 
  119.33
 0.015
 1.74
 
  West Wits Surface - SA MET
  
 
  8.88
 0.017
 0.15
 
  Southern Africa
  
 
  
  Namibia
 
 
 
 
 
  Navachab
  
 
  7.58
 0.022
 0.17
 
  Continental Africa
  
 
  
  Ghana
 
 
 
 
 
  Iduapriem
  
 
  3.05
 0.032
 0.10
 
  Obuasi
  
 
  5.62
 0.058
 0.33
 
  Guinea
 
 
 
 
 
  Siguiri (85 percent)
  
 
  64.86
 0.016
 1.06
 
  Mali
 
 
 
 
 
  Morila (40 percent)
  
 
  7.40
 0.043
 0.32
 
  Sadiola (41 percent)
  
 
  4.52
 0.072
 0.33
 
  Yatela (40 percent)
  
 
  1.33
 0.033
 0.04
 
  Tanzania
 
 
 
 
 
  Geita
  
 
  2.95
 0.047
 0.14
 
  Australasia
 
 
 
 
 
  Australia
 
 
 
 
 
  Sunrise Dam
  
 
  7.43
 0.045
 0.34
 
  North America
 
 
 
 
 
  United Stated of America
 
 
 
 
 
  Cripple Creek & Victor
  
 
  -
 -
 -
 
  South America
  
 
  
  Argentina
 
 
 
 
 
  Cerro Vanguardia (92.5 percent)
  
 
  14.45
 0.018
 0.26
 
  Brazil
 
 
 
 
 
  Brasil Mineraçáo
  
 
  -
 -
 -
 
  Serra Grande (50 percent)
  
 
  0.05
 0.093
 0.01
 
  
  
 
  
 
 
 
 
 Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown.
 Centralized operations treating material on surface that was previously generated by several underground operations.
 Spent heap included in Ore Reserve.
 
 
 
 
 
 
 
 
  
 The rounding of figures and converting from metric to imperial units may result in minor computational discrepancies


113
 
 
 
 
  Stockpiles:  Imperial
  
 
  
 
 
 
  
  
 
  
 
 
 
  Stockpiles are previously mined ore scheduled for future process plant feed. The Proven and Probable Ore Reserves
 include the following stockpile material:
 
 
  Stockpiles
 
 
 
 
 At December 31, 2008
 
  
 
 
 Gold content
 
  
 
 
 
 Tons (million)
 Grade (ounces/ton)
 (million ounces)
 
  Southern Africa
 
 
 
 
 
  Vaal River
 
 
 
 
 
  Great Noligwa
  
 
  -
 -
 -
 
  Kopanang
  
 
  -
 -
 -
 
  Moab Khotsong
  
 
  -
 -
 -
 
  Tau Lekoa
  
 
  -
 -
 -
 
  West Wits
 
 
 
 
 
  Mponeng
  
 
  -
 -
 -
 
  Savuka
  
 
  -
 -
 -
 
  TauTona
  
 
  -
 -
 -
 
  Surface
 
 
 
 
 
  Vaal River Surface – SA MET
  
 
  127.813
 0.015
 1.909
 
  West Wits Surface - SA MET
  
 
  5.616
 0.008
 0.043
 
  Southern Africa
  
 
  
  Namibia
 
 
 
 
 
  Navachab
  
 
  6.224
 0.021
 0.131
 
  Continental Africa
  
 
  
  Ghana
 
 
 
 
 
  Iduapriem
  
 
  2.955
 0.034
 0.100
 
  Obuasi
  
 
  6.306
 0.053
 0.333
 
  Guinea
 
 
 
 
 
  Siguiri (85 percent)
  
 
  61.873
 0.016
 1.012
 
  Mali
 
 
 
 
 
  Morila (40 percent)
  
 
  8.200
 0.048
 0.394
 
  Sadiola (38 percent)
  
 
  2.670
 0.060
 0.160
 
  Yatela (40 percent)
  
 
  1.430
 0.020
 0.029
 
  Tanzania
 
 
 
 
 
  Geita
  
 
  8.312
 0.030
 0.251
 
  Australasia
 
 
 
 
 
  Australia
 
 
 
 
 
  Boddington (33.33 percent)
  
 
  0.693
 0.018
 0.013
 
  Sunrise Dam
  
 
  9.346
 0.049
 0.456
 
  North America
 
 
 
 
 
  United States of America
 
 
 
 
 
  Cripple Creek & Victor
  
 
  -
 -
 -
 
  South America
  
 
  
  Argentina
 
 
 
 
 
  Cerro Vanguardia (92.5 percent)
  
 
  15.954
 0.019
 0.302
 
  Brazil
 
 
 
 
 
  Brasil Mineraçáo
  
 
  -
 -
 -
 
  Serra Grande (50 percent)
  
 
  0.063
 0.139
 0.009
 
  
  
 
  
 
 
 
 
 Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown.
 Centralized operations treating material on surface that was previously generated by several underground operations.
 Spent heap included in Ore Reserve.
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 The rounding of figures and converting from metric to imperial units may result in minor computational discrepancies


114
 
 
 
 
  Stockpiles:  Metric
  
 
  
 
 
 
  
  
 
  
 
 
 
  Stockpiles are previously mined ore scheduled for future process plant feed. The Proven and Probable Ore Reserves
 include the following stockpile material:
 
  
  
 
  
 
 
 
  Stockpiles
 
 
 
 
 At December 31, 2009
 
  
 
 
 
 
 Tonnes (million) Grade (grams/tonne)
 Gold content
 (tonnes)
 
  Southern Africa
 
 
 
 
 
  Vaal River
 
 
 
 
 
  Great Noligwa
  
 
  -
 -
 -
 
  Kopanang
  
 
  -
 -
 -
 
  Moab Khotsong
  
 
  -
 -
 -
 
  Tau Lekoa
  
 
  -
 -
 -
 
  West Wits
 
 
 
 
 
  Mponeng
  
 
  -
 -
 -
 
  Savuka
  
 
  -
 -
 -
 
  TauTona
  
 
  -
 -
 -
 
  Surface
 
 
 
 
 
  Vaal River Surface - SA MET
  
 
  108.26
 0.50
 54.02
 
  West Wits Surface- SA MET
  
 
  8.06
 0.57
 4.57
 
  Southern Africa
  
 
  
  Namibia
 
 
 
 
 
  Navachab
  
 
  6.87
 0.77
 5.28
 
  Continental Africa
  
 
  
  Ghana
 
 
 
 
 
  Iduapriem
  
 
  2.77
 1.08
 2.99
 
  Obuasi
  
 
  5.10
 2.01
 10.23
 
  Guinea
 
 
 
 
 
  Siguiri (85 percent)
  
 
  58.84
 0.56
 32.83
 
  Mali
 
 
 
 
 
  Morila (40 percent)
  
 
  6.71
 1.49
 9.99
 
  Sadiola (41 percent)
  
 
  4.10
 2.47
 10.14
 
  Yatela (40 percent)
  
 
  1.20
 1.14
 1.37
 
  Tanzania
 
 
 
 
 
  Geita
  
 
  2.67
 1.63
 4.35
 
  Australasia
 
 
 
 
 
  Australia
 
 
 
 
 
  Sunrise Dam
  
 
  6.74
 1.55
 10.47
 
  North America
 
 
 
 
 
  United States of America
 
 
 
 
 
  Cripple Creek & Victor
  
 
  -
 -
 -
 
  South America
  
 
  
  Argentina
 
 
 
 
 
  Cerro Vanguardia (92.5 percent)
  
 
  13.11
 0.62
 8.14
 
  Brazil
 
 
 
 
 
  Brasil Mineraçáo
  
 
  -
 -
 -
 
  Serra Grande (50 percent)
  
 
  0.04
 3.2
 0.14
 
  
  
 
  
 
 
 
 
 Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown.
 Centralized operations treating material on surface that was previously generated by several underground operations.
 Spent heap included in Ore Reserve.
 
  
 
 
 
 
 
 
 
 The rounding of figures and converting from metric to imperial units may result in minor computational discrepancies.


115
 
 
 
 
  Stockpiles:  Metric
  
 
  
 
 
 
  
  
 
  
 
 
 
  Stockpiles are previously mined ore scheduled for future process plant feed. The Proven and Probable Ore Reserves
 include the following stockpile material:
 
  
  
 
  
 
 
 
  Stockpiles
 
 
 
 
 At December 31, 2008
 
  
 
 
 
 
 Tonnes (million) Grade (grams/tonne)
 Gold content
 (tonnes)
 
  Southern Africa
 
 
 
 
 
 
  Vaal River
 
 
 
 
 
 
  Great Noligwa
  
 
  -
 -
 -
 
  Kopanang
  
 
  -
 -
 -
 
  Moab Khotsong
  
 
  -
 -
 -
 
  Tau Lekoa
  
 
  -
 -
 -
 
  West Wits
 
 
 
 
 
 
  Mponeng
  
 
  -
 -
 -
 
  Savuka
  
 
  -
 -
 -
 
  TauTona
  
 
  -
 -
 -
 
  Surface
 
 
 
 
 
 
  Vaal River Surface - SA MET
  
 
  115.950
 0.51
 59.38
 
  West Wits Surface- SA MET
  
 
  5.094
 0.27
 1.35
 
  Southern Africa
  
 
  
 
  Namibia
 
 
 
 
 
 
  Navachab
  
 
  5.646
 0.72
 4.07
 
  Continental Africa
  
 
  
 
  Ghana
 
 
 
 
 
 
  Iduapriem
  
 
  2.681
 1.16
 3.11
 
  Obuasi
  
 
  5.720
 1.81
 10.36
 
  Guinea
 
 
 
 
 
 
  Siguiri (85 percent)
  
 
  56.130
 0.56
 31.48
 
  Mali
 
 
 
 
 
 
  Morila (40 percent)
  
 
  7.439
 1.65
 12.25
 
  Sadiola (38 percent)
  
 
  2.422
 2.06
 4.99
 
  Yatela (40 percent)
  
 
  1.297
 0.70
 0.91
 
  Tanzania
 
 
 
 
 
 
  Geita
  
 
  7.541
 1.03
 7.80
 
  Australasia
 
 
 
 
 
 
  Australia
 
 
 
 
 
 
  Boddington (33.33 percent)
  
 
  0.628
 0.63
 0.39
 
  Sunrise Dam
  
 
  8.478
 1.67
 14.2
 
  North America
 
 
 
 
 
 
  United States of America
 
 
 
 
 
 
  Cripple Creek & Victor
  
 
  -
 -
 -
 
  South America
  
 
  
 
  Argentina
 
 
 
 
 
 
  Cerro Vanguardia (92.5 percent)
  
 
  14.473
 0.65
 9.39
 
  Brazil
 
 
 
 
 
 
  Brasil Mineraçáo
  
 
  -
 -
 -
 
  Serra Grande (50 percent)
  
 
  0.057
 4.76
 0.27
 
  
  
 
  
 
 
 
 
  
 Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown.
 
  
 Centralized operations treating material on surface that was previously generated by several underground operations.
 
  
 Spent heap included in Ore Reserve.
 
  
 
 
 
 
 
 
 
 
 The rounding of figures and converting from metric to imperial units may result in minor computational discrepancies.


Drill hole spacing: Imperial
 
   
 
 
   
   
     
  Drill Hole Spacings
 
 
  Proven Ore Reserves
 Probable Ore Reserves
 
 
 Southern Africa
 
   
  Ore body opened up, developed and sampled on a 7 to 10 foot spacing on raise lines and on a 16 x 16 grid thereafter
 From a 131 x 131 foot spacing up to 3281 x 3281 foot spacing
  
  Variable sampling strategies: Belt samplers, cross stream residue samplers and bulk sampling campaigns
 Variable sampling strategies: Belt samplers, cross stream residue samplers
  
 Southern Africa
 
   
 Namibia
 
   
     
 Continental Africa
 
   
 Ghana
 
 
 
 
     
     
     
 Guinea
 
   
     
 Mali
 
   
     
     
     
 Tanzania
 
   
     
 Australasia
 
 
 
 
 Australia
 
 
 
 
   66 x 66 feet, 131 x 131 feet, 164 x 164 feet
  
 North America
 
   
 United States of America
 
 
 
 
     
 South America
 
   
 Argentina
 
 
 
 
     
 Brazil
 
 
 
 
  66 x 66 feet, 82 x 82 feet. Drilling pattern of 197 x 66 feet for Cuiabá Expansion Project.


Drill hole spacing: Metric
 
   
 
 
   
   
     
  Drill Hole Spacings
 
 
  Proven Ore Reserves
 Probable Ore Reserves
 
 
 Southern Africa
 
   
  Ore body opened up, developed and sampled on a 2 to 3 meter spacing on raise lines and on a 5 x 5 grid thereafter
 From a 40 x 40 meter spacing up to 1000 x 1000 meter spacing
  
  Variable sampling strategies: Belt samplers, cross stream residue samplers and bulk sampling campaigns
 Variable sampling strategies: Belt samplers, cross stream residue samplers
  
 Southern Africa
 
   
 Namibia
 
   
     
 Continental Africa
 
   
 Ghana
 
   
     
     
     
 Guinea
 
   
     
 Mali
 
   
     
     
     
 Tanzania
 
   
     
 Australasia
 
   
 Australia
 
   
     
 North America
 
   
 United States of America
 
   
     
 South America
 
   
 Argentina
 
   
     
 Brazil
 
   
  20 x 20 meter, 25 x 25 meter. Drilling pattern of 60 x 20 for Cuiabá Expansion Project.


DEVELOPMENT
   Project ONE
 
 AngloGold Ashanti’s Project ONE program is the holistic transformation initiative that underpins the  effort to reach an ambitious set of strategic safety, productivity, environmental and financial goals. AngloGold Ashanti has set a five-year objective  of  reducing  accident  rates  by  70 percent;  increasing  overall  productivity  by  30 percent;  cutting  reportable environmental  incidents  by  60 percent;  increasing  production  by  20 percent;  achieving  a  25 percent  real  reduction  in costs;  and,  crucially,  achieving  a  return  of  at  least  15 percent  on  capital  employed  through  the  economic  cycle.  By achieving  these  aims,  the  company  will  carve  for  itself  a  unique  competitive  position  in  the  mining  industry  with  the management capacity and cash flow to realise its long-term vision of being the world’s leading mining company.
 
  
  The System for People, a managerial effectiveness model is focused on people as the catalysts and drivers of change,  and  is  designed  to  bring  about  effective  working  relationships  based  on  trust  and  a  culture  of accountability at all levels.
  The Business Process Framework, a scientifically rigorous model focused on both short- and long-term planning and  execution  of  work.  This  framework  delivers  the  business  expectations  and  operational  targets  set  by  the organisation while incorporating possibilities for continuous improvements.
 The primary  focus of  Project ONE  is to introduce a common business process across AngloGold  Ashanti,  from its 21 mining  operations  across  10  countries,  to  its  myriad  exploration  sites  across  4  continents  and  its  corporate  hubs  in South Africa, the United States and Australia. The  program was launched in August 2008 under the direction of Tony O’Neill,  Executive  Vice  President  –  Business  and  Technical  Development,  and  is  now  being  implemented  at  all operations.
 
 The  benefit  of  introducing  this  common  business  process  lies  in  establishing  a  disciplined  and  uniform  operating methodology  in  order  to  minimise  waste  and  variation.  This,  in  turn,  will  ensure  each  operation  and  every  service function operates consistently at their highest performance and efficiency levels.
 
 The philosophy is simple in theory and execution. Volatility  and variation in any business process creates uncertainty, whether  in  determining  mining  volumes  and  plant  feed  or  in  optimising  maintenance  schedules  and  supply-chain management.  The  same  holds  for  the  management  of  working  relationships.  It  is  this  variation  and  volatility  which skews outcomes, and which can be reduced by implementing rigorous planning, scheduling, resourcing and execution processes, and most importantly, by clarifying roles and accountabilities at each level.
 
 The merits of this approach are  already  in evidence at the two  pilot sites for the  project: the  Mponeng  plant  in South Africa  and  the  Geita  mine  in  Tanzania.  The  business  improvement  initiative  was  initiated  at  the  Mponeng  plant  in October 2008, and contributed to a 15 percent increase in throughput over the historical average. This is an especially significant result at the Mponeng plant, long regarded as the flagship operation within the group.


At Geita, where Project  ONE  was  launched  in  February  2009,  immediate  results  from  both  the  System  for  People  and  the 
  Business Process Framework interventions have been even more striking. For too long, Geita’s performance suffered 
 because of continual equipment breakdowns, poor plant and fleet availability, an overall lack of mining flexibility and a 
 skills deficit in  some  key  areas.  Graham  Ehm,  formerly  the  Executive  Vice  President  of  our  Australian  operations  and  one 
  of  our most experienced open pit-mine operators, was appointed in May 2009 to lead the change at Geita in partnership with Richard Duffy, Executive Vice Presiden: Continental Africa and his team. Graham was able to build on solid preparatory work done before his appointment and also to take decisive action to effect the improvements seen by the end of 2009. The remarkable improvements achieved are emblematic of Project ONE’s potential.
 
 Through careful analysis of the relevant aspects of Geita’s operations – from human resources, drilling and blasting, to plant availability and fleet maintenance – the flaws in the overall operating methodology became apparent. And so did the remedies. There are powerful anecdotes that demonstrate the resulting change.
 
 A dispassionate look at the mine’s drill and blast performance showed AngloGold Ashanti did not possess the right level of  expertise  in  Tanzania  to  ensure  anything  but  a  hand-to-mouth  existence  in  broken  stocks.  Soon  after  appointing specialist drill-and-blast contractors in May, stocks of broken ore rose to more than three weeks worth and provided the necessary mining flexibility we needed. This had positive reverberations throughout the rest of the operation.
 
 The company’s study at Geita also showed a critical deficiency in maintenance. Our teams were running flat-out to deal with  emergency  breakdowns,  which  were  occurring  with  alarming  frequency  due  to  a  lack  of  scheduled  maintenance and general backlog on basic upkeep of equipment of all types. Identifying this problem enabled Geita’s management to appoint  a  rapid-response  team  to  address  the  ongoing  emergency  issues,  while  another  group  was  put  in  place  to address the maintenance backlog. To this end, work orders for recurring jobs have been designed to ensure the right person is appointed and that they have the correct resources available at the right time to efficiently complete their work in  the  time  allotted.  This  requires  active  participation  by  the  management  team  and  each  level  of  the  workforce  in frequent planning sessions where expectations are set, tasks assigned and accountability apportioned.


The Geita team has focused  on  limiting  volatility  and  variance,  and  smoothing  out  the  peaks  and  troughs  in  each  of  the 
  operating processes. By reducing volatility and increasing operating certainty through detailed planning, the average 
 throughput can  be  enhanced  and  efficiency  increased  with  only  nominal  capital  investment.  In  short,  by  ensuring  that  the 
  right people are in the right place, to do the right job at the right time, productivity has been bolstered in a meaningful way. By combining  the  technical  skills  in  the  business  with  the  equally  important  skills  of  organisational  design  and  human resource management, AngloGold Ashanti is beginning to realise Geita’s potential. Plant  availability  and  throughput  are  significantly  higher  and  disruptive  weekly  maintenance  shutdowns  have  been replaced  by  well-resourced  monthly  shutdowns;  the  increase  in  broken  stocks  has  greatly  improved  flexibility;  bench designs are improved and in-pit road designs have been greatly enhanced which has allowed trucks to achieve better cycle times; fleet availability is also markedly better, which has significant consequences not only for efficiency, but also for fleet replacement. The confluence of these factors will help mining teams to access higher grade areas more quickly than originally anticipated and ultimately will bolster production further and lower costs. The improvements are not independent of other management interventions, but the introduction of consistent business processes will ensure that improvements are sustained and extended. Following the success of the pilot projects, the business improvement intervention was extended to the Siguiri plant in Guinea, Sunrise Dam in Australia, the Savuka plant in South Africa and the AngloGold Ashanti Brazilian operations in Nova Lima. Operational improvements are expected at these sites during the course of 2010. Implementation will have begun at the remaining sites by mid 2011.COMPETITIONAs gold mining is a mature and regulated industry, and very significant volumes of gold and gold derivatives trade in the world markets independent of gold mine supply, AngloGold Ashanti does not consider that competition for sales plays any role in its operations as a gold producer.  However, gold producers do compete against each other for acquisition of exploration opportunities and human resources.INTELLECTUAL PROPERTYAngloGold Ashanti, as a group, is not dependent on intellectual property for the conduct of its business as a whole.


SUSTAINABLE DEVELOPMENT – A SUMMARYAngloGold  Ashanti’s  Sustainability  Review  2009  provides  a  comprehensive  account  of  the  company’s  sustainability performance in 2009. In this section, AngloGold Ashanti highlights the key areas of its reporting for 2009, summarizes company performance against these issues during the year and details its sustainability commitments for 2010. Reporting on issues that matterIn 2009, AngloGold Ashanti undertook an extensive review of the way in which it compiles its sustainability report and made several changes to the reporting format. The company wanted to ensure that its reporting remained aligned with leading  practice,  that  it  was  focused  and  accessible  to  users  and  presented  a  balanced  and  accurate  account  of company  commitments  and  performance.  As  in  previous  years,  AngloGold  Ashanti  has  reported  at  an  A+  application level  against  the  Global  Reporting  Initiative  (GRI)  reporting  standard  and  has  complied  fully  with  the  reporting requirements of the International Council on Mining and Metals (ICMM) Sustainable Development Framework. As  part  of  the  revised  approach  and  in  order  to  determine  the  most  important  issues  for  sustainability  reporting, AngloGold Ashanti has implemented a formal process for assessing the material sustainability issues for the business. In  line  with  sustainability  reporting  standards  and  leading  practice,  this  process  incorporates  stakeholder  input  and  is aligned with the group’s own risk management methodology. As a result of a materiality assessment, AngloGold Ashanti identified the following group-level issues for sustainability reporting:
  • Safety  and  health:     Resource custodianship:     Human rights:   Delivering  economic  benefits:     Capacity  building,  transformation  and  engagement:     Closure planning and provision:   The  management  of  sustainability  issues  in  AngloGold  Ashanti  is  the  responsibility  of  the  Executive  Vice  President: Business  Sustainability.  The  position  was  created  on  AngloGold  Ashanti’s  Executive  Committee  in  2008  and  reports directly to the Chief Executive Officer to ensure alignment with business strategy. Oversight at board level is provided by the board committee dealing with sustainable development. The committee meets quarterly to review sustainability performance  and  is  independently  chaired.  The  chairman  of  the  Audit  and  Corporate  Governance  Committee  was appointed  to  the  Safety,  Health  and  Sustainable  Development  Committee  in  2009  to  ensure  integration  between  the Audit and Corporate Governance Committee and the company’s oversight of social and environmental performance. AngloGold  Ashanti’s  Sustainability  Review  2009  details  management’s  approach  in  each  area  of  sustainability performance.
  A Supplementary Report provides a comprehensive response to reporting indicators in line with GRI. The section below presents performance in 2009 against the sustainability commitments made by the company for the year, and details its sustainability commitments for 2010 and beyond.


Safety and health – employees and communities Performance
 2008 – Commitments
 2009 – Delivery
  The elimination of fatal accidents is AngloGold Ashanti’s most important business goal and the company continues to work towards this objective. AngloGold Ashanti acknowledges that there is still much work to do in this area and records with sadness the loss of 16 of its colleagues in 2009.
 20 percent reduction in all injury rates
 In 2009 the lost time injury frequency rate (LTIFR) improved by 10 percent over the previous year and the medical treatment injury frequency rate (MTIFR) showed a 19 percent improvement. The MTIFR reflects all injuries, including lost time injuries but excludes fatalities.
 Complete development of the Safety Transformation Blueprint
 The Safety Transformation Blueprint was initially released in May 2009 and will be reviewed every six months. Launch of the Safety Transformation project is planned for April 2010.
 Progress towards the industry milestone of no new cases of silicosis among previously unexposed employees in South Africa (2008 onwards) after December 2013
 AngloGold Ashanti has seen a steady decline in the number of new cases of silicosis reported, with the incidence in 2009 (among all South African employees) at 3.5 per 1,000 compared with 4 per 1,000 in 2008 and 7 per 1,000 in 2007. There is, however, still much work to do in this area as performance in 2009 fell short of expectation.
 No deterioration in hearing greater than 10 percent amongst occupationally exposed individuals in South African operations
 This industry milestone has not been achieved. The incidence of noise-induced hearing loss (NIHL) in South Africa has decreased from 2.6 per 1,000 employees in 2008 to 2.36 cases per 1,000 in 2009. In total 79 new cases of NIHL were compensated, compared with 88 in 2008
 (1)
  hearing conservation program and has so far silenced 80 percent of identified sources of noise.
 Sustain the 80 percent uptake of voluntary counseling and testing (VCT) for HIV/AIDS at all business units in South Africa
 The total number of VCT encounters for 2009 (assuming single annual testing) was 87 percent of the workforce. Much of the continued success can be attributed to leadership and engagement of both senior management and organized labor at the mines, as well as the continued involvement and work of peer educators and counselors.
 Increase the ratio of employees in South Africa on anti-retroviral therapy (ART) to 90 percent of those for whom it is indicated clinically
 AngloGold Ashanti estimates that 7.5 percent of employees at its South African operations require ART. As at December 2009, there were 2,216 employees receiving ART. This represents approximately 87 percent of those estimated to require ART in the region. Non-adherence to drug regimens and exits from the ART program remain problematic and require greater focus alongside encouraging new registrations.
 1.  The number of NIHL cases in 2008 has been restated from 77 to 88; a classification error was made in respect of the 2008 data.


Safety and health – employees and communities Commitments 2010 and beyond
 Commitments
 Context
 Achieving a further 20 percent reduction in all injury rates in 2010, with the long-term objective of operating an accident-free business
 Safety is AngloGold Ashanti’s most important business consideration. The company focused on creating the safest possible working environment for its employees, a commitment which is reflected in the company’s safety goals.
 Begin implementation of the Transformation project
 AngloGold Ashanti plans to launch this project in April 2010, with the objective of achieving a quantum improvement in safety performance.
 Elimination of new cases of silicosis among previously unexposed employees at South African operations by 2013
 Silicosis remains the most significant occupational health issue at the South African operations and the company is placing considerable focus on reaching the industry target of eliminating the disease among previously unexposed individuals by 2013.
 Intensity hearing conservation programs continue to silence to acceptable levels all identified noisy equipment in order to achieve the industry milestone of no deterioration in hearing greater than 10 percent amongst occupationally exposed individuals at South African operations
 NIHL remains a significant challenge at the South African operations, particularly in light of the increase in NIHL incidence in 2010, despite hearing conservation programs in place. AngloGold Ashanti will be increasing the frequency of sampling data on exposure to noise in 2010 and will be progressing the silencing of all identified sources of noise. The use of Hilti electric rock drills that have a lower noise level than conventional drills is being piloted at two of the South African operations.
 Maintain a rate of 80 percent of South African employees attending VCT during 2010, excluding current wellness clinic attendees
 In the absence of accurate measurements of prevalence of HIV/AIDS, targets in this area focus on VCT and wellness. True measurements of prevalence are currently unavailable owing to the anonymous testing system in place. With the agreement of employees, the implementation of single testing could be used to calculate prevalence and enable the company to combat this disease more successfully. Once current prevalence can be determined (a two-year period would be required following agreement to single testing), targets for prevalence can be set.
 Reduce by 50 percent the number of avoidable drop-outs from wellness programs in 2010
 Achievement of new clinic enrolment targets accompanied by targets to reduce avoidable dropouts by 50 percent will result in improvements in wellness clinic attendance and will assist the company’s efforts to combat HIV/AIDS through wellness programs.
 Reduce occupational tuberculosis (TB) incidence to: •  3 percent of all South
 African employees by 2010;
 
 African employees by 2015;
 
   Successfully cure 85 percent of new TB cases in 2010
 In the South African mining industry TB is associated with HIV/AIDS and with the incidence of silicosis. Incidence of occupational TB rose in 2009 despite significantly improved dust control. AngloGold Ashanti therefore concludes that HIV prevalence rose even higher. The company’s long-term objective is to reduce the incidence of all TB to approximately the level of the background community. While HIV remains at high levels, it is a challenge to control TB particularly as some 10-15 percent of all HIV positive people will develop TB each year. Combating HIV will assist AngloGold Ashanti in controlling the level of TB in its workforce.


Environment, community and human rights Performance
 2008 – Commitments
 2009 – Delivery
 Develop quantitative performance targets for energy and water during 2009
 AngloGold Ashanti remains committed to group energy targets to improve energy efficiency per ounce of gold produced by 15 percent in the short to medium term and to reduce greenhouse gas emissions per ounce of gold produced by 30 percent in the longer term.  With the more difficult mining conditions encountered as mines mature, reducing energy consumption further is challenging. Developing site-level energy performance objectives will only be completed in 2012. In the interim, efforts to reduce energy consumption continue, particularly at the energy-intensive South African operations (41 percent of total energy consumed in 2009). While electricity consumption at these operations has reduced by 7.3 percent in the last two years and electricity consumption per tonne of rock treated has fallen by 11.5 percent in the same period, electricity consumption per unit of gold produced has increased by 20.6 percent as a consequence of more difficult mining conditions. Decreasing water consumption is equally challenging. AngloGold Ashanti continues its efforts to improve water consumption efficiency and water management at all sites.
 Address key opportunities and risks identified by the 2008/9 climate change study
 This high level study was completed during 2009 and raised awareness of the implications of climate change throughout AngloGold Ashanti. A project to develop carbon credits under the UN Clean Development Mechanism (CDM) has already been initiated, as recommended by the study.
 Implement an integrated incident notification and reporting system to include community incidents
 An integrated incident classification and reporting standard was implemented as planned in 2009. New and clearer environmental and community incident classification criteria have been adopted.
 Roll out new policies and practices and train security personnel in the Voluntary Principles on Security and Human Rights (Voluntary Principles)
 The implementation of the new global security framework started in 2009. It is a three-year plan and good progress was made in key areas in 2009, particularly in the roll-out of Voluntary Principles procedures and best practice and the in training of AngloGold Ashanti and third party security service providers. Self-audits were undertaken at the end of 2009 to identify gaps and mitigation strategies.
 Maintain certification to the ISO 14001 environmental management system and incorporate community aspects (by 2011) and implement environment and community management standards
 ISO 14001 certification was maintained at all operations. In 2009, progress was made on development of management standards that incorporate community aspects. This work will be completed by 2012, rather than 2011 as originally scheduled. Standards on air quality, chemicals, closure and rehabilitation, and use, waste and water have been approved and implementation has begun.
 Conduct a Corporate Environmental Review Program biennially
 The program was conducted at operations in Australia, Namibia, South Africa, Tanzania and the US. The scope of the review was extended during the year to include community aspects.
 Conduct a review of closure planning practices in 2009
 A closure and rehabilitation management standard was introduced. It was externally reviewed against international best practice before finalization. Each mine’s closure plan was reviewed against the standard in order to identify gaps in implementation.
 Establish a government relations function and embed it into the company’s decision-making processes
 The function has been established. In 2009, significant work was undertaken to put systems in place, including the generation of quarterly reports on government relations and political risk which are reviewed by the Executive Committee.
 Develop and pilot a globally applicable model for government engagement practice
 In 2009 a model was developed and a pilot engagement exercise initiated in South Africa. This will be continued in 2010.
 In South Africa, participating in the Mining Charter review and influencing outcomes
 In South Africa, the company, through the industry representative body, the Chamber of Mines, is actively involved in the Mining Charter review process. AngloGold Ashanti’s Chief Executive Officer, Mark Cutifani, has been elected Vice President of the Chamber of Mines of South Africa and will, by virtue of this position, play an active role in the review process


Environment, community and human rights Commitments 2010 and beyond
 Commitments
 Context
 Continue work to improve water and energy performance, including through the development of site-level objectives
 To assist in developing site-level objectives and action plans by 2012, energy and water maps will be refined for each operation during 2010 and 2011, detailing the sources and quantities of energy and water used in each process within the operation. The energy and water benefits from each business improvement initiative will also be quantified.
 Audit the global energy and water security position for all operations
 The site-by-site results of a high-level audit of global energy and water security to be undertaken in 2010, including a review of expected costs, will be included in post-2010 strategy development.
 Continue to address key opportunities and risks identified by the 2008/2009 climate change study
 Life-of-mine climate change risks will be specified in more practical detail for each operation during 2010 and 2011, starting with those at greatest risk. Planning to address these risks has begun. On completion of the pilot CDM project which has been initiated, the value of further CDM projects will then be assessed.
 Zero violations of the Voluntary Principles 2010
 In 2009 there were four allegations of potential violations which were investigated.  All proved to be non-violations by the company. One incident was reported which proved to be a violation by a joint venture partner. Appropriate action was taken and the matter was resolved.
 Develop a standard approach for all contracts for government- provided security
 A full review of all contracts with private and public security providers globally is planned for 2010, with the aim of implementing a template for all government provided security contracts which incorporates best practice.
 Incorporate community aspects into each operation’s ISO 14001 management system by 2012
 ISO 14001 management systems are in place at each operation. Incorporation of community aspects into a formal management system increases the rigor with which these aspects of the business are managed.
 Final approval or development of management standards and associated guidance material that govern how the company interacts with communities and the environment
 Site personnel need to be aware of their performance expectations and the standards to which they will be held. Communities, governments and other stakeholders need to know what standard to expect of the company.
 Work on findings of review conducted in 2009 to address any site-level deficiencies in closure plans and ensure alignment with company management standard by 2011
  Continue to embed the government relations function into decision-making processes, including through development of a management standard in this area, and through capacity development
 Proactive and planned government engagement needs to be factored into business decisions through ongoing internal consultation. At a regional level, government relations are carried out by AngloGold Ashanti’s country managers.
 Roll-out pilot government engagement strategy model in South Africa and in a minimum of two other jurisdictions in 2010
 Lessons learnt from the experience of developing and piloting a government engagement strategy in South Africa are to be applied to other jurisdictions.
 In South Africa, participate in the Mining Charter review
 AngloGold Ashanti will seek to influence others in the industry and the authorities to ensure an outcome that enhances socio-economic transformation in the context of a globally-competitive industry.


People Performance
 2008 – Commitments
 2009 – Delivery
 Finalize the design of a human resources model called the System for People
 The design of the System for People has been finalized and is detailed in a company-wide policy document. The system is being implemented through line management, with each manager taking accountability for implementation within his or her respective area.
 Entrench company values through employee participation in determining behaviors which support values
 As a key component of the System for People, a pilot study for a company-wide survey of values was completed at the corporate office and preparations were made for roll-out of the survey globally in January 2010.
 Centralize human resource (HR) policy development to ensure alignment and focus on delivering and executing AngloGold Ashanti‘s strategy
 The centralization of policy development is being dealt with largely within the context of the System for People. In the current reporting period, the focus was on the development and implementation of the personal effectiveness system throughout the company, with special focus at management levels.
 Delivering and executing a transformation model that ensures our license to mine is maintained across the globe
 The company has put in place mechanisms to deliver on its legal obligations with respect to its licenses to mine at all its operations, including South Africa, where the company in compliance with the requirements of the Mining Charter, and in Continental Africa, where the company has in place plans to reduce the number of expatriates and replace them with suitably qualified local employees over a period of time.
 
 People Commitments 2010 and beyond
 Commitments
 Context
 Continue with the roll out of the System for People, including the global values survey
 The System for People will continue to be rolled out across the company during 2010 and 2011. This will result in the organization being more appropriately designed to execute its business strategy, and to have the necessary capability and working relationships required to get work done effectively and efficiently in an environment of mutual trust.
 Review the wage negotiations strategy in West Africa and develop a model for conducting wage negotiations which can be applied throughout the company’s Continental African operations
 Development work on an appropriate labor relations and collective bargaining system for the Continental Africa operations is ongoing with a particular focus on Ghana and Guinea. The immediate aim is to move towards a regularized bargaining process in Guinea, significantly reducing the potential for labor disruption and protracted wage settlements.
 Standardize, to the extent possible, the conditions of employment of senior managers to facilitate mobility within the company.
 Steps to standardize the conditions of employment across the company to attract and retain employees in order to facilitate their movement across the operations are at an advanced stage. An independent consultant was contracted to assist in this regard with final recommendations to be tabled by the company during the first quarter of 2010.
  Corporate governance statement“The  critical  issue  is  that  the  stakeholder,  having  read  the  report,  should  be  able  to  come  to  the  conclusion  that  the company has made its money as a responsible corporate citizen. It is only in this way that directors will be able to build the  trust  and  confidence  in  a  company  by  the  stakeholders,  which  is  so  necessary  for  the  sustainability  and  future prospects of the company” Mervyn King with Teodorina Lessidrenska; Transient Caretakers. AngloGold  Ashanti  is  committed  to  the  highest  standards  of  corporate  governance  and  believes  that  good  corporate governance  must  be  guided  by  the  principles  of  sustainable  business.  In  the  21st  Century,  profit  maximization  has ceased to be the overriding purpose of the modern company, making it imperative that the interests of all stakeholders are taken into consideration in the governance of the company.


This principle is aptly echoed in AngloGold Ashanti’s vision statement: We are focused on delivering results and we do what we say we will do. We accept responsibility and hold ourselves accountable for our work, our behavior, our ethics and our actions. We aim to deliver high performance outcomes and undertake to deliver on our commitments to our colleagues, business and social partners, and our investors.” Corporate governance achievements during 2009 and targets for 2010 Significant corporate governance milestones achieved by AngloGold Ashanti during the year as well as targets for 2010 are detailed below: External Achievements in 2009  Internal Improvements   Targets for 2010
 Overall winner of the Southern Africa Institute of Chartered Secretaries and Administrators and the JSE Limited’s Annual Report Award for the second consecutive year. 
  Overall winner of the Human Capital Reporting, a new category of award introduced by the Southern Africa Institute of Chartered Secretaries and Administrators and the JSE Limited’s Annual Report Award. 
  Excellent Ranking and third place in the Ernst and Young Excellence in Sustainability Reporting 2009. Runner-Up in the Best Sustainability Report: Extractive Industries Award by the Association of Certified Chartered Accountants. 
  Nominated by the South African National Energy Association for energy efficiency, the first time any company has been nominated for this 
  award. Received the Energy Efficiency Excellence Award for 2009 from the South African Association of Energy Efficiency.
  Selected as the best industrial participant among the Energy Accord signatories at the ETA awards.
 A Group Compliance Policy Statement was developed and approved by the Board of Directors in July 2009. A revised Delegation of Authority Policy was approved by the Board of Directors in July 2009.
  A comprehensive Group Risk and Opportunity Report and Framework were developed to improve risk management. Implementation of the framework commenced during the year and is ongoing.  
  Rollout of Project ONE, a company-wide business improvement initiative. A Safety Transformation initiative under Project ONE initiated to improve safety among the workforce. 
  A values survey piloted at the corporate office to determine the behavior that employees expect to prevail within the organization. 
  A new performance appraisal system was initiated to better assess performance and improve career development of individual staff members. 
  A Sustainability Steering Committee was established to enhance sustainability reporting.
 Update board charter to incorporate new requirements of the Companies Act 71 of 2008 and the recommendations of the King III Code.Update the board induction pack to include developments in legislation and corporate governance.
  Update the terms of reference of the Audit and Corporate Governance Committee to include new requirements of the Companies Act 71 of 2008 and the new requirements of the King III Code. 
  Complete the process of restructuring the board and certain committees, including succession planning to achieve a better balance in skills and knowledge and improve board performance. 
  Update board and committee annual appraisal forms to ensure that key performance indicators are in line with the company’s new strategy. This is expected to improve assessment outcomes and board delivery. 
  Review risk management and information technology governance by putting in place improved structures to oversee these functions in line with recommendations of King III. Continue with initiatives being undertaken under Project ONE.
 
 Corporate governance is constantly evolving and AngloGold Ashanti focuses on continuously seeking ways to improve on its corporate governance standards. Below are highlights of some of the major corporate governance improvements undertaken during 2009.
  During  2009,  presentations  were  made  to  the  board  of  directors  on  developments  in  corporate  governance  in  South Africa, with specific reference to the new Companies Act 71 of 2008 and the King III Code on Corporate Governance. The Audit and Corporate Governance Committee was briefed on developments in the area of financial reporting.


The  company  continued  with  its  corporate  restructuring  to  improve  operational  and  management  systems  and accountability.  In 2009 the  company’s African operations were separated into the Southern Africa division  comprising South  Africa  and  Namibia,  and  Continental  Africa  comprising  the  mines  in  Ghana,  Guinea,  Mali  and  Tanzania. Leadership of the Geita mine in Tanzania was strengthened and a business improvement program implemented, which achieved tangible results in the improved performance of that operation. At the Obuasi mine in Ghana, the turnaround strategy which begun in 2008 continued in 2009 with positive outcomes achieved. To  enhance  work  practices,  and  to  enable  the  company  to  reach  its  full  potential,  a  company-wide  business improvement  program  code  named  Project  ONE,  the  biggest  ever  undertaken  by  AngloGold  Ashanti,  was  initiated. Project ONE seeks to create a  culture that  promotes  improvement and value, while creating a work environment that empowers  individuals  to  make  a  difference.  The  initiative  is  based  on  two  core  change  processes  –  the  System  for People (SP) and the Business Process Framework (BPF), the focus  of which is to  build  appropriate capacities of the company’s human resources and commercial/technical systems. The SP, one of the key components of Project ONE, is designed to bring about effective working relationships based on trust  and  a  sustainable  culture  of  accountability  across  all  levels  of  the  organization  and  was  developed  in  2008.  SP corresponds with AngloGold Ashanti’s vision, values and mission statement, “People are the Business ... Our Business is People”.
  In  line  with  the  company’s  promise  to  annually  review  its  mission,  vision  and  values  and  within  the  context  of  SP,  a values  survey  was  initiated  during  the  year.  This  study  was  aimed  at  establishing  a  deeper  understanding  of  the organizational  values  and  sets  out  to  determine  the  behaviors  that  should  characterize  relations  between  individuals and promote cooperation  and  team work. A pilot survey was completed at the  corporate office and  is  expected  to be rolled out globally in the first half of 2010. 
  In  the  context  of  Project  ONE,  a  safety  transformation  initiative  is  being  developed  in  accordance  with  AngloGold Ashanti’s  recognition  that  Safety  is  the  company’s  first  value.  Its  implementation  is  expected  to  further  improve  the company’s safety standards and performance. 
  As part of Project ONE, a monthly newsletter was launched in December 2009 to communicate important information about the company’s operations to all employees. 
  Regarding  improvement  and  deepening  of  corporate  policies  and  management  standards,  a  revised  Delegation  of Authority  Policy  was  approved  by  the  board  of  directors.  The  policy  governs  and  defines  the  scope  and  limits  of  the authority  of  officers  of  AngloGold  Ashanti  and  subsidiaries  to  commit  and  bind  the  company  concerning  legal  and business obligations which the company may, in the usual course of business, enter into from time to time. The  board  of  directors  also  approved  a  Compliance  Policy  Statement  for  the  AngloGold  Ashanti  group.  The  policy affirms and expresses the company’s commitment to legal, regulatory, standards and compliance with best practice. It seeks  to  establish,  promote  and  maintain  values  based  on  compliance  and  an  ethical  culture  within  the  spirit  of  the laws,  regulations,  codes  and  standards  applicable  in  the  company’s  operating  jurisdictions,  and  in  the  context  of  the company’s values, internal policies and procedures. Communication  with  various  stakeholders  has  always  been  an  important  feature  of  AngloGold  Ashanti’s  corporate governance practices. To this end, various communication channels have been utilized to engage employees and other stakeholders.  During  2009  quarterly  briefings  by  the  Chief  Executive  Officer  on  the  company’s  quarterly  results  and other  important  corporate  events  and  developments  continued.  These  briefings  were  held  in  the  corporate  office  and distributed group wide. Briefs were also issued to employees by the corporate affairs department to keep them abreast of major developments within the company. The company secretarial and the investor relations departments continued to engage with the investors in line with company policy. Meaningful  engagement  with  shareholders  is  considered  a  centerpiece  of  accountability  and  good  governance  by AngloGold Ashanti’s board. At the annual general meeting of shareholders held on May 15, 2009, the board detailed the company’s  performance  and  achievements  in  the  previous  year  and  the  strategy  to  be  implemented  to  ensure achievement of its prime objective of creating value for the business in the coming year.


AngloGold  Ashanti  fully  subscribes  to  the  South  African  government’s  initiatives  on  social  transformation.  In  line  with this, the company has established employment equity and governance structures and monitoring processes at company and  business  unit  levels.  Each  business  unit  in  South  Africa  and  the  corporate  office  has  an  Employment  Equity Committee,  comprising  employee  representatives.  The  role  of  these  committees  is  to  liaise  with  employees,  discuss issues relevant to the company’s employment equity programs and inform the Transformation and Human Resources Development Committee. The company submitted its ninth employment equity report as at August 1, 2009 to the South African Department of Labor in August 2009.
  For  purposes  of  advancing  and  supporting  the  interests  of  women  employees  at  the  corporate  office,  the  Women’s Forum,  an  affiliate  of  the  corporate  office  Employment  Equity  Committee,  undertook  a  number  of  programs  aimed  at enhancing information exchange and improving the welfare of women. 4C.  ORGANIZATIONAL STRUCTURE HEAD OFFICE STRUCTURE AND OPERATIONS AngloGold Ashanti’s operations are organized on a regional basis. Management of AngloGold Ashanti is entrusted  to the  executive  committee,  comprising  the  two  executive  directors,  eight  executive  vice  presidents  and  two  vice presidents.  See  "Item  6.:  Directors,  senior  management  and  employees".    Day-to-day  management  of the operations vests  with  executive  teams  based  in  South  Africa  (Johannesburg  and  Potchefstroom),  Ghana  (Accra),  United  States (Denver), Brazil (Nova Lima), and Australia (Perth).   Corporate activities Activities provided in the corporate area fall into three categories. First, support is provided to the executive committee in  managing  AngloGold  Ashanti  as  a  whole.  Second, certain  activities  are  managed  centrally,  including  strategic  and business planning, marketing, corporate finance, treasury, exploration, technology and innovation, corporate secretarial and  corporate  affairs.  Third,  certain  specialized  services  are  directed  from  the  center  although  they  are  managed  by operations.  These  include  mining,  engineering,  metallurgy,  mineral  resource  management,  safety  and  health,  the environment and human resources.AngloGold  Ashanti  has  investments  in  numerous  principal  subsidiaries  and  joint  venture  interests,  see  "Item  19.: Exhibits - Exhibit 19.8 List of AngloGold Ashanti Limited subsidiaries" for details. 4D.  Property, plant and equipment For a discussion on AngloGold Ashanti’s mining properties, plant and equipment, see “Item 4B.: Business Overview”. ITEM 4A:  UNRESOLVED STAFF COMMENTSNot applicable.


ITEM 5:  OPERATING AND FINANCIAL REVIEW AND PROSPECTS
  
  The  following  discussion  provides  information  that  management  believes  is  relevant  to  an  assessment  and understanding of the consolidated financial condition and results of operations  of AngloGold Ashanti Limited  under US GAAP for the three years ended and as at December 31, 2009, 2008 and 2007.
    This item should be read in conjunction with the Company’s consolidated financial statements and the notes thereto which are included under Item 18 of this annual report.
    The principal accountant of AngloGold Ashanti has made reference to the work of other auditors in their report on the consolidated  financial  statements  of  AngloGold  Ashanti  Limited  and  therefore  in  compliance  with  Regulation  S-X Rule 2-05 the separate reports of the other accountants are included in Item 18.
   
 Overview
    For  the  year  ended  December  31,  2009,  AngloGold  Ashanti  had  an  attributable  gold  production  of  approximately 4.6 million  ounces  (including  joint  ventures).    Headquartered  in  Johannesburg,  South  Africa,  the  Company  has  a global presence with 21 operations comprising  open-pit  and  underground mines and surface metallurgical plants in ten countries  which  are  supported  by  extensive,  yet  focused,  exploration  activities.    As  at  December 31, 2009  the Company had Proven and Probable Ore Reserves of approximately 68.3 million ounces (including joint ventures) on an attributable basis.
    AngloGold Ashanti’s main product is gold.  A portion of its revenue is also derived from sales of silver, uranium oxide and sulfuric acid.  The Company sells its products on world markets.
    AngloGold  Ashanti  conducts  gold-mining  operations  in  the  following  regions:  Southern  Africa  (South  Africa  and Namibia);  Continental  Africa  (Ghana,  Guinea,  Mali  and  Tanzania);  Australasia  (Australia);  North  America  (United States of America) and South America (Argentina and Brazil). For more information on the Company’s business and operations, see “Item 4B. : Business Overview – Products, operations and geographical locations”.
    AngloGold Ashanti’s costs and expenses consist primarily of production costs, royalties and depreciation, depletion and  amortization.  Production  costs  include  labor,  fuel,  lubricants,  power,  consumable  stores  which  include explosives,  timber,  other  consumables  and  utilities.    Labor  is  a  significant  component  of  production  costs  as  the Company’s mining operations consist of deep-level underground mining methods as well as open-pit operations, both of which are labor intensive.
    With operations in ten countries on four continents, AngloGold Ashanti is exposed to a number of factors that could affect its profitability, including exchange rate fluctuations, inflation and other risks relating to these specific countries.  These factors are inherent  in conducting mining operations on a global basis, and the  Company applies measures wherever appropriate and feasible, such as hedging instruments, intended to reduce its exposure to these factors.


5A.      OPERATING RESULTS
  
  INTRODUCTION
    The most significant income statement event of 2009 was the non-hedge derivative loss incurred on a hedge buy- back  that  resulted  in  the  accelerated  settlement  of  both  non-hedge  and  forward  gold  contracts  qualifying  for  the normal sale exemption.
   
 Key factors affecting results
 
 
 
 Gold prices
    AngloGold  Ashanti’s  operating  results  are  directly  related  to  the  price  of  gold  which  can  fluctuate  widely  and  is affected  by  numerous  factors  beyond  its  control,  including  industrial  and  jewellery  demand,  expectations  with respect  to  the  rate  of  inflation,  the  strength  of  the  US dollar  (the  currency  in  which  the  price  of  gold  is  generally quoted) and of other currencies, interest rates, actual or expected gold sales by central banks and the International Monetary Fund (IMF), forward sales by producers, global or regional political or economic events, and production and cost levels in major gold-producing regions.  In addition, the price of gold sometimes is subject to rapid short-term changes because of speculative activities.
    The  current  demand  for  and  supply  of  gold  may  affect  gold  prices,  but  not  necessarily  in  the  same  manner  as current supply and demand affect the prices of other commodities. The supply of gold consists of a combination of new  production  and  fabricated  gold  held  by  governments,  public  and  private  financial  institutions,  industrial organizations and private individuals.
    As  the  amounts  produced  in  any  single  year  constitute  a  very  small  portion  of  the  total  potential  supply  of  gold, normal variations in current production do not necessarily have a significant impact on the supply of gold or on its price. In addition, the recent shift in gold demand from physical demand to investment and speculative demand may exacerbate the volatility of gold prices. If revenue from gold sales falls for a substantial period below the Company’s cost  of  production  at  its  operations,  AngloGold  Ashanti  could  determine  that  it  is  not  economically  feasible  to continue commercial production at any or all of its operations or to continue the development of some or all of its projects.
        For  a  discussion  of  the  gold  supply  and  demand  dynamics,  see  “Item 4B.:  Business  overview  –  The  Gold  and Uranium Markets – Gold” in this annual report.
    Production Costs
    Production  costs  include  the  cost  of  labor,  fuel,  lubricants,  power,  consumable  stores  (which  include  explosives, timber and other consumables) and utilities used in the production of gold.  AngloGold Ashanti has estimated that for each $1 per barrel rise in the oil price, other factors remaining equal, the average cash costs under IFRS of all its  operations  increases  by  about  $0.41  per  ounce  with  the  cash  costs  of  certain  of  its  mines,  which  are  more dependent  on  fuel,  being  more  sensitive  to  changes  in  the  price  of  oil.    Labor  is  also  a  significant  component  of production costs as AngloGold Ashanti’s mining  operations  consist of deep-level underground mining  methods as well as open-pit operations, both of which are labor intensive.


Impairments
    AngloGold  Ashanti  reviews  and  tests  the  carrying  value  of  its  assets  when  events  or  changes  in  circumstances suggest that the carrying amount may not be recoverable.  AngloGold Ashanti values individual mining assets at the lowest level for which cash flows are identifiable as independent of cash flows of other mining assets and liabilities. If there are indications that impairment may have occurred, AngloGold Ashanti prepares estimates of expected future cash  flows  for  each  group  of  assets.    Expected  future  cash  flows  are  inherently  uncertain,  and  could  materially change  over  time.    They  are  significantly  affected  by  reserve  and  production  estimates,  together  with  economic factors such as spot and forward gold prices, discount rates, currency exchange rates, estimates of costs to produce reserves and future capital expenditures.
  If  any  of  these  uncertainties  occur  either  alone  or  in  combination,  it  could  require  management  to  recognize  an impairment.  In 2009, AngloGold Ashanti incurred an impairment charge of $8 million on long-lived assets.  In 2008, AngloGold Ashanti incurred an impairment charge of $371 million on long-lived assets and $299 million on goodwill in relation to certain former assets of Ashanti (comprising Obuasi, Geita and Iduapriem) Effect of exchange rate fluctuations Currently,  a  significant  portion  of  AngloGold  Ashanti’s  revenues,  excluding  the  effect  of  realized  non-hedge derivatives, are generated in South Africa, and to a lesser extent in Brazil, Argentina and Australia, and most of its production costs, therefore, are denominated in local currencies, such as the South African rand, the Brazilian real, the Argentinean peso and the Australian dollar.  In 2009, the Company derived 65 percent (61 percent including joint ventures)  of  its  revenues  from  these  countries  and  incurred  60 percent  (56 percent  including  joint  ventures)  of  its production  costs  in  these  local  currencies.    A  one percent  strengthening  of  these  local  currencies  against  the  US dollar will result in an increase of total cash costs incurred of nearly $4 per ounce, or 1 percent.  As the price of gold is  denominated  in  US dollars  and  the  Company  realizes  the  majority  of  its  revenues  in  US dollars,  devaluation  of these  local  currencies  against  the  US dollar  improves  the  Company’s  profitability  in  the  short-term.    Conversely strengthening  of  these  local  currencies  against  the  US dollar  adversely  impacts  the  Company’s  profitability  in  the short-term. Although most local currencies were on average weaker against the US dollar during 2009 compared to 2008, the trend in local currencies from early to the middle of the year started to strengthen as the US dollar was still impacted  by  effects  of  the  financial  debt  crisis.  Consequently,  total  cash  costs  in  US  dollar  terms  were  negatively impacted for the greater part of the 2009 year. In addition, in countries such as South Africa, Australia and Brazil, the benefits of the higher US dollar gold price were largely eroded by the stronger trend of the local currencies.
  To fund local operations, AngloGold Ashanti holds funds in local currencies.  The US dollar value of these currencies may be affected by exchange rate fluctuations and, as a result, the Company’s cash and cash equivalents reported in US dollars  could  change.    At  December 31, 2009,  approximately  34 percent  of  the  Company’s  cash  and  cash equivalents were held in local currencies.
  Certain exchange controls are currently in force in South Africa.  Although the exchange rate of the rand is primarily market  determined,  its  value  at  any  time  may  not  be  considered  a  true  reflection  of  the  underlying  value  while exchange controls exist.  The government has indicated its intention to lift exchange controls over time.  As exchange controls  are  relaxed,  rand  exchange  rates  will  be  more  closely  tied  to  market  forces.    It  is  not  possible  to  predict whether or when this will occur or the future value of the rand.  For a detailed discussion of these exchange controls, see “Item 10D.: Exchange controls”.


Effect of inflation
 
 
  The  mining  industry  continues  to  experience  price  inflation  for  many  commodities  and  consumables  used  in  the production of gold which leads to higher production costs reported by many gold producers.
    AngloGold Ashanti’s operations have not been materially adversely affected by inflation in recent years given that it has benefited from sustained period of rising gold prices.  However, the Company is unable to control the prices at which it sells its gold (except to the limited extent that it utilizes commodity hedging instruments) and it is possible, therefore,  that  if  there  is  to  be  significant  inflation  in  South  Africa,  and  to  a  lesser  extent  in  Brazil,  Argentina  and Australia, without a concurrent devaluation of the local currency or an increase in the price of gold, there could be a material adverse effect upon the Company’s results and financial condition.
    The percentage change in the rand/US dollar exchange rate, based upon average rates during the respective years, and the local annual inflation rate, as measured by the South African Producer Price Index (PPI), are set out in the table below:
 
  
      2009
 2008
 2007
 
 Year ended December 31
 percent
 percent
 percent
 
                    
 
 Effect of commodity instruments
 
  
 AngloGold Ashanti has utilized commodity hedging instruments to protect the selling price of some of its anticipated production.  The use of such instruments prevents full participation in subsequent increases in the market price for the commodity with respect to covered production.  The Company has been reducing its hedge commitments through hedge buy-backs, deliveries into maturing contracts and restructuring of hedge positions in order to provide greater participation  in  a  rising  gold  price  environment,  the  effect  of  which  may  be  that  only  limited  price  protection  is available at lower gold prices. As a result, the Company has reduced its hedge commitments by 2.09 million ounces (or  35  percent)  from  5.99  million  ounces  as  at  December  31,  2008  to  3.90  million  ounces  as  at  December  31, 2009. Buy-back  transactions  resulted  in  cash  outflows  during  the  current  year  of  $797  million,  included  under  the caption  “Non-hedge  derivative  loss”.  For  a  discussion  of  the  Company's  commodity  instruments  see."Item  11: Quantitivate and qualitative disclosures about market risk".
 
 
 
 Acquisitions and dispositions
    The  global  gold  mining  industry  has  experienced  active  consolidation  and  rationalization  activities  in  recent  years.  Accordingly, AngloGold Ashanti has been, and expects to continue to be, involved in a number of acquisitions and dispositions  as  part  of  this  global  trend  and  to  identify  value-adding  business  combination  and  acquisition opportunities.
  Acquisitions  and  dispositions  are  described  in  note 3  to  the  consolidated  financial  statements  “Acquisitions  and disposals  of  businesses  and  assets”.  The  consolidated  financial  statements  reflect  the  operations  and  financial condition of AngloGold Ashanti, assuming  that  acquisitions and disposals took  place on the  effective date of these transactions.
   
 South African economic and other factors
    AngloGold Ashanti is a company domiciled in South Africa, with a number of operations in South Africa.  As a result, the  Company  is  subject  to  various  economic,  fiscal  and  monetary  factors  that  affect  South  African  companies generally.


South African companies are subject to exchange control regulations.  Governmental officials have from time to time stated  their  intentions  to  lift  South  Africa’s  exchange  control  regulations  when  economic  conditions  permit  such action.    From  1998,  certain  aspects  of  exchange  controls  for  institutions  and  individuals  have  been  incrementally relaxed.  It is, however, impossible to predict whether or when the South African government will remove exchange controls in their entirety.  South African companies remain subject to restrictions on their ability to export and deploy capital outside of the Southern African Common Monetary Area, unless dispensation has been granted by the South African Reserve Bank.  For a detailed discussion of exchange controls, see “Item 10D.: Exchange  Controls”.
    The  Mineral  and  Petroleum  Resources  Royalty  Act  was  promulgated  by  the  South  African  Minister  of  Finance  on November 24, 2008  and  provides  for  the  payment  of  a  royalty  according  to  a  formula  based  on  taxable  earnings before interest and tax. It has a minimum rate of 0.5 percent and a maximum rate of 5 percent and is a tax deductible expense. It is estimated that the formula will translate to a royalty rate of between 2.5 percent and 4 percent of gross sales in terms of current pricing assumptions. The payment of royalties is scheduled to begin on March 1, 2010.
 
  
 Comparison of operating performance in 2009, 2008 and 2007
 
 
 
   
 
 
 
 
  
   The  following  table  presents  operating  data  for  the  AngloGold  Ashanti  group  for  the  three  year  period  ended December 31, 2009:
       Operating data for AngloGold Ashanti
 
 Year ended December 31
 
 
 
 2009
 2008
 2007


Attributable gold production
    For  the  year  ended  December  31,  2009,  AngloGold  Ashanti’s  total  attributable  gold  production  from  continuing operations  decreased  by  383,000  ounces,  or  8 percent,  to  4.6 million  ounces  from  5  million  ounces  produced  in 2008.
    In  South  Africa,  gold  production  decreased  by  14 percent  from  2,099,000 ounces  produced  in  2008  to  1,797,000 ounces  produced  in  2009  mainly  due  to  a  decline  in  the  volume  of  ore  mined  at  Great  Noligwa  as  a  result  of  the intersection of complex, unexpected geological structures in the first quarter of 2009, an underground fire and safety stoppages,  lower  volume  mined  at  TauTona  due  to  stoppage  of  production  in  final  quarter  of  2009  for  shaft rehabilitation and lower grades at Mponeng due to lower reef values and increased dilution. The decrease over 2008 was also caused by lower production at Savuka due to a seismic incident in May 2009 that damaged the sub-shaft infrastructure limiting mining.
    Gold production in Australia, Mali and North America decreased from 433,000 ounces, 409,000 ounces and 258,000 ounces,  respectively,  produced  in  2008  to  401,000 ounces,  360,000  ounces  and  218,000 ounces,  respectively, produced in 2009.  This decrease was mainly due to the completion of mining the high grade ore in the base of the Mega  Pit  that  boosted  production  in  2008  at  Sunrise  Dam  (Australia),  change  in  the  mix  of  oxide  and  sulfide  ore (higher  percentage  of  high  grade  sulfide  ore  was  processed  in  2008)  at  Sadiola  (Mali)  and  pad  phase  timing  and reduced recovery from poor alkalinity at depth impacting the pH levels at Cripple Creek (North America).
 
 
  The decrease in 2009 in gold produced at most mines was partially offset by an increase in gold production at Moab Khotsong  (South  Africa),  the  surface  operations  (which  mainly  treat  material  from  the  Great  Noligwa  waste  rock dump in South Africa) and Cerro Vanguardia (Argentina) from 192,000 ounces, 92,000 ounces and 154,000 ounces, respectively, produced in 2008  to 247,000 ounces, 164,000 ounces  and  192,000  ounces produced, respectively, in 2009.    This  was  mainly  due  to  continuation  of  production  build  up  as  well  as  the  addition  of  SV4  section from  the second half of 2008 at Moab Khotsong, the commissioning of the No.1 Waste Rock Dump in the current year, which resulted in grades exceeding that of 2008 at the surface operations and higher grades arising from improvements in the plant efficiency at Cerro Vanguardia.
 
 
  For  the  year  ended  December  31,  2008,  AngloGold  Ashanti’s  total  attributable  gold  production  from  continuing operations  decreased  by  495,000  ounces,  or  9 percent,  to  5 million  ounces  from  5.5  million  ounces  produced  in 2007.  In  South  Africa,  gold  production  decreased  by  10 percent  from  2,328,000 ounces  produced  in  2007,  to 2,099,000 ounces produced in 2008 mainly due to a decline in the volume of ore mined at Great Noligwa as a result of  power  shortages,  stricter  safety  controls  and  lower  volume  mined  at  TauTona  and  Kopanang  due  to  seismicity issues  and  power  outages.    Gold  production  in  Argentina,  Australia  and  Mali  decreased  from  204,000 ounces, 600,000  ounces  and  441,000  ounces,  respectively,  produced  in  2007,  to  154,000 ounces,  433,000  ounces  and 409,000 ounces,  respectively,  produced  in  2008.    This  was  mainly  due  to  plant  breakdowns  and  sedimentation problems at the plant that resulted in low mill throughput at Cerro Vanguardia (Argentina), the completion of mining the high grade ore in the base of the Mega Pit at Sunrise Dam (Australia) and a decrease in recovered grade as a result of stacking lower grade marginal ore at Yatela (Mali).
 
 
  The decrease during 2008 at most mines was partially offset by an increase in gold production in Ghana and Guinea from  527,000 ounces and 280,000 ounces,  respectively,  produced  in  2007  to 557,000 ounces  and  333,000 ounces produced, respectively, in 2008.  This was mainly due to improved plant availability and utilisation at Siguiri (Guinea) and Iduapriem (Ghana)
     
 
 Total cash costs and total production costs
   
 
 Comparison of total cash costs and total production costs in 2009 with 2008
 
 
 Although  most  local  currencies  (South  Africa,  Australia  and  Brazil)  were  on  average  weaker  against  the  US  dollar during 2009 compared to 2008, the trend in local currencies from early to the middle of the year started to strengthen as the US dollar was still impacted by effects of the financial debt crisis. Consequently, total cash costs in US dollar terms were negatively impacted for the greater part of the 2009 year.
 
 
   Cash costs at most of the operations situated in South Africa increased in 2009 when compared to 2008. This was largely a result of the reduced volumes mined, declining recovered grades, increased power tariffs, wage increases and input cost inflation.


Cerro Vanguardia, the Argentinean mine, recorded a decrease in cash costs of 42 percent from $617 per ounce in 2008 to $359 per ounce in 2009, mainly as a result of an increase in volumes and grade, the decrease cost of mining supplies, as well as an increase in by-product sales and ore stockpile movements.
    The Australian mine, Sunrise Dam, reported cash costs of $631 per ounce for 2009 compared to $559 per ounce for 2008,  a  13  percent  increase mainly  due  to  ore stockpile  movements  (as  mining  volume decrease  plant  capacity  is filled using ore previously stockpiled on surface) as well as a decrease in production.
    The Brazilian mines, Brasil Mineração and Serra Grande, reported cash costs of $347 per ounce in 2009 compared to  $322 per  ounce  in  2008  and  $429 per  ounce  in  2009  compared  to  $299  per  ounce  in  2008,  respectively.  This increase  in  cash  costs  at  both  mines  is  mainly  attributable  to  the  appreciation  of  the  Brazilian  real  against  the  US dollar and lower offsetting revenue from the sale of sulfuric acid, which is a by-product of the Cuiabá operation (Brasil Mineração).  The  onset  of  the  global  economic  crisis  in  late  2008  caused  a  sharp  decline  in  sulfuric  acid  prices  in 2009. In addition total cash costs at Serra Grande increased from 2008 due largely to inflation and lower production. The appreciation in the value of the local currency versus the US dollar affected 80 percent of total costs including that of power, labor, fuel, taxes and maintenance services in 2009.
    In Mali,at Morila, cash costs increased in 2009 to $526 per ounce compared to $424 per ounce in 2008 mainly due to the lower level of gold production, a weakening in the US dollar against the euro, and significant increases in certain reagent  costs  and  metallurgical  stores.  At  Sadiola,  production  decreased  by  22  percent  to  135,000  ounces, consequently cash costs increased from $401 per ounce in 2008 to $489 per ounce in 2009. The increase in cash costs  was  partially  offset  by  a  decrease  in  cash  costs  at  Yatela,  where  The  cash  costs  decreased  from  $621  per ounce to $326 per ounce due to the significant rise in gold production and improved grades, lower fuel prices and a decrease  in  mining  contractor  costs  resulting  from  the  renegotiation  of  the  contract  and  the  appointment  of  a  new contractor.
    Navachab in Namibia reported an increase in cash costs of 21 percent to $677 per ounce as a result of an increase in the cost of labor, power and contractor fees. Cost pressures were compounded by the decline in gold production.
    Geita, in Tanzania, reported a 21 percent increase in cash costs from $814 per ounce in 2008 to $985 per ounce in 2009.  This  was  mainly  due  to  a  66  percent  increase  in  reagent  costs,  a  function  of  higher  prices  and  increased consumption, a 72 percent increase in mining contractor costs owing to the progression into hard-rock mining, and the  outsourcing  of  the  drill  and  blast  functions.  These  increases  were  partly  offset  by  a  36  percent  decline  in  fuel costs.  In North America, Cripple Creek reported a $61 per ounce increase to $371 per ounce in 2009 mainly due to reduced recovery resulting from poor alkalinity at depth impacting the pH levels.
    Overall, total cash costs for 2009 increased by $69 per ounce, or 15 percent, the primary causes being $8 per ounce due to inflation, $22 per ounce to lower grades, $17 per ounce to lower volumes and a net $22 per ounce for other variances. These increases were partially offset by exchange gains of $11 per ounce.
  
 Comparison of total cash costs and total production costs in 2008 with 2007
    Cash costs at most of the operations situated in South Africa increased in 2008 when compared to 2007. This was largely a result of the reduced volumes mined, declining grades, increased power tariffs, wage increases and input cost inflation. Cerro Vanguardia, the Argentinean mine, recorded an increase in cash costs of 137 percent from $260 per ounce in 2007  to  $617  per  ounce  in  2008,  mainly  as  a  result  of  lower  volumes  and  grade,  the  increased  cost  of  mining supplies,  a function of  the inflationary  impact of higher commodity prices and  higher maintenance costs (due to  an extension on the useful life of some mine equipment), as well as an increase in wages and a decrease in by-product sales.


The Australian mine, Sunrise Dam, reported cash costs of $559 per ounce for 2008 compared to $262 per ounce for 2007, a 113 percent increase mainly due to significantly higher input costs, specifically for fuel and labor, during the year as well as a decrease in production.
    The Brazilian mines, Brasil Mineração and Serra Grande, reported cash costs of $322 per ounce in 2008 compared to  $246 per  ounce  in  2007  and  $299 per  ounce  in  2008  compared  to  $264  per  ounce  in  2007,  respectively.  This increase in  cash  costs at both mines is mainly attributable  to the appreciation of  the local currency against  the US dollar.  Higher  local  inflation  on  materials,  services  and  maintenance  costs  was  partially  offset  by  the  better  price received for sulfuric acid by-product at Brasil Mineração.
    Obuasi in Ghana reported increased cash costs of $172 per ounce increasing to $636 per ounce in 2008 as a result of  the  increase  in  prices  of  consumables  and  fuel,  contractor  costs  and  power  tariffs,  as  well  as  higher  royalty payments.  Iduapriem  reported  an  increase  in  cash  costs from  $497  per  ounce  in  2007  to  $625  per  ounce  in  2008 mainly due to the increase in prices of consumables and fuel, contractor costs and power tariffs in the second half of the  year,  as  well  as  higher  royalty  payments.  The  total  cash  costs  of  Siguiri,  in  Guinea,  were  fractionally  lower  at $468 per ounce in 2008 compared to $471 per ounce in 2007.
    In Mali, Yatela reported an increase in cash costs to $621 per ounce in 2008 compared to $300 per ounce in 2007 due to  the significant  decline in production, appreciation of the euro against the dollar  and  higher fuel and reagent prices. At Morila, cash costs increased in 2008 to $424 per ounce compared to $333 per ounce in 2007 mainly due to the  decline  in  production,  appreciation  of  the  euro  against  the  dollar  and  higher  fuel  prices,  wages  and  mining contractor  costs.  At  Sadiola,  production  increased  23  percent  to  172,000  ounces,  consequently  cash  costs decreased from $414 per ounce in 2007 to $401 per ounce in 2008.
    Navachab in Namibia reported an increase in cash costs of 18 percent to $559 per ounce as a result of an increase in the costs of labor, diesel fuel and explosives whilst the decline in gold production also had a negative effect.
    Geita in Tanzania reported a 30 percent increase in cash costs from $627 per ounce in 2007 to $814 per ounce in 2008 this was mainly due to lower production, the higher costs of power generation, spares and reagents also had a negative  effect.    In  North  America,  Cripple  Creek  reported  a  $41  per  ounce  increase  to  $310  per  ounce  in  2008 mainly due to higher commodity and diesel fuel prices.
    Overall,  total  cash  costs  for  2008  increased  by  $98  per  ounce,  or  27 percent,  the  primary  causes  being  $53  per ounce was due to inflation, $25 per ounce to lower grades, $20 per ounce to lower volumes and a net $22 per ounce for other variances. These increases were partially offset by exchange gains of $22 per ounce.  Reconciliation of total cash costs and total production costs to financial statements Total  cash  costs  and  total  production  costs  are  calculated  in  accordance  with  the  guidelines  of  the  Gold  Institute industry  standard  and  Industry  practice  and  are  not  US GAAP  measures.    The  Gold  Institute,  which  has  been incorporated  into  the  National  Mining  Association,  was  a  non-profit  international  association  of  miners,  refiners, bullion suppliers and manufacturers of gold products, which developed a uniform format for reporting total production costs on a per ounce basis.  The guidance was first adopted in 1996 and revised in November 1999. Total  cash  costs,  as  defined  in  the  Gold  Institute  industry  guidelines,  are  production  costs  as  recorded  in  the statement  of operations,  less offsite (i.e. central), general  and  administrative expenses (including head  office costs charged to the mines, central training expenses, industry association fees, refinery charges and social development costs) and rehabilitation costs, plus royalties and employee termination costs. Total  cash  costs  as  calculated  and  reported  by  AngloGold  Ashanti  include  costs  for  all  mining,  processing,  onsite administration  costs,  royalties  and  production  taxes,  as  well  as  contributions  from  by-products,  but  exclusive  of depreciation, depletion and amortization, rehabilitation costs, employment severance costs, corporate administration costs,  capital  costs  and  exploration  costs.    Total  cash  costs  per  ounce  are  calculated  by  dividing  attributable  total cash costs by attributable ounces of gold produced. Total production costs, as defined in the Gold Institute industry guidelines, are total cash costs, as calculated using the Gold Institute industry guidelines, plus amortization, depreciation and rehabilitation costs.


Total production costs as calculated and reported by AngloGold Ashanti include total cash costs, plus depreciation, depletion and amortization, employee severance costs and rehabilitation and other non-cash costs.  Total production costs per ounce are calculated by dividing attributable total production costs by attributable ounces of gold produced.
    Total  cash costs  and total  production costs  should  not  be considered  by  investors  in  isolation  or  as  alternatives  to production costs,  net  income/(loss)  applicable  to  common stockholders,  income/(loss) before  income  tax  provision, net cash provided by operating activities or any other measure of financial performance presented in accordance with US GAAP or as an indicator of the company’s performance.  While the Gold Institute has provided definitions for the calculation  of  total  cash  costs  and  total  production  costs,  the  calculation  of  total  cash  costs,  total  cash  costs  per ounce,  total  production  costs  and  total  production  costs  per  ounce  may  vary  significantly  among  gold  mining companies, and by themselves do not necessarily provide a basis for comparison with other gold mining companies.
    However, AngloGold Ashanti believes that total cash costs and total production costs in total by mine and per ounce by mine are useful indicators to investors and management as they provide:
 
 
 an internal benchmark of performance to allow for comparison against other mines, both within the AngloGold  Ashanti group and of other gold mining companies.
 A reconciliation of production costs as included in the company’s audited financial statements to total cash costs and to total production costs for each of the three years in the period ended December 31, 2009 is presented below.  In addition the Company has also provided below detail of the attributable ounces of gold produced by mine for each of those periods.


139
 
  
 
 For the year ended December 31, 2009
 
   
          
   
 
  
   
          
   
 
 Operations in Southern Africa
 
   
          
   
 
  
   
          
   
 
  
   
          
   
 
  
  G re a t N o lig wa
 
 Kopa-
  nang
 
 Moab K ho t-
  s ong
 
 Tau L ekoa
 
 Mpon-
  eng
 
 Savuka
 
 Tau
  Tona
 
 Nam ibia
 
 Su rfa ce o pe ra- tio ns
 
 Co rp o- ra te (6 )
 
  
 
 Production costs
 
  127
 141
 107
 88
 178
 34
 119
 42
 64
 (26)
  
 
 Plus:
 
     
 
  Production costs of equity accounted joint ventures
 (1)
             
 
 Less:
 
     
 
  Rehabilitation costs & other non-cash costs
 
             
 
 Plus:
 
     
 
  
             
 
  
             
 
  (2)
             
 
 Adjusted for:
 
     
 
  (3)
             
 
  Non-gold producing companies and adjustments
 
            
 
 
 Total cash costs
 
 
 125
 137
 104
 89
 172
 34
 116
 44
 62
 -
  
 
 Plus:
 
     
 
  
             
 
  
             
 
  
             
 
 Adjusted for:
 
     
 
  (3)
             
 
  Non-gold producing companies and adjustments
 
             
 
 Total production costs
 
  157
 201
 185
 95
 210
 42
 167
 47
 64
 33
  
 
  
  
 
  
 
 Gold produced (000’ ounces)
 (4)
  158
 336
 247
 124
 520
 30
 218
 65
 164
 -
  
 
  
  
 
  
 
 Total cash costs per ounce
 (5)
  791
 408
 421
 718
 331  1,133
 532
 677
 378
 -
  
 
 Total production costs per ounce
 (5)
  994
 598
 749
 766
 404  1,400
 766
 723
 390
 -


140
 
 
  
 
 For the year ended December 31,  2009
 
 
  
   
        
   
 
      
 Operations in Ghana, Guinea, Mali, Tanzania, Australia, North America, Argentina and Brazil
 
 
        
   
 
      
  
   
        
   
 
     
 
 
 
 GHANA
 
 GU IN EA
 
 MAL I
 TANZ-
  AN IA
 
 AUSTRAL IA
 
 
 NORTH A MER I-
  C A
 
 ARGE-
  NT IN A
 
 BRAZ IL
 
 
 
  
 
  Id uap- rie m
 
 Obuas i
 S ig u i-
  ri
 Mo rila
 Sad iola
 
 Ya te la
 
 Ge ita
 Bodd in- g to n (8 )
 
 Sun ris e D am
 
 
 C rip p le
  C re ek & V icto r
 Ce rro V ang-
  ua rd ia
 
 Ang lo -Go ld
  A shan ti B ra s il
  Min e r-
  c ao
 
 Se rra G ra nde
 
 
 
 Production costs
 
  122
 240
 160
 -
 -
 -
 261
 -
 250
 
 83
 62
 112
 65
 
 
  
    
  Production costs of equity accounted joint ventures
 (1)
           
      
  
    
  Rehabilitation costs & other non-cash costs
 
           
      
  
    
  
           
      
  
           
      
  (2)
           
      
  
    
  (3)
           
      
 Total cash costs
 
  125
 240
 162
 72
 66
 29
 268
 -
 253
 
 144
 69
 114
 33
 
 
  
    
  Depreciation, depletion and amortization
 
           
      
  
           
      
  Rehabilitation and other non-cash costs
 
           
      
  
    
  (3)
           
      
 Total production costs
 
  151
 323
 190
 79
 79
 37
 324
 -
 296
 
 162
 95
 162
 44
 
 
  
  
 
 
 Gold produced (000’ ounces)
 (4)
  190
 381
 316
 137
 135
 89
 272
 -
 401
 
 218
 192
 329
 77
 
 
 
 
  
 
 
 Total cash costs per ounce
 (5)
  658
 630
 513
 526
 489
 326
 985
 -
 631
 (7)
 371
 359
 347
 429
 
 
 Total production costs per
 ounce
 (5)
  795
 848
 601
 577
 585
 416   1,191
 -
 738
 
 743
 495
 492
 571


141
 
 
   For the year ended December 31, 2009
 
 
 
 
 
 
  
 
 
 
 
 
 
  AngloGold Ashanti operations - Total
 
 
 
 
 
 
  (in $ millions, except as otherwise noted)
  
 
  
 
  
  
 
  
 
  
  
 
  Total
 
  Production costs per financial statements
 
 
 
 
 2,229
 
  Plus:
 
 
 
 
 
  Production costs of equity accounted joint ventures
  
 
  154
 
  Less:
 
 
 
 
 
  Rehabilitation costs & other non-cash costs
  
 
  (46)
 
  Plus/(less):
 
 
 
 
 
  Inventory movement
  
 
  56
 
  Royalties
  
 
  105
 
  Related party transactions
  
 
  (16)
 
  Adjusted for:
 
 
 
 
 
  Noncontrolling interests
  
 
  (65)
 
  Non-gold producing companies and adjustments
  
 
  41
 
  Total cash costs
 
 
 
 
 2,458
 
  Plus:
 
 
 
 
 
  Depreciation, depletion and amortization
  
 
  637
 
  Employee severance costs
  
 
  14
 
  Rehabilitation and other non-cash costs
  
 
  46
 
  Adjusted for:
 
 
 
 
 
  Noncontrolling interests
  
 
  (9)
 
  Non-gold producing companies and adjustments
  
 
  (3)
 
  Total production costs
 
 
 
 
 3,143
 
  
  
 
  
  Gold produced (000’ ounces)
  
 
  4,599
 
  
  
 
  
  Total cash costs per ounce
  
 
  534
 
  Total production costs per ounce
  
 
  683
 
  
  
 
  
 
 
  Attributable  production  costs  and  related  expenses  of  equity  accounted  joint  ventures  are  included  in  the  calculation  of  total
 cash costs per ounce and total production costs per ounce.
 
  Relates solely to production costs as included in the Company’s consolidated financial statements and has, accordingly, been
 included in total production costs and total cash costs.
 
  Adjusting for noncontrolling interest of items included in calculation, to disclose the attributable portions only.
 
  Attributable production only.
 
  In addition to the operational performances of the mines, total cash costs per ounce and total production costs per ounce are
 affected  by  fluctuations  in  the  currency  exchange  rate.    AngloGold  Ashanti  reports  total  cash  costs  per  ounce  and  total production costs per ounce calculated to the nearest US dollar amount and gold produced in ounces.
 
  Corporate includes non-gold producing subsidiaries.
 
  Total cash costs per ounce calculation includes heap-leach inventory change.
 
  There  was  no  production  attributable  to  AngloGold  Ashanti  in  2009.  AngloGold  Ashanti  sold  the  33.33  percent  joint  venture
 interest it held in Boddington Gold Mine to Newmont Mining during 2009.


142
 
  
 
 For the year ended December 31, 2008
 
   
          
   
 
  
   
          
   
 
 Operations in Southern Africa
 
   
          
   
 
  
   
          
   
 
  
   
          
   
 
  
  G re a t
  N o lig wa
 
 Kopa-
  nang
 Moab K ho t-
  s ong
 
 Tau L ekoa
 
 Mpon-
  eng
 Savuka
 
 Tau
  Tona
 
 Nam ibia
 
 Su rfa ce o pe r-
  a tio ns
 
 Co rp -o ra te (6 )
 
  
 
 Production costs
 
  152
 128
 74
 78
 155
 29
 125
 37
 41
 13
 
  
 
 Plus:
 
      
 
  Production costs of equity accounted joint ventures
 (1)
            
  
 
 Less:
 
      
 
  Rehabilitation costs & other non-cash costs
 
            
  
 
 Plus:
 
      
 
  
            
  
 
  
            
  
 
  (2)
            
  
 
 Adjusted for:
 
      
 
  (3)
            
  
 
  Non-gold producing companies and adjustments
 
            
 
 
 
 Total cash costs
 
 
 151
 126
 72
 75
 149
 28
 117
 38
 41
 16
 
  
 
 Plus:
 
      
 
  
            
  
 
  
            
  
 
  
            
  
 
 Adjusted for:
 
      
 
  (3)
            
  
 
  Non-gold producing companies and adjustments
 
            
  
 
 Total production costs
 
  186
 181
 123
 103
 196
 34
 163
 43
 44
 (9)
 
  
 
  
  
 
 
  
 
 Gold produced (000’ ounces)
 (4)
  330
 362
 192
 143
 600
 66
 314
 68
 92
 -
 
  
 
  
  
 
 
  
 
 Total cash costs per ounce
 (5)
  458
 348
 375
 524
 248
 424
 373
 559
 446
 -
 
  
 
 Total production costs per ounce
 (5)
  564
 500
 641
 720
 327
 515
 519
 632
 478
 -


143
 
 
  
 
 For the year ended December 31,  2008
 
 
  
   
        
   
 
      
 Operations in Ghana, Guinea, Mali, Tanzania, Australia, North America, Argentina and Brazil
 
 
        
   
 
      
  
   
        
   
 
      
 
 
 GHANA
 
 GU IN EA
 
 MAL I
 TANZ-
  AN IA
 AUSTRAL IA
 
 
 NORTH A MER- IC A
 
 ARGE-
  NT IN A
 
 BRAZ IL
 
 
 
  
 
  Id uap-rie m
 
 Obuas i
 S ig u iri
 Mo rila
 
 Sad i-
  ola
 
 Ya te la
 
 Ge ita
 Bodd i-
  n g to n (8 )
 
 Sun ri-
  s e D am
 
 
 C rip p le
  C re ek & V icto r
 Ce rro V ang-
  ua rd ia
 
 Ang lo -Go ld
  A shan ti B ra s il
  Min e r-
  c ao
 
 Se rra G ra n-
  de
 
 
 
 Production costs
 
  118
 227
 157
 -
 -
 -
 268
 (1)
 231
 
 70
 99
 106
 52
 
 
  
   
   
  Production costs of equity accounted joint ventures
 (1)
           
      
  
   
   
  Rehabilitation costs & other non-cash costs
 
           
      
  
   
   
  
           
      
  
           
      
  (2)
           
      
  
   
   
  (3)
           
      
 Total cash costs
 
  125
 227
 156
 72
 69
 41
 215
 -
 242
 
 132
 95
 103
 26
 
 
  
   
   
  Depreciation, depletion and amortization
 
           
      
  
           
      
  Rehabilitation and other non-cash costs
 
           
      
  
   
   
  (3)
           
      
 Total production costs
 
  148
 308
 188
 85
 101
 42
 265
 (1)
 288
 
 166
 115
 144
 35
 
 
  
  
 
 
 
 
 Gold produced (000’ ounces)
 (4)
  200
 357
 333
 170
 172
 66
 264
 -
 433
 
 258
 154
 320
 87
 
 
 
 
  
 
 
 
 
 Total cash costs per ounce
 (5)
  625
 636
 468
 424
 401
 621
 814
 -
 559
 (7)
 310
 617
 322
 299
 
 
 Total production costs per
 ounce
 (5)
  740
 863
 565
 500
 587
 636  1,004
 -
 665
 
 643
 747
 450
 402


144
 
 
   For the year ended December 31, 2008
 
 
 
 
 
 
  
 
 
 
 
 
 
  AngloGold Ashanti operations - Total
 
 
 
 
 
 
  (in $ millions, except as otherwise noted)
  
 
  
 
  
  
 
  
 
  
  
 
  Total
 
  Production costs per financial statements
 
 
 
 
 2,159
 
  Plus:
 
 
 
 
 
  Production costs of equity accounted joint ventures
  
 
  168
 
  Plus:
 
 
 
 
 
  Rehabilitation costs & other non-cash costs
  
 
  12
 
  (Less)/plus:
 
 
 
 
 
  Inventory movement
  
 
  (22)
 
  Royalties
  
 
  99
 
  Related party transactions
  
 
  (7)
 
  Adjusted for:
 
 
 
 
 
  Noncontrolling interests
  
 
  (61)
 
  Non-gold producing companies and adjustments
  
 
  (32)
 
  Total cash costs
 
 
 
 
 2,316
 
  Plus/(less):
 
 
 
 
 
  Depreciation, depletion and amortization
  
 
  661
 
  Employee severance costs
  
 
  9
 
  Rehabilitation and other non-cash costs
  
 
  (12)
 
  Adjusted for:
 
 
 
 
 
  Noncontrolling interests
  
 
  (23)
 
  Non-gold producing companies and adjustments
  
 
  (3)
 
  Total production costs
 
 
 
 
 2,948
 
  
  
 
  
  Gold produced (000’ ounces)
  
 
  4,982
 
  
  
 
  
  Total cash costs per ounce
  
 
  465
 
  Total production costs per ounce
  
 
  592
 
  
  
 
  
 
 
  Attributable  production  costs  and  related  expenses  of  equity  accounted  joint  ventures  are  included  in  the  calculation  of  total
 cash costs per ounce and total production costs per ounce.
 
  Relates solely to production costs as included in the Company’s consolidated financial statements and has, accordingly, been
 included in total production costs and total cash costs.
 
  Adjusting for noncontrolling interest of items included in calculation, to disclose the attributable portions only.
 
  Attributable production only.
 
  In addition to the operational performances of the mines, total cash costs per ounce and total production costs per ounce are
 affected  by  fluctuations  in  the  currency  exchange  rate.    AngloGold  Ashanti  reports  total  cash  costs  per  ounce  and  total production costs per ounce calculated to the nearest US dollar amount and gold produced in ounces.
 
  Corporate includes non-gold producing subsidiaries.
 
  Total cash costs per ounce calculation includes heap-leach inventory change.
 
  There was no production attributable to AngloGold Ashanti in 2008.


145
 
  
 
 For the year ended December 31, 2007
 
   
          
   
 
  
   
          
   
 
 Operations in Southern Africa
 
   
          
   
 
  
   
          
   
 
  
   
          
   
 
  
  G re a t
  N o lig- wa
 
 Kopa-
  nang
 
 Moab K ho t-
  s ong
 
 Tau L ekoa
 
 Mpon-
  eng
 
 Savuka
 
 Tau
  Tona
 Nam ibia
 
 Su rfa ce o pe r-
  a tio ns
 
 Co rp o- ra te (6 )
 
  
 
 Production costs
 
  201
 133
 51
 80
 159
 30
 132
 36
 39
 49
  
 
 Plus:
 
     
 
  Production costs of equity accounted joint ventures
 (1)
             
 
 Less:
 
     
 
  Rehabilitation costs & other non-cash costs
 
             
 
 Plus:
 
     
 
  
             
 
  
             
 
  (2)
             
 
 Adjusted for:
 
     
 
  (3)
             
 
  Non-gold producing companies and adjustments
 
            
 
 
 Total cash costs
 
 
 195
 128
 45
 78
 155
 29
 130
 38
 38
 11
  
 
 Plus:
 
     
 
  
             
 
  
             
 
  
             
 
 Adjusted for:
 
     
 
  (3)
             
 
  Non-gold producing companies and adjustments
 
             
 
 Total production costs
 
  248
 167
 84
 124
 209
 34
 194
 42
 41
 45
  
 
  
  
 
  
 
 Gold produced (000’ ounces)
 (4)
  483
 418
 67
 165
 587
 73
 409
 80
 125
 -
  
 
  
  
 
  
 
 Total cash costs per ounce
 (5)
  404
 306
 672
 473
 264
 397
 318
 475
 304
 -
  
 
 Total production costs per ounce
 (5)
  513
 400  1,254
 752
 356
 466
 474
 525
 328
 -


146
 
 
  
 
 For the year ended December 31,  2007
 
 
  
   
  
       
   
 
      
 Operations in Ghana, Guinea, Mali, Tanzania, Australia, North America, Argentina and Brazil
 
 
        
   
 
      
  
   
  
       
   
 
      
 
 
 GHANA
 
 GU I-
  N EA
 
 MAL I
 TANZ-
  AN IA
 
 AUSTRAL IA
 
 
 NORTH A MER- IC A
 
 ARGE-
  NT IN A
 
 BRAZ IL
 
 
 
  
 
  Id uap-rie m (9)
 Obu-
  asi
 
 S ig u- iri
 Mo rila
 
 Sad i-
  ola
 
 Ya te la
 
 Ge ita
 Bodd i-
  n g to n (8 )
 
 Sun r-
  is e D am
 
 
 C rip p le
  C re ek & V icto r
 Ce rro V ang-
  ua rd ia
 
 Ang lo Go ld
  A shan ti B ra s il
  Min e r-
  c ao
 
 Se rra G ra nde
 
 
 
 Production costs
 
  92
 176
 136
 -
 -
 -
 206
 1
 145
 
 73
 44
 82
 52
 
 
  
   
   
  Production costs of equity accounted joint ventures
 (1)
           
      
  
   
   
  Rehabilitation costs & other non-cash costs
 
           
      
  
   
   
  
           
      
  
           
      
  (2)
           
      
  
   
   
  (3)
           
     
 Total cash costs
 
  83
 167
 132
 60
 58
 36
 205
 -
 157
 
 111
 53
 78
 24
 
 
  
   
   
  Depreciation, depletion and amortization
 
           
      
  
           
      
  Rehabilitation and other non-cash costs
 
           
      
  
   
   
  (3)
           
     
 Total production costs
 
  109
 266
 176
 73
 67
 41
 267
 1
 207
 
 147
 73
 114
 34
 
 
  
  
 
 
 
 
 Gold produced (000’ ounces)
 (4)
  167
 360
 280
 180
 140
 120
 327
 -
 600
 
 282 204
 317
 91
 
 
 
 
  
 
 
 
 
 Total cash costs per ounce
 (5)
  497
 464
 471
 333
 414
 300
 627
 -
 262
 (7)
 269 260
 246 264
 
 
 Total production costs per
 ounce
 (5)
  653
 739
 629
 406
 479
 342
 817
 -
 345
 
 521 358
 360 374


147
 
 
   For the year ended December 31, 2007
 
 
 
 
 
 
  
 
 
 
 
 
 
  AngloGold Ashanti operations - Total
 
 
 
 
 
 
  (in $ millions, except as otherwise noted)
  
 
  
 
  
  
 
  
 
  
  
 
  Total
 
  Production costs per financial statements
 
 
 
 
 1,917
 
  Plus:
 
 
 
 
 
  Production costs of equity accounted joint ventures
  
 
  126
 
  Less:
 
 
 
 
 
  Rehabilitation costs & other non-cash costs
  
 
  (79)
 
  Plus/(less):
 
 
 
 
 
  Inventory movement
  
 
  36
 
  Royalties
  
 
  89
 
  Related party transactions
  
 
  (11)
 
  Adjusted for:
 
 
 
 
 
  Noncontrolling interests
  
 
  (59)
 
  Non-gold producing companies and adjustments
  
 
  (8)
 
  Total cash costs
 
 
 
 
 2,011
 
  Plus:
 
 
 
 
 
  Depreciation, depletion and amortization
  
 
  678
 
  Employee severance costs
  
 
  19
 
  Rehabilitation and other non-cash costs
  
 
  79
 
  Adjusted for:
 
 
 
 
 
  Noncontrolling interests
  
 
  (20)
 
  Non-gold producing companies and adjustments
  
 
  (4)
 
  Total production costs
 
 
 
 
 2,763
 
  
  
 
  
  Gold produced (000’ ounces)
  
 
  5,477
 
  
  
 
  
  Total cash costs per ounce
  
 
  367
 
  Total production costs per ounce
  
 
  504
 
  
  
 
  
 
 
  Attributable  production  costs  and  related  expenses  of  equity  accounted  joint  ventures  are  included  in  the  calculation  of  total
 cash costs per ounce and total production costs per ounce.
 
  Relates solely to production costs as included in the Company’s consolidated financial statements and has, accordingly, been
 included in total production costs and total cash costs.
 
  Adjusting for noncontrolling interest of items included in calculation, to disclose the attributable portions only.
 
  Attributable production only.
 
  In addition to the operational performances of the mines, total cash costs per ounce and total production costs per ounce are
 affected  by  fluctuations  in  the  currency  exchange  rate.    AngloGold  Ashanti  reports  total  cash  costs  per  ounce  and  total production costs per ounce calculated to the nearest US dollar amount and gold produced in ounces.
 
  Corporate includes non-gold producing subsidiaries.
 
  Total cash costs per ounce calculation includes heap-leach inventory change.
 
  There was no production attributable to AngloGold Ashanti in 2007.
 
  Remaining noncontrolling interests of 15 percent were acquired effective September 1, 2007.


Capital expenditure
    Total  capital  expenditure  of  $1,027  million  was  recorded  in  the  year  ended  December  31,  2009  compared  to $1,239 million in the same period in 2008.  This represents a $212 million, or 17 percent, decrease from 2008.    In Australia, total capital expenditure decreased from $439 million in 2008 to $177 million in 2009. This is as a result of the sale of Boddington during 2009.
    Total  capital  expenditure  of  $1,239 million  was  recorded  in  the  year  ended  December  31,  2008  compared  to $1,059 million  in  the  same  period  in  2007.    This  represents  a  $180 million,  or  17 percent,  increase  from  2007.    In South Africa, capital expenditure decreased from $411 million in  2007 to $347 million  in 2008.  In Australia, capital expenditure  increased  from  $281 million  in  2007  to  $439 million  in  2008,  mainly  as  a  result  of  the  expansion  at Boddington mine. Capital expenditure in Ghana increased from $119 million in 2007 to $166 million in 2008, mainly due to the advancement of the plant extension project of Iduapriem and capital projects at Obuasi.
   
 Comparison of financial performance on a segment basis for 2009, 2008 and 2007
    The  Company  produces  gold  as  its  primary  product  and  does  not  have  distinct  divisional  segments  in  terms  of principal  business  activity,  but  manages  its  business  on  the  basis  of  different  geographic  segments.  Therefore, information  regarding  separate  geographic  segments  is  provided.  Revenues  presented  below  exclude  allocated realized gains/losses on non-hedge derivatives to individual geographic areas.
  
             Revenues
 
 
          Year ended December 31
 
  
 2009
 2008
 2007
 
 (in millions)
 $ percent
 $
 percent
 $
 percent
 
                   Total revenues
 
 3,954
 3,730
 3,095
 
          1,747
  1,563
   1,486
       1,390
  1,364
   994
       239
  282
   350
       170
  241
   117
       634
  461
   420
      Other,  including  Corporate  and  Non-gold producing subsidiaries
  129
  -
   8
    
 
 4,309
 3,911
 3,375
 
   (355)
  (181)
   (280)
    Total revenues
 
 3,954          
  100     3,730            
  100     3,095          
  100
 
  In 2009, 44 percent of AngloGold Ashanti’s total consolidated revenues were derived from its operations in Southern Africa, compared to 42 percent in 2008.
    In 2008, 42 percent of AngloGold Ashanti’s total consolidated revenues were derived from its operations in Southern Africa,  compared  to  48 percent  in  2007,  mainly  as  a  result  of  the  10 percent  decrease  in  production  in  the  South African operations. South Africa produced 42 percent of the global production in 2008.


Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 As at December 31
 
 
 
 
 2009
 2008
 2007
 
 
 
 (in millions)
 
 $
 percent
 $
 percent
 $
 percent
 
 
 
  
    
  
  
    
  
  
       
  
  
       
  
  
       
  
  
       
  
  
       
  
 Other, including Corporate, Assets held for sale
 
 
  
  
       
  
 Total segment assets
 
 10,662
 100
 9,451
 100
 10,381
 100
 
  At  December 31,  2009,  32 percent  of  AngloGold  Ashanti’s  total  assets  were  located  in  Southern  Africa  compared with 27 percent at the end of 2008, mainly due to increased capital expenditure, the strengthening of the rand against the US dollar (2009: $/R7.435, 2008: $/R9.455) and the increase of South Africa’s deferred tax asset. In addition, the sale  of  Boddington  (Australia)  increased  the  share  of  Southern  Africa’s  assets  in  relation  to  total  assets.    The remaining  operations  collectively  accounted  for  approximately  68 percent  of  AngloGold  Ashanti’s  total  assets  at December 31, 2009 compared to 73 percent at the end of the same period in 2008.
    At  December 31,  2008,  27 percent  of  AngloGold  Ashanti’s  total  assets  were  located  in  Southern  Africa  compared with 33 percent at the end of 2007, mainly due to the weakening of the rand against the US dollar (2008: $/R9.455, 2007: $/R6.810).  The decrease in the assets of Tanzania (Geita) from 13 percent in 2007 to 9 percent in 2008, was primarily  due  to  impairment  of  goodwill  and  mining  assets.    The  remaining  operations  collectively  accounted  for approximately 64 percent of AngloGold Ashanti’s total assets at December 31, 2008 compared to 54 percent at the end of the same period in 2007.
  
 
 
 Comparison of financial performance in 2009, 2008 and 2007
 
 
 
 
 
 
 
 
 
 
 
 
 Financial performance of AngloGold Ashanti
 
 Year ended December 31
 
 
 
 (in millions)
 
 2009
 2008
 2007


Comparison of financial performance in 2009 with 2008
   
 Revenues
    Revenues  from  product  sales  and  other  income  increased  by  $224 million  from  $3,730  million  in  2008  to $3,954 million  in  2009,  representing  a  6 percent  increase  over  the  period.  This  increase  was  mainly  due  to  the increase in the average spot price of gold. The average spot price of gold was $974 per ounce during 2009, $102 per ounce, or 12 percent, higher than $872 per ounce, the average spot price of gold in 2008. This increase was partially offset by reduced gold production (4.6 million ounces in 2009 compared to 5 million ounces in 2008).  The majority of product sales consisted of US dollar-denominated gold sales.
    Total revenues from the South African operations increased by $165 million to $1,686 million from $1,521 million  in 2008, mainly as a result of the increase in the average spot price of gold. This increase was offset by the reduced gold production at the South African operations (1,797,000 ounces in 2009 compared to 2,099,000 ounces in 2008). Total revenues from Navachab (in Namibia) increased from $42 million in 2008 to $61 million in 2009.
  The  two  operations  in  Brazil  produced  406,000  attributable  ounces  compared  to  407,000  ounces  in  2008.    Total revenues increased from $343 million in 2008 to $438 million in 2009 as a result of the increase in the average spot price  of  gold.  Total  revenues  from  Cerro  Vanguardia  (in  Argentina)  increased  from  $118  million  in  2008  to  $196 million in 2009.
    The Australian operation at Sunrise Dam production decreased from 433,000 ounces in 2008 to 401,000 ounces in 2009.    Average  recovered  grade  decreased  from  3.46  grammes  per  tonne  in  2008  to  2.87  grammes  per  tonne  in 2009. Total revenues decreased from $282 million in 2008 to $239 million in 2009. The decrease was partially offset by the increase in the average spot price of gold.
   
 Production costs
    Production costs increased from $2,159 million in 2008 to $2,229 million in 2009, which represents a $70 million, or 3 percent increase.  The production costs of most of the operations increased in 2009.  The increase was mainly as a result  of an increase in operational costs  including labor, consumables, power and ore stockpile  adjustments.   The increase in production costs was partially offset by the effects of cost savings initiatives.
    The  increase  in  production  costs  during  2009  was  partially  offset  by  a  decrease  in  production  costs  in  Argentina (Cerro Vanguardia) from $99 million in 2008  to $62 million in  2009.   This was due to  an  increase in silver  revenue (which is deducted from production costs) and the effects of cost savings initiatives.
    South  Africa  continued  to  grapple  with  steeply  rising  electricity  tariffs,  evidenced  by  the  31  percent  price  increase effective from July 2009.  Eskom  Holdings Limited, the state-owned utility, was granted  permission by the  National Energy Regulator to raise prices annually by a further average 25 percent until 2012 to fund the construction of new power  generation  capacity.    This  will  significantly  increase  the  cost  structure  of  AngloGold  Ashanti’s  South  African operations which currently account for approximately 39 percent of annual production.
   
 Exploration costs
  Exploration costs increased from $126 million in 2008 to $150 million in 2009 mainly due to increased activities in Colombia relating to prefeasibility work at La Colosa, new projects in Canada and the Solomon Islands, increased activities in Australia, marginally offset by drop in activities in the DRC and winding down of activities in China. For a discussion of AngloGold Ashanti’s exploration activities in 2009, see “Item 4B.: Business overview – Global exploration”.
   
 General and administrative
  General  and  administrative  expenses  increased  from  $136 million  in  2008  to  $158 million  in  2009,  mainly  due  to costs relating to labor bonuses, corporate office costs and consultancy fees.
    Royalties
    Royalties paid by AngloGold Ashanti increased from $78 million in 2008 to $84 million paid in 2009 primarily due to higher spot prices, with royalties in Argentina amounting to $16 million in 2009 compared with $12 million in 2008.  In Argentina, royalties are payable to Fomicruz, a State owned company in the Santa Cruz Province, being the minority


shareholder of the Cerro Vanguardia operation and are calculated  as a percentage of  revenues.  Royalties  paid in Ghana  and  Guinea  amounted  to  $46 million  in  2009  compared  to  $45 million  in  2008.    In  Ghana,  royalties  are payable to the government at a fixed rate of 3 percent per annum based on revenue, as agreed to under the Stability Agreement entered into with AngloGold as part of the AngloGold Ashanti business combination. In Guinea, royalties are  paid  to  the  government,  Union  Miniere  and  the  International  Finance  Corporation  and  are  calculated  as  a percentage of revenues.
  Royalties paid by AngloGold Ashanti will increase further in 2010 as a result of the requirement in the South African Mineral  and  Petroleum  Resources  Act  to  pay  additional  royalties  in  South  Africa  from  March  1,  2010.  See  “key factors affecting results – South African economic and other factors”.
 
 
 Depreciation, depletion and amortization
     
 
 
 Impairment of assets
    In  2009,  AngloGold  Ashanti  recorded  impairments  amounting  to  $8 million  compared  to  $670 million  in  2008.  Impairments  in  2009  consist  of  impairment  and  write-off  of  the  oxide  treatment  plant  at  the  Obuasi  mine  and impairment of Tau Lekoa (held for sale). Following the classification of Tau Lekoa as held for sale, impairment testing was  performed  on  the  held  for  sale  asset.  As  the  estimated  fair  value  did  not  support  the  carrying  value,  an impairment of $4 million was recorded. See “Note 5   Costs and expenses: Impairment of assets” to the consolidated financial  statements  for  additional  information.  In  accordance  with  the  provisions  of  the  Financial  Accounting Standards  Board  (“FASB”)  Accounting  Standards  Codification  (“ASC”)  guidance  on  discontinued  operations,  Tau Lekoa  is  not  classified  as  a  discontinued  operation.  See  “Note  17  –  Assets  and  Liabilities  Held  for  Sale”  to  the consolidated financial statements.
  Interest expense Interest expense increased by $51 million to $123 million in 2009, compared to $72 million recorded 2008. This was mainly due to the higher interest and fees cost on the Term Facility and a reduction in capitalized interest. Accretion expense Accretion expense of $17 million was recorded in 2009 compared with $22 million in 2008. Accretion relates to the unwinding of discounted future reclamation obligations to present values and increases in the reclamation obligations to its future estimated payout. Employment severance cost Employment severance costs increased to $14 million in 2009 from $9 million in 2008.  The 2009 expense was due to  retrenchments  reflecting  mainly  downsizing  and  rationalization  of  operations  in  the  South  Africa  and  Ghana regions. Employee severance costs recorded in 2009 included retrenchment costs of $10 million in the South African region and $3 million in Ghana (at Obuasi) due to a planned reduction in workforce. Profit/loss on sale of assets, realization of loans, indirect taxes and other In 2009, the Company recorded a loss of $10 million compared to a profit of $64 million recorded in 2008.  The loss in 2009 mainly related to the impairment of Pamodzi Gold debtor in South Africa whose operations were liquidated during October 2009, a loss on consignment stock  and reassessment of indirect  taxes payable  in Tanzania,  Brazil and  Guinea  offset  by  the  profit  on  disposal  of  the  indirect  33.33  percent  joint  venture  interest  in  Boddington  Gold Mine in Australia to Newmont Mining Corporation.


Non-hedge derivative loss
    A loss on non-hedge derivatives of $1,452 million was recorded in 2009 (which includes normal purchase and sale exempted  (“NPSE”)  contracts  re-designated  to  non-hedging  instruments  during  the  period)  compared  to  a  loss  of $258 million  in  2008  relating  to  the  use  of  non-hedging  instruments,  which  represent  derivatives  not  designated  in formal hedge accounting relationships.  The change in fair value of such derivatives is recorded each period in the income statement.
  During 2009, the Company embarked on a hedge buy-back that resulted in the accelerated settlement of both non-hedge  and  forward  gold  contracts  qualifying  for  the  normal  purchases  and  sales  exemption  (which  permits  the Company to not record such amounts in its financial statements until the maturity date of the contract) under which the Company had committed to deliver a specified quantity of gold at a future date in exchange for an agreed price.  Of  the  total  hedge  buy-back  cost  of  $797  million,  the  majority,  being  $580 million,  related  to  contracts  previously designated  as  NPSE,  which  allowed  them  to  be  accounted  for  off-balance  sheet  in  prior  periods.   A  further $217 million  was  also  incurred  in  accelerating  the  cash  settlement  of  existing  non-hedge  derivative  contracts  that were not previously designated as NPSE contracts.  However, as a result of the accelerated cash settlement of the NPSE contracts during July 2009, the FASB ASC guidance on derivatives and hedging necessitated a review of the continuing  designation  of,  and  accounting  treatment  for,  the  remaining  NPSE  contracts  that  were  not  part  of  the accelerated  settlement.   As  the  Company  will  continue  to  consider  alternatives  to  reduce  its  outstanding  gold derivatives position in future periods including, where appropriate, the accelerated settlement of contracts previously qualifying  for  the  NPSE  designation,  management concluded,  in  accordance  with  the  provisions  of  the  FASB  ASC guidance, to re-designate all remaining NPSE contracts as non-hedge derivatives and to account for such contracts at fair value on the balance sheet with changes in fair value accounted for in the income statement.   The impact in July 2009 of the related re-designation of the contracts discussed above resulted in an increase in the current non-hedge derivative liability and a consequential loss on non-hedge derivatives of $543 million. During the remainder  of  2009,  the  contracts  that  were  previously  NPSE  designated  experienced  a  further  fair  value  decline (recorded in loss on non-hedge derivatives) of $143 million, settlements of $130 million and thus resulted in a $556 million derivative liability balance as of December 31, 2009.  Therefore, the loss on non-hedge derivatives recorded for the year ended December 31, 2009 primarily relates to the hedge  buy-back  that  resulted  in  the  accelerated  settlement  and  related  re-designation  of  the  NPSE  contracts discussed above, the fair value movement of the conversion features of convertible bonds amounting to $32.6 million (as  described in Note 20 to  the financial statements)  and  the revaluation  of non-hedge derivatives, including those NPSE contracts re-designated as a result of the accelerated settlement as discussed above, resulting from changes in the prevailing spot gold price, exchange rates, interest rates, volatilities and non-performance risk during 2009.   During  2008,  the  Company  recorded  a  realized  loss  on  the  accelerated  settlement  of  non-hedge  derivatives  of $1,088 million.  In  addition,  the  Company  recognized  a  loss  of  $150 million  during  2008  on  forward  gold  contracts previously qualifying for the NPSE, due to the inability of a single counterpart to accept physical delivery of gold for the forward contracts that had matured.  Accordingly, the remaining contracts with this counterpart for future periods were  accounted  for  at  fair  value  on  balance  sheet,  with  changes  in  fair  value  reflected  in  the  income  statement. Following this, during the third quarter of 2008, the Company cash settled contracts now designated as non-hedge derivative contracts, with the same counterpart, maturing in July 2008 through August 2009. Non-hedge derivatives recorded for the years ended December 31, 2009 and 2008 included:
  
   
 Year ended December 31,
 
 
  
 2009
 2008
 
 
  
 (in US Dollars, million)


Other operating items Other operating items, consisting of realized loss on other commodity contracts and (reversal of) provision for loss on future deliveries of other commodities and unrealized gain/loss on other commodity physical borrowings amounted to a net expense of $nil million in 2009 compared to a net expense of $19 million in 2008.  Equity income in affiliates Equity income in equity method investments increased from a loss of $149 million in 2008 to an income of $88 million in 2009, mainly as a result of increased attributable earnings at Yatela, Sadiola and Morila mines in Mali in 2009 of $33 million, $32 million and $36 million, respectively, compared to losses of $18 million, $52 million and $69 million, respectively, in 2008. The increase in attributable earnings was mainly due to an increase in the average spot price of gold and better production from Yatela.  Taxation expense/benefit A net taxation benefit of $33 million was recorded in 2009 compared to a net tax expense of $22 million recorded in 2008.  Charges  for  current  tax  in  2009  amounted  to  $166 million  compared  to  $94  million  in  2008.  Charges  for deferred  tax  in  2009  amounted  to  a  net  tax  benefit  of  $199 million  compared  to  a  net  tax  benefit  of  $72  million  in 2008.  The increase in the tax charge in 2009 is mainly due to higher income as a result of the higher gold price and capital gains tax on the sale of the interest in Boddington.
 
 
 Comparison of financial performance in 2008 with 2007
   
 Revenues
    Revenues  from  product  sales  and  other  income  increased  by  $635 million  from  $3,095  million  in  2007  to $3,730 million  in  2008,  representing  a  21 percent  increase  over  the  period.  This  increase  was  mainly  due  to  the increase in the average spot price of gold. The average spot price of gold was $872 per ounce during 2008, $175 per ounce, or 25 percent, higher than $697 per ounce, the average spot price of gold in 2007.  The majority of product sales consisted of US dollar-denominated gold sales.
    Total  revenues  from  the  South  African  operations  increased  by  $89 million  to  $1,521 million  from  $1,432 million realized in 2007, mainly as a result of the increase in the average spot price of gold. This increase was offset by the reduced gold production at the South African operations (2,099,000 ounces in 2008 compared to 2,328,000 ounces in 2007). Total revenues from Navachab (in Namibia) decreased from $54 million in 2007 to $42 million in 2008.
    The Australian operation at Sunrise Dam production decreased from 600,000 ounces in 2007 to 433,000 ounces in 2008.    Average  recovered  grade  decreased  from  4.86  grammes  per  tonne  in  2007  to  3.46  grammes  per  tonne  in 2008. Total revenues decreased from $350 million in 2007 to $282 million in 2008.
    The  two  operations  in  Brazil  produced  407,000  attributable  ounces  compared  to  408,000  ounces  in  2007.    Total revenues increased from $280 million in 2007 to $343 million in 2008 as a result of the increase in the average spot price of  gold.  Total revenues from  Cerro Vanguardia (in Argentina) amounted to $118  million in 2008 compared to $140 million in 2007.
    Total revenues generated from operations situated in Ghana and Guinea amounted to $513 million and $350 million, respectively, in 2008, compared to $359 million and $221 million, respectively, in 2007.  Total revenues increased as a result of the increase in the average spot price of gold and increased production. Tanzania recorded total revenues of $320 million in 2008 compared to $134 million in 2007, mainly as a result of the increase in the average spot price of gold. This increase was offset by the reduced gold production from 327,000 ounces in 2007 to 264,000 ounces in 2008.
   
 Production costs
    Production costs increased from $1,917 million in 2007 to $2,159 million in 2008, which represents a $242 million, or 13 percent  increase.    Production  costs  of  operations  outside  of  South  Africa  increased  by  $321 million  to $1,364 million in 2008 from $1,043 million in 2007.  The increase was mainly as a result of an increase in operational costs including labor, fuel, consumables and power as well as the strengthening of local currencies relative to the US dollar.  The increase in production costs was partially offset by the effects of cost savings intiatives.


The  increase  in  production  costs  during  2008  at  these  operations  was  partially  offset  by  a  decrease  in  production costs in South Africa from $874 million in 2007 to $795 million in 2008.  This was due to the weakening of the rand against  the  US  dollar,  and  the  effects  of  cost  savings  initiatives  which  was  partially  offset  by  an  increase  in  labor costs.  About 37 percent of AngloGold Ashanti’s production costs were denominated in South Africa rands in 2008.
   
 Exploration costs
    Exploration  costs  increased  to  $126  million  in  2008  from  $117  million  in  2007  primarily  as  a  result  of  increased regional and target generation activities in Colombia. Exploration activities also continued to focus on new prospects in  the  Democratic  Republic  of  Congo,  China,  Philippines,  Russia  and  Australia.  Mine  based  exploration  programs continued  around  the  operations  in  the  countries  in  which  the  group  operates,  namely,  Australia,  Ghana,  Guinea, Tanzania, Mali, Namibia, South Africa and the USA. For a discussion of AngloGold Ashanti’s exploration activities in 2008, see “Item 4B.: Business overview – Global exploration”.
   
 General and administrative General and administrative expenses increased from $130 million in 2007 to $136 million in 2008, mainly due to an
 
 Royalties
    Royalties paid by AngloGold Ashanti increased from $70 million in 2007 to $78 million paid in 2008 primarily due to higher spot prices, with royalties in Argentina amounting to $12 million in 2008 compared with $11 million in 2007.  In Argentina, royalties are payable to Fomicruz, a State owned company in the Santa Cruz Province, being the minority shareholder of the Cerro Vanguardia operation calculated as a percentage of revenues.  Royalties paid in Ghana and Guinea  amounted  to  $45 million  in  2008  compared  to  $40 million  in  2007.    In  Ghana,  royalties  are  payable  to  the government at a fixed  rate of 3 percent per annum based on revenue,  as agreed to under  the Stability Agreement entered into with AngloGold as part of the AngloGold Ashanti business combination. In Guinea, royalties are paid to the government, Union Miniere and the International Finance Corporation calculated as a percentage of revenues.
   
 Depreciation, depletion and amortization
    Depreciation,  depletion  and  amortization  expense  decreased  by  $40 million  or  6 percent,  to  $615 million  in  2008 when  compared  to  $655  million  recorded  in  2007.  This  decrease  was  mainly  due  to  decreases  in  depreciation, depletion  and  amortization  expense  in  South  Africa,  Australia  and  Guinea  from  $301 million,  $54 million  and $45 million, respectively, incurred in the year ended December 31, 2007 to $256 million, $47 million and $36 million, respectively, in the same period of 2008 mainly as a result of a decrease in gold production as a factor of reserves and  changes  in  estimated  lives  of  assets.  This  was  partially  offset  by  an  increase  in  depreciation,  depletion  and amortization expense in Ghana which increased from $91 million incurred in the year ended December 31, 2007 to $110 million in the same period in 2008 as a result of an increase in gold production.
 
 
 
 Impairment of assets
    In  2008,  AngloGold  Ashanti  recorded  impairments  amounting  to  $670 million  compared  to  $1 million  in  2007.  Impairments  in  2008  include  the  impairment  of  goodwill  $299 million  (at  Geita,  Obuasi  and  Iduapriem),  the impairment  of  tangible  assets  and  equipment  $371 million  (at  Geita,  Obuasi,  Iduapriem,  the  DRC,  TauTona  and Guinea) and the impairment and write-off of various minor tangible assets and equipment of $2 million.
    The  impairment  charge  related  primarily  to  the  former  Ashanti  mines  in  Ghana  and  Tanzania.    At  the  time  of  the Ashanti  acquisition,  the  mines  were  accounted  for  by  AngloGold  Ashanti  based  on  the  forward  gold  curve.    Since then, AngloGold Ashanti has consistently applied this methodology i.e., the forward gold curve off a 30-day average spot  price  during  the  fourth  quarter,  to  test  these  assets  annually  for  goodwill  impairment  purposes  and  when indicated  for  long-lived  assets.    Although  the  starting  point  of  the  forward  gold  price  curve  was  higher  in  2008 compared with 2007, the slope or rate of escalation of the price curve was lower in 2008.  The forward price curve if discounted at  US  CPI  is $817  per  ounce  (2007: $887  per ounce).    Discount  rates  applied  in  2008  are  higher  than those used in the previous year, reflecting current market and economic conditions.  In addition, reserves at the Geita mine  in  Tanzania  decreased  during  2008.    These  two  factors  were  the  primary  cause  of  the  impairment  charge  in 2008.


Accretion expense
    Accretion expense of $22 million was recorded in 2008 compared with $20 million in 2007. Accretion relates to the unwinding of discounted future reclamation obligations to present values and increases in the reclamation obligations to its future estimated payout.
   
 Employment severance cost
    Employment severance costs decreased to $9 million in 2008 from $19 million in 2007.  The 2008 expense consists of  retrenchment  costs  in  the  South  African  region  (at Great  Noligwa,  Kopanang,  Tau  Lekoa,  Moab  Khotsong, TauTona, Mponeng and Savuka) due to a planned reduction in workforce.
 
 
 Profit/loss on sale of assets, realization of loans, indirect taxes and other
    A  profit  of  $64  million  was  recorded  in  2008  compared  to  a  loss  of  $10 million  recorded  in  2007  which  consisted mainly  of  the  reassessment  of  indirect  taxes  payable  in  Tanzania  and  profit  on  disposal  of  certain  exploration interests  in  Colombia  to  B2Gold  Corporation  and certain  royalty  and  production  related  payment  interests  in  North America to Royal Gold Inc.
  Non-hedge derivative loss A  loss  on  non-hedge  derivatives  of  $258 million,  being  derivatives  not  designated  in  formal  hedge  accounting relationships,  was  recorded  in  2008 compared  to  a  loss  of $808  million  in  2007  relating  to  the  use of  non-hedging instruments.   The  loss primarily relates to changes  in the prevailing  spot gold price, exchange rates,  interest rates, volatilities  and  non-performance  risk.    Realized  loss  on  accelerated  settlement  of  non-hedge  derivatives  from  the hedge close-outs effected during 2008, amounted to $1,088 million.  In addition, the Company recognized a loss of $150 million during 2008 on forward gold contracts previously qualifying for the normal sale exemption (which permits the  Company  to  not  record  such  amounts  in  its  financial  statements  until  the  maturity  date  of  the  contract)  under which the Company had committed to deliver a specified quantity of gold at a future date in exchange for an agreed price.  However,  due  to  the  inability  of  a  single  counterpart  to  accept  the  physical  delivery  of  gold  for  the  forward contracts  expiring  in  April  through  June  2008,  the  Company  cash  settled  such  contracts  during  the  period.  Accordingly, the remaining contracts with this counterpart scheduled to mature in later periods did not meet all of the requirements  necessary  for  them  to  continue  to  qualify  for  the  normal  sale  exemption  in  future  periods  and  were accounted for as non-hedge derivatives at fair value on the balance sheet as from June 30, 2008, with changes in fair value reflected in the income statement. During the third quarter of 2008, the Company early cash settled contracts now  designated  as  non-hedge  derivative  contracts,  with  the  same  counterpart,  maturing  in  July 2008  through August 2009.  Non-hedge derivatives recorded for the years ended December 31, 2008 and 2007 included:
  
   
 Year ended December 31,
 
 
  
 2008
 2007
 
 
  
 (in US Dollars, million)


Other operating items
    Other operating items, consisting of realized loss on other commodity contracts and (reversal of) provision for loss on future deliveries of other commodities and unrealized gain/loss on other commodity physical borrowings amounted to a net expense of $19 million in 2008 compared to a net credit of $16 million in 2007.
  Equity income in affiliates Equity  income  in  equity  method  investments decreased from  $41  million  in  2007  to  a  loss  of $149 million  in  2008, mainly as a result of a decrease in attributable earnings at Yatela, Sadiola and Morila mines in Mali, which reported losses  of  $18 million,  $52 million  and  $69 million,  respectively,  in  2008  compared  to  attributable  earnings  of $17 million, $10 million and $18 million, respectively, in 2007.  In 2008, the Company recorded an impairment loss of $8 million (2007: $14 million) on its investment held in Trans-Siberian Gold plc.  Taxation expense/benefit A net taxation expense of $22 million was recorded in 2008 compared to a net tax expense of $118 million recorded in  2007.  Charges  for  current  tax  in  2008  amounted  to  $94 million  compared  to  $191  million  in  2007.  Charges  for deferred tax in 2008 amounted to a net tax benefit of $72 million compared to a net tax benefit of $73 million in 2007.  The  reduction  in  the  tax  charge  in  2008  mainly  relates  to  losses  on  the  early  settlement  of  non-hedge  derivative contracts and Sunrise Dam’s taxable income has reduced considerably following the completion of the mining in the megapit during the year.


5B.
 LIQUIDITY AND CAPITAL RESOURCES
   
 Operating activities
   
 2009 Net  cash  provided  by  operating  activities  was  $443 million  in  2009,  significantly  higher  than  the  2008  amount  of $64 million. The increase in net cash provided by operations was mainly as a result of lower payments to suppliers, higher received gold price and lower cash utilized in hedge buy-backs in 2009.
  Net cash outflow from operating working capital items amounted to $21 million in 2009, compared with an outflow of $239 million in 2008.  2008 Net  cash  provided  by  operating  activities  was  $64 million  in  2008,  89 percent  lower  than  the  2007  amount  of $561 million.  The  decrease  in  net  cash  provided  by  operations  was  mainly  as  a  result  of  delivering  into  maturing hedge  contracts,  hedge  buybacks  (limited  to  non-hedge  derivatives)  and  higher  payments  to  suppliers.    The decrease was partly offset by a higher average gold price received for the year.
  Net cash outflow from operating working capital items amounted to $239 million in 2008, compared with an outflow of $170 million in 2007.  Investing activities
  2009 Investing activities in 2009 resulted in a net cash outflow of $268 million, which is a decrease of $1,325 million from an outflow of $1,593 million in 2008 mainly due to the $990 million in proceeds received from the sale of the 33.33 percent stake in Boddington which was offset in part by the $344 million acquisition of an effective indirect 45 percent interest in the Kibali gold project.  2008 Investing  activities  in  2008  resulted  in  a  net  cash  outflow  of  $1,593 million  compared  with  a  net  cash  outflow  of $1,031 million in 2007. The major component of cash outflows was additions to tangible assets which included capital expenditure of $1,194 million, compared to net cash outflow of $1,015 million in 2007, with the major capital projects being  at  Mponeng  and  TauTona  in  South  Africa  and  Boddington  in  Australia.    Cash  outflows  from  derivative settlements amounted to $485 million in 2008.  Financing activities  2009 Net  cash  generated  by  financing  activities  in  2009  amounted  to  an  inflow  of  $303 million,  which  is  a  decrease  of $1,412  million  from  an  inflow  of  $1,715 million  in  2008,  and  included  cash  inflows  from  proceeds  from  loans  of $2,774 million  (which  included  $1.0 billion  under  the  Standard  Chartered  Term  Facility,  $985  million  under  the $1.15 billion  syndicated  loan  facility  and  $732.5  million  under  the  convertible  bonds  issued  May  2009).    Proceeds from stock issued (reflecting mainly the equity offering to fund the acquisition of the initial effective 35 percent interest in the Kibali gold project) in 2009 amounted to $306 million.
  Cash  outflows  from  repayment  of  debt  of  $2,731  million  during  2009  included:  the  capital  repayment  of  the $1.0 billion  convertible  bond  on  February 27, 2009,  $899  million  on  the  $1.15 billion  syndicated  loan  facility,  $750 million on the Term Facility and normal scheduled loan repayments of $82 million.


Dividends paid decreased from $58 million (13 US cents or 103 South African cents per share) in 2008 to $56 million (13 US cents  or  110  South  African  cents  per share)  in  2009.    AngloGold  Ashanti  declares  interim  dividends  at  the time  of  announcing  its  interim  results  and  declares  and  pays  final  dividends  in  the  following  year  based  on  the previous year's results.
   
 2008
    Net cash generated  by financing activities  increased by $1,253 million from an inflow  of $462 million  in 2007 to  an inflow  of  $1,715 million  in  2008.    In  2008,  drawdowns  on  existing  loan  facilities  raised  $853 million  and  debt repayments  totaled  $614 million.    Cash  effects  from  the  issuance  of  stock  amounted  to  $1,722 million,  reflecting mainly proceeds from the rights offer completed in July 2008.
    Dividends  paid  decreased  from  $144  million  (44 US  cents  or  330  South  African  cents  per  share)  in  2007  to $58 million  (13 US cents  or  103  South  African  cents  per  share)  in  2008.    AngloGold  Ashanti  declares  interim dividends  at  the  time  of  announcing  its  interim  results  and  declares  and  pays  final  dividends  in  the  following  year based on the previous year's results.
   
 Liquidity
    AngloGold Ashanti’s revenues are derived primarily from the sale of gold produced at its mines.  Cash generated by operating activities is therefore the function of gold produced sold at a specific price.  The market price of gold can fluctuate widely which impacts the profitability of the Company’s operations and the cash flows generated by these operations.  The Company has used a number of products, including derivatives, to manage gold price and foreign exchange  risks  that  arise  out  of  the  Company’s  core  business  activities  to  limit  the  impact  of  such  risks  on  the profitability  of  the  Company’s  operations  and  generated  cash  flows.  Earnings  of  joint  ventures  and  subsidiaries  in Mali and Argentina which are not permanently re-invested may be received as dividends.
    AngloGold  Ashanti’s  cash  and  cash  equivalents  increased  to  $1,100 million  at  December 31,  2009  compared  with $575 million at December 31, 2008.  In accordance with South African Reserve Bank regulations, cash generated by South  African  operations  is  held  in  rands  and  is  therefore  subject  to  exchange  controls.    At  December 31,  2009, approximately 66 percent of the Company’s cash and cash equivalents were held in US dollars, 24 percent were held in South African rands and 10 percent were held in other currencies.
    On  December  13,  2007,  AngloGold  Ashanti  Holdings  plc,  AngloGold  Ashanti  USA  Incorporated  and  AngloGold Ashanti  Australia  Limited,  each  a  wholly-owned  subsidiary  of  AngloGold  Ashanti,  entered  into  a  three  year  $1.15 billion syndicated loan facility, as borrowers, at a margin of 0.4 percent over LIBOR (the “Syndicated Loan Facility”).  The Syndicated Loan Facility is a revolving credit facility, whereby amounts may be repaid and reborrowed during the three  year  term  of  the  facility.    AngloGold  Ashanti,  AngloGold  Ashanti  Holdings  plc,  AngloGold  Ashanti  USA Incorporated  and  AngloGold  Ashanti  Australia  Limited,  as  guarantors,  each  guaranteed  the  obligations  of  the borrowers and the other guarantors under the Syndicated Loan Facility.  The Syndicated Loan Facility will mature on December 13, 2010.
    AngloGold  Ashanti  Holdings  plc,  as  borrower,  has  also  entered  into  a  loan  facility  agreement  with  Standard Chartered Bank that provides for (i) a term loan of $250 million (the “2009 Term Facility”) and (ii) a revolving credit facility of $250 million (the “2009 Revolving Credit Facility”), each at a margin of 4.25 per cent per annum over the higher  of  the  applicable  LIBOR  and  the  lender’s  cost  of  funds  (subject  to  a  cap  of  LIBOR  plus  1.25  per  cent  per annum).  The terms and covenants of the loan facility agrement with Standard Chartered are similar to those of The Syndicated Loan Facility.  AngloGold Ashanti, AngloGold Ashanti USA Incorporated and AngloGold Ashanti Australia Limited, as guarantors, have each guaranteed all payments and other obligations of AngloGold Ashanti Holdings plc and the  other guarantors under the 2009 Term Facility and the 2009 Revolving  Credit  Facility.  These facilities will each  mature  on  August  24,  2010  (extendable,  if  required,  at  the  option  of  AngloGold  Ashanti  Holdings  plc  until August 24, 2011).  Amounts outstanding under these facilities may be prepaid at any time prior to the maturity date.
    On  May  22,  2009,  the  Company  concluded  an  issue  of  convertible  bonds,  in  the  aggregate  principal  amount  of $732.5 million at an interest rate of 3.5 percent convertible into American depositary shares (“ADSs”) of AngloGold Ashanti at an initial conversion price of $47.6126.  The conversion price is subject to standard weighted average anti-dilution  protection.    The  convertible  bonds  were  issued  by  AngloGold  Ashanti  Holdings  Finance  plc,  a  finance company  subsidiary  wholly-owned  by  AngloGold  Ashanti  Limited.    The  business  of  AngloGold  Ashanti  Holdings Finance plc is to issue debt securities to finance the activities of AngloGold Ashanti Limited and its subsidiaries and


affiliates.    AngloGold  Ashanti  Limited  has  fully  and  unconditionally  guaranteed  the  convertible  bonds  issued  by AngloGold  Ashanti  Holdings  Finance  plc.    There  are  no  significant  restrictions  on  the  ability  of  AngloGold  Ashanti Limited to obtain funds from its subsidiaries by dividend, loan or advances.  The convertible bonds mature on May 22, 2014.
    During 2010, approximately $1.3 billion of AngloGold Ashanti’s debt is scheduled to mature, consisting mainly of $1.0 billion under the $1.15 billion Syndicated Loan Facility and $250 million under the 2009 Term Facility (subject to the extension option described above).
    AngloGold Ashanti intends to finance its capital expenditure and debt repayment requirements in  2010 from cash on hand, cash flow from operations, the proceeds from the sale of the Tau Lekoa mine, existing and new replacement credit  facilities,  long-term  debt  financing  and,  potentially  if  deemed  appropriate,  the  issuance  of  equity  and  equity linked instruments.
    
 
 
 Short-term debt
     AngloGold  Ashanti’s  short-term  debt  increased  to  $1,292  million  at  December 31, 2009  from  $1,067 million  at December 31, 2008.  Included in the short-term debt at December 31, 2009, was:
 
   
 Long-term debt
 
 
 
  AngloGold Ashanti’s long-term debt decreased to $667 million at December 31, 2009 compared with $873 million at December 31, 2008.  As at December 31, 2009, the Company’s long-term borrowings included:
    
 Unsecured loans:
    $606 million outstanding under the convertible bonds issued on May 22, 2009 (interest charged at 3.50 percent per annum; the bonds are convertible, at holders’ option, into ADS up to May 2014 and are US dollar-based).
  Secured capital leases:
  $35 million is repayable to Turbine Square Two (Proprietary) Limited for buildings financed (interest charged at
          an  implied  rate  of  9.8 percent  per  annum,  lease  payments  are  payable  in  monthly  installments  terminating  in
          March 2022, are rand-based and the buildings financed are used as security for these loans).
 
 $13  million  is  repayable  to  Caterpillar  Financial  Services  Corporation  (Interest  charged  at  an  average  rate  of
          5.46 percent  per  annum.  Loans  are  repayable  in  monthly  installments  terminating  in  December  2014  and  are
          US dollar-based.  The equipment financed is used as security for these loans.)


160
 
 
 
 
  As at December 31, 2009, AngloGold Ashanti’s total long-term debt, including the short-term portion maturing within
 2009, was made up as follows:
 
 
 
  
  
 
  
  
 
 
 $ (million)
 
 
  Unsecured loans
  
 1,900
 
 
  Secured capital leases
  
 59
 
 
  Total
  
 1,959
 
 
  Less: Short-term maturities
  
 1,292
 
 
  Long-term debt
 
 
 667
 
 
  
  
 
  
  Debt repayments are scheduled as follows:
  
 
  
  
  
 
  
  
 
 
 $ (million)
 
 
  2010
  
 1,292
 
 
  2011
  
 11
 
 
  2012
  
 7
 
 
  2013
  
 6
 
 
  2014
  
 611
 
 
  Thereafter
  
 32
 
 
  Total
 
 
 1,959
 
 
  
  
 
  
  At December 31, 2009 the currencies in which the borrowings were denominated were as follows:
  
 
  
  
  
 
  
  
 
 
 $ (million)
 
 
  United States dollars
  
 1,917
 
 
  South African rands
  
 35
 
 
  Brazilian real
  
 7
 
 
  Total
 
 
 1,959
 
 
  
  
 
  
  Repayments  of  short-term  and  long-term  borrowings  amounted  to $1,867 million  and  $864 million,  respectively,  in
 2009.
 
 
 
  
  
 
  
  At December 31, 2009, AngloGold Ashanti had the following undrawn under its borrowing facilities:
 
 
 
  
  
 
  
  
 
 
 $ (million)
 
 
  Standard Chartered PLC (2009 Revolving Credit Facility) – US dollar
 
 
 250
 
 
  Syndicated Loan Facility ($1,150 million)  – US dollar
  
 125
 
 
  FirstRand Bank Limited – US dollar
  
 50
 
 
  Absa Bank Limited – US Dollar
  
 42
 
 
  Nedbank Limited – US Dollar
  
 2
 
 
  FirstRand Bank Limited – Rands
  
 30
 
 
  Standard Bank of South Africa Limited – Rands
  
 25
 
 
  Nedbank Limited – Rands
  
 14
 
 
  Absa Bank Limited – Rands
  
 4
 
 
  Total undrawn
 
 
 542
 
 
  
  
 
  
  Expires December 2010.
  
 
  
 
 AngloGold Ashanti had no other committed lines of credit as of December 31, 2009.
 
 
 
 As  of  December  31,  2009,  the  Company  was  in  compliance  with  all  debt  covenants  and  provisions  related  to potential defaults.


Capital expenditure is expected to  be  approximately $1,081  million in 2010 and  scheduled debt repayments during 2010 are expected to be $1,292 million which mainly consists of the $1.0 billion payment made upon the maturity of the  $1.15  billion  Syndicated  Loan  Facility  in  December 2010.    AngloGold  Ashanti  intends  to  finance  its  capital expenditure and debt repayment requirements in  2010 from cash on hand, cash flow from operations, the proceeds from  the  sale  of  the  Tau  Lekoa  mine,  existing  and  new  replacement  credit  facilities,  long-term  debt  financing  and, potentially if deemed appropriate, the issuance of equity and equity linked instruments.
    AngloGold  Ashanti,  through  its  executive  and  treasury  committees,  reviews  its  short-,  medium-  and  long-term funding, treasury and liquidity requirements and positions monthly.   The board of directors also reviews these on a quarterly  basis  at  its  meetings.    AngloGold  Ashanti  believes  that  it  has  sufficient  working  capital  for  its  present requirements.
  
 
 Commitments and contingencies
  For  a  detailed  discussion  of  commitments  and contingencies,  see note  22  to the consolidated financial  statements “Commitments and contingencies”.
     (1)
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 Expiration per Period
 
 
 
 
 Commitment
 
 
 Total   Less than
 1
 
 1 – 3
 4 – 5
 Over 5
 
 
 
 
 
 
 amount
 year
 years
 years
 years
 
 
 
 (in millions)
 
 
 $
 $
 $
 $
 $
 
 
 
  
 
    
  
  (1)
 
      
  
  
 
      
  
  (2)
 
      
  
 Total
 
 
      
  
 
 
 
 
 
 
 
 
 (1)
 Including commitments through contractual arrangements with equity accounted joint ventures of $6
 million (2008: $11 million).
 
 
 
 (2)
 Excludes commitments through contractual arrangements with equity accounted joint ventures.


Derivatives accounted for at fair value
    In the normal course of its operations, the Company is exposed to gold and other commodity price, currency, interest rate,  liquidity  and  non-performance  risk,  which  includes  credit  risk.    The  Company  is  also  exposed  to  certain  by-product commodity price risk.  In order to manage these risks, the Company enters into derivative transactions that make use of both on- and off-balance sheet derivatives and has developed a risk management process to facilitate, control  and  monitor these  risks.  The  board  has  approved  and  monitors this  risk  management  process,  inclusive  of documented  treasury  policies,  counterpart  limits,  controlling  and  reporting  structures.  The  Company  does  not acquire, hold or issue derivatives for trading purposes.  A number of derivatives, including forward purchase and sale contracts  and call  and  put  options,  are  used  to  manage  commodity  price,  interest  rate  and  foreign  exchange  risks that arise out of the Company’s core business activities.
 
  The estimated fair values of financial instruments are determined at discrete points in time based on relevant market information.  The following table represents the change in fair value of all derivative financial instruments:
 
 
 $ (million)
            (1)
            
 Fair value of derivatives at December 31, 2009
   (1)Net losses on revaluation of derivatives.
   
 
 $ (million)
             
 Derivatives – net liabilities
  
    
  Fair value of derivatives at December 31
 
 Source of fair value (in millions)
 Maturity
 less than
 1 year
 $
 Maturity
 1 - 3
 years
 $
 Maturity
 4 - 5
 Years
 $
 Maturity
 excess of
 5 years
 $
 Total
 Fair
 value
 $
                 (1)
       (1)
 
 Fair value is calculated using the Black Scholes option formula and other formulae, using ruling market prices and interest  rates  which  are  obtained  from  international  banks and  are  liquid  and  actively  quoted  across the  full  time horizon of the tenor of the hedging contracts.
 
 Recent developments
  For a detailed discussion of recent developments, see note 31 to the consolidated financial statements “Subsequent events”.


Related party transactions
       
 Recently adopted accounting policies and pending adoption of new accounting standards
    AngloGold Ashanti’s accounting policies are described in note 4 to the consolidated financial statements “Significant accounting  policies”.    Recently  adopted  accounting  policies  are  described  in  note  2  to  the  consolidated  financial statements “Accounting changes”.  Recent pronouncements are described in note 4.27 to the consolidated financial statements “Recent pronouncements”.
     
 Critical accounting policies
    AngloGold Ashanti’s accounting policies are described in note 4 to the consolidated financial statements “Significant accounting  policies”.    The  preparation  of  the  Company’s  financial  statements  in  conformity  with  US  GAAP  require management  to  make  estimates  and  assumptions  that  affect  the  reported  amounts  of  assets  and  liabilities  and disclosures  of  contingent  assets  and  liabilities  at  the  date  of  the  financial  statements  and  the  reported  amounts  of revenues and expenses during  the year.  The following are considered to be the accounting policies  that are most critical to the Company’s results of operations, financial condition and cash flows.
   
 Using of estimates and making of assumptions
    The  most  critical  accounting  estimates  upon  which  AngloGold  Ashanti’s  financial  reporting  depends  are  those requiring estimates of Proven and Probable Reserves, recoverable ounces there from, and/or assumptions of future gold  prices.    Such  estimates  and  assumptions  affect  the  value  of  inventories  (which  are  stated  at  the  lower  of average  cost  or  net  realizable  value)  and  the  potential  impairment  of  long-lived  assets  and  intangibles  as  detailed below.  These estimates and assumptions also affect the rate at which depreciation and amortization are charged to earnings.    On  an  ongoing  basis,  management  evaluates  its  estimates  and  assumptions;  however,  actual  amounts could differ significantly due to the ultimate conclusion of uncertainties.
     
 Ore reserves and life-of-mines
    AngloGold Ashanti estimates on an annual basis its Ore Reserves at its mining operations. There are a number of uncertainties  inherent  in  estimating  quantities  of  reserves,  including  many  factors  beyond  the  Company’s  control. Estimates of Ore Reserves are based upon engineering evaluations of assay values derived from samplings of drill holes and other openings. Additionally, declines in the market price of gold may render certain reserves containing relatively  lower grades of mineralization  uneconomic to  mine.  Further,  availability  of permits, changes in operating and  capital  costs,  and  other  factors  could  materially  and  adversely  affect  Ore  Reserves.  The  Company  uses  its estimates of Ore Reserves to determine the unit basis for mine depreciation and closure rates, and to evaluate mine asset impairments. Changes in estimates of Ore Reserves could significantly affect these items.  At least annually, the Company reviews mining schedules, production levels and asset lives in the Company’s life-of-mine planning for all of the Company’s operating and development properties. Significant changes in the life-of-mine plans may occur as  a  result  of  mining  experience,  new  ore  discoveries,  changes  in  mining  methods  and  rates,  process  changes, investment  in  new  equipment  and  technology  and  gold  prices.  Based  on  the  life-of-mine  analysis  the  Company reviews  its  accounting  estimates  and  adjusts  depreciation,  amortization,  reclamation  costs  and  evaluation  of  each mine for impairment where necessary. Accordingly, this analysis and the estimates made therein have a significant impact on the Company’s results of financial condition.
 
 
 
 Drilling and related costs
    Drilling and related costs incurred on sites without an existing mine and on areas outside the boundary of a known mineral  deposit  that  contain  proven  and  probable  reserves  are  recorded  as  exploration  expenditures  and  are expensed as incurred.
    Drilling and related costs incurred to define and delineate a residual mineral deposit that has not been classified as proven and probable reserves at a development stage or production stage mine are capitalized when management determines  that  there  is  sufficient  evidence  that  the  expenditure  will  result  in  a  future  economic  benefit  to  the Company  in  the accounting  period when the expenditure is made.   Management evaluates whether or not there is sufficient  geologic  and  economic  certainty  of  being  able  to  convert  a  residual  mineral  deposit  into  a  proven  and probable  reserve  at  a  development  stage  or  production stage  mine,  based  on  the known  geologic  and  metallurgy, existing  mining  and  processing  facilities,  operating  permits  and  environmental  programs.    Therefore  prior  to


The  Company  understands  that  there  is  diversity  in  practice  within  the  mining  industry,  in  that  some  companies expense the drilling and related costs incurred to define and delineate residual mineral deposits that have not been classified  as  proven  and  probable  reserves  at  a  development  stage  or  production  stage  mine.  Had  AngloGold Ashanti expensed such costs as incurred,  net income, earnings per share and retained earnings would have been lower by approximately the following amounts:
 
  
 
  
   
     
  
   
 2009
 2008
 2007
 
 
  
   
     
  (1)
   
     
  
   
    
  
   
     
  
   
     
  
   
     (1)
 Impact per basic and diluted earnings per common share.
 
   
     
 Accounting for derivatives
    The  Company  accounts  for  derivative  contracts  in  accordance  with  the  FASB  ASC  guidance  for  derivatives  and hedging .
    The guidance requires all contracts that meet the definition of a derivative to be recognized on the balance sheet as either assets or liabilities and recorded at fair value. Gains or losses arising from remeasuring derivatives to fair value at  each  reporting  period  are  to  be  accounted  for  either  in  the  income  statement  or  in  accumulated  other comprehensive  income,  depending  on  the  use  and  designation  of  the  derivative  and  whether  it  qualifies for  hedge accounting. The key criterion, which must be met in order to qualify for hedge accounting, is that the derivative must be highly effective in offsetting the change in the fair value or cash flows of the hedged item.
    Contracts  that  meet  the  criteria  for  hedge  accounting  are  designated  as  the  hedging  instruments  hedging  the variability of forecasted cash flows from capital expenditure and the sale of production into the spot market, and are classified  as  cash  flow  hedges.    Where  a  derivative  qualifies  as  the  hedging  instrument  in  a  cash  flow  hedge, changes  in  fair  value  of  the  hedging  instruments,  to  the  extent  effective,  are  deferred  in  accumulated  other comprehensive  income  and  reclassified  to earnings  as product  sales  or  as  an  adjustment  to  depreciation  expense pertaining  to  capital  expenditure,  when  the  hedged  transaction  occurs.    The  ineffective  portion  of  changes  in  fair value of the cash flow hedging instruments is reported in earnings as gains or losses on non-hedge derivatives in the period in which they occur.
    All other contracts not meeting the criteria for the normal purchases and sales or hedge accounting, as defined in the FASB ASC guidance, are recorded at their fair market value, with changes in value at each reporting period recorded in earnings as gains and losses on non-hedge derivatives.
 
  The  estimated  fair  values  of  derivatives  are  determined  at  discrete  points  in  time  based  on  relevant  market information.    These  estimates  are  calculated  with  reference  to  the  market  rates  using  industry  standard  valuation techniques.
    AngloGold  Ashanti  does  not  acquire,  hold  or  issue  derivative  instruments  for  trading  purposes.    A  number  of products, including  derivatives,  are used to  manage  commodity price,  interest rate and foreign exchange  risks that arise out of the Company’s core business activities.  Forward purchase and sale contracts and call and put options are  used  by  the  Company  to  manage  its  exposure  to  gold and  other  commodity  prices,  interest  rate  and  currency fluctuations.


Revenue recognition
    AngloGold  Ashanti’s  revenues  are  derived  primarily  from  the  sale  of  gold  produced  at  its  mines.    Revenue  from product sales is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the seller’s price to the buyer is fixed or determinable and collectability is reasonably assured. Gold  is  a  liquid  commodity  that  is  dealt  with  on  the  international  markets,  and  gold  produced  by  the  Company’s mining operations is processed to saleable form at various precious metals refineries.
    
 Contingencies
    AngloGold  Ashanti  accounts  for  contingencies  in  accordance  with  the  FASB  ASC  guidance  for  contingencies.    It requires  the  recording  of  an  estimated  loss  for  a  loss  contingency  when  information  available  indicates  that  it  is probable  that  an  asset  has  been  impaired  or  a  liability  has  been  incurred,  and  the  amount  of  the  loss  can  be reasonably  estimated.    Accounting  for  contingencies  such  as  legal  and  income  tax  matters  requires  the  use  of judgments  to  determine  the  amount  to  be  recorded  in  the financial  statements.    By  their  nature, contingencies  will only be resolved when one or more future events occur or fail to occur and typically, those events will occur a number of years into the future.  The Company assesses such contingent liabilities, which inherently involves the exercise of significant  management  judgment  and  estimates  of  the  outcome  of  future  events.    Also,  see  “Taxation”  discussed below.
   
 
 Impairment of long-lived assets
    AngloGold Ashanti’s long-lived assets include property, plant and equipment, acquired properties, goodwill and other tangible assets.  In assessing the potential impairment of its long-lived assets held for use, the Company must make assumptions regarding estimated future cash flows and other factors relating to the respective assets. To the extent that  the  carrying  value  of  the  long-lived  asset  as  recorded  in  the  consolidated  financial  statements  exceeds  the undiscounted  cash  flows  associated  with  these  assets,  an  impairment  charge  is  recognized  in  the  consolidated financial statements  based on the fair value of the asset.   The Company performs impairment tests for goodwill at least annually during the fourth quarter and whenever certain indicators of impairment exist.  Impairment calculation assumptions are included in notes to the consolidated financial statements – Note 5 “Costs and expenses”.
       Taxation
    AngloGold Ashanti follows the liability method of accounting for deferred taxation whereby the Company recognizes the  tax consequences  of temporary differences by applying current statutory tax rates applicable to  future years to differences  between  financial  statement  amounts  and  the  tax  bases  of  certain  assets  and  liabilities.  Changes  in deferred tax assets and liabilities include the impact of any tax rate changes enacted during the year.  Deferred tax is estimated  at  the  future  average  anticipated  taxation  rates  at  which  temporary  differences  are  expected  to  reverse.  Future  average  anticipated  taxation  rates  are  determined  from  revenue  and  expenditure  outlined  in  life-of-mine business  plans  that  are  revised  annually.    When  a  deferred  tax  asset  arises  the  Company  reviews  the  asset  for recoverability  and  establishes  a  valuation  allowance  where  the  Company  determines  it  is  more  likely  than  not  that such an asset will not be realized. These determinations are based on the projected realization of tax allowances and tax losses.  If these tax assets are not to be realized, an adjustment to the valuation allowance would be required, which would be charged to income in the period that the determination was made.
 
  If the Company determines that it would be able to realize tax assets in the future in excess of the recorded amount thereof, an adjustment to reduce the valuation allowance would be recorded as a credit to income in the period that the determination is made.  Management classifies taxes payable based on the likelihood of the amount required to be  settled  within  twelve  months,  which  are  then  reported  within  current  liabilities.    All  other  taxes  payable  are recorded  within  non-current  assets.    The  Company  reasonably  expects  that  the  valuation  allowance  applied  to carried  forward  capital  losses  could  reverse  in  the  foreseeable  future  as  it  undertakes  a  capital  asset  realization program.
     
 
 Provision
 for environmental rehabilitation
   
 AngloGold  Ashanti’s  mining  and  exploration  activities  are  subject  to  various  laws  and  regulations  governing  the protection  of  the  environment.  The  Company  recognizes  management’s  best  estimate  for  asset  retirement


obligations in the period in which they are incurred. Actual costs incurred in future periods could differ materially from the estimates. Additionally, future changes to environmental laws and regulations, life of mine estimates and discount rates could affect the carrying amount of this provision. Changes in Mineral Reserves could similarly affect the useful lives of assets depreciated on a straight-line-basis, where those lives are limited to the life of mine.
    
 
 Share-based payments
    AngloGold  Ashanti  issues  equity-settled  share-based  payments  to  certain  employees.    Equity-settled  share-based payments  are  measured  at  fair  value  (excluding  the  effect  of  non-market  based  vesting  conditions)  at  the  date  of grant.    The  fair  value  determined  at  the  grant  date  of  the  equity-settled  share-based  payments  is  expensed  on  a straight-line basis over the vesting period, based on the Company’s estimate of the shares that will eventually vest and adjusted for the effect of non market-based vesting conditions.
    Fair  value  is  measured  using  the  Black-Scholes  pricing  model.    The  expected  life  used  in  the  model  has  been adjusted,  based  on  management’s  best  estimate,  for  the  effects  of  non-transferability,  exercise  restrictions  and behavioral considerations.
     
 
 Pension plans and post-retirement medical aid obligations
    The determination of AngloGold Ashanti’s obligation and expense for pension and provident funds, as well as post-retirement  health  care  liabilities,  depends  on  the  selection  of  certain  assumptions  used  by  actuaries  to  calculate amounts.  These  assumptions  are  described  in  Note  27  to  the  consolidated  financial  statements  “Provision  for pension  and  other  post-retirement  benefits”  and  include,  among  others,  the  discount  rate,  the  expected  long-term rate  of  return  of  plan  assets,  health  care  inflation  costs  and  rates  of  increase  in  compensation  costs.  While  the Company  believes  that  these  assumptions  are  appropriate,  significant  changes  in  the  assumptions  may  materially affect  pension  and  other  post-retirement  obligations  as  well  as  future  expenses,  which  may  result  in  an  impact  on earnings in the periods that the changes in the assumptions occur.
    The  main  assumptions  for  2009  relating  to  the  most  significant  defined  benefit  plan  were  the  discount  rate,  the expected  return  on  plan  assets  and  the  compensation  and  pension  plan  inflation  rates.  The  discount  rate  was determined using the South African bond yield rate (on the "benchmark" R186 bond) as a guide and adjusted for the taxation effects on pension plans.
    The assumed level of salary increases relative to inflation was advised by the AngloGold Ashanti directors as well as the  AngloGold  Ashanti  Human  Resources  department.    The  expected  return  on  plan  assets  were  based  on  the historical  market  performance  of  the  underlying  assets.    For  inflation  targets  the  published  Consumer  Price  Index (CPI)  by  the  Department  of  Statistics  as  well  as  the  South  African  Reserve  Bank  inflation  target  were  used  as  a guide. Pension increases were assumed to be at 90 percent of the assumed inflation rate, based on the respective Fund's pension increase policy.  Effects on results of operations Company and plan participants’ contributions to the defined benefit funds are disclosed in note 27 to the consolidated financial  statements  “Provision  for  pension  and  other  post-retirement  medical  benefits”.  The  total  Company contributions to defined contribution plans for the years ended December 31, 2009, 2008 and 2007 amounted to $53 million, $49 million and $51 million, respectively.   Change in pension trends The trend of the expected return on the plan assets is higher at 10.63 percent for the year ended December 31, 2009 when compared to 2008.  Based on the 2008 expected return of 9.28 percent on the defined benefit plan assets, the return  for  2009  amounted  to  $20  million  compared  to  the  actual  2009  return  of  $32 million.  The  long-term compensation and pension inflation increases estimated in 2008 at 5.25 percent and 3.60 percent, respectively, have increased to 7.50 percent and 4.95 percent, respectively, which is in line with current economic indicators.  Sensitivity analysis It is not the policy of AngloGold Ashanti to consider the sensitivity of the accounting figures to different assumptions. The  actual  short-term  salary  inflation  rate  used  for  the  2009  valuation  was  a  rate  of  7 percent  and  the  long-term salary inflation rate was 7.50 percent, which is in line with the actual average increases granted and expected future


increases.  For each 1 percent point variance in the actual return on the plan assets, the value in growth will vary by $3 million.
     
 
 Ore on Leach Pads
    The recovery of gold from certain oxide ores is achieved through the heap-leaching process. Under this method, ore is placed on leach pads where it is permeated with a chemical solution, which dissolves the gold contained in the ore. The resulting “pregnant” solution is further processed in a process plant where the gold is recovered. For accounting purposes, costs are added to leach pads based on current mining costs, including applicable depreciation, depletion and amortization relating to  mining operations. Costs  are removed from  the leach pad as  ounces are  recovered in circuit at the leach plant based on the average cost per recoverable ounce of gold on the leach pad.
    The engineering estimates of recoverable gold on the leach pads are calculated from the quantities of ore placed on the pads (measured tons added to the leach pads), the grade of ore placed on the leach pads (based on assay data) and  a  recovery  percentage  (based  on  metallurgical  testing  and  ore  type).  Leach  pad  production  cycles  vary  from several  months  to  multiple  years.  In  operations  with  multiple  year  leach  cycles,  approximately  65 percent  of  the placed  recoverable ounces are recovered in  the first year of leaching, with declining amounts each  year thereafter until the leaching process is complete.
    Although the quantities of recoverable gold placed on the leach pads are reconciled by comparing the grades of ore placed  on  pads  to  the  quantities  of  gold  actually  recovered  (metallurgical  balancing),  the  nature  of  the  leaching process inherently limits the ability to precisely monitor recoverability levels. As a result, the metallurgical balancing process  is  constantly  monitored  and  the  engineering  estimates  are  refined  based  on  actual  results  over  time. Historically,  AngloGold  Ashanti’s  operating  results  have  not  been  materially  impacted  by  variations  between  the estimated and actual recoverable quantities of gold on its leach pads. For operations with long-term leach production cycles, variations in recovery estimates from new metallurgical data or production variances would be accounted for as an adjustment to the recoverable ounces and the average cost per recoverable ounce of gold on the leach pad.  Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis. The ultimate recovery of gold from  a  pad  will  not  be  known  until  the  leaching  process  has  been  concluded.  Feasibility  studies  in  North  America indicate that in terms of the mine life extension project at Cripple Creek leaching activities could extend to 2030.
    The  costs  of  materials  currently  contained  on  the  leach  pad  are  reported  as  a  separate  line  item.    As  at December 31, 2009 and 2008, $40 million and $49 million, respectively, was classified as short-term as the Company expects the related gold to be recovered within twelve months.  The short-term portion of materials on the leach pad is determined by multiplying the average cost per ounce in inventory by the expected production ounces for the next twelve months.  Heap-leach pad inventory occurs in two forms: (1) gold recoverable but yet to be dissolved (i.e. gold still in the ore), and (2) gold recoverable from gold dissolved in solution within the leach pad (i.e. pore water).  This estimate  calculation  was  used  in  determining  the  short-term  portion  of  materials  on  the  leach  pad  as  at December 31, 2009.  As at December 31, 2009, $324 million was classified as long-term compared with $261 million as at December 31, 2008.


5C.
 RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
    Research and development expenditure included in the income statement amounted to $3 million, $1million and $10 million during 2009, 2008 and 2007 respectively..
 
 
 5D.
 TREND INFORMATION
   
 Outlook.  Gold production for 2010 is forecast to be between 4.5 million and 4.7 million ounces subject to stability and availability of power in South Africa and other factors.
    Capital  expenditure  is  expected  to  be  approximately  $1,081 million  in  2010  (2009: $1,027 million),  of  which 36 percent relates to South Africa, 14 percent to Ghana and 23 percent to Brazil.
    Our  production  outlook  is  subject  to,  among  other  things,  unplanned  stoppages  and  safety-related  interventions, which may affect production. See “Certain Forward-Looking Statements” which are included in this annual report.
 
 5E.
 OFF-BALANCE SHEET ARRANGEMENTS
    AngloGold  Ashanti  does  not  engage  in  off-balance  sheet  financing  activities,  and  does  not  have  any  off-balance sheet  debt obligations, special purpose entities or unconsolidated affiliates.   The  most significant off-balance sheet items are normal purchase and normal sale exempt contracts and unaccrued future rehabilitation obligations, each of which is discussed below.
   
 Normal purchase and normal sale exempt contracts
        During 2009, gold derivative positions to the value of $797 million were accelerated and settled as part of a hedge buy back exercise.  Of these accelerated settlements, the majority, being $580 million, were previously designated as NPSE contracts, allowing them to be accounted for off-balance sheet in prior periods.  A further $217 million was also incurred in accelerating the cash settlement of existing non-hedge derivative contracts.  However, as a result of the accelerated cash settlement of the NPSE contracts during July 2009, the provisions of the FASB ASC guidance for derivatives  and  hedging,  necessitated  a  review  of  the  continuing  designation  of,  and  accounting  treatment  for,  the remaining  NPSE  contracts  that  were  not  part  of  the  accelerated  settlement.    As  the  Company  will  continue  to consider alternatives to reduce its outstanding gold derivatives position in future periods including, where appropriate, the  accelerated  settlement  of contracts  previously  qualifying for  the  NPSE designation,  management concluded,  in accordance  with  the  guidance  for  derivatives  and  hedging,  to  re-designate  all  remaining  NPSE  contracts  as  non-hedge  derivatives  and  to  account  for  such  contracts  at  fair  value  on  the  balance  sheet  with  changes  in  fair  value accounted for in the income statement.
   
 Future rehabilitation liability
    The  unaccrued  portion  of  the  future  rehabilitation  liability  is  an  off-balance  sheet  obligation.    See  note 21  to  the consolidated financial statements “Provision for environmental rehabilitation”.


169
 
  
 
 5F.
 TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
    
   As at December 31, 2009 AngloGold Ashanti had the following known contractual obligations:
  
  
         
 Contractual Obligations
  
 Total
 Less than
 1 year
 1-3
 3-5
 More than
 5 years
  
 
 
  
 $
 $
 years
 years
 $
  
 
 (in millions)
  
 
 
 
 $
 $
 
 
  
 
 Long-term debt obligations including interest
  (1)
 2,115
 1,316
 69
 670
 60
  
 
 Capital lease obligations
  
 93
 10
 19
 16
 48
  
 
 Operating lease obligations
  
 15
 9
 4
 2
 -
  
 
 Purchase obligations
  
 
  
 
 -  Contracted capital expenditure
  (2)
 131
 131
 -
 -
 -
  
 
 -  Other purchase obligations
  (3)
 442
 346
 39
 49
 8
  
 
 Environmental rehabilitation costs
  (4)
 2,184
 27
 43
 66
 2,048
  
 
 Derivatives
  (5)
 2,371
 2,195
 -
 175
 1
  
 
 Pensions and other post retirement medical obligations
  (6)
 164
 15
 30
 32
 87
  
 
 Uncertain taxes
  (7)
 149
 111
 -
 -
 38
  
 
 Total
  
 7,664
 4,160
 204
 1,010
 2,290
  
 
         (1)
 Interest calculations are at the rate existing at the year end. Actual rates are set at floating rates for some of the debt (Refer Note 20 of Item 18).
 
 (2)
 Represents contracted capital expenditure for which contractual obligations exist.  Amounts stated include commitments of equity accounted joint ventures.
   
 (3)
 Other  purchase  obligations  represent  contractual  obligations  for  mining  contract  services,  purchase  of  power,  supplies, consumables, inventories, explosives and activated carbon.  Amounts stated exclude purchase obligations of equity accounted joint ventures.
 
 (4)
 Operations  of  gold  mining  companies  are subject  to  extensive  environmental  regulations  in  the  various  jurisdictions  in  which they operate.  These regulations establish certain conditions on the conduct of operations by AngloGold Ashanti.  Pursuant to environmental regulations, AngloGold Ashanti is also obligated to close their operations and reclaim and rehabilitate the lands upon which it  conducted  its mining and  gold  recovery operations.    The present  estimated closure  costs at existing operating mines  and mines in various stages of closure  are reflected in  this table. For more information of  environmental rehabilitation obligations,  see  "Item  4B.:  Business  overview  -  Sustainable  development  :  Environment,  community  and  human  rights". Amounts stated include a total estimated liability of $92 million in respect of equity accounted joint ventures.
 
 (5)
 Estimated fair value of all derivatives. Also see “Item 5B.: Liquidity and capital resources – Derivatives accounted for at fair value”. Amounts stated include derivatives of equity accounted joint ventures. Warrants on shares of $5 million dollars not included in derivatives total.
 
 (6)
 Represents payments for unfunded plans or plans with insufficient funding.
 
 (7)
 Certain  of  the  uncertain  tax  positions  will  prescribe  within  the  next  12  months  which  may  result  in  the  total  amounts  of unrecognized tax benefits decreasing.


ITEM 6: DIRECTORS, EXECUTIVE MANAGEMENT AND EMPLOYEES
 
 6A.
 DIRECTORS AND SENIOR MANAGEMENT
 
 Directors
 
 AngloGold  Ashanti  has  a  unitary  board  structure  which  currently  comprises  two  executive  directors  and  six  non-executive directors.  Certain information with respect to AngloGold Ashanti’s directors as at December 31, 2009 is set forth below:
 
 
 
 
 Year first
 Name
 Age
 Position
 appointed
 (1)
 
          (2)(3)(5)
      (4)
      (2)
          (2)
     (6)
      
 (1)
 Directors  who  do  not  have  a  contract  of  employment  with  the  company  (non-executive  directors)  serve  for  a  period  of  three  years  unless  re-
 elected.  At each annual general meeting, directors appointed since the previous annual general meeting are required to retire, but are eligible for re-election.  In addition, one-third of the non-executive directors (rounded down to the next whole number), must retire according to seniority or by lot but may be re-elected.
 (2)
 Member of the audit and corporate governance committee.
 (3)
 Appointed as chairman with effect from May 1, 2002.
 (4)
 Appointed as deputy chairman with effect from May 1, 2002.
 (5)
 To retire from the board at the conclusion of the annual general meeting to be held on May 7, 2010.
 (6)
 Resigned from the board effective 5 May 2009 and rejoined the board effective 1 June 2009.
 
 EXECUTIVE DIRECTORS
 
 MR M CUTIFANI (51) (Australian)  BE (Min. Eng)  Chief Executive Officer
 
 Mark Cutifani was appointed to the board of AngloGold Ashanti on September 17, 2007 and as Chief Executive Officer on  October 1,  2007.  He  is  chairman  of  the  Executive  Committee  and  a  member  of  the  Transformation  and  Human Resources Development, Safety, Health and Sustainable Development, and Investment committees. Mark has considerable experience in gold mining, having been associated with the industry since 1976. Prior to joining AngloGold Ashanti, he held the position of chief operating officer at CVRD Inco, a Toronto-based company, where he was responsible for Inco's global nickel business.
 
 MR S VENKATAKRISHNAN (VENKAT) (44) (British)  BCom, ACA (ICAI)  Chief Financial Officer
 
 Venkat  joined  AngloGold  Ashanti  on  July 1,  2004  from  Ashanti  Goldfields  Company  Limited  (Ashanti)  where  he  was Chief Financial Officer until that company's merger with AngloGold Limited in May 2004. He was appointed to the board on  August 1, 2005,  is a  member of the  Executive and Investment committees  and is invited to attend meetings of the Audit and Corporate Governance Committee. He is a member of the Treasury Committee, a sub-committee of the Audit and Corporate Governance Committee.
  Venkat has extensive financial experience, having  been a director in the reorganization services division of Deloitte & Touche in London prior to joining Ashanti in 2000.


NON-EXECUTIVE DIRECTORS  Mr RP Edey (67) (British) FCA Chairman and independent non-executive
  Russell  Edey  was  appointed  to  the  board  of  AngloGold  Ashanti  on  April 1,  1998,  deputy  chairman  on  December 11, 2000 and chairman on May 1, 2002. Based in the United Kingdom, he is a non-executive director of Old Mutual plc, a member of the Counseil de Surveillance of Paris Orleans SA and a  non-executive director of a  number of  companies within the NM Rothschild Group. Russell is chairman of the Investment and Nominations committees and a member of the  Audit  and  Corporate  Governance,  and  Remuneration  committees.  Russell  will  be  retiring  from  the  board  at  the conclusion of the annual general meeting to be held in May 2010. Dr TJ Motlatsi (58) (South African) Hon DSoc Sc (Lesotho) Deputy chairman and independent non-executive
  James Motlatsi was appointed to the board of AngloGold Ashanti on April 1, 1998 and deputy chairman on May 1, 2002. He  is  chairman  of  the  Transformation  and  Human  Resources  Development,  and  the  Party  Political  Donations committees  and  a  member  of  the  Safety,  Health  and  Sustainable  Development,  Nominations  and  Remuneration committees.
  James has substantial experience in and knowledge of the mining industry in general and of South Africa in particular. His  association  with  the  industry  in  South  Africa spans  more  than  30  years  in various  positions  including  that  of  past president of the National Union of Mineworkers. He is the executive chairman of TEBA Limited, a service organization primarily responsible for the recruitment of mineworkers for the South African mining industry.MR FB ARISMAN (65) (American)  MSc (Finance)  Independent non-executive
  Frank  Arisman  joined  the  board  of  AngloGold  Ashanti  on  April 1,  1998.  He  serves  on  four  board  committees: Transformation  and  Human  Resources  Development,  Audit  and  Corporate  Governance,  Nominations  and Remuneration. He is a member of the Treasury Committee, a sub-committee of the Audit and Corporate Governance Committee. Since 2008, he has chaired the Financial Analysis Committee, a special purpose committee of the board set up to consider the funding needs of AngloGold Ashanti. Frank,  who  resides  in  the  USA,  has  a  rich  background  in  management  and  finance  through  his  experiences  at  JP Morgan where he held various positions prior to his retirement.MR WA NAIRN (65) (South African)  BSc (Mining Engineering)  Independent non-executive
  Bill Nairn has been a member of the board of AngloGold Ashanti since January 1, 2000 and chairs the Safety, Health and  Sustainable  Development  Committee  and  is  a  member  of  four  other  committees:  Transformation  and  Human Resources  Development,  Investment,  Party  Political  Donations  and  Nominations.  Bill,  a  mining  engineer,  has considerable technical experience, having been the group technical director of Anglo American plc until 2004 when he retired from the company. Having completed the three-year cooling period, Bill is now considered an independent non-executive director of AngloGold Ashanti. PROF LW NKUHLU (65) (South African)  BCom, CA (SA), MBA (New York University)  Independent non-executive Wiseman Nkuhlu was appointed to the board on August 4, 2006. He has been the chairman of the Audit and Corporate Governance Committee since May 5, 2007, having served as deputy chairman from August 4, 2006. He also serves as a member of the Nominations, Party Political Donations and Remuneration committees. In addition, he is the chairman of  the  Treasury  Committee,  a  sub-committee  of  the  Audit  and  Corporate  Governance  Committee.  Wiseman,  a respected South African academic, educationist, professional and business leader, served as Economic Adviser to the former President of South Africa, Mr Thabo Mbeki, and as Chief Executive of the Secretariat of the New Partnership for Africa's Development (NEPAD) from 2000 to 2005. From 1989 to 2000, he served as a director on a number of major


South  African  companies,  including  Standard  Bank,  South  African  Breweries,  Old  Mutual,  Tongaat  Hulett,  BMW  and JCI. Wiseman was President of the South African Institute of Chartered Accountants from 1998 to 2000 and Principal and  Vice  Chancellor  of  the  University  of  Transkei  from  1987  to  1991.  He  is  also  a  member  of  the  board  of  Datatec Limited. He was elected President of the Geneva-based International Organization of Employers (IOE) in May 2008 for a period of two years. He is a member of the Financial Crisis Advisory Group of the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB).
 MR SM PITYANA (50) (South African)  BA (Hons) (Essex), MSc (London); Dtech (Honoris) (Vaal University of Technology)  Independent non-executive
 Sipho  Pityana  joined  the  board  of  AngloGold  Ashanti  on  February 13,  2007  and  assumed  the  chairmanship  of  the Remuneration  Committee  on  August 1,  2008.  He  is  a  member  of  the  Safety,  Health  and  Sustainable  Development, Party  Political  Donations,  Investment,  Nominations  and  the  Transformation  and  Human  Resources  Development committees. Sipho has extensive experience in management and finance, and has occupied strategic roles in both the public  and  private  sectors,  including  that  of  Director  General  of  the  national  departments  of  both  labor  and  foreign affairs.  He  was  formerly  a  senior  executive  of  Nedbank  Limited  and  is  currently  the  executive  chairman  of  Izingwe Holdings  (Proprietary)  Limited,  a  local  empowerment  group  and  a  significant  investor  in  mining,  engineering, infrastructure and logistics, and AngloGold Ashanti’s BEE partner. He serves as a non-executive director on the boards of several other South African companies.
 Board movements during 2009Mr R E Bannerman resigned from the board on May 15, 2009.  Mr J H Mensah resigned from the board on May 15, 2009. Professor LW Nkuhlu resigned from the board effective May 5, 2009 and was reappointed with effect from June 1, 2009.  In  terms  of  the  company’s  memorandum  and  articles  of  association,  there  is  no  mandatory  retirement  age  for  non-executive directors.  Non-executive directors do not hold service contracts with the company.
 
 In accordance with the articles of association of AngloGold Ashanti, all non-executive directors must retire at least once every three years by rotation and may be re-elected by shareholders.  At the annual general meeting held on May 15, 2009,
    Messrs  R  E  Bannerman  and J  H  Mensah  who  retired  by  rotation  at  the  annual  general  meeting  did  not  make themselves available for re-election and retired from the board at the conclusion of the annual general meeting.
 
 The  directors  retiring  by  rotation  at  the  annual  general  meeting  to  be  held  on  May 7,  2010  in  terms  of  the  articles  of association are, Mr FB Arisman, who offers himself for re-election, and Mr RP Edey, who will retire as chairman of the board and as a member of the board from the conclusion of the annual general meeting. Prof LW Nkuhlu, who was appointed as a director during the year, will retire at the annual general meeting and offers himself for re-election.
 
 
 EXECUTIVE COMMITTEE
 
 This  committee,  chaired  by  Mr  Cutifani,  the  chief  executive  officer,  is  responsible  for  overseeing  the  day-to-day management  of  the  company’s  affairs  and  for  executing  the  decisions  of  the  board.  The  committee  meets  at  least monthly  and  is  actively  involved  in  the  strategic  review  of  the  company’s  values,  safety  performance,  operation  and exploration profiles and financial status.
 
 The business experience and functions of the executive committee members of AngloGold Ashanti, as at December 31, 2009 are as follows.
 
 DR CE CARTER (47)  BA (Hons), DPhil, EDP  Executive Vice President – Business Strategy and Human Resources
 
 Charles  Carter  has  worked  in  the  mining  industry  in  South  Africa  and  the  United  States  since  1991,  in  a  range  of corporate roles with  Anglo American  Corporation, RFC Corporate Finance and AngloGold Ashanti. He was  appointed Executive Vice President – Business Strategy in December 2007 and is responsible for corporate strategy and business planning, risk management and investor relations. On November 17, 2009, he assumed additional responsibility for the group’s Human Resources function.


MR RN DUFFY
  BCom, MBA  Executive Vice President – Continental Africa
 
  AngloGold. In November 2000, he was appointed head of business planning and in 2004 assumed responsibility for all new business opportunities globally. In April  2005, this role was  expanded to  include  greenfields exploration. He  was appointed to the Executive Committee in August 2005. Richard was appointed as Executive Vice President – Africa in July 2008.
 
 MR GJ EHM (53)  BSc Hons, MAusIMM, MAICD  Executive Vice President – Tanzania
 
 Graham  Ehm  has,  since  1979,  gained  diverse  experience  in  mine  operations  and  project  management,  covering  the nickel, phosphate, copper, uranium and gold sectors. He was appointed General Manager Sunrise Dam Gold Mine in 2000, Regional Head – Australia in 2006 and Executive Vice President – Australasia in December 2007. He assumed his current role as Executive Vice President – Tanzania on June 1, 2009.
 
 MR RW LARGENT (49)  BSc (Min. Eng), MBA  Executive Vice President – Americas
 
 Ron Largent has  been with AngloGold Ashanti  since 1994. He has served on the Board of Directors for the Colorado Mining Association, California Mining  Association  and Nevada Mining Association.  In 2001, he  was appointed general manager of the Cripple Creek & Victor Gold Mine and took up his current role as Executive Vice President – Americas in December 2007.
 
 MR RL LAZARE (53)  BA, HED, DPLR, SMP  Executive Vice President – South Africa
 
 Robbie Lazare joined Anglo American Gold and Uranium Division in 1982, working in a variety  of management posts until 1999  when he was appointed general manager of  TauTona. In December 2004, he was appointed an executive officer with responsibility for South African operations and in July 2008, Executive Vice President – Human Resources. From November 17, 2009, Robbie was assigned to lead a strategy review of the South African operations and is now responsible for the South Africa region.
 
 MR MP LYNAM (48)  BEng (Mech)  Vice President – Finance, Treasury and Company Secretarial
 
 Mark Lynam joined the Anglo American group in 1983 and has been involved in the hedging and treasury areas since 1990.    In  1998,  he  joined  AngloGold  as  treasurer  and  was  appointed  an  executive  officer  in  May  2004.  He  was appointed Senior Vice President – Finance and Treasury in July 2008.
 
 MR AM O'NEILL (58)  BSc (Mining Engineering), MBA  Executive Vice President – Business and Technical Development
 
 Tony  O’Neill  joined  AngloGold  Ashanti  in  July  2008  as  Executive  Vice  President  –  Business  and  Technical Development, having consulted to the company prior to this on its asset portfolio strategy. His extensive career in mining since 1978 included the roles of executive – operations at Newcrest Mining Limited and executive general manager for gold at Western Mining Corporation.MR TML SETILOANE (50)FAE, BSc (Mech Eng)  Executive Vice President – Business Sustainability
  Thero Setiloane joined AngloGold in May 2003 from Real Africa Holdings, where he had been an executive director. He is the chairman of Rand Refinery Limited. He was appointed an executive officer and a member of AngloGold Ashanti's Executive Committee in February 2006 and as Executive Vice President – Business Sustainability in December 2007.


MS YZ SIMELANE (44)  BA LLB, FILPA, MAP  Senior Vice President – Corporate Affairs
 
 Yedwa Simelane joined AngloGold in November 2000 from the Mineworkers' Provident Fund where she was the senior manager of the Fund. She was appointed an executive officer in May 2004 and Vice President – Government Relations in July 2008. In November 2009, she was appointed Senior Vice President – Corporate Affairs.
 
 MR NW UNWIN (57)  BA  Executive Vice President – Corporate Services
 
 Nigel  Unwin  joined  Anglo  American  as  a  human  resources  trainee  in  1974  and  spent  18  years  in  operations  and corporate roles. He then worked in the retail sector (clothing, footwear, textiles and accessories) for seven years before joining AngloGold in  1999 as an  executive officer.  Following the acquisition  of Acacia  Resources by AngloGold at the end of 1999, he managed the integration of the two companies in Australia before taking over the human resources and information  technology  portfolios  in  2001.  He  was  appointed  Executive  Vice  President  –  Corporate  Services  in  July 2008.
 
 OFFICE OF THE COMPANY SECRETARY
 
 MS L EATWELL (55)  FCIS, FCIBM
 
 Lynda  Eatwell  joined  AngloGold  in  2000  as  assistant  company  secretary  and  was  appointed  company  secretary  in December 2006. She is responsible for ensuring compliance with statutory and corporate governance requirements and the regulations of the stock exchanges on which AngloGold Ashanti is listed.
 
 COMPETENT PERSONS
 
 As part of it suite of annual reports, AngloGold Ashanti produces a Mineral Resource and Ore Reserves statement and all the information  in this report that relates  to Exploration  Results, Mineral Resources and Ore Reserves  is based on information compiled by the Competent Persons.
  During  the  past  decade,  the  company  has  developed  and  implemented  a  rigorous  system  of  internal  and  external reviews of Exploration Results, Mineral Resources and Ore Reserves.  A documented chain of responsibility exists from the Competent Persons at the operations to the Company’s Mineral Resource and Ore Reserves Steering Committee.  Accordingly,  the  Chairman  of  the  Mineral  Resources  and  Ore  Reserves  Steering  Committee,  Mr V  A  Chamberlain, assumes responsibility for the Mineral Resource and Ore Reserve processes for AngloGold Ashanti and is satisfied that the Competent Persons have fulfilled their responsibility.
 
 VA Chamberlain(47)  MSc (Mining Engineering), BSc (Hons) (Geology), MAusIMM Vaughan has 24 years experience and holds a Bachelor of Science (Honors) degree in Geology from the University of Natal and a Masters degree in Mining Engineering from the University of the Witwatersrand. He started his career with Anglo American Corporation in 1987 as a geologist at Western Deep Levels East Mine (now TauTona mine). He joined AngloGold  in  1998  and  currently  holds  the  position  of  Vice  President  –  Geosciences  and  is  chairman  of  the  Mineral Resources and Ore Reserves Steering Committee.


6B.
 COMPENSATION
 REMUNERATION REPORT
 The Remuneration Committee sets and monitors executive remuneration for the company, in line with the executive remuneration policy. This policy has as its objectives to: •
   align the behavior and performance of executives with the company's strategic goals, in the overall interests of shareholders;
  ensure the  appropriate balance between  short-, medium-  and  long-term rewards and incentives, with the latter being closely  linked to structured company  performance targets  and  strategic objectives  that are in  place from time to time; and
  ensure  that  regional  management  is  competitively  rewarded  within  a  global  remuneration  policy,  which recognizes both local and global market practice.
 The company aims to be the leading gold mining company in the medium term and the leading mining company in the long term. In order to achieve this, the company must be in a position to attract the best talent available in the industry and  its  remuneration  package  must  therefore  be  comparable  to  those  of  the  leading  mining  companies  globally.  The remuneration policy is devised to support this business strategy. In particular the Remuneration Committee is responsible for: •
 the  remuneration  packages  for  executive  directors  and  other  members  of  the  executive  committee  of  the company  including,  but  not  limited  to,  basic  salary,  performance-based  short-  and  long-term  incentives, pensions, and other benefits; and
   The following principles are applied to give effect to the remuneration policy and to determine executive remuneration: •
 To attract, reward and retain executives of the highest caliber, executive remuneration is benchmarked against a comparator  group of  global  and  selected  South  African  mining  and  multi-national  companies.  The  most  recent benchmarking  exercise  conducted  by  independent  consultants  indicates  that  the  total  remuneration  of  the executive directors is close to the median of the comparator group, but the remuneration of the Executive Vice Presidents  (EVPs)  lags  that  of  the  peer  group.  Specific  cash-based  retention  plans  (settled  after  a  three-year period) have been put in place to address this issue. However, a systemic adjustment of the remuneration levels for  executives  and  senior  management  is  required  to  ensure  that  the  company’s  remuneration  levels  are consistent with global pay levels, and that the company can compete effectively in the global market.
  To ensure the appropriate balance between short-, medium- and long-term incentives, annual remuneration is a combination  of  base  pay  and  short-  and  long-term  incentives,  with  salary  comprising  about  35 percent  – 45 percent of annual remuneration if the bonus and LTIP targets are achieved.
  To align the behavior and performance of executives with the company’s strategic goals, all incentive plans align performance  targets  with  shareholder  interests.  The  quantum  of  the  short-term  incentive  and  related  bonus shares  is  determined  with  respect  to  current  performance, while  the  vesting  of  the  LTIP  awards  is  determined with respect to company performance over the three years following the date of grant.
 During 2009, the key remuneration decisions taken were as follows: •
 In  2009,  the  Chief  Executive Officer’s  initial  two-year  contract  was  replaced  by  a  contract  with  a  twelve-month notice  period  and  his  remuneration  package  restructured  in  accordance  with  the  conditions  of  employment  for permanent employees.
  The  Chief  Financial  Officer’s  offshore  payment  was  increased  to  cater  for  tax  payable  on  this  amount  from April 1, 2009.
 As  a  result  of  the  benchmarking  exercise  mentioned  above,  adjustments  in  excess  of  South  African  inflationary increases  were  made  to  close  the  gap  between  the  basic  salaries  of  EVPs  and  the  comparator  group  median.  The outcome of this review, as it affects EVP basic salaries, is explained further in this report. In addition, PricewaterhouseCoopers was engaged to assess specifically, the company’s compliance with King III from a remuneration perspective. Some steps will be taken in 2010 to align with the King III requirements in part, but work on this will be ongoing through 2010 to ensure compliance by 2011. At  the annual general meeting of shareholders to be held on May 7, 2010, shareholders  will be asked to approve the policy as outlined in this report and that the board of directors be authorized to do all such acts as may be necessary to implement the remuneration policy for 2010 as summarized herein.


REMUNERATION COMMITTEEDuring 2009, members of the Committee comprised the following non-executive directors:
             During the year, four meetings of the Remuneration Committee were held.  All directors attended those meetings they were entitled to attend, except Dr Motlatsi who was unable to attend one meeting.
                  All  meetings  of  the  committee  are  attended  by  the  chief  executive  officer  and  executive  vice  president  –  human resources,  except  when  their  own  remuneration  or  benefits  are  being  discussed.  The  services  of PricewaterhouseCoopers were retained to act as independent, expert advisers on executive remuneration.  EXECUTIVE REMUNERATIONExecutive  remuneration  takes  into  account  remuneration  paid  to  members  of  the  Executive  Committee.    Executive directors’ remuneration and the remuneration paid to the other members of the Executive Committee currently comprise the following elements:
  •            The  performance  of  each  executive  director  is  assessed  relative  to  the  prevailing  business  climate  and  market conditions,  as  well  as  to  annual  evaluations  of  the  achievement  of  key  predetermined  objectives.    Bonuses  paid  to executive directors are a reflection of the performance of each of the directors and the company as a whole.   Each component is described in more detail below:
  • Basic salary is subject to annual review by the Remuneration Committee and is reviewed with reference to the  market  data  of  a group  of  comparator companies  in  the  South  African  and  relevant  international  markets.  The  median  of  the  comparator  group  is  the  primary  point  of  reference  for  the  remuneration  policy.  However,  the  transition from a primarily South African company to a global company has resulted in the actual remuneration of  management  below  the  executive  director  level,  lagging  significantly.  The  individual  salaries  of  executive  management  are  reviewed  annually  in  accordance  with  their  own  performance,  experience,  responsibility  and  company performance.  Pensions  and  risk  benefits:  There  is  a  range  of  retirement  funds  to  which  executive  management  belong,  which is dependent on the country in which they work and the individual’s nationality. For example, South African  executive  management  belong  to  the  AngloGold  Ashanti  Pension  Fund  while  executive  management  who  are  non-South  African  citizens  but  working  in  South  Africa  have  the  option  of  electing  a  retirement  benefit  in  their  country  and  currency  of  choice,  in  which  case,  the  company  contributes  an  amount  equal  to  the  contribution  made  for  other  AngloGold  Ashanti  executives.  Death  and  disability  cover  reflects  best  practice  amongst  comparable employers in South Africa.  Other  benefits:  Executive  management  are  members  of  an  external  medical  aid  scheme,  which  covers  the  individual and his or her immediate family.


•
 Bonus Share Plan (BSP) is a short-term incentive plan under which award levels are determined with reference to  the  achievement of  a  set of  stretched  company  and  individual  performance  targets.  For  2009,  the  company targets were based on performance measures including: •
         A safety multiplier was also applied so that the safety record could be taken into account when determining the extent to which performance targets are achieved. The  weighting  of  the  respective  contribution  of  company  and  individual  targets  at  the  executive  management level is 60 percent company and 40 percent individual. The bonus paid comprises two separate parts: •   a cash bonus which is payable at the end of the relevant financial year (50 percent); and •   an equity bonus which is settled by way of a BSP award of equal value to the cash bonus. The BSP awards vest over a two-year period and vesting is subject to the individual being in the employ of the group  at  the  date  of  vesting.  In  respect  of  the  BSP  awards  granted  after  1  January  2008,  40 percent  of  the awards vest on the first anniversary from the date of grant and the remaining 60 percent of awards vest on the second anniversary from the date of grant. Provided that the individual has not exercised any BSP awards during the  vesting  period,  he  or  she  will  be  eligible  to  receive  an  additional  20 percent  in  BSP  awards  on  the  third anniversary from the date of grant. The  maximum  bonus  achievable  under  the  BSP  (expressed  as  a  percentage  of  basic  salary)  is  shown  in  the table below. For these purposes, basic salary includes offshore payments:
                                       In  respect  of  2009,  the  performance  targets  imposed  on  BSP  awards  (cash  bonus  and  share  awards)  were achieved at a level of 79.66 percent. The payments made under the BSP in respect of the 2009 financial year to executive management are disclosed in this Remuneration Report. In  respect  of  the  2010  BSP  awards,  the  performance  targets  to  be  satisfied  will  be  based  on  the  targets summarized above and no changes to the maximum bonuses or on-target bonuses are proposed. Cash  payments,  equal  in  value  to  the  dividends  which  would  have  been  paid  had  actual  shares  been  issued during the vesting period, were made when the BSP awards granted in 2006 vested during 2009.
  Long-Term  Incentive  Plan  (LTIP):  The  objective  of  the  LTIP  is  to  align  the  interests  of  the  executive management with those of the company and the shareholders over the medium to long term.
  Under  the  LTIP,  executive  management  are  granted  a  right  to  receive  shares  in  the  company,  subject  to performance conditions being achieved, over the specified performance period and continued employment with the group.


The performance targets used for the vesting of the LTIP awards are determined annually by the Remuneration Committee and link  directly  to the  company’s strategy. The  LTIP  awards  are granted with a three-year vesting period. For awards granted in 2009, the company targets were based on measures including: •
         LTIP awards will vest on the following basis for the 2009 and 2010 awards: 1.
 Earnings per share
  EPS growth of at least 2 percent, net of US inflation per year over the three-year vesting period. Partial vesting occurs at 2 percent growth per year and full vesting at 5 percent growth per year
 2.
 Total shareholder return
  TSR relative to four global gold companies, Barrick, Gold Fields, Harmony and Newmont. For vesting of the 2009 and 2010 LTIP awards to occur, the company’s TSR has to be at least equal to the third place performer from the comparator group for partial vesting, and second or better for full vesting.
 3.
 Strategic target
    
 The  company’s  safety  performance  has  become  the  primary  strategic  target  from  an  operating perspective  and  it  is  essential  that  the  company’s  performance  shows  significant  improvement.  The target  is  a  20 percent  year-on-year  improvement  in  the  fatal  injury  frequency  rate  (FIFR)  and  in  the lost-time injury frequency rate (LTIFR) during the period.  For partial vesting, a minimum improvement of 10 percent per year must be achieved.
 ii)  Reserve and resource ounce generation (20 percent weighting)
 The target per annum is at least 9Moz at the measured and indicated resource level, and 5Moz at the published reserve level for full vesting, and 7Moz and 3Moz respectively for partial vesting.
  In  this  context,  partial  vesting  means  that  50 percent  of  the  weighted  target  is  achieved  (except  in  the  case  of TSR where partial vesting means a 40 percent achievement of target) while full vesting results in a 100 percent achievement.
 
 The value of awards which may be granted under the LTIP by reference to the face value of the awards as at the date of grant and expressed as a percentage of basic salary, is shown in the table below. In this context, “face value” means the value of the award at the current share price (i.e. share price x number of shares under award) and “expected value” means the future value of the award taking into account the probability of the performance targets being achieved – an estimated probability of 60 percent has been applied for this purpose. In this context, basic salary includes offshore payments:
 
                      
 The  LTIP  awards  granted  in  respect  of  the  2010 financial  year  to executive  management  are  disclosed  in  this Remuneration Report under the Share Incentive Scheme section. In  respect  of  the  LTIP  awards  granted  in  2007  which  vested  during  2010,  56 percent  of  the  award  vested following the testing of the performance conditions. Further details are disclosed herein. In  respect  of  the  LTIP  awards  granted  in  2010,  the  performance  targets  to  be  satisfied  will  be  based  on  the targets summarized above and no changes to the maximum face value or maximum expected value of awards are proposed. At the discretion of the Remuneration Committee, a cash payment, equal in value to the dividends which would have been  paid had actual shares been issued during the vesting  period, will be made  to employees to whom LTIP  awards  were  granted,  to  the  extent  that  these  LTIP  awards  vest  after  the  performance  conditions  have been tested.


179
 
 
 DIRECTORS' SERVICE CONTRACTSService  contracts  of  executive  directors  are  reviewed  annually.  In  2009,  the  chief  executive  officer’s  initial  two-year contract  was  replaced  by  a  contract  with  a  twelve-month  notice  period  and  his  remuneration  package  restructured  in accordance with the conditions of employment for permanent employees. The notice period for the chief financial officer Srinivasan  Venkatakrishnan,  is  nine  months.  The  contracts  also  deal  with  compensation  if  an  executive  director  is dismissed or if there is a material change in role, responsibilities or remuneration following a new shareholder assuming control of the company.  COMPENSATION OF EXECUTIVE DIRECTORS AND EXECUTIVE MANAGEMENT
 
 Under  the  Listings  Requirements  of  the  JSE,  AngloGold  Ashanti  is  required  to  disclose  compensation  paid  to  its executive  directors  on  an  individual  basis  while  compensation  paid  to  its  executive  officers/executive  management  is disclosed in aggregate.
 
 The following table presents the compensation paid by AngloGold Ashanti to executive management during 2009 and 2008.  Executive directors have elected not to receive payment of directors’ fees, committee fees and travel allowances.
 
 EXECUTIVE DIRECTORS' AND EXECUTIVE MANAGEMENT REMUNERATION
 
 Appointment
 (2)
 
 All figures in $000
 (1)
 
 From
 To
 Salary
 Performance
 related
 payments
 (3)
 
 Pension
 scheme
 contributions
 (4)
 
 Other
 Benefits
 (4)
 
 Encashed
 leave
 (5)
 
 Pre-tax
 gain on
 share
 options
 exercised
 (6)
 
 Total
 Executive directors' remuneration 2009
         
     
   
   
   
   2,508
     
   
   
   
   1,985
    2,079
 1,422
 371
 308
 –
 313
 4,493
          
 Executive management's remuneration 2009 representing 10 executive management
  4,488
 2,029
 537
 1,208
 47
 2,430
 10,739
 
        
 Total executive directors, and executive management remuneration 2009
   6,567
 3,451
 908
 1,516
 47
 2,743
 15,232
 
         
 
 
 
 
 
 
 
 
 
 
 Executive directors' remuneration 2008
                                      Executive management's remuneration 2008 representing 11 executive management
         
         Total executive directors, and executive management remuneration 2008
          
 (1)
 Where  directors'  compensation  is  paid  in  South  African  rands,  for  the  purposes  of  this  annual  report  on  Form  20-F,  the  rand  values  have  been converted to US dollar using the following year-to-date average rate of exchange: 2009: R8.38510:$ (2008: R8.2483:$1).
 (2)
 Salaries are disclosed only for the period from or to which office was held.
 (3)
 In order to more accurately disclose remuneration received/receivable by executive directors and executive management, the tables above  include the performance related payments calculated on the year's financial results.
 (4)
 Includes health care, personal travel and retention payments.
 (5)
 Pursuant to AngloGold  Ashanti’s  policy regarding  the  number of  leave days  that  may be accrued,  all  surplus  leave  days  accrued  are  compulsorily encashed.
 (6)
 Mr  Venkatakrishnan  applied  all  of  the  proceeds  after  tax  from  the  sale  of  his  share  options  to  acquire  5,130  ordinary  shares  (2008:  4,569)  in AngloGold Ashanti.  Of the 92,452 share options exercised by the executive management, the proceeds from the sale of 48,595 options were used to acquire 16,911 ordinary shares in AngloGold Ashanti (2008: of the 15,563 share options exercised by the executive management, the proceeds from the sale of 12,963 options were used to acquire 2,304 ordinary shares in AngloGold Ashanti).
 
 Rounding of figures may result in computational discrepancies.


NON-EXECUTIVE DIRECTORS’ COMPENSATION The fees of non-executive directors  are fixed by shareholders at the annual general meeting and, other than the fees they  receive  for  their  participation  on  board  committees  and  allowance  for  travelling  internationally  to  attend  board meetings, non-executive directors receive no further payments from the company and are precluded from participation in the company’s share incentive scheme.
  At  the annual  general  meeting  of shareholders  to  be  held on  May 7,  2010,  shareholders  will  be  asked to  consider  an increase to the fees payable to non-executive directors. The resolutions for consideration will be included in the notice of meeting which will be sent to shareholders together with the abridged annual report. The  reason for  proposing  an  increase  in  non-executive  directors’  remuneration  is  to ensure  that the fees  paid  remain competitive  in  order  to  enable  the  company  to  attract  and  retain  persons  of  the  caliber  required  to  make  meaningful contributions  to  the  company,  given  its  global  spread  and  growth  aspirations  and  having  regard  to  the  appropriate capability, skills and experience required. A recent benchmarking exercise undertaken by PricewaterhouseCoopers has indicated  that  the  current  levels  of  non-executive  fees  remain  well  below  the  lower  quartile  of  the  comparator  group, particularly  when  considering  market  practice  outside  South  Africa  and  taking  into  account  the  fact  that  several  non-executive directors are based internationally. The requirement of competing in the global market, and compliance with increasing onerous and complex international governance and regulatory requirements, requires flexibility to attract non-executives  of  international  standing.  The  above  proposal  falls  short  of  recognizing  the  global  responsibility  that  the directors share for the governance of the group with business in diverse jurisdictions, but it seeks to better reflect market practice in the director’s region of residence.
  In arriving at the proposal to increase non-executive directors’ remuneration, the Chief Executive Officer, in consultation with  the  Chairman  and  Executive  Vice  President  –  Human  Resources  of  the  company,  directed PricewaterhouseCoopers to review non-executive directors’ fees for comparable international South African companies and  international  companies.  The  results  of  the  review  indicated  that  the  remuneration  paid  to  the  non-executive directors of the company was, with respect to the South African comparator group, at the upper quartile and with respect to the international comparator group, below the lower quartile. The proposals are based on adjusting the fee levels for non-executive directors to the median of the applicable market – using South African market data for the resident non-executive directors, and market data from North America, the UK and Australia for non-resident directors outside Africa. The  fees  for  non-resident  non-executive  directors  residing  in  Africa  have  been  set  to  a  similar  level  to  those  non-executive directors resident in South Africa.
  The  Remuneration  Committee,  having  taken  due  consideration  of  the  review,  recommend  for  approval  by  the shareholders, the remuneration for the Chairman, while the Chairman, together with the Chief Executive Officer and the Chief Financial Officer, recommend for approval by the shareholders, the remuneration for the non-executive directors. Prior to these proposed changes, the remuneration of the non-executive directors has been unchanged since the annual general meeting held in May 2009.
  In light of all of these factors, the proposed revised remuneration structure is considered to be fair and reasonable and in the best interests of the company.1 Non-executive directors’ fees
 Current fee
 Increased fee
 Board
 per annum
 per annum
 1.1
 Chairman
 $180,000
 R1,520,300
 1.2
 Deputy chairman
 R600,000
 R650,000
 1.3
 South African resident directors
 R250,000
 R270,000
 1.4
 Non-South African resident directors who are resident in Africa
 $25,000
 $33,750
 1.5
 Non-South African resident directors who are resident in jurisdictions other than Africa
 $40,000
 $60,000
 The remuneration payable will be in proportion to the period during which office is held.


2
 Allowance for attendance by non-executive directors at additional board meetings
 
 Each non-executive director will be entitled to an allowance for each board meeting attended by such director in addition to the six scheduled board meetings per annum, as follows:
 Current fee
 Increased fee
 Board
 per meeting
 per meeting
 2.1
 Chairman
 $9,000
 R78,000
 2.2
 Deputy chairman
 R30,000
 R32,400
 2.3
 South African resident directors
 R12,500
 R16,000
 2.4
 Non-South African resident directors who are resident in Africa
 $1,250
 $2,000
 2.5
 Non-South African resident directors who are resident in jurisdictions other than Africa
 $2,000
 $3,000
 
 3   Board committee fees payable to non-executive directors The fee paid to each  non-executive  director in respect of membership of a committee of  the board is to  be  increased with effect from June 1, 2010 on the basis set out below. The fees payable in respect of “other committees” pertain to the following committees which meet on a quarterly basis: • Investment; • Remuneration; • Safety, Health and Sustainable Development; and • Transformation and Human Resource Development.
 Current fee
 Increased fee
 Board committee
 per annum
 per annum
 Audit and Corporate Governance Committee
 
 
 3.1
 Chairman – South African resident
 R150,000
 R160,000
 3.2
 Member – South African resident
 R125,000
 R135,000
 3.3
 Member – Non-South African resident who is resident in Africa (1)
 R125,000
 $16,875
 3.4
 Member – Non-South African resident who is resident in jurisdictions other than Africa
 R125,000
 $25,315
 Other committees
 
 
 3.5
 Chairman – South African resident
 R120,000
 R130,000
 3.6
 Chairman – Non-South African resident who is resident in Africa (1)
 R120,000
 $16,250
 3.7
 Chairman – Non-South African resident who is resident in jurisdictions other than Africa
 R120,000
 $25,000
 3.8
 Member – South African resident
 R100,000
 R110,000
 3.9
 Member – Non-South African resident who is resident in Africa (1)
 R100,000
 $13,750
 3.10  Member – Non-South African resident who is resident in jurisdictions other than Africa
 R100,000
 $20,000
 (1) Non-South Africans who are resident in Africa will receive the $ equivalent of the South African resident fees, converted at a rate of R8/$.
 4
 Ad hoc committee fees payable to non-executive directors
 Each  non-executive  director  will  be  entitled  to  an  allowance  for  each  ad  hoc  committee  meeting  attended.  Ad  hoc committees are those committees which meet on an as needs basis, namely the Party Political Donations Committee, the Nominations Committee and any special purpose committee established by the board.
 Current fee
 Increased fee
 Board
 per meeting
 per meeting
 4.1
 South African resident
 R15,000
 R16,200
 4.2
 Non-South African resident who is resident in Africa (1)
 R15,000
 $2,025
 4.3
 Non-South African resident who is resident in jurisdictions other than Africa
 R15,000
 $3,000
 (1) Non-South Africans who are resident in Africa will receive the $ equivalent of the South African resident fees, converted at a rate of R8/$.
 
 5
 Travel allowance to attend board meetings
 
 The travel allowance, as detailed below, remains unchanged from that approved by shareholders at the annual general meeting held on May 15, 2009. 5.1  $10,000 per board meeting for the chairman, when based internationally; 5.2  $6,000 per board meeting for non-South African resident directors who are resident in Africa; and 5.3  $8,000  per  board  meeting  for  non-South  African  resident  directors  who  are  resident  in  jurisdictions  other


NON-EXECUTIVE DIRECTORS’ REMUNERATIONThe following table details fees and allowances paid to non-executive directors during 2009 and 2008:
 Appointment
 Director’s
 fees
 (3)
 
 Com-
 mittee
 fees
 Travel
 (4)
 
 Total
 Directors’
 fees
 (3)
 
 Com-
 mittee
 fees
 Travel
 (4)
 Total
 All figures stated to the nearest R000
 (1)
 
 From
 (2)
 
 To
 (2)
 
 2009
 2008
 RP Edey (Chairman)
 
 
 204
 38
 40
 282
 150
 32
 25
 207
 Dr TJ Motlatsi (Deputy chairman)
 
 
 67
 33
 –
 100
 44
 19
 –
 63
 FB Arisman
 
 
 40
 36
 26
 102
 25
 33
 20
 78
 RE Bannerman
 May 15, 09
 14
 8
 10
 32
 25
 12
 25
 62
 Mrs E le R Bradley
 May 06, 08
 –
 –
 –
 –
 5
 5
 –
 10
 JH Mensah
 May 15, 09
 14
 12
 5
 31
 25
 21
 20
 66
 WA Nairn
 
 
 27
 34
 –
 61
 16
 19
 –
 35
 Prof LW Nkuhlu
 (5)
 
 
 
 29
 31
 –
 60
 16
 27
 –
 43
 SM Pityana
 
 
 27
 47
 –
 74
 16
 34
 –
 50
 SM Thompson
 
 Jul 28, 08
 –
 –
 –
 –
 15
 16
 5
 36
 Total – non-executive directors
 
 
 422
 239
 81
 742
 337
 218
 95
 650
 
 (1)   Where  non-executive  directors'  compensation  is  paid  in  South  African rands,  for the purposes of  this  annual report  on Form  20-F, the rand  values
 have been converted to US dollars using the following yearly average rate of exchange: 2009: R8.38510:$1 and 2008: R8.2483:$1.
 (2)   Fees are disclosed only for the period from or to which, office is held. (3)   At the annual general meeting of shareholders held on May 15, 2009, shareholders approved an increase in non-executive directors’ fees with effect
 from June 1,
 2009
 
 For six
 Additional per
 
 
 meetings
 meeting
 Travel  (4)
 – Chairman
 $180,000
 $9,000
 $10,000
 – Deputy chairman
 R600,000
 R30,000
 –
 – South African resident directors
 R250,000
 R12,500
 –
 – Non-South African directors
 
 
 
 – Living in Africa
 $25,000
 $1,250
 $6,000
 – Living other than in Africa
 $40,000
 $2,000
 $8,000
 The fees payable in respect of committees were approved by the board. (4)   A  travel  allowance  per  board  meeting  is  paid  to  non-executive  directors  who  travel  internationally  to  attend  board  meetings.  In  addition,  AngloGold  Ashanti  is
 liable for the payment of all travel costs and accommodation.
 (5)   Prof. Nkuhlu resigned from the board with effect from May 5, 2009 and rejoined the board on June 1, 2009.  Rounding may result in computational differences.
 Non-executive directors are not eligible to participate in the Share Incentive Scheme.
 6C.  BOARD PRACTICES
  THE BOARD OF DIRECTORS The  Articles  of  Association  of  AngloGold  Ashanti  requires  the  board  to  be  composed  of  a  minimum  of  four  directors. Currently, the company is managed by a unitary board, comprising two executive directors: the Chief Executive Officer and  the  Chief  Financial  Officer  and  six  independent  non-executive  directors  who  all  meet  the  board’s  independence criteria. A restructuring of  the board’s composition is currently being undertaken with the view to improving the mix  of skills, experience and knowledge required of a multinational gold mining company.Policy on determining the independence of board membersAngloGold Ashanti subscribes to a policy of sound corporate governance practices informed by the requirements set in terms of applicable stock exchanges on which the company is listed, and particularly that of the Johannesburg and New York Stock Exchanges, as well as legislative imperatives of securities and companies laws and governance standards such as the King Code. The board will at all times comply with the requirement to consist of a majority of independent directors and this policy statement will describe the criteria that will guide the board in determining which of its members are independent from a corporate governance point of view. The board retains an inherent discretion to determine the independence  of  its  directors  on  a  case-by-case  basis  taking  into  account  the  totality  of  the  facts  and  the  criteria established in this policy. Where the board, exercising its discretion and having considered all relevant facts, determines a  director  to  be  independent  despite  not  meeting  the  criteria  established  in  this  policy,  the  board  will  fully  disclose  its reasoning in appropriate public reports.


The test of independence that will be used by the board of AngloGold Ashanti Limited to determine the independence of its members is based on the following:
    Is not a representative or officer  of a significant shareholder of the  company. For purposes of this policy the  term  “significant  shareholder”  means  a  shareholder  who  owns,  directly  or  indirectly,  more  than 5 percent  of  the  company's  issued  share  capital  or  a  shareholder  who  has  the  ability  to  influence  the decisions of the board and/or management. The term “officer” shall mean a director or company secretary of the shareholder, any person identified as an officer according to the requirements of any relevant laws; any  person  who  has  the  capacity  to  influence  significant  business  and/or  financial  decisions  of  the shareholder (including decisions affecting the relationship with AngloGold Ashanti) or who is appointed to any capacity within the shareholder by its board or any of its board committees;
  Has  not  been  employed  in  an  executive  capacity  by  the  company  or  the  group  for  the  preceding  three financial  years.  For  purposes  of  this  policy  the  term  “executive  capacity”  means  any  employee  whose appointment requires the approval of the Remuneration Committee, Nominations Committee or the Audit and Corporate Governance Committee of the board;
      Does not have a material interest in a contract with the company or is not employed by a company that has a material interest in a contract with the company. For purposes of this policy the term “material interest in a contract” means, as a guideline, any contract which is:
  The  greater  of  0.5 percent  of  AngloGold  Ashanti's  total  gross  revenue  in  the  preceding  financial year or $20 million whichever is the greater; and
  Even if the limit mentioned in (i) above is not exceeded, the board will consider whether the contract is deemed material to either contracting side taking into account all relevant facts including (but not limited to) the value of the contract relative to the total business of each party and the importance of the business relationship to the parties.
  Is free of any other business or other relationship which could be perceived to materially interfere with the individual's  capacity  to  act  independently  of  other  board  members,  management  or  the  individual's  own interests;
  Receives remuneration for services as a director in the form of cash and shares (but not share options); and
  Objectively  conducts  himself  or  herself  in  a  manner  displaying  independence  of  thought,  judgment  and action.
    For purposes of determining the independence of directors the criteria above will apply mutatis mutandis to the immediate family members of the director. For purposes of this policy the term “immediate family member” shall include  any  of  the  following  persons  who  are  related  to  the  director  in  question:  spouse,  children  and grandchildren; parents, parents-in-law and grandparents; siblings and the children, spouses and grandchildren of any of these siblings.
   The board will annually review which of its members are independent having regard to this policy and relevant facts.
 The board will annually review this policy as part of its own performance evaluation process.
 The  policy  determining  the  independence  of  directors  can  be  found  on  the  company’s  website  at www.anglogoldashanti.com.Board tenureThere  is  no  mandatory  retirement  age  for  non-executive  directors;  however,  in  line  with  best  practice  in  corporate governance and in accordance with the Sarbanes-Oxley Act, directors are required to step down from the board after nine  consecutive  years  of  service.  The  nine-year  tenure  could  be  extended  at  the  board’s  discretion  and  with  the individual  director’s  consent.  In  line  with  this  practice  the  chairman  will  retire  from  the  board  at  the  annual  general meeting to be held on May 7, 2010. Mr  Mboweni, the former Governor of the South African Reserve Bank, has been appointed to replace Mr Edey as chairman, effective June 1, 2010.


Non-executive directorsNon-executive  directors  provide  the  board  with  advice  and  experience  that  is  independent  of  management  and  the executive. The presence of independent directors on the board, and the critical role they play as board representatives on  key  committees  such  as  the  Audit  and  Corporate  Governance,  Nominations,  Party  Political  Donations  and Remuneration committees, ensures that the company's interests are served by impartial and independent views that are separate from those of management and shareholders. Powers and responsibilities of the boardThe  board’s  charter  sets  out  the  powers,  responsibilities,  functions  and  delegation  of  authority,  and  the  areas  of responsibility expressly reserved for the board. The charter covers, among others, the following key areas: •   authority of the board; •   appointment of directors; •   role and responsibility of the board; •   procedures of the board; •  • matters reserved for board decision; •   management of risks; •   corporate governance; •   remuneration issues; •   evaluation of board performance and induction of new directors; and •   declaration of interests. 
The board is authorized by the company's Articles of Association to appoint new directors, on recommendation by the Nominations Committee, provided such appointees retire at the next annual general meeting and stand for election by shareholders.  Retirement  of  non-executive  directors  follows  a  staggered  process  with  one-third  of  non-executive directors retiring at least every three years at the annual general meeting. A curriculum vitae of each director standing for  election  or  re-election  is  made  available  to  shareholders  prior  to  the  annual  general  meeting  to  assist  in  their decision making. Executive directors are appointed by the board to oversee the day-to-day running of the company and are held accountable by regular reporting to the board. Their performance is measured against pre-determined criteria. While  executive  directors  have  contracts  of  employment  with  the  company,  non-executive  directors  do  not  have contracts of service with the company, or any of its subsidiaries that are terminable at periods of notice exceeding one year or require payment of compensation on termination.  Determination of independence is guided by the King Code, the Companies Act in South Africa and international best practice. Where the board, exercising its discretion and having considered all relevant facts, determines a director to be independent despite not meeting the set criteria, the board will fully disclose its reasoning in appropriate public reports.  The  policy  and  independence  of  individual  non-executive  directors  is  reviewed  annually  as  part  of  the  annual  board evaluation process. The performance evaluation tools are also reviewed as and when necessary to ensure that changes in the corporate governance environment as well as the company’s strategic needs are well catered for. An annual self-evaluation is undertaken to determine that the board and its committees are effective in the performance of  their  duties  and  to  facilitate  board  development.  Depending  on  the  results  of  the  evaluation,  appropriate  action  is taken to achieve the desired results. The board is also cognizant of the opportunity the evaluation process affords it in improving communication among its members and between the board and management and to fine tune its role in the overall management of the company. The board believes that assessment of its performance should not be subject to a single  evaluation  process  at  the  end of  each  year;  hence  it  is  committed  to  a  continuous  non-formal  evaluation  of  its performance throughout the year.The most recent formal evaluation was conducted in February 2010 in respect of the 2009 period. The chairman of the board and the chairman of each committee of the board led the processes to evaluate the board and the committees respectively. Led by the deputy chairman, each director evaluated the performance of the chairman of the board.


The performance evaluation of executive directors is conducted by the Remuneration Committee. Topics covered in the board’s effectiveness evaluation include the following: •   setting of performance objectives; •   board contribution to development of strategy; •   board response to crisis; •   board awareness of developments in regulatory and market environments; •   effectiveness of board committees; •   evaluation of the relationship between the board and management, shareholders and among members of the board •   succession plans for senior executive management; •   criteria for determining independence of directors; and •   corporate governance and legal issues facing the board/company. All  members  of  the  board  have  access  to  management  and  the  records  of  the  company,  as  well  as  to  external professional advisers should the need arise.
  All  members  of  the  Executive  Committee  are  regular  attendees  at  board  meetings  and  report  to  the  board  on  their respective operational areas.
  The chairman of each committee also reports to the board after every meeting. Separate meetings are held each year to discuss strategic matters and the group’s budget for the following year.
 During  2009  the  board  held  four  scheduled  quarterly  meetings.  In  addition  four  special  and  eight  sub-committee meetings were held to discuss and approve issues of a special nature. All directors attended those meetings that they were entitled to attend, except Dr Motlatsi who was unable to attend three meetings.
                          BOARD SUB-COMMITTEES The  board  has  established  and  delegated  specific  roles  and  responsibilities  to  seven  standing  committees  and  one management committee (the Executive Committee), to assist it in the execution of its mandate. Each committee’s role and responsibilities are spelt out in its terms of reference, approved by the board and reviewed regularly to ensure that they  remain  in  line  with  the  company’s  changing  needs  and  business  climate.  Standing  committees  are  chaired  by independent  non-executive  directors.  As  and  when  required,  the  board  may  establish  ad  hoc  committees  to  address specific issues. Details of each board committee are provided below. Audit and Corporate Governance Committee Membership  of  the  Audit  and  Corporate  Governance  Committee,  including  its  chairman,  comprises  only  independent non-executive directors, in compliance with the Sarbanes-Oxley Act. This also fulfils the guidelines of the King III Code, which  becomes  effective  in  March  2010,  and  the  requirements  of  Companies  Act  71,  of  2008,  which  is  expected  to become effective during 2010. The Sarbanes-Oxley Act requires the board to identify a financial expert from within its ranks. The board has resolved that the committee's chairman, Prof Wiseman Nkuhlu is the board's financial expert. All three members of the committee have considerable financial knowledge and experience to help oversee and guide the board and the company in respect of the audit and corporate governance disciplines.


The  committee  is  guided  by  its  terms  of  reference.  The  mandate  as  delegated  by  the  board  is  ensuring  integrity  of financial  reporting  and  adequacy  of  governance,  internal  control  and  risk  management  policies  and  processes throughout the group.
  The selection of external auditors, recommendation of their appointment to shareholders and the determination of their fees,  policy  procedures  for  approving  non-audit  work  and  checking  and  satisfying  itself  about  independence  of  the external auditors is one of the functions of the committee. To this end, the committee holds private discussions with the external auditors and conducts an annual formal assessment on the independence of the auditors. In line with this, at its meeting in February 2010 and after due consideration of all relevant facts, the committee expressed satisfaction that the external auditor is independent of the company and was so during the financial period under review to and including the date of this report. 
  The group internal audit  manager has unrestricted access to  both the Chief Executive Officer and the Chief Financial Officer, the board chairman and the chairman of this committee, and is invited to attend and report on his department's activities  at  all  committee  meetings.  The  board  is  confident  that  the  unfettered  access  of  the  group  internal  audit manager  to key  board  members,  and  the  direct  and  regular  reporting  to  the  committee, enables  him  to  discharge  his duties  as  required by  law  and  in  fulfillment  of  his obligations  to  the  company.  The  function,  duties  and powers  of  the internal audit department, are governed  by a formal  internal audit charter approved by  the committee. In addition,  the group internal audit manager meets with committee members in the absence of management. The  committee  meets  regularly  with  the  external  audit  partner,  the  group's  internal  audit  manager  and  the  Chief Financial Officer to review the audit plans of the internal and external auditors and ascertain the scope of the audits, and to review the quarterly financial results, significant legal matters affecting the company, the preliminary announcement of the annual results and the annual financial statements, as well as all statutory submissions of a financial nature, prior to approval by the board. 
  In relation to risk management, the committee reviews the risk policies of the company with respect to risk identification and the risk management process, ensuring that the guidelines of the King Code and the requirements of the Sarbanes-Oxley Act are met, as well as advising the board on the effectiveness of the risk management system. In  addition,  the  committee  reviews  fraud  prevention  policies  and  processes.  The  investigations  of  the  reports  made through the “whistle blowing” process and the actions taken are reviewed and monitored by the committee on at least a quarterly basis.
  The  committee  oversees  the  company’s  integrated  reporting  and  in  that  regard  reviews  the  financial  aspects  of  the sustainability  report  to  ensure  accuracy  and  reliability  of  information.  It  also  reviews  the  non-financial  information  to ensure it conforms to the financial information. To facilitate the committee’s role in relation to the integrated reporting, the  chairman  was  appointed  to  the  Safety,  Health  and  Sustainable  Development  Committee  with  effect  from October 27,  2009.  The  2009  Sustainability  Review  was  reviewed  and  recommendation  was  made  for  its  release  to stakeholders.
  At  its  meeting  held  in  February  2010,  the  committee  recommended  the  appointment  of  Ernst  &  Young  Inc.  as  the auditors.  Their  appointment  will  be  taken  to  shareholders  for  approval  at  the  annual  general  meeting  to  be  held  on May 7, 2010.
  The committee held four scheduled quarterly meetings during 2009 as detailed below. In addition, two sub-committee meetings were held.  All members attended those meetings they were entitled to attend.
             Messrs Cutifani and Venkatakrishnan attended all meetings by invitation. The NYSE listing rules require that the board determine whether a member of the committee's simultaneous service on the audit committees of more than three public companies impairs the ability of such a member to effectively serve on a listed  company's  audit  committee.  Professor  Nkuhlu,  the  chairman  of  the  committee,  is  a  member  of  one  (2008:  two) other public companies' audit committees but is not its chairman.


After having considered all relevant facts, and given his professional knowledge and skills, the board concluded that the simultaneous  service  on  another  audit  committee  and  membership  on  the  Financial  Crisis  Advisory  Group  of  the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) by Prof Nkuhlu has  not  impaired  his  ability  to  diligently  execute  his  responsibilities  to  the  committee  and  the  board  of  AngloGold Ashanti. The members of the Audit and Corporate Governance Committee were all re-appointed to serve as members of the committee by the board to hold office for the next financial year.
 
 Remuneration CommitteeThe objectives, responsibilities and composition of the Remuneration Committee has been more fully described above.  See “6B. COMPENSATION - Remuneration report”.
 
 Nominations Committee
 
 The appointment of directors is a matter for the board as a whole but the Nominations Committee, whose membership comprises  solely  of  independent  non-executive  directors,  is  responsible  for  identifying  and  recommending  suitable candidates  for  appointment  to  the  board.  The  fit  and  proper  standards  policy  for  directors  guides  this  process.  The committee  is  also  responsible  for  establishing  and  reviewing  succession  plans  for  members  of  the  board,  particularly those of the Chief Executive Officer and board chairman. The committee met twice during 2009.   All members attended those meetings that they were entitled to attend with the exception of Messrs Mensah and Nairn each of who were unable to attend one meeting.  Prof. Nkuhlu and Mr Pityana were each recused from attending one meeting.
 
    
                Mr Cutifani attended both meetings as an invitee.
 
 Safety, Health and Sustainable Development Committee
 
 The  Safety,  Health  and  Sustainable  Development  Committee  oversees  the  company’s  performance  regarding  safety, health and the environment, and its social interaction with the communities in which it operates. This committee is also responsible  for  establishing  targets  in  relation  to  each  of  these  areas.  Safety,  health  and  environmental  performance and  relations  with  government,  community  members  and  other  stakeholders,  form  an  integral  part  of  operational management.
 
 Membership  of  the  committee  comprises  non-executive  directors  and  the  Chief  Executive  Officer.  Its  meetings  are attended  by  several  members  of  the  executive  team  and  other  officers  of  the  company.  During  2009  the  committee deliberated on the safety concerns faced by the company's South African mines and in particular, on the strategies and methodologies that will enhance the safety and security of all company employees. Four  scheduled  quarterly  meetings  were  held  during  2009.    All  members  attended  those  meetings  that  they  were entitled  to  attend  with  the  exception  of  Dr Motlatsi  who  was  unable  to  attend  one.  Prof Nkuhlu  was  appointed  to  the committee in October 2009.
 
                
 Messrs  Arisman  and  Edey  attended  all  meetings  of  the  Safety,  Health  and  Sustainable  Development  Committee  by invitation.


Transformation and Human Resources Development Committee
 The  committee  is  responsible  for  overseeing  the  company's  performance  in  respect  of  employment  equity, transformation  and  staff  development  by  taking  into  account  the  legal  requirements  of  applicable  legislation  and  the monitoring of targets set by the company, including the monitoring of the Mining Charter in its entirety and all legislative requirements  impacting  on  the  company's  right  to  mine  at  all  its  operations.  The  committee  is  also  responsible  for employee  skills  development  in  a  manner  that  seeks  to develop  and  retain  talent,  and  to provide  employees  with  the opportunity to enhance their skills and knowledge.
  The committee  held four  scheduled  quarterly  meetings  in  2009.    All  members  attended  those  meeting that  they  were entitled  to  attend,  with  the  exception  of  Dr Motlatsi  who  was  unable  to  attend  one  meeting,  and  Mr Nairn  who  was unable to attend two meetings.
                 Investment Committee
  This  committee  is  responsible for overseeing and reviewing  AngloGold  Ashanti's strategic  investments which includes the acquisition and disposal of assets, capital expenditure and projects. The membership of the committee comprised Mr RP Edey (chairman), Mr M Cutifani, Mr WA Nairn, Mr Pityana, Mr S Venkatakrishnan and Mr JH Mensah who retired from the board on May 15, 2009. The committee met on  May 11, 2009 and all members were present.
 Party Political Donations CommitteeThe  membership  of  the  Party  Political  Donations  Committee  comprises  the  South  African  resident  independent  non-executive directors, namely, Mr WA Nairn, Prof LW Nkuhlu, Mr SM Pityana and is chaired by the deputy chairman of the board,  Dr  TJ  Motlatsi.  The  committee  determines  the  funding  of  political  parties  in  South  Africa  in  accordance  with principles  set  out  in  the  political  donations  policy  adopted  by  the  board  on  April 29,  2003.  The  committee  met  once during the year, on February 3, 2009, at which all members were present. Mr WA Nairn was appointed a member of the committee at that meeting.
  In  line  with  the  company’s  policy  on  political  donations  which  seeks  to  support  a  strong  democracy  and  good governance, the committee approved a donation of R4 million which was distributed to six South African political parties intended  as  the  company’s  contribution  to  the  democratic  elections  held  in  South  Africa  during  2009.  The  criteria  for allocation of the funds was in line with the company’s policy and was based on an assessment of the capacity of each of the  parties  to  contribute  meaningfully  to  the  democratic  debate  and  to  the  generation  of  policy  ideas  for  public consideration  and  further,  capacity  to  contribute  constructively  to  building  a  culture  of  executive  accountability  and parliamentary oversight.Special purpose board committees



As  and  when  required,  the  board  may  appoint  a  special  purpose  board  committee.    In  March  2008,  the  Financial Analysis  Committee  was  formed  to  address  the  funding  requirements  of  the  company,  namely  the  rights  offer.    The committee  was  dissolved  on  July 7,  2008  following  the  close  of  the  rights  offer  and  reconstituted  on  July 9,  2009.  Members of the committee comprise FB Arisman (chairman), RP Edey, LW Nkuhlu and SM Pityana.  One meeting of the committee was held during 2009 which was attended by all members except Prof Nkuhlu who was unable to attend.  Mr Venkatakrishnan attended the meeting as an invitee. Executive CommitteeThis  committee  is  chaired  by  Mr  Cutifani,  the  Chief  Executive  Officer  and  comprises  members  of  the  executive mangement. The committee is responsible for overseeing the day-to-day management of the company's affairs and for executing  the  decisions  of  the  board.  It  meets  at  least  monthly  and  is  actively  involved  in  the  strategic  review  of  the company's values, safety performance, operation and exploration profiles and financial status.


Treasury CommitteeThe  Treasury  Committee  is  a  sub-committee  of  the  audit  and  corporate  governance  committee.  Its  membership comprises  of  two  non-executive  directors,  the  Chief  Financial  Officer  and  a  number  of  employees  whose  duties  are relevant to the role and functions of the committee. It is chaired by the chairman of the audit and corporate governance committee and its main role is to monitor and mitigate financial risks. The committee held two meetings during the year under review.Disclosures CommitteeAngloGold  Ashanti  believes  in  the  dissemination  of  credible,  accurate  and  verifiable  information.  Accordingly,  a Disclosures  Committee,  comprising  senior  management,  has  been  established  to  manage  compliance  with  the company’s  continuous  disclosure  obligations  and  communications  policy.  The  committee  ensures  that  adequate guidelines  are  put  in  place  to  facilitate  the  process  of  material  disclosure  of  company  information,  and  bears responsibility for certain categories of information gathering and processes.6D.  EMPLOYEES The  average  number  of  attributable  employees  (including  contractors)  in  the  AngloGold  Ashanti  group  over  the  last 3 financial years was:
       
 
 2009
 2008
 2007
 
                                     Total
 
           * Primarily centralized and corporate services.
 
  Labor relations and collective bargainingAngloGold  Ashanti  recognizes  the  fundamental  right  of  freedom  of  association  of  all  employees  and  contractors,  and adheres  to  collective  bargaining  agreements  with  due  regard  to  the  relevant  legislation  in  the  countries  in  which  it operates. Relations with organized labor are founded on mutual respect, and wage negotiations are conducted in line with the company’s values.
  Approximately 83 percent of AngloGold Ashanti’s employees are either members of a union or are catered for through collective bargaining agreements. Exceptions are the United States and Australia, where employees are not members of unions, but where a high degree of employee participation in wage discussions is encouraged. Wage settlements are specific  to  each  jurisdiction  in  which  AngloGold  Ashanti  operates  and  the  company’s  approach  is  to  ensure  that agreements are fair but realistic, taking into account the local economic context and the impact of any settlement on the long-term viability of the business.
  In  2009  wage  settlements  were  reached  without  disruption to  labor.  In  South  Africa,  a  two-year  wage  settlement  was reached  in  July.  In  Ghana  and  Guinea,  settlements  were  reached  without  the  loss  of  production,  however,  the negotiation processes were protracted and several months were required to reach agreement.In response to the industrial relations environment and the sometimes volatile economic and political context in which the company operates in West Africa, an integrated strategy for collective bargaining is being implemented, with the aim of  creating  a  framework  within  which  the  company  and  organized  labor  can  improve  their  relationship  and,  through collective bargaining, agree on conditions of employment in an efficient and mutually beneficial manner. The approach is  a  holistic  one,  where  issues  relating  to  the  political,  economic  and  social  environment  are  considered  in  the development of this strategy.


A pro-active approach to labor relations, integrated with other management initiatives, has been adopted at AngloGold Ashanti’s operations in Argentina, where the uncertain political and economic climate has the potential to affect relations between the various labor groups and between management and employees. Frequent dialogue with union leaders at local, provincial  and national  level has taken place  during the year.  The climate among employees is also monitored, and management communicates proactively with employees to ensure that they are well informed about their conditions of employment.
  At a group level, in an undertaking to promote internationally accepted labor relations and human resource practices at AngloGold Ashanti’s operations around the world, a global agreement was signed between the International Federation of  Chemical,  Energy,  Mine  and  General  Workers’  unions  (ICEM)  and  the  company.  The  agreement  sets  out  the commitment of both parties to respect and advance the principles and values of internationally-accepted labor relations and  human  resource  practice,  including  the  relevant  ILO  conventions  and  the  principles  of  GRI  and  the  UNGC.  Its objective  is  to  enhance  principles  or  practices  established  by  local  regulation  and  collective  bargaining  processes  at operations  managed  directly  by  AngloGold  Ashanti.  Provision  is  also  made  in  the  agreement  for  ongoing  dialogue between the company and the ICEM at corporate level. 6E. SHARE OWNERSHIP DIRECTORS' INTERESTS IN SHARES

At  December 31,  2009,  the  members  of  AngloGold  Ashanti’s  board  of  directors  beneficially  held  the  aggregate  of 29,198 ordinary  shares  of  the  company  (not  including  stock  options  or  other  equity  awards),  which  represented 0.0080 percent of the company’s issued share capital at that date.  The interests of the directors in the ordinary shares of  the  company  at  December 31,  2009  are  shown  below.    There  have  been  no  changes  in  the  interests  since December 31, 2009.
  
 Beneficial
 
 
 Direct
 Indirect
 
 
 December 31, 2009
 
 Executive directors
           Total
 
   Non-executive directors
               Total
 
   Grand total
    SHARE OWNERSHIP OF EXECUTIVE OFFICERS/EXECUTIVE MANAGEMENTUnder the Listings Requirements of  the JSE, AngloGold Ashanti  is  not required to disclose, and it does not otherwise disclose  or  ascertain,  share  ownership  of  individual  executive  officers/executive  management  in  the  share  capital  of AngloGold Ashanti. However, to the best of its knowledge, AngloGold Ashanti believes that AngloGold Ashanti ordinary shares held by executive officers, in aggregate; do not exceed 1 percent of the company's issued ordinary share capital.   SHARE OWNERSHIP OF EMPLOYEESAt  a  general  meeting  of  shareholders  held  on  December 11,  2006,  members  approved  the  creation  of 4,280,000 E ordinary shares of 25 South African cents pursuant to an employee share ownership plan for the benefit of certain AngloGold Ashanti employees, of which the majority are historically disadvantaged South Africans as defined in the Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry.


ANGLOGOLD SHARE INCENTIVE SCHEME AngloGold  Ashanti  operates  a  share  incentive  scheme  through  which  executive  directors,  executive  officers  and managers  of  the  company  and  its  subsidiaries  are  given  the  opportunity  to  acquire  shares  in  the  company.  The objective  is  to  incentivize  such  employees  to  identify  themselves  more  closely  with  the  fortunes  of  the  group  and  its continued growth and to promote the retention of such employees. Non-executive directors are not eligible for participation in the share incentive scheme. The  maximum  number  of  ordinary  shares  that  may  be  allocated  for  the  purposes  of  the  scheme  is  equivalent  to 2.75 percent  of  the  total  number  of  ordinary  shares  in  issue  at  any  time.  At  December 31,  2009,  9,961,618  ordinary shares (2008: 9,720,794) were available for purposes of the scheme, while the maximum aggregate number of shares which  may  be  acquired  by  any  one  participant  in  the  scheme  is  5 percent  of  the  ordinary  shares  allocated  for  the purposes  of  the  share  incentive  scheme  (or  0.1375 percent  of  the  total  number  of  ordinary  shares  in  issue)  –  at December 31,  2009,  a  maximum  of  498,080  ordinary  shares  per  employee  could  be  issued  in  aggregate (2008: 486,040).
  Employees  participate  in  the  share  incentive  scheme  to  the  extent  that  they  are  granted  options  or  rights  to  acquire shares and accept them. All options or rights which have not been exercised within ten  years from the date on which they were granted, automatically expire.
  The incentives offered by AngloGold Ashanti are reviewed periodically to ensure that they remain globally competitive, so as to attract, reward and retain managers of the highest caliber. As a result, several types of incentives, each with their  own  issue  and  vesting  criteria  have  been  granted  to  employees  –  collectively  known  as  the  “AngloGold  Share Incentive Scheme or share incentive scheme”.
  Although  the  Remuneration  Committee  has  the  discretion  to  incentivize  employees  through  the  issue  of  shares,  only options or rights have so far been granted. The type and vesting criteria of the options or rights granted are:Time-relatedThe granting of  time-related options was approved  by shareholders at the general meeting held on June 4, 1998 and amended  by  shareholders  at  the  annual  general  meeting  held  on  April 30,  2002,  when  it  was  agreed  that  no  further time-related options would be granted and all options granted hereunder will terminate on February 1, 2012, being the date on which the last options granted under this criteria may be exercised or they will expire. Time-related options vest over a five-year period from the date of grant and may be exercised in tranches of 20 percent each  in  years  two,  three  and  four  and  40 percent  in  year  five.  As  of  the  date  of  this  report,  all  options  granted  and outstanding have vested in full.Performance-relatedThe  granting  of  performance-related  options  was  approved  by  shareholders  at  the  annual  general  meeting  held  on April 30, 2002 and amended at the annual general meeting held on April 29, 2005 when it was agreed that no further performance related options would be granted and all options granted hereunder will terminate on November 1, 2014, being the date on which the last options granted under this criteria may be exercised or they will expire. Performance-related options granted vest in full, three years from the date of grant, provided that the conditions under which the options were granted are met. All options granted and outstanding vested in full on November 1, 2007.Bonus Share Plan (BSP) The  granting  of  rights  in  terms  of  the  BSP  was  approved  by  shareholders  at  the  annual  general  meeting  held  on April 29, 2005 and amended at the general meeting held on May 6, 2008 when shareholders approved an increase in the  maximum  level  of  the  bonus  payable  to  eligible  participants,  as  well  as  shortening  the  vesting  period.  Executive directors, executive officers and other management groups are eligible for participation. Each award made in respect of the BSP entitles the holder to acquire one ordinary share at “nil” cost. In respect of all awards granted to and including 2007, these awards vest in full, three years from the date of grant, provided that the participant is still in the employ of the company at the date of vesting unless an event, such as death, occurs which may result in an earlier vesting date. In respect of awards granted in 2008 and onwards, the vesting period has been shortened to 40 percent in year one and


60 percent  in  year  two  from  the  date  of  grant  or,  in  the  event  that  the  exercising  of  awards  only  takes  place  in  year three, then 120 percent of awards granted will be available for exercising. Long-Term Incentive Plan (LTIP)The  granting  of  rights  in  terms  of  the  LTIP  was  approved  by  shareholders  at  the  annual  general  meeting  held  on April 29,  2005.  Executive  directors,  executive  officers  and  selected  senior  management  are  eligible  for  participation. Each award made in respect of the LTIP entitles the holder to acquire one ordinary share at “nil” cost. Awards granted vest  three  years  from  date  of  grant,  to  the  extent  that  the  stretched  company  performance  targets,  under  which  the rights were granted, are met and provided that the participant is still in the employ of the company, or unless an event, such as death, occurs which may result in an earlier vesting date. PARTICIPATION  BY  EXECUTIVE  DIRECTORS,  EXECUTIVE  MANAGEMENT  AND  OTHER  MANGERS  IN  THE ANGLOGOLD SHARE INCENTIVE SCHEMEOptions and rights to  subscribe for ordinary shares  in the  company granted to, and exercised by, executive directors, executive management and other managers during the year to December 31, 2009 are listed in the table below:
 
 M Cutifani
 Venkat
 (1)
 
 Executive
 Management
 (2)
 
 Other
 Management
 Total
 Schemes
 Granted and outstanding at January 1, 2009
 
 
 
 
 
 - Number
 (3)
 
 39,440
 
 62,027
 
 
 433,488
 
 
 2,906,841
 
 3,441,796
 
 
 
 
 
 
 Granted during the year
 
 
 
 
 
 - Number
 60,687
 36,029
 172,020
 932,379
 1,201,115
 
 
 
 
 
 
 Exercised during the year
 
 
 
 
 
 - Number
 _
 (8,564)
 (92,452)
 (1,030,900)
 (1,131,916)
 - Pre-tax gain at date of exercise – R’000
 _
 2,621
 20,370
 169,445
 192,436
 
 
 
 
 
 
 Lapsed during the year
 
 
 
 
 
 - Number
 _
 (7,308)
 (27,123)
 (248,880)
 (283,311)
 
 
 
 
 
 
 Held at December 1, 2009
 
 
 
 
 
 - Number
 (4)
 
 100,127
 82,184
 485,933
 2,559,440
 3,227,684
 Latest expiry date
 Feb 16, 2019
 Feb 16, 2019
 Feb 16, 2019
 Feb 16, 2019
 
  (1)
 
 Mr Venkatakrishnan (Venkat) applied all the after tax proceeds from the sale of his share options to acquire 5,130 ordinary shares (2008: 4,569) in AngloGold Ashanti.
 (2)
 
 Of  the  92,452  options  exercised  by  the  executive  management,  the  proceeds  from  the  sale  of  48,595  options  were  used  to  acquire  16,911 ordinary shares in the company (2008: of the 15,563 options exercised, the proceeds from the sale of 12,963 options were used to acquire 2,304 ordinary shares).
 (3)
 
 As a result of the change in status, the following movements to opening balances were made:
 
 – From executive management status to other management – 17,099 options/awards
 (4)
 
 Of the 3,227,684 options/awards granted and outstanding at December 31, 2009, 983,094 options/awards are fully vested.


OPTIONS AND RIGHTSAs is required to be disclosed in terms of the AngloGold Share Incentive Scheme and stock exchange regulations, the movement in respect of options and rights granted and the ordinary shares issued as a result of the exercise of options and rights during the year January 1, 2009 to December 31, 2009 is:
  
 
   
   
        Time-related
 Performance-
 related
 
 Bonus share
 plan
 Long-term
 incentive plan
 Total
 Ordinary
 shares issued
  At January 1, 2009
  116,491
 1,389,833
 
 945,027
 990,445
 3,441,796
 4,968,504
  
 Movement during the year
  
 
 
  
 – Granted
  -
 -
 
 666,541
 534,574
 1,201,115
 
  
 – Exercised
  (88,239)
 (725,620)
 
 (246,872)
 (71,185)
 (1,131,916)
 1,131,916
  
 –- Lapsed/expired
  -
 (24,238)
 
 (68,988)
 (190,085)
 (283,311)
 
  
 At December 31, 2009
  28,252
 639,975
 
 1,295,708
 1,263,749
 3,227,684
 6,100,420
  
 Average exercise/issue price per share  -  R
  146.28
 241.28
 
 249.07
 253.60
 
 
  Effective October 15, 2008, the JSE amended Schedule 14 (Requirements for share incentive schemes) of the Listings Requirements.  AngloGold  Ashanti  is  required  to  amend  the  terms  of  its  Share  Incentive  Scheme  by  obtaining shareholder approval to amend the total number of shares attributable to the share incentive scheme, from 2.75 percent of issued share capital from time to time, to a fixed number of shares that may be issued to the scheme. Although the amendment only has to be in place by January 1, 2011, AngloGold Ashanti will be seeking shareholder approval at the annual general meeting to be held on May 7, 2010 to grant to the directors, authority to issue up to 17,000,000 shares (approximately 5 percent of issued capital at December 31, 2009) which is management’s estimate of options/awards to be granted over the next three years, including options/awards granted and outstanding as at December 31, 2009. The total  number  of  options/awards  that  may  be  issued  in  aggregate  to  any  one  participant  to  the  scheme  will  remain  at 5 percent of the total number of shares attributable to the scheme. Also effective October 15, 2008, the recycling of options/awards that have vested and which have been delivered and for which AngloGold Ashanti shares have been issued, is no longer allowed. The table below reflects the total number of options/awards that are unissued, as affected by this Listings Requirements rule change:
 
 
  
  
  
 DETAILS
 OPTIONS / AWARDS
  
    
   
    
           
 Total shares available but unissued at December 31, 2009
  *  Based on the shares attributable to the share incentive scheme without taking cognizance of the proposed change.
  
 Analysis of options and rights outstanding at December 31, 2009
 
         HOLDING
 
 
   HOLDERS
 NUMBER OF
 OPTONS
 
                                                         Total


ITEM 7: SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
 
 OVERVIEW
  
 DESCRIPTION OF ANGLOGOLD ASHANTI’S SHARE CAPITAL
  
   
          
 At  the  annual  general  meeting  of  shareholders  held  on  May 15,  2009,  shareholders  approved  an  increase  in  the company’s authorized ordinary share capital from 400,000,000 to 600,000,000 ordinary shares.
 
  
  
  
 Title of class
 Authorized
 Issued
             All  the  issued  ordinary  shares,  E ordinary  shares,  A  redeemable  preference  shares  and  B  redeemable  preference shares are fully paid and are not subject to further calls or assessment by AngloGold Ashanti.  For a discussion of rights attaching  to  the  ordinary  shares,  E ordinary  shares,  the  A  redeemable  preference  shares  and  the  B  redeemable preference shares, see “Item 10B.: Memorandum and Articles of Association”.
 
 The following are the movements in the issued share capital at December 31:
 Ordinary shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Number of
 shares
 Rand
 Number of
 shares
 Rand
 Number of
 shares
 Rand
 
 2009
 2008
 2007
 At January 1
 353,483,410
 88,370,853  277,457,471
 69,364,368  276,236,153
 69,059,038
 Issued during year
 
 
 
 
 – $500 million equity raising
 –
 –
 –
 –
 –
 –
 
 – Rights offer
 –
 –
 69,470,442
 17,367,611
 –
 –
 
 – Golden Cycle acquisition
 –
 –
 3,181,198
 795,299
 –
 –
 
 – São Bento acquisition
 –
 –
 2,701,660
 675,415
 –
 –
 
 – Equity offering to fund the initial
 35 percent interest in the Kibali gold project
 7,624,162
 1,906,041
 –
 –
 –
 –
 
 – Bokamoso ESOP and BEE
 transaction
 –
 –
 –
 –
 31,410
 7,852
 
 – Bokamoso ESOP on conversion
 of E ordinary shares
 1,181
 295
 94
 24
 8,026
 2,007
 
 – Exercise of options by
 participants in the AngloGold Share Incentive Scheme
 1,131,916
 282,979
 672,545
 168,136
 1,181,882
 295,471
 At December 31
 362,240,669
 90,560,167 353,483,410
 88,370,853  277,457,471
 69,364,368
 
 During the period January 1, 2010 to and including April 14, 2010, 140,184 ordinary shares were issued at an average issue  price  of  R282.88 per  share,  resulting  in  362,380,853  ordinary  shares  being  in  issue  at  April 14,  2010.    Of  the 140,184 ordinary  shares  issued  during  the  period  January 1,  2010  to and  including  April 14,  2010, no ordinary  shares were issued on conversion and cancellation of 85,636 E ordinary shares in accordance with the applicable conversion formula.


E ordinary shares
   On December 11, 2006, shareholders in general meeting authorized the creation of a maximum of 4,280,000 E ordinary shares to be issued pursuant to an Employee Share Ownership Plan and a Black Economic Empowerment transaction (BEE transaction). All E-ordinary shares have been issued.
  
 Number of
 shares
 Rand
 Number of
 shares
 Rand
 Number of
 shares
 Rand
 
 2009
 2008
 2007
 At January 1
 
 3,966,941
 991,735
 4,140,230
 1,035,057
 4,185,770
 1,046,443
 
 Issued during year to the:
 
 
 
 
 
 
 
 – Bokamoso ESOP Trust
 –
 –
 –
 –
 94,230
 23,557
 
 – Cancelled in exchange for ordinary shares in terms of the cancellation formula
 
 (171,943)
 (42,986)
 ( 173,289)
 (43,322)
 (139,770)
 (34,943)
 At December 31
 
 3,794,998
 942,323
 3,966,941
 991,735
 4,140,230
 1,035,057
 
 
 In terms of the authority granted by shareholders, on vesting, E ordinary shares are cancelled in exchange for ordinary shares, in accordance with the cancellation formula. All E ordinary shares which are cancelled may not be re-issued and therefore, do not form part of the authorized but unissued share capital of the company.
   In 2009, E ordinary share capital amounting to R17,505,881 in respect of 138,059 unconverted but cancelled E ordinary shares  was  transferred  to  ordinary  share  premium.  E ordinary  shares  are  not  exchanged  for  ordinary  shares  in  the instance when the market price of an AngloGold Ashanti ordinary share is less than the value of the E ordinary share as calculated in accordance with the cancellation formula.
 On November 1, 2009, the first tranche of the E ordinary shares issued to the Bokamoso ESOP and to Izingwe Holdings (Pty) Limited (“Izingwe”) vested. In terms of the rules pertaining to the E ordinary shares, if at the date of the vesting the cost price of the E Ordinary shares as calculated in accordance with the cancellation formula is greater than the market price on the last business day prior to the date of vesting, then the conversion of the E ordinary shares will be deferred. In respect of the Bokamoso ESOP, vesting will be deferred until May 1, 2010 at which time the E ordinary shares will either  be  exchanged  for  AngloGold  Ashanti  ordinary  shares  or  will  be  cancelled  without  benefit,  as  calculated  in accordance with the cancellation formula. In respect of the E ordinary shares issued to Izingwe, and in accordance with the rules pertaining to the E ordinary shares, notice was received from Izingwe deferring vesting.  Izingwe has, during the  period  November 1,  2009  to  and  including  May 1,  2010  (the  “extended vesting  period”),  the option  to exercise  its rights to exchange the E ordinary shares for AngloGold Ashanti ordinary shares on the giving of such notice to do so, in accordance with the calculation formula. Any E ordinary shares that are unexercised during the extended vesting period will be cancelled.
 During the period January 1, 2010 to and including  April 14,  2010, no ordinary shares were issued  on  conversion and cancellation  of  85,636 E ordinary  shares  in  accordance  with  the  applicable  conversion formula,  resulting  in  E ordinary share capital amounting to R10,858,644 being transferred to ordinary share capital. Redeemable preference shares The A and B redeemable preference shares (issued of 2,000,000 and 778,896, respectively), all of which are held by a wholly-owned  subsidiary  Eastvaal  Gold  Holdings  Limited,  may  not  be  transferred  and  are  redeemable  from  the realization  of the assets relating to  the Moab Lease area after  cessation of mining operations in the area. The shares carry  the  right  to  receive  dividends  equivalent  to  the  profits  (net  of  royalty,  ongoing  capital  expenditure  and  taxation) from operations in the area. No further A and B redeemable preference shares will be issued.


7A.
 MAJOR SHAREHOLDERS
 
 Paulson  &  Co.  Inc,  an  investment  management  company,  based  in  the  United  States  holds  42,849,864  AngloGold Ashanti ADRs or approximately 11.83 percent of the issued share capital. Paulson acquired its shares from Anglo South Africa Capital (Proprietary) Limited, a wholly-owned subsidiary of Anglo American plc when that company divested from AngloGold Ashanti  in March 2009. In addition,  Allan Gray Unit Trust Management Limited holds a total of 36,689,809 AngloGold Ashanti shares, representing 10.13 percent of the issued share capital.
  According to information available to the directors, the following are the only shareholders holding, directly or indirectly, in excess of 5 percent  of the ordinary share capital of the  company  during the periods  December 31, 2009, 2008 and 2007:
 
 Ordinary shares held at
 
 December 31, 2009
 
 December 31, 2008
 
 December 31, 2007
 
 Shareholder*
 
 Number
 
 %
 voting
 rights
 
 Number
 
 %
 voting
 rights
 
 Number
 
 % voting
 rights
 
 Paulson & Co., Inc
 
 42,849,864
 
 11.83
 
 Not disclosed
 
 Not disclosed
 
 Allan Gray Unit Trust Management Limited
 
 36,689,809
 
 10.13
 
 42,865,757
 
 12.13
 
 26,369,033
 
 9.51
 
 Public Investment Corporation of South Africa
 
 17,308,397
 
 4.78
 
 19,453,308
 
 5.53
 
 26,937,476
 
 9.71
 
 NWQ Investment Management LLC Co
 
 12,312,563
 
 3.40
 
 21,219,474
 
 6.00
 
 Not disclosed
 
 Tradewinds Global Investors LLC
 
 10,268,839
 
 2.83
 
 31,442,064
 
 8.89
 
 22,858,453
 
 8.25
 
 Anglo American plc (AA plc)
 
 –
 
 –
 
 57,175,183
 
 16.17
 
 46,002,929
 
 16.58
 
 
 * Shares held may not necessarily reflect the beneficial shareholder.
 
 At December 31, 2009, a total of 176,762,305 (or 48.80 percent of issued ordinary share capital) was held by The Bank of  New  York  Mellon,  as  Depositary  for  the  company’s  American  Depositary  Receipt  program.    Each  American Depositary Share (ADS) is equivalent to one ordinary share. At December 31, 2009, the number of persons who were registered holders of ADSs was reported at 3,877. AngloGold Ashanti is aware that many ADSs are held of record by brokers  and  other  nominees,  and  accordingly  the  above  numbers  are  not  necessarily  representative  of  the  actual number of persons who are beneficial holders of ADSs or the number of ADSs beneficially held by these persons.
  All shareholders have the same voting rights.
  As at December 31, 2009, there were 13,747 holders of record of AngloGold Ashanti ordinary shares.  Of these holders 370  had  registered  addresses  in  the  United  States  and  held  a  total  of  67,859  ordinary  shares,  approximately 0.0187 percent  of  the  total  outstanding  ordinary  shares.    In  addition,  certain  accounts  of  record  with  registered addresses outside the United States, including The Bank of New York Mellon, hold AngloGold Ashanti ordinary shares, in whole or in part, beneficially for United States persons.   At  April 14,  2010,181,830,245  ADSs,  or  approximately  50.17 percent  of  the  total  issued  ordinary  share  capital,  were issued and outstanding and held of record by approximately 3,835 registered holders . Insofar as is known to AngloGold Ashanti, there was no person who, directly or indirectly, jointly or severally, exercised or  could  exercise  control  over  AngloGold  Ashanti,  nor  is  AngloGold  Ashanti  aware  of  any  arrangements  which  might result in a change in control of AngloGold Ashanti.


7B.
 RELATED PARTY TRANSACTIONS
 
 Related  party  transactions  are  concluded  on  an  arm’s  length  basis.    The  group  had  the  following  transactions  with related parties during the years ended December 31, 2009, 2008 and 2007:
 
  December 31, 2009
  December 31, 2008
  December 31,
 2007
  (in millions)
  Purchases
 (by)/from
 related party
  Amounts
 owed to/ (by)
 related party
  Purchases
 (by)/from
 related
 party
  Amounts
 owed to/
 (by) related
 party
  Purchases
 (by)/from
 related party
   $
 $
 $
 $
 $
 Related party transactions of equity accounted joint ventures and associates
       AGA Polymetal Strategic Alliance
  –
 (3)
 –
 (3)
 –
 Margaret Water Company
  1
 –
 1
 –
 –
 Oro Group (Proprietary) Limited
  –
 (2)
 –
 (2)
 –
 Société d’Exploitation des Mines d’Or
 de Sadiola S.A.
  (10)
 (3)
 (5)
 (2)
 (7)
 Société d’Exploitation des Mines d’Or
 de Yatela S.A.
  (3)
 –
 (1)
 (1)
 (3)
 Société  des Mines de Morila S.A.
  (6)
 (1)
 (5)
 (1)
 (5)
 Trans-Siberian Gold plc
  –
 (1)
 –
 (1)
 (1)
 Orpheo (Proprietary) Limited
  –
 (1)
 –
 –
 –
 AuruMar (Proprietary) Limited
  –
 (2)
 –
 –
 –
 
 Amounts owed to/due by joint venture related parties are unsecured, non-interest bearing and under terms that are no less favorable than those with third parties.
 
  
 The  AGA-Polymetal  Strategic  Alliance  (joint  venture)  loan  of  $3  million  advanced  during  2008  is  interest  free  and  is repayable on demand at any time after profits have been generated by the joint venture.
 
 The  Oro  Group  (Proprietary)  Limited  loan  of  $2 million  (2008:  $2 million)  bears  interest  at  a  rate  determined  by  the  Oro Group (Proprietary) Limited’s board of directors and is repayable at their discretion.
 
 The AuruMar (Proprietary) Limited loan of $2 million (2008: $nil million) is unsecured, interest free and there are no fixed terms of repayment.
 
 The Orpheo (Proprietary)  Limited  loan of $1 million  (2008: $nil  million)  is unsecured, interest free and there  are no fixed terms of repayment.
 
 The  Company,  which  holds  an  equity  interest  of  29.7 percent  (2008:  29.7 percent)  in  Trans-Siberian  Gold  plc  (TSG), entered into a transaction during the quarter ended June 30, 2007 with TSG in which two companies were acquired from TSG for a consideration of $40 million. The companies acquired consist of Amikan and AS APK.
 
 In  connection  with  the  relocation  of  Roberto  Carvalho  Silva,  a  former  executive  director  of  the  Company  who  retired  in 2007,  to  Nova Lima,  Brazil,  in  2000,  Mr.  Carvalho  Silva  commenced  renting  a  house  in  Nova  Lima  from  a  Brazilian subsidiary of the Company. Mr. Carvalho Silva purchased the house from the Company’s subsidiary in January 2005. The total purchase price of the  house was BRL1,150,000 ($429,923).  Mr. Carvalho agreed  to pay the purchase price of  the house  in  60 installments,  the  first  being  BRL19,167.70  and  59  installments  of  BRL19,166.65  each,  starting  on January 28, 2005. Such monthly installments were adjusted annually by the cumulative INPC (a Consumer Price Index in Brazil) in lieu of interest.  All outstanding balances were repaid on or about August 31, 2007.
 
 A Brazilian subsidiary of the Company received marketing, communications and corporate affairs services from a Brazilian company  in  which  a  son  of  Roberto  Carvalho  Silva  owns  a  one-third  interest.  The  amounts  paid  by  the  Company’s subsidiary to this company in respect of such services during 2007 was BRL634,023 ($329,055).  The Company terminated the agreement with the Brazilian marketing, communications and corporate affairs services company effective July 2007.
 
 7C.
 INTERESTS OF EXPERTS AND COUNSEL


ITEM 8:  FINANCIAL INFORMATION
 
 8A.
 CONSOLIDATED FINANCIAL STATEMENTS AND OTHER INFORMATION
 
   
 LEGAL PROCEEDINGS
 
  
 In the previous 12 months, there have been no governmental, legal or arbitration proceedings in which any member of the AngloGold Ashanti group is or has been engaged, including any such proceedings which are pending or threatened of  which  AngloGold  Ashanti  is  aware,  which  may  have,  or  have  had  during  the  recent  past,  a  significant  effect  on AngloGold Ashanti or its group’s financial position or profitability.
 
  
  South Africa
   an  action  was  instituted  by  Mr.  Thembekile  Mankayi,  claiming  approximately  R2.6 million  (approximately $0.27 million)  for  damages  allegedly  suffered  by  him  through  contracting  silicosis  while  employed  in  mines now owned by AngloGold Ashanti. An exception was filed by AngloGold Ashanti against the claim, which was argued at a hearing in February 2008 and upheld in the judgment delivered in June 2008.  The plaintiff was granted leave to appeal the judgment, and the appeal was heard by the Supreme Court of Appeal (SCA) on March 4, 2010. The SCA ruled in favor of the company and dismissed the appeal.  This finding confirms that employees  who  qualify  for  benefits  in  respect  of  the  Occupational  Diseases  in  Mines  and  Works  Act (ODMWA)  may  not  have  an  additional  civil  claim  against  their  employer.   If  the  appellant  wants  to  appeal against the decision of the SCA, he will have to apply for leave to appeal within 15 days of the order of the SCA, that is before April 23, 2010.
 
  In  a  similar  action,  claims  have  been  lodged  by  19  plaintiffs  against  Anglo  American  Corporation  of  South Africa  regarding  damages  resulting  from  lung  diseases  allegedly  contracted  during  the  plaintiffs’  former employment with Anglo American.  Exceptions filed by Anglo American against 10 of the claims were upheld reducing the number of claims to nine.  Pleadings have closed in these matters, and no trial date is expected until the first quarter of 2011.
 
  action has been instituted by a group of AngloGold Ashanti pensioners against the company for introducing a CPIX  cap  to  post  retirement  health  care  contributions  by  the  company.   The  company  maintains  that  its action  is  justifiable  and  fair  given  the  circumstances  and  precedent.   Summons  has  been  issued  by  the plaintiffs  demanding  that  AngloGold  Ashanti  restore  the  level  of  contributions  to  what  pertained  before  the introduction  of  the  cap.   The  company  excepted  to  the  summons  on  the  basis  of  it  being  vague  and embarrassing which exception was heard on February 18, 2008 and dismissed.  AngloGold Ashanti is waiting for a court date.
 
  action has been instituted by a former employee against AngloGold Ashanti Health Services (Pty) Limited, a wholly-owned  subsidiary  of  AngloGold  Ashanti,  for  damages  allegedly  caused  as  a  result  of  AngloGold Ashanti  Health  Services  failing  to  obtain  appropriate  consent  to  conduct  an  HIV/AIDS  test  and  thereafter failing to inform the plaintiff appropriately of the outcome.  The plaintiff is demanding damages in the amount of approximately R2 million (approximately $0.21 million).  The trial date has been set for August 15, 2010.
 
  Ghana:
 
  Westchester/Africore  Limited  instituted  action  against  Ashanti  Goldfields  Company  Limited  (Ashanti)  in  the High Court in Accra claiming  damages for breach of  Exploration and  Option Agreement. A provision in the Agreement states that the parties should settle the matter by arbitration under the Arbitration Act of Ghana. In February  2002,  the  court  directed  the  plaintiffs  to  seek  arbitration  as  stipulated  in  the  Agreement.   The plaintiffs  requested  arbitration  under  the  International  Chamber  of  Commerce  (ICC).   Ashanti  raised jurisdictional  objections,  which  the  ICC  supported.  The  plaintiffs subsequently  applied  to  pursue  the  matter through  arbitration  in  Ghana.  AngloGold  Ashanti  nominated  an  arbitrator  in  August  2006  and  notified  the plaintiffs accordingly.  The plaintiffs then unilaterally pulled out of the arbitration and filed a Notice to maintain


Plaintiffs  sought  leave  of  court  to  amend  their  Statement  of  Claim  and  to  call  in  an  expert  witness.  The  matter  was adjourned to June 7, 2010 due to the absence of the Plaintiff’s expert witness.
  
  a  group  calling  itself  Ashanti  Miners’  Club  formed  by  ex-contract  workers  are  claiming  that  the  company should pay them compensation because their salaries were not aligned to the United States dollar and that they  should  have  been  paid  as  permanent  employees  during  the  subsistence  of  their  contracts  with  the company. The matter was taken to arbitration with the Ministry of Manpower Development and Employment in  Ghana  appointing  a  sole  arbitrator  to  arbitrate  and  make  an  award.  The  award  by  the  arbitrator  was generally in favor of the company.  The plaintiffs took further action, claiming that they were dissatisfied with the findings and award of the arbitrator.  The parties are attempting an out of court settlement.
 
  Appiah  Agyei  Boateng  and  272  others,  claiming  to  be  the  employees  of  AngloGold  Ashanti  petitioned  the National Labor Commission (NLC) for the payment of their gratuities.  The basis of their claim was that they were  at  all  material  times  employees  of  AngloGold  Ashanti  (Ghana)  Limited  and  that  they  have  been transferred to Mining and Building Contractors Limited (MBC), an independent construction firm, without their consent.   MBC  have  appeared  before  the  NLC  and  confirmed  AngloGold  Ashanti’s  position  that  the petitioners were at all material times the employees of MBC.  On August 20, 2008, the NLC found in favor of the  petitioners.   AngloGold  Ashanti  then  initiated  proceedings  in  the  High  Court  seeking  to  have  the  NLC decision  set  aside.  Hearing  has  begun  and  AngloGold  Ashanti’s  first  witness  has  been  cross-examined  by both  the  defendants’  counsel.    The  matter  has  been  adjourned  to  April 14,  15  and  16,  2010 for  hearing  to continue.
 
  R-Co made a claim against the company in the Ghana Arbitration Center in the amount of GBP1.63 million (approximately $2.4 million).  The claim is in respect of alleged losses suffered by R-Co as a consequence of AngloGold  Ashanti  terminating a  supply  contract  under  which  R-Co  provided  certain  personal  protective equipment  and  related  services  to  AngloGold  Ashanti.    The  point  of  disagreement  between  R-Co  and  the company is in the interpretation of the limitation of liability clause of the supply contract.  AngloGold Ashanti’s position  is  that  R-Co  is  claiming  losses  that  were  not  contemplated  by  the  supply  contract  and  did  not mitigate  any  losses  that  would  be  recoverable  under  the  supply  contract.   A  preliminary  hearing  has  been conducted  with R-Co  having  submitted  their  statement  of  case  and  AngloGold  Ashanti  having  filed  its statement.  The hearing will continue on April 14, 2009.
 
  Tanzania:
 
  Joshua  Manyero  and  36  others  have  instituted  action  against  Geita  Gold  Mining  Company  (GGM).  It  is  a representative lawsuit whereby the  claimants  claim to  have  received Tshs 185,045,482.00  in compensation but  they  claim  to  be  entitled  to  a  payment  of  Tshs 3.6  billion.   They  are  suing  for  the  balance  of Tshs 3.6 billion  (approximately  US$2.8  million).   Leave  to  file  a  representative  suit  was  granted  and  the matter has been set down for mention in the courts during 2010.
 
  Jackson  Manyelo  and  others  have  applied  to  file  a  representative  suit  against  GGM.   They  claim  to  have been  affected  by  the  Katoma  blasting  and  they  allege  that  they  have  suffered  damages  in  the  amount  of Tshs 9.6 billion (approximately $7.5 million).  The application for a representative suit was granted and a suit has been filed. The matter has been set down for mention in the courts in April 2010.
 
  In  Mali,  DESIMONE  initiated  a  forced  intervention  action  against  the  company.    The  South  African  company ANSER entrusted MAED of Shore Limited with the construction of the Yatela Gold Plant.  The company MAED in turn  subcontracted  with  DESIMONE  for  the  carrying  out  of  work  in  the  operating  plant.    After  carrying  out  the work, MAED was not able to pay the invoices submitted to it by DESIMONE.  Thus, in order to get its invoices settled, it issued a writ against AngloGold Ashanti for a forced intervention because the work was carried out for AngloGold Ashanti.  The amount involved is approximately $3.5 million.  AngloGold Ashanti is disputing the claim.
 
  Brazil
   Mineração  Serra  Grande  S.A.  (MSG),  the  operator  of  the  Crixas  mine  in  Brazil,  has  received  two  tax assessments from the State of Goiás on the export of gold shipments, which the tax authorities claim were not  authorized  by  a  special  agreement  (TARE).    In  November 2006  the  administrative  council’s  second chamber ruled in favor of MSG and cancelled the tax liability.  The State of Goiás appealed this decision.  A second assessment was issued on the same grounds as the first in October 2006.  The amounts involved are $46.6 million for the sales tax on gold deliveries and $28.7 million relating to VAT.


MSG received an assessment in October 2003 in the amount of $8.8 million from the State of Minas Gerais relating to sales tax on gold returned from a branch in Minas Gerais to the company’s head office in the State of Goiás.
 
  The  company  received 4  Federal tax  assessments,  including income tax and annual  property  taxes, based on owernship of properties outside of urban perimeters and VAT.  The amounts involved are $3.3 million for Mineração Morro Velho Ltda (MMV), $1.2 million of AngloGold Ashanti Brasil Mineração Ltda (AGABM) and $0.42 million for MSG. The company believes that the risk of loss is remote.
 
  Fifteen federal tax  assessments in the amount of  $10.1 million for MMV,  AGABM  and MSG were received.  These assessments include income tax and annual property taxes, based on ownership of properties outside of urban perimeters, and a social contribution.
 
  MMV  received  4  federal  tax  assessments  in  the  amount  of  $4.2 million  related  to  VAT  and  social contributions.  The company is of the view that the of loss to MMV is remote.
 
  AGABM received 2  tax assessments from the state government claiming lack  of VAT collection on indirect imports and 5 tax assessments on social contributions, all amounting to $4.7 million.  It is believed that the risk of loss to AGABM is remote.
 
  AGABM, received in late November 2009 a tax assessment issued by DNPM (a Federal Mining entity) in the amount  of  $26.4 million  (R$41.2 million)  as  a  result  of  a  tax  inspection  initiated  in  August 2007.    The inspection  by  DNPM  covered  the  period  1991  to  2006 and was  part of a  nationwide  action  focused  on  the calculation  and  payment  of  the  CFEM  (a  financial  contribution  on  mining  exploitation)  by  all  mining companies.    This  matter  is  before  the  administrative  court  and  AngloGold  Ashanti  believes  that  there  is  a remote risk of loss to AGABM.
 
  AGABM  has  been  accused  of  failing  to  pay  certain  required  payments  towards  the  social  security  (INSS) system  for  the  period  from  1997  to  2004.    The  amount  involved  is  $2.4 million.    This  matter  is  before  the administrative court.
 
  As an exporter, AGABM is entitled to the Drawback Incentive, which provides for the suspension of taxes on certain imported products that will ultimately form part of exported products.  The Government believes that imported  products  do  not  form  part  of  the  exported  products  (gold)  and  an  assessment  in  the  amount  of $2.5 million was received in December 2008.  The case will be heard by the judicial court but the company believes that there is a remote risk of loss to AGABM.
 
  During  the  period  from  2001  to  2004  AngloGold  Ashanti  Córrego  do  Sítio  Mineração  S.A  (AGACSM) deducted  from  its  taxable  revenue  certain  expenses  that  are  being  questioned  by  the  tax  authority;  the company  used  some  VAT  credits  to  settle  its  debits  which  are  being  questioned  by  the  tax  authority;  and CFEM  and  social  contributions.    The  amounts  involved  are  $4.4 million  for  which  the  risk  is  possible  and $5.1 million, for which the risk of loss to the company is remote.
 
  AGABM  has  its  own  hydroelectric  power  system  that  generates  electrical  power  for  its  own  consumption.  The  system  currently  supplies  the  Quiroz  Plant.    The  government  is  claiming  VAT  on  the  electric  power transfer  in  the  amount  of  $14.2 million.    The  case  will  be  heard  by  the  administrative  court  and  AngloGold Ashanti believes that there is a remote risk of loss to AGABM.
 
  At MMV, the tax authorities have raised an assessment in the amount of $103.5 million based on the lack of “Nota Fiscal” (fiscal document) that should have been issued to support the transfer of ore from Cuiaba mine to the Quiroz Plant via an aerial ropeway.  This occurred in a few instances between the periods 2002 and June 2004.  The judicial court ruled in  favor of MMV and the amount has been reduced to $430,000.  The State of Minas Gerais has appealed the decision by the judicial court.
 
  Colombia
 terms  of  Resolution  585  of  2009  the  Ministry  brought  a  list  of  charges  against  the  company  for  carrying  out exploratory activities without having processed the subtraction of the area from the forest reserve.  On May 19, 2009 AngloGold Ashanti submitted a written response to the Ministry. In terms of Order 1743 of 2009 the Ministry decreed the submission of evidence.  AngloGold Ashanti continues to engage with the Ministry.


USA
 request  letter  to  AngloGold  Ashanti  pursuant  to  EPA’s  authority  under  §  104  of  the  Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) related to the Nelson Tunnel/Commodore Waste Rock Pile Superfund Site in Mineral County, Colorado.  AngloGold Ashanti filed a response with the EPA.
 
  Argentina
 
  Room  V  of  the  Court  of  Appeals  entered  judgment  confirming  the  Federal  Administrative  Tax  Court’s decision, whereby the Company’s appeal was denied, thus ratifying the tax valuation method of considering the dividends distributed by the company in 2000 to be subject to income tax withholdings, in excess of the income assessed as provided by Income Tax Law’s general regulations, even when such regulation was not in force when the company was benefited by the tax stability system established by Mining Investments Law No.  24,  196.    On  August 6,  2009  the  Supreme  Court  found  in  favor  of  the  company  rejecting  the  Federal Administrative Tax Court’s decision.
 
  The  Argentine  government  imposed  an  export  duty  of  5 percent on  Cerro  Vanguardia  to the  metal  product that the company is exporting.  This measure contradicts the fiscal stability right provided by Section 8 of the Mining  Investments  Law  No.  24,196,  a  provision  that  has  been  duly  and  continuously  applied  to  Cerro Vanguardia since August 16, 1996.  The fiscal stability system regime under the Mining Investment Law has a thirty year guarantee.  A Declarative Order was sought from the Federal Court in February 2008 together with  a  preliminary  injunction.   The  injunction  was  rejected  by  the  Court  and  the  company  appealed.   The Court of Appeal rejected the injunction on April 22, 2008 and the case will now proceed on its merits.
 Dividend policy Dividends are proposed and approved by the  board of directors of  AngloGold Ashanti, based on the  interim and year end  financial  performance.  Dividends  are  recognized  when  declared  by  the  board  of  AngloGold  Ashanti  and  may  be payable in Australian dollars, South African rands, United Kingdom pounds or Ghanaian cedis.  Dividends declared to foreign shareholders are not subject to the approval by the South African Reserve Bank (SARB) in terms of South African foreign exchange control regulations. Dividends are freely transferable to foreign shareholders from both trading and non-trading profits earned in South Africa by publicly listed companies. Under South African law, the company may declare and pay dividends from any reserves included in total shareholder’s equity  (including  share  capital  and  share  premium)  calculated  in  accordance  with  International  Financial  Reporting Standards (IFRS), subject to its solvency and liquidity. AngloGold Ashanti expects to continue to pay dividends, although there can be no assurance that dividends will be paid in  the  future  or  as  to  the  particular  amounts  that  will  be  paid  from  year  to  year.  The  payment  of  future  dividends  will depend upon the Board’s ongoing assessment of AngloGold Ashanti’s earnings, after providing for capital expenditure and  long-term  growth ,  and   assessment and restrictions placed by the conditions of the convertible bond and other factors. Withholding taxOn  February 21,  2007,  the  South  African  Government  announced  a  proposal  to  replace  the  Secondary  Tax  on Companies  with  a  10 percent  withholding  tax  on  dividends  and  other  distributions  payable  to  shareholders.  This proposal  is  expected  to  be  implemented  in  2010.  Although  this  may  reduce  the  tax  payable  by  the  South  African operations of the group, thereby increasing distributable earnings, the withholding tax will generally reduce the amount of dividends or other distributions received by AngloGold Ashanti shareholders. 8B.  SIGNIFICANT CHANGES


ITEM 9:  THE OFFER AND LISTING
 9A.
 OFFER AND LISTING DETAILS
 The  following  table  sets  out,  for  the  periods  indicate,  the  reported  high  and  low  market  quotations  for  AngloGold Ashanti’s ordinary shares on the JSE and for its sponsored ADSs on the NYSE:
  JSE
 NYSE
 (1)
 
 Year ended December 31
 
  High
 Low
 High
 Low
  (South African cents per
 ordinary share)
 (US dollars per ADS)
 Annual information
     2005
     2006
     2007
     
  2008
     2009
          Quarterly information
     2008
                              2009
                              2010
               Monthly information
                                    (2)
       (1)
 
 Each ADS represents one ordinary share.
 (2)
 
 Through April 14, 2010.
 See “Item 7A.: Major shareholders” for the number of ADSs outstanding at December 31, 2009.
 
 9B.
 PLAN OF DISTRIBUTION


9C.
 MARKETS
 NATURE OF TRADING MARKET
 The principal trading markets for AngloGold Ashanti’s ordinary shares are the New York Stock Exchange, in the form of ADSs, under the symbol “AU” and the JSE Limited, in the form of ordinary shares, under the symbol “ANG”. AngloGold Ashanti’s ordinary shares are also listed on the London Stock Exchange under the symbol “AGD”, Euronext Paris  under  the  symbol  “VA”  and  the  Ghana  Stock  Exchange  under  the  symbol  “AGA”.    Its  ordinary  shares  are  also listed  on  the  Australian  Stock  Exchange,  in  the  form  of  Chess  Depositary  Interests  (each  representing  one-fifth  of  an ordinary share) under the symbol “AGG”, on the Ghana Stock Exchange, in the form of Ghanaian Depositary Shares or GhDSs (each representing one one-hundredth of an ordinary share) under the symbol “AADS” and quoted on Euronext Brussels in the form of unsponsored international depositary receipts under the symbol “ANG”.
 9D.  SELLING SHAREHOLDERS Not applicable.9E.  DILUTION Not applicable.9F.  EXPENSES OF THE ISSUE


ITEM 10:  ADDITIONAL INFORMATION
 
 10A.  SHARE CAPITAL
 
 ANGLOGOLD ASHANTI'S ORDINARY SHARES AND PREFERENCE SHARES
  
 At  the  annual  general  meeting  of  shareholders  held  on  May 15,  2009,  shareholders  approved  an  increase  in  the company’s  authorized  ordinary  share  capital.    AngloGold  Ashanti’s  authorized  and  issued  share  capital  as  of December 31, 2009 and April 14, 2010 (being the latest practicable date prior to the publication of this document) is set out below:
 
 Issued
 
 Title of Class
 Authorized
                    
 All  of  the  issued  ordinary  shares,  E  ordinary  shares,  A  redeemable  preference  shares  and  B  redeemable  preference shares are fully paid and are not subject to further calls or assessment by AngloGold Ashanti.
 
 All  of  the  A  redeemable  preference shares and  B  redeemable  preference shares are  held  by  Eastvaal  Gold  Holdings Limited,  AngloGold  Ashanti’s  wholly-owned  subsidiary.  AngloGold  Ashanti’s  Articles  of  Association  provide  that  the A redeemable preference shares and B redeemable preference shares are not transferable.
 
 The  table  below  details  changes  in  the  ordinary  issued share  capital  of  AngloGold  since  December  31, 2006  through December 31, 2009.
 
 Period to
 Description
 Number of
 Shares
           Employee Share ownership program – on conversion of E ordinary shares
   
      Employee Share ownership program – on conversion of E ordinary shares
  
  Acquisition of Golden Cycle Gold Corporation
  
    
  Acquisition of São Bento Gold Company Limited
    
 
   
 Employee Share ownership program – on conversion of E ordinary shares
  
 Equity offering to fund the initial effective 35 percent interest in the Kibali gold project


The table below details changes in the E-ordinary issued share capital of AngloGold Ashanti since December 31, 2006 through December 31, 2009.
 
 Period to
 Description
 Number of
 Shares
       
  Cancelled and exchanged for ordinary shares in accordance with the cancellation formula
      Cancelled and exchanged for ordinary shares in accordance with the cancellation formula
      Cancelled and exchanged for ordinary shares in accordance with the cancellation formula
  
  
  
 E-ordinary  shares  are  cancelled  in  exchange for  ordinary  shares,  in  accordance  with  the  cancellation  formula.    All  E-ordinary  shares  which  are  cancelled  may  not  be  re-issued  and  therefore,  does  not  form  part  of  the  unissued  share capital of the company.
  Of the 171,943 E-ordinary shares which were cancelled during 2009, 138,059 E-ordinary shares were cancelled without ordinary shares being issued.  E-ordinary shares are not exchanged for ordinary shares in the instance when the market price of an AngloGold Ashanti ordinary share is less than the value of the E-ordinary share as calculated in accordance with the cancellation formula.
  On November 1, 2009, the first tranche of the E-ordinary shares issued to the Bokamoso ESOP and to Izingwe Holdings (Pty) Limited (Izingwe) vested.  In terms of the rules pertaining to E ordinary shares, if at the date of the vesting the cost price of the E-ordinary shares as calculated in accordance with the cancellation formula is greater than the market price on the last business day prior to the date of vesting, then the conversion of the E-ordinary shares will be deferred.  In respect of the Bokamoso ESOP, vesting will be deferred until May 1, 2010 at which time the E-ordinary shares will either be  exchanged for AngloGold Ashanti ordinary  shares or will be cancelled  without  benefit, as calculated  in accordance with  the  cancellation  formula.   In  respect  of  the  E-ordinary  shares  issued  to  Izingwe,  and  in  accordance  with  the  rule pertaining  to  E ordinary  shares,  notice  was  received  from  Izingwe  deferring  vesting.    Izingwe  has,  during  the  period November 1,  2009  to  and  including  May 1,  2010  (the  extended  vesting  period),  the  option  to  exercise  its  rights  to exchange  the  E-ordinary  shares  for  AngloGold  Ashanti  ordinary  shares  on  the  giving  of  such  notice  to  do  so,  in accordance with the calculation formula.  Any E-ordinary shares that are unexercised during the extended vesting period will be cancelled.10B.  MEMORANDUM AND ARTICLES OF ASSOCIATION
  REGISTRATIONAngloGold Ashanti is incorporated under the  laws of the Republic of South Africa and registered with the  Registrar  of Companies under registration number 1944/017354/06. AngloGold Ashanti’s memorandum of association provides that the  company’s  main  business  is  to  carry  on  gold  exploration,  the  mining  and  production  of  gold,  the  manufacturing, marketing and selling of gold products and the development of markets for gold.AngloGold  Ashanti  is  governed  by  its  articles  of  association  which  document  is  available  for  inspection  as  set  out  in “Item 10H.: Documents on Display” and a summary of pertinent provisions, including rights of the holders of shares in AngloGold Ashanti, are set out below.


This  summary  does  not  contain  all  the  information  concerning  the  rights  of  holders  of  AngloGold  Ashanti’s  ordinary shares  and  is  qualified  in  its  entirety  by  reference  to  the  law  of  South  Africa  and  AngloGold  Ashanti’s  governing corporate documents. As well as being governed by the provisions of the articles of association, the rights of holders of AngloGold Ashanti’s ordinary shares are governed by the South African Companies Act 61 of 1973, as amended, which is referred to as the Companies Act, the South African Securities Regulation Code on Take-Overs and Mergers and the JSE Listing  Requirements. In addition, the  South  African  Companies Act 71 of 2008, which is referred to as the 2008 Companies  Act,  was  signed  by  the  President  of  the  Republic  of  South  Africa  on  April 8,  2008  and  will  replace  the Companies  Act  upon  its  commencement,  which  is  expected  to  occur  during  2010.    Further,  the  rights  of  holders  of AngloGold Ashanti ADSs are governed by  the Deposit Agreement between  AngloGold Ashanti and The  Bank of New York Mellon.  See “– Share Rights, Preferences and Restrictions – The Deposit Agreement”. The founding document of a company under the 2008 Companies Act will be the Memorandum of Incorporation, which will replace what is currently the memorandum and articles of association.  The memorandum and articles of association of  an  existing  company  will  continue  to  be  effective  for  two  years  notwithstanding  any  conflicts  between  the memorandum  and  articles  of  association  and  the  2008  Companies  Act  and  can  continue  to  be  effective  beyond  two years if there is no conflict between the memorandum and articles of association and the 2008 Companies Act. The 2008 Companies Act provides that ordinary shares will no longer have a par or nominal value.  It is expected that regulations  will  be  passed  to  provide  for  the  transition  of  existing  par  value  shares  to  no  par  value  shares.    Such regulations are obliged to preserves the rights of the existing shareholders and provide for the company to compensate its  shareholders for any  loss  of  any  such  rights.    Additionally,  under  the  2008  Companies  Act,  a  new  class  of shares referred to as “unclassified shares” may be created.  The rights and terms that will attach to “unclassified shares” are to be determined by the directors of a company.DIRECTORSThe management and control of any business of AngloGold Ashanti is vested in the directors who, in addition to their powers under the articles of association, may exercise all powers and do all such acts and things as may be exercised or  done  by  AngloGold  Ashanti  which  are  not  expressly  required  to  be  exercised  or  done  by  AngloGold  Ashanti’s shareholders in a general meeting.Appointment, Retirement and Removal of DirectorsThe board of directors may appoint any person to be a director and any director so appointed will hold office only until the  following  annual  general  meeting  and  will  then  be  eligible  for  re-election.  The  directors  who  retire  at  the  annual general meeting in this manner will not be taken into account in determining the directors who are to retire by rotation at such meeting.
  At every annual general meeting one-third of the directors, not subject to employment contract, will retire by rotation, or if their number is not a multiple of three, then the number will be rounded down to the nearest whole number.  Directors retiring  by  rotation  are  eligible  for  re-election.  The  directors  so  to  retire  at  such  annual  general  meeting  will,  unless otherwise  determined  by  the  board,  be  those  who  have  been  the  longest  in  office  since  their  last  election,  but  as between persons who become or were last elected directors on the same day, those to retire will (unless they otherwise agree amongst themselves) be determined by lot.
  A director will no longer act as a director of the company if he becomes insolvent or subject to insolvency procedures, is found to be of unsound mind, is requested to resign by at least three-quarters of the directors, is removed by a board resolution  of  AngloGold  Ashanti  or  is  absent  from  board  meetings  without  leave  of  the  directors  for  six  consecutive months.    A  director  can  resign  with  one  month’s  written  notice  unless  he  obtains  the  permission  of  the  directors  to shorten his notice period.
  The  articles  of  association  contain  no  provision  for  directors  to  hold  qualification  shares,  nor  stipulate  an  age  limit requirement for the retirement or non-retirement of directors.


Under  the  2008  Companies  Act,  the  Memorandum  of  Incorporation  of  a  profit  company  must  provide  the  company’s shareholders the  right  to  elect  a  minimum  of  50 percent of  the  company’s  directors.    The  remaining  directors  may  be appointed  in  accordance  with  the  Memorandum  of  Incorporation  of  the  company.    In  addition,  a  director  may  be removed  by  an  ordinary  resolution  at  a  shareholders’  meeting.    The  director  concerned  must  be  given  notice  of  the meeting  and  be  afforded  a  reasonable  opportunity  to  make  a  presentation  on  the  matter  either  personally  or  by representative before a vote is taken by the shareholders.  If a company’s Memorandum of Incorporation so provides, a person may be appointed to be an ex officio director as a consequence of that person holding some other office, title, designation or similar status.
  The 2008 Companies Act provides that the authority of the board and its actions are not limited, negated or invalidated if the  number  of  directors  of  a  company  falls  below  the  minimum  required  by  the  2008  Companies  Act  or  the Memorandum of Incorporation of such company.  Instead, the board is obliged, within 40 business days, to convene a shareholders’  meeting  to  elect  additional  directors  to  bring  the  number  of  directors  into  compliance  with  the  2008 Companies Act and the Memorandum of Incorporation of such company. Board Meetings The directors may regulate board meetings and determine the quorum necessary for the transaction of business as they think  fit.  Unless  otherwise  determined  by  the  directors,  two  directors  form  a  quorum.  Issues  arising  at  meetings  are decided  by  majority  vote  with the  chairman  having  a  second  or casting  vote  where  there  are  more than  two  directors present at the meeting.
  Under  the  2008  Companies  Act,  to  the  extent  that  the  Memorandum  of  Incorporation  does  not  provide  otherwise, decisions  can  be  adopted  by  the  written  consent  of  a  majority  of  directors  given  in  person  or  by  electronic communication, provided that each director has received notice of the matter to be decided. Borrowing Powers AngloGold Ashanti may create and issue secured or unsecured debentures and the directors may borrow or secure the payment  of  such  sums  as  they  think  fit  and  may  secure  the  repayment  of  any  indebtedness  by  bond,  mortgage  or charge provided that no special privileges as to allotment of shares, attending and voting at meetings, appointment of directors or otherwise will be given to the holders of AngloGold Ashanti’s debentures without the sanction of AngloGold Ashanti shareholders in a general meeting.
AngloGold  Ashanti’s  borrowing  powers  are  unlimited.  These  borrowing  powers  may  be  varied  by  AngloGold  Ashanti shareholders by way of a special resolution in a general meeting. Remuneration The directors are entitled to such remuneration as AngloGold Ashanti shareholders may approve by ordinary resolution in a general meeting. If a director performs services that, in the opinion of the board of directors, are outside the scope of the ordinary duties of a director, he may be paid such extra remuneration as the directors determine.   Under  the  2008  Companies  Act,  directors’  remuneration  is  required  to  be  approved,  by  a  special  resolution  of shareholders within two years of the date of such remuneration. Interests of Directors and Restriction on Voting A director who is in any way, whether directly or indirectly, interested in a contract or arrangement or proposed contract or  arrangement  with  AngloGold  Ashanti  or  any  of  AngloGold  Ashanti’s  subsidiaries  must  declare  the  nature  of  his interest to AngloGold Ashanti in accordance with the Companies Act.   A director will not vote nor be counted in the quorum and if he will do so his vote will not be counted on any resolution for  his  own  appointment  to  any  other  office  or  position  under  AngloGold  Ashanti  or  in  respect  of  any  contract  or arrangement in which he is interested, but this prohibition will not apply to:  (i)        
any  arrangement  for  giving  to  any  director  any  security  or  indemnity  in  respect  of  money  lent  by  him  to,  or
            obligations undertaken by him for the benefit of, AngloGold Ashanti,


any  arrangement  for  the  giving  by  AngloGold  Ashanti  of  any  security  to  a  third  party  in  respect  of  a  debt  or obligation of AngloGold Ashanti which the director has himself guaranteed or secured,
 
   
  any contract or arrangement with a company in which he is interested by reason only of being a director, officer, creditor or member of such company (and note that these prohibitions may at any time be suspended or relaxed to  any  extent  either  generally,  or  in  respect  of  any  particular  contract  or  arrangement,  by  AngloGold  Ashanti  in general meeting).
 
 Where  proposals  are  under  consideration  concerning  the  appointment  (including  fixing  or  varying  the  terms  of appointment)  of  two  or  more  directors  to  offices  or  employments  with  AngloGold  Ashanti  or  any  company  in  which AngloGold Ashanti is interested, such proposals may be divided and considered in relation to each director separately and in such cases each of the directors concerned will be entitled to vote (and be counted in the quorum) in respect of each resolution except that concerning his own appointment.
 
 If any question arises at any meeting as to the entitlement of any directors to vote and such question is not resolved by his voluntarily agreeing to abstain from voting, such question must be referred to the chairman of the meeting and his ruling in relation to any other director must be final and conclusive except in a case where the nature or extent of the interests of the director concerned have not been fairly disclosed.
 
 The  directors  may  exercise  the  voting  powers  conferred  by  the  shares  in  any  other  company  held  or  owned  by AngloGold  Ashanti  in  such  manner  and  in  all  respects  as  they  think  fit,  including  the  exercise  thereof  in  favor  of  any resolution appointing themselves or any of them to be directors or officers of such other company or voting or providing for the payment of remuneration to the directors or officers of such other company.
 
 Under the 2008 Companies Act, the restrictions described above will apply to a company’s directors, certain prescribed offices (the precise scope of which remains to be defined) and any person who is a member of a committee of the board of the company or of the audit committee of the company, whether or not that person is also a member of the company’s board.
 
 Share Rights, Preferences and Restrictions
 
 Allotment and Issue of Ordinary Shares
 
 Any unissued ordinary shares can be disposed of or dealt with in such manner as AngloGold Ashanti shareholders may direct in a general meeting. AngloGold Ashanti shareholders may resolve that all or any of such ordinary shares are at the disposal of the directors who may allot, grant options over or otherwise deal with or dispose of the ordinary shares to such  persons  at  such  times  and  on  such  terms  and  conditions  and  for  such  consideration  as  the  directors  may determine.
 
 Any  ordinary  shares  may  be  issued  with  such  rights  or  restrictions  as  AngloGold  Ashanti  shareholders  in  a  general meeting may from time to time determine.
 
 No ordinary shares may be issued at a discount except in accordance with section 81 of the South African Companies Act. Section 81 states that a company can issue shares at  a  discount to the  par value shares  of such shares, if such shares  are  of  a  class  already  in  issue,  if  such  issue  is  authorized  by  a  special  resolution,  if  the  company  has  been trading  for  at  least  one  year,  if  the  issue  is  sanctioned  by  the  court  and  if  the  issue  occurs  within  one  month  of  the sanction. If shares are issued at a discount, every prospectus issued by the company thereafter relating to the issue of any shares, will contain particulars of the discount allowed on the issue of those shares, or so much of the discount as has not been written off at the date of the issue of such prospectus.
 
 Under  the  2008  Companies  Act,  although  directors  may  generally  issue  shares  without  shareholder  approval, shareholder  approval  by  way  of  a  special  resolution  will,  subject  to  certain  exceptions,  be  required  for  the  issue  of shares (including ordinary shares), convertible securities (including share options to directors and other persons that are related  to  the  company  or  to  any  director)  or  if  there  is  an  issue  of  shares  (including  ordinary  shares),  or  convertible securities, including share options, with voting power on an as-converted basis equal to or exceeding 30 percent of the voting  power  of  all  shares  of  that  class  held  by  shareholders  immediately  prior  to  the  transaction  or  series  of transactions.


Under  the  2008  Companies  Act,  directors  may  only  issue  shares  for  adequate  consideration  as  determined  by  the board.  The term “adequate consideration” is not defined under the 2008 Companies Act.  The board’s determination of adequate  consideration  may  not  be  challenged  unless  the  directors  have  breached  their  standards  of  conduct  as specified in the 2008 Companies Act.  In some cases, it may not be possible to indemnify the directors for their conduct and the company may  have a  claim against the directors for breach of  their duties as set  out in the 2008 Companies Act.  When a company has received the consideration for the issuance of shares (including in AngloGold Ashanti’s case, its ordinary shares) as approved by the board, such shares will be fully paid and the company will be obliged to issue the shares and cause the name of the holder to be entered into the company’s securities registers. The 2008 Companies Act also provides that shares can be issued for a consideration of future services, future benefits or future payment.Dividends, Rights and Distributions The  ordinary  shares  participate  fully  in  all  dividends,  other  distributions  and  entitlements  as  and  when  declared  by AngloGold  Ashanti  in  respect  of  fully  paid  ordinary  shares.  Under  South  African  law,  AngloGold  Ashanti  may  declare
  and pay dividends from any reserves included in total shareholders’ equity calculated in accordance with International Financial Reporting Standards, subject to its solvency and liquidity. No larger dividend will be declared by shareholders in general meeting than is recommended by the directors. Dividends are payable to shareholders registered at a record date that is after the date of declaration.
  Dividends may be declared in any currency at the discretion of the board of directors. Currently, dividends are declared in South African rands and paid in Australian dollars, South African rands, Ghanaian cedis or United Kingdom pounds. Dividends paid to registered holders of  AngloGold  Ashanti ADSs are  paid in  US dollars  converted from South African rands by The Bank of New York Mellon, as depositary, in accordance with the Deposit Agreement. See “– The Deposit Agreement”.
  As approved by shareholders in general meeting on December 11, 2006, the company’s authorized share capital was increased  through  the  creation  of  a  maximum  of  4,280,000  E  ordinary  shares,  to  be  issued  for  cash,  pursuant  to  an employee share ownership plan and black economic empowerment transaction. The E ordinary shares will not be listed.  Holders  of  E ordinary  shares  are  entitled  to  receive  a  dividend,  equal  to  one-half  of  the  dividend  per  ordinary  share declared by AngloGold Ashanti from time to time.  In addition 50 percent of the declared dividend by AngloGold Ashanti from time to time is offset against the loan value of the E ordinary shares. The holder of B preference shares is entitled to an annual dividend amounting to the lesser of five percent of the issue price of the B preference shares, or an amount equivalent to the balance of the after-tax profits from income from mining the Moab Lease Area (which is part of the Vaal River operations in South Africa) as determined by the directors in each financial year. This annual dividend is a first charge on any profit available for distribution from the Moab Lease Area. The annual dividend is not payable from any of AngloGold Ashanti’s other profits. The holder of A preference shares is entitled to an annual dividend equivalent to the balance of the after-tax profits from income from mining the Moab Lease Area as determined by AngloGold Ashanti’s directors in each financial year, only once the annual dividend on the B preference shares has been paid in full. Any  dividend  may  be  paid  and  satisfied,  either  wholly  or  in  part,  by  the  distribution  of  specific  assets,  or  in  paid-up securities of AngloGold Ashanti or of any other company, or in cash, or in any one or more of such ways as the directors or AngloGold Ashanti in general meeting may at the time of declaring the dividend determine and direct. All  dividends  remaining  unclaimed  for  a  period  of  not  less  than  three  years  from  the  date  on  which  they  became payable, may be forfeited by resolution of the directors for the benefit of the company.   All of the issued ordinary shares, A redeemable preference shares and B redeemable preference shares are fully paid and are not subject to further calls or assessment by AngloGold Ashanti. Under the 2008 Companies Act, any dividend distributions must be approved by the board and satisfy certain solvency and liquidity tests as provided by the 2008 Companies Act.


Voting Rights Each ordinary share confers the right to vote at all general meetings. Each holder present in person or, in the case of a corporate entity, represented, has one vote on a show of hands. If a poll is held, holders present or any duly appointed proxy will have one vote for each ordinary share held. A holder of ordinary shares is entitled to appoint a proxy to attend, speak and vote at any meeting on his or her behalf and the proxy need not be a shareholder. Holders of ADSs are not entitled to vote in person at meetings, but may vote by way of proxy through The Bank of New York Mellon as the ADS issuer. Holders of CDIs are not entitled to vote in person at meetings, but may vote by way of proxy. There are no limitations on the right of non-South African shareholders to hold or exercise voting rights attaching to any of the ordinary shares.
  Holders of E ordinary shares have the right to vote at all general meetings and are entitled to appoint a proxy to attend, speak and vote at any meeting on his or her behalf and the proxy need not be a shareholder, to the extent that holders of E ordinary shares will not be entitled to veto any resolution that would otherwise have been capable of being passed, or not, by the  required majority of votes of holders of ordinary shares and subject to the Listings Requirements of the JSE,  holders of E ordinary shares will  not be counted for categorization purposes in terms of  section 9  of the Listings Requirements.  These  limitations  on  the  E ordinary  shares are  a function  of  shareholder approval  and  the  JSE  Listing Requirements.
  The A redeemable preference shares have voting rights that are similar to those of ordinary shares. The B redeemable preference shares have limited voting rights, except in the event that a dividend on this class of share has not been paid
  and remains unpaid for six months, or in connection with issues directly affecting these preference shares or AngloGold Ashanti  as  a  whole,  such  as  disposal  of  substantially  all  of  the  company’s  assets,  winding  up  AngloGold  Ashanti  or reducing the company’s share capital.
  The articles of association do not provide for cumulative voting in respect of any of the classes of AngloGold Ashanti’s shares.
  The articles of association specify that if new classes of ordinary or preference shares are issued, the rights relating to any  class  of  shares  may  be  modified  or  abrogated  either  with  the  consent  in  writing  of  the  holders  of  at  least  three-fourths of the issued shares of that class, or with the sanction of a resolution passed as if it were a special resolution of the company at a separate general meeting of the holders of the shares of that class. Transfer of Ordinary SharesDematerialized  shares  which  have  been  traded  on  JSE  are  transferred  on  the  STRATE  (Share  Transactions  Totally Electronic) settlement system and delivered within five business days after each trade. The  dematerialization  of  shares  is  not  mandatory  and  holders  of  ordinary  shares  in  AngloGold  Ashanti  may  elect  to retain their certificated securities. Subject to any statutory restrictions on transfer any shareholder may transfer all or part of his certificated securities, to the extent it is not prevented by section 91A of the Companies Act. Every transfer must be  in  writing  in  the  usual  common  form  or  in  such  other  form  as  the  directors  may  approve  and  must  be  left  at  the transfer  office  where  the  register  of  transfers  is  kept  or  at  such  other  place  as  the  directors  prescribe  and  must  be accompanied by the share certificate and such other evidence as the directors or registrar may require to prove title and capacity of the intending transferor or transferee. The  directors  may  refuse  to  register  any  transfer  of  certificated  securities  unless  the  instrument  of  transfer,  duly stamped, is lodged with AngloGold Ashanti accompanied by the share certificate, the transfer is in respect of only one class of securities or the transfer is permitted within any of AngloGold Ashanti’s incentive schemes. Conversion of Ordinary Shares into StockAngloGold Ashanti may  by  special  resolution convert any paid-up shares  into  stock and may  reconvert any  stock into paid-up shares of any denomination. The holders of stock may transfer their respective interests but the directors may fix the minimum amount of stock transferable. The holders of stock have the same rights, privileges and advantages as regards  participation  in  profits  and  voting  at  general  meetings  of  AngloGold  Ashanti  as  if  they  held  the  shares  from which the stock arose. All of the provisions of the Articles apply equally to stock as to shares.


Increase and Reduction of CapitalAngloGold  Ashanti  shareholders  may  by  way  of  special  resolution  in  a  general  meeting  and  in  accordance  with  the provisions of the Companies Act resolve to:
    consolidate and divide all or any part of its share capital into shares of larger amounts or consolidate and reduce the number of any issued no par value shares;
      sub-divide  its  shares  or  any  of  them  into  shares  of  smaller  amounts  than  fixed  by  the  memorandum  of association;
  vary, modify or amend any rights attached to any shares whether issued or not, including the conversion of any shares into preference shares; and
   In  addition,  AngloGold  Ashanti  shareholders  may  by  ordinary  resolution  in  a  general  meeting  and  subject  to  the requirements of the Companies Act and the rules and requirements of the stock exchange on which the securities are listed,  reduce,  dispose  of,  distribute  or  otherwise  deal  with  in  any  manner  its  share  capital,  share  premium,  stated capital, reserves and capital redemption reserve fund. Under the 2008 Companies Act, the authorization and classification of shares, the numbers of authorized shares of each class,  and  the  preference,  rights,  limitations  and  other  terms  associated  with  each  class  of  shares,  as  set  out  in  a company’s Memorandum of Incorporation, may be changed by amending the company’s Memorandum of Incorporation by special resolution of shareholders or, unless the Memorandum of Incorporation provides otherwise, the directors of the company may increase or decrease the number of authorized shares of any class of shares, reclassify any classified shares  that  have  been  authorized  but  not  issued,  classify  any  unclassified  shares  that  have  been  authorized  but  not issued,  or  determine  the  preferences,  rights,  limitations  or  other  terms  of  shares  which  are  subject  to  the  directors’ determination.Share Premium Account and Capital Redemption Reserve Fund AngloGold Ashanti shareholders may by ordinary resolution in a general meeting authorize the directors to distribute or deal with, in any way recommended by the directors, all or any part of the amount outstanding to the credit of any share premium account or capital redemption reserve fund of AngloGold Ashanti. Under the 2008 Companies Act, all par value instruments will be converted to no par value and the applicable reserves will be amalgamated into the stated capital account. Rights Upon LiquidationIn the event of a winding up of AngloGold Ashanti:  the B redeemable preference shares confer the right, in priority to any payment in respect of the ordinary shares  or the A preference shares in the capital of AngloGold Ashanti, to receive only so much of the net proceeds from  the  disposal  of  the  assets  relating  to  the  Moab  Lease  Area  as  is  available  for  distribution,  but  not exceeding  a  return for each B redeemable preference share of the capital paid up on that share and any share premium paid  on the issue of the B redeemable preference shares outstanding at that time.    but after any payment in respect of the B preference shares, to receive only so much of the net proceeds from the  disposal of the assets relating  to the Moab Lease  Area as is  then available for distribution.   The A redeemable  and B redeemable shares do not confer the right to participation in the surplus funds of AngloGold Ashanti arising  in any other manner.   the ordinary shares and E ordinary shares confer the equal rights to any surplus arising from the liquidation of all  other assets of AngloGold Ashanti.


Redemption Provisions
 
 The A redeemable preference shares may be redeemed for their nominal value, plus a premium per share of an amount equal to the net proceeds available from the disposal of the assets relating to the Moab Lease Area, after redemption in full of the B preference shares and payment of the nominal value of the A preference shares, divided by 2,000,000.
 
 The B redeemable preference shares may be redeemed for their nominal value, plus a premium of up to R249.99 per share, but limited to an amount equal to the net proceeds available from the disposal of the assets relating to the Moab Lease Area after payment of the nominal value of the B preference shares.
 
  
 Description of AngloGold Ashanti ADSs
 
 The Bank of New York Mellon issues AngloGold Ashanti’s American Depositary Shares, or ADSs. One ADS represents the ownership interest of one ordinary share of AngloGold Ashanti.
 
 The Deposit Agreement
 
 This section provides a summary description of AngloGold Ashanti’s ADSs. AngloGold Ashanti has entered into an Amended and Restated Deposit Agreement dated as of June 3, 2008 with The Bank  of  New  York  Mellon  as  depositary  and  the  owners  and  beneficial  owners  of  American  Depositary  Receipts  (the “Deposit Agreement”).
 
 The following is a summary of the material provisions of the Deposit Agreement.  For more complete information, read the entire Deposit Agreement and the form of American Depositary Receipt, which AngloGold Ashanti has filed with the SEC as an exhibit to AngloGold Ashanti’s registration statement on Form F-6/A (File No. 333-133049) on May 27, 2008.  See  “Item  10.H.:  Documents  On  Display”.    Copies  of  the  Deposit  Agreement  are  also  available  for  inspection  at  the Corporate Trust Office of The Bank of New York Mellon currently located at 101 Barclay Street, New York, New York, 10286.
 
 Description of the ADSs
 
 The  Bank  of  New  York  Mellon,  as  depositary,  will  register  and  deliver  ADSs.    Each  ADS  will  represent  one  ordinary share  (or  a  right  to  receive  one  share)  deposited  with  The  Standard  Bank  of  South  Africa  Limited,  Société  Générale South  Africa  Limited,  FirstRand  Bank  Limited,  National  Australia  Bank  Limited  of  Australia  and  New Zealand  Banking Group Limited, each as a custodian for The Bank of New York Mellon, and all of which are referred to collectively as the custodian.  Each ADS will also represent any other securities, cash or other property which may be held by The Bank of New  York  Mellon.    The  Bank of  New  York  Mellon’s  Corporate  Trust  Office  at  which  the ADSs  will  be  administered  is located at 101 Barclay Street, New York, New York 10286.  The Bank of New York Mellon’s principal executive office is located at One Wall Street, New York, New York 10286.
 
 ADSs may be held either (A) directly (i) by having an American Depositary Receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in the holder’s name, or (ii) by having ADSs registered in a holder’s name in the Direct Registration System, or (B) indirectly by holding a security entitlement in ADSs through a broker or other financial institution.  If ADSs are held directly, such holders are ADS holders.  This description applies to ADS  holders.    If  ADSs  are  held  indirectly,  such  holders  must  rely  on  the  procedures  of  their  broker  or  other financial institution to assert the rights of ADS registered holders described in this section.  Such holders should consult with their broker or financial institution to find out what those procedures are.
 
 The  Direct  Registration  System,  or  DRS,  is  a  system  administered  by  DTC  pursuant  to  which  the  depositary  may register  the  ownership  of  uncertificated  ADSs,  which  ownership  will  be  evidenced  by  periodic  statements  sent  by  the depositary to the registered holders of uncertificated ADSs.
 
 AngloGold  Ashanti  will  not  treat  ADS  holders  as  its  shareholders  and  ADS  holders  do  not  have  shareholder  rights.  South African law governs shareholder rights.  The Bank of New York Mellon is the holder of the shares underlying the ADSs.  Registered holders of ADSs have ADS holder rights.  The Deposit Agreement sets out ADS holder rights as well as the rights and obligations of The Bank of New York Mellon.  New York law governs the Deposit Agreement and the ADSs.


Dividends and Other DistributionsThe  Bank  of  New  York  Mellon  has  agreed  to  pay  to  holders  of  ADSs  the cash  dividends  or  other distributions  it  or  a custodian  receives  on  AngloGold  Ashanti  ordinary  shares  or  other  deposited  securities  after  deducting  any  fees  and expenses  and  any  applicable  withholding  taxes.  Holders  of  ADSs  will  receive  these  distributions  in  proportion  to  the number of AngloGold Ashanti’s ordinary shares that their ADSs represent. CashThe  Bank  of  New  York  Mellon  will  convert  any  cash  dividend  or  other  cash  distribution  AngloGold  Ashanti  pays  on AngloGold Ashanti’s ordinary shares into US dollars (unless AngloGold Ashanti pays it in US dollars), if it can do so on a reasonable basis and can transfer the US dollars to the United States. Currently, AngloGold Ashanti pays dividends on ordinary shares in South African rand. AngloGold Ashanti may declare dividends and distributions on ordinary shares in any currency that the board of directors or shareholders at a general meeting approve.  The Bank of New York Mellon will convert the South African rand it receives from AngloGold Ashanti to US dollars and distribute dividends in US dollars to registered holders of ADSs. If that is no longer possible or if any approval from any government is needed and cannot be obtained, The Bank of New York Mellon may distribute non-US currency only to those ADS holders to whom it is possible to make this type of distribution.   The Bank of New York Mellon may hold the non-US currency it cannot convert for the account of holders of ADSs who have  not  been  paid.  It  will  not  invest  the  non-US  currency,  and  it  will  not  be  liable  for  the  interest.  Before  making  a distribution, any withholding taxes that must be paid will be deducted.  See “Payment of Taxes” below. The Bank of New York Mellon will distribute only whole US dollars and cents and will round fractional cents to the  nearest whole cent. If the  exchange  rates fluctuate during  a time  when  The  Bank  of  New  York  Mellon  cannot  convert  the  non-US  currency, holders of ADSs may lose some or all of the value of the distribution.  Ordinary SharesThe  Bank  of  New  York  Mellon  may  distribute  to  holders  of  ADSs  additional  ADSs  representing  ordinary  shares  that AngloGold  Ashanti  distributes  as  a  dividend  or  free  distribution,  if  AngloGold  Ashanti  provides  it  promptly  with satisfactory evidence that it is legal to do so. If The Bank of New York Mellon does not distribute additional ADSs, the outstanding ADSs will also represent the newly distributed AngloGold Ashanti ordinary shares. The Bank of New York Mellon will only distribute whole ADSs.  It will sell AngloGold Ashanti ordinary shares that would require it to deliver a fraction of an ADS and distribute the net proceeds in the same way as it distributes cash. The Bank of New York Mellon may sell a portion of the distributed shares sufficient to pay its fees and expenses in connection with that distribution. Rights to Subscribe for Additional Ordinary SharesIf  AngloGold  Ashanti  offers  holders  of  its  ordinary  shares  any  rights  to  subscribe  for  additional  AngloGold  Ashanti ordinary shares or any other rights, The Bank of New York Mellon, after consultation with AngloGold Ashanti, may make these rights available to holders of ADSs or sell the rights and distribute the proceeds in the same way as it distributes cash. If The Bank of New York Mellon cannot do either of these things for any reason, it may allow these rights to lapse. In that case, holders of ADSs will receive no value for them.  If The Bank of New York Mellon makes these types of subscription rights available to holders of ADSs, upon instruction from holders of ADSs, it will exercise the rights and purchase AngloGold Ashanti’s ordinary shares on their behalf. The Bank of New York Mellon  will then deposit the  AngloGold  Ashanti ordinary shares and deliver ADSs to the holders  of ADSs.  It  will  only  exercise  these  rights  if  holders  of  ADSs  pay  it  the  exercise  price  and  any  other  charges  the  rights require them to pay.
US securities laws may restrict the sale, deposit, cancellation and transfer of the ADSs issued after exercise of rights. For example, holders of ADSs may not be able to trade the ADSs freely in the United States. In this case, The Bank of New York Mellon may deliver ADSs which are "restricted securities" within the meaning of Rule 144 which will have the same provisions as the ADSs described here, except for the changes needed to put the restrictions in place.


Other Distributions
 
 The  Bank  of  New  York  Mellon  will  send  to  holders  of  ADSs  any  other  distributions  that AngloGold  Ashanti  makes  on deposited securities by any means it thinks is legal, fair and practical. If it cannot make the distribution in that way, The Bank of New York Mellon may decide to sell what AngloGold Ashanti distributes, and then distribute the net proceeds in the  same  way  as  it  distributes  cash,  or  it  may  decide  to  hold  what  AngloGold  Ashanti  distributes,  in  which  case  the outstanding  ADSs  will  also  represent  the  newly  distributed  property.  However,  The  Bank  of  New  York  Mellon  is  not required  to  distribute  any  securities  (other  than  ADSs)  to  ADS  holders  unless  it  receives  satisfactory  evidence  from AngloGold  Ashanti  that  it  is  legal  to  make  that  distribution.    The  Bank  of  New  York  Mellon  may  sell  a  portion  of  the distributed securities or property sufficient to pay its fees and expenses in connection with that distribution.
 
 The  Bank  of  New  York  Mellon  is  not  responsible  if  it  decides  that  it  is  unlawful  or  impractical  to  make  a  distribution available  to  any  ADS  holders.  AngloGold  Ashanti  has  no  obligation  to  register  ADSs,  AngloGold  Ashanti  ordinary shares, rights or other securities under the US Securities Act of 1933. AngloGold Ashanti also has no obligation to take any other action to permit the distribution of ADSs, AngloGold Ashanti ordinary shares, rights or anything else to ADS holders. This means that the holders of ADSs may not receive the distribution AngloGold Ashanti makes on its ordinary shares or any value for them if it is illegal or impractical for AngloGold Ashanti to make them available to the holders of ADSs.
 
 Deposit, Withdrawal and Cancellation
 
 The  Bank  of  New  York  Mellon  will  deliver  ADSs  if  a  holder  of  AngloGold  Ashanti’s  ordinary  shares  or  their  broker deposits AngloGold Ashanti’s ordinary shares or evidence of rights to receive ordinary shares with the custodian. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, The Bank of New York Mellon will register the appropriate number of ADSs in the names such holder of AngloGold Ashanti ordinary shares requests and will deliver the ADSs at its Corporate Trust office to the persons such holders request.
 
 Holders of ADSs may turn in their ADSs at The Bank of New York Mellon’s Corporate Trust Office. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, The Bank of New York Mellon will deliver (1) the underlying ordinary shares to an account designated by the relevant holder of ADSs and (2) any  other  deposited  securities  underlying  the  ADSs  at  the  office  of  the  Custodian.  Or,  at  the  request,  risk  and expense of ADS holders, The Bank of New York Mellon will deliver the deposited securities at its Corporate Trust Office.
 
 Interchange Between Certificated ADSs and Uncertificated ADSs
 
 ADS registered holders may surrender their ADR to The Bank of New York Mellon for the purpose of exchanging such ADR for uncertificated ADSs.  The Bank of New York Mellon will cancel that ADR and will send to the ADS registered holder  a  statement  confirming  that  the  ADS  registered  holder  is  the  registered  holder  of  uncertificated  ADSs.  Alternatively,  upon  receipt  by  The  Bank  of  New  York  Mellon  of  a  proper  instruction  from  a  registered  holder  of uncertificated  ADSs  requesting  the  exchange  of  uncertificated  ADSs  for  certificated  ADSs,  The  Bank  of  New  York Mellon will execute and deliver to the ADS registered holder an ADR evidencing those ADSs.
 
 Voting Rights
 
 ADS registered holders may instruct The Bank of New York Mellon to vote the number of deposited shares their ADSs represent.  The  Bank  of  New York  Mellon  will  notify  ADS  registered holders  of shareholders’  meetings and  arrange  to deliver AngloGold Ashanti’s voting materials to them if AngloGold Ashanti asks it to.  Those materials will describe the matters to be voted on and explain how ADS registered holders may instruct The Bank of New York Mellon how to vote.  For  instructions  to  be  valid,  they  must  reach  The  Bank  of  New  York  Mellon  by  a  date  set  by  The  Bank  of  New  York Mellon.
 
 Otherwise,  ADS  registered  holders  will  not  be  able  to  exercise  their  right  to  vote  unless  they  withdraw  the  shares.  However, ADS registered holders may not know about the meeting enough in advance to withdraw the shares.
 
 The Bank of New York Mellon will try, as far as practical, to vote or to have its agents vote the ordinary shares or other deposited  securities  as holders  of  ADSs  instruct,  but  this  is  subject  to  South  African  law,  the  provisions  of  AngloGold Ashanti’s Memorandum and Articles of Association and of the deposited securities and any applicable rule of the JSE.  The Bank of New York Mellon will only vote or attempt to vote as such holders of ADSs instruct.
 
 AngloGold Ashanti cannot assure the holders of ADSs that they will receive the voting materials in time for them to instruct The Bank of New York Mellon to vote their ordinary shares.  In addition, The Bank of New York Mellon and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions.  This means that holders of ADSs may not be able to exercise their right to vote and there may be nothing they can do if their ordinary shares are not voted as they requested.


Fees and expenses
  ADS holders must pay:
 For
  Each  issuance  of  an  ADS,  including  as  a  result  of  a distribution of AngloGold Ashanti ordinary shares or rights or other property
 Each  cancellation  of  an  ADS,  including  if  the  Deposit Agreement terminates
     shares on the AngloGold Ashanti share register to or from the  name  of  The  Bank  of  New  York  Mellon  or  its  agent when AngloGold Ashanti ordinary shares are deposited or withdrawn
    Conversion of non-US currency to US dollars Cable, telex and facsimile transmission expenses Servicing the deposited securities
 Taxes and other governmental charges The Bank of New York  Mellon  or  any  custodian  has  to  pay  on  any  ADS  or AngloGold Ashanti ordinary share underlying an ADS, for example,  stock  transfer  taxes,  stamp  duty  or  withholding taxes
  A fee equivalent to the fee that would have been payable if  the  securities  distributed  had  been  ordinary  shares deposited for issuance of ADSs
 Distribution of securities distributed to holders of deposited securities  that  are  distributed  by  The  Bank  of  New  York Mellon to ADS holders
 
 Payment of Taxes Holders  of  ADSs  will  be  responsible  for  any  taxes  or  other  governmental  charges  payable  on  their  ADSs  or  on  the deposited securities underlying their ADSs.  The Bank of New  York Mellon may refuse to transfer their ADSs or allow them to withdraw the deposited securities underlying their ADSs until such taxes or other charges are paid.  It may apply payments owed to holders of ADSs or sell deposited securities underlying their ADSs to pay any taxes they owe, and they will remain liable for any deficiency.  If it sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay to holders of ADSs any proceeds, or send to them any property, remaining after it has paid the taxes.Reclassifications
 If AngloGold Ashanti
 Then
 Changes the nominal or par value of the ordinary shares; Reclassifies,  splits  up  or  consolidates  any  of  the deposited securities; Distributes  securities  on  the  ordinary  shares  that  are  not distributed to holders of ADSs; or Recapitalizes, reorganizes, merges, liquidates, sells all or substantially  all  of  AngloGold  Ashanti’s  assets,  or  takes any similar action.
 The cash, ordinary shares  or other securities  received by The  Bank  of  New  York  Mellon  will  become  deposited securities.    Each  ADS  will  automatically  represent  its equal share of the new deposited securities. The Ban Ashanti  asks  it  to,  distribute  some  or  all  of  the  cash, AngloGold  Ashanti  ordinary  shares  or  other  securities  it receives.    It  may  also  issue  new  ADSs  or  ask  holders  of ADSs to surrender their outstanding ADSs in exchange for new ADSs identifying the new deposited securities.


Amendment and TerminationAngloGold  Ashanti  may  agree  with  The  Bank  of  New  York  Mellon  to  amend  the  Deposit  Agreement  and  the  ADSs without the consent of holders for any reason.  If the amendment adds or increases fees or charges (except for taxes and other governmental charges or registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses) or if the amendment prejudices an important right of ADS holders, it will only become effective 30 days after The Bank of New York Mellon notifies holders of ADSs of the amendment.  At the time an amendment becomes effective,  holders  of  ADSs  are  considered,  by  continuing  to  hold  their  ADSs,  to  agree  to  the  amendment  and  to  be bound by the ADSs and the agreement as amended.
  The Bank of New York Mellon may terminate the Deposit Agreement by mailing notice of termination to ADS holders at least 30 days prior to the date fixed in the notice if AngloGold Ashanti asks it to do so.  The Bank of New York Mellon may also terminate the Deposit Agreement if The Bank of New York Mellon has told AngloGold Ashanti that it would like to resign and AngloGold Ashanti has not appointed a new depositary bank within 90 days.  In both cases, The Bank of New York Mellon must notify holders of AngloGold Ashanti ADSs at least 30 days before termination.  After  termination,  The  Bank  of  New  York  Mellon  and  its  agents  will  be  required  to  do  only  the  following  under  the Deposit  Agreement: collect  distributions  on  the  deposited  securities,  sell  rights,  and,  upon  surrender  of  ADSs,  deliver AngloGold Ashanti ordinary shares and other deposited securities.  Four months after the  date of  termination or later, The  Bank  of  New  York  Mellon  may  sell  any  remaining  deposited  securities  by  public  or  private  sale  and  will  hold  the proceeds of the sale, as well as any other cash it is holding under the Deposit Agreement, for the pro rata benefit of the ADS  holders who have not surrendered  their ADSs.   It will  not invest the money  and  will have no liability for interest.  The Bank of New York Mellon’s only obligations will be to account for the proceeds of the sale and other cash.  After termination,  AngloGold  Ashanti’s  only  obligations  will  be  with  respect  to  indemnification  of,  and  payment  of  certain amounts to, The Bank of New York Mellon.Limitations on Obligations and Liability to ADS Holders The Deposit Agreement expressly limits AngloGold Ashanti’s obligations and the obligations of The Bank of New York Mellon, and limits AngloGold Ashanti’s liability and the liability of The Bank of New York Mellon.  AngloGold Ashanti and The Bank of New York Mellon:
  are only obligated  to take  the actions specifically  set forth in the  Deposit Agreement without negligence or bad faith;
  are not liable if either of AngloGold Ashanti or The Bank of New  York Mellon is prevented or delayed by law or circumstances beyond their control from performing their obligations under the Deposit Agreement;
  are not liable if either of AngloGold Ashanti or The Bank of New York Mellon exercises discretion permitted under the Deposit Agreement;
  are not liable for the inability of any holder of ADSs to benefit from any distribution on deposited securities that is not  made  available  to  holders  of  ADSs  under  the  terms  of  the  Deposit  Agreement,  or  for  any  special, consequential or punitive damages for any breach of the terms of the Deposit Agreement;
  have  no  obligation  to  become  involved  in  a  lawsuit  or  other  proceeding  related  to  the  ADSs  or  the  Deposit Agreement on behalf of the holders of ADSs or on behalf of any other party;
  may  rely  on  advice  of  or  information  from  legal  counsel,  accountants,  and  any  persons  presenting  AngloGold Ashanti’s ordinary shares for deposit, any registered holder or any other person believed by AngloGold Ashanti in good faith to be competent to give such advice or information; and
  pursuant  to  the  Deposit  Agreement,  AngloGold  Ashanti  and  The  Bank  of  New  York  Mellon  agree  to  indemnify each other under certain circumstances.
 Requirements for Depositary ActionBefore The  Bank of New York Mellon will issue, transfer  or register the transfer of an ADS, make a  distribution on an ADS, or allow withdrawal of AngloGold Ashanti ordinary shares, The Bank of New York Mellon may require:  payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged  by third parties for the transfer of any ordinary shares or other deposited securities;  production  of  satisfactory  proof  of  the  identity  and  genuineness  of  any  signature  or  other  information  it  deems  necessary; and  compliance with regulations it may establish, from time to time, consistent with the Deposit Agreement, including  presentation of transfer documents.


The Bank of New York Mellon may refuse to deliver, transfer or register transfers of ADSs generally when the books of The Bank of  New York Mellon or AngloGold Ashanti’s books are closed, or at any time if either AngloGold Ashanti or The Bank of New York Mellon thinks it advisable to do so.
 
  
  when temporary delays arise because: (1) either AngloGold Ashanti or The Bank of New York Mellon have closed AngloGold Ashanti’s transfer books; (2) the transfer of the ordinary shares is blocked in connection with voting at a general meeting of shareholders; or (3) AngloGold Ashanti is paying a dividend on the ordinary shares;
    when  it  is  necessary  to  prohibit  withdrawals  in  order  to  comply  with  any  laws  or  governmental  regulations  that apply to ADSs or to the withdrawal of the ordinary shares or other deposited securities.
 
  
 Pre-release of ADSs
 
 In certain circumstances, subject to the provisions of the Deposit Agreement, The Bank of New York Mellon may deliver ADSs before deposit of the underlying ordinary shares.  This is called a pre-release of the ADS.   The  Bank  of  New  York  Mellon  may  also  deliver  AngloGold  Ashanti  ordinary  shares  upon  cancellation  of  pre-released ADSs (even if the ADSs are cancelled before the pre-release transaction has been closed out). A pre-release is closed out as soon as the underlying AngloGold Ashanti ordinary shares are delivered to The Bank of New York Mellon. The Bank of New York Mellon may receive ADSs instead of ordinary shares to close out a pre-release.
 
  
  before or at the time of the pre-release, the person to whom the pre-release is being made must represent to The Bank of New York Mellon in writing that it or its customer: (a) owns the ordinary shares or ADSs to be remitted, (b) assigns all beneficial rights,  title and  interest in such ADSs or  ordinary  shares, as the case may be, to The Bank of New York Mellon in its capacity as the depositary and for the benefit of the ADS holders, and (c) will not take  any  action  with  respect  to  such  ADSs  or  ordinary  shares,  as  the  case  may  be,  that  is  consistent  with  the transfer  of  beneficial  ownership  (including,  without  the  consent  of  The  Bank  of  New  York  Mellon,  disposing  of such ADSs or ordinary shares, as the case may be) other than satisfaction of such pre-release;
  the pre-release must be fully collateralized with cash, US government securities, or other collateral that The Bank of New York Mellon considers appropriate; and
  the  Bank  of  New  York  Mellon  must  be  able  to  close  out  the  pre-release  on  not  more  than  five  business  days’ notice. Each  pre-release  will  be subject to  any  further indemnities and credit  regulations that The  Bank of New York  Mellon  deems  appropriate.  The  Bank  of  New  York  Mellon  will  normally  limit  the  number  of  AngloGold Ashanti ordinary shares not deposited but represented by ADSs outstanding at any time as a result of pre-release so that they do not exceed 30 percent of the ordinary shares deposited, although The Bank of New York Mellon may disregard this limit from time to time, if it thinks it is appropriate to do so.
 
 Direct Registration System
 
 In  the  Deposit  Agreement,  all  parties  to  the  Deposit  Agreement  acknowledge  that  the  DRS  and  Profile  Modification System, or Profile, will apply to uncertificated ADSs upon acceptance thereof to DRS by The Depository Trust Company, also referred to as DTC.   DRS is  the system administered by DTC pursuant  to which the  depositary may register the ownership of uncertificated ADSs, which ownership will be evidenced by periodic statements sent by the depositary to the  registered  holders  of  uncertificated  ADSs.    Profile  is  a  required  feature  of  DRS  which  allows  a  DTC  participant, claiming to act on behalf of a registered holder of ADSs, to direct the depositary to register a transfer of those ADSs to DTC  or  its  nominee  and  to  deliver  those  ADSs  to  the  DTC  account  of  that  DTC  participant  without  receipt  by  the depositary of prior authorization from the ADS registered holder to register that transfer.
 
 In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties to the Deposit Agreement understand that The Bank of New York Mellon will not verify, determine or otherwise ascertain that the DTC participant which is claiming to be acting on behalf of an ADS holder in requesting registration of transfer and delivery described in the paragraph above has the actual authority to act on behalf of the ADS holder (notwithstanding any requirements under the Uniform Commercial Code).  In the Deposit Agreement, the parties agree that The Bank of New York Mellon’s reliance on and compliance with instructions received by The Bank of New York Mellon through the


DRS/Profile System and in accordance with the Deposit Agreement will not constitute negligence or bad faith on the part of The Bank of New York Mellon.Shareholder Communications; Inspection of Register of Holders of ADSs The  Bank  of  New  York  Mellon  will  make  available  for  inspection  at  its  office  all  communications  that  it  receives  from AngloGold Ashanti as a holder of deposited securities that AngloGold Ashanti makes generally available to holders  of deposited securities.  The Bank of New York Mellon sends copies of those communications if requested by AngloGold Ashanti.  ADS holders have a right to inspect the register of holders of ADSs, but not for the purpose of contacting those holders about a matter unrelated to AngloGold Ashanti’s business or the ADSs. Shareholders’ meetingsThe  directors  may  convene  general  meetings  of  AngloGold  Ashanti  shareholders.  Subject  to  the  provisions  of  the Companies Act the shareholders may requisition for the convening of a general meeting. An  AngloGold  Ashanti  annual  general  meeting  and  a  meeting  of  AngloGold  Ashanti  shareholders  for  the  purpose  of passing a special resolution may be called by giving 21 clear days’ notice in writing of that shareholders’ meeting. For any  other  meeting  of  AngloGold  Ashanti  shareholders,  14  clear  days’  notice  must  be  given.  “Clear  days”  means calendar days excluding the day on which the notice is given and the date of the meeting. All shareholders are entitled to attend.
  AngloGold Ashanti’s articles of association provide that a quorum for a general meeting (other than a meeting at which a special  resolution  will  be  passed)  consists  of  three  shareholders  present  personally,  or  if  the  shareholders  are  a corporate entity,  represented and  entitled  to vote.  If  a  general  meeting  is  not quorate,  the  meeting  is  dissolved  and  a new meeting will have to be called following the relevant notice provision. The  quorum  of  a  shareholders’  meeting  convened for  the  purpose  of  passing  a  special  resolution  consists  of  present shareholders  personally  or  by  proxy,  holding  at  least  25 percent  of  the  total  shareholder  votes.  If  the  meeting  is  not quorate, it will be adjourned to a date between seven and 21 days after the adjourned meeting, and the shareholders present  at  the  second  meeting  will  constitute  a  quorum  as  long  as  there  are  at  least  three  of  them  at  the  second meeting.  A  special  resolution  must  be  passed  by  a  vote  of  75 percent  of  the  shareholders  present  at  the  meeting, personally or by proxy, and entitled to vote or by a vote of 75 percent of the total votes to which these shareholders are entitled.
  If the meeting is not quorate and is convened upon the requisition of shareholders, the meeting is dissolved. Under  the  2008  Companies  Act,  shareholders  must  be  given  at  least  15 business  days  notice  for  all  shareholder meetings, whether the  meeting is  held to consider ordinary  or special resolutions.  In addition,  a company must make available  to  its  shareholders  reasonable  access  to  electronic  participation  for  all  shareholder  meetings.    The  2008 Companies  Act  also  provides  that  resolutions  may  be  submitted  to  shareholders  for  consideration  and  voted  on  in writing  by  such  shareholders  within  20 business  days  prior  notice,  thereby  alleviating  the  need  to  hold  a  formal shareholders’ meeting.  This is permitted for all meetings other than annual general meetings. Disclosure of Interest in SharesUnder  South  African  law,  a  registered  holder  of  AngloGold  Ashanti  shares  who  is  not  the  beneficial  owner  of  such shares  is  required  to  disclose  every  three  months  to  AngloGold  Ashanti  the  identity  of  the  beneficial  owner  and  the number and class of securities held on behalf of the beneficial owner. Moreover, AngloGold Ashanti may, by notice in writing, require a person who is a registered shareholder, or whom AngloGold Ashanti knows or has reasonable cause to believe has a beneficial interest in AngloGold Ashanti ordinary shares, to confirm or deny whether or not such person holds  the  ordinary  shares  or  beneficial  interest  and,  if  the  ordinary  shares  are  held  for  another  person,  to  disclose  to AngloGold Ashanti the identity of the person on whose behalf the ordinary shares are held. AngloGold Ashanti may also require  the person to  give particulars of the extent of  the beneficial interest  held during the three years preceding the date of the notice.
  AngloGold Ashanti is obligated to establish and maintain a register of the disclosures described above and to publish in its annual financial statements a list of the persons who hold beneficial interest equal to or in excess of 5 percent of the total number of ordinary shares issued by AngloGold Ashanti together with the extent of those beneficial interests.


Rights of Minority ShareholdersMajority  shareholders  of  South  African  companies  have  no  fiduciary  obligations  under  South  African  common  law  to minority shareholders. However, under the Companies Act, a shareholder may, under certain circumstances, seek relief from  the  court  if  he  has  been  unfairly  prejudiced  by  the  company.  There  may  also  be  common  law  personal  actions available to a shareholder of a company.
  Pursuant  to  the  2008  Companies  Act,  a  shareholder  may  petition  a  South  African  court  for  relief  from  the  actions  or omissions or, business conduct of the company or the actions of the company’s directors or officers that is oppressive or unfairly prejudicial to, or unfairly disregards the interest of the shareholder. Golden ShareUnder  the  Stability  Agreement,  the  Government  of  Ghana  (Government)  has  confirmed  and  agreed  that  the Government’s  rights  with  respect  to  the  Golden  Share  apply  only  in  respect  of  AngloGold  Ashanti’s  assets  and operations in Ghana. The rights do not extend to any other assets or operations of AngloGold Ashanti outside Ghana, nor to any assets or operations of AngloGold Ashanti.   The Government has also agreed to waive any right it may have under Section 60(I) of the Minerals and Mining Law, 1986,  as amended to acquire a special share in AngloGold Ashanti  or any of  its direct or  indirect  subsidiaries or  joint ventures. The Golden Share may only be held by or transferred to a Minister of the Government or any person acting on behalf of such Government and authorized in writing by such Minister.   The following matters require, and will not be effective without, the written consent of the holder of the Golden Share: (i) any amendment to or removal of the relevant provisions of the AngloGold Ashanti (Ghana) Limited Regulations  setting out the rights and restrictions attaching to the Golden Share;       the  disposal  of  any  mining  lease  held  by  AngloGold  Ashanti  (Ghana)  Limited  or  any  subsidiary  of  AngloGold  Ashanti (Ghana) Limited;  any disposal by AngloGold Ashanti (Ghana) Limited (other than any disposal in the ordinary course of business of  AngloGold Ashanti) which, alone or when aggregated with any disposal or disposals forming part of, or connected  with, the same or a connected transaction, constitutes a disposal of the whole or a material part of the assets of  the AngloGold Ashanti group taken as a whole. For this purpose, a part of the AngloGold Ashanti group’s assets  will  be  considered  material  if  either  (a)  its  book  value  (calculated  by  reference  to  the  then  latest  audited  consolidated accounts), or the total consideration to be received on its disposal, is not less than 25 percent of the  book value of the net assets of the AngloGold Ashanti group or (b) the average profits attributable to it represent  at least 25 percent of the average profits of the AngloGold Ashanti group for the last three years for which audited  accounts are available (before deducting all charges, except taxation and extraordinary items). Upon a return of assets in a winding-up or liquidation of AngloGold Ashanti (Ghana) Limited, the holder of the Golden Share is entitled to the sum of 1,000 cedis (approximately 13 US cents) in priority to any payment to other members, but the Golden Share confers no further right to participate in the profits or assets of AngloGold Ashanti. The Golden Share carries  no  right  to  any  dividend  or  any  right  to  participate  in  any  offer  of  securities  to  existing  shareholders  or  in  any capitalization issue.
  The holder of  the Golden Share  may require AngloGold Ashanti  (Ghana)  Limited to redeem the Golden  Share  at any time in consideration of the payment to such holder of 1,000 cedis (approximately 13 US cents).


10C.  MATERIAL CONTRACTS The  following  are  material  contracts,  not  entered  into  in  the  ordinary  course  of  business,  entered  into  by  AngloGold Ashanti during the past two years.
  On  January  28,  2009,  AngloGold  Ashanti  entered  into  a  Sale  and  Purchase  Agreement  with  Newmont  Mining Corporation  under  which  AngloGold  Ashanti  agreed  to  sell  its  33.33 percent  interest  in  the  Boddington  joint venture (the “Boddington Sale”) to Newmont Mining Corporation (“Newmont”).  The transaction was completed on June 26, 2009.  In terms of the agreement, AngloGold Ashanti received payment of $750 million in cash during June 2009 and a further $240 million in December 2009.  In addition, AngloGold Ashanti is entitled to receive a royalty  on  any  gold  recovered  or  produced  by  the  Boddington  Gold  Mine,  where  the  gold  price  is  in  excess  of Boddington Gold Mine’s cash costs plus $600 per ounce.  The royalty commences on July 1, 2010 and is capped at  a  total  amount  of  $100 million,    All  refunds  and  reimbursements  between  the  company  and  Newmont  have been settled.
  10D.  EXCHANGE CONTROLS
  Exchange controls and other limitations affecting security holders The following is a general outline of South African exchange controls and such outline may not apply to former residents of South Africa. Investors should consult a professional advisor as to the exchange control implications of their particular investments.
  South  African  law  provides  for  exchange  control  regulations,  which  restrict  the  export  of  capital  from  the  Common Monetary Area, which comprises South Africa, the Kingdoms  of Lesotho and Swaziland and the Republic of Namibia. The  exchange  control  regulations,  which  are  administered  by  the  Exchange  Control  Department  of  the  South  African Reserve Bank (SARB), are applied throughout the Common Monetary Area and regulate transactions  involving South African residents, including natural persons and legal entities. Government officials have from time to time stated their intentions to lift South Africa’s exchange control regulations when economic conditions permit such action. In his budget speech  in  March  1998,  the  Minister  of  Finance  announced  that  restrictions  relating  to  offshore  investments  by  South African companies and individuals subject to South African exchange control would, to a limited extent, be lifted.   Since  then,  the  government  has  incrementally  relaxed  aspects  of  exchange  control  for  financial  institutions  and individuals.  However, it is impossible to predict with any certainty when the government will remove exchange controls in their entirety.
  The comments below relate to exchange controls in force at the date of this annual report. Investments in South African companiesA foreign investor may invest freely in ordinary shares in a South African company. Any foreign investor may also sell shares  in  a  South  African  company  and  transfer  the  proceeds  out  of  South  Africa  without  restriction.  Acquisitions  of shares or assets of South African companies by non-South African purchasers are not generally subject to review by the SARB  when  the  consideration  is  in  cash,  but  may  require  SARB  review  in  certain  circumstances,  including  when  the consideration  is  equity  in  a  non-South  African  company  or  when  the  acquisition  is  financed  by  a  loan  from  a  South African lender.DividendsDividends  declared  to  foreign  stockholders  are  not  subject  to  the  approval  by  the  (SARB).  Dividends  are  freely transferable  to  foreign  stockholders from  both  trading  and  non-trading  profits  earned  in South  Africa  by  publicly  listed companies.InterestInterest on foreign loans is freely remittable abroad, provided the loans received prior SARB approval.


Voting rightsThere are no limitations imposed by South African law or by the memorandum and articles of association of AngloGold Ashanti on the rights of non-South African shareholders to vote the ordinary shares. Overseas financing and investments




AngloGold Ashanti and its South African subsidiaries require SARB approval to raise debt from and repay debt to non-residents of the Common Monetary Area, mainly in respect of the interest rate and terms of repayment applicable to the loan.
  Debt raised outside the Common Monetary Area by AngloGold Ashanti’s non-South African subsidiaries is not restricted under South African exchange control regulations and can be used for overseas investment, subject to any conditions imposed  by  the  SARB  in  connection  with  establishing  such  a  subsidiary.  AngloGold  Ashanti  and  its  South  African subsidiaries  would,  however,  require  SARB  approval  in  order  to  provide  guarantees  for  the  obligations  of  any  of  its subsidiaries with regard to funds obtained from non-residents of the Common Monetary Area. Debt raised outside the Common Monetary Area by AngloGold Ashanti’s non-South African subsidiaries must be repaid or serviced by AngloGold Ashanti’s foreign subsidiaries. A  listing  by  a  South  African  company  on  any  stock  exchange  other  than  the  JSE    in  connection  with  raising  capital requires permission from the SARB.
  Under  current  exchange  control  regulations,  offshore  investments  by  AngloGold  Ashanti  and  its  South  African subsidiaries require the approval of the SARB. Subject to approval, there is no limit on the amount of capital that may be invested offshore.10E.  TAXATION
  SOUTH AFRICAN TAXATIONThe  following  discussion  summarizes  South  African  tax  consequences  of  the  ownership  and  disposition  of  shares  or ADSs by a US holder (as defined below). This summary is based upon current South African tax law and South African Inland Revenue practice, the convention between the Government of the United States of America and the Republic of South Africa for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and  capital  gains,  signed  February 17,  1997  (the  "Treaty"),  and  in  part  upon  representations  of  the  depositary,  and assumes  that  each  obligation  provided  for  in,  or  otherwise  contemplated  by,  a  Deposit  Agreement  and  any  related agreement will be performed in accordance with its respective terms. The following summary of South African tax considerations does not address the tax consequences to a US holder that is resident in South Africa for South African tax purposes, whose holding of shares or ADSs is effectively connected with a permanent establishment in South Africa through which such US holder carries on business activities or, in the case of an  individual who performs independent  personal services, with a fixed base situated therein, or  who is otherwise not entitled to full benefits under the Treaty.
  The statements of law set forth below are subject to any changes (which may be applied retroactively) in South African law or in the interpretation thereof by the South African tax authorities, or in the Treaty, occurring after the date hereof. It should be expressly noted that South African tax law does not specifically address the treatment of ADSs. However, it is reasonable  to  assume  (although  no  assurance  can  be  made)  that  the  tax  treatment  of  US  holders  of  shares  is  also applicable to US holders of ADSs.
  Holders are strongly urged to consult their own tax advisors as to the consequences under South African, US federal, state and local, and other applicable laws, of the ownership and disposition of shares or ADSs.


Taxation of dividends
 
 South Africa imposes a corporate tax known as Secondary Tax on Companies (STC) on the distribution of earnings in the form of dividends. Under the terms of an option granted to gold mining corporations, AngloGold Ashanti has elected not  to  be  subject  to  STC.  As  a  result,  although  AngloGold  Ashanti’s  dividend  payments  are  not  subject  to  STC, AngloGold Ashanti pays corporate income tax at a slightly higher rate than would otherwise have been the case. This election  resulted  in  the  overall  tax  paid  by  AngloGold  Ashanti  being  lower  than  the  tax  payable  using  the  standard corporate  tax  rate  together  with  STC.  STC  will  be  phased  out  over  the  next  two  years  and  replaced  by  a  dividend withholding tax.
 
 South Africa does not currently impose any withholding tax or any other form of tax on dividends paid to US holders with respect to shares, but there  has  been a  recent announcement (as set out below) that this is about to change.  In the case of a South African withholding tax on dividends paid to a US holder with respect to shares, the Treaty would limit the rate of this tax to 5 percent of the gross amount of the dividends if a US holder holds directly at least 10 percent of the voting stock of AngloGold Ashanti and 15 percent of the gross amount of the dividends in all other cases. The above provisions will not apply if the beneficial owner of the dividends is a US resident who carries on business in South Africa through a permanent establishment situated in South Africa, or performs in South Africa independent personal services from a fixed base situated in South Africa, and the dividends are attributable to such permanent establishment or fixed base.
 
 On February 21, 2007, the South African Government announced a proposal to replace Secondary Tax on Companies with  a  10 percent  withholding  tax  on  dividends  and  other  distributions  payable  to  shareholders.   This  proposal  is expected to be implemented in 2010.  Although this may reduce the tax payable by the South African operations of the group  thereby  increasing  distributable  earnings,  the  withholding  tax  will  generally  reduce  the  amount  of  dividends  or other distributions received by AngloGold Ashanti shareholders.
 
 In  the  second  phase,  (expected  to  take  place  in  2010),  the  marginal  tax  rate  for  AngloGold  Ashanti’s  South  African mining operations should reduce from 43 percent to 34 percent and the marginal tax rate for non-mining income should reduce  from  37 percent  to  28 percent.  The  amending  legislation  relating  to  the  second  phase  proposals  is  due  to  be published in 2010.  As stated above, the effect of this change will not materially affect the after tax dividend received by non-resident  shareholders  and  South  African  resident  individuals  because  STC  is  being  replaced  by  a  10 percent withholding tax on dividends declared for these shareholders.
 
 Taxation of gains on sale or other disposition
 
 South  Africa  imposes  a  tax  on  capital  gains,  which  only  applies  to  South  African  residents.  The  meaning  of  the  word "residents" is different for individuals and corporations and is governed by the South African Income Tax Act of 1962 and by  the  Treaty.  In  contrast,  gains  on  the  disposal  of  securities  which  are  not  capital  in  nature  are  usually  subject  to income tax. However, even in the latter case, a US holder will not be subject to income tax unless the US holder carries on business in South Africa through a permanent establishment situated therein.
 
 United States taxationThe  following  is  a  general  summary  of  the  material  US  federal  income  tax  consequences  of  the  ownership  and disposition of shares or ADSs to a US holder (as defined below) that holds its shares or ADSs as a capital asset. This summary  is  based  on  US tax  laws  including  the  Internal  Revenue  Code  of 1986,  as  amended  (the  Code),  Treasury regulations  promulgated  thereunder,  rulings,  judicial  decisions,  administrative  pronouncements,  and  the  Treaty,  all  as currently in effect as of the date of this annual report, and all of which are subject to change or changes in interpretation, possibly with retroactive effect. In addition, this summary is based in part upon the representations of the depositary and the assumption that each obligation in the Deposit Agreement relating to the ADSs and any related agreement will be performed in accordance with its terms.
  This summary does not address all aspects of US federal income taxation that may apply to holders that are subject to special  tax  rules,  including  US expatriates,  insurance  companies,  tax-exempt  entities,  banks,  certain  financial institutions, persons subject to the alternative minimum tax, regulated investment companies, securities broker-dealers, traders in securities who elect to apply a mark-to-market method of accounting, investors that own (directly, indirectly or by  attribution) 10 percent or more of the outstanding share  capital or  voting stock of  AngloGold  Ashanti,  partnerships, persons  holding their shares or  ADSs  as part of a straddle, hedging or conversion transaction, persons who  acquired their  shares  or  ADSs  pursuant  to  the  exercise  of  employee  stock  options  or  otherwise  as  compensation,  or  persons whose functional currency is not the US dollar.  Such holders may be subject to US federal income tax consequences different from those set forth below.


As  used  herein,  the  term  “US holder”  means  a  beneficial  owner  of  shares  or  ADSs  that  is  (a) a  citizen  or  individual resident  of  the  United  States  for  US federal  income  tax  purposes;  (b) a  corporation  (or  other  entity  taxable  as  a corporation for US federal income tax purposes) created or organized in or under the laws of the United States or any state  thereof  (including  the  District  of  Columbia);  (c) an  estate  the  income  of  which  is  subject  to  US federal  income taxation regardless of its source; or (d) a trust if a court within the United States can exercise primary supervision over the administration of the trust and one or more US persons are authorized to control all substantial decisions of the trust.  If a partnership (including for this purpose any entity treated as a partnership for US federal income tax purposes) holds shares or ADSs, the tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. If a US holder is a partner in a partnership that holds shares or ADSs, the holder is urged to consult its own tax advisor regarding the specific tax consequences of the ownership and disposition of the shares or ADSs.
 
 US holders should consult their own tax advisors regarding the specific South African and US federal, state and local tax consequences  of  owning  and  disposing  of  shares  or  ADSs  in  light  of  their  particular  circumstances  as  well  as  any consequences arising under the laws of any other taxing jurisdiction. In particular, US holders are urged to consult their own tax advisors regarding whether they are eligible for benefits under the Treaty.
 
 For  South  African  and  US federal  income  tax  purposes,  a  US holder  of  ADSs  should  be  treated  as  owning  the underlying shares represented by those ADSs. Therefore, deposits or withdrawals by a US holder of shares for ADSs or of  ADSs  for  shares  will  not  be  subject  to  US  federal  income  tax.  The  following  discussion  (except  where  otherwise expressly noted) applies equally to US holders of shares and US holders of ADSs.
 
 Taxation of dividends
 
 The  gross  amount  of  any  distribution  (including  the  amount  of  any  South  African  withholding  tax  thereon)  paid  to  a US holder by AngloGold Ashanti generally will be taxable as dividend income to the US holder for US federal income tax purposes on the date the distribution is actually or constructively received by the US holder, in the case of shares, or by the depositary,  in  the  case  of  ADSs.  Corporate  US  holders  will  not  be  eligible  for  the  dividends  received deduction  in respect of dividends paid by AngloGold Ashanti. For foreign tax credit limitation purposes, dividends paid by AngloGold Ashanti will be income from sources outside the United States.  At present, South Africa does not impose a withholding tax  or  any  other  form  of  tax  on  dividends  paid  to  US  holders  with  respect  to  shares.  The  South  African  government, however, has recently announced its intent to enact a dividend withholding tax, which is expected to be implemented in 2010.  See  ‘Taxation  –  South  African  Taxation  –  Taxation  of  dividends.    Once  the  dividend  withholding  tax  becomes effective,  US holders  who  are  eligible  for  benefits  under  the  current  Treaty  will  be  subject  to  a  maximum  tax  of 15 percent on the gross amount of dividend distributions paid by AngloGold Ashanti.
 
 The  amount  of  any  distribution  paid  in  foreign  currency  (including  the  amount  of  any  South  African  withholding  tax thereon) generally  will be includible in the gross income of a US holder of shares in an amount equal to the US dollar value of the foreign currency calculated by reference to the spot rate in effect on the date of receipt by the US holder, in the case of shares, or by the depositary, in the case of ADSs, regardless of whether the foreign currency is converted into US dollars on such date. If the foreign currency is converted into US dollars on the date of receipt, a US holder of shares  generally  should  not  be  required  to  recognize  foreign  currency  gain  or  loss  in  respect  of  the  dividend.  If  the foreign currency received in the distribution is not converted into US dollars on the date of receipt, a US holder of shares generally will have a tax basis in the foreign currency equal to its US dollar value on the date of receipt. Any gain or loss recognized upon a subsequent conversion or other  disposition of the foreign currency generally will  be  treated  as US source  ordinary  income  or  loss.  In  the  case  of  a  US holder  of  ADSs,  the  amount  of  any  distribution  paid  in  a  foreign currency generally will be converted into US dollars by the depositary upon its receipt. Accordingly, a US holder of ADSs generally  will  not  be  required  to  recognize  foreign  currency  gain  or  loss  in  respect  of  the  distribution.  Special  rules govern and specific elections are available to accrual method taxpayers to determine the US dollar amount includible in income in the case of taxes withheld in a foreign currency. Accrual basis taxpayers are therefore urged to consult their own tax advisors regarding the requirements and elections applicable in this regard.
 
 Subject to certain limitations, South African withholding taxes will be treated as foreign taxes eligible for credit against a US holder’s US federal income tax liability. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. Dividend income generally will constitute ‘passive category’ income, or in the case of  certain  US  holders,  ‘general  category’  income.  The  use  of  foreign  tax  credits  is  subject  to  complex  conditions  and limitations. In lieu of a credit, a US holder who itemizes deductions may elect to deduct all of such holder’s foreign taxes in the taxable year. A deduction does not reduce US tax on a dollar-for-dollar basis like a tax credit, but the deduction for foreign taxes is not subject to the same limitations applicable to foreign tax credits. US holders are urged to consult their own tax advisors regarding the availability of foreign tax credits.


Certain  US  holders  (including  individuals)  are  eligible  for  reduced  rates  of  US  federal  income  tax  (currently  at  a maximum  rate  of  15 percent)  in  respect  of  “qualified  dividend  income”  received  in  taxable  years  beginning  before January 1, 2011. For this purpose, qualified dividend income generally includes dividends paid by a non-US corporation if,  among  other  things,  the  US  holders  meet  certain  minimum  holding  period  and  other  requirements  and  the non-US corporation satisfies certain requirements, including that either  (i) the  ordinary  shares (or ADSs) with respect to which the dividend has been paid are readily tradable on an established securities market in the United States, or (ii) the non-US corporation is eligible for the benefits of a comprehensive US income tax treaty (such as the Treaty) which provides for the exchange of information. AngloGold Ashanti currently believes that dividends paid with respect to its shares and ADSs  should  constitute  qualified  dividend  income for  US federal  income  tax  purposes.  AngloGold  Ashanti  anticipates that  its  dividends  will  be  reported  as  qualified  dividends  on  Forms  1099-DIV  delivered  to  US  holders.  Each  individual US holder of AngloGold Ashanti shares or ADSs is urged to consult his own tax advisor regarding the availability to him of the reduced dividend tax rate in light of his own particular situation.
 
 The US Treasury has expressed concern  that parties  to whom ADSs are  pre-released  may be taking actions that are inconsistent with the claiming of foreign tax credits for US holders of ADSs. Such actions would also be inconsistent with the  claiming  of  the  reduced  rate  of  tax  described  above,  applicable  to  dividends  received  by  certain  non-corporate holders.  Accordingly,  the  analysis  of  the  creditability  of  South  African  withholding  taxes  or  the  availability  of  qualified dividend treatment could be affected by future actions that may be taken by the US Treasury with respect to ADSs.
 
 Taxation of capital gains
 
 If  a  US  holder  is  a  resident  of  the  United  States  for  purposes  of  the  Treaty,  such  holder  will  not  be  subject  to  South African  tax on any capital  gain if it  sells or disposes  of its shares  or ADSs. Special rules apply to  individuals who are residents of more than one country.
  In general, upon a sale, exchange or other disposition of shares or ADSs, a US holder will recognize capital gain or loss for  US federal  income  tax  purposes  in  an  amount  equal  to  the  difference  between  the  US dollar  value  of  the  amount realized on the disposition and the holder's tax basis, determined in US dollars, in the shares or ADSs. Such gain or loss generally  will  be  US source  gain  or  loss, and  will  be  treated  as  a  long-term capital  gain or  loss  if  the  holder’s  holding period  in  the  shares  exceeds  one  year  at  the  time  of  disposition.  If  the  US holder  is  an  individual,  any  capital  gain generally will be subject to US federal income tax at preferential rates if specified minimum holding periods are met. The deductibility of capital losses is subject to significant limitations. A US holder’s tax basis in a share will generally be its US dollar cost.  The US  dollar cost  of a share  purchased  with foreign currency will generally be the US dollar value of the purchase price on the date of purchase, or the settlement date for the  purchase  in  the  case  of shares  traded  on  an  established  securities  market  that  are purchased by  a  cash basis US holder or an electing accrual basis US holder.  The amount realized on a sale or other disposition of shares for an  amount  in  foreign  currency  will  be  the  US  dollar  value  of  this  amount  on  the  date  of  sale  or  disposition.    On  the settlement  date,  the  US  holder  will  recognize  US  source  foreign  currency  gain  or  loss  (taxable  as  ordinary  income  or loss) equal to the difference (if any) between the US dollar value of the amount received based on the exchange rates in effect  on  the  date  of sale  or other  disposition  and  the settlement  date.    However,  in  the  case  of shares  traded on  an established  securities  market  that  are  sold  by  a  cash  US  holder  )or  an  accrual  basis  US  holder  that  so  elects),  the amount realized will be based on the exchange rate in effect between the settlement date for the sale, and no exchange gain or loss will be recognized at that time.  If an accrual basis US holder makes either of the elections described above, it must be applied consistency from year to year and cannot be revoked without the consider of the IRS.
  Foreign currency received on the sale or other disposition of a share will have a tax basis equal to its US dollar value on the settlement date.  Any gain or loss recognized on a sale or other disposition of foreign currency (including its use to purchase shares or upon exchange for US dollars) will be US source ordinary income or loss.Passive foreign investment company considerationsA non-US corporation will be classified a Passive Foreign Investment Company (a “PFIC”) for any taxable year if at least 75 percent  of  its  gross  income  consists  of  passive  income  (such  as  dividends,  interest,  rents  or  royalties  (other  than rents or royalties derived in the active conduct of a trade or business and received from an unrelated person), or gains on  the  disposition  of  certain  minority  interests),  or  at  least  50 percent  of  the  average  value  of  its  assets  consists  of assets  that  produce,  or  are  held  for  the  production  of,  passive  income.  AngloGold  Ashanti  believes  that  it  was  not treated  as  a  PFIC  for  the  taxable  year  ended  December 31,  2009  and  does  not  expect  to  become  a  PFIC  in  the


foreseeable future. If AngloGold Ashanti were characterized as a PFIC for any taxable  year, a US holder would suffer adverse tax consequences.
  These consequences may include having gains realized on the disposition of shares treated as ordinary income rather than capital gains and being subject to punitive interest charges on the receipt of certain dividends and on the proceeds of the sale or other disposition of the shares. Furthermore, dividends paid by AngloGold Ashanti would not be “qualified dividend income” and would be taxed at the higher rates applicable to other items of ordinary income. US holders should consult their own tax advisors regarding the potential application of the PFIC rules to their ownership of the shares. US information reporting and backup withholdingDividend payments made to a holder and proceeds paid from the sale, exchange, or other disposition of shares may be subject to information reporting to the Internal Revenue Service (the “IRS”). US federal backup withholding generally is imposed  at  a  current  rate  of  28 percent  on  specified  payments  to  persons  who  fail  to  furnish  required  information. Backup  withholding  will  not  apply  to  a  holder  who  furnishes  a  correct  taxpayer  identification  number  or  certificate  of foreign  status  and  makes  any  other  required  certification,  or  who  is  otherwise  exempt  from  backup  withholding. US persons  who  are  required  to  establish  their  exempt  status  generally  must  provide  IRS  Form  W-9  (Request  for Taxpayer  Identification  Number  and  Certification).  Non-US  holders  generally  will  not  be  subject  to  US  information reporting  or  backup  withholding.  However,  these  holders  may  be  required  to  provide  certification  of  non-US  status (generally  on  IRS  Form  W-8BEN)  in  connection  with  payments  received  in  the  United  States  or  through  certain  US-related  financial  intermediaries.  Backup  withholding  is  not  an  additional  tax.  Amounts  withheld  as  backup  withholding may be credited against a holder’s US federal income tax liability. A holder may obtain a refund of any excess amounts withheld  under  the  backup  withholding  rules by  filing  the  appropriate  claim  for  refund  with  the  IRS  and  furnishing  any required information.10F.  DIVIDENDS AND PAYING AGENTSNot applicable. 10G.  STATEMENT BY EXPERTSNot applicable. 10H.  DOCUMENTS ON DISPLAYAngloGold Ashanti files annual reports on Form 20-F and reports on Form 6-K with the SEC.  You may read and copy this information at the SEC’s Public Reference Room at 100F Street, N.E., Room 1580, Washington D.C. 20549 or by accessing the SEC’s home page (http://www.sec.gov duplicating  fee,  by  writing  to  the  Public  Reference  Section  of  the  SEC.    Please  call  the  SEC  at  1-800-SEC-0330  for
  further information on the operation of the Public Reference Room.  In addition, AngloGold Ashanti’s reports and other
  information  may  be  inspected  at  the  offices of  the  New  York  Stock  Exchange, 20  Broad Street,  New  York,  New  York
  10005.  Copies of the documents referred to herein may also be inspected at AngloGold Ashanti’s offices by contacting
  AngloGold  Ashanti  at  76 Jeppe  Street,  Newtown,  Johannesburg,  2001  (P.O.  Box  62117,  Marshalltown,  2107)  South
  Africa, Attention: Company Secretary, telephone number: +27 11 637 6000.10I. SUBSIDIARY INFORMATION


ITEM 11:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK TREASURY POLICYThe  board  of  directors  of  AngloGold  Ashanti  has  approved  a  treasury  and  risk  management  policy  that  governs  the group’s  treasury  activities,  including  the  setting  of  hedging  and  dealing  limits,  approval  of  hedging  instruments  and counterpart approval and limits.
  Under  the  treasury  and  risk  management  policy,  hedges  may  be  put  in  place  using  approved  instruments  over  the group’s planned gold production and resultant gold sales currency exposures. The tenor of the hedges may extend out to ten years. The treasury and risk management policy sets limits on the extent to which the hedge position may change for the various levels of treasury management from dealer, through treasurer, executive management and board.  The board of directors has delegated the approval of hedge instruments to AngloGold Ashanti’s treasury committee. The treasury committee must approve all types of hedging instruments, treatment of the instruments in the treasury system, reporting on the instruments and the accounting treatment for such instruments.  The financial risk management activities objectives of the group are as follows:
  Safeguarding the group’s core earnings stream through the effective control and management of gold and other commodity price risk, foreign exchange risk and interest rate risk;
      Ensuring  that  all  contracts  and  agreements  related  to  risk  management  activities  are  co-ordinated,  consistent throughout the group and comply where necessary with all relevant regulatory and statutory requirements.
 Under  the  treasury  and  risk  management  policy,  treasury  reports  that  include  all  open  hedging  transactions  are produced at the following minimum intervals for review by management and the board of directors.  Daily
     Treasury  committee,  Audit  and  corporate  governance  committee,  Board  of  directors, shareholder reports
 The Treasury risk manager is responsible for monitoring all reports for completeness and accuracy. The reports include stress testing of all hedge positions for changes in gold and other commodity prices, currency exchange rates, interest rates, and gold and exchange rate volatilities.
  At  AngloGold  Ashanti,  all  front  office  (dealing),  middle  office  (risk  reporting),  back  office  (deal  confirmations)  and payment  (treasury  settlements)  activities  are  segregated.  All  treasury  transactions  are  captured  on  a  third  party developed  treasury  and risk  management system that is widely  used in corporate treasuries. The  internal audit group conducts regular and ad-hoc reviews of the activities of treasury and the group’s treasury system.  GOLD PRICE RISK MANAGEMENT ACTIVITIESThe group enters into derivatives to ensure a degree of price certainty and to guarantee minimum revenue on a portion of  future  planned  gold  sales.  AngloGold  Ashanti  does  not  acquire,  hold  or  issue  derivative  instruments  for  economic trading  purposes.  A  number  of  products,  including  derivatives,  are  used  to  manage  the  price  of  gold  and  other commodities, interest rate and foreign exchange, liquidity and non-performance risk, which includes credit risk that arise out  of  the  group’s  core  business  activities.  Forward  purchase  and  sale  contracts  and  purchased  or  sold  call  and  put options  are  used  by  the  group  to  manage  its  exposure  to  gold  price,  interest  rate  and  currency  fluctuations.  Gold  derivative instruments are denominated in South African rands,  US dollars and Australian  dollars.    The group is  also exposed to certain by-product commodity price risk.A  put  option  gives  the  put  buyer  the  right,  but  not  the  obligation,  to  sell  the  underlying  to  the  put  seller  at  a predetermined price on a predetermined date. A call option gives the call buyer the right, but not the obligation, to buy the  underlying  from  the  call  seller  at  a  predetermined  price  on  a  predetermined  date.  The  group’s  risk  in  selling  call options  is  unlimited  but  mitigated  by  the  fact  that  the  group  produce  the  commodity  required  by  the  option  and  can partially offset any loss resulting from sold call options via the sale of production in the open market.


The  mix  of  derivative  instruments,  the  volume  of  production  hedged  and  the  tenor  of  the  hedge  book  is  continuously reviewed  in  light  of  changes  in  operational  forecasts,  market  conditions  and  the  group’s  hedging  policy.  AngloGold Ashanti’s reserves and financial strength have allowed it to arrange unmargined credit lines with counterparts.
 
 Forward  sales contracts  establish  the  price  of future  gold  sales  at  a  specified  price.  A  number  of  these  contracts  are intended by AngloGold Ashanti for delivery against production in a future period. The volume of net outstanding forward sales type contracts at the end of 2009 was 571kg (2008: 39,990kg).  The volume of outstanding net call options sold was 120,594kg (2008: 146,542kg) and the volume of outstanding net put options sold was 27,071kg (2008: 16,963kg).
 
 The  fair  value  of  early  termination  options  as  at  December  31,  2009  amounted  to  $nil  (December  31,  2008: $498 million) as these options were part of the hedge buy-back effected during July 2009.
 
 FASB ASC guidance on derivatives and hedging requires that derivative instruments be accounted for as follows: •
 Commodity based (“normal purchase or normal sale exempt”) contracts that meet the requirements of the FASB ASC  guidance  and  are  designated as  such,  are  recognized  in  product  sales  when  they  are  settled  by  physical delivery.    They  are  not  recorded  in  the  financial  statements  between  the  dates  that  they  are  entered  into  and settled.
  Contracts  that  meet  the  criteria  for  hedge  accounting  are  designated  as  the  hedging  instruments  hedging  the variability of forecasted cash flows from the sale of production into the spot market and from capital expenditure denominated in a foreign currency and are classified as cash flow hedges under the FASB ASC guidance.  The ineffective portion of matured and existing cash flow hedges recognized in loss on non-hedge derivatives in the income statement during the year was $5 million (2008: $8 million; 2007: $10 million). Of the contracts accounted for  as  cash  flow  hedges,  contracts  with  a  fair  value  of  $37 million  (2008:  $123 million;  2007:  $194 million),  a liability  at  December 31, 2009  are  expected  to  be  reclassified  from  accumulated  other  comprehensive  income and recognized as a reduction in product sales or as an adjustment to depreciation expense pertaining to capital expenditure during 2010.
  All other derivatives are measured at their estimated fair value, with the changes in estimated fair value at each reporting date reported as gains or losses on derivatives in earnings in the period in which they occur.
 
 Cash  flows  from  derivative  instruments  accounted  for  as  cash  flow  hedges  are  included  in  net  cash  provided  by operating activities in the statements of consolidated cash flows.Contracts that contain ‘off-market’ terms that result in the inflow of cash at inception are analogous to borrowing activities and, as such, are treated as financing activities.  All current  and  future  cash  flows  associated  with  such  instruments  are  classified  as  financing  activities  within  of  the consolidated cash flow statement.  Contracts that contain ‘off-market’ terms that result in the outflow of cash at inception are  analogous  to  lending  activities  and,  as  such,  are  treated  as  investing  activities.  All  current  and  future  cash  flows associated with such instruments are classified within the investing activities of the consolidated cash flow statement.
 
 The  group  has  an  established  practice  of  actively  managing  its  hedged  commitments  under  changing  market circumstances.  As of December 31, 2009, the hedge book reflected a net delta tonnage position of 3.49 million ounces (108 tonnes)  out  of  a  committed  position  of  3.90 million  ounces  (121 tonnes).    As  of  December  31,  2008,  the  hedge book  reflected  a  net  delta  tonnage  position  of  5.22 million  ounces  (162 tonnes)  out  of  a  committed  position  of 5.99 million ounces (187 tonnes).
 
 The marked-to-market value of all hedge transactions making up the hedge positions as at December 31, 2009 was a liability  of  $2,175 million,  which  represents  a  decrease  of  $280 million  from  a  liability  of  $2,455  million  as  at December 31, 2008.  This  value  was  based  on  a  gold  price  of  $1,102  per  ounce,  exchange  rates  of $1 =  R7.435 and A$1 = $0.8967  and  the  prevailing  market  interest  rates  and  volatilities  at  December  31,  2009.    The  values  as  at December 31, 2008 were based on a gold price of $872 per ounce, exchange rates of $1 = R9.4550 and A$1 = $0.6947 and  the  prevailing  market  interest  rates  and  volatilities  at  that  date.    As  at  December  31,  2008  such  values  include normal purchase normal sale exempt contracts which as discussed above are not recorded in the financial statements between the dates that they are entered into and settled.
 
 During 2009, the Group embarked on a hedge buy-back that resulted in the accelerated settlement of both non-hedge and  forward  gold  contracts  qualifying  for  the  normal  sale  exemption  (which  permits  the  Group  to  not  record  such amounts  in  its  financial  statements  until  the  maturity  date  of  the  contract)  under  which  the  Group  had  committed  to deliver  a  specified  quantity  of  gold  at  a  future  date  in  exchange  for  an  agreed  price.    As  a  result  of  the  accelerated settlement  of  the  normal  sale  exempted  contracts,  all  remaining  contracts  scheduled  to  mature  in  later  periods  have been  determined  to  not  meet  all  of  the  requirements  necessary  for  them  to  continue  to  qualify  for  the  normal  sales exemption  in  future  periods  and  are  being  accounted  for  as  non-hedge  derivatives  at  fair  value  in  the  consolidated balance sheet, with changes in fair value reflected in the income statement.


These marked-to-market valuations are not predictive of the future value of the hedge position, nor of the future impact on the revenue of the Group.  The valuation represents the theoretical cost of exiting all hedge contracts at the time of valuation, at market prices and rates available at that time.
   The Group had the following net forward pricing commitments outstanding against future production as at December 31, 2009.
   
 Year
 2010
 2011
 2012
 2013
 2014
 2015
 Total
 DOLLAR GOLD
 
 
 
 
 
 
 
 
 Forward contracts
 Amount (kg)
 *(13,534)
 1,866
 3,810
 3,717
 2,846
 
 *(1,295)
 
 $ per oz
 *
 $909
 $227
 $418
 $477
 $510
 
 *
 $5,457
 Put options sold
 Amount (kg)
 14,801
 4,603
 2,659
 1,882
 1,882
 
 25,827
 
 $ per oz
 $929
 $623
 $538
 $440
 $450
 
 $764
 Call options sold
 Amount (kg)
 33,137
 24,161
 25,238
 17,857
 21,165
 902
 122,460
 
 $ per oz
 $619
 $554
 $635
 $601
 $604
 $670
 $605
 RAND GOLD
 
 
 
 
 
 
 
 
 Forward contracts
 Amount (kg)
 *(1,244)
 
 
 
 
 
 *(1,244)
 
 Rand per kg
 *
 R 232,225
 
 
 
 
 
 *R 232,225
 Put options sold
 Amount (kg)
 1,244
 
 
 
 
 
 1,244
 
 Rand per kg
 R 240,354
 
 
 
 
 
 R 240,354
 Call options sold
 Amount (kg)
 1,244
 
 
 
 
 
 1,244
 
 Rand per kg
 R 262,862
 
 
 
 
 
 R 262,862
 AUD DOLLAR GOLD
 
 
 
 
 
 
 
 
 Forward contracts
 Amount (kg)
 3,110
 
 
 
 
 
 3,110
 
 A$ per oz
 A$646
 
 
 
 
 
 A$646
 Call options purchased
 Amount (kg)
 3,110
 
 
 
 
 
 3,110
 
 A$ per oz
 A$712
 
 
 
 
 
 A$712
 **
 Total net gold:
 Delta (kg)
 (13,582)
 (24,567)
 (26,855)
 (20,278)
 (22,383)
 (817)
 (108,482)
 
 Delta (oz)
 (436,666)
 (789,849)
 (863,406)
 (651,962)
 (719,638)
 (26,258)
 (3,487,779)
 Hedge delta as a percentage of
 current production levels (%)***
 
 9%
 17%
 19%
 14%
 16%
 1%
 
  *
 Represents a net long gold position and net short US Dollars/rands position resulting from both forward sales and purchases for the period.
 **
 The  Delta  of  the  hedge  position  indicated  above  is  the  equivalent gold  position  that  would  have  the same  marked-to-market  sensitivity  for a  small
 change in the gold price.  This is calculated using the Black-Scholes option formula with the ruling market prices, interest rates and volatilities as at
 December 31, 2009.
 ***  Weighted average percentage based on 2009 full year production of 4,599,000 ounces.
   GOLD LEASE RATE SWAPS
   Year
 2010
  Gold borrowing cost associated with forward contracts
 (1)
   Amount (oz)
  100,000
    Interest rate %
  2.05
   (1)
 Gold borrowing cost relating to Australian dollar gold forwards:
  The Australian dollar denominated gold forward contract prices are presented on a net basis where the final price of the contract is determined by the
 cost  of  borrowing  gold  over  the  full  duration  of  the  contract.    The  net  prices  in  the  table  above  have  been  adjusted  to  take  account  of  the  total
 expected future cost of all accumulated costs incurred to date and the expected future borrowing cost based on ruling market prices.  The amount
 shown under “Gold borrowing cost associated with forward contracts” in the table above is the face value of the borrowing amount and the period in
 which it matures.  The interest rates shown are the future market rates prevailing at the time of the financial statements.
  Foreign exchange price risk protection agreements The Group enters into currency forward exchange and currency option contracts to hedge certain anticipated transactions denominated in foreign currencies. The objective of the Group’s foreign currency hedging activities is to protect the Group from the risk that the eventual cash flows resulting from transactions denominated in US dollars will be adversely affected by changes in exchange rates.


As at December 31, 2009, the Group had no open forward exchange or currency option contracts in its currency hedge position.Interest rate and liquidity riskFluctuations  in  interest  rates  impacts  interest  paid  and  received  on  the  short-term  cash  investments  and  financing activities, giving rise to interest rate risk.
  In the ordinary course of business, the Group receives cash from the proceeds of its gold sales and is required to fund working  capital  requirements.    This  cash  is  managed  to  ensure  surplus  funds  are  invested  in  a  manner  to  achieve market related returns while minimizing risks.  The Group is able to actively source financing at competitive rates.  The counterparts are financial and banking institutions and their credit ratings are regularly monitored by the group. Cash and loans advanced maturity profile
 2009
 2008
 Maturity date
 
 Currency
 Fixed rate
 investment
 amount
 Effective
 rate %
 Floating
 rate
 investment
 amount
 Effective
 rate %
 Fixed rate
 investment
 amount
 Effective
 rate %
 Floating
 rate
 investment
 amount
 Effective
 rate %
 
 
 (million)
 
 (million)
 
 (million)
 
 (million)
 
 All less than one year
 USD
 506
 0.29
 178
 0.13
 166
 2.48
 121
 1.95
 
 ZAR
 1,135
 7.03
 839
 6.38
 930
 11.50
 668
 10.84
 
 AUD
 -
 -
 13
 3.52
 -
 -
 -
 -
 
 EUR
 -
 -
 1
 0.50
 -
 -
 -
 -
 
 CAD
 -
 -
 1
 0.08
 -
 -
 -
 -
 
 HKD
 -
 -
 1
 0.01
 -
 -
 1
 2.25
 
 BRL
 -
 -
 152
 10.20
 -
 -
 144
 13.52
 
 ARS
 -
 -
 4
 10.23
 -
 -
 5
 12.50
 
 NAD
 -
 -
 -
 -
 155
 11.58
 96
 9.40
 Borrowings maturity profile
 
 Within one year
 Between
 one and two years
 Between
 Two and five years
 After five years
 Total
 
 Borrowings
 Amount
 Effective
 Rate
 Borrowings
 Amount
 Effective
 Rate
 Borrowings
 Amount
 Effective
 Rate
 Borrowings
 Amount
 Effective
 Rate
 Borrowings
 Amount
 Currency
 (million)
 %
 (million)
 %
 (million)
 %
 (million)
 %
 (million)
 $
 1,290
 2.3
 9
 3.5
 618
 3.5
 -
 -
 1,917
 ZAR
 2
 9.8
 2
 9.8
 14
 9.8
 240
 9.8
 258
 BRL
 3
 6.1
 3
 6.0
 5
 6.0
 -
 -
 11
 Interest rate risk
 
 Fixed for less than one year
 Fixed for between one and
 three years
 Fixed for greater than three
 years
 Total
 Currency
 Borrowings
 Amount
 Effective
 Rate
 Borrowings
 Amount
 Effective
 Rate
 Borrowings
 Amount
 Effective
 Rate
 Borrowings
 Amount
 
 (million)
 %
 (million)
 %
 (million)
 %
 (million)
 $
 1,290
 2.3
 11
 3.5
 616
 3.5
 1,917
 ZAR
 2
 9.8
 5
 9.8
 251
 9.8
 258
 BRL
 3
 6.1
 5
 6.0
 3
 6.0
 11


Non-performance riskRealization  of  contracts  is  dependent  upon  the  counterparts’  performance.   The  Group  has  not  obtained  collateral  or other  security  to  support  financial  instruments  subject  to  non-performance  risk,  but  regularly  monitors  the  credit standing  of  counterparts.    The  Group  spreads  its  business  over  a  number  of  financial  and  banking  institutions  and believes  that  little  to  no  concentration  of  non-performance  risk  exists.    Limits  for  each  counterpart  are  based  on  the assessed credit quality of each counterpart.  The AngloGold Ashanti Treasury Committee makes recommendations for board approval of all counterparts and the limits to be applied to each counterpart.  Where possible, management puts ISDA netting agreements in place.
  The  combined  maximum  credit  exposure  at  the  balance  sheet  date  amounts  to  $335 million  (2008:  $571 million).  Credit  risk  exposure  netted  by  counterparts  amounts  to  $104 million  (2008:  $207 million).  No  set-off  is  applied  to balance sheet amounts due to the different maturity profiles of assets and liabilities. The combined maximum credit risk exposure of the Group as at December 31, 2009 is as follows:
 
 
 
   At December
 31,
   2009
 $
     Forward sales type agreements - commodity Option contracts - commodity Warrants on shares
      The fair value of derivative assets and liabilities reflects non-performance risk relating to the counterparts and the Group, respectively, as at December, 2009.
  The table below provides a summary of the number, type and credit quality of AngloGold Ashanti's hedge counterparts.
 Number of Counterparts
 Type
 Credit Rating (Fitch)
                                               Due to the inability of a single counterpart to accept the physical delivery of gold under the terms of NPSE designated forward-contracts  expiring  in  April  through  June  2008,  the  Group  cash  settled  such  contracts  with  this  counterpart during that period.  In 2008, the Group also reclassified all remaining outstanding contracts with this counterpart from the NPSE category to the “non-hedge derivatives” category as they no longer qualified for the exemption permitted by the FASB ASC guidance on derivatives and hedging.  See “Note 5 – Cost and expenses: non-hedge derivative loss” for additional information.


Fair value of financial instruments
 
 The estimated fair values of financial instruments are  determined at discrete points  in time based on  relevant  market information.   The estimated fair values of  the Group’s financial instruments, as  measured at  December  31, 2009 and 2008, are as follows (assets (liabilities)):
 
 
 December 31, 2009
 December 31, 2008
 
 Carrying
 Amount
 $
 
 Fair Value
 $
 Carrying
 Amount
 $
 
 Fair Value
 $
                      (1)
      
 (1)  Carrying amounts represent on-balance sheet derivatives and fair value includes off-balance sheet NPSE contracts in 2008.
 The following is the fair value of the derivative assets and liabilities split by accounting designation:
 December 31, 2009
 Cash flow
 hedge
 accounted
 Non-hedge
 accounted
 Total
 
 Balance Sheet location
 $
 $
 $
 Assets
 
 
 
 
 Forward sales type agreements - commodity
 Current assets -  derivatives
 -
 283
 283
 Option contracts - commodity
 Current assets -  derivatives
 -
 47
 47
 Total hedging contracts
 
 -
 330
 330
 Warrants on shares
 Non-current assets -  derivatives
 -
 5
 5
 Total derivatives
 
 -
 335
 335
 
 
 
 
 
 Liabilities
 
 
 
 
 Forward sales type agreements - commodity
 Current liabilities -  derivatives
 (37)
 (441)
 (478)
 Option contracts - commodity
 Current liabilities -  derivatives
 -
 (2,034)
 (2,034)
 Interest rate swaps - gold
 Current liabilities -  derivatives
 -
 (13)
 (13)
 Total hedging contracts
 
 (37)
 (2,488)
 (2,525)
 Embedded derivatives
 Non-current liabilities -  derivatives
 -
 (1)
 (1)
 Option component of convertible bonds
 Non-current liabilities -  derivatives
 -
 (175)
 (175)
 Total derivatives
 
 (37)
 (2,664)
 (2,701)


232
 
 The following is the fair value of the derivative assets and liabilities split by accounting designation:
 
 December 31, 2008
 Normal
 sale
 exempted
 (1)
 
 Cash flow
 hedge
 accounted
 Non-
 hedge
 accounted
 Total
 
 Balance Sheet location
 $
 $
 $
 $
 Assets
 
 
 
 
 
 Forward
  sales type agreements -
 commodity
 Current assets -  derivatives
 -
 -
 468
 468
 Option contracts - commodity
 Current assets -  derivatives
 -
 -
 56
 56
 Forward sales agreements - currency
 Current assets -  derivatives
 -
 -
 25
 25
 Option contracts - currency
 Current assets -  derivatives
 -
 -
 6
 6
 Interest rate swaps - gold
 Current assets -  derivatives
 -
 -
 15
 15
 Total hedging contracts
 
 -
 -
 570
 570
 Warrants on shares
 Non-current assets -  derivatives
 -
 -
 1
 1
 Total derivatives
 
 -
 -
 571
 571
 
 
 
 
 
 
 Liabilities
 
 
 
 
 
 Forward
  sales type agreements -
 commodity
 Non-current liabilities -  derivatives
 -
 (25)
 (105)
 (130)
 Forward sales agreements - commodity
 Current liabilities -  derivatives
 (622)
 (121)
 (311)
 (1,054)
 Option contracts - commodity
 Current liabilities -  derivatives
 (534)
 -
 (1,311)
 (1,845)
 Forward sales agreements - currency
 Current liabilities -  derivatives
 -
 (1)
 (9)
 (10)
 Option contracts - currency
 Current liabilities -  derivatives
 -
 -
 (5)
 (5)
 
 
 
 
 
 
 Interest rate swaps - gold
 Current liabilities -  derivatives
 (24)
 -
 -
 (24)
 Total derivatives
 
 (1,180)
 (147)
 (1,741)
 (3,068)
 
 (1)
 NPSE exempted contracts not reported on balance sheet.
 
 
 The derivative  assets (liabilities)  are stated  after taking into consideration the  impact of  credit risk adjustment totaling $150 million as of December 31, 2009 (2008: $227 million).
 
  Non-hedge derivative gain/(loss) recognized
  Year ended December 31, 2009
 
 Location of gain/(loss) in income statement
 $
 Realized
 
 
 Forward sales type agreements - commodity
 Non-hedge derivative gain/(loss)
 (535)
 (1)
 
 Option contracts - commodity
 Non-hedge derivative gain/(loss)
 (144)
 (1)
 
 Forward sales agreements - currency
 Non-hedge derivative gain/(loss)
 107
 
 
 Option contracts - currency
 Non-hedge derivative gain/(loss)
 12
 
 
 Interest rate swaps - gold
 Non-hedge derivative gain/(loss)
 16
 
 
 
 
 (544)
 
 
 Unrealized
 
 
 Forward sales type agreements - commodity
 Non-hedge derivative gain/(loss)
 (188)
 (2)
 
 Option contracts - commodity
 Non-hedge derivative gain/(loss)
 (648)
 (2
 
 Forward sales agreements - currency
 Non-hedge derivative gain/(loss)
 (15)
 
 
 Option contracts - currency
 Non-hedge derivative gain/(loss)
 (3)
 
 
 Interest rate swaps - gold
 Non-hedge derivative gain/(loss)
 (25)
 (2)
 
 Option component of convertible bonds
 Non-hedge derivative gain/(loss)
 (33)
 
 
 Embedded derivatives
 Non-hedge derivative gain/(loss)
 (1)
 
 
 Warrants on shares
 Non-hedge derivative gain/(loss)
 5
 
 
 
 
 (908)
 
 
 Loss on non-hedge derivatives
 
 (1,452)
 
 
  (1)
 Includes $580 million loss related to accelerated settlement of contracts previously designated as NPSE.
 (2)
 Includes $556 million loss related to re-designation of contracts formally qualifying for the NPSE designation.


233
 
 Other comprehensive income
  
 Year ended December 31, 2009
 
 Cash flow
 hedges, before
 tax
 $
 Cash flow hedges removed from
 equity, before tax
 $
 Hedge ineffectiveness, before tax
 $
 
 Gain/(loss)
 recognized in
 accumulated
 other
 comprehensive
 income
 (effective
 portion)
 Location of
 (gain)/loss
 reclassified from
 accumulated
 other
 comprehensive
 income into
 income (effective
 portion)
 Amount of (gain)/loss
 reclassified from
 accumulated
 other
 comprehensive
 income into
 income (effective
 portion)
 Location of
 (gain)/loss recognized
 in income
 (ineffective portion)
 Amount of (gain)/loss
 recognized
 in income
 (ineffective
 portion)
 Forward sales type agreements - commodity
       Forward sales agreements - currency
             
 Other comprehensive income
 
  Accumulated other
 comprehensive
 income as of
 January 1, 2009
 Changes in fair value
 recognized in 2009
 Reclassification
 adjustments
 Accumulated other
 comprehensive income
 as of December 31, 2009
  $
 $
 $
 $
               
       (1)
        
 
 Accumulated other
 comprehensive
 income as of
 January 1, 2008
 Changes in fair value
 recognized in 2008
 Reclassification
 adjustments
 Accumulated other
 comprehensive income
 as of December 31, 2008
 
 $
 $
 $
 $
               
       (1)
        (1)
 Includes  cumulative  net  translations  differences  of  $18 million  (2008:  $33 million)  resulting  from  the  revaluation  and  settlement  of  non-US  dollar
 denominated cash flow hedge contracts.


Maturity profile of on-balance sheet derivatives, at carrying value
 
 2009
 
 Total
 $
 Assets
 $
 Liabilities
 $
                         
 2008
 
 Total
 $
 Assets
 $
 Liabilities
 $
                 The following methods and assumptions were used to estimate the fair value of each class of financial instrument:
   Cash restricted for use, cash and cash equivalents and short-term debt
  
   Long-term debt
  
 The  fair  value  of  the  convertible  bonds  are  shown  at  their  quoted  market  value.    Other  long-term  debt  re-prices  on  a  short-term floating rate basis, and accordingly the carrying amount approximates to fair value.
   Derivatives
  
 The fair value of volatility-based instruments (i.e. options) are estimated based on market prices, volatilities, credit risk and interest rates,  while the fair value of  forward  sales  and purchases are  estimated based on  the quoted  market prices  and credit  risk for the contracts at December 31, 2009 and 2008.  The Group uses the Black-Scholes option pricing formula to value option contracts.  The amounts disclosed in 2008 include those contracts accounted for as normal purchase and sale exemption derivatives.
   Sensitivity analysis
  DerivativesA principal part of the Group's management of risk is to monitor the sensitivity of derivative positions in the hedge book to changes in  the  underlying  factors,  including  commodity  prices,  foreign  exchange  rates  and  interest  rates  under  varying  scenarios.  Additionally  the  Group’s  management  of  risk  is  to  monitor  the  sensitivity  of  the  convertible  bonds  to  changes  in  AngloGold Ashanti Limited’s share price and warrants on shares. The following table discloses the approximate sensitivities, in US dollars,  of the fair  value of the hedge book, warrants on shares and  the  convertible  bonds  to  key  underlying  factors  at  December  31,  2009  (actual  changes  in  the  timing  and  amount  of  the following variables may differ from the assumed changes below). The table sets out the impact on the fair value of the hedge book of an incremental parallel fall or rise in the respective yield curves at the beginning of each month, quarter or year (as is appropriate) from January 1, 2010.  The yield curves match the maturity dates of  the  individual  derivative  positions  in  the  hedge  book.    These  figures  incorporate  the  impact  of  any  option  features  in  the underlying exposures.


2009
  Change in
 underlying
 factor (+)
  Cash flow
 hedge
 accounted
  Non-hedge
 accounted
  Total
 change in
 fair value
       Hedge book
                                          Convertible bonds
                Warrants on shares
                 2009
 
  Change in
 underlying
 factor (-)
  Cash flow
 hedge
 accounted
  Non-hedge
 accounted
  Total
 change in
 fair value
       Hedge book
                                           Convertible bonds
                Warrants on shares
              IR represents interest rate.


ITEM 12: DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
  12A.   Debt Securities 12B.    Warrants and Rights 12C.    Other Securities 12D.     American Depositary Shares
  12D.3 Depositary Fees and Charges AngloGold  Ashanti’s  American  Depositary  Shares,  or  ADSs,  each  representing  one  of  AngloGold  Ashanti’s  ordinary shares, are  traded on the  New  York Stock Exchange  under  the symbol “AU.”   The  ADSs are evidenced by  American Depositary  Receipts,  or  ADRs,  issued  by  The  Bank  of  New  York  Mellon,  as  Depositary  under  the  Amended  and Restated  Deposit  Agreement  dated  as  of  June 3,  2008,  among  AngloGold  Ashanti  Limited,  The  Bank  of  New  York Mellon  and  owners  and  beneficial  owners  of  from  time  to  time  of  ADRs.  ADS  holders  may  have  to  pay  the  following service fees to the Depositary:
 Service
  Fees (USD)
        (1)
      (1)
      (2)
          (2)
      (2)
   (1)
  These fees are typically paid to the Depositary by the brokers on behalf of their clients receiving the newly-issued ADSs from the Depositary and by the brokers on behalf of their clients delivering the ADSs to the Depositary for cancellation. The brokers in turn charge these transaction fees to their clients.
 (2)
  In  practice,  the  Depositary  has  not  collected  these  fees.  If  collected,  such  fees  are  offset  against  the  related distribution made to the ADR holder.
 
 In  addition,  ADS  holders  are  responsible  for  certain  fees  and  expenses  incurred  by  the  Depositary  on  their  behalf including (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the  registration  of  transfers  of  ordinary  shares  generally  on  the  share  register  and  applicable  to  transfers  of  ordinary shares  to  the  name  of  the  Depositary  or  its  nominee  or  the  Custodian  or  its  nominee  on  the  making  of  deposits  or withdrawals, and (3) such cable, telex and facsimile transmission expenses as are expressly incurred by the Depositary in the conversion of foreign currency.
  Fees  and  other  charges  payable  by  the  Depositary,  any  of  the  Depositary’s  agents,  including  the  Custodian,  or  the agents  of  the  Depositary’s  agents  in  connection  with  the  servicing  of  Shares  or  other  Deposited  Securities,  shall  be collected at the  sole discretion  of  the  Depositary  by  billing  such  owners for  such  charge or  by  deducting such charge from one or more cash dividends or other cash distributions. For further information, refer to “Item 10.B – The Deposit Agreement”. 12D.4 Depositary Payments for 2009 For  the  year  ended  December 31,  2009,  The  Bank  of  New  York  Mellon,  as  Depositary,  has  agreed  to  reimburse AngloGold Ashanti an amount of $1,208,174 mainly for contributions towards the company’s investor relations activities (including investor meetings, conferences and fees of investor relations service vendors).  Included in this amount is an amount of $572,223 in respect of investor relations activities carried out in 2008.


PART II
 
 ITEM 13: DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
 
 None.


ITEM  14:  MATERIAL  MODIFICATIONS  TO  THE  RIGHTS  OF  SECURITY  HOLDERS AND USE OF PROCEEDS


ITEM 15: CONTROLS AND PROCEDURES
 
 (a)
 Disclosure Controls and Procedures:As of December 31, 2009 (the “Evaluation Date”), the company, under the supervision  and  with  the  participation  of  its  management,  including  the  Chief  Executive  Officer  and  Chief Financial  Officer  has  evaluated  the  effectiveness  of  the  company’s  disclosure  controls  and  procedures  (as defined  in  Rules  13a  –  15(e)  and  15d  –  15(e)  under  the  Securities  Exchange  Act  of  1934,  as  amended  (“the Exchange  Act”).    Based  on  such  evaluation,  the  Chief  Executive  Officer  and  Chief  Financial  Officer  have concluded that, as of the Evaluation Date, the company’s disclosure controls and procedures are effective, and are reasonably designed to ensure that information required to be disclosed by the company in reports that it files or  submits  under  the  Exchange  Act  is  recorded,  processed,  summarized  and  reported  within  the  time  periods specified  in  the  rules  and  forms  of  the  Securities  and  Exchange  Commission.    These  disclosure  controls  and procedures include without limitation, controls and procedures designed to ensure that information required to be disclosed  by  the  company  in  reports  that  it  files  or  submits  under  the  Exchange  Act  is  accumulated  and communicated  to the company’s  management,  including its Chief  Executive Officer  and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure.
 (b)
 Management’s  Annual  Report  on  Internal  Control  over  Financial  Reporting:Management  is  responsible  for establishing and maintaining adequate internal control over financial reporting for the company, as defined in the Exchange  Act  Rule  13a  –  15(f)  and  15d  -15(f).    The  company’s  internal  control  over  financial  reporting  is  a process  designed  to  provide  reasonable  assurance  regarding  the  reliability  of  financial  reporting  and  the preparation  of  the  company’s  financial  statements  for  external  purposes  in accordance  with  generally  accepted accounting principles in the United States of America.
  The company’s internal control over financial reporting includes those policies and procedures that:
  Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of the assets of the company;
  Provide  reasonable  assurance  that  the  transactions  are  recorded  as  necessary  to  permit  preparation  of financial  statements  in  accordance  with  generally  accepted  accounting  principles,  and  that  receipts  and expenditures of the company are being made only in accordance with authorizations of management and the Directors of the company; and
  Provide  reasonable  assurance  regarding prevention or  timely  detection  of  unauthorized acquisition,  use,  or disposition of the company’s assets that could have a material effect on the financial statements.
 Because  of inherent limitations, internal control  over financial reporting may not prevent  or detect misstatements.  Projections  of  any  evaluation  of  effectiveness  to  future  periods  is  subject  to  the  risk  that  controls  may  become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate. The  company’s  management  assessed  the  effectiveness  of  the  company’s  internal  control  over  financial reporting as of the Evaluation Date.  In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of  the Treadway  Commission (COSO) in  Internal Control – Integrated Framework.    Based  on  this  assessment,  and  using  those  criteria,  management  concluded  that  the  company’s internal control over financial reporting was effective as of the Evaluation Date.
 (c)
 Changes  in  Internal  Control  over  Financial  Reporting:There  have been no  changes  in  the  company’s  internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act  Rule  13a –  15  during  the  year  ended  December 31,  2009  that  have  materially  affected,  or  are  reasonably likely to materially affect, the company’s internal control over financial reporting.
 (d)
 Attestation Report of the Registered Public Accounting Firm:  The company’s independent registered accounting firm, Ernst & Young Inc., has issued an audit report on the effectiveness of the company’s internal control over financial reporting.  This report appears below.
 /s/ M Cutifani
  Mark Cutifani
 Srinivasan Venkatakrishnan
 Chief Executive Officer
 Chief Financial Officer


REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 The board of directors and stockholders of AngloGold Ashanti Limited
 
 We have audited AngloGold Ashanti Limited’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of  the  Treadway  Commission  (the  COSO  criteria).  AngloGold  Ashanti  Limited’s  management  is  responsible  for maintaining  effective  internal  control  over  financial  reporting,  and  for  its  assessment  of  the  effectiveness  of  internal control over financial reporting included in the accompanying management certification. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.  We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those  standards  require  that  we  plan  and  perform  the  audit  to  obtain  reasonable  assurance  about  whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as  we considered  necessary  in  the circumstances. We believe  that our  audit  provides  a  reasonable basis for our opinion.
  A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally  accepted  accounting  principles.  A  company’s  internal  control  over financial  reporting  includes  those  policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions  and  dispositions  of  the  assets  of  the  company;  (2)  provide  reasonable  assurance  that  transactions  are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management  and  directors  of  the  company;  and  (3)  provide  reasonable  assurance  regarding  prevention  or  timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
  Because  of  its  inherent  limitations,  internal  control  over  financial  reporting  may  not  prevent  or  detect  misstatements.  Also, projections of any  evaluation  of effectiveness  to future periods are subject to the risk  that controls  may become inadequate  because  of  changes  in  conditions,  or  that  the  degree  of  compliance  with  the  policies  or  procedures  may deteriorate.
  In  our  opinion,  AngloGold  Ashanti  Limited  maintained,  in  all  material  respects,  effective  internal  control  over  financial reporting as of December 31, 2009, based on the COSO criteria. We  also  have  audited,  in  accordance  with  the  standards  of  the  Public  Company  Accounting  Oversight  Board  (United States),  the  2009  consolidated  financial  statements  of  AngloGold  Ashanti  Limited  and  our  report  dated  April 19,  2010 expressed an unqualified opinion thereon.
  Ernst & Young Inc. Registered Auditor
  Johannesburg, Republic of South Africa  April 19, 2010


ITEM 16A: AUDIT COMMITTEE FINANCIAL EXPERT
 Membership of the audit and corporate governance committee, including its chairman, comprises only independent non-executive  directors,  in  compliance  with  the  Sarbanes-Oxley  Act.  This  also  fulfils  the  guidelines  of  the  King  III  Code, which  became  effective  in  March  2010,  and  the  requirements  of  Companies  Act  71,  of  2008,  which  is  expected  to become effective during 2010. The Sarbanes-Oxley Act requires the board to identify a financial expert from within its ranks.  The  board  has  resolved  that  the  committee's  chairman,  Prof  Wiseman  Nkuhlu  is  the  audit  and  corporate governance  committee's  financial  expert.  All  three  members  of  the  committee  have  considerable  financial  knowledge and experience to help oversee and guide the board and the company in respect of the audit and corporate governance disciplines.
  The  committee  is  guided  by  its  terms  of  reference.  The  mandate  as  delegated  by  the  board  is  ensuring  integrity  of financial  reporting  and  adequacy  of  governance,  internal  control  and  risk  management  policies  and  processes throughout the group.
 ITEM 16B: CODE OF ETHICS AND WHISTLE BLOWING POLICIES
 In order to comply with the company's obligation in terms of the Sarbanes-Oxley Act and the South African King Code on  Corporate  Governance,  and  in  the  interests  of  good  governance,  the  company  has  systems  and  procedures  to introduce, monitor and enforce its ethical codes and has adopted a code of ethics for employees, a code of ethics for the chief  executive  officer,  principal  financial  officer  and  senior  financial  officers,  and  a  whistle-blowing  policy  that encourages employees and other  stakeholders to confidentially and  anonymously report acts of an unethical  or illegal nature that affect the company's interests. Senior management oversee compliance with the ethical code by means of several mechanisms including:
         The  whistle-blowing  policy  applies  to  all  companies  in  the  AngloGold  Ashanti  group  and  provides  a  channel  for shareholders,  employees  and  the  general  public  to  report  acts  and  practices  that  are  in  conflict  with  the  company’s business  principles,  unlawful,  financial  malpractice  or  dangers  to  the  public  or  the  environment.  Reports  are  made through  several  mediums  including  the  intranet,  internet,  telephone,  fax  and  post.  An  initiative  is  being  undertaken  to also  implement  short  messaging  system  (sms)  as  a  medium  for  reporting.  All  reports  made  in  terms  of  the  whistle-blowing policy are administered by a third party, Tip-Offs Anonymous, to ensure confidentiality and independence of the process.  Reported  cases  are  relayed  to  management  through  internal  audit.  A  report  is  provided  to  the  Executive Committee  and  the  Audit  and  Corporate  Governance  Committee  on  a  quarterly  basis.  Reporters  have  the  option  to request  feedback  on  reported  cases.  The  process  encourages  reports  to  be  made  in  good  faith  in  a  responsible  and ethical manner. Employees are encouraged to first seek resolution of alleged malpractices through discussion with their direct  managers,  if  appropriate,  or,  if  unresolved,  they  should  then  report  these  through  the  whistle-blowing  line  or directly to internal audit or the legal department.   In addition, the company has adopted a disclosures policy, the objective of which is to ensure compliance with the rules of  the  various  exchanges  on  which  it  is  listed  and  provide  timely,  accurate  and  reliable  information  fairly  to  all stakeholders, including investors (and potential investors), regulators and analysts.   Each  code  of  ethics,  whistle  blowing  and  disclosure  policy  is  available  on  the  company’s  website http://www.anglogoldashanti.co.za/About/Gov+Policies.htm. Each code  of ethics and disclosure policy  is also available on request from the company secretary.


ITEM 16C: PRINCIPAL ACCOUNTANT FEES AND SERVICES
 Ernst & Young Inc. has served as AngloGold Ashanti’s independent public accountants for each of the financial years in the three-year period ended December 31, 2009 for which audited financial statements appear in this annual report on Form 20-F.
  The following table presents the aggregate fees for professional services and other services rendered by Ernst & Young Inc. to AngloGold Ashanti in 2009 and 2008.
 2009
 2008
 (in millions)
 $
 $
  (1)
     (2)
     (3)
        Rounding may result in computational differences.
 (1)
 
 The  Audit  Fees  consist  of  fees  billed  for  the  annual  audit  services  engagement  and  other  audit  services,  which  are  those  services  that  only  the
 external  auditor  reasonably  can  provide,  and  include  the  Company  audit;  statutory  audits;  attest  services;  and  assistance  with  and  review  of
 documents filed with  the  SEC.  Included  in the Audit Fees for 2009  and 2008 are fees paid to the external auditors  in respect of  SOX, which  was
 implemented in 2006.
 (2)
 
 Audit-related Fees consist of fees billed for assurance and related services and include consultations concerning financial accounting and reporting
 standard, comfort letters and consents.
 (3)
 
 Tax Fees include fees billed for tax advice and tax compliance services.
  
 Audit and Corporate Governance Committee Pre-approval Policies and Procedures It is the policy of AngloGold Ashanti to maintain compliance with the requirements of the various applicable legislation and  good  governance  practices  when  appointing  or  assigning  work  to  the  Company’s  external  auditor.  Non-audit services may not be undertaken without an employee of AngloGold Ashanti obtaining the pre-approval of the Audit and Corporate Governance Committee as is laid out in the procedures relating to the pre-approval process. The audit and corporate governance committee has delegated the approval authority to the chairman of the committee, Prof Wiseman Nkuhlu or his designated official. The approval may take the form of a written or oral instruction, and in the case of an oral instruction this would be ratified at the next audit and corporate governance committee meeting. On a  quarterly  basis  a  summary  of  all  approvals  and  work  to  date  is  tabled  at  the  audit  and  corporate  governance committee meeting.
  All  non-audit  services  provided  to  AngloGold  Ashanti  by  the  principal  independent  registered  public  accounting  firm during  2009  were  reviewed  and  approved  according  to  the  procedures  above.    None  of  the  services  provided  during 2009 were approved under the de minimis exception allowed under the Exchange Act. No work was performed by persons other than the principal accountant’s employees in respect of the audit of AngloGold Ashanti’s financial statements for 2009.


ITEM 16D: EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
 Not applicable.
 ITEM 16E: PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
 Neither the issuer nor any affiliate of the issuer purchased any of the company’s shares during 2009.
 ITEM 16F: CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
 Not applicable.


ITEM 16G: CORPORATE GOVERNANCE
 The following is a summary of the significant ways in which AngloGold Ashanti’s corporate governance practices differ from  those  followed  by  US  domestic  companies  under  the  New  York  Stock  Exchange’s  corporate  governance  listing standards (the “NYSE listing standards”).
  The  NYSE  listing  standards  require  the  appointment of a Nominations  Committee  to  oversee  the  appointment of  new directors  to  the  board,  and  that  such  committee  be  comprised  solely  of  independent  directors.    The  JSE  Listing Requirements also require the appointment of such a committee, but require that it be comprised solely of non-executive directors,  the  majority  of  whom  must  be  independent.    The  company  has  appointed  a  Nominations  Committee  of  the board.    The  nominations  committee’s  membership  comprises  only  of  non-executive  board  members,  all  of  whom  are independent, as defined in the JSE Listing Requirements, and is chaired by the independent chairman of the board. The NYSE listing standards require that a majority of the board to be comprised of independent directors, as such term is defined in  the NYSE  listing standards, and that the remunerations committee of the board be fully  independent.   In previous years, AngloGold Ashanti did not comply with these standards as the JSE Listing Requirements did not have similar standards.  However, since May 6, 2008, the board comprises of a majority of independent directors, as defined in the JSE Listing Requirements, and the remuneration committee of the board is fully independent.


PART III
  ITEM 17: FINANCIAL STATEMENTS
 Not applicable.


ITEM 18: FINANCIAL STATEMENTS


Report of Independent Registered Public Accounting Firm
 The board of directors and stockholders of AngloGold Ashanti Limited
 
 We have audited the accompanying consolidated balance sheets of AngloGold Ashanti Limited (the “Company”) as of December 31, 2009 and 2008 and the related consolidated statements of income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2009. These financial statements are the responsibility of the  Company’s management. Our responsibility  is to express an opinion on these financial statements  based on our audits.
 
 The financial  statements  of  Société d'Exploitation  des Mines  d'Or  de  Sadiola  S.A.  (“Sadiola”),  a corporation  in  which the Company has a 41 percent (December 31, 2008: 38 percent) interest, have been audited by other auditors for the year ended December 31, 2008 and for the period then ended, whose report has been furnished to us, and our opinion on the consolidated financial  statements, insofar as it relates to the amounts included for Sadiola, is based solely on the report of the other auditors. In the consolidated financial statements, the Company’s investment in Sadiola is stated at $97 million at December 31, 2008,  and  the Company’s equity  in net loss is stated  at $52 million for  the year  then ended.
 
 The  financial  statements  of  Société  des  Mines  de  Morila  S.A.  (“Morila”),  a  corporation  in  which  the  Company  has  a 40 percent interest, have been audited by other auditors at December 31, 2008 and for the period then ended, whose report has been furnished to us, and our  opinion on the consolidated financial statements, insofar as it  relates to the amounts  included  for  Morila,  is  based  solely  on  the  report  of  the  other  auditors.  In  the  consolidated  financial statements, the Company’s investment in Morila is stated at $114 million at December 31, 2008, and the Company’s equity in net loss is stated at $69 million for the year then ended.
 
 We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial  statements  are  free  of  material  misstatement.  An  audit  includes  examining,  on  a  test  basis,  evidence supporting the  amounts and disclosures in the financial statements. An audit also  includes assessing the accounting principles used and significant estimates made by management, as  well as evaluating the overall  financial statement presentation.  We  believe  that  our  audits  and  the  reports  of  the  other  auditors  provide  a  reasonable  basis  for  our opinion.
 
 In our opinion, based on our audits and the reports of other auditors, the financial statements referred to above present fairly,  in all material respects, the consolidated financial position of AngloGold Ashanti Limited at December 31, 2009 and  2008,  and  the  consolidated  results  of  its  operations  and  its  cash  flows for  each  of  the  three  years  in  the  period ended December 31, 2009 in conformity with U.S generally accepted accounting principles.
 
 We have also audited, in accordance with the standards of the  Public Company Accounting Oversight Board (United States),  the effectiveness  of AngloGold Ashanti  Limited’s internal  control over financial reporting  as of December 31, 2009, based on criteria  established  in Internal Control-Integrated Framework issued by the  Committee of  Sponsoring Organizations  of  the  Treadway  Commission  and  our  report  dated  April  19,  2010  expressed  an  unqualified  opinion thereon.
 
 As discussed in note 2 to the consolidated financial statements, in 2007 the Company adopted the guidance originally issued  in  Financial  Accounting  Standards  Board  (FASB)  Interpretation  No. 48,  Accounting  for  Uncertainty  in  Income Taxes (codified in FASB ASC Topic 740, Income Taxes), and accordingly has evaluated all tax positions and has made sufficient provision and disclosure.
 
 Ernst & Young Inc. Registered Auditor
 
 Johannesburg, Republic of South Africa April 19, 2010


Report of the Independent Registered Public Accounting Firm
 
 To the Members of Société des Mines de Morila S.A. We  have  audited  the  accompanying  balance  sheet  of  Société  des  Mines  de  Morila  S.A.  (the  Company)  as  of December 31, 2008,  and  the  related  statement  of  income,  shareholders’  equity,  and  cash  flows  for  the  year  then ended.  These  financial  statements  are  the  responsibility  of  the  Company’s  management.    Our  responsibility  is  to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial  statements  are  free  of  material  misstatement.    Our  audit  included  consideration  of  internal  control  over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose  of  expressing  an  opinion  on  the  effectiveness  of  the  Company's  internal  control  over  financial  reporting.  Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts  and  disclosures  in  the  financial  statements,  assessing  the  accounting  principles  used  and  significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
  In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Société des Mines de Morila S.A. at December 31, 2008 and the results of its operations and its cash flows for the year then ended, in conformity with International Financial Reporting Standards as issued by the IASB. BDO Stoy Hayward LLP London, England April 22, 2009


Report of Independent Registered Public Accounting Firm The Board of Directors and stockholders of Societe d’Exploitation des Mines d’Or de Sadiola S.A.: We  have  audited  the  accompanying  balance  sheet  of  Societe  d’Exploitation  des  Mines  d’Or  de  Sadiola  S.A.  (the company) as of December 31, 2008, and the related statements of income, changes in stockholders’ equity and cash flows for the year  then ended. These financial  statements are the responsibility  of the  Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial  statements  are  free  of  material  misstatement.  An  audit  includes  examining,  on  a  test  basis,  evidence supporting the  amounts and disclosures in the financial statements. An audit also  includes assessing the accounting principles used and significant estimates made by management, as  well as evaluating  the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Societe d’Exploitation des Mines d’Or de Sadiola S.A. as of December 31, 2008, and the results of its operations and its cash flows for the year ended December 31, 2008 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. KPMG Inc.Registered Auditor  Bloemfontein, South Africa May 4, 2009


ANGLOGOLD ASHANTI LIMITED
 Consolidated statements of income
 FOR THE YEARS ENDED DECEMBER 31, 2009, 2008 and 2007
 (In millions, except share and per share information)
  
  
 
 2009
 2008
 2007
 
   Notes
 $
 $
 $
 
 Sales and other income
 
                    Costs and expenses
 
                                                                                                        Loss from continuing operations before income tax and equity income in affiliates
 
 
                    Net loss from continuing operations
 
             Net loss
 
             Net loss - attributable to AngloGold Ashanti
 
      Net loss - attributable to AngloGold Ashanti
 
      
       
       
      (Loss)/earnings per share attributable to AngloGold Ashanti common stockholders: (cents)
 
                                                                                                            Weighted average number of shares used in computation
 
                          Dividend paid per ordinary share (cents)
 
      Dividend paid per E ordinary share (cents)
 
      The accompanying notes are an integral part of these Consolidated Financial Statements.


ANGLOGOLD ASHANTI LIMITED
 Consolidated balance sheets
 AT DECEMBER 31, 2009 and 2008
 (In millions, except share information)
 
  
      
 
 2009
 
 
 2008
 
      Notes
 
 $
 $
 ASSETS
 
   Current Assets
 
                                                                    Property, plant and equipment, net
 
    Acquired properties, net
 
    Goodwill
 
    Other intangibles, net
 
    Derivatives
 
    Other long-term inventory
 
    Materials on the leach pad
 
    Other long-term assets
 
    Deferred taxation assets
 
    Total assets
 
    LIABILITIES AND EQUITY
 
   Current liabilities
 
                                       Other non-current liabilities
 
    Long-term debt
 
    Derivatives
 
    Deferred taxation liabilities
 
    Provision for environmental rehabilitation
 
    Provision for labor, civil, compensation claims and settlements
 
    Provision for pension and other post-retirement medical benefits
 
    Commitments and contingencies
 
    Equity
 
    Common stock
 
                                          Total liabilities and equity
 
    The accompanying notes are an integral part of these Consolidated Financial Statements.


ANGLOGOLD ASHANTI LIMITED
 Consolidated statements of cash flows
 FOR THE YEARS ENDED DECEMBER 31, 2009, 2008 and 2007
 (In millions)
 
  
       
 
 2009
 2008
 2007
 
       Notes
 
 $
 $
 $
 Net cash provided by operating activities
 
                                                                                                                                                  Net cash used in investing activities
 
                                                                                                                           Net cash generated by financing activities
 
                                                                                       Net increase/(decrease) in cash and cash equivalents
 
     Effect of exchange rate changes on cash
 
     Cash and cash equivalents - January 1,
 
     Cash and cash equivalents - December 31,
 
              The accompanying notes are an integral part of these Consolidated Financial Statements.


F - 4
 
 ANGLOGOLD ASHANTI LIMITED
 Consolidated statements of stockholders’ equity
 FOR THE YEARS ENDED DECEMBER 31, 2009, 2008 and 2007
  
   
 AngloGold Ashanti stockholders
 
     Common
 Common
 stock
 Additional paid
 in capital
 Accumulated other
 comprehensive
 income*
 Accumulated
 deficit
 Other
 reserves
 Noncontrolling
 interests
 Total
 
   stock
 $
 $
 $
 $
 $
 $
 $
 
 Balance - January 1, 2007
                                                                                                                                                                       Balance - December 31, 2007
                                                                                                                                                                                   Balance - December 31, 2008
                                                                                             
            
                                                                                     Balance - December 31, 2009
         *
 The cumulative translation loss included in accumulated other comprehensive income amounted to $765 million (2008: $1,085 million). The translation loss has no tax effect. The cumulative charge, net of deferred taxation of $33 million (2008: $68 million), included in accumulated other comprehensive income in respect of cash flow hedges amounted to $22 million (2008: $112 million). The cumulative gain, net of deferred taxation of $3 million (2008: $1 million), included in accumulated other comprehensive income in respect of available for sale financialassets amounted to $69 million (2008: $15 million loss). The cumulative gain included in accumulated other comprehensive income in respect of the hedge of a net investment in foreign entities amounted to $64 million (2008: $64 million). This gain is offset by $64 million (2008: $64million) arising from translation of net investments in foreign entities.
 
     
 The accompanying notes are an integral part of these Consolidated Financial Statements.


F - 5
 
 ANGLOGOLD ASHANTI LIMITED
 
 Notes to the consolidated financial statements
 
 FOR THE YEARS ENDED DECEMBER 31, 2009, 2008 and 2007
 
  
   NATURE OF OPERATIONS
  
  AngloGold Ashanti Limited (the "Company"), as it conducts business today, was formed on April 26, 2004 following the Business Combination of AngloGold Limited (AngloGold) with Ashanti Goldfields Company Limited (Ashanti).  AngloGold, formerly Vaal Reefs Exploration and Mining Company Limited, was incorporated in South Africa on May 29, 1944 and Ashanti was incorporated in Ghana on August 19, 1974.  The Company conducts gold-mining operations in the following regions: Southern Africa (South Africa and Namibia); Continental Africa (Ghana, Guinea, Mali and Tanzania); Australasia (Australia); North America (United States of America) and South America (Argentina and Brazil).  The Company also produces as by-product: silver, uranium oxide and sulfuric acid.
 
  ACCOUNTING CHANGES
 
  Decreases in ownership of a subsidiary
    In January 2010, the Financial Accounting Standards Board (“FASB”) updated the Accounting Standards Codification(“the Codification” or “ASC”) guidance for decreases in ownership of a subsidiary to include additional disclosuresrequired upon deconsolidation of a subsidiary. The amendments are effective beginning in the first interim or annualreporting period ending on or after December 15, 2009 and should be applied retrospectively to the first period in whichthe guidance on noncontrolling interests is adopted.  The adoption had no impact on the Company’s financialstatements.
 
  The accounting standards codification
    In June 2009, the FASB established the accounting standards codification to become the source of authoritative U.S.GAAP. The codification will supersede all non-SEC accounting and reporting standards. It is effective for interim andannual periods ending after September 15, 2009. The adoption had no impact on the Company’s financial statements,other than the references to authoritative U.S. GAAP.
 
  Subsequent events
    In May 2009, the FASB updated the ASC guidance for subsequent events to establish general standards of accountingfor, and disclosure of, events that occur after the balance sheet date but before financial statements are issued or areavailable to be issued.  In February 2010, the FASB amended the ASC guidance for subsequent events. As a result,SEC registrants will not disclose the date through which management evaluated subsequent events in the financialstatements. This change for SEC registrants is effective immediately. The adoption had no impact on the Company’sfinancial statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 6
 
 
  ACCOUNTING CHANGES (continued)
 
  Recognition and presentation of other-than-temporary impairments
    In April 2009, the FASB updated the ASC guidance for recognition and presentation of other-than-temporaryimpairments which: (i) clarifies the factors that should be considered when determining whether a debt security is otherthan temporarily impaired, (ii) provides guidance on the amount recognized of an other-than-temporary impairment and(iii) expands the disclosures required. It is effective for interim and annual reporting periods ending after June 15, 2009.See Note 16 for additional information.
 
  Interim disclosures about fair value of financial instruments
    In April 2009, the FASB updated the ASC guidance for interim disclosures about fair value of financial instrumentswhich requires disclosures about fair value of financial instruments for interim reporting periods as well as in annualfinancial statements.  It is effective for interim reporting periods ending after June 15, 2009. Except for presentationchanges, the adoption had no impact on the Company’s financial statements.
 
  Assets and liabilities from contingencies in business combinations
    In April 2009, the FASB updated the ASC guidance for accounting for assets acquired and liabilities assumed in abusiness combination that arise from contingencies. The guidance addresses issues raised on initial recognition andmeasurement, subsequent measurement and accounting and disclosure of assets and liabilities arising fromcontingencies in a business combination. It is effective for assets or liabilities arising from contingencies in businesscombinations for which the acquisition date is on or after January 1, 2009. The Company adopted the provisions to beapplied to all future business combinations.
 
  Equity method investment
    In November 2008, The Emerging Issues Task Force (“EITF”) reached consensus on equity method investmentaccounting considerations, which clarifies the accounting for certain transactions and impairment considerationsinvolving equity method investments. It provides guidance on (i) determining the initial carrying value of an equitymethod investment, (ii) performing an impairment assessment of an underlying indefinite-lived intangible asset of anequity method investment, (iii) accounting for an equity method investee’s issuance of shares, and (iv) accounting for achange in an investment from the equity method to the cost method. It is effective for the Company’s fiscal yearbeginning January 1, 2009 and has been applied prospectively. The adoption had no impact on the Company’s financialstatements
 .
  
  Instrument indexed to own stock
    In June 2008, the EITF reached a consensus on determining whether an instrument (or an embedded feature) isindexed to an entity’s own stock. The consensus was reached on the following three issues
 :
    
 
 
    It is effective for the Company’s fiscal year beginning January 1, 2009. The adoption had no impact on the Company’sfinancial statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 7
 
 
  ACCOUNTING CHANGES (continued)
 
  Participating securities
    In June 2008, the FASB updated the ASC guidance for determining whether instruments granted in share-basedpayment transactions are participating securities, which addresses whether instruments granted in share-basedpayment transactions are participating securities prior to vesting and, therefore, need to be included in the earningsallocation in computing earnings per share under the two-class method. Under the guidance unvested share-basedpayment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) areparticipating securities and shall be included in the computation of earnings per share pursuant to the two-class method.It is effective for the Company’s fiscal year beginning January 1, 2009. The adoption of had no impact on theCompany’s financial statements.
 
  Convertible debt instruments
    In May 2008, the FASB updated the ASC guidance for accounting for convertible debt instruments that may be settledin cash upon conversion (including partial cash settlement), which addresses the accounting for convertible debtsecurities that may be settled in cash (or other assets) upon conversion, including partial cash settlement, unless theembedded conversion option is required to be separately accounted for as a derivative. It is effective for the Company’sfiscal year beginning January 1, 2009. The adoption had no impact on the Company’s financial statements.
 
  Useful life of intangible assets
    In April 2008, the FASB updated the ASC guidance for determination of the useful life of intangible assets. Theguidance amends the factors that should be considered in developing renewal or extension assumptions used todetermine the useful life of a recognized intangible asset and remove the requirement to consider whether an intangibleasset can be renewed without substantial cost or material modifications to the existing terms and conditions. Instead, itrequires an entity to consider its own historical experience in renewing similar arrangements. It is effective for theCompany’s fiscal year beginning January 1, 2009 and has been applied prospectively to intangible assets acquired afterthe effective date. The adoption had no impact on the Company’s financial statements.
 
  Derivative instruments
    In March 2008, the FASB updated the ASC guidance for disclosures about derivative instruments and hedgingactivities. The guidance requires entities to provide enhanced disclosures about (i) how and why an entity usesderivative instruments, (ii) how derivative instruments and related hedged items are accounted for, and (iii) howderivative instruments and related hedged items affect an entity’s financial position, results of operations and cashflows. The Company adopted these provisions on January 1, 2009. Except for presentation changes, the adoption hadno impact on the Company’s financial statements. See Note 25 for additional information
 .
  
  Noncontrolling interests
    In December 2007, the FASB updated the ASC guidance for noncontrolling interests in consolidated financialstatements to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for thedeconsolidation of a subsidiary. The guidance clarifies that a noncontrolling interest in a subsidiary is an ownershipinterest in the consolidated entity that should be reported as equity in the consolidated financial statements. TheCompany adopted the provisions on January 1, 2009. Except for presentation changes, the adoption had no impact onthe Company’s financial statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 8
 
 
  ACCOUNTING CHANGES (continued)
 
  Business combinations
    In December 2007, the FASB updated the ASC guidance for business combinations, which requires the acquiring entityin a business combination to recognize all the assets acquired and liabilities assumed in the transaction; establishes theacquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requiresthe acquirer to disclose information on the nature and financial effect of the business combination. The Companyadopted the provisions on January 1, 2009 to be applied to all future business combinations
 .
  
  Post-retirement benefit plan assets
  
  In December 2008, the FASB updated the ASC guidance for employers’ disclosures about post-retirement benefit planassets, which provides guidance on an employer’s disclosures about plan assets of a defined benefit pension or otherpost-retirement plan. It requires more detailed disclosures about employers’ plan assets, including employers’investment strategies, major categories of plan assets, concentrations of risk within plan assets and valuationtechniques used to measure the fair value of plan assets. The Company early adopted the provisions as of December31, 2008.  The adoption did not have a material impact on the Company’s financial statements.
 
  Disclosures about credit derivatives and certain guarantees
  
  In September 2008, the FASB updated the ASC guidance for disclosures about credit derivatives and certainguarantees, which requires disclosures by sellers of credit derivatives, including credit derivatives embedded in a hybridinstrument to provide certain disclosures for each credit derivative for each statement of financial position presented. Italso requires an additional disclosure about the current status of the payment/performance risk of a guarantee.  TheCompany does not have any credit derivatives.  The Company adopted the disclosure requirements with regards toguarantees as of December 31, 2008.
 
  Employee benefit plans
    In September 2006, the FASB updated the ASC guidance for employers’ accounting for defined benefit pension andother post-retirement plans. The adoption of its requirement to measure the plan assets and benefit obligations as ofDecember 31, 2008 did not have a material impact on the Company’s financial statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 9
 
 
  ACCOUNTING CHANGES (continued)
 
  Fair value measurements
  
  The Company adopted the FASB ASC guidance for fair value measurements for financial assets and financial liabilitieson January 1, 2008.
    It provided enhanced guidance for using fair value to measure assets and liabilities. Fair value refers to the price thatwould be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants inthe market in which the reporting entity transacts.  It clarifies the principle that fair value should be based on theassumptions market participants would use when pricing the asset or liability and establishes a fair value hierarchy thatprioritizes the information used to develop those assumptions. It also requires that fair value measurements beseparately disclosed by level within the fair value hierarchy.  Refer to Note 24.
    In February 2008, the FASB issued an update to the ASC guidance which provided a one year deferral until January 1,2009 for certain non-financial assets and non-financial liabilities, except for those items that are recognized or disclosedat fair value on a recurring basis (at least annually). The Company adopted the provisions on January 1, 2009.
    In October 2008, the ASC guidance was updated for determining the fair value of a financial asset when the market forthat asset is not active.  The intent of this update was to provide guidance on how the fair value of a financial asset is tobe determined when the market for that financial asset is not active. It is effective as of the issuance date and has notaffected the valuation of the Company’s financial assets.
    In April 2009, the ASC guidance was updated for determining fair value when the volume and level of activity for theasset or liability have significantly decreased and identifying circumstances that indicate when a transaction is notorderly. It provides additional guidance for estimating fair value when the volume and level of activity have significantlydecreased. It also includes guidance on identifying circumstances that indicate a transaction is not orderly. It is effectivefor interim and annual reporting periods ending after June 15, 2009, and is applied prospectively. The adoption had noimpact on the Company’s financial statements.
    In August 2009, the ASC guidance was updated to clarify how entities should estimate the fair value of liabilities. Itprovides clarification for circumstances in which: (i) a quoted price in an active market for the identical liability is notavailable, (ii) the liability has a restriction that prevents its transfer, and (iii) the identical liability is traded as an asset inan active market in which no adjustments to the quoted price of an asset are required. The amended guidance onmeasuring liabilities at fair value is effective for the first interim or annual reporting period beginning after August 28,2009. The adoption had no impact on the Company’s financial statements.
 
  Uncertain taxes
  
  The Company adopted the FASB ASC guidance for accounting for uncertainty in income taxes on January 1, 2007 andrecorded an opening adjustment of $25 million against opening accumulated deficit on adoption.  The guidanceprescribes a comprehensive model for the financial statement recognition, measurement presentation and disclosure oftax positions taken or expected to be taken in income tax returns. It also provides guidance on derecognition andclassification and recognition of interest and penalties.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 10
 
  ACQUISITIONS AND DISPOSALS OF BUSINESSES AND ASSETS
  
  2009 acquisitionsThe Company made the following acquisitions during the year:
  
  Acquisition of an effective 45 percent interest in the Kibali gold project
 With effect from December 22, 2009, AngloGold Ashanti and Randgold Resources Limited (“Randgold”) each hold an effective 45 percent interest in the Kibali gold project (formerly the Moto gold project), while L’Office des Mines d’Or de Kilo-Moto (“OKIMO”), a Congolese parastatal, holds the remaining 10 percent stake, thereby maintaining the continued vested interest of the Government of the Democratic Republic of the Congo (“the DRC”) in the Kibali gold project.  The purchase price for the acquisition of AngloGold Ashanti’s initial interest of 35 percent in the Kibali gold project was funded by an offering of 7,624,162 ordinary shares at an issue price of $37.25 per ADS (or R288.32 per ordinary share) which represented an approximate 3 percent discount to the closing price of its ADS on the NYSE on August 31, 2009.  The offering closed on September 8, 2009 and AngloGold Ashanti received total gross proceeds, before underwriting discounts and expenses, of approximately $284 million. Total consideration for the effective 45 percent interest acquired in the Kibali gold project amounted to $345 million.
  
  Acquisition of an additional interest in Sadiola
 On December 29, 2009, AngloGold Ashanti, together with IAMGOLD Corporation purchased from the International Finance Corporation (“IFC”), the IFC’s 6 percent stake in Société d’Exploitation des Mines d’or de Sadiola (“SEMOS”), which owns the Sadiola Gold Mine for $12 million (AngloGold Ashanti’s share being $6 million) to be followed by contingent payments not exceeding $3 million (of which AngloGold Ashanti’s share is $1.5 million). This transaction has resulted in AngloGold Ashanti and IAMGOLD each increasing their respective interest in Sadiola from 38 percent to 41 percent. In addition, AngloGold Ashanti and IAMGOLD have extended an offer to the Government of the Republic of Mali to take up its proportionate entitlement of 19.15 percent of the 6 percent sale interest, by acquiring an equal 0.574 percent interest in SEMOS from each. TheGovernment of the Republic of Mali has advised the parties that they expect to confirm their intention by the end of June 2010.
  
  2009 disposalsThe Company’s disposals during the year included:
  
  Disposal of Boddington Gold Mine
 On January 28, 2009, AngloGold Ashanti announced that it had agreed to sell its 33.33 percent interest in the Boddington Gold Mine to Newmont Mining Corporation (“Newmont”).  The transaction was completed on June 26, 2009.  In terms of the agreement, the Company received payment of $750 million in cash during June 2009 and a further $240 million in December 2009. In addition, the Company is entitled to receive a royalty on any gold recovered or produced by the Boddington Gold Mine, where the gold price is in excess of Boddington Gold Mine’s cash costs plus $600 per ounce.  The royalty commences on July 1, 2010 and is capped at a total amount of $100 million. All refunds and reimbursements between the Company and Newmont have been settled.
  
  Disposal of Tau Lekoa
 On February 17, 2009, AngloGold Ashanti announced that it had agreed to sell with effect from January 1, 2010, the Tau Lekoa mine, together with the adjacent Weltevreden, Jonkerskraal and Goedgenoeg project areas, to Simmer & Jack Mines Limited (“Simmers”). On November 25, 2009, AngloGold Ashanti announced that the closing of the sale may be delayed pending approval of the South African Department of Mineral Resources (“DMR”), of the transfer of the applicable mining rights, the only remaining condition to the sale. AngloGold Ashanti and Simmers have subsequently agreed to extend the deadline for the completion of the transaction from March 31, 2010 to September 30, 2010, to allow for a further possible delay in closing pending the approval of the DMR. Closing of the transaction is anticipated to occur before September 30, 2010.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 11
 
 
  ACQUISITIONS AND DISPOSALS OF BUSINESSES AND ASSETS (continued)
  
  2008 acquisitionsThe Company made the following acquisitions during the year:
  
  Acquisition of noncontrolling interests in North America
 Effective July 1, 2008, AngloGold Ashanti acquired the remaining 33 percent shareholding in the Cripple Creek & Victor Gold Mining Company joint venture (“CC&V”) through the acquisition of 100 percent of Golden Cycle Gold Corporation (“GCGC”). The Company issued 3,181,198 AngloGold Ashanti shares (total value $118 million) pursuant to this transaction. The Company completed the purchase price allocation of fixed assets during the third quarter of 2008. The transaction was accounted for as a purchase business combination whereby identifiable assets acquired and liabilities assumed were recorded at their fair market values as of the date of acquisition. The excess of the purchase price over such fair value was recorded as goodwill and as such, the acquisition resulted in goodwill of $18 million being recorded, relating mainly to the premium paid to obtain the remaining interest in CC&V.  The goodwill related to the acquisition is non-deductible for tax purposes.
  
  Acquisition of São Bento mine
 On December 15, 2008, AngloGold Ashanti announced that it had completed the purchase of São Bento Gold Company Limited (“SBG”) and its wholly-owned subsidiary, São Bento Mineração S.A. (“SBMSA”) from Eldorado Gold Corporation (“Eldorado”) for a consideration of $70 million through the issuance of 2,701,660 AngloGold Ashanti shares.  The transaction was accounted for as an asset acquisition.  The purchase price was allocated to the underlying assets acquired.  The purchase of SBG and SBMSA gave AngloGold Ashanti access to the São Bento mine, a gold operation situated in the immediate vicinity of AngloGold Ashanti's Córrego do Sítio mine, located in the municipality of Santa Bárbara, Iron Quadrangle region of Minas Gerais State, Brazil.
  
  2008 disposalsThe Company’s disposals during the year included:
  
  Disposal of exploration interests in Colombia
 On February 14, 2008, AngloGold Ashanti announced that it had entered into a binding memorandum of agreement (“MOA”) with B2Gold Corp. (“B2Gold”). B2Gold would acquire from AngloGold Ashanti, additional interests in certain mineral properties in Colombia. In exchange, B2Gold would issue to AngloGold Ashanti, 25 million common shares and 21.4 million common share purchase warrants in B2Gold. On May 16, 2008, AngloGold Ashanti announced that it had completed the transaction to acquire a 15.9 percent direct interest in B2Gold and increase B2Gold's interest in certain Colombian properties, as stated.
  
  Disposal of equity interest in Nufcor International Limited
 During the quarter ended June 30, 2008, the Company disposed of its 50 percent interest held in Nufcor International Limited, a London based uranium marketing, trading and advisory business, to Constellation Energy Commodities Group for net proceeds of $48 million.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 12
 
 
  ACQUISITIONS AND DISPOSALS OF BUSINESSES AND ASSETS (continued)
  
  2007 acquisitionsThe Company made the following acquisitions during the year:
  
  Strategic alliance in Russia with Polymetal and assets acquired from Trans-Siberian Gold plc
 During 2006, AngloGold Ashanti entered into a 50:50 strategic alliance (joint venture) with Russian gold and silver producer, OAO Inter-Regional Research and Production Association Polymetal (“Polymetal”). In June 2007, the Company concluded the purchase of Trans-Siberian Gold plc (“TSG”)’s interests in its Krasnoyarsk based subsidiaries, OOO GRK Amikan (“Amikan”) and OOO Artel Staratelei Angarskaya Proizvodstvennaya Kompania (“AS APK”) for a consideration of $40 million. The companies acquired from TSG by AngloGold Ashanti, together with two greenfields exploration companies held by Polymetal, hold the initial operating assets of the joint venture. Of the assets acquired from TSG, assets of $15 million were subsequently sold by the joint venture during the quarter ended March 31, 2008.
  
  Acquisition of noncontrolling interests in Ghana
 AngloGold Ashanti completed the acquisition of the noncontrolling interests in the Iduapriem and Teberebie mine previously held by the Government of Ghana (5 percent) and the International Finance Corporation (10 percent) effective September 1, 2007 for a total cash consideration of $25 million. The Company finalized the purchase price allocation of fixed assets during the third quarter of 2008. The final purchase price allocation did not vary significantly from the preliminary allocation.
  
  2007 disposalsThe Company’s disposals during the year included:
  
  Sale of Ergo surface reclamation operation
 On June 8, 2007, AngloGold Ashanti announced that it had sold, subject to certain conditions, most of the remaining moveable and immovable assets of Ergo, the surface reclamation operation east of Johannesburg, discontinued in March 2005, to a consortium of Mintails South Africa (Pty) Limited/DRD South African Operations (Pty) Limited.  The transaction was approved by the Competition Commissioner on May 5, 2008.
  
  Sale of Mwana Africa plc shares
 During July 2007, AngloGold Ashanti disposed of its investment of 600,000 shares previously held in Mwana Africa plc for $0.8 million.
 
 
 
 
 Fair value of acquisition of business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 2008
 
 
 
 
 
 
 
 
 Golden Cycle
 
 
 
 
 
 
 
 
 acquisition
 (1)
 
 
 
 
 
 
 
 
 $
 
 
 
 Property, plant and equipment
 
 
 
 
 93
 
 
 
 Goodwill
 (1)
 
 
 
 18
 
 
 
 Current assets
 
 
 
 
 7
 
 
 
 Net value of assets acquired
 
 
 
 
 118
 
 
 
 Purchase price paid
 
 
 
 
 (118)
 
 
 
 -     Issuance of common stock
 
 
 
 
 (118)
 
 
 
 Gross value
 
 
 
 
 (118)
 
 
 
 Share issue expenses
 
 
 
 
 -
 
 
 
 
 
 
 
 (1)
 
 
 
 
 
 
 The Golden Cycle Gold Corporation business combination was completed effective July 1, 2008.  Refer to: "Acquisition of noncontrolling interests in North America". The Company recorded goodwill, relating to the portion of the purchase price which cannot be attributed to the fair value of assets and liabilities acquired, of $18 million on acquisition.
 
 
 The Golden Cycle Gold Corporation business combination was completed effective July 1, 2008.  Refer to: "Acquisition of noncontrolling interests in North America". The Company recorded goodwill, relating to the portion of the purchase price which cannot be attributed to the fair value of assets and liabilities acquired, of $18 million on acquisition.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 13
 
  SIGNIFICANT ACCOUNTING POLICIES
 
 
  Basis of presentation
  statements in United States dollars.  The functional currency of a significant portion of the group’s operations is theSouth African rand.  Other main subsidiaries have functional currencies of US dollars and Australian dollars.  The
  
 
  Use of estimates: The preparation of the financial statements requires the Company’s management to make estimatesand assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
 liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during thereporting period. The determination of estimates requires the exercise of judgment based on various assumptions and
    
 
  The more significant areas requiring the use of management estimates and assumptions include mineral reserves thatare the basis of future cash flow estimates and unit-of-production depreciation, depletion and amortization calculations;
  pads; asset impairments (including impairments of goodwill, long-lived assets, and investments); write-downs ofinventory to net realizable value; post employment, post retirement and other employee benefit liabilities; valuation
 allowances for deferred taxation assets; reserves for contingencies and litigation; and the fair value and accountingtreatment of financial instruments.
    Comparatives
    benefits to Other current liabilities. The change was made to conform to the presentation in the consolidated balancesheet as of December 31, 2009.
 
 
 
  
 
 
 
   Consolidation
     classified as a subsidiary.  Interests in incorporated mining joint ventures in which the Company has joint control are accounted for by the equity method.
 
 
 
        
 
 
   Subsidiaries are consolidated from the date on which control is transferred. They are de-consolidated from the date on which control ceases.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 14
 
 
  SIGNIFICANT ACCOUNTING POLICIES (continued)
 
   Investments in equity investees (associates and incorporated joint ventures)
   An associate is an entity other than a subsidiary in which the Company has a material long-term interest and in respect of which the Company has the ability to exercise significant influence over operational and financial policies, normally owning between 20 percent and 50 percent of the voting equity.
      A joint venture is an entity in which the Company holds a long-term interest and which is jointly controlled by the Company and one or more external joint venture partners under a contractual arrangement that provides for strategic, financial and operating policy decisions relating to the activities requiring unanimous consent.
            Goodwill relating to associates and incorporated joint ventures is included in the carrying value of the Company’s investment. The total carrying value of equity accounted investments in associates and incorporated joint ventures, including goodwill, is evaluated for impairment when conditions indicate that a decline in fair value below the carrying amount is other than temporary or at least annually. When an indicated impairment exists, the carrying value of the Company’s investment in those entities is written down to its fair value. The Company’s share of results of equity accounted investees, that have financial years within three months of the fiscal year-end of the Company, is included in the consolidated financial statements based on the results reported by those investees for their financial years. There were no significant adjustments required to be made in respect of equity accounted investees which have financial years that are different to those of the Company.
      Profits realized in connection with transactions between the Company and associated companies are eliminated in proportion to ownership.
   
   Foreign currency translation
   Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (the ‘functional currency’).
   
   Transactions and balancesTransactions in foreign currencies are converted at the rates of exchange ruling at the date of these transactions. Monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange ruling at balance sheet date.  Non-monetary items are translated at historic rates.  Gains, losses and costs associated with foreign currency transactions are recognized in the income statement in the period to which they relate, except where hedge accounting is applied. These transactions are included in the determination of other income.
   
   Group companiesThe results and financial position of all group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
   
        income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and
  all resulting exchange differences are recognized as a separate component of equity and included within accumulated other comprehensive income.
   
   Exchange differences arising from the translation of the net investment in foreign operations, and of borrowings and other currency instruments designated as hedges of such investments, are taken to stockholders’ equity on consolidation.
   
   When a foreign operation is sold, cumulative exchange differences are recognized in the income statement as part of the gain or loss on sale.
   
   Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate at each balance sheet date.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 15
 
 
  SIGNIFICANT ACCOUNTING POLICIES (continued)
 
   Segment reporting
   A segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other segments and are reported on a reporting segment basis using the management approach. This approach is based on the way management organizes segments within the Company for making operating decisions and assessing performance. The Chief Operating Decision Maker has determined that the Company operates primarily in the delivery of gold.
      Cash and cash equivalents and restricted cash
   Cash and cash equivalents consist of cash balances and highly liquid investments with an original maturity of three months or less. Due to the short maturity of cash equivalents, their carrying amounts approximate their fair value.  Restricted cash is reported separately in the consolidated balance sheets.
   
   Non-marketable debt securities
   Investments in non-marketable debt securities, for which the Company does not control or exercise significant influence, are classified as held to maturity are subsequently measured at amortized cost.  If there is evidence that held to maturity financial assets are impaired the carrying amount is reduced and the loss recognized in the income statement.
      Marketable equity investments and debt securities
   Marketable equity investments and debt securities which are considered available-for-sale, are carried at fair value, and the net unrealized gains and losses computed in marking these securities to market are reported within accumulated other comprehensive income in the period in which they arise.  These amounts are removed from accumulated other comprehensive income and reported in income when the asset is derecognized or when there is evidence that the asset is impaired in accordance with the FASB ASC guidance on accounting for certain investments in debt and equity securities. AngloGold Ashanti considers several factors in determining other-than-temporary impairment losses: including the current and expected long-term business prospects of the issuer; the length of time and relative magnitude of the price decline and its ability and intent to hold the investment until the price recovers.
 
       Inventories
   Inventories, including gold in process, gold on hand (doré/bullion), uranium oxide, sulfuric acid, ore stockpiles and supplies, are stated at the lower of cost or market value. Gold in process is valued at the average total production cost at the relevant stage of production as described below. The cost of gold, uranium oxide and sulfuric acid is determined principally by the weighted average cost method using related production costs.
      Ore stockpiles are valued at the average moving cost of mining the ore.  Supplies are valued at the lower of weighted average cost or market value.  Heap leach pad materials are measured on an average total production cost basis.
      The cost of inventory is determined using the full absorption costing method. Gold in process and ore stockpile inventory include all costs attributable to the stage of completion. Costs capitalized to inventory include amortization of property, plant and equipment and capitalized mining costs, direct and indirect materials, direct labor, shaft overhead expenses, repairs and maintenance, utilities, metallurgy costs, attributable production taxes and royalties, and directly attributable mine costs. Gold on hand (doré/bullion) includes all gold in process and refining costs. Ore is recorded in inventory when blasted underground, or when placed on surface stockpiles in the case of open-pit operations.
      The costs of materials currently contained on the leach pad are reported as a separate line item.  As at December 31, 2009 and 2008, $40 million and $49 million, respectively, was classified as short-term as the Company expects the related gold to be recovered within twelve months.  The short-term portion of materials on the leach pad is determined by multiplying the average cost per ounce in inventory by the expected production ounces for the next twelve months.  Heap leach pad inventory occurs in two forms: (1) gold recoverable but yet to be dissolved (i.e. gold still in the ore), and (2) gold recoverable from gold dissolved in solution within the leach pad (i.e. pore water).  This estimate was used in determining the short-term portion of materials  on  the  leach  pad  as  at  December 31, 2009.  As at  December 31, 2009,  $324 million  was  classified as long-term compared with $261 million as at December 31, 2008.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 16
 
 
  SIGNIFICANT ACCOUNTING POLICIES (continued)
 
   Development costs and stripping costs
   Development costs relating to major programs at existing mines are capitalized. Development costs consist primarily of expenditures to initially establish a mine and to expand the capacity of operating mines.
      Post production stripping costs are considered costs of the extracted minerals under a full absorption costing system and recognized as a component of inventory to be recognized in cost of sales in the same period as the revenue from the sale of the inventory.  Additionally, capitalization of such costs only occurs to the extent inventory exists at the end of a reporting period.
            Depreciation, depletion and amortization
   Mine development costs, mine plant facilities and other fixed assetsMine development costs, mine plant facilities and other fixed assets are recorded at cost less accumulated amortization and impairments. Cost includes pre-production expenditure incurred during the development of a mine and the present value of future decommissioning costs.
      Capitalized mine development costs include expenditure incurred to develop new orebodies, to define further mineralization in existing orebodies and to expand the capacity of a mine. Where funds have been borrowed specifically to finance a project, the amount of interest capitalized represents the actual borrowing costs incurred.
      Depreciation, depletion and amortization of mine development costs are computed principally by the units-of-production method based on estimated proven and probable mineral reserves.  Proven and probable mineral reserves reflect estimated quantities of economically recoverable reserves which can be recovered in the future from known mineral deposits.
      Mine plant facilities are amortized using the lesser of their useful life or units-of-production method based on estimated proven and probable mineral reserves.  Main shafts are depleted using total proven and probable reserves as the shaft will be used over the life of the mine. Other infrastructure costs including ramps, stopes, laterals, etc. and ore reserve development are depleted using proven and probable reserves applicable to that specific area.  When an area is vacated and there is no longer an intention to mine due to a change in mine plans, all costs that have not been depleted are written off.
      Other fixed assets comprising vehicles and computer equipment, are depreciated by the straight-line method over their estimated useful lives as follows:
          Acquired propertiesAcquired properties are carried at amortized cost.  Purchased undeveloped mineral interests are acquired mineral rights and are recorded as tangible assets as part of acquired properties.  The amount capitalized related to a mineral interest represents its fair value at the time it was acquired, either as an individual asset purchase or as a part of a business combination.  “Brownfield” stage mineral interests represent interests in properties that are believed to potentially contain other mineralized material, such as measured, indicated or inferred mineral resources with insufficient drill spacing to qualify as proven and probable mineral reserves, that is in proximity to proven and probable mineral reserves and within an immediate mine structure.  “Greenfield” stage mineral interests represent interests in properties that are other mine-related or greenfields exploration potential that are not part of measured or indicated resources and are comprised mainly of material outside of a mine’s infrastructure.  The Company’s mineral rights are enforceable regardless of whether proven and probable mineral reserves have been established.  The Company has the ability and intent to renew mineral rights where the existing term is not sufficient to recover all identified and valued proven and probable mineral reserves and/or undeveloped mineral interests.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 17
 
 
  SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 
 
 
   Depreciation, depletion and amortization (continued)
   Brownfield properties are carried at acquired costs until such time as a mineral interest enters the production stage and are amortized using the unit-of-production method based on estimated proven and probable mineral reserves.
      Greenfield mineral interests are carried at acquired costs until such time as a mineral interest enters the production stage and are amortized using the unit-of-production method based on estimated proven and probable mineral reserves.
      Both Brownfield properties and Greenfield mineral interests are evaluated for impairment as held-for-use assets in accordance with the Company’s asset impairment accounting policy. See Note 4.13.
   
   Other mining costs
   Other mining costs including repair and maintenance costs incurred in connection with major maintenance activities are charged to operations as incurred.
     Goodwill
   Where an investment in a subsidiary, joint venture or an associate is made, any excess of the purchase price over the fair value of the attributable mineral reserves including value beyond proven and probable, acquired properties and other net assets is recognized as goodwill.
      Goodwill relating to subsidiaries is tested for impairment at least annually or when indicators of impairment exist and is carried at cost less accumulated impairment losses.
      Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to reporting units for the purpose of impairment testing.
      Goodwill relating to incorporated joint ventures and associates is included within the carrying value of the investment in incorporated joint ventures and associates and tested for impairment when indicators exist.  See Note 4.2.
      The allocation of goodwill to an individual operating mine will result in an eventual goodwill impairment due to the wasting nature of the mine reporting unit. The Company performs its annual impairment review of assigned goodwill during the fourth quarter of each year.
   
   Asset impairment
   The Company evaluates its held-for-use long lived assets for impairment when events or changes in circumstances indicate that the related carrying amount may not be recoverable. If the sum of estimated future cash flows on an undiscounted basis is less than the carrying amount of the related asset, including goodwill, if any, an asset impairment is considered to exist. The related impairment loss is measured by comparing estimated future cash flows on a discounted basis to the carrying amount of the asset. Management’s estimate of future cash flows is subject to risk and uncertainties. It is therefore reasonably possible that changes could occur which may affect the recoverability of the group’s mining assets. The Company records a reduction of a group of assets to fair value as a charge to earnings if expected future cash flows are less than the carrying amount. The Company estimates fair value by discounting the expected future cash flows using a discount factor that is commensurate with the risks involved, considering the term of the expected cash flows and any asset specific and country risks. In addition, an asset impairment is considered to exist where the fair value less costs to sell of an asset held for sale is below its carrying amount.
      Borrowing costs
   Interest on borrowings relating to the financing of major capital projects under construction is capitalized during the construction phase as part of the cost of the project. Such borrowing costs are capitalized over the period during which the asset is being acquired or constructed and borrowings have been incurred. Capitalization ceases when construction is interrupted for an extended period or when the asset is substantially complete. Other borrowing costs are expensed as incurred.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 18
 
 
  SIGNIFICANT ACCOUNTING POLICIES (continued)
 
   Leased assets
   Assets subject to finance leases are capitalized at the lower of fair value or present value of minimum lease payments with the related lease obligation recognized at the same amount. Capitalized leased assets are depreciated over the shorter of their estimated useful lives and the lease term. Finance lease payments are allocated using the effective interest rate method, between the lease finance cost, which is included in finance costs, and the capital repayment, which reduces the liability to the lessor.
 
 
 
   Operating lease rentals are charged against operating profits in a systematic manner related to the period the assets concerned will be used.
 
 
 
   Provisions
   Provisions are recognized when the Company has a present obligation, whether legal or constructive, as a result of a past event for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
 
 
 
   Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the balance sheet date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability.
 
 
 
   Taxation
   Current and deferred taxation is recognized as income or expense and included in the profit or loss for the period, except to the extent that the tax arises from a transaction or event which is recognized, in the same or a different period directly in equity; or a business combination that is an acquisition.  See Note 4.22.
 
 
 
    
 
 
   The Company’s operation involves dealing with uncertainties and judgments in the application of complex tax regulations in multiple jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities and resolution of disputes arising from federal, state, and international tax audits. A tax position is recognized in the financial statements when it is ‘more-likely-than-not’ that the tax position will be sustained upon examination by the relevant taxing authority based on the technical merits. The Company recognizes tax liabilities for anticipated tax audit issues in tax jurisdictions based on its estimate of whether, and the extent to which, additional taxes will be due.  The Company recognizes interest and penalties, if any, in the income statement as part of income tax expense.
 
 
 
   Asset retirement obligations and rehabilitation costs
   The Company accounts for asset retirement obligations (“AROs”) in accordance with the FASB ASC guidance on accounting for asset retirement obligations.
 
 
 
   AROs also referred to as decommissioning costs, arise from the acquisition, development, construction and operation of mining property, plant and equipment, due to government controls and regulations that protect the environment on the closure and reclamation of mining properties.  The fair value of a liability for an asset retirement obligation is recorded in the period in which it is incurred. When the liability is initially recorded, the cost is capitalized by increasing the carrying amount of the related long-lived asset. Over time, the liability is increased to reflect an interest element (accretion) considered in its initial measurement at fair value, and the capitalized cost is amortized over the useful life of the related asset.  Where the obligation arises from activities that are operational in nature and does not give rise to future economic benefit, the capitalized cost is amortized in the period incurred.  Upon settlement of the liability, a gain or loss will be recorded if the actual cost incurred is different from the liability recorded.
 
 
 
   Rehabilitation costs and related liabilities are based on the Company’s interpretation of current environmental and regulatory requirements.
 
 
 
   Based on current environmental regulations and known rehabilitation requirements, management has included its best estimate of these obligations in its rehabilitation accrual. However, it is reasonably possible that the Company’s estimates of its ultimate rehabilitation liabilities could change as a result of changes in regulations or cost estimates.
 
 
 
   Environmental liabilities other than rehabilitation costs which relate to liabilities from specific events are accrued when they are known, probable and reasonably estimable.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 19
 
 
  SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 
 
 
   Product sales
                       Financial instruments
   Financial instruments recognized on the balance sheet include investments, loans receivable, trade and other receivables, cash and cash equivalents, borrowings, derivatives, and trade and other payables.  Financial instruments are initially measured at cost, including transaction costs, when the Company becomes a party to the contractual arrangements.  Subsequent measurement of derivative instruments is dealt with below.
      DerivativesThe Company accounts for derivative contracts in accordance with the FASB ASC guidance on accounting for derivative instruments and hedging activities, which requires all contracts that meet the definition of a derivative to be recognized on the balance sheet as either assets or liabilities and recorded at fair value. Gains or losses arising from remeasuring derivatives to fair value at each reporting period are accounted for either in the income statement or in accumulated other comprehensive income, depending on the use and designation of the derivative and whether it qualifies for hedge accounting. The key criterion which must be met in order to qualify for hedge accounting, is that the derivative must be highly effective in offsetting the change in the fair value or cash flows of the hedged item.
   
   Contracts that meet the criteria for hedge accounting are designated as the hedging instruments hedging the variability of forecasted cash flows from capitalized expenditure and the sale of production into the spot market, and are classified as cash flow hedges.  Where a derivative qualifies as the hedging instrument in a cash flow hedge, changes in fair value of the hedging instruments, to the extent effective, are deferred in accumulated other comprehensive income and reclassified to earnings as product sales or as an adjustment to depreciation expense pertaining to capital expenditure, when the hedged transaction occurs.  The ineffective portion of changes in fair value of the cash flow hedging instruments is reported in earnings as gains or losses on non-hedge derivatives in the period in which they occur.
   
   All other contracts not meeting the criteria for the normal purchases and sales exemption or hedge accounting are recorded at their fair market value, with changes in value at each reporting period recorded in earnings as gains or losses on non-hedge derivatives.
   
   Cash flows from derivative instruments accounted for as cash flow hedges and non-hedge derivatives are included in net cash provided by operating activities in the statements of consolidated cash flows.  Contracts that contain ‘off-market’ terms that result in the inflow of cash at inception are analogous to borrowing activities and, as such, are treated as financing activities.  All current and future cash flows associated with such instruments are classified as financing activities within the consolidated cash flow statement.  Contracts that contain ‘off-market’ terms that result in the outflow of cash at inception are analogous to lending activities and, as such, are treated as investing activities.  All current and future cash flows associated with such instruments are classified within the investing activities of the consolidated statement of cash flows.
   
   The estimated fair values of derivatives are determined at discrete points in time based on relevant market information.  These estimates are calculated with reference to the market rates using industry standard valuation techniques.
   
   Certain derivative instruments are designated as hedges of foreign currency denominated borrowings and investments in foreign entities.  This designation is reviewed at least quarterly, or as borrowing and investment levels change.  The hedge amounts (to the extent effective) are recorded as an offset to the translation gains/losses being hedged.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 20
 
 
  SIGNIFICANT ACCOUNTING POLICIES (continued)
 
   Employee  benefits
    Pension obligationsGroup companies operate various pension schemes. The schemes are funded through payments to insurance companies or trustee administered funds, determined by annual actuarial calculations. The Company has both defined benefit and defined contribution plans.
      The current service cost in respect of defined benefit plans is recognized as an expense in the current year. Past service costs, experience adjustments, the effect of changes in actuarial assumptions and the effects of plan amendments in respect of existing employees are recognized as an expense or income as and when they arise.  This method is applied consistently in each period end to all gains and losses.
      The asset/liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets.  The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method.
      The contributions on defined contribution plans are recognized as employee benefit expense when due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available.
      Other post-employment benefit obligationsSome group companies provide post-retirement healthcare benefits. The expected costs of these benefits are accrued over the period of employment using an accounting methodology on the same basis as that used for defined benefit pension plans. These obligations are valued annually by independent qualified actuaries. Actuarial gains and losses arising in the plan are recognized as income or expense as and when they arise.
      Termination benefitsThe Company recognizes termination benefits when it is demonstrably committed to either: terminating the employment of current employees according to a detailed formal plan; or providing termination benefits as a result of an offer made to encourage voluntary redundancy based on the number of employees expected to accept the offer. Benefits falling due more than twelve months after balance sheet date are discounted to present value.
      Deferred taxation
   The Company follows the liability method of accounting for deferred taxation whereby the Company recognizes the tax consequences of temporary differences by applying enacted tax rates applicable to future years to differences between financial statement amounts and the tax bases of certain assets and liabilities. Changes in deferred taxation assets and liabilities include the impact of any tax rate changes enacted during the year. Principal temporary differences arise from depreciation on property, plant and equipment, derivatives, provisions and tax losses carried forward.  A valuation allowance is recorded to reduce the carrying amounts of deferred taxation assets if it is more likely than not that such assets will not be realized.
     Dividends paid
   Dividends are recognized when declared by the board of directors.  Dividends may be payable in Australian dollars, South African rands, United Kingdom pounds or Ghanaian cedis.  Dividends declared to foreign stockholders are not subject to approval by the South African Reserve Bank in terms of South African foreign exchange control regulations.  Dividends are freely transferable to foreign stockholders from both trading and non-trading profits earned in South Africa by publicly listed companies.  Under South African law, the Company may declare and pay dividends from any reserves included in total shareholders’ equity (including share capital and premium) calculated in accordance with International Financial Reporting Standards (IFRS), subject to its solvency and liquidity.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 21
 
 
  SIGNIFICANT ACCOUNTING POLICIES (continued)
 
   Earnings per share
   Earnings and diluted earnings per share have been calculated, for each class of common stock outstanding, in accordance with the FASB ASC guidance on earnings per share, using the two class method which requires that basic net income (loss) per share is computed using the weighted average number of shares outstanding during the period.  Diluted net income (loss) per share is computed using the weighted average number of Ordinary shares and, if dilutive, potential common shares outstanding during the period.  The computation of the diluted income (loss) per share of Ordinary shares assumes the conversion of E Ordinary shares.
      The rights, including the liquidation, voting and dividend rights, of holders of Ordinary shares and E Ordinary shares are identical.  As a result, the undistributed earnings for each year are allocated based on the contractual participation rights of the Ordinary and E Ordinary shares as if the earnings for the year had been distributed.  As only 50 percent of dividends are paid to E ordinary share holders in cash (the remaining 50 percent reduces the exercise price of the E ordinary shares), the undistributed earnings are allocated between E ordinary shares and ordinary shares based on this proportionate basis.  Further, as the Company assumes the conversion of E Ordinary shares in the computation of the diluted net income (loss) per share of Ordinary shares, the undistributed earnings are equal to net income (loss) for the computation.
      Exploration and evaluation costs
   The Company expenses all exploration costs until the directors conclude that a future economic benefit is more likely than not of being realized.  In evaluating if expenditures meet this criterion to be capitalized, the directors utilize several different sources of information depending on the level of exploration.  While the criteria for concluding that expenditure should be capitalized is always probable, the information that the directors use to make that determination depends on the level of exploration.
       Costs on greenfields sites, being those where the Company does not have any mineral deposits which are already being mined or developed, are expensed as incurred until the directors are able to demonstrate that future economic benefits are probable, which generally will be the establishment of proven and probable reserves at this location.
       Costs on brownfields sites, being those adjacent to mineral deposits which are already being mined or developed, are expensed as incurred until the directors are able to demonstrate that future economic benefits are probable, which generally will be the establishment of increased proven and probable reserves after which the expenditure is capitalized as a mine development cost.
       Costs relating to extensions of mineral deposits, which are already being mined or developed, including expenditure on the definition of mineralization of such mineral deposits, are capitalized as mine development costs.
            Drilling and related costs incurred on sites without an existing mine and on areas outside the boundary of a known mineral deposit that contain proven and probable reserves are recorded as exploration expenditures and are expensed as incurred.
      Drilling and related costs incurred to define and delineate a residual mineral deposit that has not been classified as proven and probable reserves at a development stage or production stage mine are capitalized when management determines that there is sufficient evidence that the expenditure will result in a future economic benefit to the Company in the accounting period when the expenditure is made.  Management evaluates whether or not there is sufficient geologic and economic certainty of being able to convert a residual mineral deposit into a proven and probable reserve at a development stage or production stage mine, based on the known geologic and metallurgy, existing mining and processing facilities, operating permits and environmental programs.  Therefore prior to capitalizing such costs, management determines that the following conditions have been met:


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 22
 
 
  SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 
 
 
   Exploration and evaluation costs (continued)
 
 
 
              The Company understands that there is diversity in practice within the mining industry, in that some companies expense the drilling and related costs incurred to define and delineate residual mineral deposits that have not been classified as proven and probable reserves at a development stage or production stage mine. Had AngloGold Ashanti expensed such costs as incurred, net income, earnings per share and retained earnings would have been lower by approximately the following amounts:
 
 
 
 
 
 
 
 
 2009
 2008
 2007
 
 
 
 Net income ($ millions)
 
 
 16
 10
 1
 
 
 
 Earnings per share
 (1)
 (cents)
 4
 3
 -
 
 
 
 
 Retained income - January 1 ($ millions)
 
 
 70
 60
 59
 
 
 
 Retained income - December 31 ($ millions)
 
 
 86
 70
 60
 
 
 
 (1)
 Impact per basic and diluted earnings per common share.
 
 
 
 
 
      Stock-based compensation plans
         The fair value of the stock-based payments is calculated at grant date using an appropriate model. For equity settled stock-based payments, the fair value is determined using a Black-Scholes method and expensed on a straight-line basis over the vesting period based on the group’s estimate of shares that will eventually vest.
      Option schemes which include non-market vesting conditions have been calculated using the Black-Scholes model. For all other stock-based payments to employees the fair value is determined by reference to the market value of the underlying stock at grant date adjusted for the effects of the relevant terms and conditions.
      For schemes with non-market related vesting conditions, the likelihood of vesting has been taken into account when determining the income statement charge. Vesting assumptions are reviewed during each reporting period.
      Stock options are subject to a three year vesting condition and their fair value is recognized as an employee benefit expense with a corresponding increase in Additional paid in capital over the vesting period. The proceeds received, net of any directly attributable transaction costs are credited to Common stock and Additional paid in capital when the options are exercised.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 23
 
 
  SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 
 
   Recent pronouncements
   
   Variable interest entitiesIn June 2009, the FASB ASC guidance for consolidation accounting was updated to require an entity to perform a qualitative analysis to determine whether the enterprise’s variable interest gives it a controlling financial interest in a variable interest entity (“VIE”). This analysis identifies a primary beneficiary of a VIE as the entity that has both of the following characteristics: (i) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses or receive benefits from the entity that could potentially be significant to the VIE. The updated guidance is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. The Company does not expect the adoption of this guidance to have a material impact on the Company’s financial statements.
   
   Distributions to shareholders In January 2010, the FASB ASC guidance for accounting for distributions to shareholders with components of stock and cash was updated to clarify that the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a potential limitation on the total amount of cash that all shareholders can elect to receive in aggregate is considered a share issuance that is reflected in EPS prospectively.  The guidance is effective for interim and annual reporting periods beginning after December 15, 2009, and should be applied retrospectively to all prior periods.  The Company does not expect the adoption of the updated guidance to have a material impact on the Company’s financial statements.
      Fair value measurements In January 2010, the FASB ASC guidance for disclosures about fair value measurements was updated, providing amendments to the guidance which requires entities to disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. In addition, entities are required to present separately information about purchases, sales, issuances, and settlements in the reconciliation for fair value measurements using significant unobservable inputs (Level 3). The disclosures related to Level 1 and Level 2 fair value measurements are effective for interim and annual reporting periods beginning after December 15, 2009.  The disclosures related to Level 3 fair value measurements are effective for interim and annual reporting periods beginning after December 15, 2010. Except for presentation changes, the updated guidance will have no impact on the Company’s financial statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 5.
 COSTS AND EXPENSES
 ]
  Employment severance costs
  Total employee severance costs amounted to $14 million for 2009 (2008: $9 million, 2007: $19 million) and were due to retrenchments reflecting mainly downsizing and rationalization of operations in the Southern Africa and Continental Africa regions. Employeeseverance costs recorded in 2009, 2008 and 2007 included retrenchment costs of $10 million, $9 million and $5 million, respectively, in South Africa and $3 million, $nil million and $14 million, respectively, in Ghana (at Obuasi) due to a planned reduction in workforce.
 
 
  
  Interest expense
 
   
    
   
  2009                
  2008                 
  2007
 
 
   
  $                     
  $                      
  $
 
 
   
      
   (1)
      
   (2)
      
   
      
   
      
   
      
   
      
   (3)
      
   
     
 
  (1)
 
  The unsecured corporate bond (issued on August 21, 2003) in the aggregate principal amount of R2 billion ($300 million) was repaid on August 28, 2008.
  
 (2)
 
  The $1.0 billion 2.375 percent convertible bond (issued February 27, 2004) was repaid on February 27, 2009. On May 22, 2009, AngloGold Ashanti Holdings Finance
  
 
 
  plc, a wholly-owned subsidiary of the Company, issued $732.5 million 3.5 percent guaranteed convertible bonds due May 2014, convertible into ADSs and guaranteedby AngloGold Ashanti Limited.  Refer to Note 20.
  
 (3)
 
  Interest capitalized on qualifying assets.  Refer to Note 13.
 
 
  
  Impairment of assets
 
   
    
    
  2009  2008  2007
 
 
   
  $
 $
 $
 
 
  Continental Africa
 
   
   (1)
      
   (2)
      
   (3)
      
   (3)
      
   (4)
      
   (5)
      
   (5)
      
   (6)
      
   
      
  Southern Africa
 
   
   (7)
      
   (8)
      
  Other
 
   
   
      
   
     
 
  (1)
 Due to damage suffered by the leach tanks of the treatment plant its use was discontinued in 2009.
 
 (2)
 In 2008, annual impairment testing for goodwill was performed for Obuasi and it was determined that its goodwill was fully impaired. The goodwill
 impairment was the result of factors such as the lower forward gold curve price, higher discount rates and a revised mine plan which incorporatedchanges in the cost of extraction due to the higher power costs experienced in Ghana. The reporting unit's fair value was determined using a real pre-tax discount rate of 9 percent.
 
 (3)
 The reserve power plant had been placed on care and maintenance during 2008 and was handed over to the Volta Regional Authority in 2009. Both
 Obuasi mine and Iduapriem mine contributions to the capital cost of the reserve power plant were impaired as the mines would not derive furthereconomic benefit.
 
 (4)
 In 2008, annual impairment testing for goodwill was performed for Iduapriem and it was determined that its goodwill was fully impaired. The goodwill
 impairment was the result of factors such as the lower forward gold curve price, higher discount rates and a revised mine plan which incorporatedchanges in the cost of extraction due to the higher power costs experienced in Ghana. The reporting unit's fair value was determined using a real pre-tax discount rate of 8.8 percent.
 
 (5)
 In 2008, annual impairment testing for goodwill was performed for Geita and it was determined that its goodwill was fully impaired. The impairment testing
 for mining assets was performed and the estimated fair value of the mining assets did not support the carrying values and as a result, an impairment ofmining assets was recorded. The impairment at Geita mine was due to a combination of factors such as the lower forward gold curve price, higher discount rates and a change in the mine plan revised mainly due to a reduction in reserves resulting from resource model changes, grade factors and anincrease in the cost of extraction. The reporting unit's fair value was determined using a real pre-tax discount rate of 11.5 percent.
 
 (6)
 In terms of the volatile political situation in the DRC in 2008, commercial exploitation appeared unlikely and the mineral right value was impaired.
 
 (7)
 Following the classification of Tau Lekoa as held for sale in 2009, impairment testing was performed on the held for sale asset. As the estimated fair
 value less costs to sell did not support the carrying value, an impairment of $4 million was recorded for held for sale assets. The reporting unit’s fair value was derived from the anticipated sales price, discounted at a rate of 10 percent.
 
 (8)
 Due to a change in the mine plan resulting from safety related concerns following seismic activity, a portion of the below 120 level development was
 abandoned and would not generate future cash flows.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 5.
 COSTS AND EXPENSES(continued)
 
    
   the gold price assumption represented management’s best estimate of the future price of gold.  In arriving at the estimated long-term gold price, management considered all available market information including current prices, historical averages, and forward pricing curves.  A long-term real gold price of $906 per ounce (2008: $817 per ounce) was based on a range of economic and market conditions that will exist over the remaining useful life of the assets.
   proven and probable ore reserves as well as value beyond proven and probable reserves estimates.  For these purposes proven and probable ore reserves of approximately 68.3 million ounces (including joint ventures) as at December 31, 2009 were determined assuming a three year historical average gold price of $840 per ounce, A$1,024 per ounce in Australia and R213,352 per kilogram in South Africa;
   the real pre-tax discount rate is commensurate with the risks involved which is consistent with the basis used in 2008.  The risk factors considered were country risk as well as asset risk for cash flows relating to mines that are not yet in production and deep level mining projects.  The country risk factor was based on the Company’s internal assessment of country risk relative to the issues experienced in the countries in which it operates and explores;
   foreign currency cash flows were translated at estimated forward exchange rates and then discounted using appropriate discount rates for that currency;
       
  
   The real pre-tax discount rates applied in the 2009 impairment calculations on reporting units with significant assigned goodwill were as follows:
   Percentage
 
 Australasia
     North America
    
  In addition to the gold price and discount rate assumptions described above, the factors affecting the estimates include:


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 5.
 COSTS AND EXPENSES(continued)
 
  
 
 Environmental rehabilitation obligations
 
  
   
 
   
   
 
  Long-term environmental obligations comprising decommissioning and restoration are based on the Company’s environmental management plans, in compliance with the current environmental and regulatory requirements.
  
  
 
  
 
 
   
  
 
   
  
 
  
 
    
 
    
 
    
 
    
 
    
 
   (1)
  
 
    
 
   
 
  
 (1)
 Revisions relate to changes in laws and regulations governing the protection of the environment and factors relating to rehabilitation estimates and a change in the quantities of material in reserves and a corresponding change in the life of mine plan.  These liabilities are anticipated to unwind beyond the
  end of the life of mine.
 
 
 
 
 
 These liabilities mainly relate to obligations at the Company’s active and inactive mines to perform reclamation and remediationactivities in order to meet applicable existing environmental laws and regulations.
 
  
 Certain amounts have been contributed to a rehabilitation trust and environmental protection bond under the Company's control.  Themonies in the trust and bond are invested primarily in interest bearing debt securities and are included in Other long-term assets in theCompany’s consolidated balance sheet.  Cash balances held in the trust and bond are classified as restricted cash in the Company’sconsolidated balance sheets.  As at December 31, 2009 and 2008 the balances held in the trust and bond amounted to $117 millionand $84 million, respectively.
 
  Operating lease charges
 
 Operating lease rentals are charged against income in a systematic manner related to the period the leased property will be used.Lease charges relate mainly to the hire of plant and machinery and other land and buildings.
 
  
 Operating leases for plant and machinery are for contracts entered into with mining contractors.  The contracts are for specified periodsand include escalation clauses.  Renewals are at the discretion of the respective operating mine. Certain contracts include theprovision of penalties payable on early exiting or cancellation.
 
  
 
 Rental expense
 (1)
   
    
  
  2009
 2008
 2007
 
 
  
  $
 $
 
 $
 
 
 
  
    
  
      (1)
 Included in production costs for each period presented.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 5.
 COSTS AND EXPENSES (continued)
 
  
 
 Loss/(profit) on sale of assets, realization of loans, indirect taxes and other
 
   
    
  2009
 
 2008
 2007
 
 
  
  $
 $
 $
 
 
   (1)
       
   (2)
       
   
       
   
       
   (3)
       
   
        
   (4)
       
   
       
   
       
   
       
   
       
   
      
   
       
   
       
   
      
   (5)
       
   
       
   
       
   
       
   
     
 
   (1)
 Includes $31 million foreign exchange transaction loss.
 
 (2)
 Refers to business interruption insurance following a seismic event which resulted in the suspension of operations at Savuka (in South Africa) during 2009.
 
 (3)
 Refers to the disposal and abandonment of land, mineral rights and exploration properties situated in Brazil, Ghana, South Africa, North America and
 Tanzania.
 
 (4)
 Impairment of B2Gold Corporation shares ($12 million) in 2009 and Red 5 Limited shares ($4 million) in Australia and Dynasty Gold Corporation shares ($2
 million) in China in 2008.  Refer to Note 16.
 
 (5)
 Rights offer was completed in early July 2008.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 28
 
 
  COSTS AND EXPENSES (continued)
 
 
 Non-hedge derivative loss
 
 A loss on non-hedge derivatives of $1,452 million was recorded in 2009 (2008: $258 million, 2007: $808 million).
 
 
 
 During 2009, the Company embarked on a hedge buy back that resulted in the accelerated settlement of both non-hedge and forward gold contracts qualifying for the normal purchases and sales exemption (which permits the Company to not record such amounts in its financial statements until the maturity date of the contract) under which the Company had committed to deliver a specified quantity of gold at a future date in exchange for an agreed price.  Of the total hedge buy-back cost of $797 million, the majority, being $580 million, related to contracts previously designated as normal purchase and sale exempted (“NPSE”), which allowed them to be accounted for off-balance sheet in prior periods.  A further $217 million was also incurred in accelerating the cash settlement of existing non-hedge derivative contracts.  However, as a result of the accelerated cash settlement of the NPSE contracts during July 2009, the FASB ASC guidance on derivatives and hedging necessitated a review of the continuing designation of, and accounting treatment for, the remaining NPSE contracts that were not part of the accelerated settlement.  As the Company will continue to consider alternatives to reduce its outstanding gold derivatives position in future periods including, where appropriate, the accelerated settlement of contracts previously qualifying for the NPSE designation, management concluded, in accordance with the provisions of the FASB ASC guidance, to re-designate all remaining NPSE contracts as non-hedge derivatives and to account for such contracts at fair value on the balance sheet with changes in fair value accounted for in the income statement.
 
 
 
 The impact in July 2009 of the related re-designation of the contracts discussed above resulted in an increase in the current non-hedge derivative liability and a consequential loss on non-hedge derivatives of $543 million. During the remainder of 2009, the contracts that were previously NPSE designated experienced a further fair value decline (recorded in loss on non-hedge derivatives) of $143 million, settlements of $130 million and thus resulted in a $556 million derivative liability balance as of December 31, 2009.
 
 
 
 Therefore the loss on non-hedge derivatives recorded for the year ended December 31, 2009 primarily relates to the hedge buy-back that resulted in the accelerated settlement and related re-designation of the NPSE contracts discussed above, the fair value movement of the conversion features of convertible bonds amounting to $32.6 million (as described in Note 20) and the revaluation of non-hedge derivatives, including those NPSE contracts re-designated as a result of the accelerated settlement as discussed above, resulting from changes in the prevailing spot gold price, exchange rates, interest rates, volatilities and non-performance risk during 2009.
 
 
 
 During 2008, the Company recorded a realized loss on the accelerated settlement of non-hedge derivatives of $1,088 million. In addition, the Company recognized a loss of $150 million during 2008 on forward gold contracts previously qualifying for the normal sale exemption, due to the inability of a single counterpart to accept physical delivery of gold for the forward contracts that had matured.  Accordingly, the remaining contracts with this counterpart for future periods were accounted for at fair value on balance sheet, with changes in fair value reflected in the income statement. Following this, during the third quarter of 2008, the Company cash settled contracts designated as non-hedge derivative contracts, with the same counterpart, maturing in July 2008 through August 2009.
 
 
 
 Other operating items
 
 
 
 
 
 2009
 2008
 2007
 
 
 $
 $
 $
 
 Comprising of:
 
 Realized loss on other commodity contracts
 -
 32
 -
 
 Provision reversed on loss on future deliveries of other commodities
 -
 (5)
 (13)
 
 Unrealized gain on other commodity physical borrowings
 -
 (8)
 (3)
 
 
 -
 19
 (16)


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 29
 
  RELATED PARTY TRANSACTIONS
 
 As at December 31, 2008, Anglo American plc (AA plc) and its subsidiaries held an effective 16.17 percent interest in AngloGold Ashanti.  On March 17, 2009, AA plc disposed of its entire remaining shareholding in the Company.  The Company had the following transactions with related parties during the years ended December 31, 2009, 2008 and 2007:
 
 
 
 
 
 
 December 31, 2009
 
 December 31, 2008
 December 31, 2007
 
 
 
 
 
 Purchases
 (by)/from
 related party
 Amounts
 owed to/(by)
 related party
 Purchases
 (by)/from
 related party
 Amounts
 owed to/(by)
 related party
 Purchases
 (by)/from
 related party
 
 
 (in millions)
 
 
 $
 $
 $
 $
 $
 
 
 Related party transactions of equity
 accounted joint ventures and associates
 
 
 
 
 AGA Polymetal Strategic Alliance
 
 
 -
 (3)
 -
 (3)
 -
 
 
 Margaret Water Company
 
 
 1
 -
 1
 -
 -
 
 
 Oro Group (Proprietary) Limited
 
 
 -
 (2)
 -
 (2)
 -
 
 
 Societe d'Exploitation des Mines d'Or de
 Sadiola S.A.
 
 
 (10)
 (3)
 (5)
 (2)
 (7)
 
 
 Societe d'Exploitation des Mines d'Or de
 Yatela S.A.
 
 
 (3)
 -
 (1)
 (1)
 (3)
 
 
 Societe des Mines de Morila S.A.
 
 
 (6)
 (1)
 (5)
 (1)
 (5)
 
 
 Trans-Siberian Gold plc
 
 
 -
 (1)
 -
 (1)
 (1)
 
 
 Orpheo (Proprietary) Limited
 
 
 -
 (1)
 -
 -
 -
 
 
 AuruMar (Proprietary) Limited
 
 
 -
 (2)
 -
 -
 -


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 30
 
 
  RELATED PARTY TRANSACTIONS (continued)
 
  Amounts owed to/due by joint venture related parties are unsecured, non-interest bearing and under terms that are no less favorable than those with third parties.
 
 
 
  
 
 
  The AGA-Polymetal Strategic Alliance (joint venture) loan of $3 million advanced during 2008, is interest free and is repayable on demand at any time after profits have been generated by the joint venture.
 
 
  The Oro Group (Proprietary) Limited loan of $2 million (2008: $2 million) bears interest at a rate determined by the Oro Group (Proprietary) Limited’s board of directors and is repayable at their discretion.
 
 
  The AuruMar (Proprietary) Limited loan of $2 million (2008: $nil million) is unsecured, interest free and there are no fixed terms of repayment.
 
 
  The Orpheo (Proprietary) Limited loan of $1 million (2008: $nil million) is unsecured, interest free and there are no fixed terms of repayment.
 
 
  The Company, which holds an equity interest of 29.7 percent (2008: 29.7 percent) in Trans-Siberian Gold plc (TSG), entered into a transaction during the quarter ended June 30, 2007 with TSG in which two companies were acquired from TSG for a consideration of $40 million. The companies acquired consist of Amikan and AS APK.
 
 
  In connection with the relocation of Roberto Carvalho Silva, a former executive director of the Company who retired in 2007, to Nova Lima, Brazil, in 2000, Mr. Carvalho Silva commenced renting a house in Nova Lima from a Brazilian subsidiary of the Company. Mr. Carvalho Silva purchased the house from the Company’s subsidiary in January 2005. The total purchase price of the house was BRL1,150,000 ($429,923). Mr. Carvalho agreed to pay the purchase price of the house in 60 installments, the first being BRL19,167.70 and 59 installments of BRL19,166.65 each, starting on January 28, 2005. Such monthly installments were adjusted annually by the cumulative INPC (a Consumer Price Index in Brazil) in lieu of interest.  All outstanding balances were repaid on or about August 31, 2007.
 
 
  A Brazilian subsidiary of the Company received marketing, communications and corporate affairs services from a Brazilian company in which a son of Roberto Carvalho Silva owns a one-third interest. The amounts paid by the Company’s subsidiary to this company in respect of such services during 2007 was BRL634,023 ($329,055).  The Company terminated the agreement with the Brazilian marketing, communications and corporate affairs services company effective July 2007.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 7.
 TAXATION
  
 
  
   
    
  
  2009
 
 
 2008
 2007
 
 
  
  $
 
 
 $
 $
 
 
   
     
  
   
    
  
   
    
  
   
    
  
   
    
  
   
    
  (1)
   
    
  
   
    (1)
  The increase in the loss from 2008 is due to the additional finance charges on the TermFacility and exploration expenses in 2009.
 
    
 
  
  
    
 
  
 Current:
 
     
  (1)
   
    
  (2)
   
    
  (3)
   
    
  
   
    
  (4)
   
    
  
   
    
  
   
   
 
   (1)
 The increase in the tax charge in 2009 is mainly due to higher income as a result of the
 higher gold price. The reduction in the tax charge in 2008 mainly related to the tax benefit onlosses relating to the settlement of non-hedge derivative contracts.    The high taxationcharge in 2007 partly related to higher earnings arising from the higher gold price.
 
  
 
 
 
 
 (2)
 Siguiri has utilized the historic assessed losses and unredeemed capital allowances brought
 forward assisted by the improved grade and plant utilization which resulted in taxable incomein 2009 and 2008.
 
  
 
 
 
 
 (3)
 The increase in the tax charge in 2009 is mainly due to capital gains tax on the sale of the
 Boddington Gold Mine. In 2008, Sunrise Dam’s taxable income reduced considerablyfollowing the completion of the mining in the megapit during the year.
 
  
 
 
 
 
 (4)
 Increase in tax charge in 2009 mainly relates to higher earnings due to the improved gold
 price.
 
  
 
 
 
 
  
 
 Deferred:
 
     
 
  (1)
      
 
  (2)
      
 
  (3)
      
 
  
      
 
  
      
 
  
      
 
  
     
 
 
  
 
  
     
 
 
 
  
 (1)
 Mining tax on mining income in South Africa is determined according to a formula which
 adjusts the tax rate in accordance with the ratio of profit to revenue from operations. Thisformula also allows an initial portion of mining income to be free of tax. Non-mining income is taxed at a standard rate.  Estimated deferred taxation rates reflect the future anticipatedtaxation rates at the time temporary differences reverse.
 
   
   
  
  During 2009, 2008 and 2007, deferred taxation was provided at a future anticipated taxationrate ranging between 36 percent and 39 percent for 2009, 36 percent and 38 percent for2008, and in 2007 at 39 percent and 37 percent, respectively.
 
   
   
  
  The increase in deferred tax credits in 2009 is mainly due to unrealized non-hedge derivative losses arising from an improved gold price and the remaining NPSE contractsbeing re-designated as non-hedge derivatives and recorded on the balance sheet, followingthe hedge buy-back in July 2009.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
  
 
 7.
 TAXATION(continued)
 
  
 
   
   
  
   
  
   
 
   
   
  
   
  
   
  
 
   
  Year ended December 31
 
 
 
   
  2009
 
 2008
 2007
 
 
   
  Impact
 Per basic and
 diluted
 common
 share
 (a)(b)
 Impact
 Per basic and
 diluted
 common
 share
 (a)(b)
 Impact
 Per basic and
 diluted
 common
 share
 (a)(b)
  
 
   
  $
 cents
 
 
 $
 cents
 
 
 $
 
 
 
  
 
   
   
   
   
   
   
   
   
 
   
   
  
   
  
   
  
 Per basic and diluted ordinary and E ordinary shares.
  
 
  
  
   
  
   
 The calculation of diluted earnings per common share for 2009, 2008 and 2007 did not assume the effect
 of 15,384,615 shares issuable upon exercise of convertible bonds and 1,234,858, 872,373 and 575,316shares, respectively, issuable upon the exercise of stock incentive options as their effects are anti-dilutive for these periods.
  
 
  
  
   
  
  
 
 
 
 
 
 
  
 The 2008 deferred tax benefit was due to the continuing net increase in the capital allowances at Obuasi
 as a result of the high capital expenditure and the benefit relating to the impairment of mining assets atGeita.
  
 
  
  
   
  
   
 The deferred tax benefit in 2009 relates to the reversal of timing differences on the sale of Boddington.
  
 
  
  
   
  
  
 
 
 
 
 
 
 
  against future profits earned in the United States, amount to $399 million (2008: $339 million, 2007: $248 million).
   
   
  
   
  
  
 
 
 
 
 
 
 
     
   
  
   
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 2009
 $
 
 
 
 
 
 Analysis of unrecognized tax losses
 
 
 
 
 
 
 
 
 
 
 Assessed losses utilized during the year
 184
 (1)
 
 
 
 
 
 
 
 
 (1)
  
 Utilized on the Boddington gold mine disposal.
 
  
 
 
 
 
 
 
 
 
 
 
 Unutilized tax losses remaining to be used against
 future profits can be split into the following periods:
 
 
 
 
 
 
 
 
 
 
 Within one year
 
 
 127
 
 
 
 
 
 1
 Within one and two years
 
 
 -
 
 
 
 
 
 
 Within two and five years
 
 
 5
 
 
 
 
 
 
 In excess of five years
 
 
 267
 
 
 
 
 
 
 
 
 
 399
 
 
 
 
 
 
 
 
 
 
 
 2009
 $
 2008
 $
 
 2007
 $
 
 
 Reconciliation between corporate income tax and
 statutory income tax is as follows:
 
 
 
 
 
 
 
 
 
 
 Corporate income tax at statutory rates
 
 
 (314)
 (131)
 (263)
 
 
 Formula variation in mining taxation rate
 
 
 (21)
 (1)
 (3)
 
 
 Disallowable expenditure
 (1)
 
 292
 47
 388
 
 
 Effect of income tax rates of other countries
 
 
 38
 118
 (9)
 
 
 Impact of change in estimated deferred taxation rate
 
 
 (21)
 4
 23
 
 
 Other
 
 
 (7)
 (15)
 (18)
 
 
 Total income and mining tax (benefit)/expense
 
 
 (33)
 22
 118
 
 
  
 (1)
 Disallowable expenditure includes the impact of hedge losses in non-taxable jurisdictions and share expense
  costs.   In 2009, the losses on the hedge settlements were mainly in non-tax effective entities.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 33
 
 
  TAXATION (continued)
 
  
   2009
 $
 2008
 $
 
  Deferred taxation liabilities and assets on the balance sheet as of December 31, 2009 and2008, relate to the following:
                                                                                 
  The classification of deferred taxation assets is based on the related asset or liability creating the deferred taxation. Deferred taxes not related to a specific asset or liability are classified based on the estimated period of reversal.  As at December 31, 2009, the Company had non-mining losses in South Africa of $4 million (2008: $103 million), on which deferred tax had been provided at the future anticipated tax rate of 37 percent (2008: 35 percent).
   
 
 
 
 
  Unremitted earnings of foreign subsidiaries and foreign incorporated joint ventures
 
  
 
 
 
  Dividends from incorporated joint ventures may be remitted to the Company without being subject to income or withholding taxes.  No provision is made for the income tax effect that may arise on the remittance of unremitted earnings by certain foreign subsidiaries. It is management’s intention that these earnings will be permanently re-invested into future capital expansion projects, maintenance capital and ongoing working capital funding requirements.  The amounts of these unremitted earnings as at December 31, 2009 totaled $624 million (2008: $308 million). In the event that the Company repatriated these earnings, income taxes and withholding taxes may be incurred. The determination of such taxes is subject to various complex calculations and accordingly, the Company has determined that it is impractical to estimate the amount of the deferred tax liability on such unremitted earnings.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 34
 
 
  TAXATION (continued)
 
 
 
 Analysis of valuation allowances
 
 
 
 
 
 The movement in valuation allowances for the three years in the period ended December 31, is summarized as follows:
 
 
 
 Balance at beginning
 of period
 $
 Movement
 $
 Balance at end of
 period
 $
 
 Year ended December 31, 2009
 
 
 
 
 
 - Valuation allowance
 
 226
 (32)
 194
 
 Year ended December 31, 2008
 
 
 
 
 - Valuation allowance
 
 98
 128
 226
 
 Year ended December 31, 2007
 
 
 
 
 - Valuation allowance
 
 97
 1
 98
 
  The deferred tax assets for the respective periods were assessed for recoverability and, where applicable, a valuation allowance recorded to reduce the total deferred tax asset to an amount that will, more likely than not, be realized.  The valuation allowance relates primarily to certain net operating loss carryforwards, tax credit carryforwards and deductible temporary differences for which it is more likely than not that these items will not be realized.
   
 
 
 
  Although realization is not assured, the Company has concluded that it is more-likely-than-not that the deferred tax assets for which a valuation allowance was determined to be unnecessary will be realized based on the available evidence, including scheduling of deferred tax liabilities and projected income from operating activities.  The amount of the net deferred tax assets considered realizable, however, could change in the near term if actual future income or income tax rates differ from that estimated, or if there are differences in the timing or amount of future reversals of existing taxable or deductible temporary differences.
  
  
 Uncertain tax positions
 
 
   As at December 31, 2009 and 2008, the Company had $149 million and $106 million, respectively, of total unrecognized tax benefits which, if recognized, would affect the Company’s effective income tax rate.
       2009
 2008
 
   $
 $
 
                    
  The Company’s continuing practice is to recognize interest and penalties related to unrecognized tax benefits as part of its income tax expense.  During the years ended December 31, 2009, 2008 and 2007, the Company recognized approximately $9 million, $6 million and $9 million, respectively, in interest.  The Company had approximately $53 million and $34 million for the payment of interest accrued as at December 31, 2009 and 2008, respectively.
 
 
 
 
  As at December 31, 2009, the Company's South African tax assessment for the years 2001 - 2003 remain open to scrutiny by the South African Revenue Service. As at December 31, 2009, in South Africa, the Company's assessments due from the tax authorities for 2004 and all subsequent years have yet to be received. It is possible that the Company will receive assessments during the next twelve months, which may have an effect on uncertain tax positions. Certain of these assessment scrutiny periods will prescribe within the next twelve months and it is reasonably possible that the total amounts of unrecognized tax benefits will significantly decrease within twelve months of the reporting date.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 35
 
 
  TAXATION (continued)
 
  In other jurisdictions, the revenue system is based on a self-assessment process, all tax filings due by December 31, 2009 have been filed, and the self-assessed position recorded in the consolidated financial statements. The legislation of individual jurisdictions provides for different periods for the authorities to review the filings with specified expiry dates. The Company is disputing assessments received in some jurisdictions where it operates and these arguments are under consideration by the authorities. Based on current legal advice, the Company does not expect the resolution will significantly affect the Company's consolidated financial statements.
     
  DISCONTINUED OPERATIONS
 
  The Ergo reclamation surface operation, which formed part of the Southern Africa region,had been discontinued as the operation had reached the end of its useful life and the assetswere no longer in use.  The pre-tax gain on disposal of $27 million recorded in 2008 related to the remaining assets of Ergo, that were sold by the Company to ERGO Mining (Pty)Limited a joint venture between Mintails South Africa (Pty) Limited and DRD South AfricanOperations (Pty) Limited.
        The results of Ergo for the years ended December 31, 2008 and 2007, are summarized as follows:
   
 
 
 
 
 
 
 
 
 
 
 
 2008
 
 
 2007
 
 
 
 
 
 
 $ (cents)
 (1)(3)
 (cents)
 (2)(3)
 $ (cents)
 (1)(3)
 (cents)
 (2)(3)
 
 
 
 Revenue
 -
 -
 -
 1
 -
 -
 
 
 
 Costs, expenses and recoveries
 1
 -
 -
 5
 2
 1
 
 
 
 Gain on disposal
 27
 8
 5
 -
 -
 -
 
 
 
 Pre-tax profit
 28
 8
 5
 6
 2
 1
 
 
 
 Taxation
 (5)
 (1)
 (1)
 (4)
 (1)
 (1)
 
 
 
 Net profit attributable to discontinued operations
 
 
 
 23
 7
 4
 2
 1
 -
 
 
 
 (1)
 Per basic and diluted ordinary shares.
 
 (2)
 Per basic and diluted E ordinary shares.
 
 (3)
 Basic and diluted earnings/(loss) per common share. The calculation of diluted earnings/(loss) per common share for 2008 and 2007 did not assume the effect of 15,384,615 shares, issuable upon the exercise of convertible bonds as their effects are anti-dilutive. The calculation of diluted earnings/(loss) per common share for 2008 and 2007 did not assume the effect of 872,373 and 575,316 shares, respectively, issuable upon the exercise of stock incentive options as their effects are anti-dilutive. The calculation of diluted earnings/(loss) per common share for 2008 and 2007 did not assume the effect of conversion of E Ordinary shares as the Company recorded a loss from continuing operations during these periods.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 9.
 LOSS PER COMMON SHARE
  
 
 
 
 
 
 
 2009
 2008
 2007
 
 
   
 
  $
 $
 $
 
 
   
   
   
   
   
   
 
    
      
 
    
      
   
      
   
   
    
      
    
      
   
      
   
      
   
      
   
      
   
   
    
      
    (1)
      
    
     
 
  
   
   
    (2)
      
    (3)
      
    (4)
      
  Denominator for diluted loss per share – adjusted weighted average number ofordinary shares and assumed conversions
 
      
  Weighted average number of E Ordinary shares used in calculation of basic anddiluted loss per E Ordinary share
 
      
   
   
    
   
   
    
    
      
    
      
    
      
    
      
   
   
    
    
      
    
      
    
      
    
      
   
   
    
    
      
    
      
    
      
    
       (1)
 Compensation awards are included in the calculation of basic loss per common share from when the necessary conditions have been met, and it is
 virtually certain that shares will be issued as a result of employees exercising their options.
 
 (2)
 The calculation of diluted loss per common share for 2009, 2008 and 2007 did not assume the effect of 1,234,858, 872,373 and 575,316 shares,
 respectively, issuable upon the exercise of stock incentive options as their effects are anti-dilutive.
 
 (3)
 The calculation of diluted loss per common share for 2009, 2008 and 2007 did not assume the effect of 15,384,615 shares issuable upon the
 exercise of Convertible Bonds as their effects are anti-dilutive.
 
 (4)
 The calculation of diluted loss per common share for 2009, 2008 and 2007 did not assume the effect of conversion of E Ordinary shares as the
 Company recorded a loss from continuing operations during these periods.
 
 10.
 RESTRICTED CASH
 
 
 
 
 2009
 2008
 
 
 $
 $


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 11.
 TRADE AND OTHER RECEIVABLES
 
  
 2009
 2008
 
  $
 $
                           
 12.
 INVENTORIES
 
  
 
 Short-term:
 
  
 
  
  
     
  
     
  
     
  
     
  
     
   
     
  (1)
     
   
      (1)
 Short-term portion relating to heap leach inventory classified separately, as materials on the leach pad.
 
  
 
  
 Long-term:
 
  
 
  
  
     
  
     
  
     
   
     
  (1)
     
   
      (1)
 Long-term portion relating to heap leach inventory classified separately, as materials on the leach pad.
 
  
  The Company recorded aggregate write-downs of $48 million, $60 million and $37 million for the years ended December 31, 2009, 2008 and 2007, respectively, to reduce the carrying value of inventories to net realizable value.  Inventory write-downs are included in production costs.
   
 13.
 PROPERTY, PLANT AND EQUIPMENT, NET
 
  
  (1)
     
  
     
  
     
  (2)
     
  
     
   
     
  
     
  
      (1)
 Includes interest capitalized of $nil million (2008: $4 million). Refer to Note 5.
 
    (2)
 Includes interest capitalized of $13 million (2008: $26 million). Refer to Note 5.
 
   
   
  
 14.
 ACQUIRED PROPERTIES, NET


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 15.
 GOODWILL AND OTHER INTANGIBLES
  
 
 Goodwill
 
   
       
    
   
   
 North
 America  Australasia
 Continental
 Africa
 Southern
 Africa
 Total
 
 
   
   
 $
 $
 $
 $
 $
 
 
  
  
   
       
  (1)
  
       
  (2)
   
       
  (3)
   
       
  
        
  
   
       
  
        
  
       
 
 
  (1)
  Purchase price allocation for acquisition of remaining 33 percent shareholding in Cripple Creek & Victor Gold Mining Company, acquired effective July 1, 2008.
   
 (2)
  Goodwill of Boddington mine reclassified as held for sale during 2008.  Refer to Note 17.
   
 (3)
  During 2008, the Company recorded goodwill impairment losses for Obuasi ($104 million), Iduapriem ($14 million) and Geita ($181 million), respectively.  Refer to "Note 5 – Costs and expenses: Impairment of assets".
  
 
 
  
 
 
 
 
 
 2009
 
 
 2008
 
 
 
 
 
 
 $
 
 
 $
 
 
 
  
 Other intangibles, net
 
  
 
 
  
  (1)
   
   
  
   
    
  
   
    
   
   
   
 
 
   (1)
 The government of Ghana agreed to a concession on royalty payments at a fixed rate of 3 percent per year for a
 period of fifteen years from 2004. The royalty rate concession is amortized on a straight line basis with nilresidual value.
 
   
   
  Amortization expense included in the consolidated statements of income amounted to $2 million for 2009 (2008: $2 million and $2007: $2 million).
 
   
   
 
 2009
 
 
 $
  Based on carrying value at December 31, 2009, the estimated aggregate amortization expense foreach of the next five years is as follows:


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 16.
 OTHER LONG-TERM ASSETS
 
  
 
 2009
 2008
 
 
 $
 $
              Carrying value of equity method investments
    Investment in marketable equity securities – available for sale
    Investment in marketable debt securities – held to maturity
    Investment in non-marketable assets – held to maturity
    Investment in non-marketable equity securities – available for sale
    Investment in non-marketable debt securities – held to maturity
    Other non-current assets
       
 
 
 
 Investments in affiliates
 
 
 
 
 
 
 
 
 
 
 December 31,
 December 31,
 
 
 
 
 
 
 2009
 2008
 
 
 
 
 
 
 percentage held
 percentage held
 
 
 
  
 
 
  
  (1)
    
   
    
   
    
   
    
 
 
   
   
  
   (1)(2)(3)
    
 
 (1)
   Results are included for the twelve months ended September 30, 2009, adjusted for material transactions.
 
  
  (2)
 At December 31, 2009, the market value of the Company's investment in Trans-Siberian Gold plc was $12
 million (2008: $5 million).
 
   
  (3)
 During the years ended December 31, 2009, 2008 and 2007 the Company recorded impairment losses of
 $nil million, $8 million and $14 million, respectively, on its investment.
 
   
  
 
 
 
 Investments in equity accounted joint ventures
 
 
 
 
 
 
 
 The Company holds the following interests in incorporated mining joint ventures, of which thesignificant financial operating policies are, by contractual arrangement, jointly controlled:
 
 
 
 
 
 
 
 
 
 
 December 31,
 December 31,
 
 
 
 
 
 
 2009
 2008
 
 
 
 
 
 
 percentage held
 percentage held
 
 
  (1)
    
   
    
   
    
   (2)
    
   (3)
    
   
    
 
 (1)
   The Company increased its holding in Sadiola from 38 percent to 41 percent, effective December 29, 2009.
 
  (2)
 Results are included for the twelve months ended September 30, 2009, adjusted for material transactions.
 The AGA-Polymetal Strategic Alliance consists of the AGA-Polymetal Strategic Alliance ManagementCompany, Amikan Holdings Limited ("Amikan"), AS APK Holdings Limited, Imizoloto Holdings Limited and Yeniseiskaya Holdings Limited.
 
   
  (3)
 The Company acquired an effective 45 percent holding in Kibali Goldmines during 2009.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 16.
 OTHER LONG-TERM ASSETS(continued)
 
 
 
 
 
 
 
 
 
 
 
 
 2009
 
 
 
 2008
 
 
 
 
 
 
 
 
 
 
 
 $
 $
 
 
 
 
 
 
 Effective December 2, 2009, AngloGold Ashanti Holdings plc, a wholly owned subsidiary,entered into a memorandum of understanding with Polyholding Limited relating to thedisposal of Amikan. Amikan holds mining and exploration interests in Russia. Completion is expected to occur on or before April 30, 2010. The Company recorded an impairment lossof $9 million (net of tax of $nil million) on Amikan to reduce the carrying amount of theinvestment to fair value. The impairment loss is reflected in equity income in affiliates for 2009.
 
  
   
  
   
 
 
 
 
 
 
 
 During 2008, the Company recorded an impairment loss of $42 million (net of tax of $6 million) relating to its interest held in Morila, based on the investment’s future cash flows. The impairment loss was reflected in equity loss in affiliates for 2008.
 
  
   
  
   
 
 
 
 
 
 
 
 Investment in marketable equity securities – available for sale
 
 
 
 
  
   (1)
 
 
 
 
 
 
 
 Available for sale investments in marketable equity securities consists of investments inordinary shares.
 
  
   
  
   
 
 
 
 
 
 
 
 Total gains, net of related taxation, on marketable equity securities included in accumulatedother comprehensive income during the year amount to $74 million (2008: $2 million).  Total losses, net of related taxation, on marketable equity securities included in accumulatedother comprehensive income during the year amount to $nil million (2008: $29 million).  TheCompany recognized an other-than-temporary impairment in the B2Gold investment of $12million during the third quarter of 2009.  See "Note 5  Costs and expenses: Loss/(profit) on sale of assets, realization of loans, indirect taxes and other" and Note 24 for additionalinformation.  In addition to the investment in B2Gold, the Company holds various equitiesas strategic investments in gold exploration companies.  Three of the strategic investmentsare in an unrealized loss position and the Company has the intent and ability to hold these investments until the losses are recovered.
 
  
   
  
   
 
 
 
 
 
 
 
 The following tables present the gross unrealized losses and fair value of the Company’sinvestments with unrealized losses that are not deemed to be other-than-temporarilyimpaired, aggregated by length of time that the individual securities have been in acontinuous unrealized loss position:
 
  
   
  
   
 
 
 
 
 
 
 
 
 
 
 Less than
 12 months
 
 
 
 More than
 12 months
 
 
 
 Total
 
 
 
 
 
 
 $
 
 
 
 $
 
 
 
 $
 
 
 
 2009
 (2)
 
 
 
 
 
 
 
 
 
  
 
 -
 -
 -
 1
 
 
 
  
 
 -
 -
 -
 1
 
 
 
 
 
 
 2008
 
 
 
 
 
  
 
 9
 8
 17
 
 
 
  
 
 (21)
 (10)
 (31)
 
 
 
 (1)
  
 During 2008, Red 5 Limited shares of $4 million in Australia and Dynasty Gold Corporation shares of $2million in China were impaired.  The impairments resulted in a transfer of fair value adjustments previously included in accumulated other comprehensive income to the income statement in 2008.
   
 
 
 
 
 
 (2)
  
 In aggregate, the fair value of strategic investments in an unrealized loss position, as well as the aggregate unrealized losses amount to less than $1 million, respectively.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 16.
 OTHER LONG-TERM ASSETS(continued)
 
 
 
 
 
 
 
 
 
 
 2009
 2008
 
 
 
 
 
 
 
 
 
 $
 $
 
 
 
 Investment in marketable debt securities – held to maturity
 
 
  
  
   
 
  Investments in marketable debt securities represent held to maturity government andcorporate bonds.
 
 
  
   
   
 
 
 
 
 Investment in non-marketable assets – held to maturity
 
 
  
  
   
 
  Investments in non-marketable assets represent secured loans and receivables secured bypledge of assets.
 
 
  
   
   
 
 
 
 Investment in non-marketable equity securities – available for sale
 
 
  
  
   
 
  Investments in non-marketable equity securities mainly represent shares held in XDMResources Limited.
 
 
  
   
   
 
 
 
 Investment in non-marketable debt securities – held to maturity
 
 
  
  
   
 
  Investments in non-marketable debt securities represent the held to maturity fixed-term deposits required by legislation for the Environmental Rehabilitation Trust Fund and NufcorUranium Trust Fund.
 
 
  
   
   
 
 
 
 
  
 
  
   
   
 
 
 
 
 
  Marketable debt securities
 
 
  
   
   
 
 
   
  
   
  
   
 
 
   
  
   
  
   
 
 
   
   
   
  
  
 
  Non-marketable debt securities
 
 
  
   
   
 
 
   
 
  
  
   
 
 
 
 
 
  Fair values of the held to maturity debt securities at December 31, 2009 and 2008approximate cost.
 
 
  
   
   
 
 
 
 
 
  Other non-current assets
 
 
  
   
   
 
 
  Unsecured
 
 
  
   
   
 
 
   (1)
 
  
  
   
 
 
 
 
  Non-current debtors
 
 
  
   
   
 
 
   
 
  
  
   
 
   
 
  
  
   
 
   
 
  
  
   
 
   
 
  
  
   
 
   
   
   
  
   
 
 
 (1)
  
 Other comprises loans and receivables of $1 million (2008: $1 million) measured at amortized cost and post-retirement assets of $7 million (2008: $2 million) measured according to the employee benefitsaccounting policy.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 16.
 OTHER LONG-TERM ASSETS(continued)
 
 
 
 Equity accounted joint ventures
 
 
   
  Summarized financial statements of the joint ventures which have been equity accounted are as follows (100 percent shown):
 
   
   
 2009
 2008
 2007
 
 
  
 $
 $
 $
 
 
 Statements of income for the period
 
 
  
   
    
   
    
   
    
   
    
  Balance sheets at December 31,


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 43
 
  ASSETS AND LIABILITIES HELD FOR SALE
 
  
  2009
 2008
 
  $
 $
 
 Effective February 17, 2009, the interest in the Tau Lekoa mine together with the adjacentWeltevreden, Jonkerskraal and Goedgenoeg project areas (“Tau Lekoa”) in South Africawas classified as held for sale. Tau Lekoa was previously recognized as a combination oftangible assets, current assets and current and long-term liabilities. The Company has agreed to sell Tau Lekoa, subject to conditions precedent usual to a transaction of thisnature, to Simmer and Jack Mines Limited (“Simmers”).
 
 
 Purchase consideration consists of two components: an initial cash payment orcombination of cash payment and Simmers shares together with future royalty payments.
 
 
 The effective date will occur on the later of January 1, 2010, or the first day in the calendarmonth following the fulfillment of all conditions precedent to the transaction. The Companywill continue to operate Tau Lekoa until the effective date with appropriate jointmanagement arrangements with Simmers. Following the effective date of the disposal,Simmers will treat all ore produced from the assets at its own processing facilities.  As aresult, AngloGold Ashanti will have increased processing capacity available at its VaalRiver plants, allowing for the processing of additional material from its surface sources and the other Vaal River mines.
    The additional treatment capacity will ensure significant continuing direct cash flows fromthe same gold commodity in an active market. Consequently, due to the migration of cashflows and in accordance with the FASB ASC guidance on discontinued operations, TauLekoa is not classified as a discontinued operation.
   During 2009, an impairment loss of $4 million was recognized in earnings to reduce thecarrying amount of Tau Lekoa to fair value less costs to sell. Refer to "Note 5  Costs and expenses: Impairment of assets". At December 31, 2008, net assets for Tau Lekoaamounted to $46 million.
    Effective December 2007, Rand Refinery Limited in South Africa (a subsidiary of the Company) transferred parts of its premises that were no longer utilized (previouslyrecognized as a tangible asset), to held for sale. On April 1, 2008, a sale agreement was concluded subject to achievement of the suspensive condition regarding rezoning of the land and transfer of title deeds. Rand Refinery Limited currently awaits the rezoningtransfer notification from the municipal and deeds office in order to conclude the salestransaction.
    Effective December 31, 2008, the 33.33 percent interest in the unincorporated joint venturein Boddington Gold Mine in Australia was classified as held for sale. The interest inBoddington Gold Mine was previously recognized as a combination of tangible assets,goodwill, current assets and current and long-term liabilities. The Company agreed to sell the 33.33 percent interest, subject to conditions precedent, to Newmont MiningCorporation.
   On June 26, 2009, the Company announced that the sale had been completed in accordance with the sale agreement with all conditions precedent being met. A profit ondisposal of $56 million was realized on the sale of Boddington. Refer to "Note 5  Costs and expenses: (Profit)/loss on sale of assets, realization of loans, indirect taxes and other".


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 44
 
 
  ASSETS AND LIABILITIES HELD FOR SALE (continued)
 
  
 
 2009
 2008
 
 
 $
 $
  As at December 31, 2009 and 2008 the carrying amounts of major classes of assets andliabilities classified as held for sale, included:
                                       
  OTHER CURRENT LIABILITIES
 
  
                                
  OTHER NON-CURRENT LIABILITIES


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 45
 
  LONG-TERM DEBT
  
  
   
 2009                
  2008
 
  
   
 $
 $
 
 Unsecured
 
  
 
  Syndicated loan facility ($1,150 million) - Drawn down in US and Australian dollars
 (1)
  
 
     
        Interest charged at LIBOR plus 0.4 percent per annum. Loan is repayable in December2010 and is US dollar-based. The loan is subject to debt covenant arrangements for which no default event occurred.
 
     3.5 % Convertible bonds
 (2)
   
     
       Fixed semi-annual coupon of 3.5 percent per annum. The bonds are convertible, at theholders’ option, into ADSs up to May 2014 and are US dollar-based.  The bonds are convertible at an initial conversion price of $47.6126 per ADS.
 
     2.375 % Convertible bonds
 (3)
  
 
     
       Fixed semi-annual coupon of 2.375 percent per annum. The bonds were convertible, at the holders’ option, into ADSs up to February 2009 and were US dollar-based.  The bonds were convertible at a price of $65.00 per ADS.  The bonds matured and wererepaid on February 27, 2009.
 
     2009 Term Facility
 (4)
   
     
    Interest is charged at a margin of 4.25 percent per annum over the higher of theapplicable LIBOR and the lenders' cost of funds (subject to a cap of LIBOR plus 1.25percent per annum).  Loan is repayable on August 24, 2010 (extendable, if required, at the option of the Company until August 24, 2011) and is US dollar-based.
 
      Santander Banespa
 
  
 
     
    Interest is charged at LIBOR plus 1.45 percent per annum.  Loan is repayable inquarterly installments terminating in September 2011 and is US dollar-based.
 
     Santander Banespa
 
       Interest is charged at 6 percent per annum.  Loans are repayable in monthlyinstallments terminating in November 2013 and April 2014 and are Brazilian real-based.
 
    Various US dollar-based loans and overdrafts with interest rates ranging from 3.72percent per annum to 8.69 percent per annum were repaid during 2009.
 
    
  Secured
 
    Capital leases
 
    Turbine Square Two (Proprietary) Limited
 (5)
           The leases are capitalized at an implied interest rate of 9.8 percent per annum. Lease payments are due in monthly installments terminating in March 2022 and are ZAR-based. The buildings financed are used as security for these loans.  Refer to Note 13.
 
     Caterpillar Financial Services Corporation
 (6)
         Interest charged at an average rate of 5.46 percent per annum. Loans are repayable in monthly installments terminating in December 2014 and are US dollar-based.  The equipment financed is used as security for these loans.  Refer to Note 13.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 20.
 LONG-TERM DEBT(continued)
  
 
 
 
 
 
 
 2009
 2008
 
 
 
 
 
 
 
 $
 $
 
  Mazuma Capital Corporation
 (7)
   
     
        Interest charged at an average rate of 5.6 percent per annum. Loans are repayable in monthlyinstallments terminating in November 2012 and are US dollar-based.  The equipment financed is used as security for these loans.  Refer to Note 13.
 
      Senstar Capital Corporation
 
   
     
        Interest was charged at a weighted average rate of 6.6 percent per annum. Loans were repaid in monthly installments terminating in December 2009 and were US dollar-based.  The equipment financed was used as security for these loans.  Refer to Note 13.
 
      CSI Latina Arrendamento Mercantil S.A.
 (8)
         Interest charged at a rate of 6.74 percent per annum. Loan is repayable in monthly installmentsterminating in February 2012 and is Brazilian real-based.  The equipment financed is used as security for this loan.  Refer to Note 13.
 
    Total debt
 
   
     
   
    Total long-term debt
 
   
   
   
   
      
      
      
      
      
      
      
     
   
      
   
      
   
      
   
      
   
      
   
    
 
      
        
        
        
        
        
        
        
        
        
       
 
  
 (1)
 Syndicated loan facility ($1,150 million)
 
 
 
 
   
    
     
    
     
    
     
  syndicated borrowing facility, at a margin of 0.4 percent over LIBOR. A commitment fee of 0.12 percent per annum is payable on the undrawn portion of the facility. The three year $1,150 million syndicated facility was used to repay a maturing facility of $700 million (repaid on December 14, 2007) and is available for general corporate purposes. During the year endedDecember 31, 2009, the Company drew down $985 million and repaid $899 million, respectively, under the $1,150 million syndicated facility.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 20.
 LONG-TERM DEBT(continued)
 
  
 
  
 
 
 2009
 2008
  
 
  
 
 
 $
 $
 
   (2)
 3.5% Convertible bonds
 
 
 
   
          
         
       
                                                         
  
 (3)
 2.375% Convertible bonds
 
 
 
   
          
         
       
  
  On February 27, 2004, AngloGold Ashanti Holdings plc, a wholly-owned subsidiary of the Company, issued $1.0 billion 2.375 percent guaranteed convertible bonds due2009, convertible into ADSs.  The bonds matured and were repaid on February 27,2009, as mentioned below.
   
      
     (4)
 2009 Term Facility


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 48
 
 
  LONG-TERM DEBT (continued)
  
  
   
 2009
 2008
 
  
   
 $
 $
 
 
 On November 20, 2008, AngloGold Ashanti Holdings plc entered into a $1.0 billion term loan facility
 agreement (the “Term Facility”).  $1.0 billion on the Term Facility was drawn on February 26, 2009 to
 redeem the $1.0 billion 2.375 percent convertible bonds due February 27, 2009 upon its maturity.
 
 
 
 
 
 
 
 On August 24, 2009, the Company completed an amendment to the Term Facility by prepaying an
 amount of $750 million and satisfying certain other conditions.  As a result the balance of the Term
 Facility has been converted into a new term loan of $250 million (the “2009 Term Facility”) and a new
 revolving credit facility of $250 million has been made available (the “2009 Revolving Credit Facility”). A
 commitment fee of 1.7 percent is payable quarterly in arrears on the undrawn portion of the 2009
 Revolving Credit Facility. As of December 31, 2009, $nil million was drawn under the 2009 Revolving
 Credit Facility.
 
 
 
 
 
 
 
 The 2009 Term Facility and the 2009 Revolving Credit Facility will each mature on August 24, 2010
 (extendable, if required, at the option of the Company until August 24, 2011) and will bear an interest
 margin of 4.25 percent per annum over the higher of the applicable LIBOR and the lenders’ cost of
 funds (subject to a cap of LIBOR plus 1.25 percent per annum).
 
 
 
 
 
 Capital leases
 
 
 
 
 
 
 
 
 
 (5)
 Turbine Square Two (Proprietary) Limited
 
 
 
 
 Capital leases are for specific periods, with terms of renewal but no purchase options. Renewals are at the discretion of the entity that holds the lease. As of December 31, 2009 and 2008, Property, plant and equipment, allocated to Buildings and mine infrastructure, includes $33 million and $26 million of assets under capital leases and $6 million and $3 million of related accumulated depreciation, respectively.  Amortization charges relating to capital leases are included in Depreciation, depletion and amortization expense for all periods presented. The weighted average interest rate on the leases existing at December 31, 2009 is 9.8 percent. Payments are made monthly, including interest, through 2022.
 
 
 
 
 
 
 
 
 (6)
 Caterpillar Financial Services Corporation
 
 
 
 
 Capital leases are for specific periods, with terms of renewal but no purchase options. Renewals are at the discretion of the entity that holds the lease. As of December 31, 2009, Property, plant and equipment, allocated to Buildings and mine infrastructure, includes $16 million of assets under capital leases and $nil million of related accumulated depreciation. Amortization charges relating to capital leases are included in Depreciation, depletion and amortization expense for the year ended December 31, 2009. The weighted average interest rate on the leases existing at December 31, 2009 is 5.46 percent. Payments are made monthly, including interest, through 2014.
 
 
 
 
 
 
 
 
 (7)
 Mazuma Capital Corporation
 
 
 
 
 Capital leases are for specific periods, with terms of renewal and purchase options. Renewals are at the discretion of the entity that holds the lease. As of December 31, 2009, Property, plant and equipment, allocated to Buildings and mine infrastructure, includes $7 million of assets under capital leases and $1 million of related accumulated depreciation. Amortization charges relating to capital leases are included in Depreciation, depletion and amortization expense for the year ended December 31, 2009.  The average interest rate on the leases existing at December 31, 2009 is 5.6 percent. Payments are made monthly, including interest, through 2012.
 
 
 
 
 
 
 
 
 (8)
 CSI Latina Arrendamento Mercantil S.A.
 
 
 
 
 Capital lease is for specific periods, with terms of renewal and purchase options. Renewals are at the discretion of the entity that holds the lease. As of December 31, 2009 and 2008, Property, plant and equipment, allocated to Buildings and mine infrastructure, includes $2 million and $1 million of assets under capital leases and $1 million and $nil million of related accumulated depreciation, respectively. Amortization charges relating to capital leases are included in Depreciation, depletion and amortization expense for all periods presented.  The average interest rate on the leases existing at December 31, 2009 is 6.74 percent. Payments are made monthly, including interest, through 2012.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 49
 
 
  LONG-TERM DEBT (continued)
  
  
   
 2009
 
  
   
 $
 
 
 
 
 
 Future minimum lease payments under all the above capital leases together with the presentvalue of minimum lease payments as of December 31, 2009 are:
 
 
 
 
 2010
 
 10
 
 
 
 2011
 
 10
 
 
 
 2012
 
 9
 
 
 
 2013
 
 7
 
 
 
 2014
 
 9
 
 
 
 Thereafter
 
 48
 
 
 
 Total minimum lease payments
 
 93
 
 
 
 Less interest
 
 34
 
 
 
 Present value of net minimum lease payments
 
 59
 
 
 
 Less current portion
 
 5
 
 
 
 Long-term capital lease obligation
 
 54


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 50
 
 
 
   
 PROVISION FOR ENVIRONMENTAL REHABILITATION
 
 
   
 2009
 2008
 
 
 
 $
 $
 
     
 Long-term environmental obligations comprising decommissioning and restoration arebased on the Company’s environmental management plans, in compliance with the
    
   Decommissioning costs
             retirement and environmental obligations. Decommissioning costs are further describedin Note 5 – Asset retirement obligations.
      Restoration costs
     $2,184 million which includes a total estimated liability of $93 million in respect of equity accounted joint ventures. Refer to Note 16.  AngloGold Ashanti USA has posted
 reclamation bonds with various federal and governmental agencies to coverenvironmental rehabilitation obligations.  Refer to Note 22.
      The Company intends to finance the ultimate rehabilitation costs from the moniesinvested with the rehabilitation trust fund, the environmental protection bond as well as


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 51
 
  COMMITMENTS AND CONTINGENCIES
 
  
 
  
   
    
   
 2009
 2008
 
 
  
   $
 $
 
 
  (1)
   
 
 
 
  
     
  
     
  
     
  
   
  
   
  
     
  
     
  
     
  
   
   
  
     
  
     
  
    
  (1)
 Including commitments of $6 million (2008: $11 million) through contractual arrangements
 by equity accounted joint ventures.
 
 
 
 
 
 
 
  
  (2)
   
   
  
     
  
     
  
    
  (2)
 Other purchase obligations represent contractual obligations for the purchase of mining
 contract services, power, supplies, consumables, inventories, explosives and activatedcarbon.  Amounts exclude purchase obligations of equity accounted joint ventures.
 
 
 
 
 
  
 
    
   
  
  
 
 
 
  
 
  
   
  
   
 
    
   
  
   
 
 Year
 
 lbs (000)
 (1)
 
 Average
 contracted
 price ($/lbs)
 
  
 
      
 
      
 
     
 
 
 
  
 (1)
 
  Certain contracts allow the buyer to adjust the purchase quantity within a specified range.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 52
 
 
  COMMITMENTS AND CONTINGENCIES (continued)
 
 
 
 2009
 $
 2008
 $
 
 
     
 
 
 
 
  Groundwater pollution – South Africa
   
 
 
 
 
  The Company has identified groundwater contamination plumes at its Vaal River and West Wits operations in South Africa, which have occurred primarily as a result of seepage from mine residue stockpiles. Numerous scientific, technical and legal studies have been undertaken since 2002 to assist in determining the magnitude of the contamination and to find sustainable remediation solutions.  The Company has instituted processes to reduce future potential seepage and it has been demonstrated that Monitored Natural Attenuation (MNA) by the existing environment will contribute to improvement in some instances. Furthermore, literature reviews, field trials and base line modeling techniques suggest, but are not yet proven, that the use of phyto-technologies can address the soil and groundwater contamination at all South African operations. Subject to the completion of trials and the technology being a proven remediation technique, no reliable estimate can be made for the obligation.
   
 
 
 
 
  Deep ground water pollution – South Africa
   
 
 
 
 
  The Company has identified a flooding and future pollution risk posed by deep groundwater in the Klerksdorp and Far West Rand gold fields. Various studies have been undertaken by AngloGold Ashanti since 1999. Due to the interconnected nature of mining operations, any proposed solution needs to be a combined one supported by all the mines located in these gold fields. As a result, the Department of Mineral Resources and affected mining companies are involved in the development of a “Regional Mine Closure Strategy”. In view of the limitation of current information for the accurate estimation of a liability, no reliable estimate can be made for the obligation.
   
 
 
 
 
  Sales tax on gold deliveries – Brazil
    
 
 
 
 
  Mineração Serra Grande S.A. (“MSG”), received two tax assessments from the State of Goiás related to payments of sales taxes on gold deliveries for export. AngloGold Ashanti Brazil Mineração Ltda. manages the operation and its attributable share of the first assessment is approximately $47 million. In November 2006, the administrative council’s second chamber ruled in favor of MSG and fully cancelled the tax liability related to the first period.  The State of Goiás has appealed to the full board of the State of Goiás tax administrative council. The second assessment was issued by the State of Goiás in October 2006 on the same grounds as the first assessment, and the Company’s attributable share of the assessment is approximately $29 million. The Company believes both assessments are in violation of federal legislation on sales taxes.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 53
 
 
  COMMITMENTS AND CONTINGENCIES (continued)
 
 
 
 2009
 $
 2008
 $
 
 
  Other tax disputes – Brazil
    
 
 
 
 
  MSG received a tax assessment in October 2003 from the State of Minas Gerais related to sales taxes on gold. The tax administrators rejected the Company’s appeal against the assessment. The Company is now appealing the dismissal of the case. The Company’s attributable share of the assessment is approximately $8 million.  Subsidiaries of the Company in Brazil are involved in various disputes with tax authorities. These disputes involve federal tax assessments including income tax, royalties, social contributions and annual property tax. The amount involved is approximately $17 million.
   
 
 
 
 
  Withholding taxes – Ghana
    
 
 
 
 
  AngloGold Ashanti (Ghana) Limited received a tax assessment for $9 million during September 2009 following an audit by the tax authorities related to indirect taxes on various items.  Management is of the opinion that the indirect taxes are not payable and the Company has lodged an objection.
   
 
 
 
 
     
 
 
 
 
  Royalty – Boddington Gold Mine
   
 
 
 
 
  As a result of the sale of the interest in the Boddington Gold Mine during 2009, the Company is entitled to receive a royalty on any gold recovered or produced by the Boddington Gold Mine, where the gold price is in excess of Boddington Gold Mine’s cash costs plus $600 per ounce.  The royalty commences on July 1, 2010 and is capped at a total amount of $100 million.
   
 
 
 
 
  Insurance claim – Savuka Gold Mine
   
 
 
 
 
  On May 22, 2009, an insurable event occurred at Savuka Gold Mine.  The amounts due from the insurers are subject to a formula based on lost production, average gold price and average exchange rates subject to various excesses and the production and the preparation of supportable data.  The insurable amount is not yet determinable, but management expects that it is likely to exceed $40 million to be received during the first half of 2010.
   
 
 
 
 
     
 
 
 
 
  Oro Group surety
    
 
 
 
 
  The Company has provided surety in favor of the lender in respect of gold loan facilities to wholly-owned subsidiaries of Oro Group (Proprietary) Limited, an affiliate of the Company. The Company has a total maximum liability, in terms of the suretyships, of R100 million ($13 million).  The probability of the non-performance under the suretyships is considered minimal.
   
 
 
 
 
  AngloGold Ashanti USA reclamation bonds
    
 
 
 
 
  Pursuant to US environmental and mining requirements, gold mining companies are obligated to close their operations and rehabilitate the lands that they mine in accordance with these requirements. AngloGold Ashanti USA has posted reclamation bonds with various federal and state governmental agencies to cover potential rehabilitation obligations in amounts aggregating approximately $84 million.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 54
 
 
  COMMITMENTS AND CONTINGENCIES (continued)
 
 
 
 2009
 $
 2008
 $
 
 
  The Company has provided a guarantee for these obligations which would be payable in the event of AngloGold Ashanti USA not being able to meet its rehabilitation obligations. As at December 31, 2009, the carrying value of these obligations amounted to $31 environmental rehabilitation in the Company's consolidated balance sheet. The
  obligations will expire upon completion of such rehabilitation and release of such areas by the applicable federal and/or state agency.  AngloGold Ashanti is not indemnified by third parties for any of the amounts that may be paid by AngloGold Ashanti under its guarantee.
   
 
 
 
 
  AngloGold Ashanti environmental guarantees
    
 
 
 
 
  Pursuant to South African mining laws, mining companies are obligated to close their operations and rehabilitate the lands that they mine in accordance with these laws.  Provision for environmental rehabilitation in the Company’s consolidated balance sheet as of December 31, 2009 includes an amount of $115 million for future costs, excluding premature closure costs.  In order to cover against premature closure costs, the Company has secured bank guarantees to cover potential rehabilitation obligations of certain mines in South Africa.  The Company has provided a guarantee for these obligations which would be payable in the event of the South African mines not being able to meet such rehabilitation obligations.  As at December 31, 2009, the value of these obligations amounted to $134 million.  The obligations will expire upon compliance with all provisions of the environment management program in terms of South African mining laws.  AngloGold Ashanti is not indemnified by third parties for any of the amounts that may be paid by AngloGold Ashanti under its guarantee.
   
 
 
 
 
  Guarantee provided for term loan facility and revolving credit facility
    
 
 
 
 
  AngloGold Ashanti Limited, AngloGold Ashanti USA Incorporated and AngloGold Ashanti Australia Limited, as guarantors, have each guaranteed all payments and other obligations of AngloGold Ashanti Holdings plc and the other guarantors under the 2009 Term Facility and the 2009 Revolving Credit Facility. The total amount outstanding under the 2009 Term Facility as of December 31, 2009 amounted to $252 million and $nil under the 2009 Revolving Credit Facility.
   
 
 
 
 
  Guarantee provided for syndicated loan facility
    
 
 
 
 
  AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc, AngloGold Ashanti USA Incorporated and AngloGold Ashanti Australia Limited, as guarantors, have each guaranteed all payments and other obligations of the borrowers and the other guarantors under the $1.15 billion syndicated loan facility. The total amount outstanding under this facility as of December 31, 2009 amounted to $1,025 million.
   
 
 
 
 
  Guarantee provided for convertible bonds
    
 
 
 
 
  AngloGold Ashanti Limited has fully and unconditionally guaranteed all payments and other obligations of AngloGold Ashanti Holdings Finance plc regarding the issued $732.5 million 3.5 percent convertible bonds due 2014.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 55
 
 
  COMMITMENTS AND CONTINGENCIES (continued)
 
 
 
 2009
 $
 2008
 $
 
 
 
 
 
  The Company had guaranteed all payments and other obligations of AngloGold Ashanti Holdings plc regarding the issued $1.0 billion 2.375 percent convertible bonds. The bonds matured and were repaid on February 27, 2009.
   
 
 
 
 
  Hedging guarantees
    
 
 
 
 
  The Company has issued gold delivery guarantees of $370 million to several counterpart banks pursuant to which it guarantees the due performance of its subsidiaries AngloGold (USA) Trading Company, AngloGold South America Limited and Cerro Vanguardia S.A. under their respective gold hedging agreements.
   
 
 
 
 
  Ashanti Treasury Services Limited (“ATS”) hedging guarantees
    
 
 
 
 
  The Company together with its wholly-owned subsidiary AngloGold Ashanti Holdings plc has provided guarantees to several counterpart banks for the hedging commitments of its wholly-owned subsidiary ATS. The maximum potential amount of future payments is all moneys due, owing or incurred by ATS under or pursuant to the hedging agreements. At December 31, 2009 the marked-to-market valuation of the ATS hedge book was negative $443 million.
   
 
 
 
 
  Geita Management Company Limited (“GMC”) hedging guarantees
    
 
 
 
 
  The Company and its wholly-owned subsidiary AngloGold Ashanti Holdings plc have issued hedging guarantees to several counterpart banks in which they have guaranteed the due performance by GMC of its obligations under or pursuant to the hedging agreements entered into by GMC, and to the payment of all money owing or incurred by GMC as and when due.  The maximum potential amount of future payments is all moneys due, owing or incurred by GMC under or pursuant to the hedging agreements.  At December 31, 2009 the marked-to-market valuation of the GMC hedge book was negative $432 million.
   
 
 
 
 
  The Company assesses the credit quality of counterparts at least on a quarterly basis. As of December 31, 2009, the probability of non-performance is considered minimal.
   
 
 
 
 
  Vulnerability from concentrations
   
 
 
 
 
  The majority of AngloGold Ashanti’s 63,364 employees (2008: 62,895, 2007: 61,522) are subject to collective bargaining agreements. These agreements are established in negotiations between the Chamber of Mines, the body that represents the gold mining industry in South Africa, and representative groups of labor. The agreements have a two-year validity period.  The most recent settlement negotiation was completed in July 2009, when the parties reached an agreement covering the period from July 1, 2009 to June 30, 2011.
   
 
 
 
 
  There is a concentration of risk in respect of recoverable value added tax and fuel duties from the Tanzanian government.  Recoverable value added tax due from the Tanzanian government to the Company amounts to $36 million at December 31, 2009 (December 31, 2008: $16 million).  The amounts outstanding have been discounted to their present value at a rate of 7.82 percent.
   
 
 
 
 
  Recoverable fuel duties from the Tanzanian government to the Company amount to $48 million at December 31, 2009 (December 31, 2008: $37 million). Fuel duty claims are required to be submitted after consumption of the related fuel and are subject to authorization by the Customs and Excise authorities.  The amounts outstanding have been discounted to their present value at a rate of 7.82 percent.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 56
 
  STOCKHOLDERS’ EQUITY
  On May 15, 2009, shareholders approved the increase in the authorized common stock, from 400,000,000 shares of common stock to 600,000,000 shares of common stock of 25 ZAR cents each.  At a general meeting held in 2006, 1,760,000 shares of common stock of 25 ZAR cents each were authorised for issue, at the discretion of the directors, to employee share schemes to be implemented in countries other than South Africa, where the Company has its operations.  This authority lapsed on December 31, 2009.
 
 
  During 2009, 8,757,259 shares of common stock were issued and 171,943 E shares of common stock were cancelled.  These issues and cancellations resulted in the movement year-on-year of 8,947,046 shares of common stock and E shares as follows:
   September 8, 2009, amounting to $280 million net of costs, which funds were applied on the acquisition of an initial 35 percent interest in the Kibali gold project;
    shares of common stock which were cancelled in accordance with the cancellation formula pertaining to the Employee Share Ownership Plan; and
   
 
  During 2008, 76,025,939 shares of common stock were issued and 173,289 E shares of common stock were cancelled.  These issues and cancellations resulted in the movement year-on-year of 76,083,700 shares of common stock and E shares as follows:
     in the Cripple Creek & Victor Gold mine from Golden Cycle Gold Corporation effective July 1, 2008, amounting to $118 million;
      common stock which were cancelled in accordance with the cancellation formula pertaining to the Employee Share Ownership Plan; and
   
 
  During 2007, 1,221,318 shares of common stock and 94,230 E shares of common stock were issued while 139,770 E shares of common stock were cancelled.  These issues and cancellations resulted in the movement year-on-year of 1,236,498 shares of common stock and the net cancellation of 45,540 E shares of common stock as follows:
     139,770 E shares of common stock which were cancelled in accordance with the cancellation formula pertaining to the Employee Share Ownership Plan;
     (1)
    (1)
   (1)
 Shares of common stock and E shares of common stock issued in respect of the Employee Share Ownership Plan are eliminated
 as shares held within the Company.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 57
 
 
  STOCKHOLDERS’ EQUITY (continued)
 
 
  At the annual general meeting of shareholders held on May 15, 2009, shareholders approved, as a general authority, authorization to the board of directors to allot and issue, in their discretion, and for such purpose and on such terms as they may in their discretion determine, up to a maximum of 5 percent of the total number of common stock of 25 ZAR cents each in the issued share capital of the Company from time to time.  During 2009, a total of 7,624,162 shares of common stock were issued under this authority.  Shareholders will be asked to renew this authority at the forthcoming annual general meeting to be held on May 7, 2010.
 
 
  Redeemable preference shares
  A and B redeemable preference shares issued of 2,000,000 and 778,896 shares, respectively, all of which are held by a wholly-owned subsidiary Eastvaal Gold Holdings Limited, may not be transferred and are redeemable from the realization of the assets relating to the Moab Lease area after cessation of mining operations in the area.  The shares carry the right to receive dividends equivalent to the profits (net of royalty, ongoing capital expenditure and taxation) from operations in the area.  No further A and B redeemable preference shares will be issued.
 
  FAIR VALUE MEASUREMENTS
   
 
 The Company adopted the updated FASB ASC guidance on fair value measurements and disclosures for the Company’s non-financial assets and non-financial liabilities measured at fair value on a non-recurring basis as of January 1, 2009, with no material impact on the Company’s financials. During the third quarter of 2009, the Company fully impaired the oxide treatment plant at Obuasi. See “Note 5  Costs and expenses: Impairment of assets” for additional information. During the current year the Company transferred certain assets to “held for sale” and accordingly measured them at fair value less estimated costs to sell. Refer to Note 17. During 2009, the Company also measured certain investments in equity accounted joint ventures at fair value. Refer to Note 16.
 
  
 An impairment loss on the investment in B2Gold of $12 million was recognized in the third quarter of 2009 in the income statement. See “Note 5  Costs and expenses: Loss/(profit) on sale of assets, realization of loans, indirect taxes and other” for additional information. Since the third quarter, the fair value of B2Gold has increased and an unrealized gain of $21 million pertaining to the investment is included in accumulated other comprehensive income as of December 31, 2009.
 
  
 The FASB ASC guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
 
  
 Level 1  -  Quoted prices in active markets for identical assets or liabilities. Level 2  -  Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted
 prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
 Level 3  -  Unobservable inputs that are supported by little or no market activity and that are significant to the fair
  
  
 The Company utilizes the market approach to measure fair value.  The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
 
  
 The following table sets out the Company’s financial assets and (liabilities) measured on a recurring basis at fair value, by level within the hierarchy as at December 31, 2009 (in US Dollars, millions):


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 58
 
 
  FAIR VALUE MEASUREMENTS (continued)
   
  
 Items measured at fair value on a recurring basis
  Description
 Level 1
 Level 2
 Level 3
 Total
 
                        
 
 The Company’s cash equivalents are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The cash instruments that are valued based on quoted market prices in active markets are primarily money market securities. Due to the short maturity of cash, carrying amounts approximate fair values.
 
  
 The Company’s marketable equity securities are included in Other long-term assets in the Company’s consolidated balance sheet. They consist of investments in ordinary shares and are valued using quoted market prices in active markets and as such are classified within Level 1 of the fair value hierarchy. The fair value of the marketable equity securities is calculated as the quoted market price of the marketable equity security multiplied by the quantity of shares held by the Company.
    The Company’s derivative instruments are valued using pricing models and the Company generally uses similar models to value similar instruments. Options associated with marketable equity securities and the conversion features of convertible bonds are included as derivatives on the balance sheet.  Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit spreads, measures of volatility and correlations of such inputs. The Company’s derivatives trade in liquid markets, and as such, model inputs are observable. Such instruments are typically classified within Level 2 of the fair value hierarchy.
    Items measured at fair value on a non-recurring basis
 
 
  During the third quarter of 2009, the Company fully impaired the oxide treatment plant at Obuasi, resulting in a loss of $4 million which is included in earnings for the period. During the current year long-lived assets with a carrying value of $68 million were transferred to assets held for sale and were written down to fair value less costs to sell of $64 million. Refer to Note 17. In addition, during 2009 investments in equity accounted joint ventures with a carrying value of $24 million were written down to fair value of $15 million. Refer to Note 16. This resulted in a loss of $13 million which is included in earnings for the period. Fair values of these assets were based on sales agreements with third parties and as such are classified within Level 2 of the fair value hierarchy.
 
 
  
 
 
  Fair value/fair
 value less
 costs to sell
 (on held for
 sale)
 Level 1
 Level 2
 Level 3
 Total
 gain/(loss)
 
 
 Description
 
  $
 $
 $
 $
 $
 
 
  (1)
    
   
     
   
     
   
     (1)


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 59
 
  FINANCIAL RISK MANAGEMENT ACTIVITIES
  
 
  In the normal course of its operations, the Company is exposed to gold and other commodity price, currency, interest rate, equity price, liquidity and non-performance risk, which includes credit risk. The Company is also exposed to certain by-product commodity price risk. In order to manage these risks, the Company enters into derivative transactions and has developed a risk management process to facilitate, control and monitor these risks. The board has approved and monitors this risk management process, inclusive of documented treasury policies, counterpart limits, controlling and reporting structures. The Company does not acquire, hold or issue derivatives for trading purposes. Although all derivative transactions executed by the Company serve to economically manage the Company’s risk to the market factors discussed above, not all such derivatives qualify for hedge accounting treatment, including instances whereby management has elected to not designate such derivatives as part of a qualifying hedge accounting relationship.
    The financial risk management activities objectives of the Company are as follows:
 •
 Safeguarding the Company’s core earnings stream through the effective control and management of gold and other commodity price risk, foreign exchange risk and interest rate risk;
 •
  •
  •
 Ensuring that contracts and agreements related to risk management activities are coordinated, consistent throughout the Company and comply where necessary with relevant regulatory and statutory requirements.
    A number of products, including derivatives are used to satisfy these objectives.  Contracts that meet the criteria for hedge accounting are designated as the hedging instruments hedging the variability of forecasted cash flows from the sale of production into the spot market and from capital expenditure denominated in a foreign currency and are classified as cash flow hedges under the FASB ASC guidance on derivatives and hedging. Cash flows related to these instruments designated as qualifying hedges are reflected in the consolidated statement of cash flows in the same category as the cash flow from the items being hedged. Accordingly, cash flows relating to the settlement of forward sale commodity derivatives contracts hedging the forecasted sale of production into the spot market as well as the forward sale currency derivative contracts hedging the forecasted capital expenditure, have been reflected upon settlement as a component of operating cash flows.   The ineffective portion of matured and existing cash flow hedges recognized in loss on non-hedge derivatives in the income statement during the year was $5 million (2008: $8 million; 2007: $10 million). Of the contracts accounted for as cash flow hedges, contracts with a fair value of $37 million (2008: $123 million; 2007: $194 million), a liability at December 31, 2009 are expected to be reclassified from accumulated other comprehensive income and recognized as a reduction in product sales or as an adjustment to depreciation expense pertaining to capital expenditure during 2010.
 
     A loss on non-hedge derivatives of $1,452 million was recorded in 2009 (2008: $258 million; 2007: $808 million).  See “Note 5 – Cost and expenses: Non-hedge derivative loss” for additional information.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 60
 
 
  FINANCIAL RISK MANAGEMENT ACTIVITIES (continued)
 
  Gold price risk management activities
  
  Gold derivative instruments are denominated in South African rands, US dollars and Australian dollars. The derivative instruments utilized are forward sale and purchase contracts, purchased and sold put options, and purchased and sold call options. The mix of derivative instruments, the volume of production hedged and the tenor of the hedge book is continuously reviewed in light of changes in operational forecasts, market conditions and the Company’s hedging policy as set by the board of directors. The Company’s reserve and financial strength has allowed it to arrange unmargined credit lines with counterparts.
 
 
  Some of the instruments described above are designated and accounted for as cash flow hedges. The remaining cash flow hedged forecast transactions are expected to occur during 2010, in line with the maturity date of the hedging instrument.
 
 
  Forward sales contracts establish the price of future gold sales at a specified price. A number of these contracts are intended by AngloGold Ashanti for delivery against production in a future period. The volume of net outstanding forward sales type contracts at the end of 2009 was 571kg (2008: 39,990kg).  The volume of outstanding net call options sold was 120,594kg (2008: 146,542kg) and the volume of outstanding net put options sold was 27,071kg (2008: 16,963kg).
 
 
  A put option gives the put buyer the right, but not the obligation, to sell the underlying to the put seller at a predetermined price on a predetermined date. A call option gives the call buyer the right, but not the obligation, to buy the underlying from the call seller at a predetermined price on a predetermined date.  The Company’s risk in selling gold call options is unlimited but mitigated by the fact that the Company produces the commodity required by the option contract and can partially offset any loss resulting from sold call options via the sale of production in the open market.
    The fair value of early termination options as at December 31, 2009 amounted to $nil (December 31, 2008: $498 million) as these options were part of the hedge buy-back effected during July 2009.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 61
 
 
  FINANCIAL RISK MANAGEMENT ACTIVITIES (continued)
 
  Rights offer and hedge buy-backs
  
  During 2008, the Company communicated a board approved strategy to begin reducing its outstanding gold derivatives position in order to be more exposed to spot gold prices.  The Company also communicated that it would begin considering alternatives to reduce its outstanding gold derivatives position in future periods. The principal purpose of the rights offer concluded during July 2008 was to provide additional financial resources to improve the Company’s financial flexibility.  In particular, the net proceeds allowed the Company to significantly restructure and reduce its gold derivatives position, which has adversely affected financial performance in recent years, while also being able to continue to fund the Company’s principal development projects and exploration growth initiatives.  The Company capitalized on a weaker gold market during 2008 in executing a combination of early cash and physical settlement of a portion of its non-hedge derivative contracts (which had been recorded at fair value in the Company’s financial statements, with changes in such fair value recorded in the income statement), originally scheduled to mature in years 2008 to 2010.
    During July 2009, the Company also embarked on a hedge buy-back that resulted in the accelerated cash settlement of both non-hedge and forward gold contracts qualifying for the NPSE. See “Note 5 – Cost and expenses: Non-hedge derivative loss” for additional information relating to this transaction, including its impact on the 2009 consolidated financial statements.
    The Company has therefore been able to make substantial progress in the reduction of its gold derivatives position, and although its results of operations and cash flows for 2008 and 2009 were adversely impacted given the early cash settlement of non-hedge derivatives and certain NPSE contracts with low contracted sales prices, respectively, committed ounces have been reduced to 3.90 million ounces as at December 31, 2009 (December 31, 2008: 5.99 million committed ounces).  During the year ended December, 2009, the Company also continued to deliver into hedge commitments, as part of its strategy to reduce its overall hedge position and increase exposure to spot gold prices. The combination of the early cash settlement and physical delivery against derivatives contracts will allow the Company to benefit from improved participation in the spot gold price in future periods, earlier than anticipated.
 
  Net delta open hedge position as at December 31, 2009
  
  The Company has an established practice of actively managing its hedged commitments under changing market circumstances.
    As of December 31, 2009, the hedge book reflected a net delta tonnage position of 3.49 million ounces (108 tonnes).  As of December 31, 2008, the hedge book reflected a net delta tonnage position of 5.22 million ounces (162 tonnes).
    The marked-to-market value of all hedge transactions making up the hedge positions as at December 31, 2009 was a liability of $2,175 million, which represents a decrease of $280 million from a liability of $2,455 million as at December 31, 2008. This value was based on a gold price of $1,102 per ounce, exchange rates of $1 = R7.435 and A$1 = $0.8967 and the prevailing market interest rates and volatilities at December 31, 2009.  The values as at December 31, 2008 were based on a gold price of $872 per ounce, exchange rates of $1 = R9.4550 and A$1 = $0.6947 and the prevailing market interest rates and volatilities at that date.
    These marked-to-market valuations are not predictive of the future value of the hedge position, nor of the future impact on the revenue of the Company.  The valuation represents the theoretical cost of exiting all hedge contracts at the time of valuation, at market prices and rates available at that time.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 25.
 FINANCIAL RISK MANAGEMENT ACTIVITIES (continued)
 
 
      
 
  Year
 
 2010
 2011
 2012
 2013
 2014
 2015
 
 Total
 
 
 DOLLAR GOLD
 
   
   *
      *
   
 
 
 *
      *
   
   
      
   
   
      
   
   
       
   
   
       
   
 RAND GOLD
 
   
   *
   *
   
 
 
 *
   *
   
   
   
   
   
   
   
   
   
   
   
   
   
 AUD DOLLAR GOLD
 
   
   
   
   
    
   
   
   
   
   
   
   
    
       
   **
   
       
   
 
 
   
  
      *
  Represents a net long gold position and net short US Dollars/rands position resulting from both forward sales and purchases for the period.
   
 **
  The Delta of the hedge position indicated above is the equivalent gold position that would have the same marked-to-market sensitivity for a small change in the gold price.  This is calculated using the Black-Scholes option formula with the ruling market prices, interest rates and volatilities as atDecember 31, 2009.
   
 ***
  Weighted average percentage based on 2009 full year production of 4,599,000 ounces.
  
  
 
  
  Year
 2010
 
 
 GOLD LEASE RATE SWAPS
 
   
    
    
  (1)
     
 
  (1)
 Gold borrowing cost relating to Australian dollar gold forwards:
 
 
  The Australian dollar denominated gold forward contract prices are presented on a net basis where the final price of the contract is determined by the cost of borrowing gold over the full duration of the contract.  The net prices in the table above have been adjusted to take account of the totalexpected future cost of all accumulated costs incurred to date and the expected future borrowing cost based on ruling market prices.  The amount shown under “Gold borrowing cost associated with forward contracts” in the table above is the face value of the borrowing amount and the period inwhich it matures.  The interest rates shown are the future market rates prevailing at the time of the financial statements.
 
 
 
 
 Foreign exchange price risk protection agreements
 
 
 
 The Company enters into currency forward exchange and currency option contracts to hedge certain anticipated transactions denominated in foreign currencies. The objective of the Company’s foreign currency hedging activities is to protect the Company from the risk that the eventual cash flows resulting from transactions denominated in US dollars will be adversely affected by changes in exchange rates.
 
 
 
 As at December 31, 2009, the Company had no open forward exchange or currency option contracts in its currency hedge position.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 63
 
 
  FINANCIAL RISK MANAGEMENT ACTIVITIES (continued)
  
 
  Interest rate and liquidity risk
  
  Fluctuations in interest rates impacts interest paid and received on the short-term cash investments and financing activities, giving rise to interest rate risk.
    In the ordinary course of business, the Company receives cash from the proceeds of its gold sales and is required to fund working capital requirements.  This cash is managed to ensure surplus funds are invested in a manner to achieve market related returns while minimizing risks.  The Company is able to actively source financing at competitive rates.  The counterparts are financial and banking institutions and their credit ratings are regularly monitored by the company.
 
 
 
 Cash and loans advanced maturity profile
 
 
 
 
 2009
 2008
 
 Maturity date
 Currency
 Fixed rate
 investment
 amount
 (million)
 Effective
 rate %
 Floating rate
 investment
 amount
 (million)
 Effective
 rate %
 Fixed rate
 investment
 amount
 (million)
 Effective
 rate %
 Floating rate
 investment
 amount
 (million)
 Effective
 rate %
 
 All less than one year
 USD
 506
 0.29
 178
 0.13
 166
 2.48
 121
 1.95
 
 
 ZAR
 1,135
 7.03
 839
 6.38
 930
 11.50
 668
 10.84
 
 
 AUD
 -
 -
 13
 3.52
 -
 -
 -
 -
 
 
 EUR
 -
 -
 1
 0.50
 -
 -
 -
 -
 
 
 CAD
 -
 -
 1
 0.08
 -
 -
 -
 -
 
 
 HKD
 -
 -
 1
 0.01
 -
 -
 1
 2.25
 
 
 BRL
 -
 -
 152
 10.20
 -
 -
 144
 13.52
 
 
 ARS
 -
 -
 4
 10.23
 -
 -
 5
 12.50
 
 
 NAD
 -
 -
 -
 -
 155
 11.58
 96
 9.40
 
 
 
 Borrowings maturity profile
 
 
 
 
 Between
 Between
 
 
 
 Within one year
 one and two years
 two and five years
 After five years
 Total
 
 Currency
 Borrowings
 Amount
 (million)
 Effective
 Rate
 %
 Borrowings
 Amount
 (million)
 Effective
 Rate
 %
 Borrowings
 Amount
 (million)
 Effective
 Rate
 %
 Borrowings
 Amount
 (million)
 Effective
 Rate
 %
 Borrowings
 amount
 (million)
 
 $
 1,290
 2.3
 9
 3.5
 618
 3.5
 -
 -
 1,917
 
 ZAR
 2
 9.8
 2
 9.8
 14
 9.8
 240
 9.8
 258
 
 BRL
 3
 6.1
 3
 6.0
 5
 6.0
 -
 -
 11
 
 
 
 Interest rate risk
 
 
 
 Fixed for less than one year
 Fixed for between one and three
 years
 Fixed for greater than three years
 Total
 
 Currency
 Borrowings
 Amount
 (million)
 Effective
 Rate
 %
 Borrowings
 Amount
 (million)
 Effective
 Rate
 %
 Borrowings
 Amount
 (million)
 Effective
 Rate
 %
 Borrowings
 amount
 (million)
 
 $
 1,290
 2.3
 11
 3.5
 616
 3.5
 1,917
 
 ZAR
 2
 9.8
 5
 9.8
 251
 9.8
 258
 
 BRL
 3
 6.1
 5
 6.0
 3
 6.0
 11


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 64
 
 
  FINANCIAL RISK MANAGEMENT ACTIVITIES (continued)
  
 
  Non-performance risk
  
  Realization of contracts is dependent upon the counterparts’ performance.  The Company has not obtained collateral or other security to support financial instruments subject to non-performance risk, but regularly monitors the credit standing of counterparts.  The Company spreads its business over a number of financial and banking institutions and believes that little to no concentration of non-performance risk exists.  Limits for each counterpart are based on the assessed credit quality of each counterpart.  The AngloGold Ashanti Treasury Committee makes recommendations for board approval of all counterparts and the limits to be applied to each counterpart.  Where possible, management puts ISDA netting agreements in place.
    The combined maximum credit exposure at the balance sheet date amounts to $335 million (2008: $571 million).  Credit risk exposure netted by counterparts amounts to $104 million (2008: $207 million). No set-off is applied to  balance sheet amounts due to the different maturity profiles of assets and liabilities.
 
 
  
 
 
 
 At December 31,
 
 
 
 2009
 
 $
 
 Forward sales type agreements - commodity
 
 283
 
 Option contracts - commodity
 
 47
 
 Warrants on shares
 
 5
 
 
 
 335
 
 
 
 
 The fair value of derivative assets and liabilities reflects non-performance risk relating to the counterparts and the Company, respectively, as at December, 2009.
 
 
 
  
  Number of Counterparts
 Type
 Credit Rating (Fitch)
 
 4
 International Bank
 AA
 
 10
 International Bank
 AA-
 
 9
 International Bank
 A+
 
 1
 International Bank
 A
 
 2
 International Bank
 A-
 
 1
 International Bank
 BBB+
 
 1
 South African Bank
 AAA(zaf)
 
 3
 South African Bank
 AA(zaf)
 
 1
 South African Bank
 A+(zaf)
 
 6
 Brazilian Bank
 AAA(bra)
 
 4
 Brazilian Bank
 AA+(bra)
 
 1
 Brazilian Bank
 AA(bra)
 
 1
 Brazilian Bank
 A+(bra)
 
 1
 Brazilian Bank
 A(bra)
 
 1
 Trade Finance House
 Not rated


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 25.
 FINANCIAL RISK MANAGEMENT ACTIVITIES(continued)
 
 
  Due to the inability of a single counterpart to accept the physical delivery of gold under the terms of NPSE designated forward contracts expiring in April through June 2008, the Company cash settled such contracts with this counterpart during that period.  In 2008, the Company also reclassified all remaining outstanding contracts with this counterpart from the NPSE category to the “non-hedge derivatives” category as they no longer qualified for the exemption permitted by the FASB ASC guidance on derivatives and hedging.  See “Note 5 – Cost and expenses: Non-hedge derivative loss” for additional information.
  
  The Company has not experienced and does not anticipate non-performance by any other counterparts.
 
  Fair value of financial instruments
  
  The estimated fair values of financial instruments are determined at discrete points in time based on relevant market
 information.  The estimated fair values of the Company’s financial instruments, as measured at December 31, 2009
 and 2008, are as follows (assets (liabilities)):
 
  
 
   
  December 31, 2009
 
 
 
 December 31, 2008
 
  
 
  
 
  Carrying
 Carrying
  
 
  
 
  amount
 Fair Value
 amount
 Fair Value
 
 
  
 
   
  $
 $
 
 
 $
 $
 
 
  
 
  
      
   
 
  
      
   
 
  
      
   
 
  
      
   
 
  (1)
   
   
   
   
  
 
 
 
 
  
 (1)
 Carrying amounts represent on-balance sheet derivatives and fair value includes off-balance sheet NPSE contracts in 2008.
 
  The following is the fair value of the derivative (liabilities)/assets split by accounting designation:
 
 
  
  December 31, 2009
 
 
  Assets
 
 
  Balance Sheet location
 Cash flow
 hedge
 accounted
 Non-hedge
 accounted
 Total
 
 
    
  $
 $
 $
 
 
   
     
    
     
    
     
    
     
    
     
   December 31, 2009
 
 
  Liabilities
 
 
  Balance Sheet location
 Cash flow
 hedge
 accounted
 Non-hedge
 accounted
 Total
 
 
  $
 $
 $


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 66
 
 
  FINANCIAL RISK MANAGEMENT ACTIVITIES (continued)
  
 
 
 
 
 
 December 31, 2008
 
 
 
 Assets
 
 
 
 Balance Sheet location
 Normal sale
 exempted
 Cash flow
 hedge
 accounted
 Non-hedge
 accounted
 Total
 
 
 
 
 $
 $
 $
 $
 
 Forward sales type agreements - commodity
 Current assets - derivatives
 -
 -
 468
 468
 
 Option contracts - commodity
 Current assets - derivatives
 -
 -
 56
 56
 
 Forward sales agreements - currency
 Current assets - derivatives
 -
 -
 25
 25
 
 Option contracts - currency
 Current assets - derivatives
 -
 -
 6
 6
 
 Interest rate swaps – Gold
 Current assets - derivatives
 -
 -
 15
 15
 
 Total hedging contracts
 
 -
 -
 570
 570
 
 Warrants on shares
 Current assets - derivatives
 -
 -
 1
 1
 
 Total derivatives
 
 -
 -
 571
 571
 
 
 
 
 
 
 
 
 December 31, 2008
 
 
 
 Liabilities
 
 
 
 Balance Sheet location
 Normal sale
 exempted
 (1)
 Cash flow
 hedge
 accounted
 Non-hedge
 accounted
 Total
 
 
 
 $
 $
 $
 $
 
 Forward sales type agreements - commodity
 Non-current liabilities -  derivatives
 -
 (25)
 (105)
 (130)
 
 Forward sales type agreements - commodity
 Current liabilities -  derivatives
 (622)
 (121)
 (311)
 (1,054)
 
 Option contracts - commodity
 Current liabilities - derivatives
 (534)
 -
 (1,311)
 (1,845)
 
 Forward sales agreements - currency
 Current liabilities - derivatives
 -
 (1)
 (9)
 (10)
 
 Option contracts - currency
 Current liabilities - derivatives
 -
 -
 (5)
 (5)
 
 Interest rate swaps – Gold
 Current liabilities - derivatives
 (24)
 -
 -
 (24)
 
 Total derivatives
 (1,180)
 (147)
 (1,741)
 (3,068)
 
 (1)
 NPSE exempted contracts not reported on balance sheet.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
 F - 67
 
 
 25.
 FINANCIAL RISK MANAGEMENT ACTIVITIES(continued)
 
 
 
  
 
 Non-hedge derivative gain/(loss) recognized
 
 
 
 
 
  
 
 
  
 Year ended December 31, 2009
 
  
 
  
 Location of gain/(loss) in income statement           $
  
  
  Realized
 
 
 
  
  
  Forward sales type agreements - commodity
 Non-hedge derivative gain/(loss)
 (535)
  
  
  Option contracts - commodity
 Non-hedge derivative gain/(loss)
 (144)
  
  
  Forward sales agreements - currency
 Non-hedge derivative gain/(loss)
 107
  
  
  Option contracts - currency
 Non-hedge derivative gain/(loss)
 12
  
  
  Interest rate swaps - Gold
 Non-hedge derivative gain/(loss)
 16
  
  
  
 
 (544)
  
 
 
  Unrealized
 
 
 
  
  
  Forward sales type agreements - commodity
 Non-hedge derivative gain/(loss)
 (188)
  
  
  Option contracts - commodity
 Non-hedge derivative gain/(loss)
 (648)
  
  
  Forward sales agreements - currency
 Non-hedge derivative gain/(loss)
 (15)
  
  
  Option contracts - currency
 Non-hedge derivative gain/(loss)
 (3)
  
  
  Interest rate swaps - Gold
 Non-hedge derivative gain/(loss)
 (25)
  
  
  Option component of convertible bonds
 Non-hedge derivative gain/(loss)
 (33)
  
  
  Embedded derivatives
 Non-hedge derivative gain/(loss)
 (1)
  
  
  Warrants on shares
 Non-hedge derivative gain/(loss)
 5
  
  
  
 
 (908)
  
 
 
  Loss on non-hedge derivatives
 
 (1,452)
  
  
  Includes $580 million loss related to accelerated settlement of contracts previously designated as NPSE.
 
  
  
  Includes $556 million loss related to re-designation of contracts formerly qualifying for the NPSE designation.
 
 
  
  
 
 
 Other comprehensive income
 
 
 
 
 
 
 
 
 Year ended December 31, 2009
 
 
 Cash flow
 hedges, before
 tax
 Cash flow hedges removed from
 equity, before tax
 Hedge ineffectiveness, before tax
 
 
 $
 $
 $
 
 
 Gain/(loss)
 recognized in
 accumulated
 other
 comprehensive
 income (effective
 portion)
 Location of
 (gain)/loss
 reclassified from
 accumulated other
 comprehensive
 income into
 income (effective
 portion)
 Amount of (gain)/loss
 reclassified from
 accumulated
 other
 comprehensive
 income into
 income (effective
 portion)
 Location of (gain)/loss
 recognized in income
 (ineffective portion)
 Amount of(gain)/loss
 recognized in
 income
 (ineffective
 portion)
 
 Forward sales type agreements - commodity
 (16)
 Product sales
 137
 Non-hedge derivatives
 gain/(loss)
 5
 
 Forward sales agreements - currency
 (1)
 Depreciation
 -
 Non-hedge derivatives
 gain/(loss)
 -
 
 
 (17)
 137
 5


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 68
 
 
  FINANCIAL RISK MANAGEMENT ACTIVITIES (continued)
 
 
 Other comprehensive income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Accumulated other
 comprehensive income
 as of    January 1, 2009
 Changes in fair
 value recognised
 in 2009
 Reclassification
 adjustments
 Accumulated other
 comprehensive income
 as of December 31, 2009
 
 
 
 
 $
 $
 $
 $
 
 Derivatives designated as
 
 
 
 
 
 
 
 
 
 Gold sales
 
 
 (178)
 (16)
 142
 (52)
 
 Capital expenditure
 
 
 (2)
 (2)
 1
 (3)
 
 Before tax totals
 
 
 (180)
 (18)
 143
 (55)
 (1)
 
 After tax totals
 
 
 (112)
 (13)
 103
 (22)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Accumulated other
 comprehensive income
 as of    January 1, 2008
 Changes in fair
 value recognised
 in 2008
 Reclassification
 adjustments
 Accumulated other
 comprehensive income
 as of December 31, 2008
 
 
 
 
 $
 $
 $
 $
 
 Derivatives designated as
 
 
 
 
 
 
 
 
 
 Gold sales
 
 
 (312)
 (87)
 221
 (178)
 
 Capital expenditure
 
 
 -
 (2)
 -
 (2)
 
 Before tax totals
 
 
 (312)
 (89)
 221
 (180)
 (1)
 
 After tax totals
 
 
 (216)
 (61)
 165
 (112)
 (1)
 Includes cumulative net translation differences of $18 million (2008: $33 million) resulting from the revaluation and settlement of non US
 dollar denominated cash flow hedge contracts.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 69
 
 
  FINANCIAL RISK MANAGEMENT ACTIVITIES (continued)
 
 
 
 
 Maturity profile of on-balance sheet derivatives, at carrying value
 
 
 
 
 
 
 
 
 
 
 Total
 $
 
 
 2009
 Assets
 $
 
 
 Liabilities
 $
 
 
 
 
 
 Amounts to mature within twelve months of balance sheet date
 (2,195)
 
 
 330
 
 
 (2,525)
 
 
 
 
 
 Amounts maturing between one and two years
 
 5
 1
 5
 
 
 -
 
 
 
 
 
 Amounts maturing between two and five years
 (175)
 
 
 -
 
 
 (175)
 
 
 
 
 
 Amounts to mature thereafter
 (1)
 
 
 -
 
 
 (1)
 
 
 
 
 
 Total
 (2,366)
 
 
 335
 
 
 (2,701)
 
 
 
 
 
 
 
 
 
 
 
 
 
 Total
 $
 
 
 2008
 Assets
 $
 
 
 Liabilities
 $
 
 
 
 
 
 Amounts to mature within twelve months of balance sheet date
 (1,187)
 
 
 571
 
 
 (1,758)
 
 
 
 
 
 Amounts maturing between one and two years
 (49)
 
 
 -
 
 
 (49)
 
 
 
 
 
 Amounts maturing between two and five years
 (81)
 
 
 -
 
 
 (81)
 
 
 
 
 
 Total
 (1,317)
 
 
 571
 
 
 (1,888)
 
 
        Cash restricted for use, cash and cash equivalents and short-term debt
  
      Long-term debt
  
  The fair value of the convertible bonds are shown at their quoted market value. Other long-term debt re-prices on a short-term floating rate basis, and accordingly the carrying amount approximates to fair value.
    Derivatives
  
  The fair value of volatility-based instruments (i.e. options) are estimated based on market prices, volatilities, credit risk and interest rates, while the fair value of forward sales and purchases are estimated based on the quoted market prices and credit risk for the contracts at December 31, 2009 and 2008.  The Company uses the Black-Scholes option pricing formula to value option contracts.  The amounts disclosed in 2008 include those contracts accounted for as normal purchase and sale exemption derivatives.
    Sensitivity analysis
  
  Derivatives
  
  A principal part of the Company's management of risk is to monitor the sensitivity of derivative positions in the hedge book to changes in the underlying factors, including commodity prices, foreign exchange rates and interest rates under varying scenarios.  Additionally the Company’s management of risk is to monitor the sensitivity of the convertible bonds to changes in AngloGold Ashanti Limited’s share price and warrants on shares.
    The following table discloses the approximate sensitivities, in US dollars, of the fair value of the hedge book, warrants on shares and the convertible bonds to key underlying factors at December 31, 2009 (actual changes in the timing and amount of the following variables may differ from the assumed changes below).
    The table sets out the impact on the fair value of the hedge book of an incremental parallel fall or rise in the respective yield curves at the beginning of each month, quarter or year (as is appropriate) from January 1, 2010.  The yield curves match the maturity dates of the individual derivative positions in the hedge book.  These figures incorporate the impact of any option features in the underlying exposures.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 25.
 FINANCIAL RISK MANAGEMENT ACTIVITIES(continued)
 
  
  2009
  
 
 
 Change in
 underlying
 factor (+)
 Cash flow
 hedge
 accounted
 Non-hedge
 accounted
 Total change in
 fair value
  
 
       
 Hedge book
 
     
       
       
       
       
       
   
 Convertible bonds
  
       
   
 Warrants on shares
  
       
       
  2009
  
 
 
 Change in
 underlying
 factor (-)
 Cash flow
 hedge
 accounted
 Non-hedge
 accounted
 Total change in
 fair value
  
 
       
 Hedge book
 
     
       
       
       
       
       
   
 Convertible bonds
  
       
   
 Warrants on shares
  
       
      
  
      
 26.
 ADDITIONAL CASH FLOW INFORMATION
 
 
 
 
 
 
 
 2009
 $
 2008
 $
 2007
 $
 
 
      
 
 
 
   
   
     
   
   
     
 
 
 
      
 
 
 
       
       
       
   (1)
  
     
 
 
 (1)
   Foreign exchange transaction gain/(loss) included in Interest, dividends and other amounts to $112 million (2008: $4 million and 2007: $(1) million).


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 71
 
  PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS
 
  The provision for pension and post-retirement medical funding represents the provision for health care and pension benefits for employees, retired employees and their dependants.
    Defined benefit plans
  
   
 
 
 
 
 
 2009
 2008
 2007
 
 
 
 $
 $
 $
 
 
 AngloGold Ashanti Pension Fund (asset)/liability
 (5)
 11
 (36)
 
 
 Post Retirement medical scheme for AngloGold Ashanti South African employees
 149
 115
 168
 
 
 Other defined benefit plans
 10
 11
 9
 
 
 Sub Total
 154
 137
 141
 
 
 Transferred to other non-current assets
 
 
 AngloGold Ashanti Pension Fund
 5
 -
 36
 
 
 Post-retirement medical scheme for Rand Refinery employees
 2
 2
 3
 
 
 Short-term portion transferred to other current liabilities
 (14)
 (13)
 (13)
 
 
 Total Provision
 147
 126
 167


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 72
 
 
  PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS (continued)
 
  South Africa defined benefit pension fund
    The plan is evaluated by independent actuaries on an annual basis as at December 31. The valuation as at December 31, 2009 was completed at the beginning of 2010.  The previous statutory valuation had an effective date of December 31, 2005, and was completed in June 2006.   The statutory valuation effective December 31, 2008 is in the process of being finalized and will be submitted to the Registrar of Pension Funds during the first half of 2010. The next statutory valuation will have an effective date no later than December 31, 2011. The accumulated benefit obligation at December 31, 2009 is $230 million.
     
 
 
 
 Information with respect to the defined benefit fund, which includes benefits for AngloGold Ashanti
 employees, for the year ended December 31, is set forth in the table below:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Pension benefits
 
 
 
 2009
 
 2008
 
 2007
 
 
 
 
 
 
 
 $
 
 $
 
 $
 
 
 
 Change in benefit obligation
 
 
 
 
 
 
 
 
 
 
 
 
 Benefit obligation at January 1,
 
 
 
 
 199
 
 257
 
 224
 
 
 
 Service cost
 
 
 
 
 6
 
 6
 
 7
 
 
 
 Interest cost
 
 
 
 
 16
 
 17
 
 18
 
 
 
 Plan participants’ contributions
 
 
 
 
 2
 
 2
 
 2
 
 
 
 Actuarial (gain)/loss
 
 
 
 
 (2)
 
 16
 
 11
 
 
 
 Increase as a result of transfers into the fund
 
 
 
 
 -
 
 -
 
 1
 
 
 
 Benefits paid
 
 
 
 
 (8)
 
 (24)
 
 (12)
 
 
 
 Translation
 
 
 
 
 56
 
 (75)
 
 6
 
 
 
 Benefit obligation at December 31,
 
 
 
 
 269
 
 199
 
 257
 
 
 
 
 
 
 
 Change in plan assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Fair value of plan assets at January 1,
 
 
 
 
 188
 
 293
 
 262
 
 
 
 Actual return on plan assets
 
 
 
 
 32
 
 (7)
 
 27
 
 
 
 Company contributions
 
 
 
 
 5
 
 5
 
 6
 
 
 
 Plan participants’ contributions
 
 
 
 
 2
 
 2
 
 2
 
 
 
 Increase as a result of transfers into the fund
 
 
 
 
 -
 
 -
 
 1
 
 
 
 Benefits paid
 
 
 
 
 (8)
 
 (24)
 
 (12)
 
 
 
 Translation
 
 
 
 
 55
 
 (81)
 
 7
 
 
 
 Fair value of plan assets at December 31,
 
 
 
 
 274
 
 188
 
 293
 
 
 
 
 
 
 
 Funded status at end of year
 
 
 
 
 5
 
 (11)
 
 36
 
 
 
 Net amount recognized
 
 
 
 
 5
 
 (11)
 
 36
 
 
 
 
 
 
 
 Components of net periodic benefit cost
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Service cost
 
 
 
 
 6
 6
 7
 
 
 
 Interest cost
 
 
 
 
 16
 17
 18
 
 
 
 Actuarial gains and losses
 
 
 
 
 (14)
 49
 12
 
 
 
 Expected return on assets
 
 
 
 
 (20)
 (26)
 (28)
 
 
 
 Net periodic benefit cost
 
 
 
 
 (12)
 46
 9
 
 
 
 
 
 
 
 Assumptions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Weighted-average assumptions used to determine benefit obligations at
 December 31,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Discount rate
 
 
 
 
 9.25%
 
 7.25%
 
 8.25%
 
 
 
 Rate of compensation increase
 (1)
 
 
 
 7.50%
 
 5.25%
 
 6.00%
 
 
 
 
 
 Weighted-average assumptions used to determine the net periodic
 benefit cost for the years ended December 31,
 
 
 
 
 
 
 
 
 
 
 
 
 Discount rate
 
 
 
 
 9.25%
 
 7.25%
 
 8.25%
 
 
 
 Expected long-term return on plan assets
 
 
 
 
 10.63%
 
 9.28%
 
 11.14%
 
 
 
 Rate of compensation increase
 (1)
 
 
 
 7.50%
 
 5.25%
 
 6.00%
 
 
 
 Pension increase
 
 
 
 
 4.95%
 
 3.60%
 
 4.73%
 
 
 
 
 
 
 (1)
 The short-term compensation rate increase is 7% (2008: 10%) and the long-term compensation rate increase is 7.50% (2008: 5.25%).


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 27.
 PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS (continued)
 
  
 
   
 
 
  
  
  
 
 Pension benefits
 
  
  
   
 2009
 
 2008
 
  
  
   
 %
 
 %
 
  
 Plan assets
 
   
   
  
   
  
   
   
   
  
   
 
 
 
  
 Asset category
 
   
   
  
   
  
  
   
  
  
  
  
   
  
  
  
  
   
  
  
  
  
   
  
  
 
 
 
  
 Fair value of plan assets
 
   
  
   
  
   
  
  
   
 2009
 
 2008
 
  
  
   
 $
 
 $
 
  
  
   
   
  
  
   
   
  
  
   
   
  
  
   
   
  
  
   
   
  
  
   
   
  
  
   
   
 
  Fair value is based on quoted market prices as at December 31, 2009 and 2008.  The value of the securities in the Company’s employee pension plans have been adversely impacted by market volatility in 2008.  The declines had a substantial impact on the funded status of the plans in 2008.
 
  Investment policy
    The Trustees have adopted a long-term horizon in formulating the Fund’s investment strategy, which is consistent with the term of the Fund’s liabilities.  The investment strategy aims to provide a reasonable return relative to inflation across a range of market conditions.
    The Trustees have adopted different strategic asset allocations for the assets backing pensioner and active member liabilities.  The strategic asset allocation defines what proportion of the Fund’s assets should be invested in each major asset class.  The Trustees have then selected specialist investment managers to manage the assets in each asset class according to specific performance mandates instituted by the Trustees.
    The Trustees have also put in place a detailed Statement of Investment Principles that sets out the Fund’s overall investment philosophy and strategy.
    Fund returns are calculated on a monthly basis, and the performance of the managers and Fund as a whole is formally reviewed by the Fund’s Investment Sub-Committee at least every six months.
 
  
 
   
  2009
 
  
 
 2008
 
  
 
  
 
  No. of
 Percentage of
 Fair Value
 No. of
 Percentage of
 Fair Value
 
 
  
 
  Shares
 total assets
 $
 Shares
 total assets
 $
 
 
  
 
 Related parties
  
 
  
   
   
   
   
 
    
   
   
   
   
  
 
 
 
 
  
 
 Equity securities
  
 
  
   
   
   
   
 
   
   
   
   
   
   
   
  
 
 
 
 
  
 
 Other investments exceeding 5% of
 total plan assets
  
 
  
   
   
   
   
   
   
 
 Equities
  
 
  
   
   
   
   
   
   
 
   
   
   
   
   
   
   
   
 
   
   
   
   
   
   
   
   
 
 Bonds


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 74
 
 
  PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS (continued)
 
 
 
 
 Cash flows
 
 
 
 
 
 
 
 
 
 
 
 Contributions
 
 
 
 
 
 
 
 
 
 
 
 The Company expects to contribute $6 million (2009: $4 million) to its pension plan in 2010.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 $
 
 
 
 
 
 Estimated future benefit payments
 
 
 
 
 
 
 
 
 
 
 
 The following pension benefit payments, which reflect the expected future service, as appropriate, are
 expected to be paid:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 2010
 17
 
 
 
 
 
 2011
 17
 
 
 
 
 
 2012
 17
 
 
 
 
 
 2013
 17
 
 
 
 
 
 2014
 17
 
 
 
 
 
 2015 – 2019
 91
 
 
 
  South Africa post-retirement medical benefits
    The provision for post-retirement medical funding represents the provision for health care benefits for employees and retired employees and their registered dependants.  The post-retirement benefit costs are assessed in accordance with the advice of independent professionally qualified actuaries.  The actuarial method used is the projected unit credit funding method.  This scheme is unfunded.  The last actuarial valuation was performed at December 31, 2009.
 
 
 
 
 Information with respect to the defined benefit liability, which includes post-retirement medical benefits for AngloGold
 Ashanti South Africa employees, for the year ended December 31, is set forth in the table below:
 
 
 
 
 
 
 
 
 
 
 
 Other benefits
 
 
 
 
 2009
 
 2008
 
 2007
 
 
 
 
 
 
 
 $
 
 $
 
 $
 
 
 
 Change in benefit obligation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Benefit obligation at January 1,
 
 
 
 
 115
 
 168
 
 159
 
 
 
 Service cost
 
 
 
 
 -
 
 1
 
 1
 
 
 
 Interest cost
 
 
 
 
 9
 
 11
 
 12
 
 
 
 Benefits paid
 
 
 
 
 (10)
 
 (11)
 
 (11)
 
 
 
 Actuarial loss/(gain)
 
 
 
 
 4
 
 (8)
 
 1
 
 
 
 Translation
 
 
 
 
 31
 
 (46)
 
 6
 
 
 
 Benefit obligation at December 31,
 
 
 
 
 149
 
 115
 
 168
 
 
 
 Unfunded status of the end of the year
 
 
 
 
 (149)
 
 (115)
 
 (168)
 
 
 
 Net amount recognized
 
 
 
 
 (149)
 
 (115)
 
 (168)
 
 
 
 
 
 
 Components of net periodic benefit cost
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Service cost
 
 
 
 
 -
 
 1
 
 1
 
 
 
 Interest cost
 
 
 
 
 9
 
 11
 
 12
 
 
 
 Actuarial gains and losses
 
 
 
 
 4
 
 (8)
 
 1
 
 
 
 
 
 
 
 
 13
 
 4
 
 14
 
 
 
 
 
 
 The assumptions used in calculating the above amounts are:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Discount rate
 
 
 
 
 9.25%
 
 7.25%
 
 8.25%
 
 
 
 Expected increase in health care costs
 
 
 
 
 7.00%
 
 5.50%
 
 6.75%
 
 
 
 
 
 
 Assumed health care cost trend rates at December 31,
 
 
 
 
 
 
 
 
 
 
 
 
 Health care cost trend assumed for next year
 
 
 
 
 7.00%
 
 5.50%
 
 6.75%
 
 
 
 Rate to which the cost trend is assumed to decline (ultimate trend rate)
 
 
 
 7.00%
 
 5.50%
 
 6.75%
 
 
 
 
 
 
 Assumed health care cost trend rates have a significant effect on the
 amounts reported for health care plans.  A one percentage-point change in assumed health care cost trend rates would have the following effect:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1-percentage point
 
 1-percentage point
 
 
 
 
 
 
 
 
 
 
 
 
 increase
 
 decrease
 
 
 
 
 Effect on total service and interest cost
 
 
 
 
 
 
 
 
 
 2
 
 (1)
 
 
 
 Effect on post-retirement benefit obligation
 
 
 
 
 
 
 
 
 
 16
 
 (14)


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 75
 
 
  PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS (continued)
 
 
 
 
 Cash flows
 
 
 
 
 
 
 
 
 
 
 
 Post-retirement medical plan
 
 
 
 
 
 
 
 
 
 
 
 The Company expects to contribute $14 million (2009: $22 million) to the post-retirement medical plan in 2010.
 
 
 
 
 
 
 
 
 
 
 $
 
 
 
 
 
 
 
 Estimated future benefit payments
 
 
 
 
 
 
 The following medical benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:
 
 
 
 
 
 
 
 
 
 2010
 14
 
 
 
 
 
 2011
 14
 
 
 
 
 
 2012
 14
 
 
 
 
 
 2013
 15
 
 
 
 
 
 2014
 15
 
 
 
 
 
 2015 – 2019
 74
 
 
 
  Other defined benefit plans
    Other defined benefit plans include the Ashanti Retired Staff Pension Plan, the Obuasi Mines Staff Pension Scheme, the Post-retirement medical scheme for Rand Refinery employees, the Retiree Medical Plan for North American employees, the Supplemental Employee Retirement Plan for North America (USA) Inc. employees and the Nuclear Fuels South Africa (NUFCOR) – Retiree Medical Plan for Nufcor South African employees.
 
  
 
  been aggregated in the tables of change in benefit obligations, change in plan assets and components of net periodicbenefit cost as follows:
 
  
 
 
 
  
 
 Aggregated information in respect of the other defined benefit plans, for the year ended December 31, is set
 forth in the table below:
 
  
 
 
 
 
 
 
 
 
 
 
 2009
 
 
 2008
 
 
 2007
 
 
 
 
 
 
 
 
 
 $
 
 
 $
 
 
 $
 
 
 
 
 
 
 
 
 
 Change in benefit obligations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Balance at January 1,
 
 
 
 17
 
 
 18
 
 
 19
 
 
 
 
 
 Interest cost
 
 
 
 -
 
 
 -
 
 
 1
 
 
 
 
 
 Benefits paid
 
 
 
 (1)
 
 
 (1)
 
 
 (1)
 
 
 
 
 
 Translation
 
 
 
 2
 
 
 -
 
 
 (1)
 
 
 
 
 
 Balance at December 31,
 
 
 
 18
 
 
 17
 
 
 18
 
 
 
 
 
 
 
 
 
 Change in plan assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Fair value of plan assets at January 1,
 
 
 
 6
 
 
 9
 
 
 8
 
 
 
 
 
 Actual return on plan assets
 
 
 
 -
 
 
 (1)
 
 
 -
 
 
 
 
 
 Translation
 
 
 
 2
 
 
 (2)
 
 
 1
 
 
 
 
 
 Fair value of plan assets at December 31,
 
 
 
 8
 
 
 6
 
 
 9
 
 
 
 
 
 
 
 
 
 Unfunded status at end of year
 
 
 
 (10)
 
 
 (11)
 
 
 (9)
 
 
 
 
 
 Net amount recognized
 
 
 
 (10)
 
 
 (11)
 
 
 (9)
 
 
 
 
 
 
 
 
 
 Components of net periodic benefit cost
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Interest cost
 
 
 
 -
 
 
 -
 
 
 1
 
 
 
 
 
 Actuarial gains and losses
 
 
 
 -
 
 
 1
 
 
 -
 
 
 
 
 
 
 
 
 
 -
 
 
 1
 
 
 1


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 76
 
 
  PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS (continued)
 
 
 
 
 Cash flows
 
 
 
 
 
 
 
 
 
 
 
 The other retirement defined benefit plans are all closed to new members and current members are either retired or deferred
 members.  The Company does not make a contribution to these plans.
 
 
 
 
 
 
 
 
 
 
 $
 
 
 
 
 
 
 
 
 
 Estimated future benefit payments
 
 
 
 
 
 
 
 
 
 
 
 The following pension benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:
 
 
 
 
 
 2010
 1
 
 
 
 
 
 2011
 1
 
 
 
 
 
 2012
 1
 
 
 
 
 
 2013
 1
 
 
 
 
 
 2014
 1
 
 
 
 
 
 2015 – 2019
 5
 
 
 
  Defined contribution funds
    Contributions to the various retirement schemes are fully expensed during the year and the cost of contributions to retirement benefits for the year amounted to $53 million (2008: $49 million, 2007: $51 million).
 
  Australia (Sunrise Dam)
  The region contributes to the Australian Retirement Fund for the provision of benefits to employees and their dependants on retirement, disability or death.  The fund is a multi-industry national fund with defined contribution arrangements.  Contribution rates by the operation on behalf of employees varies, with minimum contributions meeting compliance requirements under the Superannuation Guarantee legislation.  Members also have the option of contributing to approved personal superannuation funds.  The contributions by the operation are legally enforceable to the extent required by the Superannuation Guarantee legislation and relevant employment agreements. The cost to the Company of all these contributions amounted to $4 million (2008: $3 million
 (1)
  (1)
   (1)
  
  Namibia (Navachab)
  Navachab employees are members of a defined contribution provident fund.  The fund is administered by the Old Mutual Insurance Company.  Both the Company and the employees contribute to this fund.  The cost of providing retirement benefits for the year amounted to $1 million (2008: $1 million, 2007: $1 million).
 
  Tanzania (Geita)
  Geita does not have a retirement scheme for employees. Tanzanian nationals contribute to the National Social Security Fund (NSSF) or the Parastatal Provident Fund (PPF), depending on the employee’s choice, and the Company also makes a contribution on the employee’s behalf to the same fund. On leaving the Company, employees may withdraw their contribution from the fund. From July 2005, the Company has set up a supplemental provident fund which is administered by the PPF with membership available to permanent national employees on a voluntary basis. The Company makes no contribution towards any retirement schemes for contracted expatriate employees. The Company contributes to the NSSF on behalf of expatriate employees. On termination of employment the Company may apply for a refund of contributions from the NSSF.
 
  North America (Cripple Creek & Victor)
  AngloGold Ashanti USA sponsors a 401(k) savings plan whereby employees may contribute up to 60 percent of their salary, of which up to 5 percent is matched at a rate of 150 percent by AngloGold Ashanti USA. AngloGold Ashanti USA's contributions were $2 million (2008: $2 million, 2007: $1 million).


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 77
 
 
  PROVISION FOR PENSION AND OTHER POST-RETIREMENT MEDICAL BENEFITS (continued)
 
  South America (AngloGold Ashanti Brasil Mineração, Cerro Vanguardia and Serra Grande)
  The AngloGold Ashanti Limited South America region operates defined contribution arrangements for their employees in Brazil. These arrangements are funded by the operations (basic plan) and operations/employees (optional supplementary plan).  A PGBL (Plano Gerador de Beneficio Livre) fund, similar to the American 401 (k) type of plan was started in December 2001. Administered by Bradesco Previdencia e Seguros (which assumes the risk for any eventual actuarial liabilities), this is the only private pension plan sponsored by the Company in the country.  Employees in Argentina contribute 11 percent of their salaries towards the Argentinean government pension fund.  The Company makes a contribution of 17 percent of an employee’s salary on behalf of employees to the same fund. Contributions amounted to $1 million (2008: $3 million, 2007: $5 million).
 
  Ghana and Guinea (Iduapriem, Obuasi and Siguiri)
  The Company’s mines in Ghana and Guinea contribute to provident plans for their employees which are defined contribution plans.  The funds are administered by Boards of Trustees and invested mainly in Ghana and Guinea government treasury instruments, fixed term deposits and other investments.  The costs of these contributions for the year amounted to $4 million (2008: $4 million, 2007: $4 million).
 
  South Africa (Great Noligwa, Kopanang, Moab Khotsong, Mponeng, Savuka, Tau Lekoa and TauTona)
  South Africa contributes to various industry-based pension and provident retirement plans which cover substantially all employees and are defined contribution plans. These plans are all funded and the assets of the schemes are held in administrated funds separately from the Company's assets. The cost of providing these benefits amounted to $41 million (2008: $36 million, 2007: $36 million).
 
  SEGMENT AND GEOGRAPHICAL INFORMATION
 
  The Company produces gold as its primary product and does not have distinct divisional segments in terms of principal business activity, but manages its business on the basis of different geographic segments. During 2009, the Company’s Chief Operating Decision Maker, defined as the Executive Management team, changed the basis of segment reporting as a result of a re-alignment of the management reporting structure.  Individual members of the Executive Management team are responsible for geographic regions of the business.  Where applicable, the corresponding items of segment information for prior periods presented have been restated to reflect this.
 
  
 Year ended December 31
 
 2009
 2008
 2007
 
 Business segment data
 $
 $
 $
 
 Revenues


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 78
 
 
  SEGMENT AND GEOGRAPHICAL INFORMATION (continued)
 
  
 Year ended December 31
 
 2009
 2008
 2007
 
 Business segment data
 $
 $
 $
 
 Depreciation and amortization expense
 
                                        
  
 Segment income/(loss)
                                      
  
 Reconciliation of segment income to Net loss - attributable to AngloGold Ashanti
                                                     
 
  
 Segment assets
 
   
   
   (1)
   
    
   (2)
   
    
   (3)
   
    
   
   
    
   
   
    
   Other, including Corporate, Assets held for sale and Non-gold producing subsidiaries
 
   
    
   
   
    
   
   
   (1)
 Includes assets held for sale in Tau Lekoa of $73 million in 2009, Weltevreden of $15 million in 2007 and properties held for saleby Rand Refinery Limited of $1 million (2008: $1 million, 2007: $1 million).
 (2)
 Includes an effective 45 percent interest acquired during 2009 in Kibali Goldmines in the Democratic Republic of the Congo.
 (3)
 Included assets held for sale of Boddington of $781 million in 2008.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 79
 
 
  SEGMENT AND GEOGRAPHICAL INFORMATION (continued)
 
  
 Year ended December 31
 
 2009
 2008
 2007
 
 Business segment data
 $
 $
 $
 
 Expenditure for additions to long-lived assets
                                              
 
 
 
 Geographical area data
  
 Total revenues
  
      
      
      
      
      
      
      
      
      
      
    
 
 
 
 Long-lived assets by area
 
 
 
 
   
   
   
    
   (1)
   
    
   
   
    
   
   
    
   
   
    
   
   
    
   
   
    
   
   
    (1)
 Includes an effective 45 percent interest acquired during 2009 in Kibali Goldmines in the Democratic Republic of the Congo.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 80
 
  ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS
 
 
 
 Employee share incentive scheme
  At a general meeting held on June 4, 1998, shareholders approved the introduction of the AngloGold Limited Share Incentive Scheme (“Share Incentive Scheme”) for the purpose of providing an incentive to executive directors and senior employees of the Company and its subsidiaries to identify themselves more closely with the fortunes of the Company and also to promote the retention of such employees by giving them an opportunity to acquire shares in the Company. Employees participate in the scheme to the extent that they are granted options and accept them.
    At a general meeting held on April 30, 2002, it was approved that the rules of the Share Incentive Scheme be amended to provide for the exercise of options to be based on a condition, related to the performance of the Company, as determined by the directors and which will be objective and specified.  An employee would only be able to exercise his options after the date upon which he has received written notification from the directors that the previously specified performance condition has been fulfilled or waived.  The options granted prior to May 1, 2002 remained subject to the conditions under which they were granted.  Although there are no automatically convertible unsecured debentures currently in issue under the rules of the Share Incentive Scheme, consequential amendments were approved to the rules of the scheme which effectively made the conversion of debentures subject to the same terms as the exercise of options.
    At December 31, 2009, the maximum number of ordinary shares that may be allocated for the purposes of the scheme is 9,961,618 (December 31, 2008: 9,720,794), equivalent to 2.75 percent of the total number of ordinary shares in issue at that date.
    At the annual general meeting held on April 29, 2005, shareholders approved the amendment to the maximum aggregate number of ordinary shares which may be acquired by any one participant in the scheme from 300,000 to 5 percent of the 2.75 percent attributable to all schemes and plans adopted by shareholders (or 0.1375 percent of the total number of ordinary shares in issue at any one time). At December 31, 2009 the maximum aggregate number of ordinary shares which may be acquired by any one participant in the scheme was 498,080 shares.
    Ordinary shares issued in terms of the Share Incentive Scheme shall, subject to the provisions of the Share Incentive Scheme, rank pari passu with issued shares in all respects, including participation in dividends.
     
 
 
 Total plan employee costs
  On December 31, 2009, the Company has six stock-based compensation plans, which are described below.  Total compensation cost charged against income for these plans was $41 million, $40 million and $33 million for 2009, 2008 and 2007, respectively.
    At the year end, the unallocated balance of shares subject to the Share Incentive Scheme amounts to 6,733,934 (2008: 6,278,998).
 
 
 
 Options
  An option may only be granted to an employee to purchase a certain number of shares, specified by the directors, at the option price payable in accordance with the rules of the Share Incentive Scheme.
     
 
   Time related options
      No further options will be granted under this plan which will terminate on February 1, 2012, being the date on which the last options granted under this plan, may be exercised or will expire.
    Resulting from the rights offer made to ordinary shareholders, which was finalized during July 2008, additional options were awarded to existing option holders in terms of the anti-dilution provision of the original grant.  As the employees did not receive any benefit in excess of the original grant value, no additional compensation cost was recognized.  Approximately one option was awarded for every four held at an exercise price of R194.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 81
 
 
 
 ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS (continued)
 
  
 A summary of time related options showing movement from the beginning of the year to the end of the year, ispresented below:
 
 
 2009
 
  Weighted-
 
 2009
 average
 
 Options    exercise price
 
 (000)
 R
 
                 The total intrinsic value of options outstanding at year-end was R5 million (2008: R13 million), with a weighted averageremaining contractual term of 1.12 years (2008: 1.7 years). The intrinsic value of options exercised during the yearsended December 31, 2009, 2008 and 2007 was R15 million, R15 million and R48 million, respectively.
  During the year ended December 31, 2007 the Company recognized compensation expense related to time-based awards of less than $1 million.  There was no income statement charge for the current year, as the total compensation cost was expensed up to date of vesting in 2007.
 
  Performance related options
  Performance related options granted vest in full, three years after date of grant, provided that the conditions on which the options were granted, namely related to the performance of the Company (growth in an adjusted earnings per share) as determined by the directors, are met.  If the performance conditions are not met at the end of the first three year period, then performance is re-tested each year over the ten year life of the option on a rolling three year basis.  Options are normally exercisable, subject to satisfaction of the performance conditions, between three and ten years from date of grant.
    The performance related options’ compensation expense is fixed at grant date and recorded when it is probable that the performance criteria will be met.
    Resulting from the rights offer made to ordinary shareholders, which was finalized during July 2008, additional options were awarded to existing option holders in terms of the anti-dilution provision of the original grant.  As the employees did not receive any benefit in excess of the original grant value, no additional compensation cost was recognized.  Approximately one option was awarded for every four held at an exercise price of R194.
    No further performance related options will be granted and all options granted hereunder will terminate on November 1, 2014, being the date on which the last options granted under these criteria may be exercised or will expire.
 
  
 A summary of performance related options showing movement from the beginning of the year to the end of the year, is presented below:
 
 
 2009
 
 
 Weighted-
 
  average
 
 2009
 exercise
 
 Options
 price
 
 (000)
 R


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 82
 
 
 ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS (continued)
 
 
 The total intrinsic value of options outstanding at year-end was R42 million (2008: R18 million), with a weighted average remaining contractual term of 4 years (2008: 5 years). The intrinsic value of options exercised during the years ended December 31, 2009, 2008 and 2007 was R49 million, R3 million and R53 million, respectively.
    All options which have not been exercised within ten years from the date on which they were granted automatically expire.
    During the year ended December 31, 2007 the Company recognized $3 million compensation expense related to performance related awards.  There was no income statement charge for the current year, as the total compensation cost was expensed up to date of vesting in 2007.
    During 2009, a total of 813,859 common shares were issued under the share incentive scheme in terms of time-based and performance awards.
        
 
  
 
 Range of exercise
 prices
 R
 Quantity of options
 within range
 (000)
 Weighted average
 exercise price
 R
 Weighted average
 contractual life
 Years
 
 
   
     
   
     
   
      (1)
   
 (1)
 Represents a total of 28,252 time related options and 639,975 performance related options outstanding.
      Since December 31, 2009 to and including March 31, 2010, 13,673 options (granted in respect of time and performance related options) have been exercised.
    
  Bonus Share Plan (“BSP”) and Long-Term Incentive Plan (“LTIP”)
  At the annual general meeting held on April 29, 2005, shareholders approved the introduction of the BSP and LTIP and the discontinuation of the previous share incentive scheme.  Options granted under the previous share incentive scheme will remain subject to the conditions under which they were originally granted.
  
  Bonus Share Plan (“BSP”)
  The BSP is intended to provide effective incentives to eligible employees.  An eligible employee is one who devotes substantially the whole of his working time to the business of the Company, any subsidiary of the Company or a company under the control of AngloGold Ashanti.  An award in terms of the BSP may be made at any date at the discretion of the board, the only vesting condition being three years’ service for awards granted prior to 2008. For all BSP awards granted from 2008, 40 percent will vest after one year and the remaining 60 percent will vest after two years.  An additional 20 percent of the original award will be granted to employees if the full award remains unexercised after three years.  The board is required to determine a BSP award value and this will be converted to a share amount based on the closing price of the Company shares on the JSE on the last business day prior to the date of grant.
        During 2008, additional BSP awards were made to all scheme participants as a result of the rights offer to ordinary shareholders.  The award was made in terms of the anti-dilution provision of the original grant.  Employees did not receive any benefit in excess of the original grant value and no additional compensation cost was recognized.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 83
 
 
 
 ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS (continued)
 
  
   Award date (unvested awards and awards vested during the year)
 2009
 2008
 2007
 2006
 
                                 
  
 A summary of time related equity settled compensation scheme showing movement from the beginning of the year tothe end of the year, is presented below:
   
 2009
 
  
 Options
 
  
 (000)
 
                   The total intrinsic value of awards outstanding at year-end was R397 million (2008: R238 million), with a weightedaverage remaining contractual term of 7 years (2008: 8 years). The intrinsic value of awards exercised during the yearsended December 31, 2009, 2008 and 2007 was R75 million, R28 million and R13 million, respectively.  BSP awards areissued with no exercise price.
  Long-Term Incentive Plan (“LTIP”)
  The LTIP is an equity settled share-based payment arrangement, intended to provide effective incentives for executives to earn shares in the Company based on the achievement of stretched Company performance conditions. Participation in the LTIP will be offered to executive directors, executive officers/management and selected members of senior management.  An award in terms of the LTIP may be granted at any date during the year that the board of the Company determine and may even occur more than once a year.  The board is required to determine an LTIP award value and this will be converted to a share amount based on the closing price of the Company shares on the JSE on the last business day prior to the date of grant.
    The main performance conditions in terms of the LTIP issued in 2006 and 2007 are: •   
  up to 40 percent of an award will be determined by the performance of total shareholder returns compared with that
  
  
  
    The main performance conditions in terms of the LTIP issued in 2008 and 2009 are: •  up to 30 percent of an award will be determined by the performance of total shareholder returns compared with that


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 84
 
 
 ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS (continued)
 
  During 2008, additional LTIP awards were made to all scheme participants as a result of the rights offer to ordinary shareholders.  The award was made in terms of the anti-dilution provision of the original grant.  Employees did not receive any benefit in excess of the original grant value and no additional compensation cost was recognized.
 
  
    Award date (unvested awards and awards vested during the year)
 2009
 2008
 2007
 2006
 
                       A summary of time related equity settled compensation scheme showing movement from the beginning of the year to the end of the year, is presented below:
  
 
 
 2009
 
 
 
 Options
 
 
 
  (000)
 
                  
  The total intrinsic value of awards outstanding at year-end was R387 million (2008: R250 million), with a weighted average remaining contractual term of 7 years (2008: 8 years).  The intrinsic value of awards exercised during the years ended December 31, 2009 and 2008 was R22 million and R11 million, respectively.  No awards were exercised during 2007.  LTIP awards are issued with no exercise price.
  
  During the years ended December 31, 2009, 2008 and 2007 the Company recognized a compensation expense of $27 million, $20 million and $12 million, respectively, related to BSP and LTIP awards.
  
  As of December 31, 2009, there was $18 million of unrecognized compensation cost related to unvested awards of the BSP and LTIP plans.  This cost is expected to be recognized over a weighted-average period of approximately 2 years.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 85
 
 
 
 ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS (continued)
 
 
 Employee Share Ownership Plan (“ESOP”)
  On December 12, 2006, AngloGold Ashanti announced the finalization of the Bokamoso Employee Share Ownership Plan (Bokamoso ESOP) for employees of the South African operations.  The Bokamoso ESOP creates an opportunity for AngloGold Ashanti and the unions to ensure a closer alignment of the interest between South African based employees and the Company. Participation is restricted to those employees not eligible for participation in any other South African share incentive plan.
    In order to facilitate these transactions the Company established a trust to acquire and administer the ESOP shares.  AngloGold Ashanti allotted and issued free ordinary shares to the trust and also created, allotted and issued E ordinary shares to the trust for the benefit of employees.  The Company also undertook an empowerment transaction with a Black Economic Empowerment investment vehicle, Izingwe Holdings (Proprietary) Limited (“Izingwe”) and recorded a cost of $19 million during 2006, which was included in general and administrative expenses.  The Company also created, allotted and issued E ordinary shares to Izingwe.  The key terms of the E ordinary share are:
     AngloGold Ashanti will have the right to cancel the E ordinary shares, or a portion of them, in accordance with the ESOP and Izingwe cancellation formula, respectively;
      the E ordinary shares will each be entitled to receive a cash dividend equal to one-half of the dividend per ordinary share declared by the Company from time to time and a further one-half is included in the calculation of the strike price calculation.
        The fair value of each free share awarded in 2008 was R188 (2007: R306).  The fair value is equal to the market value at the date-of-grant.  Dividends declared and paid to the trust will accrue and be paid to ESOP members, pro rata to the number of shares allocated to them.  An equal number of shares vests from 2009, and each subsequent year up to expiry date of November 1, 2013.
 
  
 A summary of time related equity settled compensation scheme showing movement from the beginning of the year to theend of the year, is presented below:
  
 
 2009
 
 
 
 Options
 
 
 
 (000)
 
                  
  The total intrinsic value of awards outstanding at year-end was R204 million (2008: R216 million), with a weighted average remaining contractual term of 2 years (2008: 3 years). The intrinsic value of awards exercised during the years ended December 31, 2009, 2008 and 2007 was R58 million, R14 million and R14 million, respectively.
    The Company awarded the right to acquire approximately one AngloGold Ashanti ordinary share for every four free ordinary shares held in the rights offer finalized during July 2008.  The benefit to employees was in terms of the anti-dilution provision of the original grant and no additional compensation cost was recognized.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 86
 
 
 
 ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS (continued)
 
   
 
  The average fair value of the E ordinary shares awarded to employees in 2008 was R13 (2007: R79) per share.  Dividends declared in respect of the E ordinary shares will firstly be allocated to cover administration expenses of the trust, whereafter it will accrue and be paid to ESOP members, pro rata to the number of shares allocated to them.  At each anniversary over a five year period commencing on the third anniversary of the original 2006 award, the Company will cancel the relevant number of E ordinary shares as stipulated by a cancellation formula.  Any E ordinary shares remaining in the tranche will be converted to ordinary shares for the benefit of the employees.  All unexercised awards will be cancelled on May 1, 2014.
 
 
  The value of each share granted is estimated on the date of grant using the Black-Scholes option-pricing model.  The Black-Scholes option-pricing model requires the input of subjective assumptions, including the expected term of the option award and stock price volatility.  These estimates involve inherent uncertainties and the application of management judgment.  In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those options expected to vest.  As a result, if other assumptions had been used, the Company’s recorded compensation expense could have been different from that reported.
 
 
 
 
  
 
  
 
 
 
  
  2008
 2007
 2006
 
 
 
  
     
 
   
     
 
   
     
 
 
 
 
 A summary of E ordinary shares, awarded to employees, showing movement from the beginning of the year to the endof the year, is presented below:
 
 
 
 
 
 
 
 
  
  
  
 
  
 
 2009
 
 
 
 
 
  
  
  
 
  
 
 Weighted-
 
 
 
 
 
  
  
  2009
 
 
 average
 
 
 
 
 
  
  
  Options
 
 
 exercise price
 
 
 
 
 
  
  
  (000)
 
 
 R
 
 
 
 
 
  
  
   
   
  
 
 
  
  
   
   
  
 
 
  
  
   
   
  
 
 
  
  
   
   
  
 
 
  
  
   
   
  
 
 
 
 
  
  
   
   
  
 
 
 
 
  
  
   
   
  
 
 The options outstanding at year-end had no intrinsic value as the share price at year-end of R306 was lower than the weighted average exercise price of R347 (2008: total intrinsic value of awards outstanding totaled Rnil million). The options have a weighted average remaining contractual term of 2 years (2008: 3 years). The intrinsic value of options exercised during the years ended December 31, 2009, 2008 and 2007 was less than R1 million per year.
 
 
 
 Weighted average exercise price is calculated as the initial grant price of R288 plus interest factor less dividend apportionment. This value will change on a monthly basis.
 
 
 
 During the years ended December 31, 2009, 2008 and 2007, the Company recognized a compensation expense of $12 million, $14 million and $18 million, respectively, related to the ESOP scheme.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 87
 
 
 
 ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS (continued)
 
 
 In addition to the above share scheme expenses relating to the Bokamoso ESOP plan, the Company awarded the right to acquire approximately one AngloGold Ashanti ordinary share for every four E ordinary shares held in the rights offer finalized during July 2008.  The benefit to employees was in excess of the anti-dilution provision of the original grant and additional compensation cost was recognized.  The fair value at grant date of these rights awarded to Bokamoso was calculated at R76 per right.  The income statement charge relating to the rights offer to Bokamoso participants was $6 million in 2008.  As the rights were issued as fully vested, the expense was recorded immediately.
 
 
 
 As of December 31, 2009, there was $16 million of unrecognized compensation cost related to unvested awards of the ESOP scheme.  This cost is expected to be recognized over the remaining scheme term of 4 years.
 
 
 Cash Settled Share Incentive Scheme
 
 
 
 Ghana Employee Share Ownership Plan (“Ghana ESOP”)
 
 A memorandum of understanding was signed with the Ghanaian employees on April 28, 2009 to introduce the Ghana ESOP under defined rules.
 
 
 
 In terms of the rules of the scheme, every eligible employee is entitled to 20 AngloGold Ashanti Limited share appreciation rights (“phantom shares”), which will be paid out in four equal tranches, commencing May 2009 and ending in May 2012.
 
 
 
 The value of the rights are equal to the value of AngloGold Ashanti Limited American Depositary receipts (“ADR’s”) as listed on the New York Stock Exchange, converted into Ghanaian Cedis at the prevailing US dollar exchange rate.
 
 
 
 The share price on the day of issue as of April 29, 2009 was $32.15, whilst the share price used in the payment of the first tranche was $28.46 per share.
 
 
 
 
 The award of share appreciation rights to employees
 
 
    
 
  A summary of share appreciation rights showing movement from the beginning of the year to the end of the year, is presented below:
 
 
 
   
 
  Number of
 Rights
 
 
 
  
    
 
   
    
 
   
    
 
   
    
 
   
    
 
   
    
 
  The income statement charge for the current year was $2 million.  The liability recognized in the consolidated balance sheet in respect of unexercised rights was $1 million.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 88
 
  SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION
    It is the Company’s intention that from time to time its wholly-owned subsidiary AngloGold Ashanti Holdings plc (“IOMco”) may issue debt securities which will be fully and unconditionally guaranteed by AngloGold Ashanti Limited (being the “Guarantor”). IOMco is an Isle of Man registered company that holds certain of AngloGold Ashanti’s operations and assets located outside South Africa (excluding certain operations and assets in the United States, Australia and Africa).  The following is condensed consolidating financial information for the Company as of December 31, 2009 and 2008 and for the years ended December 31, 2009, 2008 and 2007, with a separate column for each of AngloGold Ashanti Limited as Guarantor, IOMco as Issuer and the other subsidiaries of the Company combined (the “Non-Guarantor Subsidiaries”).  For the purposes of the condensed consolidating financial information, the Company carries its investments under the equity method.  The following supplemental condensed consolidating financial information should be read in conjunction with the Company’s consolidated financial statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 30.
 SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
 ANGLOGOLD ASHANTI LIMITED
 
 Condensed consolidating statements of income
 FOR THE YEAR ENDED DECEMBER 31,
 (In millions)
 
  
     2009
 2009
 2009
 2009
 2009
 
    $
 $
 $
 $
 $
 
    AngloGold Ashanti
 IOMco
 Other subsidiaries
 Cons adjustments
 Total
 
 
 
 
 
 
  
   
   
  
 
 
 
 
 
  
   
  
 
 Sales and other income
 
  
   
    
   
  
  
   
    
   
  
  
   
   
   
   
 Costs and expenses
 
  
   
    
   
  
  
   
    
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
 (Loss)/income before income tax provision
 
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
 (Loss)/income from continuing operations
 
  
   
   
   
   
  
  
   
   
   
   
 (Loss)/income after discontinued operations
 
  
   
   
   
   
  
  
   
   
   
   
 Net (loss)/income
 
  
   
   
   
   
  
  
   
   
   
   
  Net (loss)/income  attributable to AngloGold Ashanti
 
  
   
   
   
   
  The accompanying notes are an integral part of these Consolidated Financial Statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 30.
 SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
 ANGLOGOLD ASHANTI LIMITED
 
 Condensed consolidating statements of income
 FOR THE YEAR ENDED DECEMBER 31,
 (In millions)
 
  
     2008
 2008
 2008
 2008
 2008
 
    $
 $
 $
 $
 $
 
    AngloGold Ashanti
 IOMco
 Other subsidiaries
 Cons adjustments
 Total
 
 
 
 
 
 
  
   
   
  
 
 
 
 
 
  
   
  
 
 Sales and other income
 
  
   
    
   
  
  
   
    
   
  
  
   
   
   
   
 Costs and expenses
 
  
   
    
   
  
  
   
    
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
 Income/(loss) before income tax provision
 
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
  
  
   
   
   
   
 (Loss)/income from continuing operations
 
  
   
   
   
   
  
  
   
   
   
   
 (Loss)/income after discontinued operations
 
  
   
   
   
   
  
  
   
   
   
   
 Net (loss)/income
 
  
   
   
   
   
  
  
   
   
   
   
  Net (loss)/income  attributable to AngloGold Ashanti
 
  
   
   
   
   
  The accompanying notes are an integral part of these Consolidated Financial Statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 30.
 SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
 ANGLOGOLD ASHANTI LIMITED
 
 Condensed consolidating statements of income
 FOR THE YEAR ENDED DECEMBER 31,
 (In millions)
 
 
 
 
 
 
 
 
 
  
     2007
 2007
 2007
 2007
 2007
 
    $
 $
 $
 $
 $
 
    AngloGold Ashanti
 IOMco
 Other subsidiaries
 Cons adjustments
 Total
 
                Sales and other income
                  Costs and expenses
                                                                                        (Loss)/income before income tax provision
                        (Loss)/income from continuing operations
            (Loss)/income after discontinued operations
            Net (loss)/income
            Net (loss)/income  attributable to AngloGold Ashanti
           The accompanying notes are an integral part of these Consolidated Financial Statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 30
 SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
 ANGLOGOLD ASHANTI LIMITED
 
 Condensed consolidating balance sheets
 AT DECEMBER 31,
 (In millions)
  
     2009
 2009
 2009
 2009
 2009
 
    $
 $
 $
 $
 $
 
    AngloGold Ashanti
 IOMco
 Other subsidiaries
 Cons adjustments
 Total
 
 
 
    
  
  
 ASSETS
 
 
 Current Assets
 
      
  
      
  
      
  
      
 Property, plant and equipment, net
 
      
 Acquired properties, net
 
      
 Goodwill
 
      
 Other intangibles, net
 
      
 Derivatives
 
      
 Other long-term inventory
 
      
 Materials on the leach pad
 
      
 Other long-term assets and deferred taxation assets
 
      
 Total assets
 
      
 LIABILITIES AND EQUITY
 
 
 Current liabilities including inter-group balances
 
      
 Other non-current liabilities
 
      
 Long-term debt
 
      
 Derivatives
 
      
 Deferred taxation liabilities
 
      
 Provision for environmental rehabilitation
 
      
 Other accrued liabilities
 
      
 Provision for pension and other post-retirement medical benefits
 
      
 Commitments and contingencies
 
      
 Equity
 
      
  
      
  
      
  
      
  
      
  
      
  
      
 Total liabilities and equity
 
      The accompanying notes are an integral part of these Consolidated Financial Statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 30.
 SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
 ANGLOGOLD ASHANTI LIMITED
 
 Condensed consolidating balance sheets
 AT DECEMBER 31,
 (In millions)
  
     2008
 2008
 2008
 2008
 2008
 
    $
 $
 $
 $
 $
 
    AngloGold Ashanti
 IOMco
 Other subsidiaries
 Cons adjustments
 Total
 
 
 
    
  
  
 ASSETS
 
 
 Current Assets
 
      
  
      
  
      
  
      
 Property, plant and equipment, net
 
      
 Acquired properties, net
 
      
 Goodwill
 
      
 Other intangibles, net
 
      
 Derivatives
 
      
 Other long-term inventory
 
      
 Materials on the leach pad
 
      
 Other long-term assets and deferred taxation assets
 
      
 Total assets
 
      
 LIABILITIES AND EQUITY
 
 
 Current liabilities including inter-group balances
 
      
 Other non-current liabilities
 
      
 Long-term debt
 
      
 Derivatives
 
      
 Deferred taxation liabilities
 
      
 Provision for environmental rehabilitation
 
      
 Other accrued liabilities
 
      
 Provision for pension and other post-retirement medical benefits
 
      
 Commitments and contingencies
 
      
 Equity
 
      
  
      
  
      
  
      
  
      
  
      
  
      
 Total liabilities and equity
 
      The accompanying notes are an integral part of these Consolidated Financial Statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 30.
 SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
 ANGLOGOLD ASHANTI LIMITED
 
 Condensed consolidating statements of cash flows
 FOR THE YEAR ENDED DECEMBER 31,
 (In millions)
  
     2009
 2009
 2009
 2009
 2009
 
    $
 $
 $
 $
 $
 
    AngloGold Ashanti
 IOMco
 Other subsidiaries
 Cons adjustments
 Total
 
                 
 Net cash provided by/(used) in operating activities
 
      
  
      
  
                                                    
  
                             
  
      
  
      
 Net cash (used)/generated in investing activities
 
      
  
      
  
      
  
      
  
      
  
      
  
      
  
      
  
      
 Net cash generated/(used) by financing activities
 
      
  
      
  
      
  
      
  
      
  
      
  
      
  
      
 Net increase in cash and cash equivalents
 
      
 Effect of exchange rate changes on cash
 
      
 Cash and cash equivalents - January 1,
 
      Cash and cash equivalents - December 31,
      
 The accompanying notes are an integral part of these Consolidated Financial Statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 30.
 SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
 ANGLOGOLD ASHANTI LIMITED
 
 Condensed consolidating statements of cash flows
 FOR THE YEAR ENDED DECEMBER 31,
 (In millions)
  
     2008
 2008
 2008
 2008
 2008
 
    $
 $
 $
 $
 $
 
    AngloGold Ashanti
 IOMco
 Other subsidiaries
 Cons adjustments
 Total
 
                 
 Net cash (used) in/provided by operating activities
 
      
  
      
  
                                                    
  
                             
  
      
  
      
 Net cash used in investing activities
 
      
  
      
  
      
  
      
  
      
  
      
  
      
  
      
  
      
 Net cash generated/(used) by financing activities
 
      
  
      
  
      
  
      
  
      
  
      
  
      
 Net increase/(decrease) in cash and cash equivalents
 
      
 Effect of exchange rate changes on cash
 
      
 Cash and cash equivalents - January 1,
 
      Cash and cash equivalents - December 31,
      
 The accompanying notes are an integral part of these Consolidated Financial Statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)
 
 
  
 
 30.
 SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
 ANGLOGOLD ASHANTI LIMITED
 
 Condensed consolidating statements of cash flows
 FOR THE YEAR ENDED DECEMBER 31,
 (In millions)
  
     2007
 2007
 2007
 2007
 2007
 
    $
 $
 $
 $
 $
 
    AngloGold Ashanti
 IOMco
 Other subsidiaries
 Cons adjustments
 Total
 
                 
 Net cash provided by/(used) in operating activities
 
      
  
      
  
                                                    
  
                             
  
      
  
      
 Net cash (used)/generated in investing activities
 
      
  
      
  
      
  
      
  
      
  
      
  
      
  
      
  
      
  
      
 Net cash generated by financing activities
 
      
  
      
  
      
  
      
  
      
  
      
 Net increase/(decrease) in cash and cash equivalents
 
      
 Effect of exchange rate changes on cash
 
      
 Cash and cash equivalents - January 1,
 
      Cash and cash equivalents - December 31,
      
 The accompanying notes are an integral part of these Consolidated Financial Statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 
 F - 97
 
  SUBSEQUENT EVENTS
  
  Temporary suspension of operations at Iduapriem and Obuasi mines:
    On February 19, 2010, AngloGold Ashanti announced that following discussions with the Environmental Protection Agency of Ghana (EPA), the Iduapriem mine in Ghana had been temporarily suspended to address potentially adverse environmental impacts arising from the current tailings storage facility. On March 31, 2010 AngloGold Ashanti announced that it had suspended the operation of gold processing at the Obuasi mine pending the implementation of a revised water management strategy to reduce contaminants contained in its discharge.